The Stock Trading Reality Podcast

Chezz and I once again are venturing to the southern hemisphere to talk with a trader from Chile. I say "once again" because this is actually the second trader we've talked to from the country of Chile... pretty cool! Nicolas (chat room alias "Sazu") takes us on a wild ride which starts with him basically knowing nothing about the market (which includes him thinking penny stocks are a "good idea") and ends at a place many people want to be: trading full time from his own home. Notes: After going through college and getting into his first job, Nicolas realized right away that he would not be making enough money to make him happy. This led him to explore other options to supplement his income. He started to research value investing similar to how Warren Buffett decides what to buy. Realizing that fundamental research was a very slow and laborious process, he was unsure if this was the best for him. Nicolas spoke to a friend who steered him toward a shorter term trader who recommended checking out Claytrader.com . Nicolas took the Penny Stock Survival Guide and recognized right away that there were many downfalls and risks associated. This led him to follow Clay’s recommended course path and he then continued to invest in his education to become a trader, not investor. While Nicolas did take a string of losing trades, the most important part is that he kept them all extremely small! This allows your winning trades to easily wipe out many losses sometimes all at once. Nicolas’ workplace was also not very conducive for trading. He would constantly have people hovering around him asking him questions about it and he was kind enough to speak to them about it. However, this is an incredible amount of distraction which is not helpful for trading. Nicolas saved up a good sized account (and a year's worth of expenses) and decided to work from home and trade for a living after that. Quotes: “I started researching Warren Buffett. I watched 3 course videos and read 3 books on value investing.” tweet this quote “This guy sent me lots of emails saying ‘get rich soon.’ I thought, get away from this guy and went to your website instead.” tweet this quote “I took my time and continued being patient. I just continued learning and watching videos imagining I was trading.” tweet this quote “I was waiting for the home run. I wrote down my mistakes and what I had to improve on after that.” tweet this quote

We love to preach about forming good habits around the community, and this interview gives us a shining example of 'why' that is the case. Thanks to Donald's (chat room alias, "Speedster47") openness about his journey, we get to see not only how bad habits can creep into a strategy, but more importantly, just how annoying/difficult they can be to get rid of. If you take anything away from this discussion, I hope it is realizing how careful you need to be of avoiding forming bad habits. Notes: Speedster’s original introduction to the market was similar to many others, through his Economics class. Many years later following his college education and full time employment, he had a friend who worked in the finance industry and was day trading for small profits. This piqued Donald’s interest in taking his trading future into his own hands. Donald recognized very early that he needed to get educated. He decided to try to soak up as much free education as he could but as we all tend to find out, free education is usually all over the place and while bits of it may be helpful, it’s lack of structure ultimately does the trader no good. After not finding much success to begin his trading career, Speedster decided to start trading penny stocks. His strategy was to buy and hold energy penny stocks as an investor. He was smart to recognize that he was still trending down (losing money) and was able to lower the amount he as losing incrementally. This is always the first step to becoming profitable. Since Donald focused on self educating himself and had no support system at that time, he had developed bad habits that he has been working on ever since. Right now he is focusing on maintaining discipline. As you hear in the podcast, Donald is super hard on himself but he is still profitable for the year including covering the cost of Claytrader University! Trading always leaves room for improvement and maintaining discipline is without a doubt that hardest piece of the puzzle. Quotes: “I wanted to get some shares of my company, sit on them, hopefully take the rest of that money and potentially grow it.” tweet this quote “I figured I would learn by experience. Once I finished those books I wanted to put my toe in the water. That was the wrong thinking.” tweet this quote “If you think you’re going to be a penny stock investor, you’re just wasting your time.” tweet this quote “I was in the kool-aid camp. I was believing the pump and just thought it would come around.” tweet this quote

Trading journals are a part of the markets that can be very beneficial, especially to those people who are beginners in trading. Max ("Maximus" in the chat room) shares with us just how his trading journal has been preparing him to go live with real money. We discuss many other interesting topics too, but the part that really stuck out in my mind was how organized he is in tracking all his trades. Whether you're a new trader or a veteran, I'm confident you can garner at least a few bits tips or tricks from our talk. Notes: Max’s introduction to the day trading the market was spurred by Clay’s 10k calorie challenge. This led Max to spark up a conversation with this resident advisor to which he found out that he was day trading the market in the morning before classes. While Max did the right thing by paper trading, he did not treat it seriously by any means. He treated it like a video game by not utilizing realistic figures that he would be using when he went live. Now that Max has gotten his feet wet trading speculative biotechs and technology companies along with countless hours of working on his craft, he now is involved in a co-op program though his school to trade full time for 6 months with advisors from JP Morgan and others in the finance industry. Max brings up a great point about how everyone trades differently and while his resident advisor trades successfully one way, it doesn’t particularly jive with him. There are many ways to make money in the market and everyone has to find what spot they fit best. Data is extremely important for Max. He strongly suggests that everyone use detailed journaling techniques to keep track of progress and spot potential trading issues that will impact long term profitability. There’s no argument or justifications to foolishness when you have the data logged and presented in front of you. Quotes: “I got some good information. I thought I knew what I was doing but I was really just Googling stuff.” tweet this quote “I don’t want to admit how many hours I stared at charts from January through June. I thought that would fix me.” tweet this quote “Journaling as a beginner gives you power to recognize your mess ups. I like to have a guideline of how I’ve been performing.” tweet this quote “Looking back I would tell myself that ‘I don’t know anything.’ Work a little bit smarter but just as hard.” tweet this quote Links: Video: 10,000 Calorie Challenge

We decided to celebrate episode number 75 by bringing on a well known member of the community, "h00ch". There was not any agenda predetermined for the show as our goal was to stumble down as many different rabbit holes as possible. The one topic that we got stuck on for quite a bit was full time trading. Trading full time is a goal that many people have, and while it is certainly possible, there are many dynamics that go into it. If you're end goal is to become a full time trader and work from home, then this episode is definitely for you. Notes: This episode we have a round table discussion with community member h00ch. We start off talking about how trading isn’t something that changes very often since charts are a reflection of human emotion and human emotions generally make the same mistakes over and over (which provide great trading opportunities for us). The fools gold dilemma presents many problems for newer traders who are attempting to take shortcuts. There are no shortcuts in this industry just like there is no ‘holy grail’ indicator. Do yourself a favor and take this seriously. We discuss the reasons that led us to the market. Whether it’s to get out of a dead end job, to increase income, etc., there are many opportunities available. This ties into the pressure of HAVING to make money and how it can negatively impact your trading. An unfortunate reality in trading is that people view education as something to just check off the list. Just because you bought a course does not mean you should be trading live yet. You have to practice and find your edge to prove that you do know what you are doing. Quotes: “With trading, because it’s just human emotion at the end of the day, humans are humans and emotions are emotions.” tweet this quote “You need to be educated before you dive in. They’re just setting themselves up for fools gold.” tweet this quote “Some people are thrown for a loop when they join and we say ‘you probably shouldn’t trade with real money yet.’ “ tweet this quote “It’s been the biggest fight with myself. I have only just now felt like I finally have things in check regarding size and risk.” tweet this quote “You don’t realize how much outside stress can affect your trading and mindset.” tweet this quote “95% of society just wants to throw money at something and wants their problems to be solved.” tweet this quote Links: Nashville Meetup: Register Video: Are You A Puppet Trader Video: Full Time Trading and Dirt

It's not a new topic of conversation by any means; however, it is one that is always worth repeating given so many new traders believe certain things that are NOT true. This is especially true when it comes to smaller accounts and penny stocks. Our guest, Keith (chat room alias, "KrazyInTheKeys") talks about his experience with this very topic. He stumbled into penny stocks believing it was where he "had" to be, but is that where he stayed? Let's find out. Notes: Keith bought into the idea of getting rich quick based on a stock tip from a coworker. A good thing is that he limited his risk by only deploying a small amount of capital since he was very skeptical of the idea to begin with. Even though he lost some money attempting to trade penny stocks in the beginning of his journey, Keith reflected on the idea that education pays dividends. This was the exact case for his job in the medical field so he knew it would be wise to invest in his market education the same way. After a few weeks in the community, Keith went all in and joined Claytrader University and has been going through the courses since April 2016. He realizes that with proper training, trading can and will be his next income source as he slowly winds down his work and transitions toward retirement. Keith immediately realized the benefits of options over penny stocks and has completely focused on them. Instead of parking his money in penny stocks that sometimes rarely move and exhibit very low liquidity (and horrible spreads), Keith can focus on a basket of high volume optionable stocks that provide opportunities on an everyday basis. Quotes: “I wanted to sell it when it was trading higher and buy into it when it traded lower. I noticed it always had this wavy trend to it.” tweet this quote “I made a huge time investment and monetary investment in my career and it paid off. Clay made me realize the market is the same.” tweet this quote “That was one of the greatest thing I learned from the courses was to stick with paper until I feel totally comfortable.” tweet this quote “When you buy a penny stock you hope that one day it will reach a gain but with options you can trade them day in, day out, every day.” tweet this quote “I feel a lot better about my trades just checking in on them every once in awhile instead of sitting in front of it all the time.” tweet this quote

Thanks to a popular Hollywood movie, chat room member Devin was drawn into the stock market. His first pit stop in the markets was the wonderful world of penny stocks where he wandered around surrounded by sharks and wolves. Devin was given some money by his Dad to assist in his trading, so did having more money at his disposal make trading any easier? The crazy thing is, Devin hit some good solid home runs, yet, despite this, his account kept bleeding in the southern direction. There is lots to learn in this trader's journey. Notes: Devin’s introduction was actually through his father. A good thing about this experience was his dad was never obviously upset or overjoyed by the positions he took. He remained even keeled from what Devin could observe. After watching the Wolf of Wall Street, Devin started to research penny stocks and ended up in a penny stock chat room. Using a tax return from the previous year amounting to $500, he began to aimlessly gamble as many do when first starting to trade. Devin’s father gave him and his twin brother some money to help aid them in taking their financial future in their own hands. This is a double edged sword because even with the best intentions, Devin could now trade the same way he was in the past but with larger size. As time progressed, Devin transitioned to trading a small basket of stock utilizing their options which is very friendly to a smaller size account. He has found more consistent success swing trading advanced options since it requires much less management. This works well for him as his day job responsibilities have increased greatly in the recent months. Quotes: “I wanted a place where I could find stocks. I would just sit in there and wait for someone to say something.” tweet this quote “I convinced myself that I was learning with each loss and I was going to get better from it.” tweet this quote “I was always hoping for that home run. I started to realize for every home run there is 3 strike outs. Slowly my account dwindled down.” tweet this quote “I was being much more careful but something still wasn’t clicking but I was disciplined enough to cut my losses quick.” tweet this quote “One issue I had with penny stocks was buy and hope for the best. I didn’t even think about what would happen if it went against me.” tweet this quote Links: Video: Trade Penny Stocks On Steroids Video: Getting Romantic With Options Trading Video: The Most Effective Order Entry

Thanks to the Canadian government and technology, our guest was introduced to the trading markets, and has essentially never looked back. Vincent (chat room alias, "trader-vic"), as many do, became addicted to the markets and simply put, "just wanted to trade." This lead him to the whole mindset of learning on the job... and... well... I'll let him tell you how all that went. Oddly enough, his day job ultimately played a large role in helping to get his head screwed on the right way. Vincent was very open about his journey, especially the addiction part which I can totally relate to. All-in-all, it's an eye opening account of just how dangerous the markets can be if you let them be. Notes: Vincent’s real introduction to the market didn’t occur until he got his iPhone 5. For the first time he felt that he was able to fully control his access to the market and wanted to put some of his money to work. Canada gave its citizens 100 shares of a stock and while most people forgot about it, Vincent’s interest was piqued and this led him to start getting interested in trading more names. After opening an account he put some of his cash into gold mining companies. Vincent eventually went down the penny stock route and had the typical experience of buying the top and selling the bottom. He also noticed that his success rate was very high when the market was rallying and then dropped significantly as the market went sideways or down. This led him to believe he ‘lost his touch.’ He unfortunately continued to trade with real money while learning how to trade with charts which created some sizeable losses. It wasn’t until he was able to pull himself away from the market (with his day job) to reset and start applying what he learned correctly. With his newfound knowledge after going through the training, Vincent recognized that he really needed to get his platform set up to his liking and paper trade EFFECTIVELY. Effectively in the terms of keeping his paper trading as real as possible. He will find what works first on paper and then apply it with his real account. Quotes: “When it came time to sell I had to telephone them on a rotary phone, go down there and sign some papers downtown. Lots of rigmarole.” tweet this quote “I didn’t know anything at all about charts. I didn’t know the difference between a bollinger band and a bean bag chair.” tweet this quote “I was so frustrated following analyst reports. I then turned to Youtube and found Clay posting his charts. I signed up the next day.” tweet this quote “I was saved by my day job. I had to out and work long hours day after day for a few weeks and that broke the losing spell.” tweet this quote Links: https://claytrader.com/videos/trade-penny-stocks-steroids/

We've interviewed some members of the community who do not talk much in the chat room (totally fine, variety is a good thing!), but in this episode, Chezz and I get to hang out with a well known member, "Mr. Bee". Unlike many other traders (myself included), Mr. Bee never struggled with the concept of admitting he was wrong and cutting a loser fast, but he found himself challenged with the other areas of trading all of which he shares with us. Along with this, he shares a very nice Jedi Mind Trick he uses to motivate his psychology to keep working hard. Mr. Bee was very open and honest creating an action packed interview with many gem learning points. Notes Mr. Bee had an interest in the market at a very young age but had a 15 year gap between that interest and his first investment in his education. With his current account value, Bee was forced to trade lower priced stocks until the options trading courses came out. This really helped show who in the community was disciplined in taking small losses and those who ‘held the bag.’ The good thing is that he has never had an issue with cutting losses fast. A great outlook on his trading concerns the idea that a trade is merely money gained or money lost which makes it easier for him to book losses quickly. Mr. Bee also believes in treating himself with his hard work from trading. The use of money earned trading helps solidify in his mind that his hard work is paying off. He is currently trading part time with his job but has aspirations to go full time in the next year. The beauty of the financial markets is that if you are proficient at trading them, you have the freedom to spend your time as you choose and Mr Bee. would much rather spend time with his family than at his 9-5 job. Quotes: “Trading is the same feeling as golf because it is something I don’t think anyone can master. But you can keep trying.” tweet this quote “All of us take losses and losses are a huge part of it. This is definitely not a game.” tweet this quote “I know that I’ve put the work in and see what is going to happen. My biggest struggle to this day is being patient.” tweet this quote “It’s always nice to fantasize about how big a win could have been. That’s where I kick myself more than a losing trade.” tweet this quote “I don’t personally like to keep the money in there like it’s a trade vault. I have to be able to reward myself with it.” tweet this quote Links: Course: The Trading Freedom Pathway

I really enjoy this interview as it takes a different approach and gives us a very valuable lesson. Many people think if they understand that trading is not a "get rich quick" venture, they're already on the path to easy success. Don't get me wrong, understanding this principle is extremely important, but as our interview with chat room member Kent shows, there is much more to trading then simply acknowledging riches are not made overnight. Kent is a very systematic guy, and I really found it intriguing and insightful to hear about how he is preparing himself for trading. Notes: At the young age of 15, Kent was introduced to stock options. The interesting thing is he was also able to watch them bleed a $40,000 account down to $2,000. Kent was smart enough to not buy into the ‘get rich quick’ nonsense that this industry is filled with. He tried one other chat room but quickly realized that it was a toxic environment that he did not want to be a part of. After checking out what was offered here, Kent decided to jump headfirst and join Claytrader University since he enjoyed the free content and found value in the lessons provided. As he continues to go through the courses, he is practicing and seeing what he is strong at and what he is weak at. There is no sense in putting your hard earned money on the line if you are unsure where your particular edge is and he realizes that. Kent understands that trading is not about getting rich quick and is putting in the effort to make this a long lasting income source in the future. Quotes: “They didn’t have any stop losses at all. They were trading completely emotionally. They were straight up gambling.” tweet this quote “I realized that you can really make a life from this. Not this ‘you can be rich beyond your wildest dreams in 2 minutes.’ “ tweet this quote “The education is just awesome. It is horribly redundant which is fine for an old army guy. It’s dummy proof.” tweet this quote “Even if I think I’m ready, I’m still going to take a minute to go through it all over again and continue to work on it.” tweet this quote “I would have jumped on the education sooner and been really regimented about it. It really is what makes the difference.” tweet this quote

If you've traded for any decent amount of time, and are being honest with yourself, I'm sure you can probably relate to our guest in at least one regard. Tim (chat room alias, "Toggs") found himself using the strategy of "hoping" a stock would go in his direction, after it already had not, instead of just cutting the loss. This strategy is one of the many interesting rabbit holes we wander down with "Toggs", and as always, through some of his painful experiences, we are all able to learn something... free of charge! Notes: Tim’s introduction to the market was the talking baby eTrade commercial during the Super Bowl. He limited his risk by only deciding to start with $500 dollars. After doing plenty of Google ‘research’ to find his stock picks, Tim ended up on Stocktwits following the recommended tickers that he read about. Tim went on to learn about options in a very basic sense and started trading some larger, more known names now. Unfortunately, he got blown out on an earnings trade which led him to have to reload his account. Realizing that he needed to get educated from someone with experience, Tim jumped in and joined ClayTrader University. He listened to Shawn’s podcast and got his options account up to $250 to begin putting to use his new knowledge. While a ‘brain fart’ led him to losing $120 of that account, the 98% of the time he is trading he continues to develop good habits. While making $10 does not seem appealing to many, with proper risk/trade management, these gains can further be compounded in the future. He is laying the groundwork that will pave the way for future gains in Tim’s account. Quotes: “I think it was just finding that Robinhood app and deciding to try this again. See if I could learn a little bit more.” tweet this quote “I made a second trade and it went against me. I thought, maybe if I hold on to it that it will bounce back. That was my strategy.” tweet this quote “I felt like I had to look at myself and realize how much I do know and realize I have a lot left to know.” tweet this quote “I just want to get good at visualizing the chart and knowing what movement I can expect it to go.” tweet this quote “If you’re losing in a trade don’t wait for it to bounce. Just get out, cut your losses and find a different entry point.” tweet this quote Links: Course: The Trading Freedom Pathway