Off The Charts

Among the many things that stood out during our conversation with David Lundgren, it was this quote: “I want to find a way to listen, and learn, and get a little bit better every day.”

This is a mindset that every trader, every human, can benefit from.

In his early days, David described himself as a “systematic researcher.” This process of discovery held sway for him, and when striking out on his own, he employed the same systematic philosophy to portfolio management and trend-following trading.

David firmly believes that “the best teacher I have ever had is the Market itself,” and “the only way to learn is to do it.”

Trend followers or those interested in trend trading will find a lot of nuggets for further meditation from our conversation including:

* “Trendfollowing is contrarian.” – doing what nobody wants to do: buy high, sell low.

* “There is no such thing as trendfollowing on the short side.” You need targets when holding a short position, which is the opposite of what trend followers do.

* Expect to lose.

* Misplaced Expectations - “If you are anxious about the market, it’s because you aren’t getting what you expected. Which means you aren’t listening to the market.” Traders lose due to misplaced expectations.

* “When all you want to do is avoid losses, you manifest losses simply by obsessing over them.”

* “In trendfollowing, there is no target. You go until the wind changes.”

* In horse racing terms, “the benefit of a trendfollowing portfolio is you can change your horse in the middle of a race.”

These are just a handful of an overabundance of trader pearls of wisdom that were shared in this conversation with David Lundgren, please enjoy.

Milton Marmanides does the hard work that traders don’t have the time to do. He sifts through the firehose of headlines, news releases, data points, and social media to cut through the noise and deliver only the market-moving information active traders need to make smarter decisions.

And in his nearly 25 years in the business, first as a trader, and now as a market data provider, he’s seen a lot.

From his seat, he’s seen how traders overreact to insignificant news items and how that can be detrimental to their performance. He’s also seen how getting timely and accurate information can be the difference between winning and losing.

In this episode, Steve goes down memory lane as Milton was one of his early mentors in the business, and Milton shares some useful tips on how to parse the incredible barrage of information thrown at us 24/7 to get to the meat of what matters.

They are only losses if we don’t learn something from the experience.

When traders woke up on Monday, August 5th to the VIX at 65 and the Nasdaq index down 5% overnight, they didn’t need a cup of coffee to snap into high alert.

The easy first question to ask was: “What happened?”

Many ideas were tossed around in the media and on the socials that morning, but nobody seemed to pinpoint the real cause. The narrative eventually coalesced around the gradual, then sudden unwind of the popular Yen Carry trade; but to many of us, that didn’t quite sound like a viable reason to sell everything.

Nevertheless, when sucker-punched in the mouth by unexpected market turbulence, traders did what traders do when they don’t know what’s happening – they sell first and ask questions later.

In this episode of Off The Charts, Sean and Steve talk about the mistakes they made during this tumult, the things they didn’t do but wish they had, and even a couple of smart things they did.

If you traded during this wild couple of weeks of trading, you’ll find this talk both poignant, affirming, and inspiring.

If there’s one thing Anne-Marie Baiynd learned after making the transition from a business owner to a trader, it’s that she’s no longer in charge.

The market, unlike her employees, doesn’t do what she asks it to do.

She needed to learn to give up control. And it wasn’t easy.

In fact, it was so hard that she almost lost all of the hard-earned money she had salted away from years of successfully running her business. To say this would be stressful for a family and a marriage would be an understatement.

But from the fire, Anne-Marie emerged with a couple rules that helped her climb out of the hole and get on the profitable path.

First, she learned she needed to ruthlessly manage her costs. This concept worked for her in business, but in trading it translates to keep trading losses under control.

Secondly, she learned that she no longer needed to be a pioneer like she was in business, but instead a fast first adopter. One who could quickly jump on profitable trading concepts that others have proven to work.

The path to profitability certainly wasn’t a straight line. As she said: “I’m always conscious that the market can punch me in the face.” And she firmly believes: “If money is your only objective, forget about it. You don’t stand a chance. There is a fever that you have to have that will take you through the valleys. If you don’t have The Fever, you’re going to quit.”

We can in to all this and more, plus the pros, cons, and pitfalls of the exploding “funded trader” industry.

There’s something for everyone here.

It wasn’t until Nik’s father suggested he get involved in High School Wrestling that he began to learn what drives him: Discipline, Regimen, and Humility.

For the first time in his life, wrestling gave Nik recognition. He liked it and knew the only way to maintain it was to go all-in.

From high school and into college at the University of Minnesota, wrestling taught Nik how to become the man who would soon enter the ring of Mixed Martial Arts and the UFC tour circuit.

And through it all, being scared was never an option. “I was fighting for survival.” He rarely felt pain in the ring. He was too present to even allow it to enter his mind. For nearly 20 years, Nik was not just an excellent fighter, but he was a survivor.

At birth, he was dealt a losing hand, having been raised as a young child in an abusive home. This manifested in Nik a mentality of having nothing to lose. This drove him to be hyperfocused on the tasks at hand to be the best he could be in the ring.

Inevitably, the time comes when a fighter has to retire from the game. When Nik discovered the markets, he knew what his next move would be. “If I can control myself, the Markets offer endless possibilities.”

To be successful in the market, as in fighting, “you have to deal with the person you are,” Nik says. One of his biggest hurdles in learning how to trade was his introversion, which he had to overcome to reach out to smart people in this new field so he could ask questions, form relationships, and grow. “If you’re willing to look like an idiot for five seconds, it’s often not a big deal.” And the rewards far outstrip the risk of putting yourself out there. All it took was honesty and humility, something Nik knew he was good at.

But he knew he once again had to put in the work. ”One in ten will not do what is required,” he said.

Learn how the art of fighting translates into the art of trading in this wonderfully insightful conversion with Nik “The Carney” Lentz.

When Michael Nauss first sat down at a trading desk, his computer had a keyboard and a screen. But no mouse.

And his screen displayed an order book. But no charts.

Thus began his career as a scalper working the order book, who paid no attention at all to trends or technical analysis. He was simply trying to find spots to buy ahead of large buyers and flip the position out for a quick couple of ticks. Do this a couple hundred times per trading session and perhaps he’d have a successful day.

This was all part of Michael’s journey of learning to walk before he could run. And it is a mantra that sticks with him to this day as he himself continues to learn and helps many others learn the craft of trading.

Michael says: “Learning is often about “UN” learning.“

People are frequently drawn to trading by a social media personality or a brokerage advertisement, and they are like moths to the flame of fast riches and early retirement. Then they lose.

It is at this point most realize they have to unlearn everything they’ve learned up to now and get back to basics. But this time, they choose to take it slow.

Taking it slow is exactly what Michael did during the Pandemic when he built a full online education series, teaching his wife — who knew less than zero about the market and trading — how to trade. Calling it “Back to Basics,” Michael started with the simplest of concepts, and slowly, methodically brought her to trading proficiency. And the whole thing, over a series of many episodes is available for anyone else to learn from.

These days, Michael is passionate about systems trading and building uncorrelated return streams that help smooth out his equity returns.

Some of his trading is run unemotionally by algorithms he’s designed, backtested, and employed. But he still often trades his systems discretionarily — measuring his human performance against what the system would’ve earned without his override. If he’s outperforming, he steps on the gas. If not — he lets the computer trade for him.

Join us in a wide-ranging conversation that covers all this, as well as some cultural differences he’s experienced between American, Canadian, and Chinese traders.

When you are chasing a wave, you can’t be anywhere else. You have to be present.

Similarly, you can’t be anywhere else when you are chasing trends. You have to be present.

Ian has worked hard to create the right mental and physical environments to increase his odds of presence. The places he’s lived would surely inspire envy in anyone who cherishes beautiful natural surroundings and ocean breezes: San Francisco, Hawaii, and the underrated Gulf Coast of Florida.

Ian said it best when we said: “Find what brings you joy, then do it!”

When he was introduced to a book that chronicled the famous story of the “Turtle Traders,” as well as other books on the concept of trendfollowing, he found a new passion. He had his lightbulb moment.

But having a passion for trading isn’t enough to ensure success. As a father of three young children, he quickly learned the importance of prioritizing.

For Ian, those priorities, in order, are: Health, Family, Work, Trading.

When this order gets out of whack, that’s when bad things happen.

Learn how our own All Star Charts teammate Ian Culley stays grounded, focused, and willing to do the uncomfortable things that most people are unwilling to do to find success.

Michael Martin: A Tribal Inner Game by Sean McLaughlin & Steve Strazza

From the Slopes to the Screens: Todd Gordon is hyper-focused.

Flying down a mountainside on two skis while negotiating tight turns and ever-changing microclimates would be a terrible time to lose focus.

Todd Gordon knows this. If he hadn’t quickly learned this skill in his journey to competitive ski racing, he would’ve likely landed himself onto a stretcher and an air-lift back to base.

There was no other choice.

But for Todd, he’d have it no other way. From a young age, when he found an interest in something – whether skiing or finance – he’d go all in. Nothing else mattered.

And when he discovered the world of trading, he knew what he wanted to do. “There was never a question,” he said.

In college, between classes, skiing, and happy hours, Todd would trade options from his dorm room. It wasn’t a matter of IF he would be a trader, it was a matter of where would he start.

And that answer came right after college when at the age of 22, Todd headed west and joined a proprietary trading group based in San Diego. And from there, he never looked back.

How did he handle those first twinges of pressure when early trades went awry? His background in high-pressure competitive skiing gave him the tools to stay focused on the things he could control, and keep his attention away from anything else that he couldn’t.

In this episode of Off the Charts, Todd gets into all this, plus the transition he has undergone from a high-paced intraday scalper to a money manager guiding investors toward long-term gains.

Caleb Franzen Can Figure It Out by Sean McLaughlin & Steve Strazza