Trading Legend: His Strategy Has Made the MOST Millionaire Traders - StockBee

This guy’s strategy took a $1 million to over $100 million. The founder of episodic pivots, Pradep Bondi.

A lot of time people come to me and say I don’t know any day trader who’s making money. I know several day traders who make more than million dollar a year, right? And I know exactly how they make it. Most likely 80 90% of them are going to be focusing on that’s the fundamental playbook kind of a thing. It’s a heady feeling when you make half a million 1 million very quickly that you start believing your own bull. What makes profitable traders profitable and what separates [music] them from everyone else? The one signal factor which determines whether somebody makes it or not in this business is basically this. In this episode, Pradep goes into exactly how he developed the episodic pivot [music] strategy as well as the momentum burst trading strategy and how traders should be implementing this into their playbooks. I also see interviews of traders who made like a big money and all. They talk as if like you know they figured it out, right? And the market is a bit like an it will invariably teach you a lesson once you get that god kind of a center. Now do they want to hear this? No. Because they want to start trading today tomorrow buy a Ferrari have like bikini clad woman have a boat and in the process then you lose your account. You need to be where the money is. I have seen that over any time period of last 24 years there are three sectors where the biggest money is in the market. number one thing will be welcome everyone back to the words of wisdom podcast still the number one trading podcast in the world and the fastest growing thanks to all of you and our incredible guests talking of which today we have a very very special guest he has actually helped significant number of traders become high performers become profitable we’re talking seven 8 n figure traders even people who’ve been highlighted in market wizards and even the future market wizards a book to He is the founder of Stockby. He is the founder of the EP trading playbook, the episodic pivots. It’s the one and only Pradep Bond. Thank you. Thank you for having me. It’s my absolute pleasure. Thank you for being here today. I know we just got to do a chart fanatics episode. So, you know, really, really great insights for me coming into this podcast. M but I really just want to go straight off the bat. We were literally just talking before we started there in terms of like over the 25 year trading career you’ve had, you’ve you interacted oneonone with thousands of traders. Mhm. And you really have great insight into like what makes profitable traders profitable and what separates them from everyone else. Mhm. The one signal factor which determines whether somebody makes it or not in this business is basically their self leadership. uh the people who have this ability to find solutions to their trading problem because trading is not easy. Uh you have to find solutions to lot of problems in order to make it work. Even if there is a template somebody gives you saying this is the age and this is how you should do it and process you have to make it work for yourself. So every one of the successful trader I have seen highly successful traders they have this innate ability or they have this self leadership where they can guide their own performance they can correct their mistakes they can like and keep themselves motivated because there are periods when you don’t become profitable in this business it takes two three years to put all these things together and they have that self-efficacy belief or their fundamental belief that no matter what I’m going to make this workm M and they don’t give up then because of that particular belief. Do you think a part of that also is the mastery of the trading process and actually a passion for the the trading uh process and the markets as a whole versus just focused on the monetary aspect? Uh I think it’s a combination but uh it’s like I know a lot of people who are very passionate about the market. They’re very passionate about trading but they are not necessarily making money. So it’s not necessarily that passion is going to make you money, right? I think and what I see uh like when I talk to traders and when I work with traders also is there is something called a mind clarity which you need to have about how do traders make money. Mhm. Right. And like a lot of time people come to me and say look I don’t know any day trader who’s making money. I know several day traders who make more than million dollar a year. Right. And I know exactly how they make it in terms of what is their playbook. What are they? If I know if I talk to a day trader, I know most likely 80 90% of them are going to be focusing on news-based moves. Right? And that’s the fundamental playbook kind of a thing. Right now the people outsider or who are new to trading, they don’t know this. uh they have this gap between uh what actual traders do and what they think traders do. So once that mind clarity comes in and you figure out how does this game is actually played by people uh because a lot of time books on tradings are very misleading right and basically if you read a book on trading by say a market wizard he shows two or three best examples of trade or even when I talked yesterday today uh I was giving you the best examples but there are a lot of things which don’t work right and and lot of money in trading is made by people by hitting singles while all the books are about home runs. Mhm. While the most success and you talked to a lot of successful traders and most of the people whom you featured on your podcast, if you ask them, they had occasional home runs, but there are thousands of singles. Yeah. And those singles uh is a game which uh for a new boy who’s coming to the thing, he thinks this is like an I come into this to buy an island. I don’t want to do this hitting singles. Right. Yeah. Hey guys, before we get into this incredible episode, I want to say a massive thank you for all of your support so far on both Words of Wisdom and Chart Fanatics. We have grown immensely and are still the fastest growing channels in the trading industry. Now, a way to get back to every single one of you if you want profitable strategies completely for free. Go to chart fanatics.com. The link’s in the description. Put your email in and every single week we will send you a free PDF with a profitable strategy of the guests that we host as well as on the website. You can go straight there and you can go through the library of strategies completely for free. Just input your email. On top of that, we launched a Chart fanatics free Discord community that has already over 10,000 members of traders across the world. We have our live traders from Chart Fanatics Live in there. I’m documenting every single one of my trades in there and we have exclusive discounts, massive giveaways, and so much more just to give back to every single one of you. Let’s not forget updates on every episode and things that we are bringing to this industry that’s going to change it forever. But for now, the links for that are in the description. Let’s get into this episode. It’s understanding it’s not going to be this exciting thing day in day out. There are going to be those moments and I think do you think the the focus on the process and actually enjoying the process not necessarily passion but having such a focus on process so whether it’s hitting a single properly or a home run it’s actually be the process of that that the real traders and the profitable traders are focused on and having that understanding I think is very important because you know it’s a really great point that since we started to have you know professional verified traders on that has been a focus point of The majority of your P&L will be probably made up of those home run trades, but there will only be a very small handful a year of them, but they may make up 70 80% of your P&L, but it’s actually you still need those base hits. Mhm. Because without those base hits, you won’t have the well, one, the mental clarity and sort of the viewpoint on the market. So, you won’t be sharp with what’s going on. But most of all in terms of to make that huge P&L to be able to size more you need those base hits profits essentially to be able to do that. Yeah. Your singles allow you to finance your larger trades because if you’re dependent on larger trade and larger trade didn’t work out and you have like 10% draw down 15% draw down now you are under pressure. Look I need to find another home run to hit that. But if you have a combination strategy of singles and home runs, then you are not under pressure because you know look at okay I had this particular trade didn’t work out but I can hit 25 singles I can hit 30 singles and make up for this. So that’s one and second in terms of sheer learning right and when people come to me always say look it’s much easier to learn something which you can do with higher frequency than infrequently. Yeah. Right. And if you’re going to be taking a trade which is going to you are going to hold for 6 months 1 year and which is going to double triple you are going to get a feedback about whether it worked or not only 6 months down the line or one year down the line. So your learning is going to be very slow. Now as against that when you do day trading or when you do singles as a strategy I do two to three day hold swings kind of a thing which is my equivalent of a singles. Mhm. The feedback loop is immediately there and then you can correct right. So that a lot of people don’t understand that they read this and you need to hold for longer term or trend following kind of a methods and uh that does it work? Yes, it works. A lot of things work in the market, right? But for a learner uh you need to try something which is higher frequency first and then you might transition to like and now I don’t want to do because it’s a grind doing singles doing all these things I’m also like and I not young so I’m semi-retired now so I don’t want to do the grind so I’m more likely to do through the other things but if I had to learn what I can learn if I do 200 times 300 times in 6 months faster. I will not be able to learn if I just do it two or three times. Yeah. So, it’s understanding that if you are in that sort of beginner stage and and that process of learning, it’s actually about trying to get as many reps in so that you can it’s not even about speeding up the learning curve necessarily, but it’s meaning that you can actually get enough data, enough time, enough things to get feedback off of to be able to learn effectively uh and be able to sort of do it within that two to three year period. Otherwise, if you are very low frequency, that period only gets longer. One thing, however, in terms of having those longerterm trades, you know, because we talked on chanatics in terms of seeing trades that could run for months or even longer, how did you is that something you had to develop a skill set for of being able to have the patience to let your trade play out and hold it longer term? uh you know seeing those fluctuations in P&L making sure not to micromanage the trade and end up getting out too soon because of uh moving the stop loss too aggressively etc like these is that a skill set that took time to develop uh I think and uh it’s a skill set but more than skill set you have to if you want to hold a trade for a longer term you need to have a setup where you can hold it for a longer term so I have a specific setup of turnaround stocks where I know based on their history that it can be held for a little longer than the growth stock but growth stocks have a very different uh characteristics and all fundamentally uh there are two types of moves in the market. One kind of a move is a magnitude where the speed or the velocity with which the move happens is very rapid. And it’s a big magnitude like an 100 200% move. And then there is a duration move. And a duration move the stock is going to keep on going up for 2 months, 3 months, 6 months, 1 year, 3 years. But the velocity of that move may not be very high. Right? So these are two different distinctly different moves in the market. The problem for many traders is that like you know they want to hold for longer term and they are getting into these uh kind of trades which are magnitude moves. Magnitude moves it’s a very simple observation in the trading uh in stock market is fast moves tend to mean revert and slow moves tend to persist. Right? So you can’t have a fastmoving stock and hold it for a longer term. Right? It just doesn’t work. So you have to start with a setup which is designed for longerterm holding. Intellectually it doesn’t appeal to me to hold something longerterm because you get addicted to short-term profits like you know basically as a trader and personality types. But if I have to do longerterm trading, I will base lot of my longerterm trading on a setup which is very very analysis based, which is based on valuation, which is based on projecting how many quarters in a row that stock is likely to have a growth. Yeah. So the setup per se is the most important thing. just forcing yourself to like hold for longer term and saying okay I’m just going to put a stop at 10day moving average or 20 day moving average and let my trade run um is not going to help because underlying setup if I don’t select which is longerterm hold it doesn’t work. Would you say that a large gap in what traders are doing is that they’re not going deeper into their setups like creating different playbooks that then have different rule sets and are used when within certain context within the market when something’s in play and then based on the stock itself based on the news catalyst that’s doing that. But plus also that’s another point in terms of you know do you feel like a lot of traders are kind of ignoring news and trying to purely work off the technical setups when the news can be the perfect catalyst to create not only high risk reward trades but to be on the right side of the market when you’re in line and have an understanding of fundamentals. Mhm. Uh I think you have a good point like and that is what I keep see saying to traders also a good chart itself is not a setup right and you have to find a start a chart which is good and there is has to be some reason why the stock is going to go up stock go up for a reason right and they don’t go up just because there is a pretty good chart or support or resistance right uh the you have to trade stocks which have a reason to go up according to me that reason must be might be theme That might be sector that might be whatever earnings catalyst story but the that particular stock should have a reason to go up. Setup itself or like just a chart is not a pattern or it is not a setup or it is not a thing. Now United Health has gone down a lot in last one month. There is a reason why it went down a lot right and or some other stock has gone up a lot. There is a reason. If you know the reason you’ll become. So it’s not really that traders are not trying hard right and basically if you are not profitable at that stage you are just stuck in a mud and nothing makes sense right the traders who develop these ages or like expand their ages are profitable. Once you are profitable you have the luxury of like creating multiple ages or creating a playbook with multiple plays. So the first task for a trader is to become profitable and how do you become profitable when people come to me because a lot of people come to me who are member non-members and just by word of mouth and uh people like rest again others tell them can I go talk to him or something like that I always tell them look can I just copy somebody uh copy some trader who has profitable and what he does uh don’t reinvent the wheel in the First make something which is a formula work and then do your own thing. I started not by creating my own playbook. I started I found a book when I was just starting trading and there was this book called hedge fund age where there’s a mark butcher there was the author and he had this short-term trading uh setup which he detailed in that book. I took that made it work as it is without making any changes. Once I made it work for 2 years, then I improvised and created a setup of my own around it. So in the beginning, you need to copy somebody and that’s the easiest way. Actors copy others, right? And businesses copy others. Everybody does this. So it’s best to rather than go out there and try and almost create something especially off the back of not having any results prior or having a process prior. you’d rather go some to someone or take something that’s known to work and has the data and has the results already. Replicate that and then through doing that process, you’re going to develop your process. You’re going to develop discipline. You’re going to develop the skill set and the knowledge and awareness of the market. Build your reps up to a point where then you can start to make tweaks or make it your own effectively. Mhm. Let’s take a break for a minute there, guys, cuz I want to tell you about our incredible sponsor, Alpha Prime, the first of its kind in the industry. Now, evaluation firms have been in the industry for the last few years and done absolutely phenomenal in terms of its impact for traders. As you can see here through Alpha Capital and Futures, so many payouts to so many traders across the world. But now, for the first time, there is an incredible route for traders to become professionals and to trade live capital and that’s through Alpha Prime. So, let me quickly tell you how it works. [music] You can just buy a challenge on Alpha Capital, Alpha Futures. Doesn’t matter which one. So have Alpha Capital, you have phase one, phase 2, phase three challenges. 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Would you say in terms of, you know, by now you’ve come across thousands of traders, no doubt, who have used EPS and that playbook, is there anything that stands out to you for people who start to use it? Anything that they struggle with? Anything that they potentially do wrong in the beginning that you could say, okay, if you actually did it in this way or this is the best practice to start using this playbook um effectively and and you know, in a smooth process, if that makes sense. I think the uh problem for a lot of new traders who start trading any method whether it is DP or any method is like and basically uh their profit expectations and their win rate expectations are not in line with the reality of what professional traders are dealing with probably right and if you get something like and I say there was an example of just 3 days ago there was a stock and I’m trying to recall the ticker I don’t recall I think yt X was the ticker right and that stock went up 30 or 40% 30% something in a day right and there was a trader who bought it right at the uh beginning of the day and we had discussed it in a pre-market meeting and all and then uh he didn’t take profit right and basically and then next day the stock ended up giving up all the gains and then he’s crying and I said like look and what did you expect if a stock made from your entry 20% % in a day. What were you expecting that there is going to be miracle going to happen and you’re going to buy an island and you’ll have bikini clad woman on the island. Uh take that profit right and this these are things which professional traders have learned through experience. If you get a home run kind of a thing you know 1 hour 2 hours my first reaction is to just lock in some profit. I’ll keep a smaller position and see what happens. Mhm. Now that kind of a learning is difficult or finding solutions to the problem like that is difficult for new people because they just are thinking very differently. Mhm. Uh his real thinking is X has gone up 20%, in 1 month it was going to go up 200%. And things like that, right? So, it’s like a lot of traders start pre-planning like how this trade should go, how much it should make me, and the potential, and they kind of lose sight of the process when they’re in the trade and it’s starting to move. In terms of uh you know, starting out as a trader, we’re talking in 2000, right, is when you started your your career. Like, what has it been like the different market conditions and the different market cycles? You know, we’ve just come into the start of this year and we’ve seen quite a change already. Like what can you speak on in terms of is there any sort of reoccurring theme when you’ve seen cycles change? Is there reoccurring themes in what you mistakes that traders make when these changes take place or things that you’ve noticed from yourself and other professional traders that they do well when they, you know, the common practices if you will or when these market conditions change? See uh like I’ve been I started trading in 1998 so it’s almost like 26 years now probably right uh the markets have become much faster uh moves are much much faster the magnitude of the moves has increased right and basically uh news sources are the retail traders are much lucky today than they were earlier you have this podcast you can actually talk to a real trader and send him a DM and like he will respond there’s no mechan mechanism like that. I remember when I started trading right and the internet was just starting because 1999 was like an so you still had like a newsletter which used to be mailed to you. there used to be some newsletter which used to send a telegram right can you imagine like that so information is available but what hasn’t changed is that uh especially for certain styles if you’re a swing trader uh there are periods when everything works and there are periods when nothing works and uh the ability to identify that is very critical uh if you are a day trader the today if you’re a day trader you’re much more lucky because there is so much information available for what really works in day trading and what are the things which people are I know for a fact that if I’m talking to a day trader and who made 2 million 3 million or 5 million last year I know that what he’s likely to be doing that money using is small cap shorting right and or like doing some news plays or like some catalyst based kind of a thing right that information was not available for a retail trader Yeah, because all the books were like about support and resistance chart patterns and things like that which is one of the things which you use in trading small cap but that’s not the age right and the really age if I talk to a good day trader I know today is uh understanding that the small caps moves which may are like going to just peter out because there’s nothing below the scene. Now that kind of a knowledge base which is getting passed on from one generation to another to traders who are really motivated didn’t exist uh if it was not that it didn’t exist but it was very difficult to tap into that. Yeah. Right. So that’s the benefit which is there. The thing which I didn’t know there are a lot of things I didn’t know and which I learned. One of the things which I definitely didn’t really appreciate or understand is uh who is your daddy if you are in the stock market and that’s fed. The fed is such an important part of how the market behaves and what happens in a market. when the Fed decides that the market needs to go up nothing is going to stop and I have seen so many people losing money shorting when the Fed becomes very accommodative and they just like you know pumping money like crazy right and basically so those are things which I didn’t understand uh now I understand that I didn’t understand this role of like on a overall basis the bigger secular bullish moves and secular bearish moves so these are things which you learn uh if you survive and prosper in this business right and basically but uh for a beginner trader I think this is a golden age mhm they have if you don’t have money you can go to proprietary trading firm right and there is information you have instruments like and like if you don’t have money to trade with 30,000 as a day trader you have the day uh weeklies and daily options and uh so many other uh things right and And the sheer amount of information which is available on YouTube channel and Tik Toks and all these things from real traders is like a so much information is available and the playbooks are available. You have traders who are like talking on Twitter every day showing things. So there’s a lot of information if if you were a new trader today and uh yeah as you said there’s a lot of information out there and as you know there’s good information and there’s also bad information or there’s good there’s real traders and then there’s people who can talk about trading but they’re not trading and the reason I say that is what would you recommend to people to look out for when they are looking for information like how would you say is best to decipher okay this is a good person to to look at and and follow along. Maybe is it accolades? Is it time in the market? What is it that you would say people should be saying okay this is their their checklist for okay this is a good person and information to follow. I think I don’t go by what the person is. I look at what is the content right and then can I see that content like a like and I say if you take the EPA as an idea and if you on your own look at like a last 200 300 big moves you can find that this is how the stock actually works right and or there is this uh thing in the market which people keep saying look whenever the market corrects after the market corrects the stocks which held up the best are the one which make the biggest move. Now I tended to believe this when I was new in the market right till I actually checked it out and when I checked it out I found that actually the stock which make the biggest move are the one which were written down the most right so I don’t trust any information but I verify by doing deep dive by looking at it does this make sense right and basically by just checking whether this makes sense so that is the way to approach it from from a skeptical point of view but looking at like an essay if I was a new day trader starting out right and if I go through 20 or 30 well-known day traders on tw uh Twitter or who are in the public domain and I start tra looking at their what they are saying I will come to the conclusion that one of the best ways or the big age in day trading is to short small caps right that is not something which is debatable right then if I go back and start analyzing the small caps and start really looking at moves in small caps where there was a some sort of a PR and um pump and dump and then I start analyzing I’m going to come to the same conclusion right so take ideas from people sometimes like when I am on Twitter or when I’m watching somebody’s YouTube video or interview I find an idea or a solution to a problem which I had never thought about like kind of a thing right I’ll give you an example like uh just two or three days ago So we have a zoom meeting in stock B every day uh in the morning and uh three times in a day right and basically so there is this problem of how to enter a stock which has a news uh because many times if you enter it early it shakes you out and then it goes up right so this is a problem common problem traders like us face and uh I was just like in talking to some trader who does this for a living in the stock community and who’s good at it right so he said like one of the ways in which I do do it is I wait for the stock to revisit the pre-market low and then I buy near the pre-market low. Now that immediately I wrote it down because that makes sense to me. Now I went and verified that information and then I incorporated that into my next trait. Uh so that’s how you have to look at it. Personality terms what people say. uh just don’t go by that like any you can have a idea from anybody collect ideas and then use the ideas is what I’ll do. It’s like you said collect the ideas and then go and check out the ideas and check see if it works for you because most of the trading problems people have found solutions to right one of the trading problem which I encountered a lot in the first few years a lot of my trades used to make 20 30% gains and then I used to like think okay this is 20 30% so it will keep going up which is what exactly new traders also think right and I would end up closing the trade break even or just like when it started reversing because I was giving them room to run. Then I realized one of the best ways is to sell into strength and selling into strength is what like you know uh all professional traders realize after going through this kind of a period right now that kind of a idea is something which can change your trading completely and which a new trader cannot even imagine or think about that kind of an idea and lot of successful trading is these small small small ideas they’re not like someone big idea right and it’s just so now what What I do is like you if I get into a trade and it makes 10 12 14 15 or 20% in just two or three days I sell 80% of my position and keep 20%. right now that solution if I had found in the first 10 years I would have kept so much of my money [laughter] right so do you find that actually over the long term it’s only like very small details that make actually the biggest difference it’s all very minute details small things like in terms of entry techniques execution it’s not like you know there is no age in an idea uh episodic p is not going to make you profitable able till you find execution tactics. The process and the execution is an age in day trading also shorting small caps or stocks in play as like news-based plays is not something which is secret. Right? The difference between somebody who makes a million dollar in a trade versus somebody is their execution. All right? Execution is age and uh you can take a generic set of idea and convert it into a highly profitable by creating execution ages. Mhm. And that I see time after time when I see a trader who’s successful, people think that there is something special. He might have some extra leg or head or something, right? But it’s their minute execution and the something which is like you would not have thought about the way they do it. Mhm. Which makes the same idea very unique. It’s the same thing in the restaurant industry, right? And I like I went to London, right? couple of months ago and when I was in London one of the st members he took me to a Mediterranean restaurant. I’ve been to many Mediterranean restaurant right and he said like see I’m from Mediterranean but I’m telling you this is one of the best Mediterranean food which you’ll get even you’ll not get this in Lebanon right and basically so it was a Lebanese restaurant and yes it was like now what is so special they’re using the same ingredient everything right it might be the just the small tweak and small execution which they are doing different right so it’s the same thing in trading don’t know where the market’s going next stop worrying about your trading just get informed on exact exactly what’s happening in the markets and what to expect. From Forex to futures to stocks to crypto, be on top of it all. That’s why tens of thousands of traders are subscribed to Market Journal, a free newsletter that allows traders to keep up to date with the markets every single week. Remember, an informed trader is a profitable trader. It doesn’t matter if Trump tweets, AI stocks are pumping, or if [music] Bitcoin drops out of the sky, Market Journal has you covered. Join for free today using the link in the description below. Let’s take a break for a minute there, guys, cuz I want to tell you about our sponsor, Tradezeller. Tradzella is the number one trading tool for all traders. Doesn’t matter whether you’re a crypto trader, a futures trader, or a forex trader, whatever trader you are, all you do is connect your trading platform directly with Tradzella. It automates and makes your trading journaling so easy. If you want to be a profitable trader, you need Trading Edge. And that is exactly what Tradesella does. It allows you to identify edge, maintain your edge, and optimize your edge by automating your trade journaling, in-depth analytics, back testing, bar replay, and so much more. Now, W gets you 20% off your yearly subscription with Trade Zeller. So, use W for 20% [music] off your yearly subscription or RI 10 for 10% off your monthly subscription. The link is in the description below. Now, let’s get back to this episode. Do you think that a large part of mastering trading is being able to segment the different areas? Right. So you have your strategy, you then have your execution, you have your risk management, uh you have your um you know fundamental analysis like so everything is separated into these compartments and you master each one uh rather than say just trying to learn everything at once. It’s all blended together. you’ve actually spent time understanding the different nuance. Yeah, you have to take it in a bite size and you have to trade one setup idea if you’re new. If you try and like expand your playbook too early, I only traded one setup idea for 10 years. Wow. Just one setup idea I had right and basically I didn’t had a variation of that also. So then you become expert in it right. Mhm. So you have to trade one set of idea for a long period of time till and which is true in any other field also right and basically I before I came to US I was in Bombay. Okay. Mhm. In Bombay there was one guy who was a camera repair expert. Mhm. And that guy was only doing camera repair and that only for certain like a brand of camera and people used to come from all over to he used to do camera repair which is same in New York City. you’ll find people who specialize in something. Uh if you try the one of the problem with all this Twitter and YouTube and all is you get exposed to so many different styles of trading, right? So you feel like you’re in a Chinese buffet and you need to eat this, you need to eat that and you need to eat that and as a result you can like bo like overload your plate. It makes takes almost 3 to 6 months to make one setup idea work. And sometimes it takes just 6 weeks, 7 weeks or sometimes 6 months to get just the entry techniques right or exit technique right. Mhm. If I change my setup every day or every week or every month, I never build expertise. Yeah. But you can’t blame new traders because they don’t know what will work for them. So they have to also try different things, right? uh but you try and don’t lose money. Uh which is easy for me to say now. But do you think that’s uh one of the biggest things that kind of hold traders back and and why they end up maybe prolonging their journey a lot of the time or even some people leaving trading is because during that testing period they’re too quick to throw money into trading. you know, whether it’s not even from the educational standpoint, more so from just the trading element, like throwing money into a brokerage whilst they’re in a testing phase. Do you think a lot more traders would have longevity and probably actually faster profitability if they were able to during that testing phase really reduce down how much they’re trying to trade, how much money they’re willing to put into trading and focus purely on developing their skills. Yes. And I that’s exactly what I tell anybody who comes to me right and and who doesn’t have experience trading and when I say okay you want to learn this setup right start with five shares or 10 shares right doesn’t matter you might make only $20 on that trade but make it consistently for 6 weeks 3 months and then go to 40 shares 100 shares 300 shares now do they want to hear this? No, because they want to start trading today, tomorrow buy a Ferrari, have like bikini clad woman like and have a boat, right? So uh and in the process then you lose your account and if you lose account unless you have some way to refinance and all something now if you want to learn say any trade if when I personally try some new trade ideas or setup ideas right I start by putting only 20 shares or 30 shares to check out the idea just test marketed I don’t want to lose money uh because if you lose your stake the game is over and which is what happened to a lot of traders uh They many times traders are just on the cusp of becoming profitable but then they run out of money. M so that’s the problem. Would you say that you during your your career as you said the first 10 years you had one setup looking back would you say that was probably too long of one setup or was that do you think that’s probably the right way to go about it before starting to develop? It’s like an there was no other setup I knew right and there were not many people I knew also in the business. I was sitting in my basement doing trading by myself. There was no social media. There was no way to know people kind of a thing, right? And so there was like that limitation also. But uh most of the people I know who trade um they only trade one or two setups even the highly profitable traders right and they have variation of that setup but it’s just fundamentally there is coke and there is a cherry coke and there is a vanilla coke and all cokes but they are basically same thing. So they might call that like oh I have like EP is one set of idea like delayed EP is just a slight twist on that it’s not a new setup right and got you yeah so that’s so that one setup you still had variations within that and fundamentally also I’ve seen some personality types are there some traders can buy breakouts and make breakouts work there are some people who are personality terms not born to buy breakouts they are pullback traders and the pullback trader. Uh some traders can never buy a pullback. Mhm. So you have to also find what suits your personality because it’s the same thing like I go to a grocery store. I don’t even look at price. I buy things and I have a friend I went with him to a grocery store and he compared prices and he went on phone and said like this olive oil is here this much this is in shop and shop ride it is this much this is and I will go and buy it. I don’t do that. So the personality type some people are highly analytical. Whenever I see a very analytical person I say can I go for something which is EP kind of a thing which is more analytical and things like that. Mhm. Some people are cut out to be sculpers. Mhm. And they can sculp. I have a member I have seen like you know he has consistently consistently makes money. He has like shown me his figures and five years in a row he doesn’t have a loss making thing or some other people who came in recently met me they wanted me to help them like in a transition from scalper to a swing trader because it burns you out right and scalping is highly profitable but it burns you out so they wanted and I looked at their results and they were consistent but that personality type is also there in the trading and you have to find what suits your personality also and without losing money right Yeah, you give it a try. So, is there anything in terms of personality types? Is there anything that you’ve noticed as like a correlating factor? Is there certain things they can look at either within their trading or just outside their trading that can help point people towards? So, I think it was very individual whenever I talk to traders right and I talk to traders and that’s why I don’t like talking to traders on phone. uh I asked them to come in on a zoom meeting and I asked to see their uh like face and things like that. Uh one thing which I look at in a trader is leadership. All right. Uh if they don’t show leadership in any aspects of other things right and I I don’t think they will make it in trading. Uh all the successful traders they are leaders also in personal life or in the way they approach it. uh because the personality type which is required to be profitable needs to be a leadership type personality. It’s interesting though right because obviously trading is a very individual individual yes thing but leadership in terms of a self leadership not necessarily leadership in terms of leading others self leadership in terms of if I don’t have an answer you go you go and find it right if I don’t know like an I when I was a beginner trader right u I used to define a problem and I used to go for a walk I used to walk for 2 hours 3 hours used to come out with say thinking look what can be the possible solution solution one solution two solution three right now as against that if I just sit there and wait for answers to come in I don’t have a self leadership right in my group when I teach like I have these people who are members right and a lot of them they have a trading problem like first thing is hey eg they call me e the guru is my handle on the side can I have a meeting with you they don’t even make an attempt to find a solution first as against that like when Christian kulami joined stockby right he went through the history he read all the past post and all and he just figured out things right. So that ability I think in a self leadership is the most important variation which I seen between successful and unsuccessful tra now that you you mentioned it in that way. I think definitely uh because I think it comes down to the essence of that they’re not willing to just give up uh in terms of when faced with a problem or when facing even changes that will need to be made or answers they’re not willing to accept no as an answer if you will and they will go seek the growth that’s necessary or whatever they need to look for they’ll go seek it. So for example, if they need uh new information and they don’t know it, they’ll go and find the right person and they’ll take their time to find that right person. Would you say as well as part of self leadership though like they have a good tolerance for time horizon, meaning that they understand the actual realistic journey they’re going to take. Cuz I understand most people who get into trading probably come in thinking, I’ll probably be able to do this in a year or two. Um which is fair. like when you’re coming in cuz I used to have this mindset that everyone has to be passionate about trading which is interesting when we talked earlier about you know plenty of passionate traders who aren’t making money. Um but why I say that is because I I believe when traders come in only for the money it’s not the right mindset either but equally why did I get into trading? Yes, I was passionate and was interested in the markets but obviously I got in for the money. I’m saying I’m sure everyone who gets into trading originally it’s because of the money. Um but would you say that these professional traders and and profitable traders are able at some point hopefully early on but some point able to change the time horizon expectation in their mind around trading so that they understand it’s not you know for them to reach seven eight figures let’s say is going to take x amount of time I think and it’s also like how you start your trading journey is going to determine that right a lot of younger people nowadays can start in a proprietary firm. If you are getting into a proprietary firm, your pathway to getting profitable can be significantly different because you already have a role model kind of a thing. You can see and you know what works and you’re starting with certain amount of thing. If a neural trader sitting in his basement is trying to become his pathway is going to be different. Yeah. And he has many challenges ahead of him. Right. And uh I think more than the pathway kind of a thing how much time which is required and all there is a second element uh which I said like self leadership is one element right um if you talk to traders who are successful after they are successful they say like you know they are very disciplined right but discipline doesn’t make you a successful trader. What makes you a successful trader is creativity and innovation because when you don’t have a pro solution when you have a problem look entry is a problem or exit is a problem you need to iterate and creatively find a solution to your problem right and you will see you have interviewed a lot of traders also they have their own unique way of doing it so they have found they were creative innovative enough but once they find it they become disciplined so that’s the thing paradox look if you are very disciplined in the beginning You’ll never go outside the box and you’ll never be innovative and creative and you’ll never be able to solve problem because fundamental problem for a trader as a beginner is to solve your own trading problem right and to solve problem you need creative innovation so that’s another element which I see in successful traders that if something doesn’t work they have that uh tinkering ability to hustle and find something which is workable solution not an ideal solution. What was it about trading for you you know when you first came across it? What was it about it that got you interested? I think an it’s an accidental entry which I had in the trading like what happened was I came to us uh in 98. Mhm. And as soon as I came in there was a com bubble. So that was like everybody was trading that was one of the things and I joined uh as soon as I came in I joined a.com right the person who had invested in that.com the person who was behind the idea he was a trader and he was like in a trading kind of a thing I was just watching him I was not interested in trading at that time and for some months I we were working on this startup and we had I had to go to California and stay in his house because we are hustling for raising money and all. So he gave me a bedroom to stay and where he had all these books on trading [laughter] and there I had nothing else to do. So in the evening so when there was nothing else to do I was just reading this book and I just read this book on trading uh and I got interested. So by the time we ran out of money and we closed the.com and I came back uh my ex-wife she was also like an everybody was into trading at that time. If you came like in that time they were like everybody was into office like it was like the covid-19 time right so she had bought some shares because all her colleagues were trading and they were all going down so when I came back she said like can you have a look at these they are going down every day and I said okay I’ll have a look at it I started looking at it I got interested and one thing led to another and I never looked back. Wow. Yeah, that is a very unique unique journey. And you know when you look over your career, is there certain moments that stand out to you as really pivotal that really you know any moments that were kind of like your quantum leap? Mhm. Yeah. So the first trade which really changed my like I had become profitable not making like you know big money but making good money to make a living kind of a thing. uh doing this swing trading kind of a thing and then one night I was reading a book and there was just one paragraph at around 11:00 in the night uh which is just a thing which the author says look when you have these stocks and they come out with earnings and the earnings is like phenomenally good 300 400 500%. Then those stocks can double or triple. Mhm. And I just bookmarked that page before going to sleep. And next morning I wake up and that time this investor business daily newspaper used to be a physical newspaper delivered to you every day in the morning at 6:00. And I opened the newspaper. It used to have the list of stocks which are released earnings last night. And there was this small stock called USLB. At that time it was called US laboratories. And that had come out with earnings and the sales growth was some 900% and the profit was 2,600%. So I said like this author said this can double triple. So I just put all my money in that trade and in uh less than like 6 weeks I made more money than I had ever imagined in my life in one trade. Wow. And that changed how that became the EP kind of an idea then. So and so developed from there. Yeah. From there then I started hunting for trades like that and uh systematized a way to find that trade and that completely became like an I never mean like it’s an accident just happen to read that one paragraph and notice it and next day you see a trade and it so is it is there a case where or have you ever noticed that you know winning streaks in your trading are followed by losing streaks and they seem to sort of correlate with each other. Mhm. Yeah. So like and now that I’m much wiser, right? And it means I’ve been doing this for many years and uh also I have a personality where I uh self analyze and look at my uh self like what happens. So I have seen that look and whenever you are in a good trick when you’re making money u you start getting this god syndrome. You think like your gift to the trade. I also see interviews of traders who made like you know big money and all you talk they talk as if like you know they figured it out right and the market is a like and it will invariably teach you a lesson once you get that god kind of a syndrome right so the moment I have like a really that feeling or like I make more than what I think now I have a internal clock so I reduce my trading I write down on a post-it note in front of me saying look be very careful cuz invariably draw downs come in after a good strike, right? Yeah. So, uh there is some self-regulatory mechanism. I walk away from the computer or like you walk away from trading for some time just to reset myself because it’s a hy feeling when you make half a million 1 million uh very quickly that you start believing your own Mhm. So, and same way when you go through a lean period it’s terrible. Yeah, you feel like this is never going to work. And I’ve been doing this for 25 26 years now and I’m telling you it is never easy. Every year you start with a fresh challenge. Every month you start with a fresh challenge. That’s the fascinating part of it. You are not guaranteed that you’re going to make money. Yeah. Ever. Right. And what’s the experience like in terms of at this stage when there if any but when there are losing streaks or losing periods like how do how do you handle that? What is your sort of uh thought process when going through those losing streaks? Because I think there’s a and maybe actually you another topic you can touch on is the reality of full-time trading and profitable trading because I think there’s a misconception that a lot of traders assume that once you you know can read the market and be profitable pretty much you’re profitable month on month year on year every single time for the for for all of time you know mean it depends on your style if you’re a scalar I would say yes or if you’re a red trader maybe but again there are cycles to the market and all uh So there is uh like when I’m going through a losing phase right and I always have this uh four factor model of like analyzing my performance or what is working and what is not working and the one factor is setup right and if the setup itself is wrong then there is if you’re trading a right setup then why the setup is not working you made a process error sometimes it happens right and that day I was trying to put a order for 3,000 shares and I ended up accidentally putting in 30,000 shares order and I lost money and I had to take like almost like in a one month to recur from that uh big loss because it was like beyond the limit kind of a thing right so process error can be a error the third is most of the time if you have a setup and a process and you’re not making setup and process error then it’s the market m right and the market is not in your favor and which is what is happening to lot of things in the last one and a half months for choppy for swing trading kind of 3 3 to 5 days kind of a trade, right? Yeah. So then situational awareness becomes important. And the fourth factor is a trader factor. Uh you can have a setup, you can have a process, you can have but your own motivation goes through and flows depending on your own personal circumstances like a couple of years ago I was going through a divorce. So it affects your trading right and basically or like there are periods when you’re not fully emotionally like invested in trading for me now motivation becomes a bigger and bigger problem because I am 62 now right I made my money so to me to get motivated some days is difficult because you know what am I going to do with the money so just motivation can e and flow then you know you have the ability to trade But you just don’t have the uh fire in the bay. Same what you had when you starting with nothing and you didn’t know how you’re going to make it. all these factors and especially I’ve seen u once you’re successful right and I and I’ve seen this with lot of traders who come to me and hit batch and all uh they become successful human tendencies when you become successful is to like go splurge on something take a holiday or like I do buy a house or something and in that process your attention gets diverted to that particular activity and trading suppers so it’s never easy Mhm. Right. The good traders who continue to do it for a long period of time, they are extraordinary in terms of motivation. Uh they are like in a unique in terms of uh keeping the flame alive. Basically, you’ll see lot of traders who made their money, they just like go into some other business or they just like uh lose the focus or motivation. I think and even for that matter uh Kristen may not be trading the same way he’s trading today because he’s made his money, right? He got a boat, he’s got a girlfriend, he’s building a house. So motivation is different, right? Versus somebody who’s starting and who doesn’t have anything and he wants to make the money. So his challenges never go away. Your life changes, your life situation changes and uh your and You cannot you can have a setup you can have everything and if you don’t have the motivation uh money doesn’t come automatically. M does that go back to your point in terms of leadership as well like the having that leadership quality that self leadership means that in those moments whether it’s you’re going through a uh certain situation outside of trading that can impact your trading or whether it’s as you say the motivation sort of diminishing that self leadership allows the individual to pick up on this and therefore make the adjustments maybe not every time right not not straight away but quite quickly that self leadership really comes down to like self accountability and being in tune with oneself. Uh which I think is probably huge as part of trading is like you need to know when you’re operating at your best or not. Mhm. In terms of part of trading that and building that process and and sort of getting to that point where you can you make these trading decisions independently. How important is journaling and collecting data as part of your trading? It’s important like kind of basically especially in the beginning years it’s extremely important right uh at that time what you’re trying to do is you’re trying to correct what are the things which are going right and what is going wrong right so it’s very important but I think any once you have enough experience um it just intuitively you know a lot of things right and unless you really hit a patch where you’re like you know things are not working or the market circumstances change market dramatically changes and then you need to go back to it but a lot of successful traders I see after some time like it just becomes uh you don’t do the things which you do in the beginning kind of a thing but for a beginner traders yes like that’s how you’re going to correct your own mistake and you’re going to correct your performance basically if someone was coming into trading now and uh you knowing what you know now and and knowing the the landscape of the trading community and all the resources what would be your recommendation of starting out like where where should someone begin at this point? I think the first question which one should answer is what is the time frame I want to trade right because if I can decide the time frame I want to trade is day trade then there is a whole pathway and there is a whole different plane and uh airport which you can take and go to that destination right if you want to go into swing trading then you have a different pathway if you want to do position trading longerterm trading that’s the most critical lot of time for a new trader is lost I was also like in a lost in the beginning. I did options, I did futures, I did currencies, is it currency features, day trading, scalping, everything I tried. Right? Uh time is wasted, money is wasted. Uh if you can make that decision, you can focus your energy very quickly. Once you say came to a conclusion that day trading, I would say that you can then copy something which is working in day trading like small cap shorting is a proven strategy in day trading or stocks in play which is a news play for the day is a proven strategy then I would not go and do something exotic right and I would just make that work. Mhm. And then uh so your pathway becomes much more clearer. You know look at this is I’m going to go to Washington and I’m going to go Washington by road and I’m going to take this particular route. Uh otherwise so much time is spent on deciding whether I want to go to Washington or Colorado or where or like and uh money is lost in that decision making. Yeah. Because they are so different. And obviously the nature of trading is the same and principles might be the same but they are very very different and especially going back to your point about personality. If you’re just trying stuff for the sake of trying it and it doesn’t fit your personality and again you people are really inclined when early on to throw money at trading then it’s just going to do more damage than good. like how how often have you found that when someone has been a bit too eager and uh allowed themselves to really pick up a lot of bad habits, how often have you found it be, you know, a real challenge for people to undo a lot of the the negative work they’ve built up and negative habits to then make progress. So for example, you take someone who’s been trading for 2 3 years and they really haven’t gotten anywhere but they picked up a lot of bad habits through that 2 to three year period and then you know they come they’re either working with you or or you’ve observed this. How how often have you been able to actually see people remove those bad habits? uh I think and it’s very difficult once you build bad habits to change them because there’s procedural memory and if you learn wrong way to drive some people like ride the brake once they learn it’s very difficult same way right uh so it can be done but in order to do that you need to have a very high self leadership uh thing the same thing as like a losing weight right or fitness right and in last five years I have lost like 60 pounds right but I go to got to gym every day a workout every day. Now that is a self leadership and self-discipline right and to change something which is wrong first there has to be a realization what I’m doing is wrong and then you have to keep on and everyday remind yourself to change that so it becomes difficult and uh unfortunately uh most people lose the money by the time they figure out sometimes like people change I’ve seen some people change if they really lose money and that shock and that particular like I had an example in stock B say many years ago I think it’s 10 years ago now almost right uh one guy wrote a long email to say he’s saying this is my sad story of life he said like I started trading I made some money and then like and I got so overconident I had a girlfriend I asked her to give 200,000 and I put all of that money and I lost I lost my girlfriend and I had nothing u and he just said like can you help me. M uh I said like how can I help you? Like I can’t give you money. I don’t give money to people, right? And basically what I can give you is I can give you a free membership to stock B and I can talk to you multiple times whenever you have problem feel free to ask me to talk to you. Right? Mhm. And this guy was so like in a desperate that uh in 6 months he developed a method to trade and went on to make big money and like became very successful. But before he became successful he had reached the rock bottom. It’s like you know uh some of the alcohol colleagues or people who they one day they hit a rock bottom and they say this is it I’m not going to be like I’m going to be a better person. So sometimes that helps. Uh but the worst is people who have a lot of money. Mhm. Right. And they try trading these doctors and dentist and things like that. Right. They never want to learn because they say, “Oh, like okay, I lost this much. I can make it up in my practice.” Right. So is that’s a very dangerous game. That’s a dangerous game. How important is it as a trader to be able to constantly follow the money like know what’s in play? because I spoke to uh Lewis Borcelino who used to trade on the Chicago floor, right? Never transitioned to electronic trading. However, the principle of following what’s in play and following the money flow as he called it was still true then as it is now. And I don’t think I think that’s something that will always be the case regardless of where trading goes. But how important is that as a trader to be able to identify and then react accordingly? And just as a secondary question off the back of that is is there anything that stands out to you that can help traders to identify those moments when some when something’s shifting when something’s becoming more play. Yeah. So take the first point right and which is you have to trade what is in the market likes right and basically I did a video many couple of years ago saying that if you want to the title of the video or the zoom meeting I did with my members I said like you know okay if you want to be the best peak pocketer in Barcelona right where will you go right you go to a square where the tourists are 6 million tourists pass through that square right every day every month, right? Uh same way if you are not trading the big moss of this week if you want to make money or this month like the last month is over May right which stock United Health where you in United Health were you in uh CRWB where you in this these are the big moves or like before that uh the Trump trade happened right so you had to be in the big trades uh and it was easy when you had the outcry market where physically people were you could see shouting you could see or it’s like even if you like in US you seldom see these markets but in India you still have these open door markets right you know what is popular because you’ll see lot of customers there right so same thing applies in this market today but today you have a tools to find that and that is the that is why I use the 9 million volume because I know volume is a object effective way to find where the crowd is, right? Because when you see lot of volume, right? Similarly, I have some scans in trade ideas software which I use uh where I look for a stock which makes 60 new highs in less than 3 minutes, right? Mhm. So when you see something making 60 new highs, you know there is this is where the crowd is, right? Then you put that stock onto your radar and start try and find it. It’s much easier to make money in something which is in play than something which is dead money right somewhere like people all the time on Twitter ask me question what do you think of the chart what do you think of the chart and all mean that’s not even on my radar that’s not something which I’m looking at right why not that it’s not a good chart or something but that’s not in play right today if you have to make money what is in play AI uh robotics humanoid robotics or like crypto wallets or things like that and You need to be where the money is. Mhm. And more fundamentally I have seen that over any time period of last 24 years 25 years right there are three sectors where the biggest money is in the market. Technology, biotechnology or healthcare related stock and third is consumer discretionary. You can get rid of everything else if you really want to make money. All year everywhere once in a while you’ll have gold stocks making money. once in a while you’re a uranium stock making money but just trading technology stock is where the money is. Mhm. And just to finish off as a final question, what would be your say top three tips for traders out there? Let’s say for example they’re they’re in that beginning phase. They haven’t quite found consistency yet. They’re a year or two in. They uh they’ve learned strategies but they may not have a playbook. Like what would your you know top three tips to those traders to make progress and start to really start to accelerate in their journey. What would you say those three? Number one thing will be to first be very clear about your time frame of trading. Right? That decision is the most critical decision. Second use deep dive. Deep dive as a technique of finding out things going back because the deep dive allows you to learn about market without risking money by looking at the past moves. The third thing if you want to be profitable trader is process process process. You need to be processor oriented. If you are not processor oriented you’ll not be a profitable trader. I love that. Thank you for being with us today. It was an absolute pleasure and you know hopefully we get to do something again in the future. Sure. Thanks everyone at home. Drop a comment with your biggest takeaway from this episode. Links for Stockby B and Praep will be in the description below. So, make sure you check those out as well. But hit subscribe, hit like. Other episodes are on screen. And until next time, take care.