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Hey his is Sasha and welcome to another episode of let’s talk stocks, episode number 107. Trading and investing Q&As.
In this episode we’re just going to chat casually about some common questions and some answers for those common questions that you may have or some of the questions that other people have had in the past.
It’s basically interview based questions, and I thought I would make it a little more informal, hence why I’m wearing a simple casual t-shirt. In fact I actually like wearing the dress shirts for filming purposes because on these shirts you don’t have a mic place where you can pin the mic, so it makes it a little bit less comfortable, but with the dress shirts it actually makes it more comfortable to deal with the mic thing.
In either case, I thought I would make it a little more informal and simple, just chat a little bit about some common questions that some people may have if you’re just getting started in the market or maybe just shine some wisdom upon you.
Quick news and what’s coming
Before we get going, just some quick news and what’s coming up. Basically, we’ve had the critical charts, October 19th, 18 charts were released. If you are a critical charts member, by all means, take a look at that.
And you can see that on the website, on the homepage there at traders fly.com, it’ll be right there on that hoe page, some charts have been released
In addition, I also just released the options course number 2, it’s been launched, I haven’t finished filming the promotion video or anything like that, but it is on sale and it is at a discount for $349 and every 4 to 6 weeks we will release the next series or the next course in the series, because I have them filmed, just basically need to check the study guide and check a few of the modules and we should be good to go.
If you take a look at that, and you go to the rise 2 learn website, you scroll down, you can see the options mastery course right there, where you can learn more about it and you can just see how large this course is, we have 35 modules, the total course is right around 22 hours, 35 online videos and you get, I think it’s 143 page study guide as well.
There’s a lot of information, you can see the breakdown here from the introduction, to the tools and platform you need, words of wisdom, why people fail with options, what type of trades you can do with options, three parts to an options portfolio, introduction to trading like a business, trading options like a business, why adjustments are key to success, big picture of options, so there’s a lot of information.
And you can see that each one of these modules, they’re fairly lengthy, they’re not short modules, for example, this one, long-term profit potential is 42 minutes. Option prices and the VIX, we go 69 minutes just on option prices and the VIX, how they’re priced.
We talk about 47 minutes just on basic options, 36 minutes on just the dangers of buying single contracts, so there are a lot of details, and then as we get into vertical spreads, we talk about finding vertical trades, 73 minutes just on finding vertical trades, and then we get into entering some spreads and examples, and that’s 48 minutes, and then we manage those positions, and we look at those positions, we look at the statistical probabilities.
There’s a lot of knowledge and information in his course, it’s massive and the study guide is also 142 pages.
This is what the study guide looks like. As you get into the table of contents, you can see there’s all the modules broken down, so as we start getting into it, you can see that there’s a lot of information we go on video, on screen, talking about the options business themselves, the risk management side, growing as a trader, you name it, long-term profit potential.
And this is just the beginning, this is just getting started with options as a business and the verticals. This is a massive, intense course, I don’t think you’ll find anything out there like it at the moment. I definitely went in detail on this one and it’s my largest course to date, and it’s just the first part of it.
Periodically, every so often, on the next 4-6 weeks we will release the next one, and then the next one, and then the next one. These are all done filming, we have to basically create the study guide and double check them. The filming has been done; we’re just wrapping things up.
If you want to get that, right now we have it on sale, on special, as you know I don’t do a lot of sales and specials, but it’s for $349, which is half the price of the technical analysis course and this is already double that size. So in either case I highly encourage you to look at this and get it if you’re serious about options trading, because it’s very comprehensive and very detailed.
In either case, let’s just kick back a little bit and let’s just do some quick Q&As as far as this week’s lesson, I wanted to do this video because it’s kind of an interview based session, and I think that a lot of times when you’re sitting in a stadium or when you’re sitting and you’re trying to talk to somebody, somebody is getting interviewed, and then you have the panel of people that decide to from the crowd ask questions, and lot of times, even though you might not be the person asking those questions, they can still apply to you and the answers and it makes you think about things.
That’s what I really wanted to do in this week’s lesson, just to do something a little bit different, just something that’s a little bit more informal, and connect with you to share with you some insight, especially if you’re getting started, because when you’re getting started, it’s often the most difficult part, if you’re just growing as a trader, if you’re just figuring things out, you’re interested in this subject area or this area of business, the business of investing, you’re just there at that point where you can’t get over a certain hurtle, and sometimes hearing things like this on an interview gets you to that next stage and level.
Looking at these questions, I’ve composed a few different questions from a variety of things, questions people have asked me in the past, from general questions that are just common interview questions, and I want to share these with you as we get into trading.
How does the basic concept of investing work?
The first question that I have is how does the basic concept of investing work? When you’re looking to invest in stocks, if you’re completely brand new, the basic concept of investing is taking your money, whatever money that you have, and you put it into something, and then eventually that thing grows, whether you’re a stamp collector, whether you’re collecting gold coins, whatever it is that you’re collecting, you have your money, you put it into something, and eventually that thing will grow and later you get out of that position or investment and you collect the difference.
When it comes to the stock market, you take your cash and your capital and you put it into a certain company, whether it’s apple, Google, Microsoft, Netflix, there’s all these different companies, and as the value of that company fluctuates, your value of investment also fluctuates, it moves around. And then you’re able to take that money and sell it to the next person.
Because everybody is getting in and out of trades and investments at different times. You might have a different demographic of 20-year-old kids coming in, when you’re 30, and you’re selling your stock, but now they’re interested in getting into your positions.
That’s why that selling process is happening, similar to how people purchase cars, some people love to buy cars brand new, other people don’t mind a one or two-year-old car because theirs is just now broken down or they’re ready for an upgrade, whatever the reason is. People are constantly shifting and changing their positions based on their own lifestyle.
The process of investing in stocks
For you, if you’re looking to invest in a company, the way that you do it is, you basically have your investment capital, you go find a broker, which is a trading platform or you can go to a specific broker that will handle the trade for you, but you open up a broker account, you hand them your money in a way, you do the transaction, and then after that transaction is done, you decide what you want to invest in.
If you use a discount broker, you put the order through and you execute it yourself. If you pay a little more premium money, let’s say it’s $50 or $100, they might do the trade for you and now you have those shares or that allocation of that investment sitting right there, and now what you’re looking for is basic appreciation.
That’s just the basic concept of investing and how it works. And everybody is getting in and out at different times, so for you, if you’re just getting started, if you’re 16 or 18, you’re wondering why would somebody buy those shares later in the future? Because somebody else is turning 18 or 19 years old at that time, and people may not have had the money in the past to invest, but now they might have it in the future.
In either case, that’s the basic concept of investing, and for you, your job as an investor, as a trader is to constantly look for things that are growing in value or appreciating and take money off the top, or take money off the table and keep putting it back into your account.
How do you start when you don’t have a lot of money or have a job?
I’ve talked about this in the past in some other lessons that I’ve done. When you don’t have a lot of money, it’s very difficult to get started in investing, I know, I’ve been there, it’s tough because the amount that you can make on a percentage basis is a lot smaller to the absolute dollar value that something costs at the store.
For example, bananas, potatoes, bread, they still cost the same amount, but if you only have $500 and you’re making 1% that’s nothing, compared to somebody that has 5 million dollars in their account, making 1%. They can afford that bread much more so than you can with $500 at 1%
Typically the economy, the way that it works is it caters and focuses and it helps the rich much more than the poor.
In general when you go to a bank account and you open up a bank account with $100, they’re not going to give you a lot of benefits, they’re not going to give you a lot of benefits to a safety deposit box, to a no minimum deposit for bank account, there’s a lot of fees and restrictions on that.
Instead, what you need to do is really look at all the rules and regulations and try to figure things out on how you can save money from the bank fees.
Because if you come in with a 50 thousand dollar bank account, you put money into that bank account, they’re going to give you a free safety deposit box, free this, and free that. They give you a lot of benefits because now they’re using that money to make their own money from investments.
And this is the same in the stock market, if you’re starting with a low dollar figure or a low dollar capital, it’s a lot harder to go uphill, it’s a lot more difficult to grow that account, simply because you’re going against the grain, it’s against the gravity, it’s just the same way that the real world works, and you have to grind, you have to push, and you have to move forward, little at a time and just keep getting one step forward, because the amount that you’re making, your 1% is not going to do a lot of good for you on a $1000 on a day to day basis based on the real world expenses, and that’s just a fact of life.
Focus on learning first
You need to look at figuring out how to trade properly first, and once you learn how to trade properly, you can use other people’s money, this is how many investors have made it big. Warren buffet uses other people’s money to grow and create wealth.
This is what happens with other investments, from company investors, like hedge funds and so forth, why do you think they make so much money? They use other people’s capital to grow that account and then when they grow that account, they take a cut of that, but it’s using other people’s money to grow in the future.
The same thing for you, you need to first learn to trade right, learn to invest properly, when you learn to do that, and you can be consistent at it, then you can use other resources, whether that’s taking out a loan, whether that’s using other people’s money, whether that’s taking your business funds that you have from a business and putting it into your trading account and then growing that account.
But to really get up hill, to go against the grain when you don’t have a lot of cash and turn it into something big is very difficult at the beginning, so you need to constantly push and grind, and it’s a difficult process and for everybody it’s going to be different, because you’re at a different situation, you might have a job that’s very time committed and you just don’t have a lot of time, maybe because you have to put food on the table.
Look at earnings on a percentage basis
You might also just be starting at a thousand dollars, and you could be the best trader in the world, there’s traders that maybe have a thousand or five thousand dollars and they’re crushing it, they’re killing it, they’re investing so well, and much better than the hedge funds, much better, maybe ten times better. But what do most people care about? The final dollar value.
The hedge fund guy is making a million dollars. Yes, but he’s only making half of a percent on 50 million dollars, whereas the guy making 5 thousand dollars on a 10 thousand dollar account is crushing it or killing it. You have to look at things on an absolute value and a relative value. There are two different kinds of things to look at.
Don’t be discouraged, if you have a small account and you’re making $20 each and every single month, $20 on $500 on a month to month basis. Or $20 on $100 on a month to month basis is pretty good when you’re just getting started, and you’ll continue to grow, you’ll continue to get better.
But don’t look at it in terms of a dollar figure, when you have a smaller account, look at it on a percentage basis, because you might be a lot better than what you really think, on the other hand, don’t get a hot head either, because you want to make sure that you’re focused on your risk, don’t be too confident to the point where you just put on a whole bunch of money on a trade and then you lose it next week. Be realistic in your current situation.
What would you say is the biggest problem new traders have when it comes to trading or investing?
From the things I’ve seen, from that consultations I’ve had, from the coaching students I’ve dealt with, from just people online and just emails I’ve shot back and forth, I would say one of the main issues that I see on a consistent basis is a few different things, it’s probably overconfidence is number one and the second thing is not being aware of themselves.
Overconfidence is pretty big, because we as humans we always think we’re better than we are, you always want to think your child is the best child, you personally are god’s gift to whatever, so we always think that we are better than what we really are, however when you really look at something and you evaluate things, you’re not as good as what you really think you are.
And if you can always keep that humble mindset and humble spirit, I think it keeps things in line and in check, and that seems to be a big problem for a lot of traders struggling. And I tend to see these things, especially in comments, on social media and things like that, where people will make comments on videos criticizing other people, especially other people looking to learn and shooting them down on the negative sense, when in fact, they’re also the ones watching videos, and they say “oh, I already knew that, oh I know that”, but then I wonder well why are they watching training videos as well?
Always try to improve
You have to look at those things in context. For many people, a lot of their problems is the overconfidence, they think that they’re better than they are, when in fact, there’s still at a little bit of a lower level, and you have to keep those things in check.
Always think about how you can improve, and when you’re reading, when you’re watching things, when you’re listening to thinks, listen and hear and then absorb and see what is it that you can so different? What is it that you’re hearing that’s new?
Because if you are saying I already know that, I know this, then you already lost the battle, because anything that I say from now on, nothing is going to be new, because you already know it, then you might as well turn off the video, because you’re blocking yourself, you’re putting a wall right there to block your future learning.
When you have this overconfidence it also leads to trading larger than what your experience has, and this is really where emotional trading starts to kick in.
If you’re trading with emotions, if you’re trading with a worried stomach, if you’re a little bit nervous, if you’re sleeping and thinking about trading, those kinds of things really just come down to not knowing and understanding your own personal self and your own personal behavior, because you’re trading too large for where you’re at, you’re overdoing things, you’re exhausting yourself.
A large problem is just that humility, the humbleness behind it, so look at yourself, evaluate yourself, be honest about yourself and don’t think that you’re better than someone else, because there’s always somebody else that knows more, there’s always somebody else that has more money, there is always somebody else that is more kind than you.
Take yourself to that next level, take yourself to that edge and continue growing and getting better, that’s ultimately what this business is about, and if you’re not there at a successful, consistent point, it’s about getting better. You still don’t know yet what you need to do to get there, so take it one step at a time and be more humble about learning and absorbing other content, other information, so that you can continue to grow as a trader, as an investor or as a person.
What has been the most difficult trading situation that you have been in?
I put this question in here because a lot of interview questions ask about your struggles, your difficulty things, what happens in tough situations, and I would say, as far as trading goes, there’s been quite a few difficult situations that I’ve been in, and for those of you that are trying to figure out what things you can avoid, let’s say I’ve been in a lot of inversion situations problems, or inverted situation trades.
Where basically you put on a trade, let’s just say you’re going long on a trade, the trade starts to kind of work in your favor, but then it goes against you and you start seeing things and you say, it’s going the other way, I was wrong, so I go ahead and flip-flop that position and I go short. Now you’re going short, and the stock just nearly had a small pullback, and now it continues exploding to the upside.
Basically, this created two times multiples or two times the loss, a loss from the initial position and a loss from the secondary adjustment position, so that created an inversion problem.
I try not to get into those quite often, but it has happened in the past, where you’re wrong and you’re wrong on both sides, you were right the first time, but you’re wrong on both sides. That’s one of the most common problems that I’ve been in the past.
I would say the scariest part is getting stuck, and this tended to happen to me a little more when I traded lighter volume stocks or lighter contract stocks and options, it’s getting stuck in positions that nobody wants, it’s getting stuck in a trade where you have to use more capital or you get over leveraged on capital and you need to do a tweak that you want to do to get out of a position.
It’s difficult to explain because the positions that I put on are multi-contract and multi-trade dimensional, so they kind of have multiple stocks and multiple contracts attached to them from the options side and from the stock side, so I’m basically creating multiple strategies across one vehicle or one equity. And I do this across different contracts and different positions and different vehicles.
Sometimes when you get stuck in these positions, it’s very difficult to get out of them without making an adjustment to another part of your trade or position, simply because I might’ve overused the capital, or I might have created a spread where it requires more capital to make that adjustment but you don’t have the capital.
And I would say, that’s kind of a big problem and especially if you have a liquidity issue. If you have a stock or an option area, or vehicle that you’re in and they just don’t trade that many shares, you’re pretty much screwed, it’ really difficult, you’re not in a big trouble, but you’re in a painful trouble to where your brain is thinking about how do I get out of this? How do I make a change? How do I fix this?
And sometimes the only way to do it is to take a fairly large loss, and I would say that has been one of my biggest problems and situations that I came across, when I got stuck into a position, many years ago, I think I was on a Master Card position one day, doing the regulatory commissions and the rates with the government passing some laws and things like that.
In either case, there was a situation where I was stuck in a position in a very bad way, and even though Master Card trades quite heavily, just the way that I set up the trade, made it very difficult to get out.
Basically, if you’re setting up yourself on a stock or trade where there is low liquidity, if you’re trying to get out after hours or pre-market, if the options contracts trade lightly, if you’re getting in earnings and the stock whipped around, you’re setting yourself up for some trouble if you don’t know what you’re doing, and sometimes this can happen unexpectedly where there announcements like government announcements and things like that. It happened to me.
Of course I’ve had other losses in the past, which were large losses and probably larger than the one that I got stuck in, but the ones that really stand out in my mind, are the ones where you’re in a state where you can’t do anything, you’re kind of strapped down and tied down and you just can’t do anything, you can’t get out of the position. Or if you try to get out of it, it’s a major loss, and even though the position here might be healthy, this area or these spreads and contracts could be a disaster.
Simple point, if you’re getting stuck in a position, if there’s some liquidity problems, if you can’t do anything and your hands are tied, that’s really where the biggest struggle and the biggest frustrations are when it came to trading, at least for me.
How can a person best deal with the pressures and stresses of trading?
I would say if you’re having pressure or stresses when it comes to trading, the best approach is to slow things down, if you’re trading too large, this is normally where the stress is and the pressures come from. If you’re trading let’s say a thousand shares, and a wiggle of a dollar makes you nervous, even though that stock whips around a dollar on a day to day basis, then you’re probably trading too large.
This comes with experience obviously, the more experience you have, the more comfortable you’ll be at taking a little bit of a loss or having things pull back or go against you.
For me, if I’m trading a Google position, and you have a lot on the plate, or the spread, let’s say five thousand shares. With a $5-$10 pullback, that’s a normal whipping around for Google. But you’re basically putting a wiggle room of 50 thousand dollars on that position.
For some people that can be a lot. For other people, hedge funds and so forth, may not be that much, so you need to find something that works for you that matches your personality in terms of your risk tolerance.
Find a balance
And ultimately, if you’re dealing with pressure, if you’re dealing with stresses, you’re probably number one trading too large. The second thing is you need to find something that balances you out. Whether that’s doing something external, typically if you’re doing a mental activity, like trading, you need to find something that balances you out that’s opposite to that.
An emotional activity is something that can balance you out, like watching a movie could be emotional, or social activity, which talking to friends and family. Just hanging out at a family dinner night, that can also balance you out, because now you’re not using your mind as much, it hits more the emotional triggers, the intellectual side of you.
Or a physical activity, like going to the gym, working out, running, those things will balance you out because you have an intellectual activity and then you balance it with a physical activity. Those are some things that you can do that counteract that.
For example, if you’re a personal fitness trainer, and you’re working out and you’re training and you’re rope jumping, you’re lifting weights, you’re not going to go to the gym to relax, that’s typically not the way that it happens. For some people it can, it’s rare, if you can do so, then great, but for many people, you need something opposite of that, like reading a book. You don’t balance a physical activity with another physical activity, most of the times it’s due to other ways.
It might be that right now you’re lifting weights, and then you go to ultimate Frisbee or a hockey game and you might participate in that to balance that out, but it’s because of the social aspect that you’re on a team that allows you to balance yourself and the pressures of that, not so much because it’s a physical activity.
How do you become a better trader or find your edge quickly? What is the fastest way and how long does it take?
I would say that this is probably a really good question and I get asked about speed and improving quite often.
When you’re looking to improve and really grow yourself quickly, if you’re looking at intellectually, finding a trading mentor, finding a trading coach or even a trading buddy that you can bounce ideas off of, will help you, because it’ll make you see things differently. Again, it’s all about being humble and seeing yourself for what’s going on, what’s happening, how you’re doing things.
That’s usually the fastest way, unfortunately, if you’re doing a coach or a mentoring session, it’s usually the most expensive way, because there’s not a lot of them out there, not everybody wants to teach and it’s more expensive, simply because of the one on one time and connection.
Just like if you do private lessons with a tennis coach, it’s more expensive than going to a group class or a group session, because there are more people within the group.
In either case, if you can do one on one sessions, you’re going to learn a lot quicker, but typically for many people it’s best to balance those things out between picking up a few books, which is one of the cheapest mediums, in fact, between YouTube and reading articles, that’s the free method, but you typically will get much more in a book, it’s all compressed, there’s not advertising and it’s all right in front of you, so with a book, you get a lot of value for the cost.
Then maybe something like a video course, you get more value, then maybe a seminar, you get more value, you get personal contact, and then finally it might go into a mentoring session or something like that, where you get the most value, but all that attention is on you, but of course it’s also the most expensive.
There are other areas in between there when you’re learning things, like webinars and web classes and things like that. But in general that’s how the progression works, but when you have an apprenticeship, a one on one session, if somebody can look at you and look at what you’re doing, that’s usually the fastest way to learn.
But if you’re doing this on your own, if you’re looking at accomplishing and getting to that successful point on your own, the biggest thing I would say, if you’re looking for other aspects that help this, is to see yourself from that outer perspective, it’s to be aware of yourself.
Most people are not aware
And many people don’t have awareness. I have a lot of people that I’ve known over the years, they’re just clueless to how they are in their behavior, they’re clueless to how things progress in the future and what’s going to happen in the future, they don’t see the cost and effect.
Basically, when they look in the mirror, they might see a reptile, and animal or something else, they’re not honest with themselves, or maybe they see the next model superstar, whatever it is, it’s something completely different than what it is. I’m not saying the physical attributes, what I’m saying is, they don’t see their actions and behaviors the same exact way.
For a person that’s an aggressive driver or a person that’s driving in an aggressive way and there’s big flashing lights and signs that are saying, merge to the left, the lane is ending, merge to the left, and then all of a sudden they just keep driving in that right lane, they are not merging, and you see all these cars backed up, and then you get to the end and there’s a little stop sign right there, saying you have to merge now because there’s all these barriers, and you’re watching this person trying to merge in and they get mad at everybody else because they’re trying to merge in, and saying “What’s wrong with you not letting me in?”
But really the whole concept is that person is not aware that really they should’ve merged sooner. To look at themselves and seeing maybe I was the one at fault, maybe it’s my problem.
Always look at yourself as the problem
In general, I would say, if you’re looking to become better, always look at yourself as being the problem, always say “I’m the problem, I’m the issue, I’m the one that needs to get better” and that’s ultimately the key, because if you’re always looking at yourself, I’m good, I’m better, I’m good enough, then you’re going to be good enough at where you’re at, you’re not going to continue to improve, you’re going to stay where you’re at.
If you’re looking to get better, if you’re looking to improve and if you’re not profitable, you definitely need to then work on a few things, and that’s just looking at that mirror at your actions and saying “Yeah, there are some things I need to work on”.
And if you can do that, that all of a sudden helps you transition the mindset to getting there and then from there, you can take the actions. First is being aware, and then you actually need to do the actions as well, and that sometimes is the most difficult part. Just like quitting smoking, you know you need to do it, but taking the actions sometimes is more difficult.
That’s just some things to keep in check, awareness, mindset, being honest with where you’re weak at and looking at your behavior is really going to accelerate you on a personal level in many aspects of your life.
How long does it take?
As far as how long it takes you to get there, if you’re really good at the awareness factor and at taking action, I would say probably two to three years is the fast approach, as far as trading successfully and more consistently. That’s a fast approach, for me it took me 7-8 years, it to me a while to really get anywhere. There were not as many resources back then available when I started trading, so there was no YouTube, there was a lot less articles, there was a lot less video courses and things like that. Nowadays there’s more people putting content out there online and doing so. So it makes it a little bit easier to get into the business, but there’s also more clutter of information. People out put a course that’s maybe one DVD or maybe 45 minutes and say “This is all you need to know for trading” but really it’s not enough, there’s a lot more to it than that.
On average for yourself, four, five, six years. If you have a day time job and kids and other things to take care of, maybe seven, ten years, if you’re looking to trade consistently time and time again.
If you don’t have that kind of time, you can speed those things up with a coach, with a mentor, if you’re better aware of yourself and your surroundings, maybe in three years, maybe two years. If you don’t even have that kind of time, you might as well put your money into an index fund or an ETF that pays you dividends and then just kind of sit on it and continue adding to your investments as the sell-offs come.
When you get a big drop, when you get a big sell off, just add a little bit more to it, because otherwise, it’s just going to take a lot of your time, energy and just your own resources, your personal resources to really learn this business.
How do you balance trading with other aspects of your life?
When we really look at trading, the time commitment behind trading, once you have it down and you find your strategy, it really doesn’t take that long. To figure it out and to find your strategy takes an enormous amount of time.
But once you have it down, and you’re doing things consistently, it really doesn’t take that much time, and it’s actually at that point where I started doing more books and more video courses and things like that, because the act of trading, it depends on the person, it depends on market conditions, but you might spend an hour a day trading, or checking your positions, managing your positions, scanning stocks. So you might not spend that much time, and then the rest of the time you have your free time, then you can go ahead and do what it is that you want to do.
For me personally, I’m a study nut, I enjoy education, I really go out of my way to learn things, concepts, business concepts, human behavior, phycology, those kinds of things. I really go out of my way to broaden my education, just because these are the things that I enjoy.
But for you, if you’re looking to balance trading with your personal life and you have a lot of things going on, I would say just look at putting something in place that you can do on a consistent basis, that if you already have a routine, like going to bed, you already have something on a consistent basis, every time you wake up, you spend an hour studying, or every time you go to the bathroom, you take 15 minutes to learn a new technique, new concept, look up a definition, whatever it is.
That way you already have a habit that’s already in place in your day to day life, so all you’re doing is building upon those habits and continue growing in the future and broadening your knowledge.
Once you start implementing those things and you lay out a detailed plan that says, by then I want to put on my first trade. Once you have that, once you build the knowledge, the balancing act is actually pretty simple, because you already find your way, you find your edge. But at the beginning, there’s lot of things to figure out, because you’re unsure of how to walk.
Figure out what works for you
It’s kind of like a giraffe, trying to walk at the beginning. The legs are wobbly because you don’t know how to properly stand up. And you might try penny stocks, swing trading, day trading, you’re trying options, you’re trying all these different things, when you really need to figure out what strategy works best for you, how your risk tolerance matches up to an investment style, and that’s ultimately what you need to do, figure out your edge, figure out what works for you, and then once you have that, the rest of it is pretty simple.
Because then what I do is I put on positions, and as I have these positions going on a few of these different monitors, and in fact we have a whole second computer and system, which I’ll share with you on a future lesson, where I can show you my desktop and all these kind of things. But once you have those things going, and things are moving, you just take a look at the screen, see how the positions are acting, mark it up, mark it down, positions up, positions down, and then you make a tweak, and that’s it, you go back and you do other things.
For me it might be writing a book, reading a book, working on a course, working on a video, or doing something else. For you it might be something completely different, it could be going to work, you’re looking at your phone, or you’re checking the prices at work during your lunch break and then you go back to work.
You need to find your own balance and figure those things out, because your lifestyle is going to be different than my lifestyle or somebody else’s lifestyle and you need to figure out what works for you and making it work, because ultimately it’s about you and making the puzzle pieces to fit with you and your lifestyle.
And then in the end, everything, once it comes together, the rest of it is pretty simple, because you put on a few trades, let them do their thing, take up profit into strength, collect the money, whether you withdraw it, whether you don’t, it’s up to you, if you have enough money for living, then, of course, you can just let your account grow and so on for retirement purposes.
In either case, the balancing effect, it takes time to figure it out, but the more difficult part is of course at the beginning, when you’re getting started, because you’re still on those wobbly legs, trying to figure those things out.
How do you know you are getting close to success?
I like this question because I find that there are a lot of people that I’ve talked to in the past that are very close to a successful point within their trading. It might be a different type of trading than I do, but I see that they’re close to their trading, and I often would say that you can see that you’re getting close to trading when you’re at the point of giving up. When you’re very, very close to giving up, you’re giving up, and the next day you pick it back up, and then you’re giving up again.
When you have a big problem, when you have a problem that presents itself, and there’s a big issue behind it and you get emotional about it, that’s ultimately your big test. When you have this big test, to figuring something out, and you go beyond it, and you are successful and you go past it and you make it work, then that’s it, then the rest is history because you’ve passed the test, you’ve passed the difficult part.
The rest is about doing things consistently because now you’ve figured it out, you know what you need to do to move forward. Grant it you might not make 50 thousand dollars the next day and get yourself out of a hole or a jam, but now you know the process, things will start to click, you’ve gotten beyond it.
And it’s often times at the most difficult point, it’s at the apex, where at those difficult points where everything starts to come together, because now you see it, it’s very tough, it’s a struggle, pushing past your boundaries, when you get past that, when your heart starts pumping more than 15 minutes, it builds more vessels and so forth and arteries, and the same thing here.
As you go past it, personally, as you go past it psychologically, mentally, emotionally, intellectually, as you get beyond a certain hurdle or a certain problem, all of a sudden you got it.
Once you got it, and you go beyond it, then everything else falls into place, and then as you build your account, that just takes time, that’s just part of trading, you’re just taking time to build that account.
You might not be starting with a 5 million dollar account. You might be starting with a thousand dollar account or 5 thousand dollar account, and just the growth process of that is just a lot slower than a 5 million dollar account. And that’s just the natural growth part behind money and growth part behind trading.
But how do you know you’re getting close? It’s when you’re at that break, when you’re at that point to quitting, you’re probably getting close, because you’ve put in the time, the energy, you’ve put in all the effort, the study time, everything, and then you’ve gotten close, it’s about getting to that edge and going beyond it.
It’s not about putting in 10 thousand hours, because airline pilots, I think they only put on two thousand or three thousand hours of flying time, and the reason why they can skip those 8 thousand hours, instead of doing ten thousand hours, they do two to three thousand hours, the reason they do that is because they go through simulations, they see the issues, they see the mistakes, they see the problems.
The same thing here, when you create these situations of problems, these hurdles, it allows you to compress those 10 thousand hours to maybe 2 thousand hours or one thousand hours, something that also a mentor or a coach helps you do.
Being aware of yourself, how you’re doing, seeing yourself in the mirror, your awareness factor making changes and getting into these hurdles, getting into these problems and situations and going beyond it, that’s ultimately how you know you’re getting close to those success points, or getting close to figuring things out.
Thanks for joining me, I hope you found some things to think about, some things to look in the mirror and just evaluate and see yourself at how things are really going within your trading.