Veteran Wall Street Trader Reveals Strategies Used At Stock Exchanges

Summary

In this insightful video, veteran trader Richie Nasso shares his 40-year journey on the New York Stock Exchange floor, emphasizing the importance of understanding market algorithms, risk management, and trader psychology. He reveals the significance of stop orders in successful trades and offers practical advice on scaling trades and managing emotions. Richie's experiences highlight the necessity of preparation, discipline, and the reality that trading is a marathon, not a sprint, debunking the myth of get-rich-quick schemes in the stock market.

Takeaways

• 🤖 Algorithms dominate the stock market, not big institutional players or hedge funds.
• 🚀 Richie Nasso started as a runner making $60 a week and became one of the most powerful traders on the New York Stock Exchange.
• 💼 Nasso's initial business was trading IBM, which at one point constituted 19.78% of the S&P 500.
• 🌐 Nasso opened offices in London and Switzerland, trading for some of the largest institutions in the world.
• 📈 He executed the first program trade in the history of the NYSE, involving 10 million shares.
• 🎓 Nasso's educational background is high school only, emphasizing the importance of intuition and experience over formal education in trading.
• 🛠 Nasso's routine involved early mornings, connecting with European clients, and constant study of market conditions.
• 📊 Emphasis on the importance of understanding technicals, emotions, psychology, and the role of algorithms in market movements.
• 🔁 Nasso recommends against single entry trades due to their risk, suggesting traders should scale into their positions.
• 🚨 He warns of the manipulative tactics by market makers who can see order flow and stop losses, advising traders to be aware and act contrarily.
• 💡 Nasso's final advice is to manage risk, study diligently, and approach trading as a marathon, not a sprint, with no shortcuts to success.

Q & A

What is the main point the speaker emphasizes about the control of the stock market?

The speaker emphasizes that algorithms, not big institutional players or hedge funds, control the stock market by creating liquidity and volatility at premium and discount levels.

What was Richie Nasso's initial role when he first started at the New York Stock Exchange?

Richie Nasso started as a runner at the New York Stock Exchange, making $60 a week.

What stock did Richie Nasso begin his trading career with?

Richie Nasso began his trading career with IBM, which at the time constituted 19.78% of the S&P 500.

How did Richie Nasso's trading business evolve over the years?

Richie Nasso's trading business evolved from trading one stock, IBM, to controlling 30% of the daily volume and building up a clientele that included major institutions and corporations.

What was the significance of April 19th, 1983, in Richie Nasso's career?

April 19th, 1983, was significant in Richie Nasso's career because he executed the first program trade orders in the history of the New York Stock Exchange, involving 10 million shares.

What is Richie Nasso's educational background in finance?

Richie Nasso does not have a formal educational background in finance; he has a high school education and attributes his success to his gut feel and experience in trading.

What is Richie Nasso's advice for traders regarding managing emotions and psychology in trading?

Richie Nasso advises traders to stay centered and focused, to think like a criminal to avoid being swayed by emotions, and to understand the market makers' tactics to not be taken advantage of.

What trading strategy does Richie Nasso suggest for new traders in the stock market?

Richie Nasso suggests that new traders should study charts, technicals, emotions, and psychology, and emphasizes the importance of understanding algorithms' role in controlling the market.

What does Richie Nasso recommend for traders dealing with large orders and managing risk?

Richie Nasso recommends not putting all eggs in one basket and using a scaling system for entering trades to manage risk effectively, rather than relying on single entry trades.

How does Richie Nasso approach taking profits in his trades?

Richie Nasso likes to take 75% of his profits off the table while keeping the other 25% to let it run, using trailing stop orders to manage the remaining position.

What is Richie Nasso's view on day trading in the current market environment?

Richie Nasso believes that day trading is the way to be in the current volatile market environment, as it allows for capital to be kept moving and managed effectively.

What is Richie Nasso's final advice to traders watching the video?

Richie Nasso's final advice is to limit risk, put in the necessary work to prepare, and understand that trading is a marathon, not a sprint, with no get-rich-quick schemes.