26 Questions With Derrick Oldensmith


Get to know Pro Trader Derrick Oldensmith in this fun interview!

*This transcript has been edited for length and clarity

Who are you?
I’m Derrick Oldensmith and I am a Senior Trader and Registered Principal at T3 Trading Group.

How long have you been a trader?
I’ve been a trader with T3 for about 12 years. I was a sales trader for a different company before that. And I've been involved in markets in one way or another since I was a kid. I bought my first stock when I was about 13 years old.

Do you love it?
I love what I do. Every day is different, and that's what gets me excited. I’m looking at the same Excel spreadsheets all day, every day. I'm studying the market. My role is to figure out the next step of this constantly evolving puzzle.

What’s the most important personality trait for a trader?
The most important personality trait for a trader is to be disciplined. Discipline, first and foremost with your risk management and your money management. A lack of discipline with risk management and money management is the number one reason why traders fail in this business. You also have to be disciplined with the rules that you create for your trading.

The only way that you can be a consistently profitable trader is to be consistent in regards to your actions with the market. The only way that you can do that is by having rules in place that you are consistently following. That may sound easy right now, but when you're in front of the screens, and your P&L is moving, it can be very difficult.  

What’s the best trade you’ve ever made?
One that just comes to mind right away was being long JNUG on the run back up after Covid. It might not be my best trade ever but it's up tere. It’s a 3X leveraged junior miner gold ETF. I always think it's funny because for most of my career I've disliked the gold miners as trading vehicles and even as investments. Yet here I am involved in a 3X leveraged junior Gold miner ETF in a multi-week swing that turned out to be one of my best trades ever.

How do you define success as a trader?
That's a very individual question for each trader based on the goals that they make for themselves. First, you have to have goals. And then success is in achieving those goals and then in the creation of new goals. Those could be goals for profitability, for consistency, or for building an account size.  

How do you stay up to date with the changing financial markets?
 I read a lot of news and information. And what I try to avoid as much as possible, which is really hard in this day and age, is other people's opinions. I want more of the cold, hard facts of the news. And then I take that information into my own brain to try to figure out the next steps. And then of course, you need to have the the technicals confirm that. But this is not a 9 to 5 gig. There is a lot of work that needs to be done in order to be successful in this business. 

What’s the hardest mistake to avoid while trading?
Probably getting in your own head. It goes back to being a disciplined trader and having a disciplined approach. It always sounds very easy on paper that you just have to do the right things consistently over time with your trading. But in practice, it's so easy for us to get in our own heads. You get shaken out of that one trade right before it works. Or you have a bad P&L day and then it affects your next day of trading.  

What did you hate most about learning to trade?
It's a tough question, because I love learning, period. The hardest thing about learning, though, is probably the fact that you're going to take a lot of step backs, right? A lot of this business is, you take two steps forward in your trading, two steps forward in your learning process, just to then have the market environment change, or you take a P&L hit, or a new obstacle gets in your way. And then you're taking one step back. But sometimes you have to take that one step back in order to learn more and take those next two steps forward. So, I love learning in general, but you're absolutely going to hit stumbling blocks along the way.

Do you beat yourself up after a bad day?
Before I can answer, I have to define what a bad day is in trading. I don't think that a good day or bad day is necessarily P&L based. Obviously, that has something to do with it, right? If you have a big P&L day, up on the upside or on the downside, it's hard not to feel a degree of emotion about that. But the real thing to be asking yourself when you have that good day or you have a bad day is, “did you do the right things today?” Because if you did all the wrong things and made a lot of money, you should not be happy about that. As a matter of fact, if you are happy about that, you're setting yourself up for long-term failure. The truth is that we work in a game of probabilities. Sometimes you will do all of the right things and still lose money. You have to be able to take a step back and say, “Hey, I did all the right things. If I did this 100 times, I'm gonna be making money in the long run. It just didn't work out today.” So, when I beat myself up, it isn't just because I lost money today. It’s because I made mistakes that caused me to lose money. Or heck, even mistakes that  cause me to make money. That's the real big problem. That's when I beat myself up. That's when I go, “You've been trading way too long to make this mistake. How could you do this? How could you allow yourself to lose this money by making a mistake that you know is a mistake?” And I think it's appropriate to beat yourself up in those situations. But it's not appropriate to beat yourself up if you did the right things and still lost money. 

As a kid, what did you want to be when you grew up?
I wanted to be a trader. I grew up in the 90s and saw the whole tech bubble come into play. That's all everybody was speaking about back in the late 90s. And that really made an impression on me as a kid. And I was like, “Wow, I want to know more about the stock market. Instead of doing dirty jobs to make money for myself, I want to learn about how money can make money.”s. So, really, this is what I always wanted to do.

What would you do if you weren’t a trader?
I'd probably would be a ski bum somewhere, just chillin’ in a van in a parking lot waiting for the snow to come out so I could hit the slopes again. Or I would be involved in martial arts. I’ve been teaching martial arts for 20 years and I'm a former world champion fighter. It's not just the competition of the sport, but I also love training and developing others. And I put that into teaching traders.   

Do you believe in luck?
This is something I talk about with my traders. I don't think that a successful career is defined by luck. If you look at a trader over the course of a year, his or her P&L is not luck. It's entirely based on the success and failure of the decisions that were made. I think that in individual instances, there is a luck factor. But, it's a big mistake to allow yourself to dwell on that luck factor. It's a big mistake to allow yourself to say, “Oh, this just happened because of bad luck.” Or, “I'm super unlucky, why does this always happen to me?” If it always happens to you, it's probably not luck. You need to dive into your approach and your strategies and figure out what you need to do differently.

What’s your favorite social media platform?

I don’t know. I'm super addicted. I don't really post a lot on social media. But I can’t help sending friends funny videos and just scrolling when I have free time.

Who’s your biggest inspiration or role model?
At this point in my life, I really don't have an answer for you on that one. Sorry!

What’s the craziest thing you did in your 20s?
I fought professionally, right? I had 12-round professional world title fights.  When I signed on the dotted line, I was literally signing my life away. And I would do that to step in front of another person who was going to spend the next half-hour trying to actually kill me. So that was a pretty risky, crazy thing I did when I was in my 20s and through my early 30s.  I miss the competition. But I retired because it's very dangerous and I didn't want to put myself in a position where I could have long-term brain damage or any of the things that can happen to fighters.

If you could have one super power, what would it be?
It would be the ability to snap my fingers and respawn my P&L and start it over on a bad day.

What do you think is the biggest change we’re going to see in the markets before the end of the year?
I don't know if we're going to see a lot of change. We're in a market environment that is defined by historic levels of volatility and low liquidity. And I don't see that changing into the end of the year. I think we're gonna stay really volatile. We might have a big another big bear market rally into the end of the year on the upside. We might crater down to new year lows. It's going to be a pretty interesting end of the year. I think that the end of the year is going to be about balancing building into this Fed pause that everyone is starting to look to with the potential damage to the economy.

Cats or dogs?

Chocolate or vanilla?
Cookies and cream.

What’s your favorite or most useful trading technique?
It's hard to answer that question because I incorporate so much into my trading. And I don't think that the approach or the system is complete without all of the other aspects of it. So if I say technical analysis, then I am foregoing the importance of market dynamics. It used to be tape reading. That's true. I still implement tape reading into my trading. It's just not as important as it as it used to be. But it's all part of a complete system for me. So it's hard to really kind of take any one thing because, I preach that you can start by learning some simpler kind of dummy trades. And maybe you can, if you’re disciplined, make some good, consistent P&L off of it. But to take your trading to the next level, you have to be able to digest all of this dynamic information that's going on in the market and put it together so you can spit out in a way that breeds consistent profitability.

What’s the funniest thing that ever happened to you as a trader?
I used to keep my dress shoes at the office and wear sneakers to the office. And one morning I put my dress shoes on and walked into another room to do the morning meeting. It felt like I had a big rock in my shoe. When I got into the other room to do the morning meeting, I took my shoe off… and a giant roach that fell out of it. And then on the trading floor,  we dared a guy to eat it.  So he threw some hot sauce on and chomped away.

What’s the worst advice you’ve gotten?
I don't have an answer to that because if somebody gives me bad advice, I just blow it right through.  I'm not listening to that. I don't listen to people who tell me that you can't be successful or you can't do it or you shouldn't. I mean, how many times that people told me over the years when I was training to become a world champion that, “You're not physically strong enough to be able to do that. That sport will never be right for you.” And despite the naysayers, I was able to do it.

It's the same thing with trading. There's going to be so many naysayers along the journey to success in this business because trading is hard. And not everyone who pursues it is successful. And you can't listen to somebody else who maybe wasn't successful, tell you that you won't be successful. You let people like that get in your head, you'll never be successful in anything that you do.

I've always let it brush off my shoulders and told myself that I can be successful at whatever I choose to do if I'm willing to put the time and the effort and the work in.

What’s one piece of advice you would give to a young trader?
Focus on risk management first. When you're in the early stages of a trading career, you will lose money. And that's okay,  as long as you're learning from it and it's part of a process. Obviously, we want you to make money right away. That's ideal, but it shouldn't necessarily be the expectation.

You just can't allow yourself to dig yourself too deep. And the way to do that is to have rules in place. Again, for risk management and money management. Be disciplined with those rules. And that way, even if you lose some money in the beginning of your career, while you're going through the learning curve, it’s peanuts compared to what you're gonna make if you're successful.

I remember the first time I lost $700 in a day as a new trader.  It was right off the open in about five minutes. I wanted to cry. I worked all these minimum-wage jobs in high school trying to make money for myself. I could lose a week's worth of work in 5 minutes. If my P&L is down $700 at this point in my career, I still consider myself to be flat. I don't even notice it. 

If you could tell the world one thing, what would it be?
I would love for everybody to come together and be able to talk again. I just feel like people have become so extreme in their viewpoints that nobody wants to down and engage in conversations and understand what somebody else's viewpoint is. We, as a people, need to all be able to come together, communicate, be understanding of each other's ideas and where everyone's coming from. Because without an understanding of one another, we're doomed  So we need to be able to come together and communicate. 

Thanks for sitting down with us Derrick!

Derrick Oldensmith's current positions as of 4:45pm ET, November 15, 2022:

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