288 · Steve B - When Confluences Align, Confidence Follows
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Deep Dive
Why did Steve B. start using options data for his futures trading?
Options data provides exposure levels that align with supply and demand zones, offering an extra confluence to support trading decisions. This data gives retail traders more relevant information compared to other markets, helping to identify high-probability setups.
What was Steve B.'s biggest mistake early in his trading career?
His biggest mistake was trading penny stocks and OTC markets, chasing high-risk, low-reward opportunities based on YouTube influencers' exaggerated returns. This taught him the importance of risk management and avoiding quick-fix solutions.
How does Steve B. manage risk in his trading?
He uses a position size calculator to ensure consistent risk management, always measuring risk based on volatility and converting it into a fixed dollar amount or percentage (1% per day). He avoids overtrading and focuses on capital preservation.
What is Steve B.'s 'Confluence Trading' approach?
Confluence Trading involves using multiple data points, including options market exposure, volume, and key levels, to identify high-probability setups. He combines this with a checklist that includes time, volatility, and data confluences to make trading decisions.
Why does Steve B. avoid using indicators in his trading?
He avoids indicators because they are based on past price action and can create an illusion of past performance. Instead, he focuses on live volume, options exposure, and institutional levels to make more precise, forward-looking decisions.
What role does psychology play in Steve B.'s trading?
Psychology is crucial for Steve, as he believes in accepting losses as learning opportunities rather than failures. This mindset helps reduce emotional spikes, FOMO, and overtrading, allowing him to stay disciplined and focused on capital preservation.
How does Steve B. handle position sizing in volatile markets?
He adjusts position sizing based on volatility, ensuring he risks the same dollar amount daily. This approach prevents him from taking excessive risk on high-volatility days, protecting his capital from large drawdowns.
What other asset classes does Steve B. invest in besides trading?
He invests in real estate, land, and high-yielding dividend stocks or funds, aiming for steady, low-stress income streams. He redeploys profits from trading into these assets to build long-term wealth.
What was Steve B.'s biggest struggle as a trader?
His biggest struggle was unplugging from the markets, as he found it difficult to disconnect due to the constant availability of news and charts on his mobile phone. He has since worked on setting strict boundaries to maintain a healthy work-life balance.
How did Steve B. leverage funded accounts in his trading?
He used funded accounts as an investment, paying challenge fees and aiming to multiply the capital within a short period. Once funded, he traded more conservatively, focusing on consistent returns rather than aggressive strategies.
- Steve B.'s background in accounting and finance provided a solid foundation for his trading career.
- His transition to full-time trading was driven by a desire for more freedom and time.
- He developed a confluence trading approach, incorporating options market data into his futures trading strategy.
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