Wall Street Trader: I Will EXPOSE Exactly How The Market Algorithm Works

algorithm they're written by a programmer and they have to be written to go somewhere okay where are they written to go these technical areas that we're putting out those algorithms are going to that as sure as we're having this conversation there's no doubt they want to shake out the Longs and they want to get people short and what do the smart people do that are on the bottom of these algorithms that are scooping this stuff up they're feeding into these people that's what algorithms do I'm able to take advantage of what they given me printing

the money man that's what we do and we do it every day hundreds of times in terms of market makers and hunting stops there's a big thing in the retail space of like price hitting your stop loss then going completely the other way and people feeling very targeted I've heard you say that that is a case that is something that does take place yes you're 100% right I started focusing on the algorithms a very long time ago wasn't my world I was an agent algorithms are there to create volatility and liquidity they want to travel

one of the trades that lose money 85 90% of the time is when you sell a failed breakdown those algorithms know that you just know it and I know that those algorithms are going to make that print and they're programmed in to go to those strike Paces a lot of retail Traders they all make the same mistake the important thing is for retail Traders [Music] is the number one podcast in the trading space the fastest growing and that's thanks to every single one of [Music] you welcome back everyone to the words of rydom podcast we

are back once again and still the number one podcast in the trading space and the fastest growing thanks to all of you and our incredible guests talking of which we have a true veteran with us today you first set foot on the New York Stock Exchange in 1965 so in one years time that will make 60 years absolutely incredible the amount of knowledge that is going to be shared here with us today at one point he was responsible for 90% of the volume traded in IBM which was almost 20% at one point of the S&P

and I am proud and honored to announce that we have Richie nesso with us today hi thank you so much for that I appreciate it I'm trying I'm trying to work on my intros but Richie is absolute honor like I said andk what we like to just start off with is sort of how you got into trading like what what were the mindset going into trading especially at that time you know the New York Stock Exchange as well what was your mindset why trading in the first place yeah it it's pretty amazing uh you you

know first of all I thank the good Lord because I I I I couldn't have carved out a better situation for myself without really knowing what I was doing um you know I started out in a typical uh my family is a typical Italian family growing up in Queens New York but I grew up in a very tough neighborhood and although I was a very big Sports fale atic and everything I did at sometimes in high levels uh like getting a scholarship to high school for basketball um and and so you know I formed many

baseball teams and many softball teams and traveled around a tri-state area playing for money okay my family had bingo games going on at the end of Sunday dinners at my grandmother's house you always the kids always wanted to use their real money to play bingo with the older people okay I grew up in again in a queen's neighborhood a very tough Queen's neighborhood and uh pitched quarters against the wall pitch uh uh uh traded picture cards and flipped picture cards for money um uh played poker for money played played anything for money played anything I

once sat in my basement at 15 years old and I'm prefacing this on a reason on purpose I I once sat in my basement and had four decks of cards fa upside down backwards so I couldn't see what I was doing I placed a baseball hat against the wall okay against the wall and I stood there for hours days and hours and hours at a time flipping those cards against the wall and counting up what suit what suit just fell into the Hat didn't know what I was flipping at the end of the day no

matter what I did the club suit always came out on top gave me an edge if I'm playing poker if I'm playing kond poker and I played with bookmakers and I played with the best Wise Guys I play with everybody but always clubs came out so if there were three clubs on the board and kond poker POA poker and there was one one card in the deck that had to be pulled out and I had three four clubs three clubs and one on the board and I needed a club I know what I was doing

if I needed a diamond I probably would have fold it so that's the level and and you know I had no real idea of of what my future would be and so it's it was a unbelievable you know the experience of winning and losing you cannot replicate H you know I tell people on my sessions to this day well I'm going to go on a simp account I'm going to go on a simp account I said do yourself a favor you're not going to learn anything on a simp account the reason you're not because you're

not risking anything you got to feel the emotion of risking you got to feel what it is to lose you can't everything is not fun in games so anyway it it just made it was a tremendous preparation for me to walk in there uh you know graduating high school they they all started in with the with the yearbooks and they all wrote These salutations of what they're going to be in life how they knew that at 17 I don't know but they all knew it they all knew it I had one line I put one

one one one word and that was business did I know what business was it was where it was what kind of business it was no I didn't I just wrote business I mean I sold encyclopedias door too I mean I was a uh a a manager trainee for John's Bargain Store people in this part of the country will know what that was um you know Soup To Nuts across the cour you know delivering newspapers at 5:30 in the morning you know stuffing groceries at the supermarket for a quarter a day whatever the hell it was

you know stuff like that but it all I'm saying this for a reason nothing is an accident folks really nothing it's all pre predetermined nothing is an accident and so when the trading come into your sort of path yeah so I never traded a stock in my life if it didn't have the money um I I saw an ad in New York Times that said uh you know Wall Street Runner or whatever they called it uh da da da da da I said oh New York Stock Exchange that's impressive to me uh yeah I'm going

to go and apply for this job so I put on my Easter suit the only suit I owned it only came out once or twice a year and and walked into the stock exchange filled out an application got hired I want to say one other thing and I want to say one other thing because it's important the way things are supposed to work out my first job interview was for an assistant accountant at a bookkeeping firm okay and I didn't get the job but the woman I didn't get the job because I tested worse than

the kid who was looking for the same job and but the uh HR person or whatever they were called in that day uh came up to me and said I'm sorry but I have to hire the other he got hire on a test but she said I know I'm making a mistake and that was the end of that then I went to Wall Street then I got this clerk a job as a runner on the Florida New York Stock Exchange that simple but I remember one thing and one thing that know I found the home

when they suited me up you had a special jacket blah blah blah and then you walked into that trading room they escorted you into that room it was like it it it was like you got hit with a boulder I mean the energy that came out of that room that I felt went through my bones from the toes the top of my head down to my top of my bottom of my toes man it was stupid it was like oh my God I had no idea no idea and that was it I was hooked after

that I just did what I did I did my I did my studying I did my due diligence I passed whatever I had to pass I was not a great student in school I didn't care I didn't think they were teaching me anything quite frankly and you know I I rast through the ranks of New York Soccer change as as a runner and then as a reporter somebody who recorded all the sales that took place and after nine months uh they offered me a job as a clerk as a clerk what is a clerk a

clerk is a trainee but they work for a firm and that was a big step because that put you on a level where you could start to advance if you were good enough to advance nobody gave you anything um and I had a hard time I can tell you honestly I had a a really hard time cuz I couldn't understand what a quote was I didn't understand what a bid and offer was I really didn't I mean I was a workaholic but I did not I couldn't it was couldn't get it through okay so my

boss at the time sent me up to the over the counter desk over the counter over the counter was rock and roll there was no NASDAQ this was a a thousand people making markets in every stock on a planet that wasn't listed on a New York Stock Exchange and it was this was this was Dodge City check your pockets I'll tell you that it was Dodge City but when you were making markets it was the best education I ever got because after that it it just all came together down to the trading floor again d

da d da da and just kept moving up on a trading floor you know where I was got the confidence of many many different companies that called me uh you know to represent them to be their cloak and to stuff like that one thing you really you said there which really stood out to me was nothing was ever handed to anyone on the floor uh can you just speak on that a bit more yeah I mean look I was never handed anything and but the good news is that I didn't want to be handed anything

you know I have a sibling that was handed everything but I never wanted to be handed handed everything I always wanted to earn it and so it fit my personality real well because when you're competing against other people the best comes out and if you and if you know the job that you could do and if you know what you're capable of doing and you have confidence in what you're doing you are going to beat these other people and you know I mean that's the way it is that's capitalism that's that's it you want to

get it job you want to do better than somebody else you you just do the best you can and you automatically better than somebody else as long as you don't cheat along the way as long as you put in the time that's where the confidence comes from putting in the time you need to be a student of the game how important is that mindset going into something like the floor where were there even at that time people who would be entitled and think they deserved something think they you have done enough time and therefore they

should get something oh sure I love though I love to compete against those people because that was easy stuff it was just easy and especially on a floor this New York Stock Exchange floor has a very high tradition in Heritage okay the specialist system had lines of Heritage uh grandfathers uh grandfathers to Sons to sons all right and many of the specialist firms had Heritage like that running through them so conversely speaking to answer your question a lot of the offsprings of these uh senior people if you will you know they thought that this was

easy life for them they were you know they were like uh you know they already had money they knew they were getting money and and so you know it's good to compete against those people that's all I could say when you come when you're a kid that comes from a rough neighborhood and and you're able to work your way up through it uh and and you find yourself in an arena uh you know where people think they deserve something you stand out going back to what you said about your your sort of upbringing into the

trading Journey you mentioned about essentially everything was winning and losing everything was trying to play those odds how important was that when you're coming into the New York Stock Exchange was it simply just some like almost familiar to you was it something that you just thought this is just a larger game of what I've played before um you know intellectually uh at that point no no but somehow how some way my system knew it I did not I did not recognize it at first I really did not it it was I don't know a couple

years two three years where I started realizing forget it and I started moving up quicker than a lot of people were moving up and then then I figured out and the answer to your question is at at one point but not from the beginning not from the beginning I knew I belong there because of the energy and I knew that's what drives me and that's what's always driven me no matter what I did so from that perspective the energy was just oh my God this is where this is my home this is where I belong

and I remember I said wow when I got my first job I I and I was making I was making $60 a week that was the pay in 1960 W 65 $60 a week I cleared $482 and that's what I remember and I remember also I wanted I said said to myself wow if I can make my goal was to make $40,000 a year that was my goal and now I dead serious that was my goal to make $40,000 a year which was a lot of money at that time yeah so in terms of as

you said in terms of the energy I'm sure there would have been people who would have gone there and rather than energy they would have said chaos would have said something maybe more of a negative feeling because they couldn't handle it you're right right and you know what was it about you that felt that energy instead what was it about the energy on the floor that really resonated with you and wanted you to be the gambling instincts the gambling instincts I there were two times I had that feeling in my life once uh I was

in a Marine Corps and stationed in 29 Palms California uh which is only two or three hours away from Las Vegas I'd never been to Las Vegas I never been anywhere and and the same feeling is when I walked into a a a Las Vegas casino MH but that was second to the New York Stock Exchange the the the gambling Mecca of Las Vegas is second to the gambling that goes on every day into what what you know what I did nothing comes close to that nothing what would you say is the separation then between

the the gambling and the trading I'm sure there were Traders on the floor who were so emotional that you call it gambling but then what would separate those from the traders to the gamblers profitable Trading really boils down to two things opportunity and volatility and that is why the podcast is partnered with Market Journal because between the years 2016 and 2020 the amount of opportunity that was available as well as volatility to take advantage of was at the highest has ever been and all of that really pointed towards one man president Donald Trump during his

period in office all it took was one tweet and that would present so much volatility and the right Traders would take advantage of that and would create their record pnls and that is why those same Traders are so excited for this new period between 2025 to 2029 when we have President Donald Trump back in office now Market Journal is going to give you the weekly insights you need across crypto Forex Futures and the stock market so regardless of what happens whether it's a tweet a particular stock running up hundreds of percent whatever volatility and opportunity

that market Journal can identify it is going to share with you every single week so you can purely focus on taking it advantage of those opportunities and taking advantage of that volatility to create your record p&l now Market Journal is absolutely free all you do is click the link in the description below put in your email and you will receive key updates on the markets every single week so you are always up to date with what's going on and ready to execute when the time is right links in the description below thank you for enjoying

this episode let's take a break for a minute there guys cuz I want to let you know about one of our sponsors Alpha Futures is offer ing the best one-step evaluations in the industry and in the month of December they have no activation fees they have the largest endof Day based draw Downs in the entire industry with up to 90% profit split and lightning fast payout speeds and offering Advanced and standard accounts to fit your needs Alpha Futures is truly offering the most elite plans for the lowest total cost to entry in the industry you

can start as low as $79 and thanks to the podcast using Code Riz RZ you can get 20% off any of those challenges go to the link in the description below and let's get back to the episode uh gamblers take risks I say it to my in my sessions all the time folks we're not here to gamble okay we're not here to gamble if you're in the Las Vegas casino they don't want you in there if you if you bet 58 if you win 58.9% at a time okay they don't want you in there all

right I want I take pride and figuring out uh the nuances that lead to a trading decision and there are a lot of them and they change rapidly they don't stay the same you can go in and gamble in a Las Vegas casino and you know you know what the odds are you know what you're doing you know you have a disadvantage every every bed except one in a whole Casino where the house does not have an advantage but I say it all the time I say look we I'm not here to gamble I said'

don't laugh because I'm dead serious I'm not here to gamble I am here to have a a make a bet and I'm here to be on the right side of the percentages of that bet I said that's what I do folks that's what you're paying me for that's why you're in these sessions and that's what I do so what's the difference I'm not a gambler I'm not a gambler I'm a technical technical uh player that slices and dices slices and dices everything that goes on on a on on a daily basis on a second Toc

basis slices and and dices that come up with an advantage at least what I feel is an advantage uh and then make the play in terms of that though like the differences between when you started your career and and you're starting your career as a Trader in the pits and and within that energy in the room and the other traders in the room you're able to read the order flow in the room because it's happening there and then in the room versus today where you're trading from screens remotely uh if you want to read the

order flow you're using like level two arts for example you're not really getting that emotion direct emotion but as someone with your experience potentially you're getting that from the actual candlesticks and the the way that the moves are printing within the technicals versus what it used to be in the pits is is there similarities that bridge the two well yeah there is there is again the specialist system was prominent they dictated the flow they had the buy and sell orders that were above and below the market on what's called a specialist book and you know

depending on the level of player you were or I.E the the size of the order flow you used to have when you went into a specific trading crowd you know you want to know where the supply and demand is now that wasn't public knowledge but if you were a sizable player and had sizable order flow and you went into a trading stock they know you meant business and so they would uh help you uh uh and and and speak to you about where they order flow was where was the supply where was the demand okay

if you had a large buy order you wanted to know where the supply was and vice versa so in its day and age you know there are different ways to navigate that and one of them is there's a super doome that we have and display every day on our sessions and it's a super doome and you know a lot of the firms offer these domes but these domes are not this is this is a super doome and it shows it shows the size of the order imbalances every depends what bar you're in but if you're

on a NASDAQ bar it's 3,000 ticks I have set up and 3,000 tick will show and a in a 3,000 tick bar it will show you the order imbalances with the size with the sizes so you see and you see the NASDAQ size coming in in blue imbalance orders in size you know and and it gives you a little bit of an edge why if I if I see the market shooting I I mean I left early today but if you see the market shooting up it's at a high and an intraday cycle high high

high okay and you see the super doome light up with blue and balance orders I'm watching that very closely because I know these buy orders these buyers here they're Ling at the top so number one I know that it's going to be a difficult road to really break out if you want to get short I know that and I do know also that I'm going to be I'm going to be covering my short when these people start to puke if they're wrong MH and so that's an edge and that's we have a Super Dome it's

expensive uh it's propri it's not proprietary to us but you know we own it uh and it's it's I don't know anybody else that has this super doome I really don't so that that's relative to the specialist book and not everybody that in my era or erors well before me and after me for that matter you know there precious book was the Bible because you don't want to look like an idiot by buying into a large seller that's just slightly above the market and vice versa on the downside you don't want to sell into a

huge buyer you know so so edges like that it comes from the experience level and so I think very interesting what you said there in terms of that like depending on you and the size that you're sort of fulfilling and essentially your track record if you will like there's a lot of talk about track record nowadays about Traders you know trying to acquire them whether it's to get Capital to prove themselves as Traders but the same happened back in the pit like if you didn't have the performance behind you to be able to handle that

size no one was going to give you that size 100% so for you to be able to get the size that you got you showed the skill set the track record to be able to handle it and then continue to perform to this day 100% I mean that's just the fact of the matter you know I speak to my I speak to my subscribers all the time uh about the volum weight average and you know the 80% of the order flow that comes down today volum rated average is a huge Factor why because uh the

size of the positions today uh with the amount of money under management you can't have a million share position if you're managing 10 billion do or 20 billion your positions are 20 million shares 30 million shares okay and 80% 80% give or take it's probably more uh 80% portfolio manager says all right I own XYZ uh it's up substantially and they own 20 million shares I want to take off uh you know 5% of of that okay so sell an order take an order uh to sell a half a million shares two million shares a

million shares uh and they give it to the trader on a desk and they sell to the trader just you know go along beat the volume weighted average 80% of the order on these deep pocketed investors and funds I have orders that are that are following an algorithm that allows them to stay close to the volume weighted average why that the trader doesn't want to be embarrassed the portfolio manager doesn't really care he's banking money so he doesn't want he doesn't want anybody playing the market on his dime he'd rather just know that he's about

around the mid price of the stock for the that it trades for the day m but it's a very important factor when you're doing what I do because where the volume weighted average is you know if a new bar comes up on a super super doome for instance and the bar is above the volume weighted average those those orders that are in there following an algorithms on the volume weighted average are buyers and when it's below the bar they're sellers and and that's how they keep up it's a balancing act so um so the up

is really really important my clients like what you just said which prompted me to speak about this is my clients I mean you know I represented Vanguard and I represented their index funds so every time a stock went from one S&P 400 to 500 they you know they restricted and they balance they had to balance the mathematics out to to reflect what their index was m and so so my customers to your point they didn't give me the order I could put on an algorithm too no they they they wanted me to trade the order

and use my expertise so to your point that's exactly what took place and you want to know what I I destroyed the volume weighted average I destroyed it almost every time never really got hurt played in the market without any algorithms without any machines without anything I mean I I can't tell you the amount of money I made for that index fund a lot of a lot of those people owe me a lot of money they really do their subscribers owe me a lot of money uh uh I I would tell you that what was

it like though going from obviously being a runner to being a clerk to then obviously starting to manage these positions yourself on behalf of your clients as well but as the size was incrementally getting larger did you face any sort of psychological issues any barriers at all or interesting question the answer is no never phased me one bit it was all the same to me whether is a thousand shares or a million shares yeah I put up so many million share blocks in IBM you know they counted on me to price it and and to

trade out of it so the size never intimidated me at all it's all relative uh I I I you know I just ambivent to it it don't mean anything it's just numbers and so I just increase the numbers and no the answer is no to your to your question I it never affects me at all I never was intimidated by it and it never affected me where do you think that came from my upbringing in a very tough neighborhood in in a lot of different ways drugs Wise Guys a lot of stuff it was a

good nice middle middle class neighborhood in Queens but there was a lot of stuff going on a lot of stuff and so where did it come from I you know just my personality I guess uh I can't tell you where it came from well what do you think when you see people going through psychological problems when it comes to trading you know even if they're handling much less a size than what you were for example yeah like what what do you say to people when you see them or or speak to them in that regard

yeah uh I I say to them that number one they have to know their personality if you have to you need to know your personality I said and I say all the time don't laugh don't laugh when I say that you have to know your personality because your personality dictates the level of Tolerance uh and level of controlling your emotions and and so it's extremely important to be able to to uh manage your emotions in this game and the way you do that best is to understand your personality everybody's personality is different everybody can risk

a certain amount uh without being not effective any longer it's extremely important to know your personality it really is and you have to stay focused all right you have to stay focused what do I do I give them an example all the time uh a horse races on a a racetrack and and a horse does uh you know it's getting beat getting beat again getting beat again uh horse you know on a on on a warm-up track uh sets huge numbers and does great gets in the race horse can't do anything and and the trainer

finally figures out that uh wait a minute the horse is getting distracted by looking perferably so what do they do they put what they call blinders on them and so the blinders make the horse look straight ahead and that's an example I give my my my people all the time stay focused man cuz that is an interesting point A lot of people are so focused on the wrong things rather than what actually will make them into a better Trader correct like obviously trading in the pits is far different than say trading on your own especially

as a retail Trader um and as part of that a lot of Traders will need like trading plans right they'll need their systems that they follow um in order to create their Edge in the market what have you what can you speak to on in terms of like trading plans maybe outside of the trading floor era I guess yeah um well I had to go through that I really had to go through that because I had no experience trading uh you know in front of screens until after I left and so what could I speak

to that um you know people have to understand that what's good for one Trader is not good for another Trader what one Trader looks like looks at another Trader looks at something different so you have to understand that that this this game is wide in scope it is wide in scope and so you know manage manage manage your trades protect your money protect your protect your uh uh investment with stop orders but know what your limitations are with that just know what your limitations I don't think I answered your question no you did in terms

of uh your trading plan as you said it every Trader is different so it's not going to be fixed of course I think the benefit of trading is that there are so many options of how to do it successfully equally I feel like a lot of people think of that and then they start trying everything and therefore they find themselves very scattered as a Trader versus as you said earlier focus on on and know your personality so if you combine those two yeah that's where you can start to probably really build that trading plan out

no it's true it's true and and you know Simplicity is best and and I I I refer to this a lot and and and you know and I say keep it simple you don't need all these things you don't need all the all the don't get carried away when you start flipping around from one way to trade to another way to trade one chart another chart one you know One technical area another technical area uh you know one Cel a channel I said whoa you know it's too much you're confusing yourself and and you know

I can delineate that but you can't you can't and that's going to [ __ ] your growth by exposing yourself to too much it's okay to get to an area you know I still I had only two monitors but I I got to an area you get to the area but you need to conquer Simplicity first or you're going to [ __ ] your growth like I just said and and you're going to it's it's going to it's going to store your journey this is a journey well that's where a lot of people find themselves

I think is that they find themselves in this boom and bus cycle where they're just con they're not losing they're not winning they're just going on along sideways for a long chunk of their time and right A lot of the time they're not really trying to learn or to be fair on the flip side they're learning too much and trying to over complicate things correct because they think that's a quicker way to get to where they want to be and they're wrong what would you say in terms of people trying to manage larger Capital what

is it that you've noticed you know because obviously you were handling large size but I'm sure there were other players around you who you also recognized were handling large size too what were the common traits among those people oh that's an interesting question the uh common traits were keeping you cool keeping you focused uh not getting flustered holding controlling your emotions uh do your best not to get swept away uh in an emotional situation when there were many many many many and those people were able to keep their cool keep their focus all right um

you know baseball player Andy pennet New York Yankees it always stuck me even when I was a kid watching this his hat was bent downwards and bent in a way where he can only look forward there the same example it's a simple example but that's the kind of focus that you need and so the people that were confident people knew were not intimidated by the sides of the order flow were straightforward honest people who stated their case all right listen man I'm going to buy a million shares of stock here okay tell me where the

supply is tell me now I'm putting up a block of a million a million 18 IBM right now don't anybody leave the crowd stay here tell me what your interest is now all right customer a customer B customer B this guy represent that but the people who were straightforward and and stated their case at the time you put the block together and you slapped it on a tape all right and and those are the people that impressed me growing up and those are the people that I learned from as well growing up people like that

does there ever any sense of like missing those times because obviously that energy must have been so contagious so almost addictive to some degree no doubt and to not be in that environment anymore even after even if it's been some time do you ever miss those days and that that sort of that flow let's take a break for a minute there guys cuz I want to tell you about one of our sponsors Alpha Capital now without our sponsors it's not possible for us to host such incredible podcasts around the world and get the level of

guests that we are getting so again thanks to Alpha capital for sponsoring the podcast now Alpha capital is one of the best prop firms in the industry so far this year alone they have done over $50 million in payouts which is Absolut absolutely incredible they have the very best infrastructure in place for longevity from an in-house broker so they can offer the very best trading conditions and platforms that all Traders love to use they're still able to offer services to the us as well so the US Traders can still trade with them on particular platforms

they have institutional experience so they know how to manage a Prof correctly and have such an incredible team on hand on top of which they have both a pro and swing plan so depending on your style and strategy you can choose which one is best for you now you can use and get the highest discount available at anywhere using Riz 25 so that's r i z25 for 25% off all challenges the links in the description below so let's get back to the episode you know I mean it it was the greatest education one could ever

get you know I I consider myself blessed and very lucky that I that I found my way there I had no idea trust me none whatsoever but looking back at it now you know been there fine another aspect of my life I didn't expect to start lpq trades I did not expect it I was trading my own money like I said earlier I did not expect to start a trading room I did not expect to probably start a hedge fund by the end of the year I did not expect any of it I'm not the

to retire in type I'm just not so I'm occupied as the answer to your question do I miss that no do I treasure it oh my god do I ever treasure it again I will tell you you can you can bundle together all the great colleges of the world and you could not get the education of growing up in those times that I grew up you could not experiences King as they say because even just when I look at you know footage nowadays it's really just footage or stock phot of of those times and you

see it and a lot of the time maybe slightly dramatized with some some music or whatever it may be but you still see it and you think W that must have been like chaos that must have been crazy to trade in then when you speak to the Traders like yourselves you learn a whole another level of of perception that's actually going on in those moments it is chaos but it's very organized chaos 100% it's very as you say educational for to be in those moments because you're learning and picking up on so much that today's

Traders they don't get that same sense right they're learning and it's not a negative thing necessarily but they're learning just from the charts normally by themselves in their in their office or at home whatever it may be but they very rarely know other Traders but in that environment the only way to really know a Trader is to then actually be in the room with the all the Traders bingo I mean you just hit it on a head that's exactly right and again and a reason why I started this room uh is because I replicated a

Wall Street trading room you know when I sold my broker could dealers I went to a a hedge fund friend that were there were customers of mine pretty big name by the way and they said you know come on in you know blah blah blah I went in and and they offer me and they say Richie we don't understand you don't need to give us 30 or 40% of your p&l because we're giving you extra money to trade but we know you don't need that I said that's correct why are you doing it the chairman

of the company why why do you want want to sit in this hedine because I want to be in a trading room environment so there you go and that is a freaking letter of the law all right I never went there but I started doing what I'm doing and now I I I I hate to keep repeating myself but I I re you know you you hit on ahead what I can bring to people with the experience level is unparalleled so I tell my people I said this room is a replication of a Wall Street

trading room there are three Master Traders here comparing ideas during the whole session so that's what we're given you and and that is Head and Shoulders above anything out there and nowadays you are trading Futures right trading Futures I could trade anything man doesn't matter I choose to trade Futures what is it about the Futures Market that got you s of focused on it the future markets are liquidity and volatility all right the liquidity is Paramount the volatility is Paramount the other thing is that the market the stock market is based on hope everything is

based on hope hope uh you know Apple's getting killed Apple doesn't have any growth where the growth coming from Apple China's shutting them out there China's right there you're not selling your phones here anymore whatever blah blah blah they come out with their earnings now everybody knows I know that their earnings were going to be bad okay they're not they were not going to be good so what a what a what do they do they give their investors Hope on a conference call what's the hope we're going to we authorize a buyback of 110 billion

dollar that's the hope hope Elon Musk earnings bad you know two three earnings ago Ernie's bad saker's 150 what did he do he gave him hope what was the hope his robotics game robotics stockers are 250 now I mean 290 I don't know where it's 290 or yesterday gave them hope so the future Market gives you hope it's also helps you stay focused on the stock market how does it stay focused I have one of my monitors has three one minute charts up the es the NQ and the ym and they all have Micro and

mini contracts so 10 to one usually all right 10 to one so these nothing nothing they're one minute charts overlaid by technical area is 9 EMA and the volume weighted average nothing can take place in a Marketplace without those stre without it being reflected in those three charts because it's a bet on Hope and it's a bet on the future and when you can get into a contract like that and and and turn 20 30 40 handles uh in in a NASDAQ uh by P picking off a Divergence from one to the other future markets

are the place to be I mean I I and and the other thing is the other thing is how much money you going to invest to make 50 cents on Microsoft at $350 a share how much do you have to invest you know lpq stands for limited exposure L limited exposure I I mean it I put on three trades yesterday that were I put on three trades this morning before I left one was one was $450 at 23 seconds one was $300 at 6 seconds because I'm able to take advantage of what they given me

and keep printing the money man that's what we do and you can the liquidity I'm sorry but the liquidity in the future Market allows you to do that you want to pay up a nickel for to buy Microsoft at 350 a share or any of these other wild names H how how long you going to stick around if you're a day trader you don't have the capital to do it you mentioned earlier in terms of the algorithms and you gave a a good description in terms of uh your your medium your low your High um

you're looking at the orders at these points as well and I've heard you previously you've had a very viral uh video that went around I remember on Twitter like millions of views yeah in regards to algorithms talking about discounted prices premium levels um and then you know the algorithms hunting these buy stops those stops like can you speak more in terms of the the intricacies and and sort of where the knowledge comes from again IBM was 19 78% of the of the S&P so that es contract my eyes were peeled on it it also was

it also touched off buy and sell programs okay buy and sell programs so I started focusing on the algorithms a very long time ago as my order flow was touching off buy and sell programs at will wasn't my will I I I was an agent I had to do with the order I had I listen I had complete discretion over my order flow at 90% of the time but that's what my customers paid me for as I mentioned earlier regarding um you know regarding clients all so the order flow uh just came and and the

focus on the es contract just came and therefore if that that being said the algorithms come into play algorithms fuel The High Frequency Traders algorithms and there's a video out there on this and this is really everybody should just go find that one because it really does describe algorithms are there to create volatility and liquidity they want volatility they want they want volatility to create liquidity how does that work markets coming down to a major technical area and we put out technical areas every day 6 o' in the morning technical areas to major technical areas

that one should be aware of technical areas are borders they're borders nothing is the end all of be all when it's when an algorithm a perfect example of an of algorithms what they do all right technical area here marks are getting killed boom boom boom boom looks like it's resting here not going to rest there the algorithms are going to come in here and touch that technical area which is usually a discount area and they're going to come and touch that off two reasons number one they want a trap one of the one of one

of the one of the trades that lose money 85 90% of the time is when you sell a failed breakdown sell a failed breakdown those algorithms know that and by the way what broke me through on the algorithms to make that video was discovering that listen ladies and gentlemen uh algorithms make may be mathematical equation generated by a pro by a a um by a uh code yeah but they're written by a programmer and they have to be written to go somewhere okay where are they written to go these technical areas that we're putting out

that's a good example of where they're going to go if the situation arises so what happens let's go back Market comes down Market come down Market comes down Market comes down stops here Market looks like it's firming up those algorithms are going to that as sure as we're having this conversation there's no doubt why do they want to do it again they want to shake out the Longs and they want to get people short because at that point it looks like the Market's going to fall out of bed what happens Market stops Market stops Market

starts going up the shorts have to cover and the longs so they knew they realize they've been had and they were right on the long side and what do they do they jump on a bandwagon too and what do the smart people do that are on the bottom of these algorithms that are scooping this stuff up they're feeding into these people that missed the market and have made bad sales that's what algorithms do and there's a way to look at these and there a way to track them and we do it every day hundreds of

times does if I'm not sure are you aware that in the retail space is a very large community of of traders who uh follow say a mentor if you will who describes himself as someone who has like coded the algorithm or coded a algorithm and therefore teaches Concepts that are supposed to help you decipher this algorithm and um you know they they get very fixated on essentially having Concepts that literally can allow them to sort of decipher the algorithm in the markets uh my answer to that or my question to that is do they trade

their own money based on their methodology that's my answer that's my question to them if they don't I don't trust it because what we do I I can I don't to say guarantee I don't like the word but um I know our methodology and there's nobody there's nobody better on picking it off because I help toine it and it's that simple all right everybody know where a bar chart comes down and one bar CHS right from the other and there's a little space between them it's course the algorithms are piling in are piling in that

area and and wherever direction that Bar's going it's going down lower M those are algorithms but it's the mentality it is really the mentality it's knowing where the premium area is it's knowing where the discount area is it's knowing where the gaps are algorithms will always come back and fill gaps that was one of my trades this morning all right I bought I bought the what did I buy I don't know what I bought the NASDAQ I I bought N I bought NQ this morning because at 9:26 or whatever it was the the uh there

was I think they call it a pre-market mini puke and I look for an opportunity there when it when when it does that but what I what I saw was I saw a gap here and you know Gap what what is a Gap a gap is Market comes up Market comes up all of a sudden it shoots up there's a gap algorithms love to come back to those gaps same scenarios same same instance I just gave that come down here down here now the Gap is here down here down here most of the time you

know 50% of that Gap is filled if not all of it m and you know that's it I took a long when it hit that Gap and you know I mean it was about an 8C trade and I don't care where it goes after that folks I really don't take what the market gives you don't turn your nose up at what the market gives you especially if you can turn over that kind of money in in six seconds so more so for you it's uh following the algorithm but just taking what the Alor you know

no matter even if it's a few seconds a few minutes wherever that play may be correct that's the edge would you say the the algorithm is designed for efficiency is that what it's designed for let's take a break for a minute there guys cuz I want to tell you about our sponsor trade Zella trade Zella is the number one trading tool for all Traders doesn't matter whether you're a crypto Trader a Futures Trader or a Forex Trader whatever Trader you are all you do is connect your trading platform directly with Trad Zella it automates and

makes your trading journaling so easy if you want to be a profitable Trader you need trading Edge and that is exactly what trade Zella does it allows you to identify Edge maintain your Edge and optimize your Edge by automating your trade journaling in-depth analytics back testing bar replay and so much more now W gets you 20% off your yearly subscription with trade seller so use W for 20% off your yearly subscription or RIS 10 for 10% off your monthly subscription the link is in the description below now let's get back to this episode the algorithms

are designed to to create volatility and liquidity they want the fractions moving and high frequency Traders live it is they live for that because they can get in the middle of Trades especially for the retailers especially when you're with a broker that says you're not paying any commissions uh you know free free brokerage ah check your pockets with that one because you know your order flow is being sold because well where would they make their Capital then yeah that's where where would the the Brokers if they were doing free commissions they wouldn't be making anything

unless as you say the order flow or the data or whatever it may be correct what would you say in terms of uh common pitfalls that you see amongst like retail traders of today yeah you know Li this as we discussed that a lot of the time they are just by themselves at most they have a community or some sort of Trad room that they're part of but at the end of there they still are by themselves for the majority of the time what pitfalls do you recognize Within These Traders they don't know how to

protect themselves you you need to know you need to know what you're willing to risk on a trade uh if you're if you're lucky enough to be green on a day you don't want to be in a position to give it back and so you want to set a limit to what you're willing to give up of that uh of those profits on a given day and and certain situations you know they ask me all the time they ask me you know where should put your stop on this particular trade and I say I don't

have any specific area it's the relative to where I am on a particular day and where I am relative to where the market is on that particular day for instance for instance if I'm gonna if I'm buying if I see strong strong strong and I see a Divergence with the NASDAQ Trail and the ym which is another trade I made this morning NASDAQ trailing the Y Trail in ym and I know the NASDAQ coming up and I know the NASDAQ is coming up and I know I'm long all right and I make my profit and

then I see the NASDAQ continue to go up and I also see the technical area a huge resistance area a major resistance area right here on a market that's up pretty good during the day all right if I want to short this here I know that if it goes higher from there it's going much higher but if I want to play in case it's the top of the market intraday intracycle whatever I know I can protect that down three or four handles because uh yeah I can protect that three or four handles down if I'm

wrong it means they're taking it right up and if if I'm right I'm covered so you know uh and I I put that the opposite way but if I'm short here and I want to protect it going to a level I'm want to protect it up four handles all right uh you know 100 bucks 200 bucks whatever it is but I know want protect it because I know that if it's going through this area here it's going through but I have a chance to hit a double and maybe even more than that because I know

that this technical area is Major resistance so like just accepting the fact that okay at this level the risk reward makes sense right because if the price does break through there and it hits my stop loss wherever I've set correct it's going to go anyway but if not the reward of this trade correct could be huge 100% that's the kind of situation so so so the question is relative about where the place should stops there is no one place to place a stop ladies and gentlemen the important thing is for retail Traders is to place

a stop whatever whatever your tolerance is relative to the size of your account that's the important thing place a stop always do not leave leave yourself naked do not you know you must protect your money and you must PE as in lpq prevent blowups what I just made up these names I made up the names P prevent blowups Master Trader any Master Trader and all your experience in the world in the life or whatever it is they will tell you prevent blowups prevent blowups you once you blow up you blow up your account you blow

yourself up you know we people pass Apex accounts and people don't know how to do it they roll the dice yeah I'm going all in I'm going all in yeah pay another whatever it is for pay another fee pay another fee pay another fee you don't do that you know you you build up small with those people and you build up small and you build up small and and stay under the radar until you're getting ready to get paid okay what are your thoughts in in terms of that like these uh prop firms or they're

not the traditional prop firms that were truly around but the new evaluation firms that have entered the Futures Market we're seeing a lot more enter the Futures market now as you said you know people who trade them yeah um now what are your thoughts on them being it's such a wild different um sort of product that has been around previously yeah but yet there is huge benefits to under capitalized Traders too so what are your thoughts on them yeah I mean you're referring to funded uh broker dealers that are fund account pay a fee and

you get a quar million or whatever it is yeah uh check your pockets that's my feeling if you really want to know check your pockets there's been a number of situations I trade three different accounts and there's a number of and I always keep that one around too because I'm trading anyway what's the difference if it cost me $40 to have a a third or fourth account you know I'm going to spend $40 I don't you know I'm Wheeling around hundreds hundreds of thousands of dollars I want to give myself the best chance so I've

been in a couple situations where I was about to hurt these people hurt them passed the test all right last week alone it was a $188,000 swing in an account where I had them all right I bet against an earnings report I was short than NASDAQ based on uh based on uh whatever Magnificent Seven stock reported I don't remember maybe meta or maybe Amazon I don't know I think it was meta as soon I I I was up the NASDAQ puked the NASDAQ puked I was short 10 NQ contracts 10 in in a funded in

a funding account 10 The Profit went to I don't know what5 $18,000 okay certainly way past the amount of money you need to pass an account and get paid what happened my system froze they would wouldn't allow me to take the trade off I said what what are you talking about and then what happened was the trade went the other way and blew up my account well I went crazy I just went crazy and they said oh well we're sorry we can't do anything I said oh yeah I said listen the SEC is going to

be very happy to hear about this I said in the timing of this this happened to two of my friends and the timing of this does not sit well with me so I would suggest and and and you know they reinstated my account but I I I I don't like those firms I don't I don't trust them that's the answer to your question in terms of uh the changes we see within the industry we see a lot of Traders stepping in especially since covid we've seen so many people become Traders what are your thoughts in

general around trading do you feel like anyone should give trading a try if they're interested or do you think that trading is really for those who have the personality traits and I would say passion for the actual markets rather than just making money yeah you know it comes down to who you're going to listen to who is going to be your Mentor I know what I bring to the table I know I want to help people my group we want to help people the money is good and all that stuff but first and foremost I

want to help people well listen a drug company could come up with a drug to to uh you know help sick people with a certain disease and that's good but it's only a small percentage of the population relatively speaking but what we're talking about here and you know the the the potential of how many people you could add and help but in this day and age where where uh uh people are paying a lot of money for groceries and gas and rent and insurance and so on and so forth and and people are living Che

paycheck to paycheck and people are paying 23% of juice to credit credit card companies that maintain their standard of living okay that's worse than you would pay a bookmaker in a neighborhood I grew up to to borrow money or [ __ ] as you would call them I mean it's unbelievable so people are getting hurt and I I'm I'm really my group one of the main reasons I started this company is to help people augment their incomes show them how to make $200 or $300 a week that's nothing it's nothing so I I think if

if you with the right person and they with the right group yes yes who can cut out reading a novel and and you know go to the library I'm going to really you know it's nice to be able to to have that sense go to the library and read every book you can on on economics and and trading and this and that and that but man it's the mentor that means everything because what I could say to these people at one specific time in one particular instance could help them for the rest of their lives

and that's what gets my juice is going and the people that are with me a big debate that seeing as you mentioned time there is actually very interesting a big debate that's been happening at the moment is between time and price are both important is one more significant than the other I've had ex institutional Traders saying that you know time is irrelevant it's all about price and when price meets certain levels that's all that matters where I've had other people on the podcast where they say time is the most crucial factor and that when you

trade specific time Windows that's when you know that's the optimal times to trade and anything outside of that is not optimal and shouldn't be traded what are your thoughts from your experience is time and price just as important as each other is anything that more prevalent than the other yeah I mean the market has a different personality every day okay I've seen it all all right I don't I hear people say that all the time I only trade between the hours of 9 and 11 or I trade I don't trade in the afternoon anymore or

I don't do this or I don't trade on news or I don't trade at the opening or I don't I wait till 9:45 I I I don't get any of that myself I don't get it if you want to if you consider yourself a Trader you should you don't give in to not trading you give you do not you apprise the situation and look at the opportunity now you may have a pension it may be mental I don't know and that maybe suit suit some people but I don't close out any time frame of when

or when not to trade all right if I looked at my uh trades over the course of a couple years I'm sure there'll be pockets of times when I was more successful but it doesn't deter me from Trading the market uh from 8:00 a.m. or even 6:00 a.m. sometimes uh until until the market close uh closes so you know uh and and the timing of anything is always about the entry it's always about the entry is always about the timing of the entry all right and you know I talk about scalp trading with these things

that these trades that take that took me six seconds 20 seconds 18 seconds this is all fact uh constantly constantly because I'm able to pick out this info this Divergence in a market where I know I can print money all right and it may still go up after I I sell it I don't care about that but it's a timing of the execu it's a timing of the entry and when you're trading with this mindset I say it all the time when you're trading with this mindset you can you know it's a difference it's a

difference in your p&l because if you if you if you're paying up and and by the way retail Traders don't chase if you miss the entry level where you want to purchase don't chase a lot of a lot of retail Traders they they all make the same mistake you know they say oh man I didn't buy it here I didn't buy it meanwhile it's up whatever and they're buying it here they're chasing well you know you just made this thing quadruple diff different uh difficult for you to make money but if you're entry the time

of your entry is where it's supposed to be man that is the difference between you making four handles or five handles or seven handles or eight handles that's the difference that pays the bills that pays the commissions and so on and so forth so you know the timing timing of the entry is is is really is really everything yeah so that making sure that you are there to strike and how important is it though to be prepared for that you know so like a lot of people they don't have a strict routine for their trading

for example one day they'll turn up one day they won't of course A lot of these people are in that boom and bust or not profitable stage unfortunately so that's why you know as part of the podcast we're just trying to educate and show showcase you know profitable Traders and and what they do is that something that is important to a profitable Trader to making sure that they're consistently turning up so that if the time does arise they're there to strike and not just essentially miss an opportunity just because of laziness or just not being

prepared yeah I mean you have to be prepared I mean you just is no this is no Sprint this game it is a marathon and you need to give you if you really want to do this and try to make a living or augment your your income uh by by trading you need to put in the time okay and it's okay uh and and you know putting in the time helps your confidence and confidence is the whole thing you got to feel loose that you could do this and you can do this but there's no

easy way to do it anybody can roll the dice and get lucky but that not we're not talking about that talking about consistently making money so what are your thoughts about journaling trades I know obiously in the pits journaling trades as an individual as the trader themselves would be difficult uh because you're managing the flow all that day but you have I believe clerks and people who would track them for you and that afterwards you would evaluate what trades have been processed Etc then you find your carry trades and as you said like Days Later

you'd find out about those um but now like as you've stepped away from there how important has it been to journal your trades and keep track in your L 100% okay 100% you need to look at your trades and you need to learn from your trades you know it's one thing to see a profit and a loss but it's another thing to see how you got there and you will remember your trades as you're going over them you will remember you you will remember the prices you will remember the circumstances you will remember okay you

when you're journaling your trades you don't want you know I hear people say well I'm 90% accurate I'm not you're 90% accurate oh okay great that's that's great but that doesn't mean anything i' rather be 65 70% accurate because when you look at your Journal you know some of the best trades you will make some of the best trades you retailers will make retail Traders will make will be losing trades they will be losing trades okay why okay you see something you you know everything Clicks in your head you whatever reason you get long here

you're wrong and you and the earlier you see that you're wrong and you're willing to pull the trigger and take that trade off you want to see that in your journal and and that kind of stuff is not going to promote 90% if you're at 90% you're not seeing that and you're at 90% you're never going to be able to do that consistently you want to be at 65 70% what does it mean it means that you cut losses on trades and it means that your road winners longer that's what you want to see in

your journal in terms of uh I've heard you talk one before instead of having a single entry that you should be averaging into your entries instead and is that more so in terms of if the Market's going against you or do you mean once the market has shown you its hand and it's working in your favor then you should be scaling in both both so uh what you don't want to do is you you don't want to use up all your ammunition when you're initiating a trade I never do it I know that makes that

that puts pressure on yourself to be right immedi mediately M you know sometimes you all right immediately sometimes you feel no pain in a trade and that's wonderful doesn't happen like that all the time so you know you don't want a bunch together positions if you're going to average because you're not doing yourself a favor if you buy something at 50 you don't want to buy it at 49 because that's bringing your average down a half a a half a two ticks you don't want to do that you're not accomplishing anything why because you just

used up another 50% whatever you used up you doubled your money you may have more buying power but you're clumped together okay you want to stretch that out you want to bring that down to 45 so now you're talking 47 and a half all right you don't want to Bunch together but you don't want single entries because single entries will burn you every time it will burn you every time but don't Clump together um when you're averaging down and you're and you want to average down to your initial position don't Clump it together let it

spread out especially in the NASDAQ you know I don't maybe 10 to 20 handles I don't average down in the NASDAQ this morning it was much more than that during these some of these sessions where I was longed 20 or 30 NQ Futures okay because man they kept coming down and if you have the bank to do it as it comes down lower and lower you want to increase your size you don't want to buy one if you're low four you want to buy four to eight and that brings your price way down and that

helps you feed in when the market turns and the market always turns for day trading purposes may not trade for you know to write off into the sunset but it will uh it will turn around and it will allow you to feed to feed into a rally but if you're only buying one of or two down you're not bringing your price down enough it's going to make it too difficult so you have to close your eyes and buy them if you want to do it right what are your thoughts on uh Market Cycles because you've

been through your fair few you know you got your 87 youve got your do com youve got your 2008 you had obviously your covid crash recently as well then last uh on Monday of this week sorry not even last Monday unel August 5th is August 9th as of today um and yeah like August 5th we saw the the market open up we saw markets across the board red and selling off very aggressively emotions extremely high and yet we bounced back and and actually you know printed new highs from those lows amazing um you know how

what can you speak on in terms of like recognizing the emotions any sort of common traits amongst these um volatile market conditions that come in from time to time and any of the biggest mistakes that Traders make when these moments happen yeah uh if the volatility is on a downside as I mentioned earlier uh one of the biggest fail trades is and sometimes you could do it uh but but vast majority of times you don't you can't get away with it and that's selling failed breakdowns or buying failed breakouts okay Market's going crazy going crazy

going crazy I mean sometimes I will go crazy when I recognize that they're out of control by the various uh uh components that I look at and I realize they're out of control and I'll just hit that buy button and I'll just keep riding it all right and and I I'll just start flipping out as they as they come up but you know the you can just recognize the emotions you can recognize the emotions by the way the tape is moving you can recognize the emotions uh you know uh you know you know by the

technical areas that are being invaded by algorithms you could recognize it and and you know when you know the market is out of control I I have a couple 150 200 names that's a watch list it's a customized watch list it's a watch list whatever the banks uh the oil socks uh you know the samies uh on and on and on and I got a really good sense when all these things are puking in the same time at the same time and the volume picking up as such of course I always monitor the volume bars

I mean you just know that the emotions are running high and that gets my juices going because the the emotions running High you know people make mistakes and all the folks out there retail Traders are probably in that group that makes mistakes and and and know for instance you know uh up up up up Market everybody's having a grand old time buy to buy the market goes up make money oh this is great you know yeah cab drivers talking about it up up up up up up up okay but they don't have to handle down

down down down down and and there's less sophistication in down down down and they make more mistakes and down down down all right they'll sell at the bottom and that's what they do and and that's the emotions how interesting has it been to recognize that over the last 60 years so or coming up to 60 years of your career the mistakes that Traders make and and the things that make Traders be unprofitable are still the same 100% that's ex that no TR statement was ever made you can beat their head against the wall you can

do anything they want and they'll still make the same mistakes over and over again and part of it is because new Traders come into The Fray uh and they and they they're at a different stage and make mistakes maybe the people that started this two or three years ago have advanced somewhat but they'll still make the same mistakes but collectively as new Traders come in and everybody wants to be a Trader and new Traders come in you know as an average they still make the same freaking mistakes it's amazing has trading always been sort of

this aw this this thing that people have always been interested in yeah yeah I I absolutely absolutely you know you know you know I I mean I I don't live in New York anymore but everything I do is in New York and um you know people ask me I just came over from a doesn't matter from a doctor and just normal stuff and um oh man give me give me give me a thing I'm a you know a cardiologist nurse nurse practitioner oh oh really give me I want you uh give me give me give

me your give me your email address give me this you know so yeah the answer is yeah it's true it's true people feel like they're missing a boat uh number one number two uh people are looking to augment their when com because of the reasons we stated earlier so one thing that did come out after August 5th as well around that same time uh earlier this week was that um Warren Buffett Berkshire halfway is sitting on the most cash and they sold a huge huge portion billions of dollars worth of Apple shares um you know

are these sort of traits that you've recognized previously when you know things are alltime highs you start to see these huge funds start to liquidate their shares and start to sit on cash I know there's a lot of talk of potential recession and Market downt we're currently in election years across multiple not just the us but UK just had an election France just had an election y um when these things have happened in the past what are the common occurrences that usually take place yeah well you know [Music] usually in election years they'll buy the

market in the last two months of the year you have tax tax selling at the end of the year as well uh that's another famous play that I always made I always specialized in you know stocks that have gotten beaten up uh gotten beaten up during the year down 30 40% in in an up Year all right uh those stocks are going to be sold and replaced in a new year so I mean that's a that's a play to be fair it's been a play or been in talk should I say in Whispers of it

for many years now since before co co we had that crash which sort of instigated it being that the co and Corona virus instigated the crash they turned the money printer on um interest rates were were down at you know pretty much near zero everything turned back up all new time highs um and now it seems like we're starting to stagnate again you know we've got interest rates risen inflation at alltime highs we've got a lot of uh Wars across the world we've got a lot of iCal distress as well um and it seems like

there's something on the horizon there's a lot of talks of the US dollar collapsing and the end of that Empire what are your thoughts after being in the markets for so long and seeing different Rises and falls from different stocks for example and and different sectors of stocks like right now we're in the sort of like AI Tech uh sort of sector and the boom there like is anything worrying uh to you when you look at these markets I mean yeah absolutely that's why you saw the last three or 4 days doing what it did

after it made a high couple weeks ago made an all-time high you're not talking a long time here you know Warren Buffett uh is you know that's what smart people deep pocketed investors do you know they they're sitting there with cash they buy at bottom and then they start peeling off millions of shares in a questionable environment which is what he does and and you know I assumed he was doing that I didn't have to read it tell you the truth and it doesn't really mean anything that he's doing it because I assumed he was

doing it because that's what smart people do uh you know when they're throwing it out the window uh smart people are there to to catch it and when they're coming up the other way smart people there to let it happen so when was he doing this at the height near the height of the market does it matter to him is the market going up another 20% 10% in his face probably not probably not was it going up another 5% maybe but it doesn't matter to him he's printing money by by liquidating these positions you know

one of the smartest investors on the planet is Stanley dren Miller who who who sold all his high-tech names and bought the iwm iwm Lesser names less growth names potentially more growth names actually that's why he bought it you know the iwm list companies that are 30% 7% of them do not make money but what they do do is have research and development and if you buy a basket of those socks in a in a an ETF like that one or two of them can hit all right and and and and that that's what he

did very smart dude but as far as the concept on Wall Street will never change uh we talked about a number of times during this conversation about uh selling bottoms selling bottoms selling bottoms well in essence or buying tops buying tops well the smart people in the world that deep Park they know this okay so when people are puking and in a market is puking they have to place their bets and they have to stay in power to just to hang on until it turns around and and when it's selling up here he's printing money

so this goes on over and over it'll never change do you feel like once when everyone's talking about recession that's obviously not when it's going to take place it's normally when it catches everyone off guard uh when Peak Euphoria essentially so like every time we make a new alltime high everyone expects us to then suddenly crash it keeps doing it over and over again correct until the point where no one questions it anymore correct this oh this is going to keep happening perfect that's when it St Place perfect I I I stood up watched the.

com era the same way okay you shook your head none of those companies ever made money uh they didn't make money at the time it didn't matter and every day I shook my head I said you got to stop this my customers shook their head they couldn't believe it they were getting running all over the place what's this what the impetus on on the money are capable of this until as you just eloquently said until it's not okay and then it gets ugly okay I firmly believe in the last three weeks okay what were they

talking about where what word did you hear bubble it's a bubble it's a bubble want to know why the market made new highs all-time highs two weeks ago because everybody was talking about a bubble exactly what you said that's the way it goes simple common sense man what are your thoughts in terms of I know that you did you were part of history with the New York Stock Exchange you placed the first uh trade if I'm not mistaken um was it executed fire I don't know if it was electronically something you buyback the the uh

program trade orders program trade orders that's right yeah first ever uh first ever on a New York Stock Exchange first ever I had six million shares give or take of of 60 S&P names to buy Market on clothes when there was no Supply no Supply stack of orders like this no Supply buy 100,000 mobile market on clo by 20,000 IBM Market on 20,000 IBM right 20,000 500 shares of IBM in those days the buy Market on close could could take the stock up a buck and a half or two bucks 20,000 60 S&P names I

I I had 25 Brokers seven of which work for me 25 of which were just you know my friends that were representing and I'm I'm staying in a separate location handling every freaking order okay and and I said wait a minute this is this is not going to work it's not working there no Supply the place was in a panic uh uh the chairman of the stock ex Chang the the the the directors the board coming down are these real orders are these real I said fellas what do you mean are these real orders yes

the real orders oh yes they are oh my God what are we going to do what are we do nothing get away from me I'll I'll take care of this 25 Brokers running all over the place finally I realized that the traditional way to do this is not the not the way to do it so what did I do I call the the largest the biggest firm on Wall Street who client of mine and what paid me to trade IBM for them $115,000 a month in 1980 1981 a lot of money just as a retainer

just as a retainer but they had the most successful person that headed a trading desk and the most powerful person on Wall Street excuse me named Stanley shopcoin and Stanley shopcoin was a the head Trader of Solomon Brothers and Solomon Brothers noted as a bond house but they a huge Equity desk and every piece of merchandise that came down the pike to get placed called Stanley called Solomon Brothers I said I I need somebody with strength here I go to the phone I say give me Stanley Stanley Richie what's happening Stanley listen to me I

have done I have B to buy okay so you know call me back this is what he said he says so call me back back and will white somebody I said no no no I there's no way cannot do that there's none of that he says give me my clerk gets his Clerk and he says give Richie sell orders up to the amount of shares that he has to buy at his discretion to fill every one of those buy orders and that was an incredible day and we just went up talked about the specialist book

find out where Supply was uh you know and then we filled it in with Solomon Brothers proprietary sell paper and priced every damn one of them wow crazy wow crazy so like being part of that history so like you being part of the history of being one of the first people to instigate a sell a program a trade and how does that make you feel though like knowing that you're part of that history it was just incred I wish I had that those original papers I wish I really did they be worth millions of dollars

but I don't but how did it feel it feels very satisfying here's a kid growing up in Queens with nothing I wasn't I didn't grow up with a poor family middle- inome people worked hard all their lives you know lived in a 10 $12,000 house uh you know uh I had everything that I wanted which was really not much and and and here I am dictating Flo it's the the the the top firm on Wall Street and the top top top Trader on W Wall Street basically not basically you go look him up top guy

I mean he controlled everything and here I am you know one onone with this person and he's given me discretion over millions of shares so how does it make me feel makes me feel great man really does as it should as it should and you know as part of this whole interview there's so many gems that we've taken away that's for sure and and to speak from the experience and wealth of knowledge that you've had you know I know it's going to have a huge impact on Trading is out there as we discussed like people

of you know this audience the retail audience of today you know we've talked about like the issues being more so of of rushing their greed their lack of focus um but when it comes to we talked about sizing trades right we talked about handling size for yourself but what would you advise to Traders out there who are going through that scaling process themselves you know they're going from I would say trading a few thousand dollars into the tens of thousands the six figures the seven figures you know and a lot of them have these barriers

when it comes to that psychology of being able to handle you know new size whether it's new stoploss amounts new take profits amounts or new contract sizes is there anything that you can sort of advise them to help them overcome those barriers I I would say something in a very profound manner here if you find yourself in that position stop and and and and manage what you can manage because it's not for you you will make mistakes and it's going to cost your money if you you think you can fight through it it's your prerogative

to try it but if you have a roadblock and you sense a roadblock because the the the the chips on a table have changed uh you know you may have to look in the mirror and say maybe this is not for me or you may have to just stand in one place you know I think it's very fair I think it's very very fair and it's interesting you mentioned about chips on the table how how close of the relationship between say poker and and trading is there CU as you mentioned earlier actually a similar thing

where you you need to know the personalities obviously that was more so for the pits but do you treat the the markets even now in the similar fashion of trying to recognize the emotion within the charts if that makes sense like if you seeing a lot of a Down movement a lot of emotion just within the chart itself like when you're looking at the charts you're seeing these huge red candles is that how you're operating are you looking at okay this this is how the average Trader is probably feeling right now or the Traders are

out there this is what the flow may be telling me and therefore acting accordingly yeah I mean I listen I made my I made my living and and and as of today have learned uh under very stringent conditions uh how to control emotions uh and how to manage emotions um again the size doesn't really matter to me it doesn't it means nothing I can you know it doesn't mean anything trading that kind of volume under those circumstances with what the what the stock meant in the overall picture of Market uh every trade most of the

trades during the day I can recount and look at the percentages of every one of those trades and the decision process take that takes place to pull the trigger on a specific trade yes it does so you know and I believe that those decisions really are the decisions that control the the decisions we make in our everyday life whether it's to stand on a curve whether it's to take a step this way whether it's yell at somewh whatever it is there's a percentage in everything so you talk about a poker game there's a percentage in

a poker game it plays do I want to play do I want to go all in do I want to fold am I going to make a beted am I going to make a raise blah blah blah but the stock market boils all that down and the difference is there is no time you have to make a split decision and you make a split decision based on the time you put in and and being a student of the game as I say that word again you you need you you need to get to a point

where your gut spits this out and you can you you are capable of doing that providing you have the right Mentor that I'll tell you providing you have the right Mentor you can you're all capable of doing it but the decisions that I make that I make to this day are based on that gut feeling I tell everybody look at the rhythm of the numbers what do you mean I said watch the quote and watch the size that trades watch it that'll that'll spit out scalp trades to you without looking at another thing yes it

will you'll see the momentum go you'll see it so you know those decisions are are are based uh wholly on mathematics and and I I say if you're a student of the game your gut will start spitting out spitting out these moves you will see it and and learning from way the way I learned it and and lived it to this day it holds up it just does so it's all about mathematics man to finish up on the algorithm side of things y you know what would be your advice for people to start trying to

observe you know these algorithmic plays within the markets I know you've described really well previously in terms of having sort of your range knowing where your premium your discount is understanding your buy and sell stops within those ranges and acting accordingly is anything that we can elaborate on that at all you need to remember that algorithms are there to create liquidity and volatility they have no mind they have to go to an area they don't just go to an area they're programmed by no matter what you say it comes down to a programmer programming them

programming whatever technicals they put in whatever the mathematics is that make up this algorithm so it's not only the the premium and discount areas but when you see the NASDAQ going to a full number coming up 20 or 30 handles 19,200 all right 200 230 240 250 270 275 280 Market's rallying 275 280 you know it's printing at the main number you just know it and I know that those algorithms are going to make that print but it's it's a same example could be made by any major any firm even number okay okay where is

that 10 20 30 40 50 60 70 80 especially 50 you know they they sit and they sit they want to go to those numbers why we should spend a little time talking about algorithms going uh to option strike price areas you know we specialize in that as well because this market and is enormity we gave the example the positions in this market this day and age are multi-million share positions it's not easy to put that kind of money to work and they have to put it to work it's their mandate to put it to

work why am I giving you my money if you're not putting it to work so they have to so their positions are huge does anybody out there think that that they just sit back and they buy and hold and smile and go home and have dinner with their wives no that's not the way this worked they hedge their positions as well where do they hedge their positions for the most part all right options so these strike prices become huge and the amount of puts and calls that sit at these strike prices the algorithms know where

they're sitting and they're programmed in to go to those strike places why to create liquidity and volatility that's all their mandate is they're not human they don't care about p&l understand that interesting uh to finish up on because I know it's a topic discussed previously on the podcast but I haven't for some time um in terms of market makers and hunting stops there's a big thing in the retail space of like the market makers like you you know price hitting your stop loss then going completely the other way and people feeling very targeted correct and

um I've heard you say that that is a case that is something that does take place oh 100% uh one of the lock lock trades as a member of the New York Stock Exchange that a specialist made or if you were an agent and had order size flow is to be on the other side of stop orders okay so conversely speaking here's another little gimme for you folks out there retail Traders especially if you're going down to a number and the market is coming down and down and down and it's you know the algorithms are

going to print a number put an order in two ticks underneath the number because why because you'll wind up being on the assumption is that there are stop orders at those prices and the assump is that you will be on the other side of of a bad sale the market is a buy and sell there's a buyer and seller on every transaction somebody's going to be right and somebody's going to be wrong you want to be on the other side of stop orders yes you're 100% right you want to be on the other side of

stop orders but it's not easy to identify where those stop orders lie if you're going to put a stop order to protect yourself again don't put it at 50 because they're going to get hit you know put it at 40 give yourself a chance give yourself a chance to breathe and for the position to be right don't put it at 50 you're going to get Swept Away by some intelligent buy like myself who wants to who want to get long or if you're a mistake Richie I love that I love that and I'm sure we

could keep going but um thank you for being with us today and sharing so much with us pleas and everyone at home drop a comment with your biggest takeaway from this episode there was so much as always and the links for Richie will be in the description below so make sure you check those out as well there'll be other episodes on screen so check those out hit subscribe and until next time take care