With millions of people working remotely over the past year, or even seeking a new career, there are few professions that have seen more of a boom than financial trading. Millennials and Gen Z traders particularly entered the market in droves, and not without controversy such as the saga that ensued with Reddit and meme stocks. But the entrance of so many traders into the market has also highlighted the need for greater education before taking risks that may not be fully understood. Paul Scolardi, CEO of SwingTrades, has seen this firsthand as his equities training platform has seen a wave of new interest, especially from younger investors, who want to learn responsible mechanisms for entering the market.
We caught up with Paul for his insight on what new traders, especially swing traders such as himself, should know before entering today’s volatile markets.
What was your first year as a trader like?
Paul Scolardi: My first year as a trader was spent trying to decipher how everything works. It was the early stages of internet stocks so it was an exciting time for technology. However, my early years were spent going through a period of boom and bust where I would make money then lose it as I did not have a firm understanding of how the stock market works nor did I have solid buy/sell and risk management principles. That is why I teach now after 23 years of experience and a current self-taught multi-millionaire I mainly teach to help new students today avoid the devastating school of hard knocks I went through when I was learning myself. I am concerned how many new retail traders are jumping in the market and blindly following stocks that are popular or in the news. Additionally, many social influencers without any history of trading have taken to posting about stocks and have acquired naive followers. Common phrases like ‘ stocks only go up” are very irresponsible and may cause new traders to lose all of their money. Learning strategy like the one I teach can prevent this and teach traders how to preserve and grow capital.
How long did it take to develop the methodology you now use successfully?
It was a learning process. In my early years I always had the talent to find stocks before the crowd that would go up but I did not have the discipline to decide when to buy and sell them. I have been teaching my strategy since 2013 and developed it starting in 2011-2012. I began trading in 1997 so from then until 2011 was a time of me getting weathered in all markets and making all the mistakes that can be made as well as honing in my super ability to find momentum stocks before the crowd. The beautiful thing about my strategy is that it can be learned in 1-6 months depending on how much time you have to put into it. I see that as completely worth it to learn another revenue stream to supplement your income and that at least has the potential to be financially life changing. Yet we all go through years of school and college to learn a trade that sometimes just helps us to get by (like I did myself before stocks). So my students leverage my 23+ years of experience culminating in a strategy that is perfect for those that work a full time job and/or cannot be glued to a computer screen.
Is there a mistake you made early on that you wish you could do differently?
I would have spent the first 6-12 months studying and paper trading until I learned a capital conservation and risk management strategy to grow my money. “Winging it” or trading with real money before learning these principles to me is begging to lose all of your money. The biggest thing I wish I learned is to know specifically when to buy and sell as I had a natural talent to find great stocks from the beginning.
How does a trader separate the emotion from the decisions that need to be made, even when a stock is moving in the wrong direction?
I teach that trading psychology is just as if not more than important as knowing the technical aspects about stocks. If you do not learn to control your emotions then you can be correct and still lose money. I have an entire lesson on this and I am constantly reinforcing it to my students. The biggest emotions to control are fear and greed. Additionally hope is not a strategy and regret can paralyze you from learning and growing. A trader can conquer these emotions and I teach them how to train themselves like an athlete to master these emotions.