Episode 29 ... Brian Shannon (63:13)

As a kid, watched Wall Street Week with his doctor Dad on Friday nights
Made money as a kid from caddying and delivering newspapers
First stock he ever bought was LoJack, made $6,000, hooked him for life, "why work?"
Grew up in Massachusetts?
First job after college as a stockbroker
Passed Series 7, realized job was glorified telemarketer
Went to Lehman Brothers next and learned how to sell
Learned how markets worked using other people's money
Read the Cabot Market Letter, idea was buying above levels of resistance
Read Investors Business Daily, saw prop firm ad that offered 20:1 leverage
Made $25,000 deposit with this prop firm
Excited with his 48K baud modem trading from his home's basement for the firm
Opened office for this NYC-based prop firm in Denver
Prop firm made money from commissions
People are their own worst enemies in the market
Still astounded by dumb decisions he makes even today
Chantal Pharmaceuticals, miracle skin cream, stock got halted after hit piece in Barron's
Lost $8-$12K overnight in Chantal Pharma ... one lesson he learned along the way, position with too much size
In 2000, 2001 market was getting crushed and he was losing pretty consistently, thought about quitting
Slowed things down, reduced size dramatically, ground his way back
His first six or seven months, he was profitable every month, then he got cocky
Trading is an evolution, you always come back to the basic principles
"Only price pays. Follow the trend" -- these are his catchphrases
Hold yourself accountable, don't blame other things, only yourself
Uses multiple time frames
Swing trading his preferred time frame
Looks at direction of 50-day moving average: uptrend or downtrend
Looks for volatility contraction, diminished volume, pullbacks to "support" on daily chart
Drops to 30-minute chart next, looks at 5-day moving average on 30-min chart
Distance from entry to his initial protective stop, distance to perceived targets measured -- figures his risk : reward
Drops to 10-minute chart, looks for an entry that makes sense given all of the above analysis
Don't gamble on earnings plays
Accountants lie, CEOs lie, only price pays
Ego and the need to be right clouds your judgment
Fan of using Volume Weighted Average Price -- VWAP -- esp. since some specific event (e.g., the IPO date)
Been looking at VWAP for 12 or 13 years
Stumbled across VWAP, it spoke to him ... now becoming more widely used by retail traders
Stan Weinstein's book, Secrets For Profiting in Bull and Bear Markets, had a huge influence on him
"If they don't scare you out, they'll wear you out"
Traders tend to be ADD looking for action
Time frame must suit your personality ... how much time, capital, and experience do you have?
Never start off by day trading, that's something you evolve to, or devolve to [chuckling]
Start off with a longer term horizon, like swing trading
Swing traders should make more money than day traders
Trading is extremely difficult ... anyone who says it's easy is lying ... misleading you for nefarious reasons
You need a lot of capital to start
People get impatient, make big mistakes before they learn who they are
First master yourself (understand yourself and which time frame suits you)
Brian says some nice things to Aaron in parting ... Aaron not as polished in these early episodes
www.alphatrends.net
His book: Technical Analysis Using Multiple Timeframes
Twitter: @alphatrends