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#608: Build Confidence & Consistency in Trading with Diana Perkins & Forex Coach Andrew Mitchem
Build Confidence & Consistency in Trading with Diana Perkins & Forex Coach Andrew Mitchem
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#608: Build Confidence & Consistency in Trading with Diana Perkins & Forex Coach Andrew Mitchem
In this video:
00:31 – My trading chat with Diana Perkins.
00:56 – Andrew & Diana trade different markets but share a common philosophy.
04:15 – Risk management and psychology.
05:27 – Removing the hype around trading.
13:15 – Lot size, risk, demo and live trading.
19:14 – Technical trading and News Trading.
22:05 – Trading FX, Metals, Indices, Cryptos and Commodities.
25:15 – Using currency Strength and Weakness.
27:07 – Fitting trading around your lifestyle.
32:05 – Enjoy your trading.
38:20 – Trading via a Prop firm.
39:25 – Knowing that you have the knowledge to trade for yourself.
42:22 – Contact Diana
Andrew Mitchem
One of the best ways for you to learn how to trade properly is to listen to conversations between experienced traders. So today I’ve got something really special for you. Just yesterday I had a chat with Diana Perkins from Trading with Diana. We trade different markets, but we both share the same philosophy, and it’s going to help you massively.
Andrew Mitchem
Let’s get into that more right now.
My trading chat with Diana Perkins.
Andrew Mitchem
Hey traders, Andrew here at The Forex Trading Coach with video and podcast number 608. For 40 minutes you’re going to get absolute gold with my interview with Diana Perkins. Let’s start straight away. Everybody, it’s Andrew Mitchem here at The Forex Trading Coach. Absolutely thrilled today to be joined by Diana Perkins from Trading with Diana. Welcome along, Diana. Nice to see you so much.
Diana Perkins, CPA
And thank you for having me.
Andrew & Diana trade different markets but share a common philosophy.
Andrew Mitchem
Awesome. Well, look, we got put together because I think someone thought that we would have a great education and insight to help people, because although we do slightly different things, I think our philosophy of trading and helping people is something that will align really well for people watching and listening to this. So maybe first of all, Diana, if you could introduce yourself, who you are and what you do.
Diana Perkins, CPA
Absolutely, and I agree with the person who connected us. I’m really excited for this conversation. So, Diana Perkins, I’m the founder of Trading with Diana, which is an educational platform where I teach everyday people how to trade the market with confidence. I do this through workshops, personalized coaching, and newsletters, and it’s honestly the best part of my day.
I spent a good part of my career trading and mentoring and coaching others in the space, and recently launched my own business so I can do this full time.
Andrew Mitchem
Awesome, awesome. So, when you coach people, what kind of markets do you generally look at? What do you help them with?
Diana Perkins, CPA
Yeah, it’s typically the US equity market and we’re focused on stocks, ETFs, you know, some index funds and, for a small subset—although it’s growing—options trading, which I don’t normally market. But I did used to be a professional options trader. I love it. There’s so much that you can do with stock options. So focus in those areas.
But it’s really all market conditions, which brings up—I actually just spoke with a trader this morning about that—just looking almost, you know, the last nine months in review, but all different market conditions across all different sectors. It’s really a flexible approach. And you’ll hear me say that investing, it’s very individual.
Andrew Mitchem
You know, I was reading your background about how you started when you were young with charging—I think it was the interest—some borrowings and things like that, and it was like, that was really cool. I love that whole story. So I’m guessing you’ve been into, like, the financial industry or business for most of your life?
Diana Perkins, CPA
Yeah, absolutely. So as long as I can remember, I was a numbers girl. At eight years old, I learned what compound interest was, and when my family found out I had a little bit of, you know, petty cash, they started asking me for money. So I charged interest because that money could have been earning interest in the bank account.
So, yeah, from an early age, I always knew finance was my passion. Throughout my career, you’re right, I spent about 20 years in various roles in the finance industry. But it was really a class I took in college where we had a virtual stock exchange competition. I’m very competitive by nature, and I wanted to win in order to understand what moves the markets.
And so that’s how I learned. I knew this is what I wanted to do, but I wanted to do it on my own terms—if you want. But, so what I did is I got my finance and accounting degree, my CPA, did corporate job, and then ten years in, I went out on my own to learn how to trade stock options and never look back.
Risk management and psychology.
Andrew Mitchem
So that’s interesting because I’m guessing with that kind of background, you learned either the hard way or straight away about risk as well, because I find it interesting that, you know, we’re in—especially myself in the forex market predominantly—we’re in this industry where people think risk is like, you know, they have to risk everything, or “I don’t want to do it because it’s too risky.”
I’m guessing that we’re both completely the opposite, and we’re both very conservative and risk-averse in how we trade. And I’m guessing that with your business, it’s the same thing.
Diana Perkins, CPA
Yes. I would say that’s an area where we’re probably very similar—where it’s not—but risk management, that’s what keeps you in the market long term. Yeah. Really kind of the sexy side, I think, of trading, which is why I think a lot of trading education or, you know, just when I say that, I say it loosely—like YouTube videos and things that, you know, the masses are looking at—they don’t really hone in on that as much. Like 80% discipline and mental and managing our emotions in trading and sticking to a structure and plan and building that consistency over time.
Removing the hype around trading.
Andrew Mitchem
Yeah, and like you brought the word emotion into that. I think that’s such a—I’ve always said to people when they start, there’s two things you’ve got to control. One’s up here and the other’s in here—your head and your heart. Your emotions are such a massive part of trading.
And I see the danger, you know, with YouTube, TikTok, and Instagram—all that type of thing—you know, there’s a little bit of okay information out there. There’s obviously a lot of bad information. People always show you the flashy red Ferraris and the private jets and “look what I did on this trade, I made 50%,” but we both know that behind the scenes, that’s not real.
But unfortunately, a lot of people get, I suppose, caught up in that roller coaster of thinking they’re going to make a fortune straight away. And I noticed on your site—and there’s one thing I also say—you had a section on there “who this is not for,” and I thought that was really interesting and good because we’re both upfront and honest. We’re here to help teach you, but if you want some ridiculous, you know, gain, you’re not going to get it with us.
Diana Perkins, CPA
That’s right. That’s absolutely right. And I think a lot of what’s out there—I agree—there are a lot of folks who want to say how, you know, they see that one story, like you said, with the Ferrari, right? “Oh, I want that. How do I get that easily and quickly?” Yes. It’s true—like anything in life—you need to put in the investment upfront, and it’s not even, you know—I mean, some of it, yes, dollar-wise—but the investment of time and your energy to really learn how to do it right.
And I think there’s like this misnomer out there that—and you do need to make that investment—but you don’t need, you know, millions to start. You don’t even need thousands to start. I mean, right. And I have a feeling you and I could get really into this, but right now the markets are more accessible than any time before.
Right. You can open an account in, you know, 15–20 minutes. You can start with dollars. You—you know, you can’t afford a $500 share of Microsoft? You can buy a fraction share on many of these platforms. So it’s so accessible. But you do need to make that investment upfront on education because you don’t want to get whiplash.
And you don’t want to lose money in a trade because you put in the order backwards. You know, you want to do it because maybe you called the market wrong. So, so many learnings—I’m sure you could attest as well, having been, from what, 15 years.
Andrew Mitchem
So would it be fair to say that it’s the learning how—like the how to do it—that is the most important thing right now when someone starts, or even if they’ve been doing it for a long time and have failed? It’s the learning properly, the “how to.” Because I say to people, if you do that upfront, forget about the next six months or even the next year. You know, use that time as your learning process—your learning phase.
And if you do that right, then afterwards things will be really good, you know, financially. But do that groundwork—that hard work—upfront. Learn how to do it properly and to a low risk. Learn what sort of person and trader you are, and the results will follow.
Diana Perkins, CPA
Yes. And actually that last piece that you just mentioned—learn the type of trader that you are. We all have a different and personal relationship with money. And when it comes to trading—and I talk to a lot of my traders about this—many times they’ll say, “I feel like you’re a life coach in addition to my trading coach,” because back to—you know, because it does involve risk.
So yes—so yes, the “how to” is very important, and I run workshops just on those tactics. But I would argue that trading and being successful in trading long term is probably 80% psychological. So when you just said “it’s the type of trader you are, the type of investor you are, that relationship,” and then determining, okay, how do I want to trade?
What are my goals? You know, how much am I willing to risk? You know, just make sure you have answers to all of those questions before you place your first trade.
Andrew Mitchem
Absolutely. And do you encourage people to start on demo accounts, or do you go straight into smaller live accounts? How would someone start with you?
Diana Perkins, CPA
Yeah, great question. So I do work with a contingent of aspiring professional traders—options and forex—and every one of them are required to trade on a demo account. So absolutely, yes for those folks.
For my beginner traders who are just dabbling, I do encourage a demo account. If they don’t trade in a demo account, then I always encourage to start small—very small.
Number one rule: don’t trade anything you can’t afford to lose. And then number two: never take the big loss. Right? So there are some that just dabble. Because there is a different—going back to the mindset—it is different in demo versus live.
And then finally, I’ll say probably with my most experienced traders—I mean, I will say I get on coaching sessions and I’m teaching a new option strategy and they’re placing the trade right there live. I say, “Oh, well, why don’t we try that, you know, in demo first when it’s a new strategy?” And this time a new, you know, even position sizing as your account grows?
I had that question recently from a trader—“You know, get your feet wet. You’re trading with a significant amount of capital to you,” right? First of all, get your feet wet first. And then when you feel confident, then go in your live account. So long story short—for the most part yes, although some folks who are just, you know, dabbling in news, sometimes they might try a little bit with live to get their feet wet or to build their confidence.
And then we go in and we talk about all the elements you mentioned before—the real meat of the “how.”
Andrew Mitchem
Right now, the way that we teach people—and again, it’s personal because it’s up to each person what they determine risk and amount of money—I personally, for my own trading, I trade at half of 1% of my account risk per trade. If I trade on prop firms where you can trade on other companies’ money for profit share, I’ll go down to a quarter of 1% risk per trade.
And sometimes that’s even split over two trades—two positions. So it’s very, very small amounts because, like you said, it’s the psychological—the mental aspect is so huge. And I think it’s also important that you control that risk so you’re not frightened to take that next trade.
Like if you have a loss, that loss, I think, should be acceptable for you. If you see the position at the time, and it meets your criteria and you take the trade and it goes against you, then you shouldn’t be scared about getting into the next trade because—providing those criteria are right and the market goes against you—well, that’s sometimes what happens.
So I think that real low risk, low drawdown is crucial for people to almost, like, trade mentally. Because I think, unless people really get into it, that whole aspect of live trading and the emotions is so important to get right.
Lot size, risk, demo and live trading.
Diana Perkins, CPA
Absolutely. And there’s so much, I feel, to unpack there. And, you know, position size in every trade—typically with traders, we’ll talk about 1 to 2%. But the half percent, quarter percent—you know, the other side of that is how many positions do you have on.
Andrew Mitchem
That’s right.
Diana Perkins, CPA
Yeah—broader your portfolio risk. So there’s this analogy that I share with my traders, and it hits on just what you’re talking about. You don’t want one loss, you know, mentally, to make you so fearful you don’t want to get back in. Yeah.
And so there is this analogy of ten trades. And the idea is you have a portfolio of trades—and it can be currencies, it can be US stock options, you know, whatever it is—whatever you’re trading. You have ten positions on at a given time, and you go in and you have your—ideally you have your trading plan and position size either to max loss of options or you have a stop loss. You know, so you’re managing your risk in all ten trades.
You do your analysis; you approach it right. The reality, though—going in—start with the mindset: even though maybe you did everything right and followed the system and plan, you’ll probably have at least two to three of those trades come out as a loss. Maybe—and I’ll call it three to five, right—will be, you know, small loss or small gain.
Andrew Mitchem
Yes.
Diana Perkins, CPA
And the three—ideally more on the upside if you’re playing probabilities and charting—but we’ll just call it two to three winners, right? And you want to make those up because they’re going to pay for your losers. And what I see a lot are traders that want to get out of their winners early because they’re working through—and that’s where that emotional discipline comes in, which I’m sure you could speak to, with your experience.
Andrew Mitchem
Yeah, we see exactly the same thing. And that’s why with the strategy that I’ve developed, profitable trades—like a broad range—would be between a 2-to-1 reward-to-risk and about a 4-to-1. So, in other words, if you were risking 1%, you make 2, 3, 4%, depending on the individual trades.
And so I think that’s really important because, as you said, you’re going to have some little losers and then, you know, bigger gains, and you kind of step your way up. When you look at it, it’s not an equity curve as such—it’s more of a—I look at it as like a ladder. You know, little losses, bigger gains; little losses, gains.
And I seem to think that that’s how people progress well. And then we talked about compounding as well before we started. You know, getting people to understand the power of compounding is huge as well. And I think a lot of people—you know, it’s a very simple concept—but I think a lot of people don’t know how powerful it can be, both when you’re making money and also when you’re losing money, because your risk is therefore the same percentage but a smaller monetary value. So, yeah—compounding, time—they’re both very powerful things.
Diana Perkins, CPA
Can really—I mean, compounding, that’s how you build wealth. There’s a lot of work for building wealth with confidence. And the first—and this is for folks completely intimidated by the markets—“Where do I start?” And I always start with, “Why even invest?”
Yes, I have a chart for $50,000, and there’s two lines on this chart: $50,000 over 30 years sitting in the S&P 500, and it’s over $800,000 of profit. Sitting in—of course I use the traditional savings on the flip side—and it’s about $8,000 over the same amount of time.
Now, steady returns, which we know—since 1928—random stat, but the S&P has averaged about 9 to 10% per year. But it’s actually interesting: when you look at the average between 8% and 12% annual return, it only happens about 20% of the time.
And so I think a lot of folks see it as really volatile because you tend to remember some of those really down years, or others—really great years that the S&P returned, you know, 25–30% or more. Yeah. I’m with you—compounding really makes all the difference, and that’s how you build wealth. You won’t do that in a traditional savings account.
High-yield savings around 4%—you know, similar concept for maybe emergency fund. But the financial markets—that’s really where it is. The other thing that you mentioned is reward-risk. So 2-to-1 to 4-to-1—excellent. Yeah. So typically we target around 2-to-1, although it is swing trading; it’s shorter term. But you have that key concept: you want to make more on your winners than your losers. So even if batting like a 50–50 win-loss, you’re going to come out ahead.
And that’s really the key to win-based. You know, once in a while, you know, making an earnings play or, you know, non-farm payrolls, or, you know, a Fed—maybe, you know, you might play a certain economic report, corporate earnings. It stops and really try to, you know, get those home runs. But even those also sometimes throw into the 1% risk—like you think, you know, right? Half a percent or 1%—I’ll cut that on those that feel more speculative than what the other 95% of my trading is. So nice.
Technical trading and News Trading.
Andrew Mitchem
So we’re technical trade—I’m a technical trader. I look at charts. Yes, I’m aware of, you know, news events. Like you said, the non-farm payrolls or employment change, I think it’s called these days. But all those type of things—we’re aware of them. But I personally trade and teach as a technical trader.
Do you do something similar with candle patterns, and is that how you teach people to look for certain positions?
Diana Perkins, CPA
Yep. Yes. So I would say—I think there’s definitely a place for both technical and charting and fundamental analysis. I think they work hand in hand. But primarily I teach—and what I focus on with my students—is technical analysis. And the reason for that is: focus on swing trading, swing timeframe. So anywhere from, well, a few days up to maybe 7 to 8 weeks on the long end.
Most of my traders around 2 to 3 weeks. Most of my strategies—actually no, about 4 or 5 weeks, which is definitely on the longer end. But because of that, momentum trading—technical analysis. However, there’s always a fundamental check before going into any trades. So looking at things like earnings announcements; if I’m not as familiar with the industry or that specific company, you know, looking at its competitive positioning, analyst reports—what are some of the targets—recent earnings.
And I always do a scan on news to understand, okay, what’s more current? Is there M&A activity? Their product lines? What are their competitors doing? So I run through all of that before I put on the trade. But everything up to that point is technical analysis through top-down.
And I would love to hear more about your system and how you do selection as well.
Andrew Mitchem
Yeah, sure. So, although we’re called The Forex Trading Coach, over the last number of years we’ve had access on our trading platforms to more markets like the indices. In fact, I took an S&P 500 buy trade yesterday, which was profitable for our clients. But we can trade the indices, the metals, commodities, cryptos, and of course the currencies.
But the way that I trade them—they’re all taken the same way. I’m looking at a chart, and it could be the Euro/US dollar, or it could be the S&P 500, or it could be Bitcoin. And to me, it doesn’t matter what I’m trading. It’s more: does it have the technical setup to move in either a, you know, bullish or bearish direction depending on which way I’m trading.
So—and of course when I started and worked this out into a system—because it took me four years of going around in a circle, you know, losing money, buying different ideas and systems and getting nowhere. And so about 18 years ago things came right; 16 years ago we started coaching.
Trading FX, Metals, Indices, Cryptos and Commodities.
Andrew Mitchem
But obviously back then, cryptos didn’t exist. We couldn’t trade metals; we couldn’t trade indices. So what’s been really pleasing is because we’re based on sound technical analysis and looking at candle patterns and where they occur on the chart—have they got room to move to the profit target? We look at round numbers—like, you know, strong levels, price levels. And by the way, I find that so many people fail to look at the price of something they’re buying or selling.
You know, can you have your stop loss protected by a 00 number? Things like that. So we quite heavily look at the actual price. A lot of forex traders just fill their charts with clutter of lines, and it looks like spaghetti on the charts—lines and dots and arrows—and they actually don’t look at the price.
But simple candle patterns and analysis can work, I find, across all markets. We don’t look at news as much as you sound like you do because of the nature of predominantly the markets we’re trading. You know, we’re aware of the main events like an interest rate or employment data, but we don’t specifically— I don’t especially—trade them.
I prefer technical analysis because you could have something affecting the US market, let’s say. What if I’m trading the Euro against the New Zealand dollar? It’s completely irrelevant, well, you know, in most circumstances, what’s happening in the US market. Or if I’m trading the Australian against the yen, what happens out of the UK or Europe—it’s pretty much irrelevant.
So I find that in currency trading, a main news event is only relevant if you’re trading that currency. So the British—if you’re trading the British pound and there’s something out of the UK—obviously that would affect, more likely, what you’re trading. Or you don’t trade until that news event’s finished. But predominantly we’re candle patterns and technical traders.
Diana Perkins, CPA
Well, and I love what you said about keeping it simple. I’ve definitely worked with traders and there’s, you know, you know, Fibonacci retracement, and there are all these different indicators. And, you know, price and volume—primary indicators—start there.
And you bring up an interesting point too around pairs trading. So there was a stint about 15 years ago where I did dabble in forex, and I loved the concept of pairs trading so much I actually do apply that to my stock and options trading.
Okay—within a sector I make—you know what, energy is a good sector to do this because it’s—I think, you know. So anyway, basically you look at relative strength, and you have a stock that’s outpacing the S&P—you have a bullish strategy on that particular company stock—and then you want that relative weakness within the same sector. So if there’s a sector rotation, you’re making trades right for one another.
Using currency Strength and Weakness.
Andrew Mitchem
So you could use sectors in the way that I use, like, the Euro or the US for strength and weakness because—you know, we’ve got trades setting up very shortly in half an hour. And I was looking today for a sell trade on the Euro/yen; it just happens to be looking like a reasonable trade.
But then I’ve gone again—I’ve looked at the Euro against the US and against the Aussie and the Kiwi and the Canadian—and the Euro is looking really, really strong. So by looking at strength and weakness, it can actually keep you out of losing trades because although this Euro/yen looks like it’s dropping, the Euro is strong against every other currency.
And so I tend to stay away from taking a sell trade on the Euro/yen today because I’m trading against the overall predominant strength of the Euro. And I think when you blend that with your chart analysis and your strength and weakness analysis, it can actually help you to avoid losing trades as well.
Diana Perkins, CPA
Yeah. And if we zoom out, it’s a different perspective. And similar to what you were saying before with charting—one of the great things about it, whether you’re trading cryptocurrencies, ETFs, stocks, commodities, currencies—right—it’s transferable or translatable across different asset types.
And I would say the same thing. And I’m actually a little curious about this—so I mentioned swing trading timeframe is my sweet spot. I see with charting, right, you can go to a 15-minute, 30-minute, hourly timeframe and trade on that, or you can buy and hold and go heavy on the fundamental. I would love to hear more about your approach, just in terms of timeframe and how you look at that technical analysis.
Fitting trading around your lifestyle.
Andrew Mitchem
Yeah, definitely. So I use a phrase of, “There’s no prizes for trading.” Because everybody thinks they need to be looking at short timeframe charts, and the reality is you don’t—and you should probably do the opposite.
So as an example, tomorrow it’s the 1st of October. And so we’ll be going through the monthly charts for the September close and looking at those on longer timeframe charts for October trades. The beginning of each week we look at weekly charts, and every day we look at the daily charts.
And so that’s the 5 p.m. New York close. And so we make the analysis of where we see trades based off those closes of the daily charts. At the same time, at the 5 p.m. close, we can also go through and look at, like, 12-hour and 8-hour and 6-hour trades. So we look at those shorter timeframes as well because they all close at the same time.
My other personal favorite time to trade is 5 a.m. New York time. No, not great for you. But you don’t have to be there at that exact time. But at that time, the 12-hours change over as well because obviously it’s 5 p.m., 5 a.m.—two lots of 12-hour charts.
And so I find that those are the two best times to trade. If I had to pick—like, you know, someone’s working full-time or traveling, like, we’ve just spent a month traveling around the US—I traded once a day at 5 p.m. And it doesn’t matter whether you put the trade on at 6 or 7 or 8 because we use limit orders. We don’t trade at the market so much.
I use a buy limit. So if I see a bullish pattern, I will take a buy limit to buy below the current price. So in, you know, markets—things move up and down—and it comes back down below my buy limit and then goes up, hopefully, in the anticipated direction. So it means you don’t need to be there at that exact time because you can put the buy limit on, the market pulls back, triggers the trade.
Even if it doesn’t—it just takes off—then you miss the trade. And I think that’s, again, an important thing because we have coaching clients in 109 countries—everybody on different time zones, different works and family and everything else going on in busy lives. But most people should be able to trade, like, 10–15 minutes once a day.
And I think that’s the important thing—you don’t have to be there glued to charts. Because for me, like, trading your time zone—it’s like 2:00 in the morning. I’ve got better things to do at 2:00 in the morning than sit looking at charts.
And, you know, so I think it’s important that people focus on trading less but trading better quality.
Diana Perkins, CPA
Yeah. You know, I would say one of the biggest mistakes in trading is that you need—and I always got this question all the time when I was learning trading and first getting into coaching—“Diana, how many screens do I need?” I say, “One screen and a very reliable internet connection.”
But, right—just like you said—through limit orders or even through bracket orders, right—set it and forget it. You have your entry point, which—right—limit order or a limit, and then your sell stop, which—stop-loss. So yeah, it’s advanced order types, but it’s so simple: three legs. If it triggers, you’re in.
If it doesn’t, then it probably wasn’t meant to be because it’s not moving in your direction or it’s not the price that you need to follow the reward-risk. But then once you’re in, you can sit on it. It hits your target—you’re up. Or, you know, it hits your stop loss—your personal loss—and life.
And I think that’s so important. You know, a lot of my traders—they’ll do their analysis on a Sunday, for example. And typically the analysis involves looking at the broad market—so the S&P, Nasdaq, Dow—for equities; sectors—what’s relatively strong, what’s relatively weak. And then essentially a filter of individual stocks—they go on a watchlist. Market opens, you monitor your watchlist. But just like you said—10–15 minutes a day.
The rest—overtrading. I think the statistic, loosely, is, you know, 95% of day traders lose money. And I actually tried the other day—I think it was actually on just, like, the S&P. I had a short-term trade, a day trade, and I was just going to be in it for a few hours.
And I was watching every tick, and I wanted to rip out my hair. It’s just not how I trade; it’s not how I roll. I don’t know why anyone would do that to themselves. Do your analysis up front, know your numbers, know your risk tolerance, know your timeframe, and then place the trade—and let the strategy work.
Enjoy your trading.
Andrew Mitchem
It’s quite interesting—we’ve both been in the various markets for a long time, and we both look happy, and we’re smiling and we’re enjoying it. And I’m sure a lot of it is because we figured out that we shouldn’t be just glued to the charts because, you know, I think we both find it enjoyable and we look forward to each week starting because of, almost like, the lack of time that we spend doing it.
I think if you are glued to it—ten hours a day—you just need to do something else. And I think that’s where so many people go wrong. Or they go, “I’ve got a full-time job” or “I’ve got lots of kids, I can’t do it.” And it’s like, yes, you can. I’ve got five kids. You know, I’ve been trading through raising five kids. You can do it. You can travel and do this; you can have a job and do this. And I think that’s where so many people think that’s not possible.
Diana Perkins, CPA
It’s so true. I mean, when I started trading about 15–20 years ago, I was working full-time, and it was a very demanding job. And that’s where the bracket orders I was talking about—so many of the traders that I work with now, you know, we meet at odd hours of the day and evening, and it’s all working around those schedules.
And they’re looking for that freedom. And they’re not—they’re not greedy—but they love the flexibility. There’s a passion. I always say, like, when you’re a trader, it’s in your blood. Like no one—even now, my family—“We don’t know what you do.”
Andrew Mitchem
You know, I get the same.
Diana Perkins, CPA
But you just know. And, you know, I’ve worked with options traders, you know, forex traders—yes, there’s that element of risk and you have to set expectations. If you’ve done it for a while like we have, you know, you’ve taken some punches to the chin. But then you come back up, you learn about risk management, and you find a way to be consistent if you want long term. Because if you have a 50% drawdown, you’re going to have to make 100%…
Andrew Mitchem
To get it back again.
Diana Perkins, CPA
That’s right.
Andrew Mitchem
Yeah, people don’t get that simple number, but it’s so true. Yeah. So, Diana, what’s the—like, there’s a couple questions here. What’s the pain point that people have when they come to you? What’s going wrong, or what do they need to fix when they come to you? And also, I suppose the second question is—with the way the cost of living and inflation is—it doesn’t matter where you live in the world these days. What’s the downside of not doing something like we’re doing? Like, what’s going to be the result in five, ten years if you don’t do anything also?
Diana Perkins, CPA
Yeah. So I think both great questions. So the biggest challenges I see—and there’s actually a bit of a spectrum. I work with—I run workshops for those completely intimidated by the market. You know, they don’t even know where to start. So it’s not just “where”—it’s “why do I need to invest?” “I don’t understand the terminology.” And so I run through all of that, and then just the tactics of opening a brokerage account, and then I’ll share some initial investments to start with.
And I have students in those classes who start at zero knowledge of the market. By the end of it, that day they’re opening brokerage accounts—some placing their first trades for the first time in their lives.
So that’s for my newbies. And then my advanced traders and professional traders—so many things, but I’ll say the number one is around discipline. “Hey, can I tell you about this trade? You know, it hit my profit zone, but then it turned over. Should I take my profits early?” I say, “Okay, you can take your profits early—so you can take your losses off early too? Because otherwise your losses are going to cut into those profits.”
And we talk about that discipline in trading. Others will come to me when—and I had this issue when I first started trading, too—I was a bit too conservative. Now, the counter to “you need money to make money,” I was breakeven for a long time. Right? And so for more experienced traders, they either—well, almost all—have drawn down or account to zero. So risk management—I think of that first.
And then the other is they’re sitting at breakeven and they want to break through. So it could be new strategies, looking at their risk management, their strategies, their trading plan, or even exploring new options strategies or timeframes—things like that. It’s so different for each. But yeah—risk management and just getting started—probably two of the biggest ones. And then just that discipline—like, they know what to do, but applying it—very different. I’d say that for the first part of your question.
Andrew Mitchem
And the cost of living—doing nothing?
Diana Perkins, CPA
Passive income—very expensive right now. I think dealing a bit with the aftermath from Covid—an inflationary environment. But when we look at where we place our money—and there are some folks who might be saying, “I don’t have money to invest. Are you crazy?” But the idea is—whatever it is—even if it’s, you know, $50 a month.
We talked about compounding earlier. Yes—if you keep it in a savings account or checking account—inflation 2–3% per year, typically—you’re losing money. If you have the high-yield savings—again, you’re still just about at par. Putting your money in the stock market over time—that’s, like we talked about before, that’s where you build wealth.
And you start with—let’s start with what you have, where you are. And that’s how I was able to leave corporate. I had—I don’t remember the number now—but I had a set amount each month that I could afford. And I put the savings into the market, and then I checked it, you know, ten years later and I quit my job the first time.
So it’s so important. You don’t need to start with thousands, but you want to start. And I know you have perspective on that as well.
Trading via a Prop firm.
Andrew Mitchem
Yeah, it’s the same thing. It’s like, you know, I mentioned earlier, I think it’s important to learn the how to do something. Because in the forex market, you could trade your own money, you potentially could trade someone else’s. But we have prop firms as well. And prop firms allow you to trade other people’s money once you’ve proven that you can do it within drawdown criteria for profit share.
And so that’s been around for maybe five years—tops, really. There’s been quite a lot more companies in the last few years. And a lot of my clients do end up trading through prop firms because, like you said, people go, “Love what you do, want to do it, but I don’t have enough money.”
And it’s like, you can either—like you said—put a small amount in and learn how to do it, or you could go through to a prop firm and work on a profit share. And I think that’s been a real game changer for a lot of our clients as well because you don’t need to have, you know, $100,000 yourself.
And even if you had $100,000, you might want to still trade the prop firm money and, you know, a lot less of your own.
Knowing that you have the knowledge to trade for yourself.
Andrew Mitchem
So there’s options out there for people. One of the other things I think is so important—and again, it comes back to that mental aspect—it’s having that comfort and that knowledge that you can do this for yourself.
You know, through learning through you or learning through us. And I think that’s something that is massive. I love that knowledge and that comfort—that almost feel-good of “I don’t have to go and hand my funds over to someone I’m never going to meet or know or know what they’re doing with my money.” I have complete control.
I have the knowledge up here of doing what I want, when I want, and how much I risk or not. You know, that whole control—self-control—I think is massive. You can’t underestimate how important that is.
Diana Perkins, CPA
I completely agree. So, especially during Covid—if we go back five years—there was, you know, all over the news, cases about the democratization of trading and the markets. And a lot of folks during that time—right—maybe they lost their jobs or wanted to start something new, or now they’re home. So they go, “What do I do with my time?” And there were so many new entrants to trading as retail traders. Yeah.
And so it’s more accessible than ever before. And one of the things that I’ve learned since starting my business—I’ve actually met a lot of wealth managers, advisors who are picking my brains, and they’ve told me a lot of the younger generation don’t trust advisors, I guess. And so they want to learn themselves.
And so we’ve talked about partnerships, and I’ll sometimes say, you know, it’s empowering—just that education, learning how to do it yourself. You know, when you’re older—tax strategy, retirement strategy, estate—you know, all of that. Maybe you pivot—or maybe you don’t.
But just having—just like you said—just having that knowledge and debunking the myth that trading and the financial markets are just for Wall Street. I don’t see, you know—there’s no Wall Street there for Main Street to open a brokerage account in 20 minutes, start with $10, you know, invest in an index fund, or learn, you know, currency trading through an established program and a system that you can plug into.
And that’s how I—I worked for that firm, the nine-month program, met the partners in Vegas, and then I started working internally and coaching and mentoring their traders. And you just—you have to empower yourself that way, even if nothing else—just the terminology and understanding how it works. Because money is so central to our everyday lives.
Andrew Mitchem
Whether we like it or not. It is.
Diana Perkins, CPA
Yes. Yeah.
Contact Diana
Andrew Mitchem
I have no choice in that one. Diana, how would someone contact you? What’s the best way of getting in touch with you?
Diana Perkins, CPA
I can be reached through my website—it’s tradingwithdiana.com. You can schedule a free call, sign up for my free newsletter, and go from there.
Andrew Mitchem
Awesome. It’s been so enjoyable chatting with you, and I think that we’ve got so many similarities with what we do and why we do it as well. I think that it’s the why we help and teach as well that’s really important. But thank you so much for your time. I’ll put links here to your website as well, and people can contact you. Thank you very much for your time today, and we’ll keep in touch.
Diana Perkins, CPA
Sounds great. Thank you so much for having me on.
Andrew Mitchem
Awesome. Thank you.
Episode Title: #608: Build Confidence & Consistency in Trading with Diana Perkins & Forex Coach Andrew Mitchem
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Build Confidence & Consistency in Trading with Diana Perkins & Forex Coach Andrew Mitchem
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Find out more about Blueberry Markets – Click Here
Find out more about my Online Video Forex Course
Book a Call with Andrew or one of his team now
Click Here to Attend my Free Masterclass
#608: Build Confidence & Consistency in Trading with Diana Perkins & Forex Coach Andrew Mitchem
In this video:
00:31 – My trading chat with Diana Perkins.
00:56 – Andrew & Diana trade different markets but share a common philosophy.
04:15 – Risk management and psychology.
05:27 – Removing the hype around trading.
13:15 – Lot size, risk, demo and live trading.
19:14 – Technical trading and News Trading.
22:05 – Trading FX, Metals, Indices, Cryptos and Commodities.
25:15 – Using currency Strength and Weakness.
27:07 – Fitting trading around your lifestyle.
32:05 – Enjoy your trading.
38:20 – Trading via a Prop firm.
39:25 – Knowing that you have the knowledge to trade for yourself.
42:22 – Contact Diana
Andrew Mitchem
One of the best ways for you to learn how to trade properly is to listen to conversations between experienced traders. So today I’ve got something really special for you. Just yesterday I had a chat with Diana Perkins from Trading with Diana. We trade different markets, but we both share the same philosophy, and it’s going to help you massively.
Andrew Mitchem
Let’s get into that more right now.
My trading chat with Diana Perkins.
Andrew Mitchem
Hey traders, Andrew here at The Forex Trading Coach with video and podcast number 608. For 40 minutes you’re going to get absolute gold with my interview with Diana Perkins. Let’s start straight away. Everybody, it’s Andrew Mitchem here at The Forex Trading Coach. Absolutely thrilled today to be joined by Diana Perkins from Trading with Diana. Welcome along, Diana. Nice to see you so much.
Diana Perkins, CPA
And thank you for having me.
Andrew & Diana trade different markets but share a common philosophy.
Andrew Mitchem
Awesome. Well, look, we got put together because I think someone thought that we would have a great education and insight to help people, because although we do slightly different things, I think our philosophy of trading and helping people is something that will align really well for people watching and listening to this. So maybe first of all, Diana, if you could introduce yourself, who you are and what you do.
Diana Perkins, CPA
Absolutely, and I agree with the person who connected us. I’m really excited for this conversation. So, Diana Perkins, I’m the founder of Trading with Diana, which is an educational platform where I teach everyday people how to trade the market with confidence. I do this through workshops, personalized coaching, and newsletters, and it’s honestly the best part of my day.
I spent a good part of my career trading and mentoring and coaching others in the space, and recently launched my own business so I can do this full time.
Andrew Mitchem
Awesome, awesome. So, when you coach people, what kind of markets do you generally look at? What do you help them with?
Diana Perkins, CPA
Yeah, it’s typically the US equity market and we’re focused on stocks, ETFs, you know, some index funds and, for a small subset—although it’s growing—options trading, which I don’t normally market. But I did used to be a professional options trader. I love it. There’s so much that you can do with stock options. So focus in those areas.
But it’s really all market conditions, which brings up—I actually just spoke with a trader this morning about that—just looking almost, you know, the last nine months in review, but all different market conditions across all different sectors. It’s really a flexible approach. And you’ll hear me say that investing, it’s very individual.
Andrew Mitchem
You know, I was reading your background about how you started when you were young with charging—I think it was the interest—some borrowings and things like that, and it was like, that was really cool. I love that whole story. So I’m guessing you’ve been into, like, the financial industry or business for most of your life?
Diana Perkins, CPA
Yeah, absolutely. So as long as I can remember, I was a numbers girl. At eight years old, I learned what compound interest was, and when my family found out I had a little bit of, you know, petty cash, they started asking me for money. So I charged interest because that money could have been earning interest in the bank account.
So, yeah, from an early age, I always knew finance was my passion. Throughout my career, you’re right, I spent about 20 years in various roles in the finance industry. But it was really a class I took in college where we had a virtual stock exchange competition. I’m very competitive by nature, and I wanted to win in order to understand what moves the markets.
And so that’s how I learned. I knew this is what I wanted to do, but I wanted to do it on my own terms—if you want. But, so what I did is I got my finance and accounting degree, my CPA, did corporate job, and then ten years in, I went out on my own to learn how to trade stock options and never look back.
Risk management and psychology.
Andrew Mitchem
So that’s interesting because I’m guessing with that kind of background, you learned either the hard way or straight away about risk as well, because I find it interesting that, you know, we’re in—especially myself in the forex market predominantly—we’re in this industry where people think risk is like, you know, they have to risk everything, or “I don’t want to do it because it’s too risky.”
I’m guessing that we’re both completely the opposite, and we’re both very conservative and risk-averse in how we trade. And I’m guessing that with your business, it’s the same thing.
Diana Perkins, CPA
Yes. I would say that’s an area where we’re probably very similar—where it’s not—but risk management, that’s what keeps you in the market long term. Yeah. Really kind of the sexy side, I think, of trading, which is why I think a lot of trading education or, you know, just when I say that, I say it loosely—like YouTube videos and things that, you know, the masses are looking at—they don’t really hone in on that as much. Like 80% discipline and mental and managing our emotions in trading and sticking to a structure and plan and building that consistency over time.
Removing the hype around trading.
Andrew Mitchem
Yeah, and like you brought the word emotion into that. I think that’s such a—I’ve always said to people when they start, there’s two things you’ve got to control. One’s up here and the other’s in here—your head and your heart. Your emotions are such a massive part of trading.
And I see the danger, you know, with YouTube, TikTok, and Instagram—all that type of thing—you know, there’s a little bit of okay information out there. There’s obviously a lot of bad information. People always show you the flashy red Ferraris and the private jets and “look what I did on this trade, I made 50%,” but we both know that behind the scenes, that’s not real.
But unfortunately, a lot of people get, I suppose, caught up in that roller coaster of thinking they’re going to make a fortune straight away. And I noticed on your site—and there’s one thing I also say—you had a section on there “who this is not for,” and I thought that was really interesting and good because we’re both upfront and honest. We’re here to help teach you, but if you want some ridiculous, you know, gain, you’re not going to get it with us.
Diana Perkins, CPA
That’s right. That’s absolutely right. And I think a lot of what’s out there—I agree—there are a lot of folks who want to say how, you know, they see that one story, like you said, with the Ferrari, right? “Oh, I want that. How do I get that easily and quickly?” Yes. It’s true—like anything in life—you need to put in the investment upfront, and it’s not even, you know—I mean, some of it, yes, dollar-wise—but the investment of time and your energy to really learn how to do it right.
And I think there’s like this misnomer out there that—and you do need to make that investment—but you don’t need, you know, millions to start. You don’t even need thousands to start. I mean, right. And I have a feeling you and I could get really into this, but right now the markets are more accessible than any time before.
Right. You can open an account in, you know, 15–20 minutes. You can start with dollars. You—you know, you can’t afford a $500 share of Microsoft? You can buy a fraction share on many of these platforms. So it’s so accessible. But you do need to make that investment upfront on education because you don’t want to get whiplash.
And you don’t want to lose money in a trade because you put in the order backwards. You know, you want to do it because maybe you called the market wrong. So, so many learnings—I’m sure you could attest as well, having been, from what, 15 years.
Andrew Mitchem
So would it be fair to say that it’s the learning how—like the how to do it—that is the most important thing right now when someone starts, or even if they’ve been doing it for a long time and have failed? It’s the learning properly, the “how to.” Because I say to people, if you do that upfront, forget about the next six months or even the next year. You know, use that time as your learning process—your learning phase.
And if you do that right, then afterwards things will be really good, you know, financially. But do that groundwork—that hard work—upfront. Learn how to do it properly and to a low risk. Learn what sort of person and trader you are, and the results will follow.
Diana Perkins, CPA
Yes. And actually that last piece that you just mentioned—learn the type of trader that you are. We all have a different and personal relationship with money. And when it comes to trading—and I talk to a lot of my traders about this—many times they’ll say, “I feel like you’re a life coach in addition to my trading coach,” because back to—you know, because it does involve risk.
So yes—so yes, the “how to” is very important, and I run workshops just on those tactics. But I would argue that trading and being successful in trading long term is probably 80% psychological. So when you just said “it’s the type of trader you are, the type of investor you are, that relationship,” and then determining, okay, how do I want to trade?
What are my goals? You know, how much am I willing to risk? You know, just make sure you have answers to all of those questions before you place your first trade.
Andrew Mitchem
Absolutely. And do you encourage people to start on demo accounts, or do you go straight into smaller live accounts? How would someone start with you?
Diana Perkins, CPA
Yeah, great question. So I do work with a contingent of aspiring professional traders—options and forex—and every one of them are required to trade on a demo account. So absolutely, yes for those folks.
For my beginner traders who are just dabbling, I do encourage a demo account. If they don’t trade in a demo account, then I always encourage to start small—very small.
Number one rule: don’t trade anything you can’t afford to lose. And then number two: never take the big loss. Right? So there are some that just dabble. Because there is a different—going back to the mindset—it is different in demo versus live.
And then finally, I’ll say probably with my most experienced traders—I mean, I will say I get on coaching sessions and I’m teaching a new option strategy and they’re placing the trade right there live. I say, “Oh, well, why don’t we try that, you know, in demo first when it’s a new strategy?” And this time a new, you know, even position sizing as your account grows?
I had that question recently from a trader—“You know, get your feet wet. You’re trading with a significant amount of capital to you,” right? First of all, get your feet wet first. And then when you feel confident, then go in your live account. So long story short—for the most part yes, although some folks who are just, you know, dabbling in news, sometimes they might try a little bit with live to get their feet wet or to build their confidence.
And then we go in and we talk about all the elements you mentioned before—the real meat of the “how.”
Andrew Mitchem
Right now, the way that we teach people—and again, it’s personal because it’s up to each person what they determine risk and amount of money—I personally, for my own trading, I trade at half of 1% of my account risk per trade. If I trade on prop firms where you can trade on other companies’ money for profit share, I’ll go down to a quarter of 1% risk per trade.
And sometimes that’s even split over two trades—two positions. So it’s very, very small amounts because, like you said, it’s the psychological—the mental aspect is so huge. And I think it’s also important that you control that risk so you’re not frightened to take that next trade.
Like if you have a loss, that loss, I think, should be acceptable for you. If you see the position at the time, and it meets your criteria and you take the trade and it goes against you, then you shouldn’t be scared about getting into the next trade because—providing those criteria are right and the market goes against you—well, that’s sometimes what happens.
So I think that real low risk, low drawdown is crucial for people to almost, like, trade mentally. Because I think, unless people really get into it, that whole aspect of live trading and the emotions is so important to get right.
Lot size, risk, demo and live trading.
Diana Perkins, CPA
Absolutely. And there’s so much, I feel, to unpack there. And, you know, position size in every trade—typically with traders, we’ll talk about 1 to 2%. But the half percent, quarter percent—you know, the other side of that is how many positions do you have on.
Andrew Mitchem
That’s right.
Diana Perkins, CPA
Yeah—broader your portfolio risk. So there’s this analogy that I share with my traders, and it hits on just what you’re talking about. You don’t want one loss, you know, mentally, to make you so fearful you don’t want to get back in. Yeah.
And so there is this analogy of ten trades. And the idea is you have a portfolio of trades—and it can be currencies, it can be US stock options, you know, whatever it is—whatever you’re trading. You have ten positions on at a given time, and you go in and you have your—ideally you have your trading plan and position size either to max loss of options or you have a stop loss. You know, so you’re managing your risk in all ten trades.
You do your analysis; you approach it right. The reality, though—going in—start with the mindset: even though maybe you did everything right and followed the system and plan, you’ll probably have at least two to three of those trades come out as a loss. Maybe—and I’ll call it three to five, right—will be, you know, small loss or small gain.
Andrew Mitchem
Yes.
Diana Perkins, CPA
And the three—ideally more on the upside if you’re playing probabilities and charting—but we’ll just call it two to three winners, right? And you want to make those up because they’re going to pay for your losers. And what I see a lot are traders that want to get out of their winners early because they’re working through—and that’s where that emotional discipline comes in, which I’m sure you could speak to, with your experience.
Andrew Mitchem
Yeah, we see exactly the same thing. And that’s why with the strategy that I’ve developed, profitable trades—like a broad range—would be between a 2-to-1 reward-to-risk and about a 4-to-1. So, in other words, if you were risking 1%, you make 2, 3, 4%, depending on the individual trades.
And so I think that’s really important because, as you said, you’re going to have some little losers and then, you know, bigger gains, and you kind of step your way up. When you look at it, it’s not an equity curve as such—it’s more of a—I look at it as like a ladder. You know, little losses, bigger gains; little losses, gains.
And I seem to think that that’s how people progress well. And then we talked about compounding as well before we started. You know, getting people to understand the power of compounding is huge as well. And I think a lot of people—you know, it’s a very simple concept—but I think a lot of people don’t know how powerful it can be, both when you’re making money and also when you’re losing money, because your risk is therefore the same percentage but a smaller monetary value. So, yeah—compounding, time—they’re both very powerful things.
Diana Perkins, CPA
Can really—I mean, compounding, that’s how you build wealth. There’s a lot of work for building wealth with confidence. And the first—and this is for folks completely intimidated by the markets—“Where do I start?” And I always start with, “Why even invest?”
Yes, I have a chart for $50,000, and there’s two lines on this chart: $50,000 over 30 years sitting in the S&P 500, and it’s over $800,000 of profit. Sitting in—of course I use the traditional savings on the flip side—and it’s about $8,000 over the same amount of time.
Now, steady returns, which we know—since 1928—random stat, but the S&P has averaged about 9 to 10% per year. But it’s actually interesting: when you look at the average between 8% and 12% annual return, it only happens about 20% of the time.
And so I think a lot of folks see it as really volatile because you tend to remember some of those really down years, or others—really great years that the S&P returned, you know, 25–30% or more. Yeah. I’m with you—compounding really makes all the difference, and that’s how you build wealth. You won’t do that in a traditional savings account.
High-yield savings around 4%—you know, similar concept for maybe emergency fund. But the financial markets—that’s really where it is. The other thing that you mentioned is reward-risk. So 2-to-1 to 4-to-1—excellent. Yeah. So typically we target around 2-to-1, although it is swing trading; it’s shorter term. But you have that key concept: you want to make more on your winners than your losers. So even if batting like a 50–50 win-loss, you’re going to come out ahead.
And that’s really the key to win-based. You know, once in a while, you know, making an earnings play or, you know, non-farm payrolls, or, you know, a Fed—maybe, you know, you might play a certain economic report, corporate earnings. It stops and really try to, you know, get those home runs. But even those also sometimes throw into the 1% risk—like you think, you know, right? Half a percent or 1%—I’ll cut that on those that feel more speculative than what the other 95% of my trading is. So nice.
Technical trading and News Trading.
Andrew Mitchem
So we’re technical trade—I’m a technical trader. I look at charts. Yes, I’m aware of, you know, news events. Like you said, the non-farm payrolls or employment change, I think it’s called these days. But all those type of things—we’re aware of them. But I personally trade and teach as a technical trader.
Do you do something similar with candle patterns, and is that how you teach people to look for certain positions?
Diana Perkins, CPA
Yep. Yes. So I would say—I think there’s definitely a place for both technical and charting and fundamental analysis. I think they work hand in hand. But primarily I teach—and what I focus on with my students—is technical analysis. And the reason for that is: focus on swing trading, swing timeframe. So anywhere from, well, a few days up to maybe 7 to 8 weeks on the long end.
Most of my traders around 2 to 3 weeks. Most of my strategies—actually no, about 4 or 5 weeks, which is definitely on the longer end. But because of that, momentum trading—technical analysis. However, there’s always a fundamental check before going into any trades. So looking at things like earnings announcements; if I’m not as familiar with the industry or that specific company, you know, looking at its competitive positioning, analyst reports—what are some of the targets—recent earnings.
And I always do a scan on news to understand, okay, what’s more current? Is there M&A activity? Their product lines? What are their competitors doing? So I run through all of that before I put on the trade. But everything up to that point is technical analysis through top-down.
And I would love to hear more about your system and how you do selection as well.
Andrew Mitchem
Yeah, sure. So, although we’re called The Forex Trading Coach, over the last number of years we’ve had access on our trading platforms to more markets like the indices. In fact, I took an S&P 500 buy trade yesterday, which was profitable for our clients. But we can trade the indices, the metals, commodities, cryptos, and of course the currencies.
But the way that I trade them—they’re all taken the same way. I’m looking at a chart, and it could be the Euro/US dollar, or it could be the S&P 500, or it could be Bitcoin. And to me, it doesn’t matter what I’m trading. It’s more: does it have the technical setup to move in either a, you know, bullish or bearish direction depending on which way I’m trading.
So—and of course when I started and worked this out into a system—because it took me four years of going around in a circle, you know, losing money, buying different ideas and systems and getting nowhere. And so about 18 years ago things came right; 16 years ago we started coaching.
Trading FX, Metals, Indices, Cryptos and Commodities.
Andrew Mitchem
But obviously back then, cryptos didn’t exist. We couldn’t trade metals; we couldn’t trade indices. So what’s been really pleasing is because we’re based on sound technical analysis and looking at candle patterns and where they occur on the chart—have they got room to move to the profit target? We look at round numbers—like, you know, strong levels, price levels. And by the way, I find that so many people fail to look at the price of something they’re buying or selling.
You know, can you have your stop loss protected by a 00 number? Things like that. So we quite heavily look at the actual price. A lot of forex traders just fill their charts with clutter of lines, and it looks like spaghetti on the charts—lines and dots and arrows—and they actually don’t look at the price.
But simple candle patterns and analysis can work, I find, across all markets. We don’t look at news as much as you sound like you do because of the nature of predominantly the markets we’re trading. You know, we’re aware of the main events like an interest rate or employment data, but we don’t specifically— I don’t especially—trade them.
I prefer technical analysis because you could have something affecting the US market, let’s say. What if I’m trading the Euro against the New Zealand dollar? It’s completely irrelevant, well, you know, in most circumstances, what’s happening in the US market. Or if I’m trading the Australian against the yen, what happens out of the UK or Europe—it’s pretty much irrelevant.
So I find that in currency trading, a main news event is only relevant if you’re trading that currency. So the British—if you’re trading the British pound and there’s something out of the UK—obviously that would affect, more likely, what you’re trading. Or you don’t trade until that news event’s finished. But predominantly we’re candle patterns and technical traders.
Diana Perkins, CPA
Well, and I love what you said about keeping it simple. I’ve definitely worked with traders and there’s, you know, you know, Fibonacci retracement, and there are all these different indicators. And, you know, price and volume—primary indicators—start there.
And you bring up an interesting point too around pairs trading. So there was a stint about 15 years ago where I did dabble in forex, and I loved the concept of pairs trading so much I actually do apply that to my stock and options trading.
Okay—within a sector I make—you know what, energy is a good sector to do this because it’s—I think, you know. So anyway, basically you look at relative strength, and you have a stock that’s outpacing the S&P—you have a bullish strategy on that particular company stock—and then you want that relative weakness within the same sector. So if there’s a sector rotation, you’re making trades right for one another.
Using currency Strength and Weakness.
Andrew Mitchem
So you could use sectors in the way that I use, like, the Euro or the US for strength and weakness because—you know, we’ve got trades setting up very shortly in half an hour. And I was looking today for a sell trade on the Euro/yen; it just happens to be looking like a reasonable trade.
But then I’ve gone again—I’ve looked at the Euro against the US and against the Aussie and the Kiwi and the Canadian—and the Euro is looking really, really strong. So by looking at strength and weakness, it can actually keep you out of losing trades because although this Euro/yen looks like it’s dropping, the Euro is strong against every other currency.
And so I tend to stay away from taking a sell trade on the Euro/yen today because I’m trading against the overall predominant strength of the Euro. And I think when you blend that with your chart analysis and your strength and weakness analysis, it can actually help you to avoid losing trades as well.
Diana Perkins, CPA
Yeah. And if we zoom out, it’s a different perspective. And similar to what you were saying before with charting—one of the great things about it, whether you’re trading cryptocurrencies, ETFs, stocks, commodities, currencies—right—it’s transferable or translatable across different asset types.
And I would say the same thing. And I’m actually a little curious about this—so I mentioned swing trading timeframe is my sweet spot. I see with charting, right, you can go to a 15-minute, 30-minute, hourly timeframe and trade on that, or you can buy and hold and go heavy on the fundamental. I would love to hear more about your approach, just in terms of timeframe and how you look at that technical analysis.
Fitting trading around your lifestyle.
Andrew Mitchem
Yeah, definitely. So I use a phrase of, “There’s no prizes for trading.” Because everybody thinks they need to be looking at short timeframe charts, and the reality is you don’t—and you should probably do the opposite.
So as an example, tomorrow it’s the 1st of October. And so we’ll be going through the monthly charts for the September close and looking at those on longer timeframe charts for October trades. The beginning of each week we look at weekly charts, and every day we look at the daily charts.
And so that’s the 5 p.m. New York close. And so we make the analysis of where we see trades based off those closes of the daily charts. At the same time, at the 5 p.m. close, we can also go through and look at, like, 12-hour and 8-hour and 6-hour trades. So we look at those shorter timeframes as well because they all close at the same time.
My other personal favorite time to trade is 5 a.m. New York time. No, not great for you. But you don’t have to be there at that exact time. But at that time, the 12-hours change over as well because obviously it’s 5 p.m., 5 a.m.—two lots of 12-hour charts.
And so I find that those are the two best times to trade. If I had to pick—like, you know, someone’s working full-time or traveling, like, we’ve just spent a month traveling around the US—I traded once a day at 5 p.m. And it doesn’t matter whether you put the trade on at 6 or 7 or 8 because we use limit orders. We don’t trade at the market so much.
I use a buy limit. So if I see a bullish pattern, I will take a buy limit to buy below the current price. So in, you know, markets—things move up and down—and it comes back down below my buy limit and then goes up, hopefully, in the anticipated direction. So it means you don’t need to be there at that exact time because you can put the buy limit on, the market pulls back, triggers the trade.
Even if it doesn’t—it just takes off—then you miss the trade. And I think that’s, again, an important thing because we have coaching clients in 109 countries—everybody on different time zones, different works and family and everything else going on in busy lives. But most people should be able to trade, like, 10–15 minutes once a day.
And I think that’s the important thing—you don’t have to be there glued to charts. Because for me, like, trading your time zone—it’s like 2:00 in the morning. I’ve got better things to do at 2:00 in the morning than sit looking at charts.
And, you know, so I think it’s important that people focus on trading less but trading better quality.
Diana Perkins, CPA
Yeah. You know, I would say one of the biggest mistakes in trading is that you need—and I always got this question all the time when I was learning trading and first getting into coaching—“Diana, how many screens do I need?” I say, “One screen and a very reliable internet connection.”
But, right—just like you said—through limit orders or even through bracket orders, right—set it and forget it. You have your entry point, which—right—limit order or a limit, and then your sell stop, which—stop-loss. So yeah, it’s advanced order types, but it’s so simple: three legs. If it triggers, you’re in.
If it doesn’t, then it probably wasn’t meant to be because it’s not moving in your direction or it’s not the price that you need to follow the reward-risk. But then once you’re in, you can sit on it. It hits your target—you’re up. Or, you know, it hits your stop loss—your personal loss—and life.
And I think that’s so important. You know, a lot of my traders—they’ll do their analysis on a Sunday, for example. And typically the analysis involves looking at the broad market—so the S&P, Nasdaq, Dow—for equities; sectors—what’s relatively strong, what’s relatively weak. And then essentially a filter of individual stocks—they go on a watchlist. Market opens, you monitor your watchlist. But just like you said—10–15 minutes a day.
The rest—overtrading. I think the statistic, loosely, is, you know, 95% of day traders lose money. And I actually tried the other day—I think it was actually on just, like, the S&P. I had a short-term trade, a day trade, and I was just going to be in it for a few hours.
And I was watching every tick, and I wanted to rip out my hair. It’s just not how I trade; it’s not how I roll. I don’t know why anyone would do that to themselves. Do your analysis up front, know your numbers, know your risk tolerance, know your timeframe, and then place the trade—and let the strategy work.
Enjoy your trading.
Andrew Mitchem
It’s quite interesting—we’ve both been in the various markets for a long time, and we both look happy, and we’re smiling and we’re enjoying it. And I’m sure a lot of it is because we figured out that we shouldn’t be just glued to the charts because, you know, I think we both find it enjoyable and we look forward to each week starting because of, almost like, the lack of time that we spend doing it.
I think if you are glued to it—ten hours a day—you just need to do something else. And I think that’s where so many people go wrong. Or they go, “I’ve got a full-time job” or “I’ve got lots of kids, I can’t do it.” And it’s like, yes, you can. I’ve got five kids. You know, I’ve been trading through raising five kids. You can do it. You can travel and do this; you can have a job and do this. And I think that’s where so many people think that’s not possible.
Diana Perkins, CPA
It’s so true. I mean, when I started trading about 15–20 years ago, I was working full-time, and it was a very demanding job. And that’s where the bracket orders I was talking about—so many of the traders that I work with now, you know, we meet at odd hours of the day and evening, and it’s all working around those schedules.
And they’re looking for that freedom. And they’re not—they’re not greedy—but they love the flexibility. There’s a passion. I always say, like, when you’re a trader, it’s in your blood. Like no one—even now, my family—“We don’t know what you do.”
Andrew Mitchem
You know, I get the same.
Diana Perkins, CPA
But you just know. And, you know, I’ve worked with options traders, you know, forex traders—yes, there’s that element of risk and you have to set expectations. If you’ve done it for a while like we have, you know, you’ve taken some punches to the chin. But then you come back up, you learn about risk management, and you find a way to be consistent if you want long term. Because if you have a 50% drawdown, you’re going to have to make 100%…
Andrew Mitchem
To get it back again.
Diana Perkins, CPA
That’s right.
Andrew Mitchem
Yeah, people don’t get that simple number, but it’s so true. Yeah. So, Diana, what’s the—like, there’s a couple questions here. What’s the pain point that people have when they come to you? What’s going wrong, or what do they need to fix when they come to you? And also, I suppose the second question is—with the way the cost of living and inflation is—it doesn’t matter where you live in the world these days. What’s the downside of not doing something like we’re doing? Like, what’s going to be the result in five, ten years if you don’t do anything also?
Diana Perkins, CPA
Yeah. So I think both great questions. So the biggest challenges I see—and there’s actually a bit of a spectrum. I work with—I run workshops for those completely intimidated by the market. You know, they don’t even know where to start. So it’s not just “where”—it’s “why do I need to invest?” “I don’t understand the terminology.” And so I run through all of that, and then just the tactics of opening a brokerage account, and then I’ll share some initial investments to start with.
And I have students in those classes who start at zero knowledge of the market. By the end of it, that day they’re opening brokerage accounts—some placing their first trades for the first time in their lives.
So that’s for my newbies. And then my advanced traders and professional traders—so many things, but I’ll say the number one is around discipline. “Hey, can I tell you about this trade? You know, it hit my profit zone, but then it turned over. Should I take my profits early?” I say, “Okay, you can take your profits early—so you can take your losses off early too? Because otherwise your losses are going to cut into those profits.”
And we talk about that discipline in trading. Others will come to me when—and I had this issue when I first started trading, too—I was a bit too conservative. Now, the counter to “you need money to make money,” I was breakeven for a long time. Right? And so for more experienced traders, they either—well, almost all—have drawn down or account to zero. So risk management—I think of that first.
And then the other is they’re sitting at breakeven and they want to break through. So it could be new strategies, looking at their risk management, their strategies, their trading plan, or even exploring new options strategies or timeframes—things like that. It’s so different for each. But yeah—risk management and just getting started—probably two of the biggest ones. And then just that discipline—like, they know what to do, but applying it—very different. I’d say that for the first part of your question.
Andrew Mitchem
And the cost of living—doing nothing?
Diana Perkins, CPA
Passive income—very expensive right now. I think dealing a bit with the aftermath from Covid—an inflationary environment. But when we look at where we place our money—and there are some folks who might be saying, “I don’t have money to invest. Are you crazy?” But the idea is—whatever it is—even if it’s, you know, $50 a month.
We talked about compounding earlier. Yes—if you keep it in a savings account or checking account—inflation 2–3% per year, typically—you’re losing money. If you have the high-yield savings—again, you’re still just about at par. Putting your money in the stock market over time—that’s, like we talked about before, that’s where you build wealth.
And you start with—let’s start with what you have, where you are. And that’s how I was able to leave corporate. I had—I don’t remember the number now—but I had a set amount each month that I could afford. And I put the savings into the market, and then I checked it, you know, ten years later and I quit my job the first time.
So it’s so important. You don’t need to start with thousands, but you want to start. And I know you have perspective on that as well.
Trading via a Prop firm.
Andrew Mitchem
Yeah, it’s the same thing. It’s like, you know, I mentioned earlier, I think it’s important to learn the how to do something. Because in the forex market, you could trade your own money, you potentially could trade someone else’s. But we have prop firms as well. And prop firms allow you to trade other people’s money once you’ve proven that you can do it within drawdown criteria for profit share.
And so that’s been around for maybe five years—tops, really. There’s been quite a lot more companies in the last few years. And a lot of my clients do end up trading through prop firms because, like you said, people go, “Love what you do, want to do it, but I don’t have enough money.”
And it’s like, you can either—like you said—put a small amount in and learn how to do it, or you could go through to a prop firm and work on a profit share. And I think that’s been a real game changer for a lot of our clients as well because you don’t need to have, you know, $100,000 yourself.
And even if you had $100,000, you might want to still trade the prop firm money and, you know, a lot less of your own.
Knowing that you have the knowledge to trade for yourself.
Andrew Mitchem
So there’s options out there for people. One of the other things I think is so important—and again, it comes back to that mental aspect—it’s having that comfort and that knowledge that you can do this for yourself.
You know, through learning through you or learning through us. And I think that’s something that is massive. I love that knowledge and that comfort—that almost feel-good of “I don’t have to go and hand my funds over to someone I’m never going to meet or know or know what they’re doing with my money.” I have complete control.
I have the knowledge up here of doing what I want, when I want, and how much I risk or not. You know, that whole control—self-control—I think is massive. You can’t underestimate how important that is.
Diana Perkins, CPA
I completely agree. So, especially during Covid—if we go back five years—there was, you know, all over the news, cases about the democratization of trading and the markets. And a lot of folks during that time—right—maybe they lost their jobs or wanted to start something new, or now they’re home. So they go, “What do I do with my time?” And there were so many new entrants to trading as retail traders. Yeah.
And so it’s more accessible than ever before. And one of the things that I’ve learned since starting my business—I’ve actually met a lot of wealth managers, advisors who are picking my brains, and they’ve told me a lot of the younger generation don’t trust advisors, I guess. And so they want to learn themselves.
And so we’ve talked about partnerships, and I’ll sometimes say, you know, it’s empowering—just that education, learning how to do it yourself. You know, when you’re older—tax strategy, retirement strategy, estate—you know, all of that. Maybe you pivot—or maybe you don’t.
But just having—just like you said—just having that knowledge and debunking the myth that trading and the financial markets are just for Wall Street. I don’t see, you know—there’s no Wall Street there for Main Street to open a brokerage account in 20 minutes, start with $10, you know, invest in an index fund, or learn, you know, currency trading through an established program and a system that you can plug into.
And that’s how I—I worked for that firm, the nine-month program, met the partners in Vegas, and then I started working internally and coaching and mentoring their traders. And you just—you have to empower yourself that way, even if nothing else—just the terminology and understanding how it works. Because money is so central to our everyday lives.
Andrew Mitchem
Whether we like it or not. It is.
Diana Perkins, CPA
Yes. Yeah.
Contact Diana
Andrew Mitchem
I have no choice in that one. Diana, how would someone contact you? What’s the best way of getting in touch with you?
Diana Perkins, CPA
I can be reached through my website—it’s tradingwithdiana.com. You can schedule a free call, sign up for my free newsletter, and go from there.
Andrew Mitchem
Awesome. It’s been so enjoyable chatting with you, and I think that we’ve got so many similarities with what we do and why we do it as well. I think that it’s the why we help and teach as well that’s really important. But thank you so much for your time. I’ll put links here to your website as well, and people can contact you. Thank you very much for your time today, and we’ll keep in touch.
Diana Perkins, CPA
Sounds great. Thank you so much for having me on.
Andrew Mitchem
Awesome. Thank you.
Episode Title: #608: Build Confidence & Consistency in Trading with Diana Perkins & Forex Coach Andrew Mitchem
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