The Stock Trading Reality Podcast

It’s always good to have a variety of journeys and experiences as it brings a true all around view of the markets. Thanks to our guest this episode, Dan, we certainly hear about a strategy that is unique. While we’ve had past members discuss such strategies, it is view and far between. I do not personally use Dan’s approach or anything of that nature, but that doesn’t mean Dan is wrong. It doesn’t mean I am right. It just means that there are many pathways up the profit mountain within the world of the financial markets. As long as it works and there is a sense of personal risk comfort, that’s the key. With that being said, let’s get out the blender and blend together some fundamental and technical analysis into one. Notes: Today we interview community member Dan. He utilizes a more fundamental approaches to trading. One way to define his style would be contrarian value investing. After doing research on a company and monitoring it for at least a month, only then will Dan look to purchase a stock. His general timeframe for a trade is up to 2 years. Dan uses the volatility of a stock to help determine potential targets. Since he is buying things that are possibly 50% off their highs, it’s not out of the question to target 40-60% returns on them. He has always taken the Option Trading Simplified course to help expand his trading. He mainly goes long stock but he has no problem utilizing options to synthetically short if his thesis agrees that a move down is probable. Dan enjoys utilizing the advice of veteran traders because he believes they have more intuition about overall market direction since they have been involved for so many years. Quotes: I think the first chapter for wealth creation should start with ‘how to save.’ Let's say you want to buy 1000 shares. Start with 100. Watch for another month then buy another 100. I bought Robotic Trading years ago and go through that 3 or 4 times a year to stay fresh with technical analysis. I have 11 tickers I’m trading. Six of them are down so I’m a loser … but I’m up $818 dollars. You have to be a good loser.

Even if you don’t trade Forex, realize there is still plenty of great stuff in this discussion from a general trading experience perspective. Our guest today, “MJ” as he goes by him the community, has been through much on his forex trading journey and he is still going strong! One of my favorite parts (and a great example/reminder for us all) of the interview was how the voices in his head tricked him into practicing in a very irrational way. Sure, maybe you or I would never do something like that, but it brings up the valid thought of, “maybe I’m doing this somewhere else in my approach to the markets?” This of course is just a sampling of one of the many rabbit holes we venture down, and I assure you there are plenty of other valuable conversations too. Give it a listen, you’ll be glad you did. Notes: Today we interview community member MJ. His grandfather traded in the market and offered to teach him. Unfortunately this did not work out too well for him but he attributes that failure due to being unfamiliar with the emotions attached when money is on the line. While analyzing the strategy in depth, MJ realized this did not work best for him. He went back to paper trading but was doing it in an unrealistic way that utilized hindsight and cherry picking why he would pass on losers and take winners. After discussing with his wife, MJ joined the University program and got through many courses multiple times. He also decided to move from futures trading to forex trading. After trading on a very short tick chart for futures, he is really enjoying trading the 4 hour chart for forex. This also works well considering he has a full time job. He monitors 20 major pairs but does not trade them all. MJ has found that the spreads are more favorable throughout the US session and generally avoids the European and Asian market hours. Quotes: My grandfather actually traded. He mentioned how effective his system was and it could replace my income so that’s where it started. I paper traded and paper traded and paper traded however I was lying to myself because I’d start at the far right edge and work backwards. If I can’t afford to put this money in the trash can and set it on fire then I can’t afford to trade with it. I keep my risk so small that if I lose the trade it makes no difference. Having money on the line makes me focus. Often I look back and realize I did not screw up my analysis. I was just wrong. When you take a loss it’s the cost of doing business.

This story is crazy. It’s hard to believe the truth of it, but given the market he used to generate the gains, the volatility was certainly available to grow money at quick rates. I do want to throw out this disclaimer though… while I find this interview extremely inspirational and motivating, all of that is derived from something outside the money. Let’s face it, these results are not typical and should not be the reason you venture into all of this. Of course, you should want to make money, but if you are only going to be happy with the amounts you’ll hear.. the odds are HIGHLY likely you’ll be disappointed. What I found most interesting and motivating with out guest, “Zentaro”, is how after an unfortunate career experience, he was left in a rough spot. He could have used it as a crutch and excuse but he didn’t. He put the axe to the grindstone and took matters into his own hands. I don’t want to say anything else at risk of spoiling, so let’s go! Notes: Today we interview community member Zentaro from the Netherlands. He tells us about his time as a policeman before he was honorably discharged. This led him to try to find another form of income. A friend had suggested he start trading CFDs. After a week of trading on demo, he was profitable and thought all he needed to do was fund an account and he’d be rich. In the first week of trading on a funded account, Zentaro made 50% of his entire account value and thought he figured it all out. Unfortunately that is not how it would work out. After losing a few thousand Euros, it was suggested that he start to trade cryptocurrencies. This was around the time of the US elections and speculated on TrumpCoin and PutinCoin. These trades eventually went to zero. Cryptocurrency was something that made more sense to him though. He continued to have an interest and ultimately turned 12,000 Euros into over 800k. Now he risks less than 5% per bitcoin on trades while still trailing his winners. Zentaro has been diversifying his income by purchasing rental properties and owns a drone business where he is the official Dutch distributor. He has also started to utilize the Grow Rich course by focusing on dividend stocks to help set up his retirement accounts for the future. Quotes: They said I couldn’t operate in society. They gave me a little welfare support and that was it for me. I was only 35 years old. In this chat room you were just a robot and pushing the button. A puppet. If you do your homework correctly, you’ve got some real coins that will go up over time. I’m looking for second homes to buy to put up for rent. I also started the Grow Rich course. I’m accumulating dividend paying stocks. For me it’s only charts. I use price and volume as leading indicators.

I have conflicting feelings with this discussion. My greedy side absolutely loves to know this happened as it provides such a great learning opportunity for others; however, I truly do feel bad and annoyed that this actually happened to such a nice guy. Community member Ben, “close2pga” (chat room alias), walks us through his journey and how at the start he was mislead into thinking someone could shove their personal strategy down his throat in order to teach him how to trade. This is one of those marketing ploys that drives me nuts. First, it’s simply false and misleading and second, it gives the rest of us (myself included) a bad name as being scum bags. I digress though. Ben’s willpower and determination to bounce back from this initial hiccup I found very inspiring and I’m sure you will too. Ben is a business owner himself, so he offers up some solid perspectives on market dynamics and trading that will I believe offer great value. Let’s get to it! Notes: Today we interview Ben who goes by close2pga in the community. Ben is an avid golfer who gets out almost 2 times a week and also owns a driving range. Since he leases the land his business sits on, there came a time when he thought that lease would not be able to renewed which led him to look into other sources of income. Ben started looking into various online education for trading and while some of it was good, it pushed him into trading one single way. This is absolutely not a one-size-fits-all job. He had about 6 months to learn how to trade and that pressure did not help him with his learning. After finding Clay, Ben decided to go through the University program and has now put those other two education sources aside. He has noticed what triggers bad habits such as chasing price or not honoring his stop loss and has found remedies for those issues. Since Ben no longer has the pressure of time since he has no issues with his lease, he is now utilizing his patience and persistence to get through the educational content. Not only does he not have the pressure to succeed in a new line of business in 6 months, he is now set up for success by having the guaranteed trade (his JOB) to keep him even keeled as he proceeds through the program. Quotes: It looked like I was going to be forced out of my business. I knew I would have a hard time getting a regular job after working for myself. I really put in my head that I needed to make another living in less than 6 months. It was not good to put that pressure on myself. I noticed that my scanner pulled up momentum stocks that I might just jump into it. How can I stop this? Get rid of the scanner. It’s not the money per say. The freedom to have time during the day is what I’d like.

It’s always enjoyable to catch up with past guests and hear about their journey as it continues to unfold. That’s exactly what Chezz and I do in this episode with longtime community member “Mr. Bee”. If you’ve spent any amount of time in the chatroom, I’m sure you’ve seen Mr. Bee at work. He’s come a long way since our last conversation with him as he learns and masters more areas of the market. The one aspect of our talk that I found intriguing and personally beneficial was how he approached increasing his personal risk tolerance within various strategies. Risk tolerance is critical component of trading success and it was awesome to hear Mr. Bee’s perspective and experience with it. I hope you enjoy this discussion as much as I did. Let’s go! Notes: Today we reinterview community member Mr. Bee. After picking up where we left off in his last episode, Bee had continued to focus on trading advanced options. The important thing to remember is that he stuck to the strategy in both good times and bad instead of jumping around to different strategies. A big turning point for him was developing the courage to trade ‘naked’ positions (all of which are explained in the course). Considering there are many mechanics to keep in mind when utilizing trading this way, Bee has always continued to try to learn more each and every month to get a better understanding. Mr. Bee has leveraged speaking to other community members heavily in the past 4 years since he started trading. The ability to bounce ideas off of other members with no agenda can provide some real insight as to potential problems in a trade idea. More eyes is generally better than less. As he continues trading into 2018, he fully accepts that he is a swing trader and wants to continue applying what he was taught even more often if the opportunities present themselves. Quotes: I really have a genuine interest in trading and options really opened that door up to me. There were days that my PnL didn’t make sense. It takes you down the rabbit hole in regards of what you can learn about trading. I butcher the order while changing it. I’m going long and this thing just starts bleeding to death. I took the loss. Had to do it. You can make enough money trading options using very little money. That’s what led me here. I’ve found a comfortable balance. I’m going to do a lot more charting in the evening since swing trading is my strategy. Links: https://claytrader.com/podcast/episode071/

Having confidence in something is a good thing in most areas of life, including the financial markets. This is where the catch-22 comes into play within the markets. Confidence vs. too much confidence (“Koolaid”) can be a very big problem for both traders and investors. Our fellow member from the community, Tony, walks us through some of the major hazards that koolaid can and will introduce into your portfolio. I give him a whole lot of credit for being open and honest about just how bad the koolaid affected him, but as you’ll see, by admitting his blindness and mistakes, he has now been able to put himself on the proper path to success. Looking to learn from some real life cautionary tales? Look no further. Tony shares plenty with us! Notes: Today we interview community member Tony. He decided that he wanted to have more control over his 401k so started to look into different stocks to determine if he wanted to be invested with them or not. Unfortunately, he had lost most of that account and took 8 years off from the market. He assumed that it just wasn’t for him. Tony’s uncle got interested in the marijuana stock boom and started to tell him about all the opportunities that were out there. Even after two bouts of failure, Tony still did not give up the dream of being involved in the market. He knows that it is possible to have his money make money for him whether it’s from an active standpoint or a more passive swing trading standpoint. This led him to decide to invest in his education. He forced himself to stick with paper trading until he finished a predefined amount of courses. Tony realized that there is no point in jumping back in the market if he did not practice the material he was taught. After two months on paper, Tony is back to live trading now. Since Tony still works a full time job, he has focused strictly on swing trading which he can set up in advance the night before. This is a drastic difference than the trading style he tried before where he would just stare at a chart for hours on end hoping for a move. Now he does his homework the night before and executes the next morning. Quotes: I pretty much lost all that 401k money. There was no plan. There was no strategy. That was it. That was it for a while. People were posting that it’s a real company so here I am jumping back in the bathtub of Kool-Aid watching all my money go away. I realized I have to learn how to do this or there is no point. I don’t want to lose my money again. I have a plan and I’m going to stick with the plan. If I don’t stick with the plan, I’m going to do the same thing trading stocks. So now because of Robotic Trading, I’m able to take that emotion out of it and not just staring at it waiting for a move.

We have a rare case of someone who experienced fool’s gold… but… in a contradictory way, realized and admitted to themselves that their success was actually NOT “skill”, but rather “luck”. Upon this discovery and self admission, where did their journey go from here? Our guest from the community, Angelo, tells us all about the decisions he has made along with the rationale behind them. What I really enjoyed and learned from was you always need to keep your ego in check. Even though Angelo has a college degree in finance, he was still able to see through many potential pitfalls that others commonly fall into. Lots to learn, so let’s go! Notes: Today we interview community member Angelo. While he has a degree in finance, his interest only spanned as far as his mutual funds and 401k. After Robinhood launched, he was intrigued by the no fees which led him to become a much more active investor/trader. A majority of Angelo’s friends were just looking for low priced stocks that they could load up on and hope they went higher. Angelo also falls in the category of finding fools gold to start. The difference is that he recognized that he had been lucky and wasn’t a prodigy. He realized that he didn’t want to continue down the path of inconsistent trading so he decided to invest in his education AND he closed his account so that he would strictly focus on the education first. The pattern day trade rule really hindered Angelo’s short term trading. He once again closed his trading accounts because his situation was suboptimal. He realized that the market will be there in the future so he decided to focus strictly on the courses and paper trade alerts from the community. Angelo still has a few courses to get through but will be considering implementing advanced option strategies so that he can still trade while having a full time job. It is crucial to understand where you are at in your journey and he is not rushing anything. Taking the logical route through training and practice leads to consistent results. Quotes: One of those degrees was in finance. It was mostly looking at my target funds and 401k’s but that changed at the beginning of this year. I was up 2 grand and had no idea why or what happened but I remember feeling pretty good. In the back of my head I knew it was luck. My friend’s thought I was crazy for spending that much money on education. Eight months later, it’s been worth every penny. The big issue I was running into was the PDT rule. It’s the worst thing in the world. It messes with your psychology. I know what I’m willing to risk on each trade so that makes it easier to find what fits your plan versus going wild wild west and wondering.

You are busy? You don’t have the time to make it happen? Nah. I’m going to go ahead and say you’re either lazy or simply don’t want “it” bad enough. What is “it”? You tell me. Maybe you want to learn to trade. Maybe you want to improve in another area of life. After listening to this interview though, you’ll understand why I have very little pity for the “I’m too busy / not enough time” statements people throw around. Our guest, Diego (same name in chat room) gives us a rundown of his current journey and you’ll see this guy is not messing around. I also had the pleasure and honor of meeting Diego at our Fort Lauderdale meet-and-greet and I will attest to the fact he’s a Grade A person. If you’re in search of some real life inspiration based in reality, and not theory, then look no further. Let’s get to it! Notes: Today we interview community member Diego. He had contributed to a TSP account which is available for military members until the time his service ended. After taking some looks at the account daily, he became interested in the daily ebbs and flows of the account. This led him to move his account into various mutual funds which ultimately led him to swing trading. This was all prior to any training. A majority of his buying and selling was based on recommendations from various media sources. Diego started to focus strictly on natural gas and would trade UGAZ and DGAZ (two gas ETF’s that move inversely). After not finding much success trading those based on fundamentals, Diego looked into options. After having some missed trades, Diego stumbled on to the Inner Circle and expected to get buy and sell alerts from Clay. However, as he soon found out, there are only technical alerts being given since every member has their own risk tolerance. This led to him joining the University program. Diego continued to focus on his interest on options and now exclusively trades advanced option spreads. This works great with his busy schedule. He has also learned that he does not need to be in a trade every day. It’s much more lucrative to trade good setups and pass on the mediocre ones. Quotes: I was on the kool-aid for The Street and buying based on what they were saying. My expectation was to get rich now. I want to hit it big and quit my job and live on the beach. It’s harder than you expect. I read about options. I bought cheap options on CHK to cap my risk. Something happened so 120 dollars became 700. Let the past be the past. Move forward and focus on the present. The next four months, I studied CTU. I plan the trade the night before then put in my orders at the open. I look again by about 2:00 if I didn’t get a fill in the morning.

Some may call me a jerk when it comes to my lack of pity, but hey… you can thank our guest for my shortfall of compassion. We speak with Mario (chatroom alias “MarioR”) and as you’ll learn, the man is a beast when it comes to “making his passions work”. I don’t want to offer up any spoilers, but if you’re in need of some additional motivation to remove the “I have excuses” card from your deck, then look no further… this is the interview for you! For those of you who are members of the community and hang out in the chatroom, I’m sure you’ve seen Mario around along with the screenshots he posts of wins and loses. There is no need to beat around the bush, the guy puts up some very big numbers and it is quite inspirational to know what is possible. The big numbers are awesome no doubt, but getting to the point he’s at now took all kinds of blood, sweat, and as he admits, literal tears. Prepare yourself for a “no excuse” ride. Notes: Today we interview community member Mario who goes by MarioR in the chat rooms. He was introduced to the market at a young age when his father was trying to day trade on the computer. After Mario got out of the military, he had a large sum of money but was unsure if he wanted to trade with it or invest it long term in mutual funds. He did eventually put it into a brokerage account and tripled his account when he admits he really knew anything. Those easy gains went as fast as they came in and his account was back to the 20k mark. He had a few bouts of success followed by drawdowns which led him to reevaluate his approach. After accidentally discovering short selling, Mario found that he has developed quite a skill to find over extended names to get short on. Just utilizing basic support and resistance, Mario strictly focuses on finding ideal setups, excluding his old boredom trades. Mario has plans to go full time in the future after all his expenses and debts are taken care of. He has a great long term plan regarding what criteria needs to be met before he embarks on that business plan. Since Mario has done this for many years, he knows where he still struggles and is taking steps to remedy those to continue trending his account up. Being honest with yourself regarding both the good and bad is crucial for growth. Quotes: I made some swing trades and eventually had 60,000 from 19,000. I had no idea what I was doing. Everything was low and I made out. If you’re going to do this you need to get educated. I just picked up stuff randomly from other traders and made my own style. I can think to myself, if I was long where would I be selling? Then that’s where I’m thinking to get short. My problem was I never feared losing money. Income is not a dirty word. I work second shift and that allows me to trade the morning so I stick with it. If you’re treating stocks like a lotto ticket you need to change that mentality. Trade well and take what the market gives you.

This discussion certainly got my blood boiling. As someone who is in the coaching/teaching/mentoring business, it truly drives me insane when I see others creating a bad name for everyone. We have a shining example of this thanks to our guest today John (‘FatherOfBear’ in the chatroom) and his experience with another “coach” in the business. Even if you never spend a penny on my site, please just realize and be aware of some of the glaring red flags that many of these “I want to see you succeed” people out there display. To give John fully credit though, after the rough start due to the bad experience in attempting to learn, he didn’t give up and he continued to grind onwards and upwards. Like many of us, John has taken several bumps and bruises along the way, but the great thing for us as listeners, we can learn from them and save ourselves some money in the process. I had a great time chatting with John and I’m sure you will too. Notes: Today we interview community member John who goes by FatherOfBear in the chat rooms. John was intrigued by those who traded in the market and spent some time looking around the internet in an effort to get educated. He came to the realization that if he wanted to do this successfully, he would need to seek out quality training. Unfortunately, he decided to get training via someone who put a time limit on their program and John learns best by a high amount of repetition. A 3 month time limit is not realistic to go from knowing nothing about the markets to a proficient trader. Even without a proven track record on paper, John funded an account and started trading live. After finding some initial success, he eventually dwindled that account down to scraps. John does not like to lose and in most aspects of life, it’s a fantastic attribute. But in trading, it can be detrimental. After finding out the material in University was available for LIFE, John dove right into the program to rebuild his notion of trading. He is currently working through the foundational courses before he beings trading again. Quotes: I watched YouTube videos of people explaining what candlestick means. I would watch hours of videos. It was generic at best. I didn’t grasp how dangerous it was to trick myself paper trading. I was trading with large size since there was no risk. I get my first big win. I was thinking, I’m not over trading… I’m doing what my teacher is doing. I must be a prodigy. I started learning all about margin calls. It really hurt my account being stubborn and holding. Reinforcing those bad habit muscles. Honestly, I’m not sure I would re-do anything. I’ve eaten a lot of humble pie. Education is paramount and is worth paying for. Links: https://claytrader.com/videos/big-red-flag-world-trading-educators/