Millionaire Traders

The 100-Pip Trader

Test Everything

Before Rob Booker implements any strategy, he will spend hours
and hours studying the mechanics of the strategy to understand
when it works and when it doesn’t. He feels that his job is to be a
back tester first and a trader second. Therefore, his cardinal rule is
to never trade a strategy unless he can first prove that it has been
profitable in the past. For new traders, back testing may sound
daunting. However, it does not need to be as complicated as it
seems. There are a lot of different ways to back test. The fancy way
is go out and learn a programming language to generate results
systematically. However even though Rob Booker knows how to
code now, at the beginning he back tested everything manually.
One easy way for new traders to start is to simply review the charts
going back in time to look for instances when your setup triggered a
buy or sell signal and to record the actual performance of the trade
At bare minimum, we encourage traders to first look for at least 20
to 50—this depends on the timeframe you are trading—samples
of the pattern and only after that do we recommend traders move
into forward or live-testing phase. This means that the strategy is
actually traded in current market conditions using either a demo
or mini-account. The reason why this is important is because the
psychological element of trading can always alter results by reveal-
ing the difficulty of reacting to live market conditions. Along the
same lines, a minimum of 20 to 30 winning trades needs to be
made before the strategy is ready for prime time.

Don’t Fall Victim to “Possum Trading”

Rob Booker believes that you should never let yourself fall victim
to what he calls “possum trading.” When a trade is going bad, it
may be very tempting to shut off the computer and hope that it
will all get better if you stop watching the market. However, this
almost never happens. Instead, more often than not, the losses will
only become greater. Therefore, it is important that we all focus on
tradingdefensively. Trading is a game of survival. If you can protect
your capital, you can always live to trade another day. This is why
Rob Booker’s first goal is to not lose money and his second goal is to