GIGO on Mall Cop Jan 4, 2021 video
This transcript captures a live trading session on the first trading day of the new year (January 2021). The speaker, a seasoned momentum trader, navigates a mixed market environment characterized by a rotation into commodities (oil and gold) and crypto-related stocks, while many high-growth software and "IPO" names show signs of weakness.
The following summary breaks down the session's key themes, trades, and psychological insights.
1. Market Overview & Performance
The session is marked by "mixed" signals. While the broader market is open and active, there is a clear divergence between different asset classes: * Strengths: Crypto-related equities (CAN, BTC related), Metals/Gold (GDX, NUGET), and Energy/Oil (XOP, MRO). Large caps like Tesla (TSLA) and NIO remain strong, along with Semiconductors (SOXL, AMD, NVDA). * Weaknesses: Growth and software names are "crapping themselves," with notable pullbacks in Roku, Crowdstrike (CRWD), TTD, and Fubo. * Sentiment: The speaker expresses caution, noting that while some laggard crypto names are being "chased," many growth gaps are fading early in the day.
2. Key Trades & Positions
The speaker spent the morning managing current holdings and reacting to numerous automated alerts:
| Ticker | Action / Status | Reasoning | | :--- | :--- | :--- | | CAN | Long / Holding | Strong momentum in the crypto space. | | TNA | Raising Stop | Raising stop to break even; managing risk on small-cap exposure. | | XOP | Stopped Out | Took a $50,000 loss as the oil/gas sector faded after an early breakout attempt. | | ROKU | Short | Watching for a breakdown below the 20-day moving average. | | BTBT | Avoiding | Identified as "parabolic," but the speaker avoids shorting too early to prevent being squeezed. | | AMD/NVDA | Watching | Noted as "good setups" but criticized for being "slow laggards" with low ADR (Average Daily Range). |
3. Trading Philosophy & Strategy
A significant portion of the session is dedicated to mentoring the 500+ viewers on the "Language of Setups":
- The "Five-Star Flag": The speaker emphasizes learning specific technical setups (like flags) that work across all asset classes, including crypto and stocks.
- ADR Filters: A recurring theme is the refusal to trade "slow" stocks. The speaker argues that no matter how good a setup is, if the stock doesn't move fast enough (low ADR), it isn't worth the capital.
- Momentum vs. Investing: The speaker clarifies that while they trade momentum (buying high and selling higher), this is a poor strategy for long-term investing. They warn against "chasing performance" in funds like ARK (Cathie Wood) after they have already seen massive multi-year runs.
4. Psychological Insights & Discipline
The speaker is remarkably candid about their own shortcomings and the nature of the market: * The "Inadequate" Trader: Despite a year of massive returns (mentioning they could have made over 1,000% if they had avoided a few mistakes), the speaker still feels "inadequate." This highlights the constant battle with patience and discipline. * Market Indifference: "The market doesn't give a [expletive] that there's a new number on the calendar." The speaker warns that the new year doesn't change the rules; reckless trading will always result in losses. * Avoiding the "Sausage Party": In a moment of levity, the speaker notes the lack of female representation in the trading chat, joking about the "world record" for a male-dominated audience.
5. Summary of Advice for New Traders
- Don't Be Late: The speaker blames themselves for being "late to the desk" and unprepared for the market open.
- Stop the Spam: The speaker threatens to mute users who post tickers without context, emphasizing the need for high-quality discussion over "spamming."
- Education First: New viewers are directed to watch specific YouTube tutorials on setups rather than asking repetitive questions.
Conclusion: The session concludes as a lesson in defensive management. The speaker transitions from aggressive early trades to a "wait and see" approach, emphasizing that the key to longevity in trading is sticking to a proven system and respecting risk, even when the market feels "hot."