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In this interview, we sit down with Chris Claflin, a seasoned futures trader and host of the Uncharted Podcast. Chris has a unique path to trading, having transitioned from a potential career in orthodontics to full-time trading. He brings a fresh perspective to the world of trading, emphasizing the importance of simplicity and mental discipline. Chris shares his journey from penny stocks to trading futures, offering a candid look at the lessons he’s learned along the way.
In this post, you’ll get an inside look at Chris’s trading strategy, focusing on trend-following techniques that have shaped his approach. We also dive into the critical mindset shifts he had to make to become consistently profitable. Whether you’re just starting or looking to refine your approach, Chris’s insights will help you better understand how to manage risk and follow a disciplined process, which are key to long-term success in trading.
Chris Claflin Playbook & Strategy: How He Actually Trades
The Foundation: Trend-Following with a Twist
Chris’s approach to trading revolves around trend-following, but it’s not as simple as just catching the next uptrend. He believes in capturing trends within the broader market move while protecting himself from the inevitable reversals. This strategy allows him to ride longer moves but stay out of choppy, sideways markets.
- Focus on the bigger picture: Chris uses the daily chart to understand the broader trend. This helps him identify the direction of the market before making smaller, tactical trades.
- Enter on smaller timeframes: Once the trend is established, Chris zooms into a 30-minute chart to find his entry points, aiming to catch short-term trends within the larger movement.
- Avoid fighting the trend: If the market is in an uptrend, he looks for long positions only. If it’s in a downtrend, short positions are favored.
- Ride the waves, not the noise: Chris doesn’t try to trade every small movement in the market. He waits for strong directional moves, avoiding choppy or sideways markets.
This strategy helps Chris maximize his chances of staying with the bigger moves while keeping his risk low during periods of market indecision.
The Tools: Using Price-Based Indicators
Chris isn’t a fan of cluttering his charts with multiple indicators. Instead, he focuses on price-based tools that help him spot trends and confirm entry points. His method is simple but effective for identifying market movements.
- Three moving averages: Chris uses a 7-period, 20-period, and 200-period exponential moving average (EMA). The 7-period EMA helps him track short-term trends, while the 200-period EMA shows the long-term market direction.
- Previous day’s high/low: Chris pays close attention to the previous day’s high and low prices, using these levels as key reference points for setting his trades.
- Previous day’s open/close: The open and close of the previous day also guide his entries and exits, helping him gauge market sentiment.
These indicators aren’t just for making decisions—they act as guides to keep Chris on the right side of the market, with less noise and more focus on real price action.
Risk Management: Protecting the Downside
One of the most crucial aspects of Chris’s strategy is managing risk effectively. He emphasizes that risk management isn’t just about using stop losses, but about building a process to prevent large losses from derailing his trading career.
- Use a fixed risk per trade: Chris always risks a fixed percentage of his trading capital on each trade. For him, this could be around 1-2% of his account balance per trade.
- Set stop losses based on volatility: His stop losses are not arbitrary; they’re placed based on the volatility of the market he’s trading, giving the trade enough room to breathe without risking too much.
- No revenge trading: After a loss, Chris doesn’t try to make the money back by taking high-risk trades. He sticks to his system and waits for the next opportunity.
- Don’t overexpose yourself: Chris carefully manages the number of contracts he trades to ensure that a single loss won’t have a major impact on his capital.
By following these rules, Chris ensures that his trading remains consistent, with a focus on longevity rather than quick wins. This helps him avoid the common pitfall of traders who risk too much on each trade, leading to emotional trading and big losses.
The Mindset: Trading with Discipline
Trading isn’t just about following a system—it’s also about maintaining the right mental approach. Chris believes that psychology plays a massive role in a trader’s success and that managing your emotions is just as important as managing your trades.
- Focus on the process, not profits: Chris emphasizes the importance of sticking to your strategy, even during losing streaks. The goal is to follow the process, knowing that success will come in the long run if you stay disciplined.
- Accept losses as part of the game: Rather than trying to avoid losses, Chris accepts them as part of the journey. This helps him keep his emotions in check and stay focused on the bigger picture.
- Avoid ego-driven trades: Early in his career, Chris made the mistake of trading for the wrong reasons—trying to prove something to himself or others. He now advises traders to avoid making trades based on ego and to instead focus on the market’s behavior.
- Keep a trading journal: Chris tracks every trade he makes in a journal, helping him learn from both his wins and losses. This record keeps him focused on what works and allows him to improve over time.
Chris’s mindset-focused approach keeps him grounded, preventing emotional decision-making that could otherwise derail his trading efforts.
The Market Conditions: Adapting to the Environment
Chris understands that different market conditions require different strategies. He’s not a one-size-fits-all trader; he adapts based on what the market is doing.
- Watch out for low volatility: Chris avoids trading when the market is in a low-volatility state, as it tends to offer fewer opportunities for trend-following strategies. He waits for the market to show a clear direction before taking trades.
- Focus on the long-term trend: During strong trends, Chris looks to capture as much of the move as possible. He adapts his strategy to align with the prevailing market direction, riding the trend until it shows signs of reversal.
- Be selective in sideways markets: When the market is moving sideways, Chris gets very selective with his trades, taking only the best setups. This helps him avoid choppy market conditions where it’s easy to get whipsawed.
By staying flexible and adapting to market conditions, Chris ensures that he’s always aligned with the market’s behavior, maximizing his chances of success.
The Timeframe: Balancing Short and Long-Term Trades
Chris operates somewhere between a day trader and a swing trader, making him a flexible market participant. He doesn’t commit to one timeframe but rather adapts his strategy to the conditions he faces each day.
- Trade on a 30-minute chart: For his entries, Chris uses a 30-minute chart, which gives him enough precision to capture trends without being too caught up in noise.
- Hold trades for hours to days: While he’s not a day trader, Chris typically holds his positions for a few hours or up to a couple of days, depending on how the market evolves.
- Don’t overstay your welcome: Chris knows that trends can reverse quickly, so he doesn’t let his trades run longer than they need to. If the market shifts against him, he’s quick to exit.
Mastering Trend-Following: How to Ride the Big Moves without Getting Whipsawed
In his trading journey, Chris Claflin has perfected the art of trend-following, and it’s at the core of his strategy. His approach is straightforward but powerful—he focuses on capturing the larger market moves while avoiding the noise and chaos of smaller, erratic fluctuations. By using a combination of daily and 30-minute charts, Chris identifies the bigger trends and then looks for entries that align with that direction. This method helps him stay on the right side of the market, whether it’s trending up or down, and minimizes the risk of getting caught in the whipsaw of sideways price action.
What makes Chris’s trend-following method particularly effective is his disciplined focus on the overall market trend and avoiding trades that go against it. He emphasizes that the market’s direction is key, and only by aligning with the trend can traders maximize the chances of riding a sustained move. By staying focused on larger trends and entering shorter timeframes, Chris minimizes the risk of getting burned by market reversals. His strategy isn’t about chasing every price movement but patiently waiting for strong, clear trends that offer the best opportunities.
Keep It Simple: Chris Claflin’s Price-Based Indicators for Effective Trading
Chris Claflin’s trading approach is a testament to the power of simplicity. Rather than overwhelming his charts with a slew of indicators, Chris relies on a select few price-based tools to guide his decisions. His core indicators include a combination of three exponential moving averages (EMAs)—7-period, 20-period, and 200-period—as well as key levels from the previous day’s high, low, open, and close. These straightforward tools help him assess both short-term and long-term market trends, providing clarity in what could otherwise be a noisy trading environment.
For Chris, using price-based indicators means focusing on what truly matters—the price action itself. By keeping his chart clean and his indicators minimal, he avoids the confusion that comes with too many signals. This simplicity allows him to stay disciplined, making decisions based on clear, objective rules instead of getting distracted by irrelevant data. For traders looking to improve their strategy, Chris’s method proves that you don’t need a complicated setup to find success—just a few solid tools and the discipline to use them consistently.
The Key to Longevity: Managing Risk to Protect Your Capital
One of the most critical lessons Chris Claflin emphasizes in his trading strategy is the importance of managing risk. Chris firmly believes that protecting your capital is far more important than focusing on making quick profits. He follows a disciplined approach to risk management by ensuring that he never risks more than a small percentage of his trading capital on any single trade—typically around 1-2%. This allows him to stay in the game longer and avoid catastrophic losses that can wipe out months of hard-earned profits.
Chris also sets his stop losses based on the volatility of the asset he’s trading, giving his trades enough room to breathe without exposing himself to excessive risk. He stresses the importance of sticking to a consistent risk model and not letting emotions drive trading decisions. By sticking to these rules, Chris ensures that he can weather the inevitable drawdowns that come with trading, focusing on long-term consistency rather than short-term wins. His approach to risk management is a cornerstone of his trading success, allowing him to remain disciplined and focused even during tough market periods.
Psychology Over Profits: Why Discipline Trumps Ego in Trading
For Chris Claflin, success in trading is as much about psychology as it is about strategy. Early in his career, Chris struggled with ego-driven trades, often making decisions based on emotion rather than sound analysis. He realized that trading wasn’t just about making profits—it was about mastering his own mindset. Over time, he developed a more disciplined approach, focusing on following his strategy and sticking to his rules, even when his emotions tempted him to act impulsively.
Chris emphasizes that new traders often make the mistake of chasing profits and trying to prove themselves in the market. However, this can lead to reckless decision-making and ultimately, losses. Instead, he advocates for focusing on the process and embracing the inevitable losses that come with the territory. By accepting that losses are part of trading, Chris has been able to stay more grounded and avoid the emotional rollercoaster that often leads to poor performance. His approach shows that emotional control and discipline are key factors in long-term trading success.
Navigating Market Conditions: Adapting Your Strategy to Volatility and Trends
Chris Claflin knows that market conditions aren’t static, and a strategy that works in one environment might not be effective in another. He emphasizes the importance of adapting your approach based on the current market climate. For instance, when markets are volatile and trending, Chris’s trend-following strategy shines, allowing him to capture significant moves. However, during periods of low volatility or sideways movement, he becomes more selective with his trades, reducing risk and avoiding the temptation to force trades.
By staying flexible and adjusting his trading strategy to the market’s behavior, Chris ensures that he’s not overexposed during periods of uncertainty. He also highlights the importance of patience, stressing that traders need to wait for clear signals rather than trying to chase every price move. This ability to adapt helps him avoid getting stuck in a losing position when the market isn’t offering any clear direction, ultimately improving his long-term profitability. Chris’s focus on understanding and reacting to the market environment is a crucial part of his trading success.
Chris Claflin’s journey as a trader is a powerful example of how a disciplined, adaptable approach can lead to consistent success in the markets. Throughout his career, he has emphasized the importance of focusing on trend-following, simplicity in trading tools, and most importantly, managing risk. His strategy revolves around capturing the bigger market moves while staying on the right side of the trend, all while keeping his risk exposure controlled with tight, well-thought-out risk management rules. By relying on price-based indicators and minimalistic chart setups, he keeps his analysis clear and focused, avoiding unnecessary distractions.
A major takeaway from Chris’s story is the critical role psychology plays in trading. He learned early on that ego and impulsive decision-making can undermine even the best strategy. His shift toward discipline and process over profits helped him navigate through periods of loss without losing his way. Chris’s approach also stresses the importance of adapting to different market conditions, showing that a flexible strategy is essential when market volatility changes. By balancing patience with action and accepting losses as part of the process, Chris has built a solid foundation for sustainable, long-term trading success.
