196: Ryan Trost – My First Year Trading Full-Time...

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Hey team, welcome to episode 196. This is the third in the series of my first year trading full time episodes, and it will probably be the last one for a little while now, but My guest who you are about to hear from is Ryan Trost. He is an equities trader at SMB Capital in New York City. If you follow the SMB YouTube channel, then chances are you've probably seen Ryan in a few of the videos.

At the time of recording this, which was actually early on in February twenty twenty, uh Ryan had recently crossed twelve months since starting at the firm. Normally I don't hold on to episodes for this long before releasing, but with some of the recent episodes being relevant to current events, this one did get pushed back a little bit.

If you recall, February was around the time when Tesla was going parabolic. So that's where our conversation begins, with Ryan speaking to how he was trading around its massive intraday ranges. From there we chat about Ryan's trajectory in life prior to trading, how he landed a seat on a proprietary trading desk, lessons from losing money month after month.

how he began to develop an edge, Ryan's take on trader psychology, a recap of his best and worst days, and areas in which he's trying to approve upon. As this was recorded a couple months ago, I did check in with Ryan just recently and found out he has been progressing well since. For anyone who's curious, I've included an up-to-date equity curve in the show notes. Uh they can be found at chatwithraders dot com slash one nine six.

And seeing as this episode is a bit lengthy, I might try to include some timestamps in the show notes too, so you can skip around if you're interested in hearing certain things. And now without any further delay, I present to you Ryan Trost.

way I've been tackling is really just, you know, picking my spots super carefully. So obviously we'll end up getting into more of, you know, my system and and how I'm specifically looking to capture these moves, but a lot of the guys here at the firm look to try and trade it. You know, be involved for the entire day, trade around the wiggles. But when it gets to the point that the wiggles in the stock are, you know, 20 to 30 point wiggles.

That's when, you know, for a new trader, you know, it's only been a year, it can become almost impossible to really figure out how to control your risk. So I've just been looking for really clean intraday patterns, um, like, you know, wedge breakouts.

momentum breaks, things like that, you know, where I can put risk on quick, be in the money quick and and not really have to overthink it. Because if you overthink a stock that wiggles like that, you know, you're just gonna eat yourself alive, losing out on the spread. Yeah. It's definitely it's definitely been way harder than I thought it would be these past couple of days.

Yeah. I mean obviously I haven't been trading it but I've been sort of checking it each morning when I get up just to kind of see what's been happening overnight and it looks very difficult to trade. Just at a glimpse, you know. Oh yeah, for sure. Have you been playing it on the long side as well as the short side?

Yeah, definitely. So I've been, you know, I've been trying to maintain the mex mental flexibility to be able to play it both ways. Just because when you have a stock that offers that much range potential, you know, you can make your money all over the place. So I've been trying to

Keep in mind what I think the bigger picture is. Like obviously as it was going parabolic on the daily, in the back of my head, I'm thinking, all right, when is this big short going to set up? When is this big short going to set up? But you know, at the same time, still trying to be involved in any type of the price action. You know, that worked really well for a little while these past couple of days.

I've had to kind of dial it back, you know, as we move to, you know, what you could call the backside of the trade, it topped out, had that big, you know, explosion to the downside at the end of the day. Um, what was that, Monday or Tuesday? Um and then obviously gap down and now it's you know it's all 200 points off the high.

Before that really happened, I was doing a good job at recognizing that it was most likely going to go higher. And, you know, the trades to the long side and until it collapses. And then I have to start switching. Okay, now it's the backside. Let's start shorting this. Try and think about the really big trade. And, you know, at the same time, the wiggles are just so insane that you can scalp around long if you want to as well.

So I guess what I've really been trying hard to do is to remember what the bigger idea is, just so that I don't miss it. while at the same time recognizing, you know, it's a great trading vehicle right now. Mm. So I'm sure you've been burnt on it a few times as well, like over the past like week or so or however long you've been trading it. I think you may have said you've been involved in it past like few weeks.

Yeah, I've definitely I've definitely taken my fair share of rips as well as having a couple of like really big trades in it. And you know, when I took the rips it mostly was just a product of, you know, not being specific enough, like giving it too much room, you know, getting in like You know, a couple of lots.

putting on feelers, and the next thing you know, you're down like five, ten points, and you're on the wrong side of it. And if you get on the wrong side of a stock that moves that much, then you start to eat yourself alive, you know, death by a thousand cuts. And those are the days that really added up.

Um, I don't really ever take big outsize singular losses. You know, I'm uh it's not like I'm in a position and I'm sitting through a 20-point drawdown. My bad trades usually come from, you know, trying the the same relative idea, you know. two, three, four times and taking a couple uh one R, two R losses, and you know, those add up quick.

These sorts of moves like we've seen in Tesla, have you you've been trading about eighteen months or or close to. Have you seen anything like this before? I don't think I've ever seen it with such a high beta stock, like with such a huge market cap. When I first started trading at the firm, you know, on the demo was right around uh like the marijuana stocks in the US started to go insane.

Uh and you got like that big pot stock bubble where uh Tilray, T L R Y, went from like 40 or 60 bucks all the way to 300, top tick 300 and collapsed like 150 points from there. That was the first time, you know, in my trading career that I saw any type of like just ridiculous daily chart parabolic. Um and then obviously, you know, as I dive further into trading, I started to see that a lot with low float companies. So a lot of people at the firm here trade low float stocks.

you know, stocks in biotechs, stocks that are up on, you know, whatever news, their floats are extremely small, so they get locked and they, you know, have these crazy drives in price. But no, as far as like just the sheer size of the move, you know, the market capitalization just

I don't even know, doubling, tripling in such a short period of time, I haven't seen anything like it. And I think a lot of people would probably say the same thing. You see so many comparisons to, you know, the tech bubble of the two thousand. Now everyone's like, Oh yeah, this is something that was happening. you know, five to six times a week. Back then I'm like, oh I'm glad I'm not trading during that time'cause this is insane. Too stressful.

Yeah, you know you come in and you basically owe it y to yourself. to stare at this symbol all day. You know, there's plenty of other I ways to make money, other ideas and you just can't peel yourself away from the shiny object. And I think that, you know, that that affects so many traders here at the firm too. It's so easy to get you know, your blinders on and think, oh, I'm gonna hit that hundred point move in Tesla today. You know, I'm gonna have my biggest day. Everybody's gonna get paid.

And then in reality we're all just taking massive rips. Yeah. So would you say overall the past few weeks you've you've made money in Tesla, you've you you come out flat or you've lost money? I've actually ended up making money in it. Not as much I guess at the end of January, you know, before this week, I got caught up in it Monday and Tuesday. Um, but prior to that, I was up a lot on it, like more than I have been up on a single symbol ever.

And, you know, uh which is just a product of the opportunity. Um didn't do my best nailing the backside of it, you know, getting the short opportunity. So I think I gave a little bit away. into that, but I think I still ended up decently green on it, which kind of surprises me judging by the past couple of days that I've had.

Fair. Okay. Well let's take a a step back, Ryan. Sure. Um obviously the purpose of having uh the discussion with uh newer, less experienced traders is to kind of hear, you know, how you came to be where you are now, what your sort of first twelve months looked like and that type of thing. So First things first, what was your trajectory? What trajectory were you on career wise prior to trading? So

I went to school at the University of South Carolina and my major was biomedical engineering. So, you know, didn't really necessarily have like a huge science based background in high school. Just kinda came in and You know, I knew I wanted to be an engineer. I didn't know specifically what kind I wanted to be. And, you know, honestly, with a flip of a coin, decided to do biomedical engineering, you know, so heavy on biology, chemistry, physics, things like that.

and went through all four years of undergrad, you know, never thought about trading once. And then I ended up in um my fifth year. I went to get my masters. And during that fifth year, I started to get introduced to trading. So you know the story behind that is is kind of what built the trajectory in the first place. And I think w you know, I'd previously mentioned my girlfriend's father, and that's kind of at the root of everything.

Um, and that's that's quite the little analogy if you want to hear that story. Yeah, well let's hear that because obviously you've told me about that previous conversations, but uh for anyone who's listening to this podcast now, uh I probably won't be familiar, so yeah. Share a little more around that please.

Yeah, sure. So You know, tale's old as time, met a girl in college. You know, we fell for each other, had been dating quite some time, and she's from St. Louis. Um, so you know, one day I go and meet her family and I'm speaking to her dad and her I walk into his office in the house and

You know, he's got all these monitors set up and big desk. And I can tell that, you know, he's definitely doing something related to stocks. So I walk up to him and, you know, we're sitting at the computer and I'm I'm having him you know, walk me through what he's doing,'cause obviously there's some things going on here that I don't understand and me being the

type of person who's always thirsty for knowledge. I was looking to try and figure out. I I knew he was making money. I wanted to, you know, get exposed to what was happening here. And He pulls up all the screens and he starts, you know, talking me through, you know, what he does for a living, how he makes money trading stocks. you know, his strategies and, you know, his journey and, you know, next thing you know, it's been

three or four hours and, you know, my girlfriend Annie's nowhere to be found. She's throughout the house with her mom doing doing whatever. And and me and Tom Canfield, who's her father, are sitting there, you know, shooting all about stocks for three hours. And He made a very specific point to highlight you know, the parts of the game that I ended up falling in love with. You know, it's easy to learn technical patterns, it's easy to learn, you know, how to be analytical and how to

You know, execute trades. But at the end of the day, the most important thing to be a consistently profitable trader, in my opinion, is Is your mindset good? You know, how do you deal with psychology? How do you deal with your emotions? How do you deal with taking bunch of losses in a row? How do you deal with the fact that your everyday life

Is completely ingrained in your performance here. You know, any performance based job, things that happen in your peripherals are going to affect your performance. So he started talking a lot about you know, his journey and and what it took for him to get to where he is now, and how

You know, it's so much more than just making money. It's about learning about yourself, leveraging your personality, learning, you know, what your demons are, what really makes you lose money, what makes you get on till. And I started to understand that, okay, there was more going on here than I had previously thought. You know, I had heard about penny stocks, I had heard about stuff like that, you know, from kids at school, business majors.

but never really understood what it meant to be an active intraday trader.

So getting exposed to this first time, I asked him, I was like, what do I need to do if this is something that I wanted to do for a career? I'm extremely interested, obviously it can be a lucrative career as well. And he actually gave me two books to read. The first was Trading in the Zone, you know, Trading Classic. Perfect.

introductory book for trying to figure out what it really means to understand the psychology behind trading. And the other one he gave me was the playbook that Mike himself wrote. So that was my first introduction to anything SMB, you know, anything here at the firm. Dove right into those books and you know, before I knew it, really just started to fall in love with the idea of what it could mean to be a trader. Okay, so at this point, how long had you been studying to be a biomedical engineer?

Hmm, let's see it was at least four years because I had gotten my undergraduate degree so probably like Four years and a couple of months, you know, a handful of months. I was going into my masters program. Okay. So this is what I want to ask you. What Sure. How did you make the decision to quit pursuing your masters? and instead pursue trading. So obviously trading has a lot more uncertainty than uh plan A.

Yeah, definitely. It's all that to my parents. Yeah, so what ended up happening is I didn't make the shift right away to leave school. Before I I started trading. You know, it wasn't, okay, you know what? I'm leaving school and I'm gonna start to trade. I was starting to trade on my own. Uh on like a demo account.

even before I left school. So that September of my um my fifth year, my graduate program, I opened up a futures account. So, you know, the end of the day my original background in trading comes with trading the SP 500 futures. Um and learned about market profile, you know, learned about how to use market internals to make decisions, and really dove into.

Doing basically two lines of study at the same time. My current career, which was trying to become a biomedical engineer, trying to get my master's, thinking about PhD programs, while on the side in my free time, studying everything I could about you know, how to trade the SP 500 futures. And Basically it got to the point where I was trading on a demo account.

And I put saves up some money. I bartended in in college, eventually saved up some money to fund my own futures account. You know, you can fund a futures account with like two grand, you know, it you don't really have to save up a ton of money. It's the most leveraged market. That's kind of where you end up uh Either sealing your own fate or giving yourself an opportunity to actually trade.

Considering the leverage can take some people for a ride. But eventually got to the point where I had an an active account. I was trading on my own. I had done a decent amount of study to try and figure out, you know, looking back, I had no idea what I was doing, but I thought I did. And I thought I could do it on my own, without a firm or, you know, without anyone else's help. I thought I could just start trading my own account and and be a retail trader and do school at the same time.

Around the winter of that year, so finished the first semester of my master's program. It was the winter of that year, and I had realized that, you know. I knew what I wanted to do with trading. I knew that there was some crazy potential there.

And I think it was the same kind of potential that a lot of people think about when they think about trading, you know, how much money could I make? You know, I could be a millionaire, I could, you know, be the richest person ever. And you know, those the guise of, you know, what it really sounds like to be a trader. everyone you meet who's really successful, they make tons of money and you can almost get blinded by

or romanticized by the idea of that. And I think I definitely fell into that when I first started. Obviously as the journey went out throughout the year, those things started to change. But I think the idea that I could have like this fast paced lifestyle, like extremely challenging career that would challenge me mentally, you know, in it it was in and of itself extremely

challenging and that's really what I wanted to do. I felt like I wasn't being challenged in school. I didn't really love what I was doing. You know, biomedical engineering became such a saturated career over the four years that I was there. people around me were like wondering what their jobs were gonna be like. You know, you were either going to become a doctor or you were gonna go get a PhD or you had to go right into the field.

And I really just didn't know what I wanted to do with it. So I think it was a combination of one being attracted to kind of the prestige of what it would mean to be a successful day trader. And then also probably a a equal amount of the fact that I really didn't know what I wanted to do with my current trajectory. You know, and I think a lot of people in school feel the same way and

You know, a lot of people realize that, you know, becoming an adult or graduating from school or starting a new career can sometimes be a crapshoot. You don't really know what you're going to end up doing until you get that first job. I think the idea of that kind of scared me, you know. I didn't really know how I was gonna leverage my talents in my career that I was doing and trading kind of all of a sudden shone a light on what I could potentially do, you know.

all of a sudden there was this opportunity that I had never heard of before. And I had a mentor, you know, who cared about me and who really wanted me to succeed and was willing to tell me everything that he knew over 20 plus years of trading. And I'm sure, you know, if worse came to worse, you could always fall back and continue your masters from where you left off. How old were you at the time?

So let's see. I was twenty two at the time I was in my master's programme. And yeah, it did help to have that, you know, and I should I should mention my parents as well were extremely supportive with the idea that you know, I could start this new career. At first, you know, it it took me a little while to convince them really, you know, why I was doing this. You know, trading's not just gambling.

my parents really didn't know anything about the markets or anything like that. Obviously I remember two thousand eight. I remember, you know, what it was like to grow up during that time. And that kind of, you know, produces a certain certain type of understanding of, you know, financial markets. So I'm not gonna say that they were super thrilled that all of a sudden I left being an engineer to

do this completely uncertain career. But I think they could tell that I was passionate about the idea of it and that, you know, I thought that doing this was what was going to make me really happy and and challenged and feel fulfilled. But yeah, you know, obviously I did I did have a fallback and a lot of people don't have that. Um But I never really thought about the fact that I might have to fall back, you know? Like having that certainly, you know, deep inside made me feel better.

But I I didn't want to ever doubt myself. And I think that's kind of almost a necessary thing, you know, especially in a performance-based job. Like you really can't doubt yourself or, you know, it's so easy to just fall into really bad habits. So you funded an account to trade futures. Was that with two thousand dollars or was that with a little more?

No, I think it I think I literally had the minimum amount that you could to open up an account. Okay. So you started trading futures, intraday, full time. What kind of success were you having at that point? So it's interesting and you know, this is why when I look back like I I think it's been a really crazy time. Like

If you started trading two years ago, just look at the markets. Like if you pull up SPY or NASDAQ or anything like that, the past two years since 2018 have been interesting for financial markets. The week after I started trading live with my own money. the VIX crisis happened. So, you know, volatility started to really expand for the first time. You know, twenty seventeen was one of the most historically non-volatile

periods that we've had in history and all of a sudden, you know, in twenty eighteen the volatility products explode and we get this huge sell-off. And I watched that live. You know, I was living in an apartment with a couple of buddies of mine, a couple of fraternity brothers.

And we were all kind of huddling around the screen when they weren't in class and they were trying, you know, to watch what I was doing and and see whether or not I was gonna make any money and stuff like that. You know,'cause they didn't really understand what I was doing. And maybe I didn't even really at all either.

But that day I remember watching the markets just collapse and thinking in my head, Okay, I really have no idea what I'm doing. So maybe maybe it's not the best time to, you know, actively start trading this money. So for the first couple weeks following that, I really I really don't remember making any money. I don't even know if I made any trades because the ranges and the spies were s you know, in ES were things that I had never seen.

And you know, I'm talking to I'm talking to Tom and I'm like, You know, do you know what's going on here? Like should I be involved in a market this volatile when I really don't even understand what volatility is? I don't know why these VIX products are are blowing up. You know, I don't really understand what's happening here. So

You know, those first couple of weeks actively trading live full time with my own money, I don't really think I did much. If anything, you know, looking back, I I definitely lost money. Because I remember at a time I made like a couple of trades and you know, they didn't have the micro e-minis at that time. Every tick is fifty bucks. I'm sorry, every point is fifty bucks in ES, you know, for the two thousand dollar count.

You know, everyone thinks about ideally you'd like to risk, you know, one to four percent if you have really good risk management. So I'm risking like a hundred to a hundred fifty bucks a trade. It doesn't take that long to dwindle down a two thousand dollar account if you have no idea what you're doing.

So, you know, learned very quickly that one, I was completely ill-prepared for the markets that we were that I was involved in, considering I had only studied, you know, historically low volatility markets. Two, didn't have a set system, was trading market profile, was trading off some levels.

um that Tom would give me, you know, trying to make inferences, trying to learn how to read market internals, the Nicy Tick, the AD line, things like that, but never really understood what it meant to Develop a system, you know, have a playbook, have specific trades that I take that have statistical edge that I can back test.

you know, that I could build up a business around was basically just out there, you know, slinging, like trying to make trades and and trying to hit in and hit out and racking up fees. um, taking quick losses, getting upset at the fact that I was failing and not really doing well.

You know, and and quickly, quickly realized that trading full-time on my own was going to be extremely difficult with the amount of capital that I had. So I'd be sometimes trading on a Robin Hood account, trading options, you know, but everything was all kind of around trading, you know, the spies and the overall market. You know, hadn't really dived into trading individual stocks because I never learned how.

You know, right away what Tom taught me was, you know, if there's anything to learn, you should learn the most liquid market because it's infinitely scalable. You know, you could drop in and out of, you know, tens and hundreds of contracts. If you just think about how many points you need to make a week, how many points you need to make a month, you could scale it up by contracts, everything's risk reward, no dollar amounts. You know, it all sounded very structured and regimented.

And I think for a new trader, one, that's necessary. And two, I thought that it would be really easy to all of a sudden just get in, like, oh, I only need to make two points a day in the spies. And the next thing you know, the range or two points a day in NES.

And then next thing you know, the ranges are opening up 20, 30, 40 points intraday. And I have no idea what I'm doing. And I'm, you know, taking two, three point losses all over the place. Next thing you know, that account that was 2,000 is, you know, under a thousand. And the margin requirement for ES futures is like five hundred bucks.

So I'm like, oh I can only take like one or two more losses and I'm not gonna be able to do this anymore. So had to start, you know, infinitely looking for more ways to leverage the small amount of capital that I had. It's not like, you know, I saved up a bunch of money before I tried. You hear a lot of stories about People becoming traders and having tons of money or that they saved up from previous jobs, leaving their jobs and then starting a new career. You know, I was a broke college kid.

you know, saved up money bartending. I was working eleven to three, you know, eleven at night to three in the morning, Friday, Saturday, Thursday, bartending and took all that money that I could and You know, put it together and funded this account and very promptly lost almost all of it. So kind of realized that one, I needed to really learn what it meant to be a consistently profitable trader.

I needed somebody to help me to capitalize. You know, I had no money. I needed somebody to fund me. I needed somebody to teach me. And, you know, I really just need to be backed and exposed and in a situation where there were other traders who were making money.

And that's, you know, what if eventually led me to SMB. Obviously I'd I had read Mike's book. and was talking to Tom about, you know, I wanna do this full time. I've been doing it while still, you know, at the end of my lease with all my college buddies. Everyone was moving on to graduate. My girlfriend Annie, she was gonna graduate. We're trying to figure out what to do. I know she's moving to New York.

I'm from New Jersey, so my family's all around there. So I started looking for firms in the city and, you know, I don't think that there's any firm that beats S and B in the city. And I had already been exposed to, you know, his book and and knew what the firm was about, had watched v videos on YouTube, you know, I generally knew What type of program was going on there? You know, I knew that this firm produced profitable traders, and I wanted to be one of them.

Okay. So you You came to the realisation that having a two thousand dollar account which dwindled down to probably less than a thousand dollars very quickly wasn't gonna cut it, wasn't gonna be enough for you to become this big shot uh trader. That's right. So you started to explore other options, uh, one of those being looking into uh trading for a proprietary firm. Right. S and B you were familiar with, did you explore any other options? Were there any other firms which you tried to apply for?

I didn't apply for any besides S and B because I applied here and I got the interview. um relatively quick I think to when I applied. And then, you know, the process snowballed to the point where I honestly didn't even have time to think about anywhere else. I kind of just put all my eggs in one basket, which, you know, isn't necessarily the best idea.

But uh it worked out in my case, luckily. But I loved everything about what they were doing here and and I knew that they had a strong, strong founding and education. You know, this isn't the kind of firm where you come in, you buy in with, you know, five grand or whatever you have of your money, you know, the firm doubles your intraday margin or something like that. And once you lose it, they cut you. You know, here

We take pride in the fact that we're looking to develop, you know, the next seven-figure trader. So the firm covers downside risk. There's things like stipends to help you out your first year or two. And I was very attracted to the prospect of, you know, working with a firm like that. So no, I didn't explore any other options because it kind of was a sweetheart deal for me. You know, it it checked all my boxes and

You know, I I respected Mike and I knew Doctor S was stepping into the firm. You know, it's Doctor Steambarger who I know's been on the podcast as well before. So I knew that there was high level talent here. I'd seen videos. My current mentor, Shark, um, ha does a bunch of videos. He's a seven figure trader. You know, so I knew that there was enough resources here. that I could become what I wanted to become and didn't really need to look anywhere else.

Tell me about the process from applying to landing a spot on the desk. What did that look like? Yeah, so the way that we bring people on here is Every fall we bring on the new class of developing traders. So I applied to be a part of

the twenty nineteen class. And once I got my application in, I sent in, you know, a big, you know, my resume and, you know, all that stuff that you send in for jobs and included a cover letter where I just talked about how I had trading experience, you know, had studied, you know, under time, had you know, to try with my own money. I knew how market profile works. I have this big overall market understanding background.

Got the interview, came in, and we did two rounds of interviews. The first one I spoke with One of the onboarding traders, so you know, one of the traders here basically does the onboarding process. It's switched up over the last year, so I'm not sure who does it now. But I came in and had an interview with him. His name's Dan.

And we were going over, you know, my background, what led me to trading, why, you know, this is what I wanted to do, basically all of the things that we've gone over so far. That was the the first interview, which went relatively well. And then I moved on from there. I met a bunch of the traders on the floor. And the idea of the interview process is that it all kind of culminates with talking to Mike. Um, you know, obviously it's his firm. He's the he's the one who's gonna have the final say.

So the interviews with all the traders, you know, I met some people, talked about what they did, and then got the interview with Mike. Um, you know, now that I've gotten to know him, he's quite intimidating at first, I will admit. Had that interview with him, um that went well. And then, you know, had I think a couple weeks went by before I heard anything. But eventually I got an offer letter, essentially, um through email that said they'd like to have me as part of the class.

came in in September and, you know, from then on, I was I've been at the firm. So, you know, we can talk about the exact process of starting out at the firm as well. Yeah. W let's get into that very shortly. I would just like to ask you before beforehand. Sure. What were some of the questions that you were asked? Like some of the the more important questions.

I think the most important question and the most important thing you really want to bring into an interview like that is whether or not you have trading experience. You know, you don't necessarily need to have traded a live account, I think, to get a job at a trading firm, especially one that focuses on kind of developing you from the ground floor. You know, we're going to teach you really simple setups, we're going to teach you risk management and things like that.

But you always want to have some type of an edge over the rest of the competition, you know? This is just like any other career. It's extremely difficult to get a job at a place like this. So you have to have something that sets you apart. So when you get asked the question, you know, have you ever traded before? Do you have any type of live trading experience?

If you can power out right away, you know, a sheet filled of trades that you've made, you know, in the past three to four months, you have specific setups that you know that you like. Those are the questions I think I responded to. that really put me ahead of other people. I knew that I was extremely focused on the psychological aspects of trading. I wanted to leverage my own personality. I wanted to take advantage of my confidence.

I wanted to really challenge myself and and pick the hardest thing that I can do and strive to excel at it. So a lot of the questions were really centered on, you know, do you have any trading experience? You know, what really sets you apart? And you know, if you have really good answers to those. That can be the difference between you continuing to be a retail trader who might struggle and then, you know, landing a seed on a professional trading form.

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Alright, well let's move into your experience starting out on the desk. So, uh if I understand correctly, you were put on a demo account to begin with. Uh can you tell me a little bit about that and also I'd be interested to hear about how much guidance did you receive on what to trade and how to trade it, etc. Yeah, definitely. So kind of like the process here at the firm is you come in

You know, you get set up on the demo account, and we have about one, two, four meetings a day as the developing class. We come in at nine o'clock and we do a pre-market prep. You know, we all talk about our trading ideas, what is in play, what could we potentially trade on the day. Then we come in at eleven o'clock and that meeting is when you go over your trades that you made in the morning.

1230, we do reading the tape, where one member of the developing class will show a video, a recording of their screen on any particular day of a setup they took, a trade they missed, a stock they liked, etc. Then there's a 130 meeting, which is um we call it the playbook, you know, aptly named after Mike's book. And again a developing trader will come in and say, all right, this is

you know, an outline detailed version of a trade that I made. Um, this is how I have edge, this is what I did, this is what I need to do better next time, etc. So that daily meeting process is definitely where the educational foundation comes in. We, you know, SMB has a ton of

Videos that we produce and content that we put out that really tight tries to control the molding of a new trader. You come in and you learn, all right, how do we trade a stock that just had earnings? How do we trade a stock that just had a catalyst? How do we trade a stock that you know, super extended from VWAPs, super extended from moving averages.

You know, why are we trading this stock? Does it have a certain type of relative volume? What makes it in play? You know, what's its average daily range? Things like that. So all of those little mechanical aspects of trading. were taught to us at those daily meetings. You know, we'd come in at nine o'clock and, you know, early on, my risk manager Carl Carlton, who um he runs the educational program for the developing traders.

He would start us out and be like, okay, this is a really good example of something that you guys should pay attention to today. And for this week, we're gonna focus on changing fundamentals plays. So We're only gonna watch stocks that had earnings today or have some type of news catalyst, an upgrade, something like that. And those are the setups that we're gonna focus on this week. And then after that.

The next week or a week later at from that, you start a new setup. You know, we're gonna see we're gonna trade only high beta stocks or we're gonna only trade marketplace. So there is some type of you know, streamlined structure that's been designed by Mike and designed by the top traders at the firm that kind of is designed to funnel you into good trading habits. The interesting thing that ended up happening with my class is right around the time that we were settling into specific setups.

our attention was completely changed to focusing on those marijuana stocks that started to just go completely parabolic. Because that sector got so hot that there was so much opportunity day trading that Bella, Carlton, you know, the top traders on the desk thought that it was most important for the developing traders to pay attention to that. So next thing you know, we're coming in every day.

You know, trying as new traders do to say a good idea, you know, it takes a long time to figure out what a really good stock looks like. Especially pre-market. And we were just having our ideas tossed down. They're like, no, you guys need to watch Tilray today. You need to watch CGC. You need to watch Kronos group. Like those are the stocks in play. That's what we're focusing on. Until they reach some type of daily top or go completely parabolic. We don't want you guys focusing on anything else.

So next thing you know, we really just had our time and attention encapsulated by these outsized risk-reward opportunities that really don't come along that often. So that kind of led us away from I think the traditional streamlined process. Like I've talked to some of the guys in the class before me.

they had like a very diligent way that they went through the training process on the demo. You know, they specifically learned these setups, they specifically moved on to this setup next. They developed their playbooks and it was all very regimented. But y things just started getting crazy while I was on the demo with both the pot stocks and then the Q4 sell-off. Next thing you know,

We can only put focus on marketplace. No, we need to be trading the ETFs. We need to be trading high beta stocks. That's what's in play. We're having these crazy ranges and the spies. Are w is the market gonna go into a recession? Like what's happening? Is this a bear market? all of a sudden, you know, things really heated up and that structured guideline that we had originally had when we first started out kind of fell to the wayside and it was almost a learning from experience.

How long were you trading on demo for? It was three months, so Started in September and then I went live December tenth of twenty nineteen. Okay. And did you have to meet certain criteria before you were enabled to trade real money? Or did everyone come off demo at the same time? Yeah, everyone came off demo at the same time. It's kind of a time based thing. You know, he I think Carlton could have kept us on the demo a month longer if he wanted to. There wasn't really a set time.

As soon as he felt that, you know, we were coming to the meetings with good ideas, our review processes were good, you know, we have all these stats. We upload our stats every day to a program called Trader View, which is, you know, a great way to track your trades. I think every trader should be doing that, you know, having some type of of way to really quickly statistically analyze your your decision-making process.

So, you know, we had three months of stats to look at. We all had a general idea. I think there were seven of us in the starting class. Um, we all had a general idea of like where our niche was. You know, we had a couple guys who like trading low float stocks. couple of guys who only traded earnings plays. I was trading a lot of like market based things, you know, high beta stocks, trading the market ETFs'cause they were so in play at the time.

Um so I think it was kind of like a qualitative thing where Carlton realized that, you know, it it was time. Let's throw them on the demo and and see what they can do. And how did your stats look? prior to trading real money, like your stats from demo trading, were you were you seeing progress? Did it and was that reflected in your your theoretical equity curve?

Oh yeah, definitely. I mean this is this is a a running joke for me around here. I think on the demo I was, you know, successful to the point that almost thought that losing wasn't possible. Just because it got to the point where the market was so crazy, there were so many opportunities, and it wasn't like I really had any type of

real money on the line. No, mentally speaking, I think there's a huge difference between trading real money and having actual skin in the game and basically playing an arcade game.

You know, oh I'll buy a little more here, oh I'll sell a little more here. Oh, that was my stop, but eh, I think I'm still gonna be right. So maybe I'll just buy a little more and let it go. Because at the end of the day, you're not gonna get stopped out. It's not real money. You know, no one really cares whether or not you win or lose today. So I think some aspects of the demo really negatively impacted how I developed.

just because we weren't regimented in the way we were doing it. And then we went live and it was like deer and headlights. You know, all of a sudden real money was on the line. The market was extremely challenging for even the top traders. and very quickly came to realize that, you know, the demo's not really trading. It's important to have skin in the game'cause the emotional differences between both of those things are So categorically big that you really don't even realize it.

This is probably a good point to break down your equity curve from coming off demo to trading real money up until now. So If I understand right, you lost money for a round about seven months pretty consistently once you came off demo. Is that right? Yeah, definitely. That's certainly right.

Speak to speak to me about that. How come you were losing money? I mean, do you know the reasons why? Um, like looking back on that? Yeah, definitely. So, you know, what really ended up happening was I didn't have any type of consistent strategy. You know, I was trying different things. I didn't know specifically where I was putting on risk.

I couldn't tell you every variable that I needed to have in this specific setup. You know, I wasn't trading things top down. You know, I wasn't looking at daily charts and going all the way down to minute charts. You know, I really just wasn't being sophisticated that the of about the way that I was putting on risk. was having a couple green days in a row and then I'd have a big red day. So it all really came down to

My selectivity, you know, I wasn't picking the right setups for me. Risk management, you know, for those first seven months, I'd argue I had terrible risk management, you know, was having stop out days, you know, when you're at a firm. We you have a intraday stop loss limit where if you hit that number, you're done for the day. No, I it's obviously put there to prevent us from blowing up like you know what happens to people all the time.

was hitting that stop limit, you know, repeatedly, was looking for leverage, you know, trying to trade triple levered ETFs, trying to have that huge first four figure day, you know, really just did a lot of things that just aren't good habits for a consistently profitable trader. And it took me a long time to kind of get out of my own way and and cut out a lot of the noise that I was doing and refocus, study my stats.

Look at what I really was doing well. Only trade those things that I was doing really well. Recognize what really led to. this being the s kind of setup that I wanted to trade. You know, am I just throwing on risk here for no reason because I think I can make money? Is there some type of real tangible setup that I think has variables that are backing up. You know, is this a daily chart breakout?

Is this, you know, higher time frame technical level? Is there a real wind at my back for this trade? Is this a trade I've taken before? And I wasn't asking myself those questions for a long time. And You know, that's kind of just a product of there being a lot of things going on at a day trading firm. You know, it wasn't like I was specifically focused on one

corner of the market, you know, when you're trading with a team and you're trading with a bunch of other traders, someone will throw out an idea and you'll pull that chart up and you'll be like, Oh, uh um this looks like a good opportunity. I'm gonna throw some risk on here. It was kind of lackadaisical and You know, where I was looking to exercise my edge. And really didn't know where that edge was in the first place. And that was a product of.

thinking I needed to trade SPY because I'm I was a market trader, you know, trying to trade triple levered ETFs, trying to trade volatility products in a, you know, arguably a pretty crazy market at the time. and never really getting a handle of what I could do that worked. You know, am I taking setups for my mentors who are consistently profitable? Am I really focusing on doing the things that work?

and not doing anything that I know doesn't work? Am I diligent in my review process? Am I aware of my intraday triggers? Do I know what gets me on tilt? So a lot of that introspective Analysis just wasn't really happening for those first couple of months because I was so caught up with the fact that I wasn't doing as well as I thought I was going to be. And you know, when you get into that

kind of performance slump where it's not like I had a bunch of consistently profitable track record to fall back on. You know, for a lot of really good traders, if they run into a slump and have a, you know, a bad month or, you know, a bad couple of months. they have some previous period of consistency to fall back on. As a new trader, you don't have that. So it almost feels like you're drowning and you don't really know at work.

You haven't figured that out, or maybe you don't put in the work hard enough. So for me, it just ended up being, I got to a point where I said to myself, Okay, I need to completely change what I'm doing. I need to only focus on the best setups for me. I need to really diligently plan out what those are. I need to talk to my mentors more. need to be more verbal about, you know, what gets me triggered and and what really

gets me set up to be involved in the right stocks. Okay. So one of the things you just said there is that you realised that you should focus more on your best setups. But that's also very difficult to do when you've been trading for seven months and consistently losing money because I I guess you you're not really too certain what your best setups are. How did you

How did you approach that? How did you start to think about which setups gave you the most edge in the market? Yeah, so what I was finding was I knew that based off of what I had learned from, you know, my mentor here at SMB and from Tom, I had a general idea of what specific types of setups worked. I was either taking a bunch of setups that weren't even in that playbook in the first place.

You know, as far as there were certain market conditions that I would look to get involved on, you know, just for for clarity's purposes, like if there's a big negative a thousand tick in in the futures, you know, am I gonna fade that move? Am I gonna look to trade opening range breakouts in the market if we're above the overnight high? So like those specific details weren't really there.

But I knew that if I only focus on those details and then started to try and build consistency from them and stop doing the things that didn't work. Then things were going to get better. So really what I ended up doing is I would at the end of the day, I would look at the chart of the best setup of the day. Like let's say Apple was the best stock to trade that day. I would look at it.

go in and annotate and write specifically where I was looking to be involved, you know, where I should have bought this breakout or where I should have bought this wedge or, you know, could have bought this dip, this technical level. And was really diligently detailed about how I could have traded that symbol. And then over the course of several months, had developed.

you know, a big book of all of these setups and had continued to take them in real time while also losing money doing other things. So for a while, when I first started out, I was losing money doing things that didn't work. Then I started losing money because I was trying to get way too oversized, looking for leverage.

being too tight with my stops and just missing moves because, you know, I wasn't wide enough or something like that. And then all of a sudden I was losing money because I was trading those setups well, wasn't risking enough on those good setups, and was still taking all of the other trades that I knew didn't work.

you know, was losing money in symbols that I was unfamiliar with, was losing money on feeler trades, losing money on ideas that it didn't even deserve any risk in the first place,'cause the stock had no volume. So It's kind of been this progression of how do I get out of my own way? I know what works, but I'm not doing the things that work.

I'm doing a bunch of other nonsense and, you know, it's funny to look back and think about how long it took for me to really figure that out. But once I got to the point where I had statistics where I knew that I traded high beta stocks well. I knew that I had a system for how I can trade these high beta stocks. If I don't do anything else and focus in on where I have edge,

Now things start to get a little bit more interesting. And all of a sudden, you know, I'm having green day after green day, not having any big dot size losses anymore, starting to mentally fix my psychology. You know, I'm feeling better about

the prospect of being a trader. I'm feeling better about, you know, my own capabilities, my confidence is coming back. And it took a long time to get to that point. And, you know, I'm obviously it's only been a year. I'm I'm still struggling with that all the time. Yeah, well I mean personally I would say that seven months isn't really that long.

It feels it can feel like it, especially when you're losing money. Absolutely. When you're there day in, day out. But you spoke about having a system now or developing a system. to trade these high beta stocks. That's kind of seems to be your specialty, uh, for the time being. Can you describe this system? Can you describe your playbook trade as it pertains to high beta stocks? Yeah, so you know, a little bit more background on my system, I guess. Looking back at those stats

I was losing money at times when the market just really wasn't moving. You know, my stats from 12 o'clock to two o'clock. were abysmal, you know, consistently losing money during that time, giving away my mornings, setting myself up for a poor afternoon. So I cut out trading in the middle of the day,

And then I realized that the area that I had the most edge in was trading momentum moves off the open in the first hour of trade. And that's when, you know, the institutions come in and they're pushing these high beta stocks. And, you know, real volume that drives price is coming into the market. So that's when I started to really focus on, okay, most of my edge is happening.

off the open in the first hour in high beta stocks. Let's only do that. Let's develop some type of patterns that we like where, you know, this works for me. I've seen this happen several times. I can get in for this momentum move and this is how I'm gonna make my money. So you know, for clarification purposes, let's say you have a s a high beta stock that

You know, it's gapping up on an upgrade and has a really tight pre-market range. Let's say it's pre-market range. If it was Apple or or Baba or NVIDIA or stock like that has, you know, 20 to 30 cent range. And right off the open, ton of volume comes in. They sweep and take out that pre-market low. rebid the pre-market levels and break above the pre-market high, you know, the old dip and rip.

That is one of the setups that I love to trade. You know, you see that a lot in high beta stocks. You know, it's not always necessarily a very quick little peak below the pre-market range. There's obviously some sophistication to it. And a little bit of nuance, and that's not the only setup I take. That's a good example of what type of momentum moves that I'm looking for in these high beta stocks.

If possible, we might dig up an example of this and put it in the show notes so some uh so someone listening to this has like a visual reference? Yeah, sure. Okay, great.

You've hinted at psychology a couple of times, uh, during our conversation here. And I know one of the things you've said in the past is that traders shouldn't underestimate the psychological aspect. How come? Because I think that it's so easy to, you know, get caught up in the idea that this is all systematic, you know, it's all patterns. It's all, oh, you buy these breakouts and you sell when you reach your target. You know, you s risk this amount per trade.

You only take good setups at work. And none of that is really taking into account that you feel a certain way when you make or lose money. No, anyone who denies that I think is fooling themselves. You know, I feel a certain way when I have my best day ever. I feel a certain way when I have my worst day ever. And those f emotions and psychological aspects that come into play.

aren't never gonna go away. You know, it's impossible to be robotic. Even the best traders at this firm, you know, you read their reviews or you you talk to them after a good day or a tough day, and it all comes down to, you know, were they in the right frame of mind? Were they putting themselves in the mental state where they could perform at their best? Did they meditate? You know, are they taking regular breaks to, you know, refresh themselves? Are they doing some type of best practice to

take their temperature. You know, th that's a that's a saying we have here at the firm, you know, you take your temperature and at fifteen, thirty minute intervals on the day and say, Okay, Maybe I just took a loss really early. Why did I take that loss? Was I in this trade because, you know, I was chasing the symbol or I had a fear of missing out or

You know, it was a boredom trait because there's not really anything else going on today. You know, all of those things are not really a product of your system, but they're a product of your personality and the way that you think about the day. I think that if you don't really focus on the fact that it's impossible to completely devoid yourself of emotion unless you're a strictly algorithmic trader. fighting your emotions, but learning to use them in a way that is productive.

and leveraging your own personality and your strength. You know, you don't have to avoid your demons. You know, Tom is pretty active on Twitter and he'll always talk about how You know, there's certain things that make all of us tick. There's certain things that get us happy, ther certain things that get us excited, sad, frustrated, angry, you know, overconfident.

All of those things are going to play into the role of a performance-based job. And that's what this is. You know, you can only be at your best if you put yourself in the right mental state. Dr. Steenbarger talks all the time about how there is an analogous relationship between us and professional athletes. Professional athletes, sure, you can focus on what are the plays that you need to run, lift, exercise, get your body in shape, you know, have the talent, be at peak physical performance.

But at the end of the day, there's a reason that field goal kickers miss the game winning kick all the time. There's a reason that basketball players miss certain free throws that could be game winners. And what comes down to is the mental aspect of your game there. And trading is no different. You know, you have to be able to put yourself into the mindset where you can perform at your best.

And the longer you spend not thinking about that, the more likely it is that you can continue to make those same mistakes over and over again and not really understand what's actually making you do that.

Are there any tricks that have helped you as of late or any practices you've been putting into place uh to help you with the psychological aspect that comes with trading?

Yeah, so I think the biggest thing that I do is, you know, I'm not trading from twelve to two. So during that time is when I reflect on the morning and prepare for the afternoon. So, you know Did I do a bunch of nonsense in the morning that Was I not involved in the right stocks or was I involved in the right stocks and just executed improperly?

Did something happen outside of work that has me, you know, off my basis today? Do I need to really look at my entries and exits in the morning and and figure out, you know, what was going on? Am I tired? Am I How do I have too much energy? Did I expect too much from the day? All of that for me is really done during that two-hour block where I can kind of refresh myself, go get some lunch, take a walk. prepare for the you know, the close and and really figure out where I'm at mentally.

So that's one step of it. And the other two steps are, you know, pre-market prep, relatively the same thing. You know, I take my energy levels. I think about, you know, am I tired and how am I feeling? Did I get a good night's sleep? Did I eat well the day before? um taking physical journaling notes of all of that and keeping track of it.

Doing the same thing on the clothes, reviewing every one of my trades, again, you know, taking my temperature at the end of the day. Am I happy with how the day went? Am I not happy with how the day went? Why? What can I put into practice the next day to change that?

So it all really comes down to review. You know, I do things outside of work as well. You know, I exercise as much as I can. I try to go to the gym every day, keep myself in a good good headspace. My girlfriend is always on me about eating Eating better, I don't say I eat the best, but I d I do try. Um and you know, that's all plays into getting yourself in, you know, peak performance state.

You were talking just before about how uh we you threw out the words best day and and worst day. I thought it might be fun just to ask you if you could talk about I I presume you probably remember this fairly clearly. What has been your worst day? And then also what has been your best day? Can you talk about the specific trades which you made or or led to uh you having your best and worst days? Yeah, definitely. So what I'm actually gonna do it

I have a computer right here in front of me. I'm actually going to bring that up just so I can be more detailed. Great. I'll start with my best day ever because it's fresh. It was actually just last week. And it was in t it was in Tesla. So we were kind of chatting about that previously. Okay, so coming in on the day, you know, I had the idea in my head that, you know, Tesla was going to provide this huge opportunity for me.

I wanted to be involved. I I needed to develop some type of plan so that I could be involved. I didn't want to miss it. My mentor was Talking about how this is the trade, this is the trade, like we have to be involved in this. This is the time when we can potentially make our months to outsize risk reward opportunity. We need to be here for this. Why are we thinking this coming into the die?

Well, I guess if you you know, for anyone at home listening, if you pull up the daily chart, you could see that Tesla had gone from at this time, it had gone from Basically 400 to 550 in a week and a half, pulled back to 500, and then was gapping up again almost to 600. So obviously it ended up going way more parabolic than any of us probably thought, just a few short weeks later. But at this time,

When a s you have a stock that's gapping up and is so far extended, you know, it's definitely in play. It has this crazy amount of volume every day. That's really what we're looking for at the firm. You know, those are that's really where the firm makes the majority of its money on these super in-play names. So I knew that it had the potential to be a huge opportunity coming in on the day. I knew that it deserved my focus.

Um, I knew that it could potentially run, you know, 20, 30 points. And this is before the rangers really started to open up in it. Thinking about size wise, you know. Anyone can do the math in your head. If you get 100 shares of a 20-point move, you can make two grand. So was thinking in my head that there was a big opportunity in play. Didn't necessarily know how it was gonna set up, but knew that I could be there for it.

So what ends up happening is early on, it gaps up and sells off 15 points right away in the first one minute bar. And everybody's piling in short because they think it's going to gap and fail. So gaps up, dumps 15, 20 points, then it starts to wedge underneath VWAP and really compress right around like 565. So this is on January 22nd.

So it's really starting to compress and everybody's pressing short, looking for the breakdown, looking for the breakdown. And as I'm watching this happen and, you know, I'm seeing all the other traders at the firm, you know, getting super short, getting super short, I'm thinking ahead like.

the character of Tesla over the previous couple of days had kind of been when you think it's gonna break down, it's probably about to rip. Like it's more than likely just going to do exactly what you don't think it's gonna happen. And I kind of just said to myself, using, you know, if then statement.

I said if this is going to go parabolic today and maybe today's the blow off top where it goes to 600 bucks, if that's going to happen, it's probably going to wedge and break out from the wedge, get back above VWAP, and just rip. So I entered long five sixty-five. Caught that next 15 point move. continued to build into a position for the next half hour or so and then eventually told myself, okay, I've settled in from good prices. I'm gonna see if it can go parabolic.

And lo and behold, it ends up just absolutely ripping to 595. And I took it for the whole ride. I got out up up where like somewhere around 590. And At that time, I hadn't been at my best day yet. You know, at that time I had made a good amount on it. I was excited about the day. You know, it was up up big for me, but you know, not my best day ever yet. But had in the back of my head, you know, it just went parabolic. If there's a short in this later today,

And I nail that, then now maybe we're talking about best day ever material. You know, so it's so easy to like get super excited when you develop some consistency because you do know that those days are gonna come. You know, this m those days are gonna come where you can have your biggest day if you prepare properly and hit the the best opportunity. So, you know, was out of it, didn't really do anything with it.

was kind of sitting, waiting, waiting, waiting, and then towards the end of the day it starts to break underneath the long consolidation that it put in in the middle of the day. And my mentor and a bunch of the traders around were all saying, Maybe, you know, maybe it goes underneath 585 and starts to feed on itself. Maybe anyone who bought up there thinking it was going to gap up again, you know, maybe it just starts to kind of collapse.

and there's a thirty another thirty point trade on the table. So it starts to collapse. I wasn't really trusting it'cause like I said, if you shorted Tesla in the hole, you're almost guaranteed to lose money for a long time, even now. It starts to roll. I shorted a little bit. And then it really just starts to accelerate and feeds on itself, dumps below VWAP and and next thing you know, I look at my PNL and it was the best day ever'cause I covered down there.

uh once it really started to get extended. You know, I like to get out of trades on big explosions like know long extended volatile candles are usually a good idea to, you know, sell into strength or cover into weakness. So that's kind of the methodology going behind exiting that trade. But yeah, that w that ended up being my best day ever. What do you mean when you say feed on itself? So by feed on itself I mean, you know, the characteristic of Tesla at the time had been

very difficult for the stock to go down. You know, dips were being bought feverishly, you know, any type of consolidations were breaking to the upside, and it was in the process of going parabolic on a a daily timeframe. So in my head I'm thinking the only way for this move really to stop is for there to be some type of big selling, some type of, you know, big volume candle that comes in and breaks below.

You know, V we like to use VWAP as, you know, volume weighted average price as um a confidence level, you know who's in control on the day. So a big big red candle underneath that level. is when all of a sudden we're starting to think, okay, let's get involved in this to the short side. And by feed on itself, I mean other people are thinking that as well. You know, because everybody's looking for the backside in this trade. Everybody's looking for Tesla to finally collapse.

if it's going to feed on itself, more and more sellers are gonna come in. They're gonna continue to just hit the bids and bring the price down. And then what was originally a five point dropout that could have been, you know, a dip by turns into a real strong selling down move that leads to, you know, breaking down to the lows of the day. Okay. Uh and do you have your worst day in front of you?

I do. Oddly enough that was yesterday. Oh no. And Well, your best day and your worst day all within a couple of days of each other. Yeah. And I you know, that's that's definitely a product of um I am in since I've gotten to a point of consistency, I'm in the process of sizing up my account. So we do it where

Essentially, you know, every two weeks or so, every month or so that you're net positive, you get sized up, let's say 20%, 25%. So Theoretically, you know, I've been bumped up I think three times, so That's all happened kind of rapidly since I got consistent and the sizing increases, you know, pretty quickly. So the losing days I have now are are way bigger than the losing days I had over that first seven months.

You know, which is all just a function of size. Can I just interrupt you though? I I didn't catch that. What do you need to do to get clipped up? So it's kind of like a relative process, but you Here we basically just establish it with our risk manager. For me, every 10 days that I'm net positive. I get bumped up across the board twenty five percent. So my size increases twenty five percent, my position sizes increase, and my daily stop limit increases twenty five percent. Okay.

So as a function of that, in recent times, losing days that I've had have been completely way bigger than that first eight months because my size now is, you know, 75% bigger. So as far as that day goes. You know, reliving this so early. Everybody who's had a losing day like this knows how I'm feeling about it. I think what really ended up happening was it was kind of a function of, you know, I had been looking for that top in Tesla. I had been looking to make that trade.

I'd been game planning at home in my head, you know, what's it gonna look like if I nail this? You know, how am I gonna have this huge, huge day? How am I going to beat that biggest day ever? What's it going to take? And kind of got caught up in that. And considering my best day ever had been in Tesla, I kind of started treating it like a friend, you know, like an old friend, like, oh, I'm gonna trade Tesla today. It's gonna go great.

And and next thing you know, you realize that Tesla kind of just became a completely different beast. when it started to go above like six hundred bucks. So I'm coming in on the day, Tesla's my main focus. It ends up being the only thing I trade. And I essentially just battled it all day, you know, couldn't get my size right.

Couldn't find couldn't really get on the right side of the move, was trying to short it while it was going up, was getting squeezed too far, just wasn't involved at the right times. And next thing you know, You know, it opened up at 675 on this day. This was Monday. Opened up at 675. Basically went directly to 735. You know, no no bounces or no drops for you to scale out of risk. You basically just get completely smoked.

So took a bunch of losses trying to short it there, then it started going down and I flipped, started thinking about buying it. So it really went into those old habits of the things that, you know, used to lose me money and you know, like we said, seven months, a year, that's not that long. You know, I still fall into old habits all the time. And, you know, that's what I have to battle day in and day out. But at the end of the day, you know, something that my mentor always says that.

is a really nice way of spinning, you know, taking a full stop day, is you have that risk for a reason, right? You've earned throughout developing some type of consistency, you've earned that level of risk. So when you lose that amount of risk You have to sit with that and feel what it's like to be responsible for that much money. You know, taking that loss is only gonna make it that much easier.

to make more than that in the future. So I'm trying to make sure that that makes sense. Like you have to feel what it's like to lose that money, to make that money, and really understand what it means to make that money. So I'm trying to spin it in a good way, especially now'cause it's so fresh. Um But yeah, that's you know, that's really the back back ground b behind that, just trying to be better and

you know, thinking really hard about what I was doing wrong and trying not to do it the next day. Yeah, I like that. That's that's an interest interesting perspective and and you know a nice way of looking at it.

Last thing, let's talk about one thing you're trying to improve on at the moment? Or if it's not one thing, maybe just sort of what what things you're kind of prioritizing right now and also what steps or what processes you have in place to uh ensure you have the best chance of improving on those things.

Yeah, I think the most important thing for me right now, considering I'm in the process of dealing with bigger size and and going through, you know, the mental give and takes of what it means to see those PL numbers changing more rapidly than they ever have is It comes down to I need to be more selective all the time. You know, I need to know why am I in this specific stock? Why am I not in it? You know, was I unprepared?

Was there a specific reason that I wasn't involved? So selectivity is a nice, you know, word to group in all of those feelings. And then also just being really diligent with the way that I manage my rip. You know, as I get sized up, I need to think about things in proportions. No, I should still only be risking a third of my stop on these types of setups. I should only be risking a quarter of my stop on another type of setup.

and not thinking so much about the money, thinking more about sticking to the process that got me the bump in the first place, you know, falling back on those really good habits. with how I'm placing my risk. Is this a playbook setup for me? Is this in my system?

you know, does this trade deserve more risk? Is this just a feeler trade? And maybe it doesn't deserve this much risk. So right now my main focus is really like just ironing down specifically what trades deserve the risk that I've been allocated and really looking to capitalize on those outside ri outsized risk reward opportunities. Um because you know those are the trades that lead you to your best days. A lot of the days can be grinding it out.

But at the end of the day, you know, my goal is to be prepared and ready to go when the market does hand us these, you know, once in a month opportunities. Cause at the end of the day, some of the top traders here at the firm will talk about all the time where three, four, five, six opportunities in the entire year are where they made the bulk of their money because they're just incredible opportunities. So the goal for me is, you know, to not lose.

you know, get out of those habits, make sure I don't return to some of the things I did in those first seven months, stick to the things that got me to consistency, you know, selectivity, patience. being focused on my mindset and my process, sticking to specific setups, speaking to my mentors, and just being very process oriented. That's, you know, and the goal.

And that goal really will just keep me centered and, you know, let me handle, you know, taking those worst days ever. Because you can fall back on that that process and those good habits.

Excellent, man. Let's leave it there. Ryan, if someone listening to this podcast is keen to follow you on Twitter, can you please share your handle? Yeah, my my handle is Trost Trades. T-R-O-S-T, T-R-A-D-E-S. Okay. Good stuff. All right, Ron. Really appreciate it, man. Thank you so much. Uh you've been uh excellent to speak with and I think there's a lot packed into this one for anyone who's just starting out.

I'm sure they'll pick up a few tricks from from going back and listening over this, maybe even a couple of times. So uh yeah, again, man, thank you very much. No problem. It's been a pleasure. You've reached the end of this episode of Chat with Traders, but rest assured there are more episodes.