Table of Contents
In this interview, 30-year trading veteran Axel Rudolph—Senior Analyst at IG and Head of Education at the Society of Technical Analysts—joins the Words of Wisdom podcast to unpack how he actually trades: early DAX sessions, price-action first, and risk discipline forged on bank desks. Why he matters: he’s taught pros, traded across cycles since the ERM crisis, and distills complex ideas into repeatable habits retail traders can copy today.
You’ll learn the bones of Axel’s strategy: clean candlestick reading plus a 9-period RSI for momentum and divergence, five simple systems (mostly trend-following with one mean-reversion), and the risk rules that keep him in the game—tiny position risk (typically 2–3%), equity-curve-based sizing, and break-even management when momentum fades. We’ll also cover his “write everything down” journaling approach, what to expect from losing streaks (and how to survive them), and the mindset shift from forecasting to executing a defined edge.
Axel Rudolph Playbook & Strategy: How He Actually Trades
Core Philosophy (edge over opinions)
Trading works when your rules exploit repeatable behavior, not when you predict headlines. This section shows how to define a simple, testable edge you can rinse and repeat across markets and cycles.
- Write your edge as one sentence: “Trade with the dominant trend; buy strength after short pauses, sell weakness after short bounces.”
- Only act when trend + trigger + risk location all line up; if one is missing, skip.
- Track expectancy per setup; keep only rules that show Profit Factor ≥ 1.4 over 50+ samples.
Markets & Timeframes (where and when he plays)
Consistency comes from specializing in a few instruments and specific session windows. Here’s how to pick your arena and standardize the lens you use.
- Focus on 1–3 liquid markets you can follow daily (e.g., major indices, liquid FX, top single-name leaders).
- Use a higher timeframe for bias (daily/4H), execution timeframe (1H/15m), and micro for entries (5m).
- Trade during your product’s high-liquidity window; if the spread widens beyond average by 50%+, stand down.
Chart Template (clean price + lightweight momentum)
Keep charts uncluttered so signals are obvious. These tools are selected for clarity, not complexity.
- Price: candlesticks with prior day/week high/low and a 20 EMA for the mean.
- Momentum: RSI(9) for trend health and divergence; in uptrends, prefer longs when RSI(9) > 50, shorts when < 50 in downtrends.
- Volatility: ATR(14) on execution timeframe; avoid new trades when ATR is in the bottom 20% of its 3-month range.
Setup 1 — Trend Breakout (after volatility squeeze)
Breakouts work best after compression and in the direction of the bigger trend. Use these rules to avoid chasing noise.
- Bias: higher timeframe makes higher highs/higher lows (for longs) or lower highs/lows (for shorts).
- Structure: identify an inside bar / narrow-range bar or multi-bar flag against the trend.
- Trigger: buy stop 1 tick/pip above pattern high (sell stop below pattern low) only if RSI(9) > 50 for longs (< 50 for shorts).
- Invalidation: cancel order if not filled by session close or if momentum flips (RSI crosses through 50 the wrong way).
Setup 2 — Pullback to the 20 EMA (with rejection wick)
Trends breathe; you want the first or second pullback, not the fifth. These rules define the “sweet spot” entry.
- Context: trend confirmed on higher timeframe; ATR not collapsing.
- Entry: limit at 20 EMA zone after a bullish/bearish rejection wick forms against the pullback.
- Stop: 1–2 ticks/pips beyond the rejection wick low/high.
- Target: +1R partial at prior swing, runner via structure/ATR trail.
Setup 3 — Overstretch Mean Reversion (advanced)
Countertrend trades are rarer and need stricter filters. Only take them when volatility and stretch are extreme.
- Preconditions: ATR ≥ 1.5× its 3-month median and price ≥ 2 standard deviations from VWAP/20 EMA.
- Trigger: reversal candle with RSI(9) divergence on execution timeframe.
- Target: first VWAP/20 EMA tag, then scale to prior balance edge; stop beyond the extreme wick.
Risk & Sizing (survive first, profit second)
Sizing is the throttle on your psychology. Fix your per-trade risk and let position size float to keep losses identical.
- Risk 0.25–0.75% of account per trade; cap total portfolio risk at 1.5%.
- Position size = R / (entry – stop); add a 0.1R slippage buffer for fast products.
- Hard stops in the system; no widening once placed.
Trade Management (systematic scaling and trials)
Winners need room; losers need the exit. Manage both with preset steps so you don’t improvise mid-trade.
- Take ⅓ off at +1R, move stop to breakeven – 0.1R to avoid stop-hunts.
- Trail winners with structure (under/over swing lows/highs) or ATR(14) × 1.2 once +2R prints.
- Exit fully when trend structure breaks, volatility collapses (intraday ATR < 70% of session average), or the target is hit.
News & Events (respect catalysts)
Big prints and earnings can distort signals. This section shows when to step aside and when to lean in.
- No fresh entries 2 minutes before a high-impact release; wait 15 minutes after for spreads to normalize.
- If the catalyst aligns with your trade direction and context is strong, allow +0.25R wider stop; if it conflicts, skip.
- Flatten day trades into the close unless your plan explicitly includes holding risk across the event.
Daily Routine (repeatable workflow)
A simple routine removes guesswork and keeps your attention on execution. Do the same prep every day.
- Pre-market (30–45 min): mark prior H/L, overnight H/L, key moving averages; define two if-then scenarios per market.
- Live: only execute A/B setups from the playbook; log each trade immediately with screenshots.
- Post-market (20–30 min): grade setups, compute expectancy, and note one improvement for tomorrow.
Playbook Grading (A/B/C quality control)
Not all setups are equal; size should match quality. Grading keeps you from over-risking mediocre trades.
- A-setup (full size): trend + trigger + volatility + clean risk location; checklist 100%.
- B-setup (half size): one element weaker but still valid; checklist ≥ 80%.
- C-setup: pass; screenshot and archive for study only.
Precision Entries (mechanics that reduce noise)
Small tweaks at execution can add R’s over a month. Use these mechanics to enter cleaner and slip less.
- Prefer stop orders for breakouts, limits for pullbacks, and market only when reclaiming key levels with momentum.
- Enter once per level; if stopped, don’t re-enter unless a new structure forms.
- Avoid entries in the dead zone: mid-range with RSI(9) near 50 and ATR in the bottom quintile.
Stops That Make Sense (where you’re wrong)
Stops belong where the idea is invalidated by structure, not by fear. Place them where the market must prove you wrong to tag them.
- For breakouts: stop beyond the base or last inside bar, not inside the range.
- For pullbacks: stop beyond rejection wick plus a symbol-specific tick/pip buffer.
- Time stop: if after 5 bars the price hasn’t moved in your favor, scratch.
Scaling & Risk Ramping (earn the right to size up)
Growth should follow data, not mood. You scale after statistically meaningful progress.
- When your rolling 40-trade sample shows +10R net and PF ≥ 1.6, increase unit risk by +0.1%.
- If you draw down –6R from equity peak, automatically de-risk to the prior size until recovery.
- Weekly risk budget ≤ 4R; once spent, you’re flat for the week.
Journal & Metrics (turn trades into feedback)
Good notes compound faster than opinions. These fields keep reviews fast and useful.
- Log Instrument / Setup / Grade / Entry / Stop / Target / Size / Result (R) / Error? Plus two screenshots (entry/exit).
- Tag trend state, volatility regime, catalyst, and time of day; review tags weekly to spot edge clusters.
- Track E = (Win% × AvgWin) – (Loss% × AvgLoss) per setup; pause any setup with E < 0.2R for three consecutive weeks.
Size Every Trade by Volatility, Not Confidence or Conviction
Axel Rudolph says your gut doesn’t earn position size—volatility does. If a market is calm, you can take a larger position for the same risk; if it’s wild, you automatically shrink size. The math keeps you honest when emotions want to “lean in.” Treat it like a throttle: fixed risk per trade, flexible number of shares or contracts.
Here’s the simple workflow Axel favors: define R as a small, consistent slice of equity (e.g., 0.5%). Measure current volatility with ATR on your execution timeframe. Position size = R ÷ (entry minus stop), with a small slippage buffer baked in. If ATR spikes, size falls; if ATR compresses, size rises—confidence never enters the equation.
Diversify by Instrument, Strategy, and Timeframe to Smooth Equity
Axel Rudolph argues that diversification isn’t just “more tickers”—it’s different drivers of P&L. Mix instruments that don’t all surge or sink on the same macro impulse, so one bad theme doesn’t nuke your week. Pair trend setups with a mean-reversion or breakout play to avoid single-style drawdowns. Spread risk across intraday and swing timeframes so you’re not hostage to one kind of volatility.
In practice, Axel Rudolph caps exposure by cluster: no more than a set fraction of risk on instruments that move together, and no stacking the same setup type at the same time. When two trades share a catalyst, he treats them as one position and sizes accordingly. He rotates attention to the markets offering clean structure now, rather than forcing trades where the edge is cold. He also reviews correlation and win/loss streaks by strategy bucket weekly to rebalance effort and size. The result is a steadier equity curve that compels discipline instead of gambling.
Trade Rules, Not Opinions: Mechanical Entries, Stops, and Exits
Axel Rudolph insists that opinions are entertainment; rules are the edge. He predefines the entry trigger, the invalidation level, and the exit logic before placing a single order. That way, when the price prints the signal, he executes without second-guessing or “filtering” with a hunch. The market decides; Axel just follows the script.
Mechanically, Axel Rudolph ties entries to visible structures—breakouts from compression, pullbacks to the mean, or reversal wicks with momentum confirmation. Stops sit where the idea is proven wrong, not where they “feel safe,” and never get widened after entry. Exits scale out at fixed multiples (like +1R) and then trail via structure or volatility so winners can breathe. If none of the conditions show up, he does nothing—because no rule, no trade.
Prefer Defined Risk Setups; Avoid Unlimited Downside and Hidden Correlation
Axel Rudolph draws a hard line between trades where the worst-case is known in advance and those where losses can snowball. He favors structures and tactics that cap downside—tight structural stops, clear invalidation, and option spreads with fixed risk—so one bad tick doesn’t become a career event. Unlimited downside shows up in more places than traders expect: averaging down, shorting into headlines, or stacking correlated positions that all break together.
To keep the edge clean, Axel Rudolph sets a maximum loss per idea (his R), places the stop where the thesis is invalid, and refuses to widen it. If using options, he’ll prefer debit or defined-risk verticals over naked shorts when volatility is unpredictable. He audits correlation before entry: multiple trades driven by the same catalyst count as one position and share the same risk budget. If volatility explodes beyond plan, he exits rather than “managing” undefined risk. The principle is simple—survive first, so your winners have a chance to matter.
Daily Process Wins: Plan, Execute, Journal, Review, Adjust
Axel Rudolph treats trading like a craft session, not a guessing game. He starts by mapping key levels, volatility regimes, and two if-then scenarios per market, so he already knows what to do when the price arrives. During live action, he runs the playbook only—no off-menu trades, no “just a feel” entries, and a hard stop for the day after a fixed drawdown. The discipline keeps him from turning a slow morning into a destructive afternoon.
After the close, Axel Rudolph journals every trade with screenshots, grades each setup, and recalculates expectancy so position size reflects reality, not hope. He tags context—trend state, catalyst, time of day—to spot where his edge clusters and where it dies. One improvement is chosen for tomorrow, written in plain English, and pinned to the screen to make it unavoidable. The next day’s plan must reference yesterday’s lesson, turning review into action instead of a feel-good ritual.
In the end, Axel Rudolph’s playbook boils down to disciplined simplicity: show up early, prepare deliberately, and trade only when structure, momentum, and risk location align. He treats routine as an edge—DAX prep before most traders are awake—and then lets predefined triggers do the heavy lifting, not hunches.
His risk framework is ruthlessly practical: think loss first, fix R per trade, move stops to breakeven once price travels the stop distance, and scale partials while letting a runner work. He actively de-emotionalizes P&L by talking in R, cutting size after streaks, and refusing to widen stops—choices that keep account volatility survivable and psychology steady. Add it up and you get a trader who favors defined risk, mechanical execution, and incremental compounding over prediction—rules that any diligent trader can put to work tomorrow.
