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Since we recently reported on the Million Dollar Trader Contest being operated by ASIC and FCA regulated retail forex broker AxiTrader and the winning trader Nial Fuller, who achieved a 369% return in 3 short months, we’ve been inundated with questions and comments from readers ranging from no-way-he-did-this, to how-did-he-do-this.
So we thought we’d simply go to the source, and ask Nial how he did it, and what he has to say by way of advice to novice forex and CFD traders.
LR: Hi Nial, and congrats on your victory in the AxiTrader trading competition.
Nial: Thank you, I appreciate the kind words.
LR: What was your winning strategy?
Nial: My strategy is based purely on reading price action, I don’t look at news or fundamental data if I can help it. My proprietary price action strategy incorporates the use of price bar patterns, support and resistance and trend analysis. Most of the trades I took in the competition were in line with the short term market momentum, this is always the path of least resistance. I like to buy rising markets when they experience short term pull backs, and conversely I like to sell falling markets on short term pull backs.
LR: Did you have to take larger risks to get to a 369% return in just a 3 months?
Nial: To win a trading competition like this, you certainly have to take larger calculated risks and I had to tweak my money management accordingly. The large percentage gain is only one aspect of the result though, the actual trades I took are far more important in a real world trading environment. I managed to call some substantial moves in the market, with 4 of the trades I placed making up the bulk of my profits. For example, one of the larger trades I took was equivalent to around a 10% move in the OIL price, when leveraged 100 to 1 in a margin trading account this equals serious percentage returns. I also used some of these larger price swings to my advantage and started adding to winning positions, a process most would refer to as pyramiding or scaling in. I actually didn’t trade for the last month of the competition because I had monitored leader board closely and believed my chances of winning where increased if I didn’t take any further risks, that decision paid off in the end.
LR: Can you let us know a little more about what you do?
Nial: I am an active trader managing my own portfolio, I’m also a trading coach and author. I started my trading career in 2002, a time when professional trading literature was not so easily accessible and the online trading industry was still in it’s infancy. After having success as a private trader, I started mentoring friends and family who expressed a real interest in the market. I really enjoyed mentoring and I eventually founded my site Learn To Trade The Market in 2008, a professional trading education service for aspiring traders. I apply a low frequency end of day trading approach, so I have a great deal of spare time to focus on writing trading literature, commentating on the market and mentoring my students.
LR: What advice do you have for novice and beginner traders?
Nial: You NEED to learn from someone more experienced than yourself, someone that is already an example of what you hope to become; a successful trader. This may seem obvious to most, but it never ceases to amaze me just how many people think they can learn to trade entirely by themselves without reading, without studying, without mastering a trading strategy and without writing a trading plan. I was reading a book every week when I started, I continue to read and study markets to this day.
No matter what you do or what trading method you end up learning, the one undeniable fact of trading is that you will have to learn how to read the price action of the charts if you hope to become a successful trader. Price action is the language of the market and if you can’t read it, interpret it and trade from it, you will find it difficult to make money as a directional trader.
LR: Where do you see the most opportunity for trading profits in the coming months?
Nial: The logical trading opportunities will exist in those markets currently trending, and right now we have several major forex pairs, stock indices and commodities all starting to move nicely. Gold has turned short term bullish and traders continue to buy the dips in this market. The USDJPY, AUDUSD and NZDUSD forex pairs remain in bearish trends and traders continue to sell rallies in these markets. Asian stock markets such as China and Japan continue to sell off on every recent attempt to rally, so traders will remain on the short side there for the moment. Given the resilient and incredibly strong bull market in US markets, short sellers have really been burnt, so traders will likely be looking for opportunities to buy the dips on US stock indices such as S&P 500 and NASDAQ. Of course, things can change according to each markets price action and market sentiment.