A couple months ago, I drove down to Atlanta to meet with Trader Mike. (A popular thing to do nowadays.) My primary motivation was to meet Mike in person and watch him trade and see if I could come up with some cool tools for short term traders for StockTickr. Little did I know that I would leave a full-fledged dummy trader.
Trader Mike’s place was nestled in a neighborhood just North of town. I arrived just after 9 and Mike greeted me at the door. If it was me, I think it would’ve cramped my style a bit for someone to barge into my trading room and peer over my shoulder. If it bothered Mike at all, it certainly didn’t show. He was about as gracious and friendly as I could imagine anyone being.
Mike was pessimistic about trading opportunities that day – there was a fed meeting the following day. But still we watched the tape and he seemed prepared to strike if opportunities presented themselves. I had read his “Tools of the Trade” post closely at least two or three times before our visit. His routine is summed up pretty well in that post. If there’s one thing I learned about Mike it’s that the guy is genuine – what you read on his site is what you get in person. He’s not “posing for the camera” on his site like I’m sure some do.
During the morning there didn’t seem to be any setups and the market seemed headed for nowhere. Then, those sounds that Mike talks about on his site started getting more and more frequent. The market was headed lower and some nice setups were there for the taking. Those alerts started sounding like a circus!
As I recall, I think he ended up taking 3 short positions that morning around 11 or so. All three trades went in his favor pretty quickly and he was up a healthy amount within twenty minutes or so. At that time, the market had been showing no follow through at all, so Mike struggled with a decision – try to ride his positions to the end of the day or take some rare profits in a hohum market. This was a side of Mike I didn’t know existed. On his site, he comes across as so methodical and rule driven – a discretionary decision like this one seemed difficult. He ended up taking the profits and we bolted for some lunch. (We ate here, by the way – good stuff!)
We talked about Dummy Trading and his shift from swing trading to day trading. I kept asking him questions about the tools he uses to trade. Were all of them necessary? Why? Couldn’t you save a little time by doing such and such?, I’d ask. I quickly learned that Mike has a very well thought out business plan and all these tools that he talks about form a trading system that suits him very well.
After lunch we returned to his place to check out how the market was doing. It turned out he had made the right decision by taking that profit before we left.
My visit was enough to convince me to look into Mike’s style of trading. For some reason I had it in my head that day trading just had to be more risky that my current (at the time) strategy of holding positions for at least a few days. Something clicked for me that day – it seemed to be that day trading could actually be less risky than holding positions overnight and might suit my personality to a T.
I spent a month or so researching and planning a dummy trading strategy that might fit. I paper traded for a few days and then took the plunge with real money. I’ve been dummy trading for a month or so and I’ve felt very comfortable with this system. I’ll post more about my trading later, but I just wanted to use this post to say thanks again to Trader Mike! (I’m kidding about the title of this post, of course, but I do owe Mike a great deal!)
We also tentatively set up a full interview, so keep your eyes peeled for that.