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In this interview, trader and coach Paul Wallace sits down to unpack what really drives consistent performance at the screen. A former RAF officer turned market professional, Paul brings a rare mix of battlefield-grade composure and decades of trading practicality—exactly the combo beginners wish they had on day one. You’ll hear him explain why your edge isn’t just the chart pattern you love, but the mindset and routine wrapped around it—especially when the market flips the script.
Read on to get Paul Wallace’s “4Ms” strategy—Markets, Method, Money, Myself—and how he aligns them so he’s never fighting the tape. We’ll cover his simple execution score (did you plan the trade, trade the plan, and manage risk?), how to adapt bias to price action without whipsawing your rules, and the weekly 90-minute manual review that keeps him calibrated for the week ahead. If you’re new, this is your fast track to building a real trader operating system: robust risk control, focused debriefs, and a mindset that stays cool when the market doesn’t.
Paul Wallace Playbook & Strategy: How He Actually Trades
The 4Ms Operating System
Paul Wallace organizes his entire approach around four pillars: Markets, Method, Money, and Myself. Think of this as the operating system that keeps you consistent under pressure—change one pillar and the others adapt. Below are the non-negotiable rules he uses to keep the 4Ms aligned in real time.
- Markets: Only trade instruments you’ve profiled (spread, session rhythm, average daily range, news sensitivity); re-profile monthly.
- Method: Keep 2–3 core setups maximum; every setup must have named criteria, entry trigger, stop logic, and management rules.
- Money: Risk is fixed per trade (R). Daily loss limit = 3R; stop trading once hit.
- Myself: Pre-market checklist + post-trade debrief, with a written execution score (0–5) for plan adherence.
Market Selection & Session Focus
Paul prioritizes products and sessions where his setups historically perform best. That means fewer markets, deeper familiarity, and clear expectations for volatility and liquidity. Here’s how he keeps the playing field simple.
- Maintain a Primary List (2–4 markets) and a Secondary List (1–2 markets); trade secondary only when primaries are dead.
- Trade one session (e.g., London or New York) with a defined core window of 2–3 hours and no trades outside it.
- Stand down on abnormal conditions: spreads 2× normal, platform issues, or ADR already exceeded by 1.2× before your core window.
Setup Menu (Tight, Testable Criteria)
Paul uses a small menu of repeatable patterns rather than “anything that looks good.” Each setup has hard criteria you can score quickly. If the criteria don’t print, he passes—no improvisation.
- Breakout-Pullback Trend Continuation: Higher-timeframe bias up/down; first clean break of structure; pullback holds prior S/R; enter on micro continuation; invalid if pullback retraces >61.8% or closes back through level.
- Mean-Reversion to Value (Intraday): Range day context; extension ≥ 1.5× average swing; reversal signal back to VWAP/weekly open; invalid if HTF momentum opposes.
- News Momentum (Only Tier-1): Trade second impulse after the first spike; enter on break of impulse high/low after a one-minute pause; invalid if spread widens or wick > body by 2×.
Risk & Position Sizing
His risk is volatility-adjusted but formulaic, so size never comes from “feel.” The goal is to survive every sequence and let the edge express over time.
- Risk 0.5R–1R per trade; beginners stick to 0.5R until 100 trades with ≥ 55% plan adherence.
- ATR-based stop: initial stop = structure stop or 0.75× ATR(14) on your entry timeframe, whichever is wider.
- Position size = (Account × %Risk) ÷ Stop distance; round down to the nearest lot/contract that doesn’t exceed risk.
- Daily risk cap = 3R; Weekly risk cap = 8R; when hit, stop trading and review—no exceptions.
Entry & Trade Management
Entries are mechanical; management is conditional but pre-written. Paul wants zero ambiguity once the trade is live.
- Trigger: market/stop order only on a fresh break or a limit at the pullback level; no chasing beyond 0.25R slippage.
- Break-even rule: move stop to BE after +1R only if price makes a clean higher low/lower high; otherwise, keep original stop.
- Scaling out: take partial at +1R (25–50%), trail the rest using swing structure or 0.5× ATR behind last pivot.
- Time stop: if price stalls for 30–45 minutes with no progress and context deteriorates, scratch at market.
- Halt rule: any 3 consecutive execution mistakes (not outcomes) trigger an immediate session stop.
Bias & Regime Filters
Before any setup, Paul labels the day’s likely regime to avoid forcing trend tools in chop or fading strong impulsive days. These filters reduce regret and overtrading.
- Trend Day Likely: higher-timeframe MA up/down & rising/falling; opening drive expands range early; favor breakout-pullback only.
- Range/Rotation Likely: flat HTF, overlapping prior day, low news risk; favor mean-reversion to value; avoid breakouts.
- Volatility Gate: if intraday ATR percentile < 30, trade only A+ signals; if > 80, widen stops by 20% and halve position size.
Playbook for Tier-1 News Days
News days are pre-planned, not improvised. Paul only engages if his criteria survive the spread/whipsaw reality.
- Pre-News: flat 5 minutes before; mark prior H/L and first reaction range; widen invalidation by 20%.
- First Move: observe, no entry; second impulse provides the trade if it breaks the first impulse extreme after a 1–2 minute pause.
- Post-News: if price fully mean-reverts into value within 30–60 minutes, switch to the mean-reversion playbook with reduced size.
Daily Routine & Execution Score
Consistency beats brilliance. Paul grades himself on execution, not P&L, to prevent the “good outcome on bad process” trap.
- Pre-market (10–12 min): checklist (regime, key levels, news, setups likely/unlikely), visualize triggers, write max trades (≤ 5).
- During session: voice or text tag each trade with the setup name and trigger; no social media or chat rooms.
- Execution score (0–5): plan adherence, entry timing, risk placement, management fidelity; log score immediately after exit.
Weekly Review (90 Minutes Max)
He compresses learning into a single weekly loop: find the signal, remove the noise. The goal is to tighten the criteria or delete weak ideas.
- Aggregate stats: hit rate, average R, max adverse excursion (MAE), max favorable excursion (MFE) by setup.
- Cull list: any setup with < +0.3R expectancy over the last 30 trades goes to the bench until rules are refined.
- Playbook updates: save 3 best and 3 worst annotated charts per setup; rewrite one rule you broke the most.
Psychological Edge & Recovery Protocols
The edge collapses when the state collapses. Paul treats mindset like risk—predefined and enforceable.
- State check: quick breath count (inhale 4, hold 2, exhale 6) × 4 before opening the platform; repeat after any loss.
- Reset after damage: two losses in a row or one ≥ 2R loss → 10-minute walk, water, data-free reset before next decision.
- Guardrails: max 5 trades/day; if revenge thoughts appear, close platform and journal for 5 minutes.
Chart Mark-Up & Leveling
Clean charts = clean thinking. His markup is minimal and consistent, so triggers are obvious.
- Levels: prior day high/low, session open, weekly open, and one HTF S/R zone; hide everything else.
- Triggers: only the entry pattern and its invalidation; no mid-trade adding of indicators.
- Colors/Annotations: green for continuation, orange for mean-reversion, red for invalidation; annotate before placing orders.
Journal Structure That Builds Edge
Paul’s journal is a decision log, not a diary. You should be able to replay any trade and see why it existed.
- Template per trade: setup name, regime label, screenshot before/after, risk size, MAE/MFE, execution score, one improvement.
- Tag errors: plan, execution, emotional; trend them weekly to target the highest-frequency leak.
- Archive playbook: promote any setup with ≥ +0.5R expectancy over 50 trades; demote anything below +0.2R.
Risk Controls for Account Longevity
Capital protection is the enabling constraint. These are his hard stops that turn bad days into survivable ones.
- Equity drawdown stop: pause trading if the account is down 10% from equity high; review and paper trade until two green weeks.
- Weekend risk: no positions held into the weekend unless a structured swing plan with half-size and widened stop.
- Correlation cap: if trading multiple markets, combined risk exposure at any time ≤ 1.5R total.
One-Page Session Plan (Fill-In)
This keeps your day tight and objective. Print it or pin it next to your charts.
- Today’s regime: Trend / Range / Unknown. Primary setups allowed: ________. Banned setups: ________.
- Key levels: PDH/PDL, session open, weekly open, HTF zone: ________.
- Risk: per-trade R = ____; max daily = 3R; max trades = ____; early stop condition = ________.
- Focus market(s): ________; core window: ________ to ________.
- Top 3 execution rules: 1) ________ 2) ________ 3) ________.
Size Risk First: Fix R, Cap Daily Losses, Protect Capital
Paul Wallace builds every decision around risk before he even thinks about entries. He locks in a fixed R per trade so one loser never snowballs into an emotional spiral. That single move keeps position size objective and repeatable, even when markets get jumpy. It’s how he makes sure the next trade still counts after a tough sequence.
Wallace then hard-limits the day: when the tally hits the daily loss cap, he’s done—no “one more try.” He prefers volatility-aware stops that reflect structure, but size always follows the same R math, not gut feel. Weekly risk is capped, too, so a bad stretch can’t wreck the month. With damage contained, he can grade execution calmly and let the edge work without betting the account on any one idea.
Trade Volatility, Not Hopes: Adjust Stops And Size To ADR
Paul Wallace frames every trade around what the market is actually doing, not what he wishes it would do. He measures the instrument’s recent range and lets that dictate stop distance and position size, so a quiet day carries a tighter risk and a wild day forces a smaller size. By anchoring to ADR, Wallace avoids the classic error of using the same stop on every session and then blaming “noise” when he gets clipped.
He also adapts targets to volatility so the reward remains proportional to the day’s true opportunity. If ADR is compressed, he takes profits sooner; if it’s expanded, he lets winners breathe and trails with structure. Wallace’s mantra is simple: price movement pays the bills, so your risk, size, and expectations must match the current range—not your hopes for a home run.
Diversify By Underlying, Strategy, And Duration To Smooth Equity
Paul Wallace doesn’t rely on one market or one idea to carry the month. He splits risk across uncorrelated underlyings (e.g., a major FX pair, an index future, and a commodity), so one shock doesn’t hit everything at once. Then he diversifies by strategy type—trend continuation alongside mean reversion—because different regimes reward different mechanics. Finally, he mixes timeframes, pairing intraday plays with occasional structured swings to capture different volatility cycles.
Wallace pre-allocates risk per bucket and enforces a correlation cap, so adding trades doesn’t secretly multiply the same exposure. If the euro and the DXY proxy the same theme, he’ll take one, not both. Each sleeve has its own rules and metrics, and anything with falling expectancy gets benched instead of “averaged.” The result is a calmer equity curve where wins come from multiple edges, not one lucky streak.
Mechanics Over Prediction: Predefined Setups, Triggers, And Management Rules
Paul Wallace treats forecasting as noise and execution as the signal. He predefines a tiny menu of setups, each with clear context, entry trigger, stop logic, and management path. If the market doesn’t print the criteria, he does nothing—no “it looks close enough.” This keeps him out of trades built on hunches and inside trades built on rules.
Wallace also writes invalidation before entry, so the chart decides when he’s wrong, not his ego. Triggers are mechanical (break, retest, or reversal pattern) and must fire inside his session window; chasing outside rules voids the trade. Management is scripted—partial at +1R, trail by structure or ATR, and time-stop if momentum dies. The edge comes from repeating the same mechanics across many samples, not from guessing tomorrow’s headline.
Process Discipline: Session Windows, Max Trades, Journal, And Weekly Review
Paul Wallace treats time like risk—strict session windows and a finite number of decisions. He picks a two-to-three-hour core window and ignores everything outside it, so energy and focus peak when liquidity does. Max trades are defined before the open, which stops him from digging holes or chasing heat after a loss.
He logs each trade with setup name, reason-to-exit, and an execution score so the review measures process, not luck. At week’s end, Wallace runs a short, structured audit: hit rate and expectancy by setup, three best/three worst charts, and one rule to tighten. If he breaks rules, the fix is procedural—adjust the checklist or ban a setup—rather than emotional. That cadence keeps him consistent, prevents drift, and compounds tiny process edges into meaningful P&L.
In the end, Paul Wallace’s edge isn’t a single pattern—it’s a system that keeps him honest under pressure. He runs every day through the 4Ms—Markets, Method, Money, and Myself—so the setup he takes actually fits the market he’s facing, the risk is sized like a pro, and his own state doesn’t sabotage execution. If something goes wrong, his first debrief is simple: which M fell out of alignment? Most traders learn this the hard way; Wallace bakes it into his routine so he can adapt quickly when conditions shift.
He also keeps score where it matters: did he plan the trade, trade the plan, and manage risk? That execution-first grading, backed by a short weekly manual review, gives him faster feedback than waiting for P&L to tell the story. He debriefs both winners and losers, using screenshots of “what good looks like” to reinforce criteria—and he digs into the ugly trades because they’re a gold mine for spotting leaks. The result is a tight loop: focus on process, adapt the playbook to the current regime, and evolve toward the next level of competence without drifting.
