In this episode you will learn that

• Mark’s view on how trading is timeless
• Brian expresses how important confidence is key in your system you’re using
• This is not GET RICH QUICK

• What trading in high frequency really means
• The hottest markets we’re trading right now (check out the FGBL and FGBX)
• Trading with a small account (what markets to trade with a $5,000 account)
• Plus, where to hang out with us live, in-person!

If you’re a Forex or Futures trader, you’re not going to want to miss this episode!

Troy Noonan: I think the number one failure point is trying to trade it before you’ve mastered not only the system but just some regular common sense things about the markets in general. You have to be able to mitigate your risk exposure to the market. So we say, “Don’t overtrade. Don’t trade in markets that you’re undercapitalized in. Make sure you’ve practiced a strategy and make sure you’ve seen enough trades so that you could believe in it.” You know, you will get losses like any other strategy, getting a loss here, a loss there, even a couple in a row, sometimes even more, sometimes three in a row, that’s common with any strategy.

And for those who have no experience with the market, it could be frightening, it gets you in touch with your–you know, that whole primal sense of, you know, you have to survive, and you just took a loss or two, “Oh, no.” You know, you panic, you quit. Those are the fail points. You don’t give yourself the gift of the big perspective where you see, “Okay. Well, even though it’s had a couple of losses, the winners come afterwards in session after session after session.” You’re able to quit positive according to the trade plan, the equity keeps growing, that’s when you start to get over those fail points and actually, you know, you get on a good position to succeed.

Mark Soberman: Sure. That makes sense. So, you know, typically, I mean, is it your opinion that it’s just a–there’s not enough practice in the trading? Is there just too much dancing around from market to market? Is there–people get too discouraged over a few losers? I mean, you know, how do you get that commitment to where you don’t do just what I’m describing and constantly chasing that performance?

Troy Noonan: Yeah. Real important question, Mark, because it’s what everyone seems to experience when they’re just starting out. So many traders are chasing the next, you know, great strategy and they never give any of them a chance. I mean, they might all be good but a few losses, they throw the baby out with the bath water. Their account went down and now they’re off running around looking for the next strategy, and the same pattern over and over until they’re just out of trading.

And, Mark, I have a very simple way of looking at it and that is this. You have to build a belief structure. If you can’t believe in what you’re doing, there’s no way you could succeed at it, and it does come with practice and repetition. You have the tools to do it. SIM trading. I mean, why not? You can back test, which we always teach is critical for building a foundation so that you believe in your strategy, but also the bigger thing for me is to know why I’m trading in the first place. And I trade to make money but I don’t–that doesn’t mean whether this trade wins or loses, because now I have to take another trade and then I have to take another trade. I mean, that’s what we do as traders; we trade.

So making money has to mean more than what the result is of this trade. Making money is the practice of trading, it’s the business of trading, and it’s your overall result that keeps growing. And you have to trade through losses to get to some winners sometimes, but you keep your risk very small, you stick to your plan, and then you grow your account accordingly, and achieve your reason for trading in the first place, which is to make money. And that, I think, is the key.

Mark Soberman: Makes sense. Definitely. I mean, it’s–you just have to–I think we just talked about this just a few minutes ago in our weekly hangout, you just have to get through that 90 to 180 days. I mean, if you just can get through that, all the rewards that make trading so special happen. Brian, I wanted to bring you in to this. Do you have any questions for Troy?

Brian Short: Yeah. Troy, you and I have talked a little bit about performance, but specifically on crude, one of my favorite markets, can you kind of tell us how things have been going there and then I think today’s session was a little bit challenging, kind of talk to that.

Troy Noonan: Yeah, sure. It was challenging. It’s maybe the most challenging session that we’ve seen in weeks. Crude oil has been spectacular. You know, we were on the road show together. We had a lot of fun in October and I was showing it off every single day live at that point in time and, you know, just amazingly, it’s just been on a real winning streak session after session. It literally hasn’t had a losing session at all in October or in November until today. And even today, it finally climbed its way back, but you have to really trade through the session and it was a PM session that really put it positive.

But just, you know, overall, it’s been winning in the high 70 percent range for the AM session and close to 80 percent even in the PM session. So it’s just been great. I don’t even like to make claims like that because it just seems so unrealistic, but that’s literally what it has been doing. I don’t expect it will do that forever. I can only hope, but I expect that, you know, it will probably drop down a little bit, but who knows? You just never know.

Mark Soberman: All right. Brian, appreciate that. One of the things–well, let me ask one other or maybe a couple of quick questions, Troy, as far as, you know, give us an idea–you got a successful trade in the Russell E-mini, what was that typically worth? What’s a good average?

Troy Noonan: Well, the Russell E-mini, the range has been kind of light lately and so like today, if you’re trading with a Power of Quitting one, for example, literally only–

Mark Soberman: No, more like I’m just saying on a successful trade, what’s–how much does it make on average on a successful trade?

Troy Noonan: Successful trade could make anywhere from, say, 12 to 25 ticks.

Mark Soberman: Was does that mean in dollars?

Troy Noonan: All right, $10 a tick, so $120 to $250.

Mark Soberman: Cool. What about like crude oil?

Troy Noonan: Crude oil could make anywhere from say $100 to $300.

Mark Soberman: And that’s per contract. And then what about something like Dow E-mini?

Troy Noonan: The Dow E-mini, that’s going to make anywhere from, say, $50 to $150.

Mark Soberman: Cool. And then let me ask you on Forex on the big swing trades that the daily charts, you know, what tends to be the pip range when you’re successful?

Troy Noonan: Well, it depends on the pair, but it’s in the hundreds of pips because, with those trades, I like to use two positions, and the fixed target itself could be, you know, 100 to 300 pips, and then the trailing stop could go for quite a bit longer. I mean, I’ve seen 500 and 600 to 700 pip trades with Forex.

Mark Soberman: Nice. Yeah, that’s awesome. Definitely what people need. A lot of times, people in Forex are trying to scratch out 5, 6, 7 pips, then paying the broker half of that and it never amounts to anything.

Troy Noonan: Exactly.

Mark Soberman: So, you know, we have some other things that we test. We test a lot of different systems out there and we’ve been running this one Forex system, Forex Robot. I think for–it’s got to be six months, eight months. It’s funny to watch it because it’s taking tons of trades as basically where it started, you know, so it’s just kind of funny to watch it go up and down, but it’s just trying to scalp that market and it just never gets anywhere. So–

Troy Noonan: It’s a whole lot of work.

Mark Soberman: Yeah. It’s a lot of work and it’s just–I guess the broker does well and they’re happy with you, but that’s probably about it so–great. Well, I appreciate the time, Troy. That was great. I’m sure there’s lots of interest on Trend Jumper. You know, this isn’t to try to sell anybody on anything, we just want to give you information or the next steps for you, if you have any interest and all. It’s just seeing more about it, and come in to one of our live webinars or watching one of our recorded webinars.

If you’re in our mailing list, you should be already getting notified of it. If you’re not, you know, go to premiertraderuniversity.com. Feel free to log in or let’s just say opt in there, just, you know, leave your email address and we’ll get you information, or you can go to netpicks.com as well and likewise we’ll do the same. And, you know, we like to share a lot of information with you first so you guys can see it work, see the results, you see winners, you see losers, you’ll see everything in between, and then you can make a good decision for yourself if this is a solution for you.

It’s going to be right for a lot of people and the level of enthusiasm for it is quite high, especially when we get a chance to demo it, so, you know, give yourself that opportunity, especially if you’ve been struggling with your trading or you’re just not getting the results that you’re after. So again, we appreciate everybody listening today. Certainly, if you have any questions, you can always send those to info@netpicks.com. I think we also have a podcast@netpicks.com. So T.J., thank you very much.

Troy Noonan: Oh, it was fun. Thank you for having me.

Mark Soberman: All right. Good success to everybody’s trading. Thanks, Brian. We’ll talk with you in the next Day Trading Authority.

Mark Soberman: All right, everybody. Welcome to the latest edition, version, issue, I don’t know what you say with the podcast, but welcome to the latest Day Trading Authority podcast. This is Mark Soberman and I’m joined today by Brian Short, as always. And also we have a special guest which we will introduce in a moment, but that will be top secret until we get to that point of the program. So again, welcome, everybody. Brian, are you with me today?

Brian Short: Mark, I’m with you, and once again, it’s great to be back, looking forward to another podcast session.

Mark Soberman: Sounds good. So obviously, when you listen to this, it could be any time of the year. These are always timely. They never run out. It’s that type of information, but it is November for us, hard to believe at this point that we’re going to be running into the holidays here pretty soon. It does impact trading a little bit, keep that in mind. Especially for the day traders out there or even you swing traders understand that Thanksgiving week always quiets down and then, of course, you already know that we’ve got our December holidays. Obviously, there’s plenty of things that should really make for some really nice trading conditions for everybody the week that we’re talking here. We actually have really great trading for most of the week until really here Friday when it finally sort of die down a little bit and consolidate it.

I want to give you a few links. Just make sure you go to netpicks.com/podcast. If you want to catch up on back issues, that’s a great place to go. Of course, iTunes is even better. You can go ahead and you can subscribe in iTunes, and that will make sure that the latest issue, podcast, whatever we’re calling it, will show up on your phone. That’s how I do it. And you can subscribe that way, which is really easy, and then you can be in your workout or in the car or streaming on Bluetooth, whatever is easy for you. We’d love to have a great review from you, if you wouldn’t mind, in iTunes. That’s always helpful. If you appreciate this free information that we share, that would be excellent. Another couple of links, netpicks.com is a great place to go. There’s something called the LearningCenter on there. There’s lots of free information. Go to the LearningCenter. Put your email in, if you want. There’s multiple articles that are written and released every single week, videos as well. You’ll learn a ton and there’s no charge for any of that.

The final thing I’ll pass along is we’re on a roadshow right now. We’ve been traveling all over the US and this is to do with our Premier Trader University, and you can also go to premiertraderuniversity.com. Make sure you put an “e” on the end of premier. And typically, if we have a roadshow going, it will–a little pop-up will come up and it’ll tell you what cities we’re heading to next, and we’d love to meet you, so give us a great opportunity to talk to you, teach you a little bit about trading, share our latest systems, and it’s been great so far. We’ve met all kinds of people in a number of cities, so a lot of that is coming up. So just go to the website; you’ll always get the latest information there. Brian, before we bring in our special guest today, I don’t know if you had anything else you wanted to throw in or if I forgot anything?

Brian Short: No. That’s pretty much it. You reminded me that I’m going to be leaving here for the week and going on the road. So we would welcome you if you are going to be in the Phoenix area, and I know this might not be timely, but we’re going to be in Phoenix, Orange County, L.A., and the Vegas Investors Expo. So if you happen to hear this in the next day or so, and can get out to those locations, that would be awesome. We’d love to meet you in person.

Mark Soberman: Very good. All right. So what we wanted to do today, a little bit different than our normal format. Typically, we have some specific sections that we cover, but we wanted to bring in Troy Noonan, and Troy has been with us for quite some time. I have no idea when it comes to calendars and length, but it’s been years and Troy is really one of our main system developers. He’s had out for the last few years a very successful Seven Summits Trader. Some of you may even use it in your trading even today, and sometimes we call it, for short, SST. And we’re really excited because we’re releasing in this upcoming week, as part of our university, the brand new system called the Trend Jumper. So it’s officially called the PTU Trend Jumper. It’s a high-frequency trading system. All kinds of focus on Forex and Futures, and I know I said high-frequency, but it actually is even high-frequency swing trading.

So it’s day trading and swing trading Forex and Futures. It’s really Troy’s brand new first thing in a couple of years, at least here, people that have been beta testing it or going crazy for it. So we thought it would be a really neat opportunity to bring Troy on. Let me ask him and Brian ask him some questions about the Trend Jumper, what’s so good about it and what it can do. So without any further introduction, Troy, are you with us?

Troy Noonan: Yeah, I am. I am, Mark. Hello, Brian. Great to be here today.

Mark Soberman: Well, it’s always great to have you, so let’s just jump right in and I’m going to ask you a few questions here. I’ll put you on the spot. The first thing I’m going to really start with is just what the heck is Trend Jumper and what’s it all about.

Troy Noonan: Okay. Good question. The Trend Jumper is a result of my calling live trades in a trade room for four and a half years, everything I’ve learned and kind of digested. And then just kind of turn into the Trend Jumper also my experience of developing and trading the SST for so long, it’s a really simple strategy based on pure price action, and what it tries to do is identify immediate support and resistance levels on the chart that it could jump off of for a high percentage reliable profits.

Mark Soberman: Yeah. You know, one thing it’s always interesting with a podcast like this is that we understand visually you don’t get to see this, so we’ll do our best to describe a few things. But one thing you may want to do, you can go to netpicks.com/hangout and you can even see, you know, some of the demos we’ve done recently just in case there’s something you want to do, or go to premiertraderuniversity.com and we always post to our blogs and things like that, walkthrough, so you can sort of visually see what Troy is going to be describing. But, Troy, what are some of the, you know, on the Futures side, you know, what are the markets where you’re seeing the best results?

Troy Noonan: Mark, I am seeing really good results on a whole bunch of markets. I’m trying to look at just a variety and for sure the four major E-minis, the Russell, the Dow, the S&P, and the NASDAQ, very consistent performers. I like to use tick charts, but you could see that it’s working on other types of charts as well. I love the petroleum products, crude oil, unleaded gas, which you turn me on to, works great with Trend Jumper. And I really like heating oil futures as well, but it works great with the grains. Wheat is one of my favorites. It works good on the others as well. And I’m also showing some DAX and Euro-Bund during the European trading hours which is also doing excellent.

Mark Soberman: So let’s say somebody has $5,000. You know, they’ve had a little bit of experience trading Futures. They’re really not profitable or they’ve been breakeven, you know, what would you recommend? I mean, those are lots of great options but, you know, there’s always, you know, we got to make decisions on what to trade. So if I’ve got five grand, what would you tell me? Where should I start with Trend Jumper?

Troy Noonan: You know, in the world of trading, of course, you know, five grand isn’t a whole lot of money, but it is sufficient. You can begin trading and Trend Jumper is an excellent choice because the risk is so small on most of these trades, and it gives you such a great risk-reward ratio that–and also just high percentage winners. I would say you can start with a Dow E-mini, the NASDAQ or even the S&P, which, you know, hopefully you practice first. The S&P does take a little bit of additional practice because it’s got some additional challenges, but with $5,000, you can do it, and I think you can trade the grainss. I mean wheat futures would be an excellent choice.

Mark Soberman: Yeah. And I think those are perfect recommendations and, you know certainly, we always say, you know, as your account grows, it’s really easy just to trade a second contract, and then you also can start to add additional markets so, you know, certainly, like Troy mentions, you know, the Dow E-mini, NASDAQ E-mini, wheat futures, it’s all going to be well within, you know, a comfort zone. Now, if you start with–what if somebody wants to start with $25,000, I mean, do you have any advice for that person?

Troy Noonan: Well, yeah, I do. I would say, first of all, pretend you only have $5,000 because if you’re new to trading or you’re new to the system, you want to protect your capital and make sure that you master the strategy, and that involves building up a belief structure. You have to actually give yourself the gift of the big perspective, okay? So let’s just say you’ve done all that, then you could easily trade crude oil, unleaded, any of the petroleums. I mean, heating oil, unleaded gas and crude oil are three amazing choices. Of course, you can go with the other ones I said, and you could throw the Russell E-mini in there, and there’s probably a whole bunch of other good choices as well.

Mark Soberman: I guess sometimes it’s also the time of day that you’re available. Most of these are US market hours. You know, when do you typically suggest people trade? I mean, as far as–do they trade during lunch time, in the evening? You know, when is the best time to typically day trade the Futures?

Troy Noonan: Well, if you’re day trading Futures, the best motion in the market is when you want to be trading. If there’s movement in the market, then the Trend Jumper just works great and you always find good movement right when the market opens. You wait a couple of minutes. With crude oil, I like starting 10 minutes prior. Actually, there’s some good movement early on, so for me, it would be 8:50 a.m. Eastern Standard Time. But with the E-minis, I want to wait until the market to open, 9:30 Eastern or 8:30 Central, and then wait like two minutes, and then from that point on, you could trade. And I think it’s, you know, good to just try to get one winning trade, a positive result, and then you’re done, and keep it very minimal and just steadily grow your account like that. Minimize your risk exposure to the market.

Mark Soberman: And I guess we would say if you’re in Europe or Australia, I mean, we literally have installed base with our systems like SST in over 100 countries. So what are some of the markets maybe they can consider if, you know, US business hour morning isn’t good for them?

Troy Noonan: Yeah, that’s a great question. Well, the European session has some great options. I mean the DAX is a really good one. You do need a larger account for that, but I think you’d be very happy with the Euro-Bund, very steady, you know, 9:00 a.m. Eurex exchange time, I believe that would be, what, 9:00 a.m. in Germany, I think, if you had to put it to a geographic location. And you start–

Mark Soberman: Yeah. I think 3:00 New York time in the morning just to–if you want to work backwards from that.

Troy Noonan: Okay. And so again, it’s just been doing really great. I mean, just today alone, the DAX had one winning trade, quitting with the first trade, 49 points. I mean that’s 1,225 euros and the Euro-Bund, I was able to get 16 ticks and that was good for 160 euros.

Mark Soberman: Yeah. That’s a nice thing about, I think, the Euro-Bund, you’re right, is you can definitely–it’s a smaller account, friendly, it’s not super volatile like you mentioned. It’s per tick is 10 eurodollars. The symbol, for those of you who want to take a look at it, is FGBL, and there’s tons of volume, so there’s all kinds of liquidity on that. It’s kind of equivalent to our interest rates futures here in the US and, you know, there’s lots of volume on interest rates futures in the US. And for the DAX, the symbol is FDAX, also has great volume. I’ve never had a problem with liquidity, including on multiple contracts, very minimal slippage, so that can be a good one.

Another one that’s been mentioned to me recently by James Kessick who works for us out of the UK is the FGBX, and I’ll probably say it wrong, but I’m going to say it’s called the Buxl. I don’t know how they say it in Europe. It’s B-U-X-L. That’s what I’m saying it, so–but the FGBX and I’ve done some looking into that and it’s got great movement, but also it’s kind of a step up from the Bund. Its 10 euro per tick, so unlike the DAX which is 25 euro per point, but it also is sort of like twice the–how do you say this–almost like each bar is sort of double the size, so it’s sort of double risk, double reward compared to the Bund, but probably not quite as much risk and reward as the DAX, so maybe it falls somewhere in between the two. So that would be two great choices and I guess–I mean, let’s talk about Forex a little bit. I mean, certainly Forex in the European hours would be good as well, as well as the US with the Trend Jumper.  What are you experiencing with Forex? What are your recommendations there?

Troy Noonan: Yeah. That was actually my next point because you do have people in Eurasia, too, and Forex is a good choice for them as well. For me personally, I prefer to use slower charts and swing trade Forex. And my favorite trade is, with the Trend Jumper, it’s using a daily chart. In that way, I just look at my charts once at the end of each session and place my trades, and I’ve just found it to be extremely easy to trade and very profitable, and quite resilient as well. And even when you experience a lost here and there, it seems to snap back with much larger winners, and 2012 has been a banner year actually for a swing trading Forex of Trend Jumper.

Mark Soberman: So do you think the approach is daily chart, just trade the euro, US dollar? Is that kind of the strategy?

Troy Noonan: No. Actually, you wouldn’t–first of all, you wouldn’t get enough activity with a daily chart. You’d only get like zero to three trades a month, for one thing, with any one chart, but also you wouldn’t be taking advantage of one of the strengths that Forex offers, and that is diversification. So because it’s an end of day chart mark and because it’s so easy to take your time, think through, place your trades, I literally follow 15 different Forex pairs, and then that keeps me pretty active because if I’m only getting zero to three trades per month per pair, but then you multiply that by 15, I’m taking several trades every week and that’s gotten me doing pretty darn good, and I’m just as busy as I want to be trading in that fashion.

Mark Soberman: I guess doing it that way, too, you sort of want to get yourself out of the prediction business, you know, trying to fundamentally guess what market is going to take off and get hot, right? I mean just by kind of having that broad exposure.

Troy Noonan: Yeah. I mean, it’s funny you bring that up because that’s so true with day trading as well. I mean, I don’t know what you felt about these sessions leading up to and during the day of the election. But in my mind, I was thinking that the markets are just going to chop back and forth, and indecision and just be terrible, especially with how close the election was. And the fact of the matter is it was the exact opposite. I mean, we saw some of the best trading we’ve seen in a long time, even on the day of the election and the day after, and leading up to it. So trying to predict, I think, is fun, but when it comes to the business of trading, I don’t think there’s any place in that, other than just you end up shooting yourself in the foot and it hurts you. I think it’s a mistake.

Mark Soberman: Yeah. I mean, I’m personally probably the world’s worst fundamental trader. I mean, every time I think something is going to go one way, it goes the other way, and that’s just being completely honest. But I actually read a study recently where they looked at Fox News, CNBC, CNN, whatever, any time the pundits come on and we’re not just talking economics, pretty much anything, and it’s literally no better than a coin toss, 50/50, on any issue. I mean, prediction. The difference is people can come on to all those different TV shows and make all their stupid and false predictions, and there’s no price to pay, right? There’s never any accountability. But us, as traders, we have all kinds of accountability because we feel it, where, we feel it in our accounts. So I think you’re right. I mean, I think when you start to make a lot of opinion, I know for me, boy, anytime I make or have an opinion is when I start to lose money.

Troy Noonan: Absolutely. I totally agree. People press me on what I think the market is going to do and I kind of look at them and I go, “Yeah. It’s going to do that.” “Will it go up?”

Mark Soberman: That’s how I am. Yeah.

Troy Noonan: “Or down? Is it going to win?” “Oh, yeah, it’s also going to lose.” I mean, it’s just going to do what it does and all I want to do is be there to take the trade that’s according to my trade plan, what’s the next trade? Because that’s my job. Running my trading business is exercising my business according to my plan. I don’t care what the market does, as long as it does something.

Mark Soberman: Yeah. I’m with you on that. I’m going to go play tennis here in a little while and one of the guys I play with, you know, knows that this is the business I’m in. He’s also a Forex guy and he’ll always–he’ll come out and say, “Yeah. The Dow was up a lot today.” And I’ll be like, “It was?” I have to go ahead to go my iPhone to really realize that it was. Even though I may have traded the market, I don’t really care if it was net up or net down because, right, we’re just trying to take advantage of action in either direction. We don’t have any bias. It doesn’t matter which way any of these things go to us and that’s really one of the beauties of it. With Trend Jumper, what would you say, let’s say–first to the–call it the beginner or advanced beginner, you know, what kind of learning curve or something like that that maybe, you know, answer that same question for somebody who’s got some experience?

Troy Noonan: Okay. Well, I mean, even as a beginner, I’m going to assume that you at least know what a chart looks like, and you know that a green bar is up, and a red bar is down. I mean, could I assume that for a beginner? That’s fairly–hopefully–yeah. Hopefully, the beginner–

Mark Soberman: Yeah.

Troy Noonan: –has done a little bit of due diligence.

Mark Soberman: Yeah. I assume they have a little bit of experience, not a lot though. You know, they definitely haven’t been successful and they have–you know, they’ve played around a little bit with trading.

Troy Noonan: Well, the beginner has to learn the rules of the strategy. It’s really simple. It probably takes about 15 minutes to learn the rules. It might take another, you know, an hour or two with some repetition to then assimilate the rules and know them through and through, but it’s a very simple, easy learning curve, much different than the SST, which did require quite a bit more. And so once you do that though, you have to also teach yourself and train how to execute your trades and that requires practice.

But the good news is that you can do it all in a simulation account for free and keep all your capital safely on the sidelines, so you can learn how to trade, you know, for no money, really. You got to open an account, but once you’ve got your account, you don’t have to risk your money. You can learn the system, learn how to trade with all the money safely parked, and then you could just take your time. I mean, there’s no hurry. If it takes one person a day or two, maybe it takes you a few days longer just because, you know, you’re working really hard at the execution or there’s one thing you haven’t figured out yet, no problem. I mean, you just keep at it. Repetition is the key, really. Like with anything.

And for the intermediate or advanced trader, I mean, you’re going to love Trend Jumper because you already know how to execute trades. You go in with your bracket order already, you have a template in your platform, you know, whether you’re using the Matrix or TradeStation or the Dome or NinjaTrader, you have a template in there. You place your trade, and you just slide your stops and targets to where they need to go. It shows you right on the chart. In essence, you know, you click on the bar that gives you the trade, the whole trade is laid out for you, all the information you need, and you just kind of follow it. It’s really simple actually. You’ll learn it really quick.

Mark Soberman: What about for somebody with the experience?

Troy Noonan: Well, that’s actually what I was just referring to those–

Mark Soberman: Oh, okay.

Troy Noonan: –intermediate traders, those with experience.

Mark Soberman: Okay, got it.

Troy Noonan: Yeah, easy, easy.

Mark Soberman: But where do you–

Troy Noonan: One of the easiest systems.

Mark Soberman: All right. So, we have Mike Rykse joining us today. As I was saying, he’s really the go-to guy at NetPicks and the Premier Trader University. You can definitely call him our chief Options strategist. Mike’s sort of been working for us and with us for–I don’t really know how long, a number of years, but he’s pretty–he’s a pretty young kid overall. I think when he started he was probably still taking his big will to school. And the last thing I heard, he may have got his learner’s permit recently. But one thing I do know, he makes Brian feel really, really old because he could really be one of Brian’s kids, so, that’s my introduction for–to Mike Rykse. But Mike, how are you doing today?

Mike Rykse: I’m doing well, I don’t know how I follow up that introduction, but excited to be here so.

Mark Soberman: Great, appreciate that. Well, you can follow it up any way you want. You’re our resident Doogie Howser, but eventually–well, of course, anybody young is like, “Who? Doogie Howser?” So, you have to go on Wikipedia.

Mike Rykse: Exactly.

Mark Soberman: And that cultural reference. But anyway, so what we want to do, we want to bring Mike in because I know this podcast is called “The Day Training Authority,” so what the heck are we talking about options and swing trading and why would we do that? But the real reason is, when you scale your trading business, like we mentioned before, there’s only so much day trading you can do. There are some real limitations in the markets that you can actually day trade successfully, and there’s definitely a limitation on the number of shares, contracts, you know, currency pairs, however you want to argue with it. There is a cap on what an individual trader can do and you also have a cap on your type. So, what better way to supplement and add to what you do, if anything you or if you want to stay with day trading, then to look at swing trading and in particular, Options trading thanks to the leverage involve. So, Mike, I guess my first question is why the heck are you involved in Options trading?

Mike Rykse: Well, Mark, I got my start back in college, that was about 10 years ago, I was actually thinking about that here yesterday. I’m coming up on my 10-year anniversary of trading. So, back when I started, I was just–I was a poor college student. I was broke. And I was a Finance Major at the time, taking some business classes and one of the projects that I was required to do was to research some Stocks, track them throughout the semester, then type up a big long paper explaining why it purchased those stocks and whatnot.

And during that research, I came across Options trading. And it was really appealing to me because, at the time, I had no money to work with. And I saw that, “Hey, I could see some pretty large percentage returns in a short amount of time with these products.” So really, I spent a good majority of my time that semester really researching Options trading. So, that’s really been my background in Options trading. Well, I do some day trading as well. I do actively day trade some different Futures markets. The reason why I love the trade Options is it’s just such an easy way to diversify. It takes very little amount of time for me to come in and trade these charts each and every day.

So, what I found that early on in my trading, I saw a lot of large swings in my overall equity curve. However, by getting a good mix of markets, trading some Options, trading some Futures, a little bit of Forex every now and then, what I saw is that they were so different from one another that I was able to smoothen out my overall equity curve over time. So, that’s the great part about it. You can get into some of these trades with a very low amount of capital, so, it’s great for the newer retail trader. So, there are a lot of benefits of trading Options.

Mark Soberman: Yeah. And I like the point about smoothing out the equity curve because sometimes people even ask me, even on the day trading side, you know, why do I attempt to trade multi markets?” It’s not easy and it’s a lot to juggle, but that’s one of the reasons because I don’t know on a given day or a given week really what’s going to work and what’s going to flop and it’s a very difficult thing to predict. I mean what do you find since you do it all really are the real key differences between, let’s say, your Options trading and your Futures or your day trading?

Mike Rykse: I find that it’s a pretty good mix because we–if you’ve been paying attention to the markets here so far this summer, we’ve been stuck in a lot of slower price action. So, if you’re actively day trading, there’s a lot of times where there’s just not a whole lot to do. Today was a perfect example of that for me. I actually day traded for about three hours this morning and took one trade that whole time. However, on my Options trading, I looked at my charts for about 10 minutes this morning and moved on. I really haven’t look at them since so it’s a great mix for me. It’s a great way to diversify, doesn’t take a lot of my time everyday, it’s just get in and track those charts.

Mark Soberman: Yeah. You know, I think that’s a real key point that you mentioned is the limited amount of time. And the fact that you’re not having to monitor because any of us, who can relate to day trading or the audience who day trades, you know that you always feel a little bit in your stomach when you’re looking at the chart and your trades and it’s very difficult just to separate yourself and sort of go on with your life or to your day. And so, what I hear you saying Mike is basically that, you know, you’ve got your work to do, you know, you got to make some adjustments, your entries or whatever you need to do. But once that’s done, it sounds like that’s about all you can do and you don’t really need to be I guess, staring at the screen. So, I guess, I’d almost ask you, you know, how much time during the day or night do you really think that you spend just strictly on the Options side and nothing to do with your day trading ventures?

Mike Rykse: My typical day looks like this. I try to come in before the market opens, try to get a feel for the pre-market price action, see where we’re going to open up for the day. I go through all of my charts to see, number one, are there any new setups. If I’m in any setups, do I need to make any adjustments? So, I need to document those levels. Then once the market opens, I spend a few minutes making any of those adjustments. If I have a new trade that just came on, I need to get that order in. So, that typically takes me anywhere from 15 minutes and out to a half hour, depending on what’s going on that morning.

And then throughout the rest of the day, it’s really just taking a peek every now and then. I typically come in two to three times the rest of the day. And when I come and I look at the charts, it’s a really quick peek. I’m not trying to stare at the charts. I’m not trying to stare at every tick throughout the day. That’s not what I want to do. It kind of defeats the purpose. So, it’s really just coming in, taking a quick peek at the charts. If there’s nothing to do, I move on with my day because what I see a lot of retail traders do, they think that just because they’re trading, they have to be in front of the screen all day long. And what I have found is the more screen time that I have, the more that I’m staring at every tick, I find that the emotional aspect comes in the trading a lot more. I start to see things that aren’t necessarily there. If I’m in a trade, I start to make decisions on my money management techniques maybe because the trade isn’t working quick enough for me. So, what I have found to be beneficial for me is to get in and get out as quickly as possible. If there’s nothing to do on the charts, move on with my day because I don’t start to make some of those mistakes that really haunted me early on in my trade.

Mark Soberman: Yeah. You know, you’re so right on that. The more you look at it, the more you feel like obligated to over-think and over-manage. And a lot of day trading is spent waiting and so how do you occupy your time, you over analyze and you start to proactively do things that you shouldn’t do. And how many times would you just been better off if you had just left it alone. So, maybe in a way, Options trading and doing it this way, it almost just forces you to behave properly as a trader by simply almost sort of like restricting yourself from seeing the screen.

I know–me personally, I’ve told the story before. A lot of times when I just can’t seem to control that urge, I force myself to turn off the monitor. And if I can’t see it, I can’t do anything about it. So, I mean I think that you really, you know, bring up one of the huge advantages to sort of a style of swing trading and Options trading. I mean, what would you–because it’s always inspirational to sort of get people thinking about this because when we started NetPicks back in the mid ‘90s, we actually were an Option service. And then over the years, Futures started getting hot and Forex got hot and in between somewhere Stock day trading got hot and of course that’s not the case in us anymore. And a lot of people kind of forgot about just all the great virtues of Options trading so maybe describe or tell us a little about some of your–one of your best successes whether it was recently or who knows. I mean what stands out in your mind, you know, a trader so that did extremely well?

Mike Rykse: I think one great example of one of my best trades money-wise, my best returns, but not necessarily one of my best successes was when I first got started; I was taking trades just based out of hunches. I like to trade earnings releases quite a bit because of the volatility around those earnings releases. And I got into a trade on Yahoo!, which is a shout in the dark, just kind of hoping that I could hit on that trade and I was able to do so. And it was a very large return on that trade, but there’s really no rhyme or reason for it. And I started to get in some bad habits because of that one winning trade that I had. I made a lot of money on it, but I didn’t have a proven system in place there.

So, what I’ve tried to do over the past number of years as I’ve grown as a trader is I need to make sure I have a system in place that puts the odds in my favor. If I can’t backup why I’m taking a trade based on stats, then I shouldn’t be taking that trade anyway. So, what I have seen in my trading over the past couple of years especially here so far in 2012 is I find myself going for more of the doubles, the singles and the doubles, as opposed to the home run trades.

So, one of the trades that I had here recently was on Apple, Apple is one of my all-time favorite products to trade. And I got into that position. It was a position–a long position. I purchased some call options, gave me control to the upside on Apple. The trade, it took quite some time to play out. We are stuck in that summer slow summer time price action, but the trade ended up hitting my target and I saw on half my position a nice 30 percent return. And on the remainder, I saw about a 70 percent return.

Now, that not–might not sound like, you know, an impressive return when you start to see some of these other numbers posted on the Internet where you can–some people say you can make 500 percent returns overnight. But what I have found as a trader, it’s so much easier for myself to handle those singles and the doubles. So, that’s really what I shoot for as a trader these days so that I can manage it emotionally over time.

Mark Soberman: Yeah. I mean, you know, it’s interesting because it’s funny when we have to almost put a disclaimer out saying, “Well, I just hit 30 percent return in a short time or 70 percent and I know that doesn’t sound like a lot because, you know, we are combating some of these fairly brilliant claims that are out there.” But if you actually trade Futures responsibly, you know, you’re never going to make 30 percent to 70 percent on a trade. You shouldn’t. If you do, you probably do something really wrong because you’re probably trading very irresponsibly. And without question, a Forex trader can double an account overnight, but if you do that, it also means you can completely wipe out your account overnight so once again, not good trading. So, Options, is really cool because of the type of leverage and really I think control risk that it gives you, you know, that your maximum out, the price of that contract, I mean what do you tend to find? We just talked about success. Let’s just say a trade doesn’t work out, do you have any kind rough average of, you know, how much of the premium, sometimes you may have to give back?

Mike Rykse: Well, that’s the great part about trading Options, is that just because I’m purchasing those options, number one, I know what my worst case scenario was. I know what my max loss is right when I get into the trade. And my max loss is limited to the amount that I paid for the option. But the great part about combining Options trading with a proven system that puts the odds in your favor, the system that I currently use it gets me out with a lot of partial losers. If the trade is not working out in my favor, I have no problem closing it out for a loss, moving on to the next trade. If I can limit those loses, those odds will start to play out in my favor over time. So, a typical loss for me is going to be anywhere from, I would say 40 percent to 60 percent of the premium that I go ahead and put into the trade. What I see a lot of times is I get out with a lot of very small winners and very small losers. That’s the great part about the system that I use in my own trading.

Mark Soberman: Yeah. I mean that’s–I think that’s really key and then you obviously move on to the next and best, you know, opportunity that comes. So, it sounds like what you’re saying, your–when you’re trading, it’s not based upon the wing and a prayer or the casino mentally. I mean I’m kind of hearing a little bit that, you know, you’re using some specific methodologies and trade plan and it sounds like almost a technical approach to the markets. I mean, do you stick to something very religiously or how do you go about it?

Mike Rykse: Absolutely. That’s something that’s so important for the retail trader. You have to make sure you have some type of system in place. Now, there’s literally thousands of different systems available on the market today, I don’t care what system you decide to use, but you have to have a definite rule set in place for yourself. You have to know when you get into the trade, where are your targets, where are your stops beforehand, because once you start to get in those trades without a plan in place, you’re going to start to ask based on emotion, and that’s really one of the biggest detriments for a retail trader, is they get into these trades and they don’t know where to get out. They start to freeze once they put that live money on the line.

So, for me, it’s very much a technical approach. I have very defined targets and stops in place for myself before I get into the trade, and I have no problem taking a loser. A lot of times retail traders, like we just got done talking about it’s almost as if they’re afraid to take a loser. They want to stay in the trade as long as possible so that you–they give it every chance to work out in their favor. I have no problem for me taking a loser and moving on to the next trade, because I know that my system tends to win 65 percent to 70 percent of the time. So, if I’m winning 70 percent of the time, that means I’m losing 30 percent of the time. So, out of every 10 trades, I’m going to have a few losers and I need to be okay with that.

Mark Soberman: Yeah. I think people don’t realize in trading, you really become your own worst enemy. And, you know, a lot of times what will people do is they’ll look at like an equity curve or the potential of a trading system, and they see that graph just goes steady up, and they look and focus at the hard right top, you know, quadrant. And like, “I can do this.” I mean, of course, I’ll do whatever it takes to get to that spot, but what they don’t pay attention to is all the jitteriness on the way up and the occasional draw downs on the way up. And that’s just a pattern like another one of our coaches says a lot, you know, “Two steps up, one step back,” but sometimes it’s two steps up, three steps back, you know.

We focus too much on really the destination and don’t focus on, you know, the journey it’s going to take to get there. And it sounds like, for you, you kind to realize that, you know, your success is made up of the great stories and the failures because, you know, you’re going to be wrong, you know, as a trader. So, Mike, what are some of your favorite stocks or ETFs like, you know, what are you trading today, what’s working best for you where is your focus going at this time?

Mike Rykse: Well, Mark, it’s amazing how similar the products that I trade today are to when I started 10 years ago. They don’t change all that often. My favorite products over time has been Apple. In fact, I worked with a trader here last week, who actually uses Apple to track the overall market because Apple tends to lead us up and down. So, if you’re not already trading Apple, you need to make sure it’s part of your watch list. It’s just such a great product to trade and I don’t see that changing any time soon. So, by using the Options, you could take that leverage, use it to your advantage and control $600 or $700 stock like Apple. So, that’s a great part about trading Options.

Two other names that I really like are Priceline and Google. Again, I’m just–I’m not trying to reinvent the wheel here, these are pretty popular names and that’s by design. I want to make sure I’m trading very liquid products. So, I want to trade those volatile names, the ones that are in the news all the time so those three are just some great products to trade. Over the last couple of years, I’ve added a number of ETFs to the mix, but where I see my best percentage returns, still remain on the individual equity side.

Mark Soberman: Yeah. You know, remember that Mike’s not sitting here, trying to analyze the, you know, the iPhone 5 or the new iPhone release that’s, you know, going to be hitting here while we’re recording this tomorrow, and how it’s going to impact technology, or Priceline has a new program or Google counters with something, Android. You know, he’s buying calls. He’s buying puts. I don’t think Mike, right, you don’t care if markets go up or down I assume you have no bias, you’re just directional trading, correct?

Mike Rykse: Yeah. I have no opinion on what the market is going to do and that’s–it’s really hard. It was hard for me initially to start trading like that and it’s very hard for me to train retail traders to do that. But you have to be able to block out what you think the market is going to do and just trade strictly price action. Like you said, I’m not interested in, you know, what type of products Apple is going to come out, it does not matter to me. News is irrelevant. I want to trade the price action. And by doing that, I’m able to put the odds in my favor and I’m able to trade a technical system that gives me that defined edge instead of just, you know, basing my trading off of a hunch.

Mark Soberman: Yeah. I mean I think that’s a great point too. I know back in the day, I had a complete CNBC addiction, I had to have that thing on from the moment I started and to the moment I ended my day or night when it came to trading. I mean it got to the point where I watched it so much, I was expecting Christmas cards from the anchors. I mean they felt like family. But what I realized was it was just completely influencing the way I was attempting to trade and was so often wrong and the analysis was so often wrong, and it was just really imploding what I was trying to do. So, I think it’s another great point, just to get rid of all those external influences. You know, later on, if you want to figure out why your Apple trade did great, yeah, read some news, read some fundamentals whether it’s on the upside or the downside. But, you know, I think ultimately, do not let it influence, you know, what you do. So, Mike, what are maybe some of the tools or, you know, what do people need to trade Options? I mean what would you say some people should have in order to start look into those?

Mike Rykse: The great part about technology is that we have broker platforms available to us these days that give us a lot of professional tools. One of the platforms that I use is ThinkorSwim, and that platform gives us a lot of tools that are available to a floor trader, a very professional trader. So, that number one is a big advantage for us as a retail trader. I really feel like it’s kind of even the playing field for us as retail traders compared to a professional floor trader.

Number two, as a beginning Options trader, it’s very important to have that system in place. It’s very important. I don’t care if it’s based on technicals or some other reason. You might have your own set of indicators that you like to look at. I don’t care what it is. You just need to have some type of system in place that tells you where to get in and where to get out. So, before you put any of your live hard-earned money on the line, you want to make sure you have those rules in place for yourself.

Mark Soberman: Great. Yeah. I mean the technology these days available to us as traders it’s amazing from, you know, when you started 10 years ago or I can think back double that it’s pretty incredible, you know, what’s available to us. Literally, anywhere we go, whether it’s on a desktop, a laptop, an iPad, whatever the case maybe. So, I’ve got one final very difficult question to ask you and a lot of times people always just curious to know, you know, what else outside of trading are you into? What intrigues you? I mean obviously, you don’t trade 24 hours a day, that’s one of the beauties of Options trading. So, what are the things does Mike Rykse do with his day when he’s not staring at the charts?

Mike Rykse: That’s one of the big reasons why I love to trade because another one of my passions is to play golf. I played golf in college. It actually paid for my schooling so it’s something that’s been a big part of my life for a number of years now. And by trading, it just really opens up a lot of opportunity for me that I wouldn’t necessarily have if I was working a regular 8:00 or 9:00 to 5:00 jobs.

So, by trading the morning hours, it gives me a lot of time, a lot of flexibility during the rest of the day to get out and do something that I really enjoy. I have no desire to be sitting in front of the charts eight, nine hours a day. That’s just not something that sounds appealing to me. But by using these approaches, by trading Options, it really allows me to get in, check the charts for a few minutes every day, and move on with my life and start to do other things that I enjoy. So, that’s just–it’s very appealing to me and I don’t see, you know, that lifestyle changing any time soon.

Mark Soberman: So, it’s really right back to what we’ve been trying to preach a lot especially this year, which is kind of that lifestyle trader, you know, having to balance. You know, we’re going to work hard on our trading, but we’re going to also work hard in everything else outside of trading.

So, Mike, I want to thank you a lot for taking some time out to ask or really answer these questions. I want to give everybody a link to get more information about Mike, his training, his programs, options, and all you need to do is to go to netpicks.com/easyoptions, all lower case, no spacing and a little “s” on the end. So, again, it was NetPicks, which is N-E-T-P-I-C-K-S.com/easyoptions and will get you some more information on how you also can work Options trading into what you do as a day trader. So, again, thank you so much Mike, really appreciate it.

Mike Rykse: All right, thanks Mark.

Mark Soberman: All right, everybody. Well, that brings us to the end of another NetPicks Day Trading Authority podcast. Again, thank you to our guest, Mike Rykse. Hopefully, he’s got you thinking about the opportunities available to you, it really should have, in Options trading. I want to give a few more links to some reminders that we talked about at the beginning. Make sure you go to premieretraderuniversity.com to learn all about our education, myself, and Brian, and Mike, and the rest of our team is heavily involved in that. And if you’ve missed some past podcasts, just go to netpicks.com/podcast. And then of course, you can always go to our website and click the “Trading Tips” and get to our free blog where we’ve got all kinds of great content that our coaching team puts out. They are all free; lots of great lessons there. And finally, make sure you go to netpicks.com/easyoptions to learn about Options trading from Mike. So, Brian that’s it, I guess we did it. We did it again. Check on the to-do list. Any closing comments for the audience out there?

Brian Short: Mark, it was fun as always, lot of good information shared, and hopefully the traders that are listening picked up on a few tips that they can implement. So, it was fun and look forward to the next time we get together.

Mark Soberman: Awesome. We’ll talk soon. Take care, everybody.

Brian Short: I am Mark and thanks for those kind words that’s much appreciated.

Mark Soberman: Well actually, I’m just really reading what you told me to read.

Brian Short: I would never tell you to read such a thing.

Mark Soberman: Okay. Well, typically, I would never say such a thing, but the $20 bill that came with the script I figured what the heck, I’ll put it out there. So, we’re joining all of you with our latest podcast. Hopefully, most of you have had a chance to listen to some of the prior broadcasts. If you haven’t, I have a magical link for you that you can go to and learn a lot more about day trading, trading, and Brian really, because you definitely want to learn a lot about Brian. So, he shares a lot with you on this podcast and you just need to go to netpicks.com/podcast. And NetPicks is N-E-T-P-I-C-K-S.com, not to be confused with Netflix like my mom always says “So, Mark how is Netflix?” I’m always, “Mom, I do not work at or for or with Netflix.” But there you go netpicks.com/podcast. So, be sure to go to that, grab some of the past issues or go to iTunes like always, and you can subscribe. And whenever we get around at doing one of these things, it’ll magically appear on your phone, and then you can listen to it in the car, the bus, the train, the ship, whatever, at your workout, anytime you need a little trading pick me up, that’s what we’re here for.

But at the time we’re doing this, the summer is basically over. This is September when we’re recording this and we’ve made it through the June, July, August timeframe. I know for me personally, I traveled quite a bit over the summer, had an opportunity to go to Thailand, which is probably the most exotic of my trips, but pretty much went away three different times. And I actually think in a strange way that perhaps, could have been one of my best trading strategies because it kept me away from the markets when they were quite slow, and really sort of focus me a bit more on swing trading, which I know might be a bad word in a podcast called “The Day Trading Authority.” But it was something, I think, that sort of prevented me from the trading addiction, because I know if I was here, I’d be trading it regardless. So, how about for you Brian, what was your summer all about and, you know, kind of what happened for you?

Brian Short: You know, Mark, a very similar story. Although, I have to say I didn’t take quite as many vacations and trips as you did this summer, so, I just put that out there. But the trading itself was pretty slow this summer. The thing that was interesting, even though the trades were slow, there was a lot of profitable sessions. And so, as long as you were consistent in the market that I trade, which is crude oil, you just had to stick it out and kind of just some trades just took forever to get to their full objective. But if you hung in there, followed your trade plan, you were rewarded.

There were other markets that you know didn’t do so well, that were kind of choppy, the Forex being one of those. August is kind of notorious for that kind of price action. I think you said this morning on one of our webinars that we did for teaching that, you know, the last four years have been very choppy. So, you’ll get one year out of five that, you know, that is decent in August, the rest remain kind of choppy. There’s a lot of speculation why that is, Europeans taking a vacation or whatever, but it’s something to keep in mind in your own trading when you’re looking at trading the markets. But things are back to what I would call normal last week and a half or so. My trading on crude has been just rocking. In fact, I’m not bragging, but I’m on a seven-day winning day streak right at this point in time, and we’re in the middle of September at this time. So, that’s what’s going on with me.

Mark Soberman: Great. Thank you and you’re definitely correct, probably, went a little above average on vacations. But, you know, Brian, working with you, one needs to take some vacations to recharge. I’m sure your wife has told you that before.

Brian Short: You know, Mark, there’s a lot of sarcasm in your voice today. I’m really not sure why or if I’m that deserving of it, so we’ll just proceed on here and see. But I’d be ready for a comeback here anytime.

Mark Soberman: I think it’s mostly just our connection and just must be that. I mean, it must just be something technical that’s going on because I’m–you know, I’m surprised that you’re picking up on any sarcasm, but in reality, and without being sarcastic, I’d have to say, I definitely agree with you as far as you know handling the summer. If I think back to the last podcast we did, we talked a lot about education. And one of the things that we rolled out, and I’ll say it again, and encourage people to go to http://www.premiertraderuniversity.com and it’s premier without the little “E” on the end but premiertraderuniversity.com, and there’s lot of free education out there. And we talked about this at that time because we knew that the summer potentially was going to be interesting, and was going to require more discipline, more structure in the trade plans. It was going to be easy for a day trader to really get out of sorts a little bit, if you weren’t really following something very clear and very specific. So, definitely, you know, do yourself a favor and take a look at that website. Get involve over there. Get some of the free education, the webinars, et cetera. We definitely have a lot to offer and it will help you kind of get through periods like this, like the summer transitioning into the fall because it really does make a difference. There’s a lot of seasonality in markets and you sometimes have to approach them in some different or even creative ways overall.

And so, one thing I do want to mention, which is kind of interesting on the podcast today, we’re going to actually have an interview with Mike Rykse here in just a little bit, and he’s going to be coming on, and he’s really, I guess, for the most part, he’s commandeering definition, he’s sort of overthrowing, he’s taking over The Day Trading Authority because he’s going to come in and talk about Options trading and swing trading. I know I’m in shutter, I’m feeling a little queasy when I hear about a trade that might take more than 10 minutes, but this is a huge opportunity for day traders because one of the beauties of swing trading is it doesn’t take a lot of time.

So, once you start to grow your portfolio and grow your business as a trader, a lot of us, look for additional opportunities and we just don’t have the bandwidth to be able to trade 10-day trading markets at a time. I mean, you know, Brian talks about focusing on crude oil. You know, one market, most people it’s one to three markets and that’s it, so how do you scale your business? You know, one of the great ways to scale is to by bringing in some swing trading and not being offended by it, despite the fact that this podcast is really mostly about day trading. But we’re really primarily about active trading, so he’ll be on here in a moment. And it got me thinking, you know, what’s been working for me now. And if I’m in your shoes, I’m listening to this, you know, I want to know, “Hey, tell me what markets and Futures are working really well for you now. Tell me what markets and Forex are working really well for you now.”

So, I’ll show the ones beyond what Brian mentioned. Crude oil futures is been a favorite for ours–of ours really 2011 and 2012. I don’t see that changing. It continues to be a favorite. Also, for me, that’s been doing very well of late is the S&P MidCap Futures. The symbol on them is EMD. A lot of people don’t even know about it or they don’t’ trade it. It’s got decent volume, but not the kind of volume that you’ll see on markets like the S&P Mini of course, but even the Russell E-mini or the NASDAQ E-mini, but it actually has very good execution. I don’t really have any problems despite the volume being a little smaller getting my executions. Another market sort of like that as far as lower volume that’s really trading very smoothly right now that a lot of people don’t look at is, unleaded gas futures. The symbol or the base symbol is RB on that.

You just have to be a little careful for slippage. You don’t want to do a lot of market orders. On RB, you want to allow a few ticks of slippage on your entries. But just be aware, you know, it’s very common for the spread to be from five to eight ticks, but that may sound like a lot, but it really isn’t because a typical target, let’s say, in crude oil, might be 50 ticks for us. A typical target in unleaded gas might be 150 ticks. So, if you allow one tick of slippage in crude oil, it’s no different than allowing three or four on unleaded gas. So, I just kind of put that out to you. Another market is high-risk, high reward that’s been doing very well for me is silver futures. I really badly want to trade gold futures consistently, but it is one of those markets that I find is hot one month, cools down another month. I get more consistency with silver, but it’s not for everybody certainly if you don’t have a larger account, you know, don’t trade it.

Now, on the middle, a bit of the mixed results category is has been one of my long standing favorites, which is the Russell E-mini TF. It’s kind of stuck in a range. I mean, Brian just mentioned this, I mean I literally have had two days in a row with no trade. Now, two days in a row not trading it might sound like a bad thing, but I’m so thankful that my trade plan and system did not get me into it because it was worthless. So, it’s better to have no trade on a crappy day than have a lot of trades on a crappy day, and then you end up getting chopped up.

So, I’m waiting for that one to wake up. It hasn’t as of yet. And the DAX Futures has started to wake up for me. It was really good in June and July. Into August, it was good, and then all of a sudden the tail end, last half of August, it was kind of lousy. And then since that time, I’m starting to get the results again, so that’s starting to come alive a bit. And I’ll kind of end it with those of you who are in the Forex world and want a Forex trade. On the day trading side, the only thing that I’m consistently seeing performance on is the EUR/USD in the US market hours, and maybe adding to that the EUR/JPY in the US market hours. I’m not seeing great trading in the European market hours unfortunately. Historically, that’s been a great time to trade. It has not been in the summer and it’s not as of yet. There’s a lot of external things going on that we could talk about that’s probably influencing that or keeping it really constricted. But right now the only thing that I’m seeing working the European hours in particular is if you’re willing to go for a modest target and have a much larger risk so you can kind of sort of survive that up and down whipsaw, and then ultimately get your target. If you’re going for very much those one to one risk-reward or you’re going two to ones, it’s really not working. So, that would be what I would advise there.

Now, on the other side, swing trading like the EUR/NZD, the EUR/AUD, the EUR/USD, the GBP/AUD, the EUR/JPY, all of those have had a really good summer all the way through August, so, that’s kind of where I would be spending my time and looking at certainly, you know, there’s other markets. You know, some people might say what about the S&P Mini and what about the Dow E-Mini? You know, they all have their place. We’re just sort of trying to talk firsthand as trader. So, Brian, anything you want to add to that?

Brian Short: Just that, you know, Mark, you’re aware of this, but I’ll share it. I specialize in crude and the particular plan that I trade or trades for an hour and 40 minutes. And for me, that’s very beneficial. I think too many times as traders, especially a new trader when they get that bright shiny new strategy, the temptation is to just trade 24 hours a day. And really we’ve discovered here at NetPicks the opposite is true. You want to pick those timeframes that work for you as a trader, we call it lifestyle trading and engage the market under your terms. And Mark, just like you today, I didn’t have any trades on crude, which I was thankful for. There was a setup that I was really skeptical about, but it never ended up triggering. Price action was just very flat today and it’s kind of unusual. I think the last time that I didn’t have any trades was, you know, back mid-summer. But again, the methodology and, you know, kept me out of very slow price action, which as you mentioned, you were thankful for and I was thankful for today. That’s really all I have to share. My focus has been on crude, one, a single market. And I would encourage new traders, when they come in to this business of trading, to find that one market first and specialize in that before you ever consider adding multiple markets and a lot of additional thought process. Just become an expert in one area first.

Mark Soberman: Yeah, I mean that’s–it’s interesting because we–you know, like we did this webinar today and that came up from a few people. They were saying, “Well, you know, everything looks great, but, you know, with Premier Trader University, I’ve–you’ve given me so many choices, I kind of don’t know where to start.” This is something that we do hear a lot and we really have to work hard to get people to focus in on starting in a way somewhere. You know, it’s interesting and you’re right Brian, people get almost paralyzed when they have a lot of opportunities and they don’t know where to start or they do the opposite, and they’re so fearful of missing out on a trade in one of 10 different markets they can trade that they attempt to do it all in both cases, and unfortunately leads to failure. So, really I think the lesson there is start somewhere and start with a market, focusing maybe in some of the areas that we’re suggesting. These tend to be good places to start overall. So, I think this is probably a good time to segue into our tales from the stupid section or part of the podcast. So, I’ll join you there on the other side with my tail from the studio.

Mark Soberman: Okay. So, now, it is time for us to do a bit of our confessional, which is our “Tales from the stupid.” As active traders, Brian and myself, and maybe all of you or maybe not occasionally maybe make a mistake in your trading, and you know we’re not ashamed to admit it, we definitely do as well. These can be great things, really learning experiences if you take it for that. And in many times, it enables us to sort of share it with our audience and the people, who take our training. So, hopefully, they don’t make some of the mistakes that we did. But recently here, I made kind of almost like a shocking mistake because I’ve been doing this long enough. And it really came down to I was trading silver, and I had a buy execution that I had put through, and I wasn’t really paying close attention. I did not realize that my broker, which in my case just Interactive Brokers, did not execute the buy. And the trade ended up doing wonderfully and rallied up to where I should have been exiting for my profit target, which even more painfully was $750 per contract traded.

And when I went to exit, I realized I had no position. So, what exactly happened there? Well, what happened there was the contract, it was on a rollover day and IB, Interactive Brokers, because that’s a commodity that can be physically delivered, they no longer allowed me even though it was still a trading contract, they were not allowing any executions in my account on that specific month of the Futures. And so, the stupidity there was I just wasn’t paying attention and I didn’t realize that we had rolled that day into the December contract and I was trying to execute. I can’t remember if it was September, October, but I was trying to execute on a contract that still had volume, still was being traded, but I could not actually get the trade to go off, and it ended up being a pretty costly mistake. So, it reminded me once again, that if I’m trading multiple different Futures markets like here we are in September, we need to be aware right now, we’re trading the September contracts. They’re about to roll, so we need to be moving into the December contracts. And you know Brian mentioned crude oil back rolls every single month, you have to be on the rollover.

So, it may seem kind of obvious, kind of basic, but like Brian mentioned before, sometimes trading just one market probably makes your life a lot easier. Me trying to juggle six markets, it’s a bit of a mess with the calendar, but you have to stay on it, and that would definitely be at least for this podcast, my “Tale from the stupid.” Now Brian, I’m going to hand it off to you. I know you have so many to choose from, but, which one did you choose?

Brian Short: There’s that sarcasm again. And Mark to be honest, I only have one this month. So, here it is. I’m going to give you the moral of the story first and then I’m going to tell you a little story. The moral of the story is, “Don’t be afraid to switch brokers when you figure out that things aren’t going execution-wise properly.” Okay? So, let me tell you a little bit of a story here. Myself and one of our coaches, in fact, you’re going to hear from him in a moment, Mike Rykse. We both trade crude oil in the mornings. He trades at a different broker than I do, and I’m not going to name the broker, but you’ll understand why in a second here. This trade goes back just a few days ago and both of us put this trade on to go short at a certain level.

What I found interesting and I know we both placed the orders at the exact same time to different brokers, and what I found interesting was, we were both debating whether this trade was going to work, and it actually ended up working by the way. But it was at a level, you know, above a zero, zero level, which we, you know, find key and supported them right at that level. Anyways, the market slammed to the downside. And what happens in that and what I mean by that, price action just flew through our entry, you know, 20 cents passed it very quickly. And in that situation, you have to expect that slippage is going to occur. Slippage, for those who don’t know, is when you don’t get filled at the entry you wanted to, you know, in this case it was further down. I had four cents slippage on that trade, which may not seem like much. But Mike only had two cents of slippage, that’s 20 bucks versus my 40 bucks.

In the long run, that can add up and the only difference there between the two situations is he’s at a different broker than I am. So, if my point here is, if you see your broker giving you excess slippage on each trade, if you’re experiencing that, don’t be afraid to seek out a broker that is going to give you better fills. And so, how do you figure that out? It’s a little bit of trial and error. In this case, I happen to be, you know, in close communication with Mike and we compared notes. And so, what I am going to give you here is a recommendation for a broker that executes very well, is known for doing a good job, and we get no benefit out of this. It’s simply I want to share, you know, a situation where you can get good execution and the broker is Interactive Brokers and that happens to be the broker that Mike is using.

And Mark I know, you use that broker in all your trading and we’ve experienced a pretty good fills with them. So, that’s my “Tale from the stupid.” Don’t be afraid to make a change when, you know, you’re noticing those kind of things, those kind of issues. And I’ll also add this goes for Forex brokers too. Forex brokers in the past were notorious for making, you know, the market go to price levels that were just unheard of. And I remember years ago battling everyday with Forex brokers on those kinds of issues. It’s not so prevalent now but the–you know, some of the small brokers you can have these issues. So again, if you’re having that type of a problem, don’t be afraid to move your account just, you know, to a broker that’s going to give you good fills.

Mark Soberman: Yeah, really good points on the Forex side in particular, you know, which you mentioned Interact Brokers saying like we just said, we have no relationship with them. They’re not always the most friendly people, but they do a really good job in what you need them to do a good job and that’s execution. And on the Forex side, for instance, I can tell you today running two brokers–actually, three in parallel on Interact Brokers, it was under one half of one pip and spread. I wanted to execute a trade. Another broker was about one and a half pips and another one was two pips. So, you know, where you’re going to get your best overall fill, right, and it makes a big difference when you start adding these things up over time.

And as traders, you don’t have a big enough edge. We just don’t win enough to be able to compensate for big slippage and big commission. So, I don’t know, maybe we need to have a new section called “Name that broker,” “Name that broker,” where we out some of the brokers, who do this. But we’ll certainly think about that maybe they don’t–they shouldn’t always remain nameless if these things are happening. So, now, we’ll sort of segue into our next section which is we–where we talk a little about our genius when it comes to trading.

Mark Soberman: All right. So, I’ll go ahead and start this off. And as you would imagine, Brian, I have so many different possible ways I can go when it comes to, me personally and my trading genius so it’s always difficult to choose just one. But I really give Brian, as you know, a hard time in some of these podcasts. But the reason I do it is not because he deserves really any of it, it’s just he has great comebacks, but they all come like 20 minutes later. So, when we stop the podcast, I’ll start getting IMs and then I’ll get his comebacks and believe they’ll be good. But I just love the little bit of delay that I get.

Brian Short: It’s just because I am such a nice guy, Mark. I just can’t say anything bad about anybody, including you. So, there you go.

Mark Soberman: That’s true, yeah. That’s true. He is too nice for his own good, that’s true. So, really just the simplest form of my genius, and it really isn’t a lot of genius, but it’s we kind of went back, we talked about in the beginning a little bit of getting away from the markets. I’ve learned not to be super high stress in my trading. But being a system developer, being somebody, who has developed a lot of the systems that we have, a lot of the training, I don’t feel a lot of stress in my personal trading, but I feel a significant amount of stress in all of the systems and strategies and training that we put out there. Because I certainly feel a degree of responsibility that I wanted to work wonderfully for everybody, who is involved with Premier Trader University or NetPicks or Keltner Bells or anything we put out, I want people to do well and I do take it personally.

So, getting away from that a little bit is a bit of a life saver and it’s also great for recharging, because it’s always one of those things when I leave the office, I come back, which is fresher and newer and better ideas. I mean Brian and myself, sometimes we even go to some of the trading trade shows, which in recent years, they don’t quite have the glamour or the attendees or really the interest, but it doesn’t matter without fail I always come back from those inspired and with new ideas just having a chance to think about it. And I think for everybody listening, as traders, it’s really hard to turn it off and to say I’m not going to trade on a given day or a given week or two weeks because it’s stressful. What if you miss a great day or a great week or who knows a great month? You know, that can really wear on you. But I’m telling you, it’s going to wear on you even more if you try to just continually trade every single day, every single session, thick or thin, you won’t be able to survive this profession long term.

So, force yourself to do it somehow, even if you didn’t do it this past summer. Force yourself to take some mini trade indications on occasion here in the fall and the winter. We’ll be forced to a little bit with Thanksgiving and Christmas and Hanukkah and New Years and all that but make sure you do that. So Brian, I hand it off to you.

Brian Short: All right. For those that know me, you know that I have a background in computers. I own a computer consulting firm for over 20 years. And one of the things that was drilled into me in that process in owning that business was contingency planning. You know, everything I do in my trading, I have a backup plan for because you just never know when the technology you’re using is going to fail. And I got an example here recently, this happened actually last week. And what I found out later was interesting is it happened to Mike also, I mentioned him earlier, the exact same thing happened to him with a different broker. And here’s what it was.

There was a situation where I was long on crude and the trade was just taking forever, and it just wasn’t going anywhere. It didn’t even get to my first target objective. It was just going sideways. And then all of a sudden, I started to get a short reversal setup. So, like any good trader, I placed my short reversal. It happened to be at the stop of my long trade. And all of a sudden, you know, and it wasn’t two or three minutes after I placed that order to go short, the market turned over and it turned over pretty fiercely. And to the point where I got filled, which was good. There was a little bit of slippage on the trades. I got–you know, taken out of my stop on a long, reverse to short, there was a couple of cents of slippage. But what happened is, the OCO part of the order, and that’s the part of the order that goes live after I enter that short trade, it never went live. And I could tell that it never went live on my matrix, the–you know, the order stayed green. They didn’t execute.

What’s interesting here is, if Mike’s with a different broker, he had the very exact same thing happened to him. So, there was something going on with the exchange. So, the point I want to make here and the moral of the story is you don’t want to panic when you get in those situations. You want to have a backup plan. You want to know what you’re going to do in that case. So, as the trade progressed and it went very quickly towards my target objective, I was trying to actually, after it hit the target objective, I tried to exit out of that trade by hitting the close button on my matrix, but it didn’t work. And I was trying to move the OCO orders around. They weren’t moving. Something was wrong in the exchange communication between my matrix and the actual live trading. What I ended up doing in this case was actually buying at the market to close the order. And I didn’t want to do that too quickly because if those OCO orders went active, you know, they could potentially fill and cause me to be, you know, in a direction I didn’t want to be.

But ultimately, I got out of that trade and it worked out for me that it went like ten ticks past the target objective. So, that’s a situation where it worked in my favor. You know, it could easily have gone against me. The whole point there is have a plan on what you’re going to do. I had the broker on speed dial as I was taking that action, I was on the phone, you know, calling the broker so that they could take action if I couldn’t. And ultimately then, at the very end, I got out of the trade with an extra profit. I did call the broker to make sure that I was totally 100 percent flat that there were no extraneous orders out there. And so, just keep all of that in mind. We are dealing with technology here. Sometimes that technology fails. There are different failure points. There could be your Internet. It could be in this case, it was the exchange that had the issue. Sometimes things are out of your control, but have a backup plan and be ready to take action to control those trades if an error like this occurs.

Mark Soberman: Yeah. And I think Brian it’s something when we started working together early on, you used to preach it to me. And, you know, I mean I listen to it, but I wasn’t always the best detail. I’m still not in preparation like that and you’re definitely right. I mean you really advocated that to me, and sometimes I needed to maybe learn the hard way, but you kind of don’t want to learn the hard way because it can be very painful. So, I know personally, I’ve made a lot of strides, you know, in that area in having redundancy in backup, and knowing what I’m going to do in a variety of different situations because you know what? They all come up. I mean I’m just coming out of what I’ve term “30 days of broadband hell.” And I would never name the provider, Time Warner, who, you know, really caused this. But one of the things that I did, this is really at Brian’s behest was, you know, I got backup, DSL backup AT&T, and I also have even 4G cell phone backup.

I know we talked about this little bit in a past podcast, but what was interesting when we’re talking about this I had yet to go through this. And literally, I had a 30 day long battle with the unnamed broadband provider, Time Warner, about this. And ultimately, we did get it resolved and turned out to be a much bigger issue in the area. Of course, they didn’t believe me for about the first 29 days, but it’s all resolving. And look, it’s not to indict them. I think, you know, really any provider can have problems, you know, when we’re dealing with technology, nothing is a 100 percent. Even the best of the best have issues. I mean before that, I had nothing but, you know, good to say. And then when you finally have something go wrong, it’s like the world is coming to an end so the redundancy and being prepared for it is certainly great advice.

In this episode, you’ll find out..

• How Brian’s trading after the Summer slump…
• Mark’s latest market recommendations (ever tried RB?)
• Brian’s broker fiasco… find out which broker he recommends!
• And what’s got Mark feeling queasy…

Not to mention, a very special guest interview with Mike Rykse talking how to trade options and his options trading strategy plus the dreaded ‘S-word’… swing trading. Find out how swing trading can complement your day trading getting you through the lulls and down time (like during this Summer) and pad your bank account without spending a lot of time.

Mark Soberman:  All right.  Hello.  Welcome.  Thanks for joining us for the latest installment of the NetPicks Day Trading Authority.  This is Mark Soberman, and I’m joined once again by my co-host, Brian Short.  Brian, hello and are you out there?

Brian Short:  Mark, I’m out here, and it’s good to be back.  It’s been a while, looking forward to another podcast session.

Mark Soberman:  It has been a while.  I don’t know how this happened, but here we are.  We are going to be recording this.  We’re in July and it’s, you know, we were given a pretty good job about giving these out on a regular basis.  And then I guess all of a sudden, life in trading happened.  But we do have a pretty good excuse for it – something that we released to the public here.  Actually back in June, pretty much consumed every waking moment of the day and night for myself and Brian and really, our team, so, a big part of what we’re going to talk today has to do with that, you know, why we sort of dove into that degree and dedicated ourselves to launching something that we’ve probably have resisted launching for a very long time.  So, we have our excuses, we have our reasons, but definitely glad that you guys are with us again and we’re here to share some, what I hope will be some really great information for you active traders out there, you day traders or active traders, whatever you want to call yourself.  And that’s what we’re here for today.

So, a couple of quick housekeeping things just so you know, you can always go to netpicks.com/podcast, P-O-D-C-A-S-T, if you want to hear prior issues, versions, podcasts, whatever you call these things; that’s always out there.  Of course, in the iTunes Store, we always welcome you to download us there.  Give us an absolute wonderful review that is always nice as well.  If you’re learning anything from this, we hope of course that you are.  A couple of other quick reminders, we always do interviews with other experts in the trading world, so if you’re ever interested in those, you just go to netpicks.com/authorseries and you can sign up to participate in the next one live.  And a little bit later in this podcast, you’re going to be hearing from Richard Weissman, who wrote the book “Trade Like a Casino,” and it’s a really fascinating book.  And it talks a lot about managing risk and relates a lot of it to, as you can imagine, the casino which might surprise you, but you’d be amazed how much it actually correlates from trading to actually — well, doing the best you can in a casino — controlling your risk and your emotions and everything else.  So, you can join us live for the next one as well.

But, Brian, really what I want to talk about a little bit today is why we’ve launched the latest project that we’re heavily involved in.  And for the people, who don’t really know what that is, it’s called Premier Trader University.  And if you want to find out more about that and learn a little bit more about it, there’s a whole bunch of free information, articles, screenshots, trades, etc., on that website and it’s just premiertraderuniversity.com, but the real main reason for starting that is those of you know NetPicks for a long time, been around since the mid ‘90s, we’ve always been about system development, and I’ll be perfectly honest, in some ways we sort of assumed that people came to us with the knowledge base and with the education and they could take the tools and the systems that we offer and go on their merry way and trade profitably.  And Brian, let me ask you, is that always the case in your experience?

Brian Short:  Well, Mark, unfortunately no.  It’s not the case.  As you mentioned, we assumed that we would put a strategy in the hands of a trader.  That strategy would have an edge, and it was our assumption that they could take that and execute it on that strategy, and you know, extract profits out of the market.  But, for many, many different reasons and I think individual’s different.  They were not capitalizing on the strategies we put out.  And so we just got frustrated with it.  I know you and I sat in a strategy meeting almost a year ago and we’re trying to solve this very problem.  And so, Premier Trading University is the answer to that problem.

Mark Soberman:  Yeah.  I mean that’s exactly right.  That’s exactly how I would say it, because the problem has been driving me crazy a little bit, and I really know this is a little bit of a rant — is a lot of people come to us and they are completely worn out.  They have spent thousands of dollars on trading stuff.  Maybe I could say the word gimmicks, whatever the case may be — they’ve lost all that money.  Then they’ve traded a lot of money with those gimmicks; they’ve lost all that money.  Then they went ahead may have even put in a fair amount of time in the beginning because, you know, when you’re new to something, you’re so enthusiastic.  And I know a lot of you listening, this is you, and it was me, too.  Back in the past I was in the same place, you know kind of a little bit despondent about my trading.  And you know, you put a lot of money, a lot of time, a lot of effort, and it’s stressful.  And it’s very, you know, there’s a lot of anxiety that comes with trading.

Unfortunately, what we were finding is, by the time they found us, we were just getting this large group of paralyzed people, and let me tell you, there’s nothing more frustrating than people finally finding you, and we think finally we have a solution for them, and they are able to do nothing with it like you’ve told me.  I can’t tell you how many times you’ve told me.  Hey, I just had a call with a guy and I can’t believe it.  He, you know, bought this, bought that.  In fact, he bought one of our systems.  He bought, you know our ultimate swing trader.  And you know, we’ll call him Ken.  And Ken just says, “Brian, why should I buy this next course, because you know when I bought the UST from you… oh and by the way, and that you were telling me…” and you would ask, “Hey, how’s it going?”  And he — and Ken will go, “I don’t know, it’s on my shelf.  I haven’t, you know I haven’t tried it yet.”  It drives me crazy that there are so many people, who have reached the point where they’re still desperate for answers, but unfortunately, they’re out of patience, they can’t take the stress and the anxiety and maybe in some cases, they’re out of funds.  I mean, I know you constantly tell me stories like these.  I mean is this how you’re going to experience more and more?  Is it just a current thing?  Or am I just thinking that this is something that has been going on forever, but I’m just starting to notice it more?

Brian Short:  Well, I think, Mark, to be honest, it’s going on for a long time.  And, you know traders, I think, have a mindset that instant gratification, you know, we do live in a fast-food society.  We want that instant gratification, and if we don’t get it right away from whatever product we’re purchasing, in this case a trading methodology, if we don’t get that, we’re very easily distracted, because there are so many other aspects to trading that can interfere with your success.  And the goal of Premier Trader University is to train our traders on that; expose those areas.  We’re sharing from our experience over the years, because we’ve been through the same process ourselves.  And it’s that learning process that we’re trying to impart, now to those members that come in to the university, and help them get on a fast track to get, you know, get going, get profitable, and to become ultimately a successful trader.

Mark Soberman:  Yeah.  I mean, I think — I think if people could just, you know during this podcast, if we could do a little bit of, maybe just kind of repeat back after me, if you could, you know at this point tell yourself there is no plug-and-play trading.  I mean, literally repeat it to yourself.  Give up on that.  There is no get-rich-quick trading.  Give up on it.  There is no 100% success trading.  None of that exists out there.

However, we actually are in what I think is the greatest occupation out there.  And I’ve said this before, because this is the carrot for everybody.  Can you name another business that you can double in size by literally pressing a different number on your keyboard?  If you’re listening to this and you own small businesses, if you’re involved in a corporation, if you’ve done marketing, think how hard it is to double your business today.  Whether you’re a professional, a doctor, or lawyer, a CPA, it doesn’t matter.  It’s a lot more time, it’s a lot more effort, it’s a lot more money.  Well, when it comes to trading, all I have to do is buy one more contract.  Instead of buying one, I buy two.  Literally, I move my finger over, you know a couple of centimeters on the keyboard, and I’ve just doubled my business.  So, what I tell people is look, it’s going to take work, it’s going to take effort, it’s going to take some time, but isn’t it worth knowing that you can double, triple, quadruple your business without even moving in your seat?  Without literally maybe just moving your hand or your arm just a little bit on the keyboard?  If you constantly remember that and remind yourself of that, and remind yourself that you’re in the greatest occupation that there is.  You have no employees; you have none of all of the grief that goes with that, you don’t have to worry about real estate.  In fact, you don’t have to worry about the economy like everybody else is worrying.

With trading, we can buy, we can sell, we can make money in either direction.  Use all that for your enthusiasm, your motivation, but give up on the fact that it’s going to be like, Brian, like you mentioned this, you know plug-and-play easy thing that’s going to happen overnight.  So, the whole idea behind Premier Trader University was to truly create, I should say, a curriculum.  And we’ve modeled it after something that’s worked for eons with people, which is a college or a university.  And that means taking people through from the prerequisites — making sure everybody has all the basics to the point where we go through what we call an undergraduate education right to picking your major, which means you do need to specialize.  You need to specialize in Futures, you need to specialize in Forex or you need to specialize in Stock and Options.  Eventually, can you double major and triple major?  Of course, you can, but that’s advanced stuff, right?  Most people are all over the place, so we’re going to force people to go through the basics, the undergraduate, choosing the major, and then what I’ll sort of call the advanced training.  The beauty of it with Premier Trader University is the fact that we’re kind of forcing you to sort of kind of shake free a little bit of that paralysis.  You really need to attend the classes.  We expect you to attend just like in college.  Hopefully, most of you actually attended your classes.  You know, we want you to be engaged, we want you to be practicing, we want you to be, you know working in the markets, and there’s a lot of back and forth, and it’s truly an interactive experience.  I just don’t think any more of that as a company like NetPicks, we can just sell people indicators and sell people systems and expect them to really kind of be able to make it work.

And I’m not saying that everybody listening right is necessarily lazy, but we actually do have a lot of lazy people out there.  And mostly it’s because you’ve been kind of beaten down by your experiences before maybe finding us or, you know, really not going down.  So, I think the real key is, the last thing I ever want to hear is, “It’s on the shelf and I’ve done nothing.”  Because you know what, even if you have a bad system, you’d be amazed how much you can learn just by putting it to use, even if it’s just in demo or virtual.  I’ve learned a ton on some really crappy approaches to trading, because it’s been the thing that’s inspired me to come up with, you know, fresh ideas.  I mean, that’s really many times for me personally.

The difference-maker, I was reading a book recently, Brian.  It was — it’s by an author called Brendon Bruchard or Burchard.  It’s called ‘The Charge.”  And it’s all about really motivation, and, you know I find in trading it’s not always easy to stay motivated, because, you know, I like to say, you know, I feel I’m successful in trading, but I have my share of losing trades, losing days, losing weeks, and you know, no matter how optimistic you are, it can beat you down.  I mean, there’s just, there’s no question about it.  And he talks about a formula that a lot of people just kind of get paralyzed with, and it’s pretty simple, it’s understand, perform, and master.  And most people rarely get off of the understand part of the equation.  I mean, I guess, once again since Brian talks to so many people, who are in that sort of learning phase.  I mean, why do you think it is?  Why do people get so paralyzed and don’t even get off that first step?  You know, what is it?  What happens?

Brian Short:  Yeah.  Mark, I would say fear is probably the biggest driving factor for the lack of success in traders.  They’ll buy, you know, a new strategy.  They might buy one of our strategies.  And even though that strategy gives them an edge in the marketplace, they’ll experience a series of losing trades.  And it’s amazing to me how easily a trader will throw out a methodology when you have two or three losing trades in a row.  And that might be very normal for that strategy.  It might be just a part of doing business, but yet the trader jumps to the next strategy that they might think will do better.  And their — bottom line is there’s no way to avoid losses, and that’s probably one of the most difficult things in trading, is to accept loss, accept the fact that the method is wrong on that particular trade or series of trades.  And so, it’s that’s a consistency, I think, that’s probably one of the driving factors why traders don’t have success.  They just continually jump from one strategy to the next when they don’t get the success factor that they’re looking for.

Mark Soberman:  I mean, I think that nails it then.  I think, you know, if you guys are listening to this podcast, you have got to make a pledge to yourself that the next strategy, system, education you go through, you know, yeah, I hope it’s with PTU, which is Premier Trader University, but whatever it is make the commitment to fully be a hundred percent competent with that strategy.  You have no idea if it’s going to work for you or not until you get to that level where you can say, “I’m a hundred percent confident with this approach, I fully understand it.  If you don’t have that, you’ll never have confidence, and if you don’t have confidence in trading, it will never work for you.  You’ll be nothing but somebody who’s loaded with stress and anxiety, and you’ll be that guy who’s always jumping out way too soon in the good trades, staying way too long in the bad trades, and you’ll be the one throwing away another system in the garbage.  And you know why?  That may have been the one that could have changed your life, but you will never know, because you did not stick with it and did not get to the point, where you’re fully 100 percent confident with it.  Then you get to the point, where you start to perform. And, you know it takes me a while.  I mean, when I’m trading a strategy, I’m not a hundred percent perfect with it because I’ve got to like sort of retrain my mind to turn it into a reflex, and you know that takes some time.  You can‘t just read it in a book and immediately do it in the markets with complete reflex.

But with some practice and by being confident and by being confident, now I’m able to perform, and now I’m able to get to the point where I can actually master the strategy, and you know what, the anxiety starts to fade, the stress starts to fade, ah, you know, some of the crappy days, they still happen, but you’d be amazed how much easier it is to deal with those days by being empowered with this overall, and that’s why I think again, the education element is so important.  We really kind of ignored that for really the whole history of the business, and even though, we felt we were educating and teaching, we always would say,   “You know we’re gonna allow other people and other books and other experiences to sort of, you know, develop those skills for people and I will provide the great systems.”  But what we realize is you’ve got to have a great system, but you also have to get a great education and you definitely have to have tremendous support and a real interactivity.  And I think that’s what we’ve really done.

I think the other big thing that was sort of the breakthrough moment for us is we were working with some people, probably some of — probably even some of you, and you, guys, were super dedicated, putting in the time, working your butts off, but this became kind of your life and that’s all there was in your life, was trading.  And I’ve gone down that road before too where this is all-consuming.  Unfortunately, that’s not a healthy thing either.  So, you know we decided to come up with something we call Lifestyle Trading.  And you know, maybe, well, what is lifestyle trading?  And that’s what I’m telling people now.  I go, “I want you to now start telling people when they say, “Hey, what do you do? Don’t say you’re a day trader; don’t say you’re an investor, say, ‘I’m a lifestyle trader.”  And a lifestyle trader is very simple.  You trade for your living, you trade for your part-time income, you trade for your retirement, whatever the reasons are that you trade, but you balance it with your current lifestyle, and I hope, it actually improves your lifestyle, because the other thing I think we realized is we had some people, who are doing well, but all they were doing were trading and there was just massive burnout happening.  You can’t trade Forex, the Asian session, the European session, the US session and do it for an unsustainable amount of time.  I mean, Brian, I know you can speak for this first hand.  I think we’ve talked about it briefly in another podcast, but remind us of what your life used to be like, trading Forex.

Brian Short:  Yeah.  Mark, it was a grind for me for three years.  I would trade at the European sessions starting at 2 a.m. in the morning and going till about 4 a.m. Eastern Standard Time; that’s the prime time for the European session, and the problem with that is I would, you know, have a little bit of a break there, but then I would get up, you know at seven, for the day and do the normal business, and then repeat that all over again the next day.  Well, that is not engaging the markets as a lifestyle trader, alright.  It was really outside of what I would call my comfort zone and so it took three years, but at the end of that it was like, you know I need to trade when the market – when it’s convenient for me as a trader.  And so, it was at that point that I started to trade Futures and engage the market for a couple of hours in the morning, get in, get out, get done.  We used power of quitting.  I used power of quitting in my trade plan, so that, on some days I’m potentially done in a few minutes literally.  There are other days that it takes me the entire two hours.  Yeah, that’s my story and for me, and I think, as traders, we’ve all kind of gone through that.  We see the opportunity out there.  We see, you know, the Forex markets 24 hours, five and a half days a week that it’s available.  And it gets promoted sometimes by brokers that, you know, you can trade when you want, and you can to a degree, but rather than trade, you know, that entire 24 hours, find a slice of time that fits your lifestyle and fits into your schedule, so that, you know you can get in, get out of the market and have a profitable trading business.

Mark Soberman:  Yeah.  I mean, I think that kind of really nails it on the head too, because it’s interesting, we have a section here in the podcast that’ll be coming up where – and it will be due in here in a moment, and we call it kind of in good fun, “Tales from the Stupid,” and then also our Genius segment.  And a lot of what you’re talking about there, Brian, at towards the end with, you know fitting your personality and your time of day actually is the messaging that I had for when I kind of considered the sort of the genius moment for me with my personal trading, because we get asked about what we trade quite a bit and why, you know, why we make those choices.

So I kind of, you know close this portion by saying, check out premiertraderuniversity.com.  There’s a lot of neat stuff on there, some cool trading lessons, screenshots, we teach a lot of things, attend on one of the webinars if you want.  You know, like I said there’s no obligation or anything like that.  I just think, you know it’s something that you can learn more about it and learn about this style of education, this style of trading, it maybe literally the breakthrough that you’ve been looking for, but either way, it’s just worth checking out and seeing what you think overall.  So, I think it’s probably a good point to move on to our next section, which we call “Tales from the Stupid.”

Mark Soberman:  Alright Brian, so, I’m going to go ahead and kick this one off, and I’m going to talk about my Tale from the Stupid.  And if you listened to the prior podcasts, usually we relay something we’ve done in our personal trading that, well, actually it probably turns out to be one of the dumber things we’ve done in a while and it almost always leads to losses, but you know what, as a trader, you learn from it and hopefully you don’t do it again, at least another 14 times.  Maybe like 13 times, and you know you learn from it.  But the thing that I was thinking about a little bit is since we’re talking about education and we do feel that we’re educators, we’re trainers, we have this knowledge base for being in this business for 17 years, and one of the things that in a way that I think is sort of some of stupidity on my side is I do feel a lot of pressure from our customer base to constantly cater to Forex traders.  A lot of people have been sort of sold that, you know, the way you make money as an individual trader is Forex.  And I’m not here to tell you that that’s not necessarily the case, but what I am here to tell you is that day trading Forex is one of the hardest things possible in trading.  I meet and talk to very few people, who are doing it successfully, yet, we actually encounter a lot of people, who are able to get to the point of mastery on day trading Futures and certainly at swing trading Stocks and swing trading Options, we talked to a lot of people, who are actually doing that successfully.  And I definitely run into and even train a lot more people to be successful swing trading Forex.  But I think everybody feels like, “You know I wanna trade the EUR/USD or the GBP/JPY or the EUR/JPY, and I wanna day trade it and I wanna be in and out in 20 minutes.”

And as it turns out, one of probably the stupider things that I’ve think we’ve done is do our best to try to really satiate that demand and come up with things they could do.  All kind of knowing – you know what; you’re really putting in way too much time in something that’s going to be extremely difficult to be successful.  So, the thing that I’m really been focusing in a lot recently is if you’re a Forex person, I’m trying to get you to swing trade Forex and not to day trade Forex.   If I could probably leave you with any advice from this podcast if you’re a Forex guy is stop trying to make money; day trading the spreads are no good, the scalping, the locked-up platforms, the news, so many things go wrong trying to day trade Forex that really don’t happen many times when you’re swing trading Forex, and also open your eyes a little bit to some opportunity that’s not in Forex.  And I actually think there’s amazing opportunities on the Future side and even on Stock and Options.  So, for me, and maybe it’s not a personal thing with my personal trading, because I don’t day trade Forex, I can tell that much, I swing trade it, but why don’t I?  You may want to ask, and why don’t I if it’s easy?  Would I be doing it?  You know, the answer is yes.  So, that’s mine.  Brian, what about for you?

Brian Short:  Well, mine actually comes from one of our students and members here at NetPicks, and so the moral of the story, I’m going to give you that first, and then I’m going to tell you what had happened for him.  But, really what I would recommend you do as a trader is practice, practice, practice, okay?  And what I mean by that, you’re going to, one, practice the methodology in real-time, in other words, identifying the trade setups and then taking those trade setups and putting them in to your platform to execute, whatever that platform might be.  It could TradeStation, The Matrix, it could be NinjaTrader and their DOM; it might be another broker that you’re placing those trades into.  The area I want to focus on in this particular conversation is the execution part with your broker.  Make sure that you have practiced that process in a demo mode over and over again, and it becomes reflexive for you.  And what I mean by that is it’s just automatic; you don’t have to sit there and think about it.  What happened with this particular customer is he normally trades three to four contracts in crude oil, and on this particular day, by way of a single mis-key, he traded 15 contracts in one trade.  Well, needless to say, that did not work out so well for him, and in fact, he was down significantly within just a few seconds by just a mis-key stroke, one single mis-key stroke.

So again, I – I go back to my point is as traders, this is a skill like any other skill you’re going to learn, you know if you become a doctor, you have to practice; if you’re a pilot, you don’t jump in the seat of a 747 or just takeoff, and I think too many traders today do exactly that.  They get a shiny new strategy, and as soon they take the cover off of it, they’re trading it live, and that’s the wrong thing to do.  So, practicing the demo mode is very important in the process.  Make sure you have a good understanding of your methodology.  Make sure more importantly in this particular story that you have a good understanding of your broker interface and how to execute trades.

Mark Soberman:  Yeah.  I think that’s a great point.  It’s funny, because in the news recently when we’re doing this, there’s been several stories about these mistakes, and some of these have been multi-billion dollar mistakes that have been going on.  So, granted, in this gentleman’s case, it wasn’t multi-billions, but at the same time he wasn’t a hugely rich corporation, who can maybe withstand that type of mistake.  And it – you always think, well, you know maybe we may make those mistakes, surely a big company, you know, wouldn’t, but it just shows you how easy it is to kind of have that slipup.  So, you know a great point.  You can never practice enough.  You can never be more careful in your trading, so, yeah, definitely a key thing.  So, let’s talk a little bit about the flipside of this, which you know, we all do some dumb things, but we also do some really smart things, and that’s all about the Genius in trading.

[Voice over] Genius

Mark Soberman:  So, for me, I mentioned, Brian, just a bit ago, you were talking a little bit about, you know, finding the things that fit for you.  And really, that’s been probably the smartest thing that I’ve done.  And I really encourage people, because we’ve been getting this question a lot in PTU, Premier Trader University is, well, “You know, Mark, Brian, etc., what market should I trade? I mean, you know I’m located in Australia,” or “I’m in the UK,” or “I’m in the US,” or “I’m in Canada.”  And we start to tell people, “You know, you gotta look at several different things.  You have to look at where you’re located, the size of your account.  But you also have to look at your personality.  You know what you’re going to, you know, really enjoy trading?  You know what fits your style.”  I’ve got people on the team here at NetPicks, who absolutely love slower pace, swing trading.

You know, I’ve realized in my life that’s not really me.  I kind of am a bit of that instant gratification kind of person, so, I’ve tried to find some ways that I could balance that a little bit in my trading.  So, you know I don’t want to do things wrong and end up with another “Tale from the Stupid,” but at the same time I have to understand, “Hey, this is who I am.”  So, like when I tell people, “Look, you know I trade crude oil.”  There’s a reason I trade crude oil.  It moves quickly.  It has really good leverage.  It has a lot of trades in a short amount of time.  I don’t have four hours a day to trade, because we’re running this business as well.  You know I trade the DAX Futures, because I can again, I get all those good things, the leverage, the movement, the speed, and I can do it in some off hours.”  You know, people sometimes go “Mark, why don’t you trade in the afternoons as well?  Why don’t you trade the S&P E-mini?  I mean it’s got all that volume?”  Because it doesn’t fit my personality, it doesn’t fit time of day.  I just mentioned Forex day trading; you know what, that doesn’t work for me.  I don’t want to deal with it.  I don’t want to sit there for three hours, which you need to sometimes when you day trade Forex, because it moves so slowly sometimes.  But you know what, I could swing trade it.  No problem.  I don’t mind coming in at night and changing my stop and my targets and placing a buy stop.  So, for me, that’s been the biggest thing that’s made the biggest difference in my trading, is realizing, I cannot trade everything.  I don’t have to trade everything.  I just need to focus in on the market.  Even if it’s just one of the markets that fit me best.  And I think that’s what you have to do as well.  And my answer is not necessarily your answer.  And too many people try to, you know follow maybe what we do exactly and then they realize it’s not for them.  I don’t think, because I trade a certain market.  Everybody should be trading a certain market.

The other thing is that I never think in my trading as it drives me crazy when people come to us and say this, “Mark, I wanna make $500 a day.  Mark, I wanna make a thousand dollars a day.”  I never view my trading in that context.  So, I am trading, the market’s that work for me, the times of the day that work for me and I have absolutely zero expectations on a given day other than I’ll trade it correctly, and the odds will be in my favor that every trade will work, which means a lot of trades won’t, but the odds will be in my favor more times than not that something will enter, and favorably and I have absolutely no financial expectations that I’ve put on to the market.  So, for me, that’s really been something that has been a breakthrough.  How about for you, Brian?

Brian Short:  Yeah.  Mine comes from today actually, and in talking with one of the rooms that we do for PTU.  We had a pretty good discussion about when to engage the market and when not to engage the market.  And at the time of this podcast, it is July 3rd, so, tomorrow is a US holiday, July 4^th.  And to be honest, the price action this week has been really subdued.  What we talked about this morning is, you know engage the market under your terms.  If you are trading around or near a holiday, just understand that the market is probably not going to act the same as it does during normal business hours.  And you just need to keep that in mind.  I think too many traders are stubborn and they say, “I’m gonna plough through anyways and trade.”  And you know what, you might do okay through it, but I think, in more time than not, there’s a lot of stress that comes from a very slow choppy market in that condition.  We don’t have all the players up to the plate, so to speak, making trades.  There are some, you know traders that are off during these times.  So, my recommendation there is any time before and after a holiday, whether it’s in the US zone, the Euro zone, just beware of that, that the market probably is not going to operate the exact same way that it does under normal business terms.  So, that’s my advice from today.

Mark Soberman:  Yeah.  It’s a great point.  I mean I’m going to be honest.  You know confession; I’m the worst at that.  I, a lot of times, logically know I shouldn’t and I shouldn’t trade, and I force it anyway because there’s a little something that goes through my head, I don’t want to miss out.  I don’t want to make that conscious decision to stand aside and then sure enough, that’s going to be the day that it would have been super easy and all three markets been a full target, etc. etc.  So, what I learned and I could tell you what I did today, is for instance again, understanding my marketing personality.  I know in the past I’ve looked at crude oil and it happens to typically move pretty good even on these sessions, where it’s a half day, you know, where the markets are closing early.  So, I traded the crude oil, I got a full target out of it, but you better believe that I stopped at that point and I was done.  I was very much ready also to exit that trade when it started to stall on its way to my target, because I’m like, like Brian mentioned I had a little different expectations on it today.  Now it got there, but believe me, that stop was a much tighter than I would have made it on most days.  What I did not do was the indexes like the Russell E-mini was in a slow-moving grind.  It actually was in a trade that I could have what we call gotten in-sync with.  I was like, “You know what, Mark, be smart here today.”  This thing is going to keep grinding.  It may eventually get to target, and I think it actually worked out, but it took like hours the same with the gold futures, which I like to trade sometimes.  It just did not behave the same way.  So, I think for once, I actually identified the markets that typically behave good in these situations, and I did stand aside like Brian mentioned, pretty happy for doing that.  And you know it is something that you’ve got to develop that discipline.  You know I’m not here telling you that it’s easy, because look I struggle with it as well, but it’s a great point, and it’s very timely for sure.

So, what we’d like to do at this point now is we’re going to go ahead and play for you a part of the interview that we did here recently with Richard Weissman.  He’s the author of a really great trading book called “Trade Like a Casino: Find Your Edge, Manage Risk, and Win Like the House.”  So, we’ve got a short part of the overall interview.  And then of course, you can go to netpicks.com/interview to both signup for the next ones coming up in out Authors’ Series as well as back here for the full interview if it’s something that you really like to hear.  So, with that, let me go ahead and we’ll switchover and we’ll hear my interview with Richard.

[Interview Portion]

Mark Soberman:  Yeah.  I think you also kind of add to that.  I think you can say that, you know, you should add some trader intuition.  Of course that comes with experience.  You know at NetPicks, we always say it’s sort of the art of trading.  We’d like to say we’ve got 90% mechanical and 10% is sort of the art of trading or I guess in your case, when you sort of discuss the intuition, because you make the point a little bit later in the book that while mechanical trading can be really quite robust, it does underperform the very best discretionary traders, but then you go on to say that, you know using mechanical systems is still the most reliable way to sort of turn negative to positive expectancies for most traders.  So, I mean, it does seem like that’s the place to be definitely having that full rule set knowing what to do in every situation.  I know in my personal trading, if I didn’t really have a rule for every situation, emotionally alone, anxiety, psychologically it would be really, really difficult, and then how do you get through the losing streaks, how do you even know, you know when to trail, when to exit out without those rules.  But I think a lot of people, you know going into trading without all that defined, it’s kind of like we offered them one of our systems like the Seven Summits Trader, and it’s all spelled out for them, it’s still difficult to follow.  You know, it’s still very hard for them to actually follow those rules.

Richard Weissman:  Oh yeah.

Mark Soberman:  Despite it being, you know, there’s a perfect road map that they should follow.  I think still most people have a hard time doing that.

Richard Weissman:  Yeah.  In the book I outlined the three stages of a trader’s career assuming they stick with it.  In the beginning, you know, unless you’re a market maker or you’re working for a commercial interest, just hedging, so, you’re equal and opposite in physical.  The beginning stage of a career of a trader is losing money, and the key point is how do we get from the losing camp into the winning camp.  Mechanical trading systems are the safest most reliable way of making that transition.  Once you’ve transitioned into the winning camp, now you’re an intermediate stage trader where you have the ability to succeed, you have the confidence, and generally that confidence comes from a mechanical trading system and your ability to survive long term, and that is a great leap forward in trading.

A couple of the limitations to that stage in your career are that you just come from the world of losing and so you can be kind of gun-shy.  You have the discipline where you’re going to continue to trade, but you’re not optimizing your opportunities because fresh in your mind was how easy it was to lose.  So, the 1% rule can act as a double-edged sword.  It can prevent you from becoming overleveraged, but it can also, when things are going well, force you to maximize the opportunities that are out there and at your access.  The other thing about the intermediate stage in a trader’s career is that generally speaking, it will be accompanied by a single methodology or a single model that works.  So, in other words, I think in the book I used the analogy of someone lost at sea struggling to survive in the open ocean, and suddenly they find a life raft, and that life raft is the mechanical trading system.  And so, they cling to it like you are in death, because they know if they let go of that life raft, they’re going to be drowning in water again, but once an ocean liner comes along, you get rid of the life raft, because you have something more robust, and that’s the transition from intermediate to advanced stage, and that could be that the augmentation of let’s say you were unsuccessful, finally you find a model that works for you.  It’s a trend following model and again, you cling to it like you’re in death.

But it’s very easy to become complacent and say, “Finally I’ve got something that works.  I’m not going to touch.  I’m not going to do anything.  I’m just going to stick right here.”  But growth and development as a trader entails expansion and thinking outside of the box and continuing to evolve as a trader.  And so one of the ways that I found that successful in terms of getting something beyond that first inertia point as an intermediate trader is if you have found success as a trend follower, go on and move and accentuate that success by using counter-trend systems.  And again, you know, in the beginning just start doing research on mechanical trading systems that are counter trends, and then as you get more confidence and you begin to see success, take it up to the 1% risk and suddenly now you have two tools at your access.  And then finally, the real kind of foray into the, what I would call the advanced trader stage is where you’re able to augment all these mechanical systems of the trader intuition and that just comes from experience.  You see enough data points.  You get enough data points under your belt and I think in the book, I used the analogy of the horror movie that when you are right the first time you see The Exorcist, you don’t know what the hell’s going to happen and you know you’re scared out of your wits, and by the hundredth time you see it, you’re laughing, it’s a comedy, because you know exactly what’s going to happen and it loses all of its emotional charge.  That’s the way trading is.  Get enough data points under your belt, and you see the way markets react when they get some, you know overblown piece of news that they overreact to it and you get an intuition of, at the very least, take some off here, move my stop to breakeven, or potentially, you know, even be more aggressive and fade the action, you know, buy it itself and then stick — it’s a cliché.

Mark Soberman:  Yeah, I was trying to think, here at NetPicks, like with our systems, I don’t think we have any, as I am sort of going through them in my mind that are just trend or just countertrend the way that I was thinking of through it.  Everyone has both, because, same thing I just don’t want to think we can have any, you know, any kind of regular continued success if we had just one or there.  Because it’s definitely extended periods of time where the market is just in an amazing trend, and if you have a trend-based system, you’re going to absolutely cleanup, but unfortunately, that always ends, and it starts to go sideways, whether you’re a day trader or a swing trader or a long-term trader.  So, I mean, I’m a big proponent of that completely agree you have to have both.  I think if you don’t, I think you’ll eventually.  Even if you’re doing well now, I think eventually you’re going to end up losing at that point.  There’s an interesting – a little bit later in the book as well, and it’s one of the rare issues I think it’s kind of rarely talked about and it was kind of funny, because recently I was looking at a sort of a managed trading site for Forex.  And it was, you know, individuals were able to get into and choose from literally hundreds of different managers.  It, you know, seemed like a really sleek idea.  But I started going through some of the numbers and there definitely were some good managers, but there were a lot of people with very nice profits, but they had some pretty outrageous drawdowns.  And so, you talk about this one ratio, and I’m not sure how many traders you can think about this, but its profit to maximum drawdown ratio.  So, basically, taking the net profit to the drawdown, and of course, you want that to be as high as possible.  I guess one question I would have is do you typically look at that ratio when you think about that as far as like annual profits, monthly profits, all-time profits, because obviously that ratio can get skewed quite a bit…

Richard Weissman:  Right.

Mark Soberman: …based upon the timeframe that we are looking at, kind of what’s your take on that?  I think it’s such an important number.

Richard Weissman:  Yeah.  The way I run it myself in my own trading journal is that I run it as two separate numbers.  I run the monthly profit to maximum drawdown ratio, and then I also run a cumulative profit to maximum drawdown ratio, and so, on the monthly, you’re going to see the numbers varying quite a bit and, you know, you’ll have a different criteria of what is robust.  You know like a 0.2 might even be robust on a given month, in general, you want to see, you know, “I’m sorry,” a 2.0 might even be robust.  Generally, you want to see a like a 3 or a 3.5, but on the cumulative, that’s going to – once you have the maximum drawdown, that could be the maximum drawdown for years.  And the profits will keep accumulating over time as you get more and more profitable months under your belt.  So, there, depending on how long the timeframe is, you want to see some, some really strong numbers like sevens, eights, nines, even, you know, even higher in order to know that you’ve got something robust.  So, the longer the timeframe, the higher that profit to maximum drawdown ratio should be.  So, let’s say on a 10-year back test, you want to see numbers in the 7s, 8s, to say that it’s anything worthwhile, worth selling.

Mark Soberman:  Yeah.  I think that’s really critical, because when I was coming through and sort of analyzing some of these very, you know, overall bottom line positive results, it may be like, they would show like a monthly average of maybe $5000 and then the next drawdown, let’s say $10,000 saying like it’s, you know it’s horrible, but everybody gets taken in because then you would see it would say, “Okay, over the last year, they’ve made 242%.  They’ve made a hundred thousand dollars on this size account.” then I went in and would look at the comments from the individuals, who are following let’s say this provider and there just left and right slamming the person if they caught it in that drawdown, but it’s kind of like I’m sort of thinking, “Wait a minute, the numbers were there for you; you already that that ratio could get very bad and very poor.”  Yet the moment things go wrong, it’s, you know like a complaining session about how awful this is, but I think it’s because a lot of people don’t pay attention to that, you know kind of which you have P:MD, you know, profit to maximum drawdown.  If you cannot handle the 0.5 like, you know, you were mentioning then you know you never should be trading that way.  And I think, for most people, they shouldn’t touch really a system like that, because as much as you think you could be brave in front of it, you’re not going to be brave in front of that.  It’s just once what you’re doing in real-time, you know, everything kind of gets thrown out the window.

Richard Weissman:  Right.  Yeah.  I remember reading somewhere that someone did a study and found that 62% of all people are optimists, and it’s a tricky thing, because trading is – it’s kind of – it’s a backwards profession.  Every other profession – confidence and optimism are seen as key, and trading is a balancing act.  Simultaneously, you have to have confidence in your ability to develop a positive expectancy model, but on any particular trade, on every single trade, you have to be a pessimist.  Every trade that you take, you have to think this is going to lose, and that’s what people don’t do.  They think, “Oh, well, you know I don’t need to be successful in the long run as long as I can make a million dollars on this next trade.”  But again, that next trade could be an absolute washout.  So, it could be that it’s a positive expectancy model, but you’re not able to stick around long enough to enjoy the fruits of all that research, because you’re betting it all on the first trade.

Mark Soberman:  Alright.  So, that brings us to the end of the podcast.  I appreciate you, guys, well having a lot of patience for us to get another issue, another version out at the podcast, but I actually think we touched on some really big issues here.  I’ve got to believe you walk away with something here, some kind of eye opener, some motivations, some enthusiasm, maybe a behavior that you’ll be able to correct.  You know, if you can walk away with one thing, I think that would be great from the time you spent with us here today.  Just to kind of reiterate a few URLs for you, a few links, netpicks.com/podcast, certainly to see if you want to listen to any of our past podcasts, they are there as well or download, there’s iTunes and premiertraderuniversity.com – definitely go there, check that out as well, see what’s the latest and the greatest from myself and from Brian.  So, again appreciate everybody being here.  As always, feel free to contact us, send us your questions.  If you have anything you’d like us to cover in the future podcast, we’d always love to hear from you.  And we’ll do our best to include that.  Brian, any closing comments for the folks.

Brian Short:  No.  It was good to get back at it again and look forward to the next one.

Mark Soberman:  Super, and this time we promise we won’t wait this long in between.  We’re not launching another university that much I know, anytime soon.  So, we’ll get to you, guys, with another podcast in trade training and talk to you all soon.

They also talk about the goals and expectations of making X number of dollars per day and you also hear an interview clip from our latest special guest, Richard Weissman who tells us to trade like a casino. Listen in and learn…

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Mark Soberman: All right. Welcome to the NetPicks Day Trading Authority podcast. This is Mark Soberman and I really appreciate you guys joining us today. I am a bit under the weather so I have no idea how my typical golden radio voice is gonna sound in this sickly condition, but the good news is I’m always joined by my partner Brian short who definitely has a voice made for a podcast. Brian, are you with me?

Brian short: Hi. I’m with you today Mark and if I remember right, the very first episode we did, I was the one that was not feeling well and it was very evident in my voice. I don’t know. I think you might be trying to draw up some excuses here. You’ve been playing hookey for trading or what. I mean, you don’t have to do that if you don’t really want to.

Mark Soberman: Well, you know, you sound so amazing when, you know, you brought your sickly self to the last few podcasts so I did get a little bit envious, a little bit jealous, and I just was like, “You know, what? I’m going that road. I’m gonna sell that crap too.” And, you know, hopefully these people will listen anyway, but, you know, I do apologize. Hopefully, this sounds okay and you guys can kind of hear what we’re trying to say. Contrary to what, you know, upon his accusations, I actually have been trading. You know, trading is a lot of those things. It’s kind of hard to have an excuse not to trade even when you’re sick, you know, how much effort does it take to sit at your, you know, your chair, and push a key or push your mouse button.

Now as for thinking clearly, that’s a whole another story, but the actual function of trading is not too difficult even when you’re sick. I don’t know if I’ll recommend it, but it’s really something that you can do. So as always, we definitely appreciate everybody joining us today.

There have been other podcasts but this is the first day trading authority podcast you’ve had a chance to listen to. Well, you’ve missed out, so you need to go back, and you need to go ahead, and listen to some of our prior — do you call them issues? I don’t know what you call them, prior podcasts? And you can do that through iTunes. That’s a great way to do it. In fact, you can subscribe in iTunes and whenever you download your favorite new music, well and behold, when we do one of these podcasts, it will magically appear on your iPhone or your iPod. Of course if you’re on Android or computer, then by all means you can go to our website at Netpicks.com which hopefully most of you know how it’s spelled with N-E-T-P-I-C-K-S.com/podcast, and no it’s not Netflix. That’s what my mom always likes to say. “Oh, you know, Marky works for Netflix.” It’s like, “No. It’s NetPicks.” So anyway, just to clarify that, so actually I probably have a lot more money if I did work for Netflix. Well, these days, things aren’t so cheaper for them either, but that’s a whole another story, and we don’t really talk too much about stocks here. We talk about day trading.

So what we’re gonna do a little bit is you see me and Brian try to talk a bit about some of our recent trading, any stories, things that we can cut of, you know, conveyed to you some recommendations, things that we’ve encountered, talk about what we kind of consider as a pertinent current event, and one of the things I want to talk about today a little bit was trading when traveling because that’s a question that we get a lot and it’s something that we have to also do quite a bit whether it’s for leisure or for professional and there’s definite things you can do to make that happen. When you’re a day trader, you’re kind of not gonna make money if you’re not in the markets, but how can you actually leave, you know, your cave once in awhile, it’s kind of important to do that.

Then we always have a popular section of the podcast that we call Tales from the Stupid, and that’s where — well usually Brian talks about dumb things he’s done in his trading over the last few weeks, and normally I’ll make something up because typically my section of this is the genius section. That’s usually what I have a lot to talk about and then Brian using — or I’d use when I run out of things to say in that section. I’ll let him — I’m sure encounter this in a moment, and then the last key piece — hold on, hold on, is we’re gonna have an interview of Chris from fxtradingreviews.com which I’m pretty excited about because Chris is gonna talk about forex, forex robots, the good stuff, the bad stuff, the hype, the fluff. you know, the crooks. So if you’re all interested in forex or day trading forex and this whole robot thing is up your alley, he’s gonna talk about it in a very frank, blunt and honest way. So Brian, do you have something to say?

Brian short: Well, you noticed for those listening how Mark just kept going and going and going there, not even giving me a chance to rebuttal. So I guess we’ll just have to compare —

Mark Soberman: So anyway —

Brian short: — stupid remarks today versus mine, so we’ll see.

Mark Soberman: Exactly. All right, yeah, we’ll have our usual competition in that area. So Brian, the first thing I did wanna cover a little bit is we always like to kind of start this off because we are actually amazingly real traders. We’re not just educators and we all just talk about trading, you know, that always kind of irritates some people who talk about trading, but I know fully well they actually don’t get involved in the markets because you know what, IT’S actually a lot easier to talk about trading hypothetically and like a professor than it is to actually get down and dirty. But the good news here is I trade every single day virtually and when I’m traveling — I’ll talk to you about it in a moment — how we trade on the road, but I think I mentioned before, and you know, it’s gonna change once a month or right now the markets that are most active in definitely are the metals which when I say metals, typically means gold, maybe silver, oil futures and this is mostly futures on the day trading side, the DAX futures, and the Russell, E-mini futures. That’s kind of where I’ve been for the most part and I know Brian when he talks about I’m sure will be something similar, maybe some differences overall.

So, we’re a day trader. I am a huge fan of futures trading. I am also trading on a daily basis, the forex but actually I mostly do swing trading in the forex at this point. I have gone through phases where I’ve done a lot of day trading in the forex, but I just get better results in the futures because I don’t have this fixed spreads. I don’t have to worry about the fact that there’s no centralized market. I don’t have to worry about my brokers freezing up when the markets are on the move which always seems to happen when you day trade.

So on forex, I’m a huge fan of swing trading. I’m not as solved lately on day trading, the forex, but if you are going to the euro-U.S. dollar and the euro-yen, are pretty good choices for trade trading forex, and maybe the pound-U.S. coming up after that. But when I swing trade in forex, gosh, I open up the whole world of markets. You know, I could do the pound, CAD, the euro-Aussie, the euro-CAD, the Aussie-yen — stuff I would never consider day trading. So that’s really why I like that.

The other thing I wanna mention, in my personal experience since the first of the year, it’s my DAX futures which if you don’t know what a DAX is, it’s the German stock market and there’s something called the DAX, D-A-X. You can also trade something — it trades on the Eurex by the way, Eurex.com. It’s, you know, it’s not the right market for small-time traders. For small accounts, it’s 25 euro dollars per point. It moves fast. You know, you don’t trade this market with five grand. You got to start with a little bigger account. But if I had to choose between the DAX and the Russell E-mini, which I normally trade the same time, these days I would definitely trade the DAX.

I mean, in my personal trading I’ve probably been winning about 75 percent of the time on the DAX which is really solid, gives you really nice return. And the Russell, I’ve been closer to that 60 percent, you know, 62 percent, so it could be temporary, maybe something is gonna change, but that’s what I’ve been seeing. And then if you were to pin me down on gold versus silver, I would probably say if you maybe pick one, I personally would pick gold. I like the slippage better and the movement in my opinion has kind of returned after a bit of a lull. So, you know, that’s kind of what I’ve been involved in. You know, Brian kind of, you know, maybe the same thing. You know, let the people know kind of, you know, where the action is at for you.

Brian short: Yeah, very similar story, and Mark, you know, you and I trade together in the mornings which is surely beneficial to have a partner. We get on — go to meeting and, you know, bantering back and forth. So I trade a lot of the same markets that Mark does. My specific focus —

Mark Soberman: Well, let’s just say I’m getting — let’s just say, we’re not sharing like bagel halves or anything. Okay we are —

Brian short: We’re not doing together –

Mark Soberman: — trading together, but we’re not together. We’re physically in different locations, exactly.

Brian short: Exactly.

Mark Soberman: Exactly. He’s no harm, in Texas. All right, so I just want to, you know, clarify for the events.

Brian short: All right, very good. So again, my favorites are futures again, like Mark, specifically trading gold and silver. We start that around 8:00 a.m., Eastern Standard Time, and trade for a couple of hours on those markets. Like Mark mentioned, if I have to leave towards one of the metals or the other, I think gold is probably for that newer trader, maybe a market that you might want to consider. Silver has — it’s a great market to trade, but it doesn’t have the same liquidity. There aren’t as many contracts on each side, so you got to be a little careful there. Slippage becomes an issue and you got to have that built into your trade plan. So just some things to be aware up there. And then also trade the Russell. Big fan of the Russell and we trade that for an hour and a half in the morning, part of the markets and have had some really, really good success with that market.

Now volatility finally has kind of woken up just yesterday and our good friend, Fed Chairman Bernanke, you know, spewed his speak to the markets yesterday and both the silver market and the gold markets were just crazy. In fact, on the call yesterday, I was just like, I was bursting out with what was going on here because the markets were just flying and it was a good time to participate in some of those moves. So activity has definitely picked up and it’s a good time if you have a strategy that gives you an edge to engage the markets because, you know, that activity is picking up again. So Mark, those are a few of the things I do in my everyday trading.

Mark Soberman: Yeah, one little tip that I’ll give because you talked about like the market has gone a little crazy after news which has been what we’ve been seeing or something like that. Two minutes is kind of like the golden number I found in day trading if you can — when your charts go nuts, you’ll know. You can wait about two full minutes and then reassess. That’s the time typically when you can get in. Actually you get some really nice additional trades, be very careful when that news announcement comes out. Those first two minutes, it’s very hard to execute. It almost goes too quickly. I don’t care what trading system you’re using. I can’t even think fast enough to keep up with all the bars, so just a little suggestion as we — if we see the volatility pick up and stay may just be a little, you know, aberration for a day or two, but that’s really served us very well in the past. You know, I’m not starting right out of the straight hour like, you know, when Brian mentioned here, it started 10 Eastern, it’s actually more like 10:02, you know, if we’re doing the markets there. We’re just trying to weigh those things on a little bit.

So, yeah, great that’s all good information, so, you know, something that comes up a lot is, you know, you guys day trade and, you know, I like to travel or I travel for work, you know, how can I trade when I travel. So I’ve got some little tips for you. This will not be some long winded topic, but this is something that I’ve been doing for probably as long as a lot of people have, you know, this one we started NetPicks back in 1996. I mean it was dial-up modem. So that’s literally how you access the internet if you are even on the internet and actually originally, we did everything via fax, so you can only imagine how things were back in the early days.

So going — things are now, is amazing, you know, so whenever I think to complain for a moment about technology or something going down, I remind myself of what it was like back in 1998 and I’m like, “Okay, yeah.” We’re really lucky to be living, you know, and here we are at least when it comes to these things, but I prefer swing trading to day trading. If I’m gonna travel, it’s definitely more challenging to maintain your day trading on the road. I do think it is possible. The thing that’s worked for me has been when I travel with, let’s say a laptop or an iPad and we’ll talk about that in a moment. I do much better when I don’t try to stuff my laptop and of course can’t even do this on like an iPad or a tablet with let’s say Trade Station and My Broker and my, you know, all those kind of things. I much prefer to just count on my internet connection through — to go MyPC or LogMeIn or to zoom in something called that I’ve never used but a lot of people swear by, it’s called SplashTop, splashtop.com. And most of these are for Android, you know, for iPhone, iPad or whatever, and you can access your home computer whether to Mac or Windows-based. It doesn’t matter.

I personally find — rely on the power of the system in your home or office and not, you know, use your local for trading too many things go wrong. Of course, you are counting on your internet staying constant with your iPad or your notebook, but I personally have had much better success in doing that and try to replicate everything on my laptop. So for me, go to MyPC, LogMeIn or Splashtop would be what I would highly recommend. And then you have to have of course a way to get to the home trading computer or your office trading computer, and of course, you know, you can use an iPad. The problem with an iPad is even when it has mouse control, it’s very hard to day trade without a mouse. You know, the touch screen is slightly being — it just doesn’t cut it. You can be fine in swing trading, but I think if you’re gonna day trade, you really have to have a laptop.

So a laptop with one of those applications can work very well. Just kind of bear in mind a few things. I personally like the MacBook Air, but I tie it directly back into my Windows computer back at my home office, so I just like because of the size, the durability, the fact that it always works. It comes up quickly, but you have to have a stable internet connection.

So a lot of people count on their hotel having like a great Wi-Fi or a great internet and sometimes it’s good, but you’re sharing that with dozens or hundreds of people and it can definitely have problems, so I always recommend it if you’re gonna trade from the road, just make sure that you have a hotspot. You know, get one of those Verizon Wi-Fi’s. Get one from AT&T or whomever, have it beamed on external. A lot of times, you get 4G these days which is awesome. You can even with your Android phone or your iPhone, you could turn those typically into a hotspot and that could work well as, you know, as well. I kind of like to have a separate one and kind of keep the phone separate. I always worry about battery and that sort of thing. You cannot go wrong with, you know, a separate external modem, but I realize it’s an additional expense, but you know, 50 bucks a month, if you travel a lot it’s definitely well worth it. And there’s other cards available out there as well and you might be listening and, you know, you’re up and elsewhere and they have different options available to you, but to me, a laptop, go to MyPC, LogMeIn, Splashtop, a good modem can actually — can definitely do it. I’d probably steer you towards swing trading, but you know, if you’re gonna be gone for awhile and you can day trade, you know, it’s definitely possible. Just to kind of realize it’s not gonna be nowhere, you know, near replicating the environment when in your home or office, so be careful, you know, overall. So, I don’t know, Brian anything to add to that?

Brian short: That’s all really, really good information Mark, and I reiterate what you said already. The only thing I’ll add is that if you are away and you’re on vacation, take a vacation. Don’t feel like you have to trade. I know that it’s a temptation, but take a break from it. The worst thing you could do is try to trade remotely especially during active inter-day trading, and what if you have a bad day? They happen. Right? It’s gonna ruin the rest of your day on your vacation.

So my point there is, you know, take a break away. We did a break away from whatever our jobs are whether it’s trading or any other job that you might be involved in. So just, you know, take that time away. Take a break and the markets will be there when you get back.

Mark Soberman: Yeah, it’s a good point and I for a number of years, I would travel and I would wake up early ahead of the family and I would, you know, go out to the, you know, little kitchen area or the desk or wherever we where, fire up the laptop, and I would trade, and, you know, obviously if things went well, you know, I mean for uplifting day, but you know, when it didn’t, you would obsess over a little bit and, you know, and it’s possible you make an extra mistake, you would have made it home, and like Brian mentioned, you don’t wanna come if, you know, ruin the application because the ideas to come back from that fresh and rejuvenated. So, you know, it’s kind of hard when you’re day trading. We’re all a little crazy. You’re gonna think about it on vacation, but, you know, certainly at some point you got to just shut it down, and turn it off and move away. You know, if you can at least for a period of time.

So anyway, that’s kind of our recommendations, you know, on trading when traveling. It’s one of — maybe the downsides to being a day trader, you only make money when you’re in the markets and active. You may just need to realize that when you’re figuring out your profits, you can’t multiply it by 52. You know, if you’re like, ‘Hey, I average this per week because nobody can maintain those 52 weeks in a year, and, you know, things are gonna come up along the way. All right. So now let’s go ahead and move on to a section that we call Tales From the Stupid.

All right, so you kind of heard the little audio there and this is a section that we do call, Tales from the Stupid” For those of you from there with that TV show, “Tales from the Crypt” from a number of years back. It’s kind of where we got this from. It’s our own personal trading nightmares, the things that we’ve done over the last, you know, since the last podcast that, you know, really was just kind of stupid, and we kind of wanna pass that along to you, not our stupidness, but actually hoping the things that we’ve done, we can kind of share our experiences with you, because trading is all about experience. You can’t really learn in the book. You got to learn it through experience. And so for me, the one that stands out the most is being premature ,right? There’s never anything good about being premature, but what I’m referring to here is stopping too early in a trade series. And what I mean by this is, you know, we mentioned earlier how we may be trading, you know, the metals, and then we’re trading some crude, and then we move into the DAX or the Russell, and, you know, we’re having a good day.

There is a really high temptation to prematurely stop because we booked a really good profit, but we really haven’t finished our trade plan. We’re like, well we stopped another trade to go on a Russell, another trade to go on a DAX. You know, we know the odds are on our favor that that trade will work, but it’s not guaranteed. So unfortunately, what happens is you start to look at your profit and you to start to like, “Hey, what happens if I lose the next two trade on each one? Holy crap. My profit could end up being lost and boy, that would kind of ruin my day.”

So I’ve noticed something that we haven’t even done recently. I haven’t even done is I’ve exited or stopped and then I’ve checked later in the day and like, “Oh man, I see those two trades would have worked if I would have just finished the plan.” So I think there’s a place for quitting early. I think Fridays are sometimes a good time when you’ve got a good game, maybe not to finish your full plan because, you know, it’s hard to go into the weekend with a loss especially when you’re up a lot and then you blew it in the last few trades. I have no problem with that because psychologically, that matters. I mean intellectually, it’s actually smarter to keep going. But I get the whole psychological thing. It’s like when you — you know, you hear financial people talk about paying off a house. They might be like, “Well, geez, your mortgage interest rate.” You can make more money in your investments but there’s something psychological by just having it done no matter how low the interest is. It’s the same thing, you know, with trading. So that’s something that I think, you know, is something that I’ve done that I got to get away from. Because the reverse is when it’s a bad day, we go to the distance. I mean we’re gonna keep going and going and going finishing the plan because we’re trying to recover. So you don’t wanna cut yourself short. Don’t be premature. Try to finish the plan, resist the urge to stop because you just wanna feel good about your profits. So Brian, that’s mine and how about for you?

Brian short: Yes, mine comes hot off the press from today’s trading session. Mark as you can attest, and I guess what I would say is focus, focus, focus. And that’s something that’s easier said than done. Your goal as a trader is to take what is on the chart and execute that in your trading account. And you just have to remain focused on the trade set ups and your trade plan a hundred percent of the time. If you simply move away from that focus for a split second, it can literally cost you profits. And so my story from today is this. I have traded thousands of times and placed thousands of trades through the interface that we use. And for whatever reason today, I didn’t have my domes set properly. And I went to place the trade and it went into the wrong price. I went to adjust that trade and in that adjustment, I ended up getting in twice the position size that I wanted to. Well, needless to say, it was a downhill spiral from there. And by the time I corrected that issue, it basically cost me the profit of one full winning trade which is pretty substantial.

And so point there that I want to make is you got to be diligent in maintaining that focus throughout the session. You know, one of the things we talk about here at NetPicks is trying to, you know, trade us a time frame for a certain period of time, a couple of hours, and that seems like a very small amount of time, but really, that’s a long time to sit there in front of your chart, staring at that chart and remaining diligent and focused. So I guess I would say, “Don’t let distractions get in the way.” And I’m talking about split-second distractions. That’s all it was for me. The market actually had picked up and I had to make a very quick decision and, you know, one straight click today cost me pretty big. And so again that’s my tale from the crypt or stupid, as we’d like to call it.

Mark Soberman: Well, the good part of the story was, you actually invented new profanity that actually I had never heard before. I actually had to Google some of the words that you use while that was happening, and I can tell you right now, some of those words don’t even exist. So, you know, if there’s any upside, there’s that. Yes.

Brian short: So there you go. New words were created.

Mark Soberman: So maybe that’s your genius for the day, but hopefully not. So, let’s kind of move into our next section, which is our genius because we already confessed our stupidity, so let’s off set this a little bit.

All right, so for me something that I do, we’re in the education business. We train traders. We work with traders. We develop systems. We’ve been doing this for 17 years now. The one thing that sometimes happens is we’ll go ahead and tweak or update or change a system, and without fail we’ll get some complaints from people because they’re like how can you change your system? That means it doesn’t work or it’s not effective if you’re changing it.

And it kind of always drives me crazy because I’m like, “There’s no market that’s ever gonna stay static for us. If we’re stubborn and we don’t ever want to adjust or tweak or update our system, we’re not going to maintain our performance. I mean, it’s just one of those things that whatever we did a few years ago is not guaranteed to work in today’s environment, so I kind of consider if I’m gonna say, the genius is don’t be inflexible that way. Don’t be stubborn. Don’t feel it’s actually a positive that you never update and change your trading system. Because if you don’t, my guess is, you probably do not have good or consistent results. And I’m somebody who’s kind of obsessed in a way with always trying to fine-tune. I never rest on the laurels of what I’m doing because I don’t trade a hundred percent profitable. I have a definite cut of losing trades. Situations come up day to day. New things I’ve never seen. So I’m the kind of person who’s always looking to discover and explore, and I would say for a trader to be successful, you really have to be that way or you’re gonna have to work with whether it’s people like NetPicks like us or somebody else that’s gonna do that for you.

So if you’re not stubborn and you tweak and you test, it’s not a sign of weakness. It’s actually a sign of strength, but there is of course a limit where you can overdo that. You don’t wanna be testing and back testing every single day and changing all your parameters everyday, but there is a time and place to make moves and just not to feel like it’s a sign of weakness when you trade. So for me, Brian that’s, you know, what stands out, and it’s something I’ve been working on a lot in our current systems and it’s really been making a difference, so I’ll pass on to you.

Brian short: All right, thanks Mark. My genius is, well first of all, let me give you a little background. I come from the computer background. I own a computer consulting firm for many years, for 20 years. And one of the things we did in that capacity, in that business was contingency planning. And so that’s my genius for today. And one of the things that I always recommend traders have is the ability to manage their trades if something happens to their primary connection. So that happened to me today in a session. In fact Mark, you had stepped aside for a little bit, and I didn’t even tell you this. My internet went down for 60 seconds roughly, and I had to then switch my internet over. It’s a simple move of my CAT-5 cable to another internet provider and it was up within 20 seconds. And I think that’s important because the last thing you wanna do as a trader is lose control of your trade when you’re in it.

And so along with that, let me say two. We always recommend that you place OCO orders when you’re trading. Never be in the market without a target and a stop, because if you lose control like it happened to me today and you can’t reconnect very quickly. Then at least that trade cannot get any worse than those parameters that you set. And so — and then also I would recommend, you know, I’ve never had to do this, but having a broker on speed dial. Be ready in case we need to take that manual action to call your broker and affect your trade that you have that capability also. So that’s my genius for today. Contingency plan, make sure you have the ability to connect to the internet if your primary internet connection goes down.

Mark Soberman: You know, it’s almost like you should trade like a pit crew, like a NASCAR pit crew and consider actually timing yourself from the time that that internet goes down, you know, do you actually know the steps you have to take to bring up another internet whether it’s, you know, that external card that I was talking about — that’s a great thing about trading when traveling. If you have that card — that’s one of my main backups Brian’s got, you know, cable modem and it’s got DSL. I rely on two different cell Wi-Fi connections as well as of course, you know, cable modem so I feel I have backups, but I had something to think through. How long would it take me to get this thing up and running, and geez, my computer even connect with a wireless. What if doesn’t have a wireless card? It seems kind of dumb, but it’s amazing until it happens and you’re panicking.

You need to be able to do that, I would say, you know, 60 seconds, 90 seconds make that change because, you know, these markets are just not gonna wait for us. That’s for sure. They could care less. They’re just gonna take our money, you know, whether we’re having problems or not, and your broker is certainly, he’s not gonna go ahead and refund those losses because you had a technical problem, you know, including if they have a problem as well. So, definitely really have good points on that.

So Brian, this is kind of a portion of the podcast. We’re moving to our interview and over the last several podcast, we’ve been interviewing some authors, bestselling authors of various trading books which has been great, but we want to bring on a little different guest this time, and we have Chris from fxtradingreviews.com which is, fxtradingreviews.com, which is FX, trading, reviews with an “s” on the end, dot com. Uh, and Chris is really the publisher, the writer, the person behind this website. We have so many people who are interested in trading forex, maybe day trading or swing trading forex. You hear about all this robots. A lot of people maybe have used robots. We really want to bring Chris on and talk to him about what a lot of us have been, you know, hearing about talking about, et cetera, and kind of talking to us about, you know, the pros and the cons of this whole side of the business. So with that, Chris, are you with us?

Chris: I am here. Thanks for having me.

Mark Soberman: Great. So Chris, what I wanted to do is sort of just ask you a few questions and, you know, what maybe the first thing is tell us a little bit about what FX Trading Reviews does and what’s the whole purpose of your website.

Chris: Great. Yeah, thank you. As you said, FX Trading Reviews is the site and really what we’re geared for is providing a platform to give an unbiased insight to various forex trading systems. As, you know, forex is a great product to trade, and you know, whenever there’s a great product and a great way to make money, unfortunately that also can lead to a variety of different scams and fake products out there. So what I try to do with this site is really provide an unbiased view where customers, our readers can get this feedback. Both my feedback as well as even users commenting on, you know, what are the legitimate systems? What are the platforms that are gonna provide results for them and if they’re gonna make an investment not only in buying the product but also their own money, then they really want to do that research and that’s really the platform we’re trying to provide.

Mark Soberman: Yeah. I think for me, one of the coolest thing about the website is who you run these live demo counts, and it even goes further, and you actually put your money into accounts and run these systems then you report back in real-time the trade results. I mean, for me that’s really cool. It’s not something that you guys try to do as much as you can.

Chris: Yeah, it really is and, you know, it’s really been something. It has been as you said, very popular with our customers because rather than, you know, just having somebody write and write and write about a product, and again you never know, you know, where their bias may be by actually running through live demos or even putting our own money into products the client is able to see for themselves exactly how those different platforms are performing. So we do have both, you know, packages that are running in demo and, you know, that just means, you know, it’s not our real money but it’s executing those trades. And then what we do is we really try to look closely at, you know, which of those robots from demo are worthy of putting our own money into. And that’s when we move it to our live money, and you can see we’ve got a variety that are trading our live money, and you know, the results are right there. You know, it’s pulling those in real time — so no fudging the results. They’re definitely real.

Mark Soberman: Yeah, I’m curious. You know, what do you as far as like when you test all these systems. I have a feeling that a lot of them don’t play out for the marketing. I mean, maybe just as a guest. Do you have any idea like how many — what percentage tend to have a chance to be successful which versus like how many tend to fail?

Chris: I would say your hunch is absolutely right. Unfortunately, as I alluded to my opening comments, this industry is ripe with scams, and you know, everyday, you know, I’m on a lot of mailing lists, and you know, targeted by a lot of these different new robots and forex products, and everyday we’ll see a new one come across our desk, and, you know, we do our best to investigate some and do our research, run them in demo. But the claims definitely outweigh the actual results, and, you know, that’s really something that we try to provide for our customers is, you know, really help steer them through the clutter and point them to the ones that are legitimate.

On a percentage basis, you know, I would have to say even if you were to just go to our site and look at our results, you know, less than half of the robots that we’re given been running in demo are seeing positive results, and that’s after we’ve already gone through and wiped away some other ones that aren’t even worthy of being in demo.

Mark Soberman: Yeah, that’s what I figured. So give to the people listening, maybe some tips on, you know, how they can on their own — I mean, obviously I kind of always think of FX Trading Reviews, it’s like the consumer reports of this business, but what are some things they can do? Red flags at UC, let’s say and the marketing, the hype, the fluff to look out for, or vice versa, you know, what are the things that legitimize and make you’re more of a believer at least upfront before you start testing?

Chris: I would say, you know, nowadays with great sites like Myfxbook that really allow you to track and see real-time results publicly, you know, that has definitely become a separator for me, the legitimate versus the not so legitimate robots. The guys that are actually able to, you know, stand behind their work, feel comfortable in showing you their results, you know — all of us know they’re gonna be draw downs and there’s gonna be periods where it’s not performing in a peak. And the guys that are really, you know, have that confidence to stand behind their work, they’re gonna put right on their sales page a link to something like Myfxbook where you yourself can track and see the results, and, you know, the ones that don’t show any results immediately, I’m gonna, you know, have a leery eye towards. But even the ones that may try to trick you, and, by that I mean it may look like it’s real account, but really they’re screenshots, and so you can’t drill in, and go actually view those reports. They’re just showing you a screenshot. You have no idea what that screenshot is really showing you.

So the ones that show us real-time results are definitely the ones that I’m most in favor of and really have a lot of credibility to the products.

Mark Soberman: Yeah. You were showing me some of those sites where it was shocking almost where they’ll go ahead and take like Myfxbooks screenshots and it’s dummied up and it’s static, and it looks amazing. I mean, these people put so much time and effort, but it’s just time and effort into the fraud.

So I mean it’s a great point. Make sure you’re linking into a real live, you’re going off to a third party site that you can verify, and you know, that that’s really like — I guess another thing would be, you know, if you’re going and you do buy something, I’m sure you would typically recommend what they start in demo mode or, you know, jump right into live money or, you know, hush somebody, you know, start up a robot if they think that they, you know, at least check your site out, and want to start with something.

Chris: Yeah, any time frankly that, you know, you’re buying a new system, I would highly recommend running it in a demo period where you can really, you know, get used to the system, see the results, see the products that are being traded and get comfortable with those results, and we’ve even recommended, you know, as a conservative player to run it for 30 days. You know, it’s gonna be real money once you flip that switch, so make sure it gets those result that you wanna see, and that really points back to when you’re looking at the various robots. You know, make sure these guys have their money back guarantee because, yeah, the last thing you want is to buy something that you may have gotten lured in by a sleek sales page like you said with, you know, they’re putting a lot time and money into this because they want to take your money. But the last thing you want is, you know, you make that investment and you turn around, and the product doesn’t work and you’re stuck with that investment.

Mark Soberman: Yeah that’s a good point. I think the good news is always going to your site. I see that some do work most time, but at least, you know, it’s reassuring to know that there are some that work and at your site, I just want people to know since we kind of wrap up this interview here. You have a giveaway, right, if they go to FX Trading Reviews?

Chris: We do. Yeah, we put together a guideline last year, the end of last year that really we wanted to do a couple of things, accomplish a lot of things. One was publish a guide that’s really going to give you end-to-end tips. And this is for the basic, the beginner I would say forex trader that may not have a lot of experience in this market, and offer tips on how to get started, you know, ways, good ways to make money, but also even the experienced trader. There’s some great tips in here, and, you know, real deep insights. So the guy includes that, but one thing that we included and this is, well, is we did a real deep analysis across many other sites — of course, I’m biased. I believe FX Trading Reviews offers the best quality reviews, but there are also a number of different sites out there and we really wanted to see how are robots running at some of these other sites, so what we did is we did a deep analysis across a variety of different sites and try to see what robots were running at these sites to kind of measure popularity and then what results they were getting And that allowed us to create our own proprietary score to really rate these robots not on just our own demo but also looking across a multitude of sites. And that is included as part of that guide as well. So when you go to fxtradingreviews.com, you’ll immediately be offered a chance to receive and it’s free. You know, we don’t charge for this as well as any other content on the site.

Mark Soberman: Yeah, it’s really cool, it just costs us an email and it’s certainly well worth like you also said there’s so much great information on the site. So people should definitely do that if you have interests in forex or the whole robot EA world, FX Trading Reviews will be a great place to go. So Chris, I appreciate you joining us today and you had given us all this great information.

Chris: Very good. It was great to be here. Thank you.

Mark Soberman: Okay, great. That was an awesome interview with Chris at FX Trading Reviews. Take advantage of his offer there as well if you’re interested in forex. It’s been a really good podcast. I think we’ve covered a lot of cool information. If you’re interested in our next author interview, you can also go to netpicks.com/interview, all lower case, and you can sign up for that where we usually have one every month, every other month, and also you can just go to netpicks.com, N-E-T-P-I-C-K-S.com, and there’s always some great information there like we mentioned before. A lot of it is available too and free as well. Just put in your email and we’ve got some great tips for you. So Brian, I really appreciate it. Thanks for joining me in this podcast and we’ll shortly report to the next one.