An Interview with Nick Radge from The Chartist

Find out a bit more about the biggest lesson Nick Radge has learnt as he answers some great interview questions from his trading journey.

What’s the biggest lesson you’ve learned through trading?

Patience. You’ve got to be patient. You just need a relatively simple system applied over the longer term, and that requires patience. When I talk about patience, I’m talking about years –not twenty trades, not two months and not two years. It’s got to be many years.

I once had someone ring me up and say, “If a strategy doesn’t make money in any three month period it’s useless!” Well, I’m sorry but that’s just total hogwash in my view. Someone like that is going to be spending the next twenty years of their life searching for something that doesn’t exist. Patience, patience, patience, is what it’s all about.

Trading success comes from a simple strategy applied over many years.

What’s the best trading advice you’ve ever received?

“Next 1000 trades”. That’s my mantra. I use to have some mates that ran a hedge fund and on their computer they had a little sign, “Next 1000 trades”. You’d walk in the bathroom and on the mirror, “Next 1000 trades”. On the inside of the cupboard door, “Next 1000 trades”.

It’s about patience. One trade is not going to make you or break you. Too often we get lured into the situation where you hear someone that’s won the jackpot; they’ve got onto a trade at two cents that went to six bucks. People also win the lottery. The probability of that happening to you is very small, so don’t rely on it. In other words, build a system that’s slowly but surely going to be able to repeat itself into the future, and it may take a thousand trades to get there. Not a single trade is going to make you, and not a single trade is going to break you. A thousand trades means another trade is around the corner. Everyone can do it. You’ve just got to apply yourself over the longer term.

What is one of your personal habits that you strongly believe contributes to your own success?

Research, I’m constantly researching. We’re always looking for not only how we can improve what we currently do, but new things as well.

For example, our dividend momentum strategy which has been incredibly popular was just an idea I had learned from someone else back in 2005. I researched it, it looked good. I put it aside for about six years. We reviewed it again and after the GFC, sure enough it held up extremely well. You’ve just got to keep asking the questions. “How can we do this better?”, “How can I make this entry better?” I’m not saying curve fitting –its broader ideas. That dividend momentum strategy is an incredibly simple concept that anyone can do. I think the fact that I was passionate enough to investigate it and test it, and look into it further, and build rules around the momentum, is what makes the difference.

What’s your favourite trading book?

‘Unholy Grails’!
I guess, probably one of my favorite trading books is the Michael Covel book, ‘Turtle Trading’. Simply because it gives you the background history on how the Turtles, these top traders, have gone through their journey. Even today, I’m always looking at the performance data of top traders. There’s a few websites where you can get the performance data, and I’m looking at the journeys they have traveled over the last twenty, thirty, forty years. The whole idea of understanding these journeys is that, if that happens for these guys, it’s going to happen for me. The more I can understand what they’ve been through, how they’ve kept their head down and kept pushing forward, it gives me faith that what I’m doing is right, and all I have to do is keep on doing it.

Whenever I go into a period of drawdown or a little period of uncertainty or personal doubt, which still happens, I always refer back to that particular book, and also the data provided by many of those managers to reinforce that what I’m doing is okay and I just have to get through that next thousand trades.