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The Tidal Financial Group (Tidal) expanded rapidly over the last decade and encompassed multiple ETF related brands including Toroso Investments, Tidal ETF Services, and the ETF Think Tank. Going forward all activity will be unified under the Tidal brand as we become one company, dream, family, and platform focused on holistic ETF customer solutions.

Get Think Tanked Distilled with Peter Reznicek

The financial markets over the past year have attracted a lot of new traders and speculators, some of them looking to turn their day trading hobby into riches. Peter Reznicek, the head trader at ShadowTrader.net, which provides advisory services to traders since 2006, has been at the short-term trading game for years and joins the ETF Think Tank to give his views on how traders can be more successful in the current marketplace.

Reznicek got into actively trading stocks around 1999. He began by shorting during the heights of the tech bubble and ended up paying the price. He realized that he needed to become more educated and spent a lot of time watching charts. He soon realized that there was an information lag between what is happening fundamentally and what is happening technically. He began filling up journals with his trading notes and observations and credits this activity with making himself a better trader.

While there has been a great deal of change in the trading environment over time as information moves much faster than ever before, Reznicek says that technical analysis has not really changed. It’s all about trying to understand what people are thinking in real-time by focusing on momentum and trendlines. He does not really deal with fundamental research or macro analysis because of the information lag and its openness to interpretation. Trading data is much more objective.

What’s Reznicek’s secret to becoming a successful trader? He says get educated, develop a trading plan, anticipate outcomes and react accordingly. “Peter’s Premarket Perspective”, his daily morning market report, is designed to help people plan their trading day and organize their thoughts before the market opens. Traders are “75% of the way there to making money” if they develop and stick to their plan. People should think about 1-3 different scenarios when they make a trade, develop a plan of attack for these scenarios and follow through on the setup.

He says that traders should always think about what their mindset is going to be if the markets move against them. It is enticing to think about positive outcomes, but traders should be prepared for negative outcomes and look for ways to limit downside risk. For people who trade VIX futures contracts or leveraged ETFs, those products “could tear your head off if you’re on the wrong side of it.”

How does Reznicek assess what he is seeing on Robinhood? He comes back to the idea of having a trading plan or system, which he doesn’t believe many people on Robinhood do. Trading without a plan is a problem because it promotes wrong thinking. Following someone else’s price target makes no sense because you do not know what that other person’s trading plan is, if they’re even using one at all, and shouldn’t be a reason to be bullish on a stock. Some of the trades he’s seen may be successful, but they seem more lucky than educated.

In terms of what he likes, Reznicek is a fan of pairs trades, retracement signals and signals that a large swath of people are wrong and obviously wrong. In the latter scenario, that means a lot of people will need to reverse positions and probably do so quickly. The shorts who are in trouble are not waiting for anything to get out, whereas longs might wait for a better price.

Reznicek highlighted one principle that he says is worth remembering. “It’s not about me beating the market, it’s about me beating myself.” Risk is OK as long as it’s part of your trading plan and you execute appropriately on it. “Don’t buy anything that’s going to affect your sleep. Sell it down to your sleeping point.”

This week we have Stephen Ehrlich, CEO and Co-Founder of Voyager. We’ll be discussing AltCoin vs. Bitcoin. Come join us! As always, bring your questions.

Disclosure

The information provided here is for financial professionals only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

All investments involve risk, including possible loss of principal.

The value of investments and the income from them can go down as well as up and investors may not get back the amounts originally invested, and can be affected by changes in interest rates, in exchange rates, general market conditions, political, social and economic developments and other variable factors. Investment involves risks including but not limited to, possible delays in payments and loss of income or capital. Neither Toroso nor any of its affiliates guarantees any rate of return or the return of capital invested. This commentary material is available for informational purposes only and nothing herein constitutes an offer to sell or a solicitation of an offer to buy any security and nothing herein should be construed as such. All investment strategies and investments involve risk of loss, including the possible loss of all amounts invested, and nothing herein should be construed as a guarantee of any specific outcome or profit.  While we have gathered the information presented herein from sources that we believe to be reliable, we cannot guarantee the accuracy or completeness of the information presented and the information presented should not be relied upon as such. Any opinions expressed herein are our opinions and are current only as of the date of distribution, and are subject to change without notice. We disclaim any obligation to provide revised opinions in the event of changed circumstances.

The information in this material is confidential and proprietary and may not be used other than by the intended user. Neither Toroso or its affiliates or any of their officers or employees of Toroso accepts any liability whatsoever for any loss arising from any use of this material or its contents. This material may not be reproduced, distributed or published without prior written permission from Toroso. Distribution of this material may be restricted in certain jurisdictions. Any persons coming into possession of this material should seek advice for details of and observe such restrictions (if any).

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