Episode 184 ... Mike Mangieri (72:20)
Met Mike Katz in 2000
Applied for back office job at firm where Mike Katz was trader/broker
Partners of firm had falling out, a new firm needed to be formed with Gary Roth providing capital
Did all the grunt work with FINRA to get new broker dealer approved
2008-2009 world comes crashing to a halt
Firm acting as a broker mainly at this point ... more and more redemptions
Moved from being a brokerage firm to a proprietary trading firm
12 years later they're still standing
Market went from two exchanges to totally fragmented
Needed to understand all the new routes
Doesn't talk specifically about how much capital they had or have
Original partners: Gary Roth (deceased), Mike Mangieri, Mike Katz
Looked for recent college graduates as new traders
2012-2014 got up to 20 to 40 traders, that was the sweet spot
30-40 traders in total at Seven Points now, including branch offices
Seven Points not run like a factory, they build relationships with their traders
Mike Katz trades and Mike Mangieri handles regulatory things, paying bills, etc.
Calls around to the traders to see if their heads are right
Easily watches risk / buying power / positions for all 30+ traders on a single monitor
Halt risk is a constant worry at the firm
Twitter has screwed up a lot of traders
"Tell people I'm a dentist" (not a trader)
Mangieri makes fun of Twitterers talking about the "process," that it's OK to blow up
Youngsters follow rooms, "I short low floats, I use the pre-market high, I use that as my risk, then I short against there" .. always the same script
Twitterers don't take ownership of their losses
Twitterers standing in front of their Ferraris, laptop out at the Sistine Chapel
"I killed it in the morning, so I flew to Italy for the weekend ... Asshole"
Daily lockout numbers of $300 to $3,000
Your Twitter friends are not going to write out your rent check
Trading is the side hustle of guys who run chat rooms that have hundreds or even thousands of subscribers
Everybody can hit a 90 mph fast ball in the batting cage, it's a different matter when it's coming from the mound
Losses make you doubt everything
There's a domino effect when you're losing money
People get in a panic state ... I have to make it back as soon as possible
You forget good news in 30 seconds
You have to have a life outside of trading, otherwise you'll burn out
Don't be on social media all night after being on there all day
You can't live and breathe trading, you will burn out
Figure out the max loss that you can take without sending yourself on tilt before things get dark
You need someone in your life who holds you accountable for your losses
Your mentor should not be trying to sell you a DVD
Lockouts at Seven Points are very low
Struggling traders are sized down quickly
Trader A is comfortable trading 5000 shares... give him 7000 shares and he goes haywire
You can only get a little bit bigger every day ... you can't double it overnight
When you push the size on people, it'll screw them up
Position size does not equal penis size
No one wants to see a paper trader anymore ... don't try to apply at any firm if you haven't risked real money
"I short low floats" ... why? They all regurgitate the same thing
Don't be a one-trick pony
You have to find people who fit in at the firm .. one bad apple ruins the bunch
"I don't want to sit next to this guy."
Guy who slams his keyboard constantly, he's probably going to have to go
They put the new traders on demo at first, massive amount of journaling in TraderVue
How do I find liquidity in this stock? What route do I take?
Not a lot of hand-holding today
Have to tell people even though they're hard working, they have to go
Trading, whether at home or in an office, is a very high turnover business
Most common problem is that people are too afraid to trade
People take tiny gains because they're afraid
People won't stop themselves when they're on tilt, you have to stop them
Trader who has a new rule every day to prevent himself from doing something -- has has to go
Used to be a million prop firms that used RealTick ... not the case anymore
Twitter: @MMangieri34