Commercial message: With the arrival of the month of July, we bring another part of a series of interviews with successful traders. Tentorkát answered a series of questions by Petr, who has been active in trading for more than seven years. In recent years, he has focused primarily on Forex, however, during his trading career, he has, like most trading veterans, gone through a number of instruments and strategies. Here are his answers:
What brought you to trading?
I got into trading in a rather original way. One day I came across a message in my email inbox offering binary options. The offer turned out to be just spam, but it piqued my interest in the topic and I began to study the issue of trading.
Can you describe your trading style and what instruments you usually focus on?
Currency pairs are the closest to me. Of the strategies, I primarily prefer price action, which is a method of technical analysis that is based on monitoring the price chart without any indicators.
Can you describe how you decide when to enter or exit a trade and what factors you consider?
I make decisions based on simple rules tested on historical data, which I evaluate statistically. I enter the trade when the entry conditions I set earlier are met. I set Stop Loss and Take Profit fixed, with exceptions. Next, I monitor whether the individual pairs are in line with each other in the intermarket. But this is only for a better feeling about the store.
How important do you think having a well-defined business plan is to your overall success and how do you develop your plans?
To me, a trading plan is one of the most important parts of trading. I try to have it as accurate as possible in every detail, so that it frees me from hesitation as much as possible when entering the store. I then continuously adjust the business plan based on statistics. So it's a constant process of tweaking and refining.
How do you deal with trades that don't go according to plan and how do you try to cut losses?
I don't mind stores that don't go according to plan. They are simply part of trading, so I do not deal with them in any fundamental way. It is important for me to enter the trade according to the rules. I regularly back-analyze the data and if I notice a large deviation from the standard, I start drawing consequences. For example, I reduce losses by adjusting the range of pairs I trade.
What role does technical analysis play in your trading and what tools and indicators do you find most useful?
Personally, I use technical analysis primarily, fundamental only marginally. I mainly use moving average and MACD. But both only as an auxiliary aspect when deciding before entering the store.
Could you describe a recent trade you made and explain your thought process behind it?
I have clear conditions for entering a trade, but few are so perfect that I feel really great about them. But overall, I don't even try to focus on perfect trades, I focus on backtesting and the success of the strategy. The number of trades I do per month is so large that one trade in that amount means nothing. Such a mindset helps me not miss profitable trades. So it can be said that most of my trades are very similar and thanks to this stability I can be profitable in the long run.
How do you track and analyze your business results and what metrics do you use to measure your success?
I keep a trade journal and take screenshots of each trade immediately after entry and exit. I review and evaluate this every week. I also go through all the charts every night to see if I missed any trades. I have a quarterly goal in pips and I am trying to meet it.
How do you deal with the emotional swings that come with trading and what strategies do you use to stay disciplined and focused?
This is the hardest thing for me in trading. I'm probably going to repeat myself a bit here, but basically the only thing that helps is to be aware of the performance of the strategy in backtests, stick to the checklist of conditions for entering the trade and know that there will be other opportunities. I practice discipline mainly outside of business hours, when I test and evaluate data. I have to force myself to do it sometimes, but it can't be done without this part.
Emotions can't be completely filtered out, so if I have a bad day, not only in terms of trading, it also affects my concentration, and it's better not to trade for the rest of the day. But it must not be very often (laughs).
More about emotions in investing
What do you see as the biggest challenges facing market traders today and how are you adapting to those challenges?
The biggest challenge is to build a robust trading system that absorbs large fluctuations in the markets. In my opinion, this lies primarily in the simplicity of the system. Nowadays, however, there are countless trading options and it is easy to be overwhelmed by them.
Can you identify the moments that caused you to begin to understand how trading should work and what directed you in the direction where you are today?
It was mainly the moment when I understood that the main strength is in one hundred percent confidence in the strategy. There is a huge amount of testing involved. But thanks to that, the strategy got under my skin. I went through a lot of charting situations and it helped me get a better feel for the market.
How do you think a trader will know that he already understands trading and can fully engage in it?
I think at least a year of consistent profitable trading on a real account is needed. But this should be preceded by thorough preparation.
Do you have any final practical advice for all traders who are not yet satisfied with their results?
Backtest honestly, stick to one strategy and keep improving it. Finding someone with a similar business approach to consult and best compare your trades with is also very helpful.
If you are interested in the topic of trading, you can try trading at XTB for free at test account. All without the need to upload funds.
