Line Your Own Pockets

Michael: 00:00

Alright, everyone. Welcome to another episode of Line Your Own Pockets. Today, we got an interesting one. We're gonna talk about a little bit deeper into the whole position size thing. If you miss it, couple episodes ago, we actually did a whole episode on the idea of, you know, how to size up in overall strategies, how to size up in systems that are doing well.

Michael: 00:19

Today, we're gonna dive a little bit deeper into that and talk about, you know, when is it okay or when does it make sense to maybe take a trade a little bigger than some other trades sizing up in, you know, higher conviction type setups. So, Dave, you brought this topic to us again. Let's get us let's get started. I think I think there might be some disagreement with this one, which I think is will be very interesting. Awesome.

Dave: 00:42

Yeah. So this is I think of this topic as one of the, maybe, five different ways to actually improve a strategy. And I'm gonna probably gonna do a webinar about this whole topic, like how to improve any trading strategy. This is, like, one of the most advanced parts or ways to do it, but it's the most powerful, I think. And you can really make a big difference in a strategy if you can do this.

Dave: 01:13

So this came out of one of the free calls I do. People on my newsletter know that, you know, I will occasionally do free calls, and, you know, a lot of people take me up on it. So it's super fun, and, you know, there's no not a sales call. I'm just, like, happy to help and trying to help as quickly as I can and meet new people. It's super fun.

Dave: 01:35

But this came out of one of those calls. So I had a free call with, somebody who's a trader in Florida. And it was really interesting because he said, yeah. I've been trading for ten years. I've made money every year, but I'm thinking about quitting.

Dave: 01:55

And I was like, wow. Okay. Why? You know, what's going on? He felt like he had was sort of he he could see his strategy tailing off a bit.

Dave: 02:06

So he it was hard for him to look far into the future and think that his you know, he had room to improve. So as we as we talk more about it, he he's a basically, a discretionary trader, but he trades his systems. Like, it's it's rule based. Like, it's not automated, but it's definitely a system. And he had he's been doing it for so long.

Dave: 02:30

So and I said, well, yeah, have you looked into automating those orders? You could probably, you know, free up some of your time, systematize some of those orders, and maybe expand the number of trades that come through your system to make more trades. Like, no. I'm not really comfortable doing that. He's just very comfortable being a discretionary trader.

Dave: 02:55

So K. The next thing I said was, okay. Do you have do you feel like you have the ability to identify which trades are your best trades from the system. They said, oh, yeah. I know exactly when when the best ones come along.

Dave: 03:13

I said, well, then I think what you should do is truly, really identify that. Verify that you can do that, and then take those with bigger size. And this is not something he'd considered before. And you you usually a lot of people a lot of traders will say they can do this, but when you look at the numbers and you look at the results and you you identify the the ones where they have the highest conviction, sometimes it just doesn't really pan out. They don't really think they have, that they think they have they can identify the the best trades beforehand, but they really can't.

Dave: 03:53

But I could tell by talking to this guy that he could. Okay. So that's the plan we came up with to, you know, figure out a way to classify, like, the regular trades and then the high conviction trades. Do that for a little bit and then verify the results retroactively, and then start taking those with bigger size once you get that confirmation. So I I don't recommend this for every strategy, but this is definitely they're they're definitely this is probably one of the most powerful ways to improve a strategy and make more money with it.

Michael: 04:40

So this is interesting. So kinda right off the bat, my first question behind it is, in that case, a, why are you taking the trades at all that would be kinda lower down that list? I guess it could be a frequency thing is the only thing I can think of. But but more importantly, isn't it just kind of a new strategy at that point? So say you've got, you know, oh, I'm buying fading gaps, and that's what I do.

Michael: 05:06

I fade gaps. I want to look some of the gaps up, and it breaks down view app, and I short it. But I know that, you know, if the RSI is this value, that that's gonna be a higher conviction trade, or or if the gap is this big, that's a higher conviction trade. A, doesn't it just make sense to to wait for that as opposed to kinda going in there as and and just taking things a little bit more willy nilly? But, also, yeah, like, why wouldn't you just take those trades and just not take the other ones?

Michael: 05:35

I guess it would be the first question. I got I got a couple here, though. Yeah. So the

Dave: 05:41

reason is maybe this is just 10% of the trades in the system. So it it's if you did that, then maybe there's not enough, frequency. So but you but you you bring up a good point. It is sorta you can kinda think about it as a different system. And oftentimes, that's the path.

Dave: 06:02

Once you start doing this, you can get to the point where, gosh, I I can tell that these are the best grades. So why am I taking these other ones? That's that's a great question and a great point. Maybe you find more on the lower end that you shouldn't be taking from what you've learned by identifying the highest conviction trades. So it just opens up a whole host of different ways to improve your strategy.

Dave: 06:31

See, the problem is most people just think are thinking in these binary terms. Does, you know, does it meet my criteria? Yes. Okay. Trade it with the standard size.

Dave: 06:41

Or does it not meet my criteria and don't take the trade at all? There's a whole once you really understand your your strategy fully and understand sort of what makes it tick, there's a whole host of ways to improve it. Mhmm. So it's it just opens up a lot of opportunity, and it's it's something that most traders don't think about. And it's like I said, it's sort of an advanced thing.

Dave: 07:09

You really have to know under what circumstances do your trades work really well.

Michael: 07:16

Well, I I think so I think that's gonna answer kind of my second question is because you mentioned, this person was discretionary kinda mostly with their trading. And how would someone do that if they were, you know, more like you who is is fully automated in what you do? And then the answer that just kind of immediately came to mind from what you're saying there is you just kinda treat it like a a second strategy. So you would I'm just thinking, like, the actual kinda nitty gritty behind you would code them up differently, And you'd say, if this occurs, take it with this risk. And if this occurs, take it with with the other risk.

Michael: 07:50

So I guess the hard part then would be just really proving yourself that it is it is worth that increased risk. So you'd need to be able to have that that data that you can go through and say, here is the the quantitative difference between these two, and then, you know, here's what happens if if I were to size up in that that position.

Dave: 08:09

Yeah. And, you know, I think discretionary traders, a lot of them sorta do this by default kind of.

Michael: 08:19

Mhmm.

Dave: 08:20

And with this guy, I I could tell that he was trading a system. So, yeah, it's discretionary. He's not, you know, he's not having a program make the trades, but he's being systematic about it. This is not, you know, he's not trading with a whole bunch of gut feel and you know? Like, he's trading a system.

Dave: 08:38

He's got rules. He he knows what he's doing.

Michael: 08:40

Mhmm.

Dave: 08:42

So so the reason the the first time I started thinking about this was so several years ago, a friend a good friend of mine got me into poker, Texas Hold'em. We made several trips to, there's, like, two or three local casinos. Well, they're not local, but the closest ones are, like, a four hour drive. And we would go to Vegas. Like, we I really got into it.

Dave: 09:08

And then my thought was, gosh. You know? I'm I'm good at trading. I think why can't I be a good poker player too? I think that'd be super fun.

Dave: 09:18

And I think I was my plan was, okay. I could probably learn something from poker that I can apply to trading somehow. And we could probably do three or four episodes just about poker. But Yeah. My main takeaway from the poker world was great poker players know when to go all in, and they know they that they have a good handle on their risk, and they know when to push it to their limit.

Dave: 09:47

So that was sort of my takeaway from that world, and that's what got me thinking about, okay, good poke good poker players can do that. How can I apply that to my trading strategies in a similar way? And that this is what I came up with. And, yeah, it's not every strategy can do this, but there are certainly certain strategies where you can do it, and it makes a lot of sense to do, and it's super valuable.

Michael: 10:23

Yeah. So I guess my next kinda question on this is, like, how much of a difference are you talking about? Now, ultimately, you know, testing will will hammer all this out. But you're not saying because this strategy I have is a 90% win rate to then go all in on that. There's there's some variance between what would be a a normal trade and then what would be, something that you'd really size up in.

Michael: 10:47

And is that just gonna be, you know, fully from the data? And then, again, what kind of because there's a moment where trading one strategy so big almost negates the gains or whatever from something else. If you're making, you know, $20,000 when you're right in trade a and you're making $200 and when you're right in trade b, then there is a kind of diminishing return where, well, even if I only get, you know, trade very infrequently on that other one, I should still just focus on on more of these that I can trade really big. So, what's the delta between, I guess, normal and and sized up for you?

Dave: 11:24

It it it all depends on the strategy. I've got some where the difference is pretty small, relatively small. Mhmm. But then there's others where it's huge. And, literally, I'm using all my buying power when this comes about, and I, like, get all in and, like, literally use all my buying power in these situations.

Dave: 11:46

So it and some strategies, like, 50% of the annual profit comes from these trades. Like, it it could come from just a handful of trades. So it it depends on the strategy, but with the right strategy where you can take advantage of this, it's I'm telling you, it's incredibly powerful.

Michael: 12:06

Well and we should for the newer audience, we should really define all in as meaning I'm putting all my buying power in with a protective stop. Right? It will probably hit me harder than I would like if this, you know, if it's a negative trade. But, you know, again, I I know that 99% of the audience knows that we're just saying controlled risk, just more risk. You know?

Michael: 12:30

Again, if you normally risk a hundred bucks on a trade, maybe you're risking, you know, a 500 to a thousand or or something like that. We're not saying all in as in, right, I put all my chips on the table, and and if this loses, I'm gonna have to sell my house kinda kinda thing. Just in case. In case there's that one guy who's like, oh, well, I'm fairly confident when this happens, so I'm gonna go all in there. Yeah.

Dave: 12:53

So so there's another reaction I get from traders when I suggest this, and that's, oh, I can't possibly tell the difference or, you know, detect any difference between trades that match my criteria and like, there's just no difference. They're all basically the same. And my reaction to that is, well, you're already doing this whether you realize it or not on some level. Because just think about the trades you're taking now in a system. There's some that you're not taking, though you're essentially taking some trades with, you know, a % of your size

Michael: 13:36

Mhmm.

Dave: 13:37

Your standard size. And then there's another set of trades that you're taking with 0% of your or of your size. So you're already doing this on some level whether you think about it in those terms or not. So that tells me that you're you know, don't tell me that you can't differentiate some of the trades you're already taking and have like, there's just they're all equal. There's just no way they're all equal, I can tell you.

Michael: 14:04

Well no. And and that to me just kind of reeks of someone who just doesn't have either a back test in in the way that, right, we do when we're we're systematic, or they don't have the data recorded if they're if they're more discretionary. Because if you have the data, then it's just the amount of of work. Right? And it could just be as simple as throwing a bunch of standard indicators in there and saying, right, we what if, you know, you're above or below this or, right, this value is that, that value.

Michael: 14:32

So, yeah, the only way I could say that you couldn't tell which one's better or worse is either the amount of data or access to the data. But the the kind of counter I would have to that would be that that lack of data. So say that person is is very discretionary. They still do the very basic journaling, which is something that I I we could do in a future episode is kind of what to record. But say they're just recording entry and exit and, you know, money made and and all that kind of stuff, and they're not really recording the intricate values of a series of indicators or, you know, how much the stock is gapped or how much what the news is.

Michael: 15:09

But, yeah, I agree. The only way that they couldn't do that is they just don't have the data. I I would imagine to make sure that they're they're able to grab that.

Dave: 15:17

Yeah. There there's so there's another I mean, like like I said, not every strategy would make sense to do this for. And and one type of strategy is one where there's there could be a lot of tail risk. So you you really Mhmm. Don't wanna be taking big size with some of the some of the trades in there.

Dave: 15:40

So that that's kind of a hurdle that people some traders can't get over. Yep. When that happens, like, if you got a strategy like that, thinking about this approach should make you take a step back and think, okay. The tail risk I see in this strategy is significant enough that, like, I can't I can't take this other path, or I'm not comfortable taking this other path, which I know has the potential to improve strategies. So in that case, I would take a step back and maybe continue to trade that strategy in the way you're doing it.

Dave: 16:24

But think about how could you design a strategy that doesn't have as much tail risk that you can employ this type of technique with?

Michael: 16:33

Well and I think kind of what you're describing there just comes into the importance of of multi strategy development and multi strategy testing because, yeah, you could have and and just off top of my head, I'm thinking something with a large amount of tail risk but makes a good income doing it would just be, like, simple mean reversion, you know, things like that. Right? You're you're buying gap downs. You're shorting gap ups. You're for day traders or, in my case, you're just buying oversold type plays.

Michael: 17:01

That's something that generates a pretty positive equity curve and does well over time, but every now and then you get slapped or or selling options for you derivative people out there. Right? It's it's something that over time, selling options does make money, but every now and then you get taken to the woodshed when when a large volatility event occurs. But the the opposite would occur, just to use the option analogy, still the opposite would occur if you are if you're buying options. Right?

Michael: 17:26

So, you know, you're looking for the other way around. Most times, you'll be wrong because of premium decay and all that, but every now and then, you'll knock it out of the park. So, yeah, it it's one of those kind of balancing games where probably in the best world, the best scenario, you have, you have a bit of both of that, and then you're just kinda balancing, you know, which one of those kinda makes the most sense at the right time that you're you're you're looking to take that trade. So, again, I think it all comes down to and then, again, something that I've been, doing a lot of and leaning even more on is just more more strategies and then just weighting them a little bit different where you've got the one that will do well during time a and then the one that will do well during time b. Because of what I'd imagine you'd find and probably not universally true, but probably pretty close to being universally true, is the one with the large amount of tail risk probably isn't gonna trigger around the same time that the one, you know, with less tail risk because they're probably somewhat uncorrelated in that way.

Dave: 18:29

Yeah. It's it's that's possible. So the way just for the for the listeners out there, like, how would you get started doing this if you've you've never thought about this before? How would you tackle this with the strategy you're trading? Obviously, you don't wanna take a stab right away.

Dave: 18:49

Like, get get some data to figure out when you should do it and if it's possible for you to do it. So the way I would do that first is, you probably have some sense. You have probably have a couple theories right away about, okay. I think these are likely to have more edge than the, like, maybe, you know, higher relative volume, like, in some extreme situation, like, some you've got some theory, probably. Mhmm.

Dave: 19:18

So come up with a theory, quantify that, and either backtest it or you don't even really have to change anything. You could all you really need to do is when you record these in your journal, assign a tag for, you know, theory one for high, yeah, high confidence. So and and just don't change anything about what you're doing except come up with a theory and assign the tags in your trades. So and then do that for a while, you know, and then go back in your journal and essentially test the theory by looking back and seeing, okay. How did these do compared to the other ones?

Dave: 19:59

And, you know, there's not a big there's not a whole bunch of testing you really have to do right away to get started thinking about it. And that can point you to you know, I I always talk about, you know, cost and benefit, versus, you know, the cost benefit analysis would do anything. You this is one of those things where you can go down a rabbit hole if you're not careful. Mhmm. So I always like to do the minimum possible to see if this larger effort thing is gonna be worth it.

Dave: 20:32

Yeah. So that you know, doing it with your journal this way, you can just, you know, come up with a theory quickly, start tagging those trades as they go into your journal, look at them in aggregate. And it probably would not be very long before you could confirm or deny the theory or at least see, okay. Is this worth the the lift that I'm gonna have to do to do some backtesting in this specific area with to prove this theory?

Michael: 20:59

Yeah. And I I like that. And it's one of those that, again, you're you're testing it almost like it's a a different strategy altogether. So when you're tagging it high confidence, you can just go through and, okay, sum up, you know, the average return or the or the total return and what the drawdown is on low confidence, and then do that again on high confidence. And if there's a meaningful difference, then you're on to something and it requires further testing.

Michael: 21:24

If it's roughly the same, then you're probably just got some noise going on that, you know, you think this thing occurs. But like we say with everything, that, to me, is also information. Like, it's one of those, your high relative volume, for example, if you're like, okay. You know, the thing that's really moving, I think, is gonna make me the most money, and you find out that, a, that's not true or, b, even say there's a world it's the other way around where your high confidence trades actually do less. Well, then you've opened up a whole another door where you're saying, okay.

Michael: 21:53

Well, maybe I don't take the the the thing at all. So every now and then you're thinking a high confidence trade is something that you've just kind of opened up your eyes and open up the doors to but I I imagine there will be a world in in many cases where people their high confidence trade they end up like that that I'm a net loser or not making as much on on my high confidence trade as my low confidence ones. And then that allows you to kinda have the data to switch your thinking. It's like, well, maybe I avoid any trades with a relative volume that's too high or or something like that.

Dave: 22:28

Yeah. It's it's difficult for people to think about, right away, but there's just I I really encourage traders to start thinking about this way in this way. Like, you get out of this binary thinking. Does it match my system or does it not? Mhmm.

Dave: 22:47

That binary thinking is sort of a little too simplistic when you really step back and think about how a strategy works and how you've designed it. You know? I I've had multiple traders, like I mentioned before, say, you know, I can't possibly figure out the difference between these. They're like, well, you already are. You're either taking it with zero size or a hundred size.

Dave: 23:15

And maybe there's too much tail risk to take the bigger end with bigger size, then you could take the look at the lower end, take those with smaller size. There's just like when you start thinking about it this way, there's just so many ways to improve a system. And like I've mentioned so many times on this show before, like, the the what's so exciting to trading about trading for me is the the bar for improvement and success is so small. Like, you you just tiny improvements can make a huge difference. And it's these kind of things that, can really can really you know, you can really improve a lot as a trader by taking this approach.

Michael: 24:03

Well and it it comes back to our argument all the time of these are the reasons to, become systematic and to become automated in a lot of your trading where, you know, there's I know there's discretionary traders that are listening to this. They say, oh, you know, I'm already spending the whole day watching the screen and every tick in the market. And by the end of the day, like, you know, I gotta look after my kids. Where am I gonna find the time? And that's why we always say, well, you know, try to automate your trading as much as you can because, say, you're somebody who is staring for six and a half hours a day at the screen and making decisions, and you get to the point where you can automate half of it.

Michael: 24:40

Right? Ideally, you automate all of it. You send out right? The system has taken care of all the execution, but say you automate half it. Well, you've just freed up three hours a day.

Michael: 24:48

That three hours a day can be now allocated to looking at yesterday's trades and going through these exercise we're talking about and and, you know, tagging different things and highlighting different things. So a lot of it for me personally, and this is speaking from experience, a lot of it comes with the the letting go of the kind of day to day operation. So if you're looking at trading like a business, which is something that we talk about a lot, you know, you're you're basically you're letting go of the the menial work, which is pushing the buttons to make the trades. And then that frees you up to do what would be the high level more, you know, CEO or owner work of coming up with new ideas, right, tweaking things that are going on. Because I just wanna do that because it's one of those that I kinda put myself in my old trader shoes and say, well, you know, if I was had my 15 monitors up and I'm staring at every tick and every stock all day long, I wouldn't have time to do a lot of these things.

Michael: 25:42

But that to me is is kind of a symptom, and the way to cure it is to become more systematic with your trading so that you can have more time to refine things and and to build new ideas. Or as we're talking about, just play with different sizing on the ideas you already have.

Dave: 25:59

Yeah. Yeah. I think there's, you know, traders will you know, a lot of traders have come up with one strategy, and then the next step they believe is, okay. Well, I have to come up with a completely new one that's uncorrelated to take it to make it to the next level. But in reality, there's so many ways to improve a strategy that's already working and get more money from it.

Dave: 26:29

And that is really and and the other thing about that is when you're already trading a strategy, you've already kinda done the hard part. You know? You you've you're trading it in and out now. You understand fully how it works and how it operates. You're not in back test world trying to decide you know, trying to figure out, is this gonna work in real life?

Dave: 26:50

You you already trade it. You know it works in real life. So it's a much easier thing to improve a strategy that's already working than come up with a completely new one from scratch. So, I mean, like like like I just say, the best way to come up with a great strategy is to start with an okay one and improve it. Yep.

Dave: 27:11

And there's just so many ways to improve a strategy. It's like, I I do these A lot of people will come to me, and I'll do these, strategy assessments. This is offering I have.

Michael: 27:23

Mhmm.

Dave: 27:24

Several traders have gone through it. There's not a single trader that has gone through there that I haven't been able to help them improve their strategy significantly. So I I can tell you, like, that I just know that there's there's tons of different ways to improve a strategy that it's it's working that people just don't realize.

Michael: 27:47

Yeah. And, again, I think if we go to the biggest culprit of that, I would say it's people not recording their data. That's that's where I would go back to of, something that, again, was drilled into me early. But if you're approaching this trading game from somewhere, that wasn't like like myself or the prop world or even you just being a a big data guy anyway, I think there's probably a large percentage of the populace out there that's trading that isn't recording these at all. Now the benefit is you don't need to record as much as you used to because in a lot of cases, your broker, your prop firm, or whatever will have good reporting on it.

Michael: 28:24

But, yeah, I think a lot of it is just that inability to to dive into the data. And I think that comes from a lot of and I'm speaking a little bit of experience here because I'm I'm getting back into this day trading world, is trading too many strategies kinda at what time and changing them too quickly so you don't end up having the data there. So I think that's kinda the root cause to a lot of this is people just not having that information in which to to look at and play the system. So I'd say if you're hearing this and this is kinda speaking on you on you to say, hey. I wanna I wanna be able to size up an x y z, area or position or whatever that I'm doing.

Michael: 29:00

I think, right, step one is really make sure that you're recording this data because you're gonna need it if you're gonna especially do something like, I'm gonna take these positions way bigger than these. You have to have that confidence in order to do it because what will inevitably happen is the first time you you push the button to size up in a certain position, that's just naturally going to be a loser. It's just the the nature of things. Right? So you need the confidence to say, okay.

Michael: 29:27

I understand that that's what's gonna happen, and I'm gonna get hit or hit harder. But I have the data here to kind of back that up and prove that over time that this is the right decision, the right thing to do. So, yeah, have that data for sure.

Dave: 29:40

Yeah. I think that's, that's totally true. There's a lot you can do to to recreate that data retroactively. I mean, you could you could, you know, you could download all your your executions for the past x days and and enter them in a journal. So you can get a lot of that data retroactively if you're not doing it now.

Dave: 30:01

Mhmm. But, yeah, of course, we should do a whole episode on this, you know, what to record, how to, you know, you know, put yourself what what you're really doing is recording information for your future self to be able to go back and and run reports like this to figure out, and and make these higher level decisions. I think that that's totally right.

Michael: 30:21

Yeah. I think that'd be a really good maybe the next one. I don't know. We'll talk about this online, but I think that'd be a real good probably multiple episodes on on the process of journaling and, you know, you talk all the time about the frequency of journaling is important. But, yeah, let's just, I I'll probably find value from that as well hearing more of your process on on how you run down, how you journal, you know, what to record, when to do it.

Michael: 30:46

Right? That kind of stuff, I think, is really, really important because I think a lot of people look at journaling being more daunting than it actually is when when you get into it. Some people, you know, they they feel like they need to create an Excel spreadsheet by scratch or do something like this. I think a lot of people will be surprised a lot of the tools and a lot of the the simple way to do it. But, yeah, I think a a nice step by step process of of what to record and when I think might might help the people.

Michael: 31:13

So maybe next time, we'll we'll look at what's on the docket.

Dave: 31:17

Yeah. And I think, people get the wrong impression when you say journal. Like, some people think of that. They the first thing they think of is like a diary where they're going and writing, you know, writing what they ate today and how they felt. Like, all that's BS.

Michael: 31:32

Mhmm.

Dave: 31:32

Like, what I'm talking about is a database of your trades that you can actually do something with and improve. Yeah. So that's very different than, you know, dear diary, here's how I feel today. All that's bunch of crap.

Michael: 31:47

Yeah. And, you know, it might be one of those that you you take an off an off, off plan trade or you do something stupid and you you write a little note saying right? But even that and we'll get into that. Even that is done with the tagging system. Right?

Michael: 32:01

Mine are just called rogue trades. Right? Just to tag things that I did that I shouldn't do. And that in and of itself can open up your eyes if you do that for a couple months and look back. Oh, if I didn't take all those rogue trades, look at the the amount of money I have.

Michael: 32:15

So, yes, I think that's a good one. We'll probably end up doing doing that next. But for the the sizing up for, you know, going bigger, it wasn't as much disagreement as I thought. But do you have anything anything else to disagree with, or do we think we're in pretty good agreement here?

Dave: 32:29

I think we're in pretty good agreement here. The the other a couple other things that I'll say here. When you go back and look at your buying power consumed over time as you make trades

Michael: 32:42

Mhmm.

Dave: 32:44

There's a lot there's there's gonna be a lot of room in there. And, you know, you're not gonna be consuming all your buying power all the time. So that, that opens up the possibility here to use that more efficiently. Like, we could I'm sure we'll do a whole episode on that at least. But that should give you motivation.

Dave: 33:04

How can I you know, I've got more potential here with my account? What can I do with it? And that this is a natural thing there. The other thing to do is go back and look at your trades. Look at your most profitable trades, and imagine you took those with three or four times the size.

Dave: 33:20

Mhmm. I mean, that's the motivation here and the possibility of what you can do. So, not usually that easy. But but just you could just look at that and and imagine the potential here.

Michael: 33:34

Well, yeah, it goes back to that, you know, the eighty twenty principle. And that's, I think, the end of the day, what we're trying to do by sizing up into these trades is developing, almost sub strategies from different strategies. Right? So you have strategy a, and, you know, that tells you to do x, y, and z, and then you have strategy b. And that says, okay.

Michael: 33:51

Well, you know, now that you've done that, let's just take that subset of the best winners in strategy a, and let's create strategy b and and size that up a little bit. So, again, just another interesting thing, something that you can do with probably the data you already have. You don't need to build anything from scratch, which is is the biggest important thing, I think, when it comes to it. Because a lot of people, like we talk about, that's the hardest part is building new strategies. So if there's something you can do to kinda carve out a part of your strategy that makes sense, I think that's always a good idea.

Dave: 34:24

Yeah. Totally agree.

Michael: 34:25

Cool. Well, until next time. I'm Michael Noss.

Dave: 34:30

And I'm Dave May, and we hope you join us next week on Line Your Own Pockets.