For the next interview in the StockTickr Interview Series (RSS feed), I interviewed Gavin from Trader Gav. I follow Gav’s blog because I think he has an interesting style – he dummy trades futures contracts.
Since Gav sent me his responses, he’s started going through what appears to be an intense scrutiny of his trading methods. He is currently attempting to backtest his methods and he’s posting regular updates on his progress – it’s great reading and definitely worth following.
Read on for more about Gavin and his views of the markets, his evolution as a trader, and how he started using profit targets instead of simply trailing a stop in his trades. Feel free to ask Gav questions in the comments.
StockTickr: Tell us a little about yourself, Gavin.
Gav: My name is Gavin, I am 29 years old. I grew up in Malaysia, but I’ve been staying in Singapore since 1998. I am a IT system analyst and a futures day trader. Due to time zone difference, I am able to keep my day job, and day trade futures in American market in the evening time.
StockTickr: How did you get started trading stocks?
Gav: 4 years ago, I first opened a stocks trading account in Singapore. I was recommended a penny stock of a power generator company Vibropower (listed in SGX) by a friend of mine, who is now working as a stocks broker. With just $3000 investment I was up 60% profit in paper and eventually saw it slipped with around 30% profit left after holding for a year long. I did not know what I was doing, I sold the stock because my friend told me it was not looking good. I couldn’t read a chart but I was hooked by the possibility of making good money from the market. Since then I started readings and attending seminars. I remember paying few hundreds bucks attending a workshop of fundamental analysis. I worked extremely hard trying to catch up with accounting terms and understanding financial reports. Only until I picked up John Murphy’s book Technical Analysis of the Financial Markets, I switched my focus to charts and price action. I swing traded stocks with mixed success. Last May, I started day trade SIMSCI futures (MSCI Singapore free index) in SIMEX, this experience changed the way I trade. I have realized day trading suited my personality. At the same time I started to get my feet wet in spot forex trading as well. I was doing pretty well with SIMSCI futures trading, but it was during my office hour, and the increase of workload did not allow me to continue day trading. After capitalized from futures trading in SIMEX, I switched to day trade E-minis which are more liquid and volatile. That’s what I am doing now. I would say that I am still in the transition period. E-minis market is a different animal to me.
StockTickr: Most traders have a horror story about losing their shirt when they first started trading. What’s yours?
Gav: I do not have a horror story, but an ugly one. I once purchased some cover warrants of Creative Technology in Singapore. It was recommended by a senior broker I knew from a seminar. I knew Creative was selling MP3 players. That’s all! And, I did not know the stocks price was breaking down and I held on the cover warrant to expiration. Yes, it was 100% loss. And the best thing was, I came to know that the broker had sold off the warrant long time back, I was the only donkey holding it.
StockTickr: From what I’ve read on your site, you trade in isolation. Do you think this is an advantage or disadvantage in your trading?
Gav: I am not sure if it is an advantage since I did not work in a trading room before. I like to trade alone in my room with my favorite music playing in my sound system. During trading session, it is time for me to look for setup and execute my plan, so I don’t like to have any discussion during the session. I am easily distracted.
StockTickr: Do you trade for a living now? If not, do you have a plan to get there?
Gav: No. I trade part time with a relatively small account. I am not well capitalized to go full time just yet. I am certainly looking forward to get there, maybe in another 2 to 3 years time.
StockTickr: What single lesson did you learn along the way that has helped you the most in your trading?
Gav: The concept of risk management. Particularly stop loss. This concept saved me during bad months such as the past August and September. I kept my losses to the minimum.
StockTickr: Describe your style of trading. How long do you typically hold stocks?
Gav: Though I do not post my swing trades on my blog, I do swing trades stocks in Singapore stocks market. I normally hold stocks for a week or two. My focus is always on day trading index futures. I am open to all trading styles/setups, I can’t make a living with only one setup since I do not have a bunch of trading candidates to scan. I am implementing Maoxian’s dummy trades in futures trading. Dummy trading is good to join an established trend. In addition, I am currently working on some strategies such as Opening plays and TICK fade etc.
StockTickr: What’s your exit strategy for winning and losing trades?
Gav: I always place a stop loss order immediately after entering a trade. I have learned to set profit target instead of exit a profitable trade based on gut feeling. I am watching major swing high/low or support/resistance area for target. I have enough experience of watching my profit vanished after hitting certain points. You have to be clear about what do you want to achieve in a trade. After all, my main objective of day trading futures is to generate regular cash flow.
StockTickr: What 3 books do you recommend traders read?
Gav: I have read quite a number of trading related books. I would mention 3 which helped me during my initial stage of trading:
- Technical Analysis of the Financial Markets by John Murphy
- Trade Your Way to Financial Freedom by Van K. Tharp
- Trend Trading by Daryl Guppy
StockTickr: Other than your own, what are your 3 favorite blogs?
Gav: This is a tough question! I am reading blogs every morning when I commute from home to office. To mention the first 3 in my reading list, I would say J.C (An NYSE scalper’s Tale), Trader-X and Trader Jamie (Wall St. warrior). By the way, I read John (Tale of the tape) and Tradermike frequently as well.
StockTickr: What is your typical R value per trade? i.e. what % of your portfolio do you risk with each trade?
Gav: I use very low R per trade. It is less than 1 percent of my trading capital. I am planning to increase it when I see consistency in my trading performance.
StockTickr: What technical indicators could you not live without?
Gav: I like to draw trend lines on my chart. I guess moving average is the one I use the most frequent.
StockTickr: How do you think the market has changed over the last several years? How have you adapted?
Gav: I haven’t been trading long enough to answer the first question. Recently, I start to learn to be flexible with my trading style and setups. This simply means that I need to adjust myself both mentally and technically to deal with the most current market condition. I would say the change of trader’s mindset is more significant than the change of market. Market doesn’t fail a trader, it is always trader fails himself.
StockTickr: Do you backtest and if not, how do you instill belief in your system?
Gav: Not in the traditional way. When I first design a strategy, I will read charts to get a feeling if it works. And, I do forward testing instead. I will start with small amount and live trade my strategy for a period , for example, I am in the progress of making 100 dummy trades in futures trading now. The purpose is not only focusing on the setup, but my mental readiness for the strategy.
StockTickr: What advice can you offer traders who are just starting out?
Gav: I can’t give any advice, but some experience to share. Trade small, and grow your account gradually. And at the end of the day, you got to have your own system. You may learn different strategies from blogs or books, you have to integrate it with your own risk appetite and your personality etc. Make it your own.
StockTickr: What do you like best about trading?
Gav: Freedom and money. It gives me the possibility of completing my culinary trips around the world.
StockTickr: When did you start your blog and what prompted you to do so?
Gav: I first started blogging about 1 year ago. Initially, I used the blog to keep my trading preparations. I would analyze charts at home, and posted on the blog. I can easily access to my blog from office. I have since revamped the blog as my trading journal. I posted almost all of the my trades on the blog, be it a winner or loser. This is to keep myself disciplined and accountable for my trading. I am focusing on quality of each trade, that’s why I insisted on R concept instead of dollar amount for all my postings. Dollar amount might make us feel excited, but R shows my stupidity when I risked $1000 to earn $100 dollar.
StockTickr: Thanks, Gav!
Gav: Sure, Dave.
Stay tuned – there are several interviews on the way. You can subscribe to these interviews via RSS feed.
Do you have suggestions for other traders you’d like to see an interview with? Let us know!
- Will Fisher
- Tom C.
- Michelle B.
- Elliot Dole
- Jon Tait, the Fickle Trader
- Bill Rempel
- Adam Warner
- Roger Nusbaum
- Dave Johnson
- J.C., the NYSE Scalper
- Brian Shannon, AlphaTrends
- Jamie, Wall St. Warrior
- Howard Lindzon
- Kernan of TRADEthemove.com
- Richard Todd
- Andy Swan
- Steve Nison of Candlestick Charts
- Dan Mirkin from Trade-Ideas
- Bruce Brotnov
- Eric Cahoon
- Ugly from Uglychart.com
- Alan Farley
- Declan Fallon
- Smita Sadana
- Bill Cara
- Van K. Tharp
- Brett Steenbarger
- Eyal Maoz
- Gary B. Smith, the Chartman
- Nusair Bawla (alibawla on StockTickr)
- Dave Landry, Swing Trader
- Jeff White, the Stock Bandit