Stock Broker Turned Millionaire Trader - Scott Manzo

foreign hello everybody this is Anthony for investors undergrounds today I have an opportunity to speak with the one and only Scott Manzo Scott worked as a stock broker for eight years before he tried day trading he's now been a successful full-time Trader for over 20 years he uses a mean reversion strategy on an intraday time basis today we'll discuss his trading system personal journey into trading metaphors and more you can follow him on Twitter at Scott Manzo hello Scott thank you for being here and taking the time to speak with me today oh it's a pleasure Anthony I got a chance to meet you out at Traders For A Cause in Vegas uh I've watched probably all your videos what I would say to the the viewers today who are trying to become better at trading that's why you're watching this video to get a pen and a piece of paper and uh write down a couple of things that I have to say today that maybe you can Implement on your strategy that makes a big difference uh writing things down I do it I take notes on all the videos that I watch and compile them together and uh and it helps me greatly so it's a it's a habit of mine and you want to you want to learn how to be successful this is one of the things um that I do uh just one of the things I before we get started is um I have a saying uh about the stock market and I I just wanted to throw it out there the stock market is really hard trading is really hard when something's really hard not a lot of people can do it and what not a lot of people can do it the financial award can be great so let's not hope that the game is easier let's get better at the game and that's what this is all about thank you so much Scott and it was a pleasure to get to meet you at Traders for a cause your speech was excellent and from my perspective it was a fan favorite everybody that I spoke to loved it you dropped a lot of knowledge and I hope we can continue to do that today and yes grab a piece of paper and a pencil whatever you use to take notes and Scott always brings great information so thank you for being here Scott I would love to start by just asking a little bit about your backgrounds and your upbringing how did that impact your decision to trade and has it had an influence on how you trade very much so um you know going back to the beginning I was uh I was born in Boston Massachusetts and lived up there completed the ninth grade of high school and moved to South Florida um I was uh grew up in a let's call it a blue collar family didn't have uh a lot of money um there was a lot of things that I saw in light that uh I wanted that I was willing to work for um the type of guy that's ready to roll up his sleeves and get dirty and and dig in uh for the things that I want um in life and uh I'm a I'm a competitive guy uh I don't like losing and ironically um being great at trading you need to be an expert loser so that was uh that was that was an interesting lesson to learn when I first started out um in the business and uh so I I moved to Florida I went to school at University of Florida um I was always a very social guy uh I was I was president of my senior class in high school I was president of my fraternity at the University of Florida uh which took a little bit away from my studies so I was a finance major and uh I'm probably going to finance because I had to take the class twice the first time I took it I got a D I had a I had to take it over again um so that was uh that was pretty humbling and it's it's uh good to be humbled in life and and stay humble um after I graduated college needed to make some money started selling copiers out of the back of my car uh no air conditioning driving around in Sunny South Florida um did that for six months learned some great lessons went to work for a finance company making high interest rate loans uh kind of taking advantage of uh lower income people and it just felt awful going to work every day uh my brother-in-law was a stock broker and I had a finance degree and he was doing well and he's like get us get a suit and a pen that's all you need go get an interview and I got a job and I worked at a couple of different brokerage firms for for a while and The Brokerage industry kind of went from transactional to asset Gathering about 20 25 years ago and um it just didn't didn't love that and I wanted to be more transactional and kind of got into trading for myself when I was a broker um saved up some money and said to the to the wife honey I'm gonna go uh I'm gonna go day trade for a living if I lose uh I started an account with a hundred thousand dollars I said if I lose 50 I will uh 50 000 I'll I'll cut it out um and I'll go back to being a stock broker but I wanna I really want to give this a shot and see if I can do it because I had a number of friends that were Traders most didn't make it some you know a couple did um and that's uh kind of how I um got started out in life did your experience as a stockbroker mold your perception of the market at all it's a great advantage to go from being a stock broker to go into day trading and and there's been probably a a number of people that I've come across on on Twitter that have uh or YouTube videos that have had that that same transition you get burned out being a broker you don't like it and you're like well I I know the Market's a little bit um foreign to make a baseball analogy when you start out trading you're at home plate you're hoping to hit a single get on first base and second base third base and and make it home and put some points on the scoreboard uh when you're a stock broker and you've been doing it for a while the all of the knowledge that you you need to get started out you already you already have you've been staring at the screen so like I was when I got into trading I would consider myself starting on second base as as opposed to um starting it at home plate and one of the interesting things uh about the being a stock broker was you had like good fundamental knowledge of like companies because you'd have to learn about a company to pitch it to a client and so forth um so I learned a lot about uh like fundamentals you how to take a series seven um and I had a seven and eight a 63 65 Life Health variable annuity all that stuff I had like all the licenses so I studied a a lot of stuff so that was a good foundation you understand how interest rates affect stocks and things like that things had for the last 10 15 years you didn't really have to worry too much about but now you can see um with what the fed's doing how kind of that really impacts the market so from a fundamental basis being a stock broker was uh a huge a huge Head Start but it cut the learning curve in trading uh quite a bit that's really interesting yeah definitely in 2023 and even in 2022 as you mentioned you know the fed and interest rates and things like that have definitely come into the market I've seen a lot of Traders mention CPI reports or what the the head of the Federal Reserve is going to be saying or how they interpretate how they interpret what he's saying yeah small cap short sellers are talking about non-farm payroll reports and CPI reports and you know at 8 30 in the morning on the Friday or the Wednesday or whatever it is you you know you better be uh flat um or you're you know going to be rolling the dice or you better be hedged or you know whatever it is so but the market is uh is an ever-changing animal and you gotta adapt adapt adapt and stay up to speed with you know what's important and what's not um and you need to be aware of that I'm sure we'll talk about that later absolutely one of the things that I've heard you mention Scott is that the two holy Grails for trading are consistency and risk management I would love to talk a little bit about um both of those and how they interact with one another if that's okay sure and and you're probably picked that up from the Traders For A Cause speech um but uh I'd like to probably expand upon it a little bit and add a couple of things that are very important when it comes to consistency and my my Traders For A Cause speech was was on consistency because that's what I'm really good at my every year since I've been in the business I've been able to make money um I don't uh lose all that often um on a on a monthly basis um I certainly have losing days but you know I have very very very high win rates and we'll get into how I you know get it those High win rates but when we talk about consistency there's there's three things to me that are really really really important like one plus one plus one equals five if you can do the first three things it's going to translate into consistency and consistency is important because if you're going to sit in this chair for 20 plus years and make a living out of it uh you don't want to have a ton of stress and consistency reduces stress um that's a that's a big one in your life routine and also even more so in trading um so the the first thing that I want to talk about and this is definitely more applicable to newer Traders is you have to be a specialist in trading you have to get really good at one thing and in order to get really good at one thing you have to develop a trading system um trading system plus execution plus risk management equals consistency that's like the the formula to me that's like the most important thing so when we talk about a trading system like that word or phrase has become more popular over the last five or ten years no one really talked about it prior to that but um as you as Traders got better and better they realized they needed to specialize so like what is a a trading system so let's talk about like a a couple of examples because new Traders need to have a trading system that gives you an edge a higher percentage chance of winning against the market uh a 60 chance a seventy percent chance an eighty percent chance what whatever it is you you need an edge um it's hard to go 50 50. uh in the market unless your winners are a lot bigger you know than your losers but you probably can develop a system where you're where your Edge increases uh your odds of a successful outcome so um let's start with like a simple one uh Bill O'Neill who's the founder of Investors Business Daily if you are a uh guy who likes to be bullish on the stock market buy breakouts buy high growth companies buy stocks that are trending well you can buy the book you know how to make money in the stock market by Bill O'Neill and he's got a a trading system in there and in the trading system it talks about okay the max drawdown that I can have on a trade is eight percent so something very simple just to translate it for the viewers is I have a hundred thousand dollar account um the biggest investment I'm going to make is ten thousand dollars or ten percent of my account so I'm gonna invest ten thousand dollars you know in this stock trade in the worst case scenario is eight percent I already if I bought it properly um I'm gonna get stopped out when I lose eight percent whether I'm long or I'm or I'm short um but Bill's system will be okay stock is basing basing basing breaks out you know pulls back breaks out further and I'm gonna win three times as big as I lose and take profits along the way so that's an example of of one trading system um another trading system that I would like to share so there's a guy follow on uh Twitter his name is sdp uh I don't know him never spoke to him um from the things that he's written he's a very good Trader but he also posts some very good memes and so if you are a small cap short seller let's say and and I'm an investors underground and it's filled with small cap short Sellers and a lot of the most successful Traders I know are small cap short sellers um and this works for small caps and it kind of works um in large caps too and if you flip this upside down um you kind of have a long strategy it's just in Reverse but I just want to give you another example of what a trading system is so you know you have a stock that's that's running higher running higher running higher running higher and then it puts in the top and then it takes out a previous low here undercuts this low and now it's starting to dive down and now it's bouncing back up and you say okay this is the area that I want to make a short sale and I'm going to use a stop a little bit under the high of the day or a stop above the high of the day algorithms have recently figured out everyone stops at the high so they take out all the stops and then they rip it back lower so if you're going to have a system with a set of rules you have to understand that you know uh part of the time you're going to get Wicked out and it's going to suck but you're never going to get bludgeoned um when you take your stops so this is an example of another trading system I'm going to short sale here I'm going to add to my short sale when it starts working I'm going to make some covers I'm going to short a little bit more and towards the end of the day I'm I'm gonna cover so that's another example of the trading system Scott can you tell us a little bit about your trading system my trading system is I'm trading the most volatile um stocks in the market I only trade intraday I don't take overnight positions so how do I find um what I'm going to be trading the most important tool that any Trader can really have is a scanner I use trade ideas um years ago I used to use something called whisper it got bought out it's not around anymore so there's trade ideas or scans and so forth um to find uh the stocks that I want to trade a very simple box um it's the five minute high and low box these are stocks that are up or down five percent or more on the day these are stocks that are most likely going to have the biggest range on the day so like if I'm throwing a party at my house these are all the people that I want to invite that's these are these are my type of people after that five minute box that shows me what I should be looking at for the day after that there's a another scanner that I have that shows well gee I'm graduating from the five minute box into the crazy activity box these are the the people at your house that are taking tequila shots and jumping in the pool and you're like this is who I want to party with right um so these are the crazy stocks so whatever's up 20 30 50 100 200 percent on the day you're down 50 of the day you have to know the reason why they're up and you know fundamentally does it you know does it make sense at the moment to help you form an opinion if you want to trade it and that comes through uh years of experience but you need to have a scanner to to show you where the volatility is because you want to I want to play on the most extreme on the upside and the most extreme on the downside and let it all kind of have the emotion get sucked out of it and kind of meet in the middle and that's where I'm going to be taken um some profits so my trading system unlike the previous one that I showed you where you have a defined stop I'm a front side short seller and a front side uh dip buyer which is very dangerous um why is it dangerous because where the hell do you stop out if you're wrong if something is going up and it keeps going up and it keeps going up the trade is actually becoming better and better from a Divergent standpoint and if it's diving lower and lower and lower it's the Divergence is getting bigger and bigger and and I'll I'll talk about this uh a little bit more in a second so where do you know where do you stop out you know so my trading system is like okay um shorting a little bit on the front side once it goes parabolic by my definition and then I'm looking to maybe add um a little bit higher if I'm wrong or a little bit lower um if I'm right and vice versa on the long so I'm looking you know to maybe make two entries or three entries um on the stock so getting back to my trading system um the first question I look at when these things are in my scanner is the stock above or below the 20-day moving average so 20 period moving average if it's below the 20 period moving average I'm probably not going to short it because that's a sign that it's a little oversold and it needs some mean reversion so I look at the 20 period moving average the second thing I look at is is the stock penetrating the one minute upper Bollinger band next thing I look at is the stock penetrating the five-minute upper Bollinger band the next thing I look at is what is the Divergence back to the various moving averages let's call it the 20 period moving average on the one minute the 20 period moving average on the five minute the 200 period moving average on the one minute and the five minute and basically that's telling me is there enough meat on the bone to get involved in this risky situation is the reward big enough for the risk you know some guys come in and they trade every day there's a dollar stock it's up to a dollar fifty they're going to trade that stock all day and try to grab 20 cents out of it and to me I'm just not going to waste my time on that I'm going to wait for the bigger fish to fry the better uh I want to be efficient and not have a lot of stress and that money making opportunity I don't need to make a couple hundred bucks I want to make you know thousands tens of thousands that's you know that that's what I'm interested in and then the last thing I look at with my training system is if I have the penetration on the one minute the five minute I have the big Divergence in there I look at the RSI on the five minute and that's the one thing I'm not going to be a hundred percent transparent about um if you're shorting something on the upside you probably don't want to be short if that RSI on the five minute is under 70. once you start to get into the 70s it gets interesting uh very few things are able to get like up to like 90 RSI um things like that are highly highly highly uh probably very low float stocks or something that's just going super parabolic but you usually don't see that too much the the number that I like to use is you know somewhere um in the middle so if all of those criteria are met I'm I'm getting involved in the trade and that's like my trading system I have like three things that I trade but that's my main trading system so going back to trading systems IBD is one small cap Short Selling is one uh on the back side and then the example that I just gave would be shorting on the front side I I typically trade a lot more large cap than I do small cap when small cap really starts to heat up I get involved in it because then the reward becomes really big I'm not interested in that dollar to dollar fifty move but if a two dollar stock goes to 12 you're going to find me there how did you come across your trading system I would imagine you didn't just wake up one day and say I'm going to become a mean reversion Trader I'm going to implement Bollinger Bands and RSI how many years did it take you to come across your trading system and to build that and to really hone it uh to the point where you can find consistency in the markets with it so great great question and I hopefully the answer doesn't disappoint but you know some of it was just dumb luck um when I left being a stock broker I went into an office a day trading office and had like 20 guys in there or 15 guys in there and they had this scanner um and and the scanner had these five-minute high and low boxes and uh in the crazy box and they said look this is what we do in this office these are the scanners these are the stocks we want to trade and I was probably just there were maybe two or three guys that made it out of like 30 guys so we're all looking at the same information but there's 500 things that pop up in this box you know during the day or let's let's call it a hundred things or 50 things I'm trading one two or three um I'm trading different ones than what somebody else is trading um so we all have the same information it's just a matter of you know how we execute and what our judgment is but I just walked into this office and these were the tools that they were using so to me it was like watching a video game um and I played like depending on how old your viewers are I played asteroids Missile Command Defender Miss Pac-Man all that stuff is patterns patterns patterns patterns you know if you go this way on Miss Pac-Man the the things that can eat you go the other way asteroids you know how to kill the little ship and Missile Command you know how to uh where they're coming for Galaga these are all like patterns and to me it was the same thing in the uh in the stock market you just had to figure it out um so the tools that like uh that I used so we had the scanners and then they used e-signal charting platform I still use it today probably nobody knew when the business uses it um but it's it's been around forever uh they raised the price every year of like talk about consistency you never get a break with those people and the charts uh for this formula that they were trying to trade in there that they were trying to like teach me had Bollinger Bands on it and then I started watching how stocks react to Bollinger Bands upper Bollinger Bands lower Bollinger Bands on a five minute a one minute daily a weekly a monthly I mean they work they put the probabilities in your favor that okay this is a good place to trim this is a good place to add uh if I'm buying you know weakness or shorting strength the probabilities of you taking something off or adding at a Bollinger band um are just as good as a moving average but they're probably even better because they're um intraday so it was like walking into a place and this was the toolbox that they gave me and I just took that toolbox and did the best that I could with it so it wasn't like I read a book that said uh you know try this this and this it was just like here's the paint paint that's really interesting and has your trading system and the way that you've traded it has that changed and evolved over time for example were you always an intraday uh Trader or were there times previously you know years ago when you were maybe swinging trades more or has it always been just whatever you make that day is what you make no I I uh traded pre-market and and I'll trade pre-market once or twice or three times a month if if the setup is is is there um I'll trade it uh but I don't actively trade pre-market I'm I'm prepping for the day doing my homework um getting familiar with the market my after hours trading my strategy I I tried it and after hours a couple of times um I lost so much money uh me and reversion's not a good strategy and after hours because after hours mainly stocks are reacting to earning earnings reports or FDA news or aftermarket news and the market needs time to disseminate that information so if you're going if you're a mean reversion Trader and you're taking the other side of the trade um if there's stock specific news that's making it shoot up that strategy um is how you get your face ripped off and you get run over so after I lost a lot of money um trading aftermarket I said well I'm not good at this uh you need to stop doing what you're losing money at that's very important no matter how you trade so I cut it out and one of the beauties of that was um I got to have a life after four o'clock instead of sitting here until six o'clock or seven o'clock um and and that was just a rule that I made uh for myself don't do what you suck at you know they say you know winners never quit people quit all the time when there's this especially know what you're good at and and stick to that if you suck at something unless the reward of becoming really really really good at that is so great then just cut it out you know you don't need it you you don't um so yeah I I lost a lot of money after market and I wasn't good pre-market uh so I just kind of you know stuck with intraday trading and I work in an office I'm I'm at my office now it's great we're doing this on a Saturday because I'm not so burnt out from uh an exhaust exhaustive trading day at home I don't even have my trading software loaded on a computer so I I wake up I get to my office I'll get in you know if the Market's normal I'll get in at 7 6 30. the Market's really hot and I need to be there at five o'clock if there's a big opportunity to make money I will I got in this week twice at four o'clock because there was just some really funky things happening um and it paid off I made some made some good money but on a regular basis I don't want to live like that um but when there's opportunity to make you know when it's raining money you got to bring your buckets and when things are slow you need to chill out and not force it Scott the examples that you gave about the trading system are excellent I'm wondering if you can talk a little bit about the role and importance of execution and risk management um sure two important pieces of uh of the three-piece puzzle that leads to consistency so like execution is like I I think really underrated um you have ideas and you have execution everyone has ideas like oh this stock is going to be assured and the stock is going to be long and and I like this longer term but how many people have the stick-to-itiveness to to stay with something keep their eyes on it um Nate sets a lot of price alerts um that are in investors underground uh to alert him when something hits a price that it it needs uh it needs his attention um and I think that's a great way to do it but like in execution you have to have a plan like okay so I have we talked about trading systems okay so now let's say um in terms of execution you know what what is the plan you have to have the plan beforehand so let's say I want to be short 15 000 shares of Bed Bath and Beyond I'm going to do 5 000 chairs um on the front side when the lower high comes in I'm going to do 5 000 more and then 5 000 more on the back side at what prices those are going to take place you have to be ready to execute you can't sit at your desk like all Traders do and say oh I missed that or oh I I was looking at something else I got distracted um that's a lack of focus that's a lack of having a plan if you don't have your execution planned out where you're adding and where you're taking profits at you're not going to be able to look at your level two screen and watch your p l go up and down and make the appropriate decisions the places where you're going to execute need to be predetermined um the first one can be reactionary but the other ones you know you should have an idea of what your plan is and executing adding to your position and taking it off like execution if you're it's going to take a bus ride to California and you missed the bus you don't you know execution is is unbelievably important and people don't like stay focused enough on their target like if I have two or three targets and then I miss something great over here because I was focusing on two and three targets that's fine in the long run I'm better focusing on my two or three targets than I am looking over here looking over here and you know seeing what's going on so execution is is really really really important and I think it's underrated so the next part about it is risk management and you know this isn't my strong suit by by any means I I have no business giving a lecture on on risk management um knowing where to put your stop um you know based on a percentage of uh what's the max loss on the trade what's the max loss per day what's the max loss on the account setting a stop at the high below the high or on the low these are all things that like you you need to implement a large portion of them if not all of them but another thing that another thing that uh is is a very interesting topic to me in risk management is something called the gambler's ruin and it's uh it deals with Statistics and probabilities and it's it's kind of related to uh the casino and the the casino is developed on a thesis that we are going to let you play games where the odds are in our favor and you're going to beat us on some hands and sometimes and walk away a winner but just based on statistics we have the edge and our bankroll is bigger than your bank rule um the gambler's ruin comes into play when you lose all your money because you bet poorly and you're out of the game you really don't want to have that hope happen in the stock market it's very hard to rebuild an account refund and and and so forth so the the gambler's ruin talks about the the likelihood of your Edge winning a certain round um I I actually if you go to my Twitter feed um I don't really tweet but I recently tweeted I think it was a 10K diver who I follow he did a 25 or 30 thread tweet on the gambler's ruin and it he his metaphor is David verse Goliath Goliath has all the resources um and can take the punches and the losses but David has more skill than if the skill Advantage is 55 45 in terms of for for David it's not wise for David to make large bets it's very wise for David to make small bets and let that numerical Advantage play out over time because you can flip a coin and it's 50 50. but it's not out of the realm of possibility that you flip heads or tails five times in a row it's not that crazy of a long shot or four times in a row so in in betting with your risk management and your account if you're going to bet big you can't suffer a lot of big blows in a row but if you have a statistical Edge if you kind of grow slowly and let that statistical Edge play out over time um the odds really really really go into your favor so it's a slow way to win the battle but your chances of winning are really good David could be Goliath with big bets but the big bets now favor Goliath because he can lose more than David can lose so when you're up against Ken Griffin at Citadel in the market that's got the biggest bankroll of all time and your bankroll's little um can consider that when you're thinking about compounding so fast and putting a lot on the line thank you yeah that's a really interesting topic gambler's ruin and one of the takeaways if I can just get your confirmation one of the the big takeaways is for a Trader to find their Edge have Edge and find a way to maintain that edge over time meaning show up to the market the next day and the next day maintain their Capital so that they don't run out might by taking too big of bets in a short amount of time because they could blow up their accounts conceivably in a couple days or say a week versus having Edge trading small staying in the game for months years and being able to compound more or less that way absolutely Anthony if you want to get into the position that I am that you've been day trading for you know 20 years and you've had a good journey it's you know this has been fun there's been stress along the way but you know if you're going to be in the top one percent of income earners in America those people for the most part are you know are in stressful jobs too but you need to make it as least stressful as possible and if the goal is to be a successful day trader it's fun solving the puzzle I enjoy coming to you know to work every day and doing it so like slow and steady you know wins the race for me it's you know I'm not going to be number one in the Hall of Fame you know for you know for Traders but that's you know that's not my you know my my goal you want to develop your Edge you want to execute it you want to stay on your toes have consistency and make the job you know as least stressful as possible and and fun and you know take the money pay your taxes and go enjoy uh your life and do all those you know all those great things that are are out there one of my questions is how can other Traders out there build themselves a trading system you know what are some things that you would recommend for Traders um to help build themselves a system and what benefits would a trading system provide for the Trader who doesn't currently have one if you don't currently have one you need you need to stop trading right now the the that's that that's for sure you're not going to randomly go into the market and be your bankroll against Ken Griffin's bankroll at Citadel um and beat him you're not going to beat me you're going to win some hands but you're not going to beat me you're not going to be great Traders you're not going to beat Jim Simons over Renaissance who's got the great mathematicians you know in the world you're not going to beat these Superior players with Superior resources you the first thing like I have I've been doing this a long time so I have advice for new Traders I have advice for people that make money consistently and I have advice for probably an area that I have no expertise people way above me so my advice to a new Trader is if you don't have a trading system stop trading so like things things that I do like here's your homework project if you're a new Trader and and I'm dead serious I'm a I'm a Seasons trade I'm a seasoned Trader and these are notes handwritten notes and notes and notes and notes and then that's my speech from Traders for a cause I mean it took me hours and hours and hours to write that stuff these are these are my yellow pad notes that when I see something on Twitter that makes sense I write down if you're a new Trader here is your homework assignment if you want to get like good in this business take some time away from the screen and do yourself a homework project go to Twitter follow the 10 best Traders um that you think are are really good and you you better know who's good and who who's not good but you need to write you need to to do research like you if you really want to learn something that they say the best way to learn it is to teach it so if you want to learn about the trading system you need to Google trading system go to Yahoo go to Twitter and see all the different types of trading systems then you need to do a research report on execution how do I execute better then you need to do a research report on risk management okay so IBD says lose eight percent uh small cap short seller up here so and then do a research report on consistency so each one of those research reports should take you like maybe five to ten hours if you do a thorough job and write all this stuff down and then write a presentation like you're going to be giving a speech to a class you will learn so much from writing it down and it's going to stay in your head like if you just watch this video and you take no action zero benefit to you you just entertain yourself for a little bit you need to to actually write this stuff down and study it I I was watching this interview the other day with this uh with this kid uh Jason he's a small cap short seller he's like 25 years old um very impressive guy he's only been trading four years he seemed very very smart and then I started following him on Twitter and he posted this tweet and he's like oh this is a summary of now the guy uh the the Twitter guy is all day faders very very very very good Trader from what I've seen he's like oh I went back and read every single tweet that he's ever done and I made a summary of all these bullet points and I've seen people do that for Christian qualimagi I've seen people do that uh summarize other great Traders uh you know shadkin back in the day had some great you know great information out there aspects research who kind of open a lot of people's eyes 10 years ago you go back and you you read all this stuff so this guy he's like yeah he's like I summarized all this and this is part of the 109 pages that I've written um since I've been Trading so here's a guy who's written like 109 pages and and if if you're new in this business yeah you need screen time and so forth but you need to develop a system you need to learn how to execute it you need to have proper risk management and all those things are going to lead to consistency so spend some time away from the screen doing these homework projects and write this stuff down be able to teach it and and have it on the top of your head you know all the time because when you do this stuff and you do it religiously it becomes habit and then you read your notes all the time and when you read your notes you stay on your toes and every day like you're prepared for the stock market you let your guard down and Bam right I mean that's what happens in this business um to the intermediate Trader who's a profitable Trader uh the best advice to you and to the people above me is cut your trades in half by cut cut whatever your volume not your volume number of Trades cut your trades in half or at least buy a third so if you're doing 10 trades a day try to go down to five or go down to seven or go down to four and eliminate the B setups and just trade the a setups and then in those a setups double your size or triple your size so you'll trade less frequently um but you'll have less stress and you're probably gonna make a lot more money you know most of the people that I talk to I I don't think anyone ever says well gee if I just traded a lot more I'd be doing better no it's it's really the other way around you need to sit around and um uh not don't just do something sit there the opposite of don't just sit there do something is really how it works and to the guys that are way more successful than me um you know just that balance in your life uh you know make sure you work out hit the gym all basic stuff um travel go on trips spend a lot of time with your family you know coach some sports uh to the people that make more money than me there's a saying some people have no idea how to make money and some people don't know when to stop making money and when you're really successful at this monetary goals are all wonderful but balance in life like when you look back at your life and it's just a dollar sign it's going to be pretty Hollow so you know get away from the desk and do those things don't sit here it'll six seven eight o'clock at night all the time once in a while I get it but you know it it ain't worth it I mean the reason you make the money is so you can live the life that you want to live and not be uh um you know a slave to the screen so if you are fortunate enough to make it in this business take it from someone who's been sitting in the chair a long time you know don't you know coach your kids sports take your mom out to dinner you know be generous Karma be a good guy that's tremendous advice Scott thank you so much I appreciate that and I think it's really important that you really emphasize the importance of implementing change doing the work not just listening to interviews or talks and sort of forgetting what has been said but really taking the time to implement research and make changes to our own trading to the point that maybe for a beginning Trader that means stop trading for a little bit and really figure out what their trading system is so I think that's that's great advice and I I know you alluded to on your Traders For A Cause speech and so if it's okay with you I'd love to ask a few questions about that speech I know it was on consistency but it was an audience favorite it was one of my favorites from that weekend so I'd love to to ask some questions if that's okay I'd love to do that I spent a lot of time on that speech I'm happy to uh to talk about it great so one of the metaphors that you used was about whether or not to bring your offense or your defense out onto the field for that particular trading Day based on whether or not you're seeing a four-star setup or a five-star setup can you maybe talk about that and how that might fit into somebody's trading system sure um I of all the things that I talked about that day I I do feel that that's probably like one of the most important topics and like when you when you have a trading system you you need to be able to you know stick with it and execute it and these analogies and metaphors that I talked about are things that are easier to remember than just okay stick with your trading system it just it just helps you so offense and defense is is is huge in this business you know offense sells the tickets defense wins the ball games your job is to extract money from the stock market and to keep it and to keep it um people find that a very difficult thing to do everybody can put up winners um but you know avoiding losers knowing when to trade when not to trade um that's a huge thing and especially uh if you traded in 2020 in 2021 I bet you 2022 for the most part 90 of your listeners uh was not nearly as kind because you use the same recipe um that used in 2021 and 2022 and you probably had much worse results so offense and defense um my scanner lights up in the morning I take the temperature of the market there's my five minute scanner box going crazy uh and there's a lot of activity and animal spirits are really really high or is the five minute box kind of quiet news is kind of quiet economic uh not a lot of economic numbers out um it's a slow it's looking slow so when I'm looking at that scanner box in the morning and let's say I've had a multi-day runner in today's day three of a gap up for a really hot stock and it's in the Box um or conversely it's a we've had two bad days in the market and it's a gap down um my five-star setup after something's gone up like three days or or gone down for three days is present and I see it and I'm going to attack that trade on the open um and I want to hit that with full force that's my five star setup I like that setup and I'm going to attack it if I don't see my five star setup um going to send my defense on the field I don't have I I see things that look like C setups and B setups and I'm going to wait and see if those C setups and B setups develop into a setups and if they don't I'm not going to trade them because I've set certain standards for myself and I'm not gonna I'm not going to lower my standards um on a consistent basis because that's creating bad habits I really only want to focus on the a setup so when I come in the trade should be staring me in the face that I'm going to do if I can't find the trade I'm sitting back in my chair and I'm letting the trade find me I'm going to sit here and I'm going to do nothing but observe the market is going to show its hand and reveal more information throughout the day maybe there's enough information for me to get interested then there's bids and offers to place and hopefully I get hit on my beds or taken on my offers but offense and defense taking the temperature of the market subtle changes happen all the time and those subtle changes start out slow and then they turn on turned into like really really big things like when the market topped in March of when Bill Wang blew up in March of 2020 one um the whole character of the market changed and I could I could see it in my boxes um some of that's through experiences but I had to realize that I need to start adjusting the way I trade so you can't come into the market every day and say I want to make money and say I'm going to you know set my offense out to the field I'm gonna Force something that's not there you want to be consistent you want to make money you need to trade your a plus setups and if they're not there you better you know better sit still thank you I think that's really important especially in 2023 where we're starting to see maybe a little bit of change based on what we saw in 2022 it's only been about you know 10 trading days so far but I think it's an important uh thing for Traders to think about yeah just to expand on that a little bit it's the January 14th we just finished the second trading week of the year and animal spirits are are back I I send a short request to my broker every morning with a with a list of stocks looking to get some borrows that I don't have to pay for and every day I add to this list and then the list becomes so freaking long that every couple of months I have to uh delete it and what I do is I sit in front of my computer I pull up the chart and it's like what's the chance I'm going to be trading this and I I delete it and or I I slim the list down so I did this like just last week and I had just like 200 stocks on there and so many of the stocks that were 7 8 10 12 15 20 are now down to the buck 50 cents 10 cents I mean some of them are just known Perma scams but there's so many blown up charts that I think there's going to be activity here in the and the part of the of the new year uh what the what the large cap Market does you know I I have I have my ideas but I don't I don't trade my ideas I just trade setups setups are something that is a pattern that I recognize and um I trade them I don't I don't really trade my my macro opinions about the market they're consistently um wrong and uh that's not trading a system I trade a system uh so yeah activities uh um definitely uh picked up um there was a lot of money to be made and a lot of money to be lost in the first two weeks depending on if you which side of it uh you were on absolutely and one of the other topics that you uh spoke about was about the importance of taking losses particularly small losses can you talk a little bit about the importance of taking those small losses for you and your training system uh sure in my speech in uh Traders for a cause I I referred to a a speech that Phil goticker um had given a couple of years before and uh I call it the paper cut speech and Bill gave the speech uh Phil's for those of you that don't know him um go watch every single thing that he's ever put out on YouTube uh at Traders for a Cause uh and let's just uh give Traders for a cause and project impact a quick moment here I've been a Trader for a cause I think six or seven years the years the one or two years I couldn't go I paid for it and I watched it and I watched the videos there's so much valuable information on there um if you want to watch my speech this year or Brian Lee speech or all these other great speeches and all the years packed uh past sign up for project impact I think it's like 300 bucks that's for the year it's a ton of content um really good stuff and you can see Phil's pay-per-cut speech so there's a Traders For A Cause project impact uh I love love being involved in that and I encourage everyone to get involved the relationships that you make there are just uh Priceless and it's a great time um everybody gets something out of it uh I got to meet you Anthony yeah right yep absolutely so small losses uh paper cuts so Phil gave the speech and he's like I get in something if I'm not right right away I take a paper cut and I if I then I try it again if I'm not right I take a paper cut a paper cut a paper cut and I kept saying to myself like this really really really makes a lot of sense and I called it the paper cut speech and that's what I think about so in my speech it Traders for a cause I said paper cut paper cut paper cut paper cut paper cut and I think I said it like 10 times in a row this is as dumb as this sounds every morning when you sit at your desk before the Market opens if you say to yourself paper cup paper cut paper cut paper cut paper cut cut your losses small cut your losses small if you say that it'll be on the Forefront of your mind every day just like you take a vitamin or just you know whatever part of your morning routine it is we're all going to lose in this business and uh if you take the big losses or you don't have a good trading system you're eventually going to be out of the business uh but if you take a ton of paper cuts you ain't going to die if you lose a limb you're going to die um the paper cut speech say to yourself every morning say it five times paper cup paper cut paper cut paper cut it works thanks Scott and I just want to underscore the importance of Traders for a cause and the philanthropic goals that they set also for those who are interested in watching Phil goticker's Traders For A Cause speech and other content you can go to impact.traders for a cause.org and find lots of content that will be helpful for your Trading Scott one of the other metaphors that you used was about horse racing and I'm wondering if you can talk a little bit about how horse racing has an impact and is applicable for trading uh yeah so I was you know trying to think of all these different metaphors and analogies because like these are the things that stick in your mind um versus just statistics and when I was thinking about what are some of the great ones to use like horses came to my mind because it really deals with like the crowds and distractions like when you go to a horse track the the horse has a covering on its face and it's called blinders or blinkers or even when you go on a horse-drawn carriage ride and you're on vacation that horse has the covering on it why does the horse wear you know that covering and it's the horse has a job to do and the horse gets distracted by the crowds when it has that hood on it keeps it focused and it keeps it staying in the lane the horse is going to run its best race when it's not being distracted by the crowd the horse is going to pull the carriage and not go chase a raccoon or a squirrel or or or something else it has less chance of getting distracted which is very important because you're in the back of the carriage um and and doing something crazy so horses in order to run your best race you can have distractions like I have my office it's my Nest I'm comfortable here I have my chair that I love my monitors that I like my keyboard uh the right sounds the right lighting and and so forth you don't want distractions and and this is a good time to bring up uh chat rooms so good Trading is staying focused on staying in your lane know what you're good at and do it when I'm a member of investors underground I've been in there for I don't know seven eight nine years absolutely love it it's Pro uh my opinion it's the best on the street the technology tools um that they keep adding or are unbelievable and there's a lot of great traders in there to form relationships on and it's a fastest news service on the on the street and so forth so those are all the the good things right but what are the bad things the bad things are the good trading is like emotionless and every day in like the the trading room someone's like you know sick awesome unbelievable um things that like generate emotion fomo fear of missing out oh I gotta do the next trade that this guy does um you see things you know in there that are counterproductive to you staying focused so you have to under you have to know how to use a chat room you know to your benefit um that's like very very important like any of the chat room creates emotion or fomo or you know you should be pulling the bits and pieces of it out that are helpful you know to you um it's not just about copying you know all kinds of all kinds of Trades it's uh it's it's a resource but it's not the end-all you know deal so you know that's what I think about with horse racing is is you don't want to be distracted by the crowds and when you're in a chat room you can be distracted by the crowds when you're on Twitter um you can be distracted by the crowd so you know I came across something the other day and I was like kind of bummed out about it this this guy who I I know and I like a lot he he was describing his trade and he was talking about he was short the stock and he realized that he was he was he was wrong so he got along the stock and made his his money back and had a green day and he thought that was good you know I had a Green Day and I I think that's horrendous like you have a trading system and the system says that I'm going to be short or I'm going to be long and then if if it doesn't work you're you're wrong you're accepting the results of the training system but to flip your bias because you you lost money like that no one has that trading system that's made money so you did something stupid and you got rewarded for it and I thought this Trader was already passed like doing stuff like that like when I see stuff like that it's like um you um it might have worked that time but you're just creating a really bad habit for yourself and uh it you know bummed me out to you know to to see that that's an interesting point that you make about the blinders and some of the benefits that a chat room like investors underground can have because yeah Max does an excellent job with the technology and yet there's a personal responsibility element for the traders to implement their system and to not get carried away by what they see to the left or to the right very much like horse racing so I think that's that's tremendously helpful and um one of the other questions that I had for you Scott or rather one of the the metaphors that that I thought was uh really interesting was about poker and some of the advantages that um Traders have compared to maybe a poker player first off I think the similarities between poker and trading are uh they have quite a few similarities um knowing went to bed heavy knowing when to pull back knowing the environment you know that you're you're in am I playing against you know a bunch of Pros today or am I playing against a bunch of kids that are here on spring break whose parents gave them money and they only have five hours to be here and they're going to be doing some stupid and I'm just gonna wait for them to make their mistakes um but the one analogy with poker uh that I use like when you enter a poker tournament or you sit at a poker table um the similarity between that and trading is if you lose all your chips you're done right you lose all your money you're out of the game and you don't want to have that you don't want to have that happen so in poker you have you know an ante you have to play this hand you have to put your money in the pot and you can't always you're forced to play that hand well in the stock market that doesn't happen to you you don't have to put an ante in you don't have to put money into a trade that isn't an A plus trade that isn't you know let's say on your on your auntie hand you got a you know a a five six well it's like okay I'm you know I want to see the flaw but in the in the stock market you don't have to play that hand could it win yeah but you don't you don't have to play that hand so I think it's really important that you recognize you have an advantage that the advantage is to be able to sit there and do nothing and hold on to all your Capital until you see somebody making a mistake or you feel that you have a big advantage and that's like one of the things that people I I think really make a big mistake with in trading is they think that they're at the poker table they have to play I I mean I sit at my desk you know sometimes from six in the morning till four in the afternoon and I place a bunch of orders nothing gets taken and I go home and I did no trades but I executed what my strategy is I kept my standards this is my discipline this is what brings me to the promised land and you know you look on Twitter and some guy posted a huge winner in something and so forth um there's a term unfuck-withable by Joseph Burns and it's like you're at a peaceful place in life um and just nobody I know what I'm good at nobody can mess with me I don't have Envy um I you know make good decisions uh I'm I've set standards for myself um I'm happy to see people do well um I'm thrilled that all the young kids are coming into the business and and doing well there's so much to learn from these young kids um I when I see him make a mistake I want to say something uh but you know we're all going to learn the same uh the same lessons eventually the more the market gods are gonna you know gonna teach you your lesson whether it's now or in six months or six years it's you know the Market's gonna humble you yeah thanks I think that's a really important point to drive home which is we don't have to take a trade it's okay to sit on our hands watch something and like you had mentioned previously when a setup comes to you and it's one of your your playbook trades something that you're familiar with then maybe that's the time to take the trade my superpower in trading is to be able to sit in this chair all day long and not place a trade and and not feel bad about it like my job I'm playing defense my I just made a bunch of money and I'm not going to give it back on some subpar um trade like my job is to put points up on the scoreboard I'm not going to score every time I you know I get the ball given to me but at the end of the week at the end of the month at the end of the year if I stuck to my discipline um I'm going to put a lot of points on the scoreboard and I'm going to make I'm going to make a lot of money but you but that you know you got to be comfortable you know uh you know in your own skin you got to be honest you know with yourself this is this is a counter-intuitive thing that it takes to be a winner in the stock market cutting cutting your losses um it's not easy to sit here and do it try to sit here if you've never done it try to sit in your chair all day and just you know observe if there's nothing A plus there and don't worry about not making money if you trade less frequently and trade only your a plus setups are going to make so much more money um but some people are just addicts they need to trade all day you know I'll take a five thousand ten thousand share position and something and the guy's sitting across from me will be in you know uh 300 of this and 300 of that and 300 of this and he's staying busy all day you you miss you missed the big trades when you you know when you do that thank you and that's definitely one of those perspectives that a consistently profitable Trader who's been doing this for many years can provide for for Traders out there or to underscore for some of the Traders who've been trading for a while that maybe just need to hear it again and you mentioned one of the biggest losses if not the biggest loss that you had in your trading career back in 2018 with the vix and the vix apocalypse can you talk a little bit about the impact that had on you and how you bounced back from that uh sure and um well while we're on that uh subject we can talk a little bit about um big uh losses um and and how they happen so in uh in 2018 I I I I don't like I mentioned the interview I don't trade after hours um the Monday after the Super Bowl uh the vix apocalypse happened the the vix exploded that day intraday uh I made it was my best trading day and probably um a couple of years uh had like a six figure day that day um hadn't had one in a while and I decided uh that the vix was really high and uh I decided to stick around after hours to see what was going to happen and one of the instruments uh that you can express uh either you can short an instrument or go long an instrument to express a trait in the in the vix and one of the instruments seemed to be mispriced after hours uh I got involved in it um I bought 10 000 shares at 60. uh and when I walked out of here at eight o'clock at night when trading had stopped I had it was at six I had sold it at 20. I had lost over four hundred thousand dollars [Music] um and it was by far the largest loss that I ever had um taken in my career um so let's talk about like losing and and drawdowns and so forth when when you suffer a massive loss there's like three things that could lead to it one is if you have a trading system and your trading system's no good and you lost a bunch of money in a row and you're in a big drawdown number two is you have no rules in place for anything um for a Max loss for a loss on a trade for what percentage your brokerage account you're willing to lose you're just flying by the seat of your payments you have no rules number three is you have rules and you broke them so in my instance it was number three I don't trade after hours and I am trading a leverage instrument that's got a 100 page prospectus that some of the most sophisticated Traders I know had no idea that this thing revalues an nav at 4 30 um on that day and the new nav was like six and by the time you figured it out uh it was the stock the losses were already just so massive and a lot of smart people lost money in that trade so I broke a rule so I'm a very consistent Trader I have a set of rules um I do very good over time so how is it for me to come back from that probably not that bad um it took me eight months and 13 days it was the biggest drawdown in my career um I still made over 200 Grand that year um which I was very proud of but it was probably the greatest accomplishment of my trading career because it could have broke me and if you use a lot of Leverage or haven't over put too much of your account into one stock that would have taken you out of the game so um I see a lot of young guys here uh use crazy leverage they want to get rich so fast as opposed to Steady Eddy and that would have been an example you know my broker said there was you know two guys along with myself that you know been trading for 10 plus years uh whose accounts got incinerated gone they just got liquidated so if you're going to use leverage you know be careful um number two if you have no rules you better start making rules because you ain't gonna fly by the seat of your pants and get away with it and number three if you are going into a large drawdown because your system um isn't performing well you really really really have to cut down on your size now if you don't have a great trading system and you don't have rules I don't really think you can bounce back from something like that mentally it just might you um you might if you've lost too much of your account now you don't have the capital to make it back efficiently it could take a much much much longer time but in my particular instance I broke a rule and the trading Gods you know gave me the punishment and it was friggin severe no doubt about it but competence before confidence and I'm very competent at what I do so I have confidence to come in and make it back if you don't have consistency through a good trading system through a good set of rules you're not going to make it back so are you going to wait for it to happen or are you going to be proactive and put some rules in place and develop the things that we talk about thank you so much Scott for being open about that particular trade I know it's not something that anybody necessarily wants to talk about but I think there's a lot of benefits for Traders out there who are listening and also it shows the importance which you've spoke about of having a trading system and sticking to your rules and being consistent I'm happy to hear that you bounced back and had a great year that that year it wasn't a great year but it it but it was the most meaningful um year of my life trading what I learned I mean in 2020 and 2021 I made you know really really really good money um and that was well and good but I practiced for that through all the tough years and I got to reap the fruits of you know my labor of the tough times during the good times I was I was ready for it so those years were were great but bouncing back you know again adversity is your opportunity to prove yourself and um that was a great accomplishment uh for me and it wasn't instant it you know it took eight months I put myself in the doghouse for a long time and and rightfully so I mean you're gonna break rules um the punishment can be pretty severe and one of the things you also mentioned I believe in your Traders For A Cause speech was a quote from Mark Douglas which is the consistency that you seek is in your mind not in the markets and I was wondering if you can expand on that a little bit and let us know what is that quote mean to you so for my style of trading like uh I'm an intraday Trader and I'm just as happy to go long as I am to go short I prefer to be short but um I like going long too when things are diving down if Divergence is there I'm you know probably getting involved um so I can I I just like volatility so if the Market's going uh you know really volatile it's it's great for me but if it's Steady Eddy it's fewer pitches to to swing at but I still have a a trade I still have a trading system I am not relying on the market to see if I can um I need the Mark I don't need the market to cooperate with me to make money it's just a matter of how much money I'm going to make if the Market's cooperating with my type of system um with my volatility my expertise I'm probably going to make a lot of money I'm going to lose too um that's all part of it but my 20-year history says during the volatile times you're going to make more during the slower times I'm going to make less but the consistency that I'm producing isn't because I need the market to cooperate with me there's I I've seen guys on Twitter for the last two years or like like uh psychiatrist and like oh stay out of the market if it's if it's you know if it if it's not your style um you can adapt if you learned one style you can learn another style you can add something to your playbook if you've never mastered one thing or got good at one thing or became profitable at one thing then you don't want to spread yourself too thin and you know be a jack of all trades and master of none because that's not going to get you anywhere in the market you got to be a specialist but consistency comes from repeating repeating repeating process over and over again it's just not to me it's not a matter of if it's just a matter of how much so don't fill your head with you know I can't do this I gotta wait for things to get better you it's a good time to be practicing your craft with just you know smaller amounts of money and trying you know trying new things so if you're the guy that needs the market to cooperate with him 100 of the time uh you better you better make a lot a lot of money when it's really good and you better save a lot of it because if we go through a dry period of a year or two years three years four years five years we could have a decade of no returns it's not out of the it's not out of the question go ask you know Japan it's it it could happen I mean we have to unwind this whole QE zero interest rate things no one knows the answer we haven't been here before it could be you know slow for a while with pockets of of heating up so consistency isn't about the market cooperating it's about um pure habits one of the the questions I have sort of on this topic you know retrospectively looking back you've been trading for over 20 years now Scott and so what if anything um would you say is maybe something you would have done differently or dare I even say the word regret that you might have uh in trading uh well thanks for asking that um uh I'm uh I'd like to consider myself like you know authentic um I wear it on my sleeve I got no reason to lie or hide or or anything like that so I I will just answer that honestly unfortunately my um my uh my answer isn't one that bothers me too much but it it is one that I I think about from time to time I mean the worst thing would be like oh if you didn't spend kids with your family or you wrecked your marriage um uh or you let your health get really bad my biggest regret is I have been if there was like a a trading Hall of Fame for like day Traders I probably would could get into the trading Hall of Fame but I wouldn't be in the upper upper echelon of the trading Hall of Fame you know guys that have taken 50 000 to 5 million and then five million to 50 million and then to 100 million I have been successful at this every year that I have done this I've I've never made under six figures in all of my my 20 years doing this but the one thing that I never did is I never I had people offer me outside capital I didn't want to take it because I didn't want a boss I didn't want to answer to anybody um I never pushed myself and truly tried to compound my account and get really really wealthy and I wonder if I had done that um instead of being conservatively growing my account how good or how big I could be um and and that sometimes you know is on the back of my mind um that I just never pushed the the pedal to the metal and if you're new in this business and you don't have consistency it's outrageous to even think of doing that you should be protecting your Capital under all circumstances but once you're like a consistently proven Trader um I never scaled up to the level I I don't use a fraction of the money that I have in my account to trade on an intraday basis unless something is super super juicy um I rarely rarely ever even go on margin um so I just never pushed myself to the limits I'm sure if I was at a trading firm they would have encouraged me to do that but I always have once I made it and got comfortable you get to you know a hundred thousand in the bank uh you know uh 500 000 a million dollars you have a seven figure trading account once you do that like you don't want to rule you don't want to run the risk of Ruin and I just always conservative enough that I don't want to go back to being poor uh poor like when I grew up figuratively speaking um I didn't want to risk what I had made and if I made a lot more money I'm not sure I would have been any happier because I all the money problems I have in life I can solve with what I have but I I um I I never really pushed myself uh you know to that level so if that's my biggest regret uh you know I can I can live with that well thank you for answering that and answering it honestly and I appreciate that you prefaced it by saying you're doing fine now you know you're not struggling but it's just one of those intangibles that sometimes we just could never answer because you can't turn back time and and so it's it's always kind of an interesting thing uh to think about so thank you I could start now pushing it but that wouldn't be so wise that at my age absolutely it it seems like you're doing fine now and um yeah if it's okay with you Scott I would love to be able to go through sort of a lightning round set of questions if that's okay with you uh sure great my first question is what's the best piece of advice that you've ever been given from another Trader stay on your toes you can't let your guard down um stay humble uh don't think that you're the greatest the market market is going to Humble you um and and lastly I would say it's it's keep an open mind the the market is forever changing you don't have all the answers someone's always doing it better than you uh you're never too old to learn to change things um that I would say those three things and do you tend to learn more from a big loss or a big win definitely more from the loss but but they're both you know super super important you know the my all of my my big wins like those stories aren't like to me that great my big losses are the the scars that I I wear and my soul and brain and you know keep me out of trouble going forward um all successful you know Traders have the it's a rite of passage you know almost it's it's almost impossible to to be really successful and not have suffered some you know major um setbacks in trading but that those are the ones that you really learn from so um pain provides wisdom uh and if it's hard to have wisdom and uh without experiencing pain so I would say the losses and is there one area of your trading where you'd like to improve yeah I said this at uh Traders for a cause my risk management for the most part just sucks it's not that great it's amazing how successful I've been at training and how good my consistency is but um I have an issue uh to this day I still don't have a Max loss um you know I don't I I don't use leverage uh so when I do get caught in the vix apocalypses of the world years ago um very very very painful but um adversity is your opportunity to prove yourself and every time I make a mistake I I want to prove to myself that I can you know that I can get better um but my risk management needs to uh improve and it's a work in progress still 20 20 years later I recently um called Brian Lee and Brian was nice enough to talk to me for like an hour and a half um and he gave me some suggestions about things to think about um my son works at a prop firm and I talk to the risk manager there I'm a very successful Trader and here I am going to people asking for advice in my areas of weakness and it just goes back to like you know being humble but my risk management needs to improve um you don't want to say stat you don't want to say like um static and uh in this business you always want to be evolving and my last question Scott is for those listening who would like to learn more about you your trading system or would like to get a hold of you what's the best way for them to do so um well I'm on Twitter but I don't interact on Twitter if I see something I like I might make a comment but I don't start conversations because uh um Twitter I just if I'm going to get involved in something I'm going to give it my all um that's just kind of who I am and I don't like a lot of the stuff that I see on Twitter but it's probably one of my most valuable resources um I I just don't want to get I don't want to wrestle with the pig and get dirty uh um that's not it's beneath my standards uh that I've set for myself you know no upside a lot of downside um so on Twitter if you reach out to me um if it's something exceptional I might respond uh uh or I will also make a promise here if you're that new trade or existing Trader and you do that homework assignment and you write some five page papers and on on execution and consistency um and you show me you've done the work or you've done somebody's you've had their Twitter feed and you still have questions and you want you know a little coaching or a little advice if someone put in 10 20 30 hours of work before they ask you know a question um because to be a great Trader you got to solve puzzles and you got to be a problem solver because we're all going to have problems and we've got to figure out how to overcome them and so forth if if you take the time to do all that stuff that I that will change your trading career or at least vastly improve the chances of your trading career um I'd be happy to have a conversation with you an email exchange or or something like that um I did an interview uh last year with Alex B the story uh Alex a great guy and it was the first interview I ever did my way of kind of giving back it's on YouTube um it's pretty pretty well received a lot of the same things we talked about today but it mixes it up a little bit more uh I tell you to watch that video um go to Traders for a cause because I'll be there every year and come up to me and say hello um and if we you know Bond maybe will you know communicate um but if you put some work in and then you reach out to me um you might get a you know a little bit of a response and it's not because I I don't care I just don't have time to to do it I I'll give back in the masses with some advice via video is my effective way of doing it great well thank you so much Scott for being here and taking the time to speak with me today I think a lot of what you discussed today will be tremendously helpful for a lot of people out there so thank you had tip two year for what you do and uh uh may be happy healthy and Wealthy for your whole life if you liked this video don't forget to hit the like subscribe and notification Bell thanks for watching

Channel: Investors Underground

Views: 38,411

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Id: jh1c4qM0O30

Length: 90min 26sec (5426 seconds)

Published: Fri Feb 24 2023