Episode 015 : Madaz Money – Two Dimensional Trading

June 14, 2019 beyondthepdt

Madaz is one of the most consistent traders in the game with one of the greatest stories we have heard yet. He started off like many of us, as will be talked about to follow, and has made a name for himself on Twitter because of his consistency and transparency. For those looking to learn a bit more about Madaz, check out his website or his YouTube channel as there are a lot of great lessons to be learned from both his chatroom and his videos. While no one episode will make you a successful trader, learning the lessons from all of these episodes and some top-level traders may help you to make it Beyond the PDT.

Who is Madaz Money? How Did he Get Started?

Again, Madaz is one of the most well-known traders on Twitter because of his insane consistency in the market. Furthermore, it is even better than he started trading like many of us – working a full-time job wanting more. As an engineer graduating from college during the 2008 financial crisis, he was not making as much money as he was hoping to. With that being said, he had a friend at work who was into the stock market who seemed to be doing well for himself. This was the beginning of Max’s journey.

While his friend happened to end up knowing nothing about the market, and appeared to have gotten pretty lucky, Madaz knew there was a way to learn. After studying charts and working on his trading game for a few months, he began to find some consistency. At the time, he grew his $6,000 account, of which was under the PDT, to over $40,000. This is tough for a new trader, but it is possible and Madaz is living proof.

At the time, though, he ended up taking a massive loss, bringing his $40,000 account back down near where he started. Many people would have given up at this point, but he knew that this was nothing more than a setback and that trading was a true possibility. The loss taught him discipline and from there, he grew his account to back over the PDT and never looked back.

What is Madaz’s Style?

Another aspect of Madaz that is very well-known is his extremely unique style of trading. As a day-trader, we have a few options. Some hold their position for hours and even may be swing traders, and others are scalpers, being in positions for a few minutes to an hour. Madaz, on the other hand, is more of a micro-scalper, sometimes only being in his position for a matter of seconds.

The reason he does this is to capture the meat of the move and to ideally minimize his risk of halts and other news events that may mess up the trade. Because of his style of trading, he is very reliant on Level 2 and the tape. We wanted to get some insight as to what he did to learn it and got the answer we were expecting – tons of screen time. Very similar to those like Harry Hoss, he recommends recording your screen and playing it back at lower levels during big moves to see the change in the action and simply train your eyes. With time, you will begin to see differences in how the stock moves based on the L2 and tape.

The NoBlowUpChallenge

Madaz made a name for himself on Twitter after starting what he called the NoBlowUpChallenge after a large loss last year. Within the course of 2 days, Madaz lost over $100,000 due to revenge trading and using too much size. That said, he still ended the year green and simply worked on sizing appropriately which has helped him tremendously in his consistency. This has been something that I personally (Bryce) have used to help find consistency as of lately, as oversizing makes the trade too much about the money and not enough about the quality of the trade.

After starting the NoBlowUpChallenge (rules that he still uses to his trading to this day), Max has found tremendous consistency – he even went on a 40+ day green streak earlier this year. When he realizes a shift in the market again, he will begin sizing down until he sees the setups that work for him.

Journaling Trades

Madaz told us in this episode that he is a big proponent of journaling your trades. This is how he has found consistency in his trading especially as of late, as it allows him to see where he is making mistakes and allows him to adjust. It was actually because of his journaling that he was able to create rules for the NoBlowUpChallenge. After seeing the mistakes that he made over time that created such a large loss, he knew exactly what he needed to change in order to find consistency.

At the very least, journaling trades allows traders to see what they are consistently doing well and what they are not doing well with over the course of a long period of time. For those who are able to have the discipline to make changes based on this, they are likely to find success.

Some traders are proponents of tracking data, and while Madaz is also big on tracking data on your setups, it seems that the best data to track may be your trading habits. At the end of the day, any setup can work, but your ability to follow your rules is what is going to make you money in the long run. Journaling your trades will allow you to see what is working and if used correctly, can have a HUGE impact on the success of your trading.

 

Closing Thoughts

As I’m sure you see, we talked a lot about consistency in this episode as well as journaling. The two are clearly correlated for those who are able to understand their mistakes and learn from them, and Matt and I think that this can have a huge impact on your trading. Both Matt and I have seen a great change in our trading because of the psychological changes we’ve made and have been able to stick to simply from learning from top-level traders that we have talked to and hope you are all able to as well.

Madaz was a great guest to have on and seeing as he is one of the most consistent traders in the game, we feel as though there is a lot to learn from in this episode. We had a pleasure talking to him and hope that you all could learn a lot too!

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