Interview, Fireside Chat, Podcast
Animal Speed, Size, and Being Right at the Right Time · Steve Ruffley
- Steve Ruffley is a professional retail trader based in New Zealand with nearly two decades of experience, transitioning from a 2004 graduate program on a professional trading floor in Gibraltar to his current independent trading career.
- Ruffley's early trading education occurred at Revco in Gibraltar, where he endured a six-week "brutal" graduate program involving daily milestones where failure resulted in immediate dismissal.
- A pivotal career moment occurred after Ruffley spent a year in the risk management department, where he observed that successful traders utilized large size and speed rather than strict percentage-based risk management.
- Ruffley distinguishes between pro and retail risk: professionals trade against fixed daily dollar limits (e.g., -$1,000 stop) rather than percentages, allowing them to recover losses later in the day, whereas retail traders often use rigid percentage stops that limit upside potential.
- Ruffley argues that the "biggest lie" in trading is the belief that consistency alone guarantees the ability to scale up size; he asserts that scaling requires a distinct psychological leap and a "repetition" process to build tolerance for larger financial exposure.
- He describes his trading psychology as becoming an "animal," characterized by harnessing fear and greed to execute trades without hesitation, viewing the discomfort of large size as a necessary condition for significant profit.
- Ruffley employs a framework based on time horizons with three distinct trade types: scalps (up to 15 minutes), average trades (up to 2 hours), and day trades (up to 8 hours).
- His definition of a "big trade" is one lasting 8+ hours; these are typically executed with smaller position sizes to manage the psychological stress of P&L fluctuation while waiting for larger market moves.
- Ruffley identifies that 80% of his trades are shorts, capitalizing on volatility spikes and quick pullbacks within long-term bull markets rather than chasing breakouts.
- He utilizes predetermined technical levels, including Fibonacci expansion points, to identify market extremes, noting that these levels are based on his specific experience rather than general analyst consensus.
- Ruffley advocates for "fading" news narratives and data, suggesting that retail traders should focus on market price action and reaction rather than the underlying fundamental data itself.
- He warns that media presentation of data often shifts to suit specific narratives (e.g., portraying a strong economy to justify rate hikes), which can lead to market moves opposite to the fundamental data.
- Ruffley advises against the "endless doom loop" of learning more technical or fundamental analysis without gaining the confidence to execute trades consistently.
- He believes that 70–80% of retail traders lose money because they fail to step outside their comfort zones regarding trade size and time commitment.
- Ruffley's "Pro Retail Trader" book (released November of the previous year) is the culmination of a three-year effort to distill his journey and framework for other traders.
- He recommends that traders do not need to sit at screens for 10+ hours daily; instead, they should use alerts and connectivity to engage only when high-probability setups or volatility events occur.
- Ruffley advises traders to track their P&L in real-time during short-term trading, contrary to long-term investing advice, to catch rapid price reversals that can turn profits into losses in seconds on retail platforms.
- He suggests that traders who wish to scale up should incrementally increase lot sizes (e.g., from 1 to 2 lots) to test their psychological tolerance, often accepting an initial loss as part of the learning curve.
- Ruffley notes that professional floor traders rarely share their specific "edges" or trade setups, as confidentiality is essential to maintaining a competitive advantage in a high-stakes environment.
- He observes that the modern market environment, influenced by political events like the Trump presidency and economic shifts like "net zero," creates frequent narrative-driven volatility that retail traders can exploit if they react to price action rather than the news itself.
- Ruffley's most difficult trading challenge is managing the emotional toll of holding day trades for up to 8 hours, where he must resist the urge to close positions due to P&L fluctuation while waiting for confirmation of a trend.
- He emphasizes that successful trading requires "ownership" of one's system, urging traders to adapt frameworks to their own personalities rather than blindly copying others.
- Ruffley warns that the "unexpected" moves that generate the largest profits are often missed by traders because they are unprepared due to reliance on established narratives.
- He identifies a shift in his own philosophy over the last decade, moving from an 80% technical/20% fundamental approach to a 50/50 split, acknowledging that media narratives now heavily influence market direction.
- Ruffley states that his "edge" on retail platforms includes the ability to execute "muscle memory" trades via keyboard commands, allowing for rapid entry and exit despite the latency of retail brokers compared to Direct Market Access (DMA) systems.
- He advises that if a trader cannot handle the psychological stress of a trade type (e.g., day trading), they should not attempt it, regardless of the potential profit, and should focus on their inherent strengths.
- Ruffley's contact information includes his website (steveroughley.com), Twitter, and YouTube channel, all under the handle "Steve Roughley."