Episode 105 ... Alex AT09_Trader (58:11)

Recorded November 16, 2016 [date for context on shipping stocks discussion]
First saw DRYS when it went from $8 to $16
Did not have borrow on DRYS so didn't "get balls squeezed"
Low float stock with SSR (Short Sale Restriction), no selling pressure
Traded sympathy plays TOPS SINO
Forced to cover SINO (2.8MM float), could have blown out on that one alone
Garbage companies looking to raise money
Shorts get trapped, causes "float rotation"
Terrified to buy because fliers get halted
Lost $40K in EGLE, 35,000 shares with $7s average, could have lost a lot more if didn't get out
Dad came from Turkey to US in 1980s, entrepreneur at heart, hard worker
Dad made a lot of money in the electronics business
Dad put his money in the stock market, blue chips
2008, Alex was 15 or 16, Dad's business fell apart, no more money
Sold car's wheels for $2000, put money in TD or eTrade account
Found a penny stock guru
Lost all his money following guru
Got a job at Starbucks, tried stock market again with meager savings
Joined a new chatroom where he learned about shorting, "lightbulb went on"
Put money in offshore broker, 6x intraday leverage, avoid pattern day trader rule, prayed it wasn't a scam
Shorted VGGL from $4 to $3.50, felt euphoric
Shorting became everything to him
Blew up small account five or six times, shorting indiscriminately
Shorting trash stocks worked, evolved to shorting sympathy plays
Sympathy plays you can find the borrow and it's cheaper
Thinks Pattern Day Trader rule is stupid
Girlfriend broke up with him, allowed him to save money, obsessed about market instead of her
22 years old, been trading for three years (in Feb. 2017)
He's addicted to trading, on his mind 24-7, constantly planning his trades
Doesn't sleep much at night
Checks pre-market gappers
Closely watches pre-market movers
Writes down a plan for the day
Figures out support and resistance for each stock he plans to trade
Puts orders in above, hopes for spikes up at open [sounds risky]
By nature incredibly stubborn
Struggles to cut losses fast, would be a millionaire already if he didn't stubbornly hold losers
Tried using stop losses, but always gets stopped out at the top
Now stops out half, and re-adds if it reverses
Never sets pre-determined amount he's willing to lose
Doesn't look at his P&L in real time
Loves taking risks in any situation
Adds to losers "where it makes sense"
Don't cloud your judgment by saying you suck, you're an idiot
Have to be able to re-enter quickly despite the loss you just took
Now with his big account, he can throw out feelers into parabolics and add on the way down
Grew $5000 account through consistent days, slowly but surely, showed up day after day
Now he tries to find perfect opportunities, tries not to trade every day
Some chat rooms have 1,000 person base ... whatever they buy, it instantly goes back down
Ideal set-up is sympathy play, trapped shorts, causes parabolic rise, when main play reverses, hit sympathy play as hard as he can (10,000-50,000 shares), hold for several days, or as long as possible
Toxic companies need to raise money
Bleeding doesn't stop in one day ... wait a few days, be patient for the "hard money"
After a day or two, people move on to the next stock du jour, forgotten stock sells down down down
Uses VWAP as his tell for reversal
Ebola and forklifts both gave good sympathy plays
Uses Twitter to pick up on what people are talking about
He's 99% short, 1% long
Sometimes he gets long when his short position doesn't work out, reverses himself, but that's rare
His friends have no idea how much money he makes
22 years old is the time to take risks, no bills, no mortgage, lives with his Dad
Doesn't spend much money except for going out on the weekends
Doesn't want to show off
Open book about his numbers with any fellow trader because they'll understand
Bought foreclosure house to flip
Contractor nickel and dimed him, crooked guys, other annoyances, but not super difficult
Missed trading during the house renovation project
Low-float plays came back just after his house sale
Need a good, trustrworthy honest team to do real estate, can't get screwed at every turn
Learned you don't need nice kitchen appliances or countertops in a crappy neighborhood
Learned you can't go super-cheap on the bathrooms
Grow your small account by trading your single set-up consistently
Little things add up and it happens faster than you'd imagine
www.investorsunderground.com/AT09/
Twitter: AT09_Trader