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Welcome to this week's Rapid Recap! I’m Sasha Evdakov, it is September 10th 2015 and today's lesson is “Why is the first million dollars harder to earn than the second million dollars in the stock market?” and this concept can be applied to not just the stock market but also apply to general life concepts.
A lot of the examples that we discuss in videos and topics that I really aim for is I focus on core material or core principles and the reason behind that is that when you learn the principle you can apply it to other aspects in your life, if you learn a technique or tactic then you can only apply it to that situation but when you learn a principle when you learn how things work, function, and operate. You can apply it to so many other avenues in your life.
In this example or in this week's recap, this week's lesson we're going to focus on growth on how to grow from one million dollars to two million dollars. If you're talking about even $10,000 to $20,000 again the concepts and the principles that we will be discussing will still apply you can put any number you want in this week's recap it's about growth and why that first amount of money, cash or the first thing that you're doing is more difficult to achieve than the next stage or the second part of that.
Looking at the market this week we did have some interesting things that happened in the market and we're going to go over some stocks and some of the things that I'm trading, holding and some of the things that I see in the market. We had some great rapid recaps over the last couple of weeks I had some really positive comments, some fantastic nicknames that people even gave me because of the wonderful advice that we've been sharing but really it's about you, it's about taking your edge to that next level, it's about taking your education and knowledge higher.
Looking at the market overall, we basically were looking at these markets and talking about a few potential possibilities. Now some of the possibilities that I discussed was that the market could bounce up here and then reject at this level in which case I would add to the short position. Some of the other things that we said was it could come up here, breakthrough this level and then isolate here.
Now we didn't get any of those situations in fact the market didn't have enough juice or enough energy to even get up to this level, instead what happened was we got to this region right here and every time we're coming back to this level it keeps rejecting higher prices. If we zoom in you can see that right here here's our trend line here's our resistance line so you can see that right here we come up to it we reject it once and we rejected it the next day, then we isolate here for a little bit a few days, we come back up retest and rejected again. All these things are telling me that we're building cost for lower prices and the individual stocks as well tell me this.
Now things can change, I'm using this line right here as a stop or a line in the sand and if you look at the S&P on the weekly the same concept looking at it the same principles apply with the S&P. When you look at it the overall market what it's doing is after that initial break we have that additional volatility, the stocks are going up and then they’re rejecting at that level and even when we have bullish days or somewhat bullish days you can see that this bullish day didn't really do too much, these few bullish days were just retracement from this huge sell off.
Same thing here, this bullish day we had a slight little pop up but in the next day we had the stock going up or the market going up and then sold back off that's why you have this Doji and here on this day we had the market open right a little bit higher popped higher and then reject higher prices so it's heading up and then rejecting, every indicator’s telling me the signals of what the energy is doing that the market is setting up for a lower prices.
With that being said I do have individual stocks that I personally watch I don't really worry about the overall market it's in my analysis, it's in my focus and I do implemented into my trades but really in the end you can still be a fantastic trader or make a great profit even if the market is bullish and you’re trading bearish or if the market is bearish and you’re training to the upside you can still do just fine so long as that you are in your individual picks on the right side of the trade.
With that being said, looking at these individual names, let's go back to Apple. We talked about Apple a handful of times and you can see that this is our line in the sand right here, that line that were watching and looking and you can see that every time we get to this level we are rejecting it. We talked about this stock heavily we talked about it extensively throughout since May since March. We've been talking about it for a good amount of time and when the Stock Showed you keyed signals such as this one, this one, this one, and then the breaks here of that moving average as well, it’s showing you its hand.
After doing my analysis I'm not going to go in depth on this stock. I try to limit my focus on the stock because there's other stocks out there and we cover it pretty in depth but you only need a few picks in your arsenal so if you have a few great trades a year, this makes your year and this is the one this one is the one that can make your year and made our year right here.
When you go to the upside and you start looking how far this move this is the ABCD pattern we talked about this ABCD pattern so A to B; B to C; C to D, and now when we look at our projected move. The projected target for the stock of the selloff is right on the 87-88 level and I got that through the Fibonacci numbers and if you have the course or review the Fibonacci on the green course or the blue technical analysis course it'll tell you right there that's the projected retracement amount and that's where you're watching for a potential bounced because there may not be anything wrong with the stock before the time being, it’s a great short trade or a trade to the downside.
Looking at GoPro, we've talked about this one quite a bit as well and some of you have been clapping for me on this one and you're welcome. Here looking at this one we looked at this little isolation area right here, this little region where we were rejecting after that selloff that stock has been going lower. We talked about this level where if the stock comes here and bounces you want to wait, you want to wait until it comes maybe halfway or comes back to this level and then rejects it, but it didn't do that instead we're actually breaking lower.
Now what can happen to this stock? well if we do our A to B, B to C movement it’s actually a little tough to do it on this chart but here's our A to B, B to C, C to D so I would have to readjust this chart to really get a good grasp but here the measured move is about 60 points so from here we're already at 65, 60 points would be at 5.6 dollar level. In my thinking it's going to go that low, no probably not because over here the move was over inflated or overextended but could it potentially get to half of that? Let's say twenty-thirty points, possibly could let’s just say we go 40 points from the swing point and output at the $20 levels.
You know you got to be mindful that whether it's a GoPro or an apple you can't get attached to these stocks and a lot of people do they get in love with their stocks and you just can't do that because notice what's happening, notice what it's doing, the movement. All these people that were in love in this region right now at the $50 level because it was bouncing.
If they're still holding on to its down at 33 which a good hair cut off of their initial prices so they're probably right now thinking but its GoPro but its GoPro, it'll be fun it'll be fine you know they're talking themselves back into the trade and unfortunately if you're doing that in this business that just doesn't work out.
Take a look at Yahoo here with the explosion over here in 2013 that we had. I mean it's not even back years ago was very popular famous then exploded in the two hundreds but here looking at this, over here, then we had a split over there too. Here looking at 2013 you know how much of an explosion we had about a hundred and sixty percent but now it's selling off.
I mean you know once people are done with it they're done we were at the $50 level now we're at the thirty that's almost half, half of where it was and if it breaks this moving average it could come back right here the 20.25. I mean that's a fair price right kind of like buying a car what's a fair price for a new Nissan you know is it a $100,000? Probably not but you know $20,000 - $30,000 is spread around the fair price and what about Yahoo same thing is $60 $55 little extended, maybe. Start looking at things like that you know in terms of the fundamentals if you start looking at the fundamentals.
Looking at some other stocks we’ll get into that in a second but what I want do is a really just discuss the concept of making your first million versus your second million in the stock market and if you want to change the numbers you could say making your first thousand versus your second thousand or making your first 10,000 versus your second 10,000.
I want to apply this lesson to the markets and give you some insight to why it's always more difficult to earn that first batch of cash or money or earn that first million than it is to earn the second million and it has to do with one particular thing that has to do with one particular thing in life and that is really due to your personal habits and habits have to be different between your first million and your second million, and the examples I want to give you in this is when we apply it to business.
If we apply this concept to business which is a little bit easier to maybe understand or relate to for some people. If you're looking at business, creating a business you know that first million to get your business started to hire the employees, to get your website going, to build up your clientele is much more difficult because you are at Ground Zero it's like a space shuttle right? You’re at Ground Zero but when you have all the employees, when you have the website, when you have other things in Motion's your product pipelines, your wholesalers everybody that's working for you to continue to build all these things into the future for your company to grow the second million now is a lot less difficult because it's like a train things are already moving and are in motion because your habits are different your foundation is different.
If we apply this to let's say losing five pounds, the first five pounds are much more difficult to lose than five pounds in the future once you're already going to the gym once you're already running every day and once you've already found a trainer but if you're not going to the gym if you were not exercising, if you don't have a personal trainer and you don't have the habit to be able to lose that additional way then it's going to be much more difficult to lose that first five pounds but once you already have all those things in place already have a trainer you're going to the gym you have you have all the necessary habits of going every single day or every other day it's a lot easier to lose that next five pounds or 10 pounds because you have the habits in place.
Think of this when you apply the same concepts to the stock market, if you don't have the right habits to earn the two million dollars or the second million dollars; it's going to be much more difficult. You have to first learn the habits you have to earn the rituals that are in place and habit sometimes might be a worse word, there's a better word and ritual just sounds even more powerful than a habit and from personal development a world they like to use the word ritual.
If you had better rituals that positioned you to the next level that allowed you to be better rather than making things easier, focus on becoming better then everything else falls in place and how do you really do that? How do you put these rituals in place? Well, I mean there's a couple of basic things if you look on the exterior of what you're doing for example may be set up a video camera and see how you're reacting or write down how you're feeling after you making the trade, before you're making the trade and during the trade.
You have those three concepts those three little stages of before during and after and if your emotions are swaying, your decision-making process or the way that your trading then your emotions or your ability to focus on the core system that your trading is probably the first thing that you need to work out and figure out.
There's going to be obstacles and barriers and we don't have time to get into all these different things but if you, in the back of your mind think about the habits the rituals that you need to have in place then it's going to start getting your brain and think about all these things it's going to start looking at all these things a lot differently you're going to be able to start looking at these stocks and saying “okay I'm going to enter this stock 10,000 shares to the short side and I'm confident about it”, rather than “Well I'm unsure doubting myself maybe I'll just trade five shares or ten shares”, and that's okay when you're getting started but when you have the right habits and place the right rituals in place when you have that system in place, all of a sudden your system everything else that goes along with it puts everything in place.
Hopefully that makes sense to you if you if you’re trading if you're just applying this to general life is that having those right things in place will allow you to move forward in developing you to that next stage.
The beauty behind these habit these rituals and systems once you have them in place even if you lose all your money whether you know you give it away, you buy a house, you do something different right and now you’re starting back from zero or scratch let's just say. When you already made that first million you can make it back, you can make it back a lot easier because you already know the system you know the process you have the right habits and the right rituals in place and it's a lot easier to position yourself in the future and make it back. I think Jimron mentioned it, where he said that you know if you lose all your money and you have all the right assets in place, you have the right systems to all the other habits and place then you can make your money back.
Neither case let's take a look at some other stocks here let's take a look at here. Facebook, and a lot of these stocks they're doing very similar things that all the other stocks are doing especially these leading companies. We have Facebook you can see that this line is also coming into this level. Similar to Apple here we have this gap you can move it up a little bit rate here to the upper part of the gap and if it comes back to this gap level and rejects it but again it's a shorting opportunity but you want to be mindful that these things can whip you around so if you're not positioned higher if you didn't take profits in the strength down here you know when you shorted it here then the be mindful, be mindful that these things can snap back.
We look at CMG looking at this long trend line it's isolating in that level. it's isolating and potentially when you look at the daily here if I break things down on the daily an extended it, let's just takes then the volume you can see that this volume to the downside was 339,000 shares and to the upside we popped with 209,000 shares, the day before was 241,000 before the selloff.
Looking at these bars right here this bearish volume at this price level is coming in and you can see the rejection also right here on 827, which also kind of puts a little damper. This one right here stock pops up, sales back off, stock pops up, sales back off. We have all these points where even though the stock will pop a little bit higher of this level, so it's popping about $8 giving you a $10 stop and wiggle room that you have to do but then it whipsaws back 17-18 dollars. That’s huge, are you willing to give an $8 stop? Yes, if the potential for the selloff right here if we have a potential sell off of 70 points of course you have to look at things in perspective it's a $700 stock.
Looking at BABA, remember the good old days, when people were screaming to buy this one right over here. Stock powering higher and although it would've been fine for a short-term play right here because you had your ABCD pattern. Here it is, for those of you that have the courses you can see here we have A to B, B to C, and C to D; and then after the ABCD pattern has done what happens usually a pullback, consolidation pattern, or something else. In our case well a selloff and if we continue looking at it on the weekly we're kind of creating an ABCD pattern to the downside.
Take a look at it here can you spot the ABCD pattern? There it is A to B, B to C, and C to D, right? There it is and this stock you know its pushing to the downside and for those people that were hoping to get in at 93 well you can buy cheaper now if you’re still hoping for that price level. It’s a lot cheaper but my opinion the stocks headed lower watch out below. If it breaks back above 80 at this point on heavy volume to be upside and we have a nice pattern nice consolidation then things may change but for the time being I don't see positive sign in this stock.
MasterCard the stocks a pretty powerful company, you want to be careful because these pullbacks often times are just shorter term. When it does pull back and then will pop higher by there's nothing wrong with playing these slight retracements and it can pull back and retrace. Projecting, could be right around this 81 level if it continues to accelerate and you can see that right here we’re acting week the last couple of days and MasterCard so be mindful there stick to your stops but this one has the tendency to pull out of dips because it’s a powerful stock.
TRIP is still building for lower prices potentially we're looking at this line as a line of support and that line, if that line gets broken you could see lower prices. We came to it a couple times 123 handful of times right there so watch it closely if it breaks look out below. Again step into your position.
Monsanto looking at this one on the long-term I think a post this one in the critical charts. Looking good for lower prices potentially this stock could to right around here 87, on the price level and you can see how that lines up right here for this upper part of this support and resistance levels so we already touched that once but 87 switch your watching and if it breaks that we can get down to 78 region so watch this one on those price levels but right now it’s acting weaker. We’re on the monthly here looking at this stock so if we continue to pick up well you can see much lower prices. This one's not favorable in the community only because of the things that the company is doing.
We got YUM. Yum brands here. We have this resistance and support line, looking at the weekly there's the swing point, here's another swing point and then there we go draw it across if we look at it on the daily. Here is the daily here is the swing point. Here was the break with the slight little gap there then you can see a broke here as we zoom into this region into today or current day you can see that we broke there, here’s that 200 day moving average rejecting here and again rejecting here so you could almost say that it's a building this cause right here little patterns so that way we can potentially break lower. Be very careful, this one I would not step into it unless I’d broke this 82 or 83 region I wouldn't even look at it unless I broke that level because it's building for lower prices and if it's building for lower prices and it pops higher then you want to be extra careful cause it's not doing what you expect it to do. It's about reading those signs.
SUNE, great short working out well, draw that line across we know it's targeted and pushing through the short side because all this overhead supply that we have in this level, stock pops just slightly. If you draw it down here you can see that it had basically, it doesn't even get that far, but it aimed for the 38.2 region as when it tried to do. If we go over here you can see that it came up to this 23.6 region but that's not really a good sign or clue of it. Looking at it you got too much overhead supply and a small - here is our swing point, there's our low there it is. Aimed for 38.2 didn't even get there. Got to right around 36 percent level, 33 level rejected higher prices and if we combine it with, watch this you're going to love this, we combine this with an ABCD pattern A to B; B to C; C to D. After that light retracement ABCD pattern finishes won, take it out as the weekly looking at it on the daily there it is, what do I see? look at the volume bars extend it if you can't see it extend it.
Look at this cluster right here so here's our volume bars here is our group of bearish volumes here's the first one and second one. The bullish one that we have, the only one right there is at that point and one back here. Look at all the other bearish ones that we have and looking it, more bearish volumes we have one green one on the pop. I could I could tell you what this chart does just by looking at the volume and that's how you should be as well when looking at volume you should be able to see the chart when you just look at the volume.
Here it is we popped a little bit and now again we're starting our second leg on the sell-off locked we talked about it in 2014 the end of 2014. This was creating what we're looking at here A to B, B to C, C to D pattern. We talked about this one just want to mention it here you can see again panned out beautifully A to B, B to C. I talked about this B to C wait for the break stock broke right here there was your short did a little retracement again and boom there it is, finally built up after a year. There was your move there was your play if you got in it right that’s at fifty percent gain or 8 points.
If you did it in two steps or two parts you would have a little gain here and then probably got out around this region or this level and then again waiting for the retracement. Got in again for the short and boom getting out now take your profits run, go home enjoy, the beach go play tennis, go play golf, spend some time with the family grab by tea. Whatever it is and there you go that's what you do.
Alright, I hope you enjoyed this week's recap. Remember that it comes down to habits, building the right habits, building the right rituals in place in that way the second part of your growth, internal growth is easier. It's always easier to earn the second million than the first million. It’s always easier to earn the second thousand dollars than the first thousand dollars because you already know how to do it. It's always easier the second day or fifth day or twentieth day on the job than the first day on the job because you have to learn the process, as you have to learn the connections, you have to get in touch with people.
In that way you can continue to grow for the future if you're trying to lose weight this concept applies to all aspects of life first five pounds is harder to lose than the second five pounds because you have things in place. If you're driving a car building a business, if you're looking into building your own a stake or trade on the stock market, that first bit of cash the first stage is always more difficult because you have to set the right things in place.
Hope you guys had a great Labor Day weekend things have been going pretty well. Been working on the book for the penny stock traders out there so we have this book that we're working on, almost finished with this book will have a couple of weeks of proofing it of course, just to look over some of the charts but it's nearly there and you know that'll be the last book probably in the series on for the time being I don't know I don't see any other books for the time being. Maybe there might be in one in the future but this will be the last product for the stock market that I'm doing this year with the exception of the monster options course and depending on how many DVDs, how long the production time in with the holiday season they were going to happen that.
I'd love to get it out before the end of the year it just takes months to build the options course. Months upon months just planning it and you know it's a large process but it's worth it because of the feedback that I get from you guys when you're learning, when I get these success stories. I love hearing from you guys and it's just remarkable so we're definitely going to make one of the largest options courses out there in terms of content. I really hope it to be the best for quite some time and right after this book is released that is going to be the last stock market product of the year that I'll be working on.
It will be the options course and it might be released early next year of 2016, just depending on the holidays and how the holiday breaks go because the holidays usually are more time constraints and the reason for that is also because of the market because I have to watch the market as well and if you don't know why the holidays are a little bit more time constraint, looking at Apple looking at Facebook, any of the trades you do all these trades the best activity and the best time for the market is usually between Thanksgiving and January-February.
Usually those are those holiday months and that's usually the best time to trade so if trading picks up then it may take me a little bit longer to do the options course but I do want to get it out that is going to be my next project right after this book is launched in this book will be coming out at the end of this month or early next month and after that said my main focus is the options course and it will be big, it will be great but really it's not about what I think of it. It’s about what you're going to get out of it and how much value I can pack in it for you so that's my goal it’s just to make it a great course for your education.
Thanks again for joining me for spending your time, investing your time with me and hopefully you got a lot out of this week's lesson and I will see you next week enjoy your weekend, spent some time with the family and get ready to learn again next week on the Rapid Recap.