Interview noteThis page restates a public interview in new words. Dollar results, win rates, and payouts are claims made by the speaker or the host. They are not this desk's record, and they are not a result to expect.
Tom Vorwalt is the person behind Trade the Traders, and the host's introduction is twenty years as a professional and a team that includes world champions. The caption also spells the surname Voorwald. The team is not one method. Patrick Niel fades. Serge scalps and will take a small intraday swing when the numbers are there. Henrik uses the PBD model and likes it when the market is actually moving. Carsten is the swing and longer-term trader, and Lars is the person who sends a fundamentals memo every morning. Tom built the group in 2013 after seeing, in the institutional world, that it was never one person and one screen. The chart work in this conversation is the shared foundation. The styles sit on top of it.
One picture, several traders
The morning starts with Lars. Geopolitics, what happened overnight, and whether a gap in the futures is a real gap or a gap that will close. Tom calls that an easy question, and he says it keeps the desk from running at the market confused. Being alone at home, in his experience, is a different and worse version of the same job, because a wrong idea gets no answer from anyone else. He would tell a struggling retail trader to find other people with the same drive, in person or not, and actually talk to them. Futures, as the host puts it, are zero-sum, and the other side is often already a team.
Once that memo is in, Tom is not trying to understand the market. He is trying to understand the context he built before the open: the largest path he can produce for the day, and which ideas fit which style. The market will do what it does. Risk can still be managed. The larger point, for him, is that people have to trade with the subconscious rather than against it. A lot of traders copy a strategy and never feel confident in it, and they do not know that the discomfort is the problem. When he is in the market he knows what he is waiting for. He wants the math and the law of large numbers, and he wants to know whether the money coming in is small traders or a large institution. A drive with volume is a different object from a drive he cannot explain. The goal over all of that is neutrality. No stress, clarity, and a line he draws before the session and again after it.
Close, open, balance, then a stop that is not on the level
The platform is ATAS, because he finds it simple. The chart is usually five minutes, sometimes one. What he watches there is the speed of the book, the numbers in the book, and the day's volume profile. Before that picture is allowed to matter, he builds what he calls the picture of the market, and that is where the levels come from. The example is the S&P. First the cash-session close. Then the open. Using the price in front of him as a stand-in, 7,554 sits in the middle of yesterday's balance. Yesterday, on his read, was a trend day: single prints, a close very low, built at the end of the session. Big money needs time. Large players want areas with a lot of volume, because that is where they can handle size. That is the first thought.
If price is entirely inside the value area, the first idea is balance, and balance tells him which setups are even legal. He marks the value-area prices as yesterday's balance. If the market then goes up into a level he built from that value area, he still has to explain the gap. The close was deep. More than 70 percent of the time, across his trades, he decides the gap will close, and yesterday's close goes on the chart as a counter-trade reference. The alternative, a real fundamental story that runs price up, is the decision he is allowed to make and usually does not. Liquidity is the third piece. On the footprint he wants the largest liquidity, the largest buyer, the high and low of the candle, and whether the auction finished. A finished auction at that picture is information that a return to the downside is available. Three inputs, then the math. People, he says, put stops on price levels, and he does not know why, because it is not intelligent. His context for the day is supply and demand, the counter idea, the balance profile, and the close. First target this level, and hopefully the next one.
The stop is the place where the opposite of the idea would be true. If the market is in balance, goes up, and accepts that balance, the odds are high that it travels to the other side and often beyond it. So the stop goes where the liquidity of that area says the long has taken over, above that price, not on the level everyone else is using. That distance is the risk. Only then does he look for the setup. On a five-minute PBD, the market makes a P, breaks that P to the downside, pulls back, and that pullback is the entry. The reward against the risk can be read before he is in.
The P he actually means
The P model is his. It is a little like the P shape in market profile, and only a little. He derived a technical version from closing prices and candlestick formations. A balance forms. Price goes under it and accepts the lower level. The opportunity, in that case, is large that the market goes under the start of the impulse. A P, normally, has the higher odds of going up. A P that is broken, and that is accepting lower prices, has the higher odds of going under the impulse. The order of operations is the whole method. Context first. An intelligent setup at the price level the context named. Only then a reward-to-risk he can prepare before the click. He does not have the English word he wants for how real those numbers are. The example he will give is 200 trades at about a 40 percent hit rate, which he says is acceptable for counter-trades, and a reward that must be bigger than two to one or the 40 percent does not earn. A setup that is already better than five to one, prepared in advance, is a trade he believes he has to take.
He would rather run the concept on four or five markets a day that are not the same bet. Nasdaq, S&P, and DAX futures working together is the bad version. Crude, gold, the DAX, and something like corn is the better one. He calls this use of it intraday swing trading. The same picture also feeds a scalper. If everything above has happened and price is back inside the balance, the odds of going down are large, so the scalps belong on the short side, not the long side. The context picked the direction. A breakout trader on the same morning waits for the balance to break. A B is the P on the other side. Deeper prices accepted under a fair level mean one final push is likely, and that push can be the only trade. The reward is good, and the hit rate, if the ideas are combined, he puts at over 65 to 70 percent. One analysis. Different strategies at different levels. A red line for which style is yours. That is what he means by producing one foundation and then knowing which strategy is allowed at which price.
Why the profile is there, and who he will not fade
Big players need time to do business. More than 95 percent of the participants in futures, he says, are hedgers. Retail is using the same contracts for small ideas. Size needs another large player on the other side, and it needs to wait. Outside a balance, a fair bid and ask are less likely, and the large player has a problem. When large trends arrive, those players often have to hedge, and that hedging is why trend-following and breakout locations show up. The work is knowing the location, and knowing why the large player is uncomfortable.
The host's simplification, a counter-trade at value held to the other side of value, is only part of it. The profile is an idea, not the trade. Three days of S&P value areas with liquidity stepping down, accepting lower prices, and then an aggressive reaction on the long side, and the best trend-following location is the one he marks. Yesterday's volume point of control is a trading location only on a trend profile. On a balance profile he is not interested in it. That distinction is one of the roots. The profile shows him where the large players' liquidity is and where they feel comfortable. Market profile adds single prints, selling tails, and weak highs and lows, which tell him who is dominating that particular profile.
The one formation he wants a beginner to watch is the value area, because those prices are fair. Fair means business can be done, there is time, and large positions can be put on. Above value or below it, the odds rise that those players will try to bring price back, because they want to trade with other players at a fair price. He is not interested in whether someone uses a 70 percent rule or a 68.5 percent rule. He is interested in the counter-trade at the edge, liquidity falling off and then coming back. Understand that, he says, and the market is a little deeper.
Asked whether his edge is trading with institutions, around them, or against them, he picks the first. He is a small trader. When large liquidity arrives and he can see it, a counter-trade setup that would stand in front of that flow does not get taken. He trades with the institutional money flow and never against it. Stopping the train, once the money is running, is a test he invites and does not expect anyone to pass.
Exits, a three-in-a-line, and four kinds of trader
The levels are not a mechanical rubber stamp, and he does not treat that as a flaw. Markets are dynamic. Who is dominating, an intelligent entry, and, before the entry, the exit. The exit is much more important. Last is the math behind the style. Those three are the whole list. A setup he likes and will still throw out is three candles in a line, a simple candlestick pattern he uses often when the liquidity is at the low and he expects a push. If something on the chart can stop that three-in-a-line, he does not take it. Context and the supply and demand levels come first. If the pattern then prints at the level, that is the place for the fast trade, and it is also where he expects to take the gain.
More than 90 percent of traders, in his view, have a psychology problem, which is why he works with psychologists and why he says real hedge funds do the same. Social media taught retail that the money is easy. A small loss produces a feeling of being unfit. A fast win produces the feeling of being God. A lucky punch is its own problem. The path he wants is step by step, not one gigantic shoot. An idea that shows up with a gigantic hit rate and a gigantic payoff is, most of the time, the trade that loses. The job is hard, and it is still a job. The red flag on social media is the promise of very large money very quickly. It plays fear and greed. Becoming a dentist takes study. Trading, he says, got a free pass on that requirement, and the pass is the lie.
When the structures are clear the desk is boring. Ideas are created, setups are waited for, and the market decides. A scalper has to watch. A counter-trader, a swing trader, or a trend follower does not have to stare at an open trade. The target was chosen before the entry. Without that, the numbers are not real. Emotions are allowed elsewhere. With money, he wants inner neutrality. Otherwise, after two, three, or five years, the stress makes people ill. He has watched it.
Trading against the subconscious has a concrete shape. A counter-trader with good setups and no context for the day, fading everything, is in trouble. Someone whose personality actually fits that style can wait. The first question is who you are, calm or forceful, and only then where a breakout trader's knowledge is allowed to be used. A breakout setup inside a large balance is the wrong tool. Outside a supply and demand zone, the question is whether the break is real and whether the volume is in it. Students who bought a course and are reproducing setups feel bored, or they fire the setup all day without knowing when it is valid. His order is the reverse of the usual one. Who am I, what in the subconscious is in the way of making money, and only then the trading. Most people start with the trading.
The tool he uses for the first question is an awareness analysis, about two hundred questions and half an hour. The result says whether someone is forceful or calm, creative or a doer, and where the subconscious problem sits. He builds four trading characters from that. Breakout traders are forceful. They want the moment, and they have to be disciplined when the market does not go. Counter-traders are a different person from a trend follower or a breakout trader. Intraday swing traders are the calm ones, in a lot of markets, taking what he calls the big-number trades: a very small hit rate and a very large payoff. A 37 percent hit rate, known in advance, is something a lot of people cannot sit through. Scalpers are forceful in a different way, high discipline and high focus. His comparison is a Counter-Strike player. The rules he teaches are different because the people are different.
Hand someone a fully mechanical system that does not fit, and he says they will lose money, strategy included, because they are trading against the barrier the whole time. His own example is from around 2004, early, when he bought a stock breakout. Multi-timeframe, powerful, and still working today, but only for small breakouts. A great deal of preparation, a wait, and then a button. If it does not go, the stop arrives fast. A trader who cannot take that stop, call it not their day, and leave it, starts gambling the money back. It is the only strategy in his life that did not work for him. For other people it works very well.
He will not rank psychology above the strategy or the reverse. Without green numbers there is no edge and no money. The edge has to be combined with the person, and a technical edge that pays for someone else does not have to pay for you. First the knowledge of how markets work. Then a strategy built from that knowledge. Then a written record of whether the trading feels good or bad. A new trader, before any of the indicators, needs an idea of how the job is learned. Then, a little at a time, which structures work, who dominates, who the players are, which technical tools are usable, and what the macro stories are. Then trader DNA, his name for it. Then the person goes back and picks the opportunities that fit. After 200, 300, or 500 trades the real numbers exist. That is when he would start with real size. Before that, step by step.
What a bad day is, and what he would tell himself
A red day is normal. It is the job, and the stop is the security that he never loses more than he can lose and still feel confident. A bad day is a day he is not disciplined, and he loses more than he was willing to lose. The rule that saved him the most money was stopping being naive about other people. He lost a great deal trusting other ideas.
He started in 2003 and 2004 with no idea what the job was. Someone told him 2 percent a trade was a good idea. He had no discipline and no risk management, and he lost a lot. There was no replay. He did it on paper, watching the same structures come back, without yet knowing that a market can leave a large balance and become an aggressive trend. Lehman Brothers, and everything around it, changed the rules a little and gave him the experience. To the 2003 version of himself he would ask what he thought he was doing with the money and with his family, and he would tell him to feel it, and to think harder if he could not. The one mistake he would forbid is starting before he could answer what discipline is, whether he lived it in ordinary life, and why greed kept it out of the trading.
For someone who wants to be meaningfully better in six months, the first job is to learn which strategies actually work across the structures markets take, which means understanding how a market works. The second, and he says it has to be there too, is fear, greed, and neutrality whenever the work is money. The practical version of that neutrality is ordinary. Look after the body in the morning, a little sport, feel well, and only then draw the line for the trading day. If the feeling is unsure, the cause is usually outside the session. Sleep. Less alcohol, fewer late nights. A disciplined market life is a disciplined life. He does not think trading is the hardest job. It is the hardest one for the subconscious. With neutrality there is no stress, and the work of building a structure and testing whether it works is creative. Other jobs are harder on the body. Becoming good at this one still takes a lot of work.