LIVE WEBINAR: 1 Hour Trader Transformation

73 Days. Only 1 Losing Day. Possible? Yes! Let Me Show You...

This Free Event Reveals: How I transformed myself from an employee to being my own boss (and how you can too, even with no experience!)

Thursday - January 28th - @ 7:00 pm est

Listen To The




Online Course

Randomness, like with most things in life, will destroy any kind of trading ambitions you may have. Whether it’s from my own personal experience or from the countless stories I’ve heard from others, when randomness creeps into the journey…. things get bad! My guest, Eric (“E” in the chatroom), is taking the exact opposite approach of randomness. For full disclosure’s sake, his current approach is by no means exciting and adrenaline filled like a roller coaster, but that’s the goal! He’s taking his trading in a very serious and methodical way. Whether you are brand new to the markets or have experience, but maybe struggling, there are some valuable insights into some ideas that may assist you in your journey. Let’s get to it!


Clay: This is the Stock Trade Reality Podcast Episode 267.
Announcer: This is the Stock Trading Reality Podcast, where you get to see the realistic side of a traders journey, get inspired, and stay motivated by everyday normal people who are currently on their journey to trading success. This is your host, Clay Trader.
Clay: I mean, you got to admit Huskies are pretty cool looking dogs. They got the blue eyes, they’re all wolf-looking. I don’t know, maybe it’s just the whole wolf aspect, but I like Huskies. And as much as my daughter would probably love it, and hopefully she’s not hearing any of this, because I would have to then explain, “Listen Joy, this was just in theory, okay? This was just a hypothetical.” Then I’d have to explain what theory and hypothetical mean. So I mean, that would be a big can of worms.
Clay: But yeah, if I were to get a dog, then I would definitely want to get a Husky. In fact, one of my good friends who’s been on several episodes, Nate Wilson, he has a Husky, Oakley, so shout-out Oakley. But yeah, it’s such a friendly dog. I know the downside is they shed a lot, and that is definitely give and take, right? Life is full of pros and cons. But yeah, if I were to get a dog, I would definitely go with a Husky, for sure. There’s probably maybe like a Lab as a plan B, but plan A, in my mind, I’m going long, the Husky.
Clay: For our guest today, we are talking with Eric. For those of you who are members of the community, in the chat room he just goes by the letter E, E as in elephant, or Echo I think for the military talk, Echo, just the letter E in the chat room. He’s been around for a while, as we discussed. He’s working hard, he’s practicing, and he’s going about things the right way. It’s a way that, yeah, it’s not necessarily the most attractive, it’s not the thing that’s really glamorous at all, but that doesn’t mean that it’s not the wise way, it doesn’t mean that it’s not the most effective way to go about it.
Clay: He’s playing things very smart, he’s not rushing, and he’s putting himself in a position that he needs to be in. Quite frankly, I would be very confident to say that if you are somebody that’s newer, or definitely brand new, I mean if you’re brand new then I have no problem saying that the way Eric’s going about it is a way you should be going about it, is the very prudent way to make sure that you’re putting yourself in the best possible position, and also just keeping yourself safe, because I lose track of how many times people rush into things, they aren’t behaving in a way that’s going to keep themselves safe. Now when I say safe, I don’t mean like from their health perspective, I mean monetarily speaking. And all of a sudden they lose a bunch of money or something like that.
Clay: So I really hope that if you are somebody that’s newer, or maybe you’re struggling, maybe you’re just not quite where you want to be, then Eric talks about something early on in his journey that he realized in regards to confidence, and we talk about that. Maybe your solution is exactly what Eric’s doing. Once again, full disclosure, it’s not an attractive solution, it’s not a fun one, it’s not one that you probably want to hear. But yeah, sometimes the things that you don’t want to hear are the exact things that you need to be hearing, so just keep that in mind.
Clay: Great talk. We had a lot of great talking points, and as always, went down some exciting rabbit holes that provide some good nuggets of wisdom and value. So without further ado, let’s hear about Eric and his journey.
Clay: Eric, welcome to the show!
Eric: Clay, honor and a pleasure, my friend.
Clay: It’s a little goofy to call you Eric because I’m so used to just seeing E in the chat room. But I don’t know if I can actually call you E through this, that doesn’t sound quite right. Are you going to be okay with Eric?
Eric: Yeah, that’s fine.
Clay: Okay, because in my mind you’re just E, but when I say E out loud it doesn’t quite sound as good as it does in my mind.
Eric: Not unless you got some good excitement behind it.
Clay: Yeah. But all right, well I’m glad you be able to manage with me actually calling you your actual name.
Eric: Yeah, no problem.
Clay: We’re off to a good start here. Well, I’m trying to think, you’ve been a member for, ah, I mean definitely what, at least six months, haven’t you?
Eric: Yeah, I think I jumped into the inner circle about the last quarter of last year.
Clay: Okay, yup, that sounds about right then, give or take. Well cool, you are my kind of L2 buddy, you’ve submitted several Level 2 screenshots for me, part of the Tuesday night webinars that are part of the program. Sometimes we’ll do some Level 2 practice, and I try to get my own screenshots of Level 2s when we have good examples that we can learn from, but sometimes I’m just not fast enough or I’m not looking at the right things.
Eric: Yeah, it’s tough.
Clay: So I always ask members like, “Hey, can you help me out?” Eric is definitely sending me screenshots over and helping me out in that regard, so it makes my life easier. Thank you very much for those.
Eric: No problem. Yeah, I’m trying to make more of an effort to keep an eye on those Level 2s obviously, it’s not more of a passive thing but more of an aggressive part of my trading practice.
Clay: Exactly, exactly. All right, well before we go to your current trading practice, as exciting as it may be, let’s start back at the beginning here, Eric. I mean, where did all this start for you? Where did you hear about the markets? What sort of things played out that kind of led you to the point where you made that decision, “You know what? I want to get more active with all of this”?
Eric: Yeah, so I mean I’ve been interested in the markets for quite a few years, but it’s one of those things that unless you have someone near to you that has traded the markets, been successful in the markets, you hear a lot of, “Oh, that’s just gambling,” and you hear a lot of naysayers. So it’s a little bit of a deterrent, to some degree. Then about a year, year and a half ago, I actually had an opportunity to kind of dive into more of the markets, day trading, what it’s all about, and saw that there was definitely, there’s something there.
Eric: That’s when I just kind of started doing my research, mainly just kind of went and read everything that I could off of Investopedia, watched some YouTube videos here and there, started coming across you and some of the other folks that push YouTube videos. But also, I always kind of ended up gravitating back to your videos in particular. So if I had something I had more of a thought about, I’d end up just going and checking out your page. You just seemed like more of my type of person, personality wise, and I just kind of liked how you explained things more so.
Clay: Cool. Not to interrupt you, but so it sounds like your first impressions of the market were people were just saying, “Oh, that’s gambling,” and stuff like that. Did I understand that right?
Eric: Yeah.
Clay: So you almost had that initial impression, I mean, a very faulty impression. Who were these people that were saying that? Was it just in passing? Was it people at work? I’m not looking to you to throw like a family member under the bus, so I mean tread carefully, but who exactly were you stumbling across in life that was giving you this impression that the stock market is just one big casino?
Eric: Yeah, I mean, a little bit of everybody. People at work that you’d start talking to in passing, “Oh, did you see this jump or that jump?” “Whatever, okay. Oh awesome, yeah, that’s just gambling.” “Okay.” But in saying that, I’ve always been pretty decent at pattern recognition to some degree. And not to say that just out the gate I could see this and that and whatever, but I could kind of see that there was something there. You know? Okay, well what they’re saying doesn’t really line up. There are some definitive patterns there. What they are I didn’t know at that point, obviously. And not to say that I know them now, but there is something there that I knew I could potentially grasp onto.
Clay: Right, and this is what I always like to, I mean I don’t want to say, say to those people, but just in general people always talk about, which is pretty much universally accepted, hey, the failure rate is like 90%. Okay, but think about what that implies. That implies that 10% of people have success. So if 10% of people have success, that means that it’s not a casino, it’s not gambling. I’m pretty sure that over time 100% of slot machine players, there’s not like, “Well you know what? 10% of slot machine players, they do it for a career. There are professional slot machine players.” Eric, have you ever heard of a professional slot machine player?
Eric: That I haven’t, but I’m trying to envision one that’s under the age of 65 right now.
Clay: I mean, just because you sit at the slot machine, and you’re burning through that … or I guess not inheritance if you’re … at 65 I guess that’s just their nest egg they’re burning through. But for you as a listener, if you’re ever kind of struggling with trying to refute the fact of, “Hey, you know what? The markets are just gambling,” all of that, just say to the person, “I mean, there are professional stock traders, there are professional options traders, and so on and so forth. Have you ever heard of Wall Street?”
Eric: Sure.
Clay: There are professional traders out there. But I mean, I’ve never heard of a professional slot machine player or craps player. Now, of course, there’s professional poker players, and I would argue that poker is not gambling. That’s a numbers game, that’s statistics and understanding probabilities.
Eric: Psychology.
Clay: Yeah, and then you have blackjack, where they … Yeah, that’s the one where they don’t want, “You can count cards, can’t you?”
Eric: Yeah, I’ve always been pretty good at blackjack, but yeah, that’s the one where you have the best [crosstalk 00:09:32]-
Clay: Okay. See, and there’s a reason why the casino is like, “Wait, he’s counting cards. Break his knees.” Because they realize, at that point, it’s no longer gambling. That person can start to manipulate things, they can find an edge within the context of the business itself.
Clay: The same is true for trading. Can it be treated like gambling? Absolutely, and most people probably do. That doesn’t mean that it’s actually gambling. Oh yeah, I was wondering how did we even get down this rabbit hole, but you said that was your initial impression going into all this.
Eric: Right, and then being on that, I would always remember back, I don’t know if you remember how difficult your freshman year of college was, but you always had that one professor who was like, “Look to your left, look to your right. Those people won’t be sitting next to you by the time you’re all done with this program.” I always kind of looked back at that as, yeah, if you don’t educate yourself about anything then you’re just setting yourself up for failure.
Clay: Yeah, that’s a good point because I still remember freshman year you’d have all the class, and, “Oh, what are you going to do? I’m doing engineering.” It seemed like everybody and their brother was going to get an engineering degree. But to that point, they pretty much show up, and I mean they don’t tell you this right out the gates, but afterwards, I still remember it, it was finally my second half of my junior year, they’re like, “Well, we’re not going to tell you that it’s guaranteed that you get a degree now, but you’ve kind of made it through where we’ve tried to destroy you, and you’re still here, so just don’t be a total moron and you’re going to get an engineering degree at this point.”
Eric: Yeah, yeah, yeah.
Clay: But they truly just tried to, I mean that’s the saying, they tried to weed you out, and they beat you down. But no, yeah, that’s absolutely true, is I mean just because you say you want to do something, just because you say you want to be a trader, in my case all these people saying they want to be an engineer or whatever, well you still have to do stuff, to Eric’s point you still got to study, you got to put in an effort in whatever you’re looking to do.
Clay: Is that just kind of how you were brought up? Or is that just how you’ve always been wired as a human being? Because not everybody kind of goes about it, a lot of people just think they can, “Well, I’m just going to kind of make it up as I go,” or, “I’m going to check out one book at the library or watch a couple videos on YouTube and that means I got it all figured out.” But it seemed like you had a much different mentality towards it all.
Eric: Yeah, a lot of it was how I was brought up, and then kind of just how I developed around my late teens, early 20s. I kind of got to know how I learn, how I get good at things, and then kind of try to focus in on whatever it is that I want to do, and tailor it towards how I actually like to learn.
Clay: So how did you learn? How did you learn how you like to learn? That’s an interesting comment.
Eric: Just paying attention to what works for me and what doesn’t. I’ve never been … I’ve been more of a contextual learner, so once I can actually apply something and break it into a million pieces, and put it back together. That always has been far more beneficial for me than just going and sitting in a lecture and writing down notes. So once I got the grasp of that, on top of making sure that I set a schedule for myself for studying and sticking to it no matter what, I went through and got a charter designation probably about 10 years ago now, and it’s all self-study, read these giant books, go take these tests where they monitor you and all that kind of stuff, a proctored exam. There’s like eight of them.
Eric: That was kind of the tipping point of like, “Okay, I have to figure out what works for me because I got nobody I can lean on with this.” So I kind of honed it all in at that point. An hour every night, come home, sit down, read a chapter, stop, and then just let my brain kind of take it all in and digest the information, and then come back to it and do some more tomorrow. I find that if I try to cram too much in, no matter what it is, I end up forgetting a large portion of it. So yeah, that’s kind of the stance that I take, at least for myself. Everybody’s a little bit different, but that’s what works for me.
Clay: I’m glad you said that because I can’t … and to your point, you’re absolutely right, everybody is different. But I’m going to make a pretty bold general statement here because we are relatively all pretty similar as far as how our brains operate. I mean, of course we’re not all Jeff Bezos or Bill Gates or something like that, or Elon Musk. But I’m right around that hour, maybe I got two hours in me, where you can really look at something, stay laser focused on it, and I like what you said, actually be able to remember it. I mean yeah, I can go for 10 hours straight just watching videos and reading and doing this, that, and the other. But when it comes to actually absorbing, absorbing being defined as like Eric said remembering that information, yeah, going beyond that two hour point …
Clay: But one hour, I think that’s a huge component that a lot of people are missing, and that can really help people out because people sign up for the classes like, “Oh yeah, I’m already through the first class.” I’m like, “Wait, the first class is like 20 hours. You signed up like four hours ago.” “Well yeah, I had you on two-and-a-half speed.” I’m just like, “Okay, well just because you go through something doesn’t mean you absorb it. I mean, I guess you could be like a savant, but I’m pretty sure most people aren’t savants that can just absorb all that information.”
Clay: But I think that’s a great point on your part, where for everybody it’s different, but you really kind of got to lock down that sweet spot of when does your brain shut down, when is it open for business in terms of retaining the information that you’re learning. For you, it sounds like right around an hour. I’d say I think most people are probably right around an hour to two hours at most, and then after that you’re not really retaining stuff. Are you a note-taker? Or are you somebody that just likes to listen and you can absorb it as long as you don’t really go beyond that hour mark?
Eric: No, I’m definitely not a note-taker by any stretch of the imagination. So like with the trading pieces, I was more of a follow along kind of guy. And anybody that’s listening to the podcast, just FYI if you’re in Easy Trading view, they only let you go back so far. And some of these videos, Clay, recorded were back in 2013, so you’re coming pretty quick to where you can’t actually go back and follow along with what he’s doing, if you want to do it on your own.
Eric: I would bring up the class, I’d hit pause, I’d actually pull the chart up on what I use, and follow along like that. I’m pretty good about staying honest, as far as not looking ahead, “Look at what this is going to do.” I would just roll the clock back, stop it, and then I would go ahead and start the lesson and follow along with you and see where I landed.
Clay: Okay, so are you talking about the stuff within the program I offer? Or are you talking about-
Eric: Yeah.
Clay: Okay, okay. So you’re going back through the video archives of all those webinars you’re saying?
Eric: Yeah, the webinars. Well even robotic trading, going back that far if you really wanted to kind of break it down and look at it on your own platform. I use TradingView, personally. TradingView only goes back so far with historical data, so if you’re that kind of a learner, I’d recommend jumping on sooner than later.
Clay: Okay, all right, yeah. I didn’t know that about TradingView, but that does make sense. But it’s funny because we’ve had plenty of other people on here, “I got piles and piles. I hurt my back, actually, carrying my notebook around, because there’s so many notes in it.” And here you’re, “No, I don’t really take notes,” which I guess circles back to where we all started. I mean, there’s no right or wrong way, but it’s definitely very important to identify how you learn best, where that time point is where your brain just, sure, can listen, but are you absorbing?
Clay: Those are definitely key things that make a big difference in regards to actually giving yourself a chance at being able to approach this in a practical way where we’re actually not running around like a chicken with your head cut off. Because just because, I don’t like to say this, but I’ll be honest and say it, even if you take my courses, if you just rush through them and don’t retain it, then you’re still going to be a chicken with your head cut off because I mean you got to make sure that you actually absorb and take it step by step in terms of what you should be looking for.
Clay: Oh yeah, so to rewind, your initial impressions were gambling, but you knew there was something else there, you knew that there was patterns. Sure, you didn’t know what they all were, but you had an idea that, “All right, no, this is not just totally randomness. This is not just totally gambling.” So you got on YouTube, you found my videos, and then you had continued to find yourself going back to my videos. I guess pick it back up from that point. Is that when you joined the inner circle right away? Or were you trading at this point with your own money? Walk us through kind of where your status was at that point.
Eric: Yeah, so I hadn’t joined the inner circle at that point, and that was about when I had joined this one platform that a broker had done, I don’t know if you’ve ever heard of him, Robinhood.
Clay: No, I’ve never heard of them, never head of them, nope.
Eric: So I had opened up an account with them, and I was making trades based on kind of roughly what I had learned, and I was doing fine with it, but it was mostly buy and holds.
Clay: Now when you say roughly what you had learned, you mean through just your YouTube searches and just all the random stuff you were doing?
Eric: Yeah, reading Investopedia and stuff.
Clay: Okay.
Eric: Mm-hmm (affirmative), yeah, and that was all well and good, but I guess with me and kind of the stance I’ve taken with all this is that yeah you see the big numbers that people throw up and consistency, that’s all well and good. But I’ve found that I wasn’t as confident with my trades. It was like, “Okay, well yeah, an entry here, but where am I going to get out? Okay, maybe there.” I wasn’t necessarily using the proper indicators to indicate an exit if it wasn’t going to be at a true exit point or a scaling point.
Eric: So it was my confidence level that really kind of drove me. I wanted to be more confident with my trades. That ultimately ended up driving me into the inner circle and trying to get my knowledge a little bit more underneath my feet.
Clay: Okay, so you just flat out realized that you weren’t confident, and a lack of confidence is just coming from really a lack of strategy at the end of the day. So good on you for recognizing that. What sort of stocks, I mean, were you doing like penny stocks? What were you actually trading with that Robinhood account?
Eric: No, I was sticking more to things that were under 100, but I was staying above 10. So I was trying to stay away from penny stocks because I knew enough that that was a different animal than just straight up buying a stock, trading a stock. I knew there was a bit more strategy involved with trading penny stocks. I steered clear of those from out the gate. I was usually just buying like Amazon, or Tesla, or a little bit of this, or a little bit of that, or whatever the case may be, and just kind of going from there.
Clay: Were you, I guess, at that time, what did you think you were doing? Did you think you were day trading? Were you looking to swing trade? What was your “strategy” at that point?
Eric: I was thinking I was more of a swing trader, trying to be a day trader, just in the sense of, “Okay, well this wing’s going to spike so I’m going to buy here but I’ll be out by the end of the day,” and then it ultimately doesn’t end up, it kind of teeters up a little bit, so I was like, “Oh, I’ll just stay in for another day,” or, “I’ll just hold onto it for a minute.” It would ultimately end up turning into that, because I mean, ultimately, I’ll tell you, I knew volume was important back then, but I didn’t really get it, to some degree. It didn’t come for a minute for me to realize how important volume actually was and liquidity of stocks if you want to try to inter-day trade.
Clay: So you’re one of those people that, I love how you said that, “Well, I was a day trader but then I kept turning into a swing trader,” and I think we’ve all-
Eric: Yeah, I wanted to be a day trader, it just wasn’t turning out for me.
Clay: Yeah, most people are there where you’re like, “Okay, I’m going to get in and I’m going to sell when it does this, and it should do this in like, I don’t know, by the end of the day,” and then whatever you think was going to happen doesn’t, and all of a sudden, “Well, I’ll hold because it’ll do it tomorrow,” and all of a sudden you’re holding overnight.
Eric: Sure.
Clay: The good old … Then pretty soon swing traders can turn into investors like, “Well, it still hasn’t done anything and it’s been a week, but I think this will be a good investment so I’ll just hold for the long term now.”
Eric: I didn’t get that dumb to-
Clay: But yeah, that’s kind of the normal sequence, day traders turn into swing traders, and then swing traders all of a sudden turn into investors because they just don’t want to necessarily admit and cut the loss that their trade plan wasn’t quite working out. How long did that go before you kind of just figured out, you made that determination, realization that, “Yeah, I’m just not confident”? Was that a quick process or did that take a while?
Eric: Yeah, it was a couple months. I mean, it really wasn’t a long process. I try to stay pretty in tune to how I’m actually doing or how I’m feeling about something. So I knew that if I’m buying a stock and then I’m cheering it on of like, “Come on, go north, go up, go this, go that,” then you’re not really that confident in what’s going on with it. You know what I’m saying?
Clay: Yeah, and it’s a fine line. I mean it’s totally normal, like you’ll get in and if you want something to go up, “Come on. Let’s go.”
Eric: Well yeah.
Clay: But if you’re sitting there like you’re saying going, “Let’s go! Come on! Get up there!” It’s like, “Whoa, okay, all right.”
Eric: Hit the brakes a little bit.
Clay: Yeah, there is a difference. I mean of course you want something to go up, and yeah, “Come on, let’s go. Get up there. Let’s go.” But I mean to cheering and dancing around, it’s like okay, why is that that shocking to you? If you were that shocked that it actually went in your favor-
Eric: Exactly.
Clay: … did you really have that much confidence in the first place that it would go in your favor, or is that just totally a guess that happened to work out and that’s why you’re this excited?
Eric: Sure.
Clay: But no, you’re exactly right, that’s a great telltale sign that, “You know what? Maybe my strategy and confidence levels aren’t where they need to be.” All right, well you realize, “I’m not that confident,” you join the inner circle. I mean, if you want to plug in any holes in the story go for it, but pick it back up from that point.
Eric: No, that’s about it. So I started in the inner circle kind of just saw what people were posting, I’d go back and I’d look at the alerts from the day and see if I could mirror what you were saying. Then beyond that, I started, even then I started kind of going into your weekly watchlist that you send out, and I would just go put the tickers in first, and then I would look myself and see if I could tell where you were going to go with this based on what I saw, and I still keep that habit up today, just to keep practicing.
Clay: Oh that’s interesting because at the top you can just see the ticker symbols without even seeing the chart, so that would be totally fine in the sense of you wouldn’t have hindsight bias because you’re seeing the chart itself, you’re just straight-up looking at the ticker. That’s interesting, that’s a good tactic, I like that.
Eric: Yeah. So just going from there, and seeing what people were saying, and obviously all the positive energy that rolls around in the inner circle, all the million driving me into the classes.
Clay: When was that time period wise?
Eric: I want to say that was Thanksgiving, December-ish last year.
Clay: Okay, okay. I guess we kind of already talked about how you approach the webinars and stuff like that. But I mean were you still trading with real money while you went through this stuff, or you hit the pause button on all that?
Eric: No, I’ve taken a breath periodically through this whole process. But yeah, once I made the decision like, “Okay, I need to get some more information under my feet with this, I put the pause on that for a period of time, and then moved into, since then, I’ve now switched over to TD Ameritrade Thinkorswim, which I really enjoy the platform, and then I use TradeView for my charts.
Clay: Why did you make the switch? Why did you left Robinhood? What, what, what?
Eric: Come on.
Clay: Walk people through your thought process son switching brokers.
Eric: It’s just not nearly as robust as Thinkorswim, and really the tipping point for me was when they started dropping all the commissions. So I was like, “Okay, that’s fine.” Not to say that I was going to go live trading right then and there, but I was like, “Okay, let’s check some other places out.” So I checked them and Interactive Broker, and I just really like Thinkorswim.
Clay: Walk listeners through the word robust, because I know what you mean and you’re absolutely right, but I can see somebody that’s using Robinhood right now saying, “Wait, what does he mean by something more robust?” So I mean, in what’s important to you, what do you mean by robust?
Eric: Just the tools at hand being, yeah, Robinhood has options, but you can’t break it out by weeks really, it’s hard to see, I don’t think they really give betas or the Greeks at all if I remember, I could be wrong, I don’t know.
Clay: I really hope you’re wrong because let me put it this way, to those of you who are using Robinhood, well I guess twofold, if you’re trading options, you’re like, “What are the Greeks?” that would be red flag number one. You should not be trading options. The second part would be if you’re saying, “Yeah, no, Robinhood doesn’t show the Greeks,” I’m not saying that you shouldn’t be trading options but I mean to Eric’s point there are plenty of other brokers out there now with no commissions. Please change to them because the Greeks are pretty important as far as options are concerned. So I really hope that’s wrong though, Eric, because that would be very shocking.
Eric: I could be wrong. I briefly looked at options before I ended up shutting the account down and coming over to Thinkorswim. I just remember going, :Wow, this is not good at all.”
Clay: I mean, it is Robinhood, so honestly I wouldn’t be shocked if that were the case. I’m just really hoping that they’re not that much of a garbage platform when it comes to options. But anyway, so robust in the sense of tools?
Eric: Yeah, tools, charting, what they offered. So not that I’m trading Forex or any of that stuff, but that is there that you can go and look at it and get some more information on it. Obviously their class backgrounds is nice if you want to utilize that portion of it. Their charting platform is great. I don’t use their charts I use it when I try to trade minis in the evening, just because I don’t want to pay for the live time on TradeView. So it’s just for practicing ins and outs in the evening time with minis.
Clay: Okay, all right, well I guess we’ll cross that bridge in a little bit.
Eric: Sure.
Clay: So you get into the classes, you’re going to the classes, you’re not trading with real money. How long did that study phase go until you decided that you were ready to start to use real money?
Eric: I haven’t yet. I’m still working the paper side of things. I think I’m close, but I don’t know if I’m necessarily right on-point quite yet, especially considering the last couple weeks, it’s been challenging, to say the least.
Clay: Yeah, the past couple weeks have been pretty crazy. All right, well-
Eric: I’m developing chart vision.
Clay: Yeah, no doubt about it. For anybody listening in the archives, if you’re listening to this months or even years from now, this is when the whole coronavirus stuff has been going on. I feel like at this point coronavirus is going to be one of those well-known topics now where even like five years from now people are going to be like, “Oh yeah, I know what you mean by coronavirus.” But for you as listeners that are maybe listening to this a long time from now, that is what Eric’s referring to, and yes, the markets have definitely been all over the place for sure.
Clay: Now you mentioned the minis, but what else are you trading? Is it options?
Eric: Yeah. So I’ve started using options as a platform, and then I’m using the actual, the umbrella stock for that option is what I’m monitoring for my entries, exits, and then mitigation points.
Clay: Okay, so what drew your attention? Why options as opposed to, now you mentioned minis, but why options instead of stocks or one of the other vehicles out there?
Eric: Well, I’d like to say that I could wax poetically about something, but really it’s just a matter of you see the numbers that options can put up, just because that growth factor is so high. That’s really ultimately what drew me to check out options as a tool for it.
Clay: Okay, okay. Is it more account friendly too for you? Or is that not a big deal? Are you just drawn to a flat-out the numbers that can be created, if you will, if you hit something just right?
Eric: No, it’s account friendly for me. I’ve been monitoring my paper trades to see if that would be realistic with what I would be utilizing once I do go to live money.
Clay: Okay, nice. Always a good kind of reminder to check yourself that you’re not totally just wasting your time. And as a listener, if you’re maybe new, because we talk about this quite a bit, if you’re practicing with a demo or simulator or whatever you want to call yourself, and in fact I had this a couple days ago, somebody goes, “Yeah, I’ve been trading for two days now. Here are my results. Do you think I’m ready to go live?” This person made like $175,000, and they were up $40,000 here and $15,000, and down $3500 over there. I said, “So you’re going to be able to trade? I mean, your account is going to be that big?” “No.” So I was like, “Well, with all due respect, you’re totally wasting your time. You need to be practicing with the actual account size that you’ll be going live with.”
Clay: So you as a listener, if you’re in the demo stage, please don’t be trading with some $50,000 account if in all actuality you’re going to be starting with $1,000 account. Change the simulator to $1,000 or whatever that starting number is because you can be as perfect as possible in paper trading, and it’s still going to be different than when you go with real money because of all the voices and stuff that are in your head. But I mean still, you’ve got to try to make it as realistic as possible. That’s definitely a little kind of quick trick to quickly force yourself to be treating this as realistic as possible.
Clay: Now, what sort of strategies are you … You’re mainly trying to day trade, right?
Eric: Yeah. Yes, so I’m mainly trying to day trade, I’m monitoring the five and two minute charts. I’d like to say that I could hit those sexy one minute charts like you do when the market opens, but that’s just not coming to me yet. So I’m monitoring the two and the five, I’m looking for breakouts and breakdowns. I was trying to snag bounces every now and then. I think they’re coming more into focus for me, but it just seemed like every time I was it would end up just pushing through the 50 or the 200 for whatever reason. And obviously I’d honor my stop loss at that point, but it was just getting frustrating for me. But I found that I was nailing the breakouts a lot more often than the bounces, per se.
Clay: So you’re not anti it, but you’re noticing within your results that if you’re looking to play a breakout there just seems to be more consistency there, then?
Eric: Yeah, I mean because with the charts that I use, I’m using my moving averages, volume, and then my relative strength are what I’m utilizing to monitor things. So in using those, for whatever reason, the breakouts, I was seeing those a lot more clearly than the bounces. Not to say that I don’t see them. I mean, if I was a super hero I’d be Captain Obvious with the superpower of hindsight, obviously. So you go back and say, “Oh yeah, of course, it’s right there, there it is.” But in the moment, it just wasn’t coming to me.
Clay: Yeah, if only … Trading is so much different when you look to the right side of the trade and it’s just all black and dark, or whatever your background is. It’s a little bit more challenging in that regard, for sure. But good on you for realizing that some setups, some sorts of movements you see better than others. I mean, it doesn’t really mean anything in regards of, “Well, that means you’re bad or you’re struggling,” it just means, “Welcome to the world of everybody’s a little bit different with their chart vision and what they prefer.” That just comes with the territory.
Clay: Before I forget, where did the minis come into play? Now, I’m assuming you mean the micro futures?
Eric: Yeah, micro futures. I had heard people talking about them in the inner circle, and then what really kind of drove me to it was that they were open at night. So I looked at it more as something that gave me the ability to practice my trading afterhours while sitting in front of the TV or whatever and have my level twos up and my chart up and just keep an eye on what’s going on.
Clay: Did you take the futures course that I offer?
Eric: I haven’t yet, no.
Clay: Okay, so you already understood how futures worked beforehand, then?
Eric: Oh no, I’m not going to say that I’m fluent at them at all. I just know that it acts … I mean, I can buy and sell them. And like I said, I just used them as a tool to just practice my entries and exits.
Clay: Okay, so you are actually buying them within a paper trade, you’re not just watching the charts?
Eric: Yeah, correct. Yeah, I am actually buying them.
Clay: Okay, okay. For listeners’ sake, first off, the futures market is, I mean it’s not open quite 24/7, but for arguments’ sake, it’s open pretty much 24/7. So that, to Eric’s point, you can sit on the couch at night and be watching charts play out. That’s something where, dependent on where you’re at in your journey, you don’t necessarily have to buy them, which is why I ask, because even if you just want to practice watching how charts unfold and thinking, “Okay, I think I see this pattern so I think the price is going to do this next.” Futures are a great way to do that because again they’re open outside of “normal” stock market hours, so you can really get a good … they offer up a lot of flexibility in terms of practicing.
Clay: But with that being said, make sure you kind of distinguish between the two because this is relatively new still. But there’s always been futures, and futures, I mean, there can be great gains, but they can eat your lunch in the blink of an eye based on how they move. I’m not going to go down that rabbit hole.
Clay: However, within, I don’t know, maybe it was about a year ago, a new product was created within the futures family known as micro futures, and those are just much more risk friendly because again, without getting too far into the weeds, with the way futures move and operate, the micros just really shrink down the risk and how much money you could potentially lose. Now, of course, that’s a two sided sword, you’re not going to make as much money either, but it does make for a good practicing tool. We’ve talked about past members that kind of used them.
Clay: This is all, I guess now that I talk out loud, you’re doing this through Thinkorswim, their paper platform, Eric?
Eric: Yeah, correct.
Clay: So they allow you to do paper trading in futures also?
Eric: Yeah.
Clay: Okay. I feel like I should’ve known that. I mean I definitely know they allow you to do it with stocks and options, but … It sounds like, would that be something you’d recommend to people, I mean a nice platform to practice trading the futures and all that?
Eric: Oh, absolutely, yeah.
Clay: Okay. Yeah, I guess I thought I knew that but maybe I didn’t because maybe I just always assumed that it was just the stocks and options that they offered. But regardless, all right, good. I would say that it seems like you’re doing pretty well, but you made the comment about the past couple weeks have been challenging. So I guess, how have you been challenged? Is what normally was working out not working out? Or are you just maybe getting a little anxious I guess? What do you mean by the past couple weeks? I get it, the markets as a whole have been crazy. But for you personally, I don’t know if struggle is the right word, but what have you found challenging?
Eric: Sure, yeah, I mean there’s definitely been a bit of a struggle. Previously, waiting for relative strength to get into a good place, waiting for the price action to get into a good place relative to my moving average, coupled with a good spot on the relative strength, good volume, I was having pretty good success on determining which way it was going to go based on all that stuff.
Eric: But it just seems like over the last week or two, specifically, that you’re getting a lot more plays off the 50 with mediocre strength at best, and not nearly as big of moves. It just seems like you’re looking at your bigger moving average, or your 200 and your 50, and it’s like, “Okay, you guys are going bull today, huh? Cool.” Then it’s like, “No man, maybe a little bit, but we’re also going to have quite a few bearish areas and maybe some big drops here or there.” So it’s been interesting to watch, to say the least, and try to trade in it.
Clay: So it just sounds like a situation where you’re taking losses, but I’m assuming they’re all still controlled losses, though, right?
Eric: Oh yeah, yeah. I mean, I take a very strong stance on if I’m going to move my stop loss it’s only going to be towards my entry, it’s not going to be away from it.
Clay: Okay. When you were trading with real money, were you using stop losses at that point?
Eric: Yeah. Yeah, I was.
Clay: Were you honoring … and I’m not saying this is the case, but just me personally, talking from personal experience, it’s easy to sit here and be like, when you’re practicing and stuff like that, “Well my policy is this, and I’m only going to be behaving in this way towards my stop losses.” Then when real money comes online, it’s like the voices come back up of, “Well this day trade is now all of a sudden a swing trade.” Or were you pretty good with that when you were using real money, with just honoring your stop losses?
Eric: Yeah, so even when I was, I was going more for, again, it was more of buy and hold, and they were ones that were going to go up. So stop loss didn’t really come into play. I would set them, I would honor them, but I think it might’ve come into play one time, and yeah I honored it. But yeah, moving it away, that’s going to nuke your account pretty quick from what I can quickly do the numbers on.
Clay: Yeah, no, if you keep, “Well, let me adjust it here, and let me adjust it there,” and the here and there keep getting further and further away from where you should’ve been, then yes, your calculator is not broken, Eric, it will quickly, that’s not going to work for you. I guess that’s really the best way to put it.
Eric: Sure.
Clay: Do you have any sort of, I don’t know if timeline is the right way, but I guess what are you looking for to see happen, or do you need to see some sort of consistency, but what is it going to take for you to go from where you’re at right now with the practicing and the paper trading to trading with real money?
Eric: Consistency is going to be a big part of it, not just consistent positively, but just consistently hitting the strategy correctly, staying within everything, exiting correctly. If I can do that for a period of time, a month, whatever the case may be, then I think I’m going to be in a pretty good position to go live at that point.
Clay: Okay. But you’re not under any sort of, “Hey, you know what? I need to be trading by,” I don’t know, I’m just making this up, “May 1st”? There’s nothing like that, then?
Eric: No, I’m not giving myself a drop dead timeline. But that doesn’t sound unrealistic. I was actually thinking about it the other day, and I’m thinking end of April, beginning of May, just see how things pan out with what’s going on right now.
Clay: Good. All right, well I’m glad you’re not. That was kind of a trick question in a sense because I was trying to set a little trap for you to be like, “Yeah, I want to be done because … ” And for listeners, don’t set yourself timelines, because this is what’s going to happen. Let’s just go with let’s say Eric’s saying, “I want to be trading by May 1st,” and it’s April 28th, there is going to be all sorts of voices that show up, and really there’s two types of voices. Well I mean, I guess both are lying voices.
Clay: But one voice is going to be saying, “Hey man, you’re ready to go. You’re ready to go. It’s almost May 1st, let’s get to it.” Then, but he’s not really ready to go, and he’s going to just show up and end up getting slaughtered. The other voice, he’s going to be honest with himself and be like, “Yeah, I don’t think I’m quite ready.” But then you have those little sneaky scumbag voices that show up, “You idiot. You’re not working hard enough. You’re not smart enough. You’re not,” fill in the blank of some sort of negative connotation, and that’s not going to be a help either.
Clay: So I mean, just go with the flow. Don’t put yourself under some arbitrary timeframe. If you’re sitting there saying, “Well you know, I’m going to lose my job on April 29th, so I need to be trading by May 1st,” goodness, do not do that. That is definitely a recipe for disaster.
Eric: So you want to lose your job and then go into debt.
Clay: Yeah, so if that’s the type of pressure you’re putting yourself under, where you’re literally going to lose a source of income, and then all of a sudden you got to learn how to create this other source of income for yourself, that is such a … don’t do that. That’s going to put way, way too mental pressure on yourself. If you’ve never traded with real money, I understand you don’t understand just how much of a mentally challenging thing this is. But it’s already mentally challenging enough when you don’t really need the money, when you can sit there and be like, “Yeah, I don’t need to pay the bills with this money. I’m just doing it right now to practice.” It’s already mentally challenging enough there. But if you need to pay the gas bill, and you don’t have the money right now for the gas bill, but you need to go out into the markets and get the money for the gas bill, especially when you’re just brand new, Eric, that’s not a good recipe, right?
Eric: No. No, I wouldn’t recommend that at all, end up rushing trades, then yeah, that’s a recipe for disaster.
Clay: Yeah, all I can really say is I hope you believe me, but if you don’t then, yeah, it’s going to be a painful experience. Now, you earlier mentioned you like to look at the two minute and the five minute. What other things are you looking at? What do you have on your charts right now?
Eric: I have my simple moving averages, my Bollinger bands, my view app, my volume, and my relative strength. That’s it.
Clay: Okay. Do you use, when you say relative strength, you mean the RSI, right?
Eric: RSI, yeah.
Clay: Okay. I mean, are you using that a whole lot, or is that kind of just as … Let me ask, what are you using it for within the context oof your strategies?
Eric: The relative strength?
Clay: Yeah.
Eric: So because one thing I do like about TradingView is it does have that Pine Script ability, so if you have any kind of a fluency towards coding it kind of makes it nice. So I’ve put in there when my RSI is in a particular area, so over bought or over sold, but relative to the slope of the 50 and the 200 moving average, that that would be, if the price action gets into a favorable place, either a bounce off one of the moving averages, or whatever the case may be, or some kind of a serious level of resistance, then that would be an opportunity to buy, or buy a call, buy a put, depending on which way it’s going to go.
Clay: This is all the script that you’ve written for yourself?
Eric: Yeah.
Clay: I mean, how has that been working? I’m not saying that this sort of stuff doesn’t work out, that’s not what I’m getting at at all, I just want to make sure, Eric, that you’re not chasing some sort of holy grail magical mystical indicator, too.
Eric: Oh God, no. No. I realize, it’s something just to kind of bring my attention to it when it’s happening. But I don’t focus, my primary indicators aren’t the RSI. Really my primary indicators are the price action scripts that I’ve written, relative to my moving averages and volume, obviously.
Clay: Okay, so what are these price action scripts you’ve written?
Eric: I wrote some script that will throw out a line of support or resistance when the price action, volume are occurring within the context of the overall moving averages. So just as an example, if I’ve had a decline or bearish movement in the price action that’s brought it down to the 200, and now I have a hammer candle developing on the 200, once that’s done developing, it’ll throw out a line of support for me, and then I can watch to see if that line of support either fails or if it then turns off the 200 and goes the other way.
Clay: Interesting. Do you ever feel like you’re getting overwhelmed with all these indicators flashing all over the place? Maybe it sounds a lot more complicated than what it is. But I mean, it sounds like you’re launching rockets up into space right now.
Eric: No, no. It’s definitely one that it’s a lot easier when it’s live, and you’re kind of watching things unfold, and you’re like, “Okay,” and then you see a bearish harami or whatever show up north of the Bollinger bands. Then, okay, that’s a pretty good indicator for that. When it’s going live, it’s a lot easier. But when you’re just looking at a screenshot of just here’s May 25th, it’s a lot to take in if you don’t know what you’re looking at.
Clay: Okay. I guess at the end of the day, how’s it been working for you, all these different hand-written scripts and stuff?
Eric: It’s been working great. I mean, unless you know how to double check things, and I’ve double, quadruple checked all of them to just make sure I’m not putting in bad math, but it all checks out fine, and I get the proper indicators when it should be showing up and all that kind of good stuff.
Clay: At the end of the day, if it works for you, then that’s what matters the most. I mean, that’s why you’re practicing right now, and as long as it’s been working for you, then … Is part of it, maybe, the market right now, is it kind of throwing off this stuff a little haywire? Is that part of the challenge that we were talking about a little earlier?
Eric: Yeah. So when I get an indicator about, “Okay, you need to look at it because you have a potential bullish move coming up,” it’s not that it’s not falling true to that, but it’s not going to be as big of a move, I’ve noticed, over the last two weeks, as it normally would. I think Zoom was kind of doing that to me yesterday when I was watching. It’s like, “Okay, everything’s pointing north, I got a good area for a bullish reversal coming up here,” and then it either gets it and it kind of fizzles out, or it gets it and it kind of makes a little micro move north and then heads south.
Clay: Do you notice any, and I don’t know if … Let me take a step back. Are you trading throughout the entire day? Or what times are you trading?
Eric: So I’m jumping in probably about … Well, talk about taking pauses earlier, just taking breaks periodically, when you first get in, you’re excited and, “Okay, cool, all I got to do is I got to get these things down, I got to get my watchlist that I can generate, put together,” then you’re good to go. Then I was putting together my watchlist, and then it just seemed like everything that I pick it was just either nothing really happened or whatever the case may be. So I would say about a month and a half ago I was like, “Let’s put that on hold for a minute, and I’ll just start trading off whatever you guys put in the picks.” That’s what I’ve started doing now, which has been working out well.
Eric: But I’ve been hesitant about trying to grab something at the 9:30 mark. I think I’ve gotten a little bit clearer vision, actually, over the last couple days, actually since the last webinar that you had where you interviewed … I apologize, I can’t remember-
Clay: [Kynoah 00:50:55]?
Eric: Yeah, Kynoah. You guys were talking about … First of all, I was about to have an aneurism thinking about how fast these things were moving, even though it was a still shot that we were looking at. But looking at the price [inaudible 00:51:07], it kind of made me go look at the initial price action for some of the stuff we were throwing out. It’s like, “Okay, yeah, I can see that.” So it’s gapped up, it’s poised for a bullish move, but the price is down below the 200, the 50 is above that, so if it can come up and break that 200 then you could get a decent run out of that.
Eric: I kind of recently … at least that’s my interpretation of it. I don’t know if I’m on point or not. But other than that, I’m usually not even jumping in until at least 10:00, let everything kind of shake out and then see where things go from there.
Clay: Okay. Yeah, and I was asking more so from the … wondering if maybe the main factor which makes things maybe clearer is perhaps your indicators and your scripts and all that works better when the markets are more liquid, so right at the opening period. Or I can also see a lot of problems being occurring if you’re doing a bunch of afternoon trading where the markets, especially after lunch time, things get a lot choppier and stuff like that. So I was just more so asking out of curiosity, do you track that at all in terms of afternoon trading versus morning trading?
Eric: Yeah. Most of mine, prior to what’s going on in the markets right now, was mostly between 10:00 and noon. Then if I saw something that was really kind of crazy come up or that was posted, I’d check out in the afternoon, then I might go jump into it. But mostly it was between 10:00 …
Clay: You still there?
Eric: Yeah, I’m still here. Can you hear me?
Clay: Okay, yeah, you must have cut out there for a second. But so you were saying it’s mostly between 10:00 and noon then?
Eric: Yeah, 10:00 and noon, and then I’ll just monitor for the rest of the day. I’ll just kind of have it up in the background while I’m doing other stuff or working or whatever.
Clay: Okay, all right. So it’s not really a matter of … Shoot, I was hoping you’d say, “Well yeah, it seems like I’m having all these problems when I’m trading from 1:00 to 3:00,” or something like that. I was like, “Well, it’s probably because you’re just getting chopped to pieces because that’s not the most smooth time within the market as far as volume is concerned.” But it sounds like you’re already focused on … And not that your strategies have blown up, but just always one of those things where for a lot of people that can be a good step in the right direction in the sense of, “Well, maybe you shouldn’t necessarily be trading as much as you are in the afternoon because that’s when liquidity and all that sort of stuff drops down quite a bit.”
Eric: Sure.
Clay: When you’re out there and kind of scanning and stuff, are you looking at a basket of stocks, or are you just looking for kind of whatever shows up? Or do you have a couple of go-to stocks that you really like to focus on? I know you mentioned you’ve just been trading with what you see in the pit and what other people are [inaudible 00:53:49]. But do you have any sort of stocks that you’ve kind of gotten to know their personality a little bit and you trade them more so over other ones?
Eric: Yeah, I think Roku is one that I’ve traded quite heavily, Tesla is another one. I’m trying to think.
Clay: You do much with Boeing?
Eric: Lately yeah.
Clay: Yeah, same here, that’s why I ask. It’s Boeing, I swear a month ago, I don’t know if … I mean, I’m sure I’ve traded Boeing before.
Eric: Airplane stocks [crosstalk 00:54:16]-
Clay: But yeah, Boeing I was like, “No, yeah.” But at this point it seems like I’m trading Boeing every single day.
Eric: Mm-hmm (affirmative). Boeing, and then Zoom, before today.
Clay: Yeah, another good example, ZM. I mean, I remember seeing that one, but now, especially last week, I was trading ZM a lot, that thing was crazy.
Eric: Yeah, it was crazy! Yeah, it’s been interesting to watch it all unfold, but there’ll be corrections that we need to play down the road too.
Clay: Yeah, no, for sure. So it’s not like you are locking yourself into, “No, I only trade Tesla, Facebook, and the spy.” You’re open to trading other things too, then.
Eric: Sure, yeah, and that was kind of one of my, not downfalls, but one thing I had to put a pause on. You can’t watch everything. You have to come to that realization at some point. So you can’t watch your watchlist, plus what they’re putting up in the pits, plus whatever else. Honing it down to … and I think it kind of came with more I guess chart interpretation of kind of seeing, “Well, this could pan out to something else,” more so than looking at the daily and then looking at the pre-market on something that I scanned for and then it just fizzling out to nothing.
Clay: That’s a great point. That’s so true because at the end of the day, as a trader, you need to be able to create your own watchlist. Now, you could create your watchlist by looking at other people’s watchlists. That’s totally valid, that’s totally viable. But to your point, is if you’re trying to just watch everybody’s watchlist, all of a sudden your watchlist becomes way too overwhelming and you’re like, “Okay, it’s literally impossible for me to follow all this stuff because there’s just too much stuff.”
Clay: But to your point, I mean, you’re really doing a good job and you’ve realized that it’s fine to take it from all these different places, but you ultimately need to learn how to kind of shear it down to what best suits your strategy. That’s a good point.
Clay: So yeah, as listeners out there, there’s no harm at all in looking at multiple sources, whether that be a chat room, maybe social media, maybe your own scanners. But at the end of the day, you can’t just depend on everybody saying, “Watch these.” Okay?
Eric: Sure.
Clay: Because then you’re going to have 50 stocks you’re watching, if you’re using a bunch of sources. You need to be able to say, “All right, yeah, I can take these, but what are maybe the five or the 10,” or whatever you feel comfortable with watching, because going back to Eric’s point, there does reach that point where … I mean, sure, you can have an awesome looking trade setup where you got 18 monitors and you have all this stuff, and it looks like you’re in the space station. But are you actually monitoring everything? Are you being able to do it in an efficient way that can put some consistent profits in your pocket? I mean maybe, but most people … How many monitors do you use, actually?
Eric: I’m using my laptop and my iPad as a secondary monitor right now.
Clay: Okay.
Eric: Eventually I’ll probably scale up, but I figure if I can be decent at it with something small like this, then scaling up probably won’t be much of an issue.
Clay: I mean honestly, I can buy, I’ll buy the premise that people can use three monitors. But after three, are you sure you’re really actually being able to monitor everything? I mean for me, I’m at like two. I have a couple big monitors. My whole setup is four, but I mean I use my other monitors for customer service, and business, and other things. But I just look at some of these setups and I’m like, “I mean, are you sure? Is that really required? Can you really comprehend all that information and monitor all that information?” Maybe some people can.
Eric: Without giving yourself whiplash.
Clay: But I would say you’re already probably right where you need to be. Like I said, I could see somebody going to three, but yeah. I mean, how many charts do you have open at once?
Eric: I’m usually watching two, two to three at any given time. Plus I’ll usually have the market open on one of them. So two, so I’ll have three, so I’ll have two open and kind of checking them out. Or with TradeView I’ll just kind of scroll through them to see what’s going where and keep that one up for a little while and see if it pans out to anything before moving on to something else.
Clay: Okay, yeah, that sounds manageable. But at the end of the day, yeah, I feel like that’s a whole nother almost podcast, where you could probably have some great debates. Like what is actually needed from a trading setup perspective? What’s the ideal amount of monitors?
Eric: Sure. And I mean, growing up, I did a lot of scuba diving, I worked in dive shops through high school, and I did a lot of competitive rock climbing. It always kind of killed me when people would come in fresh and they’re like, “Okay, well I’m going to get the best this, and the best that.” I was like, “Well if you can’t get the job done with this basic setup, these bigger, better, badder things aren’t necessarily going to help you out all that much because you’re not going to know how to use them, first of all, and it’s just going to kind off go to the wayside.”
Clay: All right, just so I understand, I think I know where you’re going. So you would have people show up and be like, “I want the best rock climbing shoes, and I want the best this, that, and the other,” and you’re like, “Well, let’s see if you can make it work with the very bare bones stuff. And if you can make it work with that, then yeah you’re going to have so much more of appreciation for all this other stuff.” But these people, are you saying that a lot of them came in and thought, “Well if I buy the greatest of everything, that’s going to make me a better rock climber”?
Eric: Yeah, without knowing how to use the intricacies or whatever the tool may be that they’re trying to pick up.
Clay: I feel like, and I’ve never done rock climbing so I could be stepping out of bounds, but I feel like what’s going to make you a rock climber at the end of the day is just literally physical strength, maybe some mental toughness, maybe some general knowledge of where to put your hands and what to grab, what not to grab, but it’s not like you can go out there and buy some sort of pair of climbing shoes and all of a sudden you’re going to be a great climber. Is that somewhat accurate?
Eric: Yeah, you’re pretty spot-on.
Clay: Okay, same holds true. I mean, not just to trading necessarily, but way too many people show up and they’re like, “You know what? I want to get involved, but first I need a brand new computer, and then I got to get these scanners, and I got to get those charts.” The list that they’re racking off, it’s like, “Well first off, I mean, even if that stuff were all free, which it’s not,” so right then and there I’m like, “Do you realize how much that’s all going to cost you from an overhead perspective?”
Eric: Yeah, I was going to say.
Clay: It’s crazy! But I mean even assuming all that stuff was free, which it’s not, but let’s just give them the benefit of the doubt and say all that great stuff is free, it’s like, “That’s not going to do anything for you. The thing that’s going to make you a good trader is the stuff that’s going on between your ears. It’s not the software, it’s not the hardware, it’s not how many monitors you have. It’s like I said, between those two ears, what’s going on there.” I feel like a lot of that has probably to do with rock climbing, and there are other things, is if … You just got to actually know what you’re doing, first off. There’s no bit of equipment or anything that’s going to all of a sudden turn it around for you.
Eric: Yeah. And putting it back to rock climbing, it’s one of those things that don’t ever get too comfortable because if you get complacent, get too comfortable, “Oh, my strategy works 100% of the time,” it’s going to fail eventually. It’s going to. And you’re not going to be prepared.
Clay: And in rock climbing you die, so I mean, that’s a good way of putting it. Don’t get complacent when you’re rock climbing. Well, don’t get complacent when you’re trading, for sure, but definitely don’t get complacent when you’re rock climbing because, yeah, that’s quite literally, basically … I mean I guess maybe scuba diving I could see that, but not many situations it’s like, “Well if you get complacent, the downside is potential death.” Yeah, that’s pretty intense.
Eric: Yeah, death oof your account.
Clay: You know what? That’s so intense, I think that’s a good way to end right on there, because we’re basically at an hour, and right there, don’t get complacent or else you die. If we can leave people with that, then I think that’s good. Well, time machine, if I were to lend you the time machine and you could go back to the start of all this and give yourself one bit of advice, what would that bit of advice be?
Eric: Stay focused and don’t be scared to put the pause on if you need a little bit more time to digest some information that you come across when it comes to trading.
Clay: I like that. That’s good stuff. Don’t be afraid to hit the pause button, you’re absolutely right, because in many situations, it is not fun, it is not the glamorous thing to do, it is not what anybody wants to hear is going out, “Wait, you’re …” But you know what? In many situations, it’s exactly what the doctor ordered, and it’s the solution to the issue. That’s a good bit of advice don’t be afraid to hit the pause button. That’s some good stuff, good stuff.
Eric: I try.
Clay: All right, well fun questions. Eric, what is your favorite movie?
Eric: Favorite movie, golly. The Departed.
Clay: Oh, that’s good. That’s a good one. Who is it? Let’s see, Leonardo DiCaprio, Jack Nicholson, aw man, that’s a good one.
Eric: It is a good one.
Clay: I don’t know if that’s ever been given as an answer. Now, I think that was based on, wasn’t that based on a Japanese movie or something, the first one?
Eric: Yeah, I think it was. Was there a sequel to it? Because I don’t know if they did one.
Clay: I don’t think so because spoiler alert, everybody dies pretty much.
Eric: Yeah, I was going to say.
Clay: So I don’t think there was a sequel to it.
Eric: Yeah, being in quarantine, I just rewatched it recently, and I remembered how much I enjoyed it the first time around.
Clay: Yeah, that is a good one. That’s super good. I’m pretty sure that it was based off of a Japanese … but you’ve never seen the Japanese version or whatever the original was?
Eric: Mm-mm (negative).
Clay: Okay.
Eric: No.
Clay: Where do you live, first off? Are you in Florida?
Eric: Yeah, I’m in Florida.
Clay: Okay, I thought so. So what do you like to eat down in Florida?
Eric: I mean obviously the seafood. Grouper sandwich.
Clay: Grouper sandwich, I don’t know if I’ve ever had grouper at all, let alone a grouper sandwich, but nice.
Eric: Wait until you get to the coast, and check it out.
Clay: I know. Where in Florida do you live?
Eric: I’m in the Tampa Bay area.
Clay: Okay, so that’s the Gulf side, right?
Eric: Yeah.
Clay: Okay. That’s Northern Florida, right?
Eric: I think we’re considered Central.
Clay: Okay.
Eric: We’re kind of parallel, slightly south of Orlando if you just kind of draw a line across the state.
Clay: Oh, okay. Gotcha, gotcha. All right. I mean, my Florida geography is half way decent. But did you grow up in Florida? Have you always lived there?
Eric: Yeah, I grew up down here.
Clay: Okay. Have you ever seen snow before?
Eric: I have. My wife and I, we’ll go out West usually once a year to go skiing or go hang out in the snow for a week here or there out to Colorado.
Clay: Nice.
Eric: So I enjoy it.
Clay: So you’ve done scuba diving, you’ve done rock climbing, and you do skiing. So you’re an action sports kind of guy, then?
Eric: Yeah, I’ve always kind of gravitated more towards those things. I’ve been diving since I was 15, and then I got into climbing when I was a senior in high school, through college. Then skiing, my wife and I, I want to say 10 years ago, first time we went. So I don’t belong on any black hills, obviously, or black diamond hills, but the blues and the greens, I’m good, nice little scenic day.
Clay: Nice. Well I was going to ask you your hobbies, but we just answered that. I like when questions are answered without me even asking them. Yeah, well awesome. Is that common? I feel like that’s kind of bizarre, somebody in Florida going skiing. But do a lot of people do that?
Eric: No. I mean, there’s some. I’ve known people to go out and go skiing, but usually it’s up in like the Northeast, they’ll go hit the icier slopes. But going out West, I think it’s more prevalent, I would say around my age range now that people go out there, at least every now and again, maybe not once a year.
Clay: I don’t know, I mean I guess I’m just of the mindset like as some battle-hardened Northerner that’s like, “Oh, well if you’re born in the South you would never seek out the snow on purpose.” But like I said, I-
Eric: I fell in love with the mountains when I started climbing, so I’ve always kind of been gravitating towards those things, at least for my hobbies or vacations.
Clay: That’s a good point. How did you get involved in climbing? Is there stuff to even climb in Florida?
Eric: Yeah, so we have rock climbing gyms in Florida.
Clay: Oh, okay.
Eric: I started with the gyms, and I started doing gym competitions, and then I moved into outdoor competitions, so we would go into Alabama, Tennessee, Georgia area, we’d go out to a place called Waco Tanks in Texas, and go out to California obviously. I never got into big wall climbing or doing like [inaudible 01:06:44], but I do a lot of low level sport climbing or bouldering.
Clay: Nice. Interesting, interesting. All right, well three words, and these three words need to be what you would associate with successful trading. What would those three words be?
Eric: Keep on grinding.
Clay: I like that, keep on grinding. We just had a guest previously that was, theirs was cut the loss. So that’s like two guests in a row that have done the whole making slogans as the three words. Keep on grinding. Boom. And don’t get complacent or else you die.
Eric: That’s true.
Clay: Don’t do that, or else you die. I’m kind of thinking right now, how can I work that in as the title for this. Get complacent and die. I don’t know, I’ll have to think of something. But that was a great way of looking at it. I like that analogy quite a bit. But Eric, well thank you very much for taking some time out of your afternoon and recording this with me. I appreciate it quite a bit. Hopefully you’ll come back at some point and you can keep us all updated on how the practice goes, and hopefully eventually you transition into real money.
Eric: Yeah, I will.
Clay: Will you come back at some point?
Eric: Oh, absolutely, yeah, absolutely.
Clay: Awesome, awesome. Well thank you again for hanging out.
Eric: All right, it was a pleasure. I’ll see you in the pits.
Clay: All right, well now for those of you listeners out there, before you go, final few things. First off, if you’re listening on iTunes or any of the other podcast players, please first off subscribe so you know when new content is coming. But especially on iTunes, if you could leave us a rating, that would be very appreciated, especially a written review on iTunes, that goes a long way and I really appreciate it. If you’re listening at in the Show Notes page, there’s little chat box there, so if you want to click on that, leave comments, questions, suggestions, we love to hear from members. It’s always enjoyable when a message starts off with, “Hey, I listened to the podcast.” So we love to hear from you.
Clay: Like I said, even criticism is fine, all I ask is make it constructive criticism and something I can work with. But yeah, I’d love to hear feedback from you, and really appreciate all the support that you give. So thank you again for hanging out, thank you Eric, and we will see you all 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 Clay Trader Community, including the Trading Team, premium training, and more, visit

Share This Post:

1 Hour Trader Transformation

"Let Me Show You How I Had ONLY 1 Losing Day Out of 73"

This Live and Free Event Reveals: How I transformed myself from an employee to being my own boss (and how you can too, even with no experience!)

Are you able to have only 1 losing day out of 73 days trading?

NO? Attend my free "1 Hour Trading Transformation" training event to learn how you can!

tunein-logo-svg-vector google-podcasts-logo stitcher itunes rss facebook twitter instagram youtube play-circle graph strongbox clipboard time-passing guarantee-icon thumbs-up books lamp stats-dots people people download-cloud trending-up video library id-card timer menu close notifications_active number 1 number 2 number 3 number 2 number 5 number 6 devices relate-arrow edit-script on-air chat playlist stop ticket calculator accountability friendship sketch arrow-right check_box_outline_blank lock unlock satisfaction-guarantee security smartphone phone_iphone bullhorn align-horizontal-middle sunglasses denied newsletter setting live credit-card