The Stock Trading Reality Podcast

While it is never planned ahead of time, once in a while throughout the course of a discussion it can turn into a coaching session. Thanks to the feedback you as listeners provide, I know many of you enjoy being a fly on the wall and observing the teaching and suggestions being made. This is exactly what happened in our conversation with longtime member Alex (same name in the chat room). He has been a member of our community for multiple years and his strong desire to succeed is what has kept him in the game this long. It's by no means been a smooth ride, and as you'll hear, is still a work in progress but he is finding a groove and Chezz and I were able to coach him a bit so he can keep the positive momentum going. I can confirm the momentum is still going strong and growing as this was recorded several weeks ago, and fast forwarding to present day, things are looking very bright! Notes: Today we reinterview community member Alex. He was one of the first 20 podcasts and has been a member for multiple years at this point. After a brief summary of where he came from, we dive into where he has gone since. Alex was a big buyer of options to start which means he had to focus on directional trading. Unfortunately, he was not able to do this successfully so he looked into option selling (which we cover in the Advanced Options Strategies Explained). He has been a big advocate of journaling and logging his trades in an effort to find how to improve his performance. Something we have noticed over the years is Alex's 'account protectionism.' He doesn't allow himself to take a meaningful amount of risk to generate a reward. Alex has an 88% success rate trading advanced options but that 12 % of losers have kept him from being profitable. Part of managing losing trades for this strategies is giving the trade more time but Alex emotionally closed half of those and never gave them a chance to recover. Quotes: I started to look at how Hooch successfully trades options and that is making a lot more sense to me now. I got frustrated when basic options would go my way and my gains would disappear. I was the only one stopped out on the trade example. After that, I went through Skill Sharpening again to learn to use price action. I have an 88% success rate but my p&l is red. 40 winners and 5 losers but those 5 are a doozy. Links: https://claytrader.com/podcast/episode017/

One of the biggest factors of failure in trading is created by the emotion/feeling of "make a trade". Sure, at first it can be nerve-racking to do your first couple of trades; however, after that the floodgates of "make a trade" come out in full force. Community member Jeff (same name in the chat room) shares with us his story thus far which expands several years of time. The one underlying theme/problem throughout Jeff's time in the markets is forcing trades and not tapping the brakes when he should be. I really appreciated his openness and candidness of sharing his mistakes, what he has learned from them and then also what he continues to struggle with. His journey is a wild ride that I want to offer some spoilers too, but I'm going to stay disciplined and keep quiet. Take some time out of your day and make sure to listen to Jeff and his story. Remember, take advantage of kind people such as Jeff who openly share their mistakes…. It's much cheaper to learn from another's mistakes than your own. Notes: Today we interview newer community member Jeff. His introduction to the market was a loan from a family member which led to a return of 10% on his first and only trade. This opened up his interest in the market. After having his first child, he also received 60,000 dollars which he used to go full-time trading. He made some great gains but he also took some huge losses and admits he's blown up multiple accounts since then. This led to him taking a break from the market. Jeff hit a home run on a marijuana penny stock and that's when he decided that he wanted to trade other instruments. He decided to invest some of his profits into his education. After stopping by the Inner Circle and seeing that penny stocks are not a focus, he joined University. He admits that he went through the courses way too fast and even though he still had some profitable trades, he was still winging it. After volunteering to be a guest on the webinars, this opened his eyes up to the fact that he needed to slow down and redo the courses. Jeff is going to attempt to paper trade or trade small until he finishes retaking the courses and is able to set up logical trade plans via the live weekly webinars that he does attend. Quotes: He gave me about 6k and saw a penny stock running so I bought 10k shares and made 600 bucks. My dad said I was a genius. They had to call down to the NYSE floor because of my order size and I made the stock move. I lost 40 grand that day. I said that this was the last time I'm going to sit there biting my nails for 3 months rolling the dice on penny stocks. I admit I went through the courses too fast but the way you explained it, it was like you were talking directly to me! You cannot read one book and learn how to trade stocks. You can't do it. Get educated.

While our guest had always known about the market, he had a bit of a twist in the sense that everything he heard about it was negative. The cherry on top was he also had a friend who was personally affected by losing all their money in the market. Our guest from the community, Greg, realized that if he were to ever get involved in the market, he would need to focus on his education first. Unfortunately, the criteria which was taught needed a very specific criteria which led to less than 10 trades an entire year. This type of long term trading did not fit with Greg's personality. After trimming the criteria, he started taking many trades and this led to 'death by 1000 cuts.' He took a small account down to practically nothing and this led him to wake up and realize for long term growth, something needs to change. Where did it all go from here? Give the interview a listen! Notes: Today we interview community member Greg. While he had always known about the market, everything he heard about it was negative. He also had a friend who was personally affected by losing all their money in the market. Greg realized that if he were to ever get involved in the market, he would need to focus on his education first. Unfortunately, the criteria which was taught needed a very specific criteria which led to less than 10 trades an entire year. This type of long term trading did not fit with Greg's personality. After trimming the criteria, he started taking many trades and this led to 'death by 1000 cuts.' He took a small account down to practically nothing and this led him to wake up and realize for long term growth, something needs to change. Greg found Clay on Youtube and decided to go through the University program. His main goal is to have more time to spend with his family and while his time is limited, he always finds a way to make time for his studies. Where as most people focus on only the results, Greg has realized that in almost everything in life, focusing on the process is much more valuable and an truly lead to long lasting success. Quotes: For a majority of my adult life I had no interest in the market. Everything I heard about the market was negative. Trading is a skill set that can be learned. You're not born a winning trader or a losing trader. Even having education, there is so much more that goes into it. I underestimated the emotional component. I'm not looking to be entertained. I really want to learn it and learn it well. I want to be able to do this. Maybe instead of a streak of green days, I can try to have a streak of days where I don't break the rules and then celebrate. Links: https://claytrader.com/videos/stock-trading-quick-tip-math-trap/

We are going international again and bringing back a former guest. The last time we spoke with Norse was, literally, years ago (wow, has the podcast really been around that long? Time flies!). To his credit, he is still around and going strong which is a great compliment of Norse's work ethic and focus. Not many can survive the markets even a couple months let alone to multiple years! While Norse's main trading vehicle is the Forex market, please don't be too narrow sighted and think that because you don't trade or have any interest in trading Forex that the discussion won't provide value... I assure you, it does! One minor spoiler that I just have to give as it shows you how serious Norse is, but he's gone out and hired someone to work for him in an area of his trading business. It's some great stuff! Notes: Today we reinterview Norse. He's always had knowledge of the market but wasn't sure how he would be able to turn a profit. After going through a demo money trading challenge, he saw someone post online about 300% gains in the marijuana stocks and funded his account to go all in. Norse took a look at how much he was spending in commissions and a friend suggested he look into forex since you only pay the spread. He uses the daily chart to spot his trade ideas and then executes on the shorter term time frames. He also only focuses on a small basket of currency pairs and commodities so he really learns their 'personality.' He has a very set criteria for not only his entries but when to add, where to set his target and how to trail his stop loss. Norse also understands that you can do everything right in terms of preparation and execution but sometimes trades just do not work out. It doesn't lead to any stress and he has no plans to change his system. Another important aspect of Norse's trading is his ability to recognize his mental state. He reduces size when he is not trading well and then as he falls back into the rhythm he goes back to normal size. He still is working on avoiding taking trades out of boredom but his persistence will always prevail in terms of improvement. Going forward, Norse is working on a 15% loss reduction in his trading. He wants to design another 'expert advisor' to identify ranging markets and trending markets because this will determine what type of trades he should be looking for. Quotes: Penny stocks actually worked out. After taking Robotic Trading, I traded pot stocks buying support and selling resistance. I went back and did a lot of testing. I like to trade reversals because that is where my biggest edge is. I have to have certain criteria. Taking a loss on a single trade doesn't bug me at all. If I have a red week or 2 red weeks in a row, the voices come out screaming. The holy grail in trading is just time, patience and perseverance. Nobody ever remembers the guy who gave up. Links: https://claytrader.com/podcast/episode020/

If you are not aware, you will be after reading the next sentence. There are quite a few people who approach and use the stock market as a "stay at home" Las Vegas. They believe trading is all about luck and is "a gamble", so that's how they conduct their trading. This of course leads to all kinds of stupidity and dumb decisions, and our guest in this episode is geared around taking advantage of these opportunities. We've talked with Chris a couple years ago on the podcast, but we're bringing him back for his update. If you've been around the community for any amount of time, I'm sure you know him better as his chat room alias "gocubsgo"… or as I refer to him as, "cubs". Even if you have no interest in trading options, there is still a ton to be learned in regards to what it takes to set up a strategy and system that you can have full confidence in due to its consistency. Chris has been doing very well and it's all thanks to the system he has built himself… which, is essentially a casino to take advantage of degenerate gamblers. Let's go! Notes: In this episode we are re-interviewing Chris. He started trading 2 years prior to this podcast and as we left off last time, Chris had just begun his journey into selling options instead of buying options. This strategy worked well for him since it is a swing traders strategy and he didn't have time to watch the market intraday. As Chris learned more about selling options, he started to narrow down his risk profile from quite conservative to much more aggressive as time as gone on. This also leads him to not fear being assigned stock as the names he trades, he is willing to take shares of the company (most likely a good dividend stock). Keeping trade sizes small to start ensures that no big losing trade can do any real damage to his account. He is also well versed in defending losing positions using various option strategies. The big emphasis he makes is repetition is key. Chris has no desire to nail tops or bottoms but he can structure his trades to give him a much higher than 50% success rate with his usage of time (in the event he is wrong initially). For newer traders, Chris recommends using the probabilities that are built into the option chain to spot high probability setups and to swing trade instead of day trade. With time you'll start to understand the nuances and what you are most comfortable with in terms of risk. Quotes: It's one thing to learn the basics but when you get comfortable it's about efficiency and small tweaks. I like finding those kinds of plays, doing them often and staying small so that you keep your account uncorrelated. The longest roll was probably a year. Fitbit didn't have an uptick since its IPO. Be reasonable about it and don't size up. UVXY accounts for 10% of my portfolio but it accounts for over 20% of my gains on the entire account. Links: https://claytrader.com/podcast/episode027/

As many of you know, I love me a good analogy, and in this episode we have several of them… the one that really stood out though was in regards to pitching in baseball and trading. Chris is our guest ('thekidcanrake' in the chat room) and he shares with us the many important lessons and realizations he has had since beginning his journey. Thanks to Chris' grandfather, he had an early introduction to the markets; unfortunately, also thanks to his grandfather, Chris witnesses some events that shifted his mindset to the better. Even with that mindset shift though, there were still some kinks that needed to be worked out. This is the part I'm extremely happy Chris was transparent about as it shows just how sneaky the voices in our mind can be in regards to tricking us. All in all, get ready for a solid discussion on the realities of the market and trading! Notes: Today we interview community member, Chris. His initial introduction to the market was through his grandfather. He would keep an eye on the market for the purpose of monitoring his portfolio. About 20 years later, Chris started to get more involved because he had money going into a 401k every month. After watching his grandpa take a large loss during the 2008-09 meltdown, Chris decided it was time to start focusing on his education so something similar would not happen to him in the future. Since Chris is a pitcher for baseball, he saw the parallels between how emotions affected him in sports and could see the same pitfalls happening with trading. Originally he would buy into the stories that various biotech companies would tell. This would lead him to buy and hold for quite a long time but he realized he wanted to make returns faster than that (shorter term time frames). After joining the community, Chris recognized very quickly that there was a lot of things he still did not know. While he rarely jumps into anything blindly, he decided to continue trading while learning with very small amounts because he felt that he needed to have skin in the game. Chris closed all his positions and is now in savings mode to achieve his goal of joining the University program here. He owns up to the mistakes he's made and is ready to learn and move forward. He's taking steps in the right direction to make this a future stream of income. Quotes: I could micromanage my 401k a little bit. Trading with your emotions, you want to stay away from that. I watched quite a few Claytrader videos before I knew who he was. The 'trade without emotion' is what I really liked. My money was all tied up so I wanted to get involved in some shorter trades. That's what led me here. You guys have a really good thing going on with the community. Lot of interesting and cool people. My biggest hurdle in trading will be to step back and slow down before making a decision.

Before anything else, this is Part 2 of a multi-part interview, so if you want it all to make the most sense, then be sure to listen to episode 137 first. I've really enjoyed the feedback so far from Part 1 on the discussion as there have been several opinions and viewpoints that have arisen. I'm not saying anyone is wrong or right with their opinion, but what I am saying is it proves the point exactly about how "risk" can be perceived in different ways depending on the overarching context that surrounds it. Thanks to our guest's (Carl from the chat room) candor and openness, we can still how the idea and concepts of risk continued to influence him to always be self aware and on the offense about this very important aspect of trading. If you enjoyed Part 1, then there is no doubt you'll enjoy Part 2, so let's once again get this party started! Notes: While he originally joined the program to strictly learn how to trade options, he eventually branched out and decided to learn various strategies for trading so that he wouldn't become a 'one trick pony.' Carl talks about his successes and failures trying to trade a brand new strategy but has a detailed plan about how he wants to proceed into the future. Having 1000+ trades with his volatility strategy, he executes quite effortlessly but now he is learning brand new strategies to expand. Considering he has been in charge of his income since the early age of 12, Carl is big on efficiency. He is very conscious about his usage of time since that is limited every day. Clay suggests that Carl look into Advanced Options but Chezz brings up the fact that personality plays a large role in finding where you fit in the 'trading world.' While they have the high hit rate that he is used too, they are not active enough to hold his attention. Quotes: Because I didn't understand what I was doing, I bought 2000 contracts that expired for a 12,000 dollar loss. I knew it was going up but I didn't have a great idea where the profit might be. I thought, green is green. Hard work will get you far in life. I have a reasonable amount of emotional control and not scared of working hard.

If you're a long time listener, then you know the topic of 'risk' has come up on...well... more than one occasion. This is once again the case, but with a little bit different of a twist that does an excellent job of illustrating and explain just how risk in and of itself is subjective. Chezz and I interview Carl (same name if trading room) about his journey which has been quite the journey. So much so, this is a two-part episode... there is lots to cover! From being a business owner to getting interested and then involved in the markets, there are many experiences we can all learn from so let's get to it! Notes: Today we interview one of our newer members, Carl. He has always been hands-on and has launched several businesses but didn't like the randomness of the stock market so he stayed away from it. Initially, Carl had no interest in the stock market but after investigating ways to have a 3rd income, he came around to it. He initially started using Robinhood but got annoyed with the pattern day trade rules so he left and went to Interactive Brokers and funded an account well over the 25k amount. After doing some research into UVXY and other volatility products, he strictly traded those products for quite a long time and became familiar with its daily moves and how it reacts to various market cycles. Carl took a massive drawdown both unrealized and realized but this was part of his strategy from the onset. He's done his backtesting and knows what his account can stomach in terms of volatility. Regardless of him using stop losses or not, if his entire account was to blow up in catastrophic fashion, it would not impact his livelihood. That trading account could go to 0 and his family and himself would be completely fine since he has multiple streams of income. As Carl continued to expand his trading knowledge, he kept stumbling across people who would sell options against volatility tickers he traded. After purchasing a book about options he realized he wanted a more interactive approach to learn them and joined Claytrader University. Quotes: We started our first company when I was 12 and you have to have taxable income to fund an IRA so that's what we did. I didn't even have a clue of what I didn't know. Granted, I do a lot of reading. I did the shotgun approach until it stopped working. Every position I took a loss on turned into a winner. I ended up being right. I realized that's not a sustainable approach. I bought this green book about options. The book was awfully dry and I couldn't ask any questions so I joined CTU.

I'm going to do my best not to go off on a rant as I type this up at this very moment. All I'll say is BE CAREFUL when it comes to those "guru's" using expensive lifestyles or extraordinary results as the backbone of their marketing. Please. Trust your gut and instincts on it. Thanks to our guest's willingness to share, Tom ("tvesel" in the trading room) freely talks about his initial experience with a guru who... well... was a bit shady. I'll just leave it at that. To Tom's credit however, he didn't let the experience hold him down and he got back up, dusted himself off, and kept on moving forward to create a journey for himself. He's come a long way since the start and he continues to progress, so let's talk about it! Notes: Today we interview Tom from the community. Tom, unfortunately, started his educational journey with a competitor and starts the interview about the bad experience he went through. Tom has had IRA's for a quite a long time. His mother also caught the dot-com boom and fortunately sold before the large crash. He has always monitored the pulse of the market and with more time available, Tom was looking to make a living without being location dependent. He did spend 3 months trading at an offshore broker before he eventually closed his account to go to a more reputable broker. After exploring other options, Tom decided to join University and really enjoys the content and community support he receives. Tom is a big fan of Interactive Brokers chart trading platform. It visually helps him see his risk vs reward and to ensure he sticks to his plan. Even though he paper traded for a good amount of time, he believes the real value of paper trading is to get you familiar with your platform. At some point, you will need to put real money on the line and that's when emotions will come into play. He is working on trusting himself to take an entry that he sees. He has the habit of watching it but not acting on it (which is completely normal!). Commitment takes time to develop and comes with confidence in your trading system and plans. Quotes: Clay is annoying. Repetition repetition repetition. There's so much to that. Others gloss over important info. I learned some things from Google. All these things are on the internet but I was missing an 'easy to follow course.' There are a lot of normal people. Honest and sincere. These are people who have nothing to gain by their recommendation. Paper trading is good to get a handle on your platform. Eventually, the rubber has to meet the road though. I will never ever move a stop to give it more room. I will only move it to reduce my risk.

The title of this podcast may seem a bit odd, but in all reality, the goal for all traders should be to become bored. In this episode we welcome back Tony from all the way out in Hawaii (so jealous!) so he can update us all on how his journey continues to unfold. He started out in the toilet bowl of penny stocks, and as you'll hear, progressed long enough to find himself a nice comfortable spot in futures trading. Futures can be very risky if not approached in the right way, so that's exactly why it makes sense that he is laser focused on establishing boredom as a trader. It all started for him by applying the KISS method. Enjoy the updated journey! Notes: Today we reinterview community member Tony. After trying to trade penny stocks, Tony moved to options to trade more well established names. Now he focuses solely on futures. Tony started to focus on top down analysis to help get an idea of the larger trends, which he did not do trading penny stocks and options. This also led to his desire to expand on his risk management. Working with a small account, he had to keep his risk very tight. He is a big advocate of journaling to spot not only what mistakes we continue to make but also to identify what we are doing correct and how to push that harder. Tony has taken a much simpler approach to his trading and found much more success. He gave up the idea of the 'holy grail' indicator combination and now understands what he excels at and what he needs to work on. He understands that this is a lifelong endeavor. It is not a get rich quick scheme. It's a business that you will always be grinding to get better and Tony understands and accepts that. When trading is a passion it doesn't feel much like work. Quotes: It's easy to confuse luck with skill. Because futures are more leveraged they are more dangerous. Learned some hard lessons. If you made your decision from a smaller time frame, you have to stick with your risk-reward ratio solely. I found out that trading should be boring. If you're getting too excited, you should probably step away and turn off the computer. You need to treat your trading as a business. Set hours that you keep relatively consistent. There is no holy grail pattern or indicators. It's just hours of screen time and accepting that risk before you pull the trigger. Being in denial just leads to bigger losses. Links: https://claytrader.com/podcast/episode088/