MTI’s Tian Kriek has made hundreds of winning trades over his brilliant 20+ year career as a pro Forex analyst and trading instructor. However, there is one specific trade that stands out above the rest.
We asked Kriek, host of the Analyst On Demand Trading Room, to share the details of how he scored his greatest trade ever. Kriek also previewed the new KAMA strategy that he’ll unveil at the Summer Trading Games live-streamed trading battle event on Tuesday, July 27th.
How did you spot your winning trade opportunity?
Kriek: It was a few years ago and I remember that trade vividly. It actually happened when I was trading Dow Jones futures and I saw that there was a massive reversal pattern unfolding.
I wouldn’t say that I exposed too much on that trade, but I did go in with a higher than normal exposure. I eventually closed the position for a substantial profit just in time for my wedding anniversary.
I used the profits to get a contracting company to remodel our bedroom in my house in South Africa. They also remodeled our ensuite bathroom for the wedding anniversary. My wife was very happy with the anniversary gift after that work was done so that’s when I told her, “I’m buying a Harley-Davidson!”
How did she feel about that?
Kriek: Well, she wasn’t happy, of course. But she couldn’t really do anything about it because look at what an amazing anniversary present I gave her. [Laughs.] So, that’s a trade that I remember well because it was such a nice moment.
What strategy did you use for your big trade win?
Kriek: I was using one of my personal strategies, which is similar to grid trading or leveling, where you would split your exposure in the event that the market should move against you. The strategy is for you to keep on adding to your position thereby providing your own trade “forgiveness.” A “forgiving” strategy is one that lets you profit even when the market doesn’t move as expected.
For instance, if you want to risk 1% or 2% on a single instrument, then you can go and maybe split that risk into 10 increments. This method lets you keep on adding to the position as the market moves against you. And eventually when the trade becomes positive and it meets the target then you can walk away with a substantial profit.
And the good thing about this strategy is that as the market starts to move in your favor, the last number of trades entered will be filled at the price that you can ‘lock’ in the profit. They are now in the profit zone and you can start locking in those profits.
Was this a trade setup that could potentially happen again?
Kriek: The market does not always move in a straight line but you get those moments in time in your trading career where it does happen. And that’s when you have this amazing opportunity to just be at the right place at the right time, trading the right instrument, and applying the right strategy.
I would certainly do it again because I am a strong supporter of my personal trading system, which is the probability study technique that I present in my trading room classes. I will never trade against the direction of highest probability.
So in the event that I see a future trade opportunity like that one unfold, then we can level in as long as it is within the direction of highest probability. I would certainly do that strategy again. In fact, I’m doing that on the Dow Jones again at the moment.
How long did the trade take to play out?
Kriek: The trade happened over a period of six weeks and I made a 6% profit. Six weeks is not usual when you are intraday trading. My average trade lasts for two weeks, not six weeks.
So that was the kind of trade that I had to keep on building and building and building. I maintained my strategy and my sanity and kept on trading in the direction of highest probability. I kept believing in my analysis, experience and education.
So has this particular strategy stayed the same or has it evolved?
Kriek: It is the same strategy, just with less risk exposure. Most of the trading strategies that I invent at Market Traders Institute will have that as a core structure, which involves price leveling or adding trade forgiveness.
I’m not a supporter of going “all in” on one single trade. I believe in splitting your risk and chipping away bit by bit.
Describe the KAMA strategy that you’ll be using for the Summer Trading Games event.
Kriek: KAMA is based on a single concept: If the probability or trend is bearish and the market performs a retracement within that bearish probability, then we use an indicator to confirm that the market is actually overbought. That’s when we start selling.
In the event that the market should continue bullish within that bearish trend and if the retracement widens, then we will keep on selling. So it’s exactly the same strategy as what I did in those days trading the Dow Jones. It is just applied on the foreign exchange market instead and it comes with a variety of new features.
For instance, you can decide what time you want to trade or what day you want to trade. If you don’t want to trade it on a Wednesday, then you simply uncheck the Wednesday option. And so the KAMA strategy has evolved, but the core structure of my trading approach is still prevalent.
Do you have any other advice for traders?
Kriek: Well, there are two things. Make sure you trade in the direction of highest probability and that you add risk forgiveness to your own trading. Build in forgiveness because you’re not always going to be right. You’re not always going to enter the market at the exact sweet spot, so you need to take steps to protect yourself as much as possible.
For more information on Tian Kriek’s trading room, visit Analyst On Demand.