March 2023 - Trade The Pool - Stock Trading Prop Firm

Because of TTP Risk Management I’m Now A $160K Funded Trader

Posted on March 28, 2023June 30, 2024 by Tomer Dubrov

“Low your position size on trades where you are not extremely confident in,” That’s Danny’s Advice.

Danny G, 50 years old, From the US.

Danny has successfully passed our Extra Buying Power program and is now one of TTP’s funded traders, or as we call it, “Stock Star.”

Every time he reaches 5 consecutive winning days, we will boost his buying power and max exposure.

We spoke with Danny about his trading plan, insights, and lessons gained while trading in the markets and our platform as a funded trader.

Watch The Interview With Danny

Tell us a little bit about yourself

Married w 2 kids. Grew up with the idea that I always wanted to be self-employed. After starting many small businesses, I found trading. The idea of being able to master a high-income skill and make this my business is what drives me. To be able to run a home-based business with unlimited income potential with no overhead, employees, inventory, etc. I enjoy water sports and golfing. I would love to be able to share this high-income skill with as many people as possible, especially my friends, family, and children.

How long have you been trading?

I have been studying for 4 to 10 hours per day for the past 14 months. This includes courses, reading, podcasts, and screen time. I am a scalper.

Briefly describe your Trading Plan and how it contributes to your success.

My trading plan incorporates the structure of the chart as the most important foundation. Demand and supply zones and key levels. I am looking at channels, ranges, and market equilibrium.I have a strategy for ranges, channels, and trends.

Share with us a challenge you faced in your trading career and how you overcame it

My biggest challenge has been risk management. I love your platform as it has fixed rules in place to close trades when a trade loss limit is reached and also when daily loss limits are reached. In my opinion, the 2 biggest rules that cause traders to lose and blow accounts are.

How did you adjust risk management to your trading personality?

I am continually improving on closing positions faster when the trade goes against me—allowing me to focus on the next trade, which may be on the same setup if still valid.

Describe a key moment in your trading career

My biggest moments were when I blew up an account. The drive inside me knows that as long as I never quit, I will become a master day trader.Another key moment has been meeting my 2 mentors Navin from Urban forex and the GOAT Eric from Spy Day Trading, who regularly has 7 figure days trading SPY. Navin taught me my foundation. The logic of trading, The concept of the Big Boys, buyers/sellers territoryEric teaches me structure, equilibrium, and how big boys and professional traders never lose money trading… they use various options strategies and hedging to protect themselves.

How long did it take for you to become a consistent trader, and what aspects did you change for that?

It took me 1 year.

What is your mental/psychological strength, and how did you develop it

Aggression. As a former poker player, I learned not to focus on the dollar amount but to recognize when the odds are in my favor and when to step on the gas, which is why I am a scalper. Aggressive traders can not go for home runs. They must get in and out as structure demands. Risk vs. reward. I have been developing since I was in elementary school, selling candy door to door, then watching my father as a small business owner, then the biggest is failing over and over.

What was your strategy for successfully passing the evaluation phase?

In 1 word structure. If I am not mistaken, the days after the bank collapse offered a great opportunity for a retracement trade, as this type of news generally is an overreaction. By observing structure, and levels, I was able to be ready by watching the structure develop and price action to find its support level.

How is trading for Trade The Pool different from trading by yourself?

The biggest is that your service has the capital and the strict risk management rules in place that are not moveable. They require the trader to ahere to the rules. I believe if each trader who is by themselves had these rules in place without the ability to move stop loss or daily losses, there would be so many more successful traders.

What would you recommend to someone who is just starting with us?

I absolutely would recommend traders to your service. However, I believe they must 1st learn the logic of trading and structure, ranges, and equilibrium.

Share online resources that were/are significant in your trading development. Names and links are appreciated

Navin @ Urban Forex and Eric @ Spy Day Trading. Both on Youtube

Would you like to share anything else with us?

Thank you, TTP.

A Trader’s Life Podcast with Nicholas Penrake and Michael Katz

Posted on March 9, 2023 by Ophira Top

In this episode of “A Trader’s Life” podcast, the host – Nicholas Penrake interviews Michael Katz, a day trader from Israel who has been trading stocks and futures for 15 years. Katz is also the CEO of ‘Trade the Pool’, a prop firm for stock traders, based in Israel.

Listen to the poscast

The Beginning

Michael explains how he got interested in trading, when his back-then-girlfriend introduced him to the book “Rich Dad Poor Dad” by Robert Kiyosaki, which helped him understand the stock market. Katz was also a gamer when he was younger, which he thinks helped him with trading as he was able to apply the skills he learned from gaming to the financial market. He explains that he only day trades and looks at one-minute charts, as he enjoys the feeling of watching the chart move in real-time and making quick decisions. Katz advises new traders not to trade on their own money and to detach their emotions from their trades, as this can lead to bad decisions. He also shares some tips on how to control stress, such as trading with other people’s money or starting small.

The Big loss

Michael also tells Nicholas about a time when he lost $10K in a trade and had to take a break for two weeks to reflect on what went wrong both mentally and technically. He learned that he needed to be tighter with his risk management and became more disciplined in his trading strategy. He used to trade stocks without focusing on a specific sector but rather trading what moves at the moment based on news and volume. They source his news from the trading platform he uses or the trader pool. Nowadays, he is doing more scalping and holding his positions for about 20-30 minutes. Michael also trades with leverage, up to 1:100 or 1:50, using the trading pool.

Main Setups

Next, Nicholas heard about the two main setups Michael uses for scalping: opening drive, where he shorts stocks when it drops below the first support level, and reverse setups, where he buys a stock after it reaches a major support level. He also uses two indicators: MACD to find negative or positive divergences, and the 200 and 420 exponential moving averages (EMAs) to identify support and resistance levels. Michael explains how he tried different indicators before settling on their current choice. He used to trade four or five stocks simultaneously using a software that connects to his Interactive Broker account to manage trades, but he now focuses on running his professional firm, and only makes one or two trades per session.

Algo Trading

Referring to his experience with algorithmic trading, Michael tells how he developed a system with a friend that worked well on a demo but resulted in losses when they used real money. While he has a mathematical background and can code, he has not pursued systematic trading further because much of his trading involves managing trades, which is difficult for a computer to execute.

Emotional Trading

He describes his approach to risk management and adding to positions, scaling his position and not risking more than they can afford to lose. He notes that fear was one of the most common problems he faced when he started trading, specifically the fear of losing money. He also discusses his impulsive tendencies and the fear of missing out, which led to exiting trades too early and not maximizing potential profits. Michael learned to reduce his risk and to wait for indicators before adding to positions, rather than chasing after a trade.

Conclusion

Overall, Michael’s approach to trading involves managing risk and being patient with trades, rather than relying solely on algorithms.

CPI & PCE – Which one is “the one”?

Posted on March 7, 2023October 10, 2023 by Ophira Top

Introduction

Amongst others, the two most commonly used methods to calculate inflation are the CPI and the PCE. Although different from each other, both methods consist in periodically comparing prices within a certain sample group of products and services.
Whilst a yearly price increase (inflation) of 2% is considered ideal, a decrease in prices (deflation) is seldom seen as a positive sign for the economy.
In this article, we aim to examine CPI and PCEPI a little further and to find out why, while the Government looks at one, the FED chooses to look at the other.

Measuring inflation: weight and scope

Both the CPI (Consumer Price Index) and the PCE (Personal Consumption Expenditure) attempt to estimate inflation levels by comparing prices in a basket of goods and services purchased by the urban population (which in the US is equal to just over 80% of citizens), over a period of time.

As a trader and a market participant, you may have realized that, despite the common objective, the BLS (Bureau of Labour Statistics)’s CPI and the BEA (Bureau of Economic Analysis)’s PCE produce inflation level estimates that can differ and, sometimes, can do so significantly.
This is due to the fact that CPI and PCE are calculated in different ways, especially concerning weight and scope.

As the BLS itself explains on its own website:
“The weight effect is a result of differences in how consumer expenditure data are sourced. CPI sources data from consumers, while PCE sources from businesses. The scope effect is a result of the different types of expenditures CPI and PCE track. For example, CPI only tracks out-of-pocket consumer medical expenditures, but PCE also tracks expenditures made for consumers, thus including employer contributions. The implications of these differences are considerable. Many contracts and government programs are tied to inflation, from rental agreements to social security”.

It’s a little confusing at first so here is what it all means:

When monitoring the prices of goods and services within the basket, the Bureau of Labour Statistics sources its information from the consumers. The BLS – as they put it – monitors, and records the price of around 80,000 items every month “representing a scientifically selected sample of the price paid by consumers of goods and services purchased.

On the other hand, the Bureau of Economic Analysis sources its information directly from businesses. Furthermore, when calculating the PCE, the BEA also takes into consideration aspects that play no part in CPI calculations such as income, taxation, and disposable income.
This makes PCE more able to reflect changes in sales, alternative product purchases, and price increases also in relation to disposable income.
CPI and PCEPI also differ in terms of weight – the “importance” of the price of a single product compared to the rest. For example, an increase in the price of milk has more impact on the whole inflation estimate than an increase in shoe prices because the standard consumer would buy milk more often than he buys shoes.

It must also be noted that historically, the goods and services in the CPI baskets were only adjusted every two years which made it less accurate and reliable. However, as of January 2022, the CPI basket is updated yearly.

So, PCI or PCE? Which of these does the FED look at as the true American inflation estimates?

Until the year 2000 both the Fed and the Government referred to the Consumer Price Index as the best estimate of national inflation (or deflation).
The Government still does so these days. It takes into consideration CPI figures when making or changing economic policies such as adjustments to social security.
At the start of the new millennium, however, the FOMC voted in favor of the adoption of the PCE as their new source of inflation estimate. The Fed focuses on PCE when making its quarterly projections, when taking measures to limit inflation, and when setting inflation targets.
Despite the initial controversy, the reason for the FOMC decision in 2000, was explained by the FED itself as follows:
“After extensive analysis, [the FED] changed to PCE inflation for three main reasons: The expenditure weights in the PCE can change as people substitute away from some goods and services toward others, the PCE includes more comprehensive coverage of goods and services, and historical PCE data can be revised”.

Well then, there we have it. CPI and PCE announcements are both extremely important for the Government, for the FED, for the economy and, of course, for the market and for you as a trader. Make sure to mark those dates on your calendar.

Read and learn more about the fundamentals on our blog