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This interview features Courtney Smith—legendary trader, educator, and former head of global derivatives—sharing battle-tested lessons from five decades in the markets. Recorded while Courtney was teaching in the UAE, it’s a straight-talk session on why he matters: number-one-ranked funds, bestselling books, and a reputation for turning complex ideas into repeatable edges that everyday traders can actually use.
In this piece, you’ll learn Courtney Smith’s core playbook: build testable systems, add simple trend filters, track stats like win rate and average win/loss, and then execute with monk-level discipline. You’ll also see how he merges fundamentals with price, why “trade less, trade better” beats forcing setups, and how a humble “manager of techniques” mindset helps you follow rules when it counts. Expect practical, beginner-friendly ideas you can plug into your routine today—without fluff, and with a clear path to trade what the market tells you, not what your ego wants.
Courtney Smith Playbook & Strategy: How He Actually Trades
Core philosophy: be a “manager of techniques,” not a prediction hero
Courtney Smith treats trading like running a set of machines. He doesn’t argue with price or chase being “right”; he manages proven techniques and executes them cleanly. Your edge comes from rules plus flawless execution, not hot takes.
- Run a small roster of proven techniques and think of yourself as their manager.
- Let the market tell you what to do: buy in bull phases, sell/stand down in bear phases—no ego fights with price.
- Review each technique monthly and keep only those still producing positive expectancy.
Build testable systems first, then add simple filters
Smith insists on ideas you can test and follow. Once a method works on paper, you earn by sticking to it and adding light filters that boost expectancy without complicating execution.
- Choose techniques you can backtest (e.g., channel/Donchian-style breakouts) and commit to their rules.
- Add a basic trend filter (e.g., only take longs when the 10-day MA is rising) to raise your average win/loss and win rate.
- Keep anything that lifts average winner vs. average loser above ~1.2x; kill tweaks that don’t move those stats.
Entries & exits Smith favors: channel breakouts with a “rejection” twist
One of Smith’s hallmark techniques is a medium-term channel breakout (think ~55-day highs/lows) to capture the big moves. He often layers a “rejection rule” to protect gains and improve compounding when breakouts falter.
- Entry: buy on an upside break of a multi-week channel high; sell/short on a downside break of the channel low.
- Add the “rejection rule”: if price quickly falls back into the channel after a breakout, exit and wait for the next valid signal; the aim is to keep breakout profits and avoid churn.
- Initial stop: place beyond the opposite side of the channel or an ATR-based level; trail behind the channel or ATR to ride trends.
Trade less, focus better.
Smith pushes traders to do fewer, higher-quality trades. Cutting mediocre setups improves psychology and expectancy because your average winner grows relative to losers.
- Before placing a trade, try to talk yourself out of it—only the best survive this sanity check.
- Reduce the number of markets/timeframes you trade until your stats improve; then scale selectively.
- If a filter eliminates half your trades but enlarges average winners versus losers, keep the filter.
Simple, cross-asset execution
He’ll trade stocks, futures, options, and FX, across day, swing, and position horizons—but the organization stays simple so execution stays clean.
- For non-day trades, maintain a “trade tracker” (spreadsheet) with: technique name, entry/exit orders, notes (e.g., any fundamental bias). Reconcile with your broker daily.
- For day trading, use a straightforward tally sheet (buys one side, sells the other, running position down the middle) so you always know if you’re net long or short.
- Keep bookkeeping minimal; spend your energy on following rules and placing orders without hesitation.
Discipline beats intelligence (especially on exits)
Smith’s view: the hard part is between your ears. Most traders override systems the moment they’re in a trade; the fix is pre-committing to rule-based exits you’ll actually honor.
- Use the same logic that got you in to get you out; don’t improvise exits after you’re in the position.
- Decide exits before entry (stop, profit target, or trailing rule) and enter them as working orders immediately.
- Never change an exit because of hope or fear; only change rules during scheduled reviews—never mid-trade.
Process over outcome: goals you control
He avoids money targets and focuses on processes he can control—entries, exits, and flawless execution of proven systems. That mindset removes emotional pressure and keeps you consistent through drawdowns.
- Set goals like “zero rule breaks this month” or “weekly technique review completed,” not “$X profit.”
- Track reliability (win rate), average win, and average loss; choose one metric to improve each quarter and test changes methodically.
- Treat each technique as a business line; if a line underperforms after a fair sample, pause it and re-test.
Blend fundamentals with price to stay aligned with reality
Though rule-driven, Smith stays curious about macro drivers—especially in markets like oil and FX—because better real-world understanding supports better conviction and risk sizing.
- Maintain a short list of fundamental drivers for each market you trade (e.g., rates for FX, inventories for energies); update them weekly.
- Only let fundamentals filter or size trades—never override price-based entries/exits.
- If fundamentals and price conflict, default to price; use a smaller size until the conflict resolves.
Size positions by volatility; cap dollar risk before the trade goes on.
Courtney Smith hammers this first: risk is the only input you fully control. Before clicking buy or sell, decide your maximum dollar loss per trade and make the position size fit the market’s volatility. Use a simple yardstick like ATR or recent daily range so a “normal” swing doesn’t knock you out prematurely. If the stop needs to be wider because volatility is hot, you shrink the size to keep the same dollar risk. If the stop can be tight because volatility is calm, you can take more shares or contracts—still within your fixed risk cap.
This keeps losers uniform and lets winners breathe, which is how equity curves smooth out over time. Courtney Smith suggests picking one risk number you can sleep with—say 0.5%–1% of equity—and sticking to it across markets. For correlated positions, treat them as one risk bucket so your total dollar risk stays capped. Enter the stop at the same time as the order, and don’t move it wider; if the price invalidates the setup, the trade is over.
Trade the mechanics, not predictions: let price action dictate decisions.
Courtney Smith keeps it simple: the system speaks, you listen. Instead of forecasting headlines or macro twists, he follows clear entry and exit rules that react to what price is actually doing. When the signal triggers, he executes without second-guessing the news cycle or his gut. No opinions, just a checklist and orders that get placed.
This shift from “being right” to “doing right” builds consistency fast. Courtney Smith emphasizes that every deviation—hesitating, chasing, or adding rules mid-trade—kills expectancy. If price invalidates the setup, he’s out; if it follows through, he trails it according to plan. The result is fewer emotional swings and more repeatable outcomes.
Diversify across underlying, strategy, and duration to smooth the equity curve.
Courtney Smith treats diversification as a shock absorber for your account. Instead of stacking the same type of bet, he spreads risk across different underlyings so one sector or currency pair can’t dictate results. He also mixes uncorrelated techniques—trend, breakout, and mean-reversion—so at least one engine tends to fire in most conditions. That blend cuts drawdowns and keeps you trading when single-style specialists are sidelined.
Time matters too, so Courtney Smith layers trades across durations: intraday, swing, and position. Shorter trades can pay the bills while longer positions capture the big waves, reducing reliance on any single cycle. He sizes each sleeve independently, then caps total portfolio risk so correlations don’t sneak up during volatility spikes. The goal isn’t maximum excitement—it’s a smoother line that lets you stay disciplined and keep compounding.
Use simple trend filters and breakout rules; exit fast on rejection.
Courtney Smith likes rules you can execute without drama. A basic trend filter—like price above a rising short-term moving average—keeps you trading with the tide, not against it. When a breakout clears a recent range high with strength, he takes it; no “what if” debates or news-chasing detours. If price slips back into the range quickly, that’s a rejection, and the trade is done.
This fast exit protects the average winner and starves the average loser, which is the whole expectancy game Courtney Smith cares about. He avoids complicated overlays that slow execution or create subjective wiggle room. The goal is clean signals, quick rejections, and long rides when momentum actually sticks. Keep the logic consistent across markets so you can scale decisions and review results without excuses.
Predefine stops, targets, and review cadence to enforce process discipline.
Courtney Smith is big on committing to exits before the trade lives. Place the stop and target at entry—ideally as an OCO—so emotion never negotiates with risk. Never widen a stop; only trail it tighter according to a written rule. If the setup is invalid, you’re out, not “giving it room.” Targets aren’t hopes; they’re numbers decided by structure or stats, and they stay fixed unless the plan says otherwise.
Process doesn’t end at execution, so Courtney Smith schedules reviews like clockwork. After each trade, log the rationale, entry/exit, rule breaks, and what the system would have done without interference. Weekly, scan metrics—win rate, average win/loss, expectancy—and pick a single metric to improve with one controlled tweak. Monthly, prune or pause any technique that fails a fair-sample test and redeploy capital to what’s working. The cadence is the guardrail: plan, execute, debrief, adjust—then repeat without drama.
In the end, Courtney Smith’s message is refreshingly consistent: build simple, testable techniques, size by volatility, and then execute with zero drama. He wants you to pick a fixed dollar risk, let ATR or recent range set your stop distance, and let that math dictate position size—never the other way around. Signals come from mechanics, not opinions; when price confirms, you act, and when it invalidates, you’re out. A basic trend filter keeps you aligned with the tide; breakouts get a chance to run, and quick rejections get cut without hesitation. Diversification happens across underlyings, strategies, and timeframes, so one patch of weather can’t capsize the boat.
Courtney Smith also pushes a professional cadence: define stops and targets at entry, log every trade, and run scheduled reviews that prune weak techniques and reinforce strong ones. Focus on expectancy levers—win rate, average win, average loss—and change only one variable at a time so you know what actually helped. Fundamentals can inform conviction and sizing, but price rules the entries and exits. Most of all, he treats himself as a manager of techniques, not a forecaster—showing that steady process, not hero calls, is how accounts survive and compound.
