Nial Fuller is a full-time forex
trader. Here he talks with Tim Bourquin about his methods for finding
good trading opportunities and the strategies he employs to make money
with forex trading.
Please note: our regular member interviews are 30-40 minutes
of audio and include full transcripts.
Tim Bourquin: What type of trader are you? Day trader? Swing
trader?
Nial Fuller: Well in theory I can be both, it really depends on what the market is
doing and what kind of setup I enter.
I trade on 4 hour charts and daily charts, so there is a plethora of
opportunities both long term and short term, so I guess, because of my
trading style, I actually can't classify myself into one category, lets
just say I am both, depending on 1. market conditions 2. the chart
timeframe I see a setup form on.
Tim Bourquin: What markets do you trade?
Nial Fuller:I am primarily trading "spot forex" and occasionally
the US Index Futures on YM (Dow Mini).
Tim Bourquin: What are CFDs? US traders may not be too familiar
with them...
Nial Fuller: CFD's is the abbreviation for "Contracts for
Difference", CFDs' are in a nutshell, a leveraged trading product which
mirror that of another trading instrument like shares, futures, forex
etc. You are only required to put down a small margin to control
something of much greater value. CFD's can also make a market cheaper
to trade, with reduced spreads and reduced tick size (price per point).
eg - you want to buy $10,000 of Apple Computer Shares, but with CFD's
you only need to put down aprox $500 or 5% to control that amount.
Similar scenarios apply to Index Futures but in that case the margin
required is much much less deposit margin than the exchange would
normally ask for. The main benefit with CFD's in my eyes is that
because they are a "market made product" the "price per tick" or "price
per point value" can be much less than that of the real
product/instrument. The best example is on my local Index Futures, the
SPI200. Normally this market is $25 per point, but with several CFD
providers in Australia you can trade that same market for $1 and $5 per
point and the margin required is MUCH less than would be normally
required
Tim Bourquin: What types of charts do you use (time frames,
candles, etc.)
Nial Fuller: I trade the daily chart and the 4 hour chart, and
rarely the 1 hour chart. I am a strong advocate of trading the price
action on higher timeframes, and that is one of the reasons why most
traders fail in my opinion, they are stuck , glued to there trading
screens watching intraday charts with no idea what they are doing . I
trade with a clear set of methods/plan for these timeframes. Daily
charts show clarity and make it easy to indentify the trend, key levels
and price action signals. Daily charts are so widely overlooked by the
majority of new traders, I really do think that is my edge and why I'm
doing well.
Tim Bourquin: What is the basis of your trading strategy? What
are you looking for in a trading opportunity?
Nial Fuller: I exclusively trade "Price Action". This is a clean
trading style with no indicators. I basically follow obvious trends,
work with key levels and swing points, and then use price action
patterns and reversals to confirm my entry. I am very simple in the
manner in which I think and trade, with no deviation from my core plan
which contains several proprietary price action trading strategies. I
am a huge believer in confluence, whereby the trade must have
"multiple" reasons/confirmations to back up the trading signal. I use
levels and trend to confirm price action signals , and if the
"alignment" is not there I simply don't trade
Tim Bourquin: How many trades do you make a day?
Nial Fuller: I would say on average I trade 3 times per week
maybe 4. I know that sounds like a small number, but because I am
extremely disciplined, I avoid over trading and only trade perfect
entry setups. I think there is more opportunities to trade than what I
actually do, but because I have been doing this professionally for 6
years and have been around the market for almost 10 years, I have the
knowhow and screening ability to choose only the most obvious, clean
and logical entry triggers. Again .. overtrading was my downfall
earlier in my career so I now avoid that at all costs.
Tim Bourquin: Do you set monetary goals for your week or month?
Nial Fuller: I don't believe that you can really plan how much
money your going to make each week or month or year can you? I think
its much more important to focus on each trade. I just trade the best I
can, apply risk models and aim to make as much as I can from each trade
setup. High frequency day traders may be able to plan weekly profit
targets, but given my style, I just tend to focus on each trade, on a
"trade by trade basis". My real goal is to make at least 2 to 1 risk
reward (or greater) on each trade If I can, I think if your goals are
related to the trade in front of you, there is a much greater chance of
success. That said, If I lose XYZ of my capital in a week, I do stop
trading and won't trade until the next week, but that rarely happens
now days.
Tim Bourquin: Can you describe an ideal trade setup?
Nial Fuller: My methods are proprietary and confidential,
however I can explain the logic behind the best price action setups
that I use.
Regardless, we need the market to be moving, assuming you have
movement, nice trend and NOT alot of nearby pressure (ie: containment
levels), then the market has the ability to move further and run into a
decent trend break or continuation of some form. Now, that alone is not
enough, because entering blindly is pointless and high risk. My aim is
to work with the existing momentum and movement, then wait for the
retracement (some form of pull back against the momentum). I then need
to use a price action signal to confirm an entry and define risk. This
allows me to re join the existing trend safely. In a nutshell, the best
setups are in line with obvious trends using pull backs and price
action signals to get you in.
Tim Bourquin: What are some things you've done to become a
better trader?
Nial Fuller:I have written extensively about these topics on my
website, by writing it actually forces you and helps you realise just
what your positives and weakness's really are.
I think in the past 2 years I have truly realised that the core
foundation to my success consists of 3 things. The first and most
obvious reason for my ongoing success is that I trade using price
action forex strategies, "not a complex array haphazard methods", I
accept that the trading method has ALOT to do with my success but is
not the only reason. The other factor Is my routine of composing my own
market commentary/journal for myself, mapping everything out on paper
and planning each day, this puts me in tune and "at one" with the
charts. This daily rountine creates extreme discipline for me and it's
something I do religiously. I have the time to map and plan my trades
because I trade higher timeframes. Now the final ingredient I have
added to help me become a better trade is without doubt "cutting down
my screen time", and by saying that , I am talking about admitting I
had a addiction or problem where I was watching my screens and trades
too closely and way too much to live a healthy life. I have tried to
make part of my trading approach truly a "set and forget style" which
does not require me to be there watching trades all day, and seriously,
that is one thing that anybody can do to improve their trading.. simply
remove yourself from your trading room/office, and avoid screen
watching and punishing yourself emotionally as you watch your trade
positions float around in your portfolio.
Nial Fuller runs a forex price action education website for
aspiring traders at http://www.LearnToTradeTheMarket.com
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