Tim Bourquin: Hello, everybody. Welcome back to TraderInterviews.com. Thanks very much for joining me for another episode this week. As usual, the idea of every interview is to give you something to think about in your own trading and maybe apply some strategies and some philosophies to the markets that you may not have considered in the past but that other traders are using. So, our guest today is Jamie and we're going to talk to him about his trading style. And he's got a website that some of you may have heard of that we're going to talk about as well. So Jamie, thanks very much for joining me on the phone today.

Jamie: Oh, thanks for having me. I appreciate it.

Tim Bourquin: Well, the question I always start with traders is for them to describe the kind of trader they are. So if you can kind of describe for us, are you a day trader, a swing trader, a technician? What is it for you?

Jamie: I guess I would call myself a day trader, momentum news trader type of thing. I do take some swing positions usually if it's they're catalyst or special situations based, but the majority of everything I do is sort of higher volume intraday in and out stuff.

Tim Bourquin: Okay. So even for most strict intraday day traders, they don't watch a lot of news. They may get the news just as an instigator for the movement. How do you use news intraday?

Jamie: You know, I forgot who wrote it, but there's a quote out there about the only maybe efficient part of the market that you can steadily beat the market is by having a live wire financial news wire that you have access to. And what happens today is that things really do matter in terms of seconds rather than even minutes or hours like they used to. So, I use the news by knowing all the different sites that are out there that are pushing out market-breaking news. Filtering them, consolidating them, and knowing where I am on the Daisy Chain helps me sort of get in and out of a position at the right time. And that two-minute edge or three-minute edge that I might have is the is the catalyst to making some money on it while when I'm buying I'm sorry, when I'm selling, everybody else is maybe buying and I catch that little move before they catch onto it.

Tim Bourquin: Do you really have two or three minutes these days? I would have thought that pretty much that angle is or that edge is gone.

Jamie: When you get two or three minutes, it's great because then you really capture a larger part of the move. But it's really not gone. There's a variety of sites out there that have breaking news or rumors or whether it's filtering of a macro news, and really analyzing it quicker than you may be able to analyze it. There still is quite an edge.

Tim Bourquin: Can you talk about some of those sites you use?

Jamie: Some of the other websites that have news coming out that you can sort of either game with you or game against you, or game in the news that they put out to help you is Trade the News, briefing.com, theflyonthewall.com, you know. All these types of sites break the analyst recommendation, the breaking macro news, the chatter or as I call it chowder. Being from Massachusetts, I like to sort of make fun of it because nothing is funnier than somebody write unconfirmed rumor because I'm not sure how you confirm a rumor, you know. So being from Cape Cod, I call it chowder. And then with my subscribers especially that they know that take it for what it's worth but that's why the stock is spiking or that's why the stock is just fell out of bed 1% or something. This is why. When you know where the rest of the traders are information-wise, I knowing that it's on my site and then you hear it on Trade the News a minute later, it really helps you know where you are on the Daisy Chain. So if you bought something because if there's a rumor and then the stocks moved but then you hear it on Trade the News, you know that may be the end of the chain. So it's a good time to get out.

Tim Bourquin: How would you say, how many of your trades each day are based on those types of breaking news stories?

Jamie: For me, probably only about 35%. You know, the other 65% are my analysis of something that's happened. For example, this morning, I think premarket, Dr. Pepper (DPS) came out and said that Coke was paying them 800 million for distribution rights of their product. You know, the stock immediately went up half a point, but because I knew that in the past or last two or three months, there had been some chatter or chowder saying that Coke was going to buy Dr. Pepper, that would be a time to maybe short it especially with the volatility and the shortsightedness of the market in terms of the edge has been by shorting. So, if something spikes up because of news that necessarily is left in the market, expect that that's a great point to put out a short. So you short it up half a dollar and you buy it back down like ˘25.

Tim Bourquin: That's a good point because if I was just coming into the market and was relatively new to DPS, I wouldn't know that. I'd be wondering what the heck happened? This is great news! And yet, the stock is going down.

Jamie: Right, absolutely. I mean, markets are about expectations, you know. You know, the best question that comes along all the time or the funniest one is "Oh, but I read the news. It was great! Well, why is the stock down?" Well everybody expected ˘27. Even though ˘23 was great, it's not ˘27, and so you sell it, you know. And that's the same thing that happens with FDA trial results and things like that, where you may read it as sort of the layman and say, "Oh 68% efficacy with a drug." But if you knew that the market was expecting 80%, that's a complete disappointment. And that's why having like for us, having the community of 170 guys, ten of guys really know what was expected. So you don't need to do as much homework. It doesn't mean it's easier but it certainly helps having somebody who has done their homework. They'll give you a quick opinion when some sort of breaking news comes out.

Tim Bourquin: And that seems to happen to every stock. It didn't happen to Google for a long time until it finally did. They beat earnings and stock went down anyway. It had gotten hammered. The only stock that it seems not to happen to, for now anyway, is Apple. No matter what they do, the stock goes up.

Jamie: Well, I mean today, with Apple, it was a perfect example. You know, we had not only I'm trying to picture if you didn't have sort of access to these different sites and things. If you're playing Apple, you say, "Wow!" You know, everything you hear on TV is great. But you know, we're in the in our in the chat forum talking about the live feed from some Twitter Apple feed or something saying the iPad demonstration is not working 'cause they can't get I mean, the iPhone demonstration is not working because they can't get Wi-Fi, you know. You know, Steve Jobs has asked everybody to turn off their Wi-Fi in the auditorium so he can get it for his phone things like that, and the stock went from up 4 to down 4 to flat to down 4, you know. But if you don't have if you don't have some of these news by if you're not a technician and you don't have the news, you're really playing at a disadvantage in the market.

Tim Bourquin: I'm glad I got a chance to talk to you because you hear so many traders I talk to so many traders that are pure technicians that have totally disregarded the news. It's almost refreshing to hear somebody that says, "Now, look, the news is still important." I mean, I think everybody realizes the news is important long term, but the shorter the term to the trader, it seems that the less they discount news as important to their trading.

Jamie: Yeah. Well it's interesting I think because of obviously the internet, but you know, has advanced things like news. But it's one thing that just have a quick newsfeed. But if you're an individual trader whether you're at a home or in a prop shop or in a hedge fund or a bank depending on what you're paying for or access for there's different feeds that are giving you different things. And if you can somehow either afford to get them all or filter them together and have really like honest conversations about it, it's really tough. That being said, the technicians are great. They do what they do. It's just levels and it's just it's if it gets here, I sell it. I don't care what the news is. I don't want to know what the news it. That's great. But it's difficult if you're going to do anything that's sort of qualitative based without having an idea why things are happening.

Tim Bourquin: All right. Let's follow this news direction here a little bit and then we'll talk about those technicals. On the news, once you're in, because you think you've got a little bit of an edge in terms of speed on getting into something before the news really hits the major news wires, are you deciding at what point you're going to get out or stop loss, and what do your basal sinks on?

Jamie: I think it depends on it really depends on each situation, each, you know not just comes from I guess I've been doing it since 1993. I've been sitting in front of a screen 250 days a year trading essentially my own P&L since '97. So at some point I know, "Okay, this is just a if you were categorize them, this is just a chowder play of ˘10, ˘15 by 3000, 10,000, make ˘10 to ˘15 and be out." This one like DPS, maybe I have an opinion on it and so I can short it and really wait a bit. With stop losses, this type of trading if you enter a stop loss, you enter a little bit wider, I think the normal. Because when you're potentially early on some sort of information, like when news come across and you have it early, sometimes you, I hate to say it, have it too early. So the stock doesn't react the way you would think it would, so you have to be careful putting in a stop loss that's too close.

Tim Bourquin: Will you wait in that case if it's…

Jamie: Well, you can put one in. I think you put in farther away, you know. Because what happens a lot of times is somebody sees Piper upgrades let's just say IBM. Piper upgrades IBM. It's not on any of the Trade the News's or the briefing.coms or anything, and the stock sort of continues to tick down lower. The you know, the other input is the market keeps getting better and you say, "Wait, maybe this information is wrong," you know. If you put a stop out too early or too tight when you get elected, the socket then rip a dollar because we really just had it so early that the market wasn't able to respond yet to it. So that's sometimes the issue with having the information too early. So if you're a well-capitalized trader and you're 100% on your information, you buy more and just try and see as best as you can do. But it's just it's like playing a video game to some degree, but you have the edge, and how you manage your money and how you manage each position is it really if you're not going to make it scientific which is hard in with the sort of qualitative trading, it really just comes down to whatever your buying power is set at. You're going to do so many shares and you're going to manage you risks so that you're managing the individual risk in the trade but also the risk for the day. If you're down a decent amount of money, you're obviously going to go and take smaller positions. If you're up you can sort of let things ride and get up to a level that you want to be at and sort of slow it down again.

Tim Bourquin: Are you finding that most of your plays are from within? Are you looking for news that are on a specific basket of stocks or would you take anything across the market you think looks interesting?

Jamie: Well, I mean literally anything that comes across the market that looks interesting. So you can take an example for today was an afterhours trade AONE Systems, A-O-N-E. A headline comes across. I caught it on Bloomberg News that said AONE signed a pact with NavStar Systems which is a trucking N-A-V, it's a trucking company. So, with that trade, you take you take you take I think it was $8.30. I bought 2000 at $8.40 and sold them at $8.90 just because I like to trade on 10s and 90s. If I if I get long on a stock, I like to offer it out at the ˘90 level instead of a figure just because I like to put out a position some place that's further away than I would normally sell it, but that at least I have something out there that I can reevaluate later. It also takes makes it easier for me to make larger profits I think because I think what happens, and I'm probably I think I'm digressing from the original question, but what happens when people trade Apple for example, they buy it at some random number 255.63. Let's say you buy 1000 shares and where do you sell? Well, if you are being an emotional trader, you just wait and then the SMPs tick down and the Nasdaq futures tick down and you go, "Uh-oh," and you sell it. It's not working and then it goes up $3. What I like to do is put out if I bought 1000, I put up 300 at 255.90, 300 at 256.90, and 300 at 257.90. So every dollar up, I'm offering a third of the position type of thing. Maybe I get elected on the first one, but you know, I'm looking for that larger move.

Tim Bourquin: Does that order pretty much go in immediately once you're confirmed? Once you're executed?

Jamie: No, I'll put those in away from market.

Tim Bourquin: Right. But as soon as you're in the trade, I'm saying.

Jamie: Yeah, yeah. I'll usually put out put out. It depends on the stock, but I'll put out at least a third of it, you know ˘27 down or whatever it is that gets me to like a 10 or a 90. So from short, I'll bid 255.10, 254.10, 253.10, and then I can always go back and evaluate and cover that on a stop or something like that or a trailing stop.

Tim Bourquin: And the 10s and the 90s, that's just something you felt is worthwhile for you?

Jamie: It's just something I've used for probably 10 or 15 years, because I guess I feel like a lot of people will bid the figure, and especially maybe in the retail world. You know, they'll be bidding 255, I'll bid 255.10, and you'd be surprised how many times that it hits me and not them.

Tim Bourquin: Okay.

Jamie: You know, it's just a little thing. I don't know statistical thing to prove it, but it just seems to help.

Tim Bourquin: Let's talk about size-wise. Do you scale in the same way you talk about scaling out?

Jamie: Yeah. I mean, I think you have to. That's the bottom line. I know that from experience. My worst trades absolutely are the ones that started too large. You know, historically and we all nobody is perfect in trading. I mean, anybody who says they are is lying, but we all have things that we do wrong. And historically, one of my largest mistakes has been, "Oh, my God. This is this is the big news right here. You have to," you know, and you put your whole, your all in on the first execution. The minute you do that, you're wrong, 'cause there's a couple of reasons why I think. One is if you do that, the order, when it goes against you, you want to add more immediately. And nowadays, it seems like for me at least and other traders may agree, every position sort of goes against you immediately. Whether it's small or big, it's just in other words used to seeing instant P&L on our screens, tick for tick type of thing. It just seems the market either lacks the liquidity and/or is being is overpopulated by algorithms that see that, "Oh, some abnormal 10,000 share blocks just went on. I'm going to bid up the stock." You know, like if somebody just sold 10,000 on the bid and that was out of the VWAP or something like that and the algorithm comes up and bids up the stock a little bit to get you to cover some, it seems that if you're putting on your biggest position as your first one, you're just doomed for failure to finish with the idea of the P&L when it finally comes in your favor. Let's say it goes, you sell 20,000 shares at ˘15 against you, you're down $3000. So instantly you're saying, "Okay. Oops, now I'm wrong." So your first, your initial reaction is back to even, cut it in half. So I'm back to even. I've bought 5000 shares worth 10,000 shares back. My P&L is flat. It goes ˘5 or ˘10 in your favor, boom, close the thing. Whoo! I'm out, you know. Like, I was wrong. And then it falls $3 which you would have made a large amount of money in. But because you were our minds are looking for instant relief, for instant success, the fact that we were down, we're looking to just close ourselves.

Tim Bourquin: Yeah.

Jamie: And that happens also with large overnight positions which I can talk about later but…

Tim Bourquin: That happens with me. I've seen this for a long time. You hear the statistics that 90 if not more percent of traders lose money, but my sense is that I was that in that 90% until I just waited, until I had a little more patience. And I think more traders are wrong right away, and then they're right. Eventually, they are right the way they thought but they just didn't wait long enough. I don't know what it is about the market that does that.

Jamie: I don't think it's just the waiting, you know. What it comes down to. It's the money management. You know, if you were to say, "Okay," you know, "every position that I do is 150,000 shares, right?" I even wrote up a little Excel calculator type of thing that takes in the it says every position I can type it in to be whatever I want. So it can be 500,000. It can be 100,000. And it gives me a share amount. It's not just based on the dollar amount divided by the stock price. It actually pulls in the volatility for the last 100 days of the stock. So if the volatility is high, really high, it reduces the number of shares I can have. If it's low, it let's it go up to the full dollar amount divided by the share price. And when I look at that and I kind of use that when I'm getting a little bit of control, and so I'll type in let's say it's 250,000 per position, Apple will let me do, I'm just I don't have it in front of me, but will let me do 1700 shares, right? You know, IBM might let me do let's say they're on the same price, might let me do 2500 shares. And then on that spreadsheet, I take the net amount that I can have and I have one-third right below it. So it's 2500. And then in green, it has a third of that number. So if I had 2500, maybe I can have 800 shares as my third position. So I'll start at 800, because if I start at 2500, I'm going to lose money on that position. If I start at 800 and it goes up a dollar against me, not a big deal. Put on another 800. If it goes up another dollar and I'm still thinking I'm right, put on another 800. Okay. Now, I'm at my max position. But by money managing and going small to begin, then getting larger whether the stock is against you or with you. It could be going with you and you can add. But by just resisting that urge to be big from the very first execution, I think it is if you learn nothing else, playing with that way can help you incredibly. Because if you have a smaller position and it starts going with you, great, you can add. If it starts going against you, great, you can add, you know. If not this, "Okay, I just got even. I have to cover. Hoo!" You know, and now I'm going to fold 5% of my favor. I've got nothing because I really just needed to relieve myself of that burden of having a position.

Tim Bourquin: I guess that keeps you on the right side. Because you're starting smaller, you're not so emotionally attached to that loss or win either way.

Jamie: Absolutely.

Tim Bourquin: Yeah.

Jamie: Absolutely. And when and if you are wrong, you're literally you just need to be flat and you just need to have your P&L flat and you're happy. You know, that's the psychic end of it, I think, or the psychology end of it, you know. But if you I've always said it's all subject, but I've always said that the only way to when you make the most money in this market and the most consistent money is when you literally quote unquote don't care.

Tim Bourquin: Right.

Jamie: And that means when you're looking at the market so objectively, you don't care. You don't care if it goes up. You don't care if it goes down. You've got no preconceived notion of what it needs to do. You don't have you're not out to get Apple, you know. You just went up $4 and I'm a big believer of some things on TV. Everybody is really positive. Everybody is really positive and the stock starts ticking down it's like "Wait, there's no negative news out there." Like then you take a shot on the short side, like you need to, you know. But you need to do it in a way that it's not like you've been fighting this for 50 points. It's just yeah, you know what? It doesn't act right. You do it small enough. If it works for you, great. Like if you do let's say your position max is 1000 shares, and if you get off 300 shares, out of those 300, you're going to let go three points. The 1000 shares that you may have put on if it goes if it goes half a dollar against you and then comes in ˘20, I mean ˘70 and you're up ˘20 from a trade, you might take it off then. And so you only make $200 on 1000 shares or you could have made $900 on 300 shares, you know.

Tim Bourquin: Which is exactly why most people can make money paper trading too 'cause they don't care at that point. It's not real money.

Jamie: That is absolutely right. "No, I would have done it here. I did it here. Look, I executed in a demo account," you know.

Tim Bourquin: Right, right.

Jamie: Yeah because there is no P&L associated with it, and you're not all in, you know. You're just like, "I'd buy 100 shares or I'd buy you know."

Tim Bourquin: Are you a fan of paper trading though to get practice?

Jamie: Not really. And I think I think what I always say to people or say I think because I have another thought. But I think you can just do it smaller. I mean literally if you I don't I mean, obviously you're not going to do it as a professional, but you know, buy 25 shares, you know. Just see if it works. If it starts working, buy 100 shares. If it starts working, buy 300 shares, you know. But paper, trading because there's no actually economic event that comes with it, there's really no you have to feel pain. You have to feel pleasure. The reason my site is successful, we've been running for 10 years, you know. I think it's because everybody in there knows that I'm the real deal in terms of trading. I am feeling the pain. I'm feeling the pleasure. I'm telling them when I'm right. I'm telling them when I'm wrong. You know, I don't tell people to do anything. I just say, "This is what I'm doing." You know, when I'm wrong, I say "Oh, right. That sucked. You know, that was stupid," or something. And when I'm right, it's like, "Okay. Well, good idea," you know. But if I wasn't and that's also some of the other sites that we discussed earlier, why I think they're sort of fundamentally flawed in terms of not giving advice but having some sort of interactive community type of thing, is that the guys on there aren't really trading. You know, they may say, "We like," you know, "We like crude here." But they may say it 33 days in 70 days of being down and any other trade who has logged in for two days and keeps coming down is probably getting out to getting short or something, you know. But it isn't saying you can't say for 30 days in a down trending market, "I like it, I like it, I like it, I like it, I like it," because there's no validity to it. You felt no pain because you're just making it up.

Tim Bourquin: If it was real money…

Jamie: But if you're trading if you're trading half a million shares a day for good or for bad, and having daily P&Ls of whatever it is, you can then honestly say, "No, this market feels great." And if you can do that and you're right and you're good, that's invaluable, you know.

Tim Bourquin: Let's switch gears real quick and talk about the technical side of it. What kind of technical things do you watch in on a chart?

Jamie: I really am very, very limited, and I think it's fair and it's in a good way. I don't watch any stochastics, any RSIs, any of that stuff. I watch two-day moving average and a 90-day moving average. Two-day moving average if I'm thinking about something for the day for the day trade or maybe till tomorrow type of thing, and 90-day if I'm thinking where the stock bend, you know. Oh I haven't looked at Bank of America for a while. Where does it bend so I can get an idea of where it's going type of thing? If I use a 90-day level, I use that as a line of descent sort of thing. So just taking the Bank of America. If I pull it up here, it's 14.83 close, 16.75 was my 90-day moving average, and so now I consider that a broken stock for me because I know that if I buy something, that most of them and all therefore is a couple of days the most.

Tim Bourquin: Just simple moving averages.

Jamie: Just absolute simple moving average. I look at a five-minute bar on the two days, you know. So two days of data, five-minute candlestick, two-day moving average. That's it, simple moving average. Nothing fancy. I do put Bollinger bands on there and I just put those on so that I can they're not really helpful to me whatsoever.

Tim Bourquin: It sounds like you truly are 90% news and then maybe you'll look at the moving average just to see if technically it's within a range where it should be.

Jamie: Yeah, and absolutely. But I look at if let's say I'm trading Apple, and I can even pull it up here. If I'm trading Apple and there is some news and I'm watching it, and I like it from the short sight for whatever reason and I can and I can find a level that it breaks, that just helps me, you know. So if I say that, "Okay. Here's the intraday level is 253 and it breaks 253, then I can be 252.10, 251.10 for a stock to buy it back if I'm short."

Tim Bourquin: It sounds like you'd almost do it opposite of what a technician does, which is 90% technicals and then they'll go out and check 10% news just to make sure they're not going to get blasted by something.

Jamie: Yeah, yeah, yeah, I guess you could say that. I mean I sometimes I look up and it's like, "Oh, gees. I don't have any charts up." You know, I like to watch the nowadays, I like to watch the euro, I like to watch gold, you know. Today for example gold was the initial move today that showed us that we were going to be down 100 points. Because out of the blue, gold started rallying and taking off and it took the equity market a little bit to figure out that something was sort of weird in Macro Land, and the gold rip was probably the precursor or the canary in the mine for the equity falloff.

Tim Bourquin: Now, a lot of traders have followed gold of course and they would watch that, but it seems like you've got to be really top down these days, starting with global, and be wary of those stuffs. I don't remember ever watching the euro three or four years ago, and yet, it's something that I check every day now. There's something definitely that has changed over the past few years.

Jamie: Oh, yeah. The euro leads the U.S. equities now and I agree with you 100%. Two years ago, I wouldn't even know how to get the euro up, like I really wouldn't know how to get it on my screen. Now, it's like front and center and it's there.

Tim Bourquin: So how does a trader deal with them? We had information overload enough back then. I mean now, it's like where do you kind of start? You just have to pick somewhere.

Jamie: Really, in a way, in this business right now, I think you really need to be able to multitask. I think that ADD guys obviously are good traders but you need to you need to be able to multitask and you need to be able to watch a multitude of things with tempered temperament, meaning not to overreact on anything but to sort of see where the trend is going for the micro and the macro. So, if it's all about euro now and everybody's talking about euro, then watch the euro and make sure that you are understanding when the euro is breaking that two-day line of descent. And maybe evaluate, "Well, maybe I shouldn't be long on IBM or this Apple is rolling over type of thing. Okay, so that's where it's coming from." You know, knowing the news, so if you hear something or see something that's says EU's Junker says we won't have a euro in two years, you better know at that point that you better have your hands on the spiders and selling literally as many as you can because you do have that edge at that point. You may be you might have a five-second edge, but the market is going to react and you are going to be there first.

Tim Bourquin: How long did it take you as we finish up here, how long did it take you to get confident as a trader in your strategies and using the news and 'cause I can imagine that's that's experience, bringing up the symbols quickly, deciding what price and form you're in. That's going to happen very quickly.

Jamie: Yeah, it has to happen it has to happen. You have to be really quick. You know, the one thing that I see in in my bird seed or cat feed or whatever they call it is I see guys who constantly are looking for someone else's opinion, right? And when you're doing that, and you know, obviously, you have to have your own thoughts of how things are going to work. And obviously when somebody says I'm just trying to find something like general growth type of thing, you have to know what the symbol is. You know, you have to know that ahead at anytime. Because right now, you're computing against computers that are going to automatically know, "Okay, GGP." So GGP, general growth, buy out 17 billion. You have to have an idea of what that translates into and you have to be quick. You don't have to be a math whiz, but you have to know GGP buy how to pull up news quickly so that you can see it really quickly, confirm it, buy it, and sell it. We have guys in our room that their whole business is filtering the news, making sure they have the fastest feed, having their level twos and all the things that they trade through set up so that they can explode into a stock when there's big news out. And some of these guys will wait and do two trades a day, and they wait for there's always a piece of news, you know. So I remember even when Millipore got bought out. You know, there was a guy in our office in our office who bought 100,000 shares at 70 and sold them at 80.

Tim Bourquin: Wow!

Jamie: Or something like that in five minutes. But he was he was it said Millipore buyout. It was on the news, it was on the chatter, it was a real headline. So he was able to, you know. When you know you have it, you have to be able to be there to jump on it because you're going to make those big trades that way. And I think an important thing about trading is you do have to make money in the big trades.

Tim Bourquin: For you personally, was it a year or two years before you could really get quick with the symbols and news and kind of have a feel for it?

Jamie: It probably took me three years, you know.

Tim Bourquin: Okay.

Jamie: It took me I started on the options floor, in the AMEX options floor and it probably took me it probably took me a year to get my fractions right. So by the time I figured I went 16th in it plus a 32nd one I was on my way to figuring out the rest. But yeah, it just takes time. I mean you could say to anybody, "Yeah, if I sat there 17 years later, 250 days a year, I know all the symbols too," you know, and granted that's absolutely true. But I think there is an advantage to the advantage of trading the news, you do have an edge, you do have you do have a way that you can consistently sort of quote unquote beat the market. If you systematically make it happen, it can be done. I see it happening every day, you know. Having other eyes and ears to help you with stuff is invaluable. You know, the markets are what they are, but you have to be able to translate things and turn them into your own ideas, and you know, and manage them. You know, at least you have a shot I think on a very difficult market.

Tim Bourquin: All right, last question here.

Jamie: Sure.

Tim Bourquin: Was there anything you did along the way in learning for your trading that you felt kind of took it to the next level, that really clicked for you, that got you in a big step to where you are today?

Jamie: Lose money, you know. Lose money and then you try not to do it ever again. So if you look back and say, "Why did I," you know, "God, I had such a horrible month." You know, if you're frank with yourself and you have the responsibility to yourself and to your business, 'cause really if you're doing this as a business, it's a business. If you have the responsibility to look back and see where your mistakes are, I guarantee you with any trader, if you sat down with them, if I sat down with them for five minutes, we'd figure out what his weaknesses are and where you consistently lose money. For me, it was always getting too big, you know. If I was too big in something, you could I mean looking back and looking from an outsider's perspective, you could guarantee when I was going to lose money. "Op," you know, you just say, "Here it goes again," you know. You know, you can say that about any trader. Maybe it's being too quick with trades or maybe it's really just having a lack of innate ideas to capitalize on, you know. You have to have an idea. You have to do it within the money that you're allocated or the money that makes it doable or the risk capital that you can afford to lose. And you need to have the ability to, when you are right, make money, you know. I used to teach a class way back when when I was at a day trading job. That was how to short stocks. Everybody would say, "Jamie is good at shorting stocks. Let's have him talk to the guys." And so I would say to the guys, "What's your biggest complaint?" "Well, I never," you know, just in trading, never mind short stocks, but you know, "I'm always just going and making the ˘5. I'm never making the money that I feel it should. Then it always goes in my favor but I'm so quick to take the profit." And I would say to them, "Okay. Do yourself a favor. Tomorrow, trade 100 shares only just for the day, but whenever you put on a position that you like, you can't sell it or buy it back until you make or lose a dollar." 'Cause you got to know what a dollar feels like, you know. This is I mean, this was back in probably in 1999 or something. But for a lot of guys, they don't know how to they don't know how to short Apple at 259 and buy it at 250, like it just can't happen for them, you know. And until you can understand like, "Okay, this is a bigger move," or "This has to be scalped because it's just a it's a quick news thing and I don't care if it goes up another dollar 'cause I'm not going to hold it, but I know that on every single one," you know. But if you have an idea and you want to short Apple, do it within the money that you can afford. Make the real money, you know. Make three points. Make five points. I was trading 300 shares of Apple today because I knew that was going to be volatile with the Jobs thing with the Steve Jobs presentation. So trade 300 but make three points on something, you know.

Tim Bourquin: Don't trade scared.

Jamie: Right. But when you trade 100 and then it goes up and you still like, trade 200. You know, get up to two and get up three. That's your max position? Fine. You know, make four points on that or whatever it is. You know, you have to allow yourself to make money. You have to take you have to be able to make $10,000 a day and lose $1000 a day type of thing. I mean, they're all I'm not saying anything that nobody has heard before, but you know, it takes a while to get there. If you're starting out, you just need to, you know. You need to figure out if you have the guts for it, if you can really treat it like a business. And really, I think the most important is money management and I just learned that from experience, because it's really easy to get excited into a position and get sloppy and get too big. And you buy a small stock and then you add and then you add. I mean, I know so many people that, including myself, that have lost fortunes on buying a $3 stock, buying it at $2, buying it at $1, buying it at ˘50 and selling it at ˘20, you know. And you make money out of 90 trades and then you lose all that money you made on 90 trades you lose on some stupid position like that.

Tim Bourquin: Trying to be right.

Jamie: Yeah. That or just not admitting you're wrong and that's hard.

Tim Bourquin: Jamie, I appreciate it. You've been on the phone for a long time, longer than I promised. I appreciate that. Tell us your URL so that people can check that out.

Jamie: The website is thehammerstone.com. There is a section for The Hammerstone Forum. We're not a web-based site so you need to go on and fill out you contact information, and I'll get you up on the system, because it's an application-based thing that, you know. We've got real traders in there. It's it's a great product that has been around for ten years. Anybody who wants to check it out is welcome to call me. Whether you're been doing it for ten years or one year at least give it a shot and check it out for a week.

Tim Bourquin: Excellent. Well, thank you very much. We'll link to that. Jamie, thanks very much for your time. I really appreciate you sharing some of your thoughts with us about the market.

Jamie: My pleasure. I hope I didn't talk too much.

Tim Bourquin: Not at all. It was great. Thanks a lot.

Jamie: Okay. Take care, my friend.