Transcript:

we're goodWell, the good old government.And in this video,we're gonna go through a cautionary taleof a government and stock market regulations.And let me first start off all this.I'm not here to bash on the government per sebecause to be fair to them, I get it.Their intentions are good.They want to try to help.They are trying to help.So it's by no means,am I trying to sit here and imply that,and the government's evil,the government's doing this to,you know, screw people over.That's not what I'm saying at all.I fully admit, I will fully,I guess I don't know this for sure,but in my opinion,the government's intentions were good here.They were in, you know,they came from a place of,we were trying to help.They came from a place of, you know what?We were going to control this situation for your betterment.And I get that,the intention was goodbut that's the problem with intent,just because intent is gooddoes not actually mean it's going to help.And in fact, I would argue that this typeof government regulation does more harm than good.And it will, especially when it comes to new people, right?I would assume that the regulation herethat has put in a place is to protect new people,people that maybe aren't quite prepared.But that's kind of the cruel irony is,those are the exact people that actually really get smoked.And again, I'm not going to sit hereand talk any longer just in theory.I wanna show youand what you're looking at on the screen is proofand I realize for you statisticiansout there you can say Clay,Clay, that's a sample size of one.That's one example.And that's actually a good point.I fully agree with youbut anybody that has enough experience,you know that what I'm about to talk about here,I mean, I'm not gonna say it happenson every stock every daybut it definitely happens enough that you need to be aware.So if you're a beginner day traderif you're just getting started in the stock market,these are the sorts of dynamics.This government regulation,you need to be made aware of.Now, a lot of people have heard ofthe pattern day trading rule regulation.And I would still probably arguethat's number one regulations that's just like,oh, I get it.I get it, you're trying to help.But you're just making life more difficulton the people you're trying to helpand the same exact situation here.So this other government regulation trading halts.So what is a trading halt?It's just like, you would think,a stock is trading and then it is halted, right?Can you think of, you know,just the word halt, just means stopped,meaning something is tradingand then it stops trading,literally in the middle of the day and it just stops.Now, why does it stop?Well, because it's getting very volatile.The price is flying all over the place.And again, the government is saying,well, this stock is getting way too volatile.So you know what?We're just gonna stop trading right now.We're gonna let everybody kind of figure outwhat's going onand then we'll let trading start again.And the thing with trading halts isthey can happen over and over again.So it's not like it just happens once in a day.No, it can happen over and over again.Now I do realize,and I do agree with to an extent,halting like an overall market.Like if the stock market as a wholeis just going bonkers in either direction,I can see it halting and saying,oh, let's make sure that like the world, the country,the entire market is not overreactingin one direction or another,but those halts occur very, very, very rarely.We had one with the Corona viruswhen that was first going on.But I think the one previous to thatI guess don't quote mebut it had been years upon years before it ever happened.But I'm not talking about general market halts,I'm talking about individual stocks being halted.And why can that be so risky?Why can't it be such a pain?And again, if you're a beginnerand you're just getting started,why do you need to be very aware of it?And here we have an example of that right here.So let's just go through and this is ticker symbol, GLSI.Again, I get it just one stockbut there are many out therethat have done things like this,and that will halt.And the way it was working is you can see right here,maybe you're saying, wait, what's up with this stocklight?It looks kind of goofy.It does look goofy because of all these halts.So I wanna look at it as two different situations.You have shorts and longs.Shorts, if you're a beginnerthat just means people wanna see the price go down.That's how they make money.So in other words,they lose money if it goes up.And then you have the longs.The longs are the traditional way,traditional method, you know,meaning you buy low, you sell high.So longs are buying and they wanna see the price go upin order to make money.Or in other words,if they buy in the price goes down,they're gonna be losing money.So let's first look at the shorts.Again, these are the peoplethat wanna see the price go downand if it goes up, they lose money.So you could have had a short,that shorted somewhere right around here.And then all of a sudden the halt happens.So they shorted at the yellow arrow.And then right there is where the halt actually happened.Now I want you to look at what happenedby the time they let this,you know, the regulations let the stock startto trade again,it opened up there.So that may not look like a lot,but think about this,right here at that area is right around.Let's just call it $60.It then opened up at basically $67.So even if you were a short,meaning you wanna see the price go downbecause if it goes up, you're losing money.Even if you want it to be disciplined,there's nothing you could do.The best you could do is sell off $7 per share higherthan where you want it out.Again, because right there is that $60.So let's just say that you wanted to get outright there at $60,but again, it halted.Meaning you were not able to get outuntil the stock started trading again up there at $67,a $7 per share.I mean, shorts got absolutely destroyed.And then look at it right there.Maybe somebody tried to short again.So right there, the price close out,let's just call it,to keep the math easy, right around $79.So 79, again, maybe a short was like,okay, I need to just get out.I need to just get outbecause look at this thing, it's going crazy.There's, a trading halt happened again,the stock stopped trading.It then opened up the next one up there at $90.That's an $11.So shorts that even if you were trying to be disciplined,even if you just weren't something like degenerate gamblerthat just doesn't really have a strategy.Even if you did have a strategyand you got stuck in that hole,you're now looking at minimum $11 per share loss,and you had no control over it.Like you didn't, you just, sorry.Sorry, we stopped at 79,but then we started back up at 90.Yeah, shorts getting absolutely destroyed.And then you see that happen over and over.Like again, maybe somebody tried to short out right there,then it opened way up there.Maybe somebody tried to get out there,then it opened way up there.Now I could see you saying,well, Clay, those are the shorts.Like they deserve,like betting profiting from a stock actually going down,serves them right.You know, squeeze those shorts.And I understand that,but okay, here's the thing,let's look at what then happened.So let's, and this is where things actually get nasty.Because again, as beginners,as new people, new to the stock market,odds are, they're not shorting.So I do understand the argument like,well, who cares if the shorts are getting destroyed?Those are usually more experienced traders.Anyways, they're not new.They're not beginners.So who really cares?I mean, they get what's coming to them for shortness stock.I mean, I don't necessarily agree with thatbut I do understand that perspective.But here's the problem,longs and this situation,again, a long being somebody that buys low and sell high.So people that buy and wanna see the stock go up,they got absolutely destroyed.Destroyed on this one.Let's go here.So let's just say,and let's actually give the longthe benefit of the doubt.Let's say they nailed the bottom.So the price came all the way up herestarted to roll back over.So it was something like, okay,all right, yeah, I'm gonna buy, it's pulling back.It's pulling back.So they bought right here.At that area they bought,which was right around,let's just call it 129.So they bought at 129.And again, to be fair to them,they absolutely nailed the bottom.This one was pulling back, pulling back, pulling backand they nailed the bottom.But then, oh, oh, guess what?Government regulation, the stock halted.Look where it opened up.Opened up all the way down here at $100.So that was, you know, again,they bought at, nail the bottom, 100, or excuse me.Not 100, let's try that again.When I say 129,and then it halted.By the time the price opened back up,meaning that by the time the stock started to trade again,it was right there, at again $100.not to insult your intelligencebut that is out of their control.A $29 per share loss, out of their control.Like I said, and even if they were to,bought right there and they said, you know what?Yep, I'm gonna be disciplined, I'll set it.And I'm totally making this up.I'll set a stop loss, $2 below where I got inso that they think the risk is $2 per share.Yeah, $2 per share.Thanks to the government regulationjust morphed into $29 per share.But that's not all, let's say again,all right, things get trading.And then let's say somebody comes down hereand again, buys the bottom right there at $90.And again, this is somebody discipline.They're saying, you know what?I'm buying right there at 90.And maybe I'll put a stop loss in $3 lower.So I'm risking about $3 per share.Then look what happened?This next candle opened up all the way down there.So the trading was halted.And then when the trading resumed,opened back up, that candle opened up $45and I'm not making this up, pull up GLSI.This happened back in,you know, when was this early December of 2020.Think about that.$45 is where it opened back up.That is a $45 per share loss,out of people's control.Now I am well aware that you can sit here and say,well, Clay, if they would've held to it,it bounced back up and they would have been okay.Yeah, the problem with that response is,at the time, they don't know what's gonna happen.They're already down $45 per share.So don't say like,well, if they would've held it they would have been okay.Yes, you are totally trading in hindsight,and I assure you,we're all really good traders in hindsight.But think about that longs got absolutely crushed.Crushed, came all the way down here and then did some,you know, more of that the next day,where the shorts got screwed againand then longs got screwed again.And then things finally settled down enough where,you know, they didn't need to halt it anymore.But I mean, that's trading halts.That's what can happen.This is why, I mean,there's nobody from the government watching this,but I would ask if there is,maybe reconsider halting individual stocksbecause when you see examples like this,people were getting destroyed.Absolutely destroyed.especially the people that were buying, right?Which is the traditional way.People buying stocks,hoping for them to go up are the ones that,you know, took the bear of this,just monstrosity to the downside.So that is how traded halts work.Now to be fair,a trading halts always this drastic.They're not always drasticbut the core premise remains the same.The core premise being,you lose control as a trader,you lose control as an investor.You may think your risk.Again, assuming that you're tryingto be a disciplined trader,trade with a trade plan,your trade plan may say A,but because of a trade halt,it may turn out to be Z,and Z could be way different.Now, is it gonna be that different, no.Full disclosure, this is a pretty extreme casebut I mean, it can happen.So I mean, the whole idea is,I get it, the intention is good.Let's protect people,but in protecting people you're actually removingtheir ability to honor their trade plan,to be disciplined.You're removing all power from themand as traders and investors,that's not a good thing.We wanna be able to have our,the ability to make our own decisions.We wanna be able to follow a trade planthe way we have it mapped out from the get go.So just something to consider,it can be very risky.So if you notice a stock that's getting haltedover and over again,and you feel like it could be halted.Then all I'm saying is just realize.And I know,like a lot of people like to play halt strategiesand stuff like that,and I'm not gonna downplay those.But all I'll say is,there is that risk because nothing is guaranteed.So all it takes is one of these situationsand the halt and the stock opens up,you know, not where you think it is.And I mean, it can hurt really, really bad.So just be very aware of trading halts if you're not aware.And you know, I don't know,if you're some sort of government officialthat happens to watch thisand you have some sort of power.I don't know, just something to considerbecause this is an examplewhere in trying to protect people,a lot of people just got absolutely crushed.So that's all I have with trading halts,but yeah, be very aware of this government regulation.It can burn you really bad if you're not aware of itor if it catches you off guard.So as always, be searching the marketfor these sorts of situationsso that you can, yeah,flat out avoid them so that it doesn't,I mean, these sorts of situations are account killers.I mean, I still can't get over that.$45 per share, that is crazy.Before I go though, real quick,if you enjoy this video,then a couple of quick things on my end,please hit that like button,also leave a comment below.Even if it's just a thumbs up emoji,little comments like that go a long wayin letting me know you enjoy these types of videosand you would like for me to continue to make them.Then also check out the channel as a whole.There's a good variety of videos.So check those outand hope you decide to hit that red subscribe buttonas I would love to have youas a subscriber to the channel.But yeah, be very aware of those trading halts and yeah.Government, let us trade,let us honor our trade plans.First off, thanks so much for watching the entire video.Real quick, before you go,I want to invite you to a live webinar,web class training workshop, online event,whatever you wanna call it,but it will be me live revealing to youwhat I discovered that has allowed meto transform myself from being an employee,to being my own boss.Including how I had only one losing dayout of 73 days in total.I'm going to cover three keysthat have helped me unlock profitable consistencywithin the markets.The first key is super weird,but in a productive type of way.The second key is super awesomebecause it quite literally is wired into our DNA as humans,making it very easy to use.But in a cruel way,this becomes a pitfall for many traders.I'll explain it all though,including how to avoid the pitfallthat it creates for some.And yeah, the third key when you hear it,sounds way too good to be true but it's not.And I'll show you how it all works.Then at the end,I open it up for a question answer session,that is again, totally live.Even if you can't make the live session,please still sign up as it will be recorded.And you can go backand watch the replay that I will send you.Click the image on the screenor click the link down in the description boxso you can get the date and time and claim your spotwhich I should note is limited due to the fact thatthis truly is a live event.If you have any questions, let me know.If not, I'll be seeing you soon.