Jason Leavitt: Chat With Traders Interview - Notes
This interview is incredibly informative. A lot of this info is broad wisdom for traders but I think it’s still incredibly helpful.
Trading Style:
Trend following system on US Equities
Uses consolidation patterns within an uptrend
Two Types of Trades He Makes:
Shorter Term Trades
Holding Period: 1-5 days to capture 5-10% when markets are good
Positions: Holds 4 or 5 positions at once
Longer Term Trades
Holding Period: 6 - 9 months
If there are bigger trends/trades around the big themes
Fundamentals have no impact on his trading
Steps to Finding Stocks:
Uses TC2000 to scan stocks. He looks at about 400 - 600 stocks and flags the ones that look the best for him
Compare what groups are most represented in this list of best stocks and focus on these groups that are doing really well. He also goes to the best themes and groups and scans those to see if other stocks in that group look good.
Narrow top 10-15 during the week. For the day he focuses on anywhere from 0-3 stocks
Entry:
He trades using the chart pattern
Entry point - When the stock is in an uptrend and breaks resistance
Don’t sweat the entries → money is made on the management of the trade
He usually enters all at once
Are you buying after it crosses resistance or as soon as it touches your resistance level?
“If it’s a stock that I like with a good story and a possible 6-month hold, I will sometimes buy when it’s in the pattern or when it’s breaking out. When I pinch pennies on the entry on longer-term plays, I usually miss out”
“With a short-term trade, I am much more precise, I have an exact level I am trying to get in at”
Helpful Wisdom:
Need to categorize trades - they are either quick or longer term and you need to decide before the trade occurs
Early on in his trading career, he would trade in a vacuum (ie. just trade the setup)
But you need to be synced with the market. Must keep track of the market and what the group is doing at all times!
A lot of his success comes from understanding that when a group does well and has strength, the stock will generally do well.
Diversification - “is used when you don't know what to do”
I judge myself based not on whether I win or lose money, but if I did the right thing, and made the right decisions. You can make a bad decision and make money or a good decision and lose money, winning and losing money isn't the point. It is following the process and making correct decisions.
Common traits of successful traders:
Don't ever let a small loss turn into a big loss
Specialize in doing one thing very well
There are some traders who trade the first 5 minutes of the open and that's it. There are others who trade just the employment report, once a month... Specializing in one thing can be incredibly profitable as a trader!
Common traits of unsuccessful traders:
Don’t have a plan - they don’t know what they are going to do at any point in time
Style drift - every few weeks they change their trading strategy because things aren't working.
This is different from when you first start out because you have to figure out what works for you but once you do that you need to stick to one thing
They don't/ can’t take a loss
Information overload
No end to the amount of information that you can find online
References:
Youtube Link: Common Traits of Million Dollar Traders & Swing Trading Major Trends w/ Jason Leavitt