274: Gary Norden - Keeping the Lost Art of Order Flow Trading Alive

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The first thing to understand is that the longer you want to hold a trade in my opinion, the harder it's going to be. There's a big industry grow up to say, and a lot of that technical industry says, "Oh, but it's so much noise in a very, very short term. It's a lot easier to see over a long time. I'm calling BS in that. If I'm trading for two seconds, it's very easy to know what the risk and reward are likely to be in holding something for two seconds. If I hold trades for a day, three days, the likelihood of something big coming in to hurt me, obviously increases." So, markets, speculation, and risk. This is the chat with traders podcast. I'm Tessa, your co-host, and we are on episode 274. I can't believe we're almost one-third of the way into Q1. Think about this. Whether we take action on our goals and dreams or not take any action, time still flies either way. Why wait? Time doesn't wait for us. Let's take action and move forward in our trading journeys. And I mean that, guys. Traders, we're excited to introduce our next guest. But before we do that, every now and then, we have to do a quick reminder that always applies. And I'm sure you already know this. Trading carries a high level risk and you could potentially lose all of your money. The podcast episodes, programs, and other content associated with chat with traders are for sharing, for informational, or for educational purposes only, and does not constitute trading or investment recommendations or advice. Therefore, you must do your own due diligence and be responsible for your own trading or investment results. Thank you. Today, in interviews, Gary Norden, if you're a retail trader, you may not like everything Gary has to say. But Gary has 30 plus years of trading since he was 18. He began early as a market maker, turned professional trader of scalping futures and trading options. He manages a hedge fund is an author and a mentor to many. I would say he knows a lot about retail traders that we as retail traders don't even know about ourselves. A humble beginning as a golfer in the intense trading pits of Japanese warrants was shocking for Gary when he was a teenager. As this volatile market was beginning its meltdown, Gary saw how easily star traders lost immense amounts of money as passed over confidence and sloppy risk control undid their previous gains. This impressed upon Gary the importance of a risk ofverse stance to keep himself in the game. Practicing order flow trading hundreds of times per week gives Gary the edge in this lost art. Now without further ado, ladies and gentlemen, we are so pleased to present Gary Norden from Perth, Australia. Hey Gary, where are you joining us from today? I'm in Perth, Western Australia. Okay, share with us a little bit about your background. Where did you grow up and what did you study in school? Yes, I grew up in just outside London on the outskirts of London in England, obviously not in Australia. I studied, I went just through high school, specialized at the end in economics, French, and I decided at 18 to defer my university place. I was offered places to study financial economics, business economics. I decided I wanted to take a year off deferred my university place and I was just trying to get a job on a trading desk in London. It was 1989 and trading. There was movies and videos and films coming out about trading. A new one guy from my school had got a job as a broker in the city. It sounded really exciting and I just decided let's try and do that for a year. Most of the recruitment agencies just said, "You know, just never happen. You will not get a job. There's thousands and thousands of young kids." Only one guy said, "Look, I'll look for you," but he said, "It will be hard." I got a job on a trading desk as a ticket writer on a Japanese warring desk, which was the boom market at the time. This was literally a month before the peak of the Nikaia in November 1989. I got a job as a ticket writer on a desk, which was the lowest job on the desk, but I was really caught with that. I got onto a trading desk and then a month later the market peaked by January, February, into 1990, the Japanese stock market was really starting to collapse into February. Some of the traders on that desk were getting absolutely smashed as everybody was in the Japanese market. Essentially in May 1996, six months after I joined, I got promoted to be given a trading book of Japanese warrants. The desk structure originally was five traders. They had assistance and then there was the two ticket writers. We were the lowest. I got promoted above the assistance. Two of the traders got demoted to assistance. I got promoted above the other assistance and above the other ticket writer, which caused all sorts of friction as you can imagine. I wasn't a very popular person. And for a while, I had really almost no idea why it was me. They chose, but they later explained. But so I got given in May 1996, months after leaving high school pretty much, or six months after joining the desk, I was given this trading book of Japanese equity warrants as the Japanese stock market was collapsing. And obviously, I recognize it was a great opportunity. Didn't end up going to university because why am I going to stop this? I actually had a ball. So I mean, it was crazy. It was an incredible time to learn to trade as a market maker as well as a market maker of these warrants. And reasonably quickly became the most profitable trader on the desk and just loved it. I absolutely just it was just incredible for a 19 year old to be trading this book against some very well known traders in the city. So that was a start on my trading journey and did well in that market really enjoyed it. Learning to trade during a crash was actually a great time to learn to trade. And I've got so many of the lessons I've learned will learn in that time. From there, I went down to the life floor. The futures exchange was backed by a very, very smart American options trader. He taught me more about options and backed me to become an options market maker in the pit as a local. That was the most challenging time I've ever had options market making in the pits. So the option market makers back there on the floor are still the best traders I've ever come across and had to compete against better than anybody I've come across in an investment bank or even hedge funds. They were amazing. So that was a very challenging time. They were very good traders and we were all competing against each other. From there, I went to head up the options for one of the big UK banks in that west and head it up other banks after that going through for London. So I was in London for about 15 years in the city, trading convertible bonds for ING and then was involved in the transition. So I was options market maker when the floor closed and that's when I transitioned from away from options onto trading scalping futures in 1999 when life closed. Just curious how often if ever was the pit like how it's portrayed in the movies with floor traders yelling waving tickets trying to get orders filled? Pretty much every day, particularly in the futures market. The options market was a little bit different. It operated slightly differently to the futures market but still, when there was something that everybody wanted, there would be a lot of screaming shout. There's not many of us around, I suppose, left but there's a lot of misinformation about floor and people think, "Oh yeah, it was easy to be a local." It was a very, very challenging environment. I'll challenge anybody that said, "Oh yeah, well they just did this and they just did that." As if there was some kind of, it was just easy to stand in the pit, make prices and make money. It was incredibly challenging for many reasons. Imagine if every time you're trading, all of your peers around you, they see every trade you're doing. As soon as I say, "Yeah, buy those." If that's a stupid trade, everybody sees it. Everybody's going to be on your back. That's another kind of pressure that when you're sitting at home clicking, you don't have it. Imagine you had 60, 70, 80 people looking over your shoulder every time you trade it. The physical aspect of the pit as well, I think people underestimate standing all day long, screaming, shouting. Sometimes you're not able to get out lunchtime or whatever because it's just too busy standing. up all day long, the screaming, the yelling, the spit, the noise, the smell, everything. It's a challenging environment. And frankly, I'm not sure I know any investment bank traders, many others that would ever want to come down. They were scared. And some of the times investment bank traders would come down and look around the floor. Most of them were scared of the place. Frankly, they were like, "Whoa, this is a hype." It's a lot different. And in many respects, a lot easier to sit behind your desk in an investment bank and make the decisions you want in your time casually or over phones. I've done that. And I found it much easier trading for an investment bank than on the floor. And a lot of people will come down to the floor and just think, "This is an intimidating atmosphere." And it was, I found it by far the most challenging. And the best traders were down there. There were some awesome traders, the option traders in particular, outstanding down there. So when you were first put in charge of a trading warrants, how did you get trained for that? Did they have some coursework that you had to pass or did you have a mentor? I mentioned, I mean, you went from writing tickets to suddenly trading warrants. How was that process? How was warrants and options as a market maker or trader? Are they similar? Similar. So in terms of the education, they really wasn't much. But I was writing tickets, then I kind of got taken under the wing of one of the traders. And I sort of became a de facto assistant to him even though I wasn't being paid in that way or whatever. But I was getting a lot earlier than my job would require because I was sort of helping him. I watched him. I learned predominantly at that point from other people's mistakes, from watching these other traders struggle. There wasn't much money being made by January, February, March. Everybody, all the other traders were losing money every day, every day. So there was no program for me back then. There was no trade education program. In fact, I started at that bank. So after I became profitable and because the others were struggling, I would be running sessions in our lunch breaks. So our market was closed for two hours every day at lunchtime. I would be running sessions trying to teach these guys, the things that I was doing and saying because I was making money and they weren't. But there was nothing. I really just, I was just thrown in. And because of the way it happened to me, because I was promoted above all of these other people, they all wanted me to fail. I was given basically three months and I mean, people probably wouldn't believe some of the things that were done to me. But everybody on that desk wanted me to fail because they just believe I shouldn't have been given that chance. There were other people, but now a lot longer. And I was the most junior guy on that desk. So I knew I had three months. I knew that this was it for me. And so really the way to learn was what has everybody else been doing wrong? There was very little of use that I could take out of that, you know, six months that I'd had because people were losing. So I learned that yeah, learning by people's mistakes and seeing people's mistakes actually is a good way to learn. You'd see a lot. Now I was lucky when I went down to the floor. I had a really good mentor in options. So a very good trader from the US, Wade was a fantastic trader. I really didn't get to trade enough with him. I really wish I could have when I went in the pit, I ended up with someone else supervising me and who wasn't really helping me. And again, that was that was a struggle. It's very important to have someone guiding you, mentoring you as you're going through that. It's one thing to teach someone something. But you really need people guiding you as you're progressing. Otherwise, it's a lot harder. You mentioned the other traders were making mistakes and you wanted to avoid those mistakes. So share with us what were some of the mistakes that you discovered that they were making. Yeah, I think the key one was particularly in that environment of a collapsing equity market was to cut quickly. And to not worry about a small loss, or so called small losses, the numbers at that time that you could lose or make on these warrants was ridiculous. It was a crazy market, but you could lose $5,000 on one warrant in two seconds. And we were all market making like $120, making prices in hundreds of these, making hundreds of trades a day. If you got this wrong, you could make, if you got back to 1990 losing hundreds of thousands of dollars was a serious amount. So the first thing was cut quickly. From a market making perspective, one of the key lessons I learned was it's very common for market makers to make the market price. So if you're not sure about what the price you should make, you're thinking what's everybody else making and you make the market price. I worked out, no, I need to be better than that. So I basically would always have a slight view on my warrants, which ones I wanted, which ones I was happy to be long or happy to be sure. And only those that I had no idea about or no, I don't view on, I'd make the market price. But if you make the market price, if you went along with the market, you'd get screwed with the market back then. So when the market got hit, you got hit. So I had to think, okay, there's something happening in this warrants right now, clearly the price is about to change. I've got to be good enough to make a price either way. And you know, I told a story on my YouTube channel about what I consider to be the day that I became a trader. What I mean by that was the day that I really started to figure out what I needed to do. And that was the first day that I decided I'm not going to be tossed around in the tide of this market where warrants are going up and down and down and up all day long. I'm going to make my view. I think this is happening with this thing. I'm going to make my view and I'm going to stand or die on the fact, if I'm good at this job as a trader, then I'm going to be making the right view on this. And if I think this warrants should be going up and it's going down and that's what happens every time I make a decision, I'm currently not cut out to be this market maker. I was prepared for that to happen. I was prepared to test myself to that level that if it didn't work, it didn't work. It wasn't for me. But what I hated after the first couple, you know, month of trading was I hated being tossed around with everybody else where these warrants are being up and down. I'm like, I can't, you can't make money doing that. You have to say, I think this warrants cheap or expensive. I then went out and learned. We were luckily hired a salesman who came from Merrill Lynch. And Merrill's were on the on the cusp at that time of the new sort of ideas. The warrant market was one of the first markets to implement implied volatility and people using them to trade volatility as opposed to most people were trading warrants just for direction, like they would options. Led by a really a guy called Dr. Kevin Connelly, who was at Cresvout at the time. He was one of the sort of forefathers of this and particularly in convertible bonds as well trading implied volatility. I learned from the Merrill's guys what this meant, what was implied volatility, you know, how the delta hedge, all those sorts of things, what was a cheap option, expensive option. It turns out a cheap or expensive option on an implied vol basis was very different from how the rest of the markets saw cheap and expensive. And that gave me edge. It surprised me how few traders in my market were scaling up on that. And so again, just learning what's new, what's other people doing that gave me a massive heads up. And it can surprise me that my peers on my book in other banks, you know, I was trading against about eight or nine other investment banks, other people trading the same warrants as me. Most of them didn't know this stuff. Yeah, I'm just wondering, you're the other traders that you were trading with and against. Didn't they have to have some sort of basic education? I would think that cutting your losses would be, you know, market making one of one that they would learn. And here you are a much younger person there. You seem to have the initiative to be hungry to learn. Was that not the case for these other traders and was that largely, I mean, were they just given free reign to trade without getting much of an education? They were back then. They were back then. They didn't have much trading education and they didn't, it really continued to surprise me that traders would lose money and just not learn. And I was giving these sort of education courses at lunchtime to my peers. So for example, about implied volatility, what it means. And they just so many traders didn't seem interested. They thought it was too hard. The cutting loss is always, we were only after a short while the bank clamped down on our positions and we were before that they could have pretty much whatever positions they want. You're trading 120 and making markets and 120 to warrants, you're probably going to have positions in 60, 70 of them at least, just inventory, just that you're carrying, right? Just because you're making prices. They really clamped down on that. We had much tighter limits, only allowed like 200 warrants maximum on any one position. And so one thing I learned was that the other traders essentially ended up with the positions that the market gave them. The ones that were too expensive to cut when, for example, they were hit. So they'd make a price, they got hit on their bid. The market they found was like an hour point away at two points away. They didn't want to cut $5,000 or $7,000 on that trade. So they ended up with the positions that market gave them. Whereas I was of the view, I would rather cut $5,000 on that than cut $2,000 on a smaller one if I liked it. So they were very taking a short-term view. Today, if I cut that, it's going to cost me money. Whereas I would say, well, no, I think that one's going to cost me even more tomorrow and a day after. And a lot of traders struggle with that. They'll take the easiest decision, right, which is the lowest PNM. So today they were like yeah, my PNL's low, but then they were locking themselves into negative PNL every day And what I found was by cutting the ones I didn't want this one. I did not want this trade Yeah, it was a 6,000 10,000 whatever it was lost at the moment I'd rather take that now because otherwise that if that stays on my book I'm gonna have losses for days and days because I don't like it and I suspect it's gonna be bad And what I ended up with was a book with only good positions on it So essentially even I could then afford to cut some of the big lost making trades during the day because everything else on my book was doing alright It took a while to obviously to turn the book around I inherited it absolutely shambles of the trading book But yeah, it's continue surprised me that traders would always make those short term decisions Oh, this is gonna cost me too much now and I was like no, I can You know, I'm taking a few of my whole book and I'm looking ahead next week and Look that's partly reason why none of those traders had a long career in the industry right none of those guys back then Ended up continuing to trade, you know 10 years later and it's not surprised to me Ever watch a stock rip and think I could have nailed that if I had real capital The truth is many capable traders never reached their potential not due to lack of skill but lack of scale Trade the pool was built to solve exactly that a firm design for serious individuals who won access to the US equity Marcus with meaningful buying power up to $200,000 without committing their own capital get access to virtually every stock in ETF Go longer short freely with the flexibility professional traders expect you're evaluated on one thing your ability to manage risk and Execute with consistency meet the standard and you trade at scale No subscriptions no ongoing commitments whether you're still refining your strategy a Trader with experience who hasn't yet broken through or a seasoned professional simply looking for more capital Trade the pool is built to meet you where you are and take you that next step further The markets have evolved access has evolved now So has the way traders operate within them trade the pool So Of the star traders that you did meet and see how often did they lose their edge? One would think that you know what they learn the basics early on and they keep to a certain discipline that they can Develop like you did and so what causes them to lose their edge? I think and And in a like a few milleteers is is probably the biggest killer for traders right that viewed it You're good. So these guys had one of the big differences between me and them was these guys have been trading all during the ball market all through the bull market in Japan and They were always scared of getting caught Short on marrants because like well, this is you know, this is gonna turn around any minute and they were essentially trading from the bottom I had the luck or the fortune that I never traded the good times. I was I never had that I never had the benefit of trading the good times. I only traded the the tough times the crash So I was not here waiting for this bull market to return or anything like that and and just to be able to Trade and I talk a lot of to traders about being in the now Forget about what happened in a year ago right now make the right decision now for the current market Believe it can't turn any minute or it could you know, but just trade the current times well The traders that I know that have done continues and some of those war and traders are other banks that you know You know continue to be very good traders the ones that you know learn those lessons and just said now This is game off what I've done for the last five years. It's made me money. You know that that's gone That's gone. It's a different market now. I have to change those guys that did that could transition well as I've said the Option traders on the floor On the life floor their skill set was so strong that you know many of them are still trading well today and I you know There's a lot of options. Obviously very popular product. I still don't think I've seen any people out there in the Social media world and options that have the skill set of those guys that I was trading against on the floor and some of and it you know Really if you have the basic a good basic knowledge and the humility to understand it You know, I need to continue to revolve with the markets Then you have the ability potentially to keep going but like everything I think humanity is just such a huge thing just to say yeah, you know what and every day I just remind myself this thing could do anything today because even though the like for example back then in a war market Then the K was collapsing you would get days of massive rallies with the Ministry of Finance or Bank of Japan would basically essentially get the the local banks to buy up shares Right and just you look today you can't sell you're gonna buy in the market So you wasn't just about oh you just short and make money wasn't like that there would be some you know huge Rallying days in there. So you've really had to be able just to be on a dime in this market and just every day See what what is today? What can I do? Not think too far ahead and and just trade the best you could on that day Mm-hmm. Uh, so when you were trading the warrants and the options Were you involved what is called order flow trading at that time or How did how did you get into order flow trading if you weren't already doing that? Yeah, essentially market making is probably the you know the the essence of order flow trading. So As you know as well as holding positions in wine. It's my main job was as a market maker I had to make prices and obligated to make prices to the 910 other investment banks um and as well to our clients who were funds pension funds hedge funds from around the world So that's where I first started to learn the skill set of How to make prices What to look for how who do you want to trade against and and these things are still I still using today So the norther methods didn't cooperate these ideas who do I want to trade against and who when I trade against do I'm saying I want to get out of this pretty quickly Learning the difference between what's a good trade and what's a bad trade from an order flow perspective and understanding that quickly So as a market maker You can't sit down and think an hour later Oh, yeah, actually that wasn't a good trade. Let's get out of it You have to pretty much recognize straight away if you can recognize as soon as you're filled This is a good trade or this is not a good trade. I'm off here that then you need to get in or out quickly based on that And that's something that you know that's skill set which I think a lot of if you're an algorithmic market maker like today You probably don't learn those skills as much so those of us have grew up at that time We you know, I didn't have alga is helping me. I couldn't cross spread hedge My portfolio or my trade or something else. I was just in an out of warrants all day long So I had to learn some skills to recognize some of these things which continued continued a bit on the floor To a different degree and then continued into you know other things Even today and I think some of those skills have been lost because market makers are not being trained anymore Because it's all in a computerized situation and there's a lot of confusion misinformation about what market makers should do So as those skills sets have been lost, I actually think some of those skills have become more valuable Yeah, I think you know learning how to get in and out quickly so all the market making out as a market maker of options and warrants and All of those taught me various skills that I've then used in laws and rules that you need to apply if you're going to trade all the flow Mm-hmm. So you mentioned the loss of skills and and how algos today are doing the market making Does that imply that the humans today are mostly kind of caretakers of the algos that they don't really learn The the mechanics like you look like you have to learn the mechanics of it right before algos, but today they don't need to do that They can trade slightly differently so So for example if we take options market makers today, okay, so when I was an options market maker in The euro mark or BUNPIT or footsie pit, okay, I Just when I got filled, you know, I was generally pretty much trading the front month Which is what most options traders were then and so we were just you know, how do we spread our risk? Across we spread it across the strikes of the month we were trading, you know Some of the bigger guys at the bigger some of the banks that had market makers they would spread across a few months But most of us traded front month if you look at it today So we had to have a skill set because we didn't have many options to hedge right We had to have a skill set in terms of making prices seeing which were good to buy and sell because We didn't have many options, but today if you're an options market maker you can spread across all months You can spread across different products so you can be trading you know SPX options and you'll be spreading those against the individual stocks of you know You can spiff those with high correlations you'll be spreading those against potentially nq or Dow Jones options and the other ES products are available, you know, it is you know a number of variants of Options on the index so you have so many different ways of spreading out Your risk that it's slightly different game now, right? I mean it's it's the same, but it's it's different It's in some sense you would say it's easier than what we had to do So because we had just trading one month in one way we had to learn certain skill sets to get ourselves out of trouble quickly We didn't have the options that are available to market makers now to spread In terms of sort of equities futures market making this there's not I wouldn't call the people in their future space market makers the algoes They're high frequency traders, but I wouldn't you know they they kind of operate in a market making way but not not necessarily certainly the ones that I've spoken to I think there's this misinformation about what market making is and they're trading in that way They can still be profitable potentially, but a lot of that that's just based on fees rather than on edge. In terms of equities, again, slightly different, right? In the way that they market make, and again, they don't necessarily have to have some of the skills that we had to. But as someone training for myself in a market making capacity now, if I was scarping futures, for example, I still don't have the options that those market making firms have. I'm only got myself, so I still need to use those skills that I had before because I'm not spreading it across different formats and trading in a fraction of, you know, in 0.003 of a second or whatever. So those skills are still needed for me. - In one of your previous interviews, you talked about when doing order flow trading that one of the objectives is to look for weak players to pick off. How exactly do you do that? I mean, what does that look like on your screen when you're seeing a list of asks and the various sizes and a list of bids and various sizes and the volumes, you know, is flooding in. How do you identify and pick off the weak players? - Yeah, you're right. It is important to be able to try and identify who you want to trade in. So you're not always gonna get that right. And so the key then is to know as quickly as possible when you weren't filled by the people that you wanted to be filled by. And then you get out, of course, right? So first identify who's playing. And identify who are the weakest players. Right now in the futures market that we trade, it's very easy to work out with the weakest players. Are they the retail traders? They've always been the weakest players and unless they change their trading habits, they're probably always going to be the weakest players. How do they trade? Most of them use some form of technical analysis, right? So we can look at that. We can look at the weaknesses of those technical analysis and there's many of them. And from that, we can work out that there's certain situations where these traders are going to be slower than us or potentially you'll be trading, yeah, a little bit behind where the market probably is right now. So based on that, there's certain times where we think that they're more likely to make mistakes. And sometimes you just have to listen to retail traders and you know when they're making these mistakes. But essentially that's what it comes down to. So if I get filled, so there's various ways of soon as you're filled, you know, I give my, there's a checklist I give. So as soon as I filled, you can sort of mentally go through the checklist. Did all these things happen? Yes, great. It's a good trade. Then that's fine. If some of them happened and some of them didn't, then again, as soon as you're filled, so I don't have to wait 10 seconds, half a minute, three minutes. As soon as I'm filled, I should know with this checklist, which is based on, you know, all of the experience I've learned over the years, with the checklist, okay, everything was good. Or if too many things were not good on this, then I wasn't filled by the people that I wanted to be filled by. At that moment, maybe a bigger player came in and it's just get out, whatever it is, just get out. So there's certain ways that you'll know when you're filled. Again, going back over, you know, all of my 30 plus years, there's times you'll know that was just not, that was in the right way. So identifying when they're likely to make a mistake, which is generally based on the way they're trading. And then recognizing as well that sometimes you won't get it right, and therefore as quickly as possible. If you can recognize as soon as you're filled, that this wasn't great, for whatever reason, there could be a number of factors. If you can recognize that quickly, then the next step is, okay, just get me out. So while you were market making, did you trade or invest your own money, and was that allowed? And if so, what kind of assets did you trade or invest in? In terms of investing or. Either one, did you, for your own accounts? Okay, so. Yeah, so when I was a market maker of options on the floor, I was trading my own account as a market maker, so that was as a local. And subsequently when the floor closed, and I was scurping futures, I was scurping futures as a local for my own money. In investment banks, when I worked, I worked in a number of investment banks as a senior trader. No, and I will say this, I am not an investor. I find it very hard to be an investor. And I'll always say this, I'm a trader, and I know that. And in banks, you can't really. It's very difficult to have trading. You have to get everything approved when you're trading in an investment bank. So it was just too hard, I didn't like it. I like to concentrate on my trading. So here on the floor, for a number of years, I was trading my own account, and as well for myself, when the market's been computerized. But when I trade for a bank, no, I don't really get involved in investing. It's not my thing. In your book called Technical Analysis Exposed, you mentioned in there that the rise of automation has led to a decline of knowledge and trading skills. And I'm just wondering, how is this possible when your home-based trader today has access to more education and tools than when you first started as a teenager, including level 2 data and others? Isn't that enough for us all? The access to data is excellent. It's much better than I had before. But just because there's more information out there, but if the majority of it is noise, it's not helpful. And that's the case. I think personally that it's harder than ever for new traders to find out what's really going on. And I was just interested, I think it was Cliff Astonus recently from AQR, as it the hedge fund, who said that he also, I think he was saying that skills are being lost and it's harder than ever to find good information. There's more information out there, but it's harder to disseminate. And I was punching some stuff into, even to chat GPT a few months ago. Did this on my YouTube channel? It was an options question, I gave it. It got it completely wrong. I asked it two different variants, I can't remember what the question was, but there were two completely different questions. And it came up with the same answer. They could not have been the same answer, but it's scarring the internet. And of course, there's a lot of junk on the internet. So how do you get through that junk? If I think about traders of my ilk from my generation, we, none of us use technical analysis, right? So none of us, and we saw it around and we might have tried it for a bit. I did go on some TA courses and learn it and it just didn't fit with how we saw markets. So traders who grew up and were trading in the eighties and nineties, pit traders, for example, you couldn't, you know, you were just in there with a pencil and paper, you had to have other ways of trading. I think one of the things is that the technical analysis traders on this internet era, they, they're by far the most popular out there, right? That they, if you're going to look up trading education, that's what you're going to get. Now, for traders of my ilk, my generation and my training, we think that's garbage education, frankly. I mean, we don't agree with that. We don't agree with the assumptions of technical analysis. We don't think it works. But, you know, for our generation, if you were to spoke into professional traders 20, 30 years ago, we were to say, stay away from it. But now, you know, if you're going to start trading almost, certainly, that's where you're going to start. If you're going to start trading as a retail trade, look up trading education, you're going to get some form of TA. I see. Why is that? Why do you think that? Why don't they do? Does the community teach traders the same way that you learned? First, yeah, there's a number of reasons. But I call it in, in another book, an end to the ball. I call it the financial junk food industry. And I called it that because one day my son was about nine or 10. And he asked me this question. We were talking about, we didn't want to go to a certain junk food restaurant. And he said, well, dad, why do restaurants make food that's bad for people? Right? I might want to use the word allegedly in there, but let's just say, why do they make this? Well, because that's what people want. They want convenience. So if retail traders want to learn a trading style, where they can trade for 10 minutes analysis a day, you know, simple levels, blah, blah, blah, blah, blah, blah. There'll be an industry that will grow up to give them that. Whereas if the trading industry says, look, actually, it's a very tough business. You're going to need to spend hours behind a computer. It's high focus, high intensity. It's difficult. It's tough. And most people will fail. This is the other method. It's a very difficult method. It's, you know, a lot of focus. I have intensity requires a lot of training, not about prediction, all this sort of thing. People, I don't want that. I don't want that. And I've seen in my time, I've seen, for example, futures sort of prop shops pivot away from more robust training focused at professionals and building their trading room to education. It's more focused at retail traders. And it's clear the difference and why? Because that's what the retail traders want. If you want to make money in business, you've got to give people what they want. And fortunately, what a lot of traders want is not good for them. That's, so that's my view. So there's a lot of information out there. Yes, but I don't necessarily think things are getting better. I don't see any evidence that with all of this new information and platforms at the success rate of retail traders or has improved. I don't see that at all. I don't see them getting close to the success rate of floor traders, for example, or people like that. So you have to start asking why are they not improving? Because some of the stuff they're being given is not, does not have edge, is not helpful to them. So as a market maker, my understanding is that you hold on to positions for just seconds. You're just looking to flip it as fast as possible. But what about for the many traders who don't have the time or desire to just concentrate on just order flow type of trading and want to take on a swing position, say that go out for days, weeks, or months. Do you have any advice for them with regards to, you know, are there any technical indicators that can provide an edge? Answer won't be popular obviously. And there's a big industry grow up to sort of say and that a lot of that technical industry says, but it's so much noise in a very, very short term. I'm calling BS in that, right? If I'm trading for two seconds, okay, it's very easy to know what the risk and reward are likely to be in holding something for two seconds. If you want to hold something for three weeks, what's the risk reward of that trade? What could it get to? We're good. It's a lot harder. If I want to hold it for three years, it's even harder again. So and other things, for example, if I hold a trade for two seconds, the likelihood of me getting burnt by a big trader, smashed by, you know, taken out by big trader, is going to be the smallest it can be. That's why when I trade for myself, I prefer to hold trades for two seconds. If I hold trades for a day, three days, the likelihood of something big coming in to hurt me is obviously increases. So when I'm trading with my own money, risk is the number one thing. I can't off, I'm not trading for a bank. I can't afford to get smashed and keep coming back. It's too hard. So smaller trades, to me, make more sense trading with my own money, trade for three, four, five ticks and do that 50 times a day. That seems to be to fit the brisk profile of me. My view is for traders that in this industry, you should either try to trade in a professional kind of way, which is generally a high frequency. Most of the professional, if you look at the hedge funds, whatever will seek high frequency methods, there's a number of benefits to high frequency. Either try and trade in that way or frankly, probably best not trade training at all. And I'm comfortable saying that to people, you know, that might be the best way. Other ways will carry a lot of risk. And frankly, if you ask me what tools are the best for carrying a trade for a week, three weeks, four weeks, I've never seen consistently lots of people do that in any way. And the industry itself, look at how the professionals work. Even the biggest multi-billion dollar hedge funds are looking to trade for small amounts in high frequency ways. There's a reason for that. It's, I just think the benefits are so much clearer. And if you can't trade that way, then I think you should really reevaluate what you should do. That's my opinion. I'm never someone, again, who's going to be an unpopular statement. But I'm not here to sell training. I love training. I love this industry. It's the greatest challenge out there. But I'm not one that says, oh, it's an easy route to wealth. And you should all take it up. It's tough to tough business. So trade it in the right way. Or perhaps not trade it basically. Have you considered automating your order flow trading? Yes, I've considered it. It's very complex to do it. And everybody that's a programmer says, oh, I can do it. And what are my students at the moment is trying that. And yeah, what I've seen, like he's because he sends me his videos that my students do. And I can have a look at it. It looks nothing like what the rest of us do. And it's very difficult. There's a lot of nuances to this. And essentially, the key component of order flow trading is trading in the now. So trading based on what you see now. So that means that one of the problems with algorithms and automation is, you know, it has to keep changing as things are changing. As order flow traders, we're as much trading liquidity as we are trading price. In fact, we're not really price traders. We're more liquidity traders. So therefore, you've got to, you know, that's continually changing. So you've got to, you're continually just changing what you're doing. It's very rare that you're going to do the same trade type of trade moment after moment. So it's just constantly changing. And the information that you might use where you place the order, all these things could change with every trade you do. So that makes it pretty complex. Yeah. Well, speaking of a high frequency, I like to talk about the high frequency traders, the HFTs in Michael Lewis's book, Flash Boys, which was about a Canadian mutual fund manager who discovered how his fund was being front run by HFTs, which resulted in very poor fills. Lewis seems to imply through his book that the market is rigged for larger investors because HFTs often physically located very close to the exchange, can spot orders coming through and more quickly by shares ahead of these large orders, only to flip them moments later at a higher price back to these institutions. Are HFTs a significant problem to worry about? Okay. There's a lot to go through there as well. So a good question. Firstly, since the HFT Flash Boys book has come a lot of HFTs have closed. There was a high point for that industry and they sort of merged a number of them close. Of course, there's still some available. Secondly, the ones that are still trading, generally operating around the equity space, where they can trade in larger size. So for me, my students will look at futures markets, which are often too small, but they're still a lot of HFTs or some EFTs playing in that space. But a couple of things. So you've hit on a really interesting point there. A lot of people talk about HFTs as market makers and you do mention the word front running there, which is a really classic. I mean, most people you're asking about what market makers do. They think front run. And there are a lot of HFTs that are programmed in that way. Market making is not about front running. That is just a small part of it. And that's why I said like the skills a lot. So these firms can do that. They can do that more in equities than they probably can in futures. Why? Because there's not a lot of big orders. If you look at the NQ futures, for example, it's two's one's three's two's one's three's. Which one of those orders you're going to front run? You know, you didn't front run a three lot order. Right. Your front run a big order and an equity fine. Okay. That's fine. But market making is more than front running. In fact, market making is about filling. Front running is about not filling. Right. It's about jumping in front of a big order. Market making your whole point is that you can feel big orders. And that's to me when you're market making, if you're market maker, not just a front run, you're able to fill those big orders, not just front run them. And if you are a designated market maker, you will have to some on once to buy 50,000, 100,000 shares. Can you fill that order? If you can do that, then you're market maker. If you're not, if you're just front running, you're not a market maker. So they're not actually acting as market makers. They're just acting in a different way. So I want to just clear out the confusion about front running. That's not market making. But in that sense, if I'm not worried about the first, the HFTs in the futures market, which is where we're looking at, they're trading in such a short time frame. I can't even see them. They're probably largely trading against each other because they're the only ones trading in that time frame. If I'm only trading two lots in and out of NQES, because we are generally small traders in and out, I'm not worried about them front running me, because there's nothing to front run. Another key point about trading is I'm not trying to build edge over the market or over everybody. There are certain people and in futures markets, there's enough of them who trade in a certain way. I only need to know my edge over those and be able to pick them off enough. That should be fine. And then on the other occasions, when maybe an HFT or a bigger trade or someone else has filled me and I didn't want it, I'll just get out of the trade. I just get to get out. I'm never going to be obviously getting near 100%. From my perspective, in equity markets, I've been asked a lot. Does my strategy or Nordimathed would apply to equities? In theory, it does. In theory, the market making styles and all that would work. But I think it's more complex in equities. One of the reasons, for example, is in a number of equity markets around the world, orders are routed through a market maker. It's going to be very hard to act in a market making style when your order is being routed through someone else. So the ability to trade on an exchange directly against other traders, which futures gives us is why I think futures is the best product for traders to trade. They're the fairest product for small traders. So I love futures in that way. In theory, it can be applied to equities as well in reality in many markets. I think it'll be more difficult. Great. I'd like to go back just a couple of years to the meme stock craze, where some of us experienced this meme stock frenzy with GameStop AMC, among others, seeing stratospheric gains. As an options maker, were you surprised at just how high the implied volatility has got on these meme stocks? And did these prices fit into the traditional option pricing models like black sholes? Did the system work well during that crazy time? Yeah, that's a great question. The meme stock was an interesting time. A lot of talk about gamma squeezes, things like that. The response from the market makers was as you would probably expect. So the implied volatility got really high because once they realized what the game was, the market makers are going to be the first to respond to that. You know, market makers always generally have to be the first to spot where there's a problem in the first to react. So they acted well. They effectively said to these people, if you're going to buy these things, we're going to make you pay for them, right? And they made them pay for them. And one thing to understand here is that market makers can short out of the money calls, the market can rally, okay, they can short loss the market can rally and the market maker can mean out of that. You can't, you know, so one of the, one actually, that's a strategy a lot of market makers want. They like being short call options. And in the meme stocks, it was mainly short. The problem will come if it goes through your strike too much. But selling out of the money call options, particularly for that higher price, if the stinting fact is a market maker, if you sell those very expensive call options and the market falls, that's your biggest weakness there, most likely. Why is that? Because when you sell the calls, you buy stock. Oh, because yeah. And because they're very expensive, your delta is going to be too high. So you're buying too much stock effectively. So the hardest thing there is a market maker is to work out what delta's you really want to be on. And I suspect some market makers may have sold options on a certain implied vol, but perhaps hedged on a different delta. I don't know. I wasn't an option's market maker at that point, but the options market makers responded as we would expect them to be. They reprised those options. And we never heard any mention really of market makers struggling there. There was a lot of talk about gamma squeezes and squeeze and squeeze and squeeze. Perhaps which, you know, from a direction perspective, but not from a P&L perspective. I think the market makers, and I heard on a podcast, I think it may have been this one, head of one of the option market makers saying it wasn't that bad for them. They weren't getting. If you know, one of the classic things about market making is this, if you know something's going to happen, you plan for it. It's a bit like saying, are the week before, you know, most years, most weeks of the year, supermarkets might sell 10 turkeys. And then the week before Thanksgiving, they sell millions of turkeys. Aren't they going to be short turkeys? Well, guess what? Because they know it. They buy millions of turkeys the week before, right? Or the two weeks before. As a market maker, if you know something's going to happen, if you see something's going to happen, you prepare for it. I always laugh at some of the analysis of options market makers out there at the moment. Or, you know, if this happens, they're going to lose this. No, if this happens, they know that, right? They know that already. And if you know a risk, you can plan for a risk. So I suspect that once market makers realize what the game was, they just priced up the options. They priced them very expensively. It was going to be quite hard to make money, ultimately, from them. And look, it was an interesting time, right? And initially, like always, when there's something that the first people to get involved made money, the last people to get involved got smashed. That's just classic. Right. Once the market makers readjusted, the last people came into that type of trade, got hurt. There was not, there was no money in it for them. And it actually became very difficult. Now, in terms of the model itself, any market maker of options will tell you the black shows model is nothing more than a guide. It kind of is a guide that tells us also we have this idea of what a delta is. So if I'm trading with someone else and we want to do a delta neutral trade, he gives us a kind of a guide of what a delta might be, although I might have it on a different implied role in different delta. But every options market maker knows this flaws in that model, every option market maker will tweak around it. And every market maker knows just a guide. So and extremes, that model is just, yeah, it's really just a loose guide. Particularly when you get to like the 200, 300 implied role that we got in those meme stocks, you really have to be very careful. It's very difficult to hedge. If you look to that point, for example, on these calls, they almost all were, even a call option was way out of the money was given 45 delta 50. I mean, everything at 200, 300, vol is got like a 40 50% chance of finishing in the money or 50 delta. It's like, well, that's crazy. That's what it is. And at that point, they have very difficult to trade. Real specialist again, a bit like zero data expiry options. Anything could extremes and zero day have extreme gammas. Anything could extremes are very difficult to trade. And reality is, most traders should stay away from them. During this time with the meme stocks, I noticed that the short interest just went through the roof and a lot of talk about creating these short squeezes. And the longs would be screaming, oh, shorts have to cover. And I'm just wondering, you know, when old short participants could be covering, while new, deeper pocketed shorts enter later with a substance of position sizes, you know, that could still be small relative to the overall position, overall portfolio. As a market maker, can you see data to indicate the average weighted price of the shorts to help you determine what is the likelihood of a real short squeeze taking this thing to the moon? So first, I'm not an options market maker at the moment. So for the hedge fund, I design option trades, but I'm not a market maker. So I don't need to drill down into the data that much. And for the trades that we do, I don't drill down to that degree. Secondly, as a market maker, your main job is to make prices right and then position yourself. So you're trading in and out to position yourself to the modern options market maker has so many ways of diversifying their risk that I think that talks about squeezes and that I just think that they, and because of the volumes themselves, so what's your best way of diversifying risk as an option market maker is just to trade out. Now, if you're trading a product that trades three times a day, okay, you're going to have a hard time and there's, you know, just five option market makers. You're going to have a hard time trading out of risk, but we're talking about products that are trading thousands, tens of thousands, hundreds of thousands of times a day, that that's your way of trading out. Option market makers, technically most of the time are trying to trade out of all risks, gamma risk as much as they can across spreading out. So I think a lot of the discussion personally, and again, options market maker guy would be the right one, but I think that a lot of people's views about what their positions are. I think of a misguided. I don't think they have near the risk that people think and I can't be happy to be corrected. I'll give an example about this type of thing. So in the options world, there's every quarter, end of every quarter, there'll be a number of accounts out there talking about the JP Morgan collot trade, okay, the JP Morgan fund collot trade that happens at the roll over at the end of every quarter. Now, a year and a half ago, there was a lot of misinformation about that about the delta effect of that, all right, and that got that was big for all my goodness. This is going to create huge delta effect, and it turned out no, it didn't because it was delta neutral. So we already saw that there was a misinformation out there, but you'll have things like now, I laugh at this, but there are some, quite well-known people in this space will say things like, there's 30,000, 40,000 of these collars to be rolled over. Market makers are short these strikes and long these strikes from that collot trade. And my most obvious thing I'm going to say here about that is, if you think the market makers three months after the original trade still have the same exposure to those strikes as they had three months ago, you're dreaming. I mean, they're no way. They would have traded in and out of those strikes thousands of times. The first thing is to try and get rid of strike risk. So there's still a lot of people talk about, oh yeah, well, market makers are long this strike as we get to the end of that collot. No, they were. They did that three months ago, but three months later, how many times have those strikes traded? And you'll get situations, for example, where the market maker may have traded, you know, the out of the money call strike, for example. Perhaps the index is rallied sharply, which happens quite a bit right. We've had eight, nine, 10% rally in that quarter. Those call options have gone from being in the money call options to now, sorry, out of the money call options, they're now in the money, which means they're technically functioning now as an out of the money put option, which gives the market maker away. Another way of exiting that strike risk, because now the puts are trading, whereas when they were an out of the money call in the money put the put would not have traded much, but now the puts are trading more. He can get out. He or she can get out of the that strike a lot easier. There's simply no way the option market makers still have the same exposure to those strikes as they had three months ago. Yet that's what the commentary is for the. In fact, some of the, you know, the more popular accounts and the options and volatility space watch out for market makers on these strikes. I might say there's a lot what I'm saying is essentially sorry, I'm probably waffling is this a lot of misinformation about how market makers are positioned a lot of talk about their weaknesses and I've always you know, I have a saying about large traders. If you can understand if you can understand the positioning of these big traders either you're wrong or they're rubbish. And in the case of these option market makers they're not rubbish, they're very good. And I think I think they're quite happy for them is information of course. I think that's why they don't dispel it right. So something like I've just explained with the options is a very easy thing to dispel for anyone who's been an option market maker yet that's still a very widely accepted view that the options market maker still have that position three months later. Why don't they dispel it because they're happy for of course they are. If you're trading in a big trading book of any kind you're more than happy for people to have the wrong idea. In fact any trader I mean even for myself I know there's a lot of misinformation about what I do out there. I'm quite cool with that. I don't mind that if people misunderstand what I'm doing and I'm not going to out I'm not going to go out there and tell people no no no this is what I do. Well this is Kevin we hope you're enjoying this episode so far. If you are, take a second to leave a comment. We read them all and truly care about what you think. And if you haven't yet subscribed to our email list, visit chatwithtraders.com and click subscribe so we can keep you posted on information that matters. Now back to the chat with our guest. My understanding is that you're currently running a hedge fund. Yes, so we thought, so I've worked with a guy and we started designing trades together about probably nearly 10 years ago now. And we found some cool strategies which we eventually decided to package up and to put in and start a fund. We decided to launch that. It was just before COVID. It was just not a great time in terms of being able to go out and sell. So we kind of put that on the back burner now. Now we kind of relaunching the fund now. So we have a very specific style of trades that we want. So we designed strategies with roughly zero correlation to equities, which is extremely hard. There's the industry itself finds that extremely difficult to get to zero correlation. So we feel that that's a real niche that we can try and exploit if we can design those trades. And finally enough, the way we do some of those, particularly with the option trades we use is with some of the old market making techniques. When we see a weakness in a trade that we designed, often it'll be an old market making one of these techniques that I used years ago could reduce that weakness in that trade. You're also using some of your order flow strategies with the uncorrelated assets that you're looking for. So not the order first trades at the moment, although I would actually like to get if I could automate this, I would definitely put these in because they were classifiers, non-correlation into the fund because they're manual and I would need to have a bank of trade as rich at the moment we don't have. But at some point, I would like to get these strategies in. But no, but there are certain techniques, certain things that we did as market makers of options back in the day that if to reduce risk essentially, okay, this could happen at this time, how can we reduce risk? There were certain things that we would learn that we would do, probably be called old fashioned now, but we had to, like I said, we weren't able to cross spread across multiple contracts. So sometimes it's still amazing like now. So my partner is a PhD in stats. He's the quant side of things. He'd like to help design the trades. He then tests it. And usually with a quant aspect, you'll get the data for a trade and then you'll essentially go through a process that we don't like, which is trying to improve the trade, which is like, if I change this and I change that, and that can be for a lot of funds, that's generally curve fitting, right? You end up with something that looks like it's improved, but it's not. We don't like that process. So we try not to do it, but what we do instead is I'll often say something like, well, back in my day sort of thing, I think if we did this, it would improve that weakness. It would reduce that. And then we would test that. And more often than not, that will actually be shown to have worked. So in that sense, we're not curvefitting because we actually kind of created the solution. We saw it. And the number of times that's happened where we have a trade, we'd like to trade idea, but there's still some sort of weakness in it. We want to improve on. And it's just like this is what we would have done with that option trade as a market maker, put that into the thing, test it. Yep, that's helped. So that way we know it's not curvefitted. We've actually come up with a solution. Again, that's old school. My generation of traders, I was talking to someone yesterday, a son of a friend of mine, who wants to trade. And I just said to him, learn all the basics yourself. Because when you're only using computers and programs, how do you know if what it's spitting out is wrong? And there's a lot of traders out there, they option traders, you know, if they're, if they were putting in trade into the machine, into their broker platform, how would they know if it was giving them a false equity curve? Those of us that trade on the floor, we needed to know, right? Because we didn't have, we had to do it all in our head. And when our runner would give us our position back after maybe 10, 20 trades, it'd come back, we had to look at it and go, no, that's wrong. Give it back to him. That's wrong. We had to know it was wrong. So we had to learn that skill. So I still think that's a powerful skill set. I still feel underlying what is actually happening here? What did make this trade work? What didn't make it work? Rather than just, yeah, the ability to code in that is great, but sometimes you can just spit out curvefitting information, which is not going to help. How many different types of markets are you, is your hedge fund involved in? So at the moment, we have seven or eight different types of strategies involved in an options we have on NASDAQ, S&P and Russell. We have some statistical arbitrage trades, which are pairs ETFs trades, so that they'll be country, V country. We have VIX trades in there at the moment. We have dozens more strategies. We want to test, but we were trying to raise more money now, we were trying to raise money and start the fund so that we can then go through and test the other trades. Essentially, what we say to ourselves is we'll trade anything that's exchanged traded and liquid. So we want, liquid exchange trades, which would then give us the ability to grow the fund. And then we then around that we'll try and design trades, and we just sit around thinking what's type of trade in this market could potentially give us zero correlation to equities roughly. And then we go about the testing strategies of it. Over what time periods do you look at for calculating correlations between the different markets and how often do you find yourself needing to change the relative weighting because the correlations change depending on what time frame you're looking at? Yeah, so we're not trading the correlations of the markets. We're designing trades that don't have a correlation to the S&P 500 index. So for that, or we, so potentially we could take any index and try to design something around that. And the key factor is does this have a, you know, somewhere between, you know, minus 0.3 and plus 0.1 or something like that. So that's what we've done. Now, you know, what's interesting is that we, there's some strategies that has been semi erosion of profit. We should expect over time, right? Over, but, you know, one or two of it, some of the trades we actually first designed seven, eight years ago still perform reasonably well. And again, at this certain things about the way we design and trade and try to do that, I think, helps that to happen. Again, because of we, we're proactive in how we create the trades. We're not just searching through data, looking for things at work. We're proactively designing in an old fashion way. Probably makes us a little bit harder for other quants to find what we do. Perhaps I don't know, what we're interested in. Some strategies, of course, over time, the performance of job. We would expect that. We would always expect we have to design you on this. That's part of the game. To the performance might drop, but let's be more strategies. We hope in the future that will increase performance. The key thing is the correlation. Does it stay roughly, you know, around that zero level to S&P 500? Yes, it has consistently in all conditions. So if the S&P route is one month and falls an X, we've been about the same zero correlation roughly. So that's that's the main thing for us. Because this industry, again, I come back to the start about more information. There was shouldn't it lead to better outcomes? I feel that, again, the trading skills getting lost. If you can look at some of even some of the better performing hedge funds. And if people have read even the book about Renaissance, which is a fantastic performing hedge fund, but a lot of hedge funds, a lot of traders, even good ones, have a P&L profile is they make money when equities and risk assets go up and they lose when they go down. I grew up in an era where that you'd be out of business if that happened to you. As an independent trader trading my own money as a market maker, we had to make money in all market conditions. There was no written a piece recently on LinkedIn about this. We didn't have the comfort of saying, yeah, well, we had a bad year, but everybody had a bad year, which is kind of like a common thing now, right? Yeah, we lost, but everybody lost. Like I'd never taken comfort in that because I've traded so much on my own account. That's never comfort in that. You have to find a way. So I feel that at Morgan's Danny put out some research that the hedge fund industry's correlation to equities. It's just been on upward curve for the last 10, 15 years. It's now over 80%. Hedge funds now as an industry correlates 80% with equities that to me, they're not doing their job. And to me again, it says with people without skill set that couldn't try and design trades in a different way. I think we have edge there. I think we have something of value. Irrespective of our performance necessarily, because reducing risk, reducing correlation risk adds value. So we're going to, we know, for example, we're going to underperform in ball markets. If the S&P goes up 25%, we're going to underperform that almost every time. But we don't think investors will worry too much about that if we can reduce correlation risk. We tend to make money when the S&P falls. And any years where there's reasonable volatility, we should be okay on as well. But reducing correlation risk, I think it's becoming one of the hardest things for investors. And that's a niche that we hope we're one of the few players in. And I said the skill set required for that is perhaps a little bit different, which is why there's very few hedge funds in that space. So to wrap things up, what do you struggle with most as a trader? I think in the modern world, there looks like there's so many opportunities. And you're constantly hearing about new potential things, whether that's crypto option. Some say, I'll crypto, there's so much in there. And you can go down so many rabbit holes. And so, and I did for a while on some of those. And you can take up so much time. And I realize when you have, when you have edge somewhere, just keep to that edge. And don't get distracted by other things. Work out what you're good at, work out what you know, and grind that edge as hard as you can. So staying, or, you know, really trying to stay out of the. discussion and then for a while getting involved into many discussions and that I've done not particularly active on social media things like that I think it can be pretty bad I say I was fortunate. I got to learn to trade during a crash and That really just said to me you know that idea of Can't afford to hold losses be humble every day could be just a disaster just I eat really Really help so yeah struggle with the noise basically. I think every you know I think it's a common thing for traders the noise keep away from noise I've got distracted with someone. Oh, this is happening and if you enough people Who you think should be respected? I'm talking about it. I think you can get distracted Can I find a trade for that and then you've heard I told them I say that was actually nonsense in the first place Yeah, just keep to your side more often than not now. It's keep to myself and to my my small group around me Um, because there's so much distraction Right. Yeah. Have any of your children picked up the trading bug like their father Uh, not at the moment. No, my son's very mathematical Um, which is great and he says it's all right. I think at some point he could turn into it Um, but no, which I'm quite happy with. It's a tough industry. I'm not so sorry. What my kids do it He's he's much smarter than me. He's in a very good career path Mm-hmm great. Well, Gary. Uh, thank you for coming on chat with traders My pleasure. Thanks for having me on. Yeah. Uh, how can our listeners get in touch with you? Um, I have a couple of websites. So for information about me Gary northern calm um Nordic method calm is the scouting method I have a free options course as well on learn options. Net if people want to learn options There's a free course there and there's some books. I've got some books on Amazon that I've written if people are interested in why they might most likely to fail if they use TA There's Technical analysis exposed right. Yeah, it's quite a quite a comprehensive book. I just want you Great. I hope you enjoyed it. Yeah. Great. Well, thank you. Thank you You've reached the end of this episode of chat with traders, but rest assured there are more episodes loaded with real market insight and zero hype on the way soon So to stay updated with each great new release Subscribe to the podcast and iTunes and we'd love it if you leave a rating and review. We'll catch you next time on chat with traders. You