095: Adrian, @AdeyF69 – Why it Pays to be Relentlessly Process Driven, and When Stats Count

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What is going on team? I hope all is well with you. Thanks so much for being here. For this episode, the trader who I had the great opportunity to speak with and who you're about to hear from is Adrian or at Addy F six nine on Twitter. Going back in time, Adrian was a professional sailor for almost two decades, but for the past six years he's been on dry land taking an income from financial markets as an independent day trader.

Adrian primarily trades the Bund and the DAX, though he initially started out in foreign exchange. His trading strategy is influenced by support and resistance areas, volume profiling, order flow, and stats. After talking about how Adrian survived storms at sea, torturous sleeping patterns and run-ins with pirates. We spend a fair amount of time discussing how Adrian actually uses stats.

And some things to watch out for and why it pays to be process driven. Please enjoy this episode, guys. I'm Aaron Firefield, your host, and here is my guest, Adrian.

Hi Aaron, how are you? Hi Adrian, I'm good man. What's up? Um, not much. Been um just trading today. Yeah, yeah, cool. So you had a bit of a storm last night? Yeah, man, it got pretty um it got pretty wild. Did you see uh the the the photo I posted on Twitter? Yeah, I did, yeah. Was it um a tree branch to come from the window?

Yeah, from across the road. Um, the whole sort of top of a tree blew off and flew across the road. Uh branch came straight through the window and uh the road was like blocked, obviously'cause the tree was across it. The the roof next door on our neighbor's house has like a three by two meter hole blown in the side of it.

What else? Our g the guttering along the front of our house blew off. The fence in the backyard is on a total lean. Um it's only been held up because there's a couple of trees behind it. Yeah, we're gonna have to obviously get on the phone to insurance and um a lot of clean up. Oh, there's so much shit in the pool, including part of the neighbor's roof next door. We've gotta try and dig that out, so that's gonna be fun.

And it's a bit too cold to jump in there and grab it at this stage. Summer's not quite here yet. Yeah, yeah. But uh no, it's all good. It's all good. How's your weekend? Yeah, good just Spent some time with the Missus. Done my usual weekly review and trade and and analyze and all the work around that side. So quite busy. Very good. But well my Mississippa from home during the week, so I'm home alone. So I try and spend a bit of time with her at the weekends, otherwise

W you know, we both just end up working all the time. Yeah, yeah, absolutely. Now you gotta have that balance.

So before we talk trading, I'm actually really interested to hear a bit about life before all of this. Uh you were a pro sailor, is that right? Yeah, I was a professional sailor for seventeen, eighteen years. Um sailing uh you know, uh sailed around the world, lived in America, Caribbean and France, so I had quite interest in life um doing that and enjoy and sailing's always been a bit of a passion for me.

But it got to the stage where I was reaching, you know, my early forties and there's a lot of travelling and living out of hotels involved with pro sailing. And it was kind of what do old sailors do? And uh I was getting a bit bored with the travelling and you know, out of hotels. And I wasn't doing that much saving anymore, I was managing projects and Um so I I left that I did some project work for a friend of mine who ran a um a currency exchange um doing deli deliverable currency.

And I was managing the new build of his website and his database and stuff and that's what got me interested in trading because they were obviously um using charts and stuff for the forex markets. And um and that's how I got into trading, started part doing trading part time on the side while I was doing other projects.

and um then decided a couple of years into it that I would I wouldn't mind having a go at making that a c a career. It interested me a lot. Had a lot of similarities on the outside to um I used to do a lot of weather routing and analysing the weather for my in my pro sailing career. And on the surface it seemed to be very similar to doing stuff like that. And that's all that side's always interested me and processed.

Yeah, okay. I mean the stats in particular is something I'm very keen to ask you about. Um so we're gonna really get into that in a moment. During your sailing career, what were some of the competitions that you uh participated in? I did the Fastlet race um seven times, did the Newport Bermuda, done Cork Week twice, Cows Week nine times, um I did the Clip Around the World race.

Um, we used to have um see what we call the raw rock races, which are offshore races basically around the English Channel. I did so many of them I can't even remember the number of them. So I used to compete a lot, um, round the cairns and offshore.

Full on. Okay. And do you I mean, do you have any stories from like being out at sea and any like wild weather and huge waves, anything like that you sort of came up again? Um yeah. I mean I've been out in storms in Bay of Biscay where other boats have sank. You know, I've been the the one of the first well, I say one of the first trips is my third transatlantic and back then in the early well, late eighties, early nineties.

that most small yachts were still didn't have GPS. You couldn't afford GPS on small yachts. And so what you're still doing transatlantics at the time are using sextants, astro navigating by the the sun and the moon. and the stars. And we are doing a delivery, um taking a pen a penate tow from France to the Caribbean and we was hit by a storm about six, seven hundred miles off um France and it was so windy. yna yna yna yna yna yna yna yna yna yna yna yna yna yna yna yna

Um but the boat was leaning over about fifty degrees, just permanent hill with no sails up. We uh taken the sails down'cause it was just too windy for the sails. And at times like that there's a a say which is I think stolen from World War One, but there's no atheists in a small boat at sea in a storm. Yeah, I can imagine. I mean, what do you do in times like that? Do you just sort of sit still and hope for the best? Or I mean, is there anything you can do?

you are very much in behold of uh mother nature at times. So there's stuff you can do but if the sea wants to take you, the sea's gonna take you. I mean, one of the worst things I ever saw was coming across mid Atlantic um Mae llawer o llawer o llawer o llawer o llawer o llawer o llawer o llawer o llawer o llawer o llawer Into a a raft and they've been out there for a while and they're all stained and everything. And so obviously, some of you try to use it as a raft.

Rydyn ni wedi cymdeithas ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud hynny. So we couldn't report it. Um we ported it once we got to the um the Caribbean side and it had been because it had a ship's number on it and it had been a fishing boat that sank about six weeks.

they never recovered anyone. They just disappeared. So we had come across the last place where obviously the survivors had um tried to make or how many of them we don't know, tried to make a raft and had a guide there. It's quite unnerving when you're like two thousand miles from the nearest um piece of land. But it does make you realise what the human body or the human being is capable of.

in them conditions when you get to situations where you're so tired or hungry or dehydrated that actually you can go keep going and do stuff and you see people that you never thought would um in the moment of crisis stand up and people you thought will be strong in moments of crisis um crumble. Mm. Mm. Yeah, yeah. No, that's uh that's that's really interesting to hear about. I mean

I don't know if this might be a bit of a silly question, but you know, during your your sailing career, was there ever a risk of pirates out there, you know, in the seas? Um in certain areas, yeah, south of the s South China Sea and there's pirates and they're not what people imagine to be. They're basically um they were basically fishermen that could see a um expensive boat sailing along in a race and were opportunists.

so they'll try and come alongside or they'll go right in front of us and drop their nets um like twenty, thirty meters just in front of us hope and would run into them. So they're there were opportunist pirates. So they weren't going round especially looking to pirate, their main thing was fishing. Whether if they saw opportunity to um Take advantage of unarmed um or

Okay. So did you have run ins personally like this? Yeah, they they tried to be baldied and they tried to um get alongside us a few times. Yeah, was there ever a time when they did come on board? No. No. I always you know, on that trip down there I spent nine days at sea. Um, I slept every two hours for twenty to thirty minutes and that's what was my routine because of the

the risk of pirates and that sort of stuff. So I was constantly going up in deck. So I spent nine days doing that. I never slept more than 40 minutes in that nine days. That's crazy. What happens to your mind during when you're when you're sleeping with that sort of pattern?

Um, it's not particularly good for f focus or making good decisions. You operate at a very base level. Um, you're constantly tired. At one stage you got so tired or it's hallucinating, so that when I had a forty minutes sleep. Mae'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw

So whilst that wasn't particularly good, I looked from that I learnt lessons about how to manage my sleep in future. So I've done a twenty day trip where every four hours I slept for only one hour, so I never got into REM sleep, so I never woke up. Um I woke up feeling tired, but I never woke up out of it. Mae'n ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud.

Wow, yeah, I imagine that'd be really tough going. I mean, why were you why were you doing this? Were were these solo trips? Like was there no one else on board with you for that? No, it was a it was a fully crewed race but it was an amateur race, so I was only professional on board and I was So I had Aventure Crew with me. And um So you're responsible for them and during their South China trip it was um pretty windy.

Felly mae'n cael ei fod yn ddangos ac mae'r ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud. Which don't always have proper lights once you can't see them, you just have to be on the ball the time. Yeah, yeah. Okay, full on.

All right, so let's let's talk a little bit about uh trading. Um Talk to us about how you beca went from being a sailor to actually becoming a trader. You mentioned that you were doing some sort of project work with um Someone who ran a currency exchange. Uh would you want to elaborate on that a little bit?

Yeah, it was a currency dealer, so in UK there's various currency dealers that if you want to exchange money via the bank, they charge you um quite a large percentage or they used to charge quite a large percentage. So various companies set out As intermediates between banks and the public. So you could exchange money with these companies and you'll get a better exchange rate.

than doing it with the bank because basically the c the this currency firm would put everyone's tr um currency trades together and get a better deal on the exchange rate. So you could get like at the time the banks used to charge about four percent. To change your money. Rydyn ni'n cael ei wneud cael ei wneud cael ei wneud cael ei wneud cael ei wneud cael ei wneud cael ei wneud cael ei wneud Euros, pounds or dollars and above. That's because then they made savings on that.

So he was a friend of mine and I went there to um oversee project management of these build these databases website. Okay, excellent. And so how did you go once you kind of made the decision that this was something that interested you and you wanted to pursue it further? Like what happened from there and and how did you go once you started to get into trading a little bit more?

I think I've followed the the path of a lot of um retail traders as in buying a system off the internet and paying for poor quality courses. Um basically because I didn't really have enough knowledge to understand what I was looking at, whether I could value if it was good value for money. And, you know, was sucked in a bit by the the sales pitch of that all you needed was a system and and you'll be rich.

I soon realised after about a year that that wasn't really going to be the case and then started looking for a system and trying to get myself organised rather than just a get rich quit scheme. So that was how I started.

I made all the mistakes, a lot of retail traders make mistakes because... a lot of the times people just really have the information to make good decisions and i was looking for shortcuts but after trading for six odd years for about two to three years in realising the shortcuts I was looking for. I trading systems, set ups and edge actually are the wrong shortcuts that I should have been looking for. And I think which most be beginners shouldn't be looking for.

Okay, so would you mind elaborating on that point, maybe a little bit more about some of the shortcuts that you think we should be focusing on if we should be focusing on shortcuts at all? The the average retail trader that I've met and myself, you know, are looking for set ups and systems to start with because they think that's the the the best path to follow to profitability.

But over in the first two years, sorry three years, um And really it I was nearly profitable before I actually realised this that out of all the profitable traders I met, you know, whether crop firms, X retail, they all traded different systems or different setups. And it suddenly occurred to me that

The common link between all the profitable traders wasn't that they were trading just one way, they were trading a variety of systems. Actually the common link between profitable traders is actually not their edge. is the the way they appro they approach the the whole business of trading. So they w they knew how to, you know, evaluate an aid. you know, how to understand po they understood probability, how to review, how to change the systems and how to process stuff.

So that all their the thing in common was just how they approached the business. So if I was decided then if o the best way to replicate and to return profitable was not actually just to just purely focus on finding a profitable system, was to replicate the work ethic and the the principles of the all the rest of the side. of the profitable traders, i.e. process, you know, how to evaluate a trading system because we buy these trading systems off the internet or you follow someone

And most of the time we don't know how to honestly evaluate whether it actually ha trades in has an edge. Okay. And when you came into trading when you first kind of uh

got started. Were you doing this did you sort of jump into trading full time or was this something that was sort of a a side hustle while you were continuing to do this contracting work? start with it was a s a side hustle. I was doing it part time in the evenings and One thing about myself I know that I'm not particularly good at focusing on two different projects at the same time.

So that I found that either I was focusing on the trading and my project work was suffering or I was focusing on the project work and the trading was suffering. So after about a couple of years where I wasn't really making much progress. So I decided that if I was gonna make a go of trading then I would have to stop doing the project work.

and um focus on the trading, which then meant I had to sit down with the wife, ready to sort out our finances and basically then she was gonna have to support me until we got profitable. and um we'd have to make fairly drastic cutbacks in our lifestyle to support that. So that was a um a decision we made as I went full time.

And then it took me about ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud So after about a year of trading for exercises, I was going to move to futures really to get more opportunities. And then once I moved to the futures market I realised that my whilst my system I was trading the same system or had edged the market that the rest of the my decision making or how I approach

the trading wasn't robust enough on the lower time frames. On the daily time frame, you know, I I would have hours to make a decision and watch the markets, but then when you go I was going down to the five minute time frame, might only have a minute to make the same decision.

I soon realised that my whole process and decision making approach wasn't robust enough for that time frame, so I was a lot more inconsistent, made a lot more discretionary errors and it took me a while to get to get to grips with that and to get on top of that. Okay, so I'd just like to back up a little bit to when you sat down with your wife and you had that discussion about when you were going to step into trading full time and at this point you weren't profitable.

I mean, what did that discussion sort of go like? What were some of the things you talked about? Um, did you have sort of uh in a sense, goals that you wanted to hit profitability within twelve months. If you didn't do that, you were gonna, you know, pack it in and go back to work. I mean, was there anything like that? Did you set any kind of milestones that you wanted to hit? Uh right at the beginning there.

Rydyn ni'n ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud. You know, one thing uh my my wife knows about me and myself is that I've um a tendernicity that, you know, if I approach something, either they'll do it or they'll go in the back garden and still trying to do it.

Yeah. I mean you must have been pretty confident in yourself that you were gonna be able to do this. I mean, it's quite a big decision to actually jump into trading full time, especially at a point where you're not profitable, I think. So I mean Prop Stewart's obviously worked out well. Rydyn ni'n ymwneudol, ond rydyn ni'n ymwneudol, ond rydyn ni'n ymwneudol, ond rydyn ni'n ymwneudol, ond rydyn ni'n ymwneudol, ond rydyn ni'n ymwneudol, ond rydyn ni'n ymwneudol, ond rydyn ni'n ymwneudol.

So it that thinking I'm gonna fail or it's gonna turn out it's never been a problem for me because I think that I'm always going to the worst thing someone can tell me is I can't do it. Mm-hmm. And I think You know, often

Often people are kind of scared to take a risk like that. I'm not saying you should just go out there and and quit your job to whoever's listening to this right now. and just jump into trading full time. But often people are actually already living out their worst case scenario. You know, people are always scared about if they take this risk and they jump into something. What if that fails and what if it doesn't work out?

Um and even if it does fail and it doesn't work out, the likely scenario is they're gonna go back to what they're doing right now. So in most cases, many people are already living out their worst case scenario. But uh, you know, just moving on from this, during that kind of that that that twelve months, eighteen months How did you deal with information overload? Did you feel as though there was an overload of information? And you know, how did you do your best to avoid going down dead ends?

Um to be honest, uh to start with, you uh you have no real way of avoiding the dead ends because Mae'n ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud. And as you go down the dead ends, you realize start to recognise dead ends, so you you s you get the experience not to go down them. So you one of the mantras that and I've got this from FT and a a few others that I just learned to accept

that what I've done in the past or what I've done up to now I can't change. It's what I now do from now onwards because, you know, there's plenty of dead ends in this business. And some you could just kinda avoid. Some you can by focusing on the you know, I call them shortcuts, but focusing on the right areas. So you can evaluate edgies or evaluate the information out there.

But as a retail trader you you need to just focus on one thing at a time because there's so much information and so many areas to do well in that you need to just split them up and take it in small steps. So would you say that there was any kind of definitive turning point in your trading career?

My definitive trading point was because I used to do a lot of racing, I used to do a lot of tracking and performance analysis. So as soon as I started trading, I started tracking my... trades and I wasn't profitable, I was tracking them and then it suddenly occurred to me that and

that if I wasn't consistently following my rules, so you know, my own process or making loads of errors, then actually the trades I was taking were slightly random, or random trades. So all the stats I was doing on my random trade were random stats. So while I was trying to analyze and review them, I was just reviewing a bunch of random stats. So the value from these stats was virtually zero. So I stopped tr um tracking everything and went back to tracking just my consistency and errors.

I went through, when I thought about that and realised, well, if I'm not consistent, then I'm just tracking random. So I went back and looked at the last, I can't remember, it was like 50, 60 trades and 50% of them had errors in it. And then I looking at the mold trades, once I removed all the errors, I went from a losing trader to actually a slightly profitable trader just by removing the errors. And that's not even approaching the con looking at the consistency side.

So what I did was then just start tracking errors and my consistency in following my rules. And by working on that side, that turned me from a unprofitable trader to a break-even trader to a slightly profitable trader. um just by um focusing on their areas that's without trying to optimise my system or work on the system. So that was a clear turning point for me. Right. And what were some of the errors that you noticed you were doing uh most regularly?

I'm not taking trades, they're in my system. taking trades that w wasn't in my system. yn ymwneud â phobl yn ymwneud â phobl yn ymwneud â phobl yn ymwneud â phobl yn ymwneud â phobl yn ymwneud â phobl yn ymwneud â phobl yn ymwneud â phobl Missing the entry and then entering right Um breaking my trade management rules.

putting the wrong targets in, wrong stops, made all these sorts of errors. Some more than others, and the first couple were the majority, so that was really an order of um how often they occurred for me. Okay. I like the point you bring up there about how, you know, you were tracking your trades, you were doing the right thing, but

you know, the trades you were tracking were trades that were outside of your your strategy that you should have been trading. Uh so you were essentially tracking randomness. I think that's uh that's a really interesting point. I'm glad you you brought that up.

Talk to us about how you're trading these days. Give us a rundown on your approach to markets now. I mean, uh is it any different from when you first got started? Um completely different. yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r But what I've done is altered that to s to sort myself by using um volume profile. So I use sort of supply and demand to find areas where I think there's trap traders or traders wanting to get out and in

And then use that to take my trades off. Okay. And what markets are you trading? Um trading the Bund is my primary market. I was trading Eurostocks, but I've swapped Eurostocks and I'm experimenting with the DAX at the moment as a secondary market. Right, and you're trading intraday? Intraday, yeah. So my big picture's sixty minutes, my medium picture is fifteen minutes, and I trade off the three minute chart.

Okay. And if I understand correctly, I think you mentioned this a little earlier. Uh you started out as more of a a swing trader or maybe a multi-day trader, but you've you know since gone to the intraday timeframe. I mean, what sparked that change?

But sparked that change was the f the fact that it would take me, compounding my account, it would take me over ten years to actually earn the same sort of money that was earning while sh um say So I would have my wife would have to support me support me for ten years and I would then only then through a company because I didn't have loads of um capital and I was very careful with the capital I had.

Um obviously saline is a lot better paid now, so funny enough since I've left. But at the time saline wasn't particularly well paid, so I didn't have loads of um capital. And that was the main reason to change from trading the daily On Ninja Day, I just have more opportunities. That's more opportunities to compound my account.

Okay, okay. Yeah, yeah. I can see how that makes sense. Um and now the the markets you mentioned there that you trade, uh, you know, out of all the markets available to you, why do you trade these select few markets? Is there any reason? yw yw yw yw yw yw yw yw yw yw yw yw yw yw yw yw One of the crew I used to sail with w um worked for uh I can't remember what bank, but she worked for a bank and there was a couple of property traders at this button.

didn't know each other, worked for two different um firms and I can't remember who what firms they were because it was quite a few years ago. I was talking to them about trading and none of them traded for it. And no one in their firm traded Forex. Th they traded the odd currency market on the futures, but they were you know

secondary trades at best. And everyone was trading, you know, either the ES or the Bund or the Eurostocks or the the the Bax and and I thought well all everyone in retail is trading forex and it seems all the pros are trading completely different markets. And then through um Tom Dante, Tom Dante you talked about his experiences at problem.

And it was basically the same thing, that no one was trading Forex as a primary market. And if I think he said one bike person was trading forex as a primary market and they were the least profit profitable person at the firm. And I thought, well, there must be something in that. That retail are trading Forex and the pros are trading different markets. So if I wanted to be a pro, I should be trading the same markets as the pros trade.

Okay, so why do you think that is that less of the quote unquote professionals trade Forex compared to other futures? To be honest, I'm not too sure. I mean, I wasn't having much success on the lower time frames in Forex. I f I'm to be honest, I'm I'm not hundred percent sure why they don't. I mean I'm not sure that the forex on the lower time frames are slightly more random or there's more games played, but I think that

The pros and the pros I've met are using a a lot more volume profile and that's obviously easy ava easier available on the the futures market because there's no real central exchange on the forex.

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So you mentioned a little earlier that you've recently started trading the DAX as well as kind of a secondary market to what you do. What are some of the things you've done to get familiar with this market? Like, you know, as someone who is, you know, a profitable trader now, uh, you've seen some success. When you introduce a new market to what you do, what are some of the first things that you actually do to familiarize yourself with that, in this case being the day?

The first thing I did was I I keep about fifteen to twenty stats on standard stats on the market I trade. So the first thing I did was draw up the same stats. um for the Dex market. And then I had the charts open for maybe two weeks and just watched it, see if it reacted to the and drew my lines and done my process how I analyse each timeframe.

to find a areas of interest or areas where I want to buy and sell. And so I did the same and and then s dropped the same trade plans for if I didn't actually trade it. I just then watched to see if it kind of reacted. the way that um it would to my system. And then I started trading it using one lot. Um just to see, you know, where the buffers need to be, you know, how how much I need to front run levels.

you know, how easy it is to get filled and just really experimenting with how it reacts to my system and what change do I need to make to my system to deal with the Dax market because obviously the DAX is a lot thinner, thinner. than the bin market and the US stock. Okay. Now you've used the term system uh a little bit. Let's just get very clear on this. How much of what you do is discretionary uh versus rules based, just so we understand where you're coming from here.

Well basically I couldn't code my system. But it's very much um rules stroke process based in how I make my decisions. So it's a discretionary system, but there's um it's v it's very rules based in how I make my dis my discretionary decision. So I have um rules for how I analyse the charts, how I find the the areas of entry, what I'm looking for. So I have a checklist and uh cheat sheet for how I analyze, find setups and and depending on the strength of the setup

according to my processes, what sort of targets I'm looking for. So whilst it is discretionary, it's very much rules based in how I make my discretionary decisions. Okay, so what's the what are some of the discretionary aspects of your your strategy or your system? Is it mainly actually deciding which trades you're gonna take and which trades you're gonna let go or is there something more to it?

Yeah, it's b basically if I have an area of interest there's there's basically either there's a trade off it where I'm just gonna put a entry in so when it comes back it feels. or the if the level is area of interest but it's not strong then I'm looking for a trigger. So then I'm looking for a checklist of about four items which I need uh at least two of them to enter that trade or uh it's the area that um I don't take a trade I have to wait to see for new structure to form in there.

Okay. And once you do get into a trade, how do you determine your position sizing? I mean, is it always fixed? Is it the same for each and every trade or does it vary somewhat? It tends to be fixed because my stops tend to be roughly about the same, but If the level's wider than normal for that market, then my position size will decrease so that I'm always risking the same amount of approximately the same amount of um account each time.

Okay. And as you mentioned, stops there, I'm keen to ask, you know, how do you actually identify where you will place your stops for each trade? Rydyn ni'n ymwneud yn ymwneud â llawer o beth sy'n ymwneud â llawer o beth sy'n ymwneud â llawer o beth sy'n ymwneud â llawer. then my stop will go on that two ticks on the other side of that. So on the boon that can vary between five ticks to ten ticks. But it's averagely between six about six ticks.

Okay, so your stop placement is based upon the volume profile and not where the actual not not a price chart, is that correct? Yeah, but the volume profile on the the the price chart, yeah. Okay, so you do factor in the price chart to where your stop will go as well. Yeah. Yeah, well I I look at the price chart because the volume profile could be at the the extremity of a high.

So it will typically go one or two ticks above the high because that'll be the other side of the the H V N I'm looking at or the rot the rotational point. Right, right, okay.

All right, well, Adrian, let's talk stats. I mean I've been really keen to speak with you about this. Um, I'm really interested in this for personal reasons, of course, and I think it's gonna be uh very interesting for many listeners to hear about. how you use stats in your trading as well. So let's just start right there. How do you use stats in your trading?

Rwy'n gweithio 20 ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud But to be honest, th the eighty two percent chance of the gap full by the end of the day, we could go a hundred ticks offside and then come back and fill the gap. So he's trying to work out you know, while it was a good target, we're trying to work out where um you enter to take advantage of that stack.

So I ended up, you know, not really being able to take advantage of the stats. So what I do now is uh once I've worked at a stats and let's say for example it's a gap fill in the bund that I ignore It's got a gap above a certain size. So anything below zero to six I'm not interested in because that affects the stats because uh the original stat I had I think was ninety two percent. But w if you take out the zero to six

ticks gaps, then it comes to so I'm looking at a range of a gap between six and fifteen ticks, it has a eighty two percent chance of filling. So what I then did was look at All the stats that filled that gap, that fell in that range, and then looked how far they went offside. So then using that I you look at the the the curve on that to find out what was the most common how far they went offside, the most common price and the standard deviation, what seventy percent of them did.

So that gives me for a gap up that the most common um offside is eleven ticks and the standard deviation is seventeen ticks. So if I get to gap up between six and fifteen ticks, I am now looking for trades between eleven and seventeen ticks for the gap fill. If it goes above that, then I know that that it's more whilst it still can fill Mae'n rwy'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

Yeah, yeah. No, it does. It does. Um, how do you actually get these stats that you want to know? Like there you mentioned uh some stats on uh gap fills. How do you actually find these? Do you use Excel? Do you have a programmer? I mean, tell us a little bit about how you actually get these numbers. Um I u I used to use Excel and

It takes to be honest, if you've got a fair bunch bunch of stats, it takes forever to do them. Um I use RT Investor, the the platform. And the the beauty of that is that you can And they have a whole homework section on their website, on RT investor website. and you can drop the charts which will actually um give you them stats by putting indicators on there that will give you th those stats by programming in their language.

And I'm not particularly good at programming, but what I did was in their homework section I downloaded some of their charts on stats, looked at how they were done, reverse engineered them until they did what I wanted them to do by trial and error. So then I have a chart which I update my stats every month that I call up for each of my twenty stats and it tells me what the updated statistics are. Then I fill out a cheat sheet. And that's how I do my stats.

And that's how I can do keep up to date with twenty steps. If I did them all by Excel, to do twenty stats would probably take me two to three days and not some tiers. Okay. Yeah. So this is something that the functionality is built into the investor RT platform, is it? Right. And you mentioned that Uh you you get the updated numbers each month. What is the data sample in the stats that you're using? Like how many um

Yeah, how large is the data sample? Like is it a moving window or is it sort of cumulative data? It's a moving window and the size of the moving window is dependent on the the the stack. So the typical moving window for me is fifteen hundred days. Some of my stats which I'm trying to capture the what she's recently doing is the like the size of the the swings. I I d I do on the lower time frames, I run a thirty day volume in day.

Okay. Okay. And do you find that certain stats are less reliable in certain types of market conditions? Yes and no. Because in the day the stats are the stats. Um and you have to take in context um taking context. And that's why I've done the what the maximum adverse excursion on the majority of my stat to find out where's you know, if it's gonna feel how far offside seventy percent of them go. So then it gives me a clue that

you know, if it just punches straight through that, then it's unlikely the stat's gonna be fulfilled. So I'm not particularly interested in in that trade. Because you could you could get situations where the stat's open but the price is straight in one direction away from the the stat to be filled. ac yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n

come comes back towards the st the say for the gap fill and then gives me a set up in that direction. So I use it as a qualifier, you know, if it and it gives you a clear of the strength of the market. Yeah, would you mind explaining maximum adverse excursion? Yeah, uh maximum air first discussion is what I I use is saying that If I have a stat saying that it's going to test the volume point of control.

then I look at all and it th and that stat is sixty five percent. So I look at all the the times that he did test the point of control and look at how far it's gone the maximum that he goes off side, so maximum adverse excursion away from the the open price or whatever point I'm measuring from.

So that will give me out of all the trades that feel, I g it gives me an idea of how far it's gonna go away from you know so if I took the trade as soon as it's start become viable, how far it would go off site. So I don't just take the stat when it comes viable, I just use that to give me a gauge of how far you might go away before filling, and if it goes further than that, then I'm not interested. So that's what I call a maximum adverse excursion before the stat fill.

Does that make sense? Yeah, yeah. And on the other side of that, the maximum favorable excursion, is this something you also look at, maybe in terms of uh profit targets or something like that? Does that come into play in your analysis? it comes into a primary analysis for um My own trades, I track a maximum f favorable excursion and maximum adverse excursion in my trades after I exit to see if I to monitor how well I'm placing my targets.

Okay. And is this something that you can track in uh investor RT as well, or is this something do you have an Excel spreadsheet that you track this in or do you manually do it? Um how do you how do you track this? I track it manually. and I put it in spreadsheet and then I put loads of Excel sliders on it to um so then I can break down the information into long shorts or whatever. Now I I did a um post on my blog uh um

showing you how um the the readers how to set one up. And I think that actually I put the Excel spreadsheet up there as well. So there's a video actually how to make your own MFE, M MAE um tracker. Yeah, yeah. Okay. Um I'll dig up a link to that and I'll make sure to include that in the show notes so uh anyone listening to this can find out more about that. I think uh that's well worth your time. Um we were talking a little bit before we hit the record button and

One of the things you mentioned is that uh s traders sometimes use stats in the wrong way. Uh would you like to share, you know, maybe an example of how traders may use stats in the wrong way? Well, it it really comes back to um What I was saying before about that if you have a stat that's it's gonna do something by the end of the day, it doesn't really so it might give you a context and it might give you a target, but it doesn't give you a um an entry.

So you don't know if there's actual a profitable edge in that stat until you you you do more research. Because it's a stat by itself saying that there's I have a stat that the um initial balance range, one side will be tested ninety eight percent. 每天每一天每一天每一天每一天每一天每一天每一天每一天每一天每一天每一天每一天每一天每一天每一天每一天 It it's not much of an edge because it could be either side.

And you you don't know where your entry is. So you don't know what your risk reward is. So even with a ninety eight percent chance of breaking either side, it whilst it gives you a target, it doesn't really help you um find an entry. So that's why I think that a lot of people focus on the the wrong side of the stats to get the stats, but they don't know really know how to turn that into a a profitable edge.

Okay. So once you have a stat which is seems kinda interesting to you, what's the next step you do with that? Like when do you decide whether that's something you're gonna factor into your decisions or whether it's something that's just uh I I guess essentially noise, like it's there's no edge and and knowing that. What's kind of the next step you do once you discover a stat that you that grabs your attention?

Um what I do is the first thing I do is actually the only interesting stats are really that above 65 to 70%. Because you can have two mini stats and the world onesy stats that are a higher probability. If they're under that, then I'm not that particularly interested. And also that I'm not that particularly interested if it's a stat that's going to, you know, generate only two or three ticks of um yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw

using common sense I can actually use within my shading. Because some stats that you come up with, like the IB high. I I use that stats all the time knowing that one side's going to break, but it's not a major part of my um it's part of my analysis, but it's not I don't take trade saying, Well, it's going to break one side. I would be looking going, Well, I think this is the area where Bayard's gonna step in. Then I'd go, Well, where's my my target's going to be? Well, I'd be high

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And just to clarify for anyone listening, if you don't if you're not familiar with what I B is, it stands for Initial Balance, which is the opening sixty minute range of the uh regular trading hours, uh the regular trading hours session. That's correct, isn't it? Yeah. I use um a two hour on Ubuntu. Okay. Right. Right. But um on all other markets is um one hour. Yeah.

Okay, Adrian. Well I'm really keen to ask you about how you create a trading plan for the day ahead. I know you post this on your Twitter feed, um obviously on on your blog, which you link to on your Twitter feed. Um How do you go about creating a trading plan for each day? What's included in it?

Well, uh I started uh with the weekly and which I do at the at the weekend. Have a look at the weekly charts to see if there's anything obvious. I have a process for every chart. So every chart I will draw in yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw

Rwy'n gwneud hynny'n gwneud hynny'n gwneud hynny'n gwneud hynny'n gwneud hynny'n gwneud hynny'n gwneud hynny'n gwneud hynny'n gwneud hyn. I do the same on the daily, so each day I look at the daily, see if there's any breakout failures of inside days, which may give me advice for the next day. And then my main analysis, I'm done on the 16 and 15 minutes.

So I look at what this sixty minute um bias is trends, whether it's in balance or is you know, in a range or is actually trending, how long how strong the trend is. 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.

No matter whether uh it's not a case of whether I think it's gonna continue. The first thing I do is ask myself if it continues, what should hold and what should break and where should it I think it should test. I do the same on the fifteen minutes and then I from that then I draw up a long scenario, neutral scenario and short scenario. So and that's really how I just worked down. I just worked down from the the sixty to the fifteen minutes, looking at the daily just for uh overall bias.

and analyse them both in the same ways and just work out where what I think should hold based on my, you know, if it's in a trend or if it's in balance. and what should break and where should it should test, which then gives me an idea of where I should be taking trades. and red flag areas. So if I think that it's an uptrend and it should break the high

next day if it doesn't break the high, then that gives me um or is uh struggling to break the high or breakout failures, then that gives me an idea that the trend may not be strong enough. We may have um a change in behaviour in the market. Right. And one thing that often comes up that traders mention that they struggle with is actually

not doing up a plan, but once they do up a plan they actually struggle to stick to it and follow it through. Is that something that you uh were ever challenged with or had that always come fairly natural to you considering your background and and sailing and being very process driven for a good part of your career. Um I've I definitely found it a lot easier to follow my plan when I was trading daily. Um a lot and the way I get round I got round it was to draw up

um what I call mini plans. So I I really um join up four or five times a day. what it's done since the open and where I expected to test. So then I can use that to then look at my um daily trade plan. to see that w you know, saying that if I think the uptrend but it's going down then I uh I draw up my plan and look at the sixty minute and so it's I kind of run a mental model of what's going on at the the time.

So see how it fits into my my major trade plan. So I have these little mini plans So I trade round the mini plan until I get to my major plan and then I trade round my major plan. Mm-hmm. Okay. And I mean I'd suggest if anyone's actually interested in seeing how Adrian uh goes about the creating these plans to definitely check out uh your website. What is your website, Adrian? Um taking one trade at a time dot com.

Taking one trade at a time dot com. Uh I'll link to that in the show notes, of course. Uh you know, at the end of each week I notice that you review uh the week that's just been. How do you go about reviewing your your trading week, what's that process like and how has this been helpful uh for you in your development? Well the c the key thing is to be a very simple thing. yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n.

We used to have review poster when we used to do sailing and the one thing I've noticed with myself and the majority of people that when you're doing proper reviews or performance is that people really don't like being that honest with themselves.

Rydyn ni'n ymwneud â'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn o'r hyn

So the key part of the review process for me is the question why and to keep asking why am I doing that until it makes me uncomfortable because normally once you get to a really uncomfortable place with asking why, you're normally going to get to get to the answers. But the actual physical process is that I the first thing I do is uh I do a a chart review at the end of each day. So I mark up all the areas where Just because I didn't or or interesting things on the chart.

So the first thing I do at the weekend is go through all the them charts at the end of the day um market reviews. Then I go through the the the stats for the week. and see where um if when my results are invariant, how I'm doing against my goals, look at the number of errors, look at the number of mis trades, compare that to the week before to get a idea idea of whether, you know

I've had the increase in errors or mischrades, et cetera, et cetera. So I start taking all them notes down and then I go through my mini plans. because next to my mini plans of writing down what I'm feeling or what I've done wrong and look at and also I make them notes in the market reviews and then get it gives me an idea where I haven't particularly performed well in that that week and well well done good.

And also I grade my I also grade my chance. So I go through the weekly grades and look for areas where my grading wasn't particularly good. I also grade my days, the sessions, I find my focus. So I go through them areas and look for areas where I've described lonely and then go back through my notes and look.

things in common why that was happening by looking at my mini plan. So that gives me two areas. I normally just trying to focus on two areas. One where I did well, so I'm not constantly beating myself up for doing shit. And and one area where I did shitting and then I go, Well Why do I have what what's causing me to do shit? What's causing me to

cut the you know, w try and work down to the original cause. So I just keep asking myself why so I can go down and find that really and normally experience most problems with not following the plan or making You know, and then there's others where you're you you're not focused or tired or you're distracted. But really the m most of the stuff really comes down to the two fears.

Right. So how do you actually grade your trades? Like when reviewing these, how do you determine what's a good trade and what's a bad trade? Um it changes over time.

Rydyn ni'n ei wneud yn 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 Mae'r prif yma'r prif yma'r prif yma'r prif yma'r prif yma'r prif yma'r prif yma'r prif yma'r prif yma'r prif yma'r prif yma'r prif yma

Um and that's th and I have a score between zero either zero, wasn't it my trade plan, or ten, it wasn't my trade plan. Then I s I score it for um was I playing to win? Or playing not to lose. Because I I did have um I do have a tendency to um play not to lose. So take profits quickly rather than let them, you know, as soon as I see a bit of trouble, get out of my trades rather than let them run to target.

Then I scored myself for whether I was emotional in the trade or whether I was patient, so how I was actually feeling. I yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r So I score that. I shouldn't be taking the trade because it was rubbish risk reward or it was at okay risk reward i one point five and above. Or if it's um above two, then it gets high score.

I also track um intuition and that's really to see that whether my gut instinct it's right or wrong so it's it's part of my grading but it's something to track so if i feel that My system says take the trade and my gut says no, then I score that low. If my system says it's okay trade, uh but my gut says yes, then that gets a high score. So that's really our ongoing project to see how well my gut instinct

Um it's working. I then grade it on entry, whether I was entered when I should do, I was a bit late, a bit early. and how I m I manage the entry, then I grade my exits on the winners and I grade my exits on the the losers. And that then I divide that by the total number of points to give me a A, B, or C D. trade. And and we can see all this on your website, right? Yeah, I I've talked about my grading system before and I got that idea how to grade the trades from breaking

Um Out Bad at Breaking Out Bad is a trader on um Twitter and he has a whole screencast on grading days and grading trades. So I saw that and I added that to my assist. Excellent. And how many hours would you say you spend each week reviewing your trades and, you know, doing homework and this type of thing? Uh A few. Twenty. Outside of market hours. Yeah. Okay. Probably. Wow. I probably certainly listen to summer because I go saving on Tuesday and Thursdays, so my evening reviews tend to be

Um evalu IBO don't do the evening review, totally market review. I will do my m market prep, which lasts between half an hour and an hour, depending on what's happening in the market. So the in the summer twice a week I probably do an hour every evening, but during the outside the savings season I'm doing an hour and two hours every night. And then I do eleven o'clock to five o'clock on Saturday and uh and about eleven o'clock to five o'clock on Sunday, most weekends.

Right, okay. That's really impressive. Well. Well my friends say it's sad.

Well, you gotta do what you gotta do. Exactly. Um, let's just do one last question, just for fun. Um, what's one thing you wish someone would have told you before you started trading? The mental side is goes hand in hand with the the trading edge, and more importantly, is that trading and I didn't realise this myself until halfway through my um my career so far if you want to call it a career, is that trading's actually got no similarities with a competitive sport as in like cycling, boxing

you know, individual um credit sport uh as in that what you do outside the session or the event counts as just as much as what you do inside and actually but you still got to perform whilst doing the event. So if you was a boxer, if you didn't do any fitness or any skills practice

No matter how good a boxer you was, you would still do rubbish in when you come to a boxing match. So and trading's the same, but it I didn't realise right at the beginning that how focused and processed you need to be in the prep side and your homework has such a big effect on the um how you do actually in the trading system. I think that's one of the biggest problems with lots of retail traders. I speak to a lot of people.

Rwy'n ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud. majority come and go and that's been and it was a problem with myself to start with. But I see all the time is that the prep is never given. yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n yw'n before you go in there in how you're gonna approach the competitive event, then you're not putting odds on your side no matter how well you trade in the in the competitive event.

And I wish I'd known that in the beginning because I would have definitely put more weight onto how I'm doing it now, the prep and the homework. Right. Yeah, no, I think that's that's really good advice there, Adrian. Where's the best place listeners can go to find out more about you? Um I'm on Twitter at ADF sixty nine and I have my my blog where I post my trade plans.

and my weekly reviews and I try and write articles on my process and basically stuff that interests me on that um taking taking one trade at a time dot com. Okay. And would you mind just spelling out your Twitter handle, please? A D E Y F for Fox Shot sixty nine. Excellent. Well, Adrian, I'll include links to all of these, uh your Twitter handle, your website, as well as um

the maximum favorable excursion and maximal maximum adverse excursion uh lengths uh in the show notes as well. So Adrian, man, I've really enjoyed this. Thank you very much for agreeing to do an interview and I appreciate your time. No problem, it's my pleasure. You've reached the end of this episode of Chat with Traders, but rest assured there are more episodes. if you'd leave a rating. An chat with traйдерs.