Rebel Traders 035 : Two Traders Walk into a Bar

The Rebel Traders go off topic in this show and have a general discussion about trading, investing, the industry as a whole and what ever comes to their mind…

Hold on to your hats ladies and gentlemen. Sean and Phil go off the rails and land in a virtual bar, far far away in this weeks show and dive in to and open mic discussion on trading, what drives them, why they trade the way they trade and allow you to look in to their world just a little deeper…

So, come see what happens when two traders walk in to a bar and join the Rebel Traders for a virtual pint of the good stuff...

Time Stamped Show Notes

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Sean Donahoe: So what happens when two traders walk into a bar? Want to see? Let's rock.
Automated: Rebel Traders takes you inside the world of two underground master traders who take an entertaining and contrarian look at the markets to cut through the noise of Wall Street and help you navigate the trading minefield. Together Sean Donahoe and Phil Newton are on a mission to give you the unfair advantage of a rebel trader. Now here are your hosts Sean Donahoe and Mr. Phil Newton.
Sean Donahoe: Hey hey hey, this is Sean Donahoe and I am joined by my partner in podcasting Mr. Phil Newton. How are you sir?
Phil Newton: I'm doing very well today thank you. It's a glorious day here in the UK, it's hailstone and showers. It's a wonderful summer's day.
Sean Donahoe: Well we have changed location from Austin to San Antonio, we've moved the entire Trade Canyon HQ down the hill a little bit, down the 35. It is brass monkeys, in fact I've just seen a chimpanzee with a mick welder running past the window. It is that bloody cold. It is bloody cold here but hey, it doesn't matter because we're inside. It's nice and warm and we are having a virtual pint. I feel a little bit of Jeremy Clarkson going on here with conversation corner. But we're just basically going a wee bit off-topic, no structure per se. Having a general discussion about trading.
Phil Newton: Just another day podcasting then, yeah.
Sean Donahoe: It bloody well is basically, but it's more like what happens when we're not talking podcasting, we're not creating any structure for this show. It's what we're talking about in general, like some of the stuff that's going on today in the markets. This could get a little bit strange but hey, we'll see what happens.
Phil Newton: Talking about topical things I might as well get started straight away. If you want to just freeball it as it were.
Sean Donahoe: Well okay, freeball it. Going commando, let's have a look.
Phil Newton: I like that. It's throwing a spanner in the works to the structure. You just said we're not doing any structure so let's bugger the introductions.
Sean Donahoe: There you go, let's go straight in.
Phil Newton: We might have some bullshit later on, maybe the usual shenanigans can be identified in the markets. Let's just jump straight in. What were we talking about literally just a few moments ago? There's been a news report been reported and the market's gone batshit crazy for absolutely no reason whatsoever.
Sean Donahoe: Yeah, the CPI report coming out. It's what we call a nothing burger as far as I'm concerned. But being the markets are jittery is, Phil just said to me a few moments ago what's going on? Is there something going on over there because the markets have gone a little bit crazy. I said, "You know what, the CPI numbers have just come out." It's basically, "Well what the bloody hell's that?" Because Phil's in the UK, I'm in the US.
Phil Newton: I obviously know what that is. -
Sean Donahoe: I know but it's like, "What's the point?"
Phil Newton: I'll just point that out. Because I thought I'd missed ... I think the long story short was I thought I'd missed something because everything, not just one thing was moving. Which I'm not too bothered about but literally everything across the board had moved. Currencies, futures, 4X, stocks, premarket, everything was going mental. That is unusual because it's not something you see on a regular basis. I'm looking at the headlines, as far as I'm concerned it's nothing. There's nothing driving it so unless some random events have happened that I've not seen, what's going on? To be fair literally what, 20 minutes later the markets ... The NASTAC shrugged this off straight away. I'm looking at the futures market at the moment. You've just got to beg the question of, why did the markets move like this? I think they're behaving irrationally right now.
It's an opportunity to get in on something which I'm very anxious to do but you've got to ask why are they irrational? What's your view on that Sean? Why do you think they're acting irrational right this moment?
Sean Donahoe: Well it's funny. This is exactly something we're going to be taught about in probably the next podcast in a little more detail, but it's a little more of the psychology. One of the things we're taught about was receny bias. We've had all the volatility in the markets given last Monday, Friday through Monday and everything else and a big shake off in the market, a big correction that I think made everyone's butts clench just a little. They were wondering, "Okay, is this a correction or is this a crash? Do we have a flash crash?" Everyone's a little bit nervous.
Phil Newton: Everyone's nervous. Everyone's on hair trigger, aren't they?
Sean Donahoe: Yeah, everyone's looking for a reason to take the chips off the table. We had a little bit of a kickback, little bit of recovery, and again it's really driven by nothing but fear and, "Okay, we've been on a nine year ball run. Okay, any reason to take your chips off the table?" This CPI report comes out on a regular basis, all the time. I really think that because of the correction last week people are just a little nervous and they're looking for ... I think also a lot of this is driven by the news media as well looking for a great hype story to get attention.
Phil Newton: If it bleeds it leads is the old phrase isn't it?
Sean Donahoe: -
Phil Newton: I think you're right Sean. This is hype, as we say we like to call out the hype. This is hype, I mean I'm looking at 60-minute index futures right now. They've shrugged this off, I mean they're still off on the day but it looks like they're going to shrug it off. I would imagine this should be recovered as we get into the main session. But yeah, the markets as you said are hyper-sensitive because of the ... Is it officially a crash? What's it called, a blip? What are the talk-
Sean Donahoe: It's a blip on the radar.
Phil Newton: What are the talking heads talking about? I don't know that we're calling it a flash crash. I've not seen it but it could fall into that category of flash crash. Certainly it is a point move, it's the biggest one from the DOW's point of view. The markets are hypersensitive so I think because of that oversensitivity as you were rightly saying it's been oversensationalized, it's been exaggerated, it's hyperbole. Because the numbers themselves, there's not really a great deal of difference as far as I'm concerned. As I said to you before on the show actually it put me in mind of 2004, 2005 because on a regular basis all the way back then when there was some sort of ... One of the more important reports came out like this one the markets used to go absolutely mental. It was a fabulous time to trade a news report but then suddenly ...
When I say suddenly a couple of years later the oomph went out of these news reports and then for the next decades, 10, 12 years, whenever one of these news reports came out it was just a big bowl of nothing. The markets didn't react in the same way so as far as I'm concerned this is one of the bigger reactions that we've seen in many a decade. It just doesn't happen on a regular basis anymore to make me interested in trying to trade essentially.
Sean Donahoe: That's basically it. At the end of the day it really is the news media or the financial news networks need something to really get the eyeballs and keep the focus.
Phil Newton: Do you mean to say Sean that they're trying to sensationalize a boring subject?
Sean Donahoe: Let's just look at the numbers. I mean the CPI, the consumer price index, a measure of inflation for January. They were expecting 1.9%, it came out at 2.1%. Guess what? That's bugger all real difference. But again anything to glom onto-
Phil Newton: Sensationalize the headlines, yeah.
Sean Donahoe: Sensationalize the headlines. And a lot of people really don't give a monkey's but the concern or the fear is ... That is being pushed forward as a story is that any excessive inflation is going to give more credence to the fed raising interest rates faster than expected. They're projecting three interest rates hikes this year. Let's face it, the economy is booming. We're in really good times, tax cuts coming in, it's creating a lot of excitement, a lot of money is flowing and the feds said that if the economy's going up we're going to increase rates. It's expected, it's all telegraphed, it's well-communicated.
Phil Newton: And that's positive, well-advertised. Like they did with oil. We've told this story before but like they did with oil, 2003, 2004, 2000 ... That sort of time it was well advertised that, "Hey, oil prices are going to go up. We're going to start ..." They were also explaining it to the layperson, the poor farm boys like me who can ... "Where's it going to impact you? It's going to impact you at the fuel pumps." So it was well-advertised so that when there was these price hikes happens, in this case the interest rate increases. People aren't going to be protesting in the streets because if you remember in the late 90s when oil prices were ... Sorry, mid-90s wasn't it, oil prices were similarly soaring back then. People were out protesting in the streets. Fast forward when a similar event happens again, they're protesting in the streets because it's well-advertised.
"Oh, they said it was happening, we expected it to happen, it did happen." So interest rates this time around, I think it's a good thing that it's been well-advertised, so it's probably going to happen. All things being equal we're going to put them up not just once but maybe a couple of times this year. Be prepared for it so when it happens there's not going to be the panic. I don't think we're going to see the markets react in anything other than maybe a kneejerk, spasmodic reaction of, "Okay, today's the day." A little bit of an, "Oh bugger, what should we do?" I think the markets are going to be just fine because it's been well-advertised as you were saying. I like the word actually, telegraphed. It's well-telegraphed.
Sean Donahoe: Very much so. This leads into a little bit of a thing I was thinking about for a future show but I'll put it out there. It's a little bit like kung fu. Take any martial art. When you're battling the market, and this is one of the angles I was going to take for a future show. Maybe we'll expand on this a little bit because people may or may not I used to be nuts about martial arts and many different styles. But also because I wanted to focus my brain in a certain way and I'll get into that another day. But one of the things in martial arts is does your opponent telegraph their next move? If they're coming and leaning back and pivoting on their left foot and they're twisting their hips a certain way you know they're probably coming up on a right roundhouse.
Phil Newton: There's subtle indication. A novice might look where they're aiming to strike you as well. That might be another thing. The markets will similarly telegraph or be well-advertised as I've always phrased it. What's going to happen in the future? I think that's a good thing because there's no shock to the market. Years ago you could get away with it and the markets would do whatever they were going to do. Now I think governments especially need to be very vigilant in notifying the general public of what they're going to do, when they're going to do it and why they're going to do it. I think that's a good thing because shocking the markets post-financial crash is a bad thing. I think that's the lessons that they've learned and they're certainly taking that to heart. They're keeping everyone informed, everyone's in the loop with what's going on. I think that's a good thing.
Sean Donahoe: Absolutely. Using the same martial art analogy when you can see something being telegraphed you can pivot, position-
Phil Newton: Prepare for it, yeah.
Sean Donahoe: Prepare for it-
Phil Newton: You might still get hit in the face but you can prepare for it.
Sean Donahoe: There you go. Or you can block it or you can, again, just duck.
Phil Newton: Minimize the impact, yeah.
Sean Donahoe: Whatever you need to do.
Phil Newton: "Duck and cover, duck and cover."
Sean Donahoe: Absolutely. I think the markets are just looking for any reason to ... Or a lot of markets or people or traders are looking for an excuse to duck and cover and take the money off the table, put it in the pocket and run to the back of the room and see what the hell happens. Interesting, interesting stuff going on.
Phil Newton: I think to stick with the analogy Sean, I think Sean Connery in the Untouchables said it. "A couple of weeks ago markets brought a gun to a knife fight."
Sean Donahoe: Well pretty much.
Phil Newton: And everyone's a bit jittery at the moment. They're doing the duck and cover. I think that's what's happened with today's report. It's a kneejerk overreaction to an otherwise normal, semi-normal news item release. It's just a kneejerk reaction because of this current hypersensitivity. If the report had been released say prior to this market selloff I would imagine that the markets would not have reacted in the way that they have done. It would have been a little bit of a hiccup but nothing to the magnitude that we've seen today. I mean the markets are off, what, 22 SNP points? $200 or so DOW points. I mean it's shrugging off now as we're talking about it but it would not have reacted in the way that it did. I think that's really what we're talking about. Don't panic as we said last show, don't panic. There's nothing to worry about. Move along, nothing to see here.
Sean Donahoe: I don't do the, what was it, Tariq Aziz from the Iraqi News Media back in 91 when the tanks were rolling through Iraq and saying, "There's nothing to see, nothing going on."
Phil Newton: No tanks here.
Sean Donahoe: Yes exactly. At the end of the day yeah, it's one of those things that ... And this is what our unique style of trading ... I've got to give us a pat on the back somewhat because we're very much-
Phil Newton: That's the phrase I was thinking of yeah. Might as well.
Sean Donahoe: We're immune to .
Phil Newton: If you don't pat yourself on the back Sean who else will?
Sean Donahoe: Bloody right. But at the end of the day we're looking at these markets and we know it's just like, "Okay, it's a hiccup, it's a pause in a recovery from the correction, or it's the psychological bounce back." We can position ourselves with time to be right, we look at the markets, we don't care about this. Like I said, and I was saying this to Phil before the show because funnily enough we have a lot of our best conversations before the show just because we're just generally chit-chatting like we are now.
Phil Newton: We're chewing the fat aren't we?
Sean Donahoe: Abso-bloody-lutely. It's like, "Well okay, this'll be forgotten about tomorrow and it'll be either something else or it's like, 'Oh, well that was really realization that there's nothing going on." That is our style of trading is we look at the general momentum, the general attitudes of what's going on, we've talked about, "Hey, we need volatility. It's going to happen very soon. This pressure cooker's going to pop."
Phil Newton: Two-sided marketer? Great, fabulous. Going up and down. Brilliant.
Sean Donahoe: Indeed. And that's the beautiful thing because you can have your portfolio adjusted for what's going on in the markets or expectations of things rather than a lot of what I call home run traders who are looking for that one big move and they're waiting, waiting, waiting for that one big position.
Phil Newton: Swinging for the fence, yeah.
Sean Donahoe: Barely able to sleep and swinging for the fence. We'd rather take multiple positions, quick first base and load up the bases and what have you. .
Phil Newton: It's a high probability trade as well. Swinging for the fence, sure you might get on the NVIDIA-type trade where it doubles or triples in a very short space of time relatively speaking over several months, a couple of years. Try and do that every time, it's difficult, it's stressful. We've compared this to hunting versus farming many times. I think trying to swing for the fence is that hunting, "I need to be right otherwise I'm not going to eat, I'm going to go hungry." That brings its own levels of stress and anxiety versus a portfolio style of approach which is to trade smaller and more frequently and have lots of occurrences of many different positions. Lots of fingers and lots of pies. You're then not dependent on one position working out, you're farming, you've got a crop, you can just pull the ones that are ripe and ready to farm essentially.
The ones that don't work out you can literally forget about for the most part because hey, it doesn't matter. You know there's going to be a small portion of your crop that's not going to work out. But you've got a crop is the point. What we know is that 65% of the time we're making money, we're right. And we know that 35% are going to be plowed back in. We're not going to do anything with them because hey, it's a numbers game. But you've got that opportunity to farm versus hunt. I think so many people are focused on trying to hunt and it's a very unique skillset to develop. I have done it and I can do it but it certainly raises unnecessary anxiety and emotions when trading.
Sean Donahoe: No, very much so. Very much so. It's one of those, I'd much rather be a relaxed trader. This is one of the things that both you and I talk about.
Phil Newton: I want feet up, I want the smoking pipe on, I want the slippers on there, I want the nice pipe, good book and a brandy. That's what we want isn't it? My feet up and pipe smoking and reading the paper. Don't want to be glued to the screen stressing out over one position.
Sean Donahoe: Exactly. I mean to my mind it's, "Oh, look at what's going on, look at my portfolio. I'll find my opportunities, put them on, walk away, and I enjoy the rest of my day." I don't want to be-
Phil Newton: It's farming. It is farming at its finest. Sorry Sean, I'm quite passionate about this particular subject. I've mentioned it many times before. Think about it, if you plant a field full of your crop some of it will grow better than others. But imagine that you can plant your crop and plant your fields and you've got your irrigation in place, twice a day, automatically it comes on, it waters the fields for you, you don't have to worry about it. Or it can keep track of the soil acidity or alkali and you put the fertilizer down and then you walk away and you let the crop grow. You've let the fields do what it's going to do because it takes time for those crops to grow. It's more relaxing because when you've planted the crops and you've planted the fields full of ... I'm trying to think of a suitable edible produce maybe, lettuces.
We used to grow lettuces growing up. If you've grown a lettuce, field full of lettuce, you've planted the seeds. You've got to let them grow. So you literally walk away and let nature take its course. What's the phrase I'm trying to use? It's far more gratifying to trade that way because you've not got the stress of trying to grow one lettuce at a time. And then you're completely and wholly and dependent on one lettuce growing at a time. If it doesn't grow you're buggered basically, you really are snookered.
Sean Donahoe: That's exactly it.
Phil Newton: Farming every time for me works. Just till the land, plant the fields, plant the seeds and your crops will work or they won't work. But hey, even if some of them work out it will cover the cost of the ones that don't work. It's the law of averages. You only get that when you start trading more frequently.
Sean Donahoe: That's exactly it. We've talked about this many times but we developed these strategies-
Phil Newton: It's counter-intuitive as well, yeah. Counter-intuitive but hey it works.
Sean Donahoe: I mean, yeah. The strategies we've developed, we've kind of refined the reasoning behind it rather than the ... Like this farming method, there's a way to describe it. But the method's really come about because we develop these strategies for busy traders. Like me, I'm busy. I run mobile businesses, I've got my fingers in multiple pies and I use trading as a way to make my profits from all of my other ventures grow. So basically every dollar now becomes worth $2 or $3 over a period of time or $5, $10, what have you. That means that for every business I run, even ones that have slim profit margins or what have you, that meat is still ... The dollars that are plowed into my trading grow. So I've developed a lot of, my attitude and my approach to trading based on that and Phil's developed his basically because he doesn't want the stress of being a full-time per se trader-
Phil Newton: I was twelve years a day trader. That takes its toll. I have done that, I've done that, won the T-shirt. I just want to do other things with my time. I don't want to be at the computer all day, every day, flicking through chart after chart after chart. It literally is as simple as that. I think it's funny that for different reasons we came to a very, very similar methodology for two opposing reasons. You're busy, you don't have the time, I don't want to be busy and I want more time. We came to a very similar approach.
Sean Donahoe: And it works for a lot of different people for that very same reason. It just stops you being obsessed with things like CPI reports or whatever the issue du jour may be or the hype du jour.
Phil Newton: The only reason why we were chewing the fat about it earlier was, it's just because everything was moving. "Oh, something unusual's happening. It's not really affecting my portfolio, it's affecting a portion of my portfolio but it's not affecting the other portion. It's favoring the other portion." Because guess what? We've got a field full of flowers, some of them are going to grow, some of them are going to bloom and some of them are going to die and wilt. It's just a numbers game. It ain't over until they expire because we're trading with options, we've got an expiration date. Today is a little bit of a kneejerk reaction. That's it.
Sean Donahoe: Funny stuff. Well with that being said, I think that was actually an interesting little side bar unscripted and we may have to do this a little more often because you never know what's going to come out of these. But with that being said let's move on.
Phil Newton: Jog on kitty.
Automated: And now it's time for the Rebel Trader tip of the week brought to you by Tradecanyon.com. Ready to take your trading game to the next level? Discover where smarter traders come to get coached by the best and learning to trade just got way easier. Trade Canyon, smarter traders live here.
Sean Donahoe: This week's Rebel Trader tip of the week, don't run before you can walk. Kind of makes common sense, you've heard this in many different things. But one of the things I really like to empower traders with is laying that foundation. Exactly like we just talked about in the main section. You have to have a foundation that you can build on and if you don't again, you're just going to trip ... You're going to run, you're going to trip, you're going to go headfirst into whatever corrections you might want to call it. But try and correct your balance or heads first into a margin call. We know a few people, I actually had a couple of people last week that had their margins called because they were on the wrong side of volatility plays and things like that and all sorts of horror stories.
But again at the end of the day if you create a foundation that allows you to be adaptable to any market conditions, very much like we said, then you can build on that with any different flavor that you might bring to your particular type of trading. Like we were saying, mine and Phil's flavor of trading is actually very similar because while we have different motivations it corresponds.
Phil Newton: We've got a foundation. It's a fundamentally-based foundation. If you've got that knowledge or skill set you can build whatever house you want on the foundation. The house itself can look different but the foundations are going to be very similar.
Sean Donahoe: Absolutely. Phil is very much a chart pattern trader. That would be a fair enough assessment based on that foundation.
Phil Newton: Yeah, broadly speaking that's exactly it. I'm very visual, very pattern-orientated.
Sean Donahoe: And for me I'm very much ... I lean towards the volatility, the AI side of things. Although I do the chart pattern and everything else as well but I'm looking at a lot of cluster-based analysis with some of the stuff I do with AI and algorithms and stuff like that. Although we both cross the ... Our buildings look very similar laid on our foundation, that's one way I guess I could say it. But we have our -
Phil Newton: We've painted them a different color.
Sean Donahoe: There you go, that's it. We've made them our own. The interiors decorated.
Phil Newton: You've got some patio fronts, I've got a walk-through lounge or whatever.
Sean Donahoe: There you go, exactly. It's our own individual style, our own individual aspects that we've built on that because of that solid foundation. You can't just jump into the markets and be Gordon Gekko or Warren Buffett. You've got to have that happening.
Phil Newton: Especially because they ended up being in prison. You don't want to do anything stupid that gets you arrested.
Sean Donahoe: Indeed, yeah. Let's skirt around that one.
Phil Newton: We're talking lots of different stories and analogies. Maybe I just want to phrase it a different way. All we're talking about really is have a plan. It could be as simple or as complex as what you want to make dependent on your background. Mine's very simple because I'm a simple farm boy whereas Sean's is a little bit more technical in nature because he's got that technical computer coding type of background. You can have your plan again as simple or as complex as you want to make it. I'm wholly in favor of keep it simple. It took me 20 years to keep stripping it down from building up to more complex systems over the years to then stripping it down for the next several years to make it as simple as possible. I firmly believe you do not need to know much to make this work. My first system if you like, my first strategy was a very simple moving average crossover system.
All that was was a framework to help you recognize what phase of movement the markets were in. I used to use moving used to help recognize whether the markets were ranging or trending and then as such I could adopt the right entry mechanism and based on patterns I could select the right target. The point is it's essentially very simple. If the moving averages were crossed bullish and the market's probably going up I'm going to be buying pullbacks. And vice versa if the moving average is across down, I would be selling rallies. Just for example. Then I add another identification method to help recognize using moving averages if the price was deemed as range band. Over the years I've stripped that back but as a new trader all the way back then it was a nice, simple framework to basically help determine what I should be doing in the markets.
That is as simple as it gets. When the moving averages cross, look to trade pullbacks in that direction. There's a good chance that the markets are trending in that direction. That can be as simple as it needs to be. It doesn't have to be complex. And add in a targeting and some money management in there but it can be a one-page strategy is all we're trying to say. But that gives you the foundation, a mechanical way of approaching the markets that then as you were saying Sean, you can then stop to layer on maybe discretionary elements as your knowledge grows, as your skill grows, as you evolve your personality and trading. Like mine evolved from day trading to swing trading with going from very much intensive screen-based trading versus the exact opposite now which is as little time as necessary to get the same results.
As you evolve as a trader strategy will change on the specifics. But that foundation form is still the same. It's, which way is the market going? Is it going up, down or sideways? That hasn't changed in 20 years.
Sean Donahoe: That's exactly it. We came to this with a kind of similar, like I said, mindset is we want to keep it simple. For me, I want to keep it robotic so it can be algorithmitized if that's even a word, it is now. I've officially named it.
Phil Newton: It is now, yeah. You beat me to it.
Sean Donahoe: But I want to make something that-
Phil Newton: You had it first.
Sean Donahoe: Exactly. I want it to be simple, checkbox so that it can be rule-based decision made and then I can automate it. Again that's where a lot of my background comes into this. But again, it's keep it simple. You don't have to overly complicate it just to make it like, "Oh, look how complex my system is and I'm the only one who can do it." And then you create all sorts of single points of failure and I can go all technical on that. But the simpler you can keep it the faster it can be executed the more it can be adapted based on particular environments. And then boom, you have a foundation that you can evolve, twist, tweak and turn into your particular advantage.
Phil Newton: Consider it like default settings. Discretion is you're tweaking under the hood with your knowledge and your experience. "Ooh, I've just spotted a discretionary trade because I've recognized something that can't quite be quantified yet." But if you ever get beyond that you can always hit the reset button and go back to default settings. That's your base level strategy, that's the thing that you're going to do every single day, every single time. As you're going through that looking for opportunities it might be that you go, "Ooh, there's your discretion ..." It might be that you spot something. You've just learned about Elite Way for example. "Ooh, I think we're in a way five," because on that chart it ... You can layer on that discretionary interpretation and if you're not sure you can hit the reset button on that strategy.
That's why it's important because if you're ever not sure what you should be doing it's that foundational strategy. It's the base-level plan that you set in stone, that's what you're going to do every day, every single time.
Sean Donahoe: That's exactly it. That really is it and everything in a nutshell. Again, lay and develop a foundation and then use that to create your ... The home of your dreams and then we can rock on from there. With that being said, let's jog on kitty as my friend over here likes to say.
Automated: If you've got questions they've got answers. Sean and Phil dive into the virtual mailbag for this week's Rebel Traders quick fire round.
Sean Donahoe: With that being said, jog on kitty, what was that from? Remind me. Was that Hot Fuzz?
Phil Newton: Hot Fun, Run Fat Boy Run. No it could have been Hot Fun. Was it Run Fat Boy Run?
Sean Donahoe: It was a Simon Pegg movie.
Phil Newton: Or was it Hot Fuzz? No, it was Hot Fuzz. Jog on, kitty.
Sean Donahoe: Jog on, kitty. I've been saying that now for the last few days and it's stuck in my head so I'm going to have to go watch it.
Phil Newton: It's one of my thoughts.
Sean Donahoe: Yeah, it is your thought.
Phil Newton: It might even have been used in Shaun of the Dead.
Sean Donahoe: It might well have been again. We're both huge Simon Pegg fans.
Phil Newton: You know what? Now I'm saying it, I think it's a phrase they've used in all of them. It might be that recurring joke that they've used.
Sean Donahoe: There you go. Anyway, with that being said though.
Phil Newton: Random movie side part.
Sean Donahoe: Abso-damn-lutely, like the rest of this show. Let's have a look in the Rebel Trader mailbag here and the first one here is, "I've been trading smaller positions for a while now but how do I know when it's time to scale up those smaller positions into larger positions?" That's kind of an interesting one because we keep telling people to scale down. But how do you know if you're trading smaller when it's time to scale up?
Phil Newton: I think there's a couple of ways that you can do this. It depends on, I'm of the view of trade more frequently. One way of doing it is you could start maybe being a bit more aggressive by trading more frequently. So you can keep the small position size but you may increase your universe of stocks. Let's just say, my universe of stocks is about 500. That means that I've got the 500 stocks that I believe are the best and only stocks that I need to look at based on how they move, based on liquidity and a few other factors.
Sean Donahoe: Can I just throw out there guys that you can download that exact ... Our internal universe of stocks from the website, Tradecanyon.com. We give it to you for free. It's one of the most important-
Phil Newton: Give it away, give it away, give it away now.
Sean Donahoe: Oh my lord, I knew he was going to go there.
Phil Newton: Phil is going to wrap. Why not? It's February the 14th, it's my little loving gift to the world.
Sean Donahoe: Dear, please can we get a receipt for that and take it back to the shop?
Phil Newton: Please stop.
Sean Donahoe: But yeah, we give that, our internal universe of stocks away. It's one of the most important documents inside our business. But we'll give that to you.
Phil Newton: That's my universe.
Sean Donahoe: It's based on, Phil is our senior analyst as well as many other hats that he wears within Trade Canyon. But this is-
Phil Newton: Idiots. General fun time boy.
Sean Donahoe: For a fee. Dear me. Anyway, yes, we do give that away so you can download our universe of stocks, the stocks that we trade and our students trade every single day. You can download that from the site. But outside of the little plug for that you can access this and again, focus on this particular group where you have the prime opportunities we like to look at. But go ahead with what you were saying then.
Phil Newton: I lost my train of thought. Thanks, Sean. I now know how that feels. Revenge is sweet.
Sean Donahoe: Absolutely. Basically you were saying about multiple positions.
Phil Newton: I know exactly where I was, I was just being my usual idiot self.
Sean Donahoe: Facetious, okay, yes.
Phil Newton: Universe of stock. One way of doing it would be, my universe stocks is about 500. Again while I advocate passive trading I'm still reasonably aggressive. I'm looking for at least one trade every day, potentially I'm looking for two, three, four, five trades every day. It depends on what's set up. But I've got this universe of stocks, this pool, this universe that I can draw from. It might be when you start up your universe of stocks could be five stocks, it could be 15, it could be 20. That's your universe, your pool that you paddle in. One way of increasing or to scale up might be to increase the universe of stocks to look at more opportunity. You might go from say an average of three or four positions being open at once to four or five or six or seven or 10 or 12 or 50. You can increase the frequency of your trading, would be one way of doing it. I'll just pause there. That makes sense Sean?
Sean Donahoe: Yeah, absolutely.
Phil Newton: Awesome. You can increase the number of positions that you do without increasing your individual per trade risk. That would be one way of doing it. For most people as you're new that's probably where you'll start. You'll start with a small universe of stocks, small pool of positions on any one time and you'll slowly and gradually increase as your confidence builds with the how you trade. It might be you've got to that point and moving past it you say, "Okay, well I'm averaging one trade a day." You're kind of doing something similar to what we're always advocating which is having this rolling portfolio for 20 to 30 positions. You've got there now. You've got a nice, comfortable account size that justifies it. One simple way would be to start increasing your risk as a percentage of your portfolio.
For most people in my experience that point is when you get past $100,000 in your account. Because anything less than that, because I advocate trade as small as possible. So a half percentage point to one percentage point of your available equity is what I often suggest to people. It allows you to trade as small as possible but then you can trade frequently as we've just said. When most people get past that $100,000 mark that's when it starts to get interesting as I like to say, to play it down for a moment. But then you're going to start increasing from a $500 per-trade risk and then you might jump up to 550 or 600 or 700. You'd start to do that as you're evaluating your account growths. As a percentage of your overall portfolio.
Sean Donahoe: Yeah, compounded positioning is what we call that.
Phil Newton: Yeah. Personally I wouldn't stress about this. One trap that can be fallen into is evaluating it on every position. Every time you put a new trade on you look at what your cash position is. You're constantly stressing over it on every position. I work it out once a month and that's my position size for the month. It's nice and simple, I'm not stressing over it because I've got this rolling portfolio. I'm going to have a month of position size. With that cycle of my portfolio. I'll evaluate it at the end of the month and then I'll reevaluate it for the following month and so on and so on. I'll do that rolling portfolio with that position size. That's how I do it. It's a lazy approach, I appreciate it could be more efficient. We actually go into this in a lot more detail in our training but just to give you the back of the envelope version.
That's how I would approach it. There's two ways for if you're starting out increase your number of positions, number of occurrences. Then the other way is as a percentage of your overall account availability. Usually I'm going to go from half percents and stick to a half percentage because that'll give you a dollar amount, and then you can work out your position size based on that dollar amount as your personal risk.
Sean Donahoe: That's very cool.
Phil Newton: That's where we're at. That's all I've got to say on that Sean. I could go on about that for a long, long time because I've got lots of thoughts and alternatives but I think they're the two situations that most of our listeners will find themselves in. Either they're just starting out or at the interesting account size level as I like to say. That $100,000 mark, that's where it gets interesting for a lot of people.
Sean Donahoe: Abso-bloody-lutely. Again I could also take it and twist it around a little bit. One thing I do is very much like Phil says. It's like my average position, so it's 1%. It allows me to then break up a lot of my portfolio to -
Phil Newton: It's stress-free as we were saying earlier.
Sean Donahoe: Exactly. One thing I do do is I have a couple of strategies which are very high-probability strategies that are very much based on particular environments. It's like if you want to use a scale like zero to a hundred these are the 1% hands that I might like to play or the 1% trades where these are extreme-
Phil Newton: They don't happen frequently.
Sean Donahoe: They don't happen frequently but when they do-
Phil Newton: It's not an everyday trade.
Sean Donahoe: Exactly. .
Phil Newton: When the conditions are just right, it's got high expectation but the frequency of that trade is quite low is what you're saying.
Sean Donahoe: Absolutely, yeah. That's probably a better way to put it. And then -
Phil Newton: Once a month, once a quarter, once ever 12 years.
Sean Donahoe: I'll find one a week. One a week is what I'm doing.
Phil Newton: It's infrequent. I think is what I want , what I want to take away.
Sean Donahoe: And then I'll scale up basically. I'll go from 1% to 5% because I know that's a really good trade and that's one of the ones that's on my radar. It's like, "Ooh, there's a ping on that radar. Let's have a look. Oh yeah, that's good. Right, 1% or do I do 5%? What's my remaining check ? Are they all checked? Okay, 5%." That is a big position or a larger position but if I have a much higher percentage chance of being successful on that then boom, golden. That's it. But again, that's because-
Phil Newton: Two takeaways from that Sean.
Sean Donahoe: I've already got that foundation.
Phil Newton: Two takeaways that I heard there, just so that our loving and adoring listener, hi Mum, can take away from this is add a strategy is what you were saying there. That was one thing. If you've got one methodology to find, filter and sort stocks, socks even, stocks, you can add a second. It doesn't have to be an everyday strategy. It could be a once every now and again strategy as you were just saying. The other thing as well is you can increase your risk when you've got a higher probability trade. So if you've got a strategy that's higher probability then you can increase your per-trade risk allowance. There's two takeaways there that I took out of that Sean.
Sean Donahoe: That's very much dead on the ball. Dead on the ball. It's really a case of looking at it a certain way, again, additional confirmation is required because of the higher risk or that it is a higher probability. But then I'm confident, and here's the thing, I'm confident enough in that strategy and the approach and the returns over time that even though I am doing a 5X of my usual position size I can sleep at night because I have that confidence. But again that only comes with laying that foundation.
Phil Newton: Because it's part of a calorie control diet.
Sean Donahoe: Absolutely, yeah. Eating bloody cardboard. So there you go.
Phil Newton: But I like that. That's interesting. I always forget that side of things because I always traded ... Technically I've always traded multiple strategies Sean. I always forget that is a way that you can start to scale up. Again it's not always a case of increasing position size, is a way to start scaling up. Especially if you've got to smaller count because if you're trading one contract then scaling up, it's not always a case of going from one contract to two contracts. Because technically you've just doubled your position size. There's other ways of doing it, particularly when you've got stocks and stock options or specifically stock options. There's lots of ways that you can increase your position size without having to increase your position size. You can start looking at different option strategy or strike selection.
Which is what Sean was just mentioning there, which is you're starting to add different strategies to the way that you trade. Again that will increase the frequency with which you trade as well.
Sean Donahoe: Very cool.
Phil Newton: I like it. Good advice there Sean. I've had to relearn some lessons there I think from my own personal viewpoint.
Sean Donahoe: Hey no, it just shows the different ways that we both trade and everything else that while we have the same base trading-
Phil Newton: We take things for granted after 20 years. I take things for granted so many times.
Sean Donahoe: The last question we'll do today for time purposes here is, "I keep exiting trades and then getting back in because I feel there's more meat on the bone. However sometimes I'm right and sometimes I'm only a little bit right and still lose money. How can I fix this?" I think this is a great one because this is something I used to do back in the day as well is I'd like, "Okay, boom, cap off my profits."
Phil Newton: You're doing the hokey pokey with your trades. You put your left-
Sean Donahoe: Left foot in, left foot out, .
Phil Newton: Yeah it's in, out, in, out, in, out. And then suddenly you get shaken all about.
Sean Donahoe: Indeed.
Phil Newton: I think it's one of those things that we've all done at some time. Some of us continue to do it while others think about how to prevent yourself from doing it. I think sometimes it's not a case of, "How do I do more of something?" I think this question's more of, "How can I do less of something?" Just thinking about the question I personally set a target. In a trade when my condition's set up I always set a target and I'm out. There may be more meat on the bone.
Sean Donahoe: It's a discipline thing.
Phil Newton: I don't care about it. Now if the trade's set up again I will reenter because that is-
Sean Donahoe: Well that's exactly it.
Phil Newton: But that's just the way I do it. It's difficult because we all want the home run trade. Even to this day I want the home run trade. We all do. But when you started to trade more frequently you reduce your position size, you start to trade more frequently, and as I keep saying with this farming analogy, farming vs hunting, if you've only got one position on and you're hunting for that wild boar to feed the family, if you don't spear the boar or find the food, the thing that you're hunting, fishing, the one ... Use the metaphor of your choice here. But if you're only looking for one thing you've got one position on you're completely and emotionally invested in that working out. Then you start to think, "I'll let it ride." You get too greedy, you want to re-enter, you start looking for more opportunity than there is actually available.
You know what I'm saying though Sean. But what it is, you've got the farming mentality and you're planting fields, you're planting crops you're not so concerned about that one position and having more in it because you've got a portfolio, you've got a field to manage, you've got lots of positions to worry about. I'm always setting a target, when that gets the target I'm out. If it sets up again it will come back on my radar. But I've got a portfolio, I've got this field to farm, I've got the crops to tend, I've got the land to till, I've got the irrigation to make sure that the ... You see what I'm saying. The farmer's not worried about one plant working out.
Sean Donahoe: It's like going for the ball when you've got a field full of rabbits.
Phil Newton: Yeah. It's just unnecessary. I think how can you fix that? It's the same suggestions we've gave many, many times. Reduce your position size and trade more frequently. It's counter-intuitive. And always set a target. When it gets there get out, don't worry about it. Jog on, look for the next one.
Sean Donahoe: Now there's one other strategy or angle to this I'd like to also put in, and this is if you think there's more meat on the bone and you want to capture that upside a little bit ... Now this is before you exit a trade, is take off half of your position. Take some chips off the table, leave a little bit on if you want to. If you really feel that there could be a little bit and you want to capture that that's fine.
Phil Newton: If you're strong, yes. Because viewpoints do change, no I agree.
Sean Donahoe: But generally I would very much back up what Phil's saying is set a target and who cares if there's more meat on the bone? Take it off the table, put it on what you've got a higher probability, when there's a better setup rather than a continuation because at the end of the day more opportunities, there's more fish in the sea. So there you go.
Phil Newton: Just a blending of the two there. What you could do is set a second target so if it blows past the first one because then it allows you that flexibility to say, "Well there's a bit more meat on the bone here because it's pushed through the first target quite quickly. Let's do a trailing stop to the second target or take half off and run it to the second." That gives you that flexibility to get the best of both.
Sean Donahoe: That's a valid point as well sir.
Phil Newton: Just thought I'd throw that one in there.
Sean Donahoe: Absolutely, a couple of different perspectives of a similar thing.
Phil Newton: You're making me think this week Sean. I'm not liking this, I don't like to think.
Sean Donahoe: I wondered what the sound of grinding gears and smoke-
Phil Newton: I just want to put the trades on. Stop making me work for it this week.
Sean Donahoe: There you go.
Phil Newton: Dance, monkey, dance.
Sean Donahoe: There you go. With that being said, let's rock on.
Phil Newton: Don't forget if you have a question you want to ask Sean and Phil just go to Tradecanyon.com/rtquestions and your question may be featured on a future show. Uh-oh, what's that smell? It's time to call out the Wall Street shenanigans, mainstream confusion and outright hijinks and hokum of so-called experts. Yep, it's time for bullshit of the week.
Sean Donahoe: Okay, bullshit of the week. This one is kind of a ... This one is a little bit of a head scratcher. I'm not sure how I feel about this one but I'm going to put it out there. There has been a story and I'll link to it on the site about market manipulation and an alleged ... I'm saying this with proper legalese-
Phil Newton: Tongue in cheek.
Sean Donahoe: An alleged whistleblower who's saying that the fear gauge, the VIX, is being manipulated by the markets with what they're calling painting the tape. In other words they are posting but not executing certain trades ... Now this has been talked about ... I actually think we've talked about this before at some stage in one of the earliest podcasts. But they're basically talking about how the fear gauge is being rigged and they're doing this position placing but not executing and it changes the volatility, as they call it painting the tape a certain way because it's being reported but not actually executed to create that manipulation. Then they're also talking about how the XIV was, because of this, "manipulation" and I'm putting this in virtual air quotes in case you can't tell by the tone of my voice.
Which we talked about last week which collapsed and the SVXY and stuff like that took some serious hits. But they're saying this was as a result of manipulation. Now here's the thing, if there was a lot of this going on ... This is why I call it bullshit. The SEC and the CFTC, if they saw and tracked a lot of this painting of the tape or this kind of manipulation they'd be all over it like a rash and the amount of money you have to virtually throw out there to paint the tape on something as liquid as the VIX, is what we're talking about here, the VIX. I don't know what the hell is going on back there, I just heard a big bang from the other room.
Phil Newton: I heard a big crash in the background there.
Sean Donahoe: Gosh, that would help.
Phil Newton: Maybe that was the FBI breaking into your house. "We've got him boys, we've got him."
Sean Donahoe: Oh dear, the boys in windbreakers. We've got to avoid that, but .
Phil Newton: I know what you're saying Sean but at the same time it's old news. When I say it's old news, this isn't new news. Personally, the guy who's talking, it was anonymous. Tell me something that I don't know, people paint the tape all the time. But you're right, to do it on something as liquid as the VIX you need deep pockets and lots of money. But it's not illegal to place orders in the markets. For that reason, that's why the SEC is not over it like a rash as far as I'm concerned because there's nothing technically ... All right, is it immoral? Yes, it's manipulating the markets but it's within the confines of what you can do. If you're going to prevent people from putting orders in the markets and then canceling those orders, if that act becomes illegal then the markets will stop working. So yeah, complete bullshit news. The guy's anonymous for a start, and painting the tape?
It's difficult with liquid markets, it happens all the time in penny stocks. They call them pump and dumps where you kind of ... It's surprising, it happens in cryptocurrency. You used to drive prices up. They're basically swapping prices back and forth, back and forth, painting the tape and it's driving prices up. There's no substance behind it. It's old news as far as I'm concerned and if there was any substance behind this the guy would be called a whistleblower and his name would be there. The FBI would have him somewhere and they'd have a big list of names of the people who were doing it and there'd be doors being kicked in all over the place. But there ain't so it's probably just a slow news day. "Let's drag this piece of crap up and put it on the front page of a reputable financial website."
Sean Donahoe: Absolutely.
Phil Newton: Which shall remain nameless. Link in the show notes.
Sean Donahoe: Absolutely, and the fact that they're saying how this is being entered but not executed ...
Phil Newton: I can paint the tape right now. I can put an order in and cancel it, technically I'm doing exactly the same thing. You can't make it illegal. I know what you're saying John, this is what makes it bullshit. It's complete, utter nonsense. Nothing will be done about it, it's just a scaremongering piece of slow news news item.
Sean Donahoe: Absolutely. So there you go. That's the BS of the week and with that being said that is the end of this week's show. As I say a little bit of conversation corner here, a little bit of random .
Phil Newton: Witty banter dare I say. I would like to think that it was witty Sean.
Sean Donahoe: Abso-damn-lutely. We're having a virtual pint across the ocean and it was an interesting show.
Phil Newton: The sun is over the yard arm. Why not?
Sean Donahoe: And like you said there was some stuff to think about. There was some stuff to think about, some different angles, some different aspects and that's what we do. With that being said that's it for this week's show. It has been a corker, this has been a virtual pint across the ocean here with my friend Phil in this unscripted podcast. But it was bloody good fun, a lot of thought-provoking, different angles that we take and some interesting aspects that we usually don't talk about. So Phil, any last words?
Phil Newton: No I have to agree. The sun is over the yard arm and a glass of the short stuff is certainly in my hand. But it's been quite an interesting show simply from the points of, firstly you've made me think and I don't like to think as you well know. But there's been lots of interesting little snippets. Some of the things that we perhaps tend to overlook sometimes, you've managed to squeeze that out of us this week so it's been a great show. Lots of insightful information.
Sean Donahoe: Cool, and if you enjoyed the show guys, ladies and gentlemen, go to Tradecanyon.com/rebeltraders where you can leave us a five star review because this really helps us, it encourages us. And leave us your opinion. Review us on your favorite way to hear us and as I said that helps us reach more traders and investors just like you.
Phil Newton: Absolutely. If you also want to get to us on the social media things, the Facebook or the Twitter machine, you can contact us at the same link. Tradecanyon.com/rebeltraders. Didn't we have something? Oh yeah, I think you can also get access to the ... I can't remember the name of it, it's slipping my mind.
Sean Donahoe: Universe of stocks? We've got the trading-
Phil Newton: Universe of stocks, that was it. Yeah, you can also follow the links there and we'll get that over to you as well because we were talking about that this week. So Sean, what have we got in next week's show?
Sean Donahoe: We're going to be talking about Freudian trading. This is a little bit of what we touched on earlier on is the psychology of trading, the different pressures and mindsets that can dramatically affect your trading success. We're going there to talk about different biases.
Phil Newton: Good, for a moment Sean I thought you were going to ask me about my mother.
Sean Donahoe: Well if you want to lay down on the couch and tell me all about it ...
Phil Newton: There was Freud into all that sort of stuff.
Sean Donahoe: Well he's a little weird in that regard. But yeah, we're going to talk more about the psychology, not the tell me about your mother and everything else. And for Mrs. Newton who's listening, it's okay, I won't put him on the couch and we won't be talking about anything weird. So we're all good.
Phil Newton: I think her immediate reaction would be she's fine and, "I ain't dead yet."
Sean Donahoe: Very Granny Weatherwax.
Phil Newton: Granny Weatherwax.
Sean Donahoe: Awesome stuff. Terry Pratchett references we'll throw into every show. It's like that hidden Easter egg, we'll find the hidden Terry Pratchett reference in every show.
Phil Newton: It's somewhere.
Sean Donahoe: With that being said ladies and gentlemen we're going to rock on out of here. Take care and we'll see you all next week.
Phil Newton: Bye for now.
Automated: For more cutting-edge trading advice and a free trader workshop to help you build a personalized trading plan and make smarter trading decisions go to Tradecanyon.com now.
Phil Newton: Futures, options on futures, stock and stock options trading involves a substantial degree of risk and may not be suitable for all investors. Past performance is not necessarily indicative of future results. Trade Canyon Incorporated provides only training and educational education. If you actually understood and listened to this then that means you are awesome. Congratulations and well done. Notice, this product may contain nuts.

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[00:00:10] Show Introduction

[01:47] Phil: Talking about topical things, we might as well get started. There's been a news report and the market has gone bat shit crazy for absolutely no reason.

[02:27]Sean: The CPI report coming out it's what we call a nothing burger as far as I'm concerned, but being that the markets are jittery as Phil just said to me a few moments ago, what's going on? I said you know what, the CPI numbers have just come out and it was basically what the bloody hell is that? Because Phil's in the UK and I'm in the US.

[02:50]Phil: I obviously know what that is. But I thought I'd missed something because everything, not just one thing, was moving, which I'm not too bothered about. But literally everything across the board had moved - currencies, futures, Forex, stocks, pre-market. Everything was going mental and that is unusual. It's not something you see on a regular basis. I'm looking at the headlines and as far as I'm concerned there was nothing driving it. Unless some random event has happened, what's going on? Literally 20 minutes later the NASDAQ shrugged this off straight away as I'm looking at the futures market at the moment. You've just gotta beg the question of why do the markets move like this? I think they're behaving irrationally right now. It's an opportunity to get in on something, which I'm very anxious to do but you've gotta ask why they're irrational. What's your view on that, Sean?

[03:57]Sean: Well it's funny, this is exactly something we're going to be talking about probably in the next podcast in a little more detail. It's a little more of the psychology, and one of the things we were talking about is recency bias. We've had all the volatility in the markets given last Friday through Monday, a big shake-off in the markets, a big correction. I think what made everyone's butts clench just a little, they were wondering is this a correction or is this a crash? We had the flash crash.

[04:29]Phil: Everyone's nervous. Everyone's on hair trigger.

[04:31]Sean: Everyone's looking for a reason to take the chips off the table. We had a little bit of a kick-back, little bit of recovery, and it's really driven by nothing but fear and okay, we've been on a nine-year bull run. This CPI report comes out on a regular basis, all the time, and I really think that because of the correction last week, people are just a little nervous and they're looking, and I think a lot of this is driven by the news media as well, looking for a great hype story to get attention.

[05:08]Phil: If it bleeds, it leads is the old phrase. I think you're right, Sean. This is hype. I'm looking at 60-minute index futures right now and they've shrugged this off. They're still off on the day, but it looks like they're gonna shrug it off and I'd imagine they should be recovered as we get into the main session. The markets, as you said, are hyper sensitive.

[05:38]Sean: It's a blip on the radar.

[05:42]Phil: What are the talking heads talking about? I don't know if we're calling it flash crash but it could fall into that category. Certainly it is a point move. It's the biggest one from the DOW's point of view. The markets are oversensitive. I think because of that over-sensitivity, it's been sensationalized. It's hyperbole because the numbers themselves, there's really a great bit of difference as far as I'm concerned. It put me in mind of 2004, 2005, because on a regular basis when an important report came out like this one, the markets used to go absolutely mental. It was a fabulous time to trade news reports, but then a couple of years later, the oomph went out of these news reports and then for the next decade, whenever one came out, it was just a big bowl of nothing. The markets didn't react in the same way. As far as I'm concerned, this is one of the bigger reactions we've seen in a many a decade. It just doesn't happen on a regular basis anymore to make me interested in trying to trade it.

[07:02]Sean: That's basically it. At the end of the day, it's the news media and financial networks needing something to really get the eyeballs and keep the focus.

[07:14]Phil: Do you mean to say, Sean, that they're trying to sensationalize a boring subject?

[07:20]Sean: Just look at the numbers. The CPI, consumer price index, kind of a measure of inflation. They were expecting 1.9%, it came out at 2.1%. Guess what? That's bugger all real difference. But again, anything to sensationalize. And a lot of people don't give a monkey's. But the concern or the fear is, that is being pushed forward as a story is that any excessive inflation is gonna give more credence to the Fed raising interest rates faster than expected. Now they're projecting three interest rates hikes this year. Let's face it - the economy is booming. We're in really good times. Tax cuts coming in, it's creating a lot of excitement. A lot of money is flowing and the Fed said that if the economy is going up, we're going to increase rates. It's expected. It's all telegraphed. It's well-communicated.

[08:10]Phil: And that's positive, well-advertised, like the deal with oil. 2003, 2004, it was well-advertised that oil prices were gonna go up. It was explained to the layperson that it would impact them at the fuel pumps. When these prices hikes happened, in this case interest rate increases, people aren't gonna be protesting in the streets. If you remember in the mid-90's when oil prices were similarly soaring back then, people were out protesting in the streets. Fast forward to when a similar event happens again, they're not protesting because it's well advertised. Interest rates, this time around, I think it's a good thing that it's been so well-advertised. We're gonna put them up not just once, but maybe a couple of times this year. Be prepared for it. I don't think we're gonna see the markets react in anything other than a knee jerk, spasmodic reaction of okay, today's the day. I think they'll be just fine. I like the word you used - telegraphed. It's well-telegraphed.

[09:35]Sean: Very much so. This leads into a thing I was thinking about for a future show. It's a little bit like kung fu. Take any martial art because people may or may not know I used to be nuts about martial arts. One of the things in martial arts, does their opponent telegraph their next move? If they're coming in and leaning back on their left foot, and they're twisting their hips, you know they're probably coming up with a right roundhouse.

[10:17]Phil: A subtle indication. A novice might look to where they're aiming. The markets will similarly telegraph about what's going to happen in the future. I think that's a good thing. There's no shock to the markets. Years ago, you could get away with it and I think now the governments especially need to be very vigilant in notifying what they're doing, why and when. I think that's a good thing, because shocking the markets post-financial crash is a bad thing. That's the lesson they've learned. They're keeping everyone informed. I think that's a good thing.

[11:10] Sean: Absolutely. Using the same martial art analogy, when you see something being telegraphed, you can pivot position, prepare for it.

[11:19]Phil: You might still get hit in the face, but you can prepare for it.

[11:20]Sean: There you go. Or you can block it or you can duck. The markets are just looking for any reason to duck and cover and take the money off the table and put it in the pocket and run to the back of the room and see what happens.

[11:43]Phil: To stick with the analogy, Sean, I think Sean Connery in the Untouchables said it a couple of weeks ago the markets brought a gun to a knife fight. Everyone's a little bit jittery at the moment and it's a knee jerk overreaction to an otherwise normal or semi-normal news item release. If the report had been released prior to this market sell-off, I would imagine that the markets would not have reacted in the way they have been. It would have been a little bit of a hiccup but nothing to the magnitude we've seen today. The markets are off what, 22 S&P points and 200 or so DOW points? It's shrugging off but it would not have reacted in the way that it did. Don't panic, as we said last show.

[12:48]Sean: I won't do the -back in 1991 when the tanks were rolling through Iraq and saying there's nothing to see, nothing going on. It's one of those things though with our style of trading I've got to give us a pat on the back somewhat because we're immune. We're looking at these markets like it's a hiccup, a pause, and a recovery from the correction or the psychological bounce back. We can position ourselves with time to be right. We look at the markets. We don't care about this. Funnily enough, we have a lot of our best conversations before the show because we're just generally chit chatting like we are now.

[13:45]Phil: We're chewing the fat, aren't' we?

[13:48]Sean: Abso-bloody-lutely. Just like well this will be forgotten about tomorrow. That was realization that there was nothing going on and that is our style of trading. We look at the general momentum, the general attitudes. We need volatility. It's going to happen very soon. That's the beautiful thing because you can have your portfolio adjusted for what's going on in the markets or expectations of things, rather than a lot of what I call home run traders who are looking for that one big move and they're waiting, waiting, waiting.

[14:31]Phil: Swinging for the fence.

[14:30]Sean: We'd rather take multiple positions, a quick first base, and load up the bases.

[14:40]Phil: It's a higher probability trade. Swinging for the fence, sure, you might get on the NVDA-type trade where it doubles or triples in a short space of time relatively speaking over several years. Try and do that every time. It's difficult. It's stressful. We've compared this to hunting vs. farming many times. Trying to swing for the fence is that hunting, I need to be right otherwise I'm not going to eat. I'm going to go hungry. That brings its own levels of stress and anxiety, vs the portfolio-style of approach which is to trade smaller and more frequently and have lots of occurrences in many different positions. Lots of fingers in lots of pies. You're then not dependent on one position working out. You're farming, you've got a crop. You can just pull the ones that are ripe and ready to farm and the ones that don't work out you can literally forget about. It doesn't matter. You know there's gonna be a small portion of your crop that's not gonna work out, but you've got a crop is the point. What we know is that 65% of the time, we're making money. We're right. We know that 35% are gonna be plowed back in. We're not gonna do anything with them. It's a numbers game. But you've got that opportunity to farm vs hunt. I think so many people are focused on trying to hunt and it's a very unique skill set to develop. I have done it and I can do it, but it raises unnecessary anxiety and emotions when trading.

[16:18]Sean: Very much so. I'd much rather be relaxed trader.

[16:28]Phil: I want feet up. I want the smoking pipe on. I want the slippers on. I want the nice pipe, a good book, and a brandy. That's what we want, isn't it? Feet up, pipe smoking, and reading the paper. Don't want to be glued to screen, stressing out over one position.

[16:43]Sean: Exactly. To my mind, it's oh look at what's going on. Look at my portfolio. I'll find my opportunities, put them on, walk away, and I enjoy the rest of my day.

[16:54]Phil: It's farming at its finest. I'm quite passionate about this particular subject. I've mentioned it many times before. Think about it, if you plant a field full of your crop. Some of it will grow better than others, but imagine that you can plant your crop and your field and you've got your irrigation in place, twice a day. It waters the fields for you. You can keep track of the soil acidity, the alkali. You put the fertilizer down. You walk away and you let the crop grow. You let the field do what it's gonna do. It takes time for those crops to grow. It's more relaxing. When you've planted the crops and the fields full of lettuces, you literally walk away and let nature take its course. It's far more gratifying to trade that way because you've not got the stress of trying to grow one lettuce at a time, and then you're completely and wholly dependent on one lettuce growing at a time. If it doesn't grow, you're buggered. You really are snookered.

[18:23]Sean: That's exactly it.

[18:28]Phil: Farming, for me, works every time. Till the lands, plant the fields, and your crops will work or they won't work. Even if some of them work out, it will cover the cost of the ones that don't work. It's the law of averages. You only get that when you start trading more frequently.

[18:42]Sean: That's exactly it. We've talked about these many times. We developed these strategies and have refined the reasoning behind it. Like this farming method is a way to describe it, but the method's really come about because we developed these strategies for busy traders like me. I'm busy. I run multiple businesses. I've got my fingers in multiple pies and I use trading as a way to make my profits from all of my other ventures grow. Basically every dollar now becomes worth $2 or $3 over a period of time, or $5, $10, what have you. For every business I run, even the ones with slim profit margins, that means the dollars plowed into my trading grow. I developed a lot of my attitude and my approach based on that, and Phil's developed his basically because we doesn't want the stress of being a full-time trader.

[19:51]Phil: I was 12 years a day trader. That takes its toll. I just want to do other things with my time. I don't want to be at the computer all day, every day, flicking through chart after chart. It is as simple as that. I think it's funny that for different reasons, we came to a very similar methodology. You're busy, you don't have the time. I don't want to be busy and I want more time.

[20:23]Sean: And it works for a lot of different people for that very same reason. It just stops you being obsessed with things like CPI reports or whatever the issue du jour may be.

[20:39]Phil: The only reason we were chewing the fat about it earlier is because everything was moving. It was unusual. It wasn't really affecting my portfolio - it's affecting a portion but not the other. It's favoring the other portion. Guess what. We've got a field full of flowers. Some are gonna grow. Some are gonna bloom. Some are gonna die and wilt. It ain't over until they expire because we're trading with options. Today is a little bit of a knee jerk reaction. That's it.

[21:10]Sean: Funny stuff. Okay with that being said, let's move on.

[21:23]Phil: Jog on, kitty.

[00:21:24] Rebel Trader Tip of the Week

[21:44]Sean: Okay so, this week's Rebel Trader Tip of the Week. Don't run before you can walk. You've heard this in many different things, but one of the things I really like to empower traders with is laying that foundation. You have to have a foundation that you can build on. If you don't, you're gonna trip and go head first into a margin call. We know a few people who had their margins called because they were on the wrong side of volatility plays and things like that. If you create a foundation that allows you to be adaptable to any market conditions like we said, you can build on that with any different flavor you might bring to your trading. Mine and Phil's flavor is very similar.

[22:53]Phil: We've got a fundamentally-based foundation. If you've got that knowledge or skill set, you can build whatever house you want on it.

[23:07]Sean: Phil is very much a chart pattern trader.

[23:15]Phil: I'm very visual, very pattern-oriented.

[23:19]Sean: And for me, I'm very much, I lean toward volatility. I lean toward AI, although I do the chart pattern and everything else as well, but I'm looking at a lot of cluster-based analysis with some of the stuff I do with AI and algorithms, although our buildings look very similar.

[23:47]Phil: We've both painted them a different color. You've got a patio front, I've got a walk-through lounge.

[24:00]Sean: It's our own individual style we've built on that because of that solid foundation. You can't just jump into the markets and be Gordon Gekko or Warren Buffet.

[24:13]Phil: Especially because they ended up being in prison. You don't want to do anything stupid that gets you arrested.

[24:19]Sean: Indeed.

[24:19]Phil: We're talking lots of different stories and analogies, maybe I just want to phrase it a different way. All we're talking about really is have a plan. It could be as simple as what you want to make based on your background. Mine is very simple because I'm a simple farm boy, whereas Sean's is more technical in nature because he's got that technical, computer-coding background. It took my 20 years of stripping it down from building it up to complex systems. I firmly believe you do not need to know much to make this work. My first strategy was a very simple moving average crossover system and all that was was a framework to help me recognize what phase of movement the markets was in. I used to use moving averages to help recognize whether the markets were ranging or trending and then as such I could adopt the right entry mechanism and based on patterns, I could select the right target. The point is, it's very simple. If the moving averages were crossed bullish, and the market's going up, I'm gonna be buying pullbacks and vice versa. If the moving averages were crossed down, I'd be selling rallies. And then I add another identification method using moving averages if the price was range bound. As a new trader, it was a nice, simple framework to basically help determine what I should be doing in the markets. That is as simple as it gets. When the moving averages cross, look to trade pullbacks in that direction. There's a good chance the markets are trending in that direction. It doesn't have to be complex. Add in a target and some money management, but it can be a one-page strategy. That gives you the foundation, a mechanical way of approaching the markets. As you were saying, you can then start to layer on discretionary elements as your knowledge and skill grows, as you evolve your personality in trading. Mine evolved from day trading to swing trading with going from very much intensive, screen-based trading to the exact opposite now, which is as little time as possible to get the same results. As you evolve as a trader, your strategy will change on the specifics. That foundation form will change on the specifics. That foundation form is still the same. It's which way is the market going - up, down or sideways? That hasn't changed in 20 years.

[27:13]Sean: That's exactly it. I came to this with a similar mindset. We want to keep it simple. For me, I want to keep it robotic so it can be algorithm-itized, if that's even a word. It is now. I wanted to be simple, check box, so it can be rule-based, decision made, and then I can automate it, and again, that's kind of where my background comes into this. You don't have to overly complicate it. Look how complex my system is and I'm the only one who can do it, and then you create all sorts of single points of failure. The simpler you can keep it, the faster it can be executed, the more it can be adapted to particular environments, and then boom- you have a foundation you can evolve, twist, tweak, and turn into your particular advantage.

[28:06]Phil: Consider it like default settings. Discretion is you're tweaking under the hood with your knowledge and experience. You recognize something that can't quite be quantified yet. But if you ever get beyond that you can always hit the reset button and go back to default settings. That's your base level strategy. As you're going through that, looking for opportunities, it might be that you go, there's your layered on top, your discretion. It might be that you spot something. You've just learnt about Elliot Wave for example. Ooh, I think we're in wave 5. That's why it's important, because if you're ever not sure what you should be doing, it's that foundational strategy. It's the base level plan that you set in stone. That's what you're gonna do every day, every single time.

[29:07]Sean: That's exactly it. Lay and develop a foundation and use that to create the home of your dreams. Then we can rock on from there. So, with that being said, let's jog on, kitty, as my friend over here likes to say.

[00:29:28] Quickfire Round

[29:39]Sean: So, with that being said, jog on kitty. What was that from?

[29:47]Phil: Hot Fuzz. Run Fat Boy Run?

[29:52]Sean: It was a Simon Pegg movie.

[29:56]Phil: No it was Hot Fuzz. Jog on kitty.

[30:00]Sean: I've been saying that now for the last few days and it's stuck in my head.

[30:06]Phil: It might even have been used in Shaun of the Dead.

[30:10]Sean: Might well have been again. I think we're both huge Simon Pegg fans.

[30:13]Phil: I think it's a phrase they've used in all of them. It might be that recurring joke.

[30:18]Sean: There you go, anyway. Let's have a look in the Rebel Trader mailbag here. The first one here is, I've been trading smaller positions for a while now, but how do I know when it's time to scale up those smaller positions into larger positions? That's kind of an interesting one because we keep telling people to scale down, but how do you know, if you're trading smaller, when it's time to scale up?

[30:44]Phil: There's a couple of ways you can do this. I'm of the view of trade more frequently. One way is to start being a bit more aggressive by trading a bit more frequently. You can keep the small position size, but you may increase your universe of stocks. My universe of stocks is about 500. That means I've got the 500 stocks that I believe are the best and only stocks that I need to look at based on how they move, liquidity, and a few other factors...

[31:18]Sean: Can I just throw out there guys that you can download our exact universe of stocks from the website. We give it to you for free.

[31:25]Phil: Give it away. Give it away, give it away, give it away now.

[31:28]Sean: Oh my lord, I knew he was gonna go there.

[31:32]Phil: Phil was gonna rap! Why not, it's February the 14th, it's my little loving gift to the world.

[31:37]Sean: Dear, please can we get a receipt for that and take it back to the store. But yeah, we give our internal universe of stocks away. It's one of the most important documents inside our business, but we'll give that to you. Phil is our senior analyst as well as many other hats that he wears within Trade Canyon.

[31:55]Phil: Jerk. Idiot. General fun time boy.

[32:02]Sean: For a fee. Dear me. We do give that away so you can download the stocks that we trade and our students trade every single day. Outside of the little plug for that, you can access this and again, focus on this particular group where you have the prime opportunities as we like to look at. Go ahead with what you were saying there.

[32:28]Phil: I lost my train of thought, thanks Sean. I now know how that feels! Revenge is sweet. So universe of stocks, mine is about 500. While I advocate passive trading, I'm looking for at least one trade every day, potentially 2-5. It depends on what sets up. I've got this universe I can draw from. It might be when you start out, your universe could be 5 stocks. It could be 15 or 20. One way of increasing or to scale up might be to increase the universe of stocks to look at more opportunity. You might go from an average of 3 or 4 positions being open at once to 4 or 5 or 6 or 7 or 10 or 12 or 15. You can increase the frequency without increasing your individual per trade risk. For most people, that's probably what you'll do. You'll start with a small pool of stocks and slowly increase as your confidence builds. It might be you've got to that point, you're averaging one trader a day with a rolling portfolio, you've got a nice comfortable account size that justifies it. One simple way would be to start increasing your risk as a percentage of your portfolio. For most people, that point is when you get past $100,000 in your account. A half to one percentage point of your available equity is what I often suggest to people. It allows you to trade as small as possible, but then you can trade frequently. Most people get past that $100,000 mark, that's when it starts to get interesting. But then you're gonna start increasing from a $500 per trade risk to $550 or $600, as a percentage of your overall portfolio.

[35:12]Sean: Yeah. Compounded positioning.

[35:15]Phil: Personally, I wouldn't stress about this. One trap that can be fallen into is evaluating it on every position. Every time you put a new trade on, you look at what your cash position is. You're constantly stressing over it. I work it out once a month. It's nice and simple. I'm not stressing over it. I'm gonna have a month of position size. I'll evaluate it at the end of the month and then reevaluate it for the following month. I'll do that rolling portfolio with that position size. It's a lazy approach. It could be more efficient. We go into this in our training, but to give you the back of the envelope version. If you're starting out, increase your number of positions, and then as a percentage of your overall account. Usually I'm gonna go for a half percentage which will give you a dollar amount, then work out your position size as your personal risk.

[36:30]Sean: That's very cool. I could also take it and twist it around. My average position size is 1%. It allows me to break up my portfolio. One thing I do, I have a couple of strategies that are very high probability strategies that are very much based on particular environments. If you want to use a scale of 0-100, these are the 1% hands I might like to play.

[37:33]Phil: They don't happen frequently. Once a month, once a quarter.

[37:51]Sean: I'll find one a week. And then I'll scale up and go from 1% to 5% because I know that's a really good trade. 1% or do I do 5%? What's my remaining checkboxes? Okay are they all checked? 5%. That is a big position, or a larger position, but if I have a much higher percentage chance of being successful on that then boom, golden. I've got that foundation.

[38:27]Phil: Two takeaways that I heard there - add a strategy. If you've got one methodology to find, filter, and sort stocks, you can add a second. It can be a once and every now and again strategy. The other thing is increase your risk when you've got a higher probability trade. So if you've got a strategy that is higher probability, you can increase your per trade risk allowance.

[39:09]Sean: Dead on the bull. It's really a case of looking at it, additional confirmation is required because of the higher risk or that is a higher probability, but then I'm confident enough in that strategy and approach and returns over time, that even though I am doing a 5x of my usual position size, I can sleep at night because I have that confidence. But it only comes with laying that foundation.

[39:45]Phil: I like that. I always forget that side of things because I've always traded multiple strategies. I always forget that's a way you can start to scale it up. It's not always a case of increasing position size as a way to start scaling up, especially if you've got the small account. If you're trading one contract, then scaling up is not always a case of going from one contract to two contracts, because you've doubled position size. There's other ways of doing it when you've got stock options. There's lots of ways to increase your position size without having to increase your position size. You can start looking at different options strategy or strike selection which is what Sean was mentioning. That will increase the frequency of what you trade as well. Very good advice.

[40:58]Sean: It just shows the different ways we trade. So okay, the last question we will do today for time purposes is, I keep exiting trades and then getting back in because I feel there's more meat on the bone. However, sometimes I'm right, and sometimes I'm only a little bit right and still lose money. How can I fix this? I think this is a great one because it's something I used to do back in the day as well. I'd cap off my profits.

[41:32]Phil: Doing the hokey cokey with your trades. You put your left foot in... in, out, in, out, and suddenly you get shaken all about. It's one of those things we've all done. I think sometimes it's not a case of how do I do more of something, I think this question's more how can I do less of something? I personally set a target. I'm in a trade. When my position sets up, I always set a target and I'm out. There may be more meat on the bone and I don't care about it.

[42:08]Sean: It's a discipline thing.

[42:11]Phil: If the trade sets up again, I will re-enter.

[42:15]Sean: That's exactly it.

[42:18]Phil: But that's just the way I do it. It's difficult because we all want the home run trade. Even to this day, I want it. But when you start to trade more frequently, you reduce your position size, and as I keep saying with this farming analogy, farming vs hunting. If you've only got one position on and you're hunting for that wild boar to feed the family, if you don't spear the boar, you're completely and emotionally invested in that working out, and then you start to think I'll let it right. You get greedy. You want to kind of re-enter. You start looking for more opportunity than is available. Whereas you've got the farming mentality and you're planting fields, you're planting crops, you're not so concerned about that one position having more in it because you've got a portfolio. You've got a field to manage. I'm always setting a target. When it gets to that target, I am out. If it sets up again, it will come back on my radar. But I've got a portfolio to look after and the farmer is not worried about one plant working out.

[43:47]Sean: It's like going for the boar when you've got a field full of rabbits.

[43:50]Phil: Yeah. It's just unnecessary. So how can you fix that? It's the same suggestions we've given many times. Reduce your position size and trade more frequently. It's counter-intuitive. And always set a target. When it gets there, get out. Jog on. Look for the next one.

[44:09]Sean: Now there's one other angle, if you think there's more meat on the bone and you want to capture that upside before you exit a trade, take off half your position. Take some chips off the table. Leave a little bit on if you want to. If you really feel there could be a little bit. But generally, set a target and who cares is there's more meat on the bone. Take it off the table and put it on where you've got a higher probability of a better setup, rather than a continuation. At the end of the day, more opportunities, more fish in the sea.

[44:51]Phil: Just blending of the two there, you could set a second target. If it blows past the first one, it allows you that flexibility to say there's more meat on the bone here. Let's do a trailing stop to the second target or take half off and run it to the second. That gives you the flexibility to get the best of both.

[45:22]Sean: A couple of different perspectives of similar things.

[45:24]Phil: You're making me think this week, Sean. I'm not liking this. I don't like to think.

[45:28]Sean: I was wondering what that sound of grinding gears and smoke was coming from. So okay, with that being said, let's rock on.

[00:45:38] Bulls**t of the Week

[46:05]Sean: Okay, Bullshit of the Week. This one is a little bit of a head-scratcher. I'm not sure how I feel about this one. There has been a story about market manipulation and an alleged whistleblower. They're saying that the fear gauge, the VIX, is being manipulated by the markets with what they're calling painting the tape. In other words, they are posting but not executing certain trades. I think we have talked about this before in one of the earliest podcasts. They're basically talking about how the fear gauge is being rigged and they're doing this position placing but not executing and it changes the volatility and as they call it, painting the tape in a certain way, because it's being reported but not actually executed to create that manipulation. And then they're also talking about how the XIV because of this "manipulation", and here's why I call it "manipulation". The SEC and the CFTC, if they saw an tracked a lot of this painting of the tape, they'd be all over it like a rash. The amount of money you have to virtually throw out there to paint the tape on something as liquid as the VIX...

[48:16]Phil: I know what you're saying, it's old news. When I saw it's old news, it isn't new news. The guy you're talking about was anonymous. Tell me something I don't know. People paint the tape all the time, but you're right, to do it on something as liquid as the VIX, you need deep pockets and lots of money, but it's not illegal to place orders in the markets. For that reason, that's why the SEC is not over it like a rash as far as I'm concerned because there's nothing technically wrong. Is it immoral? Yes, it's manipulating the markets, but it's within the confines of what you can do. If you're gonna prevent people from putting orders in the markets, and then canceling those orders, if that act becomes illegal, then the markets will stop working. Complete bullshit news. Painting the tape, it happens all the time in penny stocks, they call them pump and dumps. Surprisingly, it's happened in cryptocurrencies to drive prices up. They're basically swapping prices back and forth, painting the tape, and it's driving the prices up and there's no substance behind it. It's old news as far as I'm concerned. If there's any substance behind this, the guy would be called a whistle blower and his name would be there, the FBI would have him somewhere and they'd have a big list of the people doing it, doors being kicked in all over the place. But there ain't. So, it's probably just a slow news day.

[49:48]Sean: The fact that they're saying this is being entered but not executed...

[50:01]Phil: I can paint the tape right now. I can put an order in and cancel it. Technically, I'm doing exactly the same thing. You can't make it illegal. This is what makes it bullshit. It's complete and utter nonsense. Nothing can be done about it. It's just a scam-mongering piece of slow news item.

[50:18]Sean: So there you go, that is the BS of the Week and with that being said, that is the end of this week's show. A little bit of conversation corner here. We're having a virtual pint across the ocean and it was an interesting show - some stuff to think about. Some different angles, some different aspects, and that's what we do. And with that being said, that's it for this week's show, this unscripted podcast. So Phil, any last words?

[51:07]Phil: I have to agree. The sun is over the yardarm and a glass of the short stuff is certainly in my hand. It's been quite an interesting show simply from the point of little snippets we tend to overlook sometimes, we've managed to squeeze out of us this week. Lots of insightful information.

[51:33]Sean: Cool. And if you enjoyed the show, guys, ladies and gentlemen, go tohttps://richardgrannon.wpengine.com/rebeltraders/, where you can leave us a five-star review because this really helps us, it encourages us and leave us your opinion. Review us on your favorite way to hear us and as I said, that helps us reach more traders and investors just like you.

[51:49]Phil: Absolutely. If you also want to get to us on the social media things, the Facebook or the Twitter Machine, you contact us at the same link,https://richardgrannon.wpengine.com/rebeltraders/. I think you can also get access to the universe of stocks list and we'll get that over to you as well. So Sean, what have we got in next week's show?

[52:15]Sean: We're gonna be talking about Freudian trading. This is a little bit of what we touched on earlier on, it's the psychology of trading - the different pressures and mindsets that can dramatically affect your trading success. We're going to talk about different biases.

[52:32]Phil: Good. For a moment, Sean, I thought you were gonna ask me about my mother.

[52:38]Sean: Well, if you want to lie down on the couch and tell me all about it...

[52:41]Phil: Wasn't Freud into all that other stuff?

[52:43]Sean: Yeah, well he's a little weird in that regard, but we're gonna talk more about the psychology, not the tell me about your mother, and for Mrs. Newton, who's listening, it's okay. I won't put him on the couch and we won't be talking about anything weird.

[53:00]Phil: I think her knee jerk reaction would be she's fine and I ain't dead yet.

[53:10]Sean: Awesome stuff. Terry Pratchett references we'll throw into every show. It's like that hidden Easter egg. With that being said, ladies and gentlemen, we're gonna rock on out of here. Take care and we'll see you all next week.

[53:20]Phil: Bye for now.

Resources & Links Mentioned in This Week's Show

3 Key Takeaways From This Show

  • Never take a news story at face value. Check, Verify and Validate and see how it affects you
  • News networks make money from attention, don't be distracted by the hype
  • Always be aware of your portfolio exposure and balance. If you biased one way or the other is it part of your overall strategy based on the market conditions or do you need to balance out?

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