Hey guys it’s Sasha and I want to do a video today on trading stocks when you have an 8 to 5 job, and I got this from somebody posting a question from the members doing a comment for me and again, I just want to really thank you guys for following me and also posting the questions and I’m glad I can help you out, I just want you to really start thinking about things a little bit differently.
If you don’t mind I’m actually going to read the question and then we’ll get into this, because this is going to be a little bit more in depth, and I’m going to share with you something very especial that I normally don’t share with people. You’re going to take a look a little bit into how I do some of my retirement trading for the 8 to 5 job, so if you have an 8 to 5 job this will be perfect for you.
The question goes like this. “First of all thank you for the good work and amazing videos you share about trading, they’re very helpful. I’d like to know your opinion and advice on investors who can’t watch the stock market closely due to a full time job. I work from 8 to 5pm and there’s no way for me to watch the stock a minute by minute, so obviously day trading is not an option for people like me. Is swing trading the only option for me? What about portfolios, mutual funds, index funds, ETF? Any advice would be helpful, thanks a lot in advance”.
Don't do day trading
Pretty much what I want to mention to you is first off, don’t day trade at all. I talk about trading, definitely don’t day trade.
When the market has volatility day trading is great for people that are watching the market and they go in and out. But you’re not going to be making a significant amount of money, and it’s stressful, you need more commission, commissions fees that eat up your account.I really don’t recommend day trading.
Focus on swing trading or long term trading
I fully recommend swing trading or long term trading, it’s key, it’s going to save you on the commissions, it’s going to also allow you to have a peace of mind and you’ll have lot bigger runs, massive.
Whereas day trading, you’re trying to fit in the 6.5 hours in a whole day to squeeze in all your trading, whereas swing trading you might let a stock run for weeks and months at a time, making those huge gains.
If we look at Dow Jones, or the Diamonds here, and we look at it running from let’s say November, all the way until now. That’s a swing trade right here that you want to capture.
Same thing with even Boeing, look at it, from here, from March, April, May, June, July, August, that’s a run from 79 to 109, that’s what you want. And this is the weekly chart; you know it’s a weekly because here’s the weekly.
If you do it the monthly, you can do it the monthly, but again, these are the runs that you want to capture, you’re waiting for the charts to set up and then you’re doing the run when it goes on break outs
If you’re day trading you’re just playing around with little tickers and bulls and you’re not going to be making a lot.
In either case, also the weekly and monthly recaps or the monthly runs are a lot stronger, so the support and resistance are more concrete.
That means you have a less change of things failing, I’m not saying they won’t fail, I’m saying it’s a better change for things to succeed in your favor if you’re doing the right things such as watching the price action, even on a nightly recap.
If you have a job, you go home and you watch these trends at night, and you do your research and you see that things are hitting, hitting, hitting, but they’re not breaking out, so maybe watching it on the weekly, even if you caught somewhere mid-week over here, let’s just say after things are breaking out right here, and you cut it even late by 3, 4, 5 days, and you bought it on your cellphone or tablet, you’re still going to have a very good run.
Look at that run right there, so each one of these represents a week, because it’s on the weekly.
Definitely I don’t recommend day trading, it’s very crumb like, it’s not recommended, you might have days or trades where you only trade for two or three days, just because the run didn’t work, so you do have to pay attention, especially initially, but definitely focus on more swing trading or long term trading.
ETFs, mutual funds and index funds
In the next part of the question, basically he asks about the ETF, mutual funds and index funds. When it comes to portfolio or mutual funds, it can be safer, and I say can, they move differently and they don’t have earning specifically, so it’s easier to predict the trend in some cases.
I want to talk a little bit on the apple that just happened not too long ago.
When you have stocks that are moving and they’re stock specific, you have different things that happen, like these gaps over here, stocks gap up, they can be for the good or they can be for the bad.
Index fund, portfolio funds, all those things, they are a little bit safer in that you do not have these types of things that happen as frequently, because they don’t really have news.
What they do is they try and follow the market, they don’t try to predict the market, they don’t try to do anything beyond by just showing you and reflecting exactly what it is
When you have the dimond ETF, the Dow Jones, it mimics the Dow Jones, that’s what it tries to do. And that’s the diamond ETF.
When you have the spy is the S&P 500 ETF, are these any better than stocks? They can be safer, but they do still gap, when the market gaps, they will gap and this can be an area of concern.
It does make it a little bit safer because they don’t have any specific news or earnings, but you do still have the market risk, you do still have the trade risk, because you’re in the trade, when you’re in the trade you do have the economic or the global risk, so there’s still a few risks out there.
But you’re not going to have anything specific to the spy, such as the S&P 500 news coming out, unless something like a disaster happens with the S&P 500, but usually that’s rare.
Any other case these are safer bets, but it just comes down to risk and what you’re willing to trade and how you’re willing to trade it.
They’re safer than stocks but they move a lot slower. So that’s kind of the down side.
If you go to the EEM right here, again, you trade these the same type of way as the other things, now you can create these trend lines here and watch the break out and see what happens, you know, obviously you would’ve missed the run here, or you could’ve bought a support this level and let it run there.
Or you could’ve played the trend. You know, bought at the lows here, sold at the highs, and then maybe sold short and then went down here and then bought and so forth.
Do your own trading
It depends on your time horizon, what’s available. I do recommend definitely doing your own trading, I don’t recommend giving it to a broker, because as I always mention, the broker is number one most concerned about themselves, as any human person is, think about it when you’re in the jungle. I love the jungle examples.
Everyone is always concerned about themselves, so that’s the first thing. Like lord of the flies, remember? The book lord of the flies.
The second thing they’re going to be concerned about is their company, they’re going to be worried about their company and then maybe you, and then maybe your money. In the end they’re not going to care too much about you.
Use your cell phone or tablet to trade
If you don’t have great availability for time in order to trade between those trading hours, then your best bet is to trade off of your cellphone or tablet, or calling the trade when you see it on your cellphone or tablet or something like that, go to the bathroom, check it, if you’re just starting out that’s the way you do it.
Check things like that. If your company or job doesn’t allow it, you’re going to have to figure something out.
You can set automatic triggers, in order to buy things or sell things, but I don’t really recommend that, because you have to learn how to spot price, action, volume and behavior. That’s the key.
I’m going to emphasize again, price, action, behavior and volume. Those are the key things, you have to learn how to do that very, very good, and then you’ll know when to enter, because otherwise you’re going to be entering fake outs, and they’re going to psyche you out.
Those managers, hedge funds people. They’ll buy millions of dollars of shares just to flip that rug from underneath your feet. Thinking “oh the market is long” and they’re going to suck you in, and this didn’t hit me until seven to ten years later in my trading career, so I was one of those people as well.
Don’t worry about it too much, but that’s just the nature of the game. You’re going to have to pay your dues.
The third option, I’m going to share with you guys something especial now. The third option, and this is for advanced users only, and I’m going to stress it, for advanced users only, if you have an 8 to 5 job, is to put on options spreads to collect theta, which is depreciating contract, in order to make money every month.
What happens with an option contract, and think of it like a coupon, when a coupon has it’s deterioration of time, value, it’s got that expiration date, same thing with an option.
When you give someone the option to buy your house for $10,000, you pay them $10,000 and you say “hey, I want the option to buy your house for $150,000 rather than $100,000” because you might think there’s some development going on and the option contract lasts for six months. So for them it’s great, they make $10,000 and if you don’t buy it, they keep the $10,000.
But if you do buy it, you’re able to buy it from them for more money, but that means the house prices are going to be going up, so they want to do that, because they know that development is happening. But you as the house owner may not know that.
That’s just a basic premise of options. Here’s what I want to share with you, is options do deteriorate and use time, value in order to leverage options.
In my trading account, and again, just going to share with you some very, very brief things, I don’t want to over share with you guys too much on this, because otherwise it can make it confusing.
Basically what we do in some retirement accounts, or what I do for my stuff, I don’t trade for anybody really, unless it’s family.
But you can create these things called calendar spreads, so you sell the option in the front month and you buy another one for protection in the next month.
On this one, on this little contract right here that I got going on the wynn resorts, The price can go from 142 to 158, and if we look at our diagram at wynn, basically I’m over here, so it can go from about 142 here, to 158, a little bit up there.
The price can fluctuate anywhere between here, and if the price fluctuates within there, I make money. How much money? It’s going to hit this red line. This white like is the current date, the red line is the expiration date. Basically because I’m selling something, I’m selling something but I bought something in the other month in order for protection, this profit line graph starts rising day after day, because options deteriorate.
When you’re selling contracts, you’re basically selling it in order for it to deteriorate, and this is just a calendar spread, if you want to look it up and research a calendar spread.
Only for advanced traders
They’re also known as binomial options, which people try to make it sound like “oh you’ll make a fortune with binomial options”, but you still have to know how to trade price, action and volume, you have to know about intrinsic values of options and you have to know about implied volatility, and you can’t be trading these options, because what people try to do is sell you these courses that are one DVD or five DVDs that are just about binomial options, saying you’re going to make a fortune, because you’re not.
The course I’m working on for this stuff is about 10 to 15 DVDs, it’s like 20 hours of material just to trade binomial options, because you can get screwed and you can lose a ton of money with this, but let me show you the power of this.
Basically the stock can move from this, here is the price over here 143 to about 157 and I still make money.
As the date moves forward, and I’m just moving it here on the estimation program, I start making more profit, and options deteriorate quicker towards the end of the expiration time.
So here it is, it’s moving quicker and quicker and quicker and towards the end already you can see, if the price hits at 142, I’m basically breaking even, but as it gets into 144 I’m up $600, as it gets to 146, I’m up $1300, if the price is here at 149, it’s $2000 and this is just on a few contracts here and there, so you can see the price changing right here near my mouse. And then it can basically land anywhere here.
You have to know how to play these, so I don’t recommend you do this, unless you really know first off price, action, behavior and volume, and number two you have to know some stuff about options.
I will have some courses coming out later that are very in depth, something that people don’t share with you guys.
I’ve seen it on the market, and I’ve studied all of them, but people just don’t share those kind of things, just because it takes a lot of time, and for me I think education is one of the most important things because our education system sucks and you need to really learn how to trade accordingly and trade properly, rather than just “hey let me show you some strategies” and then this is what worked for me and it might not work for you, so I’m getting in depth on some material here shortly, but it just takes a lot of time to build it.
But in either case that’s how these option spreads kind of work, but again, I don’t recommend you trade these, unless you know what you’re doing. But I just want to show you an insight.
What happens is when you put this on, and you let the price fluctuate here and there, when things get to an edge over here to the right a little bit, you start making adjustments sometimes, and actually I don’t want to share with that too much, but let me just share with you an Apple position, you start making light adjustments over here and you might put on different contracts to help balance and hedge your risk.
Because it always comes down to risk. So again, maybe in a few days you make two or three hundred bucks, that’s not bad for the stock not doing anything and you not having to worry about it.
Anyways, that’s a little insight of how you do some trading to make money every month for advanced users only, and I’m going to try and put together within the next few months a course about that. I definitely have to put together some other course material that first talk about the price action and behavior and volume first, and I might make that available in the members section, but if you don’t trade from 8 to 5, I mean if you have a job from 8 to 5, this is how you do it.
Trade off the cellphone first, or tablet. Definitely don’t day trade, swing trade or long term trading is key to everything, not just here and there, it’s everything.
Learn about price, action, volume or behavior, because I wouldn’t have put on those spreads even on the options if I didn’t know price, action or behavior.
Portfolio or mutual funds, ETF, they can be better because they don’t have the earnings and stuff but it’s not any different, and you might miss huge moves because they usually move slower. So again, it’s up to you.
You have to talk to your financial advisor, this and that, I’m not registered or anything like that.
And for advanced users I shared with you something different that I normally don’t share. It’s the option spreads to collect money every month. It can be golden, I do those for my retirement account because it’s a lot safer and I’m not going to risk my money in order to invest in the market.
Because, they talk about, only invest what you can lose, and I don’t want to lose anything, I don’t want to lose any money whatsoever, I don’t want to lose a dollar, but it does happen. So you just have to prepare yourself and you have to manage your risks.
In either case, sorry this was a longer video, but I just wanted to answer that question in depth and share with you a little bit of the strategies, they’re not secrets or anything, they’re just making you look at the bigger picture, and I don’t know where you’re at and your level, I don’t know where you are specifically in your trading career, you might have one year, you might have five years.
This could’ve been basic stuff, this could’ve been more advanced stuff, but it just shows you a little bit of a bigger picture when you have the right education, when you have the right knowledge, the things and possibilities you can do.
For example, when you go on vacation or something like that, you can put on these option contracts or option spreads, and you’re out there on the beach relaxing and the stocks bounce around here between four or five different points and you’re still making money.
That slowly deteriorates, white line goes to the red line and you’re making money.
That’s not how most people trade, that’s usually for advanced users, but you can’t be doing that until you really understand the action, the behavior and the volume.
I hope his was helpful, I hope you continue to study, to learn, to broaden your horizons and continue making money from money.
Keep evolving, keep growing and keep learning, and then eventually I hope that you contribute back to others around you.
My focus is the financials and also enjoy the business to business ventures, so those are my key things, I do a lot of the different marketing and stuff like that for people, do different seminars and I only hope that I can help you in your own life so that way you can contribute back. So I always say “Do what you love, contribute to others and most importantly live life abundantly”.