Transcript:
The Robinhood Trading app,
zero fees and commission,sounds like a great thing, right?Ehhh.Now right off the get-go,
I want to just kind ofclassify two camps of people.And one camp of people you
can probably just shut offthe video, it's not
going to pertain to you.The other camp please consider
what I'm about to talkabout in regards to Robinhood.So Robinhood in and of
itself, they're not malicious,they're not trying to do
anything harmful on purpose,however there is a major
red flag that comes aboutwith Robinhood and with
the no fees and all that.But again, going back to the two camps.One camp of people out
there maybe you're saying,"Clay, look, I have a small
account, I just want to have"some fun, I'm bored out of
my mind and I want to save"a plane ticket from
heaven to fly to Las Vegas,"so I just want to sit in
my basement in my underwear"and use Robinhood and
just gamble the markets."Just have some fun, I'm bored."For you, okay, you're self
aware, that's what youwant to do, fair enough.You can probably turn o--You can stop the video, I
don't want to waste your time.The other camp of people,
"Hey Clay, I have a small"account, but I really do
want to become a trader,"I really do want to become consistent,"I want to become good and
this and I want to try to"make something bigger out of it."I'm definitely not here to
gamble, I'm here to learn,"get better and just
develop into a trader."For those people, this is
the video for you and thisis why Robinhood is
actually quite the red flagand offers, one of their
attributes, zero commissionsis a red flag at the same time.And this all came about
based off a suggestion thatsomebody had on one of
my other YouTube videos.So let me first read that and
then I'll break things down.So the comment says, "I
think it is great advice,"but to deter him from trading
all together was silly."I would have turned him onto Robinhood."I think to put 50 bucks
into an account is some"great lessons."While that's going on
he could save and learn."Now right from the get-go
I'm not trying to beat thisperson or call them stupid
because the logic makesperfect, perfect sense.But that is why the market
is so tricky in and of itselfbecause there's a lot of
instances where what makes senseis actually very, very harmful.And this is one of those things.So this person, "Hey don't
tell the person with a very"small account who's new not to trade,"you can at least tell them
to get a Robinhood account."Why Robinhood?Well it goes back to those
zero fees and because thisperson that they're referring
to just doesn't havemuch money.So hey, this person's
saying, "Just have them throw"50 bucks in."So we'll just call that
a small amount, right?I'm not assigning a numerical
value to that becausethat can vary depending on what--That's not how you spell account.I can already see in the
comment sections right now,"You moron, you don't know how to spell."So account, there we go.So you have a small account
and this person's rationalewas hey, get some great lessons.And how are you gonna get great lessons?Again, you fund the account
and then you're going tosave and then learn while
this little part of thecurve is all taking place.So save and learn while
all that is occurring.And again, you're probably
saying and if you aresaying this, "Hey, look," congratulations,you're a very logical thinker.I don't understand the problem.You said they're new, you
said there's no fee so theycan do a small amount because
commissions aren't gonnaeat away at everything and
it's just really small,it gets their feet wet, it
lets them start to learn.But what's gonna happen is
they're just gonna developall sorts of bad habits.Right off the get go when you
don't know what you don't knowthat also includes what should
you actually be learning?Clay, duh, how to make money.That's about as broad of
a statement as it gets.And we'll focus on that,
though, how to make money.So how are you gonna make
money with a small account?What sort of procedures are
gonna be put into place?What sort of things is
this person gonna happen?'Cause I guarantee you one
thing, making 50 cents,making a buck 50, making five bucks,that's gonna get boring in a hurry.And if you think, "No Clay,
I would gladly sit there"and make 50 cents, 75 cents."Well then you are a rare,
rare, rare exception ifyou can say that in your heart of hearts.Yeah sure, maybe a few
trades but after a whileyou're gonna be like,
"Alright yeah, that's great,"let me start to ramp things up."And ramp things up is where
things start to, you know.You're learning so I'm not
gonna deny that you won'tlearn by a small account.But it's certainly not gonna
be great lessons becausethe lessons that you're
gonna start to learn,one of them is just gonna
be holding and hoping.I mean, when you have a small
account one of the areaswhere you're probably gonna
head to and which a lot ofRobinhood people go to is
the penny stock market.And penny stocks, sure
they can be volatile,but in many cases you've got
to just sit there and wait,and wait and wait and you've got to hope.You've got to hold and hope.And holding and hoping
is just not a strategy,especially on penny stocks.Could it work out? Yeah, absolutely.Any of these strategies--Or any of these kind of
lessons could indeed work out,but that's where you
surround yourself with a keyconcept which I'll get to in a second.Another thing, I want to play fast movers.Well why would you want
to play a fast mover?Of course because your account
is small and fast moverscan, they're moving fast so
they can potentially giveyou more gains on a trade.Well that's gonna start
to teach you chasing.Now of course you're not
looking at this as holdingand hoping and chasing,
you're looking at this as,"Hey, I'm trading, I'm
learning, I'm using just a small"amount so I can just get my feet wet."Chasing, not a good habit at all.But, again, if you want to
ramp things up and startto make more than just minimal
amounts, you're gonna haveto play active stocks.But when you're brand
new you don't know how toproperly play an active stock.And that's gonna lead to
chasing, another big thing.Position sizing.Odds are you're probably,
I won't say going 100% ofyour account into a trade,
but a significant portion.And from a risk management
perspective in and of itself,that's not anything else
that you should be doingor building the habit of doing.That is not a lesson that
you want to be developing.But subconsciously you are.You're allowing all these
routines and these habitsto start to develop and,
sure on the surface,the voice in your head
you're telling yourself,"I'm just doing all this to learn."I'm saving right now so I
can maybe buy some courses"from somebody or I'm just
saving until I can get"a bigger account, but
right now I'm just learning,"I'm taking it easy."And while the intentions are
noble, while the intentions areagain, very logical, they
don't make sense in thegrand scheme of things
because all these other thingsthat you're gonna be forced
to do in order to makea decent amount of money,
when you actually try to gowith bigger account sizes
you're just gonna get hitin the face, your lunch is
gonna get eaten in the snapof a finger.And like I was saying
earlier, sure, to be fair,all these things could indeed work.But in the world of trading
and if you listen to mypodcast show that I have
you know that this hasa great chance of developing fool's gold.Meaning you're confusing
luck, randomness, chaoswith skill.And that's the big differentiator,
those lines get blurred.And when those lines are blurred it's--I'm not saying that
habits can't be broken,that would be a bold fact
lie, but it's just sucha headache, it's such a
costly thing to try to undobad habits that have been
formed when luck and skillstart to bleed together.Which it will without question,
there's no doubt aboutit in my mind and if you
think I'm making this up,like I said, I have now over
130 episodes of the podcastso literally over 130 hours
of me talking with othertraders who opened up,
shared about their story,and you can see this right
here is a very commontheme that comes up time and time again.And if you're somebody that
wants to go about thingsthe right way then you've
got to first learn whatyou should be learning.And that comes from systematic education,an educational system
with structure to it.Do I sell education? Yes.Would I love for you to
buy my training courses?Yeah, absolutely.But if you go and decide,
"You know what? I'm not gonna"open up that small
account I'm just gonna save"and then put that into some
sort of structured learning,"and it's not gonna be with you, Clay,"hey that's fine.I'm happy that you're not
gonna fall into this trapand build all these bad
habits because that's whatyou're at a risk of and
that's the major red flagthat comes with Robinhood
is it makes that doorjust way to easy to
open up, of bad habits.Because attentions are
good, it's all logical,but it's just not gonna work out.And like I said I realize
that I'm just some guyon YouTube, I'm just sharing my opinion,but I'll put a link to
the podcast down belowand yeah go and just
start listening to some ofthese episodes and you'll
notice time and time again,we talk about this, you
hear people that go downthis path say, "I just
wanted to start small,"then before I know it I
thought I had everything"figured out so I do
bigger share size or I do"bigger amounts of money
and then I get absolutely"drop kicked in the face."And it's happened multiple
times so there's plentyof data there and if
you've been trading or haveany sort of experience with
trading you know what I meanabout this stuff you've been
there before and you knowthat you don't want to be
developing those habitsright from the get-go because,
while they can be broken,it's a very time intensive and cost,a labor of love, I'll
just put it like that.And labor comes in both
time and money when it comesto breaking these habits.So just don't start them from the get-go.If you are out there trading
alone currently and maybeare in the market looking
for a community to join toassist you in your trading
or to just help you getanother set of eyeballs,
then I do have a privatetrading community where
you can trade alongside meand other experienced traders.So what you see popping
up on the screen right nowis both an information
link, so if you click on theinner circle one that is
going to take you to the pagewhere I explain all the
details of what exactly comeswith the community; both the
chat room and the newsletter.And then the other image that
has popped up is a behindthe scenes tour where you
can see exactly what is goingto be contained within the community.I take you through, like I
said, a behind the scenes tourof everything and that
way you'll know preciselywhat you are getting when you join.So definitely check that stuff
out if you are interestedand thinking about wanting
to join a communityand let me know if you have any questions.
