The Option Genius Podcast: Options Trading For Income and Growth

People literally ask me this one question ALL THE TIME… "Allen, how did come up with such a lucrative, safe, and easy way to trade?" I explain it all in my new book Passive Trading, get your free book here https://www.passivetrading.com/free-book! Option Genius was built with you...the individual trader, the breadwinner, the dreamer, the rock your family depends on ...in mind. Because we know what it takes to become a successful and profitable trader. And that's exactly what we help you do best. Get your $1 trial of Simon Says Options, our most conservative and profitable trading service here https://simonsaysoptions.com/stockslist-ss-trial-offer. -- Which is the better way to live: to plan every detail or to let the Universe look out for us? And which of those makes for a better trader? "If you want to make God laugh, make plans." We cannot control the stock market. We cannot control individual stocks, or their reactions to news. So what can we control as traders? And should we? That is the question we tackle in this episode. How to be able to flow with the market but still protect ourselves from volatility and excessive fluctuations. Books mentioned: The Surrender Experiment Where The Magic Happens Links: https://optiongenius.com -- LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.

People literally ask me this one question ALL THE TIME… "Allen, how did come up with such a lucrative, safe, and easy way to trade?" I explain it all in my new book Passive Trading, get your free book here https://www.passivetrading.com/free-book! Option Genius was built with you...the individual trader, the breadwinner, the dreamer, the rock your family depends on ...in mind. Because we know what it takes to become a successful and profitable trader. And that's exactly what we help you do best. Get your $1 trial of Simon Says Options, our most conservative and profitable trading service here https://simonsaysoptions.com/stockslist-ss-trial-offer. -- In this episode we review what impacted the stocks markets in 2019 and what we see coming in 2020. Now keep in mind that these are just my interpretation of things to come. I might be right, I might be wrong. That is not the point. The point is to hone in on trends. If you can spot a trend coming before anyone else, you can make a lot of money. Or even if you spot it in enough time to ride it, you can still make a lot of money. And as they say in trading, the trend is your friend. So the trends will probably continue. So if we can identify these trends, especially if they are long term, if they have been occurring in the past and they're going to continue to occurring. Then those are things that we can actually benefit from in a financial sense. The 2020 Predictions have to do with: Volatility How The Markets React To The Election The Automotive Industry Technology Medicine Why Recycling Will Be Stopped Border Changes https://optiongenius.com/ Link to 2019 Predictions: https://optiongenius.com/podcast/38-2019-predictions/ -- LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.

People literally ask me this one question ALL THE TIME… "Allen, how did come up with such a lucrative, safe, and easy way to trade?" I explain it all in my new book Passive Trading, get your free book here https://www.passivetrading.com/free-book! Option Genius was built with you...the individual trader, the breadwinner, the dreamer, the rock your family depends on ...in mind. Because we know what it takes to become a successful and profitable trader. And that's exactly what we help you do best. Get your $1 trial of Simon Says Options, our most conservative and profitable trading service here https://simonsaysoptions.com/stockslist-ss-trial-offer. -- Happy Halloween or happy belated Halloween depending on when you listen to this. For me, actually it is the day after Halloween, and I was lucky enough to take my three kiddos out last night for trick or treating. Normally the wife does it, but she was sick and so it fell to me. Okay, no problem. We had fun. We spent about an hour and a half going around. We've been living in the same house now for about 10 or 11 years. With my oldest turning nine in a couple of weeks, that means that we've probably been trick or treating about seven times I think. We would probably missed a couple of times but we've been about seven times trick or treating since we've been in this house, but we have never tricker treated in our own neighborhood. It sounds kind of weird, right? Normally you would stay where you are, but I don't know. Our subdivision is never very decorated for Halloween. I mean they go all out for other holidays, but Halloween it's just not a lot of decorated or lights or anything. I never thought that we would get much candy. You know? If you know about Halloween, or if you have little ones, or grandkids or whatever, you know that the amount of candy you get determines if the night was a success or not. Right? They don't care if it's cold. They don't care if it is windy like it was last night. All they care about is how many things they get in their little pumpkin. You know? Last year my wife and her friends, they took all the kids to the quote unquote rich neighborhood. You know, the one with the million dollar houses thinking that, okay, if they're rich, they're going to have more candy. They'll be more generous. Yes the kids did get a couple of the King size candy bars from a couple houses. Mostly it was the same. Everybody's giving the same little mini size stuff. Overall, at the end of the night, they ended up with less candy than they expected. They didn't think about it, but it ended up that the reason was that these million dollar houses are so large, and they sit on so much property that it takes forever to walk with these little tiny legs, these five, six year olds to go from one house to the other house. You end up hitting a lot fewer homes. You're not knocking on as many doors when you have such big houses, even though you might get a little bit more candy from each one. Oh boy. Well last night I think it was in the lower forties, no sorry, upper forties in temperature. It was very windy. With my wife being sick, it fell onto me. I mean I didn't want to be out for a long time. I just wanted to get this over with. So we stayed in our own area. We stayed in her own little subdivision, and I was pleasantly surprised. We weren't even done with our own block when my kids, pumpkin started filling up. I mean that's how much people were handing out. Being the resourceful dad that I am, I saw that there was a newspaper on the sidewalk. In our neighborhood we get these free newspapers. Nobody really buys the newspaper anymore, but there's this free newspaper that they come every week and they throw on the ground. I took the papers out, put them back on the ground, and I took the bag, the newspaper bag that it comes in. I started taking the candies, the excess candies from the pumpkin's and filling that up so that their pumpkin's would be empty again. It just kept filling up over and over again, and eventually we had to stop at a neighbor's house. We had to ask him, "Hey, do you have anything we can hold all this candy in?" They gave us those plastic shopping bags that you get when you go to the groceries or whatever to haul all the treasure. We actually filled up one bag with everything, and then it was so full, we had to actually double bag it, even triple bag I think. It was literally 30 to 40 pounds of candy that I was lugging around. My kids are bouncing up and down, and I'm holding my three year old's hand, and I've got the 40 pounds of candy I'm cradling in the other hand because I didn't want the straps to break. That's how we were going from house to house to house. By the time we were done we had enough candy to declare that this Halloween was the best ever. Not because it was with dad and I was more fun. It was just because there was so much candy. My God, it was the most candy in the shortest amount of time from people that we already knew. That might've been part of it. Since we didn't know the kids, they might've given them a little bit extra. Who knows? Why am I sharing this sweet story with you? Well, you know me, I always have a motive, right? We always have to tie it back into trading. We take life and then we bring it back. When it comes to trading, people are always thinking that the candy will be better in another neighborhood, that their own neighborhood is not good enough for some reason and they got to go to another neighborhood where it costs money, or there's an admission fee to get in. Right? Now, countless times over and over again, traders have told me that they're doing well with one approach, but they want more so they're going to switch to something else. I just got an email today. The fellow said, "Hey, you know, I've been using this particular strategy and I'm up about 25%. I've learned from my dad how to do this, and he doesn't know very much, but I'm looking to do something else." My question always is, why? You know? Why stop what is already working? That makes no sense to me. I mean, you can always add to it, right? I mean if you're doing something that works you keep doing it, but you can add to it slowly. Before you do that, make sure that you are extracting every single Kit Kat out of what you're already doing. Test it. Tweak it. Maximize your gains because the big thing here is that you already know it works. Right? It already works. You already know how to do it. I mean, sure other neighborhoods look enticing, but it could be a trap, or maybe even an old folks home where you don't get nothing. Just a bunch of scary people looking at you. Right? I've said this before, you only need one strategy to make a lot of money, and if you've already found something that works, stop buying courses, stop watching videos, and going to seminars. Celebrate that win because that is rare. Celebrate it, and improve the results. Now, if you don't have a strategy that works, you can check out our website at optiongenius.com, and we'll share some of ours with you. Okay? If you already have something that works, and many of you do, just keep tweaking it and improving it. If you need coaching to help you with that, then we can help you with that as well. Okay? I still have a couple slots open for my coaching program where we do one on one coaching with people. If you already have something that might be perfect because you're already making money. You can take some of that money, invest in coaching and maybe double, triple whatever your gains are because there might be something that you don't know, or there's another way to protect yourself. Same program, same strategy, same concept, but now it's done in a more professional way where you're protecting yourself. That would be the way I would suggest to go. I know you get emails every day from all these gurus saying, "Hey, I have this amazing course, and I have this amazing thing that never fails, and it always works. It makes 1000000% every year. Look at this stock, I made a 100%. Look at this stock, I made 20%. Look at this stock, I made 50%." I know they have very good, enticing copy, very good sales letters, and it makes you think that, "Oh my God, this is the Holy Grail. What I'm doing is peanuts compared to what this guy is going to teach me." You never know, most of that stuff is marketing hype, and gimmicks, and it doesn't work. Okay? I mean, that's just the plain, simple truth of it. Unless they can show you, unless they're actually doing it themselves day in, day out, don't fall for it. That's like going to trick or treat at the old folks home. They can't have any candy because they can't eat it, so they don't have any laying around, and they didn't go to the store to buy any candy so you're just wasting your time. Okay? Remember while I go out and eat another Snickers bar, I want you to trade with the odds in your favor. Alrighty? Happy Halloween. -- LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.

People literally ask me this one question ALL THE TIME… "Allen, how did come up with such a lucrative, safe, and easy way to trade?" I explain it all in my new book Passive Trading, get your free book here https://www.passivetrading.com/free-book! Option Genius was built with you...the individual trader, the breadwinner, the dreamer, the rock your family depends on ...in mind. Because we know what it takes to become a successful and profitable trader. And that's exactly what we help you do best. Get your $1 trial of Simon Says Options, our most conservative and profitable trading service here https://simonsaysoptions.com/stockslist-ss-trial-offer. -- Hey there passive traders, it's me, Alan and today I am coming to you from the sunny beach of Cancun. I believe they call it Playa Mujeres because it's the beach of Mujeres. Out there behind me, somewhere over there is the Isla Mujeres and this resort that we're at is actually on the Beach of Mujeres and so we're here on vacation with the family and I just wanted to shoot this quick video podcast to let you know that I learned something yesterday that I wanted to share with you guys and it's really ... Right behind me in the water, we took our kids snorkeling for the first time, the seven year old and eight year old boys. Sorry about the squinting it's really sunny today, but we took them snorkeling for the first time and I don't know if you've ever been snorkeling, but you get a little mask you put on and you get a little snorkel and you breathe through the snorkel and you look down in the water and you see whatever's in there. Now, there wasn't much to see out here. There was some fish. You go a little bit further over there, there's some seaweed and stuff. There were some pretty cool fish, a couple of big fish actually. They were really excited about that, but when they first started, I had prepped them ahead of time before we came on the trip. I told them, "Hey, we're going to do snorkeling. It's really cool. It's really cool. You put this thing and you can see all the water and all this different world, all that stuff." They were all excited. They were wanting to go. When we got here, it's kind of like trading, right? You hear about it, you picture it in your mind. It's like, "Oh my God, this is so cool. I want to do this. I want to do this. Yeah, I'm going to be awesome at it." Then you get your equipment, you get your mask, your snorkel, you get some instruction. "Yeah, this is what I'm going to do." Then you go do it for the first time and you totally freak out because it's not easy and it's not normal. You're not used to it because you're not breathing with your mouth anymore. I mean, you've got breathing with your nose, you have to breathe with your mouth. Then if you get a little water in the top of your snorkel, then drinking water and then the water is coming in your mask and your eyes are burning from the saltwater. Believe me, we had that same experience. Basically, we walked them through it. It's the same thing with trading. The first thing you have to do is you have to put your mask on, cover your nose, get used to breathing with your mouth. Open mouth breathing, breathe with your mouth. Once you got that done, you put the snorkel on. You got to make sure it's all tight and snug and then you have to breathe with the snorkel. You're just breathing with the snorkel. Once that's done, then you stand in the shallow water, you put your head down and you just look around, focus on your breathing, don't even worry about what you're looking at, just focus on your breathing, making sure all your technical aspects are right, making sure you're following all the rules, making sure step-by-step you're not making any mistakes. Then once you have all that done, then that's when you get into the water and you go deep and you start floating and then you can go a little bit farther. First time is going to freak out. You're going to ... It's going to be like, "Oh, it's not happening. It's not happening the way exactly that I planned in my mind." There's a fish and you'll freak out or there's a piece of thing, something touching my foot. All that stuff happens, especially in trading. It doesn't go exactly as you want, but if you go back and you stick to it, eventually you end up like my boys. I mean, they loved it. They loved it so much, they want to go again today and they want to go ... There's some shipwreck off the coast of the Island. They want to go over there. It blew me away how I couldn't get them out of the water. I couldn't get the snorkel off their faces because they were like, "No, no. More, more, more." There's nothing to see here, but they were so excited and that is how I want trading to be for you. Whatever your issues are right now, if it's not going well, if you don't know what steps to take, if you don't know exactly what instruction you need, it's there where it's available. You just got to take the simple, simple, slow, slow steps, right? Get your stuff, get all your equipment, practice the easy things. Practice putting on paper trades. Getting on the trade, putting it on, getting out, putting it on, getting out. Practice finding trades. How do I find a trade? What do I go through? How do I make it streamlined as possible? Right? Because I don't want you to just put on your stuff and just jump in the deep water right away. That's what most people do. That's why they get burned. I have a lot of people, a lot of students that told me, "Oh no, I don't want to do paper trading. I'm going to put ... I got $20,000 I'm just going to let it ride on one trade." You're freaking crazy because you're going to lose a lot of money that way and they do. Then they come back and they're like, "Yeah, I should've listened to you." Well, that's too late now. You just learned a very, very expensive lesson. Let's not do that. Let's do it snorkel time, right? One at a time, because in snorkeling, you mess it up, what happens? You just stand up. You drink some salt water, no big deal, but what could have happened and what almost happened with my second son is that he almost gave up. He tried it the first time. "Oh man, daddy, I don't like it. This is horrible. I don't want to do this anymore." He threw the mask down and he threw the snorkel down and he just stormed away. That's what we cannot have happened to you because if it does, then you lose out on a passive income stream that has the power to change your life. I mean, take a look around. I'm here on a weekday in Cancun, enjoying with my family and my trades are still working, right? I mean, you can see ... There are not there many people here, right, because this is a private beach for a private resort. There's not going to be a lot of people here. This is not like the cheapest resort on the place as you can imagine. That's what comes with from trading properly and passive trading and the ability for you to be able to take vacations, not have to worry about your trades as much. I mean, I checked on my trades this morning. It's actually the same time frame here in Mexico as it is back home for me. I checked on my trades this morning and they're fine. They're doing great. I'm making money, my options are ... They got [inaudible 00:06:13] going on everyday so I'm not worried. I checked it. It's all done, but I got to take the chance and the day, or at least a few hours, to teach my kids a skill or have an adventure with them that they are probably going to remember for the rest of your lives because I remember the first time I went snorkeling and it was with a school trip. It wasn't with my parents, but they were here with their parents and I think they're going to remember that for the rest of their life, which is pretty cool. I don't know what else to say. I'm trying ... I'm making this video here in Cancun with the beach and everything because I want to inspire you. I want to motivate you. I want you to be like, "Yes, I got to do this right now. I got to get going right now." This is the time. Today is the time. I have a couple of other stories from Cancun. I'll share on them later, but in this one, I just wanted to say, look, every day that goes by is a day that you get closer to retirement or you get closer to that next bill that needs to be paid, right? Today's the day that we need to start so that you can start enjoying stuff, do the things that you want to do, take your families on trips you want to do, adventures. Teach them the stuff that you want to really teach them. Just take it step by step, just like snorkeling, it's doable. You start off in the shallow water. Step one, step two, step three. Break it down as easy as you can. If you don't know the steps, let us know. We'll show you the steps. Okay? With that in mind, you want to take a look. That's the beach. It's beautiful. Blue waters everywhere you can look. It's gorgeous. Take care and happy trading. -- LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.

People literally ask me this one question ALL THE TIME… "Allen, how did come up with such a lucrative, safe, and easy way to trade?" I explain it all in my new book Passive Trading, get your free book here https://www.passivetrading.com/free-book! Option Genius was built with you...the individual trader, the breadwinner, the dreamer, the rock your family depends on ...in mind. Because we know what it takes to become a successful and profitable trader. And that's exactly what we help you do best. Get your $1 trial of Simon Says Options, our most conservative and profitable trading service here https://simonsaysoptions.com/stockslist-ss-trial-offer. -- It's the call we never want to receive, but at some point you do. Maybe multiple times in your life. And when it comes, you know it before you pick up the phone. You know its bad news. Really bad news. And you wish that if you ignore it, things will stay the same. But you know you have to pick it up, and that your life will never be the same again. We got one of these calls on Sat Aug 31st. My wife and I had gone to dinner. My wife's mother was watching the kids and was going to sleepover. As soon as we ordered, the call came…it was my mother-in-law. Someone had beaten up my father in law at work and he was taken to the hospital. So we canceled the food and rushed to the hospital. As soon we go there we basically got the silent treatment from the staff. That's when we knew things were bad. After waiting in the family room a doctor, nurse, and cop showed up. My father in law was not beaten up. It was a robbery and he was shot. And he didn't make it. Period. End of story. End of life. Death is part of life, and there are many ways to die, but for the survivors, it still hurts. It still causes pain. As the word spread we had to deal with relatives coming, people dropping by to give their condolences, and even the media. Without our friends, we would not have made it. We would not have know how to act or what to do. But thanks to our friends, they just came over, took charge and took care of everything. One family took the kids for one day, another took them for another day. One friend took care of all the food and arrangements from family flying in. Another handled the funeral. It was amazing. As a severe introvert, I have never been one to keep in touch with people or to easily trust, but these people have my eternal gratitude. Death can bring people closer together and is a reminder that all of our time here is limited. For some reason most of us have to be reminded of this over and over. I am not sharing this with you for sympathy or pity. I am sharing this to remind you that life is short. Sometimes much shorter than we expect. No one even imagined that my fil would be gone. Heck his parents are in their 90s and still kicking. He had genetics on his side. But it didn't matter. Whatever you want in your life, there is no telling if you will be around tomorrow to make it happen. So stop putting things off. The people that you love, tell them today. The people that you hate, forgive them today and move on. The thing that you have been putting of…start it today. No more excuses – no more… I don't have time, or money, or education….just take the first step right now, today and move towards your dreams. My dream has been to start a foundation. But I keep putting it off. No more. I reached out to my mentor and we are starting it together. I will let him to all the work of organizing and running it, but I get a say in where the money goes which is all I want anyway. They say that everything happens for the best. When you're in pain that is really hard to see or believe. But in the end, it doesn't matter because we have to move on anyway. And live the best life we can. So again, I say, whatever is holding you back…do something about it. Now, today. Every day that you are alive is a day that must be lived. Live it to the fullest. No regrets. I wish for you joy and peace, and may the odds be ever in your favor. -- LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.

People literally ask me this one question ALL THE TIME… "Allen, how did come up with such a lucrative, safe, and easy way to trade?" I explain it all in my new book Passive Trading, get your free book here https://www.passivetrading.com/free-book! Option Genius was built with you...the individual trader, the breadwinner, the dreamer, the rock your family depends on ...in mind. Because we know what it takes to become a successful and profitable trader. And that's exactly what we help you do best. Get your $1 trial of Simon Says Options, our most conservative and profitable trading service here https://simonsaysoptions.com/stockslist-ss-trial-offer. -- Allen: Welcome, passive traders, to another episode of The Option Genius Podcast. Today, I want to be talking about trading for a living without trading. Huh? What? Allen, what are you talking about? How do you do trading without trading, but to doing it for a living? That doesn't make any sense. Alan, what you talking about? Well, allow me to explain. Now, you see trading for a living sounds great. Whether you do it professionally and you manage other people's money and you get a percentage of the profits or whatever, or you trade for your own. You trade your own money and you grow it, grow it, grow it over time, and then you have enough money to earn a decent income from it so that you don't have to work. You don't have to do anything else. You're covering your expenses. We have people doing it both ways, and it just sounds interesting and exciting. It's like I trade for a living and it gives you a boost to your confidence as well, I got to tell you that. If you feel bad about yourself, but you're like, yeah, I trade for living. Oh, man. You're on top of the world. That's why they call themselves, these hedge fund guys, they call themselves masters of the universe. Because he is a key man. You got your chest stuck out like, I trade for a living! It's like if you're at a party, people come up to you and say, hey, how are you doing? What do you do? And you're like, I, trade for a living! I go into the markets and I bend them to my will to do my bidding, with just my wits and my brains. I make money from thin air. Ha, ha, ha, ha. Well, I mean, you probably don't want to do it with the evil laugh at the end. But I mean that's the way most people look at it. Unfortunately, most people have, even traders, have a misconception about trading for a living because they normally think of day traders who by definition have to trade for a living because that's their job. That's what they do. If they don't trade, they don't eat. If they have a trade on, they have to go to the bathroom, they can't. They have to wait until the trade is over. They can either pee their pants or if they leave, then they might lose money on the trades and they can't do that. But most professional traders are not like that. They let their assets or their money work for them. They let the markets come to them and they only trade when they feel they have an advantage. This advantage, it doesn't come every day or multiple times a day. I mean, you take for example, Jesse Livermore. Now he's not famous anymore, but back in the day in the 1920s and '30's, this guy was the major trader. Everybody knew his name. He made millions back then and this is in 1920 dollars. He actually wrote a book about it called Reminiscences. I don't even know how to say this word. Reminiscences of a Stock Operator. He used a pseudonym as the author of that book, but there's another book specifically about him called Jesse Livermore, World's Greatest Stock Trader. Now I would urge you, if you're interested in stocks and trading and whatnot, even options, you should get both of these books. I love them. I read them from time to time. He's one of my favorite classic traders and you can actually learn a lot from the way he thought by reading his books and understanding what he was going through when he was thinking about trades, when he was ... when things were happening in the markets, how he would react to them. How we would see them. He was probably one of the first people who ever used technical analysis before they even knew what that was. At that time back then, they didn't even know or they didn't have any understanding that markets would move in certain patterns. And so, he was in his brain without even doing the charting in his brains, he was able to discover these patterns. But, he did not trade every day. He wasn't in the market all the time. His keys to success, one of them at least was to wait. One of his most famous quotes is that the money is made in the waiting. He was called the boy plunger. So what he would do is he would wait. He had his whole big stock portfolio just sitting there waiting. Not in the markets every day. He didn't care what happened every day. But then, he would notice something happening in the market. He would notice that there is something abnormal happening and then when that happened, he would go all in. Now I'm not saying we need to do this. Eventually he did end up going bankrupt. Actually he went bankrupt several times, but the last time he couldn't recover. I don't remember if he actually killed himself or not. I don't remember that part, but he ended up, he never recovered the last time. But, he was able to make millions along the way If he had put it into other investments, he probably would've been okay, but he didn't, so there's also that lesson to be learned. But then we have, what he was waiting for, the proper opportunity. He was waiting for the chance where the odds were in his favor. Now he wasn't selling options. I don't even think they had options back then, so he didn't have the opportunity that we have as option sellers and passive traders to wait and to do trades that have the odds in our favor from the beginning. But his thing was, he was a stock trader and so he would wait until the market showed him or a particular stock showed him that he was going to make a big move in one direction or the other. That's when he would go all in for it. Now, I bring this up today because right now it's August, 2019. When I'm recording this, it's today's the seventh. The markets this month have started off very rough. We're down about 7% on the S&P 500 as I record this. Now, I don't know what's going to happen later on, and it doesn't really matter if you're listening to this much later. You could be listening to this to a year or two years from now. It doesn't really matter. But the fact is that this is going to happen. There are going to be times in the markets where we have big declines or we have big upswings, but mostly the declines happen really, really fast. The bull goes up the stairs, the bear goes out the window. The bear's going to go down a lot faster than the bull makes it up to the top. But in that event, what do you do? Should you be trading in such a market when in one week the market is down 7%, it's down 3%, then it's up 2% then it's down 5% or 4%. Well, if you can make money in a volatile market or you're a pro short seller, then yes, go ahead and trade. That's your element. That's your thing. You go and you do it. But if you're a at home gamer option seller, then probably not. I had this argument with one of my students in our Blank Check Coaching Program in which we sell oil options. That's the whole program there. We sell oil options. He was upset because he was trading for a living. Doing well at it for several months, over a couple of years. But he was upset when the oil market was not cooperating. Now I tried to explain to him, I said, look man, you don't always need to be in the market. Every month the market is not going to cooperate. It doesn't matter how good your strategy is, how good your trading plan is, how good of a trader you are. There are times when you will lose money and there's nothing you could do about it. But the reason that we sell options, we know that over time we are going to continue to win. It's a longterm game. Not just over one month or two months but over 12, 24, 36 months, we know that we're going to come out ahead. So yes, this month, August, 2019 might be a volatile month. It might be a down month and you might have lost a little bit of money. But if you're an option seller, we have the opportunity to get back in right next month and do it again and make money and then make money and make money and we'll go recover our losses. Over the long term we come out ahead. But if you are trading for a living, sometimes you don't have that ability to look at the long term because you've got to pay the mortgage this month. And like the student, he expected to take his expense money out of the market every single month. That's just not realistic. Now you might be sold something otherwise, you might be told oh hey, you could be a day trader or take this course or take this course and we'll teach you how to make money every single time. All your expenses will be paid from the market. No, that's not realistic. I'll tell you the truth, right now the markets are down. I currently only have one trade on in my trading account. I mean, in my retirement accounts, I still have my covered calls and I have some naked puts on that I sold to take advantage of the situation of this downturn. But in my trading account, I have one trade and it's a small trade. That one trade is not going to pay my bills this month, but that's okay because I knew that this type of event can happen. I built in a safeguard and I have a cushion. I know times like this will come when I don't want to be trading. You look at any hedge fund, they are not fully invested all the time. Heck, they're almost never fully invested. Meaning they don't always have 100% of their money at risk in the market invested in something. They don't have to make a killing every single month to survive. They play the long game. It's about a yearly return for them. Even though we sell options and we trade and we talk about trading for a living and our expenses come every month, that doesn't mean that we have to look at our trading on a month by month basis. I mean, of course we do because we want to see how we're doing. But if you look at it on a yearly basis, you'll get a much better picture and a much better idea. If you look at long term 12, 24, 36 months, that's how your account grows. So when people asked me, Allen, how much of my money should I put into this trade or into this strategy? Or how much money do I need to make X every month? I'm not sure what to tell them. It's surprisingly how often I get that question. Alan, I need to make $2,000 a month. How much money do I need? I can't tell you. I mean, we did an episode on that to help you figure out what number. I don't know what it podcast episode it was, but if you go on the list, that's the title of it. How Much Do I Need to Make X? You can listen to that one. I go into that more detail, but every month is different and every person is different. I don't know. I can't give you a number and say, if you want to make $5,000 a month, well you need to have an account with, oh, let's say $50 thousand dollars and you'll make 10% every month. I can't say that because there might be some months when you do, but they're going to be other months when you don't. That would be a lie. There's too many variables. You need to have your trading money and if you trade for a living, you need to have savings, a cushion that you can tap into when you are not trading or the markets are not cooperating, which they do from time to time. The worst thing to do in this situation is to force a trade. Because if you feel like, oh man, I have to do something. I have to do this. I have to do something. I have to take advantage of the situation. Oh the market's dropped 7% I don't think it's going to go up anymore. I think I'm going to go short the market right now. Well, when the market drops two, 3% in a day or more, it can turn around the next day and jump up the same amount or even more. If you force a trade, you stand the chance of getting your face ripped off and that's going to double the compound. I mean, maybe you already lost money because the market went down unexpected. Okay, fine. You lost money. Well, now you're going to double down and say, all right, now I'm going to short the market and the thing's going to rally because that's what markets do. Then you're gonna lose on both sides and then you're going to be even more upset. Then you're definitely going to be on tilt, which means you're not going to be emotionally stable. You're going to be looking at all different kinds of trades and you're always like, aw man, I got to pay the bills this month. I've got to pay the mortgage. Oh my God, what do I do? What do I do? That's not the way to trade. That's not the mental status you need to be trading. That's not the way, the time, the mental frame that you need to be in to trade effectively, to trade properly. It doesn't matter what strategy you're using. So yeah, if you want to trade for a living, you need to know when not to trade and that you don't always have to be trading. That's the whole point of this episode. Don't force trades. Don't always be trading. Like that student I mentioned, if you have to always be trading to earn an income, then that tells me that you don't have enough funds to be trading in the first place for a living. You should go up and save more. That's the bottom line. So while the pundits on the financial media are freaking out right now and nobody knows when the markets are going to stop falling. I am just going to sit on the sideline and wait. I'm going to wait for the VIX to calm down. I'm going to wait for markets to calm down before I dip my toes back in the water. I mean, I had my trades on and this month I'm going to lose money. I already know that. Well not necessarily, the month is still young. But I had my trades on, and the markets turned around and I got out. I took losses and I got out of every single trade except this one. I'm like okay. My losses that I took are manageable. I didn't wait and think, oh, things are going to turn around, things are going to turn on. No, I saw a change in the market and I said I'm getting out. We did that. We did that on all of our services Option Genius, Simon Says, every trade we're out. Now, when the market calms down, we're going to get back in. Then the trades that we put on, hopefully will recover what we lost and hopefully more. Or if not this month, then in the next two, three months we'll recover everything that we got back. That's how you play the long game. Because yeah, you'll lose a little bit of money in a month or two, but you add up all the wins from all the good months and that recovers and it gives you a good yearly yield. So when you look at the longterm picture, 12, 24, 36 you come out ahead. That's what I mean by you come out ahead that way. So again, trading for a living without trading means that if you are having to be forced to trade, if you have to be in the market all the time, there's a very good chance that you're going to lose all your money and that you're not going to be able to trade. Just like Jesse Livermore, he sat around waiting for the perfect opportunity for him. For us, we have good opportunities every month, but that doesn't mean we need to be trading. Doesn't mean we need to be in the markets. If we don't understand what's going on in the market. If the market is too volatile for our taste. If our strategy calls for a slow market and we don't have that, we wait. We only trade when the odds are in our favor. That's what it comes down to. Thank you so much for joining me on another episode. See you next time. -- LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... 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People literally ask me this one question ALL THE TIME… "Allen, how did come up with such a lucrative, safe, and easy way to trade?" I explain it all in my new book Passive Trading, get your free book here https://www.passivetrading.com/free-book! Option Genius was built with you...the individual trader, the breadwinner, the dreamer, the rock your family depends on ...in mind. Because we know what it takes to become a successful and profitable trader. And that's exactly what we help you do best. Get your $1 trial of Simon Says Options, our most conservative and profitable trading service here https://simonsaysoptions.com/stockslist-ss-trial-offer. -- Okay. So Wayne, I see that you have a book that you have written about trading in the stock market. And the title of the book is "Beating Wall Street with Common Sense", which is an interesting title by itself, but then it goes on. It says, "How I Achieved a 400 percent Return from My Dorm Room". And so I saw that book, and I was like, "Hey, that's really cool". I bought it. I read the thing, and I looked you up and it turns out that you are actually a writer as well. Wayne: Yep. Allen: Yeah, so, I mean- Wayne: Yeah, I'm a journalist. Allen: The funny thing about the book was that, I think it was the first line of your book, or the first sentence is, "I am not a writer". Wayne: I know, it's ironic, because at the time I wasn't. But the book kind of jump started my whole different change in career for me. So I can't use that line again if I write another book. Allen: So why don't you tell us about that. How'd you get 400 percent and how'd you get into the whole stock market game? Wayne: Well, I talk about this a little bit in my book, which is that growing up I've always been kind of a numbers person. I was a big baseball fan, I was hardcore into baseball statistics, and I always had a fascination with the stock market, but I didn't really know much about it. And then when I went to college, I majored in brain and cognitive science, which is essentially a combination of psychology and neuroscience. So I didn't really take any finance courses or anything like that. And, as we all do in college, you have some boring classes sometimes, and I was actually in graduate level courses in 2008 when anyone that was investing at the time knows, because it was obviously a lot going on in 2008, so I actually started reading up and learning about the stock market for the first time, and decided I wanted to dip my toes in and invest. And, like any new investor, I obviously made a lot of mistakes, I tried to learn from those mistakes, and I was fortunate enough to where I timed a good entry point. I like to think I had some decent insights into some good stocks to buy, and fortunately it really worked out for me. Wayne: And I talk about all this in the book, and one of the things I wanted to do with the book is make sure that I don't hide my mistakes, even my embarrassing ones. Because I think that's important, I think it's... everybody's going to make dumb mistakes when the start out, and you shouldn't be ashamed of that, you should just make sure you understand why you make them and try to learn from that. Wayne: So with the book... writing a book was always on my life bucket list, so I wrote the book, I actually tried to get it published through a publisher, but I had no experience writing as I said in the book, and that was one of the things I consistently heard from publishers was that, we really like the book but we're looking for authors that already have an audience built. So they were like, you should start a blog, you should try to get some freelance work, and maybe the next time you write a book we'll be more open to the idea of publishing it, and so I kind of started writing for Motley Fool, Seeking Alpha, websites like that. I had some success there, and I ultimately kind of ended up changing career paths. Now I write full time for benzinga.com and I contribute for US News and World Report and Investor Place. Allen: Cool. So I definitely want to ask you about the mistakes that you mention. But before we do that, how did you get 400 percent, and over what time frame? Wayne: I think it was over about... well first of all, I can't take full credit for it. Because the first stock I ever bought was in December 2008, so that was a pretty darn good time to start buying stocks. So obviously if you bought just about anything in December 2008 you would have done pretty well over the next few years. I think the time frame... I don't remember exact, I think the book I wrote in 2011, so I think over about three years I generated more than a 400 percent return. Which I think is pretty good, nothing crazy, but I mostly took the approach of trying to identify high quality stocks that got slaughtered during the downturn and that I thought got unjustly punished and I think my largest profits came off of buying big bank stocks. Allen: Yeah, they were beaten down a lot. Most of them were like... Wayne: Yeah, I think I got Bank of America in early 2009 at point during my trades, I think I bought it at two dollars and 75 cents a share or something like that. Allen: So basically, it was really really good timing. Wayne: Yeah. And I like to think that wasn't an accident. Allen: Did you trade options at all? Or was it all stocks? Wayne: Initially I didn't. I think my first big option win came in 2011, and at the time I was just wanting to learn about options, I didn't really have any experience but I was always interested in it, so much like trading stocks a couple years prior I sat down and researched and tried to teach myself about options. My option trading, I always did it purely as speculation. I was buying calls, inputs, which I know is opposite of what you recommend, and also for my experience, the opposite of the way you should approach options unless you're doing it the way I did which was pure speculation, fun, gambling, lottery ticket type stuff. Which is what I was doing at the time. Allen: It says here that you did it when you were in college. So how did you get the money to start? Wayne: I started small, which is another thing that I would recommend for anybody that's starting out. It was just some money that I had put away, and it wasn't a ton of money. I think when I first started I had maybe 2000 dollars or something like that. It wasn't anything big. I really just wanted to learn the ropes and I think it's... that's one of the pieces of advice I'd have for any new investor, is if you're in your 20s and you're thinking about stocks, but you think oh there's plenty of time to do this, I'll learn it whenever, I think it's good to get in when you're young, make your mistakes early, make your mistakes when you can afford to lose a little bit of money, and then, by the time you really have real money to work with, you kind of know the ropes and know what to do and what not to do. Allen: That's well said. How old are you now, by the way? Wayne: I'm 35. Allen: 35. Oh man. You still got a lot of stuff to learn. Wayne: Yeah, I feel like I'm fortunate that I started relatively young. Because again, even if I had lost everything at that point, I think when you're 26 years old, you got plenty of time to recover and you're not throwing away your retirement savings or anything like that. You're not derailing your financial future. So I always tell people, definitely start young. Allen: You won't believe how many stories we hear from people that are in their 50s and 60s, and they come to us and they say, "Hey I just got started and I lost a bunch of money". Now it's not too late, but if you had started earlier or if you had been doing it a little bit safer, you would have been in such a better boat. Wayne: Absolutely. Allen: So Wayne, how have you been doing since then? So that was a few years ago, the market's been in a really nice bull trend. What do you do now, how do you invest now, how's it going? Wayne: I've been doing so so lately. And to be honest, I have not been trading much lately. Once I started working full time doing financial journalism... I found that I had a lot more time on my hands when I was screwing around in school then I do when I'm working eight or nine or sometimes 10 hours a day with three different jobs. I've kind of... most of my money, honestly, is in CDs right now, but I have a couple of speculative investments, Alibaba is my biggest position and a couple oil services stocks that are pretty beaten down that I feel like have been unjustly punished. I really don't, I'm literally... my Merrill Lynch account is probably 90 percent cash or CDs at the moment. Allen: That's really interesting, because you are in this market all the time. You're learning, you're hearing the noise, you're hearing, oh this stock went up and this stock went down instead of doing this instead of doing that, but you're not even inclined a little bit to jump in and say let me make a fortune off of this stuff. Wayne: Well, I feel like it's always a good time to buy and hold an S&P index fund as long as your timeframe is 10, 20, 30 years, something like that, but I honestly don't see anything out there, or very few things, that just smack me in the face and that they're under-priced or look cheap or undervalued. If I did I'd buy, but I honestly don't see much out there. I also think it's kind of just a weird time, after at 10 year old bull market and interest rates are so historically low... there's just a lot of screwy things going on and I'm not inclined, I'm not a professional investor, so I'm not inclined to always have my money all in all the time to have food on the table. So I'm just kind of on the sidelines until I see another opportunity... probably another 2008s not going to come along anytime soon, hopefully not at least, but at least something where I say, "Okay this looks like a no brainer". Allen: Okay. So you're totally value. You're into beaten down stuff like you said, and just wait until it comes back and you'll wait until it comes in. Wayne: I'm mostly value. I talk about in my book, I'm a firm believer in exploiting the psychology of the market. So I'm kind of an investor sentiment, contrarian investor as well. So contrarian investors, when the market's great and everyone is saying stocks are great and everything, that's not the time contrarian's like to buy things. So these days, everything seems like it's on cruise control, I like to buy when there's blood in the streets. And there hasn't been much blood in the streets for nearly a decade. Allen: Interesting. That's a different way of looking at it. Because a lot of people they always feel, yeah I have to be invested, I have to have my money in there, it goes up seven, eight percent a year, 10 percent a year so I need to take advantage of it. But you're saying that you don't need to do that. Wayne: Like I said, if you're trying to trade for a living, then you need to be trying to profit. But if you're trying to do it for retirement or like I do kind of as a hobby more than a profession, yeah, I mean... if I go to the mall and I'm walking around and I see something on sale that I like, I'll buy it. But I'm not the type of person that goes to the mall with 100 dollars and leaves with zero dollars every time, no matter what's there. So, I got the cash, if I see a stock that looks cheap, I will jump in there. But if not, I don't feel the need to always be hunting down things to buy. Allen: Interesting. So, now you mention investor sentiment, and psychology. Can you go into that a little bit? How would somebody find that out or how relevant have you found... obviously you rely on that, but how important is that? Wayne: Well, it's one of the more popular contrarian indicators of how a stock performs. In my experience generally, if you're trying to beat the market then you can't be doing what everybody else is doing, because by definition if you're doing what everybody else is doing you're not going to beat them at that game. So you need to be doing something different, you need to either be seeing something before everybody else sees it, or you need to be seeing it differently than everybody else sees it. Nowadays, with high frequency trading, institutional investors, in my personal experience I feel like it's extremely difficult for an average retail investor like myself, to be faster than the market. It's very, very difficult. Wayne: So I have to, my only window of opportunity, is identifying stocks where I see something differently than everybody else sees it. And it think one of the things that has tended to happen in this digital age is that people are impatient. So I think back in the day people would buy stocks, it would be common for people, even traders, to buy stocks and be willing to hold them for six weeks or six months or nine months or even a year or two, while their thesis plays out. But I think over time, just has society has sort of sped up and the digital age has sort of encouraged instant gratification, I think people don't even a lot of the time, they don't think nine months or 12 months down the road anymore. If something's not going to work today or tomorrow or next week, it's not even on their radar anymore. Wayne: So I think those are time where... I'll use Alibaba as an example. If you look at the growth numbers that Alibaba's putting up, without any knowledge of this trade war that's going on, if you just think about the economic growth rate in China, the fact that they have the billions of people, the fact that the government basically restricts international competitors from coming into the Chinese market, that company's been absolutely tearing it up. And they're into all the high tech fields that Amazon is into the US. And yet, the stock has been stagnant for a while now, and it's because investors can't see past this trade war. Wayne: And personally, I believe the trade war is coming to and end sooner rather than later, because it seems like it's hurting both the US and China, and I think Warren Buffet said this in his shareholder letter or an interview at the annual Berkshire investment meeting or something. But basically, when you have two rational actors, and there's a conclusion that's in the best interest of both of them, they're eventually going to make it there. And I don't know what the terms of the trade deal are going to be, and I don't know if it's coming next month or a year from now or whenever we get the election over with or whatever, but I believe a trade deal is coming at some point. And I'm personally hoping that completely shifts investor sentiment on Alibaba and that people start taking a closer look at those numbers. Allen: Okay. That's a cool way to... do you sell options while you're waiting or no? Wayne: I don't. And I figured you'd ask me about this, and I will say this, if I had more time on my hands slash wasn't so lazy, I definitely would be doing it. It's something where, after working a full week where I'm seven AM to five PM stocks and options and trading all day long, at the end of the work week I don't even want to look at my porfolio, I just want to relax. So yeah, if I lose my job at some point I'll definitely start selling options. Allen: All right. So then, what were some of the mistakes you alluded to earlier, that you think that ordinary, common, everyday individuals are making that they shouldn't. Or that you can protect them from, just letting them know. What do they need to know? Wayne: There's a lot. Maybe I should just answer just in terms of buying options. Because I think, and if you're preaching selling options then I like to think you'll probably be on board with all of this, but when I first started thinking about options and how if you buy options it basically gives you leverage where you can theoretically make really large returns on stocks that aren't super volatile, I thought well geeze this is the golden ticket and I thought that, well, I've had success buying stocks and holding and ultimately my thesis plays out and I've profited off of this. But, the time factor with options, the reason why it's smart to sell options and not buy them, is because you have to get two things right when you buy a stock - you have to get the stock right and you have to get the direction right. When you buy options, you have to get three things right - you have to get the stock right you have to get the direction right, and you have to get the timing right. Wayne: And I think most people are predisposed due to their personalities either to be too early or too late when it comes to timing their investment thesis. I tend to be too early, I tend to think things are going to happen before they actually end up happening. So what I found early on in trading options is like, oh, I'll use Alibaba again as an example, oh, I believe a resolution to this trade war is going to happen. If you had asked me in December when I thought it was going to happen, I would have definitely said I thought it would have happened by now. By June, I definitely would have thought there would have been a trade deal. Wayne: So maybe back in December, I would have thought, oh, there would have been a trade deal by June, I'll buy June call options out of the money on Alibaba and by the time June 15th rolls around I'll be good to go. Well, nothing's really changed about my thesis, I still think that a trade deal is going to be reached and Alibaba stock's going to go higher, but if I had bought those call options back in December I'd be out of luck. They would have been expired, completely worthless. So the shame in that is that your thesis can end up being right, but if you don't get the timing right, you're completely screwed and it doesn't even matter, it's as if your thesis was just completely wrong. Wayne: So I think that's what I would say to anyone looking to consider buying options rather than selling them, is you're basically playing... the stock market goes up over time, historically. So if you're just buying generic stocks you at least have kind of of advantage in the sense that the economy is growing. But if you buy options, call options or put options, you're at a tremendous disadvantage in the sense that you need something to happen just to break even on your trade. You're starting off in the hole because of the time value decay and I think people overestimate, they tend to have too much confidence in their ability to predict timing, and I think a lot of people get burned on options like that. Allen: It's like a ticking time bomb. It's just tick tick tick every day. Wayne: Absolutely. Allen: Cool, the one thing I wanted to mention to everybody watching your book, when I bought it I thought it was going to be basically your story. Which it is, it's your story. But I think that's about half of it. The other half is you actually talking about investing and all the jargon and what goes on in the stock market, basically from A to Z level. And I think that if somebody is new to trading or new to stocks or even options, if they pick it up and they read it they'll learn a lot more than normal. Allen: Because the stuff that you are talking about, I know for me it took me several years of not only just trading but watching CNBC a lot to understand all of the ways, how everything works together and how does this react to this. There's no guide for that, it takes a long time to understand, okay fed's going to cut, what is doveish, what is hawkish, what is doveish, they keep mentioning these words I don't know what that means. But in your book it covers everything, and I was like oh man I wish I had this so much sooner, it would have made so much sense. Wayne: It's, and I thought long and hard about how I wanted to approach the book at the time, because I feel like there is certainly a jargon to Wall Street, and it can be incredible intimidating if you're starting from scratch. And it was even to me. When you start out, it's like learning a new language. When you start out your first day of French class and people are speaking French, you're not going to know the first thing about what they're saying. So I tried to write the book that I would have wanted to read when I first started out. I remembered how intimidated I felt and I remembered how ignorant I was and I... obviously when you're first starting out trying to learn something new, you're going to be ignorant at first, everybody is. And you're going to make mistakes at first. Wayne: And so, I tried to tell my story, like you said I tried to tell my story by also tried to work in things that I learned. And yeah - a lot of your listeners that are advanced enough to be selling options and making profits, maybe they'll learn a thing or two from my book, but maybe they got past that point a long time ago. But, maybe they would like to read about my story. Wayne: But I think the perfect audience for that book is someone who is a bit intimidated to start out and they may not necessarily want to read a book written by someone who has 20 years of experience at a hedge fund. Maybe they just want to read a book about someone who was a random person, an average college student like they are or they were, and started from scratch the way they're starting from scratch, and know that like, yeah, it can work out. It won't be perfect, it'll be bumpy, but it can work out and here's the story that proves it. Allen: Yeah. And then, the other thing that you talk about is common sense. So, that's the title of the book, "Beating Wall Street with Common Sense". And it's, you mention it and it should be common, but it's not as common as you think. And I think that's part of what makes a market, me and you could look at the same thing and I'll be like, "I want to buy!" And you're like, "No, I'm going to sell it". So how do you say common sense? What is common sense in the stock market? Wayne: I think the best way to explain it is... and I've written about this for my job, is I think that unfortunately we are predisposed to... human nature has a lot of inherent biases, psychological biases, and when you're talking about hard earned money, your retirement savings or just a few thousand dollars that took you however many hours to earn, it's very emotional to see your account going up or down every day. And we have deep rooted, biological predispositions to avoid losing things that are valuable to us. So I think one of the most important lessons to learn for a new investor is to control your emotions. Because I guarantee you your emotions will almost always have you making the wrong decision in terms of trading, because you will be most fearful at the time you should be buying, and you will be most greedy at the time you should be selling. Wayne: And so, I think the common sense part to me is, the market may seem random sometimes. But the market is just a collection of individuals and institutions run by individuals, and the decisions they're making, they're basing those decisions on human logic. And so, when a stock is going up or down, on any given day those movements may be random but on a longer time frame there's a reason why a stock is going down or up. It may not be logical, it may not necessarily be correct, but the reason that it's going up or down is because people have certain beliefs about that stock, and they're buying it or selling it in response to that. Wayne: So if you kind of remove yourself from trying to think about why the stocks going up or down and you think more about why would somebody be buying or selling this stock right now, and think about it more from a psychological perspective, then that sort of gets you to where you can think, okay, well when is this person that's selling this stock... why is somebody selling Alibaba right now? Oh they're selling because they're worried about the trade war. Okay, that's why Alibaba stock is going down. Okay, well what can change that will make that person say, oh, well now I want to buy Alibaba stock? Then you think oh, well if the trade war comes to an end then that person may completely change their mind. Wayne: So that's not... you can dig as deep as you want to into financial metrics and numbers, and as a value investor at heart I'm a big fan of value investing metrics. But I think in terms of how the market moves, the market doesn't necessarily move because of a stock's price to earnings ratio. It moves because people have certain feelings or thoughts about a stock, and they're buying or selling it in response. So you really need to, as much as it's good to understand all the metrics, I would advise people to take a step back and think, whether I agree or disagree with what's happening, why is it happening? What are people thinking about this stock and what will change their minds at some point in the future? Allen: That's interesting you say that as a financial journalist, I want to go to that. Because one of my questions I was going to ask you is, as a journalist you have deadlines, and you have to write about certain stories, you have to put out a certain amount of content. And every day, the market might be up five points or might be up 15 point or oil drops one percent or two percent, there's always a headline. There's always an explanation, right? So how do these financial journalists come up with these thesises, of why something happened? Like you just said, we don't really know why it happened it could be some people think this way or some people that way, there's no survey, people are not telling everybody why they're doing things. But how do these journalists come up with these headlines and say, market moved, or this stock moved, or this happened because of this today. Wayne: I would like to think that good journalists, they don't write definitively. They say well, the S&P was up one percent today, and then I'll reach out to traders and be like, what are you hearing what are people saying, why do people believe that the market is up today? Or a lot of times, I'll reach out to economists or analysts and I'll get their opinions, and then when I write my story I won't present it as my opinion of what's happening, I'll present it as this is what traders are saying is happening, this is what economists are saying is happening, this is what analysts are saying is happening. And then, I may or may not draw a conclusion, oftentimes I will, but I don't present it as, all right I'm god's gift to earth, I've come to save the day, this is my journalistic opinion of what's happening. Wayne: I don't think that that's necessarily helpful to people, I think people want to know a collection of sources, or even just one source, if one analyst puts out a note saying this is what happened today, we may do a quick summary of that or whatever. But for Benzinga and US News, they don't so much care about my opinion. For a stock picking site like Motley Fool or Seeking Alpha, I mean they make that clear that that's more opinion, editorial pieces. But in terms of my journalist jobs, they actively don't want me putting my two cents in there. They want sources with expert experience that are going to be the root of all of our stories. Allen: Okay, cool. That makes sense. Because a lot of the times I'll read something, it'll be like market was up six percent today and it's because the fed announced that they're going to do this and this and this. Or China said this and this. And then the next day, it's going to be like oh the market is down five percent or two percent today because China did this and this and this. Wait a minute, you just used that same excuse yesterday for the market going up. So it's really hard as an individual to figure out, okay what is happening really? So the next question is, how does an individual trader or someone at home, how do they use the news? What would you suggest in that? Allen: So, a lot of the times, one of the things that we do is we teach people how to do backtesting, which is a piece of software where you go back in time and you only look at the chart, you only look at the stock. You don't know what's going on in their market, you don't know what the news is, you don't know the headlines or anything like that. So you don't have that noise basically, is what I call it, the noise of what's going on. You're only trading the chart, the stock, the numbers in front of you. And most of the time, people who do that, they actually do better with the backtesting than they do in real life trading, even though they're using the same plan or the same rules. So how would you suggest that we use the news or... and obviously you're not going to tell me never to listen to the news, because that's your job, but how do we take advantage of the news? Wayne: Well, if you're day trading, I think you need to think of the news as... every headline is a catalyst in the short term. If you're investing for the long term which is more of what I do, you used a good word, I think the news is mostly noise. I think it's good if you're a longer term investor to make sure you always keep abreast of what's going on with the stocks you own, because you don't want something coming out of left field. You don't want to just not pay attention for a week and then you come back and all of a sudden a week ago, there was an SEC investigation into your stock and it's down 40 percent. I think you need to always keep up with the news, but someone that, if I was advising someone that's not trading in the short term but more investing for the long term, I would say read the news but don't lose sleep over it. Wayne: If you read a headline that fundamentally changes your investment thesis, then you should think about maybe trading or adjusting your position. But some quarterly earnings report that wasn't very good but you still think the company has a great long term future ahead, that's just noise, honestly. Or the CEO steps down. Well, if the CEO is 88 years old with health problems, that's understandable, that doesn't change anything about your long term investing thesis. If the CEO steps down because he was was arrested by the Department of Justice or something, maybe that's a red flag. Wayne: I think most of the day to day news, this is coming from a journalist, we want to write about stocks that people are reading about, but it may seem like a certain company is in the headlines all the time, but that doesn't necessarily mean that more stuff is going on at that company, it just means people care about that company and that's what people want to read about. So I think the news is important, I don't think it's the end all be all in terms of investing, especially if you're a long term investor. Just think of it as part entertainment and part information and don't stress out too much unless something major changes with the company. Allen: Okay. And then, you mentioned that you do work, or you have done articles in the past for Motley Fool and Seeking Alpha. So I was wondering, you mentioned that you had just gotten out of college and you had started writing for those. What are the requirements for those? Because sometimes people read that and they take it as gospel or they take is as somebody who actually has done dozens and dozens of research, or years of research into something where their thesis is so airtight. Can anybody write for those or, how does that work? Wayne: It's been a while since I've written for either, but honestly back in the day there wasn't too much of a screening process. I think at the time I think you submitted sample writing and the editors just read it and decided whether or not it made sense to them. So I would absolutely take everything you read online that is recommendations to buy or sell stocks or trade in any capacity, I would take it all with a certain degree of skepticism. In fact I wrote a story for US News less than a month ago specifically about cannabis stocks, and about how there's a lot of misinformation out there online specifically about cannabis stocks. So you need to always... when you read something online, always in the back of your head need to understand the credibility of the source. Wayne: And people have their favorite news outlets and ones that they don't like. But regardless of which ones are your favorites, legitimate news outlets are not just going to straight up lie and deceive people, because they'll open themselves up to all kinds of lawsuits and whatnot. But, there are plenty of nefarious websites out there or message boards, or people who are self interested or even paid by the companies, that will straight up lie about what they believe about a company. And it may not even be that they're just straight up lying, it may be that they own shares of a stock and they're completely blind to a different way of looking at things because they're along that stock, so the company can do no wrong and everything's always rosy and obviously that's a very biased opinion. Wayne: So anytime you read someone telling you buy this stock or sell this stock or option or whatever, you always need to remember, who is this person, why are they saying this, what are their qualifications? Because you don't want to be blindly following anybody regardless of their qualifications, but people... certified analysts, people who have backgrounds in finance or backgrounds in journalism or whatever, they at least have some degree of experience. You're right, I wrote that book about my experience in the market, and my first professional writing gig was with Motley Fool. They like to think of it I think as more just like a crowd-sourced... like my articles weren't Motley Fool's opinion of the stock I was writing about, I was just one of hundreds of writers they have writing. So it's more of a platform than I was writing, speaking on behalf of Motley Fool. But yeah, people should be careful out there for sure. Allen: I mean I do remember, even during the dot com bubble, 1999 and 2000, at that point everybody was going gaga over, this time it's different, oh these dot coms are going to change the world. And a lot of the journalists were the ones that were banging on the drums the hardest. Yeah, everybody's got into this, you got to get into Lycos, you got to get into all these other sites, companies that went out of business, pets.com and all this stuff. It seems like those people that were those journalists, they disappeared for a while because nobody wanted to hear their things any more because everybody hated them. But now they're actually back, and I see them on the news and I see them on the different financial channels, and they're still giving advice as if they knew what they were talking about back then so now, why should I trust you now. Allen: Then the other thing is on the TV shows, the guys who come on from the different hedge funds or the money management companies or the banks and whatnot, a lot of them are basically, they're talking their own book. If they're the market maker or they're the company or they're the bank that's taking a certain company public, there's no way they're going to say anything negative about that company on air, or even that whole industry. Just going to be saying good stuff. And that's the thing, when we're watching that as an individual, we don't know where their conflict of interest is, we don't know what's going on behind the scenes. So I really appreciate you saying that. As a journalist it takes guts to come out and say that. Wayne: I'm... journalists... I feel like your title in life, your profession says something about your experience. But it doesn't make you infallible. Whether you're a journalist, a doctor, a lawyer, a teacher, everybody's just people. And people make mistakes. And in terms of accountability, I always thought this was crazy because I'm a big baseball fan, if I'm watching a baseball game on TV, if I'm watching the Red Sox and a batter comes up and steps in the batter's box and I don't know who that guy is, the first thing you show when you get in the batter's box is a line across the bottom of the screen showing all his statistics, how he's performed, what's his batting average, what's his on base percentage, how many home runs how many RBIs does he have. I don't understand how these people come on CNBC and all that shows up is their name or where they're from. And maybe they've been on CNBC 200 times, and they've made 200 stock picks, and they've gotten 190 of them wrong. You wouldn't know! Wayne: And it seems to me it would be so super easy to keep up with these analysts and journalists and pundits that are on TV and what stocks they pick and how often they're right, how often they're wrong. Show their name, and show the percentage of times in the past they've been right or wrong. Because I don't know about you, but if somebody's only been right 15 percent of the time they've been on CNBC talking about stocks, I probably am not going to really care what they have to say, honestly. Allen: Well you know the reason they don't do that is most of them are wrong a lot of the time, and nobody would watch it. Wayne: I know, that's true. If they were good at picking stocks they wouldn't be on CNBC. Allen: There are certain people like... I used to watch the show Fast Money. I still do, still record it and watch it from time to time, and they've had a couple guys on there that were regulars, that every time they say something it's like man, you have no clue what you're talking about, and I would go and say let me try and see if I can do the opposite of what that guy just said. Because he's such a... Wayne: That's a real thing. Allen: And yeah. A lot of people do that. Jim Cramer comes to mind, a lot of people are like I'm going to take the opposite side of him. Wayne: People give Cramer a hard time. Allen: It's tough for him to be him. But I do credit him in a sense, that there's a lot of time when the market is moving in big moves, and I really can't figure out why, I don't know what's going on. And the news doesn't help, the headlines don't help, but on his show, he actually gets into the meat of it sometimes because he's been in that world. So he'll be explaining it, "This happened and this happened so the hedge funds are thinking this and this, or that's why they're moving a lot of stock". Or "This happened overseas that was not reported and that's why such and such is happening", or something like that. And in the past he has helped me out in that sense, to make sense of what was going on. Wayne: I'm actually a big fan of Jim Cramer, I know his stocking picking track record is questionable. But what I think he's great at is I think he's great at educating people, I think he's great at entertaining people. I read a couple of his books when I was first learning about the market. I don't remember which ones, but I thought they were incredibly helpful. I think in another life he may have been a great teacher, because I think he has a talent for breaking things down simplistically. And again, he's been wrong plenty of times, we all have. So I get the criticism. But I think his show is good, I think his audience, there's a lot of inexperienced investors and traders in his audience and I think he helps educate them. And I'm all for education in any respect. Allen: I think part of it is his, he's set up for failure in a sense with his show. They want quick answers, if someone calls you up and says, "Okay Citi Bank, what do I do?" And if your only choices are buy or sell, you're probably going to be wrong. You can't go into a long term explanation and say, "Well they have this and this going on, so don't buy right, now wait for this to happen then you can buy, or sell if this happens", he doesn't get that chance to do that. Wayne: And I feel like I would not want to make 25 stock picks a day and be expected to get all 25 correct every day. That's pretty crazy, so I agree he's got a tough gig. But I daresay he gets paid very handsomely for it, so I can only have so much sympathy for him. Allen: So Wayne, what do you have going on right now for you? What's exciting you, what's happening in the future? Wayne: I am actually really enjoying life. That's probably lame to say. But I'm really happy with where I'm at right now. I've been telling myself at some point I want to write another book in the future, because I think it's been eight or nine years since I wrote my first one. But like I said I've got a full slate, I'm a staff writer for benzinga.com, those guys there are all really great to work with, I'm a regular contributor for US News and World Report, which again, my editor's awesome, the team there is awesome, and I've been contributing to Investor Place, and once again no complaints. They all treat me well and when I started out to write that book, it was hobby. Investing was a hobby for me, the stock market was a hobby. And I had no plans on being a professional journalist or writer or anything else. So I feel lucky every day that I'm one of the few people that was somehow able to finagle my way into having my hobby be my career at least for as long as it lasts. So, I'm just trying to enjoy myself and yeah, I'm having a blast. I have a blast every day. I wake up and get to write about the market. Allen: Do you go to the office, or you work from home? Wayne: I work from home, one of the many things I love about my situation. I live in Tampa Florida, and I can some afternoons if I'm not on a deadline, I sneak out and write by the swimming pool in the beautiful weather. So in terms of what I got going on, I don't really have any major plans in terms of projects or anything I'm working on, I'm just enjoying life. Allen: That's sweet. So if our listeners want to get a hold of you or ask you some questions, where can they reach you? Wayne: Well I have a blog, it's tradingcommonsense.com. And you can contact me through the blog, I try to be pretty good about getting back to people if you're patient for a day or two. My book is on Amazon, "Beating Wall Street with Common Sense". If you read it an it helps you or you were entertained or both, I'd love it if you drop me a review. I think it's only like two dollars or something, the book at this point. I just really want to get the message out there and yeah. I'm on US News and World Report, Benzinga, and Investor Place. Allen: Awesome. Then your website is tradingcommonsense.com? Wayne: Yep. Allen: Awesome, I appreciate you taking the time and it was informative to get behind the scenes with a real journalist and see how you guys think and how we should actually use that information. As well as common sense. So thank you so much. Wayne: I appreciate you having me on, it was good talking to you. Allen: Thank you Wayne. -- LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.

People literally ask me this one question ALL THE TIME… "Allen, how did come up with such a lucrative, safe, and easy way to trade?" I explain it all in my new book Passive Trading, get your free book here https://www.passivetrading.com/free-book! Option Genius was built with you...the individual trader, the breadwinner, the dreamer, the rock your family depends on ...in mind. Because we know what it takes to become a successful and profitable trader. And that's exactly what we help you do best. Get your $1 trial of Simon Says Options, our most conservative and profitable trading service here https://simonsaysoptions.com/stockslist-ss-trial-offer. -- To celebrate episode 50 I thought I would do something special. As you may know, I am writing a book to introduce the masses to the art of Passive Trading. And while the book is still being finished, I thought I would give you a sneak peek. So here is Chapter 1 of the book. But keep in mind this is in rough draft form. It still has to be edited. I am sharing it because, well, I am too excited not to. This episode answers the question, "What Is Passive Trading?". Can't wait for the book? Check out our Passive Trading Formula Free Webinar! (click here) -- LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.

People literally ask me this one question ALL THE TIME… "Allen, how did come up with such a lucrative, safe, and easy way to trade?" I explain it all in my new book Passive Trading, get your free book here https://www.passivetrading.com/free-book! Option Genius was built with you...the individual trader, the breadwinner, the dreamer, the rock your family depends on ...in mind. Because we know what it takes to become a successful and profitable trader. And that's exactly what we help you do best. Get your $1 trial of Simon Says Options, our most conservative and profitable trading service here https://simonsaysoptions.com/stockslist-ss-trial-offer. -- How do you go from being a struggling trader to making a killing with options? That's what I'm talking to Dan Hayden about. You see, Dan Hayden is one of our students in our new course that we have released, it's called the Passive Trading Formula. He's been in the course for a few months, and he wrote to me, and was very enthusiastic and was very happy with his results. When I read them, I really could not believe my eyes. I was shocked and I was like, "Man, I got to interview this guy. I got to figure out exactly what he did, how he did it, and I have to share that information with you guys." This episode is an interview with Dan Hayden and how he is learning. He was already an experienced trader. He knew a lot of strategies and everything, but it was just something in the course that helped him to take it to the next level. Then we're going to help him take it even more to the next level. If you are struggling, even if you've known a lot of strategies, even if you've done courses or whatever, but there is something still missing, I think this episode is something for you to listen to. Hopefully you'll get something out of it. Let's go ahead, let's cue the music and get with it. For more info on the program mentioned in this episode check out our Passive Trading Training HERE. Dan, why don't we get started and let me know a little bit about you. Who is Dan? Why do you trade options? Dan Hayden: Yeah, so my name is Dan. I'm in Upstate New York. I started trading options a long, long time ago just because I wanted to earn along with the normal earnings of the stock market and I wanted to complement my trading. Way back when, I don't know how, I think it was from my family, my grandfather, I was drawn to the stock market because it seemed like that's one of the ways in order to build wealth. Not to say that I had a lot of wealth, but it's another tool in your bag to complement your normal investing that you're doing with normal stocks. Allen Sama: Do you work full-time? Dan Hayden: That's when you and I got in touch with each other, because I was actually laid off. I had a awesome job, I was laid off, and I was at the point where I had to decide, "Shoot, do I just retire now? Do I go back into the workforce?" I had an awesome job and loved what I did, but I did travel a lot and it took a lot out of me. Therefore, it hampered my ability to just trade options because I was so busy. When I contacted you, you had a promotion going for your new program. Right now, I am consulting. I do some work on the side and I am trying to, with your services, and system, and help, and as well as people on your site trying to get back into it, trade, develop a strategy so that I can comfortably earn a couple of thousand dollars each month is my goal. Allen Sama: Yeah, I mean your story is very similar to a lot of the stories that we hear. People have been working really good jobs, they're making a decent amount of money, their family gets accustomed to a certain lifestyle. Then because of the economy, or the company, or something happens, and that job and that income is not there anymore, then the question is, "What do I do now?. [inaudible 00:04:01] go back into the workforce?" If I do, a lot of times it's hard to make the same income as you were making before in the same job. Dan Hayden: That's exactly right. Allen Sama: That supplement income has to come in [inaudible 00:04:14]. Then a lot of people come and say, "Okay, I have money that I have saved up over the years. How do I make the most of it?" I'm really excited that you're taking action. Dan Hayden: As we spoke, you and your program has given me the confidence to realize that. All of these services, and I get way too many in my emails, and they're provocative, they stimulate your interest and you're like, "Oh, wow. Maybe I should join this. Maybe I should do this." It was great because as I jumped in, it made me realize that I am blocking all of these other emails that come to my inbox, and I don't want to be clouded by they have the best new widget, and they have the best this and the best that. Because you've shown to me, and I have questioned you that these other places are making something very, very easy complicated. Your scanning, your reviewing of the three moving averages, and showing the trend makes it very, very simple to select the trades that are applicable. Allen Sama: There are people who are traders and then there are people who are expert marketers. Sometimes I envy them, some of the other companies. They're like, "Man they make hundreds of millions of dollars a year selling their services. I wish I could do that." Dan Hayden: Yeah. It's all what you want too. If you're a really good trader ... I always said, if you're a really good and you have something that's really, really a great program, why do you have to charge people right away? Let them get into it and then bill them. If you're so good at trading, why would you even offer this because you can just stay at home, do your trading and make your money there. Why do you have to offer these services? That's where the suspicion comes in. I just had one in about a year, a year and a half go subscribe to them. That's when the market turned. I realized that they're not doing anything different than I was doing in selecting the verticals to trade. Their losses were like my losses on my own. It's like, "I can I lose my money on my own without having to plunk down $750 or $1,000, or whatever." When you and I, when I applied to your program, it was perfect timing because I was down. I was hitting the chops because you never expect you to be laid off. Never in my life had I been laid off before. I'm like, "I had invested and been wise with my money all my life." I was at the point where I could say, "Well maybe I can just stay home and enjoy my family, and relax a little bit and start getting back into trading options." It was perfect timing because you lifted me up and got me back into trading. It's been fun. You have a very practical approach to selecting stocks to trade on. I also like your methodology of thinking. It's almost like a cycle. You could sell puts on really good stocks that you want to own and collect dividends, because I have another fund that I do that with. You own those stock and then you can trade covered calls on those. You can bring in, if you are executed and you do now own Verizon with a 5% or whatever it is dividend, and then you start selling covered calls on those so you have more income coming in. Then you're also doing your vertical spreads so you have additional income coming in. Technically there's three ways to create an income stream and it just made a lot of sense to me. Allen Sama: For our listeners, I just want to let you know that Dan is part of our Passive Trading Formula program, our course. That's what he keeps mentioning, the program. That's the one that he's in. Basically the idea behind that is I got to a point where in my own trading, where I didn't want to spend os much time watching the markets and watching my trades. You can do that in the beginning if you're just starting out with a little bit of money, you have to be a little bit more aggressive, so you have to take more risks. But eventually you get to the point where you're a little bit older or you [inaudible 00:08:47] a little bit more money, and you say, "I just want to do this in a passive way." The myth is that if you're not as actively engaged, you won't make as much money. Dan has proven that, what would you say, Dan? In the first four months of 2019 or the first five months, your paper trading account was up about 90,000? Dan Hayden: Yeah, but I do have to take a little bit of that back because some of that I was called out on and it impacted my results. But I think overall it was $45,000. Clearly ... Allen Sama: In about five months? Dan Hayden: Correct. Yes. Allen Sama: On what type of account? Which size? Dan Hayden: I did a paper trade account and I automatically, I think I put in $250,000 into it. Allen Sama: All right, that's a really sweet gain. How long do you think you spend every day on your trades? Dan Hayden: It's actually changed because from the beginning of the year, I think we got started in January, I had all the time in the world. Then I just got called for a contracting position, so I am working as a consultant with a company right now. I've pulled out a little bit more. I traded a lot for January, February, March, April. May has been a little bit less. I just have to figure out what my time scan is going to be so that I have the appropriate amount of time to be trading. Allen Sama: Do you think that the trades that we're doing require a lot of time for you? Dan Hayden: No. I think in and this is something that I want to learn more of and I asked on our call last week is that I want to be able to set automatic stops, which I know you're not a big of, but I want to get into a method of basically setting stops right when I set up the trade so that if I do have to fly somewhere, I don't have to be with a computer. Time wise, not at all. I started with my watchlist, you'll see two watchlists on the left, I started with mine and then I put yours in as well. I like yours better. Now I'm also just scanning through companies that I know there's no premium to paid on them. I don't even go to them, I just go to the next one. It almost seems like I'm trading the same stocks over and over again. [inaudible 00:11:32] less and less time. Allen Sama: Yeah, that happens. You develop some favorites and you like the way they're acting, you like the news that's coming out. Some of them might be on your list. You might trade them over and over again for two, three years. Eventually stuff will change, the stock will change, it'll change is behavior. Maybe a new competitor will pop up, or new CEO or whatever. Then it'll drop from your list. You're be like, "I don't want to trade that one any more. It's not acting the same way." That's why we focus on that watchlist and say, "These are the same companies I want to watch every month." Then you get a second feel, like a sixth sense that it's not acting properly. Let's not trade it this month. Let's just relax and watch it, and then we'll maybe look at it again next month. Dan Hayden: Absolutely. I hope more and more people start getting active in your site with interactions because I've learned of companies that I've never even heard of before that have very good premiums. It's been interesting picking up a stock here or a stock there that you can start to track as well. Allen Sama: That's why one of the reasons we have everybody put the homework inside the group itself, because that helps other people. Anytime somebody puts in a homework assignment and says, "Okay, these are the trades I've found that I really like." Other people could look at those and be like, "Whoa, that's a really good trade. I think I'm going to do that one." Dan Hayden: Exactly. [inaudible 00:13:03]. Allen Sama: There was a couple that I found from somebody that put them in and I'm like, "Oh, wow. I didn't even know this one particular stock was paying that much right now." I was like, "Wow." Dan Hayden: Exactly. Some with very rich premiums. That's what we're all looking for. I like it when people, when they communicate. I think people shouldn't be ashamed or nervous about asking questions because everybody is starting out at different levels so that when experienced people can support the young people, or the new people just starting out, it makes for great interaction and a great learning experience in your group. Allen Sama: What strategies have you decided to focus on? Dan Hayden: I have been doing some naked puts, some selling. Then I started with covered calls only because I have a couple of stocks that I have a lot of shares in and I said, "Okay, I want to build up some income," but I haven't focused on that too much. Most of it has been vertical spreads and selling puts. If you're on right now, I guess I'm a simple guy, I got to make it really easy for myself. What I'll show everybody is basically I'll go through here on the left-hand side, and I'll start with my watchlist and the charts. You'll see here that I have the three simple moving averages, the 20, 50 and 200. You can see that I ... You want to go with the market. If the market's up ... Allen Sama: On the screen you're showing your Thinkorswim paper trading account, right? Dan Hayden: Correct. Yes. Allen Sama: Yeah, okay. Dan Hayden: Like I said, I think I started with 250 and right now net liquidating would be 484. Clearly it's been pretty nice. I wish this was really money, but this has been really fun. As you've told me is to develop the confidence to basically start cash trading at the right time, because you did, you were very pointed to me, how long did it take me to learn my trade? Because I wanted to go right in, "Okay, hey. I've been pretty successful. Can I go right into cash now?" You said, "Give it some time, get more comfortable." It's true. Hey listen, we're going to lose some money, but if we win more than we lose, we're going to be way better off. I'll just scroll through and see which ones are either above the 20, 50 and 200, or below the 20, 50, 200. For example, ADM I'll say no because it's right in the middle and it's just not one to be traded. AGN looks like it's down, so that's something where you could actually do a call. This is Allergan and I think Allergan pays a good premium. What I do is I come right over to ... For people who are watching this, what I'll do is I set up basically almost three screens going at once. You can do this, and I know Allen, you did this on one of your calls, but you can do this by detaching this layout right there. I detached two layouts. All this is to do is just to make it simple and quick, so that I can scroll through, select ones. Then you see down here on the bottom left and if I'm scrolling all over the place, I apologize, but I have on my scratch pad basically the numbers that I want for my verticals in order to know that I'm at the 10% level. Right away, as easy as it sounds I always like, "Okay, I got to look. Is this 10%? Is this 10%?" As Allergen showed, it's down. I would look and say, "Okay, let me look at some calls." I'd go to a delta of typically we're working around the 10%, so I looked between seven and 14. Maybe got to the 14, which is 140. I go over to this page and look at the 140, it's /135. Okay and it says it's not available. I don't know why it wouldn't be, but maybe it's just uploading. Not available. Let's go to the next one. I would scroll down all of these. This one looks good too because it's above the three moving averages. However, it looks like it's dipping down a little bit for AIG. Got Applied Materials. This is how I would scroll, as you've educated me in looking for those that are either above or the below moving averages. Altria is a good one. I'm trying to think of some of the goods ones that I like. I can go here. Broadcom, AVGO, that's one that I have traded almost every month and is a pretty good one, so let's go to it. Allen Sama: In terms of the credit spreads or the layup spreads, do you follow the rules as laid out in the course or have you modified them? Dan Hayden: No, I pretty much follow your rules. I probably have gotten a little sloppy this month because for example, I was gone this week traveling and I wasn't on top of it as much as possible. I'll travel with my iPad and leave my computer at home, and my computer basically is the best one. iPads I have trouble basically executing the trade with Thinkorswim. Allen Sama: Oh, it's not the same thing? I know I do it on my phone, so I use their app on my phone. I've never done it on an iPad before. Dan Hayden: Yeah. I can't get used to the phone app either, but either one, I'm more comfortable with the MacBook. I'm just going to bring up Broadcom to see where we are at right now. Right now it's right in the middle of these three, so I would stay away from a trade right now. Allen Sama: About how many trades do you put on at a time? Dan Hayden: It all depends. It all depends on what's telling me to trade. Right now I have, there's a put. The puts are on Altria and AT&T, two high dividend players. If I own them, I'm good. If just take the premium in, I'm good and then I'll do it again next month. But right now I have NVDIA, Intuitive Surgical, Campbell, Arcadia, Pacific and Broadcom. You can see here, profit and loss. These are things about setting up automatic sells when they hit a certain point. Allen Sama: Let's say you got about one, two, three, four, five, six, seven, eight, nine. Nine trades on. Dan Hayden: Yup. One, two, three, four, nine. Allen Sama: In addition to your covered calls. Dan Hayden: Covered calls, I've stopped doing those. I used to do the covered calls on these stocks right here, but I was ... The covered calls to me, I'll get into those later. With Alexion, I have 1,000 shares of that. That's the one I really wanted to stay focused in on. But I've put that on the side burner. I'm just doing the puts in the vertical spreads. Allen Sama: The thing is, with the different strategies, you can take and see what the market is giving you, and you can manipulate. If you're in a bull market, naked puts, they do awesome, put spreads do awesome. Covered calls, if you're not in the stock, if you don't own the stock and you just want to get out every time, then they work really well. In a sideways market, I love covered calls. Dan Hayden: Which right now, would you consider us being in a sideway market? We're up one day, down the next, up one day. I would think ... Allen Sama: We're still in a pretty good bull market in a sense where we're a 1% or 2% away from the all-time highs. I would say we're still bullish, especially if the fed does cut rates again. We have all this other news going on, all the noise that goes on in the market. But for the last, I don't know how many years, the bull market has been there because the fed had rates so low. I think that if they start cutting rates again, that's just going to signal to the market again that [inaudible 00:21:15] just take it up higher even more. In my opinion, yeah, it's a pretty good bull market. Yeah, you can still make money with non-directional trades, but overall I think we're ... I like this type of market where it's going higher, but it's doing it slowing. We're not like shooting, shooting up higher. Not too much volatility for our premium to be good. We can make our 10% on our spreads and not have to worry about too much movement. Dan Hayden: That might be help too, is to say, in a bull market, a slow rising bull market, it's best to trade the puts, covered calls. What would be the best vehicles in select markets, that might be helpful too. For me, whatever spits out as I scroll though, and I try to scroll through on Monday morning to determine what I'm purchasing for that next ... What don't we try 25 to 35 days as the best timeframe? Or a little bit longer. For example, Allen, SPX right now, it's above the three moving averages. Technically this looks like it could be a trade. This is the vertical. Allen Sama: I've noticed that [inaudible 00:22:36] here, when you're looking for trades you're looking at the monthly ones. But on some of your trades that you already have on, you've done the weeklys. Dan Hayden: Yeah. I try to do it, I think you said the sweet spot is 30 to 40 days out, so I'll try to go 30 to 40 days out. I think those were set last week. That's typically why. Right here, I would look at this 35. If I'm wrong, you let me know. With SPX above the three moving averages, I look at the 35 and look over here on the puts. I would look at is the delta around ... What do you like? You like deltas around 20? Allen Sama: It depends on how many days. I would like to get it as low as possible, but if I'm going in there about 30 days or less, then the delta increases probably about 20. If I'm at 35, I might try to get a 15. But really, we're trying to make 10%, so I'd like to get as far away from the money but still be able to have a potential 10%. The delta in that case, I use it more as a guideline, not as a hard and fast rule that this is the delta I'm going [inaudible 00:23:45]. Dan Hayden: Just to give anybody ideas, I have it set up so you have the singles on one page, so I can automatically go to what I was looking at, which was the SPX. I'll go down and I'll look for between a 10 anda 20 delta that brings in good returns. I would go down here, let's say, to a 15 delta, 35 days out. It's somewhere around 27.20. Then on this next page, I already have the verticals pulled up, so I can automatically look and say for the 15 deltas, 27.70, I can almost right away go to 27.20, so 27.20. I am doing 27.20, 27.25, which would be right here. I wish I could show you exactly what the bid-ask spread was, but it could be because of the bandwidth, but I'd be looking at this area. You've got plenty of open interest. It's the SPX, so you can expect that. I would be looking in this area between a 10 delta and a 15 delta. Then I'd automatically go over to my, this is up here, so I automatically go over to my scratch pad to make sure that whatever I am trading, I'm making 10% on that money. Allen Sama: That's why I think you need the computer instead of the iPad, because you have so many screens open. Dan Hayden: That's probably it. But as you get going, I'll minimize these screens for the verticals, and I'll minimize the screen for the singles so that I'm actually overlaying each one. Right away I can go from one to the other, to the other and say, "Yup, that's a trade." If not, then I go right back over here, click this and go to the next stock. If you have a big screen and you're at a desk, this is easy to do. Allen Sama: Yeah, [inaudible 00:25:47]. Dan Hayden: But I'm lazy so I carry around a laptop and don't want to hook it into an office. I typically sit on my front porch, and make the trades and make my notes. Allen Sama: That sounds pretty sweet, man. Making money on the porch. Dan Hayden: I overlook one of the Finger Lakes, so you got to take advantage of that too. Allen Sama: Okay, so you told me that your goal was to make about a couple thousand dollars a month. Dan Hayden: Correct. Allen Sama: Do you think you've been doing this for what about six, five months now? Dan Hayden: Correct, yes. Allen Sama: Do you think you have the confidence to start going real money? Dan Hayden: I do. I do. I have confidence and I have confidence in the selection criteria. I asked you, I said, "This is way too simple. This doesn't make sense." You can get pushed up and above, but you use your rules to get in and get out. You can minimize the losses because in this crazy market, anything can happen. Macroeconomically anything can happen that can impact these markets quickly. We can get pulled around. I've seen in. Where I get in, it makes sense. [inaudible 00:27:04] trading below or above the three moving averages, and then all of a sudden the market goes crazy and does something opposite. I've seen it right at the beginning of this year. That's the only thing that I have to build more confidence on, and I'm working with the Thinkorswim platform is that when I do make the trades, I am going to start setting stop orders so that if it hits a particular level of a loss, I'm out. If it hits a particular level of a gain, for example, at five cents, 10 cents, I'm just out. I move out, Thinkorswim has a pretty good commission rate so it's not costing me a lot to get out. At five cents I think it's free, and then I move on to the next trade. Yeah, the confidence is there. Do I get nervous that I don't want to lose money? Absolutely. But you got to expect that if you have good rules, any money that you do lose should and could be minimized. That's the one thing that I have to integrate into my trading because hey listen, I had the time to be at the computer every single day for an hour, and check on my trades. But as recently, I really haven't because I've been flying around and meeting up with these companies. That's why I want to get good with setting up automatic stops. Allen Sama: It's about an hour that you said, you spend about an hour looking at your trades when you can? Dan Hayden: Yeah. It doesn't have to be every day, but probably an hour throughout the week. Especially if there's some newsworthy events happening, you want to be on there definitely during that day. But it's probably an hour a couple of times a week. That's only, that's like managing seven trades or so, something like that. It's not a lot of trades, not a lot of time, but typical to when you pick up this laptop or computer, I get carried away and I start looking for some other good dividend playing stocks [inaudible 00:29:08], because I love the scans. Here's one that I did looking for dividends, high dividend plays and what I could maybe sell puts on. I'll do certain other things while I am looking at the trades that I have already open to try to create other opportunity. Allen Sama: [inaudible 00:29:30] you just love this stuff. You're just into it. Dan Hayden: I do. I do love it. Allen Sama: If you didn't get sidetracked, it would be so easy. Just log in, check it out and I'm out. Dan Hayden: Absolutely. People go on Facebook and all this stuff. It's great to keep up with that at stuff, but I enjoy looking at the stocks, the stock market and just trying to pull a little bit from the market into my accounts. Allen Sama: Yup, yup, yup. Okay, you've been ... All right, what else? I had a couple questions for you in my mind. They just slipped. Dan Hayden: See because you're probably looking at your screens right now. Allen Sama: No, I'm looking at yours. I'm at home. I didn't even make it to the office today, so I'm just looking at the laptop. All I see is your stuff. Wait it's funny though, you don't usually Analyze tab. I use that one almost exclusively. Dan Hayden: Yeah. Before I got with your service, I used to use it all the time because I used to do these butterflies, and things that I picked up from all of these services that were trying to get your money. So I did use this a lot to analyze broken wing butterflies, and we used to do iron condors with butterflies in the middle to bring the iron condor up higher. I'm not the smartest guy at this, but I was learning more and more about this as I started to throw on another trade, either to save things or to increase my profit. Maybe it's something I should be using more. Do you use it just to see about your profitability, and when it does break even and start losing? Allen Sama: I like putting the lines on the chart, but you know how it says they are add simulated trades? Dan Hayden: Yup. Allen Sama: I'll just look at that one and that pops up the option chain as well. I'll go down to a specific delta. You know how you were looking at should I do this one, or should I do this spread, or should I do this spread? Dan Hayden: Yup. Allen Sama: Then I'll just pop it up, I'll just pick one, do it as a vertical and then it'll have the numbers down at the bottom. So it'll be like, "Okay, so the 100, 105, he's giving me 50 cents and then the 105, 110 is giving me 25 cents." I can have two or three perspective trades on the screen. Then I'll just leave it there. Sometimes I'll do a trade and there is certain stocks, like I know IBM. It doesn't have a lot of premium, but it's a very slow moving stock. I like to trade it, but you have to get in really early. Sometimes you have to get in 40 days or 45 days to be able to get decent premium amount. Dan Hayden: [inaudible 00:32:04] decent premium? Allen Sama: Yeah, in order to get a decent return. I'll go and I'll check it, and sometimes I'll leave it there. Or some other stock that maybe on the chart looks really good, but it's gone up too much or gone down too much. Right now, I'll put in a trade. I'm like, "Oh man, I really want to do this trade but it's only giving me 9%. Oh, gee. Okay." I'll just leave it there in the analyze tab, and then maybe two or three days later or a week from now, I'll come back and I'll look at it again when I'm going through my list, and I'll be like, "Oh okay, this one now, it's giving me 10 and a half percent. Okay, I can do it," because it pulled back or it moved around a little bit. It just stays there. Then if it doesn't work out, then you could just exit out and delete it, so it's not a big deal. Dan Hayden: Now is that in our trading videos? Do you have a session on that? Allen Sama: No, I don't think so. That's just something I picked up myself. Dan Hayden: Yeah, that'd be cool to go in your brain and see how you use that function with the add simulator trades, because when I went into analyze, I would always go to the risk profile. It's interesting how you use the add simulator trade. Allen Sama: I like the risk profile too, just to tell me what is exactly the probability and then I like to put it on the chart. I like to put my break-even line on the chart and just see it. I know your fooling yourself because you think, "Oh, that's so far away. That's never going to make it." You're fooling yourself, but I just like the way that looked. Dan Hayden: No, that would be cool for one of your programs just to say something that, "This is how I approach this in monitoring whether I should get into a trade or not get into a trade." Allen Sama: Yeah, so we can do that. We'll do that. Let's do that on the next coaching call. I'll go in ahead and go through the screen and we'll do several of those. One thing I also wanted to mention, you got your scratch pad. That's really cool. But for me, to keep it simple, if I'm doing a five point spread, I'm looking for 50 cents. If I'm doing a two and a half point spread, I'm looking for 25 cents. Dan Hayden: Exactly. That's typicalLy how it [inaudible 00:34:14], $1 spread, you're looking at a buck. Allen Sama: That's a little bit more than 10%, it's like 11% if you get exactly that. You can say, "Okay, I can go down a penny or two. I'm okay with that." Dan Hayden: Yup. You got some flexibility. Yeah. You know what else I noticed too, Allen, is when I go to set up a trade and it's a good trade, but it just misses the mark for example if it's a dollar spread and it comes in at 0.08 cents, a lot of times I'll put in 0.09 and leave for the day, and it hits. Throughout the day, something happens. Maybe the stock changes a little, the prices changes a little bit, but I'm like, "I'm close enough where I'm basically at 10%, but I'm going to set the 10% and walk away." I've had more and more stocks, it fills while you're never there with a good premium. Allen Sama: That's a good tip. Dan Hayden: Yeah, that's something else that I've done a couple of times. Hey, this is the time that you experiment a little bit. You don't want to nick your percentages, but you also don't want to miss out on a good trade because there's some weeks where it's tough to find a good trade. Even the consistent one's just not offering a premium for some reason. Allen Sama: Yeah. It goes through different ups and cycles. When you have earnings, it's harder to find a good trade. Sometimes you have to go to ETFs or something. But what you just mentioned, putting in a trade like, "I really love it and it's really close. Let me try it." It's not going to hurt you. You put that on and sometimes because of the way the option premiums are priced, maybe a large order comes in, or the stock moves and down a little bit, and the premium just move more than they should sometimes and you get filled on those. Dan Hayden: Yeah, that's been interesting. You made it really practical, how to approach it. Also, I will say that there's one gentleman who put on the site Excel spreadsheets, which I downloaded and they're awesome. He has a really great profitability chart, so you can put the numbers in and it'll calculate it out automatically. I can't remember the name of the gentleman that did it, but really nice addition in your site. Allen Sama: If somebody was thinking about joining the course, the Passive Trading course, what would you say to them? Dan Hayden: I would say people can hear what they want to hear, but there's so much pollution out there from these other services. You teach a person to fish so he can feed for a lifetime, and that's what I wanted. I don't want somebody to basically take the steering wheel and drive the car. I want you to teach me how to drive the car so that I don't have to rely on other people. I would absolutely recommend it. There's as much risk as you want in it, but you control your own destiny. That's the best place to be in because I don't want to send my $1,000 to this service and they're the ones picking out the trades, when in all reality you simplified it to such a fashion that you can join this service, but then you can learn it and move on if you want. Hopefully they stay with you and they believe in you because I believe in you right now. You've simplified something that quite honestly as you first join, can be way overwhelming. But you made it simple, you've allowed for three different ways to have extra streams of income, and you teach us to do it. That's the best thing that you can ask for. Yes, I would definitely recommend people to join. Allen Sama: That's funny too because you said you've studied iron condors, you've studied broken wing butterflies, which is a pretty advanced trade. But you're like, "I want to go back to this stuff that actually keeps working. I'm not going to go so advanced. I want to try to make it simple so that it doesn't take a lot of time, and you don't ave to monitor it so much and is just a lot less stressful," I think. Dan Hayden: It absolutely is because the more things you stop placing on, the more you do have to watch the monitor, and the more you have to react and do other things to fix that broken wing butterfly. The only reason, Allen, I got into broken wing butterflies is because I paid a service to basically teach me how to do broken wing butterflies. It's probably a really good service, but quite frankly, it's way too complicated. It's not necessary. A vertical spread, if you get good at it, it can be boring, over and over, and over again. But if it's boring and your account is growing, that's a good thing. Allen Sama: Yeah. That's how we designed it. We want it to be boring, we want it to be passive so that we can actually go and ... Dan Hayden: Enjoy life. Allen Sama: ... spend time doing what we want to do. Yeah. There are people that want to be on the screen all day checking their stock, and checking their trades and what not. There's definitely a place for that. In the beginning, I tried it that way. To me, the more complicated it got, the more I realized that maybe I'm not the smartest guy in the room, but there is so many extra things that I can miss. I'm like, "I'm just a normal person. This is getting too complicated for me. Let's just tone it down. Let's take something that works, I know it works." What I love with you is you've put in the time, you've put on the trades. How many trades have you put on since you started paper trading? Just ballpark. 100? 200? 500? Dan Hayden: No. It's not that many. It's probably a little over 100. Allen Sama: Okay, so 100 over five months. So 20 a month, that's decent. You were practicing, you're gaining confidence, you're learning how you like to set it up with the three screens, and how to monitor it, and set up your charts and all that stuff. That takes a little bit of time, but now I think that you're at the point where, "Hey, I turned 250 into 484." Dan Hayden: Right. Right Allen Sama: That's [inaudible 00:40:29] double. That's really good. In five months, holy cow. Now it's time for you to now slowly, slowly transition, I think, into the real money. Maybe you pick one ... Or maybe you start with a small amount of your capital, whatever amount. You start with a little bit. Maybe let's do three spreads and two covered calls a month, or two puts and three spreads, or something like that. Dan Hayden: Exactly. Allen Sama: Let it out. Dan Hayden: With a lot less contracts. Allen Sama: Oh yeah. Yeah, of course. Yeah, [inaudible 00:41:04]. Dan Hayden: Here I'll do 10 contracts every single time. There, real money, I'll probably do between one and five contracts. Allen Sama: Whatever the amount you have to work with, [inaudible 00:41:18]. If you have 10,000 to work with, okay, I'll do $1,000 in each one or something like that. Dan Hayden: Each one, exactly. Proper money management. Yeah, [inaudible 00:41:28]. Allen Sama: The contracts doesn't really matter, but the fact that you've almost doubled it in five months means if you were working with a $10,000 account, you would have done the same trades. You would have been almost the same thing. The numbers, you just add zeros at the end for more money. That's what I love too that you can start out small, do the same exact trade. You don't need $8,000 to do a trade. [inaudible 00:41:48] trade, just add zeros to it. Dan Hayden: Yup. I have a Roth account and I keep saying, "I want to grow that Roth account." I think what I've decided is that with the Roth account, I'm going to sell puts. Then if it's executed and I own those shares, I'll sell covered calls really close to the money. Basically just keep transferring the stock. Take big premium by selling very close to the money. If it hits, okay, I'm back into cash. Now I'll sell that put again really close to the money, take a good premium. If it hits, I own the stock and now I'll sell covered calls. I just want to grow that Roth IRA money so that there's a significant amount there that's all tax free. I've segmented it there, and then start with my cash account in selling verticals. Verticals is what ... That's the primary breadwinner I should say. Then I have an account that has a company with a significant amount of shares, and I'm just going to sell covered calls on that one. It's like three different accounts with three different principles. Allen Sama: The company that you just spoke about, I believe you told us what it was earlier. Why are you in that one? I'm just curious. Dan Hayden: I worked for them, so I accumulated shares over the years. Allen Sama: Okay, that makes sense. Are you allowed to sell those if you had to? Dan Hayden: Yeah, because I don't work for them any longer. Allen Sama: I see. Okay, cool. Dan Hayden: Part of me thinks about selling them, part to them thinks about just taking an income each months. It's a volatile stock, that's the problem. It can be tough trading, but if you take chunks and you sell covered calls at different levels, like one close to the money where I might lose this, but okay, so I just cashed in on 250 shares, I sell a little bit further out so that I still own those shares, and then 250 I sell a little higher. I don't bring as much premium in, but I know I'm keeping the shares. Allen Sama: That's the thing if you work for a company, you have a little bit of a inside track to see how the company is doing. Are they hiring more people? Are they letting people off? If they're letting a lot of people off, okay there's something going on. If they're hiring more people, if they're expanding, if they're spending more money on marketing. You hear all that news that as a trader ourselves, we might not be privy to all of that unless we really dig into the information. Dan Hayden: Correct. Allen Sama: To be able to trade a stock that you own because you work there, I think that's a big leg up. Dan Hayden: Yeah. Allen Sama: Even now I'm sure you still have friends and people that work there that you know. You can stay on top of that information. Dan Hayden: Yeah, in some instances. But then again, it goes to show that the market will do what the market wants to do because I've been around where we've had awesome quarters and we got hit by the market. We lose. Nothing's a sure thing. I remember those days where we'd have a blowout quarter and we were down 10 points. It made no sense at all. Yeah, it's good to be affiliated with it, but it's also they can throw you curve balls and make it very frustrating too. [inaudible 00:45:17] go in thinking about vertical spreads straight up and then whatever else you start accumulating through your puts, sell covered calls on, have a method to start creating your stream of income in three different ways. The way you trained us, I think is a beautiful way to begin growing your stock accounts and making money passively. Allen Sama: Yeah, and thank you for saying that. One of my goals is the stocks that I buy, I want to get them for free. I want to get so much money back from them that I didn't pay for them. I got my money back. Then you're playing with the house money, and whatever happens happens. I'm okay because I got my money back. Dan Hayden: Yeah, that's exactly it. That's why I think young people should be doing this as quickly as possible because they have the ability to do that, and doing it over and over again, taking in the premium which reduces the cost of the stock. Then you're saying, "Hey, it doesn't really matter because I bought this at this, I've taken this much in, and basically I own the stock for free." Allen Sama: Then it doesn't matter if it goes down, it goes up. You're getting a dividend, you're like, "Okay, I'm happy." Dan Hayden: Exactly. Yeah. Yup, absolutely. You still have the shares, so do whatever you want with the shares. Allen Sama: What would you say is the biggest thing that led to your success? Dan Hayden: Well success is ... Allen Sama: Well I know you're being humble but seriously, but seriously, to double [inaudible 00:46:43], to double your money in five months, I've never done that. You're doing something different, you're doing something special. What do you think caused it? Dan Hayden: For me, it was just finding out ... I needed a method to ... I just wanted a recipe. Give me something that is easy, that I can select stocks that makes sense, and then doing it. It was basically providing the methodology, which I have because of these three simple moving averages, and then executing. That's it. It's not rocket science. This is paper traded, so you might get a little bit over ambitious with one trade over the other because it's not your money, but just to me, the most important thing was developing that method, having confidence in knowing if it's above or below that three moving averages, and the stock's trading up, and so is the marketplace trading up, it's a good sign that this is going to be a good stock to trade. Now let's look at what the returns can be, let's look at the verticals, let's look at the individuals to find the right delta. Having that method to basically weed out what you should be trading. Allen Sama: Yeah, a lot of people, when they first hear about it they're like, "It can't be this easy." Then you said the same thing. Dan Hayden: I did. Yup, I wrote to you and I said, "There's got to be something else I have to throw in." You see my screen, this is from the old days where I'd be looking at volatility, standard deviations, [inaudible 00:48:19]. I tried to come up with the best technical analysis and seeing if the stock anticipated to go up, down, what. You don't need this. This was the olden days where I had all this stuff at the bottom and I've just never turned it off. You could take out all that noise, and basically just look at the charts and have confidence in what you do. You're going to have curveballs thrown at you every so often, but be ready for those curve balls, and get out with minimum losses and you'll come out way ahead. Allen Sama: I think that's where asset allocation comes into play, especially with the different strategies. If you're only doing spreads and you're only doing put spreads because the market's going up, but then it drops, you're behind an 8-ball, you're in trouble. But if you're doing a little bit in the puts, a little bit in the calls, a little bit in the spreads, a little bit in something else, then you can weather the storm. It's not one trade will be doing good, the other trade will be not so good. The way we talk about it is, every month has the potential possibility of being a very good month. If you have a good month, and a good month, and a good month, and a good month, but then you have a bad month, which is going to happen, if you do it right then the good months will overcome the bad months. Dan Hayden: Absolutely. Yup, yup. Allen Sama: In the long-run, if you look at it a year, two years, three years down the road, you'll be like, "Okay, I'm up a lot. This really [inaudible 00:49:50]." Dan Hayden: Exactly. [inaudible 00:49:51]. Allen Sama: Some people look at it and say, "I tried it for a month and I lost money on two of my six trades, so this sucks." I was like, "Well, that's the way it works." Dan Hayden: Exactly. Even the professionals lose. You just have to know how to minimize those losses, and that's the biggest thing. That's something that I have to do. You can see some of these losses that I have to be more proactive in setting up my losses when I set up my trades. The minute that trade hits, I got to go in and say, "Okay, I got to get out when it's profit of this or a loss of that." That's all in your ... I don't have my notes with me, but it's all in your notes for these losses. I brought up this screen here that shows my puts. I have Altria, and I'm okay. I'm okay if own this. My fear when I put a put on, like you just talked about earlier, is suppose something happens macroeconomically between they decide not to lower rates, Iran does something, China does something and it drops heavy like Altria goes below that 47.50 put. Well now I just bought it at 47.50, but it's at 45. That's a hurt. The only thing you can do to get away from that because you're fully exposed when you do this, is just to start selling calls close to the money to say, "I either get out of the Altria and take a minimal loss, or I'm good because I believe it's going to be coming back, and plus I'm making my dividends." We talked about fear, how as a trader, you're fearful of losing money. Well I'm fearful of having to buy Altria if the market drops hard, or AT&T, the market drops hards, and I'm buying it higher than the market's actually at. That's a fear that I have. But if you stay on the sidelines, you don't do it, you don't get your dividends, you don't get the opportunity to buy these stocks at a discounted rate. Allen Sama: That's why we do the paper trading too, because actually do it for a few months and you'll get a better idea of how many times did I have to buy the stock? I did it five times, I never even came close. Maybe this fear is a little bit unwarranted. So maybe if I do it with real money, and I do it for a year, two years, three years, maybe I'll get the stock once or twice. That's why with the paper trading, I'll advise everybody like, "Get in trouble. Put some trades on that you wouldn't to get in trouble with it, and so that you can see, how do I navigate my way out of trouble?" Dan Hayden: How does it respond, exactly. Yup, yup. Allen Sama: With Altria and AT&T, okay, maybe I'll sell at the money put. Dan Hayden: Yup, just to see what happens. Allen Sama: Just to see, okay, I have to buy the put at this price. What do I do now? Oh, I bought this stock. Okay, how do I get out of that? Dan Hayden: The worst time to trade is when you're in fear, you have something going against you and you're nervous. That's the worst time to place that reactive trade. Allen Sama: Exactly, exactly. A lot of this stuff is we're dealing with stocks as well, so if you own the stock, there's a great chance the thing will rally in the next 10 years. Anyway, if you're only trading options then you lose, and the month expires, then that's it. That loss is yours, you got to eat it. You got to make it up next month, the next month. But with the stock, you can always come back. Is there anything else you want to share? Dan Hayden: No, I greatly appreciate what you're doing in helping others. I really have learned a lot from you. I do, I do I have the confidence again in getting into option trading and having a good plan for doing that option trading. So thank you. Allen Sama: Great, great. Yeah, I'm excited to see how you take it and how far you go from here because you got the foundations down, you got some basics, and now it's time to start doing it. Dan Hayden: Yeah, well it's funny too because now that I'm working with this company in doing consulting with them, I have income coming in so it's like, "Okay, well I don't have to bring in income with the option trading as much." That psyche comes into play where, "Okay, when I wasn't working I said Okay, I got to make sure that start bringing in X number of dollars a month." That's why I'm not, I shouldn't say as serious because I do look at the charts and all that stuff. I track it probably a couple times a week, but in January, February, March, when I wasn't working for any other company, I was looking at it, looking at opportunities every day, and I was very, very religious about it. It is that psyche, but all I can recommend to everybody is even if you have a full-time job just flat out, 15 minutes, 20 minutes, an hour if you can just to monitor the trades that you have on, but also to look at new opportunities elsewhere. But get dedicated almost like I have a system now by scanning, by reviewing the chart, by reviewing the delta and by reviewing the return. I have a method, and that way have a method each night, each day to give yourself a couple of minutes to look at the trades and to scan so that it becomes second nature. That's the best thing to do. Allen Sama: Yeah, definitely. Like you said with the mindset, when you don't have any income coming in and you have to make your nut, maybe $5,000, $10,000 a month, that's when the stress really this you from the trading. It's like, "Oh my God, this trade has to work. It has to work." That's when you mess up. When you have even a little bit of income coming in and you're not totally dependent on your trades, then it allows you to actually trade better. Dan Hayden: That's exactly right. Allen Sama: That's very helpful especially when people are getting started. I've seen some people where they jump the gun too fast and they, "I want to be a full-time trader," and they jump to fast into it, and they're like, "I have to make money every month." We had one student who did that and the stress just got to him. He placed trades that he shouldn't have and then he lost. On a mental standpoint it just sends you for a tailspin. Dan Hayden: Did he need that money or was this supplementing his income? Allen Sama: No, he had quit his job to trade full-time. He over traded I believe, and then he lost some money. Now you have to cut back on your lifestyle when that happens. It's not something that ... He has the skills. He'll be back, I'm sure he'll be back. But it hurts in your mind. You feel really down about it. That's why I love it that you're starting and you're saying, "Hey, my goal is to make $2,000 a month." Well okay, if I can make 3%, 5% a month doing something pretty safe, $2,000 a month, I don't need to have a big ton of money. I can put little bit of money, make my goal, and then once you get to that goal it's $2,000 and you say, "Okay, no my goal is 3,000. Now my goal is 4,000." Then eventually you can actually go and say, "All right. I don't need the consulting anymore. I'll just do this." If you love it, you go do the consulting too. It's up to you, your choice. Dan Hayden: This isn't something where your going to make a ton of money tomorrow. It's not the day trading, it's not that heavy, it's not that risky type of a trade. This is something where you get good at it and you bringing in a little bit each month. Then like you just said, you bring a little bit each month, you get good at what you're doing, and then you get the confidence to say, "Okay, I'm going to now trade two contracts. I'm going to trade three contracts." Because if you quit your job and you're getting stressed out because you're losing money, then you must be risking too much because you shouldn't be risking too much. You should have proper money management. This is my own opinion, but you shouldn't have that stress, just like you shouldn't be like, "Hey, I am so good at this because I've had all these ... " I don't consider myself good, I consider myself that I've got a new training system so I consider myself a little bit more confident. But I'm not good in any means. But you shouldn't take chances. This isn't gambling. This is proper investing and trying to create a passive income. That's all it is, is a passive income. Allen Sama: As you venture more into the real money world, you know that I'm always here. You can email me, we could do the coaching calls, or the Facebook group, or the community, whatever. You know that there is some support there as well. Dan Hayden: Absolutely. Yeah, no. You've gotten back to me, you've slapped me on the hand a couple times. Even going onto your site, I wish there was a little bit more interaction between the members because that's where I learned and I picked up that Excel spreadsheet from your one member. I love reading it because it's like, "Okay, I want to learn more. I always want to keep learning." But yeah, I felt, "Hey, I've got these trades. I've really done pretty well. Should I start doing cash trades now?" You said, "How long did it take you to learn your skill? Your lifelong skill?" We said, "30 years." You say, "Well, it's going to take you a little bit longer to get comfortable with it with the practice trading." Allen Sama: Yeah, [inaudible 00:59:35]. Dan Hayden: Yeah, yeah. The support's there, and you do get right back to it relatively quickly. I think it's on our side now where we have to start interacting a little bit more, coming up with, "Hey, this was successful to me, this is what I was looking for, this is what I got, this didn't work out for me, what should I have done differently?" Things like that. Allen Sama: We're working on that. Right now, the course itself, we've only marketed it to our own list, so we haven't really gone to the public with it. We haven't let a lot of people in. We only open it up once a month for a few people, a handful of people, and then we shut it down again because I'm working with people, and we're working it out. But once we do expand it a little bit more, I'm working on a couple projects coming up that we'll definitely open up the course and we'll have a lot more people in. Once we do, then that interaction will grow. Currently I'm working ... Right now my major project is I'm working on a book called Passive Trading. Once we get that book into people's hands, they'll see like, "Hey. Wow, this is awesome. I never knew I could do this." [inaudible 01:00:36] in there from students who are doing really, really well. I think that will help as well. Dan Hayden: That's awesome. Allen Sama: When we get more people in the group then yeah, it'll definitely pick up. But I appreciate you posting in there and doing stuff. Even on the call, I appreciate you coming on a call, and sharing all your knowledge and experience. Dan Hayden: Like I said, knowledge and success, it's ... These net liquidating trades, and overall profit or loss, I can't figure them all out because there's other trades that came into play with it as well. I'm probably 10 grand a month or something like that in the profit. That's pretty good since I started. Allen Sama: Yeah. You started five months ago, so yeah, that's pretty good. Dan Hayden: It's exceeded what my initial goals were. If I can now taper it down a little bit with my cash because I'm not going to be as aggressive and all that stuff, especially to start out with, but yeah, it's been a lot of fun to learn and that's the best thing about it is that I'm not having somebody else have to tell me what to do. I'm learning it and I'm appreciative of that. Thank you. Allen Sama: Yeah, man. You could do this for the rest of your life as long as we get older and we slow down a little bit, and our arms don't ... When your back hurts and this hurts, and that hurts, working a job or doing all that traveling might not be an option. But sitting on your porch, like you said, with your laptop, yeah, you'll be able to do that for a while. Dan Hayden: Absolutely. If I can get good at this and then teach my kids how to do it ... Allen Sama: Oh, game changer. Dan Hayden: A game changer is right. Allen Sama: That's one of the things I want to do as well. Dan Hayden: [inaudible 01:02:14] because you're taking something that's complicating, making it simple, and teaching others to do that. That's great. Good for you. Allen Sama: Because this stuff has been around for a long time. But with the advent of the internet, and the brokers, and now everything's at our fingers. Anybody can do this from anywhere around the world, so it's really opened it up for us as individual investors. I think for our kids, it's just going to get even better. We're limited to a little bit of the U.S. stock system. I think when our kids are older or whatever, they'll be trading around the world, they'll be trading on the moon. It's going to be crazy. Dan Hayden: It's true. No, it's true. Anything's possible. It's amazing because if you're ... The times that I've gotten into trouble is the times that I haven't got out of trades because, "Oh, it's going to turn around. It certainly can't keep going." It's going down two or three days in a row. You think it's going to turn around, but if you play by the rules, you have your rules, that's where you don't get into trouble and you're out. You said, "Hey, I'll take this little hit. I've made a little loss, but I'll make it back." Or, "I made it on the front side." Almost like your puts. You've owned these stocks and you've gotten so much premium that you own it for free. How much damage can be done? There's no need to take risks, to take chances. If you follow the rules, when to get in, when to get out, it's all good. You're going to have minimal losses and maximum gains. Allen Sama: Mm-hmm (affirmative). Yup. You just play it month by month, year after year. The returns, they take care of themselves pretty much. Dan Hayden: Yup, and you get so bored that you just say, "Well, here's Monday again. I got to go make some money." Allen Sama: Well that's the biggest thing. That's one of the biggest risks is that you get bored and then you don't pay attention. I've noticed that when I first started out. I'll put on my trades and I'd be like, "Uh, nothing's happening. All right." Then, "Oh, nothing's happening." Then I'll just forget to check them, and then, "Oh, something did happen and I didn't ... Ah, don't worry about it. It'll be fine." That's when you get in trouble, when you get too bored. Dan Hayden: That's where I am right now because as I'm traveling with this other consulting, you're bored because, "Well, I've made this much money. If they go wrong, I'll just set up new trades because it's paper money." But I got to get more disciplined in my paper exiting so that ... To me, that's the last part of my training right now, is just setting up the trades as I enter the trades to get out. Allen Sama: Well you have Thinkorswim, so they have something called OCO orders. Dan Hayden: Correct, one cancels the other. Allen Sama: Yeah, most brokers have something like that. If you call them up and I'm sure they'll walk you through how to set it up or they might even have the videos on their website. Dan Hayden: They do have videos. Yeah, they do have videos. Allen Sama: They show you how to do that. If that's what you're looking for, there is a way to do it. Or if you want, you can just have them alert you on your phone. Dan Hayden: Yes, you talked about that last week, which is awesome. You can have them text or ... Allen Sama: There's ways to run it if you want to find it that way. Then it's totally automatic. Put the trade on and then just put the orders in, "Okay, I'm done. I don't have to do anything at all." Dan Hayden: Yeah. Yeah. I lost, but I only lost a couple hundred dollars. Yeah I gained and I made $500, whatever it is. Yeah, that to me, that's relaxation because you don't have to, in that heat of the moment when, "Oh my gosh, it really turned against me. Now I'm down $300. What do I do?" That's the wrong time to be making a decision. Yeah, if the decisions can be already made for me, all the better. -------------- For more information on the program Dan is part of and how you can join go to PassiveTrading.com And also visit us at OptionGenius.com -- LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.

People literally ask me this one question ALL THE TIME… "Allen, how did come up with such a lucrative, safe, and easy way to trade?" I explain it all in my new book Passive Trading, get your free book here https://www.passivetrading.com/free-book! Option Genius was built with you...the individual trader, the breadwinner, the dreamer, the rock your family depends on ...in mind. Because we know what it takes to become a successful and profitable trader. And that's exactly what we help you do best. Get your $1 trial of Simon Says Options, our most conservative and profitable trading service here https://simonsaysoptions.com/stockslist-ss-trial-offer. -- In this episode we talk with a newer options trader who wants to make trading options his full time gig. So let's dive into his questions: **For more information on the program discussed in this episode, The Iron Condor Mastery, Click HERE** Craig Davis: So in terms of becoming options trader, being a specialist, what's the top three, top five things I should be looking to do, be, read, think about, think about, and words I'm supposed to have, things like that? Allen: Okay. The top five or three things that you need to know to be a full-time trader. Obviously, you need to learn. There are many different ways to learn, right? There are many different coaches out there, there are different books out there. You can go, I know in the US we have the public libraries, and you can get any introduction to trading book, and they'll have lots of different strategies in there, they'll teach you everything. But I think it comes down to, so let's say... Okay, so if I was going to be a trader, so I'm starting over, I'm working my job, I think in the beginning I would try to be more realistic and say, you know, "I need to set my goal, whatever my goal is." I need to, whatever my monthly expenses are, it's 5000 pound a month, or 10,000, whatever your expenses are. So, that's the central goal. And then I think you have to get into the psychology aspect of it first. Craig Davis: Yeah, okay. Allen: Where you have to figure out, okay, why? Why is this so important to me? What's going to happen if I don't achieve this goal? Craig Davis: Okay, yeah. Allen: Because I think you really need to dig down and make a list of all the negative things, and all of the horrible things that will happen. You know, I'm going to be working until I'm 70 years old, my kids are not going to be able to go to the right college and university, and all these different things, to make it like a mandatory thing in your life, that you have to achieve this goal no matter what happens. The reason I say that is because a lot of people, they have, "Yeah, yeah, I want to make more money, I want to make more money." But then, while they're on the road, the road has bumps. And so sometimes they go over a bump and say, "Oh, that was too bumpy. I'm going to get off of this road. I don't want to do this anymore." Or they pause, or they stop. They pull over to the side, and they say, "Oh, I'll get back to that after my kid graduates from school, or I'll get back to that after this happens. Let me do this project at work first." They lose track, and then they never come back. Craig Davis: Okay, okay. Allen: So, that's a big problem. So, the mental aspect is there. And then the second thing, I think once we have that, then really, you know, you need to look over your entire lifestyle and say, "Okay, I obviously... You need money to trade." There's no other ways about that. So, we need to have, and build up our account as much as possible, so that we have some money to trade. Craig Davis: Yeah. Allen: That way you're reducing your expenses as much as possible, paying down your debt, so you're not paying extra fees, and interest, and all that stuff. And then, putting that money away and saving it. Once you have that done, let's say you have the mental aspect done, you have some money to trade, then I think you do some research and you say, "Okay, there are all these different strategies, which one do I think gives me the best chance for success?" And for every single person, it's different. There are people who tell me that, "I think what you're doing, where you're selling options, that's way too boring for me. I want to be a day trader, and I want to get rich in three days." Then, you try that path, right? Craig Davis: Okay. Allen: There are people that are very aggressive, there are people that are very conservative, and they say, "Oh, I don't want to take very much risk." Well, okay, then put your money in the index fund, or put your money in a bond fund, and just buy bonds, and make, whatever, two, three percent the bond is paying you, and you live off of that. There are some people that, I know one guy in Canada, he has a company where he teaches people how to do dividend investing. Craig Davis: Oh, okay. Allen: By the right shares, and they'll give you four or five percent a year in dividends. Craig Davis: Okay, fair enough. Allen: So if that's your thing, that's your thing, that's all you do, and that's all you do. You don't need to worry about it. I found that, for me, I found something that I don't want to only make four or five percent. I want to make, per year, at least 20 percent. And then, I want to do it in a way that made sense to me. For me, I'm a bit of a lazy person, honestly. I don't want to put a lot of time [crosstalk 00:04:31]- Craig Davis: I think you're being over modest. Allen: No, really. If you talk to my wife, she would definitely agree with me. Craig Davis: Well, so you do some work somewhere, so there's some work there somewhere. Allen: We do a little bit of work here and there in the office. But in terms of the trading, it's not that much. In the beginning, I wanted to find out what I wanted to do, so I did a lot of trades in the beginning. I did a lot of what's called the virtual trading, where you get a free account, and you just do all the different strategies, all the different trades, see which one works for you. I did a lot of back testing. Craig Davis: Yeah. Allen: There's software out there that lets you basically go back in time, and you put on a strategy, and then you just go through day by day by day how the strategy worked. If you need to adjust the trade, you can, if you need to change your strategy, you can. So, that was very, very beneficial, because that took a lot of time... If you do virtual trading, like paper trading, or you use real money and you do... Let's say I want to do a butterfly spread. You come up with your own criteria and you say, "I want to try this new strategy that I've created. I'm going to do this, and this, and this, and this." To actually do it in real time would take you 30, 35 days, and you only get to do one of them. Craig Davis: Right. Allen: If you do the back testing, you go back to, let's say, 2000, January 1st, 2000, and you put on your trade. Within like three hours, you can do 10 hours, or 10 years worth of trades. Craig Davis: Right [crosstalk 00:06:07]. Allen: So it's a big, big chance where you don't spend that much time on it. And you get the learning much faster. Craig Davis: Right, I see. Yeah. Okay, yeah. Allen: In the beginning I would find, I would say, "Okay, I'm going to find..." I wanted to find one strategy. Just one trade I could just do it, I don't have to do anything else, I don't have to worry about anything else. This is the only thing I wanted. I just wanted to find one thing that would work. I tried different things. I tried butterflies on McDonald's, butterflies on Walmart, I tried iron condors on certain stocks, iron condors on indexes, credit spreads, double diagonals, cover calls. I tried several different strategies. They all have their benefits, and they all have their negatives. Craig Davis: Okay, yeah. Allen: I do think that you can take any one strategy and just work with it, and learn it, and do really, really well with it. So if you find one strategy speaks to you, then focus on that one. Do your virtual trading, and if you can afford a back testing software, get the software, and just within a weekend, you'll have done dozens of trades. You'll have a leg up on everybody else that's doing this. I think that's a secret that people don't really use as much. Craig Davis: Have you got like two or three back testing softwares that are for doing research? Allen: So, the one I use most is called Option Net Explorer. Craig Davis: Okay, Option Net Explorer, yeah. Allen: I think that one costs... I don't know how much it costs now. Let me see. They have a 30 day trial, so you can try it for 30 days. After that, I think it's... Actually, the 30 day trial is 10 pounds. Craig Davis: Okay. Allen: And then for a year, it's 500 pounds. Craig Davis: Wow. Allen: You're in the UK, right? Craig Davis: Yeah. Allen: So yeah, so it's 500 pounds. So it's a little pricey, you know, maybe you don't need it for a month, or you don't need it for the whole year, but [crosstalk 00:08:16]... Yeah, so it's 10 pounds for the month, so you try it out. And if you like and you want to keep doing it, you can do, they have a three month plan and then they have a 12 month plan. Craig Davis: Yeah, I'll look at that three month. Okay, three-month and 12 months, okay. Allen: I mean, you look at everything and you say, "Okay, these are the different things that I want to test. Before you open the account, or before you do the trial, come up with your rules. Like, "Okay, I'm going to do this strategy, and this is my rule, this is what I'm going to put the trade on, this is how I know I'm going to be in trouble." You know, so you have a basic whole trading plan. And then you go and you test that, and you try it. You say, "Okay, this didn't work. Okay, how can I fix it? What can I do differently?" Then you go back and you try it again, and try it again, and try it again until you come up with something that works for you. We have different trading plans that are [crosstalk 00:09:07]. Craig Davis: I'm looking to specialize in the Iron Condor one. Allen: Okay. Craig Davis: Because I've seen some things, and trades in the range, and all these adjustments and all that seems like it's a good plan. And then I seen on your program, you have the lazy day trading, or something like that. That incorporates some Iron Condor. So, maybe I am heading towards the iron Condor thing to focus on and try and specialize in. Allen: Yeah. So we do, we have that course. It teaches everything of a tizzy about the Condor, how it works, how do you do it. It gives the different trading plans that you can use based on if you want to be aggressive or more conservative, whatnot. So, if that's something that you want to focus on, then just go 100 percent and do that, and see how it goes. Do the trial, and test all the different trading plans, see if you can find some other trading plans online. Craig Davis: Okay. Allen: I know the ones that we've put into the course, we've tested them, we've done them with real money, so we know that they work. So the question is really, "Okay, so here's the plan. Allen says it works. Now let me go back in time and let me try it, and let me see how I do." Craig Davis: I like that bit, yeah. Allen: And let's see. You know, let's see if Allen is full of it, or let's see if he's really telling the truth. Craig Davis: Now, that's fair enough. I like it. Yeah. Allen: Because it also, like I said, it's different for everybody. So, the trading plan, we've gotten testimonials from people and said, "Hey, I tried this and it worked great," and then we've had other people that said, "I tried it and it failed, and I didn't work." So, what's the difference? The plan is the same, the market is the same. Craig Davis: People. Allen: It's the people that are, they're doing something different or whatnot. We had one student, he was in one of our other courses. It was, you know, you put on the trade and you wait until the trade, if it goes against you, you have to let it go to a certain Delta. Craig Davis: Yeah. Allen: So we do that with condors as well. You put the trade on at a certain Delta, and when it gets to a certain Delta, that's when you know that, okay, it's time to change or adjust the trade. Craig Davis: Yeah. Allen: Well, this fellow didn't want to wait until that Delta. He was looking at the money and he said, "Oh, I was down 200 dollars, so I got out of the trade, and it didn't work." Craig Davis: Yeah. Allen: I said, "But, that's not how it works. That's not the plan." Craig Davis: Yeah. Allen: You can go down four 500 dollars, and then eventually it will come back up, and then you'll win. So, you have to be able to ride the waves. For him, that particular plan, or maybe trading in general was not, it didn't fit for him, because of his style. If you cannot see yourself and say, "Okay, I'm going to put the trade on..." When we're selling options, especially with iron condors too, in the beginning of the trade you might be down 100 dollars, 200 dollars or something, before it turns around and then it starts making money again. Craig Davis: Yeah. Allen: But if you don't have the patience, or you don't have the ability to just sit and wait, then this is not the trade for you. Craig Davis: That's true, that's true. Yeah, from what I can see and from what you're saying, it seems like you have to have that confidence to stick to the plan, and just follow the rules according to the plan. So yeah, I think that's- Allen: You have to have confidence in the plan. So, that's why you do the back testing. You just do it as many times as you can, you track all your results, and you look at it and you say, "Okay, you know what? Over the last 10 years I made money eight of the years or six of the years, I lost money for of the years. In my head, am I behind? Is that acceptable to me? Craig Davis: Yeah, yeah. Allen: You know? I had a friend of mine, he found this strategy for the iron Condor, somebody showed it to him, that says, "This is how you put the trade on, and then you never touch it." Craig Davis: Oh, naughty. Yeah. Allen: That's it, you don't do anything else. You put the trade on, and then you just let it do its thing, and the numbers should work out, and you should make money. So, it's either you're going to win on that trade, or you're going to lose the maximum. Craig Davis: Yeah, that's not a good trade then. That's not a good plan. Allen: Right. I mean, before we make a judgment, we have to test it. So my friend, he's very smart, so he said, "Okay," and he got it. He got the same software, this option software. Now this guy, he's wealthy, he's already wealthy. He went and he found somebody, and told them, "Hey, I need you to learn how to use this software, and I'm going to pay you to run this test." Craig Davis: Nice one. A real life scientist, yeah. Allen: Yeah. So, he hired this person, and the guy did all the testing for like the past 20 years or something. The results were that if you had traded this way every single year for 20 years, you would've just about broken even. Craig Davis: Oh my gosh, that's not good. Allen: Yeah. There were some years where it did very, very well, and then there were some years where he lost a bunch of money. But overall, over 20 years you would've broken even. So he's like, "Yeah, this doesn't work," and I'm like, "Well, I'm glad you know before you wasted the next 20 years to try to bring it out." Craig Davis: [inaudible 00:14:35]. Allen: So for iron condors, I do believe you have to adjust it. That just gives you a better chance to win. Craig Davis: Yeah. Allen: But another thing you have to be aware of is, you don't always want to be in the market. Craig Davis: Okay. That's an interesting concept. Because you're always like, when you see on some of the things where they say, "Oh, yeah, you've always got to be [inaudible 00:14:59]." So it's interesting when you say be in the market and out the market. What do you mean by that? That's a good mindset, I suppose for someone that starting out? Allen: In the stocks, when you're investing in stocks, they have gone back in time and they've looked at this, and they've said that most of the games that are made in the stock market are made in a few days every year. Craig Davis: No way. Allen: Maybe like 20 days every year. That's when the majority of the gains happen. Craig Davis: No way, so what's happening for the rest of the time? Allen: 70 percent of the time, stocks go sideways. Craig Davis: Sideways, okay. Allen: Yeah, that's why iron condors work. They go up, and they go down, and they go up, and they go down. That's why they tell you that you always have to be in the market if you're a stockholder, because you don't know when those days are going to happen. Craig Davis: Yes, yes. Allen: It could be in the beginning of the year, it could be in the middle, could be the end. You might miss out on a rally... Like for example, this year, 2019, if you were in from January to now, you would be up whatever it is, 16, 18 percent. Craig Davis: Yeah. Allen: If you missed these first few months, and you get in right now, well it looks like the market's going down, so you might lose money the rest of the year. Craig Davis: Yeah, yeah. Allen: That's why if you're a stock trader, most of the time you have to have your money in the market, because you can't time it. You don't know when it's going to go up and when it's going to go down. Craig Davis: No, no. Allen: Most of us. Most of us cannot. Craig Davis: Most of us, yes. And unless you've got that magic crystal ball where you can say, "Oh, yeah..." Allen: Yeah. But when you trade the iron Condor, or other option strategies, you want to look at what's the VIX. The VIX is the volatility of the overall market. Craig Davis: Yeah. Allen: Now, the more volatile it is, the more volatility there is, the more the option prices are worth. You get more money when you sell them. But, that also means that the stocks are moving up and down much faster. Craig Davis: Right, okay. Allen: So you have to be on your toes. You have to be watching every day when it's very volatile, and you have to be ready to adjust, you have to be ready to play with it, and you have to be... To trade when it's very volatile, you have to be the best of the best. Craig Davis: Right, okay. Allen: When volatility is very low, the stocks aren't really doing anything, you can put on the trade and just wait, and then it expires, and you're done, right? Anybody can do that. And so in the beginning when you're starting out, I tell people like, "Hey, if it's too volatile for you, if you are getting nervous because there was a two percent move, or a three percent move in a day, then that's a signal that this is above your skill level, and you need to just get out." Craig Davis: Okay, yeah. Allen: Because if we are trading iron condors, we can make 10, 12, 15 percent per month. Craig Davis: Yeah. Allen: Do we need to do it every single month? No. Craig Davis: No, okay. Right. Allen: If you have two or three good months, and you're up, let's say... Let's say it's the end of March and you're up 30 percent for the year, that's a pretty good year. You could take the rest of the year off, and say, "Hey, I made 30 percent." Most people don't do that, because they're so greedy. They're like, "Yeah, I want to get more. Let's go for 70 percent. Let's go for 100 percent." Craig Davis: Okay. Allen: Eventually one of those months you're going to lose. And the thing is, you really cannot tell, in the beginning, you cannot tell which months are going to be simple and which months are going to be very volatile. But the thing is, when you're done with a trade, you can re-examine and say, "What's going on in the market right now? Do I want to get in right now, or do I want to wait? Is there some news event on the horizon, or something that would cause the market a lot of uncertainty and a lot of concern? Then I'll just wait until that thing is over with, and I'll see how the market is reacting to it, and then I'll put my trade up." So, that's what I mean by you don't have to be in it all the time. Craig Davis: Right. Allen: You can pick and choose. [crosstalk 00:19:05]... Sorry, go ahead. Craig Davis: Is there a way in your training, or is there some way to be able to help you make that decision? Because I might see the... The VIX might be something given this is in the market, but [inaudible 00:19:22] say with confidence to say that, oh, the market's a bit volatile at the moment, I might stay out of it? Allen: So, it takes a little bit of experience to be able to really pinpoint it. But I'll give you the short version. Craig Davis: Okay. Allen: What I do whenever I'm putting on a trade, especially my iron condors, and I do them every month on SPX, and I do them on Rut, those are the two big ones that I like... You can do them, if you have less money you can do them on SPY, and IWM, or any of these ETFs. Craig Davis: Okay. Allen: I like to do them on the big ones, because it takes less contracts, and it has different advantages. But, I look at, when I'm putting on the trade, I have an analysis sheet and I say, "Okay, what is the VIX trading at right now? Do I see any kind of support and resistance on the chart? How did I do last month, how did I do the month before?" And then I'll also look at the standard deviations. So, standard deviation is basically a percentage movement. It's a statistical number, statistics, so it will tell you that the SPX moved in a bigger amount than it normally does. Craig Davis: Okay. Allen: So even if the volatility is still the same, today they had a really big move for some reason. So normally, you know, 70, 80 percent of the time, the SPX will be within one standard deviation. Craig Davis: Okay. Allen: If it moves more than one standard deviation, then that's a cause of like, "Hmm, let me pay attention to this." Craig Davis: Okay. Allen: If it's moving more, if it's moving two standard deviations, then that's a flag. And say, "Okay, there are big moves happening here, I need to pay attention to this, or maybe I need to get out of the market, or maybe I need to stay out." Craig Davis: Right, yeah. Allen: If there is a day when there is more than a one standard deviation move, I don't get in, I don't put a trade on that day. Craig Davis: Right, okay. Allen: I want to get in when it's a calm day. So that is the shortcut there, that you need to monitor the standard deviations on a daily basis, and see how they are doing for whatever instrument you are trading. If it's not SPX, if it's a stock, [crosstalk 00:21:35] you can find the standard deviation for everything. Look at it and see, "Okay, I was trading it last month, and it wasn't really moving very much. But now, it's moving one standard deviation every day for the last three days. Okay, something is going on." Craig Davis: Okay. Allen: So that's like a flag, it's a bell. "Ding, ding, ding." [inaudible 00:21:58]. Craig Davis: Yes, okay. Allen: You need to research this more and decide, "Hey, what is the cost, and do I want to get in or not?" Craig Davis: Yeah. Allen: There's different ways. Sometimes I look at it and I'll say... When I'm putting the trade on I look at it, "Okay, over the past two weeks, how many times has it moved more than one standard deviation?" Craig Davis: Okay. Allen: If you get two or three, that's normal. You have to understand what is normal for whatever instrument you're trading. Craig Davis: Yeah. Allen: But for SPX, two or three times is normal. If you get seven or eight, that's very high, because it's only for two weeks. Over the last 10 days, it moved a lot more than one standard deviation seven times, that's very high. So that means that, without even looking at the news, you know that there is something happening in the market. Craig Davis: Right, okay. Yeah. No, I like the sound of that. That's a good... There's one thing to a trading plan, but this analysis sheets sounds like another good thing as well. And definitely looking at standard deviations, and the movements and the market's an instrument. That sounds like a good, what's it called, skill, or discipline to have. So thank you. Allen: It's something that can help you, you know? Just keeping an eye on it. It's not a hard and fast rule that you don't do it, or you have to... I don't initiate a trade when there's more than one standard deviation. Do you have to do it that way? No, that's just my personal preference. But, this is something that you can, it's like another tool that you can use. Craig Davis: Okay, yeah. Lots of tools in the toolbox sounds good to me, lots of skills, yeah. I like the sound of that. So that's something I need to have in my vocabulary more than the standard deviations, the percentage movements? Allen: Well I mean, if you don't do the standard deviation, you can look at the percentage movements, but then you'll have to remember. It's harder to remember. If you... I don't know what broker you're using. Craig Davis: I'll be using Interactive Brokers. Allen: Okay. So, I'm not familiar with their set up, but if you call them, or you find online that there must be a way that you can actually, on your chart you can see the standard deviations. Craig Davis: Yeah, let me write that down. [inaudible 00:24:26] brokers where on charts I find the standard deviation. Yeah, okay. Allen: You might have to write it down, or they might have it visually on your screen, however. But whatever works for you, it's a good measure to keep track of. Craig Davis: Yeah. Thank you. No, we'll do that. Standard deviations, [inaudible 00:24:55] analysis sheet. Is the first one on there now? [inaudible 00:25:02] I need to get a trading plan, makes me stick to the trading plan, my analysis sheet. So you've now got another sheet now that says analysis on it [inaudible 00:25:10], and check standard deviation. Allen: You also want to make sure that you're not trading during earnings, if it's a [inaudible 00:25:20]. Craig Davis: Okay. Allen: And, if you're doing iron condors, you want to know in advance, at least have an idea of what you are going to be doing as an adjustment if the trade goes against you. Craig Davis: Okay. That sounds like an interesting technique. How would I... Because you've got a couple of programs, is that mindset and that skill set within there, like that adjustment thing that you were just saying, like is that [crosstalk 00:25:51]? Allen: In the course, and the iron Condor course, that's covered in detail. Craig Davis: Oh, okay. So then- Allen: Yeah, so we actually have videos where I went through some, I think it was three really, really horrible iron condors, like the market just went crazy. I go through it on that software, that back testing software I told you about. Craig Davis: Right, okay. Allen: I go through it on there, and I go day by day and I'm saying, "Okay, market just dropped 50 points. Okay, this is what I'm thinking. Do I do this, or do I do this, or what happens if I do this? Okay, which one am I going to do? I'm going to do this, because of XYZ reason. Okay, now let's see if it worked. Let's go day number three, day number four, go forward, go forward." So basically I'm telling you what I'm thinking as I'm going through the trade. Craig Davis: Okay. I like it. That's a good, that's the best way I think. Allen: So now are you going to be, you're in the UK, are you going to be trading the US stuff, or English stuff? Craig Davis: US. I'll be looking to do US, yeah. Allen: Okay, so the market- Craig Davis: But I think my main focus is going to be the US stuff I think. Like the SPX, like I just said, SPX, or SPY and all that. I want to try and do something may be on the SLV possibly, if I can do something. Allen: Okay. Craig Davis: As I say, I've I've got to look at your program, look at the resources that I've got, and then just [inaudible 00:27:16]. But yeah, the ETF SPY might be the one that I start with as well. But yeah, that's where I'll be starting, on the American stocks, and the American instruments. Allen: Right now, gold is very steady, I think. I haven't checked it. I think it's been steady. I haven't checked SLV though. Let's see how that's doing. So yeah, these are ones that do not have earnings, so they are good to do that, they're good for iron condors. Craig Davis: Okay. Sounds like a good one to do some back testing and research on that. Okay, yeah. Allen: Definitely. Yes, definitely. Hold on a second. Hold on, I'm going to share my screen. Craig Davis: Oh, okay. Do I have to press anything? Oh, no, it's fine. Allen: I don't think so. You can see? Craig Davis: Yeah, yeah, yeah, yeah, yeah. Allen: All right, so here is SLV, and you know, it's pretty much up at 16, and died down at 13 something right now. Craig Davis: Yeah. Allen: So basically if we're doing an iron Condor... And you can use... In the course we normally go for about 45 days. But we can go 28 days. This one doesn't have a lot of volume, SLV though. Craig Davis: Right. Allen: So, might not be the best one. Craig Davis: Okay. Allen: Let's try it. Craig Davis: Do you have a minimum volume in the instrument that you go for? What's your guide range? Allen: I just want to see some action. Craig Davis: Oh, okay. Allen: If I'm doing five contracts, and like this one, this one has 200 contracts every day, 100 contracts. That's fine, because I'm a small part of that. Craig Davis: Right, okay. Allen: But the other one, SLV, this one was only showing, like right here, there's only 230. So, these are the only two options I have. So, I don't have a lot of choice in which to trade, so it was like, ", yeah, I don't want to do that one." You know, compared to SPY, you take a look at that one and you're going to say, "Oh, you have a lot of these to choose from." Craig Davis: Yeah. Allen: People are trading all of them. So, you have enough liquidity to get out if you need to as well. Craig Davis: Yeah, yeah. Liquidity, that's definitely a good keyword. Allen: So if you are doing this one today, depending on how much money you want to put into each trade, you can go to the 292 maybe. Let's say we do 200 each, so two points. This is what our trade would look like. Craig Davis: Yeah. Allen: This trade gives us a 66 percent probability of winning, it's right in here in the middle, and then I can put these on the chart. So basically, this redline and this redline are the top and the bottom of our trade. Craig Davis: Yeah. Allen: So it seems like it'll do all right. Craig Davis: Yeah. Allen: This is a yearly chart. In this trade, what can you make? You can make 55 cents, and it's 200, so let me see if I... You can make 100, you can lose 300. So you know, whatever that is. You have a 66 percent chance of doing that. So what is that, like 33 percent gain? One divided by three? Craig Davis: Yeah. Allen: You could make... I mean, so you can be more conservative than this if you wanted to. Craig Davis: Yeah, okay. Allen: You can bring these all the way out to here, and go maybe 75 or 80 percent probability. That way, your tent will be larger. Craig Davis: Right, okay. Allen: So, less of a percentage return, but more chance of being safe. Craig Davis: Okay. Allen: Now the thing is, like right now, I don't know if you've been following the news or not, but the US and China, they're having their little trade war. Craig Davis: Trade wars, yeah. Allen: So that has been sending the market up and down almost every day for the last week or so. Craig Davis: Right, I see. Allen: If there's a tweet from Trump, then it goes up, otherwise it goes down. So in this environment I would say, no "Well you know, VIX is up a little bit, let's look at standard deviation, and these are the standard deviations. So in the past two weeks, we have one, two, three, four, five, six, seven, eight, nine, 10, one, two, three, four days where it moved more than one standard deviation." So that's a little bit on the high side. Craig Davis: High side, okay. Yeah. Allen: I would love it if it's like this, where it's all just gray, and no, they may be have one, but that's about it. Craig Davis: Yeah. Allen: This is telling me things are getting heated up. Craig Davis: Right, okay. Allen: Just looking at it visually. You see this, you see a lot of gray, a couple bars, a couple bars, couple bars, then all of a sudden you start seeing more reds and yellow. Yellow for here is a danger, because it's more than two standard deviation. Craig Davis: Right. Allen: And then, you're see more color, it's getting a little heated, so you have to be careful. That's all that tells you. Craig Davis: Yeah, that's cool. Okay. So you say something about news, what kind of news are you following, or if there is one I should start looking at, one or two? Allen: I try not to. Craig Davis: Oh, okay. Allen: I try not to watch the news. [crosstalk 00:32:48]. Craig Davis: Okay, good. Allen: Yeah. I've done... When I do my back testing, you don't hear any news. You're just looking at the chart, you're looking at the trade and you're going day by day. You don't know what's going on in the world. Craig Davis: No. Allen: You will do better in your back testing than in real life, for sure. Craig Davis: Yeah, that's true. Allen: Just because the news has an effect on us. Craig Davis: Yeah, true. Allen: When you're in the trade for 30 days sometimes you get scared, sometimes you hear something. So, if you're only watching the trade, you're not watching the news, you'll actually do better. Craig Davis: Right, okay. No worries. Allen: But sometimes there's stuff like this, when it starts dropping all of a sudden, then you have to pay attention. "What's going on? Why is it always that it's going steady for so long, and then all of a sudden it starts dropping?" And then you have all, look at this, you see this? Red, red, no red, red, red, red, red, yellow. This is like, "Hello, wake up, we have something going on here." Craig Davis: Yeah. Allen: So that's when you watch the news and you see what's going on. Craig Davis: What's going on, right. When the red flags are there, then watch the news, okay. Allen: Yeah. So I mean, I watch some shows that tell you like technical analysis, what other people are thinking. They'll say, "Oh, this is the line of resistance, and this is the support level, and this is this," okay, I'll take a look at that. But on a day to day basis, the nude is total baloney. They have no clue why the market is moving. Really, on a day to day basis, they don't have any clue. They have to make up something. Craig Davis: Yeah. Yeah, just to keep the viewers happy, I suppose, yeah. Allen: Yeah, I mean, they have to have airtime, right? They're on 24 hours a day, they have to talk about something. Craig Davis: Okay. Yeah, yeah, no worries. No, that's really insightful there, thank you. Yeah, so red flags, warning, check the news, standard deviations. [inaudible 00:34:51] if it's yellow, yeah, stuff is happening. Allen: I mean, Interactive Brokers might not show it like this. Craig Davis: No, that's fine. If they've got it somewhere, I'll just have to just get my eyes used to the way that they present the data, but yeah, I'm happy to do that. Allen: So essentially you have about 2000 to trade with, is that what you wrote? Craig Davis: Yes. Allen: Okay. And your expenses, your goal is about 3500 a month, and you want to get there in about three years. Craig Davis: Yes. Or sooner, or sooner. Allen: Or sooner. Craig Davis: I put that down there because, like as I say, I just put the figures down there, in terms of like what's achievable and what's possible. Allen: So let's say, here, let's do some quick math. So, 3500 times 12, 42,000 pounds a year, and you have 2000 to work with. Craig Davis: Yeah. Allen: That's 42,000 divided by, let's say, 25 percent a year. If you're making a 25 percent yearly return, you would need an account of 168,000. Craig Davis: Nice one. Allen: And you're at two. Craig Davis: Yeah, so that's no chance. [crosstalk 00:36:04]. Allen: How long will it take you to go from 2 to 168? There's a small chance, but you'll have... I don't want you to take excess risk is what I'm saying. Craig Davis: No, no, no, no, I'm in it for the long term. I'm going to start small, grow small, learn. Allen: And right now you have two, but that's what we talked about earlier, you're saving whatever you can. [crosstalk 00:36:24]... Craig Davis: Yeah, you'll add into it, yeah. Allen: Yeah. One of the things I tell some people is that, when you're doing your back testing at your paper trading, even if you're not real money trading, keep a result of all the records. Craig Davis: Yes. Allen: Keep a track record of how you're doing. Because you never know when you're going to run into somebody who has money, or an uncle, or someone who's... Because you know, when you go to a party or you meet someone, you say, "Oh, hey, what are you doing now? What are you up to?" And you, "Oh, I'm trading options." "Oh really?" "Yes." "How are you doing?" "Oh, I'm doing fantastic." "Really? Oh, okay, I have some money that I need to invest. Can you do it for me?" You will be surprised at how many people there are that have money, that they don't know what to do with. So these people, they might come and tell you, "Okay, I have 20,000 pounds, please do something." And you do it for them if you want to, and then you keep, "Okay, I'll take half the profit." "Okay." Craig Davis: Yeah. Allen: But keep in mind though that that also brings another level of stress. Craig Davis: Yes. I could imagine, yeah. Allen: Losing your money is one thing, losing somebody else's money is a whole different thing. Craig Davis: That's true. Yeah, man, you have to be careful. Yeah, that's fine. Yeah, man. Just go and lose their money that easy. There's a UK term, they call it like a... I don't know how you'd say it in American slang, but in the UK it's like, "Don't pee it down the toilet," or something like that. Allen: Yeah. Craig Davis: Yeah, so I understand [inaudible 00:38:05]. Allen: Yeah, we call that, what do we say? We say we pissed it away. Craig Davis: Yeah, that same thing, yeah. So yeah, we say the same thing. Allen: Cool. Craig Davis: So yeah, definitely. That sounds like a way forward. That's excellent. Allen: So what else, what other questions? Craig Davis: So, with respect to... I'm just trying to think, I think I've gone through the sort of, like you definitely have the mindset [inaudible 00:38:36]. With respect to adjusting, so you've calculated how much to put on a trade for an iron Condor. I'm just going by the term, like the rollover adjusting, is there a way to calculate, or you can't tell how far it could go against you, is there a way to make it like a rough ballpark figure on how much to put aside if you needed to do an adjustment? Or is that all on your course on how to make the decision should you adjust, or should you do this, or take money off the table? Allen: In reality, you can adjust forever. You can adjust month after month. You can keep it rolling forward, "Okay, so I didn't do good this month, I'm just going to roll it into next month," and then roll it into next month, and you can just keep going. I don't think that's a good idea, because it never ends. Craig Davis: Yeah. Allen: If I lose money on a month, then I just want to end it, and then start over fresh. Craig Davis: Yes. Allen: I don't want that baggage of coming, "Okay, I'm down 300 dollars from last month, I got to make it up." No, I want to start fresh, and whatever I can make, and then get it back eventually. If I was to put... I usually keep about half of what I put in originally. Craig Davis: Oh, okay. Allen: So, if I put in 1000 on a trade, I might keep another 500 on the side. Craig Davis: Okay. Allen: Or maybe another thousand, and worst-case scenario, to adjust. Craig Davis: Okay. Why not, why not? Okay, I like that. Yeah. I like that. It makes sense. So 100 to 50 percent, why not? Why not? I like that. I like that. So trade, and that's what you [inaudible 00:40:22]. Okay, why not? Yeah, I like the sound that that's okay. Let's see, what other questions could I ask you? I sure have put some on my email, but- Allen: It says here that you took some courses already? Craig Davis: Yeah, so I took some courses. I know this might seem like a strange one. There's a guy called Robert Kiasaki. I went to one of his training things and I thought, "Right, I'm going to fly in..." So pretty much, he's the one that put me on the path to try and look into do these things. I've been trying to do real estate things, and business things, and the stocks and shares thing. So I've done a couple of things, but that was just like the theory. I never got into a paper trading account. So last year I went, because in my full-time job I work in healthcare, I work in a pharmacy. So I got this contract, I was at the hospital pharmacy, where you've got more some more and things. I worked with this guy, I worked with him before, and he says, "Oh, come and work with me on this iron, and it's paying me [inaudible 00:41:21] a bit more money." So I thought, "Oh, based on the hours that I've got, this is okay." But what I didn't factor in, and maybe it's a life lesson, is like the downside. If you can imagine, I experienced the most downsides where, this is my assumption, I never asked, so I suppose I wasn't wrong. So for example, the person contracted [inaudible 00:41:46] for his business, he was saying, "There's too many staff, we're not going to employ staff." So I go, "What do you mean by that?" I had to find out the hard way that if all the jobs don't get done, I have to stay behind. Allen: [crosstalk 00:41:57] Yeah. Craig Davis: So before I was supposed to do 45 hours a week [inaudible 00:42:02], I think I must've pushed about 75, 80 hours a week. I was there late nights on weekends, I was there on my days off. Allen: Right. Craig Davis: I was there trying to... So, my plan was to go there, get my paper trading account up and running, start doing some stuff, so that's where I had the idea to get onto the [inaudible 00:42:22]. But then it stopped. So let's say, so April, May, say June 2018, I stopped doing stuff. So in the process now, I have to send an email back to Interactive Brokers, because my account cleared [inaudible 00:42:37] on SLV. I was selling some put options, because I thought, "Oh, I've learned about put options, let me sell some put options, and if it goes up, I keep the premium, if it's slow I keep the premium, if it goes down, then I don't get the stock anyway, but I got it for discount." So I started doing all that and then, boom, the reality of that kicked in. Then, I says, "Oh, I need some annual leave." He goes, "Oh, I can't find cover for your annual leave." I go, "What are you talking about?" So before I just assumed, I never discussed it. Well, it's not that I didn't discuss it, but I thought like, well... So for now, I'm just working with teams now where if I can get an agreement where possible, I'll go for that. Because before, I just overlooked it. Allen: Mm-hmm (affirmative). Craig Davis: I overlooked, like with my other team, like they were saying, "Oh, you got to do this [inaudible 00:43:30]." "You guys are killjoys." He was telling me, "Sorry, we can't give you cover for your leave," so I says, "What are you talking about?" So, I didn't have the words and the vocabulary, because I never thought I'd have to present an argument to ask for... Or, [inaudible 00:43:47] present an argument to request for annual leave. Allen: Yeah. Craig Davis: Never. I thought, "Okay..." So with respect to the courses, I started off with Robert Kiasaki, did some real estate ones, and there's a guy called Andy [Tamura 00:44:04], he had some ones. Then recently, I went on to Udemy, and that's where my... Because on Andy Tamura, he did one of these things and then I stopped. [inaudible 00:44:16] the profile, and when I seen the profile, "Oh, someone on Udemy," and I seen this thing it says like, "How to make money on weekly options," and it was talking about iron condors. Allen: Mm-hmm (affirmative). Craig Davis: So I researched and said, "Oh my gosh, he was talking about that." And then they say, "Oh, you've got to get educated," so I went on some podcasts and then I came across yours. I was listening to the way that you were speaking for your people and I thought, "Yeah, yeah." Because they say sometimes if a person, you can listen to what they're saying, but you have to make the decision on what they're presenting and what they're saying. Allen: Right. Craig Davis: What gave me the confidence to say, "Oh, yeah, this guy seems okay..." Because when you where then talking to the student guy, you... Because there's some people, like I said, that can sugarcoat it. But you actually said to him, "No, you need to get someone that's going to make you accountable, like a trading partner, that's got a list of rules." [inaudible 00:45:09], "Okay, you didn't get the trade, what are you going to do about it?" Allen: Right. Craig Davis: And that kind of thing. I thought, "Yeah, I like that." Because that's what you need, is everyone, "Oh, yeah, it will be fine [crosstalk 00:45:19]." You want someone to know, really to... Yeah. So I thought, "Okay, yeah, you seem like a serious guy. You want people to benefit." Allen: I learned from experience. That was my wife. That was my wife standing there telling me, "What are you going to do to fix this?" Craig Davis: The best trading partner, yeah. Yeah, but that's a good incentive as well. Allen: Yeah, every day she would come up the stairs when I was at home. Every day she would come up the stairs and stand there until I talked to her. Craig Davis: Yeah, "What have you done? What are you doing?" So yeah, so there you go. Behind every strong man there's a strong woman, I could imagine. Allen: Oh, yes. Craig Davis: Like I said, so for me, that's what got me onto the parcels. And there's programs. I seen yours, I listened to that podcast, and I looked into some of your things and I thought, "Okay, I want to be an expert, so I'm going to have to put the money in. Because why not pay, say, 297 dollars if it's going to say..." I'm telling you before I was not an ambassador. I don't know why I wasn't listening before. It's like I just have the theoretical, I had to practically... [inaudible 00:46:41] like the insurance, if it can save you money, I don't mind spending 297 dollars going in the forum, and it's going to save me 3000 dollars or something like that down the road. I haven't got a problem with that anymore. Before I might've been, "Oh, I'm going to risk it." No sense. Because it could be worse. Because as I said, there is no... Allen: You mentioned a couple things. You said the weekly iron condors. I would not do that. Craig Davis: Well, so don't do the weekly ones, [inaudible 00:47:18]. Allen: Those are for experts, and those are for people who like to gamble. If you don't have the money to risk, I would not do that at all. I would stay with the monthly. Craig Davis: Yes. Allen: The weeklys, you cannot adjust them. I'm sorry. I don't care what other people say. They just move so fast, that you cannot adjust. Craig Davis: Right. Allen: And the money that you make is so little, that you're only trying to make five, six percent. But that thing could, you know, you sell it for 20 cents today, tomorrow it could be a dollar, what now? Craig Davis: Yeah. Allen: You can't do anything. I learned the hard way that those are very dangerous, and they... Craig Davis: Yeah. Allen: And the [crosstalk 00:48:01] Kiasaki, he gets paid a lot of money from that Andy Tamura guy, to just be the head. You know? Craig Davis: Yeah. Allen: He will just use your name, and your picture, and your video, and... I mean, I love his books, I love his books, and they make a lot of sense, but yeah, so be careful of those. [crosstalk 00:48:30]. Craig Davis: He doesn't recommend the weekly options [crosstalk 00:48:34] for him. He didn't recommend that. I did see it on the Udemy, where it says, "How to make money selling options doing this weekly..." Allen: Oh, I see, I see. Craig Davis: So for me, I was looking at it as a learning exercise, where what is the difference between doing this weekly iron Condor to the monthly? Because they do say do it for 45 days, and do this. Allen: Right. Craig Davis: So, I was just looking into the process, but yours seems like you've got the accelerated version, where you've got the whole package there, you're going from start to finish, and this and that. Allen: Yeah, I mean, and if you have any questions or anything, you just email me, I'll help you out. Craig Davis: Yeah, definitely, definitely. Allen: If you need anything, just let us know. Craig Davis: Yes, yes. Allen: But really, take the plan, do the back testing, if you can afford it. Craig Davis: I will. Allen: I haven't checked, there might be something out there that's cheaper. Craig Davis: I can have a look. So if I literally Google, is it called like back testing software? Is it like that, or is it- Allen: Yeah, so just option back testing software. Craig Davis: Okay. Allen: You might find something. I know this company that I use, on the screen, the Think or Swim, they have something for back testing. Craig Davis: Okay. Allen: It's included, it's free. It's not very good... I think it's right here, Think Back. So, it's not the best, but it's free. Craig Davis: Okay. Allen: You can go back in time, so let's say you want to go back a few years, go back to this day. So it'll tell you, "Okay, SPY on that day was 131." And I think this is a chart for it. Craig Davis: Yeah. Allen: It gives you all the prices. So, you can put on a trade and then just go through it and see. Just go day by day. Like, "Okay, this is the 7th, today's the 8th, today's the 9th, how's my trade doing?" It's not as good as the other one, but then again, it's free. Craig Davis: Okay. I can have a look at it. I have seen the Think and Swim. I don't think they're taking account for the UK anymore. Allen: Oh, I didn't know that. Craig Davis: [crosstalk 00:50:42] Interactive Brokers. Allen: I see, okay. That's horrible. Tasty Trade... Or, no, Tasty Works is another one. Craig Davis: Okay, let me try that, Tasty Works, yeah. Allen: They're a newer broker, and I know they opened for Australian accounts, so they might be probably open to you guys too. Craig Davis: UK, okay. Allen: And they are, you know, they focus on options. Craig Davis: Oh, excellent. Allen: They have a lot of educational stuff as well. Some of their stuff I agree with, some not. Craig Davis: No worries. Allen: Okay, so the guys who, they're the same guys who made Think or Swim. Craig Davis: Oh, okay. Oh, that's good. Allen: In the past, they were floor traders on the exchanges. Then they made Think or Swim, and you know, they started doing videos, and teaching people. They were the ones that told everybody to do the iron Condor without adjusting. Craig Davis: Really? Allen: That's how they got popular, yeah. And then they sold this company to Ameritrade for millions and millions of dollars. Craig Davis: Okay. Allen: And then after they have the buyout period, where they cannot do anything for a lockup, they cannot do anything for a certain amount of time. Then once that period expired, then they went and they opened another brokerage. Craig Davis: Oh, okay. Allen: They're still out there, making videos and whatnot. So, they have a lot of content that people like. But they might, let me see if they open accounts in the UK. I think they do. Craig Davis: Okay, I'll have a look. But like as I say, with this Andy Tamura guy, you mention weekly, but he says safety, so that's where I got the safety element. But yeah, he definitely was saying, "Grow small, take your time. [inaudible 00:52:43] paper trades." Allen: Right. Craig Davis: But no, I don't think he wouldn't have said anything about [inaudible 00:52:49] saying about, "How do you have a losing strategy?" And rather than taking the maximum offer, he was the one that [inaudible 00:52:58]. So that gave me the idea. That's what I was leaning to. Because he said, "How do you turn a losing trade, so you don't get the max loss, and you're sort of not [inaudible 00:53:07] after having the max loss?" Allen: Yeah, so that's basically talking about adjusting. Craig Davis: Yeah, yeah. So yeah, man, Think or Swim [inaudible 00:53:25] said to do that, wow, they would've believed it. Allen: Yeah. Craig Davis: Well, like as I say, if it were, it depends on what context. Yeah, if they break even after 10 years and that. Allen: I was shocked, I didn't know that. I hadn't done it, my friend did it, and I was like, "Wow, really?" Craig Davis: Wow. If something sounds too good to be true, it most probably is or something, they might say. But no, I'll look for that. I'll look for the Tasty Works. If I can start an account, then I can look at that. Allen: Yeah. The only reason I tell you that is because their software might be better than Interactive Brokers. Craig Davis: Ah, okay. Allen: It doesn't matter which one you use, but their software, because they are focusing on option traders, so their software might be better. And they're newer, so they'll respond to you. I know Interactive Brokers, they don't really respond very well. Their customer service is not the best. Craig Davis: Right, that's all I need to know. You've got a problem, you can't get a hold of anybody. Allen: Yeah, I opened an account with them, and I couldn't even figure out how to use it, seriously. And so I emailed them, and I didn't get any response. Then I canceled the account, and then they contacted me. They were like, "Why'd you cancel?" I was like, "Well now you contact me." Craig Davis: No, that's not the best way. Allen: I think they are the cheapest, but you know, you really have to know what you're doing. Craig Davis: Yeah. [inaudible 00:55:08]. Allen: Yeah. So you have your game plan? Craig Davis: Yes, I have definitely... Oh, man, Allen, you're a top man, you're a superstar. I've definitely got a game plan. You gave me so much food for thought, hints and tips. I've been writing down some things. I know you're said you're recording, but let me just write it down while the inspiration's there. Yeah, I'm definitely more [inaudible 00:55:30] focus on these and back testing of the plan, which I never thought about, which makes sense, just to get confidence. Not confidence, but at least I can, what's it called, develop the skill of putting on the trade, and making sure I'm doing it properly. So yeah, yeah, I like the sound of it. And plus, yeah, I can view like how many trades over how many years in like a few minutes, so I like that. That's good. Then I could just say, I just have to get used to the [inaudible 00:56:00] where I'm coming forward, the volatility in that. So yeah, man, definitely got a game plan to go forward with. Looking forward to be working with you, and being part of this [inaudible 00:56:14] team. It's going to take me a few days until I digest everything, and get into it. But, I'll definitely be staying in contact, and if there's anything else that [crosstalk 00:56:27]. Allen: It's interesting, it's fun, but when you're doing it, it's very boring. Craig Davis: I'm glad you're telling me that, that's okay. They say the good plans are the [inaudible 00:56:40] ones. So it sounds like I've got a bit of a... Allen: Yeah. Like, yesterday the market was down, so it was exciting. It was like, "Oh my God, what do I do? I got to do this, I got to do this." Today, market is flat, and I've got nothing to do today. Most days you don't do anything. You just sit there and wait. Craig Davis: Waiting for something. Allen: Yeah. Craig Davis: Man, I didn't do an adjustment or something, or I didn't do this, didn't do that. Allen: Yeah. Craig Davis: I like it, I like it. So, that's where the boring part comes. Allen: Yeah. That is also something that you're going to have to learn with experience. You might adjust sometimes too soon, sometimes too late. It's a fine line. Like, we'll give you rules that say, "Okay, if this happens, you adjust." Craig Davis: Yeah. Allen: But there's always the thing that, you know, "Oh, if I didn't adjust, it would've worked out great. If I had waited another day or two, it would've worked out great." So, that always is there. When you have a firm set rule, it doesn't always work out in the best way. That rule will work most of the time, not every time. And so as you get experience, you'll realize that, "Okay, I know my rule says to adjust, but I am going to wait one more day, because I see something something on the chart, or I think this is going to happen," or something. Craig Davis: Yeah. Allen: That's why we don't give Vista computers. This is why we do it ourselves. Otherwise, we could just make a computer program, and let it run, and hopefully it works. Craig Davis: Yeah. No, that's fine. No, I like it. Yeah, man. Allen, definitely [inaudible 00:58:28], it sounds like you've done a great journey. You're a great teacher, and you want to encourage people. I'm glad you've got your course, and the website, the podcasts. Yeah, man, I'm glad that you've even got this thing, where if you want to speak with you, to donate some money. So even that for me, that's a learning for me as well. But yeah, man, this is definitely much appreciated. Definitely. Plan everything for everything. Allen: Great. I hope I was helpful, and like I said, going forward, you need anything, just email us. We're here. Craig Davis: Yes, definitely, man. I'll email you guys. Yeah, man, definitely much appreciated for the help and support. Definitely much appreciated. Thank you. -- LOVE ALLEN SAMA - OPTION GENIUS AND WANT TO LEARN MORE TRADING TIPS AND TRICKS? HERE ARE SOME NEXT STEPS... SUBSCRIBE TO OUR PODCAST FREE 9 LESSON COURSE: https://optiongenius.com/ WATCH THIS FREE TRAINING: https://passivetrading.com JOIN OUR PRIVATE FACEBOOK GROUP: https://optiongenius.com/alliance Like our show? Please leave us a review here - even one sentence helps.