Forex $ocial Traders
 

           

Interview: Declan Fallon alias Fallond, Top10 Trader in eToro´s Trending Investors Ranking

declan fallonDeclan Fallon alias Fallond from Ireland has 13 years of trading and investing experiences. He has been trading on social investment network eToro since 2013 and I must say that his performance is outstanding. (check his stats yourself).  Currently he is Top10 trader in eToro´s Trending Investors ranking.

I am glad that Declan accepted our interview invitation and responded to following questions:

1. Can you introduce yourself in couple of senteces?

Former Nematologist, current Fintech Project Co-ordinator. Financial blogger, investor and trader for 13 years.

2. Why did you choose eToro?

Two (big) advantages:

[1] Ability to trade a small account (it’s viable with a $100 opening pot).

[2] Ability to modify leverage and position size to trade small lots

Together, solid risk management is a breeze.

3. How long have you been trading for?

13 years an investor, about 3 as a more active trader

4.What instruments do you trade most and why?

I trade U.S. indices, DAX, FTSE, major FX, gold, and oil. As trading is a more short term outlook, you want to trade instruments which respond well to technical factors outside of news events. The indices have characteristics which are a little different to trade, which means if one isn’t working for me I can look to trade another. For example, my greatest experience is with U.S. stocks and indices, but trading the current range in these indices has proved difficult. Meanwhile, the DAX has offered more trending swings, which are easier to trail stops against. This may all change in 6 months, but it’s what suits now.

On the flip side, I invest in equities. My trading account is a feeder for my investment account. The investment account is the money I put to work long term. I don’t trade this account (a handful of entries a year). Here, I’m looking for dividend income and growth with Large Cap companies. I use my #sectorbreadth analysis on Stocktwits/Twitter to determine when best to buy stocks. ALso, when the S&P is 10% below its 200-day MA, then it’s usually a good time to invest heavily in the market; building positions in value plays over subsequent months. It’s a different attitude to have than with trading.

5.What leverage and risk do you use?

Low/Medium. For any position I want to risk around 1% of available funds per position. Mostly positions use x10 leverage. If there was a particularly nice play near strong support, then x25 with a smaller position may prove more attractive.

I’m looking for swing trades. Something which lasts a few days and allows me to trail a stop. I tend to micromanage until I get the stop to breakeven, then let the trade mature. Because of this, my % win is low (30-40%) as many of my positions I take get stopped out. Many eToro traders go the opposite, looking for big % win statistics (>90%) at the expense of 100% risk trades, looking to take small positions and averaging down until a win is registered. The problem with this all-in approach is if you overextend on a position, you have left yourself open to an account wipeout. Given the aim of this approach is the high % win, it’s all too easy to go tilt when losing trades start impacting the win ratio.

In contrast, I had a sequence of 20 consecutive losing trades, but the absolute loss on my account was 6.4% (0.32% capital risk per trade). Despite this losing sequence, I maintain my top-10 rank in eToro’s Trending Investors; top-ranked if you sort by Gain.

6.What is maximum drawdown your potential copiers can expect?

My account has been active since 2013. My max weekly drawdown is 7.2%, and I would want to keep this sub-10%. The Daily Drawdown is 4%, and I would be looking to trade less if coming off a losing sequence to minimize over trading (which I have been guilty of…)
One thing with equity trading are big gap moves caused my post-market releases. Sometimes, you just got to take it on the chin. TWTR is sitting in my account with a 20% loss when it disappointed on its last earnings release. I think it’s a viable buyout candidate, but until then it’s caught in a bit of a malaise until the next earnings release. It’s much harder to manage low risk trading equities, which is why I prefer them as an investment.

7.What profit your potential copiers can expect?

If I have a 25% gain a year I would be happy. Those looking for 25% a month can look elsewhere; it’s not sustainable, and anyone with those stats is going to burn-out eventually.

8. Why do you think investors should choose to copy you?

I would be a little hesitant saying “investors” with eToro. If you want to invest, you need to be buying the underlying equity or basket of equities, not trading the price – which is what eToro is about. I’m the tortoise vs the hare. No frills, no thrills. Thrills means emotion, and emotion is bad for trading.

9. What market analysis and tools do you use?

I’m the Friday broadcaster for Tradercast.com, and use Tradercast charts for setting up my trade levels. Tradercast also offers an active trading community, hosted by Phillip Konchar. For equities, I use Stockcharts.com, which I use for my blog: http://www.markets.fallondpicks.com/.

10. What are your hobbies?

Boardgames (Euro and Ameritrash), Computer Games (Strategy), Golf.

11. Do you copy other traders or are you trading only on your own?

Trading is all my own. I recommend everyone to learn how to trade.

12.Can you describe your trading strategy?

I’m looking for tests of major support to buy or major resistance to sell. I use candlesticks, with wicks determining increases in buying or selling pressure near identified support and resistance. I also like to see strong momentum in Stochastics and MACD, combined with trend measures such as ‘Golden Cross’ between 50- and 200-MAs. The ‘cup-and-handle’ pattern is a great swing trade play when spotted. Bull and Bear Flags also offer quick entry opportunities.

13. What is minimum amount for copiers to copy you?

$500 is perhaps optimum because of the small returns I offer. I don’t know if copiers can qualify as Popular Investors (which require a $500 minimum to qualify), but I think they can – at least there is a People scan for best copiers. As a qualified Popular Investor, then anyone copying my trades would enjoy stats comparable to my own, depending on when they started to copy me. Ultimately, some of those who copy me may have better stats than me if they joined after a losing sequence of mine, allowing them to attract copiers of their own. At this point, individuals copying me could earn revenue from their copiers, offering a far greater return than from my trades copied!

14. Thank you for interview….Is there anything else you would like to tell to our readers?

We at Tradercast.com would love to have some eToro folks on board. Phillip Konchar does a daily broadcast from 13:30 GMT for two hours, covering key economic calendar events across European and U.S. indices, major FX pairs, gold, silver and oil. I do the Friday show when I can. I also post trade charts in the community for those looking for trade ideas from me (outside of the trades I do on eToro).
For those looking for more stock orientated information, follow me on Stocktwits http://stocktwits.com/fallondpicks, or Twitter for those who are not on Stocktwits: https://twitter.com/fallondpicks.

Warning: Trading carries risk. Only risk capital you are prepared to lose. Past performance in not an indication of future results.

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