The Man Who Beat The Market For 20 Straight Years - Brad Jelinek

A professional Chicago floor trader who's been consistently profitable for two decades. While 99% of traders usually fail within their first year, I spend 75 to 80% of my day on AI, coding, and tinkering. It's just simplifying my life in every way possible. Makes my checklists and my analysis faster and kind of give me 80% of the way there in a really quick amount of time. And now when I go deeper, it's like, okay, I'm starting from a much further spot.

Introducing Brad Yeleneck, a professional futures trader with over 20 years of market experience, known for surviving the most brutal trading environments in the world and building a career on evolution instead of stubbornness. In this episode, Brad reveals the number one reason why even professional floor traders can end up blowing their accounts, the exact moment he realized he had to reinvent his entire strategy, and most importantly, the exact mental shift that separates traders who consistently get paid from the markets for decades from traders who give up after one bad month.

>> Exiting a trade is a totally different business than buying it. We talk about fundamental screeners, AI tools, technical tools, retests, narrow bars. None of that matters on exits. Exits is like there's a guy that I used to trade with in Chicago and he made a lot of money every year. He was one of the best traders. He had this happy-golucky attitude. It sounds easy, but it was hard to do. But he was just kind of like, "Well, it was going down, so I got out." He didn't want the psychological damage of holding it against him. Then it would go up, he'd add to it. He'd add to it. And the flash crash happened in 2010. And it kind of the market went down. If people remember, some absurd amount of money. And he was short that he did really well. He just kept trailing it with a stop and it just never came back and he made a fortune on it. And I've learned to really follow trends better, to get quicker at cutting things, and better at sticking with things that feel good.

>> Okay, so when it comes to the final filter, it's gone through the AI filter, then the human filter, and now it's time to get in. But then if it's chopping around the consolidation, which you like, that consolidation could go on for a while. What are you looking at in technicals to time your entry?

>> Oh gosh, we could talk so long. There's so many ways to think about this. So everything's a little different. So ladies and gents, welcome back to another episode. Brad, my man, a fellow podcaster, which is which is interesting to have on. Uh, you've had a a long career, a vibrant career and many transitions, and I want to explore each and every one of them, including your latest pursuits in life, which is AI, arming yourself with AI in terms of >> assisting in your trading. But I want to start off with this concept that a trader will have certain fallacies or misconceptions that we start off with. One is like >> um, if I know how to make 20% a year, then I keep doing that to get as much capital, I should end up a billionaire. And you don't consider the psychology components or the alpha decay that may happen. Another one is um, if I've got an edge and I know how to make profitable trades, well, just take more trades like that and then scale up. And then where you ended up was 30, 40 trades a day, uh, which then you have transitioned away from. So first of all, how did you end up at such a high trade frequency, and was it serving you at the time, and why did it change?

>> Yeah, I mean, good questions. It starts off with I had to do whatever I could do to make a living and get trading. So I I did it out of college, and I just wanted to have a job in the business trading. So I was thrilled to to get a job at a prop firm in Chicago. And when I was there, it was this is what we did. We traded more frequently. And this is back in the early 2000s. So this was 2002, 2003 up to 2015. And I always considered myself a little bit of a longer-term day trader, if that >> is that's a thing. Okay. Now, for the normal people in society, that sounds ridiculous.

>> But you mean you're entering based on the lower time frame, hence day trading?

>> Yeah. Thought ideally I would have maybe four or five trades a day, and I'd make some scenarios for the morning, for the afternoon, and then I would kind of let the trades breathe. But a lot of times when it was busy, uh, '08, 2008, 2011, and a lot of pockets during during in the middle, it would be 30, 40 trades a day because it would make sense. And a lot of times there would be a trade or a theme where I thought, we're going to go up for a while in the morning, and there would be a core position, and then I would be adding and taking off around that. So when you looked at my trade count, it would say maybe 30 or 40 trades, but really I see >> it was kind of one idea that I was just kind of massaging around.

>> So these would be ideas of scaling in, or it would be, you know, five independent ideas on different asset classes?

>> It would usually be sometimes they would the one idea would translate into a few asset classes. If I thought S&Ps were going to go up, maybe I thought bonds would go down. Maybe I thought there was a currency move, but normally it would be, let's see if we can, this trade is going to go from A to B, but in the meantime, there's going to be some pullbacks and other things. So, I try to keep the core position. I would find spots to add, and then I'd get out of those and I'd add again. And they didn't work, maybe I take them off, and I'd still have that base on. And if everything blew up, then I didn't get hurt as much as putting on a huge position.

>> So, interesting. I want to explore that. So a lot of people like to trade correlated things. I'll be trading Euro dollar and GBP dollar because they should move in a similar fashion, and if they dip temporarily, I can use that as a as a piece of information. And I know people do that with indexes too. Uh, SMTs, people often call it.

>> Uh, when you are trading things that are correlated though, the danger becomes, I won't enter the same idea on both because I don't want to have to double the exposure. How did you then manage not being overexposed if you're on a similar idea, but you're trading the inverse color combinations and so forth?

>> That's a good question. You think you're diversified, and everything's the same trade, and that that's like a huge thing now for overnight holding too. Well, I I was so quick trigger back then. So I we've talked about, we'll talk about how my trading's changed, but back then >> I would be in and out so fast. So if that would break down, I would just be, I would just get out of one of the sides.

>> But it was the culture in the trading floor.

>> Yeah. I was like, I saw this. I believe in it. It's working. Or there's a divergence where the correlation actually that was working would stop working, and it would be, let's, let's, you know, storm the castle on the other side because people are stuck following this correlation that is not working today, and I would kind of go and aggressively go against that.

>> If I, so a lot of the work was just studying like what is correlated and why is it correlated and when are people wrong?

>> And then what was the journey thereafter? Because you did that for almost 10 years, it sounds like.

>> Yeah. And and there was all kinds of like, if uh, earnings day, there'd be a certain stock that would drive the index. This is like old-school futures trading, and a lot of people who didn't trade that. It's different now. It's it moves. We we just spoke about it before the the podcast. It's a different market, and it, I would say every like five to seven years, the market changes, just like a person does when they say your sales turn over every seven years, or and we go through, we have kids, we change, we get older, and the market's the same way. It evolves with technology, and I think to stay in the business, you have to to do the same thing. You you keep some core principles, and things that that worked at one time often will come back later. So a lot of my old tricks worked during crypto when crypto started. I would employ a lot of skills and techniques I hadn't used.

>> Um, this was like 2015, '16, '17 in crypto, and then they would stop working again, and you go back to something else.

>> That's actually actually very true. I've experienced that this year where I'm trading currency, so I'm trading on the lower time frame, and I have certain entry models. When I come to uh, looking at the stock market, and the entries I'm doing for investments, I thought, might as well go on the M1 and do similar entries.

>> You just can't. And and what I see in the stock market is like the more simple technicals that I don't use in Forex actually serves me here. Uh, interesting. Uh, so now what is your average trade frequency like?

>> Um, so I have two things I'm doing. I have a longer-term account that my trades are lasting six months to two years. And I have a shorter-term, I would say, my my income account, my trading account, and those trades last from weeks to months. Sometimes they last a few days. If they work right away, or they don't work right away, they could be a few days, but it's been more weeks, I would say, for those. So, more of a swing trade, position trade.

>> And the day trading is now rare, and it's for special events. And because you kind of have segmented, let's call it, investment part, and then you're trading active trading part. Is there any kind of intentionality of like, let's, let's do this as a hedge? Uh, or or is it just like both independently?

>> Sometimes there'll be, I'll think I'm long so much stuff that I can take a a swing at a short position here because I, I'll sometimes use it as a hedge like that. I'll do a little bit of that. Okay.

>> Like for instance, at the beginning of 2025, I felt like everyone pre-bought ahead of Trump becoming elected. Like there was a lot of buying into it. So, I knew that the positioning was everyone's is long already. So, when it started to tip over, I got really nervous, but I didn't want to get out of all my longs. So, what I did is just did a bunch of hedging and then use that to kind of blunt the damage. So, I will do that at times. I don't like to get over um, hedgy and just kind of burn up, you know, options premiums and stuff, but I will do it at times where I feel like I, I get the positioning and I understand why it's vulnerable.

>> And now you've transitioned not only from a high trade frequency to quite a low one, but also the whole time where it was day trading now to swing trading. What benefits have you found in in transitioning that way?

>> I mean, it feels so good, honestly. It's more peaceful way to live. I I really, I mean, it can be stressful, too, but I, it's so much less stressful than day trading.

>> And we we talked earlier, too, about just as you get older and have kids, and you've made some money doing it, and if you're lucky enough to survive, you wanna How do you get bigger? How do you expand? And I think you lengthen your time frame. You look to um, have a deeper knowledge of what you're doing so you can do it bigger and have a more of a repeatable process instead of just kind of waiting for a good market or a busy market. Um, I found myself kind of waiting for the market to be busy the last maybe five years of the day trading, like waiting for moves during the day. And then I know just from stats, most of the moves happen overnight. And there's so much technology that's changing right now. I think we're at, we're alive for one of the greatest times I think to be alive. And it, it doesn't seem like that on social media, but I mean, we have all this AI stuff happening, and we have all these people trading. There's the US is full of sports betting, we mentioned on the rise, and and tokenization of assets. So, it's a fun time to do it. And I think that I forgot even where we're going with this now.

>> No, beautiful points though. They're all true. I want to I want to latch on to this idea of what is longevity in the markets to you? What, what I mean by this is you've mentioned how the markets have changed, so you've had to adapt. Um, and therefore, would you say there are certain strategies for certain seasons? Uh, is it just you have to focus on core principles of, okay, let me learn how to make a strategy, so when I need to evolve, that's the core skill that carries you for longevity? What does it take to stand decades in the market?

>> Yeah. So it used to be get a stand-up desk, go on a walk, um, work out in the middle of the day. Um, don't trade when your in-laws are in town, or you have it. It used to be things like that. Um, just to have it easier when I'm day trading, to be, and to take a day off once in a while. And I used to never be able to go on vacation because I'd go and be on my phone the whole time. Oh, I missed a move. And >> would what would it have been like if I would have been there? And I just tortured myself. And I still have a little bit of that. I think we all who do this have that. But I've gotten longevity now is just >> I feel like what, there's a thing about working really hard and having success, and then there's a, a really high level of achievement where you're not really working that hard, and you're having more success. You're in a state of flow >> and life is just kind of leading you to the next thing, and you're, you're not actually, you're, you might be working hard, but you're doing it in a way that does not seem like work. And that's kind of where I see that's where I'm going, and where I want to go. And the c, the bigger trends in the market with real money in little longer time frame tend to line up with some of that for me.

>> Explore that, because this is something I resonate with massively, but if you can help me define what you're speaking about here >> with with regards to how does life get easier and things move more effortlessly when you were actually working less or trying less.

>> Yeah. There's a guy um that I used to trade with in Chicago, and he he'd made a lot of money every year. He was one of the best traders, and I used to sit by him, and he had this happy-golucky attitude where he kind of just, he was, it sounds easy, but it was hard to do, but he was just kind of like, well, it was going down, so I got out. He'd always get out. It, he didn't want the psychological damage of holding it against him.

>> So then it would go up, he'd add to it. You'd add to it. And the flash crash happened in 2010, and it kind of the market went down. If people remember, some absurd amount of money or amount of ticks in a like a half an hour. Okay.

>> And he was short that, and he did really well. And everyone else kind of got out and said, "Well, my winner's big enough." And he just kept trailing with the stop, and it just never came back, and he made a fortune on it, and eventually he did get out when it came back. Mhm.

>> And I say that because it's a metaphor for what you're saying about the flow of life. Like, let things, don't make things so hard. And I've learned to really follow trends better, to get out when things don't work, and to take small losers, and not get psychologically invested in things or people or ideas that are just kind of bogging you down and don't resonate with you. You get quicker at cutting things, and better at sticking with things that feel good. And it's such a simplistic thing, but I think you can develop your way of being that way. And he did that really well.

>> You think it's dangerous to allow what you said here, what feels good to to involve your feelings too much in the market, or should we should we try and be as systematic and uh, objective as possible, or do we allow this intuition and feelings to come in?

>> Yeah, I think this whole idea of feeling good is a nuanced thing because it could mean two different things to different people. Feeling good could be a dopamine hit or a euphoria about making money and trading well. That's not really what I mean as much. Feeling good is more of a deep holistic, I'm on the right path with my life. Like, I'm doing the approach I have fits with me. It fits with my personality. It fits with where I want to go with my life.

>> The people and the systems I follow, and the way I do it is something that I feel like when I go to bed at night, I feel like, yeah, I want to I want to pursue this.

>> Oftentimes when I was day trading too much, I felt like it was at odds with where I wanted to go. I didn't want to be in front of the screen all day. I'm in front of the screen a lot now, but it's more doing like AI projects to code ideas or to simplify my life, and less about that that anxious t you know, that tense uh, trading feeling all the time.

>> Let's explore this, because this is probably why things have started to feel easier and more effortless, because you are leveraging your life by letting AI assist you. Now, this is something everybody tries to do, whether it's just like taking a picture of the street and say, hey, will I get a parking fine for parking here, down to what you're doing, which is efficiency is all over the place. How have you used AI and workflows to assist you specifically in trading?

>> Yeah. So, it's I spend 75 to 80% of my day on AI coding and tinkering. And the rest of the time I have my trades on, but I've I've studied at night and in the morning when the market opens, kind of how are my trades needing moves to be made, and I look at the end of the day, and during the day, I'll notice if something happens. But it's just simplifying my life in every way possible. It's the, I actually happen to really enjoy it. So, it's, it's easy for me to do it. But, I've now gotten into using um, outside of the chat window, I use the APIs. I mentioned this to you before where >> and a quick example could be like, say that you um, have 10 questions like a Charlie Munger, Warren Buffett checklist, let's just say for a stock. Is it a monopoly? Is it, are, is the ROE over 20%? Um, is it founder? Whatever your questions are.

>> And you can go in the chat window and do that. But what I found is you can use the API >> and you can get that code, the API key, and you could put those questions in your code in the back, and then you can just run that on as many symbols as you want, and it just populates all that stuff. Then you can save all that stuff to a database and search it. So, that's one example of a shortcut I used to kind of um, make my checklists and my analysis faster, and kind of give me uh, 80% of the way there in a really quick amount of time. And now when I go deeper, it's like, okay, I'm starting from a a much further spot.

>> Has it assisted you in psychology?

>> Um, that's a good question. Think about that for a second. Yeah, in the sense that it gets me out of my own way and into the flow more. And so a side story on that, um, a friend of mine, um, Brent, another trader I met, he and I watched a season of Deadwood on HBO, which is kind of a funny old western show. And we did this on a shitty summer when everyone was getting blown up because the market wasn't good, and everyone's overtrading. So we watched the show, and we just laughed, and had like a great summer. And we actually had a pretty good month. It was August, and it was slow, and we did pretty good because we only got pulled into the market when it made a move, and it wasn't moving much. So we we watched the show the whole time, and for us, that was a big psychological boost because we recognized it sucks, but let's do this instead, and then we'll know when we need to do something because we have the experience, we we know when something happens. The problem is, we can't get out of our own way. And I think having these productive distractions of AI have that really helped me get out of my own way and stick to the things that are working, and then tinkering with making them work better by bringing the information to me in the morning in an email or a system versus like trying to come up with things to do all day.

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What I what I've noticed is a lot of people want to focus on patience, the term patience, and improve their training through virtue of patience, and they'll go through meditations and journaling and all of that is good stuff. But maybe what the best thing to do is like walk away, because then you don't have to sit in front of the screen and test your patience. You just have a distraction. Uh, but then that can go too far, and you end up just hanging around with friends or going on vacations all the time. And I think the key is being in front of your desk to spot opportunity, but not watching the screen the whole time to then be taking emotional-based trades. What about other ways? Because where I was going with the question, I was I was kind of assuming that the AI would be a filter for you so that you don't have to rely on your emotions as much. Has that been the case, or is it more just for conveniences?

>> Um, so great, first of all, great point you made on quick story. My my son builds Legos, and he gets really frustrated because he can't find the pieces, and he just gets, he loses his mind, and then nothing happens. He goes unconscious. It's the same thing with trading when you lose, you know, you get frustrated, you can't. So he always says he's learned to come back with a fresh mind. So he's like, "Dad, let's come back with a fresh mind." And I'm like, "I'm glad you could learn that now because." So I think it's the same thing with with what you're saying, is you come back with a fresh mind. So getting away and taking a break for people who trade are usually high-achieving, like they're on their own case. I think that more is probably better for getting away and being bored and being silent. Like the more you can be bored and silent, the better, because it's hard to do. So I would say that that's the real big.

What is your thoughts on now as we venture into a more and more digitalized world? Dopamine, cheap dopamine is accessible at our fingertips in an endless supply. And if I, I watched a documentary, it was talking about why is Instagram so addictive, and they're kind of uh, referencing the gambling machines in the casino where you, you pull the thing, and then you don't know what you're going to get, and it's a surprise, and maybe it's a win. And the same thing happens when you refresh for your stories. You don't know what you're going to get, and and you come back to it again and again. And I've caught myself in the same hour going back four or five times, and nothing would have changed. Um, where I'm going with this is this idea of dopamine and and access to so many things. Instant gratification has warped what trading has become, because now we're looking for that with prop firms and so forth. Because you've been trading for quite a while, have you seen as the world has changed and this interaction with dopamine, how the traders' behavior has changed?

>> Yeah. Um, I think a lot of people got burned out of the market from playing that really short-term game. It's it's much harder than it used to be to do. And that's part of the reason why I moved >> through worse results in the short term to the time frame I'm in, which has been a lot better.

>> Um, I one thing that's helped me with this though, is surrounding myself with people who want to play longer-term games, who want to be thinking longer-term about growing, advancing, working on projects. And when you're around those kind of people, you kind of all collectively want to be that way. You get caught less. Like if you want to only hang out with people who want to argue about politics, you're going to be arguing about politics or people talking about. And that's fine, but it's like who, if you surround yourself with a group of people who are focused on a task that's important to you, like, you know, you get a workout buddy for the gym, and that then you have a productive workout. So I've really tried to surround myself with people who are who are on the same path with what I want to do, and it's, it's limited some of that dopamine stuff from taking over.

I completely agree in the sense of accountability where you got a buddy that says, "Hey, let's go out tonight." You got another buddy that's just checking in like, "Okay, how, how you said you were going to do X. Did you do it?" Um, what about in trading though? Is that something that is applicable where if you have trading buddies and and you go through a program together with a friend, or you trade the session together on Zoom, is that beneficial? Can that be a bit of a hindrance?

>> Um, I've tried buddy trading before and partner trading. Tried everything, honestly, and it never really worked because it's so individualized. And it tends to be, we all have our own emotions and our own triggers and our own things that we see and risk aversions. Want to cut it. I want to let it run longer. I want to trade bigger. So, it's been hard because then when when something, it works good when you're doing well, and all of a sudden when you're not doing well, it's hard to talk to somebody who's having a hard time, and maybe you're not. So, it doesn't really seem to work that well. It's kind of an individual pursuit. But I think with playing the longer-term games with people, what I meant by that was like, you read similar things in terms of you want to trade a certain way. You want to, you want to share good setups or things that are maybe going to happen soon, or you're reinforcing habits that are where you want to be.

>> Even if they're not where you are right now.

>> And that's been helpful for me to have people that are like that.

>> Do you have many traders as friends now?

>> Yeah, lots of them. Um, a lot of them are not in the market anymore, actually, the short-term traders. A lot of them are just in something else, but I've made new friends, and I have a good partner that I've made um on a couple different fronts, but one of them is more of a trading partner um who I've had forever. And the other one is someone who's working with me on a longer-term project with stocks that I'm holding for six months to two years, and he came from a venture capital background, and it's different kind of thinking, and I have a trading background, and I'm, we're kind of working together, and it's really helping us.

>> So that's that's another example of >> so someone from the professional world that is, you know, you're bouncing ideas off each other. What does he gain or learn from you where you'd see he has the more professional trading stats?

>> Yeah, because he, he's got like the longer-term thinking and the analyzing companies.

>> Okay.

>> Um, >> for me, let me think here. What would he gain from me? We should ask him that one. But, uh, >> I'm alluding to the fact that I guess his approaches have left blind spots because maybe they don't use technicals, you know, whatever it could be. Yeah, I think I think better entries, um, just blind psychological or blind fundamental entries can be, you can ignore um, price action totally, and things can go 20, 30, 40% against you. And well, the fundamentals are good. It's like, yeah, but this is not the time to buy it. Like, are the borrowers narrowing? Or is the group performing well? Is it outperforming the group? Is it >> how's it responding to good news or bad news? Or is there a wall of worry? Is there neglectful sentiment? Are value investors already in, and they're hurting? They're bleeding? Like all those things a trader thinks about, whereas someone who's maybe outside doesn't doesn't think about. Which >> look at value maybe?

>> Yeah. And it could be good that they don't think about it, but a lot of times I think when you combine the two approaches, you see like, you see a better process.

>> Walk me through your workflow to go from checklist of things I'm going to monitor to, okay, I've got a trade idea.

>> Yeah. Um, so the the checklist would be fundamentally based more, where I look at all the 10 or 15 questions that I want to answer, and I find companies I think are high-quality companies. So there might be maybe 200 in the US that I'm looking at.

>> Oh, okay.

>> And but maybe only like four or five of them are within an area where I feel like they're cheap enough that I want to um, according to my fundamental metrics. And this is new for me. I didn't do this years ago. This is something that I've, so I have a fundamental screener, and United Healthcare and Humana and some of the healthcare ones came up recently on it. So that's a group that I'm in some of those stocks because they got cheap enough where it was showing up on the fundamental side. But then >> So what is the screener first of all? It's it's something you built with AI or >> Yeah, something I built with AI. Um, and a friend helped me build it. It's just kind of a simple thing where it looks at um, shares outstanding and are they doing a buyback or not? So, what are the future shares going to look like less or more depending if they're adding or or buying back? And then their price to sales ratio now versus historically where it's been. So, it could that's like a, it could rerate higher or rerate lower. Like Apple for a while was thought of as a hardware company, and when they rerated it to a software company, it got a higher multiple. So, it's looking at that effect, and then it's looking at um, um, I'm blanking on the other thing I look at. Oh, an uh, growth expectations, like what is the analyst's expectations for growth? And I use analyst because >> Why is that important?

>> Just because it to see how high it's because the the stock can move a few different ways. It can rerate. It can move because it's hardware and it's moving to software. So, though the stock will go up because the the multiple should be higher in that business because software has a higher multiple than hardware, for instance. Mhm.

>> It could go up because they're buying back shares because there's less shares available when they make earnings. So, if they buy back a lot of shares, the earnings, you know, they count more, and it can also go up because there's actual growth. So, there's a few different things that could. So, I look at all three of those things, and that's the fundamental thing that I look at. And then I have my whole technical thing that I've always used that's sort of new with AI, where I have a screener, and I take um, I use like a basket of stocks that are theme related. So, I use AI for this too. Might say look at gainers, losers on a weekly and quarterly basis, even daily. But >> But the AI is monitoring the technicals for this.

>> Yeah. So the AI, the AI might say um, hey Brad, um, there's these new themes like Broadcom and whatever else is related to it that are moving together, and it might show me 10 stocks that are moving together that I didn't know are related. So then I'll research it, run it through the fundamental screener, and maybe one or two of them look good. Okay. So I'll look at the whole group then on a technical system where it's um, I use MLEN oscillators and breath indicators like that, that's used for the whole um, this sounds so so complicated, it's really not. Okay.

>> Um, think about like >> uh, market breath for the whole NASDAQ or S&P. Like lately what you've seen is that the last few years that the market goes up, but the the participation is low because it's like the Magnificent 7 are pulling everybody up.

>> Okay. And that's become normal now because big companies have done better with with AI and with the big have gotten bigger.

>> So there's and maybe it changes, maybe it doesn't. But I basically take that approach, but I use it just for themes that I'm interested in. Uranium or AI data centers, um, gold miners, China tech, whatever it is. So I have these, and I have a technical system that alerts me when is it ready according to that technically, and I've backed it. Then I look at the fundamental thing, and I kind of put them all together, and it starts, the AI will do all this for me and give me ideas, and then Brad sits down and says, "Okay, does this make common sense? Are these charts that I like?" And then I have my little list of things I'm looking to do.

>> So that's kind of a summary of it.

>> So what would have been probably hours of due diligence in the past is now presented to you.

>> Yeah. So, it's like I'm not the deepest expert on these stocks, but I can do 85% of it quickly with the AI, and then I can use my trading skills and the technical stuff to say, "Yeah, but it's not ready yet." And then two weeks later, okay, it looks like it's getting ready now.

>> And then I, I have the trade to do. >> And I have two or three reasons to do it now. So then I can hold it longer because I believe in it from more than just a technical angle. I like my trades to work from sentiment, technicals, and fundamentals, if I'm lucky. That was China recently had all three.

>> Yes. But some of them, it's not always like that. But >> Super impressive. I'm really thinking this is like forward-thinking and and going in the direction of the AI is assisting you, but it's not not, it's not dependence. It's not doing the trading for you.

>> I guess the hard part was not learning how to build it, because there's probably YouTube videos and a bit of trial and error that that can you can get there. Probably the hard part is knowing what to tell the AI to do for you, or building the relevant filters. How did you decide what to to code in on your behalf? That's the hard part. And because that's why if you have experience at something, you can, that's the hardest part to learn, because you can learn the coding, if we know exactly what we want to do, the machine can do it. But it's hard to know like, okay, how do I look at it fundamentally? Well, my friend helped me with that, that was that was not my >> brainchild, but then with the other stuff, it was like I put together bits and pieces of what I had learned in my 20 years of trading as to when I think a stock is probably going to move, or when it's vulnerable, or I need to get out. So then I took those ideas and made the technical thing, and that's stuff that I mean, if I showed people, it's not like it's a huge secret. It's more of my own little cocktail that I had from my experience.

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And once it's gone through the filter to present to you, okay, these could be opportunities. Then it goes through that technical filter. If you can elaborate on on what that is, because the AI just going to simply signal it's above the EMA, below the EMA, so therefore it's it's maybe in a discount, or is actually doing a full technical breakdown?

>> Yeah, it's it's a little better than uh, above or below the EMA, but not a full technical breakdown. It will be like the breath of this group is doing well on its own, uh, versus the overall market. So, I'll kind of know that. And I like when I like when I the bars get narrow, and the interest is low, but the fundamentals are good. So, like China, it was cheap fundamentally. It was neglected and uninvestable, and the technicals were were setting up. So, I was getting like narrow bars. It was people were bored with it. Um, not paying attention to it, but I felt like if I got in and I was wrong, not really going to get hurt that much. So, it kind of fired from all cylinders. So that's a lot of um, and I look at like when I'm I have the um, MLEN oscillator. It's just a popular um, I don't know if you've heard of it, but it's a way to the breath of the market. Then I have a moving average on that, and when it crosses the moving average, then I say, okay, well, this is getting ready to maybe set up if I like it from the other two angles. If I don't, well, I don't really care, because things are setting up all the time technically, and that's just noise.

>> That was going to be my question. On a typical week, how many opportunities will this present for you?

>> Maybe a lot of signals, and then how do you filter?

>> Yeah, maybe like two to five ideas a week.

>> Okay. And then from that, let's say five, how many make it to actually a place trade?

>> Maybe like two, three trades a week.

>> Because I'm, I'm narrowing down pretty good in the two to five.

>> And >> Like right now we're in this crazy bull market. Um, so I, I want to play it, but I'm also getting nervous up here with getting too many entries and holding a lot of stuff that's deep into the move. So, I'm willing to play some stuff that's kind of breaking out that looks good, but I'm really So, that that's like my being a trader for a long time, and having that understanding.

>> Yeah. I was curious to see what is that human filter after the AI does its work. So, if if majority majority of your trades come from the AI, because it will suggest to you five, maybe take two or three. The AI did the heavy lifting, but what is that human element that you'll still do? Is is it just those final technicals you mentioned?

>> Yeah. Well, the big thing is since I made it, I feel like the AI is doing it, but it's on my behalf. It's kind of Brad's special AI plan. And and so then I feel like I have a a belief, because a lot of times if you gave somebody a trend-following system and said, "Look, this works."

>> People aren't going to follow it because they don't believe it. And that that belief in what you're doing >> is hard to replicate if you don't do it. And or you sit down with someone and you really make it your own, and you really spend a lot of time. And I think this is with a lot of things. It's not about the process. It's about you believing and following the process. It's like the best workout is the one that that you're going to do. You know,

>> I think I think that word confidence is the key one, because confidence is what? It's probably just a stack of evidence. And if I've seen something play out for years, and I've coded it to assist me, I know what is behind it. But if you just gave that to me, I don't know what's behind it. I didn't see it. So, I'm not going to trust in the same way that you will. And that makes total sense to me. Speaking about that, that final human filter, why is the reason you chose to keep that manual? Is it something that is not effective right now to code, or is it no, this this is the last piece of the puzzle of confidence that I need?

>> Yeah. Um, maybe at some point it just goes full full machine, and I, I thought about that. I'm just not quite ready for that yet. I kind of enjoy the tinkering. I like to play and watch it, because it just gives me something to do, and I like to have that last say. But um, honestly, sometimes I just cut my trades too early on stuff because I get nervous about the market. It's gone too far. Especially lately, everything's been working. So I thought, geez, I mean, when things keep working and working, I'm I'm thinking >> forever.

>> Yeah. So then you start to get in your own way a little bit, and sometimes if you let the machine just do it and follow the rules that you tested, um, you end up doing. It's funny because I used to be a pure discretionary trader. I'd have none of this stuff. And I'd have during events when I would trade futures during like black swan events. I used to trade unemployment, ECB meetings. I don't do it as much anymore, but I'd make a checklist of, okay, this is what's priced in. I think this is what's expected. And if they say this, and it's, it's not going to go, then I know everyone's already in, and it'll go the other way. And I'd have like a big

list. So I'd make little checklists, kind of my whole career. But I've gone more down that road of checklists and rules because with AI and with computers now, and so many people doing it, it's just more things are triggered more that way with algos and machines. So you have to kind of play that game.

But you don't want to get so caught up that you're overtrading it. But I, I've really moved that direction.

I'm curious to know the AI that you're harnessing right now. Has it developed an edge, or has it just helped you out? Is it an assistant, or is it an advantage?

Um, I think it's really helped me out, but I wouldn't call it a thing that's giving me trades on its own. It's just doing what I told it to do. Um, it's it's doing it. It's making me sift through more information easier. It's making me look at the whole market, break it down into different groups, and show me which ones might be ready to be traded. Whereas without this, I would probably get overwhelmed and just kind of just pick a few groups, and I would never see maybe all the choices. And it's probably a case of like, if you read through 200, but the last 10 are fresh in your mind, you're more likely to pick those because it's recent. But here you have a true lens of truth.

Yes.

Um, because of the AI's assistance, you walk me through the final piece of the puzzle. What is that step by step? So you've got a list of five now.

How does it narrow down to two or three in terms of the technicals? What are you looking for in price action?

Price action, I like narrow bars. I like things to get tight, and it kind of signals that there's been an equilibrium reached.

So simply a zone of consolidation.

Yeah. Like if if if something has been puked out and everyone liked it, they liked it and they're just done with it. It it tends to after the big drop, you just get that that neglect. And I like that area. So if I like it for other reasons, I like those spots because they they're low-risk entries. There's an old fart saying about, um, buy in mild times and sell in wild times. And I've always liked that.

Buy buy in mild times and sell in wild times. Got it. Got it.

So you buy the narrow bars and you sell the wild bars. You sell the big and

Momentum, basically. Yeah. And there are like wild stocks that have big pullbacks that those are the entries that are better. Of course, there's those too. But I generally like these kind of entries more.

And I just, I've learned that the story stocks or the stocks that don't have any earnings that have big moves. I I do trade them a little, but I kind of stay with more high-quality stuff. Your ultimate absolute return might not be as high, but you have less chance of blowing up. You sleep better. And the quality of a stock and the the uh, just be either I'm really early and I'll take a chance on something, but if I'm not early, especially the quality matters a lot. So I rank the stocks by quality.

Um, qualitative and quantitative, so data and also things like the founder is leading the company, it's got a monopoly position, it is the only game in town. It

Um, you know, it's got there's a few stocks that are like that, and then there's maybe, I don't know, a hundred of them. And there those ones set up even better because I don't feel like I'm going to get hurt as much if I'm wrong, and I can trade or invest bigger. So, that's one thing, too.

When you have a human lens on things, because you've been doing it for so long, you probably have a a sixth sense on certain things. Where I'm going with this is that um, you might know that the the weather is hot today, let's say, and the main reason for that would be, oh, it's summer. But then there could be other other factors like, oh, it just rained all last week and whatever else. Where I'm going with this is basically weighted, the the weighted nature of uh, reading information where the AI is giving you a checklist of is it found a lead, yes or no, yes or no, yes or no, but and it might just say, okay, three yeses, two nos, so that's the ratio. But

With your human lens, you're probably saying, okay, how important is these factor? And and even if there is more nos,

But the one yes is the big one, and that's what I need to focus on.

You can, you code that probably?

Yes. I want to, this is really fun to talk about for me. There's a guy named, I think it's Bernard Baruch. It's an old-timer. He has a, um, I think it's called, uh, it's a popular book, um, like one of those

Reminiscent of a stock operator type era books.

Okay.

And he, no, it's Gerald, Gerald LoB, or Gerald Loe is his name.

Okay.

And he had a thing called the ruling reason. And the ruling reason was the one reason amongst all other reasons that an asset or a stock is going to be good or or not good. Like if this

If everything else doesn't matter, but that's the thing that's going to move it. That's like the catalyst of the times.

So I try to really identify like, what's the main catalyst for the stock? The one thing that's going to trump the other ones. So, I I do weight that more. Not in the machine as much as in my head.

From the book, was there, did it tell you what were those things, or is it?

It's always different every time.

It's different every time. Like, um,

Yeah, it's different every time. It could be regulation eases. It could be that first turnaround in the first new earnings report that came out that that said the new direction of the company is the right one. It could be that one for somebody. For somebody else, it's we retired our debt and we're not going to go bankrupt, or or we cut the dividend and now we can focus on

And it could be any of those things. So, it's kind of knowing what you're doing in terms of, um, each stock to figure that out, right?

I do have a checklist that the AI will say, "Hey, your stock is six out of 10,

You know, it's or seven out of 10. I I do have that too,

Which I I enjoy having that, but because I can sort all the sevens or the eights and look at them, but I do definitely go in myself and look at those things.

Okay. You know, something I find cool is when I'll go on X, not necessarily for trade ideas or anything, but it's just to keep an eye on things, and you'll see a tweet from someone that'll be like, because yesterday was FOMC, and he'll be like, you know, the last five times, let's say, that the S&P has been at all-time highs and there's been a rate cut, then out of those five times, four of them price was lower by the end of the day. And then one year later, it was obviously much higher. So, you just pull out these random stats.

Um, is AI for deep research like this to pull out tendencies of, you know, there's this election cycle, that the year of election, this will happen, then the year two, then year three, all of these things that are data, but it's not something I can quickly Google necessarily. I wouldn't even know what to Google. Can you do these kind of deep researches with AI, or are you doing them?

I am not doing them, but I subscribe to a guy, his name is Charles Kirk, not the Charlie Kirk, but another Charles Kirk, and he has a newsletter, a stock letter for about 30 years now, and I've loved subscribing to him. He does a lot of this.

And he, one of one part of his strategy is quant studies. So he files the price action and does other things, but he looks at all the quant studies and says, okay, this is what people think right now. This is what Goldman Sachs or one thinks, but these are the quant studies, the five or six that match this period the closest, and they're actually saying something different.

So he he integrates that in, and I kind of do it through him.

Okay.

Um, you could probably use AI for it. He probably does, but I haven't gotten in. That's not a big part of my approach right now.

Okay. So when it comes to the final filter, it's gone through the AI filter, then the human filter, and now it's time to get in.

Time to get in. Yeah.

Time to get in. But then if it's chopping around, the consolidation, which you like, that consolidation could go on for for a while. How do you know when to get in? Because you could also lock up capital and be stuck in a trade that is a bit dead, maybe takes a couple months to play out. What are you looking in technicals to time your entry?

Oh gosh, we could talk so long. There's so many ways to think about this. So everything's a little different. So, if it's a flush on what I call stupid news or sentiment or a headline comes out that's not related to the business, um, kind of a BS headline, and I think it's ready technically, I'll sometimes buy that that dip with a smaller size, and then when it walks back up, I'll start adding to that walk.

Okay? And so, I'll do that. That's not happening a lot, but that occasionally happens. Um, the tight consolidation, sometimes I'll put on a little bit of a position, it spikes down and comes back, I'll add more.

Okay? I love retests. So, I let it make the first move, and then it does that deep 80% 90% pullback. That happens more on stocks that are already, um, there's a lot of bottom chasers, or there's a lot of, um, like any kind of a turnaround, or like Nike, or some contrarian Lululemon, they're beat up right now. You always want to be a late contrarian. You want to be late to the game because everyone's, all the value hunters are stuck, like they're already in there holding that thing, and the price action sucks. So, I like those deep retests after everyone thinks it's going to go, and then it comes all the way back down. And I like to buy that spot because if I'm wrong, it's like, well, there's the low there. I kind of know

That's your stop.

It's my stop. Or maybe I trade a little smaller, and I give it a little breathing room. And I like the stop. I don't like to exit the stop on the low during the day because it what happens is it takes you out, and it closes above it at the end of the day, and you you're out. So I always make sure that you shouldn't get out of those until the end of the day. I've learned. So I sometimes I'm loose. It's like I'll I'll trade smaller, and I'll do things that you you know, you shouldn't do, which is, you know, it's not that I don't have a stop loss, but where I've entered in the size I'm in, I can sit and let it breathe.

So, are you leverage trading here?

No.

Okay, then that makes a little bit more sense. But even so, if you have an invalidation of an idea, I can see the wisdom of, okay, well, it might tap in and then end of day, it might just close a little bit more favorably. But what if it doesn't, and then now you've actually got a bearish market?

Then I'm out if it doesn't.

And it's a marginal increased loss.

Yep. It's, yep, I'm out. And I'm willing to do that because I've seen so many times where they sweep it through a big level. And this is where like the other stuff comes into play because if I know that if it's if it's a high-quality stock and I've done my homework, I know that I kind of want to own it, and I know that technically everyone's got their stop at the same spot. So, I'm not super quick to puke it out down here because I actually want to be buying it down here.

So, I'm trying to give myself every chance to stay in it.

Um, and that's it's a little bit of a. So, so to recap, the re, the deep retests after the first move are one thing. Um, the really strong stocks, I buy those consolidations at the top because they don't pull back

As much. That was actually going to be my

The weak ones, I'm looking for those deep retests.

Yeah. Because let's say you've generated this whole idea, there's a big move ahead, and it breaks. It just never comes back for the test.

Yeah.

Will you then chase it, or will you just wait it out because it should come back eventually?

I don't, I don't chase it much. Um, I wait it out, and I might just be off the board for me.

Okay.

I don't want to chase it and then

And what are you using to identify the retest depth? Is it just a Fibonacci? You said 80 90% or?

You know what I've learned from Charles Kirk, the newsletter guy, um, is anchored VWAP, anchored uh, volume weighted average price. The anchored is basically the last move or last certain move. So you just take the high to the low of the last few moves, and it does a volume average weighted price of those.

Okay.

Those are kind of like the the new Fibonacci, or a lot of people watch them. So I I use those too. They don't, it's not magic. There's no, there's no free magic.

It just has probably a little bit more data than the

Yeah. And it's got, they work a lot of times. So, I'll use that, um, to to figure out how to to maybe get in if I really want to get in something. But, I have this fundamental, um, backdrop now that I used to not have. So, I'm kind of in the stocks. I'm doing it. I kind of have like an idea. This is already, you know, 30, 40% lower than I think it maybe should be. And I like the technicals. So, now I'm using the the retest and the anchored VWOP.

Got it.

Not just blindly doing it.

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So when you've got to the zone of entry, the the VWAP uh level, will you just simply execute, or will you wait for a reversal pattern, an inverted head and shoulders, a dogey candle? There could be many ways to trigger. You have an execution criteria, is it just on the level?

I just maybe get in a little bit before the level and a little bit under the level with a little bit. And I like to just hold back some, and then when it starts to work, I'll add to it. Maybe I add to more through the highs, assuming that I have a way higher objective. I don't mind like it show me that you're gonna that you're going to be right.

And then sometimes the next day it'll come down again, and if I'm not too big, I kind of sit there and wait, and then I

Now with the account that I'm holding for six months to two years.

I'm a little less trigger happy. I don't just get out during the day. I'm thinking more of, I don't care if it goes 10 or 15% against me. I'm looking for 100% or

Got it.

150%. I'm sized accordingly. I'm trying to enter, I try to enter them the same way on both accounts. So I want things to move my way right away. I don't want to hold losers, but I'm a little more liberal with the longer holding frames.

And I, I started investing quite heavily this year, so I'm still new to it all. One thing that has already started to bother me, cuz I mean, everything's been an opportunity right now. It's a bull market. And there's always been the thought of the opportunity cost of like, okay, I tied it up here. I tied up quite a bit in gold. Gold has moved a lot, but in terms of percentages, the same move on Tesla has been like triple the gain in terms of percent.

So then I've just been like, okay, how can I move it? Do I liquidate? But then what if it keeps going? Opportunity cost then comes to my mind. I'm like, I wish I could have double my capital, just load up on everything.

Yeah.

How, how, when you are holding a trade for six months, a year, and these long time frames, and it's working, but there was a better opportunity, or there is a better opportunity presenting that the capital could do, but then this one hasn't completed. How do you navigate money management here?

This is such a great question. I've been working a lot with my friend on this right now. So what we do is we, it goes back to the having some kind of a fundamental direction of where for the six-month to two-year type time frame, you have to kind of know where the fundamental direction of it is. So let's just say, for example, that I buy it at 40, and I my target fundamentally is like 80, and this is just loose. It could be 120. It could be, but it's it's higher. It's double. It's higher. As it starts getting up to 75

And starts to maybe waffle around, or maybe it gets way above the 10-day moving average, which is a little bit of a, you know, and then all of a sudden I see like a few other ones show up that are really high quality and have much more room. I'll I'll pill for that one for the other ones. I'll pe, and I'll I'll trade into the other ones, um, when I feel like they're set up and they're better. I don't want to cut really good winners because I, I know markets can run and run. Sometimes it just gets crazy, and I'm thinking, "Oh, I sold some of this off, and it just went nuts, and it doesn't really, it's it probably crashed back down in a year." But

So, but I will steal a little bit from ones that I feel like are getting more fully

Valued, which is something that isn't really a, it's a mixture of a trader and an investor. And that's kind of where I'm going with my my my career. M so I've had to confront those things.

You know, I've noticed a trend where a lot of traders that I've spoken to who as they've approached, you know, family life and and gotten older in their 20s, they'll be all about the intraday and lower time frames, and then as they get older, swing trading, then some just end up, as you're saying, investing. Do you think that's a natural transition for every young trader, young trader watching as they'll go into their 30s, 40s, 50s?

I think so. So I remember when I was in my 20s, I said, I want to live a whole another life doing this during the day.

And then it, you don't, I mean, you end up evolving. It's kind of like you just evolve. We we made a military analogy about, you're a soldier in the field, and then a lieutenant, and then a, there's probably better analogies now. You can't make any analogies anymore, right? I get in trouble for it. But whatever the point being that you learn everything along the way, then eventually you're overseeing the whole battle and the whole strategy. And I think that that's what you want to evolve. Like you want to get your highest potential, and so I want to, I want to handle more money, and I want to think longer, and I want to do it bigger, and this is the path, and it's it's already starting to work that way for me, but I have an intention to do it, and I didn't necessarily have that intention when I was day trading.

Because when I came out of college, it was like, all I want to do is day trade S&P futures. I don't want to do a real job. I want to play a game for a living, a great life. And then all of a sudden I'm like, I already have that life. It's amazing. I've done it. Now what do I do? And then there was like bumps and bruises, and I did some crypto, and that was good, and then I've kind of moved into this now, and that's going to be a bigger path.

And with the benefit of hindsight, was it worth going through the journey and then arriving here, or would you advise someone to say, skip the day trading, skip all of that chaos of, you know, overtrading and all of this stuff, because even if it works, you can do the same thing, same same gain without all the headache?

Oh my gosh, I have to take the journey. I would never be, I would never be who I am because all the the the risk management and the scars and the I've seen so many crashes and crises and bubbles, and all that stuff has strengthened me to handle more money, to handle bigger scale. If I didn't go through that, it's just theory. It's like putting someone in there who has all these, who has all these, um, ideas and a lot of intelligence, but hasn't been tested.

So, it's kind of like, it's that Mike Tyson quote about, you have a plan till you get punched in the face. It's, I've been punched in the face a lot.

So, it doesn't mean I won't get punched in the face again, but, um, it

You're more ready.

I have more readiness. Yeah.

With the exit, getting out of a trade. Now, we've gone through the AI filter, and then the human filter, and then the technical filters. That's how you got in. Will you follow a similar fashion to get out?

So, yeah, great question. Again, um, I spent so much time on this. Exiting, selling a trade is a totally different business than buying it. I think it is a

Different.

Totally different business. Like where you want to get in. So, we talked about fundamental screeners, we talked about AI tools, technical tools, retest, narrow bars. None of that matters on exits. Maybe the fundamentals do a little bit. Exits is different. Exits is like sensing sentiment and euphoria and feeling fully valued, but everyone's already in, and the stories and the news are already out there, and that's been satisfied, and having a sense of that. And it can go way further, but that's like a, a training you have to do to just kind of understand like that your idea is already priced in the market. So, some technical things you can do are like big gaps above trend channels on a weekly chart. You can do runaway moves. Like, um, I used to follow this guy, Jesse Stein. I was in a group with him. He wrote some, uh, insider super stock book. He's got a book out. And one of the things he always said was 50% over a 10-week moving average.

Not on the first advance, but like later in the move. So think about a 10-week moving average is like a 50-day moving average.

Okay?

So 50% price over

What would be the 50-day moving average. Isn't an automatic sell normally, but when the move is kind of mature, and everyone knows that tends to be the spot where it either is down or sideways. So, a lot of times I'll use that to get out, and I'll use that to start pairing back at least.

But would you sell on the euphoria on the big bullish candles, or would it be big bullish candles, sentiment shift, and then a rounding off?

I, well, it probably be smarter if I waited for the rounding off. Often times what I do is I, I do some of it on the euphoria, and then on the rounding off or the failure, I'll start saying, I'll let it come back. If it's a really good position, I'll say,

I sold half this, I sold two-thirds of it, and I'm I'm finally going to let it go. So, it's interesting because I think that logic makes sense of like, wait for the rounding off. But typically, especially when you approach all-time highs right now, because where we are in the market, I've been looking around of like what happened previous all-time highs, and it's never given that clean signal, guys get out a shoulder pattern or a consolidation. It's just like one day was indecision, next day is just down.

But the quantum stocks happened before they're rallying again, but they had that big rally, and then all of a sudden it's 60%. And

Yeah.

I think the quality matters again because when you're in high-quality names, like think about names like Microsoft, and and you're in those names after the trade war, or whatever, you have 40% of them, 50% of them now. They don't just disappear in a day. Yes.

So it depends on what you're in. If you're in like story stocks or space discovery cool stuff, that that stuff can go down 20, 30% in a day, and then you get stuck where you're thinking, oh, I'll let it bounce, then I'll get out, and it's just like, you're not getting out.

That's the tough one.

So I will, so you have to know your your stock. So, if I'm in those stocks, I'll know that I got to take some off on the way up, but I do like to trail it with a moving average because sometimes they just keep going.

Yeah, I was going to say, when when you have all-time highs like we are on so many things right now, there's nothing to look at on the left. Everyone's bullish. There's a bit rate cost, like there there's just mixed opinions at this point. How do you navigate that? Do you then just dollar cost average out, or?

I think so. You good question. These are the questions that I think people need to, they need to ask themselves first. The reason I ask is because these are the questions I have right now. With

There's like a a thing I go through in my head is like, okay, first of all, what trades do you have on, and what longer holds do you have on? If you have longer holds on, did you get a really good spot? And are you up 50%, 60%, whatever? Maybe those are okay if you're sized right.

But I have to think, I because I've gone through this so many times, when the market comes off, it's so painful because if it comes off 10%, your stuff comes off 50%. Yeah. You know, when you're in those names. So, you have to say on the trades, how much do you believe in them, and how good is your spot? Because probably what happens is when they come off a little bit, you're going to start to crap yourself, and you can't hold them. So, you need to lighten up ahead of time. You need to lighten up into the euphoria on some of those like more fast money type trades. You just got to get out on the way up, and you can hold a little bit because what happens is when it all comes down at once, you're going to be barfing the worst possible spots right before it goes back up. Yes. And everyone goes through it. So, you have to start taking measurements ahead of time of like,

Clearly this is this is sized and time framed. It entered for something three years from now. That's fine. But if you're entering something right now after we've gone up this much, it's just like

It's hard because you don't want to sit in all cash, but you might have to be in cash for a little bit when it's real dicey, and you don't, the risk reward is not there for new entries.

An interesting observation I have because now my investing account is quite larger than my trading account. Yeah. Because I moved over capital, uh, because I realized if I'm doing one trade at a time, I'm not using all the margin. So I've just got dead capital here. I might as well put it to use. Um, and then I can maintain the loss size. If I go through a rough period, I can top it up. That's kind of my wisdom. So, this account is way bigger. But the difference here is that my day trading accounts, I might risk half a percent on a trade, a 1 to three, a 1 to four risk reward. So, a trade for me, I'm used to seeing a number of like 2%, 3%. And and that's the number size I'm used to. Now that I've got a bigger investing account and I bought the lows of the tariffs, I'm seeing 40%, 50%, and they're running. They're not realized gains. So they're just numbers I'm never used to seeing on a screen, and daily volatility sometimes scares me a bit. So now I'm just thinking, it, we're at all-time highs. If I give back two days worth of bad price action,

That there's going to be an amount that that I'm not going to like to see. So the pain of the size of the numbers is actually larger in the investing account, which is not something I was I was expecting, cuz the action is in the day trading account.

When you transitioned and the numbers changed, how did you navigate that? Cuz that's an issue I'm having right now too.

I just love this question because I normally when I talk on podcasts, I don't, we don't get to these things because that is a huge thing that I've had to go through because I started off as a trader, but eventually since I had some success as a trader, I had money, now I'm a money manager and an asset manager for myself, and eventually this has happened to me. Now my trading account is not as big as my investing, my investing accounts outgrown it. So the swings in my longer term are bigger than my trading swings, not always, but a lot of times they are. So what do you do? I mean, now all of a sudden it's almost like the job that you, you gave yourself is when you've outgrown it. That's a different skill set. So that's why I've, I've transitioned and to be able to handle it and probably move in that direction. So I've had to really learn to know this is the time frame. It's longer. It needs to be sized differently. And you really have to deal with that ahead of time. You can't just think about it when it goes down. You have to have a plan ahead of time. And it's sitting down and really being like, "Okay, I'm gonna cut these in half when they come off the five-day moving average because I'm just, I'm not comfortable. I need to raise cash," or you have a plan where I'm moving into being a longer-term investor. I have a business, and I don't care. Like, I know what I'm in. I believe in it. And but your trading account almost seems significant at times because there's so many swings in your other account.

And that's something that you have to just, you have to deal with that. You have to figure out how to deal with that.

It's also the maybe it's current markets, but 70% right now, my earliest entry on Tesla is about 70% up. What the hell is that? Like, if you're comparing it to day trading numbers, it is just, it is just a different comparison. What I'm trying to do right now is just avoid looking at the numbers, the dollar amounts, and just try and look at the chart. But I will give it a peak, and I'm learning on this on this front. When it comes to investing, though, one fallacy maybe that I've given myself is that, well, if it's if it, if it goes back on me, sure, it's okay. But then I just transition be like, well, I can just hold it longer because the index will just keep going up. Gold will just keep going up because it's, it's baked into the world. The the economy style that we're in is like, if they keep printing money, where is the money going to go? It's going to probably filter down to these assets, the stock market, gold, and so forth. It's hedged against, gold is hedged against the US dollar, let's say. So, is it wrong for me to just think, well, if it starts to suck for a bit, just leave it in there, wait six more months, it's probably going to be all right?

No, I mean, it's not, it's the right way to think big picture because it's true. The problem is is that depends on where you got in and how much money it is for you, because stuck

Because what if the market comes off 30 or 40% over the next year and a half, and those high beta names are going to come off 70%. We've seen it already. It, it will happen. And then you're going to be like, "Oh my god, I, I've lost all my investing money. I'm not trading well because I'm frustrated because we're going down every day, and I'm trying to buy dips." All of a sudden,

You don't want to buy it then when you should. You're getting out when you should be buying it, and you didn't create any dry powder. So you can't, the pullback is not really helping you because unless you're making a ton of money in your day job, you don't really have dry powder. Yeah. So you have to like, you have there has to be some accounting for that. I'm not suggesting you're always getting out of longer-term trades, um, because they're maybe they're investments, but it

It's why I have the six-month to two-year type thing going on here because there are moves to be made still. It's not just set it and forget it. I think there sometimes in a retirement account could be a index fund. Set it and forget it. You buy the trade war. You'd buy it when there's crises in the world. Every time we're down 20%, you buy it.

Okay, that's a passive strategy. It's probably better than trading for most people because trading's hazardous to most people. It's

It's also a case of like, as you get older, you you have more capital.

The the unsexy 15% 20% in a year, it seems all right, fantastic, exactly, superhero. When you're in your early 20s, and you have less capital, you're chasing the bigger numbers out of necessity. And I think that's something that's that changes. What about the idea of sitting cash? How do you fluctuate that? Because it's all hindsight to know, okay, this was a bull or bear or reversal point, but where is the place of sitting cash?

You mean like how do you get comfortable when

Let's say, let's say I got a million dollars to play with. Should all of that million be deployed, or should I

Oh, okay.

How much should be sitting like, no, on the sidelines for next opportunities, or as a safety net?

Yeah. Like say you and I were running money, and someone gave us a million dollars, and we have all these good ideas. What if they give us the money right in the middle of the of the the thesis playing out halfway?

Yep.

Because it's like, well, I don't want to buy these people in now because it's already. Yeah. I've already got in a lot lower. I think you have to just, I always like the hybrid approach for everything. So, I, I sell some into the euphoria on the selling, and I sell some on the rounding. Same with this. I look at the ideas and I say, "These ideas have a lot of juice left in them. We're going to do some now. We're gonna do some lower, and we're gonna just wait, and we're gonna I think you're gonna do like a little bit of a, a halfy, you know, half and half, and a third, a third, a third, and you're never going to make full moves in and out unless,

You know, there's some big crash and they give you the money right after COVID, or right after the trade war. Maybe you decide, well,

This is something that I feel like is a good opportunity. The last, uh, yesterday actually, I was at a CTA expo, which is a fund allocator and hedge fund managers meet, kind of networking event, and, uh, in New York. I was at a similar event as well, and I've just in the last week, I've come across a lot of big players, professional players, and what I found interesting is that they, they'll about each other, and what you come to realize is that they are the professional world, but that doesn't mean they're superior in any way. And what I've come to realize is some, one guy was just there was like a happy hour after the event, he got a bit tipsy, starts opening up, and his story looks like it's the story of many. And even some hedge fund managers I've spoken to off camera, what they'll tell me, the reality is most of these guys are collecting management fees, and because they get a, you know, a 20% performance fee, but it's on topline, so it's not like, oh, the S&P will do 10, you did 20, so your performance is the 10 extra. No, it's on the whole thing. So a lot of these guys, one guy was boasting to me yesterday, he's like, I'm managing 100 million now, so my management is already millions, and just to get up out of bed, if by whacking in the S&P, I'm already making, you know, the many, many millions a year by doing nothing.

Yeah.

And his approach was, I'm not incentivized to try because my investors don't want outsized return. It spooks them. And if I try and do creative things, I'm also going to risk losing and then lose capital. So, they're incentivized just to keep it in the S&P and the simple things.

But yeah, cuz being normal is what stands out to gain capital. Being fred doesn't help them, which is counterintuitive because you think the guys with the better track record get the more the more capital. It's just not true. Um, so you just have guys out there that throw into the S&P and make millions of dollars at XYZ. My point here being, why even try? What's the point of trying? If you've got a decent account size for investing, why not throw it into the accepted indexes and so forth and ride that normal game?

I think it's just the thrill of like, for me at least, it's just I love the craft. It's just going to a higher level, finding your potential, finding other people that can help you step up your game, and just learning and and doing it on a bigger scale is is exciting. And it's like, you mentioned 15, 20% and now with the numbers we're seeing, it seems like, oh, who cares? 15% a year is like, those are legendary superhero investors who do that. Compound that over time because the the market's what, 10% over a long period of time. So, I mean, that's even beating the market by a couple percent is worth billions of dollars a year if you can do that.

So, it's weird when the numbers are flying around, but that's why the defense and the risk management and then not making like bad investments at the top of the cycle and things like that are are what you get paid to do because that's the stuff that is going to come back and bite you later. So, right now it's, we're kind of at, I'm not saying it's going to end soon, but it might just get way crazier, but we're it's getting kind of crazy, and it, it might get a lot crazier, and then that at some point there'll be like a, you know, one of the big AI companies might come out and say, we spent a lot of money, and we're going to spend way more the next 10 years, but for the next couple years, we're going to kind of cool it and work with what we have.

Okay. Oh.

Yeah.

Everything's down like 50% these high highf flyer names, um, over the next few months, and then it'll go back up again. So that's just the reality of what's of things that could happen. So you have to think about that along the way when, and that's why you use like the percentage over the moving averages, and my my investment account is an uncomfortably large amount of my net worth, and my trading account doesn't even matter anymore. It's like, okay, well,

Maybe you need to get out of 30% of all this.

And that's okay.

Yeah. It depends. Yeah. It depends on like what your situation is. If you're making, if you have a salary that's coming in that's big every year, you could just keep traveraging the salary, and it depends on on what you got.

You mentioned earlier you were trading crypto, and it seemed like it did well for you.

When it comes to investing, what is your philosophy if you are investing in crypto? How would you diversify yourself and and what do you weight it towards?

Yeah. So, I was in crypto earlier, um, 2016, 20, 2015, 2016, 2017. Um, and I didn't, I wish I would have held my stuff forever, like a lot of people, of course, I didn't, but I, a lot of my old trading things came back, like like the Bitcoin goes up, and, uh, or sorry, Bitcoin goes down, and Litecoin can't go down. Bitcoin stops going down, and Litecoin explodes. Like all those old tricks worked for a couple years when it was new. That's another just an example of how things that you that may have stopped working for you can come back in a frontier market or a different. So they do, they do come back around.

Um,

I don't, right now I have like, I think I have some Ripple, and I have some, I don't even have any Bitcoin right now. I still have my Bitcoin. I sold it out around 100,000. I bought it after, uh, I bought it before the election and sold out. I did it as a trade.

Okay.

Um, I wish I would have held it from when I first been in, but I've had nice, I've had great trading chunks in it. Um, here's what scares me about, I mean, everyone has an opinion on this, like talking politics, but one thing that scares me about it is that there's a religion around it. I always get scared when there's a religion around my assets. It certainly seems like it needs to exist. It's the future in a lot of ways. Um, I'm worried that they could hack, um, Satoshi's coins one day and have a 51% attack.

The quantum thing is like probably going to be fine, but it's always a concern if someone gets there first. There's always a fear like they have the Bitcoin obituary where it just keeps going up. But, um, I just, I don't like a religion with a sailor and Michael, I love him, and I love, I just really root for him, but I always get terrified when there's a religion around an asset that kind of keeps me a little bit

Skeptical. It's an interesting debate, and I've had the debate with many, and I've had both sides of the conversation, and I never knew where I lie. That's why I asked the question. But as time has gone on, and I've just understood what is money? The history of money. Okay, it's a store of value. It's, it's

A means of transaction. There are certain definitions of money that has been corrupted now with what fiat currency is because of the reckless money printing and the debasement and then the inflation. Especially the US can be across the world, they can export their inflation because of the petro dollar and XYZ. But I've come to realize that if I keep all of my money in US stocks, if I keep it in US indexes, if I keep it in US dollar, I'm also not thinking about, okay, you don't expect the downfall of the US, but what about just hedges towards this? And when someone mentioned to me this idea that the US dollar, they'll print and they'll keep printing forever. So it's going to just naturally debase. We call it inflation, which is supposed to be healthy. Bitcoin, they can't do that because there's a limited supply. So by virtue of if people are buying Bitcoin with dollar, and dollar is just going to keep debasing, that flow of money, the new printed money, is going to end up in things with finite supply like gold, like Bitcoin, and that's going to be the inflationary point or the appreciation points. When I understood that, I was like, that makes sense to me. Else made sense to me. But that is like, okay, I can hold on to this because it's a long-term play. It's like you're you're hedging against the money printing that goes on.

That is a one other thing I like to support that argument, and I I'm super favorable that argument too, is that well, you want to be there's a tail event where Bitcoin can just go nuts, and you want to have something in that. You want to have some, you want to have a horse in that race. I totally get that. Um, I also think if you buy good productive companies that are doing neat new technology that are stable, that's going to work well too. Like those assets. There's a lot of ways, you know, I I had a lot of relief one day when I thought about it because when I was missing when I sold out my Bitcoin at like, I think like 98,000 and now it's at 1616.

Oh, you know, you're you don't have to own one thing. You can own a lot of things. You could have owned gold. You could have owned, I mean, look at all the AI stocks, Nvidia. Look at all the, there's a million names. So, you don't need to freak out when you don't have one thing that's working because there's always another opportunity. There's always another thing. And all fiat is junk. They're always debasing. It's it's it's it's going to happen for sure. And yeah, that's hard money. You can't make more of it. So it that's the a very strong argument. Um, but I I just you just got to own other things than the dollar is the biggest thing. But there are moments like we talked about where the market will correct 30, 40% and you have to do your work on your personal work on is my situation financially able to handle a 30% pullback when I'm loaded up.

And that's something that each person usually the reason the way that you figure that out is pain and suffering. Yes. Three or four of those, you get cracked on the head and you realize you kind of learn where is my pain point. I've had so many of those now where I kind of I'm doing my work now ahead of time. My trading account is starting to move into cash more more by the day. My investing is still pretty heavily in, but I have good entries and I might be pruning and shifting and I'm kind of just I'm riding the wave, but I know I've learned, you know, how that feels. So this conversation I was expecting it to be uh not this, and I'm glad we ended up here because it's been very useful for me. But a lot of the audience are probably newer in their career and probably not really investing, and if they are, it's just, you know, symbolic money. So I want to we've talked about like, you know, after the 10 year mark when people have matured in their trading, transitioning things into investing and growing, just I think just financial maturity or remote financial mo. Let's let's try and bring it back for the last portion of the pod of them the the new trader one to three year mark who who is trying to just battle and navigate through the markets as a whole, what is something that you can give with the benefit of hindsight of saying, okay, in your first couple of years, focus on these couple of things.

Yeah, um, I'm really glad we had the conversation we did too, I'll say because I I don't we don't talk about this as much and it's fun to talk about all those things. But back to the the new trader. Um, the biggest thing I did is I stayed very curious. I tried a lot of different things, kind of part of my personality that I'm grateful to have had, I guess, and I always latched on to people who were on the same uh same wavelength or path to me. So I I think that in business as Slimm said that if you have a co-founder who's very different than you, it can benefit the business.

Because you don't step on each other's different brains, right? Yeah. And I I understand that that can be true. I think in trading you have to be you want to find role models that are similar to you because if you're arbitrageing the five-year interest rate note or the whatever something very slow moving, and I'm trading tech stocks, it's kind of like.

We might not be the best combination in terms of learning from each other, and I think that you really want to get with people who are seeing and doing things or have a similar wavelength or or vibe or personality that you do because it can help you. If they're successful, they've already gone where you want to go, and you can kind of follow along a lot. So, I did that for myself. I found uh at my firm in Chicago, I tried to find some people, and now online you try to join groups. You you you I get like fatigued with it where I don't do it as much anymore, but I join a group and then the chat room gets annoying and people are making comment, you know, they're bragging about their P&L and you get all that stuff, but you make a couple friends and you pick up a few things. And through my podcast, I've gotten some good friends and you you start to find your own little community. So I really encourage people to reach out, email people that they connect with, find your own community and have an when you have a strong intention, people kind of come out of the woodwork and meet you where you are. And along the way that, you know, that when the student is ready, the teacher will come, the saying you start to find people who kind of help you.

Yes. Step up to where you need to go because I'm still finding people now that. I just am meeting that are helping me go and do things that I didn't know that I needed to learn. I've asked that question a bunch to basically every guest, but I like that answer. It's an answer I've never got. But now looking back at my journey, all of my friends are traders. Virtue of the pod, but also just you you get along with them. And even the friends that I made online uh through Discords and whatever, they stood the test of time, which you wouldn't have thought. Online buddies and whatever, and you meet in real life, and you're like, "Oh my god. It's super weird, but it's actually exists. It's it's cool that that's how life works out." And it's what you said of of traders are technically non-conformist like an entrepreneur. You have a path in front of you when you're a you're a teen and you go to high school and you're supposed to do this, and then we veer off and do something else. A lot of people that veered off with you, you probably have similar mindsets. Why not why not work together? Why not learn from each other's support? Even if it's just accountability, there's a lot of benefit there. And just to actually wrap up, any any final thoughts? Any any lasting piece of advice you want to give?

Um, I think the biggest things we hit on that I really enjoyed and I find to be so helpful now are there's a level of achievement somewhere that's peaceful and much more successful than grinding yourself. And it doesn't mean you're not working hard. There's this difference between working hard and working smart or working in flow. Kind of like an athlete who's just playing hard defense, loving the game, um, enjoying the crowd, and then all of a sudden you you start to make shots and you're just you're doing it for the joy of the present. You mentioned earlier like you want to be present every moment. I used to do these meditation retreats all the time for 10 days and wouldn't talk or anything.

That's intense. And I Yeah. And I I think I needed to do it along the way, but now it's like. But that doesn't mean anything if you don't do that in your life. So now it's like you don't need to sit on a cushion and be quiet. You just need to do feel everything each moment. So if I keep feeling the emotion, feeling the oh that's not right, feeling the trade, get out of this, and just stay fresh and stay light. And I think if you stay light and fresh with what you're doing, things just start coming to you. And that's what I try to do now is really go with the flow. And that that's follow the trend in the stock market, that's follow people in my life who are who say they do what they say. They're accountable. Um, they we lift each other up and cutting out things that are like not like telling people I don't want to hang out with you, but it's like a stock too. It's the same thing. It's this isn't really working. Let's just move away from that. And I've really tried to I've noticed that the people who have done really well around me have been like that, and they might not have even realized it. So I'm trying to continue to cultivate that way of living. I think it's a easier way to do it.

Right. A beautiful message and in the end, a wonderful podcast. I really enjoyed it. Different as usual, but I hope the audience enjoyed it. Thanks for having me. Thank you for coming on. Yeah. Thank you. Beautiful stuff. Boom.