I’ll tell you about the successful trader Peter Brandt, whom Schwager writes about in the very first chapter of his interviews, “The Mysterious Wizards of the Market.”
Trade Secrets of Peter Brand
👉 Makes decisions haphazardly, but within the existing rules
👉Does analysis on the weekend, and all week makes transactions on the assets selected at the weekend
👉Does not trade intraday
👉 Risk per trade 0.5%
👉 Profit per trade 2%.
👉Closes 1/2 of the trade when the price reaches half of the profit, so he has Risk/Reward = 1/3.
👉When approaching the take profit by 70%, moves the stop loss higher
👉Three-Day Rule: closes the position if after the first up day on day 2 and 3 the market reverses with a new low.
👉Never uses trailing stop
👉The position is never increased for profit, it always enters with the maximum volume, and then only reduces the position
👉Favorite pattern – breakout of the consolidation zone
👉Ice Line – a slab that is difficult to pass through, but when passed, it begins to support the price
👉 “Weekend rule” – if the market closes at a new high on Friday, it is likely that the growth will be even higher on Monday and Tuesday.
👉If the chart pattern does not work, it is a more reliable signal than the pattern itself
👉Do not re-enter the trade on the same day after the stop: “I don’t want to lose 30 cents in the 10 cent range”
👉HFTs create volatility near breakout points, so the efficiency of breakout trading has decreased
👉If I made my biggest bets on the trades where I felt the best (comfortable), then this would significantly worsen my results
👉Does not look at profit on open transactions, considers profit only after they are closed
👉 I lost the most money when I carried losing trades over the weekend
👉Charts do not give predictions, charts are suitable for finding entry points with asymmetric Risk/Reward odds
👉The main feature is in risk management
👉Benefits: discipline, patience, order execution
👉If you want to learn how to trade, spend 3 years to get an idea of the market and 5 years to reach the level of competence
👉 Less than 1% chance of making a living trading
👉Losing traders risk too much, do not have a methodology, and live in fear of missing out on that very trade.
The story of Peter Brandt
👉His twitter: https://twitter.com/PeterLBrandt
👉27 years on the exchange, average annual return of 58%
👉Started trading in 1976
👉Drained 3-4 accounts in the next 3 years
👉Started making money when I started using stops and trading with the trend
👉From 1979 to 1988 earned every year
👉In 1987 I earned +600%, so next year I relaxed and lost 5%
👉I quit trading in 1995
👉In 2006 he returned to trading
👉The next years were profitable except for 2013, in which it lost 13%.
🔥I liked the interview very much, if only because I recognized myself a little in this trader. Peter Brandt in an interview said almost everything that I myself could say about the market and about trading.
Brandt trades with the trend (as I have in the past) – in some places it’s amazing how similar his experience is to my own!
For example, like me, he started trading when he started using stops and trading with the trend.
What surprised me the most was that Brandt had a losing year in 2013, when I also lost money for the first time since 2008.
The reason was obvious that market volatility was weak that year after several explosive years.
Moreover, the joke is that Brandt, like me, began to try to trade the countertrend in 2013, and it didn’t end with anything good.
And another coincidence is that in 2013 Brandt took clients into trust and leaked money to them. The same thing happened to me. True, before that I had several successful years, but in the 13th year I took on two more clients and the amount of money in management became maximum, and it ended badly.