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Hey! It’s Sasha Evdakov welcome to the stock market recap it is October 29th 2015 and this week's lesson is all about mentalities so we're going to talk about getting past mental hurdles, problems and obstacles.
That's my goal of this week's lesson. Now this week's lesson is going to be a little bit shorter last week I mentioned that I have a couple of things going on here this week and that's just keeping the little busy in occupied. I’m still going to try and do a little bit of a nice lesson for you and just go over some of the stocks and how they're moving, acting and behaving based on what we were talking about this last week in the last recap.
Now if you haven't been to the website recently remember that we do have the penny stock book that's been released quite a handful of people already have it. So the penny stock book if you go to the Tradersfly.com website and just go down to books and you should be able to see the Penny Stock Book, a handful of people already wrote me back saying that it's a great book very focused on those less than $10 stock.
Let's say up here and up here that these lines they don't hit him perfectly just like if you meet your friend for dinner or for lunch they don't always come exactly at noon or one o'clock they are minute early minute later you know they might meet you outside or inside so there's a lot of variables and factors and the same thing here in stocks everybody's always trying to buy at the lowest point and sell it at the highest possible price.
We're all trying to do that and the more you’re trying to do that, the less things sometimes work out and sometimes things keep pushing higher so be mindful.
Here in the Dow Jones if you look at the SPY, Spiders the same thing is really happening here. We have a resistance line or region right here you can see that little tight region so if you're looking at our line here watching these two little lines really ideally you're watching the highest point of these lines right here so that way you're not getting whipsawed out but here we broke this critical line right here, this line of support right here or resistance support and resistance are the same lines it just depends if the prices above or below it.
This line used to be a line of resistance but now we broke it right here, now it becomes support and you can see we were moving in the 200 day moving average and then we bounced off of that so now again we're isolating playing around and that's the Spiders.
If we look at Composite, again the same thing and this is what the market is typically led by the market is typically led by the Composite and as that Composite this is where all the tech companies are this is where all the big boys are hanging out and the composite’s typically what you want to watch. This is what I really watch this composite.
Here same thing everything's in alignment so all three charts are working out well, meaning they're all in congruence and went charts are in congruence the Dow, the S&P, the ROT, the SPX, IWM when all of them are doing the same kind of thing that means everything is moving together you have four wheels on the road.
If one of them was telling you something completely different then that means the market isn't moving properly and then there's some things you should be watching out for or some other things that maybe you should be prepared for, such as pullbacks, retracement, something’s acting weak depending on which ones acting weak but for the time being everything looks to be in alignment.
We are still in this region or range and because we are in this region or range you could see some sideways action we are already fairly extended from the lows of that bounce and it's not something that I personally like. I would have personally like that we sold off coming into this resistance area like coming into here and then I wish we would have sold off and the reason for that is it just builds better charts.
It builds better charts when you have a nice selloff you can buy things are lower prices and you know for me I can trade them to the upside to the downside. I just think things are a little extended but that doesn't mean I won't trade them to the upside.
Like on Amazon we've been trading Amazon to the upside the last couple days and this is one we got in we put on some longer positions longer diagonals got some stock, these kind of things. Looking at this resistance line you can see this has a stair-step pattern approach but again you take your profits as things continue to move up.
Apple had earnings as well but I wouldn't trade this one or go long and we have no position in this right now. I would look for a position right now I'm looking for a position and I would get in it right here if it clears this on heavy volume and the reason I would wait for that is look at this line right here this is the 200 day moving average and that line is right there and also we have the support and the resistance line really its resistance now right here.
Everything is pointing right here in this little region or area. That little region or area may actually come here and it may it may happen right here, it may happen later, it may happen over here. The stock may come up, sell back off, push a little bit and then power through.
Facebook, this one is powering higher watch out for earnings but this one's been doing well since again breaking those resistance lines make a nice new highs looking good over a hundred, pretty good movement.
GoPro we talked about this one on the shortened here with the earnings, this ones, I don't see a good future for GoPro even though they make fantastic cameras as far as a stock as far as an investment based on what the action is today it's going to take a little bit of time, I don't see the value here. You could see this one get back to, well doing a calculation this is 56 points let’s say give or take, 24 points so taking it down we can see something, 15 bucks maybe give or take 15 bucks maybe less but who knows.
IBM, since selling off on the earnings you can see the stock continues to move lower on heavy volume there it is earnings took it down right here on this bar in sixteen million shares would pop then tried to get a little bit higher with the people taking their profits and then again 15 million to the downside.
You can see this long resistance and support line right here breaking again. This one is acting weak and they've been talking about it and with the weakness the way it showing, it’s in the down trend right now so 121.10 might be a value buy for some people but you know it'll play around here for a little bit. Still it doesn't happen overnight.
Buffalo Wild Wings, earnings, took the stock down here we got about 30-40 points coming off, 33 from here and we had 54 from the highs. This one again from the highs selloff major that usually means a little bit of trouble coming as well, could it come back to that 120? Absolutely, will it? We’ll see, time will tell but with that speed when things are cutting, when things are moving fast. How fast does it take to stop a car moving five miles an hour versus a car moving a hundred miles an hour and $33 moved to the downside is a fast move that's a fast-move.
Think of that as going hundred and eighty miles an hour in the car so it takes a lot of energy to stop that move of course you may get a little bit of breaks meaning you may get a little pop up here and then again a selloff but takes a lot of energy, a lot of people's step in to stop that moving train, moving car, moving airplane, or whatever analogy you want to use.
McDonalds, we talked about this one, the previous week still continues to move nicely today a little bit of a down day but you can see we had a little pop couple days of popm pull back a little and get a pop. It's pushing up, pushing well to the upside moving exactly as it should, holding up well.
CMG, we talked about this one upward trending support line break. As we broke that exactly like from the technical analysis course if you got the blue course the technical analysis course the big one with hours of training then this is classic move hold up, hold up, pushing down and even on this last day right here, before it break lower it’s already breaking it and then what do you think's going to happen with earnings? What do you think's going to happen with earnings?
People know, and you know a lot of people say they don't they don't know about earnings. The big boys don't know, or the operators don't, of course they know, they know more than what we know and they're not supposed to know, they're not supposed to know and everybody says that they don't know but they know.
So why do you think it's been pushing lower? and then what do we get? Another major selloff and then play around a little bit here lower and lower then pop and again we continued lower for few days. One day at a seven, come on so they know.
This game is different you have to watch the bigger picture and understand the bigger picture behind things. It's all about knowing and understanding your mentality and your psychologoy and really how things play out.
Here’s Netflix, popping again come in at this level. I was looking for it to roll over but you know they're holding it up so that's what's happening but looking at the bigger picture and looking at how things move how things behave it's really about knowing and understanding your own mentality, knowing your hurdles, your problems, or obstacles which is really the focus of this week's recap.
Lesson About Trading Mentalities
What I wanted to share with you is that you know most people in the world and I would say the majority probably and if I was to pick a number I'd say thirty to forty percent of the people is they don't really know or understand what's happening under their own skin or surface and maybe they know but they are not aware of it and even if they are aware of it, they aren’t able to make the changes or adjustments because first you have to be, number one you have to be aware of what's going on within you.
You also need to be able to make the changes and adjustments so for example if you're looking to lose weight and let's just say you're seven hundred pounds, I'm just throwing a figure out there. If you're seven hundred pounds you might not even be aware that you need to lose weight, I know this may sound extreme but it might be the mentality is not even there yet for you to lose weight.
Now if you are a thousand pounds you know you might say “Hey now it's a wake-up call” Now you might be aware of it but you might be to the point where you can't lose that way because you just physically can't you might need to go to a doctor and so forth.
The earlier you can hit these points then you can do something about it and the same thing in trading so if you’re at 250 pounds and you're not aware that you need to lose weight you still have some cushion or room that ok well if I'm at 275-290 now I probably need to lose some weight, you know based on your figure and so forth you know based on what the doctor says and evaluates for you but you might start now saying “okay now I'm aware that I need to lose some weight”
After you get to this point you actually have to make the changes you have to do the actions and most people, they don't even get to the action part, they're not in the awareness part, they have that lack of the mentality of awareness to be able to get to that point.
They are not honest with themselves saying “hey ok well I don't really need to lose weight I'm good I'm good I feel good I feel fine” so if you get to a certain level you need to start being aware of these things and then you need to take action and action as a whole another step beyond that beyond the awareness.
I'm just trying to simplify this down there's going to be a little sub-steps within this whole process and I'm not looking to nitpick anybody on their way, on their sacks, on their the type of things that they like, that they don't like, where they like to spend their money, where they don't like to spend their money.
It's all just about using it as an example it's all just about giving you an apt perspective. So for example let's do another one.
Let's talk about the mentality of going to the grocery stores, so for me looking at overall, being aware of what's in the grocery store I'm looking at things. For me the way I see things as when I walk into a grocery store or store in general looking to shop and buy food and products I’m looking and I'm seeing that 90% of the things in there are pretty much junk, you know and then the top 10% is what I want, is what I want to fuel my body. I want clean energy, I want the best gasoline for my body, for my brain, for my heart, for my health.
I tend to stick within the Greens within the fresh area within the fresh aisle. Anything that’s typically packaged, anything that's in the aisles is typically prepackaged and it’s typically not as good and healthy but most people aren’t aware of that or we've been trained by marketing through consumers, advertising and just a lot of other things saying well it's not as bad or not as in moderation and you may say and you may argue that ok those things are OK to some level but if I want the best of the best.
If I want things to go smoothly to the next level if I’m always looking to grow, if I'm always looking to improve then I want the best things that I can possibly get and for me then I will stay in that 10 percent of those greens or at 10% in the healthy area of the store.
One of the great things or sayings that applies in this context is 90% of the things are mental and 10% are external or the other way you can look at it is 10% of the things that happened to you are just things that happened to you and 90% of the effect or the result is how you react to those things.
Start looking at all these things the 90-10 principle and 80-20 principle and there are so many principles that stat flashing around and you really don't know which one to follow. Personally I just keep it very simple, I just look at ok be better and just try and do the best that I can do. So if I just remember be better then I know that ok let me just continue to make improvements and that just be better, be better as a human, be better as a person and be kinder.
Just continue to be better continue to improve and when you start looking at stocks and how this all applies to the stock market, you know taking things from the grocery store from the way taking things from your actions, reactions, awareness putting all these things together you're just looking to get through that awareness part and with the stock market you build so much energy initially, you build a lot of energy from your knowledge and education and when you have this knowledge and education you build more confidence.
There are a lot of hurdles that'll come up along your trades. There's a lot of issues of trade, that would don't work out and it really sucks your mentality, it sucks your energy from your psychology and really sometimes makes you feel down.
Back when I first started trading and probably many of you have heard the story through one of the courses or the books. I started trading probably when I was 13-14 years old I mean I didn't really traded there on my own but I started trading very young. My mom was doing a lot of the choosing of the stocks and she wasn't as computer savvy so I actually executed a lot of the trades I looked at charts.
I started studying and stumbling across the other methods and strategies to trade in the market because you know she asked me to put money into this stock or buy the stock or buy this position but you know I just slowly started dabbling.
Now things accelerated, I started putting in my own money under her account, made trades and executed them and at that time I was already running a successful web development business and that was when there weren't a lot of web businesses out there and from there actually if many of you read some of my books or my stories, I actually sold one of my blog businesses for over $100,000 there and took the money and continue to invest in the market.
That's where I got a lot of the money behind investing, trading and there's a lot of websites and successful things that I did over the years that led me to that point but it's a stepping stone that not every trade, not every business decision, not every single action that you do is going to work out, even on a day-to-day basis, even on a life basis.
There's going to be hurdles and steps and challenges that you have to overcome and some of those you know come in very different ways. Some of those are physical, some of those are physical that you actually can feel, hold and touch and a lot of those are mental and the physical ones are usually a lot easier to take care because the physical ones you can go ahead and solve them through money then you don't have as big of a problem.
The mental ones, the mental problems are very difficult to solve because you can't solve it with money. So for example if someone gets in a car accident or let's just say I get into a car accident, I can go ahead and just purchase a brand new car money will solve this problem and it's very simple as long as I wasn't hurt and everything like that. I can easily replace a car I just go ahead buy a new car I'm done, I'm ready, I'm set, and I'm good to go.
Mental problems on the other hand, if the psychology of me getting in a car accident now I don't want to drive anymore, this is going to really impact me for the rest of my life and in the market if you have those bad trades, killer trade that really drain you and you don't even want to put on a trade then you won't be able to continue and progress further.
In the long scheme of things, if you look at the long-term you have to learn that you have to continue to put on trade you have to continue to be active continue to trade that in the long term you'll be ahead but you’re going to make some stupid decisions. You’re going to make some decisions that aren’t in your favor and things to learn from.
Just like when you're younger and when you're driving you need to learn that you can't be speeding if you got a speeding ticket before or you shouldn't be and then you need to learn that you shouldn't be driving recklessly or running through red lights because accidents can happen and if you've ever been in an accident or you've ever been pulled over then maybe the consequences were minimal so if it's just a $200 ticket at that time you might have paid $200, $400 whatever the ticket charge was and then maybe three months you were driving carefully and then six months later you’re back to doing what you were doing.
In the market you technically can do the same thing it technically does happen because of just our own mentality. What happens is we get into trades then we get into it we feel comfortable we start putting our positions more than what we should and then we get big spikes, huge spikes.
Like for example in Netflix and Apple whatever 30 points spikes they take us out and then you say “I won't do that again or I won't trade earnings again and then time goes on you start making some more money you make more successful trades and then you get away from those rules, just like you get away from following the speed limit or you know running yellow lights and then boom, again stock goes down 30 points and you're out three thousand dollars or thirty thousand dollars depending on how many shares you have.
It really drains you mentally and a lot of that has to do with discipline and if you can be disciplined, disciplined to stick to your strategy it'll keep you out of trouble.
If you can be disciplined to be aware of your surroundings of how you’re acting, how you're behaving, if you can be disciplined that hey I'm not really kind to those people next door let me go over and say hi or hey I haven't been really a good neighbor or hey you know let me go and pick up the phone and just see how this friend is doing even though maybe they didn't call me for their birthday you know or for my birthday you know let me just go ahead and pick up the phone and just reach out to them and be the better person because you're aware of that.
You let your ego go and you continue to try and become better and in the market just try and continue to be better so I know that there's phrases and discussions that people say okay don't try don't try, you just need to take action but just a word just using a word that you continue to make improvements but you fine-tune things and you fine-tune your strategy and you fine-tune your positions to continue to be better to the point where these hurdles, problems and obstacles you're always aware of them.
One of the best ways that I found that works really well and a guy by the name of Dan Sheridan always talks about it is that every time you have a position you go ahead and towards the end of the day you do a fire drill and you say what if that stock jumped five points, what if they dropped five points, what if that stock went up 10%, what If it dropped 10%, what if the moon turns blue, what if something happens because in the market it's really about being prepared for those unexpected situations.
It's about being prepared for situations that may not be to your favor and if you can prepare for those in advance and manage your risk then it’ll keep you out of some major and dangerous trouble but if you're the type of person that’s always jumping in and out of things not really being aware of what you're doing just kind of looking for a quick buck.
Kind of looking for a quick stop to trade looking to make a few quick dollars, not really understanding strategies, not really understanding patterns technical announces. How stocks move, how stocks behave, volatility, learning about all these different things, if you're not aware of these things then you're just going to be hopping in and out of trades and trying to get lucky I mean in the end that's really what it will come down to.
Whereas if you combine your strategy saying okay, for every time that stock goes up $1 I will take off 25% of my shares then the next time stock goes up $1 you go ahead and peel off another 25% of those shares. So you’re constantly taking profits in the strength and then if the stock drops $2 you're out completely and that'll keep you profitable.
You have to start coming up with things that really keep you profitable, that work for you because there's no real gold and magic bullet rule system for everybody. Everybody has different risk tolerances; everybody has different goals in the market and depending on things move, behave and act. You might see something that's a lot different than what everybody else sees that doesn't mean your analysis is wrong it also depends on the time frame that you're looking to achieve in the future.
For some people they may invest in a stock at $10 per share price and for them it's fine holding onto a $10 stock that may not move to $20 or $30 for ten or twenty years. You have to define these things and sometimes these mentalities really just suck you dry because once you execute a bad trade when you execute a really bad trade sometimes you just don't want to trade and when you don't want to trade it's going to be more difficult for you to get back in.
Start slowly, so one of the things that I would advise it's kind of like working out or training when I used to teach martial arts and a lot more was we always started with a 15 minute lesson or 25 minute lesson when you're just learning to train and get back into things and then you pick it up then you go to two days a week, you know twenty thirty minutes, then you go to three days a week 1 hour, then you go to four days a week and maybe do an hour and a half hour or two hour lesson.
You start continuing to build all these things all this endurance but if you're simply just trying to do things very quick and just jump back in trading a thousand shares this is really where it's going to be really dangerous because what happens is then if you take a major loss. If you take a huge loss from a stock and you didn't do the right things it's going to be very difficult for you to be consistent with an even larger position and this is where people get burned.
This is where people lose incredibly big is because they then doubled down, then they try to go ahead and add even more on the next position to make their money back and that's where things become very dangerous because you're not clear minded, you're not trading properly, you're not seeing something correct in the market, you need to take a step back and evaluate things.
Trade later and get back in the swing of things or get back into a rhythm and then continue to build, build your strategy, build your awareness, build your actions steps and you'll grow but you have to keep doing it. I mean if you missed the first five baskets when you played basketball and you stopped right there then you could never become a professional you could never continue.
You have to keep going and even professionals miss baskets in basketball but you have to keep, you have to keep shooting, you have to keep moving and developing your craft, developing your techniques, developing your mindset, your mentality.
It’s all about just moving forward and just becoming better so be better whether that's in the market, in regular life contributing to other people, helping other people, giving him an extra dollars giving them an extra hour of your time just continue to be better evolve because hurdles, obstacles and problems will come but the way to overcome them is baby steps.
Little steps, step-by-step just continue to move forward.
Final Words & Wrap Up
Alright I hope this recap is little helpful. I know we didn't talk a lot about stocks more of audio little helpful motivational guide hopefully for you. Those of you that are stuck just continue to move, continue to learn. Learning sometimes will give you that energetic boost when you learn and get a new insight putting things together.
We got two main courses that I still want to release in the stock market and then after that really we’re going to take a break with course material but after these two courses especially after the final course of how to enter and manage an exit your trades. After that course is released everything should come to the light. Everything should be coming together for you.
We got that one major course coming out there next year sometime of how to enter and managed your position, how to exit your position, putting everything to get everything together there and then really you should be rock solid in this and you know you'll have that education but you're going to have to be aware of your own mentality.
‘You're going to have to be aware of your hurdles of what you’re doing. Are you over trading or under trading, are you getting into late, getting into early and then you'll have to make adjustments and those are some things that a lot of people can help you with. You’re going to have to be aware of this and be more open-minded to those things so don't let your ego cloud your judgment because that's the only way to succeed in this business is to be honest with where you're at in your life, in your trades, what's happening and that's why a lot of people just fail at the market is because they can't be honest with themselves of where they are what they're doing wrong.
It's just an ego thing so get rid of that ego, get rid of that that negative vibe and energy from all parts of your life and just go out contribute to other people help them out everything else make it flow. Be better, be kinder, continue to evolve and you'll get there.
Alright thanks for joining me should be back to normal schedule next week. Love and appreciate all your emails, shoot me an email, shoot me a tweet regarding if you want these recaps to be converted to a podcast or an audio format will be glad to do that for you within the next you know as time moves on we’ll go ahead and put it on the schedule.
Thanks again for joining me, truly appreciate all the fellowship, the lovely messages that you guys send me, from the little gifts that I get i mean just hearing from you commenting from you it's just wonderful so you know keep doing it, keep on going, keep moving, and this business just takes time to get there.
Alright thanks again and I’ll see you next week.