Darry Van Dyke Interview
Could you tell us a little about yourself?
I’m a professional trader and trading coach. I have experience trading most markets, but have found a profitable niche in equities (and sometimes forex) arbitrage strategies I’ve developed. I now seek to pass on my success to others though coaching and mentoring at Intersight Trading. I live near Vancouver, Canada, have four children, one wife, and a very average looking cat.
How did you get started trading?
I actually became interested when I was 10 years old. I asked my father, who traded part time, why he was drawing lines on corn and wheat charts. He explained how he calls a broker to buy and sell commodities and profits when the prices moves his direction. I was hooked (although at the time I didn’t know you could lose money too!). When I was 18 I opened my first equities account, made some extra money buying “primary” shares on Vancouver resource company IPO’s. In 1988 I increased a futures account from $2,000 to $18,000 trading Soybeans during a drought. After that I spent years studying the markets, but mostly floundering when it came to finding consistency.
How long have you been trading now?
25 years total. 9 years as my full-time occupation.
What do you like best about trading?
Many things. No traditional business overhead and headaches (clients, staff, marketing, etc.). Flexible hours, freedom to trade almost anywhere. But most of all I like the variety and creativity of trading…every day in the markets is unique. Also, I’m a researcher by nature and I enjoy finding overlooked or unseen market opportunities and creating strategies to exploit them.
What markets do you trade?
I’ve traded most markets at some point, but stick primarily to equities, and a little Forex or options when certain opportunities arise.
What style of trading do you use?
My main style is arbitrage, which I would define as taking advantage of price inefficiencies between correlated securities, markets, or fragmented individual securities. Depending on what the market makes available, this can involve spread trading, automated “market making,” and many other strategies
What have been the biggest influences on your development as a trader?
Getting rid of all technical indicators and learning to tape read, countertrend trade, and discovering strategies to take advantage of the capitulation of others–especially in times of high volatility.
What is the one biggest lesson that you have learnt since starting trading?
By far it is getting risk management right. More than just setting loss limits, risk management is also about analyzing the risk in each trade, adjusting for the current market environment & volatility, news events, regulation changes, etc. I adjust the position size, change entry or exit levels, or stay out of trades altogether based on my risk management principles.
How did you get interested in coaching other traders?
The first time I mentored someone I found it very rewarding and decided to pursue it further. Also, I found there to be a gap in the industry between coaches with professional trading experience (and a successful track record) and those who teach and make a few trades on the side.
Do you focus on coaching of one particular area of trading, e.g. risk management / psychology or finding trades?
All three are important, but I prioritize risk management, because the others won’t matter if you don’t preserve your capital.
How do you work together with your clients? E.g. phone / email / screen sharing?
Whatever works for them, but web conference or face-to-face works best.
What sort of results do your clients get after coaching with you?
Varies widely based on the individual, their self discipline, and how well they apply the principles they learned.
What is the most satisfying part of coaching traders?
Seeing someone become profitable.
What is the biggest but most easily fixed mistake that you see traders make?
Letting losses run and taking profits too soon. Deadly mistakes which can be overcome with proper trade management and psychology.
Do you recommend journals or other record keeping as an important part of trading?
Yes, I recommend keeping an excel spreadsheet to record trades or when doing research (paper trading). Using a trade diary is important to analyze why you took a trade and what factors were involved if your decision process.
What are the most common issues that you see in your clients that prevent them from becoming better traders?
Lack of perseverance. Trading for a living is by far the most challenging (and rewarding) thing I’ve ever done professionally. It took me a couple years before becoming consistently profitable. Be determined and disciplined to learn how to win at this game. Also, putting false hope in technical indicators (e.g., moving averages, RSI, and other squiggly lines). From my experience, the vast majority of it simply doesn’t work over the long run.
What advice would you give traders who are just starting out?
Get the right training as soon as possible. Mainstream trading books and seminars did not help me when I was starting out (funny how most trainers don’t show a track record of their trading results), and only served to impede my progress. Just like any other business, seek out someone who is successful in that field and learn everything you can from them, then put your own style or spin to it.
Any other advice or wisdom from your experience in trading that you could share?
Learn to see trading from a probability mindset and that losses are a part of the business. Just as a restaurant owner has food, salaries, and other expenses to pay, the trading business has to deal with losses as an “expense.” Although we endeavor to minimize them, we should not be distressed or take it personally when they come.
What 3 books do you recommend traders read?
“Reminiscences of a Stock Operator,” Edwin Lefevre
“Trading in the Zone,” Mark Douglas
“Steidlmayer on Markets,” J. Peter Steidlmayer