Verified Trader: I Took $2000 To $12.3M Trading ONE Main Setup!

This trader went 158 days straight without taking a single loss, turning a $2,000 check to over $9 million.

There's super high win rate strategies that have pretty poor risk-reward. And I've always been on the opposite side of that where I would rather sacrifice win rate to have amazing risk-reward. A lot of times that happens when I pyramid positions. I might have a position that I could close for a small profit, but I'll add to a winner. I make 10 times as much because I aggressively added to a winner.

Introducing David Hanlin, better known as Laptop Legend, a trader who lost nearly a million dollars in an hour. And he didn't just survive. He rebuilt his entire strategy to become one of the most disciplined short sellers in the game. In this episode, David reveals how he turned $10,000 to a million dollars in a single trade, as well as his exact three-step process to spot the top of the move with scary accuracy.

Normally, I like breakouts, but they do inherently have a much lower win rate than a mean reversion type strategy, if you know how to time it correctly.

Explore that with me. I would just assume a breakout with the trend would be more favorable and a trying to pick the top seems more dangerous.

When you get in a breakout, the idea is you want to have pyramiding is basically the idea of when the trade is going your way at a certain point, it develops a structure where you can realistically change your risk and move it to a tighter position. You can then add to your position and get up to the same dollar risk level that you had originally. And so if you have multiple opportunities where you can move your stop up and get a tighter stop and then increase your size, you can get to the point where you might have had a 10k initial risk on a trade, but you just get so big that that 10k initial risk turns into a million dollars.

If you break even a trade or if you move your stops to break even, you didn't trust your analysis. You haven't done the work correctly. Just overall managing a position, it should be a more set and forget thing of like if you made a decision to get in, you got to see it through.

What would you say to that kind of belief?

I can understand that argument because I want to take a technical deep dive today and really explore what it took to get here, the specifics. But I want to start off with when you see trading, do you explore it as an art or a science?

I think it's a little bit of both. Um, there's definitely scientific aspects to it where you have to be very analytical and go through the past and maybe, um, yeah, study what happened and come up with a thesis and go through all the charts and figure out exactly what it is to to prove your strategy. But at the end of the day, um, the way that I do it is is kind of an art because I'm not one of those extremely systematic people, um, who can say if a stock goes up 10% for for three days straight and then does X and X, then I'll bet this much and cover here. Like that's not what I do. So what I do is I just I look at the past and I take that information and use it to, um, basically make a a thesis of what I expect to happen. And so that's that's like intuition from the scientific side of of studying it.

So I I used to h I had this conversation with many traders and it used to be more in the science category is the conclusion I came to. You you make the scientific process to build your edge and then you know you follow the data. It's always about data and then, uh, this trip on this US tour I've spoken to quant traders who are completely systematic and use their algos and then, you know, a lot of professional traders and I realized a lot of these guys are intuition and market experience and decades under their belt, uh, and how they deploy to get super interesting.

So, I want to navigate this of like, um, as you've had years under your belt, how that how that explores in terms of, um, how you deploy your edge. But before we get there, can we set some foundations on what are your key performance indicators, KPIs in terms of trade frequency, win rate you aim for, profit factor, risk-to-reward, and average trade, average hold time, just so we can kind of get a framework for the conversation.

Sure. Um, I don't have all of those data things, um, specifically. I mean, I guess I could try to go look them up. Um, I know my win rate right now is about like 41%ish, um, over the course of my career. Um, risk-reward, it just depends per trade. Um, profit factor is something that, um, yeah, I I don't have the the current numbers overall between all my trades, unfortunately. But I would say, um, there's there's different types of strategies. You know, there's super high win rate strategies that have pretty poor risk-reward. Um, and I've always been on the opposite side of that where I would rather sacrifice win rate, um, and have a sub-50% win rate to have amazing risk-reward. And a lot of times that happens when I pyramid positions. Like I might have a position that I could close for a small profit, but I'll add to a winner and then it ends up turning into a loser a lot of the time and that kills my win rate. You know, I could have a 60% win rate if I didn't do that. Um, but the ones where it does end up going on to work, I make 10 times as much because I aggressively added to a winner. So that's kind of my philosophy.

Explore with me, uh, this idea of pyramiding to be done effectively and if you have any recent trades to share with us around this idea.

Yeah. So pyramiding is basically the idea of, um, you know, you put on an initial position in a trade and then the trade begins to go your way. Um, and when the trade is going your way, at a certain point, it develops a structure where you can realistically change your risk from where it was originally and move it to a tighter position. And so when that happens, you can then add to your position and get up to the same dollar risk level that you had originally, but now you have a larger position. And then if the position continues going in your favor, you could theoretically do the same thing. And so if you have kind of a big picture trade where there's multiple opportunities where you can move your stop up and get a tighter stop and then increase your size, and then the same thing happens, you increase your size, move your stop up, you can get to the point where, you know, you might have had a 10k initial risk on a trade, but you just get so big after adding and moving your stop up that that 10k initial risk turns into a million dollars.

Mhm.

And that actually happened to me recently on this Bitcoin breakout. Um, that was like I think in the middle of July, if I'm not mistaken. Um, where I originally took a $10,000 risk on an options position. Um, and I was able to pyramid that into a million dollar gain after like four days.

Wow. Wow. Story is crazy. And and when someone hears those numbers, they're like, "Wow, I'm going to do that right away." If we can kind of draw a line, maybe it's a blurry line, but just kind of what is the separation between euphoria, greed, chasing a trade and you know, getting overzealous on an idea and over conviction versus the art of doing this correctly in terms of, okay, this is scaling in, this is a derrisk the principle, and then ladder in, how do you, how do you deploy that differently?

It's it's very difficult. Um, you know, there's a lot that goes into it. And I think a huge part of it is having put the work in before to know how the stock that you're trading moves and like what what the tightest pivot points are that you can be adding on, um, and not just adding randomly into strength because if you add too much too soon, uh, into strength and then it pulls back, like you're going to ruin your average and you're going to stop out for a loss. Um, and so, yeah, I think really you just you have to know exactly where those those pivot points are. Um, and that's something that only comes through experience and just really knowing how these patterns play out and having a bunch of examples of them.

I usually get to kind of entries and and uh, break even drills later on, but we can explore it since we're here. Is the is the philosophy here that the first trade you got in with the 10K risk in this example, it's an independent trade with this independent trade idea, entry criteria, and XY Z. And then once that starts to ride into profit, do you have a break even protocol and then reuse that principle on the next position?

Yeah.

Okay. So it's it's, uh, it's not necessarily increasing risk. It's, uh, recycling the same risk is what we're doing here when we pyramid.

There's different ways that you can do it. You know, um, as your conviction in a trade grows, you of course could choose to use more risk than you initially had even on the on the first position. Um, but typically the best way to do it is is to not do that because obviously the farther the trade goes in your favor. Like theoretically, maybe the worse the EV is getting, um, at that point because it's already so far above your initial, uh, entry. So, you know, I think it, it doesn't always make sense to to risk a lot more on those later entries.

How would you do it? Uh, would it be like following it with an EMA or is it kind of market structure related?

Um, I think both. Yeah. I mean, me personally, I prefer to use market structure. Um, and just like, you know, for example, on the Bitcoin trade, um, I had a trade back in November of last year where I made like, I want to say like 300,000ish on on the breakout. Um, but I learned a lot because in that one I did a terrible job of pyramiding, um, overall. And I just, I kind of fumbled that aspect of the trade because every time, um, this that it was working and it would break to new highs, I would be like adding aggressively on those new highs with a really tight stop and then I would just sell those ads on the first pullback. Um, and that actually ended up costing me like, I think an extra $100,000 and I never got to have that extra size versus if I did it the way that I did on this most recent trade, I probably could have made a million on that trade too. But I learned those lessons from that one where like the way that Bitcoin likes to go a lot of times is it will have like a support level and it'll wash out under that support level and then it will go once it flushes everybody out. And so that is specifically what I was looking for on this. Like the daily structure is still intact. It's it got really tight and then it broke out through, I believe it was the 112 level, but don't quote me on that. Um, and then once it did that, then it kind of confirmed my overall thesis on the daily. So at that point, I was looking for these washes and reclaims to be adding size and risk versus the low of that wash that was under the support level versus before I would buy as it's going through resistance and a lot of times it would just clear out over resistance and then come back down into mid-range and I would just puke it at lows because I was, you know, oversized with a bad average.

I trade a currency. So a healthy currency market is generally maybe on a long time frame, but it's a consolidating market, uh, unless it's a very weak currency that we're trading. But in the stock market, indexes, crypto, generally speaking, they're an appreciating asset. So there's a baked in trend when you are entering at all-time highs or extremely high periods, you know, around 100k and beyond on Bitcoin, for example. Um, and I remember off camera, you're kind of saying some trades are intraday, some trades can even be swing. Is this idea of like, okay, if this intraday plays works out and I've got this appreciate, I've got this tide on my side, I might as well ride it into a swing trade and beyond, or is there different models for different times of the year?

I think when I'm, yeah, whenever I'm going into a swing trade, I always have the idea that it's going to be a swing trade, um, just because the way I structure trades are are very different if not for that. Like if I'm in a day trade and I buy something and, you know, it immediately, for example, in the options, I think I was up, um, by the end of the day on the entry, I'm pretty sure I was up like 100% on the options. You know, if that's a day trade, I would be taking that immediately. Um, but because I had the swing trade thesis, I ended up holding those and selling for like a five or 600% gain, um, after three or four days. So, uh, it's just a very different trade plan when I come in knowing that it's going to be a swing.

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Is is your main technical driver because I'm familiar with this Bitcoin play recently. Is is are you are you kind of waiting for a range, a consolidation, maybe call it an accumulation, and then trying to anticipate the breakout and directional bias, or was this just one trade example kind of thing?

Um, I think that's just one of my favorite patterns in general is just a a big picture breakout where you get a really nice move and then the stock or asset, whatever it is, um, forms a really tight range and then perks through that range. Um, that's just one of my favorite patterns of all time because especially if you, if you structure the trade the right way, um, before volatility expands, you can just get some incredible risk-to-reward on that. Um, and if you pick the intraday spot because you know that the daily is super primed, like you can, I literally risked like on, um, on one of the ETFs, I risked like 10 cents on BitX. I risked like 10 cents on my entry and ended up getting like $10 a share. CS.

So when when all the time frames align, it just, you can get some incredible risk-to-reward.

I'm with you. I think a lot of people steer away from consolidation because they, it's noise and and it's choppy and, you know, this is not the mover and then they'll get into trends because the trend is your friend. Sure. But the asymmetrical gain here is really if you can get in before the, you know, before the move, before the breakout. I want to, if you can follow me, uh, mentally here, I want to describe an inflection point and and kind of hear your elaboration on it. So, when you have a range, uh, let's just call it a box where you have equal highs and equal lows and we just got a very static range and then you shoot higher. You're breaking out of the range. Now, you're obviously going to have the breakout traders that are going to be waiting for a pull back into the range, maybe a break test, maybe a Fibonacci, an EMA, and they're going to look to go long. And then you have the other side of it, which is the same breakout, but then this is now intended to be a sweep of the highs, grabbing the liquidity and stops, whatever. And then it pushes to the same mid-range area, but then continues lower. So, you have a point in the market, this this inside the range where the price action prior is exactly the same, and then it just ends up in completely different directions. How do you differentiate, uh, considering yourself being kind of a breakout pattern trader here, um, to not be on the wrong side of the market?

Um, I prefer when it gets very tight. Um, and I mean, I think probably what is it, the, um, I think it's called the ascending triangle is is my favorite type of pattern where you have like a flat top and an increasing slope into there. So it's like a very, very tight compression versus if you have, um, you know, a range like this, to me that's still fairly loose, um, and it's just harder to have a defined risk point because it could break out above and like come back into the range, but it still wouldn't have broken the support and I just, that's not really tight enough for me. So.

Bitcoin was doing just that in this period. It was ascending.

It was getting very, very tight. Yes. Just like that.

And, um, is there any telltale signs inside that compression that will kind of give you an idea of like, it's more likely to break out in that direction, not that direction?

Um, I mean, I tend to think most of the time that when you get, um, ascending support and like a flat resistance line, I tend to think that's going to break up to the upside. Um, and when you have a, you know, a flat support and descending resistance, I tend to think that's going to break to the downside. And you can get the symmetrical ones where to me it's a little bit more 50/50. Obviously, they can end up breaking in whatever direction. But, um, I love taking breakouts and I love taking breakdowns on the short side as well when you get the flat base and the the descending.

And how do you, how do you go from trade idea, for example, this technical pattern that we're describing, to go from idea to execution? What is your, what is your protocol to take this as actually, I'm going to enter now today with this entry, this stop loss.

Um, there's certain things you can look at, um, depending on what the time frame is. Like maybe you need to wait for the EMAs to catch up or the SMAs to catch up and everything to get coiled and very tight. Um, and that's usually what I would look for on like a bigger picture trade. But yeah, I mean, I think once you've seen the structure of the market enough, like you kind of know when price is ready to go and when it's not.

Mhm.

And that might sound like hard to replicate, but there's just like, once you've looked at price enough, like I've gotten to the point now where, for example, Ethereum right now, like it's building a nice flag and I think at some point this could break out and go well over 5,000, but, um, it just the flag didn't look ready to me yet. And so, you know, there's a lot of people who maybe were positioning long thinking that it has to break out. Um, but to me, it just looked like the flag needs more time to develop. And so when I see that, I'm just, I'm trying to stay out of that because the worst type of market for me, uh, where I take the biggest losses is a choppy market because I love betting, um, just on like the continuation, whether that is, um, because you get a huge parabolic move and I'm betting on continuation to the downside, or I'm expecting a breakout and I'm betting on continuation to the upside. But if I bet on something and then it pulls back and I cut and then I flip short and then it comes back up, like that's where I take the big losses. So I really like to wait for just the price action to get very tight.

Mhm.

So just comparing my currency trading mindset, uh, I I tried to, cuz I started investing a lot this year. So moving towards stocks and indexes and I tried to take my price action beliefs there and kind of bring it into this domain and to see if it would assist me and generally speaking, it didn't. Um, which was interesting and what, what, what I would refer to as more primitive or basic technicals, which are heavily manipulated. I and I see them getting trapped all the time in in currency in the stock market tends to play out and it was very interesting for me to see that just a break test, which fails all the time, literally a daily basis in forex. I'm like, oh, Tesla just did that and, and, and Bitcoin in essence just did that. Uh, so it's interesting to see the differences here and I want to explore, for example, an EMA that you're you're referring to here. Is it an idea that it's kind of a self-fulfilling prophecy that if all the big players use these technicals, it's not, there's nothing inherently powerful about the EMA. It's it's just a line. It's not necessarily a rejection point or something that price should move. But if enough people use that EMA, enough orders get into the market, then price must respect it. Is is this the case that we're basically seeing?

Think, I could see that it's, you know, there's, there's some elements of that, but I also think that, um, it's just there's like a certain amount that price can realistically move without having some type of consolidation. And so, uh, I think EMAs just help us to identify like, okay, maybe it's, it's done enough consolidation and caught up to the point where it's ready to make another move. Um, and I don't know why the math works specifically the way that it does on that, but, um, I I feel like it's just as much of that as it is the self-fulfilling prophecy fact.

Mentioning here the, the kind of how much it could move or what is the ordinary movements. Do you use any deviations, average daily range, average session movements inside your strategy?

Um, this is not something that I've been huge on, but it's something that I've I've added to my playbook recently. If you're going to be a swing trader, you definitely need to focus on the stocks that have the highest average daily range. Um, because if you're focusing on stuff with a 2% average daily range, it's just not going to meaningfully move your portfolio like something with a 7, 8% average daily range would. Um, and that's something that you, you really need to think about because obviously there's an opportunity cost of sticking your money in stuff that's that's not moving.

So the, the what you just mentioned here of 1 or 2% in a day in currency, that's wonderful. Yeah. And and the reason being is we can really explore leverage. You can even get 1 to 500 accounts.

Whereas in the stocks world, it's basically one to one, right?

Um, most of the brokers that I use give you one to four, um, up to 1 to four intraday and then usually one to two overnight.

Um.

Have you found that restricting in any way in your career? Because new traders run towards leverage like that's their savior. But you built a career in a in a one to four environment. Did you ever feel like it was holding you back or has it been sufficient?

Definitely. It hasn't held me back at all. Yeah. I mean, I guess I've I've been blessed to have enough capital to where, you know, I don't really need to use leverage for the most part. I think there's certain times where maybe I'm trading less volatile stocks, but that that give a great setup and I'm swinging large multi-million dollar positions and I need to use leverage for that. Um, but for the most part, I haven't really needed it just because the majority of my career has been in small caps. And in small caps or OTCs, you can just get some ridiculous moves. Like Octo ran like 5,500% intraday the other day. Um, you know, and so when you get moves like that, like why do you need leverage of any kind? Like if anything, I want like reverse leverage. I want like, tone it down here, a quarter of 1% of my account in in a stock like that because that's just terrifying. Uh, you know, so if I'm putting 400% of my account in a stock that's making a 5,000% move, like, just no, there's no way to manage risk on that. You know?

When when we look at the entire gain you've had over your career, which domain, for example, large cap, small cap, which asset class was the one that contributed the most profits?

I would say small caps overall. Interesting. Yeah. Um, but that's it's definitely making a shift in recent years just because I've been expanding my playbook, um, and just learning how to profit from similar patterns but on larger cap stocks. So, like, um, one of my good friends, Jack Kellogg, he told me that like the best time to, uh, try to capitalize on these large caps, which for the most part can be fairly choppy, but like for a day trade is when they start behaving like small caps. And so, one of the patterns that I'm super familiar with is, uh, like the first red day when you get an overextended chart, a parabolic extension, uh, and then it has a pullback. And if you know how to capitalize on that pullback, you can short it and make some good money. Um, and in general, large caps don't really give that pattern very often. And so when you get, when you get a large cap that gets really, really overextended and starts behaving like a small cap where you get three, four, five up days in a row with expanding range and volume and they're gapping up each of those days, Uh, that's when you can actually bet big on these things. And so me learning that is like, okay, this makes sense to me. Like I have this experience from small cap land, and so I can transfer this over to large caps. When large caps start behaving like small caps, that's when I can bet big on it and, uh, you know, actually have decent edge there. And so just by utilizing that, you know, I've been able to have some pretty decent trades on these over the last like yearish since I learned that. Um, really the first one that I ever tried was SMCI. A lot of people have talked about this, but that was an amazing first red day, uh, back in February of 2024. Uh, and I didn't really do too well on that because it was the first time I'd ever taken this trade on a large cap. Um, and I think I made like 40K that day or something. Um, and then the same trade showed up again on MSTR in November of 2024. Um, when that had its first red day from like 540 down to like 370 in a day. Uh, and that day, you know, I, I scaled up a little more. I think I made like 250K that day. Um, and, you know, when the next one comes around, I'll be even more prepared and hopefully do even better. So just being able to recognize those patterns for small caps and when they start playing out in large caps is, it's just this cool thing and I only noticed that because my friend mentioned it.

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It's very interesting to hear. I mean, knowing your backstory and having the $2,000 as your first account size to then be throwing numbers around, not even going to talk about the millions in a trade or a million in a trade, but even just 40k, 200k. These are huge numbers. H how do you mentally prepare for that kind of size?

I don't think there's any way that you can prepare really. I think it's just, it it turns into a a number.

Um, through the repet Yeah. You, you kind of have to detach. Um, just through the years of doing this day in and day out, you get a little bit desensitized. You know, it's, this might be kind of grizzly, but I feel like it's the same reason that like maybe someone who works at like a, a butcher shop, like they might be desensitized to blood or if you're like an EMT, you know, you don't care about that stuff as much. It doesn't affect you because you see it every day in and out. And if you're a trader, uh, these numbers, they just start to lose meaning because in trading money, like, you know, I was talking about the SMCI trade, like 40k or whatever, like in real world, that is a lot of money. Like I can buy a ton of groceries with $40,000. But in trading money, that to me, that's like, that's like nothing now. Like if I have a 40k day, I'm not even excited about it. I'm just like, okay, whatever. You know, I.

I think when you're when you're placing the trade, you can detach. But when you lose an amount, let's say you lose an amount that you know is you could be like, that could be an annual salary for someone or something like that, and then you sat and say what could have done with that money. Those thoughts will naturally creep in. Uh, how do you number one make sure you're not getting too bogged down in a loss, but at the same time, uh, not getting too carried away and and, you know, ladering too aggressively and having too much euphoria, cuz now a small lapse in judgment, which would have been maybe 500 bucks or a,000 back then, when now we're talking serious laps in judgment in terms of, uh, account size, uh, how do, how do you maintain groundedness or following the plan when you extend it out to this large capital?

I think you just, it's it's about sticking to the process and no matter what kind of numbers you're seeing in front of you, you just keep doing the same thing. And that's for me is is trusting my trade plan, having a set risk that I'm allowed to lose before I enter the trade, having the max losses set at the broker level, and no matter what, you know, I know that I'm willing to lose this amount going into the trade. So, like, yeah, it might not feel great because I didn't really want to lose that much going in, but I was willing to do so. Um, so even if it's a much larger number than it was when I started several years ago, I'm still okay with that and I know that it's part of the journey overall. Like I had my biggest red day, uh, in, I think like since 2022, this week. Um, I had a 98k red day. I almost had my my first six figure red day since my blow up on, uh, onag back in October of 2022. And, uh, you know, it didn't feel super great, but I was able to see the big picture. You know, all I have to do is I zoom out and I look at my overall equity curve and like it literally is the tiniest little blip there on that down tick.

It's like price action that there's going to be down portions.

Exactly. Um, and so that's, I think that's the most important thing, just like seeing the big picture and sticking to your process regardless of what the numbers are telling you. And something that I have actually been trying to be better about recently is, uh, systematizing a little bit more in terms of risk. And it's something I still need to work on because, um, to really excel as a trader, you have to scale up risk accordingly to the size of your account. And that is is very tough to do mentally. There's very few people who have been able to successfully do that at like the perfect level. Um, Jez, I don't know if you've heard of him. He's, uh, I think he's from from Finland. He's, um, he's a trader who started out, uh, with an algo and well, he just made an al, he started out like systematically, but he's a really good example of how you can compound your account like crazy. Um, he started, and I think a couple years ago, he was, yeah, like 30k and now he's about to cross, uh, eight figures in profits, and that's just because he's, you know, risking a set percentage of his account on all these trades and whether his account is 100k or 5 million, he's still risking the same percentage amount. And so if you have the edge, you can really scale it up.

Yeah. A lot of traders that I've seen scale up, uh, they start off in percentages, 1% risk per trade, and then they end up just doing fixed dollar amount, um, per trade. And somewhere along the way, the percentage game kind of, you, it just doesn't feel as comfortable anymore. So I can see your point here, you know, this idea of because what we're really discussing here is psychology, the ability to adapt to the numbers and and whatever emotions that evokes in you. But when I explore this idea of psychology, especially because you mentioned someone systematic and coded into an algorithm, this is a debate I've had and both ends of the spectrum are firm in their belief, which is interesting to see. But I want to, I want to explore this with you. This idea of like, if you gave me your exact strategy and and we spent two years figuring it out so you I could learn everything. In the end, your mine and your performance would be different. And a lot of people do say, well, the reason the difference in performance happens despite maybe an objective strategy or equivalent information is just personality traits or psychology, which is an interesting point. And in your sense, it seems like you didn't necessarily address your psychology. It was just years under your belt, and you, like you said, desensitized. You you climatized yourself to any emotion. The greed you maybe felt desensitized. Any big losses you took, you started to get desensitized over time. Would you would you say psychology is something you have to take care of or it's something that takes care of itself as long as you're following the, you know, the right plan over time?

It's not something that I actively go out of my way to take care of. Definitely. I think if you're doing the right things, I would say the psychology just kind of takes care of itself. But I do know there's lots of successful traders like Lance. He, you know, he specifically sees, uh, I believe like a trading psychologist/coach Jonathan Katz, I believe is his name. And he's done some videos with him and, you know, I think there's something to be said for that, you know, maybe to unlock the highest levels of your potential, but it's not something that I've personally looked into a ton at this point, so maybe that's holding me back.

I don't think so, to be honest, in your stage, uh, I don't think so. But, uh, if we are to explore, because this is kind of, if, if we can kind of divide a pie between, you have your technical edge, you can have risk management, you can have fundamentals, uh, and then you have your psychology. If we are to distribute that through a pie chart, which one would you give different waiting things to?

What are the piles?

Let's start off with technicals, uh, and then fundamentals, risk or account management, uh, and then psychology. Let's split it between these four. Uh, how would you weight each one?

Um, I mean, probably the most important thing is to have some sort of edge because it doesn't matter to me any of the other things if you don't have edge. So, um, I, I would personally say for me, edge comes from a combination of technicals and fundamentals on most plays. Um, so to me, I don't know, I would say maybe.

Where are you skewed? Are you more technicals driving or is it more, uh, fundamentals driving?

I'm definitely more technicals driven because I just feel like there's there's too many times where technicals and fundamentals don't align. And I think maybe in the end, after 10 years, whatever, fundamentals will play out. But there's just, you know, the saying, markets can remain irrational longer than you can remain solvent. Um, and we're seeing that play out right now with the quantum sector where you have stocks like RGTI, INQ, QBTS, QBT, all of these terrible stocks. I believe most of them have very little to no revenue. Um, and, you know, they're multi-billion dollar market caps. And in the last week, they're up like 100% almost, um, after a 2,000% run and then going sideways for 9 months. And so this is just an example where you have short sellers betting against these things because fundamentally they're terrible companies, but technically it doesn't matter. You know, they made a beautiful run, they got extremely tight and they broke out of a a perfect base. Um, and so if you're too focused on fundamentals, you can just get absolutely destroyed, um, just fighting this stuff because you know it doesn't make sense. But at the end of the day, it doesn't matter. So that's why I prefer technicals because if, when I listen to those, it stops me from being stubborn on the wrong side of a trade. And on the flip side, like you can have great companies that are super undervalued for a long time just because, um, you know, the technicals just, they don't, they don't add up. Like UNH was was it got absolutely crushed. Obviously there were some fundamental aspects to that, but you know, it was very undervalued, um, for a while and if you were buying that aggressively on the front side all the way down, like you could have gotten destroyed, especially if you had leverage there.

Would you, would you look at certain things like the COT report or would you look at what the big players are trying to do and and try and assess what is already priced in, um, or are you trying to read sentiment through price action?

Yeah, I, I wouldn't look at a, a report like that. Honestly, I've never even heard of that report.

Um.

Yeah, I mean, for me, it's just through price action. Um, and you can also see what people are saying on social media. Um, there's there's some aspect of that. Um, but the biggest thing is just, yeah, looking at price action, volume across sectors. Um, if institutions are accumulating these stocks, like it's very obvious when you look at your scanners and you see all of these stocks in the same industry, they're the charts look very similar, they're all doing a ton of volume, uh, regularly, consistently day by day. So.

An investor, they would obviously look at diversification if they're not overexposed on one sector and so forth. Do you try and apply that when you are, uh, you know, day trading or trading, uh, the stock market in general?

Um, I prefer the saying like, uh, I forget who said, I don't know if it was, uh, one of the great investors. He said, I prefer to have all my eggs in one basket, but watch that basket very carefully.

Okay.

I don't remember who that was. I don't know if it was, that's a good saying.

Yeah. I don't know if it was Aman or or someone along those lines. But, um, that's my personal philosophy. Like, um, I would rather have all of my bets in concentrated areas that I'm very convicted in and then just be watching it like a hawk and make sure that, you know, everything is going according to plan versus trying to diversify, um, and just putting risk on other setups that might not be as good as as other, you know, the setup that I prefer. I saw it just yesterday. I think it was maybe Ray Dalio's was quoted in saying that when you are worried, you don't need to worry. And when you're not worried, you need to worry. And that kind of reminds me of, if, if you watch something enough and obsess over it and and see the full picture and you're worried about it, you'll probably be okay. You don't need to worry about it.

Um, what space does crypto hold for you? Because it seems like it's not your main domain, but, but it seems like you still interact with it.

Um, yeah, so crypto specifically, I don't trade like crypto itself. What I do is I trade, uh, the ETFs that are listed or the leveraged ETFs or the options for those ETFs, um, that are listed on the stock market. So I don't, yeah, I don't trade actual Bitcoin via, you know, perpetuity or anything. Yeah, I don't, I don't trade it. So.

Okay. Well, we mentioned earlier pyramiding and and this is kind of a risk or entry protocol. What other styles of entries or sizing in would you, would you or risk sizing, uh, would you do? Could you elaborate a little bit on that?

For example, um, if you have a very high conviction play, would you size up or is it always standardized risk? Maybe not percentages anymore, but fixed dollar amount, uh, based on conviction. Or for example, if something is sizing up as a swing trade, uh, maybe you size up because you know, I can pull out an intraday amount and then and then let a runner go. Is there, is there any other creative things you may be doing? For example, in my case, I've been standardized my whole career of 1% risk and I thought I was doing the right thing because I, I was just taught that and it's the way I did it and it's all I know. And then through the show, I've swung to so many traders that do creative things with risk. Uh, and this year I started to change it through inspiration of my guests and I started to realize maybe it was a form of holding myself back when I have an A+ setup that maybe is not that frequent, but it's high conviction. The data is behind me. Why not do two or 3% risk? It's not the end of the world. And I tried it first time in June and it was to my favor. Uh, so then that became something that was, oh, this is something I can now continue to test and explore. Pyramiding I've never tried and and there's other things that I've seen people do. So I just wanted to explore here because you've sized up from a from a small amount of money to a lot of amounts of money. Uh, was, what, what was in there to to enable that kind of growth?

Yeah, exponential bet sizing is something that has helped me a lot in my later career to really go parabolic.

Exponential bet sizing. What do you mean by that?

So, this is also something that Lance Brightstein talks about a lot. Um, so I definitely recommend watching his videos on that. Um, but basically it comes down to not betting just 1% on every opportunity when you see it. Um, because not all opportunities are created equal. Um, there's, the, I think the example that he likes to give is poker hands. Like there's plenty of poker hands that are positive expected value if you play them. But not all poker.

hands have the same expected value. So, like if you get jack suited, uh, you probably would still want to play those in most circumstances, but you're not going to bet the same on that as you would on a pocket aces because, you know, did I say jack jack suited? You can't be suited. Um, but my point is like, you know, you can't expect to bet the same on something that has a lower EV and get better results overall. So the the point is you want to bet exponentially more when you have these super rare setups that don't come along very often because you know that the vast vast majority of the time you're going to win on them and the vast majority of the time you're going to make a lot more than you would lose if you're wrong. And so when those come around you want to bet instead of like you know one is your normal risk and betting two on this you might want to bet like eight on uh when you get just an absolutely incredible setup because it's just so likely to work. And when you do that, it just juices your gains to a ridiculous amount.

>> Okay, let me let me push back on this from what other guests have said to me. Um, number one would be if you have high conviction plays and opportunities, and then you have a hierarchy of these are my A+ setups. These are my A, B+, and and lower conviction rates. Uh, I guess as a signal of win rate, these have a higher expected value, higher win rate, these have lower ones. But like, why even take the ones that have a lower expected value? Why take the worse off setups? If you have these high quality ones, why not only take them?

Well, again, just because there's still positive expected value in taking those trades, you know, it's like if you see money lying on the ground, would you pick it up? I mean, the answer is I'm in trading still at this point to make as much money as I safely can. Um, and so if I have setups that come throughout the year that are not as good, I still want to be putting risk on those setups because they can add to my bottom line and keep me in the flow of the market versus it's a lot more difficult to execute. In my opinion, there's a lot more pressure on you um psychologically if you know, okay, there's going to be two opportunities throughout the entire year that I'm going to put risk on and if I mess these up, like I'm going to have a red year versus, okay, there's going to be 200 opportunities. Two of them are going to be insane, but I'm going to still be green pretty good going into these opportunities and have a cushion and be in flow with the market. So, that's what I would argue.

>> Would you say it's accurate? Because I've heard traders say this that majority of your profits come from the minority of your year to the effect I've I've heard traders say that uh two months of the year make my whole year.

>> Yeah. I I looked at the data for 2024. I forget the exact numbers off the top of my head, but I believe it was like I want to say like the top 14% of my days accounted for like 82% of my profits or something like that.

>> Oh wow.

>> Really an 80/20 split.

>> Yeah, exactly. Yeah. The Prao Principles. And was that by virtue of sizing up on those 14 days or it was just um these were my high conviction plays. They don't appear appear that often. Um but these are the ones that contribute the highest risk to reward.

>> Yeah. I mean I think it was a combination of both of those. That's when the best

>> that's high risk reward and high risk.

>> Yeah. High risk to reward, high win rate and that's when I chose to bet exponentially. Um and my year could look very different if I didn't trade like that,

>> you know. So

now one of the biggest ironies or or conundrums of the market is uh this idea of being wrong and loss because in general in life if you if you fail at something you go back to the drawing board you try again you you fail an exam let me go study more and and this is like a feedback loop whereas obviously in the market you have to realize that losses are baked in and and sometimes a loss means you change nothing. This was a valid loss. This is part of the plan. Uh and the irony here is that the distribution of events will not be nice. It won't be win loss win loss and you could be smashed with a losing period of seven in a row. Uh and the the reason I'm bringing this up is because when you are dynamic sizing, you might get a uh a funny moment where the market is laughing at you and basically saying that big play that you sized up on, yeah, we're going to lose those two. And then the ones you win on, they're the ones you had low conviction on. You low risk. So even though your win rate might look okay, your risk reward might look okay just by virtue of the sizing that you did, you might be in the hole and an extended period of draw down and if it was in another scenario or equal risking just to play devil's advocate, you would have been okay. How do you navigate those? Because I know if you just zoom out, it's going to be okay. But I mean, navigating those days or weeks where this ironic uh behavior is happening.

I think the the cool thing about the extra conviction setups usually for me that comes on mean reversion setups when you get interesting >> a hugely overextended chart either to the upside or to the downside.

>> So why why do you think that is? I I would have assumed this accumulation and and a consolidation and then a breakout and you you're running with the trend. You're running with the big movements. A mean reversion or reversal. Why is that the the more asymmetrical play?

I think to me it's like a win rate thing. Um so like normally normally I like breakouts. Um but they do inherently have a much lower win rate than a mean reversion type strategy if you know how to time it correctly.

Explore that with me. I would just assume a breakout or with the trend would be more favorable and a trying to if I'm to use the the phrase pick the top or trying to reverse uh you know uh catch a falling knife kind of term. uh mean reversion is is by nature reversal uh seems more dangerous.

>> It might. Yeah, I mean more dangerous I could agree with potentially, but the win rate is just it's just better. Um, it's a fact if you if you go look at the data um just because of the nature of how these things play out. So when when you get in a breakout, the idea is you want to have really good risk award. Like you might buy through opening range highs versus low of day. Um and that's like a very tight risk. And if it runs, you might hold it for a month and get really good riskreward, but you're going to get stopped out when it breaks through low a day, whether that's that same day or two days from now when it fails and then reclaims later. Like, there's just a lot of um messiness that can happen in breakouts. And that means that the win rate is just a lot lower. Versus when you get a hugely extended chart like MSTR when it went up to 530, 540, the odds that MSTR is still going to be trading there a day from now, two days from now are just incredibly low at that point. And so it's almost like it doesn't really matter where you enter at that point. It's just the big picture chart is just so overextended. The rubber band is so far stretched that at some point it's going to snap and come back down. And so you you don't have to be precise with your entry and your win rate is just a lot higher. And so that's where like I just get really convicted on those um because I know this is unsustainable versus a breakout. Like a stock doesn't have to go up.

>> You know, it can get really tight and then just do absolutely nothing. You know, there's plenty of times where that happens. Yes, I'm going to bet on breakouts when they look great, but that doesn't mean that they have to go up. But any stock that goes straight up will have a pullback at some point. It's just a fact. So, and I got a lot of I got a lot to explore and add. I want to start off with if I was a new trader and hearing this, I would be like, cool. I'm going to try and pick the top every time because this gives me the best opportunity. A volatile, you know, elastic band popping back. I want to be involved in that. So, first of all, let's let's try and clarify uh how to do this in a safe way. And I want to share share a story with you. So, I had a uh guest who's a market wizard and you know, he's he's maybe he's in his 60s, I'm not quite sure, and he was managing $200 million uh himself as a hedge fund owner and then in his career up to 700 million. So, he's a very competent trader, 30-year track record kind of thing. And his whole career was based on reversal trading. And I was like, this this goes against what we are taught as traders 101, follow the trend kind of thing. And when we explored it, he was like, okay, so when when you see a trend, what is going on? It's like, oh, the buyers are getting in and the sellers are getting out. So, you have the the tide on your side. It's like, okay. And as you get higher and higher, what's going on? It's like, oh, there's more adding, I guess, they're pushing and more people are catching this tide. He's like, what happens when it keeps going all the way to the top? And it's like, okay, now you reach a point where there's like max buyers and then then how is it going to go higher? I was like, that's true. You can't there's not an infinite amount of buyers that keep going. He's like, yeah, exactly. So, you reach a point where it's like on an oscillator is reaching 95. It's reaching this extreme. He called it crowded. It's like at some point you're just in your shock event and it's like sometimes it'll even be on a positive news that is just like the buyers start to get out and it's a cascade and it's just like it runs back to the mean reversion as you're saying. So initially my gut reaction would have been like this doesn't sound like it's a favorable play. But when he explained it like this I was ah this makes a lot of sense cuz it's just built up tension and at some point it has got to break. But how do we take this philosophy and and kind of this wisdom behind of what's going on, the mechanics behind, and layer it in into, okay, let's just not keep picking highs. How do we know how to sensibly do it?

>> That comes from studying the past. Again, I mean, that's I'm going to sound like a broken record here, but that's just the best way that I have found to accurately pick entries and know when to get in stocks. So, I mean, there's plenty of examples of stocks that go up and might look like they're a decent short and then they just keep going up. But I think the more you study the past and know how the biggest runners in history topped, the better you can identify in real time what these factors look like that make a run unsustainable versus being sustainable. You know, when you have a stock that makes three massive green days and then has some tight inside days, you know, that's consolidation. That's price acceptance. And there's a decent chance that that might not be a great short because, you know, could it break down? Yes. But it could also continue higher. But when you get a stock that goes parabolic, parabolic and just keeps speeding up on more and more volume at some point like I have seen from the past that that will have a decent red day. The more overextended that it gets. And you can classify this based on how far it is out of the base that it just made. You know, how many days has it been running for? How far of an extension is it? How big is the market cap? What is the average daily volume like? How much has the volume increased? all of these factors, how far extended is it over its 50-day moving average or its 10day moving average. Um, and when you get all of these factors aligning, uh, that's where the odds just become more in your favor. And you combine that with an intraday entry strategy, which is like, okay, I'm going to enter once this, uh, breaks low of day with a high a day stop or whatever. And at that point, like, you have a very fixed risk-to-reward. Um, and you know what that is. And so, if it reclaims and makes a new high of day, you stop out. Um, and then it gives you an opportunity to get back in later if maybe it goes a lot higher and then it breaks down again. You can short the first 15 minute candle break or 30 minute candle break after high a day. Uh, there's plenty of ways that you can structure an entry, but I think it's just finding the way that you can get an intraday entry based on the conviction of the overall daily chart.

>> So, I want to explore a couple things here. Number one is conviction. Now, conviction is a could be a feeling. It's like, oh, I just feel like it's going to reverse. I've seen this play out. my intuition is getting involved market experience and and this is a gray area. So I want to explore that and then pairing it to basically my opening question the reason I asked it is for situations like this is trading an art or a science because now when we're talking about you can add all of these confluence or based on momentum and and and deviation and you know an oscillator how overextended it is you can start to say okay at some point this has got to reverse but to your quote earlier it can also keep going. It depends how much liquidity you have how big your account is. How do we safely do it in terms of not to overfitit because then you can add a 20 listings of like okay these are the reasons that market should reverse but then how often is all 20 going to be there. How do you do this in a way that can be as scientific as possible?

>> I'm I'm not a huge data guy. Um so that's it's a question that's difficult for me to answer in that regard. Honestly, I know that there's people who have crunched the numbers and and they know the exact percentage etc that it needs to be overextended. The the reason I ask is because you kind of said, "Okay, let's study what happened at previous highs and how they kind of uh sprung back. Was there anything you noted that that is worth mentioning?"

>> Yeah, I mean the biggest thing is um the blowoff volume and the increasing range and typically gaps. Um and that's what I like to see. So maybe that's not really a thing in like the Forex market um which I'm assuming is 24/7. I don't know how that

>> uh it's 245.

>> 245. Okay. Yeah. I don't know if there's if there's gaps in the in the candles then if they're

>> not not really you have a kind of an imbalance but sometimes on a market open over the weekend there might be a new gap.

>> Okay. Well, you know for um for daily charts on stocks which only show the intraday action on the daily chart between 9:30 a.m. Eastern time to 4 p.m. like all the action and after hours etc doesn't show up. And so when you have a stock that is continually moving higher and after hours like there's a huge gap on the daily chart. So, if something um you know, for example, OKLO is one that I'm potentially watching uh for a parabolic short this week because it's starting to really speed up on the daily. Uh it in my opinion, it would be a lot better of a setup if it went a day or two higher. Uh but it's starting to get to that point where it's interesting me a little bit. Um and these are just some of the factors I look for. But like if if it gaps up, the gap that it had yesterday, um not yesterday, but the previous day was like three or$4 dollars, I believe. And so, you know, if it starts having much larger gaps, like a $10 gap and then a push off of open, like to me, that is that's like a sign of euphoria. Um, especially on if you look at the five minute bar off of open or the 15-minute bar and just see like the volume versus the previous days. If that volume is just like enormous compared to the other days, that's another good sign of like this is blowoff euphoria.

And [clears throat] I guess you got to pair it to sentiment and say, okay, there's no intrinsic value. This this is not a this is not something that has been revealed to the market like, oh, this is a bullish factor. It's like, okay, nothing has changed. It's just euphoria in price, not necessarily euphoria or intrinsic value.

>> Yeah. I mean, they've gotten some contracts and stuff like that, but my understanding is they're still a pre-revenue company. Um,

>> yeah, see, I see.

>> Don't quote me on that. I just read that somewhere. But, I mean, that to me, the main thing that is important is just the extended chart, but you know, all of those factors align. Um,

back to this dynamic sizing because that's how we ended up in this topic. um when you have protrend scenarios, breakout scenarios, counter trend and then you have the day trades and the swing trades, you know, you have a lot of variety and I can see where it comes from because as you said like not every day is the same and there's only pockets of opportunity across the year that are are really, you know, high conviction, which is why it makes sense to be dynamically sizing and modifying things. With that being said, uh what is your philosophy in terms of conviction and low conviction and sizing high and sizing low? Is it just a factor of win rates here to to determine conviction or is it overall assessment?

>> Um because it could be a lower win rates play but you just see it's a 1 to 7R. So it's like okay this could be high conviction by virtue of riskto-reward. So how are you defining what is high conviction and worth sizing up on?

>> I'm not systematized about that either to be honest. Uh I think it's just kind of a gut feeling. Um, okay. Based on my experience in the markets, you know, uh, I don't think >> always I'm only betting larger on high risk I mean on on higher win rate setups because there's there's certainly breakout setups that I'll bet more on. But like for example, the Bitcoin breakout like the original risk was 10K

>> um, which is extremely low for me because if I get an amazing first red day setup, I'll be willing to risk 100 150 maybe even 200k on. there's a huge deviation in risk. It's not like a 1% becomes 2%. It's it's a factor of 10.

>> Yeah. And that's that's the whole exponential sizing thing.

>> Okay. Ah super interesting. Okay. Uh go going into the actual entry whether it's a high conviction or low conviction. Maybe there is a difference here. I want want to talk about trade management. Uh the reason I I ask is because my philosophy has been I'll get into a trade even if it's lower conviction, but I'll be very quick to break even that trade to to to derisk. And if I get wicked out, so be it. But some the way I'm trading is like I'm trying to capture when the momentum is getting in. So it should ideally be a tap and go. And if it's hanging around, it's not a good factor for me. So I will be very aggressive to break even. What is your philosophy on trade management? Uh and specifically around break even.

>> Yeah, I I do that a lot as well. Um there's certain people who I'm probably fairly unique in terms of larger uh small cap traders in this. Most people that I've talked to, they have like a specific risk level um that they just they stick to kind of no matter what. Um whether that's, you know, if you're shorting, you short a lower high on a extended daily chart versus high of day and no matter what happens, you're leaving your risk level at high of day. But for me, I'm I'm fairly dynamic with it in terms of what the price action looks like. And if it starts behaving in a way that I wouldn't expect in an ideal world, I'm very quick to derisk that um and maybe, you know, get to the point where like, okay, if this is reclaiming my average, especially if after I pyramid it, I'm just going to downsize a ton versus keeping all of that on versus high of day like a lot of people would do. Um I'm under the opinion that or of the opinion that, you know, when you have these amazing setups and you get in with big size like they really shouldn't be reversing and coming back to your average um if they're going to work most of the time. There are obviously exceptions to that and certain plays where it might be more choppy inherently by its nature, but I don't really want to be in with huge size at break even ever. You know, that's I'm I'm very uncomfortable in that position because that is where my largest losses in my career have come from. You know, the largest loss that I ever took in my career was where I went all in short on a pump and dump expecting it to go straight down and it did and then immediately reversed and I didn't take it off cuz I was thinking I was risking high a day and it blows through high a day and I'm just sitting there like a deer in the headlights already down multiple hundreds of thousands of dollars and it just keeps going and going and going and going. Like I don't like being in that position, you know, and I I know what that felt like. And so now, yeah, I'm just if it's not working, I'm in big size, I just get out immediately. That's how I manage trades.

You know, when you have a factor of 10 risk, difference between your lower and higher entry types, when when let's say you're doing an aggressive play or or more uh risk on the table and it's it's running in your favor, so everything is good and maybe even you break even the trade. So, you know that you're not going to lose anything now. And then you have, you know, let's say you're one to two up and it's okay, we're going good in profit. And then you have a healthy 50% retracement and those swings whilst you are in the trade are larger. It's an interesting mental thought to say like if if I'm willing to risk $1,000 on a trade, then I know my worst case scenario is $1,000. But if you allow $4,000 up and it goes back down to $1,000, you've actually lost 3,000 in unrealized, which is greater than your risk you're willing to lose. It's just unrealized and and that can be a more burdensome feeling. Talk to me about that when you are now risking a lot larger and that swing is now 10x what you're used to uh in terms of numbers on the screen. uh the roller coaster of emotions in the trade even when you're risk- free.

So, when you're in a trade, there's always dynamic expected value. Um if you're shorting an overextended stock and the stock is still green on the day because it's on its, you know, sixth green day in a row and it gapped up 20% that day, the odds are pretty good in your favor that the stock is going to come down. But if you enter there and now the stock goes down and it's straight down and it's down 20% on the day whereas before it was up 20% on the day, the odds are no longer the same, you know, and so depending on the overall time frame of your trade, you definitely need to be, in my opinion, actively managing um your overall risk exposure. Because if I'm in something that makes a straight move after my entry and I'm in huge size and then it starts reversing off of that straight move, most of the time I'll lock in a good amount of profits, unless I'm like specifically thinking this is going to be a huge big picture swing trade. Um because in that point I'm thinking, okay, whatever intraday move it makes today,

>> I don't think this is going to be it by any means. And I think, you know, potentially it's only five or 10 or 20% of the overall move that it could make. and I don't want to risk losing my position by getting out and locking in profits here. But if if I'm in a day trade, man, and I'm in huge size and it goes my way a lot and it starts turning, I'm yeah, I'm taking the vast majority if not all of those profits because usually it gives some kind of retracement and then it'll like consolidate and then make another leg and so usually it'll give another entry point.

Yes. You know, I see a lot of Tik Tok traders and and influencer traders kind of making reels at this idea of if you break even a trade or if you move your stops to break even. Uh you didn't trust your analysis. You you haven't done the you haven't done the work correctly. And uh just overall managing a position, it should be a more set and forget thing of like if you made a decision to get in, you got to see it through. Um I don't agree with it and a heavily managed position. It seems like you're also in that camp. Um, what would you say to that kind of belief uh of like once you're in, you got to let it you got to see it through. It's either stop or profit.

>> I can understand that argument because most of the time your average price is a fairly irrelevant level on the chart overall versus like where you should be risking. What most people say is that you want to exit the trade when your thesis is invalidated. And for most people

>> on the loss side.

>> Yeah. Correct.

>> Correct. You know, you would you would want to stay in the trade and give it the chance to work out until your thesis is invalidated. And for most people, that's going to be when it breaks your risk level that you had set when you went into the trade.

>> Um, and I just think there's there's multiple ways of looking at that. For me, my thesis might be invalidated when the stock isn't doing exactly what I expected it to do, which is go straight down for my entry when I'm shorting or go straight up when I'm buying a breakout, you know? And to me, just the fact that it's chopping around there is invalidating my thesis. So, there's definitely two ways to look at it. And

>> yeah, I see a point. Um, I don't know that there's a great answer there. I mean,

>> no, I I I see it because um the information you had at the time of entry, the invalidation was here, high of previous day, let's say, and then as you got into the trade, you are monitoring other people won't be monitoring, but you're monitoring momentum, reaction speed. Do the participants get in in the direction you want them to get in? If they're chopping around, this is a bad sign. there may be a signal or an invalidation. Therefore, you can now monitor or manage this position. Whereas, if it's tap and go, this is a good sign. Don't need to manage it. U and I guess others, let's say a swing trader, they wouldn't be adopting that kind of immediate because they're not trying to time the market the same way a scalper or intraday trader would be. Is a time of day of entry important for you?

>> Yes. Yes, it is. Um I think you tend to get a lot cleaner moves around open. Um, if you're trying to buy a breakout at like 100 p.m., I found it's just it tends to be lower volume and lower follow-through. Um, and that's just something that you kind of have to keep in mind. Um,

>> it would be something that you consider or it would be almost a form of invalidation if it's in the tail end of the day.

>> It really depends on just the overall daily setup and like yeah, how convicted I am in this thesis in general. But um you know if if the perfect daily chart is breaking out at 1 or 2 p.m. it's not going to stop me from buying. Um but mainly like maybe there's smaller intraday trades on like a a day one gap and runner. Um that I would I would buy the morning breakout on if it's happening at 10:15 a.m. But if it's happening at 2 p.m. I'm just like it's probably going to be a fake out, you know. Um so that that's probably the the main time that I would care about that versus a larger picture chart. referencing back to what I just said of like your unrealized loss on a retracement can be greater in dollar amount to your initial risk. So with that philosophy, do you have any as you start to run towards profit now any approaches to trail uh your stop not just break even but okay protection mechanisms uh or is it just trying to find that first impulse and lock something in and then leave the rest?

>> Yeah, there's plenty of ways that you can trail. You can trail based off of prior bars. Um, and you can choose the time frame there. Like if it's a super super clean move, an exceptionally clean move, you can trail two-minute bars. Um, you know, just wait until

>> lows in a in a buy.

>> Yeah, exactly. Um, or if it's going down, you just once it breaks, it makes a higher high on the two-minut bars. You just you get out of the trade or exit a part a portion of the trade. Um, and there's also EMAs that you can use like I've I've dabbled in that a little bit. I have some friends who swear by like the what is it the five minute 9 EMA um for intraday trades and the first the first time it closes under that um you know you want to get out of momentum long stuff like that. So I've I've dabbled in that a little bit just to practice holding

>> either way if it's a 5 EMA or a two-minute candle whatever whatever we explore here. It seems like they're very tight. It's like okay the the first kind of retracement you're going to tap an invalidation of a EMA or a or a two-minute candle. Uh is this the idea you want to be managing very uh like what's the word? like inclined like you at the super uh the super tight price action and the moment you get a bit of a break you want to take a partial. Is this the philosophy?

>> For the most part on just okay on smaller day trades and and scalps and things like that. Again, it just depends on conviction level and how much the overall daily chart is saying to me that there's going to be a huge continued move. Um, but I take, again, I take a lot of trades and the vast majority are not with perfect super extended daily charts where I have conviction in a huge move that might continue into the next day. You know, most of the time I'm trading a small cap that might be like, okay, I have a feeling that this this stock that is kind of scammy is, you know, could potentially push higher today, so I'm going to buy some on this breakout and sell into the push once it starts breaking down the trail. What about the idea of the reversal or mean reversion where you know where the mean is and and that could be several days away and if you're just to forecast how long it should take um how would you then project a trade management when you have a lot of potential in a trade?

>> Um you can trail versus the daily bars on that as well. Um, I know I think >> I believe on the um >> the August 5th panic with the Japan yen trade uh back in 2024, I think that worked pretty well. Um, if you bought that and then traded the uh the daily lows on some of these stocks, it just worked incredibly well on and that was like the reverse. So, not overextended to the upside like parabolic, but kind of parabolic to the downside where you get SPY with a a red day, a gap down, another red day, another gap down, and then the reversal. Um, and so that was, yeah, kind of the reverse there. But

>> what why is your philosophy to, let's say, in a buy scenario to protect yourself on the lows of current price action, whether it's through an EMA or low of the 2 minute or the daily. But you're you're using current immediate price action to determine your behavior as opposed to you enter a buy and you can see there's a resistance level, there's a counter trend line, like you could have all these uh resistance or reversal factors that you can foresee. Why use current price action to protect yourself to get out as opposed to past price action reversal points?

I'm gonna be honest. I've never found that to be super super helpful, at least in terms of um exiting, I guess. I don't know. I mean, there's I know lots of people who've used like the short into resistance strategy where you see a daily chart that's topped out a bunch of times at a level and it pops up into that level and you short at that level. Um but I just Yeah, I don't know. The exit. Yeah, for me that's just not something that I've I've found super helpful because it's a little bit too too difficult to determine exactly like whether it's going to stop exactly at that level or go through that level and then does it still count. To me, that's just not something that's that's been helpful. I always just kind of get chopped.

>> Uh that's an interesting one because you could also say like, oh, the simple market structure. I buy and then when I formed a higher high on the 1 hour time frame, then I know okay, at some point this will reverse. This is a good exit point. But then I see your point here of like well what if it keeps going and then when you do project these potential reversal points you can also have 10 on a screen where it's a resistance trend line higher high EMA and it's like oh which one do I pick? So then some people will manage along or you're just managing from the beginning which which is an interesting perspective. Uh do you believe in I want to use the word liquidity. I don't know if that translates well for you but just ideas where common stops would be a support level. There's probably stops below a trend line. There's probably stops right above it. Session highs or day high, week high, etc. Do you believe that uh reversals or reactions can happen around these key levels?

>> 100%. Yeah. And it really depends on how rigged the asset or or stock is in general.

>> Why do you use the word rigged? because there's I guess there's like if you've ever watched a super super liquid stock um trade it trades differently than other assets that might have um like a very low float where it's easy for one entity to accumulate the whole float and then manipulate the price action to their benefit whether that's to run that up so that they can later do an offering or something along those lines. um versus if you have a stock that is like a a 500 million share float that's doing a ton of volume, they just trade they trade differently. They trade a lot cleaner. And so when you get the low floats that do a lot of volume, um those tend to be more manipulated or rigged where you'll get these clear support levels that are painted and it's just like holding this level perfectly and then it'll swipe through this level and it's like, oh gosh, all the long stop out, all the shorts hammer and then in one candle you'll get like, you know, a 30% rip back up and it's just like that's not normal price action. You know, stocks don't move like that unless somebody is controlling the action behind the scenes because they have an agenda.

I >> like the way you worded it. What was it? The the longs get uh something and and the shorts get hammered. Swiped and hammered. I like this. I'm I'm going to use that phrase. But what you're describing here is a cornerstone of my strategy. I call it an inducement. When when you see price flush and you're inviting an activity and taking out other participants, it's like who's doing that? It's got to be someone that is relevant. And thereafter, if you get confirmations, it it should rip in the direction that uh right after stopping people from buying it then ends up long. Um because then I usually know that's a protected low. And then if I have if I see the signatures, I know momentum is on my side and it's just a really juicy setup for me. Do you use that signature to your advantage in any way?

I do. Yeah. Um those are typically like more lower conviction trades for me. Um just because the way I like to trade is with pretty tight risk. Uh again, you know, trying to get good riskreward and maybe sacrifice my win rate. And a lot of these can be very wiky. Would you not say that the asymmetrical you know that really great riskreward is in opportunities like this because you have a nice invalidation which is just that flush price action the low of that which typically will be not a huge you know huge size and then well if you got the momentum after that manipulation it should rip in your words. So would you not say that there is a good riskreward potential in these ideas?

Um, you can, it just depends how how far they want to go. But it's it's hard to know that. And also the liquidity is just very different in small caps versus the kind of stuff you're trading. Um, because when they really want to flush these, like I could have five or 10% slippage uh on my stop when they just absolutely rug these things. And so it's difficult.

I see.

>> So the risk is not because of the price action model, it's risk by virtue of you're trading a small cap.

>> Exactly. I see. Yeah. And when something has a a one million share float and is doing two million volume per one minute candle, it's like they can just make some ridiculous moves. So yes, I can be pretty convicted that that's going to have a crazy uh type of manipulation move like uh AGMH was actually a pretty good example this past week. Um it had some some pretty trappy action that looked like that. Um and these candles, these dip and rip soap candles um where it clears out under support and then you know it washes everybody and then they run it after that. Um, and I did buy that, but that's just one of those examples where I'm not putting exponential risk on something like that because I'm not super convicted because uh the riskreward is not super great and I don't even know what the the win rate would be on that. It's just kind of more from field trade u just watching the tape.

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You know, it's interesting cuz from the forex side that I'm in these talks of like liquidity slippage and and like will I get fulfilled and all these things is never a consideration at any retail level. But now hearing this from you and I want to reference back to a conversation I had a couple days ago with a quant trader and he's like he's a genius he's you know one of these phenom kind of he's an author and he's done a lot in his career and I was exploring this idea with him of you know just this what we described this price action model of of a sweep of liquidity I was like you know why don't institutions I first of all I asked him about he's like yeah I can totally see that that makes so much sense it's like okay so why can't that be coded in or why is that not what institutions are arbiting or you know this is a huge opportunity it's like when you add enough size uh you have an alpha decay. He was like by exploiting the market inefficiency uh you close up the market inefficiency and he said the reason that these big institutions are not scalping or day trading in the same way that you and I may is because the fees and and the mechanics of taking those trades forces them to be a swing trader or a long-term position trader. Hence they have to be now fundamentally oriented and so forth. But he said in the ideal world they'd actually love to be doing these kind of plays. It's just liquidity becomes an issue. I was like oh that's so interesting. But then now you're saying you're facing the same thing at at at a individual levels. Oh, this this is super interesting. Have you explored or considered other markets? Cuz right now in the US specifically there's been a rise of futures trading and I think that's by virtue of the forex side and CFD kind of shut off because a lot of prop firms shut it off and then the rise of futures prop firms. So there's been a shift in the last few years uh from newcomers to go towards futures whereas it seems like you've been happy in your domain. U what is what is your thoughts on this change that's happening?

I think I'm pretty happy where I am overall. Um, I would like to expand my playbook and and get into futures at some point, but it's not something that I would be actively trading on a day-to-day basis, I don't think, because I feel like the markets that I stick to is where

>> it's where your edge is.

>> It's where my edge is, but also it's to me it just feels like there's there's more edge in general. I feel like the I feel like a lot of futures mar markets are just more efficient than small caps in general. um especially forex markets. I think those are even more efficient.

>> How are you using the word efficient? What do you mean by that?

>> Um efficient like there's less exploitable opportunities. Um less clear points where a skilled trader could just absolutely crush it in my opinion. Like I'm going to keep quoting Lance, but he he has this term called the broken slot machine, which is basically like you you want to go and find just the opportunity where you can close your eyes and just go like this and it's it's going to be printing money and you want to be there versus at all the other slot machines where they're just going to take your money. And to me, there's like a lot of noise in the markets and there's not really that much opportunity overall and you have to be very

>> explicit about where your edge actually is and define that and stick to those areas. And for me, there's

Just a lot more of that in small caps and in, you know, occasionally options in large caps. But would you say there's a correlation between more liquid an asset is, the less exploitable opportunities there could be? The broken slot machine is more likely to be installed.

I would agree with that. Yeah, because I mean I think more bigger players are involved in the most liquid assets and because of that they have obviously the most resources available at their disposal and advantage. Speed advantage. Yes, I hear it. They're able to arbitrage all of those inefficiencies away.

So if I'm to extrapolate this thinking out, it's very easy to end up in, well, let's trade memecoins then and you can end up in that world where it's uh very illiquid and and is very community-oriented and very manipulable. You know, there's a lot of opportunity there also. Uh, what's your thoughts to that side of it?

I'm just not super familiar with the mechanics of meme coins. Um, I've tried to get into them a few times, but to me, I just can't trade them in the same way because, um, like the slippage, um, just to buy and sell, there's like, you know, what, there was like a seven, 8% fee when I tried to do the transfer through Poo Coin and all that stuff. So, uh, to me, like if I want to have tight risk-reward and by the time I'm buying and selling, I'm already losing like close to 20% in slippage. Like I can't trade like that.

I what account size, if you don't mind me asking, did you start to run into issues of, "Okay, now I got to think about my positions maybe not fulfilled in the way that I wanted them to be or the markets that I trade now I have to have considerations?" When did that start to happen to you?

Um, it really just depends on the opportunity because I'll trade stocks that have anywhere from, you know, a few hundred thousand volume per day with small size just because I can't stay away, um, to stocks that are trading multi-billion dollars in dollar volume per day. And obviously on those multi-billion, like I'm not moving the stock at all, um, in any meaningful way, even if I'm taking multi-million dollar positions. Um, but, you know, I've definitely hit liquidity issues in some of the lower ones with maybe a few million dollar volume on the day, um, with just, you know, maybe a sub-million dollar account, um, a year or two ago. So you definitely run into those issues if you're trading small caps.

I want to say at the age of 28 that you are, you've achieved what most people dream of. And I guess, uh, you made an amount of money that your day-to-day life would not change even if you doubled the amount. Uh, what keeps you going or what is your goals with your trading because you're still young. You got a whole career ahead of you if you want.

Um, yeah. I mean, it's, I would say I'm kind of split between like pursuit of of perfection of my craft and, uh, also just what I can accomplish with the money. So, like, I'm, I'm definitely a perfectionist and I love pushing myself to be the best that I can in every facet of my life. Um, and so that is one thing that motivates me for sure. But, you know, I think my life would change if I could significantly increase the amount of money that I'm able to pull in from trading, just in terms of the good that I'm able to do in the world, um, with my family. And, uh, you know, we've been working on charity projects. Um, we're building schools in Colombia with with Tim Sykes that are opening in like a month. So, you know, I'm just really excited to be able to do more projects like that.

And just to know how much impact $50,000 can have to someone in in underprivileged countries is is crazy. And so when you get to the point where you're at these uber high levels and you can pull in multi-eight figures in a year, like the amount of good you can do with that is just crazy. So I'm, uh, I'm really looking forward to hopefully being able to do a whole lot more of that at some point in my career.

It's it's interesting to observe if someone's north star has shifted from what a young trader's would be is like materialism and just want to get rich and ideally quick to now being like, okay, philanthropy and and and a greater cause and and looking more towards fulfillment to someone that is younger and chasing [clears throat] the the finance side and the materialism side. And I've been there and I'm sure you've been there in your early days. Uh, what kind of advice would you give to them in terms of especially in the city, Miami, where that's all around and that that can be a very strong pulling force or a magnet? What kind of advice would you give to that young 21-year-old trader?

It's just very empty. I would say it's not fulfilling. Um, I definitely had a little bit of that stage because I didn't grow up with a ton of money. And so when I first started to, you know, feel like I was making my own money, like I felt like I almost had to project that and like prove to everybody that I'm I'm now worthy. Um, but once you get past that point and and start getting to higher levels, it just becomes less of a concern in my opinion. And uh, it just kind of takes the backseat and all of that stuff to me, it gets kind of old. Um, like when I was, when I first moved out of my parents' house, I moved into this high-rise apartment and the first time I saw the view, I was just like in love with it and I was like, "Oh my gosh, this is the best thing ever." But like, you just kind of get used to materialistic stuff after a while, you know? Uh, after like a month or two of living there, I was like, "Okay, yeah, I mean, it's a cool view, but like, this is just normal." And the same thing happens with everything. It's like the hedonic treadmill, you know? If you get a a new car that's like you're super excited about on the first day, after a while it's just like, "Okay, yeah, this is my car, you know?" So that type of thing is just not fulfilling. Versus when you can see the impact that you're having on people's lives, whether that's your family members who you're able to help out or, you know, these kids that you go and you see they literally have nothing and they're they're super excited because they're going to have a place to study. Like it just, to me, the comparison is you can't even.

Yeah, I can't even put words. Slight tangent from me. Um, I watched the Dan Bilzerian podcast and can't believe I'm even saying that, but he was talking about exactly what you said, the this hedonic treadmill. And he was like, "Man, when you're living in the best villas and you only go to five hotels and you got the most beautiful women and you have the the best of the best of every area of your life and you've been doing that for 5 years, it's like then that your dopamine sets the bar there. It's like nothing then makes you happy at that point. No experience gives you any excitement. A new car does nothing for you." And obviously that's an extreme example, but it's basically what you're referring to here is is that, um, you acclimatize to the new standard that you have. But the funny thing is, I watched people say this all through my youth and podcast people saying this like, oh, but you, you know, it's money isn't happiness, for example. It's like, I feel like everyone's got to touch the fire to feel it's hot.

You got to experience it for yourself. You know it's. It's hard to take someone's word for it when you see all these flashy things and you're like, I think that would make me happy. But once you actually get it and realize you're still the same person and it it doesn't fill the voids that you had inside you, it's like, okay.

I'm curious on this thing that you said of like projecting because I did that for sure and I think everybody will. I think every young trader will. And I, when I wonder why, I think it's because when we are young, we are all put up, all have a path put in front of us. It's like, go to school, go to university, get a good job, and this is what your life should look like. And naturally, as a trader, you probably are a bit of a non-conformist. And you kind of veer off into this lane, a lane where there is no path in front of you. You got to pave your own. There's huge uncertainty and there's big losses that can happen. In your case, large losses that can happen along the way. So then you kind of grow a chip on your shoulder. And when you are working hard, sacrificing, you know, not going out with your friends as much as you used to, and you're losing money, that's a weird position to be in. And then when you go through that valley, the, the, what you want to do is be like, "Mom, Dad, or friends, look, I, see," and I think it's an interesting experience. Did you have that similar identity going through, uh, like wanting to prove it to the people around you because of what you had to go through?

I think so, a little bit. Yeah. Um, I mean, I would say it honestly probably goes even back like more to my childhood, um, just like not feeling like I had enough and like once I finally felt like I had enough, like I had to prove it to myself and maybe all the people who I felt doubted me.

Um. But yeah, it's, it's just such an interesting thing to look back on. I finally have a special offer to share with all of you from the US or my futures traders, which is over 20% of the listeners of the show. And that is Alpha Futures, a leading futures prop firm that is working with Trade of Eight and Ninja Trader, that are compliant with CME regulations, with the largest end-of-day balance drawdown in the industry, a 90% profit split, and same-day [music] payout, and with the most competitive pricing in the industry, with accounts starting at just $79. On top of that, just by being a viewer of the show, you get up to 40% off all evaluations. So, why not get started with an evaluation right away? Trading $50,000, $100,000, and you already know the power of prop firms and larger capital. So, go ahead and use the link in the description or code TOOT for the best prices in the industry, plus the best discounts in the industry to make this a home run offer. If you are a futures trader.

What would you say the position of relationship to yourself is when it comes to trading? Because I want to start off with, let's say, ego, which is what we're talking about here, projection and and external validation. But then also the market can humiliate you or humble you. And then when we explore, uh, identity of a trader and what that's supposed to embody, do we now live a life through what others would say a trader should look like? For example, a trader should have a nice car, so I'm going to go buy a nice car, mimetic desire. How has identity shifted for you, uh, around these topics as you've evolved as a trader?

Identity is so tough for me as a trader because being a trader, it's really hard not to, like, I can't think of the word, like, stick my identity to my P&L performance. And that's something that I've struggled with.

I see your point. So much because if I'm at all-time highs, like it's really easy to feel great as a person, like, I am a trader, I'm at all-time highs, I'm so amazing, whatever. And then when you have the slightest drawdown, and you're like, if your whole identity is based off of you being a trader who's crushing it at all-time highs, and and you're in a drawdown, suddenly like, am I still myself? Like, am I still good? Am I still worthy? Or all of these questions? It's, it's hard to separate those two things. And that's something that I'm still working on.

How many years have you been trading? I guess.

Full time since, um, like maybe four and a half years at this point. Yeah.

Many years in. Do you ever get a sense of imposter syndrome? Whereas like, okay, you might have made millions in your career and and and when you're at the all-time highs, you feel the "I'm the man." And then you go through a brutal period and you're like, was it all luck? Or was it, you know, like, maybe it's over now? This is where the the run ends. Do you ever get that kind of sense?

I get that a ridiculous amount. Yeah. An unhealthy amount.

So, something that I'm trying to work on is being okay with bigger drawdowns. Um, because I went through kind of three stages of my trading career. In the very beginning, I had no drawdowns at all. I had like the 158 green day streak where I was a hyper scalper and I literally just green day, green day, green day, green day. And it was very easy because I was always at all-time highs. But I would see my friends who would crush it on these bigger days where these A+ opportunities came in. They bet more. They were willing to hold for a bigger win, and I never did that. Um, and so I learned from that, and that's when I started to have bigger wins. Um, and I got really aggressive to the point where I finally had some big losses. And that's where I had like my first big drawdown, which was, I believe, like a 28% drawdown off of all-time highs. Um, which for me was enormous. Uh, and I didn't like how that felt. And so I dug out of that drawdown, which took me over a year. And now I'm back in the stage where like, I've kept all of my drawdowns sub, I think like one and a half, definitely sub 2% for the last several years from all-time highs peak. Um, but I think that's that's kind of holding me back a little bit. Um, and so I want to be better about being able to put more risk on, um, and and not feel like I have to always be at the exact all-time highs peak because if I'm not, like, it's, it's mentally taxing on me. Um, because literally I'll have two red days, uh, or three red days in a row where, you know, I have a bad win rate. Um, I might have seven out of eight trades losing on a couple days in a row, and I'm questioning everything. Um, and logically I know that that doesn't make any sense because I have the track record to support this and I've gone through this same thing. And I talked to my wife about this. I've gone through the same thing so many times where I'll have red days, I question everything. I'm like, is this time different? And then a week in the future, I'm up at all-time highs again. I'm like, why were you questioning yourself? Two days later, two more red days, I'm like, am I ever going to make it again?

So, it's interesting because logic, we could talk about the logic of that, and and we could both say, yeah, logically it doesn't make sense. But the emotional side at the time, it makes sense, which is interesting. But I think I can link this to the hedonic treadmill kind of dopamine set where, you know, when you, when you get towards this all-time highs, instead of realizing this is a beautiful experience, this is really great, this is the dopamine I should feel when I go through an experience, it just becomes your new set, your new, uh, baseline.

Yeah. So when your all-time highs is your new baseline, a healthy mean reversion, even on an upwards trajectory, that mean reversion will feel like a down period, which which is crazy when you really think about it. Um, so in pursuit of improving that, any any, uh, thoughts or is this because I've asked this question to a bunch of people and even a guy that has a 30-year track record says the same thing, says the same thing. So I'm like, oh, maybe it's it's a human instinct. I don't think it ever goes away. I I don't know.

I don't know. Oh, I mean, some of my friends who are successful traders, I've talked to them and they say they just, they just don't question themselves. They just know that their edge is good and that they're going to go through these periods and it is what it is. But, um, yeah, I don't know if they're just built different. And I'm, I'm not cut from this.

I think maybe it's a a proponent of risk. Would you say you're a risk-averse or risk a risk-taker?

I'm very risk-averse. Yeah.

I think I think it's pertinent to that. Uh, I think the guys that are, you know, even when I look around at some of the entrepreneurs that I know in Dubai that are really successful, when I was a kid, I would have thought the guys that are making these millions, they would be super smart, super, you know, disciplined, super everything. And you, you meet them and like, they're just average and and sometimes slightly below average in terms of intelligence, but that gives them that delusional optimism or that forever, like, let's just take action. I'm not going to overthink it because it will work out and it works in their favor in the end. And maybe the action-taker, the risk-taker is the one that, uh, not only gets the reward but feels better about themselves in the process. Whereas someone like myself, who is also risk-averse, uh, I question each moment and even the highs, I'm like, yeah, but is this, is this going to last? And so forth.

What about, um, you know, that famous saying of like, every millionaire has seven streams of income? And as I've evolved in my own journey, I've tried to adopt that. And when I have adopted that, I've noted it's benefited my performance in the markets because I have not even talking about like, I have to worry about rent. It's also like the chase in the market or the the hunger for money gets satiated a little bit from these other things and therefore helps me be a little bit more neutral in the market. Do you, do you have other sources of income and does that support you in in the markets in any way?

Um, so I've actually, yeah, I have a slightly different viewpoint on this actually. Um, I took kind of the opposite route where like when I started off, um, I had other income. I had YouTube income. Um, I started like a Discord channel and I had a Patreon and that income definitely helped me, uh, be less stressed out about trading.

This is in your e-commerce days?

Um, no. Oh, so this was like right after I transitioned from e-commerce into trading. So, I had the YouTube channel originally for e-commerce and then in the end of 2020, I started trading stocks and I was so excited about it because, you know, I made $2,000 in 15 minutes and I was, I had to share with people. Um, and so I started making videos and people were like, "You have to open, uh, you know, a Discord." And so I was like, "Okay." And so I did that. Um, and that got up to, I think the peak was like maybe $20,000 a month in, um, the peak of, uh, February 2021. Um, and it just went downhill from there in terms of, uh, revenue. But that definitely was like a huge help for me in the beginning of my career because I was trading my Roth IRA at that point. And I didn't have to take any money out. Um, not that I really would be able to, except for contributions because it's a retirement account, but I was able to live off of those expenses, um, off of that income stream and grow my account while I was in the smaller stages. But now that I'm later in my career, I actually am kind of taking the reverse stance of that because I feel like the bigger you get as a trader and the more advanced you become, the more things that you have distracting you, it's actually holding you back. Um, and so I actually made the decision to close down permanently my my Discord community and shut down my Patreon at the end of June. Um, and, you know, I've, I've been having basically the best performance of my career since then. Obviously, it's been a hot market and it's so it's, it's not, it's somewhat of a coincidence that it overlapped, but I think just if you focus on too many things and spread your attention apart versus just like going all in on trading, it might actually, uh, hold you back. Um, and this is something that Alex Orzi talks about a lot. Like there's.

In the red dress.

Yeah. Yeah. Exactly. You know, like you get distracted by shiny object syndrome and like, I want to do this and I want to do this and do this versus if you just stuck to doing one thing and doing it really well. And for me, that's trading for a decade plus. Like by the end of that point, you can scale that one thing to such a high level that you make exponentially more than you would make from all those other income streams combined. Um, so that's the way that I personally look at it. But I do think it's important to have some money outside of the markets, um, just for peace of mind. Um, so I do have that. But I have a few other, like outside of.

Back to Homoi. I think his quote was the difference between millionaires and billionaires is the billionaire is better at saying no because they'll all have good opportunity, deal flow, whatever. But is is this ability to say no? It's an interesting perspective. Uh, I want to wrap up the episode with an open mic towards the audience where they're a new trader and they're in this valley that I was speaking about, the valley of despair, where maybe they're isolating themselves, their parents don't understand what they're doing, the friends are saying, "Come back and hang out," and they're not seeing the results yet. Uh, so it's like high sacrifice and low reward. Should I continue? What words of advice would you give to them?

This is actually going to be a funny answer. I actually think trading is not the right answer for most people. Um, I think it takes a special type of person to be able to make it as a trader. Um, you have to be able to, in my opinion, be very disciplined and put up with a large amount of failure, um, for a long period of time. And most people realistically don't have what it takes. So, I think the best advice for the average Joe is, you know, really question if it's what you want to do and like, if you're willing to lose money for years before you see something that works for you because all of the people who I know who made it big in trading, like almost all of them lost for several years before they started making money. Myself included, and most of my best friends. So.

Yeah. Your biggest loss being?

My biggest loss?

Yeah.

Um, well, my biggest loss wasn't at the beginning of my career. It happened after I found success. But the biggest loss was like a $850,000 drawdown in an hour. So.

Gosh. Yeah.

Uh, but obviously a beginner's not going to experience that. But, you know, for several years from 2016 to 2018, I couldn't make money. I lost money, you know, for years.

Yeah. The difference was you had money to lose when you lost $850, whereas even a $3,000 loss at the beginning is more.

Exactly. Yeah. When I started with a $2K account, I, you know, a $30 loss hurt.

Because that was what that was like, I can't do the math, like four hours, five hours of lifeguarding for me. So.

Yeah. If if you're in the time for money realm, then even a $5 loss is like, oh, that's X amount of my time.

Exactly.

Beautiful. Um, yeah, wonderful episode, David. This was, uh, a lot of fun and I think we explored a lot of cool topics. So, thank you for driving down and being here for us today.

Of course, bro. Thanks for having me on.

There we go. Beautiful stuff, man. Here we go.