You can tell Joey puts a lot of work into his site. He is always posting lots of charts for stocks in interesting situations. Joey has done quite well in the markets as well – take a look at his November review from last year. Joey’s also a StockTickr Pro user and has made a ton of great suggestions for the service that we’ve quickly implemented. (Thanks, Joey!)
Joey gives a lot of good information in this interview. I also like that he’s recommended a couple new books that I hadn’t heard of. He’s agreed to answer questions in the comments – so ask away!
StockTickr: Tell us a little about yourself, Joey.
Joey: I’m 32 years old and was born and raised in Miami, FL. where I still live. I have a beautiful wife and two wonderful girls aged 5 and 1. While I don’t trade for a living, I consider it a full time endeavor. My day job is as a Network Architect for one of the few public companies in South Florida. I’m a family man first and foremost, and also love golf, basketball, fishing and photography / digital art. I also love Poker and play in a small stakes game weekly. I primarily swing trade in the 2 – 5 day target timeframe. I daytrade from time to time, usually when I know I can trade uninterrupted for a few hours.
StockTickr: How did you get started trading stocks?
Joey: I’ve been interested in stocks since I was a teenager, but I was mostly taught buy and hold Buffett and Lynch style investing like the majority of people. I dabbled here and there based on my flawed views of fundamentals and stuck with IT related companies since that is where my expertise was. It wasn’t until a few years ago that a friend introduced me to a swing trading book based on technical analysis. I was instantly drawn in and jumped in head first.
StockTickr: Most traders have a horror story about losing their shirt when they first started trading. What’s yours?
Joey: I do have a horror story and it taught me a lot about how most traders go broke. Like I mentioned, I jumped in head first – and the worst thing happened to me right away. I actually made money on my first few trades. I thought I had everything figured out after reading a few books and winning on my first few trades. I even cut my losses short on my losers. Well, I got cocky and started increasing my lot sizes and pulling stops while suffering wild swings in my portfolio. I took a huge position in a biotech stock and it gapped down on me the following day on some negative news. It gapped under my stop so I pulled it and waited for it to settle down. I tried to buy more and sell on the bounce, but it was useless. It kept dropping and I received an actual phone call from my broker for the first and last time, telling me they would liquidate my positions in an hour. I think I lost over 60% of my account in about an hour. I was absolutely stunned.
StockTickr: Do you trade for a living now?
Joey: No, not yet. I am pretty lucky in that I have a good paying career in a company that allows me the freedom to oversee my trades as long as I accomplish what needs to be done. I can basically trade without dependency on the money at this point, so it would be foolish of me to lose my benefits and salary as long at it doesn’t impact my performance. However, it is very difficult to focus so much energy on trading and have a full time career that is demanding at the same time, so I do plan on making the move to trading for a living at some point.
StockTickr: What single lesson did you learn along the way that has helped you the most in your trading?
Joey: The biggest lesson I learned is that the true secret or “holy grail” in trading has nothing to do with how you pick your stocks. It is not an indicator or trading system. It is how you manage your risk and your portfolio. The true secret is finding a way to cut YOUR losses quickly and let your winners run. I emphasize YOUR because there are as many ways to manage risk as there are ways to trade. In the end, each individual trader needs to pick a style that they can stick to. Another often overlooked piece to managing risk is that your profit taking style and hard stop style need to compliment each other. It is useless to try and wait for a multi wave move for taking profits, if you are going to be aggressive with your trailing stop. You will get stopped out practically every time. Figure out what type of move you are trying to capture and manage around that.
StockTickr: Describe your style of trading. How long do you typically hold stocks?
Joey: My main style of trading is swing trading for a single wave / leg up or down. This keeps most of my trades in the 2-5 day timeframe. I will try and squeeze more out of my trades or less depending on the overall market. More specifically, my bread and butter play is called the breakout pullback. I look for a stock that has broken out and I look to buy the pullback to support. I tried breakout trading for a while and realized that almost all breakouts come back to test support before continuing the move. The safer entry is to wait for the pullback to either a 20sma or lower bollinger band. I have a couple daytrading strategies as well, but it is almost impossible to daytrade while having a full time job that takes you away from your desk at random times.
StockTickr: What’s your exit strategy for winning and losing trades?
Joey: I have different strategies depending on the type of trade I make, but I would say that I tend to buy at support and scale out into resistance. If I am buying the lower bollinger band, then I will typically sell some at the mid band and trail a stop in case it makes a trip to the upper band. For moves out of a pattern such as a triangle I try to take profits at the previous pivot high or upper band. I always set a stop immediately after entering a trade as my hard stop. This is where I say the trade is not doing what I expected and that it’s best to get out and re-evaluate. I will move it up after a trade makes a solid candle in my favor.
StockTickr: How do you use StockTickr?
Joey: I use StockTickr mainly for the journal function in the Pro version. I was attracted to StockTickr because it let’s me tag my trades and track expectancy statistics. I have been in the final stages of crafting my trading methodology for quite some time, and StockTickr has been indispensable in tracking what works and what doesn’t. All the new features you guys are adding have been awesome by the way.
StockTickr: What broker do you use and why? (We use Cybertrader and love them, by the way.)
Joey: I made the switch to Cybertrader about a year and a half ago. I was looking for a direct access platform with per share pricing. The per share pricing has a huge impact in how you trade as you don’t worry about commissions when you are scaling out. I don’t worry about selling 200 shares here and there cause it only costs 1.20 vs 7-12 bucks with the other brokers. I also like a few things Cybertrader offers such as server side alerts and a mobile platform. Server side alerts means that you can set an alert to perform an action and it will be stored on their server in case your system is offline or if you are away.
StockTickr: What are your other “Tools of the Trade”?
Joey: I recently started using Telechart as my chart review program. While I prefer the look of my charts on stockcharts.com, which I still use for posting to my blog, I really enjoy the speed in which I can go through charts on TC. I am still learning the more advanced features but I can tell that there are few limits to finding, sorting, and tracking stocks.
I use Trade-Ideas as my real time scanner, and it is awesome. I mainly use it when I am daytrading, which unfortunately hasn’t been that frequently lately. It is also very good for end of day scanning.
As, I mentioned before, I use stockcharts.com. I used to use them for chart reviewing, but it was too tedious going through as many charts as I review. I still prefer annotating and plotting indicators on stockcharts though, so I have kept paying for it. I also use stockcharts.com for constructing ratio charts and indice comparisons.
I use CyberTrader Pro as my trading platform and for all of my intraday charting. I have been considering using ESignal for a year now, but most of my intraday charting is pretty basic and Cybertrader is good enough at it.
StockTickr: What 3 books do you recommend traders read?
Joey: I want to try and stay away from mentioning the obvious books that should be in every traders library such as the Market Wizards series or Reminiscences, so I will touch on three, that address specific items.
- Intermarket Analysis: Profiting from Global Market Relationships – John Murphy: This is a great book for understanding how Global Markets are interrelated, and how money usually flows from one market to another. One of the best concepts to take out of this book is how to chart relative strength amongst related markets.
- Tools and Tactics for the Master DayTrader: Battle-Tested Techniques for Day, Swing, and Position Traders – Oliver Velez and Greg Capra : This is one of the first books I read on trading and has plenty of material for beginners and more advanced traders. While I don’t care for Pristine’s proprietary naming schemes, they have some great tactics.
- Japanese Candlestick Charting – Steve Nison – Although this one is frequently mentioned, I can’t underscore how important candlestick analysis is to the way I trade. This is the best book by far on Candlestick charting.
StockTickr: Other than your own, what are your 3 favorite sites?
Joey: First I’d like to mention that it’s amazing how many generous bloggers are out there. There is this belief that most people on the Internet only have self serving interests, and while I don’t doubt they exist, I have found this to be rare amongst the Trading blog community. You have some people like Dr. Brett Steenbarger and Mike Seneadza who are willing to share specific ideas and thoughts from vast experience. You also have people like Trader X and Declan Fallond who donate or support other causes through their blogs. I wish I could mention all the great people I have had the pleasure of dealing with and I think most traders should spend some time clicking through the blogrolls on my site or some of the other sites mentioned below. I don’t think most readers realize how time consuming blogging can be and how much work goes into keeping a blog current.
- TraderMike – I’ll start with Mike, who is already one of the better known Trading bloggers. Mike has a wealth of information on his blog and while we have different trading styles, I have learned a lot by comparing how he prepares and trades.
- Trader Feed – I am constantly amazed at how Dr. Brett Steenbarger continues to pump out quality work day after day. He has some very insightful posts that are usually geared towards providing an edge.
- Wall Street Warrior – Jamie started blogging around the same time I did and he is one of the best I’ve seen out in blogland when it comes to managing a trade. I’ve been in some of the same trades as him and it’s amazing how he handles some of the tougher ones.
StockTickr: What is your typical R value per trade? i.e. what % of your portfolio do you risk with each trade?
Joey: I use a variable R of .5 to 1% of my portfolio. Currently, my average R is about .75% of my portfolio. I try to increase my R value when the markets are trending and decrease it when they are in a range. I am currently trying to figure out what a good Max drawdown number is for my trading style. This is a number where I need to shut down my trading for a week if I reach a certain drawdown. For instance, if I lose 5% of my portfolio in a week, do I stop trading or reduce my R size? Should I stop trading for a week, or for just a few days? Every trader should have a point where they need to stop and regroup before letting a snowball turn into an avalanche.
StockTickr: What technical indicators could you not live without?
Joey: While I have a decent stable of indicators I look at, the only thing I could really be without is Price depicted in candles, coupled with volume. All other indicators are derived from price anyways. My standard chart includes Bollinger Bands, a 9ema and 20sma, MACD, and Slow Stochastics. I did a post on how I use my charts recently that goes into more detail. I will add that I use indicators only to screen my trades, I never trade off them. I combine my indicators to find a trade and wait for a candle pattern to give me my confirmation.
StockTickr: How do you think the market has changed over the last several years? How have you adapted?
Joey: I haven’t been trading several years so I can’t say I’ve had to adapt to any changes, but I would say that the extremely low levels of volatility has been a big change for daytraders. At some point, maybe real soon, volatility will expand back to historical norms and maybe I’ll have to adjust.
StockTickr: Do you backtest and if not, how do you instill belief in your system?
Joey: I would say I sort of backtest. I go back and review trades I made and test how things would of been different depending on what profit taking system I used, or what indicators I used to screen the trade. I also go back through charts of other stocks and see where I would of taken a trade based on my systems and test how they would of performed. I do all this manually and there is some discretion to it, so I can’t say it is backtesting in a conventional sense.
StockTickr: What advice can you offer traders who are just starting out?
Joey: The most important thing a beginning trader needs to accomplish, is to decide what they are going to do. It sounds simple, but new traders tend to jump around from breakouts to bottom fishing, selling some early while holding on to others. There is no clear strategy they are following. You need to have some sort of plan of attack that takes you through the process of figuring out what you will trade, where you will get out if you’re wrong, and where you will take profits systematically. Not only do you need to figure out these three items, but they need to compliment each other.
StockTickr: What do you like best about trading?
Joey: Freedom. Trading offers true freedom for those who can master it, and while it is not easy or common, anyone has a chance to succeed, if they can be honest with themselves.
StockTickr: When did you start your blog and what prompted you to do so?
Joey: I originally started the blog in order to share my charts with my trading buddies. It was easier to post my charts and some comments then to cut and paste them into an email. It evolved into a lot more as other bloggers started linking to me. I owe TraderMike a lot of gratitude as he was one of the first to link to me. While I put a lot of work into it, I am still surprised sometimes when I have four or five hundred readers in a day. While this is nothing compared to some of the big boys, it is still pretty cool that so many people took time out of their day to check out what you are writing. I truly appreciate my readers and I think it reflects in how hard I work at keeping the blog updated.
StockTickr: Thanks, Joey!
Joey: Thanks for the opportunity to share my thoughts, Dave.
Stay tuned – there are several interviews on the way. You can subscribe to these interviews via RSS feed.
- Brian Schumacher
- Doug Hischhorn
- High Patterns Chart Group
- Zoomie, retired fighter pilot
- Trader Gav
- Will Fisher
- Tom C.
- Michelle B.
- Elliot Dole
- Jon Tait, the Fickle Trader
- Bill Rempel
- 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, 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!