Interview with Glide (DARWIN CNG)

27 October 2016
The Market Owl

If you use our “Promising DARWINS” filter, DARWIN CNG will probably catch your eye: > 9 in Consistency and > 9 in Performance… good stuff!

We thought it’d be good to have a brief interview with Glide,  the trader behind CNG’s underlying strategy.

So, tell us a little about yourself. How did you get started and how long have you been trading for?
My interest in the stock market goes back to the late 1990s, when I was advised to invest in a portfolio of unit trusts. I trained as a lawyer, and was not aware of retail trading until I saw a spread betting poster on the London underground in 2010. I signed up to that broker out of curiosity. My trading was very experimental at the beginning but the more I learnt about trading the more my interest in it grew. Now I trade daily and pursue a systematic process of self improvement as a trader. I still have a long way to go!

About your trading strategy: what pairs do you usually trade? Do you always trade the same timeframes?
I trade the Dow, the FTSE, USD/JPY, EUR/USD, Cable and EUR/GPB. My analysis is based on a combination of moving averages, support and resistance, trend lines, MACD and multiple time frame analysis using the 15 minute, 1 hour and 4 hour charts.

I do not have a fixed system so, for example, I do not look for particular set ups to trade time and time again. Rather, I have a method of analysis using only these indicators and am quite flexible in my approach, depending in part on the bigger picture, such as whether on a long term time frame the market is trending or ranging. I take into account fundamentals, but mainly for the purposes of anticipating when the markets are likely to be more volatile or whether there is any reason to think their current behaviour may be about to change. This adds context to my analysis of the charts.

At the moment I only trade the DOW in my Darwin due to time constraints. However I plan to expand my Darwinex trading into other financial instruments in the future with new Darwins.

As a trader, what would you say is your greatest strength?
I would say that my greatest strength is persistence. All traders experience set backs and reversals and I have had my fair share over the years. I always come back to fight another day, determined to learn from my mistakes and to keep improving. This is a process that never ends and as I said above I still have a long way to go!

And your biggest weakness?
I am dreadful at multitasking (no prizes for guessing my sex!). I used to have great ambitions of trading multiple currency pairs, commodities and indices with a view to spreading risk as thinly as possible. I learnt in the process that all I was doing was spreading myself too thin. Now I almost never look at financial instruments other than the ones I listed above and I am generally engaged in planning and executing no more than one or two trades or series of trades at a time. I have found that I always perform better when I keep my trading as finite as possible. Although my risk then becomes focused on one or two financial instruments I find this suits my mindset much better as I have a greater awareness of and ultimately control over what is happening to my equity curve.

Our algos tell you are very good at when it comes to Consistency & Performance. Any ideas for other traders who need to improve on those attributes?
My whole trading strategy revolves around having a consistent approach to the market every day. The technical indicators I use are the lens through which I look at the market. I never consider other indicators nor market analysis of other traders or analysts. This keeps my analytical approach the same every day. It also prevents me from suffering “paralysis by analysis” since I am not overloading myself with information and I am always looking at indicators and charts I am intimately familiar with.

In particular I find that each financial instrument has a character of its own, so although I use the same indicators for all my charts, I vary my approach to each financial instrument according to what has been shown to be successful in the past for that financial instrument. For example, (usually!) EUR/GPB moves much more slowly than Cable, so the 4 hour chart carries much more weight with me when analysing EUR/GBP. I keep my analysis of each financial instrument consistent based on the price behaviour which that financial instrument typically exhibits while always making allowance for what is actually happening in the market at the time.

My eternal goal is to find, through trial and error and through ever continuous refinement, what works well for each financial instrument that I trade and then to apply that approach consistently over time. I also seek (with varying degrees of success!) to take the long view so that I am not thrown off balance by short term losses or by temporary erratic price behaviour. Short term fluctuations in my equity curve are of little importance to me compared to long term performance so when I experience drawdown I do not change my overall approach but stay true to my analytical method and to my style of trading. This evens out the bumps in the road.

What is the most important lesson you have learnt in your trading career?
By far the most significant lesson that I have learnt is that trading is very individual. Because trading is an acquired skill it is natural to assume that it can simply be “learnt” from the experts. In fact there is no one way to make money in the markets. I believe the cliche is true: there are as many ways of making money in the markets as there are successful traders. To trade successfully you need to learn the principles of price action (provided you are a technical trader) and then on top of that you need to develop and/or apply a strategy you feel at home with.
Learning the principles of price action (for technical traders) does not take very long but then learning to apply these principles in a coherent trading strategy which you feel comfortable with takes time and patience. Often the answers to problems in trading are to be found on the inside, from within your own emotional responses to the market, rather than in books, blogs or even in discussion with a mentor. You also evolve as a trader naturally over time as you become increasingly robust in the face of reversals and as your understanding of market behaviour deepens through experience.

Finally, any comment you’d like to share with the fellow traders who read this?

To progress in trading it is essential to adopt a “Growth Mindset” – a belief that there is no reason why you cannot ultimately learn to be successful and an understanding that problems and setbacks are not proof that you are a bad trader but rather events from which you can learn and which you can use to improve.

On a couple of occasions friends have commented to me that they tried trading in the past but gave up as they were no good at it. In both cases their trading experiment came to a bloody end with a single large drawdown, in one case because he did not put on a stop loss and his account was wiped out. If someone genuinely wants to give trading a go their response to an experience like this should not be to conclude that they cannot trade successfully but rather that they have a lot to learn. In the example above the lesson is clear: always put on a stop loss to keep losses manageable – a simple solution to a simple problem. You keep this process going – an internal dialogue of identifying problems and finding solutions. Over time those solutions change or the problems become superseded as your strategy evolves, in a process of continuous refinement (or where necessary in the occasional complete overhaul!).

In short anyone serious about trading can learn to be successful. All you need is (1) the right mindset, (2) a responsive approach to the market and to the development of your strategy and (3) patience (and persistence!) as it takes time.

I saw a poster on a bookmaker’s stall at the races once which said “A bad day at the races is better than a good day at the office”. My mind is always seeing trading metaphors and I instinctively converted this to “A bad day in the markets is better than a good day at the office”. I certainly have not found this to be true but I aspire to raising my trading to the level where it becomes true.

Finally I would say that the development of my trading has been aided immensely by the American trading educator Rob Booker. I have never tried any of his strategies but his daily Trader Radio podcasts are highly inspirational, educational and entertaining. The precursor to Trader Radio was the Booker Report and the precursor to that was The Traders Podcast. These series of podcasts are well worth listening to. I do not agree with everything he says but much of my approach to trading as described above (my “philosophy of trading” as Rob calls it) derives from themes which he has explored in his podcasts. He is ridiculously prolific and has created years of material – well worth a listen!