158: Phil, @OzarkTrades – Short Hype Stocks, Long Farmland

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Sup! What's happening team? Episode 158. My name is Aaron Firefield. Let's get into it. The trader who you're soon to hear from is Phil Godeker, though some of you may know him better by his Twitter handle at Ozarktrades. Phil's been trading stocks for about fifteen years. He started young, in college, made a shitload of money in a short period of time, which then afforded him the luxury of never having to work a quote unquote real job.

Admittedly, Phil will tell you luck was a major factor early on, but nonetheless he's been abundantly successful and has continued trading full time, but now with a strategy, with rules and with an edge. Phil's way of trading, just to give you a bit of an idea, is to short parabolic moves on low float stocks which have been seriously hyped up, and when he senses golden opportunities, he strikes with real conviction.

In many ways, Phil is similar to Alex who was on the previous episode, except the key difference being Alex trades the long side of these moves, whereas Phil has found his niche in trading the opposite side, the short side. As you continue listening, you'll hear Phil speak about his early days and progression, his obsession with cutting losses quickly, and sizing up on those trades, which can make a good year a great year.

Plus some talk about strategy, timing, setups, and why Phil is set on filtering his trading profits into farmland, which he describes as boring investments. I'm gonna stop right here. Please relax and enjoy this episode with Phil Godecka. No, not a ton. Just watching uh you know, we're in the midst of earnings season, so small caps are a little slow. Just watching Kodak. And uh

Traded a little RGSC this morning and L T B R I held overnight, but uh that's it. O overall uh bit of a slower day. Okay. Do you have many earnings plays? Like are they a big thing in s the small cap world? No, not really. Um I I really don't play earnings plays really much at all. But when when you have you know, in the midst of earnings season, you just don't see small cap runners like you do, you know, like we have had the last several weeks. So um, you know, it's just something that happens.

You know, during earnings season small caps slow down and and that's kind of the way it is. So usually just kind of uh chill out a little bit more and take a little bit more time. you know, time off uh, you know, during those times. Right, save your energy. Right, exactly. Like we were speaking the other day, you you told me that you started trading uh while you were in college. How did that come about? You know, really I was in

you know, high school, maybe my junior, senior year, and I was kind of looking ahead to figure out what I wanted to do, what I wanted to be and, you know, the only thing I knew was that, you know, I wanted to make money. I mean, I was driven at that time. I I I worked. Um, you know, every summer and uh I the only thing I really knew was I wanted money and I thought, Well, what are the jobs out there that can provide that? You can

No, you can be a doctor, you can be a lawyer or and and those are all great, but they also come with a lot of school. And I thought, well I don't want to wait'til I'm thirties to have money, you know, and um you know, or, you know, huge student loans on top of that. So

You know, it was coming across to me that, you know, if you wanna work for yourself or be an entrepreneur, there's real estate or there's the stock market and you know, back then when I'm, you know, fifteen, sixteen, seventeen years old, whatever, I thought, Well, you know, real estate you you usually have to have money to make money. And you probably have to be a little bit older, but you know, as far as the stock market goes, anybody can open up a brokerage account at any time and

That's when I kind of thought then let's investigate the market a little bit. And I just started um reading on it, studying on it. you know, just different newspapers or articles and uh even our local business section, you know, in our local newspaper. And from then it just took off. I I was immediately interested. I mean it it immediately grabbed my attention. And um you know, this was back in the late nineties when the stock market was roaring and you were seeing all these dot com

uh tech companies just, you know, skyrocket and and the whole you know, the headlines were everybody's just making, you know, lots and lots and lots of money. So I was instantly

Instantly ready to go. I mean attracted to it, absolutely. Yeah. Yeah. And what was your experience like starting out? You were you were mostly a long trader back then, right? Yeah, so when I started out, you know, I didn't have um everything I learned or everything I knew I just

did it on my own from from from doing different research. I didn't I had no idea shorting was even possible. So I didn't really actually open my first brokerage account. I think I was a sophomore in college and I had saved up three thousand dollars that I made over the summer. You know, basically at that time I was a long biased trader. I was trying to, you know, still in school, so I was swing trading, mostly trying to kind of buy breakout.

and hope that I could hold them a couple of days, a couple of weeks, and uh, you know, kind of hope for the best. And at that time again, I was just studying everything that I could. You know, I was studying um, you know, different chart patterns, trying to find out

uh some patterns trying to find out what made a good setup. My sophomore year in college, I just slowly lost that money. It was three thousand dollars and I slowly lost that over the course of the year. Well the very next summer I worked again. I worked for my dad

He has a business here in Missouri and I worked for him over the summer and I I saved up another three thousand dollars and I kinda did the same my junior year. I slowly kind of lost that money. Um, just trading long. You know, I couldn't find any consistency, but y you know, I was still th the losses didn't scare me at all. I was so

um intrigued by the market. I knew there was wa there there were ways to make money and and ways to make big money and I didn't have the patience to buy and hold. I just You know, I had I I I was reading so many books and the Warren Buffett method of, you know, buy good companies and never ever sell'em and I thought, Well, I I just can't do that. I mean, I I want I want money and I want it, you know, now. I this is what I want to do. So

Um, you know, I I never gave up. And then my senior year, I I did the same thing. I I saved up money over the summer. I had about five thousand dollars. And then it was uh right at the very start of my senior year in college, maybe around August or so, I finally found out that you could short. You know, you could bet stocks would go down. And I thought, Well, hell, I'm great at that. I mean, that's what I've done the last two years. Everything I

You know, buy goes down. So, you know, at that time You know, after studying for two years I have seen so many patterns of stocks that have gone from five bucks to twenty bucks or one dollar to ten dollars or twenty to a hundred or whatever it is and there was a stock out there in August of my senior year of college, the symbol was Cafe C A F E

The name of the company was Host America and I can remember it like it was yesterday. They put out a press release that they were gonna do some sort of business with Walmart and some sort of partnership with Walmart and the stock went from about four or five dollars up to fifteen dollars and It's about a two, three day span and I shorted it at fifteen. You know, I shorted all I all I could. It wasn't much, maybe

you know, a couple thousand shares and the very next day the stock was halted and it was halted for a month. And I was on Yahoo message boards and I was reading all this stuff about oh they're gonna be bought out. And I thought, well, I'm gonna be wiped out. You know, I was scared to death. And needless to say, after a month, the stock went from fifteen and it opened up at five. So I had turned around.

Five thousand dollars into approximately, you know, maybe fifteen thousand dollars. So that just it just clicked. I mean it opened up my eyes and it wasn't so much The monetary gain that I was excited about. I was just excited because after two years, I had finally figured out something that can work. I mean, finally it clicked. So my senior year in college, I did the same thing. I just, you know, um shorted

you know, I guess you'd call'em overhyped or overbought stocks. I hit a huge market. I mean, it was an unbelievable run in the market at that time. And from that August to when I graduated in May, I finished with about a million dollars. So I turned that five thousand into a million right when I graduated. So

Um, obviously at that time I knew that, you know, yeah, I'm not you know, I I had studied accounting, so I graduated with accounting degree, but I thought there's no way I'm gonna d I'm gonna be an accountant. I mean I you know, this is what I'm gonna do and then you know, I just stuck with it from there. That's incredible.

S starting with five thousand dollars or once you refunded your account a couple of times, you had a five thousand dollar balance and you grew that into a million dollars, what sort of time frame are we looking at? Was that about twelve months? No, that was from August to May. Uh that was about nine months. Wow. From from five thousand to a million dollars in nine months. And I thought I was on top of the world. I mean from that point

It was incredible. But you know, again, at that time I had no rules. I had no money. Management, I was going all in on every position. No matter what. And that's how I grew it from five thousand a million. I mean, there would be no way to to to make that return if you're not risking everything you have. Now, so needless to say, when I graduated in May, I thought, well, hell, if I had just turned five thousand into a million in nine months,

In June, July, August, I want to turn that one million into maybe three million, maybe four. And that's when I'll have some big money. Well, needless to say, the market kinda turned south and that that that million went down to five hundred thousand pretty quick. So it was August.

And now I had lost 50% and it was uh you know quite scary. So what I did was I immediately took$400,000 out, I put it in my bank account, and I thought, well, hell, this is, you know, this is savings. I'm never gonna touch this.

It's in the bank and then I started trading again with a hundred thousand and I did that um for the next consistently for about the next three years or so. I just whatever I made at the end of every month out of a hundred grand, I just took it out, put it in the bank, took it out, put it in the bank, and then I had

You know, three pretty good years of making around a half a million dollars, you know, when I was you know, again, I was about twenty two, twenty three, twenty four um years old. Was there a part to this which ca which seemed kinda surreal? You know, it did. It it really did, but at the same time I had put in so much time. You know, when I when I was in college, to be honest, I wasn't the best student and uh, you know, I got grades good enough just to kind of squeak by and in every

spare minute I had, I was studying the market. I mean I really was. I was just I had stock screeners out there and I was studying every big winner for on a weekly basis, monthly basis, quarterly basis, yearly basis. I was just looking at those patterns over and over and over again until I was you know, blue in the face. So it was surreal that I had the money, but at the same time I had sp literally I had spent thousands and thousands of hours. So

The same time of it being surreal it was kinda like I mean finally it's clicking, you know what I mean? So it it would it you know finally it was making sense. And what was the reaction from like your friends and family when they heard about how much money you were making in the stock market?

Well, to my friends I never really disclosed it. I mean I did have um you know, a house before a lot of my friends did. I actually had a vacation house and I you know, I drove a I had a Hummer back then, a Hummer H two, so they knew I was making money. My family You know, was kinda w I mean, they were excited, but, you know, they didn't uh I I guess they I guess it was more of a surprise.

than excitement. And I did, you know, trade for my parents at the time and I still do today, so obviously they like to see their count go up a little bit as well. Um, but I you know, I I was never one to go around and say, This is look what I made this year, look what I made last week. I You know, for the most part I kinda kept it quiet, but I I think everybody was kind of surprised or intrigued because again you'd you'd have friends that say, Oh, well

Why don't you teach me what you do so I can start it next week? I got laid off and it's like, Oh man, I mean it you know, it it takes a little more than yeah just uh a a couple of drinks to explain what you do. Uh yeah. So from the sounds of things, from a very early age, you were very motivated to make money. Um and you were kinda somewhat impatient, right?

Yeah, you know, yeah, right, go ahead. Did this ever lead to any irrational decisions? Like when you look back on this on those early years, did you make some pretty crazy decisions? Oh, I mean looking back in my early years I made every decision you could make. Good, bad, irrational, um, impatient. You know, you y you know, I went through everything. I mean I went through every

failure every high, every low that you could possibly imagine. Because again, the market's the only thing I've ever done. I have never had a job. Again, my dad owns a business in Missouri, so I've always worked a little bit on and off for him. But other than that, I have never had a job I've done the market from from my sophomore year in college to today, which is um Was that thirteen, fourteen years or something? So um

So again, when you do something full time and you learn from your mistakes, yeah, I've been through I have I'm not saying I've been through everything, but I've been through a lot. So I have uh Sure. So tell us about how you actually lost You know, you made a million dollars and then you lost about half of it. How did you lose half of it?

Well, again, you know, I think I was very lucky to turn five thousand into million. I mean, I don't think I don't even know if I could do that again today. My bet is that no, I couldn't I couldn't replicate that. And, you know, the reason being, you know, is that You know, back then I had no rules. I would just put everything into one uh you know, one stock, one idea and kinda hope that it worked. And

you know, how did I lose it? It was just you know, the market kinda turned and you know, the good setups weren't weren't there. And and the thing is back then I had to be in a ticker at all times. I mean I didn't take a day off. You know, if there was not a uh a top notch setup right then and there, well I would trade a secondary setup. I would trade a setup that I don't normally trade. I just, you know, I had to be in

a s you know, a ticker at all times and I didn't really again I just didn't have any rules. I I didn't really know what I was doing. I mean, looking back from from today to that time I was really kinda clueless. I was lucky, you know, to be honest, I'm kinda lucky I didn't lose more. I'm lucky that I, you know, finally took a million, went down to five hundred. I'm lucky that I put four hundred in the bank right then and there because

If I would have kept going, who knows? I could have lost it all and I could've maybe I had to restart again at five thousand dollars, thank God I didn't have to do that. Yeah, yeah. So You know, having made a million dollars, that was kind of like the high point. You then lost half of it. Right. Was it ever in your mind?

when you were trading with a smaller account balance that you were just you were just sort of trying to get back to that million dollar mark. Like was that a a mental hurdle of some sort? No, I don't think so. You know, it it took you know, obviously when you when you take a a million dollars and you and you go down to five hundred, it it's mentally uh kind of demoralizing. It's kind of like a you know, uh a punch in the stomach, and then after a couple weeks

You realize, hey, I've got four hundred thousand in the bank and I'm only twenty two years old. It's still pretty darn good. So my point then was there, hey, let's trade with a hundred thousand dollars and let's see what I can make at the end of every single month. If I can make

you know, thirty to forty thousand dollars every single month. I mean, hell I could I would never have been able to get a job that could ca that could even remotely come close to that. So it wasn't really about getting back to a million dollars, it was about just You know, at the end of every month, the thirtieth of the month, what did I make? I mean, that was my biggest goal. Let's be positive at the end of every single month, whether it's five grand, ten grand.

50 grand. Um, so getting back to that. dollar amount I I i it really wasn't in my mind, you know, back then. It was really just being positive and making sure that this career path I had chosen, you know, a day trader that I could do this consistently and profitably You know, for a long period of time. That was my main focus. Okay.

Right. So what have the last few years been like for you? Um I I guess maybe a little bit further back. So we spoke you know, we've been speaking about your first years in the market, but as you said, you've been trading about I know, twelve, thirteen, fourteen years now. And I know you've been doing very well the past couple of years.

What about prior to that? Like kind of that in between period? What's that been like? Yeah, so again, when I went down to five hundred, I immediately, like I said, put four hundred the bank, traded with a hundred. About the next I would say three to four years I traded extremely consistent. I made about a half a million a year. Where, you know, give or take, about a half a million a year. And then I was

you know, maybe twenty five, twenty six years old and I said, Well, you know, again, I'm very happy with what I'm making, but, you know, there's gotta be a way to get to the next level. I mean, what do I need to do to break out of this I don't wanna call it a rut, but again, I was very Right about that half a million dollar level. And I thought there's gotta be a way to break through. So I kind of there was one year in there.

And I kind of got away from my strategy. I started to do a few other things. Uh I got away from I guess you'd say for my bread and butter. And I started to go long more. I started to um, you know, swing trade more. I would trade more triple leverage DTS.

You know, I was also twenty five years old. I s you know, I was partying a little bit and probably wasn't concentrating as much as I should. And I did have one losing year at that time. Um, you know, I didn't lose a ton, but I did finish the year red.

And that was a big wake-up call for me. I mean, I, you know, literally I slapped myself in the face and said, Hey, you need to get back. Don't worry about getting better than than than where you've been the last few years. I'm half a million is a hell of a lot of money. Get back to what you know, get back to what you're good at and stick with it.

And that's what I did, you know, for for the next you know, the next one or two years I did. I stuck with it, got right back and I was still right around that, you know, I don't know, maybe maybe five, six, seven hundred thousand dollar level. Um

And then after that, you know, I started to kind of diversify my brokers. Because again, at this at that time I had still really traded, I think, with one broker. Um and I started to open up a few other brokerage accounts, put a few more money in, you know, a little bit more money into my account.

And I started to really sit down and think about, okay, I know what my niche is at this point. You know, again, it's shorting small caps. You know, that is where I make all of my money. And I knew, okay, at that point I'm gonna stick with that. And I thought, what can I do again to to get to the next level without

you know, revamping my whole strategy and I thought there's two real ways to do that. You know, again, this was when I was looking at my tax returns. I would look at my tax returns and I would see All of these, you know, pretty big wins. I'd make fifty grand here, eighty grand here, hundred grand here, twenty grand here. And at the same time I would see all these big losses, you know, lose forty grand, lose sixty grand, lose twenty grand, lose seventy five thousand. And I thought, well, hell

What if I just try to not even make more money? You know, not even increase my position size, not take on any more risk? What if I just try to? eliminate try my best to eliminate all of these losing trades that I have in there, all these losing setups. So again I went back and I you know I studied all of my trades and I I kind of learned that a lot of these losing setups Either A they weren't they just weren't the top notch setups out there, but I was still putting on

you know, maybe full position size where I just shouldn't do that. Or I was just letting losses get a little too big. I was letting those losses grow a little bit more than I should. So, you know, the very next year I said, Well, hell, let me try to just cut my losses faster. You know, let me try to cut my losses faster and see what that does. And the very next year I think I grew, you know, Maybe fifty to seventy five percent. I did that a couple of years in a row.

And then, you know, again, at the same point, I started to increase my position size on what I would call, you know, I mean maybe your golden setups or your top notch trades, whatever they were. Um, increased my position size comfortably and uh and again that you know, then yeah, the next few years my, you know, returns really grew um you know, quite nicely. Are you ready to get serious about trading? Then join Tasty Trade, Investopedia's best platform for options trading in 2026.

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Okay, well let's flesh those couple things out a little more. So you spoke about cutting losses and trading with larger size when you have a golden setup. Um Actually what might be a good thing to to cover first of all before we go more into those two things is if you could just talk a little bit about like what are your golden setups? Like what are these golden opportunities that you're looking for? Like where do you really make most of your money on what sort of opportunities?

Yeah, there's there's been a couple recent ones, um, you know, in late uh you know, late twenty seventeen. HMNY um is a great example and that was back in I think it was October. They went from just a couple of dollars a share all the way up to I think about thirty seven dollars a share. And um, you know, something like Riot, R. I. O. T. is a blockchain play, went from, you know, it was actually a uh I think a biotech company and they switched over to do blockchain the stock went from

you know, sub ten bucks all the way up to about forty six dollars. And and I consider you know, a lot of these m moves are what I consider hype trades. There's just so much hype And um You know, so much hype behind them that they're, you know, they're just bubbles. So that to me would be a golden setup or something that I'm looking for to make. you know, most of my money on.

Okay. And you're making it only on the short side, right? Only on the short side. Yeah. I I would not I don't I don't play those long at all. They're just too risky. So what sort of things actually drive these stocks up in the first place? Like what's an example of um what was it, H M N Y? Like what was the catalyst behind that? H M N Y. So so the catalyst was Movie Pass and I think they bought about a fifty percent uh stake in movie pass.

Which was, you know, it's some um you know, I think for ten, twelve bucks a month you get unlimited, uh, movies to a theater. And uh, you know Yeah, I was never a a big believer in that news. I never I never thought it was that legitimate. I thought, okay, the stock should maybe go up, you know, fifty percent off that news, not, you know, several hundred percent off that news.

You know, these momentum names are tough because a lot of them are manipulated. You know, you need to look at the press releases, you need to see why they're moving and you also need to I think you need to have a firm understanding of Of level two and a lot of these names that move, they're they're thinly traded. You know, they have they're low floats, you know, a lot of them trade less than five million shares. And they're moving because a lot of hype, I think a lot of manipulation and um

You know, I I consider'em a bubble. I mean, it's kinda like some of these cryptocurrencies that you're seeing moving. I mean, they're they're just uh You know, there's just a lot of mania behind them and that's how you see moves up to five hundred percent, you know, a thousand percent, fifteen hundred percent. Really it's just a lot of, you know, momentum and hype.

So how come the short side presents such great profit potential for you, like as opposed to playing the long side and kind of uh running with the hype? Well the thing is you never know how high they're gonna go. I mean, yeah, obviously it's easy to say, you know, if you see a stock like HMNY that goes from five to thirty seven, I'd love to play that on the long side, but realistically

You know, there's a lot of companies out there that release, you know, similar type news and they don't run up a thousand percent. You know, they might run up from five bucks to six bucks or, you know, five to seven. So you never really know when those big moves are gonna present themselves. You know, that's the thing. And, you know, there's always halt risk on on a lot of these. And, you know, to me You know, i it all goes back to

where I'm profitable as a trader. You know, again, after trading for, you know, five years or ten years or fifteen years, I think everybody should know where they're profitable. I mean, w if you're profitable on the long side, then then you could be pr then then go for that. You know, go for that strategy.

You know, I'm profitable on the short side because I would rather see something that goes from five bucks to thirty bucks, know that it's overbought, you know, know that it's, you know, gonna eventually crash and fade. And I'd rather uh I I just think the risk reward for me personally is much, much greater on the short side than the long side. Okay. And like you said just a couple of moments ago,

You don't know how high these stocks are going to go. So how are you timing your short trades? Like how do you time this? At what point of the cycle are you getting ready to take a short? Well, the timing is very difficult. I mean, you know, H M and Y I shorted, you know, it was around maybe eight fifty or so and I had about a hundred thousand shares short and I cut that loss You know, maybe high nines, you know, and I took a you know, I took a loss on that.

You know, a lot of these I'm taking you know, now that one was not a paper cut loss, but a lot of these I'm taking small what I call paper cut losses on the way up. I mean timing is very, very difficult because Even if you have a stock like Riot, R. I. O. T. that went up to forty six, you know, if i if if traders were to go back and look at that final day where it put up that final final candle up to forty six dollars, I mean Those intraday swings.

are incredibly difficult. I mean, there are head fakes, galore. You know, it it is incredibly difficult to to try to time that correctly. Usually what I do again is I'm taking paper cut losses on the upside. I'm I'm starting with a a starter size. Whether it's 5,000 shares, 10,000 shares, whatever it is.

And, you know, I'm hoping that I have, you know, maybe hit the top right there and it's gonna go gonna go down. If it goes down, I'm gonna add. You know, if something goes up or breaks through support, I'm getting out. I mean, I'm cutting that loss. sitting back and I'm again I'm gonna look for again and a a re entry either later that day or the next day or the following day or whatever that is. But I'm I'm not a trader that's gonna start a short

and look to add higher. Um, I just don't do that. I did that in my younger days, but again, going back to the thought process of keeping your losses small. That just does not work of of shorting and adding higher. I would rather short, look for a breakdown, look for a failed bounce, short that.

And I wanna keep adding, you know, when I'm in the money. You know, I don't wanna add against me. You know, we've all seen a stock like DRISE that was last year, that was in twenty sixteen, go from fifteen dollars up to one hundred and fifteen dollars. So Adding to a losing position is not something that I ever really want to do. Okay.

that you you may have an opportunity to enter a short is when you get a failed bounce of some sort. Yeah, a failed bounce, just a real parabolic move. I mean usually usually you know, a day three of a parabolic move is um you know, should be uh hopefully a winning entry. But again, entries are tough. I mean, on these parabolic moves that are low float, that are highly manipulated, I mean, trust me.

I have I mean it i it is extremely aggravating. I mean I I have no you know, I have no uh miracle uh work entry. I I just don't. I mean it is extremely, extremely tough. I am usually You know, again, I am taking lots of small losses on these before I finally try to nail it uh, you know, on the downside. But it it is certainly it it is certainly not easy. The only thing I I really pay a lot of attention to is volume.

You know, on my charts when I'm when I'm looking at charts, the only things I really use are price and I use volume. Sometimes I I do use VWAP but You want to look at volume and also level two to see what's going on there. I mean, when you see a big drop on heavy volume, you know, that's usually a key to me that, hey, this this could be the end or this could be the exit. You know, somebody big is getting out.

You know, that's that's one of the the main indicators that I will look at. Okay. So let's talk about how you're actually cutting losses. So you say that you're cutting losses fairly quickly, you know, if if things don't start to move in your favor. Can you just go into that a little more? Like at what point

Would you say that the trade is not going against you and you need to you need to cut this trade? Um, because, you know, we often hear, you know, it's good to cut your losses quickly and that but when you actually put that into action it can be A little more difficult than it is to talk about.

Yeah, well it really comes down to the price action for that day. I mean, let's say let's say you've had a stock that's gone from maybe five dollars to thirty dollars and you think that thirty is a good entry. Um, you know, you short it at, you know, it's up to thirty, it falls to twenty nine seventy, twenty nine eighty and and you enter right there and you have a short, it drops a little bit to twenty nine fifty. I mean, usually my point is I'm gonna use kind of um I guess you could say

a resistance exit, you know, and and if thirty was the high of the day, you know, you maybe give it a little bit more than that. But basically it's based off the chart. I mean, my trading is I would say You know, eighty to ninety percent technical analysis and and and looking at the chart and reading the chart, looking at the volume.

And um, you know, it's based off that and and and that takes you know, to be honest, that takes a while to figure that out. It took me a long, long, long time and I'm still trying to I'm not saying perfect technical analysis at all, but A lot of it is just looking at support, looking at resistance.

And if it breaks if I'm short and something breaks through resistance and exp and definitely if it breaks through resistance on volume, I'm just gonna cut that loss. I mean, it's just as simple as that. I I um I I try my hardest not to fight anything. I don't want to get emotional. I never wanna say, Hey, this can't go higher. I mean, it's impossible. It can't go higher. It's so overbought. This news is BS. If something doesn't act right and it breaks that

Resistance, I just I'm just out. How many times are you willing to be wrong on a particular move? Well I've never given up on a move. I mean never. I mean, you know, I have never been really with a stock and said, well, it's just going up too much. I'm not gonna, you know, I'm I'm just gonna completely take it off my radar. Now, you know, going back to like HMY, I originally shorted that like I said, in the eights. I cut it in the high nines and it took

You know, I'm gonna I'm gonna you know, I'm just going off memory here, but it probably took two or three weeks for it to get back into the thirties where I finally reshortened it. So there are times where You know, I will get out and it'll take, you know, several more weeks for maybe the pattern to complete itself before I will get back in. But

rarely is you know, rarely is there a time out there where I just you know, I'll never just give up. But, you know, sometimes you just have to be patient for the entire move to uh

you know, for the entire move to happen before you know, before you get back in it, before the timing is right, I should say. Now the other thing you had brought up was Like having conviction on your really good setups. So trades which look very promising, you want to hit those with as much real size as you can. I'd like to hear a bit more about how you think about this type of thing because You know, what signals to you that this particular trade might be better than these last few trades? Like

Right. Yeah. Let's hear a little more about that. So I guess it all goes back to finding your niche as a traitor. You know, the great thing about being a trader, the great thing about trading is that you can make money doing so many different things, going long, going short, you know, day trading, swing trading.

You know, trading options, trading talks. So I think it's so important that we we find our niche. You know, we find what we're good at. We don't have to be good at everything. You know, we can just be good at one thing. And, you know, we can make a ton of money just being good at one thing. So on the short side, or for me, finding that one thing is is is a parabolic setup. And again, what is a parabolic setup? Well, it's something that moves

You know, I'm gonna say, you know, usually it's several hundred, maybe a thousand percent on news that is just you know, that it just doesn't justify it. So You know, again, after trading for several years, this is something that, you know, is probably not for a beginner, but after trading for several years or hitting

You know, again, no matter what your strategy is, you should see setups out there that you can know, okay, nine out of ten times I'm gonna be profitable on this setup, or nine ninety-five percent of the time I'm gonna be profitable on the setup. So obviously the risk reward is such in your favor on those setups. Why would you not wanna put as much money you c as you can behind that trade? I mean, it's just it's just simple. You know, something, you know, again for me, something like an H M N Y

in the thirties or a riot in the forties or a year ago we had ETRM that ran from a few bucks all the way up to thirty dollars a share. I mean there are just such huge, you know, pockets of air in these stocks that for me it it it's it's a twofold. I mean, yeah, A, it's about the money.'Cause I like to make money. I mean that's that's what we're here for, but B it's also about Kind of I don't know if

feeding your hunger inside or your your need or your want. It's just like, you know, you see these setups and I know that I mean, I just know they're gonna crash. I mean, but again, it's like we talked about a couple of minutes ago. It's the timing. It's the timing that's difficult. So I think as traders want to get to the next level or take things to the next level, you know, it's always best to A study your trades, know where you're making money.

No, you know, you can say without, you know, a shadow of a doubt, hey, ninety nine out of ten times on this setup I'm gonna be profitable or ninety five percent of the time I'm gonna be profitable. And if you have odds like that, you know, you don't see odds like that in the stock market all the time, right? I mean But if you have odds like that, why would you not want to put as much money as you can behind that trade? I mean, obviously with a type stop tight stop loss, like we've mentioned, but

You know, when I see those setups out there, it's hard for me to even to sleep at night. I mean I'm so excited I'm up very early in the morning ready to you know, ready to try to hit those moves because again, they don't happen all the time. I mean These set ups are not something that's gonna happen every day. You might have'em

three times a year, four times a year, five times a year, six times a year, whatever it is. But even for me, you know, at this point in um in my trading career, When I go back at the end of every single year and I look at all of my wins and all of my losses, these, you know, riots, R. I. O. T. and H M N Y and maybe X N E T, you know, these type of moves are gonna make me

You know, they're gonna account for maybe, you know, seventy five to eighty percent of my income. So I know that this is where I'm gonna make the big money. For me personally, the big money The big money is gonna be in the big moves. And and the rest of the stuff day to day is just kind of scalping uh well I'm trading more of smaller size, medium size, and just trying to, you know, kind of scalp some trades.

Okay, but your niche is shorting these these parabolic moves, right? Right, correct. Yep. So that's pretty much your thing. That's what you do. What makes, you know, one What makes one trade different from the next? Like, how do you know that this this particular setup This what I'm seeing right here, this is a trade that I need to trade with much larger size, as opposed to the last one. Like before these big moves actually unfold.

What gives you the conviction that you really need to hit this particular one with a lot more size? Right. Well it really comes down to if it's a multi day runner or a multi week runner or um you know, maybe a multi month runner. I mean it it really comes down to how much

How high is the stock? How high is the move? You know? I mean, that's what it's gonna come down to. If something is a day one runner and it's only up, you know, thirty, forty, maybe fifty percent. Well, obviously I'm not gonna put My whole account behind that move. You know, if we have something that over the course of three or four or five weeks has gone from

You know, or even even even five days. I mean it's gone from three or four dollars up to twenty, thirty, forty, fifty dollars. Basically it's the the the higher it goes. the more conviction I'm gonna have that it's gonna fall. I mean again, like I s we talked about a little bit ago, I'm probably eighty percent at least technical

Um technical bias, but the other twenty percent is fundamentals and you want to know why that move why why is that move occurring. Um so you know the fundamentals are gonna come come in there as well, but You know, overall, you know, my conviction, how do I know I'm gonna put this much money behind this trade is it you know, how high is it? How much error is in that stock? How manipulated is it? How much

Uh, you know, how high has the move gone, I guess, overall? I mean, something that has gone from three to thirty, I'm gonna put a heck of a lot more money in something that's gone from three to thirty than I am stock that's only gone from three to four. I mean there's just not There's just not m that much meat on the bone, I guess you could say. Okay. I like your analogy of of a stock having more air in it. Right. Right. Right.

Well again, you know, I have so something I've done since I've started trading, I've gotten a little lazy'cause I have two kids, but after trading for ten, twelve years, what I do is I try to at the end of every single year go back and print out a chart of that year's biggest winners. You know, stocks that have gone from five to fifty or five to fifteen, you know, three to thirty, whatever it is, and I print out every chart.

And every single one of these falls right back to Earth. I mean, almost every single one of these after hitting a peak is gonna fall you know, forty, fifty, sixty, maybe seventy percent. So I print out all of these charts and I keep them handy so I can go back and I can, you know, uh maybe compare one move to another move.

And I do. I call'em pockets of air because I I honestly I don't remember one of these ever really holding up long term. I mean, they're all gonna crack and that's what I'm looking for. Some of'em hold up longer. than others. Some of them go a lot further than others, like like we talked about dries, you know, going from five to hundred and fifteen. But at the end of the day, every one of these low float

Um, I call'em hype trades. Most of'em are manipulated. Um, you know, they're just momentum plays. I mean, literally I cannot remember one. that that has not crashed. So yeah, I do. I call'em they just have, you know, pockets of air in there that it's like a balloon just waiting for a a needle to prick it. And once it happens, it's like bam. I mean they they they fall

you know, so hard so fast that uh you know, again, that's what keeps me in the game, just looking for that next move, that next setup. So as you when you get a good entry on a trade and it starts to move in your favor Are you adding size as it breaks down? Yeah, usually I am. I mean that's that's when I'll you know, again, I like to be in the money.

when I'm when I'm adding. I mean now again, I don't wanna chase. I mean if I can I can I I you know I try to do whatever I can not to chase as much as possible but you know, on these um thinly traded momentum stocks, you know, from what we've seen is that when when it's the end i it it it can end pretty darn fast and you can have some downside pretty quick, pretty fast. So yeah, usually it's on the downside that I'm you know, that I'm getting in and I'm slamming that bid and I'm uh

You know, a adding adding size to it. Okay. And what about holding positions overnight? Can you um add a bit of colour to that? Again, it comes down to, you know, how overbought the stock is that I'm trading. Something that's a multi week runner, you know, I'm gonna hold that overnight, sometimes for weeks on end. I mean, I might hold it two weeks, I might hold it three weeks.

Are you ever worried about overnight risk? Like is that something you try to mitigate at all? Usually the g yeah, I mean it is. It depends what I'm trading. I mean usually if I'm trading something garbage The only overnight risk you're gonna have is a PR and and and you do wanna know You know, it all depends on the setup. I mean, every setup is different. If I have something like Riot or or H M and Y or, you know, ETR M a year ago or um You know, there's so many others.

I'm gonna hold that overnight and I'm gonna have, you know, zero problem holding that overnight. And you know, if something just popped up day one and it went from two to two fifty or two to three and you think there could be more PRs in the future, you know, the next couple days, then yeah, I'm not gonna hold much overnight and I'm not gonna hold if I do I'm not gonna hold much size overnight because

You know, when you have something low float, you know, a million shares, two million shares, three million shares, and your stock is, you know, just a couple of bucks, I mean, there definitely is real risk to holding those overnight. You know, we saw with KBIO I think that was three years ago. You know, KBIO filed for bankruptcy and the stock was

Around, I'm gonna say around$2. And I think when they liquidated, I think they had enough assets, I think, for around 75 cents a share. So I was short. I know a lot of people were short.

And I was short, you know, decent size'cause the float at that time, you know, again it's about three years ago, I think it was about three million shares. And then, you know, overnight Martin Shreley said or it was announced, you know, through Form Fours that he had bought maybe seventy five percent of the company and that stock went from a closing price of around two

To the next day it opened, um, God, I forgot exactly where it opened, maybe ten, twelve bucks. And within a couple of days it was up to forty. Ciao! You know, you definitely need to, you know, be very cautious. Holding these overnight. And, you know, you need to know, you know, the real story behind'em. You know, something that's low float, keep stock with a low float, you know, it can be dangerous to hold them overnight. I've seen uh you know, I've seen a lot of traders blow up.

making mistakes like that, so you definitely need to, you know, proceed with caution, I'll say. Do you ever feel comfortable in these big trades? Do I ever feel comfortable? Oh, I f yeah, I mean, you know, I I would say and again, it it's waiting for the backside of the move. I mean, that's the most difficult thing out there is waiting for the backside. Again, it's the same thing as we try, you know, talked about a few minutes ago is

Is timing it right? When do you time these shorts and when do you get in with size? It it's the backside. I mean, that's when you want to do it. So when a move has hit the backside, I would say, you know, the the the the upward move is done, it's hit its exhaustion, it's coming down, it's the backside of the move.

Rarely then do I get nervous. I mean rar you know, usually then it's you know, you're breathing a sigh of relief. You're saying, you know, yeah, I'm gonna nail this. I mean, you know, you're you know, pretty excited. So on the backside of the move

I'm I'm rarely uncomfortable with my trading. The only time I'm uncomfortable is if I don't have enough size on. You know, if I if I didn't get enough shares and I can't locate shares anywhere, then I'm then I'm almost angry. You know, I want to add more size to these, but Um I you know I try to you know I try to um

play too much size on the front side of a move ever. I'm really waiting for the backside. I'm waiting for the downside, the backside, whatever you want to call it. And then once that happens, I'm I'm good. I'm you know, I'm I'm feeling good and I'm

You know, know that the move, you know, should be over at that point. This might be a little bit of a silly question, but I I'm curious to hear what you you say anyway. Trading the size that you are trading, you know, when you get these golden opportunities And your experience, your knowledge of, you know, level two, the order book. And because these stocks that you're trading are low floats, are you ever able to kind of bully the price a little bit?

W well, you mean do I ever try to manip or do I ever manipulate it or do I do do my orders just move it, is what you're saying. Well, I wasn't gonna use the word manipulate, but Yeah. No, I mean, um, no, I I will say that your orders do move the stock. I mean, yeah, I've placed, you know, a lot of times, you know, I have traded with p traders, um, good short sellers.

You know, we'll have a big front side of the move, stock up two hundred percent, three hundred percent, four hundred percent, and they'll say You know, the the the downside will start and it'll it'll happen faster than any of us think and they'll say, Oh, that just missed my entry by five cents or missed my entry by ten cents. And I say, well, shit, it didn't miss my entry because I slammed the bit. I mean, I slam it over and over and over again.

And I have no problems taking liquidity. And yeah, on something low float, if I'm slamming the bid, I will cr I will, you know, I I will you'll definitely see that. I mean, you'll definitely see on something low float that I'm moving the stock. I mean, there's no doubt about that.

Do I ever get in and try to play games on level two? No. I mean I've you know, I've probably you know, I've placed a few orders in my time and you know, i and and uh Yeah, I I don't really mess around with that too much. Okay. Okay. So I I think you may have mentioned this a little earlier, but This going really big on certain trades as opposed to other trades when you think that you have a golden setup, a golden opportunity.

Would you advise that this is something for slightly more experienced traders? Like it's not really something you should be doing if this is your first year of trading. Is that a a fair statement? Well, yeah, and I think in your first year of trading, I don't know that you're gonna know what your golden setups are again because you know I'm a I'm a firm believer in the market that

You know, the the market's difficult, right? I mean, ninety to ninety-five percent of traders fail. And, you know, I think why do they fail? They fail because they lose money. I mean they lose too much money. They don't fail because they don't make money, but you know, they fail because they lose money and

You know, they fail because maybe they don't have their niche. Maybe they they they they they you know, we follow people on Twitter that that tweet, you know, all these new ideas every thirty seconds long and short and swing trade and day trade and buy out opportunity or w whatever it is and

You know, I think if you're especially in your first year or you're just starting out in a couple of years, I would say, you know, number one, find your niche. You know, find what you're good at and then try to perfect that. Now after you've perfected that, maybe you can try to move on to something else. But um yeah, I would say

it's gonna be very hard to, you know, add to your your top setups until you at least know what they are. And then after you know what they are, I would say you can definitely add to them, but do it with appropriate size. So if you're used to putting on Maybe fifty thousand dollar positions and and you have a top setup, well maybe add this maybe put on a sixty or seventy thousand dollar position, you know?

Don't just go from fifty thousand position to five hundred thousand opposition or whatever it is. You know, add accordingly. You know, increase your size maybe 10 to 15%. You know, if those work and you know you're still making money consistently on these top setups, we'll increase it to 25%, 30%, you know, 50%, whatever it is. Take it slow, take it in stages. And then you know, and then go from there. Yeah. Um, and just going back to another thing you said uh earlier on.

Uh, multiple brokers, can you just um shine a little light on why you at trading through multiple brokers. Like why do you have all these various accounts? Sure. Yeah. I I trade with probably, you know, um uh seven, eight brokers. I mean, for for a couple of reasons. It depends, I guess, whether you're a long based long bias trader or short bias.

If you're a long bias trader, I don't really know that I see a reason to to have more than one broker. I mean, for ease of use and ease of purpose. Now a a a short seller's is is A lot different. You know, number one, your broker has to have the shares. And the stuff that I'm trading, the low floats that I'm trading, well, a lot of brokers don't have'em. I mean, so the more brokers you have

The more uh the increased uh the amount of chances that you're gonna get those shares. I mean, that's that's the main reason right there. The second reason is one broker might have something easy to borrow. And um well, if one broker has an easy borrow, then you don't have to pay for locates. You know, different brokers will also charge different fees to either locate these stocks. Or to hold these stocks short overnight. So

Um having multiple brokers on the short side is really, like I said, two faceted. You know, number one, to try to get that locate. And number two, try to decrease your fees because as a short seller, something you have to think about are fees. I mean short locate fees are extremely Extremely high. Short interest is extremely high.

And these overnight um charges are you know, I mean they they they're gonna take at least ten, fifteen, maybe more percent of your you know, percent of your trading profits. Yeah. And I guess maybe if you want to throw in a third reason, it probably mitigates your risk a little bit as well, you know, in case one broker, you know, touch wood goes down. Uh-

Well, and it also again, um, like you said, mitigates a risk for for that reason or for another reason. In case you get a margin call. I had an instance where I was actually long uh G B T C which is a um It's a it you know, it's a Bitcoin ETF about several weeks ago when it dipped down to eleven hundred and and one of my brokers that I went long in, I had no idea it wasn't marginable, so the next day I had a a monster margin call. So that broker was down for the day.

And I had a wire in from another broker. So yeah, the you know, I you know, I would always advise having even if you're long biased, having two brokers never gonna hurt you, but if you're short biased Yeah, I would say, you know, the more brokers you can have, the better. You know, if you're just getting started out, you know, it it's not really wise to do that'cause you you may not have the funds for it. But once you get a little more advanced

It it helped my trading dramatically, you know, to have more brokers than fewer. Okay. Yeah, cool. So I was reading through your two thousand seventeen review. And there was a interesting comment you made towards the end where you spoke about some of the things you do with your trading profits uh outside of the market. So can you tell us a little bit about what some of those things are and your thoughts around that?

Yeah, so again, being that I've traded for uh thirteen, fourteen years, I have been around Several other good traders that have blown up. I mean, several traders that have traded five years or ten years or fifteen years and and one mistake or two mistakes and they're gone. You know, that's the thing about trading is you never know

that one instance or two instances or or whatever it is where you could you know, you could just you know, you could just blow up. You could make a couple of mistakes like dries or KBIO or whatever it is and you just get stubborn and you're done. So I you know, I think it's so great to have a backup plan. I mean, have a backup plan, have money elsewhere.

And it doesn't really matter where it is. I mean, it doesn't matter whether it's in the bank, doesn't matter whether it's in C Ds, it doesn't matter whether you invest in real estate. I mean, I choose to, you know, obviously I mean, I do have a four hundred one K, my wife and I both do, so we max that out every single year and then I

started, you know, just buying land in Missouri, farmland in Missouri, that is, um to be honest, it's a very boring investment. I mean, it i it you probably couldn't get more boring than just buying farmland but but over the last hundred years or so In the Midwest, land is appreciated at least around four to five percent a year and then we get

you know, cash rent, you know, I we rent that out to farmers and we make another five to six percent a year. And the reason that I chose farmland, you know, I obviously I try to keep money in the bank and I try to put money away in the bank every single month, every single quarter, whatever it is, but When that money's accessible to me, I always find something else to put it in. You know, I always find something that

high risk. I mean, even though I've been trading the market, I've had success, it's still very high risk. I mean, at the end of the day, it's very high risk. So I like to get that money almost out of my hands, pay for land, and then I can't touch it. I mean, that money is there. It's safe.

It's not going anywhere. It's extremely boring, yes. But it's almost, you know, the exact opposite of what I do on a daily basis, which is, you know, again, it's just very risky. So, you know, again as traders, the longer we trade and the older we get, I think the less

Maybe I don't say the less able we would be to go get another job, but I I couldn't imagine what would happen to me if I blew up tomorrow and I have to go get a job again. I've never had a job and I've never done anything outside of maybe work for my my my family's business a little bit and then trade. So

That's why I personally it makes me sleep better at night knowing that, you know, one day, I mean obviously I think well, maybe I'll retire one day, even though I love the markets, but whether you retire or whether you blow up or whether you just want some time off, no matter what it is. You have uh another avenue out there, another revenue stream. Um out there to support you if you need it. Yeah, I think that's that's a smart move for sure.

I'm just curious why you gravitated towards farmland as opposed to, you know, more traditional forms of real estate like buying rental properties and that sort of thing. Oh, I've done that. I've I've owned lots of rental properties and they were just You know, I first owned rental properties um in St. Louis. I've owned them at um another, you know, location in Missouri, kind of a vacation uh

destination of Missouri and it it's turned out to be a big pain in the butt. I mean, you know, tenants I've had I've had tenants

Nightmare tenants, um and then I got property managers. I mean I thought, well hell, I got a property manager to deal with these people. Well the property managers couldn't deal with them. I had a deal you know, I found out that instead of managing the tenants, I was managing the property managers and I was having to talk to them on a daily basis, whether they had dogs, whether they

you know, were partying, whether they weren't paying their rent on time, whether they were trashing the place. I mean, and then I had to repair the roof, had a fix the H V. I mean, at the end of the day, I wanted a side investment that was that didn't take away my time. or efforts from the market. I mean at the end of the day, you know, my market is my main focus. My market will always be the main focus. So I wanted this investment

To be something that A, I couldn't touch, you know, it was just completely safe and I couldn't touch the money, but B, it didn't take up time. I mean, it didn't take up time. or energy or focus. And that's again, that's why, you know, the returns for farmland, yeah, they probably are a little bit lower than than I could get elsewhere, but they also take up I mean, they are they are literally zero stress.

Zero time and zero maintenance. I mean I it's just a raw piece of land that a farmer, you know, farms at every year. You couldn't ask for anything easier or lower maintenance than that. Yeah. No, that's a great point you make, actually. You know, being very mindful about where your time has been spent. You know,'cause if you're starting to manage people and that sort of thing, it can be a a great distraction, right?

Yeah. I mean again, you know, I knew you know when I had you know owned apartment buildings, I own, you know, several buildings and several um condos that were rentals and you know, it's fun knowing that you own these, but at the end of the day if it's taken away From your main revenue stream, I thought, well, why the hell am I doing this? I mean, I'm not in this to be a real estate investor. I mean, I'm a day trader.

And I just want something on the side. Well, it was kind of to the point where I'm getting phone calls during market hours and and I thought, Well, this is taken away from my main Yeah my main gig. That's not what I wanted. And that's why I you know, I sold all those and I look for something different. Yeah.

Well, Phil, I have to say it's been a a real pleasure to have you on the podcast and I'm very grateful that you agreed to do this. So I just want to say thank you very much. Sure. I appreciate you you having me on and I hope um you know, I hope that I can, you know, help some people out there. I hope my interview uh

Help some people make some money. I have no doubt. Now if someone wants to find out a little more about you, I know you don't have a great presence online besides Twitter. Um, what is your Twitter handle? Ozark Trade Okay. And that is spilled O Z A R K Trades, correct? Trades, yep, that's correct. Yep. Cool. All right, Phil, once again, gotta say thank you very much for doing this. I appreciate it. Yep, appreciate it, Aaron. Thank you, sir.

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