Discover more from AlphaPicks on Wall Street
An Interview With WhaleStream
From his first investment in Apple at a young age to trading options and building a profitable day-trading system.
To begin, could you give us a bit of background on how you first got into trading/investing?
I was always fascinated with investments. When I was younger, I was very into computers and technology. I was fortunate that my parents had set aside some money for me. When I was around 12/13 years old, I heard that Steve Jobs was going back to apple. I had my mom put that money into apple for me and I’ve been watching the market ever since.
After that, I was always buying commons in companies I believed would continue to grow over time. Eventually, I started trading options. I had never done short-term trading before and I definitely paid my fair share of market tuition at first. Eventually, I got my groove and it has been a wonderful ride since.
What made you start following options flow that led to a very successful period?
I came across one of the original flow services and showed it to a few of my friends that I was trying to help teach options. The existing products were all lacking, but it was all that existed.
One of those friends is now my partner at WhaleStream. He actually started building the prototype and showed it to me and asked me if I wanted to do this with him… and WhaleStream was born.
How has your current trading style changed?
I think I trade very differently than a lot of people. My style changes based on market conditions. An important rule I set for myself is if I have two red days in a row, I will actually take a few days off to watch the market and see what may have changed. Then, I adjust and pivot.
Currently, I watch ATR (Average True Range) levels, EMAs, VWAP and Flow. I watch the 1-minute and 5-minute charts and only trade SPX while trading off of the SPY chart. I stare at the 1-minute chart and watch the candle action and watch the buyers and sellers battle it out. This is not something I recommend new traders do. 1-minute charts can give you extreme anxiety. I use this to visually see momentum slowing which can lead to a reversal. I look to flow for confirmation. I like to see a lot of sold puts/bought calls coming in around the time I am looking for calls and vice-versa if I am looking for puts.
Basically, I form my idea and then look to flow to check that the whales are on my side. There is a lot to my style, but these are some of the big factors.
Are there any psychological aspects you had to change to progress your trading?
I think doing small account challenges is a huge thing that helps with psychology. I’ve done multiple small account challenges for various reasons.
1 - To re-enforce my rules. When you trade with a smaller account, you HAVE to follow strict rules, or you risk blowing up your account.
2 - Less skin in the game. A lot of the emotion can be removed when your cost basis is only a small amount. You’re not trading scared.
3 - I like to use the baseball metaphor a lot… People like to swing for home runs all the time and yeah… you may hit some, but the issue with always swinging for home runs is that you will often strike out. If you start swinging for base hits, you will get on base a lot more. Compounding those base hits will eventually get your bases loaded and you may accidentally wind up hitting a home run.
When you are compounding, it feels slow at the beginning. The key is patience. Wait for the right trades and take profit. Forget what you see people posting online. I think keeping a consistent % of your account as your position size is the best way to grow an account and compound. If you use 10% of your account and aim for 30% gains per trade, your next trade is slightly larger due to the increase in account size. You still use 10%, but you are using 10% of the now increased account size.
Do you enforce any habits to improve your trading?
I have a whole list of rules that I posted on my Twitter a few days ago, linked below.
What do you think is the biggest mistake a new trader makes in the stock market?
Everybody sees people post their gains and thinks it can happen overnight. There is no get-rich-quick hack. You need to put in the time and learn. A lot of people will post major gains, but lack simple risk management and they’ve lost it all on the next trade.
Trading is a marathon. Don’t rush it, or you will lose.
Do you have a goal for your trading?
I trade to fund my long-term investments. I trade options. I invest in shares. My goal is just to continue to grow and retire very early.
If you could give one piece of advice to those reading this, what would it be?
Be patient. Take time to learn. Listen to us on Spaces every market day FOR FREE. Don’t pay attention to what other people are earning. Focus on compounding base hits. If you ever find yourself wanting to “YOLO” or “Full Port” or break any of your rules that you have set up… WALK AWAY. You don’t need to trade every day. Also… Sign up for whalestream.com because it is the best option flow platform out there ;)
AlphaPicks on Wall Street is a reader-supported publication. To receive new posts and support our work, consider becoming a free or paid subscriber.
We highly recommend following WhaleStream on Twitter and checking out the website linked above.