13 Trading Lessons with 3 Top Students

13 Trading Lessons with 3 Top Students

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- We are here, I think, how many months ago did we do a little podcast or Zoom call with the three of us? - Was it two months ago? Was it October? - Two or three. - Literally I have no concept of time anymore. I am so overwhelmed by 2020.

I literally have no idea but, how's life Grittani? - Oh, it's been good, it's been good. We're just keeping to ourselves relaxed and... - Both you and I got a hair cut, I think it's important to mention we're getting ready for the new year. It's a new us.

Matt Monaco is stuck in the past as always. - I got a new hair, I got.. - Show your hair Matt. Show your hair, show the lack of hair cut, ooh.

- I got a haircut two, three weeks ago and I don't it that much. So I'll get a new one probably the first week of January. - To be fair, you've been busy, what is it? Is this your first six figure month or second six figure month? - November was my first but this one I'm pretty close to double it almost multi-six figures now, yeah. - You're at nearly 200,000 for the month? - Yeah, just shy of it, a couple of thousand shy. (Timothy claps hands) It's very nice.

- You gotta go opposite way with it and not get a haircut till your next red week or red month or something. Just keep (indistinct) hair now. - That makes sense. - I was doing better before I got this haircut. I've been off my game ever since.

And now I have a laptop with missing keys. I'm afraid to get rid of it now but I had to shut it down twice during the training today the quotes just stopped working and that was dangerous when I was training- - Was that when you were buying every single OTC I was short today on dips? - Possible. - But like, come on Tim (chuckles). - I really didn't buy, I've been traveling for two days so I've been a little off my game, but I know ALPP, ABML, I felt guilty missing yesterday and CYDY, the freaking perfect.

Did you nail it yesterday Grittani? - I didn't nail it. I actually thought it was gonna hold up so I walked away from my computer and checked my phone five minutes later and I was red. And so I shorted it bounced and I got it at 580 and covered it this morning.

- Nice. - But you said you had a record day or record week I didn't even ask you, I'm sorry, I should have asked you the details. - Yes, so that was last week actually. Most of it was one position. The day that Bitcoin broke 20K finally, that morning pre-market I'm like, "Okay I've gotta find a Bitcoin stock to buy." - NXT-ID? - That was the one, yeah.

- Hey! - Well, yeah, so I didn't want MARA or RIOT 'cause both of those have huge market caps and they've been running for the past like what, two three months at this point? And it seems like every time they have some kind of daily breakout, it's like daily breakout and then gap down, daily breakout and gap down. Only recently does it seem like we're trying to get some real day to day volatility with them. So I was like, "okay, let's look for something cheaper."

And NXTD was one that we've seen run with Bitcoin before and only 35 million shares outstanding. It was under a dollar when I saw it and it was on pace for some pretty sick volumes. So all that plus Bitcoin, I kind of was of the assumption that as soon as Bitcoin broke 20K it was gonna get to 25, 30K relatively quickly. So I was thinking like, "Okay, I'll just buy this cheap one and maybe swing for a few days and see what happens."

And so I just accumulated it throughout the day. I started with 100K shares, fairly near the market open just about 10K risk on. And then as it kept strengthening and going in my favor throughout the day, I just kept adding dips, adding dips. It had this afternoon breakout where it broke the intraday high and the multi-day level was like within a few tenths of a cent so I added on that too. And so by the end of the day- - I remember 'cause Hardy and Rollin we're also in chat and they were going along at 86 cents. - Yeah, so by the end of the day, I had 350,000 shares with an 81 cent average.

And I didn't take off my first piece till 170 the next day, but I completely missed the 210 top. I kinda thought it was gonna keep on going into the next day. So mid day, it topped out at 210, it kind of weakened, and Bitcoin was starting to get weak so I started to panic a little bit. I don't know it's gonna just fall apart now.

So I sold some more in the 170s, and I still had a piece that I was gonna take overnight, but it closed really weak and then it was gaping down. So I just sold it all or maybe it only started to gap down briefly and then it was gaping up, but I sold it into the after hours balance and that's where I got flat. And so that trade was about 311,000, I wanna say, and- - (claps) Oh, claps all around. - Thank you.

But that was also the same day that BITW completely collapsed that OTC Bitcoin thing that went to 200. - I was dip buying it. I dip bought it in the 80s, it was scary. - I got short 1,000 shares, almost dead top and- (indistinct muttering) I covered half of it really, really early. But I still made 81 or 82K on it, I think. - Yeah. - And, I'm not too proud of this, but after hours I cover up...

or I sell the rest of my NXTD, and I'm I'm adding up my profit for the day and I'm like, "That's 393,000, I'm so close to a 400K day." So I had this one other position that was meant to be a longer-term short and I just covered it, just it's I hit a 400K day. (all chuckles) - So you still give into the whole little milestone thing even though, you know, I know everyone knows you shouldn't be given to it, you can't help it. - I felt guilty about it, but at the same time, I was "I don't know when I'll ever be in this position again so I might as well just do it."

- I mean, that's a fantastic day. It's funny that you were shorting BITW I was dip buying it. Jack, I think made 37,000 dip buying it.

I only have like 1200 shares, it was scary it was tough to get an execution. - It's funny, these OTC panics, pretty much all of them I've seen in the past few weeks. I feel like I'm losing my field for them a little bit.

I keep expecting all these fake turns and instead they're just bottoming and bouncing way earlier than I think they will. And it's actually really frustrating 'cause most of the time I'm Stuart and then I'm stuck holding through a bounce and I'm just like, "Come on." - Yeah, we haven't seen like the clean, panics and in like 20, 30% bounces, they've been a little choppier. I mean, a few weeks ago we saw perfect panic after panic and bounce after bounce on TSMP were you trading that? - No, I didn't trade TSMP. - Okay, that was beautiful. And then Matt was doing well on that one, right? - TSMP? Yeah, that was pretty good.

I traded it through that when I was going off for the first time on the front side. And then afterwards it got choppy, so. - Look at you Jack, the golden boy! - Came in.

- What's going on? - No, look at his new chain, check out his new chain. Ooh, diamond! (Jack chuckles) - It's a diamond chain? - I posted the video of surprising him literally today. I went up to New Hampshire and surprised him.

- Cool, very awesome. - And we kind of broke into his apartment. It was because his girlfriend let us in so, it was good. - Yeah, I had just given her the key to my apartment and the first thing she does is let Sykes and with all the outs. - That's a good lesson, man be careful, be careful.

Come on, first thing she did (chuckles). - Yeah, first, (indistinct) like a week ago. - Did you make a copy for her? - She's amazing too.

She just crossed 100,000 too. So we have finally an upcoming female trader. - No, I think she's up like 80 something on the month now. - Wow.

- She's gonna be like your sugar mama? - I don't know she's almost doubled their profits in the last few weeks so have I, which is insane. - You're up 700,000 on the month. Let's put this in perspective with people you missed Tim Grittani explaining his fricking $400,000 day which is awesome.

Just a little perspective reminder, these are literally the best penny stock traders that I know. Most traders lose. So I don't want everyone thinking like, "Oh I'm making 400K today, I'm making 700 K a month."

Most traders lose, they go to zero. We have found rules that have kept us disciplined and these guys, I mean, I'm not even that profitable I'm up like 130,000 this month. But these guys have learned to really scale just each one of you what's giving you the confidence in December, 2020 to really scale in? And Grittani I know you're kind of coming out of a multi-week or multi-month retirement. What gave you the confidence to get back in? - Well, I mean that NXTD play was really just recognizing one very special situations setting up. Time and experience really and having seen squeezers like that before when a sector gets hot, all of a sudden, I was very active when Bitcoin went crazy. What was it like four years ago when it was like that November, December I went to 20K the first time.

So yeah, I was just kind of recognizing that but otherwise it's just kind of same old same old, like the short in the BITW that's basically an OTG short I've done a thousand times. So yeah, scaling up into this stuff over time it just comes with experience comes with consistency, comes with proving to yourself that you can handle it. - Do you think new traders should scale up immediately, or how long should they wait? - I don't know how long they should wait but definitely not immediately. It took me a while to get comfortable with it for sure. I don't think I even started scaling until probably a year in. - And can you tell people what your early trades were? How much do you make or lose in the first year on your trades? - Yeah $20 profit- - When you had a training and closure? - $50 loss, stuff like that.

- And you look back at that, and that starting small gave you the confidence to try it then you did more trades, then you got to have the confidence to take bigger positions. And now I feel like it's kind of riding a bike for you. - Yeah, and it's funny looking back on it and thinking like, "Okay, I was in a trade where I was down $50, I was shaking."

I was literally that amped up over it. It's just really funny how things change. - And how do you, like you said, you had... What'd you have, 100,000 chairs? And you said you had a 10K risk so just explain that for a second. So you were risking losing $10,000 now? - Right, yeah, that's what I want my typical loss to be. And so whenever I enter a position, the first thing I'm really doing is figuring out what is my cut point on the chart? And then the second thing is okay, what's the price I'm entering at? And then I just do the mental math of how many shares can I take so that if I cut at this chart point, I don't lose more than $10,000? And that's the process, every single trade it's a risk versus mentality.

- You still turn off the column on your profit and loss and you're just looking at the chart completely? - Yeah, yeah I still have unrealized off of my screen. I haven't looked at that in a long time. - Crazy, well, what about you, Matt? - Well, the realized, unrealized I have an unrealized hidden, but the realized I usually keep up once I exit a trade. - I mean, you have three couches now couches aren't cheap, so you gotta pay.

Someone's gotta pay for the couches, right? - I moved apartments, I sold one and I gotta get rid of another one. - Listen, no excuses, you your couches we all like different stuff. Grittani likes snoopy shirts, Jack likes chains, I like sushi and you like couches? We all have our things, so whatever works. - Maybe couch for. - Out of all of us, well, Grittani in his snoopy shirts I think they're like five bucks each.

So he can probably buy like three. Look he has his snoopy shirt on that's crazy, I didn't even see that. Did you put that on for this or did you have it on? - I put it on for this (chuckles). - Hey, that's awesome. Sorry to interrupt, Matt.

What gave you the competence to really scale the past two months or really the past month? - Yeah, so my journey, 2020 is basically my glow up year. All my profits have come from this year. So I kind of peeked in like June, July timeframe and then the market cooled off.

I scaled it back a little bit and then going into September, October, November the market definitely started to heat up again, and having just the experience of trading well during a hot market, I've seen my fair share of hot markets. I remember when Bitcoin ran the first time, I wasn't a profitable trader. And then being able to trade a hot market well, I recognize the signs of it just heating up and slowly started sizing up in October, and then throughout November, I started just getting the confidence and I started trading low again, and plays were running, plays were working. I'm mostly a long bias trader so breakout started running again. Yeah, which wasn't a thing and kind of August timeframe, they disappeared. And then December, I talked with Jack pretty much every day and a bunch of traders every day and I was like, "This is the month."

December everything's started coming together. And if there's a time to be focused, it's this month because just all the factors of 2020 are all just kind of coming together and the market's hot. So you gotta come in every single day prepared. And if you're not, you're definitely gonna miss. There's a ton of opportunities.

If you miss one trade, there will be another but you just need to be ready and focused. And that's kind of been my mentality this month. - So you only couch shopping on the weekends, not during weekdays? - On the weekends and at night when the market's closed. So, you know.

- Ooh, online shopping, that's dangerous. Be careful, man, that's a slippery slope. Jack, what gave you the confidence to really... You've just nearly doubled your entire already an amazing year in one month while having strep throat and mono. Are you feeling better by the way? - Yeah, I'm feeling better.

Still get a little stuffed up in the morning and still a little tired maybe it's just from the weather in the motto a little bit, but feeling much better. - Well, also your chain is heavier. So I should have told you, you're gonna lean over, you're gonna hunch over, 'cause you got diamonds now that weighs you down.

- I hope not, I just got rid of my back and neck pain because I would say what gave me the confidence to size up was just getting above the $1 million mark where every single trade I took from when I started, I just was really focused on the money, and the process and really growing myself. And then kind of when I got over, like the mark I just end this month, obviously with all the opportunity I just didn't care. And I'm just literally taking whatever the liquidity offers and with my buying power, whatever the liquidity offers I know where to cut. I know where my potential target is, and if it's not working I just get out quickly.

And it's just about taking the size that the liquidity offers. And basically there's the rule of thumb that I'll use is 1% of the liquidity on the day is my max potential share size given any positions, so that's it. - Will just be careful, you're scaring me with some of the position sizes that you take. I don't want to be more than 1% of the entire daily volume with all my trading.

You're staying on any one position, you're taking like 1% of the volume? - I mean, that's what I'm comfortable taking. that's the max, but just- - Just be careful, okay? Pride cometh before the fall. Grittani is over there smirking, I see him 'cause, no one really - No, no, no. - Climbs up as quickly as you have. So what do you think about Jack sizing up? - It's working that's for sure. I- - Everything's working until it doesn't.

- No, I feel I've got a thousand questions for Jack. 'Cause he's killed it this month and I'm curious what he's been doing. I don't have time to keep up with a lot of the videos and stuff. So, Jack has it been all OTCs? - I would say so.

And that's another thing too, is obviously NASDAQ has a ton of liquidity, so the size doesn't really matter but with OTC it's just the liquidity and filling is a lot tougher. And I would just say majority of my profits are all OTC and I don't know, I mean, just unreal opportunity this month with everything and just all my preparation and experience over the last three years, I'm always focused on OTC. I don't really care about the NASDAQ's, I'll trade them when they come up. But if there's an OTC, it's always OTC for me. And with the NASDAQ's I'm scared to size up on NASDAQ's, I won't size up on NASDAQ's I'll just take whatever like $500 risk on them because the liquidity is scary and the potential loss is scary.

But with OTCs, I know what I should be doing at all times. So it's never a question to me whether I should be cutting, or adding, or covering, or buying, or selling I know what to do just because of all my experience, and it's not really focused on the money anymore just focused on the trade. - I totally get that. I feel like I've taken a very similar mentality a lot of times in my career, when it's your specific area of expertise if the opportunity is there and with how hot the market's been this month, that absolutely is there.

It's awesome, you're taking full advantage. With the huge month and really pushing size like you have, have you had any single loss where just looking at that loss alone, you'd be like, "Wow this is one of the larger losses that I've ever taken," and did that affect you at all, if so? - I definitely made a mistake on LKNCY when it was breaking out. I was bullish on it all morning, but it shot me out when it broke low a day, kind of mid day and that kind of ruined my trade on it because it was nothing huge, but I realized a 2K loss on it. And then when it was rebuilt breaking out into the afternoon, I just didn't take the same kind of size that I had before. And it kind of just made me emotional, I sold it early but I ended up going from like 550 to 750 in the last hour. And I made a mistake on shorting into the power hour move.

It went from like 550 to 650 and it was pretty much all uptakes. There's like two small red candles and I just shorted way too many shares there it was like 40,000 shares. And in my opinion, if you were looking at the ONCY price action, it was almost like there was a fund or somebody stock and they were just buying way over the offer at all times and it wasn't really like properly dipping at all it was above the upper VWAP the entire time. So I did short like 45,000 shares or like 625 when it turned up there. And it pulled down into like 615 but I was looking for a wash underneath $6 to cover and then potentially go long again for a gap up. And it just held 615 and it absorbed a bunch of shares at 615, and then they lifted the ask at 616 and next thing it was 625, 630, 650.

And I was just trying to cover as much as I could but I was stuck there pretty much, and ended up, my average cover was like 660 or 670 and that was like a $36,000 loss. That day I still finished up green on the day. So it didn't really affect me too much. I just knew, okay this was my first big, big mistake this month. And at the end of the day, it didn't really affect me as much as I thought it would.

I just knew it was a stupid mistake where a lot of the times, when I took the big loss back in the day months ago, even if it was 5K, 3K, 10K I wouldn't even be able to eat afterwards I'd always be so sick to my stomach, just because I made the mistake so bad but this time it was just okay. I just recognized I made the mistake but everyone's human, I've made mistakes before. And they're just sucks because I missed the opportunity on the long side, which was amazing. But that was basically it. And then yesterday I made a bunch on CYDY and I kinda got overly excited for the next one to happen.

ALPP and ABML when they started dipping towards mid day, I shorted those just way too much size especially ALPP, and I think I shorted 80,000 shares at ALPP in the 230s. And I took a 15K loss at 250 or something. And it was taking way too much size mainly just because I was overly excited from CYDY's action. I was like, "Oh, the next one's coming so I better size into it."

And knowing ALPP I shouldn't even have been full-sized in that scenario. If I listened to my rules I should never be full-sized before really started proving itself. And that was just another dumb loss because of excitement.

But other than that, it's been pretty clear, pretty clean sheet. - Awesome. - Have you read any losses lately, Grittani? Was NXTD your first big trade back or have you been trading much? - I have dabbled here and there throughout my hiatus, usually with negative results, I'd say 'cause I kind of slip into this thing where I'll be missing the market and I'll always kind of have my finger on the pulse and know what's moving. And then when I kind of get a moment where I can sit down and look and focus, I'll usually talk myself into a trade. So I feel I've had a number of paper cuts. I need to update my profitably, which I'll just do at the end of the year and upload everything from August till, end of year.

But there's gonna be a number of 10K losses in there because I just take a lot of dumb paper cuts along the way. But no, that wasn't my first big time back on NXTD, I showed up around the end of November when all those Evie Plays were running and then had that big crash day. And I probably shorted eight of those things the day that most of them gaped down, and swung them into the next day and I made over 200K on those. So that was kind of nice 'cause that was the first real success I had had since I stopped trading full-time in July, and it was sort of a good feeling to be, like "Okay, I still got it I didn't completely lose my touch and all this time."

'Cause, there's of course a little part of me that gets a little worried about that. - Did you feel rusty like today, I was traveling back from New Hampshire, and in like two days, I pretty much missed a lot of the action. Today, I felt a little rusty trying to dip by 'cause I didn't feel the price action well enough just 'cause I'd missed the past two days. I mean you missed many months, was there any rust or did it just come back? - So, if there's rust anywhere, I'd say it's shorting listed stocks that are still green on the day, maybe doing lower-highs or something like that. That was a really big part of my trading early in the year and now I'm just really scared of it. And I just can't even get myself to really pull the trigger or go after any.

So that's probably the area where I'd say I feel the most rusty, but it's also probably one of the riskier areas to be shorting. The only other thing I'd say I've really noticed, is I did a really bad job of keeping up with setting price alerts over the past months 'cause that was always kind of a big part of my process is, maybe there's some big OTC runner, big listed stock runner and then it puts in its first or second red day and usually I'll just put in a price alert just below the breakout level so that if it does climb back up I'll get a pop-up alert in my face and I'll just pull it up on my screen and buy it if it breaks up. And I haven't been setting those for months. So with a lot of these OTCs lately that have been going absolutely nuts, I'm seeing them once they're overextended, once they've already had the breakout, and instead of getting breakout alerts and buying them on the way up to like I normally would be. So I feel I kind of dropped the ball on that, 'cause that would have been a really easy thing for me to do just run a scanner at the end of the day when I have a spare minute and set some alerts and I didn't do it.

So kind of a breakdown in my process and a little bit of laziness there. - Do you feel any guilt when you see a big runner that's running without you like maybe GRWG is is up to the 40s? It's hard to bring that up, I have to ask. - I can't remember how much of that I had. Man, I might've had like 150,000 shares of that at what, three, $4, or something like that. - You don't need to trade you're just like, "You know what I believe in this coming I believe in this story, let me just hold 100,000 shares." - I just don't have that in me, I'm just not that person.

So no, I don't really feel guilt about it. It's funny looking back on it now, but no, I don't feel guilty about selling GRWG really. When I see big plays that I missed, if I ever feel guilt it's because it's a ticker I recognize. I'm like, "How did I not have that on my radar?" But most of the time no. - I feel guilt, I drink Celsius every day and Celsius is my GRWG, CEO Lage has gone from freaking four to 40 and I should have kept it.

(Tim groans) Do you guys have any of that guilt Jack, Matt, no? - I have a lot of guilt when I misplace especially just for right now, when I'm so young and I'm trying to maximize as best as I can and push as much as I can. When I went to Arizona for the trip, that completely threw me out of my rhythm and that was, like we've talked about that so many times but just to refresh on it again, I just felt really guilty missing all the plays and made a lot of dumb mistakes when I was really tired and just not in the zone. Your best trading comes and that's another part of why I can size up this month, is October was my new best month going long, followed by November which is my another new best month going long. And then this month, another new best month going long. And it's just seeing that, that steady consistency these last three months I've really been in the zone. I'm in New Hampshire now, and I'm away from I was in Michigan and I was with Dom stuff and that was great, but there's still distractions and stuff because we weren't fully focused on trading.

But then I moved back to Connecticut, and I just had friends, I had my family, and they just don't understand that you can't put in that same amount of work and that same amount of focus, with the distractions around, honestly they're distractions. And when I'm here in New Hampshire, all by myself and I'm just waking up and I'm trading, it's my life right now. And that's what really just gave me the confidence to size up because I'm so inflow of the market, that I'm just focused. And when you're not focused is when you make mistakes and you're off your game. So, I'll just keep this momentum going until I start noticing that the market's dying out until I start seeing more losses than wins until the momentum stops.

But for right now, I'm just continuing the momentum for as long as it lasts, and who knows how long it's gonna last? I'll just keep taking it one day at a time. - Funny story before you talk Matt, sorry to cut you off. But I went to Jack's place in New Hampshire, and when Tim Grittani was crossing a million dollars, I went to his place in Ohio.

They are like mirror, identical places. It was crazy to me. I'm gonna post the video of your unmade bed in a little bit Jack on my story because I think it's funny just because I was in there when you didn't know I was there, thanks to your your girlfriend for helping out for getting me in the house to sneak in. But it was crazy I think there's something being in these towns where there's nothing and you have just a bed and monitors and you're focused in the zone versus I know a lot of traders that live in big cities. There's a lot of distractions they can't get in the zone.

All four of us have moved around a lot. But I think that we trade better when there's no distractions, I don't know. - That's exactly my point.

- Yeah, but Matt's moved the most of all and now he's succeeding, but now are you feeling better about your stuff? Because now you're in one city for more than a few weeks, and now you can really add up all your couches all in one room? - Well, I was in North Carolina longer than I've been in Texas. But, I plan to stay in Texas for quite some time so, (giggles) that's good. - Just what is the four moves this year? I mean, you're moving around more than Grittani ever did. - Yeah, graduated college so moved out and moved into the parents.

Jumpstart Carolina and now I'm in Texas. So yeah, this is my fourth place this year, it's pretty crazy. - Do you have any guilty confessions? This is a confessional. - No, not so much.

I definitely have guilt, but it's kind of along the lines of what Grittani said where it's like a play that I know I should have been in. 'Cause I can pull up my scanner basically any day, the last couple of weeks and just see some random, 100% plus runner and that doesn't affect me, I don't care 'cause I'd never would have been in it. I never would have traded it. There's no pattern. It doesn't make sense.

So when I see those, there's just no effects. But if I'm stocking a breakout for multiple days and then for whatever reason I miss it, and I have no one to blame but myself, a trade like that I will 100% be guilty on because that's money I should have made, I should have had. And I for whatever reason just missed it. So those are the trades that really get me.

- Quick perspective check with Grittani 'cause out of the four of us, he's the only one who's really been around for several years. I know Jack talks a lot about experience, but we're talking about like three years. I have a lot of things that are less than three years old and you're like, "Oh my experience."

But Grittani has the experience. How do you compare, when you first started nearly what has been a decade or nine years ago to now? - Like market conditions? - Yeah, trading conditions, market conditions shorts versus long, everything? - I mean with how active the OTC market has been lately, it's probably getting close to what it was like when I first started, I'd say. Although it was a bit different back then, 'cause a lot of it was really blatant promotions where now it's semi real companies, I guess. - What year did you get started? I don't even remember. Was it 2011, 2012? - Yeah, 2011, May, was when I placed my first trade.

But yeah, we're coming up on 10 years, wow. - It's crazy, crazy. But it's interesting because it was a crazy promotion market, and now it's a crazy kind of bubble market but obviously your expertise is very different. Are you more comfortable going long now or going short? - It's shifted throughout my career.

I was much more comfortable long when I first started. And then I became much, much more comfortable short to the point where I was almost never buying, unless it was a daily breakout. And now I'm kind of swinging back towards liking longs a little more again, just because I've gotten better at being patient with them and being selective with them.

- And I mean, for me as a teacher forget about just my own trading or anyone else's trading, I just see so much risk with a lot of these shorts, they can take these big positions and again you win most of the time, but all it takes is one short to really blow you up and we've seen several of these terrible companies go from like two to 20, two 40 in like a day or two. And I just don't think newbies are prepared for that. - Yeah, and I mean the big thing with like, "Oh, there's a huge risk to shorting" is there's a huge risk to it if you're stubborn, or if you don't cut losses, or you try to fight or any of that. I guess you could always get caught in the fluke after hours PR or something like that, if you're not paying attention, but there is kind of a certain mental comfort in taking a long position and knowing like, "Hey this is how much I lose if it goes to zero and it can't be more than that." - Just to emphasize that point, you're one of the best penny stock traders I think in the world.

And you've gotten caught in some short squeezes where you took your eye off the ball, so if it's happened to you, I think it can happen to anybody. - Yeah, well, and I was in really, really bad habits at the time and that's part of why that happened. Now I think I've been exceptional about it since 2019, like there's almost no room for stubbornness or any kind of that nonsense. And that's a big part of the reason why I think my profitability has increased so much in the last few years, is because I just completely cut that out of my system. - Is it less stressful now, is trading more enjoyable or do you miss the adrenaline and the chase? - There's definitely less adrenaline for sure. But I think it's also more enjoyable when I do trade because it's never a good feeling that those couple of times a year where you do get caught and take six-figure losses, that feels awful.

- You don't wanna drop the hammer again? - If there's time to drop the hammer, I'll drop the hammer but I'm not gonna get stubborn when I drop the hammer. - Well, you won't drop the hammer when it's going against you? - No, oh no, definitely not. That was one of my big aha moments was if it's outside of my risk level, if I should have cut stock awhile ago, never, ever, ever, ever and ever. - Why is there a tendency for traders to get more aggressive when the stock is going against them, or the position is going against them versus in reality if the trade is working then with your NXTD trade, you add on strength. Why is it flipped for most traders? And that leads to devastating losses? - Well, I'll say this for me, one of the best feelings I had as a trader aside from the initial success, was probably feeling so smart if I turned one of those losers into a winner.

Where I was like, "Yeah, I got myself out of it I'm such a good trader." And that's kind of part of what made that hole so hard to dig out of mentally, because I felt so smart. And then, the Black Swan would come along and I'd get wrecked. - So was that human nature where we wanna feel the odds and stats don't apply to us and we rise above all that, even though we don't? - Probably yeah.

A lot of ego. - Do you guys have that Matt and Jack? - A little bit. It's tough, you wanna be right and I think that's where most people go wrong, is we talked about this on twist a little bit our state trade podcast, where you just have to redefine what right is.

And that was kind of an aha moment for me about a month ago. And I was like, it's not right you make money on the trade, it's right like how you trade it and you trade your plan. That's what's important.

And that's why I think a lot of people go wrong is they have the wrong definition of what's right when they're trading. - So, if you stick to your plan let's say some news or something happens in the market, and you're losing, and you never had a profit, and you've cut your losses quickly so you lose maybe a few hundred or a few thousand that's a good trade because you stuck to your plan even though you technically lost money? - Yeah, absolutely. - You agree with that Jack? - Yeah, 100%, and my rule number one is never add to a loser or when it's going against you, just because you're wrong about the trade. So why are you gonna make the damage worse? And for me it's more about getting more aggressive and adding once you're proven right. Because then you're right in the trade.

Of course it could reverse and you're taking that risk of adding to your position and ruining or worsening your average. But as long as you're okay with taking that potential more reward for that last win percent if you have to cut when it comes back, you just need to be mentally okay with that whereas never out to lose everyone's going against you and just judge the trade based on your edge and how you traded it. If you bought something at five and it goes to, 10 or whatever and you get out a seven, but that was kind of your plan like that's a good trade and you don't need to feel FOMO if it keeps going. It's just all about how well you can execute your edge and being okay with the results.

- It makes sense. But what if let's say you're dip buying like a morning panic the thing is already down 30% and, lately we haven't been seeing one bottom sometimes we've been seeing double bottom. Sometimes the second bottom is a little lower than your first bottom would you cut losses or would you add? 'Cause sometimes I add to my position if I think a stock is feeling at a bottom, even though it's a little risky. - All right, it all depends on the volume, how much it's down, what sector is it in? Why is it down? - Wait, is there any multiple indicators, it's not just about the stock or the news, what? - I would say there's probably about 30 indicators that go into my mind.

But I would say the biggest one is how much it's down and what's the volume? - For example, ABML today, I added to my dip buy position and I turned out to be right. I would have had a loss if I cut, but I had a nice gain because I added and took a little extra risk, 'cause I thought it was filling out the bottom this morning. Even though you guys were probably all freaking short. - No, I actually I've held my short but I did dip buy it at 108 and sold it at 120 for a quick scalp while I was still in my short. Because the overall trend is going down, but for that one minute I knew that I was gonna go up for a little bit. So just hedging it for a little bit and just basically I was trying to cover my short too.

And I would say with ABML, yeah, that bottom it was a little risky, but you had the $1 level right there. If it did fail, that was a good stop loss. And if you were in from 108 and then you added at 105 or whatever the risk to rewards there it makes sense, it's down 50%. It's a recent runner.

It's going into the support level that I held yesterday. So I don't mind the add there. It all really just depends. Something I wouldn't want to add to a loser is if it's a panic that's choppy, where it's slowly down trending and you can keep adding into the new lows and adding and adding, and then it's just a liquid and there's not much volume that's something you don't really wanna add to but that straight kind of panic, I dunno.

- Yeah, I mean, sometimes for me, I just look at it like I need multiple stabs, on June 30th with CYDY, one of my biggest profits of the year and I got it in the low of fives and then it cracked five. And if I was totally disciplined I would've cut losses when it cracked five, but I was like, "No, I think that it's gonna stick." And I added to my position in the high fours and that turned out to be the ultimate bottom. I remember independence day if you remember, when they were shooting missiles at the alien ship, Bill Pullman fired the missile and the first one did not break the shields. And then he's like, "I need to try it again." And then he did, and he succeeded.

Do you remember that movie? You don't remember that movie Jack, you weren't even born. Do you remember that movie, Grittani? - I remember that movie, yeah. I've seen the remake.

- The remake is terrible, for their sequel it's terrible but the first one I always remembered that, where they're all waiting for the missile and then the force field hits whatever, but then he's like, "I want another crack at it." And that's what I think of, maybe you wipe out the initial dip buyers and then it creates the panic that's needed where everyone else is wiped out. What do you think, Grittani? - I don't like it, I just don't because I mean well, so it's- - I mean, you're also trained on the side.

- (indistinct) just the belong enough of the problem. And so lately we've seen the stuff like ABML and that other A ticker today where it's they're not really putting in the fake bottom and they're just having their nice clean bounds and that's that. But then look at when like BITW, where it had at least three or four fake turns on its way down and I've been in the position before, I used to try to trade these OTC bounces all the time. And I've been in the position where I will, try to add, add, add, as it goes against me with the mentality of like, "Oh, eventually there's gonna be a really good bounce to bail me out." And if you look at one like BITW the bounce is pathetic. It was like 70 to 90 or something like that.

It was like a really weak bounce considering how far it came down from 200 and it just- - It went from 82 to 112 I don't consider that a weak bounce. - 82 to 112? I didn't think it was that good. - It did, just 'cause I was in a middle and I was out at the time.

- But I don't know, it goes back to that it only takes one mentality. If you're adding the one that keeps going against you it only takes one that doesn't really ever wind up bouncing. And I almost got taught that lesson probably, six or seven years ago.

I remember at the time it was this pump BAZM where it was up to like five bucks, and had this huge fake turn of the threes or something had it's panic day. And I was long, quite a bit of size at the time for me and I got almost stuck in it. I barely failed before I crafted the new low. And I was like, "Whoa, that was close." And then I think I got halted very shortly thereafter and- - I think the difference though is I'll take one more stab, but if the second stab fails, then I'm out.

I'm not doing three, four, five. - So I should have clarified. when I say I don't like it, I don't like it for new traders who haven't gained the experience or learnt all of these lessons yet. We've been around the block.

So we kind of have a little bit more flexibility, I think to bend the rules and get away with it. But if you're new and you're trying to bend the rules it's very easy for that to snowball and turn into a huge problem. - "Pirates of the Caribbean," Parlay. It's more of a guidelines, really. Have you seen that movie Jack, "Pirates of the Caribbean?" - I've seen "Pirates of the Caribbean," but I don't know what you're talking about.

- Well, I do a terrible accent, but no, you're right, it is a slippery slope, I think a second point to clarify is that Grittani, Jack and even now Matt, you guys are taking big size. I take minuscule size positions where I can usually get in and out. I mean, ABML was my biggest size in quite a while where I had 40,000 shares.

It was like a $50,000 position but usually I'm trading more like 10 or $20,000 positions. And I'm trying to make like one, two, three grand. You guys are sometimes taking, 100, 200, 300, $500,000 positions so there's different games being played. - Yeah, no, I would say that honestly what I'm staying as of recently and stuff it's not even really good advice for anybody, out there that's new. I would listen to like what Grittani says, and even what Matt's been saying, it's been really good too.

But honestly my advice is just I'm just saying what I've learned so far and my process, like Grittani has, been here for almost 10 years now. So he really knows what to say on these and what to tell people. But for me it's like I'm just saying kind of what I'm learning and I don't think a lot of people should be trying to emulate what I'm doing at all just because I'm learning as I go too. And I'm sure I'm gonna have some lessons along the way because you always have to adapt and there's always gonna be a lesson about something.

- Yeah, I mean, all anybody can do is learn what works for them. We all share our experiences openly, not so that anybody follows anybody's alerts you should never do that. Not to try to copy someone exactly, but just to see, what works best with your personality. You have to understand most newbies are trading with like 100 shares, 200 shares, they have limited number of day trades. So that comes into factor too. Sometimes I see these people dip by and they can't even get out same day.

And I think that's dangerous because what if you do get one of these slippery slope stocks where it just keeps dropping like WSGF, drop like 70, 80% on the day and you're like, "Well, I have to hold 'cause of the PDT." So I think that people should always save an extra trade and be able to get out whenever they want, whether they're uncomfortable, whether their loss grows too much you don't wanna have to be stuck in a stock because you just don't know what's gonna happen. There can always be one play that just gets out and then you lose, big or even all your money or even more than all your money, if you're short. And that takes you out of the game confidence wise. - Totally. - Cool, all right.

Grittani, fast, last 10 minutes, you get to ask all of us questions. Anything on your mind? This is Grittani's Q&A. - Okay, Sykes, do you ever short anymore? - I shorted, I think two or three times in 2020 Jack was like cheering the whole chatroom was a cheering when I shorted.

I shorted WRTC, as I remember one of the last ones, when they had a failed LAPD trial, I made my 50 cents. I got out, the stock dropped two bucks a share on the day. And I also shorted ADOM 'cause it was just up too much. And I think I cut losses quickly, or maybe I took a small game but it was pretty much a scratch 'cause I was it was just a crazy Evie run out.

But I don't like shorting for newbies 'cause some of these short squeezes can just run up again and again more and more than ever before. So it's scary. - So you're just avoiding the shorting these crazy extended OTCs, that doesn't hurt your past life, Tim? - For me, I see all these runners, I was in ALPP I mean, when they first announced the drone acquisition I was there at the beginning.

I know it's overextended. I know ABML is overextended. I just don't know how high they go. If you had asked me on the last like 10 runners how high they would have gone, I would have been wrong on all of that. So I just I'm scared. - Gotcha.

Matt, what is your favorite set on that? - I like OTC breakouts, definitely my most profitable. And then kind of a variation and listed land is kind of like the ABCD pattern into the afternoon and then as it breaks high day and multi-day breakouts enlisted. So that's something to think about. - For the breakouts, do you kind of do a press alerts thing like I do, or do you more just watch your scanner and just keep pulling up daily charts really frequently? - Yeah, no, definitely.

I'm sure if you look at my both my stocks trading and fingers swim I've got so many alerts, and some of them are like two, three years old now and they just never broke out. But yeah, because those alerts are super important because one random day it just might shoot up towards the breakout level and then hold up and then break out. And might not get hit like your normal scanner. So it's definitely an important thing for people throughout there. - Cool. Jack, are you gonna win that fantasy football championship this weekend? - (giggles) I hope so but the guy that I'm playing scored like 190 on me when we played.

So I'm kinda kinda scared of him and Stefan Diggs might be injured and he's been doing really good for me this year. So I dunno, my team's kind of shaky when I have injuries, my team scores barely 100. And when they're healthy they'll score like 130 to 150. So I've been consistent all year and that's why I think I'm in first place. But I can't, if you guys another huge, huge run I won't be able to compete, but then I don't know.

- Okay. - Are you guys talking about each other? 'Cause I'm not in this little league. I don't have time to waste.

But I feel like you guys are talking about each other. (Jack, Grittani and Matt chuckle) - No, I'll ask you a real stocks question, Jack. Could you actually tell me a little bit about your CYDY yesterday? I know it kind of like well, were you not shorting until it did that lower-high and kind of sideways action and then crack? Or did you not get the big bounce after it went red? At what point did you get in and then were you just covering on that turn near five? - Yeah, so CYDY, I remembered from the first run. If you look at the daily chart, it was both times like seven green days. Of course, this time it wasn't as overextended but it was going into resistance which kind of makes the ideal.

And I just remember that I tapped out exactly at 10. So when I saw it at seven bucks I started actually shorting it and 690s, and just being conservative, I did cover into the view up at like 670, but that immediately gave me a four grand cushion on it. And just using that four grand cushion I was waiting for it to kind of fail. And I actually didn't even reshort it because I didn't want to get chopped up in it until it was confirming. And then once I started taking out 650 I just started slowly, just five, 10K shares and then just as I kept failing just more, and more, and more, and more all the way down to the- - Oh, you're adding as it's falling apart. - Yeah, and then just risking I think my average was like 50,000 from 622 and my average was if it held there I would just cover as much as I can in the churn and just get out.

But then I saw the offer stack up like 500,000 shares like six bucks and we went red. And just knowing too how CYDY operates, it was almost identical to the last trend. And when it took out green to red we got that panic right to five bucks again and I was patient and I did cover my shares in the low fives. It wasn't perfectly like in the turn I was covering 520, 540 just making sure that I have my buying packer.

I have focused on my E-Trade account by the debt and then I did buy the dip. And I know dip buy was like 96,000 from 511. And I just honestly got scared because it was the biggest size I've ever taken. And I sold that at like 535, 540, but obviously it kept going and that was just a little bit too much size for that and that's why I got out quickly because I wasn't feeling comfortable. And then I reshorted 50,000 shares at 590. I now top up on the bounce, just risking green to red.

And then I covered on the dips along the way and I got out the bulk of my size at 525. I didn't swing it. - Nice. - That was my trade on it. So it's just trading basically like the action not best like the long and short best that I can.

- Best. - Why do people think that there's a short-selling conspiracy on CYBY? I get tagged in these ridiculous tweets when all you have to do is study the patterns, this is a classic four, five, six crash, drop, dip by, reshort. It's the same pattern over and over.

Why do people not do this? I'm I taking crazy pills? You guys see it, right? We don't even talk to each other. I've never shorted CYDY. I tried to dip buy it a few times.

I made some good money, but why do people think that there's more going on, rather than just recognizing the price action and patterns? - People drink the Kool-Aid. And so when they believe that, CYDY is the greatest company on earth the only possible explanation that it would go down is short-attack. Like it's- - But what if you look at the pattern and you show 20 examples with the exact same pattern.

Do they just not see it? Do they not wanna see it? - I think that this is a real company, I guess there's no helping those people. There's nothing you can do. - But it's the same pattern. If you show the same pattern, it's the same. It's the same. I don't know how to explain it any other way. - At a certain point now, just relax and what will be, will be (chuckles).

- I like your laid back approach. I wish I could be. - I've given up. - I just keep linking the same patterns. I'm like, "Just read it." Do you think they're illiterate? Do you think that's possible? Like promoters, maybe they do too much coke maybe they're just illiterate and they never got taught how to read? - We're just in a weird conspiracy theory society where people would rather believe the crazy explanation than the simple one, that's just kind of where we're at.

- Well said. That's how we'll end it. That's a great ending.

And we can be wrong in any trade all of us have done very well, especially lately, but again, let me just remind people most traders lose, were partaking in patterns where we think that we have an edge but we are willing to cut losses quickly. None of us win 100% of the time, 90%, 80 even 70% of the time. Jack is making what 700 grand this month and your winning percentage is 60% still, is that right, Jack? - Well, first of all, I don't think I'm up. I think I'm only up like six, like 70 or 80.

- Well, my bad 670,000, not 700,000, my bad. You said you're at 35,000 on realize that'll push you over 700. - Well, what if the gap's up and squeezes me? - So you can be wrong in any trade? Okay, I like that.

So you made 670,000 realized, you have 35,000 unrealized but your win rate is not 100, 90, 80, 70%. - No, but I think my win rate this month, just based on the opportunities, I think it's more like 70, 75 and it has been higher in November too, and even in October. - Okay, but you're going against my point, okay? The point is that you can lose you have to cut losses quickly.

We don't know everything, discipline matters that was my point but you're messing it up. - Yeah, no, discipline definitely matters for sure. And it's okay to win I've lost 10 trades in a row when it's slower and just make sure to just recognize momentum getting back to what I said it's all about the market conditions. And when things aren't working, like things aren't working, so you should be scaling down on size. And then when things are working, just keep trading that momentum until it stops working.

And then when it stops working you don't have to fight and say, "I'm always right." You don't need to win every single trade. It's just about playing that momentum the best you can just kind of like basketball, where you score, score, score, score, score and then once it stops you're gonna have to play defense the best you can until you can build that momentum again. - And I'll give a 20 year example where I made a little over $700,000, it was the first four months of the year 2000 all OTC breakouts, unbeknownst to me there are OTC boiler rooms going around calling everybody at dinnertime that led to gap ups and I was just following the pattern.

But the first four months I made over 700 grand. The last eight months, I lost 10 grand, 'cause there were no more OTC breakouts that actually forced me to short sell or learn short selling which was actually good. But the market can and will change don't get too comfortable with any hot market. Just take it for as long as you want.

Grittani you get the final word because you have the trade of the month making over $400,000 in a day. Final words of wisdom from the man. - Jeez, I've done this so many times I don't even know what I haven't said yet. - You can repeat yourself. This is what I want people to understand. This is not rocket science.

There's a lot of learning in the beginning and all of us are putting in a lot of time studying, but after a while it's the same patterns, the same rules, the same lessons. And it's just reinforcing it. So feel free to say the same thing whatever's on your mind right now. - I think the big thing lately for me is just just data, data, data, like track everything. That has helped me so much.

Whether it's tracking my trades and figuring out where do I succeed, where do I fail? Whether it's tracking a setup that I learned in a video lesson and wanting to CEO how does it actually perform? How can I improve upon it? Or maybe just something I think I see repeat a few times in the market. And then I say, "Okay, every time I think I see this I'm just gonna track it." Just having that data at your fingertips and being able to play with it and figure out, like, "Oh, you know what, the ones with the higher market caps don't work so well."

Or just like random things like that. You can just gain so many little insights. So I'm all about tracking and yes, it's extra work but it is extra work that I think is well worth it. At least it has been for me. - Cool, and I hear in the rumor mill that you're working on a new guide. Care to comment on those rumors? - We're bringing that up.

Okay, yeah, I'm trading tickers too. It should be at end of January. - Yay, yay, woo, yeah! I'm excited. - Boom.

- On that note, thanks Tim, that was fun (chuckles). - If you didn't wanna talk about it we could have cut it out, but you- - Oh no, oh it's fine, it's fine. - Look at your face, it's getting all red I love this. I am so pumped, you have no idea because literally you and now Jack and Madden, more and more people are taking this game into new areas like you would the data, that's something I've never done. So I'm excited to watch it. So, happy 2021 let's make this a better year than 2020, but thank you guys for sharing everything, and for being great parts of the community, just helping others.

Literally this is my been my dream since the beginning and I'm so proud of you and I'm so excited to see what more you guys can accomplish. Just stay humble, don't get cocky. Don't buy so many couches like Matt Monaco does. (all chuckles)

2021-01-06 08:27

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