Transcript

Clay: This is The Stock Trading Reality Podcast episode 274.
Announcer: This is The Stock Trading Reality Podcast, where you get to see the realistic side of a trader’s journey. Get inspired and stay motivated by everyday normal people who are currently on their journey to trading success, and this is your host. If you need a way to get even healthier when hiking he recommends this, Clay Trader.
Clay: First off, just get out there and hike. That’s a good first step, but after a while, and if you want to up the game a little bit and get even healthier. In other words translation just put yourself through some misery. I just got some weights that are designed to fit into… A rucksack is the right term, but I just have a backpack that I’ve been experimenting with. And it is amazing how much more challenging hiking becomes just because I’m an idiot and I always am like, “Nope. If I’m going to do it, I’m going to do it right.” I got 60 pounds at once and my wife’s like, “Clay, what are you doing?” But 60 pounds on your back, that is no joke just walking around level. But you start to add in some inclines, and some declines, you’re working all kinds of muscles I didn’t even know I had.
Clay: But like I said, if you’re looking to up the hiking game, up the health game, I would get a backpack whether that’s a rucksack or whatever. And then I got mine right off Amazon. Just get some plates and they’re… Like said they’re not… I suppose you could just go straight up caveman style. You would probably have a winning argument against me if you’re like, “You’re high maintenance, what are you doing? Just go grab a rock.” And you’re probably right, but in this situation, I was like, “You know what, I’m going to get some nicely designed weights that slide perfectly in the backpack, and I’m going to go with those.”
Clay: But really, you don’t even have to go and buy anything off Amazon. Go dig up a rock, or find a rock somewhere, some sand, I don’t know, just make your backpack heavy. And I don’t know why this was shocking to me. But yeah, it really does take the whole hiking experience to an entirely new level. So, if you’re somebody that enjoys that sort of stuff I’ve just recently discovered it. And yeah, in a sick and twisted painful type of way it’s definitely pretty enjoyable.
Clay: For our guest today, we are talking with member Kenneth, and he is relatively new to the group. But as I talked about at the beginning, I really don’t know that much about him. So it’s definitely just if you want to be a fly on the wall and just listen to a couple “strangers” meet up, talk about trading, talk about their journey. That’s what you’re going to get here, and Kenneth, he’s very well spoken. He’s doing things in a very systematic way, a very wise way. It hasn’t been perfect, but nobody’s perfect anyways. But there haven’t been any total catastrophes, but he’s definitely [inaudible 00:03:00] in a way where I really do think he’s setting himself up to put himself in a place where he wants to be. And he’s keeping himself grounded in reality, which is always a good thing. I don’t want to offer up any more spoilers. All I’ll say is, I’m very confident there’s going to be something for everybody. So let’s just get to it and hear about Kenneth and his journey. Kenneth, welcome to the show.
Kenneth: Thank you for having me. It’s nice to meet you finally, and I’ve been a fan of your work for a little while now. I’ve been training for about six months [crosstalk 00:03:34]-
Clay: Awesome. Well-
Kenneth: … three months but trying to learn on trading for about six months.
Clay: Okay, cool. Cool. Well, I appreciate that, and I want to thank you because you volunteered to be here. You responded to the email, which I really appreciate. Makes my life much more efficient. So I thank you for having the… I don’t know if courage is the right word. I don’t know if it takes courage. It probably takes a little courage, especially at this… Not to put any pressure on you, Kenneth, but we have a good sized crowd that listens to these. So, I don’t know if that was a good or bad thing to tell you that there will probably be several, lots of people, more than one person that listens to this, but nothing to be nervous about as we talked about before we got started.
Clay: Well, for listeners’ sake, I don’t know much about Kenneth. As is the policy, I always keep it brief. Once we get on I just ask… I kind of give them my little opening spiel, ask if he has any questions, he didn’t, and then we hop right to it because I want this to be like we’re literally just sitting at a coffee shop, almost first time meeting, and just seeing where things play out from that. So we’re trying to keep this as realistic as possible. So I don’t know much about Ken… At least I don’t think I know that much about you unless we’ve had a bunch of emails back and forth. But even from that angle, I don’t think we have, have we?
Kenneth: I don’t believe so. No. I watched mostly your YouTube videos and other traders that also have different YouTube channels and media outlets. But when I really started… It was one of the videos and you had your free online-
Clay: Well, let me ask, let me cut you off. Let’s just start right at the beginning from all this. That way we can get all the nuts and bolts from point A to Z. Where did this all actually start for you though? Meaning, where did you hear about the markets? Was it when you were a wee little lad? Or where did you hear about the markets, and then what sort of things played out that brought you to the point where you made the decision, you know what, I want to get a little bit more hands on with it.
Kenneth: The markets themselves always just has an imprint on society in general. You could see them in a movie or hear them just passer by on the news. But what really, really got me into it was I think my dad wanted to get into trading some, I think, last year. But I think the main difference between me and him is I’m actually trying to learn how to trade where he has a few trades in some lower end stocks, and hopefully they’ll turn around and make big money in the future. I think he’s weighing in a lot on CBD right now. Nothing against him. I just think he could be a little more efficient if he went and learned more. Granted I know he has a full time job and how his schedule goes but I think he was mainly my inspiration to since I have more time in my life than he does to do this right and effectively grow myself.
Clay: That’s, I mean, I’ve been doing this now for years. I don’t know if we’ve ever had… Maybe we have but I find that interesting. So your dad just… Do know where your dad got the idea to get into the markets from?
Kenneth: For as long as I remember… Easily 10 years ago, I think the first niche that I remember him having was when there was a big bunch of talk about the Dinar currency, so forex or… Yeah, that’s right, forex?
Clay: Yeah, yeah. Yep. And I vaguely remember what you’re talking about. Yep.
Kenneth: Yeah. So, he did some in that, and this is when I think I was like 11, and I just vaguely remember because he was talking about it with my uncle. But that was I think my first initial my dad talking about it, but me not understanding what it was.
Clay: Okay.
Kenneth: Like you see commercials all the time buy gold, silver is going down, this or that, and then that’s been going on for decades, but the true first thing I think was the Dinar currency.
Clay: Okay. And then since then has he just kind of been in and out of the markets, just [crosstalk 00:07:43]?
Kenneth: Mostly out. It wasn’t till the last year when CBD has really erupted, I think more socially with the populace that people are trying to get ahead of it.
Clay: Maybe I’m just… What is CBD? Is that like the oil type?
Kenneth: Yeah. [crosstalk 00:08:03]-
Clay: Just tell me what CBD is just because I think I know, but I’m not going to sit here and try to act like I know for sure. So, enlighten me [crosstalk 00:08:09].
Kenneth: I’m not too keen on it either, but basically there’s a few different parts of the marijuana plant. One is… It acts towards your… What is it? Pretty much it’s the calming side of it, and the other part is the psychedelic side. The CBD is more, it’s not the psychedelic part. It fights pain. It helps relaxes you, anxiety, pretty much brings you down, which the psychedelic side I believe is THC, which is what all the kids are doing.
Clay: Gotcha, gotcha. Okay, so this is supposed to just mellow you out-
Kenneth: It actually has… Yeah, it’s medical purposes.
Clay: Okay. All right. So this is why marijuana always started as… I don’t know about how it started, but that’s why it’s known in the medical field, and has been legal there a lot longer than in other… Okay, so that… Well, good, now I know something about… A little bit more about the cannabis plant or is it the hemp [crosstalk 00:09:19]?
Kenneth: I think so, yeah.
Clay: I’m not a very big pothead so I have no idea what I’m saying.
Kenneth: Me neither, I smoke cigars. I’m a traditionalist.
Clay: There we go, there we go. Okay, so your dad is just, he believes that these are the types of stocks that are going to be going up, but let me put it this way, if I asked your dad “Hey, what are you doing the market?” Would he say that he’s investing in the market or would he still call himself a trader? Because from what you’re describing-
Kenneth: He’d be investing. Yeah, he’s more of an investor.
Clay: Okay. But is he aware of that does or would he call himself a trader?
Kenneth: No. I think he thinks of himself as an investor.
Clay: Okay. Because I see it quite a bit where people are like, “Well, you know, I had a trade but it didn’t quite go my way. And then instead of just cutting my loss and just taking a good well defined risk managed trade, I’m not an investor.” But it sounds like your dad went in thinking, wanting to invest, and he’s just investing. So, he’s not one of these guys that was supposed to be some sort of day trader, but now all of a sudden he’s turned into an investor because he doesn’t want to take a loss. He’s investing and he’s just waiting for things to turn around in whatever stocks he’s in.
Kenneth: Yeah, so it’s pretty much all or nothing goes in. If the money that he’s put into the investment, if it does go up, he makes his money, it’s a good return for him. If it doesn’t, he just loses whatever sum of money that he invested in or if he pulls out whatever it may be. But I’ve been trying to get him to read a little bit more into technical analysis. Understand that you can do this not just with Hail Mary passes.
Clay: Right. I guess, and I’m not trying to get you to pry into your father’s personal finances, but I would also assume that your dad’s not taking his mortgage money, and putting into this-
Kenneth: No, no. He actually bought a house again recently because growing up we mostly lived in apartments between my dad and my mom. And then recently… Well, they separated, and then he got a house. And then that didn’t really go through well, and then back to the apartments. And then, finally I think he’s 47 going to be this year. He’s finally getting another house to call his own again. So, he’s very much… I think he’s good financially. He’s disciplined financially. He doesn’t just [crosstalk 00:11:47]-
Clay: In other words, he’s not risking money that he can’t afford to lose.
Kenneth: Correct.
Clay: Okay. All right. Well, that’s good. So, I guess if he wants to throw Hail Marys, so be it. But I do also appreciate you saying, “Hey, it doesn’t have to be Hail Marys. There is another way to go about all this than just chucking the pass as far as you can go.” But all right, well, that’s super interesting that you got into it because of him. And then you’re sitting here… I mean, it’s not like you’re throwing him under the bus, but you’re just saying, “Yeah, I think he can maybe reduce the randomness a little bit if he just put a little bit more effort into studying.” So, all right. Well, that’s what got you involved. That’s what got you interested. So your dad, or you learned about your dad getting in the market, and you’re like, “Okay, dad,” and then what was your next step? What did you do from that point?
Kenneth: YouTube University.
Clay: Nice.
Kenneth: Just going and looking and seeing then there’s a whole bunch of different people out there who talk.
Clay: Do you ever… Sorry to cut you off. Do you remember those first searches that you ever ran? I always love to ask people [inaudible 00:12:48].
Kenneth: Just how to trade.
Clay: Okay. You just started with literally how to trade. Gotcha. Cool.
Kenneth: Yeah.
Clay: That opened up the rabbit hole. So I’ll let you pick it up from that point.
Kenneth: Yeah. I didn’t spend too long. I picked here and there how to trade. Okay. So, this is, the goal roughly is buy here sell high. Eventually you learn about shorting if the stock goes down, you can make money that way. But roughly what I ended up learning was all successful traders really use the same thing in technical analysis. Now, there’s really different ways of going about doing it as far as your trade plan is concerned. But technical analysis is technical analysis just like anything else is. If I were to say chemistry versus biology, that’s two different subjects, but technical analysis to traders is a subject, and for which most of them, and for which are successful use it.
Clay: Okay. Well, that’s… I mean, you were drawing some good broad conclusions, and that was your what you… Did you say, “Okay, successful traders use technical analysis. Let me study some more YouTube videos on technical analysis. Okay, let me find an account.” Did you start trading with real money during all this or where did you… Because like I said that’s actually a valid conclusion. That’s a rational conclusion. Yeah, you got to use technical analysis, but just because you know people are using it doesn’t really mean that you know how to use it.
Kenneth: Exactly. That’s, the going back to my father, but he had me get into Stash. Stash is pretty useless as far as that’s concerned. It doesn’t really have any charts on it. It has a bunch of different, I guess, buy options that you can go with. Not options, options, just like a list of things to invest into. I didn’t really do much of it. He wanted me to do like a Ruth and then do their retirement plans stuff, and then investing in this, and it didn’t seem right. It was too vague.
Clay: And you are right, it’s not right, but also in Stash’s defense, Stash is by no means… If you’re saying, “Listen, I want to trade the markets.”
Kenneth: Exactly
Clay: That’s not Stash. Stash is a straight up investment app through and through. So, I mean, you’re absolutely right what you’re saying Kenneth. But it’s not like Stash is a piece of garbage. It’s like-
Kenneth: Exactly.
Clay: Why won’t this hammer-
Kenneth: It just wasn’t for me.
Clay: Why won’t this hammer put this screw in? Because that’s just not what it’s designed for. But so, all right, well, I mean, were you trying to trade with Stash or did you just quickly realize that [crosstalk 00:15:38]-
Kenneth: I quickly realized that this wasn’t, yeah.
Clay: So, it sounds like you-
Kenneth: I liquidated that and then I went into it more and more and then I actually pulled up Webull and I liked their charts through your videos of you suggesting them, actually.
Clay: Okay. I was wondering, was that from one of the videos I did or not but it is. Good.
Kenneth: Yeah.
Clay: I fully agree. They have… So, for listeners out there, Webull… Even if you don’t necessarily use them for your broker you can… They have quality charts, so I would definitely… I mean, have you ever seen TradingView charts?
Kenneth: TradingView? No, I don’t think so.
Clay: Okay. They’re basically a knockoff of those. So, for listeners’ sake though, if you like TradingView charts, they’re basically like TradingView charts except you don’t have to pay for them. In fact, like he said, there’s a video on the YouTube channel where I show and document how you can make it happen. But anyways, I’m glad that you discovered Stash was not the right way to go, and then you found Webull, and you enjoyed those charts. So, did you just open up an account right away or how did that all play out?
Kenneth: Yeah. I went through, did your video, and then I did the little promo and a couple free stocks. So I opened it up. I liked how the charts looked. I liked how you could customize it. You can the change color of the lines. Color of any of your tools that you like using. Whether it’s Fibonaccis or just regular… Crap, I can’t speak.
Clay: Yeah, I know you mean.
Kenneth: SMAs, sorry.
Clay: Yeah, moving averages-
Kenneth: Moving averages, yeah.
Clay: Right. Yep, yep. So, you got all those on there, and was this in… So, you opened this up while you were still within the YouTube rabbit hole? Is that how it was playing out?
Kenneth: Yep. That’s pretty much how it was playing out. I made a couple trades. I quickly realized, I think I made five, six, seven trades and pretty much every single one of them lost, but one of the other YouTubers… Not YouTubers, but traders that has a YouTube channel that also themselves have an education program. I went with you instead, obviously, for-
Clay: Thank you.
Kenneth: I liked your teaching methods better than them. They’re more textbook you’re more listen verbal, which connects with me better. And that’s just one of my ways I learn. But one of his teaching methods was if you just started trading, you don’t really need to risk more than $10 a day. So make that $10 your stop loss every single time, and go from there. So, six, seven trades later, $70 in the hole, and then finally get one winner where I made 17. I was just like, “I have no clue what I’m doing.”
Clay: Yeah. Well, let me defend you. You did what you were doing in the sense of you recognize the math. Okay, so if my win was 17, but all these losses added up to 70 there’s something broken here. There’s something not quite right. At least you recognized that. We’ll try to look at the glass as being half full here. What were these trades? Were these supposed to be day trades? Were they swing trades? How were you finding these trades? I mean, walk us through some of those opening trades that you were taking.
Kenneth: They were mostly day trades. Like the first two were kind of just like, “All right, I’m going to make a trade.” I’m actually on your inner circle as well. So, I was kind of following that a little while and seeing what people were calling out, and trying to understand where it was going since I’m cliche small account. So, most of the movement or the stocks that actually had movements I can’t quite afford. I could maybe pick up 10 shares or 100 depending on the stock. So not really a lot of movement on my part. But also at the same time, I didn’t understand entry and exit, things like that.
Clay: And isn’t it amazing? Because I always like to ask people this, you spent a lot of time, you watched a lot of YouTube videos. And even with all of that… I’m not trying to like badmouth you or throw you under the bus because I was the worst of the worst when it came to all this stuff. But I mean, it still just makes me laugh. It’s not like you just showed up and just opened up a brokerage. You still went through YouTube videos yet you still ended up using Stash, which is… Let me put it this way. What you know now, you probably just shake your head that you ever had Stash when you were trying to trade. I mean [crosstalk 00:20:43]-
Kenneth: Well, my dad suggested Stash just to put money aside and stuff like that. But then I dug into it and then it just didn’t seem useful for me to trading. So, I had I think a couple hundred tied up in that. I just liquidated it and shut it down, and then I started to put it into something else.
Clay: Gotcha. So that point kind of backfired in my face, but the core point is isn’t it amazing [crosstalk 00:21:08]-
Kenneth: Yeah, not to do that, but-
Clay: Isn’t it amazing though, even with all the YouTube videos once you’ve learned what you’ve not learned, you’re like, “Oh, there’s still a lot more that actually goes into it.” Because you’re now here talking about entry points and exit points and all that. I mean, there’s quite a bit of more than what maybe meets the eye. Is that a fair statement?
Kenneth: To put it in perspective, the six, seven months of YouTube versus the, I think slightly less than a month of the Trading Freedom Pathway, I’ve learned infinitely more in just… Yeah.
Clay: It’s not like that what I offer is any sort of like Holy Grail, but what I offer is structure. What I offer is a process. What I offer is, let’s just start here, and then we’re going to go here, and then we’re going to go here. And I think a lot of times… I mean, you just perfectly summarized it. Seven or eight months of YouTube in the random sea has been, you’ve learned infinitely more in just less than a month of going through structure. I think people underestimate just the value there is in a structured format where it’s not pure randomness and you’re not learning about… It’d be like, okay, let’s learn math. Okay?
Clay: Okay, first thing we’re going to do, let’s talk about trigonometry. It’s like, “Well, shouldn’t you start with addition and subtraction?” Oh, well, but when you don’t know you’re supposed start with addition and subtraction then you’re starting with trigonometry or algebra or calculus, it can get messy in a hurry. When you say that you just felt pretty overwhelmed when you were going through the seven or eight months of just the YouTube and all that.
Kenneth: As my own personality, I don’t get overwhelmed. I see information, I decide whether or not I absorb it or not. Then sometimes of things that I choose to absorb, I go and re-absorb it again. So, what I find underwhelming was how much I didn’t know. And then once I didn’t know how much information was actually out there that I understood. Going through even if I went back and watched some of the first videos I saw of you and other traders, I would watch the videos, see what was happening. Okay, that’s a bullish or bearish candlestick. Okay, the chart looks like it’s mostly bullish or bearish, but not necessarily seeing the full picture. People that don’t understand trading don’t understand how much information there is in even just your live trade videos. Like everything from the level two to your entry and exit point and whether you take your mental stop or a physical stop and when you choose to do that. Without understanding the structure of a trade plan you don’t know what you’re watching.
Clay: Thank you for saying that because there’s nothing more that makes me quiver in my boots when people are like, “Hey, I’ve been watching your live trade videos, and I’m going to start trading next week.” I can just say, “Listen, you have… There you’re playing with fire.” I get it, you may think you know what’s going on. But just because you know that those things are called level twos, and just because you know that thing is called a candlestick, and you seem to think that I buy or sell within… It’s like, “Please, please don’t just go down that rabbit hole because you’re going to get roasted.” As you beautifully said, there’s definitely more to it than what you would see. There’s more information, and yeah. So, hopefully those people that maybe are listening to this, they heed your warning, but if they don’t, well then listen, Kenneth and I, we tried to warn you and it is what it is at this point.
Clay: So, you were going… I mean, what did you… During that seven or eight months has your goal always been that you wanted to be a day trader? Or have you wanted to be a swing trader? I guess what is your ideal situation? When you were getting started, what were you after? You said one of your first searches was how to trade, but did you have any… I mean, at that point I realize you may have not even know the difference between day trading and swing trading, but in your mind what were you visualizing towards how this market would fit into your current life situations?
Kenneth: Mostly as a side hustle. I didn’t really start really, really grinding in towards training until after I quit my secondary job. At the time I’d been working two jobs. I’d been working my full time job, and then I worked at a pizzeria at night. So, I was well pulling 12, 13 hour days all the time. They would be split up by two or three hours between the two jobs, but I get up at 7:00, and then be in bed by midnight just gassed from working all day.
Kenneth: The boss at the pizza place pissed me off. He was lazy. He didn’t understand that you have to physically be there to run a business, especially when you’re understaffed. And I was just done. So I needed a second source of income because me, myself, I know I’m not where I am going to be 10, 20 years down the road. But in order for me to get there, I have to start.
Clay: You’re right. Preach it. You’re absolutely right. I like that attitude.
Kenneth: So, I was like, “Well, if I’m going to do this I have time now.” So, I have time to learn. I don’t have any kids running around the house. It’s nice. Me and my fiancee have been together for four years now, so she trusts me 100% in really everything I do and that is a support system that is honestly the best. She has 100% faith in me, and that’s one of the things I love about her. But she said, “All right, if you want to do this, do it. I’m not going to hold your hand or anything else like that, but I trust you. Do what you’re going to do, learn how to do it.”
Clay: So, you would agree that a support system is needed for this venture, right? Because that’s what I always try to-
Kenneth: Yeah.
Clay: Whenever it comes up, it’s… I mean, sometimes they’re like, “Well, maybe I’ll do it behind my wife’s back or behind my…” Well, actually, I’ve never had a… I don’t think I’ve ever heard anybody say do it… It’s usually scumbag guys that are thinking about trying to do it behind their wife’s backs.
Kenneth: Those are are same people that are gambling.
Clay: Yeah, exactly. And I’m just like, “No, don’t do anything behind anybody’s backs because you do need… This is going to be a mentally taxing game, business. This thing, you’re going to get punched in the face. You’re going to get… The market carries a sledgehammer, and it’s going to get you in the teeth. You’re going to need a support system.” And the exact opposite way to create a support system is to start things off or just hide things or do things by anybody’s back. But it sounds like that’s not your policy at all, and you have the full support of your fiance, which you need, right? From your experience-
Kenneth: Of course.
Clay: … thus far, that’s good that you have the support system in place.
Kenneth: Yeah, whether it’s friends, family, strangers, or other people in the inner circle, if you do become a part of that, which is very nice. Everyone seems to be honest. And educate yourself, don’t throw your money away. That’s what I kept getting fed most of the time when I was asking things, which was, I was like, one of the main reasons I finally just said, “All right, I’m going to do it.”
Clay: And were they being honest with you though? Did they lead you down the right path? Because I’ve had people say, “What’s up with all these bots?” What’s up with… I’m like, “They’re not bots.” I’m like, “How many salesmen you got in them?” I’m like, “I don’t have any.” Anybody telling you about the courses it’s because they’ve gone through them. They don’t get affiliate commissions, nothing like that. I’m glad that you listened and I’m glad that you can report that. It sounds like it’s saving you time. [crosstalk 00:29:15].
Kenneth: It’s saving me time and technically money too so that’s priceless.
Clay: Well, how so? Because I don’t think a lot of people realize that. So, what do you mean it’s saving you money? Kenneth, you’re an idiot. You just paid for stuff that’s for free everywhere you moron. What do you mean it’s saving you money? Explain yourself.
Kenneth: So, simple math. Everyone else says they try to do this on their own. They’ve lost two grand, 10 grand, 20 grand. If you either take that time spending that money trying to learn it yourself, I kind of put that right next to playing golf. I’m a big golfer. You can learn to play golf by yourself, and with inexpensive equipment and stuff, but to become an elite player, to become a professional trader, anything of that magnitude it takes coaching. Literally professionals in any sport have coaches. Basketball, football, baseball, boxing, tennis, every single one of them has a coach, and is constantly working on through a technique and learning. Why is that different anywhere else in a business, educating yourself, learning to trade? Learning to paint. People just don’t appear in this world knowing how to do things.
Clay: I agree, and that’s what I hope and wish people would just think through, and not, and neither of us are getting at, so therefore buy Clay’s stuff. I’m not saying that. If there’s something else that you feel more comfortable with or if you’ve been on the edge with, go for it, get it? I mean, because you’re absolutely right. The amount that you can… And a lot of people don’t realize is the amount you can save by just simply avoiding stupid things, sure you’re not making money in the sense of your accounts growing. But education can save you so much money by preventing you from losing it by doing stupid things. And if you can avoid doing a stupid thing, that means you don’t lose that money. And that means that you don’t actually have to make that money back. So when you don’t have to actually make money back… Benjamin Franklin, a penny saved is a penny earned.
Clay: I always call it the, the caught or the pit principle, which is if you can avoid falling in a pit because you know that a pit is sitting right there. Well, and there’s a whole lot of value in that. Sure. It’s not like you really gained anything in the sense of your account grew, but if you can save your account from going into a pit, well, then that’s the same as in my mind at least making money. So, you make very logical points and hopefully people listen to that. So anyways, you were asking questions, people were telling you to invest in your education. So, were these trades, to kind of go back to that first… The original ones you were doing, were these intended to be day trades or were those supposed to be swing trades?
Kenneth: I tried to make them day trades. Grab 10, $20 here or there. I think I always missed. I didn’t enter where I was supposed to and I certainly probably chose the wrong stock and time period to make that entry on the chart, but [crosstalk 00:32:22]-
Clay: And this was all before you join the classes, right?
Kenneth: Yeah. All of them before.
Clay: Okay.
Kenneth: Like one of the last trades I had was before… The $17 ones that I made was before I joined the classes was… That was the most information I had gained yet, and then the stock that I had chosen, it went up to $17. And then again, it just stopped moving because where I’m at swing trading works best with my schedule. But at the same time, I’m thinking I’m going to put that to a halt and then turn to options just because it has a higher percentage return for a smaller account than trying to swing trade a regular sock, but [crosstalk 00:33:14]-
Clay: What stocks were you trading? Just out of curiosity, do you remember what companies they were?
Kenneth: I’m pretty sure Webull has them tracked. Let me see.
Clay: Because I’m always curious what ticker symbols people are looking at in trading and I think that really kind of just helps build context in terms of where their mindset was at at whatever point in their journey.
Kenneth: Yeah. I don’t really remember but I do remember the one that I won money on because being a golfer I invested in the Callaway when the COVID hit, and their stock dropped. And I was just like, “Well, this is to a dollar amount I can invest a decent amount of money. And if it gets halfway to what it was I’d make a really good return.” It bounced back up, and then it consolidated a while, and I said, “All right, let me just take my money and leave it alone, call it a positive.” And then, over the next couple of days, and I saw it again it jumped up another dollar or two, and I was just like, I don’t know where. But that’s just not understanding how to create a trade plan, understanding targets.
Clay: Thank you for saying that. Because if you weren’t going to I was going to say, “That sounds very primitive. Well, it used to be there. So, even if it gets just halfway back, okay, that would be good.” I guess that’s a trade plan, but now that I know what you know, you just realized how silly that is in hindsight, but if only trading was that easy. Well, you know, a stock… Well, my favorites are like when reverse splits have happened on a stock many times and people are like, “Oh, this thing used to be at $50,000. Well, even if it moves a 10% then it’s…” And I’m just like, “No. First off, it never was at that price level because of reverse split.” But you might want to learn a little bit more. But yeah, I love the classic, well, it used to be at this price. So, therefore, even if it just comes up insert some sort of percentage. Wow, that could be a great trade. There’s just more to it that goes into that. But I’m glad you’re realizing that at this point.
Kenneth: Yeah. I actually can tribute the virus to one of my reasons of buying. The trade plan was because like, well, it seems like every 10 or so years there’s a market crash. So if there’s ever a time to educate myself on this it’s now. I have more time than ever. Technically I’m not losing any money because I’m staying employed. My boss is really good to me. I’m happy where I work. And so, I’m going to educate myself. So 10 years down the road when the next crash happens, not only will I be well educated, but a veteran in trading. Not to mention the possibilities of the size of my trading account is significantly higher, and then I could take long term investments once those stocks come down again.
Clay: Can I ask how old you are?
Kenneth: I’ll be 26 in July.
Clay: Nice. Because I like it. I like how you’re… I mean, your your whole business plan, your whole like just vision is, hey, you know what, 10 years from now when the next thing comes around, I’ll be ready. Most people will be like 10 years. I’m looking to get rich by next week, what do you mean 10 years? I applaud you for just a bigger time horizon.
Clay: Now, I’m not saying it’s got to be 10 years. But I’m saying there does have to be some sort of attribute of realizing that this is not some sort of business where it’s going to happen next week. It’s not going to happen overnight. It’s not going to happen next month, and sure that’s maybe raining on some of your parades. But that’s just a fact of the matter is you’re not going to gain a full understanding and be… Money’s not going to start raining from the sky after only 30 days. And I get it, there’s lots of social media, and marketing and things that try to portray that out there. And from a business perspective, from a sales pitch perspective, yeah, that’s brilliant. Tell people what they want to hear. Yeah, it doesn’t take that long at all. But Kenneth, you’ve realized it’s not going to happen overnight, right?
Kenneth: No, it’s not. Life is long term. Working at the pizzeria I saw 60 plus year olds waitresses that don’t have a retirement plan. They’re still working at over 60 years old because they didn’t understand financially how to take care of themselves. Understand that, hey, I don’t need this car now. Hey, I don’t need this watch here. Hey, I don’t need X, Y, Z. So, 10 years is going to happen unless something catastrophic happens. If something catastrophic happens i.e. death it’s meaningless anyway. So, if I plan on being here in 10 years, which I do, I want to be in a place where I am financially comfortable. Whether that’s slow growth or the Hail Mary pass, it’s going to happen one way or another. So one way is more guaranteed where the other one is you could find yourself $30,000 down in the hole, and you don’t know how to get out.
Clay: Very good point. And to also, to build upon your bigger picture timeframe is, it’s not like you only have opportunities as a trader every 10 years. There’s opportunities… There were opportunities before the whole Coronavirus thing hit.
Kenneth: Oh, yeah.
Clay: Volatility has picked up a whole lot more, that’s true. But what Kenneth is not saying is, well, I wasn’t ready for this opportunity as a trader, so I’ll just be ready 10 years from now for the next opportunity. That is not what he’s saying. He’s just saying-
Kenneth: Absolutely not.
Clay: … that when the next thing comes around, he will be ideally with a bigger account so he can take more advantage of it. He’s just saying he’ll be that much better prepared for it. But he’s not saying that he’s missed out on this opportunity so now he’s just got to wait until 10 years from now. No, no, as traders there’s always volatility somewhere in the markets. Sometimes it’s easier to find than others, but there’s always something out there. So the good news is, well, until those 10 years comes along again or whenever it does play out, there will still be plenty of opportunities around the way. So are you… Let me ask this, where are you at within the classes right now?
Kenneth: I just finished up level twos. I’m probably going to go back and re-watch some of them again. But let’s see, the third of panic buying.
Clay: Okay. So, you’re in RVR trading right now?
Kenneth: Yeah, RVR.
Clay: So, is it are you trading with real money right now or what is… I guess, just walk listeners through how you’re approaching this, your studying and kind of your training component here.
Kenneth: In a sense I’ve stopped trading to stop myself from making the same mistakes again. I have a better understanding of how to make an entry and where to look for, but I am also not where I am to where I think I can be effective. So I’ve kind of paused the trading a little bit. I have been a little bit busy the last few weeks since I’ve started the Trading Freedom Pathway to paper trade. So I haven’t really dove into that rabbit hole yet, which it’s always easier paper trading because it’s not your money and you like to experiment. Sometimes experiments work, sometimes they don’t. But most of the time they turn out all right, and that’s just the way it happens to be. But then again, it doesn’t have that same pressure, the same emotions that real trading has, but it’s also good for just experimenting and trying different plans, strategies, understanding volatility in different ticker symbols.
Clay: Okay. You threw out a couple of words that threw up a little red flags. You said you essentially have stopped trading. You kind of stopped trading. So, are you still using real money sometimes? What does essentially mean?
Kenneth: I’ve put a… Pretty much I’ve got a swing trade in right now. And that’s just holding most of the account and then everything else is put to the side. If it doesn’t work out, and if I see it start pulling back, I’m going to… I already have that in place to stop that. And then I’ll have my account pretty much empty from there, and I’m going to finish RVR. I’ll get started with the options, go back over level twos, which I think Webull could have better level twos. It looks like they only have a tape. They just have when everything’s bought or sold.
Clay: Yeah, you have to get the total view for that, which-
Kenneth: The total view.
Clay: Yeah, and I think somebody was talking about the chat room. I think it’s today, 20 bucks a month or something like that, which is somewhat… Well, not somewhat, it is pretty typical. I have to pay through my Lightspeed. I think I pay 20 bucks a month for level two data. So, most brokers, you have to pay for it, but [crosstalk 00:42:55]-
Kenneth: Yeah, it’s still better than most.
Clay: Oh yeah. Exactly. There are some pretty shaky things out there for sure. All right, so this swing trade you that you put on, was this put on after you had started learning? Or was this something that was left over from before?
Kenneth: Leftover from before.
Clay: Okay.
Kenneth: I’m going after it again, the same trade that I won, but that’s just ego getting in the way again, but I’m trying to separate from that. [crosstalk 00:43:25].
Clay: All right. Wait, I need… So, you put on this swing trade before or after you started with the classes?
Kenneth: Before.
Clay: Okay. So, it’s… because I thought you made two trades on it or just one?
Kenneth: Two trades, so I got out, made $17 [crosstalk 00:43:46]-
Clay: But even the second one was before you started the classes.
Kenneth: Yeah.
Clay: Okay. So right now, are you holding and hoping? Is that what I’m maybe sensing a little bit?
Kenneth: Yeah, that’s what it was. And as of right now, it’s-
Clay: What ticker symbol was it? [crosstalk 00:44:01].
Kenneth: EOI.
Clay: Oh, Eli Lilly, is that what they are?
Kenneth: No, it’s Callaway? Callaway [crosstalk 00:44:07]-
Clay: [inaudible 00:44:07]?
Kenneth: Yeah.
Clay: Who’s Eli? Oh, that’s LLY. [crosstalk 00:44:11].
Kenneth: Yeah.
Clay: Okay. Hey, good day today.
Kenneth: Yeah, it was.
Clay: Where are you in at?
Kenneth: I was in at 10, eight, nine, and it’s up to 12, [crosstalk 00:44:21], right now.
Clay: Oh, so you’re in the profit right now.
Kenneth: I’m in the profit right now. It’s been consolidating the last week, slowly pinching. And now it’s breaking over previous resistance from the first bounces after hitting its bottom.
Clay: Yeah. It’s sitting at the 50 day moving average right now though. Can it get through there? That’s the big question going forward.
Kenneth: That’s the big one.
Clay: Yeah, we’ll see. See, and people pay for pay per view. You don’t need to pay for pay per view. We got a showdown tomorrow with EOI, and the 50 day moving average. So, do you have a stop loss in right now? Where would you bail from the trade? Are you looking… Do you have a target? I guess walk me through your thoughts on your trade plan right now.
Kenneth: Well, it was the same thing. So it was at $10, which I think I have 40 shares. So I think that’s 40 cents, and then I’m probably going to move it up tomorrow. I’m probably going to move it up to 50 cents above my entry, and-
Clay: So, it’s 10.50?
Kenneth: No, that’d be at I think 11.40.
Clay: Okay.
Kenneth: So, that’s just about a dollar below where it topped out today. So either way, it stops me out, and I make 50 cents or it keeps going, and that’s what we all hope for. But once it stops out, that’s going to be pretty much where I’m going to be waiting until I understand options a little bit better.
Clay: Okay. Now, you said a word, and so I I’m trying to hold you accountable here. You said you’ll probably move the order. So, probably depending on what? Because probably is not a commitment.
Kenneth: I have a busy day tomorrow and that’s where the probably comes in.
Clay: Okay.
Kenneth: Yeah. I work for a golf ball company. It’s a wholesale golf ball company. So tomorrow I have a pallet of balls I have to sort through, and then another pallet of balls I’m washing. And then I have a few club shafts I have to glue to customers’ heads and a couple grips. And that’s-
Clay: Okay, that that’s fine. I guess that’s… Well, I mean, at some point, do you trade? Do you use a Webull app at all?
Kenneth: Yeah. So, for a while, I would just watch the stock markets when I would be sorting golf balls. Right now I’m watching RVR radar right now, and going through that. Basically what I do for my studying regiment is I watch the videos-
Clay: Well, hold on a second, hold on a second. Don’t try to, you know. What is going to… I guess, can you not find the 10 seconds it would take tomorrow at some point to put in an order? I mean, it sounds like you’re-
Kenneth: No, I could find it. But it’s just a matter of waking up and remembering. I didn’t even look at it today actually at all, so I didn’t know it went up as much as it did.
Clay: So, it sounds like you’ve pretty much kind of written off this trade. You’re not really-
Kenneth: My heart’s not in it.
Clay: There you go. Because you realize that this was never put together with a backbone of education behind it anyways, is that a fair-
Kenneth: It’s been consolidating for two weeks, so yeah.
Clay: Okay. All right. So you just realized… I like that. Your heart’s not in it and your heart’s not in it just because this was all before you started on the new journey and getting educated and it hasn’t really done anything. All right. That’ll make sense because right now it’s on like, what do you mean? But that does make sense. Your heart’s just not in it for those reasons. Okay. That makes a whole lot more sense. So, anyways, back to your… I thought you’re trying to wiggle out of something, but that makes sense.
Kenneth: Yeah.
Clay: So, to your studying regimen, walk listeners through how you’ve been approaching all that.
Kenneth: Most of the days when I sort golf balls, that takes up most of my day. So, I’m quiet, I’m in the warehouse to myself. I throw up the educational videos, and I listen to it as I sort balls. I’ll take a peek at the screen every now and then just because sometimes you need to look and see what’s happening. So, I go through each video twice. Some videos that I don’t quite catch everything I’ll go through again, but as I’m going through and sorting everything, I catch it in my subconscious mind. So when I go over it again, it’s there that I understand it, but it’s getting hammered in hard the second time around.
Clay: And the second time are you still just listening or is that always the visual?
Kenneth: No, that’s focused in on the video. That’s at nights when I get off work or afternoons when I’m off of work, or sometimes on the weekends as well. But I’ll re-watch a video that I didn’t quite understand or actually needed some visuals because I didn’t know them. So like the first, the technical analysis patterns, since I knew candlesticks, and I knew patterns. I listened to them, a video here or there I re-watched but most of them I got right away since I understood candlesticks roughly. And those that first chapter was the foundation of candlesticks, which I basically had. It’s getting into the second part more advanced and really understanding psychology of the candlestick. That’s where I went in and focused on understood hammer candles, spinning top, a full green versus full red and where it is on the chart represents the psychology.
Clay: Okay, cool. Well, I like that. I like how you listen. Because when you say, well… Because this stuff is very visual too. So, I mean, it’s like-
Kenneth: It is very, very visual.
Clay: If somebody’s just listening, I was going to say you might want to consider actually watching, but I like it. You go back and just your second time through is the visual, which helps kind of like you said, compliment the fact like, yeah, I’ve heard that before. I remember that, and okay now I’m seeing it. So that doesn’t make sense how it hammers it home that much more.
Kenneth: It seals it in tight. Yeah. So, it allows me to take in more information frequently. So if I was just to watch the videos at night, and give it my full attention at the end of the day I feel lackadaisical. I’m not fully into it. But if I hear once during the day, and then I reinforce it at night or the next day, whenever it may be, it sticks and it sticks that much harder.
Clay: Awesome. I like that a lot. That makes… It started off a little shaky. I’m thinking, how can I be polite to Kenneth to tell him, but you recovered it nicely, and I like the logic quite a bit. Do you have any sort of timeframes in terms of… Now, I realize we’ve talked about the 10 year and this is definitely a broader, but would you like to be trading actively within a certain amount of time? Or I mean, how are you approaching the time of things or it’s just straight up I’m just going with the flow, and whatever happens, happens, or would you like to… Do you have any sort of maybe broader type goals in terms of when you’d like to try to get a little bit more active, again, with the real money?
Kenneth: I’d like to say in a couple months. Two or three months for sure be trading and having a solid idea of what I’m doing. Until you asked the question, I’ve kind of been going with the flow, and not really had an end date, but not having goals, and setting dates. Makes you lazy and doesn’t force you to do something. So I was like, I haven’t really set a date to be done with the Freedom Trading Pathway or with what parts of it that I think I need to trade with. I’m probably not going to be going into the Forex or doing the Penny Survival Guide. But as far as the basic principles of trading and technical analysis and the most likely options, once I’m through with those, that’s when I’ll probably get back into it.
Clay: I would say this because you make a great point without goals, without timelines, then you can just slack off and ever get through it. But I would definitely put a timeline in terms of when you should be through the courses. Because what I would want to happen is well, I want to be trading three months from now and then three months from now hits and you just start trading because you might not actually be ready to trade with real money. But I do think if you’re saying I need to be through these classes three months from now, that is a good goal, because at least at that point, you have a very good idea of, okay, do I need to revisit some of the classes? Do I need to do this or that?
Clay: So, I wouldn’t necessarily put it in terms of you want to be trading by certain time, but definitely, I agree with you of goals are required, and you would definitely want to have something to be done with the classes by three months. Or like you said, the classes that you want to go through. He says that because part of the program is there’s a bunch of classes after you get through the core classes then you can go learn about forex or penny stocks or options or other things, but you don’t have to do all those classes. But yeah, I would definitely kind of try to hold yourself accountable in that regard. And I guess, are you… You’re planning on doing swing trading? Is that where you’d like to end up right now once you get through everything?
Kenneth: Yeah. Once I get through everything it’s mostly going to be options to grow the account. And then once I get the account size… I’m thinking the good account size to at least start swing trading with full stocks is around $10,000. You can stay in options if I end up liking options and realize I have a niche for it. And then stick with that. But eventually swing trading works best with my schedule because it’s, I can put the attention into the analysis after the market because each bar being a day or a week I can take my time until I fully understand how to look at a trade. I think eventually, maybe two or three years down the road, I would like to be a day trader, an honest day trader in and out in the same day. But where I’m at right now, I don’t think I’m anywhere close to that.
Clay: And yeah, I mean that’s just being you might be closer than what you think but I’m also glad that you’re being realistic and not thinking hey, I’ve been studying for two weeks I’m going to be a professional day trader tomorrow. That’s also the other end of the spectrum that you don’t want to want to be at. I would say that if you grow your account with options, then you might as well… If it ain’t broke don’t fix it. So, if [crosstalk 00:55:16]-
Kenneth: Yeah, that’s the other thing.
Clay: Yeah, exactly. But you plan on swing trading the options too, right, to grow your account or are you talking about you want to actually try to day trade the options to grow your account?
Kenneth: Most likely swing trade since their options are all time based anyways?
Clay: Right, right. Well, I mean, options can be day traded too. A lot of people do that, but… All right. Well, good. You have thought things through. You’re thinking things through. Your ball is in motion, no pun intended, because I get it. It sounds like you have a lot of golf balls you have to work with tomorrow, but-
Kenneth: Yes.
Clay: I’m glad the balls are rolling on multiple fronts, and that’s what we want, and we want… That’s the name like you said, sometimes you just got to do something, and when you start to do things actually happen. Well, looking at the time here, we’ll start to wrap things up. And well, I mean, I definitely want to have you back at some point so we can see where this continues to go. But if I were to give you the time machine because here we have a time machine and you could go back to the start of all this, and you could give yourself one bit of advice. What would that one bit of advice be?
Kenneth: It’s hard to say. I guess I would kind of say start training yourself a little bit sooner. Get educated a little bit sooner. But I feel I caught that niche early enough that it’s not a regret. It’s hard to say. I think I tell myself to save a little bit more, but that can be difficult at times.
Clay: Yeah, and I mean, that’s always… But that’s always catch 22, but I can see what you’re saying is because it’s not some people show up and they they just rush into things. And they’re losing all sorts of money. And their thing is, I wish I’d have just slowed down. But you approach this all pretty cautiously so I can see where you didn’t have any major blow up and like you said, you caught the whole stashing quickly, you liquidated that and that that was that.
Clay: But all right, yeah, I can see that and you put it very nicely, very elegant with your words. Nothing really became a regret, so you never… None of those things, yeah, maybe were an annoyance, but nothing crossed that line from annoyance to regret. I’m going to have to steal that from now. So when do things cross the line from just being an annoyance to a regret because that’s a good distinction for people because those are two very different situations. But all right, well, time to move on to some fun questions just so we can… so the community can learn a little bit more about you. What is your favorite movie?
Kenneth: Oof.
Clay: Is that a name of a movie?
Kenneth: No. That’s a big one. I like a lot of movies in general. I’d say if I were to go back to my childhood, one of my favorite movies was The Matrix. It’s hard to say now with the whole Marvel Universe coming out because every single one of those is phenomenal. But if you go to a movie that’s kind of like dear to my heart, I really loved The Matrix series.
Clay: The Matrix was pretty much… I mean, that was revolutionary at the time it came out.
Kenneth: Oh, very, very much so.
Clay: The special effects, and all that stuff. People were like, wow. But I mean, these young chaps these days, they just don’t appreciate it. But for us, you’re actually young compared to… Man, I’m getting… No, I’m still young, but we’re the same ballpark. We realized that Matrix when it came out, it was just like, “Holy smokes. This is some legit stuff right now.” All right, so I’ll take Matrix, that’s a good choice. What about actually where are you located geographically?
Kenneth: Central Florida.
Clay: Oh, nice. We’ve been having a lot of four on here. All right. Well, what do you like, what’s your favorite food down there in Central Florida?
Kenneth: I love pizza a lot, but we do a lot of cooking at the house. So we make good food all the time. But guilty pleasure is definitely pizza.
Clay: I mean, you can’t really go wrong with pizza. That’s kind of like the blue chip answer. I mean, if you’re looking for a blue chip food that everybody understands, it’s pretty much pizza. And then final question three words, and these three words need to be what you would associate with what you believe it takes to be successful at trading.
Kenneth: Discipline, honesty, and being able to let go, be passive.
Clay: I like that. So honestly, though, honesty in regards to what? That was a…
Kenneth: Being honest with yourself. So, don’t get caught up in hindsight. Be honest with yourself. Don’t say if a lot. Just didn’t work out, I was wrong, on to the next one. And being passive ties in right behind that. It’s like in golf, you hit a shank it’s over, go to the next shot, the next shot’s all that matters. You got to put it on the green. You got to make the putt.
Clay: Would you also say honesty in the sense of don’t confuse luck with skill?
Kenneth: Yes.
Clay: Because that’s why I asked honesty. I was hoping you would say something about honest with yourself because that’s a beautiful word. And I think that would probably be one of mine is just honesty in regards with yourself because to all your reasoning like you said, you nailed it, but also the whole I see it way too many times the good old fools [inaudible 01:00:49] people are like, “Oh, man. Yeah.” And they know deep down that they just got lucky and they’re just kind of winging it, but somehow they’re just not being honest with themselves, and they think that it’s skill. And then they’d have to learn out the hard way… Kind of not even learn. They just because they already know deep down, but they haven’t brought to the surface, and when it’s brought to the surface it’s not really a pleasant experience but yeah. All right. Well, we’re going to have to… Will you come back at some point to keep us all updated on your journey?
Kenneth: I would love to. I would like to thank you for having me on as well.
Clay: Well, again, we started off and we’ll end I thank you for volunteering to be here. And everybody, this was a great time and this makes my life easy when I don’t have to track people down, but you also left us off on a good cliffhanger where we’ll see where things go from here. So yeah, but congratulations on your EOI trade, but don’t forget about it. Stay somewhat focused on it. I mean, you’re making money on it so all right. I don’t know what you got to do. Set up an alarm or something tomorrow up to move up your [crosstalk 01:01:53]-
Kenneth: Stop loss, yeah.
Clay: Because what I don’t want to happen is this has turned into a losing trade, that’d be so discouraging.
Kenneth: Yep.
Clay: All right. Excellent.
Kenneth: I appreciate it. I guess, goodbye everyone.
Clay: Yeah. No, no, Kenneth. I appreciate you being here, and we will have you back. So thanks again Kenneth for taking time out of your evening.
Kenneth: I appreciate. You have a good one.
Clay: All right. Now for you listeners out there before we go a couple final things here. First off, if you are listening on iTunes or any other podcast players be sure to subscribe. That way you know when future episodes and content is released. If you are… Especially an iTunes, if you can leave us a review or better yet a written review that goes a long way. It’s really appreciated. And I thank you in advance for it. If you’re listening at claytrader.com then in the bottom right hand corner there’s a little chat box there. So if you click there, you can reach out to us questions, comments, suggestions, love to hear from you. So please feel free to reach out whenever, but all in all, thank you to all of you as listeners. Thank you to Kenneth, and we will see you back next week.
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