A Day Trader Profile: 'Trade The Ticker, Not The Company'

In a new series, Benzinga is speaking to some of the most successful day traders from around the world.

Tim Grittani, a well-known day trader, pens blogs to assist others in the space. According to his blog, “Trade the Ticker,” Grittani's basic trading philosophy can be explained in one quote from fellow day-trader Nate Michau: “Trade the ticker, not the company.”

BZ: What is your day-to-day? Do you maintain a consistent routine?

TG: If the market is open, pretty much my entire day is spent in front of it. I get out of bed just before 8 a.m. eastern and go straight to my computer to see what's already started moving and how any overnight positions I might have held are faring.

I spend the remaining pre-market hours researching any unfamiliar companies that might come across my scanner, and from 9:30-4 I'm almost never away from my screen. At market close, I usually try to step away unless there are earnings I'm interested in and give myself some time to decompress.

Later at night I'll get back to work by updating tracking spreadsheets, making a watchlist for the coming day and researching new ideas.

BZ: What piqued your interest in day trading?

TG: I really became interested in daytrading when I was attending Marquette University. I was a finance major, and had come to realize that there wasn't a whole lot about finance that I found interesting. Most finance I had been exposed to when it came to the markets was long-term "buy and hold" — which I knew didn't fit my personality. So I started looking for other options and discovered the concept of daytrading. I decided to try it on my own and gain experience, and after nine months of struggles — and one account blowup — I finally began to find consistency. It was clear to me by the time I graduated that this was something I could attempt to do from home by myself.

BZ: Describe your best and worst days.

TG: My biggest winning day ever was trading Federal National Mortgage Association FNMA. I had traded it a couple months before on a day that it had similar action, and despite being very profitable, I felt that I had made some big mistakes and left a lot of money on the table.

In May 2013, I got my second chance. FNMA displayed some extreme volatility throughout the day, dropping from over $5 down to $2, bouncing back up to $4 and fading back off to the $2s again. Through a combination of long and short trades, I made roughly $215,000 by lunchtime. It was one of the most intense trading days I can remember, just from how exhausted I felt afterwards from it all, but it was incredibly rewarding to nail a play to that degree — especially so early in my career. My friends like to make fun of me because all I did to celebrate was go out to dinner and get a meatball pizza with my now-wife Donna.

My biggest losing day came from a stubborn short position that I held for a few days, Lakeland Industries, Inc. LAKE. I had gotten myself into a very bad habit over the previous year of taking stubborn short positions, being down large amounts unrealized, only to have the stock come back in my favor and get out unscathed. I learned the wrong lessons, which were that I shouldn't take losses and I could get away with it. It's exactly what set me up for this monster loss.

The loss came in October 2014, and I lost $290,000, far beyond anything I had experienced before. It was a complete gut punch and I had to take a couple of weeks off afterwards just to calm down and get my head back on straight. The stubbornness habit ultimately took months to correct, but it's definitely saved me from countless other losses that could have no doubt been worse.

BZ: What news platforms or websites do you always read?

TG: I really don't have a type of news that I seek out. As a daytrader, I jump from company to company, so whatever is running any given day, I'll look if there was a press release, or dig back through some older SEC filings to try to get a more complete mental picture of the company. I mainly use [SEC filing system] EDGAR to find filings, and my news I really can read anywhere.

BZ: Are there certain shows or talking heads you dislike?

TG: I don't pay much attention to the financial media. I am very cynical, especially about CNBC, and think that most content is total garbage. I've learned over the years that I don't like looking to others for ideas, even if it is someone I respect, because it just clouds my judgement and makes it tougher to trust myself. If I'm going to trade something and be wrong, I'd rather be wrong because of ME and learn that lesson the hard way. That way it will stick better.

Aside from financial media, one thing that really upsets me is the "alerts" culture in a lot of online trading communities. I understand that many new traders just want to follow ideas; I was the same way at first. But when a guru alerts that he bought a stock to thousands of people, it creates a flood of buyers into the market that pushes the stock higher and makes it nearly impossible for the guru to lose. The guru then quickly sells for his gain, and his followers are left holding the bag and taking losses because they can't get out in time.

Different rooms do this to varying degrees, but some are absolutely disgusting about it and totally recognize and take advantage of the situation. It isn't real trading, it hurts naive traders and I really hope some kind of regulations eventually are passed that make it illegal or something.

BZ: What tools do you use?

TG: I use candlestick charts on every trade I make, using basic technical analysis to help guide me in my trades. The main tool I use is a stock scanner. It allows me to input whatever specific criteria I want — for example, all stocks up 30 percent or more on the day — and will return a list of results. So I have a few scanners I run daily, and that is always the first step in identifying new plays for myself.

Related Links:

How Anne-Marie Baiynd Is Trading The Market Sell-Off: Fade The Bounces

How To Approach A Quiet Market As A Day Trader