FX TRADING

OPTIONS PERFORMANCE

content * content * content

“Winning traders treat “My personal belief is that
their trading like a trading is 99% emotional and
business” 1% technical”

E XC LUS I V E I N T E RV I EW J A S O N S TA P L E T O N A N S W E R S T O F X T R A D E R M A G A Z I N E

Jason Stapleton
CEO and head trading coach at
4xTradersLive

Jason recently turned $250.000

into $940.000 in 90 days during the
Varengold Trading Challenge

Jason Stapleton explains FX Trader Magazine
the reasons why he decided to participate to a
trading challenge: to provide evidence, as CEO
and head trading coach at 4xTradersLive, of
what he and the trading style he teaches can
produce.
To become a successful trader, he says, you
should follow the advice of a successful trader
and treat your trading as a business.
His number one advice as a coach is to stay
away from chat rooms, web forums and social
networks, to make sure his traders focus on a
new way of thinking, of looking at the market
and at themselves.
Jason explains why, once you have a system that
has a positive expectancy, 100% of your success
falls on your ability to trade it day in and day
out, which is why he focuses a lot on psychology.
Although he has a passion for economics and
politics, he has developed a purely technical
approach to trading and explains why there
is no possible way for a private trader who
hasn’t got a team of people to make educated
decisions based on fundamentals.

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FXTM: Can you tell us about your I wasn’t focusing on what the real started to work really heavily on my
story? How did you get interested in issue was, which is: psychology. One psychology, being disciplined and
trading? How long have you been has to get hold of the psychology of fixing in a set of rules. Following
trading for? What is your experience the market and their own personal all those rules, I began to grow and
in trading? psychology in order to be effective. now instead of constantly loosing,
JS: I started out managing my It doesn’t really matter whether the I’m consistently winning, which is
own investments. I started to put systems are profitable or not, if you the ultimate goal for anybody who’s
some money away, I was beginning don’t have the discipline to trade day trading.
to build up a nest
egg and I wanted to FXTM: You recently
manage that myself. finished 4th at the
I had the belief that Varengold Trading
nobody cared more Challenge. First, why did
about my money than you decide to participate?
me and I did not want A lot of trainers preach
to give it to somebody but they don’t “walk the
to put it into mutual walk”...
funds. I wanted to JS: Because of my
be able to do the business, I get hit with a lot
research myself. That of people who are asking
quickly turned out me for things like: “Show
to “Hey, I could use me your performance
some of this money records” so, for a long
to trade with!”. And time, I used to say “here is
I started out trading what our trading systems
some options. I ended are producing, here is
up loosing quite a what we are doing in the
lot of money trading live room” and what was
options. But I had coming back was: “How
the belief that I could -DVRQ¿QLVKHGWKDWWKH9DUHQJROG7UDGLQJ&KDOOHQJHJHQHUDWLQJ can I make sure your
figure out how to do VKRUWRIUHWXUQLQPRQWKV numbers are truthful?”, or
it. So I continued to “Let me see your personal
study, buying all the books, going in and day out, under a set of rules statements”. But I’m not giving my
to seminars, then I thought “let’s and conditions that you’ve layed out, personal trading records, those are
go ahead and trade stocks”. But the you’re not going to be successful. very private. And if I provide the
market was running on the short side, And the more I studied and the records, they say: “How can I validate
so I decided to have a look at futures. more I read and the more I talked to that they are actually true?” or “you’re
So I rolled from options, to stocks, successful traders, that’s what they hiding your losses, there is no way
to futures and had very little success. are saying. Richard Dennis said it the you can be achieving such results.”
Over the course of many years of best, he said: “Anybody can create a So, when the challenge came out I
practice, trial and errors, I came to trading system that 80% is good and thought “this is my chance to provide
the conclusion that what I’m really is the best one ever written. The evidence of what me personally
doing is bouncing from system to question is whether or not they’ll and the trading style that I teach
system, from market to market and have the discipline to follow it.” I can produce.” It’s over a set period

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of time. It’s third party regulated. and trading style? Is it only a matter try to eliminate as much subjectivity
They track the results. So I stepped of experience? out of our trading as possible. And
in and I traded for 3 months. I used JS: What I did is I went to find that’s what I tried to do when I was
a longer term swing trading system, somebody who was successful and learning to be successful. I didn’t
that I developed. And this is what who had an outline of “This is how want emotion to play any kind of
I do now. I get role in my decision
about 10 to 15 making. Once I
trades a month. got on the path, it
The system took some time, it
itself, with took months and
the position- months of trial and
sizing model error, continuing
that I used in to trade and
the trading continuing to loose
challenge, money, before I
generated just finally got things
short of 300% thought out. I
return over the would love to tell
course of these you that I’m 100%
3 months. The cured of emotional
high water mark response on the
at that traders market now, but
challenge what I’m not. Nobody
about 309% ever is. But I do
in 3 months, know how to
so a little over trade now. And
100% a month. Winning traders treat their it came through
Should that
be expected by
trad ing l ike a business a long process
of self reflection
traders who and study, along
are coming with the help of
in? Absolutely not. I was trading it should be done. This is how you someone that I knew was successful.
aggressively. I’ve been doing this become a professional trader”. And I
a very long time. And we want to listened to every single thing that he FXTM: In your opinion, what is
shoot for consistent profitability. told me to do. He said “ This is how the difference between a winning
That’s my ultimate goal for people you write out a trading plan”, and trader and a loosing trader?
that I taught to or work with. this is how a wrote out my trading JS: Winning traders treat their
plan. He said “This is how you test trading like a business. In the forex
FXTM: You said you started with you system, this is how you strategize markets, brokers are making it easier
options then stocks and futures, and on a development process”. I use an and easier to open these 500$ or
that after many trials and errors, you “If-Then” syntax for all the strategies 1.000$ accounts. Those are price
finally found the right discipline and development that I do. And it’s very points that people used to go gamble
psychology. How did you reach that simple, for example, IF the market with, on a week-end or when taking
step? How did you find your niche does this, THEN we do this. And we a trip to Vegas. So trading for a lot
32 FX TRADER MAGAZINE April - June 2010

of people is nothing more than
gambling. They come in, they don’t
have a plan, they don’t know what
they are doing and they’re taking
signals without knowing why they are
taking them, and all of that adds up.
Winning traders have a plan. They
treat their trading like a business
and they are extremely disciplined
in what they do. They have taken the
time and the effort to develop a plan
that they know is effective and every
single day they focus on nothing
more than trading that plan. They
don’t deviate from
it. It is not a game.
They’re very serious My goal is to take traders from
about it. Those are
the kind of traders conscious incompetence to a
that I like to see
coming to me, or
place of conscious competence
people who say
“look I’m not successful, I’m loosing
money, I know I’m doing something
wrong but I’m committed to figure
this out and I want to do whatever is
necessary to be successful.”
FXTM: You mentioned that,
when you started, even though
you were not successful, somehow
you had the belief that you could
become a successful trader. How do
you explain that conviction? Is this
typical of successful traders?
JS: I don’t know. I thought: “I’m an
intelligent person. So this is not an
issue of me not being smart enough
to understand what I need to do, this
is me not understanding what I need
to do and not understanding how I
need to go about doing that.” So I
sought out someone to help me to
figure that out. And I found out that
it had nothing to do with the systems
that I was using or the trading plans
TRADING PERFORMANCE
that I had already written out.
Ultimately I could have had a million
dollar strategy put together and I
would have blown that strategy up!
Because I wouldn’t have followed it,
I didn’t have any discipline. I hadn’t
spent any time working on the real
issues that were causing me to loose
money, which were emotional. But I
knew that I loved trading. I absolutely
love it! I can spend all day every day
watching the market, teaching about
what I’ve learned and studied. I have
a real passion for it. And I had a core
belief that, if I had such a passion for
it, there had to be a way for me to be
successful at it. So I made a decision
to be successful. I don’t take what it
takes. I don’t care what is costs me.
I’m going to figure this out and I’m
going to be successful. What you see
in the Varengold Trader Challenge
and in what I do now, in the trading
and teaching, is a reflection of the
years of hard work that it took me
to get from point to point. And
my goal now of course is just to cut
down on the amount of time that it
takes for traders to get from point A
to point B. For those who want to
be successful, I want to make that
transition as quickly as possible.
FXTM: You’re CEO of
www.4xtraderslive.com training
comapny. Did you create the
company? Can you tell us about this
FX
project and your role in it?
JS: I was trading full time from
home and I was getting lonely. I
thaught, “why don’t I start offering
some training and open a live trading
room for people to come in, see what
I do and may be trade along with me”.
So I put together a little and cheap
website - I think we spent 2.000
dollars to put the website together -
and I opened up a virtual room using
a software system where I can show
my computer screen to people. I just
said “it’s free for a week, come on in
and see what we do”
and I started getting
people to say “would
you work with me?”, so
I started building up a
core network of traders
that I mentored. And
that has grown and
developed into the business that you
now see.
I think people see in our company
something different from what they
see in other places and especially
in the Foreign Exchange world.
Because forex is so unregulated.
There are a lot of swindlers out
there that are looking to take your
money and nothing more. But I
have a vested interest in seeing my
clients be successful. I don’t take just
anybody. People have to fit a profile,
they have to build a place where they
are financially solvent, they have to
be ready to do what’s necessary to
make the change. The course is very
expensive compared to what else is
out there on the market. So in return
I have to give a lot of information, a
lot of counseling and a lot of work.
FXTM: What about results?
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 FX TRADING PERFORMANCE
JS: My goal is to take traders from
conscious incompetence to a place
of conscious competence, where
they say “I understand now what I
need to do to be successful and I’m
working everyday with the support
of you and your training program
in order to become consistently
profitable.” And many of them are
now. I worked with a wide variety
of traders, so the course in itself has
been widely successful, just in the
amount of people and the response
we are getting from the program.
All charts are the same, no matter
which instrument or time frame you’re
looking at, pattern formations work
34 FX TRADER MAGAZINE April - June 2010
FXTM: How much time do you
think a trader should spend on
training everyday? And does training
really make a difference in terms of
trading performance?
JS: We know scientifically that in
order to break habits and reinstall
new habits, it is a 60 to 90 day
process. If for years you believed that
the markets are crooked and that
the game is squewed in the favor
of large banks and institutions, it’s
going to take some time to realize
that all charts are the same, no
matter which instrument or time
frame you’re looking at, pattern
formations work. And we focus
100% on technical analysis. Being
part of the live trading room and of
the private client group that I have
is extremely beneficient to them
because it helps reinforce what
I teach in the program. We have
to continue reinforce these core
beliefs so that we can change our
perception of the markets and our
perception of what success is.
FXTM: What do you think
comes first: to have the right
trading system or to have the right
psycholog y?
JS: You have to have a system that
has a positive expectancy and that’s
maths terminolog y that says that “if
you follow this system, over time it’s
going to produce more money than
it looses.” If you don’t have that,
I don’t care how disciplined you
are, you’re going to be disciplined
to trade a loosing system. And
that’s not going to be effective.
But once you have a system that
has a positive expectancy, 100%
of your success falls on your
ability to trade it day in and day
out. And that falls completely on
psychology. My personal belief is
that trading is 99% emotional and
1% technical. Once you learn the
skills, once you understand how
to write your trading plan, how to
trade your trading system, then all
you have to do is focus on trading
the system. I understand that there
is a lot of debate on that. Some
people will say “it has all to do with
 TRADING PERFORMANCE FX

the system that you have”, and I

disagree because if simply having a
good trading system was adequate
for producing successful traders -
there are great free trading systems
out there, you could trade Richard
Dennis’s Turtle system right now -
a 21 day breaokut system - MACD
Crossover produces really great
results too. If it was just about the
system why don’t we have 90%
success rate instead of 90% failure
rate? It’s because it has nothing to
do with your system. It has to do
with your psychology, your ability
to be disciplined in the market.
FXTM: As a trainer, what is
the most important advice or the My personal belief is that trading
one you give more often to your
students? is 99% emotional and 1% technical
JS: First thing I tell them is to
stay away from the chat rooms and
the web forums. That’s an absolute corrupting the minds of traders who you think a trader is ready for this
disaster. They started springing have a genuine interest in learning important step?
up as a way for traders to come what they need to be doing. So that’s JS: It has to do ultimately with
together and learn from each other the first thing I tell them: “You are money. Let’s say you open a 25.000
and now you see social networking no longer allowed to spend anytime dollar account and you are doing
groups for currency traders, and I there”. The information that you very well generating 10% a month.
get emails everyday from people get will come from me, from our Now you have to look at the kind of
inviting me to join their social program, or from other legitimate job you’re doing and the salary you’re
networking group or find a way to sources. And I provide them with getting. Are you a doctor making
collaborate so that I can share my these legitimate sources. And that’s 300.000 dollars a year? The amount
knowledge and experience with a condition before they sign up for of capital you’re going to need to go
other traders. I think it is a terrible my course, that for the next 3 to 4 full time with your trading is very
place for new traders and those who months they are going to do nothing different from someone who’s a
want to learn to be successful to be. but what I tell them to do. Because plumber and makes 50.000 dollars
You don’t see these social networks I want them focused on a new way a year. So that’s a very individual
and chat forums full of highly of thinking, a new way of looking at decision and it has to do ultimately
successful traders who are sharing the market and at themselves. with the size of your account
years of knowledge and wisdom. balance.
It’s a bunch of other traders who are FXTM: Many traders dream to
loosing money, who are unsuccessful become professional traders in a FXTM. What kind of system do
and complainers, users and takers, short period of time. When do you teach in your course?

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JS. I have several systems to cater Foreign Exchange, because not only FXTM: But do you use your
to individual traders. We have a do I get to study the politics that we fondamental knowledge and
day trading system that’s called are doing in the US but also what information in your trading or do you
“Trend Trader”, the “T Squared” is the European Central Bank and have a purely technical approach?
system, which gets traded basically the Bank of Japan doing. How their JS: No, I don’t use any of it in
Tuesday through Thursday. Then economies are going to be affecting my trading. That’s what’s funny
we have a swing trading system currency prices. is that I read all this economic
that I call a “CTS system”, which is Some of the benefits of trading information all the time. But when
a countertrend divergence model foreign exchange is that it is an I sit down at my computer, I’m
system. Then we have a longer term, unregulated market. It’s a spot 100% a technical trader. I don’t care
like day trader positions system, for market. You can trade micro lots and whether everybody else in the world
those people who work full time jobs, mini lots, which means that if you says that the European Central Bank
and of course I have the system which only have 5.000 or 10.000 dollars is going to raise interest rates. If my
I used in the Varengold Challenge you can start trading whereas in the charts are telling me that I need to be
that I show traders and that I offer futures market you need 30.000 to long or short, that’s what I’m going
them as a course of study. But it 50.000 dollars of starting capital, to do. I know several fundamental
requires a very high level of technical just because of the cost of buying analysis traders, I’m not suggesting
analysis and knowledge as it uses a the contract. So in the forex market, by any means that you can’t be
lot of Fibonacci and ratio patterns more people can participate. successul as a fundamental trader,
in order to determine price action.
And because it is hard to learn, I
created a private client group, where Stay away from chat rooms,
I take them every day through the
trade setups, I show them how I’m web forums and social networks
drawing in the Fibonacci patterns,
I show them what we would expect
to see, I offer them trading calls
and really give them a blueprint for
success. And my goal is that, one day,
they’ll be successful enough so that
they won’t feel the need to use the
services anymore.
FXTM: Why do you trade Forex
and what can you tell us about this
market? What are the advantages and
disadvantages of trading currencies?
JS: I can tell you why I trade
forex. I love politics and I’m very
interested in economics, in what
our Federal Reserve is doing and
how that’s going to affect business.
And as I started looking at my two
main passions - politics and trading
- one of the best outlets for me was
36 FX TRADER MAGAZINE April - June 2010
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trading system and you run into a

drawdown? What happens when
that system generates 3 or 4 losses in
a raw? What typically happens is that
the trader comes in and start cutting
trades short, stop the automated
trader just before it runs back into 2
or 3 winners that would have made
up for all the losses. Whether you are
using an automated trading system
or your own trading plan, you have
to be disciplined about it. I advise
my traders to stay away from any
automated system, simply because if
you got a million dollar system, there
are hedge funds and banks who would
pay millions of dollars for it. So why
are you selling it for 99.99$ on the
internet?
I don’t care whether everybody else in
the world says that the European Central FXTM: Would you like to give any
other important piece of advice to our
Bank is going to raise interest rates. readers?
If my charts are telling me that I need to be JS: I would just say that if you’re not
a successful trader right now, but you
long or short, that’s what I’m going to do. want to be, make a decision that you
want to be successful, and then find
somebody that you know is successful,
but what I can tell you is that every all that subjectivity and we focus and listen to what they are going to
fundamental trader that I know has exclusively on technical analysis. teach you. That’s the best advice I can
a team of people that do nothing all give because this is the advice that led
day long but research. But if you’re FXTM: What do you think about me to where I am. Continue to learn
an individual trader, working from fully automatic algorithmic trading? and grow. Spend some time working
home, not only do you not have JS: Most of the systems that people on traders psychology. There is a great
access to the information that you are going to run across online - these book called Market Wizards by Jack
need in order to make an intelligent 99$ to 200$ systems - are just junk. Schwager - it’s one of the required
decision, but even if you did, you You’re probably going to loose every readings for my courses - and it’s just a
couldn’t go through it all. There is single penny that you put in there. list of about 20 great traders and how
no possible way, in my opinion, for Systems can be automated and we are they became successful. One of the
a private trader who doesn’t have a working on automating a couple of best things that you can do as a trader
team of people, to make educated ours, but again it comes back to this is to emulate those who have already
decisions based on fundamentals. issue of psychology. What happens been successful.
So what we do is that we eliminate if you start using an fully automated

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