Yahoo Finance’s Jared Blikre sits down with Founder of AlphaTrends.net, Brian Shannon, as they discuss financial markets, trading, risk management, and stocks.

Video Transcript

- A lot of people speak in terms of certainties, and there are no certainties in the market. Nobody knows. Chairman Powell doesn't know what's going to happen when he talks. He doesn't know what's going to happen in the market. He thinks maybe I can steer the market in this direction, but he might miscalculate the market does something else. Stanley Druckenmiller, he doesn't get them all-- no one gets them all right, and that's not the point.

The point is to make more money when you're right and lose less money when you are. So for me, the red flags are people who speak in certainties, people who have these massive price targets on things, and never address risk. Every single time I put a tweet out there, I have a stop on it. And I say this is my worst case stop.

Make the trade your own, meaning here's where, as a swing trader, I take no-- if you come back to me-- and I learned this the hard way. I wouldn't put stops out there. And I'd say, I like this stock at 26. And it looks like it's maybe going to 30. And I would get stopped out at 28.65 or whatever I said earlier. And then two months later, it'd be down at $18 per share, and someone would come on Twitter and say, hey, Brian, I'm still holding this thing. What do you think? I'd just be flabbergasted that somebody would be holding it.

So make the trade you own. Always have a stop. And just because that's my stop doesn't mean it should be what you do. That's my stop for my time frame. So, to answer your question directly, if somebody doesn't mention risk, at least their risk, ever mention risk, just, I ignore them completely. If people come onto my Twitter and start saying, Bitcoin is going to do this, I generally mute them if I'm in a good mood. If I'm in a bad mood, I block them. There is no certainty. So risk management is always job number one, no matter what your time frame.