Interview with Barry Burns, Top Dog Trading

April 8th, 2008

For the next interview in the StockTickr Interview Series (RSS feed), I spoke with Barry Burns of Top Dog Trading.

StockTickr: Tell us a little about yourself, Barry.

Barry: I live in Thousand Oaks, CA (just North of Los Angeles). Prior to trading I got a Masters in Pastoral Counseling, and a doctorate in hypnotherapy. I had a clinic in Orange County, CA., where I practiced hypnotherapy and NLP (Neuro-Linguistic Programming). I’ve also been involved in martial arts most of my life, which informed my approach to finding the “energies” in the market, which is the hallmark of my trading approach.

StockTickr: How did you get started trading stocks?

Barry: My Dad was a very successful stock trader, so I grew up with it. He had me stock-picking when I was knee-high to a grasshopper.

StockTickr: Most traders have a horror story about losing their shirt when they first started trading. What’s yours?

Barry: I’ve had my losses, of course, but no horror stories. I never lost more than I could afford to lose. I have stop-loss levels for each day, week and month. If I reach one of those levels, then I just stop for a period of time until I get my head together again.

StockTickr: What single lesson did you learn along the way that has helped you the most in your trading?

Barry: The most important thing I’ve learned is that trading is not so much about finding the right “method” or technical “setup” as I originally thought it was. Trading is a performance exercise, much like sports. Success is primarily a function of your mental preparedness, and also a lot of practice.

StockTickr: Describe your style of trading. How long do you typically hold stocks?

Barry: My style is based on measuring the 5 “Energies” in the market at any given time. Those energies are:

  1. Trend.
  2. Momentum.
  3. Cycle.
  4. Support/Resistance (blockage to energy).
  5. Fractals.

Most of the time the market is a “random walk” being tossed around by the retail (amateur) traders throwing in a few shares here and there. That doesn’t provide any meaningful structure or follow-through to market activity. So I wait patiently until all 5 energies align in the same direction. You can actually score a trade on a scale of 1-5 in a very objective manner based on how many of the 5 energies are pointing in the same direction (long or short). When all 5 align in the same direction and at the same time, you have a very high probability trade. It happens enough each day on a day trading basis to allow me to be an active trader. On the other hand, it keeps me out of choppy markets.

StockTickr: What’s your exit strategy for winning and losing trades?

Barry: I trade with a minimum of 3 exits (I’ll use a long example, but everything would simply be flipped over for a short):

  1. A Stop loss. I’m buying cycle lows, so my stop goes immediately (1 penny) below the cycle low. This means my stops are only a bar to a bar and a half wide.
  2. The first resistance level is my first profit target.
  3. A trailing stop is my second profit target.

StockTickr: What 3 books do you recommend traders read?

Trading in the Zone High Probability Trading Market Wizards

StockTickr: How do you think the market has changed over the last several years? How have you adapted?

Barry: I don’t think the markets have changed in any significant way. The indicators I use simply measure the Energies in the market. If those Energies shift, then the indicators adapt to that. The market goes through cycles of trending and not trending, being volatile and quiet. This has always been.

StockTickr: What advice can you offer traders who are just starting out?

Barry: My best advice is to start slow. Learn different methods for trading, but then pick one and don’t jump around from one method to another. Choose one that fits your personality and trading style. It will take time to master it, so allow yourself that time. You need to get a lot of experience trading various market conditions. You need to work on your own behavior in various market conditions as well. Most of the work you’ll need to do in order to become successful is not the work you’ll do in the market, but the work you do on yourself. Keep a log of every trade you take. In addition, write down both what you were thinking and how you felt at the time of taking each trade. This will serve as a biofeedback mechanism for you. Not only will your log help you learn which technical patterns work best for you, but it will help you see patterns in your own behavior.

Somone once said, “Successful trading is simply a matter of not making mistakes.” Your log is the best tool to help you eliminate mistakes one-by-one (over-trading, taking profits too fast, moving your stop-loss, etc.). One difference between professional and amateur traders is that the amateurs are always looking to increase their success (usually by finding a “better” indicator or setup). The pros work more on eliminating their own mistakes. They focus on managing their own behavior and on taking fewer, better trades.

StockTickr: What do you like best about trading?

Barry: I’m unemployable. No one would want me as an employee. I don’t do the “job” thing very well. So I love the freedom, flexibility and independence that trading affords me. I also love the virtually unlimited income it can provide.

StockTickr: When and why did you start TopDogTrading?

I started my blog at http://www.topdogtrading.com in January of 2007. Prior to that I had been traveling and doing seminars around the country. I enjoyed conducting the live training, but the traveling got tiring, so I decided to move my educational offerings online. The response has been tremendous. I’m actually able to reach more students this way and give away a lot of free videos, articles and other trading resources. I love teaching and interacting with students. Fortunately I’m still able to do that via email, the phone, webinars, and I still do a live seminar once or twice a year.

Your readers are welcome to get my Free 5-Day Video Course by filling out the form on the top right corner of the first page on my blog.

StockTickr: Thanks, Barry!

Barry: Sure, Dave.

There is now a 14 day risk free trial for StockTickr Pro – hone your trading edge and become consistently profitable with StockTickr.

Stay tuned – there are several interviews on the way. You can subscribe to these interviews via RSS feed.

Previous interviews in the StockTickr Interview Series (RSS feed)

Do you have suggestions for other traders you’d like to see an interview with? Let us know!

3 Comments

  1. eyal Said,

    April 8, 2008 @ 11:34 am

    Hi Barry, interesting interview. How did you come up with the concept of 5 energies? Also, could you point me to some introductory material about the application of fractals to trading?

    Thanks
    Eyal

  2. NLP Said,

    April 20, 2008 @ 9:38 am

    I think it was a great interview , Barry revealed many important points which I never had in my mind.I think he is very well qualified and experienced that makes him sucesful.

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