Table of Contents
Four seasoned voices—Charlie Burton, Jason Sen, Paul Scott, and Nick Leeson—sit down for a no-fluff “Words of Wisdom” roundtable to talk shop: mindset, seasonality, and the realities of moving from pit floors to screens. Why do they matter? Because each has survived multiple market regimes and still pulls a living from the tape, offering hard-won context you won’t find in a Twitter thread.
In this piece, you’ll learn the core trader strategy takeaways: why psychology beats indicators when losses hit, how to work within your comfort zone without shrinking your edge, when year-end/early-January seasonality really matters, and how to exploit opening-bell liquidity like a pro. You’ll also see why there’s no “holy grail”—just probabilities, risk control, and the discipline to keep size sane while volatility does the heavy lifting.
Charlie Burton Playbook & Strategy: How He Actually Trades
Core Philosophy (what he optimizes for)
Charlie’s focus is simple: trade with the dominant flow, keep risk small, and execute the same few patterns over and over. He leans on clean levels, session structure, and momentum confirmation rather than complex indicators. The edge comes from preparation, patience, and strict risk management.
- Trade with the higher-timeframe bias; only fade when the level is major (weekly) and risk is tiny.
- Fewer markets, deeper prep: 2–4 instruments you know well (e.g., indices, FX majors, gold).
- One primary setup + one backup setup beats a menu of ten.
- Process over prediction: plan levels, wait for price to come to you, then execute mechanically.
Market & Bias (top-down flow)
He builds a directional “map” before looking for entries. That keeps him out of chop and away from low-quality countertrend trades.
- Daily → 4h → 1h → 15m. Trade in the direction of the daily/4h structure.
- Define trend quickly: price above rising 20/50 EMAs and higher highs = uptrend (mirror for downtrend).
- Tag key levels: prior day/week high/low, daily pivot + R1/S1, obvious swing zones.
- If daily ATR is contracting for 3+ days, expect more mean-reversion; if expanding, favor momentum/continuation.
Setup 1: Trend Pullback With Momentum “Re-kick”
This is a bread-and-butter move: ride the main trend, but only after a controlled pullback and a clear momentum push back in trend direction.
- Wait for a pullback to your zone (e.g., prior swing, 20EMA/50EMA cluster, or broken level retest).
- Confirmation: a strong rejection candle on 15m/1h and RSI(14) holds above 45 (long) / below 55 (short).
- Entry: stop order a tick beyond the trigger candle in trend direction.
- Stop: a few ticks beyond the pullback low/high or 0.8× the 14-ATR(15m), whichever is wider.
- First target: prior swing high/low or VWAP; trail remainder behind 20EMA (5m/15m) only after +1R.
Setup 2: Break-Retest of Prior Day’s Extreme
Charlie often looks for clean continuation once the market proves it can hold beyond yesterday’s boundaries.
- Mark prior day high/low (PDH/PDL). No trade on the first spike through—wait for the retest.
- Require a close beyond PDH/PDL on 15m; then buy/sell the first retest that holds.
- Invalidation: 15m close back inside the prior day range.
- Stop: outside the opposite edge of the retest zone (0.6–1.0× ATR(15m)).
- Target: R1/S1 first, then leave a runner for R2/S2 if momentum expands.
Session Timing (when he presses vs. sits)
Session structure matters because liquidity and fake-outs cluster at certain times.
- First 15–30 min (London/NY): only first-touch fades at pre-marked levels or wait for the break-retest; no raw breakouts.
- Mid-session: favor continuation (pullback or break-retest) with VWAP alignment.
- Late session: look for failed breaks into R1/S1 and manage runners into the close—be stricter with targets.
Risk & Sizing (how he stays in the game)
Charlie keeps risk steady and lets the sample size do the work. Small, fixed risk lets you keep taking A-setups through inevitable losing streaks.
- Fixed fractional risk per trade: 0.25–0.5% of account.
- Daily stop: 2R. Weekly stop: 6R. Hit it—flat for the rest of the period.
- Position size = (account_risk) ÷ (stop distance). Never “shrink the stop” to make the size bigger.
- No adding to losers; pyramids only from open profit and only after the stop is at breakeven.
Trade Management (locking wins without strangling trades)
His management rules are simple: pay yourself into obvious traffic, then trail only if momentum proves it.
- At +1R: move stop to entry minus costs; take 30–50% if a major level/VWAP is near.
- Trail behind 20EMA (5m/15m) after a higher low/lower high forms in your favor.
- If momentum stalls and price closes through VWAP against you, exit remainder—don’t “hope” it comes back.
- Before Tier-1 data (CPI, NFP, central banks): be flat unless already risk-free and >+1.5R.
Filters That Improve Win-Rate
A few simple filters remove many mediocre trades and keep you focused on A-setups.
- Confluence upgrade: level + moving average cluster or level + PDH/PDL or level + 200EMA(15m) = A-setup.
- Space rule: skip trades where the next obstacle is closer than 0.8× your stop size.
- State check: only fade extremes if VWAP is flat and price is ping-ponging between R1 and S1; otherwise stick with trend plays.
Routine & Review (how he iterates)
Consistency comes from running the same loop daily and culling weak ideas.
- Pre-market: mark levels, define bias, set alerts 3–5 ticks/points before decision areas.
- Post-market: tag every trade (setup type), record planned R vs. realized R, and note state (trend/range).
- Weekly cut/keep: drop any setup with win rate <35% and avg R <0.8 after 20 samples; scale focus on setups >1.5 avg R.
- If drawdown >6R in 60 sessions: halve risk for 10 sessions and trade only Tier-1 confluence levels.
Jason Sen Playbook & Strategy: How He Actually Trades
Core Philosophy
Jason keeps it level-driven and repeatable: prep your key prices, wait for the price to come to you, and size by the stop—not the mood.
- Trade a handful of markets you know well (e.g., indices, FX majors, gold).
- Let levels and session structure lead; indicators are secondary and used for confirmation only.
- If there isn’t a clean confluence or clear space to target, skip it.
Top-Down Bias
Frame the day so you’re not fighting the tape.
- Daily → 4h → 1h → 15m; trade in the direction of the higher-timeframe structure.
- Quick trend test: price above rising 20/50 EMAs = long bias (mirror for shorts).
- If 3-day ATR > 14-day ATR, favor momentum/continuations; if contracting, expect mean reversion.
Finding A+ Levels (Confluence First)
He hunts for places where many traders are anchored; that’s where reactions (and risk control) are best.
- Mandatory: prior day high/low, weekly high/low, daily pivot + R1/S1.
- Use Fibs only for confluence (38.2 pause, 50/61.8 exhaust)—never alone.
- Build zones, not lines: width ≈ 0.15–0.30 × 14-day ATR around the key level.
- Upgrade to “Tier-1” if the 200EMA(15m) or a weekly level sits inside your zone.
Entry Triggers (Simple & Binary)
He uses two main triggers so execution stays mechanical.
- First-touch fade: Limit at near edge of zone; stop 0.1× ATR beyond far edge; target VWAP or opening-range mid first.
- Break-retest: Require a 15m close through the level, then buy/sell the first pullback that tags it ±0.05× ATR; invalidate on a 15m close back inside.
- Space rule: If the next obstacle is closer than 0.8× your stop distance, pass.
Risk & Sizing
Longevity first. All size comes from the stop distance.
- Fixed risk per idea: ~0.25–0.5% of equity.
- Position size = (account risk) ÷ (stop distance).
- Hard limits: −2R/day, −6R/week. Hit it—flat.
- Never add to losers; adds only from open profit after stop is to breakeven.
Managing Winners
Pay yourself into traffic, then trail only when the market proves it.
- At +1R: move stop to entry (fees covered) and take 30–50% if a known obstacle is close.
- Trail behind the 20EMA(5m/15m) after an HL/LH forms in your favor.
- If the price closes through VWAP against your position, consider flattening the remainder.
Session Tactics (London & New York)
Respect the clock; different hours, different traps.
- First 15–30 min: only first-touch fades or wait for break-retest; avoid opening bar breakouts.
- Mid-session: prefer break-retests with VWAP alignment; skip if VWAP is flat and chop >45 min.
- Into the close: look for failed breaks at R1/S1; target VWAP or opening-range extremes.
State Filter (Trend vs. Range)
Pick the playbook that matches the market’s “state.”
- Trend state: 20EMA and 200EMA(15m) aligned and price above/below both → take pullbacks with the trend only.
- Range state: VWAP flat ±0.1% and price oscillates R1↔S1 → fade extremes back to VWAP.
- If state flips after entry, scratch early (≈−0.3R) rather than “hope.”
Event Playbook
Volatility is opportunity—after the spike.
- No new trades within 10 minutes before Tier-1 releases (CPI/NFP/central banks).
- Post-release: trade the first VWAP-holding pullback in the direction of the initial impulse; invalidate on a 5m close through VWAP.
- If the first move retraces >61.8% within 15 minutes, stand down—two-sided chop likely.
Repeatable Patterns
A small set of patterns executed relentlessly.
- ORB Retest: Break of opening range, 15m close, first retest entry; stop outside the range; target R1/S1.
- VWAP Reclaim: Lose VWAP early, reclaim on strong 5m close; buy first HL that holds VWAP; stop just beyond VWAP.
- First Touch R1/S1: Fade only the first clean test; stop 0.1× ATR beyond; cover at VWAP/OR mid.
- Three-Drive Exhaustion: Three pushes into a level with momentum divergence; enter on third rejection, stop beyond wick.
Routine & Review
Keep the loop tight; let stats guide tweaks.
- Pre-market: mark levels, define bias, set alerts 3–5 ticks/points before decision areas; pick 2–3 markets max for today.
- Log five fields: setup tag, planned R, realized R, time of day, state (trend/range).
- Weekly: cut any setup with a win rate <35% and avg R <0.8 after 20 samples; focus on setups with avg R >1.5.
Paul Scott Playbook & Strategy: How He Actually Trades
Core Philosophy
Paul prioritizes asymmetric risk: protect the downside first, then let catalysts and quality do the lifting. He hunts for fundamentally improving companies where the chart confirms accumulation—then sizes modestly and scales with proof.
- Only trade names with improving fundamentals or clear event catalysts; avoid “story only” momentum.
- Let price action confirm your thesis (higher highs/lows, tight flags, rising 50/200 DMA).
- Keep losses small and fast; give winners air with partials and trailing logic.
Universe & Prep (what he screens for)
He narrows the playing field so decisions are faster and more consistent.
- Market cap sweet spot: liquid small/mid caps with average daily value traded ≥ 20× your planned position size.
- Quality & momentum filters: positive YoY revenue growth, improving gross margin, net debt under control, RS > market over 1–3 months.
- Red flags auto-exclude: serial equity raises without sales growth, aggressive adjustments in earnings, and auditor/board churn.
Set up 1: Breakout on Fresh Fundamental Upgrade
He loves it when numbers and narrative both turn up—then the chart cracks resistance.
- Trigger: recent earnings/trading update beats (revenue, margin, or outlook) + 20/50 DMA rising + 20-day high breakout.
- Entry: buy stop a few ticks above the breakout level after a strong close; avoid chasing >3% beyond trigger.
- Stop: below the last tight swing low or 1× ATR(20), whichever is wider.
- Initial target: 2R at prior major swing; leave a runner for a measured move (height of base).
- Invalidation: close back inside the base on above-average volume.
Setup 2: Pullback to First Support After a Beat
When a name gaps on results, he waits for the first respectful dip to buy strength at a discount.
- Zone: gap mid-point / rising 20 DMA / prior breakout level confluence.
- Entry: limit in the zone only if volume dries up on the pullback and intraday makes a higher low.
- Stop: 0.8–1.2× ATR(20) below the zone or below gap lows.
- Target: partial at prior high, then trail under 20 DMA; add only if price reclaims highs on rising volume.
News & Catalyst Playbook
He treats news as the engine and the chart as the steering.
- Prefer beats + raised guidance over “inline”; avoid binary, pre-revenue biotech unless position is tiny.
- After good news, skip entries if the move retraces >61.8% within 3 sessions—sellers still in control.
- For sector-wide catalysts (rates, regulation), choose the best-in-breed name with the cleanest chart.
Risk, Sizing & Portfolio Structure
Survival first, compounding second.
- Risk per position: 0.5–1.0% of equity; max 6–10 active positions.
- Correlation cap: no more than 30–40% of the book in one theme/sector.
- Hard rules: −3R day or −6R rolling week → stop trading, switch to review mode.
- Scale in only on strength (higher lows or fresh breakouts); never average down.
Managing Winners
He banks into strength and lets a core ride while the thesis holds.
- Take 25–33% off at +1.5–2R or near obvious resistance; move stop to breakeven after first scale.
- Trend trail: weekly 10 EMA “soft” stop for swing positions; daily 20 DMA for shorter holds.
- Thesis stop: exit if margin trend flips, leverage rises unexpectedly, or management changes guidance tone.
Red Flags & Fast Exits
Quick exits keep the equity curve smooth.
- Bearish reversal day on >1.5× average volume after a breakout → cut to core.
- Guidance “reaffirmed” but KPIs slip (e.g., declining order intake or cash burn up) → reduce or exit.
- Price closes below 50 DMA and relative strength vs. index breaks a 1-month low → flatten unless a near-term catalyst is due.
Routine & Review
He treats trading like a business: plan, execute, audit.
- Weekly: rank positions by catalyst freshness, RS, and distance to stop; cull the bottom tier.
- Post-trade notes: tag setup (breakout, pullback, catalyst), record R multiple, and log whether the driver was earnings, guidance, or sector.
- Upgrade playbook rules that deliver a win rate ≥40% and avg. win ≥2R over ≥25 samples; retire anything <0.8R expectancy.
Nick Leeson Playbook & Strategy: How He Actually Trades
Core Philosophy
Leeson’s story is the ultimate case study in why risk controls beat clever trade ideas. The edge isn’t in doubling down—it’s in defining loss, isolating risk, and keeping transparency non-negotiable.
- Trade plans must specify max loss, position size, and exit triggers before entry.
- Never let execution and risk oversight sit with the same person (even if you’re a one-person shop—simulate separation with automation and a buddy review).
- If you feel tempted to “win it back,” you’re done for the session.
Position Sizing & Loss Containment
This section is about hard brakes. You’ll still take hits—but you won’t crater the account.
- Risk per trade: 0.25–0.5% of equity; hard daily stop: −2R; hard weekly stop: −6R. Hit it—flat.
- No averaging down. Adds only from open profit, after the stop is at breakeven.
- Time stop: if the thesis doesn’t play within your planned window (e.g., 2–4 bars/1 session), exit.
- Gap risk rule: overnight positions sized at half your intraday risk unless fully hedged.
Transparency & Controls (Anti-“Error Account”)
Leeson famously hid losses. You’ll do the opposite: surface risk instantly and automatically.
- All trades are routed through a platform that logs immutable execution + timestamps; no manual adjustments to fills or P&L.
- Reconciliations twice daily: broker statements vs. blotter vs. risk sheet. Any mismatch = trading pause until resolved.
- Read-only access for a trusted peer/mentor who can view your P&L and positions in real time.
- Pre-commit a weekly risk report to yourself (or team): largest loss, worst slippage, limit breaches, and actions taken.
Basis, Hedge, and “Delta-One” Reality
One lesson from Leeson’s index/derivatives exposures: synthetic hedges aren’t perfect. Respect basis and liquidity.
- Hedge slippage budget: assume 10–30% of ATR could be lost in fast markets; size accordingly.
- Cross-market trades (cash vs. futures vs. options): write the exact hedge ratio and recalculate it if volatility jumps.
- Never rely on “offsetting” risk unless it’s live, priced, and executable now—not “planned for later.”
- If a hedge widens your worst-case (basis blows out), close it; bad hedges are worse than none.
Stopouts That Actually Trigger
Stops only work if they’re hard, not “mental.”
- Use server-side stop orders with a volatility buffer (e.g., stop 0.15× ATR beyond the level).
- After two stop-outs in the same idea, that narrative is invalid. No third try the same day.
- If slippage >25% of the stop size becomes common on a symbol, remove that instrument from the playbook.
Concentration & Correlation
A big part of the Barings blowup was concentrated, correlated risk masquerading as “hedged.” Cap it.
- Position count: 3–6 uncorrelated ideas max.
- Sector/theme cap: no more than 30–40% of book in one macro theme (e.g., rates-sensitive, China beta, energy beta).
- “Same trade” test: if three tickers move together on the same news, treat them as one position for risk.
Scenario Planning (Stress, Not Guess)
You can’t predict earthquakes or regime shifts, but you can pre-wire your response.
- Run a weekly stress: +/− 2× recent ATR gap against you—does any single position exceed a −1.5% equity hit? If yes, resize.
- Define what you do if your platform/broker goes down: second broker, phone dealing desk, or flatten rule on reconnect.
- Macro calendar mode: 0 new positions within 10 minutes before Tier-1 events; post-event trade only on a VWAP-holding pullback.
Execution Discipline
“Hope” is not a plan; execution rules remove wiggle room.
- First touch vs. break-retest: pick one trigger per setup and stick to it.
- No trades in the first 5 minutes after the open besides pre-planned first-touch fades at marked levels.
- If you move a stop twice intratrade, flatten—your plan has dissolved.
- Record slippage and spread on every fill; if either trends worse, widen stops/targets, or skip that instrument.
Psychology Wired Into Rules
When pressure rises, rules carry you. Build them so you can still obey them on a bad day.
- Write the exit in the ticket (OCO orders). If you can’t encode it, you don’t have a trade.
- “Green then stop” days: if you’re +3R by midday, end the session; don’t donate it back.
- Urge check: any impulse to “get it back” triggers a 15-minute lockout timer on your platform.
Daily/Weekly Rituals (Your Anti-Blowup Habit)
Consistency prevents drift into risks you didn’t plan to take.
- Pre-market: mark key levels, define bias, set alerts; select 2–3 A-quality instruments only.
- Midday: reconcile positions with broker statement; verify open risk vs. limits.
- End-of-day: tag each trade (setup, state, R planned vs. realized). Delete from playbook any setup <0.8R expectancy after 20 samples.
- Weekly: publish (to yourself/peer) a one-page risk memo: breaches, near-misses, corrections, and any change to limits.
Size Positions by Volatility: Let ATR Dictate Risk, Not Ego
Charlie Burton points out that the quickest way to blow up is to standardize every trade regardless of movement, while Jason Sen keeps repeating that ATR is your reality check. Use the 14-day ATR to translate noise into numbers: wider ATR means smaller size, tighter ATR allows a bit more size—simple, objective, repeatable. Paul Scott adds that even stock swing trades get the same treatment: risk is a fixed percentage, position size flexes with volatility, so the stop sits beyond meaningful structure. Nick Leeson’s cautionary tale underscores the point—when volatility expands and you don’t shrink size, you’re secretly multiplying risk.
Put it into practice by anchoring risk per trade (say 0.25–0.5% of equity) and computing shares or contracts from the stop distance derived from ATR. If the 14-day ATR implies a 2.0 unit stop, you size so that a full stopout costs your fixed risk—no more, no less. If volatility doubles, you halve size automatically, which is exactly how Charlie Burton and Jason Sen keep rough sessions survivable. The goal, as Paul Scott frames it, is an equity curve shaped by discipline, not by mood swings or headlines.
Diversify Across Underlying, Strategy, and Duration to Smooth the Equity Curve
Jason Sen suggests thinking in “buckets”: one index future, one FX major, and one commodity, so a single headline can’t sink your day. Charlie Burton adds that mixing tactics matters too—pair a trend-pullback system with a mean-reversion VWAP fade to avoid relying on one market state. Paul Scott brings the time angle: run swing positions alongside shorter intraday trades so drawdowns don’t all land at once. Nick Leeson’s experience is the cautionary counterexample—concentration risk masquerading as hedged still bites when markets lurch.
Put it to work by capping exposure per bucket and staggering hold times so not every position answers to the same driver. If indices chop, your FX trend follow may still pay; if overnight headlines slam a swing, your intraday book can still close green. Charlie Burton’s rule of “few markets, multiple approaches” keeps focus without putting all eggs in one setup. Jason Sen’s level-driven plays, Paul Scott’s catalyst swings, and a strict cap on correlated bets create an equity curve that bends, not breaks.
Trade the Mechanic Rules, Not Predictions: Levels, Triggers, and Stops First
Jason Sen says the market doesn’t pay for clever forecasts—it pays for clean execution at pre-marked prices. Charlie Burton echoes that edge lives in the mechanics: map levels, define a trigger, and know the stop before you even open the ticket. Your plan should read like a checklist: if price tags the zone, if the candle closes as required, if risk equals X for Y stop distance—then and only then, enter. The prediction can be wrong, and you can still make money if the rules control risk and capture asymmetric payoffs.
Paul Scott keeps it practical: scale out into obvious traffic and trail only after structure confirms, not because you “feel” a continuation. Build OCO orders so exits fire automatically, removing waffling once you’re in the heat. If a rule is too fuzzy to code, it’s too fuzzy to trade—tighten it until a bot could follow it. Nick Leeson’s legacy is the reminder that when rules bend, accounts break; lock in your mechanics so discipline is the default, not the exception.
Define Risk Upfront: Pre-Set Stops, Max Daily Loss, and Size Limits
Nick Leeson is the reason this chapter exists—his blowup proves that undefined risk isn’t trading, it’s gambling. Jason Sen keeps it clinical: decide the stop before entry, encode it in an OCO, and size the position so a full stop equals a fixed fraction of equity. Charlie Burton adds a guardrail for your day: a hard max daily loss (e.g., −2R) that shuts the platform down when hit. Paul Scott brings portfolio reality—cap risk per idea and per theme, so correlated names can’t sink the boat together.
Make it concrete: choose a risk per trade (0.25–0.5% of equity) and compute size from stop distance, not the other way around. Set an intraday loss circuit-breaker and a weekly cap (e.g., −6R) that forces review, not revenge. If price structure changes against you—new lower high for longs or VWAP flip—honor the stop rather than “give it room.” And once you’ve moved a stop twice without a rule-based reason, Charlie Burton’s line applies: flatten it, log it, and live to trade the next setup.
Use Playbook Checklists to Enforce Process Discipline and Eliminate Impulse Trades
Charlie Burton treats the checklist like preflight: bias, levels, trigger, stop, and size are written before the bell, so execution is automatic. Jason Sen adds a session block: first 30 minutes = first-touch fades or nothing, mid-session = break–retest only if VWAP aligns, close = failed breaks at R1/S1. Paul Scott’s version includes a catalyst line—what changed, why now, and what invalidates the idea—so he isn’t trading headlines, he’s trading rules. The point is simple: if the setup can’t be expressed in one sentence and encoded into an OCO, it isn’t ready.
Operationally, the checklist decides the day: risk per trade, max daily/weekly loss, allowed markets, and a “no-third-try” rule at each level. Jason Sen tags each trade with setup and state (trend/range) and records planned vs. realized R to spot drift. Paul Scott schedules a post-close two-minute audit: did the entry match the trigger, did the stop sit past structure, did scaling follow plan? And Nick Leeson’s name stays on the page as a permanent reminder—when the checklist is ignored, transparency fades and risk balloons, so the rule is obey the list or don’t trade.
In the end, the through-line from Charlie Burton, Jason Sen, Paul Scott, and Nick Leeson is brutally clear: the market rewards mechanics and risk control, not hot takes. Size by volatility so every trade risks the same slice of equity; let ATR, structure, and VWAP do the measuring so ego doesn’t. Trade a small set of patterns—first-touch fades, break–retests, clean pullbacks—and let the clock guide you: opening liquidity hunts, mid-session continuation, late-session squeezes. Diversify the book across underlying, strategy, and duration so one headline or market state can’t derail the week. Encode exits up front with OCOs, take partials into traffic, and trail only when structure proves it. Keep hard circuit breakers (−2R day, −6R week) and correlation caps so a “hedge” never turns into the same trade twice. And remember the Leeson lesson forever: undefined risk isn’t trading—it’s a countdown.
If you wire all of that into a daily checklist, the edge compounds. Pre-market: map levels, state, and bias; pick two or three instruments with real range; place alerts. Intraday: execute only when your triggers fire, skip low-RR plays, and stop after a limit breach—no revenge rounds. Post-close: tag setups, log planned vs. realized R, and cut anything that can’t pull its weight over a real sample. Do this on repeat and your process—not any single prediction—becomes the strategy that actually pays.
