We discover what makes great traders tick! My ‘10 Trading Questions With…’ guest this week is Steve Ruffley, author of ‘The Ruff Guide to Trading‘ (published by Harriman House).

1. What is it about trading that gets you up and motivated in the morning?

When you are serious about trading it becomes a significant part of your life. Money and the markets rarely sleep, so why should I?

Mornings are not really my main area of trading focus. I usually let the UK open and assess what the trading day may hold in store.

I find my best trades are toward the US open and after US data, so the mornings mainly are taken up by my many other business interests before I set up for some big afternoon trades.

2. How did you first get involved with the financial markets?

I first got involved in the financial markets when I was placing large investments for PwC and their private clients. This really sparked my interest in what the ‘financial markets’ were all about.

My first experience of trading was in Gibraltar where I got a job as a graduate trader with Mac Futures. They were some interesting times and a baptism of fire in the world of prop trading.

3. What was the turning point that really propelled you towards trading success?

The real turning point for me was when I took a break from trading for a living. Sometimes you get too close to something and can’t see the bigger picture. When I teamed up with Intertrader.com to be their Chief market strategist I started helping traders learn how to trade better.

There is only so much you can teach people so I then began to trade live in front of them to show them exactly what I taught and why it worked. After 1000s of webinars and offers I then started trading a fund instead of just my own account. This was a real turning point for me.

4. What are your personal trading goals?

My goals are very simple:

1. To make 1% of my account a day
2. If I make a good 1% win early aim for 2-3% on the day
3. Never to get angry
4. Take a loss early
5. Never chase or over trade any one product

As I trade large amounts of money my strategy allows me to be aggressive. I can allow myself to trade a monetary stop of 10% of my account in any one trade. This is huge for most traders. After 15 years of trading I know what I can make back in a day, week and month so this rarely happens. What it does is buy me a lot of intraday time to trade how I want.

5. What trading mistake have you learned the most from?

There are two mistakes I made over and over again that took me a long time to master.

Mistake 1. Trying to be right

Sounds obvious? Being right on the markets is not the only way to make money. I don’t need to sell the high or buy the low or know a market will go up or down in a day. What I need to be is be right at the right time. Get a percentage of that movement with the adequate risk attached.

Banking 3 30 tick winners a day is how trading is done. Investing is picking highs and lows and looking for daily closes. My average trade ranged from 6 – 22 minutes.

Mistake 2. Not taking loses early

There have been plenty of time I could have taken a profit, scratch or relatively small loss… all of the time I knew the trade was wrong. This goes back to my point above. You may be correct in your view but wrong on your timing. You can’t force the markets to do what you want. Sometimes you are just not in a position for the market to do what you expect – so get out. Wait for the market to present an opportunity. Take the little loss early and wait.

6. What are the main trading strategies and markets that you trade?

I trade the main indices, the EUR/USD, USD/JPY and gold. I keep it simple and trade markets that are correlated.

My strategies use a combination of Bollinger bands, Fibonacci and my own indicators that I have created over the years. My strategy is to make money. Most people don’t like this as it doesn’t ‘help’ them. I say tough! When I teach people to trade I teach them how to get their winning strategy and trading framework, there is no point copying mine.

People think if they just read a book, learn some technical details, this makes then a trader. It doesn’t. To be a trader you need time in the markets. To understand yourself and how you act under pressure, after all that’s just what the markets are a place where fear and greed meet.

7. What 1-3 trading books should every trader read?

Well I would have to say ‘The Ruff Guide to Trading’ wouldn’t I?

8. If you had 1 minute with someone who wants to learn how to trade in stocks, what would you say?

What do you want to get from trading? Tell me some goals and structure. Tell me what you want to make or achieve in a day, week and month? Then tell me – how you will think you will get there.

9. What separates the average from the very best traders?

There is certainly that X factor. Some traders are just better. The one trait that I know make exceptional traders is keeping your calm and focus. When you look at a trader and you can’t tell if they are £250k offside or £500k on side in a trade. I’ve seen this first hand many times and this is what separates the men from the boys.

10. How do you ensure your trading will continue to be successful in the future?

Having a long-term plan. I hate to say it but trading is a marathon not a sprint. One day should not make or break you. If you intend to be trading for a long time, your goals should be long-term. It takes a long time to be a consistent trader and a long time to understand yourself. The markets change and people generally do not. It’s all about identifying when you have the edge and hitting the markets, and when you don’t and staying out.

As Rocky said ‘It’s not about how hard you can hit, it’s about how hard you can get hit and keep moving forward’ that’s how winning is done, and that is how trading is done. Keeping in the game.

Bonus Question: If you were not a trader, what would you do?

Probably something high level in the secret service or government. I’d like to be the one who knows all the things others don’t.

Steve Ruffley’s Bio:

Steve’s career began placing investments for high net worth clients at PricewaterhouseCoopers. He was quickly hooked on the financial markets. Later, Steve took the opportunity to risk manage some of the best traders in the business at Refco.

He then went on to run the live floor at Schneider, where there were around 144 traders. This was at the height of the prop trading boom. Over this period Steve had unparalleled access to the thoughts and strategies of some of the best traders around. He saw some common traits of success and also, more importantly, failure. Putting all this knowledge to use, Steve’s next move was to start trading from home. Then, after a few years of lonely but successful trading, he decided that there was more to life.

He decided to turn his hand to education and teamed up with InterTrader (intertrader.com) to become their chief market strategist and head of education. Since 2010, Steve has presented nearly 1000 webinars on all aspects of trading and he has traded at over 150 live events, demonstrating how to make money in real market situations. To prove his teaching worked and in preparation for ‘The Ruff Guide To Trading‘, he publicly traded a £5k trading account to £11k in 90 days.

For further information on Steve’s products and services, check out iView Charts.

More Trader Interviews:

• 10 Trading Questions With…Ray Barros
• 10 Trading Questions with…Paul King
• 10 Trading Questions with…Malcolm Stacey
• 10 Trading Questions With…Michael Gouvalaris
• 10 Trading Questions With…Steve Ruffley
• 10 Trading Questions with…Van Tharp
• 10 Trading Questions With…Robert Carver
• 10 Trading Questions with…Richard Weissman
• 10 Trading Questions with…Jack Schwager
• 10 Trading Questions With…Adrian Reid