The Stock Trader Who Made 941.1% In A Year (With Oliver Kell)

Rayner 00:00

Hey, hey, what’s up, my friend? So today we have Oliver Kel on the show.

What’s interesting about Oliver is that he took part in the US investing championship in 2020 during COVID-19.

Guess what?

He came in first place, right?

With a staggering return of 941.1% in a year.

Okay, that’s like having a $10,000 trading account in January and then turning that account into $100,000 by the end of December.

Crazy stuff, right?

If you wanna connect with Oliver, I’ll put his social media profile in the description below.

But moving on, right?

Here’s what we covered, right, during my conversation with Oliver.

The first thing we spoke about is market making, because Oliver’s, that used to be a market maker for the Pacific Stock Exchange.

We spoke about market making because I believe that’s something that many traders are not familiar with.

Then we talk about how institutions, how do they trade with size unless you know what to look for and of course, Oliver shares, what’s the thing to look for.

Then he also talked about his early failures in stock trading and the lessons behind them.

He shares his favorite trading setup, and the things he looks for in a chart, and gives us a ton of trading examples, including his entries, stops, targets, and his top process behind taking those trades.

All this and more in today’s conversation.

Sounds good?

Then watch it right now.

Rayner 01:29

First and foremost, Oliver, I just want to say a huge thank you because ever since I saw the World Cup trading championship, you have 941% return.

Why I’m saying thank you is because that sets a huge inspiration to a lot of retail traders out there to know that anyone without any backing, without working for banks, or institutions, can also achieve such trading results.

So I believe that is a testament to a retail trader that they have the potential to achieve big things if they set their mind to it.

Thank you for setting that benchmark being such an inspiration to a lot of us out there.

Thank you.

Oliver 02:11

Sure.

Thank you.

I was just doing my best.

Rayner 02:13

So let’s kind of like, because I’ve heard you on a numerous podcast, like I think on a Trader Liar, etc.

I think you mentioned your father was also a trader on the Pacific Stock Exchange, if I’m not wrong, as a market maker.

Did I get it right?

Oliver 02:29

Yeah.

Rayner 02:30

I think a number of the listeners who are tuning in here today, probably are wondering what exactly a market maker does, right?

Something we don’t hear often these days.

Oliver 02:37

Sure, so, yeah, I mean, I went to the floor with like literally no money more or less, and you know, just kind of built his business, and essentially is what market making is in.

So my dad was the lead market maker in Lockheed Martin, you know, in the early 90s, and then he was the LMM in Microsoft, which was, you know, in the late 90s, you know, early 90s or so, you know, pretty hot stock.

Essentially what a market maker does, the easiest way to describe it, is that, when somebody wants to sell, they’re obligated to provide a bid.

When somebody wants to buy, they’re obligated to provide an offer to sell.

The way they’re able to do that is that they hedge their positions with options.

My dad was a Delta neutral trader, essentially meaning that he didn’t trade directionally.

He, you know, created a market and hedged his deltas to stay neutral and the idea of it was that he was able to provide liquidity and create a stable market.

Now I think there’s a lot more to it than that.

When I talked to my dad about it, he said things that I don’t think a lot of options traders say today, like…

He traded reversals and conversions and stuff like that I don’t entirely know what all that means, even though he’s explained it to me.

We trade much differently.

But the way I kind of think about it is that he was able to sometimes make money on options to Kang and then stop.

He’s told me times when he was long stock and hedged with the options.

The options decayed and he made money there and the stock went up and he made money there.

I think that’s essentially how he made money.

Occasionally, I know that he did take some shots.

I know one of his biggest trades ever was I guess it was TWA Trans World Airlines, which was an old airline.

They were around when I was a kid, but they’re no more anymore, he made an enormous amount of money when I think they got bought out or something.

I don’t know all the details, but occasionally he would take trades, like directional trades.

But I would say 95-98% of what he did was just make markets in Lockheed and then Microsoft.

I mean, he pretty much traded one ticker and did stuff outside of that. You know, he did sort of view it a little more as kind of speculating like…

“Hey, I think this stock is going up”

But you know, he would do it with a small amount of his capital.

You know, the core of what he did was make markets in those two stocks.

Rayner 06:02

I’m curious, right?

Because you know, back then when I was a prop trader, I have seen traders doing something similar where they just, the futures market, right?

They just queue on the bid and the offer.

If the market, let’s say it’s — kind of just choppy range bar just goes up, goes down, not going anywhere.

Yeah, the market maker, makes pretty good money, but when the market starts to trend in one direction, that’s where the trader starts taking losses, right?

So when you mentioned that your father used to do something along those lines, he hedged it with options.

So how does using options help to hedge if the market does get directional, hedge the position?

I don’t think you can do it close to a hundred percent. Maybe hedging is probably 70, or 80% at best.

Oliver 06:39

So, I mean, look, if you were to talk to someone who understood options, which I’m not that guy.

I just kind of understand it from a high level.

But your delta is essentially how much your option is moving relative to the underlying stock.

So, the idea is that he was hedging his deltas. So depending on different…

Again, we’re a little out of my wheelhouse, but depending on different things like time decay and things like that, the volatility of the option relative to the underlying.

The idea was that he was always hedged one-to-one with the delta, the deltas of his position and then the other thing that I think is very important to highlight is the markets were much different.

So my dad worked on the floor and he did what was called open outcry.

The markets were not 100, they weren’t electronic and they became electronic pretty much near the end of his time on the floor.

So, there were times, I mean, I wasn’t there, but there were times where

I don’t know who would like, let’s just say an institution — Hey, buy me 50,000 Microsoft at X price.

They were good to get filled at that price, but the market had already moved like a point.

So it was like free money.

In that sense, I mean, I don’t know how often that happened.

I think as time went on and markets became more and more efficient, it happened less and less.

But I maybe, you know, I think at the beginning of my career, my dad had some ups and downs and almost almost didn’t make it.

But, maybe in the mid-eighties, late eighties, you know, he was doing well.

I know the crash and in 89 was like one of his best days ever.

It could have been better. I mean, you know, I sort of know that high-level details on the story, but he was set up to where he could have made a lot of money on that.

But, you know, something happened, he blames Galtman.

But, you know, something happened where he had to, you know, hedge his deltas.

Then if he hadn’t had to make that adjustment into the clothes, he would have made a lot of money on Black Monday.

But, you know, like. So I don’t know exactly how all that position happened or was put on, but it has to do with providing a market to those who wanted to buy and sell and then hedging your deltas.

I mean, that’s what he did for years.

Black Scholes model type stuff and then really the way I think about it is that as computers kind of came into the market and they made the markets more the options strike.

You went from having stocks with like five, $10 strikes to like $1 strikes.

You know, things became more efficient.

It made it a lot harder for a vanilla options market maker to make money.

Then you also started to compete with computers.

Then you sort of lost that.

I think

I don’t know this, but I want to say even in the mid-90s, there was still some free money in the open outcry now and then.

Nowadays, because well, I haven’t been into the floor.

The PSC is now an Equinox, a gym.

But I did go into the floor with my dad in 2009 or 2010.

It was still there.

The PSE became the ARCA exchange.

 When the NYC bought the PSE, it became ARCA.

There were some younger guys, probably around my age now, who were the sons of guys my dad had traded with.

Nothing was going on there.

It was like perfectly quiet.

Computers were running everything even me,

You know, I probably went to the floor maybe like eight or 10 times, realistically, in the time my dad worked on the floor.

Um, and it seemed weird to me.

I know it seemed like really, really weird for my dad, but I also know it was like emotional form because, uh, you know, the flooring was like, it had that kind of locker room type feel, you know, you were kind of in the pits with like the same guys bumping shoulders every day.

You know, like I think he had a lot of, a lot of, you know, deep, good memories from working down there.

Whereas like now, like me, I straight to my house on the seat.

I mean, I’m in a discord with two or three guys.

But it’s just much different like there’s not that same camaraderie component I think that he had.

I did prop trade my first year or two.

I think kind of when you’re on the desk with other guys, there’s you know, definitely some camaraderie.

But as far as how I trade now, you know, that doesn’t exist.

So it’s just, you know, it’s much different.

I sort of went on a tangent there, but I’m just kind of thinking about, kind of how he traded and how it all was.

He would tell me…

“You know, he didn’t spend a lot of time, you know, talking to people on the floor”

You know, my dad had five kids and he was like, you know, I went there to work.

I was focused. You know, he was good at doing quick math in his head and unfortunately, computers were quicker than him.

But so he was focused all day, but I just know, because even now, my dad’s in his late 70s, he’ll get together with a lot of the guys from the floor.

Some of the guys from the floor, like I call my uncle, even though they’re not, but it’s just like a very tight, tight-knit kind of environment.

Probably part of the reason for that is realistically cause not a lot of people made it still.

I know numerous guys, my dad in the end being one of them who maybe had long careers and then kind of got washed out the backside.

So, I don’t know, it’s just much different than how it is for me.

But it’s pretty cool, you know?

The floor was great, the energy was awesome.

I mean, I was only maybe 10 years old when I would go down there.

It was a cool spot.

Rayner 14:35

That was a great sharing, right?

Even though you went off-tension, I think it’s something that a lot of traders these days, right?

We won’t get to experience it ever again, right?

Because of, you know, the advancement in technology.

So that’s kind of like a very nice glimpse into what it’s like, right?

Trading in the 70-80s.

This kind of reminds me, I think there’s like a documentary called, I think from the moment it’s called, FLOAT, right?

It’s a transition of how the big traders transit to electronic trading and how a lot of them just didn’t make it.

So it was quite an interesting documentary.

Not sure if you watched that one, but yeah, something that came to my mind, right?

Oliver 15:05

Yeah, I haven’t seen it, but I just know because I know a lot of these guys that trade with my dad, that very few of them were able to transition to electronic trading.

I know of one guy who has made an exorbitant amount of money now, but I know even he knew when he transitioned from the floor to electronics and he’d done very well on the floor.

He worked in the Microsoft pit.

He went through like a three or four-year period where he didn’t know how to make money.

I think he kind of reinvented himself with like an entirely different way of approaching the market.

My dad still trades, I mean, my dad’s like retired now, but he still traded off the floor for probably another, I don’t know, maybe 10 years, if I had to guess, probably up until like 2012.

Maybe in those last couple of years, I think he kind of realized that he needed to hang it up.

But I’m not so sure.

I mean, I’m not positive, but I’m not so sure.

They were having the same success.

No, not the same success as on the floor.

It was just a different, totally different ballgame. Right.

Rayner 16:26

So maybe now let’s kind of take a step back away from your dad and talk about you, right?

I want to learn more about your childhood.

So maybe in one sentence, how would you describe your childhood?

Oliver 16:38

I mean, look, I had a good childhood, but it was kind of like a tale of two stories, I guess you could say.

So, you know, my dad, I didn’t know if it was awful because my dad blew up or what, but my parents ended up splitting up.

I think it had something to do with that.

I lived in Marin County in California, which is a very, very high-end, very nice place to live.

I think we had a pretty good, but when you’re like 10-12 years old or less than that, you kind of don’t think like that.

You’re just a kid and every day is great.

But then my parents split and we moved back East and things were a lot harder.

We realized how good we had it after that.

So, I, when I was a kid, probably started working when I was maybe eighth grade or ninth grade.

I worked at a moving company and played a lot of sports.

That was kind of our thing as we all played sports.

We were good athletes and we started working because we kind of had to.

Our summer league basketball coach was, he owned the moving company we worked at.

You know, starting away, I don’t know if I’d say a fatherly figure, but he was definitely sort of like a definite disciplinarian in our life.

You know, he didn’t take a lot of crap and you know, since right high school, and then I ended up playing football in college, which was good because I got into a pretty good school, pretty like because of sports and that was good.

I made some great friends there.

Probably the guy who is the reason that I trade, a guy who played football with me, he ended up prop trading right out of college.

He was a year or two older than me.

You know, I already sort of knew what trading was just because, you know, my dad did it, but it was not something I wanted anything to do with, you know, kind of for, you know, you can kind of fill in the blank there as to why.

But, you know, as I kind of got to my senior year, I was a competitive guy and I went to a really good school.

So I feel like my school kind of pushed you towards, go be an investment banker, go be one of those types of high-end finance jobs, because those types of companies recruited at my school.

You wanted that job because that was like the glitz and glamour job.

I couldn’t get any of those jobs and I realized that pretty quickly.

I was a Southern student, I had like a 3.0 but I was not the guy, you know, hitting the 3.8, 3.9, whatever.

They were not going to hire me.

I sort of realized that.

So then my options were, you know, I didn’t know what I wanted to do at all.

I knew that if I had gotten any job, I was competitive and would have done well and I still think if any of those people had hired me, I would have done well.

But my buddy started sending me some of the books from the reading list at this prop firm he worked at.

It was, you know, to me, the elite prop firm that you could work at in New York.

I started reading these books and then you know, my dad was still trading.

I sort of started talking to him about trading and then I was talking to my buddy all the time.

I mean, he knew his learning because he was his first year trading and it’s almost like we were just absorbing tons of information together.

I mean, I must have busted through this reading list of like 20 books and like, I don’t know, one semester.

I was spending way more time reading about my trading books and stuff than I was at school by that point.

I looked at a couple of jobs.

I got a job offer to sell insurance and some stuff like that.

I like good companies.

My mom was happy about that.

She wanted me to do that and that is what ended up happening there are, to me, pretty, pretty scammy prop firms in the US where you go put up like five grand and they tell you that you’re going to trade their money or whatever.

But in reality, you put up 5K and that’s your risk capital, right?

Once you burn your 5K, you’re out.

They don’t take any risk on you and then they also collect commissions on the shares you trade.

And it’s what… So I ended up doing that and it’s what they taught us to do was to read the level two screen.

We just looked at the level two screen and they taught us to look for big bids and big offers on level two.

Let’s say Visa had a $300,000 or 300,000 share bid at like 75 bucks.

As the stock came into 75, we’d buy like a thousand shares, and like 75, 15, you’d buy a thousand shares, $150 risk.

At 75.10, you’d buy like a thousand more.

We were traded even smaller than that starting.

I think we had like a $200 limit down there or something like that.

So maybe I’d be buying 100 shares or 200.

I can’t even remember at this point and 75.05, buy even more.

So next thing you know, you have…

Let’s just say we’re buying like 200, 200, 200 or something.

So you’d have like 600 shares and in theory, you’d have like $50 risk or something.

Sometimes you did.

Because sometimes you’d get out when the 300K printed or a lot of the time you did actually.

Sometimes that 300K would print quickly because like everybody in the room would be in it and there was another prop for the door over that had the same strategy.

So everybody would be in the same and when that thing would print, you know, it’d go like 75 bucks to like, you know, 74, and you know, you’d be down like five, $600, which when you’re 23, at least for me, because I didn’t have any money.

Like all my money was in that account and I was sleeping on my buddy’s couch who was the prop trader.

I think I was paying him 400 bucks a month.

I was bringing in food from Costco when I came down on the train.

“Oh, man, it was, it was, it was so, uh, it was so rugged”

If I think I, I hung one for maybe like three to six months.

Um, one of my issues was, and I think it was for a lot of us is that, we would be so happy to like have days where we’d make money, you know, that the days we’d be at like $300-400 or something like that.

You know, even if you like, cause sometimes the way to get put in on these big bids, and if you understood charts and things that I didn’t understand at the time, you would realize like…

“Oh man, I’m long this from the lower of the day and I got like four or 500 shares and the thing could move four bucks, which wouldn’t be that ridiculous”

You know, it’d be like a two or 3% move or something and you could make two grand.

But a lot of the times we were taking our 50, 60 cent profit, if that if that.

I’m sure we were selling some at like 20, 30 cents and that’s really kind of what we were taught to do anyway.

We’re taught to scalp on level two.

But the good guys in the room, they would scalp and they’d hit that 300k beard like three or four times, but they’d hold a runner.

They were good too.

They’ve been trading longer than us and they built a bigger bankroll and they would, maybe they’d have 5,000 shares or some of them like 25,000 shares where I had like 500.

But on the run, they would hit it in the bank a couple of times because that’s the thing you’d sell for 20 cents and load back up until that big bidder off for print.

But they might have a couple of thousand shares left for the three or four-point move.

That’s really where I think they would make, you know, 80% of their money then they would kind of make solid money on their scalps and then pay for a lot of their losses with the scalps.

Um, but I think the younger guys are guys like me.

We never really, made that money that kind of got us over the top.

We were sort of just like kind of not losing a lot of money, but not making a lot of money.

I think I lost $2,500 after like, I really can’t remember how many months I was there.

It was so long ago, but four to six months, let’s say…and in hindsight, I think that was pretty good with how we were trading.

But the amount of shares we must have traded was a lot.

So the people who owned the room were making a penny a share on us.

You know, they were, and they had a room of 40-50 guys and I would say in the four to six months I was there, I watched 50% of the room turn over two or three times, and I watched like 78% of the room turn over at least once.

They were maybe, they were about three or four really good guys, and then one of the guys that owned the room, he owned over the partner, he was, really, really good.

The other guy was definitely, I don’t even think he traded. I mean, he was…

He was a sketch ball.

I don’t know this, but I do think that Friar, so this was around 2010.

I want to say maybe in the early 2000s, that’s how a lot of these guys traded.

I think it did work pretty well.

But now I think if you tried that, I think there’s so much fake.

Order flow on the level two.

I mean, I don’t look at level two at all anymore.

But I think there’s so much fake order flow that it’s tough to tell what’s real and what’s not and we learned other stuff too, like refreshing buyers and sellers.

Like how do you know if you have something that can move, has a real buyer, and stuff like that I think trying to do stuff like that now would be very difficult.

But it’s not part of what I do.

But I would be interested to know if anyone still tries to trade like that or not.

I would think no, but you know there’s probably someone out there that does.

Rayner (28:38)

Yeah, this kind of reminds me of back then when I was a prop trader trading the Japanese futures market.

Yeah, many of the traders were just scalping off the level two as well.

They don’t look at charts and then back then, probably around 2006-2007, right, for the Japanese futures market, the decay 2-5.

The market isn’t as sophisticated as it is today.

So basically a lot of the order flow is quite legit, right?

It’s not like, you know, a fixed, fake order.

So a lot of them made a lot of money during that period.

But when the algorithm came in, like maybe after the 08, and 09 financial crisis, a lot of them just couldn’t adapt to the new change in market structure.

Most of them, from what I know, stopped trading altogether because their age is no longer there.

Oliver (29:23)

Yeah. It’s amazing when you think, you know, we talked to my dad’s open outcry, right?

Different from, I mean, that’s non-existent today.

Then I guess what I started out doing was something that probably worked a couple of years before I started doing it.

People were doing it when I was doing it who were making money for sure.

But I would be surprised if that works at all now.

Maybe, but I would be very

But I do think that many things have stood the test of time, like charts and things like that.

I think the way Livermore is probably the main guy that I love and I think if you gave him some charts and things today, I think he could make money.

But yeah, it’s just amazing to think about how the markets have changed and how they will change going forward.

You know, and I don’t know if it’ll affect like how we use charts and stuff, who knows.

But it’ll be interesting.

They will change in some capacity.

I do not doubt that.

Rayner (30:43)

Yep.

Maybe let’s just kind of like take a step back. I’m still, you know, interested to hear maybe about your growing up years, right?

From what I’m hearing, you’re kind of like a competitive person.

So just want to know, right? Know what?

What triggered that competitiveness in you?

Did something happen or were you just naturally born with this trait of yours?

Oliver (31:03)

Well, so we were just good athletes.

I mean, even when we were little kids, we were always really good athletes and my older brother is a year older than me.

My older brother was, I mean, he still is to this day.

I mean, he’s probably one of the best basketball players I’ve ever seen.

I mean, he’s unbelievable and so we were probably, I would say, a basketball family, at least at that stage.

You know, everywhere I went, you know, my brother was unbelievable.

I was a really good player for my grade.

I was always one of the best players.

But I mean, my brother was so far and away better than everybody else.

He would always be playing up, you know, like in like fifth grade, you know, like if the eighth grade needed a guy or whatever, like my brother plays and like he’d be one of the best players.

Like he was unbelievable and so I guess that probably created, you know, some of my competitiveness and that, you know, I was kind of always second best without a doubt, you know, never even remotely close to first.

It’s rightfully so. I mean, I was nowhere near as good.

Um, but I think probably what triggered it is, you know when my parents split.

We moved to a, you know, we moved to like a nice town, but we were, you know, we were, you know, some of the least well-off people there.

Um, and I think, uh, you know, and it was like, uh, I don’t want to say like stereotypical, but you know, my mom was like a single mom in like a Massachusetts town, you know, people weren’t exactly, I shouldn’t say that.

Not everybody was the most welcoming of her or whatever.

My mom was working, you know, multiple jobs, you know, to kind of provide for like five kids and, you know, sort of the way that we were, you know accepted was basically through sports because we were good at sports.

So, therefore, I think that’s kind of where we had to go make it happen and earn it and kind of prove ourselves.

I think that was real for sure and we did.

I mean, we did. But so I think that was probably…

Then I also think just like over the years, like multiple examples where, you know, maybe it was just in my head, but I created this thing in my head where I felt slighted, you know, like things changed a lot, moved to Massachusetts, things are different.

Where I don’t want to say like outcasts, because like I had it, I have great friends from high school who are my best friends still, but we were probably a little different.

But at the same time, like I had come from seeing like, you know, pretty significant wealth.

So we didn’t have a lot, but I, you know, I knew what you could do, whereas I think a lot of people…

Like basically, I kind of lived the richest of rags story a little, but I knew what you could have in the world.

You know what I mean?

Like I wanted that back, like bad and then out of college, literally applying to all of these jobs and just like getting rejected by literally everybody, at least for the jobs that I wanted.

I was already competitive as an athlete.

But at the end of the day, you know, I wasn’t going to play pro sports.

So, you know, I had to kind of face the facts that, you know…

Hey, we’re entering the next phase and like, you’re not good enough, you know, or like the least, that’s what they’re telling you.

I never was going to have, I was never going to accept that, definitely not.

So I just kind of had to figure it out and that made me competitive, you know, hey, this guy’s getting this job and I’m not, you know, I just think that’s like some little rich kid who’s like connected.

That was kind of my mentality.

And like, I think that’s, I think that’s BS. Like, you know, like, like how can I, how can I make it happen?

And, uh, and so like, I think all these things, you know, one after the other is what, is what made me extremely competitive.

Then, you know, as I got further in my career, it’s like just so many failures and having to figure out how to kind of get back up again.

I think it just kind of builds resolve and resilience.

It’s just like you I’m sure every person who trades has similar failures.

Which we can get more into as we go.

But I think that’s kind of how I built a huge chip on my shoulder that I think was built up over the years, starting from when I was a little kid.

But just amplified dramatically, just from that major, major life change that occurred when we moved from the West Coast to the East Coast and just how everything changed, like everything changed.

Then I just kind of felt like I always had to kind of prove myself, I think, from that point on.

Rayner (37:05)

Yeah, so you mentioned about getting back on your feet right after failure after failure.

So I’m curious to hear, you know, what goes through your mind right, you know, maybe after failure, you know, what’s kind of the pep talk you have in your head, the voices in your head, what’s it saying to you after failure after failure?

Oliver (37:22)

Well, I mean, that’s a good question.

I think that it changed those voices in your head and all that stuff there then with every time you have a setback.

But I also think that it changes like, you know, when you’re 22 years old, you know, it’s like the end of the world for you.

Because like, you’re so naive as to how young you are that it’s like, all right, like, like, looking back now, it’s like, all right, like,

You never had any, you know, you lost 2,500 bucks, and like you moved from the mom’s house for like six months or three months or whatever.

Like not that big a deal. But at the time, you know, it was like the biggest catastrophe in the history of mankind.

Like how is that going to go on?

You know?

But at the same time, you’re also like, all right, like the strategy I was doing didn’t work.

Like I never really viewed it as a failure.

I was like, all right, this didn’t work.

Like I have to figure something else out though.

That’s gonna work.

So basically, what I did is I went back to my mom’s house and like, man, I didn’t even know who I was following.

Like I don’t think there was any Twitter or anything at the time, at least I wasn’t on it.

Or maybe like a year later, I was on it.

But I found some guy in some room who was running a prop firm in New York that in hindsight, was probably his model was a little similar to the people I was at.

But I do think this guy was genuinely trying to teach people.

I think because he was a little more, I think because he, how should I put this?

I think because he had a heart, he actually wanted people to do well is probably why his prop room didn’t work.

Because he wasn’t willing to just sell.

Anything like he wanted people to learn how to trade correctly and stuff.

So I started learning from this guy.

He had this virtual room or something.

I think I was trading the E-minis.

I had a couple of grand and I can’t even remember.

Maybe I could trade one contractor or something.

I was doing that from literally my bedroom from a laptop or something.

I think my mom and my sister, they thought I was like…like crazy.

They didn’t know what I was doing up there all day, but I was studying every day.

That’s what I was doing and I’m sure a lot of the days I wasn’t even trading at all because I was also working at the moving company, but I wasn’t full-time.

They didn’t always have hours for me even though I’d worked there for a long time and then I was fortunate in that a guy that I played football with, his dad, was a football knew a guy who ran a firm in Stanford.

It was these guys that split off from that legit prop firm that my buddy worked at.

I guess technically they were like a hedge fund, but in reality, it was like five or six guys that split off and they just wanted to kind of prop trade but in a smaller group.

I think a lot of them were from Stamford, White Plains, New York area.

So it kind of allowed them to live closer to home or whatever and so I was very fortunate in that I was able to kind of get in there as an assistant.

These guys did international arbitrage, which was much different than anything.

I didn’t even know this existed.

Like I had no idea that any of this existed at all.

So I assisted these two guys and one of them was a very aggressive trader, like really, really swung for the fences, at least at the time.

I’m still friends with him now and I think he’s much more, he’s less aggressive now.

Then the other was so conservative, so conservative that like if he lost money,

It was like the sky was falling and actually, I don’t know this, but I don’t think he lost money that much.

But I also don’t think he ever really, really killed it.

But I think emotionally, just like the uncertainty of like money making, via trading, wore on him and he got out of the business a little bit after we…broke up as a group.

But it’s kind of funny because I would say he probably made money, at least this is my impression most days relative to some other, most people that trade.

But I just think that the whole idea that there was a chance that he might not have made money, really scared him.

Now actually, he met his wife through me.

He’s got three kids now and he’s super happy.

So it all worked out amazingly for him.

But it was just interesting that I was kind of, and you guys were great friends too.

I’m sure they’re still great friends today if I had to guess.

But I was assisting these two polar opposite, trading personalities, and trust me when I say I got to witness the extremes of each.

But basically from a strategy perspective what we did is we traded a couple of stocks.

So we traded Newscore.

So this conservative guy, I want to say that he traded Newscore 100% of the time and so Newscore traded between the US and Australia.

There were so even international arbitrage, the way that the first…

Strategy I did I think worked a couple of years before I did it.

I think international arbitrage a couple of years before I got there There were a gym easy arms that were I don’t want to say free money because nothing’s ever free.

But pretty consistent free money where news cores the US would be like a Percent a half higher than Australia you would start the US clothes.

You know do half your Aussie dollars and then buy it back in Australia do the rest of your Aussie dollars and make a percentage.

I think that guys did that pretty consistently before when I got into it.

Then I think about when I got into it, and again, I didn’t realize this at the time because I just didn’t even know enough to realize it.

But you look at a charting news score now, NWSA, it breaks out and it goes up in the US, and then let’s say — it was trading at a premium to Australia, guess what it was going to do?

It was going to even go up higher in Australia because it’s like a clean breakout.

So even though it looked like there would be an ARB there, there wasn’t.

It was just like there was momentum and I think if I had realized that at the time, I would have done better doing the international ARB stuff.

But then other trades were…

We traded BHP and Rio between Australia and the US.

Then a very interesting trade that I can’t say I did because I think it was more of an advanced trade that they just told me not to do was Rio Tinto.

It’s a big mining company in Australia.

Rio trades in the US, Australia, and London.

But it’s non-fungible, meaning you couldn’t convert, I think it was London shares to the US market.

So London traded with Australia and the US traded with Australia, but London didn’t trade with the US.

So like you couldn’t convert it and so there was a guy on our desk who was a real player and like a lot of money and who I’m sure is still trading a lot of money now, but he was a spread trader.

There were brokers that would make a market on the fungibility of Rio.

London to the US and this guy, and this is my understanding, again, this was so long ago, but he would trade the broker spread.

So the broker spread would go up and down based on where he was willing to make a market on London versus Australia.

He would hold up and down and let the, you know when the broker spread was way out, he would start building his position.

You know, this guy would use, he was very smart and, you know, I’m sure he had excellent money management skills and, you know, he would play that spread.

There were a lot of guys that would play that spread, but, you know, they’d play that spread with like a one or two-day approach.

Whereas this other guy was like a bigger picture, like, because when that spread paid, I think so the firm ended up blowing up in 2011.

The market sold off, particularly Australia mining stock stuff, and I want to say that guy in the end ended up making a lot of money on that, even though he was down good when it blew out.

But he was down and he hadn’t even really put his position on yet.

You know what I mean?

He was in his position, but he hadn’t put it on yet and I want to say when that collapsed, he ended up making a lot of money.

So that was a trillion and then a little less so, but we would trade like Toyota, Sony, between Japan and the US.

Then probably one of the craziest days, and I was too scared to trade, I can fully admit it, but when the tsunami happened in Japan, man, I’ll never forget.

There was this other crazy kid on the desk who was, he was my age, but he was a freaking wild man.

I mean, he made a lot of money when, at the time, for like a 23-year-old.

I didn’t know how much but like well under the six figures, I like, you know, high, maybe high, I don’t know.

But he needed his load of that toy out and right on the open of the tsunami and it ripped and I think he cashed out like 15 minutes later.

But you know, when we ended up blowing up, you know, he got destroyed.

I guess, you know, I got to witness a lot there, but in the end, I didn’t make any money doing any of the international arbitrage stuff.

I had followed one of my mentors into some stuff, you know, not the conservative one, the other one, you know, when I first started to kind of try to learn.

The thing is, like, these guys were trading such bigger sizes that for me, like, what was the small size for them?

You know, I think I was down like 60 grand in the first month.

It was like no big deal. But for me, it was a huge deal because like I had come from losing 2,500 bucks in like four or six months to now down 60 grand and it’s like no big deal.

I was never paying a draw.

Like this was a real firm.

They were taking some risk on me.

When they interviewed me, they thought that I had, you know, they could tell that I had studied, I’d worked hard and stuff.

You know, they wanted to invest in me.

But I couldn’t handle it.

I didn’t understand the trades I was putting on either.

I was just literally following people blindly, which like that’s what they kind of wanted me to do.

I understand why.

But I ended up finding this guy on Twitter.

Then I got on Twitter and I found this guy by the name of Trader Florida, who still exists, but not in the way that he did at the time.

This guy I still think has got to be one of the greatest traders ever.

He would go on to Twitter every night and just teach short videos.

He introduced me to William O’Neill and the funny thing is my mother had bought me How to Make Money in Stocks like a year earlier and had told me like…

“Hey, if you’re going to do this, you should read this book”

I think like I…It has 1999 on the front.

The one she gave me was a thin blue-covered book and I wish I still had it, but I don’t know where it went.

But I have my copy right here.

But she gave it to me.

I never really read it because it had the 1999 on the front.

You open it up, it’s got like 99 SMR rating, 90 R, and you’re like, what is this stuff?

Like they were just trying to sell us all this stuff.

Like, you know, I’m reading about MACD and RSI.

You know, I’m reading about the real stuff that’s gonna help you make money trading.

I never read it.

Then I run into this guy, Trader Florida, you know, probably a year later, and he’s saying…

“You know, you gotta get this book, 25% minimum earnings, and sales”

Stocks making new highs, charts, you know, cup and handle, you know, this guy would say…

“You know, charts are everything to me, and volume”

This guy, now that I’ve been doing this a while, is what he, really, really taught me about volume.

Volume is everything.

Like I don’t know how anybody can trade the market without volume.

Volume is like the key for me to everything and a guy who’s become a mentor to me, one of the ways he scans the market is he covers up the charts.

He just looks at the volume patterns and he’s able to tell you where stocks are going to go based on the volume.

It’s true when you learn to read volume like the gates open up.

But anyway, I started following this guy on Twitter and I mean, I was going through his videos every night.

I lived in a, I had a room and house with like five roommates.

hey were all over than me and I, you know, somewhere at like 8 pm is when like Japan and London opened and even, even when I stopped kind of following these guys on ARB and I was more US swing trading, I was still an assistant.

I had to watch the London open at, or sorry, Japan, which opens at eight with Australia, and I would bring back an hour.

Between the two depending on the time of year.

Then because I had to sit there, I was studying charts.

I built up my repertoire of trading books.

I was reading my books.

I was studying the Trader Florida videos every single night for hours.

I think the people I lived with thought I was completely insane.

They never saw me and then I’d sleep for a couple of hours.

I’d have to get up for like the…

I guess, would it have been the Japan open at 1 a.m.?

I can’t even remember and then I’d have to get up for the London Open at 3 a.m.

I’d have to get up for ARCO open at 4 a.m. when the U.S. likes pre-market traded because sometimes these guys would want their ARBs taken off at like 4 a.m.

That’s where there were huge outlier discrepancies because a lot of these guys, that’s what they were doing more trading-like spread-type stuff.

The times when nobody else is watching is when there are inefficiencies, you know?

But because basically from Sunday at eight until Friday at four, I was pretty much watching the market.

I was just stoking everything this guy had to say…

“You know, I’d be watching like the London Open here and I’d be like trading the floor right up here”

 I mean, I was watching the sky for 16 hours a day and I started to make some money.

You know, not huge because one of my issues was I was so scared to lose money.

That’s how I always was starting I never really made that much money either for two reasons.

One, when I was right my position size would be too small, or two.

I would kind of just be too tired of a stop.

I’d get shaken out and then, and then, and then things would move without me.

But then I started making some good trades.

I started making some progress and I started, even though I was getting a draw, I had to make back what I lost before I was going to make any money.

Then I would also have to make what they paid out on my draw before I started getting an excess of that.

I was getting there. I can’t remember exactly.

It was going well.

Some of the stocks I was trading were names that I would have never traded before meeting Trader Florida because I would have thought they were too expensive.

Like CMG at the time, I want to say, was like a $300 to $500 stock.

I would have always thought that’s too high a price.

I can’t trade that.

But Trader Florida made me realize that those are exactly the names that you do want to trade.

Because those are the names, you know, the institutions are buying because our little Joe Schmo retail trader who thinks you don’t want to trade that won’t trade it.

So, therefore, all the volume that’s in that name is real, like it’s real buyers and sellers.

Therefore, it’s easier to read a stock like that, which is how I trade today.

The main name I’ve been trading for the last few years is Nvidia.

It’s like a $700 stock and the amount of volume that pours in and out of it is just unbelievable, which for me, the way I trade makes it easier to kind of read.

But I learned that from Trader Florida.

To make a long story short, in 2011, I can’t remember exactly what the catalyst was, if it was rates or what it was.

But the markets, we were in a choppy range-bound market anyway.

But we had like a flush out where commodity stocks, in particular, got hit, things like Rio and BHP, and our firm got run over.

I think some of them even just, the way I was taught when I was doing ARBs was like, if you’re going to put an ARB on, you always have to hedge your edgy Aussie dollars.

Just because when you open a position in one country and close it in another, you create a currency position and then you have to collapse that when you close the position.

I wanna say that rather than close their Aussies, they doubled down.

So they were long Aussies and then rather than sell Aussies to get down, they just said…

“Oh, this is overdone and they then bought Aussie dollars”

So I think in the end, I don’t know exactly what happened, but we got hit in the mining stocks.

We got hit in the Aussie dollar.

I think those guys have done well. I say those guys because let’s be honest, I was the smallest guy.

Whatever I was doing did not affect the bottom line of anything and the day we went under, I’ll never forget, I was short the OAH, the Oil Services ETF, which at the time was much more tradable, I feel like, than it is today.

I was feeling really good.

I wanna say I can’t even remember.

I think I was gonna make like six grand in a day or something like that and I’d had a bigger day than that, but it was like one of my biggest days.

I was feeling really good.

Like I knew when I came in the market was breaking, like things were breaking wide open and I was feeling real, real good.

Then, you know, maybe like 10 a.m. or 10 30 and, you know, knowing me at the time, cause I had probably, it was probably gone more and I’d probably already covered a lot of my position just cause, you know, I didn’t have the holding power that I have now.

You know, that probably in this little conference room quick and easy because remember when you’re trading from like 8 p.m. on Friday to four p.m. or 8 p.m. on Sunday to four p.m. on Friday, you end up spending a lot of time with these guys.

Like even when you’re not on the desk, you’re at one of the guys’ houses trading and then you like to do something or whatever.

Like you’re kind of trading the opens and closes and then you’re kind of like always together all week, not entirely, but Spent a lot of time.

So like the guy that you’ve been with all week brings you in and he’s like — Hey, you know, we got drilled.

Go close all your positions.

We’re shutting everything down and you’re like, whoa, what? Like what? Wait,

I’m like my downstairs or whatever and he’s like…

“Yeah, but your downstairs doesn’t mean anything”

No, I’m just like, what?

So later on, that was kind of for me, I guess you could say the third time, you know, with the thing that happened when I was a kid.

Then my first product experience was kind of like the third time now where the market got me.

I was just like…

 “God damn, I felt like I was starting to learn”

I was still very ripe. I want to emphasize that.

But I felt like I was starting to make progress.

I sort of had a sense as to what I was doing for the first time, maybe in that two to three-month period.

I felt like I was developing a strategy, you know?

And then just, you know, gone, job gone, like, you know, figured out.

I don’t know what you’re, whatever, what’s the saying?

You know, go somewhere, you can’t stay here or something like that.

That’s pretty much how it was and, you know, I think we all like went out that weekend and then that was kind of like, that was it, you know?

Now it’s back to mom’s house again.

Rayner (1:00:23)

Right, but before we continue Oliver, do you want to get some water first?

Oliver (1:00:30)

I had some water earlier.

Thank you.

Rayner (1:00:31)

Okay, fantastic.

So yeah, you’ve covered a lot of ground, right?

Your personal life, your debt, and your different trading methodologies over the years.

So now let’s talk about maybe today, right?

So what’s your trading approach today?

You mentioned a little bit from Trader Florida, I think the canceling methodology, right?

So maybe you can share a little bit more?

Oliver (1:00:47)

Yeah, so I…Where I’ve been I’ve used charts pretty much entirely and I utilize the 10 and 20-period moving averages, and exponential moving averages.

Those are kind of my goalposts that I trade around.

Then I use the 50 SMA as a guideline.

I don’t trade off the 50 SMA though.

Everything I do is around the 10, 20 EMA, and then I kind of measure whether a market’s extended to a degree relative to the 50-day, maybe the 200-day.

Then I use price structure.

So I’m looking for stocks to kind of break out of little mini consolidations that are generally around the 10-20 period moving average.

I’m looking to ride the moving averages higher then I settle into what I call extensions, so kind of little extensions away from the 10-period moving average.

Or if I don’t get the extension right, I get stopped when we lose the moving averages.

Then I’m also just looking at it, so I do that all on the daily chart.

The daily chart is kind of my trading timeframe and I’m looking at the weekly to just kind of see the bigger picture, how big the base is, how far I think this thing can move.

I’d say I managed the trade-in and off the daily, but I watched the 65-minute chart to assess the higher highs and higher lows.

I am definitely like a price structure trader, and I would say a good way to describe my strategy if I had to say it in one sentence would be that I’m a moving average crossover person, but I’m not actually.

But I’m looking to anticipate the changes in trend via the price structure.

It’s what I mean by that is if I see a stock building kind of like a base in the way I differ from CanSlim, you know, they talk about like four to eight-week bases, you know, I’m talking about, you know, four to 10 day little mini consolidations that might be within a bigger base.

But I’m trading it off than what I call the mini base and once we kind of make that higher high or bust out of that, I like to get along with a stop below that.

Then as long as we have higher highs and higher lows on the 65-minute, I stay long.

Then I use the 1020 EMA as kind of like a filter.

So for example, you may think that a stock’s making a lower low, but if it’s above the 10-day, I kind of say to myself, well, is it a lower low?

Or is this stock just taking a healthy breath of fresh air, letting the 10-day catch-up, and then it reconfirms higher, meaning it makes a higher high, and then I know it has a higher low, and that’s the higher low?

I kind of manage my position again, so then if it goes up and it does the same thing again, and it reconfirms again, I’ll then move my stop up again, and I’m looking to ride the trend higher.

Then ideally sell into an extension.

Now you don’t always get an obvious extension.

Sometimes you just kind of have a petering out in momentum.

So for example, I caught this move in the video that started around like 495, 500, and I’m out most of my position here around, I probably got out of most of it around like 732 or so.

And one of the reasons is it’s a little extended on the weekly.

I don’t think it’s done anything wrong at all.

I hope it pulls back so I can get, get back a big position on it again, but it’s moved enough and I’ve, and I’ve made enough and it’s made higher highs and higher lows this whole time.

Now we have earnings next week and I don’t like to take an enormous amount of risk on earnings.

I will hold in earnings, but I like to kind of, you know, I’ve been in this thing for six weeks.

We’ve made 40%, and 50% on our money.

Now I will hold a little bit in earnings, but probably about one-sixth or one-seventh of my position, just because I want to kind of put that money in the bank.

It’s February right now,  It’s early in the year and then if it gaps up, it’s higher than where I sold it.

I’ll just let it set up again and then I’ll get back on it when it sets up again and I feel like things have reset for me.

I don’t necessarily care if I buy it higher.

I just want to get my setup and then play the trade and compound my money.

So I’ve had a pretty good start to the year here and I do use margin.

So if I have a good start to the year.

Then I can catch a second run.

You know, I’m sort of, I’m hopeful that we can get a little chop here and then I can catch a second run before the election.

I’ll have more money to catch that second run and then hopefully catch a year-end run.

So I’m looking to utilize my strategy, but then could we just keep ripping higher here?

Absolutely. I think the market looks like a really good, bigger picture, but there was a chance we come in, I see some potential for that.

When I say come in, it might just chop around, you know, not necessarily come in and I want to make sure that I kind of bank my money so I have the opportunity to compound it when I feel like the market is freshly set up again, if that makes any sense.

Like when we’re coming out of a fresh base, you know, that’s always where I’m going to have my most size is coming out of a fresh, you know, little mini base.

As we get more and more extended and there’s more potential to give back, I want to have reduced out by risk and just kind of wait for that high probability play again.

I try to just do that over and over again.

Rayner (1:07:25)

Okay, so from what I’m hearing is that you like to identify stocks that are coming out of a consolidation, a base.

What’s the duration of the base that you said you were looking at again?

Oliver (1:07:33)

So I mean, it’s sort of at this point, it’s sort of like the well-trained, so this weekly chart in Nvidia had a lot of things going for it.

Then it was like a, so I’m aware of like the bigger base.

So for example, Nvidia had a six-month base, right?

So it was very nice.

But then the actual pattern that I ended up buying was really like a multi-day type pattern.

It was like, well, I guess it was like a kind of a two-week, what do they call it, double bottom base.

But then the way it’s set up, it’s sort of built over like three to four days.

So it’s kind of like a moon base inside of a bigger base.

So like I’m combining timeframes when I talk about these bases, but as far as where I execute, it was only like a three to four day.

Kind of mini base.

Could you maybe share the date so people can refer to it if they wish to?

So the way that I think about Nvidia is this base started in about August of 23.

I had traded this stock through that rally and then it consolidated between August and January and I was taking some trades in this base some winners, some losers, but no trade that significantly moved my capital.

But so we had this big consolidation.

Then if you’re looking at the weekly chart, you’ll notice that starting in the week of 12-18, we’re really in the week of 12-4.

We have kind of what I view as a weekly bull flag, and we kind of push up out of it the week of 12-4.

12-11, and then you resist at that 505 level, the week of 12-18. And 505 was important because that’s kind of where we topped on 8-21.

Then the trade that I got on with pretty significant size was 12-18, 12-25, and 1-1.

In those three weeks, you can see that the claims of 12.18 on the weekly was 4.88 and the close on 1.1 was 4.91.

So over three weeks, we traded in a 1% range.

So we had a huge contraction in volatility than the way that I saw that… Hold on.

The way that I saw that you know …

They put me on the digital chart on 1229.

We pulled back to start the year when the market did.

One, two, we kind of had a shakeout, and then on one, three, and I’m a big relative strength guy.

So on one, three of this year, the market was, where’s one, three?

The market was down, you know,

I don’t know. It was – my ticker is not working great here.
But we were doing pretty good and then we were right again on 1.4. And on 1.3, Nvidia closed higher than where it opened.

So it showed relative strength to the underlying market and then on 1.4, we were up and the market was down, and that to me right there, within the context of that bigger weekly pattern.

It was like two days in a row where the market was going lower and the video was going higher and then the next day when we traded out through the high of 1.4, I started getting along this thing in like the 4.85 area.

It went up to like 4.95 and it pulled back and I actually, I can’t even see this now because my arrow doesn’t go back that far.

I’m just doing this by memory.

But on the 65-minute chart, the way we traded out through $4.85, we had a nice little burst in the morning, and then we built like a bull flag on the 65-minute chart in the afternoon.

It looked really good and then the next morning, I loaded up because I already had a position from a solid price which allowed me to get aggressive on that next move the next morning.

I was really, I want to say I was buying $495, $497, $500 and I paid attention to the whole number for sure and so by the time we got to $500, you know…

I had a pretty significant position and then I knew $505 was the all-time high and so I bought a little more through $505 and then kind of by like the end of the day — I was like, wow, this thing’s going to go because like big volume was pouring into it and I already had a big position.

But until the close, you’re like, ah, is this thing gonna hold? But I felt good about it, but you just never really know.

Then into the close, I bought a little bit more, and basically, I think that is what I did, is I brought my price up to a little under 500, and that was gonna be about my stop.

So that’s sort of what I try to do, is I try to get a good size position on.

I’m not always buying at once, but I’m pretty aggressive when I feel like I’ve got it.

This was an instance where I felt like I had this thing and it was just clear to me and for multiple reasons.

One, you have a big weekly base. So you knew that if it worked, it was going to have the firepower to move, you know because you need that big, big base.

But then the way that it showed like two days of relative strength and it started to kind of tighten up its base.

So it had been like, it had made a 20% down move from 500 to 400, and then it made a 10% down move from 500 to 450, and then it made maybe, what, like a 5% down move from 500 to 475.

So it had kind of contracted its base and was showing that the sellers were rejecting it at 500 but the buyers were supporting it at 400, then 450, then 475, and then in that little index pull-in to start the year, there were no sellers in the stock, you know?

You could just feel it getting ready to explode.

I mean, it gets me excited thinking about it.

It’s such a beautiful thing and I just felt good about it.

I went after it.

You know, really this trade kind of, I feel like the trade has concluded for me now, even though I still have a little bit.

But it’s a perfect example of what I try to do and it’s a good example too, because I still think this stock is going to go higher.

But it wouldn’t shock me if it had some consolidation first and whether that consolidation…

Retraders higher or if it pulls back a little then I buy it a little bit lower is kind of irrelevant to me.

It’s just I want to wait for that next consolidation and then take the next trade whether it’s higher or lower.

I’ve kind of made my money here and I hope I get it again at some point this year.

Rayner (1:15:35)

Okay, so I’ll just do a quick summary in case the audience wants to kind of like encapsulate what I’ve just said.

What I’m hearing is that you know, NVIDIA was a trade you took early this year.

You talk about the base quite a bit, right?

From August 2023 to January 2024. It’s kind of like, an ascending triangle, right?

From the looks of the chart, you know, classical chart patterns, you’ll call this a series of higher lows coming into resistance.

The way you got excited, I guess, was the consolidation got tighter and tighter, right?

Towards the tail end, I think it’s like just a bounce between 500 and 475.

Then somewhere inside you notice that there is relative strength in this stock as well.

If the indices were down, it might be a couple of days in a row, but this stock held up, closing higher for the day.

So that shows you signs of strength and you probably entered on the lower timeframe, like the 65-minute timeframe to get an entry.

I heard you mentioned something like a flag pattern in the afternoon trading session.

That’s where you got your first entry and then you progressively scale up as the price, you know, showed you, you know, it’s working out in your favor.

Kind of like summed up kind of like.

The setup that you would love to trade over and over again?

Oliver (1:16:43)

Yeah, I mean this, if I could just trade setups like this, and also in stocks like this, I like liquid stocks.

So like I know other stocks can have a bigger percentage move, but I will put a lot of money in a stock like this, whereas like another stock that maybe can move more.

Is less like so like I caught the move at SMCI too but because of the way SMCI trades I am never going to have as big of a position even when it had a bigger move.

Because like you know it’ll move like 10% in a day and I like high beta but I don’t like insane betas at least from a sizing perspective so it’s the setup and then it’s stock.

I think the key thing, the two key things I would say is one, like the bigger picture base, was big enough so that if it did trigger, it had the potential for a big move.

Then the way the volatility within the base contracted would kind of be 0.2 and then a lot of the times in just about all of my big trades, you’ll see like two days of relative strength before they launch.

That is kind of the key, the key tells that you have your hands on a big-time situation.

That’s why I love it, I love it when the index goes down because I can sniff out what’s for real, you know because a lot of stocks go up when the market goes up.

Some of the stocks I would never want to own go up the most when the market goes up.

But they also get destroyed when the market goes down.

Whereas the real, I don’t wanna say that…

Yeah, like screw it, the real stocks, the ones that I wanna own, they often have support under them when the market’s weak.

So one of the things I learned from Trader Florida that he always emphasized is, you know, corrections are great as long as you don’t ride them down.

Like don’t be afraid of a correction or pullback in the market, it is putting on a silver platter for you exactly what you want to be focused on and what you want to buy.

So I love it when the market goes down.

I love it.

Rayner (1:19:16)

Okay. And from what I’m guessing, right, you won’t often get such setups like this because it needs time to build up and stuff like that.

So what do you do in the meantime if, let’s say for a good period of the year, there are no such similar trading setups?

Oliver (1:19:32)

Yeah, so like I can tell you right now.

So like my mentality, I guess, going into this week is, I caught this SMCI move, it was like a month and a half long move.

I caught this Nvidia move, it was like a month and a half long move, and some of the trades I made would be longer than that.

They might be like two and a half months, two months, or something.

But sort of my mentality, even if we go a little bit higher here, I don’t know is to just kind of take things a little bit easier for the next, I don’t know, two or three weeks or something and just kind of see what happens here with this market and hope that I get a new round of setups.

I’m thinking at that point, we could have another big move maybe from the middle of March to June, July or so.

Then I have another, I’ve been in crowds since.

When I bought it, I started getting in the crowd at like 172.

So I’ve been in crowds since September.

So, you know, NVIDIA, I still think is going higher, but as my current trade has, you know, realistically NVIDIA could pull back a couple of percent and I’ll probably be back on it.

It’s, you know, it’s like the same trend, but it’s a different trade for me.

Whereas other names that just move a little differently, like I’ve been in this crowd for now, sort of unbelievably like four or five months.

So if I’m in other stuff too, it’s not just like I’m in one stock.

So I have other stuff going on.

I have other stocks coming up right now that have earnings that will kind of depend on how I build them.

I took a pretty big position in Coin a week ago or so and it’s moved pretty significantly.

And I’m sort of like, so for example, for that, like what am I doing in the interim?

I’m hoping that’ll rest for like two or three weeks and I can buy more because I think there’s a chance it goes higher.

I feel pretty good it’ll go higher but I just, it’s crazy stretched right here, you know.

So, you know, and I’m studying other things.

Other stocks have reported earnings recently that have ripped on earnings, which I don’t generally chase that stuff.

But I’m focused on that stuff to kind of chop down here and set up for me, even if it’s just like a week or two a chop.

So right now I have so many things, like so many things that I’m paying attention to.

That I’m not gonna chase right here, but if I can get a little bit of consolidation, I’ll be all over them.

You know what, if they just keep ripping iron, then I’ll just kinda have to wait.

So even when I don’t have a big trade on or something, I used to try to do stuff like trade the shorter timeframes and stuff.

I’m staying away from that one because I think that I can’t say I made massive progress doing that.

Maybe I have a good day here, a bad day there doing some day trading.

I make my money hitting my core trades when they’re set up and putting a lot of my account in those trades.

So I guess my mentality is to stay focused on the big picture.

Understand we’re six weeks into the year and then I feel like with the move we’ve had and how I think about the market here with it being an election year, and just kind of how I’m seeing everything set up.

Like last year, it was just the big caps.

Now I’m seeing so many other names, like having what I call a weekly change of character bars.

So I think at the beginning of every single move in a stock, you have a massive week of volume.

Now, maybe that’s an earnings report or some other form of catalyst of some sort, but you have an enormous weekly volume, what I call a weekly change of character bar.

Then to me, that usually means that that stock is going to be supported on dips and pullbacks.

Obviously not always and sometimes it’s supported, but it doesn’t accelerate higher.

It just kind of like doesn’t go lower.

So I want to hopefully try to position myself in the situations that get supported and then expand higher.

I see so many weekly changes of character bars right now.

And I, and, you know, I keep lists of them when they happen.

So I don’t necessarily always buy them when they explode, but I’m focused on those names as they consolidate and set up.

So really right now, like literally going into next week or the week after.

Regardless of where the market goes, because I don’t care.

I am so bullish on the market right now.

But as far as how things are set up for what I can aggressively go after and buy, just based on my strategy, I am sort of waiting for some of these things to build this kind of two to three-week little mini-base of some sort.

If that happens, I think I’m going to have another pretty good run here.

So I have some positions on right now for sure, but I have many things that I’m watching and I have the cash right now to put to work.

I’m just kind of waiting for these opportunities to come to me where I can get them in a low-risk position.

This is a good time for you to ask me that question because that’s literally what I’m going through right now, like heading into the week.

The names that I’m mentally zoned in on, are Nvidia for sure.

I got to get through this earnings report.

Then if it gaps up, if you look at January 23, I think it’s set up exactly like it is right now.

It pulled back into the 20-day a little bit before earnings, gapped up on earnings, and then went sideways for two or three weeks.

I sold it last year and I bought it back maybe five points higher, but in a completely new setup with like a three-week mini base.

I would love it if we saw something like that happen in the video and if we did, I’ll be all over it.

Then I think this coin, I mean, coin just moved from like 120 to 190 in like eight days.

I mean, that is in really, I thought the earnings were really good.

At least the way I was reading them.

A lot of people thought that the ETFs were going to crush coins revenues and coins had a great revenue number and they posted a surprise profit.

I look at this thing and I say, the 10-days at 150, so we’re about 20% above the 10-day.

If I buy, the chances of me being able to hold that position are very low.

So I had a position from 130 and I sold a little bit on Friday.

I sold a decent amount.

But really, that’s kind of trade one for me and I kind of took some profits on that.

Now I’m looking to reload a second position on a coin.

I’m very interested in coins.

I can’t buy something 20% above the 10-day movement average.

It’s just not going to happen and then crowd, which is another stock I’m in.

It has earnings, I believe I’m three five, and PinW, Palo Alto Networks is another cyber stock that reports this week, and then Zscaler reports next week.

I’m sort of just looking to kind of get through that on that position because I have it from so much lower, and I think it’s going higher that I’m willing to kind of sit through some consolidation on that type of stuff.

But really, I would like to get another position of that going.

Mentally for me, it’s a completely separate trade, but I think it’s one of the best stocks in the market.

Rather than diversify down into another name that I don’t think is as quality of a name, it doesn’t have liquidity, it doesn’t have the earnings and sales, it doesn’t have the sector theme.

So kind of the themes for me this year are like AI, Cyber, crypto, and then you’re always going to have kind of these one-off names that maybe are their theme.

But so those are kind of the areas of the market that I’m focused on.

A lot of people are talking about oil stocks turning right now.

Like I’m not looking to kind of chase that sector rotation.

I’m just saying, okay, maybe some of my stuff’s a little ahead of itself. I just want to be patient and let it set up again.

I want to stay focused on my stuff.

I don’t want to miss the two days of relative strength before it goes, because I’m screwing around with some financial stock or something that’s going to rally like 10% in like three months.

You know what I mean?

I want to stay dialed in on my core names.

That’s what I’m thinking.

Rayner (1:29:24)

Yeah. So, yeah, you mentioned relative strength, right, for two days before the move, right?

So how important is looking for that relative strength before the breakout?

If you don’t have that, do you still take the trick?

Oliver (1:29:37)

So like, yeah, I can’t say that I’ve run, I mean, if the pattern’s there, I will.

But it’s almost like you get this conviction when you see that, that doesn’t exist when you don’t see it and conviction equals a bigger position.

Part of the reason they’re in a position is because when you’re putting the position on, oftentimes the feedback you’re getting is that…

“Hey, this thing’s for real”

Just the market’s telling you that.

But then I’m a big believer that in your subconscious, your subconscious senses that too, just from watching it trade for those two or three days where maybe you weren’t even doing anything, but you were getting this feedback.

When the trade triggers and the volume comes into it, that subconscious says — Hey, now’s the time. Now’s the time to go.

Like this thing is, it let us know the last couple of days that it was perking up, and today it is telling us that we are ready to go.

So, there’s like a couple, here’s an example of a name.

Right now, that had a big earnings report and I think it had a big move.

But right now it’s, it seemed like it might have wanted to continue last week, but it kind of thrilled Friday.

If you ask me, Palantir is a pretty popular name.

It had what I consider to be a weekly change of character bar, I guess the week before last and right now if we were to kind of and that at some point have those like two days of relative strength, like if it continued to build out this pattern like I’m projecting myself on the future right now.

This is not something I do, but I’m just saying that if that scenario played out, I think it would kind of have the pattern to act on something like that.

So it’s like the relative strength within the context of the overall bigger picture.

Some random piece of relative strength in the middle of nowhere.

It has to do with the theme of the stock, and the overall bigger picture. It all kind of comes together.

I don’t know how to describe it 100%.

But seeing that relative strength, I find is often very present before a stock really kind of moves.

You need that consolidation too.

If a stock stretched from the 10-bay or something and it’s stronger than the market, that’s much different because it’s like…

How do I manage my risk there?

Whereas I’m talking that subtle bit of relative strength within a base, which I don’t even think Palantir is quite there yet where you could, if it channeled down a little for a couple of days, set up a little more.

Then that were to happen, it would be very meaningful to me because you kind of have like a big week up, a week last week that was tighter, and then if you got like two tight weeks.

Now you got three weeks of mini bass and then you start to see that signal, then you can pay attention because you got the weekly change of character, you got the rest and then you’re kind of getting that signal, that strength signal.

In a position where the stock’s not extended, whereas if it actually, stock can be really strong and look good, but if it’s extended, it might kind of move for one day and then kind of act a little sluggish.

So it’s got to be at the right time.

Rayner (1:33:37)

All right, so I hear you mentioned this thing called the weekly change in the corrector bar.

So maybe could you expand on it?

Not quite familiar with it.

Oliver (1:33:43)

Well, it’s just, it’s just like big volume.

So I call it a change of character.

I’m just a big believer that if you go studying a lot of, you know, I hate to use the word like leader or whatever, but a lot of names that move, they have significant moves.

You know, often if you go study specifically the weekly chart, if you go study their weekly bases, you’ll notice that there’s an enormous amount of volume.

Before that name took off.

So here’s a name that we can look at that I’m watching right now that was probably by last week, but if you were to go look at this stock, NPP and I’ll point out a couple of things to you in this weekly and this thing is short term extended right now for the way I trade.

It wouldn’t shock me if it just kept moving higher once a week at 2.6, there’s a lot of volume and it’s still in a weekly downtrend.

So it’s kind of like — I’m not going to buy that.

But if where we are now, I’m like…

“Oh, maybe that’s where they started buying this thing”

Then it goes through a couple of months of tight trade and then on 5-8, you see big volume again.

Then 5-15 weeks, you see a big volume again.

In reality, that was kind of like the change of character, but just kind of with how the weekly is so beaten up, that is not something that I’m going to buy.

But then notice the week of 8-7, I mean, it does a lot of volume, a lot of volume.

Then it goes into this multi-month consolidation, just like that Naviglia pattern.

This thing started to build the space the week of 9-4.

So it’s been about a five-month base and even within that base, look at the week of 11-6, massive volume.

That’s a big up bar.

Then the volume sort of tapers off.

Then very recently we saw more subtle increases in volume, the week of 122 or 129.

Then this week we exploded.

Let’s see…36 million.

I’m stuck in the highest volume week ever, but only about 400,000 shares off the highest volume week ever in the history of this stock.

Really, like a lot of people will buy this gap up.

I’m buying that gap up in a more liquid stock in a name like New Vittaloo.

But this stock can be very volatile.

I’m just if I had bought this gun right by going into a small position, I would not have bought a big position because I would have been scared that this thing’s gonna flash down. After all, it’s not liquid and I’m gonna get smoked, you know?

But now that it’s supported itself, even if this goes higher here, which like, you know, it probably will, at some point in time, at some point in time, whether it’s, you know, next week or a month from now or whatever

This is probably going to have a multi-week consolidation and it’s gonna let the 20-day catch-up, hopefully, it’ll even consolidate to the point where it lets the 50-day get a little closer.

I will be on the stock when that happens.

I don’t know, again, I don’t know if it starts to happen now or if it happens a month from now, but because of these volume signatures that are, you know, have been occurring on the weekly and specifically this past week where it just did enormous volume.

I started to think that what I would consider to be the change of character was the week of eight, and seven. You know, to me, I know it did more volume before then, but it did about 36 million shares that week.

It also had kind of established more of an uptrend.

Whereas, you know, the volume on the lows could have been shorts covering, who just absolutely crushed it.

But now that we had rallied from, let’s just say — $10 up to $30, the guy doing that volume is probably a real buyer, not a shortcut, but he’s probably a fresh buyer in the name.

Then you start to see, think about that week of 8-7, the claims that week was $38.89.

Now think about the week of 11-6 where we did that enormous volume.

The opening that week was $39.36.

Right about the close of that other big volume.

I can’t even bet you it’s the same buyer, kind of supporting his price.

So we didn’t get into this, but after I did the thing at the firm, I went and became an institutional, like basically a sales trader, but I was what’s called an outsource trader.

I traded for like a fund that didn’t want to hire a trader, they hired us and they primed broker with us and we knew their portfolio and we knew the positions they wanted.

Those situations, you know, one very high-profile growth stock that a lot of people would know, I bought millions of shares of this thing over, you know, over a year.

I bought hundreds of thousands of shares of this thing a day and I got to understand, you know, how.

So this will be one volume.

I was saying it’s more than one just because of the amount of volume it’s doing.

But there’s definitely, definitely with how I see the week of eight, seven, in the week of 11, six, there’s somebody, the same guy, I would bet money on it, who’s building a big position in this thing.

They reported earnings this past week, that’s why it gaps up.

That earnings day was confirmed for him.

Well, he knew or didn’t know they never know.

But eventually, about a bunch of this thing on the open on earnings, and he was going to continue to buy this for months. And, you know, look, do I know that for a fact?

Absolutely not.

But I feel like.

That’s with my experience in building positions for some big funds that when they got on a growth stock early, kind of how they built their position.

A lot of these guys, think about it, this is a, what’s the market cap on this thing?

I don’t know. It’s probably under 20 billion or something.

They probably think this thing’s going to be like 100 billion, even if they think it’s going to be like 80.

They don’t think like us, like…Hey, I’m going to use a 10% stop.

They’re thinking I run, and you know, I’m not even talking to mutual funds.

I’m talking like a good-sized hedge fund.

I run 3 billion for this position to matter to my portfolio.

I have to buy $300 million worth of this stock.

You know what I mean?

Therefore, at 60 bucks a share or whatever, I’ve gotta buy like 500 million shares, which anybody who’s traded this stock, even if they did 36 million on this day, you’re not just like going in and buying five million shares of this stock.

You’re just not.

There’s just not enough liquidity.

So they’re probably gonna be buying three or 500,000 shares and actually, they’re probably buying you know, a lot more than that.

They’re not the only one, you know, if they’re on it, there’s someone else on it.

So, you know, it takes them weeks to buy it.

I want to let them get a bunch of it, and then what are they gonna do?

At some point, they’re gonna say — Okay, we’ve been buying this thing for like three weeks.

Let’s take the week off, you know.

Mike or car portfolio manager, his daughter’s getting married, you know, let’s just like stop buying it this week.

I’m not saying that’s what happens, but you know, something like that.

But then it might come in a little and they’re looking at their average price for sure.

They want to, I don’t know if they’re even like they want to defend their price, but they’re looking at like the last price they bought it at.

They, and I think they kind of view it like…

“Oh, you know, we bought some at like 56, you know, it went up to 65, now it’s back at 56”

Like, this means a pretty good area to start picking away again.

Let’s gu-wop some over the day and just pick away and then, you know, and then we’ll get aggressive again next week.

But let’s buy like a couple hundred thousand a day this week.

That’s like what I witnessed. And I think that’s kind of how that, you know, it has the big move up, and then they kind of support it.

But they’re usually not done.

They’re just like kind of supporting me at buying a little because like they need to buy a lot more.

So they just buy a little and that’s kind of what builds that little mini two to three week base or whatever that I talk about.

But then you get the guys like me who are on it.

When they’re inside, I think you know the short interest on this, but I just know the type of name.

There’s still shorts in this thing and then they realize like — Oh crap, like we have to start to get more aggressive.

People are starting to notice our stock.

We found it first.

Like we know the story.

We know it all. Where are we?

I make sure we get enough of this thing.

And I think we’re seeing a lot of stocks where we’re entering a better market.

We had the big caps kind of led year one of the low and now we’re seeing money flow into the small mid-caps because the market is people are kind of starting to believe in the market.

So they’re starting to take on more risk.

I think we’re going to see more situations like that, that, you know, for someone like me, if I can spot these change of characters where I can find that big buyer, and then if I can, you know, like, I always do it right.

You know, I sometimes think I got it right and I get stopped out, like actually more than I do get it right.

But if I can get a couple of them right, where I kind of pick up on that little consolidation and get on board for the trend.

If I can get a cup of love and right and maybe get three or five really good names in a quarter, that’s all I need.

So that’s what I mean by that weekly change of character is to spot that huge buyer in the stock and understand he can’t get everything he needs in a month.

He’s going to probably be supporting that thing.

Drastically changes in the name, then he might become a seller.

Then that’s it.

You got to watch out.

That huge volume on the weekly is often not a one-week thing.

Even if you don’t see the huge shot of O’Riordan again like that initial time, he’s probably still in there picking away.

That’s great because it provides support where a small guy like me can…

Find a spot is really how I think about it spot the volume, spot that change in character, and then just try to find a spot.

Sometimes it takes a couple of tries.

Sometimes it takes three or four times, but until you see that stock do something wrong, where big volume comes in on the sell side, as long as it’s acting healthy, you keep trying to give it a go.

At least that’s how I approach it.

Rayner (1:46:21)

Nice, that was a really good explanation of the weekly change in the character.

For those of the audience listening and there’s no chance providers, just do some, don’t be lazy, I go to Tradingview, and plug in the dates, right?

The ticker that Oliver has mentioned, is the APP app, right?

During the dates that he shared earlier, you can pretty much see what he’s saying.

So yeah, Oliver, another question, I think says.

I’m curious that earlier you spoke about NVIDIA, right?

You almost said NVIDIA, yeah, I think NVIDIA, you mentioned that you exited most of your position, then you are also in the crowd.

I was looking at both charts earlier.

They both, the move, right, and the magnitude both seem pretty good, right?

All broke out higher.

But Kraut, I haven’t heard you talking about exits yet, or have you exceeded a certain of the position for Kraut?

Oliver (1:47:06)

So, I would say that are unique in that, sort of the two names that like, were the first kind of liquid moving names of this.

You know, I sort of think that this rally started or like fillers through the bull market or whatever you want to call it sort of started at the end of October or November 1st when we came out of this correction.

The two names that to me were the leading names are Crowd and Meta.

So if you were to go look at Crowd, Crowd tried to break out on October 6th and I was the long Crowd on October 6th.

I felt really good about it. It had a big volume on the sixth, or sorry, on the fifth, or the fifth is when for me it broke out.

It had a big volume the fourth, or sorry, the sixth, the sixth, I’m sorry.

The big volume on the ninth and I was like…

“Oh man, I nailed this thing”

Because time will get to October, I like the month of October, there are often a lot of volumes in October.

Then it just kinda couldn’t get going and it kind of rolled back over on the 19th, the 20th, the 21st.

I think I ended up selling this thing on the 25th, and I was like super disappointed.

I think I made a couple of points, but it was kind of one of those things where when I bought it, I was like, I got my hands on something good, you know?

Then I ended up selling it for a few points, and I remember just kind of being a little bit like, damn.

But then that is what happened.

It came down and it tightened up below moving averages again.

When the market buttoned on them, this thing had an inside buy on 1027, so an inside bar is just like when the day trades inside the trade of the previous day.

It’s kind of like a micro view on contraction volatility, you know, it tightened up versus the previous day and then the next day, on 1030, it tightened up.

It was inside the bar of 1027.

So I call my double inside.

When I see double inside, I’m like…

“All right”

Especially on a name that I like, you know, especially that I like.

Again, I’m like 1031, kind of the day before the market kind of moved.

The market had, you know, the market had not wanted to go down anymore, in my opinion.

I’m like 1030, 1031.

But I also wasn’t sure if it wanted to go up.

But then I logged in and I knew it wanted to go up.

So the feeling is that it started to move on 10.6, but the market held it back.

Same with Meta and unfortunately, I was long Meta the same way I was long Crowd.

I didn’t get Meta back the way I got Crowd back, and now I’m trying to figure out how to get into Meta up here proved to be a pretty big mistake on my part.

But the way that I was able to get in crowds so early, by the time the video broke out, the crowd was already up like 100 points, 50%.

The market was at a completely different like the underlying index was at a completely different point in its rally.

Whereas, Right now, look, I don’t know what the market’s going to do, but I can see the market kind of consolidating here more or maybe kind of going up a little more, but a little bit more of the choppy fashion.

Kind of when we get to the way I said in like October, when we get to like mid-February-ish, maybe late February, sometimes early February.

You usually get some sort of seasonal correction.

So that’s partially playing into what I’m doing a little more, I guess.

So NVIDIA broke out later.

Whereas Crowd right now, if Crowd pulls back 10% or something, it just doesn’t affect me that much.

I had taken some off Like, you know, I do reduce a little bit, but because of what I was able to get crime, it’s been a pretty easy trade for me.

Just and it’s just nice to have a crime to me doesn’t move the way the video does.

It’s a little bit slower of a mover, but it’s nice to kind of have that kind of core name in your account.

So like if you look at the crowd, it’s gone up the 20-day moving average.

Whereas Nvidia has kind of been a straight line up the five days, but now Nvidia could pull back to the 20 days and I could be buying it back off the 20 days.

I could buy it now as a pullback versus a whole big base like it was originally.

But it has to do with the kind of index market cycle I was able to get long crowd versus Nvidia didn’t break out for.

You know, another two months.

I was already up 50% in the crowd.

So that’s part of, and then overall, I bigger picture like when I look at the weeklies and the monthlies on the market, I like how the market looks.

Because of where I’m a long crowd, and also because of kind of the personality of the crowd that it’s a little slower mover.

Just for me and similar to Nvidia, I’ve trained and crowded a lot, like a lot.

I’m just very comfortable with it.

I don’t know if that makes any sense.

But for example, I’m long some other stocks that I’m less comfortable with, so I’ve waved smaller positions.

I’m long like Snow, Snowflake, waved smaller positions.

When you’re in a way smaller position, it’s also easier to kind of give things room naturally.

But the way I traded in the video, the video where I’m in, it was usually my biggest position.

So, therefore, I kind of take my hits on it, and then I get back on it.

But like me, my kind of runner on the video might be as big as my snow position.

You know what I mean?

So I don’t know. I don’t know if that’s a good answer at all, but that’s what I’m doing.

So, you know, yeah, I’m sorry if that’s not the best answer in the world.

Rayner (1:54:11)

I can understand that because coming from a discretionary trading standpoint, not everything can exactly be quantified, right, for a quantitative trader, unlike a quantitative trader, yeah?

Oliver (1:54:20)

Yeah, yeah, yeah.

But it comes down to, I mean, crime broke out two months before in a video.

A huge cushion on it.

Rayner (1:54:33)

All right.

By the way, Oliver, right now we’re approaching the two-hour mark, and I want to be respectful of your time.

So how do you feel?

Do you feel that you still want to go on?

Oliver (1:54:40)

Maybe another 30 minutes or so?

Rayner (1:54:42)

Sure.

Let’s do another 30 minutes.

Thank you for your time.

I appreciate it.

Oliver (1:54:46)

Yeah, no, for sure. I’m enjoying it.

This is a different type of interview, so I’m enjoying it a lot more.

Rayner (1:54:53)

I’m happy to hear that.

So maybe let’s talk a little bit about NVIDIA.

You mentioned it.

Had a huge runout and you know if there’s a pullback right you might be looking to enter.

So maybe let’s kind of like going into the specific you know what exactly are you looking for on a pullback before you enter a trade let’s say for NVIDIA if it makes a pullback?

Oliver (1:55:13)

Sure so I’ll just talk about kind of what I’m thinking on the video right now because that’s the easiest way it’s just all right for me to think about it.

So when I look at NVIDIA…

Rayner (1:55:27)

So for the audience who are wondering, right now it’s currently February 2024, February 2024, so that’s kind of like because sometimes they look at this for the last year later, so put things in perspective, yeah?

Please go ahead.

Oliver (1:55:37)

Sure,

so I’ll try to use dance as I described this.

So I thought the movie was January of 20-

Rayner (1:55:55)

Sorry Oliver, maybe instead of one six, you can say like, you know, six of January.

So they kind of like, understand whether you- Oh yeah, that’s a good idea.

Oliver (1:56:00)

They keep manually going down to January, and it’s what we did, we kind of ran it on.

It’s funny, looking at this now, the move looks so small.

But at the time, it was moving from 150 to 230, which is about a 50% move.

Very similar to right now. Almost the same move.

Then what happened is I actually, exited my position similarly.

I exited the entire position and we kind of came back to the 20-day moving average into earnings.

On February 23rd of 2023, we had earnings and we docked up on the 20-day moving average, you know, about 10% or so.

Which at the time seemed like a massive gap.

I look at it now and it’s like, it’s barely anything.

Then what happened is we went sideways.

So the market was in a correction then, the index was corrected. I wanna say…

I don’t remember the exact dates, but the index is corrected from maybe the first or second week of February 2023 until the second week of March 2023.

So, moving to the point of earnings in the middle of the correction it gapped up and went sideways for about three weeks.

What it’ll do, is it came down into the 20-period exponential moving average on 313.

So the 20-period moving average is sort of like mine, I like to buy off the 20-day if in a situation like this where stocks acting well.

Then importantly, it never filled that gap up.

I love it when stocks don’t fill their gaps.

So I call, I say, big gap up equals the street’s call off guard.

It’s what I mean by that is, Wall Street was expecting X number of earnings, Nvidia reported Y and the reason Nvidia didn’t report the gap is that Wall Street needed to buy shares.

You know what I mean?

They were like…

“Oh crap, we underestimated this thing”

Then, so I started getting long this thing again, right in there, you know.

And, I should, you know, look, I tried to get long this thing, you know, like the day or two after, it just didn’t kind of work, I got all of it.

I know that I tried this thing on three, two when we supported on the 10 days, and it went up and it just kind of didn’t have power, and I got out of it for a scratch.

But then, you know, try number three, like I said, sometimes it can take a couple of tries.

I got in it there and it worked again and so sort of my mentality on Nvidia right here is now in – it’s February 19th, 2024.

Tomorrow will be the 20th of February.

I looked at Nvidia and it broke out of a six-month consolidation at the start of the year.

To me, this is what I call a stage two base.

So anyone who’s read William O’Neill, stocks kind of move in bases, third stage, fourth stage.

The first base in January of 2023 was a stage one base that ended up being a large inverted head and shoulders pattern that was like an eighth-month pattern.

Then the second pattern was like a six-month, I think you called it like a…

Ascent and Triangle, you know, whatever we want to call it, it was like a six-month consolidation.

We’ve moved about 50% and we haven’t had any pullback here.

So my mentality going into earnings is I’m going to… I’m…

Because I am trying to work on kind of holding positions a little longer, I am going to hold a piece of this time, about one-sixth, one-seventh of my position.

Whereas the first go around, I’d cashed it all in and I got back in.

Now I’m gonna hold some because I just wanna try to work on that.

If it were to wanna gap down on earnings, I would just let it find support wherever that may be.

Does it pull back more than I expected and come back to the 50 days?

That would be much more than I expected, but it’s possible.

Does it pull into a 20 and then support and take some time to base out?

Whatever it does, I’m going to wait for that and then kind of if it gaps down, I probably won’t go as aggressively as if I find a gap up to the truth.

But if it gaps down, I’ll kind of get it started again.

Maybe get that 161.7 up to like a 50, you know, half or a half.

Then if it worked out from there and it set up again with these highs.

That I would look to run back to it. So that would kind of go down.

So now my gap-ups would be just like where I was in March of 2023, where we’re down above, we kind of go sidewards a little, and then we set up and go higher.

So, you know, we set up on a Wednesday evening, so we still have two days here.

I would move right.

I love to see this thing pull back.

Love to see this pullback.

Part of it, just starts the week, going into earnings.

Because one of the things that I think, if you look at the weekly chart on Nvidia, so the week of February 12th, 2024, last week, it has a dodgy candle.

It’s a dodgy candle, but in the same way, I use the 10 the 20, and the 9 in the daily, I look at the same thing on the weekly.

I also look at the 5-EMA of the weekly, which the 5-e-ma is just about the 20-e-ma on the daily. Like they end up being about the same thing.

I think if you go study a lot of big moving stocks, they often hold the 5-e-ma and they often hold the 20-e-ma for that intermediate-term multi-month move. So I would love to see this thing pull back.

If this does, like, if we’re in a stock that, like, not that many people are at the beginning of the move, but then everybody, like, everybody loves it and it can’t go down right now.

Then, you know, everybody’s going to hold their hands because, you know, they’re going to be the next one in the meal or whatever.

But then that’s a long way to go to change their mind and they also.

So I’d love to see that happen to you and get this thing closer to the 20-year bank like it did last year.

If it does that, honestly, one of the things I’m thinking is if it does the same thing, do I have to back a little more of what I took off before earnings?

I’m not sure about that, but that is something that I’m considering if it plays out that way.

But if it were to pull back and then gap up on earnings.

The thing is, even if it went back up, it wouldn’t be so extended from the 20 days.

Then if it can consult a little.

It’ll have a nice setup.

It would be ideal if it didn’t cover what it did.

Last year, and I think we’re set up.

To where that can happen and that, you know, the earnings have to come in.

Good. Obviously.

But I think if we were to kind of, let’s just say that we were to break higher, we were, you know, tomorrow or, you know, Tuesday or whatever.

I sort of feel like with where the WUQA is and stuff, if that were to happen, which I actually, I don’t think that’s going to happen, but if it were to happen, then I sort of feel like whatever the number is, it might gap down.

If I had to do a multi-prediction here, I’m starting to think that it chops maybe a little lower into the number and then we’ll see what the number is.

I’m hoping for a gap-up because I just find stocks a lot easier to trade cleaner when they gap up and they don’t have any resistance.

So even if I buy it back higher, I don’t care. It’ll just be another, it’ll be round two.

But that’s what I’m hoping. I’m hoping we get a little pullback here.

I think that would make sense.

Just kind of based on how it’s trading.

I think, you know, if you were to pull up a 65-minute chart, which is what I look at, it’s kind of lost some momentum here since that February 12th high.

So I look at these things called brightening resistance lines.

They’re just like trend lines I draw. I think there’s kind of an art to it.

But the day of, I guess it would be 1-24. I don’t know, unfortunately, they don’t show me the dates in my 65-minute, but I think on 1-24 and then it must be like February 5th and then February 12th.

There’s like a line that connects those three and on the 65 minute, I can see it, you know, very clearly.

Probably once we hit that broadening line on the 12th.

You know, it’s going to last some momentum and they’re almost kind of cramming over into the clothes on Friday, which makes me think we could get a little bit of a pullback here.

You know that I don’t trade that setup.

So if it happens, like, it’s not something that I’m going to be involved in.

But it’s what makes me think there’s there’s a chance that that could happen before earnings.

But that’s what I’m looking for.

So the gap is down.

I’ll kind of let it settle.

I’ll be less interested in really getting involved in a gap down, even though I think it’ll get supported.

It’s just less what I’m comfortable with and I’ll kind of look to put some back on kind of when it pushes out.

Then if it kind of gets back up into the highs again, that’s when I would look to get back on it, really add back what I had and then if we gap up depending, it’ll depend kind of what happens to start the week.

But if we, you know, just because it’ll affect how extended we are on the report if we gap up.

But if we gap up, you know, I’d like them to be looking for some sort of little mini consolidation in the range of maybe, you know, maybe one to three weeks.

It’ll also depend, you know, if the index is correcting or if the index is going higher.

That’ll likely affect how the Nvidia pattern builds out after earnings.

So there are some variables, but that’s generally my fight process.

Then I just have to kind of wait and see how it plays out and try to do my best to position the right way.

Rayner (2:07:34)

Okay, so let’s say, for example, just one example, let’s say Nvidia gets up, right?

Then it starts to consolidate probably be two to three weeks.

So maybe relative strength, it looks pretty good, right?

Relative to the index and you’re looking to enter now.

So do you enter based on the daily timeframe or is it more on the 65-minute timeframe?

Oliver (2:07:51)

Yeah, like the 65 minutes.

So I will look to, keep the 65-minute 20 EMA and then keep the five.

So like I’ll keep the five, 10, and 20 from the daily timeframe.

I chart that on my 65 minutes.

I find that the 65-minute 20 and then the five, that they can sort of like pro-line price and be a good area to just kind of see how things tighten up against.

I’ll be referencing that and looking just for like a traditional pattern that you would see on the daily, I’ll just be looking for that to build on the 65-minute.

Whether that be a little mini bull flag or an inside bar that then breaks higher. I’m doing the same thing on the 65-minute as I would on the daily.

It’s just you get more bars on the 65-minute.

So what takes a month to happen on the daily might happen in a couple of days on the 65-minute.

But it’s within that daily pattern.

So it’s just kind of marrying up the timeframes and trying to find a spot.

Rayner (2:09:12)

Got it and what about, I think stop loss, where would you then decide to set your stop loss for your first position?

Oliver (2:09:18)

Yeah, so I’m gonna do it based on where I get involved on the 65 minute, which is probably the reason, like when I gave that example on the app earlier, where I said — I could get smoked on this, it’s because I don’t have like a stop there.

I’m not the best at buying huge gaps.

Even though I know that’s become a very, very popular strategy and you buy the gap, put the stock at the lower of the day.

I mean, everybody makes it look so easy, but I’m sorry.

I’m sorry, but in practice, it’s not as easy as they all make it look.

Whereas I prefer to kind of let the stock move up on the 65 minutes and then kind of let it pull back and buy the higher low on the 65 minutes.

I don’t think to kind of buy you know, when things are calm, you know, I don’t want to be chasing a gap.

But I want to be working for you to calm pullback where I can buy some goes up. I said…

“Okay, maybe I’m onto something there”

Then, you know, I can, I can buy a little more on maybe the next pullback.

Um, and then when the strike lets me know, I, can go after it.

Um, but that’s yeah, I like to use the 65-minute to manage my risk.

By when I buy, I can keep a technical stop below those bars.

So I’m often putting my stocks based on the actual bars on the 65-minute.

I’m kind of using the moving averages as a guide for me. Like…

“Hey, this 65-minute bullfrog may look good, but it’s like 3% above the five days”

So even if it looks good for an hour or two, you’re probably gonna get shaken out because it’s just too extended.

So I try not to buy too extended from the moving averages.

Rayner (2:11:10)

Right.

Also, I think we talked a little bit about exits earlier, but let’s say you enter, and you set your stop.

So what about exits maybe, you know, where do you usually start to unload maybe a portion of your positions?

Oliver (2:11:20)

Yeah.

So, like in the video, I will trade pretty big.

Then what I’ll do is if it gets moving for like a week or two and it gets a little stretched just because of the…

You know, I put a lot more on that than any other name.

I’ll feel like a thin-off just because like I made a pretty good profit on it.

Then I’ve still got a big position.

Like still, it’s usually my biggest position even when I take that third off.

Then I’ll kind of let the remaining part trade and so actually this rally in the video, I took like a third off at 700 or so.

That, it wouldn’t have been 700.

About six, six twenties, six twenties is where I sold that third.

So it was about five, six, seven, eight, nine, ten.

It was about, you know, 11 days, 12 days into its trend.

I took about a third off and that is what I ended up doing it consolidated for five or six days and it built a mini base and I started a second position.

Rayner (2:12:28)

Nice. [Laughs]

Oliver (2:12:29)

And so I had two times my first position.

Then the second position is what I did with the second position in that broad world.

I took the time of the second position off because I mean the second position is starting later so I wanted to take more than a third, you know and then I had like two-thirds of my first position and half of my second position.

Then, you know, I started to realize that the momentum was running out.

The last two to three, two days I started reducing that kind of piece because I was hoping it would just kind of keep going.

But then I realized — Okay, they’ve gapped it up twice and they’ve sold the gap open.

They might be done buying it until after earnings.

Then I started to reduce my position and now mentally for me, like I said…even though I have some, it’s kind of like over for me and now we’re like — All right.

How can we gain a plan for after-earnings?

The piece that I have left, I will be a little bit more, kind of like that crowded position where I’m gonna use the 20-day more on it and I’m gonna give it a chance to ride that 20-day.

I’ll give it a chance to pull back 10% or whatever, just because I’ve taken my money out of it and…

You know, these things can go further than you think.

Rayner (2:14:02)

So you mentioned that you think you exited the first position around 620.

So were there any patterns or clues that made you want to exit a portion at around 620?

Oliver (2:14:13)

I mean, part of it was just like, you know, I want to sell that third, you know, I want to make a pretty good profit on it.

That’s sort of like it.

You know, you have that little tale on January 24th, which

That to me is not at all like…

“Hey, this thing’s going to reverse”

It’s just like, hey, on this first there, you know, this is probably a pretty good spot.

You know, it’s.

You know, it’s not as much of like a huge signal as it is.

Like, you know, I want to make sure that I, that I booked some at a solid price.

Um, and then I’ve got plenty left to, you know, ride and, you know, I tried to be a little bigger where it’s like something like.

Like even crowd I take bigger positions but not in the video but it’s something like snow or something where I treat it more as like a just normal size position.

Like I’m not doing anything there.

I’m just kind of letting that chop around and I’m writing it up the 10-day or the 20-day and you know a lot of people ask me these questions so I’ll just kind of ask it for you.

I never used the 10-day or the 20-day and the answer is that a good book that I recommend.

This book, you know…

“Trade Like an O’Neil Disciple”

I like this book.

When I talked about it, like, get like…

I can’t remember the exact timeframe, but the story is what I think was on the stack.

It’s like, you know, maybe four to six weeks into this move and the way that I judged that was if it’s kind of had two pullbacks.

You know, did it pull back and find support on the 10-day?

Or do a pullback and find support on the 20-day, like, what is the character of the name?

You know, some names move quicker and they hold the 10 days.

Some names move slower and they hold the 20 days and then the other thing I’ll do too, is for example, the crowd is a great example of this.

For the majority of crowds move, it was like at the beginning, it was holding the 10 days and then it moved enough where it kind of built like if you’re looking at support and resistance, it kind of built.

Like a big support shelf and I’ll do stuff like, you know — Hey if the 20-day can catch up to that support shelf, I’m gonna switch to the 20-day moving average because I wanna try to give this thing a chance to hold that support shelf.

For example, like right now, in the crowd specifically, you know, the crowd kind of like got going again at the start of January, it pulled back and held the 10-day on January 17th.

Then held the 10-day again on January 26th, then held the 10-day again on January 31st, February 2nd, February 5th, February 6th. And then really, you know, this is sort of unique in that on 2-13, it had a big gap down that held the 20-day, but it closed above the 10-day.

So some people now might say, you know, are you moving the 10-day?

That’s what it’s been respecting.

For me, that 310 level has become a big support shelf because that was the high on January 24th and then we based under there on January 25th, February 5th, and February 6th, and then we found support there on this gap down on 213.

So now that the 20-day is up to that level, even though it’s 20 points lower, which is like, you know, in this name, it’s a, you know, that’s like a 6% pullback or whatever.

Like I want to try to use the 20-day now because I know that’s a huge level and so I want to give this thing a chance to hold that.

You know my goal is to try to stay with my names if I think they’re good names, not necessarily to sell them.

Then let’s just say, let’s just be hypothetical here.

Let’s say that…We’re going to tighten here today and then push higher and start to hold the 10-day again and we kind of get away from that support shelf, then I might move back to the 10-day.

There is a little bit of an art to it, I guess, and I also say there’s an art to it and I’m not always right.

I try to pay attention to the moving average of notes and then I try to pay attention to when the 20 days get above or catch up to a big support level.

Then give the name room to the 20-Day, just so that I can try to stick with it.

Rayner (2:19:15)

Okay, I get what you’re trying to say because it sometimes depends on how the market is behaving at the moving average, right?

Sometimes multiple confluences make you think…Hey, now the 20 days is kind of more appropriate than the 10 days.

So let’s go with that.

It’s all about being versatile and adapting to the current market conditions.

Oliver (2:19:32)

For sure.

Rayner (2:19:33)

So, okay, you know, I have a ton of questions more to ask you, but you know, I believe you are tired.

So kind of like, let’s move into the closing section, and then guess what?

We can always do a future episode, right?

In the future, yeah?

Okay, so question, what are some of the biggest lessons that you’ve learned that are rarely spoken about?

It doesn’t have to be trading.

It can be live, just anything.

Oliver (2:19:57)

 Yeah, OK. Oh, man.

Well, I think in trading, I think one of the most important things to do in trading is figure out how to not trade.

To figure out when the market’s not good for what you’re doing and not trade.

Then also, figure out when the market is good for what you’re doing and let your positions work.

You know, I think especially in the era of social media and I think everybody wants to trade zero DTE options and make like a million percent in a month and retire or whatever.

I think there’s this pressure to make things happen quickly when in reality, I think that’s the exact opposite of what works.

I’m not saying that stuff doesn’t work, but I think focusing on learning when the market’s not good for you and not trading and then learning how to stick with your positions when they are working is…

Something that I think is overlooked a lot and kind of some of what you see out there. So like learning how to not trade in different ways is important.

Then I think just like in life, I mean, definitely in trading, in trading, you have to learn how to bounce back and deal with setbacks.

Like every single step of the way for me in life and in trading there’s been setbacks.

So you have to learn how to bounce back and then you have to learn how to kind of learn from your mistakes because it’s inevitable.

You can’t avoid that.

So you have to learn how to take advantage of it.

Rayner (2:22:09)

Now that you have children yourself, I mean, they are still very young.

But what would you say are some of the key lessons, and values that you wish that they’re able to take from you?

Oliver (2:22:23)

Yeah, so I mean.

You know, I just try to be honest and then try to do the right thing.

I mean, you’re not always going to do the right thing, but I think if you’re doing the right thing consistently over time, you’re going to come out ahead.

Then I would say, Tom, like one of the things that I’ve kind of been able to learn and understand because, like, you know, we were so wealthy when I was younger and then we didn’t have any money.

Then I’ve done pretty well, but I own some real estate and stuff in some lower-income areas.

I’ve seen a lot of different demographics is that money really, I generally don’t think 100% makes you happy.

I’m not going to sit there like one of these people who say it doesn’t make it easier because I think it does. But…

If you’re not happy without money, I don’t think you’re going to be happy with money.

So I think you have to learn to value the things that matter in your life.

I think two of the influences on me when I grew up were probably these more blue-collar families where the dads kind of…

One of them is sick right now.

So I might get a little emotional, but they’re really like their family was like everything to them and they got so much joy out of all of it and they were not these millionaire guys on TV, but like every day they were stoked to get up.

They couldn’t wait to kind of see what their kids were going to do.

They were at every game.

They were doing everything. And so, you know, gentlemen, look.

I think specifically in trading, and a guy who’s been a mentor to me who I trade with now, who’s much older and he came up trading on the NYC, he was telling me how he knows guys who like their number 20 years ago was like…

“Oh, if I make 5 million or whatever, that’s all I need”

They’ve been chasing the number for 20 years now and their kids have grown up without them being there.

You know what I mean?

Like mentally, even if they were there physically.

So, you know, just like don’t kind of miss the important things, you know, just for material things.

Even when I’m trading, you know, that is kind of the scoreboard, you know, you can’t get consumed by it.

Rayner (2:25:07)

That hits me hard too, man, because I have kids myself, right?

Often I…

Like you said, you’re there but you’re not there.

You’re there physically but mentally you might not be there.

So definitely a very good reminder for me as well.

So thank you for that, Oliver.

Anything else you want to cover man that we didn’t touch on today, anything?

Oliver (2:25:26)

No, I mean, this was great.

I enjoyed this interview.

So thanks for having me and I’d be happy to come back anytime.

Rayner (2:25:37)

Yeah, we’d love to have you back as well. I had plenty of questions like when you mentioned your debt, it blew up.

I want to hear some of the lessons.

I’d like to hear about changes in market conditions, and how you’re a debt.

But all this, maybe we can do it another time.

But for now, where can others find and connect with you?

Oliver (2:25:51)

Yeah, so I’m on Twitter.

My name now is Oliver Kell, underscore.

Then I write a newsletter called The Swing Report.

www.theswingreport.com

I do my best to just kind of highlight my thoughts on the market.

Sometimes it’s probably a little more chaotic than other people’s newsletters because I keep it pretty raw.

But that’s where you can find me if you have any interesting kind of understanding of how I trade and that’s it.

Rayner (2:26:30)

Awesome.

I’ll put all those links and resources in the description below for the audience.

For now, Oliver, I know it’s late for you, so thank you so much once again for your time.

I appreciate you.

I enjoyed this session a lot.

I learned so much from how is it like trading on the floor, the pit, what you look for in the stocks, relative strengths, building up a base, buying at the first breakout, and waiting for a pullback to get a secondary entry.

It’s an amazing session.

So thank you once again,

Oliver. I appreciate you.

Oliver (2:26:57)

Thank you, Rayner. I appreciate it.

Rayner (2:27:00)

Thank you.

Thank you and bye-bye and rest well.

Oliver (2:27:08)

All right, see you.