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Chris Weston—Head of Research at Pepperstone—sits down for a fresh, straight-talk interview about how real markets move and how traders should adapt. He’s been watching the evolution of market structure firsthand: options-driven flows, leveraged ETF rebalancing, and volatility targeting funds shaping intraday action across indices, FX, crypto, and commodities. Weston matters because he strips away the “headline explains the move” myth and shows how price aggregates the beliefs of big players and bots—giving retail traders a cleaner roadmap to trade what’s in front of them.
In this post, you’ll learn Chris Weston’s practical playbook: treat price action as your core “fundamental,” use rules-based entries and exits to stay unemotional, size positions to volatility, and focus on finding markets that fit your system instead of forcing trades. You’ll also see how to think about flow (gamma positioning, CTAs, on-chain liquidations), when to hold winners and cut losers fast, and why scanning for momentum or mean-reversion conditions beats prediction. If you want a beginner-friendly framework to trade with confidence—across FX, indices, crypto, or commodities—this interview distills what actually works and how to apply it today.
Chris Weston Playbook & Strategy: How He Actually Trades
Big Idea: Be a Slave to Price, Not Narratives
Markets move on flows and positioning long before headlines make sense. Chris Weston focuses on what price is doing now and builds rules that keep him aligned with that reality. This section turns that mindset into daily habits you can run before every session.
- Trade in the direction of the most recent higher-timeframe break: only buy if price closed above yesterday’s value area/high, only sell if it closed below yesterday’s value area/low.
- If a market is making new 20-day highs, allow long setups only; if making new 20-day lows, allow shorts only—no “fading just because it’s extended.”
- Use a simple momentum gate: 5-period EMA above 20-period EMA and RSI(14) > 55 to permit longs; inverse for shorts. If neither condition is met, you’re in “no-trade/mean-reversion” mode.
- When price breaks a key level on rising volume or during a high-liquidity session (London/NY), hold the trade for the session’s full window instead of scalping out early.
- Cancel all setups 5 minutes before tier-1 data and re-assess 5 minutes after the first post-data 1-minute candle closes outside its initial spike range.
Flow First: Read Who’s Forcing the Tape
He pays attention to forces that mechanically push price—options dealers hedging, CTA momentum, and leveraged ETF rebalancing. You don’t need their books; you just need rules that detect when flow is likely in control.
- If the day’s range expands >1.25× the 20-day Average True Range (ATR) by NY lunch, assume flow-driven day—favor continuation entries on shallow pullbacks (38.2–50% of the most recent impulse).
- Track opening drive strength: if the first 30 minutes trade one-way and close near extremes, only trade with that direction until a 1×ATR counter move prints.
- On options expiry (weekly/monthly) or into major index rebalances, reduce counter-trend risk by half and scale out at fixed +1R and +2R targets instead of trailing for home runs.
- If a market flips from negative to positive tick breadth (or FX heatmap breadth) and holds for 30 minutes, treat that as confirmation to pyramid with tight add-rules (+0.5R add above prior swing).
- When VIX (or asset-specific vol index) breaks below its 10-day low, shift to “trend-grind” playbook: wider initial stop, take profit in thirds, trail with a 10-ema of lows/highs.
Preparation: Build a Weekly Playbook, Then Execute Daily
He structures the week around event risk and directional bias, then executes a simple daily checklist. Here’s how to replicate that structure so you’re never guessing at the open.
- Sunday build: mark the 1-week opening range (first Asia session high/low) and plan trades only in the direction of a valid weekly breakout.
- Tag assets “Strong/Weak/Neutral” each morning using 10-day total return; only trade Strong long and Weak short. Neutral = watchlist only.
- Map three levels per instrument: Breakout (entry zone), Invalid (hard stop zone), and Take-Profit (measured move = last impulse length). Write them down before the session.
- Event calendar rule: if tier-1 data can swing your market (NFP, CPI, central bank), cut size by 50% unless your stop is outside the pre-data implied move (use options-implied range or 0.75×ATR as proxy).
- End-of-day: capture one screenshot with entries/exits and a 30-word reason; tag the regime (trend/mean-reversion/flow day). This fuels next week’s adjustments.
Entries & Exits: Simple Triggers, Hard Stops
He favors simple, rules-based triggers that remove hesitation. The aim is to cut losers without debate and hold winners with a trailing plan that fits the regime.
- Breakout entry: place a stop order 1 tick above/below the session high/low only if the 5-minute closes beyond that level and higher-timeframe bias agrees.
- Pullback entry: in a trend, buy the first bullish 5-minute close back above the 9-EMA after a two-leg pullback; stop goes 1×ATR(14, 5-min) below the signal bar low (inverse for shorts).
- Mean-reversion (only when momentum gate is OFF): fade back to VWAP after a ±1.5× intraday ATR extension; take profit at VWAP, stop at 0.5×ATR past the extreme.
- Initial risk per trade: 0.5% of account in normal conditions; 0.25% on high-vol event days. Never widen stops—reduce size instead.
- Exit rules: first scale at +1R, move stop to breakeven; trail remainder with a chandelier stop (ATR(14) × 2.5) in trends, or fixed +2R in range conditions.
Position Sizing: Volatility and Correlation Do the Heavy Lifting
Sizing is adaptive. He aligns trade size to realized volatility and limits correlation so one theme doesn’t sink the book.
- Position size = (Account × Risk%) ÷ (Stop distance). Compute stop distance using ATR or structure; never exceed the size that would lose more than your per-trade Risk%.
- Cap same-theme exposure at 1.5% total risk (e.g., USD longs across pairs, or AI-heavy equities). If two instruments share >0.7 rolling 20-day correlation, treat them as one trade.
- In volatility spikes (ATR up >30% vs 20-day baseline), cut risk% by one-third and widen stops by one-third—keep dollars at risk constant.
- For pyramids, add only when unrealized >+1R and the new stop on the whole position still risks ≤ initial trade risk.
- If drawdown reaches 3R in a single session, go flat for the day—review and tag regime mismatch before resuming.
Levels & Structure: Let the Market Tell You Where You’re Wrong
He uses clean, visible levels that everyone sees—weekly highs/lows, round numbers, prior CPI/Fed day extremes—to anchor risk. The key is binary thinking: above bullish, below bearish.
- Pre-mark prior week’s high/low, prior day’s high/low, and last major event high/low; only trade toward the nearest liquidity pocket (the next obvious level).
- A break is valid only on a candle close beyond the level plus a buffer of 0.1×ATR; wicks aren’t breaks.
- If price reclaims a broken level within 15 minutes, exit—failed breaks often run the other way; reverse only if your momentum gate flips too.
- On indices and FX, watch the first test of round numbers (00/50). If the first touch rejects with a range >0.25×ATR, take the fade to VWAP with half size.
- Don’t average losers. If a level fails, flatten and wait for the next setup at the next level—no exceptions.
Event Playbook: When Data Drops and Central Banks Speak
He respects scheduled risk. The goal is to avoid randomizing results when liquidity thins and slippage spikes.
- 30 minutes before tier-1 events, stop initiating new positions unless your stop is outside the expected move; tighten take-profits to bank pre-event.
- Trade the second move, not the first: wait for the post-event spike to settle, then trade the break of the spike’s high/low with a stop on the other side.
- If the first post-event 5-minute candle closes inside the pre-event range, stand down—chop regime.
- For central banks: note the prior meeting’s high/low; if the statement pushes price through those levels and holds for 15 minutes, ride continuation with a 2×ATR trailing stop.
- Disable mean-reversion setups for the rest of the session if the initial reaction expands day range >1.5×ATR by NY midday.
Play the Right Regime: Trend vs. Mean-Reversion Switch
He classifies the day quickly and switches tools accordingly. This prevents using breakout tools in a choppy tape.
- Trend day: 5-minute pullbacks hold above the 20-EMA (or below for shorts) and VWAP slopes with price—use breakout/pullback rules and trail.
- Range day: price crosses VWAP >6 times by midday or RSI(14) oscillates 40–60—switch to fade extremes and take profits faster.
- Transition day: if the first hour is range-bound but the first hour’s range breaks with volume during London/NY overlap, treat the rest as a trend day.
- Only allow three regime re-labels per session; if you change more than that, go flat and reassess later—indecision is a P&L leak.
- Journal regime calls with a single tag; next week, trade bigger in the regime you called correctly >60% of the time.
Execution Discipline: Turn Emotions Into Checkboxes
Rules matter only if you can run them without drama. He uses simple pre- and post-trade checklists to keep his mind clear and the process repeatable.
- Pre-trade: confirm higher-timeframe bias, regime, level, and catalyst risk; if any are “unknown,” do not trade.
- During trade: speak the exit plan out loud (scale at +1R, trail with X, kill on reclaim of level); if you can’t state it, you don’t have it.
- Post-trade: log R multiple, regime tag, and whether you followed the plan; only increase size after five consecutive plan-compliant trades.
- If your last two losses came from the same mistake (e.g., fading trends), ban that setup for 48 hours.
- End of week: rebuild the watchlist from the strongest and weakest 10-day performers; archive anything stuck in Neutral.
Markets He Likes to Express Themes In
He rotates across FX, indices, gold, and crypto depending on where trends and liquidity are best. The method stays the same; the vehicle changes.
- For global macro themes, prefer indices (US500/NAS100/GER40) and major FX (USD, EUR, JPY, GBP) because liquidity makes levels cleaner and slippage smaller.
- Use gold when real rates or risk sentiment are in focus; apply trend rules with wider ATR stops and partial profits at prior swing highs/lows.
- In crypto, restrict to top-liquidity names; trade only during overlapping sessions with US equities for tighter spreads and clearer momentum.
- If a macro theme is USD-centric, avoid taking correlated equity and gold trades in the same direction—pick the cleanest chart.
- When nothing trends, shrink the universe and size; one A-setup is better than five C-setups.
Trade What Price Confirms, Not What Headlines Predict
Chris Weston hammers this point: the market doesn’t owe you an explanation—price already is the explanation. If the tape is making higher highs and holding bids, he buys strength instead of rationalizing why it “shouldn’t be up.” When price rejects a level and can’t reclaim it, he flips bias and stops arguing. The rule is simple: your P&L follows confirmation, not your narrative.
Weston treats headlines as background noise and lets structure do the talking. He makes decisions off closes through levels, sustained momentum, and session context—London and New York flows matter more than pundit quotes. If a breakout holds for a full 5-minute bar and the next pullback finds buyers, he leans in; if it snaps back inside the range, he bails without debate. Trade what the chart proves, and retire the need to be “right” about the story.
Size Positions To Volatility; Keep Dollar Risk Constant
Chris Weston keeps the dollar risk per trade fixed and lets position size float with volatility. If ATR widens, he shrinks the number of contracts; if ATR compresses, he allows a bigger position—same dollars at risk either way. Stops are placed where the setup is objectively wrong, then size is computed from that stop distance, not the other way around. This turns wild days from account-killers into just another -1R.
When volatility spikes, Weston reduces risk percentage and widens stops proportionally so the cash risk stays steady. He avoids stacking correlated trades that secretly multiply exposure, treating highly linked markets as one position for sizing. Adds happen only when the trade is already paying, and the new combined stop still respects the original dollar risk cap. By letting volatility dictate size, he stays in the game long enough for the edge and process to compound.
Build A Weekly Playbook And Execute Daily Checklists
Chris Weston treats the week like a campaign: define the battleground, then fight only the winnable fights. He maps the weekly opening range, ranks markets by relative strength, and highlights the two or three instruments most likely to trend. Event risk gets penciled in first, so he isn’t surprised by CPI, central banks, or earnings. With the big picture set, he avoids random trades that don’t fit the plan.
Each day, Chris Weston runs a tight checklist to keep execution clean. He confirms higher-timeframe bias, tags the day’s regime, and writes down entry, invalidation, and take-profit before the bell. If any box is blank—bias, level, or catalyst—he stands down until it’s clear. The result is fewer decisions, less stress, and a playbook that compounds small edges into real returns.
Diversify By Theme, Strategy, And Duration—Avoid Hidden Correlations
Chris Weston stresses that “diversified” isn’t owning five charts that all move with the same driver. He spreads exposure across themes like USD strength, risk sentiment, and rates, so one macro swing can’t hit everything at once. He also mixes strategy types—trend, mean reversion, and breakout—so the book doesn’t live or die by a single regime. The aim is simple: multiple independent ways to make money, not a bundle of look-alike trades.
Weston checks rolling correlations and prunes overlaps before they hurt P&L. If two assets share the same catalyst, he sizes them as one and picks the cleaner chart or splits risk by duration. He offsets intraday plays with swing holds to avoid synchronized exits, and he won’t pyramid across tightly linked markets. By diversifying across theme, strategy, and time horizon, Chris Weston keeps drawdowns shallow and lets winners work without hidden landmines.
Prefer Defined Risk; Kill Trades When Levels Are Reclaimed
Chris Weston treats risk definition as non-negotiable: the stop lives exactly where the idea is wrong, not where it “feels safe.” He sizes from the stop distance, so every trade risks the same dollars and never widens a stop after entry. Hard orders go in at once—entry, stop, and at least one profit target—so there’s no room for panic edits. If volatility expands, he shrinks in size, not conviction.
His fastest exit rule is the reclaim: when a broken level snaps back and closes beyond it, the trade is dead on the spot. Failed breaks often run hard the other way, so Weston cuts immediately and only flips if his momentum filter agrees. He avoids averaging losers or “giving it a little more room,” accepting small, planned losses over large surprises. Defined risk keeps the account steady and lets Chris Weston press winners without fearing a single trade will take him out.
Chris Weston’s core lesson is to treat price as the aggregation of every participant’s belief, flow, and behavior—and trade the probabilities that fall out of that, not the story you wish were true. He underscores that you don’t always need to know “why” price moves; flows can push markets for many reasons, and that reality shows up first in the tape. In his words, price action becomes the practical “fundamental” that guides risk management, strategy choice, and the odds of continuation versus failure.
He also highlights the structural forces that now dominate day-to-day movement: the rise of zero-DTE options, leveraged ETF rebalancing, volatility-targeting funds, and shifting participation across crypto and equities. These elements change liquidity conditions and intraday behavior, making it even more important to read flow through price rather than retrofitting headlines after the move. The takeaway is simple—anchor decisions to how these forces show up on the chart, not to post-hoc explanations.
Finally, Weston pushes a process that removes emotion and finds markets that match a clear, rules-based edge. Cut losses quickly, hold winners, and scan broadly for instruments that fit your criteria—rather than forcing trades where they don’t belong. He looks for specific technical conditions (EMA separation, RSI strength, even extreme closes versus Bollinger bands) and isn’t afraid to rotate beyond FX into assets that trend cleanly when his setup shows up. The consistent thread: define risk, let the tape confirm, and let the right markets come to you.
