Table of Contents
This interview features Richie Naso—Wall Street veteran, former NYSE member, and the guy who once helped move a massive chunk of IBM’s daily volume—on the Words of Rizdom podcast. He came up on the New York Stock Exchange floor in the mid-60s, earned the trust of giant funds, and later translated floor intuition into screen-based trading. In short, he matters because he blends old-school order-flow instincts with modern tools and explains them in plain English.
In this piece, you’ll learn how a pro thinks about algorithms (why they seek volatility and stop-hunts), how to anchor intraday decisions with VWAP and a fast EMA, and how to use a DOM/imbalance read to time entries without chasing. You’ll also pick up beginner-friendly risk rules (always place a stop, size to your tolerance, “prevent blowups”), why futures offer clean liquidity for quick hits, and how simplicity, focus, and journaling tighten your edge. By the end, you’ll have a concrete, no-fluff blueprint you can apply to your very next session.
Richie Naso Playbook & Strategy: How He Actually Trades
Core Setup: What’s on the screen and why it matters
Keep your view clean so decisions are fast. Richie keeps a simple chart stack—just what’s needed to read auction, momentum, and mean reversion. This section shows the exact tools and settings you can copy in minutes.
- Chart: 1-min and 5-min primary, 30-min context; futures or highly liquid equities.
- Moving averages: 9-EMA (impulse) and 20-EMA (trend guide) on intraday; no more.
- VWAP: session VWAP with standard deviation bands (±1, ±2) visible.
- Levels: prior day high/low, overnight high/low, premarket high/low, session open, initial balance (first 60 minutes).
- Tape/DOM (optional but powerful): watch imbalance and queue shifts near key levels.
- ATR(14) on the 5-minute for objective stop/target sizing.
- One layout per market; no tab-surfing. If you can’t see it on one screen, you won’t trade it well.
Where He Trades: Picking the right product and session
You need clean liquidity and volatility that actually pays. Richie favors instruments where fills are fair and rotations are repeatable. Use this to avoid choppy names and focus on A+ sessions.
- Prefer index futures (ES, NQ) and top-tier names with tight spreads and heavy volume; avoid thin small caps mid-day.
- Focus time blocks: first 90 minutes after cash open and last 60 minutes into the close; skip the dead zone unless the trend is intact.
- Stand down when VIX < 13 and premarket range is < 0.5× 20-day average; press when VIX > 18 or news drives range expansion.
- If two indices diverge (e.g., NQ strong, ES weak), expect fakeouts at VWAP—wait for confirmation closes, not just tags.
The Read: How he frames the auction each morning
You don’t need predictions—you need a map. This is Richie’s fast premarket routine that sets bias without getting married to it.
- Mark prior day high/low, overnight high/low, and gap from prior close; note whether price opens above/below VWAP.
- Classify the day type early: opening drive, opening fade to VWAP, or balance (rotate around VWAP).
- Bias rules: above VWAP + rising 20-EMA = long-only until a 5-min close below VWAP; reverse logic for shorts.
- If the opening range (first 5-min) breaks with volume > 150% of its 10-day average, treat the first VWAP pullback as an A-setup.
Entries: The actual triggers he uses
Entries are simple: impulse, pullback, continuation. Here’s how to time them without chasing.
- Trend pullback long: in an uptrend (higher highs/higher lows, price above VWAP), wait for a 1-min pullback that tags 9-EMA or VWAP band and prints a higher low; enter on the first 1-min close back above 9-EMA.
- Opening fade: if open gaps far above prior day high and fails to hold two 1-min closes above opening range high, short to VWAP with stop above the failure wick.
- Break-retest: for range levels (premarket high/low), enter on retest that holds with a 1-min reversal close plus rising tape (DOM bid > ask by ~60/40 near level).
- No fill if spread widens > 2× usual or slippage exceeds 0.2× ATR on marketable orders; skip the trade.
Risk: Stops, size, and when to stand down
Survival first. These rules keep you in the game long enough to compound.
- Risk per trade: 0.25R–0.5R of daily risk budget; daily max loss = 2R, then stop trading.
- Stop location: beyond invalidation, not feelings—use 0.5× 5-min ATR beyond the swing (trend pullback) or past the range edge (fade).
- If stop > 0.75×5-min ATR, reduce size so dollar risk stays constant; never widen the stop to fit size.
- Two consecutive full-stop losses? Mandatory 20-minute timeout; re-enter only on A-setups at VWAP/IB edges.
Exits: How he actually takes profits
Wins are managed, not wished into existence. Lock the first unit, then trail the rest as the auction proves itself.
- Two-scale model: take 1/2 off at +1R; move the stop to breakeven after the first scale.
- Trend trail: use a 1-min close under the 20-EMA (longs) or over it (shorts) for the runner; if price reclaims VWAP against you, exit remainder.
- Into VWAP: for opening fades, cover most into VWAP touch; hold a small runner for band extension if volume persists.
- Time stop: if price stalls for 15 minutes without printing a higher high (long) or lower low (short), scratch to free risk.
VWAP & EMA: The heartbeat of the day
VWAP is the mean the auction keeps testing; the EMAs show impulse and follow-through. Use both to avoid fighting the flow.
- Longs favored only when price holds above VWAP and 9-EMA > 20-EMA; shorts when below VWAP and 9-EMA < 20-EMA.
- First VWAP test of the session is high-probability; second test is 50/50; third test is fade-prone—size down or pass.
- If price rides the 9-EMA for > 10 minutes with rising volume, treat pullbacks to 9-EMA as continuation setups until a 1-minute close through 20-EMA.
Tape & Imbalance: What he looks for on the DOM
You don’t need to stare at every tick—just key spots. Let the tape confirm your level and timing.
- At levels (VWAP, IB high/low, premarket extremes), look for ~60/40 bid-ask dominance and a queue that doesn’t instantly evaporate.
- Enter on absorption + push: repeated prints that don’t move price through your level, followed by a burst that does.
- If you see sudden spoofing (levels flash then vanish) near your trigger, wait for a real fill after a 1-minute candle close.
Algorithm Awareness: Stop runs and fake momentum
Assume liquidity hunts exist. Your job is to avoid being the liquidity.
- Don’t pre-place stops exactly at obvious highs/lows; offset by 0.1–0.2× 5-min ATR.
- After a stop-spike through a level that immediately reclaims VWAP/EMA, look for the “trap reversal” back into the prior direction—enter with a smaller size and tight stop.
- Avoid chasing breakouts that travel > 1× 5-min ATR without a 9-EMA touch; wait for the first controlled pullback.
Play Selection: When to press vs. when to pass
Not every day is a trading day. These switches keep you from donating.
- Press when the opening drive holds above/below VWAP for 15+ minutes and the first pullback prints a higher low/lower high.
- Stand down during overlapping bars with shrinking volume and price oscillating tightly around VWAP (balance day).
- If news hits and 1-minute range doubles the 10-day median, switch to half size until the first higher-timeframe (5-minute) structure forms.
Position Management: While you’re in the trade
Professional behavior during the trade matters more than the entry. Here’s the checklist.
- If price moves +0.5R in your favor immediately, trail behind the last 1-min swing; if it stalls, revert to base stop.
- Add-on only after a scale-out: add 1/3 size on the next pullback that holds the 20-EMA; stop for the add sits under that pullback.
- Never let a +1R winner turn into a loser; BE stop after the first scale is non-negotiable.
- If the market flips regime (e.g., VWAP cross against your position with confirmation close), flatten—don’t rationalize.
Journal & Review: How he keeps the edge sharp
The edge compounds when you measure it. This is the fast loop Richie uses to tighten execution.
- Log each trade with: setup tag (VWAP pullback, opening fade, break-retest), R taken, MAE/MFE, time of day, and whether tape confirmed.
- End-of-day: screenshot the A-setup and the worst setup; write one fix for tomorrow (“enter only on close back over 9-EMA”).
- Weekly: export stats; if a setup’s win rate < 40% over 20 samples or average R < 0.2, bench it for a week.
Risk Framework: The daily plan that prevents blowups
Consistency beats hero trades. Cap the damage and let good days breathe.
- Daily plan: 4 trade attempts max; stop after 2 consecutive full-stop losses or after +3R net, whichever comes first.
- News filter: no new positions 2 minutes before top-tier releases; resume 3 minutes after if spreads/vol normalize.
- Position cap: never exceed total open risk of 1R across all positions; scale out before adding new exposure.
Quick Start: Copy-paste rules to run tomorrow
If you want the shortest path from idea to action, start here. It’s the distilled version you can tape to your monitor.
- Trade only the first 90 minutes and last 60 minutes; skip the middle unless the trend is clean.
- Longs only above VWAP with 9-EMA > 20-EMA; shorts only below VWAP with 9-EMA < 20-EMA.
- Entry = pullback to 9-EMA/VWAP band + 1-min confirmation close; stop = swing ± 0.5× 5-min ATR; first target = +1R; trail with 20-EMA.
- Two losses in a row → 20-minute break. Hit daily +3R → close platform.
Size Risk First: Position to Survive, Then Aim to Thrive
Richie Naso’s first rule is simple: the trade only matters if you’re still around for the next one. He sizes positions from the stop outward, never from the dream target inward. Daily loss is capped before the open, and each idea earns only a small slice of that budget. Volatility sets the leash—bigger ranges mean smaller size, tighter days allow a touch more.
He treats 0.25R–0.5R per attempt as standard, so two losers don’t wreck the day or the psyche. If the stop distance widens because the market’s hot, he cuts contracts or shares to keep dollar risk constant. After a first scale-out, he trails aggressively so realized gains protect the next setup. That discipline, Richie says, is how you compound: survive the chop, press the clean edges, and let math—not emotion—decide your reach.
Allocate by Volatility: Expand in Range, Contract When Markets Sleep
Richie Naso frames exposure around the tape’s energy, not his opinions. When the realized range expands, he allows more attempts and wider stops—while cutting unit size—so the account breathes with the market. On tight, sleepy sessions, he shrinks everything: fewer trades, smaller targets, and a faster trigger to scratch. His baseline is simple: volatility up → size per position down, but opportunity count can rise; volatility down → size steady but trade frequency falls.
He measures it, not guesses it—think 5-minute ATR for stops and a quick VIX/premarket range check for the day’s “gear.” If 5-min ATR doubles versus last week’s median, Richie halves contract size and accepts slippage; if it halves, he waits for A-setups only. He scales out at +1R in both regimes, but in high vol he trails looser to capture bursts, while in low vol he tightens quickly to bank the grind. The result is consistency: Richie lets volatility decide how hard to press, keeping risk stable and the edge intact.
Diversify Smartly: Underlying, Strategy, and Timeframe—Not Just Tickers
Richie Naso doesn’t “diversify” by owning five tech names that all move together—he diversifies by behavior. He splits risk across underlyings (index futures vs. a liquid large-cap), across strategies (trend pullback vs. opening fade vs. break–retest), and across durations (scalps vs. intraday swings). If two plays are driven by the same factor—say, Nasdaq momentum—he counts them as one bet and sizes accordingly. The goal is simple: avoid doubling up on the same risk dressed in different tickers.
He also staggers entries so one bad minute doesn’t clip the whole day. Richie allocates a fixed daily R and partitions it: one unit for VWAP pullbacks, one for opening drives, one for mean-reversion fades—but never fires all three in the same market regime. When correlations spike, he reduces concurrent exposure or trades only the cleanest tape. That way, drawdowns stay shallow, edge stays measurable, and every dollar of risk pulls its weight.
Trade the Mechanics: VWAP, EMAs, and Liquidity Beats Prediction
Richie Naso doesn’t forecast—he measures. He watches price relative to VWAP and the 9/20 EMAs, then lets liquidity confirm the idea. If price is above VWAP with the 9 over the 20 and bids are firm, he thinks “mechanical long,” not “macro story.” When those conditions flip and the tape thins, he stops pressing and waits for the next mechanical read.
Entries are timed on a pullback to the 9-EMA or VWAP band with a confirming close; exits scale at +1R and trail behind the 20-EMA. If spreads widen or DOM support vanishes at the level, Richie Naso cancels the order—no exceptions. He treats mechanics as the throttle and brake: structure gives the green light, liquidity says “go now” or “go smaller,” and prediction never gets a vote.
Choose Your Risk: Defined When Learning, Undefined Only with Edge
Richie Naso teaches that new traders should live in defined-risk trades until their playbook stats are proven. That means every position has a hard stop at invalidation and a pre-planned first scale at +1R, so losses stay small and wins pay for exploration. He wants you to “buy tuition cheaply”: risk tiny, record everything, and only expand when your data says the setup works.
Once a tactic is statistically positive and you can execute it cleanly, Richie allows more flexible, “undefined” risk— but only with strict guardrails. Max daily loss is fixed, add-ons are permitted only after banking partial profits, and any regime change (VWAP flip against you, liquidity vanishing) forces a flatten. He avoids placing stops at obvious highs/lows to dodge hunts, offsetting by a fraction of ATR to let the idea breathe. In Richie Naso’s world, risk is a conscious choice: define it while you’re learning, then selectively loosen the leash when your edge—not your ego—earns the right.
In the end, Richie Naso’s edge isn’t a crystal ball—it’s repeatable mechanics wrapped in ruthless risk control. He maps the auction with VWAP and a tight 9/20 EMA stack, times entries at pullbacks or break-retests, and lets liquidity on the tape/DOM confirm the moment to go. Volatility dictates everything: when ranges expand, he shrinks unit size and accepts wider stops; when they compress, he gets choosy and banks faster. That discipline keeps him present for the next A-setup instead of stuck nursing a preventable drawdown.
He diversifies by behavior, not ticker symbols—spreading risk across underlyings, strategy types, and timeframes—while respecting session structure (hit the open and close, skip the sludge). Stops live beyond invalidation, position size is set from the stop outward, and profits are managed by first scale at +1R and a rules-based trail. New tactics start with defined risk until the stats say they’re real; only then does he loosen the leash, and even then, the daily loss cap is non-negotiable. Strip it down and the lesson is clear: trade the mechanics, let volatility set your gears, protect capital with boring consistency, and the math will do the heavy lifting over time.
