As you can imagine, we have yet another prop trader who made it through the prop trader funded evaluation and joined the ranks as a portfolio manager! He used some interesting strategies revolving around price action (which we will explain later on).
What makes our prop trader turned portfolio manager, Sukkim Lama stands out because this is not the first time he tried the evaluation. This is actually his second attempt at the CTI prop trader funded account's evaluation. While many would feel discouraged after their first loss, Sukkim actually felt motivated to try again and he did and succeeded the second time around.
Let’s examine the psychology behind this, the lessons you can learn before we go into the strategy. As we have highlighted in many articles before, psychology and discipline matter more than the actual strategies you use.
As you are going to find out in his interview, Sukkim learnt a lot through trial and error and blew a few accounts through overexposure. This helped him understand the dynamics of the markets during his initial trading years, after which he got a better handle of the markets.
Now, a lot of you may feel embarrassed because you feel you lose out for not reading the rules for our prop trader account properly. You may feel you are the only one who has made this mistake and may be too ashamed to try again because of this.
However, Sukkim has freely admitted during his first attempt he made this mistake hence he did not succeed during his first attempt. Once he learnt from this mistake and was made aware of it, he was able to keep better track of the rules of the prop trader account and evidently did well enough to become a portfolio manager.
The takeaway from our new portfolio manager’s success?
If you blew an account and it was a case where you did not understand the rules properly or how to use the platform properly. It is not a reflection on your skills. You may require extra help. In which case, try again, or simply contact support to get some extra help.
Do not stop your prop trading career and prevent yourself from becoming a portfolio manager over issues which could be solved over technical support.
Prop Trader Strategy
As promised, we will go into the strategy. A lot of the strategies touch on price action. I understand your frustration readers, every prop trader and portfolio manager will talk about price action. Yet when you search for price action, it is basically the trading equivalent of a philosophical concept.
In the most simple and actionable explanation is, price movement using candlestick patterns.
Anything else is no better than voodoo science, I have been told some wacky explanations by people literally winging it such as “just observe naked charts to get it” and people trying to cite candlestick patterns without trying to state they are citing candlestick patterns. Effectively its just reading candlestick patterns.
Everything else builds on this. That is where technical analysis and fundamental analysis comes into this. However, in this article, we will be focusing on what our prop trader/portfolio manager did, as used a technical approach, I’ll explore those in detail. You can visit our other articles to look at fundamentals.
Commonly used technical analysis tools would be moving averages. Usually a shorter term, middle term, and longer-term moving average. Keep an eye out, there may potentially be a moving average article, depending on demand explaining their use and pitfalls. Effectively their use is to effectively tell you when the market is trending, how strong the trend is and when the trend is ending.
Volume profile is commonly used to find areas where price spends the most times. It is used to find hidden support and resistance, akin to Fibonacci. It is also similar to supply and demand which operates like support and resistance, but this is more valuable in terms of finding turning points.
Elliot wave cycles are commonly used to find trends, while market session cycle are used to notify traders of active market sessions; some currencies; securities are more active during particular sessions than others.
The main thing to keep in mind is price represents supply and demand. How much money people are willing to pay for a given security at a certain point in time. With forex, its similar but they are played against each other e.g. EURUSD strength means at that a given point in time people want more Euros and fewer people want Dollars, excluding all fundamental layers.
Without further ado, here is Sukkim’s interview: