Line Your Own Pockets

Michael: 00:00

Okay, everyone. Welcome back to a brand new podcast called Line Your Own Pockets with myself, Michael Nas, and my co host here, Dave Mabe. So this is episode 1. We're gonna kinda introduce ourselves. We're gonna introduce what we're doing here.

Michael: 00:16

We're gonna introduce why we think the world needs another podcast, and why we think that, this one should be one to check out if you're nerds like us, and you're more into that kind of systematic style trading. But let's actually just get started with with who is who are we. You know, you may have stumbled across us from presence we have online, other conversations that we do, but, Dave, let's actually pretend. I have no idea who it is. Just click play on a a video or a podcast somewhere.

Michael: 00:46

Why don't you introduce yourself to the folks?

Dave: 00:49

Okay. I'm Dave Mape. I've been the CTO of Trade Ideas for some time now. I've been a trader for over 20 years. Started out like many traders as a discretionary trader, and over time, I just became more and more systematic.

Dave: 01:06

And it wasn't, like, all at once. It was over the course of several years, several steps involved. And I just knew that was for me, and there wasn't any playbook at the time. There were wasn't an instruction manual for doing that. This was just me coming up with ideas about how to get more systematic until I'm, you know, completely automated with most of my trading.

Dave: 01:29

So the way I think about this podcast is this is the podcast that I wish I had 10 years ago. It would've saved me a bunch of time, a lot of heartache, a lot of work. So I want this to be a podcast for that kind of person that wants to be systematic, and we'll just save them a bunch of time.

Michael: 01:52

Cool. Yeah. So just introduce myself quickly. I'm bike loss, obviously. I'm a Charter Market Technician.

Michael: 01:58

I'm also not as systematic as Dave is, but I'm a semi systematic trader as well. I've been, consulting now with trade ideas for again, we'll just say a number of years. That's what I think it's a sign that you're getting old when you no longer track the years that you're doing things. You just did this a while. I've been doing it a while.

Michael: 02:18

And then, yeah, I've also been trading about 20 years way back in 2006 where I started, you know, when both me and Dave started, I would say systematic trading probably wasn't even really a thing. Most things were done, you know, brute force by hand, and then over time as computers have gotten better, as as systems gotten better, as data has become better and and more accessible, this is a field that's been opening up and growing so I've been following down that road as well from a little different angle as Dave. So we'll get into that soon. So, you know, we we kinda let it slip. I guess what we're gonna be talking about in this podcast, but we can we can go a little bit further on that now as well.

Michael: 02:58

So the idea here is that there are, you know, a lot of podcasts out there that cover, you know, latest news in the market and and macroeconomics and trends and and things like this. As 2 guys who are, again, in the systematic style of trading and and, looking more of the market from, you know, mathematics and algorithms and and type that type of world. Like Dave was mentioning is that we think that there is an area in which is not unexplored, but underexplored, let's say, in in the space where we wanna kind of talk about our journeys, which will be the first part of the podcast. We're gonna talk about our journeys about, you know, why and how we got into systematic trading. We're gonna talk about, you know, things that come up for systematic traders, you know, little tidbits as time goes on on on how to build systems.

Michael: 03:56

And like Dave was talking about, I think this is gonna be an amazing podcast for somebody who is either into systematic trading and wants to go deeper and wants to learn more, or somebody who's kinda like us. And and at one point was flirting with the, do I want to be a discretionary trader? Do I want to be a systematic trader? And and where will I fall kind of on that horizon and on that scope? So, so yeah, Dave.

Michael: 04:19

So give the people just a little bit more detailed outlook. Because I know you've been thinking a lot about this, and we we have the first couple can already planned out. I'm seeing on my screen. But what could people expect if they're gonna start tuning into this over the next, you know, handful of weeks until it just evolves into wherever, you know, natural forces take us.

Dave: 04:39

I would like the podcast to become, like, the go to place for traders trying to get more systematic, to have ideas to how to move their trades forward, how to move their systems forward, how to come up with new trading edges that they haven't thought about before, and what the how they can work that into their discretionary trades. So I look at it as sort of, an instruction manual. You know, there's a lot of you know, you hear some, podcasts of interviews with systematic traders occasionally.

Michael: 05:14

Mhmm.

Dave: 05:14

But, you know, that's just an hour long maybe, and they kinda gloss over some of the details. There's nothing really out there that tells you how to come up with systematic ideas, how to come up with new trading edges that work. And that's what I'd like for this to focus on, and that's what I think the listener will get out of it.

Michael: 05:35

Yeah. And and, you know, we're gonna go deep. That's that's kind of the point is that a lot of people I think unlike things like, technical analysis, where a lot of that can be done very easily upfront with people watching. You can annotate your charts, and you can point to things, and it becomes very visual and easy to understand. With systematic trading, it seems like a lot of that is done behind closed doors with, you know, long hours of, again, coming up with ideas and testing and refining and optimizing ideas.

Michael: 06:04

And that's all done kind of in in secret and silence, and then people come out and maybe talk about results or or things like that. So what I wanna really end up doing is getting deep into the nitty gritty of the exact processes to come up with ideas and to optimize those ideas and to tweak those ideas, as well as, you know, if we start seeing things that start to come through, that'll be fantastic. And then, lastly, as always, both me and and Dave, we have social medias you're seeing below. We have following. Eventually, when we're, you know, through the point that we think we absolutely need to talk about, I wanna start talking to you guys as as users.

Michael: 06:42

So, you know, if you're seeing this wherever you are, leave comments and ideas and suggestions and questions. You know? It's the point of this is we're trying to, you know, to to nerds, chatting about nerd stuff is always fun. But, you know, we wanna leave something out there to teach and and to to help the community. So you guys, as the community, make sure you're you're giving us feedback as as you go.

Dave: 07:08

So maybe we should touch on the name, line your own pockets. What why we come up with that? I I look at this podcast as something targeting traders who know that the secret to their success is not gonna be following what somebody else does.

Michael: 07:27

Mhmm.

Dave: 07:28

Now there's a whole lot of great marketers out there in this business that are trying to get you to join a chat room, get you to, pay them money each month. So the name line your own pockets implies that, hey. You that the only way to true trading success is to do this yourself and not take any advice or look over the shoulder of anybody else and do it yourself. So hence the name.

Michael: 08:02

Yeah. The it's, you know, DIY Trading. Right? So there's, you know, there's people out there who, you know, they want to be, you know, discretionary. There's people out there who wanna be based off technicals or fundamentals or or whatever.

Michael: 08:18

And I do think there's already a lot of discussion and education for those people, for the people who want to do discretionary trading, or or they wanna do all these different types that are are very common. The instruction of how to do systematic trading, I think that's really what we wanna we wanna hit on a lot. And that's again, to go to the names, align your own pockets is the idea here is if you are someone who's interested in building your own systems, is that as you watch this podcast, hopefully, you're learning as you go, and and you're taking things away and you're working on your own systems and you're able to take some of the knowledge that we give and take that, again, back to your own your own layer, your own dungeon there, and and clock away until you get something that works for you. Because, the more closely you work with a system, the better you'll understand it. The better you understand when it works and when it doesn't work, and and when it needs to be tweaked and all of that.

Michael: 09:11

And that works way, way better than, you know, looking at other people's systems that, you know, they may work for a period of time, they may degrade, and and you may not know why. You may be, you know, looking at the system the the moment it stops working. Or you may be looking at the system and trade it for a week, and that's, like, the only week it doesn't work, and then you move on. So understanding these these, depths of a system, I think, is super super important. So, we already touched on this on a little bit, but the note I have here is we, you know, we have to go into the the why, I think, a little bit deeper, and, you know, why do we think of all of a the forms that we could come up with, you know, there's blogs and, live streams and all the different ways that a, we think a podcast is the best suited for this, and go a little bit deeper into the, you know, why we think that absolutely we need to make this podcast.

Dave: 10:07

I think a podcast is a great format, and a weekly podcast specifically, I think is a great format. You know, traders are known for sitting behind monitors all day, and that's really not when most people listen to podcasts. And that's really actually not when you have the most trading ideas and most, opportunities to ponder about things. I listen to a lot of podcasts when I'm exercising, when I'm walking around outside of, you know, my behind my training monitors. So I think it's a great format for that to for people to learn, you know, away from the trading desk.

Michael: 10:48

Yeah. I'm I'm the same way. I I went for a long walk in the woods. I got a lot of woods back there with the the dogs. And my iPhone notes app was, like, almost full when I came back out.

Michael: 10:59

There's a couple times I just would stop and lean against the tree, and I'm like, oh, that's an interesting idea. I should test that when I get home, and I I should try that. So, yeah, I think that this kind of medium really helps for that. You know, whether you're watching this on YouTube or whether you're you're doing whatever, it's a nice way that you can watch things on the go or you could check it out, you know, when you're not working in the background while you're cooking or whatever. I'm I'm, I've got these things, these AirPods in my ears, like, pretty much all day.

Michael: 11:30

So the to the detriment of the wife for sure because there's always I'm always listening to something. So, you know, again, why why do we think the world, I guess, needs this? Do you wanna touch a little bit on that? And, you know, it's grand a little philosophical here, but I think we both have good answers for this.

Dave: 11:49

I just think that, you know, when I started trading discretionarily, as soon as I started thinking systematically about what I was doing, my discretionary trades got better.

Michael: 12:03

Mhmm.

Dave: 12:03

I was able to come up with new trading edges that were in addition to the discretionary trading I was doing. So I think if they feed off each other, so you don't have to be 1 or the other, discretionary trader or a systematic trader.

Michael: 12:19

Yeah.

Dave: 12:20

They go together, and there's no you know, the the lines are blurred between those, and those are the kinds of things that I'd like to delve into on this podcast.

Michael: 12:29

And I think that's a really good distinction that, yeah, we we definitely have to make when a lot of people I think when they think systematic, they immediately think that it has to be some sort of black box. It has to be the computer has to do everything for you. And, you know, for myself, that's that's not the way it works. And for most people, I think that's generally not the way it works. So when we see, say, systematic, essentially, we're talking about a rules based approach, you know.

Michael: 12:54

I do x when y happens, and I have some sort of, statistics. I have some sort of reason that I can point to to say what why that occurs. And I would argue that all great traders are in some respects systematic, even if they call themselves discretionary. They have, you know, a a list of setups that they go to. They have a list of securities that they're watching.

Michael: 13:16

They have, some sort of process. You know, think of your momentum day trader who's, you know, I'm gonna look at all the gaps in the morning, and then I'm gonna read the news for why those stocks are gapping, and then I'm gonna for, you know, these levels to get traded on. And these are the people that we would think is the most discretionary traders, but they're still in a sense systematic. So when we're saying systematic, we're not necessarily meaning, you know, complete automation or fully automated. What we're saying is that most traders out there, I think, the problem that a lot of traders have is they believe that, you know, the secret to trading is that, you know, a good trader can just bring up a chart and say, I think this is gonna go up or I think this is gonna go down.

Michael: 13:57

And that's how trading works. Where in reality, again, for traders who are generally successful, it's more about I have the series of rules and the series of setups, the series of things that I look for. I'm going to find a way to scan for those and and to detect those things when they occur, and I'm going to enter with a certain position size, and and I'm going to hold for a certain length of time. I'm gonna do that. And, I we didn't even talk about this, but I'm gonna ask you anyway.

Michael: 14:25

Why do you think most media and most podcast don't talk about that? Do you think it's a it's a content thing or or what? It seems to be if you tune in to most places, it's like, well, what's gonna happen with NVIDIA as opposed to, you know, hey, what are the statistics of this moving average crossover system versus that one?

Dave: 14:47

I think it's probably because most financial media are creating content so that you'll come back, and if you give them rules, you know, specific systematic rules, you tell them how to come up with their own rules, that's it. Like, they're you're inherently teaching them something so they won't come back to you. So I think that's it's sort of off orthogonal to what the main stream financial media is all about.

Michael: 15:17

Yeah. And it's I also think, you know, the again, the whole line your own pockets, the the idea of people wanting to do it themselves. I think there's some of that, and I think there's just some of the, this podcast is gonna be a very specific audience. A very niche audience of people who do want to get in, and and get their hands dirty, and, you know, develop these things themselves. I think even though it's it's generally speaking going to be the rest the best thing for people to do, I you know, it's like the same thing.

Michael: 15:48

The best thing for people to do is to diet and exercise, and then Ozempic comes out, and and that's what everyone's doing. So, at the end of the day, I think it's one of those lead a horse to water. So if you are one of those people and you're watching this and you're saying, oh, great. Finally, you know, a place that I can sit down and I can once a week listen and and start to get into that systematic trading. I really think that this is gonna be for you.

Michael: 16:11

Me and, Dave have been talking about this now for probably a month or so at least. And, the more we got into it and and the more we talked about, you know, what what we wanna do here, I I think the more excited that that both of us got.

Dave: 16:26

Yeah. It I've been thinking about this for over a year now. And, you know, when we I was on your podcast where we did a meet the team at trade ideas.

Michael: 16:35

Mhmm.

Dave: 16:36

And I think we just had a great rapport. I mean, you've been doing this a long time. You're, you're great. So I I think the rapport that we had there made us both think, wow, there's there's a lot we could do with this. This is, this is gonna be really great.

Michael: 16:51

Yeah. And and, again, I'm I'm just excited because it's just so different. Right? There there's so many podcasts out there, and and me and and Steve do one where it's both the the headlines of the week, and the the spin and the take we have on that is that we wanna kind of ignore those headlines and go in and and see what the the data is showing them. And that got and is still getting really, really good reception showing that there is that market out there for people who are just sick of, you know, I I'm gonna come up with this headline, and that's gonna explain to you why the market moved.

Michael: 17:20

Of course, always after the market moved. Right? You always say, you know, you tune in to any of the news networks. It's always NVIDIA was up on this news that we're telling you now after it was up and the news came out.

Dave: 17:32

Of course.

Michael: 17:32

It's never it's never, oh, this news has been reported that's probably gonna move the the stock up. It's always after the fact. So, more and more people I think are interested, and I think there's a a big growth of systematic traders, and I think a lot of that just has to do with time. You know, for me, one of the reasons I got kinda more into the systematic side of things, I got a lot of other things that I do. Right?

Michael: 17:55

I'm I'm I'm publicly speaking about trading a lot. I love looking at the whole chart side of things. I love the technical analysis side of things, so I do a lot of that. So as people become busier and busier, and technology becomes better and better, you know, I think you're getting a grab big gravitational shift towards this style of trading where, you know, people may not have the time to analyze a couple hundred charts tonight. So they need a system to say, here's 5 names to look at, and this is the way you should trade them based off your back test, and then kinda go from there.

Michael: 18:27

So I do think we're gonna be filling a niche, and I think we're gonna be filling, actually, a niche that will be be growing over time.

Dave: 18:36

Yeah. I'm excited. This is gonna be great.

Michael: 18:38

Awesome. So again, wherever you're seeing this now, because we're gonna be posting it everywhere. This is where you'll be able to see it every week. We're still gonna come out with a exact time for pushing it. But, Dave, I know you've been setting up something where people can go and make sure they're alerted when a new, a new episode comes out.

Michael: 18:59

So can you talk a little bit about the the website that you've got and and kinda what's gonna be there?

Dave: 19:07

Yeah. It's called line your own pockets.com, and you there's a, email sign up where you can be notified the instant the the new episodes are released. And any other news about the podcast that we send out over time.

Michael: 19:22

Yeah. So make sure you're signed up there. It's it's the way that we can definitely notify you. But again, wherever you're seeing this, right, subscribe or or follow or or like or whatever. And, and do us a favor with specially, because we're brand new.

Michael: 19:36

We're just getting started here. These algorithms that push content to people, they really like interactions. Again, likes and hearts and and comments and ratings or whatever that is. So if you're interested in this kind of, if you're kind of podcast, if you're interested in this topic at all, just do us favor and, you know, hit all those things so that, you know, we can get pushed out to more people and maybe more people can see this and we can kinda push them in the direction of the systematic stuff. So if anything left to leave the people with there, Dave?

Dave: 20:08

I don't think so. I'm just excited about doing this, and we'll see you next week.

Michael: 20:12

Awesome. See you next week. Talk to you then.