Tradervue Conversations Episode 4 - Ricky Analog

Tradervue Conversations Episode 4: Ricky Analog

Welcome to the fourth episode of Tradervue Conversations! In this episode, we interview Ricky Analog, a professional equity trader and Tradervue user who specializes in day trading and swing trading. Throughout this conversation, you are going to learn how Ricky started trading, how he trades, what his trading edge is, and what he advises developing traders to do to adapt in the current market conditions and thrive.

Ricky Analog

Tradervue Conversations is a series of videos published on our YouTube channel where we talk to professional traders who share their experiences and advice. The first edition of Tradervue Conversations has several more upcoming episodes, so be sure to subscribe to our channel and turn on the notification bell so you won’t miss new episodes when they are published.

You can watch the discussion in the video right below or read the transcript.

Table of Contents

Video Interview

How Ricky Analog started trading and the markets he trades

How Ricky Trades

What Ricky changed in his approach to trade better

Ricky Analog’s risk management strategy

Ricky Analog’s trading edge

How to adapt to changing markets

What Ricky does to improve his mindset

Ricky Analog’s advice for developing traders

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Video interview

Watch our conversation with Ricky Analog here:

If you prefer to read the conversation instead, here is the video transcript:

And here is the video transcript if you prefer to read the conversation instead.

How Ricky Analog started trading and the markets he trades

Richard: Hello Ricky. Welcome to the first edition of Tradervue Conversations. We’re happy to have you here. How is it going? How are you?

Ricky: I’m good, man. Nice to talk to another Ricky.

Richard: *laughs* Yeah, thank you for being here. It’s such a pleasure. And so let’s kick it off. Tell us a little bit more about yourself, how did you start trading and what markets do you currently trade?

Ricky: I’ve been trading for about nine years. You know, I started in late 2012, early 2013 actually, during the hot stock craze. And I learned Twitter and Fintwit, and learned how you could follow people’s alerts on Twitter and realized real fast that that’s not the way to profitability. It took some bumps and bruises, got back up on the horse, figured out what I needed to change. Probably the same things that a lot of newer traders struggle with, like learning the hard way that risk management is a real thing. I’ve been profitable for… I would say seven of those years, seven in the last nine.

So, knock on wood *knocks on wood*, barring anything crazy happens, like, honestly that’s one of the great things about developing what I consider bulletproof risk management is that I sleep well at night. I know, like, worst case scenario is taking a manageable loss and moving on and being okay with it.

So now I’m primarily an equities trader, I trade my own account. It’s very systematic what I do, even though I execute with discretion. I moderate over at which is kind of like a trading community. We like to think of ourselves more like a mentorship community where people can come and find somebody that will, you know, actually take them under their wing and mentor them. It’s not an alert service or anything like that.

True Trader

And so, you know, I trade pretty much the first 30 minutes of every morning from—I’m out in the West Coast—I trade from about 6:30 to about 7AM. I spend the next 30 minutes on—we livestream over our community. So I’ll livestream my trades, and then I’ll spend the next 30 minutes chatting on Zoom with the community and going over questions, things like that. And then I like to, you know, bugger off, and enjoy my life. I play a lot of golf, I’ve got three kids so I do a lot of things with them when they’re not in school or daycare, stuff like that. Yeah, so I’m not sure I forgot to cover anything right there, but that’s me in a gist.

Richard: Thank you for that summary.

How Ricky trades

Richard: And so let’s get a little bit deeper into how you trade. So you did mention that you’re focusing more on the opening sessions, so the first 30 minutes. Also, you did mention that you’re trading mostly equities—correct me if I’m wrong—and also that you execute in a very systematic fashion, but taking into account a lot of discretion. So walk us through a little bit on how a trade looks for you in terms of timeframe, what is it that you’re looking for, walk us a little bit through your edge if that’s okay.

Ricky: Yeah, sure. So I primarily trade mid-to-large caps. I trade a lot of small caps but, as of lately, actually one of the benefits, I think, to be a large cap trader that also trades small caps is it gives you the ability to, instead of trading small caps every day and just looking for “what’s gonna be the hot play”, I actually have the ability to say “you know, I can sit on my hands and look for those three or four really, really A++ opportunities every year in the small cap world, and I can still, on a regular basis, trade larges caps”. So the large caps that I trade have certain minimum requirements they need to meet. They have to trade enough liquidity, typically I don’t look at anything less than 2 million shares on average per day. I need a range, I need at least $1.5 of ATR typically depending on the price range of the stock. I’ll make an exception for a $15-20 stock if it has a $1 ATR; there’s probably still some money to be made there.

From there, I am looking at what had a catalyst either that morning or the morning before, might have a small gap up or down, and has very obvious key levels on the daily chart that I’m looking for to make an emotional move into it, whether that’s a spike or a flush off the open. And I’m typically executing mean reversion trades. Now, they’re not always the type of trade I execute.

So basically, one of the things that we teach over at True Trader is this basic reversal strategy based on capitalizing on unsustainable momentum in the market. So why is it so good for the first 30 minutes? Well, because that’s the price discovery phase. You got Market-On-Open orders from all kinds of large institutions, you’ve got people that, you know, it’s a giant auction, right? So people are really trying to establish what is their value for this underlying equity for the day.

And so, I think a good example would be this morning. Today is like, what, the Sixteenth of May? So one of the trades I had this morning was that I shorted ZIM on the opening rip into some levels. And I took my slice of it, I think about a point on a $60 stock. So, you know, a decent gain. And [I] come back at the end of the day after playing some golf and I see it, and it’s actually higher than where I had ever shorted it. That’s not what I care about. What I care about is that the move that it’s currently making is not gonna be sustainable. It doesn’t mean it can’t go higher, but it’s gonna take a breather most likely first. So that’s what we’re capitalizing on.

Again, there are different nuances to it, so there’ll be situations where something may rip off the open, and if the daily chart is screaming it’s a bullish-looking setup, instead of shorting that, I may actually wait for an emotional flush back in some levels where I feel more comfortable buying that equity. So there are some nuances to it and different setups within the strategy that I trade. That’s pretty much the basics of it.

Richard: Okay, nice. That’s super interesting. How about your timeframe? On average, how long would you say you hold the trade usually?

Ricky: Uhm, if it’s these reversal strategy trades, these are typically no more than five minutes, oftentimes like two to three, sometimes even quicker. A lot of times, if you’re right about your thesis, usually you know it pretty quick. Usually you get, let’s say I’m shorting something that’s ripping into a level. If I’m right, a lot of times I get that really knee-jerk reaction, almost immediately. Like, if I’m timing it correctly, the buying should be exhausting and the seller should be stepping in, and it’s oftentimes pretty fast.

Richard: Okay. You know, that’s really interesting. It sounds like very short term.

Ricky: Yeah.

What Ricky changed in his approach to trade better

Richard: So yeah, let’s go a little bit deeper into your learning curve. You did mention that, at the beginning, you were exposed to the FinTwit world or the financial Twitter space. What was the reason you quickly found out that was not gonna work for you and what actually changed in your approach that took you to where you are right now?

Ricky: Well, when I first started, I didn’t really know what shorting was, and a lot of the stocks I was kind of messing with were OTC. It’s funny, the first pot stocks boom didn’t have a lot of big-board listed companies. It was mostly on the OTC. Obviously, that’s changed now with the marijuana laws changing, but, you know, I watched my account really early on just get cut in half within, like, two months maybe. Just bought the top on everything and it was pretty obvious that what I was doing was not sustainable. For me, for lack of a better description, a lot of people just suck at picking themselves back up when they get beat up like that. For me, I look at those types of situations as like a challenge and, honestly, it’s what I love about the market. If it was really easy to do, one, it wouldn’t be nearly as profitable as it is, and two, everybody would do it, right? So I actually love the challenge, I love trying to solve these puzzles.

So I did a lot of homework, I did a lot of research, I started educating myself as much as I could. I did learn about shorting, I did find some early success shorting small caps on these things that would gap up large, have a big parabolic move, and the problem with that is that if you do not understand how to manage your risk, it will expose that. And it might not happen right away. 

For me, I actually had quite a bit of success and I think, probably, also got a bit of an ego from, you know—sometimes you think that your P&L is telling that you’re like God’s gift to the market, but the market is setting you up for an ultimate fail. That kind of happened, I had a little too much size, a little too early on a name that really took me down a few notches.

And it was at that point where I met my first mentor who is a guy named JM. He goes by AllDayHolds on Twitter. Great guy, great friend of mine, and he was one of the first people to actually teach me about risk management. And once I learned that, that’s where a lot of “Aha!” moments happened. A lot of fears can be laid to rest; if you don’t understand risk management, every trade you put on has this extra level of anxiety or stress because you’re not quite sure, like “is this the one that’s gonna destroy me or am I gonna make it out of this okay?”.

So once you learn the basics of risk management, you can kind of get around that curve, but it still takes a little bit of experience and time to develop your risk management to a point where you actually can feel at ease when you trade—at least for me, I guess I can’t really speak for everybody but I do work with a lot of traders and that’s what we work on the most. It’s risk management and trying to get people to a realization that when you put a trade on, the outcome of the trade really needs to be already accepted, whether it’s a win or a loss, and the ability to just be at peace with it. And I think a lot of newer traders struggle with that.

Ricky Analog’s risk management strategy

Richard: Yeah, I know, that makes a lot of sense. I do agree with you; risk management is one of the fundamental parts in trading. It has to be there, it has to be solid enough if you want to survive and be able to make it, right? And so that’s really interesting. Talk to me a little bit more about how you manage risk when it comes to your trading, your account, your position sizing. A lot of traders have different ways of managing risk, and it’s gonna be a lot according to their strategy and how they trade also. So walk us through how you manage risk when you trade.

Trading Risk Management

Ricky: Okay. So basically for me, let’s just go through an example of a long setup of the open. So something is gapping down and flushing and in really key levels, and I want to buy that stock. I already know I have black and white targets for where I am going to take my profits.

Personally, I use, in order to actually see an emotional move, I do have to drill into some of the lower time frames in order to actually see an emotional move, I do have to drill in some of the lower time frames. So I will be using a 1-minute chart off the open, not because I want to trade off a 1-minute chart, but because the 1-minute chart is gonna show you how fast the move is happening. And what I typically use is the 1 minute 20 seconds SMA, and in order for a stock to move far, far away from that SMA, it really has to move fast. And that’s why I have to use that time frame. If you look at a 5-minute chart, that same move will not peel away from the 5 minutes 20 at the same rate. So basically, that’s what I’m looking for: the rate of change or the acceleration of the price.

So, I know, just from backtesting tons of stocks, that stocks tend to trend under 1 minute and 20 seconds. So for me, part of my job is to identify—I’m not gonna get to the top or the bottom, and I don’t want it—but I want to make sure that I’m using rational, objective targets. So it makes complete sense to use that 1 minute 20 as my profit target. So if something is flushing off the open and pulling away from that, I automatically, within–I mean, it doesn’t take me long to do the math in my head but I actually have hot keys with my system that do it all for me—I can take a look at it and go “we’re 2 points from the 1 minute 20”. And I can see the daily level, I know where I kind of want to put this trade on and where I’m risking against. So it really just becomes a point of “how much size can I get on where my risk is the same?”. And the closer I am to a level where I’m gonna be wrong, I can put that trade on, as asymmetric as it comes.

And, you know, I’m wrong a lot. Another thing that a lot of traders probably should stop worrying about: I bat about 40%, I’m completely fine with that. The cool thing about batting 40% is that every single time I put on a trade, I go in with the assumption that I’m gonna be wrong. It’s fine. So when they work, it’s great, because I have a sh*tton of size. Sorry if I–I’m not sure I can use that word on this *laughs*. I have a lot of size because I’m trying to get the most asymmetric trade possible. And whether you agree with me or not, you’ll see some people who like to add or build into that position. I, personally, don’t like to build into a position because when I’m right, I wanna be right with my full size. And when I’m wrong, I already know my risk. 

So my hot keys will put me in, if I buy something flushing emotionally into a level, I’ll hit the hot key, it puts me in, I know where my risk is at least giving me 2 to 1 for my starting point. And typically I’m getting better than 2 to 1. A lot of times, these trades are so asymmetric that they’re in the 3 to 1 or 4 to 1 realm, and if they work they start working quick, right?

And the thing is, I try to get this through to a lot of the traders I work with. The more asymmetric a trade is, the less I care whether I stop out or not, because as long as I continue to just hunt for those really, really asymmetric opportunities, I can be wrong a lot. And I already know, just from backtesting the data, that it’s gonna be fine. I’m gonna be right about 40-44% of the time. And, I mean, the expectancy on that, with that kind of risk and reward, is phenomenal.

Richard: Yeah, I know. That’s really interesting and it makes a lot of sense. And so, a few things that you did mention. So you don’t scale in and scale out, you’re like one full in, and then you’re one full out if it gets stopped or to your target.

Ricky: No, I’ll scale out. I just don’t like scaling in. So I’ll have my first targets and then there are secondary targets and so forth, but I just don’t scale in. It’s way too easy to scale into something going against you, and you don’t know how that will end.

And my opinion is this: if you’re trying to execute what I’m trying to do, it should work rather quick. It becomes actually really hard to scale into a winner if it’s gonna have such a quick move. We’re talking the course of 2 to 3 minutes. This is either gonna work or it’s probably not gonna work.

Now, I have other strategies I trade where I will join a trend, and whenever I’m joining a trend or I’m looking for confirmation, I will start with a partial position, and I will add to a winner in those situations, but to be honest with you, lately I’m so more focused on just trying to be in, out, done within 30 minutes, and enjoy my life, because I’m making the majority of my money in that opening 30 minutes. I can sit there for another 30 minutes and another hour and another two hours, and then it just becomes like:

  1. yeah, I might make a little more money, but it’s probably marginal,
  2. I might actually get back some of my money, and I’m not cool with that, and
  3. What’s the opportunity cost of sitting here, especially if I get back some money? 

Like, there’s a lot of other things I could be doing with my life than sitting here and staring at charts. And, you know, I trade so that I can have the life I want to have. I don’t live to trade. I see too many people, I feel, just maybe addicted to it or so locked in on the charts all day and, hey, I’ve been there, I’ve done that, I used to do that, and it’s not fun. You get done in your work day and you just feel super exhausted.

I mean, I think they’ve done psychological studies on how long you brain can actually fire at top performance when you’re making fast-paced, important decisions, and it’s not much more than 30 minutes. That doesn’t mean you have to focus on the opening 30 minutes, maybe you’re a trader who trades better from 10 AM to 10:30. That’s still gonna give you that 30-minute window where your brain is kinda like on point, but maybe you can sit out that price discovery phase if you’re looking to join a trend once the market kinda settles down. But again, I don’t really think I need to be sitting in front of my screen for hours a day.

Richard: Yeah, I agree with that. It sounds like a great way to approach the markets. It sounds like you get more bang for your buck just for sitting 30 minutes right at the open. And I’m pretty sure that goes along with your personality and how you approach the markets.

Ricky Analog’s trading edge

Richard: And so, let’s talk a little bit about edge and finding your strategy. I think that’s a very interesting topic. And you did mention a couple times about, like backtesting and having conviction on how you trade and what you trade exactly. So if you could tell us a little bit more about how you came to find your edge and how you actually got that level of conviction, because, correct me if I’m wrong, but you need a level of conviction to put the full size on right away and also on a short term time frame if you will.

Ricky: Yeah, 100%. I actually spoke about that this weekend with a bunch of guys talking about how newer traders tend to throw mud on the wall until something sticks and then they think just because that trade worked, that’s their edge, and they’ll just keep doing that. But you gotta have the data that tells you there’s an actual statistical edge.

So there’s multiple ways you can do it. When I was first starting out, tracking data, it was all manual—Excel sheets, looking for any stocks that fit a criteria like a certain setup I was trying to track. And I would collect data points on everything you can imagine about that stock, whether it’s the float, the OS, the volume I traded that day,  the time of the day it made its high of the day , the time of the day it made its low of the day. Lots and lots of data points that many people might not even think are important, I would collect them because you can’t disregard that data point until you know for certain that it doesn’t have a correlation to a positive outcome.

So there’s a company that came out a few years ago, Spiky, I use them and it’s a great product. They allow you to do all that manual work at the push of a button, you just have to set up these data pools. They have historical tick data going back decades. I mean literally, like, you can go back I think 20 or 30 years and pull data on things that meet your criteria. So that made the tedious task of doing it manually obsolete. And a lot of people still do it manually, I wish they’d realize that “put a price on your time and your work. Work smarter, not harder”.

But I’m not gonna lie, the setups that I’m trading now with these emotional moves off the open, there are certain things I can’t pull data for using their company because they’re still developing these different indicators that we can use. So for that, I have been tracking that data manually for quite a while, and in fact, I’m staring at this spreadsheet right now before we hop on this call—that’s what we’re working on. And it’s just something that it only takes me at most 20-30 minutes at the end of my day because I only track the data for the opening 30 minutes and I’m only looking for candidates, that, you know, made a certain type of move in a certain level. So, on average, there are about 10 to 12 of these stocks per day in the opening 30 minutes. It doesn’t mean it’s every day, but on average there are about 10-12 of them. If it’s not earning season, it could be two or three. If it’s earning seasons, it could be like 20. You get a lot more volatility, you get a lot of things moving with range.

And so, there are only six or seven of these things, I just got to throw them in my spreadsheet, pull the certain data points on those, and then I’ve got a lot of formulas set up in there that do a lot of the work for me. And I keep a pulse on the market so that I know if this setup were to stop working for whatever reason, I’ll probably be the first to know because the data is gonna tell me.

The good thing is that I don’t think it’ll ever stop working. It’s literally based on psychology. It’s based on, you know, if I see something ripping off the open and I’m looking to fade it—I remember being on the other side of that trade and you’re the guy that kind of FOMOs into the trade, you’re like “oh crap, I’m gonna miss this long” and your rush in to buy it at the top, and as soon as you put that trade on, you have that feeling in your head like “ohhh, I did it again, I chased it”. Well, now those are the people on the other side of my trade. And so, that’s exactly who I want on the other side. That fundamental, underlying, psychological background is why I don’t foresee this ever stopping working. I mean, markets have been markets forever because of human behavior.

Richard: Yeah. And so, correct me if I’m wrong, but you have data collected in a spreadsheet, which is some sort of a collection of quantitative data if you will, but you’re using a systematic approach, and also you’re using a touch of discretion. I’m guessing you use a tape also to execute when you’re getting in or scaling out—correct me if I’m wrong.

Ricky: So basically, I have my spreadsheet set up so I can change certain parameters and see how it affects outcomes such as how much risk I’m willing to give something. Not in terms of like dollar risk, but in terms of how much wiggle room am I willing to give something. You know, position sizing is all systematic, especially with the tracking. Like, I’m not tracking to force growth. There are times when a setup will justify a larger position size, but I don’t recommend that for newer traders, I think that comes with time.

But one of the coolest things I was able to glean from the data was the tighter I had my risk, obviously the more often I would stop out. But the P&L went, like, parabolic. And it was from that, it from trades becoming more asymmetric. And you could win less often but make more money. It was like the best Aha moment ever.

Richard: You know, that’s really cool. Especially you getting that information from the data you’re collecting. And so you did mention that you will be the first one to know if your edge, for some reason, would be changing or disappearing from the market, or the market changing and your edge would be, like, evolving if you will.

How to adapt to changing markets

Richard: And so I think we can both agree that recent market conditions have been changing a lot, especially after December and all this inflationary situation. You’ve got political stuff going on. I’m not gonna get too much into detail, but some traders are struggling because of that. Some people are having to adapt, some people are just not getting in touch with the market anymore, especially coming from the Covid situation which, you know, there were a bunch of new traders—a new volume. So what’s your take on adapting to times where markets are changing, your strategy might go out of style, how would you approach that as a professional trader?

Ricky: Good question. A few things. It’s not that I don’t have long-term accounts—I do. One of the most important things I think you can learn to do as a trader, or an investor—it doesn’t really matter what your time frame is—is understand how to read trends. Like what is a stock doing? I know it sounds really simple and rudimentary, but we had a 13-year bull run where, I mean, I remember guys on Twitter calling the top every freaking week for 13 years and there was just a trail of dead bodies all the way up from the bears that didn’t want to acknowledge the market is making higher highs and higher lows. Well, guess what, it’s not making lower highs and lower lows, it’s in a downtrend, and now everybody is trying to call the bottom. It’s the exact same thing in reverse.

And it really just comes back to “can we remain objective and rational about what we’re seeing?”. And if you’re a long-term investor, especially if you’re only able to trade on the long side, you have to look at the market and go “this isn’t the conditions for that”. It doesn’t mean they won’t return, but you gotta be patient.

And, you know, I talk to a lot of guys, they’ll host these really big Twitter Spaces, some guys with some big followings, you know, we all kind of laugh about it. People say this all the time: be patient, be patient. You gotta know what you’re being patient for. If you’re long only, a long-term trader, wait for the market to go back into an  uptrend, it’s really as simple as that. Maybe not even just on a daily chart, maybe  you just wait for the ES or the NQ to start making higher lows and higher highs on a weekly chart so you can zoom out, remove some of the noise.

So it’s not like I’m not, you know, I’m sitting on a lot of cash, and I’m sitting on my hands when it comes to those types of situations. That’s another reason why I just absolutely love being able to trade that price discovery time frame of the day—first 30 minutes—and while a lot of people are struggling, I’m able to make my money and then go enjoy my life.

And it’s funny, I come back at the end of the day, I see the market and I’m like “dude, I’m so happy I walked away”. You could be up 500 points and come back and you’re down 300 points negative on the day on the market and you’re just like *makes an upset expression*. I don’t want to guess that, I’m not trying to play guessing games and get chopped to death. I’d rather just know where I have an edge, which is whenever there’s an emotional move that’s not gonna be sustainable, I take my piece of that pie and then I’m gonna go and live my life.

But I work with a lot of guys who started in 2020 or 2021. All they know is “buy the dip”. You buy something and if it goes lower you can just wait or you can add more, and then a few weeks later, it’s like magic: you make money. And those are the people who are really struggling, because they haven’t ever experienced this shift in the market. And, again, if you could just circle back around to learning how to read the trend, learn how time frames work together, and just understand, like, “this is not the time to buy the dip”. It’s actually the opposite, right? A lot of people might benefit from just flipping their charts upside down.

What Ricky’s does to improve his mindset

Richard: Yeah, I like it, I like it. And so, let’s get a little bit into the trader mindset or a little bit more into the psychological aspect, like, what do you do, Ricky, on a daily basis to improve as a trader? Do you have any sort of personal system or something like, that is trading-related that makes you have the clarity that you need in order to trade?

Ricky: Yeah, a lot of it—I mean, I’m definitely trying to improve and get better—but a lot of it is focused on me making sure that I show up 100% in the morning. So that means going to bed at the right time, getting a good night’s sleep, waking up early and, you know, I’m very routine-based, honestly almost to the point of being OCD. As if, like, I have a routine where I wake up at a certain time, I turn on the screens, I go make coffee, and then I listen to the news, and I sit and do some things. And, literally, if something is off about the way I make my coffee, I’m already in my head going like “oh man, something is not right”. My routine has to be done a certain way.

After that, it’s just about making sure I have my game plan. Sometimes I do kind of like a little internal dialogue where I’m “systems checked. Am I emotionally ready for the day?”

I’ll tell you one thing: systematizing my strategy or my setups removed a lot of the issues experienced by discretionary traders. I don’t care if my ideas are right or wrong, because it’s not my idea, it’s just my system. So, like, I really always kind of liken it to the Simpsons, where you have Homer Simpson, who is by all means not smart enough to make decisions about nuclear power, yet he works in a nuclear power plant, and if that red button lights up, he is supposed to hit the button, right? That’s me. I’m not smart enough to make big-time decisions about what’s happening in the stock market. There are analysts and big funds that spend hundreds of millions of dollars to learn and figure that stuff out. And guess what, they’re wrong all the time too. So what makes me think I’m gonna understand it better than them? No, I’m just Homer Simpson sitting here, when the red light lights up I hit the button, and whatever happens, I still go about my day and it doesn’t affect me on a self-worth standpoint.

I see a lot of people who attach their emotional well-being to whatever the P&L was that day. Like, if they have a big red day for some reason, they’re gonna yell at their kids or they’re not gonna enjoy their evening. And for me, I’ve been there too. At one point, I did not have everything defined black and white for myself, and it was, you know, a lot of anxiety and stress. Seconds would be counting down for the bell to ring, and I would feel anxiety wash over. And it’s from not knowing, it’s like what we talked about earlier, that uncertainty. Is today gonna be one of those days where I get smoked?

And once you systematize everything, and you take all those decision-making parts out of the equation, and take out your self-worth or attachment to the outcome—nowadays, when the bell is about to ring, I’m literally smiling from ear to ear, watching my scanners, going like “bring me some opportunities, let me make my money and then I’m gonna go and hit some golf balls”. So that’s definitely been the biggest change for me, it’s systematizing everything.

Richard: Yeah, it almost sounds like, by systematizing everything, first of all there is no room for emotions or irrational decision-making. And also you’re taking care a lot of what some traders call your mental capital, right? And that’s a great approach, that’s really interesting.

Ricky Analog’s advice for developing traders

Richard: So yeah, we’re starting to run a little bit out of time, so to wrap it up, what word of advice do you have for those developing traders who are coming up and currently having a hard time in these market conditions?

Ricky: Well, we just talked about this. I do like a Sunday prep every Sunday on YouTube—we livestream it. And I always do like a little intro where I try to talk more about psychological stuff. And this week’s topic was “the three things I see newer traders always struggle with”, and the main three things are:

  1. Risk management, learning how to manage your risk.
  2. Defining your system, and that doesn’t mean you have to automate it or write an algorithm, but you need to define it. Somebody needs to ask what you do for a living, and you have, like the 15-second elevator pitch, you gotta be able to tell them. And if you can’t explain it simply, then you don’t understand it well enough yourself.
  3. Sizing up systematically. A lot of newer traders are always trying to grow, they see trader X on Twitter posting giant P&Ls and they wonder why are they only making a hundred bucks a day? You don’t know how long they’ve been trading, you don’t know the struggles they went through, you don’t even know their financial position. Maybe they came from money, maybe their dad got them into trading, who knows what it is? But focus on yourself, and you gotta understand that it’s a marathon, not a spring. So you shouldn’t be in a rush to go from—like a lot of the newer traders are starting with these small accounts, right? 5K, 10K. Well, guess what. If you’re starting with just a $5,000 account, you shouldn’t come to the market with the expectation that that’s gonna double in the first year. What you should be focused on is don’t blow that $5,000 up, right? You need to give yourself the time to learn and make mistakes. And the only way to do that is by mitigating risk and keeping your size systematic, and size small enough that you’re not gonna blow up.

So those were the three things that I think the newer guys need to focus on.

Richard: Awesome. And so, Ricky, where can listeners or viewers here watch more from you?

Ricky: Like I said, I’m over at I have a YouTube channel—like I said, I got my start in the small caps, a lot of people might still know me from doing all the SEC filings. The YouTube channel is just Ricky Analog; I don’t really put a lot of new content up there. I think I covered the basics of how to dig through these small-cap junk companies and find red flags. So if you guys want to learn that stuff, have at it. It’s all out there for ya. I’m on Twitter @RickyAnalog, on Instagram @RickyAnalog, and I’m on Tradervue @RickyAnalog *laughs*.

Richard: Awesome. Yeah, I mean, that SEC files and how to dig deeper was one of the first things I saw from you. I did learn a lot from that so thank you for that. And so, alright Ricky, thank you so much for being here, it’s been a pleasure and I really enjoyed this conversation. We hope to have you next time here.

Ricky: Awesome. I appreciate you having me on, man. 

Richard: Alright, take care.

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