5 Questions with a Funded Trader: Risk and Reward

Fernando V. in New Jersey has been trading for five years, but things have just recently clicked. After our interview, one thing struck us: he is simultaneously very comfortable with high degrees of risk – trading around events that move futures – and also paranoid about losses – placing stops at consistent levels. It seems that the second aspect may be why he’s been doing well in his Funded Account®. In fact, in November and December, he was able to make $7,500 in withdrawals.

We recently caught up with Fernando to talk about how his trading is going and advice that he would have for others in the Topstep program.

Topstep: Hi, Fernando. Thank you for taking time to speak to me today. You’ve performed well lately. Can you talk a little about your strategy?

Fernando: I am trading well now, but it was not always so. I’ve lost more than $1,000 in one day before. But part of my strategy is to control the loss on a single contract, so I put a loss limit 10 ticks away from my entry. Now I’m protected if things don’t go my way.

Another part of my strategy is to take advantage of market volatility by paying close attention to the news, especially for the Australian Dollar ($6A), Canadian Dollar ($6C), Japanese Yen ($6J), Gold ($GC), U.S. Treasury Bonds ($ZB), and Euro ($6E). These all rise or fall quickly at the time of important news. I place two orders, one up and one down, minutes before. But it is not so easy because you can lose a lot with the fast movement of the market. You have to practice a lot for several months to know when to take a position.

Topstep: Are there clues or signals you look for before you make your trades?

Fernando: Yes, but every news item is different. Practicing with the simulated account makes you realize how much a single event can make the market go up or down.

Topstep: Even with practice, it must be tricky to know when to jump in. What tips can you give someone looking to follow a similar strategy?

Fernando: My advice is to be passive and consistent. Continue to do things the right way and you’ll find success. If you give up, you’re bound to fail.

Topstep: That takes a lot of backbone. How do you manage to trade well despite uncertainty?

Fernando: You need to have confidence in yourself and your strategy, whatever it is. I studied plenty of research and graphs when was I designing my trading plan, and it gives me the confidence that what I am doing is 80% or 95% good.

Investing without fear means controlling your emotions. You will lose a lot of money if you don’t leave your emotions out of the game.

Topstep: Can you briefly go over your strategy (times you trade, length of trades, where you place your stop orders, etc.)?

Fernando: I’m very interested in learning about automatic systems and swing trading strategies.

Topstep: Thanks for the time Fernando. Best of luck for continued success.