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Courtney Smith—veteran global macro trader and author—sits down for a candid interview about how he really trades, why simplicity beats cleverness, and how he’s still compounding after five decades in the game. He explains his blend of fundamentals for the big picture and technicals for execution, plus the mindset shifts that separate pros from ego-driven dabblers. If you’ve ever wondered how a top performer frames markets, times entries, and keeps psychology from wrecking good ideas, this one’s for you.
In this piece, you’ll learn Courtney Smith’s core playbook: use fundamentals to spot the major move, then let technical breakouts confirm and carry you—while strict risk rules and a simple, digestible system keep you from self-sabotage. We’ll cover the discipline traps that cause traders to cherry-pick losers, how to size and stick with winners instead of sniping quick profits, and why a clean channel-breakout approach often outperforms over-engineered setups. Expect practical, beginner-friendly takeaways you can apply to your next trade.
Courtney Smith Playbook & Strategy: How He Actually Trades
Core Philosophy: Simple Rules, Big Edges
Courtney Smith keeps the strategy simple: fundamentals set the wind, technicals set the sail. He aims to catch major, sustained moves with clear, rules-based execution so emotions never drive decisions. Here’s how he frames markets so the process stays repeatable.
- Trade in the direction of the dominant trend; never “predict” reversals.
- Use fundamentals to define bias; use price to time entries.
- Write rules you can follow on a busy day—if a rule needs a paragraph, it’s probably too complex.
- Track results by rule, not by opinion; keep/change rules only via data.
Market Selection & Macro Bias
He starts at the top: which markets have a real reason to move? Courtney looks for fundamental drivers that can persist—policy cycles, growth/inflation trends, supply/demand shifts—then expresses that view in the cleanest instruments. You’ll take fewer, higher-quality shots.
- Screen for markets with clear macro catalysts (rates, inflation, policy, earnings cycles, commodity balance).
- Trade instruments that translate the catalyst cleanly (e.g., currencies for policy differentials, commodities for supply shocks, indices for growth).
- Set a weekly “bias tag” for each market: bullish, bearish, or neutral—no “maybe.”
- Avoid markets without a fundamental story or liquidity; indecision costs attention.
Setup: Breakout With Confirmation
Courtney times entries with straightforward breakouts—let the market show its hand. The goal isn’t to buy the low; it’s to buy strength with momentum confirmation and give the trend room to work.
- Use a 20-day high/low channel for signal; go long on a daily close above the upper band, short below the lower band.
- Require confirmation: price must also close above the prior swing high (long) or below the prior swing low (short).
- Skip trades if breakout bar’s range > 1.8× ATR(14) (excess volatility = trap risk).
- Enter on the next market open after a valid close; no anticipatory entries.
Risk & Position Sizing
He treats risk as a fixed cost of doing business. Size is volatility-aware, so one trade doesn’t dominate outcomes, and stop placement is mechanical to prevent “wishful thinking.”
- Risk a fixed 0.5%–1.0% of equity per trade; never exceed 2% on correlated positions.
- Initial stop: 1.5× ATR(14) from entry (beyond recent “noise”).
- Position size = (Account Risk $) ÷ (Stop distance in $).
- If ATR expands 50%+ post-entry, halve size on the next session open to normalize risk.
Trade Management: Let Winners Live, Cut Losers Fast
Courtney’s edge compounds by staying in trends and exiting only when evidence changes. He adds with structure and exits on rules—not vibes.
- Trail stop with a 2× ATR(14) chandelier from the highest close (longs) / lowest close (shorts).
- Partial take-profit: sell 1/3 at +2R, move stop to breakeven; let the rest trail.
- Pyramiding: add 1 unit each time price advances another 1.5× ATR in your favor, max 3 adds; each add gets its own 1.5× ATR initial stop and shares the global trailing stop.
- Exit if two daily closes occur back inside the 20-day channel (trend may be stalling).
Timing Filters: Stay Out of the Chop
The biggest leak is trading when there’s no edge. Courtney filters for trend quality and avoids structurally noisy sessions.
- Only trade when ADX(14) ≥ 20 at signal; skip if below (weak trend).
- Avoid entries within 24 hours of top-tier macro events for that asset (e.g., FOMC for USD pairs).
- If the VIX (or asset’s implied vol) spikes > 2 standard deviations, reduce new risk by 50% for two sessions.
- No Friday new positions in thin markets; manage existing risk only.
Multi-Timeframe Alignment
He keeps the higher timeframe as the compass and the lower as the trigger. You don’t need five screens—just a clean top-down stack.
- Weekly chart sets bias; daily chart triggers entries; 4H chart refines stop placement.
- Only take daily breakouts that align with the weekly direction.
- If the daily signal conflicts with the weekly bias, pass—next bus is coming.
Playbook for Currencies, Indices, and Commodities
Same logic, slightly different wrinkles. Courtney adapts the rules to the instrument’s personality without changing the core.
- FX: Respect session structure—enter near London/New York overlap for liquidity; widen stops by 10% on major data days.
- Indices: Use cash-session closes for signals; ignore overnight wicks for confirmation.
- Commodities: Add a seasonality tag (tailwind, headwind, neutral) from long-term patterns; cut size by 25% in strong headwinds.
Daily Routine: From Prep to Post-Trade
Consistency beats brilliance. Courtney’s routine ensures every decision is prepared before the bell and reviewed after.
- Pre-market (30–45 min): update bias tags, scan for 20-day channel breaks, log candidate tickers with ATR and position sizes precomputed.
- Midday: no chart-watching—alerts only; avoid micro-managing stops.
- After close: record outcomes, R-multiples, rule followed/violated, and any discretionary override (aim for zero overrides).
Psychology: Systems Over Feelings
He protects the process from human noise. The cure for tilt is structure; the cure for FOMO is a next-trade plan.
- Pre-commit in writing: entry, stop, size, adds, exits—before placing the order.
- Cap total open risk at 4R across the book; if exceeded, reduce weakest positions first.
- Use the “three-strike” rule: three rule violations in a month trigger an auto-size cut by 50% for the next 20 trades.
Error Handling: When Things Go Off Script
Losing trades are inevitable; undisciplined losses aren’t. Courtney’s recovery rules keep the equity curve from cascading.
- If a stop-gap slips (gap through stop), treat it as 1.5× loss and reduce the next two trade risks by 50%.
- After two consecutive full-stop losses on the same instrument, pause that instrument until a fresh weekly bias reconfirms.
- If hit rate < 35% over the last 50 trades but expectancy ≥ 0.3R, don’t “fix” the system—variance is normal; keep size stable.
Record-Keeping: Data That Drives Decisions
He audits the system, not his feelings. The journal is built to answer whether each rule still earns its keep.
- Log for each trade: market, bias tag, signal date, ATR, R-risked, R-returned, adds taken, exit rule, and any macro event overlap.
- Review monthly: top/worst 3 rules by expectancy; cut or tweak the worst if statistically significant over 100+ samples.
- Track “regret trades” (outside plan). Goal: ≤ 2% of total tickets.
Example Workflow: One Clean Trade, Start to Finish
Here’s how it flows when everything clicks. Keep it boring; boring prints money.
- Weekly: EURUSD tagged bearish on diverging rate expectations.
- Daily: Close breaks 20-day low and prior swing low; ADX(14) = 23 → valid.
- Entry: Next session open; risk 1% with 1.5× ATR stop; position size calculated from stop distance.
- Management: Take 1/3 at +2R, trail 2× ATR; add twice on +1.5× ATR steps.
- Exit: Two daily closes back inside the 20-day channel end the trade; log R and rule outcomes.
Optimization Without Curve-Fit
Courtney improves durability, not just past performance. Tests must generalize, and simpler usually wins.
- When testing, prefer robustness checks (walk-forward, parameter sweeps) over single-parameter “best values.”
- Keep channels/ATR windows in broad, round ranges (e.g., 18–22) to avoid brittle sensitivity.
- Any change must improve expectancy across multiple assets and regimes, not just one backtest period.
Portfolio Construction: Correlation Is a Position
He treats correlation like leverage. Bunching into the same theme magnifies risk, so he caps it at the book level.
- Maximum of 2 positions per macro theme (e.g., “strong USD”); third signal is skipped or sized to 0.25R.
- If two open trades share > 0.7 rolling 20-day correlation, treat them as one position for risk caps.
- Rebalance weekly: trim the smallest winners to free risk for new, higher-quality signals.
Execution Standards: Slippage, Spreads, and Alerts
Edges live in details. Courtney codifies execution so the plan survives real-world frictions.
- Use stop-market orders for breakouts; avoid stop-limits to prevent missed fills on fast moves.
- If live spread > 1.5× its 30-day median, defer entry until spread normalizes or halve size.
- Set alerts at channel edges, ATR milestones, and trailing-stop levels—execute the plan, don’t chase candles.
“Do/Don’t” Quick Reference (Pin This)
This is the distilled rulebook you can apply starting today. Keep it visible until it’s muscle memory.
- Do: trade with weekly bias, enter on daily channel breaks with ADX confirmation.
- Do: risk 0.5%–1.0% per trade, 1.5× ATR initial stop, 2× ATR trailing stop.
- Do: take 1/3 at +2R, pyramid on +1.5× ATR steps, cap total open risk at 4R.
- Don’t: fade trends, add to losers, or override rules after the fact.
- Don’t: run correlated positions past the theme cap or trade right into major data.
Size Risk First: Fixed R Per Trade, Never Add to Losers
Courtney Smith starts every trade by deciding risk, not by hunting entries. He fixes a small, repeatable R—say 0.5% to 1% of equity—so one idea can’t hijack the account. That pre-set burn rate turns uncertainty into a known cost, which frees him to execute the plan without flinching. When the stop is hit, it’s just one R, not a drama.
He also refuses to add to losers because that breaks the math and the mindset. If a position dips, Courtney Smith lets the stop do its job and moves on to the next high-quality setup. Winners can be scaled with structure; losers get cut at the planned level—no averaging, no hope trades. The result is simple: small losses, occasional big gains, and a stress level that lets you trade tomorrow.
Let Volatility Decide Position Size; Use ATR Stops, Trail Winners
Courtney Smith treats volatility as the throttle on every trade. He measures current noise with ATR and sets the initial stop at a fixed multiple beyond entry, so random wiggles don’t knock him out. With the stop distance defined, he sizes the position by dividing his chosen risk per trade by that dollar distance, which keeps exposure consistent across calm and wild markets. This turns sizing into a math problem, not a mood, and it stops one spicy ticker from dominating the account.
Once in, Courtney Smith lets a multiple-of-ATR trailing stop manage the winner instead of guessing tops. As volatility expands, the trail naturally steps back to avoid normal shakeouts; when price stalls, the trail catches up and exits him cleanly. If ATR suddenly spikes, he reduces new risk or trims position to keep the same R on the table. The effect is simple and powerful: losers are capped, winners breathe, and returns come from riding the move—not from predicting it.
Diversify By Theme, Instrument, And Timeframe; Cap Correlated Exposure Firmly
Courtney Smith spreads risk across ideas that actually behave differently. He doesn’t stack five trades that are all just “short euro” in disguise; he limits positions per macro theme so a single narrative can’t flatten the book. He diversifies by instrument and timeframe too—mixing FX, indices, and commodities, and staggering holds from swing to position—so no single noise pattern rules the day.
To keep it tight, Courtney Smith watches correlation like a hawk and treats it as hidden leverage. If two names move together above a set threshold, he sizes them as one position or cuts the weaker and frees up risk. He rebalances weekly to trim crowding and make room for fresher, higher-quality edges. The payoff is smoother equity, fewer cluster losses, and the freedom to keep pressing winners without betting the farm on one story.
Trade Breakout Mechanics, Not Predictions; Enter On Closes, Avoid Noise
Courtney Smith prefers price to tell the story, not a hunch. He waits for a confirmed breakout on the daily close so the market commits before he does, avoiding the intraday head-fakes that lure impatient traders. That simple “close-only” rule cuts a lot of emotional churn and replaces it with a clear yes/no signal. If the breakout doesn’t stick into the close, he simply passes and preserves capital.
Once a valid close prints, Courtney Smith executes the next session and lets the stop and trail do the heavy lifting. He ignores mid-bar flutters, choosing to manage positions only on completed bars, so decisions aren’t yanked around by noise. If price snaps back into the prior range after entry, the rules trigger an exit, and he moves on—no story, no debate. This mechanical flow keeps him aligned with real momentum and out of the prediction business.
Process Discipline Daily: Pre-Plan Entries, Journal R-Multiples, Enforce Rules
Courtney Smith runs each day from a written plan, not from vibes. Before the session, he pre-commits entry, stop, target logic, and position size so execution is just clicking the prepared orders. He sets alerts at key prices and turns off chart-scrolling to avoid impulsive tweaks. If the setup doesn’t meet the plan, he does nothing and protects his edge by staying flat.
After the close, Courtney Smith logs every trade in R-multiples with the exact rule that triggered each decision. He flags any deviation from the plan and applies consequences (like a temporary size cut) to keep discipline sharp. Weekly, he reviews expectancy by rule and trims anything that isn’t pulling weight. The routine is simple: plan hard, execute simply, review honestly, and the account follows the process—not emotions.
Courtney Smith’s edge comes from turning trading into a repeatable production line: define risk first, let volatility set the distance to failure, and only act when price proves the point. He doesn’t chase forecasts or clever narratives; he aligns a macro bias with simple breakout mechanics and lets the numbers do the heavy lifting. That combination—fundamental wind, technical sail—keeps him on the right side of big trends while filtering out most of the noise that trips up discretionary traders.
He diversifies by theme, instrument, and time frame, so no single story can sink the book, caps correlated exposure like it’s hidden leverage, and runs every position through the same risk math. Losers are small by design and never averaged; winners are managed with ATR-based trails and, when appropriate, pyramided with structure. The daily routine is the glue: pre-plan entries and stops, execute only on completed signals, and journal in R-multiples so decisions are judged by rules, not memory. Taken together, Courtney Smith’s lesson is brutally practical—trade what’s happening, size like a pro, review like an engineer, and let the process—not your feelings—compound the account.
