305 · Julian Komar - When Story, Fundamentals, and Technicals Align

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Trading in the financial markets involves a risk of loss. Podcast episodes and other content produced by Chatwith Traders are for informational or educational purposes only and do not constitute trading or investment recommendations or advice. Drawdowns for me does not automatically mean I'm holding a stock and it's going against you or you know, my got my whole portfolio is going against.

I'm a trader, I'm not an investor. So that means I can also lose a couple of times in a row. You know, losing, I don't know, five times in a row, seven times in a row is absolutely normal for me. So trying out which works in the market. So and When I'm in a drawdown, it's not a big issue. I learned that over the years for me that I'm uh very or that I have enough conviction in my abilities as a trader and also in my trading system that I can make a comeback.

What more frustrates me than sitting in a drawdown, to be honest, is if I make mistakes. This is this is what really drives me nuts. Or um for me, it was more like you know learning how to deal with with your emotions through the time, you know, distracting yourself. Not thinking about that, having something outside of trading out out of your or outside of trading to distract yourself. And this is something you learn over time. There is not this one

secret concept or whatever where I can say, okay, this is something you have to apply and then then you you can deal with drawdowns. It's more like, okay, you you suffer a lot of drawdowns. Um, you go through them, you learn from them, uh, you find out more about yourself, you know, how are you dealing with that?

The trader destroys their own edge. It's not a big issue to find a trading system that has an edge. You know, trend following it gives you a basic edge and you can build rules around that and make money with the system. So but it's it's a trader that has to execute the system. The trader itself is the biggest enemy to be to become successful. It's mostly that you destroy the edge by making mistakes, emotional mistakes.

This is episode 305 on Chat with Traders. Thanks for tuning in, Tessa here, with my co-host, dear friend, and awesome interviewer, Ian Cox. Although I trade options and have added index features to the mix recently, my introduction to trading way back began with stock. Stocks are really the backbone of how I think about trading. Options are built on them as the underlying and equity index futures are ultimately tied to baskets of stocks. So for me, everything still comes back to stock.

Stocks stocks. So if you love trading stocks, this episode is for you because today Ian chats with Julian Comar. A seasoned German trader with nearly two decades of stock market experience. Growing up in Germany without a financial background, Julian became fascinated by stocks as a teenager. He moved past complex German trading products to concentrate on U.S. equities.

Specializing in momentum and growth stocks on the daily timeframe, he blends fundamentals, technicals, and story analysis to uncover opportunities. that put him in the best position for high potential setups and writing powerful trends. As a disciplined breakout trader, he prioritizes risk control, market trends, and intuition gained through decades of experience. We've included more information about Julian in our show notes.

So without further ado, ladies and gentlemen, please allow me to introduce Julianne Komar from Germany. Julian, um I'd like to uh welcome you to Chat With Traders. Thank you very much for having me. Where where are you? You sound like you have a an accent. Yeah, uh I'm very much in the north of Germany, so I'm living close to Hamburg. Uh, in in Germany for my whole life. So I'm I'm originally from Germany and that's why you maybe uh hear the accent in my voice.

So tell us a little bit about uh what was it like growing up in Germany and especially as it relates to your interest in the financial markets, kind of how did you get exposed? I I I don't have any any comparison uh to other countries, how it is to grow up there, but uh

Um I can talk a little bit about my my own journey. So I was I was always interested in in finance and um you know I'm I'm not coming from a financial background and also my parents and Where I gro grew up, uh have no financial uh background. So but I got very interested um in financials and also in uh stocks when I was uh sixteen. So I'm thirty nine by the way. And um that was also the first time when I bought um a mutual fund.

Very classical, you know. I walked into uh into a bank and said, Okay, I want to uh invest some money and what what could I do? And that was the first time. when I got in contact with banks and also consultants, financial consultants. And I remember one thing and this is always uh yeah in in my mind. And I asked them uh after I bought the mutual funds, I asked them, okay, you you will call me if these things go down.

But uh guess what? They never ever called me. And that was also a very yeah a key event where where I uh learned, okay, I have to take care about uh myself. You know, at the time a lot of people got interested more in stock Um one of the biggest names at the time was uh Deutsche Telekom, so uh communication uh company at the time. But then of course around the two K, so around the two thousand crash, etc.

um all the Germans went away from everything what has to do with investing. But I still um or I I I I was very interested in that because um I saw that always as a challenge. And um I got more and more in the direction of stocks. In Germany, we have a we have and we had a lot of different trading vehicles, and I tried them out all, to be honest.

You know, I traded uh I traded uh CFDs at the time. I traded um uh something which I think only the Germans have. It is something like certificates, so you can buy a certificate. And it it could also be a leverage certificate or a leverage option, something like an option. And uh I also tried that out. And at the end, I um yeah, I I got into stocks and got more and more interested in stocks.

Because uh I I was always fascinated by technology companies and in in general, you know, getting to know companies and uh trying to find out more about companies. And um that brought me in the direction of stocks. Then I yeah, traded mostly German stocks, European stocks, and um later then I discovered the the US market, um, which uh I trade. Uh only. So I only trade US docks.

Was the main thing that got you into stocks because you liked the story behind the companies? Uh or I mean, how did those other products go for you, those German um trading products? Uh Was it difficult to connect with or they you know, tell us a little bit about them? Yeah, they they are very complicated. So um

Uh these certificates as an example, you know, they give you a lot of leverage, but if you are an inexperienced trader, uh you have a lot of ups and downs with that. And it's complicated because they have very similar uh characteristics like options. So you have something you know like a strike price, etc. But they are not and they are not traded on a regular option uh option exchange. And it was very, very uh complicated and that's one of the reasons why I walked away from that.

and uh focus more on stocks. And as you said, you know, I was very interested always in in the companies itself, you know, what are the companies doing? What is their business model? Why are they successful? And um I'm I'm you know, I'm I'm coming from a from a technology background. When when I was sixteen I I got out of school.

So I I have no high school uh dip diploma or anything like that. Um so I got out of school when I was sixteen and I got into a traineeship. I started to be a media designer. And um that was also the time when I got when I got uh connected to to a lot of technology topics, you know, uh companies like I Omega, Adobe, and so on and so on, you know. people who are thirty, forty years old maybe know that m know know the stocks and also know the companies.

And um I always had some connections with them. And that also brought me of course in the direction of stocks and more technology stocks and innovative companies. Because I always felt connected to them and I always got interested in: okay, what are they doing? What is the story behind that? What makes them successful? And what are the products that they develop? And after my traineeship, I got more and more also in the in the direction of product management.

And that's why I always had a connection also to what are companies doing, you know, what what is the product, what makes the product successful, what are people like about the product? And this is something I use still today. for for my stock trading. You know, I'm always analyzing the story behind the company. I'm always analyzing the fundamentals behind the company. I want to know why something is successful. And um that always leads me in the direction of of finding high potential stocks.

Uh, how far down the the rabbit hole did you go uh with analyzing company fun fundamentals? Did you focus a lot on that? I mean, were you were you into the technicals early on or kind of how did your early journey with that go? I I always go through uh three layers. So technicals is always the most important for me. Um there is one reason, a very simple reason. That the stock exchange uh trades the future, not the present, right?

So and the technicals itself and when I speak about technicals it's about relative strengths. So how performs a stock in comparison with the indices, um, how is the the accumulation of a stock uh when you watch the volume or when you watch uh other indicators. And um you know the technicals always show me what are the big institutions doing. And this is a first layer. I'm always looking at that.

to make sure that institutions are accumulating the company and have a high demand So and when the chart and the technicals appeal to me and when I say, Okay, this is something which which could be interesting, I wanna find out what are the institutions seeing that I am not seeing right now. And then I'm go to go to the next layer, the fundamental So and fundamentals for me means always growth. I want I want to know how is the company growing in sales and if

the company is profitable also in EPS. You know, a company which is growing fast, like twenty percent, thirty percent, forty percent uh in sales year over year, that that is catching my attention. That is something where I go to the next layer, to the story, because I want to find out what drives the sales. You know, what is the story behind the company? Why are people buying the stock and the products of uh the company itself? So and I'm always going through these three layers.

But and this this is uh something I found out over the years in my trading career, there are different times in the stock market, and there are also different types of stock. in the uh in the stock market. And not not in every yeah, not in every stock market cycle the same type of stock. attracts uh the big money from institutions. So there are some times where you know more typical can Slim stocks. So that means stocks that have

big earnings growth, big sales growth, uh big future estimates, etc. That um there are times when when these type of stocks are in demand and uh people want to buy them. There are other times where what I call sales growers are in demand. So companies usually having only big sales growth and reinvesting all their profits into uh into the sales growth. So into growing market share and into growing

uh the sales of the company. And there are other times where more story stocks exploding in the market. Sometimes companies that have no sales at all and also no EPS at all. And I I'm trading all these three types of stocks. But I'm always going through these three different types of layers to find out.

what are investors and institutions seeing that I don't see? You know, it's it's a little bit like a detective game or it's a little bit like a big puzzle. And this is what I enjoy. You know, I spent I would say 90% of my time doing research. uh and try to find some some great stocks in the market.

Mm-hmm. So um can you give us an example of these different types of markets that you encountered uh um throughout your history and share with us, you know, what kind some examples of the stocks that highlighted that particular time period. Yeah, sure. I mean if you if you think about NVIDIA, for example, right? And NVIDIA was always

A company which uh w which came from a total different business. They transformed their business in the last couple of years, became very successful with their product. Uh so with these uh With the GPUs for AI data models, etc. They had an enormous uh growth in EPS, so in earnings per share, and also in sales in the last couple of years. So this is a typical cancelum stock. Right. And um there are market periods.

like uh twenty twenty or uh even even before twenty twenty, you know, twenty seventeen, twenty eighteen, where a lot of uh or where NVIDIA uh was was uh very or heavy in demand. in the stock market. So this is one one one type of a typical cancel stock that I traded or Tesla is also one of them. So mostly companies that you know as mega cap companies or also as large cap companies today.

And sales growers, you know, sales growers are companies that are mostly a little bit younger, so especially in the Yeah, let's say first five years uh after their IPO because they they are reinvesting all their profits into growing market share and into uh growing sales. So One of or one of one good example from the past I remember is uh Zscaler, CrowdStrike, uh so cybersecurity companies that you know. Uh Cooper is also one of them, which came up in my mind.

That's not listed anymore. So companies, uh, you know, software companies that that grew extremely fast but were not profitable at the time. And um yeah, and story stocks, you know, I'm I'm trading this year a lot of story stocks. Um one one of the story stocks that comes up in my mind is uh Eva. Uh Eva uh ticker symbol A E V A um is a LIDAR stock, you know, and um I discovered that very early this year.

It's not a pure story stock to be honest, because they also have a big sales growth and uh some EPS growth, not so big, but uh huge uh sales growth. And um

The first thing what what caught my attention with AIVA was really um the technicals. You know, it made a big move. It's it created a wonderful high tide flag pattern. And I saw that in in the charts and then I got deeper into the stock and uh to try to find out okay

why is the stock exploding so much on the upside? And uh then I found out uh about their LIDA technology, then I got deeper into that and uh uh thought about okay what are application areas of lighter technology and then you automatically come to areas that are you know, f future big growth areas like robotics, like self driving cars, like drones, etc. All of them need lighter technology.

So and then you look at sister stocks like Allstar, which also had a big move this year, and um then you find out, okay, the sister stocks are doing good as well. So and um then you discover a stock like that and then you you you enter it. Um I'm I'm mostly breaker trader. How important is the sister stocks in helping you determine

uh whether to get in on the on the main stock. I mean, is that is that a very good sign when the sister stocks are also moving in that direction? Do you do you look for other companies uh to trade as well? Absolutely. You always want to stack the odds on each other, right? You want to increase the odds.

to make a good trade. And it starts with a market. If you have the market on your side, that's great. If you have the if you have the sector of theme on your side, it's great. If you have the sister stocks on your side, it's great as well.

I always say, you know, I always say to people, you know, you don't want to trade a lonely survivor. A lonely survivor is a stock, you know, where all the sister stocks are going down, but only one stock is moving higher. Sooner or later it will follow the other sister. But if you have um if you have a stock and you see that multiple stocks from the same theme and and sister stocks are setting up in the same way and moving higher, it increases the odds dramatically to make a good trade. And um

You always want to do uh you always want to look at that. So I don't or I rarely trade a stock. Uh which is moving higher, but the sister stocks are not moving higher. So so how do you determine who's the leader of the pack of that group uh and focus in on that? Is it just looking at market cap size or what? No, no, no. Market cap has nothing to do with that in my opinion and also my experience.

It's more relative strands. So what is the fastest mover? What are uh institutions accumulating the most? You can see that in the volume. If you see big spikes in the volume and you see a big price move. um you can assume that there is a heavy accumulation going on. And very often you can see that. So if you if you if you look for example at Eva and Allstar, so so two LiDAR companies.

Our star was was moving higher, but not so strong. Aiva was a leader because it was already broken out of their uh out of their consolidation. It was moving higher on high volume, etc. It also had better fundamentals at the time. And um so technical leadership is very important to find out what is the leader. And the second thing, and this is more difficult to be honest, is to find out, okay, what could be a leader from the fundamental and product.

And this is very difficult to be honest. Um from the fundamental side, it's easier because you have some companies that are growing faster in sales or maybe have better EPS numbers, but it always should go hand in hand with the price. But from the product perspective it's it's it's almost impossible because, you know, I'm not a specialist of LiDAR technology or I don't know, uh semiconductors or whatever.

Um I can only try to find out something in interviews on YouTube or when I listen to um conference calls or something like that, but it's very hard to find that out. So technicals is really the most important. uh m most important way to find the leader um in in stocks, yeah. Have you ever watched a stock explode and thought, if only I had the capital, or sat on the sidelines because your account balance felt too small to matter? Good news.

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Uh-huh. I see. So so the leader shows itself just through the technicals. Um but then couldn't that mean that uh maybe a super small microcap could show up uh as a quote the leader because it's having interesting technical um you know, uh chart patterns. Uh but it I mean how do you determine that? I mean you have a minimum dollar volume size per day to say okay well this is sufficiently big enough because uh to where the institutions can can get in on this stock.

Yeah, yeah. I I I definitely have thresholds. So um it really depends a little bit on the theme itself and and also on on the stock um You know, not not automatically the stock with the highest market cap is the leader. Very often you find younger companies that have, you know, more innovative technology, et cetera, that that become the the leader. But one thing what you want to make sure is that the stock has institutional quality.

So I I call that institutional quality. And that means it has enough volume for for institutions to get on board. So my threshold, it really depends a little bit on the theme, right? Because some themes are not mature enough and then you have microcaps and nano cap stocks. But other other themes are more mature.

And then I want to see twenty million or maybe a hundred million US dollar traded volume per day. So if you if you multiply uh multiply the price with the average volume, then you have the dollar volume or turnover in a day. When you have a very, yeah, let's say uh young A very young theme like drone. You you don't have the the big drone company right now. There are a lot of very small

Yeah, let's call them startups with um, you know, three hundred million market cap or something like that. Then I also go down to let's say five or ten million US dollar traded volume per day. But everything below that is It's hard to trade to be honest. And when it comes to price, of course, you know, I prefer higher price stocks.

something like 10, 20 US dollar. But in in some of uh in some themes you you sometimes have a leader that only trades at four US dollar and that's also fine to me. So for me the liquidity is the more important aspect.

when it comes to to finding good stocks. But it's not automatically the the the stock with the highest liquidity or or market cap that is the leader because over time some stocks also I don't want to call that get overowned, but you know, they they they are not the leaders anymore, but they have a lot of market cap.

And institutions are just buying them because they need a very high liquidity, but then other companies are catching up. We see that right now, for example, in cybersecurity stocks. You know, CrowdStrike is not the leader anymore. For me, it's more rubric or uh maybe Z Scalar, um they they are catching up right now with newer technology, with newer products, and they become more and more and more liquid over time.

While the big ones are rather slow movers and they have older technologies. You know, money is always rotating in the stock market. Um so that's why why I'm also focusing on lower cap. Uhhuh. And so uh while you're looking at the big uh the big whales, are you keeping an eye on all the small uh companies in that sector uh uh and patiently waiting for them to what catch up? Do you have a certain threshold that say, okay.

It looks like uh, you know, these big cap stocks are n not performing as well. So and I see these younger companies are now having a bit uh larger relative strength um than in the past. And is that Are those the the metrics that trigger you from jumping in from one company to the other, or are you also heavily dependent and looking at the fundamentals and what's going on the news and the you know quarterly earnings, that kind of thing.

Th there there are different dimensions on on this question. So um maybe maybe let's start it with how I'm discovering companies. You know, I'm I'm a bottom-up trader. So that means I'm running through my scans um at least once a week. uh sometimes also multiple uh times a week, but mostly on Fridays I'm doing the big screening stock uh screening stocks routine. So and I I see what the market delivers in in the screeners. What are the stocks that match

criteria and I have different screeners, so more technical screeners, more fundamental screeners. And I see what is coming up. And when I see that, you know, multiple stocks from a same theme or sector popping up in my scans. Then I'm getting more interested in that and try to find out what could be a leader. And inside these scans that I'm running, I have some some basic criteria when it comes to relative strength as an example.

You know, I I um I run the most scans in in market search. Um so the software from from IBD, I also use some.

investor baily uh investor business daily criteria in these scans like the RS ratings so they they are rating all the stocks that they are tracking um by the relative strength and this is one of the thresholds you know I'm not looking at stocks With a relative strength rating below 90. So that means it outperforms 90% of all the other stocks tracked by investors business daily. So this is a basic criteria.

Were were you using um this uh format and when you were in the market like twenty years ago? I mean,'cause you've been in a long time and how d how did this evolve over time? Yeah, de definitely not. So I learned a lot in in the last 20 years. Uh and I learned more and more and more uh to find out my my my uh my own approach. Um How how how did it evolve? Um I started, you know, as I said, you know, I started mostly uh with German stocks and then European stocks.

So I I've I've found I found some traders over the time where I learned a lot from. You know, I learned from one guy I learned risk management, from the other guy I learned screenings for stocks, story analysis, e uh and and fundamentals, etcetera. And, you know, I always found out, okay, what works for me? How can I come closer to the biggest winners in the stock market?

to find them. And um I learned I learned almost everything from other traders over the time. And I developed my own scans, you know, because I I uh did a lot of research about my own scans and about the companies that I'm trading. And I always try to find out, okay, how can I come closer to the biggest winners uh in the stock market.

It's a big evolution uh process over time. You always learn something, you you get feedback from the market or you learn something from another trader and then you see, okay, is it working with my trading approach? Is it also compatible with me, with my personality?

And then you test that and you find it out. Um and if the answer is yes, then I'm I'm using that also in future. You know, I'm I'm trading differently than three years before. And I'm also trading totally differently uh than twenty years before. You know, I think trading is is is an ongoing journey and you always learn something new which you can include into your trading. And that makes it also a lot of fun and uh a lot of uh enjoyable. Uh how did uh two thousand eight um

How how was two thousand eight for you? And what were you trading back then? Th there were two thousand seven, two thousand eight was a financial crisis, right? Mm-hmm. Um Yeah, I I can remember. I I I always remember one thing and that was shorting bank stocks. Um but but to be honest, you know, I I was more in in um yeah, inexperienced trader at at the time.

So um two thousand seven, two thousand eight, um I I was trading Europe European stocks. I can remember that I shorted a Netherland stocks bar BAM Group. uh was it and it it was moving down very very fast and I learned I learned a lot about bear markets of course um and I I remember one thing very very good and because I I recently uh repeated that also and told that to other traders. Uh when we had the big correction uh this year. Volatility is something which is

Or can be extreme in down moves. You know, you can wake up one day and and uh you see the index is down 10%. You know, and if you have a lot of exposure during this time on the long side, as an example. you know, um you you can lose a lot of money. So and this is what I learned in in the low uh in in the most bear markets.

Um but you know I'm not a long-term investor, so don't confuse that. You know, I'm not a typical cancelum guy. So my my typical holding period is weeks to months. You know, I'm I'm trading more position trades and swing trades. When when when uh when I'm in a bear market or when when a market is in a bear market, I'm mostly in cash or I'm short.

So and this is what I learned also from all the bear markets. Doesn't matter if it's two thousand seven with with financial crisis or another bear market.

It's the best way to be in cash or to be short. I mostly short um sector ETFs, indices or commodities, sometimes also Bitcoin. But uh rarely, rarely uh stocks to be honest, because there is always this crazy supermarket mentality in the stock market that people are always buying stocks when they when they go down. And you have a lot of choppiness in individual stocks. And on the other side, I'm also not shorting individual stocks a lot because um You can have a buyout and this thing gets

brutally against you and uh you you you can ha suffer uh big losses. So I'm mostly in cash. That's what I learned from from the last bear markets. I'm mostly in cash or trade, yeah, sector ETFs or industry. On the short side. Um, so uh in one of the quotes that you have in uh in the uh paper that you shared with us is you said that uh you like to focus on the ability to sit through drawdowns without stress. So how do you how do you do that?

focus uh in i in drawdowns without stress is mostly being in cash to be honest. So I mean drawdowns drawdowns are normal periods, right? So If if or l let's say it different. So drawdowns for me does not automatically mean I'm holding a stock and it's going against you or you know, my got my whole portfolio is going against

I'm a trader, I'm not an investor. So that means I can also lose a couple of times in a row. You know, losing, I don't know, five times in a row, seven times in a row is absolutely normal for me. So trying out which works in the market. So and When I'm in a drawdown, it's not a big issue. I learned that over the years for me that I'm uh very or that I have enough conviction in my abilities as a trader and also in my trading system. Um that uh I I can make a combat.

So what what more frustrates me than sitting in a drawdown, to be honest, is if I make mistakes. This is this is what really drives me nuts. You know, I have not a big problem uh to to sit in a drawdown um and and uh come back after a time. Sometimes, you know, sometimes I'm sitting

couple of weeks or even three months in a drawdown. So drawdowns, by the way, means also you're sitting in a in a sideways period, your where your equity curve is always going up and down and up and down. And then you hit one of one big winner or two big winners.

And then you are uh coming back and your equity curve is printing a new high. So, you know, for me it is more like Or um for me, it was more like you know learning how to deal with with your emotions through the time, you know, distracting yourself. Not thinking about that, having something outside of trading out out of your or outside of trading to distract yourself. And this is something you learn over time. There is not this one

secret concept or whatever where I can say, okay, this is something you have to apply, and then then you you can deal with drawdowns. It's more like, okay, you you suffer a lot of drawdowns. Um, you go through them, you learn from them, uh, you find out more about yourself, you know, how are you dealing with that? And um today it's absolutely normal for me.

Yeah. So um share with us if you can, um, during what time period uh did you have your worst drawdowns and uh what did you learn from that process? Um my worst drawdown was this year to be honest. Um my worst drawdown was the January 27 this year, where we have this deep uh seek event. Um I was heavily invested in data center stocks. And then all of a sudden almost everything uh opened with a gap down of Uh twenty percent. So and uh I I was

I was really sh um I I remember the day very good. So I w I was not very shocked at the beginning because you know I I'm I'm I'm I'm waking up here German time, so that means I have the pre market um very early here in Germany and I woke up this morning and everything was down seven or nine percent in pre market and I said to myself, yeah, okay, let's see, let's see what will happen.

And then when we came closer to the opening of the session, everything went down fifteen, seventeen, twenty percent. You know, I held all these stocks at the time, Vertiv, Celestica and so on. And um Then the market opened. A lot of stocks opened down uh twenty percent. Then they bounced a little bit, and then I started to to sell my my positions uh one after one. And on the day I was down seventeen percent. So that there was That was my my worst drawdown ever. And um, you know, personally.

Of course, you know, it it feels terrible to be honest, but it's not it's not the money or it's not the drawdown itself which feels terrible. It's more like I made a mistake. That is one one point, and I will come to that uh in a second. But the other side, you know, the other uh the other emotion that came up in me was I lost.

uh you know that that's what I always say, you know, I I lost a championship. I lost i the championship against myself, you know. This is your I I was exactly in the right stocks. I was trading Yeah, in my in my performance zone at the time. And then all of a sudden there this event came and it really felt felt like okay, I lost. I lost the championship. So that was a feeling. And then a couple of days later I was trading again because uh, you know, I I was uh or I saw some some opportunity.

So and the mistake that I did was um I was too heavily involved in the same type of stock. But not all of these stocks were coming from the same sector or industry group. You know, I traded nuclear energy stocks at the time, data center stocks, semiconductor stocks, but they all were connected to the same theme. So and um that was a big mistake. I learned from that. I um today I I don't trade uh more than three stocks at the same time from the same theme, industry group or sector.

And um yeah, that that was definitely a big learning uh opportunity. Again, you know, this is the feedback the market gives. And you have to take this feedback and you have to sit down, do your home homework, get confidence again, and then uh come back. Yeah. Mm-hmm. Interesting that you had been in the market for over twenty years and only very recently uh discovered this uh this issue and then made adjustments.

I I would say I would say, you know, I don't um I I I have been in a lot of different situations where the market really hard uh gapped hard against me. I have been in in in dramatically uh gap downs also against But there was one thing which I never discovered in the past, and that was, you know, that my whole portfolio was gapping against. You know, I have been in in uh situations like the flash crash, I have been in situations like Fukushima, I have been in several situations, I have been

in a in a gap down fifty percent against me uh with uh credo technology which which came up in my mind on earnings. I have been in a stock which was moving down 70% intraday and I got stopped out at the right time. But uh I never experienced a situation where my whole portfolio was gapping down, you know, everything in my portfolio was gapping down. I never experienced like

like that. When you have, you know, when when you have a situation like Fukushima or uh something like that, you have some stocks that make bigger gap downs against you and some stocks are not making bigger gap downs against. So but I have never been in a situation where where almost everything what I owned gap so hard against me. And that that made or that that was really a unique situation for me and something new to learn, right?

I I noticed on the documents that uh you sent us that uh you're diversified in quite a uh quite a few areas including Bitcoin and gold and silver. Um was that an after effect of of your experience earlier this year? Um uh uh as the effect of diversifying or had you been in those assets for quite some time?

No, no. Um again, so I'm usually holding uh stocks or also commodities uh more weeks to months, you know. Winners, I hold a couple of weeks to maybe three months, four months, something like that. You know, losers I sell within days. So and um last year um it was a great market for gold, to be honest. We had big trends in gold.

And that was one of the reasons why I traded gold. You know, it was it was a leading market for me and I was able to place very good uh risk reward ratio bets. Uh, you know, when you when you can when you can put in a stop loss of one percent in gold. Um, then you can trade a big position size. And gold also, I would not call it diversification because I'm not diversifying my portfolio, to be honest.

It's more like uh, you know, there is a great market which is on the move where we have momentum and uh it can move a little bit more independently from from the stock market. That's why I sometimes trade also commodities. Yeah, Bitcoin is also something I'm trading um when it offers the right setup. You know, the setups that aren't trading, they appear in all of different markets.

There are some markets which I don't trade. So Forex is one of them, you know, because they are moving a little bit differently. But um Bitcoin, gold, Um sometimes oil, especially on the downside. I personally like to trade uh oil more on the downside. Um they they can sometimes set up in the right way and then I'm trading them, but I'm never looking at my portfolio in case. Diversification, something like that. Mm-hmm.

So let's talk about the setup. What what do you look for exactly in the setup and what triggers you? Cause in your in those documents you sent us. Um, it looks like you can go long periods of time just uh during your drawdowns or flat performance, waiting for the right time to go in big. And you mentioned um in these documents that uh you'll go you'll use margin to uh so when when do you y do that? Uh what exactly triggers that action?

Yeah, first of all, you know, I'm I'm I'm running uh my own market trend model. That's important. I also not invented that by myself, you know, I tweaked that, but I uh also learned that from another This is very important to find out, you know, when do I have an edge in the market and when not. So in its very simple uh trend model.

um based on moving averages. And when I see a good trend in the stock market, so when my market trend model switches to green, when I see that there are a lot of stocks reaching new highs and we have a higher number of stocks above the MA200, that's a time when I'm becoming interested in trading stock. So and then what I'm basically looking for is a stock with a high momentum creating a good pattern.

So and what what are the patterns that I'm trading? It's it's very basic stuff, right? I'm I'm trading uh flag patterns, I'm trading tight consolidations in a chart. When a stock, you know, when when a stock makes a big move like 50 or 70% in a short period of time. And then it gets gets very tight and starts to consolidate around the exponential moving average eight or exponential moving average 21 that I use.

um and builds a very tight consolidation that I'm getting really interested in that because you know I'm I'm I'm usually not trading what I call the first initial momentum move, so the first rally of fifty to seventy percent. But what I would like to see is that the stock pulls back a little bit, that institutions are supporting now the stock around key moving averages. And when the setup's right, when the thing is really, really tight and compressed.

in price and then breaks out on the upside. That is usually uh the pattern that I trade. And that can be in a larger pattern, like a cotton handle, for example. That could be uh a shorter uh

pattern like a flag pattern where this price is only consolidating maybe uh three weeks and um then I'm getting in. But you know, sometimes also When I thought about uh 2020 uh 2024, SMCI as an example, you know, the stock made a big move, a big rally, and then went sideways, I think, for a couple of months and then broke out from such a base. And then I get into that. So I'm a breakout trader. 90% of my trades are breakouts from classical chart patterns.

Um in the documents you shared with us, uh you say in there, poor execution destroys the inherent edge that a trading strategy provides. So um what kind of execution are we talking about? I mean, the difference between the bid and the ask or just uh the price of the day? I mean, how do we what do we know about uh an execute? What's a good execution and what's a bad one? Yeah. No, it's it's not bid or uh uh bit or ask prices, so so I I'm not not so short term. Um

You know, when I I always say, you know, the the trader destroys their own edge. It's not a big issue to find a trading system that has an edge, you know, trend following. It gives you a basic edge, and you can build rules around that and make money with the system. So, but it's it's a trader that has to execute the system. So and and the trader itself is is the biggest enemy between uh or the the biggest enemy to to become successful.

It's mostly that you destroy the edge by making mistakes, emotional mistakes. Um I I give you one example, right? I think last week I I opened a trade in a in a stock called I I N O D. It was a very strong day on that day, and I bought uh not only this stock, but I bought also a couple of other So and in hindsight, when I did an analysis of a trade and and asked myself, okay, was it now a really good trade or not, then I became very

quickly to the conclusion, no, it was not a great trade. It's it was not meeting hundred percent of my criteria. It was a mistake. So and this is what I mean by bad execution. You know, when when when you are trading, you're always influenced by emotions, by other things that go in around. And you are coming very quickly out of your performance zone, or what I call the performance zone.

You know, and then you start to do mistakes. You you trade mediocre setups, you you get sloppy in your stock selection, especially if you have a very good run. Um uh in in in your in your trading and this is what i mean by bad execution and the trader itself destroys the edge no no one else destroying the edge. It's always that you have to look at your own shoes and s and ask yourself, okay, why I'm performing not as I would like or as I think I could do.

And um then you have to do the homework and find out how you can execute your trades or your trading strategy in a better way that you are, you know. meeting more your rules and your criteria. I'm not a robot, you know, I'm a human and I make mistakes and I will always make mistakes in trading. And I have no big problem with that because

The the monetary impact of my mistakes is very limited and I can undo mistakes very quickly, so by closing position or whatever. But of course, I also know traders who make mistakes and You know, it costs a lot of uh money because they are not able to close the trades uh very quickly where where they are uh starting to lose a lot of money. So so then um the self sabotage, is that could we call the call it that? Um of what being sucked into a trade uh because of

what, overconfidence of how you did in the past and and and oh, this time it's different and the ego takes over. I mean what what are the qual what what happens there? Yeah, absolutely. It's it's self-sabotaging, you know. I I know that from from my own, it's and to be honest, the toughest periods in my trading is not a drawdown. It's when I'm performing good.

This is the toughest period for me because I have to sit really down, do my mental preparation every day, and really try to focus on not becoming overconfident. Because when I had a very good run, like this this May as an example, and when I had a very good run, I start sometimes to take more mediocre setup.

And then you start to come into a drawdown or you you you lose multiple times in a row because these setups are not working the same way. And this is something where you always have to sit down, focus. Manage yourself so that that you are not getting sloppy in your in your stock selection and try always to Try always to be yeah a hundred or a hundred ten percent focused.

on your trading. And to be honest, this is really, really hard work. To do that over a long period of time, you know, weeks and months, is really, really hard. And this is th this is, you know, why why I and also a lot of other traders always say, you know, trading is a mental game. It's ninety percent a mental game because um you always have to to put so much energy in managing yourself.

in managing uh your reactions, in in being mindfulness, et cetera, so that you are not self sabotaging uh yourself. You know, overconfidence is a big problem. Uh-huh. So is it simply just uh putting in a stop loss order? Is it can we simplify it to that level or what other uh factors are involved?

Yeah, the pro the the problem is never the technical side, you know. Everybody knows how to put in a stop loss order. Everybody knows how to to close a trade that is losing. It's just clicking a button, right? But uh it's about the mindset. When you have a trade that goes against you, and I'm not speaking about myself with twenty years experience, but if you have a more inexperienced trader, let's say with three years or five years experience.

And th they they have a high expectation about a trade.

And then they are starting or this trade goes into the other direction and then hope is taking over, right? They hope, ah, okay, it's now down ten percent. Oh, it will come back, let's give it some more time, etc. And then Sooner or later you're sitting in a in a in a big uh in a big loss, you know. And I have

I mean it's it's always a cliche, right? You can read that on social media, etc. Use stop losses and uh you know um Let only a stock go seven or ten percent against you, etc. So, but I have seen traders who who sit for weeks in big losing positions and were not able to close. You know, every time when when your when your emotions are taking over, it becomes more and more difficult to do good trading decisions. That is self-sabotaging, what we spoke about uh before, right?

How much does position sizing uh play into this? You know, I learned risk management very, very early in my career. I learned that from one of the first g guys I I was working with. I'm I I have a very simple rule of position size. You know, in good market periods I invest ten to fifteen percent in one position, in one stock position.

In in more bad times, let's say when the market is going sideways, I invest rather five to ten percent. So I'm I'm also using different position sizes. Sometimes when I have a high conviction trade, but more Or in in very mature and very liquid stocks, I can also go up to twenty twenty percent position size. So Tesla as an example or NVIDIA, I had last year I had a twenty-five percent position in NVIDIA. Uh but only because, you know, I was able to place a very tight stop loss.

And uh it was a very liquid name. When I trade more story stock, I can also go down to 5% um portfolio share or you know uh five percent of my trading capital in a stock. The thing is what I'm always asking myself every time when when I take a position is what would I do if the position gaps twenty or thirty percent against You know, and what what is the damage to my trading capital? And when I invest, you know, when I invest ten percent or fifteen percent in one uh position.

Then it gaps down 20% against me. That is a loss which is it's not great, but you can come back from that. So, but if you have a big position size, you know, like 30 or 40% in one stock and it gaps 20% against you, then it's getting more harder to come back from that. And um that's something, you know, I see with with younger traders, they always use too much leverage.

They jump into options, they take big, big position sizes because usually they wanna make money very fast and that leads to a disaster uh because you know, it it is always a two-sided situation, right? If this thing gaps against you, you never the and you never think about that, but it can happen. Um then um yeah you suffer a big loss. Mm-hmm. So did did you suffer um big early losses when you first started out and and learned these lessons early or

I never crashed an account to be honest. I never crashed an account because um I I learned risk management very, very early. When I started out as a trader and and when I became more interested in stocks, it was not, you know, twenty-three years ago, but uh a little bit uh later when I got interested in stocks uh stocks I I met one guy from the UK. He was a technical and very systematic trend follower.

And I was fascinated by that because he was, you know, he he had a rule set and was just trading by rules. And he was always emphasizing risk management. Always, how important that is. um how to size positions in the right way, et cetera. So I learned that very, very early from scratch. And that's why I never crashed an account. So but you know, of course I had up and downs in my equity curve.

Um and it's it's always a process over time. And what I learned um over time is the more you you you eliminate mistakes in your trading, you know, like for example, uh letting losses run or something like that. If you il eliminate such a mistake, you're getting better and better and your equity curve goes goes more up in a steady way. You know, it's never about changing the trading system itself. It's more about eliminating mistakes over time. And then you make progress also as a trader.

Of course, sometimes you also have to to to really change something in your in your trading system if you have no risk management at all, for example. Uh but it's more like or for me it was more like a journey um uh of eliminating a lot of mistakes over time and then become better and better and better uh in in trading.

So uh have you ever encountered a situation where you go through a drawdown uh through a for an extensive period of time and then you think, well, maybe my system I need to tweak my system. I need to uh adjust it. Uh or do you just stick with it because you've been doing it for so long and you're comfortable with it that you know eventually it'll turn around. Yeah, I'm I'm totally honest with you. I still have today moments where I think, oh my god, do I really have an edge?

So I mean it's you know this the self-doubt and always being at a very high level in your confidence as a trader is not easy to be honest. And um It's not, you know, it's not so much the drawdowns or or or sideways periods. that uh, you know, that has an impact on my confidence. It's more like, you know, making mistakes or making not the progress that that I would like to see or trading not up to the level where I think I am as a trader.

These are the moments where I have doubts about my abilities as a trader. I always say that. You have to reset yourself, you have to bring yourself back into the performance zone. And this is something which I'm always doing, you know, when when I when my equity curve is going sideways, let's say for four weeks as an example.

my my my self or self-doubt is taking over slower and slower and slower and then I'm bringing back myself into the performance zone and that mostly means to make a reset to not uh to to not trade for a couple of days, then to go to my rules again, to go to my trading journal, to have a look at my chart book. So I have a chart collection of hundreds of charts.

where I exactly noted, okay, this is the pattern from a big winner, et cetera. So and then I'm getting more and more my confidence back and then I start to trade or take new trades. Uh but but I'm a hundred percent sure that that all traders sooner or later have um moments where they have doubts about their own uh trading and uh about their own trading skills, but it's more about managing yourself in my opinion and to bring back yourself into a performance zone.

Excuse the last interruption here. This is Tessa. We hope you're enjoying this episode so far. If you love the podcast, Please give Chatwith Traders the best review you can on whatever platform you're listening from. This will help us to keep the episodes coming. Also, if you haven't subscribed to our email list, please hop on to chatwithraders.com and click on subscribe. so we can keep you posted of information that may be of importance. Thank you. Now back to the chat with our guests.

Well, it sounds like you have a a great faith in your system, uh, given that uh the kind of position sizing that you would take with NVIDIA or Tesla or or any stock, right? Yeah, it's not so much about the system itself. I mean the system is very simple, right? Um I have some some rules when to take profits, when to enter a stock, how to to manage the position size.

how to manage the portfolio, et cetera. So but you know, when I have a lot of confidence in a stock like NVIDIA or SMCI last year, um then I then I can also increase the risk a little bit, you know, instead of risking, let's say, zero point five to to one percent of my trading capital, I risk a little bit more, like, you know, one to one and a half percent.

Because there is a when you have a very, very good trading opportunity and it meets all of your criteria, then I'm also willing to to bet a little bit more and and also take a larger uh position size. But it has more to do with having conviction in the stock itself that i that this is the right stock at the right time uh instead of my abilities. But because I manage all the trades the same way. It's not that I

uh that I traded the NVIDIA uh trade differently than than my trade, uh than than other trades as an example. You know, but sometimes You know, I'm a discretionary trader and with with the with the experience when you when you have when you observe and trade the markets for 20 years, you develop something like intuitive.

uh in i or something like intuition, right? When you look always at the same type of companies for many years, you n you you intuitively feel that that this could be the right stock at the right time. And I learned one thing, and I know that a lot of traders will probably say no to that. You have to trust your intuition, you know.

I I I I I always say that, you know, my my my brain consists of three parts. I have the logical brain, I have the emotional brain, and I have something like a pattern brain, right? And sometimes when I look at a chart, it speaks to me. And is you know, sometimes I look at a chart and and the chart says to me, yeah this

I I cannot really say that, you know, but I have a very good feeling about a chart. And um that is something where intuition comes into play. And every time, every time when I when I when I went against my pattern brain, I lost money. Every time when I had a bad feeling about a stock, but I made a bet on that. And I bought the stock, it went against me. And every time I have a very good feeling about that and I increase my position size in the stock a little bit, then it's really going forward.

This is, you know, this is um call that a sixth sense, but I call that just experience and and intuition. And I I very often say that to people, never ever underestimate experience in trading. Really important. So um share with us a little bit about um your ex your trading performance over the twenty years that you've been trading in different types of markets and kind of how your performance has um changed over time.

Yeah, I personally don't like to speak so much about performance to be honest. You know, when you look at social media as an example, all the traders who post their performance on uh on social media And um when when I'm getting in contact with uh my followers and also, you know, the the people from my own uh community. I know how frustrating that can be to um to look at these results and probably never achieve that or probably um never be be or or compare yourself as a trader.

And I'm also, you know, I'm also suffering sometimes these moments where people post something on social media and I know some of these traders. Then I'm looking at a result and then I ask myself, Oh my God, why was my year last year not in the exactly the same way? So this is, you know, this is something where I personally don't don't like to speak uh about performance and because I know how much harm performance comparison can bring to traders.

So and you know, I I can share my results here from from May because I'm I'm also more openly with my community about that. This year was a very good year to be honest, until now. The only exception of course was the was the uh the January 27 uh Deep Seek event, you know. But uh for example, in in May we had so many great stocks.

that moved higher and I was up alone fifty percent in May this year. So but wow you know when when when I share that yeah when I share that with other traders Everybody's saying, Yeah, great, etcetera.

But I know that a lot of people look at that and say, Okay, is that something I could achieve? Why I'm not achieving that? et cetera, et cetera. And it causes a lot of emotions. And I know that from the discussions and with with other traders and also I know that yeah by by myself how frustrating that can be if you always look at at performance.

I see. So so you think that the risks or the dangers of of uh this comparison uh that other traders would make, so well, why can't I make fifty percent in May two? that risk is greater than what could be achieved through inspiration. Um, you know, the the flip side of saying, Hey, well now I have a goal to shoot for and maybe I can achieve that at some day, maybe not now, but um that we should focus in on more of the risks to the mind of a trader rather than the opportunities.

Absolutely. Absolutely. You know, I I'm working with traders one-on-one and in groups for many years right now. And every trader is differently. You know, and I I see that with with traders I'm working with. That they have total wrong expectation. And, you know, I'm I'm a different trader than other traders, uh, you know, because I have a different personality. I'm sometimes a little bit more aggressive or defensive.

Other traders um that I I know also very good are more aggressive with me. They they sometimes have uh better results or a higher result, not better, but a higher result. Then I know other traders who have a well who have not the same performance. They are more conservative.

So and how can you compare all these different things together? You know, if you just look at the performance numbers, it probably gets very frustrated. You know, I will not have the same performance like a day trader um maybe in a year. And uh, you know, in a long-term investor will not have the same performance as me as an example. And I think it's so important as a trader to find out.

What is, you know, what is my personality? How can I execute a trading strategy without doing a lot of mistakes? And then look at nothing else and just execute your your strategy. Be happy with with what the market gives you and what you can achieve as a trader. And um I I can also share another thing with you without mentioning any names, you know. When when we look uh sometimes at the US investing championship, and I have a high respect with everybody who

uh attends the investing uh championship. You know, I know guys from this investing championship which had one great year, but never ever again. So and this is something, you know, where just the focus on performance alone leads to total wrong expectations in my opinion and more to frustrations than than than getting or helping traders. uh with inspiration, right?

I I see. So so in other words, it's it's very highly customized to the personality uh and the and the person involved in their risk um factors um and what have you.

And that's what we should be focusing on, right? Sure, sure. And also, you know, if you just look at the at the performance results, you know, I'm not a day trader trading l Latin American stocks or Indian stocks or anything like that, you know. And um they will have a different performance like uh uh like me and you know if you are maybe an event driven intraday uh trader

um trading for a prop firm or a hedge fund, you also have a different performance, you know. I think the most important thing, and that's why I'm that's what I'm always trying to do is compete with myself and not comparing yourself with other traders. Every time when I when I do that, um, you know Every every time when I compare myself with other traders

It's always a feedback that, you know, I'm I'm probably looking for making more performance or anything like that. And you know, every time, every time when I change something in my trading approach. I start to lose money every time when I when when I change to a more short term view.

Where every time when when when when I think, okay, yeah, Julian, maybe you should hold your socks rather three to five days instead of a couple of weeks, something like that, you know, try to make more money. Every time when I do that. I start to lose money because it's not meeting my personality. It's not what I am. Right? Uh-huh. And this is this makes it so hard also to compare yourself with other traders.

Uh-huh. So what would it would you describe what you just shared with us as your biggest challenge as a trader, or is there something else? My biggest challenge as a trader is to always be hundred Or 110% focused on my trading and on my setups. This is the biggest challenge. And um I I mean you you know that that I'm also uh running a community, you know that I'm also very active on social media, etc. And I cannot shut Uh or I I cannot i isolate myself a hundred ten percent. That's not possible.

This is the biggest challenge. You always get influenced by everything, you know, by by something people post anywhere, by reading the news. Whatever, you you will be influenced and This is something where I always try to focus myself hundred ten percent on my own trading. doing always the same things over and over again, having a long term perspective on my trading, etcetera. And this is very, very hard to maintain over long

Period of time, and that is my biggest challenge, to be honest, right? Always being 100% focused, you know. Um, yeah. Fantastic. Well, Julian, I'd like to thank you for coming on Chat with Traders. Yeah, thank you very much for for having me. Yeah, fantastic. And how can our listeners get in touch with you? Yeah, um of course on social media y you can find myself on X or Twitter.

Um you can also find myself on uh Julian Comar dot com and um yeah, I'm always open to contact. So if people have questions or want to contact me, they can do that uh every time. uh on my website or uh on social media. Great. Thanks for coming on the show. Yeah, thank you very much. What do you think is the most powerful part of your trading process?

Stock selection and research, find high potential stocks and making no compromises, you know, saying no to ninety-nine point nine percent of all stocks. That is the that is the power. You can have a stock, you know, which which which gives you some some buffer of of of being wrong, you know, if if you buy a really, really good stock. and it moves higher and you and you bought it maybe a little bit too late or something like that and and it goes higher and higher. Um it's not a big issue. Um

So selecting the right stock at the right time, that is really my my biggest power to be honest. I personally think that every trader has something unique. Every trader has a superpower inside. Every time when when traders approach me and say, How can you teach me? blah, blah, blah, and we have one-on-one mentoring sessions and et cetera, they always try to be me. And I always say to them, stop doing that, this is bullshit, it's not working. I can also not be Mark Menovini.

Over time, we discover something together that they have unique powers. You know, I'm working with an Indian trader, for example, who is a software developer. He developed his own uh his own indicators, etcetera. I'm working with an Australian trader who has a lot of deep knowledge about Australian companies. That's an edge. You can use that, right? And it's the same thing with me. I'm I have a a natural connection.

to um to technology companies. I understand what they are doing. I am very motivated also to find out what is a quantum computer and how does the quantum computer work. So and this is something which fascinates me and this is you know why I can select stocks with uh which has has a very high potential. And that's also the reason why I sometimes can say, yeah, Google is probably probably not the company that you should or I should trade.

Here I asked Julian about his thoughts on AI currently and how it might impact us as traders these days or in the near future. If if if if a AI would be so good at the moment that they could trade the market in and out, we were all jobless, to be honest. Yeah. That that's a reality, right? Uh trading uh AI is not at the at that level. The the thing is what what I'm in what I am interested in.

a little bit in AI is you know maybe AI could do some research. We're discussing that uh in my own community and some people are trying that out and Uh for example, using open uh sorry, chat chat GBT to to um sum up business models. You know, what is the business model? Is that innovative, etc.? They are using something like that.

The answers Chat GBT are giving giving me and giving my members is absolutely nonsense. I mean, you can find that out in one second if you go to the investor relation website and have a look at that. You know, and I I don't see that at the moment, but that must not be that it will not come in future.

I I I could imagine that AI will play a role in future in selecting stocks or maybe also analyzing chart patterns. But you know, it's a bit it this is this is a question I recently discussed it also with a finance. Uh financial journalist Why is AI not doing all this technical analysis stuff for us? You know, chart patterns as an example. I don't know any software right now where AI is so good that it can really, really do good analysis of chart patterns.

Yeah. Yeah, but but because you know the how AI works. And uh how how machine learning works is uh in in in quotes is very dumb at the moment. It's not so intelligent and nobody of us is able to to finance a data model from Palantir or whatever. So um It's very basic and chart patterns itself in the stock market, it always morphs these these chart patterns, they have so small details sometimes.

uh which separates a good chart pattern from a bad chart pattern. And I mean AI is currently or or the models are not trained enough for that. And to to be honest, probably in twenty years we will trade differently. Yeah. I honestly think that it's gonna happen soon. Like AI is gonna get smarter and smarter. But it's more like, are we like what are we going to, how are we going to be prepared as, you know, um traders, especially discretionary traders, and maybe we can use it to our advantage.

when it gets to that level. But I always think that it could happen really fast and and we just have to be prepared and maybe make it our friend and use it. It's just another tool. But what is the consequence of that? Because you know, um I I don't recall the name of this effect. Ah yeah, the Lindy effect. The Lindy effect says. If something is there for a very, very long time, it has a very high probability that it will stay a long time. And you know, when when I go back in chart.

I have charts from seventeen hundred, you know, the South E bubble, etc. Uh the stocks are showing exactly the same patterns as today. So I think the the probability that the patterns will stay the same for a l very long time in the future are still very high. So and of course I ca I could see AI as a tool which is helping me to make better decisions as a trader, but I highly doubt that it will change the market itself because the AI models are still developed by humans.

Um we had similar situations in the past, you know, where everybody was screaming about high frequency trading, etc. That will change everything in the market, blah, blah, blah. The pattern patterns did not change.

So it's always the same thing and and I'm I I'm not sure where I read that, but There was an article or something like that where where the author exactly also wrote about that we we will probably develop AI algorithms that trade the same way as we are trading today, because of course.

we know how to analyse the chart uh chart patterns, et cetera, and we we are only using AI to do that. But AI is probably not reinventing a total new way of trading. That's why it will never change the market structure. So that that's how I I I see that. So um we are prisoners of our own minds. Here I was thinking back to what he shared with Ian earlier in the interview about one of his worst trading experiences.

relatively recently and I wanted to know how it still can affect a seasoned trader like himself and how he bounced back. This is really an exceptional event. I never ever experienced something like that. And um Th there are two answers for that. Um the first is from Paul Tudor Jones. who who who said uh you know forget your losses quicker than your winners because the losses are always i impacting you um more or or stronger than your winners and the second thing is um

The question is where is your focus as a trader? And um I always compare that with um with uh with a professional sportsman. You know, if you are playing on a field, soccer player or whatever, and you always think about a last game that that you lost, um, you will have a very hard time to play a A good game in the present. So the first thing what I what I was doing is to restart my equity curve for the year.

So that means I don't want to look at this big down day all the time when I look at my equity curve. So that is the first thing. So my my equity curve this year starts on February the 3rd. Of course, you know, when when I of course I have a second chart where also this dip is included, but you know, I don't want to look at that all the time because it will always impact me. And um Yeah, so th that was the first thing what I was doing, you know, remembering what Paul Tudor Jones said about that.

and also other interviews that I read where where people say said, you know, you you must really restart and look into the future and that also includes not looking at this big uh down day all the time. Right. And then the second thing what I was doing is really, you know focusing on playing the same game again. So it was not that I was trading differently from that time on. It was more like, okay, be more selective. That's one one point. But

um, you know, waiting for for the right thing. And I I analyzed that's maybe maybe a good point. I analyzed the event very, very much. I I went through all the trades. Did I do something wrong? Did I oversee something? Yes, okay, this stock was maybe a little bit more extended, etc. And and what were the learnings? And I ask myself, okay, is it something which could repeat in the same way in the next one, two years? And I came to the conclusion probably yes.

But um because I never experienced it exactly in the same way in the past, the probabilities are probably not so high that a that I will exactly experience the same thing again in the future. Yeah. I mentioned that during the interview that that I said something like, Yeah, you know, you have the most difficult or I have the most difficult periods uh when I was doing very good. so and

That's also something I learned. I plotted Bollinger bands on my equity curve to see when I'm really doing good. When I see that my equity curve comes back after it was outside of the Bollinger bands. for a couple of weeks and it's coming back into the Bollinger bands, that is a sign for me to take or to cut back a little bit exposure and probably get off margin, et cetera. You know, this is something I don't feel

But it's more a technical reminder for me to manage my emotions. And it's the same way, you know, I also have other rules around that. Uh for example, if my equity equity curve goes below the M A twenty, or if I have um a losing day where my portfolio is going down more than four percent in one day. I always have actions around that. You know, it it's it's the same thing like like um this deep sea.

uh or deep sea um event, you know, when I have a when I have a losing day like that, you know, I I I don't hold these positions very long. I want to get rid of these positions very quickly. Uh because um on one side I wanna be in cash. That's that's one one point. But on the other side, you know, um the longer you hold such a position which is going against you.

the more it has also an impact on your on your mindset. And if if you are in a bad period or if you are in a bad mood, mistakes repeat, you are making more mistakes if you are not 100% in your performance. What would you say sets you apart from the other ninety percent? And then do you believe is it possible that more traders these days can change these statistics? What sets me apart To to be to be brutally honest, uh it's the edge that I have.

Because you know, the ninety percent of the traders, they probably have an edge, but they are not able to execute that. And I went to so Yeah, I went through through so many years where I always improved my trading and made mistakes and learned from that, et cetera. And that's, you know, how I was able to bring the edge more and more to life. But uh that that sets me apart, you know, the the most traders

They they they they have an edge but they are not bringing them to life. And Maybe another answer to that is I always took trading extremely seriously. And that's something, you know, which I can see from from other traders today. They are not trading they they are not taking trading serious enough. They always think, yeah, I can do that, you know. Aside from everything else and I you know, I can be the best sportsman and I can be the best

father, mother and I can, you know, uh I have all the information about the newest Netflix series, blah blah blah. You know. No, you can't do that. You know, trading is Trading needs so much attention. You are you are learning a new job. And you know, I've been part-time trader for so so many years.

And trading was always extremely and I play I I I planned my life around trading. You know, I have been on business trips and I was sitting in the morning in a hotel room and in the evening in the hotel room. and planning my trades and sometimes I was not at a company event because you know I I I needed to to do some trading work, etc. It's it's really, you know, passion and that I really, really know that at the end I will be successful with that.

But do you also believe that no you know, for the rest of us, um, still developing that, you know, we always hear these statistics, oh, ninety or, you know, ninety or ninety five percent of traders fail. But these days I think there's an advantage because we have a lot more um we have a lot more tools that we never had ten even just ten years ago.

a lot more information, a lot more mentors, you know, ac at least access to trading communities and mentors and all this information. So with all this, um, do you think that you know, that y you might see a change in the statistics in the in the coming years. I don't think so, to be honest. I don't think so. Yeah, because more information, better tools, whatever will not make you a better trader or it will not help you. You know, I I I I could also trade with with you know w without any tools.

Right. It's not about tools, it's not about monitors, it's not about hardware, software, whatever. It's about, you know, taking a very simple trading system. There are so many trading systems out there, even in books or magazines or YouTube or whatever, but nobody is is able to trade them. They all have an ad. So but it's it's really about, you know, discipline, it's following the rules, building up confidence and conviction in yourself, in your uh trading method.

Finding something where you're compatible with. And it's the same thing like you know, hundred years ago. And uh that will not change, it will not change with tools. And you know, I mean we are seeing that also with uh with these robot robot trading services or whatever. It does not make it it does not mean that that they are more successful than dish discretionary traders, because you know, people can override their own systems, etcetera. It's always about the human factor.

And that will not change in my opinion. And I see that with young traders. Um, I I don't see any change change with that. More information is not helpful. I I can I can say one thing from my experience with working with traders. The the traders who make the most progress that I work with, they are the quietest person. They are very systematic in how to learn trading. They have very realistic expectations how long it takes and what it takes.

Yeah, they they are very strategically uh going through this learning process of training. They know exactly what they have to learn, they they know um what are the challenges, etc. And the people who mostly are very loud. And uh and and want to make money very fast, they they are probably will not make it very long time. We've reached the end of this episode of Chat with Traders, but rest assured, there are more episodes. Love it if you leave a-