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3x World Trading Champion reveals his Trading Strategy - Jan Smolen — Transcript

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0:00In this episode of war class edge,
0:01you'll not just meet a trader. Jan
0:03Smolen was a chess master with 2,400
0:07FIDE Elo. That means being in the top
0:090.001%
0:11of chess players worldwide. He was also
0:13a high stakes poker player. His brain is
0:16wired to look for probabilities,
0:18tactics, and strategy. And his trading
0:21success reflects exactly this. Three
0:24times joining the World Trading
0:25Championships, three times at the first
0:27[music] place. 113% for two years in a
0:30row and more than 200% in its best year.
0:33And after spending years in the
0:34professional space and trading for a
0:36macro hedge fund in Switzerland, in this
0:39interview he'll share the exact
0:40blueprint to use macroeconomics and
0:43fundamental [music] sentiment to find
0:44extremely high probability trade ideas.
0:47And what are the absolute best setups
0:50where markets are forced to make [music]
0:52you money. Ladies and gentlemen, Jan
0:53Smolen.
0:57What do you think
0:59traders don't get
1:01about macroeconomics and why do so many
1:04people just
1:06ignore it?
1:07>> They do.
1:08Do most [clears throat] retail traders
1:09even understand something about
1:11macroeconomics? That's That's the
1:12question.
1:13>> That's the real question.
1:14>> It's It's It's not the the question of
1:15what they don't understand, like which
1:17part they do understand because
1:19obviously like macroeconomics is like
1:22it's really really hard thing to to
1:24understand in general. Like it's
1:26I was teaching macroeconomics myself and
1:28this is like really really hard
1:31for me to understand and I'm not even
1:32sure that the many things they teach
1:35even in the university if they are
1:36correct or not. So, it's kind of
1:39uh it's a very very extremely
1:41complicated subject in general.
1:43And
1:44particularly for people for example who
1:46didn't study it or even who for people
1:48who did study it but like didn't get
1:51really involved
1:53it's like almost impossible to
1:54understand anything about it. And
1:57in particular, again,
1:59in relation to trading, like I would I
2:00would totally like divide two things.
2:04And there is the macroeconomics, and
2:06there is the macro, which is related to
2:08trading. That's again, like what they
2:09teach you in the university, what's
2:10written in the books. And there's almost
2:13almost no application, right? So, you
2:14have basically you have to like if you
2:16want to to use some of this stuff, I
2:18think it's very much possible to use it.
2:20But you like
2:22you basically you need to forget more or
2:24less what you what you what you learned
2:26in the book, most of it, and you just
2:28need to totally recreate your knowledge.
2:31So.
2:32So, yeah. So, and what So, you asked
2:35what they understand about macro?
2:36>> I mean,
2:37let me let me rephrase let me rephrase
2:39the question so that
2:41it's it matters to the people who view
2:44this video because most of them are
2:45technical traders, traders who have not
2:49gotten in touch so much with with not
2:52just macroeconomics as a as a as a as a
2:53topic, but like like your approach
2:55specifically with macro and sentiment
2:57and fundamentals. Why do you think it's
3:00a missing piece that could be valuable
3:02for them?
3:03>> Yeah, so I think if they if they watched
3:05my masterclass, I think there are some
3:07things which are real Of course, they
3:09it's not going to make you a great
3:10fundamental trader, but there are some
3:12concepts
3:14which Yeah, it's a little bit of a
3:16mystery why why the people don't
3:18understand at least these simple
3:20concepts about it, which they could
3:22understand, which is like not that
3:23complicated. But
3:25yeah, maybe since
3:28since like not many people even even
3:33on the retail sides of things, at least.
3:35Obviously, like more experienced traders
3:37and more and more famous traders
3:39obviously use this stuff. But on the
3:41retail stuff retail side of things, like
3:43not many people even use it. So, there's
3:46like
3:47nowhere too much to learn. Yeah, they
3:48basically there's a lot of group
3:49thinking, so they're posting this stuff
3:51about the Fed meetings, which is totally
3:54outrageous.
3:55And uh and like every- everybody's
3:58everybody's posted that. Even even the
4:00people who are good in trading like
4:02that's that's kind of
4:03uh funny funny part about it that like I
4:06respect these traders. I I think they're
4:07good traders, but still they're posting
4:09like really
4:10really stupid [ __ ] about it. So
4:12So yes, so there is like
4:14not too many places to learn. Like there
4:16are some people here and there who
4:18understand some stuff, but there's like
4:20for every one person who understands
4:22something there are like 10,000 of
4:23people who don't understand anything.
4:25And and yeah, they probably like they
4:28don't even try too much to to use it in
4:31their trading. So they So they they
4:34maybe they post this kind of like stupid
4:36stuff, but it's not even too crucial for
4:38them. They're just like kind of, you
4:39know, they're just bullshitting more or
4:40less.
4:41And they don't even care that they were
4:42wrong and they don't even like somehow
4:44try to think about it afterwards that
4:46like okay, I was probably
4:48uh didn't have to say this. And they
4:50like uh
4:52They like say this stuff like again and
4:54again and again and obviously they can
4:56be proven wrong, but doesn't prevent
4:58them to to try to guess.
5:00For example, the the Fed beat direction
5:03the next time and
5:04and be wrong again like like
5:06>> Yeah. And so what do you think is the
5:10Why should one
5:11for example, as a day trader even or or
5:13or a trader in general get deeper into
5:16this? What's the What's the key
5:17benefits?
5:18>> what we mentioned already. Like yeah in
5:20in trading if somebody is everybody's
5:22doing this there's not too much value in
5:24this. For for example, all the traders I
5:27know less experienced trader, every one
5:28of them is starting for with technical
5:30analysis because it's the easiest one to
5:32understand and obviously is the
5:34the one where is the least value in it
5:36because like everybody is using it. All
5:38the like particularly on the retail side
5:41again. And uh
5:42like
5:43yeah, it's everybody's learning the same
5:45chart setup with which is the easiest
5:47for the experienced
5:49traders or for the algos or for the AI
5:51to kill.
5:53You're not going to have like too much
5:54success with it. So, so if you want to
5:58have success in trading, you need to
5:59learn stuff which is
6:01more complicated or at least even if
6:04it's not like because
6:05I wouldn't say that
6:07that the fundamental stuff I'm using is
6:09too much complicated, but at least this
6:12is is not the stuff which like every guy
6:14is using in the market.
6:16Mhm. So, it
6:18if you want a one reason, that's the one
6:19reason I would I would emphasize is like
6:22is a good stuff because
6:23of on the retail side almost nobody is
6:25using.
6:28>> And do you think that
6:31um
6:32is it useful
6:34for retail
6:36day traders specifically? Cuz a lot of
6:39people now are focusing specifically
6:40like on one time frame, one asset. But I
6:42think the cool thing about global macro
6:44and and macro percentiment in general is
6:46understanding also the the big flow of
6:48money, right? So, in your experience,
6:50you you also day trade with with
6:53you know, a macro background. Do you
6:55think it can be useful for example for,
6:57you know, understanding the overall
6:58direction of a market and then
7:00exploiting it also in an intraday
7:02fashion?
7:03>> So, so for me is the most useful on
7:06couple of days basis. So, let's say
7:09uh three, four days, maybe two days.
7:12Like this kind of this kind of frame.
7:15Uh
7:16on the intraday a bit less so. On the
7:20like even longer than three days, also
7:22less so because like it is changing all
7:24the time. So, like you need to be on the
7:26lookout for changes.
7:28So, yeah. So, like three days let's say
7:31the average three days would be
7:33would be the time frame where I think
7:36it's most most useful.
7:37On the intraday, yeah, sometimes
7:39sometimes you can trade. For sure you
7:40can trade the intraday setup sometimes
7:42on the news, fading the news sometimes,
7:44So, going with the news.
7:46So, so for example, for me like the
7:50intraday, very very good intraday setup.
7:54Uh
7:55was I mentioned in my master class,
7:57Waller speech which which happened this
7:59Thursday, which was I think very
8:01important for the market and the market,
8:03I think, was starting to lean in
8:05hawkish, so more bearish
8:07uh in the medium term. And this is This
8:11was something which moved the market
8:12very much in the opposite side. And it
8:14was also
8:16kind of the news which is not that much
8:18followed by the market. So, so this
8:20Waller speech is kind of less uh
8:23uh less followed and it took some time
8:25for the for the people to digest it like
8:27what actually happened because like he
8:29was talking something he's not even the
8:31Fed chair. Like if he was the was the
8:33Fed chair, like it would be
8:35it would be more followed, but he's he
8:37isn't. He's just the like one of the
8:39participants on one of the participants
8:41on the Fed meeting.
8:42Even though I would consider maybe him
8:44to be even more important to than
8:46Waller, but like like at least an
8:48important one, yeah. So, it was a little
8:50bit like not not not such a followed
8:53news
8:55as you normally get. And so market
8:56didn't move immediately on that. Market
8:58was kind of digesting, kind of moving a
9:00little bit up, then moving moving a
9:02little bit down again. And by following
9:03this news and maybe understanding it a
9:05little bit better than the general
9:06market, I could get out of my my short
9:10position, basically hedge my short
9:12position. I could I had the like
9:14enough time for it, for sure. I had like
9:16half an hour, hour for this.
9:18Uh
9:19even posting on on uh
9:22on uh
9:23X about it that probably I was wrong
9:25because I was certainly expecting him to
9:27be hawkish and he was hawkish before and
9:29then I didn't see any reason for him to
9:31change in to change his stance, which he
9:33did.
9:34Uh
9:34and uh and yeah, so if you want the an
9:37example of I think a very good uh
9:40intraday use of the macro setup like
9:42this was this. And I hedged my position
9:44only basically on for that day alone
9:47because I'm still
9:49still still holding my bearish news
9:51bearish views on the market, but for
9:53this particular date I I
9:55they I certainly wasn't bearish. So, at
9:58least like I I didn't go too much
10:00bullish, but like at least didn't want
10:01to to be on the bearish side which which
10:03proved to be very much correct because
10:05like
10:06the market went up of more than 1%. So,
10:09this is this was for example the
10:11intraday use. But as I'm saying like
10:13mostly these are more like a couple of
10:15days setups.
10:16>> Yeah.
10:16>> Which is more
10:18>> I I remember because the
10:21the first time we recorded a masterclass
10:22with you uh I think by then the main
10:25theme of the market was inflation and
10:27CPI. And and and you basically shared us
10:30share with us some ideas on how to trade
10:32the CPI release uh if there was for
10:35example a very high surprise on that
10:37data. How So, do you think that cuz
10:40there's this rule of thumb which is in
10:43you know, I would like to hear your
10:44opinion on that between retails that
10:46ignore macroeconomics or ignore
10:48fundamentals that you should not trade
10:50during news days.
10:51What's your stance on that and how do
10:53you instead select the right news to
10:55follow?
10:56>> Yeah, so for me it's certainly the news
10:58are still the like
11:01as a as a macro trader
11:02I still like the the news the most. But
11:06uh
11:06maybe I'm a bit less compared to the
11:08last interview we had. I maybe a bit
11:11less
11:12concerned with the news itself and more
11:15about how the market behaves before the
11:17news and after the news and what's the
11:19general kind of
11:21uh flows and stuff like that before
11:23because before the news like usually you
11:25have some hedging.
11:27Uh people are a bit nervous, so they
11:29hedge. So, usually before the news, many
11:32times
11:34many times
11:36uh you get negative price action, then
11:38on the
11:39day day of the news itself, these are
11:41very bullish days usually because like
11:44the hedges go off. Uh
11:46in the pre-market before the news, the
11:48market gets little bit more bullish
11:49usually.
11:50>> Mhm.
11:50>> And after the news also like in many
11:53cases you get also bullish reaction. So
11:55So yeah, so like
11:57maybe maybe that time I was more talking
12:00about yeah, trading the news itself.
12:02This time I'm like changed my trading
12:04more to the force around it.
12:07Because I think the market became more
12:10tricky in the last last few years. The
12:13>> What do you mean?
12:13>> The the many times you don't get as
12:16straightforward reaction as you had
12:18before, and this is not only with the
12:19news. Also with the many many other
12:22setups. It's just like it's just tricks
12:24you many times many many times you just
12:26Before I was also in my master class at
12:29I was talking about these traps all the
12:31time, and yeah, I think So before the
12:34traps were normal, but now the market
12:35doesn't even move
12:37without setting a trap. So like Say Say
12:41Trading the news itself, I think is much
12:43harder than it was before, but still
12:45like if you if you
12:48take it on a little bit just a little
12:50bit longer time frame, a couple of days,
12:53I think it's still good. But let's see
12:55let's see how it's going going forward.
12:57Like I still I'm adjusting my trading
13:00time, so maybe like in 2 years I'm
13:02again will tell something else about it.
13:05Maybe I will need to adjust again.
13:08>> Um
13:10You mentioned something that I would
13:11like to touch on, which is the whole
13:14how markets are kind of evolving.
13:18And there's the whole theme of AI and
13:20how you know, algorithms are now big
13:22participation of the market. But even
13:24before we get into that, bef- even
13:26before the argument that AI will make
13:28everything even more efficient, even
13:30before all of this.
13:33What do you think about
13:35this argument where
13:39there's already participants that are
13:41way more informed than us on every
13:43fundamental perspective and markets are
13:45extremely efficient already. So it's
13:48hard or almost useless to look for an
13:51edge with publicly available information
13:54such as macroeconomics because markets
13:56are super efficient. Or do you think
13:58like what's your position on this? Or
13:59you think there's still some some space
14:01for retail traders to find an edge?
14:02>> Uh well, I I'm not sure how to define
14:04efficient even like I wouldn't uh I
14:07would maybe
14:10I would say that markets are much more
14:12about flows and about the some kind of
14:14yeah, about flows and setting the traps
14:16and stuff like this like to for example
14:19for example is market efficient when
14:20it's when it's setting trap like is is
14:22obviously setting trap is just once you
14:24just move it's in one direction. I think
14:26like
14:27that's my opinion. Maybe somebody could
14:29have another opinion. Maybe could even
14:31persuade me that I'm wrong about it. But
14:33some movements in the market I think
14:35they're just totally just about like
14:37setting the the trap for the traders. So
14:39is market efficient at the time when
14:40it's setting the trap? Like
14:43maybe from some perspective it is
14:45efficient, but like
14:47from the other is just is just moving
14:49the price opposite of what is thinking
14:53itself just to set the the trap for the
14:55people or just to just to stop
14:57stop the stop losses.
14:59>> Mhm. Yeah.
14:59>> Just to stop people out before it moves.
15:01So basically if you can
15:04if you are one step ahead and you are
15:06managed to expect this that this market
15:09is probably going to do this or
15:11or
15:12uh
15:14or at least when it's already done it to
15:17recognize that this is what happened.
15:19Yeah? So you I I this can be basically
15:21you can use this. Yeah, maybe for for
15:24most of the people they're going to get
15:25like stopped out there. They're getting
15:27They're getting like for them
15:29this might be a problem, but if you are
15:31able to to spot these instances
15:33>> Mhm.
15:35>> you are able to to use it. You Other
15:37things is like you get the flows of the
15:39market.
15:40Again, like if for example
15:43is there periods of the year when the
15:45companies are doing buybacks.
15:47And there periods of the year when
15:49they're not doing buybacks. So basically
15:50they are buying their own shares at the
15:52time, yeah? Is the market efficient?
15:54Like now nothing fundamentally changed
15:56about the company during the time when
15:57they are doing the buybacks. It's just
15:59the basically the the these are just the
16:01flows which are coming to the market.
16:02The company didn't get better
16:04when they are doing the buybacks, yeah?
16:06So basically if you understand, okay,
16:07this is the time when they are doing the
16:09buybacks and this may not Of course, you
16:10are not going to trade just only on
16:12that, but if you like just put it
16:16inside your whole analysis and there are
16:18also the buybacks are happening here.
16:20Yeah, it's the time when you want to be
16:22more bullish, for example. Okay, again,
16:24is it efficient that the you know
16:26like from some perspective it is, but
16:28like nothing fundamentally changed about
16:30the company during the time.
16:32And there are the other times when the
16:33companies are doing
16:35>> Yeah.
16:35>> Also, is it so much efficient that they
16:37are doing the hedging [clears throat]
16:39during the time when when more or less
16:42everybody knew knows that after the
16:44event the
16:46the the hedges are going to be released
16:48and they are going to go up like not
16:50100% but 80% of the time and they are
16:52still doing hedging for this event even
16:54though
16:55like rationally it's not it's not very
16:57rational because like rationally they
16:59are going to go up after the event after
17:01the event, yeah? So like is it so much
17:03efficient like
17:04I I wouldn't like Yeah, in some sense it
17:07is. It is logical at least.
17:09Like
17:10many many of these moves are really
17:11logical, but
17:13I personally wouldn't wouldn't call them
17:15that efficient. From some some sort of
17:17perspective, you could certainly call
17:18them efficient, but like there is still
17:20like a lot of a lot of stuff you can use
17:24and even a lot of stuff which is not so
17:26easy for algos to to basically to kill
17:29this edge because like
17:31particularly if you're trading on not on
17:33the intraday basis, but on the like as I
17:35said like a three five day or maybe even
17:38longer time basis,
17:40you know, this is not so easy because
17:43yeah, like how how are they going to do
17:45it?
17:45Like it's hard for them to manipulate
17:47the price for for the longer periods.
17:49Like they can do it in the short term,
17:50but for the longer periods, it's not
17:52easy to do it.
17:53>> Mhm.
17:54>> And and these falls are there, yeah,
17:56like
17:57>> Yeah, because this is of course a
17:59provocative question because I've I've
18:01heard it very often from let's say
18:04people who are more in the investing
18:05world and they invest long term and they
18:07believe in the fact that every news is
18:10priced in immediately and you know, it's
18:12there's no way to get an edge and you
18:14know, and the markets are perfectly
18:16embedding in price all the information
18:18available.
18:19And you know, it's that that's why they
18:20it's the so-called efficient market
18:22hypothesis, but then you know, as as I
18:24studied macroeconomics with you, I
18:26realized
18:27with
18:28the flows you're mentioning, right? It's
18:30it's not one flow and then price stays
18:32there. It's like a drift that lasts for
18:34months and months and months. And one of
18:37the things that
18:39you mentioned also in the masterclass
18:41um is
18:43one of the that causes this long drifts,
18:45also potentially super long trends is
18:47the the whole macroeconomic cycles.
18:50Can you summarize for us a
18:52blueprint to understand
18:54what could happen from a monetary
18:56perspective and how that typically
18:58affects the market to find trade ideas?
19:02>> Okay, so
19:04uh
19:05so there is a a lot to
19:08to this question to cover. So like from
19:10the very simple perspective, like
19:12obviously liquidity is very good for the
19:14markets.
19:15Liquidity is tied to many things, like
19:18not only to the interest rates,
19:20but interest rates is some part of it.
19:24So So yeah, so for example last time
19:28when liquidity was very much withdrawn
19:31from the markets
19:32was
19:33after COVID. So during the COVID a lot
19:35of liquidity came to the market and then
19:38we got the inflation worries and the
19:41liquidity was very much withdrawn. So
19:43that's that's why after the COVID
19:46period, for example, many people were
19:48believing that this is the end of the
19:49world and they were like still
19:51everything was shut in.
19:53All like many it was a real problem for
19:55many many businesses, particularly small
19:57businesses and stuff and like many many
20:00people, even the experienced ones, saw
20:02that this is going to be like a real
20:04real really bad for the economy and like
20:07we are going to get another financial
20:08crisis and stuff like that. But it was
20:11accompanied by the huge liquidity from
20:13the Fed and basically the the Fed
20:15stopped the whole crisis by the huge
20:19liquidity injection into the markets and
20:21like okay, everything was like
20:25like the businesses they get they
20:29get it bankrupt, yeah, like the economy
20:31was still in the problems, but this Fed
20:34liquidity basically
20:35>> Saved the market.
20:36>> Basically no, it didn't it didn't it
20:39didn't save many businesses, but but it
20:42it saved the markets at least. Like S&P
20:44500 like for example for the Russell it
20:46was much more of a problem because with
20:48these small companies which were getting
20:50bankrupt, yeah, it was a real problem,
20:52but for the S&P 500 which go to like
20:55had
20:56which is consists of 500 largest
20:58companies, they most of them maybe all
21:01of them
21:02they are not getting bankrupt and like
21:04liquidity meant that we went up like
21:06crazy.
21:07>> Mhm.
21:07>> Then the opposite happened in uh 2022.
21:11So, we started to have the inflation
21:12worries and the Fed
21:15particularly because of the injection
21:18your liquidity injection during COVID.
21:21>> Yeah.
21:22>> So, we started to have the
21:24the worries
21:27about inflation and to what Fed did it
21:30started to increase the interest rates
21:32and obviously this was the
21:34only prolonged
21:37negative price action in the equity
21:39markets we had in the last 12 years.
21:42Yeah, we had
21:43never had this. We had some crashes and
21:45stuff like that but this were short-term
21:47events. Yeah, many crashes but the only
21:50like prolonged negative price action on
21:52the market really like really like
21:55unpleasant for the traders because for
21:56days particularly with with low
21:58liquidity yeah, also the people like the
22:01VIX traders were totally like the
22:03volatility traders were were totally
22:05killed on the time
22:06during the time because like
22:08many people hedge with the volatility.
22:10>> Yeah.
22:10>> And and this was the very very
22:13unpleasant time
22:15on the market because the price action
22:17went down and the people who were own
22:19who owned options and who owned uh
22:23VIX calls were were were getting killed
22:26as well. So, so for people the like the
22:29the negative like the the market crashes
22:32usually is much much less uh
22:34unpleasant than this kind of negative
22:37slow everyday down price action we got
22:41in 2022-2023.
22:43And we got this like you know, it
22:45coincides exactly with
22:47with the period when the Fed was writing
22:50rising rates and withdrawing
22:53liquidity from the market. So, if you
22:54understand macroeconomics you could
22:56understand that like okay, this thing I
22:59probably need to trade in a different
23:00way than I'm used to, yeah? And people
23:02obviously were used to something
23:04completely different, like for many,
23:06many years we didn't have such setup and
23:08now again for a couple of years we
23:10didn't have anything like this.
23:11>> Yeah.
23:11>> So, yeah, so so this is just just one
23:14one example one example, but you can use
23:16it in many, many different ways. So,
23:17it's it's obviously you could talk for
23:20hours about it.
23:20>> Yeah.
23:21Yeah, and we have the master class for
23:22that. So, I don't want to over repeat
23:24what we did today cuz we it was an
23:25intense day already. But if you had to
23:26summarize, let's say the three the three
23:28best like
23:30most obvious trades in a cycle in a in a
23:34hiking cycle or or
23:35let's say monetary cycle. The
23:38one or two or the three best trades that
23:39you say like it's it's it's going to
23:40happen, I don't want to say 100% but
23:4290%.
23:43>> So, I think the the market which is most
23:46mostly influenced by the by the cycle of
23:48the Fed is certainly gold.
23:49>> Mhm.
23:50>> Because with the with the indices is
23:52kind of is is kind of more
23:55complicated in a way that they're
23:56impacted but by much more than the
23:59interest rate. So, that's sometimes the
24:00growth is so high that even with the
24:02rise in interest rates like it's not so
24:04bad for the for the equities. But gold I
24:06think is really like the the trade which
24:08is
24:09very much impacted by the
24:11>> Mhm.
24:12>> by the interest rates. And yeah, like
24:14probably every trade if we are talking
24:16about the easiest trades and like most
24:19obvious trades
24:20in the
24:21with the interest rates, I would say
24:23this this would be the the gold trades.
24:25And in particular like before the hiking
24:27cycle, gold gold usually down. It
24:30happened again just now, yeah? Like if
24:31you if you notice what gold did first
24:34starting from January.
24:35>> Yeah, yeah, yeah.
24:35>> After the huge run like it didn't happen
24:37before and before, yeah? Like so let's
24:39say
24:42uh
24:43this is the short hiking cycle which I
24:47personally do observe and before every
24:49one of them gold went down. So, at least
24:52like
24:53exit your gold long position. So, like
24:54you don't have necessarily to go short,
24:57but at least if if the the they're
25:00starting to talk about hikes, that's the
25:02worst time to to own gold. When they
25:04just started like you know, many people
25:06maybe would even even the ones who
25:08understand it like the the hiking cycle
25:10is bad for gold, but
25:12they would maybe just wait until you get
25:15the the more
25:16specific information when the hike cycle
25:19that's that's not when the gold goes
25:21down like once they already once it's
25:23already priced in it's already like a
25:26bit better. You could get some choppy
25:27action, but like it goes more or less up
25:29and down. But these these periods when
25:32the when they only start to talk about
25:34it, that's the worst period.
25:36>> Yeah, yeah, when when the rumors start,
25:37yeah.
25:38>> Yeah, yeah, because before that it
25:39usually goes up like crazy. So you have
25:42kind of some a lot of speculative money
25:44in it, yeah. And then and then and then
25:47what happens yeah with this huge
25:48speculative run and huge speculative run
25:51and maybe even like in the end of the
25:53moves you get like the huge the the most
25:55significant moves you get in the end
25:57when really like the
25:58the the like most speculative money
26:00comes into it and that's exactly usually
26:02the time when like they start to only to
26:05like somebody just mentioned oh maybe
26:07like you know
26:08>> And everyone gets margin called on the
26:10leverage, yeah.
26:11>> Maybe or just maybe you know there is so
26:13so for example this time that they gold
26:15the this gold run was killed by the when
26:18when
26:19>> [snorts]
26:19>> was
26:21I think he was only
26:23chosen as the next chair. So he didn't
26:26even say anything or maybe he he said
26:29something before a little bit hawkish,
26:30yeah. But
26:32that was basically when when the
26:34that was the day when the
26:37when we got the top.
26:38>> Right.
26:38>> The the like I think he was basically
26:40the Trump has chosen him if I'm not
26:42mistaken. I think that was the or
26:43something related to what you said at
26:44least, yeah. So that was that was when
26:46we got the top because he was considered
26:48to be like more hawkish more hawkish
26:50compared to the other alternatives.
26:52And Yeah, so this is kind of the small
26:54information and I myself didn't even
26:56like, you know,
26:57>> trade it necessarily.
26:58>> Yeah, yeah, I didn't maybe did notice
27:00like I wasn't didn't myself believe
27:02maybe that he's going to be as hawkish
27:04as some people think, but you get you
27:06know, some little little bit of doubt
27:08there in the market and obvious it is
27:10already enough in this speculative phase
27:12of the market is already enough for it
27:15to make to make it up. And this was the
27:16top we didn't cross it uh until now and
27:19obviously we down like I think it was
27:215,300.
27:22>> Yeah, 30%
27:23>> it's
27:24uh 4,000 now, so we got the 30% drop
27:27without even like we still are not sure
27:29if we if we get the hiking cycle. Maybe
27:32in the end of the day can imagine we
27:33don't even get the hiking cycle. Even
27:35though I think we get it, but like
27:37>> We can imagine
27:38>> the alternative scenario, but obviously
27:40it went down since then it went down and
27:42like the the news uh
27:45got priced in since then. Yeah, the
27:46chances increased, so that's that's
27:48that's so like this is this is the one
27:50thing then then like the next thing
27:52during the phase like when the
27:55when the hiking cycle actually starts
27:57and during this like whole period of the
27:59hikes the the gold usually don't doesn't
28:01go down as much. It's just like chops
28:03around and then when the hiking cycle
28:05ends then they usually like it just
28:08starts going up.
28:09>> Or or when they say that maybe it will
28:10end.
28:13>> Well, I can from from the experience it
28:15it shows like the the the date of the
28:18end of the hiking cycle. That's like
28:20>> that's like the date where the the gold
28:22just starts to go up. But if if it's if
28:25it's going with the next hiking cycle is
28:26going to be a little bit more tricky and
28:28it's maybe going to be a little bit
28:30different. Like obviously I'm very much
28:32open to it. Like, you know,
28:34>> Yeah.
28:34>> these markets as I said are becoming
28:36much more tricky like every year. So
28:38like I wouldn't be surprised until this
28:40point is like it worked like clockwork.
28:42>> Yeah, yeah, clockwork.
28:43>> So like it was it's unbelievable if you
28:46check the chart in the master classes,
28:47it's unbelievable how it work. But yeah.
28:50I wouldn't be surprised at all if going
28:52forward it's not going to be that easy.
28:53So
28:54>> So how do you help yourself? Like what
28:56are the other tools that then you put
28:57together because
28:58the the the it's it's one thing to say
29:00hey this is going to happen and then it
29:02it will happen. But the markets will try
29:03to anticipate, right? Everyone will
29:05start betting a little bit before and
29:08and the move the macro move happens
29:10before the macro data comes out
29:12typically, right? So
29:16just briefly introduce us to like the
29:18sentiment part of of your process. What
29:20are the tools that you like to use to
29:22assess if it's a good time for also the
29:25sentiment part and you know time the
29:27entry a little bit.
29:29>> Yeah, so
29:31So the the the basic the basic stuff is
29:33that basically the the hedging periods
29:35are bearish for the market and the when
29:37the hedges are releases is bullish,
29:39yeah? So that's what it that's how it
29:40works and it's again it's it's maybe
29:43it's possible, but it's not so easy to
29:45to kill this edge because like that's
29:47related to the logics of the market,
29:49yeah? So basically
29:51yeah structural structural logics of the
29:53market. So basically
29:54before the events people get worried, so
29:57they
29:58so they buy hedges. When they buy
30:00hedges, the price action is kind of
30:02negative because it's kind of similar to
30:05to short in the market.
30:07And
30:08and after the hedges are released is
30:10bullish. So from this perspective is
30:11again like one of the easy kind of
30:14fundamental
30:16fundamental thing we see you on the
30:18markets
30:20again and again and again. Now from the
30:23sentiments
30:25side of the things is uh
30:27like yeah it's a little bit different
30:30things where yeah this
30:32at least I try to establish like what
30:34different types what different parts of
30:36the markets are doing and uh
30:39in some in some cases forward and in
30:41some cases faded. So So these are kind
30:44of two different
30:46types of analysis which I combine.
30:48>> Yeah.
30:48>> And usually So for example, for example,
30:51like I have this kind of bearish period
30:54from the calendar type of
30:56from the calendar perspective and then I
30:58also see something that smart money are
31:00distributing during the same time. So
31:02it's a great great setup for me.
31:04>> I see the same thing
31:06on the sentiment type of side of thing
31:08and on the more kind of fundamental
31:10calendar
31:11side of things. Yes. So I'm seeing I'm
31:13seeing the same stuff. Maybe also see
31:15some trap on the market. Also set up at
31:18the same time. So there are three
31:20different perspective on the on the
31:22market which point to the same in the
31:24same direction and I'm
31:26in this instances I'm like obviously not
31:29100% far from it, but maybe I'm I could
31:32say maybe even 80% I'm I'm I'm sure that
31:35the price action is going to be in in
31:37the way I expect or at least at least
31:40not going to go totally against
31:42>> Mhm.
31:42>> Yeah. So I could yeah. So this is kind
31:44of you combine different perspective and
31:48uh
31:48perspective of the market and
31:50and and if they point in the same
31:53direction then you then you
31:56uh then you go into the into into the
31:59trade in this setup. So other other kind
32:02of
32:03very very good setup like I would say
32:05this is the ultimate setup of the market
32:07which maybe contradicts little bit uh
32:10the
32:12the this efficient hypothesis
32:15>> Yeah. Yeah.
32:15>> view is that like sometimes you get like
32:18really negative
32:19sentiment on the market. Everybody is
32:21shorting that like every the other side
32:23is totally like obliterated by the other
32:25side.
32:26Particularly if it's the bullish side
32:28who is obliterated by the bearish side
32:30because it's easier like
32:32to trade on the bullish side. And like
32:34if the bulls are really like put in the
32:36corner, so it's a it's a it's kind of a
32:40good setup where I'm getting interested,
32:44only interested, not necessarily already
32:46trading it. And then like you get some
32:49bullish catalyst into that. And this is
32:51basically the best possible setup where
32:53where the
32:54the market is going to totally change
32:57and now the
32:58the bulls who have been totally
33:01obliterated for like 3 months
33:04they're going to have like 3 months
33:06advantage. And when the bulls are
33:07getting the advantage, like it's much
33:10stronger advantage than the bears had
33:11before, usually. So, the market is going
33:14to compensate like really badly. Like
33:16usually it's not it's not going to go
33:18back, but usually going back in let's
33:20say for 3 months is is was going down.
33:24In 3 weeks is going to compensate and
33:27then like the next 3 months is going to
33:29provide much more. So, you you get like
33:31really like this kind of
33:35>> Very explosive moves.
33:36>> one side one side actions which
33:39I wouldn't say that they were you know
33:42priced in by the market at least at the
33:44point of the of this
33:46change in sentiment, you know?
33:48Very small part of the market managed to
33:52to change their sentiment immediately.
33:54This is the process which goes usually
33:56for the for the like long period of time
33:59where the participants like more and
34:03more and more participants are starting
34:05to believe this move and start to join
34:08this move. And if you are able to to
34:10join this this move in the first you
34:12don't even need to change it. I wouldn't
34:14even even advise to people to start to
34:17to to to join it on the first day
34:20because it's many cases it might be
34:22still too tricky, yeah? You're still
34:24like not sure what's going on, but maybe
34:25on the third day or fourth day you're
34:27still like you have a lot of time, yeah?
34:29You're still even if you like join it
34:32after 2 weeks, usually you're still
34:33early. Let's say even after that. And in
34:36the like in many cases after 2 weeks,
34:38let's say, you you can be like much more
34:41sure about the move than you were
34:43before. And you're still early.
34:45>> Mhm. Back to the the the topic of
34:47efficiency.
34:49Um
34:49do you think in your experience
34:52uh that
34:53algorithms first and now AI
34:56is making the market harder to trade for
34:59for for traders? And where do you think
35:01this is going in the next 10, 20, 50
35:02years?
35:03>> Just just one more thing I wanted to I
35:05wanted to mention to the to the last
35:07discussion we had. Like even like what I
35:09what I mentioned that you don't have to
35:11to be become involved immediately. So I
35:14just I just remembered why one
35:15interesting interview I I saw with a I I
35:18saw I think it was with the
35:20Druckenmiller, but if if it wasn't him,
35:22it's some famous investor. And he was
35:24exactly say saying saying this that he
35:26basically
35:27divides the the bullish trend into nine
35:30innings. So you have the first innings,
35:31the second, and so on. And basically
35:33he's interested in the third to sixth
35:36inning the most. So that's basically the
35:38middle part of the move which he's
35:41mostly interested in. And basically,
35:42yeah, I I like that a lot because this
35:44is maybe the easiest part of the move is
35:47the third to sixth. And you don't you
35:49don't want to be involved as much in
35:51>> don't want to time the perfectly the
35:52>> No, no, no. Maybe maybe you
35:54the top or the bottom, yeah. Yeah.
35:57Whichever way you want to put it, but
35:59basically that you you don't need to try
36:01to be too early because many people
36:03obviously try to to to find the tops of
36:05the market or bottom of the market is
36:07like the the
36:10uh like uh
36:12uh favorite retail game, yeah, to find
36:14the tops and find the bottoms. And this
36:16is
36:17extremely hard to do, yeah, because like
36:19if you have, for example, the trending
36:21move which is going against you,
36:23usually the trending like
36:25the trending move
36:27has the advantage to continue. It's more
36:28probable that it's going to continue.
36:30It's much more probable, I would say
36:32even, much more probable to
36:34to continue compared to reversal. So,
36:36there're going to be many fake spikes,
36:38which looks like trend reversal, but
36:39then it continues again and again and
36:41again. So, you don't need to be you need
36:43don't need to
36:44to to try to find the tops and bottoms.
36:46Yeah, you just you see this nice trend
36:49reversal. You see it's already it seems
36:52like every everything points to
36:53reversal, and you basically you you play
36:55the the this middle type of the move.
36:58Middle part of the move, and you are
37:00obviously not too much interested to be
37:02involved in the end, because like
37:03there's a huge huge chance of reversal
37:06already. And you are not too much
37:08interested also in this this first
37:10innings of the move. The middle part is
37:12which which you play. So, that's that's
37:14the advice I I like about it a lot.
37:16Nice.
37:18And uh yeah, and now let's move to the
37:20>> Yeah, to the question of of let's say
37:22algorithm and AI making the market more
37:24efficient. What do you think?
37:25>> Uh
37:25certainly certainly it makes it a much
37:27more difficult and much more
37:29challenging, and maybe for some people
37:31like who were successful in the markets
37:33before, I'm not so sure that they will
37:35be able to continue to be successful.
37:37But like I'm seeing a lot of people like
37:39saying like oh, this is the hardest
37:42market I've ever traded. And like I
37:44continue seeing these these uh posts.
37:47And certainly from my experience, like
37:49there's a lot of things I used before,
37:52which I can't use anymore. And like I
37:54need to evolve. And like yes, like for
37:57sure the market market became
38:00harder. I think if you
38:03are able somehow to adjust, it's uh
38:06it's easier for you than for other
38:08people.
38:08>> How would you do it?
38:10>> Uh so, for me is for me the the way I I
38:14trade is uh
38:16is I'm trying to trade many markets and
38:19and uh many methods. So, for example, if
38:22a couple of methods stopped working
38:23anymore, it's not so much a big deal for
38:25me.
38:25>> Diversifying.
38:26>> Still still can can rely on the others.
38:29And uh and in particular uh
38:32I'm trying to employ many different many
38:35different methods and many different
38:37approaches in my market and try to
38:39combine them to find the trades with
38:41high probability of success. So, I'm
38:43trying to find the trades with maybe
38:45let's say 70 or 80% of probability of
38:48success. So, compared to people who have
38:50just 60% of
38:53probability, if they take away 10% for
38:5510% of this like from 60 you get to 50.
38:58But if you
39:00if you try to have like 70 80%, if they
39:03take away 10% from you, you still like
39:06could could do reasonably well.
39:09>> Yeah.
39:10>> Uh also like moving between different
39:12markets. So, at times like some markets
39:14are really difficult, but some other
39:16markets could be easier to trade. So,
39:18for example,
39:19the easiest thing to trade trade are the
39:22bull market.
39:23The bull market is not so easy to lose
39:26money in a bull market. Everybody as
39:27they say, everybody is genius in a bull
39:29market, yeah. And that's when the
39:32when this other phase comes, this where
39:36basically good good traders and bad
39:38traders are differentiated. But what you
39:39can do is always try to find the bull
39:42market somewhere. So, basically, if if
39:44we don't get a bull market in indices,
39:47if indices get hard get harder, maybe
39:50you'll find the bull market somewhere
39:52also. For example, recently we we got
39:54the situation of this war in in Iran.
39:58So,
39:59uh
40:00maybe for some people stock markets
40:03started to become much much more
40:05difficult during for example March and
40:07April of this year, but maybe oil market
40:11became easier, yeah. We got a nice bull
40:13market in oil.
40:15Maybe that one
40:16could be easier for some people. So like
40:18Yeah, so so this kind of moving between
40:21markets and finding the the markets
40:23which are easier to trade at the
40:24particular time. You have to have to
40:26have to have the backup markets.
40:28>> And this isn't the best thing about
40:29global macro because you're you're not
40:31fixed in one asset or even just one
40:34asset class, you know? It's just
40:37you go where the volatility is. So it's
40:39>> so for example in this in this example I
40:41like extremely like the natural gas
40:44market because like sometimes it feels
40:47like
40:48for example with this Fed, yeah,
40:51it feels sometimes like everything
40:53everything depends on the Fed now, yeah?
40:55So like so like it feels like if I move
40:57from the for for example from indices to
40:59gold or somehow differentiate between
41:01indices and gold it feels like almost
41:03I'm doing the same trade sometimes
41:04because if if the Fed is hawkish
41:08everything is going to go down. If it's
41:09obviously not 100% but there is a whole
41:12lot of correlation between different
41:13markets. But I like natural gas a lot
41:15because like there is no correlation
41:17whatsoever. It doesn't care about Fed
41:19like the slightest bit
41:21slightest bit and you can just trade
41:23something completely different. And
41:25obviously I'm obvious let's let's say it
41:27happens I'm totally wrong on the Fed,
41:29yeah? Now if I'm if I'm going to to
41:31trade like gold
41:34indices
41:36I'm obviously going to incorporate
41:40same fundamental stuff into it and it
41:43can happen that I'm going to wrong I'm
41:45going to get wrong like everything about
41:47all these markets.
41:49But on the other side if I try trade
41:51natural gas I can very well
41:53differentiate like my trading. So even
41:56if I'm wrong
41:58let's say on the fundamental side of
42:00things I still can make
42:02good good profits in natural gas market
42:04for sure.
42:05>> Can you walk us through your worst
42:08trades of the last few years?
42:11>> No. Yeah, so so there's one market
42:13>> Or or or ever.
42:15>> There's one market I'm still like really
42:16struggling with and this bond market.
42:18>> The bond market.
42:19>> Yeah, yeah. So so what the what I I used
42:21to what I used to always do I I tried to
42:24trade even the markets I wasn't like
42:26very good with. So for example, natural
42:28gas market is is one example where I I
42:30lost a lot of money in the natural gas
42:33market because before I started to be
42:35like good with it.
42:37Uh and uh yeah, I I think like is the
42:39best way only is if you trade like
42:41normally like don't do
42:44like some kind of uh
42:46uh platform trading or something like
42:48just to learning platform or something.
42:50I try to to trade with the real money
42:53even even the markets I'm not that much
42:55proficient
42:55>> Mhm.
42:56>> with myself and yeah, like
42:58my my
43:01no problems to admit that like
43:03natural gas markets like gave me a lot
43:06of pain and I didn't trade it in the
43:08right way and like yeah. So it it
43:11behaves completely different than the
43:13other markets which was a problem before
43:15but now it's kind of the advantage
43:17which I mentioned.
43:19So so yeah, so
43:22So so this this was
43:23what this was the thing but now yeah,
43:25now getting good getting by like the
43:27bonds is still like I'm I'm really bad
43:29with bonds like and I think probably I'm
43:32not even going to try to trade them
43:35anymore. I'm maybe this is probably much
43:38more useful to is I think
43:40>> Okay, the bonds are still a great kind
43:41of macro proxy and
43:43>> macro tool but I think is
43:46is probably much much better and much
43:48more useful for me just to to take
43:51information from that market
43:52>> As an indicator more than yeah.
43:53>> Yeah, yeah, then then to like just yeah,
43:55because basically what what they say is
43:57the bond market is the the smartest
43:59market of all of them. Maybe yeah, the
44:02most like the the largest market of all
44:04and the most money involved and maybe
44:06that's because that the smartest
44:08smartest market. And
44:10I really like this
44:12Today, I think I'm probably not going to
44:15try to
44:16trade them anymore because really like I
44:18had so many like different examples
44:21where where just stuff which works even
44:25even on the sentiment side of things,
44:27not even on the fundamental, but even
44:29also on the way trades like almost
44:32nothing like which works for me in the
44:34other markets
44:35works on the bonds markets. Like really
44:37it really is kind of kind of
44:39unbelievable. So, I yeah, I'm I'm going
44:43to probably just to to stop trying and
44:45just to to to basically
44:48resign that okay, this is smarter than I
44:50am and I just to use it to extract the
44:53information rather than trying to
44:55predict what this particular thing is
44:57going to do in the future. So, this is
44:59for for sure. Yeah, so so this is one
45:01one one thing I mentioned. The other
45:03thing I mentioned was
45:04>> natural
45:05>> natural gas.
45:06The other thing I could mention like
45:08after after I started trading, I
45:10basically wiped out my
45:12my account because like
45:14I started to I traded a little bit also
45:16before that, but I started to seriously
45:18trade in summer 2015 where we got some
45:21of the one of the most unpleasant
45:22crashes
45:24uh until this point in summer summer
45:262015 August 2015 was really unpleasant
45:28like really huge downwards move which
45:31which maybe I hopefully could predict
45:33now, but at that time was totally
45:35impossible for me. So, yeah, so so this
45:38would be this would be the examples.
45:39Particularly yeah, particularly with the
45:42with my kind of I don't know strengths
45:44and weakness where I just you know, I I
45:48I put myself in a in difficult situation
45:51sometimes kind of kind of myself that I
45:54I know
45:55maybe like rationally
45:58at least from one rational perspective I
46:01shouldn't do this, but on the other
46:02hand, like this is this is the way you
46:04learn. So, So, I don't regret that too
46:06much.
46:07>> And how about some of the best ones?
46:09Or the best one?
46:12If there is any?
46:12>> No, it's it's more like the yeah, it's
46:14it's easier for me to talk about the the
46:17really bad ones than
46:19for the than about the the good ones.
46:21The good ones should be kind of the the
46:23business as usual that you don't
46:25basically you just yeah, just perform
46:28what you know and yeah, but yeah, there
46:30was the one I mentioned in the master
46:31class I'm quite quite proud of. It was
46:34because I usually I I I don't predict
46:37the what's going to happen too much. I
46:39mean the data releases and stuff like
46:42that.
46:43But one of the one of the releases which
46:45I'm pretty good with and I haven't been
46:48wrong until this point are the
46:51the Fed decisions with the interest
46:53rates. So, not the talks, not the not
46:56the other related stuff which might
46:58still be quite tricky, but at least with
47:00the interest rate decision I was
47:02never wrong.
47:04Uh at least until this point. Now the
47:06Fed is becoming much more tricky, so
47:08maybe it's going to happen
47:09on the next meeting, very much possible,
47:11but until this point it had it hasn't
47:13happened. And in September 2024, this
47:17was the like maybe at least one of the
47:20most tricky
47:22tricky
47:23uh Fed decisions
47:26uh until this point when Fed has cut by
47:2950 basis points. So, usually
47:32in
47:34all the other most in all the other
47:35instances I remember they moved the
47:37market by 25 basis points and there they
47:39cut 50. And and yeah, and I was very
47:42sure even though the market pricing was
47:45almost 50/50, I was very sure that this
47:47is going to happen.
47:49And and yeah, and it was was right on
47:51that rate. So, this maybe one one
47:53example where I was kind of kind of
47:56proud that yeah, that um
47:59it was a good trade.
48:00>> So, for this special episode, as you
48:03know, you were basically
48:05a few points away from uh becoming a
48:08grandmaster in chess. When was that?
48:11It was at probably some 10, 12 years
48:13ago.
48:14>> No, no, I I wouldn't I wouldn't I
48:16wouldn't characterize it. I I was few
48:18few
48:19rating points like you know
48:20>> Rating, yeah, rating-wise.
48:21>> Yeah, rating point-wise, I was maybe not
48:24so far from the level, but you need to
48:26you need to fulfill many different kind
48:29of
48:30you know
48:31>> Yeah.
48:32>> many like
48:33points, yeah, some metrics, metrics to
48:36become a grandmaster. Some of them are
48:37not even related too much to the chess
48:40chess-wise, so you need to participate,
48:43for example, in the tournaments where
48:44you have enough international players
48:46and all this stuff. And I never played
48:48chess as much to to to be close to
48:52fulfill all these kind of
48:55kind of metrics. So, I wouldn't say I
48:56was that close to become a grand master.
48:59Maybe I
49:00maybe with the chess trends, I was
49:03not that far in some point. Still, like,
49:06you know, at at this point
49:08uh when when you get closer to to some
49:11level, it's much harder to to get the
49:14rating points. So, maybe 30 30 rating
49:16points is not that much somewhere that I
49:19was on the lower level.
49:20>> end, yeah, yeah, yeah.
49:22>> And I I I can't say like definitely that
49:25I would able to to cross this another
49:28like 30 or 40 points which I was
49:30missing. Like, it's it's it's it's it's
49:32it's not much at the beginning, but it's
49:34huge in the
49:35>> Yeah, it it gets increasingly harder.
49:37Yeah, yeah, yeah.
49:37>> And when particularly when you are
49:39getting closer to your limits, it's
49:41getting like extremely hard to get them.
49:42So, it's
49:43>> Right.
49:43>> But, yeah, like, probably
49:46probably it's more probable than not
49:47that I would I would get at least at
49:49least to a rating-wise to the level.
49:51Uh I'm not sure I would get the
49:53>> The 2500. So well I got zero
49:57in FIDE Elo.
49:58I probably got 800 on chess.com.
50:01So while we bring the chessboard
50:04>> But you you've already beaten me today
50:06so
50:06>> We tried we tried a little bit.
50:07>> beaten me today so I could we could rate
50:09you at 2700
50:11>> [laughter]
50:11>> somewhere close to Carlsen based on that
50:15one game.
50:16>> Yeah.
50:16>> at least
50:17>> But I'm an amateur and I love chess and
50:20um
50:20it's uh I I like to sacrifice pieces
50:23sometimes usefully sometimes not.
50:25So I thought it was a it was a fun
50:27switch of concept to also have a
50:29chess game in the meantime and I'm going
50:30to open with E4 and we'll see where this
50:33goes.
50:33>> As I as I told you my favorite defense
50:36is Scandinavian so we going to play
50:38Scandinavian defense again and again and
50:40again.
50:41>> I'm going to lose. You know I'm going to
50:42lose.
50:43>> This is very confusing for you.
50:44>> Yep. But um
50:46>> Now I'm going to play very unpleasant
50:48move actually for you.
50:48>> Yeah I can see that.
50:50>> I played I played different
50:51>> Now now now you're not going to be kind.
50:53>> No I'm not now I'm not going to be kind.
50:54I'm going to play play this move like
50:56just to to
50:57to just exist on the on play the
51:00the proper Scandinavian with you.
51:02>> Okay.
51:05Do you think IQ plays a role in chess?
51:09And in trading?
51:10>> Of course it plays some role. I think in
51:12more or less everything plays some role
51:14but maybe
51:16other things play play role
51:19too so it's like It's it's important but
51:22like you know how as they say hard work
51:25beats talent if talent doesn't work
51:28enough so
51:29So that's that's what it is obviously
51:32with everything.
51:33>> Right.
51:34>> And uh
51:35um
51:36You know if if you
51:38don't get maybe enough on one side side
51:41of the things you might get compensated
51:43on the other so maybe for example
51:46uh
51:48even even if some people who have like
51:51average or a little bit above average IQ
51:54get
51:55like a much better on the interpersonal
51:57skills or much better on the energy
51:59stuff of things or much better on the
52:01hard working.
52:02>> Yeah.
52:03>> Uh so they can do much much better in
52:06life than maybe some some people with
52:09the high IQ, so
52:11it's certainly not the end of the world.
52:14>> That's a check.
52:17Right.
52:24>> So let's do it with the knight.
52:26>> With the knight?
52:28>> This is interesting. You didn't expect
52:29this for sure.
52:31>> Right, but there's a discover check I
52:32need to be careful of here.
52:33>> Well, now you need to be careful.
52:35>> Yeah.
52:35>> Now you need to be careful. I'm even not
52:37sure like what you what you Yeah, I
52:38don't know what you need to do.
52:39>> I'm not sure.
52:41>> So
52:41>> But yeah, I'm probably going to have to
52:43step back.
52:43>> Yeah, yeah, yeah. Maybe not the
52:46not the best uh
52:48square, but yeah, the logic is good. The
52:51Scandinavian defense is really
52:52unpleasant. What do you say?
52:53>> tricky. It's really tricky. It's so
52:54asymmetrical. I'm used to boring games.
52:58>> market.
52:58>> You know you know where I'm from? I'm
52:59I'm for the Italian game.
53:01>> Yeah, yeah, yeah. I saw the the really
53:03really well with the Italian Yeah,
53:05Scandinavian is the opposite side of
53:07Europe. That's not good for you.
53:08I didn't even I didn't even realize
53:11that's why why it's so unpleasant.
53:13>> [laughter]
53:13>> I'm a chill Italian.
53:14>> even realize why why Scandinavian
53:17defense would be would be unpleasant for
53:19the Italian guy.
53:21>> [gasps]
53:23>> Bloody hell.
53:24I cannot even castle now.
53:26>> Yeah, yeah, this bishop is the pain in
53:28the ass.
53:31>> Cannot even castle my king.
53:32>> but man like for the you know,
53:34considering the experience and and
53:36ratings and everything like you're doing
53:38amazing.
53:39>> I I it.
53:40>> Amazing stuff in this particular in the
53:42that game. Oh, no.
53:44>> No, right?
53:45>> No, no, man. No.
53:46>> Wait, wait, wait, wait, wait, wait. It
53:48was just a testing if they would hold,
53:49you know, it was not the actual move.
53:52But yeah, there's some there's some
53:53tricks here you're about to play.
54:00>> There's the queen with the same
54:01>> Yeah, yeah, yeah. I remember there's a
54:02queen there.
54:04>> That's the That's the problem with that
54:05king.
54:06>> then then I remove the defender of Yeah.
54:08>> No, just take it. It's mate.
54:10>> Right. Right.
54:13Right. So, this is the thing. It's more
54:15like chess is more about
54:17like spatial awareness, pattern
54:19recognition more than probabilities you
54:21would say.
54:23>> You say everything.
54:24It's like uh
54:26It's like yeah, like uh
54:28like you need to be It's It's It depends
54:30on the on the which level you are
54:32interested in. So, if you just want to
54:33be, let's say,
54:35good club player, maybe you you can be
54:37good just in in some things and don't
54:40need to be as good in the others. But if
54:42you like want to be
54:44like top grandmaster, you need to be
54:46good in everything. You need to be good
54:47in with memory, with uh
54:50with spacing, with imagination, with
54:52logics, with calculation in particular.
54:55Yeah, I I would say memory is the most
54:57important actually.
54:58>> Memory is the most important one.
54:59>> and the short-term memory and long-term
55:01memory.
55:02>> Right.
55:02>> It's very really like uh is
55:05is getting quite for you particularly in
55:09in 2026 years.
55:12Because you really you can you can
55:14memorize a lot of stuff, but
55:16>> Yeah.
55:16>> but you need to like You need really
55:18great memory for it.
55:21And uh certainly at this point in my age
55:24and everything like uh
55:26failing me a little bit.
55:28>> [laughter]
55:29>> So, why do you always want to exchange
55:31queens with me?
55:32>> to trade, you know, try to survive and
55:34get to the end game, you know.
55:36>> want to, but you are really good in
55:37exchanging the queens. Like most of the
55:38times when you offer
55:47I mean my strategy here
55:54>> [laughter]
55:59>> Yeah, that's that's what I'm weak as
56:00[ __ ]
56:04But I just have to have to save me. You
56:05know, when you're going against the
56:06titan, you got to play with your what
56:08you have, you know.
56:11Yeah.
56:11>> [sighs and gasps]
56:21>> Yeah, I was awful.
56:23I blundered everything.
56:27That's That's quite good to hear that,
56:28but I can need to get rid of this this
56:30this bishop here.
56:33It's going to be hard. Cuz I cannot move
56:35my kings out of danger for now.
56:46Might
56:50Might be there. No.
56:55I'm going to bring the rook in the game.
57:00I'm going to try and castle
57:03Cuz this is too open. I mean, I'm just
57:05giving you the king right there.
57:09True.
57:15You think chess is
57:17I'll try.
57:23That was the only one, right? Yeah, how
57:25do you get that?
57:34Yeah. To play. Now it's a little bit
57:36more more difficult.
57:38>> Yeah. I'm pretty stuck.
57:41>> Yeah, it's it's a little bit hard to
57:44unpack your pieces.
57:45>> Yeah.
57:47I got a
57:48throw back somehow, maybe.
57:52>> Yeah, maybe that one, but that's
57:54>> Do you want my knight?
57:55>> connected to the sacrifice with the
57:57sacrifice of another pawn.
57:59>> Right.
57:59>> Which you are going to miss badly.
58:02>> I'm going to miss that one, right?
58:05>> Okay, I'm going to be nice to you and
58:08let you unpack your pieces, but take
58:10another pawn for it.
58:11>> [laughter]
58:12>> I am a
58:14real pawn grabber.
58:15>> You're a pawn grabber. Yeah, yeah,
58:16you're greedy.
58:16>> greedy and greedy and guy.
58:18>> If there's a scalp if there's a small
58:20scalp, you'll take it.
58:21>> Yeah, yeah.
58:22Yeah, I am I'm going to be just a real
58:25kind of Yeah. greedy and person with
58:27you. I just I just exchange everything.
58:30>> Yeah, now now that I've got no pawns,
58:32it's the best way, right?
58:35>> We just leave you leave you pawn less
58:38and
58:39Yeah, we just play with the pawns. Yeah,
58:41you you're going to
58:42>> Yeah, I have to take it.
58:43>> going to leave me to to execute my plan
58:45to
58:45>> god.
58:46>> my my pawn plan to the pawn.
58:48>> going to see my end game skills.
58:49>> Okay, that was that was hard. Now
58:52now I really hope I would I would beat
58:54Magnus Carlsen in the from this
58:55position.
58:56>> [laughter]
58:56>> I really hope so because otherwise I I
58:59would have to stop playing chess or
59:00something altogether. I would certainly
59:02need to stop playing chess if I
59:03>> This is him in this I'm the worst.
59:06>> Hopefully hopefully
59:09it's not possible to save this.
59:11>> Yeah, it's not possible to save this.
59:14>> this position anymore. Okay, let's let's
59:16make it little bit little bit more
59:18interesting.
59:20Let's play play this.
59:22Maybe there's a mistake actually. Now
59:23I'm thinking it's maybe a mistake, but
59:25let's say let's find find out.
59:27>> I'm not going to take it. I'm I'm not
59:28going to take it. I can't.
59:31Unless I do something like this.
59:32>> Yeah, yeah, you I'm saying you're
59:34getting better. You you spotted the
59:35tactics, so you know.
59:37>> [laughter]
59:39>> What's it like?
59:39>> Yeah, but I still I'm still down three
59:41pawns, so
59:42>> No, no, no, I can I can just go here.
59:43It's not a problem. But
59:45let's make it more interesting. Let's
59:46make it more
59:48>> Mhm.
59:49>> Should still should be enough pawns.
59:50>> Really?
59:51>> Should be enough pawns.
59:53>> I'll thank you, sir.
59:54>> Enough pawns, I guess. Of steel.
59:57>> Steel steel enough pawns?
59:58>> Steel I think I would beat Magnus
1:00:00Carlsen from this place.
1:00:01>> Oh my god.
1:00:03>> No, I really advanced like everything,
1:00:06you know. Everything.
1:00:08Maybe I'm too optimistic that I would
1:00:10beat Mag- Magnus Carlsen, but
1:00:12I hope so.
1:00:14I think this is very very easy to play.
1:00:17Now now Andrey is going to show me that
1:00:19I'm not going to even beat Andrey in
1:00:20this position. That would be
1:00:22>> [laughter]
1:00:22>> That would be
1:00:24You see?
1:00:25I was starting to lose the pawns, right?
1:00:27Why [snorts] why did I go there?
1:00:28[ __ ] like [laughter]
1:00:30>> But but you're queening in like two
1:00:32moves.
1:00:34>> Nice game, man.
1:00:34>> Good game. Good game.
1:00:36>> Why it's still the end game again?
1:00:37>> Yeah.
1:00:38>> Lucky lucky winner.
1:00:42>> [clears throat]
1:00:42>> Okay, this was fun.
1:00:44>> This was fun. Like I am saying you are
1:00:45getting much much better every game. You
1:00:47see?
1:00:48>> I hope so.
1:00:48>> It's It's obvious that you are
1:00:51kind of learning guru, you know.
1:00:53>> Right.
1:00:54>> There was a one guy I think there was
1:00:56one guy who like who was the the
1:00:58learning kind of prodigy or something.
1:01:01He was learning all this stuff and and
1:01:03he didn't know how to play chess, but in
1:01:05one month he wanted to to to start
1:01:07playing it on the level that he could
1:01:09play with the Magnus Carlsen, you
1:01:11>> Wow. That's very ambitious.
1:01:12>> It It was It was kind of a joke because
1:01:14like
1:01:15>> Yeah. It's It's like learning to trade
1:01:16in in in six months.
1:01:18>> had to had to praise him to
1:01:21for the for that he
1:01:24for the fact that he lasted like some
1:01:26some 15 moves but but like like this
1:01:29that was his ambition so so I'm seeing
1:01:31you
1:01:32you are learning prodigy as well.
1:01:34>> You think it's easier to learn how to
1:01:35check how to play chess or trade?
1:01:37To get in the top 1%?
1:01:41>> Hard to say it's not so not so not such
1:01:43an easy question.
1:01:45I'm not so sure actually actually maybe
1:01:48>> Maybe chess?
1:01:48>> Maybe no like with chess it's yeah like
1:01:511% of what? 1% of all of all population
1:01:54or 1% of you know all people who have
1:01:56tried it is a bit a bit not so easy to
1:01:58define but yeah like uh
1:02:02I don't know maybe maybe I don't know
1:02:04hard to say.
1:02:05>> Yeah it was a more open-ended question.
1:02:07>> Hard to really hard to say. It's yeah it
1:02:09is depends on on definition you know you
1:02:11can define it in many different ways.
1:02:13>> Definitely.
1:02:14But do you think is the same
1:02:16pressure levels or or what do you think
1:02:18is the cuz you you
1:02:20competed in both the World Trading
1:02:23Championship and also in some chess
1:02:25championships. Which one would you say
1:02:27you felt more pressure?
1:02:29Psychologically?
1:02:30>> I would say
1:02:33uh if you play chess the right way and
1:02:36you
1:02:37trade the right way
1:02:41you feel much more much more stress in
1:02:43chess.
1:02:44But if you start making life
1:02:48harder for yourself
1:02:49in trading then it can be the other way
1:02:51around like mostly when you feel the
1:02:54most stress in trading is when you
1:02:56you create the hard situations for
1:02:58yourself that's that's the most what
1:03:01most stress you you feel like you do
1:03:03some stupid stuff and like then then you
1:03:05feel all the stress. Otherwise like you
1:03:07know
1:03:08it's it's possible to to at least at
1:03:10least until this point probably is still
1:03:13possible to
1:03:14to trade in a a relatively not so
1:03:16stressful way.
1:03:18But, yeah, let's see how how is going to
1:03:20be going forward. Because playing chess
1:03:22in not stressful way is not certainly
1:03:24not possible.
1:03:25>> Right.
1:03:26>> Uh you playing against other people who
1:03:28are just, you know, if you if you play
1:03:31uh with the opponents who are at least
1:03:33on your level, like it's going to be
1:03:35extremely stressful.
1:03:36>> Yeah.
1:03:38And AI is going to is going to win in
1:03:40both.
1:03:41In chess and in trading.
1:03:42>> yeah.
1:03:44Like [snorts]
1:03:46uh
1:03:47you know
1:03:48in both you still can play against other
1:03:50people. So, basically
1:03:53what I think what I think in in trading
1:03:56could happen that obviously AI kills
1:03:58trading for
1:03:59for most of the people, but this is uh
1:04:02uh
1:04:03is for you in many cases is enough to be
1:04:06still like uh better than everybody
1:04:09else, every human being who
1:04:11who
1:04:12trades. You don't need necessarily to be
1:04:15like better than AI, which
1:04:16was a battle for you, but like
1:04:21you can basically do
1:04:23similar stuff to what AI is doing, and
1:04:26then you beat basically most
1:04:28most humans in the planet, at least.
1:04:31>> Jan, I'm sure this was a very insightful
1:04:33conversation for our viewers. Thank you
1:04:34very much for dedicating your time.
1:04:37>> And uh we'll see you in the master
1:04:39class. I mean, the the viewers will see
1:04:41you in the master class. And thank you
1:04:42very much.
1:04:43>> Great stuff. Thanks a lot, Andrea.

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