After kicking off his journey into the trading world by being invited to a trading event in the late 90's, Charlie is now a veteran of the markets.
Although he has built up a successful trading education company with a budding trader community, EzeeTrader, he is probably best known for appearing on the BBC Documentary Millions by the Minute.
In this latest Trader Dozen interview with TraderLife’s Chris Johnston, Charlie provides an honest account of his trading lightbulb moment, his approach to failure, what two things anyone needs to succeed in what they’re doing, and why BBC producers seemed more interested in him washing his car than his trading ability...
Whatever you do, if you want to do it to any level of competency, you are going to need two things: time and tenacity.Charlie Burton
1. Can you remember when and why you got into trading? (and what do you trade?)
I worked in Financial Services as an account manager for Scottish Provident and then Old Mutual Fund Managers. I would advise Independent Financial Advisors (IFA'S) on our funds, pensions etc. It was actually an IFA that I knew well back then who said he had a couple of tickets to go to a trading event and asked if I wanted to go. That was in the late 1990's and, so much like many other people who get into trading, I initially went on a course!
I loved my career at that stage and had no intention of leaving it, so getting into trading was purely that I had always been interested in the stock market and thought this would be a great way of growing my wealth on the side from my career.
Initially I used to trade U.S stocks but gradually widened the net to include the usual markets like indices, commodities and FX. I now predominantly trade FX and indices with some commodity trading scattered in here and there.
2. What’s your trading style and how do you fit this into your other life activities? Do you trade around your life or does your life/job fit around trading?
I started out as a swing trader as I was working full-time. Once I went full-time trading in 2001, I pretty much day traded for several years with only a swing trade or two a month maybe. Nowadays I have a good mix of day and swing trading. I day trade when in our EzeeTrader live trading room but outside of that I mostly swing trade.
Swing trading gives me a lot more freedom to enjoy life without being in front of screens as much. Having said that, I am still constantly keeping an eye on the markets as some of my best risk to reward trades come from an intraday entry that I can then run as a swing. Much of my trading now comes from an hourly or 4-hourly timeframe even if intraday trading. I find it much less intense.
3. What motivates you to constantly work on improving your trading systems and enjoy what you’re doing?
Money! Haha! I know it's a rather blunt thing to say but we get into trading to make money, not make points or pips or whatever else. So, just like anyone, I have aspirations with regards to when I want to retire and that keeps me motivated. I also really really enjoy the challenge of trading. I love the constant psychological battle there is with trading the markets and the amount of analysis I do I find fascinating. I believe you have to enjoy trading too. If it's purely about money, you're less likely to succeed. You have to be passionate about it and enjoy the process of trading...
4. Throughout your journey, are you able to pinpoint a moment or a routine that you started doing that made all the difference to your trading and/or life?
Yes there was definitely a light bulb moment for me. After a couple of years trading, I had got pretty good at going sideways; I wasn't losing money but I wasn't making any either. My Account would go up for a few months, then typically come back down in a few weeks. This became a cycle that I couldn't break out of.
What was happening was I would trade well for a period and then after a few months, I would start to become overconfident. That overconfidence would lead me to start taking trades that I shouldn't and over leverage too. Once I had given back most of my prior gains, I would tighten up, get more disciplined again and funnily enough the account would start rising. But again after a period, once I became overconfident again the whole process would repeat.
I know it's obvious, but I simply had this self-realisation that if I stopped myself from losing that discipline, I could break out from that pattern. It was a huge step forward in my trading because it was the first time I had properly got on top of my natural greed tendency. Maintaining discipline is not easy but with plenty of self-analysis, you can and that was probably the biggest moment for me...
5. I’m presuming that you’ve come up against failure in the past. What has been your approach on getting past these failures and has this evolved since?
As a trader, you are constantly coming up against failure and I have my fair share of drawdowns like anyone else. It's a lot easier to come out of a drawdown when you've experienced it so many times in the past. I appreciate for newer traders it will be difficult emotionally but from a personal perspective, I've developed a fairly thick skin towards these things because I have come through the other side of them so many times.
I always thought a good approach was to simply put it into perspective. Yes you may be down, but that bad period is just a small period in the grand scheme of things and in the context of how many years you have in front of you, it's much less significant. I would project myself one year into the future looking back on where I am right now saying 'see, it was just a blip and I've come through the other side'.
The markets are constantly changing and so your approach will frequently be out of sync with them. Understand that these things happen but that you will also have times where your approach will capitalise in a big way too.
6. What would you put your success down to? Just being lucky, your intellect and smarts or just consistent hard work? Or possibly a combination?
Certainly not intellect! Haha! I believe it purely comes down to putting the work in and having a huge desire to succeed and not quit. I see so many newer traders who are really keen and then maybe after a year or so they quit because they haven't made any money. It's a shame but then you see it in all walks of life too.
I have a good example of tenacity for you. A lady trader I had mentored had been trading for over four years and she ultimately never made any money. She had a lot of emotional baggage in relation to making money which was limiting her. In the end, even I said to her that I thought she should quit. She proved me wrong because she must have had her own light bulb moment. In the past 18 months she's banked £160k!
7. What do you think sets you apart from others who are trying to be successful?
I truly believe that you have to develop a trader mindset. I see so many traders spending all their time on developing strategies but no time on their mindset. You could have a highly profitably strategy but still lose money without mindset. I've seen this happen so much over the years. As soon as the strategy has a drawdown, the trader can't handle it and they are all over the place. It's of primary importance to be able to cope with both drawdowns and profitable periods. If you can't, you will get nowhere. I believe this is my edge over and above any strategy I use...
8. What advice do you have for those who fail, give up or never get started? For either trading or something else in life.
Whatever you do, if you want to do it to any level of competency, you are going to need two things: time and tenacity. I once represented England at Karate. I didn't become a great fighter overnight, it took years of training before I developed the necessary skills to compete. I would sacrifice my social life much of the time as a young man to be out training all over the country weeknights and weekends. If I didn't have the drive and focus, I never would have got to that level.
It's the same with trading or any other endeavour; work hard, expect it to be tough but know that others will quit. Don't become a statistic like them, give it enough time and you will have your personal light bulb moment too.
9. Do you set yourself goals? And do you feel that it is a good way to achieve what you want?
In trading it's good to have overall goals but you have to be very careful with them too. For example if you had a goal to make £500 a day, what happens if you don't achieve that goal several days in a row? You're setting yourself up for disappointment. So I give myself a broad target range to hit which means I'm not allowing myself to feel disappointment. If my trading comes in at the low end of my range, well that's fine. If it's at the high end, that's a bonus. Under-promise and you give yourself chance to over-deliver.
10. Knowing what you know now and how you got to where you are today: is there anything you would like to have done differently, maybe done something earlier in life (or later) etc.
It would be easy to pick out my past and say certain things I would do differently but no, I'm where I am today for a reason and I'm happy and content with that.
11. You were profiled in the BBC documentary ‘Traders; Millions by the Minute’. Was that an accurate representation into your trading, as you mention on your website that they seemed more interested in ‘filming you wash your Porsche’? Could you also tell us a little bit about that experience?
Yes that came about because I was doing a live trade off at a Forex show, the BBC were making that documentary and heard about it. They called me to see if it was ok for them to film the trade off (which they did) but by the end of that call they asked if I wanted to be one of several featured traders in the program. The producer came to my house as she wanted to check I was legitimate and then they came back to film on a separate date. They did five days of filming with me so it was over 20 hours of footage condensed down into probably 10 minutes in total on the show.
Initially I was disappointed with the program as I had done a lot of trading and a huge amount of trading-related questions were answered but in the end the producer said it was a 'lifestyle show' and if there was too much footage just on trading, the average viewer would get bored. Hence why she had me washing my car, going out for runs etc rather than including the live trade-off which was a shame!
But on reflection the program was fine. They did a good job of making me appear a lot more serious than I normally am but I understand how these things work now.
12. Having completed your 10k to 100k in two years challenge, you’ve embarked on a 50k to 500k challenge. Could you give us a quick update on your progress and what the purpose of this challenge is?
Yes after the first challenge had finished, the pressure was off! I was glad to be finished with it because it's a constant extra pressure when you put your neck on the line like that. But a bit like when Sir Ranulph Fiennes would come back from an arctic mission and swear he wouldn't do another, once the pain had faded in his memory, he was back planning another! So about a year after that $100k challenge was over, I was wanting to do another and so came up with the £50k to £500k one.
Ultimately, I do them for two reasons; one to help inspire people on their personal trading journeys. I always say much of trading success is about having belief. But for someone that's been trading a year or two, how do they develop that belief? There's very few genuine traders willing to put their money on the line like this and of course I could fail which makes it all the more real!
The second reason is that with the likes of all these so called Instagram multi-millionaire traders out there, it's very easy for people to be duped by some cleverly taken screenshots of a demo account. So for these reasons, I felt it was right to do another real challenge and put my neck on the line again over a three-year period.
I can't say where it currently is as I'm not due to update our clients until next June on the anniversary but all I can say is it's in profit so far!
13. Each year you attend London Investor Forex Show as a key speaker but also to take part in the live trade-off, and you’re undefeated for four years running. I believe one was against a computer, but can you tell us a bit about the experience of a live trade-off in comparison to your usual trading environment at home and why you enjoy taking part in this event?
I'm actually undefeated in five years! Yes a live trade-off in front of hundreds of people adds a bit of pressure. Again, it would be easy for me to turn up to these shows and deliver a presentation showing people a load of hindsight charts and how I would have expertly traded them. I really don't like doing that as anyone can do that. I do the live trade-off to again show people a sample of how I trade and to demonstrate I'm happy to trade live in front of them.
It's never the same as trading from home because I'm restricted to just a laptop to do everything on as opposed to having the luxury of having a few monitors at home which means the potential to make oversights is higher. Also you are multi-tasking in trying to place your trade whilst explaining to the audience what and why you're doing it. Plus then answering a lot of questions so it's a bit of a pressure cooker. But I would rather do that and lose than put a powerpoint presentation together. I guess when you have nothing to hide, you're happy to trade live.
"Ask yourself key questions. If I take this next trade and it fails, will I be upset with myself? If the answer is yes, the trade isn't good enough so don't take it."