Michael Nauss, More Interviews

Michael Nauss – Interview

bonpara

QUESTION – Thank you for taking the time to participate in the Q & A session. Before we start in detail. Would you like to share with everyone who may not know, who you are, what you do, where you live and what trade room (if any) and where you can be found every day?

MICHAEL- First of all thanks for having me. I think this kind of content is great. I spent most of my time as a younger trader trying to get inside the head of people that have been doing it for a while. I hope someone out there will find some value jumping into mine (careful in there).

My real name is Michael Nauss and I am from a smaller town in eastern Canada. I have been a trader for about 12 years now, starting in university and always trading regardless of where has life taken me. I am about 80% statistically based and 20% technical in my trading. Outside of my trading, I would work on my youtube channel trying to teach new traders to think of trading in a more statistical fashion. On top of that, I spend a lot of time mentoring new traders.

I work very closely with (and consult for) trade-ideas LLC so I am hanging out in their room some of the time but like to trade alone most of the time. This helps me keep my head clear of other peoples opinions and my focus on the statistics.

 

QUESTION – Do you trade full time? If not, what do you do for a living?  What got you into trading? What are your trading and life goals?

MICHAEL – I do trade full time but as an auto-trader focused on algorithmic trading that leaves a lot of time open during market hours. So outside of trading, I have a few different pursuits on the go. I believe this is very important as trading can easily consume all of someone’s time and energy. I believe trading should be treated like a sport which is to say there should be more time done training for it as opposed to actually doing it.

I got into trading in university where at a job fair there was a booth there for a prop desk that focused on scalping the market for pennies. This was before the computerization of the market when these firms acted as the HFT’s of their time. The firm asked what video games I played and then signed me up covering our losses in exchange for them taking a chunk of profits made.

Goals for both trading and life are about the same. I don’t need to have a mansion. I value my time and freedom and want to avoid needing to work for someone else.

 

QUESTION – We understand you are somewhat of an algorithm coder of trading strategies. Can you explain to our readers in a little more detail what this means

MICHAEL – Personally, I love that in todays world that we can allow systems trade for us instead of having to do everything ourselves. This is something that many traders have still not been able to adapt to but I believe is the future of all trading.

Simply put every trade I make is based off what I have learned as a trader over my time but is combined with recent backtests based of how events that I am looking for have performed in the recent past.

For example, I like to look at topping and bottoming tails on a daily chart for a technical sign of buyers overwhelming sellers. That is the first step but with using trade-ideas I can ask the system to tell in under what situations that this performs best in their recent past and be presented with only those. This merging of man and machine I think is a powerful trading tool.

 

QUESTION – What failure or setback in both trading and life have you experienced that has set you up for later success?

MICHAEL – I will not be the first or the last trade that will mention that they have blown up an account or two in my past. Mentioning before my experience in high-speed scalping of the markets in my youth was a trading style that was completely destroyed when the computerization of the US market.

When this happens I took a large hit to my PnL and my faith in my ability to trade for a living. We had a game that we played and that worked for us. We lived as if this game would last forever so when it was taken away it was a big hit in the gut.

I think the benefit of this was that it taught me that the world is always changing and to not get stuck in your ways. You need to adapt or die.

 

QUESTION – Outside of trading, what strange or unusual habit do you have and enjoy?

MICHAEL – I take on many hats in my life with little downtime but thankfully I can choose what I would like to do it all the things that I enjoy.

The only thing that I would do that would be “strange” to others would be long stents in isolation tanks. I love to be away from tech for long periods of time and let my brain reset in total dark and silence.

 

QUESTION– How would you describe your trading style? How has it evolved over time?

MICHAEL – My trading style is a lot like my personality (which I think is of massive importance). It’s very slow and thoughtful with a lot of attention spent to rationale and reason. I need a reason for every trade that’s both technical and statistical in nature. If I can’t see how this trade would have done in the past I avoid it entirely.

The main evolution has been the use of tech along with the slowing down of trading in general. At the prop desk, I would set up every trade as an “If-Then” scenario in my head. As this has myself and technology has change I have been able to take this thinking and put into programs to take care of it for me.

 

QUESTION – Outside of trading, how do you enjoy spending your time? 

MICHAEL – When not trading I love to do many things not tech related. I have a mutt named Winston who keeps me centered during the trading day. Best of all he forces me off my ass and out to explore the world to keep him tired and out of trouble (little does he know he’s doing the same for me). 

 

QUESTION – What advice would you give your younger self (both in trading & life)

MICHAEL – If you haven’t noticed yet I draw a lot of parallels between trading and life (signs of obsession?) so my advice would be the same. Don’t put so much pressure on yourself. Skills take time to learn and master and there are only so many hours in the day.

I would often with my trading push myself to exhaustion and frustration. This would only lead to slower overall progress then if I took more time off to let new ideas settle in.

 

QUESTION – What good & bad advice do you hear often in trading?

MICHAEL – The good advice always sounds boring and mostly is in reference to risk management but it’s true that when it comes to trading this is by far the most important aspect. Things like “cut your loser short and let your winners run” are chimed so much that it loses its impact to traders. However, these are said by people so much that trade for a living not only for the people they are saying it too but to remind them self. If there is a holy grail of trading that is it.

The bad advice is sadly generally caused by the predatory nature of the industry for new traders. We have all seen them. The traders that have videos of them making a 100,000 in a day while working for an hour from their Lamborgini. These people will tell new traders all they have to do is to follow someone to be rich like them. This is simply not true. Every successful trader had a long journey to find something that worked for them and it’s a real shame to tell people that their experience would be any different.

 

QUESTION – What are your favourite trading & non-trading books to read and why

MICHAEL – My favourite trading books are non-trading in nature but are how the brain works. Regardless if you are an algo trader or a discretionary one everything starts inside your mind. Psychocyberntics for an example is a book talking a lot about how we think instead of what to thinks

Also for new traders, I cannot recommend “Technical Analysis Using MultipleTimeframes” by Brain Shannon as a great way to learn to start to read charts.

 

QUESTION – When you have lost your mojo or focus (both in trading and life), what do you do to get back on track? 

MICHAEL – Long periods away from the world are key for me. Either hitting the float tank or long hikes with the dog. We live in such a plugged-in world that I think people can get caught up in information. Social media fights and Reddit dives take up the limited bandwidth that we have and sometimes we need to reset all of that.

When it comes to trading I love the power of the trade-ideas backtester and AI. I can pull everything off my screen and go back to basics where I know I will have a statistical edge. Resetting back to basics is key when a trader reaches a losing streak. Go back to what you know works and get a small amount of green under your belt then grow from that success.

 

QUESTION  – If you could have a big billboard with your favorite saying or message on it, what would it be. 

MICHAEL – Don’t take life you seriously you will never get out alive.- Van Wilder

 

QUESTION – Thank you, Michael and two more questions before we finish. Why is your handle Bonpara?  And how can our readers contact you on social media

MICHAEL – My handle is Bonpara because the first person that I ever mentored always said his trading goals where “bon para” which in his langue meant “well off” I really liked that answer.

The best way to find me would be on youtube or twitter. I post at least one new trading related video a week over at youtube.com/bonpara

Thanks for having me.

 

 

A great trading site with FREE training content & videos for our readers to view is at    http://www.microefutures.com

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