Welcome back to the Trade Hacker Mindset podcast. In this episode, I've got a special guest with us today. We'll be joined by David Sun. Trading the markets can be difficult to master and seemingly just out of reach. Professional traders have a secret.  It requires the Trade Hacker Mindset. All right, welcome back. So I wanna introduce you all if you're not familiar with him to begin with. Welcome, David, how are you today? Hey, Steve, I am good. Thanks for inviting me to join you on the show. Yeah, so I originally kinda came across, kinda introduced online, I guess, to David through the Option Omega Academy. And we'll talk a little bit about this, but David has a free course on the Option Omega Academy called Spreadsheeting for Traders. And it's really interesting because I've been kinda looking for kind of a performance tracking spreadsheet over the years that does some different things, has some different capabilities, like making deposits and withdrawals and still calculating a time-weighted return and all this good stuff. And then David puts out this course and it basically had exactly what I was looking for. So I reached out to David and I said, hey, this is great. And asked him if he wanted to come on the pod. So honored that you are taking the time with us, David. Yeah, no problem. And it was a pleasure to talk about trading and especially a spreadsheet and geekery stuff. So, excited to be here. Awesome. So let's start with this. Tell us a little bit about kinda what you did, what your background is actually before you started trading. And then we'll get into how you trade and some of your kinda current strategies and structures. Yeah, so my background's in electrical engineering. So nothing finance related. And I got started back in grad school when I was doing my masters. So this was around 2008, 2009 or 2008, I guess. And I, you know, even if you weren't in finance or into the markets, the market made you into it during those years, right? Everyone was kind of thinking about it. So I picked my interest and I was actually gonna start, you know, looking into stock picking but my friend at grad school, he was already trading options. So he got me into it because he was like, hey, you know, he showed me a couple of things. And so interestingly enough, I started with options and not stocks. And furthermore, I started from selling options and not buying options. Cause I think a lot of people would start using for leverage and kind of those leverage bets. So I was starting with covered calls, cash and career puts. That was kinda the first thing I did.  It wasn't until, it wasn't until around 2017-ish that up until then it was kind of nothing really sophisticated and again, just selling puts and rolling them and really basic stuff. I found tasty trade, I guess not tasty live. And that was kind of just whole new fountain of knowledge. And that I think accelerated my learning curve and gave me a lot more concepts, learning about Delta and how Theta, the Greeks and all that. So that made me have sort of a level of confidence. And then I started developing some basic versions of the strategies that currently run and trying to be more systematic. Around 2018-ish, I got the idea to launch my first option based hedge fund. So I did that. And all the meantime, I was still learning and developing and researching and doing more strategies. I launched my second hedge fund in around 2021. And then somewhere in between there, I also started at my own podcast, The Trade Busters. And that's a separate thing. It's not related to the funds, but it was more like an outlet for me to connect with the retail crowd who I sort of still always associated with. I'm wrapped through pasty live and some of the Facebook groups I used to be in. So the podcast was meant to be kind of educational for retail-oriented options-based trading. And that itself has kind of grown and evolved. But this is kind of a high-level trajectory. And that kind of caught up to where I am now. So I know that was kind of like a quick 30,000 foot view, but I'm happy to dive in if you have any more specific questions about that particular timeline. Yeah, no, that's great. So you mentioned you have a couple of different hedge funds. Why do you have multiple hedge funds? Is it because they're completely separate strategies that you needed to keep separate? Or what's the purpose around that? A couple of different things. One was it was completely separate strategies in that my first fund that I started with that actually still run, it had a kind of a different mix of strategies. It was seven DTE, so weekly puts. Eventually I added a 90 DTE, kind of the theta engine strategy I teach in my podcast. And then we were shorter term, with one DTE, you know, overnight strangles, and then a zero DTE. And what happened was we had a lot of interest focused on the zero DTE stuff because of the lack of overnight risk. And then I happened to find a partner that was a friend of mine that also was a trading buddy that was into his backgrounds in software development. So he actually built out automation for us to kind of scale up the zero DTE. So we kind of just spun that out into a separate product. So it was a fund that was focused on zero DTE and it was automated. So that's kind of how that came along. Very cool. And so are these hedge funds, are these primarily you and a couple people so you can kind of aggregate the funds or are you actively bringing in outside investors? So as far as owning and operating, it's just me and my partner. So we manage, you know, we're kind of the portfolio managers and the investor relationships and the capital raising kind of all rolled into one. I mean, yeah, but these funds, a hedge fund is just a fancy term for a pooled vehicle. It's just structured as a limited partnership, which means investors just pull capital. So that just allows, it's more flexible, right? You get one large account you're trading and we have an account that kind of does all the accounting in terms of like how much each individual investor's stake is worth, right? It's just kind of the profits are all kind of allocated pro rata. And we just focus on, hey, trading this one large pot. Got it, got it.  And so can you talk at all about the amount of time and cost and structure around that? And just to kind of give people idea if it's worth it in certain situations or not from a scalability standpoint. Yeah, it really just comes down to how much money you think you can aggregate and then your fee structure because those two will determine your income, right? And you just have to get over at least the overhead, right? Depending on your service providers, it can be anywhere from 15, 20 to 30 grand operating costs a year.  So you, because you talked about like, is it worth the effort? So on and so forth. The actual setting up, there's not a lot to it. The attorney will structure, they'll form a limited partnership and then they will form an LLC for you because you're acting as the general manager, general partner of the fund, but that's through an LLC just to give you some protection there. So he does all that work. He'll write the documents, right? So there's no time that that's just money, right? And then really once the accounts are opened and the accounts funded, you just start trading, right? And all of the administration, the paperwork, all that's outsourced to your service providers. So really, again, it's just a matter of like, how much money you think you can raise or how much you can start with or be seated with.  And so that may end up taking the majority of your time in the beginning as a small growing business. So that's more something to consider. It's really like, one thing is you could, you know, prior to going on the Debra asking around and be like, hey, you know, I'm interested in this, you know, would you be interested in trying to get a sense of how much interest and capital you can start with, so to speak. And then from a regulatory standpoint, are you, your own personal trading, you obviously have a good amount of your own capital in this fund, right? You've got your own skin in the game, but are you able to trade stuff outside of that or do you focus 100% of your trading on your personal capital within the fund as well? There's nothing that bars you from trading a personal account. I personally do not have personal accounts. I just, all my capital that I quote unquote trade would be in the funds. Got it. Very cool. Awesome. Anything else, any other questions around funds that you get a lot that you think the listeners might find value from? I think a lot of stuff is just, how do you get started and how much does it cost? So I actually have this, even the Twitter thread or X thread, if you follow me on Twitter at the trade buster, I have a thread that's literally called how to start a hedge fund. And I kind of break down some of the basics, try to be mystified a bit. And again, there's just the three service providers you need to find. I've actually helped a bunch of people start funds and I've referred my service providers, people in your group are interested, feel free to have them reach out. You got the attorney, you got the administrator and you have the CPA that does your taxes in your annual audit. Have those three in place, as long as you have the money for the overhead, you can get started pretty quickly. So I think once you realize it's not actually as hard as people might make it out to be. And are you using any type of special institutional platform? Are you on tasty or toss or what brokerage? We're on interactive brokers. And there's a lot of professionals and funds that use that. It's not quite institutional, but it gets the job done.  Very cool. Well, cool. Thanks for sharing that. That's awesome. Sure. Just kind of change gears here. I want to get into kind of where I first reached out to you on, and that is your, the course that you put out on the Option Omega Academy called Spreadsheeting for Traders. Tell us a little bit about that. Yeah. So because a lot of my systems are all kind of systematic in nature. And this isn't exclusive to systematic trading, but I tend to aggregate and track all of the trading data because to have good data, that will help you kind of do a postmortem of your trades after the fact or monitor your strategy and see how they're performing. And a certain metrics you can track, I track something called the premium capture rate. You know, obviously you look at the win rate and the win size, loss size, all of those things, those all matter because you can, for one, compare if your live trading matches back tests. Because we're always updating our tests at the same time as more data comes so we can see if our live trading follows those models. And then you can monitor if generally the performance is tracking as expected as they're going up, going down. And so being able to track is one facet of, and we do that through Spreadsheet, I use Google Sheets. And so, you know, you have to have some familiarity. Google Sheets has some differences with Excel, but the course has kind of best practices, different tips, tricks, and hacks of how to best ways to input data, how best to manipulate formulas, and ways to track different metrics. Not only that, one other thing is I don't remember the course got into this because it's not quite a complete course, but I had tended to, my intent was to kind of add content based on user feedback and user demand. But I also do a lot of tools where, for instance, we might have multiple strategies, and there's a certain set of statistics you can track the equity curve. But I have something called, for example, the Camara Lab. It's kind of a, I always name things based on a function. And literally you can put in different strategy, the performance streams, and tune the sizing of each in order to see how the different strategies synergize with each other and look at the total portfolio and see if, hey, if I size this one up, size this one down, maybe these strategies are less correlated, and how to blend your strategies to get a better, total, smoother, lower volatility portfolio level performance. So just to give you an idea, now that's kind of one of the more advanced things, but those are the kind of things that as I progress with my trading, it's not so much about the trading anymore, but it's so much about analyzing the performance. The analytics helps you extract more value from your own trading data. And that's kind of why I put together that course. And so that course is really a bunch of, again, videos about different ways to use Excel, to use Google Sheets, how to build different tools and just different best practices and tips and tricks. Got it, got it. By the way, the academy.optionomega.com, I will, I'll put the link to your course in the show notes along with your Twitter feed, if people have questions about wanting to reach out to, about the hedge fund stuff as well. Well, and so, and you've mentioned to me, and I don't want to put words in your mouth, so cut me off if I'm saying something I'm, you don't want, but you've asked me and I've seen you in the option Omega Discord asking people, you know, what, what other things do you want from a spreadsheet capability standpoint? Because you are, you're, you know, you're really interested and passionate about building these tools. Talk a little bit about that. And, you know, if there's anything that you're working on or, you know, different feedback that you've received about some of those tracking spreadsheets. Yeah, so for people who have followed my podcast and content, I'm always putting out different tools for Google Sheets. One of them is, for instance, the portfolio tracker that you mentioned, right? I literally, I update it once a year because you have to have all the new trading dates and I'll put out a Twitter post. I'm like, hey, you know, Merry Christmas. You know, the 2024 sheet is available now, so you can go in and use that and stuff. So I'm always about building those tools because, you know, there's stuff out there. You know, there's tracking services, or trade tracking or performance tracking, but you're kind of beholden to how the creator thinks is the best way, right? And so sometimes there's, if you can build it yourself, right, you can make the best tool for yourself. Now, that was originally why I wanted to put out this content involving spreadsheeting. And if for those, if you go look at the course, and I mentioned earlier, the course seems a little incomplete, in fact, some of the videos at the end you'll hear me mention, hey, if you like this content, subscribe to the YouTube channel. Like, it's because I originally wanted to make a YouTube channel and put out the videos there. Now, for various reasons that just never happened. And so actually the current set of courses or videos in the course are actually old videos I recorded and had intended to use as content from my YouTube channel that just never happened. Now there's a couple of new things that I added as well. I added like an intro video that kind of explained why I talk about YouTube and so people don't get confused. But really there is so much, like I wanted to, the point is to take all of the collective knowledge I've gotten from the last four years of building these tools. And you can see some of the tools on my channel, my YouTube, sorry, not my YouTube page, my Google Sheets where I link to like my original tools versus some of the stuff now. It's just like the complexity, the functionality, it's all gotten better, right? Because I've streamed like the process, I've learned different ways to really use some of the more advanced formulas and stuff. So I would love to get that out there but, and you mentioned, the course is free. Now, you know, people, we kind of know that like in marketing, right? Pricing is sort of a way to signal value. So I kind of wonder if making the course free is like ironically not having people incentivized to like take it out seriously because like you said, I wanted to get feedback. I wanted to get, you know, hey, like, hey, I love this content. I have a question, how do you do this? Or how do I do this in Google Sheets? And I can go on and just record a quick five, 10 minute video and put that out there. And unfortunately, like there hasn't really been any feedback and is it because it's a free course or is it because spreadsheeting is too nerdy or is it because the optional mega audience tends to be newer and maybe more focused on trying to do tests and find new strategy, which is great. That's all stuff that you have to get through the process, right? But like it's really once you're kind of stable and you're trading and consistent, that you have time to go back and like, all right, what can I do to add value? I've got my strategy set. How do I add value and how do I get the most out of my trading tracking, spreadsheeting? So maybe it's like a little too advanced. I don't know if you have some thoughts on that, but like that's kind of where my head was and why I made that comment prior to this interview about, you know, I'm happy to get feedback and have people kind of shape the direction of the course, so to speak. Yeah, there's definitely something to that. I mean, if somebody's brand new and they're just trying to figure out their trading platform, if they're just trying to figure out, you know, how to be consistently profitable, that's 99% of their focus. They're not worried about tracking their profits because they don't have profits yet. So I think you're right. I mean, I think where people will really, you know, kind of gravitate to what you're doing is once they've become a little bit more seasoned and now they're looking to really dive deeper into the numbers and figure out how they can strategize and manipulate the data to figure out different patterns in their own trading and become better traders that way. So I think you're right. I think it just may be designed for a little bit more of an experienced advanced trader, but we've got, we definitely have plenty of those. We have plenty of those in our community. I was gonna say, after listening to this, yeah, exactly, I was gonna say, maybe people in your community will kind of pick up on this and maybe take the opportunity to reach out or check it out. Yeah, looking forward to that. Yeah, I would highly suggest it to anyone listening. I think it's a great tool. And the fact that, you know, David's just providing this stuff, I mean, he has nothing to gain except for the fact that, I mean, like you told me, David, you just like being in a community of traders, which is honestly the whole reason I built navigation trading to begin with is because trading becomes a very lonely business, but when you can build a community of people around you that all kind of think and act and have the same desires, it makes it a lot more fun. Definitely. Well, so kind of tying into your spreadsheeting stuff, obviously that is used, as you mentioned, as a way to analyze different numbers, look at different things. And one of the questions that I wanted to ask you was, how do you think about managing risk? And you can go as deep as you want into the actual strategies that you trade or you can stay broad, but how do you manage risk and how do you think about managing risk? Yeah, so I'll start kind of low level and then kind of broaden out because this is actually sort of the trajectory of how I kind of developed because in the beginning it was focused a lot on strategies and just making profit. And people think about usually a strategy is successful if it wins a lot, right? But then what does that even mean, right? And so usually the first thing is win rate, right? So if I win 90% of time, 95% of time, I it's got to be a good strategy. And what's lost often is, well, the other 5%, 10% matters, right? Because if you lose too much, you're going to have negative expectancy. And so in the beginning was about kind of risk management, risk management 101. And for me, it's using simple stops. And I know there's a lot of different thoughts, trends of thought, controversy around what's using stops, hard stops, mental stops and all that. But at the end of the day, I honestly believe everyone is using stops if you're adjusting a trade, right? Because of something, a Delta or at a certain level, right? You basically stopped out of that first trade, right? Or rolling is exiting your first trade and putting on another one. So at the end of the day, whether or not, and how you think about it, everyone uses a stop, right? And if you don't use a stop, the broker will stop you out when you, you know, what the margin call, right? So risk management and stop loss really for me are like one and the same. And so from a trade level, and we talk about probabilities and occurrences. So if you do a trade and you, you know, simply saying, if I have risk two to make one, just use a simple example. And this could be like a credit spread. You enter out a dollar and you exit at three, right? Because if we exit at three, you lost $2. So risk two to make one and $1 is your max profit. So with the risk two to make one profile, you're gonna have a break even win rate of 66.667%, right? Two thirds, you have to win two out of every three trades to break even. And what that means is if your win rates above that, you won't make money. If your win rates below that, you won't make money. And from that kind of grafting or looking for strategies simply becomes, okay, if I have a, you know, I purposely set my mechanics to have a risk two to make one profile. And, you know, and that could apply to any kind of trade structure. Like, and that's just a high level principle. And then you go test different strategies using that, you know, as kind of guide the mechanics. Some strategies will have a higher one rate and some don't, right? And that will let you kind of filter out what strategies are worth investigating. And so the risk management itself can be a key to our profitability. Then once you have stuff you're down on your trading, then it becomes looking at like the portfolio level and drawdowns and how to blend different strategies to minimize volatility and have different, you know, if the strategies are lower correlation and they talk about like one zigs and one zags, you know, so you're not losing everything at the same time. And then you start looking at, because the reason it matters and a big topic of mine that I like to talk about is volatility drag or volatility tax. And that's the fact that compounding is not symmetric in both directions.  And there's always that kind of the classic if you lose 50% of your account, you have to make 100% to get back to even, right? I'm sure most people have heard of that or just those charts that say like you lose 1%, you have to get about one point, whatever percent, lose 10%, then you have to make like 12% and just gets worse and worse. So really thinking about risk, like the importance of not taking large drawdowns. And so part of the effort of kind of developing new strategies and blending them and trading different things is with the ultimate goal of not taking that drawdown because minimizing drawdown is the key to long-term compounding and having the most success going forward. So that's kind of how I think about it. Like on the strategy level, what it takes to make the strategy, you know, positive expectancy, not, you know, the interesting thing is for a sizing perspective, if you trade too big, you can actually make a positive expectancy, you know, looking numbers into negative expectancy. And it's that same idea. Since the volatility tax, well, it works against any edge you have, right? So if we say, you know, risk too to make one or let's say you have some, you flip a coin and it's a heads, you get, I don't know, $1.50. In tails, you lose a dollar. Now that sounds like a positive expectancy proposition, right? Because you should take that bet all day if you're, you know, $1.50 or lose a dollar. But if it's something about like when 15% or lose 10%, that might still be okay. But at some point, if you're saying, you know, when, I don't know, 75% or lose 50%, then you can see, because remember, if you lose 50%, you got to make 100% to get back, right? So even at 75% gain is not enough. So I think you can see where I'm going with this. They always thinking about the fact that at the end of the day risk matters because of that ever-present compounding effect in that asymmetry. Yeah, I wanna pause for a second and just make sure everybody heard what you said there because I think it's so important. In fact, from my personal own trading experience, you know, I started trading late 1999, early 2000. And I just, I mean, it was more gambling than trading at that point, but I was just trading way too big. You know, at that point, I thought it was all about the strategy or the indicator or all those different things. I was blowing out small accounts. You know, I did that multiple times. I really didn't become consistently profitable trading until after I had been trading for 10 years. So I'm a little bit of a slow learner, David. You'll find that out, but it all came down to position size, you know? And so once I realized that, it was like a crazy big light bulb came on. And it was kind of like, I can't believe that one of the numbers, one of the biggest keys to this whole trading thing is simply position size because I would jump from strategy to strategy. You know, I'd blow out an account and I think, well, okay, well, that doesn't work. I gotta go try something else. But the reality is I was just trading too big. And so I just, I wanted to kind of reiterate that because I think, especially for new traders, that doesn't really sink in until they've already learned the hard way. Yeah, I think you have to come to realize and just to kind of repeat is that size can take a winning strategy and make it into a losing one. And so sometimes people will say something doesn't work when in fact it was just too big. So you don't wanna conflate the detrimental effects of size with the efficacy of the strategy because one affects the other. I think recognizing that and understanding how important that compounding math is, that will kind of help you separate those two. And that will help you have more clarity on like which kind of strategies work and don't work, so to speak. Very well said. So when in your personal trading and your funds or the way that you structure trades, are you mostly trading naked type options? Do you have defined risk, a combination of both? What is your kind of preference or model around that? So this is an interesting topic because I often use the term risk in theory versus risk in practice. So if I have a naked put, right? And again, let's use that example of selling for a dollar and have a stop loss of losing two. My risk in practice is two to one, but this does not account for the fact of gaps, black swans, things go wrong, right? And so in my trading, I have an overnight put selling strategy, for instance, where in the look of my log, and yes, the average loss size is right around two, if that's the way I intended it. But over hundreds of trades, you do just that occasional gap and there's like a 10x loss or an 8x loss. And that's just, I just make that into numbers, right? That's all to be expected. But really your risk in theory, and people say with the naked put, you could go to zero. Now I don't think go to zero is gonna happen, especially if we're trading an index. So let's call your risk in theory, like 20 or 30% jump risk, right? The market dropped 20 or 30%. What would that mean to your position? And so the reason I get into that is the way I approach the strategy and the mechanics, I treat it as naked. So I'll sell it put and my risk reward will basically be tied to like, if that naked put was a dollar credit, right? I see the dollar as a max gain and $2 as my loss. And my stop loss, if I wanna have 2x, right? It's 2x relative to that dollar. So the structure itself, the approach, the mentality is of a naked trade. But because I know there is a larger risk in theory of that black swan, right? Some people would just accept it, like, okay, I understand with a very low probability, I don't know, once a decade, I might have a really large loss, but they trade small enough that it's acceptable and maybe I'll give back the years of gains, but I survived, right? And then life goes on and keep trading. But if I wanna address that risk in theory, the black swan risk, right? I'll structure it with some kind of, and you can do like a back ratio, I'll buy a couple. So if I say data engine, my strategy that I teach, I'll sell a 90 DTE put, right, around 15 Delta. And I have something called the bomb shelter, which is just a structure designed to hedge that naked put, which is I buy two puts, I take a 10th of my overall credit. So if I collect the $5, I'll take 50 cents and I'll buy two longs at 60 DTE. And I've looked at post risk analyzer and yes, they're very far out of the money. And most of the time they won't do anything, but if there's a really big drop, then you get kind of the implied volatility of, because it's a ratio, even though those two are far out of the money, there's two of them. So it's kind of a Vega hedge, right? And so I'll have something like that. And so to bring it back to answer your question is, I kind of treat my, and I design and approach my strategies and manage them as a naked strategy, but because I have that tail hedge, in reality, you could call it a, is it a back ratio? I don't remember the terms, but it's technically a ratio spread. Yep, but the way I think about it is as a naked trade, but I just know I have that kind of airbag or that hedge in the background. What's funny about that is you call it a bomb shelter. I have a back ratio, hedge strategy, kind of tail risk protection like that, and I call it a bunker. Yeah, no, you know what? If you look at my content, I'm always coming up with like goofy names and stuff. And it's just a way to kind of be, have a little fund and it helps people kind of remember the concepts. And like, if I think of like what it's used for and how I think of it, then I'll stop a name on something. Yeah, same here. We have names for all different kind of strategies. I mean, it's easier than every time you want to explain it, saying, well, you got to sell two here and buy one here and it's a bomb shelter. And then people just know what it is, right? Yeah. Very cool. So that's awesome. And so you're primarily utilizing naked options or buying far out wings or using a tail risk hedge and just managing risk around those positions. Yeah, it's almost, you can think of it as my structures are not naked, but I managed kind of them separately. I managed a short as I would manage a naked position. And then I managed a hedge as I would manage a hedge. So it's just sort of the separation of the way I'm managing them. Got it. So you talk about a concept that I want you to kind of share with the listeners and you call it return on time and the four quadrant mental model. Talk about that. So, you know, oftentimes people want to, people get into trading for various reasons. And yes, at the end of the day, we want to make money, right? But it could be because I just have an interest in markets or I want some supplemental income or I want to quit my day job. And so when you're evaluating, you know, something, this endeavor you want to go on, I think people often in the beginning don't have a clarity of like the expectations. And so the mental model is this, if you have a thing about like a horizontal and a vertical line, right? It's like a grid, right? You have four quadrants. Now the left, the horizontal axis from left to right is basically time spent, right? Effort. The very left extreme would be passive investing, right? No effort at all. You just buy and hold. Whereas on the extreme right-hand side is going to be, you know, staring at the screen eight hours a day, full-on day job, right? You just screen-watching, looking for setups and the whole thing, yeah. Okay. And the vertical axis is return, right? So down on the bottom is losing money. And down up on top is making money. So I think what people maybe think they aspire to is the upper right-hand quadrant, which is spend a lot of time, make a lot of money. And what they don't realize is, you know, time is money. Time is value. Time is, you know, lifestyle, right? You may not necessarily actually want to spend all that time, right? There's a certain kind of personality and there's a certain kind of motivation that's required. So there's that to keep in mind. And another thing is people often aim for the upper right quadrant, but where do you think they actually land? They land in the lower right quadrant, right? Spend a lot of time, lose a lot of money, right? So obviously you don't want to end up there.  And don't make a lot, you don't have to lose money, but you're not making a lot, right? It's basically passive investing, right? If you buy and hold, there's a certain expected return of the market and there's a certain volatility as well, but they're okay with that. Now, return on time, I mean, if you think about it, just people understand return on capital, right? Return on time is, this is what this whole quadrant and this model is like, how much are you getting for the time you spend? And so what I want to put people in, and I think, in the beginning, it's kind of almost too good to be true, is upper left-hand quadrant, right? Time spent, not a lot, but you make decent amount of money. It doesn't mean you have to double your money and get rich quick, but it's more about the fact that you make more than the time you spend might suggest. And again, that kind of maybe sounds so good to be true, but how I do it is I focus on what I call low-touch strategies and strategies that, again, take my data engine strategy, for instance, it's selling one put a day and there's a bracket, right? There's a profit take, there's a stop-loss and literally that's it. I mean, there's stuff that goes into sizing and monitoring how much positions you're having all that, but the actual mechanic is enter a 90 DTE or closest to it 15 delta put once a day, put on a bracket order, the rest is done, right? That bracket order is your exit, right? You will either hit a profit target, get stopped out. And that strategy, yes, it's correlated, you're selling puts, right? And you're selling puts regardless of mix and market up, market down. So there's the beta, there's correlation, but then I'm showing multiple back tests as well as live trading that for the equal amount, you get better risk adjusted returns than buy and hold, right? So for equal amounts, you can size the strategy to target a certain level of return, right? That's just leverage, that's just scaling, but for the same level of return, your drawdowns will be less. And that's an example of return on time. How much less is the drawdown? Do you have any of those numbers, Andy or off the top of your head? Yeah, let me actually give me about 10 seconds. I'm gonna pull up my, I have something called a longitudinal study, which kind of actually, another example of these tools I built. It takes the test data, in fact, it's live data, but it scales it for you depending on the level of return. And I always say, okay, let's say you're targeting 15% keger. Now that doesn't mean you're gonna make 15% every year. Long term, it should kind of even out because there's up years and it's down years. And so in the timeframe of this study, and the study continues to go on because I add more data. It's from November, 2020 to present, right? And in fact, we had a profit take yesterday, January 11th. So at a 15% return target, your keger realized is right around 14.8. In that same period of time, the market's keger is 10. The strategies max realized drawdown is 14.7% and the SPX max drawdown was 25%. All right, so there's just, and there's some nuances you have to do because this is closed trades versus marked market. Marked market's always a little bit more volatile, but you get the idea. And these, this is all on this spreadsheet. People can go in there and play with it and ask questions. But again, just to give an example, and this is something that takes marginal effort, right? So it's not about this, there's this false dichotomy of, if I'm not a day trader, right? I'm a passive buy and hold, right? It's more than the other. And there's nothing in between. And I'm trying to show there's a lot of gray area. And depending on how you focus your effort, you can kind of land in these different quadrants. And that's kind of, yeah, that's what I call the four quadrant mental model on how to kind of approach and the return on time is more about an emphasis on, it's not always about trying to make the most money, right? RLC return on capital, but return on time leveraging your time. And I talk about like, you don't have to get into trading or learning about investing with the goal of quitting your day job. I really think you can do your day job, unless you're hated, I'm sure, but do what you like to do.  Yeah, and it's interesting because if you look at, and you've seen and heard all these statistics that very, very few actively managed funds to outperform the S&P 500. Of course, from a hedge fund perspective, there's all different kinds of hedge funds that focus on different types of strategies and allocate capital for institutions based on what they're trying to accomplish to offset what they're doing in another strategy and all those kinds of things. But based on that, and I've looked at those, not exactly what you're talking about, but similar, just simply selling put strategies in the way that you can reduce your overall, standard deviation of risk compared to the S&P, but yet easily outperform it. And it's just amazing that more either funds or people don't do that if they consider themselves a buy and hold type investor. There is so many things that work against the individual retail trader from being successful. And a lot of that is just psychology and having the conviction to follow through because the moment things don't go your way, it's really easy to question yourself, which again brings back the importance of tracking and looking at the numbers and continuously comparing that. And in fact, every trade, regardless of the outcome in terms of P&L, as long as they match the expectation and like, again, live matches the back test, every iteration that goes that way and execution is clean should be one more brick to your kind of conviction, right? Building up that conviction. And so I think not having some of these tools and having the right mindset, it's hard to kind of do this day in and day out and not fall off the wagon. Well, and not only do from what you're saying from a mental standpoint of just you suffer a big loss and then you start questioning yourself, you start questioning the strategy, but on the other side of that, you have all these financial advisors and all this whole financial industry basically telling you that you can't do it because you're not a professional, right? And so that feeds into it and then people say, oh, I'm just gonna give my money to an advisor and pay him 1%, right? So it's just, it's such a racket that's created this scenario to start with and what's awesome to see is, and obviously why I created navigation trading, why you do what you do is because it's really amazing to see when people empower themselves and start to, the light bulb comes on and they start to realize that, wait, I've been told my whole life that I can't outperform the market. Even the best professionals barely can outperform the market, yet I'm doing it consistently every single year. There's a disconnect there that a lot of people knew can't grasp, but once they do, it's just so empowering knowing that you have total control. Yeah, you know, the funny thing is like, beating the market, like the threshold is not that high in terms of like 9%, 10% and then, oh, like if you're talking about risk adjusted, right? If it, you know, in that, that's another thing for another conversation but people talk about like, you know, beating the market in absolute terms, okay, maybe lower it harder because you have to consistently, you know, 10, 11, 12, whatever percent, but risk adjusted, if I can do half the return with a quarter of the volatility, that's in a way, beating the market, right? And you can take that, if I have half the return and quarter of the volatility, then you can just scale that up and then you can then match the return with half the volatility, right? So there's all these different things and that's another reason why it's just so much kind of disinformation and misunderstanding about like what it is to beat the market, what exactly are you trying to do and what exactly is the goal? Because it's all about like different ways to, again, like think about risk, think about performance and different approaches. So you have to have like a really clear agenda and know what exactly your goal is before you can even design the approach, right? What is the best strategy, best portfolio or whatever? Right, right. Great stuff. Yeah, David, that was awesome.  Anything else you wanna add on that topic? Yeah, so this is related and something I've been thinking about because sometimes when I put out, you know, my content or stuff and concepts on Twitter, I'll get kind of pushed back almost like, oh, like this is like too simple or like, you know, I'll get kind of no offense to them, but I'll get lumped in with kind of the theta gang crowd for instance, right? Oh, data engine, sell, put every day and make money and there's a balance between like, I have to kind of over simple, like try to simplify it, but if you oversimplify it sounds like just another one of those scans, right? It's like, oh, easy money. But I realized I don't really think what I'm doing I would consider kind of trading. Now, what is trading? Now, yes, I make trades, right? There's transactions, you're selling and buying whatever, but I think the typical image of a trader is somebody who, you know, is watching the market and you might have a scanner or a watch list or you're looking for a setup and it's almost like hunting and right, you eat what you kill, you're looking for setups and when there's opportunities, you jump, right? And then those are the trades and then you have to manage those, but more again, that mindset of looking for opportunities, looking for trades. Whereas for me, a systematic approach is there's role-based and you're just doing the same thing day in and day out and even the risk management, those kind of, you know, the mechanics are exactly the same day in and day out. And what that comes back to is there's a phrase, you know, someone in my Discord coined which is like strategies as assets, right? If you think about buy and hold, right? The simplest is buy and index, buy and hold. That's one form of investing. Now kind of one step above that, there's stuff called like permanent portfolios. You might have heard of the Harry Brown portfolio or the Golden Butterfly or like Ray Dalio's All-Weather. It's like you allocate to different assets, but you're basically buy and holding and you rebalance, but because you have different assets at a certain proportion, you know, you're relying the natural kind of lower correlation of those assets to provide a smoother equity curve, right? That's the idea. So if I think of my strategy as something that I'm gonna do day in and day out and the rules don't change, well, how can you say that's different than like a buy and hold, right? The strategy itself has a certain pay off profile, equity curve, return profile that you're expecting. And if I am blending three, four, five strategies at a certain ratio, how is that different than a permanent portfolio though? And so that's what I mean by, you know, actively passive investing. Like, yes, there's some activeness to manage and place the trades and put in the orders, but I find my mentality more of a passive investor than what traditionally is thought of as an active trader. And that's kind of like the thought that's been percolating in my mind and why I think there's sometimes a disconnect of the kind of stuff I put out and some of these other online, Twitter personalities who maybe have that more kind of, that active trader looking for opportunity approach. So actually I'm kind of curious to see to get your thoughts on that and I don't know if where you kind of fall in that camp and the way you guys in your community and the types of strategies. Because at the end of the day, everyone, you should be systematic. I'm sure you're kind of teaching like being systematic and consistent, but that mindset of like, hey, am I like sitting here looking for opportunities or am I really just sitting back and letting the system run? That's kind of what that term is about. Got it, I like it, I like it.  We've had navigation trading going now since the end of 2015 beginning of 2016. And we've built up just a massive library of content and different strategies. And I, you know, I trade all the time. I trade zero DTE, I trade mid duration, I trade longer duration stuff. So I think a lot of people come in and they think they have to mimic what I'm doing. And so I really try to pound the topic of, the topic of, don't come in here trying to be like me or don't come in here trying to be like one of our other professional trader members. You know, don't try to be anybody else. You have to build the type of strategies and trading around what works best for you. You know, and that part of that has to do with your lifestyle.  You know, going back to your quadrant.  Cause that's a big deal. You know, we have some people who only want to trade for an hour a day. We have some people who are very active like myself and trade a lot of different strategies. But one way is not right for everybody. There's no, this is the way I do it. And so this is the way you should do it. I really try to relay that information to folks, especially as they're trying to figure out who they want to be as a trader or what they want to be. And there's just no right or wrong answer, right? I mean, there's so many different ways to be profitable in the markets.  And it just doesn't work for you because of your personality, because of your time constraints, because of your account size or whatever else it might be. And so I just think it's, trading comes down to, it's just one big game of self-awareness. Yeah, and trying to figure out, what is the best fit for you? What's gonna make you happy? Because there are situations, there are days that come to an end and I feel exhausted. Like I'm mentally and physically exhausted. And I'm like, I don't want to do that every day. I don't feel good about myself at the end of the day when I do that. And so I've gotten rid of some strategies that are still profitable, but is it worth it when you feel like crap at the end of the day to continue to do that? And in my mind, the answer is absolutely not. Yeah, definitely. I agree with everything you just said. And I think what you said about, there's no right way to do it and there's no one size fits all. And it's always about learning about yourself and then from that, figuring out what works for you. And I think the main kind of MO for my content and my message is again, with the four quadrants, I think people are either gonna wanna be in the upper right or the lower left, right? Spend a lot of time, make a lot of money or spend little time, don't make so much. And most people don't realize the upper left. The don't spend too much time, but you can actually make reasonable returns. And so for me, it's all about showing the possibility of leaning towards that kind of upper left quadrant. I think some, when people realize that that's like a different mindset, a different way to approach, sometimes it kind of opens up more possibilities for them. I love it. I'm gonna start using that. I'm gonna call it the David Sun Mental Quadrant Model. Sure. Good stuff. Well, David, I really appreciate your time. I know you're busy, so I don't wanna hold you too much longer, but anything else that you wanna share with the audience that you think would bring value? Yeah, I would just say just remember that this is a process and be patient. And just as we mentioned about the importance of risk in terms of compounding. Compounding, that's everywhere in life, not just trading, right? If you take it slow as long as you don't blow up, all of your experiences will compound, right? As long as you're learning and can take away from the mistakes and things you did wrong in the past, as long as you can survive and stay in the game and keep learning, things will grow, right? It will just get better, things should get better and use that approach so that you don't have to rush. And again, going back to the return on time, right? If you don't have to stress out and like, hey, I got to go crazy and make crazy returns and try to, and again, I know some people are motivated about different things, like, hey, I gotta get out of this job and they think of this as an opportunity to go quit their job and trade on the beach or something. But for me, it's really just about taking it slow, letting everything compound and kinda grow and letting that progress sorta sell over time. Excellent, very well said. Well, I really appreciate your time. I love just kind of interacting and meeting good people in the trading industry.  So, kudos to you, man, for just kinda doing what you do and giving back like you do to the community. I think that's just amazing. So again, appreciate your time and I'm gonna put the link to the Option Omega Spreadsheeting for Traders course and the show notes. I'll put your Twitter feed. Is there any other place online that people wanna reach out to you that they can find you? I would say the trading page, which is the name of my podcast, so www.thetradebusterswithins.com and don't be surprised when it redirects you to a Google Sheets lecture page because it's not a real web page. I just got the domain. But that would bring you there. That would have links to the Spreadsheeting tools, my podcast, all that good stuff and then yeah, if you put the Academy course link that will, I think that should cover it all. Awesome. Great, thanks for coming, David. Good to have you and look forward to connecting with you again sometime soon. All right, thank you, Steve, for having me. Have a good day. Cheers.


a dwi'n rhaid i'r vlog, ac byddai chi rydyn ni'n dwy'n ychwanegwyd, rydyn ni'n ddweud i'r Michael, rydyn ni'n ddweud y ddweud, ac rydyn ni'n rhan o'r byd o'r lechlau cyngor. I'w'r video o'r gweithio yn ymwneud ymddangos yn y safon, i'r cyfnod, i'r cymdeithas, i'r ymddangos, y gallu gwirio, ym mwyaf, i'r gweithio, i'r cyfnod, i ddweud i ymddangos, … ac rhoi ddodau'r ffordd y cyf drew i ymweldau roi'r pethau… … ac roi'n edrych yn fnyddio'n ymddangos o'r hineic, yw'r hoffa am ffodol i'r penderfyn… … ac roi'n edrych yn ymdweithio'n fffodol i'r hoffa i'r hoffa… … ac roi'n edrych yn ymweldau, yw o'n edrych yn glenau cyhoesion… … o un hwnnw o'r honno, o rhesu mae'r le name, o'r argynneud sy'n hoffa'u ymweld… I'm hoping something in this video is going to help you. And of course a disclaimer as always, I am not an expert. I don't have a degree in confidence and motivational speaking or anything like that. I'm a nurse. I can only go by my own experiences, what works well for me, what I've seen around me, my friends, family, colleagues, that sort of thing, the things that they've done, tried and tested things. I can only go by those sort of things and give you my best, honest advice possible and hopefully it'll work for you. But the main tip throughout everything is always you know yourself, you know what works for you, what doesn't work for you. You are the best person to judge yourself, but hopefully some of the tips that I give today, some of the advice I can give today, you can mould and edit it into your own life and something will work for you, fingers crossed. Firstly, what is confidence? Confidence is very much about believing in yourself, believing in your own abilities, your own ideas. It's about understanding and accepting who you are and confidence doesn't mean being this outgoing extrovert. That's not what confidence is, it's the complete opposite. You can be very quiet, shy and introvert and still be confident in your abilities. That is me, I am that person. And there's so many things that can really affect your confidence in life, whether it's personal situation, breakup, family problems, you could be bullied for example, you could be teased about your looks and your appearance. Other things like social media can have a massive negative effect in your confidence because you're seeing these people doing all these 101 amazing things and you're thinking, hang on, I'm not doing these amazing things, what does that mean about me? It could be things like your results at school, that was one thing that knocked my confidence that I almost didn't go into nursing because of. Because I got really poor grades in my GCSEs, so it really knocked my confidence. I didn't think I was worth anything because of that and I based everything on that situation. But instead I didn't look at, okay, why did I get those grades? What was going on around me?  I had a death in the family, I had to move house, I had to move area, I had a whole load of things happen. Right, smack bang in the middle of my GCSEs that had a massive effect on that grade. So I've learned to really reflect on things and assess the situation for what it is and what's happened and grow and learn and develop from that. Other things that can affect your confidence, things like health problems, your physical appearance, pressures from society to be a certain way, to look a certain way, to do well in life, to get married, to have a job, but who says you have to be like that? So let me tell you now, tip one, do not listen to society, do not feel you have to fit into this small box to belong and to be confident and to have this amazing life and stuff like that. Shut that down right now. It's not true.  It's okay to look at whatever way you want. It's okay to be whoever you want. It's okay to have different career paths. It's okay to be a single mum. It's okay to be a strong independent woman and be a leader and focus on your career instead of a family. Don't let anybody tell you any different. So firstly, there's all different levels of confidence in our lives. So things like if I've never done a skill before, so as a student nurse, first year student nurse, you're not going to know anything unless you've done healthcare before, unless you've done these certain skills before. You're not going to know how to do it. So you're not going to be confident in that skill. You're not going to feel confident in that skill because you've never done it before and you know that it's going to be on a patient and there could be harm in some way. So your confidence is going to be a bit at the start, which is absolutely normal. It's absolutely fine. So you kind of can't be confident in something you've never done before. Does that make sense? I hope I'm making sense because in my head it makes sense. So for example, inserting a catheter. Some people are really not confident in this. Some people are confident in this. I know before I ever learnt this skill, I had no clue how to do it. So I wasn't confident in it. I didn't feel confident in it. But once I'd done my theory behind it at university, I did the skill sessions and then I was faced with a patient. My confident was still a bit. I hope I get this right because if this goes wrong, this isn't good. But once I'd done the theory, I'd done the skill session. I did it on a real-life person, a real-life patient. I was like, oh, that's it. That's all there is to it. OK, I can do this now. And I felt way more confident. And from that point on, after that first patient, I was really confident in catheters and I was always the person like, oh, I'll do this. I'll do that. I'm fine with this. I'll never, never, never forget the moment I was on award and there was this really what they called a tricky patient because they could never get the catheter in. I said, well, let me have a go because for some reason, it's a skill that I'm OK at and that I'm quite good at for whatever reason. I don't know why. It was just one of the things I could always just get first time and it was done. So we went in and I set it all up and I was putting this catheter in and I remember my mentor saying to me, do you want a torch light? Do you want to see it? And I was like, nah, I've got this. Don't you worry, this is straight in. It makes me laugh so much. I think you had to be there because when I'm saying it out loud, it doesn't actually sound that funny, but it was just the way I was like, I've got this. Inwent the catheter job done and I was always just that confident person with catheters and the same with blood tests. I've always been really good at blood tests. I don't know why it was just something that I was the person that people went to. If someone had a phobia, if they had a tricky vein or something like that, I could always get it for some reason and I always had one of those days though where I couldn't get anything. It doesn't matter how big the vein was. It was popping out for whatever reason. Something happened on that particular day where I couldn't just couldn't do it and I had to get somebody else in. And that's the great thing about teamwork as well because something that you're not very confident in, something that you're not very good at maybe, that you know somebody else is, there'll be someone on your team that is really good at particular skill. For whatever reason, they are the royalty of that skill and they will be the person that you go to for that. And I was the same. I was good at bloods but there was somebody that was top level way better than me that they were my number one person. If I couldn't get it, I know this person will get it like that. And there will always be that person in every area that will just have a good skill and you will have your own good skills that you're really good at, that you're really confident within. And that's just what makes a great team because you all come together to help each other out in the things that you aren't so comfortable with. But to get confident in a particular skill like that, like the clinical skills, it takes practice. You won't always feel confident. You know, you might have the theory. You might have that first attempt on a patient and then you might be like, oh, actually, I'm feeling really nervous. I'm not confident at this. You have to keep practicing. You have to keep pushing yourself forward. That is going to be my main tip for the whole of this vlog. Push yourself even when you're not confident. You push yourself, you look confident, poker face and you just do it. And the more you practice, the more you do it, the more confident you'll feel because you're getting it right. And even if you get little bits wrong, you learn, you change practice and you do better next time and you just smash it next time. It's growth. We all reflect on everything we do. Even the good times that I've had, even the good things that have happened out there, I always reflect back and say, how do I keep that going? How do I be that good next time? There's always room for improvements. There's always room to build on your confidence in clinical skills and things like that. And if you are a student nurse, if you're at university, I know at Birmingham City University, we had the clinical skills room. There's still the clinical skills room there that you would go and you can practice all of these amazing skills, whether it's cannulation, wound dressings, whether it's washing a patient, whether it's catheter care, blood pressures, that sort of thing. There is a skills room and there's instructions. There's the equipment to go out and practice in that safe space. And I'm hoping that all your universities have that. Every university should have this, I'm hoping. Fingers crossed you've got that because that's very good practice.  Also something that I did was practice at home on friends and family. Obviously I'm not going to do a catheter or blood testing or something like that.  So I did go on to Amazon.  Just really cheap little bits, nothing too expensive just to get that practice at home. And that's how I became really confident in my manual blood pressure because I was practicing all the time and I got more and more confident at it. But I know as students, we are poor, broke. We can't be afforded in these sort of things. So this is why I said firstly, make use of your skills, session space, any sort of simulation spaces you have at your university. I'm hoping that they all have them. But I'm hoping that you have got that space that you can go and you can practice in between lectures, in between sessions. If you're out on placement, you've got days off, go into union practice. If you can, just to get a little bit more confident. And the same on placement, if you're on placement and there's a particular skill that you're not confident in, speak to your mentor, speak to the nurses around you and say, I want more practice in this area and just do as much as you can just to get more confident in it. And it'll just flow nicely and your confidence will grow. Fingers crossed. Now, our brain has a lovely way of lying to us on a daily basis and telling us that we're not confident at something. Oh my, and then we start thinking about the bad things that can happen when we're about to do something. Like even if it's a presentation, like public speaking, if it's clinical skills, you're going on to placement, that sort of thing, anything, you will overthink the situation and you will, this is, I know this is something that I did all the time and I still do, but I've worked out a really good way to stop thinking like that and to just get it like that before you start overthinking and you end up a wreck on the floor or something ridiculous because it does happen.   What if this happens? What if that happens? You're not going to be able to do this because you haven't had enough practice. You haven't done this. You haven't done that.  So what we need to do is stop that thought, firstly stop that thought in its tracks and this is something I actually learned through like mental health pages and things like that. I do my own research on how to change behaviour, how to change your thinking because it's not useful. I've also had counselling sessions before for it because I don't want to think like that and I know that it's a lie. So I want to change that behaviour. So I did go to a counsellor who also gave me these tips and I'm hoping they're going to help you as well with this and hopefully build your confidence a bit and get rid of that self-doubt that we don't need because you're all amazing. But you need to recognise that thought the minute you say, oh, what if?  You have to recognise that you are having that thought and it's not true. So you have to say, whoa, stop.  This is going to go right. You have to change it. Positive reinforcement. You have to change that negative into a positive and say, no, nothing's going to happen. This is what's going to happen. I'm going to do this. It's going to go well. The patient's going to be fine. Get rid of it and you have to do that for every single time that thought comes up. You could have 101 thoughts going on in the space of five minutes like I have before and every single time it comes at you, block it. Block it. No, rethink it.   You're training your brain not to let those intrusive thoughts in and just it will completely change the way you think and help you feel more confident over time. But it does take time. This isn't an overnight fix. You have to work on this daily every single time for it to work. My next tip for this as well is every single morning when you wake up, you have to start the day right. Look in the mirror. Say to yourself in that mirror, I am confident. I am worthy. Today's going to be great. I'm going to be a great nurse.  You're giving yourself more self-confidence, more self-worth. You're making yourself feel valued because we have to love ourselves before we can go out and love other patients. Not in a weird way like that, but do you know what I mean? We have to have that self-confidence, that self-worth. We have to feel it in ourselves before we go out there and care for other people. And along with that, the power pose. Find your power pose. If you Google all sorts of different power pose, I like the Wonder Woman. Hands on the hips, standing tall, back straight. Hands on the hips. Yes, I'm brilliant. Yes, I'm confident. Yes, I'm worthy and valued. I'm a great nurse. Do that over and over every single morning. Get up and do that in your mirror, looking at yourself, looking into your soul so you believe it.  I'm not going to lie. I don't do this every single day. Sometimes it slips my mind. Sometimes I'm lazy. Sometimes I forget. It's not for everybody. But it does work and it does make you feel really, really good and your self-esteem does start to really shine out when you start doing that every single day. Just write down your own positive affirmations for yourself. And my last tips are all about you because we need, like I was saying before, we need that self-love first before we can do anything else. And there's a lot of research and papers and studies that have been done within mental health as well that says if we focus on ourselves and work on ourselves, be kind to ourselves, look after ourselves, it can have a massively positive outcome. So the first tip, be kind to yourself. Treat yourself with kindness always. Like I was saying earlier, bash those negative thoughts out the way. Don't listen to them because they're not true. Look after yourself. Make sure you're eating well. You're filling yourself up with fluids. We always advise our patients that, but we should be looking after ourselves too. We should be eating the right things. We should be exercising. We should be getting plenty of fluids. I want to say exercise. I mean just even getting out for a walk. I don't mean going down to the gym. That's not me. I don't do that. But find the right exercise for you that's going to help you and get you out there and get you motivated again. Act confident even if you don't feel it. I was saying this earlier. If you don't feel confident, poker face is on. You're going to look confident.  Say it with confidence. Do it with confidence. And the more you do that, the more you're showing yourself, I'm confident and you'll start to change hopefully. And lastly, try something new. Like I was saying earlier, push your boundaries. If you're scared of something, if you're worried about some doing something, for example, push yourself, push through that fear if you can. I know it's really, really hard, but that is something I do all the time. I had a massive fear of public speaking as a student.  I was, oh, don't get me wrong. My heart was pounding. I wanted to cry. My legs were shaking and I was like this. Oh, but I pushed myself and doing that and then getting over it at the end and reflecting over the experience and thinking actually what happened? Nothing bad happened. I spoke. I helped some students out. Nothing bad happened from it. So that's reinforcing to your brain to say, this is okay. This is safe. I can do this. So it's trying to squash that fear a little bit and the more you step outside your box, the more you do, the more confident you'll become and the more self-esteem you'll have and you'll feel a lot more better about things. So I think that's everything I have on confidence. I hope something's helped, but I know that it can be really, really hard to do these things and my main message is just always push yourself, push yourself through the fear, push yourself through it to get that more, to get more confidence because if you're constantly talking yourself out of things, you're not going to get anywhere.  Please, please, please just always push yourself. I know it's hard. I know it's tough, but you will feel so much better for it. So good luck everybody.   It just means that you're giving safe practice to your patients. Always think about that as well in the back of your mind. This isn't about me being this extravert. It's about safety. It's about safety of my patients because I need to be confident. The NMC code tells me I need to be confident and confident. Just go out there, remind yourself that you are amazing. You can do this.


Welcome traders, it's 2pm GMT and we are going to get going here. My name is Patrick Munley and today I'm going to be introducing you to the E-mini and E-micro S&P contracts. In today's session I will demonstrate the instrument structure and advantages along with highlighting some unique market mechanics that enhance the trading information for these products. I will also introduce you to my core strategy for trading E-minis and demonstrate how you can consistently use my pre-market analysis to reach consistent returns. Before I get going, can I just confirm you can hear me loud and clear and you can see my screen if you type a Y into the chat box, that will be useful and so I know we are good to go. So for those of you who are here for the first time, a brief introduction to myself. After I graduated from King's College London, I joined a city PLC consulting firm. I left with some colleagues and went on to successfully co-found and exit a consulting startup focused on C-suite executive search for technology businesses. Having had a front row seat to the dot com bubble, witnessing people make and lose a fortune in the market I decided to explore my curiosity for markets with some capital to play with and some time on my hands. I studied day trading the S&P 500 or probably more appropriately day gambling. After some early beginners luck, I racked up some pretty solid gains. However, as is often the case, my beginners luck went out. As the market phase changed, I began to average down, giving back all my gains and ultimately experiencing a significant six figure financial hit. To say this was a gut wrenching and sobering experiences and understatement. I really had to stand back and figure out if it was feasible for me to make a living from the market. So I decided to get serious about trading and sought out a mentor with an excellent trading track record. Working with my mentor for 18 months to two years. It was a time during which I had not just my technical game. I researched, developed, since we back and forward tested strategies that crucially suited my personality. All of which were underpinned by a rigorous risk management approach. Most importantly though, during this period of mentorship, I significantly developed my mental game. And probably most importantly of all, I made the watershed shift from being a highly goal orientated individual focused on financial gains to becoming purely process orientated. So what does that actually mean? Well, it means I had to stop focusing on what I could make from the markets and start focusing solely on managing my mindset to allow me to consistently execute my trading strategy. Oftentimes in the face of negative feedback from the markets in the form of losing trades. But once you become process orientated and you have a professional trading mindset and you understand the true nature of trading being really a numbers game in which you're simply playing the probabilities, you really lose the emotional investment and that hellish emotional rollercoaster of living and dying by the outcomes of individual trades and no longer concerned with the outcomes of individual trades or even a small string of trades. My focus is on the next 100 trades because I know by focus on excellence in execution my edge will demonstrate itself over an extended series of outcomes. My multi-strategy approach has delivered profitable annual returns since 2008. Since 2013, I've also been managing investor capital through a managed account service delivering annual positive returns. I'm currently responsible for managing a multi-million dollar portfolio. Since 2010, I've mentored hundreds of private traders of all experience levels from complete novices to former CME floor traders in developing the technical and mental skills to reach consistent returns from the markets. In addition to my fund management and mentoring, I'm engaged in other market-orientated projects such as being a resident market expert exclusively providing market and trade analysis to Tick Mill providing an in-depth daily market outlook breaking down fundamental and technical drivers for the day ahead. I also provide daily technical trade setups for three to five markets that I'm tracking on a daily basis. I also now run Tick Mill's rapidly growing E-mini strategy group where I provide a daily specific trade plan for the regular trading hours cash session of the New York Stock Exchange and also the head trader for Tick Mill's new futures trading telegram channel in which I provide exclusive institutional insights from tier one investment banks and their trading desks and strategy teams market perspectives. This also allows for an opportunity to take a look behind the curtain and see how institutional players are positioning. Telegram channel members also receive regular market bulletins within depth positioning and sentiment analysis. Actionable real-time chart analysis for a full range of E-mini and micro products covering daily setups and trading updates for E-mini micro stock market indices, commodities, currencies and crypto contracts. I also share real-time trade alerts from my automated trading models that are active daily in the E-mini S&P and Gold futures markets. You'll also get access to live stream trading sessions providing an opportunity to look over the shoulder of an experienced money manager and watch in real time as I dissect the markets and identify asymmetric trading opportunities. These live trade sessions will also act as a platform for helping you to develop a professional consistent approach to navigating the markets and the mental mind games that must be mastered to make it as a profitable market operator. I'll provide more information with respect to the strategy group which is here. You are welcome to join that. I'll post the link into the chat and you can just request membership and I'll give you access to that where I post the daily trade plan prior to the market open. For those of you who have a Tick Mill funded futures account you can join me in the Telegram channel where I provide all those intraday updates and alerts. There's a link to request access there. So, back to today and let's focus firstly now on the E-mini micro S&P futures contracts. The E-mini or E-mini or ES or the minis or the spools is the futures contract that tracks the S&P 500 stock market index. It is traded on the Chicago Mercantile Exchange or the CME by their Globex electronic trading platform. Trading is 23 and a half hours a day, five days a week using the contract symbol ES. E-mini contracts are available on a wide range of US stock market indices and commodities. However, when traders refer to the E-mini or the spools they are generally referring to the most important contract and that's the futures contract that tracks the S&P 500 market index. E-mini futures were originally launched in September 1997 to attract non-professional investors into trading index futures. Previously the only game in town had been the large S&P contract but it had become too expensive for the little guides trade. So, the CME created the E-mini contract which was one-fifth the size of the large S&P futures contract and required one-fifth of the margin to trade. E-mini became a huge success not only with non-professional traders but with professionals too. The micro E-mini futures contract is the same as the regular S&P 500 E-mini contract in every respect except it is one-tenth the size. That is, each one point move in the S&P 500 index is worth $5 per micro E-mini contract compared to $50 for the E-mini. And the margin to trade a micro contract is also one-tenth of the size. So, what are some of the additional benefits to trading this product? Well, it's equally easy to go along with short you either buy or sell the current E-mini contract and there is no uptick rule. It's a 24-hour trading venue which makes the E-mini attractive to traders around the world overnight moves in related index in equity markets like the DAX or the FTSE can be played through one trading vehicle. Electronic trading platforms mean that your orders are entered instantaneously and when executed you are notified instantaneously. Changing and cancelling orders is trivial no phone calls to brokers required and you know exactly where you are every second of your trade. It's a level playing field in terms of the fact that the Globex electronic trading platform means that large and small traders have equal access to the market and trades are executed in the order they are received and like the pit-traded futures or equities there are no back-room gains being played. The tight bid are spread because there's so much volume is traded through the E-mini the difference between the bid and the ask price is only ever one-tick or 0.25 index points which is the minimum price movement. Large depth of market, again the E-mini market is so liquid there's plenty of volume either side of the last traded price for large orders to be filled with minimum slippage. It's volatile yes but not unmanageable. The E-mini is active every day which gives the trader plenty of opportunity to trade. Remember it's really difficult to trade at a sleepy market but the E-mini volatility is manageable except maybe around some key news events like for example tonight's FOMC release. Now importantly low brokerage rates and broker commission for trading E-minis continue to fall. This excludes exchange clearing of regulatory fees and when you factor this in your round-trip or in and out brokerage commission is very attractive. It's got a low margin requirement so to open a day trading position with tick mill you only require 1,000 US dollars to open a micro-accounts. Remember these are absolute minimums you should be trading with more capital behind your positions. Also it offers a lower tax rate than before X or stocks. I think from trading E-mini futures it's taxed as a capital gain. No trade-by-trade accounting either. Another advantage really is that tax treatments in so far as you don't have to account trade-by-trade it's only the net profit or loss for the full year is required. So now we understand the trading instrument and the trading venue. I want to demonstrate some of the unique aspects. The fact that the E-mini is a derivative of the S&P 500 allows us to access some unique information commonly referred to as market internals. Market internals are often compared to the instrument dashboard on the car giving indication of performance and alerting the driver to any issues occurring under the hood. So let's take a look a bit more closely at what market internals are and how we can incorporate them into a consistent trading strategy. The volume as a unique feature of trading on exchange trading derivatives as opposed to CFDs or forex volume data which is incomplete at best as there is no central forex exchange and the banks who dominate forex trading don't share volume data in real time. However, we get a true reflection of actual volume which is shared directly by the CME available to all market participants in real time. I use volume as a tool to confirm breakouts and opportunities to fade the market. Spikes in volume will often be accompanied by intraday profit taking. The next internal that I pay very close attention to is the New York Stock Exchange tick index. This gives us the relationships of stocks ticking up versus stocks ticking down. Tick is an extremely useful tool for intraday traders. If there are 3,000 stocks trading on the New York Stock Exchange and 1,500 trade higher from their previous price and 500 trade lower than their last price the tick will read plus 1,000. But wait, what about the other 1,000 stocks? Well, their price was probably unchanged from their last print. When using the tick we are looking for extremes to enter or exit a trade. Tick readings of plus 1,000 or minus 1,000 are considered very strong as we typically trade between 500 most of the time on the New York Stock Exchange. Tick readings within the 400 bracket indicate chart and so we ignore them. On a range day we can look to fade tick extremes. I apply a moving average to make it easier to see the trend of the tick and note that extreme tick readings for the day are very important. When we get a high tick and a high in price of the exact same prints this could indicate the high of the day. When a high tick prints without a simultaneous high in price we can continue to make new lows until a new tick is reached. The reverse obviously being true for low tick followed by new lows in price. Next we have the advanced decline line or the AAD line for short. It's one of the most important internals. This indicates to tell us the net some advancing stocks minus declining stocks. There are roughly 3,000 stocks listed on the New York Stock Exchange and 3,000 on the NASDAQ. An AAD line reading of plus 1,500 is very bullish and a reading of over 2,000 is extremely bullish. On the flip side readings of negative 1,500 and below are very bearish and readings below 2,000 are extremely bearish. These extreme readings are indicative of trending days when once the market opens it just continues to trend all the way into the close. We look to the AAD line in conjunction with the breath ratio to confirm these trend days. For example, a day with 2,500 advancing stocks and only 500 declining stocks would yield a net plus of 2,000 which is an extremely bullish reading. So it's going to take a really large catalyst to shift the market direction with a reading that bullish. If on the open you continue to see the AAD line moving plus 500, plus 700, plus 900 this is a sign of market strength. If, however, the market is moving higher but the AAD line is moving lower that's a divergence that we really want to pay attention to as that can signal the market turn. Next we have the breath volume ratio composed of volume flowing into up stocks versus volume flowing into down stocks. Breath ratio is expressed in up volume minus down volume. This reading is important in relation to where it has been especially where we are during the trading day versus where we opened. For example, if that's 10 a.m. New York time we have 10 million shares moving up and 5 million shares moving down the resulting breath ratio is 2 to 1 positive twice as much volume as flowing into up stocks as down stocks. If at 10.30 a.m. the market is sold off but we have a breath ratio of 3 to 1 positive this is a signal that the markets are actually becoming stronger and it's time to look to buy the pullback. Last but by no means least we have the cumulative delta. This is a cornerstone of order flow analysis. Cumulative delta summarizes buys versus sell activity and can help determine market direction, trend and strength, support and resistance areas and more. Delta refers to the difference between buyers and sellers. Delta is positive when purchases exceed sales. Delta is negative when the sales exceed the purchases. Cumulative delta consolidates the accumulated delta information and then plots it visually on our charts. By recording and displaying a running count of weather and by how much buyers or sellers were in control order flow traders can better extrapolate the flow of the market. Delta is an excellent tool also for detecting divergence between price and the underlying order flow in the market. When price is making new highs but the delta isn't making new highs it suggests an underlying weakness to the market and often precedes a pullback or even a reversal. So now we understand what market internals are and the unique insight they provide and I want to briefly walk you through my strategy. By understanding the market context in which we are trading I'm looking to execute two types of trades. Firstly mean reversion in ranging markets and secondly momentum trades in trending markets all underpinned by the market internals for that cash session. Every day my plot, pivotal support and resistance action areas that are derived from multi-time frame volume profile analysis. This allows me to avoid engaging in the market in areas of heavy rotation or chop. The support and resistance action areas have three purposes. They can act as entry levels in mean reversion setups. In directional or trending environments the action areas act to confirm momentum entries and lastly I use them for targets for trades. I also note additional key data from the prior days price action. These levels are often important to define the bias for the day ahead. The previous volume point of control the highest volume price from the previous day where buyers and sellers perceive the price to be fair value for that given session. I confirm the current market context understanding the dominant side of the market in the near term, medium term and long term. There are times when neither side is dominant and in this instance it's important to assess how the cash session develops and what the market internals are telling us. I also highlight quantitative probability plays based on where the cash or regular trading hours session is opening in relation to the prior days range either above, below or in range based on key levels and the probability of price testing these levels over an extended days data. This can prove useful for trade entry, exit and management. Lastly I note volatility or range analysis as this helps to inform the current market context is the market imbalance in relation to the current volatility equally we can confirm market out of balance and this can inform the bias for the day. It also helps to inform trade execution and management. So now that you understand the basics of the plan let me walk through some examples of how we combine all of this information together to execute and manage trades. So this is an example of a short position. First what we want to pay attention to are this gold and blue line. The gold line represents the midpoint of the current trading session. So for the days trading range this gold line represents the mid, middle point or the 50% zone for the current range that we're trading in. So that's an important level that we want to pay attention to. Equally we have this blue line which is the volume weighted average price. So if we're trading above the midpoint and above the volume weighted average price we consider the current market activity to be bullish. If we're trading below the midpoint and below the VWAP we consider the current market structure to be bearish. So in this session we come into the day we open up and trade below the VWAP and below the midpoint. Now we trade into the primary support zone and then the next piece of the puzzle is what are the internals telling us? Well the tick has a negative distribution it's trading below its zero line and the moving average is negative. The AD line is below the zero point and trending down and we have a breadth that's opened up below the zero point and trending down and we have delta which is also negative. So we have all four of our market internals telling us that we are likely to trade to the downside. So in this instance we enter short positions through the initial support here coming in around 43.85 and our target for the trade is down to the next support zone at 43.75. You'll notice when we trade down into this 43.75 area we get a new low ticket and a ticket stream and we see some consolidation. So that's a straightforward ten point trade based on the current markets structure versus the VWAP and the mid and what the internals are telling us in terms of the underlying market structure as well. Here's trade where we come into the day cash session opens here in this shaded line and what we have is price trading above the mid and above the VWAP. We have tested the initial resistance and pulled back but we're still holding this key support area. We have a positive tip distribution we have AD line above the zero line and trending up. We don't have a breath is below the zero line but is trending to the upside delta is extremely bullish and this is one of the rules of the strategy that I teach in the telegram channel is that what we're looking for as a minimum is to execute a trade in line with the trend is three out of the four internals must confirm and one of those three must be the delta. We know we've got decent buying pressure so the trade here is to play a break of the primary resistance 4386 and we target and move up into the next resistance which comes in at 4400. We don't get a high ticket day here so you could hold the trade or roll up your stops but it's certainly there's 15 points of upside to play for in terms of that signal. And here's another example where we open the day strong retest of the primary support zone again these support and resistance levels are plotted in advance of the session so you have these to hand we hold the support zone and trade back through the VWAP in the mid and let's take a look at the internals of telling us well we have positive tick distribution high tick prints right from the open positive AD line positive bret and trending up and very positive delta so the trade here is to trade through the primary resistance as a momentum trade to the upside so let's say it's coming around 4285 it's a 6 there and then we take it we move into the target zone which is the 4300 but in this instance you'll note we don't get a new high tick a day so price can continue to make new highs so what I'll be doing here is rolling up stops for the next target zone which is up into the 4320 so from the entry back down there at 4285 there's about 35 points of upside to play for there based on the market structure and how the internals are trading to the upside look at another one here so this session opens up we trade through the through the midpoint and the VWAP so we're now in a bearish setting and we rotate back to test those from below we roll over so the trade here is to play a break of the primary support importantly now we have to get those internals confirmed so when we look to the downside here we've got a negative tick distribution we've got an AD line that's tested zero point but rolled over and trending to the downside we have breadth that's been negative and trending to the downside and we have negative delta so we enter on the break of the support here 4330 we take that down into the 4316 so another 14 points of profit to play for there here we have an example on the long side we open the day bullish we're trading above the VWAP above the midpoint so the immediate trade is going to be a break of primary resistance but we have to have those internals confirmed so when we look down here we've got positive tick distribution positive AD line and trending to the downside positive breadth and positive delta so trading through that 4340 area our target zone is up there at 4355 again another 15 points of upside can't see my cursor is anyone else having that same problem you see it now mohan hopefully it's working now we might need to log out and log back in mohan might be the problem okay so next setup is on the short side here we open up looking for a short trade below the what below mid what are the internals saying well the tick distribution is negative we have a AD line that's negative and declining breadth negative and declining negative delta so we trade trade through that 4330 area targeting the 4325 we get a tip we don't get an exhaustion signal from there next exhaustion signal we get is this one here you can see this candle has printed low here into that third support zone so just below the 4320 so 4318 and then we get that low tick a day so that's a signal for us to cover that trade here we have a bullish setup we open up above the VWAP in the mid positive tick distribution positive internals both AD breadth and positive delta so we play the break here of the primary resistance coming in around 4450 and our target is up there 4460 6364 and what we note as we get up into that target zone we don't get a new high tick a day so that allows prices to continue to drive up into the third resistance zone of 4480 so good 30 points of profit there to play for as we when we don't get those exhausts sorry exhaustion signals we're able to trail our stops and lock in more gains so I'll give you an idea of some of the setups that we have been trading recently in the telegram channel and in the facebook e-mini strategy group what I want to do now as opposed to just going back through loads of examples here is I'm actually going to pull up the live chart and like I said at the beginning into the tick mill e-mini strategy group every day I post a pre-market trade plan which is delivered before the open of the cash session so in that trade plan I'll just pull up an example of one here this is yesterday's trade plan and so it will blow up but oh yeah this is the recording yesterday posted in advance of the cash session open with the key levels and I provide details of what the trades I'm looking to take for that cash session now obviously like I said in the telegram group you get live alerts and real-time analysis I live stream the opening hour of the cash session talking through exactly what I'm seeing exactly the trades I'm taking we don't do that in the facebook group this is just a free group but for the telegram channel you have to have that live futures account with tick mill let me just show you this is what I'm looking at for today's session these are the past few sessions we started off the week really nicely in the group we got a long trade develop last week and we took 28 28.5 points out and we got taken out at 46 10 we didn't get a trade yesterday there wasn't a set up versus the trade plan and obviously today we're coming into the FMC and one thing you can immediately see is that we've had quite a contraction in range here and that's because players aren't going to be looking to get overly positioned in advance of tonight's announcement so for me coming into today it's going to be a question of just waiting really until this evening and getting that announcement and then seeing how the market internals are shaping up as we just as the cash session is just open now you can see we're getting these initial prints let me just blow this up for you so in terms of the tick distribution is negative here at the moment we have a negative breath it's opening below the zero line we have negative sorry negative AD advance the client, negative breath we have at the moment anyway some bullish Delta developing here cumulative Delta so we let these opening rotations go through and then we'll be looking like I say for me anyway it's going to be sidelines until the Federal Reserve the FMC and the press conference this evening but the core idea for me will be looking if we have positive internals we'll be looking to play a break of the 4630 targeting a move up to 4640 equally if the internals continue to deteriorate today and the market doesn't receive the this evening's announcement well then we'll be looking for shorting opportunities and the key levels there will be the 4603 and the 4586 a loss of 4586 will be a significant bearish development and we'll see us down into the 4570s in quite a quick clip is what I would imagine but like I say for me it's going to be a question of waiting today and seeing how the market responds to the FMC announcements and the potential tapering and the speed of that and potential for rate hikes interest rates next year so it's going to be it should be a pretty slow day in advance of that but certainly the trading opportunities this evening and those are the key levels I'm going to be watching for and all I'll be doing is making sure we've got confirmation from our internals so I'll be recording the video in a minute to post into the Facebook group highlighting what it is what it is I'm looking for exactly in the trade levels and then in the telegram group I'll be updating that in real time tonight giving the trade alerts for my positions if I take any so that gives you a good introduction to the E-mini micro S&P products and my trading strategy I strongly suggest if you're interested in joining certainly the Facebook group and for those of you who have a live account it's really worth your while to get involved in the telegram group we're delivering real time actionable analysis and alerts and like I say since April when we started these groups the trades and plans that I placed into the groups have delivered over 1300 points of profit and if even on a conservative risk metric of risking 1% per 10 points of movement in the S&P that will give you over 130% in returns so that concludes my presentation are there any questions you can just type them into the chat box equally if you don't have a question an N in the chat box is just as useful as I know then I've done a reasonable job of explaining this stuff I'll just quickly post in again Facebook link and that telegram link okay if there are any questions I'll wrap this up here and get into recording the video for the strategy group and I hope to see you in there or in the telegram group as always traders, plan the trade trade the plan and most importantly manage your risk until next time, thanks very much


Let me just write one more clip here. So Primetime have asked me, Primetime have asked me what life is like after the vaccine rollout in Israel. So I'm here in Tel Aviv today outside Mali, Blooms, Irish Bar and as you can see there is a terrific trade being done and there's lots and lots of Guinness and Magners as it's called outside of Ireland being consumed.  People are presenting the green pass on the phone and they have a guy at the door here who's actually checking everybody as they come into Mali Blooms.