Table of Contents
This interview features Charlie Burton—veteran swing trader, BBC “Traders: Millions by the Minute” personality, and five-time undefeated live trader at the London Forex Show—on the Words of Wisdom podcast. He walks through his 20+ year journey from options and day trading to higher-time-frame execution, why mindset trumps indicators, and how structured rules kept him in the game. If you’ve wondered how a proven trader thinks about transitions, drawdowns, and discipline, this is your guided tour.
You’ll learn the core of Burton’s strategy mindset: spotting simple edges (like gap-fill behavior), turning observations into rules, and then stretching winners by adding as trades work—without blowing up risk. He breaks down the real trader’s path from scalp-driven feedback loops to patient swing holds, how to keep emotions “ripple-small,” and why most traders should cap risk while advanced operators selectively lean in. Expect practical takeaways on journaling equity curves, handling losing streaks, and building a strategy you can actually execute day after day.
Charlie Burton Playbook & Strategy: How He Actually Trades
The Core Idea: Simple Edge, Ruthless Execution
Charlie keeps the charts clean and the rules tight. The goal isn’t to predict every move—it’s to repeatedly execute a small, testable edge with strict risk and calm trade management.
- Trade a focused universe: 4–6 liquid markets (e.g., major FX pairs, S&P/Nasdaq, Gold).
- Use higher timeframes for bias (D1/H4) and execute on H1/M15.
- Only trade with trend: a market is “uptrend” if the 20 EMA > 50 EMA on H4 and price is making higher highs/lows; otherwise, no longs (flip for shorts).
- Skip chop: if 14-day ATR is below its 6-month median, cut size by 50% or stand aside.
- One clean setup beats three messy ones—no overlapping signals in correlated markets.
The Setup: Structure First, Then Trigger
Before any indicator, Charlie prioritizes structure: trend, levels, and space. The bullets below translate that into a repeatable pre-trade checklist.
- Mark H4 swing levels (prior swing high/low) and the daily open; only trade away from the daily open in trend direction.
- Longs: wait for a pullback into a H4 support zone or rising 20 EMA on H1, then a bullish M15 close above the prior M15 bar’s high.
- Shorts: mirror rule—pullback to resistance or falling 20 EMA on H1, then a bearish M15 close below prior M15 low.
- Require “space”: nearest opposing H4 level must be ≥ 1.5× your stop distance. If not, pass.
- Cancel the setup if two consecutive M15 inside bars form at the level (indecision = no trade).
Risk: Preset, Small, and Boring
Capital survives on position sizing, not perfect entries. Set the loss before you chase the win, and let math—not emotion—decide exposure.
- Risk per trade: 0.5% (max 1% when D1 and H4 trends align and ATR is expanding week-over-week).
- Stop goes where the setup is invalid: below/above the H1 swing that defines the pullback (never an arbitrary pip count).
- Daily loss cap: 2R or 1.5%—hit it and you’re done for the session.
- Weekly drawdown brake: at −4R on the week, cut size by 50% until back to breakeven for that week.
- No adding to losers. Ever.
Entries: One Candle, One Decision
The trigger should be so clear you could delegate it. Here’s how to make the entry rule binary and repeatable.
- Long trigger: first M15 candle that closes above prior M15 high while H1 is above its 20 EMA and H4 trend is up.
- Short trigger: first M15 candle that closes below prior M15 low while H1 is below its 20 EMA and H4 trend is down.
- Enter on close; no limit orders that “hope” for a better price.
- If price runs without you (no pullback, no M15 trigger), let it go—no market-chasing.
- Maximum two attempts per level per session; fail twice, stand down.
Trade Management: Let Winners Breathe
Most traders strangle profits by moving stops to breakeven too soon. Charlie’s approach is to protect smart, not early, and let the edge express.
- Initial target = 1.5R; move stop to breakeven only after price closes beyond the next intraday swing in your favor on M15.
- Scale-out: take 50% at 1.5R, let the remainder trail behind the H1 20 EMA or last H1 swing (whichever is tighter).
- For strong trends (D1 + H4 aligned and ATR rising), pyramid once: add 0.5× initial size on the next valid M15 trigger in trend direction; average risk across positions must remain ≤ initial 1R.
- Cancel trade if H1 closes against your direction beyond your entry swing—don’t “wish” it back.
- News guard: no new positions within 10 minutes pre-/post-tier-one release (CPI, NFP, FOMC/BOE/ECB, PMI).
Timing & Sessions: Trade When It Moves
Edge is time-dependent. Focus on sessions that actually deliver range, so your stops and targets make sense.
- FX/indices: primary window = London open to New York lunch (08:00–12:00 NY for entries, manage through 13:30).
- Metals often trend cleanly into NY futures open—prioritize that hour for triggers.
- Avoid the last hour on Fridays and the first hour after Sunday open; widen spreads and thin liquidity distort signals.
- If session ADR (current day’s range) hits 80% of the 10-day ADR, stop initiating fresh positions.
- Two “A-setups” per session max—protect decision quality.
Playbook Tags: Label the Edge You Traded
Winning traders know exactly which play earned the P&L. Tagging creates feedback loops you can actually improve.
- Tag each trade with a play: “H4 pullback + M15 break,” “Daily trend break + retest,” or “Range fade to H4 boundary.”
- Record conditions: ATR regime (high/low), session (London/NY), and correlation notes (e.g., DXY trend if you’re trading EUR/USD/Gold).
- Track slippage and spread at entry; drop pairs/venues that consistently tax >0.2R.
- After 30 trades per tag, cut the bottom performer or tighten rules; double down on the top performer with +0.25% risk (still within your cap).
- If any tag falls below 45% win rate at 1.5R average, retire it or re-specify the trigger.
Psychology: Pre-Trade State > Post-Trade Autopsy
Execution quality comes from a consistent pre-trade routine. Make your state a checklist, not a vibe.
- Two-minute reset before screens: box-breathing 4-4-4-4, then read your rules out loud.
- “If-then” scripts: “If I feel FOMO, then I skip the next candle and re-evaluate at the close.”
- Banter blackout: mute social feeds during your trade window.
- One visual anchor on charts only (e.g., 20/50 EMA and levels); remove anything you didn’t use in the last 50 trades.
- After any tilt event (revenge trade, rule-break), hard stop for the day—no exceptions.
Journaling: Numbers Over Narrative
You can’t scale what you don’t measure. Journal like a pro so you know what to do more of—and what to cut.
- Log every trade with: tag, R risked, R banked, MAE/MFE, time of day, ATR percentile, screenshot.
- Weekly review: export win rate, average R, expectancy by tag and by session; kill the bottom 10% of contexts.
- Equity-curve rule: if the 10-trade moving average of expectancy drops below zero, reduce risk by 50% and trade only your top tag until recovery.
- Keep a “Mistake Ledger”: separate P&L from rule-break costs; the latter must trend to zero over rolling 30 trades.
- Grade each trade A/B/C based on process adherence, not outcome.
Weekly Routine: Prep Like a Professional
Preparation shrinks uncertainty. A simple, consistent weekend process sets up the entire week.
- Mark D1/H4 trend and levels for your 4–6 markets; pre-write two A-setups per market with entry/stop/1.5R target and invalidate conditions.
- Note the week’s top three risk events and pre-decide whether to hold through them or flatten.
- Build a “No-Trade” list for messy charts (overlapping swings, ATR compression); review mid-week.
- Mid-week audit (Wednesday): if you’re 2R or worse, cut size by 50% for Thu–Fri; if +3R or better, stop after your first A-setup win on Friday.
- Archive annotated screenshots into a tag-specific folder for faster pattern recognition.
Advanced: Pyramiding Without Blow-Ups
Adding size can be powerful—if done with structure. These rules keep compounding disciplined and risk-aware.
- Only add after banking partials (≥0.75R realized) and with a stop on the remainder at breakeven or better.
- New add-on must have its own fresh M15 trigger at or near a higher-low/lower-high in trend direction.
- Never exceed 1.5× initial per-trade risk across all active legs.
- Trail the entire stack behind H1 swings; if a counter H1 close print beyond the last swing, exit all legs.
- No pyramids inside ADR exhaustion days (>80% ADR used).
Troubleshooting: What To Do When It’s Not Working
When the edge sputters, tighten the system, not your jaw. These guardrails keep you in the game.
- Three consecutive full-R losses on the same tag → pause that tag for five trading days and review 50 prior examples.
- If slippage spikes across instruments, switch to the two tightest-spread markets only until normal.
- After a rule-break, the next session risk = 0.25% until you complete five A-grade trades.
- If equity drawdown hits 8% from peak, take a 3-day reset: sim-only, rebuild with last month’s best tag.
- Re-validate quarterly: re-backtest the last 6 months for each tag; keep only what still pays ≥0.3R expectancy.
Size Risk First: Position by Volatility, Not Conviction
Charlie Burton hammers home one point: conviction doesn’t pay margin calls—position sizing does. He sizes trades by the market’s current volatility, so a “normal” move can’t knock him out. Think ATR or recent range: wider ranges mean smaller size; quiet tape allows slightly larger size, but never beyond the risk cap. The goal is equalized risk across trades, not equalized lots.
In practice, Charlie Burton risks a fixed fraction per idea and lets volatility set the stop distance, then back-solves for size. If daily ATR expands week-over-week, he halves the position; if it contracts, he keeps it standard—never bigger than his max risk. He caps total daily loss so two bad trades can’t sink the session, and he refuses to add to losers under any circumstances. The message is simple: price can be wild, but your risk should be boring and consistent.
Build a Balanced Book: Diversify Underlying, Strategy, and Duration
Charlie Burton doesn’t try to win with one perfect trade; he spreads his edge across uncorrelated places. He mixes instruments (indices, majors, metals) so one theme can’t dominate his P&L, and he limits exposure to any single macro driver. Strategies are varied on purpose—trend pullbacks, breakouts, and occasional mean-reversion—with strict caps so no style overruns the account. Duration is staggered, too, blending quick intraday plays with swing holds to smooth equity curve noise.
In practice, Charlie Burton sets hard limits: no more than two positions tied to the same driver, and never three trades with identical entry logic. If two charts are highly correlated, he picks one and sizes up slightly instead of duplicating risk across both. He tracks rolling correlation and win-rate by strategy bucket, cutting size on any bucket that slumps while keeping the rest at baseline. The outcome is a portfolio that survives when any single idea has a bad week—and still has enough firepower when conditions turn.
Trade Rules, Not Hunches: Mechanical Entries, Predefined Exits, Zero Exceptions
Charlie Burton trades a checklist, not a feeling. He defines the setup in advance—trend filter, level, and a single candle trigger—and if any ingredient is missing, he passes. Stops and targets are decided before entry, sized by volatility, and he won’t shift them to “see what happens.”
Execution for Charlie Burton is binary: either the candle closes where the plan says, or there’s no trade. If price hesitates—a pair of inside bars at the level, or a failure to break—he cancels and waits for a fresh signal. Once in, he moves to breakeven only after a planned milestone, never because the last tick spooked him. The system is the boss; zero exceptions means zero second-guessing mid-trade.
Choose Your Risk Type: Defined Spreads or Managed Undefined Premium
Charlie Burton is clear about the menu of risk: define it up front or manage it actively in the wild. In his world, “defined” means the loss is fixed before the first tick—hard stop, fixed R, no wiggle room—while “undefined” means you can be right most days, but one runaway move can bite unless you manage it relentlessly. Charlie Burton leans toward defined risk on directional plays and treats any form of open-ended exposure like a power tool—useful, but never without guards.
When markets are jumpy, Charlie Burton tightens to defined risk exclusively and sizes down; when conditions are orderly, he may allow managed, “undefined” exposure only with strict kill-switch rules. The principle stays the same: if you can’t quantify the worst case, you don’t put it on; if you do put it on, you must have a timed exit, a volatility cap, and an automatic flattening level. Traders don’t get paid for heroics—they get paid for choosing the right risk type for the tape and enforcing it trade after trade.
Process Over Prediction: Daily Routines, Journals, and Post-Trade Audits
Charlie Burton treats routine as an edge. He starts with a pre-trade checklist—trend, level, trigger—and won’t open charts until he’s read it aloud. After execution, he logs every trade with tag, R multiple, session, and ATR context so patterns become obvious. The point, Charlie says, is to make improvement inevitable by making it measurable.
Charlie Burton’s audits are blunt: keep what pays, cut what bleeds. He reviews screenshots weekly, ranks setups by expectancy, and hard-retires any tag that falls below threshold until it’s re-specified. When process slips—FOMO, revenge trade—he auto-reduces risk and must post five A-grade trades before scaling back up. Prediction is entertainment; process is the paycheck.
In the end, Charlie Burton’s message is disarmingly simple and brutally effective: size by volatility, define the worst case up front, and execute only when your rules fire—no exceptions. He treats every idea like a small business proposal with fixed costs and a clear plan: trend and structure set the bias, a single candle confirms the trigger, and risk is capped before the first click. He diversifies across instruments, play types, and holding periods so one theme can’t hijack the equity curve, and he cuts overlap so he isn’t secretly doubling the same bet. When markets get jumpy, he tightens to defined risk and smaller size; when they’re orderly, he allows measured adds only after banking partials and moving the rest to safety.
What separates Charlie Burton is the relentless process around that plan. He journals tags, expectancy, MAE/MFE, and session context so improvements become obvious and repeatable, then retires any setup that stops paying until it’s rewritten. He enforces daily and weekly drawdown brakes to protect decision quality, and he uses a pre-trade checklist to keep emotions out of the cockpit. The lesson for traders is clear: stop hunting perfect predictions and build a machine—simple edge, strict risk, and a habit of measurement that makes getting better non-negotiable.
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