Speculative attacks on markets have been thwarted repeatedly by the various interventions of governm...
Focus on the Process
01/13/2014 6:00 am EST
This is the advice of former Olympic bobsledder and FX trader Chris Lori who explains what he focuses on in his trading.
TIM: My guest today is Chris Lori. We’re talking to him about aspiring traders and what they should be doing in terms of direction and getting started. Chris, you have an interesting background in terms of being a bobsled Olympian, right?
TIM: You’ve applied that to trading. Talk about your experience and getting into trading and how that all came together.
CHRIS: I was always interested in trading. I wanted to be in this financial sector and then I gravitated towards trading while I was in my sport career. Then I didn’t really start to focus on FX until I had retired from sport. What I found that happened to me during the sport that I became very, very process oriented. Also, being in a sport with a lot of danger and required a lot of precision, you tend to understand the process of focusing on the task and that the outcome will take care of itself. I think that when one who aspires to be a trader, I think they need to really fully comprehend all of the elements in play that are required to develop as a trader. We often hear it discussed about you must have a trading plan, but what’s even more important is actually planning your development as a trader. By going in and exploring and then finding that specific space where your psychology profile meets a certain element of the market where you find your space in the market and then really establishing a framework to develop a thorough understanding of the market and your specific space. You have to commit to the process.
TIM: I like the idea about the process. Let me ask you more about that. I think that’s interesting that you say that you kind of let the money take care of itself. The process is really the important part. Talk more about that. What does that mean?
CHRIS: The way I’ve done it is for me my approach is a price-action base approach for the intra-day model. When I go in and I study, if you just focus on the micro elements of the market or price behavior and you grind through it in a structured manner, then the trades that become incorporated in your model start to emerge. It’s a matter of rather than trying to rush through the process, you really have to have a deep understanding of the market or the element or your space in the market place.
TIM: For an aspiring trader who is just getting into this, how should they start with that process? What is the first thing to kind of look at? There is so much especially in the FX markets.
CHRIS: Yeah, yeah. I think it’s natural for every trader to go out and they explore. You look at mathematical models and indicators and maybe price action, maybe fundamentals, maybe when the planets move past the earth and things like that. Virtually, for every trader, there’s a different way of trading. Find the area that blends in your psychological profile and from there you start to really grind away at getting a deeper understanding and finding consistent patterns of behavior be it whatever model it is you choose or whatever as to the market you choose and just grind away at it. Then start to assess probabilities to certain market behaviors. In my case in price action, we just look for repeated behaviors. We’re talking really micro behaviors, higher standard price patterns, really time related and price related.
TIM: When you say micro behaviors, what do you mean by that?
CHRIS: For example, when we look at the and we’re going to talk about this on the MoneyShow, is the function of price as it, where we see liquidity get pumped through the inter-bank system and the basic electronic mechanism we see consistent behaviors in terms of how the liquidity, how the orders get filled, how the counter party is found and how it affects volatility. We see these behaviors reflected at certain times of day also related to data events; so we see these patterns repeated literally multiple times throughout the day. Literally 10 to 15 times in a day we see very, very grossly similar patterns on all time scales. We look at the behaviors, we study them very, very deeply and we effectively build a model around them, a risk model, and ultimately make our trades around that framework.
TIM: We obviously just barely scratched the surface here. Where can they find out more about you? Do you have a website and learn more about this.
CHRIS: Yes, there are a lot of free educational videos on chrislori.com so they can go and have a look. It gives them a different perspective on how to look at the market.
TIM: Chris, thanks for your time.
CHRIS: Thanks a lot, Tim.
TIM: You’re watching the MoneyShow.com video network.