Trading Depth Interview #20: How Frank Pollack Came for Lessons and Stayed with Bookmap
American trader Frank Pollack uses Bookmap to support all of his trading activities. He was kind enough to share his trading history, approach, and the tools he uses to trade. In addition, Frank opened up about the importance of learning and emotional intelligence in his trading philosophy.
Tells us what trading means for you? What role does Bookmap play in the process?
I view trading as a profession. I believe no one should just jump into it and become successful immediately. Learning is essential. I equate the profession of a trader to the medical profession, where you need to go to medical school and study. I have studied auction theory and Bookmap has become an essential learning tool for me. It is highly accurate and shows entry and exit points.
Becoming a trader is like becoming a doctor. Learning is essential; this is where Bookmap comes in for me.
How did you start trading? How many years have you been doing it professionally?
I grew up around trading in New York. My friends were doing it, but I did not get involved at first. I started maybe around five or six years ago and got into it primarily because I had some money and wanted to invest. So, initially, I went into the stock market. I was doing quite well at the beginning, but the performance was generally underwhelming. I bought a couple of accounts, looked at different courses, talked to some people, looking at what might be effective. I have found a company that taught me statistics and modeling, read a couple of good books, took advice from people regarding the good stocks. At some point, I came across the futures profile that I was not understanding. Eventually, I figured it out and decided to apply it to stocks. I read a book written by Mike Bellafiore “One Good Trade”, as he talked about reading the tape. Then, I came across Bookmap and it all started to make sense. It was really easy to pick up, everything made sense and historical data was available.
Just a week ago I spoke to a trader from Germany who also found Bookmap extremely useful. But he also told me that it was not suitable for the novice traders. Was it easy for you to start using Bookmap in the beginning, given your trading experience?
It was easy for me, but I think that the problem with Bookmap is that many traders aren’t used receiving full information. The majority of the novice traders are technical traders. They look for indicators, while also expecting someone to tell them when to get in and get out. There is a lot of information on the market, but Bookmap helps you to find the most essential information. For instance, I can see the trades going up and Bookmap shows me the volume as the factor contributing to growth, effectively telling me to stay or to get out. In case I see rejection, I know that it’s a true order. In case I see the pull regarding volume, I want to stay in the trade, expecting the price to go up. Many people don’t understand Bookmap and do not see its full potential. As soon as the traders recognize the potential, Bookmap will be one of the most commonly used tools.
Interesting you say that, because traders from around the world have been telling me that as soon as traders understand Bookmap, they start using it as the primary tool. Do you agree or disagree with them?
I agree. As I know, Bookmap originated as a futures-based platform. The other solutions sold on the Internet promise quick solutions for traders, as they basically offer whatever follows the benchmarks. Such a solution is effortless, but my goal was to become an independent trader with an understanding of the market. I don’t need an indicator, a benchmark, or a chat.
I can look at any market and determine the approaches, including long and short positions, as well as potential errors.
Next, I use Bookmap for watching levels, as it helps me with pinpointing the core tendencies. In many cases, I go against external advice while advising others. I am not correct all the time, but I am right in the majority of cases.
How accurate are your projections as a percentage?
When I go into trade, I follow the approach of Paul Tudor Jones, looking for a five-to-one return on a trade. When risking $1, he’s seeking a $5 return. I am usually risking 15-20 cents while looking for a $1 return. The logic behind such an approach is that you have to only be correct 20% of the time to make a return. My ratio is usually 40/60 or even 50/50, implying that I am correct 40% or 50% of the times accordingly, which ensures the desired return. Today, I was correct one time out of three with a short position on Apple stock, which was sufficient to generate a return.
How long have you been using Bookmap? Do you think your trading has improved substantially since you started using the tool?
I started in December, 2018, so I have been using it for over 3 months. My trading has definitely improved. I started looking into Bookmap two or three weeks before I purchased and started using it. I watched videos on Bookmap and the one about basic market mechanics brought me in. I watched it several times and wanted to watch the other ones, which is why I made the purchase. I understood how market mechanics and liquidity work. Those are basic concepts, but many traders lack that understanding. I didn’t view the market as an auction before eight or nine months ago and that was a big reality check for me. You may have a situation with 1000 people buying 1000 shares and the liquidity corresponds to 900 shares. Therefore, one or two cells might push it down and Bookmap helps you see that.
Let’s talk more about your trading routine and schedule.
My routine is very basic. I get up at 6 in the morning, make some coffee, meditate, take a shower, and then look at my scans. I pick a stock that might be interesting to me and I compare it to the market using my profile. I load my charts shown to me in the profile. I look at whether the stocks are overvalued or undervalued, their record levels, and transfer them into Bookmap. I’m subscribed to Trade Ideas (TI), a resource I use for scanning. They allow customized scans and have built-in scans with AI program capabilities. I use TI to find stocks and see their movement direction and volume, which provides me with a strong basis. Then, I wait for the market to open. Next, I look at whether people are lining up with it or against it. If traders are with it and I don’t see anyone on top of these levels, I go long. Short trading is the same process.
Do you spend an entire session in front of the screens, or do you just trade for a few hours?
I usually trade for an entire day because I enjoy it. I like the process and participating. For me, it’s like a big puzzle that I try to put together to see whether I am right or wrong.
I guess news about different stocks is insignificant to you.
I could care less about the news. I don’t follow the news anymore, I don’t care what people say on TV, chatrooms, or Twitter. I find the stock that has movement and a lot of volume. When I see movement in that stock, I want to be around it. I want to see the levels, where people are participating.
How would you define what it means to be a trader?
I believe that everyone is a trader, even if they are really an investor. When you start a trade or investment, the minute you enter the order, you have to know the moment you are getting out in terms of a target. I believe it is essential to follow and monitor the trade constantly to make relevant decisions regarding the potential exit. Therefore, I believe that everyone is a trader.
What was the motivation for you to start trading and improve as a trader?
I started like everybody else, with the goal to make money. My trading over the years went from concentrating on how much money I was making to the actual process in terms of individual improvement. The smartest people in the world invest in the stock markets. Competing against those people and staying in the same realm is both challenging and enjoyable.
Have you ever panicked and what was your reaction later?
I used to panic all the time in the beginning. I had two accounts, as I was trading way over my head without a plan or goals, using primarily my feelings. Today, I have a clear-cut strategy before pressing the button. I know where I should be getting in and getting out, my target, as well as what to do when the market goes against me. I know immediately whether I made a mistake and go back to try again. I am diligent about hitting the targets and getting out, despite the temptation to stay and wait. Planning is essential, as trading in the moment results in mistakes. Risk management is crucial in the process.
Do you have any other advice to the traders reading the interview?
I think the biggest advice for new traders I wish someone had given me is not to be in a rush. The markets are going to be here tomorrow, next month, and in 10 years. Like with the Apple (AAPL) trade I mentioned earlier, it is OK to miss it out in case it was not in your plan. Tomorrow, there is going to be another trade. Do not jump in late out of a fear of missing out (FOMO). I missed three good trades today because I was in the other trades and I did not see them. I did not go chasing them afterwards, because I missed my spot. However, tomorrow is going to be another day. Learn your profession, take your time, become proficient.
Trading can be stressful, even when you become proficient. How do you relax after trading? What are your hobbies?
Well, one thing for sure: I do not trade for a living. The money I make trading is not paying my bills. Those are extra. I still work. I bartend three days a week and that covers all my bills. I can use money from trading for vacation or extra savings. I like to surf and I live on the beach. I love water and sun. I have a dog I rescued. I like rescuing animals; that’s what I like to do for myself when I am not trading. I think about trading all the time, though, and I love being involved in some way or another.
If I understood correctly, your trading money is your “risk capital” and losing it is not going to hurt you since you still have a day job?
I believe that it is another important thing: if you are trading to pay your mortgage, it might become stressful and lead to poor decisions. Trading with risk capital implies that losing funds will not affect your lifestyle. Such an approach implies that you can make better trades with a greater degree of confidence. Many people I know trade for a living, which may become emotional for them. They have to meet certain levels of return to pay their mortgage. It can become stressful for them.
In the beginning you mentioned a few traders and books you read that influenced you. Are there other traders who influenced you?
As I mentioned, Mike Bellafiore and his “One Good Trade” has taught me to take briefing and led me to Bookmap, which I appreciate. James Dalton is one of the forefathers of profiling, which has inspired me. Profiling and using Bookmap for order flow is a way to go.
Auction theory, market profile, order flow, and Bookmap are truly a winning combination.
Bookmap is a great product, I hope more people will start using it.
Where to follow Frank:
- Bookmap is a powerful learning tool.
- It is essential to have a plan and a strategy (and to follow it diligently).
- Avoid emotion and overreaction…there is always tomorrow.
- Trading with “risk capital” minimizes stress and adds confidence.
- Know your exit before every trade.