Inside Wall Street

"I use blue and white candles on my graphs instead of red and green because red triggers a different reaction in the brain which affects my trading."

"There is no consistency in your trading if there is no consistency in your brain."

"Markets take the elevator up and the stairs down."

Rodrigo Cerda speaks with Chris Capre a former broker on Wall Street, former hedge fund trader, and founder of 2ndSkies Trading, Lead Educator at Benzinga Options Trading School about trading the markets with a consistent profit.

Guest:

Chris Capre

CEO & Head Trader at 2nd Skies Trading

Lead Instructor at Benzinga Options Trading School

Host:

Rodrigo Cerda

Benzinga Pro Product Expert

Transcript:

All right. Welcome ladies and gentlemen, to another episode of inside wall street today with us chief educator at Benzinga option school. Chris Capri is going to be here with us today. How are you doing Chris? Very good news. I'm doing good, man. I'm doing good. There's so much here to cover a lot of interesting topics here and facts that you seem to be as someone that has an interesting background.

 Let's just start from the beginning here. I'd say Chris, how did you get into trading. ?

So 2000, 2001, I was a full-time yoga teacher. And so I wasn't on any necessarily particular career path. At that time, I had graduated at the university with a bachelor's in philosophy, and I was finishing up my undergrad in neuroscience while going for my masters in philosophy.

And I decided to take a break from a kind of like my dual degrees and a. Went to California to spend some time out there and just work on some personal things in my life that I felt like needed to go in a different direction. And so I started teaching yoga meditation after I got into it for about a year.

And  you realize very quickly that okay, unless I go down a very specific career path in yoga, this is not going to bring me the financial means. To really do the things that I want to do in life. And it's not that I want them like 10 Ferrari's or anything like that. It's more of I realize I have to build up a financial portfolio to really achieve and accomplish.

Do some of the things I want to do in my life at that time. So I started getting into just trading stocks and mutual funds at the very beginning. This is early 2000, 2001 before the.com bubble.  In the process I had started working with a client and he was a radiologist who had retired early.

He sold technology or radiology technology to Kodak.  Millions of dollars. Like he was a DECA millionaire several times over and as I was working with him one day, he comes up to me and he's Hey, I was reading this book and I've never had this before, but I had this strange intuition that you need to read this book.

I have a feeling that you need to read this book. This is something that you need to do, but in the book was about currency. At that time. And it was a story about an American who was an athlete and he doesn't know what to do after college very much like me. And he ended up getting a job, working for an outfit in Japan, trading currencies that led to some incredible stories and experiences in his life.

And I read the book and I felt oh yeah, I definitely want to try this out. And so keep in mind, this is like early two thousands, 2001, 2002, 2003. This is the early part of that decade. And so very little. Websites on the planet about trading FX or stocks or options or anything like that. And so I had to just teach myself.

So I got a demo account back then and I treated the moment I opened up the demo upon account and the platform I just instantly lit up. And I knew, I just felt like this made sense to me. There was just something about the platform like, Hey, I understand the language. I feel like I can read the charts.

I feel like whatever was in this platform made sense to me. It just clicked instantly. And a month later I went With a $3,000 account. And by six months later, that account was $83,000. And so I had just a wild started to trading at that time. And I felt yeah whatever this is my path to achieving the financial means that I want to.

That's interesting. And well, Chris, you've been trading for about like 20 years around, so are there, right? I think it's like 21 years plus now at this point it's hard to keep track. So yeah. So take us to the beginning of that journey and   the first couple of. You know how things were and  I don't know what our, we were on, like in 20, 22.

So that was like in the two thousands. So is that like by the bubble, the.com bubble, did you start winding up right before the bubble and then in some sense, the bubble happening that was like 2001 that everything started to explode at that point. Yeah. And that was the tech bubble and the.com bubble.

And in some sense, it was a tough lesson because I had known a lot of people that were heavily invested in stocks and were losing money, hand over fist when the bubble split. But it was also a good experience because you're talking the first few years of my trading and I didn't learn the. There's a lot of traders that have come in the last few years that have been told by YouTube burrs or other people like Dave Portnoy, that stocks always go up and I didn't get that education right off the bat.

The first year I was in the markets, the stock sold off and they sold off for over a year.  I learned very early on that stocks. Don't always go up that stocks go down and they can go down very  you could say impulsively or violently or intensely. And that kind of taught me the expression, that there's a very common expression in the markets, which is the markets take the stairs up and they take the elevator down.

And  I learned very early on that markets have both bull and bear markets. I didn't come into the markets with the idea that stocks always go up. And I think that's given me a massive advantage because when the markets do go down, I feel prepared to be able to trade to the bear side. And so it wasn't that just stocks went down at that time shortly after in the FX.

The Eurodollar, which had been on a several year bull trend started to sell off. And so again, it was another indication that markets don't always go in one direction. They go in both directions. And that was an advantage of trading currencies, because currencies do go in both directions where stocks, while traditionally they have an upward bias stocks do have periods where they go down and sometimes those periods can be quite long.

 Yeah, that was the early 2000, the first few years, the two thousands. And it was. A great experience for me to get that education, to be able to trade both directions and learn that markets can move both directions at any time. Yeah. And then in shortly right there, 2004 FX broker for FXCM working on wall street.

  Take us through a little bit of that experience there for the folks considering this is a very interesting time for trading comparing to where we are now in this market with the new meme stocks and whole different type of things we're seeing here. Yeah. This is a great question. So it's late 2003.

I've had a pretty amazing bull run on my FX account. I turned 3080 $3,000 in a period of six months. And that was just hitting everything like 70, 80 plus percent accurate trading. My first trade. Totally. Overleveraged had no idea about leverage, had no idea about risk management. I had risked a standard wat in FX, which is a thousand dollars for every a hundred pips.

And I did that on a $3,000. And I was literally risking about a hundred pips on the trade. So if I lost it, I lost 33% of my account in one shot. Look at my first year, it was 124 PIP winners. So my $3,000 account by day at the end of day, one was 4,200. And that just kicked off a winning streak for me that just kept going and going.

So you're talking like over almost a 30 X return on the account. So I get to $83,000 and I start to do the math and I'm thinking, Hey, if this continues at this rate, this account is going to be $160,000 in a. And by the end of next year, it's going to be like about three, $400,000, because that should have been in the sign.

If I had experienced that should have been the sign that I need to pump the brakes and maybe realize, I don't know much about Marcus as I think I'd. And so the next day I start looking for Lamborghini's and cars to buy and things like that, because I felt like, Hey, I'm going to have no problem paying cash for these in a matter of.

So I started checking out cars to buy, walk down, Venice, look to all the dealerships. And that night I placed the trade. Totally. Overleveraged very poor risk management and I lost $25,000 in a matter of minutes. So imagine you take six months to build up three to $83,000, and then you lose $25,000 in a matter of minutes.

And that just created kind of a shock and a pullback in my performance. And pretty soon I'm down like $50,000. And so that made me realize, okay, I don't know as much about Marcus as I think I do, and I need to get training, but there's no training at that time. This is like early two or three now, early oh four.

It was just no training at that time. And I'd saw an ad in the paper for a looking for a brokers, FX brokers, because FX was taking off at that time. FX was blowing through the roof and it was a job at FXCM and I interviewed it and I had no experience, no business class. But I felt like I just gave a really good interview.

And the next day they called me and they said, we want to hire you. We're going to fly you out to New York. You're going to work on wall street. We're going to pay for travel. We're going to pay for your housing. We're going to pay for all this come work for us. And so I took the job and that just started this totally different phase in my career from just being a trader who didn't know anything to all of a sudden becoming an FX broker on wall street and keep in mind at that time in oh four Forex was the.

Kind of hottest market. At that time you had volatility, you had movements, you had differentials in yields. They were beating stocks, hand over fist at that time, stocks are great up until the.com, but then after the.com, a lot of people lost taste and flavor with the stock market, for sure, because they just lost so much in a short period of time.

So people were looking for other markets to get into, and FX was only new FX was only available to the retail trading world in late 98. So still as new market stocks had been around forever, but then people were exhaust because they lost a lot of money in the.com. So the money was moving into effects of that.

And you're talking, trillions of dollars is moving in the FX market per day. Yeah. And it totally makes sense that people move to other things whenever that happens. More recently we haven't really had at least  I'm a newer trader I've been trading for about three years.

So I really have never seen a year of  a bear market as they call it, like back in those days. So it's just, it seems like it can't happen, but then it's  real right. It can happen. I think that's common for the human condition. That, when something doesn't happen for a while, they tend to think that things won't happen until they do.

Like probably before COVID nobody had ever thought in our lifetime I'm almost 50. And so I had never thought that I would see a global pandemic through some biological health scare. That was something you saw in movies, but things do happen. And I think that's the only differences in markets is that they happen probably when people least expect it.

And we've had a great bull market before COVID we had a great bull market for years. That was pretty uninterrupted with only minor 10, 20% pullbacks. So when COVID hit, it was something new. But since COVID for two years after COVID, the markets just went in one direction that was easy mode.

So it's very, if you haven't had. And the markets, then you don't really see all the different conditions that can happen. And I've seen a lot of conditions I traded through the September nine 11, I traded through the.com bust. I had actually traded through the London terrorist bombings, which was a learning experience that if I hadn't had that, I wouldn't have different ideas about how to relate to certain events like that in the future experience matters.

All right. So you went through that at a effects. So you start up there and then in 2006, you become a funded trader for the JNF fund and you also train traders and students there. So how was that experience? While I was a broker on for FXCM, I D I I expanded my duties massively there because I was just super hungry.

I had never had a job in finance before, and I realized that working for a brokerage was a massive operation. To see the market from the inside out. So I tried to take on as much work as possible. I literally worked like 80 to a hundred hour weeks every week for two years. And literally only took one vacation that entire two years.

So I use it as an opportunity. And throughout that process, I got opportunities to teach classes to the other brokers, but then also to the clients as well. And that just started to expand. I didn't apply for a teaching job with them, but they had me teach class. In that process of going through these workshops and expos all over the country, I had run into this hedge fund outfit, several times they were an FX hedge fund at that.

And we just run into each other and talked, and it was had some very cordial conversations. At the time they wanted me to come over to them after talking with them. And I wasn't interested, I liked my brokerage job, but in 2006 window opened door. I was like, you know what, maybe this is a good time to take that opportunity.

So I had. Join them as a trader. And I was a funded trader for them. I got to book like literally within the first week, I got my own book within the first week. And in the process of going through their program, their trainer trading program, I had been offered, Hey, you seem pretty good at this.

Do you want to teach classes to the younger students as well? And I said, sure, I'd be happy to. And so that. Was the next extension of my teaching and trading career, trade the book for them, and then also teach the newer members. And so that was a year. And that was a great experience because there, my only focus was trading and teaching.

I didn't have any sort of managerial responsibilities or team member responsibilities per se. It was just like, look, trademark. And then teach the new members and that's it. And it was great on many aspects to be surrounded by all these traders and talking trade ideas all day, talking markets all day, sharing ideas all day.

That's all we did. But after a year of that, again, another window open for me where now I've been in the institutional war for three years and I realized. You know what? I have my own style of trading that doesn't necessarily fit with everybody. And I also have my own style of teaching that doesn't necessarily fit with everybody.

And so I said, you know what? I think it's time for me to go on my own in terms of my own trading and my own teaching. And so in 2007, I opened up second skies and that was mostly in the beginning. It was just the people who were in the hedge fund training program that wanted to keep working with me when I left.

And all I did back then was just a weekly webinar, talked about the markets, gave trade ideas. Answer questions and that was it. And here it is 15 years later. And we've blown up into a very well-known respected brand in the industry and someone that's providing quality education and train many trails to become profitable.

Like some of them funded by prop firms. Some of them been funded by investors. Many of them are trading on their own. Now that was the hedge fund was great, but I also realized maybe I need some time on my own to develop my own views and own ideas and develop my own methodologies to.

Take things to the next level. Walk us through a normal day now of your in the, into option school with the members, all that stuff, walk us through a normal day in the school. My normal Monday through Friday trading day is I wake about 4 35 o'clock and I have to get up early because I'm on the west coast.

So the markets for me opened up at six 30. That means I have to be fully prepared and ready before I even get to the market open. I am usually doing research on the markets, looking at positioning and options. What are the changes in the open interest, which has posted generally around midnight.

So OBRA, that's the option pricing authority. There. They're the ones who collect all the data on the option, positioning and then update. And it's around midnight Eastern. So when I wake up in the morning, I can see that adjustment and positioning and see, Hey, where's the changes in positions and options in the markets going on from there after collating that data.

Then I start to look at what's going on in Asia. What happened in Europe to see how that's influencing the current price action, the model. And then I start making ideas as to how do I want to trade the day? Is it going to be more or less volatile today? What are key support and resistance levels?

What do I want to trade on the day after I've done all that preparation, then I have to teach a class with my second sky's members, but then at 7:00 AM Pacific, I am now treat teaching the members in the Benzing option school, which means that I will have to have already made my first day. Before I actually start teaching the Benzing option school.

So that's why I have to get up early. Cause I have to do all this preparatory work to have all my trades ready so that they can be like executed before I even start teaching. Cause I don't like to be making trading decisions to stop the teaching, to make trading decisions. I need all those to be done before I start teaching.

So I'm just focusing on teaching. And so Monday through Thursday, 7:00 AM to 9:00 AM Pacific I'm teaching the Benzing options school and we do lessons on that day. We cover different lessons in the curriculum and we do a lot of. And a lot of examples in the markets and it's really about teaching members, a few things, one how to make less bad trades and bad mistakes.

Because if you aren't trained, you're going to make a lot of bad decisions. You're gonna make a lot of bad mistakes just because simply you don't know nothing to do with IQ, nothing to. It just, you're not experienced, you don't have the training. And so that's my first job is to teach them the skills to make money, train, to be a professional trader.

After I've taught them the skills and the core lessons, then I have to teach them how to make less bad mistakes. And then I can start teaching them how to make better. And so that's our morning until 9:00 AM Pacific. My time after that, then I go back to trading. I take any new trades that set up there.

I have my break for breakfast, basically, whatever I need to do at home. But then I go back to trading. I'm analyzing the market in real time. And then at noon, which is one hour before the market closes at 1:00 PM here in California and in the west. Is that I have to make more of my trades by that new lesson, because a new one I'm teaching again in the Benzinga options school, and we're doing open Q and a we're doing live market analysis for them.

We analyze student trade ideas in real time. So if they have a trade idea, Hey, I want to be long calls or short calls at this strike in this expiring. We analyze all those trades. And it's a great thing for me to be doing because. I don't want to be spending eight hours a day, just hitting keys to generate income.

If I do that, it means I'm a human ATM machine and I don't want my life to be a human ATM machine and all about money. And so by taking breaks where I'm like trading for a few hours and then I'm teaching for a few. It allows my brain to use a different set of skills. And it also allows me to train the next generation of traders and to have a positive impact and turn traders who are not profitable into profitable traders.

It's incredibly rewarding. It's always rewarding to make a good trade and to hit a perfect trade. Like the perfect timing you get in you're bullish and in the moment you get in within seconds, it launches higher. And then you get out when the momentum ends, that feels amazing. It feels not just for the money that you made the no, that over 20 years you've been building a skill that allows you to throw that perfect pass. Like Tom Brady, that's what it feels like to me, but I don't want to be doing that all day. I have multiple desires and interests and to be able to take this knowledge and help the next generation make less mistakes than I did and lose less money on those mistakes than I did makes me feel like I'm doing something good.

And so to see them go from struggling traders to competent traitors, to profitable traders. That's a very rewarding aspect of the journey. And I do this because when I first started trading there was nobody, there was no online classes. There was no Monday through Friday streams, nobody was teaching this material about options.

Back then nobody was teaching this material about price section back then nobody was teaching this material about risk management back then. And the only way to get this training was to pay five, $10,000 in a workshop. That was maybe once or twice a year or something like that. And so I didn't have that.

And I had to go through a lot of painful. To get to where I am today. And so to be able to save people time and money doing that, it's an incredible joy for me during your entire period in the markets, what would you say is the craziest thing you've seen in the markets? Flash crash. And I would say top three are flash crash.

 The COVID crisis was unique because even Warren buffet has been around forever and in his long trading career, which is like seven decades old, maybe even eight, he himself has never traded through a global pandemic. Only people that have. Older than born Warren buffet had traded through a global pandemic.

So there's no playbook or no experience in the markets for that. At that time, nobody had experienced trading through a global pandemic. So that was unique. And it also really highlighted the impact of options. Because if you look at actually, when the market started selling off in the COVID crisis, the day, it was like right after the monthly op ex.

And that's because traders had an immense amount of call positions and all of these positions on wound in the market. And then traders flip from net long calls to net long puts, which exacerbated the downside. If you also look at the bottom in the COVID crisis, it was after the March OPEX. So traders, particularly BlackRock, and all these others had unwind these massive put positions, which allow the market to rally.

So it was unique because it was a global pandemic and it was unique because. The timing of it really showed how powerful options are. So that was a powerful experience. The London terrorist bombing was obviously an incredibly tragic event. Nobody ever wishes for that. It was incredibly tragic.

Like the art, everybody on the desk, our first reactions were just like a heart sink. When we heard about the new. But we also had books we had our own accounts that we had to manage and we had to trade them like, Hey, how do we avoid losses and make money in this? And so we all kicked into gear, me being one of the younger ones on the desk, my first thought was, okay, there's a terrorist incident in the UK money is going to leave the UK and go to safe Haven.

So what did I do? I sold the pound, which was the obvious play. The obvious play was sell the pound. That should have been the first thought on every trader's mind, but then people who are a little bit more experienced are like, which currency is the pound going to depreciate? The most, and they figured Japanese yen and Swiss Frank, because there's a safe Haven currencies.

So they made more money because they picked currencies that sold off even more. And the most experienced on the desperate, like pounds is going to sell off against everything. So they sold the entire basket and they made a killing on that day because they had the experience of realizing, Hey, Howden's going to lose against everything.

Let's sell it all. And so that taught me a very valuable experience of how experience matters in the market. We all had certain skill levels that were relatively equal, but some of us had more experience than others to translate the event into better trading ideas. And so that was very powerful. And then the flash crash, the S and P flash crash was that was what May 6th, 2010.

I believe the S and P 500 dropped over a hundred points in a matter of two hours, people have been freaking out because the S and P has sold off 45 points from the. Imagine that happening and that's over a period of what, six weeks, seven weeks since the, this year opened, imagine the S and P 500 doing double that in two hours.

Like what would that have done to people's portfolio?  I have been exposed to events like this literally once every two years for the last 20 years. And that experience has been valuable to me. All of them, immense learning experiences, you're into bro science. So how do you apply this to trade-in?

I, you must apply this to trading somehow. Tell us about this passion for neuroscience. Yeah, it started. So in the early or mid nineties, I was finishing my undergrad in philosophy and I have always from very early on, been curious. Why do I think the way I do, what is it about my mind that makes me think the way I do, what is it about my brain that makes me think the way I do?

How could I improve? Memory, how could I improve learning? How could I improve mental performance? So this question has always been in my mind since the nineties and to that was my focus in neuroscience. At that time, my focus in neuroscience was human learning and memory that hasn't stopped over the years.

But I recently saw a podcast several years ago on neuro by a neuroscientist and it rekindled this interest. And then it had always been there, but it the fire again. And  after reading more and more books on this and really kicking up the neuroscience learning I've decided that I'm going to graduate school to get my master's and PhD in neurobiology.

And so it is now here we are, 2022, the technology is way better than it was 25 years ago, and so we're able to understand more about how the brain affects performance. Sleep making decisions, managing emotions memorizing data and the charts patterns in the price action.

 How to manage these emotions, how to manage these thoughts. What, how does sleep affect our performance? How does caffeine affect our biological performance? We know a lot more. Then we did when I was going to school, hundreds of times more. And so for me to be able to study how the brain affects performance is important because that's my main tool.

I'm not an athlete, swinging a baseball bat. I'm not a pitcher throwing a ball. I'm not a quarterback throwing a football. It's not my brain and my body. My main tool is my brain. My body is a tool, but not to the same degree as my brain in this. So if my brain is my most important tool, then I need to sharpen that and put that in a position to where it's going to be function.

The most optimal way. And so that comes from little things. If you notice my charts do not have red and green candles, they're blue and white. Why is that? Because the color red can trigger stronger neurological responses in the brain than blue or white, which is much more neutral. And so instead of triggering.

Fear response. When I see that big red candle, I don't have the same neurological response because it doesn't trigger that my brain in the same way. So I do everything like I do everything I can to optimize my brain, to make sure that everything I do in trading is optimized from the sleep schedule to the learning schedule.

 Concentrate. Very important. You have to concentrate to be able to trade well, what is one of the main factors that allows you to concentrate besides attention? What's the main biological thing that allows you to concentrate. We actually need a chemical. You need a neurotransmitter called acetylcholine, which allows you to focus and concentrate, but our brains don't have unlimited stores of that.

It takes time to produce stores of this chemical that allow us to concentrate. And so after about an hour and a half or two hours, Those stores tend to get depleted. So I know once I start hitting that hour and a half, two hour mark, it's probably good if I take a break, because then that gives my brain time to build up those stores again.

So these are all the little details that are available now that weren't available 25 years ago. And so for me, I try and leverage how the brain functions most optimal. How it learns, how remembers, how it concentrates, how does it pay attention? How do I direct my focus? How do I use this brain in the best possible way so that I can maximize my opportunities?

So hopefully one day in the next year or two, I'll write a book on optimal trading performance and using neuroscience to. Empower your trading to the next level. What what would you say is like a tip you can leave them with right. Something you can leave the folks here with not just the current students that are listening to this, but to the other folks that are listening to this in some other podcasts place.

Yeah. Over 20 something years I've seen a lot of traders come and go, and I've seen a lot of. Students come and go. And everybody seems to spend a lot of time looking for the strategy, thinking that if they have the strategy that makes money, that they will make money and I've seen that attempt or that approach fail, not just thousands, but maybe millions of times over.

And it forced me to look. What two traders really need to make money trading consistently, and I've boiled it down to four skills. So all traders need something that helps them make buying and selling decisions. That's the strategy, but that's that by itself is not sufficient to make money trading because you also need risk management.

That's the second skill you'll need to make money trading. If you have poor risk management and a good strategy, you will lose more money on your losses and you'll win less money on your. And so risk management either leverages the mathematics for you or against you. Bad risk management leverages the math against you.

Good risk management leverages the math for you. But those two alone are not enough to make money trading because you could have a good strategy and good risk man. But what, if you have a bad mindset, what if you have a hard time pulling the trigger when your set up comes? Or what if you have FOMO or what if you have confirmation bias or what if your emotions derail you from making a good trading decision?

So you need mindset as a skill to make money trading, but then you need one more skill. And if you have all four of these. You will make money trading. And that last skill is the analytical skills. And I don't mean the ability to look at the charts and analyze that. You have to be able to look at the data on your performance on a regular basis.

Look at all your trades, see where your strengths and weaknesses, which strategies you over-perform and underperform. Where are you extracting alpha consistently. And where are you leaking alpha consistently. If you're able to analyze your own data, then you can augment your weaknesses and you can further galvanize your stress.

And leverage them even further. And so over 21 years, I've learned that it's not the strategy by itself, and it's not rich manager by itself, and it's not mindset by itself. It's not analytical skills. It's all four of those. And if a trader can build all four of those, they will pull money out of the markets consist of.

But if they're missing any one of those, they will struggle to consistently pull money out of the markets. So somebody's goal should always be to build those four pillars. If they build those four pillars, they will pull money out of the markets. But if we're missing any one of those, they will never have consistency because there's no consistency in your trading, unless there is consistency in your mind.

Super, super important. Thanks a lot, Matt, for being here with us today. I appreciate your time. I know you're busy and I'll, we'll see you in the school. It was a pleasure.

" I had professors that were literally Nobel prize winners and I think Mario Gabelli is probably the smartest person I've ever met. "

"I've seen people get destroyed emotionally by trading. I've seen Steve Cohen make a $9 million profit In 5 minutes, both extremes, from the guy who gets actually crushed to the guy to become a billionaire and buy the New York Mets."

"I have traded through the .com bubble, 9/11, Commodities bubble the housing bubble and we've had the cannabis stock bubble a few years ago and then March 2020 Covid"

"What fascinates me about the markets is you see these historical things repeat themselves"

What does it take to trade with the likes of legendary Wall Street Traders Steve Cohen and Mario Gabelli?

Do you need to be a good chess player? Be great at poker? Have nerves of steel? Be smarter than Nobel Prize-Winning Professors?

In this episode, we take you inside famous hedge-funds like Steve Cohen's S.A.C Capital which the TV series Billions was based on, or Mario Gabelli's GAMCO Investors where 5 minutes can make you or break you.

Rodrigo Cerda speaks with Mark Putrino, former hedge-fund manager, Chief Market Technician, and Lead Educator at Benzinga Trading School about the rules of the game.

Guest:

Mark Putrino

Chief Market Technician, and Lead Educator at Benzinga Trading School

Host:

Rodrigo Cerda

Benzinga Pro Product Expert

Transcript:

R: Welcome to today's podcast Inside Wall Street, Mark. Putrino. How are you doing, man?

M:I'm doing great. Rodrigo. Thank you. Thanks for having me.

R: I know that you've had some experience trading in some really big funds with Steve Cohen and Mario Gabelli. Those are some legendary investors.

M: Mario Gabelli. He hired me. I met him when I was in business school. I was at the University of New York business school in the city. I'm in Greenwich village, but anyway, I met Mario make a long story short. He hired me when there was an opening on the trading desk and I went in there and at the time I don't this was a while ago. I don't remember how. Mario managed back then it was like maybe three to $5 billion. Now I think he manages an excess 50 billion, maybe like I had professors that were literally Nobel prize winners. Literally  and I think like Gabelli is probably like the smartest person I've ever met. But anyway, I was fortunate enough that I had a spot there. He had a broker dealer and I went in there and I was a market. Making markets and penny stocks and some of the stocks that we were trading after a few years there, I decided to move basically to make more money. And I went over and that's when I joined Steve Cohen at SAC, which whenever I tell people I worked at SAC, the question is always, oh, is Billions realistic or is Billions real ? I haven't seen Billions, but I am making a promise to people that I will watch. Now when I was there, that's when I got my first exposure to charting and people looking at charts and technicals Gabelli was more of a traditional value manager. He's not really looking at charts. He's more of the Graham and Dodd school of looking at price, earnings, ratios, that kind of things. But when I was at SAC, a lot of the people that I saw around. We're really into trading off the charts. And that's where I really got to start to learn, to teach myself about it.

R:What actually got you into trading the first time? How did you get into it? 

M: I grew up we weren't like poor or starving or anything like that, but I grew up pretty poor in a really wealthy town in Greenwich county. And when I was a kid I used to feel insecure about it. And I remember I used to ride my bike around or whatever, and I would look at all these big mansions and stuff. And I would think what do these people do that can make them live in these big mansions and these biggest states and everything. So that kind of brought me into wall street. Then once I got to wall street, it was very different than I thought it would be. But what I find fascinating about. Is at this point it's not really about money because I've learned that you can have a lot of money and still be a miserable person or vice versa have a little bit of money or no money and still be very nice person. But anyway, what fascinates me about the markets is one is I'm really into history and you see these historical things repeat themselves. In the market. Like for example, people ask me like, all right how do you know when the market is at a top? And I tell people the market is at a top. When people start saying this time, it's different, right? This time is different. Now think about this, right? In the 1920s in the booming twenties or the roaring twenties, the market was really ripping higher. There was this new terminology that got developed, where analysts talked about old era stocks and new era stock. People were saying this time it's different. The old stocks like say. Whatever United saddle maker or United or shoe maker, that's all. That's all. That's. We do that with traditional valuation. These new stocks are different. This time is different. They're new. It could have been, I don't know what was going on in the twenties. Maybe telephone or maybe radio. So what happened? Sure enough, the market collapses and great depression. Now you fast forward into the internet bubble. And that's right when I came in the late nineties and people started saying, this time is different. You have new economy stocks and old economy stocks. And if people that are listening to me, I've been in the markets and can remember them. I'm sure they will. And the whole thing was   like Minnesota manufacturer mining, that's an old economy stock we use traditional valuations for that, but now we have pets dot. The same rules don't apply now it's different. We can  instead of valuing a company on how much money they make, we can value company based on how many clicks are on their website. This time it's different, sure enough, the market  blew up we've over the past couple of months, and this is one of the things that led me in the class. I've seen a couple articles where people say this time it's different and I've pointed them out in class. Like one particular article said that the rules are being rewritten in the VIX index for VIX trading. Now that was the article, right? The rules are being rewritten.When you say the rules are being rewritten, what are you saying? You're saying this time it's different. So this particular writer or analyst noted that. Even though the market was rallying, the VIX index was going higher. The VIX index is, it is what we call an implied volatility index of options. The easiest way to look at it is pretend it's insurance. A portfolio manager buys options to protect their portfolio. If a portfolio manager thinks the portfolio is going to go down, they may go and buy options as insurance. They would buy options or contracts that go up in value. If the portfolio goes down, it's a hedge. All right. So whenever we have these big blowups, like for instance, in the COVID crash and  March of 20, the VIX index, the index, which measures essentially how much managers are willing to pay for that in short insurance goes sky. Because managers are panicking, they think the market is going to drop even farther. So they don't mind paying higher prices for insurance. Just  I don't know if you live somewhere where there was where there was going to be a fire.  You wouldn't mind paying more for insurance, traditionally analysts have called this VIX index, the fair index, but here's the thing. And here's where this analysis was wrong. And here's why it's not different. Even though people think it is in a moment of euphoria where markets are really booming. All right. And portfolio managers will pay higher premiums to get into those positions. If a market's is  really taken off and a portfolio manager wants to perhaps buy some puts to lock in their gains, they're going to pay willing to pay a higher premium. So that VIX index is going to go up.

R:What would you say was one of the craziest things you saw there, like when you were working there, just things that you were like, wow, that just blew your mind off. Like when you were in the institutional world, things that you were like, wow, I didn't know. That's that work that way?

M:Oh man. I can tell you so many stories. There's a lot of stories I can't tell you until. Hanging out in Las Vegas together having a few beers. I I've seen some crazy stuff go on. I've seen people get destroyed emotionally by trading. I worked with this portfolio manager, he made all these, he he was managing probably a couple hundred million dollars at this particular firm that I worked at. He made all these bad decisions and. He got destroyed. He got, he just got wiped out. All the clients took the money out. So anyway, the guy disappears for three or four days and no one knows where he is.  We contact the police and whatever  cause we call all-knowing an honest answer turns out that he. Started having a case of hiccups. Now, I don't know. I don't want to make it sound funny, 'cause it's a serious illness, but he couldn't stop his hiccupping and he actually ended up in the hospital.  I've seen people like destroyed like that. I've seen other times where, you know, one day where I was at SAC. SAC has all these different groups. And I remember one time where someone came in and they showed Steve, Hey man, look at this gold chart, Steve, back then, I he traded everything whatever market there was an opportunity, And it's  it's like just insanity. And then when it was over, Steve said "Hey guys, I'm going to go get lunch. I'll be back in about 20 minutes." And when he left someone was like, "dude, he just made a $9 million. In five minutes, " of course he's trading big money in that five minutes, those of insanity, he was buying and buying it got up and then selling. I guess that's both extreme from the guy who gets actually crushed to the guy. To become a billionaire and buy the New York Mets. I've seen some shady things involved, which I've obviously never been involved with, but I know of a particular firm of a particular firm. Now keep in mind, this is a long time know. So dont try to figure out who it is. So when you're on what they call the buy side of wall street, the buy side is the side where you have to pay commission to execute a trade, just like a retail. They have to pay a commission to execute a trade. They have to go through a broker. That's the law. That's just how it works. If you want to trade on exchange, you got to go through a broker. So these hedge funds or these big institutional money managers pay out a lot of commissions, right? Because they're throwing around tens of millions of dollars. And brokers want that business because if they execute the trades, they get the commissions. So there have been cases and I'm sure not just on wall street, but in other businesses where there are kickbacks and people do shady things  Hey, if you send me X amount of commissions, all give you this illegal kickback, it happens in other businesses too. So anyway, this one particular. This one trader was wrong. Wall, this business to one particular broker turns out that they proved that there was shady stuff going on, but here's the thing, Rodrigo, right? In a perfect world. What should that firm have done? The firms should have gone to the sec and said, we have illegal behavior going on here. We need to address it. What would happen? It would be in the news that from all their other clients would be like, oh, we're getting the hell out. So the firm would go under, everyone would lose their jobs. So what has. They left the manager resigned to pursue personal interests and say, oh, we wish them best of luck. And as a rule, I think most traders are pretty, pretty ethical, but there are certainly some shady people out there. So that was a pretty crazy.

R:Then you were trading right after the.com bubble. Take us back to those days. As the bubble was forming, where were you, what were you doing? Were you trading at a desk or what was going on? 

M: That's right after I left SAC. So I was the head of trading at that fund down in New York city. It's hard for younger people to picture now, but it's like all of a sudden we had email and email never existed before. And I literally remember. When I was in business school, the first time I ever got on the internet did the assignment was like, get on the internet and open an account. So I remember going down to the computer lab at NYU. What the hell is this? And there was someone next to me like, Hey, do you know how to get on the internet? And they were like, oh yeah, sure, blah, blah, blah, blah, blah. It was like the roaring twenties, I guess  people were sending around emails of jokes and stuff that you now would probably have fired a hundred times. Everyone was making money. The broker dealers were making money because there was a lot of business. The buy-side firms were making money because stocks were going up, going out to dinners with the $500 bottles of wine or the thousand dollar old dollar bottles of wine where people calling a top there or where they were just like enjoying it. Oh yeah. Oh, absolutely. Oh yeah, absolutely.   The first time I ever heard the illusion to that, we were in a bubble. Was in the late nineties when Mari//o Gabelli going back to how smart he is, kept talking about the tulip mania, the tulip mania. He kept saying this is like the tulip mania . You got to remember for every buyer, there is a seller, right? When something is trading at the top, people are selling it going back to like where we talk about where history repeats, right?

There's a famous book about the stock market. That's called reminiscences of a stock operator. That's supposedly written about Jesse Livermore, who was a great trader in the 1920s. He would have been the equivalent of a hedge fund manager. So anyway, in the. He's at a party and he hears two people or two wealthy old ladies talk about the new stocks that they were just buying. So he took that as a negative sign and sure enough, the market went down. The patriarch of the Kennedy family, he was a wall street. What would you would call an operator back then, but like a hedge fund manager where it's 1929 and he's on his way to his office. And he gets his shoeshine and the shoeshine boy starts giving him stock tips. So anyway, he goes to the office and he sells all the stocks and the market crashes and the rest is history. So here's the thing when people that don't typically buy stock, Or buying stocks. There's no one left after them to keep the price going higher wall streets of food chain. The  really smart people are buying say in March of 2020 then you get up to this food chain. And when you have people that all of a sudden aren't buying stocks anymore, start buying them well then there's only one way the market could go. In fast forward to 2000 and it was literally the same thing you could be out for dinner and your waiter and be like, oh, are you guys in the stock market? I just bought XYZ or you guys should look at ABC. That was like at this is like February or March right before the market just completely blows up. And I not to scare people now, but because the market's been going down, but we have. NASDAQ lost 80% of its value. That's pretty significant. What is, what have we lost now over the last month or two? I don't know, 15%. 20% NASDAQ was down 80%. And then you have the double whammy where 9/11 comes along. And I was in New York when that happened Cantor Fitzgerald were on the top of those towers. After that happened obviously was an attack on our country, but all his traders and all of a sudden the training community felt as though it was An attack on our way of life as well, because it's like America is great because of capitalism. It's amazing how things went from like such good times to bad times.

R: It's a crazy year. That's your first year, like couple of years of trading and you get all that at once.

M:That's a pretty well, yeah, so I saw the internet bubble and then we saw 9/11 and  then we add fast-forward. Commodities bubble the housing bubble and we've had the cannabis stock bubble few years ago. So these bubbles come along every now.

R:And then how were rates when that happened?

M: I think that 9/11 was a Tuesday and the markets reopened the following Monday. And if I remember correctly, I think right before the markets opened, they came out and they said, we're cutting interest rates it was either 50 basis points or it was 100 basis points. And the markets went down and then they really rebounded, but then they continued to go low. And I actually can tell you this, and this is a true story. I'm not making this up. the Friday before 9/11. And I could even show you on a chart. one of the guys I worked with comes in and he was like, "Hey man, are you seeing what's going on with some of these airlines stocks?" So we started looking at them like, yeah, what the hell is going on here? The market was like really starting to come apart. Then Monday it fell even more. All right. Then of course Tuesday morning the attacks happened. It's almost like half of the sell off Happened before 9/11 even occurred. I think now it goes without saying that there are a lot of wealthy families in the middle east that knew it was going to happen. I think to this day, I don't know if there's still a bunch of pages redacted out of the 9/ 11 commission report. People knew it was coming. I am 100% convinced. We didn't know obviously that, oh, gee, we're about to have a terrorist attack. We knew that there was something weird going on in the stocks, they were just being sold too aggressively. And then sure enough, unfortunately the rest is history fast forward.

R:You think things are getting better and then we have the mortgage crisis

M:yeah. All so now it's 2005 and I'm still working at that same font. I'm you know, I'm still the head trader, but I don't remember when, but in between 2000 and 2005, that firm acquired. Affirm another money management firm that was out on the west coast then Pasadena. So the owner of that firm and the owner of the first firm became partners and there was this east coast, west coast battle. And it's like the like east coast, west coast rap battle, like we always make fun of it. It's like, all right. The west coast partner wins east coast burger was anyway. Finally, the west coast partner wins. They say, mark, we're shutting in New York city office. If you come to capacity and you can still be our head of trading it, this was a Friday. All right. Now this all goes down. My daughters, I have twin daughters were born on that Monday. So it's I literally lose my job out of Friday. And then my daughters are born on Monday.  It was a pretty it was a pretty eventful week. Let's just put it that way the way things work when one door closes, another door opens within about two months, I found a position. At a startup hedge fund. And it was just good timing. And I ended up being the head trader. At that hedge fund by where I live, I could literally walk to work. So I was there all through the financial crisis. The financial crisis was crazy.  All these big firms, these big institutions like Lehman brothers have been in business for 150 years. And Lehman brothers goes out of business it was crazy. interest rates were held artificially low in the late 1990s. So investors that typically looked for yield, meaning investors that wanted income. They want to buy stocks that pay high dividends or whatever. There weren't any real options interest rates for the ten-year had historically. Around 5% or 6% now they were below 1% similar to how the environment's been recently. So anyway, there was this demand for products that had yield. So wall street figured out how to take mortgages. And wrap them together and turn them into these tradable products called credit default swaps, where basically it made all this stuff seem artificially safer than it was all right. So the chickens are always going to come home to roost. And that finally started to happen in 2007. And then there was the election coming up and it was clear that the Republicans weren't going to win and. People were afraid whether rightly or wrongly, I'm not talking about politics. Then President Obama came in, then the healthcare sector would become socialized. So people are, were really like thinking about this kind of stuff. And the markets really went into these free falls. I have a good friend who worked at Lehman brothers for 30 years, man. He had $3 million of Lehman brothers stock in his retirement account. That was going to be what he retired on. He watched that stock go from whatever it was like, I don't know, $200 a share to wherever. And because he was an employee, he wasn't allowed to sell it. He ended up went by the time he could sell it, it was worth $10,000. So he had $3 million go to $10,000 in the. Maybe six or eight months. So there's literally people saying  is our civilization collapsing. And I remember some of my friends asked me, should I put my money in the market? And me saying, yes, absolutely. And they're saying everyone's saying that the markets could collapse and all this stuff. And then I said your money wouldn't be worth anything anyway. So you got nothing to lose it's you got nothing to lose. If there's a lot society collapse, your money's not going to be worth anything. So you might as well put it in the market that was March of oh nine. And that's right around where president Obama started negotiating with the insurance companies and then people started.Healthcare is not going to be socialized. And just like things got to an extreme on the upside, they got to an extreme on the downside. I was very lucky in that time because I was working for a fund that did very well, but I know a lot of people lost their jobs for no no fault of their own all these big executives that get paid. All these, all this money. Yeah, Lehman brothers or Bear Stearns or real Merrill Lynch. They made all these bets and they were wrong and the whole company ends up suffering because of it going back to the internet bubble, it's similar to Enron and EnRon was one of the internet darlings. And the whole thing was a fraud. And there were people that worked there for their 20, 30 years, and these places blow up because of fraud and all these people lose their savings, their retirement accounts, their kid's college tuition. I think in my opinion, these white collar criminals, like in that case, it was Kenneth Lay was the CFO.

He went to jail, but he probably went to some Country club prison, right? It's like a low, like low end hotel. Yeah. They should treat these people just like they walked into your house and stole money from you at gunpoint it's like in the Godfather Don Corleone says "Go to law school. Cause you can steal more money with a briefcase than with a gun." Like Bernie Madoff Bernie Madoff. I used to trade with his firm a lot actually in the late nineties and this whole internet. The biggest over-the-counter trading firms, there were like Goldman Morgan Stanley, Cantor Fitzgerald, but Bernie Madoff Madoff was one of these firms I don't know, I'm not a psychologist, but what happened was made off was a market maker, and market makers make the spread. They buy a stock at 20 and they sell it at say 20 and a quarter. So back in the early seventies, there were these three pioneers. They didn't work together, but they all came out around the same time. So there was really no competition to the New York stock exchange up and through the up through from its beginning up until I say, I don't know, 1960, 1970. So then these three guys developed what we call the third. Or the over-the-counter market. So they formed their big firms. They all got unbelievably wealthy in the mid 1990s The rules change. The SEC has changed the rules instead of having fractions, like instead of trading four eighths or a quarter, obviously 25 cents, an eighth, 12.5 cents. They were going to go to decimals. And that changed everything because now the spreads got really narrow because of the competition. Now, there weren't eighth spreads anymore. There weren't 50 cents spreads anymore. Now things were a penny or even half a penny like they are now. So all of a sudden Bernie Madoff's business model didn't work anymore because the whole market-making model didn't work. So he could have just retired right there hung it up and he would be considered a wall street legend. And I don't know, I guess because of his ego, he just had to keep it going. And you talk about a crazy story, dude. It's like not only didn't it off burn all those people, like one of his sons committed suicide. I think it was other son died of cancer. I don't know. I guess there's, sleazebags in every industry, it's just, I find it utterly unbelievable that someone could be worth hundreds of millions of dollars and they could have just retired and instead they decided to commit this elaborate fraud. But I actually know people that worked for Madoff. My friend was a market maker and after all this happened, we were out to dinner and  my friend was like, man, he's  I had a really bad quarter. And I went in there and I talked to Bernie and I'm like sorry, Bernie. I had a really bad quarter And Bernie was iike , "don't worry about it. Here's an extra $20,000 for your bonus." And I was like, yeah it's pretty easy to give away money when it's not yours.  I hate to laugh because a lot of people got burned it made us have this reputation of being like very generous by  it's easy to give away money if it's not yours.

R: It's 2017. I think there was something with rates.  

M: in late 2018, like September to December of 2018, there was a really nasty selloff at the time I was not trading. I was working as a consultant. I I tried to. I wanted to go out on my own to do like my consulting kind of thing. So I was following the markets then, but I wasn't actually trading, but yeah, that was a pretty hefty sell off. And then when we fast forward to the COVID crash, and this is something that I talk about in our lesson, number seven, which is tomorrow where, you know how you look into the past to figure out. What's going on now. So in March of 2020 the markets are in complete meltdown. People are totally panicking. It's COVID is at the end of civilization again, the S and P or the spy, which is, I use that as the market barometer, the S and P 500 got right down to around those same levels of the bottom of December of 2008. So I said  we're getting down to an important support level here. There's a good chance that this is the bottom, right around 235 on spy. Now spies around four 30, we were talking about, so anyway, March 22nd, March 23rd, 2020 spy gets right down into there. Then it breaks its downtrend line.In other words, we have the downtrend and embrace it. So I say this is the. Right here and on the article that I wrote, I put I wanted to put the buyers have returned. Some of the people above me and the organization, we're still really bearer. So they made me, but the buyers have returned at least for now. But I talk about that article in my class seven nothing special Rodrigo nothing mysterious. It's just the market reached a level that was previously really important support and they say markets have memories. And that's what they mean. A level that is a support level. Or a resistance level. They can stay intact for a long time months, maybe even years  even farther than that, I've seen levels that were important for 15 years. Like for instance, the XLF, the financial spider, right before the great recession or the financial crisis, it peaked at $31 in January of 18, 10 years. After that it reached $31 again. And guess what? It hit resistance. So we're talking about a level that was important here for years, but anyway, going back to the sell off in, or the bottom of March 2020  I didn't identify it because I'm like some great secret, super genius. That's got this secret model. It's just, Hey man, this thing had reached a level that was important support in the past. It's really oversold. And now it broke its downtrend. It looks like buyers are coming into the. And it turns out that was the bottom to like within a day. So by keeping it simple, by focusing on these basic fundamentals of which levels are important, which trends are important and what's the momentum driving the trends, we can make really accurate market calls after all those crashes that happen.

R: Not now COVID happened, you're heavier your layout ready? Cause you already been lived through that kind of stuff. That kind of market action.

M:that's, where you make your biggest profit in your quickest time.  As soon as civilization doesn't collapse, a market like that comes along, I don't know, once a year, once every couple of years and you can get in there. And if you have a lot of confidence, so here's the secret. Like a lot of people try to catch the exact bottom when a stock is going down or when a market's going down, but they're typically just. That's the bottom. They don't have a logical reason for it. So what we want to do is we want to buy stuff after it's already reversed and started going up. So people think that's a little counterintuitive and I can understand why, because they would say  why would I buy stock at a higher price than it is currently trading? The answer is because it stacks the risk reward ratio into your favor. You're not going to catch the exact bottom of. You might get on the train as it's already started to move so to speak. So you'll have more conviction, but I don't want to see the market go down because it hurts people. But when the markets go down and they have these really nasty sell-offs, there is really good opportunities to profit. And it's been the same way since the markets formed in the late 1700. So I don't think anything. I think it was opportunities will still exist going forward.

R:Which sounds like those are the wild west days, like the cowboy days fast forward now.

 M: Okay. It's really changed, man. It's changed a lot because like, when I first started trading was still really a a human game. It was, you pick up the phone, he talked to people you learn at which, from who you can trust, like for instance, Cantor Fitzgerald. I had a guy there who I became really good friends with over the years. And he lived, he wasn't in there 9/11, so he's still alive and with us, but I got to know him and he became really good friends with, and, but there were other guys at that same firm that were real sleazebags that would try to rip you off if they could w how could they do that? Say they hear. Oh someone's coming into with a big order to buy XYZ. Maybe they might call one of their clients and be like, Hey, there's a big, there's a big order of X, Y, Z, or you go out and buy some or whatever. So it was a real relationship game. It was really think about it. I guess it's in a lot of ways it's like becoming a cop, right? It's like these people are your partners. You're at work for eight, nine hours a day. And in a typical trading day, I might talk to my guy over at cantor fitzgerald 10 times. Yeah. What are you seeing on this document? What are you seeing on that stock? Call me if you see this call me and if you see that, so it was a real like relationship game. And there was a lot of fraternizing, like going out to dinner, going to games, all that kind of stuff. But now it's all really computerized for the most part. Most traders now are computers.  there's a type of training, That's called cash equities trader which is what I basically was when I first started in the late nineties, Goldman Sachs had 600 cash equity traders, 600, as far as I know now they have2, 2 from 600 to2. So it shows you the computerization has really taken over trading and the computers and the algorithms can do. The work of what used to be 10 humans, 20 people, 30 people. So trading has become much more of an operational thing. Now it's not the same game as it was when I was doing it. So that's another reason why I decided not to get back into it. It's just, it's not fun anymore.

R: It's fast forward to everything. Now you're the chief educator here at the Benzinga trading school. You are literally teaching thousands and thousands of traders. And investors how to responsibly trade, how to trade with a plan with a strategy all over the world.

M:Yeah. If you don't know what you're doing, you could lose a lot of money really fast. I think there are basically three things that make this school different than other schools that I've seen. All right. The first is that is me. I just happened to have a lot of experience. So I'm in a real.I have a really good background to be teaching younger traders, how to trade too is we don't do anything too esoteric or too crazy. A lot of these charters come up with these like far out really bizarro techniques  there's come some kind of secret system or secret formula that works. And  that's not the case.  We talk about the basic fundamentals. So the second thing you know, is B one is by experience two is we keep it logical. We keep it when common sense, and we keep it in the sense of what are real institutional traders. How do they look at the market? The third thing is that, and this could be the most important is that we're actually looking at the markets in real time. What I just mentioned the 430 level on SPY. We were looking at that this morning as a class at our seven o'clock class. And as our noon class, anyone could be a genius if theyare , just using hindsight and saying, oh, look back in August. I said, this was going to happen. And sure enough, it did. And I was. I think by having this time application, it really makes it 100 times better than other things. if you want to learn karate, yeah. You can pick up a book and you could read about all the moves, but you're not really learning karate. It's really learning karate. You gotta go to a dojo and fight against other people, you could think you're you could be a boxer and you could think you're great. You're going to be ready to go and be a great boxer. And you could do a thousand pushups and you can run until you get in the ring with someone else. You don't really know what it is like ultimately trading is not chess. A lot of people think that trading is like a chess game, but it's. Because in chess, the rules are always the same. The Bishop always moves the same way. The Knight always moves the same way. Training is more like poker and I don't mean it in the sense of gambling, but poker is a skill because good poker players, they learn how to read Other people's signals, emotions, facial expressions whatever it is they do, they can keep track of the cards. I'm not a poker player myself, but the point is that in the market, there are humans on the other side of the trade. So things change what works today may not work tomorrow. You know what works tomorrow may not work the day after it. So we have to maintain this level of flexible. And I think that the way we have the class structured, I think it does that. And I think it does a good job at it. They tell people the only prerequisite for the class is someone who wants to learn. I don't care if you've never traded before, or if you've been experienced, you just have to want to learn. I don't want people thinking that this class is  show up and here's your daily trade idea as we go through the markets sometimes. We come up with a lot of ideas. We might find four or five ideas. Sometimes we might not find any, although we usually find at least one or two. Yeah. I like teaching people that want to learn. So it's a good fit for me right now.

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