Trader Profile - Nial Fuller
How did you get into trading?
When I was 16, I developed an intense interest in trading the markets after entering the ASX School Share Market competition in high School.
Like most new entrants to the market, I started studying the local stock market and quickly began building a library of magazines and books on the topic of share trading and investing.
I then had a friend introduce me to the options market and other derivates and was soon fascinated with these leveraged products – believing the offered high returns and a low capital outlay.
I became obsessed with the idea of leveraged trading products and the potential returns they could offer. I was young and very naïve at the time, and had no idea of the dangers and risks.
I had been working at a newsagent and had saved up several thousand dollars, so my plan was to trade this and hopefully make a lot of money from my small starting float. I was consumed by the idea that I could turn my small trading account into hundreds of thousands of dollars very quickly. I put aside my school work, skipping classes in my final year of school to spend more time reading books on trading. I was watching the markets during the day from the school computer rooms. I was hooked.
After 18 months of intense study, I finally placed my first ‘live trade’ the day I turned 18. I can remember it as if it was yesterday. I bought Telstra options and tripled my investment over the next three weeks. As you can imagine, I got confident way too fast and lost all my capital over the next four trades. It’s a lesson most traders could probably relate to.
Several years later, I was introduced to futures trading by a well-respected local trader. From then on, I had several mentors and friends provide real insight into the real world of trading.
I honestly would have been exposed to more than 20 different trading strategies and methods in that time, my mind was buzzing. It was a genuinely steep learning curve and it was difficult to know what to believe and who to trust. This is often the hardest part of learning to trade, there are just too many opinions and too many strategies, so new traders get lost in the minefield. Fortunately I was lucky and had the right mentor, I popped out the other side with an arsenal of strategies and knowledge, and the rest is history.
What do you trade, and why?
I trade forex, index and commodity futures and occasionally shares. My main focus is definitely forex due to its extreme liquidity and its constant volatility and trends.
The forex market is extremely predictable if you have been watching it for many years. I follow a basket of currency pairs, and have developed a very close relationship with these markets, studying the different trends and price action signals. I feel that forex is most effective because the price action tends to be repetitive and the trading setups that form tend to have a good pay-off rate over other markets.
What were some of the mistakes you made when you started out?
There are several core mistakes I made in the early part of my career, which stand out because I still battle with the problem today.
I tend to take big swings when I believe there is a good setup. Kind of like a poker player going all in, when I started out I tended to have too much confidence during a winning streak, and I would literally trade in such a manner that I put my entire account on the line, and risked being wiped out. This came down to greed and my non-existent patience. I was extremely impatient and wanted all the glory right there and then.
The other major mistake I made was over-trading, and I mean serious over-trading. I would have classed myself as a market junkie in my early 20s.
What are some of your golden rules?
The first is trade with the primary and obvious trend.
The second is to trade from key support and resistance levels that have proven to be points of reference on the charts in the recent past
Always use price action confirmation signals to make entry decisions.
Wait for perfect trade setups, trade like a sniper, don’t over trade.
Don’t take a trade unless the potential reward is at least two times the risk
And last, don’t give back profits. If you’re up a decent profit, protect it. Don’t live in hope.
How did you become an educator?
I never planned on being a trading coach, actually. In 2008 I started a simple website with a small trading forum hoping to attract other traders and talk about trading. I wanted to be around other traders and continue my learning journey.
After some request from other traders in the forum, I started posting videos and articles on my trading ideas and strategies and the site soon became popular through word of mouth.
What started as a small side hobby, soon became a full time activity answering emails, running the forum and making trading lessons. As the site grew, I had no choice but to start charging a very small fee for premium content and services to compensate me for the time and costs associated in running the trading community.
Do you think the everyday person on the street has a chance?
I have been told I am different to most people in the education trading education industry because sometimes I can be too honest or upfront with people. Sometimes I may even offend people when I tell them not to take up trading or to quit trading altogether.
The reality is, some people are just not born to be traders, and most are gamblers at heart and extremely emotional and greedy.
Many of the emails I receive are from people wanting to become a full-time trader starting with $1000 to $5000. I frankly tell them that they should not aim to be full-time traders, they should aim to be part-time traders.
The reality is trading can be taught, and most are intelligent enough to learn basic trading strategies. The problem is all the other variables, like the mind, the emotions and discipline. We then have to consider the capital they are trading, because if it’s too small, they will likely over-trade and trade too large in an attempt to make money quickly. All those factors kill a trader’s success.
When you are learning how to trade, you must understand your mentors can pass on to you genuine trading concepts and strategies that are powerful and are tried and tested, but you as a person are the variable that the mentor can’t control. It’s almost certain your emotions will control you and your greed will consume you, which will lead to failure early in your career. It’s the ones that can master these problems that prevail as pro traders.
So yes, the everyday person can be a trader, but only a handful will make it out of every 100 that attempt it because most people are impulsive and greedy, they have no trading plan and are very undercapitalised. Put simply, they are emotional roller-coasters and the market will spit them out if they are not emotionally prepared and lack a decent trading education.
What’s the number one thing traders can do to improve their performance?
I think it comes back to how many different trading strategies and ideas floating around that a trader will be exposed to in their career.
There are so many different kinds, but how do we know which one to follow and which one is the right one? Picking your trading strategy amongst the plethora of ideas and concepts being taught out there is no easy task.
I think the number one thing is simplicity. It’s my core message in all of my trading lessons and courses: if what you are doing is not simple and logical, then you have no chance.
A good trading strategy should be based on price action, and when I say price action, I mean ‘plain vanilla’ charts with no mess or pretty indicators or lines. If a trader can develop an understanding of this raw market data or the ‘price action’ on the chart, then they are deriving their ideas from first hand data.
Those traders that fall into the ‘indicator trap’ – as I often call it – are doomed to fail because they are using secondary data to make a decision, which is often a later entry signal. Indicators also add complexity and require more interpretation.
The newer trader should avoid haphazard trading ideas and simply learn to read a chart using price action trading analysis. I was addicted to learning trading strategies when I was a novice, I basically kept searching and searching and believed eventually I would find the ‘holy grail’. In hindsight, it was a bad period, because I just went from strategy to strategy and it destroyed me and my trading capital in the process.
But it eventually all fell into place when I started looking at the raw price action and nothing else. I found it extremely beneficial to my trading when I just let go of my desire to know everything and to keep trying to find this perfect system or strategy which just didn’t exist.
For almost five years now I have been teaching and trading with price action strategies, and I can say first hand, I am a much calmer person and a much better trader because of it.
Nial Fuller, educator and owner of Learntotradethemarket.com. covers price action concepts, including videos, trading articles and a daily market commentary.
