Transcript

Clay: Hey, it’s Clay. Real quick, before I get to the episode, I want to bring your attention to a desk that I recently got for the cottage that I have and Autonomous is the company and they sent me a desk to do a review on and I wanted to just share it with you because, spoiler alert, I was very, very pleased with the desk. However, I will say that the review that I did, I don’t know if I was the only one to do it, but I put a little spin on it whereas I open it up and you see me unbox the entire thing. So this was not some sort of review where I had it all scripted out and I knew what I was going to say or that the company sent me anything. I mean, it could have been a review that did not turn out very well for the company. They were aware of it and they said, “That’s fine, I just want you to give your honest thoughts.”
Clay: And, that’s what I did. Like I said, I enjoy it very, very much so. It’s awesome and you can see how it all played out. So if you’re interested, if you’re in the market for maybe a new desk and the nice thing about this desk is, it’s one of those that becomes a standing desk or a sitting desk and I love standing desks. They’ve really helped out my back and I don’t know about you, but if you’re in a situation where you sit around quite a bit, which, yes, us traders, we do sit. But, for me, my back was aching and I was sore and I couldn’t quite figure it out, but then years ago I changed to a standing desk and, while I’m not going to say that it was strictly the standing desk that made all the difference, there is no doubt in my mind that the standing did make a very big difference.
Clay: In fact, there’s all sorts of scientific research out there that shows, yeah, that standing up can be very beneficial for you because the whole sitting down position, especially for extended periods of time, really isn’t that healthy for you. But, it is a standing desk, but it’s all automated so you can press buttons and it rises and falls back to whatever height you want it. So definitely check it out. If you go to claytrader dot com forward slash desk. Again, claytrader dot com forward slash desk. That’s where you can find the review video. There’s also a link there where if you click on it you’ll get a special deal. So, thanks to Autonomous for doing that. And, like I said, it was totally a non-scripted review, so if you want just straight up real thoughts as you see me unbox the entire thing. Claytrader dot com forward slash desk.
Clay: All right, let’s get to the episode. This is Stock Trade Reality Podcast, Episode 281.
Announcer: This is the Stock Trading Reality Podcast where you get to see the realistic side of a trader’s journey. Get inspired and stay motivated by everyday normal people who are currently on their journey to trading success. And, this is your host. He’s discovered one dollar bills are a great teaching tool. Clay Trader.
Clay: I’m well aware that many of you are probably going to be thinking, geez, Clay, did you just now figure that out? But, yes, I just figured it out. I’m a young parent. My oldest is only eight so I’m still figuring out some of these things that other people maybe have already figured out a long time ago, or who knows, maybe you’re like, yeah, Clay, I don’t have any kids and that would still make sense. But, dollar bills, what a valuable learning lesson.
Clay: So, you get multiple dollar bills and then you sit there and you say, okay, and who I had this with was Joy, my oldest. Okay, you’ve got to put some money into this and then you can have some spending money and you put a couple of more dollars there, and then you’ve got to add some savings and you’ve got to put your money there. It’s just very easy to visualize how money should go to different areas.
Clay: And, I mean, it was fun to see Joy, her eyes just kind of light up like, oh, okay, yeah, so if I get money, then the money needs to be divided, but obviously not divided in the sense of like you cut it up like a little child could think. But yeah, no, if you have $10 well then, two dollars need to go here, three dollars need to go there, four dollars need to go there, and yes, dollar bills, I have just learned are truly a valuable, valuable learning lesson. And, I actually kind of snuck recorded it because I was like, oh yeah, this is actually working out pretty well. So I pulled out my phone and recorded it.
Clay: I’m still thinking about whether or not I’ll put it on YouTube. Maybe by the time this airs and goes live it’ll already be on YouTube just as kind of a fun little video but it was amazing to see how she picked things up and she understood how you need to divide up your money. You need to put some of your money aside and some of the money, the core lesson that I was trying to teach and why I’m thinking about posting it to the YouTube channel was, well, you want to save some money. And part of savings is you want that money to grow over time, and the way it grows over time is, you invest it. And that’s a good illustration that worked out. But yeah, if you’re looking to make at least, for me, it was just a very valuable tool to start to teach my kids about money. So, single dollar bills, who knew that they could be such a great teaching tool?
Clay: As for out guest today, we had a good episode, this was good, it started off rough, but in just an iron sharpens iron kind of way, Luis, he’s a member and as he started to talk and kind of walk through his strategy and what he was doing, I have no shame saying, you’ll probably be able to pick it up in the interview. I was a little worried. I was a little skeptical. I was very uh, what’s going on here, Luis? Just because, like I said, the idea here is we want to get better. And you don’t get better by oh, it’s okay, by patting people on the head and just letting them do whatever. No, I pressed him on some things. I questioned him on some things. And there were some things where it wasn’t quite adding up. I mean, he’s saying certain things, but then behaving in other ways. So I was like okay, then why haven’t you done this?
Clay: But, moral of the story, he took it like it was intended. Just as some constructive criticism, just trying to kind of iron out details. And then upon pressing more and more, yeah, it started off with a couple of potential red flags but as I talked with Luis more and more throughout the… As you’ll notice, then there are more green flags that popped up, and more green flags, and he’s still got work to do, but he’s definitely… I mean, he’s only 19 so he’s a younger person but he’s a quality solid individual. I think he’s got a bright future ahead of him. And that’s why I also kind of… like I said, harsh isn’t the right word, but I just didn’t beat around the bush because that’s not how people get better. And if you truly care about somebody then you’re going to question them, you’re going to ask the tough questions, you’re going to press certain issues. And that’s what I did here because, like I said, I think he’s got great potential. He’s already demonstrated some great potential but I just wanted to make sure that he wasn’t suffering from what a lot of people suffer from where they have some success and then they start to… the wheels start to fall off the bus.
Clay: But, as of right now, there is some things in my mind that might… but there is also plenty of good things that he seems to be doing very well. So with that being said, let’s hear about Luis and his journey.
Clay: Luis, welcome to the show.
Luis: Hey, Clay, thank you for having me.
Clay: Yeah, you bet. I appreciate you volunteering to be here, taking some time out of your… Well, I guess, where are you located at geographically?
Luis: Right now I’m in Maryland.
Clay: Okay, so you’re Eastern Time Zone so-
Luis: Yeah-
Clay: … taking some time out of your late morning, early afternoon, however you want to look at that. But, I’m excited to hear your journey. Have we ever spoken before other than that email or?
Luis: Just like once in the group chat.
Clay: Okay, cool. So in other words, I know very little about your journey. Is that a fair statement then?
Luis: Yup, yeah, very little.
Clay: Okay. Excellent. Well, there we go. So for those of you listeners out there that’s kind of the… The goal around the podcast is, we just want to keep this as real as unscripted as possible, as if Luis and I are just sitting down in a coffee shop and you get to be a fly on the wall and listen. So I look forward to, just like you hopefully as a listener, to hear about Luis and his journey. So on that note, where did all this start for you, Luis? I mean, where did you hear about the markets and what sort of events and dynamics led you to the point where you made the decision that you wanted to get a little bit more involved and hands on with that?
Luis: Yeah, so, where all this started really was elementary school where we had like a bring your parent to work day, bring your parent to school day, excuse me. And they were explaining to us how if just bought shares of Disney by the time you graduated high school, you would be well off depending on how many you bought. So like to me, at that time, it was just craziness and I come from foreign parents and so I told them about it. And they were like, no, that’s not true.
Clay: No, that’s not true. False. That’s funny.
Luis: Yeah, because a little background, I’m Mexican so I come all the way from Mexico, [Spanish 00:08:29], but I was in the education system here in America so through and through I was raised here. That’s the first time I heard about the stock market. And then, when I got involved was in 2016 when Bit Coin was just going crazy. Just seeing how crazy Bit Coin was moving made me want to get in so I=
Clay: Now did you… Not to cut you off, did you hear about Bit Coin just because you were watching the nightly news or reading something online? Where did you actually, I mean, Bit Coin was everywhere. I mean, it was absolutely crazy, but where did you actually come across it?
Luis: I just came across it online. At that time there was a lot of YouTube videos on how to get rich on Bit Coin, you know what I mean? And there were so many articles projecting it to go some crazy number, to get in now.
Clay: Yeah, that’s true. It always makes me laugh, makes me a little angry, but you see a lot of the online, I guess, gurus and they just hop from one thing to another. And some of these people, as a trader, I see the people that are all of a sudden talking about Bit Coin and I’m just like, okay. Now, I’m not really qualified to say that those people don’t understand all these other things we’re talking about I’m not involved so, I mean, I have no place to stand here.
Clay: But, to see some of these people who shall remain nameless, start to talk about Bit Coin, I’m just like you… And the funny part was, I mean, there are ads playing through and through and these same people talking about it when it was at 15,000 and then 17,000 and then 18,000 and they were still talking about it. And for a reference point maybe if you’re newer to the markets, Bit Coin, what did it top out at? Luis, do you remember? Was it 18,000 or 20,000? I can never remember.
Luis: I think it was 20.
Clay: Was it 20? Yeah, so those people were still talking about it at 20,000. And then, as a reference point, it went from 20,000 all the way down to, over time, I don’t know, I think it’s gotten as low as 5,000. Point being that all these people that… these gurus that we’re talking about, all of a sudden they’re in the Bit Coin market. Yeah, they led the sheep right to the slaughter on that one. Then of course, they don’t talk about Bit Coin anymore. It’s moved on from the headlines and there they go. I guess, where do you fit in, in all this Bit Coin? You heard about. Did you actually buy some or? Tell us about that.
Luis: Yeah, I was 16 years old so I really couldn’t buy a whole Bit Coin so I was just trading and I think I put in $100 and I was trading that $100 just different coins and seeing where it took me, but I mean, at that time I didn’t make anything. You just see the chart and you don’t know what it means.
Clay: Where you just using line charts at that time?
Luis: I was using the bar charts.
Clay: Okay.
Luis: But at that point you just don’t know what they mean. It’s like a mystery. So I just took a break from it and really where I got started was this October-November. What I did was, I grabbed $150 and I was like, I’m going to learn, but the only way I’m going to learn stocks is if I just do it and go through the journey like everybody else. So I just threw $150 in-
Clay: What did you use for your broker?
Luis: Oh, I used Fidelity.
Clay: Okay.
Luis: So I used Fidelity and I just started from there and the philosophy I took was seek and you will find and that’s where I found you.
Clay: Now what was your strategy going in? So you threw money in, and I mean, what was your goal? Were you looking to swing trade? Were you looking at day trade? I’m assuming it was stocks you wanted to trade, but what was your quote, unquote, business plan, at that point in time when you funded that Fidelity account with $150?
Luis: At that point, my only plan was to just throw that $150 and see where it took me so, if I lost $150, it was gone and I was just counting it as tuition for learning so from there I just threw that money in and that’s when I started researching and just looking everywhere and everywhere and that’s when I tried to make a strategy for swing trading. Because I work a full-time job so it’s not easy for me to just be looking at the chart every day all day. Do you know what I mean?
Clay: Absolutely. I mean, you’re definitely not alone in that regard-
Luis: Yeah.
Clay: … There are a lot of people where, I suppose some jobs you can, but it always makes me quiver when people are like, yeah, I got about 10 minutes where I can sneak to the bathroom. So I pull out my phone and then I try to put in a couple day trades real quick. I’m just like, okay, you’re just asking to get slaughtered there, but at least you understood from the get go that swing trading would be the best method for you. Were you looking at certain types of stocks or, I mean, what was your ideal scenario, your ideal set up at that point?
Luis: Yes, at that point I’m just brand new. I have no clue what set ups are. I have no clue what patterns are. I just know how to read the bar chart and even then, it was just, I was just lost, complete lost. And, it just took a long time, but I didn’t give up. You know what I mean? I just kept going and going and learning and learning. I lost money but just kept going and then you really helped a lot. Because throughout that journey I just encountered you because I’d been doing like drop ship and all that stuff trying to get into the make money online scene but… so I know what gurus, what they preach and what they say and it’s really nothing. They’re just trying to get money from you, really.
Clay: Exactly. How did drop shipping go? Because, I bet, a lot of listeners are thinking about it and, I mean, listen, I’m not asking you to bash it or anything like that. I mean, I have my opinion on it because I did drop shipping before drop shipping was really even known, but I mean, how did your experience go with it?
Luis: I mean, it’s really a hard business to get into and the business model is nothing really. It takes a lot of work for it to work. Really, it is what it is. I just failed at it, really. And that was okay, I was willing to take that step forward and see if it would work for me, but it just doesn’t work out for everybody.
Clay: It was a lot of work in what ways?
Luis: Yeah, I mean, you just had to be on top of social media, you had to know what products were going in, you had to be on top of everything and like be in with the trend and what everybody’s selling, know what people are selling and how to sell it, how to market it. It’s an easy concept but to put it into practice is really hard if you don’t know what you’re doing.
Clay: Well said, and I think that’s what a lot of people fail to realize, is drop shipping… It absolutely sounds great, you’re right. It’s like, oh wow, so I can own this virtual inventory so I don’t need anything in my garage or anywhere. It takes no physical space but I just sit here and I’m like the little master mind that orchestrates where all these things go. It does, it sounds great and it’s possible. Like I said, that’s what I did back in college. I did it with books. I put a little unique twist on it. But, my point here to you as the listeners, I can say that we’re relatively qualified to talk about drop shipping. Like I said, I was doing it back in 2004 and five before it was even a thing-
Luis: Wow.
Clay: … That’s how I paid for my college and funded my trading accounts and all that sort of stuff. But, the tricky part here is that drop shipping is basically like the stock market and trading stocks because products have values and these values are always going to be fluctuating based off of well, how much demand there is. So, I mean, it’s just like anything. A stock has supply and demand and a product has supply and demand. The problem with drop shipping though is when you take the supply, I mean, you actually are responsible for something.
Clay: And in the stock market, let’s just say something… You’re wrong. And you’re like okay, well, I thought this was going to increase in value but it didn’t. All right. So what can you do? You can just sell. You can just sell to the market because it’s a very liquid market. But in drop shipping, if values drop, then it’s going to be very difficult to even sell that item. And selling the item still requires work, it requires time. Whereas again, in the market, your quote, unquote, work, your time is the click of a button. Boom. Okay, gone.
Luis: Yup.
Clay: Drop shipping… there’s a lot more stuff that goes into it and Luis, the margins are relatively small, aren’t they? It’s not like you’re making hundreds of dollars for selling one product. Am I accurate in that that the margins are pretty small?
Luis: Yeah, and I mean, it really just depends on what you’re selling. Most of the time you’re not going to make anything. You’re pretty much paying your whole day’s worth of work for maybe $20 on one product. You might get a sale, you might not.
Clay: And I would assume, correct me if I’m wrong, that the higher the profit margins are, that just means the more risk you need to take because well, now I’ve got to be buying a much more expensive item. And, when you do that, okay, you own it just like a stock, but I hope that I can sell it for more than it’s worth because if I can’t then I’m literally stuck with this thing and it’ll be a challenge to have to sell it. And when I say challenge, again, I just mean that from a time perspective. When you contrast that with the markets, that’s just clicking a button, but in drop shipping there’s more that goes into that and… Were you one of those people that went to the stores and were like scanning things and stuff like that?
Luis: No, I was just going on like Chinese websites and just-
Clay: Okay.
Luis: … uploading the pictures to a website so it wasn’t that complicated but at the same… like you’re saying, it’s just not profitable if you just don’t know what you’re doing.
Clay: Well, and even if you do know what you’re doing, because the market can shift so fast with the demand for products, you can still get burnt even when you do know what you’re doing because, like I said, I mean, styles go out, needs go out, so it’s very difficult. Luis, and I appreciate the honest answer. It’s not like you’re sitting here saying you cannot make any money at it at all, and that’s not what I’m saying either. I’m just saying that there’s a lot more blood, sweat, and tears that go into it than what a lot of people are portraying.
Clay: We kind of got side tracked there, but like you said, you were trying the drop shipping stuff and you had gotten into the markets and I’m not quite sure where, I mean, where were we? You were talking about, you funded the account, you wanted to do swing trading because you had the job. I guess… Do you remember what we were talking about before I derailed the conversation?
Luis: Yeah, I just put in the money and really the whole thought process was, I’m going to lose this money, but what I will get out of it is $150 worth of knowledge. That’s really it. I just funded that account and from October to now, just grinding it out and really learning and just sitting down spending the hours learning what charts mean, learning what everything means, learning the economics behind everything. And you really helped throughout that process because, I mean, you’re straight to the point. I could be working, I could be doing anything just listening to you and then you’re explaining to the listener how it really is. You’re not putting any fluff into it. You know what I mean? Listening to you on YouTube is where I mostly see you, has helped tremendously.
Clay: Now, I mean, I’m curious, your thoughts, but you wanted to put in $150 to walk away with knowledge, right? Did I hear that right?
Luis: Yeah.
Clay: Was there ever any concern that the knowledge you’re walking away with is not actually the knowledge you should have? Because this is what I see happen quite a bit is, people, they take a loss, they lose money and then they’re like, oh, well, it was a good learning experience. And I say, well, what did you learn? And then they tell me what they thought they learned. And they did learn that, but the problem is they didn’t learn the right thing. In fact, they walked away with the wrong lesson or they misinterpreted the lesson that they should have learned. Are you, I mean, are you worried about that at all?
Luis: Really, I know I’m going to fail. Going into it you know you’re going to fail so if I got the right or the wrong lesson from it, it didn’t matter because eventually I would get the right lesson. Because when I committed to that $150, I knew I was going to keep funding it until I got it. In my head it’s like just keep funding it until you get it and you start making money. Like just fail, fail, fail, until you get it.
Clay: Okay, and I guess, I don’t know this, are you just inner circle or are you doing my courses too?
Luis: Right now I’m just inner circle.
Clay: Okay, okay.
Luis: Yeah.
Clay: Your quote, unquote, education, right now is just YouTube?
Luis: Yeah, YouTube and then I did buy some courses here and there, but it’s just, they explained to me what it means, but really with the markets it’s just getting that step of knowledge so I pretty much watched all of your YouTube videos and you give out content here and there and it’s really good information.
Clay: You do realize though, full disclosure, that my YouTube is very tip of the iceberg, right?
Luis: Oh, yeah, that’s what I mean. That’s the tip of the iceberg so, really diving into your courses is just… I can just imagine. You know what I mean?
Clay: So why… I’m not trying to sell this pro… I’m just asking out of curiosity’s sake, we’re having a conversation but, I mean why haven’t you dived into the courses then?
Luis: Honestly, I’ve just been trying out other courses, I found-
Clay: Luis, you’re killing me here. You’re telling me how great my YouTube videos are, and oh, I know it’s just tip of the iceberg, so I can’t imagine, but I’m just trying out other courses…
Luis: Yeah, so what I did… This is what I did. You’re my main YouTube guy and then I listen to another YouTube guy and then what I did was, I just got their course because they gave me their money management spreadsheet, which gives you the… You put in all your trades and then it gives you a report so it was just a crazy deal and then I just had to get it. But, really, where I get my experience from is just going in and just doing it and just learning from my mistakes.
Clay: But, again, I question, how do you know that you’re learning the right lesson from your mistakes?
Luis: Well, I don’t, but-
Clay: That doesn’t concern you at all?
Luis: Not really.
Clay: No? Okay. I guess, so how many times have you funded the account then?
Luis: Just once.
Clay: So the $150 is now worth how much?
Luis: I’m at 5,000.
Clay: You’re at 5,000. Okay, what have you been trading?
Luis: I saw your YouTube video with options and you were explaining how a member of the chat was really doing really good in options so then I started diving into options and then, it’s just a whole different world.
Clay: Okay.
Luis: Yeah.
Clay: And, okay. I’m just trying to reference point. It’s hard to know, I mean, for all, maybe you got it, but your approach has me… Can I just be honest with you?
Luis: No, go ahead.
Clay: It sounds like this. I love your stuff. You seem to be a great teacher. You seem like you could offer up a lot of knowledge, but I don’t want to spend any money on your courses because that means I don’t have money to trade with. Is that… It sounds like that’s what you’re telling yourself and the way you’re justifying that is… and I just, I learn better by doing. And the reason why I’m being up front is, I see this all the time where people, they take small accounts, they grow them and then, all of a sudden, just like that, it’s gone.
Luis: Yeah.
Clay: And I have all sort of videos. Maybe you’ve seen some of them with fool’s gold in the title. So, based on what you’re talking right now, I mean, I’m not say… For all I know maybe you have a great strategy. It could be totally valid. I don’t know. And we can try to talk about that, but I also get the… I don’t know, I’ve heard this many times before, I guess, is the way I’d put it. Where like, oh yeah, I’m doing it on my own. I’m trying to learn lessons and I’ve grown and then all of a sudden, you just never hear from them again. So, I guess, what is your strategy? You’re in options, so what are you doing within the world of options?
Luis: Yeah, okay. First of all, I’m the type of person that, I like to buy a lot of courses and then just-
Clay: Except mine. That’s awesome. Thanks. I’m just kidding.
Luis: I was getting to yours. I want to get… That’s why I wanted to talk to you and see-
Clay: I mean, can you understand my perspective though?
Luis: … This is a whole new experience for me.
Clay: You keep telling me how great I am and how great the YouTube videos are and how this, this, and this. And then you’re like, I’ve done all the other courses but yours. I mean, I’m just trying to make sense of it. That’s okay. I’m not trying to pressure you. I want you to do what you feel is best for you, but it’s just, I’m trying to follow your thought process here and, if I was in your shoes, and I was like, oh, this person’s got great YouTube stuff, but I’ve done everybody’s courses except his. Do you see how that, there’s like a disconnect there?
Luis: Yeah, so from my perspective, what I did was… I was going to dive in a little by little so what I did is just put that $100 in and then I was able to get in your chat. And then from there… my subscription just ended, right? Because I believe you do the $100 for three months.
Clay: Yup.
Luis: So I was like I’m going to get in the chat and see what’s going on and then, if I like it, then I’ll buy the course. You know what I mean?
Clay: Yup.
Luis: Slowly diving in. But, yeah, I’m telling you, I’m going to get off this and I’m going to buy that course-
Clay: I don’t… That’s not the point of this. I don’t want you to do that because you feel pressured. I’m just trying to make sense of the thought process because you seem like a very… I mean, you’re clearly a nice guy and I just… The way you’re talking’s got me a little worried, but full disclosure, I could be totally wrong, Luis. Maybe you’ve got it, maybe you have a valid strategy and the 150 to 5,000 is totally sustainable and it’s legit. I’m just saying I don’t quite know, but I definitely… My intention here is not to pressure you into doing anything. I just want to make sure that you’re going about this in the best way possible. I guess, what is your current strategy right now within options?
Luis: Yeah, right now basically what I do is I set up a screener and what I mostly trade is the S&P or the SPY, the ETF-
Clay: Yup.
Luis: … and right now it’s just been crazy volatile so it’s just really… It’s really volatile so that means it’s just, the profits are insane, but at the same time it’s a double edged sword. But what I do is, I have the 14 and the 30 day moving average, the simple moving average, and I have them both on my chart. And basically, with those two, with the 14 and the 30 day simple moving average, if it’s above it, I just… What I see is it’s overvalued so-
Clay: So if the price is above… You mean a 14 period and a 30 period?
Luis: … Yeah.
Clay: On the daily time frame?
Luis: I look at all time frames so let’s say I was just to see a stock. I go in and I look at the monthly and then from the monthly I move down to weekly, daily, and then I look at the smaller time frames.
Clay: Okay, but the overall premise here is that, if the price is up above both the 14 and the 30 then you believe it to be overvalued? Am I understanding right so far?
Luis: Yeah, because in my head, those moving averages, they’re just that, averages. Price has to come down to it’s average. Is that correct? I’m here asking questions too, I’m-
Clay: I don’t know. Is it correct? What have your courses told you? I’m not trying to… I’m just… Do you know what I mean? I’m trying to figure out your strategy here. And right now, this is what I mean is, and I’m not trying to be a jerk, I’m just… I want you to succeed as your sitting here talking about a strategy and then you’re like, well, that’s how it’s supposed to work, right? I mean, that’s kind of goofy, isn’t it? Don’t you think you should know how it’s supposed to work?
Luis: Yeah, I mean, I seen it work. But, I want to ask you since you’ve been doing this longer than I have. You have more knowledge about the markets than I do.
Clay: Well, I’ll put it this way. Whenever I hear people say that a price has to come down to a certain location, that makes me very nervous because a price doesn’t have to do anything. Now, yes, do prices tend to move back to their moving averages? Sure, they do, but the question becomes, well, is that after it rips for days upon days upon days or minutes upon minutes depending on whether you’re day trading or swing trading. I mean, a price can go well, well and stay well, well above their moving averages before it ever comes back down. So sure, within the grand scheme of things a price is going to eventually come back down, but I mean, that doesn’t mean that it’s going to happen any time soon.
Luis: Yeah.
Clay: So that’s just, like I said, I’m not trying to nit pick your words, but when I hear that a price has to come down, I mean, yeah, they normally do come down, but it’s more a question of well, yeah, but if it… Is it going to come down within the time frame that it needs to before your account gets wiped out or something like that? Or before your position gets wiped out?
Luis: Yeah, so what I do with that is, I’ve mostly been doing this strategy on the SPY and for the most part it does stay consistent and the way I minimize risk is… So what I did yesterday was I sold the credit spread on some calls and-
Clay: And you did it just because the… I’m not saying you’re wrong at all, just for understanding sake, the price on the SPY was above the 14 and 30 period moving average?
Luis: Yeah, and then I was able to see the range so last time that the SPY was at this level, it went up to 303 and then it went down.
Clay: Okay.
Luis: So what I do is I mix the moving averages with past levels, price… What I see is okay, so it’s at this price now, what happened when it was at this price last time? And from there I’m able to kind of… No one knows what’s going to happen and those moving averages, like you said, it doesn’t have to touch them, but for the most part, it’s like a guide to see, should I be long? Or should I be short? You get what I’m saying?
Clay: I do, yup, and that’s, moving averages, that’s exactly what they should be used for, a guide.
Luis: Yeah.
Clay: So, I mean, it sounds like if the price is above a certain area then you’re just automatically putting on either long sited strategies or short sited strategies, if the price is down below?
Luis: Yeah, so it just depends where those averages are because… That’s why I look at the monthly and the weekly because of that fact that I’m seeing where it is in the grand scheme of things so I’m looking at the whole forest before I look at a tree. And, even though you might look at the monthly or weekly and it might be signaling you that it’s overvalued or oversold or it might just be on its moving averages, I always look down at the lower time frames if I want to day trade my strategy. So I would look at the two hour, four hour, or maybe 15 minute, to see if I can get a quick entry.
Clay: And how long are these entries from the day trading standpoint? Are you looking literally buy and sell within the same day?
Luis: Yeah, what I do is I usually sell… I do debit or credit spreads for swing trading and then I do a debit spread for a day trade. Or, maybe I just want to hold it overnight. You know what I mean? Typically, I just stay in the trade like for a day and mostly that’s with shares and then I trade options as a swing trade and I trade shares as a day trade because then I’m able to see my risk and I’m able to calculate risk and reward. You know what I mean?
Clay: Okay. So swing trading is where your options come into play-
Luis: Yeah.
Clay: … but if you’re day trading then you’re using shares and-
Luis: Yeah.
Clay: … So are you… I guess what I’m trying to get at is it sounds like sometimes these day trades, you’ll just hold overnight? Or did I misunderstand that?
Luis: Yeah, it depends because-
Clay: So what does it depend on? I guess would be my follow up question.
Luis: If it’s moving towards my target, but it’s not there yet and it just doesn’t look like it’s going to reverse over night. I’ll just let it hit its target.
Clay: Okay, so it’s not a question of, if it goes against you then you’re just holding and hoping, and then you decide, well, it’ll probably go back up above and I’ll sell for break even tomorrow? It’s nothing like that?
Luis: Yeah, no, it’s like maybe a couple tenths below its target and I just want to get that, see if I can hit it.
Clay: Okay, but it’s not a matter of you just not wanting to take the loss?
Luis: No, no, no, I have my stop loss set so when you calculate risk and reward you’re able to see like I’m only going to lose $30. Just set your stop loss and if you lose those 30, they’re lost.
Clay: Okay. I just wanted to be sure that this wasn’t a case… Because a lot of times I see it where people are like, well, yes and sometimes my day trades, well, I’ll hold overnight. And then you figure out that, oh, they’re holding overnight because they’re coming up with some sort of excuse to not cut the loss. But is sounds like if it goes down and hits your predetermined stop loss then you’re just getting out?
Luis: Yeah, I’m not really hoping. I’m not here to… I’m competing against people like you who have stop losses and who just manage their risk. So it’s not really… I really don’t hope when I trade-
Clay: Okay, well that’s good. That is a green flag, not a red flag.
Luis: Yeah.
Clay: So that’s good that you seem to be not struggling and not doing the whole, well, yeah, I put a stop loss in until the price gets to my stop loss, and then I cancel the stop loss or I adjust the stop loss even lower. And then before you know it the whole trade plan is extremely different than when you first started. But in that regard it sounds like you’re doing the right thing. Have you ever had any instances where you do cancel that stop loss or you start to adjust it or anything or do you just get out?
Luis: Most of the time I just let it stop out. Or, unless it’s just obvious it’s going to stop me out, I just get out instantly, but I just… I get in to trade, I know how many shares it’s going to… what the risk to reward of my shares is so I just set that stop loss and just don’t look at the trade. Just step away from it for a second.
Clay: Now, you said, “most of the time” so are there times when you do cancel the stop loss or readjust it?
Luis: I do readjust it if the trade is going my way and I just want to protect my profit-
Clay: Okay.
Luis: … that’s when I would move it up.
Clay: Okay. Fair enough.
Luis: Yeah.
Clay: That’s for… so it’s not like if it’s coming down against you, you don’t adjust it even lower?
Luis: Oh, no.
Clay: You’re just adjusting it higher in the direction of the trade?
Luis: Yeah, if it’s going against me, I’m not going to move that because-
Clay: Okay. All right.
Luis: Yeah.
Clay: I just wanted for clarity’s sake… That’s another thing, but that makes perf… Okay, good, well, excellent. It sounds like you have a nice little… You’re not out there wheeling and dealing because way too many times, like I said, you press somebody with some questions and it’s just like, well hey, the only reason that you’re on a win streak or the only reason you’ve actually grown your account at all is because you’re careless with your risk management and it just hasn’t bit you yet, but it sounds like you’re managing risk in a good firm way so, good. That’s encouraging, that’s not… we’re doing much better than what we were when it’s… You’re asking how moving averages kind of work, but I would say, excellent, good job. [crosstalk 00:36:16]
Luis: Thank you.
Clay: And, so how long have you really been… I know you started and you’ve been doing this for a while, but I mean, when did you actually… You said you what? Funded it back in October or November?
Luis: I funded it in the end of October-
Clay: Okay, okay, and have you… And you’ve been just at it since then?
Luis: Yeah, just pretty much. My thought process was, if I’m going to do this, I’m going to do this the right way. And what you preach and what I seen was just managing your money and risk to reward and really that’s been it. And where I get most of my profit is from options because most of them expire worthless-
Clay: Okay, so you’re selling options then.
Luis: Yeah, because then you have the odds in your favor because you know most of the time it’s going to expire worthless.
Clay: Have you ever had any of that… and how long have you been doing this?
Luis: I have been doing this since quarantine started so I guess, March.
Clay: Okay, so you’ve been at this. Have you had any situations where… Now, are the undefined risk trades? Or are these… Do you still have a risk in place there?
Luis: Most of the time… So, when I do a credit spread, let’s say I was going to get in one of those. I just let it ride out throughout… I do the weekly credit spreads so I’m only waiting a week. I’m not sitting there hoping especially with all this volatility going on. I’m just seeing where the range is. Where was its bottom and where was its top? And will it reach it this week? You know what I mean?
Clay: I do, I guess I should have asked it a different way. Are you doing any naked options?
Luis: I have done some naked options when there’s a break out and I just get in and get out because those are just crazy. If those go against you, you’re just blowing up your account at that point.
Clay: Right, so how are you knowing when you should get out in regards to those naked option trades?
Luis: I just approach them like I would do with a day trade. I would set my-
Clay: Okay, I think that answers it. These are not… Your naked options are not swing trades. They are day trades.
Luis: Yeah, they’re day trades-
Clay: So you do do some day trades with options then?
Luis: Yeah, I just-
Clay: Okay-
Luis: … I just use those to leverage my trade so shares and then if maybe if it breaks out crazy and I want to hit that extra amount of money, I just get in naked.
Clay: Okay, all right. That makes sense. So it’s not… I was under the impression that whenever you were doing day trading, it was just flat out with shares, but there’s clearly now a component where some of these times you’re doing the options themselves and okay, well, that makes sense then because that’s-
Luis: Yeah.
Clay: … I was just going to say, got to be very… Well, I was going to ask if you were swing trading these naked options, I mean, have you ever had the instance where it really just backfires and goes and have you had to manage any of those? But, it sounds like that you’re not trading the options in that way. So any swing trades for options, it sounds like you’re not exposing yourself to that potentially unlimited risk?
Luis: Yeah, I did have an instance where, I mean, this is a learning process so I did have an instance where I put maybe… it was just flat out ridiculous. It was $100 on two SPY 300 calls, like a couple weeks back and it took a couple weeks for it to hit 300, but what I did was, I got them at like $15 thinking it was going to hit it by the end of the Friday, but obviously it didn’t. That’s really one of those instances where they expire worthless and you just lost your money.
Clay: Okay, so you were going long.
Luis: Yeah.
Clay: Those calls then, okay.
Luis: Yeah, but that’s where I learned. That’s where you learn because obviously yo were exposing yourself for 200, that’s ridiculous.
Clay: Right, and so is that pretty much… Now, with stocks, we talked about that, I mean, I get it you’re going to get out, but I mean with options, are you just, are you kind of just letting them ride? I mean, is it going to be one of these situations where you’re either making all the money or you’re just losing all the money that you put into it?
Luis: Usually I just get out after… What I do, if I’m doing like naked, I just set a $30 stop loss on them and I try to do it… When I trade those I try to close before the day ends so that I don’t have to wake up tomorrow and they’re just half… It’s crazy with options.
Clay: Well, you try to close by then end or you do close by the end?
Luis: I close by the end.
Clay: Okay. Because I was just going to say, I mean, just talking out loud with you. I mean, that would be a situation where if you’re naked at options and you decide that you don’t close it by the end of the day, then as I’m sure you realize, well, now you’re… Now you have no idea, I mean, if that stop gaps up against you or something like that-
Luis: Yeah.
Clay: … it could be a very painful situation. And for listeners’ sake, all naked means in the world of options is basically, the risk is unknown and the risk could be really, really bad. I mean if something crazy happens, now these are definitely high probability trades if you’re doing them right. So there’s no doubt about that, but the market is a very very wide… it’s a very varied creature.
Clay: So the way the market talks is like this, all right, we’ll give you some very, very, very, very high probability trades, but the times where it doesn’t work out, we’re going to bring the pain. We’re going to bring the sledgehammer and we’re going to smack you right in the face with that thing. So that’s what naked means, assuming again that you’re doing it right, high, high, high probability winning trades, but if they don’t go right, they can be, I mean, as in one or two trades can wipe away everything else, all those wins that you’ve had.
Clay: So that’s why I’m just making sure Luis is not holding them or not closing them by the end of the day because then all of a sudden he’s exposing himself to something that happens overnight and then the stop gaps against him and then all of a sudden he could take a massive loss, so I would just say, if they’re naked then that… I would say, should definitely be a rule within your strategy is, if it’s a naked option, I need to be out by the end of the day no matter… What’s that mean?
Luis: Yeah.
Clay: I guess unless it’s totally money that you are okay with losing, but it sounds like you would not want to be in a position where you lose control of your risk, right? Because that’s what happens when you hold overnight with those naked positions is, the risk is not out of your control. Right?
Luis: Yeah.
Clay: I mean, would you agree with that?
Luis: That’s correct. You can set a stop loss, but if you do it overnight that’s just invalid because it can just gap up or gap down on you and you just lost half… You just maybe lost your money.
Clay: Yeah, exactly. A whole lot of money with the way it works. So yeah, that would be my little critique there is, it sounds like there’s some wiggle room in there for you to potentially hold a naked option overnight, but I mean, for the discussion we just had, sounds like we’re both on the same page that that’s relatively risky.
Clay: On your charts, what sort of… If I were to sit next to you and look at your chart, I mean, what would I see? Do you have lots of fancy indicators or do you keep it pretty basic?
Luis: I just keep it basic, just the 14 day moving average and then the 30 day, and then I just would draw some support and resistance lines because mostly for my strategy is breakouts. So from there I can see where the breakouts going to happen or if it happens or if it doesn’t. You know what I mean?
Clay: And I would assume you’re using candlesticks?
Luis: Yeah, I’m using candlesticks.
Clay: Okay, so candlesticks, I would assume you have volume on your chart?
Luis: Yeah, volume, candlesticks, the moving averages and just your lines and-
Clay: Yeah, good old fashioned support and resistance levels. So in other words, you’re keeping it very basic.
Luis: Yeah.
Clay: I would say that’s a green flag. Another red flag I see quite a bit is people that are new and they’re like, I got the Mac D overlaid with the stochastics and then floating up above you have the chalk and money flow, which is transpired between… I don’t think transpired is the right word here, but I don’t care. You have that transpired with the MFI. And I’m just like, okay. And then you’ve got to get out Andrew’s pitch fork and use [Fibbanotchy 00:44:33] who knows what, but-
Luis: Yup.
Clay: … I’m like, okay. I mean, if it works for you, go for it, but as somebody that’s newer, might be over complicating it. But you’re doing the opposite so I would say that sounds good. That’s a nice little… that you’re not overcomplicated. Now, you want to play breakout so are you waiting for the breakout to happen and then you take action? Or are you trying to anticipate a breakout?
Luis: Every situation’s unique, but the breakout is pretty much the same so if I’m anticipating a breakout and I’m just seeing all the green flags, I get in. I divide my entries into threes. So I get in anticipating. I get in once it breaks out. And then I get in one more time once it retraces back to that previous resistance level.
Clay: Okay, and if it does not retrace back, then you just… You just have two entry points?
Luis: Yeah, but usually what I do is, I just wait for the breakout, I wait for the retracement, and then once it retraces and I get confirmation, I get in.
Clay: For that third allotment?
Luis: Yeah.
Clay: Have you ever thought about just, I mean, do you notice that most times it does pull back to the resistance?
Luis: Yeah, that’s pretty much what I wait for and [crosstalk 00:45:46] that’s when I make my deal.
Clay: So would you not have a better entry point though if you, I guess, are you buying at the breakout point? What I’m getting at is, is that really the best way to get yourself the best possible average price? Or is there another way? I mean, if you notice that most times it pulls back, then, I mean, does that make sense or? Because I feel like if you know that it’s going to pull back then, well, this all depends on when are you buying as far as the breakout. Are you waiting for it to breakout and move and move and move? Or are you literally getting it right when it’s trying to breakout?
Luis: Every situation’s unique, but usually what I do is I wait for the breakout and then it breaks out that resistance level and then usually what I see with stocks is that they come back to that previous resistance and they use it as support. So I wait for it to come back and confirm it as a new support level.
Clay: Okay, I guess, it does make sense and just what I was trying to get at is, and I’m just making up this number, let’s just say for example’s sake the breakout point is $10. So you’re anticipating the break and you get in at let’s just say $9.80. And then it breaks out and you want to make sure that it breaks out, and you want to make sure that it breaks out, so then you get in, and I’m just making this up, $10.30 and you’re like, well, it’ll probably go back and retest $10, so if it goes back down to 10, well then, you’re going to buy again, but-
Luis: Yeah.
Clay: … I mean, if you notice that it’s going to be coming back down to 10, why would you ever buy at $10.30 for example? So I’m just wondering, if you bought once anticipating it, and then you bought the next two with it pulling back if that’s what you notice happens quite a bit. Then you would have a better average entry price with your three separate purchases. Does that make sense?
Luis: Yeah.
Clay: But, like I said, that all depends on how far after the breakout you’re actually buying. So I mean, it could be fine if you’re buying right at 10.01, then okay, then that doesn’t really make a difference, but if you’re kind of buying the breakout after it’s broken out quite a bit with the idea that it’s going to pull back, well then, you’d be able to get a better entry point… excuse me, a better average price. So hopefully that all made sense.
Luis: It did.
Clay: Okay, excellent. And how many trades are you looking to make… Well, it sounds like you have a job, right?
Luis: Yeah, I do.
Clay: So I guess, walk through that. Walk listeners… because a lot of listeners have jobs so how are you trading with a job? How do you make all that work together?
Luis: What I did is, I pretty much started doing stocks more actively once quarantine hit because my job is still considered essential, but at the same time I’m able to work from home, so from there I’m able to at least keep my eye on the chart while I work. And what I usually do is I just wait and set alerts and then once that alert hits, I can see what’s happening and then that’s when I look at it and then see if I need to enter or not. But usually what I do is, the night before I’m already trying to plan out… I have a plan the night before of what I’m going to do the next day-
Clay: And you’re just doing this with S-P-Y, right?
Luis: Yeah, or I usually just, I use your power scans during the… you send them out on the weekend-
Clay: Yup.
Luis: … and I look at them on Sunday. And then I do my analysis and then I compare it to yours and then from there I have my watch list for the week.
Clay: Okay, nice, nice. So you’re open to trading things outside of S-P-Y then?
Luis: Yeah, but I usually use S-P-Y as an indicator for the market overall.
Clay: Right, yup, that’s kind of a good backbone there. For listeners’ sake, just as a reference point, part of the inner circle that he’s a member of, on weekends I send out my personal scans with some charts and annotations and all that sort of stuff. So when he says power scans, that’s what he’s referring to. So, good, that’s a nice little mix between the S-P-Y, like you said, it’s kind of your backbone and then using those power scans and are you, I guess, how do you foresee things going for listeners’ sake right now. I guess you don’t really know.
Clay: By the time this posts, hopefully quarantine will be well behind the country and everybody, but right now we’re recording this in late May. But, is your job a situation where you’re eventually not going to be able to work from home? Or are you always going to be able to work from home even when the quarantine and life kind of gets back to quote, unquote, normal?
Luis: When life gets quote, unquote, back to normal… The advantage I have is that I’m 19 years old so I’m still quote, unquote, in college so I still have some time to keep up with charts and keep up with what’s going on in the world of stocks and the world of finance. But once everything goes back to normal, I’m just going to be doing the same thing just from my desk pretty much.
Clay: At the place where you work?
Luis: Yeah.
Clay: And is your supervisor going to be aware of this or are you going to be on some sort of secret operation?
Luis: I mean, I really don’t see why it would be a problem because I’m just pretty much setting the alerts the night before and then if I just get the alert that it’s breaking out, I just wait for that retracement and then just get in and set my stop loss and go back to work.
Clay: I would agree with that, but-
Luis: Yeah.
Clay: … this is also, may I give you another two cents of-
Luis: Yeah, go ahead.
Clay: … life advice, not that I have that much life advice, but as an employer, I think, if you don’t see it being a big deal. I would just let your supervisor know what’s going on because the last thing I would want for you is to, hey, what are you doing? Huh? Hey, that’s on company time.
Luis: Yeah.
Clay: Boom. Gone. You know what I mean? If you believe that it’s not that big of a deal to just do it, well then, just let them know. And that way you’re being in full communication and there’s no… Because what you don’t want have is, you don’t want to be operating with the risk of losing ticker symbol J-O-B. Because if you lose ticker symbol J-O-B, which is the only guaranteed trade you can make out there-
Luis: Yeah.
Clay: Well, I mean, that’s just not going to be good for anybody. And at 19, and I am probably taking this a little drastic here, but at 19 the last thing you want is some sort of thing where now you don’t have a reference to give some sort of future employer or whatever because well, I can’t get them because I got fired from my job or I was doing trading on company time and they caught… I mean, you’re just potentially opening up a can of worms. So I mean, that would be the one thing is when you go back to the office or whatever I would just encourage you to just let them know. There’s no need to be sneaky about it or anything like that because it’s just not worth the risk, but you know your job situation, you know your office dynamics better than I do-
Luis: Yeah.
Clay: But speaking from a macro level that would probably be appreciated by your employer, but-
Luis: Oh, yeah. I understand and what really helps me is that I’m the supervisor, so-
Clay: Well, who’s your supervisor?
Luis: It’s the main boss.
Clay: Well, there you go. Everybody’s got a supervisor, myself included. It’s called the customer so I mean, we all have supervisors. There’s no such thing as being your own boss because even if, well, I’m going to be a trader. You know who your boss is when you’re a trader? The markets. If you don’t listen to your boss, the markets, you’re going to get destroyed.
Luis: Yup.
Clay: So it is inescapable to never have a boss as much as… and it’s a great saying, be your own boss, which is true, but at the end of the day you’re not quite ever your own boss. Well, that’s awesome, man. What do you do?
Luis: I work with the Army Corps of Engineers.
Clay: So you’re in the service?
Luis: No, I’m a private contractor.
Clay: Okay.
Luis: We work as private contractors, yup.
Clay: Okay, and at 19 you’re already a supervisor so well done, sir. I do-
Luis: Thank you.
Clay: I thought you were the person. I was like, I think Luis, I think he’s the younger kid, but I couldn’t quite remember. But you brought up the fact that you’re 19, which I thought so, which is why I’m also, I don’t know. I remember when I was 19 and I just wish someone would have just been straight up with me at that age and been like, hey man, do this, don’t do that, are you thinking about this? So hopefully I haven’t come across like a jerk to you. I just want to make sure that… iron sharpens iron, I mean.
Luis: Exactly. [crosstalk 00:54:01].
Clay: Is that a fair statement? Okay, is that a fair belief?
Luis: Yeah.
Clay: Okay, good. I’m glad we’re on the same page. Because some people, Luis, I will give you credit, I could… some people, who knows, for all we know, well they’ve already turned it off, but like, wow, Clay’s sure being a jerk, wow, Clay, what’s up with him? But, I like you, Luis. You’re like, no, man. That’s the whole idea here. Let’s just talk things out, iron sharpens iron.
Luis: Exactly.
Clay: Let’s see where are we at time wise? All right. We’re only at 47 minutes. So I mean, big picture, where do you see yourself? Where do you want to go? Again, you’re only 19. What are you in school for? What are you majoring in?
Luis: Right now I’m doing accounting.
Clay: Okay. Thank you for not saying you’re getting a Phd in the history of Holland tulips. So I appreciate… accounting, good, there’s market value out there for that. Are you wanting to actually practice accounting some day? Become a CPA or, I mean, where do you see that taking you?
Luis: Honestly, I have no idea. I have no clue what… My plan is, I just want to use it as… it’s pretty much the most essential job you can get so it’s protected especially with what happened now with everything we’re dealing with now you’re able to see what jobs are important and what jobs aren’t. My thought process is everybody’s always going to need an accountant.
Clay: You want to know why accountants are essential?
Luis: Why?
Clay: Can you guess?
Luis: Because… money. They handle money.
Clay: Well, no, not necessarily. Whose money? Whose money do accountants calculate?
Luis: The world’s money.
Clay: No, the government’s money. So you are absolutely right that the government looks at accountants as essential because they need that tax [chedda 00:55:43]. They need to get paid. Who’s going to tell them how much to get paid? Oh, accountants are going to.
Luis: Yup.
Clay: So you’re absolutely right that accounting is basically the last thing that would ever be… Firemen? Nope. Cops? Nope, gone. Gone. Gone. We want those accountants though. Those people need to be paying us our taxes and those accountants will calculate that for us. So I fully agree and I say that half joking, but I mean, it’s totally true. That’s why accountants are important. Because they’re calculating, they’re doing all those taxes and you can’t know how many taxes to pay or how much the government gets to take unless those accountants are doing their… Now, if they’re really good accountants they’re… Is your main drive to be good at cooking the books?
Luis: My main drive-
Clay: That’s a joke. That’s a joke. I’m not, no, I… You sound like a very quality individual and you’re clearly a smart individual so I know that even if your plan was to cook the books, you would not be publicly saying that on a podcast, but… Well, that’s awesome, man. So you’re a supervisor of what? Of other accountants or how is this working? I’m curious. You’re a supervisor at 19 and you’re within accounting so does this job you have over the summers, does it have anything to do with accounting or is it just totally separate?
Luis: It’s totally separate. I’m just managing. I’m coordinating projects that we do with the Army Corps of Engineers and then they have their projects that they work on and then, I just pretty much manage my team to meet their standards.
Clay: Okay, nice, and how many people are in your team?
Luis: There’s five people in my team.
Clay: And what are their ages?
Luis: They’re probably like double my age or triple my age.
Clay: So how’s that? How do you… This is me being curious. How does that, I mean, to me, at 19, if I was somebody that was well older, I might be a little intimidated, but I mean, how does that work? I mean, is it a good flowing team? You have a good team chemistry and all that?
Luis: Yeah, basically I just came in and I understand I’m young. I respect you guys for being a little older than me, but I’m still here to work and I’m still here to get the job done and that’s why they’re hiring me.
Clay: Was this before or after you threw the chair across the room?
Luis: It was before.
Clay: All right, yeah. That’s good. You first start with nice then you just start throwing stuff around the… and if you cross me, yeah, yeah. I appreciate you keeping it G rated because I’m sure you had a pretty intense discussion there, but that’s awesome, man. Good for you. People with excuses are not going to like you Luis, because well, I’m too young. Sorry, I don’t want to hear your excuses, I have another data point known as Luis, who’s 19 and managing people well older than him. So, no, you’re not too young. You can’t be a moron. You’ve got to show up and do the work like you said. So, that’s awesome, man. That’s good stuff.
Clay: Started off rough, man, I was a little worried about all this, but upon pressing you, lots of green flags here so truly well done. This is fantastic and I kind of side tracked the conversation once again. But, so you really have no idea where this is all going to take you. I mean, ideally do you want to do trading and stuff full time or are you looking to just have it be almost a side hustle. Just one form of income. I mean, where do you see trading fitting into all this?
Luis: Trading is my passion. I absolutely love the rush of competing with people and to me every chart is like a crowd of people you’re trading against or with. I really want to grow this into something that I could just maybe someday do full time. I absolutely love trading.
Clay: Awesome, and that’s… Did you get into it and maybe you don’t… It sounds to me like maybe what caught your eye about it was the money aspect, but you quickly learned that it’s way more than just the money aspect. You just literally… You just love to do it? Is that a relatively fair observation?
Luis: Yeah, that’s basically it. I mean, money comes and goes but it’s something that I get to wake up and I’m happy and I’m excited for 9:30 and it’s just like why not do something that you love to do?
Clay: No, you’re absolutely right and that’s great because there’s nothing wrong stumbling into the market because, I’m looking to make money, I’m looking for a side hustle, I’m looking for money, money, money, money. But if you’re looking at the stock market as a listener and you’re like, oh man, I guess it’s cool. I think it’s kind of annoying or I mean, it’s a means to an end so I’m not really that into it but it is a way to make money online. It is a way to work from home, but it’s kind of annoying. I really don’t like, I mean, don’t do it, okay?
Clay: You have to have a true passion for this stuff. You have to be as enthusiastic as Luis is about it. I mean, you can just hear it. He likes it, he loves it, he loves, he has a passion for it. If you show up and it’s literally just a way to make money and that’s it, you’re not going to survive. You’re going to burn out. You are going to do stupid stuff. You’re going to blow up your account. But, odds are you might not even blow up your account. You’re just going to be like, nope, done and it’s just going to be a total waste of your time. And time is the most valuable commodity you have.
Clay: So, I mean, as a listener, if you’re even listening to us and you’re saying, yeah, I mean, I just want to make money, but the stock market thing, I don’t think it’s that great, really, it’s kind of stupid, but I want to make money. Find something else. Find something that you actually like to do that you have a passion for because money will follow the passion, but I mean, if you’re just trying to fit a square peg through a round hole it’s just not going to work out.
Clay: And, I mean, if this is the first podcast you’ve ever listened to, I mean, this podcast has been going on since what? 2015? 2014? The site started in 2013, and I bring that up… I’ve come across a lot of people at this point not necessarily just on the podcast but within the customer service realm and I mean, I don’t have a spreadsheet of statistics, but I can say with full authority and confidence that if all you’re bringing is your desire to make money and not any sort of passion for the markets, just go do something else with your time. It’s not going to end well and it’s going to ultimately be a total waste of your time because you’ve got to like this stuff. And, Luis, you clearly do.
Clay: Well, man, we’re coming up at 55 minutes so we’ll start to wrap things up and Luis, if I were to give you a time machine and you could go back to the start of all this and give yourself one bit of advice, what would that bit of advice be?
Luis: Don’t look at it, like you just said, don’t look at it as I’m going to make money or I want to make money. I want to get rich because it’s not going to work out for you. Just approach it as a student and just let the market teach you. Get good advice from good people and that’s it. That’s in your knowledge. You can watch YouTube videos all day, but you’re not committed until you buy a course.
Clay: There you go. Okay, well, good time machine answer. Now we’re going to get to know you a little bit better from a personal level. So Luis, what is your favorite movie?
Luis: Oh, my favorite movie, I was not ready for this question, but it’s going to have to be The Wolf of Wall Street.
Clay: Okay, just don’t watch it with any young children around. Okay?
Luis: Yup, yup.
Clay: Okay, but, Wolf of Wall Street, pure intensity, Jordan Belfort. Right? That’s him, Jordan Belfort?
Luis: Mm-hmm (affirmative). That’s him.
Clay: Okay, nice. What about favorite food?
Luis: Favorite… pizza. Pizza.
Clay: I was going to say that’s pure America, but that’s not, I guess that’s pure Italy? I don’t even know where…
Luis: I mean… Dominoes. [crosstalk 01:03:28] It’s pure Dominoes.
Clay: Whatever, yeah. This is totally random, but you’re in Maryland. Are you near Baltimore at all?
Luis: Yeah, Baltimore-Washington.
Clay: Okay, I have a very good friend. He’s been on the podcast like four times, but yeah, he’s in Baltimore so I’ve been to Baltimore now, I don’t know, four or five times so point being, I’m a fan of Baltimore. It’s a nice city. Have you ever been to Baltimore though?
Luis: Yeah, I actually rented an Air BnB in Baltimore.
Clay: Nice, nice. Have you ever been to Blue Moon?
Luis: Oh, yeah, but I really can’t… My thing is I’m too young to do anything fun in Baltimore.
Clay: Well, you can go take a… Blue Moon is fun. I mean, to have-
Luis: Yeah.
Clay: … Blue Moon the restaurant, right? You’re not, we’re not-
Luis: Yeah.
Clay: Okay, all right. There’s not like a strip club or something that’s saying Blue Moon, is there?
Luis: No, no, no, no, no. I’m talking about the restaurant.
Clay: Okay, all right. Those cinnamon rolls, man, I’m addicted to those things but-
Luis: Yeah, they’re delicious.
Clay: Yeah, they really are, but yeah, so that’s great. That’s awesome that you’re… so now I know another person that… Well, how far away from Baltimore are you?
Luis: I’m about 15 minutes.
Clay: Oh, okay, cool, so yeah, you’re practically in Baltimore then. Nice, nice. And then, final question, three words, and these three words would need to be what you would associate with either a successful trade or what it takes to be successful. So what would those three words be?
Luis: Proper risk management.
Clay: Proper risk management. That’s a phrase, which happens to be three words, which fits the criteria. I like it. Proper risk management. I 100% agree. Well, Luis, this was a good talk. I appreciate you, like I said, taking some time out of your day and hopefully you’ll come back at another time, I know-
Luis: Yeah, thank you so much for having me.
Clay: … Yeah, this was a good time and we’ll have to keep… just keep us posted on things because this was very valuable and hopefully you’ve inspired some younger people out there. At 19, I hope you’ve inspired any age people out there because you’ve clearly got your act together and that’s inspiring to hear. So, again, Luis, thank you for hanging out.
Luis: Yup, thank you so much for having me and, if you want to get into trading, just get in, just do it and do it with a passion. And anybody can do it.
Clay: There you go. I love it. Do it with a passion, but don’t get in if you’re just in it for the money.
Luis: Yup.
Clay: As we discussed, but I agree. I like the contingency you put on that, with a passion, very, very smart. Now, before all of you leave, real quick, as listeners, if you are listening on iTunes or any of the other podcast players, make sure to subscribe that way you are notified when new episodes and new content comes out. Especially on iTunes, when it comes to ratings, if you could leave us a rating, that goes a long way. I would really appreciate it, especially a written review on iTunes would be very, very helpful so I thank you in advance for that.
Clay: If you are listening at claytrader dot com, on the show notes page, then in the bottom right-hand corner of that screen there’s a little live chat box there. So if you want to reach out, talk with us, ask us questions, comments, suggestions that’s great. I love when conversations start off with, hey, I listened to the podcast and then they go into whatever the comment or suggestion may be. So we love to hear from you as listeners so feel free to reach out whenever. So thank you as listeners, thank you, Luis, and we will see you all back next week.
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