Rayner (01:16)

All right, Brian, welcome to the show. Completely satisfied to have you ever.

Brian Lee (01:21)

Hey, thanks for having me.

Rayner (01:22)

By the way in which, I’ve listened to just a few of your podcasts and I feel that if you happen to usually are not in trading, you might well just be a DJ. I hear that voice, man, that is a soothing voice you bought.

So, something to think about, right?

If you should stop trading someday, a DJ is likely to be an option.

Brian Lee (01:38)

Yeah, I considered doing audiobooks or something like that. Possibly.

Rayner (01:49)

Yeah, I might say you’ve gotten a present for that, right?

So yeah, to kick things off, I’m just curious.

In a single sentence, how would you describe your childhood?

Brian Lee (01:54)

My childhood. Very competitive.

I had a cousin that was a few 12 months apart and he was type of like my brother from one other mother.

I even have a younger brother now, but he’s 10 years younger. I grew up with a younger sister.

I feel I killed this one, but like very competitive.

We’d all the time play video games, Smash Bros, and halo, and check out to get the very best of one another.

Rayner (02:21)

I understand you already know where you are from; you played Esports, and we’ll get to that later, but I just type of like want to know.

What type of person you were like back in class, so that you were type of like competitive gaming.

What’s possibly the primary game you played, right? I suppose that needs to be, you already know, something you remember?

Brian Lee (02:39)

I feel it needed to be considered one of those Mega Man or something on Super Nintendo.

Rayner (02:46)

Mega Man, Super Nintendo. All right, yeah, that is type of my time.

I played Super Nintendo.

That was my first cartridge back then. It cost like 70-80 bucks.

My dad used to spend money on that.

So, in class then, what type of kid were you want in class?

Were you a studious type?

Is the one stepping into trouble or what?

Brian Lee (03:04)

I feel people thought I used to be smart, but I all the time thought it was simply because I put in rather a lot more effort.

Like I felt silly.

So, I just put in a little bit more effort than other people, so people thought I used to be smart. That is the way it was.

Rayner (03:21)

Do you get pretty good grades consistently through?

Brian Lee (03:25)

I almost flunked out of highschool and I didn’t graduate from university.

I dropped out of university as well.

But after I was applying myself, I used to be a straight “A” student.

I just desired to do other things.

Like I didn’t see the worth in class very much.

Rayner (03:39)

Why do you say that?

Brian Lee (03:41)

I just feel you possibly can’t apply plenty of it.

You understand, there isn’t any direction.

I feel like in the event that they taught us things like taxes and like stock market and learn how to transition into maturity, like practical skills.

I felt like all the pieces was just leaning towards like…

You are either going right into a science major or doing something more like engineering.

But, like literally after I went to school, I used to be like…

“I’m just going to do creative writing because, I like writing,”

I spotted how useless it was, so I used to be like…

“There is not any way that I will undergo school and are available out of this like with a profession”

Rayner (04:17)

So, once you resolve to drop out of college, despite people pondering that…

“Hey, Brian is pretty smart”

What was your parents’ tackle it?

Brian Lee (04:30)

My parents are pretty relaxed.

My dad’s smart.

He went to considered one of the highest universities and he’s a physician.

My mom is from Cambodia.

She has a really impoverished background. She’s a refugee from the genocide.

Rayner (04:49)

Sorry to interrupt you. I used to be…

Please proceed and I’ll just take it from there in a while.

Brian Lee (04:55)

So mainly, she just really pushed me very hard to do the standard thing, just be a physician or whatever.

But my dad never really put pressure on me.

So, I got away with rather a lot.

Like I just about ditched half of highschool and just played video games on a regular basis.

Rayner (05:12)

Possibly simply to dig a little bit further back in time about your parents since you mentioned the genocide, and I used to be in Phnom Penh.

I feel a few years back and I went to the killing grounds.

I feel it was within the Nineteen Sixties or Nineteen Seventies.

This group, I won’t call it a corporation, but you already know, people on top of things, right? They killed a few quarter of the population.

I mean, the numbers could possibly be higher, probably higher right, but I feel where I read was like 1 / 4 of the population due to that event.

Was it like during that event, that is when your mom decided to maneuver away to the States?

Brian Lee (05:50)

Yeah, they considered my grandfather an informed person because he was a professor and so they were going to kill anyone who was educated.

So, my entire family was mainly on the chopping block.

Luckily, considered one of the military officials had a crush on considered one of my aunties and helped them escape.

They’d to cross over to Vietnam through snakes and land mines.

She did lose some siblings on that journey and so they got sponsored by a Christian family here within the States.

Eventually, one after the other just began flying over here.

Rayner (06:36)

Gosh, that is a crazy story, man.

That is wow.

I mean, I am unable to imagine what your loved ones went through.

Because I used to be actually on the killing grounds and so they were showing us, you already know, type of like an entire level of all of the bones, right?

The skulls that were being penetrated by, I do not know what objects, yeah, it’s crazy.

So, I’m glad all is well, and all is secure for you.

And, you already know, your future generation as well, I feel within the States, is rather a lot safer.

Thanks for sharing. I feel that’s something, a history I feel not many individuals know.

If I didn’t realize it until I went to Nong Penn for a vacation, I didn’t know that.

Man, they’ve such a history, which is sort of recent, like just 20-30 years, a bit further back.

I hear rather a lot about, you already know, gaming, and no surprise right away on other podcasts, you mentioned e-sports competitive gaming.

Let’s discuss how that happened.

How do you transition from just an informal gamer to…

“God, let’s do that right, let’s go to the international, you already know”

Then you already know, go big, right?

How did that occur?

Brian Lee (07:39)

I was a reasonably popular kid in class.

I didn’t play many games and mostly frolicked with people.

But considered one of my neighbors who lived down the road was really into StarCraft.

So naturally we just began hanging out and I used to be like…

“What is that this game?”

And I began prefer it was with dial-up web and I used to be like…

“You’ll be able to play versus other people,”

That is amazing because before you are just playing games by yourself and you are like…

“Okay, well”

Once you begin seeing all these different people online and like all those different personalities and stuff like that.

It’s identical to it is so engaging.

Then other people began playing it and eventually in some unspecified time in the future I used to be just so competitive.

I used to be like…

“I just got way higher than them”

And I used to be like… I want to seek out recent friends.

Otherwise, these games are only too easy.

At that time, I just began in search of competitive teams and stuff like that and just doing it as a hobby.

But I just really loved it.

Because you already know, as a teen, especially as an Asian kid, not very athletic and things like that.

So with the ability to do something competitive was super fun, especially in a team environment.

I used to be like all the time attempting to compete in tournaments and stuff like that with my friends.

Rayner (08:48)

So, you begin with StarCraft, and if I recall; you find yourself playing competitive Dota 2, right?

If I’m not flawed?

Brian Lee (08:56)

Mm-hmm.

Certainly one of my older cousins recognized I used to be playing plenty of StarCraft and he showed me this documentary.

I feel it was of the Moon.

Moon was a WarCraft 3 player, and he’s very famous because he’s unconventional.

But he was considered one of the best of all-time Korean players.

They were doing a documentary about showing how he made a living playing video games, which was not a thing.

Since it’s like, look, you possibly can earn a living playing games or something like that. I used to be like…

“Oh, that is outstanding”

So then in the back of my mind, I used to be just interested by like…

“Well, why cannot I try this too?”

Rayner (09:34)

So, you mentioned that you simply’re getting way too good in your peers and also you had to seek out recent so-called teammates or people to mess around with.

So how do you discover them?

Was it based online or were you within the land shop, you already know, type of like, you already know, socializing with other players?

Brian Lee (09:48)

It’s just online, you already know, you simply, you naturally just make friends since you like if you happen to’re good, you already know, people just need to talk with you and like add you.

Rayner (09:56)

The most effective reality is you’ve gotten money; people will just come to you…

“Hey, let’s be friends”

Same for gaming. Okay. So, yeah.

Brian Lee (10:05)

It is not unlike trading where, you already know, if you happen to, um…

Well, trading is a little bit tougher to inform who’s real and stuff like that.

But, you simply shoot your shot.

You understand, if you happen to put yourself on the market a little bit and show like…

“Hey, I even have this type of skill, or like, I’m attempting to improve”

You understand, even if you happen to do not have the actual skill, if you happen to show effort, people type of want to connect with that, cause in the event that they have the identical type of ambition, you simply type of attract one another.

And so, you already know, it is not very unlike trading as well. You actively attract people who you are in search of and check out to not be so isolated, avoiding doing all the pieces on your personal.

Rayner (10:42)

So, once you got into skilled gaming, what made you think that that you might do that as a profession?

You mentioned you simply watched a documentary after which what gives you the conviction, the arrogance to do it?

“Hey, I can do that too.”

Brian Lee (11:03)

To be honest, I did it as a passion.

It was more fun than anything.

I just consistently felt like I used to be convalescing and higher.

Sooner or later, it just type of felt like a little bit too easy.

So, I desired to see if I could do that, in a tournament style.

I’m wondering how far I might go within the tournament, considering we only played it for pizza every month.

They held it on a forum and, like every week, my goal was simply to get to the subsequent round.

Like if you happen to’re in round 32, get to the 16, get to the quarterfinal, etc.

Eventually, we won it.

After we won it, I began recognizing that we had just beat everybody in North America, like the very best player.

So, once you conquer your region, naturally, you should take into consideration like international stage as well.

Rayner (11:58)

So, on the forum where you guys got here in first, I suppose it’s a fairly large forum, right?

To be top of the forum after which conquer the entire of North America?

Brian Lee (12:06)

Yeah, it is a small area of interest.

Like, I do know you are not like necessarily a part of the small-cap community, but type of everybody knows everybody.

Anyone who’s like very serious or simply type of on the market, you are only like a few degrees apart.

Such as you’re normally only one person away from the subsequent person.

So, it’s type of just like the same thing was in gaming.

It is a small community. Everybody knows one another.

There’s only one place we met.

Because there was no Twitter or stuff like that.

So, we just use forums and chat rooms, stuff like that.

Rayner (12:41)

From my understanding, Dota is its 5 players.

 So where do you discover the remaining 4 players to form that team?

Brian Lee (12:48)

Well, I made a post saying that…

“Hey, I would like to compete and I’m in search of this type of teammate”

So, you simply list out the roles you would like.

And I used to be like…

“Okay, I will be the leader”

I play this support role and I’m in search of a carry.

I’m in search of other support players and stuff like that.

Then eventually you simply type of try people out and see if you happen to mesh and if you’ve gotten the identical goals.

Then eventually… you simply type of commit to it.

I met everyone at different points in my profession.

There have been different teams, but like the most important team that pushed me into the international stage.

It was a team that like…

“We did this process after which I made them sign a contract that they were just going to wish to go hard for a whole 12 months”

Then we just about did it greater than full-time, like all of us.

Rayner (13:39)

So, it’s like an interview process where you are interviewing the proper candidate.

It’s going for a trial and deciding, is that this fit or not?

If it’s fit, you already know, sign that contract, and let’s go all in.

Brian Lee (13:51)

Yeah, exactly.

It was not as official as nowadays.

Today there are such a lot of incentives.

I mean, if you’ve gotten a sponsor, you possibly can be like…

“Hey, we’ll pay you a salary and stuff like that”

Do you should join us?

We’re very reputable, whatever…

Back then, you needed to persuade people to play without spending a dime each day for 16 hours.

Prefer it’s a distinct skill back then.

Rayner (14:12)

That is a passion at its highest level, like playing without spending a dime…

I’m curious, do you’ve gotten to love…

While you say play without spending a dime?

I’m guessing that they must be at home playing, right?

Not stay at a land shop paying like, you already know, one dollar, two dollars an hour and stuff like that.

Or they’re playing from home remotely, 16 hours a day.

Brian Lee (14:31)

Yes, and everybody’s scattered everywhere in the United States and Canada.

So, we’ve time zone issues and we also competed on the European servers because they were just way higher than Americans.

So, we were up at 4 or five o’clock within the morning and you already know, motivating young people to get up sooner than they get up for college may be very difficult.

Rayner (14:53)

The motivation must be right.

You guys have the inducement at the highest of your head.

Let’s do that.

OK.

So, when do you first meet your teammates in real person?

Brian Lee (15:09)

Oh yeah, the primary time we met was after we qualified for the international.

That is the largest tournament.

All of us got picked up by Val.

They’d someone to choose us up in a limo or whatever on the airport and we stayed at our manager’s house. We slept on his floor.

He had like a one-bedroom apartment.

We had like six guys sleeping on the ground and we contacted an area land shop and said…

“Hey, we’ll like, offer you some exposure if you happen to allow us to practice here for like two weeks, three weeks.”

We got to know one another there, but I felt like on the web, I feel you; you get to know people pretty much.

Like, I do not feel like there was any shock about like who they were.

Anything like that.

We spent a lot time together. Being in person doesn’t make an enormous difference, to be honest.

Rayner (16:04)

They were quite near how they were online In an India physically.

Brian Lee (16:12)

Yeah, you possibly can’t fake that.

I mean, once you spend a lot time together, you possibly can’t fake it.

Unless you are crazy, I do not know. Some people try this.

Rayner (16:21)

So, I feel I read on.

I mean, I heard on podcasts that your goal was just to hitch the international.

So, I do not, from me back in Singapore, I might think the largest competition is named World Cyber Gaming, WCG.

Is that an unusual thing altogether at your end?

Brian Lee (16:35)

I feel that organization is attempting to be Olympics, which is pretty fun.

Like I’ve competed in that term before attempting to represent the USA.

But normally, that is pretty fragmented.

Because like I said, plenty of these teams were type of like spread throughout some Canada.

Once I competed, like we needed to form a USA team after which my Canadian teammates needed to form a team in Canada.

But all I knew was that they had plenty of money, which is why I don’t need to play.

They’d plenty of money.

Rayner (17:05)

I see.

So, the international is type of like an excellent larger competition to evaluate the talents of individuals all all over the world.

Brian Lee (17:13)

The International is like the head of Esports.

I mean, like even amongst all of the games today, I do not think any single E-sport has the prize pool of the International.

It’s the highest 16s in the whole world.

So, I feel it holds probably the most prestige in the whole E-sports scene.

Rayner (17:38)

I see, yeah.

So, I understand your goal was to only join the international.

If I’m not flawed, just participate in it, right?

I feel that was the goal.

It is not even to win, right?

If I hear appropriately from the opposite podcasts that you simply go on.

So, I’m curious, what in case your goal was as a substitute of just to participate, nevertheless it’s actually, as an example to win and even to be in the highest three?

Do you think that that things will probably be different?

Brian Lee (18:00)

I did need to win.

I mean, everyone desires to win.

I did.

My goal was to get there, but type of much like trading.

It’s like, most you possibly can do is perform your best.

So, the result it’s an element of luck and timing and stuff like that.

On the time, I felt like I used to be probably top two on the earth at my role.

So, I did trust in myself.

Nonetheless, like after I formed that team, we were all amateurs.

Like I didn’t pull any former skilled players or high-tier players.

We experienced a major reduction in our skill ceiling in comparison with the international scene.

The foremost advantage we had was our high discipline, which was comparable to drilling and practice, and our refined strategies.

In plenty of cases, we won on strategy alone or simply teamwork.

But when it got here all the way down to individual skill, I knew that we didn’t necessarily have what it took to win in comparison with the remaining of the sphere.

My ambition was mainly to see how good I could do with all those in mind.

But, you already know, as a person, I felt like I used to be ok.

Rayner (19:24)

Earlier, you mentioned that you simply thought that you simply were just like the top two on the earth for the role that you simply’re playing.

So how do you define where your positioning is?

Is like since it’s a 5v5 game.

How do you wish to assess your skill on a person level?

Brian Lee (19:39)

Each player on the team receives a particular role, one through five.

So, like one is a very powerful person.

They’re the one who get all of the resources and so they’re those who’re purported to type of carry the sport to the tip.

They’re just like the damage dealers.

Then, like my role was number five.

So, within the ranks of priority, I used to be number 4.

Number 4 is just like the second support character.

Essentially, they’re those who make the shot calls.

They initiate fights and so they are frequently the primary to go in.

So, on my end, like I’m comparing myself to other players in that position.

It’s pretty easy to inform who’s playing what.

Because on the time I had a really diverse pool of like characters, I could play strategies.

I felt like my skill level was very high.

I type of knew, I used to be very confident.

Rayner (20:40)

So, at a competitive level, you mentioned that there are individual skills after which there are like strategies.

From what I’m hearing, I mean, in the best scenario, each player within the team may be very highly expert and, as an entire, their strategy is pretty top-notch as well.

But as an example a team like yours, where the skill will not be so high, however the strategy is pretty top-notch.

It may well get you to pretty far places.

Am I right to say that?

Brian Lee (21:04)

Yeah, it’s actually, I lost faith in that after some time.

But after I look back, I do think strategy and teamwork discipline were a very powerful thing.

Because like what plenty of really good players do is they only type of go in with no plan and so they just depend on their skills and their instincts and that works because plenty of times they will just outplay people.

But like once you play against a team that knows what they’re doing, they know the way you are going to counter them; they know learn how to react.

It’s just on a totally different level.

As I relate that to trading, it’s type of like, I all the time try to enter trades now with like a technique that I will follow that I already pre-planned versus attempting to react.

I feel that is one thing that we did well because after we had good strategies; we had like a 98%-win rate over like 50 games.

That is what individuals who know what you are doing and so they’re attempting to counter you on a regular basis.

The thing is, we just knew learn how to play, but we did so well that when they fight to counter us, like they’re playing our game, we’re playing our game.

We had the advantage, you already know, it’s like completely different when any individual is available in with their strategy and you’re feeling you are on the back foot because they only know learn how to do it higher than you.

But once you make it in order that other persons are always reacting to what you are doing, you possibly can take control of so many variables.

I feel it’s a extremely essential concept to only have a technique that is well thought out.

Rayner (22:42)

Am I right to say that identical to trading, in gaming, there isn’t any like best trading?

I mean the very best gaming strategy, because something else can counter every strategy?

It’s as much as the team to type of like react or adapt accordingly when someone uses a technique that’s purported to counter you.

Brian Lee (22:58)

Yeah, I feel the sensation that you want to win all the pieces is just type of ridiculous, but that is the sensation that the majority people have, like people expect all the time to win once you found out, they feel like…

“Oh, I’m just going to crush the competition 100%”

But, um, in point of fact, just like the teams that may win championships are those that just, you simply win the very best of threes repeatedly, you win the very best of three; you win the very best of 5.

You do not have to win all three games.

You simply must win two games at the very best of three.

So effectively you’ve gotten like 66%-win rates.

It’s nearly being consistent.

Like if you happen to tried your best, your strategy didn’t pan out.

Next game run one other strategy.

For those who perform well, you already know, hopefully, you are taking the sport after which eventually the series.

Back then, I felt just like the goal was to win 100%, but now I feel you simply must win greater than you lose.

That is all you’ve gotten to do.

Rayner (23:54)

So, you and your team, you guys wish to put in like 16 hours a day.

I’m curious to know what putting within the reps looks like for gaming.

Take, for instance, weightlifting if you happen to’re going for competition: you raise 4-5 sets, 10-20 wraps twice a day, and clock in the amount for lifting weights.

The identical for swimming waking up early within the morning 20-30 laps within the morning.

What’s it like for gaming once you say you guys are putting on the laps?

Brian Lee (24:22)

We get up at 5 a.m. on the West Coast.

I purposely just roll into the sport.

I just roll away from bed and go straight to my computer.

We now have scrim partners already scheduled.

So, we’re normally playing a minimum of two or three games with one other partner.

Each game lasts about an hour.

After that is set, we’ll either do a review or we’d have had one other scrim partner scheduled for an additional two or three games right after that.

In order that’s about like six hours of gaming nonstop.

If I used to be feeling very feisty, I might do the remaining.

So, we would go as much as nine games, nine hours.

Afterward, it was my responsibility to review.

So we would go over the replays, determine what we did right and flawed after we’re done with it, like not having any emotions in regards to the game and we are able to type of look back at it.

So normally that takes one other two hours and we’ve a team discussion.

After the team’s done, I’m pondering of strategies and determining if I can implement them and I’ll sometimes I’ll test them in the sport to see if it’s going to work.

In any case of that, we’ll play public games individually and all and sundry mainly should just be practicing their role and like what they need to do and getting more insights into how they will improve the team.

That is the way it just about goes.

Then, in your off time, you are just interested by it on a regular basis.

Rayner (25:52)

Wow, from what I’m hearing, it’s like gaming is your life, right?

From the moment you wake as much as the time you sleep.

Brian Lee (26:00)

Yeah, nevertheless it’s fun. Prefer it’s, it’s really fun.

It is not hard.

Rayner (26:04)

Is there any aspect to it that you simply didn’t enjoy?

Brian Lee (26:08)

Oh yeah, I hate how immature persons are.

So, it’s a teen’s game.

Lots of the newer talents are like 17, 18 years old, or 20 years old.

Even in the event that they are, as an example, 22 or 23, they’re typically 4 years behind mentally.

So, in the case of conflict and you already know, if you happen to are only attempting to tell the reality, their emotions will flare up.

People will get defensive or they’ll walk away from situations.

You have to have this huge trust in one another.

Like at the tip of the day, I just really disliked how individual people were about their emotions and never interested by the team or having any empathy for mainly a leadership role, which is like…

“I’m not any different from you guys”

Like I’m only one person, but like a lot responsibility, is on the leader to be sure that there’s harmony, trust, and like if any individual’s upset, you’ve gotten to go and refer to them.

Everyone else can go watch anime or something.

It’s just plenty of work for things that I feel could possibly be quite simple.

Like just let’s work it out.

Let’s discuss what we are able to do higher.

All of us want the identical thing.

I’m not attempting to be malicious or they may not be malicious either, but improving and having like a growth mindset and just interested by learn how to win is a very powerful thing, and never everybody was equipped for that mentally.

Rayner (27:42)

I can imagine how much work the leader needs to place in.

Not only do you mention doing the review, you then also must strategize for a team.

You understand, what recent strategies should we implement?

You may have to administer HR as well.

Who’s upset with who and also you got to be like a nanny?

I figured that will be a manager’s role.

So yeah, I used to come back from a gaming background.

That is why I got quite just a few questions on competitive gaming. I’m just curious to know the way.

I’d wish to hear from you what are the several levels of competitive gaming are.

For instance, I feel hobbies like playing for possibly one hour per week, then they’ve those like playing five hours per week.

So what number of levels do you think that there are before they reach the extent that you simply did on the international level?

Brian Lee (28:35)

In each game, like in every sport, in each game.

The highest 300 or 500 players on the earth usually are not good.

You may have to be inside the top 1% of that to be at a professional level.

So, like, you will play ranked games or whatever, and if you happen to team up with people who find themselves like, let’s just say rank 200,300,350.

Each considered one of those players will get trashed by knowledgeable player.

The difference between those players and professionals is just that the professionals are on one other level when it comes to skill, when it comes to communication, and when it comes to strategy.

The one way really to type of pick up those skills is to be a component of a team.

For those who are only good at type of like playing the sport normally but do not know learn how to play inside a team environment and know the way strategies work, you then’ll never be able to playing on a Skilled level and the difference will all the time be there.

Rayner (29:39)

What’s the common lifespan of knowledgeable gamer?

Brian Lee (29:48)

I’d say, I feel people of their thirties are type of where it starts to top off.

But the way in which these teams work is frequently, you’ve gotten a fresh mixture of older veteran talent.

So, people of their late twenties, thirties, after which you’ve gotten a type of like newcomer rookies who’re identical to highly gifted mechanically and haven’t any fear.

Those persons are normally like 17, 18, 19 years old type of players very flashy and it’s type of balance.

Most teams which can be skewed too heavily by some means usually are not really that successful.

It’s always having the wisdom and the experience to share and pass all the way down to temper young individuals, but additionally having younger people herald innovation and just being quicker to react and never having as much baggage.

Because things are all the time changing.

Just like the game is all the time updating and improving and it’s harder for older people to only always pick up recent things over and once again.

Rayner (30:51)

Earlier you mentioned… gifted mechanically.

What does that mean?

Brian Lee (31:00)

I feel just when your younger, you simply have the synapses firing.

You understand, like much quicker.

Like you’re connecting the dots quicker.

You are reacting and adapting quicker.

Like I said…

“You do not have the bags”

Like a veteran player can be like…

“Oh, you already know, like five years ago, that was the popular strategy, and that is how we played it”

But like newer people, they do not take into consideration that.

They only see like what works now and so they’re like, this works and I will do that.

So, they do not bring any preconceived notions into the sport.

I just think overall their ability to place pressure on their bodies is way higher.

Like I do not have as much tolerance, for instance, with how long I can sit on the desk without getting a backache or my hand cramping or something like that.

Young people never must care about that.

You might play like 24 hours a day.

Rayner (31:50)

Earlier, you furthermore mght mentioned that after they are younger, they haven’t any fear.

So, I’m pondering, what is the type of fear that is coming up in gaming?

Brian Lee (32:00)

I feel the fear is just with the ability to jump into unknown situations or do things in a different way.

Like I feel younger players, they’re more progressive within the sense that they see things in a different way simply because again…

There is not any baggage.

Their fearlessness is like…

“They do not see competitors as like out of reach”

They only consider them like people who they’ll dominate.

They’re like…

“I will go in and just going to crush you.”

Older persons are like, you already know…

“This guy’s a legend”

Like…

“You probably did this, you probably did that”

I do know, like I looked as much as that guy.

There’s plenty of things that just psychologically affect you.

Rayner (32:49)

I can relate to that.

It’s such as you see a professional player, someone who’s like a legendary status and also you meet him in a battle that fear sometimes might even cripple you.

You understand type of like hold you back when it comes to a mental capability where you simply get nervous and your clicks might even fumble right especially back there for me was playing counter-strike you already know you see the opponent and you simply type of like freeze.

While you see like you already know someone with a godlike status in front of you.

Brian Lee (33:11)

Yeah.

I talked to young traders on a regular basis.

I’m like…

“You bought to be secure along with your risk management”

They’re like…

“No, screw you. I will like 10% of risk per trade. I will be a millionaire tomorrow”

I’m like…

“Dude, stop!”

They only don’t care.

Like they literally, I feel it’s because they don’t have anything to lose.

I feel that is really what it’s.

Like once you’re older, you are like…

“Oh, I, I am unable to let these people down. I even have to. I’m chargeable for this or whatever”

They’re like…

“They only don’t care”

You understand, they really can just go in completely reckless and just discover by making mistakes.

They do not care about wisdom.

Rayner (33:48)

Probably a rite of passage I feel all of us must undergo.

Okay, so after the international competition, you guys placed well, right?

Top eight and you then type of like decided to…

“I am unable to do that anymore”

That is where you make the transition to trading.

Before the transition to trading, what was the highest process in your head to type of realize…

“Man, this will not be something that I would like to do for the remaining of my life or the subsequent 5 or 10 years”

Brian Lee (34:15)

Lots of it was a type of those emotional issues I discussed where I’ve had players amid tournaments are like a $3 million prize pool.

They shut down completely.

Like literally, we’re in a room together.

Sit on a swivel chair, and flip opposite of the team, identical to facing a wall.

Ask them questions.

They will not say anything in front of your manager, in front of the one that owns the freaking company.

Completely shut down.

Uncooperative.

And I’m like…

“Dude, this will not be possible”

Or people may have a feud with one another and can refuse to refer to one another like coming to meetings or simply being energetic and helping the team.

For just probably the most silly reasons ever.

When that happens, you are identical to…

“Dude, it doesn’t matter how much work I’m putting in”

Since it only takes one person to break the whole team.

I do not care in the event that they’re the very best players or what, literally just attitude can sink the ship.

So, I have been in so many situations like that.

I’ll offer you a extremely good example.

There was this tournament where we were going to qualify for the international and I used to be playing against my former teammates who also qualified for the national the 12 months before.

As a substitute of practicing for that tournament, considered one of my teammates, who’s like a young guy, decided to go to EDC, which is the Electronic Dance Music Festival in Las Vegas.

He’s like…

“No, I’m not going to practice. I’m just going to go do some drugs and like take heed to music for like per week”

I used to be like…

“You’ll be able to’t be serious, right?”

 So, he left us as 4 players to practice without him for this whole time.

When he got here back, he was like…

“What’s up guys, let’s play”

I used to be like, dude…

“Come on”

The difference between us qualifying for the international, I feel it was probably like 8 to 12 million prize pool on the time, was one game.

Like we would have liked to win one game in the ultimate and this guy didn’t practice with us the entire week because he didn’t care.

So, there’re just situations like that where you are like…

“Why is my fate? In these people’s hands, if I could just do that by myself, it could be a lot easier”

That is why trading was so appealing because I used to be like…

“I do not have teammates anymore”

I used to be sick of teammates. I don’t need to have teammates. I would like to only find a way to depend on myself.

Because I do know you could only control what you do.

I mean, you possibly can attempt to influence people, but at the tip of the day, In the event that they’re irrational, what are you able to do about it?

Rayner (37:11)

Have you ever ever thought that perhaps I should play games which can be individual solo like Street Fighter that come to mind?

StarCraft?

Brian Lee (37:23)

Yeah. I really like, I do love team games.

I feel there’s something in regards to the camaraderie and just having this group that becomes like a family.

They arrive back to your brothers and once you win, it is so much sweeter because everyone’s there with you.

That is just the sport I really like.

That is the game I committed my life to.

There was no other game.

Rayner (37:42)

But at the identical time, it comes with the danger where one player could just give a rip about the implications and just solo and do whatever he wants on the expense of the whole team.

Brian Lee (37:51)

Yeah, I’m going to put in writing a book about it someday.

Just has so many stories that you simply would never imagine it.

Like there is a guy.

We would have liked a fifth player, and we paid him a salary and we’re like…

“Hey, come over here”

You are talented.

We are able to win with you.

He joined for someday after signing the contract.

We played three games and he quit the subsequent day right before we had a qualification tournament for the international game.

At that moment, we had to seek out one other player on the last second.

He completely breached his contract.

I do not know if we pursued it, but like, he just decided…

“Oh, never mind. Like I don’t need to do that”

He never competed again. He never played on one other team.

I used to be like…

“What happened to this guy?”

Rayner (38:38)

Yes. I’d wish to hear the story of it.

I feel I read in your blog post that you simply guys upset considered one of the highest contenders within the international, right?

That is why you guys made it to the highest 8.

What was it like upsetting, you already know?

I mean, you guys were the underdogs.

How did the whole thing play out?

Brian Lee (38:54)

It is so much easier being the underdog.

Everyone loves being an underdog because there isn’t any pressure.

This team was just like the second, they played second on the last international.

They’re like a heavy favorite.

Not only that, but China was the primary region on the earth.

Every team from China is anticipated to win this tournament.

The funny thing is like, once you play against the Chinese team, you are not just playing against one team, you are playing against all of China.

The explanation is that, after they scrim after they practice, and after they go to the TI, which is international, they litter one another.

They do not care which team wins.

They only need a Chinese team to win.

Like…

You are playing against like three or 4 Chinese teams which can be the very best on the earth who’re collaborating.

Whereas on the American-EU side, no person desires to refer to one another.

Nobody desires to help one another.

You simply feel like the chances are stacked because you might have been practicing for somebody and so they leak your whole strategy to a different team.

Like we’re playing it in those sorts of odds and mainly like, nobody expects us to win.

We go into the sport and it is very slow, but eventually, we just began picking up this momentum.

Eventually, in some unspecified time in the future, we’re like…

“Wait, we are able to win this game”

Once that triggered in our minds, everyone got so hyper, like we got so hyped, and like, we just began making plays that we never made before.

Just super within the flow and catching them off guard and just creating plenty of chaos and like…

“That was considered one of those games where like each thing you probably did right”

Because everyone seems to be watching you.

Even if you happen to just walk the proper way, the gang is cheering for all the pieces you are doing.

We’re like; it felt like we could do nothing flawed.

Each play that worked, we just kept getting more cheers and more claps and stuff like that.

It’s like, let’s keep doing it and eventually we just won the sport and like…

“Your entire crowd was like on their feet”

Everyone was just super excited.

There is a bunch of recordings online where like my teammate ripped his headphones off before the sport was even over and just began running out on the stage because we were so completely satisfied and we like, everyone was treating like USA! USA!

I used to be so completely satisfied.

But just like the thing that we didn’t realize is you could’t have a good time your win suit early, so like we were so completely satisfied that we didn’t even think in regards to the next game in any respect.

That was a really tight game. We lost that to a different Chinese team, which was also a favourite.

It was like, I learned at that moment, like…

“You simply cannot have a good time your wins too soon”

Like you continue to have a job to do, such as you, you’ve gotten to be like…

“Okay, we won, that is awesome”

But then, like, return to work.

So that might have been a miracle run that we just type of cut short due to our happiness, I suppose.

We never really got that far in anything.

It’s too weird.

Rayner (41:51)

I can imagine the gang.

I feel the Chinese team was there like a silent line or they’re cursing all of the vulgarities of their head as you guys are winning the sport.

Now let’s move on to trading.

We have talked quite a bit about gaming after which yeah, I enjoyed that portion, man.

You talked about why you wanted to go away gaming because teamwork does include its disadvantages as well.

How do you first get exposed to trading?

Brian Lee (42:20)

I used to be all the time interested by investing afterward with my funds because I knew that gaming won’t last eternally.

Originally, I used to be just going to take a position within the stock market, but I learned that with trading, you might do rather a lot more.

I didn’t necessarily leave Esports with the amount of cash that I wanted.

Like I might say, I walked away with Esports with lower than 100k.

After taxes got worse.

It’s type of like, I didn’t think that I could retire from that.

Like in my vision of playing as an Esports player.

I used to be like…

“I’m going to put highly at TI and I’ll probably walk away with a pair hundred thousand dollars”

I can spend money on that and I will be good, but cutting my profession a bit short, I used to be like…

“No, I feel I even have to trade”

You understand, you go on YouTube, you discover plenty of various things and it is very appealing.

The marketing is excellent. I can say that.

You identical to…

“Okay, well, I mean, like, it’s faster, less risk”

You think that it’s less risk since you’re out and in and also you do not have to carry through things, but in fact, there’s more risk in a way.

So yeah, I just got into the marketing channels.

Rayner (43:47)

I feel I heard somewhere about your journey of learning learn how to trade.

How do you then learn learn how to trade?

or moderately, how do you discover your edge within the markets?

Brian Lee (43:59)

I feel what I trade may be very heavily marketed.

So, it wasn’t difficult necessarily to seek out an edge.

I feel it was difficult to determine who understood the sting well.

Lots of people just type of depend on the incontrovertible fact that small caps have certain percentage tendencies because plenty of them are gaps and gaps are inclined to fill and things like that.

So, people could depend on just the general type of like mechanics of gaps to clarify why there’s an edge.

But there’s rather a lot more that goes into it when it comes to doing fundamental evaluation and technical evaluation.

It is not all identical to things gap and you then train them.

I feel naturally what people do is go to YouTube.

But I went to Twitter, and I just began finding individuals who I felt were credible and just investigated their thoughts and their feeds and eventually found out who I assumed was legit after which just began cutting out people.

Got scammed a few times, got into bad chat rooms or whatever, or paid for things that weren’t excellent.

But like at the tip of the day, I could just figure it out.

Okay…

“I do not trust this person anymore and just unfollow them”

Eventually just narrowed it all the way down to one or two people and studied all the pieces that they had to say and it was always hitting.

What they were saying was always congruent with the market.

I used to be like…

“Okay, these people understand the very best”

That was all I needed to deal with.

Rayner (45:36)

You mentioned about Twitter.

I’d wish to hear more about how you utilize Twitter to then find people who you should learn from.

I feel you utilize probably the search function, but are there any more things you could expand on?

Brian Lee (45:53)

Yeah. So, early on I learned that on Twitter, there’s just like the money tag type of feature where if you happen to use the dollar sign and put the symbol.

It’ll connect you with other people who find themselves trading similar things.

Like naturally in a small smart me, just like the small-cap space that I traded, you’d see reoccurring characters plenty of times.

I also tried to take part in that by putting the money tags of the stocks I used to be trading or that I used to be watching and making comments about it or sharing my charts or my thoughts.

Eventually, I just began to know who was consistently here and commenced sending messages that were like…

“Hey, you already know, like I see that you simply traded this, and I used to be curious if you should refer to me about it or like if you happen to could take a look at my stuff”

What I did was I used the feed as a type of journal slash content blog where like, even when I didn’t know anything, I used to be just type of explaining what, how my trading journey was like and what my ambitions were and stuff like that.

I feel after I was sending out messages and stuff like that, people saw my feed was not identical to an empty thing with an egg.

It was actually like someone attempting to do that.

I feel that attracted people towards me, but kind of like, I feel I only really made a few really good friends on Twitter.

The foremost way was like making one friend who knew other friends, right?

After which they only type of bring other connections.

They’re more trustable as well.

You simply type of create a bunch. After which at that time, such as you’re just pulling resources.

Since it’s type of like if you’ve gotten 10 guys in a single room and someone sees something or sees some relevant information, they’ll pull it in and you’ve gotten like this aggregator of data.

But to me, that was probably the most helpful on the time.

Rayner (47:57)

While you say small-cap stocks in any respect, are they below a certain market capitalization that you simply trade?

Brian Lee (48:03)

Yeah.

They’re like stocks which can be below $1-15.

They can not be below a dollar as well.

The market caps are frequently lower than 100 million, like very small firms.

The floats are very various sizes but considered low float, like relatively all the pieces else.

Rayner (48:27)

Could you then share a little bit bit more about your trading methodology to the way you trade the markets today?

Brian Lee (48:35)

Mm-hmm.

So, I trade primarily mean reversion strategies.

I try this to the short side, simply because plenty of the small-cap firms are very volatile and so they move large percentages.

It’s easier mainly to let it come to you.

I mean, you possibly can do mean reversion each ways, but just the character of this market, it lends itself more towards the short side because there are always recent candidates to guage versus type of like trying to choose bottoms, which is like in a small cap.

You understand, if you happen to’re picking a bottom on a small cap, you are catching a falling knife versus like if you happen to are dipping buying the SPY during like COVID or something like that.

That is mean reversion trade.

I do not trust the corporate’s long side.

I’m trading mean reversion and I’m systematizing it in order that I can eliminate a type of just like the discretion when it comes to like using signals.

Know when to begin in or to construct a position.

I’m typically starting in very small as there’s probably the most risk once you type of like lower probabilities and it’s going against you.

But I’ll typically manage risk very tightly, get back in, and construct positions based on price motion working in my favor.

Normally, that’s type of like enhanced by fundamental technical evaluation, understanding of the market psychology on the time cycles, and with the ability to understand the news.

Combining all those 4 things helps with this drawback.

Rayner (50:16)

Okay, that is quite a handful over there.

Let’s type of unpack them one after the other.

Simply to be sure that we’re on the identical page.

While you say mean reversion trading on the short side, I imagine that it’s possibly a stock that has made a parabolic move for whatever catalyst or reason.

You then’re trying to short that move down lower in anticipation that it is a fake breakout or something along those lines.

Brian Lee (50:40)

Yes, these moves are sometimes 1000% move.

Something very insane. 50%, 100%, 300%.

These are very large moves, right?

You do not see those in large caps, which is where the chance lies.

It’s just that the volatility means that you can reap the benefits of these ranges.

I mean, even when something does a traditional correction of like 50% or something like that when it ran up.

A really large percentage, you already know, that is still like plenty of meat on the moon.

Rayner (51:12)

Okay, so I’m visualizing that the stock is in a downtrend, after which for whatever news or reason, boom right, we’ve this huge spike up a thousand, two thousand percent, and you then’re trying to short it since you do not believe this stock is valued at this, whatever this price is.

So, then what’s type of like the subsequent step?

What type of like gives you a trigger to say…

“Oh, now it is the time to enter, or let’s wait and see you already know if it goes up higher.”

What’s your top process once you see such a pattern?

Brian Lee (51:36)

You just about start understanding that every style of meta-version trade has different variations.

A few of them have technical setups like they run into certain resistances or trap longs.

Like in a way you mentioned fake breakout, that is an ideal example.

Just something where everyone seems to be anticipating an even bigger move and the stock stuffs quickly and starts selling off like.

That type of move triggers additional selling pressure.

But more often than not it has to do with like fundamental pressure.

So, these firms are frequently trying to lift capital to remain alive.

They do it using dilution or offerings and when you possibly can type of understand the way in which that firms raise capital from the markets, you recognize that they are either adding additional supply to the market, which creates that mean version trade.

Or they’ll do like very quick offerings that may impact price moderately quickly.

Like you will see these 20, 30, 40% drops instantaneously on news of like pending offering or like an offering that is effective or something like this.

In order that risk gives a profit to the short sellers because we’re capable of type of anticipate that or mess around the incontrovertible fact that those firms do need to make use of dilution to lift capital.

Rayner (53:04)

So possibly before they tried to lift capital, there is a spike up higher. What normally led to the massive spike up higher?

Brian Lee (53:13)

It’s typically manipulation.

These firms hire institutions that concentrate on generating liquidity.

Lots of these firms don’t trade actively each day.

They typically trade very sporadically.

And typically, after they do it, it’s based on news or based on some type of literal manipulation from these institutions.

So essentially like you are like…

“Hey, my company goes to be bankrupt in like three months”

What can we do about that?

You may have run and done offerings for plenty of these firms in similar situations.

Could you help me out?

They’ll be like…

“Yes. But to do this, we’d like to strike a deal where you give me something in return”

They’ll be like…

“As a part of the dilution process, we’re going to provide you some percentage of the extra shares you could raise capital on your personal. ”

Those firms will then be incentivized to run the stock as high as possible in order that not only are they raising capital for the corporate themselves.

But they’ll have like an enormous sweetener deal corresponding to like hugely in the cash in warrants or additional shares that they will just dump onto the market and generate like a considerable amount of capital.

Mainly, the upper, the higher, you already know, for them.

The incentives match at that time.

Rayner (54:39)

Right, that is insightful.

I’m not in a small-cap space.

This may be very recent to me.

Okay, we’ve an enormous spike run up and it’s backed by fundamentals because firms are trash, and try to lift capital to survive.

In order that’s why supply will are available.

When supply is available in naturally, the stock price will go down, and whoever buys that top gets caught holding the back.

Since you’ve gotten this type of inside note, when supply is available in, the worth is about to hit lower.

So where do you are feeling it’s time to enter a trade?

Brian Lee (55:10)

So personally, I never, try to not guess my entry.

I systematize it within the sense that I attempt to create a signal that may put a probability on a level holding based on selling pressure.

I’m never adding or starting a position right into a straight-up spike, because if you happen to try this, you are entering where there’s 0% probability.

You may have no idea if it’s going to proceed going higher or what because buying pressure is just based on momentum.

If the stock starts giving signs of selling pressure, you possibly can now start assigning a probability toward that risk.

You’ll be able to say…

“Hey, that is the primary pullback it ever had”

It might need a 5% likelihood of holding.

At that time, possibly not enough risk, but when it starts creating structure, as an example putting in lower highs or whatever head and shoulders patterns, whatever, that is a really basic technical evaluation.

But I’m just trying as an example you possibly can essentially assign probabilities to your risk and begin putting position sizes that match that probability.

So, you already know, if you’ve gotten a 50% likelihood of the danger holding, you possibly can possibly placed on half of your position and essentially like I’ve systematized that using indicators which can be based on price motion.

If the stock starts pulling back and starts being weak, I’ll find a way to get in with a small amount of size after which eventually I’ll start having much safer confirmation signals.

Signals and people will allow me to go in full size.

I’ll try so as to add into the winner as well to extend the win and pull my stop all the way down to compensate for that risk.

I’m putting in additional position, but you already know, I’m pyramiding the strategy mainly at times otherwise such as you’re just putting a risk on the high and my foremost advantage is sort of a very risk-reward focus.

So mainly, I do not care if I lose.

Necessarily because I do know that after I win it is going to be much larger than those losses, especially in case your position size is nice.

Rayner (57:14)

You mentioned that you simply, I mean, the inverse of catching a falling life is I suppose you do not shoot a rocket that is taking off.

That is how I interpret it.

You then mentioned you’d assign a probability like for instance if you happen to mix a head and shoulders pattern right, you already know, how do you then assess a probability as an example…

If a head and shoulders pattern forms, how do you then assess it?

For example…

There is a 30% probability of it reversing down low?

How do you wish to give you that figure based on possibly the structure that you simply see on the chart?

Brian Lee (57:44)

I used to be using that as a method to illustrate it for people to know it on a basic level.

However the true logic is like using indicators you could backtest.

So mainly, if you’ve gotten enough samples of an identical scenario, you possibly can say like…

“I can use X indicator, like X moving average or whatever as a signal and I can go over all those charts”

And say like…

“When that moving average cross or when this moving average form a cup or whatever it’s that produced like a 50%-win rate on that signal”

You’ll be able to go into those, the subsequent trade with the understanding that you’ve gotten back-tested something on the identical area of interest, inside the same samples, and you possibly can placed on the danger pretty confidently at that time.

Because like mean reversions, typically you are mostly trying to choose the highest in a way, otherwise you’re trying to choose the bottoms.

But I feel it is not intelligent to attempt to get in the way in which of a runaway train or whatever.

Like you do not need to step in front of momentum.

As a substitute, you should see signs of reversing or like some people would say capitulation and essentially using that information to make an informed, risk-aware bet that there is a decent likelihood that this may hold.

It’s plenty of back-testing to figure that out, nevertheless it’s not difficult because mean reversions in a way are only type of like making a parabolic move after which topping out or bottoming out after which just going the opposite way.

It’s just type of attempting to catch the backside of that.

Rayner (59:30)

Okay, we’ll get to the backtest part in a moment.

But for now, I just want to only type of follow-through, now I even have an understanding of the way you enter, mainly letting the market show you a market structure, a price structure that sellers are coming in, take a position.

What about stops?

Where do you then place your stops to get out of the trade if you happen to’re flawed or proven flawed?

Brian Lee (59:48)

Those signals are supposed to put a probability on probably the most extreme point.

Like, if something made like an all-time high, right?

You then would probably assign a probability that top.

That is probably the most obvious point to put a stop because that is where the selling overwhelms the demand.

You sometimes would put a stop there.

Now you possibly can put more risk of that.

You’ll be able to say like…

“I’m in half size now, I will go full size”

That helps us with the identical resistance level.

But because the trade moves on, like mean reversion trades typically turn into trending stocks in a way.

The difference between like a range-bound stock is that it’s just ping-ponging between two ranges, but a trending stock goes to do lower highs or higher lows, etc.

Just always do these retests, finding sellers or buyers, after which just going the opposite way depending upon in the event that they’re still there.

So, if you happen to recognize that it is a trending market, you possibly can move your stops with the actual trend.

That is rather a lot more discretionary.

There’s not method to systematize that for my part, but there are methods you could type of like dumb it all the way down to learn.

For instance, if you happen to’re just attempting to learn learn how to do it, you might say…

“At this third signal or whatever, I’ll placed on like 50% size”

Something like that.

Identical to some very generic number.

You understand that it will all the time pull your stock down a certain quantity.

That is a excellent method to just type of introduce yourself to the thought, but eventually, it’s mostly discretionary.

You may have to have understanding of how stocks move, what you are trading, and understanding that you might get stopped once you’re not even flawed.

You are attempting to stack it to where such as you place your stock you’ve gotten a really high likelihood that if it gets there, you are flawed, nevertheless it’s never 100%.

For that reason, I typically wish to use the extremes initially.

I all the time advocate that folks don’t add to winners and move stops unless they know what they’re doing because they will kill your strategy and your mental.

It’s extremely essential that you simply just understand learn how to do the fundamentals first.

Rayner (01:02:11)

Okay, so from what I’m hearing is that as an example you notice a setup and also you enter your first position.

Your first stop is frequently at the intense high, all-time high.

For instance, where there is a maximum selling pressure.

For example…

“If the market progressively moves in your favor, you might scale into your position”

This implies adding more size, after which your stops could shift all the way down to possibly, for instance, to the previous swing high or something along those lines.

So, your stops will progressively move within the direction of the trade that is moving in your favor as well progressively.

I feel from what I also heard, I feel possibly from other podcasts, is that…

Your risk is all the time the initial risk that you’ve gotten set for yourself and nothing more.

Because sometimes if you happen to, as an example for instance, your original stop is at an all-time high, you add a recent position, but you do not shift your stops.

Now your risk has increased, right?

Due to the recent position that you’ve got taken up.

While you discuss scaling in, right?

Now I even have an understanding of the way you set your entries and your stops.

While you discuss scaling in.

What are some stuff you search for before you skill into your trade?

Brian Lee (01:03:15)

Like I said…

“I’m very systematic in this fashion.”

I construct out systems or indicators that may capture these moves.

Nonetheless, as I’ve advanced as a trader.

I’m a little bit bit more discretionary.

Sometimes it bites me within the ass, like with those ads, but I feel like you possibly can’t achieve the utmost potential if you happen to don’t use discretion at that time.

This is the reason I consider it very advanced for traders to make use of the upper timeframe confirmation signals.

For instance, if you happen to use a signal on just like the one- or five-minute chart, you will generally get a signal that is like relatively quick, but if you happen to use a signal that is like quarter-hour, it’s only going to trigger possibly a few times inside that trend.

The explanation why you would not solely use that’s that you simply’re not going to get in like where you’ve gotten risk reward, but since it’s so lagging.

Like those probabilities of it holding or like being an efficient signal or like much higher probabilities, like you might boost your probabilities from like 50% to 90%.

Those are really good points so as to add because essentially, it’s showing you that the stock is doing exactly what you would like it to do.

It’s trending and it’s getting into a direction very heavily.

At that time, I might make that call or I might use the predefined position sizing as well if I used to be a beginner, but now I adjust it to the precise level.

Rayner (01:04:54)

Am I right to say that once you scale into your positions, normally you are doing it more on a pullback moderately than on a breakup?

Brian Lee (01:05:02)

I could do each.

Mainly, like typically my signals are, I’m only adding two winners.

All my signals are inside my direction.

I might need like three signals.

The very first thing I used to be like starter placed on 50%.

Then the second is likely to be like placed on the complete size.

So now we’re risking the complete R after which the third signal is likely to be like…

“Let’s move our stop… so let’s placed on more position and move our stop accordingly”

For those who can take that so far as you would like, you possibly can add like as persistently as possible.

You simply must recognize that the more you add like closer to your targets or towards the mean version, the less expected value of every trade.

Like, imagine if you happen to just placed on a trade at that moment where you added the danger rewards, not excellent, right?

However the win rates are high.

So, it’s type of like…

There’s an art of balancing that to where you don’t love to obliterate your average cost an excessive amount of.

Typically, the explanation they call it pyramiding is that you simply’re normally adding less size because it goes on so that you simply’re just getting larger, but you are not killing your trade.

It’s just sweetening the deal so that you simply, your winners are that much larger than your losers.

Then the long term that helps rather a lot in helping you be consistently profitable.

Rayner (01:06:20)

Would you say that an enormous a part of your age comes from scaling into your trades?

What if you happen to don’t scale into your trades?

It’s just type of like entry stops and targets.

How would things change for you?

Brian Lee (01:06:31)

Not much, actually.

Even when you’ve gotten a better win rate and a lower risk-reward, there are plenty of things you possibly can do to optimize that.

You’ll be able to increase your initial position size.

You may have the good thing about much less drawdowns; you already know?

By way of growing your account, like I compound my account.

If you’ve gotten a better win rate, you’re naturally going to compound your account, very effectively.

Because you are not taking losses necessarily.

You might have a really conservative strategy.

I feel the sting comes all the way down to whether are you able to consistently do it.

Being consistent means that you can plug that into like…

“For example an equity curve simulator”

And understand that in case your trajectory is positive and never just good, it needs to be an ideal trajectory due to human nature.

Like you are going to make mistakes and you are going to pay fees and stuff like that.

Understanding if you happen to can create a baseline strategy that may produce a positive expectation performing in addition to you possibly can near that after which optimizing when it comes to like…

“Can I add, can I increase my position size?”

“Can I exploit more risk?”

“How much drawdown am I willing to tolerate?”

All of those aspects will let you compound your account pretty safely.

I might say.

But the general edge will not be about risk-reward or anything like that.

You continue to must have stock selection.

You continue to must have understanding of the mass market psychology.

You understand, sometimes like if the psychology of the market, for instance, during COVID, like all the pieces was grossly exaggerated.

I mean, you might see a move that typically would go 50% spike.

Going 500% just due to the mania.

You might see GameStop, AMC, whatever, all these stocks just ripping hard at anybody thought.

You simply must find a way to acknowledge like…

What’s the environment that I’m trading in and find a way to adapt to that?

Otherwise, you’ll just mainly get frustrated.

That awareness is something that you simply just get from experience.

I feel you get experience from just position sizing appropriately in order that you’ve gotten enough attempts to only keep losing, keep making mistakes, and stay available in the market.

There may be plenty of edge in plenty of different stuff you do.

It’s type of just like the culmination of that, but if you happen to don’t pick the proper stocks, you possibly can’t earn a living, that is essential.

Rayner (01:09:10)

Okay, and also you earlier spoke in regards to the market environment.

Are you type of referring to what the general stock market is doing as an entire when it comes to the market environment?

Brian Lee (01:09:20)

No, it is a, well, you do need to learn about it just in case.

In certain circumstances, like with the rates of interest increasing, the macro environment causes a type of depression within the small-cap space.

But when all things are going well, it’s a reasonably healthy market bull market.

There’s more cash going around.

Persons are riskier with their money.

They’ll be investing in small caps and small caps will extend moves.

In order that’s typically when you’ve gotten a green light, but even inside that, there are cycles inside the smokehouse space.

It largely revolves around who’s on top of things.

So, like, are the long buyers on top of things or the short sellers on top of things?

Or is there no edge?

It’s just completely neutral.

Through the type of recession time in 2022, there was not much opportunity. It was a neutral cycle.

There was not much occurring, but like typical it is not like that.

Typically, it’s like one side’s getting greedy.

One side is being very aggressive and frequently, they get caught.

Form of like…

“Oh yeah, I just show up and just short all the pieces”

The very fact of the matter is that the market is hyper-aware that short sellers exist and short sellers result in squeezes, like short sellers are the explanation GameStop and AMC go insane, right?

When shorts get aggressive and, you already know, deal with type of growing their accounts and stuff like that, it creates these insane squeezes.

That is when people blow up.

That is where the danger is available in trading and that is where the notice must be there and the danger management.

Otherwise, you possibly can feel such as you’re winning each day, but get overconfident and just lose all the pieces in a single or two days.

Rayner (01:11:16)

When the shots get squeezed, is that where you are available to type of just like the parabolic move higher?

To see if you happen to can let it

Brian Lee (01:11:23)

No, I get squeezed, to be honest, however the thing is like…

I get squeezed, and there is not that much you possibly can do about it.

You’ll be able to type of brace for it, however the thing is I do not care.

I risk very modestly to the purpose where even when I take a max option like that, it’s just type of…

“Okay. Such as you got me today”

The thought is that it is often going to occur. It’s type of like, you already know…

For those who play poker, you type of must take bets, right?

Like you are going to lose, sometimes it is not like you are going to win on a regular basis.

Sometimes you’ve gotten hand, you place a bet, and also you lose.

Chips are only always cycling across the table.

That is the way in which I see it.

It’s like…

As a trader, I lose as much money as I make.

It’s just that the quantity I make is in the mixture.

It’s just larger than how much I lose.

In order that’s the web P and L, but I still would say like…

For those who checked out my gross P and L loss.

It’s still relatively high.

It’s like I’m giving as much as I’m taking, mainly.

So, it’s superb. It’s that is natural to normal.

Rayner (01:12:32)

To date, we’ve talked in regards to the setup, the entry, the stops

Now let’s discuss targets.

Where do you type of like…

Think right away it is time to exit the trade for a profit

Brian Lee (01:12:40)

There are a few other ways.

There is a technical.

So sometimes, like I discussed gaps, they have a tendency to fill stocks that gap up.

They create that downward pressure.

You may have also technical levels corresponding to breakout levels or levels on the chart which have significant vault trading volume you could use as consolidation areas.

Then there are fundamental levels.

Sometimes, it’s written out in plain English.

Like we’re going to dilute based on this exercise price of a warrant and it’s like…

“Okay, well, if there’s a lot in the cash stock, then why not only run it down as much as we are able to”

So sometimes it’s explicit, other times it is not after which there’s just like the systematic way, which is like using indicators you could back test and people can be mean reversion indicators, like moving averages.

You might use Fibonacci retracements, things like that.

It is not like a completely scientific Fibonacci.

Example

But like when it comes to mean reversion, it makes plenty of sense. I mean, it doesn’t matter if it goes to the 50% of retracement or 70% or 60%, whatever.

So long as you possibly can back this out and determine if that’s consistent.

If it’s consistent, that is ok.

I even have multiple targets.

It’s type of like… I read the room, regardless of the price motion is telling me.

Like if there’s like plenty of selling pressure if I noticed that, or if I noticed prefer it’s type of thin and I feel like this market is absorbing plenty of like selling pressure, there may be a requirement at these levels.

If I’m seeing that, like I’m reacting to it, but like I might say…

“I probably have like eight different price targets, actually”

People think that you simply just need one or two, but I’m very adaptive and I do know which setups use which of them and which type of price motion corresponds with different price targets.

So, you already know, I type of use all of them and so they’re all mean reversion, just like the process.

Rayner (01:15:04)

Could you perhaps give an example of when you’ve gotten eight, like one example of how you’d exit the trade based on considered one of your eight targets?

Brian Lee (01:15:10)

Yeah.

I typically operate from the mindset of like, what’s my most conservative goal?

So based on this setup, what can I expect to hit more often than not?

Normally, that will probably be like a faster type of moving average potentially, or like a, as an example if we use Fibonacci for instance, you might say like a 50% retracement.

But obviously, there’s potentially more left within the tank.

So mainly, when it gets to those conservative targets, I’m the time and sales level two, and in addition the chart, and I’m attempting to see like…

“Is the selling pressure sustained?”

“Do I feel like this level goes to interrupt?”

“Do I feel like there’s more meat on the bone?”

That might be just like the foremost way, and I might have a stretch goal and be like…

“Okay, now let’s repeat the method on the stretch goal”.

I’m not attempting to catch the precise bottom tick, or the low or whatever, I’m attempting to catch the reversal.

I’m attempting to search for the moment. It’s like mean reverting again.

Such as you mean revert one time to short and you then mean revert to long mainly, but that is a canopy.

It’s just doing the alternative literally.

You simply systematize what can be the long entry and that’s the short cover.

Yeah, I suppose I do not give it some thought that way, but that is exactly what it’s.

Rayner (01:17:34)

From what I’m hearing, although you mentioned mean reverting, it looks like you are actually type of like a trend trader.

But towards the short side, you are trying to capture the meat of the move, because you are not selling at absolute highs or buying at absolutely the lows.

Let’s talk now about backtesting.

Earlier you were talking about it.

I wish to hear about your strategy of doing all of your backtest to realize confidence in your trading system.

Brian Lee (01:16:58)

Yeah.

So, I attempt to collect as many samples as possible.

The benefit of my market is that we just get a lot frequency you could get like 100 and 200 samples in a few months.

So, the character of that’s, I just screenshot all the pieces.

My scan is all the time picking up the identical stocks or the identical style of stocks.

From there, I will categorize them like…

“Oh, this is that this setup”

That is that setup, then I’ll just screenshot all of them. I’ll screenshot the intraday chart, and better timeframe, after which just like the each day chart.

Typically, I’ll just type of save those charts with like my indicators on them.

But when I were like completely going to back-test a recent system, I might just be archiving those trades in order that I even have a listing of likes, that is the date, and the tickers that I used to be interested by watching based on my scan.

You desire to attempt to tune your scanner so that you simply’re only picking up more or fewer trades that you simply can be interested by taking.

From that time, you are taking it a step further and you might do the evaluation I discussed, such as you do the technical, fundamental news and cycle evaluation, which I just call the 4 pillars.

You do a pillars evaluation and determine moreover, if that will categorize that setup as a particular trading setup.

Is it a fundamental trade or technical trade?

Based on supply or is it a trade because…

“There’s so many traders trading it and there could potentially be a trap or there could possibly be like, it’s just way too overextended statistically, there is a top edge”

In those cases, you type of have a distinct set of expectations.

Literally what I’ll do is I’ll just go on my charting platform.

I like Thinkorswim rather a lot.

First, I’ll just consider like…

What was my problem?

What’s the difficulty that I’m trying to resolve?

I’m trying to seek out an entry signal.

So, I’ll just isolate it to at least one thing.

I will be like…

What are indicators that I could use to coincide with entry signals?

You should utilize anything.

There are such a lot of kinds of indicators and so they’re all pretty fleshed out.

I do not see how it is not useful because I feel that at the tip of the day, all they should do is provide a probability.

I feel it’s more useful, actually.

To simply throw up indicators that you simply imagine have the characteristics that will match, like entries or exits, for instance, whatever you are specializing in.

For instance, oscillators are example.

Appears like an oscillator like RSI or something, after which the extension might be measured mainly by overbought.

You’d have the default settings, but essentially what you might do is like…

“Put that in your chart and tune it, fine-tune it, in order that on the samples that you’ve gotten in your area of interest, that it’s more reactive and more accurate.”

What you will find is like on every type of signals, just like the smaller timeframe signals are all the time very noisy.

You will get like 10 signals or whatever.

The goal is essentially to scale that up like either changing the values for yourself to create the conditions where it has, it’s less noisy, or simply literally bump it up, like from one minute to 5 minutes to whatever.

In doing so you will notice that the characteristics of indicators are that they’re getting less and fewer noisy, and the upper the timeframes you go up.

It’s about recognizing like…

“Can I create probabilities based on these signals? can I reduce the noise?”

Or can I take a loud signal, pair it with something else, and create an invalidation factor?

For those who possibly had like five signals and you are like, that is way too noisy, you add one other layer on top of that, possibly one other indicator or one other price motion condition.

You be sure that it’s as black and white as possible so you could recognize it in real-time.

That may assist you to reduce the signals from like five signals to possibly two signals.

Two signals for an aggressive entry are moderately good.

I mean, if you happen to can placed on a starting position, like lose quarter R, half an R, placed on one other position, and that one works, like I might take that any day.

The advantage of that is that you simply get risk reward since you’re starting in much closer to the mean reversion point and from that position, you possibly can construct out quite a a lot better position due to the flexibility to have like a better average cost.

Like more comfortable average costs in that case.

You’ll be able to placed on more position size, mainly because it’s working versus if you happen to attempt to go so slow that you simply’re prioritizing win rate, after which you’ve gotten a really low-risk reward, which is totally superb.

I mean, I feel you possibly can go either way.

That is the great thing about trading is you could tune your stats and the way you are feeling comfortable.

I’m very aggressive. I would like to participate in plenty of movies.

Like I even have FOMO, it’s hard for me to attend for signals like that.

I’m going for aggressive signals and I pair that with slower, more disciplined signals to make it work.

So, you place up those in whatever indicators you are interested by, you may placed on different variations just so you possibly can see all at the identical time.

Start literally, like go on demand, ThinkOrSwim, go start on the earliest point you possibly can.

Type within the symbols one after the other.

Just take a look at it. You could find out if it really works in like.

Five seconds. I will be like…

“Oh, this does not work. Oh, this works. This worked. This has a 50%-win rate”

The more astute people might put it into Excel and add the numbers and stuff like that, but for me, the visual confirmation is enough.

If I see literally like three months of this and I do know just like the signal is working for me, that is enough.

Then I’ll just literally codify that.

So mainly, I’ll create my script that may add labels or alerts that are available sounds or whatever.

And I’ll say like…

“On the setup, this signal is supposed to work. I even have back-tested this. I do know what it looks like”

If it triggers, like if it repaints.

For instance, a five-minute signal might take five minutes to substantiate.

I’m going in knowing those flaws and I’m going in knowing the characteristics, trade it live, and recognize if there was something I neglected.

If that is the case, and I attempt to correct that for the subsequent time, or if I recognize prefer it’s, it’s just not feasible, then I’ll just give it up and I’ll just repeat the method.

I’ll just back-test nonstop.

The thought is essentially like finding a situation or a stock price motion that you simply like, for instance, a mean version, like a large mean version, like a wonderful move.

You reverse engineer that.

You then create a system to capture them in the longer term. After which if you’ve gotten other very similar situations.

Like, as an example…

“You may have five other stocks that looked very much like that one”

You’ll be able to back-test on all those and create a thesis.

Then the subsequent time that setup happens, you possibly can apply the system you created to execute on it that will have captured what you missed prior to now or what you were interested by.

That is mainly how I create recent setups.

So, the thought is you simply must recognize when to make use of a certain system.

I just type of like reducing the complexity by specializing in a setup that may be very much like one another or setups which can be very much like one another.

In order that I do not have to make use of too many alternative sets.

Like I probably only have like three, three, or five different sets of indicators and I do know when to make use of them.

It’s all arrange dependent.

You simply construct on one after the other.

Firstly, I had one. I had two entry signals at the start and one price goal signal for like 12 months and a half, like each day.

That is all I did. But I just recognize that there is so way more nuance you could construct on that.

So, it’s gotten more complex over time, nevertheless it’s not that obligatory.

Rayner (01:25:11)

From what I’m hearing, you’ve gotten various kinds of trading arrange regardless that they’re trading in an identical methodology which is shorting stocks.

So correct me if I’m flawed, but one could possibly be for instance, price making an enormous move into key resistance and all-time resistance and you should see how you possibly can reap the benefits of a shorting opportunity towards the mean.

One other one could possibly be what you spoke about stocks right, diluting the availability right any more supply because they need to lift money for the shitty ass company and also you’re seeing how you possibly can you already know discover a pattern to short and return to the mean.

I feel these are the few different setups that you’ve gotten mentioned and is that this what you mean by setups?

The context behind the trade?

Brian Lee (01:25:50)

Yes, the context may be very essential.

A typical example is named a fail-fall through.

It is a stock that’s ripping insane.

There’s all the time some extent essentially where, like either the last short got squeezed out or the last buyer got here in and like had probably the most FOMO.

A ton of volume goes through, however the stock now not goes higher.

That is a possible reversal point and that is completely based on supply and demand.

That is going to trade much in a different way than as an example a stock that has a relentless stream of supply that is coming in from like institutional side.

Typically, for instance in large-cap stock, if large institutions try to build up a stock, they are not going to only send a market order nonetheless size they need.

They will tear it over time.

You understand that enormous size must be traded in a particular way.

They must be more passive, be more patient, be trendier, and so they may not fill their entire order in someday.

Recognizing the difference between irrational exuberance or trapping behavior and institutional behavior is pretty essential.

Rayner (01:27:13)

When you recognize these different behaviors, then you’ve gotten your different set of custom indicators that inform you when to enter based on the backtesting work that you’ve gotten done previously.

Brian Lee (01:27:21)

Yes.

Rayner (01:27:24)

Okay…

I’m curious, as an example…

You do a back test and also you realize possibly the indications, the parameters.

If it is a negative result, for instance, then what’s your process to refining it or abandoning it altogether?

Brian Lee (01:27:37)

I’m super quick to desert.

Like I’m just type of like how the Edison approach.

You understand, just try a bunch of things.

I’ve failed a whole bunch; 1000’s of times and you simply find something that sticks.

Like you discover something…

The needle within the haystack.

It really works.

You are like…

“I understand this. I understand the way it moves. I’m completely completely satisfied with this, with its flaws”

I accept that its strengths, like really fit what I’m trying to trade.

There may be this funny quote…

“I will butcher this, but like Qullamaggie “

Everyone knows Qullamaggie.

I feel on considered one of his streams, someone told me that…

He had like a 50-moving average, something like that. And the chatter was that 50-day moving average, do I want to place that on?

He’s like, it doesn’t matter what this moving averages.

He modified it to 69. I feel it’s like…

I’m just going to make use of the 69 movie yards.

I do not care because, like, ultimately it doesn’t matter.

What the number is… These indicators kind of behave the identical.

You simply type of must tune it to what matches your strategy and what sort of behaviors you expect around it.

It is not going to make an enormous difference, whether you utilize a one-minute moving average, two minutes, or five minutes.

You’ll be able to put it on any random number you would like.

The backtest is there to validate your concept that it’s feasible.

I do not think I’ve ever shipped an idea that did not work on the backtest.

Many of the ideas fail due to the unseen issue.

This is just too difficult to execute.

Like no human can execute this, or this is just too disciplined.

It’s extremely hard for me to attend or repainting might be the largest issue.

It’s like, if you happen to’re using a high timeframe confirmation, the explanation it looks so good in your backtest is that it disappears when it doesn’t work.

But like you may see, it flashes somewhere in between its cycle of initiating the signal and the ultimate confirmation of it.

Again, if you’ve gotten a signal, that is based on the five-minute timeframe, it could signal on the primary minute, the second minute, the third minute, and fourth minute, and even the fourth minute and 50 seconds.

But when the second before the signal invalidates, the signal will now not be under TARP.

While you go on backtests, you are not going to get that information.

Now, one advantage you possibly can have is you possibly can replay the trades on demand.

You’ll be able to go second by second and understand what that appears like, and you’ve gotten to know what repainting is to be systematic trader.

Since the result on the ultimate chart is all the time going to look too beautiful and you’ve gotten to acknowledge what are the issues of this indicator.

It is usually things that you simply type of recognize.

It’s type of like paper trading.

You’ll be able to paper trade and type of get understanding of what you are going to do, but like until you trade it and understand like what’s the psychology behind how you are going to execute or the issue of what you are doing?

You may never really get that full experience.

I’m all the time very quick to ship a system because to start with.

I do not risk an insane amount.

I risk like 1-3% of my gout per trade.

I do not care if I pay to seek out out information because that couple of mistakes may lead to love a extremely good strategy in the longer term, or simply quickly cut off an concept that sucks.

I’m more willing to only try things.

That is my thing. I’ll fail rather a lot.

Rayner (01:31:40)

On the subject of backtesting, because from what I hear, you are doing this manually, am I right?

Manually backtesting.

Would there be times when your bias might kick in after which find yourself providing you with an inaccurate view of reality?

Say, for instance, you are doing a backtesting after which this.

Is a losing trade after which you already know the human mind sometimes can reason know why it is a losing trade after which or why you would not have taken this trading setup due to you already know type of like hindsight bias so is that this something that you’ve gotten to take care of?

Brian Lee (01:32:13)

Well, to start with, I all the time recognize that trading is a probability game.

Good setups can fail.

Bad setups can work.

The main advantage really on this trading environment is the frequency.

You’ll be able to get proven appropriately in a short time or incorrectly in a short time.

There’s not as much hindsight bias in comparison with, as an example…

Like a swing strategy that has like only a few trades all year long, since the sample size is just always coming in.

While you’re talking like, I’m on my seventh or eighth 12 months now, and I have been recording like each chart of each day for that entire time.

I can return literally with eight years of knowledge with the identical specific scenario and see that it really works.

I might say it is not as timeless, as an example like Jesse Livermore’s type of strategy, since it depends on outside influences, like underwriters and things like that, or institutions.

But I might say the basics, just like the logic of my mean version strategy, would apply mainly to any type of mean version.

I’m just systematizing the reversal and I recognize the possibilities are lower at the start.

I understand learn how to create high timeframe confirmations which have very high win rates.

It’s extremely easy to create a confirmation signal.

Because as an example…

Whether you utilize like a better timeframe moving average, you utilize MACD or RSI, whatever.

There’s all the time confluence with other signals.

Like if a signal went off, like on a really high timeframe there is a excellent likelihood that everybody using whatever they use, Stochastics, Ichimoku Cloud, whatever you should call it, their signals would have also triggered a bearish signal before that even happened.

So the confluence is what makes it very viable when it comes to everyone seeing the identical thing or pondering the identical way.

However the harder signals are all are all the time those which can be catching, just like the tops or the bottoms.

Because those signals require plenty of invalidation.

They require plenty of fine-tuning.

Nonetheless, they are not even really obligatory.

For those who are available with a really modest signal you could see very easily, like signals possibly a few times per trade, has a 50%-win rate and I can get two-to-one trade off of it.

Those stats could make you profitable.

There is not any real stress. It’s just more of like, I’m very perfectionistic.

I would like to dominate the trade in a way.

It’s just more of an ego thing, but I could in a short time and simply create a retirement strategy within the sense of like super modest return, a excellent win rate, and a low drawdown.

There’s confluence with other strategies.

So, I feel it’s superb.

I’ll offer you an example.

The swing trading strategy is to make use of multiple moving averages and reclaim the common not only by testing it but testing it after which pivoting off and just continuing on its merry way.

That type of system has confluence with so many other systems.

For those who use any of the things I discussed and there is more, like I’ve probably tested like all of them, all of them like a measure of type of very similar move.

What I are inclined to do is placed on plenty of indicators that I do know people care about, and that I’ll not necessarily care about.

That helps me much more because I know the way other persons are pondering.

I would think like…

“This person is pondering that it is going to be a reversal, or this person thinks that is going to be, that the move is over, or this person thinks that the move will not be over and that there is more momentum to be out and I will take a loss”

Just being aware of all how people think, I feel that helps me as well.

Having plenty of different perspectives.

For those who consider all these different people’s perspectives, you possibly can construct out a reasonably robust idea of Meta patterns.

For example…

I all the time put a few each day moving averages on my charts, regardless that I do not necessarily care about them.

Occasionally, they work well.

I’ve just over time recognized a pattern inside what I’ve just passively been observing and I could use those at different closing dates.

That is type of just like the advantage.

Like I just feel like I see things that you simply normally would not see on the chart if you happen to weren’t in search of it.

People can say like…

“Oh, let’s go like full minimalist. ”

Like price motion time and sales level, too.

But I feel you won’t break.

You won’t see a lot of the small print of them recognizing and never only just my system, but others like I can see another person’s system and never react to it, but like…

No, it’s there.

That is the type of the way in which I feel.

Rayner (01:37:57)

Do you think that that…

Or moderately, under what scenario would you say that your trading strategy might now not work someday?

Brian Lee (01:38:07)

I feel that it’s going to proceed to work.

I feel the foremost thing is that it’s just not going to be scalable to a high degree.

Nonetheless, like even at the bottom levels of scale, it’s still greater than like, you already know, most individuals can be completely satisfied with, so it is determined by the ambition of a trader.

Like plenty of traders, even Qullamaggie mentioned that…

“He graduated mainly from small caps to large caps due to liquidity”

That is if you happen to’re attempting to go for like nine figures level, but you possibly can easily do like seven, eight figures and small caps.

I’m not complaining about that.

For me, I do not think it’s necessarily going to go away.

I do think it’s over-marketed and that I’ve seen strategies die.

I’ve seen edges die, but I’m always adapting and like learning recent strategies.

So long as that continues to be, I feel that I’ll still have an edge.

I also talked to plenty of traders of all different levels.

I talked to love intermediate traders, etc.

What I recognize is that the difference of edge will not be necessarily the knowledge, nevertheless it’s just compounded experience and skill.

Like what takes someone, as an example a minute to do would take me like five seconds, like transient gaps in knowledge.

Also, just type of like psychology, just knowing how people think, how people are inclined to make mistakes, like the most important fail points and cycles and things like that.

I’ve internalized a lot of the knowledge that I feel that may be a type of where the sting is when it comes to over your peers, not like the general fringe of the strategy.

On this market, it is very unforgiving.

For those who do not know what you are doing, you possibly can blow up your account.

Like I’ve seen individuals who have made well over eight figures in trading lose it in a single or two days.

That is the cutthroat nature of this trading market.

When those people bleed out, it creates opportunities for people like myself who usually are not like attempting to swing for defenses, but like be consistent.

As you mentioned, when people get squeezed out of your opportunity, I get squeezed too.

I get squeezed and I do not care because I do know if I’m getting squeezed, other persons are getting squeezed.

Most individuals tend not to administer risk thoroughly.

If that is the case, then unfortunately, they only create opportunities for me to trade.

That cycle just repeats on and on and on.

The main way that you simply type of avoid that’s like position sizing very modestly, being aware of your risk of break, understanding your drawdowns and your strategy in order that you do not get too emotional, and specializing in performance, not end result.

Wiring out capital out of your trading accounts so that you simply remove much more risk of break off the table.

For instance, plenty of traders leave all of their net price of their trading accounts, whereas I even have wired out over 90% of my net profits over the past eight years.

Subsequently, like even when my entire trading account blows up several times,

I’m still in the sport.

Nonetheless, I even are not looking for my trading account to explode, so I’m very risk averse on the account as well.

These are the things that I do to shield myself from those market cycles.

Whereas like plenty of people, they need to grow their account very heavily and commit all of their resources to it.

You understand, it’s like, if you happen to’re risking 30K and also you lose 30K, that is not just like the worst thing.

But if you happen to grow your account to 500K and also you lose 500K, you possibly can still do serious damage.

Like your problems only scale along with your account size and you possibly can all the time lose significant money regardless of how much you grow it.

With the ability to type of reduce that chance for the market to take from you is type of a key.

I exploit systems to wire out money in a logical way.

Not like…

“Hey, I’m just going to take a paycheck every Friday or whatever. ”

Like I do not try this.

I take money out when I even have outlier victories and outlier wins.

That is just a task that I even have that enables me to love, keep the cash I make.

Because in trading, it’s identical to, how much are you able to keep?

It’s not likely about how much you possibly can make.

It’s moderately easy to earn a living because plenty of times it’s just really coined flip if you’ve gotten the risk-reward in your side, then you already know that you simply only must win a certain quantity of the time, a certain percentage of the time, which may be very low.

Like three to at least one can lose.

You’ll be able to win like a 30% type of win rate, which I’ve done.

I feel like that’s the most important advantage, like people’s psychological human nature towards greed, towards desperation, wanting to satisfy their needs available in the market, financial, and emotionally.

All the things like that enables traders who type of can grow to be a more skilled mindset to reap the benefits of this repeating cycle.

Because I feel overall, like just answering your fundamental query, these firms will all the time exist.

They’ve all the time existed.

This has been a thing for a few years.

If an organization is facing a delisting, they may do anything they will to remain available in the market because its infinite money.

I wish I could start an organization because I do know exactly learn how to manipulate the crap out of it and you possibly can just make exactly infinite money.

I mean, so long as you place the paperwork down, you’ve gotten every incentive to remain available on the market, regardless of what.

It’s the very best thing you possibly can do.

I do know that these firms will all the time exist.

In the event that they don’t, then… I’m not that concerned because one thing about traders, it is not like…

It will not be linear.

For those who can, some traders did super well on COVID-19 and might just retire.

It may well only take one or two years of really huge gains or whatever, or simply possibly three or five years, as an example something modest 10 years, and you might retire such as you only need your technique to work for that long.

You understand, I’ve considered retiring like persistently and I felt like I could very easily.

It’s type of like don’t deal with that, deal with things like, is the sting exist?

Can I exploit it?

Does it make sense when it comes to that?

It is not a gimmick.

For instance, like when Bitcoin got here around, back within the day.

I used to be like…

“Will I trade stocks on the equities or will I trade Bitcoin?”

I used to be like…

“I do not trust in Bitcoin at this moment in time that it will be around”

Whereas the market has been around eternally and it’s tied to our society.

It’s type of like…

I will go along with the secure path, regardless that I see Bitcoin going insane because I realize it’s far less gimmicky in my mind.

You simply type of must wish to be sure that that your edge will not be depending on some type of like very area of interest factor, but something that is type of been there.

I feel like that is how this area of interest exists.

Rayner (01:45:53)

I have been intending to ask you earlier.

So, you trade the small-cap stocks.

How do you discover potential trading setups on a day-to-day basis?

Brian Lee (01:46:04)

Yeah.

You simply scan for stocks which can be moving with significant volume.

Stocks which can be gapping up or stocks which have made significant moves, like over the past couple of days

For instance.

There are such a lot of stocks which can be just making huge moves each time and it’s due to the price.

It’s really easy for them to make large percentage moves and people moves attract a lot of various kinds of traders.

You understand, even large-cap traders may occasionally see that this stock is running like 500% or something like that, and possibly get interested by it.

It attracts plenty of different people to this market.

That is why I like mean reversion on the short side, since it type of involves you.

Typically, on those days, there’s plenty of volume.

Such as you scan for stocks which can be gapping pretty large percentage.

It’s as much as you 22, 20, 30, 40, 50%, whatever you are feeling like.

Have a minimum volume criterion, because we do need volume to trade.

The gaps have an implied range.

It’s type of like you’ve gotten all the pieces a day trader needs.

You may have volume and range, and ideally, volume can also be liquidity as well.

When you’ve gotten all three things, there are opportunities, whether you scalp it, whether you trend trade it, mean revert it, and even long it.

There are many opportunities to go along this stuff too.

I would like to learn learn how to try this, but yeah, you already know, it’s super easy.

Like they only type of come to you.

You simply fall in your lap.

Rayner (01:47:41)

So, the scans are done pre-market I suppose?

Brian Lee (01:47:45)

Yeah, you possibly can scan any time between pre-market.

Some people do it the day before, but I typically scan through the pre-market and a little bit into the market open.

Some people scan all day long, which is viable, but I just don’t love always being on edge.

I discovered that there is less opportunity for me.

So yeah, I scanned pre-market.

Normally, there are plenty of different stocks up, and also you type of just do your due diligence on them.

It gives you sufficient time to construct a case, mainly see if there’s an edge, grade the stock, after which determine if you should trade it.

That is the process. You simply repeat that repeatedly.

Rayner (01:48:27)

Okay so that you scan the stocks based on the gap, huge price run-up, enough range, you then probably shortlist a listing of candidates based on how the charts appear like I suppose, and from there, inside the day, you deal with possibly the highest 5 or top 10 charts that you’ve gotten to create the watchlist for yourself for the day.

Something along those lines?

Brian Lee (01:48:46)

I’ll trade anything.

Like if there have been times in COVID, I trade like 12 stocks.

Sometime, 13 stocks.

Some days, on average, it is not liked anymore.

The quantity or the quantity of craziness died down.

It’s more like anywhere between one and 4 on average.

Normally, you will get possibly eight or anywhere between 4 and eight to 10 sorts of pings per day on average.

You may have to type of sort through that and find the very best one or two.

But sometimes there are various opportunities to trade.

So, I’m not going to say like…

I’m only going to limit it to whatever

So long as I even have buying power, I’ll trade the stocks.

Lots of times I run out of shopping for power simply because there’s an excessive amount of trade.

Rayner (01:49:35)

Also, this brings me to earlier after we talked about scalability. I feel you said 7-8 figures continues to be doable for this strategy, but 9 figures.

I feel liquidity is a problem.

I’m pondering out loud over here.

So, as an example someone has a million-dollar account.

You risk 1% on each trade, it’s $10,000.

For those who were to short small-cap stocks, $10,000 price of small-cap stocks, is it still pretty easy to enter out and in of your trades with that type of size?

Brian Lee (01:49:59)

So, in COVID, you might go very large.

You’ll be able to probably go like 100 thousand.

But as of late, the amount has dried up.

I might say 10,000 is just about on the high end, where you are experiencing some slippage.

Dependent upon your strategy.

Like if you happen to are having a wider risk and stuff like that, obviously you possibly can risk rather a lot.

You might risk 50K in case your risk is distant, right?

But if you happen to’re like being aggressive about like adding into position and also you’re also attempting to reap the benefits of like big moves, then you should fall inside not above 15-20

That is just the character of the market at this moment, but it may well get rather a lot higher, I’m sure.

Especially for the reason that overall market, just like the macro environment, is like plenty of things are doing well, plenty of assets are doing well, including like Bitcoin and things like that.

Traders are more confident or persons are more up on their investments, there are frequently more losses and there is more liquidity.

The large drop-up was incited since the bubble type of burst like after 2021.

Lots of fear and uncertainty happened with the war in Ukraine and rates of interest and things like this and plenty of investors and traders just did not have liquidity anymore.

Fewer traders, less equity, more completely satisfied people, more liquidity.

I anticipate it may well go up and that’s simply to say inside like a day trading sphere, it is not like there aren’t opportunities which have, like not infinite scale, but like a really large scale.

Like every every so often, there will probably be opportunities where you possibly can just about go to your heart’s content.

Those in my mind can be just like the A+ trades that larger traders would wait around for.

The larger the account size you’ve gotten, there will probably be opportunities for you within the area of interest.

 You simply must wait longer for the subsequent one.

I used to be just saying that 10K is type of on the high end for like on average, if you happen to’re coming day after day and like really need to push the danger.

But you already know, everyone has different risk management styles.

I do know individuals who do not have stop losses and stuff like that.

For the risk-conscious person, you are going to have some slippage and stuff like that, especially if you happen to’re attempting to add in all that is determined by their strategy.

I might say like on average, that is a reasonably good number to say.

Rayner (01:52:31)

After hearing several podcasts, I do know often you talk in regards to the R multiple.

I don’t need to go down that path, because I feel you’ve gotten beaten that to death.

You say that repeatedly. I feel you’re pretty uninterested in repeating that.

I feel for those of the listeners who’re interested by R multiple which Brian Lee is so keen about, I feel there are other podcasts and resources that you simply guys can try.

But for now, possibly I’d wish to just return to a time.

I feel there’s this interview you probably did where you talked about the way you went from 5k to one million dollars in your trading account.

Possibly could you give an summary of the whole strategy of growing the small account to seven figures and beyond?

Brian Lee (01:53:17)

I should mention I blew up my account right before that happened.

Initially, I began with 30,000 and I grew that to love 100 thousand.

I forgot the precise number, but I blew up over 100 thousand dollars and I needed to restart.

In the USA, you’ve gotten PDT, which, like, you’ve gotten to have an account over 25,000.

Once I restarted my account, mainly I began again with 30,000 and I subtracted the 25,000 from my usable capital because I consider that a blow-up if I’m going under PDT.

For those who go under PDT, you possibly can only trade thrice per week, which is way too little for a day trader.

I began with $5,000.

The foremost reason why I used to be capable of do that on the time was because, the way in which that I grew my account initially was very controlled, very stable with edge and all the pieces, this went and all that.

I blew up my accounts on account of two trades that I lost control of.

That was a results of just not having systems in place.

It was type of a slow burn because I used to be on the tail end of this.

I used to be beginning to grow my wrist to a degree where I now not accepted the risks or like I used to be having a harder time executing and I began having those bad habits, such as you add to a loser and eventually such as you win.

You are like…

“Oh, that works”

You then just keep doing it right.

It reinforces the bad habit until you already know that the tail risk exists.

So, the tail risk caught up at that time in a short time, actually.

I blew up the count.

So, I recognize that at that moment after I restarted, I used to be like…

You understand, until that time, I used to be doing all the pieces right.

I did lose control in a way.

I feel like plenty of traders learned that lesson the hard way, since it is like, you are, you are getting rewarded for destructive behavior and emotionally, psychologically,

it is very hard to not repeat that behavior.

So, what I didn’t recognize on the time was that there are methods you could protect yourself from that.

Like a broker institute of max losses and things like these systems which can be out of your control that may stop you from making those mistakes.

I reasoned that those blowups were a results of not having proper systems in place after I was losing control of my emotions and all the pieces like that.

Having instituted those corrections and trading my SIM exact process, I had plenty of confidence.

I could grow that over time.

I didn’t identical to to begin from that time.

I did grow my account already.

It’s just that I made a pair of massive mistakes.

I might say it was a type of like at an intermediate stage at that time already.

I knew what I used to be doing.

It still does take time, and even inside that journey, I still made plenty of mistakes where like…

I assumed I used to be getting the hang of it stepped out of my lane for a second and pulled back.

However the exercise of starting over is an exercise of discipline and staying in your lane.

So, I recognize that I even have to only do what I do best, cut out all of the noise.

That journey was just repeating the identical process that got me there the primary time but doing it with the utmost discipline and just not listening to anyone, anything, any recent strategies, or whatever, and compounding it.

Compounding is the massive part.

You may have to always be growing your risk to attain gains like that.

Because once you reinvest your profits into the subsequent day as your risk, you are capable of grow your account like really quickly.

I mean, plenty of those equity curve SIMS uses compounded value.

So if you happen to go on the equity curve SIM and also you plug in like every type of equity curve, a statistic line, you will see you could grow your account quite quickly.

That’s the truth if you happen to can execute it.

You understand, that was type of all my North Star.

I just knew that if I compound my account at this rate, then I’ll hit my goals.

It’s only a matter of not blowing up, not making major mistakes, and being realistic with yourself you are not going to call wish to do an ideal job of getting there.

So, I recognize like…

“Hey, look, I’ll get there, eventually. I’ll not get there as quickly because the SIM says”

But I’ll get there.

That helps you trust your process and sense of how persistently you lose and just deal with trading well because you already know that in case your risk management slips and your statistics start to attract down.

That may have a large impact in your ultimate equity curve.

So, you are identical to really focused on keeping those stats in line and optimizing them as much as you possibly can without ruining your system.

That was just type of the journey, identical to always growing my capital base and attempting to do it safely.

Like there’s rather a lot more that goes into it.

I detail plenty of that in like my content, my blog, and stuff like that.

There’s like a technique for position sizing and ensuring you do not grow too quickly, which was my fundamental mistake before wiring out capital.

I wired out like 90% of my profits. I used to be wiring out during that entire process, even after I was at 35,000-40,000.

Like I didn’t care.

That does hurt the compounding, sure.

But psychologically, that does give an amazing profit for the trader since you recognize like, you now not must live your life based on the P&L.

Like you will be good if you happen to wired out the cash.

Now the trading capital is just business capital.

You are trading as a business.

Whatever happens on this account it’s for the business, it is not for you.

That is how I view it.

That helped rather a lot with transporting my trading and attending to the subsequent level.

Rayner (01:59:31)

I would like to be respectful of your time.

We’re currently at a two-hour mark, so do you are feeling like continuing further or do you think that you are just about type of maxed out at this point?

Brian Lee (01:59:41)

Let’s go.

Rayner (01:59:42)

So yeah, earlier you talked about compounding, right?

So I just need to possibly just will let you expand a little bit more so the listeners know what you type of mean by compounding the account.

Brian Lee (01:59:54)

So, typically on the time I used to be risking 1% of my account.

So, whatever your account value for that day is, you are taking 1% of that and that will probably be your R per trade.

If you’ve gotten a green PNL on that day, you then’ll take that to the subsequent day, take a percentage of that recent value and that could possibly be a really shallow move.

It could possibly be like changing a risk from 50 to $51.

Not very much.

You might have a bigger gain and it may well go from $50-$60 or $65-70, whatever.

Mainly, like by constantly adjusting your risk per trade, and I do not need to make it sound such as you’re all the time going up, you will even go down.

For those who lose capital, you risk less.

It has a self-regulating factor to it where once you’re underperforming or the market’s not working along with your strategy, you are going to be sizing down and vice versa once you’re performing well and the market’s going great, you are sizing up.

So, through that process, you manage the position sizing conundrum by utilizing this algorithm.

Now you possibly can just deal with trading.

Like your position sizing is actually like, it will not be perfectly optimal and there are methods to optimize it, but like on a base level.

You may have plenty of things taken care of. s

We don’t need to enter those intangible numbers.

We just need to make it easy to know, but effective, like if you happen to’re going to be knowledgeable trader, you are not going to lose 100 times in a row.

Even if you happen to randomly bought and sold, you almost certainly would have an okay winning rate with Edge, you must win rather a lot greater than that.

So, without understanding you possibly can start mapping out like…

“Okay, that is my typical output, like my average winning trade, my average losing trade, my average win rate”

Then start understanding how much you must draw down per day and begin mapping out, like how persistently can draw down in a row.

Like…

“Can I max out five days in a row?”

You may have to map out mainly scenarios that you think that are outliers because outlier scenarios occur on a regular basis.

Like black swans occur on a regular basis.

So, recognizing those failure points after which constructing that into your system along with your position sizing strategy allows you to withstand some pretty antagonistic market conditions or simply terrible performances in your end.

That also gives you the arrogance to execute since you understand that every trade doesn’t have such a major impact in your trading account and trading balance and stuff like that.

But you furthermore mght understand the most important implication that if you happen to do it appropriately and also you compound it, the upside is way larger specifically once you pair that with a big risk-reward ratio.

For those who’re like one-to-one or two-to-one, like you are not going to drag ahead an excessive amount of once you win.

But if you happen to’re going like three, 4, five, six, etc. in your winners to your losers, then at any time when you win, your competitive values grow quite rapidly.

You furthermore may gain plenty of distance between, as an example…

You win one time, now you possibly can lose six times in the longer term.

I’m not saying that you should, but like without actually taking a loss.

For me, that combination of risk-reward compounding and being cognizant of the danger of break is what allows me to only grow my risk over time.

It’s extremely motivating because typically traders have issues understanding progression, but when the way in which you position size is like growing or diminishing along with your results, you understand like…

“Oh yeah, I’m here because I put on this work or I’m at a lower risk”

Because I drew down and I’m performing like crap.

It also eliminates the aspect of sizing up and sizing down.

I never understood how persons are so discretionary about sizing because they’re like, today I will risk 100, after which if I make good trades, I’ll risk a thousand tomorrow or like I’ll risk 500 tomorrow.

But they haven’t any idea in regards to the implications of the danger of break on their account.

They have not naturally built a tolerance to the danger that they were at, nor have they experienced the degrees of risk in between.

For instance…

Like if you happen to’re at 100 dollars risk and the subsequent day you select I will risk $500.

How do you already know you could execute 200, 300, $400 perfectly?

The one way you’d know is if you happen to had experienced that wish to a reasonably significant degree and so through compounding.

You experience each level pretty intimately and also you construct confidence. I even have a process called the freeze method.

Which is essentially if a risk level becomes pretty significant for you that you’ve got competent to you, mainly stop increasing your risk until you’ve got executed on that risk enough times through thick and thin through good markets, bad markets, the drawdowns wired out.

Such as you went through the gamut and also you understand psychologically, this risk affects you within the sense that you simply accept it in totality.

You’ll be able to put the danger of performing exactly to your standards from that time, then move on.

I’ve never had a problem besides way back within the day after I blew up with sizing up and I’ve sized up literally from like $30 of risk after I was down like 3000 over PDT to love $60,000 of risk per trade.

It’s just not something I ever fearful about.

The dimensions is just limited by the market you trade.

I even have to be cognizant of scale due to the liquidity.

Nonetheless, if the market was like COVID or whatever like I said…

You’ll be able to go along with like 100 thousand dollars risk, probably much more.

Like I have not ever been past that level.

It’s hard to say, but I do know that a minimum of you possibly can take an exorbitant amount of risk to where you do not even really recognize that cash as a real-life commodity.

You think that of more like points and the difference is that you simply completely accept it and you have experienced all the pieces.

So, the difference is…

If I risk $60,000 and I’m now risking $30,000.

Well, I do know learn how to trade $30,000 perfectly and I trade $40,000 perfectly. I may have no problems in any way trading that, however the moment that you simply, if you happen to ask me…

“Oh, you traded $6,000, why don’t you simply trade $120,000 next time?”

I’m pretty sure like…

“I might fuck the trade-up.”

I might scalp it. I might not cover my goal; I might not accept the danger.

That is ultimately one behavior that folks blow up on.

They all the time blow up as a matter of time.

They can not accept the danger and so they do considered one of the deadly sins of adding to losers, Let’s just freeze and let the stock go against them and hope and pray that it comes back.

You understand, ultimately, if you happen to can just type of normalize the danger in your mind and emotions and all the pieces in psychology.

Then you’ve gotten no problem with executing.

That is the foremost essential part about trading is just how consistent are you able to be.

Are you able to show up, do exactly what you want to do, and never make any mistakes?

That is all you’ve gotten to do.

Rayner (02:07:43)

Well said.

This type of jogs my memory of weightlifting within the gym.

You’ll be able to’t just go on the market and just do a 20 kilos dumbbell biceps curl.

At the beginning, you have to begin from five to 6, or seven to eight to nine.

Progressively go all the way in which up before you take care of the 20-kilo biceps curl.

Yeah, that type of hit my mind, as you were sharing that.

You mentioned in regards to the freeze limit.

Am I right to say that right away, you’re type of at a level where your risk portrait is basically determined by the liquidity of the markets?

Possibly you are feeling you could go like 50K per trade, but as you said earlier, the market currently on the high end is about 10K per trade.

You’ll be able to’t try this 50K due to the current market condition.

Brian Lee (02:08:23)

Yeah, exactly.

It’s it.

I learned that the type of the hard way because after 2021; I used to be like…

“Oh yeah, let’s just go insane. ,”

Then the liquidity dropped off rather a lot, and I used to be exploring, like pushing the bounds of liquidity, attempting to go higher and better.

I learned the hard way that like…

“You are going to get slipped on all the pieces and entries, exits. ,”

It didn’t even matter if I used to be trading thicker names, if you happen to’re trading even like Peloton or Nike or something, you possibly can still affect the worth within the short term.

It is not like you possibly can’t.

Those slippages add up, like even if you happen to start just occasionally taking 1.5 R loss, two R loss, or you are going to take a 3 R win, nevertheless it turns right into a two R win, like all of those things contribute to a technique decay.

You might have a technique that if you happen to could execute it with equity, it could work, but due to liquidity, you now not can execute it at the identical level and get the identical stats despite having performance.

Those aspects contributed to me mainly to sizing all the way down to adjust to the market.

In essence, I’m just mainly biding my time, waiting for a harder market if it’s going to ever occur.

But when not, like, you already know, it’s loads of risks for me.

I do not necessarily feel the pressure to construct anymore.

I got the ego type of beaten the hell out of me from attempting to push it when it is not the proper time.

I understand like…

“Just not the method to go”

I’m just type of grateful that I had the experience during COVID where I could type of like push it and just see what is going on on.

Because I learned a lot in regards to the dynamics of markets and the way one trader can change your trade.

Because like if it’s at a resistance point where your stop’s at and someone just panics out, in the event that they’re sufficiently big size, like everyone’s going to get taken out.

Or situations where I have been like…

“Oh, this support level looks juicy. If I just slammed it right away, I feel I could get everyone to panic and I might push the button”

Sure enough, like an enormous waterfall.

I’m like…

“Holy crap, like… I’m influencing the market”

From that time, you possibly can develop recent strategies.

People need to say that trading is such as you’re just trading against the market and it is very ambiguous and amorphous.

But if you happen to’re an even bigger trader and you possibly can move markets and you possibly can mess with people intentionally,

It’s type of like…

“You’ll be able to create strategies where you hit some offer or some bid and get everyone to panic out after which just immediately get out just like the liquidity is there”

They will panic into you.

It’s type of a scalp, but like you’ve gotten the facility to do this.

You’ll be able to create plenty of different strategies that in possibly give more edge.

I just didn’t get to explore that as much as I wanted, nevertheless it was happening now and again and I learned rather a lot about just how much influence people can have.

How much you possibly can push it responsibly and realistically; I just want to stick with my balance.

A technique that I try this is just type of the general volume, like the amount peaks, and trying to not over-represent those volume bars.

You do not need to be like 100, 200% of a volume bar because at that time you are moving the market.

Regardless, even some smaller traders presently can feel low liquidity stocks where they will push themselves.

Imagine being, you already know, like five, 6X that quantity, prefer it’s just not going to work.

My experiences just allowed me to acknowledge like…

“This will not be the time to push it and trade for the business aspect of it”

The performance aspect, be sure that you are still doing good trade for fun type of…

“Just collect whatever type of income comes at that reduced size”

It doesn’t matter.

I mean, it’s still plenty of money.

It is not an enormous deal. It’s just really if you’ve gotten that type of ambition.

Rayner (02:12:24)

So earlier you mentioned that you might start to maneuver the market and make people, for instance, trigger their stops and from what I hear is pretty lucrative.

So, what’s type of like stopping you from doing more of that style of strategy where the meta got here from?

Brian Lee (02:12:40)

I hate scalping.

I see that as a scalping behavior because normally after that many capitulations, the stock will just reverse the opposite way.

For those who feel like…

“Oh, I will trigger these stops after which the momentum will proceed”

Like plenty of times, it is very short-lived.

So ultimately you do must type of scalp those situations.

Yeah, I don’t love scalping. My average whole time on trades is like hours long.

I prefer risk-war trades.

I don’t love being an enormous force.

I remember the primary time my broker sent me an email saying…

“You are purported to register as a big trader ID with the SEC and whatever”

You may have to file an annual form and wish to tell them what your brokers are and stuff like that.

I used to be like…

“What the hell is that this?”

Like they tracking your account now?

One time my broker called me and he said…

I feel it was EdgeX or possibly it was Arco or something like that.

They were asking who this person is at your broker executing these orders.

I used to be like…

“I’m just way too visible right away and I feel like I do not understand”

Like who sees what, you already know, I’m sure that folks can see greater than that I can see.

Like I’m only a retail trader and I don’t need, I don’t need to have a dark on my back.

I much prefer to be smaller when it comes to the general trading volume in order that I can just do what I do with less stress.

I feel probably the most aggravating thing about size is just slippage.

Knowing that you will be your worst enemy someday once you cover, whether it is a win or a loss, is so frustrating.

It is also very apparent.

Like when you’ve gotten a bigger size and you are taking multiple levels of the bid or offer.

I feel prefer it’s extremely obvious.

Whether you interact with a trader or a market maker, their incentive is strictly the alternative of what you simply did.

For those who’re, and I much prefer to be like riding the wave, like if I used to be buying a big cap, I would like some larger institution to be there accumulating behind me.

I’m just taking a chunk of it.

I don’t need to be the institution that has to execute over days or even weeks or months like that to me it sounds awful because what if something random happens?

You understand, like a price shock or whatever. It is not fun.

Like I don’t love it rather a lot.

I do not.

Rayner (02:15:18)

Okay, and are there another trading strategies that you are looking into since right away the environment type of caps the scale of your trades?

Brian Lee (02:15:29)

There are still opportunities to grow inside the space, whether it’s going much broader into swing trading or taking the alternative side on the long side.

The opposite strategies I’m are cooler than my strategy.

I feel like that might be easily systematized and type of coincides rather a lot with like my foremost trading philosophy, which is like lower win rate, higher risk-reward, and holding positions.

But kind of what I spotted is that it’s higher to only type of be the very best that we do.

Like I feel like unless you should be like a tremendous, like all-star Warren Buffett type of guy, if you happen to’re doing well at what you do, you possibly can have a implausible life and shift those trading profits into investments or things of that nature.

Where it’s type of like…

You understand, I do not necessarily think that you want to trade your entire life.

You simply must make enough money such that your money works for you versus you working for the cash.

Rayner (02:16:37)

Are there any investments that you’ve gotten right away where your money’s working for you?

Brian Lee (02:16:43)

I own a few ATMs and so they generate really good passive income over time.

I could depreciate them, which was nice for taxes.

You do certain other investments, much like that where, such as you hire an operator.

So, you hire a third-party operator.

They take a percentage of it, but like they do the labor.

Like I do not have to exit and like to do this.

Those are good investments, but I mean, like really you possibly can like…

“Why not only put plenty of your…”

I don’t need to say like investment advice

But like historically, you might just put your money within the spy or something like that and it’s going to grow.

It’s type of like you do not necessarily must beat the market.

I also spend money on a hedge fund, considered one of my friend’s hedge funds.

You mentioned earlier in our pre-convention that trade buster, David.

Yeah. I spend money on his hedge fund.

To date, it is so good. I prefer it.

I also spend money on whole life insurance, which is like an alternate strategy that grows each 12 months, regardless of what, at a certain dividend rate, and so they’ve never missed a payment through like the good depression or whatever.

The advantage is you could grow your money with that dividend rate that is compounded, and you possibly can take a loan against the money value to take a position in whatever.

If as an example…

There’s a possibility, an investment, or like as an example the market crashes and I just feel like I would like to dip by this chance, you possibly can mainly take out like 95% of the money at a certain rate of interest after which invest into the chance while it also grows at the identical rate.

Because your money continues to be there invested.

So you possibly can grow your money in two different places.

It’s mainly like…

I even have a reasonably diversified type of investment strategy passively and all of them are type of on the secure side.

Like I do not put money into things that usually are not either generating money flow or simply growing pretty stable.

I’m not, I haven’t any exposure to love…

Cryptos or anything like that.

But yeah, most of my money is just in those sorts of investments.

Rayner (02:19:07)

You spoke about owning two ATMs earlier and that got me curious. How does that work?

Brian Lee (02:19:12)

Oh, not two, I own rather a lot.

Rayner (02:19:13)

Oh, so what is the business model behind owning an ATM?

Brian Lee (02:19:23)

They do these studies on where to put them strategically.

I do not think I’ll spend money on the longer term.

There is a type of money that will not be going to remain around.

I do not think so, but mainly like they find areas, like high-traffic areas where communities still use money.

You simply mainly take a percentage fee for processing the transaction.

That may be a pretty good income.

There’s one other trader who also owns ET machines. His name is Splendorous.

He was interviewed with Investors on the Ground as well.

I feel he does that legitimately himself.

I just paid a third-party operator.

But you already know, there are plenty of various things you possibly can do.

Truthfully, like, the one reason I want to go to those links is basically because I’m from California and the taxes are extremely high in some unspecified time in the future you possibly can have like a 50% tax liability.

Unless you discover like really smart investment strategies that reduce your taxable income, you are going to lose a lot.

If I lived, you already know, in a non-tax state or something like that, then I do not think I might own ATMs.

Like I’d probably put it in several investment vehicles.

Rayner (02:20:43)

Any plans to maneuver to other states where it’s more tax-favorable?

Brian Lee (02:20:47)

Nah…

I feel it is the families here and I enjoy California very much.

Just like the food is great. Nature is great, and I even have traveled throughout specifically, like I have been to Japan, and I went to Italy as well.

You could find very comparable food here. Like, very comparable.

If not, in some ways, like even higher.

I do know that is harsh to say, but like someone who enjoys food, there’s like an enormous amount of fantastic food here.

I type of appreciate the standard of life in California rather a lot.

Rayner (02:21:32)

Got it, nice.

You understand, since you’ve gotten plans, investment plans, and passive income, so is day trading something you intend to do for the remaining of your life, or eventually there will be your cutoff points?

It’s like, that is enough, I’m out of here.

Brian Lee (02:21:50)

I might, I feel I’ve slowed down rather a lot more to be willing to take off more time and I can see myself potentially automating some strategies in the longer term.

I’ve all the time built systems at the back of my mind of, like, if I did retire, that is how I might execute.

So, I do know that those can still capture the opportunities I’m in search of.

Nonetheless, like they will not capture as much.

So right away, like I feel like I’m still young grinding. I enjoy it.

I get more uninterested in it though and feel like I’m not going to trade for the remaining of my life.

Until I feel I’m just exploiting whatever I can as I can right away.

I can be I do not have to work traditionally to retirement age, I could retire young.

It is not an enormous deal.

Rayner (02:22:40)

Perhaps now you possibly can be the one sponsoring the prize money for the international competition.

Brian Lee (02:22:43)

No, I assumed, there’s one other game called Valorant that I enjoy.

Rayner (02:22:48)

Valorant… Yeah, it’s like Counter-Strike nevertheless it’s more fast-paced if I’m not flawed.

Brian Lee (02:25:50)

Yeah, their price pools are so low that I’m like…

“Dude, I could just run my tournament”

I mean, what is that this?

It’s like, I’ve considered sponsoring teams, things like that, but you already know, people thought plenty of things are in COVID and things change when the cash was not as it is not coming in as they used to.

I’m identical to, I’ll wait.

If those industries don’t earn a living. Esports doesn’t earn a living.

Lots of times they’re hemorrhaging because people don’t, and investors don’t understand the actual product.

It’s plenty of mismanagement.

You are working with young professionals who expect plenty of money.

 Also, the businesses are very greedy.

They do not reinvest the capital.

Valve was pretty good about it because they wish to increase the worth pools based on the sales of in-game products and pass it on to players.

Nonetheless, it is very top-heavy.

So even if you happen to’re not in the highest 1% of 1%, you almost certainly won’t have a living wage, and you almost certainly still be in poverty.

I feel there’s a protracted method to go when it comes to esports.

But as someone who’s competed and looked into the management side of it, it’s just not good.

You do not need you to need to stay distant from esports right away.

Rayner (02:24:14)

Yeah, so earlier, just a few more questions before we conclude.

So earlier you talked about like, you should stick it slow, then to have some like retirement trading system, right?

What’s an example of a retirement trading system?

Brian Lee (02:24:26)

Yes, the upper the timeframe confirmation signals, the upper the win rates.

So, fewer drawdowns wouldn’t compound the danger.

I might keep it at stable risk and just have it execute on probably the most ideal setups.

Like you possibly can still trade me in a version in plenty of ways.

So, there are two other ways I might say that one is named an ideal trade location, having fresh parabolic moves.

Virtually the entries that you simply get may have good risk reward and more risk.

But you possibly can still take the trades as what I call continuation, which is like if the trend is clearly, like if the trade is broken and reversing, it’s created structure already, and also you’re just joining the trend to capture like a smaller portion of that meat of the bone.

For those who capture that portion of the meat of the bone or meat of the move, then it may well be pretty consistent since the trade is already broken.

It’s just that you simply’re not going to have nearly as good of a reward.

Like I might say…

Lots of these retirement strategies can be more on the continuation side and are only not as optimized, but pretty easy to administer.

The trades already showed his cards.

It’s type of like coming into poker, where you’ve got already seen like 4 cards on the table or three cards.

And you are like…

“Okay, my hand’s pretty good”

Let’s go, you already know, place the bet.

Rayner (02:26:14)

It’s just about still the identical trading principles but you are doing it on an extended duration basis where the market has type of like reversed a little bit already before you enter the trade.

Brian Lee (02:26:25)

Yeah, after which like when it comes to all those price goal signals, stuff like that.

I might just use the conservative goal.

So, it’s something that will hit more often than not.

That way you simply stop our goal, that is it.

Rayner (02:26:40)

Before you go, I just have one query for you here.

What’s one piece of recommendation you’d give to your 20-year-old self if you happen to could see him in front of you today?

Brian Lee (02:26:53)

Oh, my 20-year-old self.

I might say that…

Get into trading ASAP or if you happen to don’t imagine me, because I’m an apparition from the longer term. For those who were going to compete in Dota, still.

All the time stay true to the concept that you want to have a technique.

Don’t wing it, think all the pieces through, come into each game with a plan that you simply’re confident in, and that you simply put within the work.

Don’t adapt a lot to your opponents, but play your personal game and be sure that that you simply discipline everybody to follow your idea.

In hindsight, it was not very helpful to be influenced by so many individuals, and this also applies to trading.

I feel like if you’ve gotten the mind for like strategy and things like that, and I’m not even really like good at strategy normally, but again, I just work pretty hard at what I do.

So so long as you place within the work and also you’re confident within the work and energy that you simply put in and you’re feeling like that is reasonable.

I feel you must just hard commit to what you should do because, on the very least, you take control of variables you could’t control.

Let your opponents make mistakes.

Just be the very best at what you do.

That is all you want to do to succeed, I feel.

Rayner (02:28:30)

Nice, awesome.

Thanks a lot, Brian.

I enjoyed this conversation with you here today.

We discuss e-sports.

You give me insights into what competitive gaming is like, something that I even have never achieved anywhere near your level of accomplishment.

You explained to me step-by-step your trading methodology in a really systematic way.

Thanks, I appreciate your time and I’m so completely satisfied to find a way to talk with you today.

Thanks, Brian.

Brian Lee (02:28:54)

Yeah, anytime. Thanks.