Ep 13: Rob Booker: Veteran Trader Goes Transparent and Reveals Strategy

0:00 today I'm excited to introduce Rob Boer I wasn't always transparent I'm like I'm embarrassed that I didn't do it earlier 24 hours later on that Friday I was down $100,000 in unrealized losses that's 10 times worse than the largest draw down I'd had ever cuz if any of us could take back our worst five trades we'd have so much more money so the real question isn't can we make money trading it's can we Pro can we keep ourselves

0:28 from giving it back I document almost every single trade I took for a long long time and you can start to see characteristics they start looking exactly the same today I'm excited to introduce Rob Booker a season Trader industry veteran Mentor author Rob has panned influential books including the adventures of a currency Trader and the currency Traders handbook he's also the vice behind the Traders podcast and the trading book podcast today we're going to jump into his background his

0:57 thoughts on transparency as he's fairly recently new to kall and hopefully we'll dive into some charts at the end but first of all rob thank you so much for coming on I've seen you everywhere how are you I'm good I'm good I you know I umum kind of disappeared for a while like I kinfo was like the only way you could find me for a while I actually I don't sell anything anymore I don't even host any podcasts anymore I don't I

1:24 just kind of keep to myself and I've I've really enjoyed like hey can I get a link to your website and I just send them them the info I don't like you can just look at this I don't no but I absolutely love that about you I was when I was doing the research and I was looking into this because obviously you you trade all sorts you've trade Forex you've got a background in Forex you've been options small caps large caps and

1:44 when I first took in it Googled your name or searched your name on YouTube I saw like YouTube videos from like 15 years ago and I was like this this ha is different it looked like a completely different person he's not a Forex Trader is he's an he's an equities Trader who's this guy talking about Forex said but it was you I was like okay but I guess that leads us into the first question you've been trading 20 plus

2:06 years cross Forex options large caps small caps written books hosted 650 plus episodes of the TRS podcast but how did you get started in the whole game so I was so I went to law school in 1995 finished in 1998 I didn't want to practice law I practiced law for like 1 half of 10 minutes like literally went upstairs sat down at my desk I was like what am I this is terrible so I left and

2:34 that was in the middle of the dot boom and I was so f i was I went to law school in the San Francisco Bay area and my summer job I worked at Montgomery Securities when Netscape went public and I just I just caught the bug and so I started a company after law school that company failed the second company failed and then my business partner fled the country and I was like I you know what

2:56 I'm going to do I'm going to trade my way out of this Financial mess you're like like you know I can't even do that now like it's like if my back were against the wall I wouldn't be able to do that now it was just like worst possible and I just I started trading currency because it it it offered like 5001 leverage and this guy named Ron subber you can look him up he's on LinkedIn still he was the head of

3:22 correspondent clearing at beern and in San Francisco and I and I called him up because I had met him and he said whatever you do don't trade Forex don't trade currencies it's risky it's a scam it's like you could just and I all I did was like I heard none of his warnings and that's all I heard was leverage you know you can make a lot of money really fast and you can lose a lot of money really fast it's like all I

3:46 heard was none of the warnings and all of the potential so I started trading currency in the year 2000 that's when I started way back can I just ask you what was your best business idea oh yeah I love this I love this store I'm so glad you asked this question I actually was looking at this there's the way back machine on the internet where you can yeah yeah save the old the old internet yeah so what we did in the

4:12 late 90s was in the in the early days before anybody knew any better we set up these old dumpy broken down Windows 95 computers and we set up macros like literally like remembered keystrokes using programs and we cycled through monster.com and the job websites and every night we would we would download every resume posted to monster.com like every single one of them and it wasn't

4:43 even against their terms of service and then we would scrape job postings and then we launched websites where for $5 or $6 you could send your resume automatically to a bunch of employers and we were making like $70,000 month wow but we were spending $80,000 a month we were terrible business people like I was using you know the old thing like I was using a door as my desk and and we just R we we had our internet costs were

5:15 so high back then it was so expensive to have like highspeed internet and whatever else so we launched a bunch of those websites and all of them made money and all of them failed because we spent all of the money like we were terrible business people BR but yeah from here I would invest as that say often don't invest in an entrepreneur on his first idea it's better they try and let let him fail a couple of times and

5:39 get the second get the third that's true in the investment world too you see these the the guy that lost like9 billion in the natural gas trade up in Canada whatever the name of that firm was a or whatever that guy's managing money again John Merryweather after long-term Capital Management they gave him money again like I think fail they almost think like oh he he learned his lesson like he learned their lessons and they won't do this again it's really

6:05 weird it's true and I mean I think as long as you're as long as you're courageous enough to to enter the battlefield and and take and take the mistakes and take the roller coaster it's it's okay because you do learn as long as you do learn I mean if if you it's like if you it's like a hangover if you're drinking too much and you hung over if you're 40 and you're still having those crazy hangovers then H

6:25 you're not learning but it's okay to to make the mistake one or two times and and it's funny you bring that up because today's the day after St Patrick's Day and I don't I don't ever drink but there's an Irish bar downstairs and me and my friends went down there and after 11:14 p.m. I don't remember anything I'm glad I got back up home like H but you drink occasionally but but not only once in a while yeah I no but it's I I

6:52 used to do a lot more I've stop now because to to run a business or to do to do any kind of anything worthwhile it's better not do it is absolutely true yeah 100% one I was yeah I was introducing everybody to each other in the bar and they were like how do you know this I'm I'm like I just dragged them across the bar like I don't know this guy at all like I was having a great time but

7:12 it's good once in a while but in terms of H the million dooll question for me because it seems that like I I hear a lot of people saying now Forex is a scam it's all leverag it's it's x y and Zed you should go into microps and then people are saying now microps are a scam it's it's all mark at the market so you know you've been in in the industry this long is what's the advantage and disadvantage

7:34 of each yeah that's a really it's a great question so I haven't traded any currencies for a long time but so I got into it for the leverage and it still has a lot of Leverage so currencies were great back in the day where there was a lot of Leverage and I mean like the the mid 2000s it was great because there was a ton of Leverage and what I would do was and this just sounds so stupid and no one

8:00 believed me I even traveled the world in 2009 I went to like 32 cities but I would buy the pound Yen New Zealand Yen ay Yen I would buy those in one account and it refco or fxcm I loved drw ni from fxm he was so good to me and I would buy them there and those were high interest bearing and so every day that you hold those you would get paid interest and back then the interest rate

8:25 differential was 6% between 0% in Japan and 6% in the UK but you got a thousand to one leverage so you you could make 6,000 per a year if you bought pound Yen and just held it but what I did was I went to CMS Forex and I said if I open a thousand accounts for you because you know I had a podcast and whatever else if I open a thousand accounts for you will you give me a no interest account

8:52 and I promise I'll Margin Call it you can just B book it and they were like who what who are you what are you talking so so what I did was I would buy pounden Ken aen and then in CMS Forex I would short it and I wouldn't be charged interest in that account and so pound New Zealand all of them were just going straight up all of them were going straight up because the interest rate

9:14 differentials and that's the only game in in Forex is interest rate differentials and so they would all go up and so the accounts that were short those would Margin Call and they B booked it so they just took all the money they were just making my full account and then I would just re fund that account with the profits from the other one and all I was making was interest One account would Margin Call and then I'd hold the other position for

9:36 one more day and it would I'd get a little juice I'd get it Juiced up a bit and I did that for four years and at one point we were using spreadsheets and moving $6 million back and forth and I wasn't even trading I was there was no trading I wasn't a Trader I was literally just moving money back and forth be you know between accounts that was that was the greatest trick I ever did and only four other people I I

10:01 probably spoke to 2,000 people only four other people Don wolanin in Orange Connecticut he did it he put his girls through college with it and then like three other people and everybody said that is such a there's no way that's going to work and I think that just about every other thing I've ever tried in the world of currency with the exception of some Bots everything else just doesn't work because there's no Edge there's no way to there's no way to

10:26 trade the news there's no way to antici it's so so difficult because there's only 28 major currency Pairs and you can't evaluate each country like you evaluate a company there's no it it it's just it's all interest rates and it's all super long-term moves and everything in the middle was just noise it sounds to me that you've got that kind of entrepreneurial creative mindset where you just look in fall gaps in the market I remember there's a tra I

10:56 end while B called David hail I'm not sure if you're familiar with David it sounds familiar 20 plus year Trad and he would trade glitches in the market so he'd look for a market in efficiency and then just capitalize on it yeah the back in the day like in 2004 2005 refco Canada oh I don't know where all these 4ex firms came from back then but it was a wild west and refco Canada the dealing desk updated prices manually

11:24 like they would manually approve each new quote but when news came out they were delayed by 10 seconds and so you could actually just 10 seconds before the it was so stupid some of those things were just glitches like stupid things that shouldn't have worked one time my friend Nick Barker and I and I don't know where Nick is now we built a bot that would constantly request to trade outside of the spread so it would

11:49 try to buy at the bid and sell at the ask and so we sent a hundred orders every minute and then we sent a thousand orders every minute and then we sent two ,000 orders every minute until we were sending like 10,000 orders a minute and we were trading at inbank FX and one we like we take $2,000 and run it to 30 run it to 30 run it to 50 run it to 60 and then one day we sent 20,000 orders a

12:16 minute and we shut the whole the whole thing went down went down for two days and two years later I went in and I became the chief Market strategist the TV guy for interbank effort ohow nice Todd crosland bless his toll he goes so what was your first experience with interbank FX and I made the decision to go ahead and tell the whole management team the story and they were like yeah we were down for two days that was not

12:41 I'm like well but that's what I did I would find these like inefficiencies or glitches or whatever and that was great and Todd crin of interbank FX was one of the greatest entrepreneurs of all time the other thing when we were there at inbank FX The tra this is okay this is one of the best things I ever learned about retail Traders at inbank FX you could see if the the book was 51% long the Euro for example so you could see if

13:07 retail Traders were net long or net short Euro Yen or whatever and what we found is that typically they were right at the close at the New York close if the book was long Euros they were right actually over the next 24 hours the Euro would would 90% of the time or more would would end the next day higher the problem with for retail Traders was they traded so big they would stop out before they got the benefit of the move and we

13:36 we tried to launch an an a fund we tried to launch a fund that Traders could invest in and it would trade the book and so we so instead of us trading the book which would be I think a little bit problematic we said let's offer it as a product everybody thought retail Traders were so bad then no one would no one would do that and it was like the most obvious and I bet it's still true I bet

14:01 on mass I bet retail Traders actually pick Direction correctly they trade so big they can't survive the move that goes against them yeah that makes that makes a whole lot of sense because the retail Traders are trying to pin a little bit amount of money into a big amount of money and it it means taking too much risk but so your background is in marketing or some of your background is in marketing and advertising just my

14:24 background creative is yeah I mean my friend Bor ber he's an fx Trader I don't know if you've ever talked to Boris but he's in New York City he's been a friend of mine since the very beginning of Forex he and Kathy lean built daily FX the first website and ashro lah and Kathy and we were friends from the very beginning and Boris used to say while I was studying the markets you were studying marketing and I said to Boris I

14:50 said you know what exploitive exploitive I was doing both I was doing both and yeah I mean I yeah I spent a lot of time I read Seth Golden's books I read I mean some of those had a really big influence on me a huge influence and I did yeah so I was building a business in the podcast and I did I loved marketing I did love it I don't love it anymore but I did a lot h

15:14 no it's it's it's been my passion for I've done it for the last 10 plus years and and all and all like in different places in the world as well but going back to trading so you were originally initially in in FX and how did you get into small caps large caps options I believe you I do yeah so in 2011 or 2012 whatever the Dodd Frank legislation when that came through it became illegal to hold for a US citizen

15:40 to hold an account overseas so all of these foreign Brokers that had thousand to one 500 to1 leverage they all disappeared like we all got our accounts closed and there was no more there was no more Edge because leverage was the edge leverage plus interest rates was the edge you could trade interest rate differentials all day long but you had to do it with leverage because 6% a year isn't appealing and you you could no longer hedge it because

16:05 you couldn't put the money overseas so I went through like the Valley of the shadow of death like there was a three or four year period where I couldn't figure out what to trade or how to do it and I went to options I drove out here to Austin Texas and interviewed John Carter after he took his first million he made a million dollars in a day trading Tesla and I came out and none of it made any sense I couldn't tell a from

16:27 a call from a hole in the ground yeah and then I so then I got into trading some options I got into trading like buying the top stock of the day like the runner yeah I was never good at buying stocks I'm still not good at buying stocks I'm terrible at I'm terrible at buying stocks and then in 20120 and 21 I had sold the podcast in the YouTube channel and I was doing some Consulting and work with Tim Sykes and I just

16:55 love Tim to death and I looked through a list of people and I looked through the like the top traders in the syes family and I was like these are all short sellers these are all like Jack and Kyle and all these people are short Sellers and I like well I'm skeptical I like sort of like finding the glitch and these guys are really murdering it these guys are killing it and that was like my that's when I really that was the it

17:25 probably went through eight years of back and forth and whatever else and then I started shorting in 2021 and then a lot in 2022 and that's almost like 90% of what I do is short selling now yeah it's it's when I look at has TR are you short selling micro cap stocks or it's a mix of small andar I'll do both I'm even starting to do large cap stocks after earnings money losing large cap companies that report better than

17:52 expected earnings and the stock Pops I will short that in after hours and hold till the next morning but yeah that's actually great for larger accounts because you can trade more size and it doesn't cost anything to borrow those overnight but yes I'll do a lot of micro caps to oh and the interesting thing it's like I think maybe it was like a secret in 2015 Short Selling these Mega C stocks it was Tim who was

18:14 the yeah the F the father of short sellon The Godfather of short sellon back in the day I remember and then I think somewhere along the line the secret got out too many people got shot H or B make us caught on and we get the crazy squeezes so it seems like long Traders have a much lower winning percentage but in its fer but to be a short you need a lot of good discipline and risk management which brings us on

18:38 your profit chart which has zero crazy when I look at your kin for profit chart I know you knew to K for I think it's up 300,000 or something so far there's no crazy downtrends what you attribute that to thank you by the way so I'm very interested in this topic because I hadn't thought about it until you brought it up and I I guess I'll answer you I'll give you the short answer but then I have a longer scary

19:05 story answer to that question that I want to I want to tell a story about a giant mistake that I made but I think number one I don't care number one I don't care I don't think of this I don't sell anything I don't care about my reputation I don't care about what people think of me so first of all I don't care so I'm not trying to do anything in particular number two I'm super over capitalized so I'm trading

19:31 position sizes that can withstand enormous moves against me like I could I can stay solvent longer than a micro cap can stay irrational to quote like I can stay I can stay solvent forever so now I don't really we'll get to this in a minute but then the third one is I trade so small that generally speaking nothing bad really ever happens to me so I'll I'll short and stock selection is a big key but I'm very strict on which

20:03 ones I'll short but I'll short something like say at $4 and it'll go to 12 and for some people from 4 to 12 is three margin calls like they they it would but to me that would be a draw down of maybe s% yeah I just don't even look at it I trade in the morning I don't look at it again I so it's this I think that's what does that's what it is for me is

20:29 I did take a lot of risk when I was growing $4,000 accounts into 30 I was just doing this over and over as practice and I kept doing it over and over and I was taking a lot of risk then because the accounts were smaller but then and so then I if we could follow up on that but three weeks ago I was in Mexico for a group therapy men's retreat with Dr Robert Glover the author of

20:53 No More Mr Nice Guy love this guy I've been a fan of his for a long time he invited me to come down to Mexico and I was reading this book about becoming a better man and I was going to throw the book in the trash I was angry and I was like I don't want to take responsibility for my own mistakes I'm like I just was having this moment and I I shorted mlgo and I hammered on it way

21:16 early 24 hours later on that Friday I was down $100,000 in unrealized losses and I was that's the worst that's 10 times worse than the largest draw down I'd had ever wow and I'm tell I was like and I and I said listen it made this mistake the old me old me would take the loss and then be down and out for a month or two months or just depressed and ashamed and whatever else and I I

21:47 said this doesn't happen very often and I took a deep breath and I just I just faced it head-on like I just went headon and it it it got worse before it got better but I just closed that three days ago for $29,000 gain it's the largest Short Selling gain I ever had but I went through that was the worst that was so bad on my part and it had nothing to do with stock selection and

22:14 nothing to do with anything except for trade size the the all you could almost short anything if you are over capitalized you and I just that was such a mess up for me me and but I had to like look stare in the face of death and look at it and for me that's huge I know Jack's probably I'm Tim grani right some of the old stories of Tim gratani being down $400,000 quitting for six months or I

22:43 think those stories I owe a lot to Tim gratani and the concept of the Lost Journal like I owe a lot to those people who you could see how stressful it was for them to go through those things and I just I don't want to go through that and it was horri like that those few days that I was in that trade and down all that money I was so embarrassed I was so ashamed I was that was rough that was really rough

23:08 but I mean where did you learn to shortell was there something specific or did you watch something or were you tracking stats or all right we'll just we just okay I would walk this is like all right I have so much respect I don't I don't have any a to grind with anybody and so I want be careful about how I phrase this because I don't think I'm that spe I don't think I'm that great and there's

23:33 so many other Traders on kinfield that are murdering it and I'm the least of all of them and and but what I'm about to say is gonna I don't want it to sound the way it sounds but I watched as people were trying to learn how to buy micro caps and how frustrated and disappointed and how unsuccessful they were that every day there's nine micro caps that jump and the next day eight out of those nine

24:02 are are back to where they started and I kept watching retail traders that had that smart people good people that have small accounts and they were taught like you can you can find the number one stock of the day and you can buy it and then you can and I couldn't do it and I couldn't I couldn't meet anybody who is a prim I'm I'm not going to say that it was hard for me to find somebody who

24:27 primarily day traded and bought stocks who published their track record but I found like Jack is trans I I think Jack is like a true American hero in the world of trading he's transparent he tells you about his ups and downs he's he's never shied away from showing you the worst thing he's ever done but he's made a significant amount of money from shorting and he does all kinds of stuff now and I'm not going to

24:51 call him a short seller but Kyle and Jack and Tim grani and those folks it was more the concept than anything else the concept was like I can't figure out how they're doing this but I do know that in the universe of day traders that publish their results the short sellers are murdering it yeah and so I spent I just spent a huge amount of time sort of reverse engineering what do what do and this is where I want to be careful

25:20 like what do people who teach people to buy stocks teach what are they teaching you to look for and clearly a lot of times it doesn't work work like a lot of times it jumps up for 5 minutes and then it spends the rest of the day dropping and everybody's holding the bag and so I said well what are the characteristics of those companies what what's the difference between the one company that keeps going up and the seven or eight or

25:42 nine every day that fall and are lower than what are the characteristics what are the differences between those companies and I just started taking notes and when we share my screen later I've logged almost every single short sale I've ever taken I've saved a chart and analysis and I saved everything I I documented the chart and marked it up for it's over 2,000 trades probably now and I learned a lot from and I still do it now if I don't have if I won't

26:09 document the trade I I won't take it I have to stop and chart it up and stuff that's going to be interesting this to to to to see but just kind of one one final by see that I'm just thinking before we ask a few questions about Kim for and we'll get into your charts and you're 20 years in in in the business for someone who does have so much capital for someone who is in a smaller

26:30 account but they still want to short sell so that's the edge do you have any kind of tips or advice for someone who can't hold is it a a trade smaller trade really small or what I love this question because so 200 23 all I did was start with four I don't know why 4,8 it was a weird but I would start with 4,000 or 4,800 and then I would run the account up and I did that

26:55 seven times so over and over and over and over over and over again I just kept doing that and then in February of last year 2024 I did a thing I said you can come for free to my office I don't have an office but I rented a conference room I said you can come for free if you want to come talk about shorting because I did this all last year and I finally like and I shared it and everybody

27:18 started with a small account in February and all of us traded the same things in the same way as a really small there like 17 people in the group Jake Hartman who I think he may start posting there and a bunch of others and here's what we decided if you have a smaller account and you want a short or long like it doesn't matter which it is because it's not really that different you have to understand that as a

27:41 percentage of your account you are going to experience percentage draw Downs that are higher than when you have a $30,000 account or aund you're just going to have to accept that it's it's scarier to trade a small account because you can't get anywhere otherwise and also if you short 10 shares your overnight borrowing costs and your stock borrowing costs outstrip all of your profits you have to trade at least 100 shares and if you have a small

28:07 account a 100 shares can you could be down $500 overnight and you have to hold them overnight because your account's small and your pattern day trader it's like there's all these problems with it and what that did for us was we zeroed in on stock selection so if you're going to trade stocks buying or selling and day trading and you have a pattern day trader account in the US you have to figure out what are the criteria for

28:29 stock selection for a buyer for example no threat of dilution has 40 or more months of cash left as a company you have to learn how to analyze this stuff and has a high percentage of institutional investors you could find all this on Yahoo and stuff those stocks are the ones that tend to run and so if I were going to buy stocks I would only trade those ones and I would hold them overnight in every situation so I could

28:56 take as many trades as I wanted every week we and if I were shorting it would be the the reverse of that and I would have to hold them overnight and I would have to be great at stock selection and I would have to have a high win percentage because when things go wrong you don't want to give back like four weeks of profit just on one bad trade and and that is the that is the struggle

29:17 but you get really really good if you force yourself to trade a small account hold everything overnight and concentrate on stock selection and you stop taking crappy you know stocks and you stop all of that other Madness and you just focus on what is what are the characteristics of the stocks that will run and it's not technicals it's usually it's something fundamental about how much cash that company has left or they they have FDA approval to Market

29:45 something for the first time plus they have 40 months of cash left plus they have a high number of percentage of institutional investors those companies will run every other one of them will not run for the rest of the day they will not go and and the conv yeah I think having a small account if you're open to taking the risk and you're willing to hold overnight and you're willing to document every single trade you take and you have you you public you

30:08 publish your results you transparently publish everything that you do so there's no secret trade and you can't take us one on the side and lose a by like you have to be willing to like open yourself up to criticism and and face the music because most of us hide our losses and we're ashamed of it like you have to be willing to open up about that stuff and there's so much that comes from that but those are all things that

30:33 are very difficult to do so yeah so quality over quantity and and transparency yes yeah on the subject of transparency you're a transparent Traer I think it's from is it from February last year is it about one one year you've been transparent now is it yeah I think it's either January of last year or December of 2023 somewhere in there somewhere around there yeah probably February so yeah so the big question is why now it's funny you say this so I don't

31:05 sell anything anymore I sold a lot of stuff I worked with Agora I worked with Tim syes I loved him I love like I I've worked with a bunch of people but last year like when you when someone sells stuff in the world of trading God bless all of and I did it every Do It I wasn't always transparent and I and I honestly thought like if I'm transparent and I show my mistakes people will be less likely to

31:35 buy from me or whatever there and last year in February when I just sort of let it all like go and I don't want to sell anything anymore and I don't want to I don't want to do that anymore it's weird that at the point where I didn't have anything to sell anybody anymore I thought I should have been doing this all along I should have been showing this all along because I learned so much from I I still do it I go to kinel

32:01 and I look at what the top people on the leaderboard are trading and I look at what they did and how long they held the position and how many shares they traded and I look at their entry and then I go to a chart and I say wow they traded 40,000 shares and it went two more dollars against them or whatever and I learned so much from that and I thought well I don't everything that I do now is

32:21 free I'm going to open up my trading results and my trade journal and my I'm just going to open it up and I'm I'm like I'm embarrassed that I didn't do it earlier Tim sites was on I heard Tim talk about it for a long long time and I never took him I never I'm embarrassed I didn't do that sooner he he led the way on transparency for a long time but yeah I know he he's had

32:44 he's ran profitly for for many many many years now 10 probably 20 years now but I mean in terms of so for example if someone is teaching trading would you say it's almost an obligation that you should that's like 15 years ago 10 years ago faren off I think you shouldn't there's no real way of showing your results the tech wasn't quite the except profitly you can show Broast statements but it's just a PDF kind of thing yeah

33:10 do you think it should be an obligation now if you're teaching you should verify your results in some real way or do you think I think yeah for me yes for me there's no question for me no question like there's people who teach and what do they say people who can't do it teach it and I I can't speak for other people and it's none of my business what other people do but for me when I started publishing the

33:39 results I realized that I had had an obligation that I didn't I would do webinars you could see my account all the time and I would send out my brokerage statements but for me I realized that it was an obligation for me and it's none of my business what other people do but and I want that's why I want to be careful about it because I could very easily say something like if you're not actually trading you have no business teaching

34:03 people how to do it but I don't know if that's true I don't know if that's true and that's just very convenient for me to say now that I actually do publish the results so yeah I think it's like if I were well let's do this if I were going to hire somebody to teach me how to dress better and they looked like a slob I wouldn't do it if I were going to hire somebody to teach me how to do real

34:25 estate but they had no verif viable proof that they'd ever done any real estate investing I would there's no way if I was going to hire somebody to do my taxes but there was no evidence that they'd ever even done their own taxes so for me I was like wait a minute so if I ever do teach anything again or charge for anything again which I never want to but I think it's an obligation for me for sure that's pretty

34:53 powerful statement coming from someone those 20 plus years in the business as well and and and the other the classic example is getting a personal trainer who's out of shape yeah right and it's already if you're selling stuff in the world of trading you already have the defense mechanisms are up the people that you're talking to are automatically suspicious if you can do it why are you teaching it if you can do it so well why are you charging for it

35:19 listen I don't have any problem people charging for their time this is America like America W capitalism one so I I don't have any acts to grind with people who sell stuff but I think it's fair for someone watching a webinar while someone's going this is the greatest thing that ever happened and it's the secret to selling options on AI like it's fair for a person watching that webinar to say show it show me what

35:50 you show me what you've that's fair that's fair to say and I don't know if the industry has an obligation to do that because it's a free country but certainly certainly it's hard to imagine like how if they can't do it why are they talking about it like why if you can't like that would be but I didn't do it like Stephen I showed I showed stuff I I was more transparent than I'm saying but I want to just knock

36:19 myself down a peg like for a long time I would show my account and show my statements but I didn't have them verified and and I think if you're not verifying your trades and you can you should I think it's just better you're a better Trader if you ver you're just better at it if you are public about it no absolutely and I think well there's there's two SES this kinding well we can't false every mentor to verify we can't encourage the

36:48 public to demand verification and that's course that's the other s of the kind and look for a mentor you could say look I'm I don't want the pressure of trading live every and then kall would say well did you know that you could just upload 2020 did you know that you just upload that year did you know you could just upload 2024 when it was done just show me one year show me one show me one year

37:07 of half a million and and that's okay Tim katani actually when he when he I bought a course of Tim gretan seems like a long time ago and it almost seemed like the whole course was here are some stories about these horrendous losses I had yeah and I found that to be so instructive and so helpful and if I were going to do a maybe I will do a public webinar and I'll talk about my big unrealized loss in mlgo and where I

37:39 got in wrong and how I made it worse for myself and what I would do the next time and how I dealt with the pressure of seeing a giant loss as it was going and didn't lose my and still faced it like that to me is more helpful than hearing someone go well you get it when the squiggly line crosses the other squiggly line and then it goes down to this squiggly line that doesn't help anybody it's what do I do when things go

38:06 wrong because if any of us could take back our worst five trades we'd have so much more money so the real question isn't can we make money trading it's can we pre can we keep ourselves from giving it back that's all you have to spend time on that's the only thing you need to spend time on is learning how to not give it all back it's 100% correct and that and look when when you are short

38:29 selling and your win rate is as high as 82% or 83% or n out of 10 stocks SP on the day it's not a case of how difficult it is to to trade it's a case of what do you do when it go when that one goes against you how do you handle it and that's the million dollar question and that's why a lot of Traders can make money but they can't make money long term cuz what do you do when you win win

38:49 win win win and then you don't know what to do when the one that one goes against you and it always will it they will all no you can cannot prevent you cannot prevent a bad experience from happening whether it's a mental error emotional trading a trade size error a mistake on your technicals or you fat finger it you we are going to have all I did was whiteboard on Sat Sunday morning I with my best friend we

39:15 whiteboard and I was like I'm ready to I want to I want to make a little bit more money every day because I was doing two sometimes 2,000 sometimes a thousand sometimes four but I wanted to do more and I said I can't figure out a way to talk about increasing my profits without setting trading goals that are going to get me in trouble and he said well why don't we do this why don't we make why don't we run through a bunch

39:39 of scenarios where your loss is huge why don't we run through a scenario where you're down $140,000 on a trade I'm like why are we doing this he goes because if you increase your trade size the profits will take care of themselves you just take profit at the same area as you always do and it's really not that big of a deal it's the loss that's that's that's where everything's going to get messed up and so we spent this time and

40:01 he said all right you're down 140,000 and the next higher level on your short is $3 away and that would be a $200,000 loss what are you going to do and we went through this scenario where I said oh okay I'm going to throw off some of the position size I'm going to dump it and then I'm going to put it back on later at a higher level and or and we went through these scenarios and I'm

40:24 like okay and then I'm going to call and I have this whole thing now because I in if I increase my trade size the the the money will take care of itself it's the days where it goes wrong that I have to be ready to see larger numbers than I've ever seen before and you're gonna see them no matter how hard you try Jack Kellogg's a perfect example he's so transparent I love that guy because he'll take a giant giant loss and he'll

40:48 admit it and he'll get upset and he'll talk about it and but everybody just focuses on his wins and God bless him he made a million dollars last month trade whatever it was God the guy so's such a baller but to me it's not because he made a million dollars in a month it's because he showed the losses that he makes that money because he's learned how to not be his Own Worst Enemy he got out of his own way and I think he did it

41:14 by being transparent Stephen like that's the thing he doesn't hide what he does and that's just like that's that's the gift that never stops giving yeah that's an interesting observation Jack's a bit of a Sly an American Prodigy but I was going to ask you who your favorite trailer is on kall I heard you live up to on the leaderboard but I'm not sure if it's already answered yeah I like to Kyle Williams I lik looking at what and

41:37 some of these we some of these guys some of these people have these weird names and then I look at their trades and it's all these options trades and I'm like is this the Matrix like what am I looking at I don't even know what those are doing so I do I like those ones I'm on the hunt for Traders who are day trading buying stock stocks and holding those stocks for less than 24 hours I'm

42:00 very intrigued by what they're doing so I I spend maybe 30 minutes a day on Kino and I go through the people on the leaderboard and looking for people that bought stocks and then I go to the chart and I see where they bought what was the max Excursion how far did it go against them how many shares were they trading and what does it appear what does it appear they were doing when they entered what time of day was it and then

42:24 I'll go to the company and then I built some things with AI where I upload their earnings releases and their 10ks and their 10 Q's whatever you know depending on what they have and I it will start analyzing it and I'll start analyzing like what are the characteristics of these companies so I have this database of people who took day trades and bought stocks here are all the symbols and and and then I put all of the collected Research into the

42:52 AI and I say what are the what are the common characteristics and it's 40 months or more of cash left on the Run way more than 20% institutional ownership a market cap over a 100 million like these are all just they're they're it's it's not like speculation this is all of them share at least those things and I'm like oh so if a stock Pops in the morning and it has those characteristics I might start buying

43:15 stocks Stephen I might like I might do something that I don't usually do that's very interesting thank you for sharing that do you want to go into some charts to wrap up yeah sure it take me a second in here to just get this all out this is my trade journal and I mean if we want to we could I don't know how many slides there are in this Google slid stick let's see 798 so there's

43:43 798 Short Selling trades that go way back I documented almost every single trade I took for a long long time and you could start to see characteristics they start looking EX actly the same they just they look they look like this over and over and over and over again and today I shorted and we we can go to the triart I'll whatever question I shorted VC when it

44:16 was like right up there I borrowed I actually ended up buying 10,000 shares and I shorted it it jumped up and hit the current monthly pivot up here dropped back fell below the volume weighted average price on a one minute chart and I shorted it and and I know that it has an Institutional ownership of 10% so that's lower than the threshold it is a market cap under 100 million you and I Stephen could buy this

44:41 company for 2.4 million I don't think we should but you and I could go money quickly so and I'll track the long-term chart and like to look at one of the questions I'd like to ask is does this stock tend to drop every single time it spikes and I I love to see that I love to see that and I never hold long enough so today I shorted 5,000 shorted 3,000 more and then I didn't even hold

45:11 it for this move all the way down here but they you know that's what you can ask me anything you want I don't want to interrupt you but no no it's fine it's fantastic to say do you have a a general so you've already kind of outlined your your fundamental fundamental criteria of what would be along and the opposite would be a short but in terms of your execution I looking for anything more than pivot Points or a certain percentage up before

45:34 you start short or is it just against resistance or I love to see a few things in particular it's it's you don't really see it here on the chart but this purple line here this is the current monthly pivot and I'm going to try to I always long I'm such a long- winded blow hard but I'll try to make this quick in 2009 2008 2009 a woman calls me on my cell phone and says hi my

46:05 name is whatever my husband Gary Fluker works for Julius bear on Wall Street and his birthday's coming up and he listens to your podcast and I want to give him the gift of sending him to your office for a few days to trade with you as a birthday present I was like well that's nice of you to you know offer me as a birthday present whatever so Gary comes out and he pulls up his his Bloomberg on his laptop so we log into

46:30 Bloomberg and we download hundreds and hundreds and hundreds of thousands of days of data and we were we spent four days asking the question How likely is it that a stock will touch its monthly pivot point in the month that that pivot point is created and the numbers were 85% or higher and it that spun off a ton of research so what I like to do to answer your question is I like to see on

47:00 a short a stock jump up to and hit the underside of a current monthly pivot and go down stocks in a long-term downtrend will typically rise up to their pivot and then bounce off of it and fall stocks in uptrends will tend to go above their current monthly pivot bounce off of it and continue up so I'd like to see it either bounce off of the underside of the current monthly pivot or it I like to see it above that level and like to

47:27 use that current monthly pivot as a Target it's a it's just a magnet for price and the first time I ever started BR pulling this stuff up I was like shocked at how reliable pivots were V this is VZ I don't even remember why this is here but it jumped up to the underside of a pivot on this is a longer term chart and then it's falling all the way back down it will eventually fall all the way down to like this pivot

47:53 right here it will it will go there so if it has an upd for example it might jump up to the underside of this pivot I'll short it and I'll try to ride it all the way down to that level that we talked about over there so that's another thing that I'm doing and you can see here companies that lose money will jump up to the underside drop down they will jump up and drop down there's just

48:14 it's very consistent it's very reliable they've got to meet the fundamental characteristics first they've got to be a terrible company that's blah blah blah but as long as this criteria are satisfied it's it's pretty reliable no it's interesting to see that you're trading pivots because I think I I was probably learning to trade for a few years before I heard anyone talk about a pivot but it's the guys who've been trading the longest time generally use

48:38 them and that that must be a sign yeah there was a guy that came out to my office he retired from the floor in Chicago and he brought his jacket so I could see his refco jacket and he reached in the the pocket of his of his Trader coat and he pulled out this note and it had the daily weekly and monthly pivots on them and I was like why is that there he goes that's all we did we

49:04 would trade price we would trade it as price moved away from those pivots and then we'd trade back to them and as a market maker that pivot was like fair value for them during the day wow and it stuck in my mind that stuck in my mind and he said when he got off the floor he wanted to learn how to trade with pivots and I was like honestly I don't that was back I didn't even know a pivot from a

49:25 hole in the ground but now it's like a major major element of what I do for sure like when VC the last time I shorted it when it jumped up here you know what it was doing it was just reaching up for an old monthly pivot that had not yet been hit that's all it wanted to do it's all it needed to do so sometimes we ask as short sellers when is the move going to be over when will

49:48 this pain be over that helps me answer that question how was just the sector news and what you're shorting I I am I don't care about the news at all no I don't I I just don't care about the news there was there's one exception to that that happened over the last two months was at the beginning of every year I write down on a piece of paper what I think like the theme of the year is going to be and

50:19 this year was Chinese stocks recovering and Robotics and there was a there was a show in Las Vegas at CES or whatever about Robotics and Ai and that week these these money losing micro cap robotics companies were just flying high and I we stayed away from shorting those stocks that week so if there's a major theme going on you'll see like for a while there

50:50 last fall all the companies were like micro caps were like we're going to announce a coin we've created a meme coin or we're going to stop making disposable diapers we're now going to mine for Bitcoin that all these and we wouldn't short those ones because that was the hot topic of the day and the nice thing right now is there is no Hot Topic everybody's bearish which is bad because nothing's going up but so there isn't one of those

51:18 right now but occasionally there's a topic that hits when Co came around Co you wouldn't want to short a company that was working on a vaccine we're going to have a Time some time this year where companies working on bird flu vaccines micro caps and even micro caps that have a headquarters at a UPS store that don't make any money they're going to announce that they're working on a bird flu cure I won't short those ones

51:41 so that will become a theme and I W I won't get in the way of the mass like when when the popular Madness and delusions of crowds takes over I will get out of the way of those kinds of news events but otherwise I don't care about the news for people who haven't traded long though they might not know but there's been coins and then before that vaccines and before that EVS with the Tesla runup and the other electric

52:07 run-ups and then and then marijuana and then defense Whenever there was a Las Vegas shooting that you'd have police cameras there been all sorts of things over the years yeah and they avoids do you have a sense of like The Daily the daily patterns are you looking for the first R days the the Gap and spikers or just nope I don't I don't I'm embarrassed I still don't know what a first red day is like I'm

52:38 not I I don't know what that is I've heard it in doing well though you're up 300 Grand you're up 300 Grand since you've opened Kim for obviously you've made a lot more in the past beyond that but but you're up 300,000 shorten and it's it's just from studying the kin for charts Ling through the day analyzing what's going on based statistically yeah and running the probabilities basically yeah what was the other one you said the first red day and then the

53:07 other one was got so I would say that that sounds like what I that sounds similar to what I'm looking for I'm looking for money losing companies to jump 30% or more in a in the pre-market session so that would that's probably more similar to what I look for but yeah and you're looking at them to come around the pivot Points yeah I'm looking for them to come around the pivot Points I'm looking for signs of exhaustion

53:35 I'm looking for one of the things that I like have written everywhere is just wait wait wait wait comma wait comma wait comma period like wait wait wait wait like don't rush in to any trade ever just wait and I might miss it but just wait just hold off and that has been wonderful that's been great yeah I think there's a with short tell and I've done it for a number of years as well and I think there's only

54:06 two real ways to go wrong and the first one is getting in early and the second one's getting in too big and as suppose the third one is not nor to take a loss so there's only there's only three ways you can go wrong with an 80% Win race there's only three people do whatever and I would add the fourth one for me is and I love those that you said fourth one for me is stock selection yeah of

54:28 course yeah trade companies trade companies that don't have enough cash to survive the next 12 months what you can look for is in their 10 Q's or 10ks depending on whether it's a foreign company you can look for the they have to give a notice and I'm I'm nervous to talk to you so I'm forget that but they give a notice that they don't they have to put it in their their quarterly filings that they don't might

54:56 not have enough money to survive the next 12 months and it's a mandatory notice yeah H that's that's a big one around for as well yeah we're coming up to towards an hour do you have any final tips any golden nuggets any stories any memorable stories in the industry when the last 20 years of trading it blows out on you can and you can stop sharing if you want okay I just would just say I just have so much respect for what

55:23 you're doing and I have so much respect for the Traders on the lead leaderboard like I'm not in the same league as any of those but that it is it is amazing in this day and age that any retail Trader can go to the website and they can start the process of reverse engineering what someone successful is doing and I would focus most on the losses look at mine look at any Focus your attention on the losses and look at

55:50 what they did and in every case you'll see if it's if they're buying stocks you're going to that they got in too late at the top of the move if they're shorting stucks they got in too early at the bottom that there's so much to learn from that and some of these people on K I'm just like they are they are crushing it they are making so much money and it's out there for us to look at it's

56:11 it's amazing we end there thank you so much for your time Rob really appreciate it really appreciate you coming on and and for everything that you've shared in the community thank you thank you I appreciate it