Phil Interview

Transcript

Cam: Hey, it's Cam for Investors Underground. Welcome to another trader interview. It's been a pretty crazy couple of weeks at IU. Nate’s been putting in back-to-back five-figure day profits. We're at all-time highs with memberships in the IU community, and I've been working hard putting together live trading footage for the second Investors Live DVD. Today, I've got the privilege to take some time out and chat for around 20 minutes today with one of the moderators and top verified traders in the Investors Underground chatroom. Phil, aka Ozarktrades. How are you doing, Phil?

Phil: Good, Cam. How are you doing?

Cam: I'm doing pretty well. Why don’t we hand the mic to you for a bit and you can tell us how you got started trading?

Phil: I got started trading in college. Really, I just wanted some extra money and I thought the stock market would be the way to go about it. For the few years of college, all I did was study charts day in and day out. I looked at charts over and over and over again and tried to understand their patterns. I did that for really a couple of years. In my sophomore year of college, I started trading the $3,000 I had made over the summer, and I started just trading part-time. Over my sophomore year, I slowly lost that money. I did the same thing my junior year. I'd work all summer, save up about $3,000 or $4,000 after expenses, and I would slowly trade that part-time in college. I lost that money again my junior year. My senior year of college, did the same thing. Had about $4,000 or $5,000, and the patterns started to make a little more sense to me. I actually learned how to go short, and one of my first shorts ever was a company called, their symbol was Café. The company I think was called Host America. They put out some fake Walmart press release and the stock ran from $4 or $5 all the way up to, I think, $15 or $16. So, I shorted it.

I went all in, shorted it at $15 or $16, and the stock was halted for about a month, which really worried me. I was reading on all these message boards that the stock was going to open up at $30 or $40 and I was going to be wiped out. I was really worried, because at that time I really didn't have a clue what was going on. Needless to say, after around a month, it opened up at $4 or $5, and I think that $4,000 or $5,000 I originally had turned into about $15,000, which to me was just amazing. I kind of opened up my eyes into shorting, and I thought, this could be my niche. This what I should try to do. I have looked over so many charts the previous few years. What I thought I would really do is go for shorting parabolic moves. I hit a really good market my senior year of college. There was a lot of good stocks, a lot of good momentum stocks. That $5,000 I started with in the fall of my senior year, I turned into right at a $1 million when I graduated nine months later. I had a really good market on my side, but I finally figured out how to work those charts, try and hit the top and running them all the way back down. That's really how I got started trading.

Cam: Whoa. $5,000 to $1 million in nine months? That's out of control.

Phil: Yes.

Cam: Did you hold onto it all?

Phil: At that time, that was really the peak, because I was extremely cocky. I was 22 years old. I had $1 million. I went out a piece of vacation property and I thought, if I just turned $5,000 into $1 million, now I need to turn $1 million into $3 or $4 million. Needless to say, by the end of the summer that $1 million went down to $500,000 pretty quick. I really had no rules. I didn't know anything about position sizing, money management. All I knew how to do was to find a good chart and trade it. That humbled me pretty fast. I immediately took $400,000, wired it out of my account, and I just started trading again with right at $100,000. I just kept on going from there.

Cam: Can you tell us a little more about what you're looking for from these charts?

Phil: Really, what I'm looking for is a parabolic move. Something like Plug, for instance. When back in, what was in, March or so it ran from $5 or $6 all the way up to $12 in a couple days. That stock went from right around $12 all the way down to $6 in one day. I'm looking for a parabolic move. Something that's just way overextended. I'm trying to figure out, basically all my trading is done on technical analysis, but I do try to figure out why it happened. Why did it take place? Was it fake news? Is the company pumping it up? Is the CEO pumping it up? Is there PR behind it? What's going on? I try to find the catalyst if I can, but the main way I trade them is, I just trade price and volume. I look at the price action and I just try to trade the trend. At the end of the day, when I look at my schedule D, 95% of my money is going to come in with 5% of my trades. I make virtually all of my money in the big parabolic moves. I try to short them, and I hold them as long as I can on the downside.

Cam: When was it that you realized that this was something you could scale into and do for a living?

Phil: It was probably my senior year of college when I got to $1 million. Like I said, I had lost money two years before, trading part-time. As soon as I had got up to $1 million, I thought, I can definitely do this full-time, but again, I lost $500,000 pretty quick. That immediately humbled me, and I knew at that point I needed to figure something else out. I knew if I found a good chart, I could trade it, but unfortunately those good charts are not out there all the time, and I like to trade every day. At that point in time, I needed to learn some other things like position sizing, money management. I needed some rules in place, because I knew if I found a good chart, I could trade it and I can make money. The problem is, I overtrade, I think like a lot of people. When that good chart or that parabolic move is not out there, I really need to just limit my losses, cut my losses and just not even trade.

Cam: For something like PLUG, are you starting in short on the front side while it's still going up? Or are you waiting for it to top out and hit it on the backside for the fade?

Phil: On Plug, I goofed it up. I traded on the front side. I started on the front side, and I got squeezed pretty hard. Unfortunately, that is not the way I like to do it. That's really not the way I do it. I like to really hit the back side of the move where I first see a down move on big volume. That tells me, the up trend is over. Now, it's safe to jump in shorts. To me, trading the front end of the move is just not my strong point at all, and I try to stay away from it. I think it's pretty dangerous unless you get a true parabolic move on maybe the one or five-minute chart. Then, I'll start in. Other than that, I really like to see some downward movement on heavy volume before I jump in with conviction and know that the trade is going to work for me. Usually, when I place a trade, I want to be in the money immediately. I do not like to have losses. If I get in a trade and it immediately goes against me, I will not add. If it goes against me too much, even if I'm down $1,000 or a couple thousand bucks, I get out. I just do not want that trade going against me. I want to be in the green immediately, right off the bat. That tells me I'm right. Then, I will go forward and add to that position.

Cam: I recently read a quote on your Twitter that you like to trade small and infrequently until you see that one opportunity that almost guarantees money, and then jump in both of your feet. Can you talk a little more about that?

Phil: Once a year, I try to look at all my trades to see, where did I make money? Where did I lose money? For me, it all breaks down to just a few trades. I love trading, and I definitely overtrade. On a daily basis, I have so many trades where I'll make $1,000, lose $1,000. Make a couple thousand, lose $500, but at the end of the day, all my money is made in huge chunks, making $40,000, $50,000, $60,000 on this. $20,000, $30,000, $40,000 on this. It's all in those big gains, those big wins. From my perspective, I would like to, I think it's best to stay out the market. Don’t trade unless I see that huge winner, that huge opportunity. For me, everything else, it's almost a wash.

Cam: You had been a successful trader independently. Where exactly does Investors Underground fit into the mix?

Phil: Really, I found Nate on Twitter maybe three or four years ago. I followed him for a little bit. I could tell he knew exactly what he was talking about. I joined the chat, and it immediately paid off me, because I was looking for new ideas. I'm always looking to learn as a trader. Like I said, I trade those big momentum names fairly well, but unfortunately, you're not always going to see a stock like Plug. They might only pop up once a month, once every two months, once every six months. What Nate does really well and what he talks a lot in chat so much is how you have to adapt to the trader and you have to evolve. You've got to take what the market gives you, and the market’s not always going to give you one of those big movers. You might have to scalp. Getting in making $500 here, $1,000 there, $2,000 there. The other thing I really like about chat, something that I've never had idea about was OTCs.

Until I talked to Nate, watched his DVD, that's really where I learned to trade OTCs. I had never traded OTCs until this past year. In 2014, I haven’t made much. Maybe I've made $50,000, $60,000 on OTCs, but to me that's a huge amount of money because it's something I've never done before. What I was really looking to do in Investors Underground is learn new avenues. Learn OTCs, learn how to scalp. Just learn how to do so many other things that I've never known before. The other thing I really learned from Nate, the problem that I had originally when I was trading and I still do today is, I don’t have a problem finding the winners. I can do that fairly well, and I don’t always hit them well. I don’t trade them as well as I could.

There's always room for improvement. My biggest problem several years ago, and when I started was, I would have so many losers. I could find a stock, make $30,000, $40,000, $50,000 on it, but the very next day I would lose $20,000 trading something else. Something that he's really taught me and the community has really taught me is not how to improve on my winners so much, but how to just cut out my losers. Just eliminate them. Stop them and know, when do I jump in a trade with both feet? When do I go all in versus when do I just take a partial position and just try to scalp a little bit out of the trade? That's what I've really learned in the room, and from Nate.

Cam: For anybody watching the interview right now, if you're looking for some unadvertised promo codes to get started here, drop me an email. I'm at [email protected]. I'll get back to you with some deals within a couple of hours. What do you take away most from the community in Investors Underground?

Phil: Really, it's helped me out a lot. Number one, just meeting a community of traders. No matter what kind of trader you are, whether you're an OTC trader, momentum, earnings, winners or losers, news driven stocks, no matter what you like there are other successful traders in the room that are out there. It is a great opportunity to network with these traders. When I started trading, I had no tools. I had no Twitter. I had no chatroom. I learned everything on my own, and I did everything on my own. If I could have found this chatroom when I started, it would have, without a doubt, saved me hundreds of thousands of dollars.

It's not so much about the chatroom, but the webinars that are given a couple times of month. You learn so much about trading, so many chart patterns, so many setups, and you get to dig inside Nate’s mind as to what he's thinking on these entries and exits. That's invaluable. If I could have had that when I started again, it would have just been invaluable. Some people, they go to school and they spend tens of thousands if not hundreds of thousands of dollars on their education, books, fees, etc., and it's just amazing to me that some people might not want to spend $1,000 for a DVD or chatroom when you can learn vast amounts of information.

Cam: I always joke with new traders. If they're opening up an account with $5,000 or $6,000, which is a fine amount to start with but they say they don’t want to spend 10% of their account on a DVD or membership, I always say to just come back to me when they've only got 10% left. Then, they'll be ready to learn.

Phil: Make sure you at least have $500 left in your account so you buy and start over. Yeah, I completely agree. That's what I said. I lost money two years in a row. Luckily, I only had $3,000 to $4,000 to start with, and luckily, I was in college. So, losing of $3,000 or $4,000 to me at the time, it didn't mean anything. I could make it back. Again, it took me two to three years to figure out what I was doing. Two to three years to be successful and make money, but if I would have had these tools back then, it might have taken six months. I don't know, but I know I have lost tons and tons and tons of money, and I wish I could have that money back.

Cam: Don’t we all? Especially in your early days through all those losses, I can imagine it was pretty demoralizing. How did you push through the pain?

Phil: I was motivated. I don’t give up. It's just as simple as that. When I want to do something and I know it can be done, I will stop at nothing to accomplish it. I could see my mistakes. I could see my mistakes on a daily basis. I knew if I just keep doing it, keep pushing through, I knew there was a way out there. I knew there was a method that I could figure out how to do this, and it took a while. I still go through a lot of pain, and I still make big mistakes, but at the end of the day, I'm very motivated. I'm very driven. I work very hard, and I won't give up. No matter what it takes, I won't give up. Even if the market changes and I have to figure out a new method, I'm willing to do that. When I was young, all I could say is, it's motivation. Money motivates me. That's all I can say.

Cam: What do you do after you finish up a day in front of the screens?

Phil: It's tough. I try to clear my mind. I've got to get out of the house. I usually go work out. I try to take my mind off the market. Unfortunately, I like to work. I own some rental properties as a side investment. Those keep me busy. The market’s tough. The market is very strenuous. For me personally, most of my money comes in big chunks. Unfortunately, that doesn't come every day. You might go several weeks in a row without a huge win. After a while, it takes its emotional toll on you. You need to take a break. You need to get away from the market. You need to have something that you can do as a hobby to take your mind off of it.

Cam: When did you get your hands on Nate’s DVD? What were your key takeaways from it?

Phil: I got Nate’s DVD shortly after it came out. I watched the entire thing, and I thought, damn. If I could have had this DVD 10 years ago when I started trading, it would have saved me tens of thousands, if not hundreds of thousands of dollars of losses. At the same time, I was very happy that I had it. I wish it had come out a lot sooner. I think, for me the biggest benefit of the DVD was the OTC section because I had never traded OTC before. I really didn't know anything about them. I was very interested, because a lot of people were making money in OTC at the time. I watched that section a few times, tried trading OTCs a little bit, and just this year alone, I think I've made $50,000 or $60,000 off OTCs. The reason for it is straight from the DVD. That's my only education I've had in it.

Cam: Come October, are we going to see you in Vegas for Nate’s charity get-together?

Phil: Absolutely. I will be there. Can't wait. Very excited to be in Vegas with everybody.

Cam: Well, Phil, I've had a lot of fun chatting today. Both the members and the Investors Underground community and the subscribers to our YouTube channel have been hitting me up on a daily basis to get this interview out to them. I'm sure they'll really appreciate you spending the time with me today to talk about some of your success in the markets. Thanks again, bro.

Phil: Sure. No problem, Cam. I appreciate it.

Key Points

  • Phil would work during summers in college and save that money for trading. He turned $5,000 into over $1 million by graduation
  • Learn position sizing and money management or you will risk account threatening losses
  • Phil looks at parabolic moves and focuses on the WHY. If the move is unjustified, there is a short opportunity.
  • 95% of your profits are going to come from 5% of your trades
  • Short the backside of the move to avoid unnecessary risk
  • Analyze your trades at least once per year to see what you are doing right/wrong