One of the key features for me was that I wanted traders / investors with experience who have been through the mill over the years and of course those who were kind enough to broach this subject publicly. This I hope gives developing traders / investors more to learn from.
I’m very fortunate to have a great line up and this week is:
Trader: Derald Muniz
1) How long have you been investing?
I have been actively trading my personal accounts for over 15 years with an increase in my time spent in the public markets since 2009. I make my living as an investor and so one thing I look for are meaningful cycle bottoms amongst a variety of asset classes. 2009 looked like a good opportunity to increase the focus in U.S. stocks so I diverted more of my investing time there. Over the past year I have moved into a more professional capacity with my involvement in Presidium Capital where my partners and I provide Managed Account services.
2) What style of trading / investing do you practice (technically driven, fundamental, systematic, a combination etc)?
I would view my style as Hybrid. I incorporate fundamental analysis with technical chart review. I utilize Options in my trading so this expands the trade design greatly and allows for a LOT of flexibility in optimizing
trade returns. I trade across all time-frames but the largest percentage of trade efforts are with Swing to longer term trades. A large part of my short-term trading centers around specific trades for Earnings reports (a known catalyst, expected larger short-term moves).
I would also add that I trade several “baskets” of stocks where the trade setup is very specific. These are:
- 50/50 Basket (stocks that have very outsized UP moves, they trigger when they are 50% above the 50 SMA)
- The Fab 5 basket involves stocks that trigger at a break above the $90 level with the thesis being they make a run at the $100 level
- The Submarine Basket are stocks in a pullback to a solid Support level (the reason for the pullback can be a wide variety of reasons, I try to keep this basket under 10 stocks at any one time).
3) How do you feel when an investment goes against you?
I am sure that I feel as most do but as long as I follow my trading process I consider this a normal part of trading. Not every trade can work as you expect but you are in control of the trade management process so there are still things that can be/need to done on every trade.
4) How do you feel when an investment goes for you?
Actually, I think I answer this the same as the last question.
5) How have these feelings changed over your trading career? (Can you recall how you originally used to feel and elaborate on how this has changed over time?)
I am not sure I can answer this with any real specifics but I am sure that I was more emotional in my trading early on versus how my mindset is now.
With that said, if I were to discuss the evolution of my mindset
change - and where I could see a shift - it would have to be after I began to actually study the Stock Market in more depth (reading books, meeting with trading groups, discussions with colleagues that were involved in the stock market at some level, etc). When I started out I didn’t have a lot of investing capital - like most young people - so I wanted to be sure to treat it with care.
6) Do you have any practices that you do away from the trading screen to help you mentally and emotionally handle trading?
I do have other investing interests (private equity, real estate as examples) that take up some of my time and focus. I keep a regular weeky workout schedule at a gym so I am away from my trading/investing routines to refresh and stay healthy.
7) Have you always done this?
Yes, this has always been important to me
8) If not, how have you learnt to deal with the feelings that come up when trading?
9) Can you describe a time in your trading life which really rammed home the point that so much of trading comes down to psychological factors?
1999 comes to mind. I owned $YHOO stock at the time and it was trading over $300 a share (pre-split). EVERYONE was bullish and that seemed crazy to me. Shear craziness. I can’t tell you how many times I heard “but it will keep going up, I’m sure of it”. Everyone was on one side of the boat. That never turns out well.
I wouldn’t say that my Risk Management was “strict” at this point but I did use price levels where I would exit if it got anywhere near them. Yahoo was so volatile so I got a lot of practice lol.
10) If you could give aspiring traders / investors one piece of advice about emotionally handling the market what would it be?
Find/seek out other traders, a trader community that you can be a part of / learn from / contribute to. A mentor would be ideal.
Why is this important?
From my perspective it can be easy to get into a pattern of doing things
and when they stop working it will not be easy to beginner traders to make adjustments. Being a part of a community allows for an environment to seek out discussion / advice / comments on what can be done in general and specifically in many cases. A mentor is an additional bonus in that you get 1 on 1 conversation.
I’d like to thank Derald Muniz for sharing about the way he tackles the market from an emotional / mental side of things and for his willingness to allow me to post this as a free resource in the hope that traders who have been in the market for less time or are thinking of entering can perhaps pick up some A-HA’s.
If you are interested in finding more out about Derald Muniz you can find him:
Previously in the series:
Charles Kirk - read it…..here
Matt Davio - read it…..here
David Blair - read it….here
Mike Bellafiore - read it….here
Mark Holstead - read it ….here
Brian Shannon - read it…. here
Mike Dever - read it…. here
Anthony Crudele - read it… here
Derek Hernquist - read it … here
Ivan Hoff - read it… here
Brian Lund - read it… here
Greg Harmon - read it… here
Michael Bigger - read it… here
Jon Boorman - read it…. here
Darrin Donnelly - read it….. here
Stephen Burns - read it…. here
Tony Rohrs - read it…. here
Bruce Bower - read it…. here
Richard Weissman - read it… here
Larry Tentarelli - read it… here
Chris Ebert - read it… here
David Merkel - read it… here
Ian Cassell - read it…. here
Disclaimer: Embrace The Trend / Richard Chignell does not provide investment, financial or product advice. If you are going to trade / invest it’s at your own risk and you must take responsibility for your actions.