John Correnti is a full-time trader and part-owner of Currensys (www.currensys.com). Currensys provides traders with an objective trading system and a daily live trading room. DailyForex.com recently caught up with John and we discussed his journey into trading, Currensys and how he views the markets.
Q. John, thank you for taking the time to speak with DailyForex.What was your professional background prior to trading?
I used to buy and sell homes in the renovation business. I found I was always relying on the other contractors to get my jobs done and that meant I was at the mercy of others for my livelihood. That was what got me searching for a better living and more independence.
Q. How did your journey into trading begin?
Initially I bought a lot of courses looking for the Holy Grail like everyone else. I stumbled across Phil McGrew and I became one of Phil's first clients and struck up a good friendship with him. That said, I still continued buying Expert Advisors . Eventually, I realised that these programmes weren't the answer; the answer was that I had to follow the rules [of Phil's system] and keep my emotions out – that's when my trading turned around.
Q. One of the backbones of your trading is the MACD indicator. In simple terms, what is a MACD measuring?
We use MACD as the principal base indicator; it measures buying and selling pressure in the market. All indicators lag to an extent; we feel MACD is the least lagging, or in other words, it's the most reactive, period. We've modified the MACD and that's our secret sauce so to speak. We have the ability to filter out different market conditions: trending, choppy, breakouts and reversals. Phil developed it as a trader himself to keep him in the market only at the right time. We only employ one other indicator: 3/14 EMA cross only for our breakout system.
Q. You personally take into account correlation between currency pairs. How do you apply correlation?
All USD based pairs are correlated. For the most part, they're going to travel in the same direction. 70% of the volume is in the Forex market USD based. So if you're trading one of those pairs, don't trade multiples of USD pairs. Correlation also helps give me added confirmation with my trades: when I'm getting three out of four USD pairs giving signals, it gives me added confirmation. The USD/CAD however does whatever it feels like it wants to do – it trades much more independently.
Q. You've avoided MetaTrader in favour of supporting NinjaTrader, eSignal, FXCM, MCFX and TradeStation. Why is that?
That decision was made purely based on the quality of the platform and the datafeed. Any professional trader will tell you that you need good a platform and excellent datafeed. MetaTrader is an easily manipulated platform from the broker's perspective: stop hunting, bad fills, those kinds of things. We didn't want to be associated with that and also with a lot of the cheaper programmes built for MetaTrader. We're more focussed on quality, mentoring and customer service. I'm sorry, but you just cannot expect to become a full-time trader using MetaTrader.
Q. What is the Currensys solution – what is a client getting?
A customer gets two things: firstly, a system that gives a trader quality edge in all types of markets and rule-base to follow, and based on its historical record, a good income. Secondly, the trader gets mentoring. We get clients through a learning curve that other systems don't do or charge extra for. All systems fail on occasions. Even when times are rough, we are there providing support. I feel that's unique in the industry.
Q. Over the years, have the markets changed in terms of how you can apply your methods?
The markets have become more volatile because of more volume and political unrest. That's a good thing: we need volatility. We want movement. Even the unfortunate events in Japan created tremendous opportunities for traders. You need a system to capitalise on those events and capture those moves. The underlying algorithm of the system hasn't changed over the years: it's based on sound logic.
Q. How does news & fundamentals affect your trading?
The only news event we avoid trading around is the monthly Non-Farm Payroll. Otherwise, we always trade. There are multiple news events every day, and if you're focussed on that you won't be focussed on the system. So outside of NFP, I ignore the news. I couldn't tell you what news events there were today.
Q. Given that the Currensys system can be traded without assistance from others, what benefit is the live trading room?
I knew from my own experience as a Currensys client before I became a part owner of the company, most people wouldn't read the manual, understand the manual immediately or follow the rules. So they would start off with a low chance of success. Every mistake a trader could make, I did it. And people are generally the same. So the live-room was to help clients understand the rules and how to manage the signals, and guard them away from the mistakes I made at the beginning. It is there to accelerate their learning-curve and their confidence levels and then that's the turning point to becoming profitable.
Q. What trading hours do you keep? How many trades do you capture every week on average?
I usually get up for the London open and trade through to noon EST, those 8 hours. Typically I take three trades most days.
Q. What timeframes do you most often trade?
Because of my schedule, I primarily deal with the 15-minute charts but I do like the higher timeframes a lot, 1-hour and 4-hour charts. I want to migrate to those timeframes as they're easier to manage particularly as my schedule has become more complex.
Q. Do you aim for a weekly pip count as a goal?
No. I got out of that because that makes you chase numbers, do stupid things, and not keep within the rule-set. If people follow the rules, know their trading plan, their pip goals will come about. I tell people: we're all here to trade to make money. But it can't be about money: as soon as money enters into the equation, stress enters and it's a killer. If you keep it about the rules and the system, emotions become in-check and you will become profitable at that time. My goal is to be 100% rule-based and execute according to that. Based on that, I make hundreds of pips in a week.
Q. What's the mix of your Currensys members between full-time traders and part-timers?
From what I can gather, everybody who gets involved has aspirations to become full-time. About 60% of our clients are full-time. We also have some CTAs building books of business around our system.
Q. What are the most common errors you see traders make?
Very simple: not following the rules. When you don't, you take losses. Then you become apprehensive about following the rules because you think the system doesn't work. It's very important to back-test, so you have expectations, then you walk forward in demo, so when you go live, you follow the rules as it's ingrained in you by that stage. We have a 240 page manual; there's a lot of information. This is what you must do in order to become successful: read it and follow those rules.
Q. What mistakes do you still make today as a trader?
Not following the rules. This happens when I am just preoccupied and not focussed on what I'm doing. I'm human like everyone else, and put on bad trades. When I'm focussed and centered, I'm a winner. When I'm not, I lose. It's kind of simple in that way.
Q. Any final thoughts?
We're here to help people become successful using the program. We know not every single person will become successful: maybe they can't handle the risk because of their own psychological reasons, or don't have the time. But for those who truly want to be successful, we have unlimited support. We'll do whatever we can as long as they're dedicated, we'll be there every step of the way. Phil is of the same mindset: that's why our partnership works. We're not here to churn through clients. We want to keep people in the game and help them become profitable.