The Stock Trading Reality Podcast

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

"No guts. No glory." That's definitely the attitude our guest took when first entering into the markets. Romeo (chat room alias, "YankeesVsBoston") has some very bizarre luck when he first started trading, leading to a very false sense of confidence. Enough confidence in fact to give him the guts to take a loan out to fund his trading account! Like I was saying, "go big or go home" was his philosophy early on. How'd that all work out? Was it a wise move on his part? Let's find out... Notes: After graduating from college, Romeo decided to set some money aside to speculate in the market. He was not happy with the returns of CDs and savings accounts. This led him to the world of penny stocks. His initial penny stock purchase immediately went to 0 but to Romeo's surprise, a few months later this ticker had a flurry of volume and tripled his money. This led him to believe he was the king of trading but continued to fuel his interest in the market. Romeo took a $5,000 loan to add to his trading account now and tried to utilize it on 2 trades but luckily for him, he could not get a fill and essentially avoided two massive pump and dumps that would have wiped his account out. Unfortunately, he went all in at the top of his next trade and sold the low to cover his first loan payment. This event led him to realize the importance of practicing his craft so he spent months paper trading to find what specific type of strategy worked best for him. After chatting with another member he decided to join CTU and further his education. His dedication was only further compounded by having his friend believe in him and give him a generous loan to help kickstart his trading attempt. At the time of this recording, Romeo is now trading full time and has almost completely cleared out his old debts. Quotes: "As soon as I bought it, it went straight to .0001 the next day. I thought 'Wow, that's it. It's gone.' " tweet this quote "I finally got filled and it was at the very top. I held and sold at the bottom and barely had enough for the loan payment." tweet this quote "I probably spent 6 hours of my time a day studying and studying. I had zombie eyes. I was really focused on what worked for me." tweet this quote

Wow! That's really all that can be said about the perfect storm that hit this trader. I won't spoil anything, but a lot of weird and crappy things happen... all at once, leading to a not-so-ideal spot for our member Chris ('xzbt' is his alias the community chat room). He was backed into a corner and had to change things up quite a bit, but he did what he had to do to keep himself engaged in the markets. This journey is definitely one of the more unique ones we've heard, so sit back, relax and enjoy the ride! Notes: Chris had a few family members and friends who were quite active in the market. His uncle had the foresight to go to cash before the 2008 crash. Unfortunately, Chris listened to his CFP advisor and was caught in the melt down. His first introduction to Clay was actually during the first iteration of Robotic Trading before the website and community existed. It was presented to iHub which is where he found Clay initially. While all of this was happening his business was also in decline so he became quite aware that he would be unable to trade actively for a while so this led to a multi-year trading hiatus. However, his interest in the market did not wane and during that hiatus he continued to check the various charts and industries of interest. Even though Chris' 'hand of cards' has been quite rough over the past few years, his passion for the market has never wavered. Regardless of the fact that he is not live trading currently, he is practicing his craft and paper trading realistically which will only serve to help him transition back to the live market with good habits. Quotes: "It was a perfect storm of a market crash and massive unexpected expenses and literally wiped out my savings." tweet this quote "I try to live my life with the philosophy that I try to learn from my mistakes and not make the same mistakes twice." tweet this quote "That was a mistake I made. I did mental exercises looking at the charts but I didn't write it down." tweet this quote "I still battle with the fear of missing out. Sometimes you just have to take that split second to think about it." tweet this quote "If I see an alert I actually research it to decide if that is something I would trade. If I'm too late, oh well." tweet this quote Links: Course: Robotic Trading Video: How To Paper Trade Video: How To Paper Trade With a Purpose Course: The Cash Flow Creation Guide

Thanks to a very open and honest sharing of his journey from chat room member Andre, we all get a behind-the-scenes view of the chaos emotions can create. Throw in the fact that he did not really have a plan either, and the snowball (he's from Canada, get the joke? haha) of chaos becomes that much larger and picks up that much more momentum. Andre had a few key events that caused him to stop the snowball, and then reanalyze a different way to go about this whole trading business. What were these events and what steps did Andre take? Let's find out... Notes: Andre's introduction to the market was a stock picking contest through a newspaper many years ago and while he didn't do well, this contest had piqued his interest in the market. After doing some Google research, Andre began trading based on tickers he would read other people talk about (Stocktwits, iHub, etc.). His trading was very unsteady at first and even when he made money, he was trading US stock with Canadian currency so he would also get hit with conversion fees every trade he made. He did end up opening a $10,000 account with much lower fees and began trading again but still had no real strategy at this point. He had a successful strategy of buying toward the close and selling into any pop in the morning but he would then give back all those gains in the afternoon. While going through the courses, Andre realized he was trading very emotionally which led to most of his losses. Now he is planning out solid trading plans with proper risk versus reward. Even though he is not comfortable swing trading yet (since he does work a full time job) he plans on working through the Advanced Options course to see if it would be viable for him. Quotes: "I opened up a $1000 account and blew it immediately. I came across some penny stocks and just threw some in." "I didn't fully understand the market back then. I hoped it would climb and just keep climbing." "If there wasn't any major sell off at the close, I would use that as an indicator to stay in. I'd then give it back in the afternoon." "I usually just jump in and then put my stop. I'll use my risk vs reward ratio and continue to work on my entries." "Don't run at it. It will come to you in due time. Take your time and don't get riled up."

It's an odd thing to think about, but in all reality, it's a logic worth discussing deeper: if you are going to do something wrong, at least be wise about it. This is the overarching theme of our interview with chat room member Garrett. I realize it seems like a contradiction, I mean how can something be "wise" if by definition, it is already "wrong". We talk about that and much more with Garrett, who very well may be one of the more skeptical people we've had on the show. I don't say that in a bad way, but it created some great conversation pieces and perspectives. Notes: Garrett's introduction the market began by having a friend tell him that he should let someone else manage his money. Being skeptical by nature, he figured that he could manage it better than anybody else and keep his best interest in mind. He was smart enough to limit his risk right off the bat by only funding his trading account with $500 of his initial $12,000. After putting this in 2 stocks that were household names, he immediately took losses to the tune of 50% of that initial $500. These losses led Garrett to realize that he needed to get educated to compete against the professionals in the market. He was smart enough to be skeptical of penny stocks and didn't think he could compete in commodity futures so he settled on indices futures. Considering he opened a small account, he once again took more strings of losses that led Garrett to pursue some paid education vs the free Google and Youtube trading videos he had watched prior. After stumbling upon a day trading 'guru,' he quickly realized this person's style did not mesh well with him and eventually he found Clay. After going through the courses Garrett realized he needed to go to paper trading until he had a firm grasp on all the techniques and risk management. He's currently in the break even stage of his option trading and that's where he will most likely hone his edge in the market and continue to improve as time goes on. Quotes: "I just went ahead and put 500 in eTrade. I did absolutely no research at all and just bought a couple stocks." tweet this quote "I really wasn't paying too much attention to the chart. I just bought into the stock and was hoping it would go up." tweet this quote "I've done so much research and if I still can't become profitable, I still need to go do some more research." tweet this quote "I'm not going to give up and I recover well from losses. I don't let it ruin me." tweet this quote