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James 0:01
What’s going on guys, we’re here with another episode of the After Hours Podcast. We have a very, very special guest today. I don’t even think he needs an introduction. Joining us is Steven Dux, who is a bit of a legend in the small cap space. So, thank you for coming on Steven.
Steven Dux 0:19
Hello, guys. How are you guys doing?
Alex 0:23
Good man! So I know it’s a trading podcast and we’re gonna get into trading questions like that. But so yeah, I have my own question is I hear you’re a bit of a car guy. So I want to know what your car collection looks like these days.
Steven Dux 0:36
Ah, cars are right now I have a s five, the Mercedes Benz and have a Rolls Royce. I think it’s ghost. Yeah, that also have Koenigsegg Reguera. Used to have SVI. But so that was because no one was giving me headaches.
How Did You Decide to Buy the Car?
Alex 1:07
The Koenigssgg is the one that I’m most interested in. How’d you end up deciding to get that car because that’s like a multimillion dollar car. It’s specially built Christian von Koenigsegg. So how’d you end up deciding to get that car?
Steven Dux 1:19
Oh, I’ve wanted to get one man just as I said, I need to make a multimillion dollar in one trade. That’s that’s the trick.
Joe 1:32
Which trade paid for that car?
Steven Dux 1:36
initially started with DWAC
Steven Dux 1:46
Yeah, well, not necessarily a trump car
Alex 1:51
That was I think close to 6 million, right?
Steven Dux 1:54
It was 6 million then. The following day was three the following day was four.
Alex 2:01
was that your biggest? Was your biggest single one day winner the DWAC trade?
Steven Dux 2:06
I think so. Yeah. Well, firstly, first by the Koenigsegg didn’t didn’t count trade zero though, because it was doing it with trade zero as well. So it was a little bit more than 6 million but
Alex 2:19
that’s just that’s incredible.
Alex 2:21
How did it How did it feel to not only have a trade like that, but to celebrate it with an unbelievable reward? Which is a car a second question is how’s the car drive? How’s that? What’s it like?
Steven Dux 2:34
The car has its special sound. It sounds like I don’t want to say goes because he has a ghost sign on the car. Has that weird noise? It sounds pretty good. Other than that, it’s got two batteries. It’s I think it was the V8? Yeah, two batteries and V*. I think this 116 100 horsepower. So you drive it
Alex 3:01
Do you drive it often or do you drive depends mostly like day to day ?
Steven Dux 3:04
Day to day. It’s the rules and events. I don’t drive a car often because it gives you I mean, we drive on the road in me brings too much attention. Some people get jealous and some people in our eyes
Alex 3:18
Everyone trying to race you in a Honda Civic with like an exhaust.
Steven Dux 3:21
I mean, yeah, and they won’t know maybe switch lanes because they’re trying to take pictures and they’re moving the same speed as me it’s Yeah, I got pulled over once because I couldn’t get over the other lane.
Harry 3:37
You mentioned that people get jealous, like, like, have you had like bad experiences with people? Or? Or do you just like think that or like, is that something that kind of happened? Or?
Steven Dux 3:49
I think the first car I bought was McLaren and I was parked nearby street and some somebody got jealous. I don’t think it’s a pencil. I think it’s a pen and you know, scratch through the entire door. And, yes, the first time then,
Joe 4:12
that was the first time you killed a man.
Steven Dux 4:16
That was the first time the car got scratched
Alex 4:23
it’s very, it’s very impressive. Well, you don’t want your trading man because I feel like you’re one of those type of guys that when the opportunities there, you’ll strike. And aside from that, you’ll just wait. So how do you personally handle the FOMO of waiting for those setups and kind of on that turn? How do you have that confidence to pull $6 million trade on DWAC?
How Do You Have the Confidence to Pull a 6 Million Trade?
Steven Dux 4:48
I will say that to be honest. Like everybody is struggling with our waiting game especially in the last year and this year. thing last year we have a five months of nothing other than than bigger caps. So what I used to do is a track setup that I want you to trade specifically how many times they happen throughout the year, and each time, you know, what’s my winning percentage, how much I’m likely to, again, how much I’m likely to lose. And you can kind of get a rough estimate, to see that, you know, this is how much you’re going to make by the end of the year. So once you know, the numbers are much more patient than, you know, other traders that can’t, you know, wait for an attorney and start forcing trades.
Joe 5:34
So a lot of people go for a lot of people, you know, tracking trades is you know, it’s a common thing that we’ve all kind of been around heard about, talked about doing. A lot of people do it I myself have done and I know James has done it. I know Harry’s done it, Alex, he just catalogs everything inside of his fucking photographic memory. So but what is it about your tracking that allows you to have such confidence in it? What do you think you do differently? Or what is it about that data that when you’re looking at it, you go, Yes, I have to go big.
Steven Dux 6:18
With tight risk. First of all, it’s the winning percentage of the pattern. So after you track a couple of 1000 tickers, all together, you will kind of know what’s the winning percentage what’s likely to happen. And it’s not just the tracking of the of the data, it’s sometimes I record, the movement of the stock tends to shift its momentum and it’s a breaks down or breaks out. And then you can remember, or try to memorize that volume. So you can kind of get a feeling of, you know, when a stock is about to break down or break out. But typically, with how much sighs I’m likely to go in and you usually starts with minimize your risk. So whenever you are, let’s say you want to short a stock, and you not just by focusing on your own risk, you also want to look at the chart, look at the chart that to think you know what, know what’s the target, short sellers are likely to take an entry. And most of them are likely to minimize your risk almost to zero. So whenever you are shorting a stock, and if there is a specific resistance, or there’s pre market resistance, and they want to minimize the risk up to zero, or there’s intraday parabolic, they always wanted to sizing into your push. And that’s when you see a massive stuff into one candle. And that’s where momentum tends to shift. And whenever you are finding that point, I call it near zero point. So if you find that point, and you can get in with pretty big sites with little bit of risk. That’s where I started to powering up my size, once I get a first pullback, or you know as soon as I go in, and when he pulls back about 15% A moment intends to shift and we’ll cover this anonymous size to get some of some of the gains then we’ll start adding the balances this way I will have a little bit of a cushion of praying throughout the day. And that’s where the profit tends to tends to grow in snowball.
James 8:38
That’s unbelievable I think that’s like is it hard for you then when you have the opportunity to short with such size like a DWAC or something like that, then day to day like has it become almost like not enjoyable for you? Like I know it’s still making money every day but like how you can’t quite obviously use the same size day to day. So how does that work for you?
Steven Dux 9:00
Yeah, not the same size but I don’t really use the same size on you know, every single ticker, I track pattern specifically and category that categorizing into different sections. For example, like lower floats with lower cap market cap. And when they’re trading specific volume, you can you can kind of calculate or first of all, you do not want to exceed 10% of the float 1% of the volume. That’s something that’s a rule that I typically play throughout the day. And once you don’t exceed that number, then you want to trade it for a decent amount of time you will kind of find out. Especially going into intraday patterns. Now most of the runners but intraday or low flow can only Sometimes handle by 100,000 positions 600,000 positions, if you go more than that, it’s first of all, you’re taking too many shares. Or you’re once you go over 10% of the flow, you are going to affect the price. And to be able to exit into stock, you’re basically pushing up the bid in such a large range, then you cannot get out at the point that you wanted. So, with different patterns, you have to kind of know that, first of all, what’s the max size you can go in? Before? Before you cannot get out at this point, now you wanted? That’s for intraday patterns, then if we go into multiple patterns, then you kind of have to go through all that data again, to see what’s the maximum size you can go in, I have those, most of the time have those size figured out already. So let’s say I go into injury pattern advocate is ticker, check out the full check or the market cap check. What about volume? I will know that okay, well 600 Ks, about the Max and size. And then if I went out, I will probably make up 200k 250k. You might trade?
Taking Too Much of a Float
James 11:18
Well. Did you learn that early on that you? Did you ever make that mistake? Did you ever take too much size according to the float? And like just really put yourself in a bad spot? Or is this something you kind of knew from the beginning? If you had to do
Steven Dux 11:32
Oh, definitely made mistakes before? Yes, I have to take in? I will say it was 15% of the float? And yeah, it was it was not very good. I think I took like 40% losses on it. I was trying to get out with only 50% risk. And after I got out to 43% losses.
Alex 11:58
Do you ever swing these positions short, multi day? For example. It doesn’t have to be direct, but any of these stocks that you’re shorting okay, you locked in 100k 200k, you still keep maybe 50k shares 100k shares for 234 days more, or are you mostly like you know what, let me get out, let me sleep well. And I’ll just hit it again in the morning.
Steven Dux 12:19
I keep it so I only hold positions maximum one day. So just one one night and covering the next day. Typically, when were those swing positions, going to multi days, I will cover about 75% 75% of my size. And if the ticker trades crowded enough volume, typically there’s a balance coming in the next day. So I keep that 25% Mainly is for the average so I can add it the second day. Make sure that the average is really high and want to stay positive throughout the day. So once you average pretty high you are not in terms of your entry and exit. You will probably not get nervous when the stock is bouncing in the second day.
Harry 13:13
Yeah, maybe we can kind of switch gears a little bit and talk about the recent sector that we had. Ai Did you trade any AI tickers? Did you trade any China tickers? Maybe you can kind of talk about that maybe you didn’t trade any at all.
Steven Dux 13:29
I trade. I trade all of them. So
Steven Dux 13:37
I mean, it’s you know, pretty exciting. Exciting. I don’t know, it’s the last few months starting. I mean, the AI wasn’t as wasn’t as crazy as the last one. TOP Yeah. So for the AI sector, I think I took I took I think the biggest loss I took was CXAI on the bounce. Not on the on the first initial run I think it’s I think he topped around 70 consolidated around 15ish. Then, I think was that Green Day right there. Yeah, that’s the last I took because you know, the resistance is so the resistance range is so wide. That’s where I was taking paper cards little by little little by little. I think that was 141 40 loss on 40k losses. I think that’s the last I took specifically to the AI sector
Harry 14:44
Was the range be like 13 to like 20 Or would you consider it to be like a little bit higher 15ish. I think if 15ish you’d consider that to be like more. So kind of the resistance.
Steven Dux 14:57
It topped around turn, you live in three times. so, I shorted on a third time when it was panicking. To zoom in, and whenever various, that’s where I cut my losses. So
Alex 15:11
this was after the first initial run on the initial run of CXAI when GFAI SAI all these crazy stocks were going were you attacking during that time as well.
Steven Dux 15:22
no, no, I did not attack it. I knew that this is the first sector that everybody wants to get their hands on. Because typically, when you have a long, long period of time have nothing and other people tend to go very aggressive on stickers. So I think I attempted on the on the backside for GFAI. I think I made 300 or 400 on the on the backside. That’s pretty good.
How Do You Keep Yourself From Getting Overconfident?
James 15:52
This is a bit of a psychology question. But from someone like you, who has had such success on shorting, like DWAC and like other sectors, how do you keep yourself from getting like, overexcited on the way up? Because like you obviously you were very patient on the way up? And then when you hit on that bounce day, how do you not force yourself to, you know, taking on too much risk too fast. And like because you seem to do really well risk management and like keeping your losses really small compared to your wins. I think it’s impressive, but how do you kind of keep your mental state when the trade is actually happening? Okay,
Steven Dux 16:25
okay, so there’s one thing that I typically keeping track of is I split market cap and float into different sections. So let’s say if the ticker started with under 100 million market cap, and and when it then once they did its multi day round, you track on the top of the candle to see typically on the on the highest day volume is the top. So you can kind of track how much money was traded in that top of the candle. Then after that, you can use that as reference to trade pretty much all of the multiple owners in the same sections. So if the initial market cap is under 100 million, it’s a, the top two candle traded 30 million shares around 50 shares. And that’s 1.5 billion in terms of the outer dollar amount that you can use the dollar amount to calculate, if the motor owner tends to finish its run for the day, or he still has continuous volume that’s going to come and on the second day. So let’s say today. So the number we got is 1.5 billion, and today only traded maybe 500 million 700 million, so there’s a high chance that the ticker is likely to go up another day. And once you know that, you’ll be pretty efficient way.
Alex 17:59
So you’re very data driven, you’re really looking at the stats, you’re looking at the data, you’re making sure that you understand if it fits the criteria, if it doesn’t fit the criteria, that’s it’s really, it’s really key because I feel like a lot of people in trading, they just think like, Hey, you show up, you buy the stock, you short the stock, and it’s gonna go up, maybe it’s gonna go down, but you are very data driven to be able to say, hey, you know what, I’ve seen this pattern occur 1000 times there’s a 90% win rate, I know that the float is x. So that means that my size is wide. And based on the win rate that I’ve had in the past, I could do this. So I think that that’s very helpful to a lot of people to understand that you’re treating this very professionally, you’re not waking up and winging it. You’re not just gambling rolling the dice you are treating it very, very, very high level professionally.
Steven Dux 18:44
But you know, there’s a whenever even though I do data up to the extreme, I still make mistakes. So I can’t imagine people don’t do data. How many mistakes go into like going to tip especially in the last two weeks, two weeks ago. Tip I was talking to the owners of different brokerage is fine work blowing up four different accounts. I think a lot of people went negative equity on this ticker.
James 19:21
That is crazy chart.
Steven Dux 19:24
Yeah. And I think I personally took I think was 200k now trying to get 140 K. So 140 K on the first day, not on not now not on that day, the previous day. So
James 19:42
after hours.
Steven Dux 19:43
Yeah, so I showed it in the consolidations around I think is around 20 19 after it didn’t break down. That’s where I covered by the end of the day. So that last candle is where I exited. My size was pretty big. So I I think was, I forgot that it’s 70 case years. Wow.
Joe 20:06
Was that you pushing it up after hours?
Steven Dux 20:09
No, no, no, no, no. I exited right before the market closed. And then that’s where I wanted to go long. And I had my hands on the trigger, I didn’t pull it.
Alex 20:19
If you went long you would retire, bro.
Steven Dux 20:24
I probably won’t catch the top. To be honest, I probably exit around 30 and leave a little bit size and goes all the way up to like 200. Very little size.
Joe 20:32
So this candle had 125,000. So Dux was like 60% of that candle.
Steven Dux 20:42
Yeah, that’s me right there.
Alex 20:46
So how do you deal with those losing days? Like what do you do to release stress? Because trading can be very stressful, like, the good days are never as good as the bad days or bad. So I feel like, at least in high level trading, when you’re talking about six, seven figures, maybe even eight figures, there’s gonna be some really bad days that come along. So how do you personally release stress? How do you manage stress, any advice for people that are stressed in their trading?
Steven Dux 21:15
I mean, I get stressed and I finally get a bad trade and go take a walk, or go to the gym. Do some meditations and whatever works for you
Joe 21:28
drive a 1600 horsepower car. Some of these things aren’t available to us. I get it.
Steven Dux 21:38
But you know, see the hardest part and to really, for stress, I think, in this almost like nine years of trading is to actually face your own mistake a lot of people that when they made a bad trade, they don’t want to, you know, go back to their trade, or they don’t want to go back and look at their accounts. They know what stupid things they did, why their place their entry and exit. The hardest part is for me to like, actually admit that I made a mistake, not finding excuses of Oh, yeah, the stock is manipulated, the stock is this or whatever, you know, when the stock is always going to be manipulated, and it’s up to you to manage your own risk, you can do whatever to you know, you can even do counter strategies against those people that are trying to manipulate stocks. So it’s when you take a loss, and that mistake is used on other people and other people tends to find excuses. Yeah,
Joe 22:41
so you talked about being a trader now for nearly nine years. I don’t know if you remember that. I’m sure you do remember this, but back in the day of profitably. There was this guy that I recognized that had a picture of the Hulk. And he was just quietly making better trades after better trades after better trades. And then it turns out, it was this guy named Steven ducks. And I was like, What the hell is this? So what was it during those times that allowed you to gain such consistency? What did you do in the beginning? And then when you figured that out? How did you stick to it?
Sticking to a Trading Strategy
Steven Dux 23:26
Um, so the one I think the timing that finally clicked, he was, you know, I went back and looked all through all my trades. And I wouldn’t be able to distinguish which one is which which trade is necessary to place even though it’s a loss, which trade is, you know, considered to be over trade. Now, once I filter out, you know, all the losses of the gains, that’s, that that’s an opportunity to have to place an entry and exit and get rid of all of the overtrading and what is considered not to be treatable, then I recalculate the profit. And you know, what, it’s about 10 times 10 times higher than the ones that I have right now. So that’s where I just stopped completely arbitrary, filter out all the trades, that does not filter the criteria, and only stick to the trades. I know, and I know which losses it’s, you know, when I take a loss on a trade, I know if it’s necessary or not. And know some of the losses are unavoidable. Some because it’s resizing into 80% winning percentage and it just happened to hit a 20%. It’s that type of losses are not avoidable, but it’s manageable. You know, it’s as long as it’s under your risk risk management. You’re okay with that. And your long run without arbitrary fitting or criteria, and I know you’re always going to take losses, as long as you know It’s under your risk management and always you should be fine. Your trading?
Harry 25:08
I think you kind of mentioned at the start, like the past two years, obviously, haven’t been as ideal than the couple before them. And maybe you can kind of talk about, like, what setups are working right now and like what types of, you know, things are working for you and this kind of environment.
Steven Dux 25:29
Okay, so there’s two things I found out I just, personally my opinion after observing in the last few years, first, first of all is training become definitely became more competitive than usual compared to 2021. So it’s a lot harder for short sellers to I will say, to actually make money compared to 2021. And there is a long term, there’s a long time a period of time, that is completely nothing. And every single person, you and me, got a little bit forward because I want to place the traders in there, there’s basically nothing to make money on. So I think was last year, August, then we had BBVA. After that, it’s pretty much there’s pretty much nothing. So the volume in the market is more as the contents are concentrated in one place. And when they whenever there’s a ticker that came in it’s HKD or BBBY, all the volume concentrated altogether, but on the intraday volume. It’s been declining in the last few years consistently. So what I track that in 2021 2020, the intraday maximum dollar can be traded is up to 1 billion, then going into February it will become 700 million in May or June becomes 500 million, the lowest we actually God is actually two 50 million. So in terms of intraday volume, we dropped our intraday dollar amount being traded, we dropped 75% Compared to 2020 2021.
Short Sellers Holding On to Their Money
Joe 27:17
What attributed to it? do you think it’s people that are just losing all their money? Because they were apes on AMC and GME are holding on to everything or what exactly is it?
Steven Dux 27:31
It’s it’s the raising interest. Everybody be putting putting their money up on the raising interest, they’re getting more financial pressures than usual. So they don’t have enough money to trade. That’s, I mean, that’s what I think. And whenever there’s something come up, and usually it’s the first one or two trade after a long period of time of nothing, there’s a really intense squeeze HKD went up to 600. And your view went up to 200. And usually the edge comes right after that. So either there’s a sympathy play, because MEGL going into the second day, shooting against the pre market resistance. Yeah, that’s typically where the edges and after that it depends on what I typically viewing is short sellers typically has a lot more money than the buyers. So whenever there’s a squeeze, no big squeeze are coming in the short squeeze squeeze squeeze the short sellers deposit money into the buyers bank account and the buyer is going to use them to do it again because they think they can you know, pull off another tip. So, then the short sellers go in to get their money back. See this is in the what happens. And in the last eight years it has not changed at all. So the only problem is as a short sellers for two to for you to distinguish compared to other people. So don’t screw up on the first run. And you will be able to pull money after you know the stock produces ages and you know be patient enough to catch the edge after the stock finishes squeezing even though you can sometimes you can completely avoid although you know when when the TOP is going up to two going up 200 Or HKD you just don’t touch it and just wait because you know shorts are screwed up and the buyers will come back for more. So that’s where you can make your money out. That’s where typically I make most of my money.
James 29:48
That’s really, really brilliant.
Joe 29:50
Yeah, how did you do on ASNS?
Steven Dux 29:55
ASNS? The one yesterday?
Joe 29:58
Yeah.
Steven Dux 29:59
Oh yeah, I made $210,000.
Joe 30:06
Nice. So what that that’s sort of kind of the explanation that you were talking about you let TOP run. And then you wait for those other little ones like you were saying MEGL which tries to turn into the next T O P. And then for example, with ASNS was one of those where you had INMN. And all of those other ones go on wild, and you waited for this bounce play on ASNS. So on these bounce plays, and the lower volume, how are you adapting to that?
Steven Dux 30:43
Okay, so there’s one rule that kind of track those. We call this hyped up play. So we have bunch of those, like the marijuana sector back in 2018, the shipping dry is shipping sector, or the HKD, Bitcoin and others Chinese stocks. One thing that, especially during this hyped up sector, you want the first round to trade, enough volume before going on the second bounce. So if on the first day, and that first round, it did not trade enough volume, you have to wait some type of consolidations or fake out for the second bounce. If there is actual voluntary trade and there’s consolidations. Yeah, go ahead and go hand in hand that hammer that size in. But if there is without value, if it’s under 10 million micro float, and he does, I think it was the ticker, it just it just a full parabolic and you know, 90% drop, so there’s no actual entry for you to take. That’s the chart you have to wait for a power consolidations to be able to make money on
James 32:01
amazing. Steven, does it ever stress you out as we were talking about how the market is changing? A lot now as a lot less participants in volume? Does that ever stress you out? Or like concern or worry you at all that like eventually some of these setups won’t work? Do you continuously track new setups? Or is it something you feel like generally over the course of your Platinum will always kind of happen?
Steven Dux 32:22
Of what and you know, the markets always changing? Sometimes, you know, it’s me to like? Well, today what was the ticker called? What today Carvana Na Na Carvana don’t the one went up with WAL.
Alex 32:44
PACW
Steven Dux 32:45
Oh yeah. Go back. If you go if you go back to that chart. Pac Yeah. Pac.
Joe 32:56
Pac W. Yes, sir.
Steven Dux 32:58
So if you go back to that chart, and you compare with the chart FRC, they look exactly the same. And the second day and a triple topped. So So FRC triple topped at 50 and daily consolidation went down. And I think that’s where I shorted it today. Exam Exactly. Consolidation should have a top five and that’s where I taught my size. That’s where I went in. It was around five when he broke that meet up, I took a loss. I mean, there’s nothing you can do because you fit you have to manage your risk. First top second top and the third one on that red candle that’s resize then and soon as it reverse I just covered and went all the way up to six. So I think one thing that’s still in the market is whenever the stock is on parabolic never tried to size in into the parabolic and stock is crowded. So let’s say before 1030 already traded 40 million shares 40 50 million shares so going into the rest of the day is going to trade more than 100 million shares where is that? Where is that 60 million shares rest of the 60 million shares can go you know when this stock is trading that crowded no matter how good you are as a as a short sellers you won’t know how far this thinking how so typically whenever you’re seeing too similar char you want to size in the same place and but it breaks your risk you have to take the loss so that’s PACW today yeah.
Harry 34:47
Are there are there any traders that you kind of like learned a lot from or were able to kind of like piggyback off of when you’re first starting like I know somewhere I saw like that. Like you and Tim Grittani are friends talk with him before. Did you ever like kind of learned anything from him? Or whether it was most of your stuff? Just yourself like just tracking?
Steven Dux 35:12
Yeah, I would say most of my stuff is self tracking. I talk to Tim all the time. I talk to him a movie, we’ve been friends for a couple years now. And we also live in the same place backing backing when I was in Ohio. He lives in Columbus, I live in Cincinnati. And we know we talk about trading all the time. And sometimes I get what did he what he is thinking sometimes, you know, I kind of I kind of, you know, take office ideas and think, Okay, well, does it fit? Does it fit the trading logic or not? If it doesn’t fit? And so between if if it’s trading logic, and if it’s something I don’t understand, and I will ask him, and he will explain what he’s thinking process, so.
Joe 35:55
So go ahead here,
Harry 35:58
he’s mostly kind of like a long, while now. He’s doing like a lot of Long’s. And you’re mostly like, a lot of shorts. So like, when he talks to you? Or you’re like, Yeah, I understand that I get kind of like multi day breakouts set up, or are you more like, This confuses the hell out of me?
Steven Dux 36:14
It doesn’t confuse me. Because when he gets a he gets, you know, for example, six AI and gets him like, 111 daughter or something. So, you know, I mean, that’s the point, I would definitely not sure. And so, typically, you know, he will ask me, Hey, that’s where you’re gonna short.
Steven Dux 36:39
That’s where he says. Where do you think this can go? I would just give him awesome.
Joe 36:48
So can we take a look at this ASNS real quick, just to kind of review here, I think this was art, not ASNS IMNM, this was that bounce situation you were mentioning, and how you were talking about how you don’t touch any of these things, unless they trade at least 10 million volume. So if we take a look here at IMNM, this was one of the China plays that was running with everything. And this was one that actually traded over that 10 million number. Whereas if we look at ASNS, it was 2 million, and it had the ability to break that high. So what what you’re kind of getting at here is that if it traded more than 10 million shares, the chances that there are still people that are bagged up top once this finally bounces, you’re saying basically that this volume isn’t going to be able to overpower the bag holders. Am I understanding that correctly?
Steven Dux 37:52
Beautiful, yes, there’s a high chance that intreated around will not beat the bat holders on the first round.
Joe 37:59
hitting all of that, where it where everything crashed off. And that’ll turn into all the resistance that you’re playing off of. Yeah. So how do you sit there and wait for that opportunity? You just toss some orders out there and just go well, we’ll see.
Steven Dux 38:17
No, no, no, no. Never tossed otters
Harry 38:24
triggered him Joe.
Steven Dux 38:29
Go ahead. Look at the chart. Going to intraday on the second run? Uh huh. So, on that first spike, you see there is no consolidations
Steven Dux 38:44
on that on that top, or what’s the reason of you showing there, you know, your risk, compared to the resistance? Go ahead, look at the resistance, probably nice, so far from where that volume is?
Joe 38:54
Right. Got it? Yeah, you’re talking at least eight before it ever hits any kind of the first consolidation whatsoever.
Steven Dux 39:01
And then, the way I look at it on the first round, there’s no consolidation. Gotcha. So first of all, you know, the first hub doesn’t have any type of reason for it insured, because you know, there’s no risk for you to manage, then going to the second breakout up to eight. Still, there’s no type of consolidations for you to manage until it consolidates the stock consolidate, consolidated between six to seven. That’s where you’re supposed to find your entry, just as in risking the top of that eight, typically a risk to 75% of where of the consolidation range. So it’s between I think this 60s, six to eight. So the range of that so the 75% which is probably around 757 50 area to study 5% of the consolidation range.
Joe 40:02
Oh, yeah. So it’s a $2 range. Right? And so 75% of that would put it at 750.
Steven Dux 40:07
Yeah, yeah.
Joe 40:10
And then you risk you, you’re aiming to enter around that 750.
Steven Dux 40:15
Now, and that’s my risk. I’m probably got enter between fingers.
Joe 40:22
Six 676 50. Gotcha. Okay. Awesome.
How to Get Better at Trading the Market?
James 40:27
That’s amazing. Steve, I have a question for you. So you just listening to you talk about trading it, you’re obviously a freaking savant and 100 times smarter than I am. But but so you get so involved in so in depth in your setups, and your strategies and everything? Do you do that outside of the market with other investments? Like, are there other things that you try to put money into? And like, do you get as analytical about those things as well? Or is it really just trading that kind of gets your brain kind of like, like how it is now, or video games that goes something like this for you?
Steven Dux 41:00
Starcraft is very similar to StarCraft, Starcraft, and it’s, it’s about guessing what people are doing, you know, and it’s very similar, you have to kind of guess where the backorder is, you know, you have to know that nowhere to short salary is what level will make them nervous. And that’s typically where the short squeezes and knowing where the buyer is, you know, what level will get them nervous to sell, know where to show salary as you went to a level where they were likely to cover their position to get nervous. So all these has to be combined with your strategy, you know, it has to be data driven, but by observing the market, you know, you will have an idea of the buyers and sellers is and user data. And typically, when those to one psychology, one pattern, when they’re leaning towards the same direction, that’s when the pattern have the highest winning percentage.
Joe 41:58
So what did you do to practice to get so good at that kind of that level of intuition? Did you just sit outside of Walmart, and just people walk in and out and just predict what they’re going to buy?
Steven Dux 42:15
I mean, everybody behaves, I will say the same. So you know, imagine yourself and started trading, you know, at the very beginning stage, as a beginner, and whatever you are thinking as a beginner is typically where the buyer or the short seller is,
Joe 42:32
so So what do you think somebody could do to improve that skill? What could they what could a person do to get better at that?
Steven Dux 42:39
First of all, you have to survive, because most people get blue out of market within the first year. So you have to think the only way I found out, survive, you know, first two years is focus on one thing that you know, don’t touch anything that you don’t know. Yeah. And until you grow enough capitals, and that’s where you can split, split around and finding different strategies. And make sure break apart your account into in multiple different, you know, let’s say you have a 50k account, you have six backup accounts. So if you blow up one account, you will have a second account ready to go. And that’s the part that’s the I would say essential part, especially for beginners, you know, to make sure you’re stay alive in Sparky, as long as it gets, the longer you stay, the better you will get. So never try to make your money your way shot. It’s, it’s, it’s about experience.
Alex 43:51
what James said earlier, you make all this money trading? Do you have any investments outside the market? Real Estate indexes, venture capital? How do you how do you manage your money outside the mark? Or do you have it in your account trading account?
Steven Dux 44:05
Having real estate, making passive income rental properties? Yeah.
Alex 44:10
So you just focus on rental properties. You don’t put anything into like Apple or Amazon or anything like that?
How to Short a Chart That Has Resistance
Steven Dux 44:16
No, because, you know, it’s very easy to mix up with your trading mindset. And certainly, you know, when we’re doing day trading, it’s all short term, short term, you know, whenever you’re looking at a ticker for it for two months, kind of confuses you. So And typically, we know when you take a position Apple, we didn’t take a position in Amazon, you know, as a trader, you definitely want to look at your positions, if you’re bored. So as well as invest in something else. I mean, it’s all slow.
Harry 44:50
when you’re looking to short into, let’s say, let’s say the chart that we just looked at before, on that kind of resistance, are you ever paying assumption to the vault or the View app on that day saying like, Okay, I think that this is where the average price of the bag holder could be. And I want to kind of like look to short around there, or just not pay attention to that at all,
Steven Dux 45:13
no VWAP doesn’t work
Harry 45:20
Like shots fired
Joe 45:21
shots, here we go.
Steven Dux 45:24
VWAP works, when there is concentrated volume, on consolidations View app does not work when when there’s fully parabolic up and down. So there’s conditions when, when, when, when you have scores.
Harry 45:41
So I see people on Twitter talking about this all the time that it’s like, oh, well, we use VWAP, from the prior days resistance to talk tick this, you know, I see that all the time on Twitter. And that’s something that you kind of saw,
Steven Dux 45:56
I mean, in a lot of people are a little bit obsessed with the indicators, you know, I mean, it’s, if you think about the market, or you know, from the very outset fundamental, as a very base level. For first of all, people are placing trades. And, you know, when the chart moves, it’s what people are, people are placing trades behind the computer. And it’s all about what they’re thinking how to really counter them social service makes money from the buyers, and they have to notice the psychology behind the buyers, and indicators like RSI or VWAP, they don’t have any, say direct relationship with, you know, what, how much how many shares do you despair by and you forget, you think get caught back? What do you what’s the level they’re likely to sell? I mean, in those indicators doesn’t have the direct relation compared to those psychologies. So the only thing indicators that I use volume, typically volume dictates how many people are buying and selling. And if you are using, you know, the average statistics, 90 people 90% People are going along, then can kind of calculate Okay, well, at this level, there’s, you know, this amount, amount of back orders. And when it hits through this resistance, the buyers will not be the bag holders right here because this candle is volume, it’s there’s not enough buyers. And when there’s $10 versus eight buyers, the bag holders, of course going to win. So I’m not sure sir, am likely to take advantage of, you know, the new buyers are likely to lose. That’s how resistance work. So it’s yeah, that’s the those are the only key indicators that I use. And also one thing I want to also track is I think it just my assumption, so into like four different multi day runners, and of course, stalking involves reputations and hedge funds. But at from my assumption is at least smart money. Whenever you’re buying, let’s say a low flow, you do not want to exceed 100% You do want to buy the buy up the entire flow. Sometimes he does happen. But AWX Yeah. Aw. Yeah. But you know, as smart money, you do not want to buy up the entire flow, because when you’re ever you’re selling, you’re just playing yourself because you’re selling it to yourself. So you know, as far as money, you want to sell it to other people, right, and you make it out, you know, make the money while the stock is going up. So typically do not want to exceed 30% or 50% of the float because he wants to leave the rest of the float to other titan buyers for you to make money from. So then, of the specifics of psychology applies into the multi day runner, then there’s going to be a limitation of how many dollar can be traded in different market caps. So smart money can only apply 30% of the flow and there’s you know, retail money going in and you can kind of once you look at different Motiti runners you can calculate Okay, well between 100 million or two 500 million market cap and when a stock goes 40% parabolic when it consolidates this is maximum amount and can be traded in a consolidation once it trades in in a certain amount. And retail runs out of money. So no, no more money can be support, support the bid, or no more money can be adding to the ticker for the ticket to golf even more then that’s where the chart exalts and that’s where you short and take your profit.
Do You Ever Read the Filings for Patterns?
Harry 49:57
So I just have just one more question. real quick about filings SEC filings, because we’ve never really talked about that yet. And do you ever kind of like, I know you’re more of like kind of a pattern guy, but do you ever read the filings and kind of put on your tinfoil hat and say, Okay, maybe they’re trying to pump this up to do an offering or okay, maybe they’re trying to pump this to get to these warrants and then like maybe look to short there or are you just pure pattern volume don’t care what’s going on don’t care about offering or whatever, I’m just going to focus on what I know.
Steven Dux 50:32
I have looked actually looked into those filings before it actually affect effect my obviously judgment when I’m whenever I’m trading, because I think there’s few times or there’s words around for and there’s consolidation. So for, and people think the world is going off and selling it to stop for daughter and other people packed in shorting for in excess stock gaps up to 12. So I think it’s all about risk management and, you know, focus on what you know, because there’s a lot of stuff that you don’t know and you can potentially, you know, you can even try you can try anything to in the market. You know, sometimes you’re lucky to make money, so just try what you know. And you will make
Joe 51:19
Then make a killing.
Steven Dux 51:20
killing. Yeah.
Joe 51:23
All right, man. So to wrap up here, we want to talk about some regular guy questions. These have nothing to do with trading at all. It’s just us getting to know Steven ducks man, just to show how much of a regular guy he is outside of his genius level mindset. So number one, what was your first job?
Steven Dux 51:48
First job? I worked at a dorm I think it was I think it was a midnight shift. So it’s between 12am to like 7am to check people in the door. Yeah. Oh $6 An hour.
Joe 52:09
He’s come a long way. So what was your favorite hobby? What is your favorite hobby outside of trading?
Steven Dux 52:16
Your hobby? I play tennis. I play a little bit of basketball play. A lot of video games. League of Legends. CounterStrike. You name it.
Joe 52:31
Awesome. So what are you reading any books? What’s your favorite books lately?
Steven Dux 52:38
I don’t really read the trading related books.
Joe 52:42
And it’s like our lowest answered question. Reading related, I just mean any books. What’s your favorite?
Steven Dux 52:49
hmm recently, I’m reading cas9 genetic editing, gene editing. Yeah. Wow. And now I like to read quantum physics. The there’s one thing that I like, I like to read that I will say semi connected to stock is to call it the psychology of economic behavior. It’s not a book. It’s it’s a genre. But it basically talks about the psychology how people use or use their money.
Joe 53:32
So what’s your favorite TV show? What do you like to watch?
Steven Dux 53:38
I do not watch the TV. I watch a lot of anime. Watch Naruto.
Alex 53:48
Dragonball Z.
Steven Dux 53:50
No. Watch a little bit Dragonball Z but the I watch Dragonball Z. We got to watch the other anime. Too many.
Alex 54:06
What’s your favorite foods eat?
Steven Dux 54:08
Favorite food? I mean, I like all kinds of food. I’m not really picky. It just I can handle blue cheese.
Joe 54:22
what’s the most memorable vacation you’ve taken?
Steven Dux 54:26
Think there’s a girl that was drowning? Oh, I went down trying to save her and I almost died.
Alex 54:42
The story I heard Maltese.
Steven Dux 54:45
Yeah, trying trying to trying to swim back. Yeah, it was I was cutting it close but wow. No, I wasn’t thinking I had you know, had to
Harry 54:56
NO! Did she make it
Joe 55:00
That’s good it was that oh my god. Well, I think that’s pretty much that’s a great wrap right that’s awesome. Thanks for coming. I’ll see you. Awesome. Thank you so much for being here, man.
Steven Dux 55:43
I gotta go eat so yeah. Thanks for Thanks for having me.
Alex 55:46
Thanks for coming on. No blue cheese!