Part 1 of 3 - Stuart McPhee's Interview with Ray Barros

Part 1 of Stuart McPhee's (from http://www.trading-plan.com ) interview with one of his mentors, Ray Barros in Hong Kong.

Starting trading back in the 1970s, Ray has tremendous experience and in this interview, he talks about how undisciplined traders can become disciplined, how to develop entry signals and his thoughts on technical indicators, how the financial crisis has affected his trading, why risk management is so important and how his trading differs between his personal account and his funds management.

Finally, he offers the best advice he could give a close friend or family member who wanted to start trading.

Category:

Education

Tags:

• Stuart
• McPhee
• trading
• interview
• Ray
• Barros

[patriotsundergod]

(the following comments are notes taken on this video series)

line 1 in comment below reads

...problem for Ray, but managing risk...

correction

...problem for Ray, but NOT managing risk...

[patriotsundergod]

Recommended reading:

Maximum Adverse Excursion: Analyzing Price Fluctuations for Trading Management, by John Sweeney

This book helps identify how much heat your system ought to be able to take and still turn a profit

"Consentient execution of your risk management is where the profits are"

-Ray Barros

[patriotsundergod]

I've been sitting in the market for over 30 years and have only sold the exact high once, and I dont think I've bought the low.

At some point after entering the market you are going to take some heat (draw down), so you need to know how much heat is normal with your system. This takes the pressure away.

[patriotsundergod]

Following trading system rules was never a problem for Ray, but managing risk (position sizing and losses) is what caused him to lose huge amounts of money in the beginning

Identifying weather the trend is going to continue or change, where you are going to take a trade, and weather that trade is setting up is much more important than focusing on the entry. Determining the entry should really follow those things.