Corey Rosenbloom: Afraidtotrade.com Founder’s Advice

For the next guest for our interview series, I was fortunate enough to interview Corey Rosenbloom from Afraid To Trade Twitter (Afraidtotrade).  He is a full-time trader and a blogger making a living utilizing his talent as an investor.   With nearly 3500 subscriber, he provides the readers with the edge in technical analysis to make the right trades.  I enjoy his talent to identify Elliot Waves and divergences to suggest a future trend.

With this interview, I intend to help you discover and learn more about Corey Rosenbloom, a CMT (Chartered Market Technician) trader, educator, analyst, and a blogger.  Enjoy.

Thanks for your time participating in the Q&A. First thing I want to ask you is “how in the world did you get into investing as a high school student? Most high school students are watching movies and playing World of Warcraft with friends nowadays”

Haha – it’s not like I sat there the whole time playing the stock market! I was a normal active high school student who happened to talk stocks from time to time with my father, who is an avid market enthusiast and investor. Our school took part in a stock market challenge where we teamed up and competed against other teams to pick the best stocks over a 6 or so month period and our team happened to win which got me thinking how fun this could be. Plus, that was around 1997/1998 when the market was rising so it was easy to pick winning stocks and feel good about it.

“How has your investing career been since? Success stories? Big mistake stories? Being an investor myself, I made some big ones myself”

Well, if you don’t make mistakes, you’re not really trading. With my enthusiasm, my dad started taking my input and we were analyzing stocks together mainly using news and fundamental analysis. We made money like everyone else until the market peak in 2000 where things started to turn sour. Keep in mind, back then, the prevailing mentality was “buy and hold” and of course we suffered like everyone else as the market fell and we kept holding ‘fundamentally attractive’ stocks. That’s when I discovered Technical Analysis – even at simple levels – adds value to investment decisions. I then developed a hybrid investment style which selected fundamentally attractive stocks that were filtered through simple technical analysis scans… and I would continue to shift more towards the technicals as I learned and researched more.

“I believe you’re a more aggressive trader using techniques like swing trading and momentum trading. Do you still believe these techniques are better than the traditional ‘buy-and-hold’ strategies?”

Depends – in May 2009, we were at levels not seen in 12 years in the stock market. That meant had I just put my money in the market and held it when I first started in 1998, I would be no better or worse (assuming I received no dividends) after 11 years of ‘buy and hold.’ Losing 50% from 2000 to 2002 and then again losing 50% from 2007 – 2009 (both from peak to trough) is risky. However, most people don’t realize that the market rose 100% from 2003 to 2007 – it doubled. That shows that – while buy and hold might not be as ‘risky,’ you could have performed much better by exiting the market in 2001 and buying back in mid-2003 then selling in early 2008 and perhaps buying back in early/mid 2009 – which could have been determined by the 20 month simple moving average on the monthly charts.
Trading isn’t for everyone, but in my experience, you can profit much more by short term swing trading or even aggressive intraday trading if you have the skillset, strategies, knowledge, and mental stability to handle the risk and opportunities.

A little bit about your blog..”are you currently investing and blogging full-time?”

Yes, both, but I focus almost exclusively on the short term and intraday trading since being full-time in late 2006. I analyze multiple markets on multiple timeframes and often hold ETF positions, but I somehow even manage to morph those into short-term swing and scalp trades as well. I also highlight intraday opportunities and trade set-ups both through a subscription service and on the open blog – the blog mixes multiple timeframe technical analysis of all markets, major indexes, and stocks by request (though I focus less on stocks now and more on broader indexes).

If so, “what do you think led to your success as a full-time investor/blogger?” “What are some of the challenges you’ve faced along the way?”

That’s a big question – I initially started the blog as a way to reach out to people and share ideas as well as catalog my strategies and things I had learned. It was a way to connect with people with similar goals and experiences and combined trading psychology/emotion with market strategies and daily analysis showing how these strategies play out in real time – with a focus on education. I’m a natural analyst and teacher so I think people responded well to me sharing these concepts and breaking them down in simple terms using multiple examples. I’ve learned so much and solidified my knowledge by doing so. In the beginning, it was sometimes difficult to find things to talk about but as the traffic grew and people gave good feedback and asked for chart requests, the ideas flowed – now the challenge is not sharing too much!
The blog has grown organically through the generous links of other bloggers, to which I’m all very thankful.

Lastly, “do you have any advice you can give to the investors, both new and experienced? Any must have tools that give you the edge?”

Becoming a successful trader takes time, so it’s most important to protect your motivation, enthusiasm, love of the market, and psychological capital. You won’t learn all the lessons you need to and find the strategy and market that best fits your personality without some trial and error – and you need to stay motivated through the early years – don’t give up easily.
Focus on concepts, not indicators. Realize it all comes down to supply and demand and that price – not your opinion or analysis – is key. It’s all about probabilities and risk/reward. Either increase your accuracy of your trading or more importantly increase your monetary edge, meaning make more statistically when you’re right than when you’re wrong – you can have a 50% accuracy rate and do quite well when your winners average around 2 or 3 times your losers. Oh, and try to have fun. Again, you have to love trading to withstand the drawdowns and frustration – it’s worth it if you stick with it.

Well that’s all for now guys.  If you want to learn more about him, go to his site and get involved!