Successful trading requires treating it as a disciplined business process rather than an emotional pursuit, where traders must understand their own psychology, recognize that losses are normal parts of the journey, and focus on consistent execution of a proven strategy rather than chasing quick profits or being influenced by social media hype.
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Um, you know, we all traded together. It was it was pretty awesome. And like I told uh the the Luci interviews um you know, I was a byproduct of the internet craze. And um you know, at first it was it was great. Uh but the reality is nobody knew how to trade back then. Uh we were all products of uh the the you know, the sidewalks that were paid with gold. Uh all we did was buy dips. uh after three days of uh buying and um you know stocks would gap up 20 30 points and uh that was for about a year and a half and then the reality struck that it was just more to that because uh after 9/11 everything changed uh and I said it before and uh you know I'm not ashamed of it uh you know I did very well during the dotcom era but then 2001 rolled in 911 rolled in uh I had an office of generic trading uh with when NASDAQ was at 5,000 and when the planes hit the building. My business completely fell apart. I lost a lot of my own money and it took me basically about two two and a half years to figure out what trading was. And uh I didn't make money for two years and that's the reality. Uh I didn't make any money for two years. And the one conversation um you never want to have with your spouse and I'm sure a lot of your uh listeners will really appreciate this. you know, um, you know, that conversation, well, you know, Dan, you may mean you did it all right. You know, you did it right during the internet craze, it's 2 years later, you haven't taken home a single, uh, check, it's time to do something else for a living. You know what I'm saying? And when you're a trader and you hear that and you had um, some pretty decent success, the last thing you want to have is that conversation because reality really kicks in. I mean, the reality really kicks in. And bad enough during that time, I was incredibly depressed.
Uh the best parts of my uh um you know days and nights were going to sleep. I used to literally certain nights just just saw myself to sleep because I couldn't believe how much how fast I completely crumble down to the earth and had no control of of trading because there was no path to profitability.
There was nothing. There was no guidelines. There was no blueprint.
There was nobody there to help me because everybody was in the same shoes as me because everybody was again the products of the dot era. And again, when people ask me about how great those days were, yeah, they were great. But you know, I you know was great also when I was 16. I'm not 16 anymore. I'm 41. And you know, as much as I like to reminisce when I was 16, as much as I like to reminisce when during the dot era, the reality is it's a completely different market right now. And the greatest thing about um the dot era um those two years that I didn't make money, it really made me appreciate what happens when you actually go on a good run. So when I finally started making money once again roughly around 200 in the middle of 2003 towards the end of 2003 once I started making money again consecutively that's when I really really appreciated what I went through and a lot of the new traders I'm sure a lot of you new listeners are are are going through the same thing and I always tell you know I always tell you know the people in my live webinar every single day there's no difference between me and you there's absolely absolutely no difference. Um, trading is a byproduct of your process.
I don't care who you are. You could trade uh credit swaps, you can trade derivatives, you can trade bonds, e- minis, whatever you want to trade, okay?
You are a product of your process. And there's nothing the market can do to you that you can't do to yourself. So, once I started really figuring things out, it kind of clicked for me there. And uh trading for me in my opinion uh it you don't need to go back to the drawing board uh every single time uh it's more about tweaking. It's more about recognizing what you are doing wrong and just completely stopping it. I know for a lot of people they're so emotionally attached to trading. Uh and that's a whole different you know that's a whole different story. uh they're so emotionally attached to trading, they can't see what they're doing wrong because they're so um they're so absorbed by what they're seeing on social media, how fantastic it is.
People are on vacation trading off their eye watches, [laughter] trading under a pool. I mean, who knows what they're trading. And the the sad part is uh there are a lot of really great people out there that will show you things, but you know, you have to let go of all your bad habits. And that's, you know, pretty much the first stop for kind of cutting yourself off, you know, cold turkey and starting to the road, you know, to prosperity.
>> All right, that's excellent. So, what we'll do is since you've recently done a few interviews with uh the guys at Sangluchcci, I'll link to those in the show notes. So, if you want um sort of a deeper insight to Dan's journey um sort of from day one to to current times, um you can check those out. So, they'll be in the show notes at chatwithtraders.com/32.
Um, definitely check those out. They're awesome interviews. But, um, I'm I'm really keen to sort of not recycle old information and get into some sort of the the meat of this interview and um get into some some actionable advice.
So, let's let's not brush over those few years which you you talked about how you just lost money. So, you were day trading. you were showing up every day to to trade and for two years straight you just lost money.
What motivated you to keep going and why did you keep going and not quit to go find something?
>> See See, here's Yeah. See, here here's the deal. Here's the deal. Once you taste cuz you keep this in mind, okay, I grew up very very poor, okay? I grew up in the Brighton Beach section of Brooklyn and you know it is a predominantly uh middle to lower class um people.
That's the reality. And my mom was a manicurist. My dad was a waiter. My dad eventually left my mom. My mom was on on welfare. So I I grew up very very poor.
Incredibly poor. All my friends grew up incredibly poor. And the one thing that I never wanted was to be rich. I just wanted to be have enough money so I can eat. That's it. So when you go back to those two years and I caught my first bit of pretty decent amount of money during, you know, during the heyday, it was discouraging that I couldn't figure out how to get back to there. So it wasn't more of it wasn't much of motivation. It was more of I didn't have any other options. You know what I mean?
I didn't have any other options cuz I couldn't quit a business that I've tasted a very good amount of success in a such a very very short period of time for that year, you know, year and a half run. And that's all it was. I mean, for a lot of people listening, you know, listening, you know, do wasn't 10 year run. It was it was it was 15 months.
That's all it was. It was 15 months of of the greatest euphoric. I mean, people look at it now and see, you know, like it goes from, you know, 5 to 18. They're like, "Oh my god." you when you you have 25 ITKs a day, you know what I mean?
They're all giving up ranges of $15$20 a day. Um, so it was more of desperation, man. I was hanging on for deal. I had no I had no I had no plan B. So I, you know, my plan B was was killing myself.
I mean, that was my plan B. I mean, I mean, just to keep real talk, that was plan B. You know, this didn't succeed, I was going to take myself out. And uh that's where the emotional, you know, the emotional hate started coming out of me. And I and I really uh took this business for what it is. It's not this euphoric love fest that everybody uh thinks they, you know, thinks they're in love with. It's it's a it's it's torture. Uh every single day to this day, there's vomit coming out of my mouth. And these are on good days because there's always something that agitates me about trading. And when you finally come to the realization that trading is nothing but a job, okay?
You're going to treat it like a job. And that's why there are no highs, there are no lows, it's work, okay? Um, whatever the market gives you is the market takes. Cuz I am a swing trader by nature. In the last two years, I haven't seen a run that go went straight up since, you know, since uh the bottom of 2009. So, this was all all new to us.
Okay? This is all new the last couple years. this whole unicorn effect, this whole QE, it's all new to us. So, we don't expect the market to keep going, going, going. So, at some point about a year and a half ago, I just stopped putting on positions. I I had two two positions on, three positions on, five, but I used to have, you know, 10, 12, 15 positions on all time. Rinse, repeat, rinse, repeat, rinse, repeat. So going back to kind of what my motivation was, it was a pure act of uh desperation because [clears throat] uh if I didn't succeed, you know, we probably would not be sitting here. And that's, you know, completely real talk.
I've I've, you know, I've um spoken to many traders that went through mentally and psychologically the same scars uh that I went through. Um and uh the most important part is uh to be strong enough to kind of wake up the next day. I mean that really is the strongest part about it because uh it's depressing man. It really is depressing when you go from uh when you go from highs to lows and you can't get back to that, you know, you can't get back to that top of that the heap again. Um I mean basically that was my motivation just uh if I if I couldn't figure it out, you know, me and you are not having this conversation today.
Yeah. Right. No, I appreciate you being so honest with that. So, what's uh how do I say this? So, so you were making money initially and then you went through a period of 2 years when you you lost money consecutively. What was it?
>> Yeah. What was it that changed so much?
>> Well, first of all, it was that it was that kind of uh wake up call by my wife and she's like, "Listen, you got to get a real job. Uh you know, we have bills.
Uh you know, you know, the bank account is depleting. Um, so you got to, you know, you got to get your your stuff together. And, uh, you know, one night I remember I just opened up my um, I forgot what system I was using before.
Was it Reuters or whatever the hell it was? And I just started looking at charts, just just thousands of thousands of charts. And I wanted to figure out what am I doing wrong? What am I not seeing? Where's the correlation? Where is the advantage? Where's my edge?
Where's the ability to find something and hone a process and absorb a process that can get me forget about to where it was 99 to get me where I can make $100.
Okay, take home that check $100. Cuz people ask me all the time, how do I make five grand a day? How do I make 10 grand a day? How do I make 20 grand a day? And my answer is always the same.
You have to figure out how to make $100 a day first. Okay. So my goal was figure out a process. Forget about the process.
Figure out in the charts. Okay, what is going to be there that I can make $100?
That's it. Where can I make $100 and we'll go from there? So, I started looking at a bunch of charts and I started back testing and back testing thousands and thousands of charts. And I noticed something back then which I which is ironically that I that I it's kind of the backbone of the whole #ps60 theory. I noticed that stocks and I didn't know I didn't use the word supply back then or or demand back there, but I noticed stocks used to trade in intervals. Okay? Just like uh just like climbing upstairs. So, you know, if you're going to go to the top of the Empire State Building, you're not going to jump from step one to step 15. You're going to go step one, step two, and you're going to stop, take a breath, right? Step three, step four, take a breath cuz you're tired. Step, you know, on and on and on and on. And I started looking at all these things that I heard people talking about moving average.
Well, what the hell is a moving average?
I used to buy do. If, you know, if Yahoo went from, you know, 260 to 220 in 3 days, I buy at 220. Henry Blahett would with would would upgrade it with Meil Lynch and this thing would be 250 the next day, 260 the next day. So, there was no such thing as technical analysis.
So, I started looking at all these things. So, what are these moving averages? What are they? What is this?
Why are people using these things? And I and I and I put it on my charts, which I never used before. Again, it was it was I mean, we looked at charts just to see the direction where a stock can go, but it was never an instance of well, you know, if the RSI goes to 90, it's over it's overbought. If the MACD cross I don't know what these things are. I still don't know to to this day what MACD and RSI are. I'm not that smart enough. Okay, if you if a stock is up 12 days in a row, I don't need to know that the RSI is at 95. The stock's up 12 days in a row. I can tell it's overbought. So back then it was more of let me figure out what these things mean. Okay? And what I started noticing were that stocks go and again I didn't use the word supply back then but I started noticing that stocks go from supply to supply which we use in modern day now and stocks go from demand to demand. And the only way they ever have a clear path to the goal line is if all these moving averages, all these supply zones, all these linear regression lines, all these Ballinger bands are out of the equation.
Other than that, they are all stocks that are trading within ranges. And people hear that all the time, stocks are trading within ranges. The problem is a lot of new traders are can't tell the difference between a stock trading in a macro range within a micro channel uh or a stock that's naturally organically coming out of a channel. And that's why you see a lot of stocks hit supply. You don't even realize it because again, nobody's ever explained that to you. Hit supply, get rejected, bam, bam, you're out of your money again. Again, you sit back and you sit to yourself, well, I'm the dark cloud.
Something, you know, the evil bug is on me. somebody is putting a voodoo doll on me. It's not that. It's just again, you know, majority of stocks, they don't, you know, they're not tradable. It's just the reality. Most of the stocks are not tradable. They're they all move, but they're not tradable. And uh the problem with uh most traders and and you know, and most and most traders tell me is number one, they have no patience.
Number two, when you're a young trader, and it doesn't mean your age, you have pretty much no bank. Let's be honest.
You know, when you have, you know, not everybody borrows money from lone sharks to trade, okay? So normally you don't have any money. Uh normally you don't have any pain tolerance. Normally you don't have any uh technical education.
What you see is you see is on social media which is you know 90% of it is all you know is all a gimmick. Let's be honest. Uh I mean I trade I'm trading 16 years. I've traded with with some of the most phenomenal traders out there. And I know when they're struggling when I'm struggling I see some some you know 22-year-old kid talking about he's hit the last 60 trades in the same market I'm trading for. It it's it's it's it's comical, but it's okay, you know, and it's okay. I wish everybody the best.
Um, but the ironic part of trading for me in the whole mental uh mental cycle was trying to really desperately figure out what everything meant. Okay? And uh I just went countless hours and then I figured out what the common denominator for stocks that were working uh and stocks weren't working. And um what I came to find was there was an arbitrage.
And that arbitrage uh turned out to be um supply that was confirmed years later by um uh by um um by a pivot, which I use now. Uh and it's confirmed on a 60-minute cycle, which has been kind of a godsend for me where we are present day. But uh yeah, man, that was I I don't even remember what the question was, but mentally but mentally, man, that was it. I mean that was u you know that was a kind of a big deal for me at that time out of pure desperation.
>> Yeah. Know that's that's an excellent answer. And just while we're on that subject and you were looking through these thousands of charts you know day after day what were you actually looking at? So, if someone's listening and, you know, they're, you know, not yet profitable, they're they're still losing money most, you know, let's just say months, um, you know, struggling to to find a way to exploit the market and they go through looking at all these charts, what sort of things can they look at on these charts to try and find some some common denominators that that might lead them to profitable trades or or help find an edge. Well, here here here's here's here's what here's kind of my my open-ended question, everybody.
Number one, and I talked about this on on my original interview with Pete uh Luchi. Number one, you have to figure out who the hell you are. That's number one. Okay? You can't be somebody else.
And that's why I I believe all these alert services are probably probably the worst thing that can that can really uh curb the progress of a new trader, okay?
because they're looking at social media and one guy is making everything look so phenomenal. So when they can't duplicate the results again, emotions kind of kick in. But you have to figure out who you are, okay? Do you want to be a swing trader? Do you want to be a scalper? Do you want to trade e- minis? Do you want to trade options? Uh do you want to trade um you know, pairs? You know, a lot of people trade pairs. They're very, very successful. Uh do you want to be a rebate trader? I know guys still to this day trade rebate. They still do very, very well.
um you know what do you want to be? I mean what do you want to be? And the the magic answer to that question is there's nothing on a chart, okay, on a specific chart that is going to jump off the page and say this is the right thing to do.
Okay, there's nothing. Everything is trial and error. So I can tell you, hey Aaron, look, here's what I look for, right? In a normal uptrending market, here's what I look for. I look for a stock that puts in an initial move, bases out for at least 5 days, and once it gets above that initial move, I buy the stock. Okay, fantastic, Dan. You've done everything what every other trader has done for the last 25 years. Okay, great. But here's the here's the problem. When you look at a chart, okay, you're looking at a very gray area. You look at it top of the range. You look at the bottom of the range in between.
There's a lot of moving parts. There's a lot of gray areas which I've discussed in in in Nausea. Um there's a lot of there's thousands of moving parts within uh a little, you know, a little a little bubble. Okay? And the problem is you can't just look at a chart and say to yourself, well, if the stock breaks 25 because that's the high for the, you know, for the last seven days, I'm going to buy it. Here's the problem. If you don't know, okay, where your supply zones are, there could be a supply zone right at $256.
Okay, stock hits that supply. And for for all you guys who are new listeners who have never heard me talk about supply and demand. [snorts] Um supply zones are let's just use it to the upside. Okay. Supply zones are where emotional buyers meet technical sellers.
Okay. And if you don't know that supply zone is there, you are going to get rejected 90% of the time and then the stock is going to fail and you're going to say to yourself, well, this doesn't work or again um you know the antichrist is in me. Uh there's a poltergeist in my room. something's wrong because everybody else is making money except for me. So, the very bare essence of a chart will never paint the picture.
Okay? Because again, there's so many different grenades within that chart, within that cycle, within that channel that you're looking at. If nobody's ever sat down with you and showed you what those things are, you will never be able to even anticipate that there's a monster coming potentially out of the closet. And you will lose money consecutively.
um and eventually again roll out that revolving door uh that many traders unfortunately uh have to uh have to face reality and go out of. So, uh, it's it's it's a very it's a very tough you know what I'm saying, Aaron. It's a very tough answer. It's it's not as simple as, "Well, here's what I look for. MADD cross." Well, how well Dan Shapiro doesn't know what what a MACD cross is.
How can I explain to you what a MAC if if a stock magds, right? Um, yeah, man.
There's a lot of moving parts. I mean, there's a lot of moving parts. I think uh the longer uh the longer you do this for a living uh I think and kind of using in a poker uh poker analogy I think the more hands you see okay uh the more chances than you'll figure out that how the movie ends okay and I say this all the time the new trader the modern trader the whole um you know the whole renaissance that we've seen in the last several years that everybody's kind of jumping back into day trading Um the real, you know, the reality is they're not um they're not prepared, you know, they're not prepared for uh all these moving parts. They're just not. It's just a scenario of uh looking at something black and white, you know, and taking it for fair value. But with all these different scenarios that are out there with high frequencies and um you know different you know different hedge funds placing you know placing different I can't I don't want to go into that but there's a lot of moving parts and I I think what a trader needs to do is uh watch a lot of hands play a lot of hands but play the premium hands okay so not every single day is tradable uh as my second interview with my Rothman he said you know this market you can sit 2 three days and not catch a wave and on the fourth day uh like the stars and the moon uh everything aligns and you'll make your you know x amount of dollars. So um it's a different tape man. It's a different tape. It's for you know it really is for uh responsible traders, responsible adults. Uh you could be the nicest person in the world and I say this all the time. This is the only business in the world uh that you know you could want it bad enough. You know I hear it all the time. Do you want it bad enough? Yeah, you could want it as bad as you want. it just it doesn't translate into you being successful. Um it's like you know you know yeah I want to be 6'2 but if I don't put on you know my wife's 4 inch heels I won't be six feet 6'2. So you can want as as bad as you want. Um the reality is you know luck does play a big part of it. I'm not going to li deny it. Being in the right place at the right time um you know gave me basically a couple of years that that I bought my time. I basically bought my time. Um, you have to look at premium setups once you figure out, you know, who you are, what type of trader you want to be. Um, and then you really have to avoid, you know, shooting yourself in the foot because, again, I say it all the time, you know, there's nothing um that somebody else can do to you that you can't do to yourself. And, uh, once you figure out what not to do, uh, I think you'll be okay. I think you'll be okay. And the most important part is it'll buy you time. and they'll buy you shelf life to figure out where your specific edge is.
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We've talked about how you lost money, you know, throughout that 2-year period um in quite depth. So, let's talk about how you go through losing periods these days. Sure, they're not quite as as dramatic as 2 years at a time, but you know, you still go through losing periods. I mean, everyone does. So, how do you stay in I don't know, good spirits. How do you how do you keep your head up through losing periods and how do you break out of that? Yeah, that's a great that's a great question, Aaron. As we previously discussed, I I I get tons of emails all the time, and they're never they're never asking me, "Well, what do you think about this chart?" You know, again, what do I think about a chart is irrelevant. Um the question always is, "How do you make it through, man? How do how do you do it? How do you mentally stay afloat?" And you know, there there's a there's a great answer to that. Number one, and here's my advice. Number one, guys, turn off your P&L. Turn it off. Um, you know, turn it off. I I you know, I completely I don't even know where my P&L box is on my platform. Turn it off. And the reason why uh you have to turn off your P&L is number one, this whole business is all or all uh emotion versus reality, right? The more you're emotionally committed to a trade, the more chances than not you're going to completely mistrade it. and everything you do in this trade is wrong and everything is is going to happen after the trade is over is probably going to make you angrier and angrier because eventually the trade will probably work out your way. Okay, so the first thing to do is turn off your P&L. Okay. Uh number one, and here's kind of relevant advice here. Also, you want to turn off your P&L because if you're having a good day, and I hear this all the time, Dan, I have a $30,000 account. Okay, what should be my goal for the day? And my answer to that is your goal for the day is to make it to the next day. Okay, which has nothing to do with your P&L.
And what happens is when you're trading, you're trading well, okay? If you look at your P&L and you say to yourself, well, my goal is a,000 bucks for the day. Okay, you hit your [clears throat] goal within the first hour or so. And then I know a lot of traders, they'll shut off they'll shut off their day for they'll shut off their day, right?
They'll completely shut off the day and they'll leave. Here's the problem. The day that you can make their,000, 2,000, 3,000, 5 grand, whatever it is, whatever interval you trade, whatever tier size you trade, the day you can make that money really, really quickly, you don't realize it, but you're playing a premium hand. You're playing the kings, you're playing the jacks, you're playing the aces, you're playing the queens. Okay?
So, that day is turning out to be a premium hand. And what you're doing is you're taking a pair of aces and you're putting in a bet of 50 bucks. That's basically what you're doing. And you're telling the guy on the other that's playing against you, I'm all in for 50 bucks. And once you hit that pot, you say to yourself, "Okay, I'm done for the day." So, you're losing out on a premium hand. Every every professional trader will tell you what we're looking for is premium. We're looking for those pocket aces. Okay? So, the day that you can make two, three, four, five grand for the first 30 minutes, 45 minutes, you're in a very, very bullish scenario playing a premium hand. So, the last thing you want to do is say to yourself, well, I'm up a grand for the day. I'm done. And you don't realize you that one grand could turn into 3,000, could turn into 6,000, could turn into 10,000 because you're riding that euphoric euphoric hand. You're riding those pocket aces.
And I don't care how, you know, how misguided you are, everybody eventually plays pocket aces. And the most important part is if you remove your P&L box, those pocket aces really turn out to something. Um, on the way down, it's even more important to turn off your P&L. I already know on my tier size, let's, you know, on my tier size, and let's just use any any, let's just use a thousand share lots, just make it easier. I already understand if I'm putting on a trade and the stock goes a dollar against me, I know I know mentally. I mean, I know I could do the math. you know, put on a thousand shares is down a, you know, down a point, you're down a grand. Okay? But mentally, if you see it, visually, if you see it, that thousand turns into 100, might as well turn into 100,000 because your next trade, you don't want to get down 1,200.
You don't want to get down 1,500. So, what you're going to do is you're going to trade the P&L and not trade the setup. Okay? So, you could be looking at a fivestar setup. A stock comes out of a twomonth range, comes out, you know, takes a 20 30 cent spike, comes back into your, you know, turn comes back into your entry, goes down 10, 15 cents, you're already down a grand. You're mentally already distraught. You sell the position at a 10-15cent loss. Next thing you know, 35 seconds later, the stock's at the highs of the day. So, you're mentally already destroyed.
You're done. You're done. Once you're once you're trading your P&L instead of the setup, you might as well you might as well, you know, wrap it up for the day because nothing good is ever going to happen when you're trading the P&L.
And the more deeper and deeper you get into the day, the more erratic mistakes you're doing, the more eager you are, the more you're, if you're a man, the more testosterone levels are rising, okay? and all you're doing is committing further and further into emotionally protecting your P&L and not trading uh trading the setup the proper way. So that's my kind of my first tip.
Everybody goes through slumps, okay?
Everybody goes through slumps. I've had I had a week um two months ago. Okay, two months ago I went from having one of my top three biggest weeks the prior prior, you know, prior week to just not getting anything going. I mean, I went through Monday through Thursday. I couldn't make a dime. I wasn't really losing any money.
I just couldn't make a dime. Like, everything was wrong, right? Everything was wrong. Stocks were um snapping back out of breaking down out of bottom channels on shorts. Stocks were getting rejected on longs. There was reload sellers on my longs. There were reload buyers on my shorts. Just nothing went right, you know. Nothing went right. And I sat there, you know, I sat there a couple days. I started laughing. There's no eventually start laughing. You you can't you know you can't take this business um you can't take this business to heart. Okay. You can't think that this is this is you know every bad thing is pointed at you. Okay. You'll go through these horrific times that you can't get anything going. You'll go through these horrific times. is like perfect example. I I last year about about a year ago I don't know if you any you listeners remember there was a huge run into the clothes on clothes on these a stocks these pod ash and intrepid pod aashsh and all these stupid things and I took um intrepid pod ash overnight and the whole group was like down 25% the next day the next day. I mean, it was just I was like, "What? Wait, wait a minute. You're telling me there's no specific company news and I'm down four bucks on this trade, which is insane."
And mentally, I was like, "Well, I could try to make this money back today."
Okay, let me see what the market gives me today. Okay, let me see. Because I I've learned long enough the revenge trade does not work. Okay, anytime you have any type of raw emotion going into a trade, you're going to mess it up.
Okay. So, what I learned a long time ago is there's not one event, bad event in your trading career that should be able to take you out of your game. Okay. Uh things happen all the time. Stocks get downgraded. Uh bad, you know, FDA news.
You know, I try not to trade a lot of biotech, especially overnight. Um because they blow up all the time. Um, but the most important part of everything is I understand the highs and lows of this business because what I went through after after 911. So for me, when I go on a really big hot streak, I I'm not impressed because I expect to make money. Obviously, uh, every trade that I put on, I feel like I'm gonna make money. I feel there's certain days um, I can walk on water and then there's days I can't get anything going. You know what I mean? And those days, you just say to yourself, you know what, it just wasn't meant to be. You don't need to keep on piling on positions. I could feel I could figure out within the first 30 minutes if I'm going to have value in the day. Uh so if I'm wrong in the first couple of trades, what's the point of me keep on piling it on, right? Because it escalates. It escalates very, very quickly. You could go from being down three grand to be down 8 grand. 8 grand turns into 14. 14 turns into 21. What's the point? Cut yourself off. Understand there's you not getting a premium hand.
Okay? uh emotionally there's nothing you can do. You can't cry your money back to you. Okay. Um so, you know, but the most important part when you go through a slump, okay, just realize that you know, sometimes the easiest thing to do is just take a step back, okay? Take a step back. Just watch the market. Watch the watch the order flow. Sometimes order flow won't translate into what's going on in the surface. it just won't because orderflow most of the time will not be organic. Okay? And that's where social media that a lot of these people, you know, tout and hype these stocks for everybody to jump in, you know, all that stuff. Uh so you got to just take a step back and just say, "Hey, look, you know, it's just not my day. Maybe it's not my two days, but you know what? I know what I know what I need. I know what I want, and until I get those premium hands, there's no point to do it." Um the problem a lot of traders have is just they can't accept defeat. Okay. And there's a bigger, you know, there's a bigger there's a big picture there.
Okay. And you go back into the theory of war, right? There's plenty of battles that are lost, right? Plenty of battles.
Battles are lost all the time. The most important thing is to win the war. So I could lose a battle, right? I could fight with Tesla and you know there's a reload seller sitting there at the top of the range and it just the guy won't let go. The guy won't let go. And you know what?
I'll figure that part out. You know, once it breaks the range, I'll get out.
I'll take my loss. But I'm not going to lose the war on one trade. And I see it all the time that many traders are so fixated about being right instead of fixated about trading properly. And that snowballs into day after day after day until they realize, you know what, this is just not for me. And the saddest part about the whole trading cycle is people will most people will never uh trade up to their potential. Okay? because they won't give themselves a chance to playing those premium hands and they take everything to heart and they believe that everything they do is the result of bad things just everything bad. You know, some somebody just has this evil eye on you and the reality is you know what the market most of the times won't get you won't give you what you want. Uh most of the times it won't celebrate your existence. All the market wants to do is take your money and take your confidence because remember I could go on and this is this is a very important point. I could go on a run three weeks in a row, right? Three weeks in a row have a magnificent run and this is how fragile us traders are. You can go two days without making money and you've completely lost your confidence.
Think about that. Think about how many times tra traders have done that. You could go on a three-week run doing the same thing every day, every day. Every day. Every day. You lose money two days in a row. start questioning everything you did for your whole career. Okay? And I say this all the time, you don't lose your confidence. It gets transferred to another trader. Okay? It gets transferred to another trader. Okay?
Because you can't lose something that is obviously shown you promise or prosperity in the past. You're just a product of what's happening in the moment. And just sometimes we can't control what we see in the markets. So instead of snowballing it, letting it go out two, three, five days, take a step back, you know, do something nice for yourself, okay? Get a massage, okay? Go to the beach, go to the pool, go to the sauna, do something nice for yourself, okay? Um, and when you clear your head, you come back, just watch the order flow. Is it telling you the same thing that it told you two weeks ago? Is it telling you the same thing, hell, that it told you two days ago? What's different about this tape today that wasn't different from a week ago? Okay.
And little by little, when you take the step back, you finally kind of see it in a weird way. You kind of see it. And once you see it, you can start making adjustments. And remember, at the end of the day, everything we do is all adjustments. It's one big adjustment cuz I say this all the time. The stock market has been around God knows how long. You know, what was it? 1887, 1897, whatever it was. But trading, the art of physically trading for yourself is less than 25 years old. Okay? So, we are all still looking for answers. Think about that. We're all looking for answers.
Everybody's in the same boat. The market changes all the time. The nuances changes all the time. Technology is changing by the second. Okay? Um chart patterns get obsolete. Uh strategies go away. Okay? Um so, we're we're all in the same boat, man. We're all looking for that next edge. The problem is most traders are fixated on what they think is the right thing to do. And I say it all the time. If 90% of the traders are losing money, why would you be in the same boat as them, right? Why would you be looking at the same thing? Why would you be looking at the same indicator in the same studies uh in the same matter?
Hell, in the same stocks. Um so slumps are controllable, okay, for most of my friends. is like I I don't hear anymore any of my buddies for years that you know are going through something more than like a month. Like you can have a bad month. I mean I' I've I mean knock on wood I've been doing you know pretty pretty well uh for the last several years but you know it's very common that you can go on a big run and then just things don't work. It just happens. And I think mentally you just have to get away. You know go on vacation, take a couple days off. Go to the Hamptons. You know it's summertime. uh take, you know, take your kids to the park. Do something, you know, do something that's for you that has nothing to do with uh bids and offers. Uh get mentally centered, man. And I tell people all the time, like I used to listen to music every single day. Certain days I want to be depressed. Sometimes I trade better when I'm angry, so I'll listen to Shade Day and that woman gets me depressed as hell, right? Can you imagine listening to Sha Day before the bell rings, right?
Some woman in Somali with no shoes. My god, man. you know, [laughter] you know, I don't want to hear this, but you know, it gets me depressed and sometimes I trade better when I'm angry. Some people, you know, do yoga, meditate, right? Um, take Pilates, go for a run, do do something that mentally is going to make you happy. And slumps are are there. They're part of the business. Uh, it's the cost of doing business, but at the end of the day, everybody goes through it, okay? Um, everybody um absorbs them eventually. uh but they embrace them at the same time because it it it makes you uh go through your adjustments. And again, at the end of the day, the modern day trader or the modern trader in general is just one adjustment away from being uh from from not being profitable to being profitable. And once you get that one edge, you you ride it until, you know, until it stops working.
>> Absolutely. No, that's that's an awesome answer, Dan. Thanks for really really going deep on that. That was really cool. So, I'm keen to ask you about um another topic um slightly different from what we've covered already and that would be routine. How important is routine on a trading day? Um like do you have a routine that you follow?
>> Yeah, I have absolutely um here here's here's the deal kind of putting how you know generally how I look at a day.
Well, number one, when there's when there's a uptrending market, I don't even want to day trade. I couldn't care less about day trading. Day trading for me is subsidized cash flow. Uh that's all it is. Uh I make my money as a swing trader when there's a trending market, there's defined ranges, everything is moving in a direction. Uh so for me, you know, just managing my book is the most important part. That's it. I don't care about day trading. You know, it doesn't make a difference to me. There's scalp, uh Apple, Google, it's irrelevant. My core positions are my core positions. I trade around them. Uh when they're down, I try to protect them. Um so but in a market like this which I believe right now is a phenomenal phenomenal uh cash flow market. I think uh the ranges have been just phenomenal. Um I think the consolidation of these ranges have been great. My routine every day you know every single day is number one I used to hear this and I think a lot of a lot of traders hear this also. There's an old adage and it says that smart money actually I'm sorry dumb money trades in the morning and smart money trades in the afternoon. And I used to sit there and I said to myself, well that doesn't make sense to me because I trade in in the morning and and again as I I you know I joke around all the time, you know, I might be the self-proclaimed king of the idiots, but I'm not stupid.
So by somebody telling me that the dumb money trades in the morning, it I didn't understand that. Okay, I didn't understand that. But if you break [clears throat] that down, if you break down that statement, think about this.
There's two kinds of people. There's two kinds of traders. The one that was profitable the day before and the one that lost money, right? There's nothing in between. You either lost money or you made money. Okay? So, the psychology behind this is the guy who made money can't wait, right? You see her all the time. Oh, is it is it, you know, oh, I can't wait for the next day, you know, again, which is completely ridiculous.
But that person, okay, is already emotionally committed because he feels he or she feels that they are that they've turned the corner, right? They turned the corner and they're waiting for day two uh to start trading, start putting together a winning streak. The trader who lost money is say is waking up and say, "Well, it's a new day.
Forget about what happened. It's time to redeem myself, baby. Right. Today's turnaround Tuesday, right? Today's turnaround Tuesday. Today's the day. So, they're gung-ho.
This is This goes for a lot of new traders, a lot of young traders, a lot of young men as well. You got your juices flowing again. Your testosterone is off the charts. 9:30 rings, you are ready to jump out of your shoes, right?
That damn opening bell rings, you're ready to go. So the emotional money always flows in the first three hours of the day. Okay? One guy is playing catchup, one guy is trying to increase or add on to what he did the next day.
So the candles, if you notice the first hour and a half or so, two hours or so, the candles are much more exaggerated to the upside and to the downside because people are chasing chasing the rainbow. Okay, one guy is trying to play catch-up to get his money back. The other guy is trying to extend his gains. Okay, so they're trying to jump on the hot stock or the Trump tried on, you know, jumping on the hot trend or the the hot range or the hot news.
And the biggest exaggerated moves are for the first three hours. So I try to if I'm trading cash flow, number one, I already have an idea what I want to do.
You know, I already have an idea from the night before. If I'm trading Gro, if I'm trading Apple, if I'm trading uh the IWM, like for example, tonight I already have a specific plan course of action for tomorrow. So if we gap down tomorrow, right, and uh the market starts going red to green, like I want to buy spies. I want to buy IWM. So I already have a course of action. So I feel that if more, for example, like specifically for tomorrow, so if I feel that if shorts are caught on a wash out, you know, and they capitulate on the bottom of the range and all the volume is, we're going to have this snapback uh deadcat bounce. So my mental mental approach for the next trading day specifically for tomorrow is okay I know what I want to happen and if the dumb money right if the dumb money as we were all taught that the dumb money trades in the morning if the dumb money starts chasing that specific course of action everything should be fine. Okay. And that first 3 hours will give you the biggest emotional commitment to the market by traders. Whether they're uneducated or whether they are educated is a different story. But that first 3 hours is the most important part for me.
Now 90% of my cash flow day is done by by lunchtime. You know, maybe I'll do a trade here and there in the afternoon, but the afternoon it's more of a positioning period. Okay? Because traders uh a lot of traders their positioning for the next day. So if you notice a lot of stocks and I talk about this in live webinar all the time, a lot of stocks are pinned or pegged to their specific range breakout level. So that's why a lot of stocks people will buy these stocks in the afternoon and they'll go up a little bit and they'll crash and only to see them go up the next day. Because think about it, a stock usually will put in 90 95% of its range in the first 3 three and a half hours. Okay? So, by the time the afternoon rolls around, it's exhausted, right? It's like you're you're you're you're climbing the Empire State Building. They say, "Hey, uh, you just climbed 60 stories. You're like,"Oh, great. I did it. It's a victory. Oh, by the way, you got to climb over another 60 to get to the top." Right? You're going to be exhausted. And that's exactly what the stocks do. They get exhausted by the afternoon. And most traders will not recognize this. And most traders will commit to the afternoon session realizing that there's no money there. Most of the time, there's no money there. unless you're trading uh the fades because a lot of stocks do give up gains uh towards the end of the day and that's where a lot of the stocks really get washed out uh especially high flying throughout the day that are starting to put in uh lower highs on several uh several channels. Um but the interval in the morning is the most important part for me. Um I can make make it a you know make my day in the first two two and a half hours and kind of babysit my positions from the morning uh going to the afternoon. If I have a good runner, I'll keep it overnight. Uh but it's very very important to me not to play catchup.
Okay? Because if you miss your window, like if I miss my window in the morning, knowing that the biggest emotional commitment is in the morning, I don't play catch-up. I don't need to play catch-up in the afternoon. I don't need to see my P&L uh green for the day because you know what? Tomorrow's the next day. You know, tomorrow's another day. And if I if I get the premium hand the following day, then fine. I mean, what premium can I possibly expect if I miss my first three and a half hour window, three-hour window, where's my premium in the afternoon, right? If I know everything's getting pegged, where's the premium in the afternoon?
There is none. And you know, you go from back from playing premium cards to playing the 29 offsuit again. And mostly traders just don't know know that. So routine is a very very important part.
Um, you know, some people love trading premarket, somebody loves trading after market. For me, I look at it and say, look, if I can't make money for seven hours in the day, what the hell is the point of me trading for another three hours? Okay, I have young kids. I'd rather spend my time with them. Um so a routine is very very important. Um I think you can't compromise your process.
I think you can't uh prostitute your account okay and put it to uh you know put it to the fire. Uh you know trading is not a sport. It's not supposed to be fun. It's not supposed to make you happy. It's not supposed to give you a boost of adrenaline. It's supposed to be boring, lethargic.
um very uh you know very orderly and just treat it like a business. So routine is definitely important. Uh just the way a restaurant opens up every single day, they uh you know they set the tables, they um you know the lunch crowd comes in and if somebody orders uh you know a 10 filet minion, they don't put it out on uh you know on a paper plate, right? Because they're not going to prostitute their business for the sake of of of of uh you know going through the motions. So, same thing, you know, same thing as trading. Trading is a business. You want to make sure it's it's functioning properly. And like every other business, you have to you have to recognize that number one, uh, just to use the restaurant analogy, your crowd on the Monday afternoon or Monday evening or Tuesday evening will be a lot slower than it will be on a Thursday night, Friday night, Saturday night. Um, and you go with that approach. You go with that approach. And you know, you don't you don't subsidize, okay? You don't subsidize to the point of clicking a mouse. you do what you have to do to make sure you're around tomorrow. And I say this all the time. I don't care what your process is. There's not one trade out there that is more important that will compromise what you've been doing as a process as a whole. So, um again, like when we talk about there's a lot of moving parts. There's tremendous amount of moving parts. And again, the more you're exposed to the markets every single day, uh the more you'll see them and you'll kind of have an idea how uh the movie is going to end at the end.
I like it. Awesome answer, Dan. So, let's just do one more question and then that'll probably take us through. So, I mean, I have to ask you about uh your mentor. So, uh Meer Offman, who you mentioned briefly at the beginning, >> what are some of the standout traits and maybe the characteristics that you believe make him such an insanely successful trader?
>> Well, here here it is. Meer here. We we had some notable guys with us. Um, we had some notable guys. We had also another guy that um, for all you guys who are exposed to the prop world, there was a guy uh, that I started trading with years ago, his name was Jason Liieber. Okay, Jason was a disciple of Meyer. Okay, a lot of us were disciple meer. He was a partner at this place uh, called Shottenfeld. Shottenfeld Associates that he left, started a hedge fund four years ago. Uh, he took the hedge fund from like $4 million to 100 million. Okay. And he used the principles what Meyer taught us. And Meyer and here's the one misconception.
Okay, here's the one misconception.
Meyer was never a guy who would sit you down next to him and say this is what you should be doing. He was more of you're being a putt. And what what you're being a putts used to mean was you're completely doing something that is outside of your personality. So Meyer believed in the idea of stocks will go higher after they go lower. Right? So your complete principle of well Warren Buffett, right? You buy low, you sell high. Okay? Meer's thinking was if a stock is high, it's going to come in and then it's going to go much higher. Okay?
And considering the environment we were in, time will make you right. Okay? So there wasn't a specific thing he ever sat me down and said, "Hey Dan, you know what? You should be doing this or you should be doing that or avoiding this."
Because remember, we were all products of the internet craze. But what he did teach me was something very, very simple. Okay? You're not smarter than the market. You're not. Okay? If something's going higher, okay? It's not overbought. I don't care. It's up 35 days in a row. It's not overbought. You know why it's not overbought? As long as somebody's willing to pay that price, okay, and there's a fair and orderly market, that means fair value for the stock is that price. So what used to tell me is very simple and people used to say this all the time when the market was finally coming in, right? When the market was coming in and he said whatever goes down should go lower. So in other words, Cisco, people saying all the time Cisco is at 150. There's no way Cisco will go to 120. No way goes 100.
Won't break 100. breaking 75, breaking 50, no way it goes to 20. I'm a buyer at 15.
Right? So, the reality of what Meyer's greatest influence and I think what I um what I really absorbed back then was price action dictates everything. Okay, my opinion means not means nothing.
Means nothing. Means absolutely nothing.
I could look at a chart. I could grab all the data. I could analyze it 12 ways through Friday. Okay, my opinion doesn't matter. If price action is saying something that's different than my thesis, then price action is the king.
And I am not smarter than price action.
As my wife says all the time, you're an idiot. You don't know anything, right? I don't know how to do anything. I would have to pay three people to screw in a light bulb. Okay? But I did figure out this game a long time ago. And the greatest gift that Meyer taught me was that don't fight price action. Forget about the trend. Don't fight price action, okay? Price action is everything. Bad news comes out, the market absorbs it, takes it higher.
Don't think about it. The market is screaming at you that they're embracing bad news. That's bullish. Good news comes out, the market is embracing it as bad news. Don't try to fight it, okay?
Don't try to, you know, analyze a headline. If people are selling a headline, that means they're selling the headline. That means the stock goes lower. So don't overanalyze.
Be proactive. Whether that's sitting on the sidelines, that's up to you. Cuz I see it all the time now on this specific tape. Well, you got to be patient. Every day you got to be patient, right? The big the big the biggest bull market is you got to be patient. Oh, you got to sit on your hands. Why? Why? Sitting on your hands is for lack of process, right? Lack of strategies. And that's why there's a big difference between what a stock picker is and what a professional trader is. And there's nothing wrong with being a pro a stock picker. If you're a long biased guy, this is probably not the market for you, but there's nothing wrong with it. But at least proactive. Be proactive about it. Um, own up to it. Say, you know what? This is just not for me. And it'll be an easier easier day down the road.
But price action is king. Meyer was uh a phenomenal phenomenal trader.
Phenomenal. I mean, he would be managing 30, 50 stocks at a time. his P&L would be up, you know, a million dollars here, a million dollars there for the day, for the day. Um, you know, it it'd be insane. And I used to, you know, to be all honest, I used to get depressed looking at it because, you know, you know, you see a million dollars, you know, you know, you're trying, you know, you're trying to get back and you're up like, you know, 20, 30 grand, you know, which is, again, nobody nobody's complaining. Uh but when you when you start making decent money and then you know you obviously get to the pinnacle of your of your of your uh you know session where you see a guy making a million dollars. It depressed you never motivated me. Depressed you know depressed the crap out of me. Holy crap how's this guy making a million dollars a day? Um not every day obviously but you know he used to go on these runs and uh he was awesome. You know he was awesome. Um again a lot of us were uh disciples from his tree. Um, listen again, I, you know, I I never I've never been embarrassed to be, uh, to say that I'm, you know, I was fortunate enough to be a byproduct of the internet craze.
Uh, but the the sad reality is I went through so much u mentally uh, emotionally that, you know, scarred me for many many years. And the ironic part of it is I started trading in the end of '9 start of 99 but I became a trader roughly around 2004 uh middle middle of 2003 2004 so uh it's not easy guys you know it's not easy um by no stretch of the imagination uh but the one piece of advice I will give to you uh if you are committed to this business uh turn off social media uh read read good blogs. I'm not talking about some 19-year-old kid that made $3,000 read. And there's nothing wrong with that. I I encourage young traders. If I started trading at 19, man, it would be it would have been great. You know, I I'm so jealous of these these young kids 19, 20, 21 years old, they're making all this money and it's phenomenal.
Phenomenal. But, you know, read Depth.
Read what, you know, veteran traders have done. guys like Barton Bigs and uh you know you know you know guys like um uh what's that guy's name man a lot of these older guys um um yeah anyway I'm skipping a it's getting late in the evening I'm skipping a lot of names uh but you know just read what people have gone through you know read their experiences and not the good experiences nobody cares about the good experiences read what you know read what people have gone through you know personal lives you know every trader I know has blown out every trader I Uh Meyer blew out, you know, 3, four years ago from First New York, you know. [laughter] I mean, it's the reality. Everybody knows it. So, everybody blows out. Everybody uh has, you know, rough patches in their life.
Um you know, you have to have good people around you. No leeches, no blood suckers, no yesmen, uh no, you know, no, uh you know, no salesmen. Uh you know, really understand the nuances of this business. You know, try new things. And I hear people all the time, well, I'm only an option trader. I don't believe in equities. Well, but you know, you trade weekly options. Yes. Well, you you do realize weekly options 70 70 75% expire worthless. Well, I didn't know that. Well, yeah, they do. Uh, you know, try to expose yourself to different things. You know, try to trade options.
Try to trade E- minis if you can. Uh, uh, try to trade small caps, midcaps, large caps, high beta, uh, ETFs, which I'm a very, very big believer of. I haven't really traded too too much ETFs in the last couple months, but um you know, try everything. Uh and if you want it bad enough, sometimes it's just not good enough. It's the reality, man. Uh I never sell dreams. I only talk reality.
Um you can want as bad as you want. You could be the nicest human being, but uh you know, really commit yourself to, you know, to omitting all the bad things that you're doing to yourself day in day out. Um, and if you have a good mentor or somebody that uh u you respect, just keep asking questions, keep on spamming them, keep on uh you know, keep on u annoying them until until you get it right, man. And um you know, again, you don't need to be right, you know, you don't need to be good on everything. You just need to be good at a few things.
And um you know, this market's changing.
Uh I try to tweak every single day. Um like I've developed this PS60 theory. uh nobody trades it but me. Uh I stumbled on to buy a couple of rough days and by accident I just saw something I saw an arbitrage in the charts that uh I'm using to this day and it's it works pretty well. Um but uh you know stay up man stay up you know don't don't think you're alone man. Don't think you're alone. Um, you know, guys, you know, we're all, you know, products of of bravado and we want to show uh we want to show how how strong and manly we are and you know, you know, I'm a I'd like to present that in front of my kids, but sometimes, man, we're all human beings.
You know, we laugh, we cry, uh, we have our bad days mentally. You know, we just sometimes don't want to put up with anything. And, you know, those days of, you know, those days are what makes us us. Those are the days that makes us human beings. Forget about being traders. So, um, you know, if it's meant to be, I mean, that's the that's the that's the cruel reality. If it's meant to be, it's going to be. But, uh, don't shoot yourself in the process. That's the most important thing. Wait for premium setups. Wait for premium hands.
No matter how you trade, uh, get that green light, man. Get that wind at your back. And when you get it, you know, you got to push, you know, push really hard because it doesn't last long, okay? And, uh, study up, guys. You'll be all right.
You know, you'll be all right. For all you new guys, um, you know, just keep studying, keep learning. filter out the noise, keep asking questions, and I think you'll be all right.
>> Absolutely. Yeah, you hit on a ton of great points there and well, a ton of great points throughout the whole interview. So, Dan, this has been really, really great. Thanks again for coming on and I really appreciate it.
And >> Aaron, is a pleasure, man. Thank you very much for having me.
>> No trouble whatsoever. So, before you go, can you share with listeners where they can go to find out more about you and also how they can connect with you?
>> Yeah, I'm on I'm on Twitter. Uh, I'm on Twitter and Stock Twits at Danep55.
Uh, if anybody ever needs to to reach me, you can just email me at uh access a trader at yahoo.com. I don't dwell on access a trader because just like everything else, just one cog in my, you know, we I run a 7-hour live webinar.
Um, I don't market the damn thing because again, if you haven't figured out what I do by now, who I am, and the people that I deal with every single day, then you just don't get it. Uh, I think more people are are impressed about the wrong things, about the bright lights. And I say it all the time, you know, when people come to New York, they're attracted by Time Square, but the rich people don't live in Times Square, okay? The rich people live in the Upper East Side, Central Park, and all that stuff. So, uh, yeah, you can get in touch with me. I am I'm pretty accessible, hence the name Access Trader. Uh, we do run a live 7-hour uh, webinar, which we go through live scenarios every single day. Uh everything is laid out in front of you.
There's no trick photography. There's no there's no editing. Uh we have a great group of human beings. A lot of older people who really get it. You know, a lot of people who get it. And um you know, it's a it's a cool place. It's a cool place. And started out as a kind of a a hobby four and a half years ago.
Actually turned into a business. And like all my endeavors, I try to make sure I don't procitate I don't prostitute the the product for uh anything. So, uh, feel free, you know, feel free to check us out, but again, I don't really don't market it, uh, a lot.
And, uh, you know, everybody knows where we are. Uh, so if you need to stop by, ask us some questions, check out what we do. U, my pleasure. If not, we could always be, uh, >> uh, social media buddies. [laughter] >> Good stuff. Good stuff. Well, I think everyone's going to really, really enjoy this interview. Thanks again, Dan, and take care and let's talk soon.
>> Thanks, buddy. Have a great evening, guys.
You've come to the end of this episode of Chat with Traders, but don't worry, more great episodes are on the way. To stay updated with each great new episode, be sure to subscribe to the podcast in iTunes. And we'd love it if you leave us a rating and review. We'll see you next time on Chat with Traders.
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[music] Guys, what's going on? Welcome to the 33rd episode of the Chat with Traders podcast. Thank you very much for tuning in. I'm your host Aaron Firefield. Now this week our guest is an equities trader from Southampton, UK. His name is Chris Sees and his journey to becoming a trader kicked off roughly 7 years ago after his interest in markets was pegged from reading through a book about stocks. While these days Chris has found his edge, he did spin his wheels for several years to begin with and also managed to run several accounts into the ground. During this time, one of the greater turning points came when Chris found another trader who was willing to pass down his experience and offer him some muchneeded guidance. And as we all understand, to have a mentor on your side is extremely valuable. So, I asked Chris a number of questions around this subject, which I'm hoping you may find helpful. We also discuss the importance of repetition in your learning, how to build discipline, and also touch on some mindset challenges that can be early roadblocks for developing traders. I feel like many of you listening will find Chris's story to be relatable, and I'm pretty sure you'll take away a few important lessons from this interview.
So, let's get into it. I'm Aaron Firefield, and here is this week's guest, Chris Sace.
Hey, Chris. Awesome to have you on the show. How's it going?
>> Yeah, good, good, thanks. How are you?
>> I am very well besides the fact that it's uh freezing cold here this morning.
I'm doing really well. But um so we've been speaking for a while. Um obviously before we hit the record button and I'm excited about some of the topics we're going to discuss today. Some of those topics being mentorship and psychology.
>> Uh the psychology is something you've really emphasized. So I'm keen to hear more about this. But first of all, we want to hear about you and where your trading journey began. So, I guess my first question would be um what were you doing prior to trading and what inspired you to turn to the markets?
>> Uh well, it was about 7 years ago um I um I had a small a small business um and I had uh Christmas time off. um it wasn't in you know any it wasn't in the finance industry at all. It was doing something completely different and have absolutely no uh past experience with with the stock market at all. No friends, no family really into it other than I guess their pensions or whatever, but I certainly wasn't involved with anything. Um and just one Christmas I had some time off I went into a bookshop uh and I saw a book on stocks. it was, you know, silly title of how anyone can make money or something. Um, and I just bought it for fun. Um, started reading it and it it sounded quite quite interesting. So, um, I opened up a a demo account um, with with a company. um saw a s saw a share but bought it but forgot about it for a few few days and um came back and found out that I was um I was I don't know 1,600 up or something and figured that's not a bad way to live. I haven't done anything for a few days. Um, so I kind of um, you know, finished reading finished reading that book and and opened up an actual account and did exactly the same thing. Saw the exact same share drop. I put £500 in. Um, bought it and about 8 hours later, I got what I what I now know was a margin call. Um, anyway, I just closed it out and made a loss, put another £500 in, did the same thing with something else.
Um, and that was basically kind of my start. Um, and from there I I then just uh kept buying books, kept um trying to teach myself on the internet. Um, and it just went on like that for for a while, you know, kept kept kind of blowing up, but I didn't really realize what I what that was at the time. Um, and it was probably a good few months down the line when I I got a a charting package and um, again at this point I I I didn't know anybody who who deals in in in shares at all. So I couldn't ask anybody at all. Um, that kind of came later. So, like I said, I got this charting package and and once I learned how to use it was kind of um looking through it and um started to see recurring things. Um and and you know, it kind of took a long time to really kind of um understand what I was seeing.
But again, teaching myself, um, I kind of got eventually to the easiest way to describe it is just what the system was, which was, uh, it was buy a breakout and use a 480R stop and hold it for a long time and you'll make and looks like you'll make money on it. That was basically what I saw, but I can describe that now because I know what it is. I didn't know then what it was, if that makes sense. It was just something that I saw within a lot of shares. So, I guess really the the um the path to that was just looking at lots and lots of charts. Um you know, this thing had everything from from US stocks to UK stocks and all of them. So, there were thousands and thousands of charts. So, you really kind of got to learn um you know what what what charts look like and again like I said what the these patterns were that you see and predominantly it was it was trending. It was from you know bottom left to top right. that was what I was seeing, but how to trade it was, you know, I didn't really know at the time. Um, and then I guess I I um I I I stumbled across one of Michael Cavll's books. Um, and I remember reading it and I remember it made no sense to me whatsoever. The only thing I could really work out was that the charts look the same. Um, but I had no idea that there was this thing called trend following. Um, and it was only when I kind of it was one of my my aha moments when I kind of realized what it was and um I I then started looking up on the internet and that was really when I started to kind of accelerate a lot.
Um, and then I I found I found a mentor online and he helped me out a lot with it. Um and he he he had his own system which I tried to adopt and um probably couldn't really wasn't mine. Um but ultimately all you know all that experience led to how I trade today really. Um yeah so that's kind of you know a brief history on it.
>> Yeah. No that's really good. So we're gonna get into that a little bit deeper.
So let's just sort of take it right back to the start when you you sort of picked up a book. It was kind of random.
Started reading it and you know shortly after you started obviously you had your um demo account which you did well put live money on the line and lost it. What did your I'm curious to know what did your partner think of this at the time like it was a little bit random. It was sort of something out of the blue that you hadn't really talked too much about before and now you've just sort of started started trading and you've started losing money. um you know, $500 at a time, like it it starts to add up. What What did your partner make of this?
>> Well, um at the time it wasn't it wasn't a huge thing. Um because it wasn't a it wasn't a lot of money. Obviously, you know, no one wants to lose, you know, $500, £500, wherever, you know, but it wasn't um it wasn't big money um that I was that was losing. And also, I didn't know what I was doing. And I think probably because of I had the business.
Um, you know, don't get me wrong, there wasn't loads of money coming in from that. But ultimately, you know, I used to make decisions daily that I wouldn't consult anyone with. You know, it's it's that was just the nature of what I did at the time. So, I certainly wasn't putting in £500, you know, and um and that was being used to pay the mortgage.
Obviously, you know, in hindsight, it's very easy to turn around and say, you know, don't obviously get risk money that you can't afford to lose. But at the time I didn't know that and the same as if anyone else you know um starts in the same way they won't realize what what any form of money management is. So I guess in that sense I was quite lucky.
I'm quite lucky that I didn't go and put thousands and thousands of pounds in thinking that I could have traded it up like I did with that just one trade at the beginning. Um so yeah that was kind of fortunate.
>> Yeah I mean that's a good point. So even then when you did um sort of run a few accounts into the ground um even though they weren't you know big accounts like you mentioned that you were just sort of starting out small.
What was it that um sort of motivated you to keep pushing on? Like why did you not go well this is this is doesn't work or this is too hard. What was it about it that sort of motivated you to keep going?
>> Probably stubbornness.
um uh you know I'm quite um competitive anyway. Um and and I think it was that when you first start I think yeah you've all you you you kind of start off with this idea that you you can make a lot of money doing it. Now I I um I made thousands on that first trade the demo account which you know like I said it wasn't real money but it was you know wow I I made money there and I didn't do anything. I I didn't physically have to go to work and and kind of, you know, do X Y Z, you know, I I I literally sat at home for a few days over the Christmas period and and made money. So, I think it was it was that that drove me. Then it was the game that, you know, I've been I've always enjoyed strategy games and and it was the the market to me is like the ultimate strategy game. and you kind of realize that when you first start. And then of course you couple that with the fact that you can make quite a you make some money out of it.
It probably is what kept me going. Um but I can't I must admit I've never thought at any point about this isn't right. I think it was just something that I first started and and kind of clicked with straight away. So I guess I was fortunate there as well.
>> Okay. Sure. So you mentioned that you of course read this book at the right at the start. Um later on you sort of read one of Michael Kovville's books. Was there anything else in between there that you were really getting stuck into and studying? Um besides just looking at charts, was there any other sort of uh resources or did you do any courses or books? Like was there anything else that you were learning how to how to trade from?
>> Um so I've got a a ton of books, probably a hundred trading books now.
Um, and I did used to buy quite a lot of them, but it was that none of them really made any sense at the start. One book that really did, um, and actually this was probably just before I read Caval's book, um, was, um, was one of Van Tharp's books. Um now they are a bit deep to start with if you don't kind of understand it but but it kind of brought into play a few elements of of um a strategy um risk management psychology um and that was what then kind of it probably started me on the track of um okay there must be some sort of formula to this and I guess ultimately then that might have been the start of you know looking for a holy grail obviously I know that doesn't exist now but back then it was probably those little things that that kind of started me getting more interested and that was where I you know thought about getting the charting package. Um and then and then ultimately I guess it was it was throughout throughout the time there's been lots and lots of books that I've owned that that I've read and and picked out little bits from. Um I've never done any courses and um you know the internet was was obviously you know helpful because of that you can type in anything you know you type in trend following you type in um day trading whatever you know online and and a whole host of things come up but I certainly didn't do a course I didn't subscribe to anything then it was all just self-taught and I'd hear something or read something you know um pivot point or um moving average or whatever option I don't know something and I would Google it watch YouTube videos on and just really try and teach myself everything that I could and it was it's just kind of built up from there really.
>> Sure. Yeah. No, that's really good. So, if you had to pinpoint just a couple of your biggest challenges or hurdles between the point where you were starting out to becoming a profitable trader, what would you say these were?
first of all entering the beginner's cycle and then exiting the beginner cycle. So what I mean is is um so I've spoken there about how I've heard a few things you know risk management um strategy psychology etc etc those are kind of the beginning of where you realize ah okay so there's something in this um so you know before a strategy might be buy this because it's it looks nice I don't know whatever whatever people do when they first start trading um but then you you realize actually that there is some sort of strategy in this and as I mentioned before what what I was actually doing it to start with was buying a breakout. That was my first kind of strategy I ever put together. Um and it was um it it was basically putting that bit together and then after a while trying something different. So um you know that let's say the the entry point was was a breakout, the exit point was a a 480R. I then might try a 280R then might try I don't know something else um you know selling when the when the price has gone up for three days and it was all that tinkering around that then leads to reading more books which are then of course got more strategies in you know the internet is full of strategies as well not to mention all the ones you can pay for. Um so you're kind of going around in this circle where you're not actually you're really not focusing on your your strategy at all. you're tinkering constantly and that's just not a way to trade, you know. And when you realize when you realize that, that I think is when you exit the beginner cycle. That's when you really then start to focus on yourself.
You start to focus on your strategy. Um and that's really I think when you when well that was when I started to become um consistently profitable.
>> Okay, good one. And at what point did you well first of all let me ask from from when you started to to where you when you became somewhat consistently profitable how long was that time there maybe four years 5 years four years I think um but I say I've been quite fortunate I haven't lost a ton of of of money purely because uh I did have a few big winners to start with. And the probably the the one thing that I've I've always been um just generally in life is that if things are too good to be true, they generally are. Now, you know, anyone that can one guarantee make you money all the time, you know, you're very wary of those people. Um, and it was it I think it's been that that's kind of constantly um kept me going as well because you can't make a lot of money with um you know, we're talking like 100% gains in a day kind of thing. You know, there's there's there's got to be a downside to that. And of course there is. That was just very very bad money management. And I didn't realize that at the time, but it was that instead of getting um euphoric and thinking um brilliant, I'm going to do this every day. I'm going to be a millionaire by the end of the year. I think I was more cautious and thinking, okay, well, I've made some money now. How have I done it?
And and I think it's that it's constant reflection on what I was doing that probably kept me going. It probably kept me in the beginner cycle a lot longer than I than I would have hoped for because of everything I was doing. I was then reflecting on and I might actually change something. And ultimately, I did I did I have ended up pretty much with a system that I very first started off with.
Okay. Excellent. So in that case, at what point did you feel comfortable to focus your attention purely on trading and and let go of the business?
>> Well, I still do bits now for it, but I certainly um um more my my trading is um is is what I do on a daily basis. Um, you know, I've got a few interests elsewhere that that I just I do as and when I can, but yeah, I rely on my trading. Um, and I guess it was just when my account got big enough. I'm confident in enough. I'm confident enough in in what I do, you know, I know it works. Um, and now now it really is just a case of continuing to do that the process that I know works, if that makes sense. So, um, I I don't really I don't trade into intraday or anything. Um, I use end of day charts predominantly and the daytime I spend either working on myself and how I think about the market um and and reviewing what I've done uh particularly reviewing trades. That was always something that I've been quite big on. I've always had um two portfolios and one is the real one and the second one is one that I call discipline um and that is my makebelieve one that is if I had done the trades like I was supposed to have done and didn't do anything wrong that is where all the the gains are in there and that one incidentally is about 400% above the one that my real one um you know but that that's what keeps me going by looking in there it was okay you know that I can show show you trades from from several years or you know three or four years ago where I might have sold on a um on a dark day you know when I really shouldn't have done got scared out of a position and it ultimately went on to be a huge winner. Um I've got lots of charts like that and again with the word discipline written in the middle of them so that kind of keeps me focused.
>> Okay, I really like that. So you've got obviously your live account which has funded real money in it and then you've got how does that other portfolio work?
That's a That's a demo account. Is that right?
>> Well, it's you can um so I've got, you know, um several accounts with different brokers. Um and the chart package that I use um you can, you know, you can you can keep a keep tracks of your portfolio in there. So, um yeah, I've just got two portfolios in there and and like I said, one is is the real account and the second is is the discipline account. And um yeah, like I said, I really wish it was the discipline one that was the real one. But um you know, it keeps me, like I said, keeps me focused and keeps me every time I go to make an exit. I do kind of have a look through that chart and make sure that you know it is a valid exit. I'm not just doing it because of one some, you know, it's going down and I want that money. Um and you know, it needs to be the right exit.
It needs to be, you know, part of my strategy. Otherwise, I got to keep hold of it. That's what the plan says. The plan makes money. It's not me, it's the plan. So, you know, I've just got to stick to it.
>> Got it. Okay. So, it's a feature of the software. I really like that. That's such a a really good idea. I appreciate you sharing that with us. Um, now from the few things you've mentioned to me offline, um, I get the impression that repetition is a key ingredient to your development as a trader. So would you be able to shine some some light on the importance of repetition to you and how you continually go over and revisit material that you that you study over and over again?
>> Well, see I think with with the internet being how it is, Twitter in particular, there is so much on Twitter that is that is really good. Uh there's also so much on there that's that's utter nonsense.
So you really need to kind of have a kind of very very good noise filter. Um but I went into trading many years ago with a set of beliefs you know whatever they were aren't important now but and the same as you will and and anyone else who's listening has got their beliefs about the markets um about you know however they trade and when you read a book when you talk to someone you know whatever it is that you're ultimately you obviously you're gaining more information and your beliefs might change and I think that The repetition part is is is just kind of going back over everything that you've done. And whilst today you might, you know, whoever you've been chatting to or whatever you might read or watch on YouTube or whatever um might be conflicting to those beliefs, sometimes you need to just go back and look at everything you've done in the past and either discount what you've been told or does it add any value to your portfolio.
And and this is where like I said my discipline portfolio comes in because every day I look through it every morning. I just go through it when you know like I said I don't trade throughout the day. So I'm quite fortunate that I get a lot of hours to really just work on um my psychology and work on my um you know my strategy really um or just look through that portfolio and see what does what does a good what does a good entry look like?
What does a good exit look like? What does and and and deeper than that, what does a pullback look like? You know, when you it's all very it's quite easy, of course, when your portfolio sits at all time highs, but what does it look like when you've had a I don't know, a 10% draw down or something, you know, how does that look on um let's say on this um software package, you can it graphs your profits. So I like to look back go back and say what does my chart look like when I'm in a draw down and see it and then of course I fast forward it and I go okay so it looks like this now and when it picks up again it will look like this and so it kind of reassures me that the draw down isn't anything you know kind of um to worry about it's just part of the trading plan or you know part part of the trading process should I say and um and I think that that really helps or helps me anyway.
>> Okay sure that's really good. So let's um let's move this along and get into some discussion about mentorship and the impact it's had on your trading. So if you could start by telling us how you met your mentor and what actually motivated you in the first place to seek out a mentor.
So to start with it was um it was that I knew I was on to something with the with the with the the charting software and like I said seeing what I was seeing reading a few books um and I just didn't know how to put it all together. And that was when I was I was really just looking for for it's quite sounds quite sad actually but I was looking for someone to talk to. Um because I don't know any traders um you know I do now but but back then I didn't. I just had a ton of books, some information, some charting software, and you know, it was like it was just it was so much chaos that I was I was kind of, you know, I didn't I didn't know if I was if if what I knew was the right thing to know, if that makes any sense. I just, you know, if someone was there going, "Yeah, no, no, you're you're you're spot on there, but you should have a think about this, this is, and this or whatever, you know, it would have made things a lot easier instead of having to try and figure it out myself." So, I um I knew that what I was interested in was trend following.
So I I Googled it and um and found my mentor online um and I sent him an email and he um I think we spoke on the phone actually for for a long time and and you know I eventually he agreed to mentor me. He came down to see me um and he um he showed me his style. And this is probably where I'd say I made a mistake and probably um extended my learning period by a good six, seven or eight months or whatever because I immediately kind of threw out the window what I'd been working on and and adopted and tried to adopt his system. Um, and it was then that I kind of I I started tinkering around with things and that was when you know they say about you know you find a system that suits and and that was really what I wasn't doing.
Um, I was playing around with his system and so eventually I went back to what I was doing and this was where I found the mentorship invaluable was when I started explaining things to him like that and instead of him kind of telling me no you're you're you're doing it wrong he was he would ask other questions. So, let's say uh let's say he he traded a breakout and I happen to buy on pullbacks. That's my favorite strategy.
Um and instead of him saying, "Oh, well um you know that a pullback is is an is an exit signal, you know, in his strategy, but of course for me it was my entry." So, he would then ask, "Okay, so where do you define your risk? Where do you put your stop?" and he would ask questions like that that would actually get me thinking about my strategy as opposed to feeling that I needed to justify was why I wasn't using his if that makes sense. Um and that was that was kind of what I thought you know what what I think a mentor is actually really valuable. Yeah. Okay. So you mentioned that you found him online. Um how did you find him online? Did he have a website or a blog or and and was he offering mentorship or did you sort of approach him about this?
>> Yeah. So he um yeah he he ran a blog um and it was it was a paid mentorship um you know you you can you can follow his his signals if you wanted to. Um which I know a lot of people I know there's a lot of services out there that are like that. Um but and and I guess I guess to start with that was what I did. But it was when I met with him and spoke with him that he wasn't just selling he wasn't selling signals if that you know you you can do that. That's that's part of what he does. You know you could just copy what he does but that wasn't what I was about. I wasn't I was looking to become my own trader a trader, you know, with my own kind of set of beliefs and strategy etc. and and do it for myself.
He he would and you know with him sorry you you could uh you could um trade your own pension fund and and just you know copy his trades entry when he said you know he has a Twitter feed as well that you can enter um and that's what I think you know there's quite a lot of services on the internet that do but it was when it came to the mentorship he really really did go in help me out and help me understand what I was trying to achieve with my system and that and and you know that was when he kind of put his system aside and helped me develop mine and and you know asked me questions about it and then also you know um tell me things to consider. So you know maybe consider the risk part of it and you know that kind of thing really.
>> What's the kind of level of interaction between uh yourself and and your mentor?
Like is it sort of scheduled once a week that you have a Skype call or like how often do you guys communicate and how do you go about that?
Well, now we just now we just communicate, you know, via Twitter or or Skype or whatever just for, you know, kind of fun, just talk about the markets, emails or whatever. But during the um during the kind of the learning process all the time every, you know, um he has got a um a uh a protected Twitter feed that that you become part of. And there's a load of other traders on there as well. and he kind of, you know, you you'll all be tweeting throughout the day. Equally, he he used to ring constantly, you know, maybe once a week or whatever to kind of see how you're getting on, is there anything that he can help with um via email all the time.
Um and, you know, depending on where you are in the country, yeah, he would come and see you. He really was, you know, it was it was kind of he was being a mentor. It was it was unlimited. um you know it wasn't it wasn't a service that was kind of you know uh one email a day or whatever you genuinely did feel like you had someone on your side that was helping you out which I you know like I said I think that was good especially when you first start because you've got so many questions I mean I used to email him constantly um particularly on down days you know big you know let's say the the recent pullback in the markets you know that kind of thing years ago I would have got scared out of big Um, and you know, now you kind of on days like that you speak to him and it's almost like that little bit of reassurance actually. No, just just hold on because your strategy does cater for this kind of thing. You know, look at a chart. You wouldn't be able to tell when the Japanese earthquake hit or you know um you wouldn't be able to because of the trend has gone from bottom left to top right. It's incorporated all of that and you know it was on days like that that you kind of needed a mentor and that was what I found really good. You know it wasn't you you wouldn't ask a question and and have to wait four or five days for an answer you know it was like it was straight away really which is um which is a really good service.
>> Yeah that's that's really valuable and I mean pretty much most traders coming up need need someone like that um who can be there for them. So uh just maybe in sort of summary some of the highlights or standout points like what are some of the lessons that he's passed on to you which which really helped you to see things a lot clearer?
[snorts] Risk management more than anything um more than than um definitely definitely kind of not not entering too many trades at the same time. Um, so you know, he trades a shorter shorter system to me. Um, so you know, they're kind of not necessarily relevant to my system, but but for his, um, I would say, you know, he was he would teach you that, yeah, not to take too many trades on the same day because of, you know, we all know it can, you know, if you've got one or two, you you you know, you shouldn't enter uh four or five trades in one day. all of them are showing, you know, a loss, get and enter another three or four the next day, another three or four the next day, you know, that kind of thing. You need to kind of you need to stagger it. You need to kind of enter a couple, make sure that, you know, they're kind of they are making a profit. Um, and and you can kind of build up from there. Um, that was that was a big thing. You know, you don't have to you don't have to trade a lot. You really don't to make to make really good money. Um, you know, I think his his his blog, I haven't checked it, but it was something he's he's up something like 400% in in three or four years. So, you know, he's doing very very well. And he doesn't he he's he's been sat out the market for the last four weeks, I think. And it's things like that that that is absolutely invaluable to kind of realize that you you don't have to trade every day at all to make really good money. And, you know, you combine that with with the right risk. Um, and like I said, you you've got a very profitable system. The other thing was um was understanding that actually you don't need to you don't need to risk a lot of money to make a lot either. You know, he risks 2% which is actually quite high in you know I think but 2% of your account isn't isn't a lot and yet this is a guy like I said who was making 400% and risking 2% you know on each trade. So it that that again was important. But the main thing was this was the psychology was um you know was was was teaching teaching you to probably have faith in your system more than anything. Um you know you know that you know your system works. Of course that gets into a whole other topic about you know system testing and all that kind of thing but we probably won't go there. But um you know, you know, your system works. So, you just need to have faith in um in what you're doing. And like I said, go back to the dark days when the market's down day after day after day. And you really, you know, you're probably then thinking, well, this system doesn't really work. I might one I might go short, but you know, it's short in an uptrend is a silly thing to do. Um and the other thing is is well, does the system really work? has it stopped working? There's all these things, you know, trading is full of kind of um kind of things that kind of counteract, you know, kind of um yeah, counteract that like arguments, but um you know, it's days like that that he would then reassure you a bit more um in the early period. And like I said, that I think is really really important.
>> Absolutely. Yeah, that's all that's all really great. So yeah, thanks a lot for sharing that, Chris.
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>> Now, I'd like to steer the conversation in the direction of your style of trading and sort of your methodology.
we've kind of talked about a little bit, but just um maybe give us an overview of your actual approach to trading.
>> Okay. So, my probably my routine is the easiest thing to describe is that I I don't use scans. Um I I I I just don't I think that that's probably come from the early days of just looking at charts and trying to figure things, you know, try and see things. Um, but in in the UK, you know, the Footsie 350 is 350 stocks, so that's not really a huge amount of stocks to look through. Um, so I don't use scans. I look through all of those at least once a day, sometimes three or four times. Um, and that gives you that to me that gives me an overall state of the market. You know, you'll be able to see off that. Uh, for example, are a lot of stocks consolidating? Are a lot of stocks selling off? Are a lot of stocks breaking out? Are they breaking out and failing? Are they pulling back and giving a lot of reversal signals? You know, so that kind of I think gives you a very good understanding of what's going on in the market. Um, and then I would uh plot support and resistance on um on charts. And obviously, you know, you could then combine that with kind of, I guess, like a Darvis box method or whatever, but um, you know, I don't draw the boxes, but you can see support and resistance if it's getting higher, you know, like a ladder or whatever. That that's, you know, the start of a trend.
Um, I've got plotted on the charts the 50, 100, and 200 day moving average. Um, and I wouldn't use those for an entry, but obvious you can then that gives you a feel for the stock. And every stock I think is different. Um you know they have a different buying and selling pattern. Some stocks don't pay any attention to moving averages at all but they do pay attention to support and resistance. So therefore that gives you a good place to either enter also gives you a good place to exit. Um, some stocks do absolutely hug the 50-day moving average and as soon as it closes below that and you know maybe two days in a row the the kind of um character of that stock has changed and that then would be an exit signal and and some stocks don't pay attention to anything um and you know that for that I may just have like a volatility stock uh stops so you know like a 480R um but ultimately I buy on pullbacks um I I look for things that are already in trend Um, and I enter on a pullback, but the pullback must be to an obvious place.
So, like I said, it must be a moving average um or, you know, a support line.
And then ultimately, I like to uh see a kind of reversal candle in there. Um, just something to it that shows me, you know, my favorite ones are kind of a really nice spike down with um with a bit of volume on it. I don't I don't really trade volume, but you know, that's kind of a pretty good um kind of pattern for me. Um and that then gives me a good place to enter, shows me that buyers are stepping in. Um and it gives me a good place to put my stop. So, I kind of get all the things that I need out of that and then I just, like I say, ride it up and, you know, hopefully hold it for a long time. Ultimately though, if if it closes below, you know, that entry point, I'll uh I'll sell it very very quickly.
So, so you said there hold it for a long time. What would your average sort of generally speaking holding time be for a position?
Um, well, hopefully months. Um, you know, that my big winners I've held all through the recent crisis and most of them are back at alltime highs. Um, I think I find with with trend following particularly on stocks, I don't I don't really know about forex and futures markets. I mean, I know what they are, but I just I've never traded them. Um, so I can't really comment on the characteristics of those markets. Um, but but particularly in stocks when they go wrong, they go wrong very very quickly. You know, kind of staircase up, elevator down all the time. So, you got to be prepared for that. But you you find that if if you enter on a pullback, it will very quickly tell you if you're wrong, like possibly even the next day.
Um, so, you know, you need to be prepared to exit very quickly. Um, but then it's just a case of holding and then I would tend to add on the next pullback. Um, and and the next one and the next one and the next one, you know, and and hopefully like my biggest winner is is maybe 14 months old at the moment and and luckily it's showing no signs of backing down at the moment.
>> Nice one. That's really good.
So before sort of adapting this, I don't know if you'd call it a a swing trading sort of methodology or it's sort of borderline position trading if you're holding for a number of months, I guess you could say. But did you ever attempt to trade intraday like day trading?
>> Yes. Yes. And um and it it nearly drove mental it I couldn't believe what I was experiencing. Um, I certainly believe that you've got a um a mental capacity, an emotional capacity, and you know, whatever you want to call it, 100% or whatever. And I just couldn't make that many decisions in in that in that day, and let alone do it 5 days a week. I really would love to go and sit in a day trader's office and see how they do it.
But, um, I was, you know, I I I saw there was something in pivot points. Um, and I I tried to do it and I just couldn't. It really kind of um it really messed me up in my head really. You know, I'm in a very good place um psychologically and and I I like trading end of day data. I like seeing um you know, I've mentioned before about breakouts, you know, I think breakouts that they break out in the first hour of the day. I'm a bit dubious of them, but if you see something that's held on to its gains throughout the day, I think that's a solid solid entry. And I was trying to do that but intraday on a 5minute chart and you know I really I really couldn't um I couldn't make I couldn't make that many decisions. I couldn't enter ex exit with a loss enter exit with a loss enter exit with a loss.
You know you get the pattern there and and then get two or three winners throughout the day and have to do that 10 times a day. And I'm sure that people day traders can tell me they don't trade that much but this was what I was trying to do and and I tried it for for a couple of months and like I said I just couldn't do it. It really it really made me mentally tired. Um, and so I had to be more long-term. And that that goes back to finding a system that suits you.
You know, I'm sure you've had people on this show that that they would think about how I trade um and and think I'm crazy. Um, you know, I I don't have to look at the markets throughout the day if I don't want to. You know, I just do it because I enjoy them. I I really can make all my decisions based off end of day data. Um, and the rest of the time I, you know, particularly in the last few weeks when it's been, you know, news has been, you know, the market's been kind of headline driven, I've just turned everything off and and come back at the end of the day and seen which stocks have held up and which I've had to sell. Um, and and I couldn't do that through with day trading.
>> Yeah, I mean that's that's a fair enough point, too. So, you've mentioned a couple times or a few times throughout this interview that um the word system.
So just so we we understand how systematic is your trading.
>> Okay. Yeah. So yeah, system is in um nothing is nothing is is um let's say robotic. Um it's certainly not um every every stock that does this I must enter here. Every stock that does this I must you know um exit here. This is it's completely discretionary. So I I do uh you know I stalk a number of stocks that that are in uptrends. Some of them are sloppy uptrends. Um, you know, but but I look for those periods of kind of exhaustion with um on a pullback. Um, I do trade breakouts occasionally. Um, but I've I'm more successful trading pullbacks. And the only thing that is I would say um, systematic, but I guess that's to the point where I absolutely will exit is is when you know my stop is hit. um and and that will be decided before I enter. So, like I said, there there there's one stock recently that I was in that that um hug the 50-day moving average. Um so, the easiest place to put the stock is below the 50-day moving average, a close below it, or if it was um this is where the discretion comes in. So if it closes below it and it closes on a you know a pretty big candle or it closes on um it closes at the bottom of the range for the day then I would just exit straight away. If for example during the day it's um put in um you know there was kind of a wick on the end um I might say okay well I'm going to exit as soon as it goes below that wick. So that kind of you know in case a market maker has been pushing it around for whatever reason because of course I'm not the only person looking at this stock. There is a lot of people that would notice that the 50-day moving average doesn't get breached a lot. So, it's a very easy way to put your easy place, sorry, to put your put your stop and they just try to make sure that I'm not one of the weak ones that gets pushed out and then obviously it motors on ahead, which has happened before. Um, equally, like I said, if it's support and resistance, then um, you know, that's that's my exit. I'll know when I'll decide that before I get in. So that's probably the part that is um let's say if there isn't you know systematic um but like I said ultimately it is discretion but there is one thing that I would point out on that is that um as much as it's discretion and I have just commented then about sometimes I might look at my exit there's no way I don't hold I don't hold a losing trade.
So I wouldn't, you know, there is kind of scope there to interpret that as um oh well he he might, you know, a stock might have dropped um to to whatever price level and he might be um in denial about it. That's absolutely not what I'm saying at all. I'm just saying that occasionally, you know, they go back to Edot, you know, follow your rules, know when to break your rules, that kind of thing. you know, it's um it's it's just a process that I know works for me, but there is no way that I would hold a losing stock um if it's gone past my exit.
>> For sure. Okay. So, uh how do I say? So, how did you how did you know or maybe I should say when did you know with a reasonable amount of confidence that you'd found an edge that what you were trading actually worked?
like when was the point when you were comfortable with that approach?
>> Well, my account value really it was, you know, I I track my equity curve um and and it goes from bottom left to top right. That doesn't mean that there there are some, you know, um drastic pullbacks in that, but you know, I could show you over the years you can see they've got less and less. So, you know, ultimately it's money is is the way that um you know that that will show that will tell you when you're when you're right. I think I know that my system makes money. Um now I know that you know everyone else you've had on your show, their system makes money. I'm not you know there is there is no holy grail in that sense. So it's really just about finding a system that works. Now I could probably find one that makes more um but do I don't really want to. You know, you can obviously once you found your system and you obviously you you plot in your numbers, um you know what your um let's say you know what your winning percentage is or you know what your payoff ratio is or whatever, you know, you can then adapt your money management to kind of fit your your bigger, you know, your longer term goals. But ultimately, it was that I was um looking at um at my equity curve and see it and see it rising. The other thing that was probably let's say one of the the the real kind of um again like aha moments was um I started off with a system and I tinkered about for a while. I um I I tried a bit of you know try the day trading thing or whatever and and and tried a few other strategies. Um and one day I just sat down and was just frustrated and and and a bit like you know how's this how's this happening?
you know, you're meanwhile my mentor has gone on and made a ton of money and I'm sat there with a lot less than than he's made um or you know, in terms of percentage returns or whatever. So, what have I done wrong? And that's when, like I said, the psychology side really kind of kicks in because it's not the strategies, okay, there there's people out there that that can trade pivot point strategies. There's people out there that can swing trade, day trade, um you know, they can fundamentally invest and make money. You know that.
So, so everyone can there is strategies out there for everyone. It was when I kind of went through my original strategy and um looked at the initial trades and realized if I'd have carried on doing what I was doing, I would have made more than 80% more than I'd made that year, if that makes sense. It was then that I was actually like, okay, there's something in this. So, what is it that I'm doing wrong? And that was, you know, it was probably, you know, the end of the beginner cycle was when I realized actually it's really not about the system. What makes you successful as a trader is is is um is probably learning about your mindset and um you know, how you how you deal with your system, if that makes sense. So, for example, you know, on a on a pullback, you don't or or a down, you know, a draw down in your equity, you don't kind of jump ship and look for the next best thing. And it's really then that you, you know, you you then start to think, well, okay, so I'm in a draw down at the moment. So, what should I do? Okay, so on one hand, you can go, ah, you know what, the system's rubbish. It's not working. I'm going to find something new that does work. That's you go back to the beginning again. or you you kind of grow up and look at it from a a um you know the kind of let's say a professional trader point of view and go okay is it the system does the system work yes okay the system does work because it's made money in the past what doesn't work at the moment is it the market conditions and you go yes or is it maybe I'm taking on too many trades you know and and you kind of you start looking at that and that I think is when you make a jump from kind of beginner to let's say more professional style of trading, you're just working on that constantly instead of going back and thinking about a whole new strategy.
>> So, what were the certain aspects of your sort of psychology issues that you had to work through that were preventing you from sort of making potentially 80% more that year? Like, how did you like psychology? I guess it's kind of quite a broad topic, but how were you able to sort of pinpoint what it was and then sort of focus your attention on that to be able to resolve your those psychology issues that were preventing you from from making a lot less money? To start with, it was driven by frustration.
um you know that every I'm sure that everyone must get to a point um you know there is a there's one of the um the guys in market wizards book and have to forgive me I can't remember his name said you know there was a day when he lost a ton of money and turned around and said something you know along the lines of what am I this stupid and this is no you just got to keep going and that that really is kind of part of it you know you you need to I needed to Um, I sorry, I knew that the systems were were were making money, but I just wasn't implementing them right. I wasn't I wasn't kind of I wasn't doing the right thing. And that was the bit that was frustrating. Why? What am I doing wrong? And that was like I said, you then start kind of um self-reflecting and really kind of looking well if this you know that that system makes money.
You know there's let's say um let's say one of these subscription services on the internet where you can buy you know you can sign up to it and they give you the entry and the exit signals. Well, they make money at you know they probably make money as a trader. You could get those same signals and not make money because you know you might you might do something wrong. It might be obviously, you know, your risk management and that kind of thing.
Equally, it might be you might try and preempt the exit signal. You might preempt the entry signal. And that's nothing wrong with the strategy.
Although, when you begin when you first start out, you'll blame that strategy.
That's down to you. That's your own fault. And I think it was um you know in again it's from another book that that I you know I apologize to anyone that has written these and I'm not quot you know referencing them but um where he says about you've got to take responsibility for everything you do and you can do this in everyday life and this is kind of I think something that I tried to do a few years ago where every situation that goes on is your fault and and it's quite a big thing to say that but everything that happens Let's say your your your your your partner comes in from work and she's in a bad mood and she she lashes out at you. How's that your fault? And you you constantly find a way that is um you know you start then looking at yourself a lot uh kind of uh a lot more in detail and particularly with your trading you know kind of why is this strategy why does it make money um you know in back testing why does it why does it not make money now what am I doing wrong and that's when you can be honest with yourself that I believe is when you're kind of um you make a massive leap in the right direction and you it's It's quite hard to do. Not a lot of people like being honest about themselves. You know, I could probably list a lot of things that I know are wrong with me. Um, one is I'm very impulsive. Um, I've got an addictive personality. Um, and these things, one that probably gambling is not a very good thing for me. Um, day trading, this is when I realized actually this isn't this isn't good because I get impulsive.
I make the wrong decisions. I jump into trades quickly and and realize I've done the wrong thing. And that goes totally against my psych, you know, the way that I am. So therefore, I need to adapt my system to fit me, which is why I don't like looking at um I don't like looking at the markets throughout the day because if I get a, you know, I might get a rush or I might, you know, kind of I might lose discipline. Whereas it's much easier for me to sit down in the evenings, look through thousands of, you know, less say 500 charts a night and just make a decision. whilst the markets are shut, you know, I'll I'll I'll make a little short list of of what I'm what I think I want to, you know, enter or want to watch. I might have another little look later on in the evening.
I'll have another look in the morning and if it still looks good, then I'll buy it. Equally, there have been times where, you know, you get a bit giddy because your portfolio's up and you think, "Yeah, I'm going to buy that. I'm going to buy that." You look at it next day and you're like, "Well, actually, it's kind of invalid. That's not the right entry." And you sit back and you'll wait. But it's only understanding that I've got that side to me that I'm able to then adapt my strategy to fit, you know, kind of my um the bits that I would consider pretty crap about my personality. [cough and clears throat] >> Sure. Yeah. No, that's um that's a lot of great points there that you touched on. So, I really appreciate that. Um, we should probably start to wind things down, Chris. But, um, let me ask you, is there a a resource or um a book or video or anything you'd like to recommend to listeners to check out if they'd like to dive deeper into sort of understanding the psychology of um, professional trading?
>> Yeah. Yeah. I mean, there's um, firstly, just keep rereading books that that everyone else mentions. Um I think I've kind of touched briefly in the past with you about this that that things like um reminiscence of stock operator you know market wizards etc. There's a you know I've read um reminiscences over a hundred times now and each time I hear something new in it and you know um the reason is that there is pearls of wisdom in all of this depending you know on on different parts of your trading journey.
So, Reminiscences to start with is a really nice story about a guy that likes trading and makes a ton of money. That's the that's the nice story that you hear at the beginning. Then you hear about um you know, you might hear a part of his strategy the second time you read it.
The second time you might hear about how he blew an account up but he kept going.
So, you know, you might have blown up an account recently and you think, "Ah, okay, well, he's done that. I've just got to keep going." And ultimately, you just keep kind of, you know, every time you hear it, depending on what part of your journey you're on, you'll hear something new and relevant to what you're experiencing at that time, which is why I think those books are absolutely fantastic. The second was um a a YouTube video that um Nick Raj put up called what makes a successful trader. I think it was a presentation he gave um and he talks about two the two kind of facets of trading kind of quantitative that's easy for me to say and qualitative um which is basically your strategy um you know uh he gives the best thing is he gives analogy of a car so the quantitative side would be driving the car you know put your foot on the gas put your foot on the brake to stop turn left turn right that kind of thing but the qualitative side is learning about the roads, learning about, you know, you get those idiot drivers that that are indicating to go left when you you get that feeling actually they're going a bit fast to do that. So, you don't pull out, you just hold back and ultimately they weren't going left. They just left their indicator on. And that's what I think is kind of what trading is about. You kind of learn those two parts. You learn, you know, how to trade and then you learn about everyone else around you in the markets. and and that um that video is very very good at describing it, but you have to watch it a lot to really kind of get all the points out of it. And again, you know, I've watched it, you know, loads and loads of times. And like I said, you kind of once you realize that those two parts exist, you can work on one, which is your strategy, but then you should probably look at the other parts. What does it mean to you and how do how does that affect your trading? And like I said, that was kind of a big thing for me.
>> Yeah, that's a that's a really good video, that one. I've watched that myself. And obviously Nick Raj was on this podcast in the past. So if anyone wants to hear uh an interview with Nick, um check out episode number four. But all right, Chris. Well, this has been really, really good and I appreciate you um making the time today to come on and speak to speak to me and share with myself and also the listeners just a lot of really valuable information. and it's been it's been awesome. So, thank you very much.
>> No problem.
>> And is there any way that listeners can get in touch with you um if they'd like to sort of learn more about you or just sort of reach out?
>> Yeah. Yeah, you can you can email me. Um so, yeah, it's I guess put it in the show notes, but it's uh it's chris 1983.com.
Um yeah, and that's that that's that's a good way to reach me really.
>> All right. Sure, no trouble. We'll put that in the show notes and um yeah, if anyone wants to to get in touch, they can just shoot you an email. But again, Chris, thank you very much for doing this and um take care and let's talk soon.
>> Yeah, no problem.
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[music] Hey traders, what's up? What's going on?
Hope you've been having an awesome week.
I've got an interesting guest lined up on the show for us today. And he takes a slightly longer term approach compared to many of the guests I've had on in the past, but I think it's great to mix things up. Uh he's a young guy. He's doing big things and he's got a great story to tell. So, let me give you the thousand foot view of where he's come from and where he's going. So, Michael Malisinos started a job on Wall Street about 6 months before the '08 crash came through. So he was right there in the thick of it. He was actually an analyst on the trading desk at Bear Sterns and then later at JP Morgan after they were brought out. I'm sure you're all familiar with that story. Uh since then, Michael's left his Wall Street days behind him and now trades a fund of his own using a systematic trend following approach that operates on 40 global futures markets. While I missed a large chunk of the story there, you'll hear how Michael got to the stage of his career during the interview. as well as a few of the lessons that shaped him into the trader he is today, including the advice he received from market wizard Ed Sakoda. I also like Michael's thoughts around why you should consider playing a game that's larger than money and the emphasis he places on preparation is really great. Also, all right guys, you know the drill. I'm your host Aaron Firefield. This is Chat with Traders and here is this week's guest, Michael Melisinos.
Hey Michael, what's up man? welcome to the podcast.
>> Hey, thank you for having me.
>> No trouble at all. Thanks a lot for putting aside some time this morning to um you know, come on and be open for an interview. It's really good to have you on.
>> Yeah. Well, it's 6:07 a.m. here in uh in New Jersey, so uh not a lot of people are up right now. I'm probably the only person up on my block. Um but yeah.
>> Nice. Is that how you roll every morning? Up nice and early. Uh yeah, because you know I I I was actually dealing with this problem yesterday. Um you know because uh I was telling you before off the podcast that we're we just we recently bought a beach house, my fiance and I and you know we're doing a lot of work around the house and we still have a lot of chores and my fiance is typea gogetter. She wants it done. She doesn't want things lingering. She loves to-do lists, doing them ASAP, and she's got me doing chores all the time. And I'm like, I need to do work, you know, like, you know, cuz the the day the day rolls on and there's just more and more stuff to do. It gives her more time to think about more stuff to do. I'm like, "Oh my god." You know, putting her bike together, doing the fence, doing this, doing that.
>> Never enough hours in the day.
>> Never enough. So getting up early and you know before she gets up uh is good.
Um so this is you know we have our we have our our sanctuary right now our time to talk about whatever we want.
>> Good stuff. Well I'm glad you could fit this in. So we've definitely got plenty to plenty to talk about. So, let's just get into it and let let's get this started by telling us about um how you originally got involved in trading and perhaps even further back than that, what were you doing before this time?
[snorts] Uh yes, so I uh I graduated from college in ' 06, started work in early ' 07, and I started in public accounting. So, and that's what I majored in college. So, I wasn't I wasn't entering the workforce with any kind of trading job or any kind of trading uh I [snorts] don't know uh experience or background of any kind. Didn't even intern with any banks or funds or anything like that. But I a couple of my uncles or you know went through Wall Street long time still in it as well. And just coming from a sports background my entire life I you know had always interested in just competing at something getting good at something. And after a while [clears throat] in the accounting job that wasn't really fulfilling that uh that urge in me. So you know I started reading just you know in in in uh in public accounting you know you have your busy season. I'm sure everyone knows an accountant they have a busy season. it starts to die down probably in June. Um, you know, at least for me it did. So, from June through the summer and then into the early fall is when I really started to read a lot. Um, especially on the commute back and forth uh from Jersey to New York. I was working in New York, so I had about like an hour commute every day on the train.
So, I would do a lot of reading then and at work during the off months I was reading a lot during the day. Um, and it just became, you know, I stumbled across, you know, a lot of different blogs, a lot of different opinions, different this, different that. And and the one that, you know, stuck with me the most was was this trend following style. And and it kind of just made sense to me.
And uh I was actually on Michael Kovll's uh podcast maybe like a month or so ago and I told him, you know, when I read his first book, the trend following book, uh I think it was his first book that came out in '05 and I read it in ' 07. Um I said I slammed it shut at a few points in that book. I was like this is dude there's just no way he because he makes it sound so easy, you know? He makes it sound like so simple. So this and you know what it pretty it it is simple um you know at least the concepts are and I think the concepts you know parallel and may and and um have a lot in common with what happens in the natural world anyway you know this um you know the ideas of of diversification you know spread yourself out don't limit yourself to one type of to to profit from one one market you know uh and then you know buy and hold to comparing it to buy and holds case.
Don't limit yourself to profiting to just making money one way. Be open to going short as well. Be open to staying out sometimes. Um and then any other ideas of, you know, when you have a good thing going, let it let it keep let it let it roll. You know, you're sticking with it. Uh if it doesn't work, you know, protect yourself and get the hell out of there. Um so all those things were, you know, made sense to me just in general. And and then I thought I was like, "Oh, okay." You know, now I have something that maybe I can actually try to get good at, try to get better at cuz now I know, you know, a strategy to uh to play with, you know, and you know, before that, what was I going to become?
Like a day trader, you know, that's like the only other strategy I knew of or that or um like a fundamental thing. And that didn't appeal to me either because that just seemed like a whole, you know, a whole lot of work with not a whole lot of certainty. And um and I saw a lot of people going that way for a long time and and losing a lot of money especially in the uh in the bare markets like of 2001 and I was in high school at the time and then uh I guess before that when the um you know like a year or so before that when like the bubble uh the NASDAQ bubble was bursting and then um you know so I that didn't really spark anything in me. Um, but this this trend trading thing started to make some sense to me and start to get the juices flowing, so to speak. So, I started running with that and eventually had some, you know, light bulbs go off and then I started getting so bored being at the accounting job that I asked my friend who I grew up with who was working at Bear Sterns at the time. I said, "Look, dude, get me in there. Come on. I I gotta get off I gotta get off the bench, so to speak. I get I gotta get in the game. And you know, I I didn't think I was going to become a trend follower at Bear Sterns, but you know, this trend following ideas like, "Oh, maybe I can start a fund." That was like in the back of my head. And then when the opportunity for to work at Bear came along, I kind of put the trend following thing on hold. I was like, "Oh, okay. I'm going to become like a, you know, a Wall Street guy and then um work at the trading desk one day." and uh hopefully soon and then all will be good and I won't have to worry about this other thing. It'll just be like a just something that passed the time this trend following you know thing. Um, so yeah, I think, you know, I think when I went to bear in in October07, um, I, you know, I was working a lot, so I got up at, you know, 5:30 today. You know, back at that job, I was getting up at 4:30. I was in work at 5. So I and I was home at like 8 every day. Um so I didn't have time to read or do anything relative to any you know you know trend following strategy uh um construction or that to uh to um you know one day become a uh a fund manager or anything. I was just doing my job cuz it took it took a lot of hours to do. So um yeah and then you know I guess I guess throughout the you know 6 months later after I started working at Bear it collapsed. Um, so that was a big eye opening experience for me. And then, you know, the team I was on went over uh and started working for JP Morgan, just doing the same job at JP Morgan. And you the hours are still insane, but the middle of the day wasn't as intense as it was. So, I started reading again. Um, and then I started to get more serious. But those two events, the bear collapse and the financial crisis, and they really opened my eyes. And you know, those people talk about aha moments. Those are two big aha moments that really put me on the path that where I said, "Okay, I can't work anymore. I need to go and do my own thing." because I thought this way, you know, I was going to be, you know, I thought I had it made pretty much going to bear. It was a good company and everything and um good culture and I thought, okay, I'm just going to, you know, just put my time here and I'm going to be a big shot, you know, trader on the desk one day and all is going to be good until it goes down. I mean, the company goes down.
Didn't even I didn't get laid off or anything. the company disappeared and that was just like oh my god and then half of Wall Street disappeared uh you know several months later. So those were just, you know, blessing in disguises for me. um because now I had [clears throat] the opportunity to actually do what I wanted to do, you know, in the back of it and at that point it was just in the back of my head, but it was really a drive at that point because I saw it's not, you know, my job and the Wall Street um uh you know, vision of being a big shot or you know, it being like a good job just wasn't so anymore. The whole game was changed. You know, it it now it wasn't a safe thing. And now I saw that.
So I saw a lot of my colleagues lose a ton of money, lose their jobs, um, and all the retire, you know, a lot of their retirement money if it was in bare stock or anything like this. And I said, "Look, this is not going to be me." And at the time I was 23, 24 years old. So I was still very young and stupid and impressionable, I guess. And that kind of woke me up and made me grow up pretty fast. So during the off months and you know the transition period uh from Bear to JP and then um and then even working at JP it was just less intense you know than my first 6 months at Bear you know after everything got everything after everything collapsed and then you know the financial crisis hit uh things just got less intense people were kind of just shaken up and um I I say didn't work as hard uh That's that's not true.
But just just kind of like dazed like they just got punched and knocked out and then they're like stumbling to get to their feet. So people were just I don't know.
I don't know. The the workload just died. So I was just spending a lot of time doing more reading and like okay getting into phase two of taking the path to become a fund manager one day.
And that's what I was that's what I was doing through you know Bears collapsed through you know January09 and then um then eventually got laid off from JP Morgan you know the team I was on got laid off and um then I you know went to phase three you know because I had no job at that point and I was devoting all my time to uh to um you know getting into the Excel getting into like the the X's and O's of creating a system not just reading about the theory of [clears throat] stuff.
>> Yeah. No, that's that's really good.
Thanks for really um fleshing that out for us. But being so young, just having entered Wall Street, you were probably only, you know, there for 6 months to a year before things started to unfold and the crash came through, did it ever cross your mind that maybe you'd entered the wrong industry and and this wasn't going to um be >> Yeah. Yeah. eventually uh but not at first. Um at first I was just so preoccupied what was with what was going on. I didn't really think at all. And it was only until after I got out of it that I started thinking that and was starting to read, you know, a lot of entrepreneurial blogs and books and other things that, you know, watching a lot of videos of these upand cominging like startup entrepreneurs because at that point it was starting to, you know, it there was no real startup scene then like like there is now. like now it's it's like booming, right? Uh Silicon Valley is booming. Um and uh yeah, I guess maybe other um other less uh [sighs] less intense Silicon Valleys out there.
Um maybe in Europe and you other parts of the US, but you it wasn't that big back then, but it was starting to, you know, come out of the, you know, come out of that bare market um into what it is now, which is a bull. you know, I I I was just reading and and getting getting um some exposure to other entrepreneurs outside of Wall Street and then and then reading more about the trend following trader types, you know, reading and and going on their sites, you know, the funds that were that were around that are still around. But but then also, you know, getting to Ed's Dakota site, you know, checking out his stuff and I entered one of one of their um one of Ed's uh uh trading tribes in New York and, you know, just taking the next steps to get, you know, to get in the game, to get good enough to be able to play. you know, at that point I was still just learning, but um uh I was taking the next step from learning from the people that were doing it and and hearing what they had to say cuz I mean, as a you know, as an athlete, you want to learn from the guys that can actually play. You know, you're not going to take hitting, you know, in baseball, you're not going to take hitting lessons from, you know, a guy who never played the game before, right?
you you take it from a from a guy who who's done it and done it with success for a long time. So, uh [snorts] that's what I started to do.
I started to get started to get some, you know, some facetime with the uh with the actual traders and then other entrepreneurs in other in other industries. And yeah, then then I started to believe that, okay, I'm starting to see the big shift here. Wall Street's not going to be the place to be for a long time and maybe it was this is a blessing. And I I probably had that thought, you know, at some point during the winter of09 when I was, you know, trying to look for jobs or something and just just in my apartment reading and, you know, uh in New York, it's pretty gloomy during those months. So that was kind of a uh maybe a bright spot in one of the dark uh dreary winters in of New York.
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>> You briefly mentioned um Ed, and you're referring to Ed Sakakota. Um, and I don't want to brush over that because he's a he's a really big name. Um, you know, he plays the big game. So, I'm curious to know like how did you actually get in contact um with Ed? Um, what what was his tribe, his trading tribe actually like and what was some of the things that he actually really helped you with?
So he, you know, before um you know, Ed to me is a rare combination of very advanced uh technically and very advanced psychologically. Um he seems to understand both games pretty well. you know, from being, you know, him being an engineer, he's and and engineers in general, they're very advanced, you know, mathematically, science, they they they get that uh that's their strong point. and they're not so strong with you know social skills and and understanding you know uh behavioral dynamics because you know let's I mean let's face it a lot of a lot of engineers like even like accountants uh too uh and maybe some other jobs they're just they're good with being they're good with just doing their job and they're not so good talking about it you know they're like socially awkward you know or some of them can be. So he's not that though. He he to me um because he shares a lot of his information, a lot of his a lot of his knowledge about things. Um, you know, I that, you know, I attracted to that quick because I mean, and he on some level reminds me of my father cuz he's a very Ed's a very tough man to talk to cuz he calls you out on your nonsense really fast. And you know he um you know reading on his site and then and then um and then getting to one of his tribes um you know reading on the site about the theory about the feelings that that we're unwilling to feel you know so the feelings that we don't like kind of run our lives and I was like what the heck does that mean? I don't even know what that means. And you know at that time I first came into him like yeah probably around 24 25. So, I was still pretty stupid at the time. And um I didn't know what that meant. And then you started getting into more of his uh his FAQ on his site, which is where people submit, you know, their stories and write whatever they write into him. and he responds and you know half the time he's being a wise ass in his responses and the other times he's being pretty helpful and explaining what the tribe is all about. What's the whole process? You know what what's the whole intention of of it? You know, how is it aimed to help people out? And you know, at its core, it's really just to help people push through their push through their issues to get to a, you know, a right liihood, which is basically, you know, you do what you like to do and you do it, you know, you serve other people and yeah, you you maintain your health and, you know, you you get good at what what your craft is. And when I started in one of his tribes, you know, initially it was was a little weird. It was uh you know, a lot of guys, you know, in in our tribe, it was a lot of guys in the in the financial space, which is not always the case in other tribes. Some people don't aren't in finance at all. And there's a lot of guys talking about and then you know first talking about their feelings and and then you know he has this process called the hot seat where you get into you know some real intense feeling that you have that's that's that you want to change. you you want to change the um your you want to change from a medicinal response to a proactive response. So in the case of trading, you know, you get people that don't like to lose money, right? What are they? And so they they medicated it by, you know, in some cases not having, you know, not looking at it, you know, they don't open their statements or they don't take the they don't sell it out. You know, if they're long a stock or something and and it starts to go against them, they don't sell it. So they don't have to feel the actual loss. They could just hope hold on and hope that it returns to a more profitable, you know, position one day.
So these are all non proactive responses with dealing with the loss that is true.
It's, you know, it's happening whether or not you like it or not, it's happening. So you can either deal with it uh responsibly, proactively, or you can medicate it by not feeling it. And this is what a lot of people do, you know, in their lives outside of trading as well. Um, you know, same thing when they if they break up with a a boyfriend or a girlfriend, what do they what do they do? They don't they don't go to the drawing board assessing their behaviors and oh what did I do that really you know made this um relationship you know tumble and and end they'll say oh they'll blame they blame other people they they they'll go watch a movie they'll console a friend an enabler who tells them it's going to be all right it's you know it wasn't your fault or or they'll go you know on a worst case they'll go you know do drugs or drink alcohol or, you know, indulge in some unhealthy food or something to make the feeling go away, you know, and to, you know, justify people justify themselves and, you know, what happened. It wasn't their fault and all things like that.
So, you know, that's what the tribe is all about cuz it's getting it helps you in a group setting. You know, Ed believes that the a group setting is better than trying to do it yourself or or you know, it it may offer a better way to just than going to a um uh a psychologist or psychiatrist or something because you don't get to learn from the doctor doing it. In tribe, you get to see everyone work and everyone working on their own issues. So that that he believes um you know is a better atmosphere to learn from cuz you get to see other people doing it too. People get to learn and set examples for others and uh that you know that that helped me you know eventually you know push through the fear of you know starting my own fund. You know I was just I was scared. I didn't think I could do it. I mean, I knew I could do it, but I was afraid, you know, what my parents gonna think, you know, like I'm I'm an only child, so I get a lot of questions and I get I get all the attention. So, I I was just nervous about dealing with that. My parents, they're, you know, they're they're um you know, slow and steady people that have been at the same type of job forever, and this is not something that they're used to. You know, they're they don't know. They don't know what starting your own business is like and the risks about that. They just think it it's risky because it's, you know, you need to have a job. That's that's the way to go. So all these feelings that I had come up, you know, the tribe helped me out and learning the things from Ed um more more on this on the psychological portion of the game really helped me um you know, pull the trigger eventually pull the trigger and and deal with feelings um uh that were previously standing in my way. deal with them proactively and and take a take a you know a more go-getter approach to it rather than just sitting back and maybe they'll go away or you know, you know, distracting myself somehow. But, you know, then like a side note to that, you know, outside of trading, all these things help me in my life as well. And um can't say enough about that because my life in general changed um after after um you know first being introduced to to Ed's uh FAQ site and and and then the getting into the tribe as well. Um, you know, a lot of people like to, you know, Ed Ed seems to have like a cult following as far as like, oh, you know, he was the guy who, you know, made, if you read Market Wizards, you know, couple hundred thousand of percent over 10 to 15 years or whatever it was, he gets a lot of attention that way. But, you know, for those traders out there that that, you know, think that's really cool or whatever because he makes a lot of money um or he did or something, you know, that's all great, but I'm telling you, I think there's more to learn from him on the on the psychological game side because, you know, I don't know, making money is cool, but making money and having good relationships and having a stressfree free life and living a life that is fulfilling is much cooler. Um, a lot of guys out there with a lot of money who are just miserable dudes and they have awful lives. So to those young guys, look, it's not all about the money, you know, and it may be a weird thing, you know, you know, a trader saying that because the job is all about money, but um or that's the only thing we make, you know, we don't create anything else, but you can create um a life you'd like and you know, work with people that you like um and serve them well um by uh you know, getting your own issues straightened out. Um, you know, rather than just looking for the best system out there and emailing Ed and guys like him like, "Oh, what's your system?" or "Teach me, teach me the system so I can go become a a big shot." You know, that's, you know, maybe when you're young, you think that's the way until you get into it and you start trading a system or trading a style and then you learn that, oh yeah, I don't just need a system, I need the whole psychological game, too. I need the discipline. I need all this, the clear thinking. I need all that to make any money, you know, >> for sure. And I mean on that point, like that's a that's a really good point you make about how it's not all all about the money, but I mean most of the guys who kind of um say that have money. Do you think it's always easier for those who do have, you know, a big bank to be able to to say things like that? Um, like do you think it's a bit challenging when you're when you're younger and you're coming up, you don't necessarily have all that money, so you've got like a a safety zone or you know what I'm saying? Like it's a lot harder to think that way when you don't necessarily have any money. It money does seem very important. Would you agree with that?
And >> yeah, and I I would say, you know, because I was in that position, too. And looking back then, it's Yeah. you're you likely want to make money um when you don't have any to and it's likely at that point a medication for the feeling you don't like of being poor and so you think oh I'll just make a lot of money and that feeling will go away and and then you find you know a lot of people become you know I'm not those maybe that that drive to make a lot because you don't have a lot um really helps you, you know, make a lot one day and become a successful businessman or trader or whatever, you know, great. But it's a very myopic, I think, um, view, short-term view of of um, and I say a non it's not a well-rounded uh, strategy to a make money and then get all the other things you want in life too. You know, people people tend to fall into that, you know, in this case like you're medicating that fear of or medicating that feeling of being poor. I just want to make money. I'll do whatever I have to do to make money.
That's why you hear about a lot of poor people growing up. They make a lot of money one day, you know, because they're driven. They don't want to be poor ever again. And that doesn't mean that they're happy people necessarily. It may mean that they're good at their job.
They're good at their their uh um their craft or whatever, but you you don't hear about the other things um outside of their job and work success because that's all, you know, business people care about. You know, you don't hear about their personal lives. are not going to like we don't hear about, you know, Warren Buffett's personal life really, you know, or like other successes personal life, you know, so we don't get to see that side and and maybe it's a train wreck. Maybe it's not, you know, maybe it's not what what you would want for yourself. So, you know, looking at just one piece of a person's life, um, I don't think is enough information, um, for people to, um, you know, to learn from and then incorporate into their own, you know, structure, uh, into their own, you know, vision of what they want their lives to be. If you want to just learn one skill and you know trade all other things for that one skill then fine you know but if you want to have good relationships you want to be fit, you want to be healthy, you want to live a long time and you want to have some money and you want to have a good family and you know friends and all this stuff and have a life of you know abundance and you know a vision a well-rounded vision for what you want then you may need to learn how to make money there. But maybe becoming um you know a a hot shot trader or a hot shot this or that um works works against uh a well-rounded view for yourself. It may not work like that for another person, but maybe for you, you know, you need to, you know, uh take other information to account and and not just go for it all and try to be the just the big shot trader because you may you may be that one day, but you also might be, you know, a jerk. You also might have a couple divorces. you know, you also might, you know, have a couple of uh health uh issues, you know, and and I think Ed would be the first one to um admit that, you know, don't forget he's had two divorces, you know, and probably a lot of drama during his great trading run that he may not be too proud about. You know, it's you know what I'm saying? So, you know, the money's cool, performance is cool, great, but there's other things that that matter. And um you know, I think Ed can, you know, going to his site and, you know, maybe joining one of his tribes and learning about that process can really help people um see or come to that. Not saying my this view is is correct, but it may just open themselves up to, oh, maybe there's, you know, there's other ways to think about it. That's all. Not really. I'm not trying to push a way or a system on anybody or a way of thinking on anybody, but that's what that's what happened to me because I thought it was all about the money. I thought I was going to have it have it made and then bear went down and then I you know um and then half of Wall Street went down.
So, you know, there's other things that become important. Um, you know, and I I learned that for myself during those uh during those crashes. Um, >> yeah, I like how you answered that.
That's you touched on a lot of great points there.
>> Yeah. And um I also tell a story about a guy who um I work with that bear and I remember standing next to him uh a day or two after bear you know was bought by JP and this is a guy who's been there for 20 30 years and you know nice guy you know he's a regular guy he just works on Wall Street you know he didn't know anything he didn't have any inside info he didn't you know he just just made a little bit more money than the average guy, but he was still really nice. And um we were standing on the trading floor and he was looking at all the screens. This is when like people were just half the people there who used to be there weren't there and it was a total mess. It was like the last day of school, you know, there's like nothing going on. Everyone's just kind of talking and and not doing anything. and he um uh was looking at his screens, all the flashing lights because at that time the markets were still wild, you know, going, you know, high V and everything, but at bear there was no business being done. So, we were all just kind of watching it. And this is after the guy knows that he probably lost a ton of his retirement money. And he's like, "Mike, you see all this?" And he's pointing to his screens, all the flashing lights, all the Bloombergs, all that. And I said, "Yeah, all this means nothing. Um, I'm going to a wake tonight for one of my daughters or son's classmates um who killed themselves because they were getting bullied at school. You know, these kids are like 10 years old, you know, 8 to 10 or something something very young." And that was another like hammer over the head moment like, "Yeah, you're right. This is not I don't want I don't want just the money here." You know, cuz focusing on that, you miss out on on some of the more important issues of um you know, in this case, kids, you know, like you know, like how important is it if your kid just died? Really, is it important? I mean, you know, do you really need to have, you know, that big trade?
You need to make that big trade. Like, no, cuz you have you have other things to worry about. And and I feel that really that helped me um one even further push to get the hell out of the out of [snorts] the workforce and this, you know, Wall Street. But, but also helped me to really think about more um when I did pull the trigger, what kind of business do I want? what kind of life do I want? Um, outside of just trading my trend following system, you know, that trend following system is just one little piece. You know, it just helps deliver some profits to my investors. That's it, you know. But, you know, incorporating some of the other more qualitative, you know, aspects of life, you know, into my p my life's like vision picture. um you know that that moment with that guy um really helped me at least be open to thinking about stuff like that. I didn't you know starting the money hungry um grip started to loosen a bit um after that conversation.
>> Yeah. Yeah. Well, that's that's really deep. Thank you for sharing that with us.
>> Yeah, it was pretty gloomy, but I mean you know like they're real things.
>> Yeah. Well, I mean that that helps put things into perspective, doesn't it? And look at look at the bigger picture. Now, let's turn this discussion more towards your actual trading methodology. Um, so I'd like to ask you, could you describe to us how do you actually view the markets and and just share an overview of your particular trading style? So, you've you've already mentioned it's trend following, but let's let's get into the nuts and bolts of it. So, what actually is trend following? how do you view the markets and and just yeah give us a bit of an overview of your approach.
>> Sure. Yeah. So the uh you know basic ABCs of it you know if I break it down into you know a diversified systematic long-term trend following.
I'll break down each like little section. I feel like going going like that is is easy helps u helps people uh follow along easier than it is just me spewing I'm going left right back for you know that people can't you know can't keep up but anyway so diversify to me I take it from the um I'm on the stance that I want to be able to trade any trends um out there I want to be able to trade and profit from any moves in the world. Um, really doesn't matter.
I'm not I'm not restricting myself to just stocks, uh, which is a traditional pro like the stocks and bonds and the real estate. I I want to be able to trade currency trends. I want to be able to trade commodities and uh you know other foreign markets you know foreign stocks, foreign uh foreign interest rates as well because you know evidence shows you look back and do some research that you know things outside of stocks and bonds move quite a bit and why would I just want to sit in one spot and just wait for all the movement to come in those those areas?
why not I branch out a bit and maybe and maybe um you know open myself up to to being able to profit from some moves like that and you know what's happened over the past year has been a good uh example that you know currency trends been great uh since last summer and energy as well and then most recently you know metals start to break down again so if you're a traditional buy and holder you you just don't get those moves you you know, um maybe you can apply your style to that uh to those other markets and and do okay, but you know, in the meantime, you know, there's some pockets of time where you you can't because you're just not you're not open to them. Um so I like to be open to a lot of different things. Um you know, to be to make a baseball analogy, you mean if you're a hitter, you don't just want to be able to hit a fast ball down the middle. You need to be able to hit other pitches in other locations, you know, and if you can't, you can't play, you know, because you're you're not good enough. You So, you need to be open to to hitting um different trends in different markets going different ways.
And um that's that's what kind of I I feel, you know, I I like doing that. Um because I don't I don't want to be a stock picker. I don't want to be a picker in one area and, you know, try to trade every little wiggle in one or two markets. I want to be in a lot of different things and not really have an expertise in any. I just kind of want to just um, you know, float along when the movement comes in different areas and just just set my sails with them. Um, so I guess Okay, so moving from the diversified to the to the uh I I'll go to the long term first. So yeah, I mean I don't want to be trading. I'm not a day trader. I don't really like to look at markets all that much. Um during the day, again, it's a quality of life. I don't want to be sitting in front of a computer uh all day long. Uh I like to do other things. I like to get outside.
I like to uh you know um read and you know do things with my fiance, my friends and family that don't require me to be sitting in front of a computer looking at in my trading software or the quotes all day long. Like I wanted a system that I didn't need to do that.
And so I focus on long-term. I focus on um you know trading trends that uh you know my my system on average you know it's average holding period is about you know 7 8 months long. So that's that's my average position that I'm holding. So I don't really need to look at it every 5 minutes. I don't need to look at it every 30 seconds. So I can I can uh update it daily. um check it periodically, you know, throughout the day if I'm around, but not an everyday thing. And, you know, I want to be there for the biggest moves, too. You know, the biggest moves um exist on the longer time frames. And uh that's what I like to be. I like to hit home runs and um I don't like to be a singles hitter where I'm trying to get wiggles every day like like day traders do. They try to get a lot of little moves um you know, during the day or during the week. Um, I I forgive that. I say you can have those moves. I'm not trying to catch those.
I'm just going to try to be there for for the big sucker that uh that plays out over x months or years or weeks or something. Um, that's just my style. And again, there's no right or wrong, you know. I mean, I feel that my style works better for me. Um, but it's not always the case with everybody. Um and I guess uh all right so we have the divers side we have the long-term we have the uh uh the systematic so systematic I just create a method you know a rules you know a set of rules that decide you know which markets to select you know which markets I'm going to look at and then which markets I'm going to trade um and then which market uh and then position sizing rules so how big and how small am I going to be in each market that I that I observe and then when I'm going to get in and out um you know what kind of methodology I kind of already said that I'm a long-term method guy so um you know in that case my my entries and exits are are fairly loose you know it takes a lot it takes more of a move for me to get in and out than it would for like a shorter term guy you know he's more he's more uh tight his his his um his entries and exits are tighter with the movement than I am. um you know to make it I guess an example like let's say I use I say I'm like a breakout trader you know I I use a 200 day look back you know so if the market makes a 200 day high you know I'll get in um versus a a shorter term guy which is it wouldn't work I I wouldn't be able to follow a shorter term system that well but just because my psych psychology doesn't really fit with it but like a shorter term I may go enter market on a 20-day high, you know, so he's he's getting in that much much quicker. I I like to be a little bit longer.
>> Well, let me ask you about the systematic side of things because you started out as an accountant, then you became a an analyst on the trading desk.
At what point did you did you learn to start coding or did you code or did you bring in outside help? like how did you actually develop your system once you had an idea and some rules that you you thought might be valid and have a edge that's worthwhile trading. How did you actually turn this into a functioning system that that is essentially automated these days?
>> Um I oldfashioned way I started with uh some pen and paper and then I got into Excel. Um, and I still do a lot of majority of my systems in Excel because uh I like to see uh like Excel allows you to go under the hood and kind of see what's going on versus a a software which kind of just pumps out results at you. You don't really see what's happening. So I I called a couple guys to help me um who I who I used to work with who were more advanced with coding and they kind of show me the ropes with um um you know some like Python software and uh and C and things like that. And you know that's all good as far as like testing goes because you could you can you know be efficient with make uh running a lot of tests fast. Um you know with Excel it's kind of slower because you got to you know it's just a little more little more um um detailed and not as I don't know I don't not not as advanced as some of the other softwares.
But anyway, um uh I called uh I called a couple traders who I looked up to who uh you know Kovll uh wrote about in his books and um and then you know they kind of told me like look like we can code but it's not really like a necessary skill to have. You need to have some sort of like basic you know you could do everything in basic Excel. That's kind of why I started in Excel. So you can start there and you can always stay there if you want. You know, you don't have to go to the software route. So that's what I did. I got into Excel, just kind of started making it up as I went along to learn it. And um didn't really have a guy there, you know, sitting next to me while I while I built it up. Um and I, you know, I I designed like a risk sheet. So I had like a portfolio sheet, which is where I had all my positions.
that had had my position size has where I got in, where my stop is, what the current price is, and how much money I have at risk, what's my P&L, and uh all those things that tied back into other sheets that I had for each market, which each market was just had the data. Then it had my um position sizing sheet, like how big of a position am I going to take if I get a signal? Um you know, all that. I so I updated that stuff every day. you know, I had a new, you know, every day go into the go into the market sheet that I that I had, you know, um and right now I have 40 markets. So I have like 40 different sheets for each market and um they um you know, so I update the data every day and then I see what what my rules tell me to do. You know, how do they change? Do should I take a bigger position today if I get a signal? uh what's the new stop uh orders, what's the new buy stop, what's the new sell stop, when am I getting in, when am I getting out, um type of thing.
So um those yeah I mean I started I started probably doing that um sometime in 2010 2009 2010 and then um just kind of made you know changes and advances along the way as I've gotten better at at uh building these things and and um I guess more comfortable with with just how to do it. Um, but yeah, I mean there was really no no fancy way. I mean, and you could probably, you know, hire someone to do something today or help you, but uh I I didn't. Okay. So, I've just got a question around that. You obviously mentioned Excel there quite a bit. What What sort of data were you actually putting into Excel? Was it um like calculating anything or had you programmed it to to output certain data or or was it just you were just using it as a spreadsheeting tool to take um to keep track of your your positions and your trades and that type of thing or or was there something >> Yeah. Now everything is um you know coded and linked together. So I have like I have a data software that I that inputs into the into the uh the market sheets every day and then from that from those sheets they spit out um the new days uh buy and sell signals if they are changed like a lot of times since I'm so longterm they're not different at all.
Uh the new position size. Um, so yeah, I don't I don't just have a uh like a summary sheet of like what my positions are. Uh, so I could see it all one spot that kind of autopop populates from from uh from other sheets and things. So it's all it's a whole big linked web of uh of things. But um I I think uh you know you could do you could start with you could start with a simple sheet of you know if you do things by hand if you're if you're a non-sistatic trader you just kind of want to make call like you know make trades you know based on your gut or something. Um or do it another way.
You can have a sheet that that kind of organizes things for you like so you can see what it is you actually have on the books. you know what you have that way you don't have to remember everything, you know. Um, and that's kind of what helped me in the beginning because if you want to be a diversified trader and trade a lot of different things, you need to organize the stuff cuz there's no possible way you can memorize and and remember everything uh about where every stop is, what every position size is, and what's you know what's the proper you know risk management and position size to take in every market. You can't possibly remember all these things. So, uh, maybe you can, maybe maybe you're smarter than me, but anyway, I like to keep it organized and I like to keep it, um, uh, in front of me so I don't have to remember it all. Um, because I mean, I have other things to think about, too, other than just trading, you know.
>> Of course. Very important to be to be organized. For sure. It's a big one.
>> Yep. That's what I feel um, this has helped me to do, organize. And and I feel that's what uh a lot of good a lot of good traders in general do, you know.
Um especially the systematic guys because they're computer nerds, you know. They don't want to they don't want to have >> [snorts] >> uh things in their books that they don't that they're not accounting for or they that they run the risk of not remembering or you know um maybe some of the traders of old that you know do it do it like that where they're kind of just more on the off the cuff you know you know they kind of see their their statement and then they make other decision you know they kind of just on the fly of of changing things and not really setting to a disciplined uh a disciplined set of rules that that you know hold them accountable to to do what the rules say and and to organize them and to and to face them every day. You know, some people don't want to face their statement or their their summary of of what they hold their positions are because they don't, again, going back to the Ed Sakakota stuff, you know, people don't want to feel, you know, the feeling of being bound by the rules that they set for themselves. You know, they kind of want to do what they want to do, you know, sometimes and they don't want to obey the rules. Like dieting, same thing. You know, people just go off the rails. So, so those things are, you know, they won't appeal to everybody, but uh >> I feel that they really help me to uh again be organized and know what I'm doing. You know, if I don't have >> this this setup or something set up that tells me what to do, when to do it, and how much to how much position to take. I feel that um I don't know what I'm doing and I'm gonna freak out because I I don't like not knowing what I'm doing. I need to like write things down and I need to be organized and everything. So that's why I go with this approach than uh maybe some others.
>> Yeah, I think that's that's a fair point, too. Uh, I mean really it comes down
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