- 3 years ago
Martha Stokes, CMT, Co-founder & CEO of TechniTrader was a guest recently on Benzinga’s All-Access.
TechniTrader is an educational company focused on teaching traders and investors a complete process for trading or investing in the stock market and other financial markets. Founded in 1998, the company reports that it has helped over 500,000 traders and investors achieve their financial goals.
Ms. Stokes spoke about the importance of a comprehensive strategy and the dangers of overtrading.
TechniTrader is an educational company focused on teaching traders and investors a complete process for trading or investing in the stock market and other financial markets. Founded in 1998, the company reports that it has helped over 500,000 traders and investors achieve their financial goals.
Ms. Stokes spoke about the importance of a comprehensive strategy and the dangers of overtrading.
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NewsTranscript
00:00 Martha, how's it going?
00:06 Happy Friday.
00:07 Oh, happy Friday to you.
00:08 It's going really well.
00:09 The market's been doing well.
00:10 We finally have the return of the retail traders, which is great.
00:14 Retail investors are getting more interested.
00:16 Derivative developers have been building ETF units like crazy.
00:20 And we have a market that has finally stated, yes, we are bull.
00:23 Yeah.
00:24 I mean, I don't know at this point, you know, I go on Twitter and whatnot.
00:27 I still see a lot of people that are bearish or maybe upset at the rally.
00:32 But at this point, when you're looking at the prices, I don't know how you could argue
00:35 this is anything other than a bull market.
00:38 But before we get into all that, Martha, do you mind giving me just a brief overview of
00:43 Technitrader and what you guys do?
00:45 OK, I want to explain it in a little different detail this time so that you understand what
00:50 we really represent, because we're what you call an obit, a boutique operation or a specialty
00:57 education company.
00:58 There are retail investors out there.
01:00 They invest long term.
01:01 You're all called retail because you're on the retail side.
01:04 The professional side is the wholesale side.
01:06 That's why they call you retail.
01:08 There's retail investors.
01:10 They invest for the long term or when they get into retirement, they may come to Technitrader
01:13 for help to make more money.
01:15 There's also the retail day traders.
01:17 The day traders are mostly people who are having a good time having fun, but they're
01:22 not relying upon the market for their income and they're not trading as a business.
01:28 They're just having a good time and it's great.
01:31 It's fun.
01:32 They enjoy chat rooms and have a great time.
01:34 Then we have the individuals who are wanting to make income full time or work part time
01:40 from home because they're raising their kids and they want to have part time income and
01:45 professionals or semi professionals who want to learn how to trade the market, because
01:50 all of your designations, all of your SEC filings and everything for junior traders
01:56 or senior traders trading on a floor, they don't teach you how to trade and the floor
02:00 traders will certainly not help you out.
02:02 I teach a lot of professionals.
02:04 I also teach what's called the semi professional, which is a retail trader who is trading as
02:08 a business and is under the IRS ruling that he's considered professional.
02:14 He gets all the benefits of being a professional, what the IRS calls your hobby traders, your
02:20 day traders don't receive because they are not in that category.
02:25 We are very specialized in what we teach.
02:28 What I teach them is the professional side of the market, where the retail side, when
02:32 you're day trading, you're learning the retail side of the market, but you're not learning
02:35 the professional side at all.
02:37 Got it.
02:38 That makes a lot of sense.
02:42 One of the biggest advantages professionals have, of course, is their training they may
02:46 have received compared to a lot of day traders.
02:48 I talk to people all the time that are just taught off YouTube videos and whatnot.
02:54 Why is training so important to success in the markets?
02:58 Are there tools and strategies that professionals use that most retail traders lack?
03:04 Oh, certainly.
03:06 Howard Johnson and I co-founded TechnoTrader 25 years ago.
03:11 He designed a lot of great tools for our trading floor at that time.
03:15 I retired and we just went into teaching because it was just a whole lot of fun.
03:21 We have a risk analyzer.
03:24 We have a risk assessor.
03:25 We have a trade management planner, which I want to talk about today.
03:29 We have the professional trading journal.
03:32 We have the market condition analysis.
03:33 There are six market conditions.
03:36 Retail traders have never heard this before.
03:38 They're going, "What?
03:39 It's up or it's down or it's sideways, right?"
03:41 No.
03:42 There's six different trading conditions.
03:44 Then there's all kinds of different nuances because we have 12 different market participant
03:50 groups and the market structure is geared toward the professional side.
03:54 80% of all the activity on the market every day, some $300 billion changing hands, is
04:01 on the professional side, dark pools and ATS venues that are off exchange activity, not
04:07 on the exchanges.
04:09 That's why NASDAQ and New York Stock Exchange and all of those have built dark pools themselves
04:13 because there's so much activity behind the scenes.
04:15 The retail side doesn't have the access to the news and information.
04:19 You always get it late.
04:20 It's like, "Yeah, well, feds are going to talk.
04:23 Well, we already factored that in three weeks ago."
04:26 We don't have, they don't have the information that professionals always get.
04:31 Plus, professionals, all retail brokers are required to light your orders before they
04:37 process them in the morning so everybody can see your orders and what you're doing.
04:41 If you have cluster orders, then that's what's been happening today.
04:45 We have clusters orders of people trying to buy stocks and so the pros are selling to
04:51 fill the order.
04:52 They're already in the stock and they're just selling for profit.
04:56 That can change.
04:57 That's why that's happening.
04:58 Today, I wanted to talk about the trade management planner because that's a very important aspect
05:03 of being a semi-professional, making a living or part-time living in the market to becoming
05:09 a professional trader.
05:11 There's a lot of opportunities there for people who are serious about that.
05:14 Retirees, I have a lot of retirees and they are semi-professional and making very good
05:18 money in their retirement.
05:21 The trade management planner is usually something you look at this time of year because you're
05:25 going to plan your whole program for the rest of next year.
05:29 You plan out how much capital you have now that you can trade.
05:34 You want to calculate how much income you want to generate because where an investor
05:39 might get 8% or 5%, maybe 12% this next year on their return on their investments.
05:45 When you have inventory because when you're trading as a business, you have inventory.
05:50 Any stocks you're holding is inventory.
05:52 At the end of the year, we are looking at mark to market.
05:56 Whatever the price at the end of the year is and you're holding any of those stocks
06:01 over to the new year, that's your inventory that you would pay taxes on as an inventory
06:06 item.
06:07 You include that as inventory.
06:10 You can deduct your – right now, any of my professionals, they're buying courses
06:14 because they can take off that as a business expense.
06:18 Their entire course, whatever it costs, can be deducted from their business expenses.
06:24 Wow.
06:25 Good deal.
06:26 Yeah.
06:27 I have a lot of people that are starting the trade as a business this year.
06:31 They still have time to get it going.
06:34 If they have bought a course, then they can write that off.
06:36 It's specifically for semi-professional or professional trading.
06:40 If you're a hobby trader, as the IRS calls you a trader, you can't do it.
06:44 You get none of that benefit.
06:46 I see some people in the chat saying they are interested in making that transition to
06:51 a pro or semi-pro trader to get those benefits.
06:56 What is a reasonable target for someone looking to make this transition to make an extra $100
07:00 a day, $500 a day?
07:03 What are most people bringing in?
07:04 You said your retirees are making good money.
07:06 What are we talking?
07:07 Well, if you have a very small capital base, we're talking anywhere from $2,000 to $5,000
07:13 a month.
07:14 If you have a higher capital base, $10,000 to $20,000 a month.
07:17 That's what we're talking.
07:18 We're talking serious money.
07:19 We're talking in the six digits for those who have been with me for quite a while.
07:25 One of my previous students was on Benzingo a while ago, and he was managing a hedge fund
07:30 worth $100 million.
07:31 Wow.
07:32 Who is that?
07:33 I have a lot of professionals that do that.
07:35 More traders make anywhere from $1 million to $5 million a year, depending on how good
07:41 they are, because they're based on commissions processes.
07:44 So there's big money in there.
07:46 It just depends on how much capital base you have, because if you have a low capital base,
07:49 you can start, but you have to build it up, and then you can make more.
07:53 Generally speaking, if you're a long-term investor, we're looking at maybe 5%, 8%, 12%
07:57 return.
07:58 When you're a trader, you're turning inventory.
08:00 So that jump bumps up to 60%.
08:02 There you go.
08:03 That's a lot.
08:04 Let's talk about, you mentioned the planner.
08:06 Let's talk about plans.
08:07 How important is it to have a comprehensive trading strategy?
08:11 It's very important.
08:12 Every professional that does anything and makes money does have the trade management
08:17 planner because it calculates everything you need.
08:19 And what is most surprising to my new students who have been trading for a long time is this.
08:25 They don't need to trade as often as they have to.
08:27 I think they have to.
08:28 Retirees can trade part-time and still make great money.
08:31 So it's a surprise and shock to them that they're over-trading.
08:34 A lot of times you're trading too much and so then you lose money.
08:38 You get into today where you're not understanding how the market's working.
08:41 We've got pros selling for profit.
08:43 We've got retail brokers filling orders on the buy side.
08:47 And it's whip-sawing back and forth like this.
08:50 It's not a really great day.
08:51 You don't have to trade every day to make a good living.
08:54 And that's the thing.
08:55 The trade management planner lays out the whole SIM.
08:58 What lot sizes you should use.
09:00 How often you have to trade per month.
09:02 What percentage you have to gain.
09:04 All of this is laid out in a process that makes it easy to follow.
09:08 That's just one of many, many of the professional trading tools that we have within our courses.
09:14 And that's why professionals and semi-professionals seek us out because it's so completely different.
09:21 The market structure report.
09:22 So the trade management planner, if you can pull it up for me.
09:25 I like to give a preview to anyone who's interested in the company because most of our students
09:33 come to us via referrals.
09:35 So what you want to do is you have to register on the site to watch this.
09:38 But we don't hound you.
09:39 You either like it or you don't.
09:41 And that's the end of it.
09:42 But it's a course that shows you how our courses are laid out.
09:47 It's eight different little segments about five minutes long.
09:50 And it shows you and gives you the information you need.
09:53 And then it gives you a little test to take.
09:56 And then you go on to the next one.
09:57 That's how our courses are.
09:59 We lay them out in a section.
10:02 And then you take a little test, a self-graded test.
10:05 You test and evaluate and go back and review what you haven't learned yet.
10:10 And then you go forward.
10:12 And so it builds on the process of your education.
10:15 And it's very unique and different.
10:16 You'll enjoy this.
10:18 It's free because I want you to be able to have an opportunity to see how we teach.
10:24 Either I'm right for you or I'm not.
10:28 And you will meet Howard Johnson in this one.
10:31 He's retired now.
10:32 But he continues to have landmark impact on the company.
10:38 Yeah.
10:39 So I mean, how do you go about actually setting up one of these plans?
10:43 I guess once you take the test and you figure out where you're at, how do you go about crafting
10:48 a plan?
10:49 Oh, it's all laid out for you.
10:51 It's all set up.
10:52 It's designed.
10:53 All you have to do is fill in the numbers.
10:54 It's real easy.
10:55 The trade management planner that we have, you just poke in the numbers.
10:58 How much capital you got?
11:00 Boom.
11:01 How many days a week you want to trade?
11:03 What's your goal for the year?
11:06 And then it tells you everything you need to do.
11:08 How many trades you need to put on, how point gain potential you need to have, risk analysis,
11:14 the whole thing.
11:15 All you do is plug in the numbers.
11:16 It's easy.
11:17 It's very, very easy.
11:19 You make it sound like you're going to make it so easy for us.
11:22 I might have to actually check this out because that's what I need.
11:25 So Martha, when you have a plan or strategy, what dangers and pitfalls does that help you
11:31 avoid?
11:32 Well, the plan helps you lay out and follow your progress through the year.
11:38 And so you can adjust and accommodate it.
11:40 If you suddenly have a lot more capital because you've made a lot of money, then you can adjust
11:44 that trading plan month by month and make sure that you're on track.
11:48 It keeps you on track and target.
11:49 It also teaches you that you don't need to overtrade.
11:52 You don't need to be obsessive about the market.
11:55 You can wait for that perfect entry and then have a lot of profit.
12:00 And that's what I want to teach my students.
12:03 It gives you discipline.
12:04 Everybody says, "How do I get trading discipline?"
12:07 It's right in the plan because you follow the plan and you follow your trading parameters
12:11 and your rules for your trading style.
12:13 You don't have to worry about discipline.
12:14 It's built right into the courses.
12:16 It's built right into your mindset and your habits.
12:18 When you build good habits from the beginning, I don't have to undo those bad habits.
12:23 So it's good.
12:25 We have a course for beginners.
12:27 We have a course that's less than two years in the market.
12:29 Anybody with less than two years is a beginner.
12:32 We have a course for those who are up to five or seven years.
12:35 That's an intermediate course.
12:36 And then we have the elite course for those who want to be a semi-professional, professional
12:40 trader.
12:41 Got it.
12:42 We'll put that link in the chat.
12:43 We'll throw it in there one more time for people interested in going to check it out.
12:47 Again, the free intro course and evaluation.
12:51 So no reason not to go check that out.
12:53 Would highly recommend it.
12:54 Martha, before I let you go, let's talk about the current markets a little bit.
12:59 We obviously have had a huge week, a huge few months, really.
13:03 At what point do you think too much is too much and we could be topping out?
13:08 Well, right now what's driving the market is the ETF developers.
13:13 There's a high demand for units.
13:14 Once they get all of their units that they need for this particular point in time, we're
13:18 going to have a minor correction, but we have support nearby, so it's no big deal.
13:22 And if you were a long-term investor, you know that the market goes up and cracks a
13:26 little bit.
13:27 We're in a long-term bull market for one particular reason.
13:31 In the 1990s, there were six new technologies that drove the market for about 15 years.
13:37 Now we have 20.
13:41 We're going to have the longest bull market we have ever had.
13:44 I've been in the market since I was 12.
13:46 That's my first year that I was able to buy with my grandfather.
13:50 And I have never seen this much new technology.
13:54 Starting in the major corporations, that's why the major corporations are so profitable,
14:01 because they started there with hyper automation of the IT departments and it's going to spread
14:06 from now.
14:07 So AI is just one small little part of this huge thing.
14:11 So you think we're about to get into the biggest bull market we've ever seen?
14:16 Based on all the cycles that I've studied, and I studied cycles all the way back 200
14:21 years for my thesis, yeah, this is going to be major.
14:24 I can get behind that.
14:26 Martha, I've just been adding and adding and adding to my long-term portfolios.
14:30 I've got a ways to go.
14:31 I can get behind that, because I'm already-- you know, I mean, you can really start seeing
14:37 those returns start to add up when you start putting money in your retirement account early.
14:42 And I love trading too, but I keep those accounts separate.
14:46 And in my long term, it's just buy and hold over time.
14:50 So you do that as well.
14:51 I know, obviously, you're a big trader, but you also hold long-term investments in a separate
14:55 account.
14:56 Oh, yeah.
14:57 Yeah, you have to have both.
14:59 We're a digital economy now.
15:00 And if you don't have both, you'll be left behind, because there'll be a lot of displacement
15:05 with robotics, robots, humanoid robots, AI, and so on, where the corporations won't need
15:12 as many employees.
15:13 Got it.
15:14 Well, Martha, it's been a pleasure to have you on Benzinga's All Access today.
15:19 Again, everyone go check out that link in the chat.
15:21 Martha, we got to chat soon, because I mean, I have a feeling these markets are one way
15:26 or another, it's going to be exciting these next few months.
15:28 It is going to be very exciting.
15:30 There you go.
15:31 Have a great rest of your Friday and have a great weekend.
15:33 Thank you very much.
15:34 (upbeat music)
15:37 (upbeat music)
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