The Stock Trading Reality Podcast

We've heard many different approaches to trade plans over the 50 plus episodes, but today's guest gives us something quite unique. Shawn ("dimliwitti" in chat room) talks about a fourth "trend" indicator that he likes to use, and it truly has an important place within his strategy. I've been tempted to give his approach a try because it does make a whole lot of sense; however, I have not made the leap as of yet. Shawn has been around the markets for a while, so there are all sorts of ups and downs to talk about, which as always creates many experiences that we can all learn from. Notes: Shawn’s grandfather managed portfolios for a living and really taught him how to manage an extensive sized portfolio. These were all longer term swing trades and had no short intraday trades. He relied heavily on fundamental analysis at this time. As time went on, Shawn recognized that there were many short term trade setups that he could recognize and the idea of quick profits really appealed to him so he tried his hand at active trading. This led to quite a sizeable loss and led him down the path to education. A very unique way that Shawn trades involves the use of fundamental analysis as a filter. He likes to find chart setups that are aligned with either a up trend in the fundamentals or a downtrend in the fundamentals. Shawn is a huge proponent of continuous education. He has already mapped out the path of what he is choosing to learn. Building upon what you already know is absolutely critical because the market is ever evolving. The moment you decide you have it all figured out will be the moment in which your performance begins to slip. Quotes: “My wife calms me down a lot with her good, conservative view of investing. It has saved me a number of times.” tweet this quote “I didn’t have all the tools yet. I latched into using trailing stops but that assumed I would be winning in the first place.” tweet this quote “I got in this trade by shorting in the last minute. I was watching a lot of silly people buying in so I shorted at the highest point I could.” tweet this quote “I have losing days. We all do. It happens. I’m not saying I’m an angel. Sometimes those voices takeover.” tweet this quote

We left you with quite the cliffhanger in episode 57, but the wait is over! We pick right back up with Shawn (same name in chat room) and her journey as she tells us about entering her first trade and then growing the account from there. Like Part 1, this second half of the interview is filled with just as many little nuggets of wisdom, if not more. Shawn gives a humble and heartfelt look into what worked for her, what didn't, and how she handled all the various scenarios. Notes: After doing some paper trading with actual pen and paper, Shawn realized that this would not be as easy as she initially thought. She realized if you practice your chart reading and practice your risk vs reward you will trade intelligently. Shawn had the courage to press on in her journey instead of quitting after losing money initially. She recognized her investment in herself and decided to narrow down the list of tickers she would start to watch continuously. Once she got her expectations in line (she just wanted to perform better than leaving the money in a savings account), her trading really started to take an immediate turn into profitability. After spending more time paper trading REALISTICALLY, Shawn then transitioned to live trades and just mimicked what she had been practicing. In her first month, Shawn went from $250 to over $1400 generally only taking one trade per day. As her profitable weeks increased, she allowed herself a little more buying power. This type of compounding coupled with sound risk vs reward led her to almost a 600% return in the first month. To ensure that she wasn’t experiencing fool's gold, Shawn then got a part time job at night to provide further relief knowing that she still has some stable income in the event this was all luck. This type of stress relief can make such a large difference in trading since the pressure of HAVING to make money every day is reduced. Since then, Shawn has now reached her goal of getting her account to $10,000 and she did it all herself. She is a shining example of what hard work and dedication can achieve in any aspect of life and we look forward to hearing about her continued success. Quotes: "I was expecting to double my money and to make rent in a day. I went back to training and remembered it’s about the charts.” tweet this quote “I have $700 dollars. On the paper side I had 100k. You don’t have enough money to trade the way I’ve been practicing.” tweet this quote “I made one trade a day. I waited for the market to do what I wanted to see from it. I mirrored what I did paper trading.” tweet this quote “After a month, my account was almost at 1,300. I gave myself a raise for my buying power on a weekly basis. That is how I built it.” tweet this quote “It was my goal to get to $10k. I did that by myself starting with $250 and now I don’t have to put all my money on the line at once.” tweet this quote Links Part 1: STR 058: She Turned $250 into Over $10,000. Here's How. (part 1)

This interview has been one of our most highly anticipated given so many members of the community are already aware of our guests inspirational story. Shawn (besides being our 2nd ever female guest) has also accomplished quite a feat. In the spirit of wanting to control risk, she started her journey with only $250. In a span of a few months, this $250 amount grew to over $10,000 (and at this point, is still growing). How did she do it? What steps did she take? It wasn't a smooth ride, but that's the beauty of her journey. Let's get started! Notes: Shawn’s introduction to the market was similar to many. The company she worked for allowed her to allocate where her 401k was allocated and since she saw that computers were the up and coming trend, that is where she placed her money. Needless to say, her 401k appreciated rapidly and she continued to contribute for some time. One of her friends was a trader/investor in the penny stock market. The catch about this is that Shawn has something called common sense! She realized what her friends were telling her about doubling or tripling her money sounded too good to be true. Eventually Shawn saw Clay’s Youtube videos that showcase technical analysis of some tickers that she had her money in. This intrigued her because Clay doesn’t tell anyone whether to buy or to sell. He just presents the facts that the chart is showing. After going through a few courses, there was enough proof that this wasn’t a scam and that the material pays off if you apply it correctly. This led Shawn to purchasing CTU because she wanted to go through the courses she hadn’t started yet. She was dead set on applying herself 100% and this was her proving it by investing in her education. Quotes: “I guess I didn’t know enough about trading at the time. I didn’t have enough black and white facts in front of me.” tweet this quote “I always wanted to invest in gold. I risked a whole $100 bucks. If I can make $200 bucks then there might be something to this.” tweet this quote “Now somebody is telling me where to put my money but how does that work for them? I was very wary. I wasn’t going to get suckered in.” tweet this quote “I didn’t expect to get rich, I just wanted something to happen with these penny stocks.” tweet this quote “I knew every hour I spent, I was one hour closer to pressing that buy and sell button.” tweet this quote

Expectations play a vital role to us as traders and investors. In all actuality, expectations are a normal part of everyday life; however, when it comes to the markets, they can lead to literal loss of money. Chat room member, Corey, explains to us how his entry into the markets was plagued by expectations that were not even close to reality. This causes him to go down many paths that lead to... well... unfavorable outcomes. All in all this was a great interview and one I'm happy to share with you all! Notes: While Corey had slight experiencing following stocks when he was younger, he did not get actively involved until he finished up school and started working. In 2009 he now had a 401k and some spare capital and recognized that the big market downturn was actually a buying opportunity and this led him to put some money in the market. Initially starting out value investing/swing trading, Corey started to get interested in more active trading. This led him to the free penny stock newsletters. The mind boggling part is that he did not partake in the marijuana penny stock boom at all. It was all names in other sectors. Corey does eventually close his positions and put some money into his education. His focus was on penny stocks but the important part is that he realized he needed to invest in himself. At the end of 2015, Corey joined CTU and has been working his way through the 400+ hours of content offered. He is still paper trading and solidifying a strategy before he puts his hard earned money back to work. He also paper trades in a hybrid way in the sense of he is live with 1 contract but paper trades 2 additional ones. This keeps him accountable and leaves his risk low. Quotes: “Wow. AIG traded at 400 dollars 6 months ago. Now it’s 40 cents. This is an opportunity to buy.” tweet this quote “I was at least expecting a double, a 100% gain. That’s what my expectation level was at the time.” tweet this quote “I really struggled buying something that I was fairly confident was going to come crashing down. I struggled going long.” tweet this quote “Sometimes I would time it right and do well. Other times I would time it wrong and not be disciplined.” tweet this quote

It's a line I struggle with quite often. Should I cross it or shouldn't I cross it? When it came to this episode's guest, Dave ("SuperDave" in the chat room), I assumed he could handle some tough love, so as he admits to in the interview, I called him out in the chat room. How'd he respond and what did he do from that point? We talk about that and much more in what I believe to be a fantastic discussion. Notes: Dave’s introduction to the market was similar to many others. He started getting interested in watching how his mutual funds were trading in his retirement account. Eventually he was driving himself nuts watching the value fluctuate daily so he went cold turkey for some time before revisiting the market. After seeing a coworker experience success trading short term options, Dave decided to continue his education via books to which he accumulated quite a library. Most of the books written about options are extremely complex and this led him to try to find other avenues to make his money in the market. Dave did invest in his education which is a HUGE step many new traders fail to take. Unfortunately, two of the ‘mentors’ he used ultimately did not help him very much. A majority of their income is from their monthly chat subscriptions. After trying to reverse engineer alerts from the Inner Circle, Dave continued investing in his education and started to get through some courses. While getting through the content, Dave was actively paper trading to see where he was weak in his trading and where he excelled. All of Dave’s paper trading lead him to find a winning system for himself. He has his set criteria that he looks for and after struggling with managing his risk vs reward he has now nailed that down too. He is a shining example of how consistent and deliberate practice can and will pay off in the long run. Quotes: “My general market overview was listening to the talking heads and sort of floundering around and guessing.” tweet this quote “I just bled slowly with small daily losses. Not seeing the patterns, not seeing the trends, not understanding movement of stocks.” tweet this quote “I posted that ‘holy crap that was scary’ and Clay called me out for trading too large and not knowing what I was doing.” tweet this quote “I spent all of last year paper trading and building a trading plan. I then took my live account from 500 to 1200.” tweet this quote

This guest is the youngest to get started in the markets. Thanks to parents that were open to showing him the power of the markets, Tony ("Tony Tan" in the chat room) began his journey at only age 13! He was feeling under the weather for this interview, but we appreciated him toughing it out and making it through the entire interview. Nice mental toughness Tony! Notes: Tony got his introduction the market at the young age of 12 after overhearing family members speaking about it. After finding some initial success trading based off of the talking heads on television, Tony took a short break and resumed trading his sophomore year in highschool. Tony tried to game the system by trading ex-dividend dates thinking he could make easy money buying before and selling after he collected the dividend. It only took him a few trades to realize that there are many computer models that already arbitrage this when available which led to him getting burned before changing strategy again. Eventually Tony joined the Inner Circle and tried to reverse engineer alerts to learn without spending any money on education. Tony recognized that there is no holy grail out there and is now keeping it simple. He has his timeframe and his methodology for entry and exits and this keeps his emotions out of the equation. Quotes: “I started trading in 2008. I opened up my first brokerage account when I was 13.” tweet this quote "After the ex-dividend date, the stock dropped 6 dollars so I cashed out on that and looked for a different strategy.” tweet this quote

A key aspect of trading success is realizing that it is a business. Because of this, you better be ready to step in as the CEO and operate it as such. Community member Joe ("JBH" in the chat room) gives us all a shining example of exactly what this looks like. He has built businesses before, and now he's in the business of trading and he's doing exactly what needs to be done. He's a great reason why I love doing these podcasts... he had me fired up and inspired by just how serious he treats all of this. There are way too many jokers out there that don't take trading seriously enough, only to complain "it's all rigged"... this is NOT the case with Joe! Notes: Joe had taken a long road trip to clear his head and when he arrived back home he realized that he did not want to start another company so the stock market would be his new income source. An EXTREMELY rare thing happened with Joe. He falls into one of the rarest categories because he did not do any live trading until he got educated first (which we usually never see). Since Joe has started multiple businesses from scratch he understands that any successful company requires lots of preparation, research, and overall hard work. He gave up the chase for quick riches a long time ago and recognizes anything of worth requires serious concentrated effort. Joe also realizes the importance of not lingering on previous losses and gains. After each trade it is important to learn as much as you can but remember, there are more trades to be made the next day and if you carry those previous trades with you they will certainly impact your performance. A strong trait to master is the ability to recognize your own strengths and weaknesses. Joe has identified those pesky voices that generally cause a trader to lose money and with that recognition he can see what is to be ignored and what is to be acted upon. Quotes: “I was googling, I was hash tagging. I’m kind of a nut when it comes to research. I was an investor, not a trader.” tweet this quote “Robotic Trading says it is not an emotional thing. That’s BS. If you’re a sore loser like me that’s an emotion. It’s hard to take that away.” tweet this quote “If I keep adding all these other indicators then I just cloud my judgement with more opportunities to screw up.” tweet this quote “You don’t need to risk a lot of capital to make a bit of money. The pendulum is swinging closer to gambling when you risk a lot.” tweet this quote “You have to have an exit strategy and not get too greedy with a loss or with a profit. Don’t ever think it’s going to bounce back.” tweet this quote Links: Video: Live Day Trade: How to Make $185 in 2 Minutes Video: Avoid the Pattern Day Trader Rules

As weird as it may sound from a logical perspective, making money can actually be one of the worst things to happen to someone new to the market. We sit down and talk with chat room member Dave ("TracknPennies") and he discusses some very insightful aspects of his journey... including of course how his early success turned out to be the "worst thing that could happen: he made $3,100". Why was this the case and where did his journey go from here? Sit back and enjoy. Notes: Dave’s introduction to the market came back while he was in high school in the 80s. About 15 years later he started to get re-interested and decided to start doing some research. Like many others, he didn’t want to outlay too much capital and this led him to penny stocks. The message boards and huge gains were extremely appealing considering the small amount of capital required. After having a few small wins and losses, Dave made a really good profit and now thought he had ‘figured it out.’ These thoughts always lead to prematurely sizing up. After having mixed success trading shorter term time frames, he started looking into the companies ‘stories’ and now swing trading them. On more than one occasion Dave was up $30,000 in unrealized profit but more often than not would end up only walking away with $5,000. The power of greed is something many people underestimate. Eventually after watching huge gains diminish to small gains or even losses, Dave decided that he was going to take some time off from the market. When he returned, he realized that he needed to invest in his education. The penny stock market eventually went lifeless and that is when he decided to learn how to use his technical analysis to trade options like many other traders in the community. Dave realizes that his risk vs. reward is not where it should be yet and that is his primary focus for 2016. Quotes: “When the economy took a dump the money wasn’t coming in like it had been. I had to start looking for other sources of income.” tweet this quote “The worst thing that could happen happened. I made $3100 in an hour. So now I’m a professional.” tweet this quote “The chart was screaming sell but I was drinking the Kool-Aid. I was up $30,000 and I still didn’t sell.” tweet this quote “You can lead a man to knowledge but you can’t make him think.” tweet this quote Links: Course: The Penny Stock Survival Guide Video: Live Day Trading Reality Check

We all have different amounts of motivation that we require in order to give us a "wake up" call, and in this case, it took a loss of 75% of their account. Thanks to his honesty and transparency, chat room member Chase gives us a fantastic look into his journey... including needing to lose the majority of his account before realizing and acknowledging he needed to make some changes. Chase has been around the community for a long time and is a asset to the community, so I'm excited to be able to have him share his story with the rest of us. Get ready! Note's Chase’s parents had purchased stock for him at a young age. He let these shares sit until he was an adult and somehow in passing he was reminded of this and started to investigate how he could make money in the stock market. After extensive research, Chase decided to join the Inner Circle because of the low cost. After spending some time in a few communities, he decided to stay here because of the environment. He however did not invest in his education at this point. While going through free content on the internet and giving him a sense of knowing the basics, he then would place trades from his phone in the bathroom before returning to work and then check on them again in 20-30 minutes. When Chase took his trading account from 2000 down to 500 dollars he realized he needed to spend more time investing in his education. He took 2-3 months to get through every single video and every course. He also rewatched multiple courses to hammer home the principles taught. Chase is a big believer in logging his trades via a trading journal. He writes down information concerning his mentality and attitude both before and after his trades. This detailed log provides a good amount of data for him to review when the market was closed. Without a real passion for the markets, it would be truly difficult to maintain the amount of practice and good habits that Chase exhibits. He understands that this is not a get rich quick scheme and recognizes that without consistent effort there is no way to succeed. Quotes: “I just wanted to have a really relaxed life. I hate the 9-5 jobs. I didn’t even know trading was a thing. I thought it was investing.” tweet this quote "The best way to describe penny stocks in general is just ‘a dump.’ When I got in there the big hype was Ebola.” tweet this quote “Instead of being on the momo train like I am doing now, I was just getting hit by it.” tweet this quote “My paper trading account is setup exactly like my live account. I’m still just focused on the process. tweet this quote

Where has the time gone? I swear it was just last week that I was sweating bullets awaiting doing the first ever interview... and here we are, now at episode 50! Chezz and I take a look back at the history of the show and discuss some common themes that have arisen time and time again. When multiple guests have made mention of the same general concepts, we figured it was worth taking note of and mentioning so that hopefully you can learn from multiple people's mistakes. Notes: In this episode, Clay and Chezz reflect over the past 50 episodes and touch on some recurring topics that are ‘rant’ worthy. This includes: What do you think about ticker XYZ? The importance of paper trading realistically. Growing a small account.Reluctance to invest in education and willingness to gamble ‘cautiously.’ Buy and sell alerts (which create dependency). There is no need to rush. The market will be there in the future. Quotes: “The more and more I learn about trading, the less and less I need anybody's opinion.” tweet this quote “If you can’t buy 10,000 shares when you go to real money, don’t go to 10,000 shares when you are paper trading.” tweet this quote “You are a CEO. What are you a CEO of? Your personal finances. You are in charge of you.” tweet this quote “You wouldn’t go to a doctor for heart surgery who says, ‘I googled some stuff. It’s cheaper than going to school.’” tweet this quote “There is a big difference between alerting something that is in-play and how to play it. We all have different risk tolerance.” tweet this quote “Just keep practicing because the market will be there tomorrow, in 6 months, in 6 years. Your financial capital is finite.” tweet this quote Links: Video: The Worst Possible Question To Ask Video: The Surgeons Dilemma