Tim Grittani Interview

Transcript

CAM: Hey, it’s Cam from Investors Underground. Welcome to another trader interview. Today I’m talking with one of the early members of the Investors Underground community, who later became a moderator in the chat room and more recently a bit of an internet sensation who turned a few thousand dollars of his own money into over $1.5 million, trading stocks in a short amount of time. If you know anything about the trading world, you’ve certainly heard of him. I’m glad to be able to chat with him for around 20 minutes today, Tim Grittani.

TIM: Hi, how are you Cam?

CAM: I’m doing good. How’s things?

TIM: I’m doing well.

CAM: I’ve had a bunch of people from the community hit me up and ask if I can do an interview with you. Why don’t you kick things off and tell us how you got interested in stocks.

TIM: I basically got interested in stocks because I was a finance major at Marquette University and I was most of the way through my program already, having to go a semester long. It got to the point where I realized I don’t like a whole lot about finance. I basically decided that if I was going to stick with it, that I wanted to do something stock market related. Something about it just appealed to me, I was drawn to it. The idea of I guess turning money into more money. And, I just decided to explore it on my own a little bit and get started just so I could sound competent in job interviews.

I just wanted to open a small account, trade a little and gain that experience. But, it turned out that after the path I took following Tim Sykes and Nate and guys like that, that I decided I could just do it on my own.

CAM: That’s pretty inspiring. You know, I’m going to be going through some of the picture of your profit.ly chat and I noticed at the beginning that it was a little bit choppy up and down, up and down. Why don’t you tell us about your early days trading?

TIM: Early days trading were very frustrating. I did have about $12,000 or $13,000 in my accounts all together, but a lot of that was borrowed money from my parents and it was just to have the additional help of having more accounts open to get around pattern day trader rules and stuff like that. I was just trading with $1,500 to my name. I guess the first huddle I was really struggling to overcome, just was commissions alone, because trading $1,000 positions are cheaper, you already need a few percent just to break even after commissions, depending on who your broker is.

Other than that, the learning curve early on is just so steep, my biggest struggle was overcoming my emotions. Because any time a trade went live, it really didn’t matter what the setup was or how much money I put in, but my heart rate would go up, it would be really hard to keep a clear head just because I was so scared about having money on the line. It took a while to overcome that.

CAM: When was it that you started to see traction in what you were doing and decided that you were going to be able to make it full-time doing this for a living?

TIM: Well, I placed my first trade in May of 2011 and I think it was about November of 2011 where I said to myself, “Wow, I can really do this” because that six months in between, I had basically blown up my $1,500 portion of the account. I had worked a summer job thankfully, so I was able to refund and start from scratch again with another $1,500. It was the experience really from that September until November, I’d say, of building that account back up to break even, just through slow, steady consistent gains. Then in November hitting my first really big gain, which was about a $2,200 gain and new awesome penny stocks bump I would say.

It was right around then where I said to myself, “Wow, this is something I can do” because I had been consistent for a few months in row and now had a little more money to my, that I could really make something happen now.

CAM:   We know that some of your early lessons came from the Tim Sykes methods, you know shorting pump and dumps and buying break outs. Where else did you learn in the early days of your trading?

TIM: Well early days I was also looking Michael Goode’s blog, I think back then it was Reapertrades.com. But he had a lot of free content on there, so I was just watching his old trade recaps or watch lists or anything like that I felt like I could learn from. But also, back in 2011, Nate was still offering his scans for free and that was something I was looking at every single night, really whether I was in a position that he mentioned or not.

CAM: When did it become obvious to you that you wanted to become a member of the Investors Underground Community?

TIM: Well, I think you also had some free trials back then, because I drove them a little bit crazy early on. I believe I had done two or three different free trials with him before finally he cancelled one of my free trials and said basically, either I’ve got to get serious or--I just couldn’t mooch off of those free opportunities anymore. I think that part of what sparked me to join was when he switched over to a little more of a paid service and I couldn’t get that scan anymore. I really did miss being able to read his thoughts every night. But also, I just wanted to expand on my strategies a little, I wanted to learn NASDAQs better. And, while I’d already learned a great deal about OTCs from him, I knew that he was the guy to learn from on trading some of these more active NASDAQs.

CAM: Why don't you tell us about some of your newbie days trading at Investors Underground?

TIM: Relating to Investors Underground, guess one thing that stands out in the early days was, I first got started back in a pretty active time, during Pump and Dumps. One of the first trading days I ever sat through and watched was the day of the big LEXG dump when it dropped from $10 down to $3 in a couple of hours. One thing I remember from that day specifically is watching its Twitter as LEXG is dumping and he's calling these perfect dead bottoms every time it's getting ready to bounce, and I watch the same thing a few weeks later with JMN. I don't want to sound cheesy by saying it inspired me but at the same time it was something that I hadn’t even realized was possible, timing the market to that degree. It really intrigued me and really made me want to learn more about it.

CAM: And, in terms of subscribing to a “guru”, do you think that's the best way for people to learn how to trade?

TIM: I think a guru’s necessary. I really do believe that you need somebody there to point you in the right direction and to give you some set rules to follow. But, also just even the psychological point. When I was reading Nate's scans, just seeing some of his thoughts and the way he broke down some of these OTC pumps and what was going on behind the scenes in his mind was really fascinating to me. Yes, it's great to have a guru and yes, it's great to have one point in the right direction. But, you can't just lean on the guru for plays or whatever the next hot pick is. You do need to be willing to do that work on your own and put in the extra time. That was something I did as well because not only was I following what Nate was saying and what Tim Sites was saying. I was doing spreadsheets on my own and I was trying to track performance of promoters. I really was just trying to find any kind of reliable set up I could.

CAM: I've been reading a little bit of your blog, Trade the Ticker. Can you tell us about some of the concepts around that and what got you inspired to start it up?

TIM: Well, one of the early lessons I learned that made things click a little bit more for me was this quote that I always see Nate say which was, trade the ticker and not the company. I don't know if that was a phrase he coined or got off of someone else, but it really stuck with me because the point that it tries to hammer home is that you need to be trading the chart pattern and the price action and just ignoring all the other BS, like message board hype or whatever else is going on. So, what should my blog be named that would accurately reflect my trading style? It really was Trade the Ticker because so much of what I do now is, I care about chart patterns, I care about price action and that's it.

CAM: I watched one of your videos on YouTube where you mentioned that you remove your unrealized PNL number from your platform, and I thought it was sort of cool, the way that not only do you disconnect yourself from the story of the company or the story of the trade, but also you disconnect yourself from the emotional aspect of watching your trade profit or trade loss tick around as the price is moving up and down. So, in essence you're just trading the ticker and the chart and nothing else is influencing your decision?

TIM:   Even back then when I came to this realization, it wasn’t that I knew that much about the companies back then, but I knew what was affecting. What was affecting me the most was seeing how much I was up or down on a play because I would see that I was up and I'd get greedy and want the money in my pocket, or I would see that I was down and I'd get scared. So, taking that away and not having that staring me in the face helped me focus in more on what mattered, which was the chart.

CAM: That's really interesting. When I visited Nate towards the end of the production of the Textbook Trading DVD, which I guess we'll talk about in the bit, one of the things I noticed him do was when he was in a real big winner, he removed the PNL column from his platform so he could focus solely on the chart. While I was there I also watched Nate go through a bit of a drawdown in terms of a losing trade and he did exactly the same thing. I just found it sort of interesting that you both have the same kind of approach when it comes to focusing down on the chart.

TIM:   Right, and it's funny because even now when I get myself into trouble or when I do tick, it will be a little easier than normal. It usually is because I did peek at that or want to see what it was, and then get that in the back of my head. Had I not been thinking about that a few hours later, I'm back into a comfortable situation I kind of just stuck it out.

CAM:   I mentioned earlier that Nate finally released his DVD, Textbook Trading. I understand you've watched it. Can you let us know what you thought of it?

TIM: I thought it was a very complete DVD, one of the most complete ones I've seen because he's not only going over his chart patterns and stuff like that, but he also breaks down how he sets up the next day or how he tracks stock promoters. And, there's just a lot of other little random stuff in there along the way that I think really helps out someone who is a new trader, or even is a veteran. I'd reached $1 million in profits when I watched the DVD for the first time and I still picked up on a lot of stuff that I'd never seen before. One other angle that I liked too was the fact that it does cover NASDAQs and OTC stocks because one of the concepts I had trouble with early on when I was first starting was that, you have to play those two different ways. NASDAQs and OTCs are not the same thing. He does take the time to talk about them as different set-ups, make the distinguishment [sic] between the two of them, and I think it does make things simpler.

CAM: What were your favorite couple of takeaways, or maybe even aha moments when you're watching the DVD? I know you mentioned you were already an experienced trader when you were watching it for the first time. Did you learn anything new from it?

TIM:   If anything, I would say I picked up a little bit more on NASDAQ patterns because that is the one area where I'm still not the most comfortable. Just watching him break it down, at the end of the day it is similar patterns to OTC stocks, it's just applied a little bit differently. They don't collapse quite as fast and you need to have a little more patience. So far, patience is something that I've sucked with, at least when it comes to trading. But, it does make it a little bit easier to see that DVD and remember, I've got to think big-picture. I've got to think about float rotation. That's a concept that was completely new to me. I hadn’t really started hearing him throw around the term float rotation until a few months ago, when some of these low floats started going crazy. 

CAM: Okay, so now you've got your own strategy and you're making great gains. I've been watching you profit.ly chart and you've really been going power bollock and it's impressive to see those kinds of returns. What do you do to prepare yourself for each trading day?

TIM: Well, I start by checking my promotion emails. I like to see what the current hot promotions are and I immediately add those to my list. Beyond that, what's more important to me is seeing what OTC stocks are trading and borrowing because that is the main area of the market that I'm most comfortable with. Every night I'm running some variation of a scan where I'm basically looking for, what were the top percentage gainers in the OTC market, or what OTC stocks were trading at the most volume and were the most liquid? Sometimes, my basically scan results are a little bit too wide so I'll have to stop and go through daily charts, and then I start looking at chart patterns. But, if the stock is trading volume and the stock has a good range and a good chart pattern that I like, then I'm adding it to my watch list and I craft a plan for the next day for it.

CAM: Nice. Why don't you spend a little time talking about one or two of the big trading highlights of your career?

TIM: The biggest highlight trade that immediately comes to mind is the trades back in May of 2013 on FNMA, back when it had its huge run-up from, I think it was about $1 to $5 in a few days. One thing that I really was proud of with that trade was the fact that I played it both ways and made good money on both sides of it, all within a couple of hours. A lot of people I think, will see a stock and they'll say, is this stock a buy or a sell? They'll fail to recognize that it can be both. Fannie May on that given day, it had gone up three or four days in a row from $1 to $5.

It was a way over-extended chart and after playing a similar pattern with it the previous March I felt like I was ready for it this time. I got almost a perfect short sale on it, right off at the top of the stock at about 520, and was able to ride down most of the clacks with it, and then nailed the bounce play as well. Once the bounce had played out, I re-shorted at the top of the bounce, so I had three big trades on it. I think it was about $70,000 each trade, actually. It was pretty consistent. But, I totaled up to about a $215,000 day which was almost as much money as I had made up to that point.

CAM: I know a bunch of other guys in the Investors Underground chatroom made a ton of money on that play. Modern Rock was one of them, banking over $1,000,000 in a single day trading. Do you speak much to Modern Rock in chat?

TIM: No, not too much. We'll talk every now and then, but usually I think we're both just kind of busy doing our own thing.

CAM: Has he ever dropped to tell you to stop taking his fills?

TIM: No, I haven’t gotten yelled at about fills quite yet.

CAM: Well, I guess that's something you can aspire to work towards. I know you mentioned you followed Modern Rock on Twitter. Who else would you say are your top Twitter follows?

TIM: I'm watching Nate and Modern Rock, mostly. Those are the two traders that I would say I follow. Other than that, if I'm following anyone at all it's someone who I feel like one of their alerts could possibly move the market, and something that I could possibly scalp for a quick gain if I took a fast position on it.

CAM: Apart from Nate of course, who do you pay the most attention to in the Investors Underground room?

TIM: Obviously, Modern Rock. He doesn't talk too often but whenever he does, I like to take note. I describe Modern Rock to people by saying he trades a lot like me but he's ten times as good. I watch his gains every day on Twitter and I'm just amazed by what he can do. Besides Modern Rock, I'm always very interested to see what LX21 is doing because he understands NASDAQs on a level far beyond whatever I do. Some of the calls he makes and some of the patience he displays in his trades are just amazing to me, and I hope I can learn from him eventually.

CAM: You've been trading for several years now and you've seen great success. What can we all expect to see from Kroyrunner in the future?

TIM: In the future, I think that I'm just going to stick with trading the OTC hot movers as long as they last. I know there's a lot of speculation out there right now about the OTC market slowly dying off, or promoters dying off. Right now, I would say the market’s about as strong as I'd ever seen it, so it’s hard to feel discouraged about it. In the meantime, I also am going to keep myself in Investors Underground and I'm going to keep studying NASDAQs because ultimately, I would like to make that transition over. I know Nate was a guy who went from trading mainly OTCs to NASDAQs later in his career. I could very well see myself making the same switch someday. I just need to get a better understanding of the market first.

CAM: What would be your number one piece of advice for people starting out in this game?

TIM:   For people starting out I would say don't be in a rush to make it big. I see a lot of people come in, or a lot of people write me emails and under their signature it says, I'm the next millionaire student. I just want to caution people against going in with that kind of thinking because I've seen a lot of people make mistakes by pressing too hard, too soon and trying to force those big gains to happen rather than waiting for the right opportunities to make their gains. For a lot of the newbies, I want to tell home to trade small early, really learn what you're doing and develop consistency, and then maybe sizing a little bit bigger.

CAM: For the people, out there who are Team Site subscribers already, would you recommend Investors Underground as a good kind of second home, or place to further their trading education?

TIM: Absolutely, yeah.

CAM: And, you're one of the moderators in the Investors Underground chatroom. Can people drop you a line if they need some advice on trading or to found out what you're looking at in that particular moment?

TIM:   Absolutely, I'm always willing to help people with questions. I don't like it when people ask me whether they should buy a student or hold a stock or anything like that but I'm always happy to help people try to understand set-ups better or just answer any typical beginner questions.

CAM: One of the things that really impresses me about Nate is, even though he's had a lot of experience in the markets and has also achieved some really solid gains, he's always looking for new ways to learn, develop and adapt in the market on a weekly, monthly and yearly basis. How do you plan to continue learning and continue to develop yourself as a trader?

TIM:   I guess the way I would mainly want to develop is exploring all the markets and not just limiting myself to OTCs. I have said that I want to get a little bit better at NASDAQs but a step beyond that even, once I understood NASDAQs a little bit better and feel like I'm successful at trading them I think I want to maybe even take the next step into options trading. So, I really do just want to branch out and make myself a lot more diverse of a trader so that when one market is slow I don't necessarily have to sit on my hands, I have another market to turn to.

CAM: Where can people follow your Twitter and how can they check out your blog?

TIM:   My Twitter handle is Kroyrunner89, and you'll see me posted in Nate’s room or in the Tim alerts room [ph] or anything like that. As far as my blog goes, you can find it at [email protected] or you could drop me an email at company.

CAM: Tim, I really appreciate your time today. It's been a great insight and opportunity for our listeners to get into the mindset of what it takes to be a super successful trader and go from small to big in a real short amount of time. So, thanks for sharing all this info with us and I really look forward to seeing your PNL chart explode to the upside in the coming months and years.

TIM:   Thanks Cam, it was great talking to you.

CAM: Thanks again.

Key Points

  • Tim started with ~$13,000 and grew his account to a few million in a few years
  • Tim started trading OTC's and evolved to trade NASDAQs in order to expand his strategy
  • Focus on trading "tickers" vs. focusing on the underlying companies
  • Hide your P&L so you can focus on the trade itself
  • Scan for the top percentage gainers and stocks trading on high volume