An Interview With A Full Time ASX Daytrader

An Interview With A Full Time ASX Daytrader

We interviewed Chris and asked him a few questions about being a professional day trader. You can follow Chris on Twitter @Trader_C_ASX. This is a must read for anyone wanting to know how to get started day trading.

How Much Capital Did You Start With?

I started with a trading account of $50,000. Since I trade CFD’s on margin with FP Markets, this turned out to be a lot more than I needed. However, I had no idea how successful I would be once I went full time, so I wanted to have a buffer to handle any drawdowns.

What Is Your Stock Selection Method?

I see you trade a mix bag of small-caps and mid-caps, do you have any process for stock selection?

Essentially, I try to identify which stocks are most “in play” for the day, and I focus on a couple of the best opportunities.

What Are The Resources You Follow For ASX News And For Research?

I track ASX announcements through spark. Apart from that, I check news websites such as the Australian Financial Review, The Australian, etc.

What Is Your Trading Strategy? Do They Differ Depending On Small-Cap To Mid-Cap?

My strategy doesn’t change much based on small-caps, mid-caps or large-caps. Some of my playbook setups are more prevalent in one or the other, but I’m predominately an intraday scalper who trades stocks in play.

I Am Just Starting Out, Is There Any Suggestion That You Can Give?

Read the Mike Bellafiore books (One Good Trade and The Playbook). Check out SMB capital YouTube channel. Check out the Chat With Traders YouTube channel. Track your trading results in a spreadsheet. Do daily trade reviews. Regularly review your trading results to find ways to improve your trading. Focus on trading psychology. Connect with other traders. Start small and focus on consistency and then scale up.

What Changed In March/April Last Year? 5 Months Of Breakeven Then It’s Just Been Upwards And Upwards Since.

There is an excellent quote from the book One Good Trade – “The worst you will ever be as a trader is when you begin”. I had a very clear picture in my head about what I needed to do to be successful when I started trading, and March/April 2020 was when it began to click for me. It was also made easier because of the volatility from Covid.

How Do You Manage Adversity? Like When You’re Going Through Drawdowns Etc To Keep Yourself On The Straight And Narrow.

Once it becomes apparent that I’m going through a rough patch, I spend a lot of time trying to understand why my performance has dropped off and then rectify the issue which is causing it. Also, I try to be mindful of how external factors impact my trading; for example, if I’m not feeling well, I’ll reduce the number of trades I take and focus on the ones with outstanding risk-return ratios.

Any Tips For Holding Through Better When In Winners?

I’m predominately an intra-day scalper, so I only hold positions for a few minutes. My advice would be to focus on the process, not the outcome. If you excited a trade for the right reasons, then it should be irrelevant what happened after that.

Please Elaborate On Options Trading Strategies And How Options Work On The ASX If Possible.

If too big of a topic, please share helpful links where relevant.

If you want to learn more about options, the best book I’ve read on them is Option Volatility And Pricing by Sheldon Natenberg. I’d check out the ASX website for the basics, but they are a fairly complex product, so definitely not for beginners.

What Are Your Preferred Signals Intraday Vs Pre-Open?

For entering a trade that is. Would be happy to hear your thoughts on exits too.

My trading is based on reading the tape and intraday chart patterns. The only indicator I use is the volume-weighted average price (VWAP). In terms on exiting a trading, I focus on the reason to exit. Which could include hitting price target, weakness on the tape, etc.

Do One On Directional Bias Please.

I try not to trade with any bias. If the catalyst I’m trading off is very bullish, I won’t try to fade the stock and vice versa, but ultimately, price action is the most crucial indicator once the stock is trading.

What Has Helped You The Most In Becoming A Consistently Profitable Trader?

The simple answer is a lot of hard work. I spend a lot of time outside of market hours reviewing trades and understanding what is and isn’t working for me. I would also say being process-focused instead of outcome-focused has played a huge role in becoming consistently profitable.

Do You Trade From The Market Open To Close? Or Just A Couple Of Hours?

I’m at the desk for the whole day. If it is extremely quiet or slow, I might finish up early or chill out and monitor spark on my laptop for any fresh news.

What Platform Do You Use?

I use Iguana Spark for market depth and charting, and I use FP Markets for execution.

How Did You Size Up?

I have found sizing up to be a bit of a challenge. When I started, I focused on risking $100 per trade. As I improved my consistency, I increased this amount. At the moment, this is a focus area for me, and I’m trying to be quite aggressive in the right opportunities.      

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