Transcript

Clay: This is The Stock Trading Reality Podcast, episode 260.
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, his mind remains blown with the science of dry heat, ClayTrader.
Clay: I’ve heard of this dry heat stuff forever, but I’ve never experienced it until I experienced it and then I thought, “Wow, this is actually quite mind-blowing.” I’m not trying to go into too many details, but I have no problem sweating. I’ll just put it that way. You know what? If I feel some heat, if I feel more so some humidity, then I’m probably going to start sweating, and in some case, sweating quite profusely. But when I went out to visit my sister and brother-in-law and nephew in California, I worked out in their garage. Their garage you assume would be hot and kind of sticky, but I never once sweated at all. The temperatures outside were 70s, 80s, but here I was in this little confined area, which if it was in Ohio where I grew up or Michigan, I’m sure even that much more down South, or Southeast I should say, I would probably be dripping in sweat. But not a single, single drip.
Clay: So for those of you that live in those dry heat areas, I’m quite jealous of you because that is, it’s just weird to me to have it be warm and to feel like you’re going to be hot, and you are hot, but because you’re not humid, for me at least, there is no sweating that goes on.
Clay: Maybe you’re sitting there right now being like, “What is this guy even talking about?” I never proclaimed to be easily or difficult to entertain, but I just found that a very bizarre situation, so needless to say, yes, I’m a big fan of dry heat, and I don’t know the science behind it. I’m not quite sure how it all works other than there is no humidity, but it’s fascinating and I liked it quite a bit, and it makes me want to go experience some more dry heat. And I laugh because if this is like the first ever episode, you’ve listened to, you’ve probably already turned it off by now because you’re like, “No, this guy’s an idiot.” But for those of you long-time listeners, you know that this is just randomness at this point in the podcast, but let’s move on to the actual podcast here.
Clay: Did I really just talk about dry heat and how I’m fascinated with dry heat? I did, but it is what it is. But our guest today is Mitch. Mitch is a relatively new member to the community, but he’s somebody that inspired me because he’s one of these guys, as a little spoiler, he didn’t go to college, but as a 21-year old, he’s doing very, very well for himself and it’s one of those situations where society kind of makes people think one way, but Mitch is not doing it the way society almost makes it seem like it’s got to be, and he was kind enough to share some of his numbers with me, and they’re very, very impressive numbers, again, especially when you factor in that he’s only 21.
Clay: And the other part of his journey that I found fascinating was Mitch started trading as a junior in high school, sitting in class, trying to do trades. And now that may or may not have worked out too well for him, but the point being, he is one of the youngest guests we’ve had that got started that soon in life. And just as another thing, as a spoiler, but it just kind of gives a… he also hijacked his brother’s social security number so that he could have a trading account. So, Mitch… Mitch, like I said, he’s a hustler. He’s a grinder. If he locates something that he wants to get done, he’s going to get it done and while I don’t advocate hijacking anybody’s social security number to create a trading account for yourself, I do advocate the fact of just locating something that you want to do and just going at it, and going for it, and hustling and grinding to get it done.
Clay: So, with all that being said, I promise no more talk of dry heat. Let’s hear about Mitch and his journey.
Clay: Mitch, welcome to the show.
Mitchell: How’s it going, Clay?
Clay: It’s going pretty good. I’m excited because, I don’t know. Maybe I know more about you than I think I do, but as of right now, I feel like I don’t know a whole lot about you. And for listeners’ context sake, the goal of this show is just to keep this as real as possible, and we have all varieties here. So Mitch and I got this thing fired up, went through a couple formalities, and then we got this going.
Clay: So, Mitch, I guess, have we… you’re not very active in the chat room, am I right in that regard, or am I just way off kilter here?
Mitchell: No, I’m not very active. I… Yeah, I started in the chat a few weeks ago. I kind of popped my head in, in and out, kind of reading what people spoke in. But I haven’t really posted much in there.
Clay: Okay, so-
Mitchell: I did kind of like an introduction little thing like, “Hey,” but, yeah, that’s about it.
Clay: So that makes me feel better then. So if you’re just a few weeks new to the community, well, first off, welcome. But that would make sense then why I feel like I don’t know much about you because you’re, by default, brand new. So awesome. Well, this will be a good… well, I have no doubt it will be a good interview, but hopefully there’s going to be something where… Let me put it this way. I have no doubt in my mind you’re probably going to catch me off guard with some things because I don’t know anything really about your journey at all, so these are always the fun ones to do. Not that you other veteran members aren’t fun to do, but I like to… where I’m kind of going into things blind.
Clay: So, Mitch, for this, where did all of it start for you? Where did you first hear about the markets? What sorts of things played out that got you more and more interested, and then eventually brought you to the point where you decided you wanted to get more hands on with it?
Mitchell: I guess it kind of started my junior year of high school. I was kind of just going through the motions of school, thinking on what the heck I’m going to do for the rest of my life after high school. I knew I didn’t want to go to college. I just could not stand the thought of bearing another four years, four to six years more of school. So I’m like frantic in my head trying to figure out what the heck I’m going to do after high school.
Mitchell: So I think I literally searched ways to make money. What am I going to do? And through that, I kind of saw something on YouTube of stock trading. I had no idea of what I was looking at. Just this guy, analystic charts, trading away, and I’m just watching him trade. Boom. He made like 500 bucks. Boom, 1,000 bucks. I was like, I was instantly hooked right there. I’m like, “This is awesome.” I felt like I discovered something nobody else knew. This is what I’m going to do. And yeah, so that’s kind of how I discovered the markets, from there.
Clay: And so clearly you did not have anybody surrounding you. Let me put it this way, had you heard of the stock market at least?
Mitchell: Yeah. I heard of the stock market and… I kind of just was always thinking from the little that I have heard of it, it’s kind of just something rich people who invest and stuff to grow their wealth. I didn’t really… much beyond that. That’s what I thought.
Clay: And that’s pretty typical and that’s what I always find fascinating is… because you made the comment, “I felt like I discovered something that nobody else knew.” And that’s true. Most people, they have no idea that yeah, you can be an investor for like 10 seconds if you want to. You can buy and sell, four or five, six, seven seconds later. But to your point, I was the same way. When I heard stock market, my mind automatically went to like mutual funds and this long-term horizon, which is of course part of it, but that’s the fantastic thing about not necessarily just the stock market, but the financial markets as a whole. They’re really so many nooks and crannies you can go down, but I like how you said you felt like discovered something that… apparently as far as your sphere of influence was concerned, clearly nobody was talking about actively trading stocks then, right?
Mitchell: Yeah. Yeah. No one like in my family unit or friend group was doing anything like this. So, yeah. And from there I pretty much fell down that YouTube rabbit hole, watching video through video, tutorials, all that nonsense, and I felt like I was generally learning and figuring this thing out. And I was buying books and literally investing all my free time, I remember, my junior year of high school into just learning this. I would be like skipping class and skipping school just to stay home and study this stock trading game.
Mitchell: Yeah, I was like certain at that time, I was like 16, 17 years old, I was almost certain I was going to trade all that summer after junior year. Senior year I was going to be pulling up into my high school with like, my dream car was a Hummer H1. I was going to be a millionaire. Girls would want me; guys would want to be me. It was going to be awesome. That’s what I had in my head when I was first finding out about this stock trading stuff.
Clay: Now, where did you get that thought in your head? Where you seeing stuff like that, or were you just running the math like, “Okay, if I can make all this money… ” I guess, I’ll let you answer, but where was all this imagery coming from?
Mitchell: I’m sure you’ve seen it before, what you see on Instagram and YouTube, people pulling up in their Lamborghinis and like, “Hey, I’ve made this much money trading stocks. Come… my video and… ” They’re like pulling in $1,000, $2,000, $3,000 a day. I was thinking that was totally doable for me. Needless to say, that’s kind of-
Clay: Well, you’re-
Mitchell: … [inaudible 00:10:28]-
Clay: Yeah, you’re not alone in that regard and that is… It’s a great marketing, it’s a great business angle. Sell the dream. Sell the dream. Sell the dream. And you had the dream. There is no doubt about it. You had the dream, and I guess, how old are you right now? Because I’m-
Mitchell: I’m 21.
Clay: Cool.
Mitchell: I turned 21 in September.
Clay: Awesome. Well, that’s great that you’re a young person that’s already involved. But I feel like, and I guess I don’t know this for sure given we’re up over 250 episodes, but I don’t know if anybody was as gung-ho like full bore into it in high school.
Clay: Now, kids, if there’s any high schoolers, we are not advocating skipping classes in high school. I may or may not have skipped some classes in college because of the stock market, but I’m not going to confirm nor deny that. But also, I was paying my way through, so it’s not like somebody else… But, I feel like, yeah, that’s…
Clay: And you already knew… So when did you start doing searches? You mentioned you knew you didn’t want to go to college, so you must have known pretty early on then in your high school career that you didn’t want to go to college. So I guess, when did you first do that scan, or that first search? Was that your sophomore year or was that during your junior year also?
Mitchell: It was pretty much my junior year I would have to say. Yeah, before that I was… pretty sure I wanted to go into med school and become a doctor or something like that, and like I was taking these medical classes and these biology classes, and I’m like, “Forget this. No way.”
Clay: So from doctor to, “I’m going to be driving up in Lamborghinis my senior year of high school.” So, all right, the wonderful mind of a teenager.
Mitchell: Exactly.
Clay: I love it. And listen, we were all teenagers and at least your mind was in the… Let me put it this way. I’m glad you realized that then rather than loading yourself with $800,000 of debt and then be like, “You know, I really don’t feel like becoming a doctor.” That would have… So far, I’d say you’re going about this the right way-
Mitchell: Yeah. For sure.
Clay: … in regards to realizing that sooner than after you have, like I said, both your ankles tied with big old weighted-down balls.
Clay: So, all right. You’re doing all this. You got books. You’re skipping class. You’re going down the YouTube rabbit hole. And you made the comment about you thought you were learning, which I found a little interesting. But we’ll see where that goes. So I’m going, how did all of this go? You got to the summer of your junior year, and did you open up a trading account, or… ?
Mitchell: So, I kind of started trading I would want to say kind of late in my junior year. Not quite summertime. But I opened an account, actually had to open an account under my brother’s name because at the time I was 17. In the US, I guess you have to be 18 to have a stock trading account. So I actually stole, literally stole my brother’s social security number, trading under his name.
Clay: We’re not advocating any of this.
Mitchell: Yeah, yeah. Don’t do that. Yeah.
Mitchell: And I think I opened it, I had like $300 or $400 account. And that was like my life’s savings. That’s like everything I had, which is… that’s… yeah. So that’s how I-
Clay: Who’d you open your account with?
Mitchell: It was Robinhood, actually. That’s when Robinhood had just… It was only like a year old at that point.
Clay: And did your brother know that you hijacked his social security number?
Mitchell: No. He found out later.
Clay: Well, all right. So, I guess what did you think your strategy was when you started? What was your game plan going in? And how did it all go?
Mitchell: I wanted to do the day trading, but… you know, doing the minute-by-minute trading wasn’t really realistic given being in school. Really 7:00 AM is when I was at school. So day trading wasn’t really realistic so I got into the swing trading, just trading the breakouts and-
Clay: And that’s where you ended. You were trading the breakouts, I think, and then that’s where I wasn’t sure if you had cut out.
Clay: All right, so we’ll pick it back… I’ll ask you a question from that point in time, and then we’ll pick it up from there. So we’ll… Just taking down a note for Nate so he kind of has a better idea of where to edit this.
Mitchell: Got you.
Clay: There we go. All right. So you are looking to swing trade, buy breakouts. Where were you finding these breakout opportunities? Did you have certain scanners set up? Or were you using social media? How were you locating these, what you would classify as an opportunity to buy a breakout from a swing-trading perspective?
Mitchell: The real early days when I was first starting out, it would have been Twitter. I was looking at Twitter, what people were talking about, what was trending. And I would go look at that chart and pretend I knew what I was looking at. At that time, felt like I knew what I was looking at. And try to mirror what they’re posting about.
Clay: Now, did you… When you… You thought you knew what you were looking at, so I’m assuming, did you have an idea of what like a candlestick was, for example, and a support or resistance level?
Mitchell: Yeah. Yeah, I did. I had kind of a vague knowledge.
Clay: So is it safe to say that just because you know what a candlestick is, just because you know what a support level is or a resistance level is, that doesn’t actually mean that you know how to trade? Is that a fair statement?
Mitchell: That is a very fair statement.
Clay: Because I see that quite a bit and it sounds like you were the same exact way. And I was the same exact way. It’s, “Oh, okay. Oh, so that’s what a candlestick is. Oh, so that’s what a support… Oh, that’s what a… Oh, okay. All right. I know how to read a chart. I know how to trade.” And there is, as you have agreed, there is a whole lot more that goes into it than that.
Clay: So, how did those early trading days go? Was your account growing? Did it go to zero? Or was it kind of just fluctuating? How’d those first bits of trading go with that, your brother’s hijacked social security Robinhood account?
Mitchell: Not great. Long story short. But I remember the first trade I put on… I don’t even remember what the ticker was, but I don’t even know why I bought it. Probably I saw somebody mention it on Twitter. I bought it, and I’m like in class trying to look on it on my phone, and I didn’t realize the trading software I was running was 15 minutes delayed at the time. So I’m trying to trading this stock-
Clay: Oh, man.
Mitchell: … with 15-minute delayed data, and I’m like switching between my Robinhood account and then this charting software on my phone, and it was just, it was horrible. It was a mess. And I was like a headless chicken running around.
Clay: What amazes me is it sounds like you had done a lot of studying or what you thought was studying. It sounds like you had put in a lot of time. You were skipping classes to be reading books and watching YouTube videos. And then even with all that, there is just still, just random weirdness out there where you still got caught up in, you didn’t realize that you were trading on delayed information. So you did all that stuff, yet you got something where in hindsight, I’ll speak for you, I’m sure you’re like, “How did I ever just not realize that?” But when you don’t know what you don’t know, there’s just so many little things out there that can bite you.
Clay: I don’t… I am laughing at Mitch, but I laugh just because-
Mitchell: Yeah, no, you have all the right to laugh.
Clay: … everybody’s done there and done stupid things. But that’s the point is, you can be so gung-ho. You can be just, “Yeah, let’s go for it. Let’s go for it.” And there’s just still randomness out there that’ll get you.
Clay: So, I would assume that… You mentioned headless chicken, and usually headless chickens don’t make consistent money. So-
Mitchell: I think I was just so eager to start trading and I was just, I just wanted to get start, and start making money right away, so I was just looking for anything to throw my money into, and…
Mitchell: The first few trades, I didn’t lose a lot. It was like… my $3, $400 account was losing maybe 10 to 20, maybe 30 bucks a trade, which at the time totally sucked. That was like traumatizing losing that much money being that I didn’t have a job at all or income. So, it was just kind of like slowly going down maybe like one step forward, two steps back sort of thing until I finally just said, “You know what? No. I’m done trading. Go back to the drawing board.” Dove into trying to learn again. Right back into that more YouTube videos basically.
Clay: So what were you doing differently this time? So you decided you wanted to learn more, so I guess, were you… Did you start watching new people on YouTube? Or… What was the change, because clearly you knew you needed a change, so what was the change? Did you start like YouTubing new strategies or just start with new people? But what was the change you actually put into play?
Mitchell: Yeah, I was kind of looking, what are all these successful people doing? What’s the strategy they’re doing? Trying to figure out that. And I started really tracking all my trades. I got good at that at this point. I have this Excel spreadsheet that’s just loaded with statistics and charts and whatnot. So, I started doing that and that’s helped me quite a bit. And, yeah. Just kind of trying to figure it out myself, trial and error. Bad trades and I do… correctly with my good trades.
Clay: And this was all still back when you were in high school then?
Mitchell: Yeah. Just still then.
Mitchell: But yeah, still at this point not making consistent profits. Still the majority of my trades were losing.
Mitchell: Actually, I have my Excel spreadsheet pulled up. At this point, I was at a 34%-win rate. Yeah, so… That kind of speaks for itself.
Clay: Well, kind of. That’s… But if your wins are massively outweighing your losses, then I could see a 34%-win rate still winning. But I’m assuming that your wins were not big enough to have be wiping away the 70-something percent of losses?
Mitchell: Yeah. So, my average loss was about 5%. My average win was about 7%. So it was… not horrible risk-reward ratio, but still [inaudible 00:22:06].
Clay: Well, and the risk-reward ratio got you in a sense of well, you’re only winning 30-some percent of the time.
Mitchell: Exactly.
Clay: That’s good you were winning, your wins were bigger than your losses, but you just happened to be losing a whole lot more than what you were actually winning. And I’m glad you brought that up because that’s always one attribute that people forget about risk vs. reward is like, well, how much you average make? How much you average lose? And then they, well what about the win rate? That does play a role too because just because somebody loses more than they win, from a lump sum perspective, if their strategy is a high-win-rate strategy, that can always compensate for that. And then it works both ways. Somebody could say, “Wow. You have a low-win percentage.” “Well, yeah, but my… For every win I have, it can wipe way about 10 losses.” So, just remember that as a listener out there. There is more to risk vs. reward than, well, how much do you make compared to how much you lose in a trade. Well, you got to also ask the how often question too. Well, how often are you winning? How often are you losing?
Clay: Well, how long did this all go on before you kind of just decided, “You know what? I need to make another change.” I don’t know, maybe you stopped, but did you ever… did you make it all the way through your senior year trading, or… ? Kind of fill in those gaps.
Mitchell: That summer, the summer I was planning on just trading full time, actually got a job offered to me as an apprentice carpenter recommended to me by my wood shop teacher. And I took it, so I was working full time that summer as a apprentice carpenter. And that was sweet. Loved that. And yeah, still trying to trade here and there. I’m like, nothing super serious. Maybe like a trade a week or something like that. But, yeah. My account still, it was just like a very slow climb downward basically. And yeah. Kind of trading like that. Kind of getting serious then maybe taking a month or two off and getting back serious like the next four to five years basically. And it was just kind of like that slow decline. And then literally [inaudible 00:24:34], I’m like, yeah, this is it.
Mitchell: I never wanted to and actually pay for a course. I always felt like that was totally unnecessary. All this information’s free on YouTube. What do I have to pay for a course? But I finally just decided to swallow my pride after doing this for over four years, not making money. I was going to look for a course and go all in on that. That’s where I came across your course as CTU. [inaudible 00:25:08].
Clay: So you, it was basically off and on for four years, just the same thing over and over again? Did I understand that right?
Mitchell: Yeah, pretty much.
Clay: And was it… you mentioned-
Mitchell: No, it has… I feel like I’ve gotten better over those years. I definitely got more practice under me and understanding of the markets and yeah, I’m not where I feel like I should be at.
Clay: All right. Well, where do you feel like you should be at? I’m curious there. What is your ideal situation? Now, of course your ideal situation is to be having money rain from the sky, but-
Mitchell: Right. Just be consistently profitable. My goal for this is just to have this as like another stream of income to have as a monthly, month-by-month basis. Oh yeah, just be consistently profitable.
Clay: No, absolutely. That’s always a good place to start. And then once you get consistently profitable, you can start to-
Mitchell: Scale up from there.
Clay: … you can start to scaled from… Exactly. Scale up and build good habits, and then with good habits, you can just almost pour gasoline on those habits and then they get bigger and bigger and bigger.
Clay: So you went all in. You said you jumped… or you’ve been a member for three or four weeks. So when you joined, did you join all, or did you kind of just dip your toe in water? How did that all play out?
Mitchell: So, I attended a webinar and I was kind of like shopping around for a while, like hmm, which course I should buy, but I decided to go with CTU doing the pay as you go. I’m a few courses in or classes in, whatever you call it. I’m just, like I mentioned a couple weeks ago, just started with the community. And actually, one of the biggest things is for like the little time I was in the chat room talking to the people in there, they were saying, “You know what? Just… ” Because I was trying to trade what I was doing while taking the courses, and they were saying, “Just let go of all those habits you have and just fully learn this course, and this is teaching.” So, kind of listened to that. I actually stopped trading and I was just strictly trying to relearn and kind of rewire my brain into right habits.
Clay: I’d have to agree with that advice that they were giving because everybody’s different, but for someone like you that literally has been trading since your junior year of high school and has been up and down and all over the place, there’s certainly habits in there and it’s something where it’s like, you don’t want bad habits to be bleeding with good habits, so I’m glad to hear that you’re just totally tapping the breaks and saying, “You know what? Let’s just hold out here a little bit.” You’re still only 21, so you clearly have… You still… Where you are was still, I didn’t even get started until I was like 22s, so you’re still ahead of where I was, so moral of the story there, you have plenty of time. And do you have any…
Clay: Now, of course you want to get consistently profitable, but do you have any sort of ambitions in terms of, for example, do you think you want to trade stocks or you maybe want to trade options or any other vehicles? Have you ever have any thoughts in regards to that?
Mitchell: Really all I know is stocks. That’s all I’ve been trading. I’ve definitely heard about futures and options and Forex and all that good stuff. I just don’t even know it. It’s like a foreign language to me. I own stocks, so… as far as I can see, that’s all I kind of want to trade.
Clay: Cool.
Mitchell: Super interested in the other stuff.
Clay: You mentioned that you were doing the pay-when-you-want plan. How many payments have you made?
Mitchell: So far two.
Clay: All right. So you, right now, are on the skill sharpening study guides and all that stuff then, right?
Mitchell: Right.
Clay: So have you printed out those guides and you’re going through all that right now?
Mitchell: Oh yeah. I have… Yeah. Burned through a lot of printer paper.
Clay: I like it. Old school. Printed them out. I suppose you could do screenshots and stuff like that-
Mitchell: Yeah, no. I-
Clay: … but that’s all right. You’ve taken down some of the Amazon rainforest for that thing, but-
Mitchell: Yes, I have.
Clay: Well, so how is that going so far? What guide are you on right now? What section are you currently doing?
Mitchell: I’ve actually just completed all of the skill sharpening, support and resistance, all that stuff. I’m getting ready to get that third course in.
Clay: Cool. Nice. And did you take quite a bit of notes?
Mitchell: Yeah. I have. Definitely I feel like it was a lot of prior knowledge. I have learned a lot about that stuff, but it was definitely good to really hammer it in and I definitely picked up some tips, so that was-
Clay: Excellent. I’m glad because somebody like you that’s probably learned about some of the patterns and general things, but you said there was still some things that you picked up along the way?
Mitchell: Yeah.
Clay: Excellent. All right. Good. That’s my theory on things is yeah, I get it, but usually there’s still some little nooks and crannies of details that can be picked up. So well done. I know that’s… Let me put it this way. If you can get through that one, then you’re clear sailing now because that one is a lot of repetition and a lot of… But there’s-
Mitchell: Yeah. I remember you mentioning like the first video how you were just going to get it into my brain and basically annoy me, and you definitely succeed at that.
Clay: Yeah, exactly.
Mitchell: I was-
Clay: That was not me being dramatic. That was definitely… But I’m sure you can complete my sentences for me now, which is a good thing because you have all that stuff locked down.
Clay: Do you have any sort of… Well, let me ask this. You’re 21. You chose not to go to college, which fine. Whatever. Are you currently working then? Or how is it kind of, setting trading aside, how is the life perspective going? Where is your income and such currently coming from? I’m assuming you have some sort of job?
Mitchell: Yeah. That apprentice carpentry thing I’ve gotten into my summer before my senior year, I stuck with that all throughout my senior year. Still with that now. So I’ve been with this carpentry company for… And that’s been awesome. We’ve doing work in a lot of high-end residential, millwork and trim work and stuff, so all that crown molding stuff. Honestly, I love that. I really feel like it was almost crazy coincidence or if God or whatever you believe in or whatever you want to look at it, I found that at that time. So yeah, super cool. Doing that now, and like I said, been with the company for about four years now.
Mitchell: Since then, graduated from being an apprentice carpenter, and now I’m actually a lead carpenter on site.
Clay: Now, you don’t have to answer this for me, but I’m curious. Are you on a salary? Do you get paid per hour?
Mitchell: Hourly right now.
Clay: You want to share what your hourly rate is?
Mitchell: Yeah, so with the company I’m making about 20 which isn’t crazy, but doing a lot of side work on my own, weekends and stuff, and that’s where I’m really making a lot.
Clay: Well, how much are you making in your side work?
Mitchell: I can pull anywhere from 500 to 1,000 bucks a weekend.
Clay: And how many… So, what does that break down to per hour?
Mitchell: I work about 12 to 20 hours a weekend. I don’t really track hourly wages.
Clay: I know. So, all right. We’ll call it 1,000 bucks for 20 hours. Is that fair?
Mitchell: That’s very fair. Yeah.
Clay: All right. So right there, we have a 20… For those of you, like… You didn’t go to college. What a loser. Whatever you’ve been brainwashed to think that you have to go to college to get at, all that nonsense out there. So we have Mitch here who’s 21, he’s currently making for the company $20 an hour.
Mitchell: Correct.
Clay: And then, he’s out there hustling and grinding making give or take right around $50 an hour. I don’t know. I can’t speak for you as a listener, but as a 21-year old, that’s some good money. That’s… And plus, he’s learning a very practical skill that is only going to become more and more demand given that most people want to sit around and watch Netflix and want to sit around and, “Oh, wait. I might get a blister if I do that.” Mitch is the kind of person that’s like, “Yeah, yeah you will. You should probably just don’t. Let me have all… ”
Clay: Where do you live geographically?
Mitchell: I’m in Southeast Michigan.
Clay: Oh, Southeast, Michigan.
Mitchell: Yeah, so I live in Rochester area. I don’t know if you’re familiar with that, but it’s like an hour north of Detroit.
Clay: Well, I grew up in Toledo. Well, Toledoish. So I’m assuming you’ve heard of Toledo, right?
Mitchell: I have.
Clay: Did you know I’m in Grand Rapids?
Mitchell: Yes. Yeah.
Clay: All right, well, I’m talking to a fellow Michigander. Does Maumee, does that mean anything to you?
Mitchell: No. No.
Clay: That’s technically the… It’s a suburb of Toledo. I figured you would have heard of Toledo, but I was just trying to figure out how deep down the rabbit hole you wanted to go there. But all right. Let’s see.
Clay: So you are… I’m trying to stay cool, but that’s great stuff. You know what? Who cares. I’m going to go on a little rant anyways.
Mitchell: Go for it.
Clay: So for those of you out there, if people are just like, “Oh, you have to go to college. You have to go to college. You have to go to college.” No, you really don’t. Learn a trade. Do what Mitch does. Learn carpentry and now he’s pulling in 20 bucks an hour. And plus, you’re also… And here’s the asterisk and what made me think of this is, but you have to be like a quality human being. You have to know how to work hard, actually talk to people, actually like smile, give them a firm handshake. Because did you say that you’re now a crew manager? Or you manage a crew or something like that?
Mitchell: I do. Yup. Yup. I am right now working on a job and got a couple guys under me. And it’s weird because I’m like the youngest guy on the job site, right? I’m… But it’s cool. I like it a lot.
Clay: But that’s the byproduct of actually being… Maybe I’m wrong, but Mitch, you’re not like some sort of superhuman are you? Are you like some sort of genius? Are you some sort of like just… Are you just somebody that shows up on time, listens, and just does what you’re supposed to? Are you not some sort of like… Leonardo. Not DiCaprio. Leonardo da Vinci. There you go.
Mitchell: There… Yeah.
Clay: You’re not like a Leonardo da Vinci of the carpentry world, are you?
Mitchell: No. No. I wish I was, but sometimes I like to think I am, but no. Just work hard, show up on time. Yeah. Professional.
Clay: There you go. And I love it. So that’s some good motivation there.
Clay: All right. Well, I’m glad that you have cashflow coming in. Fantastic. Do you have any sort of… I guess, what needs to happen? Where do you need to be in order for you to get back into trading with real money? So, I would assume the one thing is, well, I need to first make all six payments. That way I can get all education.”
Mitchell: Yup.
Clay: So I’m assuming that’s step one. But after that’s in place, are you looking to save up a certain amount? Are you looking to… I guess, how are you going to know when you’re ready to get back into trading with real money?
Mitchell: My plan is, yeah, I’m going to finish out the course. I actually just recently saved up for that. I’m going to dive into that. Complete that. There… basically start trading live. I can’t do paper trading. It just doesn’t work for me. I just don’t feel the same… so I typically will do a smaller account… $3,000. Trade with that. Buy… [inaudible] with that and just scale up from there. Really plan on scaling up this year is my goal. End this year with like a… really big goal, but that’s what I’m shooting for.
Clay: Well, you got to have goals. That’s definitely… You can’t shoot for stuff if you don’t have anything to shoot at in the first place, so I’m all for setting that. And at the time of this recording it’s just the new year’s under way, which is good stuff. And do you… When you went through the study guides, did you find any sort of maybe certain pattens you liked over others, or are you starting to formulate in your mind any idea of a type of strategy that you might want to be using right now? Where does all that stand? Because I’ve, talking with other people, I know that after they get through that like, “Okay. Yeah. I really don’t like that pattern much, but oh, those ones I feel much more comfortable with.” So did you see any of that or you kind of still just an open book in terms of everything? Or are you feeling like you’re kind of starting to shift towards maybe some sort of specific strategy? Not that it’ll ever come to fruition, but do you feel yourself leaning one way or the other?
Mitchell: Yeah. So definitely doing, sticking with swing trading just given my work life. But one thing I have really picked up on the course so far is the pullbacks. Buying on pullbacks as opposed to right on the break which is what I was doing a lot before. Which is why I was stopping out so much and getting that little win rate. Low win rate and decent risk reward. Buy right on that break and it would pull back. I’d stop out. Trade. Definitely I know you dived into that in the course so far, and hoping to take advantage of that.
Clay: That’s great. And… Yeah, that makes me feel good because that is one of those things where I’m glad you noticed that because you’re right. It sounds like you’re already starting to see the error of your ways and a lot of times… Did you find this to be the case? When you would “buy” the breakout because a lot of people are buying the breakout you would almost chase the order up some, so now all of a sudden, your entry point’s even higher than what you originally expected it to be? Did you find that happening also?
Mitchell: No. I got pretty good entries I would say, kind of right on the break. Didn’t really chase if I saw it… I have done that a few times where it exploded and I just wanted to get in right away. Yeah, no, I’ve usually been good at anticipating the break.
Clay: So you would buy before the breakout actually happened?
Mitchell: Yeah. Or right on. I’ll be watching a stock that’s at a breakout level, stop limit order set ready for that, to catch that break.
Clay: All right. Well, that’s good at least that you’re not necessarily… There’s always a time and place for everything, so from a listener’s standpoint, I don’t say this in a black-and-white rule, but yeah, in many situations if you’re waiting for something to fail, to break, and then you buy, then you’re fighting against stop loss orders and the self-fulfilling prophecy, and you can get some pretty rough entry points. So in many situations, it’s almost better anticipate it.
Clay: But it sounds like you were doing that, but still you’d suffer from the breakout, and then it’d pull back for a little bit, but the pull back in and of itself was enough to stop you out?
Mitchell: Yeah. Yeah. I’ve always been like super tight on my stops, which maybe that’s something else I got to… or lenient on, but… something I picked up on… sticking with me since the beginning. Which is a good thing and maybe a bad thing too, which is why I never really lost a lot… profit that-
Clay: Yeah, I would definitely… If I had to choose what kind of poison somebody’s maybe sipping on, I would definitely go towards that where… I’d rather have stops too tight, rather than no stops being used, or-
Mitchell: Right.
Clay: … stops being like some ridiculously number really low, or if they do get hit and you’re taking a massive loss. But yeah, based on what you’re saying, it sounds like stops probably too tight, but especially once you get to the RVR trading class, that’ll be… a lot of pieces will start to come together that much more. But I do… I like to know that… it sounds like the foundation towards the strategy that you’d like to head down towards is revolving all around pullbacks. I think that’ll be a good place to start.
Clay: So as of right now, you’ve gone through. You’ve learned about indicators and all that sort of stuff. So do you monitor the markets right now? Do you watch things trade via the charts and stuff like that?
Mitchell: I haven’t like the past couple weeks. Basically since the new year almost or the holidays. But, yeah, I have been. I have been trading very small positions. Just… Yeah. I’ve been-
Clay: So you are still trading with real money then?
Mitchell: Yeah. As of now, no. But I have been this last month just very sparingly.
Clay: Got you. Because then… So you pretty much stopped then after that conversation you had mentioned earlier about when you were-
Mitchell: Exactly.
Clay: … [crosstalk 00:43:58]. Okay. So I guess what I was just getting at is, it sounds like you are watching the charts still even as you’ve gone through the classes. If I were sitting next to you and look at your chart, what sort of indicators, what do you have on your actual chart now that you’ve gone through and learned about things? What things are you… I’m not saying are necessarily going to stay with them, but what are the indicators and so on and so forth that you felt comfortable with and you have them on your current charts?
Mitchell: I feel like most people might get sick if they look at my chart with the amount of stuff I have on it. But I got basically the three moving averages, exponential moving average, the 200, the 50… Oh actually, I’m sorry, a forward. The 200, the 50, the 20, and the 9. I use the 9. I’ve got the Bollinger Bands, just the standard setting, RSI, MACD without the histogram, MFI, and then of course volume all on the candlestick charts.
Clay: That sounds like a lot, but do you… I’m not saying that you’re wrong, but are you… you don’t feel overwhelmed or anything? Do you feel like you can… there’s no paralysis by analysis that’s going on?
Mitchell: No. I feel like I like this method. I… for a lot of people I know there’s probably a lot going on here, and like you said, paralysis by analysis, but yeah, for me it’s working. I definitely don’t get overwhelmed by all these indicators, and I definitely like having all these indicators back up the pattern.
Clay: Nice. Do you think you’re going to stay with Robinhood, or are you going to, do you foresee yourself probably going to another broker?
Mitchell: I currently have two brokers. I have Robinhood, which I’ve always had, and then right now also Interactive Brokers. So I have an account with them, and… I was using them as my charting.
Mitchell: I do like Robinhood. Just the way it functions and how easy it is. Just the way the app looks, really, is what I like so much about it. How… I would like to maybe just use Robinhood for almost like longer-term trades and then the Interactive Brokers for shorter-term.
Clay: So you want to… Have you looked into TradingView for your charts?
Mitchell: I don’t think so. I have looked into a couple. I think they always scared me away by the prices.
Clay: Well, TradingView has some… they have some pretty nice things with… Yeah, there is some pricing that goes with it, but their free charts are, for what you’re, the stage you’re at, that might be worth something to at least check, look into. But if you feel comfortable Interactive Brokers and their charts-
Mitchell: Really, I’m not too fancy about Interactive Broker charts, so I’ll definitely maybe have to check that out.
Clay: It’s always a matter of personal preference, but even Webull, Webull, if you put like 100 bucks into an account, then you get the real-time charts. And they have really nice charts. Whereas to your point, TradingView does have, if you want to get more fancier, then yeah, you do have to pay, whereas Webull, it’s just all included. So there’s a couple different things out there, but yeah, if you’re maybe seeing a little bit more after with what Interactive Brokers offers, because yeah. I’m not familiar with many people on the community that use Interactive Brokers’ charts. It seems like a lot of people use them as their broker, sure, but… Like I said, I could be wrong, and it’s all personal preference, but I don’t know if there’s necessarily known for their technical analysis charts or whatever. But, like you said, at the end of the day, whatever you feel most comfortable with, that’s what matters the most.
Clay: So, looking at the time here, we’ll start to wrap things up. But I do want to ask yourself, given you’re so new in your journey, do you recognize any weaknesses that you have that you want to work on or that maybe you’ve discovered during that four years when you were kind of in and out of the market that you want to be on guard against? And so then, let’s talk weaknesses, and then we’ll end on the positive note with some strengths. Are there any weaknesses that you’re currently working on or that you’re just trying to guard against that you know maybe had a history from your time back in high school and afterwards?
Mitchell: I’d say one of the bigger weaknesses, I touched on it earlier, is taking… basically stopping out too soon. Not being okay with… red a little bit, get more comfortable, the ups and downs of markets work. So that’s one of the main things. Trying to think. Other than that… top my head.
Clay: No, I think that’s really good self-awareness that, which almost sounds backwards because, here’s what I’m going to say. Well, I need to deal a little bit better with being in the red. But that’s true. As traders, you got to, to an extent. You got to be able to withstand a little bit of pain because as nice as it would be for every position to automatically go in your favor right away, sometimes you got to go through some consolidations. Sometimes you got to go through some periods where it is showing that you’re losing money, but they’re called unrealized losses for a reason, because they’re not quite real yet. But sometimes it can play a game with you, and to Mitch’s point, that is something that, yeah, can be a weakness.
Clay: Now there’s of course the pendulum can go the other way and the weaknesses, yeah, well, I don’t like to take losses at all, so I’ll let that thing get as huge as can be just for the sake of well, it’ll bounce back. It’ll bounce back and… Maybe a lot of times it does bounce back, except for the one time or the two times where it doesn’t, and then your account’s sitting in a massive crater.
Clay: I like that self-awareness. That is a weakness that I don’t think a lot of people are necessarily aware of. I think a lot of people have it; they’re just not aware of it, but the ability to be able to withstand some pain and see some things drop in the red, but not panic out and take too many losses because as your spreadsheet has said, yeah, your wins are bigger than your losses, but you just are losing way too often. And again, RVR trading, I think that’ll really help with that because you’re going to start to learn about logical ways to do things, and when you know something’s logical, then it’ll become much easier to sit through any of those pain points when they arise.
Clay: And then strengths. What are some things that you feel like you’re doing well and some things that you feel like you can just continue to build upon?
Mitchell: One of the things, I’m going to go back to the weaknesses I thought of, it kind of goes hand in hand with the first one I said, but I feel like I enter too soon. And I guess this kind of flows into strengths as well, is like I feel like… I pick a lot of times winning stocks, but I just, I enter too soon, it turns against me, I stop out, and it goes on to do exactly what I picked it [inaudible 00:51:30]. I’m finding good setups and… back at, two weeks later, they did exactly what I was planning on it, but I just entered too soon and got stopped out.
Clay: That makes that much more sense now why the whole pullback thing has probably caught your eye because help you be a little bit more patient with things-
Mitchell: Yeah, patience, definitely.
Clay: The pieces are coming together that much clearer. But that’s good. That is very good self-awareness, and you’re seeing some things that certainly need to be corrected. But any other strengths? I feel like you’ve hammered yourself here with these weaknesses, but what are some things you feel like you can build upon because they are good solid strengths?
Mitchell: I would say note taking and then tracking. Like I’ve said before, I really track every statistic of every trade I’ve taken, what the… all the technicals were saying at that point of entry and whatnot. So I have that all documented in Excel.
Clay: I was going… If you weren’t going to bring that up, I was just going to say as a former engineer, I have a great appreciation for your meticulous documentation. So I guess if you ever want to go back to school, I think engineering would probably be right up your alley with the way you seem to enjoy the spreadsheet. And the spreadsheets, I’m all with you there. But yeah, let me put it this way. When you can sit here and tell me what your average wins are and your percentages and all that from way back in high school, that’s some good stuff. That is great documentation for sure.
Clay: All right, well, as we start to wrap things up here, but you’ve said you’ve listened to past episodes so you’re aware of the time machine that exists. So if I were to give you this time machine, Mitch, and you could go back to the start of it all, what would be one bit of advice that you would give yourself?
Mitchell: I would have to humble myself a lot more. I would drop that dream of driving the Hummer H1. Give myself a lot more realistic expectations. I have to do definitely just… actually invest in your education. Don’t try to be cheap about it.
Clay: I think that… of course I’m biased and I’d be like “Of course. Of course.” Some people are going to say, “Well, of course you’re going to say that, Clay, because you are something.” But what I do like is realistic expectations, and you’re absolutely right. Too many people show up and they got the dream on their mind and… It’s their fault, but it’s not their fault because depending on what they’re looking at, those people… there’s some really good marketers out there that yeah, they’re going to make it all seem like rainbows and butterflies, but if you start just knowing going in that, yeah, it’s not going to be quite like that and realistic expectations, certainly I think that is really the best advice you could give yourself to anybody is got to have realistic expectations, and then there you can build from that point. But yeah, definitely a good way to really kind of set yourself up for more of a realistic set of things. It’s going with realistic expectations.
Clay: All right, Mitch, well, time for some fun questions here.
Mitchell: All right.
Clay: So, Mitch, what is your favorite movie?
Mitchell: 100% Shrek.
Clay: I think we’re on unchartered territory. I don’t think anybody’s given that one, but-
Mitchell: No?
Clay: … that is a… You probably… When were you born relative to that? Did that movie come out before you even born?
Mitchell: I don’t even know. I don’t even know when Shrek came out. I was in ’98, so it was close.
Clay: It’s relatively-
Mitchell: I think early 2000s maybe, so yeah.
Clay: All right. So maybe you were… you were a wee little lad when that thing came out, but all right. Well, that definitely caught me off guard. I was not expecting Shrek, but all right, are you a fan of like the 18 million sequels, or are you just-
Mitchell: No. The first one is where it’s at.
Clay: All right. Fair enough. Food wise, what do you like to eat?
Mitchell: Every day I could do pizza rolls. Pizza rolls and smoothies.
Clay: Ah, okay. Pizza roll is fine. Like smoothies, are we talking about like vegetarian smoothies or are we talking about-
Mitchell: No-
Clay: … like ice cream smoothies, and-
Mitchell: No, healthy smoothies, like just fruit. Fruit, milk, and fruit juice.
Clay: All right. So we’re not talking… Because sometimes it’s like smoothies are actually milkshakes but they don’t call them milkshakes-
Mitchell: Right.
Clay: … but all right. You’re talking… you’re in a-
Mitchell: Tropical Smoothie, that’s my go-to place for hanging out.
Clay: Oh, man. Yeah, my wife loves that place. They’re… yeah. Well, they serve all that… Tropical Smoothie, it’s probably worth checking out if you like smoothies, but I’m too cheap. I just get the blende and I just do it myself.
Mitchell: No, I do both.
Clay: It is what it is. And then what do you like to do for hobbies and stuff?
Mitchell: Hobbies? Pretty much work. I work a lot. Outside of that, lifting. I’ve actually, this year, built my own gym in my basement. Got to get full squat rack. So that’s sweet. Other than that, that’s it.
Clay: You do like-
Mitchell: I’m pretty boring.
Clay: You do like deadlifts and all that sort of good stuff?
Mitchell: Yeah. deadlifts, bench, squat.
Clay: So what do you dead lift?
Mitchell: I max deadlift right now… I’ve just recently started deadlifting, but it’s like 95.
Clay: 95 pounds?
Mitchell: 395.
Clay: 395. Okay.
Mitchell: 395.
Clay: All right. Well, you’re a monster then. Good stuff. Are you lifting for health or are you lifting for strength? And I realize they kind of go hand in hand in some ways.
Mitchell: No, I would say more so strength than just bodybuilding, trying to be as big as I can.
Clay: I kind of went through that too, but not that I’m like old, but I’m definitely older compared to you, and at this time I’m just like all for the practical strength. So I just leave the deadlift at 300. I’m like, you know what? I’m good. I’m happy that I’m at 300. I’ll just rep 300, and then like bench and squats I’m not even trying to… It would be great to be like, yeah, I can squat 400 pounds. But it’s like at what risk? The risk vs. reward. What is my upside? My upside is an ego thing, and my downside is I hurt myself. But at 21, your ligaments are good to go, but at this point in life, I just want the practical strength, more the health of it, but hey. At that age, I was all for like, let’s just see how absolutely ridiculously strong I can get. Just don’t hurt yourself. That’s all I’ll say, I guess. Because there’s really nothing… Are you looking to compete?
Mitchell: No. No. I just do this for myself.
Clay: So then, it’s really just remember, it’s basically then is it really worth having the ego to say, or having the ability to say, which is just ego, you can lift something, rather than, you know what? I’m just going to shut my mouth. You do what you want to do because this is not my field of expertise. All I’m saying is-
Mitchell: No, I definitely hear you though.
Clay: You know what I’m saying? From a trading perspective, the risk vs. reward, from a bodybuilding, it’s like okay, yeah, I get the… I feel like the risk is always so much more than the reward if you’re not doing a competition. If that makes any sense.
Mitchell: Yeah, you’re probably right. But I’m probably going to still-
Clay: No. I would-
Mitchell: … bench 500 eventually.
Clay: I would still go for it. I’m just saying like don’t go too psycho with it because there’s really no upside other than putting more and more risk that you’re actually going to finally hurt yourself.
Mitchell: Right.
Clay: All right, well final three words, and these three words are going to be what would be associated with safe bodybuilding. No, I’m kidding. The three words are what would you associate with a successful trader?
Mitchell: I would have to say, which maybe I’m not 100%… say it because I’m not quite successful yet, but I would say persistence for sure, you got to put in the reps day in, day out. I would also say detachment, and clarity. Detachment being being able to detach from your emotions. If you have a red day you can’t carry that home with you and get all pissed off at your family and stuff like that.
Clay: I like… that’s solid.
Mitchell: And then clarity, just being clear why you’re trading in the first place. What’s your goal?
Clay: No, that’s definitely… Clarity is always important because if your thinking’s just out of whack from that point of view, then things just spin out of control way too fast without that, so those are great words for sure. And you got to just be able to remain focused at the end of the day. But you also have to make sure that you’re focused on the same… or on the right things, which is where clarity and stuff like that can come into play. Because you can be as focused as you want, but if you’re focused on the wrong things, well, yeah, have fun.
Clay: Well, all right, Mitch. Well, thank you for context sake, it’s 6:00 PM, so I’m assuming, Mitch, you did this after your workday?
Mitchell: I did. Yes.
Clay: So thank you very much. I appreciate you taking time out of your evening to just share your story, and given you’re new, given you’re young, the good news is you’re clearly a hustler. You’re out there grinding, making 50 bucks an hour on the weekends. That’s some good stuff. So yeah, just keep at it and we’ll have to have you back at some point in the future, assuming you’ll come back. Would you come back in the future?
Mitchell: I would love to, yes. For sure.
Clay: Excellent. Excellent. Excellent. Then we will definitely have you back for sure. So, Mitch, thank you very much for hanging out.
Mitchell: Thank you, Clay.
Clay: Now, a final few things before you go as a listener. First off, if you’re listening at ClayTrader.com on the show notes page, make sure to… Well, if you have any questions, comments, suggestions, there’s a little chat box there. Click on that. We would love to hear from you with any sort of feedback you have. If you’re listening on iTunes or Spotify or any of the other podcast players, be sure to subscribe so you know that when future episodes are out. And especially on iTunes, if you could leave you a rating or better yet, a written review, that really goes a long way and helps us out and we would greatly appreciate it.
Clay: So thank you again to you as listeners. Thank you, Mitch. And we will see you all back next week.
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