Video Transcript: Trick Trades Review Part 2
In part two, my goal is either to find a track record of Pat by looking at his P&L, or follow Paths, recommendations to see if I can become profitable as a trader. I wanted to dig deeper so I engaged the moderator in the chat area. The moderator was very nice and he tried his best to help me. After going through all the start-up material, I was not clear on a couple things.
One, how to size the trades. So I asked the moderator the fall in question, I said, is there a place to go to learn about sizing? Cause Pat mentioned, number one, he said going small. And then he also mentioned averaging in. And I asked the moderator, where can I find the definition of, you know, these two things going small and averaging in.
And the moderator said that I can find, you know, the definition of going small in a video; video #160, and that was 19 minutes long. And the only thing that video taught me about Pat’s trading was: take one or two trades per day and so far, the only clear sizing recommendations are four stops and there was nothing specific on sizing in that video.
Now, as far as the definition of averaging in. The moderator defined that as ⅓ of my total size. So since video #160 did not answer my sizing question. I again approached the moderator with the following question. I said, I watched video #160, and I could not see anything on sizing.
Should I use 1% of my account to buy options, and do ⅓ when small or averaging in? What if I have a $25,000 account? How much should full-size be for an options position. So he answered my question and the answer was there is no set formula. So I wasn’t able to get anything to find really well on sizing. And then I was sent to two areas to see Pat trade, and one was the Facebook group and the other was the trade recap.
And I already went over the trade recap area and there was nothing I could verify about his trade results there. Now, as far as the Facebook group, I was able to find trade recaps on Facebook under a certain hashtag. And I counted about 21 videos in the Facebook trade recap area. Now this is obviously incomplete information.
I took a quick sample and looked at June 7th, and he mentions how a stock held support and provided opportunity at a certain price level. And it went back to see the pre-market on June 7th to see if Pat in fact called out that price as a level to get long. And he did make the correct call there. So in June he made six videos. In July, and it’s July 12th today, he has two videos. And the thing is that Pat will go over four to six possible trades every morning. And here in this Facebook area, you’ll see the videos of the ones that worked. So just throwing the numbers out there. There’s 20 days in a month, five calls a day from Pat and that’s about a hundred predictions per month.
And there’s maybe five videos on average per month in this Facebook area. So that’s about a 5% win rate, but I don’t know how often, you know, he has wins without posting. So those numbers are really not scientific in any way. Now, Pat does a screenshare every morning before the market opens, which is archived. Then he does a live trading session during the market, which is not archived.
So maybe the live stream during the market will give me better insight on his actual trades. So I decided to follow him in the mornings during the market open to watch him execute trades. Now he trades based on certain support and resistance levels as soon as they’re hit in the day. And that usually happens within the first 30 minutes or so of trading.
And I noticed that as soon as the levels are hit, most of the time, he just says: hey, the levels were hit; without committing any executions or without committing that he executed. And sometimes he does say that he’s entering. Now right away, if the stock reverses off of that level, he says, take profits. So there’s no real set profit target. The profit target is as little as a $0.10 bounce. And he says, take profits right away. And those calls of taking profits are not done by Pat until after they happen. Of course, he doesn’t say–he doesn’t like to say, okay, I’m in, and now I’m going to go ahead and take profits at this level. He doesn’t say that. He says, okay, I’m in or sometimes he just says, there’s a level that was just hit. And then he waits a little while. And if it goes this way, he’ll say, okay, get out now. Rather than calling where the profit target’s going to be ahead of time. So I showed up for the following morning calls, this one, 7/13/2021. He called a short of a stock at $75.66.
And he went to size on averaging in, and then the stock broke the $75.10, and then he said to take profits. So he hit a winner there, but the size was only his first average in and nothing more. So maybe ⅓ the size. So he did make the right call, but it was only very small size and he had just begun to average in.
Then he called one stock, a long, he mentioned to wait for confirmation, which is to wait for a certain pattern to show up before entering the trade. But he didn’t wait for that pattern. And he got in anyways. Well, he said he got in. So he said to get in at $79 and out at $79.10 for a $0.10 profit. This is what happened on the 13th.
Now the 14th, the next day, he called out locking in profits on three stocks. He said, go ahead, lock in the price . But he never called any entry on those three. And then 10 minutes later, he showed a chart on his entries and his exits and how he made money. On one of those positions he said, resistance won’t hold. And when it did hold and the stock came down. Without calling an entry he said, go ahead and take profits. Then he went on to say, this was a killer morning. Now, I can see why he does not archive these videos. I would say these three calls were all fake, but I don’t know, a 100%. Because I can’t see whether he’s executing anything or not.
The next day on the 15th. This was a very interesting day here. There was another guy on the stream. He had like an Australian accent. So I don’t remember his name. Pat was late. I think he had a doctor’s appointment or something, but Pat showed up around 15 minutes late and Pat made a call on SPY. He got short.
And he took profits about a minute later. So I decided to go into detail on that trade because I’m getting a little suspicious about Pat’s calls. On Pat’s screen is the time of day with a counter that is accurate up to the second. And it’s a chart, but it also has the time on there. And this allowed me to time his call to the second.
And I’m going to use Pacific standard time in this analysis, even though Pat’s on Eastern time. When he gets into the position, he gets long or short at the money options for maximum leverage. That’s part of this program, you know, SPY was trading close to $435 at the time on entry and exit. So to be consistent with this program, he was most likely trading long, the $435 strike put for this position.
And there’s no way of knowing a hundred percent because he never shares executions on his trading screen. Now he never mentioned what strike he put the trade on, or the entry price or exit price of the put. He stated a short entry at 6:00 AM, at 6:51 and 55 seconds. Then he exited, or I called an exit, at 6:52 AM and 46 seconds.
He also stated that he made $1,250 on the train. So at 6:50 and 55 seconds at entry, I recorded SPY at $434.91. At 6:52 and 46 seconds at exit, I recorded SPY at $434.77. So $434.91 minus $434.77 that’s a 14% move that he said he capitalized on in SPY. So I correlated a $0.15 move and SPY to the nearest expiration at the money put, which happened to be the $435 put and I calculated the put moved $0.05 in value based on the spy moving $0.15 in value. Now this $0.05 move is giving the benefit of the doubt as it could be less based on slippage. But remember, Pat called out a $1,250 profit. How many contracts would he have to trade to make $1,250 on a $0.05 move in an option? Well, one option is 100 shares. So every one contract is a $5 profit. So to make $1,250, you’ve got to divide that by five, that’s 250 contracts that he had to trade.
And I know Pat had to trade a minimum of 250 SPY puts without slippage to make $1,250 on a $0.05 move. So what I did next was capture the time and sales data. I looked at the 10 seconds surrounding entry and exit time, and I looked for 250 or more contracts in volume.
So at entry, 6:51 and 55 seconds, I checked all sales data from 6:51 and 50 seconds to 6:52 and zero seconds. So a ten second timeframe. Exit was 6:52 and 46 seconds so I checked all the sales data from 6:52 and 40 seconds to 6:52 and 52 seconds. So that’s a 12 second timeframe. So this is giving Pat five seconds before and five seconds after.
He made his call on the execution to open and close. I should see volume of 250 SPY options contracts within those timeframes. I might see 50 contracts here, 50 over there, you know, a clump of contracts adding up to 250. That’s possible. Now for the entry time, 6:51:50 (am) to 6:52:00 (am). That ten second slice.
The largest execution of a put contract executed was 18 and it was not even the $435 put like it should have been. It was on the $425 put. Now for the exit time, 6:52 and 40 seconds and 6:52:52 that 12 second area there. The largest execution of the put contract was 50 for one strike and 50 for another strike.
And neither of those were $435. They were at the $405 and the $434 strike. And they weren’t 250 contracts. They were only a hundred. Either Pat is making calls and executing five seconds before or five seconds after he makes the call, which is a long time, or he’s not executing the trades at all. And I hope this made sense.
And if it did not, please watch it again. And if you have any questions you can ask in the comments below. So my overall take from this analysis is that Pat’s claiming to make trades that are not showing up in the time and sales. They’re not showing up in the data. So Pat states watch and learn as I take trades while they’re happening in real time, he says actionable trade plans before they trigger.
And he said, trades posted in the Facebook group. I see no real trade executions. The only actionable trade plan is Pat calling out what he did after the fact without any proof that he executed anything? In fact, when you look at the time and sales of the one example I took in detail, there were no transactions that took place in the size he claimed that he made. The Facebook group only has a few charts, like maybe five to six per month with some extra marks on them to claim where he entered and exited. I think the reason I’m having such a hard time filling in the blanks when it comes to the rules of Paths trading system is because the total rule sets does not exist.
I cannot find a video properly explaining money management or profit taking. And I believe the reason he does not show his trades being executed in a real account is because, based on my analysis so far, he’s not even making those trades. And in my next video, I’ll attempt to ask Pat the 16 course evaluation questions.
Now I want to let you know real quick that I have a new options course for beginners, and it’s called “Options from Day 1”. And I left a link in the description below to get that. And also if you’re interested in a proprietary black and white trade plan, which is what I believe is the best way to trade options, I’ve provided this course for free.
And you just go ahead and click the link in the description below.
LINKS MENTIONED:
Link to my FREE Proprietary Trading Course: https://real-pl.com/landing-page-1/
Link to my FREE Beginners Option Course: https://real-pl.com/free-basic-options-course/
