The Stock Trading Reality Podcast

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/

Humility is a great attribute to have as a trader, and our guest is a perfect example of this. We bring back former guest Mike ('HeyFordy' in the chat room) to discuss how his journey has continued to unfold since the last time we spoke with him. I don't want to offer many spoilers, but I will say his account has been growing and growing. Even with this being the case, Mike remains extremely self-aware of things he needs to keep working on in order to keep his eye on the prize. Being self-aware is the first step in remaining humble as a trader... if you have any amount of extended experience, you know pride truly does come before the fall, so staying humble is key and Mike is doing a fantastic job at it. Notes: Today we reinterview community member heyfordy. After joining CTU, Mike closed down his smaller accounts and consolidated into one larger brokerage. Mike went from utilizing Stocktwits and iHub daily to now completely avoiding them and scanning for his own trades. Unfortunately, he has been flagged for PDT a few times in the last couple of years which has forced him to focus on swing trading. Typical to many other trades, Mike has an issue with having a bias and will sometimes ignore a chart reversal because he thinks the fundamentals point in a particular direction. He likes to keep his trading pretty simple. There is no need to get fancy. The more people recognize a pattern or trend the more likely it will continue (the self fulfilling prophecy). He is exploring trading options but still going through the training for that. Mike has a long-term plan regarding his trading so that he will never be in a position where there is too much pressure to perform. He knows that this is a slow and monotonous process but that’s how success is created. Quotes: All of them were just puppet trading penny stocks and I’d get lucky with a decent entry and bank on it. If my track record is still positive by the end of the year I will fund the account a little more. I’d like to be more patient and stick to my plan a little tighter. Even if I chase, it will usually come back to the zone I wanted. I just look for patterns or strong uptrends or downtrends. The more common it is the more people see it. Links: https://claytrader.com/podcast/episode099/

You can never get too much of the classic fool's gold syndrome. Most veteran traders have had this syndrome at some point in their journey (myself included), and most newer traders have it right now. The key is, the sooner they realize it is the sooner they can begin to improve away from it. Our guest, Roland, takes us through the beginnings of his journey where he had some success, assumed he was a diamond in the rough and had it all figured out. Of course, this was actually NOT the case and he had to get kicked in the teeth via Mr. Market before realizing he needed to change his tactics and strategy. Roland has come a long way and is now focused on being a swing trader due to his day job. The journey he's been on to get him to the point of, so far, 13% account growth on the year is one filled with nuggets of experience we all can benefit from. Notes: Today we interview community member Roland. After college, Roland ended up at a desk job and his father suggested that he look into the stock market. After doing some options trading investigation via Investopedia and Stocktwits, he opened up a paper trading account. Unfortunately, he was trading with an unrealistic size and saw a 40,000 dollar gain in just a few days so now his interest was really piqued. Roland caught a low float runner that made substantial gains. He did capture some of the moves but after that initial success, he had more confidence in himself than he should have. After that great trade, he had a string of losers that were an eye-opener. After speculating on TWTR earnings, and averaging down, Roland took a big loss but the difference is that he accepted responsibility for his mistakes instead of trying to blame others. With Roland's work schedule, he started to get interested in swing trading futures. He kept making deposits into his account and took it from 25 to 40 thousand dollars. This year from trading January to May he made 13% of his entire account value. Quotes: My dad said options were a great way to make a lot of money with a little money. Just buying calls and puts. I tried to learn on my own but everything seemed kind of jumbled and couldn’t get a good grasp on things. I knew the whole ‘let your winners win and cut your losers fast.’ I sold everything at 6 with a stop loss but then it kept running. I didn’t sell because of greed. I could not do any wrong. I was just going to keep going. I had a 40k account when I started trading futures more seriously. Just trading patterns and can make a trade plan that works for me. Links: Trading In The Zone by Mark Douglas http://amzn.to/1P1TRKP

I've talked to 100's of people on the podcast, and while I've enjoyed every single one of those discussions, this is one that will stick with me for a long time. Sure, our guest Ron got on my good side by being a fellow graduate of The Ohio State University; however, where he's been, where he's at, and where he wants to go is something that had me motivated to the max. The story about him dragging a mattress into his office was pure gold in regards to work ethic and not offering up excuses... such good stuff! It was an honor to talk with Ron and his story is one that should get people talking for sure. Notes: Today we interview community member Ron. When he was a child, one of his father’s customers dealt with wheat and corn. He never forgot that interest in the market but waited until later in life to get involved. After recognizing that his job had no room for advancement, Ron got licensed to sell mutual funds so this forced him to learn more about the markets. He learned how to watch the various indexes that impacted the products that he sold to clients. Unfortunately, both Ron and his wife were diagnosed with cancer and this led him to focus full-time on taking care of her. This led to a lengthy delay in his trading but family first. Ron went looking around online for some trading education and after investigating a few different options, he settled on Clay’s material. He did the research regarding what college credits cost versus all the material he would receive for Claytrader University and decided it was a great deal for the money. While he has absorbed the education taught in the courses, Ron is currently working through platform issues and trying to find comfort in both practicing and executing live orders. He has his business plan laid out for his trading and now it’s just a matter of putting it into practice. Quotes: In 1946, there was a farmer who dealt with commodities. He traded wheat and corn. I was curious about that and never forgot it. We had plan B, plan C, and plan D and that has carried over into everything in my life, sometimes to my detriment. I got very interested in point and figure charts. I tracked the number of stocks every day. It took the noise out of the price action. Let this be a lesson when big life events happen. I was going through the material but some days I wasn’t getting much from it. I don’t need to learn everything. I need to focus on just the basic things to get started. There’s value in getting your feet wet.

This interview made me laugh for sure. Not in a mean way, but rather in a "I can relate" type way. Did I ever go as far as our guest? No... he took things to a whole new level when it comes to going down the penny stock rabbit hole. Our guest is community member Jeff ("Crestronwizard" in the chat room) is an open book about his journey which reveals all sorts of nuggets of experience that can be used as learning points for us all... myself and Chezz included! Jeff is now a full time trader and the way he got there demonstrates an excellent talking point regarding WHEN and WHAT it takes to actually go full time in trading. From penny stock koolaid to now being a full time trader, it's been quite the journey! Notes: Today we interview Jeff a.k.a. Crestronwizard in the community. He installed and coded for some various audio systems and during a job, he met a successful day trader and started to watch over his shoulder. After his introduction to this gentleman, he started to meet other traders throughout the industry but it wasn’t until quite a few years later that he got interested in utilizing charts. He didn’t trade much from 2005-2007 while his trading was mixed at best. He decided to focus on his business strictly. When he came back to trading he actually traded some penny stocks and took some money out of the market (sort of). He actually ‘drank the koolaid’ so much that he became a distributor for this company and was selling it on his own website and Amazon. After Jeff’s experience with penny stocks, he decided to learn options and while he had months of profitability, overall he ended up losing money because he wasn’t consistent with his sizing. Jeff has a game plan on transitioning to full-time trading. There is a big difference between someone who takes the leap to go full time and has no savings or has taken no preparation. Jeff is on the opposite side of the coin. This has been coming together for multiple years, and his goal is multiple income streams. Quotes: When I get into some things, I get in big. I met a daytrader who turned a small sum into 50-60 million and that’s what introduced me. One of the employees took 23 million dollars off the top and after they started investigating, the person in question took his own life. They had real products and I ended up becoming a distributor for this penny stock. I bought 2 pallets of this stuff. I was trading far out of the money and the other issue was ‘stepping up to go big.’ I went from 1, 2, 3 contracts to 20. Being able to know when something is going the wrong way and to get out. I’m not scared to do that anymore. It’s your emotions versus 100 million other emotions that are in the market at the same time. It’s a big chess game.

We're bringing back a former guest and hearing all about where he stands in his current trading journey. We interviewed Hamlet ("Crusader" in chat room) a little over a year ago and he's still going strong. I won't spoil the details, but all I'll say is that Hamlet (as far as I can remember) takes the top spot of all the guests we've ever had in regards to mastering his own "mental game". If you have traded in the stock market or even the cryptocurrencies market, you know that a huge part of trading is what goes on between your ears. As mentioned, Hamlet has taken the mental training to a whole new level and it was awesome to hear the passion he has to succeed. His journey has shifted a bit from where he started, but the core foundations are all still in place. Lots to learn from Hamlet's experiences! Notes: Today we re-interview Hamlet who goes by Crusader. We previously interviewed him on episode 79. Like many others, Hamlet originally thought the market was way too advanced for him but after further research, he invested in his education and realized that he could definitely trade the markets. While education is extremely instrumental for trading, there is always the personal struggle that all traders deal with. Managing our emotions is very difficult and anyone who tells you differently has not traded in the markets with their hard earned money. Similar to many other traders, Hamlet went through a rough patch. His competitiveness led to some large losses that made him recognize that he needed to step back and reevaluate the mental side of his trading. Hamlet is a big believer in multiple streams of income. He owns a business which is fully operational and his trading endeavor is his ‘startup.’ While he is not pulling profits out currently, he has a long term plan to achieve this. Quotes: Education is the first thing you should focus on before opening a trading account. It was just pure instinct to try to learn first. I can concentrate on a web of price instead of being exact. That’s what I love the most about options. One day, 6000 dollar unrealized loss. I just kept averaging down. It was hard and painful but you have to stay mentally tough. I do strictly options. I trade futures options because they move slower. I look for opportunities there and in the equity market. I went away from my bread and butter (options). I stuck my nose where it didn’t belong. It was a reality check. Links: https://claytrader.com/podcast/episode079/

We have a pretty unique situation which up until this point, I'm not sure we've encountered. I'm always up for a new experience and you better be too! Shawn is back with us again (chat room alias "Dimliwitti") to update us on what has been going on in life and in trading. I mention "life" because this plays a role in his current situation. Not a bad situation by any stretch, but he decided to "pay himself" handsomely out of his trading account which has reduced him down to a smaller account than what he is used to trading with. How has this impacted him? What are the things he has discovered about a smaller account? What is his plan of attack? We cover this and much more. Notes: Today we reinterview community member Dimliwitti who has been featured in podcasts, articles and webinars. After a review of what we talked about on his last podcast, we see how he has been doing since. Dim has found a true comfort with his brokerage and that is instrumental in preventing errors with your order entries/exits. While we don’t generally recommend some of these bigger brokerages since they charge more than others, with more competitive pricing it is pretty on-par in terms of cost. He decided to reduce his account size to keep his risk in check. This led to drastic changes in his trading because he had essentially reduced his account size by almost 90%. He had to focus on some lower priced stocks to keep his risk at a comfortable level. This definitely led to adjustments in terms of his choices on what to trade. Dim uses what we call the ‘fourth dimension’ where he uses some fundamental analysis in his top down analysis. While he looks at it, the time frame he ultimately chooses to trade will dictate how much weight he places behind that. On longer term swing trades, this information plays a key role. On shorter day trades, the chart will dictate the overall short term trend. Considering Dim trades full time for income, he treats this like a business in many different ways. One way is a performance review. While we believe profit targets are a dangerous game, he’s looking at his performance averaged over weeks and months. He uses these metrics to make sure that this business is worth his time and it has been quite fruitful so far over the past 2 years. Quotes: I had some huge losses before I got educated. But after education, things really turned around and I had some major wins. When you have a large account and subtract a zero from it, suddenly it’s not a very big account. Zeros matter. The biggest frustration for me was the sizes and the limitations of it. Kudos to folks who start with next to nothing and build it up. I’m looking at price and volume. If there is volatility in there, I’m really attracted to those. The frustration creeps in and you break rules. What happens when you break rules? You suffer the consequences. I did an analysis and found that my best hours were between 9:30 and 10:30. So lately, I just kind of disappear after 11AM. Links: https://claytrader.com/podcast/episode059/ https://claytrader.com/blog/buying-panic-3300-profit-10-minutes/