TEI’s Louis Horkan Interviews Preston “Pirate” James

In this month’s Traders Talk we’re chatting with the Pirate himself, Preston James, the founder and chief honcho at Traders Edge. Certainly no need for introductions.

Fact is each of us is here because of Preston’s passion…for trading, the markets, teaching and life in general. He infects you with that passion and his enthusiasm leaves you pumped up and ready to go kick butt in the market.

But it’s more than just showmanship and being a good marketer with the Pirate. He brings decades plus experience to the table and a reputation for cutting through the BS and telling you like it is. His is a simple approach to trading, based on years of experience observing that which truly drives price in the market.

Individual traders and industry professionals alike have come to him for years seeking what they can’t find elsewhere – actionable training that cuts to the matter of booking profits. The fact he’s still doing this speaks to his success in delivering that which so many have sought!

In this first of a two-part interview, Preston shares much about his humble beginnings in the market, tough lessons learned, the philosophy and approach that has served him well throughout his career and his belief that individuals can be taught to effectively trade proven strategies that will consistently bring them success in the market.

TEI: What’s the background story behind the “Pirate?”

PJ: I don’t spend a lot of time talking about it. It just kind of organically effervesced. I started teaching folks in the late’90s. Coincidentally, that’s when the market started doing one of the most impressive ramp-ups I think it’s ever done in history. You kind of get full of yourself because everything you’re looking at is working out and turning into gold. A student at that time actually commented something to the effect, “This is like finding buried treasure.” And at that time we were doing a lot of momentum things and uncovering stuff…finding things through non-traditional channels. And then you also had Oprah…Sting, Prince…all these one-word things… Pirate sounded a lot more intriguing than just your given name. That’s sorta how it got going.

TEI: When did you actually first get started in the market with your first trade?

PJ: 1993 was my first trade. I got interested in the markets when I studied and got a finance degree in college. Here in Salt Lake City, Fidelity has one of their big locations. It’s probably because a lot of educated people get pumped out. This is pre-Internet and I really went to work for them to try to discover what I was supposed to have learned with a finance degree. I got licensed as a 63 and a 7 and found myself taking phone calls from people every day. We weren’t advice givers and we didn’t collect clients, we just basically took phone calls. You end up taking a couple hundred phone calls every day from all over the country, even the world, from people pledging their own money in their own accounts. I became fascinated, wondering, “What is this lady seeing in this stock this morning and what’s this gentleman seeing in this other stock this afternoon…why that stock and why now?” You’re probably not suppose to do this, but every so often with the big whales, the multimillion dollar accounts, you’d hear the person’s voice on the line and punch up their account to see how they were doing over time. That whole world of prices and peoples’ opinions flying around everyday…it really hooked me on how you do this and get ahead.

TEI: Caught the bug.

PJ: Absolutely.

TEI: So when you first started trading were you doing options or equities?

PJ: My first trade ever was an option trade. I’d learned options from overhearing people in elevators. And you had to know a little bit about them to pass your test.

TEI: Very little.

PJ: Yeah. I do remember seeing a fax that had come in to one of the representatives and it was about this guy named Jon Najarian, who went to Chicago to become a Chicago Bears linebacker. I was a linebacker at college, so I thought, “Man, that’s really cool – another football player is doing these.” It really struck me from the very beginning that there’s got to be something there.

TEI: When you funded up your first account was it relatively small?

PJ: Really small. It was a $3,000 account.

TEI: Are you one of the only people I’ve ever met that actually was able to carry that through or did you end up doing some damage to it?

PJ: Oh yeah. My first option trade was completely on a whim. Got married to the stock. Everyday just wondering where it was gonna trade. No idea when it announced earnings, no idea about trends, no idea about anything. I think it was a little news item I had seen. It was Comair Airlines, my very first option trade. I still remember the ticker symbol – COMR. I don’t think it trades anymore. It went through a 3 for 2 stock split and didn’t do much. I remember the options turned all weird. It was just an emotional mess.

TEI: You don’t get many people that’ll actually come out and admit that part of it, but it’s a commonality for all of us. So you stayed with options from that point?

PJ: Yeah, pretty much, just having a small amount of money to work. If an IBM is $150 a share, even if you can put all of your account into that, you’re still at 10 shares or something silly like that.

TEI: When did you start to find you were hooked?

PJ: Early on I developed a real respect for the markets. People are kinda strange anyway, but when their money is on the line… speculating with their real money. There’s a different dynamic to that than just kind of overhearing what a neighbor thinks about this and that. I mean, when humans really put their money on the line, it’s fascinating to me and I really respect it.

So that being said, as we got into the mid-90’s you were seeing the Internet take root… There was some real stock market education taking fire at that time and we actually relocated up to Seattle… there was a stock market guru that was located up there. He was kind of the first. He had all of these bestselling books and tapes. But what really hooked me was that there was a woman who worked there that happened to buy some year-out call options on Amazon. Here is a stock that didn’t have any real earnings and a P/E ratio that was sky high. It was just completely contrary to what you’d read in any investment book. She invested something like $6,000 in these call options and then cashed them in for $150,000. She was driving this super nice Mercedes and in her 20s. I thought, “There’s something to this.” My first option trade I was hoping for a 30 to 40 percent return. This was just astronomical.

TEI: So you went with the stock seminar company in Seattle. At that point it sounds like you were starting to get serious – believe you could find success.  

PJ: Yeah, I just thought if I could get around some like-minded people who could talk about this everyday… it would be inevitable. I just figured if you stay in something, in any profession or any business endeavor, and you have some staying power, you’re going to find the answers that you need. I ended up breaking off after a couple of years and doing my own thing, figuring I’ve got the answers. This is in the day and age where Dell is doing three 2-for-1 stock splits inside of a calendar year. I had a quick following because almost everything I said turned to gold. We’re talking about 1999 into early 2000… It’s probably the most unique two years that has existed – maybe ever.

TEI: That you’re still in this all these years later is testament to the fact you must have started doing something right then.

PJ: Yeah, I think passion is a big key to things. Never feeling like you’ve arrived. Being willing to reach out and meet other people. I’ve called people up cold. An author of a book that I just got through…call five different numbers and trace them down and ask them for an interview – I’ve done that. It’s amazing how willing people are to share their journey and where they’ve come from.  I think [there’s something] to just kind of being that effervescent student and not feeling like you know it all.

TEI: Looking back to that period, what was the hardest lesson you had to endure?

PJ: I don’t know if you’d ever heard of this, but it got some publicity at the time.  At about mid-2000 we had gathered all kinds of customers, clients and friends – a customer appreciation get-together. By the time we did, all the euphoria had just gone away. The market was in this wicked sell-off. When I took the stage, the people are like, “Hey, you’re the one that told us about all these things – what do we do now?” I said, “Folks, listen, this thing’s going to bounce back. We’re selling off, but all these things about the Internet are real… I’m going to make a prediction right now that by this time next year the market is going to be this certain level…” I basically made a prediction in front of all these people that I just love the most, whom had traveled to see me. I laid it down and said, “I’m so sure it’s going to happen that if it doesn’t, I’m going to ski down a mountain in nothing but a pink thong.”

TEI: Wow!

PJ: Yeah. Well, it just got worse and it was nothing of what I predicted. In fact it was almost completely opposite. And so I paid off and it was called “Wrong in the Thong.” Actually paid that off at the Canyons Resort, east of Salt Lake City. It was filmed and had some media pub – you know, “Stock guru cowers and pays off a bet gone wrong.”

It was humiliating. And we kind of made a little seminar about it. I actually invited Tobin Smith, the “ChangeWave Investing” author. Jon Najarian came out. And Dan Zinger of Chartpattern.com – he had started an account with $11,000 and turned it into $23,000,000 in those same two-and-a-half years. I [basically] thought, “Well, let’s make some hay out of this and actually get some good stuff out of it.” All the ashes and everything we went through there…That’s your context. Is the market going to triple in value and then [trade to) a third its value every four years that we go along? It seemed like we’d gone through something super unique, so I was more determined than ever to glom onto some things. It was that whole “When the student is ready the teacher will appear” type of thing. I ended up meeting some people in the wake of that who really set me on a path that I’ve never looked back from.

One of the biggest breakthroughs for me was becoming aware of what I call the Market Cycle, which is very different than the actual economy that everyone hears about on the nightly news. That the market has its own cycles – and to trade alongside that. Other things I learned were trusting and becoming acquainted with price and volume, and doing that in a silent environment and not in a CNBC environment… Another thing I learned very well was becoming comfortable and buddying up to the “New Highs” list. That’s when I became acquainted with the Nicolas Darvis book, “How I Made Two Million Dollars in the Stock Market.” This was in 2002 and 2003.

TEI: So your approach was to read price and volume, and understanding and following the market cycle?

PJ: Yes, it really was. Most people think becoming smart means to make everything complicated. I’ve tried to stick with the opposite. For example, if you looked at a chart of Yahoo…here’s a peak, here’s resistance and support, and here’s the moving average… I guess it was the linebacker in me that said, “You know, it looks like there’s four really big peaks every year in Yahoo.” To find that this corresponded with the earnings announcement date… Not trading the earnings announcement, but just noticing that Yahoo has an average of a 60 percent run-up in the one-month period before their earnings announcement date. I’m like, “Can we just trade this?” “Are there options on Yahoo?” Could you for a lot less money get involved with Yahoo, not knowing anything else, and just buy a one-month-out call option and just try it? You don’t have to understand what their EPS is or anything else. You could just trade these run-ups…just put all of this technical stuff and everything else over there on the shelf for everyone else to worry about. Worked like a charm for about eight quarters there.

TEI: So keeping it simple and not complicating things is where you came to find real success?

PJ: Yeah. Also, after the whole “thong” thing, I came across a study in 2002 that was done in 2001. So 2001 is the dot com meltdown, and for extra measure, later in the year is 9/11. I believe it was in Briefing.com and they were talking about every time that a company had come out in 2001 and announced that their earnings were gonna be better than expected. It could be on the earnings announcement, but they were talking about a pre-announcement. They looked down the road about six months and the stock price was trading higher six months later than it was when the company pre-announced the better-than-expected earnings. I thought, “Wow, you’ve got to be kidding me. I mean if that worked in 2001, than in any other normal year that’s got to be something to really hang your hat on.”

Some years later I saw that Zacks Investment Research, based on the decades they had studied the markets, said that the biggest moves a stock would make would be in reaction to an earnings revision. Of course it can move up or down [depending on] if it’s revised down or upward. That was another simpleton thing. You can measure all the lines and do everything else, but really a company exists out there for its earning. And not just the earnings that it’s showing now. The market is always saying, “What have you done for me lately?”

TEI: So it’s fair to say there’s some wasted time doing a lot of the charting and things like that for longer-term trades, when in fact movement is really based on earnings announcements, pre-announcements and revisions.  

PJ: Yeah, anything that helps color what a company’s earnings power is going to be… and the other thing to realize is that stocks trade today based off of what’s going to happen down the line. It’s always the future scenario being factored in, right now today, as far as what that company is going to earn. It goes to the concept of money – how fluid and how it moves and how it attracts itself to the best, yet also safest return. It’s gonna be that way forever. The only time I can think when that’s not gonna happen with money is when it’s first printed, moving out of the printing floor, stacked neat and flat on a pallet. But as soon as it gets in and money is alive, man it just wants to leave something that’s unsure – it wants to attract and glom onto something that’s exciting and promising.

TEI: So a lot of what’s gone into the strategies that you talk about in The 1% Solution are event-related and are ultimately tied to a company’s performance?

PJ: It is. I’ve kind of thought about this in depth. You know engineers have a really hard time coming in. They’re trying to measure out every last thing, trying to be very scientific – what they visually see and what they can calculate. And I’ve really discovered over time that it’s more art than science. For example, a good CEO is gonna cut costs and grow revenue and is gonna be a great speaker and a great leader, forward visionary and all these things. But also, if they’re really smart, they’re a great manager of their stock price and they understand that things are not going to be rosy all the time. They also understand that their industry, however their company is positioned, is going to have a certain “S” curve, where it’s great to be us right now. Not that they’re gonna lie about their numbers, but when it’s time to do a stock split, they’ll time that stock split real nice around an earnings announcement, because obviously a lot of their pay is predicated on the stock price going higher. So they’re good managers of lots of things and in realizing time and place – of where they are at this time.

So that becomes a little bit of an investigative, detective game on our part. As an individual investor, what are they saying by doing these events when they are doing them? How can we read between the lines? There are some fun things that you kind of learn over the years and then you kind of gain an intuition. There is also realizing that there is time and place. It might not be a good time to be trading out there, if you’re gonna be looking at bullish things, if you’ve got a market cycle fighting against you. It’s no fun to fight money that’s leaving a market. It might be fleeing to somewhere else.

TEI: You mentioned earlier having an attitude of never feeling you’ve arrived. How important is it in your view that traders remain lifelong students with a constant desire to learn more?  

PJ: I don’t know how to do it any other way.  It’s the dynamic nature of players in the market. Think of what we’ve gone through. We’ve gone through a whole world where it was phone calls and letters – to emails and websites and instant information. Who doesn’t want to stay on the cutting edge of the next company that’s going to come out and do something better, faster, smarter, brighter, and disrupt the whole industry? I wake up every morning just fascinated and excited. “Where’s money going next?” It might have not been that way just 20 years ago. To buy and hold a Walmart stock as they kind of keep opening more stores across the country. We’re not just in another gear, we have industries that get created every couple years – brand new industries that they don’t even know how to name now. I just think that’s the nature of the beast, especially now. The name of the game [now] is stay open, keep your ears open, watch and learn. And not only just for new industries coming out, but also of course to better yourself…and maybe even unlearn a lot of things. I read all the Peter Lynch books back in the early ’90s. Of course he was a real Fidelity fixture. For me to go to the mall today and notice a line in a store and make that an investment thesis in 2013…things have changed!

TEI: You said you started with options and have stayed with them ever since. What’s the attraction for most people?

PJ: Options are super attractive to folks opening an account for $5,000 or $10,000. It puts a lot of things in your grasp. They give you options, as simple as that may sound. The earliest options were all about protection – protecting portfolios and things of that nature. The leverage is just insane. In talking from my directional trader days, there’s nothing like buying an option on a $250 stock that you have no business buying shares in, and yet cashing those in for over 100 percent gain, with the stock [only] moving 15 or 20 percent in value. You do that once and your eyes are wide open. “How can we do this again?” Of course there’s a time and a place to do all those things.

TEI: You’ve trained a lot of people over many years, including people that now work within Traders Edge as trainers themselves. What’s your approach and how is that differentiated from other programs out there?

PJ: Well, let me say that incidentally to me living in the confines of Salt Lake City, Utah, somehow, some way, this whole valley became the coaching mecca for every kind of infomercial and every kind of information product. I mention that because pretty much all of those coaching companies have just been obliterated – they’re just gone. You can maybe blame that on the 2008 economic meltdown or whatever, but I think that they’re gone because their information, over time, just didn’t pass. It just didn’t do anything for people. I joke about this with some of my colleagues here, but the serious thing is that anyone can glossary-you-up and come in and say, “Now we’re gonna teach you what this and that is, and we’re gonna teach you this strategy and that strategy.” Okay, so you get into the meat of the teaching and [you’re told], “If you think a stock is gonna go up, you wanna do this strategy, and if you think it’s gonna go down, then you want to do this strategy over here.” When you listen to that on the face of it, it just sounds so silly. “What do you mean, if I think a stock is going to go up? What does it matter what I think? How is this going to benefit me?” I guess if it’s all so new and they’re trying to process everything, that maybe it’s down the line that they realize, “What does it matter what I think about anything?”

Where we’ve tried to be different is we kind of intuitively know that there’s been a ton of people that have responded to the late-night infomercials and have read books – that have accounts open and who are pretty frustrated. And that’s where we’ve swerved in. We haven’t been the “first base all-the-way-to-the-end” company. We just figure there are enough companies out there basically screwing it up. And I guess it’s kind of been confirmed over the years because they’re not in business any more. I kind of wanted to talk to the person that’s already had an account or two open and is about ready to quit.

TEI: They’ve gone through other training and you’re there at the sight of the train wreck. They are disillusioned and looking for something real.

PJ: Yeah. We slap them upside the head lovingly when they need it and get them looking in the right direction. People are smart – they’re educated. There are just amazing men and women in all these fields. They want to make a go of this. I mean, they really, truly want to
do it and they’ve kind of just been glossaried-up.

TEI: So a big difference is the fact you’re teaching real application of strategies. What else sets your approach apart?

PJ: If you want my true gut opinion, from early on most of us are just fed a line of bullshit. You know, you’re gonna go to college because you’re gonna get that job. We’re fed a line of bullshit with religion. We’re fed a line of bullshit from politicians. And even from our parents – people that you just love and trust dearly. They really don’t know what’s in your best interest, especially when it comes to economics and finance and money and things like that. That’s one of the driving passions about even having a Traders Edge…just knowing that most of what people learn or are handed is complete bunk. If you think about it long enough, it can really piss you off. “The truth will set you free, but first it will piss-you-off” type of a thing. It’s rooted in what freaking works. What you need to know, right now, to begin to evaluate what’s really going on. Not what you think and not the experience you’ve had with a company and what you want to impose. But actually, how you need to plug-in to what’s really going on and what the best tools are to get you on the right path. It goes way past, “Hey, if you think a stock is going up, do this strategy.” That’s kind of swear words over here at Trader’s Edge.

TEI: What should a trader be looking for in a training program, be it Traders Edge or anywhere else?

PJ: I’ve always said there’s a huge difference between being effective and efficient. I’ve found that especially [true] with all these devices we have. Everyone’s managing their time and doing all these efficient things. I describe it this way: Say you wanted to go up and see beautiful Snowbird Resort. Well, you could have the best fluid in your bottle, the best lightest bike and you could be in the best shape, but if you decided to go up Big Cottonwood Canyon, even with the best pace and efficiently doing everything great, your problem is you’re in the wrong canyon. You have to go up Little Cottonwood Canyon to get to Snowbird Resort. You’d be doing a lot more effective things even if your bike was crappy and you forgot your water bottle and you didn’t know how to ride a bike. You’d be getting closer to Snowbird doing effective things rather than just focusing on efficiency. There’s been such a battle to become more efficient that effectiveness is almost cast aside. People are afraid of it because they really don’t have it. You’ve gotta do effective things that really make a difference. Efficiency can come later, once you’re focused on the right stuff.

TEI: In terms of it being a resource and helping traders, what’s your vision for TEI going forward?

PJ: Great question. We’ve tried to stay open, teachable and curious. It’s easy to have a few things figured out and then just kinda cross your arms and say, “Hey, we’ve got this. It’s this way or the highway.” Markets have changed. It’s about 80 percent of institutional money that gets pushed around out there in the market. You, me and the other guy – the independent online investor – we are in the minority. That’s presented lots of compelling little avenues. We don’t want to rest on our laurels and have one note on the piano. Where things are leading us we are trying to stay open to…effective ways of getting people down the track.

TEI: Traders Edge just hosted a live trading seminar with Karson and Mike trading real time. Is that an example of what you’re talking about in terms of staying open and going where you’re lead?   

PJ: Absolutely. That’s the last thing I’d think that we would have done if I was talking to you two years ago. I’d probably have said there’s no way we’d ever move there. But we crossed paths with Mr. Augen. And Karson, who’s been coaching people left and right for years, picked up on some of the stuff that Jeff was doing – and they’ve kind of fine-tuned things over here. And they’re doing fantastically. It’s another ray of light that’s come down. I just thought it would never be possible to do that. I kind of poo poed watching the market every day, but for some people…they’ve gotta have the schedule for it and they’ve gotta have some aptitude for it. We’ve got some tools that are so cutting edge, it’s mind boggling.

TEI: Weekly options are a major focus at TE and now you have the Augen indicators. How did all of that evolve?   

PJ: It started when the weekly option product first got created. I personally had a lot of sleepless nights. I was trying and testing and tweaking. I was doing hundreds of thousands of dollars worth of option trades and watching things. The one fact that got me was looking at the premium of a 1-week option. I mentally added it up. “If I look at what a 1-month option is, the four weekly-premiums are, almost across the board, adding up to double what the 1-month premium is.” This was as the market had tanked and I was really shifting to pretty much income-only strategies. As I looked at that and what I was paying for my protection, it was the same. And I thought, “Look at this new dynamic here. Basically, I’m able to double my returns without one thin dime of extra risk.” I was fascinated with it.

That’s about the time we crossed paths with Augen’s book that dealt specifically with little quirky things about how options expire and all these little opportunities. I thought, “Wow, he has these opportunities once a month. Here are these weekly options that have come out and now there are four opportunities a month. A week flies by and you turn around and now it’s the next week. I wonder what this Augen guy has to say about it.” So when we first crossed paths with him, he was intently focused on how all of these opportunities are created – these inefficiencies that are created because of all of these big funds pushing money around. And that’s when we first got to know him. I said, “Hey Jeff, let’s do stuff every week.” And so for the first bit, he and Karson were exclusively doing different option strategies to make money because of these inefficiencies.

And then we had kind of a happy discovery because he talked to us and said, “Hey do you guys want to see what tips me off to these different trades?” Here’s a guy that doesn’t sleep most nights. I mean he doesn’t have kids and this is like his baby. We come to find out that hedge funds have sent their traders to go learn some of these little option anomalies from Jeff. And the funny thing is these hedge funds and big pools of money create these opportunities, but they can’t turn around and do it themselves. So really, it’s the individual trader…again coming back to what can you do from home that has an edge and make money in this market. We just uncovered this amazing opportunity that just exists. We at Traders Edge had no clue. And I think it’s gonna exist forevermore.

TEI: So that opportunity using his indicators is going to stay out there because of the institutions and how they trade?

PJ: Yeah.

TEI: So you don’t see the weekly option opportunities going away? That’s something you’re going to continue to focus on for the foreseeable future?

PJ: I don’t. Talk to the Najarian brothers. Still to this day the weekly volumes outdo the monthly volumes. You wanna pick Apple, you wanna pick Amazon, you wanna pick almost any ticker symbol you look at that has weeklies compared to monthlies…there’s so much action and volume happening.

TEI: You hear a lot of people who say it can’t be done anymore in trading. What’s your opinion on this?

PJ: Oh yeah, “There was a time for this, but it’s not now. There’s no opportunity in the market anymore.” Yet as we’re talking, the Nasdaq hit a 12-year high. I mean it’s just amazing.

TEI: So in your view it can be done?

PJ: Absolutely. That being said, I do not think that everyone can fit in and do it.

TEI: Why do you think that’s the case?

PJ: Probably some wiring issues – emotional wiring. If you ask anybody this question, “If you buy an investment and it goes up and you sell it, and then right after you sell, it runs up and does another double or triple, how would you feel?” They’ll say it feels horrible. Then if you ask, “Now if you buy an investment and it goes down a little bit and you sell out, and then it just craters and goes down and smolders and turns into ashes, how would you feel?” They’d say they feel good. When you turn that around, people feel bad about making money and great about losing it. Some people can never ever square that.

TEI: And that influences their discipline even if they have a plan.  

PJ: Absolutely. Some people and plans just do not mesh…any plan.

TEI: Well, if you don’t adhere to it, it’s really not a plan or a strategy…it’s just words on paper.  

PJ: Right. Look, the most dangerous person in the world is someone that’s desperate and has a big account. They can’t help themselves and it gets compounded when it’s going the wrong way. There are bigger, dumber moves and you just can’t help them. You can’t be there to put your hand over theirs if they grip their mouse…there’s nothing you can do.

TEI: What do you consider the biggest determinant to your success in trading?

PJ: I am really passionate about it. I probably have more passion about it now than I did last year and the year before. It’s really finding something that you love to do. And what that does is leads you to inevitably meet other folks that are a lot better at it than you. I’ve always tried to remain teachable and curious and ask questions, even if I think they’re dumb…There’s knowledge that comes when you’re passionate about something.

TEI: If you were sitting with a newer trader or somebody who’s been struggling, you’re advice to them would be?

PJ: Well, one thing front and center is the whole options market. If they’ve been scared about options or been told that they’re dangerous. Or that [roughly] 88 percent of them expire worthless. All these things. They need to realize how options can be both a protection and an income generator. They can be a way to trade, for example, a Priceline that’s $700 something a share. And when they realize that for $9 they can control Priceline for a while. I saw a $9 option on Priceline this morning and I thought, “That’s sure a lot better than $700 something a share.” When they realize how versatile and powerful that whole realm can be, especially if they haven’t done it before. We’re in the day and age of options. This is option time, so whatever they have to do to just become more familiar. I don’t know how you can operate in today’s world without all the various array of options.

TEI: Anything else you’d like to add as we close?

PJ: This kinda goes back to the “Why you’re doing this” and “What do you want Traders Edge to be” and things like that. I was just thinking this morning about how many wounded investors there are out there. They’ve pretty much been a spectator of a market that’s really been strong. I mean the complete opposite of the fiscal cliff and all this stuff. In fact, the S&P just made a new 12-year high recently. And this morning I noticed that we may just be having a turn-down in our market cycle.

Here’s the thing, there’s a lot of well-meaning, educated, smart, amazing, beautiful folks out there that can’t stand it anymore…all the money they’ve seen made and they’re just now coming off the sidelines to get into the market. And it might just be at the exact wrong time. That just ticks me off for them. If they just knew a little bit…knew a little skill or two, where they could have caught this some months ago rather than now…  And it doesn’t have to be rocket science. If they could understand and just go along with us on the market cycle alone, and then know just a few skills on what to do during that time, what a better a place it would be for us 20 percent that are probably dwindling now, because it’s the institutional folks dominating out there.

TEI: This goes back to your belief that the market is tradable. This is not some exercise in futility.

PJ: Absolutely. I wanna say there’s more opportunity. There’s never been a better time to be an online, independent trader like you, me and whoever’s listening to this. Commissions have never been cheaper. The executions have never been faster or more dynamite. You can do it from anywhere – there’s Wi-Fi everywhere… And yet more people are chased out and there’s more frustration. You can’t find the education. Even if you could, you’re probably going to find a bunch of efficiency training… There’s so much opportunity is my point…it’s really something else.


Preston James is a self-professed ‘stock market linebacker’ who is proud of the notion that the only reason he graduated college was due to his football scholarship. His interest in trading began at a young age, actively trading his own accounts since 1996.

Specializing in cutting-edge strategies, volatile markets and small trading accounts, Prestonís passion for trading has attracted a following of like-minded income traders seeking his help in taking their trading to the next level.

Preston is a noted author and speaker in the field of trading and investing, having published ‘The 1% Solution’ and his controversial ‘Online Trading Manifesto.’ In spite of high praise from legendary floor trader Jon ‘Dr. J’ Najarian and Tobin Smith of Fox News ‘Bulls and Bears’ fame, Preston insists he is ‘no one special’… crediting only his passion and pig-headed determination as the reason for his trading success.

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