This week’s episode of Beyond the PDT was another great one, where we got the pleasure of speaking with Agent 47. Agent is a trader with the MIC group and has found consistency in trading nearly everything that is running. Simply put, Agent plays stocks that have volatility, be it low float runners, large caps with earnings, or anything in between. Needless to say, he is a successful trader who dropped a lot of great nuggets throughout the episode. Matt and I found one of the best lessons he had to be learning to de-associate trading with money. Once he was able to forget about the money aspect of trading, he was able to focus more on taking trades for the purpose of taking good trades as opposed to taking trades for the sole purpose of making money.
Like in our last episode with Tim Bohen, Agent 47 tells us that he uses trading as another stream of income – he is not necessarily a full-time trader. That being said, they have both shown us that it is possible to trade as well as have other ways of making money. However, the real matters talked about in this week’s episode were heavily based on trading psychology, which is ultimately what makes a successful trader. If you have time and have not already, be sure to give this week’s episode a listen!
Who Is Agent 47?
As mentioned earlier, Agent 47 is a member of the My Investing Club, which has presented us with a number of successful traders to talk to in our past episodes. While he had a bit of a rocky start with them, not knowing if he wanted to continue being in a chatroom, he soon realized that there was a lot of valuable information being brought in from strong traders that he could be learning from. Low-and-behold, he began learning different methods of trading from these traders and was able to expand his trading palette.
Moving on to the personal side of Agent 47, he is a trader originally from Pakistan who moved to Norway to study at university some time back. He went to school for finance as the school he attended had the number two business school in the country of Europe. As with many of the other traders we have talked to who have also been finance majors, it has helped them in trading in some way or another, whether that be by being able to understand stocks better from a fundamental standpoint, or simply by having a better understanding of numbers and the market in general.
While we never really got into what Agent 47 does besides trading, he does have other streams of income on top of trading as well. This is something that has helped him to be able to detach himself from money a bit, as he knows he will be able to still have money coming in if he was not to be successful trading. We will get into this a bit more in the following, but this is something that has helped him to become a consistent trader.
How Did Agent 47 Get Started Trading
When Agent first got into trading, he was not as well-versed as he is today. Small-cap low float stocks were not something that were in his arsenal. In fact, when he first got into the market, he was purely interested in long-term investing, which is the same way that a lot of us first began trading. However, once he began to see plays that would make large intraday moves, especially earnings plays, he realized there were other ways to make money in the market.
Because of this, he first started off trading large cap’s earning plays for a while, but then through learning about other types of short-term trading, began to trade whatever he saw that had volatility. The reason he began trading faster moving stocks, he says, is partially because of who he is as a person. “I am not the kind of guy that could play GTA, I’m more of a Modern Warfare kind of guy.” What he meant by this is that he simply is not a patient person, as many of us aren’t, and this has had an impact on how he trades.
Fundamentals and Technical Analysis
Being a finance major, it is expected that Agent 47 has a decent understanding of fundamentals. Because of this, we asked him how much technical analysis versus fundamentals impacts his trading decisions. His response was simple, but very important. While fundamentals do play a large role in the overall price of the stock, that does not mean that the stock price is going to be representative of its fundamental value on an intraday term. For stocks that Agent swings, he says he uses a bit of fundamental analysis to get a gauge as to where he thinks the fundamental value of the stock is going to be over a period of time, but during the day, momentum traders have the ability to take the price of the stock far away from the fundamental value of it.
For that reason, Agent says that during intraday trades, fundamentals are not as large of a contributor to his decisions. That being said, he is not by any means saying that fundamental analysis is not important, rather, that technical analysis to him is simply more important in terms of intra-day trading.
Psychological Aspect of Agent’s Trading
In terms of psychology, this was one of the more interesting interviews we have had so far. Agent 47 told us about how he typically only trades for about an hour a day, and in order to stay fresh and on top of his game, he likes to break his trading into different intervals of time. Instead of looking at his trading as a one-hour block of time, he breaks it up into 15-minute intervals. From what he mentioned, he got this from the idea of boxing and how it is broken up into rounds, and that he looks to do the same thing with his trading. After every 15-minute interval of time, he takes a step back and refreshes his mindset. If he took a bad trade in the first interval, the next interval was a time to look at his next trade with a fresh mindset.
This episode with Agent 47 was a great one that both Matt and I were able to take a lot away from. The information he dropped in this episode was extremely important for all traders who are looking to find consistency in their trading to hear, and if you have not, definitely be sure to check out the full podcast episode. We look forward to bringing you next week’s episode with Ricky Analog, where we will go into more detail about fundamental analysis!