Carolyn Boroden is a Commodity Trading Advisor and technical analyst who has been involved in the trading industry for over 25 years.
Carolyn Boroden is a Commodity Trading Advisor and technical analyst who has been involved in the trading industry for over 25 years. Her background includes working on the major trading floors including the Chicago Mercantile Exchange, the CBOT, NYFE and COMEX, where she eventually shifted over to focusing on technical analysis of the markets.
Ilan: Tell us a little bit about your trading background and how you got started trading.
Carolyn: My entry to this business was not typical. I never planned on it. I started on Wall Street at 18 years old as a secretary/gopher to the Government bond department of Donaldson Lufkin and Jenrette. My only real skill at that point was typing. Since I was always willing to work hard they gave me an opportunity to move to Chicago when I was 20 to work on the trading floor of the Chicago Mercantile Exchange working with Financial Futures. When I moved to Chicago I took a basic course in Technical Analysis of the markets and was hooked. The rest is history. I currently provide market analysis based on Fibonacci ratios and market patterns. I also teach those who want to learn to do this analysis on their own.
Ilan: Who were your mentors, and what did you learn from them?
Carolyn: Robert Miner was my biggest mentor. I met him at a trading conference and after I watched his presentation on using Fibonacci ratios on both the time and price axis of the market I was fascinated and I became a student of his work from that moment on. The most important thing I learned was that you could ALSO analyze the time axis of the market which most analysts do NOT do at all. Most analysts say they are "timing" the market with their price patterns and analysis. This is actually doing the work on the TIME axis. I also did learn from Larry Pesavento and from Bryce Gilmore who wrote the book Geometry of Markets.
Ilan: At CannonTrading, we give traders the ability to create and back-test trading strategies. How important is back-testing to your trading process? How do you approach this?
Carolyn:Back testing is extremely difficult with my work. Testing as you go however is realistic. I’ve been in the futures business since 1978. I've had plenty of years to test the value of my work as I went. Of course nothing is 100% but I did find that when my trade setups worked, many of them worked very well. When they did not work, the risk was very reasonable.
Ilan: Trading strategies can help traders rein in emotional trading decisions and strategy automation can help traders stick to a trading plan. What are your thoughts on this?
Carolyn:I agree with having a trading strategy. This allows you to take MOST of the emotion out of trading. I suggest that all my traders write up their own specific rules for their plans to use my work. Taking losses when you need to are part of the plan.
Ilan: There are so many markets to trade today, it can be overwhelming. What markets do you trade?
Carolyn:I primarily focus on Stocks indices, some individual stocks and options, and some choice futures markets.
Ilan: How do you approach trade management – setting profit and exit levels, trade size and account-level risk management?
Carolyn:As far as trade management is concerned, defining risk is the most important. With my methodology, the time/price parameters define my risk. I know immediately when I’m wrong the trade and need to exit. As far as targets are concerned, I have initial targets on trade setups that are defined by the math of the Fibonacci ratios. Since there are some trade setups that continue in your favor often enough, I suggest to my traders that they keep some "runners" and at that point use a trailing stop to attempt to stay in for some of the much larger moves at least with a partial position.
Ilan: Finally, if you could give some key advice for the aspiring traders out there, what would it be?
Carolyn:Have a written trading plan. First test it with a paper account, then continue to test it with a small amount of cash. Remember, having a plan does not help you, unless you follow it! For a free trial of Carolyn's services click here
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.