Nico (@InefficientMrkt on Twitter) is a day trader with a thirst for momentum. He predominately trades low-priced stocks that have a tendency to move fast and far—and roughly 90% of his positions are on the short side.

But the main reason why I brought Nico onto the podcast, is I feel as though he has a story which many traders will be able to relate to, on one level or another…

The short of it is; Nico placed his first trade in 2007, made 4x on his starting capital year one, and then slowly bled his trading account for the next seven years. He’s now found his groove, but his overnight success was eight years in the making.

This episode is very much centered around Nico’s journey and development as a trader, and how full-time trading became more than a pipe dream.

Lessons learned in this interview:

• Nico speaks about when he initially started a software development business and won a trader as his first client—which is where he got a taste for capital markets.
• Why making $20k in trading profits, during his first year, was the worst thing that could’ve happened to Nico, as he soon turned into a “junkie at the slot machine.”
• How Nico was able to sustain seven years of losses, consecutively. He also describes the brief spurts of profitability which motivated him to continue trading.
• Snapping point; Nico discusses when he had the realization that something had to change, and with hindsight, shares how he could’ve become profitable sooner.
• Nico describes his way of doing things as a momentum trader, predominately on the short side, of low-priced junk stocks—highlighting the dangers and risk too.
• Why openly sharing his PnL and getting involved with a community of traders has been a huge factor in helping Nico becoming profitable, and overall, less reckless.

“Is this a substandard trade I should be skipping? Is this really a trade that I want to affect my PnL curve?”

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Links and resources mentioned:

• EP 082: Futures Trader 71 – Episode was mentioned when discussing alternative ways to measure your progress besides tracking PnL—FT71 has great suggestions.
• Nico’s spreadsheet – Nico mentioned he was going to make the spreadsheet he uses to track his trading performance available, follow the link to download.
• @InefficientMrkt – Follow Nico on Twitter, and tweet him about this episode!

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