Hi everybody. Welcome back to the weekly segment that Mike and I do where we go over you guys comments and questions and give our 2 cents on that and see if we can add to it, maybe expanding upon it and give you guys some feedback. With that said, thank you guys so much for all the support recently on the videos. We really appreciate the comments, everything you guys do to give us some topics to speak about. We really appreciate that and everybody’s questions just keep ’em coming. We seeing them, it’s good for us. Direct connection to Mike and I and let’s get into today’s topic, which I wanted to say was really, wait, hold on. Close my window. I’ll cut it out. I’m going to do the other stuff too. My dad’s on my patio right now and before we get into today’s topic, make sure you guys like and subscribe.
All comments, help the algorithm and if you haven’t already clicked a notification as well so you get notified every time Mike uploads a video. And with that said, we can get into today’s topic, which is the type of market going on right now. You and I were having this conversation privately and I thought it would be an interesting topic to bring up on the video and you were saying how the market is more kind of sporadic, it’s not really making any sense, there’s no follow through, and obviously we talk a lot about the different types of trading, day trading, swing trading and all that stuff. And you were saying this is more leaning towards the day traders market. So just give me your thoughts on that and I want to hear what you have to say.
Yeah, it’s really eight names or so that are kind of driving the whole market. It’s not a broad based kind of rally market where there’s health across lots of names. Obviously interest rates have a lot to do with how that all plays out and the threat of not the physical threat, but with the threat of the government hiking rates, again, they talk about being dovish and hawkish. I don’t even know what half those terms mean to be honest. I don’t really pay attention to it. I just look at the direction. If it’s going up, I buy it, it’s going down, I stay out of it. But even in the commodity space, there’s been a lot of false starts. There’s been things that have broken out lots of V bottoms which are hard to trade, things that are turning on a diamond, then moving. So it’s a very weird market.
What does, I know what weird mean, but in the trading world, they say it’s a make it and take it kind of market these days because can’t, there’s been so many breakouts that don’t have follow through. You find yourself getting into something and you know might not even be fully loaded in the position that you want. Goes up a little bit, not enough to add more, but also not enough to take profits and then it can come right back and hit your protective stop and knock you out of the trade. So you have to make an adjustment. And for me, I know would, if someone said on a wit, if I was on a witness stand and someone asked me, I would say my personality. I’m more geared to being a position trader. I like to build into something and then hold it. I’ve had commodity positions for three months.
You see, I’m already looking at March of 24 sugar for example. I don’t want to be in and out and in and out or be in a winning trade and then have to roll the contract as we say to the next month. You’ll roll from Julys to October. October goes all the way to March. I like to get into a position and sit on it and let the market do the work for me. While I have hopefully a very levered position. I’ve been knocked around so much on things where, what was it? March? No, April I was down, I think it was down two thirds of 1% mostly because I couldn’t get into anything. Everything was going up. It was a few positions that went up, but then when I added more and then adjusted my stop, I got taken out. So didn’t really lose June.
I had to make some adjustments and think more like a day trader, which is not how I’d like to act. I can do it, but I would much rather do less work for more money. You see what I mean? I don’t want to have to come and say like, okay, here’s my monitor and it’s my hot keys and all that kind of stuff and think about making money every day. I want to make money on average every day, but I’m not concerned with having a green day. That’s a mind fucking thing that people talk you into and then you think because the person’s important that which they’re not. Nobody’s really important except you have to make money on average. But I don’t take it personally if I’m down a particular day, but I do have to make adjustments for the type of market that we’re in because ultimately if you don’t get paid, so it’s been, I guess it’s not that I don’t like how it feels, I just prefer I’ve evolved to a point where I can take a very, very, very thick skin.
I have a cast iron stomach and I like to think of commodities more as an investment, but the market hasn’t really shown us that recently. Yes, beans have had a sharp move, but who knows if it’s going to sustain. Same thing with sugar I suppose, but who knows if it’s going to sustain. Usually I like to see things move a little bit more, which I guess leads to the question, I don’t really want to become a day trader. I don’t want work, want to work as little as possible and make a lot of money from a Pareto efficiency standpoint. I suppose over the years I have learned to trade options. I have learned how to trade stocks, I know where my skillset is. But think about it, if you look at the game valoran, what you’re an expert on and you have a five person team in the game, you might have six or seven people on the overall team. Five are playing. Is there, you know, tell me at a level, are there people who play every position or do they tend to specialize?
Yeah, usually you want a specialist. Yeah, I think I mentioned this about a pro player a little while ago. I sent you a video on him actually.
He’s Arabic guy.
No, he’s Brazilian.
Oh yeah, yeah, yeah,
Yeah. So that means quotations in Portuguese. But this guy’s an animal. He’s capable of switching roles because he’s just so gifted mechanically and his intelligence and positioning is just vastly superior to most people. But you usually want a specialist because the utility in that game is so complex. It’s not just press E and then you just blow up the bomb side or whatever. It’s not like that. There’s so much effort that goes into making sure they’re a line and you literally have to line up a cross hair that is different for every person because you make your own. You have to line it up with a specific pixel, throw it at a specific time, and then make sure that your teammate executes at the exact right moment so they don’t get flashed, but everybody else on the bomb site gets flashed. It’s ridiculously complex and so people at the high level do switch sometimes, but it’s only on a specific couple of maps.
It’s not really like, Hey, this guy who plays controller all the time, let’s get him on dualist. Why not? It’s also because the mindset are totally different. I was talking to a player about this the other day and she was being asked to switch roles by her team and I was like, that’s a terrible idea. Because her mindset is not let me get in there and start fights. It’s not let me carve the map. She’s not super map aware that it’s more of let me help my teammates as best I can. And that’s like the best setup for the initiator role. You have each role with a specific psychological framework and they all have specific tendencies. Doist has to get in there, initiator sets up their teammates or gets information. There are two types of initiators. There’s flash and recon, initiators and then controller. You literally have to carve the map and be so spatially aware that it’s just, it’s ridiculous.
It’s absurd. So it’s like saying, Mike, remember that guy in middle school who never spoke to anyone? You don’t even know the kid’s name. He sat in the back of the class. Well, let’s get him out in front of a full auditorium full of people and let’s get him dancing crazy to usher or something. It’s just not going to work. Yeah, you don’t want to do that. So Understood. Yeah, there’s just a specific framework that each person fits into and you can adapt it a little bit, but it’s like are you getting the best performance out of that person? Yeah, it’s map dependent. There are other factors around that in some situations maybe, but others it’s like, I don’t know.
Yeah. So yeah, I can see that. I think in the trading world it’s true too. There are a handful of people of the millions who do this, most of whom fail. There are a handful who become really good at trading one style, one asset class, one timeframe. Then even among those folks you can practice, it all comes down to practice and repetition. If you have a good feel, you can develop more of a good feel for something else, but that takes so much time, it takes so much trial and error and I think what ends up happening is folks typically get comfortable with one style of trading and they stick to it as well. They should, but you also have to take into account that the markets are kind of morphing on any given day.
They are living breathing mechanisms you see? And so as people’s tastes and preference change, as the world economy changes, as the value of the dollar ebbs and flows, as interest rates change, sectors rotate, there’s all of that. So you have to be very fast on your feet and very nimble to evolving. Now with day trading, you might be just looking for the theme of the day, what’s the catalyst that’s going to make something move with position trading similar, but what you’re looking for are fundamentals that are going to sustain and catch the beginning of the move and hold it for as long as possible. In trading speak, a lot of people talk about stage two breakouts. So then the key is once it gets through stage two and you see some consolidation is it’s stage three or really the beginning of another stage one where you’re going to see the thing ratchet up and continue to go f go further. I’ve had a pretty good knack and kind of figuring that out and not feeling so bad about sitting through some of that chop and that consolidation. Some people call it bases.
It’s hard to do here without charts and I too, I don’t want to get into being a chart reading show cause it’s a fucking snooze. I know folks who are for that stuff, but I mean, come on. Anyway. Yeah, I think it makes sense to specialize and to focus on one thing and then to practice it over and over and over again. Also too, you have an in-game leader. That too is a whole other mindset that’s not, doesn’t seem like that would be a beginner’s role even if they have a sharp mind. You have to put in a lot of hours, lots and lots of hours
And you have to be more aware than everybody else in the entire game and you’re calculating strategies ahead. It’s my introduction to people explaining the in in-game leader role is learning chess for the first time, how the pieces move around and then that’s how you play the game. You finally figured out what your role is, but if you want to be an in-game leader, you have to think openings, you have to think mid-game to think ending strategies and you have to memorize all of these positions and be able to pick up on each player’s tendencies. You, you’ll see other teams and they, they’ll have tendencies at the start of the round. I’m thinking, okay, what did they do last round? What did they do the round before? Yeah, what’s their economy look like? Where do I think they’re going to move on the map and let’s create a plan around that to punish them for their tendencies and see if we can move forward on one of those. Because sometimes you’ll have somebody lurking on the map, which basically means their team is either holding something or they’re trying to move on a specific bomb site and then they’re off basically on the other side of the map trying to see if they can find somebody in catch ’em off guard and I’ll say, okay, well this guy’s been going mid every round, so let’s form a pinch flash and let’s catch ’em off guard and just completely take out their alert because that denies them information just taken a player off basically for free.
Those are the things you think about. It’s like how are we going to move forward? What’s the strategy for the next five rounds? Having set strategies, it gets really complicated as an in game leader
And so you’re talking about nailing and killing one of their players, so now they’re shorthanded, right? They’re doing five on four and five, so they’re at a disadvantage because they can’t cover their flank.
Exactly, yeah. And the guy who is, who’s usually lurking that is a sentinel and sentinels have abilities, a trip wire or some kind of stationary recon device. So if somebody walks by it, it’s going to let you know. You’ll get an alert saying, whoa, whoa, whoa. Some guy just walked over in a lobby. Now we know he is over there. He’s trying to advance on us. We could either take him out or we got to move quick. There’s so much utility and information that you have in the game and it’s really hard to devise a strategy around it sometimes unless you are ridiculously aware.
I see. Now you said this girlfriend of yours was an initiator. I like when women initiate, it’s not typical.
Yeah, she’s a flash. She’s really good at setting up other people. Really. Yeah. Yeah. She, it’s like her best strategy she gets, she’s in that sense, I understand that mentality because when you have that mentality of setting up other people, you really just haven’t found your own identity yet. Initiators, they have utility that can set other people up, but eventually they’re going to have to be mechanically comfortable on their own and she’s really good. She’s just, she gets caught up psychologically of like, oh, I don’t want to make my teammates upset by taking a fight and losing, so I’m just going to set up other people. It’s just a whole confidence thing. But eventually that’ll go away. It’s just about getting each player comfortable first and understanding their identity
And she has to let go and just focus on what she can do.
And there there’s a time and a place for setting up your team, but you have to be able to, and this is the hardest thing about play, is you have to be able to separate yourself from your team at certain points and be able to pick it back up. You have five people on your team and they’re all talking at the same time. They’re all relaying information and it’s fast, it’s loud and you have to be able to systematically pick apart what is important for you and what you need to make a plan going forward and follow the direction of your endgame leader. Cause if you disobey your endgame leader, the round is basically lost
Cause that’s like the ringleader
And then people just aren’t on the same page. I I always say to people who are trying to learn to play with an endgame leader, it’s better to listen to your endgame leader even if they’re wrong, because at least you’re all on the same page. You have to form that trust as a team. And if you don’t then there’s no way of winning high level tournaments. There’s just no way because everybody at the highest level, they have that trust with each other, they follow their endgame leader. There’s like a pecking order. It’s like I see in game leader God and then everything else below, you have to listen to your in-game leader above everyone.
Wow, that’s wild.
Yeah,
Well in trading you really don’t have that. I mean, I know there’s people on desks and they talk through headsets that would distract me. I don’t want to work well in that type of environment where I had to listen to other people chatting even if they were sending out information that they think could benefit me. I like to do my own homework and I wouldn’t want to put on a trade because someone else saw it first and they brought it to my attention tried. I had such a bad experience with that when I was starting out. I know that it’s popular to talk about depending on what kind of firm you’re at, where people might be sharing those kinds of ideas. But I would find it too distracting to have to do anything else than just focusing on my own risk management. And I would be like, listen, it’s almost like the scene from the movie Wall Street where Marv kept coming in asking for tips and he’s like, look you, I’m tired of being your babysitter.
Basically. You got to do your own homework. I would much rather live and die by my own sword than to have to do that because it’s exhausting. It’s exhausting. It’s just my personality type. It’s not better or worse than anybody. I’m just saying I need quiet when I get up in the morning, I do not put the TV on. I mean, I get up so early, the dog is still sleeping, you know what I’m saying? I like to just do my own thing and block out everything. I don’t have music on, I don’t have the TV on. I’m not looking to read stuff. I really just have come to a spot where I can trust the price and basically leave it at that and then I’ll have to make my decisions accordingly. Again, usually with stops, I move my stops around a lot. I adjust them during the day.
This market, you’ve had to have been very quick to adjust your protective stops. Cause when the markets do reverse, they tend to move very sharply and oftentimes you wouldn’t. If you’re trying to do it like a video game, you don’t really have the time to do it on the fly. Two, I have found in myself even at this age now that I don’t want to have to make decisions on the fly that way. Very well studied and I know the night before where I know where my levels are and I know where I want to get in and then once I’m in, I know where I want to get out and I don’t really waiver on that so much. If you’re trailing stops, you can trail structure, you can trail with a percentage or an A t R based stop to protect your capital, protect your gains.
But at that point, I don’t like having to make decisions on the fly that I can’t tell you the last time I found an idea during the day and then put the trade on. I almost always have it on my radar the night before. And then this is just a way that I exercise my own discipline in that it’s like going on a date versus going out and picking somebody up when you’re there. I kind of have the agenda set up long before, because again, think about my background. I knew when I started that I was in slightly impulsive, but that was from a standpoint that I knew coming out of a working class background, I had to make the attempts. So I was deliberately trying things as opposed to sitting around and waiting for the game to come to me, which of course was never going to happen.
So I had to make up my mind and say, there’s part of me that has to be somewhat fearless to at least jump head first into the game because it’s not like I can take the game to Wall Street. That’s never going to happen because you’ll you try that, you’re going to get crushed, you’re going to get buried, but you have to jump into the game and then figure out, it’s like if you don’t know how to dance, you still have to walk out into the middle of the floor, try to get a feel for the music. You’re not going to learn standing on the sidelines. And so that little bit of impulsiveness help me get into the game very, very quickly. And that allowed me to fail fast. That allowed me within six to 12 months to know that I didn’t want to be in the foreign exchange market. Someone said, who’s a good enough guy makes a lot of comments that you know, don’t have to trade foreign exchange 24 hours, but that’s an incorrect statement. As long as the market’s open and you have a position on, you need to manage risk.
And if the market’s moving up, then I continually have to adjust my stop higher it. You have to be hypervigilant and I just don’t want to have to be on, I didn’t want it then and I don’t want it now. And I’m not a date trader, so I don’t want to be in the market early in the morning, make my money and then be done because opportunity costs, I could be missing opportunity. So I like it when markets actually close and there’s no aftermarket trading cause then I get a break, right? Cause otherwise it’s very, very intense. You use a lot of energy, you have to be hypervigilant on all your positions and I don’t typically automate things. So that’s just for my taste and preference. Does it mean it’s the best? It just means it’s the best for me. So I’ve created an ecology that works for me in terms of managing the risk where I typically adjust my protective stops and then I don’t sit and watch or try to jump the gun.
Sometimes I can say in retrospect, I was in some trades recently and I was adjusting my stops and I got knocked out. Then they came back up and this and that. So I, I looked at the things and the charts and I was like, well, could I have improved my exit? And not really, not for what it’s, it’s much clearer in after the fact, right? Because then you could see how things evolved. But before it happens, you have to trust your instincts. You know, have to trust your judgment, you have to trust your instincts and look at the science of it all. And I very, very rarely abandon the science of it all. I have really good instincts, but typically have come to appreciate putting in my stops, getting knocked out. The stocks that I was in this morning even are several dollars below where I got out.
So I’m generally, I’m not clicking my heels. I made money, but again, this isn’t the right environment for me. I can still make money because I have 35 years of experience, but to be frank, I don’t like how I’m behaving even though I’m making money. Does that make sense? I’m winning the game, but I wish the markets were different because then I could make more money for doing less work. But you have to adapt, you have to, well adapt, I guess is the best word. You have to adapt to the market environment. And if you can’t do that, and I say this even to myself, then shut up and stay out of the market because you don’t get to complain. Market doesn’t give a shit what you think about anything.
So you know, can sit and wait. I’ve done that too. I’ve sat on my hands and waited, but then I just figured it’d be better for me to evolve and to use some of those shorter term trading strategies. Again, it’s not what I want to be doing, but you have to do it in the shorter run to protect your capital and to make money. Otherwise you’re sitting there with goose eggs and I’m just looking at some of the charts here as we’re going through and it’s like I got out, it went down, it went back up, then it started going choppy and going sideways and I don’t want to be involved in that. I don’t really want to be long, something that enters a sideways market neither. I don’t want to be short something that goes sideways. I want it to pick a side and go.
And I was lucky today in that I had good exits. I would much rather, like I said, I would much rather have preferred to be into the names and stayed in the names, but I don’t like the choppiness that we’re seeing right here. But like I said, it’s life on life’s terms. I could either not trade or I could adapt to the marketplace, adapt new tactics and make money with what they show me. So I don’t advocate that you doing that if you’re newer, as Brandon was saying, even when eSports, you have to really pick a skill that you’re good at and then stick with it over time. I think you can evolve, but it takes a lot of trial and error, takes a lot of practice and it’s no different in trading and that means you have to be willing to risk real money. So that’s really all I have to say on it.
And just one quick thing, I mean there’s like a time to adapt your strategy for stuff. If you have the experience and you’re like a seasoned day trader and you’re like, oh, maybe I want to try swing trading or maybe I want to try holding a little bit longer and just see how far I can go. If the market’s a day trading market, that would be not an ideal time to do that. Or maybe it could be if you want to just try it out or whatever, and you’re okay with losing money maybe, but it’s like if it’s a day market and day trading is your specialty, why not just keep day trading and make your money that? That’s just how I see it.
Yeah, harvest the cash and I tried sticking to my guns through April and May and I didn’t really make lose. So then I went back and I, because I always do a postmortem and just say, okay, did I handle this right? Largely things are systematic and that I have set rules. I’m not really sitting there holding the thing up going, okay, is this a bullish pattern or is that a bearish pattern? They very rarely work that way the way you would expect. So you can’t really trust them the way you think. The marketers and the people on Twitter would tell you they can.
I was actually thinking that this morning there was a head and shoulders down that completely failed and didn’t play out the way you would think it would. But yeah, you have to make hay when the sun shines and see if that’s okay, particularly don’t like it. It’s not a good market from my style. And I’m certainly not going to go nuts and change and try to become something different, but it typically means I can’t add to my winners because the follow through is just not there. And I hope we can come back to it to that type of market. But right now we’re not there for the things that I look at. And so again, I could sit here and bitch and belly ache or I could just shut up and do what I know how to do. I think some of you out there who are just starting out, you have to pay attention to the market environment that we’re in because what you might have, you might be onto something like this is the saddest thing about trading is sometimes Wall Street eats their young, is that you might actually have a good strategy that works long term, but we might just not be in the right season.
You know what I mean? And so that’s a tricky part. That happened to me too. That happened to me a couple times in the commodities markets when I was starting out. So I had to learn how to adjust.
So much of this is about not, it’s not that you don’t want to deny yourself feeling your feelings. And if you feel fear, by all means feel your feelings, but don’t let them shut you down. Even s the best salespeople in the world will tell you when they’re asking a big prospect to buy a 10 million house, there’s always the feeling of, what about if they reject me? They say no, and I can’t overcome the objections. I’m going to feel fear, I’m going to feel all that. They certainly feel those feelings. They just don’t let the feelings stop them from taking the action. And so that’s kind of where I was even finding myself this past week and last week, especially come into Thursday and Friday of last week. So it’s not different for anybody. Doesn’t matter whether you have 35 days or 35 years. Like me, markets are always trying to change and I’m aware of what happens. I know July and August can be thin. I know there’s a lot of fear in the market, especially around equities. Commodities tend to be moving, but the alternative is to just stop. And that’s hard to make money when you’re not trading. But at the same time, if you’re throwing good money after bad, so that’s why this is so hard. It’s why most people don’t make it.
Yeah, yeah, for sure. No, I think we had some really good points this episode and some really good takeaways. Just kind of pick your process and pick what you’re best at, get good at it, and then kind of branch out maybe. Yeah,
Overall some cool stuff. I like how you’re adapting to the market even though you really don’t want to. It’s kind of cool. It’s not that you don’t want to, but it’s not where you’re comfortable, I guess is a better way of putting it maybe. But I think with that said, I think it’s a good time to close off the episode. Thank you guys so much for watching. We really appreciate it. Make sure you guys like and subscribe. All comments, help the algorithm. Click the notifications bell to get notified every time Mike uploads a video. And I’ll see you guys in the next one.
Take care. Thanks for being here.
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