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Andrew Cardwell teaches his proprietary RSI course to individual traders, brokers, money managers and technical analysts from around the globe. He is a very respected and sought-after lecturer who has presented at some of most prestigious worldwide financial conferences. From 1990 to 1992, he provided weekly market commentary for the Financial News Network and has also appeared on CNBC, providing opinions based on his RSI experience.
His articles have been published in Futures magazine and by Knight Ridder News Service, and he has been featured in the Commodity Traders Consumer Reports “Trader Profile” series. Catching up to Andrew in his hometown of Atlanta was very enjoyable and it was great to have a chance to garner his ideas on trading, especially how it pertains to the futures markets. This is the conclusion of our two-part conversation.

Optionetics: What mistakes do most people make in the markets?

Andrew:  Over-trading and poor risk management are what I have seen the most of in both new and seasoned traders. Becoming married to an opinion and unwilling to take a loss are 2 others.

Optionetics: How important is money management in your overall approach to trading?

Andrew:  Defense wins ballgames. Every trade carries a risk. There are 4 basic trading decisions: 1) Buy; 2) Sell; 3) Hold, or 4) Do nothing. Deciding to do nothing is itself a trading decision. Poor money management knocks you out of the game quickly. Good money management (and risk control) keep you in the game. Managing profitable positions allows you to build capital appreciation. So proper money management, over the long run, is more important than capital appreciation. To quote Kenny Rogers – “You need to know when to hold and know when to fold – know when to walk away – and know when to run.”

Optionetics: How would you characterize your approach to the markets?

Andrew:  Identify trend, recognize trend change and target future price objectives in the direction of the new emerging trend. My Basic RSI Course focuses on trend analysis, trend change and price targeting. I have used this approach since 1978 and the only thing that changed were the names of the markets.

Optionetics: What do you think are the greatest misconceptions people have about trading and investing?

Andrew:  There is a very big difference between trading and making money. Most traders pockets are not deep enough to learn the differences quickly. This is precisely why money management is more important than capital appreciation. Being disciplined enough to follow the rules of your trading program you will realize that only by following your rules (given you have a solid trading program) will you have an opportunity to achieve capital appreciation. Following your trading rules is more important than making money. Leverage can be a double-edged sword – holding on to a losing trade in the “hope” that the market will come back – is something I have seen traders do quite often. Leverage is great when the market is moving in your favor, but it can also jump up wipe out your capital quickly when it moves against you.

Optionetics: What would you say are the most reliable chart patterns and indicators for a trader to watch out for and monitor?

Andrew:  For me, what I shared in my course, and which I have used since 1978, are my RSI Range Rules for trend analysis and Positive and Negative RSI Reversal Patterns for identifying trend change and price targeting, are the basis of my trading program. Most traders do not recognize trend change quickly enough to take advantage of the trend change. Many are more concerned with what their next trade will be without any consideration of what the underlying trend is. A simple bar chart with a medium to longer term moving average on close should be a starting point for most traders – and keep you out of trouble. Aside from chart patterns and indicators, a trader needs to know and understand why he is trading. When you can know why – then you can learn some of the differences between “making money and just trading.” Those that have taken my courses (Basic RSI and The Edge) have expressed to me that after studying the courses they understood why they were trading and learned the difference.


I would like to thank Andrew Cardwell for sharing his technical approach and the various methods he teaches to his students. Even though Andrew concentrates primarily on the futures markets his methods are applicable to all markets that have liquidity.

For Part I of this interview, please click here.

Happy Trading.

Jeff Neal
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
jeff.neal@optionetics.com

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