Moist Mango: Interview on Investors Underground Notes - Putting in the Work
A look at Moist Mango's Interview on Investors Underground
Trader Name: Moist Mango.
Trader Overview: Ten years of experience trading forex, stocks, options, and cryptocurrencies. Began trading in 2014 but faced an account blow-up in 2016. Over his trading journey shifted from forex to US equities, options, and cryptocurrencies.
Below are some key highlights from the interview with Moist Mango (MM) on Investors Underground. Below I have categorized my notes into a few main topics.
Who is Moist Mango
He is a multimarket multi-timeframe trader who has a wide range of strategies and is fairly comfortable diving into unique situations. He maintains a much higher emphasis on simplifying trading strategy and maintaining his confidence in order to avoid outsized drawdowns
Early Resources:
Most of the early resources that MM learned from were relatively not that good (for example: BabyPips or DailyFX) but they're not the best educational sites to use
About 2 years into trading, he found “The Playbook” by Mike Bellafiore and that had a huge impact on him. From there everything that he saw, he brought back into the structure of that book that he sort of outlines in that book
Evolution of a Young Trader
Each level was so much harder and more stressful than you could expect because you know you finally think you've made it and then it turns out you haven't
Spent a lot of time chopping around from a newby level to a consistent level and usually, drawdowns or market environment is what caused the level changes to occur in his performance. There's that famous quote: “You are only as good as your last trade” and for MM that described his journey in the beginning perfectly.
The main reason for staying in the “game” for so long was his stubborness but also his love of the markets
Trading various instruments
Stopped trading FX in late 2012 as he knew that he didn't want to trade FX full-time and found stocks the most interesting of the assets to trade.
Entered Tim Sykes, Investors Underground, and SMB Capital chat rooms to learn more about equity trading
Large Scale Trades
He mentioned 3 Types of Big Trades you will come across:
A normal trade that is just ridiculously good in terms of risk-to-reward
Unique situational catalysts that require an on-the-fly position sizing adjustment (hardest type)
Example: Roaring Kitty live stream announcement which was a huge unexpected event that you needed to react accordingly
Pre-planned in advance move that you can mentally be prepared to put on siginifant size and a situation where outcomes can be rehearsed (MM’s favourite type)
Putting in the Work
This isn’t talked about in the interview but MM first talks about his massive NVDA 0.00%↑ trade where he profited $1.6 million. But he explains his logic for the trade and IU shows his entire write-up in the video. I put his write-up below. The reason I wanted to emphasize this write-up is because you can truly see how much effort is put into the post-trade analysis. Going back to understanding all the levers and factors is exceptional. And this is the type of analysis that all good traders should be doing!
How to Gain Flexibility in Conviction
First, having a deep understanding of how markets work and knowing the supply and demand dynamics
Second, having a deep playbook
Having intraday setups means that he can use those intraday plays on bigger themes/ ideas on the daily timeframes in order to find appropriate entries
Therefore can pull on all types of potential executions to effectively implement the idea he wants. Marios Stamatoudis (a famous trader) talks about the important of how a simple idea can have multiple approaches which leads to different PnLs for traders. Highly recommend you check the post created below
Entry Perspective:
Has zero interest in picking tops and bottoms however the only time he shows interest is when you have big character changes in stocks in play.
Trading in a Different Time Zone
Because MM lives in New Zealand, he goes to sleep at 8:30 pm and wakes up at 12 am in order to trade the markets at 1 am local time.
THIS IS DEDICATION!
Navigating Drawdowns and Blowups
In 2016, he was in a substantial drawdown. He explains that the ticker that blew up his account was when he used max buying power and had initially a wide risky stop. He was short, the stock rallied, and he froze.
His logic he describes at the moment was: “That stop that I was risking was way too much I don't want to lose that and then whoop out goes the rest of it”
Before the blow-up, he was close to consistent profitability where he would have periods of 3 - 6 months of straight profitability but built a bunch of bad habits. It took months and months to unlearn those bad habits that he had.
After the crypto boom in 2022 where he was incredibly successful, he went on a 18 - 24 month drawdown. Peak to trough was roughly $3M versus his career earnings at the time of $10M.
In order to get past this slump, he needed to get back into the routine/ grind mindset. He risked $100 per trade but would tilt off bad trades losing substantially more. He considered retiring at that point because it was mentally taxing. He later bounced back from it.
Adapting to Market Environments
A good trader can make money in any environment but it does require the trader to be performing at a high level and that can be really demanding
But more important than being good in an environment is just recognizing the role it plays and ensuring that between those good environments whatever they may be, you're hitting base hits and maintaining your profit curve as you should be
Most of MM’s earnings come from a couple of the big opportunities each year with base hits to provide the stable income between those larger moves.
New Trader Tips for Changing Environments
If a new trader found a setup that works, that they've backtested, gotten comfortable with, and tested it live for a while, they're beginning to size up, and they found their first profitability. You don't want to overthink it by constantly thinking if the market you are in will die out in the short term
A trader should understand why their strategy works by understanding the supply and demand dynamics.
For example, the hard-to-borrow short landscape has changed dramatically over the decade. In 2014/2015, they were easier to trade but if you understood why they worked and what dynamic was contributing to it then you're probably doing pretty well now
MM’s Greatest Strength
To put together a large number of discretionary variables like a puzzle and then use conviction to size that idea
MM Indicators He Uses
Tries to keep it as simple as possible. He will use:
VWAP (regular trading hours and pre-market inclusive).
Anchored VWAP (on very rare occasions)
Simple support and resistance lines
10 / 20 / 50 simple moving averages on all time frames (he doesn’t overanalyze how important these are)
Past chart history to characterize what is happening
Example: For shorting a stock, if a stock is in an uptrend for multiple days. After 10:30 am on each of those uptrend days, the price has never been below VWAP. On the proceeding day, it's below VWAP after 10:30 am, it could be an indication that there is a character change, and that could be the bread down day
-F4VS
