Table of Contents
Today’s interview features Louise Bedford—best-selling author, trader, and long-time mentor—sharing how she clawed from three years just to break even to building a repeatable edge. We dig into her early “felt my way in the dark” beginnings, the turning point that came from discovering candlesticks, and the identity shift that helped her transition from corporate life to full-time markets. It’s a candid, practical conversation with a teacher who’s coached traders for nearly two decades and still trades the lessons she teaches.
In this piece, you’ll learn Louise’s core playbook: use candlesticks as the trigger within a broader “weight of evidence” setup, tighten your psychology so cortisol doesn’t hijack decision-making, and turn wins into lasting banked equity through maintenance habits. We’ll cover simple testing paths (manual walk-forward before risking real capital), why a written trading plan flattens the joy-despair swings, how purpose beats raw passion when the grind gets real, and even her quick fix for “trading apnea”—remembering to breathe so your brain actually thinks. Expect concrete, beginner-friendly steps you can apply to your very next trade.
Louise Bedford Playbook & Strategy: How She Actually Trades
What she trades and when she steps aside
Louise keeps it simple: liquid markets, clean trends, and session times that match a calm routine. This section lays out exactly which instruments qualify and the basic filters she uses to avoid chop.
- Trade liquid equities, index CFDs/futures, and FX majors with tight spreads and stable fills.
- Only trade when the average daily range (14-day ATR) is above the 40th percentile of the past year.
- Skip earnings week for individual stocks; no new positions 48 hours before results.
- Avoid “news landmines” in FX—stand aside 15 minutes before and after top-tier releases.
- Minimum price for stocks: $5; minimum average daily volume: 1M shares (or equivalent notional).
Set up selection: “weight of evidence” first, candlestick second
Think trend structure and context before any candle pattern. Here are the objective conditions she wants to see before she’ll even consider a trigger.
- Uptrend filter: 20 EMA > 50 EMA > 200 SMA and price above all three; downtrend is the reverse.
- Market breadth tailwind: for equities, only go long when the index is above its 50-day moving average.
- Structure filter: look for higher highs/higher lows (or lower lows/lower highs) on the daily chart.
- Location matters: pullbacks into the 20 EMA or prior breakout zone; avoid mid-range drift.
- Reject trades if two or more filters disagree (e.g., trend up but breadth weak).
Entry triggers: simple candlestick rules that don’t overfit
Once context is green, she uses a small set of repeatable candles to time the entry. These triggers keep her from random clicks and force patience.
- Bullish trigger: buy stop 1 tick above a bullish engulfing or hammer at the 20 EMA in an uptrend.
- Bearish trigger: sell stop 1 tick below a bearish engulfing or shooting star at the 20 EMA in a downtrend.
- The signal candle’s range must be ≤ 1.2× the 14-day ATR; skip “monster” bars.
- Maximum of two re-entries per idea; third chance means the idea is stale.
- If price gaps through the stop-entry level by >0.3× ATR, wait for an inside bar and re-arm the order.
Initial risk and position sizing
Capital stays protected by design, not by hope. These rules keep single-trade damage small while allowing position size to adapt to volatility.
- Risk per trade: 0.5% for new playbooks, 1.0% maximum for proven setups.
- Position size = (Account Equity × Risk %) ÷ (Entry – Initial Stop) for longs; flip for shorts.
- Initial stop for longs: 1.5× ATR below the signal candle’s low or below the 50 EMA—whichever is farther.
- Cut size by 50% when correlated positions are open (same sector/pair or >0.8 correlation).
- Hard daily loss cap: 2R or 2%—stop trading once reached.
Trade management: let winners breathe, choke losers fast
The goal is to create asymmetric outcomes without micro-managing every tick. These rules define what to do after the fill.
- Move stop to breakeven only after price closes beyond +1R from entry.
- Trail with a 3× ATR stop once price reaches +2R; update at the close only (no intraday fiddling).
- If three consecutive closes go against the position without hitting the stop, exit half the size.
- Add once: pyramid +0.75R of the original risk after a clean pullback that holds the 20 EMA.
- Never widen a stop; if you need more room, your initial analysis was off—exit and replan.
Exit rules: planned profits, not “feel”
Exits are scripted before entry to neutralize emotions. Here’s how she locks gains and standardizes outcomes.
- Partial at +2R: take off 30–50% and trail the rest with 3× ATR.
- Momentum fade exit: if RSI(14) crosses back through 50 against your trend after +1R, reduce by half.
- Time stop: if a trade hasn’t reached +1R within 10 trading sessions, close it—opportunity cost matters.
- Structural break: close when the price closes beyond the opposite side of the 50 EMA against the trade.
Routine and preparation: process over prediction
Consistency beats clever. This routine keeps her energy high and decision quality stable.
- Night-before scan: 30–60 minutes to mark candidates and place conditional orders only—no market orders tomorrow.
- Pre-session checklist: 5-minute breathwork, review loss cap, confirm economic calendar, read plan aloud.
- Batch decisions at the close for swing trades; intraday exceptions only for pre-planned news avoidance.
- Weekly reset: clean charts, archive annotations, and pre-write if/then statements for common scenarios.
Psychology and identity: trade the plan, not the mood
Louise treats mindset like any other edge—measured, trained, and maintained. These rules prevent cortisol from running the show.
- If heart rate or breath rate spikes, step away for 2 minutes and reset before any order action.
- Use a “stop-DO” instead of “stop-DO-NOT”: replace bad habits with a scripted alternative action.
- After any loss >1R, force a 15-minute cool-off before touching the platform.
- Identity cue: say out loud, “I am the kind of trader who keeps risk small and outcomes large,” before the open.
Recordkeeping that compounds skill
The journal isn’t a diary—it’s a dataset. Capture the few fields that actually generate insight.
- For each trade, record: setup type, market regime (trend/ATR/breadth), R-multiple result, and notes on execution.
- Tag emotions at entry and exit (calm, rushed, FOMO, bored) with a 1–5 intensity score.
- Every Saturday, run a quick expectancy check: win rate × average win (R) − loss rate × average loss (R).
- Cull the playbook: if a setup runs <0.3R expectancy over the last 30 samples, pause it and re-test.
Simple backtesting and forward proof
She proves ideas cheaply before risking real capital. This section explains how to validate without getting lost in spreadsheets.
- Do 50 chart markups per setup on historical data: screenshot, annotate entry/stop/exit, and log R outcome.
- Forward-test with tiny risk (0.25% or paper) for 20 trades; only then graduate to 0.5–1.0%.
- Keep rules frozen during each 20-trade block; revise only between blocks to avoid curve-fitting.
Risk clustering and portfolio balance
Edges drown when everything moves together. These rules control correlation and concentration.
- Maximum 3 positions in the same sector or currency theme; otherwise, cut the size per position by half.
- Cap total open risk at 3% of equity; if breached, cancel lower-quality orders first.
- If index volatility (e.g., ATR% or VIX proxy) doubles week over week, halve all new position sizes for the next 5 sessions.
Professional hygiene: when life happens
Markets reward consistency, but life can still intrude. Bake resilience into your plan.
- No new trades if sleep <6 hours the prior night; manage existing positions only.
- If traveling or distracted, switch to higher timeframes (daily/weekly) and cancel all intraday rules.
- After any rules breach, log it immediately and assign a small “accountability tax” (e.g., donate or skip next session) to reinforce discipline.
Risk Small, Win Big: Position Sizing That Protects Capital
Louise Bedford hammers one non-negotiable: keep risk tiny so you can trade tomorrow. She frames every decision in R—risking a fixed slice of equity per trade—so outcomes are apples-to-apples and emotions don’t hijack size. Start with a conservative risk per trade (think half a percent while your edge matures) and let consistency, not bravado, do the compounding. When the setup is new or unproven, she dials risk down even further so one dud can’t torch the month.
Bedford also adjusts size to volatility, so the same “R” means the same stress. Use the distance from entry to stop to set quantity, and cut size when markets are jumpy or positions correlate. If you breach a daily loss cap, she stops trading—no revenge clicks, just a reset to protect mental capital. The big win here isn’t a home run; it’s surviving long enough for your edge to express itself.
Trade Mechanics Over Predictions: Let Setup Rules Drive Decisions
Louise Bedford keeps the crystal ball on the shelf and lets her checklist do the heavy lifting. She defines the market state, confirms the setup, and then pulls the trigger only if every box is ticked. That means price structure, a valid trigger, and a prewritten stop and target—nothing else gets a vote. If the market agrees with her rules, she’s in; if not, she walks without a second thought.
Bedford’s mantra is simple: feelings don’t scale, mechanics do. She uses if/then statements to kill hesitation—“if price closes above the trigger, then place the order; if it doesn’t, then pass.” During the trade, she follows the same script for stops, adds, and exits so there’s no mid-flight tinkering. By outsourcing decisions to rules, she strips out bias, speeds up execution, and makes results repeatable session after session.
Use Volatility for Allocation: ATR-Based Position Sizing That Adapts
Louise Bedford treats volatility as the throttle, not the enemy. She measures the distance from entry to stop with ATR, so every trade risks the same R even when markets are wild. Bigger ATR means smaller size; quieter conditions earn a touch more size—simple, mechanical, and calming. This keeps stress consistent and prevents one oversized position from dominating your equity curve.
Bedford also uses volatility to decide when to step back. If ATR surges and correlations spike, she halves new position sizes or skips additions until the storm settles. When ATR compresses, she expects slower trades and lengthens holding time rather than forcing action. The result is a portfolio that breathes with the market, letting the math—not mood—set your exposure.
Diversify by Underlying, Strategy, and Duration to Smooth Drawdowns
Louise Bedford spreads risk across what moves differently and behaves differently. She mixes equities, FX majors, and index products so one theme can’t sink the boat. Then she layers distinct strategy types—trend pullbacks, breakouts, and mean-reversion—so winners can show up in more markets. By staggering holding periods, she avoids the “all trades finish on Friday” problem and flattens the emotional swings that wreck decision-making.
Bedford’s rule of thumb is simple: don’t let any single idea family own more than a slice of your open risk. If the portfolio starts rhyming—same sector, same catalyst, same time horizon—she cuts size or passes. She’d rather hold three small, uncorrelated positions than one giant bet that looks clever until it doesn’t. Over time, this mix-and-match approach reduces volatility of returns, keeps the edge tradable during rough patches, and makes compounding feel boring—in the best possible way.
Define Risk and Exits Upfront: Preplanned Stops Beat Emotions
Louise Bedford makes the exit plan before the entry even exists. She anchors every trade to a fixed initial stop and an R-based target, so there’s no mid-flight bargaining. If the setup requires a stop so wide it bloats risk, she sizes down or skips it entirely. By scripting “if price does X, then I do Y,” she removes the need to “feel” anything when volatility hits.
Her playbook favors partial profits and mechanical trails over hope. Take a chunk at a predefined R target, then trail the rest with an ATR or structure-based stop and never widen it. If price drifts without progress, a time stop closes the trade to free capital and attention. Bedford’s rule is blunt but freeing: write the exit, follow the exit, and let the stats—not the heartbeat—decide the outcome.
Louise Bedford’s message lands like a trading reset: build a rules-driven life around small, consistent risk and let the market come to you. She treats candlesticks as timing tools—not crystal balls—only after the broader context says “yes”: trend structure, clean pullback, and a location that makes sense. Size by the distance to your stop so one trade never hijacks the month, then prewrite exits so you’re not negotiating with fear mid-flight. Diversify by underlying, strategy type, and holding period to keep drawdowns civil, and cap total open risk so clusters can’t snowball. When conditions are choppy or your life is noisy, step aside, slow down, and trade the higher timeframe; the edge is in your discipline, not in more clicks.
Equally important, Louise puts mindset on a checklist just like entries and exits. Shift your identity from “trying to be right” to “following a plan,” and use simple anchors—breathwork to kill trading apnea, if/then statements to kill hesitation, and a daily loss cap to kill revenge. Do cheap proof first: mark up historical charts, forward-test with tiny risk, and only then scale size when the numbers support it. Keep decisions batched and boring—prepare at night, act at the close, and avoid landmines like earnings and top-tier news. In short, trade what you see, risk what you can shrug off, and let a written plan—not your heartbeat—decide what happens next.
Related posts:
- Steve Ward Trader Strategy: Mindset, Habits, and the Journal That Sticks
- Rande Howell Trader Strategy: Mastering Mindset for Probabilistic Performance
- Mandi Pour Rafsendjani Trader Strategy: Mindset Mechanics That Actually Improve Performance
- Trader Strategy Spotlight: From Saving Habits to Consistent Execution
- Relentless Trader Strategy: How Ahmed Ben Chaibah Turns Pressure Into Performance
- Evan Marks Trader Strategy: Aggressive Patience for Peak Performance
- Steve Ward Trader Strategy: How a Performance Coach Builds Consistent Decision-Makers
- Chris Capre Trader Strategy: Neuroscience-Powered Edge for Real-World Performance
- Trader Mindset Meets Market Edge: Rob Lipsett’s Strategy Every Trader Can Steal
- Jerremy Newsome Trader Strategy: How a Pro Day Trader Builds Rules, Mindset, and Momentum
- Merlin De Santis Trader Strategy: The Simple Plan and the “Alive” Mindset Every Trader Can Use
- Tommy Angelo Trader Strategy: The Poker Mindset Every Trader Can Use
