Interview with a Trader: Inside the Mind of StockBoardAsset
Alastair Williamson, known to most of us as @StockBoardAsset, is a seasoned trader from Hunt Valley, Maryland. Aside from Finance, he’s a fan and supporter of local steeplechase and fox hunts. He played lacrosse for 15 years ending with division 1, and now manages a start up hedge fund that preaches and holds a market neutral stance.
Some would say his methods and regular tweets throughout the day about distribution, LVNs, and POCs are written in some sort of code, and that his charts are a confusing mess. However, for those who have “peeled the onion to the core” so to speak, or understand this “code,” he is a reliable unbiased source of both intraday and long-term commodity and index setups.
He took some time to answer a few questions for me:
What first influenced your interest in the stock market?
“I attended Towson U in Baltimore. It was there that I studied Finance and opened my eyes to how markets work.”
What methods/strategies have you pursued that have failed for you in the past as a trader?
“Situation awareness of the environment and information gathering. You need credible sources of news flow.”
Who are influences/role models for you that are relevant to trading and why?
“James F. Dalton, and J. Peter Steidlmayer are both huge influences for me. Both played a big part in helping me understand what value is and where value can go.”
When/what was your “ah-ha” moment? What was the breakthrough?
“When I first discovered Market Profiling. The breakthrough came when I developed my current strategy of using market profile to play reversions back to a mean.”
How would you best describe your trading style?
“I buy tail risks for a mean reversion. A tail risk is the risk of an asset or portfolio of assets moving more than 3 standard deviations from its current price. A mean reversion is when price extensions move back towards the mean (or average.) This mean can be the average price or another average like economic growth or the average return of a specific industry.”
What key rules do you apply to your own trading?
“Trade macro and commodities. Be patient in finding the unfair level. Use all timeframes to understand where value is and where value can migrate to.”
What do you look for in the stocks that you trade?
“I just trade indexes, and commodities. Single print TPOs. Unfair highs and unfair lows.”
What do you feel sets the great traders apart from the rest?
“Don’t make it complicated.”
Some would say that your methods are very complicated and that your approach is not at all a simple one. What would you say to them?
“Start like an onion peel off the first layer, and if your eyes don’t burn go to the core. My point is, if you can handle more complex strategies, it’ll take trial and error before one can grasp. If you can’t take the pain, then keep it simple.”
What can you tell readers about your risk management approach?
“Know the sandbox your playing in.”
What trading moments make you the most proud?
“Finding the tail risk of a single print TPO”
The most upset?
“Central Bank Intervention not allowing market forces to complete.”
What books, websites, or other resources would you recommend to those wanting to broaden their trading knowledge?
“Market Profiling Handbook by the CBOE” (free pdf)
What advice can you offer readers regarding position sizing?
“Don’t jump into a pool not knowing the depth.”
A lot of traders plateau and have trouble evolving beyond this level. What advice can you give to them?
“Most traders get killed, because they’re ignorant to timeframes. Bring an umbrella even though its sunny. Be prepared. Write a morning note, and discuss it with others. Be dynamic and adapt to volatility.”
Now that you have developed into a successful and profitable trader, what are you doing to better your skill?
“Morning notes, communicating with other desks, and developing a social media audience who can communicate as well in an intelligent way.”
Any habits or methods that you use that others might think is unorthodox?
“Scalping L2 with no charts playing the order flow.”
For those who are just beginning to get their feet wet, what advice would you give or direction would you point them?
“Wait for major indexes find a trend. You’ll get chopped in this. Stay out of small caps, biotech, and other risk industries. Central Banks have inflated most risk assets, and FY’16 global growth is stagnate. Read the Series 7 understand how market structure works. Then transition into macro view, and work inward.” (free Series 7 prep manual pdf)
Any advice for those traders who are already successful?
“Volatility is your friend.”
What would you like your “legacy” as a trader to be?
“Mean Reversions buying the tail risk.”
I want to personally thank Alastair for taking the time to share his thoughts on the above subjects with us.
Follow on Twitter @stockboardasset