A Natural Competitive Drive That Has Fueled 20 Years of Trading: An Interview With Gianfranco
This article is based on an interview with Gianfranc, conducted and edited by Owain Higham.
Could you tell us a bit about yourself and how you got into trading?
Initially I got into trading when I was in high school, so this was about 20 years ago. The markets were always interesting to me, how you were able to make money and just how everything worked.
In high school I was also in a class where we were doing investments, picking the right stocks and seeing how much percentage you were making for the week, and I ended up winning the contest. It was very fascinating and I have always liked it since then.
When I got into college I was doing finance and international business here in Florida Atlantic University. From then on I kinda didn’t know what I was gonna go into, but I ended up pursuing my FINRA Series 6 licence that did everything in terms of investing in the stock market. I ended up going that route, working for a couple of companies. I was doing that for a long time; helping my clients, making money. Then I ended up just doing more things for myself, like investing, learning more about options, forex, and then I even got into futures just a couple of years from today.
It was a progression. I try to be a master of all these different types of investment instruments. Like I said, I was pretty much working for a company, making people money—a good chunk of it—but I wasn’t making as much of it as I wanted to. But then once I got more into investing by myself and then learning all these different strategies, looking at all these different ways to make more money, I was doing much better myself than I was working for a company. So that’s where I stand now after all these years. I’m making my own income on a weekly basis instead of working for a company and getting paid, I was pretty much now making my own money work for me, more so than helping out my clients. Now I’m helping out myself more.
What was your trading style when you started?
You know, I’ve also lost money along the way. I’ve tried all these other ways. Obviously the candlesticks on the charting, that worked well, using the support and resistance lines and all that. But sometimes it wouldn’t work, it wasn’t like a sure bet that it would happen, and that’s what brought me onto market profile and volume profile. So I started researching that within the last few years, and I also got into order flow. Once I got introduced to order flow, it was very complicated—all these numbers going all about there. I just wanted a simpler way for the order flow to show to me visually what was happening. That’s where I came across Bookmap and then it was so much easier to read; you could see the direction of where the market was going, whether it was regular stocks or futures. I was able to see the market direction and what’s going on within the market itself more clearly; why it didn’t do this, why it is doing that.
I also use Stops & Icebergs which are very helpful on the chart. Before using Bookmap I was blind. In a way, it was almost kinda guessing. But now I can see everything underneath the hood, so to speak, on what’s really happening with the market, what’s driving the market—especially with the volume, it’s very important to see that.
How would you describe your current style?
I tend to do a lot of futures, more short term. I also do options, which are more medium term.
I go with the trend. Sometimes I scalp—it all depends. But usually I go with the trend. Same thing with options, as well.
Are they all separate strategies?
Yeah, they are separate strategies. The futures, the ES, I just go ahead and get into the trend, but it’s more short term. It can be for the day or a couple of hours, maybe thirty minutes. If I make my percentage, then I would get out of the play.
But for the options, I tend to hold that up to a couple of weeks. I tend to buy two to three months out for the options, and then I would see what percentage I make. If I am gonna make thirty percent on the options, that would be a good amount of profit. I just do about ten thousand dollars worth of options. On the futures side I trade about three to four lots.
Do you look at options on Bookmap?
For options, I usually look at the SPY on Bookmap and certain other stocks to see how it’s going. But usually it’s the futures that I’m looking at; it can be the Nasdaq or oil. I would look at those plays for the futures.
So you look at the futures to get a grasp of the market and then you decide which product to use to trade it?
Right, exactly. In terms of the options, I would also look at the SPY. On Bookmap there is a separate chart for that. I see where the volume is, and it’s just easier to see where the flow is going on that.
But yeah, that’s two different strategies. I trade on two different accounts: the futures I have in Tradovate, and then the options I have E-Trade and TD Ameritrade.
You said you’ve been trading for twenty years. I’m assuming you weren’t successful right away, so how long would you say it took you before you experienced real success in trading; before you were disciplined enough, before you had a good strategy?
Honestly, it was probably a good ten years before I kinda had a plan in place which was working more consistently. During the last ten years, I was doing all these different types of strategies and indicators. Like Tom was saying in Bookmap, he doesn’t use indicators anymore. I was like that, using fifty different indicators and asking myself why this doesn’t work, why doesn’t that work, and then putting all those indicators on the map. It was a little bit crazy, and it wouldn’t work. It would probably work like 70% of the time, and yeah, you can make some profit along the way, which is fine. But I wasn’t really doing it consistently, and I wasn’t really sure of myself up until I found Bookmap. That really opened my eyes on how the markets work, about all these Icebergs orders and how the trading is going on.
From ameteur to professional—that’s how I would describe it towards the end.
If you could go back twenty years, what would be the thing you would do differently?
A better plan. It’s always good to have a trading strategy, a plan in place. I guess that’s what helped me along the way, even going back to without Bookmap: to have a plan in place. Where if something would fail, you would have to get out. Take a small loss, because there’s always the next play in line.
I would also have probably done more of the market profile and volume profile back then. That really helped me when I first got introduced to that just recently. And obviously if Bookmap was available back then, that would’ve definitely helped!
You mentioned Stops & Icebergs a few times. Is that another thing you focus a lot on?
Yeah, especially on the futures you can see that. Stops also, but I focus a lot on the Icebergs. Once you see huge orders coming in, you don’t wanna go against that.
Any other tool that is very important to you?
I have the SpotGamma levels which help tremendously. I have their subscription and I have those levels incorporated into Bookmap so I can see where those different levels are on the software. That’s very helpful.
Is there anything in your trading that you’re trying to improve right now?
I would probably have to say I sometimes get out too early. I would like to improve on maximizing my gains more.
You mean adding into positions?
Yeah, like that. Adding into positions or keeping it longer. Sometimes I put in a target and get out even before. I want to wait until I really hit my target properly. If I see it’s a larger trend, I want to improve that, where I’m able to stay in all the way until my target.
Would you say you’re a natural trader, or was it just something you were interested in and that you’ve had to mould yourself to become a good trader over twenty years?
I think it’s a natural thing. You know, everybody’s got their talents, and especially because I enjoy it. You’re always able to get better, so I of course have that instinct to always get better.
I’m competitive in nature. Whether it’s sports or whatever, I always try to win. That’s the other aspect of it. I’m always trying to win, to get better. It’s that ‘win’ mentality that is really gonna help you with investing. Like I said, of course you’ve gotta have a trading plan and all that, but yeah, I’m competitive in nature, absolutely!