Tom often posts charts of unusual setups such as these gap reversal plays he made.
Read on for more about who Tom actually is, how he got started trading, how he decides which charts to post, and how he answers to nobody (except his wife). 😉 Also, post questions to Tom in the comments of this post and I’ll see if he can answer them. I was pleased to see the useful discussion in the comments of the last interview with Jason of Mercado de Estocástica.
StockTickr: Tell us a little about yourself, Tom.
Tom C.: I have lived in and around Houston all of my life. Before trading, I was the VP of IS at a Fortune 500 company.
StockTickr: How did you get started trading stocks?
Tom C.: I have traded stocks for almost 20 years. I started out as a swing trader so I could manage my positions as I worked a real job. Once I built up some capital and decided to trade full-time, I morphed into a daytrader (well, 85% daytrader – 15% swing trader).
StockTickr: Most traders have a horror story about losing their shirt when they first started trading. What’s yours?
Tom C.: Not necessarily when I first started, but I bought alot of “dot coms” around 2000 (mostly tech companies I did business with). All but a few ended up costing me money. I was sold on the technology, but that does not always mean it is a good stock to own. I learned my lesson and now focus on the technical side when I trade.
StockTickr: Do you trade for a living now?
Tom C.: Yes, for several years.
StockTickr: What single lesson did you learn along the way that has helped you the most in your trading?
Tom C.: It would have to be what I noted above – that technical analysis is what to focus on as opposed to the fundamental side.
StockTickr: Describe your style of trading. How long do you typically hold stocks?
Tom C.: 75% of what I do is the same as Trader-X, though he says I take more risk. 25% is a blend of other things I have learned. But all is based on technicals and candlestick charts.
StockTickr: What’s your exit strategy for winning and losing trades?
Tom C.: I always have a target where I take partial profits, and may elect to trail a stop if I stay in a portion of the position after that. I always have a stop when I enter a trade, and take that stop when it is hit. No second guessing.
StockTickr: What 3 books do you recommend traders read?
- The material from Tradethemove.com (I think you interviewed Kernan in the past)
- Alan Farley’s Master Swing Trader
- Stan Weinstein’s Secrets For Profiting in Bull and Bear Markets
StockTickr: Other than your own, what are your 3 favorite blogs?
Tom C.: Of course, Trader-X! As you know I am a contributor and submit trades several times a week. I also like Wall St. Warrior, Tale of the Tape, Mercado de Estocastica and the others on Trader-X‘s blogroll.
StockTickr: What is your typical R value per trade? i.e. what % of your portfolio do you risk with each trade?
Tom C.: I don’t risk a % of my portfolio when daytrading. I have a set amount I am willing to lose on each trade, and adjust my position size based on that amount and the distance between my entry and my stop.
StockTickr: What technical indicators could you not live without?
Tom C.: Fibonacci, candlestick charts, probably the 5 period MA.
StockTickr: I believe trader-x said he doesn’t look much at what the markets are doing, or even the history of the stocks themselves. Do you make adjustments to your methodology based on the overall tone of the markets? Do you look at the longer-scale movement of stocks before you enter?
Tom C.: I do not look at the markets or overall tone before entering a trade. I think the overall health of the market that day will dictate the number of short and long opportunities I see (for example, a really strong market will probably provide more long opportunities that day) – but in general, I don’t pay attention to what the market is doing.
And, I do not look at longer-term price action – I only look at the current and previous day’s price action. While I am sure that the longer-term action could yield more clues, I have found that the benefit is not worth the extra effort.
StockTickr: Do you post all of your trades, or just a subset? If a subset, then how do you pick which trades to post, and why?
Tom C.: I only post a few trades a week. I try to pick out trades I think will benefit others, something “out of the box” that they may not see every day. But I also think X does a good job of repetition – showing the same set-up being successful day after day. As he said in a past post, if you pick just one set-up with high-probability and focus on it, you can be very successful.
I don’t see the need to post all of my trades (plus I am just a contributor to the blog), and I don’t see the need for X to post all of his trades. First, it takes a lot of time to do that and maintain the blog. Second, he is not selling anything so there is no need to account for every trade he makes. Third and most important, the site is there so others can learn. It makes sense to talk about the charts that will provide the most value and best learning experience, and spend time detailing the analysis that goes with those charts.
StockTickr: How do you think the market has changed over the last several years? How have you adapted?
Tom C.: I don’t think it is any different. Everyday there are opportunities, and if you learn how to trade properly you can find candidates in any market on any day.
StockTickr: Do you backtest?
Tom C.: No.
StockTickr: What advice can you offer traders who are just starting out?
Tom C.: Take it slow. Papertrade. Take advantage of resources out there like Trader-X and other blogs. And don’t expect to be profitable from day 1 – it takes time, effort, and lots of study. But it can be done.
StockTickr: What do you like best about trading?
Tom C.: Not having to answer to a boss! Except my wife.
StockTickr: Have you thought about starting your own site?
Tom C.: I contribute to Trader-X and don’t have any plans for my own blog. It is actually hard work, and I don’t want the full-time commitment!
StockTickr: Thanks, Tom!
Tom C.: Sure, Dave.
Stay tuned – there are several interviews on the way. You can subscribe to these interviews via RSS feed.
- Michelle B.
- Elliot Dole
- Jon Tait, the Fickle Trader
- Bill Rempel
- Adam Warner
- Roger Nusbaum
- Dave Johnson
- J.C., the NYSE Scalper
- Brian Shannon, AlphaTrends
- Jamie, Wall St. Warrior
- 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!