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 - June 4th - @ 7:00 pm est

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Wins are overrated. Winning streaks are even more dumb! What do I mean? You can have multiple winners and be making all kinds of money; however, that tells you nothing about the viability of your strategy and system. The only way to know if you have a strategy that “actually works” is to take some punches. If you take punches and you’re account is still green and trending upwards, this is when you should be forming and maintaining confidence. Yes, I realize right now all I’m doing is talking in theory, but my guest from the community Matt (“msozua” chatroom alias) helps bring this topic into reality in a very motivating way. He started out with a single punch knocking him out, but he’s grown very much since then and he’s surviving and thriving.

Transcript

Clay: This is Stock Trading Reality Podcast, episode 269.
Announcer: This is the Stock Trading Reality Podcast where you get to see the realistic side of a trader’s journey. Get inspired and stay motivated by everyday normal people who are currently on their journey to trading success. This is your host, he’s gotten into shooting a bow and loves it, Clay Trader.
Clay: It is awesome. If you are looking for a good mental challenge, if you’re looking for something that … I can see how it would build upper body strength relatively quickly. Now granted, I workout, so I’m not quite saying it’s affected me that much, but shooting a bow is awesome. Maybe if you’ve ever been at summer camp and have shot one you already know what I’m talking about, but I’ve never done it before. I have never shot a bow. I never did it at … Yeah, went to summer camp once, now that I think about it. I think we rode horses or something, but I don’t know, that’s besides the point. We never shot bows though. So for me, this is a very kind of just new topic, new concept, new thing to do, if you will, over the past couple of months.
Clay: I would highly encourage you to get into it, whether that’s for hunting or for just targeting, or just to get out there and kind of have your mind … For me at least, it helps kind of just let my mind reset. It helps my mind go to different places, but from a trading perspective, and I think this is where there’s a very big relationship or correlation is, it helps keep your mind sharp, just like in trading, you need to have sharp mind, you need to develop systems, you need to develop … and really pretty much play whatever mind games you need to play with yourself in order to get you to trade the way you should be doing.
Clay: As goofy as that sounds, yes, I would argue that the vast majority of trading comes from just being able to trick yourself, being able to fool yourself with mind tricks and perceive certain things in certain ways that just get you to behave as a trader because I realize I sound like a nutcase, but if you ever traded with real money you know exactly what I mean. You have all these voices that live in your head that can really cause you to do some stupid things. However, when it comes to archery and shooting a bow, you need to … Let me take a step back.
Clay: By no means am I saying I’m saying I’m some sort of professional archery shooter, but I’m quickly learning that you need to have the right mindset, you need to be able to make sure, “Okay, how’s my trigger finger doing? Okay, do I have it pulled back? Where’s my elbow at? Where’s the level at? Is everything lined up?” I mean there is a lot of moving parts, just like a trade, and you need to keep your mind sharp. You need to be focusing on the right things, that is a big, nice relationship that I’m really liking.
Clay: But even if you never get into trading, or, I don’t know, you just stop trading and you just change to investing, I would still say, consider getting into archery. It is fun. It is really fun. As a father, I’m looking froward to hopefully getting into it with my daughters and my son, they’re all about it. They’ve helped me find some arrows that I’ve launched into the woods when I miss, but I guess that’s just part … They’re making money from it, because when daddy misses he’s one to pay them a dollar to find an arrow, much cheaper than having to go and buy an arrow all over again. But, yeah I would highly recommend it.
Clay: As for our guest today, awesome discussion, great stuff, and this is one of these interviews where … I mean, all of them have … So don’t get me wrong, all of them have little good nuggets of wisdom, but there are couple things that are said that, I mean, they matter, they really do. If you have any experience really at all you would agree with me, like, “Oh yeah, those things definitely do matter.” But we are talking with Matthew.
Clay: In the chatroom he goes by … I don’t even know how to say his alias, I’ll just put it in the description section, because I think it’s just abbreviation of his … I don’t think it’s supposed to be a word. If it is, it’s a word that I have no idea how to say. But for those for you that are active in the chatroom and community, I’m sure you’ve seen him. He’s relatively new, but he’s not really that new, but he’s definitely involved. He’s doing great. He’s got a great journey though and it’s … Started rough, but he’s really going about all this in a way that makes good sense. He’s asking himself the right questions.
Clay: I don’t want to give away and offer up a spoiler, but by asking himself the right questions, it’s really forcing him down pathways that he needs to be going down. He’s making lots of good decisions. He’s working very hard. He’s really just a grade A example of how you need to be behaving as a trader, the steps you need to be taking, and just factoring in the multitude of different angles that really go into a trade plan. I’m blabbing right now. I want to keep talking about it, but I’m just going to give everything away, so let’s just get to this member Matthew and hear about him and his journey. Matt, welcome to the show.
Matthew: Thanks for having me. I really appreciate being on.
Clay: Yeah. I know you’re taking some time over your lunch. Listeners, by the way, I’m sorry, I know I’m biased, but I think Matt’s another good data point, that how we have the greatest community. Matt could be pounding a sandwich right now at work, or whatever he eats, but he’s deciding … Actually maybe we’ll hear some chewing as you go throughout this, but, are you going to be eating as we do this? Or what’s the plan on that front?
Matthew: No. Maybe a bottle of water, but I’ll mute my mic for that.
Clay: All right. Well, there we go. I mean, he is sacrificing his lunch hour, his time to carb up just so he can share a story. But in all seriousness, I do appreciate it. I also thank you for volunteering to be here, makes my life much easier. But, with all that being said, let’s just, I mean, dig right in here. Where did all this start for you Matt? Where did you hear about the market? What sort of events or dynamics played out and led you to the point where you decided that you wanted to get more hands on with this whole trading thing?
Matthew: Well, as you say, inherently just growing up I’ve always been a fan of numbers. I’ve always been guided towards accounting for example. I also had a desire to … in my early adult life and further, a desire to make money on the side, like side-hustles and particularly making money easy and fast. I’ve always kind of looked into things like that. I tried eBay, tried a couple different YouTube channels, even resorted to gambling a little bit as sad as that sounds. I’ve always kind of had that in me.
Clay: So you tried a couple YouTube channels, is that what you said?
Matthew: Yeah, thought it would be easy-
Clay: And one of them was about gambling, or you just are a gambler in general?
Matthew: No, no, it wasn’t about gambling.
Clay: Oh, okay, okay. You just have that [crosstalk 00:07:15] mentality. You don’t mind a little risk in your life is what you’re saying?
Matthew: Right. Right.
Clay: Okay, gotcha.
Matthew: Then I ended up … I got a job at a bank, which I’m still at in the finance department. Part of my job is dealing with investments that the bank makes. Usually bonds and stuff, treasuries, but there’s also equities too. So I’m in charge of maintaining the portfolio. I don’t execute any trades, but I maintain the portfolio, making sure we have adequate record-keeping, and of course, entries to the general ledger on the accounting side of it. I had exposure to the market through that and I always knew in the background that the stock market was a great way to make money.
Matthew: I mean, as soon as I turned 21, I immediately opened a 401(k) because I knew the stock market was a way to make money. When you add in my desire to make money on the side and in a quick fashion, and my ability, well my knowledge with the stock market, or my early knowledge of the stock market, you kind of combine the two and day trading just kind of becomes the result of that. I didn’t know that right away, but eventually as I went on YouTube and started to look for ways to make money, it drove me down the road to the stock market, which drove me to the road of day trading. That’s where that … how that all started.
Clay: That makes sense. You had just a general knowledge of it and then, I mean, once your foot goes in the rabbit hole … I mean, I think anybody that’s ever … that’s in this world knows what I mean. I mean, if you’re maybe new and you’re not sure, “I don’t know, do I want to get into this whole stock market trading thing?” I’m telling you, if you put your foot in that rabbit hole … Would you agree Matt, it’s pretty slippery. It’s pretty addictive. It does a good job of pulling you in pretty quick, doesn’t it?
Matthew: Oh yeah, especially all those YouTube channels and YouTube thumbnail showing 500 a day, 500 in one minute, the cars, the houses, all that stuff.
Clay: Yeah, it can be … Plus, I mean, at the end of the day, it’s a pro, but it’s also a con, I mean, trading is fun, it is fun to … because it’s a big game, it’s a big challenge, but the problem is, it’s fun. When things are fun sometimes you don’t treat them with as much respect or as serious as it needs to be, and then that can create some headaches. Maybe we’re going to see some headaches [crosstalk 00:09:37] this is … I have talked with Matt in the chatroom before, but I don’t really know that much of his story. I’m going into this as blind as all of you are.
Clay: I mean, this is truly … To you as a listener, being a fly on the wall as we sit down in our little coffee shop or … We’ll do this. We’re in the lunchroom. I’m in the lunchroom with Matt right now at his place of employment. I mean, where did that go? You always knew you wanted to get … you make money, 401(k), you sign up, so that just pushes you into the rabbit hole, the stock market, you eventually stumble on. Was it always day trading, or did you go out on any other paths such as, where you’re like, “Oh, I want to do swing trader.” Was it pretty quick approach to the landing on the, “Yeah, I want to do this day trading stuff.”
Matthew: Well yeah, so day trading was like what really hooked me in in terms of being there right at the bell 9:30 Eastern time. But obviously, it’s a very big commitment to just jump to that, being able to be a full-time trader and having those hours. I had a full-time job, so I was like, “I want to do that, but I need to be realistic and work around my actual job,” whether that’s … I think it led me to swing trading, looking into swing trading, but everything that I was learning was about specifically day trading. I really wanted to try that as best as I could. I just wasn’t really sure how to go about it around my job that is.
Clay: Okay. Well I guess, so where did that go then? I mean, what were you …
Matthew: Well-
Clay: Yeah, I’ll let you-
Matthew: That eventually led to trading apps, so Robinhood specifically. I was like, “Oh, well I can go to work and be at my desk, even on my computer bring up even Yahoo Finance charts and have my phone with a broker that has an app, like Robinhood and be able to trade that way, as long as no one’s looking.”
Clay: Which is just so funny. I’m not here to badmouth Robinhood, I’m here to actually compliment their marketing department, but when I see the popup adds of Robinhood, that’s basically what they’re implying you can do is what you just describe, trade from anywhere.
Matthew: Yep.
Clay: Hint, hint, work with … all you need is your phone. Like I remember seeing one that was specifically … obviously they’re not saying, “Hey, sneak around at work and do it,” but the massive implication is, “Hey, with our app, you can make money in the stock market no matter what you’re doing, no matter where you are.” As far as I’m concerned, maybe that was you in their add, because that’s exactly what was going on. I mean, you told me earlier that you’ve listened to the show, so I know that you know you’re not alone in dipping your toe in the water in your first experience was with Robinhood, but again, I mean, nothing but respect for Robinhood and they’re marketing department. They do a good job of bringing people in.
Clay: I mean I guess, well you said you still have your job, so I’m assuming you never got caught at work, but yeah, walk us through your … I don’t … Was your plan to day trade with Robinhood?
Matthew: Yeah. I mean-
Clay: Oh man, all right, so this is train wreck written all over it already. Okay, get on with it.
Matthew: Oh man. Yes. The absolute train wreck is coming. But yeah, at the time, Robinhood was zero commission, well still is, but E-trade, TD Ameritrade wasn’t zero commission at the time, so it was even more appealing. Yeah, at Robinhood, looking to day trade and probably the worst thing that kind of could’ve happened to me with this mindset is that, I guess, let’s skip all the details, I ended up coming into some money. There was a death of a relative and I got some proceeds, life insurance proceeds. I did the smart thing, I paid off all my debts, all my college loans, my car payments, prepaid all my car insurance, all that stuff.
Clay: Nice. Nice.
Matthew: But I still has some good amount of money left over, enough to trade above the PDT level.
Clay: Which for listeners out there is, if you’re new, that’s $25,000, good old government regulations, says that if you want to trade stocks that is, if you want to day trade stocks as often as you want, then you need a margin account with more than $25,000 in it. That’s what number he’s referring to, but continue on sir.
Matthew: Yeah. I would say I started watching and studying like videos on YouTube at the end of 2018. Then 2019, January is when I was like, “Okay, let me fund a Robinhood account with $25,000, and let’s see if I can do this.” Then I was watching primarily videos on small cap trading, stocks that are gapping up 50, 100%, trying to get the gap and go and trade that momentum, which is very risky. That was the first thing I was watching.
Clay: You asked me beforehand if you should name names and I said, “Nah, let’s just avoid the drama,” but you had stumbled across a very popular channel out there and was kind of the whole thing is, “Hey, listen, find lower priced stocks that are gapping up and let’s just ride the momentum wave,” I mean so, like you said, a big a channel out there and I’m … some of you listeners, maybe you’ve already connected the dots, but like I said, we’re … the idea here is not to throw anybody under the bus, but just that the strategy that’s being portrayed isn’t necessarily as straight-forward as it’s being portrayed as, as sounds like we’re about to hear. But, let’s hear about this experience.
Matthew: Yeah, so I mean, with all do respect, I mean, they … small cap traders, they can do very well. It was obvious that it was possible. The potential was there. The concepts, at least the ones that you would see on YouTube, pretty straight-forward. Your classic three bar plays where you have a move higher, a little bit of a pullback, and then it breaks the high of the day and you get in for a pretty big move. I was like, “All right. I think I can to that.” Yeah, I started actually day trading with Robinhood at work in January. I found myself taking profits super early, like one cent, five cent profits per share. I would hold my losers pretty long, classic rookie mistake.
Matthew: I actually have my records, I kept a pretty detailed Excel file of all my trades. I’m looking at it right now, I mean, I’ve profits of $1, 85 cents, 11 bucks, $15. Then my losers are $30, $150, $70, so you can see the profit/loss ratio’s out of control. But-
Clay: I’ve seen better, yes. That’s …
Matthew: But it stayed somewhat steady for the first week. Then the ticker that stabbed me in the heart is MBOT, Microbot Medical, M-B-O-T-
Clay: Oh, I remember that one.
Matthew: I don’t know if you have charts in front of you, but if you do have charts in front of you, I would suggest that you look at January 14, 2019 and January 15. MBOT was a pretty big mover on the 14th and actually went from, I think, what is that? $4 to $10, and it stayed strong the whole day, the body of that candle is pretty big. I actually was scalping pretty much all day on that move, which I mean, a monkey could’ve made money on that stock, because it just continued to go higher. I made on the day, $600, just constantly typing and swiping with Robinhood.
Matthew: I was feeling really confident. Then the next day, there was continuation, it went from $9 to $20, which is absolutely insane. That whole move I was scalping. I was doing 100 shares, 200 shares, I even threw in a lot of 1000 shares, which is, looking at it now, is ridiculous, but that’s what I did, because I was that’s what small cap traders do, 1000 shares. I ended up getting up to $2000 on the day, just scalping in the move from $10 to $20.
Matthew: Then I bought in at 19 bucks and it came crashing down. It actually closed at a loss. It closed at $8. It went up as high as 20, finished at … I’m sorry $9. I was holding a position of over 1000 shares at an average about $19 and it went all the way down to 9 and I was holding the whole day. I even held to the next day. I was down like, I don’t even know, $9000, holding overnight, stressing out, pacing in my bedroom after work, saying, “What the heck am I doing?”
Clay: That had to have been the worst base … I mean, what is it about … Let’s see, if it opens up a 9 it closes at … Yeah, so I mean, you’re well over 12 hours of just … What about? About 15 hours we’ll call it give or take, of probably just mental anguish.
Matthew: Yeah. I was the classic holding and hoping. I was saying, “Maybe there will be continuation tomorrow like there was today. And maybe I’ll get another move to the highs of the day before and I’ll be able to bale out.” That was my strategy going to the next day. It did move up a little bit, like a couple dollars per share. I said, “You know what? I just got to bail out.” I think it was at like $10 or $11, I ended up bailing out for a total loss of almost $9000.
Clay: I’m assuming that’s put you down below the PDT rule then at that point.
Matthew: It did. I don’t remember funding it, but my records show that I continued to trade the next couple days. Ultimately, I took another three very big losses the following days. I finished losing $13,000. I essentially lost half my account, which I would consider blowing it up.
Clay: You said this was in … just a couple days later after having that first loss?
Matthew: Yeah, after having that huge loss, I continued to trade a couple days after that. I’m looking at it now. I took 1000, 2000 shares, 4000 shares-
Clay: In other words, you were revenge trading, there’s no doubt in my mind.
Matthew: Yeah.
Clay: If you all of a sudden went from nine, because everything was out the window at that point, other than … let’s just get these losses back as quick as possible.
Matthew: Mm-hmm (affirmative).
Clay: Now, as far as when it pulled it back, I mean, the strategy, or whatever you were following, I mean, was there a signal much higher that you should’ve gotten out from? Or, I mean, what exactly was going on? Because I get it, yeah, the three bar strategy, but where should you have gotten out? I mean, what was … There some sort of signal that you didn’t listen to? Or I mean-
Matthew: I shouldn’t have even gone in. I was chasing it. It was super extended, I was just chasing the whole way. Eventually it rolled over and I wasn’t very familiar, or experienced with the nature of these small stocks and how much they can sell off and never look back.
Clay: Right.
Matthew: I was just caught in the trap. I held and hoped.
Clay: Okay.
Matthew: It’s crazy.
Clay: It’s not like you’re anywhere close to the breakout point or anything like that, you were just-
Matthew: No, it was so early in my education that I … there was no way I would’ve known when to get out or to see if there was any … if there going to be another play to the upside. I was just chasing it.
Clay: Yeah, and that’s the whole … that’s why … I mean, trading doesn’t need to be rocket science, but when you’re like, “Oh, yes, well I was just doing the three bar play. It’s this, this, and then that’s it.” Well it’s like, “Well, yeah, that’s cool, that sounds good from my marketing sales tactic, that’s all it takes,” and this is what I teach, and this is how I’ve grown my account and made all this money, but there’s a bit more to it than that. Whereas, I mean, as you’re explaining here, yeah, there’s a lot of gray territory. But I mean, you also gave plenty of context, and you’re like, “Yeah, it was one of these stocks where even a monkey could be making money on it,” because it basically going straight up.
Matthew: Yeah.
Clay: In your defense, I’m sure there was plenty of other situations where you bought, it pulled back, and then it would eventually just go right back up since the whole day was basically an uptrend.
Matthew: Exactly, yeah.
Clay: In those situations, all it takes is one where it doesn’t pull back anymore, and, well, I mean, then you end up … Thank you for sharing all that. I mean, these are the horror stories that hopefully people listen to, because this is what happens is if you find yourself as a trader like, “Wow, I buy and then, yeah, I have to sit through some red, and then it goes green,” take in mind, when you’re sitting through some red, that could be a time where you should be getting out. But all the market is doing is helping reinforce a bad habit. Where in your mind you’re saying, “Yeah, so I bought and then I had to sit through some pain, or sit through some red,” and it’s like, “Okay.”
Matthew: Yeah.
Clay: But all it takes one where the pain never goes away. As you can confirm, the pain can get much worse.
Matthew: Oh yeah. I ended up losing another few thousand dollars after that day, like I said, for a total of 13. Then that’s when I called it quits. I removed all my funds and that’s when I moved to paper trading with another random app. I don’t even know what it was called, but I was able to paper trade with this app. I did that for the next few months, just trying to paper trade. But looking at … I kept records of that too, but I continued to just use bad habits. I was still trading with thousands of shares trying to scalp small stocks, small cap stocks.
Clay: Let me … clarification here, you say bad habits, but at the time, you didn’t know they were bad habits though, right?
Matthew: No. I was just doing my [crosstalk 00:23:41]
Clay: Which is a problem, because I mean, it sounds like you’re stupid. It’s like, and I’m trading with bad habits, well then why are you trading with bad habits if you know they’re bad habits?
Matthew: Yeah, in hindsight.
Clay: You are saying they’re bad habits, because you now actually are educated and have knowledge. But at the time, you had no idea they were bad habits, right? I just want to clarify that.
Matthew: Correct.
Clay: Okay, all right. Because I don’t people to be like, “How stupid is this guy? If you know they’re bad habits, why are you still doing it?” Well, remember, he’s giving his journey from a reference point of actually being knowledgeable right now. I mean, what were these bad habits that you were doing then?
Matthew: I mean, I don’t know specifically, because it was like a year ago. But just looking at my records, I was just trading with such large size, just unrealistic to be trading in the same exact way I was on Robinhood. Now, I’m just doing it with fake money. I mean, it’s still the same bad things. I still had small winners, small … bigger losers. I think, if I can remember correctly, I want to say that I had some trades that were egregiously large that I would just completely omit from my records. So like, “You know what? If this was real life, I wouldn’t have been in this situation. It wouldn’t have been a $5000 loss, so I’m not even going to count it.”
Clay: Thank you for sharing that, because it’s hard. I know you’ve been on Tuesday night webinars, when I say, “Please, you got to hold yourself accountable. Don’t let the voices … don’t let hindsight …” because your ego is going to try to make you feel as good as about yourself as possible. Which in the vast majority of life, that’s great. You need to feel good about yourself, but in trading, that’s a classic example for, “No, no if that was real money, I wouldn’t have done that, so delete from the records.”
Matthew: Yep.
Clay: Then all of a sudden, your records look much better, don’t they?
Matthew: Oh yeah. I traded [crosstalk 00:25:14]
Clay: Oh man, that’s a great example. Thank you for sharing that, because that is a prime example of how the human mind will somehow rationalize it and then make your paper trading seem so much better than what it actually is. That was good stuff man.
Matthew: Yeah, I paper traded from the end of January to April of 2019 using the same small cap methods, thousands of shares. I ended up having a net gain of … through the four months of $18,000. I’m sitting there saying, “This is awesome.” I’m trying to convince my girlfriend, like, “Look, trading’s a good idea. Look how well I’m doing.” But in hindsight, clearly it didn’t prove to be anything effective in terms of learning. It was just … I mean, if anything, it helped me understand charts a little bit, just getting experience watching charts on Yahoo Finance.
Matthew: But still, the fact that I was up $18,000 means nothing in hindsight. But at the time, it told me, I think I’m ready to give this another shot. I didn’t give it another shot with real money after that, but it gave me a lot of confidence that I was doing the right thing, but in hindsight, I didn’t have much of a strategy.
Clay: Well you would be an irrational person if at the time you were like, “Wow, I’m up $18,000, I’m terrible.” Like that just wouldn’t make any sense. I mean it makes perfect sense why you … But that leads me to the next question, but then you made the comment, but you actually never did anything. Why didn’t you though? What held you up?
Matthew: Now that I think about it, I must have … I did put money back into Robinhood. I didn’t put a full $25,000 or anything, but I put a little bit in. I don’t think I traded stocks, but like towards the summer of 2019, I got into bitcoin, both fundamentally in terms of owning it for the future. I knew Robinhood had a crypto side of it. It was actually very visually appealing, the crypto side of Robinhood. It was very flashy. It kind of attracted me to it.
Clay: Shout out marketing department, well done.
Matthew: Exactly. I was like, “I’m kind of liking the idea of bitcoin. I can buy in Robinhood, so let me do that.” I’d buy some in Robinhood and then I would end up watching the charts every day. I’d end up trying to trade it, not to make money, but to make more bitcoin. If I’d see that it’s starting to pull back, I’d sell it and try to get in lower to get more bitcoin, rather than making a profit. I did that for the summer of 2019. I would say that probably benefited me the most because every single day at work, I would have the bitcoin chart open. I would use Trading View, I think I might have saw one of your videos on Trading View and a couple others on YouTube. It’s a very nice website, free to sign up. It has nice charts.
Matthew: I had it opened every single day, hourly charts, daily charts on bitcoin. I was starting to see things come together in terms of trend lines, how it … just the self-fulfilling prophecy of technical analysis. Just seeing all that unfold was actually very beneficial. I made a little bit of money on the bitcoin, but that’s not really the important part, the important part was the fact that I was watching charts every single day and seeing how they unfolded. I thought that was very beneficial.
Matthew: Actually, forgot to mention, in February, after my MBOT debacle, I actually took a course on small cap trading. I actually invested in myself, I took a course, I learned about trading small caps. It was only a three month trial, so once that ended, I was on my own. I didn’t want to dump more, like, thousands of dollars more into it.
Clay: Is that the situation where you also lose access to the classes and all that stuff too?
Matthew: Everything, yeah.
Clay: Okay.
Matthew: But I did learn, I did dedicate to learn about day trading, probably more so than I did with my master’s degree, which I’m still in. But I was taking classes at the time, and I was dedicated more time and study to day trading than I was actual school. I knew I was taking it very seriously, investing in myself like I said. But yeah, after three months, it was gone. I think … that’s what led to the summer of 2019, where I was looking at charts with bitcoin and whatnot. I was paper trading and trading with you too, which is a cool feature.
Matthew: The same thing, I was getting positions that were building way too big realistically and I was omitting very large losers, but that’s kind of where that was going into the end of 2019, that was just paper trading with Trading View. It wasn’t until, I think February this year where I took your course. The lifetime membership is just probably the best thing about it. I mean, the course is great and I love the chatroom, but just knowing that I’ll have it for life, there’s like no risk, like you have nothing to lose. You’re going to have all these benefits for life including ongoing stuff. I was like, “I need to get this.”
Clay: It’s funny you say that, because everybody that’s gone through this other program, which you’re talking about where you got the three months or whatever, and then everything disappears, unless of course you pay more, they really do have … I mean, they sound just like you, and I’m not patting myself on the back, it makes sense. I mean, when your reference point is, “I have access to all this and then poof it’s all gone in three months,” the “Oh, well I have access to all this, but it’s mine for as long as I want it,” I mean, people like you seem to always be more appreciative, because you know that there’s other things out there, so you definitely don’t take for granted the fact that, “All right, I got all this stuff for life.”
Clay: Just for listeners out there, if you want to go to somebody else, that’s totally cool, I’m not saying you have to do my program or anything like that, but that is one of the questions that I would say you want to get figured out is, how does their access work? Is this one of this situations where you get the course, but then you lose access to it unless you just keep on paying? Make sure you figure out that structure because as much as common sense would say, “Well, no, it’s like Amazon. If I buy a book from Amazon, it’s not like all of a sudden after three months the book just poofs and disappears out of existence,” which is true. It’s in a mindset to think that you would have access to everything because you paid for, but in the world of trading, some educators, coaches, whatever you want to call them, they don’t do that.
Clay: That’s one thing you definitely want to keep in mind as you go through it, because in Matt’s case, like you said, it just changes the equation quite a bit when you can literally go as fast as, or as slow as you need to, through everything. But where did … you kind of just said, and then all of a sudden, I took your course, had you just stumbled across the YouTube channel, or where-
Matthew: Yeah.
Clay: Okay.
Matthew: I did, I skipped the part of the journey. But at first, the main videos I watched were small cap stuff, but I would always find your videos in the related section. I really took a liking to your videos, probably the best thing about it was that they were live. Seeing the live videos was very exciting. Seeing not just going over trades, like I would watch, but actually seeing it unfold and trying to gauge your mindset as to why you’re getting in and getting out where you are. I was attracted to those videos. I would watch the live ones here and there, but then eventually I started watching your stuff more religiously. Now the small cap stuff, that’s very … small cap trading, that’s very attractive, obviously, thousands of dollars per day potential.
Matthew: It has the glitz and glamor, but when I would watch your videos, I would say, “That’s more realistic. That’s something I can get behind, let the price come to me. It’s not as volatile. I don’t need to be in and out within a second.” I took a real liking to your videos and your style of trading. The only thing was the price was a little out of my range. I know there’s ways around that, but I didn’t really go down that road at the time. I did have the capital to invest. I just didn’t do that right away. I figure, “You know what? Let me just figure out exactly how he’s trading this stuff and I’ll invest in his course, it’s a lifetime membership, so what do I have to lose?”
Clay: Okay, well thank you for sharing that. It’s always an interesting data point from my point-of-view. But you’re in the course, like you said, you appreciated the fact, okay, it’s lifetime, so I guess, pick us up from your educational journey. Were you trading while you learned? Or did you totally hit the pause button on your trading even from a paper trading standpoint? How did you go about your educational process now that you had access to, again, another structured learning environment with the lifetime access where you could, like I said, go at your own pace? How did you approach all that?
Matthew: Yeah, so after I got into your course, I ended up in getting into Webull. Yeah, I know you have a video recommending them. They looked very … they’re much better than Robinhood. It’s just beyond belief.
Clay: Would you agree though that you’re … Are you … because I’m pretty sure, but are you pretty sure that they’re like, “Hey look, those trading view charts look pretty cool. You know what? Let’s just try and make ours look as similar as possible to those.” I mean, that’s my theory, do you have that sneaky suspicion at all? Because that is the primary reason why I do recommend them, is I think they have great charts.
Matthew: Yeah, they do.
Clay: And you factor in the fact that it’s free assuming you put in a 100 bucks or whatever it is, and that you’re basically having trading view charts, full access, but for free. If you are looking for a chart provider, whether or not you want to use them as to execute your trades, that’s up to you, but yes, as far chart provider, and a broker platform, if you’re looking for a very cost effective way to go, I think Webull is great charts for sure.
Matthew: Oh yeah. Even for the app purposes too, which I didn’t use that much, but, like you can bring up your phone and you can add like technical indicators on the charts, on the app. I don’t even think Robinhood will allow you to do that. They barely have effective candlestick charts on Robinhood.
Clay: I was going to say, do they have candlesticks though now at least? I feel like I’ve talked with somebody that were like, [crosstalk 00:35:15] they only had line charts or something.
Matthew: When I was using them last year they did have candlestick charts but they didn’t seem very reliable, not at all. But yeah, so, I think Webull gives you a couple free stocks too, a lot of cool promotional stuff from them. But, yeah, so I opened an account with them. I ended up funding it shortly after your course, so not even that long ago, like last month. I funded a little bit of money, like $1000, 500 I think at first, but I upped it a little bit. I started to trade small caps again with a better understanding of how they work and how I should get in, just basic stuff about trading. I was under the PDT rule, so I would only have three-day trades every five days.
Matthew: What I was doing was I was just taking one trade a day, just three trades a week. I was doing small cap stuff because it was what I could afford, a couple hundred shares here and there. I was somewhat … I was pretty successful actually, just getting like $25, $70, that’s all I was looking for. I was actually doing pretty well but just the one trade per day was really holding me back. I should say, I was able to do this because Webull allows you to trade through a web browser. I was at work using Google Chrome with full access to Webull, the desktop version. I was able to trade that way. That’s what I like about Webull a lot, is that I’m able to use it, the desktop version at work, because I can do it through the web browser-
Clay: Okay, so this was not … You didn’t download the platform to your work’s computer, that would have probably been-
Matthew: Yeah, I don’t think I would’ve got away with that.
Clay: Yeah, okay. You’re just using the web browser, but because … And that, again, that’s another reason why Webull over Robinhood, Matt’s describing it perfectly, not only do they have the web browser, but they also have a platform, you could download right to your computer if you wanted to-
Matthew: Yeah.
Clay: But yeah, there’s just a lot more … I would assume Robinhood’s going to be coming out with all that other stuff before they get left behind. I mean, so you were doing pretty well, but the whole Pattern Day Trading rule was holding you back you thought then?
Matthew: It was. I guess I’ll throw this in there, for full disclosure, during the market crash, ticker symbol T-V-I-X was skyrocketing.
Clay: That was a … What did that thing … In fact, yeah, I got to just even pull up a chart from it, but all right, yeah, go for it-
Matthew: The high was $1000. It went from like 33 bucks before the crash to 1000-
Clay: Yep, yep.
Matthew: … within a few days. It bounced right off of $1000 and pulled back. A pull back for something like that is like $100. I was like, “You know what? Let me swing trade TVIX.” That way I can kind of boost my profits by not using a day trade, but just swing trading it, because I’m sure this thing’s going to go right back up again. So I bought in at like 890 and then it pulled back, I bought more at like 400 and then it pulled back to 200 and I took a $700 loss on my small account. That just completely shot everything that I had worked up at that point on a stupid swing trade that I had no business trading. I didn’t even understand TVIX at the time.
Clay: I totally can relate to that, but isn’t that amazing, things are going fine, and then as soon as you did something that had nothing to do with what was actually working, like, there was day trading, but all of a sudden, you decided to take some sort of swing trade and then just like that, things fall off … I’ve been there many times before, it’s crazy how … and then you look back, “Wait, why did I do that?”
Matthew: Yeah.
Clay: I mean, I get it. I understood why, because you were … The whole pattern … Which again, government, if anybody in the government listens to this, hey, Matt, I mean, we’re all adults. It’s our money. We realize that none of this is FDIC insured, just can you just let people trade? I mean, just let people trade. It’s their money. We don’t need your handholding about … nevermind. But, this is a prime example of … I would … No, I won’t go as far as blaming the government for your loss, because they didn’t force you to take the swing trade, but I do understand how you could’ve been frustrated. But nonetheless, at the core, it’s crazy how something could be working and then you just decide to change it up a little bit and then you have a big loss on your hands.
Matthew: Yeah. You could even bring the fact of a bad habit being built with that, because prior to that, I swing traded Tesla when it was on its move to like 900-plus dollars and it worked. I made 60 bucks, which to me, my goal was like 25 a day with my small account. So making 60 bucks on a swing trade on Tesla was awesome. I was like, “I could do the same thing with TVIX.” That was a bad habit that benefited me with the first trade.
Clay: A little bit of fools’ gold was built right there then.
Matthew: Yeah, exactly. I was rewarded and then, I was punished much more severely
Clay: Severely, yeah.
Matthew: Yeah. Then the revenge trading got into me where I was like, “You know what? I’m going to fund my account by more than what I lost, by up to $2000, which is what you need in Webull in order to trade with leverage. They give you four times, I think at the most. It depends on what stock you trade though. I was like, “Let me fund it to 2000,” and then I traded a little bit. Then I said, “You know what? I have the money this PDT level, this small cap stuff I don’t want to keep trading like this, I want to trade like Clay, I want to trade the larger stuff that are a little more predictable, less volatile,” in terms of 50% drops and stuff like that. I funded my account above the PDT level, again, with Webull, and I started using your chatroom and now that I’m quarantined at home, it’s a lot easier to get away with trading during work. That’s what I’ve been doing in the last couple weeks. It’s been working amazing. I’m on a really hot streak. I’m afraid it’s too good to be true but-
Clay: Well let me ask you this, I can figure this thing out really quickly for and … whether it’s too good to be true, have you had any losses?
Matthew: A couple.
Clay: Okay. How do those losses look relative to your wins?
Matthew: They are … well kind of goes to-
Clay: Let me ask it this way, are you green since you made all these changes? Or are you overall red?
Matthew: I’m green. I’m up over … just over $1000 in a couple weeks.
Clay: Okay. To me, at the forefront, doesn’t sound like it’s too good to be true. Now, the first leading indicatory that it would be too good to be true is like, “No man, I’m … the past two weeks have been great. I’m green. I’ve had no losing trades,” because then you have the thing of, “Okay, well, are all these wins just being obtained because you have a bunch of bad habits and it’s still waiting to come up and bit you? Or what’s going on?”
Clay: But, knowing that you’ve had some losses, clearly you have taken some losses, meaning there must be something in your strategy, there must be some sort of rule or dynamic that’s going to cause you take the loss. I mean, so it sounds like so far so good. I mean, as long as those losses didn’t … well I mean, they didn’t, because if you’re still green, then that’s what you want. To me, I mean, what do you think you attribute this to? The fact that you can just trade more, or the fact that … I guess, I have a sneaky suspicion, but, what would you attribute all this success to so far?
Matthew: I would say it’s a little bit of both, being able to trade more initially but that allows me to trade your strategy, which I take a liking to more and I think that’s why I have so few losers, is I remember on one of your webinars, you’re saying, building a position well, that strategy isn’t going to be a high win rate, and when you lose it’ll be a pretty big loser, but it’s on the basis that the win-rate is such a high percentage, which is I think why this is happening. I have 61 winners and five losers in the past couple weeks.
Clay: The key dynamic though is those losses … I’m sure there have … I mean, my guess is they’ve been … they’ve wiped away several wins, right?
Matthew: Yeah, actually, it’s been manageable. One loser was like that. I have $20 loser 40, $30 loser and my average winners, actually no nevermind. My average winners, I’m looking for like 25, $50 per win.
Clay: Okay.
Matthew: Because I’m trading with 25 shares each lot is 25 shares, so I’m looking to gain maybe like 50 cents. So even as low as 12.50, or even $6, so like, my winners are pretty low, but there’s just so much more of them. I did have one loser on Roku the other day, which was like 180 bucks, which wipes away many winners, many of my small winners. But I just have so many more of those that I’ve been okay. I actually traded away that loss on Friday to where I was down 26 cents on the day. I was able to make that loss back along that $180 Roku loss.
Clay: Okay, and Roku was at … were there any rule breaks a part of that? Or is that just one of those where it just flat out didn’t work, and it’s just a casualty of the system itself? Or did you have a chance to maybe have gotten out a little sooner than what you probably did?
Matthew: No, I don’t think I would have been able to have a solid profit. I was just building my position as it went against me and eventually it just-
Clay: Okay, so that was just flat out a casualty of the system then?
Matthew: Yep.
Clay: Okay, which is fine. I’m just … because I want to add in some context, but the other bit of context is, as long as you’re not saying you’re taking those losses and saying, “Yeah and my win rates like 70% of the time.” There’s no way the strategy’s working out in that situation. But, I mean, to hear that you actually fought … did I understand that right? You fought back from that loss to just being six cents or something?
Matthew: Yeah. Yeah so I was up maybe like 80 bucks. I took $180 loss and I fought my way back through the day and essentially broke even with like a 26 cent loss on the day. That was good. I’m finding myself enjoying my losses almost, because I’m proud of myself when I’m getting out where I am, saying … just admitting defeat, saying that this thing is consolidating above my average and I need to get out, and that’s what I do.
Clay: That’s great. Yeah, and like I said, the whole reason why it’s like, “Okay, well let’s figure this out real quick, any losses,” and you’ve had not only have you had just one or but you’ve had, what did you say, five of them so far?
Matthew: Yeah, five, which I still think is a very small amount. I’m still a little nervous in the too good to be true sense, but I mean, it’s been working out for [crosstalk 00:46:05] this is week three right now.
Clay: Well the too good to be true is … because the high win rate, that’s important, but as I kind of started off this whole talking point was that can also be very deceiving, because you can generate a high win rate with a whole bunch of bad habits.
Matthew: Yeah.
Clay: And then, well like you and MBOT, right? You had a huge high win rate on that one, because the thing just kept going up and up and up, but you had all sort of bad habits along the way. Am I right? It was just that one loss that got you on a MBOT, right?
Matthew: Yeah. [crosstalk 00:46:37] a couple after that I had been trading.
Clay: You had a super high win rate, win, win, win, win, no losses, and then you just get one loss and it’s all gone?
Matthew: Yeah.
Clay: That’s much different than this situation where you’re winning, winning, winning, but you’ve had five losses scattered throughout there, but you’re still up $2000. I mean, do you see the difference between those two situations?
Matthew: Oh yeah.
Clay: Okay, because I’m trying to give you some confidence here to have faith, is don’t think that it’s too good to be true, because I get it, you can be wondering that after the whole MBOT thing, but the MBOT is much, much different. It’s just not the same thing. It was just one loss took everything else away. But, you’ve had five losses, yet you’re still up $2000, so that is a very good sign that you’re operating as you should.
Matthew: Yeah. Just my understanding, just the principles that I’ve adapted to over this last year-and-a-half and taking your course and stuff. It’s all gelled together. Finally, I feel like I’m able, it’s all clicking, especially the webinar that you had the other week where you explained where to get out and where to have a stop/loss on building a position.
Clay: Was that the one with Kai Noah?
Matthew: Yes.
Clay: Okay. Yep.
Matthew: Because at first, I was like, “This is working, but I just … I’m afraid it’s going to take one huge loss,” and then I saw that and it really solidified everything about the strategy that I was trading. Before that, I was … actually after that, I was saying when should I … or how much money am I willing to lose? I have to treat this like a business. I need to figure out how much am I willing to lose on a given day or on a given trade. I figured about $500 is like my max loss. I was actually did some math and figured out if I was taking 25 shares per lot, how much should I be able to build up to before I should call it quits? I ran some numbers, just basic psychological entry points with prices and I figured I should stop at 200 shares, because if I’m to 200 and it’s still against me, I’m probably going to take a 5, $600 loss. I kind of figured that out, now I just, I feel like I’m in the driver’s seat now in terms of trading.
Clay: Matt, just revealed a critical, I think my voice cracked so much it was … it’s so critical. Hey Matt, why am I getting hair under my armpits? I don’t know what’s going on, can you explain this part of life to me? Anyways, all right, he revealed a critical spot of trading, how did all of those calculations start? Where did it all start with? He asked himself the question, “What am I willing to risk?” His attention was not on, “How much money am I … I want to … How much money do I want to make? How much money do I need to make?” No, how much is he willing to risk? That’s where all of this needs to start with as a trader. I get it, the glitz and glamor, talking about wins and making money, that’s the fun stuff, I have … you’re not going to get in an argument against me there, that is the fun stuff, but the important stuff, the stuff that matters, is the risk.
Clay: Matt was able to do all these critical calculations, figure out position size, and all this, because he started that first question, “What am I willing to risk? How much would I feel okay with losing?” That’s where you need to start as a trader too. That’s where it all starts is figuring that out because from there, you can start to reverse engineer and figure out … Now is going to be perfect the very first time? No, I’m not saying that, Matt’s not saying that. But it’s going to at least get you on the pathway, put you down the rabbit hole that actually matters. I mean, so that’s good stuff that you started there, a great example again. Before I forget, have you run a search for when I’ve done the podcast, or not the podcast, the webinar interviews with Nate Wilson?
Matthew: I don’t believe so, no.
Clay: Okay, well if you want some more like, what … for this strategy, I would, on the member portal in that search box, just run a search for Nate Wilson.
Matthew: Okay.
Clay: Yeah, that’ll give you some more, just some more insight, because I’ve mapped out stop/loss and stuff like that within those ones too. Nothing overly complicated, but if you are looking just for some more examples and all that, I think he’s been on two or three times. But so that should really help you out. I guess, what are you … where we are time … all right, we got about 13 minutes left, perfect. What are you using … If I’m sitting next to you on your chart, what would I see? I mean, do you got the thing loaded up in indicators, what are kind of your primary driving forces that you are using to, like you said, do very, very well over the past the couple of weeks?
Matthew: I have three charts open. I have my one minute, five minute, and daily. To be honest, I really don’t look at the daily too much. But my one minute chart is what I primarily look at and I just have the view app on that. The five-minute, I should say I look at the five-minute a lot too. I have my three moving averages, the 10 simple moving average, the 50 and the 200. I also have Bollinger Bands. I usually use the Bollinger Bands a lot if I see a stock chart trying to go above or below the Bollinger Band. That’s what tells me something’s beginning to become overextended and that’s when I’ll look to build into a position whether it’s short or long.
Clay: That’s everything then?
Matthew: Yeah. I mean, of course I have the typical level too and stuff. I have all the charts-
Clay: Well, of course, you have candlesticks, right?
Matthew: Yeah, yeah.
Clay: You have volume?
Matthew: Yep, I have a news section on the bottom left that gives me any headlines that might give reason as to why something’s moving. I have in Webull, as in your video you show, we can detach the screen. You bring up like up to nine charts on one screen and then detach that. I happen to have two monitors that my work was able to set me up with.
Clay: Nice.
Matthew: I have nine charts on my second monitor that I … all the stocks that you shout out in the beginning of the day, I just fill up my charts with all those stocks and let them sit on the five minute chart, and I glance at them, see if anything’s popping up or crashing down. I just have that off to the side [crosstalk 00:52:56]
Clay: You’ve been watching Boeing quite a bit over the past couple weeks then, huh?
Matthew: Yes. That’s been my biggest winner, I think above [crosstalk 00:53:03]
Clay: Oh, you’ve been trading Boeing?
Matthew: Yeah. Absolutely.
Clay: Talk about a love/hate relationship. I mean the things act like it should act as far as patterns and stuff like that, but man, some … Would you agree that sometimes those fricken support levels take forever to break and it just like toys with you?
Matthew: Yes.
Clay: I’m like, it still follows through with the pattern, but it’s like, “Will you just fail already? This is ridiculous.”
Matthew: Yeah, it’s a great way of putting it. That’s absolutely true. It happened today too.
Clay: Yeah, it did. What was it? 148.50 I think was just like, just fail. I know you want to. The pattern suggests you want to fail, and it did ultimately fail. I mean it worked out fine, but, sometimes I wish Boeing would act a little bit quicker.
Matthew: Exactly. I ended up getting out too soon, because I’m like, “This is taking too long. I’m afraid it’s not going to do what I want it to do. I’m just going get out with a smaller profit.” Then all of a sudden, a minute later, it’s beyond the level that you called out. I’m like, “Come on.”
Clay: Yeah, it definitely will … I mean, I’m watching it right now, and it just … It’s saying, “Clay, hit the bid right now. Hit the bid while you’re on this webinar.” I’m fighting back, “No. I’m not going to do that, because you’re just going to toy around with me.” Yeah, it’s … What’s that, you’ve probably been watching … I mean, have you been trading Roku?
Matthew: Um, I thought I would more, but I actually haven’t been trading it much. It just Boeing, Zoom, and a little bit of Tesla.
Clay: Okay. Now, are you worried at all about something … I’m not saying you should be, just so let’s just … this is one trader talking to another, are you worried at all about Tesla just totally hammering you in the face? Because that’s such a big spread, such a big stock, or I mean-
Matthew: Yes.
Clay: Well let me ask this, what have your losses been and what ticker symbol so far?
Matthew: Roku was actually the biggest one, [crosstalk 00:54:39] the one that I had barely traded, is the one that I lost like 180 bucks. I’ve taken some losses on, some smart losses on Boeing and Zoom. I don’t think I’ve lost on Tesla. I take even smaller size with Tesla, like 10 shares.
Clay: Okay, all right, all right. I was trying to set up a little trap for you if could reveal it, like, “Yeah, so I’m still doing my 25 shares on Tesla.”
Matthew: No.
Clay: I was just getting ready to bring the sledgehammer. But all right, good job. You caught yourself. You’re still understanding the risk. If you’re brand new and listening, notice what he did, he’s trading something that he realizes is more risky for various reasons, so how is he counter-balancing that risk? He is lowering position size. This is why, and again, I’m not bad-mouthing anybody, but the whole, “Oh, if you’re doing some sort of stock, 1000 share position,” no, no, no, no. You can’t just make it that straight forward. I get it, 1000 shares the math so beautiful. It makes it easy, but you can’t just always just flat out do 1000 shares no matter really what’s going on. Good. See, you … I’m getting more and more confidence that this is by no means any sort of fools’ gold or anything like that.
Matthew: I appreciate it.
Clay: What was that? I was going to ask you something … Did you have something to say while I try to …
Matthew: Yes. I guess more on Tesla, was just not only do I take smaller size, but I look for much better setups. Like Boeing, Zoom, I might jump in a little prematurely, wanting to get in for potential break and stuff like that, or calling an overextension a little sooner, but for Tesla, I do not want to play with that. It’s such a big mover. It’s such a high price stock. I look for an absolute, like no [inaudible 00:56:21] setup that this is overextended or something like that, or it’s going to break high of day or something similar to those lines, which is probably why I haven’t taken a loss on it, because I don’t trade it very much and if I do, I take small sized.
Clay: Okay, so that is a wise move on your part. Like I said, you want to … you need to be aware of risk, you need to be … I mean, you definitely need to factor it in, and that’s exactly what you’re doing. I mean, that’s a step in the right direction. Now earlier you mentioned you something about your losses and I can’t remember the exact quote, but it was something about, “Wow, that loss almost felt good.”
Matthew: Yeah.
Clay: I mean, because this is a big talking point, I like to … I should probably talk about more, but just this like psychology of losses and how some people it just ruins their day, other people seem to be able to shrug it off, and other people are kind of in between, and then here you are saying, “Hey, you know what? It actually … that felt good.” I mean, walk us through a little bit about … from a psychological standpoint, how you’re dealing with these losses and how you seem to be doing a good job of just kind of moving on from it.
Matthew: I don’t think I’ve been 100% tested with my emotions regarding losses yet. The one day that I took a massive loss that set me back, wiping out all my profits, was with that Roku trade. I ended up over trading to make it back. I’m afraid that I still need to get a grasp on emotions like that. That was the day I took the most trades was that day, because I was fighting to make up the losses. But, in terms of-
Clay: But did you have all wins that whole time as you fought back?
Matthew: Yeah, it’s a funny thing I took another loss, which was maybe like 10 or 20 bucks.
Clay: Okay, well so that’s … I guess what I was trying to get at is I can see that, which is a very, very gray area, I wish I had the perfect answer there, but there’s always that question, “Am I revenge trading right now? Or is this actually a good set up?”
Matthew: Yeah.
Clay: But it sounds like everything was kind of on cue. I mean, you took a loss, so it’s not like you were … those wins weren’t coming at the expense of bad habits, but you were still having a high win rate, so I mean-
Matthew: Exactly, yeah.
Clay: Doesn’t sound like it was just massive revenge trading, but again, it could have been, but I do also understand how you would feel that way, because I mean, it’s one of those things where I know it’s like, “Okay, I’m in the hole right now, I’d like to get out of the hole, so am I being wise right now? Or is this is just total bone-headedness?” But, knowing that you did take a loss along the way, yet still had a good high winning percentage, I don’t know, it sounds like it was a situation where you weren’t just straight up, you know, “Well, yeah, I had four wins and three losses, but my four wins were massive and my …” it’s like, “Okay, well that sounds like you departed from the norm,” but from my understanding, you are pretty much doing the norm [crosstalk 00:59:07]
Matthew: Yeah, well isn’t revenge trading in a sense that I was jumping in at any chance I could, it was just the fact that I traded more than I usually would.
Clay: Right.
Matthew: But that’s the beauty of these larger-cap stocks, is you can trade setups all through the day while the small caps stuff is usually within the first half-hour and then after that it’s just dead.
Clay: Yep.
Matthew: But that’s I do like that about these large cap stocks in this way of trading as well.
Clay: But there’s also one of, I mean, kind of … it’s a little apple and an oranges here, once a market gets back to normal for listeners’ sake is by the time this goes live it’ll be about a month later. I mean, I’m sure coronavirus will still be plenty in the news at that point, but as of right now, we’re still in quarantine mode and the markets are still pretty crazy, but that’s something you will want to be aware of once the market gets back to “normal” whenever that is, is afternoon trading can really slow down, because I fully agree right now. I mean, I’m watching Boeing right now, this is fantastic, this is beautiful right now, it’s great stuff, but once the market goes back to how it normally is, I mean, you can really get chopped to pieces. Unfortunately Matt, I’d say don’t get used to being able to trade these stocks almost the entire day long, because normally the market’s not as crazy it is right now. But, so not to-
Matthew: Okay, no, that’s fair.
Clay: Not to rain your parade, but I definitely want to plan on being able to do this for the foreseeable future.
Matthew: Yeah, and as for my other losses, I mean, I feel good being able to market out when I say that this thing’s about to … If I’m shorting, and I see that it’s consolidating and about to make another move higher, I would say, “You know what? I got to get out.” Or I’ll even put a limit to cover above my average, knowing that I’m going to take a loss just so I know I can get out at a better spot, but a loss nonetheless, because I don’t feel like it’s going to go down as much to fill me with a profit. I’ve been kind of thinking like that with my losses. I got to say, it’s nice being able to know that my emotions are somewhat in check to where I’m taking these realistic losses and not just holding and hoping like I was last year.
Clay: Yeah, and that’s the big thing is … and you’re smart to just wonder, I don’t know, is this all luck? This is skill, but that’s why … but you have losses. You have five data points now of losses and like you said, your accounts still up. I know you mean it, it does feel good to be like, “Okay,” I mean, I’m trying to think of an analogy, it’s kind of like the first … I don’t know. Did you play sports or anything growing up or …?
Matthew: Yeah, baseball.
Clay: Okay, so it’s baseball, so you’re a sports guy. I almost see like it’s almost football, it’s like, “Okay, how is this going to feel when somebody tackles me?” Now I’ve never boxed, but I can see it being like, “Okay, how is it going to feel if I get punched in the face?” It’s like, but after you get punched in the face, you’re like, “Okay, hey look, I’m still here, everything’s okay.” In trading it’s kind of like you almost need to get punched in the face a few times to figure out whether or not your strategy is actually viable and you’ve been punched five times now and you’re still … not only are you still standing, but your account is still up, what’d you say, $2000?
Matthew: About 1000 today.
Clay: 1000, okay.
Matthew: Yeah.
Clay: There you go. That’s why to always be a little hesitant, so … Oh crap, looking at … Do you got a few more minutes?
Matthew: Yeah, yeah. I can go over a little bit, let’s cook it.
Clay: Okay, all right. Well, I think that’s a great spot to end it anyways. We’ve ended right on the losing talk but, if you had a time machine Matt, 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?
Matthew: That’s a tough one. Is this advice that I don’t … you’ve given and that’s a concept of you don’t know what you don’t know. That’s just to say there’s so much more that you don’t even realize you haven’t learned yet, that don’t jump in to fast like I did with real money. Even if you’re paper trading successfully, know that there’s a caveat that it could be luck, it could be bad habits benefiting you, and just know that there’s still a lot to be learned. I think you’ll know for a fact when you are ready to start trading with real money, and if you do trade with real money, just start small and build real habits that way.
Clay: Yeah, you’re absolutely right. I mean, I really have nothing to add to that. When you’re new, when you don’t know you don’t know, that’s not just like a cliché saying, there’s literally a lot more to it then what seems to be let on. Unfortunately there’s a lot more to this than some sort of three bar play. There’s just more to it than that. I mean, Matt I think did a good job of describing how … yeah, you don’t want to get too complicated, but at the same time, you got to be able to take a punch, I guess that’s kind of probably the best way to stick with that analogy for now. All right, Matt, well before we let you go, what … we’ll do some fun questions-
Matthew: Sure.
Clay: What is your favorite movie?
Matthew: Oh boy, my favorite movie? It would have to be Avengers Infinity War, big superhero movie guy.
Clay: I like you even more now. Yeah, that was … what’d you think of Endgame?
Matthew: I liked it, but I liked Infinity War better. It was just a different style of movie, the villain wins.
Clay: Because Thanos is just … he’s just a beast-mode in that one. Like you can’t-
Matthew: He is. And it’s action-packed the whole way through.
Clay: Oh yeah.
Matthew: It’s amazing.
Clay: Exactly. But, Endgame, with the final … the battle scene there, when they do that wide angle shot, I mean that’s like … If I was 12-years-old, that would be a poster in my room right now. But no offense though to any 30-year-olds or 40-year-olds that maybe have a poster of that in your room, because I would still understand. Well would you agree that was probably like the most epic shot they could’ve done?
Matthew: Yeah, that was an epic to end the series. They did such a good job with that over the 10 years.
Clay: Yeah, they really did. Yeah. All right. We got to move on or else I’m going to get you fired.
Matthew: Okay.
Clay: Because, “This guy, he kept talking wanting to comic book movies with me. I told him I had a job.” All right, what about … are you in Boston?
Matthew: No. I’m south of Boston by about an hour-and-a-half, it’s southeast Massachusetts, right on the border of Rhode Island.
Clay: I thought I heard a little bit of Boston-
Matthew: Did you?
Clay: I can’t even do a Boston … but that’s fantastic. I feel like, I don’t know, I feel we should go get into a bar fight. Was that racist? Right now, I think that all Boston people want to get in bar fights. I’m pretty sure that was a racist comment on my …
Matthew: Yeah, if they hear that, they might want to fight you in a bar.
Clay: Well, good thing I have you with me, because you’ve got the Boston accent, so you can talk trash right back to them. But to all … don’t … yeah … We just lost some probably Irish people or Boston people or whatever, what do you even call … Massachusians, or [crosstalk 01:05:52] What are Massachusetts people called?
Matthew: I have no idea. You think I’d know, but I don’t.
Clay: Yeah. I mean, FYI, we’re Michiganders. I don’t know if anybody would ever-
Matthew: Really?
Clay: Yeah. I would never guess that, but anyways, we are going way off. It’s fine. At this point, the people that just wanted the trading stuff, they’ve already bailed. Finally question, three words, and these three words would be what you would describe with what it takes to be a successful trader or maybe what a successful trader already does, what would those three words be?
Matthew: These are tough questions, I was not ready for this.
Clay: You said you’ve listened to it. Oh, you’re one of those guys that turns it off at the very … you don’t listen to the fun questions, do you?
Matthew: I haven’t listened to one in a little while I got to admit. One would be persistence, that jumps right off the page, humble, be humble with yourself, and invest in yourself I guess, that’s not one word, but it’s definitely important to invest in education instead of just relying on YouTube, that’s for sure.
Clay: Well I would be a little bit more of a stickler, but I know you got to … you told me an hour and I’ve technically violated it by four minutes now. We’ll let it slide. Well Matt, thank you for hanging out man. Thank you for volunteering to do this and hopefully you’ll come back at some point so you can just continue to update us on the journey. But, it’s been nice having you part of the room. Just keep it up, that’s really all I can say is, you got it going on. You’ve taken some punches. You’re still standing and that’s the name of the game. Will you come back at some point though?
Matthew: Sure, I’d love to. I mean, it was a dream come true just coming on right now. It’s an honor to be on.
Clay: Awesome. Well good. I’m glad … A lot of good talking points here. I think the best thing to walk away from … well I guess second best, the first best was again, what he said, where did he start all his calculations from, asking himself about risk. But the second part was I love how somehow in your mind, your voice is justified the fact of throwing out the big losses while you were practice paper trading, that’s good stuff. I mean, for your mindset to be able to convince you to manipulate the data, as a data-man yourself, I mean, that’s what you do it sounds like for a job-
Matthew: Yeah.
Clay: … and yet, somehow the voice has still tricked you to be like, “Yeah, let’s just get rid of those data points there. Oh, look at that.” That’s good stuff, because it’s … That’s the problem with paper trading and how some people can be really unrealistic with it. Well Matt, thank you again for hanging out.
Matthew: Of course, thank you. I really appreciate it.
Clay: Now, for you listeners out there, a final few things before we go, first off, if you’re listening on iTunes or any of the other podcast players, then please subscribe, that way you know when new stuff is released. Especially on iTunes, if you could leave us a rating, that would be very much appreciated, or better yet, a written review, helps us out quite a bit. I really would appreciate, and I do thank you to those of you that have done that.
Clay: If you’re listening at claytrader.com on the show notes page, in the bottom right-hand corner there’s a little chat box, so if you go there, that’ll be directed … Well you have to tell it to direct you to a human, because at first it’ll start out as a bot, but yeah, questions, comments, suggestions, would love to hear from you. Always enjoyable to hear from somebody where they start off the conversation with, “Hey I listen to the podcast,” so like I said, love to hear from people, those of you out there that listen to this. Thank you again Matt. Thank you as listeners. We will see you back next week.

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