For the next interview in the StockTickr Interview Series (RSS feed), I’m posting the responses from Elliot Dole. I received his responses out of the blue last week with this comment:

I put myself through this interview and it was fun. It is useful to think about a lot of these questions. I recommend it to any trader!

If you answer the interview questions and send them my way (dave at stocktickr dot com), I’ll be happy to post them if I feel they’ll be beneficial to readers.

Read on for more about how Elliot trades.

(Also check out today’s episode of WallStrip on GOOG – another great one!)

StockTickr: Tell us a little about yourself, Elliot.

Elliot: My name is Elliot and I am 28. I live in Corvallis, OR with my girlfriend. I am originally from St. Louis and I have also lived in Colorado, New Orleans and Atlanta. I have a finance degree and I also spent some time as a fundamental analyst covering energy stocks. Outside of trading I am interested in pilates and cooking.

StockTickr: How did you get started trading stocks?

Elliot: My grandfather was a stockbroker and he was a big influence. Also, I was in college during the time the nasdaq was making it’s big run in 1999 and 2000 and I really began following the market on my own then. I graduated in the spring of 2000 just in time to buy a few stocks at all time highs in my first trading account. My first job out of college I went to work as a margin clerk at a retail brokerage.

StockTickr: Most traders have a horror story about losing their shirt when they first started trading. What’s yours?

Elliot: Just one? I have many, and I am pretty sure there will be more adversity somewhere down the line in my trading career. Anything I have learned in the market I have learned the hard way. The market is one of those old schools where they still use corporal punishment. I have even been forced to repeat a year. Whether it is a big loss or a bad business relationship, there is a lot that can go wrong, and I’ve learned that it is wisest to prepare for the worst.

StockTickr: Do you trade for a living now?

Elliot: Yes.

StockTickr: What single lesson did you learn along the way that has helped you the most in your trading?

Elliot: That there is nothing to gain from giving or acting on tips and making market calls. For me it has always been costly to talk about my positions with others because they will inevitably be calling or emailing and speaking to me very emotionally when I need to be focused on making decisions. In my experience, the times when I most want to share an idea the time I need to be especially focused on planning my trade.

StockTickr: What is the most common but easily correctable fault you see in traders?

Elliot: Most traders I know tend to be impatient and can’t stand to be in cash.

StockTickr: Describe your style of trading. How long do you typically hold stocks?

Elliot: There are a few different ways I trade momentum stocks. My positions tend to be open anywhere from a few minutes to a couple of months. I prefer to limit the amount of capital I use for trading and invest separately.

StockTickr: What’s your exit strategy for winning and losing trades?

Elliot: For winning trades I will set a stop that is intended to keep me from letting a winning trade turn into a loss. I try to sell parts of positions when the stock gets very overbought according to my charts or appears to be up against resistance.

My strategy for exiting losing trades is to use support levels on the 2 year weekly chart. No hard stops.

StockTickr: What 3 books do you recommend traders read?

Reminiscences of a Stock Operator, How I Trade and Invest in Stocks and Bonds, Trading in the Zone.

  

StockTickr: Other than your own, what are your 3 favorite sites?

Elliot: Alphatrends, Stockcharts Public Lists, Between the Hedges

StockTickr: What is your typical R value per trade? i.e. what % of your portfolio do you risk with each trade?

Elliot: I sometimes risk up to 20-25% of my portfolio, and as a result drawdowns and big returns are not unusual for me. I don’t use hard stops.

StockTickr: What technical indicators could you not live without?

Elliot: Weekly candlestick charts.

StockTickr: StockTickr: How do you think the market has changed over the last several years? How have you adapted?

Elliot: It seems to me like the average wall street person is more cynical and negative on the surface about stocks and investing than in the 90s. I have had a lot more success by eliminating time spent seeking out others’ opinions and instead seeking out factual data like price and volume.

StockTickr: Do you backtest and if not, how do you instill a belief in your system?

Elliot: I don’t think backtesting hurts, but it isn’t important to me. I have a belief in my system from personal experience. Having watched and studied the market for most of my adult life makes every day of trading a little more comfortable or familiar then the day before. My style of trading provides me with plenty of chances to make money if I can control my emotions.

StockTickr: What advice can you offer traders who are just starting out?

Elliot: There are a few things. First, I’d limit the size of your trading account to money you can afford to lose. Secondly, I would make sure to take the time to formulate some sort of basic strategy or plan, and define your edge. It is not worth buying or selling stocks when you have no good reason to have confidence that you will come out ahead before long. I’d also advise someone starting out to keep an open mind and to question conventional beliefs about making money in stocks.

StockTickr: Do you view physical wellness and exercise as an important part of trading?

Elliot: Not sure. Of course on a basic level it is a prerequisite. I definitely make that choice in my life, but I don’t think it is all that relevant. I believe bad trading causes health problems. Could bad health cause trading problems? Ok, I’m pretty sure it can work that way, too.

StockTickr: What do you like best about trading?

Elliot: Limited downside, unlimited upside. The vastness of the possibilities and the opportunities for self expression.

StockTickr: Thanks, Elliot!

Elliot: Sure, Dave.

Stay tuned – there are several interviews on the way. You can subscribe to these interviews via RSS feed.

Previous interviews in the StockTickr Interview Series (RSS feed):

• Jon Tait, the Fickle Trader
• Bill Rempel
• Adam Warner
• TraderMike
• Roger Nusbaum
• Dave Johnson
• J.C., the NYSE Scalper
• Brian Shannon, AlphaTrends
• Jamie, Wall St. Warrior
• Howard Lindzon
• Kernan of TRADEthemove.com
• Richard Todd
• Trader-X
• 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!

Related posts:

1. One Question Interview with Dave Landry
2. One Question Interview with Ugly
3. One Question Interview with…You!
4. One Question Interview with Smita Sadana
5. One Question Interview with Mandeep