Through a side interest of mine – sports cars – I recently got talking to a chap local to me who came along to a “cars and coffee” event that I’d organised. He turned up in a nearly new Lamborghini painted in dazzling yellow, and so I was pretty sure from the off that he wasn’t the shy, retiring type.
We got talking and initially he mentioned he was involved in some VC work, but after talking further, I discovered he also traded stocks, in particular, NASDAQ stocks. It subsequently turned out that the man I was talking to was the Monaco Trader, who runs a very successful Twitter account with over 9000 followers, and his own website.
Both these websites show what he refers to as ‘transparent trading’, i.e calling out most of his trades in near real-time on his Twitter account – hence the substantial number of non-robot followers.
He simply isn’t the type to pay for followers.
I invited him for coffee and a chat at a local hotel, and we sat and talked about business and trading. With his consent, I’ve included a brief element of our talk below, in an informal interview style.
How long have you been trading?
Monaco Trader: Since 1999
Why did you decide to start trading?
Monaco Trader: A close friend of mine was into trading and he told me how challenging it was… That was it for me! It was a new challenge and a new goal to learn trading.
Is trading your main source of income?
Monaco Trader: Around 35-40% of income is from trading (depending on the year), the rest from VC and Incubator businesses, property & overseas investments.
What are your objectives from trading and have they changed since you first started trading?
Monaco Trader: Profit is my primary motivator. However having a plan, executing that plan and being successful is more satisfying then the profit itself.
How much time do you spend each day trading and when in the day?
Monaco Trader: I usually trade NASDAQ small cap stocks, looking for parabolic moves. I trade the morning session in the US and occasionally the evening session, but often leave the midday doldrums alone. You can trade too often and sometimes the key is knowing when not to trade.
How would you describe your trading style?
Monaco Trader: Swing trading style, but adaptive – if a profit opportunity presents itself, I’ll trade it.
What markets do you trade?
Monaco Trader: NASDAQ small cap stocks. Most of what I trade is traded fairly transparently on twitter.com, where I have over 9000 followers.
What criteria are you looking for to signal an opportunity is time to trade?
Monaco Trader: 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.
What research tools do you use?
Monaco Trader: 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 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.
What is your attitude to risk?
Monaco Trader: I like low risk, high reward environments.
How much %age of your capital do you risk on each trade?
Monaco Trader: Maximum 20% of my total capital can be utilized for one stock. Never more, generally much less.
What products do you use to trade and why?
Monaco Trader: For charts I use Sterling Pro, most other software and scanners are custom made system works on IB platform.
What brokers do you use and why?
Monaco Trader: 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 – good short list) & Interactive Brokers (IB – more for swings).