Tim Bourquin is a masterful interviewer as always. Nice interview, Joey!

Related posts:

1. Joey Fundora’s (DowntownTrader) Investopedia Article
2. TraderInterviews Talks with Joey Fundora
3. TraderInterviews Talks with TraderMike

Read on for a great interview and learn more about how Scott trades, the types of setups he’s looking for, and how he got started trading.

StockTickr: Tell us a little about yourself, Scott.

Scott: I grew up in rural Virginia and now live in Cary, North Carolina with my wife and four daughters. I attended the United States Military Academy, most commonly known as West Point. After graduating in 1987, I served as an Aviation officer and helicopter pilot. Serving in Operation Desert Storm was enough for me to realize that I loved the Army and flying, but not enough to make it career. So, I left in pursuit of a more family-friendly lifestyle.

My first job was selling laboratory products and chemicals to scientists. It didn’t take long to realize that they weren’t interested in hearing my “war stories”; they just wanted to find and buy what they needed as quickly and efficiently as possible. So, in 1995, I co-founded a company called SciQuest.com and launched one of the Internet’s first business-to-business web applications. In a nutshell, we created an Amazon.com shopping experience with about 2 million laboratory products and chemicals for scientists that integrated with an organization’s procurement systems.

StockTickr: How did you get started trading?

Scott: I had the privilege and good fortune of taking SciQuest public on the NASDAQ exchange in 1999. It was during these crazy times while interacting with analysts and institutional fund managers that I gained a unique, front row seat of how the markets worked. However, it was the extraordinary moves in our stock price, in both directions, that sealed my interest in technical, short term investing.

After stepping down as CEO of my prior company in 2001, I started looking at a variety of different entrepreneurial ventures for my next career. In fact, over the course of a 6 month period I conducted a very extensive personal analysis comparing my financial goals, skills and resources with the needs and opportunities of a variety of different business opportunities.

After failing to find a match that motivated me, it struck me to consider trading for a living as business venture. The thoughts of no employees, no travel, maximum time with my family, minimal investment, and unlimited financial potential were attractive to say the least. But I also knew that my genuine, life-long interest in the markets combined with a mathematically and risk oriented personality would likely serve as a great foundation for this career change.

When this light bulb went off in my head, I committed 110% to becoming successful as a full time trader. The only concern I ever really had was how long it would take me to achieve consistent profits and how long my wife would continue to support me and my new passion. Thankfully, she was patient.

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

Scott: I had surprisingly good success at first and even made a profit trading my first year. But then I increased my trading size and soon my average size winner was dwarfed by my average size loss. Every time I had a winner, I found an excuse to take profits prior to my originally planned target. I gave back all of my first year profits (plus a little more) in the 1st quarter of my 2nd year.

It was a brutally tough and humbling experience for me, but I learned a lot and was fortunate not to lose more. It was also a great catalyst that forced me to evaluate my strengths and weaknesses, as well as my financial and lifestyle goals. This self-evaluation resulting in me focusing all of my efforts and energy on the opening gap – a setup that generates plenty of profit potential, minimizes discretionary decision-making, and is easily back-tested.

StockTickr: Do you trade for a living now?

Scott: Yes, I trade for a living, mostly focused on the opening gap. I also run an educational site (www.masterthegap.com) that I started in 2007 where I share my research and help traders profitably trade the opening gap.

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

Scott: The biggest lesson for me was realizing that I did not need to change “me” to be a successful trader. I simply needed to find the setup, timeframe and approach that best suited for my personality, and strengths and weaknesses. Too many new traders have it backwards; they get drawn to the promise of profits and try to adapt their personality to trade that technique profitably. Speaking from experience, that normally only results in extreme frustration and confusion and ultimately, losses.

StockTickr: Describe your style of trading.

Scott: I focus my personal trading primarily on fading the opening gap in the US futures indices (i.e. S&P 500, Dow, Nasdaq 100, and Russell). At the heart of my gap strategy are “zones.” I use these to segment and organize the various gap setups into groups that may exhibit similar trading patterns. I use the prior day Open, High, Low, and Close and prior day direction (up or down), in conjunction with market trend, seasonality and daily price patterns to determine whether to fade the opening gap or not.

Though my signals are a based upon a strategy system that I’ve created in TradeStation, I manually execute the orders. On average I trade the gap about 2 times a week. I dabble with day trades during the opening hour and the close on occasion, but my real edge and “bread and butter” comes from trading the gap.

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

Scott: I generally target gap fill or beyond and use a stop equal to roughly 30% of the 5 day ATR (Average True Range). Since all of my plans have a pre-defined profit expectancy, I simply let the historical probabilities work and I am either stopped out or have a nice winner.

StockTickr: What 3 books do you recommend traders read? Other than your own, what are your 3 favorite blogs?

I recommend Mark Douglas’ books (The Disciplined Trader or Trading in the Zone), Trade Your Way to Finanicial Freedom by Van Tharp, and Market Wizards by Jack Schwager. To be honest though, I have read nearly a hundred different books on trading and have learned something from each of them, but the most important ones are about the psychology of trading.

My favorite blog is TraderFeed by Brett Steenbarger. It’s the only one that I read routinely.

StockTickr: Do you think one day computers will make better traders than humans and has that day come already?

For the average person and trader that day is already here. Most folks will not be able to tackle the psychology and complexity of discretionary trading and are better off following a system with rules. I am one of those people.

StockTickr: What technical indicators could you not live without?

Scott: A Japanese candlestick is the only one. Other than that, I prefer price action and patterns. Most indicators are grossly over-rated, easily mis-understood, and improperly used in my humble opinion.

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

Scott: Huge expansion in volatility of course. I had to move to an average true range (ATR) based system for stops in order to accommodate the volatile action of the past couple of years. And this has made position sizing a little more complex, but manageable.

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

Scott: All of my signals and gap trading decisions are based upon historical probabilities that I’ve identified through extensive back-testing. I trade much more profitably and patiently when I know that I have a historical edge backing my setup. Otherwise, my personality is such that I tend to over-manage and tinker with my trades – normally resulting in cutting my winners short and riding my losers, a terrible combo!

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

Scott: Know thy self. Find that single market, setup and time of day that best fits your personality and then focus, focus, focus! Way too many newbies waste a bunch of time chasing the lure of money and the next great idea. There are lots of ways to make money consistently in the markets, but none of them can be found without an objective self-assessment and serious focus, effort and analysis.

StockTickr: What do you like best about trading?

Scott: I love the freedom and control over my own life that it provides. There are an unlimited number of ways to make and lose money trading the markets. One of the surprising benefits for me has been the ability to use my creative side to invent new ways to take profits out of the market. This is truly exciting and empowering for those that have the stomach and means and interest.

StockTickr: Thanks for your time, Scott.

Scott: Thanks, Dave.

There is now a risk free trial for StockTickr Pro – hone your trading edge and become consistently profitable with StockTickr.

Previous interviews in the StockTickr Interview Series (RSS feed)

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 Ugly
2. CyberTrader Trick: The Opening Gap Fade
3. My Gap Fade Faded Away

Read on for a great interview and learn more about how Amarjit trades, the types of setups he’s looking for, and how he got started trading.

StockTickr: Tell us a little about yourself, TraderAM.

TraderAM: Born in the UK and have lived most of my life here apart from a 3 year stint in Canada. On the education front, I did a University degree in Biochemistry, I didn’t follow that thru as a career and went into the IT and Computer Industry instead. Pretty much most of my working life has been in IT Software development which I still do currently as full time employment. Enjoy golf, science fiction, marine aquarium hobby and family life.

StockTickr: How did you get started trading stocks?

TraderAM: I became interested in the stock market while at University when I went on some general information seminars. But it was only later (1999-2000) when I had an opportunity to actually think about trading for real. As you know this was the time of the tech boom and IMO it was also the start of online trading coming to the fore. These two factors combined to produce the incredible market conditions we experienced. Looking back, I was not really “trading”. I didn’t look at charts or consider stops and losses, I was just jumping on the momentum bandwagon like everyone else and making lots of money which all seemed so easy..lol.. The buzz of trading during this time and the desire to learn more about how the markets work, got me hooked.

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

TraderAM: By nature, I’m not an aggressive trader, so I haven’t really blown a big account as such. In fact I probably missed out on the biggest gains in the tech boom as they occurred after I had moved most of my money out of the trading account for mortgage and car etc. The remaining 15% or so, I naively believed that I could build up again quite easily. Then came the tech crash and so I suppose you could say I “lost my shirt” as that disappeared quite rapidly.

StockTickr: Do you trade for a living now?

TraderAM: No. I still have my full time job. But being around computers all day, the flexibility of working hours and also the fact that the US market is open 2:30pm to 9:00pm UK time means that I can normally trade on most days.

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

TraderAM: You have to find both a strategy plus a timeframe which makes you comfortable and you have to stick with it to allow it a chance to work.

StockTickr: Do you keep a journal and do you consider good record keeping essential to your success?

TraderAM: Yes and Yes. It is only by doing this that you can judge your performance, see if the strategy is underperforming and see if you are deviating from your trading plan.

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

TraderAM: I trade off the 15min chart, using primarily candlestick price action setups on stocks which have gapped. I am looking for setups such as range breakouts, price action at s/r levels and pullbacks in trends alongside staying on right side of the general market. I am always aiming to hold part of my position until end of the day as that way I can catch the most of a move if a stock starts to trend.

I owe some thanks to TraderX as my strategy is based on his with some of my own modifications added to it.

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

TraderAM: Whenever I enter a trade based on a candle setup, my initial stop is usually at the opposite end of that candle. I move my stop to breakeven once I am up 1R. In terms of exits, it varies depending on market conditions, but generally I take partial profits at Fib Ext levels, 1R, 2R , $1 gain (whichever one seems more appropriate) and the rest I exit at the end of the day if it is still open.

StockTickr: What 3 books do you recommend traders read?

TraderAM:

• Stock Market Wizards
• Trading the Zone
• Technical Analysis by John Murphy

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

TraderAM: The blogs I read (see my blog for links) are all very good and I try to visit them most days if I have time. But if pushed to name 3, these would be (no particular order):

• 00nr7
• TraderX
• Dinosaur Trader

StockTickr: Do you think one day computers will make better traders than humans and has that day come already?

TraderAM: A quick answer might be yes as they would be better than humans at performing mechanical tasks since no emotions are involved (e.g. obey stop losses, let profits run etc). However I would say no. Any computer system will have been designed by a human initially and as such has some human ‘influence’ already built in. The market is driven by greed and fear and as long as humans are involved it will always be so, any computer system will have an impossible task of trying to find order in this mass. I hope that is the case anyway, as computers are pretty boring beasts.

StockTickr: What technical indicators could you not live without?

TraderAM: I trade more off price action rather than indicators per se. However the ones I do use are: ema, CCI, volume,atr. More as supporting factors rather than decision makers.

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

TraderAM: Hard to say over that timeframe as I have only followed the markets day in day out for last couple of years when I started trading “properly” with a definite trading plan. At a basic level they are still driven by the same forces (supply and demand) so from that point of view they haven’t changed. In terms of character: the market for most of 2007 and 2008 was not moving as much as say in Tech Boom days, so that is one aspect. All that changed in last quarter of last year when volatility came back big time. In terms of adapting during this time, I have forced myself to trade less, be more critical of my chart patterns and try to only take the very best looking setups.

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

TraderAM: Yes, Backtested then paper traded before going ‘live’. I also continue this going forward and backtest any modifications to my strategies and any new setups that I build.

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

TraderAM: Learn about Money Management so you don’t lose your shirt. Learn discipline so that you can stick to your trading plan to give it a chance to work. Keep in mind that you only need to be successful 50-60% of the time to make decent profits. Don’t take a strategy from any blog/forum and expect it to work. You have to work at it yourself and better still try to take the best bits of it and add things which you have found in your own study of the markets. It is inherently human that when you have built something yourself, you will have more confidence in it and will be more likely to stick with it.

Unfortunately, trading is going to be painful, there will be days when the market kicks you and then kicks you some more when you are down. If you know that from the outset then you can steel yourself to it. The key is to just take it but stay in the game over the long term (hence money management) until you become more successful. Remember, it is a marathon not a sprint.

StockTickr: What do you like best about trading?

TraderAM: The buzz and satisfaction you get from good trades which you have executed to plan and kept your discipline. Also freedom that it gives you to enjoy other things in life, when you can do it fulltime successfully (which I hope to do at some point in future).

StockTickr: When did you start your blog and what prompted you to do so?

TraderAM: I started my blog at start of 2008. A lot of my trading ideas and best info has come from free blogs and forums despite the many books and courses I have been on. So in a similar fashion, I wanted to pass this on to any new traders who happen to want to read my rantings. Another reason was the hope that more experienced traders would read it and pass on their valuable insights which would help and improve my own trading. I like to think I have achieved both of those objectives.

StockTickr: Thanks for your time, TraderAM.

TraderAM: Thanks, Dave.

There is now a risk free trial for StockTickr Pro – hone your trading edge and become consistently profitable with StockTickr.

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)

Do you have suggestions for other traders you’d like to see an interview with? Let us know!

Related posts:

1. Interview with Me at Optionetics
2. One Question Interview with…You!
3. One Question Interview with David Hannan

Read on for a great interview and learn more about how Andrew trades, more about his chess background, and how he got started trading.

StockTickr: Tell us a little about yourself, Andrew.

Andrew: I’m 36 years old and live in Brisbane Australia and have been trading full time for three and a half years. Previously I ran a small business teaching chess to school children. When I was a teenager I became obsessed with playing chess and spent many years attempting to become a professional player, a pursuit that allowed me to see a lot of the world at a relatively young age but also an activity that never had that much of a future as there were simply too many better players than myself competing for very small sums of money.

I had dabbled in the market previously having owned stocks and even made a small profitable trade during the tech bubble, I thought that was pretty neat but never pursued the idea any further. In late 2003 I had become very bored with my job and was just starting to wake up to the idea that I was climbing a ladder that had nothing promising waiting for me at the top so I was looking for a change of career. The choices as I saw them were to get more heavily involved with property investment and perhaps branch off into property development and/or to learn how you could make money from trading. Trading was a natural fit for me as I don’t mind investing lots of screen time and doing plenty of reading and I was used to the idea of being constantly humbled by a game that is much greater than you are. I got serious about learning trading at the beginning of 2004 a year before I placed my first trade, I basically read everything I could get my hands on, attended all the trading meetings and seminars in Australia that were available and started exploring different trading possibilities. I still invest in property whenever I can and see trading as a way to generate a wage presently.

Since 2005 I’ve traded index futures and Australian stocks mainly and since late 2007 I have been trading US stocks only.

StockTickr: How did you get started trading stocks?

Andrew: I originally started trading Australian shares using this ‘wonderful’ new product called CFD’s in early 2005. My main strategy was to focus on a watch list of companies close to their announcement and dividend dates and try and catch some upswings, it was a long only EOD strategy and a large part of my success was the powerful bull market we were having at the time, eventually I realized that an unhealthy part of my returns were being delivered by the bull market and I went in search of some ideas that could work just as well in different market conditions, I also developed a strong dislike of CFD’s and market makers in general. Also if you really need 10:1 leverage at expensive interest rates and brokerage then you are under capitalized.

The main reason I started trading US stocks is because for many months I was reading Trader Eyal’s blog and watching his daily reports and regular profits and thinking that this was exactly the type of return profile I was looking for myself.

• Reasonably high trade frequency for manual trading
• Hold times of a few hours but not days
• A simple and hopefully robust methodology
• Win rates not too far under 50%
• Few unprofitable months
• Short duration draw downs = Brilliant.

I’ve basically been consistently profitable since the beginning trading US stocks and even though it’s a very short track record so far (9 months) I’m confident there is a good chance this consistency will continue as I learn and improve.

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

Andrew: No horror stories so far, for me the thought of having to work at a job you hate because you need the money is the real horror story, so I have tried to be very careful about getting forced into that position, nothing the markets will ever throw at you is scary if you are able to place it in perspective. I’ve been fortunate in avoiding any large trauma with my trading.

I’ve had a large dose of luck with this however when I consider how many contracts I was holding completely unhedged in various stock indices such as the DAX & FTSE overnight at some points compared to my total capital, it’s just great that the period of my greatest ignorance and exposure coincided with some wonderful bull markets around the world. Bull markets are excellent times to start trading if you can reach some state of self awareness before they end.

StockTickr: Do you trade for a living now?

Andrew: Yes. I see trading US stocks as a wonderful way to make a wage for the moment, certainly more than I could earn in any other job I would qualify for. After a decade of teaching chess my family had given up the thought that I would ever get a respectable job, so I’m quite comfortable calling myself a trader at the moment. The worst aspect of trading US stocks from Australia is that I need to be awake during the night, which means that I’m constantly dealing with jet lag and different sleeping hours.

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

Andrew: Stick around.

Read, Learn, Try plenty of things, Some stuff will work, some won’t.. so what? Improve and repeat.

StockTickr: Do you keep a journal and do you consider good record keeping essential to your success?

Andrew: This is probably the strength of both my trading and how my brain works. I like taking records and documenting things. I always take a journal with me and take notes and write down my thoughts, I finish a journal every three months and buy high quality hard covered journals as I want them to last for a very long time. Sometimes I need to read important information many times before I can actually use that knowledge to improve my results, also information can arrive before you are ready to receive it, you simply don’t have the necessary framework to understand and implement that information when you first hear it and if you don’t capture it somehow you are likely to lose it. I have read the Market Wizard series every 6 months or so since I started trading, every time I read those books I see something different or really ‘understand’ something at a deeper level, I wish there was a shortcut for all of this repeat effort but I haven’t discovered it yet.

With regards to trading my primary Excel spreadsheet is very thorough, it’s the end result of all of my trading experience and a love of measuring things, it’s always growing larger (29 tabs so far) as I borrow different ideas from the net and books about how to measure trading performance. Some of the stats I keep track of I have created myself, but almost all of the good ideas I have just taken from other sources. Record keeping is possibly the one area I seem to do very well with in trading, most of my trading frankly is just very simple and not at all impressive, I don’t have an ability to read the market well so I need to compensate by working hard on my analysis and reviews.

Good record keeping is essential to my success, quite a few of the rules that I implement are as a result of my numbers telling me to behave in a certain way even though it seems counter intuitive.

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

Andrew: At the moment I’m day trading exclusively, my average hold time for all trades is 2 hours 39 minutes and 9 seconds I’m basically your typical momentum day trader looking to hop on for a ride of a stock that is repricing itself. The good and bad points about this is that it’s the market and not the mechanics of your trading that is doing most of the heavy lifting, so you need to be comfortable with the idea of giving up control and letting things move where they may.

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

Andrew: A time based stop EOD is the final exit as I’m not holding any positions overnight at the moment. With losing trades I’m almost always exiting at my maximum stop loss level and with winning stocks I use profit targets mainly with an occasional discretionary profit taking stop if I think the price will go further, hoping to catch those rare tail moves. To date this discretion has cost me money however. I’m very mechanical with my trading and one of my main areas for improvement in the future will to work on my automation and programming skills.

StockTickr: What 3 books do you recommend traders read?

Andrew:

• Day Trading With Short Term Price Patterns & Opening Range Breakout by Toby Crabel – This is an older book which can be a challenge to track down. I found it very helpful in providing some methods to measure and classify price movement. It sort of fitted my personality nicely in that a lot of the analysis is quite methodical, but not difficult to understand or to implement, If any of the math extends beyond very basic probability and statistics them I would be lost.
• Fooled by Randomness by Taleb – An excellent thought provoker and very well written book. I felt very dumb after reading this for the first time, who was I to think I could make a living from the markets as a retail trader? Perhaps it would be better to invest in some index funds and get another job or start a business? Now I’m more comfortable with my lack of knowledge and consider that if I can make reasonably consistent returns at what I believe are acceptable risk levels and draw downs then being always perplexed is not that difficult a condition to live with. I still like index funds and respect the markets as being pretty efficient but not yet perfect.
• Adventure Capitalist by Jim Rogers – I think you need to be an investor to generate real wealth, simply earning a high salary won’t be enough if you don’t have the investment skills to complement the income.

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

Andrew: Actually Dave I follow your trading results daily at StockTickr to see how I compare, but since you have started including your ATS results the correlation between our results has gone out the window.

This is a list that is always changing but right at this moment my three favourite blogs related to investing/trading are:

• Sudden Debt – A wordsmith and very insightful analysis as well.
• Falkenblog – This well written blog helps remind me that I never want to have to rely on my quant skills to generate an income from the markets, there are too many smart people out there, when I recognize this is necessary to compete then I will have to change games. Fortunately it appears as if the retail trader can still operate in a relatively sheltered world, at least for the moment.
• The Financial Philosopher – Wonderful quotes and wisdom.

I am fascinated by how the most widely read financial blogs are probably not the best blogs in terms of helping you succeed as a retail trader. Just like chess players gravitate towards opening theory instead of working on their endgame (eating fries instead of vegetables) viewers seem to be drawn to the noise and charts a lot blogs, the more opinions about the market (noise mostly) and recent charts with indicators (the more lines the better) the more subscribers you are likely to get, the idea of hard work and continual self review just doesn’t market well.

StockTickr: Do you think one day computers will make better traders than humans?

Andrew: Perhaps they already are better. I have a limited understanding of the subject but I believe some of the best hedge funds in the world find an edge with their computer power and speed. One thing that surprises me is how long it has taken computers to get to the top of the chess world, even today they aren’t invincible, they play at a higher level than all humans but they can still be defeated now and then in individual games.

I can’t predict how computers will change trading, I would hazard a guess and use one word.. ‘massively’.. but I plan on living long enough to find out. I have this philosophy about such sweeping change that it’s best not to let it keep you awake at night, it’s better to be working on your running skills so that if you can’t outpace the hungry lion you at least can outpace most of the other runners.

StockTickr: What technical indicators could you not live without?

Andrew: I can’t think of any. I was heavily into indicators until I discovered all the various bias ideas our brains and thoughts are subject to. It’s not really an indicator as such but I am fond of horizontal lines, much of my trading is based on them. Buy when price hits that one within this time frame, sell if it hits that one, buy my wife something nice if it hits that one, and so on.

I want to test an indicator before I introduce it. If I was to exit a trade at a Fibonacci extension level then I would like to test that idea against other exit criteria and arbitrary levels over 30+ trades to see if it’s adding value. If simple is working well then I try and resist the desire to add more complexity, it’s a difficult thing to resist though.

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

Andrew: I don’t have a long enough track record to know, and I stopped trading ASX stocks long before the general bull market in Australia stalled. However right at the moment (May 08) it’s obvious that the follow through in the US markets has taken a holiday, and there are some impressive reversal moves, the stats I track were telling me something was different pretty quickly so I have done a few things to compensate including becoming more aggressive with locking in profits and become more selective with trades entered, though having said this I’m basically flat for the month of May so if I’m looking to improve further or waiting for the follow through to return. I’m very happy keeping the gun powder dry in what I consider challenging conditions presently, as if you can avoid doing too many stupid things all at once and keep your trading capital intact then the profits can flow quickly when things turn your way. I would like to think I’m flexible enough to change direction and adopt new systems when required, though I’m green and fortunate enough to have not been really been tested in that area yet.

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

Andrew: I backtest a lot less than I used to as I’ve worked out how very difficult it is to do properly and with accuracy. Generally I’m happy with an idea I think should work forward tested over 30+ trades (Ideally 200+ if frequency allows) these days. Belief is very important for me, I’ve found I needed a trading style where I am able to keep the length and size of draw downs relatively small, which is why I have gravitated towards day trading where I’m able to trade at a higher frequency than previously. If you have a system that should be hitting equity highs regularly and is position sized so that there are small peak to trough draw downs then one of the huge advantages of that is you can get a tell about when things might have changed before you burn through too much of your capital. If you have a maximum allowed draw down of 5% of account size you don’t need the courage to be trading when you are down 20% or 30%, I used to have that courage but I lost it.

I also do a lot of work in Excel on my trading and testing new ideas, so that helps.

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

Andrew: Have a good think if this is the ladder you want to be climbing, what will be waiting for you at the top? I have a friend who is presently in Mexico and travelling around the US and South America as a tourist at the moment, meanwhile his internet business continues to double every 6 months or so while his employees run it for him. It’s the dream of trading on a beach with a cocktail in your hand except for him it’s a reality, apart for the having to do any trading or any work at all part.

I also have friends who are well and truly financially set up for life from investing in property in Australia. So choose carefully where you direct your wealth creation energies. I like trading and think I’m doing ok results wise, but I’m yet to meet anyone who has created serious wealth from retail trading, you don’t get rich from a salary usually. If you return 50% on your capital, you need to have at least double your annual trading salary tucked away as working capital. I would be advising you to have a closer look at how you accumulated that trading capital in the first place and ask if that doesn’t present you with better opportunities than trading potentially.

If that advice is unwelcome then find someone who is successful at what you are trying to do and copy them as best as you can.

StockTickr: What do you like best about trading?

Andrew: I can choose to stop working whenever and play with my cat ‘Dax’ (no kids yet). I’m also free to take days off and travel with my wife, the flexibility of the work week is an attraction.

Also it’s not really that difficult compared to other competitive sports to make a wage from the financial markets which is very different to the chess world where the talent/money ratio is highly unfavourable.

StockTickr: When did you start your blog and what prompted you to do so?

Andrew: I started blogging in 2005, though the blog has only ever been a small sideline and can be seldom updated at times, I started it as just a way to say hello to the world and to make contact with other traders. When I started blogging I was living in Lithuania so I was feeling a bit isolated from the English speaking world as well.

StockTickr: Thanks for your time, Andrew.

Andrew: Thanks, Dave.

There is now a risk free trial for StockTickr Pro – hone your trading edge and become consistently profitable with StockTickr.

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)

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 David Hannan
2. One Question Interview with Jeff White
3. Interview with TraderAM

Question from Optionetics: Do you ever use options and if so what are your favorite strategies?

My Answer: I don’t regularly trade options. Until relatively recently, I thought options were just a more complicated way for most people to lose money. I still think that to some extent – a lot of traders fall into the trap of thinking that trading strategies that work are complex when usually the opposite is true.

As an intraday trader trading equities, I’m always looking for volatility and when you go back and look at a daily chart of the Qs there’s a lot of sideways action with no direction either way. If I had to trade options, I’d probably trade a strategy that tries to capitalize on this non-movement.

Optionetics Interview part one, two, and three.

Related posts:

1. Interview with Eyal Maoz
2. Interview with Adam Warner
3. Interview with Dave Johnson

For those of you that know of Tim, you know how shy and reserved he is – it’s hard to draw out his true feelings. (OK, that was sarcasm.) Whatever your opinion of Timothy Sykes – he tells it like he sees it whether that gets him in trouble or not.

Tim is also the author of the bestselling book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund.

Read on for more about how Tim trades, the way he trades the pump and dump schemes in penny stocks, and why he thinks controversy seems to follow him around.

Tim is looking for your questions in the comments of this post – so ask him anything you want.

Note: Are you losing money trading? If so, give StockTickr a try – we guarantee you’ll be able turn your trading around. There’s a 14 day free trial.

StockTickr: Tell us a little about yourself, Tim.

Tim: I’m a New Yorker who turned $12,415 in Bar Mitzvah gift money into $2 million by the time I graduated college in 2003. The first $1 million I earned by buying simple chart breakouts in penny stocks – due to manipulation – flipping them within hours or days for 5-30% returns per position. Once I learned how much manipulation there was, I made my 2nd million by short selling those same breakouts later in the pattern when the hype was wearing off, again taking 5-30% gains on the downside.

Then I made another million or so managing the top ranked short bias hedge fund (Barclays) 2003-2006 when my lack of discipline caught up with me and I ignored all my trading rules in order to try out a more scalable investment strategy, investing. I sucked at it and my fund lost 35% from 2006-2007.

Right as I was stuck with this confidence-crushing loss, the TV show Wall Street Warriors, in which I was featured, became a hit and I received tens of thousands of emails from people wanting to know more about stock trading and hedge funds. The more confused emails I got, the more I realized my gains and losses were a direct result of the combination of absurd industry regulations, the financial media circus and snake oil salesmen who unintentionally joined forces to limit the spread of honest and accurate information. I became determined to cut through the industry BS and defeat this financial axis of evil.

Since I was never more than a speck in the hedge fund industry, I couldn’t talk much on that, but I could teach my brand of short-biased penny stock trading. So, late 2007, I closed my hedge fund and founded a publishing company, BullShip Press, LLC, setting out to teach through my blog, book and instructional DVD – returning to my original $12k roots to repeat my feat to show exactly how to turn thousands into millions trading the world’s trashiest stocks!

StockTickr: How did you get started trading stocks?

Tim: After an injury kept me sidelined from my tennis obsession during senior year of high school, my parents gave me control of my Bar Mitzvah gift money, thinking I’d lose it all and that it’d be a good lesson for me. Tough love, right? Talk about your all-time backfires! If it had been any other year other than 1999, they probably would’ve been 100% right, but I was at the right place at the right time and I made $100,000+ that first year, $700,000+ the next. Ever since I’ve been hooked, spending 15+ hours per day just learning and preying on the latest hot penny stocks.

StockTickr: You had a recent trading disaster that forced you to make changes. Tell us more about that. Are you still stuck with that position?

Tim: Yes, the one time I actually believed in a company, it ruined my hedge fund (see detailed story in this blog post).

Lessons galore: stick to your core discipline, focus on liquid stocks, never trust any CEO or company, there’s always something sleazy going on penny stocks. Just a tough, tough lesson, but ultimately a necessary one as it’s made me infinitely wiser and more conservative.

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

Tim: You must adapt to market changes. Over the years, I’ve used multiple strategies, to varying degrees of success, all in the pursuit of profit. Trust me, I didn’t want to give up my 99%-of-the-time-successful penny stock gap-up strategy that was responsible for nearly all my gains in 1999 and 2000, but it stopped working so I changed and became a short seller. Now I’ve seen too much crap to ever buy and hold these junkie companies for very long, but my short selling still varies depending on the market environment.

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

Tim: Normally I like to scale in and out of positions, but since I’ve returned to my $12k roots – well now $19k – the absurd pattern day trading rule limits my trading to 4 trades per 5 day period (that’s right, I’ve checked myself into prison in order to bring attention to this anti-American SEC sponsored-tyranny) so I have to be very precise in my timing, which is very tough for a poor timer like me (I’ve always been bad at timing). My goal is to take 10-20% gains within 1-2 days and cut my losses at 2-4%. But on ideal pump and dumps – which sadly only come about a few times per year – I let my losses ride a bit more because I know there’s a 90%+ chance of a big-time reversal (See LGDI, CNEX and VRML in the past week)

StockTickr: You’ve said your small cap strategy is not “scalable” – have you tried modifications or different strategies to make it more scalable?

Tim: Other than joining the stock promoters themselves, I think I’ve tried just about every angle there is in this trashy niche. The problem is these companies are just too tiny and other than 1999-2000 (when boiler rooms were having a field day), there just isn’t enough liquidity, especially from the short side. I know many PIPE hedge funds try pumping up these junkie companies, but they need to go to telemarketing class because they’re just not very good at it – they’ve only got the dumping part down.

And yes, I’ve tried a host of other, more mainstream trading strategies, but my experience in this backwards niche and refusal to use leverage works against me. I’m afraid I’ve been sentenced to an eternity of hard time down here in the gutter – that’s why I might as well help all the other inmates who haven’t discovered ways to beat the system like I have, Shawshank Redemption-style!

StockTickr: On a fundamental/technical continuum where 0 is completely fundamental and 10 is completely technical and 5 is half and half, where do you think you fall?

Tim: I’d say a 7 – even though these junkie companies usually have little to no revenue or profits, I still do the painstaking research reading their SEC/Pink Sheet filings, corporate management background checks and more importantly, their “IR firm” (stock promoters) background checks.

Take for example, Converted Organics (COIN), a recent junkie company (lots of deals announce, but 0 revenues and apparently too busy to ever release an earnings PR – ever). I’ve successfully shorted their stock a couple of times after it ran from $2 to $16, not coincidentally the month after they hired an “IR firm” that was previously attached to similarly sketchy Host America (CAFÉ) which went from $3 to $16 in a few days based on an alleged deal with Walmart for a trial run of their energy saving light bulbs. (After being halted by the SEC, Host America was forced to admit they had no contract, it was only a verbal agreement! Due to all the bad press, they had to change their name to Enerlume Energy (ENLU) and the stock now trades under $1.) That’s the kind of hype and manipulation I deal with on a regular basis – I call it “fundamentally lacking research.”

StockTickr: I think it’s fair to say that controversy seems to follow you around a bit – why do you think that is?

Tim: A few reasons – there’s a lot of inaccurate information about me (that I only got lucky during the bubble – they forget about my 2nd and 3rd million dollars earned, mostly because I could never talk about them while running my hedge fund=absurd industry regulation #38472732), my 35% loss was due to my publicity hounding (Traitor Monthly’s editor-in-chief Randall Lane’s assumed that was the cause, ignoring the copy of my book I sent him and proving himself to be an incompetent journalist), I’ve lost everything (probably rumors spread by stock promoters not wanting me to educate the suckers aka their prey) etc., I don’t believe in leverage, I have a big mouth, I trade penny stocks, I friggin’ short sell them!, and most importantly, I call these soulless financial bastards out on their BS and scumbagginess – not just penny stock-types but I’m talking about brokers, “gurus” and wannabe financial journalists –

1. calling out a “guru” for pumping
2. calling out the TheStreet.com for pumping
3. calling out a CNBC reporter who majored in theater for pumping
4. calling out a pump and dump company

StockTickr: Other than your own, what 3 books do you recommend traders read?

Tim:

• Reminiscences of a Stock Operator (Wiley Investment Classics)
• How To Make Money In Stocks: A Winning System in Good Times or Bad, 3rd Edition
• Secrets of Professional Turf Betting

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

Tim:

• HowardLindzon.com
• TheTechnicalTrader.net
• DealBreaker.com

StockTickr: What technical indicators could you not live without?

Tim: Price and Volume (I keep it simple because down here in the gutter, most people are morons so advanced technical analysis doesn’t work)

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

Tim: I have to quote JL on this one “Wall Street never changes, the pockets change, the stocks change, but Wall Street never changes, because human nature never changes.” It’s definitely the truest statement I’ve ever heard because no matter massive technological change, new trends and companies being hyped, new scumbag tactics, new advertising tactics to make suckers believe they have to stay up-to-date on breaking news to have a chance at beating the market, etc. it’s all just the same old BS.

Of course you have to adapt to changing market environments and new market players, but that’s a set number of variables. It’s more about education as you gradually fill in the missing pieces of the grand puzzle that are those variables.

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

Tim: I’ve never used software to backtest, but I have a photographic memory and that’s why I like to watch every single trade when I’m in a position—all that data gets stored so I can refer to it when I see similar patterns forming. It’s amazing how similar all the pump and dumps are—sure, the timing, price and volume always vary, but, by and large, the variables remain the same because tiny companies and/or their shareholders will always look to hype their stocks up in order to raise capital/sell out at higher prices. It’s a very simple pendulum-like pattern, but I’ve always found that simplicity works best and that’s when I’m the most confident.

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

Tim: For them to realize that 90% of traders lose money, cut your losses quickly, much of what works is counterintuitive, there’s always going to be someone smarter and better informed than you, find what works for you and stick to it, don’t trust anybody or any company – especially brokers, gurus and analysts, you can’t expect consistent trading profits as if it were a salary, 99% of the every day information peddled to the unsuspecting public is random noise and junk that astute traders must learn to ignore, you can never read enough about the experiences of others, don’t be so quick to get angry at your losses – they’re actually good for you, don’t ever put all your eggs in one basket—no matter how much research you do, anything can happen – well, that’s it for now, can’t overload newbies or else they’ll be scared off!

StockTickr: What do you like best about trading?

Tim: The independence of it all, how there’s no set structure as it’s more of an art than a science and that despite all our society’s changes over the past century, trading has, and always will, remain basically the same. Eventually we’ll all be replaced by computers and algorithms, it’s the end of an era for us cowboys.

StockTickr: When did you start your blog and what prompted you to do so?

Tim: I spent 6 months writing my book and creating my instructional DVD, but my credibility was pretty much shot by that one non-core investment loss and Traitor Monthly’s going public with their assumptions about me. I could talk all day long on all the major media outlets about how great my core trading strategy and decade-long track record is – and I did – but unless people can see it working week in and week out, I wasn’t going to be taken very seriously – I mean short selling penny stocks sounds crazy, Investopedia even says it’s impossible!

So, I started blogging regularly in October 2007 – the same month I closed my hedge fund – but I didn’t come up with the idea to repeat my feat – giving my writing structure – until November. Now, I’m even more addicted to blogging/teaching than I am trading! After all, it’ll be great when I repeat my feat, but ideally, many of my readers will have accomplished it before me – that’s my ultimate goal. I’ve realized my destiny is to become a great teacher as it’s much more fulfilling than becoming a great trader or investor.

StockTickr: Thanks for your time, Tim.

Tim: Thanks, Dave.

There is now a 14 day risk free trial for StockTickr Pro – hone your trading edge and become consistently profitable with StockTickr.

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)

Do you have suggestions for other traders you’d like to see an interview with? Let us know!

Related posts:

1. Follow Up Questions for Gary B. Smith
2. One Question Interview with Nusair Bawla
3. One Question Interview with Gary B. Smith

Read more about how Jamie trades, how he got started in the business, and how he lost a wad of money early in his trading career.

Jamie has agreed to answer questions in the comments of this post, so feel free to ask away.

StockTickr: Tell us a little about yourself, Jamie.

Jamie: My name is Jamie Hodge and I currently reside in Carlsbad, CA. I relocated to California from Austin, TX in January 2007 in order to work more closely with the Trade-Ideas crew. Since I’ve been here we have been heavily involved in getting our auto trade and back testing module (OddsMaker) active with some of the major platforms in the professional day trading community.

I’ve been day trading for a living since 1996; I began my career in the Block Trading office in Austin.

StockTickr: How did you get started trading stocks?

Jamie: I graduated from Southwest Texas State University (now referred to as Texas State). In the fall of 92, I took the series 7 and started out as a broker for a small regional firm. I started hearing thru a broker friend about his friends from college who had started a day trading office and were using the SOES system to rack up huge gains on a monthly basis. As it turns out, his friend ended up being Jeff Burke who was one of two founders of Block trading; Chris Block being the other.

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

Jamie: In 95 a broker colleague and I started a retail broker/dealer in order to facilitate our business as we were sick of getting gouged by the major firms. During this time a good friend of mine had been given the opportunity to go work in Saudi Arabia and make really nice cash; So he would send me his excess money every month and I would buy mutual funds for him. After about a year at the new place I just couldn’t take it any more, I hated being a salesman and trading was all I could think about and so I walked away from it. My friend in Saudi and I had a talk and we ended up liquidating his funds and off I went to day trade with $17k. Chris Block ended up funding the rest of my account and to make a long story a bit shorter, I whittled it down to under $5k before I turned the corner. Talk about feeling worthless, try sleeping when you’re teetering on loosing all of your buddies money that he has been working hard for. Not fun. In the end I ended up giving him back over 2.5x what he gave me and everything worked out.

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

Jamie: Never become complacent especially when you’ve been gimmick trading all of your career. I refer to any trading practice that can become extinct from a rule change or system replacement as gimmick. The prime example was soes. Once the soes phenomenon started taking root, the big boys were already laying plans to do away with it and replace it with a better system. One that would allow more shares and faster executions, one that would put the advantage back into their hands. They succeeded in 01 when they replaced it with the supermontage, and thus soes became relegated to the history books.

After stumbling around aimlessly and wasting about a year liquidity trading before worldcom finally kicked the bucket. I started hearing about traders of my ilk (quick gratification type scalping large blocks and small moves) who were making decent cash trading on the nyse. Once again, the gimmick game was on, and then one by one they started sealing up all the holes. NYSE open book was great for a while, and let’s not forget all the fun we had using bullets(synthetic hedges from Essex) to hammer our favorite specialist from time to time.

The gimmicks were fun, but I feel that with my current style, there really isn’t anything that could impact it adversely (barring me breaking all of the rules and/or the market just sitting there). In other words, as soon as I was hitting my stride with one of my old styles, then it would end and you’d have to start all over with something different. What I am doing now has longevity, and so over time, as I improve I should really be able to achieve some nice velocity.

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

Jamie: Anything that I trade these days is generated from alerts fabricated through TI with the use of the Odds Maker. Not to say that I won’t trade anything else, but I’d say 95% of my signals originate from the TI engine. Most of my hold times are short, my typical hold time is probably 20 minutes. As far as exit strategy it’s pretty simple, once I am in a position, I stay in it until it’s time period has expired or I get stopped out. If a poiion is approaching its time limit and it’s still moving for me, I’ll tell the bot to ignore the exit signal and then manually adjust my stop.

StockTickr: How do you recommend established discretionary traders get their feet wet in automated trading?

Jamie: Anyone who is entertaining the idea of auto trading should first become familiar with using the Odds Maker, since this is the tool that will be used to find/fabricate strategies used in an auto execute environment.

StockTickr: How many automated strategies are you comfortable trading simultaneously?

Jamie: Currently I am launching 15-16 different strategies every open.

StockTickr: What 3 books do you recommend traders read?

Jamie: New Market Wizards by Jack D. Schwager was entertaining. Of course,Reminiscences of a Stock Operator by Edwin Lefevre is a classic that still translates well.

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

Jamie: The biggest issue has been the systematic retooling of the trading network over the past 7 years. In 96 when I first started trading there were 0 ECNS, it was just all market maker’s thick bids and offers and you could see exactly who you were trading against. It’s quite the opposite today, no liquidity and you can’t see anything. Take all of your ecn books, lvl II, and any other feed you can pay good money for and you’re lucky if you’re seeing 10% of the real order flow. Just like casinos have banned card counting at black jack the big boys have taken every advantage away from the small day trader. Now more than ever, you need to fight algorithms with algorithms.

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

Jamie: All of my strategies are fabricated using the Odds Makers’ – everything’s a 15 day event based back test.

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

Jamie: You have to come in with a game plan. In advance you have to know exactly how you’re going to react. Most of the time a trader can look back and pinpoint exactly what it was that caused an undesirable result; If you don’t know why, then you have a problem. The biggest thing is constantly making yourself aware that trading is 90% mental.

StockTickr: What do you like best about trading?

Jamie: The freedom and lifestyle that it allows.

There is now a 14 day risk free trial for StockTickr Pro – hone your trading edge and become consistently profitable with StockTickr.

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)

Do you have suggestions for other traders you’d like to see an interview with? Let us know!

Related posts:

1. Trade-Ideas Has “Fundamentally” Changed
2. Generating Ideas for Automated Trading Strategies
3. Interview with Jamie, Wall St. Warrior

StockTickr: Tell us a little about yourself, Barry.

Barry: I live in Thousand Oaks, CA (just North of Los Angeles). Prior to trading I got a Masters in Pastoral Counseling, and a doctorate in hypnotherapy. I had a clinic in Orange County, CA., where I practiced hypnotherapy and NLP (Neuro-Linguistic Programming). I’ve also been involved in martial arts most of my life, which informed my approach to finding the “energies” in the market, which is the hallmark of my trading approach.

StockTickr: How did you get started trading stocks?

Barry: My Dad was a very successful stock trader, so I grew up with it. He had me stock-picking when I was knee-high to a grasshopper.

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

Barry: I’ve had my losses, of course, but no horror stories. I never lost more than I could afford to lose. I have stop-loss levels for each day, week and month. If I reach one of those levels, then I just stop for a period of time until I get my head together again.

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

Barry: The most important thing I’ve learned is that trading is not so much about finding the right “method” or technical “setup” as I originally thought it was. Trading is a performance exercise, much like sports. Success is primarily a function of your mental preparedness, and also a lot of practice.

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

Barry: My style is based on measuring the 5 “Energies” in the market at any given time. Those energies are:

1. Trend.
2. Momentum.
3. Cycle.
4. Support/Resistance (blockage to energy).
5. Fractals.

Most of the time the market is a “random walk” being tossed around by the retail (amateur) traders throwing in a few shares here and there. That doesn’t provide any meaningful structure or follow-through to market activity. So I wait patiently until all 5 energies align in the same direction. You can actually score a trade on a scale of 1-5 in a very objective manner based on how many of the 5 energies are pointing in the same direction (long or short). When all 5 align in the same direction and at the same time, you have a very high probability trade. It happens enough each day on a day trading basis to allow me to be an active trader. On the other hand, it keeps me out of choppy markets.

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

Barry: I trade with a minimum of 3 exits (I’ll use a long example, but everything would simply be flipped over for a short):

1. A Stop loss. I’m buying cycle lows, so my stop goes immediately (1 penny) below the cycle low. This means my stops are only a bar to a bar and a half wide.
2. The first resistance level is my first profit target.
3. A trailing stop is my second profit target.

StockTickr: What 3 books do you recommend traders read?

• Trading in the Zone by Mark Douglas
• High Probability Trading by Marcel Link
• Market Wizards by Jack Schwager

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

Barry: I don’t think the markets have changed in any significant way. The indicators I use simply measure the Energies in the market. If those Energies shift, then the indicators adapt to that. The market goes through cycles of trending and not trending, being volatile and quiet. This has always been.

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

Barry: My best advice is to start slow. Learn different methods for trading, but then pick one and don’t jump around from one method to another. Choose one that fits your personality and trading style. It will take time to master it, so allow yourself that time. You need to get a lot of experience trading various market conditions. You need to work on your own behavior in various market conditions as well. Most of the work you’ll need to do in order to become successful is not the work you’ll do in the market, but the work you do on yourself. Keep a log of every trade you take. In addition, write down both what you were thinking and how you felt at the time of taking each trade. This will serve as a biofeedback mechanism for you. Not only will your log help you learn which technical patterns work best for you, but it will help you see patterns in your own behavior.

Somone once said, “Successful trading is simply a matter of not making mistakes.” Your log is the best tool to help you eliminate mistakes one-by-one (over-trading, taking profits too fast, moving your stop-loss, etc.). One difference between professional and amateur traders is that the amateurs are always looking to increase their success (usually by finding a “better” indicator or setup). The pros work more on eliminating their own mistakes. They focus on managing their own behavior and on taking fewer, better trades.

StockTickr: What do you like best about trading?

Barry: I’m unemployable. No one would want me as an employee. I don’t do the “job” thing very well. So I love the freedom, flexibility and independence that trading affords me. I also love the virtually unlimited income it can provide.

StockTickr: When and why did you start TopDogTrading?

I started my blog at http://www.topdogtrading.com in January of 2007. Prior to that I had been traveling and doing seminars around the country. I enjoyed conducting the live training, but the traveling got tiring, so I decided to move my educational offerings online. The response has been tremendous. I’m actually able to reach more students this way and give away a lot of free videos, articles and other trading resources. I love teaching and interacting with students. Fortunately I’m still able to do that via email, the phone, webinars, and I still do a live seminar once or twice a year.

Your readers are welcome to get my Free 5-Day Video Course by filling out the form on the top right corner of the first page on my blog.

StockTickr: Thanks, Barry!

Barry: Sure, Dave.

There is now a 14 day risk free trial for StockTickr Pro – hone your trading edge and become consistently profitable with StockTickr.

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)

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 Jeff White
2. Interview with Adrienne Toghraie, Trading on Target
3. Interview with Doug Hirschhorn, Trading Coach

Read on for more about how Joshua trades, how he got started trading the markets, and the most valuable lesson he learned to improve his trading.

There are several great interviews on the way – have a recommendation for an interviewee? Drop us a line.

StockTickr: Tell us a little about yourself, Joshua.

Joshua: Hello. My name is Joshua J. Hayes. I live on the island of Maui, Hawaii and have been here for almost a full eight years. I moved here from NYC after working on Wall Street for one and a half years. Before that I spent my entire life in St. Louis, MO. I find living on Maui much better than living in St. Louis, obviously.

I have been involved in the stock market since 1996 at the age of 17, I have been doing this for a living since 18, and have been full-time since the age of 21. When I moved out to Maui, I took part-time jobs here and there which included working at an art gallery, a sunglass shop, beach activities rental, and at a restaurant called Hula Grill. But as of two years ago, I gave up the part-time jobs as my plate became too full with me starting my own blog and website.

StockTickr: How did you get started trading stocks?

Joshua: I happened to see CNBC at a friend’s house near the end of 1995 and saw that IOM and AOL were being talked about. Since I heard about both companies I went and did some research on them. Next thing I know I was diving into the stock market and by the time the end of 1996 came I was day trading and position trading stocks with money that I made while doing odd-jobs. The rest is pretty much history as I happened to start in one of the best bull markets when I started and I was given Investors Business Daily which enabled me to learn to not only buy the best stocks but how to prevent myself from losing all of my gains. However, the fact that I came across IBD at the very beginning is a big part of why I was so successful so early on and why I did not lose a lot of money when the bull ended.

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

Joshua: I was very blessed. I never had one. I learned the CANSLIM system almost immediately and while learning that, I was also day trading, and “messing” around with options. By the time I felt I understood the CANSLIM system, it was clear to me which strategy was going to produce the best returns while leaving me with few losses. Sure enough, it worked like magic as I first saw the market in 95, learned how to buy stocks in 96, learned how to buy the RIGHT STOCKS THAT PRODUCE THE BIG GAINS by 97, learned how to sell by 98, learned how to maximize leverage by 99, and KNEW we were topping in 00. This is why I left NYC in June 2000 and moved to Maui. I new it was over as the charts never lie. The charts were clearly telling me to go home. So to be honest the worst stock probably was IWOV in 2000 as a friend convinced me to make this a long term holding. I normally always cut losses at 7-10%, but this one was down 50% before I got rid of it.

StockTickr: Do you trade for a living now?

Joshua: Absolutely. I have been doing this for a living for a very long time but have made the decision to do this 100% of the time (without a pat-time, which is very normal to have on Maui) as I am confident in every bull market we ever have I will make enough to cover the bad times.

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

Joshua: Cutting losses. No doubt. It is impossible to go broke, once you learn a methodology that can produce enough winning results to make a difference. Even if you are 1 out of 4, as long as you cut the three with a 5-7% loss and your fourth stock rallies 50%, you are obviously going to do very well. During bull markets, I usually have about a 75% win/loss ratio and winners beat losers by at least 4 to 1 margins. In bear markets, longs have a 25% win/loss ratio and the winners only beat the losers by a 2 to 1 margin. So obviously I prefer to go long only in bull markets. Cutting your losses makes sure you will always have capital to use when the next bull market comes along. There will always be another bull market after a bear market cycle and you want to make sure you do not lose all of your money during these times by either over trading or buying stocks on the way down.

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

Joshua: I am a CANSLIM investor that uses a bit of a momentum growth strategy as well. I will only buy completely speculative stocks if the charts are perfect and there is some turnaround. Besides that I need the stock to be high quality. Strong fundamentals, a rising overall stock market, a beautiful chart pattern with the proper volume, and rising mutual fund sponsorship are all requirements I look for in a stock before going long. I love to either buy stocks on powerful moves with huge volume either from bounces off the 50 day moving average or breakouts from chart patterns like double bottoms, cups, cup with handles, saucers, saucer with handles, ascending base, flat bases, and high tight flags. Most of these patterns need to last at least five to seven weeks before I will go long the move.

My usual holding period for the perfect stock would range anywhere from one year to two years. However, I will not hesitate to cut my loss the very next day if I go long a stock and it immediately reverses on strong volume. Everything I touch I expect to move higher immediately. If I purchase it and it moves lower, I know I am wrong and therefore do not want to be a part of it. The usual holding is 6-8 months for my best stocks. But it could be as little as two weeks or as long as two years.

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

Joshua: Since I go long stocks usually right at a breakout point or with a bounce off the 50 DMA and I ONLY buy stocks above the 50 DMA, all of my FINAL cut losses on longs come when a stock closes below the line. If after having big gains, the stock starts to make new highs at a much more rapid to parabolic rate on either HUGE volume or extremely quiet volume, breaks down below the 50 DMA on HUGE volume, or sells off for many days in a row on heavy volume these are all things I would look to sell. My final cut loss, for a stock that has produced at least a 100% gain, is with a close below the 200 DMA. I am NEVER long any stock below the 200 DMA.

StockTickr: What 3 books do you recommend traders read?

Joshua: Actually, right now, there are four but I have to even recommend more as EVERY SINGLE one of these books MUST be read. Everyone and I mean everyone MUST read Reminiscences of a Stock Operator about Jesse Livermore by Edwin Lefevre. This is the book that should be able to prove to you that the greatest trader of all-time traded a certain way and that is the CANSLIM way more-or-less. If the greatest trader of all-time that literally could move the market traded this way, don’t you think you should? How to Make Money in the Stocks by O’Neil, Monster Stocks by Boik, and How Legendary Traders Made Millions by Boik. There are a few others like Battle for Investment Survival by Loeb, Trading in the Zone by Douglas, and How I Made 2 Million Dollars in the Stock Market by Darvas.

StockTickr: What technical indicators could you not live without?

Joshua: Price and volume. Without volume, I am screwed. A price pattern is great but without volume I have absolutely no clue if the big boys or the dumb-money is moving the stock. Big powerful moves on low volume usually fall under their own weight. But with volume you can see if the buying is powerful or not. You can’t be an elephant but you can follow them. There will be another TASR, in the next bull market but the price pattern alone will not help me find it. I need the volume so that I know mutual funds, pension funds, insurance companies, and banks are loading up in the stock. Besides volume, I need the 50 and 200 day moving average and 50 day volume average. I have to see the historical support areas and the reference point to volume so that I know if the stock is being supported or if they are going to let it drop. Price, volume, moving averages; that is all I need.

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

Joshua: I have to say since the year 2003, the VIX collapse has made it very hard to find stocks that produce 500% to 1000% gains. In 1998, 1999, and 2003, that was not a problem as many stocks would breakout from gorgeous chart patterns and produce huge winners, after the downtrends were over and a new bull market would start. From 2004 to 2007, I was very happy to just find multiple 300% winners. And after a few years of that it has become tiring. The great news is that the VIX has recently re-entered a higher trading range, HOPEFULLY, taking it back into the 1997-2003 range that I have been used to my whole life. 2004-2007 wasn’t impossible to make a ton of money but the stocks like ERS and BOOM that produced 500% for me could have produced a lot more with a higher VIX. If the VIX was where it is at now back then, BOOM and ERS would have been 1000% stocks. So the low VIX has hurt.

But the worst one is Regulation FD. This now doesn’t allow companies to leak info about earnings that used to show up on charts. That is why you have such HORRIBLE gaps higher and lower now that you did not have pre-Reg FD. It is a stupid law and should be eliminated. It has definitely hurt chartist during earnings season.

StockTickr: How have you adapted?

Joshua: I just accept the fact that I am not going to make as much money now as I was between 1997-2003. From 1991-1996, the VIX was doing the exact same thing it was doing from 2004-2007. But now, thankfully, the VIX is back into the middle of its historical range and if the index is reverting to the mean it is going to be a great next few years. But if the market does not sell off further, taking the VIX to 40, I am afraid we will be right back below a 20 VIX and once again you can forget about getting any 1000% to 2000% returns. They simply are not going to show up, with this kind of complacency.

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

Joshua: I have been doing this since 1996, I have owned over 60 stocks that have made 300% gains or higher since then, and I have studied the best stocks in the stock market going back to 1880. Since 1880 to now, every single year, every single decade, every single generation, and yada yada, the exact same characteristics are in the best stocks. The greatest stocks of the 1890s, 1930s, 1970s, and upcoming in the 2020s, all have built the same similar chart patterns and have all had the same characteristic which make up the CANSLIM system. After seeing the greatest stocks of the 1900s-1950s setting up in the exact same chart patterns and making these HUGE moves, just like the 1950s-2007 best stocks, it is clear that this is the greatest way to invest out there. AAII is tracking somewhere over 60 different strategies since 1998 and the AAII screen has produced a return with the CANSLIM system of 1530% to the SP 500s 54%. Now my question to you is why doesn’t everyone trade like this? Because it is too hard for most. Most will not do the necessary work to learn how to find the next 80,000% gain in CSCO.

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

Joshua: Be patient, don’t gamble, read books. Start small, do it because you love the game not to get rich. This is not something you want to get involved in if you are looking to get rich quick. If that is your mission, you will fail. The greatest traders of all time loved what they did. I love what I do. If it wasn’t for surfing, I would probably do this all day long. But thank God, for now (my gf is going to make me move some day) I live on an island so relaxing that I never want to do anything stupid with my trading. By staying relaxed I am always in the moment and never marrying any of my positions. Never fall in love with a stock as it is a piece of paper and remember the only good stock is a stock moving higher. If you buy a stock and it falls 20%, you do NOT buy more, you dump it!! You are wrong and move on. While some people wait for their stocks to turn around, many stocks will make 50% plus moves during the time when your stock loses money. Never throw good money after bad. But the most important thing to do is to ONLY invest with the trend. If the market is moving up, you go long stocks. And when the market is moving sideways to down, you stay in cash. Only once you learn how to make consistent money going long stocks should you even consider going short. However, I remind you, nothing is more important than patience.

StockTickr: What do you like best about trading?

Joshua: I can travel to anywhere in the world and as long as I have an internet connection I can make a living. I can go on surf trips all over the equator (no cold water please) and as long as I have a way to connect I can look at my beautiful charts and just love my life. Making my own hours, making a TON of money in strong bull markets, making good money in strong bear markets, and staying in cash in wild markets like this while everyone else goes nuts just feels great. I love being in control of my life and I thank God in Heaven every day that I get to live my dream and help others now make a TON of money to. There is nothing in life as great as being a professional stock market investor. So many try this game and fail that when you are doing so well at it it makes you feel very good. But what makes it even better is knowing that the goal of trading for a living while living on a beautiful island full with warm weather came true at such a young age. I don’t know what else I would do, if I couldn’t look at my beautiful charts. I am sure it would be something in surfing but honestly that doesn’t sound nearly as good as getting very long LMLP in 1999 and watching a 1,300% gain establish itself in 6 months while doing nothing but relaxing and surfing at my favorite breaks. The surf on Maui might not be that great but doing this for a living here is simply a dream come true.

Related posts:

1. Interview with Declan Fallon
2. Interview with Matt Davio, Misstrade
3. One Question Interview with Dave Landry

Read on for more about how Corey trades, how trading is a balancing act, and a couple light-bulb moments for his trading.

(Corey mentions that he’s a TradeStation user – StockTickr has recently added excellent support for TradeStation.)

StockTickr: Tell us a little about yourself, Corey.

Corey: My name is Corey Rosenbloom, and I’m a stock market addict! Seriously though, I grew up in north Alabama and currently live in Huntsville, AL, known as the “Rocket City.” I entered college intending to become a psychologist, and became very active on campus and also became a student teacher for psychological statistics. I also became fascinated with politics, and picked up a double-major in Psychology and Political Science, and completed my Masters in Public Affairs with a Business minor not too long ago. I was able to do a little work in DC at that time as well.

While in grad school, I worked as a college recruiter full-time, which allowed me travel about the South and North East and allowed me to meet a wide variety of people. I was also able to develop my passion in the stock market during my free-time as well, trading during the summer, when the workload was very light.

Currently, I trade my own accounts along with a family account, and provide education and analysis through the Afraid to Trade blog and my consulting and educational mentorship opportunities.

StockTickr: How did you get started trading stocks?

Corey: I can’t remember not being interested in the stock market as a hobby, and my team won a high school stock market contest which further deepened my interest. I can remember being fascinated with the “short-side” of the market, and the possibility of making money when the market declined. Not long after that, I met with the family financial adviser and began long-term investing in mutual funds selected by the advisor. I initially approached investing from a fundamental perspective, looking at valuations, P/E ratios, growth trends, etc and did relatively well until the 2001-2003 bear market.

I then began to delve more heavily into the educational side of trading and investing, discovering technical analysis, and I remember being absolutely fascinated by that new concept. I began shifting my approach to technical swing-trading using momentum stocks around 2003, and I thought I had it all figured out and I was about to quit my day-job and switch to a Business Masters program and trade my way to easy financial fortunes! I couldn’t figure out why more people weren’t interested in this. A little learning is a very dangerous thing in the markets! I got a group of friends together and we started analyzing charts nightly and trading 1,000 shares of these lower-priced stocks as both day and swing trades.

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

Corey: Yes, and my horror story made me who I am today, though I had no idea at the time it would have that effect. My little group of friends had helped me trade my account up 25% in about two months. Thinking I was invincible, and thinking I had a sure-fire stock that was going to double from $12 to over $25 within the next few weeks, I doubled my normal 1,000 share position and bought 2,000 shares on margin for the first time and ø you guessed it ø my sure-fire idea blew up in my face. I bought on a Friday, suffered a $3 decline that day ($6,000 – a small sum in retrospect) and agonized mentally the whole weekend, questioned my reason for existence (very overdramatic) and finally closed out the trade the next week after blowing about 60% of my (admittedly small) account. The trade cut to the core of my identity and dreams, which was much worse than the financial loss. Of course it was money I couldn’t afford to lose! What else do newer traders use? So I swore off trading and decided to be a “buy and holder” because my financial advisor had no sympathy for my trading loss.

That lasted about four months. My passion for trading wouldn’t die that easily, and I chose to approach the financial markets and trading from an academic standpoint, and decided to learn everything I could about the markets (this is similar to the pathway described by Mark Douglas in Trading in the Zone). I attended conferences, bought educational courses, read blogs, and paper traded for the next year or so (including a minor stint at options trading) to get myself prepared like a professional. I shifted my focus from seeing trading as a way to build instant wealth towards a more professional, business-like, career path that would develop over time. Of course, education alone does not make you a good trader, but that was a very difficult lesson for me to learn because academic success always came naturally to me and I expected the market to be the same.

StockTickr: Do you trade for a living now?

Corey: I do as an independent trader, but not all of my monthly income is exclusively from trading any longer. I began trading full time in late 2006 after trading part time since 2002. All of my income is market related (whether by analysis or education), which has taken the pressure off paying the monthly bills with trading profits alone like I had experienced for over a year. It’s really no fun not knowing whether you’ll make your monthly expenses or not. In trading, sometimes you don’t, and there were a couple of months in a row early on where I didn’t. We trade much more conservatively when the pressure’s on, I’ve found, and I’m already a naturally conservative trader by personality.

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

Corey: While I’d love to discuss 100 lessons, I would point to three “A-Ha” moments in my education as a trader. First, was learning the classic price principles as explained by Linda Raschke (which are actually principles from Charles Dow, Richard Schabacker, Richard Wycoff, and other “Fathers of Technical Analysis.”) Those guide me in every trade I take or every market I analyze.

Second, I discovered the concept of Sector Rotation through Toni Turner, Dr. Peter Navarro, and Martin Pring. I also learned of Inter-Market Analysis concepts from Pring and John Murphy. Those really allowed me to organize or structure the market from a feasible perspective, and break it down into related, manageable components. I would point to this discovery as my major “light-bulb” moment.

Third is the psychological insights from Dr. Brett Steenbarger and Mark Douglas. Due to my background in psychology and research, I related well to what Dr. Steenbarger teaches in his blog and book Enhancing Trader Performance. The way Mark Douglas presents the evolution of a trader and describes how fear develops and how to restructure your thinking to put yourself more in line with market truths (in both The Disciplined Trader and Trading in the Zone) revolutionized the way I took on risk and traded.

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

Corey: I actually trade two different styles in my accounts. I stay on a slightly larger time frame trading sector and ETF trends according to the Sector Rotation Model that can go on for a month or more, but I’ve been shifting more towards intraday futures trading, specifically the Dow-Mini contract, ever since the market picked up in volatility. The math of the Dow Jones Index and the Dow-Mini contract make more sense to me intuitively, and so I almost exclusively trade either that contract or the DIA (Diamonds) Exchange Traded Fund for these types of trades.

The majority of my trades are now taken using classical analysis techniques, price principles, and momentum principles. I utilize the 20, 50, and 200 period moving averages as well as identify swing highs/lows and other price projection targets through patterns or projected swings. I also identify momentum divergences or momentum bursts (impulses) for trade set-ups and risk management.

If I trade individual stocks, (I mainly focus on ETFs) I focus on a top-down approach beginning with the market, drilling down to strong sectors/industries, and then focusing on key stocks with strong fundamentals. I still can’t shake my early affinity for confirmation through fundamental strength.

I’ll typically trade two to five times per day, focusing on the morning session, and will hold a trade for 30 minutes to two hours if need be. Strangely, despite all my knowledge I’ve learned, what’s made me the most money these last few months has been simple gap fade trades and classic bull and bear flag continuation patterns.

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

Corey: I’ll focus this on the intraday futures trades. Each trade I take has a specific price target and stop-loss level built into the pattern itself. I limit myself to a handful of set-ups, including divergence trades, the “Impulse Buy” and “Impulse Sell” trades, gap fade, pattern break (usually a consolidation triangle), or the “Sweet Spot” Trend Confirmation Zone. I know my risk and what to expect for each trade (if it’s working or not) and I try to overrule my conservative nature to exit a trade before it hits either my target or its stop if I’m feeling anxious. Generally, I play for small, high probability targets and rarely if ever trail a stop for an exit. I utilize time stops on most of my trades as needed, because most of my trade set-ups either work right away or the original reason for entry slowly dims.

StockTickr: What 3 books do you recommend traders read?

Corey: Edwards and Magee’s Technical Analysis of Stock Trends (vol 9) is an absolute must.

Dr. Brett Steenbarger’s Enhancing Trader Performance helps you burst some of the prevailing myths about trading and gives you a set of goals and exercises to improve your evolution as a trader.

Third is a tie between Jim Dalton’s Markets in Profile and the book everyone recommends which is Mark Douglas’ Trading in the Zone.

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

Corey: Oh gosh I really hate to choose since there are some stellar blogs out there, but I always read Dr. Steenbarger’s TraderFeed because his focus is similar to mine and his insights are top-notch.

Dr. Bruce Hong’s Trader Psychology blog is up there for the same reason, though Dr. Hong delves deeper into the clinical side of emotions and psychology.

I always check TraderMike’s and Charles Kirk’s links, and analysis from the Big Picture. I really can’t list my top three since there are about a dozen that I haven’t mentioned that I would love to place in my top three. That’s probably the hardest question I’ll have to answer! Answering a question about my Sharpe Ratio or some other trading statistics would be easier!

StockTickr: Do you keep a trade log and how important is that to your success?

Corey: I keep logs of my swing and longer term trades, due to the work that goes into selecting them and the variables that influence the trade, but I don’t do as much logging for my day trades as I used to. One thing I try to do is write each intraday chart for the DIA on the 5-minute and 15-minute chart and highlight what I consider the “Ideal Trades” and then compare where my trades occurred (fills, stops, targets) in the backdrop of hindsight. Each day, I get better and seeing where my actual trades fell on an “idealized scale” helps build visual pattern recognition and experience. I often post these “Idealized Trades of the Day” on the blog for all readers to see, but I keep my trade logs online. I no longer do extensive Excel charts and extensive statistics on the data from my intraday trades because I learn and improve visually, rather than seeing numbers and deep statistics.

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

Corey: I’ve been charting since 2002 and have seen wild volatile down markets turn into flat, creeping up markets, to a large bull market and now we’re seeing large volatility moves (including 400 point Dow days) both up and down. The market of early 2008 is more difficult than the past because I think we all were lulled into more stable markets and are having to re-think our trading and reduce size (for most of us) as the markets pick up volatility, where 100 point Dow days are actually normal, rather than shocking.

For me, I scale down position size during volatile times, and try to increase size as I build successful trades in flatter, more stable times when I’m aligned better with the market. Also, I’ve been forced to place stops further away from my entries, which has been psychologically difficult for me because I love to hone-in on low risk, high reward trades, which means my stop is often very near a zone that I believe will be an inflection (or reversal) zone. A large number of stops taken followed by the reversal I expected have forced me to reduce size and place stops further away from entry on virtually all of my trades. Iøve also switched from comfortable swing trading to more aggressive intraday trading, and Iøm feeling most confident recently in the shorter time frames.

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

Corey: I use TradeStation, which allows a whole host of opportunities to create, program, and test your own strategy, and once I got the software, I spent days and weeks testing out virtually every parameter I could. It was so exciting to me. However, at the end of the month, I had all these strategies that seemed to work and when I tried to put them together, the aggregate system became untenable. I eventually settled for the simple principles of price behavior and edge development through risk management. I went back to the basics from the “Fathers of Technical Analysis” and began to study and test simple strategies and to my surprise, they worked better (for me) than complex, multi-filter systems. Prior to TradeStation, I also would print out 50 or so charts each evening and hand-annotate them based on what I thought the indicators were saying. That experience ø hand annotation of thousands of charts – helped instill price patterns to a more intuitive part of me that helps me to this day. While I don’t print out that many charts anymore, I do annotate many charts for students, and teaching has caused me to understand deeply the concepts of trading, edge, risk management, trade setups, and the like. I am purely a discretionary trader, and I adjust my approach based on monthly analysis of trading results and stay with the strategies I’ve learned and developed over the years. I occasionally test out new ideas, but I’ve learned to focus on a handful of set-ups and strategies, rather than trying to find the ideal or perfect one.

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

Corey: Trading is so much harder than you’ll ever imagine, and ø contrary to what you might think – it is NOT an effective “get rich quick” scheme. No matter how easy it looks, it’s not until you endure a trial by fire. It may be controversial to say, but I really think a “forced awakening” or a major negative realization such as a significant loss to shake you to the core helps you more than anything on your journey to become a trader.

If I had to sum it up in one word, I would say trading is about balance – between greed and fear; between overtrading and undertrading; between too many indicators and not enough; between watching too many stocks/markets and not enough; between watching too much news/reports and not enough; between reading too many trading books and not enough; and between so much more. It’s so easy to get scared by trading, due to the difficulties and the mental games we play when real money is on the line and we’re losing it. Also, the markets are not as predictable as you might assume, so success really comes down more to managing your risk, rather than excellence at trade selection or prediction.

Honestly, know that there’s a steep learning curve, practice in simulation mode, train your eye to spot patterns, and focus on fewer set-ups (or indicators) rather than more later on. Master what you know before branching out into something new. I seriously believe that if you can master a simple pattern like a bull or bear flag and focus just on it, you can do better as a newer trader than if you tried to learn everything at once and be a master of it all. Give yourself time and let yourself make mistakes and learn from them, rather than agonize over them.

StockTickr: What do you like best about trading?

Corey: I know it’s cliche, but I love the challenge, the mental gymnastics we do, and the results that occur instantly (whether good or bad) from our activities. No other business is like that. I like the interplay between markets, and trying to figure out how a development or trend-change in one market will create a cascade effect in others. It’s fun to try to play markets against each other like a big game-board!

Although it’s taken time, I’ve come to view trading as a game of probabilities, which has taken the stress off of my perfectionist “need to be right” tendencies. I try to approach each day with wonder, asking “What will the market do next?” and know how much it will cost (through stop-losses) if my perception of market activity is wrong. I love the academic side of the market, and the strategy development side, and hope to keep a larger picture than the day-to-day grind that we must endure sometimes. I thoroughly enjoy explaining what I’ve learned and what I’ve experienced to people, and watching them have new realizations as they learn new concepts or thoughts they haven’t had before. I love having those realizations myself!

StockTickr: When did you start your blog and what prompted you to do so?

Corey: I kept a private informational website for myself and my family, and I had been reading a few blogs and information sites for about two years prior, but when I first started trading full-time, three or four months went by when I was completely isolated in my home office, watching the market from open to close and then doing testing and more studying outside market hours and it was horrendously lonely. I initially started the blog as a way to formalize my strategies and reach out to others socially while both providing and receiving information. I just celebrated my one year anniversary on March 1st, 2008 (which I consider the official launch of the blog in 2007) and I cannot express how appreciative I am to all the readers and bloggers who have been so supportive of me and the site. It has received far more attention than I ever dreamed possible.

I also felt I had valuable experience, in terms of approaching the market with enthusiasm and idealism, being scared of it terribly, and then slowing gaining more and more confidence as my experience and education grew. I also wanted to reach out to others who had been burned similarly by the market and try to assist their journey to becoming successful traders. I sort of wanted to serve as a net to keep them from leaving totally disillusioned. So many people get so close to figuring it out and then they just give up. While trading certainly isn’t for everyone, it can be learned with effort and hard work, combined with a solid educational foundation, provided you find a market or strategy that lines up with your skills, interests, and talents. I truly believe it is a performance skill that can be developed which has a progression from beginner to novice to proficient to expert to master. I’m hoping to be of help through the blog and upcoming website educational component both to myself (through teaching and mentorship) and others as they progress on the learning cycle from one skill-set to the next.

StockTickr: Thanks, Corey!

Corey: Sure, Dave.

Do you want to make more money in the markets? Sign up for StockTickr and get a free performance report that shows you where you can improve.

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)

Do you have suggestions for other traders you’d like to see an interview with? Let us know!

Related posts:

1. Interview with Matt Davio, Misstrade
2. Interview with Tom C. from Trader-X
3. Interview with Alan Farley