Notes for Chat with Traders, Episode 20

Added on by C. Maoxian.

Episode 20 ... Kunal Desai (65:15)

  • Likes Costa Rica, it's like "Jurassic Park"
  • Dad is an engineer, always dabbled in the stock market, "the worst trader in the world"
  • Graduated high school during the dot com boom, everyone was a day trader
  • Opened first account with "buyandholdtrading.com"
  • Looked for ideas at MSN Money, Jim Jubak
  • Lost all his money in less than a week during dot com bust
  • Lost all his money again in Global Crossing, Nortel Networks, Lucent Technologies bust
  • Had years of this kind of up and down disappointment
  • These losses taught him how to be resilient
  • Met Paul Singh online
  • Indian people love to get free stuff from other Indian people
  • Desai had knowledge but no trading methodology
  • Had to corral what he knew and make a cookbook, systematize his knowledge
  • Build routines to build a trader
  • How do you size your position? You have to have a method
  • People freeze when they have a loss, deer in headlights, can't get out
  • A-ha moments come from competence and then repetition, practice time
  • Competence plus screen time, you begin seeing things clearly
  • People give up or blow up before they get requisite screen time
  • Takes thousands of repetitions, simulated or live or trade reviews, to reach a-ha moment
  • Took Desai *years* to get profitable
  • Paul Singh, veteran trader, passed down his knowledge to him 
  • Took another year before he said, yes, I can do this forever
  • How long do doctors and lawyers go to school before they make a buck? Years! Trading no different
  • Desai trades momentum stocks, a trend trader, both long and short
  • Read William O'Neil, made sense to him, better matched his personality than Buffett buy and hold
  • Earnings breakouts the most powerful thing he has seen in trading
  • Good daily chart an absolute necessity
  • Earnings surpises are the best, people rush in
  • High relative volume makes patterns very clean
  • Being a generalist will not make you money
  • Master one or two things, better than knowledge of 20 or 30 things
  • Mastery takes the thinking out of a trade
  • Once a stock gets in play, you trade it both long and short, keep it on your radar
  • Must understand your own personality, what you're comfortable with, what fits you
  • If you're uncomfortable, you're not going to trade well
  • Find something that you "vibe" with
  • He can't tame himself, he's a wild, aggressive man and accepts that
  • He has max loss on his trading account, $2,000 a day is his max ... stops trading at -$2,000 mark
  • Live to fight another day
  • When you see the market well, push it
  • Give back rule: if you give back half your gains, cut yourself off
  • He experiences FOMO a lot, worse for him than taking losses
  • "You chase, you die" -- condition yourself to know this
  • Market gives you endless opportunities, "on to the next one"
  • "Skills are cheap, passion is priceless" ... don't get into trading for the money
  • People without passion give up at the first sign of trouble
  • Long, rocky road to trading success ... need passion to get through it
  • It takes years and years and years before you make any money
  • You can't date, you miss weddings, birthday parties, etc.
  • You have to work like a dog, long hours, huge cost
  • Desai had desk job while he was learning how to trade, he was obsessed with trading though
  • His successful students all have incredible resilience
  • "Oh shit, this is going to be hard." People quit.
  • People get frustrated and give up, even with the simulator
  • Once people start live trading, their money is on the line, they go to dark places, the resilient make it
  • Lots of talented people just give up once they get knocked down
  • You are not trading chart patterns, you are trading your hopes and dreams
  • Can't learn how to trade when you need the money from trading
  • Every good trader is in good shape, no fatties, "get your pump on"
  • He needs to trade with a beach view, helps him maintain his perspective
  • Whoever you are, it will come out in your trading, get to the root of it
  • Everbody knows the patterns, everybody knows what to do, but only 1% can actually do it
  • bullsonwallstreet.com (est. 2008)
  • You need a mentor, a community, to learn how to trade
  • "My man!"
  • Twitter: kunal00

Movies Watched -- Norman: The Moderate Rise and Tragic Fall of a New York Fixer (2017)

Added on by C. Maoxian.

118 minute running time so at least 18 to 28 minutes too long. A weird one, I fast forwarded from 20 minutes in. Casting a gentile like Richard Gere (a Methodist who converted to Buddhism no less) to play someone named Norman Oppenheimer is nearly as mysterious as casting Steve Buscemi as a rabbi. Anyway, that aside, it is a sad story, the tragic end is not an understatement.

The Jewish macher as someone lovable ...  (macher from maker, a person who gets things done, but it does have the negative connotation of "fixer") ... he's not shady so much as he is a cipher ... a nobody desperately trying to be somebody ... these are sad ideas.  Maybe if it had been 90 minutes long, I could have watched it at normal speed and enjoyed it, but no, it's overly long.  Yellow rating.

 Let me introduce you.... 

Let me introduce you.... 

Notes for Chat with Traders, Episode 65

Added on by C. Maoxian.

Episode 65 ... Brett Steenbarger (59:20)

  • Read The Fountainhead by Ayn Rand as sophomore in college
  • Thought psychology could be used to make people do their best
  • University of Kansas grad school, late 1970s, political psychology degree
  • Trading his avocation, psychology his vocation -- parallel interest
  • The Psychology of Trading, his first book, written in 2000
  • Victor Niederhoffer, a friend and mentor, encouraged him to write a book
  • Teaching at Syracuse University medical school at that time
  • Chicago trading firm hired him away to work for them full time as trading coach 
  • Market makers he was working with didn't use charts or fundamentals, just the book (DOM)
  • Pro athletes still work with coaches even after they've made it; same is true of pro traders
  • Markets change, traders need to evolve
  • Identify and build upon strengths
  • Now he works with several hedge funds and financial firms as a consultant
  • Market volatility expands and contracts, traders need to adapt to that
  • Separate logical from psychological errors -- correctly identify that first
  • People are more sensitive to losing money than making money
  • Become exquisitely aware of your habits -- build self-awareness
  • Observe yourself, then re-channel yourself
  • He has four cats
  • Revenge trading comes from frustration, you want to make it back
  • Be aware that you are about to revenge trade, step away from screens, calm down
  • You can't change something you're not aware of
  • Commonalities of successful traders:
  1. Adapting to changing markets (trends, volatility, people participating all change)
  2. Building on strengths (day traders are good at fast thinking skills and pattern recognition; investors are slower, deeper thinkers)
  3. Cultivating creativity (seeing the world differently from others, seeing opportunities others don't see)
  4. Developing best practices (and turning them into best processes)
  • Best practices: how you generate ideas, manage positions, manage risk and reward, review your results
  • Trading Psychology 2.0 is his second book
  • You don't have to motivate yourself to eat breakfast, it's just routine
  • All your best trading practices should also just be routine, no motivational sticky notes on monitor needed
  • Repeat what you do every day until it becomes a routine ... all about repetition
  • Make the most of your competencies
  • Work around your weaknesses
  • Steenbarger knows he can't make markets, cognitively and emotionally he's unable to make rapid decisions and process lots of information
  • Steenbarger himself suffers from cognitive overload easily, needs to be able to reflect
  • Steenbarger tried to trade full time and absolutely hated it because he wasn't working with people [I'm the opposite]
  • Uses guided imagery to have traders imagine hitting their stops, losing money ... but staying calm and controlled
  • Effective goal setting requires a specific plan, a day to day plan
  • A goal without a plan is a wish
  • Not a fan of monetary goals -- performance anxiety is real
  • P&L front and center (the outcome) will mess up your processes
  • Better to look at improvement ... month to month, not just P&L, but risk-adjusted P&L
  • Make friends with loss and failure ... your losing trades teach you things, what changed? 
  • Embrace the mistakes you make, ultimately how we become better is by learning from mistakes
  • Don't think about your results in dollar terms, think in percentage terms 
  • Hard to take risk and make good decisions when you think you must succeed 
  • Make sure you have something in your life that's more important than trading
  • Trading shouldn't be the major part of your life ... you need to be balanced
  • Traders with longevity have some source of satisfaction separate from profits
  • A fascination with the markets themselves could be that source of satisfaction
  • Website: traderfeed.blogspot.com
  • Twitter: @steenbab

Movies Watched -- 20th Century Women (2017)

Added on by C. Maoxian.

118 minutes long so at least 18 to 28 minutes too long. Set in Santa Barbara in 1979. Annette Bening is a 55-year-old single mother with a 15-year-old son ... she's sort of a Bohemian Mom, doin' the best she can with a teenage boy, which isn't very good. She chain smokes which may explain why she looks older than 55 (Bening is in fact 59). She has a couple of boarders in her house, and they form a sort of weird "family." I fast forwarded from 20 minutes in.

There are some funny scenes... the "family" and some hippie friends watch Jimmy Carter's "Crisis of Confidence" speech, at the end of which someone says, "Wow, he is so screwed," which made me laugh.  At the dinner afterward, the pretty punk tenant (Greta Gerwig?) leads the group in saying "menstruation" together, which I found amusing. But there's no way I could have sat through two hours of this at normal speed. Yellow rating for Boomers and very early Gen-Xers (say, pre-1965 Gen-X). Anyone under 40, or especially under 30, would hate this nostalgia piece.

Dick Brody wasn't thrilled and got out his thesaurus: "the banalization of its meditative, nearly collage-like sense of memory." Melissa Anderson nails it in this brief review: "a trip back in time in which era-specific talismans substitute for genuine thought. Though big feels glut 20th Century Women, even emotion seems ersatz."

 Period blouse

Period blouse

Movies Watched -- Mudbound (2017)

Added on by C. Maoxian.

135 minutes with seven minutes of end credits so it's still over 30 minutes too long. Depressing and a tear-jerker. You know something horrible is going to happen the whole time (1940s Mississippi, after all), you have a sense of doom, you know, oncoming tragedy. Female star is Carey Mulligan and her funny ventriloquist dummy face. She's talented and has gotten a *lot* of work in recent years. "Mike Ehrmantraut" plays the villain ... always makes a good bad guy.

The movie wasn't badly made, it's just overly long (Rex said it should be called Stuck-in-the-Mudbound). The atrocities committed by racist white men not that long ago shouldn't be forgotten ... but it isn't entertainment. They tried to end it on an upbeat note, but it's still painful to watch. Yellow rating.

 Sharing a smoke.... little nod to Michelangelo (The Creation of Adam)

Sharing a smoke.... little nod to Michelangelo (The Creation of Adam)

Movies Watched -- Wonder Woman (2017)

Added on by C. Maoxian.

141 minutes with 10 minutes of end credits which means that it's only 30 to 40 minutes too long. The trouble is the backstory takes a good 30+ minutes, the whole Princess Diana of Themyscira, Daughter of Hippolyta thing. There are so many of these comic book superhero movies now because Gen-X has taken power from the dying Baby Boomers, and these are the movies Gen-X wants. The formula is to lighten the ultra-violence with some comedy (including a big dick joke), and it largely works here.

Gal Gadot, wow, talk about the ultimate Jewish Princess. She's amazing -- tall, beautiful, great bod, sexy non-native English speaker accent. I could just watch here alone on screen for 141 minutes. Evil Germans ... who tires of German villains? Dr. Maru's face mask was well done. Matt Damon-ish guy playing the American hero (the Americans are always heroes). Hollywood movie so they throw in an Injun, a Moroccan (with fez!), and a goofy Scotsman (with kilt!) for the Sesame Street PC thing. 

It wasn't terrible, but it was just so long, and filled with CGI bullshit that I hate (looks more like a videogame at times than a movie), and the formula is tired. I can't recommend this, other than just watching it for Gal Gadot, who definitely deserves your very close attention. Yellow rating at best.

 Come hither

Come hither

Movies Watched -- The Meyerowitz Stories (New and Selected) (2017)

Added on by C. Maoxian.

112 minutes so at least 12 to 22 minutes too long. I hated this. Watched it on Netflix so I couldn't fast forward. Talk talk talk. Screwed-up family. Whining adult children ... Adam Sandler playing a "serious" role -- always a bad sign ... Ben Stiller, ditto ... and there's Adam Driver from Girls again, that guy gets roles non-stop even though he can't act.

What could have interested me here was an exploration of religion... were all of Dustin Hoffman's wives (incl. Emma Thompson, Candice Bergen) gentiles? Were all his kids half-Jewish? Did Judaism play any role in their upbringing? Sandler's beautiful daughter is obviously a WASP, did Sandler marry outside the faith? There was not a word about any of this. His daughter makes shocking artsy porn as a freshman at Bard -- isn't that cute?

Selfish Baby Boomer dad, now a doddering old guy, screwed-up kids, who cares? If Dustin were in the hospital for two months, who paid for it? Would his healthcare plan from Bard pay for all that? Some of it was sort of funny, but not really. I suspect I'd hate every movie that Noah Baumbach makes.

Full red, avoid this movie. 

 Token black boyfriend to boot!

Token black boyfriend to boot!

Movies Watched -- The Salesman (2017)

Added on by C. Maoxian.

In Persian. 125 minute running time so at least 25 minutes too long. This was depressing. It was made by the same guy who did About Elly, which was also depressing, and A Separation (which I really liked). Iranian society appears to be screwed up ... I guess it's mainly an Islamic Republic thing (the "clerics' clamp," as Tony Lane put it) ... sacred versus secular / traditional versus modern, etc. All the same themes the guy explores in all his movies (marriage, money, the State), but he's also interested in examining humiliation and revenge here.

What interested me was how poor Iran looked, it reminded me of 1990s China ... terrible construction quality, ugly fixtures, cheap everything -- just depressing. I'm not going to talk about the story at all, since it's a little complicated -- it's a sort-of thriller. The movie starred some stunning Iranian women of Instagram, same as About Elly (same lead actress). Beautiful women. Can't recommend it for a general audience, but my capital A.R.T. art readers will like it ... gets a yellow rating.

SPOILERS: (I don't think any kind of sexual assault happened ... he stroked her hair, thinking she was Ahoo, and when she turned, they both freaked out and she fell and cracked her head open. He panicked and left. There was no rape. Any real "violation" never occurred ... it's just in her husband's mind.)

 You lookin' at me?

You lookin' at me?

Notes for Chat with Traders, Episode 158

Added on by C. Maoxian.

Episode 158 ... Phil Goedeker (62:01)

  • During earnings season, small caps don't run
  • Wanted to make big money before his 30s, didn't want to do a lot of schooling
  • Only two routes: real estate and the stock market
  • Opened first brokerage account as sophomore in college with $3,000, lost it all
  • Studied everything he could, but couldn't find any consistency
  • Next summer's earnings of $3,000, lost it all during junior year
  • Didn't have patience to buy and hold
  • Finally discovered short selling as a senior in college
  • CAFE ("Host America") went from $5 to $15
  • He shorted as much as he could
  • CAFE was halted for a month, he was scared to death
  • CAFE opened at $5 from $15 and he made $15,000 [CAFE delisted in 2005]
  • Started shorting overhyped stocks exclusively during senior year
  • Turned $5,000 into $1,000,000 between August (2005?) and May (2006?)
  • He went all-in on every position he took, no rules, would just hope for the best
  • Graduated with an accounting degree, but knew he'd never be an accountant
  • Lost $500,000 by August (2006?) ... was "clueless"
  • Got scared, took $400,000 out, put it in the bank, kept $100,000 for his trading bankroll -- 22 years old
  • "Well hell"
  • Every month, whatever he made from the $100,000 trading stake, he'd put in the bank
  • Went next three to four years making half a million dollars a year -- 25 to 26 years old
  • Studied all the big winning stocks on a yearly, monthly, weekly basis -- till he was "blue in the face"
  • Drove a Hummer H2
  • He went through everything, every mistake, every high, every low
  • Never had another job other than day trading since sophomore year in college -- 13 or 14 years now
  • Wanted to make $30,000-$40,000 a month with his $100,000
  • Had one losing year in his late twenties when he strayed from his old style
  • Went back to his old style (shorting small caps) and went back to making big money
  • "Well hell"
  • Tried his best to eliminate his big losing trades, "cut his losses faster"
  • Increased position size on his golden setups and cut losses faster -- had even better years
  • Late 2017 had some golden setups: HMNY from $2 to $37; RIOT from sub-$10 to $46 -- "hype bubbles" [charts below]
  • Only plays from the short side
  • Momentum names are manipulated, low float (less than five million shares), press releases to pump them up
  • Cryptocurrencies are the same -- low float plus hype
  • Halt risk a major concern on these plays -- need to be cautious on the long side
  • Timing the shorts is difficult -- shorted 100,000 shares HMNY from $8.50, got out in high $9s -- took the loss
  • Starter size (5,000-10,000 shares) in positions -- goes against him, he takes the loss; goes with him, he adds
  • Never starts a short and looks to add higher ... never adds to a losing position
  • Day three of a parabolic move should be a winning entry, but who knows, it often isn't
  • He gets extremely aggravated entering the positon -- takes a lot of small losses
  • Pays a lot of attention to volume -- only looks at price, volume, and VWAP
  • Big drops on heavy volume is one of the main things he looks for
  • Bases his stops off the chart ... tries to find support and resistance levels on chart
  • Find your niche as a trader ... find out what you're good at
  • Parabolic set-ups are what he's good at ... puts all his money behind those trades
  • Timing the crash of these parabolics is the difficult part
  • So excited when he sees a parabolic set-up, he can't sleep at night
  • 75-80% of his trading income comes from shorting the parabolic moves
  • Multi-day versus multi-week versus multi-month runners
  • The higher it goes, the more conviction he has, the larger his position size
  • Gotten lazy because he has two kids now
  • Every year, prints out charts of all the stocks that are the year's biggest low float winners, all "pockets of air"
  • Every single one of them has crashed
  • Adds to his winners as they collapse, "slamming that bid"
  • He might hold a winner for weeks on end
  • Only overnight risk he has is a Press Release
  • Mentions ETRM from 2016? [now delisted]
  • Mentions KBIO ... stock went from $2 to $10 or $12 then went to $40 [now OTC]
  • Seen a lot of traders blow up holding low float shorts overnight
  • Wait for the backside of the move, "backside" is after it has exhausted itself [no clear definition of "backside" given]
  • Slams the bid over and over and over again... he definitely moves the stock by doing this
  • 95% of traders fail because they lose money [Ummm] ... they don't have their niche [OK]
  • Find out what you're good at and perfect it
  • Take it slow, take it in stages as you increase your position size
  • Has seven or eight brokers now, essential if you're short-biased
  • If you're long-biased, only need one broker
  • In order to short the stuff he's shorting, the broker has to have shares available [tell me about it]
  • Low float stocks -- most brokers don't have shares available
  • If one broker has the shares as easy to borrow, no need to look to his other brokers
  • Getting the locate is everything, without multiple brokers, you won't be able to play the low float parabolic game
  • Locate fees and fees for holding overnight vary from broker to broker
  • Locate fees and overnight fees are extremely high -- will take at least 10-15% of your gross profits
  • He was long GBTC, didn't realize it wasn't marginable, when it dropped he got a large margin call
  • He has traded beside other good traders who have blown up ... 5-, 10-, 15-year veterans who made one or two mistakes and they're gone
  • "You get stubborn and you're done"
  • Make sure you have a backup plan ... his is buying farmland in Missouri, then rents it to farmers
  • If he blew up tomorrow, he couldn't get a job because day trading is all he has ever done
  • He has owned a lot of rental properties and it's a "big pain in the butt," "nightmare tenants"
  • "Well hell"
  • Hired property managers to deal with tenants, then he had to manage the property managers (another nightmare)
  • Farmland, he can't touch the money, and it doesn't take away from his market focus
  • Farmland: zero stress, zero time, zero maintenance
  • "Thank you, sir."
  • Twitter: @Ozarktrades
 HMNY, Daily

HMNY, Daily

 RIOT, Daily

RIOT, Daily

Notes for Chat with Traders, Episode 10

Added on by C. Maoxian.

Episode 10 ... Tim Grittani (52:48)

  • Finance major at Marquette
  • Learned that he didn't like finance
  • Was into poker and sports betting in high school
  • Opened account with ShareBuilder(?)
  • Started randomly buying and selling 30 cent stocks
  • Lost half his account within a couple of weeks
  • Joined Tim Sykes' "Silver Package"
  • Blindly followed trade alerts from "gurus"
  • Had emotional trouble once money was on the line
  • Hiding his P&L helped him become less emotional
  • Went full time after six months of struggle, $1,300 in the hole
  • November 2011 (?) back to breakeven
  • Made a new mistake, learned something new every day for six months
  • Learned to focus on a couple main set-ups
  1. OTC Pump and Dumps
  2. Buying multi-week or 52-week breakouts
  • Frustrated with listed stocks because too many factors affecting stocks
  • OTC stocks trade in a world of their own
  • Learned to understand promotions run on OTC market
  • Promoters have email lists with thousands of people on them
  • Understood all the connected promoter websites, subscribed to all of them
  • Would try to act on emails he received as fast as possible, beat the crowd on the spike up
  • Would also buy breaks of daily highs on the pumped stock
  • Fine line with fraud regarding stock promotions
  • Learned liquidity all important
  • Began short selling promotions instead of buying them
  • OTC promotions would get halted and would re-open weeks later down dramatically
  • OTC market dead until marijuana stocks ran in 2014
  • Began short selling listed stocks in the same way he shorted OTC promotions
  • When he sees patterns forming, he knows what to do
  • His edge is his experience
  • Spends 15 minutes every night putting together the next day's watchlist
  • Lost $290,000 on a single trade, LAKE, 9.90 entry, October 2014 (chart below)
  • Refused to cut his losses when mis-timed his entries, would always look to add higher
  • Before LAKE, trades would always work out for him in the end, developed a bad habit
  • LAKE experience taught him to cut losses
  • You need the right broker for your trading strategy
  • SpeedTrader best to buy OTC promotions back then
  • Only trade liquid, volatile stocks
  • Identify and focus on your niche
  • Traded only two OTC set-ups (new promotions, breakouts), nothing else
  • Trade charts and price action only (not hype)
  • Everyone knows OTC stocks are garbage, but just as many listed stocks are also garbage
  • Never hold and hope
  • Cut losses intelligently, not necessarily quickly
  • Base stops on chart, not some preconceived dollar or percentage amount
  • Figure your size from your risk level ... dollar risk is constant
  • "Trade the ticker, not the company" -- a Nate Michaud saying
  • Couldn't live without a market scanner -- how he finds his plays
  • Top percent gainers with dollar volume requirements is his main scan
  • Hasn't read any trading books, but interested in trading psychology books most
  • Don't waste your time following trade alerts or mimicking trades
  • Just make your own trades, win or lose, figure things out on your own
  • Be mindful about volume and liquidity -- avoid thin stocks
  • Blog: tradetheticker.blogspot.com
  • Twitter: @KroyRunner89
2018-02-06_12-10-57 grittani.jpg

Notes for Chat with Traders, Episode 69

Added on by C. Maoxian.

Episode 69 ... John Carter (66:34)

Sounds like a down to earth guy, clearly another old pro. 

  • Loves the short side
  • Starts the year with a $180,000 account with goal to turn into a million 
  • Very aggressive trader
  • Been actively trading for 25 years
  • With experience comes patience
  • Difference between successful and unsuccessful traders is patience
  • Patience to wait for the set-up, patience to hold winners
  • If you get emotional and chase, you mess up your mindset
  • Opportunity cost of chasing is huge
  • 18-year old working at mall in cookie store, making $4 an hour
  • Saved up $1,000 over the course of a summer, bought call options on Intel
  • Made $800 in a week from those call options, he was hooked [what if he lost?]
  • Dad read Investor's Business Daily
  • Wired as a risk taker
  • Three times where he built up 10K to 100K with crazy position sizes
  • Then lost it all by trying to go from 100K to 1,000K
  • Mark Douglas' books helped a lot
  • Stopped trying to make a million dollars
  • Appetite for too much risk vesus too much fear
  • If you're too fearful, you can't make a living as a trader
  • Made 100K a year in the corporate world, figured he had to make the same if he traded full time
  • People who are too fearful wait for confirmation and that's the exact time you should be taking profits
  • Became friends with Mark Douglas
  • Douglas' insights into the markets and human mind were key
  • You should think probabilistically while you're in a trade -- anything can happen, no emotional attachments
  • Most people try trading for two years then give up
  • He used early trading profits to buy rental property
  • Later sold rental property to have bigger trading stake
  • Took him eight years of frustration to learn how to trade
  • Average trader with right tools, it should take two years to learn how to trade
  • How do you react when you have money on the line? Calmly take action or deer in headlights?
  • People need to find their sweet spot
  • Types of trading: day trading, swing trading, investing  
  • Nearly impossible to overcome commissions when day trading
  • Impossible to know what's going to happen three months out
  • Two days to two weeks is his sweet spot
  • Looks at 30 minute charts, that's the lowest time frame he'll look at, NEVER looks at five minute charts
  • Markets pop then consolidate
  • Cut his teeth on stock index futures
  • Big options trader on individual stocks
  • Old traders have "three set-ups and four markets" and care about nothing else
  • You don't do the same trades all the time -- depends if the market is bullish or bearish
  • You can be long, short, or flat
  • Flat is one of the best positions -- mind is neutral
  • "Don't piss away your chips" -- be patient
  • One or two days a month of focus are all you need with larger than normal position size
  • People who trade to alleviate their boredom piss away their capital
  • To become a good trader, you have to master exits (both stop losses and targets)
  • Options are priced for "expected moves" -- exit at dollar move that's priced in by options
  • Huge fan of Fibonacci extensions: 1.272 odds of getting there good (take bulk off), odds of getting to 1.618 much lower
  • Options nice because you can define your risk easily, you can only lose what you put up
  • Selling options is fun too
  • Mistake that novice options traders make is looking for cheap options
  • Out of the money options are designed to suck people in and expire worthless
  • If you're bullish on something: buy an in the money call and sell a put credit spread (expires worthless)
  • If you're bearish on something: buy an in the money put and sell a call credit spread (expires worthless)
  • Greeks are a distraction to him, he never looks at them
  • Favorite set-up: "Squeeze" -- Bollinger bands are inside of the Keltner channels
  • Bollinger band contraction eventually leads to range expansion
  • He never looks at a chart for more than a split second
  • Best set-ups are obvious instantly ... don't stare at it and force things
  • All set-ups should be simple enough to explain to a twelve year old
  • Any more than three indicators on a chart is too many
  • Wins and losses are randomly distributed ... you need a large sample size to come to correct conclusions
  • Easy to get lost in indicators, price is the most  important thing
  • January 2014, (14 15 16, he can't remember), big TSLA trade [it was Jan. 13]
  • Likes to track short interest ... TSLA at 40%
  • TSLA had been down ten, suddenly up five
  • Bought 100 call options of TSLA at $6 (account was $1.5MM)
  • Ended up adding and adding, built up to 1000 call options in TSLA [half the account?]
  • Trade went against him a little, so he took a shower, trade stabilized
  • Sold half into close, half into next morning's gap up -- made $1.4MM
  • No more million dollar day trades since then for him
  • Everything came together ... takes guts to hold on to those concentrated positions
  • When things happen that shouldn't happen, people are on the wrong side, big things happen
  • Get on the other side of other people's pain  [I like it]
  • He likes three or four large positions to 18 small positions
  • Don't shotgun, be patient and focus
  • When he was young, he wanted to make that one big trade
  • When you're older and more confident, you have your skills and you get patient
  • Anyone who trades for a living has developed confidence despite constant uncertainty
  • Get comfortable being uncomfortable
  • www.simplertrading.com
  • 1000 members in his gold-level chat room
  • Twitter: @johnfcarter -- infrequent twitterer

TV Shows Watched -- Peaky Blinders

Added on by C. Maoxian.

Watched season one and enjoyed it. 

Notes for Chat with Traders, Episode 32

Added on by C. Maoxian.

Repeat guest ... first heard him on Episode 66, listened out of order. 

Episode 32 ... Dan Shapiro (68:43)

  • Grew up in Brooklyn
  • Lacked direction in life
  • Generic Trading / Carlin Equities (1999-2006),  sold to RBC [in 2007]
  • Borrowed money from neighborhood loan shark
  • Ron Shear at Generic Trading hired him
  • Met Mayer Hoffman, great prop trader (made hundreds of millions)
  • Did well during dot com boom
  • Would just buy the dips and did very well
  • Dot com bust and 9/11 changed everything
  • Didn't make any money for two years
  • Incredibly depressed, would sob himself to sleep
  • End of 2003 started making money again
  • People trading off their iWatches while on vacation on social media (it ain't real)
  • "Here's the deal"
  • Grew up poor in Brighton Beach, mom a manicurist, dad a waiter
  • Tasted success trading during dot com boom, had no Plan B
  • If he didn't succeed at trading, he would have killed himself (he's serious about this)
  • No highs, no lows to trading, it's just work
  • Wife told him he'd have to get a real job
  • Make $100 a day first, then go from there
  • Stocks trade in intervals, like steps in a staircase
  • Stocks go from supply to supply and demand to demand
  • Most stocks are not trade-able
  • Most traders have no patience and no bankroll and no education
  • Looks at 60 minute pivots
  • Figure out who the hell you are
  • Where emotional buyers meet technical sellers: the supply zone
  • The more hands you play, the quicker you'll figure things out
  • He'll only be 6'2" if he puts on his wife's 4" heels -- be realistic
  • Figure out what not to do
  • How do you mentally stay afloat? Turn off your P&L
  • The more emotional you are about a trade, the more you'll mess it up
  • Don't walk away from the table when you're dealt pocket aces
  • Trade the set-up, not your P&L
  • Can't take trading to heart, you have to have a sense of humor
  • The revenge trade does not work, ever
  • You can't cry your money back to you
  • A lot of traders can't accept defeat
  • Lose the battle, not the war
  • The market takes your money and your confidence
  • You don't lose your confidence, it gets transferred to another trader
  • Don't let things snowball, get a massage, go to a sauna, do something nice for yourself
  • Listens to Sade to get depressed which makes him angry which makes him a better trader
  • Makes his money as a swing trader in a trending market
  • Dumb money trades in the morning and smart money trades in the afternoon
  • Will keep a good runner overnight
  • Treat trading like a business, it isn't fun
  • You don't serve filet mignon on a paper plate
  • Mayer Hoffman, Jason Lieber -- they'd tell you if you were trading like a putz
  • Hoffman taught him there's no such thing as overbought
  • "Whatever goes down, should go lower"
  • Price action dictates everything, opinions don't matter
  • Don't fight price action
  • Turn off social media, read good blogs instead, old vets
  • Every trader he knows has blown out, including Mayer
  • He never sells dreams, only reality
  • Don't think you're alone, keep your head up
  • "The rich people don't live in Times Square"
  • Twitter: @DanShep55

The Times Ain't Forgotten

Added on by C. Maoxian.

No good live version on YouTube so I'm forced to embed this ... Jason Isbell's album The Nashville Sound has several tracks that I like, which is remarkable. I'll feature the others in time. This song was written shortly after the booboisie elected T___p. 

Notes for Chat with Traders, Episode 157

Added on by C. Maoxian.

Repeat guest, formerly featured in Episode 119

Episode 157 ... Alex @TAGRtrades (62:23)

  • Wife takes care of their new baby (four months old)
  • Hasn't had a full night of sleep in four months
  • Child care $30K a year so doesn't make sense for wife not to stay at home [only in 'murika]
  • December 2017 his best month to date
  • Bitcoin / Blockchain mania at end of year 2017, he was able to catch that
  • MARA, DPW, RIOT his main plays ... sympathy plays
  • He would buy the one that was still red when the other two turned green
  • Lots of liquidity, easy to trade size since exits so easy
  • June 2018 will be five years of trading full time
  • Have to know what are the leaders and laggards in a sector
  • He knew when to back off, take the foot off the pedal, this time around
  • When friends and family contact you for advice, it shows the end is near
  • One or two days a month was where he made the bulk of his gains
  • Equity curve looks pretty when stretched out, but if you zoom in it looks choppier
  • Compounding is the key
  • Only one day this year with zero trades, but quite a few with only one or two trades
  • Stocks that he trades are low float, under $10 ... lots of liquidity issues
  • Makes errors, then doesn't correct them, tries to wriggle out, problems snowball
  • Trying to be better about 1) market preparation; 2) holding longer; 3) getting bigger 
  • In order to get bigger, you have to get better [great saying]
  • Liquidity issues are huge when your account size gets bigger
  • Lives in central time zone, market opens at 8:30 AM
  • Starts looking at market about 90 minutes before the open
  • Develops watch list night before -- stocks to watch
  • Puts 12 charts on the screens at once
  • Looks at daily charts for support / resistance levels
  • Following the right people on Twitter is important for getting news
  • Pays for two news services, squawk boxes (TradeXchange, Benzinga Pro); worth the money
  • He's in favor of journaling, but doesn't do it as much as he used to
  • He's not a big spender, seeing himself down $2-3K in a trade still painful
  • When he has a big day, he doesn't celebrate
  • Still risks same percentage per trade (max 2-3% loss) as in the past
  • Has no confidence in his swing trading ability yet
  • People say he's just a long-biased trader in a giant bull market (to put him down I guess?)
  • Now he's 85% on the long side, 15% short side
  • Short trades are 1/20th the size of his long trades
  • Never adds to his short trades, takes one shot
  • Watches top ten most volume names closely
  • Uses finviz.com to scan ... under $10 stocks, trading 2.5x average daily volume (whatever the default is)
  • Great charts don't matter if the volume isn't there
  • Looks closely at all the charts (20-30) from scan above
  • Low float, hot sector, high short interest, good chart setups
  • Knows top five and bottom five from his list
  • Always starts with the daily chart, only looks back 20 days for high / low resistance
  • Then looks at the hourly chart for support / resistance
  • Uses 3 minute chart to enter trades
  • Looks for flag and pennant patterns after a breakout
  • Uses VWAP on every single chart, but doesn't overanalyze it
  • VWAP gives you a quick basis of where the average person stands
  • Adds 200- and 50-day moving average to charts as target levels (since other people look at those levels)
  • No longer scales into trades, he just goes all in now, max risk from single entry, one shot
  • Quickly takes profits on a piece, then slowly scales out the rest (1/5th his size left at final target, e.g. 200-day MA)
  • Self-discipline all important, be flexible, make adjustments
  • New traders see one mold, try it, it doesn't fit them, they give up or lose a lot
  • Be flexible instead, find what fits you
  • Twitter: @TAGRtrades

Won't You Help Me Share My Load

Added on by C. Maoxian.

No good live version so I'm forced to embed this. Another case where the cover is better than the original ... Raul has a nicer voice than Van's:

Great Videos from Linda Raschke

Added on by C. Maoxian.

Linda Raschke did this series of videos for Futures Magazine back in 2013 and every one of them is pure gold. (Great story in the final segment about Linda's cat making some amazing hotkey trades.) 

Bonus ... I found another good one (of course good traders are made not born, but I believe it does help to be born with a certain temperament):

Double bonus ... so much gold in the following three short videos, every word is precious ... if you don't get it, listen over and over and over until you do: