For the next interview in the StockTickr Interview Series (RSS feed), I spoke with Jamie from Wall St. Warrior. He posts quite frequently showing examples of his trades and gives some analysis of the overall market. He’s also not scared to put his neck on the line by posting a daily watchlist. Jamie’s also not afraid to go long for some profit and then immediately reverse and go short for some more.
Read on for more about how Jamie got started trading, his favorite technical indicator, and what you should do when you first start out trading. If you have questions for Jamie, leave them in the comments and hopefully he’ll answer.
StockTickr: Tell us a little about yourself, Jamie.
Jamie: My name is Jamie. I live in Montreal, Quebec and I’ve been trading since late 2001 (post 9/11). I’m still in the process of building capital for my eventual move to full time day-trading. Even so, three of the last five years have been entirely focused on trading, including a brief stretch as a proprietary day trader. I am a CMA (Certified Management Accountant) by profession. Prior to getting the trading bug, I was a suit in a large corporation.
StockTickr: How did you get started trading stocks?
Jamie: My brother bought me a couple of trading books shortly after I took the plunge from mutual funds to equities. After reading Stan Weinstein’s Secrets for Profiting in Bull and Bear Markets and Trading in the Zone by Mark Douglas, I was hungry for more. A few more books down the road and I found myself swing trading two or three positions a week and chart watching in between meetings and deadlines.
StockTickr: Most traders have a horror story about losing their shirt when they first started trading. What’s yours?
Jamie: I let a failed day trade setup turn into a swing trade and as luck would have it, Celestica (CLS) pre-announced that they would come in at the low end of guidance the following morning. The stock gapped down about four points. I took my exit on the first bounce but the loss was a devastating blow.
StockTickr: Do you trade for a living now?
Jamie: No, I’ve never withdrawn any money from my trading account. I’m still building capital. I’m self-employed and still do contract work on and off to pay the bills. Ideally, I would like to work from May through October and trade in the peak months from November to April until I reach my capitalization objective.
StockTickr: What single lesson did you learn along the way that has helped you the most in your trading?
Jamie: Discipline. I used to trade anything that moved. Now I am very selective in my trade setups and I’ve narrowed my stock universe to higher priced, high volume names favored by institutional investors. I analyze and monitor the market as closely as my individual trades and I adjust my trade setups to suit current market conditions.
StockTickr: Describe your style of trading. How long do you typically hold stocks? What’s your exit strategy for winning and losing trades?
Jamie: Day trading mainly breakouts and price pivots – I like to trade the open and I typically lock in 50% profit during the first reversal around 10:00. I take the rest of my profit when my target is reached or at the end of the session, whichever comes first. I’ll exit on a false breakout right away because failures can be brutal. The market usually maintains the same direction for the first half hour of trade from 9:30 to 10:00 with a slight pause between 9:40 and 9:45. If that pause turns into a reversal, I’m out. Intraday, I look for changes in volatility as potential entry points. I usually exit a position on a lower high or a close below the MA. I look for low risk entry points and set strategic stops. I use multiple timeframes 5 and 15 minutes.
StockTickr: What 3 books do you recommend traders read?
The three books I would recommend to new traders are:
- Technical Analysis of Stock Trends by Edwards and Magee
- Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications by John J. Murphy
- Japanese Candlestick Charting by Steve Nison
A good knowledge of the basic candlestick continuation and reversal patterns is a must for successful day trading. This combined with support and resistance, trendlines, and moving averages is the minimum requirement before risking any capital.
StockTickr: Other than your own, what are your 3 favorite blogs?
Jamie: Trader Mike, MaoXian, and Trader X. These three blogs offer the most comprehensive information for new traders. At one point in my trading development, I felt that I was digressing and I needed some support. When I discovered these blogs I spent many nights and weekends going over their archives and reviewing their trade setups and chart postings. I was inspired to incorporate many of their entry and exit techniques into my own trading and it has made a big difference in my win/loss ratio.
There are a great number of new blogs that I’ve recently discovered through various sources including StockTickr. If I may, I’d like to briefly mention two additional blogs that I’ve added to my nightly blog reading:
Firstly, Downtowntrader who is a very detailed chartist and inter-market watcher, and most recently Alpha Trends. I like Brian’s concise review of the markets as well as his analysis of multiple trimeframes.
StockTickr: What is your typical R value per trade? i.e. what % of your portfolio do you risk with each trade?
Jamie: It depends on the market conditions. I’m more comfortable trading long than short. So my risk exposure narrows as we move from a bullish trend into a trading range or bear market. But typically on a long position, my risk exposure is around 1%.
StockTickr: What technical indicators could you not live without?
Jamie: I like the ADX indicator because I like momentum plays. The ADX is a little harder to understand than most oscillators but it’s very useful in finding and managing momentum stocks.
StockTickr: How do you think the market has changed over the last several years? How have you adapted?
Jamie: I’ve only been trading since late 2001 so for me the changes are minimal. My awareness of key market drivers is much more acute, therefore, I’ve become more adaptable to changing market trends and various trading conditions over time.
StockTickr: Do you backtest and if not, how do you instill a belief in the system you’re trading?
Jamie: I don’t backtest in a systematic way. I look at each trade setup individually. System trading requires a trade on every signal and ignores market conditions. My backtesting involves reviewing my own trades and assessing why some trades worked better than others and making changes as required.
StockTickr: What advice can you offer traders who are just starting out?
Jamie: Get some basic knowledge and then review as many charts as possible. Identify the main criteria for each setup you want to trade and start out by trading a small share size. When you master the setup, start increasing your share size. Capital Management is extremely important especially for new traders. Trading is difficult and it takes years to master. It’s hard work and like everything else in life, the more you put into it, the more you’ll get out of it. So plan the trade and trade the plan. That’s what works for me.
StockTickr: What do you like best about trading?
Jamie: The challenge and the reward.
StockTickr: Thanks, Jamie!
Jamie: Sure, Dave.
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Stay tuned – there are several interviews on the way. You can subscribe to these interviews via RSS feed.
- Howard Lindzon
- Kernan of TRADEthemove.com
- Richard Todd
- Andy Swan
- Steve Nison of Candlestick Charts
- Dan Mirkin from Trade-Ideas
- Bruce Brotnov
- Eric Cahoon
- Ugly from Uglychart.com
- Alan Farley
- Declan Fallon
- Smita Sadana
- Bill Cara
- Van K. Tharp – Free autographed copies of Van’s book still available! Get yours now!
- Brett Steenbarger
- Eyal Maoz
- Gary B. Smith, the Chartman
- Nusair Bawla (alibawla on StockTickr)
- Dave Landry, Swing Trader
- Jeff White, the Stock Bandit
Do you have suggestions for other traders you’d like to see an interview with? Let us know!