Notes for Chat with Traders, Episode 71

Added on by C. Maoxian.

Episode 71 ... Eric Scott Hunsader (61:57)

  • Started programming in 1984
  • Programming then not offered in college, so he taught himself
  • Bought a book, C Primer Plus by Stephen Prata
  • Had written an oscillator in Lotus 1-2-3 spreadsheet 
  • Still uses C to this day
  • Used to read the Wall Street Journal, fascinated by that world
  • Traded for two and half years, made enough to live and buy more computers
  • Developed a love for writing software
  • Would always second-guess his trading system
  • Focused on writing code and quit trading
  • Used to use floppy disc to archive data
  • Sold that data online (long before the Internet)
  • 1989, Tom Joseph's [of Advanced GET fame] company called Trading Techniques was a data customer, hired Hunsader
  • Had real-time streaming charts using Compaq computer and a cellphone modem brick
  • CQG bought Trading Techniques and Hunsader worked for them
  • Three years later the Internet came along
  • Internet Revolution was obvious to him 
  • CQG cold to Hunsader's idea of internet-based real-time streaming charting application
  • Hunsader left and did it himself, wrote Java application called Livecharts, and desktop application called Qcharts
  • saw Hunsader's programs and gave him a bunch of stock for the software
  • Within 18 months to two years went from 0 to 10,000 customers [and I was one of them!]
  • Lycos wanted to buy out
  • Hunsader got Lycos stock in the buyout and he sold it all out in two weeks in December 1999 [great timing]
  • Then he founded Nanex in 2000
  • Wanted to design the ideal ticker plant, originally called it "Generation Five," with API on top of it
  • 25,000 hours later he was comfortable releasing it to first customer in 2004, called NxCore feed
  • Data Transmission Network (DTN) his partner then and still is
  • No advertising for his NxCore feed
  • Customers are hedge funds, institutional investors, high frequency traders, even the exchanges themselves
  • Working with the NxCore API is a joy 
  • An experienced programmer can quickly learn to get exactly what he wants from the NxCore feed
  • Other data feed providers normalize the data, NxCore doesn't
  • Data compression, data transmission and graphical interface all the important bits
  • "Serial latency cost" 
  • NxCore collects 20 billion data points per day, a petabyte raw
  • 1000 terabytes is a petabyte
  • Data is stored in triplicate in different locations
  • ARCA first place where he noticed penny up and down step patterns, someone testing something
  • Flash Crash the big event: May 6, 2010 ... SIP got crushed that afternoon
  • SEC couldn't even assemble the data to analyze the Flash Crash
  • Nanex could replay the entire day in real-time given their archived data
  • Analyzed the Flash Crash ... went down a rabbit hole from which he still hasn't emerged
  • ZeroHedge linked to the first analysis they posted about Flash Crash, then it all exploded
  • SIP (Security Information Processor) -- consolidated feed, should be the only feed but exchanges sell direct data feeds independently [the bastards]
  • US stock market has two data feeds, one is faster than the other
  • Reg NMS (PDF) brought high frequency trading into being
  • "Electronic trading brought down costs, high frequency trading brought down ethics"
  • High frequency trading is risk-free arbitrage, only possible since the exchanges sell direct data feeds
  • Exchanges collude with HFT by selling them direct data feed, which is faster
  • HFT has a wink-nod relationship with regulators, fined from time to time, no real change happens
  • HFT would be shut down if the regulators had any ethics
  • If there were a central limit order book, HFT wouldn't exist
  • Regulators wanted competition, multiple exchanges, tie it all together with SIP
  • HFT can front-run orders on one exchange and cancel their orders on another exchange given their faster feeds
  • When you talk about spreads, do you mean the spreads narrowest in a second or widest in a second? Can go from 1% to 1 cent in the space of second
  • "Quote-stuffing" is a term Hunsader coined ... Quote-spam
  • You slow down a data feed by quote-stuffing it ... more network traffic, like a tiny DDOS
  • Retail customers all working off the SIP ... HFT ahead of them
  • All about creating latency through quote-stuffing
  • Put noise into the system in order to slow it down
  • Must maintain latency tables ... must ping and test the limits all the time
  • HFT is theft and market-rigging ... visit the Nanex office for two hours and watch them at work in real-time
  • Everyone is a victim of HFT ... a billion paper cuts
  • You see things now, you think it's a bad tick, but it's actually 1000 trades going off, pennying down and back up in a half second
  • SEC says people shouldn't use stop orders anymore
  • Any retail investor who trades at the open is eaten alive
  • The regulators are corrupt, they get wined and dined by the firms they're going to work for when they leave the regulator
  • SEC gave Hunsader a $750,000 whistleblower award
  • The exchanges are the real culprits for selling a faster data feed for huge prices to HFT
  • Larry Leibowitz (brother of comedian Jon Stewart) is CTO at the NYSE
  • Leibowitz made fun of Hunsader as a conpiracy theorist on stage
  • Bill O'Brien has also argued with Hunsader; O'Brien a smooth talker on TV but just a soundbite bullshit artist, has no facts 
  • Exchanges are SROs (self-regulated organizations) ... means they can't be sued
  • Legal immunity exchanges enjoy has really destroyed things, the root of the problem
  • You need someone knowledgeable and with integrity at the SEC, then HFT will go away
  • Sarao being singled out like that [for the Flash Crash] is terrible
  • Hunsader offered to work at SEC for free, won't create any new rules -- offer met with dead silence
  • At least 500 trades within one second, spikes down and up, no net price change -- mini Flash Crashes happen all day long
  • Suckering people with these "poke plays" [as I call them] ... retail can't take advantage of these because they don't execute at all exchanges
  • These mini Flash Crashes never happened before 2007
  • Anyone with a standing stop order is going to get killed these days
  • Tight spreads being claimed by HFT are bogus given the constant mini Flash Crashes
  • People at IEX have integrity
  • All the exchanges' income comes from selling their faster data feeds to a select few
  • Twitter: @nanexllc

Tramps Like Us

Added on by C. Maoxian.

Terrible video and audio quality, but this cover of an already great song makes it that much greater. Love that outfit too. 

TV Shows Watched -- Frontier

Added on by C. Maoxian.

Another Netflix original series ... six 45-minute episodes so not too great a time commitment ... and it wasn't terrible. I'm not usually big on "period" pieces, but the fur trade / history of the Hudson's Bay Company does interest me. One episode did have a gay porn vibe with the half-naked hero hung by his bound hands and tortured ... not that I've ever seen gay porn, but that's what I've been told it's like, by a friend, a very distant friend. 

My screencaps with comments below: 

Notes for Chat with Traders, Episode 62

Added on by C. Maoxian.

Episode 62 ... @chigrl (41:02) [recorded May 2016]

  • International relations major, Middle East focus
  • Sold medical supplies, "medical grade plastics," hated it, was living in Newport Beach
  • Quit job, moved to Chicago [what year was this?]
  • Knocked on every possible door
  • Begged for first job at a boiler room, later shut down by NFA
  • Nobody wanted to hire a woman
  • Making 200 calls a day trying to get Mom and Pop to part with 10 grand to trade options [laughing]
  • Her Dad was a commodities trader
  • Wanted to learn the industry from the inside out
  • Went from working as broker to working on trading floor
  • Clerked for Fed Funds trader
  • Moved to grains floor, was head of trading desk, when Fed Funds went to zero
  • Then moved to bonds floor
  • First ticket she ever wrote she wrote backwards, ended up being a 30K winner
  • Left the floor in 2012, started trading for prop firm, got funded
  • Being a prop trader forces you not to do "stupid shit" ... someone is watching you
  • She is an intraday, technical trader, but also has fundamental knowledge of oil market
  • She has a system, makes the same trade over and over again
  • Your worst enemy is your own head
  • If you have a system where you always take the trade, can take your head out of the equation 
  • Rotation levels, Fibonacci, volume profile, footprint -- these are what she uses
  • Fell in love with oil market, has traded for ten years straight
  • Doesn't trade crude during Asia hours ... too illiquid, a 50 lot can move the market
  • Crude is a "manic" market ... trades fast 
  • She's a market junkie ... 120 hour work week in front of the screens
  • After ten years of trading, you can "go with your gut" ... but not at the beginning
  • Government websites, esp. EIA, full of good information
  • Follow her Twitter stream since she tweets all the best information
  • [She has a smoker's laugh ... wonder if she smokes?]
  • Supply-demand drives the oil market, it's simple
  • Day traders trade what's in front of them, not the macro view
  • Twitter is invaluable, there are experienced traders on there, only dicks don't reply to your questions
  • Start with a mini contract
  • Have to find a system that works for you
  • Don't be afraid to lose money in the beginning
  • Successful traders don't care if you have two followers, they'll answer your questions
  • Key skill good traders have: patience, they wait for the market to come to them, they don't overtrade
  • She has a swing trading account and a day trading account, separately
  • Twitter: @chigrl

Dirty Dozen, Long Only Portfolio, End of September 2017

Added on by C. Maoxian.

One change this month, getting long Amgen (AMGN) tomorrow (Oct. 2). Why sell it at $139 last November only to buy back at $186 this October? Good question ... and the reason why buy and hold (and forget about it) is so compelling. But look at the exits on Chipotle and Gilead and Starbucks and Twitter ... I don't always get it so wrong. 

20170930 dirty dozen.jpg

Movies Watched -- Hell or High Water

Added on by C. Maoxian.

102 minute running time. [SPOILERS]

Inexplicably has a 96% Fresh rating from "Top Critics" at Rotten Tomatoes, which caused me to borrow it from the local Redbox, to my chagrin. Mumble, mumble, couldn't understand half the dialogue and for some reason the subtitles were disabled on my disc.

Has a weird No Country For Old Men copycat vibe (that was a *great* movie), but it just doesn't work. Jeff Bridges plays Tommy Lee Jones, but he's mumbling worse than ever, even worse than his Texas Marshal role in True Grit. He has a half-Mexican, half-Injun partner whom he insults endlessly ... don't worry, the "half-breed" has his head blown off in the end.

Two scrawny brothers ... old Ma dies with family ranch in hock to EVIL banksters and back taxes ... one brother recently released after a ten year stretch in jail (though not for killin' his Pa) ... non-felon brother gets the bright idea to start robbin' banks across west Texas to pay off them EVIL banksters and the gubmint, and dumb criminal brother is game.

Scenes of these desolate, shitty towns and FAST CASH billboards (hint hint) ... oh, and the movie starts off with graffiti on the side of a house that says, "Three tours in I-raq but no bailout for folks like me," or something along those lines. Ya know, subtle.

Badly done poker scene where criminal brother splashes the pot with a bet -- I winced. And you can't exchange more than X dollars at the casino without having your tax ID attached to it. 

They keep burying cars that are worth more than the bank drawer cash they're stealin', but I guess they're stolen cars. Old Jeff Bridges mumbling and stumbling after them across the vast expanse of west Texas. Jeff will forever be The Dude, he isn't going to shake that no matter how much he mumbles and stumbles. 

Surly ex-wife of the non-felon brother, ya know, once a purty girl but run-down by her shitty life ... it isn't clear what he's done to earn such derision from his ex- and boys (one, a fatty with glasses, only get a glimpse of him at the end) ... maybe it was explained and I didn't hear it (possible), but I doubt it.  Did I mention that this brother is a dead ringer for Josh Brolin's kid brother? 

Dumbest part of all is there's Crude Earl or Natty under the ranch, and old Ma could've leased it to Chevron decades ago and been pumpin' out $50,000 worth every month since then ... but nah, scrawny cows were the way to go. And the boys couldn't have done the lease at any time before her death, just cuz. 

Ends with Bridges and Brolin's little brother exchanging mumbled threats across a bare lawn, pfffffft. Only saving grace here is the movie stopped short of the sacred 100 minute mark.

Ah, I see now that the kid who wrote it also did Sicario, which I didn't like either

There were some funny bits, and some clever bits of dialogue in the little I could understand, but damn, this movie is NOT recommended. Let me go find some critics who agree and paste their stuff below ... only able to find ONE! Crazy, what a bunch of hacks. 

Peter Sobczynski: "it's somewhat less than the sum of its parts ... [the writer] appears to have elected to raid the Cormac McCarthy playbook in order to employ the celebrated author’s sparse and laconic tone wherever possible ...  it tries so hard to emulate the likes of 'No Country for Old Men' at times that you can feel it practically straining from the effort without quite pulling it off" ... and the key paragraph in its entirety, with which I agree:

"It’s frustrating that 'Hell or High Water' contains so many good things that just don’t coalesce into a fully satisfying moviegoing experience [He means movie but needed more syllables]. The story as a whole is a little too derivative for its own good and not even the strong elements are quite able to compensate for that. Of course, seeing as how even vaguely competent films have been so few and far between as of late, some viewers may be a little more willing to overlook its flaws—to wildly paraphrase one of the key lines from 'No Country for Old Men,' 'If it ain’t a good movie, it’ll do till the good movie gets here.' [SAD] If only it had spent a little more time trying to find its own voice and a little less overtly trying to ape the styles of its influences, 'Hell or High Water' might have been as good of a movie as it wishes it was."

Notes for Chat with Traders, Episode 63

Added on by C. Maoxian.

Episode 63 ... Nicola Duke (44:00)

  • Has a posh? British accent [I'm no judge of accents]
  • Mom gave her money when in her teens and she bought stocks
  • Joined the Royal Air Force
  • Later worked as air traffic controller at Heathrow
  • Chemical Bank did experiment training air traffic controllers as traders, before her time
  • Working in Toronto, running a company
  • Boyfriend gave her a copy of Victor Sperandeo's book, she thought, "I can do this"
  • Trading FX from Toronto, not getting much sleep
  • Sold company and went full time trading FX
  • Air traffic controllers feel they're always minutes away from disaster
  • Trading is similar, you're often uncomfortable
  • Must learn to be comfortable with being uncomfortable
  • Joined a live trading room, learned a lot
  • Doesn't believe people should trade alone, should at least have a mentor
  • Blew out first account ($10,000) within a month after being "the queen of paper trading"
  • Got a mentor who helped her with discipline
  • Got through her first year flat, mentor said "this proves that you can make it"
  • Bad days where you stick to your rules are good days -- treat yourself!
  • Mentor was friend of Tom Dante's ... met in a forum
  • Mentor taught her how to take emotion out when you win or lose
  • She's an introvert, doesn't like shouting
  • Mentor never gave her a single trade idea or set-up ... just worked on her mental game
  • In Toronto she would trade London open (2 AM her time), no social life for two years
  • Trading knocks keep you from getting full of yourself
  • 2008 lots of money to be made, went full time
  • Got lucky to sell her travel? business before the crash
  • Swing trader using Fibonacci levels for entries / exits
  • Uses Heiken-Ashi charts and moving averages as triggers
  • Looks at 36 markets every day
  • Scans weekly and daily charts
  • Average trade lasts a couple of days in 2016
  • In 2015 she would hold trades for two or three weeks
  • Volatile markets hard to trade as a discretionary trader -- too much emotion
  • Rules-based triggers, targets, stop adjustment ... all systematic now, no discretion
  • Won't move a stop until price has made a new high or low
  • Looks at closing prices only, close below a 50-period MA would instantly get her out
  • Has lots of "time of day" rules
  • Don't spend mental capital in an "offside position" for too long, use a time stop
  • Don't be patient with losers -- they don't just cost money, but "mental capital"
  • Only risks 3% of her capital at any one time
  • Avoids news events 
  • Looks at monthly, weekly, daily charts
  • Finds entries on intraday chart
  • Planning is everything
  • Looks at Fibonacci patterns, measured moves ... marks all the levels on the chart
  • Levels of confluence, high probability of reversal (or support)
  • People who can make a plan and stick to it can be good traders
  • Trading is really hard work, not a hobby, don't treat it that way
  • She is not competitive, you're only accountable to yourself, be better than you were yesterday
  • Compete with yourself, cooperate with others
  • When she sees squeezes, she feels that "us versus them" thing, but fleetingly
  • People fail because they can't lose money well -- it's all about mindset 
  • Trading is the hardest simple thing to do
  • Everyone she follows or re-tweets on Twitter is awesome
  • She uses:
  1. CQG for charts (expensive, over GBP1000 a month),
  2. TTX Trader to execute,
  3. started off on MetaTrader 4

No More Yellow Clover

Added on by C. Maoxian.

Completely unintelligible lyrics but I dig the sound ... I heard Kacy & Clayton interviewed, they come across like nitwit inbreds from backwoods Canada, but I love that retro-folk sound. 

Notes for Chat with Traders, Episode 29

Added on by C. Maoxian.

Episode 29 ... Brian Shannon (63:13)

  • As a kid, watched Wall Street Week with his doctor Dad on Friday nights
  • Made money as a kid from caddying and delivering newspapers
  • First stock he ever bought was LoJack, made $6,000, hooked him for life, "why work?"
  • Grew up in Massachusetts?
  • First job after college as a stockbroker
  • Passed Series 7, realized job was glorified telemarketer
  • Went to Lehman Brothers next and learned how to sell
  • Learned how markets worked using other people's money
  • Read the Cabot Market Letter, idea was buying above levels of resistance
  • Read Investors Business Daily, saw prop firm ad that offered 20:1 leverage
  • Made $25,000 deposit with this prop firm
  • Excited with his 48K baud modem trading from his home's basement for the firm
  • Opened office for this NYC-based prop firm in Denver
  • Prop firm made money from commissions
  • People are their own worst enemies in the market
  • Still astounded by dumb decisions he makes even today
  • Chantal Pharmaceuticals, miracle skin cream, stock got halted after hit piece in Barron's
  • Lost $8-$12K overnight in Chantal Pharma ... one lesson he learned along the way, position with too much size
  • In 2000, 2001 market was getting crushed and he was losing pretty consistently, thought about quitting
  • Slowed things down, reduced size dramatically, ground his way back
  • His first six or seven months, he was profitable every month, then he got cocky
  • Trading is an evolution, you always come back to the basic principles
  • "Only price pays. Follow the trend" -- these are his catchphrases
  • Hold yourself accountable, don't blame other things, only yourself
  • Uses multiple time frames
  • Swing trading his preferred time frame
  • Looks at direction of 50-day moving average: uptrend or downtrend
  • Looks for volatility contraction, diminished volume, pullbacks to "support" on daily chart
  • Drops to 30-minute chart next, looks at 5-day moving average on 30-min chart
  • Distance from entry to his initial protective stop, distance to perceived targets measured -- figures his risk : reward
  • Drops to 10-minute chart, looks for an entry that makes sense given all of the above analysis
  • Don't gamble on earnings plays
  • Accountants lie, CEOs lie, only price pays
  • Ego and the need to be right clouds your judgment
  • Fan of using Volume Weighted Average Price -- VWAP -- esp. since some specific event (e.g., the IPO date)
  • Been looking at VWAP for 12 or 13 years
  • Stumbled across VWAP, it spoke to him ... now becoming more widely used by retail traders
  • Stan Weinstein's book, Secrets For Profiting in Bull and Bear Markets, had a huge influence on him
  • "If they don't scare you out, they'll wear you out"
  • Traders tend to be ADD looking for action
  • Time frame must suit your personality ... how much time, capital, and experience do you have?
  • Never start off by day trading, that's something you evolve to, or devolve to [chuckling]
  • Start off with a longer term horizon, like swing trading
  • Swing traders should make more money than day traders
  • Trading is extremely difficult ... anyone who says it's easy is lying ... misleading you for nefarious reasons
  • You need a lot of capital to start
  • People get impatient, make big mistakes before they learn who they are
  • First master yourself (understand yourself and which time frame suits you)
  • Brian says some nice things to Aaron in parting ... Aaron not as polished in these early episodes
  • His book: Technical Analysis Using Multiple Timeframes
  • Twitter: @alphatrends

Notes for Chat with Traders, Episode 66

Added on by C. Maoxian.

Episode 66 ... Dan Shapiro (66:25)

  • Return guest (Episode 32)
  • First started looking at charts in 2003
  • Fast talker, native New Yorker? ... sounds remarkably like Joe Fahmy
  • Looks at 60 minute charts exclusively
  • Social media the best and worst thing for new traders
  • Most new day traders obsess over the one minute chart
  • Uneducated, underfunded, no-process bungee jumpers are down on the one minute chart
  • "Barry Sanders Effect" -- getting stopped for two yards twenty times a day -->
  • Instead you should wait for a hole to open up, run 60 yards
  • Most stocks are not tradable
  • Get rid of the social media noise
  • He's "not the sharpest tool in the shed" [sounds pretty sharp to me]
  • He's been trading since 1999, has a lot of screen time
  • Netflix and Tesla his two favorite stocks
  • Hasn't updated his eSignal in at least a decade
  • His charts are covered with squiggly lines: moving averages, Bollinger Bands, linear regression lines
  • You need to know where the bodies are buried (areas of supply)
  • Most traders don't know what they're being patient for 
  • [Likes to use football analogies]
  • Stocks go from supply to supply (areas of support / resistance)
  • FANG (Facebook, Apple, (Amazon?), Netflix, Google) names are market sensitive -- is Netflix weak when the market is strong? Why?
  • Don't win the day, win the intervals of the chart
  • Is the trade worth it? Distance from one zone to the next large enough?
  • FANG stocks have great range and volume ... tradable [i.e., Usual Suspects]
  • Six years ago started doing live webinars
  • Looks through 500 daily charts every night, finds things "coming out of a range"
  • Writes down six to ten ideas every day
  • He'd rather drink cyanide than trade the pre-market highs and lows lists
  • Everybody wants to drive that fast car, but new drivers should drive slowly
  • Newborn babies don't come out of the womb running
  • How many horror stories are there of people shorting a pre-market screamer ("Flying Pig") and busting out
  • Trading should be boring
  • Watching six candles a day (60 minute charts) forces you to be patient 
  • Doesn't want to be fighting a guy with a $2,000 account who is getting stopped out every two minutes
  • Traders have to be humble but also killers, willing to take food out of some other guy's kids' mouths
  • Don't turn a paper cut into a severed head
  • [He's a fun guy, fast talker, should be in sales, maybe he was, maybe he still is]
  • During monthly review, looks hardest at his losing days
  • "Don't trade like a putz" -- spot those days you were trading like a putz
  • "Ish happens" [instead of "shit happens" ... a Yiddish thing?]
  • Advice to new traders: don't be undercapitalized (and max risk should be 1% of account)
  • Trades only have three parts: process [method], tier size [risk management], result [trade management]
  • Don't risk $1000 to make $300
  • "Let me give you the reality"
  • Prop firms used to make so much money from commissions, they didn't care about how much risk people were taking
  • Only four or five major players left in the prop business ... it's dead
  • Game has completely changed -- no money left in commissions
  • The money isn't in commissions anymore, it's in "education" 
  • Prop firms won't give you any capital now, won't let you trade any more than 100 share lots
  • Offshore prop firms are bookies 
  • Avoiding "Pattern Day Trader" rule by going offshore to a "bookie" broker a bad idea
  • What's a good amount of money to start trading: A LOT
  • "You, my friend, are a commodity"
  • If you're doing millions of shares a month, you can negotiate a very low commission rate
  • "You are the rising star ... invest in youself."
  • Peter Luger doesn't serve his steaks on paper plates
  • You need screen time to learn what NOT to do, not what to do [yes, indeed]
  • Borrowed money from a loan shark to get his start [I'd like to hear more about this]
  • In 2003 he was at Spectrum Securities, bought out by Schonfeld Securities, met Dan Mirkin then
  • In 2003 he started using Trade-Ideas [should have Dan Mirkin on the show]
  • Trade-Ideas still cheap at $500 a month [it isn't that much]
  • He doesn't upgrade anything he uses, 2003 version of Trade-Ideas, ancient version of eSignal
  • Turned profitable after 2003, a coincidence with Trade-Ideas adoption?
  • Many years of desperate trial and error before he found success
  • Has no need to show off, hates the social media circus
  • You need to put in the time to learn how to trade ... people will doubt you and you will doubt yourself, but don't give up
  • "Some random avatar isn't a superstar, you are the superstar"
  • How does he have this level of energy? Lots of cocaine [he's a funny guy]
  • Twitter: danshep55

You Were Sweet To Offer Your Hand

Added on by C. Maoxian.

Lots of recordings of this great song, but I like Helen Merrill's version best (with Clifford Brown on trumpet). She comes closest to capturing the crazy ex-lover thing ... the sort of shriek at 1:30, amazing stuff. No hugs, I understand. 

Notes for Chat with Traders, Episode 11

Added on by C. Maoxian.

Episode 11 ... Zach Hurwitz (123:31)

  • 10 AM to Noon, no calls, no appointments for Zach
  • Tufts, class of 2008, transitioned from English major to Econ major
  • Started trading during a volatile time
  • 2008, 2009, 2010 ... algos began impacting the markets
  • Retail guys need both screen time and coding time
  • Lost all his initial trading stake in six weeks in 2008
  • Had a visceral connection with chart patterns
  • Two classes that helped him with trading: AP English and Drama
  • In 2010 introduced to quant trader, "David," randomly met 
  • Lives in Ohio, middle of nowhere, just got lucky meeting "David"
  • His analyst says "trust the process" [Zach goes to psychotherapy?]
  • [Zach tends to ramble on at length, but he's likable....]
  • David tip: some days you have to be the mouse (detail oriented), some days the eagle (visionary), some days the donkey (do grunt work)
  • No trader wants to admit he's a beginner
  • Non-traders think day trading is glamorous, but they're wrong
  • Trading is "quiet, lonely struggle ... and it's hard" [I like it]
  • Poisonous self-talk during dark hours of trading 
  • A trader is the boss, the employee and the janitor, all in one
  • Have to learn to identify when you are being ridiculous
  • You can't learn to trade if you can't spend 40 hours a week on it
  • Risk management, position sizing ... these can be learned
  • Trading psychology, controlling yourself, is the thing you can't really learn
  • Step one is being honest with yourself
  • A trading coach is not a cheerleader
  • We are in charge of deceiving ourselves
  • Spending 20 hours a day six days a week to make $40K (40% on 100K), you feel like a jerk
  • VWAP is his holy grail, the thing that made sense to him, would have quit in 2011 if he hadn't found it
  • Zach is 28 years old now
  • Zerohedge and Brian Shannon of Alphatrends turned him on to VWAP
  • VWAP was available on the ThinkOrSwim platform so he could explore it
  • VWAP -- Volume Weighted Average Price ... like the ultimate "moving average"
  • VWAP originally built to benchmark execution quality
  • All indicators are arbitrary
  • ["Let me go off on a little tangent here...."]
  • Chat with Traders podcast is a killer resource
  • It's easier to learn from watching a developing athlete, not a pro
  • Good traders like good athletes, they make it look easy
  • VWAP looks like a moving average and acts like a pivot
  • VWAP responsive in a morning, dull in middle of the day, then picks up again at end of day (because it's volume weighted :) )
  • VWAP gives you your bias for the day
  • ["Forgive me for the meandering and tangentials..."]
  • VWAP will lead you to trade the most liquid names
  • People who want to trade stocks "in play" should be slapped in the face [who, moi?]
  • Mentions Mitch Hedberg ... Zach sounds a bit like a non-stoned Mitch, no?
  • Most people fly around as an eagle, spend a minute as a mouse, and never get around to being the donkey
  • VWAP best for intraday, mega-cap traders
  • Zach is now a systematic trade, no longer discretionary
  • Trading is lonely and difficult, it's invaluable to have a trading comrade
  • ["I'll turn this into a four hour podcast!"]
  • Not much good, free VWAP information out there ... not many people using it every day
  • Brian Shannon is excellent, a wonderful educator, and a nice guy
  • Zach uses ThinkOrSwim, likes it, but is not paid for referrals ... just use the demo account
  • Your family and friends will think you are just playing video games, but day trading is incredibly hard, needs to be respected
  • "You're clicking buttons just like every other schmo out there"
  • Most people don't pay attention -- they don't pay attention to others, themselves or the market
  • Give up on your unrealistic dreams of the Bugatti ... focus on your realistic dreams
  • Stop worrying about where you enter a trade, just get in if you think it's going higher
  • He uses shorter term 14 period RSI in conjunction with VWAP, but only for confirmation
  • You want a consistent approach
  • You want to take what you know works, and have it put into code
  • finviz dot com has a good filter ... start there
  • ThinkOrSwim has great beginning coding language
  • If an English major like him can learn to code, so can you
  • Ten years ago you'd have to know MatLab, not so today, barriers to entry have fallen
  • If you think everything is going to fall into your lap, you're going to blow up
  • Failing traders have not mastered even one thing, they bounce around
  • Trading is a predatory business ... you're a baby duckling and there are hawks out there
  • Find earnest, honest, real people to talk to about trading [I know of one or two on Twitter]
  • You don't want to be a jack of all trades, master of none
  • "If you want to be here for the good days, you have to be here for all the days" -- Ben Lichtenstein
  • Discretionary traders are all bald ... they drive themselves crazy
  • Recommends Reminiscences of a Stock Operator, all the Market Wizards books
  • "I'm not just trying to blow smoke up your skirt" [when singing Aaron's praises]
  • Make your eagle vision a reality by being the mouse and donkey
  • Are you life-changing rich by quadrupling your account? No, so stop trying to do that
  • Lower the stakes for yourself !
  • Nobody is your overseer as a trader ... you have to control yourself
  • More traders collapse mentally than financially
  • "You choose your tuition in the market" 
  • When you don't feel bad about losing trades, you've won
  • Don't make it harder on yourself than it has to be
  • ["Thank you for indulging my meandering ... babbling for two hours"]
  • Twitter: @ZachHurwitz

Take a Dive Off River Street

Added on by C. Maoxian.

I'm a sucker for this kind of harmonizing, but these pretty white brothers have a great sound ... a dark song for sure, but only if you listen to the lyrics: