Episode 164 ... Nick Fabrio (84:10)

Wanted to be a doctor
Started working at a casino, 4 AM to midday
Working in a casino is depressing, everyone's losing
Sold cars after that, was pretty good at that, lasted a year
Started frozen yoghurt shop, hard work, paid off debts, sold out, 23 yo then
Retail is horrible, too much competition, frozen yoghurt is "optional" [discretionary spending]
Doesn't regret yoghurt experience, learned a lot
Got job at something called Wholesale Investor. Boutique broker. Not high pressure sales
Willing to take a risk, it's in his nature
"Bryce" turned him onto trading, back in 2010, 2011 [Bryce Edwards]
Learned a lot of from Bryce and others in chat room he was in
Replaying stuff on Spark? [no idea what that is ... it's this]
Did year abroad studying in US
Started with $10,000. Lost $300 in first month, second month made $800
Added $10,000 more in second month once confident
Built account up to $65,000 within five to six months (January 2016)
Only traded stocks between 30 cents and $3
One tick is a full cent over $2, half a cent under $2, and then lower from there
Would risk $50 a tick on his highly confident trades, $25 a tick on less confident ones
Scalping when he began
Watches market all day long even though he is in trades briefly
Only focused on one setup at first
Always been fearless about losing money, unlike most people
Been trading full time now just under three years
2016 on exchange to US, didn't trade as much
Scalper trading off catalysts, news
More comfortable short than long
Average holding time is ten to twenty minutes
Wishes he could hold for at least an hour
He's holding when he should scalp, and scalping when he should hold, working on this
Comes in each day with a watchlist, filters through looking for candidates
40 stocks on his watchlist at the open, many charts open on Spark
ASX opens by alphabetical group, two minutes apart [odd]
Earnings news, contract wins ... these are good catalysts
From 7 AM to 4:10 PM he's in front of the market
Received a cease and desist letter from GetSwift(?) after posting four page report on Twitter
20 cent IPO went to $4.50 and now it's back at 35 cents
"Rubbed him up the wrong way"
Took his information to the AFR [whatever that is ... it's this]
In a thick book, he'll risk $500-$1000 a tick
Peruses the AFR [whatever that is ... see above]
Learned about Daily Report Card from Austin Mitchum
Internalize what you're doing right and what you're doing wrong
Trying to grade his setups in the moment now
Sizes by tick value and liquidity, how much protection he has in the book
Fair bit of spoofing in Australian market, algo activity, bid propping common
Recent Cobalt Blue Holdings trade was an A+ short for him
Illiquid stock, so good opportunity for a move, took a large sized trade
Got out within 20 to 30 minutes, but should have held longer
He is critical of himself, always room for improvement, a bit of a perfectionist
Does all his trades manually
Only uses mental stops, something else he has to work on
Does everything off the cuff, all feel based
If something goes against him, he gets out
If a trade does not work right away for him, he'll get out
Scratches lots of trades
Gets in and out in one go
He's an adrenalin junkie, if position not large enough, he loses interest
70-80% of his profits happen in the first 30 minutes to an hour
Trades Australian market from Texas
Mean reversion "wallet padder" trades, "income" trades
Recently crossed $1MM in trading profits mark... after two and a half years
Has financial freedom but doesn't really care about the money, doesn't spend it
Bryce's mentorship was key, learning curve greatly reduced
"Nick is a freak" ... trading a game that suits his personality
Strengths: cutting losers quickly, "learn to lose," unaffected by losses, doesn't fight losers
Weaknesses: shorts too much, looks for reasons to short with obvious buys, doesn't relax enough
Plays reversals to VWAP
Not really a charting guy, more of an order book guy
Internet failures really "grind his gears"
Has no dollar loss limit for the day, he just grinds back
Lazy about doing daily report card now
Advice for amateurs: having a mentor is key, focus on doing one thing and doing it well, size up
People who aren't passionate aren't going to make it, you have to live and breathe it
Trading isn't a path to freedom, it's a path to prison (in front of the screens) [I'm chuckling]
Trading isn't stimulating or interesting to many people, yet they still try to trade and wonder why they fail
Trading isn't a job, it's just enjoyable
Don't over-plan starting, just dive in, immerse yourself
Let the smart people do the algos [or people who think they're smart; Nick is clearly smart :-)]
Paper trading is the worst thing you can do
Risk $1 a tick at first, don't even cover commissions, but *never* paper trade
Read Bella's books, they're awesome
Trading is like poker ... 95% psychology, 5% skill
Trying harder to hold longer ... at least an hour
Twitter: @longhorncapital