Investor or Trader, Can You Do Both? Let's Talk With Dan Sugar and Find Out

Let's Talk with Dan Sugar the author of Trends, Trend Following & Trendlines. Do you think trading stocks, options, futures, currencies, commodities or even U.S. Treasuries are risky, complicated and not for you?  Learn from Dan Sugar, a third generation trader and educator how to use four specific strategies to be a more successful trader. We cover a lot of topics in this interview, even how you can  (and should) be both a long-term investor and a trader.  We are talking day trading, swing trading, watching what the Federal Reserve is doing and how to make technical analysis for trading a lot easier.

Daniel Sugar, an experienced investor and trading mentor, is proud to announce the release of his new eBook “Trends, Trend Following & Trendlines.” This eBook will serve as a resource for those who are looking to take their investment portfolios to the next level and increase their earnings exponentially.

Dan covers what you need to know for  for short-term traders and long-term investors and applies to all asset classes, including stocks, ETFs, futures, options, forex, and cryptocurrencies. Dan boils it down to four specific strategies: two for bull markets and up-trends, and two for bear markets and down-trends. The Book also covers how to identify macro-trends easily and draw trendlines accurately just like hedge funds, with specific entries, stops, and targets.  
If you have a fear of trading, because it is just another language to learn and worry about losing money, Dan's approach is to start small with just small positions in stocks, ETFs, Futures, Options, Forex, even Cyptocurrencies.  Once you can identify micro trends and how to draw a trendline you can start learning how to add profits to investments with just a few simple trading strategies.  It's all hear in this interview. A great place to start, then you learn more from his easy to read book. Need more help, Dan has training programs available and you can even signup for one of his webinairs. 

Learn how to make investing simple for anyone and get on a path toward wealth.

Transcript

Follow Dan at
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His website:   https://trendlinebreak.com/ 

Floyd (00:00:08) - Welcome to the really Simple Investing podcast where you can learn from others how to be a successful investor. We bring you investors, authors, and experts, and investing to help you learn more about how you can invest in some really simple ways if you want to be a successful investor. Join us every week for the interview. Hey, you're listening to the Really Simple Investing podcast. I'm your host, Floyd Saunders. And today we have as our guest, Dan Sugar. Dan Sugar is a third generation Chicago floor trader whose grandfather Samuels traded butter and egg features in the early 19 hundreds on the Chicago Butter and Egg Board, which eventually became the Chicago Meile Exchange. And I guess there's no longer trading in butter and egg.

Dan Sugar  (00:00:53) - Yeah, pretty much. That's over now. It's soybeans and bonds and s and

Floyd (00:00:56) - P. Yeah. So then your father was a trader. His, his name was Justin, and he did spread broker trading for 35 years in the grain mark. Uh, and then your first job was a runner for EF F Hutton starting in college or high school. What, where was that? That

Dan Sugar  (00:01:10) - Was in between sophomore and junior year of high school. 16 years old, uh, Floyd. Yeah.

Floyd (00:01:14) - And so back in the day it was all paper based, right?

Dan Sugar  (00:01:17) - Yeah. Yeah. We, A runner would walk fast. We wouldn't run, but we would walk fast and hand the order on paper to a broker and then they would execute it and hands, if your hands were in, you were buying, if your hands were out, you were selling. And

Floyd (00:01:29) - Then you went to work as a broker's assistant for the largest soybean options broker in the pit and started your trading back in 1988 and the 30 year treasury, uh, bond futures pit. Right?

Dan Sugar  (00:01:40) - Exactly. Yep.

Floyd (00:01:41) - So could, would it be fair to say you've seen it all?

Dan Sugar  (00:01:45) - I think so. Uh, yeah, I've, uh, been around the game a long time, multi, uh, multi-decade. So I've been through bear markets, bull markets, haven't seen it all, but I've almost seen it. Yeah, 90%

Floyd (00:01:56) - <laugh>. 90%. So you've transitioned back in the, uh, uh, 1986 time period from floor based trading to screen-based trading, because you saw that that was changing. What, uh, tell me a little bit about that.

Dan Sugar  (00:02:07) - Actually, 1996, yeah, 1996. I was in my early thirties and, uh, electronic trading had just started getting underway. And, um, I saw the volume migrate from the pit to the screen. So I got a headstart on screen-based trading, and I left the floor in March of 1996. Yeah, six to oh five. I was a retail licensed futures broker, trading for clients, and then also trading my own account. And then since oh five, just teaching and trading on my own for 15, 17 years now.

Floyd (00:02:36) - What was the transition to teaching? How did that come about? Well,

Dan Sugar  (00:02:39) - I was living outside of Orlando in a suburb, and, there was a local branch there and, they were teaching people how to trade and they had these workshops and there was just some synergies. 

Trading by yourself in your office can be a little, uh, boring at some point, so it's good to, you know, good to be out. When I was a broker in Sears Tower in Chicago, I was around other traders and brokers and energy. So long story, little shorter as I hooked up with this company and did some workshops and transitioned to becoming a mentor and, and coach and, and educator and instructor, and I had no idea how much I would love it. I've had some great mentors and instructors in my day, um, starting with my dad and a couple, four traders that took me under, underneath their wing and then later on the hedge fund trader. And so I'm just kind of giving it back or paying it forward, whichever way you want to look at it.

Floyd (00:03:24) - Sure. And that was with the online Trading Academy, right?

Dan Sugar  (00:03:28) - Yes. Yeah, I was there

Floyd (00:03:29) - For, and then more recently you started your own trading school? 

Dan Sugar  (00:03:33) - I teach courses and classes and it's been about three years, Mar right when the pandemic started, March 1st, 2020 is when I went on my own. Correct. I was doing it online, so it was kind of a nice segue. I was, I was prepared already for the, for the pandemic, being online and so forth. Mm-hmm. <affirmative>.

Floyd (00:03:48) - And then you started your website, trend line break.com, which is where people can go to get your book trends trend following and trend lines. Is that right?

Dan Sugar  (00:03:59) - Yeah. I wrote an ebook about eight or nine months ago, Floyd. And, I did sit with a hedge fund trader for about three years learning from and trading with. And, he took his hedge fund from a million dollars to a billion dollars in 10 years. He worked for JP Morgan on the currency desk for a decade, and he always dreamed about opening a hedge fund, and he was a, literally a trading genius, and I learned a lot from him. And trend following and trendlines was the main strategy, and that's what I teach and, uh, use myself now a hundred percent trend following. 

Floyd (00:04:29) - You do trend trading, is that this similar to swing trading? Well,

Dan Sugar  (00:04:34) - You can apply trend lines and trend trading to intraday trading, swing trading, position trading and investing. It's a strategy you can use for all four lengths or all four styles of trading. So a swing trade you're in for two or three days to maybe two or three months, um, a day trade, you're in and out throughout the day, and then you, you're flat or neutral by three or four o'clock. So you can apply trend lines and trend following to all different styles and all asset classes, stocks, futures, Forex. So it's kinda universal.

Floyd (00:05:05) - Okay. And, uh, to get to what your knowledge base is for the trade students that you wanna teach, is it best to read the book or is it to take a workshop with you? How do you, how do you help people?

Dan Sugar  (00:05:20) - I think the best introduction would be the book. It's a, it's a quick read. It's 25 pages, an ebook. I go through, I touch on the history of going back to Charles Dow in, you know, 1910. where did trend line and trend following start? Edwards and McGee, you've, your listeners have probably heard some of your listeners are probably familiar with that book from the thirties and forties. So trend following and trend trading has been around for, you know, a hundred years or so, and, uh, a lot of hedge funds use at institutions. And you want to trade with the trend as much as possible and, and, and discern and define the, the macro higher timeframe trend and then find spots to join it. You don't want to trade against the trend,

Floyd (00:05:59) - Right? It is the same as philosophy as trade with the market, right?

Dan Sugar  (00:06:02) - Yeah. Pretty much Rising tide lifts all yachts,

Floyd (00:06:06) - <laugh>, <laugh>, yachts. That's a good one. <laugh>. Okay. And then, and then there's a difference between swing trading and day trading, right?

Dan Sugar  (00:06:14) - Yeah, yeah. Intraday trading, you're trading a, you know, throughout the day a couple trades, medium amount of trades, but at three or four o'clock or one o'clock Eastern, if you made money, you stop and you have no exposure overnight. Uh, swing trading, you do have some exposure overnight. You take a position for, again, two or three days up to two or three weeks, or six or eight weeks. Um, but it all depends on your lifestyle, your goals, your tolerance for risk. Um, I think swing trading's a great sweet spot. Day trading's very difficult. You're up against the algorithms and computers and program trading some sharks in New York and Chicago and specialists and market makers. But I think swing trading's a nice little sweet spot between investing and day trading where it's, it's less time invasive. You're not tethered to the screen. The rewards can be significant. You can get, you can find five or seven or eight to one risk award ratios and, uh, I just think it's a nice sweet spot

Floyd (00:07:06) - For the average person if they're trying to get started with day trading. They need to be aware of high frequency trading that's done by the big investment houses, right?

Dan Sugar  (00:07:14) - Absolutely. The, the algorithmic trading, high frequency trading, they have the faster speeds, faster access to the information and Bloomberg terminals, and it's an uphill struggle for the average, you know, investor that wants to learn how to day trade. It's very difficult. Not saying you can't do it, but it's very difficult. And I think swing trading is a much easier entry for newer, uh, investors that wanna segue into doing a little trading and learning, uh, to supplement their income.

Floyd (00:07:41) - Plus for day trading, you're sitting there at the computer constantly watching the screen to see whether those movements are happening that you dissipate so you can close out a position and make a profit or close out a position and take a smaller loss rather than a big loss. Right?

Dan Sugar  (00:07:54) - Absolutely. It's all about risk, risk management and watching your downside.

Floyd (00:07:57) - Yeah, and with swing trading, you have a much longer time period. You can set up your trade, you can put in a, a trailing stop loss order if you like, and Right. You can walk away from the computer and, uh, things are taken care of.

Dan Sugar  (00:08:11) - You can check your phone or your tablet once or twice a day, maybe noon or two o'clock at, adjust your stop if you need to or see if your target got hit, but you're not tethered to the screen for two and a half or four or five hours. Absolutely.

Floyd (00:08:23) - Would you say for the average investor that's just getting started, uh, what's the trends that they should be following? Where where should they be looking to find trends that they wanna invest in?

Dan Sugar  (00:08:35) - Six, two third or three quarters of the stock market is, is driven by the Fed. The F O M C, Jerome Powell, the Fed has enormous amount of power with, you know, the cost of money, the cost of borrowing money. Um, and there was a famous, a lot of your listeners, and I'm sure you're familiar, Floyd, you probably heard of this gentleman named Marty Zw years ago in the late seventies, early eighties, mentioned don't fight the Fed, which means if they're in a, a dovish easing lower interest rate policy, you wanna find, you know, pullbacks and replacements to get long stock. Mm-hmm. <affirmative> the market though stock market loves low interest rates and then don't fight. The Fed also works when they're raising rates, like, and they've been, they've been telegraphing and announcing they're raising rates for, you know, almost a year now. And that's why we're in a bear market and all the rallies are not sticking, and we make lower lows.

Dan Sugar  (00:09:24) - First thing I would have a new, new student understand is the, the Fed drives the market more than anything else. Sure, there's earnings on Apple and Microsoft and Tesla and some fundamentals. Absolutely, but two third of three quarters is the Fed policy. So when they're in a, a hawkish environment, uh, raising rates, it's not a good time for the market. Bonds are paying you three, four, 5% now for six months or a year or so, feds in a, in a dovish interest rate policy of lowering rates to stimulate the economy and mortgages are at 3% or three 9%. That's when you wanna, uh, be long stock. So that's one good lesson for newbies to really understand and learn.

Floyd (00:10:03) - It was easy to make money from, say, 2010 until net, uh, last year when the market was continually going up. So we had a long, long bull market, one of the longest in history, in fact. Uh, and then last year the market crashed not dramatically like in 2008, but certainly went down and lost money for the year. So now a lot of investors who've never experienced that bull market don't know what to do. So what advice would you give them?

Dan Sugar  (00:10:31) - Well, one thing that comes to mind is we used to say, you know, don't confuse bull market with genius <laugh>, right? So in a bull market for 12 years from oh nine to 2022, you know, you could throw a dart at the Wall Street Journal and, and get some, you know, be up 15, 30%. But you're right, a lot of new investors that have not been through a bear market, um, are experiencing one right now. They come every 5, 8, 10 years on average. They last, uh, 18 months or so, and it's about, you know, 25 to 33% or so of a pullback. Some go as much as 50% or 70%. The NASDAQ dropped 80% twice in the last 25 years. You know, 2000, uh, the, the.com bubble from 2002 when it, or 2,002,000 do what ended. And then oh seven with the financial crisis and the mortgage backed stuff.

Dan Sugar  (00:11:18) - So NASDAQ is a little riskier, more alpha, it dropped 80% twice s and p and Dow were about 50%. You gotta learn how to trade a bear market and, and draw trend lines. You know, what I teach is simple. I mean, it's, once you understand it, you just draw a trend line on the higher timeframes and, and if we break that trend line, there's a high probability that it's gonna start a new trend in the opposite direction. Do they all work? Absolutely not. Nothing does. But in my many, many decades of looking at charts and reading books and trading and, and learning different methodologies and strategies, trendlines and trend following, uh, have been around the longest because it works. They're really, they're really, uh, beneficial and helpful to get you into good trades, and you can manage your downside and know where to take profits and manage your risk. And, and, uh, when the market does turn, and my website's trendline break, so when the trendline breaks, it's a great tool to use. Like when Netflix went from, what, 600 or so to 150, it broke a weekly trend line. And, uh, if you were long Netflix and you had all those gains, why, you know, why be up 10,000 on Netflix and then only make three grand on it? You know, you gotta find a spot to lock in your gains and, uh, and a trend line can help you do that.

Floyd (00:12:26) - So, so far you said pay attention to the feds, see what they're doing, and trade with the fed, don't fight them, right? And then, then follow the basic trends of whatever the stock price is going up or down, and, and seeing how that's moving, deal with that movement by either buying or selling. What's the best advice that you would give to those people who've been in the market for a few years, saw this crash and got out and don't know what to do with their money now? I mean, they might have it in, you know, a savings account or treasure bills or something like that, uh, but they wanna get back in the market. Where do they get back in the market at?

Dan Sugar  (00:13:01) - There will be a new bull market starting, um, might be four months away. It might be nine months away. It could be 12 or 15 months away. First thing I'd like to mention is the concept of, it's a stock market, but it's really a market of stocks, right? So the indexes are coming down right now, but even though the indexes are coming down 15, 25, 30%, there's still some stocks out there that are going up mm-hmm. <affirmative>. So the indexes can be going down, and then a handful of stocks are fighting the index trend and, and still going up. So, you know, they can look for those kind of stocks that are, uh, going against the index, if you will. If we get above a daily or a weekly trend line, when a stock gets above a weekly or a daily trend line, then that could be the start of a new, a nice new bull market. You know, it's either a, uh, maybe just a short term correction of five or 10%. B it could be the start of a 40 or 50 or 75% mover. So we never know. No one's got a crystal ball. Mine's, uh, in the shop. I can't find a good mechanic, but <laugh>

Floyd (00:13:56) - Fix my crystal

Dan Sugar  (00:13:57) - Ball. But all we can do is look at the charts, look at the candles, and use our, uh, our trend lines to, uh, and then manage our risk and manage our emotion.

Floyd (00:14:05) - All right. So this is basically technical analysis at its best, right?

Dan Sugar  (00:14:09) - Yeah.

Floyd (00:14:10) - How do you feel about fundamental and analysis and the importance of that for the average retail investor to determine where they should be investing, what stocks they should be buying before they start following the trend lines to see what are the buying opportunities?

Dan Sugar  (00:14:25) - That's a great question, Floyd. You, first of all, you wanna define, are you an investor? Put your investor cap or your hoodie on, and then you're an investor. As an investor. Fundamentals are very important. Earnings, ebitda, sales, revenue, all that fundamental data is, if you know, very important, if your outlook is five years, 10 years, 401k, ira, college education, retirement. Um, so fundamental data's good for that, for short term trading, spring trading, down to day trading, or even position trading. It's all about the technicals. And so if your listeners wanna, you know, get up to speed, uh, learn, learn technical analysis, um, the, the, the institutions and the smart money, they leave footprints in the charts through the candlesticks, through patterns, double tops. Some people like head and shoulders, I like wedges and, uh, bull and bear flags type of things. So the, the big boys leave footprints in the charts, and the more you know about techn analysis, the better off you're gonna be. And, um, it's been really accepted now the last 10, 15 years, John Murphy wrote a great book, the Bible, uh, techn analysis of the financial Markets. But I would definitely advise to get some knowledge and education on, um, technical analysis. But if you're investor fundamental data is very important definitely. But as a short-term trader position, trader Options day trading, it's all about the technicals and the charts

Floyd (00:15:43) - In terms of managing your risk overall as an investor. Do you advise people to have a long-term perspective for a certain portion of what they have for investing and then invest maybe a smaller amount in short-term trading?

Dan Sugar  (00:15:59) - Yeah, that's a good, that's another great question, Floyd, do you want to divvy up your allocation and funds? You wanna have your big bucket 401k, ira, retirement for investing, and then if you wanna start with 15 or 25 or 30,000 or so to do some short-term trading study up on trends and trend following and technical analysis, you know, you might have a larger account at Fidelity or Swab or Vanguard for your investing, and then you separate your short-term account at some other brokerage firm if you'd like, and then keep 'em separate. Absolutely.

Floyd (00:16:27) - Is this something, that's a fair question. Do you have a, a short-term brokerage firm that you would recommend, or,

Dan Sugar  (00:16:33) - I use Interactive Brokers if they're, I'm gonna, I'm a, an advisor and my and my partner managed some money as well, so they have a great advisor situation. Um, but even for the retail trader, low fees, you know, low commissions or no commissions, depending on which way you go. But Interactive Robes does very good. Trade Station does a very good job. Thinker Swim does a pretty good job. I've been at IB for five, six years now and I really like it

Floyd (00:16:56) - At this point. Larry, I just wanna take a break. We wanna come back, we wanna get more information from Dan. We'll be right back with more great ideas for investing and building your financial security. If you're seriously interested in building your wealth, join us every week on the really Simple Investing podcast and check out our website@reallysimpleinvesting.com. You'll find more great podcast, our blog on investing and some great books from Floyd Saunders books like Investing for Beginners and Fight Paths to Wealth. Sign up for our newsletter so you don't miss listening to our guests and learn even more about the simple things you can do to become a successful investor. You're listening to The Real Simple Investing podcast and now more investing ideas. As we continue our interview. We're here with Dan Sugar, the author of Trends, trend Following and Trend Lines. He's also been a floor broker and a screen trader for a number of years, and has got his own academy for teaching people how to trade@trendlinebreak.com. You wanna check that out, Dan? We talked about some of the basics for investors to understand, which is, you know, follow the market, don't fight the Fed, see what the trend lines are. You also talked about the idea of the difference between being an investor and a trader. They can actually be both. Oh,

Dan Sugar  (00:18:12) - Absolutely. Yeah. Yeah. Most people start off as the investor, you know, they have their, their fonza, Charles Schwab or filled out Fidelity, Vanguard, et cetera. Um, but then their neighbors trading or they've heard some things about this and that, and then they knowledge and education and, and try to do a little side hustle. So, but yeah, make sure you have your different caps on and know what you're doing, right?

Floyd (00:18:32) - But more often than not, it's really just looking at what stocks are doing about, even in a bear market, there's stocks going up, there's always tr uh, trades that are happening that are most actively traded stocks, for example, and ones that are going up and ones that are going down. That's kind of an easy area to look at actively trading stocks, right?

Dan Sugar  (00:18:51) - Yeah, you could look at the, the 10 most active or, you know, high volume stocks. Um, you can watch and listen to Bloomberg or C n BBC or Fox Business and get some education knowledge. Read the Wall Street Journal, read Barons Investors Business Daily, of course. Mm-hmm. <affirmative>, you don't want to be a jack of all trades and a master of none. You don't want to try to watch 30 or 50 stocks. But if you could put 10 or 15 stocks in the radar list, uh, you'll find, uh, a few that are moving, uh, just to have, be looking at 10 actively and or under. Um, some people trade two or three stocks and that's it. They invest in 10 or 15 or 20, but they only trade two or three, maybe four. But they know those stocks, they know the technicals, they know the volume patterns.

Floyd (00:19:32) - Probably a good thing to do if you don't wanna try to trade commodities, stocks, features, options, four X and everything under the sun.

Dan Sugar  (00:19:40) - Absolutely, yeah. You don't wanna be a jack of all trades in a master of none. Become a specialist. Specialize. If you're trading fourex, look at one or two or three currency pairs. You're trading futures, you know, maybe one index plus gold or oil or you know, T bonds. Pick one or two or, you know, contracts to watch and follow stocks, like I just said, 10 or under. Some people start with five, uh, options. Same thing. You don't, you don't wanna be all over the place. Uh, so focus and specialize.

Floyd (00:20:07) - Now, one strategy that I think a lot of people try to follow, I'll look to see if you like this idea or not, is they have a portfolio of stocks that they're holding. They may have some nice dividend paying stocks in there, but they'd like to have a little bit of extra income. So they put a covered call option on a stock that they're holding potentially for long term. What's your position on covered call options?

Dan Sugar  (00:20:32) - I'm familiar with it. I personally have never done that, but I know the strategy when you're owning some stock, you can sell some outta the money calls. If stocks grind higher or pull back a little bit, you can do well and the options expire, you know, lower or worthless. Um, where you can get in trouble is if the stock takes off, which is good for your lawn, the stock, but if you're short, the call option is a covered call and it takes off. You gotta manage risk and it pick some spot to get out and bail, but it can work seven or eight outta 10 times nicely. What you gotta worry is those two or three times outta 10 that it doesn't work. You gotta manage risk. So just again, get knowledge, get education before you start doing advanced strategies. But a lot of people do it and they write covered calls on stocks they own.

Floyd (00:21:11) - And then let's talk about futures and commodities for a bit. You've done a fair amount of trading in that area, commodities exchange in Chicago. Is there a particular, let's a grain, for example, that you would recommend people get in on that's not particularly volatile or difficult or does it just change based on market conditions and everything, you know, so you have to kind of be flexible there?

Dan Sugar  (00:21:34) - Well, stuff that grows in the ground can definitely be, you know, can change because of weather patterns and, you know, uh, droughts, stuff like that. But I think a good little contract is corn. Corn's not as volatile as soybeans. It does move and trend. Um, and so I think corn has got a lot of volume and open interest. The spread between the bid offer is tight. So if you do a market order, you you're gonna get a good execution. The options are liquid. So corn's a good place to start for a newer, newer trader. And then

Floyd (00:22:00) - Where else would you, uh, recommend people go if they'd like to do, uh, some commodities trading?

Dan Sugar  (00:22:05) - Uh, this, these new contracts that you're probably familiar with, Floyd, these micro contracts are f fantastic. It's less margin, less, uh, less, less risk, uh, less reward risk is always gonna be commensurate with reward. But the e mini contracts started many, many years ago and now about two and a half years ago, they started these micro contracts. So it's less margin la, which is like a good faith performance bond or deposit on your contracts. Mini Dow, mini s and p, mini Russell and mini Nasdaq, they all have micro contracts now two that trade a lot of volume, have a big open interest and they have a tight spread be between the bid offer. You're not gonna make a lot, but you're not gonna lose a lot. You can open up a $5,000 count and, and learn to trade, learn the technicals, get that feeling of skin in the game, right? A little risk on. And you know, so those micro contracts, you can get more information@cmegroup.com, Chicago mercantile exchange cme group.com, they got all those oil, micro contracts, gold. So those have been a really good boon for, um, uh, retail investors and smaller traders that start that, that way. And, and it's been a great contract and great innovation for the Chicago Merck. I

Floyd (00:23:11) - Know the volatility in index is a good, uh, popular, let's say popular, uh, item to be trading on. Do you have a feeling about the volatility index

Dan Sugar  (00:23:19) - If you're a stock trader? Stock index futures, uh, s and p or spider qqs, the ETFs on the indexes, it's good to have some knowledge about the Vics dollar sign VI X. Um, it's a gauge of volatility. It's expected, anticipated future volatility. They look at the next 30 day at the money calls and put options on the s and p 500, put a figure on it with interest rates and so forth. It's a whole calculation, but basically it has an inverse relationship with the stock market. So as s and p goes up, there's less fear. It's called the fear gauge. So as stocks go up, volatility comes down, and when s and p goes down, volatility goes up. It's an in inverse relationship. I always tell students, you know, the market takes the stairs up and the elevator down. Sometimes it's the express elevator because our markets, whether it's real estate, gold bonds, stocks, they drop faster than they rally because fear and greed.

Dan Sugar  (00:24:10) - But yeah, you should have a good understanding of Vic's and there's Vic's Futures, there's Vic's options, there's Vic's ETFs. You should have a good idea of, um, on the relationship between volatility and you know, basically when there's no fear in the market, a lot of times we drop and when there's way too much fear in the market, a lot of times we go back up, you know, we used to stay on the floor. When the VX is low, it's time to go. When the VX is high, it's time to buy <laugh>. So you gotta time your entry. And, but um, there, it's a good little gauge to keep an eye on and is basically, people call it the Fear index. I've been calling it the Fear and complacency index when the VIX is low and the s p is awful frothy. Everyone's complacent. When does the big bad beer, you know, smack people in the face when everyone's complacent and not expecting it, stocks come down and Vic's spikes up. So, so, so even

Floyd (00:24:57) - If you don't trade the vix, you should be keeping an eye on it, basically. Exactly, exactly. Another thing that you want to monitor as well as what the Fed is doing. As a trader, what are the key indicators that you follow? Do you follow economic indicators or are you strictly looking at the market? Well,

Dan Sugar  (00:25:11) - I'm, I'm aware of the, uh, of the, the releases that come out. CPIs been very important lately. Inflation, um, unemployment, the first Friday of the month is always big. So you want to be aware of 'em cuz they can increase the volatility on a short term basis. If a trade crude oil every Wednesday at, uh, 10 30, the Energy Information Administration comes out with their inventories and supply of oil. So you want to be aware of that. But, um, I'm all about the technicals. I don't use any indicators. I, I use, well, the only indicator I really use is a simple moving average. Those, those are also called, uh, you know, dynamic trend lines. Mm-hmm. <affirmative>, I'm just about price, volume trends, trend lines, um, and chart patterns. And then I do use a couple simple moving averages to help me stand the right side of the trend.

Dan Sugar  (00:25:53) - Uh, you wanna be aware of the economic calendar, by the way, the, the Fed meets every six weeks. So sometimes it's a one day meeting on Tuesday and other times it's a two-day meeting. They take two days and it comes out on, we, it's on an economic calendar on Yahoo Finance and C N bbc. But you want to, every six weeks, the F O M C does meet and discusses their policy and interest rates. So as an investor in Trader, you wanna be aware of when those announcements are coming as investors to keep it simple. I like the name of your, you know, really simple investing. I told students I'd like the KISS method. Keep it simple students, right? Keep it simple. Students, if the fed's tightening, you know, the market's not gonna like that. If the Fed's easing the market loves low interest rates. Now markets don't go in straight lines. But when they're, when they're dovish, look to buy pullbacks and good spots to get along. Look for trend line breaks when they're hawkish. Look to sell rallies, sell into strength, sell resistance, sell supply, sell when the trendline breaks to the downside. But keep it simple. If

Floyd (00:26:50) - You really wanna take advantage of the experience of a third generation trader who's been doing this for more than 30 years, you wanna get ahold of Dan Sugar's book trends, trend Following and Tread Lines. And that's available only on his website@trendlinebreak.com. And then after you read the book, it might be a good idea to sign up for one of your webinars or some of your classes if you really wanted to get into trading. But as we mentioned earlier, don't take all your money out of your investment accounts and start trading it. Trade a portion of your money and keep your investments where they are. Especially if you've got a 401k, an ira, a Roth. The long-term future's probably better off in those kind of investments, but for the short term you can do some trading. Do you have any last comments on those kind of ideas? That's

Dan Sugar  (00:27:37) - Great advice, Floyd. Definitely. You want to, you know, take a small portion of your investible assets, start small, whether it's a hundred shares, 50 shares, one contract of options, or one mini contract or a micro contract. Start small, learn some technical analysis, learn, learn, trend following, and uh, go slow.

Floyd (00:27:54) - So Dan, this has been some really great ideas, some great things for people to think about and to learn more about. I think it's a great idea to get ahold of your book, maybe take some of your classes, look forward to talking to you again as we have an opportunity to bring you back and talk about some specific things that might be going on in the mark. And thanks for joining us today.

Dan Sugar  (00:28:11) - Thanks so much vo, I really appreciate it. See you next time. Thanks again.

Floyd (00:28:14) - Thank you for joining us for the really Simple Investing podcast. Every week we bring you fresh ideas for investing and really simple ways to invest and build for your financial security. Be sure and hit the like button, subscribe. Follow us on our social media channels and tell your friends. And if you'd like to be a guest on really simple investing, just go to the contact page on our website and send us an inquiry. Thanks. We appreciate our audience so much.