“Ronchero” is a valued member of The Steamroom and a hell of a trader. After we got to know him a bit, we couldn’t help but ask him to share some of his experience with our audience. There’s boatloads to learn here, so enjoy!
Tell us a little about yourself and your background.
I grew up like a lot of middle class, mid-west, suburban kids in the 80’s. My family was Brady Bunched together with two step brothers, and for the most part we got along fine. I was super competitive, social, and loud through high school and college, playing ice hockey, lacrosse, then serving in the USMC (86-94).
My father was a typical suit-n-tie, upper management, take the train to the city, come home, yell at the kids for leaving the Goddamn bikes in the driveway again. He always had a funny relationship with with money, and myopic view of how the markets worked (in part from my grandmother who had endured The Great Depression). I had friends whose families had bigger houses, more stuff, better vacations, cooler cars, etc, and my parents were quick to say, “they must be levered to the hilt, because only a select few get to earn the big money.” I thought differently, but was told, “forget it, only Ivy League kids were cut out for that.” Like there was some secret revealed if you could get into the club.
I don’t respond well to being told I can’t do something whatever the reason.
When and how did you get started trading?
I’ve always been fascinated by the markets and amazed how much money can be made by everyday people. I loved hearing stories about people who had been smart enough to invest in companies like MSFT when it traded below a freaking dollar. Once the movie Wall Street came out I was hooked, and had to find a way to be a part of it.
After grad school I became a retail broker for a discounter. It was back in the day when bid ask spreads were huge, unregulated, and we got a piece of the spread on 1,000 shares or more. I quickly realized that I was making the firm money, not me. The desk made millions and millions off the spreads and we got crumbs. The real money was in hands of the traders.
I worked with a colleague who made $70,000 on a single MU trade around earnings. So, I started trading options in ‘95, getting LUCKY on options like COMS, INTU, AOL, etc.
I racked up ridiculous profits and managed to hold onto them until I got smoked in ‘98. I rebuilt my trading account several times after that, getting hammered again in ‘01, dodging a bullet in ‘09 only because I was out of the market and recovering from a divorce in ‘08. I only knew enough to buy calls and hold them. I was the dumbest of the dumb money.
In 2010, I befriended a retired market maker who was willing to mentor me, and set off to learn options. He taught me everything from pricing models, greeks, strategies, technicals, etc. It gave me the edge I needed to get back into the game after being burned up so many times. I looked for good companies that had been beaten up, bought deep ITM calls when no one else wanted them, sold premium on them while they sat in recovery mode. When they broke out, I rolled them up or sold them. This allowed me to build my trading account back to a reasonable level. I was still missing something in my trading however, and I couldn’t figure out why I wasn’t able to ride the short-term waves.
How do you trade now?
I am an options trader. I have always been drawn to their leverage and defined capital risk. No place else can you get returns and reduce risk like options. I am patient in some trades and not so much in others, but I am able to compartmentalize them into two categories. Day/short-term swing and longer term swing.
When did trading “click” for you– is there a story you can tell of when you suddenly “got it” (or something important clicked)?
Trading clicked for me when I got half way through the Master Course.
I’m not as academically astute as many of my friends or family, but what I do well is repeat something I don’t understand, over, and over, and over, until I can’t do it anymore. Then after a few days break, something hits me like a lightning bolt. All of a sudden I see the lesson being taught clearly. After spending hour after hour of practicing Tape Reading it just clicked. I could finally see what Lucci was talking about. Once I could see it, I was able to listen to what he was saying, not just hear him.
You mentioned the Master Course, and you’ve been actively involved in The Steamroom’s community… how have those two things impacted your trading?
My first week in the room I thought it was a crystal ball and I could just follow a Wiseguy and make money. I traded earnings going 0-7, pissing away $15,000 in a week. Naturally I pulled up and took a breath. The room is awesome, and filled with talented traders. If you slow down and listen, you’ll find the good traders and they can be very helpful. That was hard for me to do because I tend to enter a room on fire and piss everyone off.
What’s the hardest thing about trading for you?
The dude looking back at me in the mirror! Best friend and worst enemy all in one.
When you look back on your career, what were some of the biggest learning moments for you? Either from losses or gains, or watching someone else…
The Master Course in its totality is my watershed moment. This is where it all of a sudden came together for me. I was finally able to figure out who I was and why I was doing certain things. In short, I was guessing. Once I learned how to read tape, I could make better decisions, and most importantly execute. I cut losers off better because of tape. I let winners run because of tape and Wiseguy activity confirms my thought process.
The best real life example I can give is the most recent move in ADBE. On 9/26 a sweeper came in with the stock at 145ish. It was post earnings, the stock was getting hit and no one wanted it except this guy. I like ADBE as a company, agreed with his sentiment and wanted to be in on this little pull back too. It just stood out like a sore thumb to me. I was ready for a run up and shake out, because that’s what the pros do to retail and impatient degenerates. On 10/16 it pulled. Guess who showed up again? Sweeper jumped in again, confirming my long, and affirmed my swing position.
Today ADBE gapped from $153.26 to $172.16. That’s not luck, its practice, discipline, and listening to your training.
How do you keep your head on an even keel? How did you learn to do that?
Unfortunately, I have Lucci’s voice stuck in my head!
Kidding aside, it’s a good thing. His mental approach to this game fits my personality. Make a bunch of money, so what? Lose a bunch of money, so what? Keep it movin, because you just learned something, and you will crush it on the next opportunity. Free your mind from wins and losses by adjusting to what is happening. Your bias must be kept in check at all times, so you have the mental real estate to keep your trading going.
What was the worst single day of trading for you? How did you bounce back from it?
I lost $1.4 million in a week after the 9/11 tragedy. I don’t like to talk about it. Lots of bad shit happened to me in the 5 years post that event. I almost didn’t bounce back. When shit gets really bad I have a thousand voices in my head. All of my hockey, and lacrosse coaches, drill instructors, my dad, friends, and family, yelling at me to stop being a little bitch, and get up and fix the problem instead of bouncing off the walls only to come back to the same situation. Work through the problem, fight it out.
Okay, now tell us your juiciest trade story… that right place, right time, right everything trade…
I just gave the ADBE example. That one was very sweet. Since I have taken the Master Course I have had a bunch of winners and the balances in my accounts show material results.
SHW, WYNN, GS, BABA, ADBE, PCLN, FOLD, SQ, VXX puts, XOM, JD, ILG, and a few others. I’d have to go back to the journal and look. My premium selling skills have gotten a lot stronger as well. This is where cash piles up quickly. There is no one better at pointing out where the sloppy retail trader is leaving a decaying option out in the hot sun than Lucci. Seeing the other side of the trade and picking it off in a very quiet and efficient way is one of the most rewarding forms of trading I have ever experienced. I have some losses too but they’re not worth mentioning because they are small. Another plus of the Master Course. I see when I’m wrong, kill the trade, and move on.
What role does trading play in your life now? Some traders hate it but can’t help but do it; others find a way that works for them, and putting in the work easy/enjoyable… where do you fall?
I love trading. However, I am in a transitory period of getting my account balance back to $1 million so I can go do it full time. I feel as though I’ve had my wake up call here in the Master Course. It’s hard to balance two jobs and family at the same time, so I am letting it come to me instead of putting some crazy time table or stretch goal out there. That would just mess my head up and put me in the opposite direction of where I need to be. The days where I get to trade from open to close are awesome. I love the freedom of waking up at 6:00am and working til 1:00pm. Being done for the day to do whatever I want next is one of the best feelings one can have.
What’s the best part about trading for you?
I love almost everything about trading and the room. There is nothing better than seeing something no one else does, acting on it, then doing it again, and again.
Any words of wisdom or advice for newer traders out there reading this?
Know thy self. Figure out who you are. Do not bullshit yourself. It’s ok to be wrong, to miss opportunity, to take a loss, to take a gain. Laugh at yourself, and let others in on the fun. We’ve all been there. Admit what you don’t know, and do it fast. Once you let go of the thing holding you back (you), you will be open to learning, and execution. I have been to countless classes, seminars, coaching, but it wasn’t until I got here and let down my guard that I was ready to figure out who I was as a trader and fix a lot of the stupid shit. My way, won’t, and can’t be your way, but the combination of tape reading and Lucci’s psych is gas on a fire for me.
Interested in the Master Course? The next sessions starts on October 24th, and you can save 33% off up until then.
Share this Post