How To Be A Systematic Trader with 6-Fig Trader Evan Schunk — Transcript

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1. 0:00what's going on guys jack Kellogg here
2. 0:01in Venice California
3. 0:05[Music]
4. 0:06here with Evan Shunk did I say that
5. 0:09right yep
6. 0:10so Evan's been trading for about what
7. 0:14five years five years
8. 0:16and if you go to his Twitter you'll see
9. 0:19that he actually started playing video
10. 0:21games and now he is day trading which
11. 0:24resonates with me as someone who also
12. 0:25likes to play video games still do it
13. 0:28did it when I was a kid do you think
14. 0:30that that has helped you become a
15. 0:33successful day trader now closing in on
16. 0:34seven figures in profits I I like to
17. 0:37think so I I like to think that there's
18. 0:39a
19. 0:40correlation with because the Market's
20. 0:42kind of like a game just trading stocks
21. 0:44in general I feel is like kind of like a
22. 0:46game and you have to figure out all the
23. 0:48rules and the little trinkets inside the
24. 0:50game to get did to it just so you have
25. 0:51to do with any
26. 0:53uh video game like Call of Duty you
27. 0:54gotta learn the insides of the maps
28. 0:56right uh which routes are the best which
29. 0:58routes get you quickest but in the same
30. 1:01sense of figuring out the rules and
31. 1:03doing a step-by-step faces to master the
32. 1:05game so that's how I like to relate to
33. 1:07it and I think it did help because
34. 1:11I mean what do you think don't you think
35. 1:12he it like figuring out the entire
36. 1:20could cut this part
37. 1:21there's no Cuts there's no Cuts tell
38. 1:24them there's no Cuts all right so he's
39. 1:26just unfortunately he's only halfway
40. 1:28through his first spicy Margarita but
41. 1:31I'm about uh 60 through my beer so I'm a
42. 1:34little bit more fluent in the fluid and
43. 1:36the words in the words I would say that
44. 1:40the biggest thing with trading in video
45. 1:42games for me is the quick reaction time
46. 1:45I know that Evan is a discretionary or
47. 1:47not a discretionary system Trader and
48. 1:49I'm discretionary Trader but having
49. 1:52those quick reaction times where you're
50. 1:54able to time bottoms time tops no one to
51. 1:56add no one to cut no one to downsize
52. 1:58that's really helped me
53. 2:00coming to a quick conclusion on
54. 2:04the screen to make my decision whereas
55. 2:06other jobs right if you're a plumber if
56. 2:08you're a truck driver if you're doing
57. 2:10all these other jobs you have a lot more
58. 2:12time to react for the most part whereas
59. 2:15a lot of stuff on the screen like video
60. 2:18games and other stuff you have to react
61. 2:20within seconds milliseconds or
62. 2:24you're gonna die in the video game or
63. 2:27you're gonna lose more money right in
64. 2:29the same sense it's like you're when you
65. 2:31start a video game you don't know the
66. 2:33rules which guns are more overpowerful
67. 2:34like where the edge is in the video game
68. 2:36because there are edges and video games
69. 2:38just like there are edges in the market
70. 2:41that is undeniable and you have to spend
71. 2:44so much time just watching it to figure
72. 2:47it out where those edges are just how it
73. 2:49took me forever to figure out like you
74. 2:52know what's the best gun and what's
75. 2:53killing people so much quicker in Call
76. 2:55of Duty it so in that sense of finding
77. 2:57edges I'd say video games and the market
78. 3:00are pretty similar
79. 3:02now to get into trading a little bit so
80. 3:05Evan is the polar opposite of me in the
81. 3:07market I like to just see something and
82. 3:11trade it with the thesis that I just
83. 3:12make up in my head based on patterns
84. 3:15that I've seen over the last several
85. 3:16years I've now been doing this for seven
86. 3:18years so seeing the same thing over and
87. 3:19over and over again
88. 3:21gives me my Edge and then sizing in
89. 3:25based on fear and greed is kind of where
90. 3:29I find myself making money whereas Evan
91. 3:31is uh if
92. 3:34if he's a if then uh how do you describe
93. 3:38the kind of your system specific there's
94. 3:39got to be defined criteria Quantified
95. 3:43so if something happens then I'm going
96. 3:45to press buttons right if it matches
97. 3:47every criteria then I hit
98. 3:49and do you want to talk a little bit
99. 3:51about your system yeah I mean a lot of
100. 3:55it is I trade a lot of gappers and as
101. 3:57you guys I'm sure many of you know that
102. 3:58gappers have a very high edge of of
103. 4:01closing below the open I'm pretty sure
104. 4:03the average closed Below open
105. 4:06uh percentage around 80 of them around
106. 4:08about that close below the open so
107. 4:11therefore I have a directional Edge
108. 4:13right there of which way that stock
109. 4:15wants to go to on the day and if I have
110. 4:18a directional Edge I mean that gives me
111. 4:20a great idea where that stock is going
112. 4:22and I want to be shorted
113. 4:24and that's pretty much a pretty good
114. 4:27example of it yeah so I just went hiking
115. 4:30with Evan and his brother who he also
116. 4:32taught how to trade with his system and
117. 4:35his brother has now profited also about
118. 4:37a half a million dollars and he started
119. 4:39just a few years ago so it's super
120. 4:41impressive what Evan has done and on top
121. 4:43of it teaching his brother and having
122. 4:44his brother find similar profitability
123. 4:47within half the time which is very
124. 4:50impressive
125. 4:51maybe now I want to get into asking you
126. 4:56do you ever feel as though that you
127. 5:00could be making more money or you feel
128. 5:02that you just want to follow your system
129. 5:04to whatever it's gonna tell you or are
130. 5:08you constantly working on finding new
131. 5:10things how do you kind of manage those
132. 5:11thoughts in your head because I know for
133. 5:13me personally as a discretionary Trader
134. 5:15seeing price action and seeing movement
135. 5:17even in the QQQ like I traded a lot of
136. 5:19tqq sqq last year which is triple
137. 5:22leverage ETF of the NASDAQ 100 and I'm
138. 5:27always looking for opportunity to make
139. 5:28money in whatever Market it is whereas
140. 5:31you're waiting for something very
141. 5:32specific you haven't made a trade in two
142. 5:34weeks two weeks right I literally could
143. 5:36not do that like I'd bug out I've been
144. 5:38trying to take a break it is July I told
145. 5:40the Clover room
146. 5:42that I haven't really been trading but I
147. 5:45still have been trading here and there
148. 5:46I've probably taken off about half the
149. 5:48days of the month so far and you know I
150. 5:49want to take all the entire month off
151. 5:51but I just can't stop trading when I see
152. 5:54opportunity right so how do you manage
153. 5:57that fomo
154. 5:59when you're looking at the market on a
155. 6:02day-to-day basis yeah I admit there are
156. 6:05some film you know days when I'm not
157. 6:06trading and I'll go on Twitter and Jack
158. 6:09made 100K that day or you know Kyle made
159. 6:1280 and whatever
160. 6:14well some people just banking on it and
161. 6:17I'll be like ah that was a good setup
162. 6:19but it didn't match my criteria so I
163. 6:20couldn't take it
164. 6:22um yeah there is some fomo there
165. 6:24sometimes but honestly I've I've Gotten
166. 6:26Good at just ignoring it discipline I
167. 6:28don't compare myself to others
168. 6:30um anymore I stopped it's just it's just
169. 6:32noise to me now and honestly will just
170. 6:34put me down a little bit comparing
171. 6:37yourself to these multi-millionaire
172. 6:39Traders I mean I'll believe I'll get
173. 6:40there one day but you know you got to go
174. 6:42at your own pace and you gotta stick
175. 6:44with the trading style that works for
176. 6:45you
177. 6:47and um discretionary I used to trade
178. 6:50discretion and I I did okay a little bit
179. 6:52in the beginning but I started doing way
180. 6:54better actually System trading
181. 6:56um and so I really stuck with it in
182. 6:59and it really just fits my personality
183. 7:02it keeps me comfortable and my emotions
184. 7:03out
185. 7:05um
186. 7:06did I answer that question all right
187. 7:08yeah that was a good question now if
188. 7:11somebody is struggling with
189. 7:13discretionary and they're struggling to
190. 7:16find consistency over I don't know I
191. 7:18would say three to five years of putting
192. 7:19in work and just not finding that that
193. 7:22mental Clarity because some people I'm
194. 7:24gonna be honest with you guys some
195. 7:25people have it some people don't have it
196. 7:26like some people need very strict
197. 7:28guidelines to make money other people
198. 7:30can show up at the market
199. 7:32um myself my other friends and we can
200. 7:36just kind of see an opportunity and just
201. 7:38know how to trade it right but other
202. 7:40people will screw that opportunity up or
203. 7:42whatever it is
204. 7:43if you wanted to get into system trade
205. 7:45in Evan how would you suggest somebody
206. 7:48get started without kind of giving them
207. 7:50too much because I know it takes a lot
208. 7:52of work in a system to to find it I'm
209. 7:54not we're not going to give you guys
210. 7:56Evan's exact criteria or parameters to
211. 7:59make money but how do you start to
212. 8:01become a system Trader I think to start
213. 8:04you have to just um you got to get an
214. 8:06Excel and you gotta track data you have
215. 8:08to track Market data something very
216. 8:11simple to track just simple there's more
217. 8:13entries than just this I'm not going to
218. 8:15get out everything but just simply go
219. 8:17check gappers you know gapping up at
220. 8:19least 40 or 50 and above you know and
221. 8:23just check your entries of what would
222. 8:24happen if you got in at the open and
223. 8:27then you got out at the close
224. 8:29what would your profits be doing that
225. 8:31same positioning throughout a whole year
226. 8:33just some basic thing I mean you can do
227. 8:35that also for over extended Gap Downs
228. 8:37you have for gapper plays uh there's all
229. 8:40the short patterns just test those two
230. 8:42variables always track the market cap
231. 8:44always track the float always track
232. 8:47um
233. 8:48uh resistance uh if it's gapping into
234. 8:51any resistance
235. 8:53um check uh there's every variable you
236. 8:55can think of the 100 SMA whatever you
237. 8:58want you track that and you correlate
238. 9:00that
239. 9:01um you put that in your Excel and you do
240. 9:03analysis based off
241. 9:05um does the winning percentage get up
242. 9:08bigger if it gaps into resistance is the
243. 9:11winning percentage better if it gaps
244. 9:13higher uh you know just ask yourself all
245. 9:16these questions and start there or we in
246. 9:19track all the data surrounding it and
247. 9:22then always watch out for black swans
248. 9:24because the thing with gappers it only
249. 9:26takes one to absolutely blow you out and
250. 9:28lose all your money so you have to have
251. 9:30a Max Level where it's like okay it
252. 9:32spiked too far I gotta get out because
253. 9:34this is a
254. 9:35what is it uh this is a
255. 9:38variable that's outside the norm I guess
256. 9:41you could say so you want to track the
257. 9:43spike percentage if it goes too far when
258. 9:45do you have to get out because if you
259. 9:47can't manage that risk you know when
260. 9:49that Black Swan comes you're gonna get
261. 9:51run over and you'll blow up your whole
262. 9:52account so you have to know when to get
263. 9:55out and you can track that through data
264. 9:58yeah that's that's a really good answer
265. 9:59and honestly
266. 10:02if you guys are struggling to make
267. 10:05consistent profits if you guys are
268. 10:07struggling to have like even one green
269. 10:08month like I would kind of throw
270. 10:11discretionary out the window for the
271. 10:12time being not that you should be giving
272. 10:15up on your dreams and that type of
273. 10:17trading but
274. 10:19you should start just do some System
275. 10:21trading as well find out what works for
276. 10:22you there's millions of strategies in
277. 10:25the market and sometimes if you're
278. 10:27trying to emulate what I'm doing maybe
279. 10:28you can't emulate it but you you are
280. 10:31more able to emulate something that has
281. 10:35parameters and something that has a
282. 10:36system and that being said Evan has his
283. 10:40brother named Chris uh Shunk he's a
284. 10:43little bit older than Evan I was hiking
285. 10:44with him in Yosemite as well
286. 10:46and he's done very well you know he's
287. 10:50probably the best
288. 10:51person that I've seen do trading in in
289. 10:54such short time and a lot of that has to
290. 10:56do with one Evan already had a system
291. 10:59figured out and taught him and two he
292. 11:02followed the system and it made him
293. 11:05profits but and now he does his own
294. 11:07analysis and now he does his own
295. 11:08analysis so how do you think that
296. 11:13you helped your brother out so much
297. 11:16um
298. 11:17compared to seeing other people try to
299. 11:20take on students or other people that uh
300. 11:24just can't really teach kind of what
301. 11:27they do like we know there's a lot of
302. 11:29very fraudulent people out there that
303. 11:31are teaching absolutely you know scam
304. 11:34scam stuff where they're having people
305. 11:36chase their buys and they're dumping
306. 11:38into them we've seen it all in the in
307. 11:40the penny stock market it's the wild out
308. 11:42west out there so how do you think that
309. 11:46you've been able to really have a 500K
310. 11:49student my my brother is he's actually
311. 11:51he's a really good learner he's always
312. 11:52been a really good student and he knows
313. 11:54how to he knows how to learn well he
314. 11:56really does he's always had that about
315. 11:57him growing up he um but the other thing
316. 12:00that I want to mention is that it's also
317. 12:02because I really think System trading is
318. 12:05really good for beginners for beginners
319. 12:08when you do discretionary trading you're
320. 12:10You're Gonna Lose so hard the first
321. 12:12probably two years it's hard to really
322. 12:14get the feel on the pulse on the market
323. 12:15it's taking Jack Jack how long did it
324. 12:17take you to find that pulse to release
325. 12:19yeah it was about two years maybe 20
326. 12:21months from me before I turned a
327. 12:23profitable one and and that in in
328. 12:25discretion it's a really hard to master
329. 12:28that pulse in the market of when it's
330. 12:30time to get out and when it's time to
331. 12:32get in but for System trading you have
332. 12:34rules and data backing up all your moves
333. 12:36so it really can keep your emotions down
334. 12:39and and allow you to build something
335. 12:41predetermined of knowing when you can
336. 12:43get it in and out all the work will come
337. 12:45from actually not the market hours but
338. 12:47from outside the market hours of knowing
339. 12:50if this criteria comes I know exactly
340. 12:52what to do and I know exactly what to
341. 12:54get out because I tracked years of data
342. 12:56of this and um all my moves are now
343. 12:59predetermined and planned and with that
344. 13:02it can really set a beginner's you know
345. 13:04emotions up to I mean can really set
346. 13:08your emotions up to keep them away and
347. 13:10not to act on those you know not act on
348. 13:13fear or not act on uh you know greed or
349. 13:17anything like that because you've
350. 13:18already predetermined everything and it
351. 13:20keeps your your trading in check I feel
352. 13:23system trade and I think it's good for
353. 13:25beginners because then and then also
354. 13:26when you go through the data it will
355. 13:29also help you with discretion because
356. 13:30you'll watch you'll see the price action
357. 13:32and it will allow you to like if you
358. 13:35start with System trading it's a good
359. 13:37starting because you're getting an idea
360. 13:38of how these patterns move and you'll
361. 13:40get an idea of how they do everything
362. 13:41with predetermined checked and balances
363. 13:44of when to get in and out uh and it will
364. 13:46actually eventually you can then move
365. 13:48into discretion because I'd also do
366. 13:51think discretion
367. 13:53you
368. 13:54what was it I I read it in a trading
369. 13:57Wizards it said discretionary Traders
370. 13:59have more odds I feel like it wasn't I
371. 14:01forget from exponential growth
372. 14:02exponential growth it's rare for system
373. 14:05traders to see that exponential drill
374. 14:07but there are outliers there are system
375. 14:09traders that do have exponential growth
376. 14:10but it's more common to see
377. 14:13discretionary Traders I feel like to
378. 14:15really hit that exponential growth
379. 14:18um
380. 14:18and I think that's because I'm not
381. 14:21really sure but I I feel like it's
382. 14:22because uh what do you think it is I
383. 14:25think I I think that um system Traders
384. 14:28have
385. 14:30more drawdowns than discretion Traders
386. 14:32for the most part yeah a really good
387. 14:35discretion Trader can
388. 14:38have
389. 14:39you know they can stay at their Equity
390. 14:41highs uh more often than system Traders
391. 14:45like system Traders are going to have a
392. 14:46bell curve no matter what and a bell
393. 14:48curve is something like you have a line
394. 14:50kind of going through your Equity curve
395. 14:51and you have bounds up and and leaps
396. 14:53down and kind of trending up and you'll
397. 14:56see that with a lot of the system Equity
398. 14:59curves but sometimes with discretion
399. 15:00Traders you can see them just make money
400. 15:02go sideways make money go sideways
401. 15:05um yeah especially if they're cutting
402. 15:06their losses uh quickly and if you can
403. 15:08do that over and over and over again as
404. 15:10a discretion Trader
405. 15:12you have that bankroll and those odds
406. 15:15and that size to to scale more than
407. 15:17taking those those losses yeah that's a
408. 15:19good answer I I believe that as well
409. 15:21because every system does have drawdowns
410. 15:23and there's there's no avoiding it and I
411. 15:25would say the drawdowns would be worse
412. 15:27than uh you know a really masterful
413. 15:29discretionary Trader absolutely and
414. 15:33that does take into consideration that
415. 15:34if you are a discretion Trader you can
416. 15:37lose way more than the system will allow
417. 15:39you so if right if you're making money
418. 15:41as a discretion Trader and you make
419. 15:43money with one strategy or two or three
420. 15:45strategies where it's working
421. 15:48for three months two months whatever it
422. 15:50is and you think you've mastered the
423. 15:51stock market
424. 15:53um and then you start to lose and you
425. 15:55start to go bigger because you know the
426. 15:56pattern is going to work and you just
427. 15:57continue to lose lose and you'll end up
428. 15:59giving everything that you made back
429. 16:00whereas A system can kind of cut off
430. 16:03those losses a bit quicker and you can
431. 16:07you can see it and analyze it whereas
432. 16:09sometimes discretion you get so caught
433. 16:11up in your head so caught up in your
434. 16:12emotions that before you know it you've
435. 16:14blown up yeah yeah System trading does
436. 16:17allow you to be uh keep your emotions
437. 16:19out of it it really does I literally
438. 16:21just set my trade and I walk away from
439. 16:23my computer I just put a stop loss and I
440. 16:24don't even watch it sometimes sometimes
441. 16:27I do sometimes I know depending on my
442. 16:28schedule
443. 16:30and now just to kind of finish up the
444. 16:33interview I want to have a question here
445. 16:35for Evan about
446. 16:37what are his goals for the short-term
447. 16:40and Midterm and the long term and where
448. 16:42he sees his trading going over the next
449. 16:44decade are you still going to be trading
450. 16:45the next decade or is this just
451. 16:47something where you're looking to make
452. 16:48money and do something else with your
453. 16:50life no I'll be trading I with my whole
454. 16:53life I love it I mean it's my passion I
455. 16:55love analyzing finding new patterns I'm
456. 16:58finding a new pattern right now with my
457. 17:00brother actually actually he's the one
458. 17:01that found this new one and
459. 17:04um and I love doing that and I also I
460. 17:07like teaching it as well I think I plan
461. 17:09on opening up a room maybe next year to
462. 17:12teach people how to system trade
463. 17:15um
464. 17:16and uh I plan to look I plan to get
465. 17:20where Jack is right now in his career
466. 17:22that's that's my goal to you know get to
467. 17:24that multi-millionaire Trader status
468. 17:26um
469. 17:27and that's that's where I see myself
470. 17:30all right man cheers truce to that dude
471. 17:32I believe in you thank you and that's
472. 17:35really it if you want to be a boring
473. 17:37system Trader come to Venice California
474. 17:40later guys