074: John Walsh – Pocketing $100k From a Trading Comp, and Making Simplicity a Priority w/ the Black Cabbie Trader

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You're listening to episode seventy four, I'm Aaron Freifeld and thanks for being here. My guest this week is John Walsh, aka the Black Cabby Trader. The backstory of John, in 2012 he entered a competition, the City Index Trading Academy, which was a group of people with very little market experience to see how well they would perform over the span of five weeks.

John came out on top and won a hundred thousand pounds in prize money. He's of course continued trading ever since and has developed into quite the trend slash position trader. focused on US equities and makes simplicity an absolute top priority. He's also a black cab driver in London, which you'll hear more about very shortly. In this episode we chat about the competition, John's trading methodology, and why you've got to stay out of your own way, as John puts it.

If you're enjoying the podcast and if it's helped you in any way, I have a very small favour to ask. Please leave a brief iTunes review. It's such a huge help. So if you can help, just go to chatwithstraders.com forward slash iTunes. It'll take you all of about two minutes. Thank you. Okay. You're listening to the Chatwith Trays podcast. Here is an interview with John Walsh. All right, John, and we are rolling. What's up man? How are you? I'm good, thanks, Hammond. How are you?

I am doing just fine. Thank you very much for coming on the podcast. It's really great to be speaking with you. All right, thank you for having me on, you know, I'm I'm very pleased to be on. Hopefully people get something from it. And um obviously you've had some big hitters before, so I'm pr I'm honoured to be among the lustrous group. I'm sure th I'm sure they will. I'm sure they will. So how's your day been? You keeping busy?

Rydyn ni'n gwneud. Rydyn ni'n gwneud. Rydyn ni'n gwneud yma. Rydyn ni'n gwneud yma. Rydyn ni'n gwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud. keep myself busy. And um yeah, so things are well weather's increasing, getting a bit better over here. So yeah, no, things are good.

Very good, very good. All right, we'll dig into that all a lot more um in in just a bit, but let's start off with um talking about how you first developed an interest in markets and more specifically trading. So where did everything kick off for you? Well it started really I from when I was a child, like in my teenages really. I mean it's a bit of a cliche. I've heard a lot of people say that they followed the stock prices in the newspaper. I did all that.

I used to cut them out each day and and I used to have a pile and pile of newspaper clippings of old stock prices. But in reality I had no idea what m moved the price up or down. I didn't know about charting or anything like that. It was very basic. I used to follow tickers and was interested in the company names. And from that it j it just went up and I just

started to read some books and stuff and it ju I just started to love it really, but I hadn't actually started trading just yet. It was just like um just a hobby in the background that I just kept an eye on. Okay, cool, cool. So John, I know you went on to um going into what did you do? You went into a competition, um, but prior to the competition, uh which we'll talk about more in just a bit, What was your experience with trading before entering?

Well Aaron, this is the thing. I literally had no trading experience at all. I mean I did a bit of like um b paper trading as you as you would call it. Um I used to look on Google Finance and I built up a little um paper portfolio of stocks but it was just really it wasn't even technical or fundamental. It was just m um I used to read about stocks, put'em on the list, watch them go up, watch'em go down and I used to just follow it like that, but no no actual real trading experience at all.

Okay, okay, got it. So well let's talk a little bit about the competition. I mean that's kind of how you got bit of a name for yourself in the UK especially. So how did you hear about the competition? What motivated you to try out and and what even was the competition?

Well, um it was called the City Index Trading Academy. I don't know if some of your listeners will be aware or not. City Index is a um broker in the UK. And um it's funny, a lot of people ask this, how did I get involved? I literally do not remember. I must have been looking at um some kind of trading related website and I saw an advert And I literally just put my name and email address in there so they get better

Rydyn ni'n cael ei wneud yn ychwanegu mewn gwirionedd. Rydyn ni'n ei wneud. Rydyn ni'n ei wneud. Rydyn ni'n ei wneud. Rydyn ni'n ei wneud. Rydyn ni'n ei wneud. Rydyn ni'n ei wneud. Rydyn ni'n ei wneud.

And um then they wanted people with no experience as well, so I I fitted that category and so I did the phone interview and then I I think they had about five hundred applicants um sign up online, then they whittled that down from the phone interview down to eighty and then we had to go for a live interview, um, which they whittled that down from eighty down to twelve.

And then for the final twelve, um, we had to do two days filming at the City Index offices and they out of the twelve they whittled that down to eight and we were the final eight and then the competition started. Okay, okay. So what was the whole sort of concept, the the idea of the competition? Right, so the the whole concept behind the idea was literally taking the eight people off the street with little or no trading experience at all.

Teach us how to trade effectively what a lot of people would say was the right way, like t a combination of technical and fundamental analysis. We were sort of candle charts and candle patterns, how to read like uh fundamental news and how to put it all together into a trading plan. And from that, um, we we just learned a a good basic foundation and framework to trade and we was off and running. Okay, okay, interesting. So

What was some of the questions that um they asked you like? What was the screening process like? You said that you went to a couple of interviews. What were some of the questions that they wanted you to answer? Oh yeah, so we we'd sat down and they literally hit us straight away, like on the day I went for my interview, um but as soon as I sat my bum on a chair, they said to me, like, What what did the FTSE close yesterday? And to be honest with you, I didn't have a clue'cause

I I really had no idea. And they asked me what sort of um Finn asked me the price of oil closing the previous day. Um and also they asked me um just to give'em a financial story that I'd read in the paper.

So but they just basically want to make sure that you had an ink in and an interest in trading primarily,'cause they would just wanted to make sure that people were interested in the subject matter at least.'Cause um uh gotta remember there was a hundred grand prize money up as well, so It w it was taken very seriously and a lot of people did follow it in the UK at the time.

Okay. I mean it kinda sounds like you just saw this this opportunity and you just sort of decided I'll put my name in, I'll put in my email and if I get it I get it Um and you did get it but did you have any real desire to

become a trader, like make a career out of it? Oh, a absolutely. I mean when during when

when the interview process was going on at the time I was doing the knowledge to become a London black cab driver. I don't I'm not too sure if you know what the knowledge is. It's a it's a studying process you have to go through to become a cab driver in London. And the plan always was mewn gwirionedd, mae'n gwirionedd, mae'n gwirionedd mewn gwirionedd mewn gwirionedd mewn gwirionedd mewn gwirionedd mewn gwirionedd mewn gwirionedd mewn gwirionedd mewn gwirionedd

I ended up being sort of catapulted into learning how to trade. Then I became the cab driver afterwards and that is how the black cabbie trader came about. It all sort of come together at once. Okay, okay. So let's just go off on a on a side tangent here. What is the knowledge?'Cause I know um the whole cab driving thing is taken very seriously in London. So w what is the knowledge?

Right, so the knowledge is basically you've got to look the centre of London is Sharon Cross Train Station. Now you've got to learn the six mile radius of that. And they say it's about twenty thousand streets and you have to learn all what they call points of interest, which is essentially anything that anyone can come up to you and ask you to take'em to, i.e. train stations, police stations. uh museums, theatres

absolutely anything you can think of, statues and you have to do that and it's a process and you just do your best. You have a lot of them oral exams. You literally go into a room with an examiner and they literally ask you four questions, take me from A to B, and you have to do what they call call it. So I have to say left into so and so street, right into so and so street.

cross this roundabout, left into this street, right into that road, and you have to get them there. And then it's a long old process. I'm very proud of it. And eventually I got through it, but fortunately I learned to trade before I finished that. So I got I I got to hit the ground running with both. Yeah. Right, that's really full on. So you not allow to use any GPS?

No, no, no, no GPS no, it's all done by memory and you just look uh you look at a uh basically a flat laminated map of London and you use like a water marker to pen in the line'cause you have to go as straight as you can essentially. They call it um

on the cotton, which is basically you put a a cotton um string from one end of the route to the other and you try and call it as straight as you can. So left right, left right, no going up major roads and then just chucking the left. You've got to use all the intricate routes you can. Wow, wow, okay. Yeah, it was a busy time.

So where does that fit in in your life today? You still do what a few hours cab driving each day? Well yeah, exactly. So because I trade the US markets, um as I said in London, they don't open'til the afternoon. So I get up early in the morning I go out like 7, 8 in the morning.

two or three times a week, do a few hours, come back in the afternoon, sometimes before the US market opens, sometimes it's not just yet. But I've done all the homework the night before and then I watch the open, but I've said on Twitter

Um sometimes a lot of the time the market opens and I do nothing because I'm a position trader. Um everything's very automated in respects to moving the stops. I don't unless I'm actually opening new trades, there's not much for me to do. So I just but I just watch it and I love it. Yeah. Keeps you oc occupied during the day. It's excellent. Exactly, you know, and I I'm I'm always on I'm on Twitter

and stock tweets. I'm reading articles and I'm I'm talking to people and I read uh I'm answering emails and I'm reading trading books. I just trying to immerse myself in it really.

Good stuff, good stuff. So let's get back to the competition. I really want to dig into this a little more. Yeah, my wife. Um Why do you think they chose you? I mean, you like you said, there was a lot of entries to get uh into this competition. Why do you think they chose you? Is there anything that stands out? Well

I actually did ask them this question after it was all over and they just said um that they could see I was hungry, they could see I was really I mean, I'm a competitive person in nature and I I really was keen to win. We've got I mean, even if it was even if there was an underground prize money. I'd have still done my best to win.'Cause it um I as it was over five weeks There were five trading weeks and I won

three out of the five weeks, I finished second one week and the week I didn't um I finished in the bottom three, no one made any money. And and they just saw something that I was I was really keen'cause I was I could I was so pleased to get to the final um sort of almost the final selection process and they loved they just loved my enthusiasm and they they thought I was gonna be good and it it ended up being that they were quite pleased with how I performed and it all finished uh with quite a um

quite a bang at the end with my final trade and it was all exciting and a lot of people followed it. So yeah, they were they were pleased with the result and obviously I was too. Right. Okay. So what were you

I guess what I wanna ask is what were you taught? Like what was the training like or w were you just kinda sort of set free? Like was there any process that you went through right at the beginning, like maybe in the first week they put you through some sort of programme? Was there anything like that? Yeah, there was, that's correct. Yeah, there was um well I mean, we used to go to their office every day at the beginning, we had a lot of seminars and we were basically talking.

technical analysis one oh one. like basic ch candle charting, I mean literally what the wick on a candle looked like, stuff like that. But then it went into technical analysis. ordered like stochastics, moving averages, um chart patterns and like everything you could almost think even ver I mean very advanced for a beginner, because we literally some of us had never even opened the trade. Some of them had, but there wasn't even that was that experience.

But um it was literally overkill, but it was done in such a way you couldn't help but not take it in, and because it was for a competition. everyone was keen to listen and not miss out. So you just sort of like became a sponge and I I still use a lot of what I learned then today. Okay. So who were I think there were two sort of key mentors who were giving you some sort of guidance um throughout the whole competition. Who were the the two uh mentors? Yeah, that's correct. That's um James Chen.

Yn ymwneud hyn, yn ymwneud hyn, yn ymwneud hyn, yn ymwneud hyn, yn ymwneud hyn, yn ymwneud hyn, yn ymwneud hyn, yn ymwneud hyn, yn ymwneud hyn. And also um Ashraf Lidey who's a very well known person in the UK and even the world. He's he does Bloomberg and C N B C and stuff like that and he's wrote another another person who's written another couple of books. And but w it wasn't just the webinars, we had them on twenty four hour call.

you know, I we'd get emails and phone calls and they were really'cause they were during the competition there was a live PNL table so they could see and we could see how everyone was doing and it was really engrossing and they they were really good guys and they gave us a lot of good advice.

also not just about the technical part but also the psychological part. Don't panic if you're having a bad day and stuff like that. It wasn't just about that, it was'cause m some of us had never traded before, so we didn't know how to handle losses and if things were going not the way they should have done. So

It it was a lot of aspects that I mean, to be fair it was a real baptism of fire actually, uh unfortunate that I got in hindsight. It was a very stressful time. I hardly slept for five, six weeks, but afterwards When I look back, um i I I was really fortunate.

And just so we're clear, whose money were you trading? I I presume it was probably um who was it, City Index? I mean yeah, City Index. So the thing was we was talking at the start amongst ourselves the traders, we were saying it was it's some kind of demo account, but coming to the end of the last few weeks and we started making some money, we wasn't completely convinced it was demo because they were taking it a little bit too I mean, I know it was a serious business.

I mean, regardless if it was demo or not, the winner on the last week was gonna get a hundred grand. But there was some real interest and so I'm not convinced it was demo, but it may have been, but then again it could have easily been real money and It it was I mean we treated this we treated it as it w as it was so. Yeah, yeah. So how much money were you allocated at the beginning and did that like sort of increase over the weeks or decrease?

Yeah, yeah, it did. So the first week we was given uh five thousand each and I think I mean, because it was a very we we didn't know what we was doing essentially and it was all very nervous and we He was dipping our toe in here and there. I don't think honestly we did as well collectively as we've as they thought we was gonna. So they kept it at the second week as five grand.

And then um the every other week every week after that it accumulated even more. And then in the final week we traded a hundred grand account. Okay. For the finale. Right, that's a big jumper. Yeah it was, it was. So what sort of style of trading did they promote and and what products were you trading?

Well, see, as I've spoken to you previously in a previous conversation that over in the UK we have something called spread betting, which I'm sure some of your listeners from the UK will know what that is. So it's a leveraged product and you trade it basically a pound or whatever it is per point. So for instance, if you bought Apple just say it was a hundred dollars and you did a pound a point for every cent it went up, so every dollar it went up you'd make a hundred pounds.

So and you can trade anything. You can trade FX, commodities, stocks. indices, any any um sort of asset class that you want. But it's not you don't actually own the underlying it's basically a futures contract essentially. Okay, and you were flat on all positions by the end of the day? Well no, what it was it it started on a Tuesday morning and it star and it ended

Um when did it and it ended Friday at noon. So we had like three and a half days of trading non stop. And I mean I had a day job at the time and I was trading while I was at work and watching the other guys trade. Some of the guys didn't have day jobs. And they were trading day and night, but sometimes that was to to the detriment of their account, you know. I just did what I could

Um I I was always there at the London Open and the New York Open. Um but you you could literally trade day and night up until noon on the Friday, but I I didn't want to go down that road. Okay. All right. Okay. Got it. So you mentioned um a little earlier that you were you sort of came out on top at the top of the leaderboard for I think it was three out of five weeks.

How did you manage that? Do you think um you were almost a little bit of a natural at this? Like, or was there something that something that you were doing a lot differently to many of the other traders.

Well, the main thing was I was trying to win every week, regardless, you know. I've said I would happily have fallen in on my shield if I had to, but a lot of the traders were essentially trying not to win. They didn't want to finish in the bottom three, but they weren't trying to win the week either. Whereas I tried to win every week and as I said three out of five weeks I did. Okay, so why weren't they trying to win just so that they were like just safe?

They didn't want to risk too much. Yeah, precisely. They would just plan you say I mean th some of them took some chances and uh th some it went sometimes it went in their favour, sometimes it didn't. But yeah, they they it was like the apprentice, the competition um the the program, the apprentice, as long as you don't finish in the bottom three, you're safe. And they were just trying to get through each week but

I was just thinking, I'm here, I'm gonna make the most of this situation, gonna do my best. If I ful if I fall on my shield, then so be it. And I loved it and like you say, uh inadvertently I did end up finding I had a knack for it and I I wasn't gonna apologise for that to the other traders.

Of course, of course not. So um come to the end of it. You won a hundred thousand dollars prize money. What did you end up doing? Hundred thousand pounds. Yeah, yeah, got to get that straight. Um what did you do with that money? Did it go straight into a trading account or how'd you what'd you do with it? Well, I mean spent a little bit of it obviously, I put a little bit away, but I used a very small amount'cause I mean I

I I'd learned a lot but it was only I'd only been trading for six weeks. So it wasn't like all of a sudden I think I'm Warren Buffett or Kyle Icon or anything like that. I was a realist. I I n I knew a lot. But I had I'd only actually been trading six weeks, so the competition finished in the end of November two thousand and I think it's twelve now, yeah, two thousand and twelve. And I literally didn't trade for two months. The thought of it, I traded so much in like such a small

like time frame. I just couldn't face it. So it ended in November twenty twelve. I literally didn't start training again'til February two thousand thirteen. I had a lot of things to do at the competition afterwards. I ended up on CNBC, I did some articles.

some interviews to some websites and and some uh trading related uh publications. And um but I just could not face it. And then after that I I started I because I won the money, I was obviously able to give up the day job and finish the knowledge full time Rydyn ni'n gwneud hynny. Rydyn ni'n gwneud hynny. Rydyn ni'n gwneud hynny. Rydyn ni'n gwneud hynny. Rydyn ni'n gwneud hynny. Rydyn ni'n gwneud hynny. Rydyn ni'n gwneud hynny.

Okay, John, so let's talk a little more about how you're actually trading today, seeing as you you know, you said that you did start out day trading. I know that's not the case any longer. Tell us about your approach today and um explain your style of trading. Yeah, right. So, um basically if after moving on from the day trading, I was I was day trading indices and as I said I did okay. But trading stocks was always really gonna be my passion going back to when I was a teenager.

reading the stock ticker prices and all the rest of it. So I decided to start trading stocks. I traded a bit of UK stuff, but it was very here and there. I didn't really have a standard approach. I was reading a little bit of fundamental. I was reading everything online. But it was all sort of like yesterday's news, I'll I'll jump in on any old ticker that was mentioned. But no real approach. And again, same with Vinice's, I made some money, lost some money, but finished net up.

Um but then I decided to get serious and so I read some books. I decided to focus on the US market uh for many reasons like the time frame difference.

I love earning season which we don't have over here. I mean, they do release results but it's not like a structured earning season like it is in the States. And it was then that I come across um Jesse Livermore Nick Davis and Richard Dennis and the Turtles and I just love the Turtles approach, you know, buying new highs, new lows, um, having a trading stop loss.

getting the signal, taking the signal, putting your stop loss in place. Don't get in your own way by trying to second guess what the market's gonna do. You know, just react. Don't try and predict and I've not looked back ever since. Are you ready to get serious about trading? Then join Tasty Trade, Investopedia's best platform for options trading in 2026.

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Okay, so were there any like big challenges that um hit you when you decided to make that change from, you know, day trading to now taking more of a trend following longer term approach. Like it's quite a big change and you also changed from trading futures to stocks. So what was that transition like? Well the transition basically the main thing was the t the time frame. I started holding for weeks and months, so the I would literally as I said, I would move stock.

And unless I was only in new positions, there wasn't much for me to do. And I was taking lots of small losses. I mean, this is the thing with trend trading, you've got to be able to get punched in the face repeatedly w uh getting stopped out and stopped out and stopped out. for small losses hopefully while you're letting the big winners run. So I take a lot of losses um but I'm in the background, the big winners are slowly fermenting in in my account. yeah yeah

So just so we're clear, how long are you holding positions for um on any given trade? Like you mentioned weeks, months, like what would you say is maybe the average? Well, I'll I would say on a winner where say three to four months, sometimes it's even been six months and on losers I'd say one to two months, sometimes I've i I've literally got in at the worst time and it's shut me out within a week. But

That's that's that's the nature of the game. Uh I I've said before, show me traders that don't have losers and I'll show you a liar. You know, it's nature of business. Um I take I take obviously I don't even think about'em now. I've used the analogy before. It's like um a parachutist when they're um they're they're gonna go on their first par parachute jump, they they when they're about to jump out of the pain they're nervous, they don't like it and then they jump out and they're scared.

but then after their 100th jump, like same as my 100th floss, you don't even think about it, you take it, you move on and you go on to the next trait. Mm-hmm. Yeah, you just accept it and and move on like you said. Exactly. It's just one of many trades. I don't I've said um previously, I don't even m it doesn't even matter what the company does now. The company ticker is borderline irrelevant. I run scans.

I look at the charts, I pick the charts, I put on the trade, I manage risk, I manage the stop. The fundamental side or what the company actually does is very relevant uh irrelevant and I just manage risk. Mm-hmm. Okay. So let's talk about your scans. Like how do you run your scans and what are some of the parameters that you're using? Right. So I use a website which I'm sure you're aware of, uh Finviz. I mean it's absolutely fantastic for US stock.

ac yn ymwneud â'r Tertles. Felly, rydyn ni'n gwneud â'r Tertles. Rydyn ni'n gwneud â'r Tertles. Rydyn ni'n gwneud â'r Tertles. Rydyn ni'n gwneud â'r Tertles. Rydyn ni'n gwneud â'r Tertles. regarding what he when he spoke to the traders. I I tr I long fifty two week highs, I short fifty two week lows. um with a few added parameters, not nothing nothing major like um they've got to have a decent volume and an increase in earnings per share, which is what I always find handy.

and I basically run the scan every day in the evening, UK time and I really look for the same stocks. I don't just see the stocks hit the scan on that day and I'll I'll jump straight in the following day. I look to see the same stocks

hitting the scan over and over again and then I'll take a closer look at the chart. And sometimes I literally do get in at the wrong time. I watch it ten times hit the scan, I mean not not necessarily ten times exactly, but I see it hit the scan a number of times, jump in and that is literally at the wrong time. But And I risk a certain percent per trade. I have small losers but big winners, so I never really worry about getting stopped out. Mm-hmm.

Could you tell us why um you look at increased earnings per share? Like what is why does that matter to you? Well, it's just as a I'm not as I'm about ninety five percent technical. So um and I want you to have a fundamental sort of part of my part of my strategy and earnings per share it seems to be a good barometer. If it's got an earning uh an increase in earnings per share

obviously I want along it and if it has a decrease in one that seems to be a good barometer to as a potential short. And I just keep it very simple like that, you know, I don't overcomplicate things. And I've been doing this uh two, three years now and as we say over the proofs in the pudding, I've been doing very well. Okay, cool. So you used um you mentioned there you use finvis dot com. Are there any other resources or pieces of software that you use um for your scanning or trading each day?

So I use as I say, I use FinViz for the scanning, but for the charts,'cause I'm an end of the day charter and end of the day trader, I don't need we I don't really have to pay for any um intraday stuff. So I use freestockcharts.com. um which does everything I need. It's got every um technical indicator, anything you want to add to a chart you can add to it. And also um Twitter and Stock Twits. I know I post charts daily. Um sometime I get critiqued on them.

And I I talk backwards and forwards with traders and if anyone asks me any questions or if I have any questions for myself, um I talk to other traders. I find that's a great tool as well. Being able to talk to um other traders on social media these days is priceless. No doubt, no, I completely agree with that. Um You're very technical in your approach, you know, like I said, ninety five percent of what you do is based on technical.

What are you actually looking for on a chart? Um, I know you've kind of mentioned uh fifty two week highs and lows and that sort of thing. Is there anything else? Um I noticed that you use uh trend lines to to some extent. Um can you tell us a little bit about that and maybe some of the other things you're actually looking for on a chart?

Oh we're gonna basically on the charts, keep it very simple. I'm looking for smooth charts. I'm I look I'd look over a year or two years um daily chart and I really just want to see a smoothish line where it's higher in the right hand side than it is on the left hand side. And I don't want to see any major whipsaws.

And if you look at some of the charts I've posted, they are just slowly creeping up. It's not very exciting. It takes time for these trades to sort of cross the threshold where they actually start making money. Um but I f I find real real trading's not exciting. This isn't w the Wolf for Wall Street or anything like that, you know. They're just in the background. It's not my primary day job and I'm in a position where I can like as they say, cut your losses and let your winners run.

Okay. So when you I just want to ask you a couple questions about actually using trend lines. Um j just so I'm I do have this right. Trend lines are something you use, is that correct? Yeah, yeah, I u I use trend lines but I mean that's more it's more lip service. I don't do a d I don't I don't buy Or sell when they bounce off a trend off a a trendline channel. They're on there purely for for lip service, just to make just just so I can see that

it's in a channel but regarding entry or exit I don't really use them. I'm they're on my chart but as I said they they're more for lip service really and just for me to to be mindful of them. But yeah I don't do a diet by trend lines. Okay, okay. No, that makes sense. So they're more there just as sort of a loose guide, essentially. Yeah, it's a mi put p precise Aaron, just a loose guide. They're on there, I'm looking at'em, I'm aware of them, but

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possible trade ideas and then I then go in and I filter the scan to to look for the smooth charts that I and that I like and also to as I said before look for the same stocks that have appeared previously on the scans. İzlediğiniz için teşekkür ederim.

Okay, so let's talk about how you actually do open the position because um I I got a feeling that you open your position just on the market open the following day. Um is that how you approach that? Yeah, that's correct. So so for example, tonight I've run the scans, um, I've seen some stocks I like. I'm not too sure if I'm gonna open positions tomorrow, but hypothetically, if I was to open trades tomorrow

Um, first of all I have to worry about my trade size. I I risk between two and four percent per trade. So I have to look at where my stops go'cause I as you said, I opened that the market open, so I don't even know where I'm gonna get in. But because I'm a trend trader And as I'm sure most trend traders will tell you, because you hold for such a long time, entry isn't that very important really. I just click the button and wherever I'm in I'm in. Because I'm not day trading

and I hold for weeks and months. If I get in and the markets I've lost a couple of cents here or there, it's not the end of the world. So, um basically yeah, the night before I look at where I need to I know where the stop needs to be placed'cause I know where I'm gonna get out before I even get in.

So I know where the stop's gonna be placed. I I calculate where from the previous nights closed to where the stop's gonna be placed, how much I can um what my trade size is gonna be. I note all that down. The following day at the market open two thirty UK time. Um I just open the trade with the trade size, add the stop and I'm and it's off and running. Very simple.

Okay. So I know everyone does this slightly different. Um how do you decide on your risk and position size for each trade? Um you you mentioned they're two to four percent. How do you decide Um what trades you're gonna risk two percent, what trades you're gonna risk four percent?

Um, just walk us through that a little more. I think that'd be really interesting. Well yeah, so I mean I it goes back to looking at the charts, you know. If some of the charts I've looked at previously were a bit whip sorey, I might risk slightly less. ond if it's a nice smooth chart like obviously bottom left hand corner and it ends up in the top right hand corner over the last year or so roughly

um then I'll risk a little bit more because I like smooth trends, you know, it's a very softly, softly it's trading in my experience isn't a get rich quick scheme. So I'm looking for soft, smooth moves, no stress. I don't have any stress in the market now. I can calculate where the stop is from the previous and where my stop is going to be and where the previous close was and I can calculate how much I can actually trade on that trade i.e 2 or 4%.

So I know my trade size and then as I said the following day open the zip position and that's pretty much my part apart from moving the stops. Mm-hmm. Okay. Got it, got it. So Let's let's discuss how you balance um long and short positions. Um is this something you give any consideration to, like not to be too heavily weighted on longs versus shorts or

Yeah, no, no, no. I I think about this a lot because uh another reason why I tr I used to trade long only. The thought of shorting a stock was just it was just my brain couldn't program that right. But I soon got rid of that and um I'm happy to long or short a stock And over the course of the whole portfolio I do try to be evenly weighted because I want to be hedged against general market conditions because in the past

I've had days where my longs have been absolutely shredded, but I've been paid off on the shorts and vice versa. So I do try to weigh it up. But if the scans are giving me long more long uh trade candidates than shorts, then I I ha I have to do what my system's telling me. So I may I may lean towards being more slightly net long than short. But then that also happens on the reverse side sometimes. But I do try and even it up as much as I can at all times.

Yeah, yeah. Okay. No, that's really interesting. And what about um like a maximum number of trades that you have on at any one time? Is that something you also give some thought to? Yeah, I mean I do'cause the more positions you have, the more sort of maintenance it takes and it takes time and stuff like that. So and I don't want to be doing too much of that'cause I like it very mechanical. So I like

like maybe eight positions at the max, but in the past I mean I've had twenty positions and it was absolute crazy. I just felt like I couldn't it was taking a lot of time to make move to stops and checking the prices each day. So I I've I went I but I used to basically try to trade like a one man hedge fund and I essentially still do to this day, but I try and have a concentrated portfolio maybe of eight positions

If I can, as I said, equal weight, it's along and short. And also I'll try and diversify through the portfolio as well. I don't want to have too much in one sector. Okay, okay, right, right. Now that's really interesting. And um I guess the last part of it is

How do you think about etch exits? What's your thought process around exiting trades? Um, how do you determine where that point will be? And we're talking about profitable trades here. Yeah, yeah, of course. Well, exact do you know what? I literally just in line with the turtle trading guys, I used on chin channels.

And I I follow a um certain dungeon channel time frames and a every day when the market closes I look if the the stock needs to be raised obviously for long trades or lowered for the short trades. And I literally 'C get stopped out on every trade for a winner or a loss and as I said I've had lots of winners, lots of losers, and I and I don't worry about either way. I just I I see a trade's close for a winner, pat myself on the bat for thirty seconds, five seconds, and then I move on.

I like it, I like it. And just for anyone listening, if um you don't know what Don Chin channels are, they're essentially just the highest high or the lowest low over X number of days. Um and that's what I want to ask you about. Do you change the parameters of Doncian channels for each stock that you're trading or do you have a generic um time frame that you apply to each and every stock.

I literally trade exactly the same strategy for every single um stock. So I've my my long strategy is literally a mirror image to my short strategy. I literally could not trade Any other way outside my strategy now. Otherwise I'd start having sleepless nights. I wouldn't know where I've got in, I wouldn't know where to get out. So I'm I'm very O C D like that. I've got a

I've got a system and if they as they say, if it ain't broke, you know, don't fix it. And uh I'll I've got a system and I stick to it. It's all it's all about the process. Okay. So with the Donjian channels though, like the the actual settings um for the number of days highest. I I found between um a tw the twenty days pretty good. I've looked at the forty. But yeah, between twenty and forty days because I because I'm holding for weeks and months, the

I have to have a wider donching channel. If you're if you're gonna be trading like a swing trade, maybe you can use a five day or something like that. But yeah, I find the the longer the larger number day, the longer running day don't channels work for my system because I'm holding for weeks a month.

Okay. Cool, cool. Now, um I'll there's something I wanna ask you about and that's um how you view your trades or your your overall trading performance as like sort of from a portfolio level, instead of actually being worried about how an individual trade performs. So could you tell us a little bit about how you view and how you think about that side of it?

Well, um well you mean talking about in terms of growth? I mean I I run a lot I run lots of positions that one closes open another and I I've said before I I have a lot of losers um small losers and I have big winners and I mean I I literally when I open a position I do not know which ones are gonna be the winners or which ones are gonna be the losers. I just run the trades, I managed the risk And over time all going well with the portfolio grows.

Mm-hmm. It's a very simple approach, you know. I I don't try and over complicate things, I don't get in my own way. I'm just looking as long as I stick to the process I know It's simple mathematics. If you have big winners or small losers over the long term,'cause it's all about longevity at the end of the day, you're um you're still gonna be in the game'cause if you haven't got any money, you can't trade. So as long as you've

got money and in your account to trade, then you're still in the game. And that's what it's about for me. Because I want to be doing this till the day I die, which hopefully is a lot a long, long way from now. Hundred percent. No, I totally agree with you.

One of the things which you kind of you you kind of preach is that you must follow your rules, and that's very, very important. Um, I think the The thing that a lot of traders probably struggle with is that they doubt their rules and they don't know why they should trust their rules. So I guess what I wanna ask you is how did you validate your rules to have the confidence to be so disciplined in your trading? Where did that come from? Like you obviously came up with this strategy.

How did you know to trust that strategy and follow through with it, even when it's losing? Well, I mean, essentially, I read about a lot of successful traders. I said Jesse Livermore, Nick Darvis, The Turtles, Richard Dennis. I mean, these people were successful people, so if you're going to follow people, learn from the successful ones. So I already knew

that their approach was sound and I just had to give it a go myself and you have to be patient. That's what I find where a lot of new traders go wrong. They're too much of in a rush. 'Cause they think they're gonna get the Lamborghini in the mansion in six months and unfortunately that's not always gonna be the case. So I was very patient, I knew it was gonna take time, and fortunately because

Rydyn ni'n gweithio, ac yn ymwneud â'i gweithio, ac yn ymwneud â'i gweithio ymwneud â'i gweithio. Rydyn ni'n ymwneud â'i gweithio ymwneud â'i gweithio yn ymwneud â'i gweithio. you know, put the time put the chart time in and the screen time and stuff like that. So um it was just I found patience is the key, especially at the beginning.

Yeah, yeah. And that's a good spot to be where you're not forced to be making money from your trading'cause as we know that can lead to many rational decisions. So no, very good point. Now last thing, just to take us out here, I'd love it if you could just

expand on what you mean when you say don't get in your own way'cause I've heard you say it a couple of times throughout the interview and I think it's a really valid point. What I mean when I say getting my own way, um in the p I mean I was guilty in the past of getting in my own way. Like I've I've had stops in place and the p the trade was about to hit the stop.

and I'd get in my own I'd I'd change I'd get in my own way and change the process. I'd move the stop, I'd remove the I'd I'd lower the stop or raise the stop if it was uh short and I'd start tinkering around with the trade'cause I'd like Now I have a plan, I stick to it. I don't know how to trade outside that plan. But when I mean get in my own way, start tinkering around and have a plan, stick to it, have a process.

and have the patience to ride that process to the good and the bad because you're gonna have some bad drawdowns and some bad times, especially with trend trading, you're gonna have lots of losses while you're waiting for the big trades to come. So basically just let your system be Keep it simple. Rydyn ni'n gweithio gyda'n gweithio gyda'n gweithio gyda'n gweithio gyda'n gweithio gyda'n gweithio gyda'n gweithio gyda'n gweithio gyda'n gweithio gyda'n gweithio gyda'n gweithio gyda'n gweithio

You know, I buy a trade, I'm I in a long position sometimes and they pull back a little bit before they go ahead. And people say to me, Oh, why'd you get in there? Why not wait for the breakout? But I'm happy to get in the trade. ride the pull back and then and then I'm already in for the next leg up and I just let them do that. I don't get in my own way by waiting for this or waiting for that. I'm in the trade and I let it do its thing. Good stuff, good stuff. Brilliant answer, John.

Do you want to share with listeners where they can go to find out more about you? Yeah, so um obviously I'm on Twitter, you can find me at at underscore John Woolsch underscore Rydyn ni'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd

Um my email address is John.walsh at blackcabbitrader.com. I'm happy to talk, answer any questions and and just generally chat trading. I can talk trading day or night as I'm sure your listeners will tell. And um please get in touch, I'm happy to chat.

Awesome, awesome. John, would you be open to answering questions that any listeners might have uh maybe in the comments section below this interview? Absolutely, Aaron, that's a great idea. I never thought of that. Yeah, please uh any questions anyone has. um via the comment section, please do and I'll get back to you as soon as I can. Good stuff. So chatwithraders.com forward slash

whatever number episode this is, um scroll to the bottom of the page and leave a question in the comments area. John will get back to you on that. Obviously monitor that very closely myself as well. And one thing I just want to point out is that You've mentioned the turtles a couple times. Jerry Parker, who was one of the original turtles, has been on this podcast. He was on for episode 67. So if you want to check that out.

Um it probably complements this episode nicely. So that's uh chatwithraders dot com forward slash sixty seven. Um awesome interview with Jerry. All right, John. Well it's been a blast to have you on. Thank you very much for doing this, man.

Are there any final words or are we good for now? Yeah, no, we're good. Faith, as I said, thank you for having me on. I loved all the work you do. Keep up the good work and I look forward to future episodes too. So uh good job on your part. I appreciate it, man. Thank you very much, and let's stand to touch out. You've reached the end of this episode of Chat with Traders, but rest assured there are more episodes.