Monacotrades – An Interview with the Monaco Trader [Part 2]

This is part 2 of my recent interview with MonacoTrades.com, also found on Twitter as @monacotrader, a successful NASDAQ stock trader who I’m acquainted with through our mutual interest in sports cars.

[continued from Part 1]

AT: What markets do you trade?

MT: NASDAQ small cap stocks. Most of what I trade is traded fairly transparently on twitter.com, where I have over 9000 followers.

AT: What criteria are you looking for to signal an opportunity is time to trade?

MT: There is no short answer to this one and not an easy one to explain in a few lines. But in general I’m operating in the short side so looking for overvalued companies with over extended charts or companies that use recycled news (nothing new!) or pure scam. In the long side, I am looking for value and keen on finding undervalued & innovative product companies with upside potential.

AT: What research tools do you use?

MT: Like every other trader, I have scanners. However I built and coded my own scanners working exactly to my specification. For swings, I generally work on daily and weekly timescales. For daytrades, I spend around 20 minutes analysing each stock prior to trading – recent and historic news behaviour, who owns the company, what have they had/done before and how have those companies responded in the market. Often, I’ll trade trade stocks where I am familiar with the technology, so I have a better understanding of where the business may be going and how the market is performing.

AT: What is your attitude to risk?

 MT: I like low risk, high reward environments.

AT: How much %age of your capital do you risk on each trade?

MT: Maximum 20% of my total capital can be utilized for one stock. Never more, generally much less.

AT: What products do you use to trade and why?

MT: For charts I use Sterling Pro, most other software and scanners are custom made system works on IB platform.

AT: What brokers do you use and why?

MT: I have an account probably with every broker online. There is no one good broker, they are good for a certain time then another broker gives better service and more short stock availability. However the ones I currently use day-to day are Centrepoint Securities (more for daytrade – god short list) & Interactive Brokers (IB – more for swings).