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Tracy-Lynn Ball is a profitable, full-time day and swing trader who has dedicated herself to being a life-long learner.  She has developed a love for trading and teaching others how to trade.  Tracy-Lynn uses her gift of effective communication to co-host two podcasts and has found success as a Master Mentor at Real Life Trading.  Recently, she was a guest speaker on a private island for millionaire traders!  In this episode of How To Trade It, Tracy-Lynn discusses the intentionality behind her back trading efforts.  You don’t want to miss it! When an unexpected medical issue imposed a forced sedentary lifestyle on Tracy-Lynn Ball from @reallifetrading, she made the best of the situation by turning her efforts to trading. Tune in to this episode of How To Trade It to learn more!… Click To Tweet

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You’ll want to hear this episode if you are interested in…

  • [02:25] Trading shares
  • [05:28] How to keep going when you want to quit
  • [09:05] Appropriate expectations
  • [11:56] Understanding the “R”
  • [14:41] Back trading recap
  • [17:10] Back trading ins and outs
  • [22:33] Finding stocks to trade
  • [24:57] Price patterns
  • [27:20] Identifying support and resistance levels
  • [28:22] Price!
  • [29:56] Placing your stop

Keep going!

When an unexpected medical issue imposed a forced sedentary lifestyle on Tracy-Lynn, she made the best of the situation by turning her efforts to trading.  When things were really difficult, it was the absence of something else to go to that kept her moving forward.  Yes, she was learning to love trading, but she admits that if she had a Plan B, she probably wouldn’t have continued to pursue it.  At that time, trading was her best option, so she buckled down, studied hard, and committed to not giving up.  Her “this-must-work” attitude served her well and has allowed her great success now.    

Understanding “R”  

R stands for risk unit.  It is the difference between your entry and your stop.  Essentially, your “R” is the maximum amount that you are willing to risk on a trade or the amount you would lose if your stop gets triggered.  Tracy-Lynn typically has an R that is 0.5% of her account.  She encourages students to never risk more than 2% of their account.  Tracy-Lynn readjusts this number every three to six months, depending on performance, and she doubles it, every time she doubles her portfolio.

Back trading recap

The whole purpose of back trading is to get numbers that will allow you to set your expectations correctly.  Tracy-Lynn believes that if she has an accurate picture of her average loss and average gain, she can realistically achieve her desired results. If you are looking to make $50K per month, but your strategy can only get you $10K per month, either your expectations or your strategy needs to be adjusted. Unfortunately, most traders don’t do this and then they get down on themselves or they stop following their plan altogether.  In reality, they just need to make adjustments to accommodate their desired yield.  It’s critical to have those benchmark numbers, so that you can fit your portfolio in the benchmark.  

Price patterns and volume

According to Tracy-Lynn, there are two leading indicators in the market…volume and price.  She has focused her efforts on mastering those rather than the lagging indicators that other traders tend to follow.  The hammer pattern is her absolute favorite!  The majority of bullish patterns, if you combine the candles, make up the hammer pattern on a higher time frame. This pattern encompasses all of the reversal signals that you would need for a reversal to come into play. That includes the inverse hammer as well.  However, as in real estate, the important thing is location, location, location.  So, that is where the volume profile comes in.  

Resources & People Mentioned

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Disclaimer: Trading carries a high level of risk, and may not be suitable for all investors. Before deciding to invest you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment. Therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.