The Stock Trading Reality Podcast

In the majority of situations, the biggest struggles as a trader comes from the person looking back at you in the mirror. Of course, many people will blame external forces no matter how crazy it may appear; however, for the traders who are self-aware and honest with themselves they understand trading is a battle against ones self. Our guest from the community Eric (chat room name "Gman") does an awesome job of sharing the battle he has faced with himself. As you will hear, a strategy of listening to others is not going to lead you to profitable places in the long run, but, this is the cruel joke of the markets. If you can't depend on others, you need to depend on yourself...YET, that is where the big battle awaits. This is why trading can be so frustrating and difficult. Eric takes us down some great rabbit holes of discussion, so let's go! Notes: Today we interview Eric also known as Gman. While he doesn't hang out in the chat rooms too often, Eric really took advantage of the education offered. A friend of his tried to get him involved into the market 10 years ago but he wasn't very capitalized so he gave it up for a few years before his interest was piqued again. He drank some koolaid on a 5G LTE technology company that was trading in the triple zero's. Unfortunately he lost everything as the stock went to 0. Eric started to recognize that message boards became a place for people who made the same mistakes to comfort each other. This was what led him to realize that there is no external factors to blame for his failure or success. He realizes that he is more often than not trading against himself. It is his emotions and fear/greed that leads to losses generally. After 4 years of sticking with trades, he realizes this is a part of the journey that he had to go through. He emphasizes that he doesn't want anyone to find overnight success. People who experience that generally give it all back and then some instead of learn valuable lessons. Eric has made huge strides going from relying on other people at the message boards to give input on where to enter, how long to hold and where to exit to now being the CEO of his trading business deciding all of the above based on his risk criteria. Quotes: I opened an eTrade account with 1000 dollars. I enjoyed the market but didn't have the money or education to do it. Some guy would come on and say 'look at this patent. In 180 days it will go through so we have to wait.' That's why people like message boards. You can find like minded people who are making the same mistakes you are. I feel great but I have so much further to go. It's a never ending process of looking at yourself and improving. When I trade, I know my charts. I can pull those charts up and analyze it to comfortably plan a trade. Links: https://claytrader.com/videos/1-penny-stock-short-scam/

The brutal honesty our guest in this interview afforded us all to hear a very cautionary tale about the very real risks that exist in the world of trading. While these risks can be controlled and navigated, when a lack of understanding enters into the "new trader equation", the numbers can turn nasty in a hurry! Mark (chatroom alias "hyprsnpr") takes us through the various loops his journey has contained, including those dirty loops that many people are afraid to talk about. Because of Mark's courage and bluntness, we all as listeners (both new and old traders) are given the opportunity to learn and have reminders shoved in our face. I don't like beating around the bush, I'd much rather have it hit me between the eyes and that's exactly what you get in Mark's journey. Notes: Today we interview community member Hyprsnpr also known as Mark. He had a roommate whose Dad was successful in trading the market. They focused only on covered calls. Another pitfall was Mark was going all in on every trade he made and when bad news came out in that stock, his account essentially went to zero. After taking a 6-7 year hiatus, Mark saved up and once again set a portion of his funds aside for trading. This led him to start getting interested in investing but after a few years of going nowhere, he eventually found Clay's youtube videos and joined the community. He flew through the courses after joining the University program and started trading before actually finishing all the courses. He found immediate success, which is a double edged sword, but eventually his over confidence led to trading a size much too large which led to a large drawdown. He decided to go back to paper trading and get back on course. Mark kept his size very realistic for practice. He knows what his comfort level is regarding trade size and wanted the transition from paper trading back to live trading to be 1:1. This is a great way to practice because your gains and losses will be the same size and your comfort should grow as you prove to yourself that you know what you are doing. What is very impressive is that Mark knows what his strengths are regarding trading. He knows his setups, he knows his time frame, and he knows his risk. This solid plan forms a foundation to keep him accountable and ensure that he only takes good entries and avoids forcing trades when there is no setup presented. Quotes: I thought there was no way out of the options unless it got exercised or expired worthless. That's how little I knew. I thought it was going to go to the moon. I watched it fall to 5c but luckily it ended up turning around. I was revenge trading. I would say, 'I lost 1000 dollars yesterday. I'm going to make that back today plus 1000 more.' The reason I like options so much is the RvR standpoint. I can buy the equivalent of 100 shares for pennies on the dollar. I still struggle with the voices every trade regarding greed and fear but I've been much more disciplined. Paper trade however long you think you need to and then multiply that by three.

By far one of the hardest things to do as a trader or investor is to follow the rules. Assuming you've traded before, I'm sure you can relate to just how hard it can be when real money is on the line. Our guest, Ben, has a great story he shares with us which finds a centralized theme in following the rules vs. not following them. Ben's journey took him to the edge of almost wanting to give up on trading, but he then discovered another area of the market that re-energized his passion and drive to succeed. After adding in more tools to his toolblet, adhering to the rules and risk management systems became easier and easier. There is no question in my mind that there is at least a few things that we can all relate to in Ben's story. Notes: Ben's dad was always interested in economics and the importance of savings. This was something that was taught to Ben at a very young age. While he was deployed overseas, since the market opened up in the afternoon and some other members of his company were trading, Ben started to get involved in long term investments in names he knew. This was unfortunately timed during the market collapse of 2008. Lots of gains can be made in the sub-penny market, however, after he looked into some of the companies, Ben recognized that most of the names moved based on hype versus actual performance or products. While Ben had transitioned back to civilian life, he did start trading after taking Robotic Trading but it became quite clear to him that he didn't have a clear view of the whole trading process yet. This led him to Claytrader University to learn how to apply all the pieces of puzzle. Ben thought about giving up on trading. He was slightly jaded at these low price low volume stocks but after learning about options, this opened up his opportunities to trade larger and more stable names. A big turning point for him was waiting for a chart pattern to really leap out at him versus just making a pattern out of nothing. Adhering to his risk management principles, this gives him further hope of becoming a full time trader in the future. Right now, trading is supplemental income for him and his family. Good habits can scale which is what he is focusing on. Quotes: One of the guys was big into penny stocks. I was trying to stick with names that I knew. All well known companies. In hindsight, what are you thinking? This isn't just a bad choice… it's a very bad choice. (regarding sub-penny stocks) I was up about 20k on a 4-5 thousand dollar investment. Long story short, I broke even. I was putting a lot of pressure on myself to try to be successful without having the capital or understanding clearly what to do. I was kind of ready to give up the whole trading idea. Options can be very profitable if you are disciplined. The chart showed itself and I followed the principles which led to a very successful trade.

First a warning. This the second part of a two part interview, so before listening to this one, be sure to listen to episode 120. In Part 1 our guest, Janice Shell, sat us down for a story about one of the biggest penny stock scams in the past couple decades. It was truly a fascinating story that would make a great Hollywood movie; however, in this episode we move into more practical areas of the penny stock market. Janice and I talk about penny stock shorting, dumb excuses, and some tips that any newer trader who wants to get involved in penny stocks should understand and implement. If you are interested in trading penny stocks, then I'm not exaggerating when I say this is an interview you NEED to listen to. Buckle up for some very practical advice! Listen to Part 1 of this podcast: https://claytrader.com/podcast/episode120/ Notes: Janice discusses the unfortunate myth in the penny stock world that the market makers are the evil people who short and kill penny stocks when in reality, a market maker is generally a computer that makes money on the spread of the trades. Quotes: Market makers make money on the spread. On penny stocks, the spread is huge. People are conditioned to believe MM's are evil. Investing is not a team sport. Do not get involved with teams. Penny stocks are not investment quality.

I was a bit nervous heading into this interview as I've known of and respected this person for as long as I can remember. If you're not aware, my first introduction to the stock market was via the penny stock market over 10 years ago, and I remember this person from way back then. The name Janice Shell is synonymous with penny stocks assuming you have been around them for awhile. If you are involved in penny stocks but have not heard the name, it's only a matter of time before you see someone blame her for something or use her name as a warning. She has been involved in the penny stock market for over 20 years and has seen it all. This has given her the unique advantage of being able to tell awesome stories and offer up great insights into some of the common "beliefs" that are floated around penny stocks. Even if you don't trade penny stocks, you'll get a great entertainment out of Part 1 as she tells a story about a penny stock company that is hard to believe... but it's true. Notes: Janice has been interested in the market since she was a child. Typical to many others, in her high school economics course, the class picked a stock and evaluated it over a 3 month period. In 1996, Janice started to investigate stocks she was interested in. She ran into a message board and while she intended not to post, she only made it 24 hours before posting her first response. She befriended some people on this message board and they started looking into various names and what they really do. Janice has many horror stories of pump and dumps and the resulting actions of not only the stocks but the legal ramifications that would follow. Many of these tales involve getting investor interest before diluting the stock to unbelievable levels. She has watched many of these shady companies CEO's and other high ranking officers end up in jail, some of which are still in jail to this day. The amazing thing is that even after clear evidence of a scam, there are still some people who fully believe that this 'penny stock gamble' that they originally bought into will come to fruition. Quotes: I chose the most inexpensive listed stocks. I would buy and sell support and resistance. I realized in real life this wouldn't work. The SEC finally revoked their registration years later. It took them that long. That was a penny stock with a product. He decided to sponsor a NASCAR event and encouraged people to buy stock in his company. The product was the funny car. There were still loyal stockholders. The SEC showed logs that had appalled even the most loyal of holders. It's one thing to believe a scam will come true. It's another thing to have your penny stock gamble to lead to hallucinations.

One of the most common tactics the emotion of greed uses in the world of trading/investing is seduction. The greed voices begin whispering into your ear and causing you to fantasize about all sorts of big/quick money dreams... and then you're sitting in a spot regretting your actions. Our guest from the chat room community DJ shares his experience with this. As you will hear, he had a very logical longer term strategy that was working and his account was growing, but then the biotech stock voices appeared. This lead to some lessons to be learned for DJ; however, you as a listener can learn from them without having to go through them! Notes: DJ got interested in the market a few years ago while he was in school. He would see Mad Money on the television and started to track gainers and losers. DJ was wise enough to avoid forums and message boards to find his trades. Even though he had a small account, DJ focused on pharma stocks which are extremely volatile and this was reflected in his profit and loss with big swings up and down. DJ started to contribute to his trading account over a year and a half and now had over $25,000 dollars to trade with. Most of this money was going into 'safer' long term investments but he strayed from the path and put a portion into the pharma stocks which led to a huge unrealized loser which he luckily recovered from. After joining the community, DJ joined CTU and decided to focus on options. He wanted to utilize his knowledge of charts and risk with the leverage associated for options. He liked that he could use a small amount of capital to trade larger names. Since DJ works full time, he finds it is easier to swing trade but he does have aspirations to eventually day trade in the future. He likes to try to learn the personalities of stocks for maybe a month generally before he puts on any trades. He now also believes in the powers of numbers. DJ understands that is a numbers game and that he will not make money on every trade he puts on. Now he simply takes his losers and looks for the next opportunity. Quotes: "I would just jump on one of those gainers or losers if I thought it would bounce but I was totally guessing." "A lot was going into AAPL and GOOGL but I went totally crazy and put lots into CARA. That was my wake up call." "Being able to put in 500 dollars and make a few hundred percent profit was very appealing. It is good leverage." "If you look at the same ticker it tends to do the same thing over and over." "Keep those losses smaller, doesn't hurt as much and know that you went in with a good play." "Go learn something. Find some method and learn it and use it. Don't just throw your money in and wait for good news."

For those in our trading community, odds are, if you've been around long enough, you've seen the name "Stock Gambit" appear in the chat room. He has been around since nearly the start of our community. He is in "ninja mode" for the most part, in fact, as you'll hear on the interview, I wasn't even aware he was a full time trader now! It's always fascinating to hear about people's journey's from working at the 9-5 J-O-B to being their own boss and working from home. That's what we get to hear all about in this episode. We hope you enjoy! Notes: Stock Gambit has been a long time member and we're excited to interview him today. His parents were always involved in the stock market from the time he was a child but it didn't appeal to him until many years later. His father used technical charts for many years for his own trading. Gambit wanted to find some people to learn from and this led to him following traders on twitter and puppet trading him. After some further reflection, he realized that he needed to learn to spot trade opportunities for himself. This led him to get involved with Claytrader courses. While he found some success in penny stocks while the OTC market was filled with volume, that eventually fizzled out and led him to close all of his positions. He credits the Penny Stock Survival Guide for him making that decision to look elsewhere for trades. He started to trade common shares and paper traded forex. Gambit has traded almost every trading vehicle under the sun but he thinks that it is important that people realize what is out there and what works best for them. The repetitions of starting small and getting comfortable gives you the ability to scale up your strategy without spiraling out of control. Quotes: "My father gave me a book and said read it. I read it and was completely confused. It was all about technical charts." "My father would say 'I didn't care what I would trade as long as I made money.' " "I was always concerned that forex pairs would crash. Clay suggested I look at basic options since I could limit my losses." "You feel comfortable when you feel comfortable. It's the number of repetitions and staying small." "If you believe this is something you should be doing and it is right for you, you should persist." Links: https://claytrader.com/courses/penny-stock-survival-guide/

We're at it again! Our 2nd ever in person video podcast. The special little twist this time is I'm checking in with our esteemed co-host "Chezz". He was the guest on episode #1, so yeah, it's been awhile since we've gotten an update on his trading journey in the markets. We talk about an abundance of issues including how important it is to factor in "life events" with trading goals. Chezz and I talk about what I believe to be very practical tips and considerations that need to be made in order to assist yourself in improving as a trader most efficiently. If you normally listen to the podcast, be sure to check out our YouTube channel or show notes page to watch the video. Notes: Today we interview Chezz, the cohost of the podcast while we were in Columbus for a community meetup. We pick up the story from 2 years ago when he did his first podcast. To summarize, Chezz quit his job and decided to trade full time after going through the courses and paper traded for many months. He directionally traded long options but struggled with the fact that he may loser 7 out of 10 trades. While he didn't blow up his account, he mentally struggled with the success rate. Chezz would go through 6+ hours of content at a day at a minimum and it was definitely overload. You need to pace yourself as you venture into something new. You can't learn a brand new trade overnight and everyone will take a different amount of time to digest what is taught. After giving forex a try, Chezz started trading advanced options. While he was finding success, he wasn't pleased with the returns. Waiting 21 days for a trade to play out to make a few hundred dollars didn't seem like a feasible way to make a living. This led him to trade futures for faster returns. That futures account he funded was strictly to pay for bills related to his wedding. While he almost doubled that account, he took a big string of losers when the market was in consolidation and he says the best thing he ever did was stop trading a few weeks prior to the wedding. Big life events will affect your trading especially if you tie those funds to a tangible purchase you're trying to make. Your trading capital should be looked at as working capital and that's it. Chezz is back to trading advanced options since he's always found the most success with that vehicle and his confidence comes from understanding how to spot trades and how to manage trades that go wrong. Quotes: "I realized I needed something with structure and closed my SureTrader account to pour the remainder of it into my education." "I had trouble accepting I was wrong 70% of the time. Mentally I couldn't handle it." "I promise you that big events in your life will affect trading. It sits in the back of your mind and makes you do foolish things." "Foolish me, I'm either going to blow this account up or I'm going to recover. Stupidest trading I've ever done." "Recognizing that it's a numbers game helped me overcome the recency effect. It still sucks to lose money but it's the long game." Links: https://claytrader.com/podcast/episode001/

A community staple is back to update us on how his trading has been unfolding. For those of you who have been around awhile, the name RDTrader12 should sound familiar. He's been on two previous podcasts and I've also interviewed him for the live webinars in ClayTrader University. He's a great human being and someone that continues to improve with his trading. As you'll see, his job and schedule took on some changes which altered his trading situation, but he rolled with the punches beautifully and is back in the swing of things. The coolest thing is how he determined he needed to "slow down" in order to "speed up". I realize that seems like an oxymoron, but I promise it isn't as you'll hear. Let's get to it! Notes: Today we revisit with RD and pick up from where we left off in his last episode. In summary, he was solely day trading options in 2015/2016. He recognized that he wanted to trade futures and began working toward that with paper trading. The only reason RD wanted to trade futures was because he believed futures were a better day trading vehicle. He didn't enjoy the factor of theta working against him in his option trades. RD knows that it is just one of the nuances of options and really comes down to personal preference. RD took 12 weeks to paper trade futures exclusively and he admits that he unfortunately was a victim of fool's gold. Those 3 months were very volatile and when he went live the market was the complete opposite with very little volatility and movement. He wasn't able to adapt at first. While he knew his strategy had worked, it wasn't until he hit the brakes and evaluated his live trading that he recognized that the volatility of the market as a whole had changed. After taking a hard look at his data, he realized he was overtrading and instead of taking 10+ trades a day, he now tried to find one or two great setups. It was a very big step forward in his trading to trade less and he found he was actually able to split his attention to both options and futures again since he wasn't forcing trades the entire day. Since RD's new job took him away from his desk, he decided to reduce his position size and widen out his time frame for trading. He also started to utilize trailing stops and other methods to manage his positions since he couldn't actively watch them. He also does his 'market homework' such as identifying levels and trends before the market opens so he can set his orders and go about his day. RD is also looking into utilizing advanced options to supplement his swing trading of futures. His new trading style much closer resembles swing trading instead of day trading which works well with him having a very busy work life. Quotes: "A chart is a chart. Once you learn the nuances, it's trading as usual. I shut down the options platform and paper traded futures." "Once you understand it's not this big mysterious thing, it's just another chart, I felt pretty comfortable pretty quickly." "I stepped back, got my confidence back and adjusted my strategy to not only the market conditions but my risk vs reward." "I reduced my risk as I adapted to the environment. I really like to put my stop losses under consolidation points." Links: https://claytrader.com/podcast/episode005/

This is Part 2 of a two part interview, so for the best listening experience, be sure to go back and listen to episode 114 first. Chezz and I pick up right where we left off with tfletch and the craziness continues. With that being said, things begin to calm down too as we learn about how he is now putting everything he has learned into a sustainable and consistent trading plan. He had to learn a tough lesson when first going live with a bit of false confidence, but his self-awareness and lack of ego allowed for him to quickly realize "what" the issues was. When you know what the issue is, implementing a solution becomes much less of a challenge. Like Part 1, there are several tid-bits of great wisdom from experience dropped that everyone can learn from. Notes: After going through the courses at Claytrader University, he found that he struggled with paper trading because he wouldn't pay as much attention as he normally would if he had a live position on. By no means does he advocate people cut their practice short but he personally struggled with it for the reason above. Tim now carries many positions to keep diversified and utilizes advanced options for this portfolio. The next step in his journey includes learning to trade futures with what he has already learned so now he is extensively studying the chart to learn the in's and out's of the product. Even though Tim thrives on fast paced environments (since he works primarily at auto auctions) he found that day trading just wasn't possible to fit in his schedule just yet. In the future, possibly, but right now with how his current work schedule is, it's just not possible. If Tim could go back and give himself one piece of advice it would have been to start sooner. He recommends if you're a young guy or any age really, buckle down, work hard and accumulate money while at the same time focus on your education. Within a few years you will have quite a large knowledge base and have the largest chance at success in trading. Quotes: "I have to tell myself if I'm going to carry 30 positions and they will all be in my favor, you're nuts. There are always problem children." "I think it's as important to learn what not to do as it is to learn what to do." "I want to be totally comfortable day trading before I commit to it but I'm not there yet." "Develop a plan. Say 'this is where I want to be at this point and this is where I want to be at this point'. "