The interview you're about to listen to is with David Son David has a truly fascinating story. He started off as a retail Trader In over a handful of years he continued to refine his own methodology as it relates to systematically trading options and eventually he found massive success. And I don't mean that just lightly. Not only did he start one hedge fund, he is currently running two separate hedge funds.

Throughout the interview, we discussed his personal story, how he views the market and of course I asked him for his most actionable advice with respect to becoming a successful. Trader I Really think you're going to enjoy it? Let me know your thoughts in the comment below. David I Very much appreciate you joining me today and I think a lot of our viewers are going to be interested in knowing what it's like running hedge funds Successful hedge funds related to the world of trading options. Right away, me saying that successfully trading options I can already tell a lot of people's probably ears are perking up just wanting to know where this conversation is going to go.

So before we get into it, just thank you for taking the time. I'm sure everyone's schedule I mean the markets are absolutely crazy right now. So the fact that you took the time to talk with all of us about options, trading and really the market as a whole retail retail education. Thank you thank you thank you! How are you doing today? I'm good Matt Thank you for uh, reaching out, connecting and give me a chance to share my story.

Excited to be here? Yeah I think this is going to be a great conversation so before we get into into it just can you give us a little bit of an idea of your start I believe just from doing a little research on you, you kind of got your I guess initial Taste of the market in the craziness of 2008 and 2009. Is that correct? Yeah no that's right. that was also the time I was in grad school uh getting my master's and yeah, right around 2008 2009. So even if you weren't into the market then the market was still going to be on your mind.

um just because of what was going on and uh I I just decided hey I was going to try and pick stocks for instance. uh but actually I happen to have a friend that was in the options and he when I told him like I want to get into the market he he decided to teach me about options. you know just the basics and so I actually got my start from him and ironically I got my start from selling options as opposed to what normally people do buying options because he kind of gave me the basics and and so I got start yes about 2008 2009. so uh was a Trader for kind of at least a decade or so until I kind of found tasty trade I think we're talking about that in 2017.

that was kind of the original I guess uh, free education right? because I didn't really happen to buy any books or anything but found them. Uh, that really accelerated the learn curve and at some point I just got the hairbrain idea. Like or maybe overconfidence, you know I was like if I'm successful, you know all I got to do is find some people raise some Capital do what I'm doing and get paid for trading. So you know that was the original idea of starting the hedge fund.

Uh, started my first hedge fund in, you know, 2017 started a second one in sorry, 2018 started a second one in 2021. So I've been running those two. Um, and that's kind of the the very quick trajectory obviously if you have some questions about kind of details in between, but that's kind of the high level from start to finish. I Just like the the backd rock of what's going on right now I'm sure you've seen all the articles of how actually seeing spikes in zero DTE trading.

The amount of option trading right now is just off the chart, especially with considered to be higher risk ones like super shortterm and I guess the counterparty that is really you where when you started, probably thanks to your buddy there you started with selling options, which is honestly it's obscure. it's a rarity. Did you ever have even like maybe a little of that that psychological greed or interest of like well hang on maybe I could hit a big ding. That or for something about it.

Was it your background with math or something that you're like no, no no no I feel much more comfortable just selling like to me, that's just so uh counter to the current narrative we see in the world of options trading. Yeah no that's uh, like I said, it's good to kind of dive into the details because when he first told me about selling, he explained the idea of high probability where you collect the credit and then kind of the idea that if you get challenged you can roll out. Now my my thoughts obviously have changed since then, but that was like originally it seemed like magic. like the idea can just roll, never lose, collect the credit and For Better or For Worse probably for worse.

It worked very well because remember this was actually I probably started it right after we bottomed out. So you can imagine put selling for the next year and a half two years you can't lose. Yeah and that's honestly not good as a beginner to do very well. I Think you can attest it as well.

Like you get a certain uh, mentality of hey, you know you're a genius or this, this can't fail or you know you start thinking about how much you're going to make you know. early retirement all you know. Like you start literally planning out like what how much money you're going to have in X years. So yes, that worked very well for a couple years and then I don't remember what caused that you know because there's always Cycles right? So at some point the market turned around you know gave back a bunch of earnings and uh, kind of got a Awakening um and it was around that time I think fortunately I happened to take a bunch of capital out to buy my first house and uh, that forced me to kind of be on a sideline a little bit.

and then around that time at had another friend who knew I was into options and he just found Tasty Trade because he was just kind of looking into stuff to do. So he introduced me to it and so it was kind of just a lucky timing that I I got like a dose of something else besides just me sitting there thinking thinking I'm the best right? and and I kind of Dove head first into that that entire space and watched all the videos, joined a bunch of Facebook groups tasty trade groups online, got connected with other Traders so that was kind of like really opening my eyes and mind to like the world of options gotcha and then from there so it was always I guess apparently an appreciation for Math and in previous things I've heard you always kind of refer to it as it's just it's another Market tool And for there you're understanding the mathematical problem probabilities, the statistical probabilities of this tool and obviously you're using that to your advantage. which like still, from a human aspect what we're seeing in the markets right now. let's just even call it 2022, 2023 Well actually, over the past three years really 2021 all the way up until now we we see people trying to buy these quote unquote lotto tickets and hitting it big on each one.

but you and I both know the odds are not there. Yeah, once in a while Sun Wears wins the lotto. but I think there's just something that maybe, uh, it's attractive to the the human mind, but especially when you are now running two funds, that's not the type of stuff that you want to be involved in at all. that would definitely be a difficult thing to explain to your investors, so on.

that. obviously in the world of hedge funds and that stuff I Know there's a lot of rules and all that, so there's not too much we can get into. But from a highlevel standpoint for all the people watching this right now, let's get into a conversation about the major things people can do to be a successful options. Trader Obviously there's a whole host of resources out there, and for folks, anyone listening right now David does have his own podcast where he gets into like the nitty-gritty Detail I'll make sure it's linked in the description of the video if you want to find all of his work and how to connect with him.

but from the high level, where do you think retail should start their journey of being a successful Options Trader I Think what's important first of all is kind of the the mindset and the expectations because you just mentioned for instance, if you heard about options from the stores of retail the zero DT Lotos that's going to set you up to like basically fail right? because you're going to be uh, you know, searching for that that big win or you think you're going to you know 10xt your money. So first of all, education there are you know tasty trade option Alpha Those are two kind of resources I Think basically finding something that you can get the basics like option Alpha For instance has literally uh, they call it tracks, beginner tracks, intermediate tracks. these are videos that are free. get the foundation knowledge but after that I would say regardless of kind of the level that you think you're at, fund the small account and just try different things, expect to lose the money.

That's the first thing. Expect to lose the money. Your goal is to learn right because by doing you can kind of watch the positions change. Even watching a loser is experience right? You can see what causes options to do what because there's a lot of moving parts.

That's one of the big differences. When you're Trading stocks or Futures these are called Delta one products which means they move linearly right. You you make money when it goes up, you lose money when it goes down. but options have a lot of Dimensions time volatility.

Uh, the movement of the underline which also feeds into the volatility. So they're all kind of interrelated. But just trading, you don't have to get fixated on anyone's strategy again. I Think if the expectation in the beginning is to learn right and that account that you fund, that's tuition right? that's not money you're going to make.

um I Think that will set you up, uh, to at least have a chance of succeeding because you'll be on the right path and there are. This is a tough one. I Think having groups or someone you can talk to and kind of share ideas. Uh, for instance, I mentioned, you know you go on Facebook there's there's two.

If you're just SE tasty trade options, you're probably going to find a couple larger groups. M These are a good kind of beginning tool to at least get exposed to other people. Eventually, it's a little too noisy. Um, because these groups have like 8 to 10,000 people, so it's it's It's hard to figure out the noise from the signal in there, but uh, eventually there are smaller groups.

Again, this is a little tough because I know there's so many scammers out there and like there things you'll pay for that you it's just a waste of money. But I think being able to find a group of people kind of. you can relate to like-minded people people that are trying the same thing maybe at the same level so you know it's a good accountability thing because you can have people that kind of keep you honest or you can talk about when things are going bad. uh, that's I think that's an important factor of kind of helping you stay on the right path I Like that.

uh just to put a pause in it really quick. I I Still feel like as you're starting at like oh try this strategy. That strategy. what would you say to retail who right now though, like so many people get stuck in the very step one of I'm either yoloing a call I'm yoloing a put because I have a gut feeling something's going up or down would you say even for there like maybe the classic I I Know the classic tasty thing is you look 45 days out.

You sell premium at whatever a 15 or a 20 Delta and you roll it at 21. Do you like that as a strategy starting point or would you look at something a little bit more I guess in the similar vein of thought of like a wheel strategy like do you like those as quote Unquote starts to a strategy cuz I've heard you before and it sounds like you're even far more complicated on that. like believe the really your current strategy is like you're running with like Delta neutral to the market. so like I think your levels above that.

but for someone who has in I I guess that goal or they really want to become like let's say to the same level of success as you in terms of strategies, where would you recommend they start just to at least start learning. Yeah, so there's a there's a couple things to touch on there. First of all, I what I do Now as you mentioned, it's not really that similar to like the tasty trade style for instance or I don't do like a wheel or cash secure puts. but I know that those are kind of the well-known ones because at least if you Google those things you can find people who teach those strategies now they they may not teach it the best way.

but like those, you can find something on there. so yes, those are perfectly fine. but again, as long as you kind of do it small and a small account and have an expectation that if you lose the money, it's more about putting putting a position on and being able to follow the P&l and how it moves. You're going to internalize so much more than any book or video you're going to watch, so that's perfectly fine.

Now one thing I do want to kind of differentiate my strategies at least the ones I teach on the podcast for instance, they're not actually that hard in terms of execution and we'll talk on this later. I have this thing called return on Time where I like simple execution, what's difficult is all of because yes, maybe there's like one two, three steps and it seems easy. but there's so much thought that goes into why Step One is this way why step two is that way. Understanding why we do a certain thing and the expectations behind that will go a long way towards having the conviction to actually run a strategy.

Because a strategy doesn't matter if you can't follow it. and a lot of the difficulties with options or with any trading is the psychological aspect and not be able to stick with it right? There's so Pitfall psychological or otherwise so understanding and getting educated to the point that I can follow these one two three steps. and trust me, I am not overstating this. It is as easy as something looks on paper.

It is very, very hard to pull the trigger and follow the rules. you know in a long period of time. Uh and there there's nothing else to say that's just how it is like I know like that can seem hard to believe. like if if I yeah if you give me these steps I'll follow that right? Trust me, once you try it, it's not that simple.

Um so yeah, no I think what you mentioned, you know the wheel or tasty trade style like it's fine. but start small that that's the most important thing. Start small as long as you can afford to lose it because really the learning value of hands-on experience that will be really big in the beginning I Love how you put that! One of the very first trading investing books I ever read uh, the author and it explained trading is in fact 70% discipline, 20% skill, and 10% luck. So you could probably teach anyone what you need to about options, investing, trading Futures crypto and everything in between.

Yeah, there's going to be a little bit of a luck Factor but so much of it is exactly what you just touch on is can you stick to whatever plan if it's complex or simple and we all have bouts with that of being disciplined or undisciplined. and most of the time it's when you fall off. That train of being disciplined is when your account really takes a hit. So uh I I actually love how you put that but touching on what you just said in in reality from my research on you, you have a lot of cool terms like that.

so you said return on time uh previous ones I've talked to you about uh, expectancy, hacking and also premium capture rate. So you come up with all these cool trading Finance investing terms I Would love to dive into some of those because I think they're very important Concepts that at any level Trader Investor very much needs to learn so we could kick it off with whichever one you like. If you want to talk about what you just referred to your return on time, what's that all about? Let's start with uh, let's start with expectancy hacking. actually perect perect with options.

Uh, actually this is true with anything but the way I play with options is the reason options, especially selling options can get such a bad rep. You've probably heard the term uh, picking up pennies in front of a steamroller. y Uh, this refers to the fact that when you're selling options, you col a premium. the premium represent your max profit $100 whatever it is.

but generally this is called a negatively skewed risk reward profile. Your potential loss is orders of magnitude, is larger it could be 30X 100x and sometimes unbounded. So without any risk management, you won't have a good chance of making money. You're going to make a bunch and then get run over a steamroller, right? I Literally have an episode about my thoughts on it's called pennies in front of a steamroller.

but with risk management. Uh, when you talk about expect expectancy is kind of like your expected profit on average per trade. there's three variables that go into it. There's the average win size, there's the average loss size, and there's the win rate.

New Traders Generally focus a lot on the win rate and who wouldn't right? Everyone likes to win and oh I have a 95% win rate or Whatever It Is Well a 95% win rate where one loss is 30 times the size of the winners. Your expectancy is negative, so expectancy hacking for me comes from the mindset of you can't control all three variables, right? The win size, the loss size, and the win rate. and controlling win rate as we just said, can have a pitfall because if you're not managing losers, you're just still going to lose money. So what? I focus on controlling is two of the ones that are easier to control.

the win size and a loss size Win size. You know, sometimes you can just let a trade run to 100% profitability. That's fine or you can manage. You know, with the options, you can take a tradeoff at 50% profit or 60% profit.

I mean taking profit. That's a pretty common concept. With the loss size, right? you can. I Usually use a stop loss now.

I Know there's a lot of controversy about stop losses I Get done in my podcast, but just we'll just simplify. use a stop loss. You can manage the loss size. So if you control something like your loss is to be two times your winners, right? Risk two to make one.

You've basically defined at that point what you need to break. even. so if you risk two to make one, you need exactly a 66.66% You need to win two out of three trades to break even. What that means is if you win more than that, your expectancy is positive.

If you win less than that, it's negative. Period. Now like I said. I've just said we can control two of the the the the variables, the third one the win rate.

There strategies you can design depending on the Delta of an option you sell or there other variables. But but needless to say you can design or tweak the strategy such that the win rate is higher than needed to be positive expectancy and you can do it through back testing. You can do it through. Usually back testing will give you context you have to live trade to see if it actually pans out.

Um, but that's the idea of expectancy hacking. It's like I'm going to fix the two variables that I find easier to control and then kind of massage or design or find a strategy within those confines that the third variable win rate just happens to fall high enough that your expectancy is positive. So that's expectancy hacking now. Premium capture.

Uh, this is uh, a way of looking at people talk about like measuring success, performance, profitability or you talk about how much you want to make. A premium capture kind of encapsulates all of that in a metric that's easy for you to kind of go back and compare across time or across strategies. And basically mostly if you're selling premium, let's say I collect uh, like $100 on this option and then let's say I do it. Um, four times.

So my maximum potential profit is $400 but if in the course of trading I have to pay back $200 either via stop loss I close it out I've netted 200 right? So I collected 400 I paid out 200 to close out and I'm done. So my net profits two and I originally sold 400. So the premium capture rate is just a simple division. You know 200 over 400 is 50% so in that case I would say my premium capture is 50% But the reason why this is useful is because across different strategies you or even the same strategy.

But over time as long as you're measuring and you just all you do is total up your profit over time and divided by the total premium you sell, that's your premium caption rate or PCR. But tracking that kind of let you gauge the performance of your strategy. And for instance, one of my strategies across a long-term study back test my expectation is about 27% So basically I I I would net 27 cents for every dollar of Premium that I sell. Now that's obviously not every year.

Every month, every quarter, it's long term. In fact, one of my strategies went through a draw down last year. It's just now coming kind of back up to what I believe is a long-term expected PCR but it let you gauge in my kind of over under. and of course these are projections and expectations and you can adjust them accordingly.

but it's just a kind of a nice one number. I'm not saying other numbers don't matter, but this one is like a nice it. It adds some context to your trading. Now Finally, the return on time.

uh, part of the reason of all of these metrics, the PCR and the expectancy hacking. For me, it brings the trading approach down to a simpler execution because I want people to know that trading and especially options, it doesn't have to be about complex math and do all these calculations or spending time in front of a screen or analyzing this. analyzing that my Approach is I want to make reasonable return with minimal effort. Then when I say effort I'm talking about physical trading like I applaud like and I encourage effort and the education right? Go learn, go read, go watch.

But it's all about soaking the knowledge but then designing strategies that are low touch. I Guess that's one other word low touch strategy so you can meaningfully add value to your Investments or to your account, whatever without having to quit your day job without having to go be a full-time Trader Um You Probably heard the Parto effect right. 20% effort for 80% of the results like I kind of want to have embody that principle but I want like 1% effort for like 90 5% result, right? So that that's the idea of return on time. That's kind of the philosophical approach that I take to trading man.

I Really like that? That reminds me of kind of a term I like to use is emotional capital of we only have so much emotional capital and sometimes you're over leverage and it's eating you up and you're watching it. You're watching it. You're watching it and you hope it goes your way. Sometimes it does, sometimes it doesn't but I I kind of like that and I see the relation.

but uh, please stop me if I'm wrong. Like kind of on the larger picture, you seem to be viewing the markets as almost the casino. But you are the House. You care about the law of large numbers.

You're not caring about one individual trade here there or anywhere in between. You're looking at this positive expectancy. So if we were to talk about whatever roulette Blackjack where the edge is slightly in your favor, slightly in The house's favor and you're just taking that bet over and over and over again and once again. Once you have a large enough amount of bets, it should be reflecting the stat.

The statistics of the situation that you've already like predetermined. It Is that a fair way to characterize this? Not really a Trader but almost. um, uh, like a mechanical system manager. Is that right? Yeah, that's right.

But I Want to caveat that, uh, just because you're the house for instance, it doesn't mean it's like easy money. You still have to manage risk like casinos have to manage the risk. There's there's uh, things in place that they do to manage the risk like limits on BET sizes just as an example. So again, what The options? Especially selling options? That's inherently we mentioned that negatively skewed instrument, right? It's negatively like if it can go wrong quick so you have to be kind of on it and really understanding the risk.

and then because if you don't understand a risk, you might take it too lightly and then you won't follow the rules and you like, oh, you know this one time let's take off the stop like oh I don't want to lose right? So like there's a lot of things that go into and this what I meant by like you know I almost make it sound like okay, put on a trade, you know, take profit here. Take a stop loss here and it should work out right. And it should. But in the Moment In the Heat of the Moment Like It's hard to kind of follow these things sometimes.

But yes, generally. uh, the kind of things I do I want higher occurrences right? And you know a couple of the strategies are kind of daily entry so you can get 250 of these entries a uh in a year for instance. Um, there's some things I do that might have multiple Ines a day. so in that case, you're getting thousands of occurrences.

But yes, long term. you look at these numbers and that's why I talk about the average win size. the average loss size. These things can all.

um, once you kind of go through a sequence of 100 trades or 200 trades or whatever it is. and I just mentioned that this one strategy I had I was in a draw down for 14 months. Now the way that worked is and and this is expected like last year was a down year. this was a put selling strategy so obviously you're not expected to make money in all environments.

so it took a lot of losses right? And it was a big sequence of losses from like March through like October until the market finally bought them. But it literally had one loser from then till now that was 100 I I I tweeted about it I was like huh I just realized I've won like 180 out of the one last 81 trades. Wow and like who would have thought you know but again, it's not saying that's it's like the perfect strategy or anything. If you had started at the bottom you would have thought it was.

you know Breon slice bread and that's not necessar a good thing either, right? Going through the ups and downs, it's what kind of like you get Battle Harden right? You know what to expect but the numbers played out and that strategy is I I I Last checked you know I I mentioned I usually expect like 27% PCR it's hanging to like 23% which is really great given the last year that just happened because obviously last year was negative PCR for instance. so that's kind of what what I mean. Um, but yeah, you're right, the characterization of like the the casino mentality as long as you recognize casinos need to manage risk too I just want to hammer that in. Yeah, I like that.

Uh, on the human side of it, how do you handle those types of draw Downs whether you're running a hedge fund such as the way you are or maybe even before that when you were just trading exclusively your own account cuz you know, obviously those times come around so for you, is it still like nope, this is my system and I'm sticking to it or do you ever get to the point of O Is my system maybe not doing what I thought it would like? How do you handle that part of it? So that's uh, sticking to the system and trusting the plan. that's part of it. But the other important part is the sizing. So you know.

And and the strategy I mentioned I Used that in one of my funds, but that fund has four to five different strategies and being able to size each appropriately. you know. So the draw down for that particular strategy as overall, uh, in relationship to the overall count. it really wasn't that bad.

And it's all about um, again, the expectations because if you want to make 100% a year, you have to take big risk. Now if you're trying to take you know and whatever that risk reward profile is, uh, there's something called the mar ratio. For instance, the mar ratio is simply your annual growth rate. Let's say you have a 10% in your growth rate, right? or Kar compound in your growth rate and your Max draw down ever is like 10% right? So it's one over one.

so you're your Mar ratio is one Now if you have a lower draw down. so a a high Mar ratio means you have a high return relative to your draw down. But the reason I point that out is that Mar ratio. It's only return to draw down.

but it doesn't tell you. the magnetude 100% return with a 50% draw down has a mar ratio of two. A 2% return with a 1% draw down also has a mar ratio of two, so there's there's some things there that you have to recognize and on the surface they may seem the same. like oh, if I have a strategy that makes this much I just double the size and I make double the money true, but the volatility is doubled.

The potential draw Downs doubled. So if you have the proper expectation and aren't swing for the fences and we can talk about that in a little bit. Kind of just general expectations. you won't have to have those big risk.

I don't think you have to have big risk to make kind of meaningful return. that especially over a longer term compounded can be a significant growth. Uh, so sizing to answer your question? Like sizing? Yeah, no. Okay, that makes a lot of sense.

And I guess before we get into uh, expectations at any level of this, uh, a quick question for you here. I I I'm so curious of a person who started off obviously. uh, you enjoy math like it. It definitely was not a weakness for you by any means.

And then from there you get into the world of retail trading. Then you open a hedge fund, Then you open up two hedge funds for you and your strategies right now. and I'm kind of connecting this back to the casino. Uh, metaphor.

Do you care about what the market does on any given day? Whether we're up down in the middle or for you? Is it just robotic? like you're just sitting there like how many hours a day are you actually doing things or is it all just systematized and you're almost cold to it and like almost no positive or negative emotion. Like could you run us a little bit through that of like not only functionally what you're doing, but also how that ties to your psychology on a day-to-day basis. So to a large degree. Uh, we have a lot of strategies that are basically automated and we have some strategies that aren't automated, but they're so mechanical they might as well be like I could just run it through a bot for instance.

So the strategies definitely don't care what the Market does and I know that some of our strategies aren't correlated either. So I intuitively do not care. But and this is partially related to the fact that I do manage other people's money when we kind of, uh, you know, let's say we We tell a perspective investor that hey, this this strategy is uncorrelated, so it's it's going to be a good, uh, solid performance regardless of bull market or bare market. And and they like that, right people who doesn't And so the The point is, we're not supposed to Benchmark We're not benchmarked against like the S&P for instance.

but people are people. They see the market and they're going to Benchmark you And so it doesn't matter if we're long-term beating the market if this year markets up. You know the Market's up what? 15% 16% in like half a year right? And and we're not. They don't care that the long-term graph we still outperforming.

For instance, they just ask what's going on like you know so it's really weird. like they will never complain if the Market's down and we're up. but they're always going to wonder why the Market's up and we might not be up right even though mathematically, if something's uncorrelated, it's uncorrelated. So I don't like if somebody ask like hey, what's going on The only answer I can say is like nothing like literally, this is what's supposed to happen So the reason I mentioned that is like because of that angle I I like I get annoyed like when the market oh why is the market up like 15% like what is this you know.

So like it makes me want to be bearish even though it doesn't really matter and so things like that but like I would imagine. Actually no even people on my Discord for instance like yeah, like they're not managing funds but they have the same thing. It's like we know where're doing good work, we're doing good performance, we're doing good trading. but then there's always the ah, just buy QQQ I could have been up 30 like yeah and and it's it's hard to get away from that.

um I actually want to do a pood later where I just talk about like it almost would be better if we could just block out the market, block out the indexes, block out the chart like why am I looking at candles charts when it shouldn't matter right? I should just look at my P&l and my risk and I should just be at the end of each day. Oh I was up X today I was down X today and then after a month. Oh great. I'm up X but it's almost like a lot of unnecessary anguish.

Really unnecessary, but like we just do it to ourselves so that that's what I say to that. Yeah, no, completely understand it now. I I'm sure on a personal level you like to stay informed with whether whatever the Fed's doing, unemployment reports, big macro events, but in terms of like trading or decisions for you or like I guess the the community that does the same thing that you do does that come into in play like at all or like you're just like nope, don't care like you might like want to be informed just to be an informed human. but in terms of your trading, does that come into any form of like actionable trades or decisions? So it does.

But I don't think it should. we all know it shouldn't But and this again goes back to what I said about how hard it is to follow a plan. So for Zer DT like we do zero DT in there April sorry uh May early June was kind of tough right? Whenever things are tough you, you always get the grass is greener on the other side syndrome and people start finding things to blame pointing fingers or they start going off the rails like oh I I'm not going to make money today anyway. so if today is a Fed event or there's some bias, oh, why don't I try this like oh, we gapped up.

Maybe I'll try being bearish and selling cars today and instead of doing my usual whatever it is. So yes, it it very much and again, that's why I think which some people say, don't turn on the news. That's probably good advice, but you're right. I I'm I'm interested to keep up with it right? and so uh, no, it it it.

It kind of bleeds in to uh, the the psychology every single day, especially when the things we're doing normally may not be doing the best. they can so absolutely doesn't impact and I don't I I think it probably doesn't help so it shouldn't mathematically strategically whatever it is, but it does so that that's the plain plain truth of it. Yeah, on a personal note, I battle with that all the time because with my show I have to stay up to date what's in the news, what's happening in the market, and then that in one way or another colors my buas for the day when in reality you and I would probably both agree. What matters is price, action, movement up moving down and you expected value, the statistical likelihood of whatever ABC you're playing out.

but once again, sometimes that that human mentality really overrides it. So it's interesting to see at various levels. And I'm sure you've talked to people who are highly influential and large in the market I bet it even impacts them. So from the highest level to the the most novice new Trader we all have a little bit of that human aspect to it.

Uh, I I find that to be truly fascinating, but kind of moving off that a little bit in terms of retail learning. there's obviously I mean the start of really 2021 until now has been a crazy time for retail. Like I mean retail trading has just exploded and we're even seeing that in little sub products such as zero DTE trading. But overall, do you have any I guess core thoughts of the direction of where it's heading? Do you like it? Dislike it? Do you think there's a better way that retail should be learning? Do you think there's negative things that AR being learned that you think like shouldn't be learned at all? Where are you at with that? especially looking at it from the point of a person running two funds.

I Think generally and this is from my point of view cuz it's not like I'm out there doing research or looking up educational stuff. but like I I think the education and the reto landscape is like very lacking or there's holes. Um, and I I and I think I know why I was actually when we were getting ready for the show. you know we we talked about this like a week ago.

We're planning for it I Was thinking about how to explain this. So this is kind of my mental model and this is why return on time for me is such a big thing. So if you think about kind of four quadrants. Okay, so there's two variables.

one variable is the the time you spend and this is like trading and the other variable is your return. So if we intersect these two on one end is uh, low time spent and low return. and this is where I put kind of the the passive investing right. It seems like a lot of people traditionally just get funneled into this and there's reasons for because people usually fail.

If you try to do things, you usually mess it up and it's easy to just keep on buying. Buying right? Low return relative to what you can do right? Um, and low effort, right? So that's one end of the spectrum. Now the other end where people want to be is high time spent and high return. And this is kind of the aspirational like you want to quit your day job.

You dream of being like a day trader and like putting all this effort and being able to live your life. Go trade on a beach and you know and and the culture online of these kind of meme stuff socks. and you know people with the Lambos and the thumbnails of of of those YouTube videos and the Gurus and the furus. That's kind of where they're aiming to put that now.

I Honestly think most people think they want to be in that quadrant, but reality is, it's not easy. First of all, statistically, not hardly anyone's going to be there. But the other thing is, you really do need to put in the time right. It's it's like almost harder than a full-time job in some instances.

Okay, so those are kind of the two opposites. Now there is the other quadrant. Now this is the bad ones. Is the high time spent? Low return? Yeah, right, you don't want to be there.

And I think a lot of people who aim for the high time high return end up in the High Time Low return, right? So that's just that's the pitfall. Now the final quadrant. I Think this is where my angle of attack is. Is the low time High return? Now now low time high return might seem kind of like too good to be true, but remember that ratio is uh, instead of focus on return, focus on the return relative to the time if your time spent is really little.

Honestly, any meaningful return that's that's a good reward right? So like you don't have to Um for me I Think there is Meaningful ways to once you get educated. especially now with options with all these kind of alternative products and ETFs that are now in the Retail Landscape that are available Uh, you can meaningfully kind of put together portfolio that is kind of not too correlated to the General market. Uh has a pretty good return. and the reason why I focus on this quadrant right? The kind of the low return uh sorry, low effort, but moderate.

You know, moderate return return is because people don't want to spend time on something that they don't think they're going to succeed right? So if they spend time they want to aim for that high effort High return. But often they fail right now. If they want to spend the time and they don't there's no reasonable chance that they don't believe that they're going to get something out of it. They're not going to put in the time, right? That's just the nature and that's why you get so many people who like aim super high and then fail Because if they if they want to put in the time they want to get something out of it or at the same time that they don't want to do something where it's so hard or takes so much time, they got to quit their job right? It's a large commitment for a lot of people, so if I can provide some education, well I mean I'm doing that.

But if the the landscape can shift and people can recognize that they can learn kind of tools and approaches where you can meaningfully augment or supplement your current you know funds. Your Nest Egg Whatever it is without having to quit the day job, that's the thing. You can do your job, do whatever, and still make a difference in your Investments and kind of. that's that's what I've been trying to kind of put forth as my message.

Um, but uh yeah, I mean that that's kind of my my big thoughts on that I really appreciate that and I 100% agree. So maybe to wrap this up on that note, if you could go back in time now with everything you know and your your vantage point of the markets and you're talking to David back in 2008 and 2009 and I'm sure there's many things you'd probably tell yourself, but like is there a main message or two that you're like you would almost grab yourself and like shake it and just be like hey man, you got to look at the markets in way XYZ Is there anything that comes to mind in that particular line of thought? Um, yes, it would basically be SE Focus on the longterm in the sense that if you make even call like a mid mid low double digits right 10, 15 20 you know 20 is on the highend but even 15% if you if you think about that and just do simple math and kind of compounded. or if you're able to add you know if you take your savings and add x amount and just do it out over like 10 15 20 years like you'll blow your own mind. like how much you can meaningfully create for yourself.

But on that same note, the way to kind of achieve consistency is to be very strict in Risk Management right understanding risk so that you can implement the risk management. stick with it. Those two things for me have been like and obviously as a money manager those are more important but I I'm almost, you know, ironic. I' I've talked to people before that were like oh I you know they were money managers but like they quit and decided to trade their own money because it was like too hard and and for various reasons right? psychologically it's very demanding.

But for me I almost feel like it made me better because I had to stick to those rules and like be very careful. So I think in a way like being a manager maybe made me manage my own funds even better. Um, but it a lot of the philosophies and approaches that I take were kind of informed by the fact that I happen to also manage funds. But those two things like a reasonable expectation, right? That's the big one.

Reasonable with the risk management. Like if you can control the big losses and control the draw downs and you have these sort of generally positive expectancy approaches and you know, combine them and stuff you you have a good chance of hitting your goals. um, especially in a kind of mid- long time. Horizon That is absolutely phenomenal input.

Now I'm sure there's people listening to this who are going to have some follow-ups or just want to check out what you're doing. What's the best place for people to follow up and see what you're up to on a day-to-day basis. So I'm on Twitter Atth Trade Buster So no s at the end. Um, the podcast is called the Trade Busters with an S at the end.

So if you just Google the trade Busters you'll find that and then I have a page that kind of warehouses all my episodes. a lot of my strategies that I teach a bunch of essays I have like my own curated podcast of other people, just a bunch of random content. Um, it's th Trade.com Now don't be surprised because when you click it it, it actually just redirects to a Google sheet. Okay that it looks like a spreadsheet.

Now this is like a legacy thing like I I I've been doing this thing ever since the days I've been on. Facebook I used to just post my trade log so it's just something where I always it was like a running joke that I was going to make website and I said I would and I never did and now it's just that's just how it is so you just got to live with it. So the Trade Busters.com The Trade Busters Podcast and Twitter atthe Trade Buster and for everyone listening I'll make sure that's Linked In the description below so you can easily find it. but for me and the audience, we truly appreciate your time.

Very enlightening and also just very exciting to talk to someone who started off just loving the market, got really good at retail trading, and started running your own funds. Obviously your story is inspirational to many of us. So the fact that you took your time out of your day to talk with all of us thank you, thank you, thank you and hopefully we can talk again in the future. All right, thanks for having me.

It was a bless.