We discover what makes great traders tick! My ‘10 Trading Questions With…’ guest this week is Adrian Reid. Ok, that is me, but someone has to get the ball rolling right?

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

I love the mental challenge that I get from trading. Whether it is coming up with new ways to improve my trading systems, learning new trading strategies or helping others improve their trading there is always something interesting to learn and experience.

How did you first get involved with the financial markets?

My very first memory relating to the financial markets was playing “The Stock Market Game” when I was a kid of about 9 years old. I loved the idea that you could make money by buying and selling something that was moving around in price.

When I was at university I started investing and trading with real money after my father bought me a course on Successful Personal investing. I wasn’t very successful at first though – despite the name of the course!

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

In my first couple of years I tried several different approaches and nothing really worked for me. I was frustrated because none of the approaches I tried really fit with my personality and the sorts of things I liked to do. Two moments really changed everything for me.

First, I read “Market Wizards” by Jack Schwager and realised that all the great traders had a method that fit them…the second was that I tried trend following using a mechanical trading system. I remember my first big winner – Mincor (ASX: MCR) and it was just magic.

What are your personal trading goals?

My trading goals are to continue developing new and diversified trading systems and combine these with my existing trading program to improve returns and reduce my drawdown. I am looking to build a portfolio of maybe 10-15 diversified trading systems across the stock market, forex and futures markets over the next couple of years.

What trading mistake have you learned the most from?

There have been so many trading mistakes! But the key has been to learn from them and adjust to reduce or eliminate their impact over time. The one that stands out for me was when I spent a few months day trading while I still had a job.

It was the most stressful experience because I was unproductive at work (obviously!) and short-term trading really doesn’t suit my personality. I hated it and lost a lot of money. Ever since then I have been much more conscious of my personality and my lifestyle when I design trading systems.

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

I trade solely with mechanical trading systems. Most of them are long-term trend following in nature and are very diversified. The majority of my volume historically has been from stock trading, but forex and futures is an increasing focus for the future.

What 1-3 trading books should every trader read?

There are lots of great trading books, but three that have had a very profound impact on my own trading were:

  • The entire ‘Market Wizards’ series by Jack Schwager
  • ‘Trade your way to Financial Freedom’ by Van K Tharp
  • ‘Way of the Turtle’ by Curtis Faith

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

I would say that first you must understand your personality, preferences and ideal lifestyle so that you can choose a trading strategy that suits you. Then design a trading system using that strategy that gives you a reliable edge in the market.

To keep you consistent you need to write a trading plan to cover all aspects of your trading and finally make sure you only risk a very small percentage of your account on each trade so you survive. It can be long and difficult on your own, so consider getting a mentor or coach to help you.

What separates the average from the very best traders?

The very best traders really understand themselves and have trading systems (mechanical trading rules) that match closely with their personality and how they like to work. Discipline, curiosity and drive to continually improve are also very important. Interestingly I think risk adversity is probably also a big difference – great traders are very good at controlling risk.

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

I continue to diversify and improve my trading systems and keep my trading plan up to date. I keep a trading diary to capture learnings and record the results of my investigations so that I stay focused. I update my trading plan and make gradual changes as I find ways to improve.

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

If trading didn’t exist then I would find other ways to build mechanical systems and rules to profit from different investment vehicles and business ventures…I love systems that are repeatable!

Adrian reid - trader - founder of enlightened stock trading

Adrian’s Bio:

Adrian Reid is a private trader, as well as the founder and Trading Coach at Enlightened Stock Trading (www.enlightenedstocktrading.com) which is dedicated to educating and supporting traders on their journey to profitable systems trading. He has been trading profitably for over a decade using long-term trend trading systems.

Enlightened Stock Trading’s goal is to help clients succeed by building their own trading system which suits their objectives, personality and ideal lifestyle. We offer substantial support on trading systems, coaching and education.

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