(This post was first published here: Why we need more (good) female traders)
As promised, here is one of my new interviews, for which I would like to thank Carolyn for her time and generosity.
Carolyn Boroden needs no introduction, but in case you are new to her work here is the link to the post on this thread where I featured her in July: Why we need more (good) female traders.
Now, without further ado: here is my interview with Carolyn Boroden.
Ten questions to trader-analyst Carolyn Boroden
by Francesco Sani, October 2018
1. In your previous interviews you have spent a good deal of time explaining how your approach to the market works, therefore I will not ask you to repeat it here: rather, could you perhaps say why Robert Miner’s approach to trading clicked with you and brought you into the Fibonacci levels theory?
What was it about his seminars that pushed you into the Fibonacci direction?
I specifically remember going to Bob’s seminar in Chicago. When he talked about Fibonacci Timing where you actually use the time axis of the market to call changes in trend it felt like the lightbulb went on in my head.
I found it so fascinating that I actually started doing the work by hand on paper charts with a calculator. I had never seen anyone else use the time axis before. It was a game changer.
2. There is a lot misinformation about Fibonacci, with a lot of services showing only trades that worked but not the ones that failed; as a result, many newbie traders are suspicious about the whole Fibonacci theory.
What is the statistical backbone that could provide trust in engaging with Fibonacci trading in the first place?
I do show failed trades also even on Twitter. I think the best thing to do is test it for yourself. My members are also happy to tell others how they are using my work for profits. Not everyone who uses my work will be making money though. If you don’t follow the rules and are not disciplined, no matter what you use it will fail.
3. You mentioned that you mostly use Fibonacci extensions and projections based on existing trends, but also that you use confluence of different Fibonacci levels within a trend.
Do currency markets, which are notoriously trend-less most of the time, respond well to Fibonacci theory as efficiently as in the case of indices or commodities?
I have done some analysis in currencies and find that retracements and symmetry can work very well in those also. I just haven’t done a lot of that work lately. I think they trend nicely in my past experience.
4. How did you deal with being one of few women working in the CME in the late 1970s? Did you ever get the ‘double-check’ look when you told people you worked there?
Actually, I get a more interesting look when I tell them I ran away from home and quit high school, but now I have my own company.
5. There have been many legal cases of bad behaviour in banks, with women ostracised or objectified and humiliated out of jobs for no other reason than their sex. Zooming out of trading and looking more widely at the whole finance industry, what do you think could be done that goes beyond something like women mentoring programmes in banks and could more radically shift the gender balance in financial careers?
Don’t really have an answer for the above.
6. I am curious to hear your experience of the CME at a time where pit-trading was still on the go, especially having subsequently made the transition to electronic trading yourself: how did you find trading without the outcry element for gaining a feel for market sentiment?
Speaking of market sentiment: do you use volume metrics (e.g. volume bars, Volume At Price, etc.) in trading? In other words, do you read ‘the tape’ to add strength to technical analysis?
The only thing that I felt was an advantage on the trading floor is that I could typically feel the energy in the room getting tense before a big move. I can’t say I profited from it though, because my job at that time was to execute trades mostly for institutional clients. I wasn’t doing anything for myself at that time.
7. Under-capitalisation is often talked about by traders as a reason for failure: how much capital did you have to raise to begin trading by yourself and how long did it take you to raise it?
The first time I did some trades I think I only had 2K in my account. I did great until I did NOT use a stop on one of the trades and I lost it all. Using a stop would have saved me!
Right now I think it’s adequate to use a 30K account for options trading on think or swim. Some will start with less cash but if you do that, I would trade some very cheap options spreads to get your feet wet. You really should start with more because you have to allow for your rookie mistakes that we all make!
8. Do you use any automation in your trading, and how much decision-making do you delegate to it?
I don’t really automate anything. I do have some trade triggers that get painted on to think or swim charts that are essentially buy or sell signals though.
9. Besides your 2008 book, is there any other reliable resource (including statistical analysis) that newbies looking into Fibonacci methods can access and study away from live charts?
I highly recommend Robert Miner’s book, Dynamic Trading. After all I would not be in business if it wasn’t for him!
10. Do you plan to retire at all or is trading something that you hope to continue with as long as possible?
I’m not sure I will ever give up looking at the markets. This work still fascinates me. I do plan on taking more vacations NOW, but I may end up running a service til I’m 70! We will see! I am one of the lucky ones who actually LOVES what they do for a living!! I would like to start doing more teaching though in the near future. This way the technique doesn’t go away when I do!!