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And he was just telling me how crazy it is that I'm able to do this, right?
I was able to compete at the highest level and then basically fell from the top, I guess you could say, in the NFL, and then started back over and am now competing at the highest level again in a different field.
So it's just, it's crazy to, it's crazy to think about.
Markets, speculation, and risk.
This is the Chat with Traders podcast.
It's Chat with Traders.
We're all the way up to episode 283.
How's it going, traders?
If you're new to our podcast, a big welcome to you.
Our listeners are from all over the world and we are so honored to have you continue listening episode after episode and we really appreciate you.
You keep us motivated to continue bringing new episodes of interesting chats with interesting guests.
I'm Tessa, co -host and producer of the podcast, and I love introducing our episodes to you.
And I hope that you've been enjoying our host, Ian Cox's inquisitive chats with our great guests.
He's been doing a great job.
And if you want to learn a little bit more about Ian, I did interview him on episode 244.
Let's see, a couple years ago now, time flies.
And maybe it's time for an updated one.
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Thank you. Now, meet our guest today, who simply goes by Michael, a former college football player who was on the journey of becoming an NFL athlete.
But after a sports injury, Dash does football dreams.
Michael turned to day trading, teaching himself the ropes.
His trading strategy evolved over the years, focusing on short selling highly volatile small cap stocks after discovering his knack for it in 2021.
His discipline honed from years of football helps him execute trades like a sniper, waiting patiently for the perfect setup before striking.
Now let's dive into this awesome conversation with Michael.
Here we go. Hello, Michael.
Hey, how's it going?
Good, good, yeah. Welcome to chat with traders.
Hey, yeah, thank you for having me.
I really appreciate it.
Yeah, so let's dive into your background.
So I played football for about four years.
I had a shot at the NFL.
The Chicago Bears actually invited me out to be a free agent for them.
Oh, wow. And yeah, so I went for the summer of 2017 and I got sent home basically because I was a hurt, I had a groin issue, sports hernia in my groin.
And so they send me home.
I'm devastated. I'm like, man, I blew my shot at the NFL.
Everything like that.
And then I'm trying to find something that can bring me the same amount of like money and lifestyle, if you will, as the NFL would have.
And so I'm looking online and I start seeing day trading everywhere.
Uh -huh, what year was this?
2017. Okay, okay, great.
Yeah, so I start seeing day trading videos everywhere on YouTube.
And I joined a couple of different gurus, but I taught myself how to trade small caps.
And then I became proficient at it probably.
And 2021 is whenever I started short selling.
When I set up my first account, I was probably 23, 24.
23, 24, okay. And were you playing football at the time or were you still in that phase of working with the Chicago Bears in some manner?
Yes, I was still in that phase.
I actually did the Spring League.
It's the NFL Spring League is for like guys that are still trying to make it to the NFL, but for whatever reason, they didn't land on a team.
They didn't get drafted.
So I did the NFL Spring League.
I actually got some offers to play in the CFL, but I turned it down to pursue day trading instead.
Oh, wow. So were you getting some kind of income at that stage from football?
No, nothing at all.
And so did you have any jobs beforehand?
I mean, you saved up some kind of money to open.
Yeah, so my mother has always been a big supporter and entrepreneur herself.
So coupled with, I think my mom gave me about, I think my first account was with an offshore broker actually back when I guess SureTrader was around.
I'm not sure if you're familiar.
We funded it with like $2 ,000.
And at the time I was also working food delivery and I was doing food delivery to save up some money.
So I paired that, the money I'm making for the food from the food delivery with the money my mom gave me.
And I think it came about two to $3 ,000.
And I fund my first trading account at SureTrader.
So when you got the account set up, were you eager to just jump right in and start trading?
That's exactly what I was.
I was too eager. I was over trading.
Long story short, I ended up blowing that account.
That was my first account.
I think two months in.
So August of 2017 is whenever I funded the account.
And I think by October, the account had already been blown to zero.
Wow. What did your mom say about that?
She told me to take it slow.
I have other family members that believe that it's gambling.
But my mom, she's not one of them.
She's always been a huge support.
She dabbled in some investing herself.
So she understands that with the right skill and strategy, you can actually have edge in the markets.
Nice. And so her support was a, what a good inspiration for you to keep going despite blowing up your first account?
Correct, yeah, it was everything.
I was devastated, but I knew that I could do it because there were other traders in the community that I was a part of that were making it happen, that were growing these tiny accounts into millions of dollars.
So I think by the beginning of 2018, I funded another account this time with about $5 ,000, probably six months in, I ended up blowing that account as well.
Oh wow. Yeah, I was just longing breakouts and that wasn't working for me.
I see. So were you choosing the same strategy the second time around as you did the first time around or did anything change?
It was the same strategy, nothing changed.
I hadn't even looked into short selling yet because I was too intimidated at first from the short side of things.
I didn't understand the concept of shorting yet.
And I also didn't understand how you have to locate shares and how you can over the broker money and things like that.
So it scared me away from it initially.
So what did you learn, what was your kind of key takeaways from going long breakouts that ended up blowing up your account?
What did you learn from that?
I learned that I shouldn't be doing that.
Why is that? Just being, I didn't find an edge in going long for me and still till this day, I haven't found my edge and going long.
I found my edge and strictly, I'm currently 100 % short seller.
I'm short bias. All I do is just short these parabolic moves.
What kind of stocks were you originally going long on the breakouts?
NYSE, NASDAQ or? No, it would be OTCs and pink sheets.
Oh, so you started off with the pink sheets.
Started off with the pink sheets because there's a guy Tim Grittani.
I'm not sure if you've heard of him.
He trades, he traded OTCs and that was a large part of his come up to make a million dollars.
So I thought that I would do the same thing, but I learned fast that in this game, everyone's edge is sort of different.
It can rhyme, but it doesn't oftentimes repeat.
What does that mean like when you actually place trades looking back on this during this time?
When you say it could often rhyme, but it doesn't repeat?
Yeah, so for instance, I know the mentor that I was looking up to, he would cut his loss very, very quick and it'd be like a stock sets a top at 210.
At 211, he would cut his loss if he's shorting the stock.
Me, I have to leave room for what I call the blow off top.
So if the stock sets that same top at 210, I would set my stop loss at about 231, 233, something odd so that it gives me room just in case the stock does a liquidity grab where it'll spike up quickly and then drop.
Oftentimes I would get caught in those moves where I would have the right idea, but my stop loss would be too tight.
From my limited knowledge of OTC stocks, they frequently can have a very wide bid -ask spread.
Was that not the case with the stocks that you traded?
That was, yeah. And like I said, I only traded the OTCs on the long side.
I haven't dabbled in shorting of the OTCs.
Uh -huh. I switched over to NASDAQ once I started short selling.
I see. So speaking of OTCs, I noticed on the OTC markets .com that there are over 17 ,000 OTC stocks available.
And in the stock screener, if I select the caveat emptor button, which in Latin translates to buyer beware, the list of stocks, the list of 17 ,000 stocks now only shows 848.
So with, what is that about?
95 % of the stocks falling into the buyer beware category how does one go about choosing which ones to trade?
So what I was taught was that on the daily chart of the stock, if the stock is breaking out over a new multi -year or multimon multi -week high, you would buy that and you would write it a couple cents, couple percentage upwards and then take your profits.
But you don't invest in those OTCs obviously for the reason that you mentioned.
They're scammy companies, they're not really good companies to invest in.
So essentially you're just day trading?
Essentially you're just day trading them.
Yeah, you never wanna get married to any one stock, especially not an OTC.
I made the mistake early on, there was a Shark Tank episode and I forget the ticker.
It was BCC something, BCCI maybe.
OTC, I'd tell my family about it and I'm like, this thing was on Shark Tank.
It's gonna go to the moon.
We should all get shares of it.
And I think it wasn't until probably 2022 that I opened up my E -Trade account and I was like, I still have shares of that BCCI and it did absolutely nothing, I didn't make any money off of it or anything like that.
Is there enough liquidity to trade these stocks?
I mean, can you describe what's your screening process or are you getting fed ideas from your trading group?
No, so the screening process that I have, do you mean for the OTCs or for NASDAQ now?
Well, yeah, actually let's cover both.
First OTCs and then let's go to NASDAQ.
Yeah, for OTCs, what I would screen for, it would have to at least have a million in volumes, shares traded.
I'll trade, I would have traded any price of the OTC.
So I mean, it can be 0 .003 and I would still be looking to along it at that point in time.
Now my criteria has changed a bit.
What I'm looking for now, what I put in on a scanner is I would like it to be at least 10 cents.
It can be any price above 10 cents, but I would like it to be 10 cents.
I would like it to have at least a million shares traded in volume and then I would like it to have at least a hundred trades, a hundred different trades.
And that is my go -to criteria for finding these parabolic runners or gappers that I intend on shorting.
How long did you trade OTC stocks from the long side before switching to the short side?
Probably my first full year of trading and then into 2021 is whenever I switched over to the short side.
So the short side, so you shorted OTC stocks and the NASDAQ or how did the NASDAQ, how did you get involved with NASDAQ stocks?
Yeah, so I just short the listings, the NASDAQ stocks.
I don't short OTC stocks.
Uh -huh. I migrated away from OTCs.
There's a trader by the name of Stephen Dux, this guy, he's an amazing trader.
And I watch a lot of his material that he trades listed.
He doesn't really trade OTCs.
So I migrated to the NASDAQ exchange and that's whenever I really found success.
So what makes you wanna only go short?
Where were the catalysts to just choose that?
So that's really just where I found my edge.
I would love to become the jack of all trades where I can short the parabolic, I can dip buy and then I can short the bounce and ride out the long kiss goodnight or the fade.
I would love to be the jack of all trades but right now I've just found my edge in short selling.
So my thought process behind that is I'm going to continue to focus on these one or two strategies that I have and on that are short biased, make probably my first million doing that.
And then I will begin to introduce new strategies from the long side.
Can you share with us the factors that you look at when selecting stocks to short?
Yeah, so whenever I'm looking for my go to play is called the short into resistance.
Now this can happen whenever a stock is gapping up on the day or it can be the first green day or a multi -day runner.
I'm looking for a stock that is spiking into previous days high.
So let's say back in January, a stock set a top of $2 .50.
Then it dies down, goes down probably to 50 cents.
In May now, when the stock is back on the scanner and it is having trading volume, I'm looking for it to spike back towards that $2 .50.
And once it gets close enough to that $2 .50, I would like for it to have a hard crack.
Then I would short the bounce on that hard crack risking that $2 .50 level.
I see, so you're shorting it kind of on the third round that it pops up?
I mean, like the third bounce on the chart, is that accurate?
Yes, yes. Okay, I see.
And what other factors do you look at?
Do you look at is short interest or how much you have to pay to borrow the stock?
Does that factor in as well or?
So locates, they do factor in.
Some of the low flow stocks, the micro flow stocks are very expensive depending on where you're at.
If a stock is too expensive, I'll leave it alone.
I might avoid it. It goes on my avoid list.
But for the most part, whenever I am shorting a stock, I'm just looking for it to have the liquidity on the day.
So the volume that I mentioned earlier.
And then if it's a short into resistance, I'm looking for it to be going into that resistance.
Is your edge just being patient to wait for to find those stocks that happen to fit that criteria?
So like on the third bounce and it hasn't broken above the previous resistance, is that your edge or is there something else?
I would definitely say my edge is in the ability to not have to trade every single day.
So the short into resistance, it doesn't always come.
But whenever it does come, I am ready for it.
I am prepared. I trade like a sniper, I'm in and I'm out.
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The other short setup that I'm looking for is called the front side short.
I like a stock to be extended either on the first green day or a multi -day runner, extended at least 300%.
I see extended 300%.
So what does that mean?
Like give us an example.
So that would mean that from the stock's previous close, it has pushed 300 % upward.
And I would like to short into that strength.
I see to short into that strength.
So say the stock is that, we'll just say it's been at $10 for a long time.
And then you say it spikes 300%.
So that would take it from $10 to $40, right?
And then what are you looking for then?
Then I'm looking for a hard crack for the stock to get an immense amount of volume and then have a hard crack.
And hard crack is, you know, it's a subjective term, but I would like it to, at least on the chart to look like it's a massive crack on the chart.
And then I would like for the stock then to bounce up.
And I would short into that risking the high of day that it just set.
So how long do you typically have to wait before you see a setup like this that you like and you jump right in?
You know, they usually come very often.
It depends on the market.
We're in a cycle right now with the meme stocks and the liquidity that's come from those guys where these stocks are going 250, 300, 500%, things like that.
FFIE, I think it went 3 ,700%.
And so these are the stocks that get me licking my chops.
I'm chomping at the bit to try and short these stocks that are extremely overextended.
So are there any examples of any meme stocks that you've gotten into in the last number of years?
I actually played GME GameStop and AMC.
I want to say it was, I'm not sure exactly what day it was, but it was the day when the Roaring Kitty, he was tweeting different memes and the stock was just reacting to it and it went parabolic.
I think it got up to 65 or 80 pre -market or something like that.
Are you saying just in the last couple of weeks or are you talking about like three years ago?
I'm talking about in the last couple of weeks, yes.
Oh, yes. Okay, uh -huh.
Yeah, so a couple of years ago, backtrack a bit, a couple of years ago in 2020, I missed that entire meme run.
I know that's when a lot of people became millionaires during that 2020 COVID market.
I wasn't trading, but I was able to capture the move that it did on the 14th of May.
I was able to make a good profit gain off of that.
Just on the short side and just intraday?
Yes, just on the short side and just intraday.
Do you only day trade?
Do you ever hold positions overnight?
Sometimes I do, but it's rare.
There's only one set up that for me, warrants me to hold overnight.
We called it the Doji Day One.
And basically it's a large gapper that has failed on the day and it opened, it gaps up, let's say 200 % from its previous close.
And then it falls beneath the open.
So it's a red candle on the daily chart.
And I look for a bounce to get in and I will swing that into the next morning looking for a gap down.
So since the majority of your trades are intraday, I guess in that case, you don't really care about the existing short interest or how much you have to pay to borrow the shares.
Is that accurate? Yeah, that's accurate.
Not too much. The fundamental aspect of it, it's not really, it doesn't really play a factor for me.
Now I say that, but I do have dilution tracker where I can see the offering ability of a stock and if they do have potential toxic dilution coming up or anything like that, it might give me a bias to hold longer.
So do you know, I mean, I hear, I don't short sell that much, but often I hear the longs screaming about this is gonna be a massive short squeeze and the shorts have to cover.
Do you know of any service or have you heard where one can find out the average price that the shares had been shorted at?
Because I was thinking that just because it has a high short interest, the shorts could cover on one day, but then new shorts could come in at higher levels that have deeper pockets.
And so how much do we really need to fear from a short squeeze?
You know, I haven't found any service that does that, but you know, these short squeezes, I'm sure you've heard of the saying, the market can stay irrational longer than we could stay solvent.
You know, I think that talks to short sellers, over aggressive short sellers.
Right. You know, yeah, it's, you never really know how high something can go.
I've been in a stock where I've, I just, I decided to take my stop loss out and I was like, you know what?
I'm not gonna cover, it's bound to come down.
And it turns out I shorted the black swan of the day.
Oh, wow. Well, congratulations.
One other short seller I talked with said that he signs up for these alerts from the companies and you know, like where they're gonna try to hype the stock to pump it up.
And then he uses these alerts that he gets to his email box or his messenger to the email tool to know when the big push or the big hype is on so that he can select the appropriate stocks to short.
Have you ever heard of something like that?
Yeah. So I've heard of promoters and these promotion groups of penny stock promoters usually that will hype the stocks on Twitter or in their chat forum, whatever it may have you.
And they're trying to get people to buy the stock and purchase it to make it go higher and higher.
And then they're gonna dump their shares into that liquidity.
You know, it's not something that I don't think anyone should make good practice of, but the way that that guy in the example that you just gave uses it as a very smart tactic.
Yeah. So what are the qualities of a stock that you look for that would encourage you to hold overnight or even possibly days, weeks?
I would have to say extension.
The stock has to be extended.
The golden number for me is that sweet 300%.
If we get a 300 % gainer, that's when I'm looking to short it and I'm looking to hold it for as long as I can.
Usually I take my profits early.
I trade sometimes like a chicken, like a coward and I don't wanna take unnecessary risks.
So I personally would love to learn swing trading strategy.
There's a great long biased swing trader, Jack Kellogg that Jack is, he's awesome man.
He's the jack of all trades, we'll call it.
And I aspire to sort of trade like him in the future.
He's able to go short, go long.
Doesn't matter, swing trade, day trade, it's amazing.
Yeah, I actually interviewed Jack a few years ago.
Okay, that's awesome.
Yeah, so getting back to the, so in other words, how often do you see these, you said frequently, how often do you see these plays where you get that 300 % movement up, the ideal type candidate?
Is it rare? I mean, do you find yourself being kind of impatient sort of like itching to get on the next trade and are you able to, how are you able to keep your discipline?
Yeah, so being a football player, we were taught and bred discipline from a young age.
I played football since I was in the third grade.
So it does take discipline.
There's a lot of quirks about trading that are synonymous with sports and professionalism and things of that nature.
So you just have to really put it in your mind that if my setup does not present itself, I am not going to initiate a trade.
It doesn't matter, the stock for me, I don't trade gappers.
A lot of people do trade gappers.
And what I mean by a gapper is a stock that's just up 150 % or 100%.
A lot of short sellers will short that, I leave those ones alone, and I wait for it to extend 300%.
Oh. So yeah, so a lot of times I'll miss out on a trade and I'm okay with that, because my strategy and my edge says that if it's a gapper, it needs to reach at least 300 % and then I can take advantage of that extension and try to ride that down.
And so there's plenty enough stocks listed on the NASDAQ that have these kinds of gains periodically.
So you're not just impatiently waiting weeks or months before you get that kind of juicy setup.
Yes, yeah, yeah, there is.
In short, I'll probably see a 250, 300 % gainer at least once a week maybe, once every two weeks.
Okay. Other than that, if I'm not trading the front side short, then I'll be trading the short into resistance and that comes about, I'd probably say twice a week, three times a week.
Now you mentioned about the quality of the bounce back up.
You got, what, at least two bounces up before you short on the third attempt up.
And you mentioned spiking.
What happens if the stock just trickles up on low volume in a slow way?
Does that change either, say even your position size or change whether you're gonna get in and short it?
Great question. Yeah, so if a stock is just slowly trickling up, I'm more times than not waiting for it to go parabolic.
I often, I can't remember the last time I traded something that was just trickling up slowly and slowly and kept going up.
Usually they will trickle and then they'll have that parabolic push upward.
And the first time it cracks and bounces off of that crack, that's whenever I'm looking to get in.
So the ones oftentimes the ones that just crack and fade out of the gate and mark it open, I'll miss those.
Because for me, I like it to be, I like to short strength.
I don't really short weakness.
And you mentioned about volume.
Do you look at indicators like RSI or any other indicator to help you determine the quality of the bounce?
Yeah, so the only indicator that I use personally is VWAP, volume weighted average price.
And I think a lot of these other indicators, they can overcomplicate things in my opinion.
If a stock spikes up and then it has a hard crack, has a bounce, I get in and it's starting to fade down.
I would cover my position partially or in full to take profits, right, as it fades.
And then I would use VWAP as an indicator.
If it can bounce to VWAP, I will re -short it, looking for it to reject off of VWAP and fade back down.
And what are your risk management techniques?
I was taught that having a consistent risk is like the holy grail.
And in my opinion, it is.
To have a consistent risk at a max daily loss at the broker level, I think is very helpful and useful for any trader to have.
It acts like a seatbelt.
So let's say my consistent risk is $2 ,000 on the day.
If I hit that $2 ,000, my broker will come in and they'll be like, hey, no more trading.
And I won't be able to place a trade anymore on that day.
Now, is this something that you set up through your broker?
Like you program the seatbelt for yourself?
Yeah, so you can just email your broker.
Most brokers, they allow this max daily loss.
You can email your broker and ask them, hey, I would like to set a $2 ,000 max daily loss or $5 ,000 max daily loss, which that's actually a big one.
But yeah, at the phone that I'm currently trading at, my max daily loss is $2 ,000.
I see, so you've been trading by yourself for how many years now?
So by myself, I was trading from 2017 until 2021, 2022.
And I started trading with the online prop firm.
I started trading with them probably about a year and a half ago.
Why is that? What made you go the funded capital route?
So growing up, we didn't really have much whenever it comes to access to funds and things like that.
So I couldn't keep funding these accounts, but I knew that I was onto something with the trading.
So I went the funded capital route because they provided their capital that I could trade with and then they would get a profit split of the profits that I make.
Yeah, so to really help out with the funding issue of the accounts.
I see, up until that time, how had you been doing during the first three, four years, percentage wise, kind of trading your own account?
Were you able to make some money eventually or was blowing up your account too common of an event?
It was way too common, man.
It was a bloodbath on us for a while.
It wasn't until probably this last year, year and a half that I found consistency, and then I was able to really go parabolic in my P &L chart.
Why is that? I mean, were you still, during these years, were you still trading from the short side in the way that you've described to us?
It wasn't until I watched a DVD called Trading Tickers 2, and in that DVD is where I learned the setups that I explained to you, the front side short, the short into resistance, and the doji day one.
And then I was watching somebody online, I forget who it was, but they basically were like, for your first hundred thousand or even your first million, just focus on one setup, one or two setups, right?
And so in my head, I was like, okay, I've been trying to be the jack of all trades and it's not working currently.
So let me go ahead and narrow my focus to short into resistance, front side short, and that's it.
Let me go ahead and work on my discipline to where if those setups do not present themselves, then I am not taking a trade.
Aha, I see, and you adopted this right around the time that you started with the funding problem?
Yes, yeah. I spent the time before that, I spent just studying this trading tickers 2.
I talked with other millionaire traders, Andrew Yang gives my quick bags on Twitter, and Mike Huddy, they've been instrumental in my trading career.
And then I've got a trading accountability partner, Arbner and Christian, they really helped me with the discipline of it all.
We hold each other accountable.
Every single morning we trade in a group chat.
So the play will come up and they know my strategy, they know what trades I'm willing to take and not take.
So if I take something outside of my strategy, I have that reinforcement from them like, hey, you're not supposed to be trading that and then I can exit the trade.
Aha, I see, so you hold each other accountable and that way you strengthen each other, help each other overcome their impulsive weaknesses?
100%, yeah, there's parts of myself that I might not be able to see or recognize as a trader, but having those two guys as partners and as friends, they can cover my blind spots, if you will.
Is that one of the key advantages of going through a funded capital route because of the other players in that group?
That is, yeah, I would say that's probably the biggest advantage other than not risking your own capital.
Having a community, having a group of people that can watch your back for you.
Trading is very tough and honestly it's very lonely.
So to have those guys that can call me on my BS, if you will, if I'm trying to be delusional with myself and I'm like, you know what, this might be a trade actually.
We've all been there.
Aha, but you know in the pit of your stomach that you're really taking a trade that's outside of your strategy, but to have somebody call you out on it is just a different level of discipline that it instills.
How is the psychological aspect of trading with other people's money versus just trading with your own money?
That's a great question as well.
So the biggest thing that I've noticed in the beginning, it can feel like it's not real when you're trading with other people's money.
It wasn't until I got my first withdrawal, my first payout that I was like, whoa, this money actually translates to real world tangible things.
That's whenever I started treating trading like a business, treating it like, you know, I always try to envision that I'm like a Navy SEAL or like a sniper going in on a mission, go in, come out, very quick like, but very disciplined as well.
Wow, so what was your performance like prior to going the funded capital route and how did it change once you did get funded?
Yeah, so I think I wanna say I was down about $60 ,000 going the non -funded route.
I wasn't finding much success.
And at the same time though, you know, I attribute that to not taking trading fully serious.
It took me some time to really treat it like a business, like I was saying earlier and just adopt the mindset, the psychological aspect of it is so powerful and it's so important whenever it comes to trading.
But yeah, once I started trading for the firm, since the beginning of this year actually, I made close to $300 ,000.
Wow, what does that translate to in a percentage return?
So I had 260 ,000 in buying power to be able to generate gains from that and generate profit from that.
That's a fantastic return.
How do you emotionally detach yourself from the amount that you're winning or losing to kinda keep your cool?
For me, it has to sort of be, and I hate to say this, but you have to gamify a little bit.
Oh yeah, what's that?
And gamify in the sense of that trading becomes a game and you're wanting to reach the high scores, right?
You're wanting to reach the next level.
So if you view it like that and you detach from like, wow, man, I just lost $5 ,000, that could be a payment on a car or something like that or an house to, I just lost $5 ,000, but that's all in perspective to my overall account, if you will, or to how much I can gain on the day, if you will.
So I think gamifying it for me, it helps to keep everything in perspective.
I'm in it to be one of the best traders in the game.
That's what I wanna do.
So with your ability to trade penny stocks or these kind of small cap NASDAQ stocks, do you feel these skills can be translated to trade any kind of type of market?
And do you wanna expand?
I would love to expand.
I just personally, I don't even know where to begin to try and expand to like large caps or blue chip stocks.
It's just the small caps have so much volatility that you can capture these 60 % moves, things like that.
I wouldn't know, but it doesn't seem like you can do that on Tesla, right?
Oh yeah. Capsule 60 % move in one day, it's unheard of.
So even during the time of say the last year, year and a half where we've had periods of low market volatility after coming off the frenzy, you know, in 2020 and 2021, there's still plenty there to keep you busy and where you to keep ranking in profits so you don't really need to trade other markets,
right? 100%, yeah. And I think that's the key right there, and like, I'm sort of content right now trading small caps and I'm also honestly content just going short on these small caps.
But I know that it's only going short is only one side of the coin, you know, going long is the other side.
And so if I can find a profitable long strategy, I can potentially in theory, double the amount of money that I can make.
So it's something that I'm looking into actively.
How does your family who treats this as gambling, have you shared with them your successes?
Yeah, you know, my brother, I shared it with my brother and he was like, well, it's time to pull out.
You know, it doesn't really work like that.
You know, he's just thinking that from a naive mindset, not really understanding the full scope of day trading, but he does it out of love.
So I definitely understand.
Uh -huh, yeah. Have you shared this with any other football players?
Yeah, I've got a buddy, Lays actually, he messaged me on Instagram and he was just telling me how crazy it is that I'm able to do this, right?
Like I was able to compete at the highest level and then basically fell from the top, I guess you could say in the NFL and then started back over and am now competing at the highest level again in a different field.
So it's just, it's crazy to think about when you're inside of something, you don't really feel the same pressures or perspective that people from the outside looking in might see, you know?
Right, yeah, exactly.
Well, it sounds like you can be a good inspiration for both your family and your fellow football players, huh?
Yeah, exactly. I might even begin teaching one day.
Oh, good. Excuse the last interruption here.
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Good. Do you have any advice for traders?
Yeah, I'd probably say my biggest takeaway that I've learned is to, one, focus on one or two strategies.
Home those strategies, become master of those strategies before trying to become the jack of all trades, and then two, I personally, I have a rule called the first 45 -minute rule, where I would only enter into, and I don't necessarily abide by this rule anymore, now that I've become more advanced in my
trading, but whenever I started out trading, I would always adhere to this first 45 -minute rule, and basically, in the first 45 minutes, a market open is the only time that I can place a trade.
Oh, why is that? Because that, for me, I noticed that if I was taking trades in the afternoon, initiating trades in the afternoon, I was taking most of my losses.
So I analyzed my trader sink, and I saw the different times at which I'm making money, and the different times at which I'm losing money, and I saw that I would make money in the mornings, and then I'd give it all back in the afternoon, and this was a repeated thing.
So, for the most part, I just cut out the afternoon, traded the most volatile time, which is usually that first hour of the market open, and I could manage a position throughout the day, but after the first 45 minutes, I could not enter into a new trade, and that really expedited my P &L curve and got
me profitable. You're looking to initiate the trade in the first 45 minutes, and does that also mean that you're looking to exit in the first few hours or so?
No, so that's the caveat.
You can manage the trade throughout the day as it progresses.
So let's say you're shorting a stock in the morning, and it's fading all day, it's an all -day fader.
You can ride that out and cover into pieces to lock in your gains.
I've even held till end of day multiple times and covered then, so, but it's just mainly about the entry.
I see, and VWAP is the indicator that you like to look at?
Yeah, VWAP is the only indicator that I use.
Did you ever get into journaling or get a software that does that for you?
Yes, I actually use Trader Sync currently.
You know, it showed me a lot.
It showed me that my win rate is roughly 49 % that I'm most successful and most profitable on stocks under $5, things of that nature.
I see, so well, great.
So to wrap things up, what do you struggle with most as a trader?
I would probably say what I struggle with most as a trader would be sitting on my hands whenever my setup is not presenting itself because my criteria is so strict.
When my criteria doesn't present itself, sometimes every now and then I get this itch and I'm like, you know what?
I'm just gonna trade this whatever, and I always lose money on it.
So that's what I struggle with the most.
Any tricks that you're adopting to deal with that?
To how to work on it, Alan.
Yeah, I actually bought a Nintendo Switch.
And so when my setup is not presenting itself, I might play a game or something like that, just wait for it to present itself.
Yeah, good way to get that dopamine hit from the game and we don't have to get it from the market prematurely.
Yeah, exactly. Well, great.
Anything you're kind of looking forward to or do you have any goals for yourself regarding trading or anything you're working on?
Yeah, I would love to.
So I've had $160 ,000 a month in February and this month in May so far, I'm up about 100 ,000 in May.
I would love to have $100 ,000 a day.
That's the next goal for me.
A lot of these traders that I look up to, they're having massive days like this.
So I would like to do that and then I would like to reach the $1 million mark.
I think that's a coveted rare error, if you will, for any trader to reach.
I think you can call yourself consistently profitable after 100K, I think that's what I heard, and then a million that puts you in legendary status.
Yeah, well, sounds like at least two members of your family and some of your friends have already reached legendary status.
That's true, yeah, it's all relative.
Yeah, well, Michael, thank you for coming on chat with traders.
Yes, sir, yeah, and if people wanna follow me or anything, you can reach me at iffyxxi, I -F -Y -X -X -I on Twitter.
Fantastic, thanks for coming on the show.
Thanks, Ian. Thank you.
