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In this interview, Paul Scott — a veteran London Metal Exchange insider turned FX mentor — breaks down how he learned markets on real trading floors and why that matters for retail traders today. He’s blunt, funny, and practical, pulling from decades around bank desks to explain why most retail education misses the point and why price, not indicators, is the common language across metals, FX, and everything in between.
Here’s what you’ll get from this piece: Paul Scott’s supply-and-demand playbook for identifying “wholesale vs. retail” prices, how institutions anchor to levels for decades, and why timeframes and indicator stacks distract you from true value. You’ll learn how to think like a bank trader—mapping cheap/expensive zones, ignoring the noise, and focusing on prices pros revisit again and again—so you can upgrade your entries, exits, and confidence without adding clutter.
Paul Scott Playbook & Strategy: How He Actually Trades
The Core Lens: Trade “Wholesale vs. Retail” Prices
Institutional desks think in simple terms: buy at wholesale, sell at retail. Your job is to locate where price is considered cheap vs. expensive by the big players and then align your trades with that value map. This section shows you how to define and use those zones.
- Mark two-way value: define “cheap” and “expensive” zones on every instrument using obvious, repeatedly-touched prices from the left side of the chart.
- Treat the first revisit to a wholesale (cheap) zone as buy-first, sell-never; treat the first revisit to a retail (expensive) zone as sell-first, buy-never.
- Only fade moves into value; do not chase price between zones unless you have a fresh rotation signal (see below).
- If price slices straight through a zone and holds beyond it for a full session close, flip the zone’s role (former cheap becomes new retail, and vice versa).
- Size smaller on first touch if the trend is strong against your fade; size normal on first touch when the larger trend is neutral or rotating.
Mapping the Levels of Institutions Revisited
Banks revisit specific prices for decades because that’s where real business gets done. Your edge comes from mapping these anchors and waiting for the price to rotate back into them. Here’s how to build and maintain a durable level map.
- Start on the monthly and weekly charts to mark only the most obvious pivots and shelf-like consolidations; keep 8–15 total levels, maximum.
- Promote a level when it has at least three clean historical interactions (turns, accelerations, or acceptance/rejection transitions).
- Demote or delete a level after two consecutive “no reaction” revisits.
- Tag each level with “W” or “R” for wholesale/retail and record the last interaction outcome in your journal.
- Re-audit your map once per week; no day-of-trade re-drawing unless a level is clearly invalidated.
Price, Not Indicators: Strip It Back
The more you stack indicators and timeframes, the more you look away from the magician—price. Keep it simple: you’re reading where business is transacting, not hunting for perfect signals.
- Trade with a naked chart plus horizontal levels; allow a single tool for structure (e.g., session VWAP or a simple moving average) only if it improves execution, not decision.
- Ban trendlines, oscillators, and multi-timeframe “confirmations”; your confirmation is the reaction at the level.
- If you can’t explain a trade to a non-trader in one sentence (“buying the wholesale revisit”), you don’t take it.
- Use time as a filter, not a signal: the longer the price stays above/below a level, the stronger the read.
One Method Across All Markets
Metals, FX, indices, energy—institutions apply the same value logic everywhere. You should, too. This widens your opportunity set without learning a new “setup” for each market.
- Build a single playbook and deploy it on 3–5 uncorrelated instruments (e.g., one FX major, one index future, one metal, one energy).
- Copy your wholesale/retail mapping workflow to each instrument; don’t invent market-specific tweaks.
- If your best read isn’t present on your main instrument, rotate capital to the market that is tagging a level today.
- Keep risk uniform across markets: same position sizing formula, same max daily draw, same stop logic.
Entry & Exit: Trade the Rotation, Not the Middle
You enter where institutions transact and exit where they are likely to revalue. This section turns the map into execution rules you can apply today.
- First touch at a marked wholesale: place a limit to buy in the zone; stop goes beyond the far edge of the zone, target is mid-to-opposite value.
- Require a reaction: if there’s no immediate slowdown (wick, pause, or absorption), scratch quickly at -0.25R to -0.5R and wait for the next test.
- On retests, scale: 60–70% size on first touch, 30–40% on second touch, skip the third touch unless higher-timeframe confluence appears.
- Take partials at the nearest micro-shelf or prior day high/low; move stop to breakeven only after a clean push away from the zone.
- If the rotation accelerates and tags mid-value fast, trail behind one-sided candles until the opposite value is reached or momentum dies.
Risk Sizing That Survives the Business
Survival is an institutional obsession. Adopt position sizing that respects the uncertainty at each level and keeps you in business through cold streaks.
- Risk a fixed fraction of equity per idea (0.25–0.75% per trade; 1.0% absolute max).
- Cap daily loss at 2R and weekly loss at 6R; hard stop trading for the period on breach.
- Use structure-based stops (outside the edge of the zone), not ATR or a fixed pip count; if that makes the stop too large, reduce the size.
- Never add to losers; you can only add on a successful initial response that pulls away from the zone and then retests.
- Keep separate risk buckets for correlated instruments; if EURUSD hits loss limit, reduce size on DXY-related ideas.
News Reprices Value, It Doesn’t Replace It
Headlines can revalue a level from expensive to cheap (or vice versa), but they don’t erase the market’s memory. Treat news as a potential flip, not a reason to abandon your map.
- Before major events, mark nearby levels and predefine both long/short plans; do not initiate in the middle.
- If news breaks and price accepts above a retail level for a full session, flip its tag to wholesale and update your playbook accordingly.
- Post-event, wait at least one structured test of the flipped level before committing full size.
- Avoid impulse trades within the first 5–15 minutes after high-impact releases; let liquidity return.
Broker & Execution Realities
Retail brokers profit when you churn or lose. Act like a desk: limit noise, standardize orders, and remove gimmicks that push you away from price.
- Use limit orders at your levels; only use market orders to scratch when the reaction fails.
- Avoid “education” that encourages indicator stacks or frequent small trades; your edge is rare, high-quality level responses.
- Track slippage and spreads for each instrument/time; pause trading when transaction costs meaningfully degrade R.
- Disable all platform pop-ups and news squawks during execution hours; your plan is written before the open.
Daily Workflow: Institutional Habits on a Retail Desk
Consistency beats brilliance. This routine turns the playbook into a habit loop you can stick with.
- Pre-market (20–30 min): update level tags, review overnight interactions, mark one A+ idea per instrument or stand down.
- During session: take only planned trades at planned prices; log reaction quality, fill, slippage, and outcome in real time.
- Post-market (15–20 min): screenshot each trade with notes on zone quality and your behavior; promote/demote levels as required.
- Weekly: re-audit all instruments, prune levels, and calculate expectancy by setup (first touch vs. retest).
- Monthly: reduce or increase risk by 10–20% based on rolling 3-month expectancy and drawdown profile.
Psychology to Serve the Process
Institutional traders are paid to follow the plan, not to be right. Your mindset should be anchored to execution quality, not P&L on a single trade.
- Grade every session on process: setup selection, entry at level, stop discipline, and reaction management; score 0–5 on each.
- If you break a rule, stop trading for the day and journal the trigger, consequence, and the fix you’ll use tomorrow.
- Use “if–then” statements on your desk: “If price reaches wholesale and stalls, then enter with limit and fixed stop; if it slices through, then stand down.”
- Keep your screens boring: levels, tape, and order tickets; remove all elements that invite prediction or impulse.
Map Wholesale and Retail Zones to Anchor Every Trade
Paul Scott keeps it simple: find where price is cheap for professionals and where it’s expensive, then make those zones your compass. He treats these areas like repeat business addresses—places institutions come back to do size—so the plan is to act at the address, not chase the taxi ride between them. Start by scanning the left side of the chart and marking the most obvious shelves and pivots that price has respected multiple times. Those become your “wholesale” buys and “retail” sells, and everything in the middle is just noise.
When price revisits a wholesale zone, Paul wants you to think buy-first, with risk tucked just beyond the far edge of that area. If the reaction doesn’t show quickly—no stall, wick, or slowdown—scratch small and wait for a cleaner retest rather than forcing it. When price drives through a zone and accepts beyond it, flip the label: former cheap can become the new expensive, and vice versa. Do this across markets with the same lens, and you’ll trade less, think clearly, and anchor every decision to levels that actually matter.
Size Positions by Structure and Volatility, Not Hope or Noise
Paul Scott sizes to the market, not his mood. He starts with a fixed fraction of equity per idea and then lets the chart’s structure decide position size by anchoring stops beyond the far edge of the zone. If the zone is wide or volatility is elevated, he shrinks the size to keep risk per trade constant. When the zone is tight and the reaction is clean, he allows normal size; no full-size bets into chaos.
He caps daily loss and weekly loss, so one bad session can’t spiral into a tilt. Paul Scott never adds to a loser; he only adds after an initial push away from the level and a controlled retest. He tracks slippage and spread—if costs expand, he dials back size or stands down. The goal is survival first, consistency second, and only then compounding.
Trade First Touch Reactions; Scratch Fast When Levels Don’t Hold
Paul Scott treats the first touch of a mapped level as the cleanest read you’ll get. If price tags wholesale, he’s thinking buy-first with a limit inside the zone and a stop just beyond its far edge. The reaction should be visible fast—stall, wick, or a small absorption footprint—otherwise the idea is likely wrong. No heroics: if the level behaves like air, he scratches quickly and waits for a better test.
On a valid reaction, Paul Scott prefers to take partials at the nearest micro-shelf and then let the rest target mid-to-opposite value. If price returns for a second touch, he scales smaller and demands an equally clean response before committing. Third touches are generally avoided unless a higher-timeframe context improves the odds. The rule set is simple: act decisively on first touch, manage tightly, and abandon levels that don’t pay you promptly.
Diversify Across Instruments: One Simple Playbook for All Markets
Paul Scott doesn’t carry a different toolkit for every market; he carries one playbook and spreads it across uncorrelated instruments. Metals, FX, indices, energy—the logic is the same: map wholesale/retail, wait for the tag, trade the reaction. He keeps a small roster of 3–5 products, so there’s usually a clean level somewhere without forcing trades. When EURUSD is messy, maybe gold is tagging wholesale; when gold is drifting, crude might be pressing retail.
Paul Scott also standardizes risk and execution so capital rotates, not the rules. Same sizing formula, same stop placement beyond the zone, same partials at nearby shelves, regardless of the ticker. He tracks correlation and cool size when products move as one, avoiding the “different symbols, same trade” trap. This way, he expands opportunity while keeping decisions simple, letting the market choose the venue while his process stays identical.
Follow Process Over Prediction: Plan, Execute, Review, Adjust
Paul Scott measures his success by rule-following, not crystal-ball calls. Before the session, he writes the plan in plain language: target levels, triggers, invalidation, and size. During execution, he ignores headlines and opinions and focuses on how the price behaves at the mapped address. If the behavior doesn’t match the plan, he stands down and waits.
After the session, Paul Scott grades himself on selection, entry discipline, stop integrity, and management—not just P&L. He screenshots each trade, notes what the level did, and records whether he reacted or predicted. Any broken rule triggers a small penalty the next day: reduced size and a written fix. The loop is simple and repeatable—plan, execute, review, adjust—until the behavior is automatic.
In the end, Paul Scott’s edge boils down to reading price the way real desks do: map where business actually happens, act at those addresses, and ignore everything else. He treats levels as “wholesale vs. retail” zones, not magic lines, and he lets reactions—not predictions—tell him what to do next. That keeps his trading brutally simple: buy cheap, sell expensive, scratch fast when a level behaves like air. He carries this same lens across markets, rotates to where the clean tag is happening today, and standardizes risk so survival isn’t left to mood or headlines.
The rest is disciplined mechanics. Paul Scott sizes by structure and volatility, puts stops beyond the far edge of value, and takes partials at logical shelves on the way back to fair. If news flips a level’s role, he updates the map and waits for a proper test instead of chasing. Every session, he grades the process over P&L—plan, execute, review, adjust—so the behavior gets cleaner while the chart stays naked. The lesson is clear: anchor your trading to levels institutions respect, run one simple playbook everywhere, and protect your capital so the compounding can do its job.
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