Peter Reznicek is the founder and head trader of both RBC Asset Management, a Philadelphia-based asset management firm, and ShadowTrader.net, an advisory firm, launched in 2005 which provides daily recommendations and analysis of equities and foreign exchange pairs.

Mr. Reznicek also educates over 15,000 ShadowTrader.net subscribers each weekend through his free Sunday presentation, the ShadowTrader Video Weekly and also as editor of their flagship publication, the ShadowTraderPro Focus Report.

This is the final installment of my recent interview with Chief Equity Strategist Peter Reznicek.

Optionetics: How would you characterize your technical approach to the markets?

Peter: It is totally top-down. Once I am sure that all the planets are lined up, so to speak, I am using basic T/A such as trendlines, candlestick patterns, breakouts, wedges, and fibonacci retracements.

Optionetics: What do you think are the greatest misconceptions beginning traders have about trading the markets?

Peter: On both of these issues I would say the greatest misconception is that it doesn't take any work or maintenance. The days of just buying stocks and letting them sit there for many years while the dividends roll in have been over for some time now. The game is very short term recently and regardless of whether the participant is a discretionary or systems trader, the basic misconception is that at some point its all just on auto-pilot. That's never true, unfortunately. Too many people think their job is over once they enter

the trade. In reality its just begun and the hardest part is still ahead of them which is the management and exit.

Optionetics: What kind of advice would you give a person just now beginning in trading the markets?

Peter: Paper trade until profitable and while doing so keep a very strict journal which will detail the nuances of every single trade taken.

Optionetics: Can you describe what your average trading and analysis day entails from preparation to execution?

Peter: My universe is about 850 stocks right now and I usually scan these at least 3 nights per week and religiously on the weekends. I find all of my trades from this group of stocks. Once I have candidates selected, I am constantly checking and rechecking my watchlist to see evidence of relative strength or weakness amongst the chosen stocks. I like to then get in the strongest names long at moments when I feel the broad market should move higher and the weakest names short at moments when I feel the broad market should move lower.

Optionetics: What kind of decision-making process do you go through before deciding on a particular trade and a particular sector of the market that would be worthy of putting on a position?

Peter: It's different for every trade, but my main concern is one of relative strength or weakness that the stock may be showing in relation not only to the market, but to other

stocks in its sector. If the market is up broadly and a stock that I may be interested in buying is doing nothing or down on the day, it often gets dropped from my list.

Optionetics: Thanks, Peter, for sharing your thoughts about the trading business with our Optionetics reading audience.

Jeff Neal
Senior Writer, Options Strategist
Optionetics.com ~ Your Options Education Site

Questions for Jeff? Please visit "Ask the Traders" through the discussion board on the Optionetics.com home page.