John Bartlett, through this interview, provides new traders an excellent direction as they pursue their own development.
How long have you been trading for?
Approximately four years. 1st year foolishly, 2nd year not so foolishly (started to study), 3rd year break even and this year profitably.
How did you first get involved in trading?
My background is financial services, about 10 years prior to finding trading I dabbled in traded options, I lost interest
when it didn’t make me rich in a few weeks, I blew my trial bank and forgot
about it, continued selling executive pension schemes and and a friend sent me a
mail shot from someone charging a lot of money to teach spread betting on futures and shares. It started from there, I spent money on a very poor A4 folder and an out of focus video! At least it started me thinking. With my knowledge of the internet I investigated further, opened an account with a spread betting company and promptly lost five figures in the first six months.
Do you remember your first trades?
Yes over the phone, £5 per point on the Dow, bet long, and it went long, I was up at one stage about £240 and hung on, I ended up at the end of trading showing (as Pan Am used to say) with a negative profit of about £120, and the next day I chased it!!
What were your first few months like? Were you profitable initially?
No I was not, but I always have had certain inward control. I set aside my trading bank, had my up and down days , started to overtrade and get emotionally involved, all the things that relatively new traders do. Luckily I had a reasonably steady income from my agency work. So it didn’t take very long before I realised it was not so easy as I first thought.
Has your trading style changed radically from when you first started?
100%! I started day trading and now I position trade; I tried too hard when I first began; I was amazed at my ability to move world markets with my £2 per point bet! Especially in the opposite direction. I thought I could trade by reading the papers, listening to Bloomberg and CNN; I knew very little about technical analysis, or for that matter about trading.
How did you learn to trade?
When I realised what a real prat I was making of myself, I thought I would look around and get some help. What I found was in the UK there was very little available for the real beginner. Yes there were day courses from about £2,000 a day to £5,000 for a week, Most of these were teaching the Holy Grail and secret systems!! In my opinion a complete rip off. I didn’t want to spend that type of money, I spent over £200 on a postal course, very poor. So I started to buy books on the subject (I now have over 50) ? recommended books, most far too theoretical, very few practical. I also am very familiar with the internet so I spent my time learning and sorting out the wheat from the chaff, or waffle from the facts. It was just time, and sticking to it. It?s amazing what you can do if you are interested in a subject. I was.
Are you a self-taught trader, or did another trader teach you worthwhile lessons?
Totally self-taught, although I have been to trading seminars run by various companies, free and paid for ? they are all trying to get you to open an account or buy this or that system. I thought the insurance industry was full of wise guys but they are saints compared to some trading related companies ? sorry if I?ve been too critical, but?..
Trading ? In Practice
What markets do you trade?
I trade the US markets in the main, Dow & Nasdaq, I specialise in trading US Shares. The hours are more civilised and the information more freely available, which saves a lot of time. I?m a technical analyist, not fundamentalist, but I believe a combination of both is acceptable.
What is your basic approach in analysing and trading the markets?
It?s important not to overdo this area, as you can spend a lifetime looking and not trading. Simply I trade US shares that are: above $10, below $50, have a turnover of 1,000,000 shares traded daily, and most importantly are actually traded by the spread betting company I am using. I list these in watch lists, using the best websites in the States which produce me these lists (in graph form) every day. Or when I decide to trade ? two or three times a week. I look for increasing or decreasing volumes on previous days, I select about six likely candidates to study in more detail. It usually takes me a couple of hours. But most of the work is done by these fantastic websites. Then apply about 10 indicators to each one. Trade the best of them ? I only trade one share at a time. But I may also dabble the Dow during the day for a bit of fun.
How would you define your trading style?
Position/Swing Trader mainly. Although if I?m at my computer during the day I will trade the Dow and the FTSE indices for fun but not usually more than £5 per point.
How often do you make a trade?
Difficult one! I only trade one share at a time, I always use safety. I recheck my positions nightly, so I stay if all?s still OK ? so it could be once a week or it could be 3 times a week. When trading for fun on the Dow (by the way – it?s always serious never for real fun!) and I?m working from home maybe 2 or 3 times in a day max.
Do you prefer to trade long or short and why?
I prefer short ? I suppose it?s down to Newton really ? it’s quite natural for things to fall. Also being a pilot and pointing your aircraft straight up it?s a lot easier to tell when you run out of steam! And then there is only one way to go!
How do you pick your trades?
Basic Screening as described above, but then close technical analysis with my preferred indicators. Trend, MACDs, Stochastics (Slow), OBV, Bollanger , DMI and one of my favourites – Williams %R. and a few others. When they are moving my way ? I trade.
Is there anything you can single out as the most important element in deciding to put on a trade?
Calculate the maximum loss you are prepared to take if the trade goes wrong; apply stops on every trade, no matter how big or small ? every trade!
Do you use trading systems?
No, they don?t work ? however if you can point me in a direction of a trading system that does, and that can control my emotions at the same time ? I?ll spend a serious amount of money and I?ll be first in the line. I?ve tried a lot of them, so I?m not speaking without knowledge. But if just ?one? worked 100% of the time there would be no stock exchange would there? Think about it!
How much do you risk on any single trade?
At last a simple question ? max of 5% of my fund on any one trade or less. I have a number of accounts and the same applies to each one, governed by meticulous record keeping after each trade, whether successful or not.
Do you use stop or limit orders?
Stops EVERY time,
limit orders dependent upon the circumstances
Do you use chart patterns such as reversals and breakouts?
That?s a bit simplistic but Yes, amongst others
Do you use Level 2 data to trade?
No. It’s hard enough to learn proper trading with spreadbetting. Level 2 requires a great deal of concentration, It?s alright if you have the concentration of a rocket scientist and the bladder of a camel (quote – Toni Turner). No. I like space and time. It’s just not for me – too demanding, walking the dogs matters more!
Do you decide where you are getting out before you get in on a trade?
No ? but you never go broke taking a profit no matter how small, and I never look over my shoulder.
How do you decide when to take profits?
When the decisions I made to enter the trade no longer apply ? simple!
Is slippage/bad fills a problem in your trading?
No. You learn to live with varying spreads in volatile markets ? you don?t have to accept the quote.
Do you use the opinions of other traders in making trading decisions, or do you operate completely solo?
Completely 100% solo ? I?ve then only got one person to blame if it goes wrong.
Trading ? The Theory
What are the trading rules you live by?
Money Management ? Money Management ? Money Management. I co-wrote some software on the subject a couple of years ago you can download a trial free from www.merlinsmoneymagic.com. Control your own finances first.
Do you believe chart reading can be used for successful trading?
Yes properly trained technical analysis works ? but not Tarot cards, stars or glass balls!
Are there any technical indicators that you have found to be particularly valuable?
Williams % R I found gives excellent results used properly ? thanks Larry Williams – but there are many good ones
What are your thoughts about using fundamental analysis as an input in trading?
If you deal in shares as I do it’s important to look at simplistic fundamentals on each share but not in detail like PE ratios etc. With crafty accountants in big companies and dodgy directors involved, a big pinch of salt is sometimes required. I never make a decision on fundamentals, that?s for long term investors ? I?m a trader.
Do you ever use contrary opinion as an aid to trading?
How important is having a sound risk/money-management philosophy?
Forget trading if you don?t have it ? it’s the no.1 priority. It?s the only thing, otherwise why are you trading? The market is an expensive place to find out you can?t handle money!
Trading ? The Tools (Brokers & Systems)
Which brokers do you use and why?
A number of spread betting companies.
What software do you use and why?
Only online Java software from the best internet sites. I subscribe to basically three. Am I going to tell you? No!
Do you have an opinion about trading systems sold to the public?
Yes, very strong ones. Perhaps unprintable here!
Do you feel a good system can compete with a good trader?
Not a chance! However I do not know of an emotional computer, do you? I?ve never met an unemotional trader ? but I?m getting close.
In your trading experience, is there one particular trade that stands out as the most dramatic?
The first one I won on, I was hooked – I had found a two horse race!!
What is the most prominent fallacy in the public?s perception about trading?
It?s a gamble. Actually it’s a controlled risk enterprise that with continued learning and a good basic grounding you can swing the odds in your favour.
How much of a role does luck play in trading success?
We all have to have luck ? but the further away I place my stops, the luckier I get!
How important is gut feel?
Did your father ever sell tickets on the TITANIC?
Success & Failure
What are the most important elements to becoming a successful trader?
Learn the basics, listen to experience, continue learning, money management and enjoy the challenge ? success in trading takes time and two major points – stickability and consistency. Start trading small and then grow. When you have a losing run and you will, bet smaller amounts until you regain your confidence.
Can you describe one of your most successful trades?
All winning ones are my most successful especially the last one, and as I?m writing this I?m 46 points up on the DOW, I?ve just moved my stop to lock in a 20 point profit and because the charts tell me so I?ll let this position run. So the answer – ?This Trade?.
Is the joy of winning as intense as the pain of losing?
Winning ? I?m great. Losing – it’s always someone else?s fault!
Why do most traders lose?
They have not learnt the basics, lack of Money Management (mainly) and lack of personal discipline and emotional control.
When you do hit a losing streak, how do you handle it?
Bet smaller and smaller ? my record is NINE on the trot.
Is the ability to accept losses a characteristic of a winning trader?
Essential ? it’s part of trading. Record keeping keeps it in constant perspective.
What was your worst time trading? What went wrong?
First year ? with 30 years financial background I thought I knew it all. I knew nothing about trading – I had to start from scratch and learn it from the beginning
Can you describe any specific trading mistakes that you learned from?
Every one. Some I retried and they still worked out wrong! Trading is an art and a skill ? believe me ? anyone can learn it if they put in the INDIVIDUAL time and effort.
How do you judge success in your trades?
Plus or minus suddenly springs to mind.
Are there any books you have read, that you would recommend to people?
For Beginners ? Toni Turner’s two books ‘Day Trading’ and ‘Short Term Trading’ and Martin Pring’s book on technical analysis. John Piper’s Book ‘Knowing Yourself’ and finally ‘7 Winning Chart Patterns’ by Ed Downs of SignalWatch.com.
What is the most important advice you can give the average trader?
Study why it went right or wrong. Money Management. Keep records after every trade.
What advice do you have for the beginner trader?
Buy my beginner’s course or attend one of my workshops (bbviously): it will be a shortcut. You can purchase this 6 CD set starting March 2003 for less than £200 and I promise you when you start trading you will not risk more than £1,000 including your starting kitty of £500. It’s hard work, serve your apprenticeship; be very wary of people that promise big rewards and brag about the big cheques they get! Don?t be misled ? use this site Trade2Win its an Aladdin?s cave of information. Don?t be afraid to ask others.
What are the traits of a successful trader?
To continue to be trading and not hyping it up as easy money; controlled effort; expect the unexpected; money management and record keeping.
The View From The Floor
Do you enjoy working from home?
It’s been a long journey, but yes. Actually, I spend as little time working as possible. I visit the gym and take the dogs for a run. I make my own choices. That?s nice.
What environment do you trade in, for example do you have a separate office, multiple monitors and CNBC on the telly?
Separate office fully fitted, 2 Computers, CNN and Bloomberg etc. Large patio door backs onto the garden, south facing, in a village in Somerset! It’s a really hard life! Only drawback ? no broadband yet.
What effect has trading had on your personal life?
I need constant challenges in my life ? trading provides it in a big way!
Do you sometimes need to get away from the market for a few days?
Yes, and I do visit Dublin about 4 times a year, take days off frequently. I go cheap B& B in Cornwall. I live in one of the most beautiful areas in the UK ? I put as much effort into smelling the roses as I do in trading.
Is trading for a living firstly viable and second desirable?
As I approach my Saga years, where else could I earn an income, for doing what is a fun way of making money ? and I can do it from anywhere. I never intend to retire but if this is work then I want to continue.
If you weren?t trading what would you want to spend your time doing?
Flying, reading, in the sun ? sunbathing.
Do you have any goals at this point?
Yes, dozens of them. Let’s start with a home in France, where it?s warmer. Speak a foreign language (that?s next).
Do you still see yourself trading ten or fifteen years down the road?
No, too busy drinking good wine, french bread, camembert cheese and pate.
When you make your first million, what will you spend the money on?
My kids and their husbands and grandkids – they have all managed to stay out of jail all their lives. Think we should celebrate that!!
Any comments about T2W?
Simply the best traders’ site in the UK, you have done a brilliant job. As someone involved in many internet sites I know the hard work, effort and money which has gone into it. Well done, now if every member sent Trade2Win just 10 euros by paypal or shoved that 10 euro or dollar note stuck in the drawer in an envelope and posted it ? what else could you achieve? (Ed. Now that’s a thought! 😉 )
Any last words?
Trade what you see, not what you feel, and No.1 Money Management.