Interview, Fireside Chat
Starbucks Barista to 8-figure Short Selling Strategy · Alex Temiz
- Core Philosophy on Struggle: Alex Tamez asserts that all great traders must experience struggle and failure to learn risk management, humility, and how to grade setups; without these hardships, traders cannot discover their true capabilities.
- Personal Evolution: Tamez's career has shifted from a "gunslinger" mindset with aggressive, unselective sizing to a mature, professional approach that is highly particular about scaling and positioning.
- Origin Story Details: Tamez funded his initial $2,000 account by selling the rims off his car while working as a Starbucks barista; this account generated his first $1,000 profit on a short position in VGGL, which he described as the pivotal moment that gave him hope and established his short-selling edge.
- Market Environment Adaptation: He realized that his initial strategy of buying breakouts only worked in specific market cycles; in environments where the market is down 10% and oil is rising, buying breakouts on non-oil stocks leads to failure, prompting his shift to short selling.
- Risk Management Mechanics: To overcome "deer in headlights" paralysis during drawdowns, Tamez implemented mandatory hard limits:
- Auto-Liquidation: Sets a maximum loss threshold (e.g., -$5,000) where the broker automatically liquidates the account to prevent emotional decision-making.
- Max Size Caps: Restricts the ability to add to losers by capping total position size (e.g., 10,000 shares) to prevent risk ballooning.
- Loss Limit Ratio: Recommends setting auto-liquidation limits no higher than two days' worth of average trading profits to ensure recoverability.
- "Screw Your Average" Strategy: Tamez advocates abandoning the concept of an "average" entry price in favor of adding to winners; his reasoning is that as a stock moves in the trader's favor, the win rate of the setup increases (e.g., from 50% to 90%), justifying increased aggression.
- House Fire Analogy: He uses the metaphor of a burning house to illustrate risk: adding to a losing trade is like "adding gasoline" to a fire, whereas one should immediately exit (add water) to prevent catastrophic loss.
- Capital Management: Tamez maintains an active trading account between $35,000 and $60,000 to avoid over-leveraging, wiring out profits above these thresholds and only wiring in additional capital for "once-in-a-year" high-probability opportunities.
- Scaling Rules: He adheres to a strict 30/50/75 sizing rule for shorting stocks:
- 30% Max: Only allowed when the stock is above VWAP (initial position).
- 50% Max: Allowed after the stock breaks VWAP.
- 75% Max: Allowed after the stock breaks the day's low.
- Profit Taking: He takes partial profits to maintain patience and create a reserve for re-entry if the position bounces.
- First Red Day Setup: This is Tamez's primary edge, capitalizing on the exhaustion of momentum after a stock has extended (e.g., $2 to $60) and finally closes red for the first time after multiple days of gaps or extensions.
- Performance Statistics: Tamez reports having generated over $16 million in verified trading profits over a 12-year career, with a conservative estimate that 20% of the stocks he has shorted are now delisted.
- 90/10 Profit Rule: He confirms that approximately 90% of his profits come from 10% of his trades, noting that daily trading is essential to stay "in tune" with market sentiment to capitalize on those rare, high-impact opportunities.
- Data-Driven Personalization: He emphasizes that traders must track their own data to identify personal edges, such as time-of-day preferences, specific price ranges (e.g., $2–$10 stocks), and emotional triggers (e.g., avoiding trades on Mondays or after poor sleep).
- Elite Trader Traits: Tamez identifies the common denominator among seven-to-nine-figure traders as a "love of the game," a willingness to remain humble, and a continuous desire to learn from those more successful than themselves.
- Wealth Allocation Strategy: His current goal has shifted from aggressive trading profits to wealth preservation and lifestyle balance; he allocates trading profits into long-term investments (stocks, ETFs) to build lasting wealth rather than reinvesting 100% back into trading.
- Future Outlook: Tamez aims to reduce stress, improve sleep hygiene, and enjoy hobbies (specifically driving cars) while maintaining his obsession with finding new market edges, acknowledging that he is only 31 years old with significant growth potential remaining.
- Community Contribution: He actively posts daily live trading videos and vlogs on his YouTube channel (Alex Tamez MIC) to provide transparency and support for aspiring traders.