QUESTION: JJ so much it seems has happened in your life since you last completed your first interview with us. I do not know where to start. How about you explain your popular podcast you co-host with @AllxDayxRay called “Confessions Of A Market Maker”?
J.J. :I think people enjoy the podcast because I really don’t hide what goes on in the business. I think people appreciate knowing what goes on behind the scenes when their hard-earned money is at stake. Also, we like to use humor and keep things light while educating and bringing on some incredible guests thanks to Steve our producer. These guests bring a wealth of experience you cannot find in a book. People like Linda Raschke and her husband Damon. Harmel, who started in the mailroom and then built an empire. That kind of insight is what I wanted to bring to the public.
QUESTION: If the podcast was not enough, we see you are also are part of the launch and unbelievable growth of the “Micro E-mini Educational Trading Room. Can you explain the concept, your target audience and future goals of the room?
J.J.: The concept of the micro futures room is to educate folks on how this whole beast works. I use the concepts of market structure to show people how markets are actually traded by size time frame players. This is what moves price and we get some wonderful trade locations, risk and target locations from the market structure. We are also able to tell a lot about who is in the market that day, what their intentions are so we can make intelligent trading decisions. My goal is to keep the barrier to entry on trading education low and really help people make good common sense trading decisions. Trading is a business and a good understanding of things like inventory, front running, etc are very useful to traders in taking higher odds trades. My target audience is anyone who wants to trade with some good old fashioned common sense. An example would be I was warning people NOT to short TSLA when the stock came off 900 down to the 735s. The market structure was SCREAMING BUY not short. The price rallied from 735s to the low 940s. The profile showed how the selling just shut off.
QUESTION: You are a disciple of Market Profile. Many of our readers who are new traders may not understand Market Profile can you briefly explain why traders should take the time to learn. And is it good for equities (stocks) or just Futures & Commodities?
J.J.: Market profile is just a way of organizing order flow that has transacted. To put it another way, look at it like looking at the sales in a store while the store is open. You know who is buying or selling what and where. It’s fascinating and the accuracy of it now given the algorithmic nature of execution is oftentimes to the tick. Hey, if I can use this thing to find great trade location, anyone can. How handy would it be to know if you are short if there is going to be no more selling? If you are long to see when the buying dries up? What if you could see when the crowd was trapped? Sounds crazy but like they said in the old days, “The tape never lies”. Well same with market structure you can’t spoof, poof or moof it, TRANSACTIONS, not orders are what tell the tale.
QUESTION: For those who did not read your first interview. You have some background as a 20 year maker maker, now turn retail trader. Do you feel your background on the “other side” of the trade helps you now as an individual trader?
J.J.: I think my background on the other side has helped immensely. I was shocked to learn how many people actually trade this market without having a clue of the mechanics of the system let alone the AGENDA that CREATES order flow. Having taken or assisted in taking over 200 companies public, I have experience in actually CREATING order flow then feeding it into the market via the market makers and by generating retail interest. When you have built a market whereby a client can sell two hundred million dollars worth of stock into, you get a good understanding of the mechanics of the system. Things like clearing and settlement are never discussed but have everything to do in equity trading and deal running.
QUESTION: What is one piece of advice you would give to new traders about trading low float penny stocks, considering you were often on the other side of those trades in the old days.
J.J.: My piece of advice to new traders who want to trade penny stocks and are looking for offshore brokerage firms to avoid the PDT rule is to drop that nonsense and learn to trade a real market using the micro futures. There is no PDT rule, there are no borrows, (or fake borrows those OS firms charge you for) You simply click to short. And you have the US government policing the markets and the firms. The CFTC runs a clean shop. The order flow and fills in the micro-market are wonderful, also there is no selling of 0 cost stock into the market from mysterious offshore companies(causing dilution). Learn to trade the micro, a bad day is a 50 dollar loss. You can basically learn to trade with training wheels. Once you switch to Emini then you can build your account once you have learned how to trade well. The low float game is a trap. My old clients are buying 20 million dollar houses and flying around on private jets thanks to penny stock traders. They thank you for being so careless with your money. Keep trading the otc stuff, my clients can always use another beach house or Bentley, they are not shy!
QUESTION: What advice would you give to your younger self back then. Care to share one or two of your scars that have made you a better trader and person today.
J.J.: The advice I would give my younger self is unfortunately not to trust 99% of the people I did business with. As the guy in Scarface says “Never underestimate the other guy’s greed” Let’s just say a LOT of people out there owe me more money than most people will make in a lifetime. I am a very easygoing person and I trust my ability to generate revenue in whatever environment I am in. So I just keep swimming like a good little shark is supposed to! It’s all made me a better person, I have 0 regrets, it’s been a hell of a ride!
QUESTION: You seem to be a Wall Street history buff. If you had to have lunch with three characters from the past on Wall Street. Who would it be. And briefly why.
J.J.: Oh, I love Wall Street history, U.S. Financial history is fascinating, the deals, the drama. Vanderbilt vs Fisk with Erie Railroad, Harriman, Morgan. Diamond Jim Brady, Livermore of course, Baruch breaking into his own office to trade on European news when he forgot the keys. But I would say, Jesse Livermore, James R Keane, and the Commodore, of course, Cornelius Vanderbilt. Livermore just because he is our patron saint of retail trading. Keane as I would love to sit down with the man who made a market in US Steel so Morgan and the crew could dispose of 500 million in stock in 1901! And of course, Vanderbilt who built the railroads, and ran the most beautiful stock corners, trading on just slips of paper he kept in an old cigar box. More modern figures too such as Sidney Weinberg who started at Goldman as janitor’s assistant cleaning spittoons then rose to CEO. Ace Greenberg who I grew up admiring and of course Lewis Raneri, the reason I became a trader! And a list is incomplete without Steve Cohen.
QUESTION: Tell us something about your co-host and partner @allxdayxrayx (Ray D)that the general public may not know. You guys seem to be like the Odd Couple but with great chemistry together.
J.J.: Ray and I are an odd couple but the thing people don’t know is that underneath the jokes, he is a very insightful guy. He has really helped me learn what people want in regards to learning. For some reason, I thought everyone knew this stuff and he keeps me from forgetting the true needs of the people we are trying to help. Also despite the fresh prince of Bel Air exterior, he is very disciplined and picked up risk management first because of his poker background. A huge advantage as everyone thinks about how much they are going to make, but never about the risk.
QUESTION:What motivates you both professionally and personally?
J.J.: What motivates me personally has always been a love of the markets and how we can learn from history and what these great men and women taught us before. I have always in doing deals love the action of taking something public then afterward making a market for the stock. Creating markets is what I love to do. I love the process of creating demand then introducing supply. Since I no longer can take stocks from a dollar to 300 anymore I really enjoy helping people get the process, pretty cool when someone who has never traded after watching profile and learning the mechanics of the market start to pick out things I missed. Helping people to get that first lightbulb moment when things start to click is a great feeling. Trading is a marathon so it’s nice to have a few moments of clarity along the way, helps energize people for the next step.
QUESTION: What are your hobbies outside of trading?
J.J.: I love classic cars, motorcycles, boats, sailing, etc, but lately I haven’t spent any time doing those things. Also, I love all sorts of music especially Brazilian music, I am slowly learning Portuguese through music. I speak French so it’s in the neighborhood.
QUESTION: What little known fact about you would people be surprised to know
J.J.: I think people would be surprised that I have friends from all walks of life, one of my buddies since we were 5, is a folk musician, I have friends who are artists as well since I have no talent myself I appreciate art and music. Huge opera buff, Wagner, etc.
QUESTION: What are you goals for the podcast and Microefutures.com Educational Trading Room that you teach in?
J.J.: My goal for the podcast is to bring insight to our trading community from respected leaders so they share their insight with retail traders. I was very lucky to have some really smart people teach and help me along the way. In the Trading Room, I really want people to have a fair shot. At least if they come in and see it’s going to be work we can get them on the way. We don’t sell dreams but if you want success and are willing to put in the time, I will do everything I can to help out. And if I don’t know the answer to something I will go find someone who does. I think if more people actually understood the business they would save themselves a lot of heartache.
QUESTION: Thanks JJ for taking the time for this follow up interview. How can our traders reach you on social media or your educational room website.
J.J.: Thank you for the interview, My Twitter is @vwaptrader1 and you can visit us at http://www.microefutures.com