Trading Interviews

Chris Perruna

I was initially attracted for two reasons: the lure of great financial success and time freedom from the typical rat race work-force grind.

Background Info / Introduction

Q. Can you please start by making a few comments about yourself to include your trading style and what products you trade, your experience in years, and what other things of a trading nature take your time on a regular basis (e.g. writing trading books/contributing to forums/coaching/speaking engagements)?

My name is Chris Perruna, I am 29 years old and I currently reside in New Jersey with my wife but was born and raised in NY. I graduated college with a degree in Architectural Engineering and went to work for a historic preservation firm in Manhattan. I currently consult for a fortune 500 big builder as an architect (listed on the NYSE), write a popular stock market blog (www.chrisperruna.com) and trend trade for capital appreciation. I am also the Founder and President of MarketStockWatch.com, an equity research firm, but that business is on hold while I am thinking about writing a book and enjoying some free time.

I am a trend trader in the equity markets looking for gains of 25% or more and losses no larger than 10% (preferably smaller). Understand that this 10% loss is calculated into a position sizing spreadsheet that only risks a maximum of 1% of total capital. My foundation is rooted in CANSLIM philosophies but I developed my system with detailed position sizing calculations and money management rules from Dr. Van Tharp’s book: Trade you way to Financial Freedom.

I consider myself an intermediate term trader that uses daily and weekly charts. I can hold a position as long as a year or as short as one day. I will cut a loser in the first day of trading and can take a profit in as little as a week if it hits my target. My targets are based on risk-to-reward ratios. Once a target is reached, I set retracement stops that will allow the profits to grow without great risk.

I also trade options on occasion and have had that account active since 2002 and would like to move into other markets such as futures and possibly currencies if the opportunity presents itself.

Q. It is fair to say that most people are initially attracted to trading by money. Is this what initially attracted you or was it something else?

Yes that is a fair statement. I was initially attracted for two reasons: the lure of great financial success and time freedom from the typical rat race work-force grind. Older and wiser, I am now attracted for other reasons as stated throughout this interview.

Q. What are some of your good and bad memories of your early trading days?

I stated trading in the late 1990’s so I have good memories of buying my first stock ever and watching it triple in price over a few months. Many of my early memories led me to believe that trading was too easy. My bad memories contain the trades that lasted into 2000 and 2001 that didn’t seem to cooperate with my original idea that trading was “too easy”. EXTR is my worst memory but my best lesson as it dropped from $55 to $15 and gave me a huge loss in my overall account equity. It taught me the first valuable lesson of my life: cut losses short (which I truly started to understand after discovering CANSLIM).

Q. How would you describe a couple of your biggest mistakes in your early trading days?

As mentioned above, my biggest mistake was trading EXTR in 2000 and 2001. I followed the stock as it made huge swings of 50 points or more. I started to play it and was burned badly once 2001 concluded. I didn’t understand position sizing and risk management as the majority of my account was in one stock. It crushed the majority of my gains from 1999 and 2000.

Q. Looking back to the beginning, in the face of the usual challenges, what motivated or inspired you to learn to trade well?

My losses in 2001 inspired me to seek out how to trade for profits on a consistent basis. I subscribed to Investor’s Business Daily and started to read every book I found on investing. I figured that there had to be a way to trade successfully without incurring such large losses and account drawdowns.

Q. On reflection, was there a single moment in time or situation that ultimately had the greatest influence on your trading?

I don’t know if I would call it a single moment but rather a continuing process of market education that was pointing me in the right direction to become successful. The end of the 1990’s bull market and the ensuing bust taught me a great lesson and I am glad that I can say that I traded during that historical period of time. I started to transform into who I am today in the beginning of 2002.

Read more from Chris in the Trading Plan section …

Return to the Index of Interviews …