Roger Middleton Interview
Trading – The Tools (Brokers & Systems)
Which brokers do you use and why?
City Deal for my PEPs. No good reason apart from laziness in shifting to a cheaper brokerage. Deals not cheap, but I have always had good service and deals invariably inside the spread which makes up for the higher commissions. No good for short term trades or shorting.
ODL Securities (formerly Options Direct) for Options. Not the cheapest around, but efficient and invariably helpful.
Interactive Brokers. Fast execution and very low commissions of $0.01 per share.
What software do you use and why?
MyBroker - free Silver service through ODL if you place one option order on-line each month.
AIQ end of day for UK market. I like the data handling, reports, and market breadth indicators which have been invaluable to picking tops and bottoms.
ProphetFinance.com for r/t charting. Looking at using Sierra Charts after much positive comment on T2W, particularly as I already use MyBroker.
Do you have an opinion about trading systems sold to the public?
They make lots of money for the vendors. I wish I had one I could sell.
Do you feel a good system can compete with a good trader?
Nope!
Trading Experiences
In your trading experience, is there one particular trade that stands out as the most dramatic?
Liquidating 90% of my portfolio of tech stocks in one phone call in March 2000.
Selling Telecity TCY at 2253 on 07.09.00 which is the day it reached its all time high - based on intraday reversal from extreme high above the trend. Now 3.25.
Doubling my initial stake in Flying Flowers only to see it halved after a profits warning.
What is the most prominent fallacy in the public’s perception about trading?
Easy bucks when times are good. And that the only way to trade is to buy a sexy stock at a low price and sell it for a higher price later. Under-estimating the amount of work and application required.
How much of a role does luck play in trading success?
I would rather have luck on my side than on the Market Makers' side. But don’t rely on it!
How important is gut feel?
Not at all for entering a trade. But sometimes very useful for getting out. If it doesn’t feel right, get out and watch from the sidelines. I would rather be out and wishing I was in, than in and wishing I was out!
Success & Failure
How do you judge success in your trades?
A compromise of maximum profitability at lowest acceptable risk.
What are the most important elements to becoming a successful trader?
Perseverance, constant study and trade according to your own rules.
Can you describe one of your most successful trades?
Getting out of Tech in March 2000. It was the decision which ensured that I am still here trading today!
Is the joy of winning as intense as the pain of losing?
No. Losing large sums is gut wrenchingly horrible. Small losses are tedious.
Why do most traders lose?
Inadequate money management.
When you do hit a losing streak, how do you handle it?
If I have 4 consecutive losers I stop for the day, and the next 2 trades will be “paper trades” to rebuild confidence.
Is the ability to accept losses a characteristic of a winning trader?
Yes - we all have them - it’s a part of a traders life. Learn to handle them
What was your worst time trading? What went wrong?
After some early success in day trading the US I had 14 consecutive losers. The losses were small in cash terms due to trading small and tight stop-losses, but the hit on self confidence was huge. What could the odds be on making a loss 14 times in a row if I picked trades at random?
Can you describe any specific trading mistakes that you learned from?
Not cutting losses soon enough.
Doing the research, narrowing the list to a small number of stocks, deciding the entry level, and then doing something completely different on a whim!
