Benzinga's 'Big Beat' Shares His Trading Strategy

Steven Orr, Benzinga's senior vice president, recently shared his insights on the trading industry.

Orr is known as "Big Beat" in the office and in the financial world. His interest in trading started at a young age.

“My parents asked me what I wanted to be when I grow up; I wanted to be a stock broker,” he says.

His fascination with finance persisted, and he studied commodities: “I learned corn, wheat, soybeans, pigs, hogs, things of that nature, and of course the stock market.”

Orr took a brief detour into politics, but has since resumed working in the finance space.

Traders must always have a thesis, Orr says. The thesis may entail macroeconomics or simple concepts like trading off important levels.

Thoughts On The Economy

A recession is on the horizon, in Orr's view. He points to the inversion of bond yields, debt and trade tensions as proof.

"We had the longest expansion in history, and where else can we go? You need to have the velocity of money — the U.S. government has flooded the world with cheap money at zero interest," he says. "What are you going to do with it? Invest it? Well, now, Apple isn’t really investing, they aren’t innovating, they are just buying their shares back. [The market] is overinflated, and that’s a problem."

Although the trade war is "getting nasty," the real issue is debt, Orr says: the U.S. is nearing $23 trillion. Subprime auto loans and education loans are problematic, he says.

"I’m finding that there is a lot of criminality within the student loan market, you know. Companies that are out there are saying, 'oh, we will give you a degree online, just go sign up for a loan and we will be able to get the money,' and most of [the students] don’t even stick around for the degree. They are still saddled with the debt."

Cryptos

Bitcoin's rapid rise in 2017 did not fit the thesis, Orr says. People were buying it in a hysteria.

"When it hit $6,000, I was like, ‘wow. That’s a heck of a jump. Oh, it’s at $9,000. Oh, its at $12,000.’ Look, I was the one who sold bitcoin at $19,000 back in 2017."

Now, bitcoin is a currency leveler, Orr says. "It is a place [to] park money when the market goes down."

Orr predicts bitcoin will rise to $20,000 around January and to $100,000 around 2022.

The dawn of crypto ETFs and acceptance by companies like Amazon.com, Inc. AMZN and Square Inc SQ will further the maturation of cryptocurrencies, Orr says.

Big Beat's Rules Of Trading

• Read “One Up On Wall Street” by Peter Lynch.
• Trade what you know.
• Every day is a new opportunity.
• The market doesn’t start at 9:30.
• Have a thesis.
• Learn technical trading.
• Time is your best friend.
• Don’t be greedy — take profit.
• Set a daily goal.
• Learn to leverage.
• Options aren’t scary.
• Always have powder.
• The whole world matters.
• The market never sleeps, but you should.
• Admit mistakes.
• When a trade is over, move on.
• Hope is not a strategy.
• Always have an exit strategy.
• Don’t chase.
• Don’t be afraid to sell your losers.
• If the market doesn’t humble you, you ain’t playing it.

"There’s literally only one way to learn the markets, and that is just doing it, every single day."

The Takeaway

Traders need relevant, fast-moving data they can act on, Orr says.

“I’m not going to speak badly about Bloomberg; but, look, I’m not paying $2,500 a month to get that data. Every trader doesn’t need that. Most traders just need good, honest, data coming in, whether that be newsfeeds or financials.”

In Orr's view, traders who are just getting started should focus on mastering psychology, fundamentals and technicals, and leverage tools like Benzinga Pro to maintain an edge.