who we are

Below is an excerpt from an interview by a family friend doing research for a college paper on economics (not sure if I was a good pick or not, but it was a fun interview).

J.L.: How long have you been trading and what got you into it?

Scott: I bought my first shares of stock in I believe it was 2004, I think it was Allegiant Airlines and I’m sure I lost money on it [laughs].  This was early in my engineering career and the first time I had disposable income, I continued dabbling in stocks like DryShips and other big names of that era with the buy and hold approach up to 2007-8 and got a solid beating along with most everyone else holding long during the 2008 Credit Crunch.  I had absolutely no idea what I was doing and any gains I had up until that point were purely due to the bull market and nothing to do with anything I had to offer [laughs].

Pretty sour on the stock market at this point, I was introduced to Forex from a friend who was in the James16 Group which at the time was a popular educational group with notoriety gained through the ForexFactory web forum.  I really enjoyed the group and the market.  I liked the ability to trade 24hrs a day so I could do it in the evenings after work.  Forex is where I learned Technical Analysis and Support / Resistance especially was absolutely pounded into us in the group.

J.L.: But you trade Futures now though, correct?

Scott: Right, the shift from Forex to Futures was gradual and I’ve been trading Futures for about 12 years now.  I don’t remember consciously wanting to stop trading Forex, my focus just gradually became Gold Futures of all things [laughs] because at that time it was a real mover in the early Globex session along with the Aussie Dollar so I traded Gold after getting home from the day job.  Then later as I ditched the day job, the focus shifted to Crude Oil Futures and now for the better part of 4 years its been the S&P and NASDAQ Futures.

J.L.: How has your approach to trading changed over all that time?

Scott: My timeframe has shrunken and I’ve become much more selective of trades.  Getting beaten up for years in the market, I’m really just tired of taking dumb losses, so now my goal is to sit and do nothing if I don’t get my quality trade setup and that is much harder than it sounds.

J.L.: So what about Order Flow, isnt that a big part of what you look at?

Scott: Exactly, to me Order Flow is not some buzz-word fad thing.  Either you understand Order Flow and how markets work or you don’t.  So many analogies come to mind but the old “if you look around the poker table and dont know who the sucker is, its you” tends to be my favorite.  Order Flow is not the holy grail but it can at least keep you in line with what the big boys are doing to punish the sheep. 

J.L.: What does your typical trading day look like?

Scott: Being on the West Coast, its an early start.  I like to be at the desk by 3:30 AM with coffee in hand.  This gives me a few minutes to look over what has happened overnight up until that point, look for trapped traders and hopefully get a few trades under my belt before we get too close to the RTH Open.  I ease back on the trading in the half hour before the Regular Trading Hours start at 6:30 AM.  I’m not a huge fan of the half hour before the RTH Open.  From the 6:30 AM opening bell on I’m at the desk trading till the close at 1:15 PM and then do a post game analysis till about 4 PM.  By now my dog is pretty pissed at me and needs some exercise, so we do something outside.  Dinner with the lady and try to be in bed by 10:00 PM, rinse repeat.  All in, I’d say I average 14 hrs a day at the desk and the time flies by.

J.L.: Do you have any advice for struggling or aspiring traders?

Scott:  Yeah, quit now.  If you cant accept that it will take years to become good at it and you will get kicked in the nuts daily for years, quit now.

Aside from that, stay the F’ away from Twitter……its an absolute cesspool of regurgitated bad information [laughs], the more followers and “likes” the worse they tend to be.  Nobody kicking down +$500k a year is going to be posting on Twit 10 times a day, they are not going to interact with you, they are not going to have a chatroom, its just not gonna happen.  At best you have J. Dalton clones who are trapped in the 1950’s and an ever growing flock of dipshits claiming Order Flow but couldn’t find their ass with both hands, and these are the good guys on Twit!  [laughs, walks out of room]

Looking back at all the time I spent reading and studying trading books I should have been studying psychology and philosophy books.  As much as people want to deny it, markets are emotion driven even though Algo’s and the Order Flow may be mathematical, the math is derived from human emotion and crowd psychology.  Aside from that, find a mentor and get some education.  Once you have an understanding of how markets work I think its best to focus on developing your own personal style of trading and work on honing it down to one little niche, perfect that niche, exploit it with size and be the best at it, own it and ignore everything else!