Transcript

Clay: This is The Stock Trading Reality Podcast, Episode 223.
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. This is your host, cinnamon sticks in your coffee, he’s a believer, Clay Trader.
Clay: I tell you what, it feels like you’re cheating, so if you’re trying to eat healthy, trying to stay away from the pop, excuse me, soda for some of you that may not be from around the Midwest, but if you’re trying to avoid sugary drinks and all that nonsense, then a great way to do that is with black coffee. You can’t have coffee and pour a bunch of sugar in it, but a good way to get around that which is actually super, super healthy for you is to… I’ve discovered you put in some cinnamon sticks and you can get them really anywhere. I get mine off of Amazon I guess because I’m a hippie and I want it to be organic, but that’s a whole nother discussion, but it’s good.
If you like the flavor of cinnamon and you’re trying to be health conscious and trying to avoid all the sugary drinks, then black coffee, no creamer, just black coffee and then one of these cinnamon sticks in there, it adds a nice little… like I said, cinnamon is good if you do the research. It’s a good antioxidant and all that good stuff, so there is a lot of benefits to doing that. I am totally a believer in that because it’s good and it’s not sugar, but it tastes really… I don’t want to say it tastes like sugar, it just tastes good. That’s the best way that I can put it.
For our episode today, we are talking with a younger lad, and I like how I say that like I’m sort of old guy. I don’t know, I guess that’s a frame of reference. When I’m 90 I’m going to be like, yeah, I’m an older guy. Hopefully when I’m 90, I’m going to feel like I’m 30, but anyways. Younger person here, Ezra is name, and do I want to spoil that? There’s a little spoiler in there where he’s actually friends and was in the same investment club as a past guest, which kind of caught me off guard, but that was a cool little twist and we learned a lot about him and his journey. He’s still figuring things out. In fact, I think I was polite about it, but I had to kind of call him out on one comment he made, but he took it in stride and took it with an open mind and as it was intended, so I do commend him for that.
Overall, like I said, he’s making his way. He’s had some ups and downs. He may or may not have paid for an alert service that he wasn’t too happy about. You may or may not hear about that as we discuss, but overall, definitely a good guy, very well-spoken and something where if you listen and you’re open-minded, then there’s definitely some good nuggets, or I think he used the term knowledge bombs. There’s some knowledge bombs in here that will really help you out just by taking observation of some things that he experienced and he did or things he wished he would have done that will really help you out in a very real-world type of way. Without further ado, let’s hear from Ezra.
Ezra, welcome to the show.
Ezra: Thank you, Clay. Thank you for having me here.
Clay: Now, you brought up ahead of time that you’re in a warehouse right now. Now, I envision this like you’re not supposed to be doing this interview, so you’re hiding in the corner behind a bunch of boxes with like a blanket over your head. Am I envisioning this the way it actually is? Or am I going way too dramatic?
Ezra: You’re not that far off. I am in a warehouse, but there are other businesses around me. I am remote, though. The job I have now, I’m my boss, so I don’t have day-to-day check-ins and I can kind of manipulate my schedule the way I want to, so no blanket over my head, but close.
Clay: I wish you would have lied and just maybe added in some more… like, “There’s people walking around, so if I start whispering that’s because my boss is”… that way, I could have really spun this into, “See, this is the dedication of our guest”, but I appreciate your honesty, nonetheless.
You did also mention that you’ve listened to a lot of past episodes. The people I always ask that to and they’re like, “Yeah, I have”, I always forget but I’m not going to forget, do you have any favorite episodes or favorite things that you took from any of them given that you did say that you’ve listened to lots of them?
Ezra: I’ve taken many I think knowledge bombs away from your podcast, but nothing stand out to me now. I will admit I haven’t listened in probably a week and a half. The last one I listened to, and I did want to ask you about this, are you purposely pulling in farmers? There seems to be a pattern of farmers having discovered your trading podcast and getting involved in either the chat room and… I think it’s funny because I’m going to continue the trend. My backstory begins on a farm.
Clay: That’s actually perfect. First off, I love how you’re like, “I’m sorry I haven’t listened for a while. It’s been a week and a half.” It’s like, “Well, shame on you, Ezra. You haven’t listened for a week and a half. What are you doing? You’re the worst supporter ever.” Then, that is funny about the farmer thing because that has been kind of a weird little thing. Now, to hear that your story starts on the farm, I guess it’s the weird just keeps getting weirder.
With that, let’s kick into it. The normal question for you non-normal listeners out there I always ask, so I’ll ask you Ezra. Where did this all start for you? Where did you hear about the markets? What sort of things played out that got you interested enough into the markets that you wanted to get more hands-on? I’m guessing, like you said, it starts on a farm, so I’ll let you take it from there.
Ezra: Well, it does start on a farm. My family and I own a dairy farm, and I don’t work there currently, but I grew up there. I’m 23 years old now and I spent 21, almost 22 years total, working with and for my family on a multi-generation dairy farm in Vermont. That kind of encompasses my entire childhood, teenage years, and then all through undergrad as well. The market exposure for me happened in college. I went to a small Southern New Hampshire school. I did not study economics, I didn’t study finance, but I had a keen interest in being financially secure, especially going into college, which nowadays. most people know is a massive undertaking, financially speaking. Not to mention that growing up on a farm, you come to realize that there are a lot of realities in life that are really hard. For me, I think money was one of those, which was a catalyst to begin learning, and I think that set me off.
I found a small student group called The Investment Group on Campus and I was very lucky to get onboard with this… get involved with this club right when there was a senior who was incredibly organized. His name was, well, I won’t go there, but he did study economics and he had a lot of knowledge to share. He had a goal to get out of school and go right into the world of… I’ll just say like big-time New York, either stockbroker or something along those lines. He was very energetic, he was a great leader, and he got me interested.
I think, if I’m remembering correctly, we were a group of maybe 10 or 12 students and we had to do regular stock pitches in this little group. We met maybe once a week, like on a Friday afternoon, so it was very inconsistent. Everyone came in kind of battered up from the week. We got better and better at this, but that was really where it kicked off for me. I in that time became familiar with the program Toss, Think, Or Swim, as well as some major news corporations like MarketWatch and, oh, a bunch of other stuff. I hope that answers your question.
Clay: It does, and that brings up the next question. You had to do… First off, fascinating. This is good stuff, and leave it only to a stock market group that meets on a Friday afternoon in college. I was in college and I commend you. I remember most people on a Friday afternoon were not meeting up to talk investments and stuff like that, but that’s awesome that you guys were doing that. You had mentioned you would meet up and do stock pitches, so I guess walk me… I think I know what you mean by stock pitch, but what did that actually consist of?
Ezra: Well, in terms that I think that are relevant to the discussion today, it was very much fundamental. We looked into the company’s finances. We had a faux portfolio that was… I don’t remember percentages, but was doing quite well when I came into the group. We would sort of for practice pick a stock and it was very likely just something like Apple or Twitter or Netflix because those were the names that were big and popular. I personally didn’t know how to find anything, so those were the things I ended up with. We would look into profit/loss, we would look into long-term price projections, we would look into I want to say like debt-to-cash ratio, how successful they had been over the years. Does this sound fundamental to you?
Clay: I would definitely… I have not heard a candlestick or a moving average or a volume bar, so it does sound very… that’s fine. Most investment clubs get together and they talk about, well, what you’re taught in school, which is not wrong but I really haven’t heard of many investment clubs that meet up and talk about, “Oh, we got a cup and handle pattern.” It’s more so, “Hey, what’s your balance sheet look like?” You guys did it as a group. I didn’t know if like everybody would go out and find their own stock and then come in and tell the group about it, offer up a pitch about, “Hey, this is the stock and this is what I like about it.” It was you guys all working together as a group?
Ezra: Well, it very much was a pitch to either convince the person looking out for the portfolio that we needed to buy, or I guess I would say convince the majority of the group that we could buy, and we always did buy shares. The point was to position ourselves so that, for example, over Christmas break, we would be making money passively, I guess, so that when we came back from Christmas break we wouldn’t have kind of dumped our entire portfolio in the wrong socks. It was strategic, it was just very basic strategy, and it was to convince each other that this was a good buy.
Clay: I see a lot… That was a good life choice, because essentially the way life works is you need to be able to persuade people. You need to be able to communicate with people. You need to be able to get people to see things through your lens. That’s, like you said, exactly what the whole idea of the pitch was, was not even necessarily to get one person to believe, but the majority of people to believe, to see, to persuade why you chose what you did. Even if you throw the stock market stuff aside, just from like a practical life lesson, practical life skill, it sounds like this club… I will say, so far so good. You’re very well-spoken for only being a 23-year-old punk, so that’s good. I’m quite impressed. At 23, I’m not sure I could structure an entire, well, I still can’t structure an entire sentence, but you’re very well-spoken.
You’re going through these pitches, you’re getting all these life skills, you learned about the market. Where did things go from there, then?
Ezra: Well, let’s say that was my freshman and sophomore year, and again, I’m not studying finance, so this is not yet a priority to me. At that point, we had some shifts happen in the club. I was also studying French, so at the end of my sophomore year I decided to take five to six months abroad and I spent some time in the North of France, which obviously I did not take part in these club meetings, but it did sort of expose me to independent finance in a way that I hadn’t had to do before. I didn’t keep up with the day-to-day markets, but I kept up with the overall trends when I was away.
I think maybe you and I could agree, all stuff aside, getting exposure to other cultures is a good life goal, or it’s a good thing to do in life to just get a basic understanding of what your world looks like looking from the outside in. When I came back, I think I had a much better sense of what my priorities should be. That’s a really a singular word, priority should be going forward, which leads me to junior year and senior year, which I finally had the opportunity to… at that point, usually in an undergrad, you can choose to move off campus, so I had a group of friends did get a place with. I began to dig into the idea, the concept of day trading, and I’m sure I just opened a can of worms with you, Clay, but back then you think you can do anything.
Here I was, beginning or mid-junior year with a laptop in front of me and a friend there, who by the way is also been on the podcast and is a member of the chat room. I did want to bring that up.
Clay: Who?
Ezra: Oh, his name is deWolf. You know deWolf?
Clay: You’re a friend of deWolf?
Ezra: Oh yeah.
Clay: Wait, so you guys were in the same investment club?
Ezra: Oh yeah. Yep.
Clay: I didn’t know that, right? I was not supposed to… or did I know that? You never told me that, right?
Ezra: Me personally, no, but I have had a couple of conversations on the side in the chat room with deWolf and I guess no one caught on, but I’m not in there nearly as much as he is. He would tell you the same thing. We had a lot of good times in investment club and coaxing each other on in our little technical analysis meetings in our apartment trying to figure out what was a good and bad buy.
Clay: You decided you wanted to do day trading. Where you Maverick and he was Goose in this little journey of becoming a day trader? Or vice versa?
Ezra: That’s a good question.
Clay: I don’t want to start a fight. “No, I was Goose.” “No, I was Maverick.”
Ezra: No-
Clay: We won’t go down that. I’m not looking to start any drama, but that’s funny, and that’s why I like this show. When you just do it real and nothing scripted, you kind of get a little… that’s funny, that’s good stuff. He was your partner in crime, then, in terms of trying to figure out this day trading stuff. What did you guys… did you just hop on YouTube? Or did you go down the Google rabbit hole? What exactly was your kind of plan of action to figure out, “Hey, I want to be a day trader”? How did you take it from there?
Ezra: Well, to really bring you up to speed, I guess I have to say, and to be honest here, Matt and I convinced, and it’s okay if I use his name… is that okay?
Clay: Yeah, I’m pretty sure he used his name in that.
Ezra: Oh, geez. Okay.
Clay: He’ll sue you, it won’t be on me. I [crosstalk 00:16:26] You sign the paperwork before he got in. Any sort of things you weren’t supposed to say, all lawsuits are defaulted to you. Talk freely.
Ezra: I’ll just call him deWolf. deWolf and I, we convinced that club to buy a course of yours.
Clay: Right, the Options one, right?
Ezra: The Options Course, that’s right.
Clay: I remember [crosstalk 00:16:46] that from deWolf.
Ezra: Now, he and I were diving into your courses. I think he came across your material on YouTube and it was clear and it stood out to us that while some of the videos were very I guess dry. In your beginning days on YouTube, it was really high-quality, no BS information, and we were finding a lot of these sort of quick sell, 30 days to a million dollars type deals that we saw through. We quickly zeroed in on your material. We looked over some of your [crosstalk 00:17:28]-
Clay: Let me ask you a… not to be rude and interrupt you, but [crosstalk 00:17:30]-
Ezra: Yeah, go ahead.
Clay: You saw through it, and unfortunately a lot of people don’t see through it. I always kind of like to ask people this because, like I said, some people just don’t see through it. What did you see… maybe better worded, what actually helped you see through it? Like I said, a lot of people don’t, so what was going on in your brain that was just like, “Nope, I see through exactly what’s going on here”?
Ezra: Well, I should say, in all honesty, that I did fall for something that we’re coming up on here, so I am not by any means the person who saw through all of the fakes and fads and was able to navigate the sketchy waters of the early days learning the market completely clean slate. No way. I think your stuff stood out to us because… Did you mean in your question like, what about the crazy courses, 30 days to a million dollars seemed wronged to me?
Clay: Right. Like I said, even from that point of view, some people are like, “Really? 30 days and I’m a millionaire? Okay, sign me up.” It sounds like you never went down that rabbit hole, so even from that point of view…
Ezra: It’s not quite… it seems something… not only was it too good to be true, but I grew up with a view that was very… not skeptical in a bad way, but I learned to be skeptical in a good way, to [crosstalk 00:19:07] question things-
Clay: You grew up on a dairy farm. You’re totally conservative in your viewpoints and approaches towards things. Farmers are conservative by nature because they’re business people, but they’re pretty…
Ezra: Very.
Clay: I know exactly what you’re getting at there, so skeptical but in a good way. You’re conservative in your approach to things. Is that fair?
Ezra: Very, yes, but I think being a young guy who wanted to… had great dreams of paying off all student loans and continuing my travels, I wanted to make things happen and that may be something that more people than not are familiar with. I wanted to make big things happen at 21 years old sitting in my college apartment, so I was tempted to do a lot of stuff, and I think that’s what drove my research and my obsession with the markets. My rituals of not only taking notes but just trying a lot of different stuff.
I guess to continue the story, we… where should we go from here?
Clay: You let me know. This is wherever you think is relevant. We’re pretty much right now, you’re wanting to learn day trading and you missed out, or you said you avoided a lot of this stuff, you saw through it, but it sounds like… like you said, you did fall for some of the stuff, so you can take it there, but really, just keep on going as far as… Right now, as far as my understanding of your journey, you’re still in the thick and thin of trying to figure out how to day trade and all of that. I’ll just let you take it from wherever you want there.
Ezra: Good, good. We’re recentered. Obviously, Matt and I are trying to figure out how the market works and we’re tempted to do the day trading thing. Now, I don’t know how his story went exactly or how his podcast interview went, but we did open up a brokerage account, each one of us, with the same provider and we were tempted to buy shares of these stocks and we were going school schedules, so we were on vacation and we were talking to each other about how the market was performing.
We each made a couple of silly decisions. I think that was our first real money decision or real money trade where we really bought shares of a cheap stock. I guess you would call it a penny stock. Totally not realizing that these sort of positions are usually just pump and dump-styled junk that never comes to fruition. It never performs the way you want it to or you have visions of it performing. I think it’s safe to say we each lost money there. It was our first real-time exposure and we thought, “Oh yeah, I’ve done like one month of research. I can jump in and this will be fine. I’ll make it.” As most people who are familiar with the market would say, that’s your first humbling experience I guess. You lose some money. This is part of the learning experience.
We came back to school, and this is all a little bit foggy to me, so excuse me if I’m jumping around, but we studied your Options Course quite closely. We were each keenly interested in options because we began to realize that they give you a little more buying power and that the potential to make money is greater in the short term than buying shares and waiting for it to go up a couple of cents at a time. Neither one of us has much capital to move in the first place, so I think you get the point. We were attracted to options for probably the same reasons that most people are attracted to options.
Clay: Right. You’re college kids, you don’t have a whole bunch of money, so you have a smaller account, and with options, it allows people with smaller accounts to be more flexible within the market. That’s probably a good summary of why I’m assuming you wanted the options. Smaller count, but you still wanted maximum flexibility within the market. Is that fair?
Ezra: Exactly. Yes, that is fair. Studying your course was something we did independently, but we each took pretty meticulous notes on it and we did, at that point, decide to go… we decided to purchase Robotic Trading. Now, we both studied that course as well. I think we did that at different speeds and we probably each got some different key points out of it, but we both typically had a school schedule to follow and we would both watch the markets in the morning. I think there was something, looking back on it now, that made it very fun to do while we were together because we could talk to each other. We could discuss this stuff.
I know nowadays, things have changed. It’s been a year since I’ve graduated school and I do it differently than I did a year ago. I won’t speak for deWolf, but I’m pretty sure that he has a different routine now than he did back then as well. I think it’s good to consider the ways we’ve evolved. I think it’s mostly that we’ve done the right thing. We’ve had some funny ups and downs learning about the market, both making and losing a little bit of money.
Oh, gosh, where do I take this from here?
Clay: I don’t know, but that’s actually an interesting point about how you feel like you’ve evolved and changed since where you were a year ago. From where I sit, I would make the argument that if you have not changed, if your routines have not evolved in any way, then you’re probably doing something wrong because I don’t know many people at all that are new to the market and then their very first try, they like nail the routine and their routine never ever needs to change.
To you listeners out there, if you’re like, “Yep, I’ve been in the market for a year, six months, year and a half, I’m not having very much success. I’m not very consistent, but you know what? I’ve got my routine locked in. It’s the same routine.” All I’m saying to you Mr. Or Mrs. Listener is perhaps maybe a problem is your routine. Maybe that’s what’s causing something within your inconsistency to be the problem. I would say, Ezra, that’s good that you and deWolf… Like you said, I know you said you weren’t speaking for him, but yeah, if you are new and then you look back a year later and it’s the exact same, I don’t know. I feel like everybody should be evolving. I don’t know if evolving ever necessarily stops. For me, I’m pretty locked in, but I’ve also been doing this for over a decade.
From where you sit in your journey, I would say that’s good. That’s a sign that you’re flexible and you’re nimble on your feet and you want to be going in the right direction. I guess when you guys were doing Robotic Trading and doing the Options Course, were you still using real money? From my understanding, this was after the penny stock incident. Is that accurate?
Ezra: Right. Yes, pretty much accurate. There was probably some other things I’m not remembering in there, just some silly trades or whatnot. I think we both decided that at that point… We probably heard in your courses that at some point, and maybe this wasn’t from your course, you tell me, but at some point someone has to make the move to real money. We knew that we jumped that gun too quick. We shouldn’t have gone in with real money the way we did. We should have paper traded or at least tracked the market because I think there’s a thousand different ways you can paper trade. Then, progressively as we got comfortable with our approach and our unique patterns that we saw or that we liked to use, then we could move in with real money.
Maybe I’m still a little foggy on what is best to do, what the best practice is, but we generally moved away from real money. We started to use either pen and paper to track the market and do like a very simple paper trading. We also both made TD TOS accounts, and because that platform lets you paper trade, and we did all the calling, the broker, we got real-time feeds and we were pretty up to speed on the paper trading part of things, so we could track the market when it opened till until it closed and I guess study our patterns, implement some of the stuff we had learned. A lot of it in the beginning was just getting a handle on what the heck all the data was on the screen.
I remember being extremely overwhelmed, even coming off of your course and going into the trading platform and just feeling like, “Wow, I don’t know what most of these numbers mean.” It was a long time.
Clay: That’s funny, you know? I’ll be honest, I don’t know what half the stuff on my platform means, either, especially on my chart provider. I make jokes about it quite a bit. There’s so many technical, I guess they’re indicators or tools that I don’t know how to use those things. I don’t know what they are, like Andrew’s Pitchfork. I’m looking at my screen right now. There’s like… I don’t even know what half of these things are called, so I totally understand. It can be very overwhelming where you’re just like, “Wait, what is all this stuff? What should I be paying attention to?”
Don’t worry, you listeners out there, sometimes you just got to focus on like the basics of basics data, and that’s really all you need. It’s great to have all these bells and whistles, but I totally can see how you would be overwhelmed because, like I said, I fully admit that, I’m not necessarily overwhelmed because I know what I want to watch and I know what I need to watch, but I can see how somebody would be like, “Wait, look at all of this stuff. What am I supposed to use?” That can be definitely overwhelming.
I assume you just kept kind of plugging away at it to overcome and realize what mattered and what didn’t matter?
Ezra: I think for the most part. I got a pretty good sense of what I enjoyed, and Matt, well, let me remind that, what I enjoyed…
Clay: Matt’s fine. I know for sure that we use his name, Matt, so that’ll be okay. It’s not a big deal.
Ezra: Matt and I kind of both enjoyed reading charts, very much so. Just like you had taught, we were big technical analysis people and we had it in our minds that we could still day trade, of course, and/or swing trade or some sort of short-term multi-day trade. We’re still in this club visiting meetings occasionally and actually trying to teach a little bit about what we knew to be true given reading charts, like the patterns we could make. the peaks, the valleys in the chart. We were trying to pitch this style to a group of people that basically didn’t see charts the way that we did. They were all about fundamental analysis. These were people who studied economics and then went on… they had goals to work in like the banking industry or something. They just didn’t see it the same way. I think that stood out to us right away.
We did a lot of studying on our own time, but it was mostly technical. I guess this brings me up to the point where I should let out the news that I did at one point purchase an alert service, and I won’t share any names or whatnot, but I purchased this service thinking I think that I had stumbled upon answers. That right away should be a red flag. There are no certain answers, certainly not that cost much money, and this was expensive. As a student, I thought a lot about it and I finally did it. I finally just pulled the trigger and I purchased this service and I had this [crosstalk 00:32:22]-
Clay: How much was that?
Ezra: Oh, geez. It was a thousand dollars.
Clay: For a year?
Ezra: Oh yeah. Does it sound familiar to you? Some sort of like just crazy… what they tell you is a great deal. Of course, they’re showing you a thousand testimonials a week of people making it back in a day. Oh boy, just thinking back on that, Clay, it was not my smartest move, but-‘
Clay: Well, to defend you, these people, they are master marketers. They know exactly what they’re doing. They know what buttons to press. They know what they’re doing. I just appreciate the fact that you seem to be blaming yourself, it’s not like you’re looking to blame anybody else, so I respect that. At the end of the day, it is your fault because you’re the one that did it, but I can also see why because a lot of these people out there, they know… they’re master marketers. They understand psychology and that sort of good stuff.
Was the premise going in like, “Hey, all you have to do is follow what we tell you to do and look at all these people that follow what we tell you to do and they’re making all this money”? Was that basically how they portrayed it?
Ezra: Yeah, in a nutshell it was. It was pretty specific. The guy who gave the morning alerts was a spy trade of the day. Ticker symbol, STY, and we tracked the S&P and we made… it was all about options, so he gave you the specific options change to purchase and what he thought was the best I guess like risk versus reward position size for that day. He was very specific, and it’s not like [crosstalk 00:34:09]-
Clay: This is flat out puppet trading, like to the max. Like, “Hey-
Ezra: Definitely.
Clay: I realize for listeners, “Oh, well, that sounds really good.” I’m telling you, it just does not… it sounds good on the surface, but that’s just not how it works. I’ll let you keep going. Definitely this guy is very specific.
Ezra: Well, I would be the first to say that I totally got sucked into this. What you say about the marketing is so true. I doubted for a long time that it was real, and what happened at that point where the more you visit, the more you think about it, and then the more you think about it, the more you start to see that all these people see to be just rolling in money. That was very attractive to me as a college junior or senior with so much free time and just this ritual of already tracking the markets thinking, “I have this interest, so why not just go all-in? What’s going to be the downside?” Well, obviously the downside is that you pay the upfront lump sum and there is no guarantee that you make anything. In fact, I lost money consistently.
I did sort of cap my losses. I guess that was one pattern that I picked up on early from you, that it’s better to get out of a position that you don’t feel comfortable with early than to sort of hold it and wait for it to recover. It’s like there’s something something policy there. I’m not thinking of the term for it, but…
Clay: It’ll come back or whatever. Now, were you following what this guy was telling you to do? Or were you like being a cowboy and venturing off on your own?
Ezra: I did a little bit of both. He gave very specific outlines, and so I would sort of reference what he said, the information he gave for the day, and then maybe like that was too expensive for me, or I felt that I could handle more. Again, going back to the paper trading and real money trading, I probably followed with paper for like a month, and then I started experimenting with real money because somewhere in my head I justified that a couple of winning trades out of, I don’t know, 10 losing trades was okay to now go real money, to now actually put real money on the line.
Clay: I think I have the answer for you. You signed up for the year, and then after you signed up for the year you paper traded for a month of what he was sending out. Is that-
Ezra: Yeah, roughly [crosstalk 00:36:57]-
Clay: A good understanding? This is what was going on. You had the voice that’s saying, “Listen, dude, you just paid a thousand bucks. We got to get that cash back, okay? Yeah, you’re ready. We got to get that cash back.” That’s what it was, and I don’t blame you. That makes sense, but that’s exactly why a lot of these services… they put undo pressure on you because people are like, “Oh, wow, that was a thousand bucks. I got to get this back.”
If I had to guess, that is why you probably justified way too quick. Like you said, a couple of paper trade winners, “Oh, all right. Yep, I got it figured out.” Well, yeah, the reason you thought you had it figured out was because you always had that… it could very well may have been an invisible voice, but you knew that you had just dropped a thousand dollars and, like you already said, as a college kid, that’s a lot of money so of course you want to get it back. You’re not stupid for wanting to get it back. That’s a normal human emotion, so I think that’s probably why and a big contributing factor into why you rushed from paper into the real money so fast just because, why wouldn’t you want to get your money back?
Ezra: Well, so this is a great question that I have for you because… you can answer really quick, but, is there a guideline that you like to follow for going from paper to real? Or is it basically on the premise that the person is able to efficiently navigate the terms that they set for themselves? That they can respect their own rules?
Clay: That’s a good question and it’s… I swear listeners, none of this is planned or scripted out, but literally the interview I just did a few days ago, which will air one week ahead of when your episode airs, I talked to Carla, and Carla, we had this exact discussion. Basically, Carla is… as she learns, as she’s going through Robotic Trading, she’s using real money, but in a very strategic and a very disciplined way. In fact, I liked it a lot, so I’m calling it The Carla Method because it makes sense the way she is doing it, but to your point, it’s also at the end of the day a function of the person. The person could be like, “Yeah, I’m going to do it like this”, but then if they don’t actually understand what “this” is or if they start to break the rules of how they define “this”, then things can spin out of control.
I’m not anti-using money while you learn. I’m not saying you have to paper trade, but there is lots of apples and oranges and gray area where, when do you know exactly when? Well, that’s going to be different for everybody, but like I said, I’m definitely not against using real money while you learn, especially after last week’s episode, which you have no reference point of. I know that does you no good here because you don’t know what that is, but it’s really a case-by-case situation. Most times I tell people to paper trade because what happens way often than not is people go in with way too big of a position size or they don’t quite understand something and then they do a “whoops”. I still do do “whoops” when you don’t double check an order and all of a sudden or you short when you meant to go long, or just stupid whoopses that always happen, and then all of a sudden, “Well, that wasn’t very pleasant.”
That’s why I always err on the side of just paper trade because from what I’ve seen, odds are people do… there’s just little rough things that pop up, so-
Ezra: Sure, sure.
Clay: Does that answer your question?
Ezra: Yeah, definitely. I guess I was looking for a solid answer. It does answer… it’s basically what I was hoping to hear is that it’s very much based on the person. It’s based on their available capital because I had very little to work with in school, and I still have very little relative to what I have in mind or even like what a lot of people talk about the ideal account size being. I think there… I did a lot [crosstalk 00:41:01]-
Clay: Are you still paper trading right now? Or are you using real money? Where do things sit right now for you?
Ezra: Yeah, sure, so we can move up to kind of present. Basically, I’ll wrap up what I said earlier, which was-
Clay: I’m not trying to push, I’ll let you take it wherever you want to go. I just wasn’t quite sure, but yeah.
Ezra: I had this service, and I don’t remember when I purchased exactly, but it was so that I graduated school, and then I had maybe four to six months left with this service. At that point, I had a very sour taste in my mouth. I was very skeptical of the alerts and I was quite disappointed with myself for what I had thought to be a sound investment ended up being just something that was… it was a trick. The bitter taste that that course or this alert service left for me made me take pause and reconsider what I was doing, what the direction was that I was moving, how much time and money and energy I could really invest at this point in my life, and what I was prepared to do as well.
I didn’t really have a list of goals written down for myself. I would encourage people at this point, knowing what I know, if you’re just starting out, to think about what it means to you to get involved, to define money first because everyone’s definition of money is different. I didn’t do this a year or two or three ago, so all I wanted was to click and see green, click and see green, and when you get in that mindset, you end up purchasing courses that are fake. It’s wasted money, but it is a learning experience. I wouldn’t change it I guess. It was rough. It’s hard because I can never get that back.
At this point, so some big things happened I guess after graduation. I did take pause in the markets and while I kind of monitored from a distance, I did not do any day trading. I studied when I had time, but even so, I would estimate that my total study up and to this point from graduation, so almost a year, has probably been 25 to 50 hours, which I would not consider to be a large quantity of time set aside to get really good at something. Skills take time to master.
I did, however, take away some very key things like everyone should be aware of what their money is doing. It got me interested in money overall, long term and short term. Things I hadn’t thought about before were, what the heck does life look like at 40 years from now? What does compound interest mean? How can I get involved and make passive income just by the power of money sitting and working for me? What’s some good information and sources I can use to set myself up in a good way so that I can actually start training? I can actually get involved without the pressures of… who knows? Just other life pressures, other life stresses, and certainly financial stresses.
If you want to learn how to trade, then it’s pretty tough if you got to make a monthly rent check and you’re seeing a lot of red or you have a bad month, but truth is, everyone has bad months and weeks or days. You should be able to accommodate those things, and this is stuff I’ve taken away from your courses, which I think is probably one of the most valuable pieces that I’ve learned. I think that your courses kind of do a good job of relating things to real life, which I didn’t find in other places, so I do appreciate that.
I’m just working a regular job right now. I’m not really where I want to be in terms of my career, so I feel that it’s a priority at this point to be happy in the day to day, before I set aside time to watch the market every day. Even if that wasn’t my thing, I guess I’m not in a place where I feel like I want to do it.
Clay: You mean you don’t necessarily want to…
Ezra: Well, I certainly don’t want to [crosstalk 00:46:15] day trade anymore. That’s my feeling.
Clay: You are geared or you’re thinking more so swing trading or I guess… What are you envisioning yourself doing if you don’t want to do day trading?
Ezra: Yeah, sure, and I don’t mean to give the impression that I’m not interested in trading at all. Sorry if I made it sound that way. I’m interested very much so, but I know a couple of things. I don’t have the right education yet, and so I’m interested in swing trading. The idea of minimal day-to-day involvement with the right planning, that kind of… I’m sure it would be different for me. It’s very hard to say at this point what it would look like, but my ideal trading habits would be minimal day-to-day oversight required, and then to make some… I guess swing trading would be anything. It would be multi-day, but I’m not sure of anything after a week that I might not. What would you define swing trading as?
Clay: Definitely holding over… well, you’re not buying and selling within the same day, so if you’re buying [crosstalk 00:47:39] one day and selling the next day, I would consider that a very short-term swing trader, whereas a longer term swing trader would be maybe you hold for several days or a couple of weeks. Not that that’s like the golden rule of how you define swing trading, but in my mind, I think that’s a decent definition.
No, just from my reference point, have you just done a couple of courses? Or are you ClayTrader University? Or where do you stand in that?
Ezra: I currently… Oh, man, I was tempted to purchase CTU in this recent price update, but I haven’t. I’m not CTU. I own the Options Simplified and Robotic Trading. I think my next course needs to be about risk management. I’ve very interested in that course, but haven’t made any more upfront purchases yet.
Clay: Okay, all right, because I was curious that your comment about you know you need more education. I was thinking, “Well, if I can offer you some insight into how to better use ClayTrader University for more”, but you don’t have ClayTrader University, so your comment makes a lot more sense then when you say that you realize you need more education. Good on you for realizing that. You don’t want to be getting too far ahead of things. As I’m sure you know at this point, a lot of people think they know more than what they actually do, and then they find themselves in a whole lot of hurt, but you seem to be very self-aware of where things currently stand for yourself, which is good. Self-awareness is a good quality skill to have, I guess not necessarily in the markets, but in life, too, so that’s good.
Going forward, it sounds like you know you… See, that’s why I got it now that I have more context. I got to disagree with you. How do you know you don’t want to day trade? You don’t even have full education. For all you know, you’re out there acting like a moron when you day trade because you don’t have full education, so my point here is I would encourage you not to be like, “I don’t want to day trade anymore.” No, that’s not fair because that’s not fair to yourself because you don’t have a full picture of how you could properly day trade. Is that a fair assumption on my side that you may be not knowing what you don’t know since you don’t have the full picture?
Ezra: Totally. Absolutely. I guess I should leave it very open-ended because I hope that this is the first podcast of many to come, and I really do want to tell my story and I think it’s great to provide reference for those in similar positions. I can only, only imagine how many students get involved in the markets during those undergraduate years where they just have so much free time, and how many are pressured and faked into stuff just like I was. If there’s an opportunity to educate myself more and share that, I’m all in. I would gladly be a part of it.
You’re [crosstalk 00:50:30] You’re right, though. That said, I don’t know what I don’t know, so-
Clay: Yeah, I would say that you don’t know enough to be able to make a proclamation such as, “I’m not day trading”, or, “I don’t want to day trade.” What do you like to do as a hobby?
Ezra: Well, so things all play a part. I am at this point have my personal training certification.
Clay: Okay, there we go. Perfect. That’s like me saying, “I don’t really know much about personal training, but I know I don’t want to lift weights.” It’s like, “Well, wait a second, you don’t understand all the benefits of lifting weights.” You would think I’m crazy for saying, “I got a little bit of knowledge about personal training.” You want to eat fruits, vegetables, and some protein, but I don’t want to do weightlifting. You’d be like, “Wait a second. That doesn’t make sense. You can’t make that proclamation. You don’t have a full understanding of personal training.”
That’s kind of what you’re doing here, and I realize that you know that now, but I’m glad you’re open-minded to the fact that you don’t want to get too far ahead of yourself in terms of what you are and are not interested in. What do you do for work? Before we got on air recording, you said you were able to manipulate your schedule now. If you feel comfortable enough disclosing, but I’m just curious.
Ezra: Sure. I work in New England and I’ll just say that much, but I work for a… the technical term is micromobility company. If you’ve ever heard of bike share, that is I kind of operate multiple markets where there are a fleet of bicycles available for the general public to use. It’s a dockless system, so people just have a smartphone app. They check it out, and then they lock the bike when they’re done and my team and I move these around and run events. We’re kind of in charge of every bit of the program in our area, which is really on me. When it comes to manipulating my schedule, there’s people who work under me and I can make time for things that are important to me, Clay.
Clay: Nice, nice. Well, I’m glad this made it high enough up the list of being important to you, because this [crosstalk 00:52:43]-
Ezra: Absolutely.
Clay: Has been a good talk, and to your point, the idea here is for this to be the first of many podcasts and I look forward to bringing you back so we can continue to hear how this journey plays out for you. I know you’re, like you said, a loyal listener, so you know what the final question here is going to be. If you were to use the time machine, go back to the start of all of this and give yourself one bit of advice, what would that bit of advice be?
Ezra: That is the question. I would say look for the things in all the noise that make the most sense to you because the one thing I learned and looked back on wishing I could tell myself or give myself some advice on would just be to trust what feels right in my gut. Not that I would make a trade based on what I feel in my gut, but I don’t know that I would have gotten involved in some of the things I did like that course or just felt the need to jump in so quick with real money if I wasn’t so pressured by what everyone else is doing around me. I would take it down a notch and I would slow it all down and I would ask myself, “What really matters? What will work for me?”
Clay: That’s good. That’s great advice. I like that a lot, actually, because being a former college guy, I totally can understand that perspective and that’s a good use of the time machine. I’ll leave it at that. Well, I just learned one of your hobbies, but I want to learn about, what is your favorite movie?
Ezra: Ooh, movie. I grew up watching a lot of movies, but the one I always come back to is the original Forrest Gump.
Clay: No, that’s a classic.
Ezra: It is.
Clay: I understand if it’s not somebody’s favorite movie, but for somebody to be like, “I don’t like Forrest Gump”, I would say, “You must be a Communist”, and I would just leave it at that because that is pretty much the only logical outcome of that statement. That’s a good movie, for sure. What about food? What do you like for food and dessert?
Ezra: Well, growing up on a farm, we raised our own meat, so I have to say that my favorite food is I would say like a really good steak, and then dessert, oh boy. Well, it was just my birthday recently, so we’ll go with a nice homemade birthday cake.
Clay: Those are good. There’s nothing wrong… a good old-fashioned cake, it doesn’t get any more American than that, especially dairy farm America right there. Frosting probably made by the raw milk right out of the udder, but anyways, this is getting way too detailed, and then final question here. Three words, and these three words need to be what you would describe or associate with what you believe it takes to be a successful trader.
Ezra: I would say… this has probably been used, just be patient.
Clay: I don’t know if that’s been used, but that’s good. That’s good. Definitely, just be patient. With a little asterisk, but not too patient because at some point you got to just start doing stuff and making stuff happen, but I do agree. You also need to be patient, so it’s a fine line, but that is definitely… I like that a lot. Just be patient.
Ezra: Well, we’ll see [crosstalk 00:56:25]-
Clay: Very, very nice.
Ezra: On the next podcast, the next episode with me in the future if I say those same three words.
Clay: Yeah, who knows? Your next one will probably be “make it rain.” That’ll probably be your next three ones. It’s gone from “just be patient” to “make it rain”, and given you grew up on a dairy farm, make it rain that cheddah is what you’ll be saying. I crack myself up sometimes, I really do. I’m so clever.
Ezra: You’re too much, Clay.
Clay: Yeah, I am. I really am too much. My poor wife and kids. Well, Ezra, thank you very much for taking time out of your day, and like you explained, you were able to manipulate things to make this happen, and I appreciate you hiding underneath the boxes and the blanket right now so that nobody saw what you’re doing and I appreciate it. I’m glad you’re fully onboard with coming back because I definitely want to hear how things continue to play out. Thank you very much for hanging out.
Ezra: Thank you for having me.
Clay: For you listeners out there, before you go, a final few things here. If you are listening to this on iTunes or any of the other podcast players, make sure to subscribe so you’re kept up to date when new episodes come out, and especially on iTunes, if you could leave us a rating or a comment, that helps us out and goes a long way. We would really appreciate that. If you’re listening at claytrader.com, in the show notes page, then there’s a little chat box that’s there so you can reach out to us through that if you have any questions, comments, or whatever and we would be more than willing and we want to interact with you. That’s what we kind of pride ourselves on is good personal interaction, so there is that choice there if you are on the site.
Overall, thank you for listening. Thank you again to Ezra and to all you listeners, we will see you back next week.
Announcer: This has been The Stock Trading Reality Podcast. Thanks for taking the time to hang out. To learn more about Clay and the ClayTrader Community, including the Trading Team, premium training and more, visit claytrader.com.