Okay Jason, for the first question, can you please tell me what your background is and how you began your career as a trader?

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Osborn Horn
5 years ago
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Jason Fielder is a 10 year trading veteran, and though you ve never seen him on CNBC, he s become a widely followed and respected trading guru because he s helped thousands of traders with the

1 Jason Fielder is a 10 year trading veteran, and though you ve never seen him on CNBC, he s become a widely followed and respected trading guru because he s helped thousands of traders with the systems and tools he s developed and published. Never comfortable in the spotlight, Jason has purposely remained underground for the better part of his trading career, so he doesn t appear on television or accept invitations to speak at conferences. Trading has been Jason s passion for the past 18 years and he s traded actively for the past 10 years. But it wasn t until 2006 that he became a full-time, professional trader to escape his stressful, yet high paid career. On the surface, it seems unheard of to leave the security of a high 6-Figure Salary to reduce stress, but after what appeared to be a heart attack that turned out to be a stress related false alarm, Jason knew it was time to follow his passion and leave corporate America. While most would consider Jason s job to be pretty good because he made very good money and got to travel quite a bit, his life had lost all balance and he was constantly sick from lack of sleep and over-work (and taking a sick day was NOT an option) Worse, he barely saw his family because he was out of the door before they woke up and didn t get home until most of them were in bed. His friends didn t even bother to call any longer because they knew he couldn t ever go out all he did was work! (Maybe you can relate ) So in 2006 Jason became a full time Trader. Keep in mind that at that point Jason had already been trading part-time for over 15 years. He cut his teeth in the stock market, then moved into commodities, futures and later currencies. His years of part time trading and research finally paid off. Jason successfully cracked the code and it turned out he has quite a knack for trading where others see squiggly lines, he sees profit pulling chart patterns. In that time, Jason s found that successful trading boils down to two things: Understanding the personality of the market you re trading, and knowing what makes them move. Today Jason has plenty of time to enjoy his family and spends his work day reviewing forex charts, analyzing data and developing his profitable trading systems.

2 Jason Fielder: Okay Jason, for the first question, can you please tell me what your background is and how you began your career as a trader? When I was probably 9 or 10, and my father worked as a meat cutter for a grocery store chain called Kroger's and it was a pretty low income household. We started tracking his Kroger stock that he got from working there. It wasn't much. But I watched it go from 8 or 8.25 and over the next year and a half as we watched it go up to 19. I remember thinking how amazing that was that you could actually put money somewhere and not really do anything else, and then a year and a half later it more than doubled. Of course, that's a very naïve and simplistic way of looking at investing or the markets. But, it definitely intrigued me. So, late high school or early college, I started looking into stocks. A little bit later in college, I started trading stocks then commodities and options. I went into the Forex and did various trainings and read various books along the way. I was trading actively, at a small amount, all through that time. That's really where my background started. It all started by kind of being intrigued as a very young person and seeing that you could put money somewhere and that it would grow over time with little effort from yourself. So, that's what got me into trading in an investing standpoint. When the Forex opened up in 2000, I started trading it pretty heavy. During that time, I actually went full-time as a trader. I still trade the Forex, but I recently shifted my focus back to stocks more than the Forex. So, I never really left stocks. The majority of my time, now, is spent with stocks. Can you elaborate what you prefer to trade, and can you tell me a little bit about what's unique to each market? Sure. I've developed strategies, and having 8,000 plus stocks, I've developed strategies along the way and really got into system development. I ve spent hours and hours in front of the computer coding and testing. I've done research and learned how to do all of that. I've done it personally. Because I'm not a programmer, I've worked with programmers. I've worked with coders and head coders on staff. I worked full-time with them in system development for years. What I found was that you can develop systems for individual markets. But typically, markets move, for the most part, in similar fashions. So, you could have a strategy that looks for a particular

3 chart pattern. But, if you're trading in the Forex, then you're limited by a number of pairs. Or with the futures market, you're kind of limited too. You're basically waiting for that pattern to trigger. Whereas if you have 8,000 in stocks, then almost every day you're going to have 10 to 20 stocks that s made this formation. It gives you a little bit broader opportunity in the market. I like the Forex because of liquidity. Because of the nonstop nature of it, you don't have as big of issues with gaps, and it's very macro. So the moves from a macro standpoint make a lot of sense. When interest rates go up, you're going to see that currency go up, especially if the pair that the other currency is paired with is holding their rate steady or dropping their rate. So it's very, very macro. There are advantages of having opportunities every day. That s really why I'm focused on stocks at this point. Of course, with that, come options as well. All you have to do is look at your timeframe. Look at it from the day to the month or the week because there are a lot of weekly options at this point that we trade. You can look for those same setups, and at that point, put it up on options trades. They're a little bit further out, time wise, but you can still have really great risk reward by using options. What style of trader do you consider yourself? Great question. I would say a swing trader. I mainly focus on the day, the week and the month. A lot of the strategies I use can be used on the intraday level. I find that when you look at the numbers and your cost, then you should do an intraday trade. I also have friends that trade on tick charts and all that. Your cost is going to be up around 20% of your overall trade. So, you've just stacked the deck against you. By trading those intraday timeframes, your overall profit that you're looking to gain versus your costs of actually putting the trade on, eats into your trade and takes up about 20% of it. While you can do it, you have to be a little more selective and a little more skilled. I find that just trading a little bit further out, where your costs are going to be 0.5% or 1% at tops, gives you a lot more flexibility in the trade and overall. Long term, it gives you a lot more profit. A lot of people say, "Well, you don't have enough action." Well, if you've got 10 to 20 stocks that you're looking at on any one day, on the day timeframe, to do trades, you're going to have plenty of

4 trades and actions to do that with. Plus, if you're trading intraday, which I've done in the stock markets, you're staring at charts probably for eight hours. If you're trading in the Forex, it can be a little bit longer. As for stocks, you ll spend six hours a day staring at charts if you're trading intraday. If you're doing more day trading or swing trading, then you can look at the charts a little bit less and free up some time. I believe that has less risk overall, and you ll still have just as many opportunities. What is distinctive about you trade and what makes you successful at it? I believe that the markets really only move in three different ways, and that's backed up by math, but not my math. Over 100 years ago, there was a mathematician who did his PhD thesis on market movements and he concluded that they move in one of three ways at any one time, and I believe this as well. I look for those opportunities for trends, countertrends, or breakouts. Those are the three ways they move. I look specifically for stocks that are in one of those three modes to trade. Then I use long-term filters to make sure I'm on the right side of the market overall, and then execute the trades. I have a defined setup, defined entry, defined stop-loss and defined exit. That's what s really important. A lot of systems developers or traders don't have a defined setup, entry, stop-loss and aggregate. What happens then is that they get into a trade because they think that the setup's right, but it's not quantifiable. I like it to be more definable, so that I know when it's time to get in and when to get out. Do global events affect your trading and if so, how? Yeah. Global events can affect your trading. Right now, we've seen unrest in the Middle East, which I was expecting really gold and oil to be through the roof and they haven't been. There always seems to be unrest in the Middle East. We're in summer as well, which is more of a seasonal influence on oil. We're just not seeing the spike that we would normally see due to those two reasons. Overall, with the rates where they're at right now and with the outlook for the Fed, I still think we have plenty of room on the upside in the markets. I'm not going to stop being bullish on the markets until rates start to rise, and rates are a very macro, very fundamental thing. But at the end of the day, there's cheap money that's going to kill the economy. I'm mainly looking at long trades at this point.

5 There are some shorts that I look at that, but if you have a market that you know is moving higher and that gives you, on average, about a 53% gain 53% of the time, you're going to be to the upside. So, your probability is 3% higher than to just break even. If you couple that with some very specific entries and reasons why you're going into specific stocks at a specific time, then it gives you a little bit more of an edge than you already have. From a macro standpoint and really defining which way you're going in the markets overall, it can be a very good tool to use to help reduce risk. How do you protect your portfolio? That's a good question. I mean, what we just talked about is one way, you know, making sure you're on the long-term direction of the individual stock, and then preferably, on the market as a whole. When the market rallies, even if it's pulling back within an uptrend, it tends to rally pretty strong. The overall market can pull stocks up that the long-term would otherwise be showing that it's down. It's going with the long-term direction of the market and of the overall stock. Beyond that, you're real risk is all due to your trade size. If you're trading.5% or 1%, then you're going to be able to be in the game long enough to have some losses in there. Over the long haul, you're going to have more winning trades than losing trades. If you follow a good system, then you're going to profit. Overtrading the account is probably what I see the most with traders.it really doesn't matter how long they've been trading, that's one of the biggest things is money management. I know no one wants to hear it, but at the end of the day, you can flip a coin to get into the market. If you have a good exit plan and good money management, then you can make money long-term. It's very, very important to have good money management. If you're ever sweating about how much money you're going to lose on a trade, then you're trading too much at that point. It's real important to not be flippant about how much you're trading on any one trade and just look at the charts. Okay, I've identified a buy at this level. When it reaches that level, and you can pull the trigger with no hesitation, then you're probably trading at the right amount.

6 Let s talk about volatility. Is there anything specific that you like about trading volatility? Volatility typically gives you opportunities. The more volatile the market, the more opportunities there are. From what I've seen, volatility has dropped off in the summer months. It's picked up in the past couple weeks. But overall, volatility has been down in the summer, which is pretty typical. It s the "sell in May and go away" kind of philosophy we're seeing this summer. I know from a macro level, I have some friends that are traders and they track the strain in prices. I've been told recently that some of the extreme prices are off, but they're not off by enough to notice. What I'm talking about is just a couple of cents on the indexes and a couple of pips on the Forex market. When you get to extreme levels, either to the upside or the downside, it just normally would go that extra two to five cents. But it's just not doing it. So, we're seeing reversals sooner than we normally would. From a volatility standpoint, with options it can be really good, especially if you know a stock's going up, or you know it's going in one direction or another. You pick that direction, buy into the option when there's low volatility, and wait for it to spike in your direction. At that point, you can cash out and make some money. Is there anything complicated about volatility, and can you use that to create opportunities to potentially profit? When you get into the options world, you tend to look at volatility more. At that point, it's a variable to look at. For the majority of the trades that we put on, we look at volatility for our stops and our exits. We build it into our actual system. If the market is real volatile, then we don't have to worry about it from a risk standpoint because it's built into our overall strategy. From that aspect, if you're just trading a stock, it's very simple using our systems because it's built-in, you don't have to think about it and you don't have to worry about it. More volatility is going to give us more opportunity. If you have it built-in from a risk standpoint, then you don't have to worry about it that way. You get more opportunities when volatility is straight. Is there anything else you'd like to say about the certain money management techniques that you use? Beyond just using the small amount per trade, the other thing is that I trade all three market movements at any one time. For

7 example, I may have six counter-trades on, six trends, and six breakouts; this is what I consider fully loaded at any one time. By having that, I'm going to have a more consistent equity curve. The equity curve is going to be smoother than someone who just trades trends or just trades breakouts. By trading all three, I'm able to smooth my equity curve out and profit. Because you have a smooth equity curve, your average profit per month is going to be higher. You ll have times where you have trends and trend traders getting into trends. Then the market reverses and moves sideways or reverses completely, and they're out of their trades and will be hit either that day or week or month, depending on their timeframe. That's going to impact their overall equity curve. By trading all three, we actually are able to have more consistency overall. How important, to your training, is psychology? Is there an example where you had a lack of control that it caused you to lose money with a trade? Yeah. Early on, it's overtrading the account. I ve fallen victim to some of the issues that every trader does. I'm not a superhero in the sense that I was born with all those issues fixed. I've moved stocks down to give the market more room thinking, "Oh, it's going to come back," and have it just continue to go against me. I've overtraded the account, dropping 10% to 20% on any one trade, and then run the account up, doubled the account within just a couple of days, and then have it all wiped out and go to zero. I've had those kinds of issues before. That's why it was important for me, to really development when I got into system development. I saw what around me wasn't quantifiable enough, and that pushed me into system development. It really didn't address all the issues that I was seeing from my own trading. That's why system development became such a big part. I wanted to define my risk. I wanted to define my setups and my entries, so that there would be a lot less of the psychology. The mental game of it would be reduced, and I could just fall back on the system. I don't know if any of you have driven overseas, but I've been in Haiti. I didn't drive there, but I was driven there. I've driven in Costa Rica. I've driven in Bangkok. I've driven in different places around the world that have different laws about driving. Some have no laws at all. When you come to the U.S., you can drive down the street and be relatively safe and know that for the

8 majority of the time, people are going to do what the system says. The systems that we have in place are going to keep you safe our stoplights, the way we drive here, and the laws we have the place. When you go overseas, there are very little laws or very little enforcement of those laws. For example, Saudi Arabia has people driving the wrong way down the street at 80 miles an hour; it s dangerous. If you liken that to trading, and if you have a system in place that keeps you safe and you follow it, you're going to make more money. What has been your biggest success trading? I could think of one particular trade, but that's really not the game, right? The game is developing a system that is consistently profitable over years, and we've done that. So that's really the success. Also, being able to help others learn to trade is a reward of the success we've had. I love getting s and people saying, "Hey, I'm up this year. Thank you." Or, "I'm not down this year. Thank you." That's the one that probably the one that gets me the most. That's probably the biggest success, would be to having created a system that is profitable year after year. What's the greatest lesson you've learned as a trader? The market doesn't care about you or your ego. Being a trader for so long kind of changes your perspective on risk as a whole. I tend to look at everything through a risk filter now, which is kind of a weird thing, a risk-reward type filter. What do you think the number one reason is that traders fail? Mainly, a lack of knowledge and a lack of a defined system. If their system is an RSI, and it drops below 30, then at that point you're going to buy, so Do you buy when it crosses the line? Or the first day it closes after crossing the line? Do you wait until it turns up? Or do you wait until you get a below 30? When do you enter? So, you can look at a system that may seem like it has a defined entry, but at the end of the day, if you have a question about when you actually pull the trigger, then it's not defined enough. I think that probably lack of knowledge, lack of a system, and the money management aspect of it is huge. Pretty much like any other business out there, I like to look at trading as a business. Because if you're doing it right, then it is. In any other business, you're going to have a mentor or education. It's very rare that someone goes into a business with no knowledge of

9 that particular business. But trading is open for you to do that, you just have to have some cash and you can go and drop money in it and start trading. Because the barrier of entry is just cash, I think it allows for a lot of people to get into a situation where they don't have the knowledge to trade, and they end up losing a lot of money. If you look at pretty much any other business, you're either buying into a franchise that's going to teach you a system, have an apprenticeship that teaches you how to run the business, or you get an education that teaches you. In pretty much any other business, you're going to have that mentoring or that education process. In trading, I don't think enough people educate themselves first and slowly get into the business, and scale from there. What made you decide to become an educator? That's a good question. I've always liked to teach. I've taught different things along the way. I enjoy the process of helping someone else learn how to trade. Once we were able to build a defined system and that kind of thing, I'd run into people, "Hey, you're trading? How are you doing?" And the majority of people that I met weren't having a defined system. I remember meeting a guy, a trainer, and he taught computer, like Microsoft certification type stuff. His system was to buy options on the S&P when it closed up at noon. He had been successful in doing that, partly because the market was, at that time, in an overall up-trend. That was kind of the main thing that he was doing and being successful at it. But long-term, that's not going to be a profitable strategy, just buying. If the market's up, buy it. Running into people that really had no system at all, but were trading, was one reason. Once I started teaching just a little bit, I realized how big of an education gap there really is in the trading world. At that point, it's like once you get to see into that world just a little bit, you realize these people are on their own, sitting in front of their desk and they have no clue what they're doing. Ultimately, they're losing their hard-earned money. So if you can help them become more successful, then everyone wins. What is one piece of advice you would give to a novice trader just starting out?

10 Realize the first account and probably second account that you open, you're not going to make any money on. Once that money's gone, just write it off. The second would be that money management is more important than any indicator or reason for getting into the market, greater than any patterns. Those things are important and you need them, but money management is the first. That's the first chapter in the book, so learn it and learn it well. Then move onto all the rest. What about for a more experienced trader? Is there different advice you'd give them? More experienced traders have probably already lost. In my experience, there's a progression of trading, an educational process. A more experienced trader has probably blown through the first account, most likely the second account, and is on his third account; he s probably is at break-even long-term. So they've gained enough knowledge not to lose money, which is a good place to be. The next step is looking at specifically what you're doing that's gotten you to break even. The market is actually cut up so that you don't make money. If you're actively trading and you're at break even, then it's probably just a little bit of a tweak or a little bit of a change, maybe a change in systems. You have all the fundamentals so that change won't take very long to get you to profitability. So it's a little more individual at that point, as you get more advanced. For my final question for you, Jason, can you please tell the readers what's next on the horizon for you? We've helped thousands of people trade and learn to trade over the years. I'd like to get a group of traders that are actively trading our systems that are basically ing on a monthly basis and reporting their lifestyle maybe even being able to quit their jobs. We've helped thousands of people, but actually having monthly contact with people that are using our systems and reporting on their individual experiences.

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