Lance Breitstein’s Path to 8-Figure Trading Success: Key Insights and Strategies

Lance, I'd like to welcome your audience, as well as the general public to this conversation between Traders. It's really great to have you here and have a chance to sit down with you and pick your brain. I am Jonathan Chariton, a current Trillium Trader. I have the pleasure to interview Lance Breitstein, a former top Trillium Trader for many years, head of the Chicago office, who is today a trading consultant and philanthropist. Did I get that right?

I think that seems about right. Maybe also just stand up, awesome dude! I can attest that that's true. That's true. So, as you know, one of the things we do at Trillium is long-form conversations with our Traders. It's a way of learning and spreading best practices across the firm. But we've only ever done it with current Traders, and those conversations have always been internal to the firm. So today, we are going to do something special and speak with you, a former legendary Trillium Trader, and share it publicly. I have been really looking forward to this, as you've been a tremendous mentor to many in the firm, including a very close personal mentor to me for many years. I'm excited to have the chance to sit down with you and pick your brain. I have a ton I want to talk to you about, and I'd really just like to say thank you for your time and for for doing this.

My pleasure. It's been great mentoring you and seeing you grow as a Trader, and the friendship that gets built with it. And I will say, while we do have an outline for this conversation, all of our playful banter is 100% unscripted and authentic.

I love it! I love it! Let's start at the beginning, beginning. So how did you get into trading? What brought you to Trillium?

Sure. So I think it was probably my sophomore year in college. I read a random stock book, and it seemed pretty fascinating. And then I was looking on Amazon and I came upon on the Market Wizard series. I ordered one of those books, and the second I read it, I was just obsessed. And that really started the whole obsession of reading everything I could get my hands on, starting to scour the internet. And back then, there wasn't the same online presence on Twitter and everything else. So I don't think there was the same level of education out there that there is now. And the most obvious decision was then, okay, how do I work for a trading firm? Then, as is true today, you need to be so careful of what are the good firms, what are the [ __ ] ones, what are just the total bucket shops where you're you're you're screwed. And obviously, Trillium ended up sifting towards the top for being around so long and their reputation of building successful Traders. And I was fortunate enough to get the interview from on-campus recruiting.

So you come to Trillium and you ended up in the Jersey office. How did that happen?

Yeah, so that's that's funny because, I mean, you know you well, actually, I'm not even gonna say his name because I've tried to keep him anonymous for the most part. But what amazed me most about that is I was supposed to end up starting in the New York City office. And so many traders wanted to be in Manhattan. So many people had that image of, if I'm a real trader, you need to work in New York City. But for me, I knew the caliber of this trader. I knew his ability to craft other successful traders.

Hold on, we we have to take a step back because I think we have to do a little bit of a preamble. That when you come to work at Trillium, one of the things that every new trader gets is a mentor, a trainer, somebody with a vested interest in seeing you succeed, who sits next to you, who shows you how to trade. So this is the person you're talking about. And so one one funny thing there is so many people on the internet ask, oh, why would you ever work for a trading firm? I get to keep 100% of my profits. And it's like, well, yeah, sure, but you're missing the other part. What would your profits be if you did work for a great firm with great mentorship? Not only that, but what would your probability of success be, right? So it's it's it's almost like, would you really want 100% of zero if 99 out of 100 traders don't succeed? And if you take some of these top firms like a Trillium, the success rate is just so much higher, right? You're talking about, I mean, I don't know, I feel like in the Chicago office, we probably retained about like one in three or one in four trainees, which for this industry is pretty damn good. After how long? I don't know, I'd say over like the couple year plus, you know, hitting like 100k plus, you know, like the 100K milestone. And so so I think probably the number one offering of of a really good firm is simply the mentorship, right? You're surrounded by by traders that all generally have edge, right? Like like Trillium is what I mean, 120 plus people now, and 120 plus probably traders. Sorry, I meant 120 plus traders. Yeah, and obviously some of those are newer, but the absolute core of the firm has been around forever. And you have all these traders with edge. Then you have essentially so much guidance as far as what types of strategies, because the number one issue I've encountered in most retail traders is obviously, if you're a beginner, they just purely don't have edge and they're fooled by randomness. So the most valuable thing for most of these people is exactly that direct mentorship, which both of us were so fortunate to have.

So fortunate. I've had so many mentors, including you, at Trillium. It's probably the number one reason, and maybe the only reason, I'm successful, to be honest. I mean, I I truly don't think if I was on my own, retail style, I don't think I would have succeeded. It was already so hard for me to begin with, even with all the resources. I wouldn't have had a clue. And now, I think the level of information out there is is infinitely better than 15 years ago, but it's it's it's still so difficult. You need you need mentorship in some form, without doubt.

So you end up in Jersey with the reason. Go out there is because that's the office of who was at the time the top trader at Trillium, Corey. And you want it to be with the best. Why?

My my whole thinking was, I just, I don't, I don't care about the New York City life. I don't care about the social life, the fun, or whatever, or the glamour. All I cared about is what is going to give me the highest chance of success at what was my dream job.

So you end up in Jersey with a top trader. Is, I mean, I assume you're with the best. Are you just crushing it right away? Is that is that how it works?

Tell whatever the opposite of crushing it right away is. And I know I know later on in this series, we were able to pull up that that P&L curve of myself over time. But essentially, I sucked. Our favorite Mr. Gary Grill, head of head of HR. I I remember quite well that he had to come down from from New York City to have a little talk with with myself. And I remember it was like a nice summer day or something. And maybe we were like, maybe I was a year into the job or so. And he comes down just to, I mean, Gary's the greatest guy on earth, right? And so we he takes me out, we're sitting outside on this bench. And and it was the very, very nice, productive way of saying, hey man, you have all these resources. We're kind of, you know, we're we're just a little concerned about your progress. How do you feel? What can we do to better better support you? Which was the reality was, hey man, like, you're getting some of the best mentorship in the business. It's been a year, and you're not showing too much growth. Like, what what can we do? Like, let's kick it into high gear. And so it was it was a really slow, it was a slow start. Like I struggled so much. And it's it's a tough job. And I think we can forget that having our rookie years were so so long ago now. But man, the frustration you face, and it's it's really tough and hard to relate to at this point. But I try not to forget it when I when I mentor people because this this job is is just so uniquely difficult emotionally and psychologically. And I mean, actually, I'm sure this will also come up, but we both work with with Jonathan Katz. And it it helps you deal with the struggles of this job.

We're definitely going to talk about that. Jonathan Katz, by the way, is a performance coach, a clinical psychologist who works primarily with traders and athletes, who is a who is a performance coach for both Lance and well, myself, because you recommended him. But at this point, I think we've both been working with him for years, and he's been an invaluable resource. So how, what, explain like a little bit about the like the atmosphere over in Jersey? Like, obviously, I can attest that you're one of the hardest working people, and not just hard, but one of the smartest working people I know. So what was, and you're you're you have an amazing mentor. What's the what's the issue? What like, what's holding you back?

Yeah, and I think, as as we know, with with with trading, a lot of trades rhyme, but none of them are exactly the same. And I would just, overall, I think I'm a very reflective, deep thinker. I'm not a quick thinker. Some people are just gunslingers, shoot from the hip. I'm a very slow, deliberate thinker. And that's not what this job requires, especially at a firm like Trillium, where we're competing on those the the hyper limits of of human performance. And for me, it was just trying to process all these different variables all at once. And also learning from that trader was like from drinking from a fire hose, right? He didn't have a couple simple plays. He was doing so many different strategies and so many nuances and so many different scalps. And there was was just so, he had developed a system that was just so nuanced. And so you would think, oh, A is exactly the same as B. Then he would be like, what? Like, how could you ever think A is like B? You're overlooking all these variables. And you're like, holy [ __ ] like, you're your your head would just spin. And it would just take it, it just took me so many times of getting so many reps in to just, my my best analogy is, it's almost as if if we tried to hit a 90 mph fastball, we would stand no chance whatsoever. We would have no clue where it's going. And to even stand a chance, we would probably need what, like 2,000 swings at at that ball? And I think it just really takes a long time to get those mental synapses and those processes firing so fast that you can make an intelligent decision. And it was hard.

So at the time, were you like, was your primary focus to replicate his strategy, or were you trying to take the things that he was teaching you and kind of create your own system?

Yeah, in in no way was I trying to create my own. Like, and that's what I see so many new hires do. Is I mean, I've trained for a while, right? Especially at at the Chicago office. And you see so many people that, not not in any malicious intention way, but so many people try to reinvent the wheel. And so much is like, hey, there's a lot of smart traders at these firms. If someone's telling you, when A happens, do B. When X happens, do Y. It's like, you really just just want to follow that advice and refine it. And so many people that I've trained have wasted time trying to carve their own path when it's like, no, monkey see, monkey do for a while. Once you have your foundation, then try to figure out your own things. So at least I was smart enough to be like, hey, Lance, don't be a dummy. Every single word this guy tells you, just take it as gospel and ask questions to learn. Like, I asked a zillion questions. In fact, I was I I was made fun of for how many questions I would always ask because I wanted to just know every piece of information. And and never did I think, okay, I'm going to try and outsmart or reinvent the wheel. At least in those early stages, it makes no sense.

About a year goes by, and you're still not, you know, showing any performance. By the way, I don't think a year is really any huge length of time in this business, especially not now. I think I think the learning curve has gotten longer over time since I've started 15 years ago. But it got so bad that you almost left the firm at one point, right?

Yeah, no, I was I was interviewing and I remember hiding the fact that I was interviewing because I was scared of of getting fired. But I had student loans, I had a lot of bills to pay, and it was it was concerning. And it's frustrating. And you you start to ask, how much time do I want to give this if I'm not showing signs of hope? And so then one of our other buddies spoke with me and said, look, man, I I think intellectually, you're starting to grasp this stuff. You just, you're going to really regret it. And I think if we think of the job itself as a trade, if you succeed, it's so asymmetric where you really do do want to give it the full stop. And I know a lot of the people out there watching this don't have the same resources we had, right? So if the resource, if the learning curve for us is two years, if you don't have some of those advantages, it's so much longer than that. And you just really need to be in it for the long haul. And so many people, I try to tell them, like, build up your war chest, do your savings, whatever you need to do, because if if you think, okay, I'm going to give this six to 12 months, you might as well not bother at all.

I think it's so, and even a little bit more than like the specific time frame, I agree with you. You need to give it a little bit more time than that. But the even more important than the specific time frame is to understand when you're actually making progress, but the P&L is not showing it yet. And this is something that I think that I learned from this. This is probably the the maybe the number one thing that I've learned from working with you, which is so, we're actually going to put, with your permission, of course, we're going to put a picture of the curve of your P&L from inception at Trillium to when you left, just the curve, to to make a point. Which is, your learning curve is very different than most people. It's slow, slow, slow, like you just said, that first year, and then very, very fast. It's describing essentially an exponential curve. And that's not an accident. So I think that it's really a very revealing thing that you were able to do this. So let's talk about, you know, your sort of attitude towards what progress even is, because I think that's going to really help explain how how a curve like this develops.

Yeah, so so full disclosure, John did actually get me a bobblehead present. I did. So I am actually biased when I say this, but first, thank you, John. And I think the bobblehead concept is so so important. And a lot of people should keep in mind that so many of the concepts I discuss, this wasn't Lance in 2011 or whatever, didn't know these concepts. So many of these things I had to learn the hard way and kind of develop and title and make make fun. And by the way, they seem intuitive. I mean, I feel like the the audience will listen to this and be like, that's obvious. But it's not obvious. So many things seem obvious in retrospect are out there. Like like like the focus nowadays on on sleep in performance. And nowadays, you've got the Huberman, the A's of the world all ranting about sleep. And it's like, man, 15 years ago, nobody was was the the trader mindset was just grind, grind, till till your death, you know, until you're ready to drop with no sleep. Sure. And so the bobblehead concept really dis is and focuses on rather than thinking about your P&L, focus on, is your expected value going up over time? In other words, I can still be losing money, but if I'm learning from any of those mistakes, I'm actually increasing my expected value and making it less negative or more positive. And this becomes such a powerful mindset because if you take a really big rip and you lose 20 grand or 50 grand, you might feel awful. But if you're able to learn something and you're able to adapt and incorporate that and make your trading more robust and stronger and safer, then guess what? You lost that P&L, but your expected value and how you're going to perform over time is so much better. And I think especially once you start to really compete within the firm and compete with other traders, it's it's so easy to play that comparison game and get inside your head. And that's when the psychology really matters. And we we've we've all know that struggle. We all know those comparisons. We all know pH and how tilting everything can be. And I think none of us are robots. Trading will always be emotional. There's no way around it. But the more we can recognize what's optimal and we can try to reprogram ourselves, it just helps us so much better. And even seeing your growth over the last couple years, the things that used to tilt you or bother you, you've developed such a stronger mindset. And that comes from putting in the work. And you're doing such a better job of of focusing on, okay, like, even if I mess something up or even if I miss a trade, how can I learn from it? How can I build a better process? And how can I make sure I don't miss it? And so one one thing that came up, just because it's it's timely of the recording of this, and I know like a lot of firms out there aren't doing overnight trading, but just just to make the point, this was the second time where you where someone potentially could have participated in the overnight trading session of GME. And I think what happens so often when you're training people, mentoring people, you see that the good traders can miss something, but then immediately adapt and and fix that. And the people that make the most progress and move their bobblehead up on that that curve the most, the fastest, are the people that don't need to see something happen five, six, seven, eight, nine times to learn the lesson, and they see it the first time. Like, if you were to take in in 2022, some of those CPI trades, it's it's so important to adapt to that market where that was the theme. So so quick, how many semiconductor breakouts do you want to see before you start participating or at least scanning for it or prepping it and thinking how to add it to your playbook? And I think the really good traders do a good job of like, not taking a mistrade or a loss too personally. Obviously, it hurts. Like, it's never not going to hurt. But then how can I learn from this? If there's nothing to learn, or you've learned what there is to learn, how can I then, as as good old Ted Lasso would say, just just be the goldfish and move on? And the other thing that I think is is important to both of us, especially where where we are at our career, is just the emotional wellness aspect. Like nobody wants to live their whole career being miserable. And I think there's it can be so easy to do that if you're always focusing on the the flaws or the mistakes you make, rather than looking at where you've come from. I actually think it's really hard to be really great at something if you're miserable at it. I think that those two things go hand in hand. But before before I really dive into anything else, let let me just say, public service announcement. You mentioned the GME trade that just happened. I should probably say that we're filming this as of June 3rd. So there's a there was a trade in GME that just happened. You can you can look it up. So we're going to do two takes. But GME is going to go up from here. GME is going to go lower from here. I think this is when you have to make your disclosure that you're not giving, you know, disclosure, this is not trading advice, whatever I generally say on any recorded media, the opposite always happens.

So essentially, I think a lot of people have this intuitive idea, and I did definitely did it myself when I started, which is progress is, you know, P&L moving from the lower left to the upper right over time. And that's how I would judge P&L looking back over whether it be a day, a week, a month, a year, etc. And what you showed me to do is you had this concept of your expected value or your present value as a trader on a chart. And sort of the point on that chart is a little Lance bobblehead that would move up every time you would sort of increase your present value, your expected value, by by by learning something new or by or by doing something to make your expected value higher for the future. So what were the ways, the quote 1% improvements, that you would do to to move that bobblehead up?

Well, one interesting thing that I'll I'll add, actually, is conceptually, if you're going to have a long, successful, nice, sustainable career, by definition, with that same concept, that means the P&L in the near term is actually generally going to be the least amount you ever make. Like, most people that are in year two, year four, year five, they're they're like, oh my God, I can't believe I missed this opportunity. There's never going to be anything like that. And what they don't recognize is that everything you do, do in year one is going to be a rounding error in year three. Everything you do in year three is going to be a rounding error in year six, then six and 10 and 15 and so on. And so I think it's also good to maintain that that perspective as well, because it's it really reinforces where the the real value comes from. Like, wow, if I become this mega trader, and if I just keep on growing, all of that dwarfs and makes makes the rest rounding a. And I tried to have that mindset. And one funny thing I used to do is when I would go in on Sundays to the Princeton office, actually, and this was when I was making literally zero dollars at the time, I I would tell myself, every every hour I'm here, I'm making $500. And obviously, I wasn't seeing the money go into my pocket, but I just knew in future terms, like me doing all this work, one day it's it's it's going to pay. Whether I see it or not, my bobblehead is moving higher. I don't see it at all in the present, but in the future. And that that happened. And so as far as those 1% improvements, man, they they were they were endless, because there's really, it's it's really an infinite set. And so one thing that's funny is to this day, in my Evernote, I still do a list of 1% improvements that's been going on for a couple years now. They're not really trade related, but but life related. And it can be it can be things as simple as about breathing exercises to help you be more focused. It can be improving your sleep. It can be improving your diet. It can be, how can I better remove distractions? Small things like, okay, if if I missed this trade because I'm on my phone, therefore I need to put my phone in my desk during the trading hours. It could be, how can I improve a certain style of my trading? It can be, how can I reach out to a trader to better incorporate options trading? How can I reach out to a trader to better incorporate earnings or whatever else? And so pretty much every day, I for for years, I would not allow myself to leave the office unless I came up with, what's this little 1% improvement that's going to make me a little bit better? And and some some of the guys in in our group together, of of our little pod, they've been doing an amazing job. And when you look back at that list, I know we're probably thinking the same list right now. When you look back at that list and you see what people can come up with in a whole year, like it is it's no BS when you come up with 300 different ideas and you think, wow, this is really improving their game. It adds up a ton.

Absolutely. I mean, this is something I learned from you, but I do it the same way where I look at P&L as a lagging indicator. And every day I try to make a some 1% improvement. It could be a change or an improvement in some kind of filter or a piece of research, or it could be some way to have faster situational awareness or put in orders in a different way. And sort of the aggregation of that over time is so, so powerful. And it's easy to forget that when you look at it, you know, when you're just looking at the daily P&L or whatever. And by the way, this system, it it is true whether you're trying to improve it. It doesn't matter what your end goal is. It doesn't matter if it's hitting home runs, or you know, you know, physical exercise, or just, it's it's just as long as you are improving yourself for the future, then you've done better today. It doesn't matter what the results are. And over time, that really shows up. The biggest crime you can make in trading is when ever you have a bad day to not learn the lesson and to just get frustrated and leave. And I and I would just see that, like right when you train so many classes of of traders, you see who's the person that has a bad day and works harder? Who's the person that has a bad day and it bothers him so much that they just learn everything there is? And who's the person that's just like, ah, screw this, I'm out of here, I'll figure this out tomorrow. And those habits add up because ironically, the most you have to gain is on your bad days. If if you only reviewed on your good days, you're learning probably one tenth as much as your bad days.

It's so true. On your on your good days, there's there's a tendency to be like, you know, this is great and hit the bar or whatever it is and go celebrate, as opposed to, you know, really reflecting on how you could have gotten more out of the day. And it's it's so true that if you get into the habit of when you know, really learning from things that you didn't do right, you end up really moving that bobblehead. And over time, it really shows off in such a big way. I'm it's such a profound concept. And as as a beginner, what what was my win? What was my win rate? As the first year or two, I was probably I was probably neg 80% of days. If I'm going to be frustrated and leave early and not get that work done, guess what? I'm not going anywhere because I'm only doing real work on on two out of the 10 days then. And and that that sounds like an exaggeration, but I've seen that happen to some degree, just so so often where where where people people don't put in the work on the bad days, when that's that's literally what the job is to, I would almost say a huge part of the job is just simply when I make mistakes and do things wrong and have bad days, do I learn from them, build systems to fix those mistakes, and then just move forward? It's a huge part.

So as a follow on to this 1% concept, let's talk a little bit about edge. I remember when I started working with you, I knew your reputation from from The Firm. You were one of the top traders, but you were in Chicago, I was in New York. I didn't really know you personally all that well. And you agreed to essentially mentor myself and a few other people. And here I am, I'm super excited. And you know, I expect we're about to have our first meeting. Here I am about to be read into the secrets of trading. And the first question you asked me is, tell me about your sleep. And I'm thinking to myself, Jesus, this guy's a scam artist. Who's this hippie who wants to know about how I'm sleeping? I just want to know how he trades the way he does. And I I was totally caught off guard. And I'm thinking, you know, I came to realize very quickly, thankfully, why this is important because sleep is good edge. You can have a whole conversation, we can do a whole podcast about sleep in and of itself. But I think really, the the the most important thing is I want to talk to you about about edge is that it's not, it's not that there's one huge edge that makes you the trader that you are. It's that there's a lot of little edges. Yeah, and that's what makes the difference. Can you walk us through some examples of those small things that, you know, give you the edge?

Yeah, and I think what's funny is is so many people when they hear me talk about different process improvements and stuff, they think I'm just like BSing and hiding the the top secret ways to improve. And whenever I do videos online, people don't realize that like, oh, wait, this is the actual stuff I'm working on with with the traders I help. And so really, edge can come in many different ways, right? And I think one good project for anyone in the audience is think is to just simply reflect, what are the types of edge? What are my specific edges? And how can I maximize them or build on them? And so for traders at Trillium, you have a technological edge. You have generally an informational edge from different news sources and everything. You have an edge in experience, right? You have an edge in probably you're better capitalized than than the average trader. And then you also just have stuff like super fast internet, super fast hot keys, and and and software and everything else. You have super stable internet and software that's never really crashing. And edge as a trader can even be psychological based, right? And if most people are going to panic, and I'm someone that has seen this so many times from experience, and I know that when I feel that panic in my stomach, oh boy, this is really, really getting good. That itself is even an edge. And so I think it's so good and important for people to recognize, what are my actual edges? And why does why does that exist? How can I find more of it? How can I maximize it? So if you're someone that is a huge information-based trader, maybe your edge is knowing all the context around certain news stories. You know, what what company has upcoming court decisions? You know the M&A status of every single deal going on. You know what approvals certain biotechs are are waiting for. And if that's the case, where do those edges best present themselves? How can you even even strengthen those? But it's it's almost endless in different ways. And I think so much as a trader is our job to to document all the different ways these edges pan out. And then you build this database that you can just always refer to. And I think what really happens as traders is we build this database, and it allows us to just get so many mental reps. So that when we see stuff like like take Golf Lima, that one insurance company that had the the fuzzy Panda research report, right? I was pretty bullish when that when that fully capitulated. And I had a a guy helping me for for my trading course going through my Evernote of past short reports. And he pulled up, I think it was Golf Delta Sierra. And I don't, maybe that was like a Blue Orca short, I can't remember the exact details. But he pulled up that chart. And what happened in is well, as the daily, like the daily chart after that short report was ex was pretty much exactly the same. And he said, holy [ __ ], did you did you know about this? And I said, of course. These are all, not that I remembered the exact tick or the situation, but those are essentially the the data points that get imprinted into your mind. And I think some of the best traders, they just have, nobody, definitely don't have photo memory. And I don't think most people have photographic memory. But what it is, is when you spend so many hours studying charts, it gets imprinted in your head. And so even even take like Nate from Investors Underground, right? He's been doing this a long while, and he's really good at saying, oh, ABC is just like XYZ. And it's so important to be able to make those connections and know that in the aggregate, what kind of happens in these plays. And that itself is is a form of edge, right?

So this is like part of your 1% improvement, you know, style where you're you're going to do all these different things to get all these different edges. But of course, it's not really like a checkbox where, okay, like speed, check that box, I'm fast now. Like everything is, you know, there there there's differences. So my question is, is it more important to have a lot of different edges, or to have an enormous edge in one particular, you know, spot of the market?

Yeah, that's a good question. I think for the most part, if you have one huge edge, you can probably make the most money. But the tradeoff is probably higher variance, doing so less opportunities, less less trades, in case anything goes wrong. But I think if you have a bunch of small edges, you probably can't make as much, but you can have much lower variance in your trading. And so there's a lot of traders I know that are pretty much consistently positive every single month, every single year. And a lot of those guys have a very diverse toolkit of different trading strategies. But I would say I've known the biggest traders I've known aren't necessarily the most diverse, the biggest in P&L. They're always people that when they have pocket aces, they know their pocket aces, and they go really, really, really, really big. And oddly, I think just based on personality styles, I do think one personality style tends to attract the more diverse, less variant playbook, and another personality style does tend to attract the trader that wants to just go really big and burrow really deep.

So you can tell me if agree with this, but I've always thought about sort of edge as this pyramid. And meaning, let's just say there's $100 to be made on any particular play. I disagree. No, I'm, you know, there's $100 to be made on any particular play. It's never the case that a hundred people are each going to make a dollar. It never works that way. It's usually the case that one person will make $90, and then a handful of people will get the other $10, and then the rest will lose money. And that's that's such an important point you're bringing up. It's there there's this quote, by the way, I think from Bruce Lee, I think we've spoken about this, that it's something, it's I'm I'm probably going to, you know, destroy this, but it's something to the effect of, fear not the man who's practiced a thousand kicks, fear the man who's practiced one kick a thousand times. So I guess my point is, is that when you have a deep edge in some specific thing, that's the way you can make the most amount of money, without a doubt. On the other hand, I'm of the opinion that edge is sort of constantly eroding. Like, it's never the case that like the market's always trying to take your edge away from you. And so everything that I do, all those small one percent improvements are sort of like edge seeds for the future. You never know which you're fighting gravity, essentially, right? You never know like which one is going to be sort of the next big thing or be that next deep edge. But it's a way to make sure that I have that, you know, continuing advantage for the future.

I I think a couple things you said are so important. So first of all, if you were to, I know we're both huge sports fans, huge, huge, huge sports fans. And if you were to take the realm of pro sarcasm, by the way, if any get that, even with our our levels of social dysfunction, we're like, that is sarcasm. And it's it's one of those things where even with with athletes, what probably the top, I don't know, 20 athletes in the world might make like 90% of the total money. Like, if you were to look at the NBA, it's a couple guys with almost all the salary, right, and endorsements and everything else. And I think traders need to realize that if you become super elite in one area, you really tend to get it's the Pareto principle, right? It's it's we saw we see this in in in the firm all the time. What's so cool about Trillium and probably like one of the most entertaining aspects is, you know, there's the actively traded page where you get all the aggregate stats for the traders within the firm, and you can see that a ticker might have 50 traders, and the average P&L might be $500. But there's one or two people that just blew out all the numbers beyond imagination. And so it's really like one or two people making the buy and share. And so much of trading can be winner takes all. And especially from an expected value standpoint, there's only so much liquidity. And whoever is getting those best prices, you are by far in that best position and taking the least amount of risk and have the most reward. And so that's important to recognize. And and I think I think that's why especially in the beginning, you don't want to be a jack of all trades. You want to just probably burrow in to one or two. And until you get until you get good.

Well, the good thing is you don't have to choose, right? You can you can do both. There's it's not like you have to. It took me a while to recognize this, but I think you hear different advice like that. And I think it gets so conflated because there's different advice that's right for certain stages and different periods of time. If your current strategies are really slow, okay, it's probably a good time to learn. If your current strategies are super active, you just want to be refining those. And I think it's like, there's no right answer because there's not supposed to be.

So the job of a trader, you have given the best answer to what the job of a trader is that I have ever heard. So can you tell us what the job of a trader is?

Sure. So I think if you really think about our job, what we're doing is we're trying to identify at any given moment of time, what do we expect or estimate that the expected value is? And then based on that information, how are we betting? Right? Because we'll see some trade where you think it's amazing, and you might bet heavily. Then other people on The Firm didn't take the trade at all. And and presumably they've seen many of the same ones. And the question is, okay, why not? They had a different view of expected value. And so if you think about it, every single thing we do is, did I accurately estimate the expected value based on experience and all the variables and everything? Then did I bet appropriately? And I think so often, what really really separated me was in times where people throughout the firm all really like the same trade, if I recognized the trade as being really, really good, I would just bet so, so, so much more exponentially. So the job of the traders is essentially to identify expected value and bet accordingly.

Yeah, right. So that that's that's the thing. So I think that expected value is simply the most foundational concept in trading. And believe it or not, even amongst some traders, I think it's one of the most widely misunderstood things. The amount of fallacies out there and and people that haven't deeply thought about expected value. And like, sure, you can have some level of success without thinking about it, but it truly impairs so many people's trading because they haven't actually done done the work. And it it bleeds into their trading and their biases. I am going to go so far as to say that you again, you could be successful, you could have a period of, you know, a great run without really fundamentally understanding this. But unless you fundamentally understand expected value, and this is not rocket science at all, I really don't think you can have a very long-term successful cure in creating or anything else that requires probabilistic thinking.

Can you explain to us what expected value is?

So expected value really just comes down to, over the long run, what is the expectancy? Or in other words, what is the result of doing this trade over an infinite number of times? In other words, right, if if I flip a coin, head or tails, if if I win $1 for heads, lose $1 for tails, 50/50 odds, in the long run, I'm going to make $0. And our goal as traders is to find where do we have, not necessarily a greater than 50/50 chance, but where do we have a positive expectancy based on both the chance of success and the risk reward? And so many people alone make the fallacy that they think, oh, I need a 60, 70% win rate, or or I need, it's it's so, I don't even know where FinTwit comes up with some of this crap. But so many people are like, oh, I need a, I need a three to one reward to risk. No, you don't. And so many people will be like, oh, man, like, oh, you could, the risk was was 10x your reward. So what if, what if you win 99.5% of the time, right? If your risk is 10, 10x the reward, you just need to size it appropriately. And so many people don't understand that stuff. And if that stuff sounds like gibberish, you need to slow this video down and really think about it, because that fundamental understanding, like you said, is everything to our job.

So if that's sounds like gibberish to you, then I think you should take the next slide we're going to put up here and pause and take a minute to watch it a few times, because it might look like some horrible math formula, but it is really not complicated. And I think so when I started working with you, one of the things that I did amongst a lot of things was I took every single trade that I made for a long period. I don't know how long it was, but it was a long period of time. And it it didn't matter if it was, if I was risking a dollar, it wasn't the size, it was what was the expected value of that trade? And obviously, that's a, you know, it's an estimate on my part. But I wanted to get into the habit of thinking of every single trade in terms of what the expected value was, not was I right, was I wrong, but what was the expected value? And such a great exercise. And so I did that for every single trade for, I don't know, maybe six months until it was just ingrained in my head to think that way. And this is the formula that I used. So just a quick explanation, if this, you know, if if math isn't your thing, and this looks sort of horrible to you, let me just run through it. This is really not that complicated. It is the probability of me being right in this example, it's 90%. And the reward is $5. And the risk is a dollar. Then it is 90% times five minus one. Minus 0.9. So there's a 10% chance I'm going to be.

Wrong times, one and all. That's going to be times, however many shares I think I can trade under those terms without moving the market such that those odds change. So, in this case, when you do all that math, the expected value of this trade comes to $44,000. This was the way that I forced myself to think about trading. It was the foundational concept that really got me to the next level in my trading, and I think that this is something that should be taught to everybody on day one.

What's so interesting is, I think so many people, and it's just human nature, I think for the most part, so many people will overweight the really unlikely, low-probability worst-case scenarios. And for a lot of people, it's just a common human bias. We saw that during the Silicon Valley banking crisis, where when those stocks were halting, I've had so many traders debate with me halt risk and stuff. It's like, okay, like stocks can halt, but again, what's the probability that you're going to get caught in it during certain percents? And there was the famous W trade where the stock went from like $15 to like FY or something, and people are worried about, "Oh, what if the stock gets halted?" But it's like, dude, that thing ended up going like 4X, you know? And even with stuff like GME and AMC moving around, "Oh, what happens if X tweet or Y tweet happens?" Like, okay, it's totally valid to prepare, and you want a game plan, and you want to think about your risk and everything else. Like, all those are smart things to do. But if you're going to think about those outlier risks, you still need to ascribe a probability. And if that probability is like, "Oh man, there's like a 1% chance the stock gets halted," or a 3% chance, or like, "Okay, there's like a 0.1% chance Roaring Kitty tweets out, 'JK, just kidding, like this is all [ __ ]'," like the odds of that. Like, it's totally fine to think about that, but if the odds are like 0.1% that happens while you're in the trade, you need to just essentially near discount that whole thing.

And the other thing too is people will take these worst-case scenarios and then they just totally forget about the fact they're able to get out of the trade. Like, even if Roaring Kitty was like, "Oh, he, this was all [ __ ]," that stock is not just going to magically go to $5 or something, right? Even with the halt, it's still not going to just, there's still going to be some form of price discovery. And I see it all the time where you really need to force traders to say, like, "Okay, I understand that you're afraid of that loss, but ascribe a probability."

Yeah, I mean, the truth of the matter is, we just live in a probabilistic world. Anytime you hear one of these people, you know, on TV or on the internet, whatever, and they're talking about like, "This stock is going to go to X, Y, and Z," and I know that. I mean, they don't know that. The truth of the matter is, there's too many variables in the real world to be able to say with 100% clarity very many things. So, it's all a probability. The question is, what is the probability? What's your risk? What's your reward? And you do the math to figure out on average what I'm going to make or lose in this trade. If you look at that trade that I, you know, had just thrown up there on the screen, before, 10 times out of 100, I'm going to lose on that trade. And those 10 times, it was still a good trade. It's just I just caught the wrong 10 times.

You want to know what makes me laugh too? Is all this stuff is so pervasive in the real world too. Where even if, if, if I'll pick on my mom, for example. Anytime I'm out and about in the city, she's like, "Oh, like, be safe." Or even I posted once on Twitter that I was taking the subway in New York, and people are like, "Oh my God, you're crazy." And look, the chance of some issue isn't zero, but you still need to weight it by, okay, it's very, very, very low for the tens of thousands of people riding the subway every day. And then you still need to weigh it against the benefit. And I, I mean, you're a longtime New Yorker, right? If you're trying to get somewhere at 5:00 p.m. Uptown to Downtown in New York City, there's generally one option because a car is going to take you an hour. And so many times people think, "Oh man, this worst-case scenario." But okay, again, what's the probability? Sure.

So, when I started thinking in expected value, by the way, and this came a lot when we started working together, I realized some incredibly profound things about my trading. One of the things that I learned was that I wasn't varying my size enough based on expected value. And instead, I was varying my size, meaning getting more size when I was most confident in a trade working. But that is not necessarily the time to do it. It's not when you know you could be most confident, because I can be most confident on something, but the reward could be very small and the risk could be enormous. So that might not be the right time to size. It's really when the expected value is greatest.

The other thing that I realized is I was complacent in some of, I don't know, the most obvious trades. Just because they were obvious, I had this tendency, and I think a lot of people even at Trillium do this, is that there's this tendency to want to get big and really want to crush like the sexy, the crazy stuff. And you know what? I'm not, look, there's a lot of money to be made in those trades. I mean, volatility is where opportunity is. But a lot of the time, you can make, you can pull so much expected value out of some of these, like, for lack of a better word, like layup trades, that are not sexy, that are not talked about on CNBC. That's so much what I do with my preaching about those easy money trades. I think for almost any beginner to intermediate, really almost any trader, honestly, certainly intermediate or advanced, the lowest hanging P&L is just sizing up your easy money trades. And it's so often not the super crazy risky ones that are flying all over the place. A lot of times it's like, which, by the way, everybody is looking at.

Yeah, yeah. And sometimes it can just be a really, really simple, easy trade for you where you might be able to risk one or two pennies and with an 80% chance it goes 10. And most people will get 5,000 shares, but they could have just as easily, without slippage, gotten 50,000. And if you start to take those layups and bet so much more on them, that's what really started to elevate my game. And what I've seen with so many traders I work with is the biggest progress leaps come from when they're able to start sizing those easy money trades. Then that gives them the cushion to then parlay it on the big opportunities, and that's when that curve just goes right to the moon.

And this is, I think, probably one of the more profound things that I learned, which was that it's not necessarily the case, or it shouldn't even be your goal as a trader, to have more right ideas or be, you know, have a higher hit rate. Instead, your goal should be to capture more EV. That's the way elite traders think. That's the way to really improve your performance. Said another way, it's possible to lose money but make the right decision, and that be a good trade. It's no different than if you ever watched the World Series of Poker. Those guys, they don't get better cards, but at the World Series of Poker, at the final table, on any given year, it's always three or four people that are the same people year in and year out. They don't get better cards than anybody else. What's different about them is that when they know that they have the best hand, when they have the nuts, or when they have the high expected value, they get the most money in that pot as they possibly can. That's the difference between those guys, and that's what separates legendary traders like you from the pack, in my opinion.

So, I wanted to go over, if we could, a few examples of some of those easy trades, some of those layup trades.

Let's do it. All right. So, first, let's talk about ARM on April 17th, 2024.

Yeah, okay. Can you walk us through why that's such an easy layup trade for you?

Sure. So, the reason why I liked this trade was essentially the semis. Nvidia, SMCI, ARM had capitulated probably about a month later. They got super euphoric, huge blow-off candles. And so ARM then started to set up with support at $120. And then we had just consecutive lower highs against that support. And a lot of the concepts that I talk about are pretty similar. So some people have seen me tweet or do videos on the bouncy ball trade. And while not quite the same, the concept's there, in that this formed support, then we're having weaker and weaker bounces. The trade is still technically the backside, meaning we put in that euphoric top. And what happened was, even the prior day, Nvidia and SMCI were really, really strong. ARM couldn't bounce anywhere. And I think it was like nearly flat on the day. And I was thinking, "Wow, if these show any weakness, and if this breaks $120, it's just going to crack, and the floor is going to fall out."

And on so many, there's so many different ways to trade this. You can trade this intraday, you can trade this as a swing trade, which is, I know, something you're always interested in expanding into. And that $120 break, it ended up trading just totally beautiful. And this is something that can be premeditated. It's not a super fast breaking news trade. It's not a super crazy GME, AMC, worry about halts and uncapped risk and stuff. And it's a very defined trade that you can plan for. You can figure out how much you're willing to risk. And that allows you to really hone in and attack these much better than some of the faster ones. And especially for me, when I was starting out, I struggled with the speed of the game. So what really helped me find my footing was saying, like, "Okay, these are the couple categories of trades that are too fast. Like, some of the scalps is just too much for me. What are these slowest, replicable trades I can find?" And those slow trades, even though they're not sexy, some of these are just boring, whatever things, but they're just highly replicable trades. And so, even this is essentially just a daily chart pattern. Anyone can scan for this. There's nothing that crazy, but you've got a lot of eyes. It's a super overvalued stock. It's capitulated. The technicals align. And once that breaks, it was just, look out below.

So you had, I mean, when we talk about easy trades, I think it's really important to flush out that it's a matter of, it's not just conviction, it's also the risk versus reward. You were never risking a ton of money in this trade. You have this stock which is essentially trading on air, a little bit, both for a variety of reasons, valuation, for structural reasons, for the move that it just had, for its relative weakness relative to the rest of the industry. And you have this kind of perfect level setup that once it breaks, there's really no support underneath it. So you could risk, sort of, I don't know what your actual out is, but a small amount, maybe a point or so, whatever it might be. Now, you can tell us, but in order to make this huge gap, if the bottom falls out of it. And because you've seen this happen so many times, and because you track the data and have watched things like this happen over and over and over again over your experience, you know that the likelihood is actually pretty high.

Yeah. So the combination of those things is what makes it sort of an easy, no-brainer trade to you. Instead of trying to figure out how to push your size in, you know that risky new thing, let me figure out how I can get 10X, 20X, 50X in this trade. Yep. And so many people will try to leave their lane rather than just say, "Hey, this is my strength. This is what I'm doing well at. I just need to add size." As long as your expected value isn't being impaired, if you've got good edge, you really want to push that gradually and prudently, but push it to its maximum. And so many people try and just always chase the shiny object rather than doing exactly that.

And even with this ARM example, I think a lot of people, when we talk about data, like the reality is, I didn't do that much intense backtesting. More important than any backtesting, and the data was simply having a framework for how price action works and knowing these chart patterns. And like I said before, every chart rhymes, but none of them are exactly the same. And that's one of the flaws of backtesting. How do you really backtest something like ARM that doesn't have even much price data? How do you backtest something where we've never had semiconductors probably make that kind of move since, I'd imagine, the 90s or something? And there's not really that many comparables. How do you backtest something that has that certain amount of float locked up and all the other nuances? It's super hard. And instead, it's way easier for me to just say, "Look, I know broadly the data on this, but much more important is conceptually, this is doing as a chart everything I really want it to do." Sure.

So, let's talk about a trade that you already brought up, which was GL on April 11th. This was a funny panda short, but the irony of this is that if you look at the chart of this, and we're going to put it up on the screen, it's funny that it's kind of obvious that the trade is to short it. But your easy trade was actually buying it at the bottom.

I should add, that's the best place to buy. And I should say, we tell you, John. And for those who think that this is, I don't know, some sort of, I don't know, but I can attest that this is truly something that Lance is immaculately gifted at being able to read the bottom of these things. I am a student of his. I'm still a student of his. And yeah, so just walk us through the variables. The best way to buy at the bottom is to be the bottom and buy as much size to guarantee you're the bottom. Well, that doesn't work out sometimes. But when it does, you look like a legend. Yeah, but I'm familiar. I'm very blessed to be familiar with the criteria that you're looking at in order to buy that bottom, and it is truly insightful. Can you walk us through some of the things that you were looking at that really caught your eye in that trade?

Sure. And so, I would say there were two plays, actually. Probably the easier, slightly easier trade was that breakdown after we had consolidated and were unable to bounce. Like, I think that's actually, to some degree, shorting it is a little bit safer play, especially if you're a little bit newer. I think that short, once we couldn't bounce after that first leg in that consolidation, I think that's a pretty controlled way to get involved. So you're talking like right around like $90 or was it? No, it was later around like the $55 or whatever. Oh, okay. I thought you were talking more around like already done the leg, 80 and capitulated down to 60, then consolidated. Yep. And but I think what the really kind of the best trade in it is, once that did then break down and capitulate. So that first breakdown, the short is a little bit safer, definitely better for beginners. But at least for me, in my playbook and my expertise, that move lower down towards $40 bucks, that was getting just so incredibly juicy to me. And again, why does my view differ from the market and other participants? Because I had so much experience to back it up. And this is something I have cataloged and databased and traded so many times. And so many people don't have that information, they don't have that data, they don't have that experience. So when they see this, it almost becomes this reflective process of, "Oh, if we're so much, it's got to be true. No way this is going to bounce, or else we'd be bouncing." But what happens is, you're able to recognize that, "Hey, wait a second. Like, now this is just pure capitulation, right?" The stock started at a hundred bucks. Some of these allegations are somewhat known, not that I try to be an analyst. Like, I don't think you want to interpret the news too much. But nevertheless, we had a stock go from 100 to 40. There's a lot of coverage on this. There's a lot of analysts out there. There's a lot of people that have been following this. And it really comes down to recognizing the expected value and knowing from past experience just how far something like this could bounce. And I didn't, I didn't hold this one that well. But when you go back through the data of all these reports, when something with these short reports really, really capitulates, some of those multi-day bounces can be very, very impressive.

I want to dig into that a little bit. I think people are saying, "Okay, everything you're saying makes sense, but how do I know where to buy it? How do I know it's at $40 and not $50 or $60?" So, what is it about this chart that screams capitulation to you at, you know, $40 specifically?

So, I did actually try to buy small size initially at around $60. But the bars weren't quite getting bigger, the volume wasn't quite getting so big. This was kind of the first really big leg. And so, I think one of the most important concepts in mean reversion, which is so hard for people to internalize because it's scary, but the more legs something goes in one direction, the more probable reversal becomes, and the bigger reward, and the less the risk. Which is very rare, very, very rare. Right? Let's say GL panicked all the way to $5. What's the risk? You're risking at not even $5. Even this company, even if it was bankrupt, is still probably trading at a buck or something, right? It doesn't go to zero. And that's in a worst-case, next-day bankruptcy. So your risk is really only three or four bucks. And 1% of the time. But if these allegations are just total [ __ ] or even if they're somewhat [ __ ], then your reward when this stock's at $5 is so, so massive. And the probability of you getting some kind of bounce is near 100%. Now, obviously, we didn't go to five bucks. But I like to use those polar extremes to really suss out these concepts. So if at $5, you'd want hundreds of thousands of shares. Potentially maybe at $10, you want less. But as it goes higher, there's certainly going to be, there should be at least some price where you're willing to buy because you recognize how good the risk reward is at that point. And so then we can do better than that. That's just one variable. Other stuff I'm looking at is, I want to look at what is the volume like during this. What is the selling on the pops? What is the aggression of people hitting the bid or offers? Is it really coming low? Then, of course, one other thing that I talk about is then waiting for that turn. And the only downside is with some of these halts, you need to be careful. That was at $40 bucks. It was getting juicy enough that I was more scared that I wouldn't be able to get all the stock I wanted. I was getting more towards way aggression than defense. But especially if you're a smaller trader, you can wait for that turn. And by waiting for the turn, that then allows you to have a stop that still increases your probability. And so it isn't that I knew that was the bottom, right? Because in fact, I did buy small size in the 60s, and I think I broke even or lost minorly on that.

And so when you say you bought, you bought small size in the 60s. You're not fading this. You bought it, and then you got out of the stock.

Yep, yep. And especially in general, I almost always have a stop, right? And so I did take one stab, and it bounced in a way where, like, even though I didn't make money, I didn't lose much either. And the more important thing is, once that consolidates and breaks down, and that goes another 20 points, so many people take their licks and their losses and they say, "Oh man, I'm not going to try this." Or maybe they even bought it off the open at $85 bucks and they lost. And then they buy it at $60 and they say, "Oh, I've lost twice. Am I really going to lose a third time?" And that is actually the exactly wrong thing to do, as long as you're still analyzing expected value properly. Because in my belief, in my estimation, expected value at $40 is probably 5X to 10X better than it was at $60. And 20 to 40X better than what it was at like $85 or something. And your size and your aggression should reflect that. So, I mean, I don't know my exact position size at this point, it's just so many months later. But I would assume I probably got like 10X more size at the low 40s than I did at around the 60s. And again, because that's driven by the expected value, it's just so much better at that point. Again, the balance is more probable. I still want to try and wait for that turn and get as much size as I can, which then allows me to have a stop. But it's recognizing that, "Wow, the meat on the bone when this stock is coming from 100 and we're now at 40, the meat on the bone is enormous there."

So, I actually, I think I want to point out for the audience that you're talking about a situation that is incredibly, you're the entire herd, all of Wall Street, on enormous volume. You know, this thing did 31 million shares that day, is going in one direction, and you're taking the opposite side of that. That takes an incredible amount of focus and objectivity. And I think that it's important to note that although I will say that you have some of the best mindset I've ever seen, you're still an emotional, psychological being. And I'm curious how you go about holding your objectivity in that moment. Because I would think that it's not that you were just born with this great gift, although to a certain extent, you may just have that talent, but I think it's because you've done this a thousand times. And so some of that anxiety, some of that fear of going against the grain, kind of comes out when you've done it a thousand times.

Yep. And I don't think I really was born with any innate talent for this whatsoever, by any means. In any aspect of trading, I don't think I had any innate talent. I think I was very unnatural at it and much more deliberate in my thinking than anything. I really, really needed. But I think with my trainer, a lot of what he did was mean reversion. And when I was learning those first couple years, you have normal human instincts. When everyone is panicking, you want to panic. The psychology, and you literally feel it in your stomach. I know you feel that adrenaline surge and that, "Oh holy [ __ ]," especially when you see that your P&L number, red, red, red, red, red, red, red. And there would be so many times where I would buy the first time and lose. I would buy the second time and lose. Then I would buy the front side on the third time and I would hit out at the bottom. And my trainer would get huge size on that third time, and I would be locking in a big loss, and he would just crush the play. And when you see that pan out dozens and dozens and dozens of times, you realize, "Oh, wait, I'm being the chump. I'm doing the opposite."

And so P&L. So one thing that I meant to say before, it is true that sometimes you just have bad beats. But I think people overall talk themselves too much into saying, "Oh, just a bad beat." So often, if you're ever taking a bad loss, most times with most traders, I do think generally some interpretation was wrong. And so when I was taking those losses, and my trainer was crushing it, right? One time can be random. Two can be less random. When that happens 10, 20, 30 times, and you're locking in the loss, and your trainer's making money, you need to start to realize, "Oh, wait, I'm doing the opposite of what I should be doing. I'm playing the first and the second, but then I'm missing the best one. And or hitting out at the bottom on the best one. Or playing the front side when, oh wait, what I really need to be doing is minimal or not touching the first, a little bit on the second, then if it does happen on the third, you really go big on that turn." And sometimes that might mean I totally miss out on the first time, and it just bounces right away. So I'm okay missing a lot of the nickels out there. I don't mind missing a lot of nickels in the smaller plays, but I want to be so well positioned when craziness does happen. Because what's happening essentially, people are puking out of the stock, and we're getting this multi-standard deviation crazy move. The biggest money is made at the biggest ends of the tails, when you really get the craziness to happen. Right? Even look at GameStop a couple weeks ago when it went to $80 in the pre-market. So many of those people that are capitulating up there, those are people that were poorly positioned. I want to be very selective and precise with where I do play so that I can be as well positioned to capture those best spots. And a lot of that is recognizing those nuances and then just staying in the game.

And this came up with a video I did where one trader, Kyle Williams, really, really great guy, he was trading GameStop a couple weeks ago, and he took too many paper cuts in no man's land, and then he missed when the play actually broke out. And I see so many traders, they'll trade the first couple, but they're doing it for too much size or in too many places, so that then when it's really good, they're already out of the game. And it's so, so important to position your risk and have risk rules so that you're always there for when it really, really gets good.

How many rookies have you seen locked out on some really big day, and you're just like, "Oh my God, I can't. Why did you hit your risk limit?" You never want to lock out on days like this. Of course. I think it's interesting though, because in a situation like this, well, a couple of things. But I think in a situation like GL, first of all, if I were to take, you know, a new person, a rookie, and show them a hundred examples of epic capitulation and then bounce, and then put them in a situation, a live trading situation where they were supposed to trade one, even though they've seen a hundred examples, even if they had seen a thousand examples, I don't think they'd be able to do it because emotion does take over. There's this, there's this devil on your shoulder or something that'll say, "You know, this time is different. It's not going to work out. I'm scared. Everybody is shorting this." Like, and and I think that, you know, something you did there that I don't think I've ever heard anybody point out, but this is really somewhat unique to you. I've actually also ironically seen Elon Musk do this a lot of the time. You have a tendency to think of arguments in the limit. Meaning like, if X, if G were to go to $5, if it were to go to zero, would it be a good buy then? And that's a really interesting sort of formula to stay objective about something like this. Because if you have an argument in the limit, in the most extreme case, then your argument is probably good. And if those test cases are so important to logic around, yes. Right. So in a situation like GL, yes, like it has all this negativity and everything like that. And one of the things that took me a long time to learn in order to make a trade like this is this chart. You will never, ever, ever get a chart like this but for there being some existential thing like hanging over it. That's the only time a chart looks like this. Like some random stock, a good company on a great day and a good tape is never just going to do this, otherwise everyone wouldn't be buying it. And so you need to have sort of that, that's the opportunity. It's getting everybody sort of panicked that creates the opportunity to allow the objective trader to be able to take the other side. That's the, it's not the, you know, it's not a, what's the phrase that's going around now? It's not the, it's not the, it's not a feature, it's a bug, something like that. I've heard that one. Nice engineering. You're definitely following Elon a lot.

Yeah, well, for sure. So I listen to his conference calls. He's a brilliant guy. But one thing I want to point out too, is you made the point that if a lot of people and trainees were to do this, they'd still keep on making the same mistake. And I think that's right. And I think then the question becomes, okay, how do we reprogram those emotions then? What's the best way to reprogram that? And that's where I argue some of my meta-learning stuff comes into play. Where in the moment, when it's real P&L, you can't think rationally. You're panicking. And the best way to reprogram that is when it's not real money on the line. And so what we really need to do is use some of the trading simulator technology, some of the paper trading stuff, or recording your screen so that you can relive that moment when no P&L is on the line. You don't feel the panic. You can let your rational mind dominate and build that rep. And so I think so much of what separated me is I was making the same mistakes everyone else was, but then I said, "How can I rep this? And how can I get better at this outside of the moment when it's not the pressure and the nuances and moving so fast?" And maybe you start rewatching these things in half speed and you're like, "Wait a second, this isn't so scary. Okay, that's the big flush. That's what the box and the tape looked like. That's the turn. This is it starting to get more stable." And without the emotions involved, you process so much more accurately. And then when you get so many more reps, when it actually happens, look, I'm not going to say you're 0% scared. We're still human. You're always going to feel that. There's always going to be that uncertainty. But you're infinitely more prepared. And that helps pan out for sure.

Reps are definitely the key. And I think this is something like a Trillium. You know, you were the beneficiary, and I was the beneficiary of. We have some of the greatest technology. Like we have this, we have a tool called Trader Rerun, which allows us to go and watch a play and watch the level two, the order book, and all the time and sales as they happened, and watch that as many times as we would want. And you can really gain a lot from that. But I think that the most probably the step that some people miss is that you have to do the thought process to figure out what you're trying to accomplish first. Because if you, you can get a thousand reps, but if you haven't taken the time to figure out the right way to do it and then rep it that way, then you could take, for example, if you're swinging a baseball bat, and you just go up there and swing, and you swing a thousand times the wrong way, the only thing that you've done is make it, you've ingrained even more deeply a bad habit. It's even now that ironically, you've put in all this work and you've made yourself worse off because you didn't first take the time to figure out, "Okay, what are the physics of swinging a baseball bat? What am I trying to do? And how do I do it the most efficient way?" And then repping that. You see this with trainees. So many people obsess over, "I put X amount of hours or work in." I'd rather, like, obviously hours and work in general are good, but only if they're effective hours and work. If you swung the bat wrong a thousand times, do you really want some congratulations? Like, do you think anyone's going to, in the trading world, no one's going to pat you on the back. The market's not going to say, "Oh, hey, you're doing the same shitty swing a thousand times. Good job. Here's some money." That's not how it works. And I see this with trainees. The most important thing is to make sure that the things you're working on matter. And I've seen this even over the years in Trillium, you'll have the person that relentlessly just studies the Seeking Alpha articles and the analyst reports and stuff. And it's like, okay, I'm not saying it's useless, but is it really all that effective? But then they're not able to take the right stop. They don't know what they're looking for. And so so much of the process is, are you doing work that's maximally effective? Then obviously, if so, the more the better.

This is the trade that you sort of ascribe as the trade that saved your career. You were kind of out the door, you were interviewing, and then this trade comes along, and this was your setup, and you went for it.

Yeah. And it's funny seeing it. It's amazing, isn't it? That I was able to find all the exacts in the chart. And when people talk about databasing and building these, I mean, this is what, over 11 years ago now. And I was able to still find this in my notes, in my records. And it just goes to show the level of work and the catalog. It's thousands and thousands and thousands of charts. And so this trade was special because on the daily, this was the daily chart. This was an exhaustion gap pattern. This was a pattern that I had studied quite a bit. It was something that we viewed as a higher probability pattern. And we had our little system of where to short, where to add. And while the, while the executions on the chart might look a little chaotic, and this is what also I laugh about with the Twitter world is everyone's like, "Oh my God, show me the exacts, show me the exacts." But you can't really see the size related to them, which obviously convolutes some of it. But the most important part was I had this system and this expectation of where this stock will end up. And it was something I had seen before. It is something I had built those reps in. This was much like that ARM trade we previously discussed. This was something that I was able to premeditate. We knew the stock was gapping up pre-market, and then we knew exactly at what prices we wanted it. We knew what we wanted to see. We knew we wanted to see this huge influx of volume get sucked in off the open, then a hard fail. And what happened? It shot up to about $97.50. The volume was super, super massive. That added to our conviction. Then as it starts to roll over, add, add, add. Then our target was this would kind of exhaust towards that balling. And that's exactly what happened. And this trade, I think I made, I think I made like $10,000, $11,000 or so in it. But that was literally a career-changing trade because that told me that I can do this. And I think my boss probably made 20X what I did. But I recognized that, wow, we did the same thing. If I can just build this skill set, that's life-changing money.

Sure. So I thought maybe quickly, I would run through, just, you know, as somebody who's learned from you, but who definitely trades differently. I'm a little bit more of a news trader. I would run through just one or two quick easy trades of my own. So this QYLS from February 6th. This was, this had gone down a lot on the day before on an analyst note that they had lost a Microsoft contract. And then in the middle of the day, they put out a press release that they were rescheduling their earnings. And the read-through that I had was, why would you reschedule your earnings with your stock down that much unless you had a pretty good response? And I was able to simply buy this thinking that the market's going to think this is, this is a, this is a, this is a positive development. They're going to have positive things to say. I don't think that I took a lot of risk, and I was able to scale it up just because this is some of the stuff that we worked on.

And to add some context to this, I would say, you as a trader, this is in your wheelhouse, right? Your edge tends to be your speed, your precision in processing these headlines, your ability to sift through the noise versus what's relevant, and know that context. How many traders out there were able to piece together so quickly, "Oh, wait, this QYLS, this is the stock that was down?" And I've seen this before. I have other examples where their desire to have their earnings report early. You connected those dots from pattern recognition and experience. And that speed gave you some of the best expected value in the market, right? If you can get some of those early prints, that is unbelievable. Because even if you're wrong, right, you can lose a couple points. But that ended up going over 10 points. And that's some amazing risk reward with very high probability. Because I've seen that same, I've seen, you know, and I've cataloged this, that when companies have something negative to say, they tend to push that announcement out as long as they can. When they have positive things to say, they tend to push it up. That's just something I've noticed. It seems like an obvious, simple observation, but that's only obvious and simple with experience. With experience, it's obvious and simple when you can sift that one data point out of the ocean of data points. And I think that does come with experience. That's part of the, everybody gets better with experience.

Yeah, of course. The other one I wanted to mention was this. This is a biotech stock that was actually acquired. This was an M&A thing. And for anybody who's never seen the way a buyout target or a company that's being acquired trades, it typically trades like a brick. It trades in a very, very narrow band because it's being acquired for a defined price. On this day, there was one of the most respected biotech analyst reporters on the street, Adam Feuerstein, he writes for Stat News. Came out and said he didn't think the deal was going to close for a variety of reasons, that there was a problem with the drug and that it wouldn't ultimately get FDA approval, and they didn't think that the deal was going to close. To me, it wasn't whether I agreed with him or not, to the point that there's this amazing analyst who's coming out and this is his opinion, that's new information. And given that the risk is so limited because they're being acquired for a price just north of where we are now, the expected value on this is really, really good. Because if he's right, your risk is so defined. It's so defined. If he's right, the deal falls apart. So I was able to get short this really quickly.

And you know, putting that together, that, "Okay, this isn't just like a random tweet. This is Adam Feuerstein putting out opinion on an M&A deal." Those are the type of things. And even the context there, though, what percentage of the audience knows Adam Feuerstein? What percentage of the audience follows him? What percentage of the audience has all of his past market-moving tweets documented and has those analogies in their head like you did? And then you're taking again, your edge with some of these headlines and knowing the context and being in the right spot and being able to apply that to wherever the relevant headline is. I think that the most important thing is that in the past, I would have looked at something like that and been like, "Okay, this is obvious. Everyone's going to see this." And I would have shorted some. And as, and you know, some of our work together, it was that instinct is just complacency. Instead, I should realize that this is one of those easy trades that it's not as obvious as it might seem to me. And look at what the expected value is and take advantage of that. Every situation sort of has this, you know, the situation and then the setup. They're two different things, in my opinion.

So you want to talk, for example, about like GME, that's going on right now, where it's having another one of these meme sort of explosions. So I think the situation is sort of that, you know, the stock shouldn't be trading here on any fundamental basis. There's no reason for it. It was being, go back to 2020, for example, it was being bid up by an army of, you know, mean people on Reddit using money that they received from the government. It was more than 100% short. There was a whole bunch of structural reasons why they should be going up. So we have a situation where the stock should not be trading where it is. We know that. But the setup is terrible, right? Like, you never know where this is going to end. Like, it's an amazing, it's probably the biggest short squeeze I've personally ever seen. And the thing that I took away from that was when you have a, you know, a setup where there's the situation and the setup, and those two things are in conflict, the setup has to win. Because it's not about knowing that a stock should go somewhere, it's about how you prosecute that idea. That's where all the money comes from. And I would almost, I think the more common word for situation is almost having a view. And I think there's so many traders out there with views, but a view is worthless. And it's not about having a view where you really make money. It's when you have a view plus the setup confirms that view, then you can capitalize on it. Right? You might have the view that ARM is overvalued or that ARM will go lower. If you're shorting on the way up, at

110 and It Go blows out to 160. Well, guess what? You blew up to it. It doesn't do anything. So, what you really need is the the view or the situation combined with the setup. And I think that's where so many people get themselves into trouble. And actually, that's one of the areas where where I've seen you grow a lot. How many times have you had an interpretation of of a headline? And there's times where you can be totally right, but you need the the setup to confirm your view. And when that magic happens, when those "see it" moments, that's when you can really, really go for it. And that's, I think, what you've really corrected and made a lot of progress in.

Yeah, I think that's true. I I guess the the point I'm making though is that when you have sort of a great setup, even if the situation is not, you know, something as obvious as GMA, if you have a great setup, you probably have an easy trade. Because you probably have a situation where your risk is defined, where if you're right, you're going to make, you know, a nice reward. Because it always comes down to the math at the end of the day. The setup's everything.

Sure. By the way, for example, just in just in terms of expected value, I think that trade, I I would say that the chances of this deal probably blowing up were probably quite low. I don't think that those were very high. But the expected, the expected value was high because there was so little risk in in putting that position up. So that's just a really good example of you don't need to be right very often for that trade to have enormous expected value.

In the context of expected value, we talked about identifying expected value and betting accordingly. Can you explain to me what you mean by betting accordingly?

Yep. So obviously, within your risk limits and your your tolerance, you want to bet more as the expected value gets higher. And one rule of thumb that I've actually come up with in in the more recent years is you never want to bet more than an amount that will negatively psychologically impact you. And I think you, me, all of us as traders, we know that you can get in such a negative feedback loop from some of these losses. And so even if you, your lockout might be 50,000 or H 100,000, if a $20,000 loss is going to ruin your motivation, you're going to be like, depressed and upset. Well, guess what? You don't want to risk that amount. And so much of progress is being being on this positive feedback loop where you're motivated, you're really ready to do work, you're feeling energized. And so if something is really, really, really good, you want to bet approaching that amount that is large, but still won't negatively hurt you.

Two questions. The first is, expected value is going to tell you over time if you're going to make money or lose money. If the expected value is positive, why not bet as much as you can every single time?

Yep. So for starters, because some stuff, you start to have variance. So the expected value might be positive, but what if the skew is like super good, but your win rate is only 5%? If you start betting 10% on a 5% win rate trade, you're probably going to blow up. And so a lot of that is recognizing, okay, it's not just about positive expected value because there's also some opportunity cost. If you're focusing on a trade where you can make one penny, is there some trade with an expected value out there of $1? Or if you're going to bet on something that only makes you a penny, but it's highly variant, will some of those downswings again affect your psychology? And so it's really trying to allocate your capital in in selectively in the right spots with the highest expected value.

So this is one of those things that I was talking about about how you tend to play arguments out in the limit. That so what you pointed out is effectively that even though there might be high expected value, if the risk of that particular trade is a wipeout risk, that means, you know, your career will be over, so to speak. Then even though the expected value might be high, it might not be worth it if you catch that one time that it's that that you lose. So in that sense, that's one limitation of that's one example where you would not want to, you know, bet just because the expected value is positive.

Other, other, other examples where you might not want to, other than just psychologically, like, you know, are there other just tangible reasons? I mean, probably the most common is just simply cost. Like, even if we talk about buying power or or capital, or if or if the expected value of the play might be very good, but you yourself as a trader, if your decision-making is impaired, perhaps you perceive the trade to have positive expected value, but you're really on tilt. Maybe you've lost the last five trades and you're you're yelling and screaming. Well, guess what? Even if it's a good trade, you probably don't want to take it right now. You probably just want to take a break, get in the right mindset. So there are some some factors like that. But but ultimately, it's just, are you able to accurately judge EV and then just bet in a way that's not going to impair your senses and and you're trading otherwise?

And one of the things for me is a lot of people, I think, will get, you know, two-thirds of the way down thinking this way, and they they'll bet, you know, linearly higher amounts. So, for example, you'll have one unit of expected value, they'll bet one, two units, they'll bet two, three units, they'll bet three. You don't do that. You bet bet exponentially. So if you have one unit, you might bet one. If you have two units, you might bet 10. And if you have three, you might bet 50. So how did you come to that way of thinking and how do you handle that psychologically?

Well, I think a lot is just recognizing the math. And and a lot of that, I just saw experientially from my trainer. And he was just so innately great at going huge in the best opportunities, and it just paid off again and again and again. And then you would sit there having bet the same amount, and you're just like, wow, this was a standout opportunity. And if my good days are 200 bucks, I made 200 bucks. But this was really a $1,000 day. And it's, it's that recognition. And that's the other benefit of working for a firm is you're able to see, like, oh, wait, today was special. People didn't bet their normal amount of risk. People bet so much, so much more. And so when you do the math, it's much like in poker, right? On the average hand, you might want to just fold. But there are, while there's no the nuts where you you can't lose, and there's there's no risk in trading, there are some insanely amazing expected value hands. And when you bet really, really, really big, that's actually the safest strategy. It's actually safest to bet big when the odds are most in your favor. It's actually riskiest to bet uniformly. If you're playing every hand in poker the same bet, you're going to lose, you're going to be wiped out. And so the really good traders, they avoid so much of the in between middle hands, but then they go really, really big on the ones that are skewed. And that's actually the safest, counterintuitively. That's it's it's such a, you know, obvious thing, but it it, it's it's such a profound concept.

Look, look, even, even at Buffett, he sits on a good chunk of cash, a lot, lot of the time. But then when when the [ __ ] really hits the fan, he's going huge. And he's leaving himself in a position to bet really, really big. M when the expected value is the best. The other thing I think is, you know, important to note is that, you know, we're not, expected value is a best estimate, right? So if you're expected, I think Buffett said it's something like this, like, if you're, if your expected value needs to be calculated out three or four decimal points, then you probably don't have the greatest trade of all time, right? You need a margin of safety. So, you know, in even in that trade that, you know, we spoke about, you know, the beginning of this, you know, I wasn't really 90% sure. That's a guess. It might have been 80. It might have been 95. So, you know, that, that, that's just another thing. Like this, this is, it's just an estimate. It's just a best guess. And over time, you learned to sort of own it.

Yeah. So I want to talk about a little bit more about the the 1% improvements. So when we talk about these 1% improvements, what really, what we're usually talking about is sort of these timeless things. So in general, just a way that I can make myself faster, or faster situational awareness, or deeper insight, something that's going to be good, sort of for all time. But in reality, markets are always changing. They're very dynamic. And it's not appropriate to say to yourself, I'm not going to take advantage of some opportunity because it might not be there forever. So you invented, I think you invented it, but you certainly invented it as far as I'm concerned. This notion of what you call the broken slot machine.

Lance original. This is a Lancism. I get a royalty every time you say it. Well, I don't know who it's coming from. It's not coming from me. Say it again. Come on. But tell us what the broken slot machine is.

So I thought up this analogy because, and I I love analogies, especially casino and poker ones, because there are so many parallels. And if you walk into a casino and you play a normal slot machine, you're you're over the long run, you might win a little, but in the long run, you're losing with 100% certainty. And people will be fooled by that randomness and think, oh my God, this is this is good, or I might win. When it's like, no, you're you're just playing pure randomness and noise, and you will lose. And a lot of trading is like that. If we've seen it at Trillium, right? How many, how many inefficient tickers really exist each day? I mean, we're we're talking, what, there's probably three to five tickers that the firm does very well on each day. Sure, the firm might trade 40, 50 tickers plus, but it's it's really probably three to five tickers making up 90% of the profits. And so you really need to recognize that stock selection is so, so, so important. And sometimes there's stocks that are like a broken slot machine. They're no longer just random. There's times where very precise moments where there's a huge amount of edge. And the beauty of working for a firm is you see the tickers that everyone else is trading. And that alone is a priceless benefit. Because if I was on my own trying to learn trading, and you don't even know where to start, like, you're, what are you going to start with? You're going to start with like, the the big cap efficient names. Oh, I'm gonna just watch Tesla every day. I'm gonna watch Microsoft every day. Not that those tickers can't have edge, but if you do only the the big tickers, you miss a lot of the stuff like the GameStop, the AMC, or whatever else is some of the low caps that people really love. And the most important thing is I want to find, like, to even stand a chance at winning at that casino, I want to find the game that's offering me the most, the best odds. And if you don't do that, you don't stand a chance. If you do, that's just not, it's necessary but not sufficient to win. You still need to bet in the right places and still have the right system. Much like with poker, if you sit down at a poker table, you have the potential to win, but you still need to play the right hands, you still need to bet appropriately, you still need to have the right outs. And and that's how I really relate that analogy.

So the analogy being that if you were to walk into a casino and you saw, you know, a row of slot machines and they were all paying out, you know, once every hundred times or whatever, and there was one that was paying out 20 times for every hundred, the obvious thing to do is to play that particular slot machine, right? So the the the metaphor is that in the market, even though most things are efficient most of the time, in certain markets, you get certain pockets of the market that are just totally inefficient and offering way better expected value for you. And so in those situations, even though it's not going to last forever, even though some security officer is going to come and fix the slot machine eventually, you want to take as much out of that slot machine as you can. And and I think what, what in Trillium world, we don't realize, but there's so many people out there with these limiting beliefs and biases. They say, oh, I'm an ES futures trader. I'm an NQ trader, or I'm a Forex trader. And imagine only trading the the S&P. Yet then stuff like GameStop and AMC are making these crazy moves, and you're like, oh, not, not, not my bag. And it's like, what, like, why would you not at least study and watch some of this stuff? There's so many, like, the edge you can get in Trillium has gotten in certain plays or some of the the trades you touched on is so staggering that, yet that then it's just unmatched in some of the more efficient products, like like the futures generally.

And it's so true because, you know, I'll talk to guys from different areas. There there are guys I know who do M&A. There are guys like like like a merger arb fund. There's guys that I know that do biotech. And so they won't even, I think when you have, it could be, it could be really helpful in certain ways to specialize, but it is also limiting in the sense that there could be opportunity in a place and you just won't touch it because it's outside of your purview. I think that's something that Trillium does really, really well. That's a competitive advantage of being a day trader. By definition, we don't have a mandate. We can hop around wherever. This week, I'm I'm a meme stock trader. I am a pro meme stock trader. Next week, I might be a pro macro inflation trader. Correct. Who, who the hell knows? I've been all of those things. You were a biotech trader.

So can we talk a little bit about some of those, you know, specific, you know, broken slot machines, just to give the audience sort of an idea of some of the examples that we've had in the recent past?

Sure. And I think it's, it's so important to always reflect on what, what kind of market are we in? And what is the, like, the slot machine, the broken slot machine of each market? And each context. And look, there's going to be some stuff where you're just not good at. It's not in your repertoire. That's fine. You can just study it. And so if we even take 2024 so far, I would divide this year up probably into into three phases. I think the beginning of the year was kind of cryptomania. We've seen opportunities in the Coinbases, the Maras, the the Bitcoin ETFs themselves. So that's how I would view the year starting. And those offered good opportunities. And that's where most at at Trillium and even myself, I think most pro traders P&L probably was. Then we very quickly went into the the bullish AI semiconductor space, right? We saw the breakouts of Nvidia, SMCI, Arm. And that was the big theme in February. That was huge. And if you're not trading that stuff, like again, you don't need to trade everything, but it's it at least worth being open-minded to what's really working. Then we started to walk into AMC, GME, which also spurred some of the meme stocks and some of the the low float stuff like FF the other the other week. And if if you're not moving to some of those plays or at least considering them, I I do think you're doing yourself a disservice.

Sure. I mean, just to throw out a couple of other examples. I think there was, so if you go back to like the the time frame of '20 to '22, there was there was a time frame where there were these SPACs out there. SPACs are just these sort of shell companies that acquire another company. Whenever they would do an acquisition, didn't matter who they acquired, didn't matter what the terms were, the terms were, and it these things would just go berserk. And so you had it, it was, it was just a broken slot machine that if on any SPAC deal, you were able to buy as much as you could, chances are you were going to make a lot of money. And that's, it doesn't make any sense, but that's the market we were in. If I, I don't have the real data on this, but it would be, it would be pretty interesting. I would say most years, you have these couple themes. If I were a betting man, which I am, I I would I would bet that 80% of Trillium's P&L each year probably comes from those big themes. So in 2018, there was the the the Trump China tariff wars. That was probably easily 80% of the firm's P&L. And like then what last year was was the Silicon Valley banking crisis? Or was that two years ago? I don't know. I don't I don't know either. We'll fact check it. But but I'm sure that was a huge portion. And like in the trading world, especially at the the pro firm level, so much is that Pareto principle. Like it's probably what, like I would imagine 5% of tickers probably make up 90% of the P&L. And even, it's it's true at a trader level, it's true at a trade level, it's true at a firm level. It's a very asymmetric game. And if you're not allowing yourself to play at the most broken slot machines, you're missing out on so much of that asymmetry.

The interesting thing is, I find that those 1% improvements in those things that are that are sort of timeless will help me do the daily grind. They help, well, they'll also help me in these situations. But the, it is true that there are, there are just certain times in the market where things get so detached from reality that the opportunity is enormous. I would tell you that I think my lifetime P&L, I would bet you half of it comes from no more than a dozen trading days.

I would bet you. Oh, I wouldn't doubt that one bit. I I think mine was equally crazy. If if I had a guess, I think I I would bet probably 10 trading days a year made up 80, 90% of my P&L or something. But but again, I think it's, you know, to go back to that phrase that's going around, the feature, not a bug. I remember it now. It's, you know, it's, that's I think that's the way it's supposed to be, right? Like that's, that's because those, those are the hands where you're essentially getting the nuts. And so then if you're betting uniformly, guess what that means? If you're betting uniformly, you're you're going to make your P&L would be 20% as much. M that's crazy.

So you have, you know, very kind of succinctly talk talk about your trading strategy is, you know, to boil down to one sentence is, I just want to be with the trend. That's your whole strategy. But in reality, obviously, there's an incredible amount of nuance that goes into that. But you've kind of identified a number of different patterns that you've seen in order to be with that trend that you've been public about. Some sort of identifying a counter trend, some identifying the beginning of a trend. So I want to talk about some of those specific examples that, you know, you've called out as your own sort of being with the trend sort of easy trades.

The first is the right side of the V, which is something we've spoken a little about in GL. This is identifying a counter trend. So for those people who don't really understand the right side of the V, there's nothing so special so much about the shape. It's that the expected value, if you have a V, if you have a stock that's going down and then going up, so a stock that goes from example for 100 to 50, and you want to buy it at 52, the difference in expected value of buying it in 52, two on the left side of the V, which is on the way down, is orders of magnitude different from buying it at the same price in the same stock at 52 on the right side of the V, on the way up. So can you just flush out this concept? I think so many people won't really give the proper thought and internalize that because it's, it's what it's really saying is you can buy something at the same price, but just because it's at the same price does not mean it's got the same expected value. And this applies to so many things. So imagine with some of your headline trades, if you buy, I don't know, 16 bucks on a news headline, and then it takes off, and then it all it comes all the way back, and you buy $16 because the headline came all the way back three minutes later. That expected value is not the same. Not at all. One is probably a very great, amazing trade, and the second one is probably a very bad trade, right? And this even happens with breakouts, right? And a lot of people have heard me say the best trades immediately work. And the best trades go on your favor. So if you're buying a $5 breakout, if you're able to buy 501, 502, if you buy it right when it breaks, that's way, way different than if you're buying it because, oh man, this stock couldn't go anywhere and we've pulled back like six times now. If you're buying it after it's pulled back six times, the odds of you not losing on that is so much less than the first time. And so specifically with some of the mean reversion stuff, the beauty of buying on the right side of the V is this is after the turn. So I would argue not only are your probabilities better because you're now going with the trend where it's bouncing rather than going on the downside, and the other benefit is you also now have a stop. And so I had to learn this the hard way with some of my early stage mean reversion trading is so many stocks end up going so much further than you think. So if you're buying too early in stuff like a G, you can really, really get hosed when that goes so much further than you'd imagine. And when you're buying that way, what is your stop? You don't, you don't have one unless you're just saying, I'm going to stop out once I lock out, which really is just arbitrary and ineffective. So not only are your probability of success worse, but also there's no stop. And so once you wait for that turn, you might often get the same price. And I was always so concerned like, oh man, like I'm not going to be able to get the same liquidity. But what I found is not only was I still often able to get the liquidity I wanted, but I was taking so much less heat on the way down because I wouldn't have stock there that I wasn't in such a better place to get way more aggressive on that turn. And it just allowed me to stress so much less. And that simple, I probably started to internalize a lot of that in 2018 and 2019, and that just changed my trading around. Like I was able to get so much more aggressive because I was recognizing just what a better expected value that that that was for me.

Sure. And I think this is, I think this does go back to something that I mentioned before, which is, and I see this happen to so many people who are who are new to trading, which is that they really focus on sort of the situations, like knowing like, okay, like for example, that GL, like, okay, I think it's going to bounce. I can think it's going to bounce. And like, we can both have the same, you know, the hypothesis that it's going to bounce. But the difference and the magic and what separates a great trader from somebody who's going to lose money in this trade is how you prosecute that idea. If you just buy, like in the example that I gave, buying execute rather than prosecute, but I'll, I'll sure, whatever the right word is, but like, you know, the the idea is that if I buy it at 52 on the way down, I'm fighting the trend. Whereas if I buy it on the way up, I'm with the trend. I have momentum and gravity going with me.

You want to know what's interesting to me that I that I don't lose sight of? If you recall back to to your really rookie days, or or from other rookies you've mentored, say someone gets caught in a really, really big panic. They're they're buying on the way down the bottom. Really flushes out. What's the most common place for like a total rookie to sell once they hold through the panic, then it starts to bounce? Probably as soon as they're in the money. Yeah. Right around their average price. Yeah. Right. And that is actually the exact opposite of the right side of the V. You're taking all the heat, then the turn happens, it gets close to your average price. So so often, right where you're supposed to be buying is where you intuitively as an amateur want to sell. And that is actually a magical thing because I think both of us as as pro traders, we recognize that your base psychology and your base emotions, the market really has an amateur by the top and hit out of the bottom psychologically of every single move. And it's almost one of those things where when you see a novice making that mistake, you can invert that logic. Like, wait, this is what they're, it's so common in human nature to do that. What if I invert that? If they're selling there, what if I buy there? And for all those reasons, it's so dead on on the right move and so dead on the wrong move for those amateurs, which we've all done a thousand times.

Without a doubt. Sure. These are just a handful of examples I want to throw up on the on the screen in terms of the right side of the V because this is one of your, this is one of the, I think this is probably one of the first things that I learned from you, which is, you know, this particular style of trading. So Mara on January 16th, 2024. We'll throw up the chart. This, you know, chart sort of speaks for itself. It's a perfect example of that. AVGO on May 30th, '23. Again, yeah, that was an epic, epic move. Yep. I think you did a video on this one specifically. Yeah, I think it's possible. Yeah. This, this had the incredible daily chart and and the intraday where they both aligned. And man, if if you're shorting too early on that one, you're you're getting hosed because that is a hell of a move. And then the last one was RV on August 22nd, 2022, which is just another really perfect example of the right side of the V sort of in action.

Y. And there's nothing so so magic about this stuff, but I do think that like just based on human psychology and and just liquidity and everything else, things do tend to trend at times. Then you have the weaker hands that make the tails of those trends. And you get the people that puke it both ways to the downside or to the upside. And around those tails, if you can just wait and position yourself to be around for for after that turn is in, it's it's just incredible expected value generally.

So another, you know, classic Lance-ism that you've brought in is, you mentioned this a little bit when we talked about Arm, was the concept of a bouncy ball. Can you walk us through this bouncy ball strategy of yours?

Yeah. So and again, most of these concepts, a lot aren't necessarily so original, but a little, little, little twist. And so really, the bouncy ball pattern, almost like we were discussing with with the the Arm daily chart, you have some type of of catalyst that makes a a stock do a leg lower or a leg higher. And you either form, generally support in the case of the bouncy ball, and you have this support level, and then you do subsequent lower highs against that support, then it breaks. And so often that allows for a very, very defined significant level where when that breaks, it's such a good risk reward short. And so the nuances always matter. And so so many people will be like, oh, is this a bouncy ball trade? And it's like, well, no, not really, because it might not make consecutive lower highs, or there might not be, it might not be an in-play stock, or there might not be a good news catalyst, or there might not be a good daily chart. And so it's really finding all these nuances together. And then the qualities of the setup, how good's the consolidation, how weak are those bounces into the break? Like like AMC, actually, in GameStop, not not this time around, but but back in in the middle of last month, those those did on the big days where they blew out to like 11 and 80 bucks, those were bouncy balls, but they weren't quite sitting on lows. So like that setup, that it rhymed, and the concept was kind of there, but it wasn't perfect. And so a lot is just trying to interpret those nuances.

So, but, you know, when you come up with these, you know, Lancism names for these things, like right side of the V, or bouncy ball, whatever else we're going to talk about, you know, a lot of times you're just making a simplistic name for an actually very nuanced topic. So the concept of sort of the bouncy ball is really, you have this stock that first of all, you mentioned it, which is kind of, you know, I see this on Twitter all the time, which is people are asking if everything is a bouncy ball. But you really do have to have that fundamental catalyst of some sort in the beginning. Because otherwise, I can look, you know, on any given day, I can bring up any chart and probably find like a bouncy ball somewhere in the midst of that. That's the concept of finding in-play stocks, stocks that are really moving with with volume and emotion.

Sure. So you want something that had some catalyst to drive it somewhere, and then it sort of will consolidate or sort of pick a level at a certain point, but it's still trying to find itself. And it's either it's weak and getting weaker, and then eventually cracks, or in the opposite, strong and getting stronger, and then we'll crack to the upside. So that's just an, this is an example, by the way, CDNA on January 26th, 2024. I think this is your example, if I'm not mistaken. But this is, you know, just another example. If you look like around around 9:50, if you see sort of how it has that that move down from 11 down to $10, trying to figure itself out. It's making, you know, lower highs, and eventually it consolidates and just breaks that low and cracks.

Yeah. And so often, if I can interrupt, like people be like, oh, but why didn't you take that that first short at around 130? It went to lows and stuff, or what, what about closer to 2 o'clock? And that's where the nuance is. Like the quality and length of the consolidation really matter. And so why does it matter? That's why. So so often traders will have the right idea, but because of these nuances that they're missing, they take too many stabs and just paper cut themselves. And that's also where that no man's land concept also comes from. But essentially, consolidation is a level of price acceptance. So around around 1:30 and and 2:00 p.m., I mean, I can't see the exact times from here, but you have, it's a little bit too rangy where if you break to lows, there still might be people that are looking to take covers or people that are looking to buy. But when you really sit and consolidate on level very, very tightly, once that level breaks, and everybody knows it, there's nobody, like, there's nobody in the world really that wants to buy Arm at $19.90, you know, or like, remember some of the mega Tesla breakouts? What was the big level? I think it was what, like 900 or something pre pre-split? But it's like, if 900 is this big level that everybody's watching, you never want to be the chump that is selling at 901, 902, 9003.

So that's actually, I was actually thinking about something else. So you mentioned the the the, you know, the fact that there's not going to be there anybody to to buy after already breaks down. But I was actually thinking about the risks. So if you have a very rangy stock, well, then your out needs to really be at the top of that range. Because an out, it's really important, isn't just some arbitrary amount. It has to be, it has to be kind of a place where your expected value is, you're wrong, where that's where that's where you're willing to throw in the towel and say, this isn't right, like I'm wrong. So if you're going to short it in that, you know, kind of rangy part of the chart, then you have to be willing to give it to the top of that range. But if you have a very tight consolidation, then you only have to give it to the top of the consolidation. So your risk has gone down so much. And you're you're touching on one of my favorite concepts, which I plan on doing much, much more on in the future, and that's really the geometry of these charts. And understanding that, like, wait, if I'm using prior bar bars or the highs of this range, if this range is much rangier, if this bar is coming from all the way out, out, out here, then your risk is so much higher, and therefore your risk rewarded and expected value are so much lower. So those nuances of the proportions and the ratios of how these charts set up, it really, really matters to that expected value.

And yeah, sorry, both factors really. It's, it's both. So I would argue what we're touching on is, you're touching on that the rangier it is, the bigger the risk, which impairs the expected value. And I'm touching on that the worse the consolidation is, the worse the probability of a clean successful move. So both of those factors are impairing the expected value. And and when you align these factors properly, that's why you're getting all, all your all your things aligned, all all of your things are helping you, and your expected value might go from negative, way better. And we only touched on, you know, two things, the the the range of the consolidation and, you know, and the and the level being broken down. But there's also there there's so much more. You know, you also have, you know, the something that you very famously talk about, the quote boringness, unquote, of the security. Like, is it something that's a really volatile security, or is it something that's not? Is it, you know, an M&A headline with a defined price, or is it some news catalyst? What if 950 in that chart is a huge daily support level? What's the market doing? There's a, I mean, there's there's there, what's the liquidity like? What's the volume like? There's there's there's just so many different nuances that you have to, you know, you you can't just say like, I'm looking for a bouncy ball pattern and draw it on a chart and say, I figured it out. Now, there's there's all these different nuances that change the expected value.

Box a level two. Sure. And so it's really important to to to to make sure that you're, you know, you're you're looking at your data to figure out what are the, what are the variables that would change us and waiting them appropriately.

Another trade that I don't think we've had an opportunity to speak about is something that I don't know if you gave it this name, or I just decided it's what it's called, what I called it, the crack trade. It's just this this idea of the gamma squeeze where eventually something is just trading on thin air. We trade equities. No, no crack. Come on, John. We're professionals. And a and a and a chart will just collapse. And one example that I know you traded very well was SMCI on March 14th of 2024. So this is just, you know, I'll let you walk through it, but this is another Lancism.

Yeah. And so sometimes I kind of talk about, not that I, I don't think I've ever done a good video or or well defined some of this, but that that will come. But the pendulum concept and and the rubber band, essentially, where sometimes these things get so, so stretched in one direction, then you're dealing with gravity just really pulling it back down. Not that it can't go further, but once that trend does change, look out below. And so SMCI was riding the AI craze. And oh my God, it blew out earnings and guidance and it starts exploding. And that feedback loop just starts to really, really send it. And through every measure, whether it's Bollinger Bands, distance to the moving average, the size of the bars, RSI, I think it had some like the highest RSI ever recorded or something like that. And no matter how you measure it, the stock was very, very overextended. And then it's a matter of how can you define what that turn looks like? And what you look for in a turn and and a change of trend or a break of trend, and then how do you play it? And so SMCI was something that went up, up, up, up, up, then it finally reached capitulator exhaustion levels after what was otherwise a pretty orderly up move.

Right. So I think I think the the thing that you just touched on is that this has a great story. Everybody will acknowledge this is a great story. Everybody is going to acknowledge that AI is going to be a huge deal and that this company is going to make a lot of money and everything is going to be great. But a situation like this never happens absent that type of catalyst. But what you also have is a situation where a stock just basically ran 700 straight points in a in a in a really short period of time that it's never done anything like before. And so a lot of that optimism is starting to get priced in. And if you have sort of a change in that trend, well, a lot of people could panic. What's what's always so funny is there's always going to be a kernel of truth. Like people will say, oh my God, but what if XYZ goes bankrupt? But oh my God, what if this really does grow by some rate? Of course, anything can happen. But it's that same euphoria where everyone takes it as assumed that creates the super euphoric up moves or the super capitulatory panics. And it's not about, could it happen? It's again, just simply, what's the probability? And what's the rate of change? Are is there an incremental buyer still willing to buy SMCI at 12200 when the stock was at 800 a week ago? Or is there somebody willing to buy a stock at or sell a stock at $4 when it was at $10 a couple days ago? And so that logic of, it's not just about the math, it's about the the rate of change. And and it's not necessarily logic, but it's a real market. There needs to be buyers and sellers. And if if every buyer that's ever going to buy had the opportunity to buy and it's gone euphoric, then then who's left? And you almost get that vacuum once that that momentum does.

You know, it's so interesting because this really isn't, sort of, this isn't like you're not deconstructing, you know, the fundamentals of this stock, or even, I mean, you're deconstructing a chart. But what you're actually getting to, like the root cause of this is really just like human emotion. It's really just human thought. It's that when everybody stops thinking about, you know, the the title wave coming behind me about, oh, the AI and this is going to go to the moon, and everybody, and it starts to roll over, and that that hint of doubt comes in, and everybody's like, well, this just ran 700. Like, what if this, what, what if 600 is the right price? Or what if 800? Most stuff is very reflective where the these are feedback loops and thoughts. Once the stock was at like 800, or or like a thousand, everybody's like, oh my God, analysts, 1400, 12200. Oh, I knew this was going to be a $1,000 stock. It's like, what, where, why didn't you tell me that at $400? Why don't you tell me that at $450? Y. It's, it's this feedback loop. But eventually, that feedback loop, it stalls. And then once things turn, it's like, oh my God, that was too capitulatory. That was too euphoric. It, it, it's, it's funny how you you even see that in the people you talk to and other traders and the analysts and and Twitter and everything.

This, by the way, as a little bit of an aside, but this was a situation where not only were you able to capture, you know, and identify a move, but because you were going to identify it that it's happening right now, you were actually able to capitalize this and leverage this in a big way by using the options market as opposed to the common stock. Y. And and one thing that's been interesting this year, I don't think obviously we saw this in in 2021 and and 2020 with with GameStop, AMC, and all sorts of different areas. But I'd say since 2021, this is the first time where in 2024, the options market is clearly just the tail wagging the dog at this point. Because we've just seen it in too many trades to be coincidental where the amount of options trading, if you look at options volume data, it is ridiculous how much volume is going through in the options market now. That never used to exist. And what's even amazing to me is how quickly I will get options, how quickly all sorts of stocks right when FFII has weekly options. What? Yeah, short-dated, zero, zero, zero dist. That to never, that would never have existed five years ago. And so I think so much with this, just total boon for options trading, obviously that's profitable for the market makers, the exchanges, it's the just everybody, so they really endorse this. But it's become that a lot of the options flow really controls the stock. And I think that leads to those feedback loops even more where you have all these market makers that are short or or whatever, and when that stock really starts to crack to delta hedge all that exposure, it, there's just no, there's no liquidity.

Yeah. And we saw with GameStop to the upside. Sure. That was actually really interesting because just as a little bit of a side, with GameStop on the first day, this is, I don't remember the exact date, but when Roaring Kitty put out that, you know, his first tweet after years of not doing anything, so much volume went off in the overnight in the in the overnight session, which is, I think like there's a handful of brokers that started offering, I think Robinhood and Interactive Brokers, totally new, like they started offering this, you know, ability to trade overnight. I'll be honest, I don't understand exactly the dynamics of how they get that all done. But what's interesting about it is that for all that volume that went off, the options market was closed. So all of that is essentially, you're not being able to hedge any of those positions with options. So it's just the common stock trading. So there's a lot of like, sort of work to be done in the morning when the stock opens. And sure enough, you saw like enormous moves.

Yeah. It's fascinating. Like, you cannot overlook the options market anymore. Yeah. So another Lanceism. This is not a Lancism. This is a timeless. Another Lancism, winning. This is this is something that's been around for a long time. But this is something that I think you've really taken to the next level in terms of identifying and taking advantage of, which is consolidation breakouts. So we spoke a little bit about just like in general, what consolidation is and what does it mean. And again, just the standard sort of disclaimer, which

Is that there's always going to be consolidation. If you type out any random chart, I guarantee you, if you type up Microsoft right now, unless something happens to be going on there, there's probably going to be like a decent period of consolidation on that daily chart somewhere.

But if you're looking at a stock that's in play and you're finding a period of consolidation, you've been able to to to to create a system where you're identifying breakouts or breakdowns in those charts. So a good example is URGN from 7/27/2023. This is just what I'm going to throw up there. Why don't you like, maybe explain a little bit about the consolidation breakout concept and maybe a little bit about this, you know, this chart in particular?

Yep, and I think the same way I talk about those that bouncy ball concept, it's it's so important to find. And really, all the trading is is a mix of all these concepts, right? Because you need to find an in-play stock that's serving as a broken slot machine and doing something just idiosyncratic from the market. And so many people ask me, "Oh, do you care what the market does?" And I say, "No, I want to be trading stuff that's not moving with the market." The market generally is too noisy. I want to be doing stuff that, like this URGN, when that breaks, that is that doesn't give two craps what the S&P 500 is doing. That thing is going to go.

And you want to find these tickers with fresh catalysts, like really big volume, big moves, big emotions. And and you get that opening leg. It's a beautiful, I don't know, $3 move from where it opens. And everything we can consolidate, the consolidation starts to get tighter and tighter. The the volume, you generally want to see the volume start to die off midday. Then as we tighten up against those highs, the volume starts to come back in. We break those highs. And so now we've got a stock that's in play, a stock that's held up pretty well, at least in in in the upper half of of its trading range, and then really, really tightened into that breakout. And then it it breaks out on enormous, enormous volume.

And so so often when people backtest stuff, they're not really being nuanced about all those things. And actually, I did a recent rant that so much of of the observations of of retail traders, they're not following so much is there breaking news on the stock or not. And those catalysts and these variables, like the volume, like the percentile of the consolidation, those are nuances that really stack your odds in your favor. And again, going back to that analogy, to succeed at this game, markets are so efficient. It's so difficult. You need so many variables all in your favor. If you're only looking at two variables and the other four are shouting "no," that's not good enough. In this game, you need everything to align. Only when everything aligns can you finally get past the the zero dollar expected value. And so you want setups like that that offer very precise entries, very controlled risk, and and just all the nuances saying this is a go.

Let's talk a little bit, you know, we talked a little bit about how, you know, your the things that you that you do and and some of your system. But let's talk about the process you use to get there. So a couple of just important ancillary things, for example, like like sleep, health, diet, exercise, things like that. But how do you prepare for the day?

I think now, now days, which was not true when we both were starting our career, is a holistic view on performance is so much more accepted. And we both work with Dr. Jonathan Katz, and he's been professing these things for decades before we were even even trading. And this was part of his whole dissertation and everything. But it's it's now accepted that, okay, like like sleep matters. At least we accept it. I'll still see people on Twitter that are like, "Oh my God, these people talking about sleep are are crazy and idiots." It's like, well, maybe you're the idiot. But it it's it's so important that if you're trying to make these decisions, you need to be performing at your best.

And I always tell the story that I started to learn about sleep and how how important it was, and it became blatantly obvious, which, as we said, all things are obvious in retrospect. But the correlation between my P&L and performance with how well rested I was, if I was sick, if I was hung over, if I was tired, and my worst days were always correlated with that. And then I started to do the math and figure out how much P&L was I giving up, not just in losses, but on green days where they should have been so much greener. And once you go down that rabbit hole, you say, "Wow, like trading is really, really hard. I need every edge, every performance edge I can get."

And so that's what led me to doing steroids. No, I'm just kidding. And so that's what led me to really focusing on sleep because sleep actually is probably the the the trader steroid, honestly. And not just traders, a lot of other people. And actually, yeah, for a lot of people. And we're making really tough, really fast, really emotional decisions, decisions that deal on risk, decisions that in influence our cortisol and our adrenaline. And when you're not well-slept, all of those factors go in the wrong direction, and we are so impaired. But the the hard part is, you don't recognize it. And I've had so many traders I've worked with say, "Oh, I feel fine. I I don't need more sleep." And it's just because you've adapted to that. And as I've worked with these traders on fixing their sleep, once they fix it, then they say, "Oh man, I can't believe I ever operated like that."

And so things that I would do. So first of all, it starts with even really before before bed. Like the next trading day starts before bed. You need your phone away. You can't be doing emails. You can't be checking the markets. You can't be doing work close to bed. You really want that pre-bed routine as clean as possible. No alcohol. You want to be eating dinner early. As far as sleeping environment, you want super dark, you want a cool bedroom, you want it quiet. And stuff like an eye mask can can can help and stuff. And you want 7 to 8 hours of sleep, which people conflate with being time in bed. No, no, no, no, no. If you're getting 8 hours in bed, you're probably more realistically doing 7 hours of sleep or 7 and a half. And once you start to optimize these things, you're going to get a better night's sleep.

Then in the morning, as hard as it is, I really try to not immediately check my phone. Sometimes it's it's urgent if you've got overnight positions or if anything, you know, is going to be happening crazy pre-market. Like we knew GameStop and AMC were going to do something dumb today. And outside of those days, you really want to protect that wakeup period. And so even on the big days, when a lot of people would be kind of in a panic rushing to work and stuff, I would I would give myself room to get to work a little bit early. But I really didn't want to change my routine, my process. I did not want to go in on the really big days and be flustered. I wanted to be cool, calm, and collected. And so I would probably get in 8:00 AM Eastern, and then I would start to read up on the news. I'd start to prepare my watch list. I'd start to do all the prep to make sure I'm informed for the market open. Make sure I'm I'm awake and ready in case there's any headlines at 8:30 or 9.

And then during the trading day, most especially at Trillium, we were hyper-focused, right? Like, I mean, there's no other firm, I think, that stays as focused during the day. And no minimal, I mean, by by trader decision and and voluntarily not really taking the lunch breaks and and eating at their desk and everything else. And then after, I think a lot, really, like I would, at least for me and in my preferences, I would relate after hours to being where the real progress was made. The morning was prepping for the day. The trading day was essentially playing the game and competing. Then after hours with studying the tape and doing the review.

So I would like to point out that the things that, you know, for for those of you who are going to watch this video and say that I'm going to implement, you know, Lance's Lance's process, it's important to know that if you can't do everything that he just said as far as sleep, that it's not the end of the world. We do what we can. As somebody who has, you know, two young kids, sleep is very important to me. But somebody always has a bad dream and you have to deal with those things, and life goes on. You do the best that you can. It's it's it's not it's not a yes or no type thing. It's not binary. It's just a question of doing the best you can. You can also measure, do a little bit better for you in your situation. And I'm still so far from perfect, right? Years of of trading and God knows what is is not done me any favors.

I do think that there's an element here of what gets measured, what is what gets improved. And if you think that, you know, you have your sleep dialed in, I would encourage you to get some sort of sleep tracker. I personally like the Oura Ring, but there's other ones out there. And, you know, really try to see like, are you getting good sleep? And how some of the things that you do, how are they affecting your sleep differently? Because the truth of the matter is, if you just take, it's it's just a really simple concept. Just think about it. In the limit, if you take two traders with the same things in front of them and their same talent, one of them has slept well and one of them's not. Who has the edge? Oh, it's it's it's so night and day.

And I would argue, even even with your situation having young kids, which is common for many traders out there, there's also some strengths to that. I would I would ask, and you don't need to disclose, but how many nights a week are you going out drinking late? Probably zero. Zero. How many nights a week are you going out and eating dinner at 9:00 PM until 11:00? Not usually. Not usually, right? And so at least as far as eating dinner and avoiding alcohol, that almost gets easier in some regards. So it's like, if that's going to be your superpower, you can say, "My family, with with with our kids, we are going to eat dinner every single day at 6:00 PM. I'm going to get my last bite by 7:00. I'm not going to have any drink past 6:30." So that can actually be like a nice little strength. So it's just doing a little bit better for you in your situation. Nobody is perfect. I work with some really good coaches, and we're all human, and and we all struggle.

So now that we've prepared for the day, we've slept well, now we're midday, we're noon o'clock. What you you do this thing called a temperature check? So run me through what that is.

Yeah, so even pre-market, based on that sleep score, just because I found it was so important. And not just the sleep score, but do I have any other distractions going on? Maybe there's some, I don't know, real estate thing, or maybe some investment thing, or maybe my apartment has a leak and there's going to be contractors calling me all day. You really want to recognize that, like, if I just got in a fight with a girlfriend, like my my head's not in in the right space. If I just got off a call with a contractor because he's locked out of the building or locked my keys somewhere, I can't trade properly. If if you have if you have a family member in in the hospital or dealing with a health issue, you're you're not trading at the same level. You're not making the same quality decisions. You don't have the same focus. And I would say that coupled with with sleep and everything else, that really needs to be incorporated.

And so I think one of the smartest, but now obvious things I did was I started to have a very dynamic risk limit. And this was self-imposed, right? My my Trillium gave me a daily stop, but then I would have something that would be so often so much tighter. And what amazes people is there would be tons of days where not only just my ability to focus, but then what's the market offering? If I'm distracted and the market is offering super crappy opportunities and it's slower, why do I even want to risk more than five grand? I could be a $3 billion trader. If it's a super slow, crappy day, why risk more money than than you should? And so that's that alone is just such a simple process and habit that people can really make a big difference on, right?

And some of the things that you mentioned, I think when you really think about it, and this this one you can't have, by the way, this is trademarked. I came up with it all. Royalties apply. But it's called Negative Edge, right? Like if you didn't sleep, or if you are distracted by contractors or a fight or whatever it might be, or a million different things on your to-do list, you're not as objective. You're not as checked in. If there's another trader who is more checked in and more objective, they have edge over you. That's that's that concept I speak of called not positive edge, right? That's the same thing. So if we could start using that, say, right? So not positive edge is a real thing. And you can, but what, but the nice thing about it is by doing some of these processes, you can identify it and you can avoid the negative consequences to P&L that are sure to follow from it. It's just such free money. Some of that stuff, like the amount of money I gave away just trading in in dumb states, to to what benefit? It's it's it's that's just such low-hanging fruit.

And and even working with so many traders, like people still don't take this the sleep stuff seriously. And some of this stuff because it's the the reality is, A, it takes conscious effort and trade-off and sacrifice to to do this stuff, and it's just not easy psychologically. But but but man, oh man, like the markets are hard, and it's way easier to really refine some of this stuff than than trying to extract more edge out of a system. Sure.

And I'm actually going to talk about another, well, you know, let's talk about it now. So the the next, another part of your process is something called the DRC, the Daily Report Card. And this is something that you're that's trademarked as well, by the way. Well, that's fine. I don't, you can you can go ahead with that one. But Negative Edge is mine. Go ahead.

What? So explain the DRC.

So the DRC is a way to avoid not positive edge. And it's really about trying to deliberately focus on one specific area. And trading encompasses so much stuff, and improving it, trading can be really overwhelming. And my first couple years, I was incredibly overwhelmed, and you don't even know where where to start. And so that's where you just pick, what is the one thing that will have the largest effect on my trading if I'm able to fix it? What is the the lowest hanging fruit? And that it doesn't even need to be trading related. It could literally be that sleep, that sleep routine, and figuring out that one thing and relentlessly focusing and building systems and processes to fix that, and judging your day and grading your day solely based on whether you achieved that goal. And you stick with it until it's habitualized, and then you pick a new one. But that forces traders to, first of all, you're defining the most important effective area for you to improve on. Then you're blocking out a lot of the noise and honing in on this one area. And then again, moving away from judging yourself by P&L and more towards the bobblehead concept. You're judging yourself for getting the red and green, but simply, did I improve in this one specific area?

Another thing that I did that I learned from that I've added to my DRC, and I think we're going to touch on this when we talk a little bit about Jonathan Katz, but I had a huge tendency to sort of trend in a very weird way. So I, and I think this is common of some segment of traders, I have at least five or six times followed my best day with my absolute worst. And a lot of that, you know, that's too big of a coincidence. It comes from the fact that I was overconfident, right? And things like that are important for me to know that if I had a particularly good day today, that now in my DRC is to keep me alert for tomorrow, to to don't, you know, just because you're had a great day today, you're not, you you didn't figure it all out, you're not, you know, some genius. You had a great day today, but tomorrow starts fresh. And that has saved me from so many losses by by just realizing that you want to know what's what's a good saying? And you probably remember Mike Deira, and he he was one of the the hedge fund managers at at Trillium who I'm still friends with. Sure. Great guy. He has the advice that he's told me before, which is every single day, you just just have, you want to handicap it as a new day. And so whatever losses or wins you might have taken the prior day, whatever preconceived notions, every single day, you're just starting fresh. And you don't want to have, "Okay, I made 20 grand in GMC, or sorry, GME, the prior day. Oh my God, that means I need to trade GME today because it's going to be good again today." No, no, no, no, no. This is a new day. Is it independently setting up to be opportunistic, or am I just playing off that bias?

And the opposite also holds true. You could have lost money in GME 20 days in a row, but that has the market doesn't know that you lost money in GME 20 days in a row. If day 21, something sets up, the fact that that ticker is G, it might as well be another ticker. It it's just about the expected value. That fun thing is, is so many people will say, "Oh, this is a bad ticker for me." There's no such thing as as a bad ticker, only bad setups. And just because a ticker, I know, man, I've had some bad tickers. But okay, well, there you go. We just found another way for for you to improve. This is this is on-air mentorship right now. But but think about what a silly bias that is. There like, come on, what did that ticker do to you? It doesn't care about you. And if that ticker sets up really, really nicely, guess what? You need to let it. You need to allow for it to be a good ticker. And that's different than if you're just making a biased decision, right? If it's a biased decision, that's a different story. But if it's objectively setting up really, really awesome and right to your playbook, say there's some amazing headline in it, or or whatever else, you're doing yourself a disservice to not not play that. And and those those small, limiting beliefs would add up so much with the average trader. Like having mentored so many people, it's just incredible the amount of people that say, "Oh, I can't do this type of trading," or "Oh, I can never be good at that," or "Oh, this isn't my ticker," "Oh, that's not my style," "Oh, whatever the excuse is," rather than just being like, "Wait a second, like this this ticker, the reason why it worked this time is because it was an objectively better setup for these variables. The reasons why I lost these three or four times is because it just it just wasn't a good setup, and the mistake was with me, and not not the ticker."

So another thing that you do is monthly reviews. By the way, I'll give you a plug. You do them. I watch them every month on Patreon. There there's it's a great, it's a great rate to review the month. You're a little behind now, I think you're like on April or something like that, but that's fine. Anyway, why, like, you know, it's pretty pretty self-explanatory, but what's the importance of going over the previous month?

So it's it's so important to just get that big picture view. And I would say the the way to really take take this quick conversation is for a lot of these processes, it's an important question to ask, "How can you make this fun?" How can you make this fun and valuable to you? And a monthly review is such an amazing opportunity to sync up with a couple trader buddies and write up your month and share with them, and then have them write up their months and and learn what they did well. And so then you can see, "Oh, wow, where we both overlapping? How can we help each other do even better in these strategies or see more of these setups?" Or then also, "What are they doing that I might not be doing?"

And the other thing that's almost almost free money, in a way, at at a firm or just if you're trading as part of a group, is if I'm doing a review with three people, and these people, we each made five mistakes, each, and I can learn from their 15 mistakes, I'm learning three times faster than I otherwise would have been. And that is just so amazing. Where if, and this is actually your pod does an amazing job with this, I I got to give you guys a lot of credit. You guys do so well where you share those 1% improvements. So there's times where if each of you come up with, I don't know, 50 1% improvements each year, when you multiply it by the whole group, that is just such a huge difference. And when when you guys each make 10 big mistakes each year, and you learn from each other, that really matters too. And so it's just a big picture way to take a step back and do the analysis because a lot of times, if you don't do that analysis, you repeat the same mistakes, and you don't, you pay the tuition, but you don't learn the lesson. For sure.

And it's also really nice to have some, like, you just, it's very hard to see everything if you're just one person. But if you're four or five, and you're kind of working together to side a to to share DRCs or to share monthly reviews or something like that, you have a lot more eyes on it. You can really see things in a way you never saw it before. Really helps. It can it can really expand sort of your perspective. Y.

Now, I know we've spoke a lot about there's no just like one harbinger that you can that you can use to sort of make a trade. But are there but are there any specific tools or indicators that you use to really help define your setups?

Yeah, I've got a trademarked indicator now. Oh, yeah. Now, so so really, I'm pretty straightforward as far as indicators go. And what everybody needs to understand is, at the end of the day, there's there's only a couple innate variables in data. There's the price, there's the time, and the volume going off at those prices and times, right? And no matter what indicator you use, it's some derivative of those three basic pieces of information. And the bigger point is, it's not that any of these are magic. Like, I think I think you need to use volume as a trader. I think you need to use price, and you need to use time. Like, yes, I use Bollinger Bands, but it's just a measure, a visual measure of overextended. You could probably use RSI, you could use different moving averages. So I don't think that there's anything that's right or wrong. It's just what's right for me. And a lot is then building up the reps to know how to interpret the different indicators, but then more so apply it to your system. So I know when a Bollinger Band is relevant to me, or when it's not. I know when a setup breaks out, I might want to see really, really good volume. So it's it's not so much about any of these things being magic, but have you put the time in to figure out how to make it your own for for the style you do?

What would you say about the importance of news sources?

Yeah, so as as we touched on, like, and even speaking for for you, Trillium, your career, and and even my career, being cued into news is just so, so, so important. And the way I think of news is, it's essentially some of the fundamental ways that stocks repic. If company A is to buy company B for $50 per share, that company is going to shoot to near $50 based on a couple variables. And if you're blind to some of that stuff, and it could be stuff like M&A, it could be earnings, it could be offerings, it could be reverse splits, could be guidance, or it could be something as dumb as the Roaring Kitty tweets.

And so the question is, like, how can you be, like, without making a a judgment on the interpretation of the news, how dumb it is, like so many people are like, "Oh my God, another meme tweet? Are we really going to do this again?" And it's like, "Well, I mean, yeah, if if you like money, you you like, whether you agree with it or not, we're not here to make judgments on what is dumb news or what's dumb meme crap or not. It's it's like ultimately, you're just trying to make the right decision." And so if I need to be cued into to what Roaring Kitty tweets, I'm going to do that. If I need to be cued in to Reddit and DFV's posts, I'm going to do that. And so it's just so important to again, find out where can I find the stuff that gives me an edge? How can I study of this? And how can I be advantaged with it?

We we've spoken a lot about psychology. I think that as much as computers and, you know, they have taken over the market and taken over everything else, I think at the end of the day, the owners of stocks are human beings, and human beings are psychological beings. So psychology really matters. We're prone to having emotions and non-objectivity. I have actually a real a quote that I really like from a top Trillium trader. I'll try to keep him anonymous, but he, you know, he once said to me, is like, "You know, give me the the give me the best, the greatest market in the world. If I'm in the wrong mindset, I'm going to find a way to screw it up." So I found that to be tremendously true. Can you talk a little bit about how important do you think psychology is as a trader? And at what stage in your development does it become, you know, sort of more important than less?

I think at the beginning, most traders truly lack edge. That's their number one issue. It's not the psychology or so much of the risk management. Not that that doesn't play a role, of course it does. But I think in those beginning stages, where psychology matters the most is in keeping the positive feedback loop. You need to be keeping your routine. You need to be motivated. You need to be just energized to study and and do the hard work. So protecting that feedback loop, I think, is number one early on as far as psychology goes. Like, as long as you're doing that, the rest will probably take care of itself.

Once you start to have edge and a system and some progress, and it's more so about, like, if, again, taking extremes, like like like we discussed earlier, at the beginner extreme, it's all about the feedback loop and and not so much about your trading because you need to still develop the system, develop edge. At a truly elite trader level, you already have your system and your edge, and it's all about execution. What impairs or what what decides how well you execute? Your psychology. And that's where I think if you've been trading 5, 8, 10, 15, 20 years, the more experienced you are, it's just, "Am I showing up and executing right?" Like, if, if some Steph Curry or LeBron, they already know the basics, it's just, are they able to execute when they're on the court? And for us, it's like, "What's getting in our way?" And that's where the psychology is so, so important to make sure that you're you have safeguards and constraints. Because it's also when it's most costly, right? If you or I go on tilt, or if we rage trade, or if we make some super boneheaded decision, that is so, so, so, so costly. And so that's where stuff like using a trading psychologist and taking that stuff more seriously starts to really become a creative. Yeah.

And I actually do, I actually do. You can tell me if you agree with this, but I do think when we started working together, for example, I do think that it, it gets exponentially more towards the psychology side as you become more and more. I agree with you on that point. But like when we started working together, you were a much more successful trader than me. You're the top trader in the firm by far. I actually don't think there was a huge gap in our knowledge of market structure or specific things. I re, I think that your psychology was far more, far better, and far more efficient than mine. I think that was probably the, you know, 90% of the difference between. I think I think you're right. And I think this is an important point to emphasize, because I think what happens at the really, really elite level, to be a good trader at Trillium, you need to have edge, right? You're you're you're a top 10 trader. To be at that level, you you are good, no question about it. And you've got your strategies, your playbook, you've been doing it for a while. So what separates say, 10 from number one? It's recognizing that edge, then being able to go really, really, really big and execute again and again and again. And especially to push the size. I think that's where psychology matters so much. And then to avoid the really big losses. Because we're all going to take our our scraps here and there. We're all going to our scrapes. We're all going to make some mistakes. And everything, you can't, we're we're just humans at the end of the day. And I think where that really big outperformance comes from is having the psychology and the foundation there so that I can go really, really big, be confident in my decision-making, and if it doesn't work out, it doesn't, it doesn't ruin me. It doesn't snowball. I think that really is that that elite performance difference. Couldn't agree with.

So let's talk about, I want to talk about a couple of specific psychological situations that I've seen develop many, many times. Some of which, by the way, are my own, and some of which are people I've seen. But very, very common situation. So the first one, let's talk about just this forward progress bias. Basically, you're prioritizing consistency over maximizing P&L. How would you like, how common is that? And what do you think about that?

Well, I think ultimately, everybody falls somewhere on the spectrum that's that's right for them. And me being more of a home run hitter, it would it would be wrong for me to say to someone like you who's very consistent and enjoys the lower variance, it would be wrong for me to tell you that you're wrong. Like, because it's it's a value decision based on you and what's going to be best for you. And there's some traders where if they get in a hole, it just ruins them, and they're they don't enjoy it, they're super unhappy, and they don't care about the extra P&L. And if that's true, like what you're doing is dead dead right.

So I think it's like, and actually, this has come up sometimes, and you've you've sought to grow and you've taken steps towards increasing your size. So often when people do that, they will try to bite off a little bit too much for their tolerance, then they take a loss or two. And rather than recognizing that the mistake was, "Oh, I just bit off a little bit more than I I should have," you then go back to right where you started and say, "Oh, man, like I I touched the stove, it was hot. I don't want to do this." And it's so much about finding like, what's the incremental improvement I can make that gets me a little bit closer to where I'm headed without doing anything that's that's too big of a shift.

Yeah, no, of course. I couldn't agree with you more that like, not everybody's goals need to be the same. Not everybody needs to, you know, seek to maximize P&L or anything like that. Just like, if your goal is to, you know, make enough money to provide for family and not take, you know, huge losses, there is absolutely nothing wrong with that. You should do that. That's great. I think the problem that I was referencing is when, like, in my case, for example, I put a huge, a huge emphasis on consistency. I definitely maximized that consistency over maximizing P&L. But I did it subconsciously. It wasn't something I wanted to do. It was something that I was predisposed to be a conservative person, which I don't think is bad or good. I just think it is. Everybody has their own tendencies. But I, but I was subconsciously doing that. So I wanted to maximize P&L, and I was subconsciously preserving consistency. That's a problem.

Yeah, and the the real question, even for me, is if I didn't have the trainer I had, would I have emphasized the home runs much like I did? I don't know, right? So much is your trader parent, per se, and and the the trading childhood you had. If you grew up under a trainer that was super, super consistent and emphasized hitting singles, which I think is super important early on in your career, that was probably advantageous to you early on, but became less adaptive later on. Whereas for me, the home run style of my trainer was probably a negative for me early on, but then became adaptive later on. It's weird how that works.

That is such a great point because for me, like one of the things that, oh wait, yeah, I now that I think about it, yeah, I know you're you're you're trainer. So yeah, a lot of that holds true. Well, one of the things that Trillium in general, and I think, and I think, well, anytime you're going to work at a firm, I think most, you know, trading firms are going to take somebody who's new to trading, and they're going to they're going to reward consistency, right? They they want you to be consistent. They're going to encourage that. They're not going to want you to be all kinds of volatile when you don't know how you're, you know, how to trade. So essentially, you get all that feedback loop of positivity from getting, you know, consistent P&L. And ironically, when you when you develop that edge, when you become a better trader, it's that same thing that you've now been conditioned to incentivize, right? To to to to prioritize that, that you really don't want to do if your goal is to maximize P&L. Like my goal right now is not to be the most consistent, to make money every single, that's not the goal. It it it it's to maximize P&L. But I I still have that sort of, it's hard to rewrite that program. And that's training psychology really matters. It's like, what got you here isn't going to get you to the next level.

Yeah, and to this day, I still experience that in in different ways, right? Like, even as I've tried to step back from trading, it's really hard to know your friends are trading, or there's big opportunities, AMC, GameStop going crazy. It's almost like Anchorman, you know, blowing the conch shell, you know, I'm like, "Oh no, Roaring Kitty tweeted, must must trade." I'm like, "No, I can't stop myself." Yeah. And those are because of past habits, really, a decade plus of habits where it's it's like, you build a skill set, but then it's like, "Oh, man, this isn't really what I'm so aligned with anymore."

Hard. It's also really hard when you get good at something. Like, for example, like you see this with the athletes all the time. If you see like, like I am a little bit of a baseball fan, so if you watch like, like a baseball player, like they could be hitting well, they could be consistent, they could be doing great, but they're making a mistake, and they could be doing better. The moment they make that switch, and like it takes time and it takes reps to get to to to really sort of master that new swing, they immediately want to go back to the old thing that was working, and they don't want to get over that hump. And that's that's the same thing that could happen in trading.

So another one is like, just a common psychological trap is recency bias. So I think I I touch on this a little bit where I I have a personal tendency to follow my best days with my worst because I get into this mindset of, "I've conquered trading, and I know it all." And I have to like, I have to really take a step back and talk myself out of it. I actually, I actually a long time ago, what I did was I plotted my daily P&L for every day that I've been trading over a lifetime to look at the curve. And then what I realized was some of these like intraday or daily or even weekly fluctuations, you couldn't even see it on the chart. And it was important for me to sort of recognize it, puts it in perspective. But I think that this really is a bias that affects more people than it should. It it affects everyone. And I think it's the thing with biases is it's so easy to intellectually recognize a bias, but that doesn't mean that it still doesn't exist. There's actually a bias that even if you're aware of a bias, it still affects you. And so it's not just about being intellectually aware of this stuff, it's then how do you build a system that protects you from the bias? And so maybe you set up some type of rule where, okay, I put up, if I make above X on a certain day, I'm going to, with with my pod, maybe rate the next trading day. And then unless it's a really, really good 8 out of 10, 9 out of 10, I'm going to size down by 50% as much. Or even if it's a good day, maybe you still size down by X amount. So it's less about the, I mean, step one is always awareness and intellectually, but then it's then building the process and then iterating over that process to make sure you're protected by it.

Sure. So here's another one, FOMO. So not that I'm the best at this, but our illustrious managing director of trading, Ben Baller, walked into the studio not five minutes before we started to casually tell me that the firm just crushed some trade while I was, you know, sitting here talking to you. Which is great. And you haven't thought of a single other thing since. I, you know, first of all, I would never say a negative thing about, you know, our head of trading, ever. But yeah, that was annoying. No, a while ago, that would have really, you know, Jonathan's really ashamed with you right now. A while ago, that would have really bothered me. It would have I'm not saying it doesn't bother me, but like, it would have really bothered me. It would have ruined the rest of my day, the fact that I that I missed out on something. But this is something that traders deal with, you know, all the time. This, you know, this fear of missing out. And it's something that it's it can not only just like destroy you on a personal level, but it also can really destroy your trading if you start trying to force trades because you're worried somebody else might do something well in it.

Yeah, and and it's it's like, it's like you have on the side. So often, like, what really is our fear of missing out, especially when you're working in in a trading pod or for a firm? So much ends up really being, "I'm not upset that I missed this trade. I'm upset that I missed this trade, but other people I know probably captured it." And if nobody, like, there was always a running joke at at Trillium, like, "I don't care if I didn't make money as long as nobody else did." Or like, "Can't, can't we just close the market so everyone can have a break?" And because it wasn't really about just our performance, we weren't judging ourselves internally on our own expectation. We were judging ourselves relative to others externally. And that's when it becomes so, so damaging. And I'd argue some of the best stuff I've done with with Jonathan Katz is building up that awareness and those systems to recognize. And so even with my own habits of trying to step away from trading, if I look at it from a P&L perspective, obviously I'm making far less money than if I was full-time trading. There's there's no doubt about that. But then what I need to do as a person is I need to focus on all the good things and all the positives, like being able to do this podcast, being able to do the Twitter content, being able to share trading knowledge with others. That's something I've gained that I otherwise wouldn't have. And so it's a lot of like exploring these emotions and recognizing that they're human, but then how can you make them from maladaptive to adaptive?

Yeah, I actually think you conflated two things that I would sort of separate out as two distinct biases. So FOMO, right, fear of missing out, is I imagine the situation where I'm looking at some trade, and I don't really love the trade, but I think that other people are going to love the trade. I think they're going to go for it, and I think they're going to make a lot of money. And as a result, I put myself in a position in a trade that I really don't like, and I end up bearing the negative consequences of a trade I either don't really understand, or what more likely than not is just not such a great trade. The comparison game is a different thing, where I think after the fact, I might have had my best day ever. I might have done the best that I, Jonathan Sheridan, could have done, but somebody else, Lance Brighten, did better. And I get down on myself, even though there's no chance I'm the kid that always set the curve, so everyone hates me, right? Even even though there's no chance that I could have done what you did because I didn't have the knowledge or the or whatever it was that you did. You did. I get down on myself. And and that, I think, first of all, it's a lot of wasted time that you could be otherwise being spent towards productive use.

Oh, it's just, and those feelings, it's just not healthy. It's not fun. Like the average trader, like how much you would you would actually probably be willing to take a slight P&L hit to never feel those feelings, just from purely just the quality of life perspective. And so one, one book that I've recommended to some some traders, and actually one of the top guys in Chicago really enjoyed this, is the book "The Gap and the Gain." And what the whole concept is, is everyone's focusing on the gap where they could have been versus their ideal, or where like, "What if? Oh, man, if I was just there, I could have done so much better than than whoever else." Rather than simply focusing on, "Man, look at where I was, and look at where I am now." And so a lot of this stuff is just how we reframe stuff in our heads. And it's not about, "Oh, man, I missed this trade." It's, "Oh, man, look at all the amazing trades I was around for this year." And, "Oh, man, I don't know if you're having a good year, but I hope you are." And, "Oh, man, like I'm so lucky to be having a good year." And what I've gained is, I'm having this super interesting, intriguing conversation with my trading.

Hero Lance, who I look up to so much, and that's what you're gaining. And it's, it's, it's that reframing of, of this stuff. We actually have in my pod, we have, we have two people who will, who will call me out right away and say, "John, you're in the gap again," or "You're in the game again." Like my buddy in Chicago has me to do exactly that. And it's good. It's good to have accountability. Like those are really good practices.

Yeah, it's important. What do you feel about overworking on the wrong things? This is something I see probably too much. I wish I recognized it more in myself when I was newer trading. But sometimes I'll see just people just doing busy work because they feel like working hard is, is the way to do it, but they're not accomplishing a damn thing. And I feel sorry for them.

Yep. And so many people obsess with the crappy, mediocre stuff. And it's like, no, you really want to spend, right? If, if between the easy money trades and the home run trades, those probably make up just so much of our P&L. Despite you and I probably take a zillion trades in between, right? Like, I'm on the average day was probably trading 10 to 15 tickers and hundreds of thousands, millions of shares. But there was probably just like one or maybe two trades a day. And rather than focusing on all that stuff, every day in my review, I need to say, "Wait, I don't need to do this stuff. What I do need to focus on is A and B." As long as I have a pristine picture of A and B, and all I focus on is in the coming days, this is what I want, not the rest. Then it's so much better than doing.

Yeah, it, it's, it's working smart. And then you can work hard if you're doing it smartly. But if you're working hard without the right things, it's, it's like we discussed earlier, it's useless.

How do you feel about trading out of a hole? This is something that anybody with, you know, a long enough career is going to have to deal with. But I've seen it. I've seen people do it successfully, and I've seen it just consume people.

Yeah, it's, it's never fun. And I think it never gets easy. But I do think the most powerful thing I did is every time you've been in a hole, you have that experience, and you've clawed out. And you know, it's, it's almost like a breakup where your first breakup is super emotional, and you act out of scarcity and fear. And "Oh my God, is, am I ever going to have another, you know, girlfriend ever again?" And once you've been through breakups, you're able to take that bigger step back and say, "Whoa, whoa, whoa, wait a second, Mr. Emotions. Like, you're not being rational." Just given the fact that I've been through this before, I know life does go on. It will be okay. I will work my way out of this. And so with the trading hole, so often it's being able to take the step back from experience and say, "Look, I've been in holes before. I'm now even more experienced. I'm more successful than I was in the past, and I've been through lless." And I know that I need to just stay to my practice. I need to learn the lesson and then focus on the bhead. And it's never easy. We're always human. But you really want to go back to just the basics, doing your daily report card, focusing on sleep, doubling down on all of your best practices that lead to your success. And then just focusing on the easy money trades, the lower variance trades that you can just hit again and again and again. But it's never fun. And no matter how good you are, even me at my prime, when I got in a hole, it was just, "Oh crap, I hope this doesn't become quicksand. I hope this doesn't snowball." And so, no, you're, you're never immune. And I think that's part of the game. And that's also part of what gives us a moe. When you're experienced, it makes, it makes the barrier of entry to be a successful, established, sustainable trader much harder. And that's, that's good for those that can overcome it. And I know one of the things that I've, that that has helped me through this is to just, I sort of think about it as, it's going to happen. It's, it's bound to happen. It's a statistical almost part of the job.

Yeah, I did recently just internalize it. It's part of the job, right? What you signed up for. When it does happen, it occurred from one of two ways. Either you made a bad trade, which you, you're, you're going to learn from, and and now your head has gone up. Or you, it was a bad beat. And he, that's like, and which was a good trade that didn't work out. So I just feel like it's always helpful, just for me to think about like this is, this is inevitable. That it's something that has to happen. It's the natural course of things.

What about tilt? How do you feel about tilt? This is more common, by the way, amongst the truly active traders. Not this isn't really going to apply to swing traders. Probably everyone to some degree, but it's, it's more sensitive, I think, when you're glued to the desk and you're getting so many reps each day. And the best thing is really Jonathan Katz's analogy on, if you're running a marathon and you're waiting to drink until you're thirsty, it's too late. The damage is already done. You're not going to magically undehydrate yourself. It's, it's too late. And so often what happens is people will have one bad trade and they'll get two out of 10 frustrated. They'll have the second bad trade, they'll get five out of 10 frustrated. Then the third, they get eight out of 10. Then they think, "Oh, maybe I should take a break." Then they do the fourth, and they're 10 out of 10 frustrated. And they say, "Their keyboard, punch, punch a hole through the monitor and kick a dog." Right? And it's like, "Oh man, I really shouldn't have, you know, done that fourth trade. I should have done something about that." And it's like, well, like by the time you're already slamming the keyboard and punching the monitor, like you can't be like, "Hey, yeah, you should probably calm down now." Like, no, you're gonna just punch that person in the face, right? That it's too late. And so with so much of that stuff, it's, it's being proactive before it happens. And recognizing like, "Okay, like maybe, maybe at a two, just being aware." Then when you're at a five, saying, "Okay, I need to go take a walk. I need to go take a break." And I'm not going to resit down until I'm in a clear state. And I find there's, there really is something magical about getting outside. First of all, getting out of your desk and away from the screens. Then getting outside. It just adds so much perspective. And you see, you, you get some fresh air. And I found it's, it's such a just reset for, for the head.

Yeah, I mean, also just one other psychological kind of trap that I really wanted to to talk about. Is I think this was a, this might have been a Kobe, like a Kobe Bryant thing that I, that I heard somewhere. But but at some point, I heard about this, this, this idea of like the mountain. And people set their goals as to like climb the mountain and see themselves at the top of the mountain. Meaning like, somebody will come at the beginning of the year and say, "You know, I'm going to, I'm going to be better than this guy in terms of trading," or "I'm going to hit some P&L target." Which, by the way, is the worst thing you could do. But but for me, it's always been like this, this recognition that the best thing that I could do is instead of thinking about these sort of macro goals, is to think about pulling the most I can about the next thing that's in front of me, just one step at a time. And marathon runners will tell you the same thing. They'll, they'll tell you like, if you start, you know, on day one thinking you have to run 26 miles, you're not going to do it. You have to think about it like, "I have to make the next 100 yards," and "the next 100 yards." And sometimes it's the next 10 feet. And, you know, but, and then eventually you run 26 miles. The way to do it. But it's, it's, it's so critical to spend the most amount of time thinking about the problem right in front of you rather than some lofty macro goal.

100% agree. And I would generally do a macro goal. Like I would do some big picture goals. I would even sometimes do P&L goals. But more, more importantly, those P&L goals or those lofty big picture goals, I would break down and figure out, "Okay, if I'm to reach these goals, where do I need to be at point A, B, and C?" Then what are the processes and steps at each current moment that I need to be taking to to get there? So yes, you want to take the big picture goals and bring it down into daily habits and process to make it make it happen.

So to expand on psychology a little bit, we've mentioned his name, Dr. Jonathan Katz, quite, you know, quite a few times. But let's just flush out a little bit who he is. So Jonathan Katz is a performance coach who's a clinical psychologist by trading. That both you and I use. And he, his practice is essentially dedicated to high performers. I think it's mostly, if not only, elite athletes and traders. Is that?

Yeah, to my knowledge. Well, I guess he couldn't really speak too much about otherwise, but I think, I think for, to my knowledge, it's mostly athletes and traders at this. So I started working with him on your recommendation. It's been an invaluable relationship with me. And like I said, I really do believe that the further you get along your career, definitely in trading, but I think this is probably true in anything where there's elite performance involved. I really do believe that a bigger and bigger percentage of the gains are going to come from the psychological shift rather than sort of the tangible changes. So I don't know, for me, he's changed the entire lens at which I look through my trading. I thought that unless you want to do this a little bit differently, I thought, you know, I would talk about, you know, I'm pretty open about some of the things that he's helped me correct. If you want, you can talk about some of the things that he's helped you correct. But I'm, you know, I'm, I'm, I'm very open about it. Like the biggest thing that I think he's helped me correct is this focus on short-term P&L. Specifically, not necessarily like the bobblehead. But, you know, I learned it from you, but sometimes you have like this tendency, like you can explain an idea, but you need somebody to really kind of get in ways, help get in, get in your head and really kind of help explain like why you're thinking about the way you're thinking. And really show you from a perspective that you hadn't thought of. He really helped me focus on, you know, my own bobblehead. And, you know, freeing me to think about sort of progress in that way has really opened me up. That over time, it's compounded into just a wave of better performance overall.

Well, yeah. And as much as I, I bust your chops, I, I do have a lot of love for you. And the progress you've made here has, has been very huge. And what I think is interesting, and I, I've touched on this before, is a psychologist has, is an explicit cost. And Katz is, you know, he's, he's, he's great. And it comes at a price. And he's expensive. And he's very good.

Yeah, exactly. And so many people see that price tag and, and they will say, "Oh my God, who, who would ever pay that?" And but to me, that's the dumbest thing in the world. Obviously, if you're a new trader, like, yeah, of course you're not going to pay that. But if you're a high performing trader, it's not about what is his cost, it's what is that impact going to be on your trading and your quality of life? And so for the couple years you've been working with him, and I've been working with you, it's, it's, it's been incredible to see on areas like FOMO and the comparison game and pushing the size. And none of that is linear. Like you took it, you took your, your punches to the chin here and there. You've had your bad moments. The amount of times where I get the, the, the John text, "Hey man, you got to talk me off off off the ledge. Like I had, I had another, you know, bad, whatever." Often. And it's, it's important to talk about that. Like, no, this, this stuff doesn't happen magically. You put in the work with Katz, you put in the work on your own. And it, it didn't happen overnight. But where you are versus a couple years ago, look, you felt some FOMO about missing this other trade. You're not perfect. We're human. You never will be perfect. And that's when you focus on that gap. But if you focus on that gain of where you were, that was just two years ago.

You know, I'll tell you some of the things that it's not, you know, I, it's not all just like talking. A lot of it is, okay, identifying what the problem is and what can I do to to to to change it. And some of it is is mindset. Some of it is just sort of internalizing that these are the things you need to work on. But there's also tangible things. And I'll give you one kind of big one that I think I don't agree with. I think I know you don't agree with it. But whatever. I took P&L off my screen altogether for a while. I took it off the screen. And then I put it back. But I put it back in such a way that I can't see my daily P&L. I can only see sort of an aggregate P&L from a long time ago. And what that helped me do, what it helped me to avoid, avoid this myopic focus on, you know, am I where am I at on the day or the week or the month? And really look at the trade right in front of me in a bigger perspective. And that was, you know, this was that was an idea that came out of the work with him. There's been other ideas like that as well. Another thing that I did, for example, is I just changed my keys to the point that basically I, I have no way to get anything but large size in certain situations. Like it's just. And it's so important because you're doing solutions that are right for you. And the other thing I love is what you recognize is sometimes you take too myopic a view of your performance. And you looking at that chart of your lifetime P&L and recognizing that overall, it's going from the bottom left to the top right. And every single bump in there, you were probably upset, "Oh my God, like I'm never going to make money again," yada yada. But you persevered. And ultimately, that trend held. And so there's this other trader I'm working with out of Texas, really talented trader, has made tens of millions of dollars in his career. And he was in a a sizable hole in 2022, the biggest of his career. And he really struggled with it until he started to frame it in the perspective of that lifetime P&L and that curve. If you looked at, and we actually joked about this, if you looked at that curve as a chart, it's a beautiful line with these little microscopic consolidations. He was in a consolidation where he was in this, you know, little, little hole working back towards all-time highs. Then he broke out of the hole. And like a beautiful chart, it's gone. And I think it's, it's just another way of just saying, "Look, I'm gonna, I'm gonna zoom out." And and it's going to go in the right. Sometimes freeing yourself in that way could just be, just be the difference.

I'll give you like another example, which was I had a, I work with in Trillium, right? So I have, you know, I'm within sort of a structure and other traders. And I had this tendency, again, subconscious, but it was never like pushed upon me by the firm or anything like that. But I would have a tendency to to to push my own risk limits and my own size sort of in relation to what the people around me at a similar level were doing. And that was a silly way to think because it's only what's right for me, right? It's not what's right for anybody else. And so some of the work that I did with cats was able to sort of say to myself like, "Okay, never mind what anybody else is doing. What is the right size? And this, what is the expected value? And what is this trade worth for me?" And that, and start, and start from there. And figure out. Funny is, you're not necessarily going to have the same expected value as other traders because you might not trade it the same way. So for them, it might justify 20,000 shares and be an A+ for them. For you, it might be a C. And that's fine. And it's, it's, I would say there's no black and white. Like because obviously there's ways to use information in situations adaptively or maladaptively. Right? Having the P&L on your screen can be adaptive if used properly or maladaptive. Looking at the actively traded with with the firmwide stats can be used adaptively to learn or maladaptively. And even like one of the big things that I attribute a lot of my success to was my trainer being such a big trader. I always had a big imagination of what's out there. And "Oh my God, like I can make, I can make 50 grand in a day or a 100 grand in a day." That was astronomical. I was making 500 bucks a week. And that gave me the imagination. And was adaptive. So it's, it's the context matters. But we can control that context. And it's important that we do so.

For sure. And, you know, another thing is, we, we mentioned this before about like how at the beginning of trading, you know, consistency is really rewarded. And you get that sort of evolutionary response to sort of, "Oh, I should be consistent." Right? Be ponan response. That's the, I would to say it's ironic, but that's not like an intuitive discovery, right? Like sometimes, like you need somebody to point that out to you and to say, "Like, this is the reason you prioritize this, and this is the reason it's not right for you now." And so I think just like a very, sort of skilled identifier of those types of causes and effect can really change around somebody's perspective when it comes to, you know, a game like this.

Yeah, 100%. And a lot of times, you need that outside perspective. And because ultimately, we are changing, our values do change, and we need to adapt with it. But sometimes it's not easy. Is there anything particular like that you are comfortable talking about that, you know, specifically he helped you sort of grow out of?

So the big surprise, I think, for most people is, I don't know if I've ever discussed trading, like actual trading details with Katz. Because I knew that. You've told me that. Yeah. Because even from when I was working with with Jonathan, my trading, like my, my, always bigger priority is, is, is health and wellness and being happy and and fulfilled. And already even back then, I was doing a lot of my nonprofit work. And so I think the more important thing was a lot of the maladaptive habits, like, like the comparison game and and FOMO and and stressing. Like, how can I focus less on that? And especially because I was starting to work more on my nonprofit, you're going to miss stuff. Even, even to this day, right? I'm probably 90% external work, 10% trading. And I'm, I will miss, you know, maybe not the big ops, but definitely the majority of, of, of little ops. And it's recognizing to be okay with that. And to recognize again, the gain rather than the gap. And to be true to my values. And one of the biggest things is just like, I've learned so much from seeing other, like, there's so many rich, successful traders that are just super depressed and unhappy. And there's, and that's true for any walk of life. And so often, you really are just seeing the highlight reel. Or you're seeing just solely what, what, what people are good at. Right? Like, "Oh, Lance is, you know, an eight out of 10 trading." But maybe I'm like a three out of 10. I mean, I'm a happy guy. I'll, you know, but like, but you don't necessarily know that, right? And like, it's, it's so easy to perceive that just because someone has success in one visible area that like, "Oh man, like they're, they're family life is good, that this is good, that they're happy, that, oh my man, everything's going great over there." Because they posted a a positive photo on Instagram or something. And so much more important to me was just like, "Look, I just want to play my own game that's true to my values and and true to what I want to achieve." And, and it's, it's that's probably the one of the biggest things. Then the other biggest thing was just how to have the difficult conversations. I think more important to me always than than trading is interpersonal relationships, like, like friends, family, partners. And it's just, can you have the important conversations? Can you have them productively? Can you be a good listener? Like, even, even your trainer, right, right? He's someone that's, that's really big on communication and improving in these areas. And, and those skill sets just help for life.

Mentorship. You have been a mentor to many within Trillium and outside of Trillium. I'm very honored to be included in that list. How do you view the impact of teaching on your own growth as a Trader, as a person? Why do you do it?

You don't need to do it.

Yep. And I think despite all the crazy conspiracies online, really. And, you know, me as, as a person. And that's what I always laugh about is obviously Katz knows all my inner deep dark secrets. And people just don't want to imagine or can't imagine that there's somebody that would do things relatively selflessly. And a lot of it is just a philosophical belief that the world operates better when people care about those external to them. And obviously, you need to take care of yourself first. If anything, Katz has helped me realize that I need to set better boundaries and take care of my needs and express those needs more than I do as generally a more people-pleaser type. But ultimately, once your needs are covered, I want to help others find happiness and fulfillment. And so there, there really isn't some crazy catch. But it's more so my philosophy that hopefully people pay it forward. And what's been so cool about doing this online platform is the reach has been far more than I ever imagined. And you get so many people. I had a text this weekend, "Hey man, I had my first six-figure month. Thank you so much." I, I have a dinner later tonight where there was, there was a trader I work with who was in a big hole for a while, and he's finally out of the hole. And he's, he gave me a call. And he's like, "Look man, I just," and this was someone I had invested time and actually even even a little bit of money in. And he gave me a call and he was like, "Dude, like you believed in me when nobody else did." And like, in, in all reality, you probably changed the course of my, my life to some degree. And so it brings me immense happiness to know that there, there are probably a lot of people out there that, in some small little way, are going to live better lives and pay it forward. And even with the nonprofit work I do, it's, it's all based on the belief that that positive change compounds and that we can make a really big difference. And if everyone did that, hey, well, guess what? You know, the world would probably be be a better place.

So in all your work and mentorship with people, what has, there has there been any like set of skills that you've identified in people that separates those who succeed from those who don't?

You know, I, I always think about this. And one thing that I found pretty shockingly hard and, and did fail at, and I think everyone kind of fails at, is when you're recruiting for Trillium or or for any trading job, it's so hard to actually predict success. Like you can find what traits are necessary, but a lot aren't. They might be necessary, but not sufficient. And so it's obvious that you need to have a passion for markets. It's obvious that you need to have some degree of intelligence, some degree of motivation. You need to understand math. Like all those are are given. But what I found so shocking is that there's so many different combinations of traits that allow one to succeed. And I know people that are super smart. I know people that are less smart. I know people that are good coders. I know good people that are good backtesters. I know good people that haven't play booked or written up a single chart in their whole career. And there's just so many ways to succeed. And people are so different. So if anything, I'm just more open over time to the fact that people from all sorts of backgrounds and skill sets can succeed at this, minus the passion and the hard work and the perseverance. And, and really just avoiding a lot of, I mean, everybody has limiting beliefs. Even, even so.

So, yeah, no, I mean, like, I agree. It's like, it's like baking or something like that. Everybody knows you need like some sugar and some of this and whatever. But in, in the right proportions, in the wrong proportions, you get garbage. But it's, it's, I do think you probably need some degree of coachability and humility and, and, and just like the willingness to iterate and go through it. Like those are things that are just universal. What's so weird though, is like, I do know traders that that are stubborn, are egotistical, are greedy, are like everything that you could think of as, "Oh no way, this person would succeed." But like, it's just, I've just found it's not as straightforward as you would imagine. But, yes, you need a lot of those, but other skills can compensate that.

What would be your top advice for someone watching this? Three different types of people. So one is somebody sitting at home trying to decide if they're going to get into trading. Another one is, you know, somebody who's already trading, looking to get good. And then the third would be a good trader, really looking to be elite.

This will sound crazy, but I think if you have any doubt in your mind whether you want to become a trader, and if you're, if you're in it for the money, or you just want to do it because it seems cool or whatever, if you're not truly passionate and gonna stick it out, just don't even bother. Like, if you're really considering, "Oh, should I or should I not?" Just don't. The job's just too hard. The failure rate's too high. You really need to be all in at this job. And the people that hear that advice and say, "Oh, screw you, Lance. Trading's the best. I'm doing this anyways." Those are the people you need. And you want to self-select for. Because if you're even remotely thinking, "Oh, I could be doing these five other jobs," or "I'm interested in these seven other things," it's just too easy to get out when, when the job inevitably gets tough. Because the learning curve is so, so long. For people that are traders and want to be good, the single best piece of advice I could give is, size up your easy money trades and find more of them. Find more of them. Expand your easy money trade repertoire from from other traders around you. Then add size. For people that want to go from good to great and elite, it would, it would really just be to prudently focus on exponential bet sizing. So that when you really get the, the aces or, or the nuts, you really, really, really go big. Because so much of elite level trading is that Pareto principle where it's going to be 10 trades a year making up 80% of your P&L.

That's some good advice. That was that's some good advice right there. That's one of those one-minute clips that'll change your life.

So I'm in the awkward position of having to say nice things about you right now. But I'm going to just do it. So we're going to have to make it through. So one of the things I, I honestly admire about you is that I feel like you live your life with remarkable perspective. I've admired this about you since, since the beginning, because it's, it's something that I've struggled with to and have to learn how to do. What I mean by that is, first of all, I think that you left your trading career at the absolute peak. And by the way, in trading, it's not like, you know, I know timing is everything in this game. Yeah, but it's not like, it's not like you're an athlete and like by the time you turn 38, 39, or 40, it's like your career is already over. Like you were at the peak and you only had like, you know, just, just, just better, better things ahead of you. And you left to basically be, I know it's not full-time, I know it's, you know, you still trade, but to essentially be a full-time philanthropist. And the thing that I think is so interesting, I think if you ask somebody early on in their career, sort of, all right, not everybody's motivated by P&L, some people could be motivated by other accomplishments, but let's just say in terms of money, just like, what's your number? What do you have to make in order to do something else? And a lot of people, "I'm going to make X, and then I'm going to go climb Everest," or "I'm going to, you know, do, I don't know, I'm going to do whatever." It's, it's so funny in the trading world because when you work for a trading firm, you start with people. Right? We've, we've all been doing our decade plus now. And every single person at age 22, 24, 26, 28, they all have their number in their head. Sure. And then some don't make it. And, and, and cut it in the job. Others hit that number. And the goal post, no one, everyone's hit the number. Nobody's ever reached the, the goal post where just keeps moving, keep moving the post. And people will never, people will truly never ever believe it. But it's psychologically, it is so, so hard to say, "I have enough." And what happens is, I know so many traders where the scarcity mindset still totally dominates them. And you need to eventually just make a conscious decision, whatever that number is. And, right, you might think, "Oh, like without judgment, some people think this number is silly, or that number is silly." Whatever that number is, you need to objectively say, "Like, what is my enough?" And will I be able to hold myself to that? And if you reach there, it's like, "Well, what's, what's your excuse?" If you, then it moves again. Well, in addition to the scarcity mindset, which is one thing, but in your case, it was it was a true opportunity cost. Like when you're leaving at the time that you did, I get it. And I understand what you wanted to do. And we're going to talk about that in a minute because I think it's incredible. And it is incredible. But the opportunity cost of your time to go and do that is enormous because of the level you've, you've established yourself at.

Yeah, I mean, it was a decision I did not take lightly, obviously. And it was some, I remember discussing it with with one of my mentors. And he pretty much heard me out. He's a good listener. And then he's like, he's like, "Lance, the amount of people on Earth that can be at the top of their craft, making what you're making, and just mic drop and walk away." It's almost nobody. Like it is, it is an absolutely crazy decision that you're making. But like, I, I hear you, and it's, it sounds, it sounds right for you. And I think a lot of that is just being very true to your values. And recog, like, like ultimately life is, is short. The, the real currency isn't money, it's time. Right? And, and God knows how much time we actually have. And based on upbringing and everything else, everyone has their own perspective of what old age is and everything, everything else. But it's like, you just don't know how much you have. And for me, it was like, as I saw my values changing, and the philanthropy stuff becoming more important, there's, there's always going to be the ability to make more money. That, that argument is always going to be there. So what are you, what are you going to do? Like, never, never walk away and, and be true to your values. And so even though I was at the peak of my craft, you, I had to make a very difficult decision, which is, "Look, this isn't where my heart is anymore. This isn't where my values lie." And those conversations, and that's also the benefit of of having a psychologist and and mentorship to to really have those discussions. And then also, if, if things don't pan out, say, just say, like, "Look, look, as a reminder, Lance, like you did this." Like, I still get FOMO when I miss big opportunities. There's been so many times I've been at a nonprofit event or I, I've missed something big. And I know everybody else around me, I get all the texts, "Oh, did you crush so and so? Oh my God, you must have made so much money. How, how many million are you up?" And I'm like, "I'm literally just like out of school right now." And again, it comes back to just really focusing on on the values and recognizing that that life is, is short. And you either got to live true to them, or like most people, just never will. They, they're always going to fall for, for just scarcity of, of, of, of money and be unable to walk away.

I think that's so true. And if the, if you keep moving the goalpost, in a way, like, you'll never be sort of satisfied with yourself. I think that there's an extremely small population on the planet that can be successful in at, in, in a business as, as competitive as trading. So hard to. And I think that somebody who could be truly elite at it is just an extraordinarily small group of people. And somebody who could be truly as elite as you can get and then walk away from it to do good things for the world and for other people is honestly one of the most impressive things that I've personally ever seen. And I think it's incredible. I think it's a credit to the world. We need more people like you. And that's about as much nice things that I can say about you without really, you know, pushing the envelope. But thank you.

And, and so one, one thing I'll say that's that's been really fulfilling to see is in, in the conversation with the CEO of Trillium when, when I was having that very, very difficult decision, because obviously, you know, my heart, my friends, everything, my whole, literally my only career, really, was was there. And Barry made the comment, "So, so you're telling me if, if you could one day reach a 100,000 people, you would you would walk away and do this?" And we both, we both laughed, right? I didn't even have a Twitter account then, right? I was, I was, I was a nobody. And like, a 100,000 was some astronomical, unfathomable amount. But I'm like, "Yeah, if, if one day I could do that, like, yeah, that would, that would be incredible to help so many people at scale." Now, fast forward two years, I guarantee you, we're going to send this interview to the moon. And a 100,000 people are hopefully going to be able to hear this story and see that. And so it's, it's one of those things where it wasn't an easy decision, but it was just recognizing that, "Hey, maybe I can just help a lot of people and, and find greater balance for myself at a job that is just notoriously brutal, especially at the level I was competing at." So I wanted to make sure we reserve some time and talk about the specific way that you're doing philanthropy. Because it's so lens, right? Like, it's anybody, you know, at your level, it's very easy to just write a check to this organization or that organization, this one that happens to have touched your life or is close to you. And that's great. But that almost wasn't enough for you to just write a check. It was the same way you look at stocks. Like, it's, you have to find edge somewhere. And you have to make sure that you're getting the most out of your money that you can. And so what you did is brilliant because you were able to create this sort of flywheel effect that not only leverages the money you're putting in, but also gets other people to to to put themselves into nonprofit work. And I'm very happy to have sponsored, you know, my own school. And I want you to talk about a little bit about the impact competition. It's, it's such an amazing program.

Yeah. And so one thing I'll add, even, even before that, is because we were talking about the moving goalpost and never having enough. Nobody will believe me when I say this, but I don't think you ever, there is no enough as long as you live in that perspective. And I think once you start giving back, and especially seeing how many people out there are less fortunate than you, and how many people, there's a lot of suffering out there. And as traders, we're often so lucky. Generally, we're in air conditioning, we're not, we're, we're in safe, we're in safe spaces. We're earning a a pretty damn good living when a lot of people don't even have the chance. Like their lives are so unfathomable to us. And only through appreciation for your current situation, that's what removes scarcity. That's what gives you a mindset of excess. So I don't, I don't do this stuff out of some like pure, like, yes, philosophically, but it, it is also that, you know, when you do these things, you appreciate your own situation and have gratitude. And it develops the opposite of scarcity. It says, "Wait, I have more than enough. I'm grateful." And it builds gratitude. And I think people just are so unbelieving that that could even be possible, that they don't even try to experience it. But like, if you get involved and make it experiential to something meaningful to you, you recognize. And that's, that's why is part of your pod, I've tried to bring a lot of you guys to some of these competitions. And so essentially, what we do is we fund universities that challenge students at each school to solve a different local social issue. So we'll have, we, we have kids and students addressing housing insecurity, or food insecurity, or this year at Villanova, we did helping young adults with disabilities transition into the workforce and into adulthood. We had you Chicago dealing with homeless business solutions. And we've tackled all these different social issues. And I've got to learn about them, which is, it's such a different worldview from our normal trading career. And then bringing some of you all to attend the competitions, it makes it fun because we get to have a good time together. We all get to learn about these issues, and we all get to give back and feel good about it.

So can you talk a little bit about the flywheel effect though? Like, so basically, you start with, so maybe I'll describe a little bit the program, you can correct me if I got it wrong. But essentially, you come up with a challenge, whatever it might be, low-income housing, which I know was the issue in Indiana, if I'm not mistaken, where you went to school. So you challenge the groups of students to essentially solve for the issue of low-income housing in Indiana. They get a small budget to basically try to figure out a way to do it. And then there's the judges vote on, and whoever wins gets a much bigger budget to go ahead and actually implement that. So that's what's so cool about this is it's not, it's not these just made-up useless hypothetical, not useless, but it's not these made-up hypothetical case competitions that never see the light of day. These solutions get judged by the actual nonprofit and different judges. And the winning solution, the winning team gets a cash prize, then they get implementation money to actually assist the nonprofit and make the winning solution a reality. So real change actually comes from these ideas. And most of these nonprofits, they're resource-strapped. They don't have the, the all the skill sets, all, all the, all the labor, all the, or the money to do this. So when you get a team of students able to help them out, and these are top caliber students, it can really make a big difference for these organizations. And then the students get this incredible experience. So the students win, the university wins, the nonprofit wins, and their constituents are also better off. So it really is this big flywheel.

That's such an important thing though, because you're getting these students at a time, at a very impressionable time in their lives, right when they're focused on their future and, you know, majors and they're internships and etc. And you're getting them to get their foot in the door in a nonprofit work, and they're getting a budget, and they get to see the results of what happens when you, you, you, you make an effort for somebody other than yourself. And that has an impact for the rest of those people's lives, right? And how many people are they going to touch? Right? And it creates that flywheel effect. And it's just, it's such an ingenious way to do it. I am very proud to be a part of it. I think it's such an amazing thing. For those people who want to learn more about it, want to get involved, want to sponsor, what, how do, how do I get more involved in it?

Sure. So for, for starters, the easiest thing anyone can do is follow us on Instagram or Twitter. The, the Twitter is just in my normal Twitter profile, and it's @ImpactorComp. The Instagram's a little bit different. But simply social media support is, is really great. Donations are really great. Or if you're connected to a university that might be interested and share the values of this type of programming and have the resources to implement it, we're always open. We've got an awesome contact page on our website. And above all else, just spreading the good word and helping promote us. And, and most importantly, for most people, the best thing you can do is just find what's experiential and important to you and just do it in some minor way because it'll, it all makes a difference.

Awesome. So we'll make sure to put up the URL and all the social media stuff on the screen. Can you tell us just, I don't know, you spent the last, I don't, I don't even know how long we're doing this, but several hours, seven days talking, you know, about Trillium and and trading and philanthropy. What's your personal plans? And your, you know, you're a young guy, you're, you've completely reinvented your career. Not as young as I once was. What are, what are your plans for the future?

So really, the big thing in the trading world is I'm working on this trading course that's going to be mostly free. And I say it as being the compendium of everything I've learned over my career. And I call it Magnum Opus. And way, not to hype it, it is, if you knew the amount of work and how all in I'm going on this thing, I do know the hype is real because there's nothing else like this. And it really is going, going to be top quality and legendary. And I hope it's going to help ideally tens of thousands of people. There will be a premium part. Then part of that's going to end up going to charity. So we're going to win both ways and help philanthropies while helping a lot of traders. And then I'd also love to just start to move on to just just new passions. I love health and wellness. It's something I'm always trying to optimize within myself. I'm always trying to learn more on it. And then ideally, a lot of more, more peace, mindfulness, balance, relationships, giving back. And just wherever, leaving capacity for wherever the win takes me.

I love it. I love you too, Lance. This has been an incredible several hours. This, just, thank you so much for doing this, for for everything you do for, for, for both the philanthropic world and for the trading world, frankly. I'm a subscriber of all your videos. I'm sure I'll be watching your Magnum Opus. Thank you for sharing your wisdom and for being a mentor to myself and to so many others. This has been great. And really appreciate it.

Thank you, John. And it's been a pleasure working with you.