Tim Bourquin: Hello, everybody. Welcome back to TraderInterviews.com. Thanks for joining me for another show this week. As usual, we're interviewing real traders who are talking about their real strategies. And no theory allowed here, so we hope that you'll get something to take out of this and use in your trading abilities each day. So, our guest today is Brendan and he is a fulltime trader. We're going to talk to him about how he finds good opportunities in his overall approach to the market as well. So, Brendan, thanks very much for joining me on the phone today.

Brendan Egan Thanks, Tim. Thanks for having me. It's great to be here.

Tim Bourquin: Well, how do you classify yourself as a trader? That's always my first question. How do you define yourself, either as a day trader, a swing trader, or what?

Brendan Egan I'm primarily a day trader; however, I am actually a fulltime student as well, so I understand people that are either working that are also students out there kind of have a time management issue, so I do take some swing trades from time to time as well.

Tim Bourquin: And what markets do you primarily trade?

Brendan Egan 95% of the time, I'm in the stock market. I have done a little bit of experimentation in the Forex market.

Tim Bourquin: Do you have a basket of stocks that you trade or how do you find how you're going to trade every day?

Brendan Egan Sure. Most of the time, I'm sticking with three or four main stocks. I'm usually with Apple, Amazon, and RIM, which are kind of my three go-to stocks. If they're just puttering around, I have like nine more stocks that I keep an eye on, but I usually stick to a pretty small basket.

Tim Bourquin: So what is in those three stocks that you look for every day to find a trading opportunity?

Brendan Egan Sure. Well, the reason that I watch these three stocks is primarily they are quick movers and they're very liquid stocks. They have high volume and they're not too heavily manipulated as far as some of the low volume stocks go. But what I look for basically is I have pretty much I'd say three or four patterns I like to look for, and I just kind of keep an eye out for those in these stocks.

Tim Bourquin: Can you talk about those patterns? Maybe start with one, your favorite pattern. What does it look on a chart if you had the ideal setup?

Brendan Egan Sure. I'm strictly a price action trader so I don't have any indicators on my chart. I'm just looking at candlesticks in the volume, and basically, one of my favorite plays, it's really simple. I just look for a really strong area of either support or resistance, typically 3 to 12 days prior to today, and I look for a price that kind of run away from that area for some time, to spend time a little distance away from that. And I look for the first time the price comes back and touches that area of support or resistance, and I take either my long or short position there. And it's been a really effective and profitable trade for me.

Tim Bourquin: How many trades a week do you find with that setup?

Brendan Egan They're, I mean, they're really everywhere. I'd say if I just look at three stocks, I could find at least 10 or 15 of those trades a week.

Tim Bourquin: What timeframe are you using?

Brendan Egan I'm usually looking at the 5-minute chart, but then sometimes to find those trades, if I need to look a little further back, I look at the 15-minute chart.

Tim Bourquin: Okay. And so, just to clarify for myself here. So, you're looking for things that are hitting a resistance or a support level that is you said 3 to 12 days back?

Brendan Egan Right, exactly. I look for it to spend some time away from that support or resistance level, and I look for it the first time that it comes back and touches that level. Price always at least responds usually at 20 to 40 cents to that level, and I like to leverage myself a little bit. So out of 10 or 40 cents, I'm able to make a really good trade out of that.

Tim Bourquin: All right. So, do you set goals for yourself each day for how much money you want to make or week?

Brendan Egan Yup, I usually set weekly goals. I'm trying to make usually anywhere between like 1200 and 1500 a week. That's a good amount for me. Sometimes I obviously don't hit those goals. Sometimes I'm in the negative like every trader, but that's the goal that I really have set for myself and I'm working pretty hard at consistently hitting that goal.

Tim Bourquin: All right. Well, talk about how you execute or actually get into each trade. How do you decide what price you're looking for and whether you use limit orders or market orders. What do you do?

Brendan Egan Sure. On that type of scenario, I just don't want to usually use a market order. I'd say maybe 80% of my trades I'm just using a market order. I have actually just kind of the F keys on the top of my keyboard. I have little stickers that I printed out and they're hot keys for my platform which is a really great way to trade. I found these bullets that I use by pointing and clicking at them with a mouse. So, I have, buttons for market orders of X amount of shares. And then also from time to time, if something is running up too quickly or the price is moving real fast, I will use a limit order just to make sure I don't get a really terrible fill. But most of the time, I am using market orders in my day trading. If I'm doing a swing trade, I only use a limit order and I also use a like a hard stop-loss order as well.

Tim Bourquin: How about some of these other setups that you just said? You said three are your main bread and butter?

Brendan Egan Yup. The other ones, they are kind of more basic I guess. I look for ascending and descending triangles which most traders look for. From time to time, I'll trade the head and shoulders pattern. And then I also look for kind of like a breakout play and then a pullback and a retracement where I can find the pullback. And I mean, they're really pretty simple trades. I think most traders use them. It's nothing profound. It's just that I've really found great ways to execute these trades in great stocks. I think the trade have these trades, these types of setups every single day.

Tim Bourquin: When you graduate, is this what you want to do for a living or is this something you're making money just what are the long-term plans I guess?

Brendan Egan Sure. And I mean, it actually just started out as something to just kind of do while I was in school, just a kind of day to day and make a few bucks. But as I've progressed and as the years have gone by now and as I'm really getting into trading at a more advanced level, it's something that I am considering sticking with in the future.

Tim Bourquin: What advice do you have for anybody starting out right now in this market who are trying to make money here?

Brendan Egan Sure. I mean, it's a tough market right now. I started out when the market was crashing in a way. So, I mean, I've kind of been through a really unique experience I think in my trading and that I wasn't just around when the market was acting normal under normal volume. I've been around for some of these huge exaggerated price movements. So, if a trader is starting out right now, I think it's really important that they make sure they spend time with the market before they really jump in and risk all their money. Make sure they have a full understanding of how violent the market can move and how volatile it can be right now. So, just to make sure they have a real understanding of what price can do before they put their capital online.

Tim Bourquin: And with that volatility, are you setting pretty tight stops? Or further away, how are you deciding where to set those?

Brendan Egan You know, it really just depends on the actual trade. It depends on if there's multiple areas of support or resistance below or above my trade. So, it really depends. I always do make sure that my risk/reward ratio is pretty consistent, so I usually have a stop-loss area and if the price does move through that, I make sure I get out of the trade.

Tim Bourquin: Is it a mental stop or do you actually set this when you get into the trade?

Brendan Egan On day trading, I usually just do mental stop. If I'm swing trading, I will put on like a physical stop-loss order.

Tim Bourquin: And how about on the profit side? Where do you decide when to get out?

Brendan Egan Usually I'm looking for in my day trading like a minimum of 20 cents per trade, and usually, I don't look for something huge, a maximum maybe of 60 to 70 cents. It really just depends on where the next area of support or resistance lays so...

Tim Bourquin: With looking for only 20 cents or even 50 cents or so, how do you deal with that with commissions?

Brendan Egan Yeah, I mean, it can if I'm just getting a 20-cent trade, I figure maybe 3 or 4 cents of that trade is going towards commissions and fees. So, it can be tough at times, but the actual scenarios that I look for are really high probability. I'd say that maybe 70 to 80% of the time, they are winning positions. So, as long as I make 20 cents and I'm only risking 10 cents, in the long run it pans out.

Tim Bourquin: Are you using a direct access broker with low commissions or how does that work?

Brendan Egan Yeah. My commissions are just the commissions themselves. It's $3.90 for a thousand shares. So, it's a really low fee as far as the commissions go, and it's every hundred shares. So that makes 39 cents for a hundred shares basically, and so, I'm able to cover those pretty quickly.

Tim Bourquin: What software do you use to find your chart, to do your charting and then execute as well?

Brendan Egan Actually, I use two things. I use the charting which is provided by my broker and then I also use FreeStockCharts.com. I just use their free service. It's really a very robust charting platform. It's web-based. As far as kind of looking for patterns, I just I don't use any software. I don't do that at all. I think that a human needs to do that so it's something that I do on my own.

Tim Bourquin: And finally then, homework at night, do you do any research in the evenings or is this something where you just get up in the morning, turn the computer on, and when the market opens then go for it?

Brendan Egan Yup, sure. For my day trading, it's just kind of wake up in the morning. I have a routine that I go through every morning where I make sure that I wake up at least an hour before the market opens just to make sure I get everything done I want to get done in the morning, make sure I'm awake. And then usually in the first 15 minutes of the market, it's pretty volatile, so I'm not really placing too many trades. I usually spend that time looking at charts there looking to see what's going on in the news for the day. And that's for my day trading side of things. If I am taking swing trades, I do most of that research in the evening.

Tim Bourquin: And what are you looking for in that research?

Brendan Egan I'm usually looking at like a 15-minute or a 30-minute and then a daily chart, and I'm just looking for the patterns that I know are so reliable to me. I'm looking to see what price has done. I'm looking to see what volume has been doing. And usually when I take swing trades, I try to keep that within my basket of stocks. But on the swing trades, sometimes I do get outside of that basket. So, from time to time, I am just kind of surfing around looking at other stocks to see what they're doing.

Tim Bourquin: Well, Brendan, you also have a website where you kind of talk about some of these things as well. What is that? And talk about that for a second.

Brendan Egan Sure. That's a site that I actually just founded a few months ago. It's 123LearnToTrade.com, and on that site I offer mentoring services where I personally sit down with traders either in person if they're in my area or via Skype where we do like a web conference. And it's basically just kind of depending on where they are in their trading. If they're beginners, I kind of teach them all the little tips and tricks that I would have loved to be taught when I was a beginner. And if they're more advanced, I help them with issues ranging from their actual analysis to trading psychology. So I found that to be a very helpful service to new traders as well as advanced traders. And I'm actually in the process right now of releasing a 50-lesson video course on my site that basically outlines everything that I do in my trading, the setups that I look for, trading psychology exactly what I do every day to make money in the market.

Tim Bourquin: All right. So listeners we'll link to that, but it's 123LearnToTrade.com.

Brendan Egan Thanks, Tim.