The Stock Trading Reality Podcast

Confidence is a great thing to have in the world of trading the markets, there is no doubt about it. With that being said, if you allow the confidence to transition into stubbornness, your trading capital is going to get smaller in size. Our guest, Tony ("TonyAcaiBowls" in the chat room), walks us through his journey where this whole idea played a pivotal role in creating some headaches. The one characteristic I need to give Tony credit for is his wild ambition, which is certainly a good thing; however, once again, too much of a good thing can be bad, as you'll see... Notes: Tony’s introduction to the market started with his family having CNBC on the television while he was a child at home. Tony’s father would watch it in an effort to keep an eye on the stocks he personally held. As he grew up and got to college there were not many majors that interested him but his interest in trading from childhood presented an opportunity so one of his majors included finance. After reading an article about a trader who turned a small sum into a few million, Tony decided to save up some money during college and get involved in trading. Realizing that he shouldn’t jump in blindly, he was smart enough to invest his money in what he thought was a good training program but realized he needed to learn more. Tony decided to try a paid chat room subscription and puppet traded based off of alerts made there. While he increased his discipline, there were still a few trades he got stubborn with and this led to a large decline in his account from the losses. By no means is having confidence in a position a bad thing but as traders, risk management HAS to be on the forefront. After going down the rabbit hole of Stocktwits and other message boards, he started trading off of hype again. He came across Clay’s stock chart videos and was intrigued at his unbiased analysis and started to realize that the charts tell a story which can help determine trading plans. He joined the community and was pleased with the lack of ‘hype’ and strict focus on technicals. This led him to join Claytrader University and now he is currently going through the courses. Quotes: “I came across this article about this guy who took $10,000 and turned it into 2 million. I thought ‘wow, I want to do that.’ “ “I thought I could catch a bounce for 40c and make my money back. I was able to take a little profit but it wasn’t a good trade.” “I was holding and hoping. One trade I thought had to go down and that blew up a big portion of my portfolio.” “You were analyzing these charts and were very unbiased. It helped me understand how the charts tell the story.”

Yes, it is possible to make progress as a trader without spending a dime on education; however, you better have a great source of income via a normal J-O-B. This concept is exactly what we see unfold with our guest Mark Raison (same name in the chat room). He decided to venture the sea of free information himself, and it proved to be a very very costly and frustrating experience. In fact, listening back on the interview, I'd say he still has a ways to go in regards to a few areas, but with his good paying job in place, he can just keep inching along. Let this episode serve as a warning of just how tricky and difficult the "I will use free information" pathway of learning to trade can be. Notes: Mark considers himself an adrenaline junky. The surprising thing though is that he exhibits a great amount of risk management as he moved through his trading career. We generally see this the other way around. After searching around the internet, Mark realized that he wasn’t going to buy into the nonsense marketing of living the ‘yacht life’ and making millions while trading on the beach with an iPad. He found Clay and recognized that he seemed down to Earth and had nothing to prove to anyone but Mark wasn’t willing to put any money into his education yet. His internet research led him to find a million different strategies and he realized quite quickly that he needed to find what worked for him specifically by trying multiple indicators and moving averages. Mark started to put these strategies into practice and found out that his lack of live data wasn’t good for trading news driven events. Unfortunately, he funded a live account and due to lack of proper risk management took a string of losers that ended that account. Mark was fortunate enough to have a good paying job to refill his trading account even though this wasn’t ideal. It was able to give him peace of mind that he can continue to search for what works. Eventually he told himself he can’t refill the account and had to work with what he had and be very selective. This led him to choose much more ideal setups instead of mediocre ones which has helped his profitability. Quotes: “I basically put money in and started trading blindly on the Toronto Stock Exchange. Over time I learned to trade the American market.” “I didn’t want to do any training. I didn’t want to give someone else my money to learn or pay hundreds for a chat room.” “Everybody needs to find their own trading style. It’s one game played thousands of different ways.” “You need to try different things. You need to know what works and what doesn’t work with trial and error.” “You should see what they are saying, why they are saying that, and then do your own search on why YOU want to trade it.” Links: Video: Paper Trading: How to Properly Practice as a Trader

Did I ever think I'd "talk trading" with someone from El Salvador? Absolutely not! But hey, that's the great thing about the podcast, it is allowing us to hear about journeys from literally all over the world. We speak with chat room member, "DarthRay" about his journey, which includes getting lured into a group where the leader was eventually sent to jail for essentially operating a Ponzi scheme.. yikes! He was also doing some real time trading as he spoke with us, which prompted an on air coaching call to unfold. I don't want to ruin anything, so I"ll just say the interview was very unique, and I mean that in a good way :-) Notes: Darth has had an interest in sales and the market for many years. After going to university, he transitioned into full time employment but once he arrived he recognized that he didn’t like the fact that he wasn’t in charge of his time. He started to investigate other income sources and considering he has some family who are in the market, this led him to try his hand on a simulator first. Three years ago, Darth decided he wanted to find someone to learn from. He thought he could make a good living trading off of alerts from guru’s. Unfortunately he had to learn the hard way that penny stocks generally move off an alert and then get offloaded into the sheep of the service. This led him to recognize he wanted to avoid penny stocks and trade options. After growing his account 300%, he unfortunately was involved in a ponzi scheme and gave all his gains back and more. The service he was using eventually closed and an investigation ensued so Darth went to find another service that hopefully wouldn’t dupe him. This led him to Claytrader.com . As Darth has progressed through his education he has developed a solid routine to prepare for the market and to trade accordingly. He completely abides by good risk vs reward principles which leads to long term steady growth in his trading accounts. As Darth has progressed even through some hard trading times, he has learned so many lessons and learned the reality of what trading is. Patience, focus, education, and persistence are all great words to define his approach to the market and also his life. Quotes: “I traded 3 Yugioh cards for a Playstation and 5 games. That is when I felt the first rush of trading.” “My paper trading was unrealistic. Basically I was lying to myself. I wasn’t preparing with my real balance.” “He told us to buy specific puts and calls. What we didn’t know was that he was selling them to us.” “I got a contract with a firm in Chicago and I’m going to open the first Latin American introducing brokerage.” “I can lose up to 3 or 4 times but if I have 1 winning trade it makes up for those 4 and gives me a profit. I focus on the winners.” “Never give up. This business is very hard. Never stop studying. The more I learn, the more I realize I have much more to learn.”

Freedom of time is a very noble goal as it allows for you to pursue avenues of life that may not otherwise be realistic. This is what community member "Dukes" (same name in chat room) used as his motivation to learn how to trade the markets. By using trades as a vehicle to free up his time, Dukes is able to strive after his dreams of building upon his acting career. I really enjoyed this interview as it goes to show that trading does NOT "have to be" a full time thing. It can simply be a tool to help you get ahead in other areas of life, which Dukes is a pristine example of. Notes: Ben is currently pursuing his acting career and while on the journey he was a manager at a clothing store. Because of his position, he was given stock options and that led him to get interested in the market. He would take odd jobs here there as well to further his career along with decreasing the debt in his life. A key point here is that Ben didn’t get into the market to ‘get rich quick.’ His interest in the market was to free up his time to pursue where his real passions are and after seeing Clay’s live trading videos he thought the market would be a good way to supplement his income. Once his life was at a stable point (stability defined as clearing all his debts and not trading to ‘make ends meet’), Ben opened up a trading account and just invested into household names as many new traders do. It oscillated up and down and he realized that he had much to learn if he really wanted to grow the account. After learning about technical analysis, risk management and options, Ben decided to focus on options specifically because of the significantly lower cost. Using the options as stock replacement has allowed him to trade larger names without putting his entire account in one trade. Ben strongly suggests that people spend more time paper trading since he only practiced for a short period of time. While everyone struggles with greed, especially when it comes to trading, it is so important to realize that trading is a business and a journey. It takes a healthy amount of time and effort. The slow and steady approach is the real way to improve upon yourself and your trading and Ben is a living example of this. Quotes: “I decided instead of a 1% savings account to try my luck in the market and I’m not too upset with what’s been going on.” tweet this quote “If I can replace a day's worth of work in 4 hours, I got my whole day to do all the things I want to do.” tweet this quote “I was so completely ignorant to the way that everything worked that you couldn’t even call it trading.” tweet this quote “I’m definitely a option trader now. In doing so it helps me avoid pattern day trader. I like that I can get more bang for my buck.” tweet this quote “Even though you don’t want to you start to put the stop losses in. Sometimes you were just wrong and have to deal with it.” tweet this quote “Spend a little more time getting educated before you start burning through your money.” tweet this quote

I'm sure some will look at this trader's journey and think it was filled with "boring" at the start. Our guest, Tim (alias in the chat room, "EarlyDawg"), may not have come out of the gates with guns-a-blazin', but he did come out of the gates the way it is supposed to be done. In terms of "how do I start to trade?", Tim lays a great blueprint for the steps to take. With that being said, even when you take the proper steps and go about the journey the right way, that does not guarantee complete smooth sailing either, but it does give you the upper hand in many regards. Notes: Tim’s introduction to the market was trading a small amount of penny stocks based on a family suggestion (from a newsletter). While the trade worked out for a 300% gain, his future trading would not be as successful. He has a large family and needed to focus on providing for them so he put the market aside for many years until he felt more stable. His wife saved up some money on the side and got back into the penny stock market and while her intentions were good, she got caught in a pump and dump. After heeding Clay’s warning that it would be foolish to trade without any education, Tim invested in himself and spent many months digesting the content before he even began to paper trade. He wanted to see all the options available to him and find what works for him personally. Everyone trades differently and Tim realized this very early on. Tim focuses on selling option premium (covered in the Advanced Options course). This is a great way to swing trade and essentially be ‘the house’ of a casino. He uses a blend of weekly options and monthly options to take in credit throughout the month. While he has only been live for 6 weeks now, Tim has already identified some problematic areas of his trading. He is slowly becoming comfortable not doing ‘something’ every day. The real key to credit spread trading is letting time pass and to trust his initial analysis which entails his risk profile and his profit targets. Quotes: “Bought an oil and gas company, let it triple and sold it. That was about 20 years ago and haven’t done much since.” tweet this quote “It took me about 3 to 4 months of just pure listening to the courses and podcasts before I even started to paper trade.” tweet this quote “Knowing that everybody is different, I have to figure out what works for me. Since this is my money, I don’t want to just jump in.” tweet this quote “I’ve got a capped loss, a capped gain, and if I lose I’m willing to lose that because I know all my other trades will make that back.” tweet this quote “I need to trust my initial analysis. If I just trust in the charts and the probabilities, I’m right more than I am wrong.” tweet this quote Links: Course: Options Trading: Advanced

This person is one mentally tough cookie. Our guest, David ("David from Columbus" in the chat room), took quite the tough-love-beating during his first few months as a member of the community. He was doing many things that we tried to warn him about, but he was... stubborn. To his credit, and why I respect him so much, he took the tough love like it was meant to be taken and factored it into his journey in an appropriate fashion. David is a smart guy, but like many, he's got some great battle stories already... which of course he shares with us! Notes: David’s introduction to the market was when he was 17 via his employers who made a majority of their income from trading and investing. They primarily focused on fundamental analysis but he felt like this was a lot of research work. Even though David was relatively young, he recognized the opportunity of being a contrarian and would buy strong pull backs and sell strong rally’s. He did not have any concept of risk management at this time and would just wait until he made his fixed profit target, one hundred dollars. Unfortunately, buying the dip does not always work. While he avoided one big drop by getting out at his fixed target his next trade was him maxing out his account while averaging down for months on an oil ticker. The interesting psychological point is that regardless of the big drawdown to his account, David was very sure of his position and the fact that it would bounce. The worst about about all of these practices is the fact that it is engrained in David’s head that he can always buy the dip and sell calls against it and make money. After some reflection on this, he realizes that if just one of the companies he was trading went under he would have lost his entire retirement account. This opened his eyes to risk management. David wanted to day trade to avoid the risk of gap ups or downs. After having a long winning streak day trading, David suffered a large loss that wiped away 3 month’s worth of gains. He recognized that he needed to learn from a professional in regards to risk management. He joined Claytrader University and is paper trading the strategies taught in the program. Perfect practice makes perfect. Quotes: “I was going to go against the trend and buy when people were selling and sell when people were buying until I made $100.” tweet this quote “It went from 30 to 20 bucks. So I kept buying and buying and averaging down until I was down around $3,000.” tweet this quote “I was just thinking ‘wow this cannot go any lower.’ I also learned about covered calls and sold against my positions to generate income.” tweet this quote “I first started with 50 shares and then moved up to 100 shares. Then in August I built into a position and lost $1,650 in 30 minutes.” tweet this quote “Going into the trade plan with a real good plan and has a high probability of success is really important.” tweet this quote Links: Video: How To Average Down Video: All Wins Are NOT Created Equal Article: How My Rule Break Spanked Me For A $1500 Loss

Having capital to trade with: check. Having a large cushion fund: check. Clearing away all debt before starting: check. Talk about putting yourself in a great spot to succeed, and that's what chat room member Jon (alias "ttJon") did. There was something else that occurred too, which would seem like a good thing... he made 300% return on his first trade... but was it a good thing? Did this big gain jump start his trading journey into make cash hand over fist? Sit back and enjoy a trading journey from a different perspective than we're used to, and I mean that in the most complimentary of ways! Notes: Jon’s introduction to the market was an economics class where the class would choose tickers to buy and they would compete every week against someone who would throw darts at a board with random tickers on it. Similar to many others, Jon’s introduction to trading was once he secured a job and had to pick his mutual funds. It wasn’t until years later when he had no debt, large savings, and extra money on the side did he decide to open a trading account. This is an extremely crucial point because if the worst case scenario happened in which he blew up his account, it would not impact him or his family in any way. After finding initial success selling his wife’s stock options on a big move up, Jon’s interest was now really piqued. He made 300% on this trade and now this was his target for all his future trades which led to him holding way too long even when trades would move in his favor. Jon let a hedge fund manager takeover his retirement account and while he did make a gain for the account, he kept 66% of the profit. At this point, Jon said he would never let anyone else manage his money. While looking for some trading education, Jon stumbled upon Clay’s live trade videos and after seeing an interaction between Clay and his daughter, he realized that this was the community and training he wanted to partake in. As he moves through the courses, Jon recognized the importance of trade plans and being wrong small and pushing your winners to their logical conclusion. Quotes: “I only opened my trading account after I had no debt, very large safety cushion and this was strictly play money in case I lost it.” “So I became a bottom fisher from 2011 on. Some of them did well but I wouldn’t sell because they didn’t hit my 300% target.” “I would make some big gains, big losses. Then I would just leave it all in cash until I could figure out how to trade it myself.” “The money isn’t the issue. I don’t want it for the money. I want it for the time. I want my time back in 5 years.” “So it’s not just the price action. Not just the level 2’s. It’s getting to understand how they all work together.” Links: Videos: Live Trade Videos

I'm not sure you could start out a trading journey any better than quadrupling your initial account. Trading chat room member Mike ("JustMike" alias) did exactly that when he first began. With such a strong opening act, was it all just rainbows and sweet old ladies for Mike, or were there some bumps to come? Thanks to Mike's openness about everything, Chezz and I were offered up many friendly reminders on what should be and should not be done as a trader. There is no doubt in my mind this interview will entertain and educate you. Notes: Mike’s introduction to the market was a stock picking game that he participated in for college which sparked his interest in speculating in the market. After attending a seminar with a friend of his, they decided to get involved in Investools stock program they were offering which opened up Mike’s world to charting. He was fortunate to never have to go down the road of penny stocks. Even after being able to consistently achieve 10% returns on his trades, he was unhappy at the amount of profit and this would lead him to holding and ultimately losing on the trade. Unfortunately Mike struck some ‘fools gold’ which led to a big win on earnings. Now that he has quadrupled his account, he is trading all his newly acquired money. After thinking that earnings would be his ‘holy grail,’ Mike’s account went back to zero on one bad earnings trade. He started back with a small amount and decided to avoid earnings. Him and his family then relocated for a different job and it sparked his desire to get back into the market. While his technical analysis skills are pretty good, his risk management was not up to par yet. Mike and his wife moved to Chicago right before having their first child. He utilized the time he had while his wife was on maternity leave to paper trade for a solid 4 months before returning to the market on his live account. This led to him focusing on strict risk management. He has a very high win rate but his losers would wipe away those wins until he remedied the problem. Quotes: “We went and saw their pitch. It was a ‘follow our system’ approach. It was all charting from the beginning.” tweet this quote “The problem I had was that I would buy and even though I know 10% is a good return, I’d hold it and it would go down to zero.” tweet this quote “I got back into options, growing the account and taking some out whenever I could. I realized that I can do this.” tweet this quote “You just need to get used to pushing the buttons. You need to get used to seeing red on the screen. You have to get used to that.” tweet this quote “If I’m winning 4 out of every 5 trades, that 5th trade I refuse to admit being wrong. I would think I’m right it just hasn’t happened yet.” tweet this quote Links: Video: All Wins Are Not Created Equal

If you are a member of the community and spend any amount of time in the chat room, I'm confident that you are at least familiar with our guest, Parker. He absolutely loves his technical analysis charts and is always posting them in the chat room so other members can "visualize this thoughts" in regards to a trade. In fact, while we recorded this interview, he posted a few charts in the chat room - haha! Where did this love of charts come from? Why is he such a believer in them? How exactly does he go about using charts in his trading? We cover all this and much more in our talk with Parker! Notes: Parker’s introduction to the market was his roommate when he was younger. He would get home from his night shift and see him investing in the market. This opened his eyes to the opportunity of the market which led him to saving up money for the market specifically. Parker was able to make a significant amount of money from the marijuana penny stock boom. His string of ‘lucky’ winners led to overconfidence which led to him completely blowing out all the profits he had accumulated up to this point. He took 8 months off to focus on school before returning to the market. He started to paper trade in a realistic fashion and develop a good methodology. After saving up $5,000 again, he returned to the market and really emphasized respecting his stop loss and treated trading as a business. Realizing that he could get a greater return on capital utilizing options, Parker has mainly transitioned to trading options and occasionally using equities. He mainly day trades but has no problem swing trading while accumulating positions and scalping around a core position. Parker is extremely adamant about utilizing multiple timeframe analysis and really attributes his usage of this principle in his success. Quotes: “I looked for some really cheap stock to load the boat with and hit a homerun.” tweet this quote “Maybe it was the worst and the best thing that could happen to me by just getting lucky. Complete luck.” tweet this quote “I started respecting my stop loss which was groundbreaking for me. Sometimes that’s a part of the learning experience.” tweet this quote “I was religiously prepared for every single trade I would get in. If I hadn’t drawn up every single time frame I would not enter.” tweet this quote “If I only had that one source of income starting out there's no telling what I would have done because of emotions in the trade.” tweet this quote “Mentally you have to be ready to lose a few dollars. You have to be okay with taking a loss. Nobody wins every trade.” tweet this quote Links: Video: Trading Review: Binary Options Video: How To Trade Penny Stocks on Steroids

Working for the world famous sports broadcasting company of ESPN, I can see how that would be a "dream job". Our guest from the community, Hamlet, through hard work and dedication was able to achieve this goal of his. One would think that he had reached the pinnacle of his ambitions and would just continue to build from there; however, this all lead Hamlet to the world of trading and the markets. Huh? Yeah. I thought that too! Luckily for us, Hamlet is an open book and we get to go alongside him through this exciting and interesting journey. Notes: After Hamlet graduated from college, he landed what he thought was his dream job at ESPN. Unfortunately the job was extremely stressful and led to him figuring out what would be the next logical step in his life. This led him to wanting to get involved in the market. While doing his due diligence on Claytrader, he stumbled upon a review of someone who actually didn’t like Clay very much but did his research and investigation and concluded that Clay was indeed genuine and truthful. This led Hamlet to invest in Robotic Trading and join the community. Hamlet exhibited some great risk management by purposely starting with a small amount of his overall capital. He got his ‘feet wet’ by keeping his position sizes small and ensuring that he was developing good habits up front. You can tell very easily that Hamlet had always treated this as a serious business and didn’t treat it as ‘funny money.’ He took $15,000 out of his 401k to start trading larger size and was able to make a pretty sizable gain. However, he does say that in hindsight he should have never taken a position that large. A month later Hamlet changed his approach. His use of a mental stop and averaging down led to a large loss which devastated him. After reviewing his trading and spotting his pitfalls, he has been extremely consistent since then. Hamlet excels as a day trader and enjoys not worrying about gap risk holding multiple days. He’s actually been doing so well he was able to use his trading profits to launch his own ride sharing rental company. Quotes: “It was a really intense environment. I realized it was going to take me so long to get to my long term goals in life.” tweet this quote “I looked into fundamentals. With all the information, how am I ever going to trade with all of it? I knew there had to be another way.” tweet this quote “Many people have said in past podcasts, the chart never lies.” tweet this quote “It was almost like an easy trade right in front of me but there is no such thing as an easy trade.” tweet this quote “When I get stubborn, I just don’t want to lose. Everytime that happens I lose money. You have to let those losers go.” tweet this quote Links: video: Penny Stocks On Steroids blog: How To Make $51,000 In A Single Day