Conversation w/ Mike

So I started this thing where I'm taking an HP out for drinks each week. This week was Mike and I already got Jonathan lined up for next week. Mike also told me Anthony would be a good one to talk to as well and that would be pretty easy since he was one of the guys that did the round robin interviews with me.

Mike is predominantly a momentum trader and he gets in big size when he likes what he sees. It doesn't seem like he does anything too special preparation wise for the day, just spending some time watching bloomberg and reading WSJ in the morning. He also uses Thompson I think for more technical levels, which I might have to ask some follow up questions on that.

Since Mike trades a lot bigger size, which obviously I'm not there yet but it's something to think about as my position size gets bigger, he usually doesn't play some of the ETF's he trades unless it's got 1.5 times the average volume for the day. He also watches the NAV. I tried watching it thinking maybe the ETF will converge back with the NAV or have some other theories but basically b/c I couldn't find anything conclusive to validate my theories I stopped watching the NAV but now I think I'm going to pull it up on one of my tapes and see the trend the NAV is making. I don't suspect it'll make a drammatic effect in my trading but it's just another indicator for me to get in/out quicker or judge my position size. Mike also says he uses the NAV for some pre market trading, like couple minutes before the market opens and there are programmed ECN's coming in. If futures gapped up/down big, like 15 points then he'll try to play it and get hit close to yesterday's close.

We also spend some time talking about flipping a trade, which is something I have thought about but when you're in an actual trade and you've just lost money on you sometimes don't think about flipping it to go the other direction or you think you're revenge trading, but if something is breaking the trend then get out and flip to go the other way is one strategy, or if you're getting in front of a big size and that big size is getting hit, go ahead and take your out and flip the other way b/c chances are other people are trying to get out, too.

I also ask him how they're trading BRK shares and really it's no different from any other stock in that it moves in correlation to the futures and the A shares correlate w/ the B shares. The value is a lot higher but you're trading 1 or 10 share lots so the spread is really not that bad. Maybe the next time there's an imbalance I'll play it to get my feet wet b/c otherwise it looks really scary. There are other guys in the office that play a lot of the high dollar stocks like WPO, MKL, Y, SEB, WTM but I don't think I'm there yet, even if Mike says there's some really good money to be made in them.

Mike's imbalance strategy seems a little different from what our pod does. He seems to be getting in big size almost right before the close and then put limit order out just a few cents away to ensure that he'll be able to get out

Other than that, I think I'm on the right track. Some of my strategy are pretty similar to what Mike does so that does make me feel better. What I need to work on is just making good trades and gradually get in more size, like 100 or 200 shares more at a time to increase my comfort level.