11 Brutal Trading Truths — Full Breakdown & Transcript

[00:01] And in today's video, I'm going to give you the 10 brutal truths of trading. The very best lessons that I've learned from a two-decade-long trading career, all in today's video. But before I do that, I want to warn you. This is not some

[00:15] cheesy list I pulled off the internet or something that I typed into chat GPT. This is real-world advice that was learned by using real money in a real going to make you feel a little uncomfortable. It's going to challenge

[00:29] challenge the way that you've been taught. But I do promise that if you watch this video, you will never look at trading the same way again. So, having said that, how about we get started with today's video?

[00:43] lessons, I'd like to say something because I think it's important and it will set the tone for the remainder of this video. And here it is. this video. And here it is. You are what you are and you are where

[00:55] you are. And whatever you are and wherever you are, I want you to know it's okay. Whether you're a new trader who's starting out with no money, this business for a while and it's been nothing but a disaster, or whether

[01:09] year after year and you're just at bitter's end and you're ready to give up, wherever you find yourself, whatever country you find yourself in, if you're watching this video today, I want you to know that doesn't matter. The only thing

[01:23] that matters is the very next step you take in this process. That's it. Because the market is the purest form of business that there is. It does not care

[01:35] who you are. It does not care what you did in your past. It does not care where you went to school or what your circumstances are. It will reward those who put in the effort. Now, I started out with a sizable account as I said

[01:48] account and went bankrupt. And I had to start over with just a couple of thousand dollars and I found a way to make it. My wife came from the poorest country in the European Union and started with 7 euro in her bank account.

[02:03] No kidding. And she was able to make it. All of our journeys will be different, but the only thing that should matter to you right now is not where you are, what past. It's what you do next. So, having said that, let's jump right into today's

[02:17] lessons. All right, so let's begin with number one. And that's going to be do not underestimate the power of simple stupid. The amount of information that trades right now and successful winning trades for the remainder of your life,

[02:31] it's probably a lot less than you could possibly imagine. You don't need dozens your charts. You don't need to chase the market. You don't need to know everything about the economy and

[02:44] monetary policy and you certainly do not need to have an answer for every little thing that goes on within the marketplace. All you need to become a marketplace. All you need to become a long-term profitable trader is just one

[02:57] simple edge. That's it, guys. Just one simple edge within the entire market ecosystem and you can get whatever it is that you came for because that one little simple edge, that, that's where you're going to live. That's going to

[03:10] you're going to live. That's going to become your domain and you will become the ruler of that domain. And every day when you wake up, you are going to hammer on that edge over and over and over again from now until the end of

[03:23] time. And anything that goes on that does not pertain to that edge and what you're doing, you don't need to know about it. It's none of your business. It's just noise and nonsense. I have made millions upon millions of dollars

[03:36] trading over the last two decades doing one simple layup trade every single day of the week. And after 26 years in this business, there's a whole hell of a lot don't know about. But guess what? I don't have to and you don't either. Now,

[03:53] one simple tip that will help you keep things simple stupid. If you're a new trader, I highly suggest you stay away from indicators in the beginning. Start with understanding price action, support resistance, or something easy like the

[04:07] box theory. Then once you've mastered that, you can move on to indicators. there who have experience, but you're not consistent. Start to remove some of

[04:19] the noise that may be on your charts. Get back to the basics. Understand how stocks and assets move, understand how price action works, understand support resistance, and understand the box theory. But always keep in mind, stupid

[04:34] simple will always win in the markets. Number two, focus on trading just one number one where you will become the ruler of your domain, you'll also become

[04:46] ruler of your domain, you'll also become the ruler of mastering a specific asset or a very select amount of assets. And the reason for this is because the same traders tend to trade the same stuff over and over again. And those traders

[04:59] have a specific habit and behavior to them. And once you can add that nuance to your strategy, you start to move to a whole new level. Now, this is also beneficial for the newer traders and for the struggling traders because it

[05:13] narrows down our focus. Instead of us scanning through hundreds of stocks and chasing those shiny objects every day, we've just got one singular focus going in one singular area. And when we combine that focus with the nuance, then

[05:27] we can really take ourselves to the next level. Now, start with one asset and then slowly add maybe one or two. But you can live the rest of your life trading the same three to four instruments over and over again. Keep it

[05:41] boring, keep it simple, and trade just one asset. Number three, screen time is your BFF, your best friend forever. You need to get in front of that screen as

[05:53] much as you possibly can. My mentor would always tell me the market's a lot like a movie or this is the philosophy. If you go and watch a movie, you see it there's all these cool parts." Maybe you explain it to somebody. But if you go

[06:06] back and you watch that movie a second time, you realize there was an awful lot that you didn't catch the first time. Now, imagine if you sat there and watched that movie for 2,000 straight days. You would become the

[06:20] master of that movie, am I correct? You would know where all of the mistakes missed lines were, and you'd be able to recite the whole thing in your sleep. And that's the point, mastering these singular things. It's very important.

[06:35] today, is all of these brokerage accounts have some sort of playback started trading. You actually had to be present. So, the good thing is when you a free moment, instead of watching your favorite series on Netflix or some other

[06:51] sitcom, get in front of that screen, watch that one asset, and continue to watch it over and over and over again. And you will be surprised on how quickly your eyes can pick out patterns, how quickly your brain can pick up on these

[07:06] pieces together and that will take that strategy to another level. So, screen time, it's always going to be your BFF. Number four, position size is also your BFF. If you're a new trader, if you're a struggling trader, you have absolutely

[07:22] no business whatsoever putting real sizes down on the table. I mean, just think about it for a minute. Why would you risk your hard-earned money when you don't have a command over your strategy, you don't have a command over the assets

[07:34] you trade, and you've never at any point throughout your trading journey showed any type of consistency whatsoever. It doesn't make any sense at all, right? And look, I'm not casting judgment because I did the exact same thing

[07:47] 20-plus years ago. I put big sizes down on the table when I didn't know anything about trading and that led me to being blown up or blowing through several accounts. And when you really think about it, traders don't blow up because

[08:00] they made a bad trade. Traders blow up because they over-leveraged on a bad trade and they didn't cut the bad trade and they continued to over-leverage on the bad trade until they ran out of money. So, if you can just control your

[08:13] money. So, if you can just control your position sizes, you're going to be okay phase. Now, a lot of you might be asking, "Well, what's the right kind of position size?" Your position size needs to be as low as it needs to be to keep

[08:28] you from over-fixating or having any types of anxiety whatsoever about being in that trade. So, for example, let's say you take a 100 share size position of something. If you're nervous, if you have anxiety, if you're constantly

[08:42] eyeballing that trade over and over and you're worried, it's too much. You got to back it down. Take it down to 70. If you have the same symptoms, take it to 50. If the same symptoms, take it to 40, 30, 10, 5. Go as low as you need to go

[08:58] where you are not worried about the position size that you have. This will help you stay in trades longer, this will help you focus on your trades, and it will help things come together much cleaner for you. So, remember, position

[09:12] cleaner for you. So, remember, position size is also your BFF. Number five, do not focus on making money, focus on making good trades. Now, I know this is kind of tough to do because we all come into trading to make money, but this

[09:24] cannot be your main focus. Your main focus either needs to be on the trade you are currently in or the trade you're about ready to make. Anything outside of that is irrelevant. Look at it like this. Let's say an NFL football team,

[09:38] for example. They don't come out and try to score on every single play. What they try to do is just make one good play. And if they make one good play, they try to make another good play, then another good play. And if you can tie enough

[09:51] good plays together, you should be rewarded with what? A touchdown. And that's trading. You make one good trade at a time. Then you try to make another good trade, then another good trade, and the culmination of those trades should

[10:04] get you exactly where you need to be financially. Now, here's a quick tip on something that helped me understand this concept a little bit more. And this probably should have been a tip on its own. And that is at no time whatsoever

[10:16] during the course of a trading day, should you ever look at that P&L that you have. Never ever look at your P&L. And here's why. Because at some point in time, that number that you see, not only is it not going to be nice, but the

[10:30] biggest problem is one time that number is going to cause you to do something emotionally. It's going to cause you to detach from the trade that you have at hand, and it's going to cause you to make a serious mistake. At some point

[10:46] that number will influence you, and you don't need that. So, at no time through the course of the day. And I'm sure for most of you that should help. So, remember in this part, don't focus

[10:58] each day on trying to make money. Just focus on trying to commit to your process, follow your rules, and follow your strategy, and just focus on one trade at a time, and you'll get a lot farther than you think. Number six,

[11:10] learn to fall in love with losing. Losing ain't your BFF here. lover, and it needs to be your lover because you're going to do a whole lot ever thought you were going to do. But, I want you to know that's okay. I've

[11:24] part of the game. However, the reason I want to talk about losses is because there are two types. One of them is acceptable, the other is not. An acceptable loss is something that's just the cost of doing business. You saw the

[11:38] setup that you needed to see. It was an A+ setup. You followed your rules. You followed your plan. It was just one of those unfortunate random events of the market that caused you to be stopped out. Again, part of doing business. That

[11:50] is okay, and I don't want you to stress over stuff like that. However, the second loss is totally avoidable and should be removed. The unacceptable losses. This is revenge trading, emotional trading, blindly following

[12:04] other gurus or whatever it may be. There's absolutely no place in this business for that kind of stuff. I want to give you something that helped me overcome this and understand the concept of losses and taking losses so you can

[12:17] enjoy the rewards. I started to look at losses as part of doing business like I just recently mentioned. So, for example, let's say I had a 9-to-5 job in a corporate environment. Well, I would have to purchase a wardrobe so I'd look

[12:30] nice when I went to work, right? Well, the purchase of that wardrobe is a loss, but I must take that loss in order to get to job and get my paycheck. I would still have to find some transportation to that job, whether I'm taking a bus, a

[12:44] train, or putting fuel in my car, but whatever the expense was to get me to that job would be a loss, but I have to take that expense so I can get my paycheck. Now, the goal here is the expenses should be lower than what your

[13:00] trade-off. But, in everything in life, it's risk versus reward. There's a have to give up in order to get some sort of reward. Trading is no different. Just understand that there are two types of losses. There's the acceptable loss,

[13:15] but what cannot happen is you can't have those moments where you have lapses of concentration, lapses of judgment, and you take those unnecessary losses. So, losing, accept that it's part of the game, and everything's going to be okay.

[13:30] Number seven, if you don't rank, you won't bank. Every trader needs some form of ranking system to help them quickly establish the level of opportunity that two charts side by side that have the exact same technical setup, the exact

[13:44] same technical signaling, but there's a good chance they are not the same opportunity, and that's important. Because the goal for us as traders is to be fully leveraged or stomaching as much risk on our high probability winning

[13:59] trades. However, if we don't have a ranking system, we're not going to know the difference between a high probability trade and a potential losing little bit of time from your end because you are going to have to make trades and

[14:13] understand what a winning trade looks like and what a losing trade looks like, but you need to start ranking those trades and start studying the winners and studying the losers. Now, quickly, something I use is a tier one, two, and

[14:27] three type of method. So, for example, a tier one trade for me would be something that's most likely to have an 85% win rate or higher. Now, there's no guarantee that trade will work, but when I see that set of circumstances, that's

[14:42] a must take trade. And that trade normally works out for me. Therefore, I should put as much risk on that play as I possibly can. A tier two play would be sort of a play that I have a high degree of conviction. I like the setup, but the

[14:56] opportunity just isn't quite the same. Something might be lacking. Something might not be lining up, but I feel pretty confident about the trade. This is probably something around a 70 to 75% win rate for me. I still want to take

[15:09] the trade, but I don't want to over-leverage on that trade. And of course, a tier three play would be something that I really don't mess around with anymore, these cheap plays. These are something that in the past I

[15:21] felt like I wanted to be a part of. I wanted to try out, but most of the time they were just slightly over 50/50, and as time has progressed, I found no need and wait for the tier ones and tier twos. However, if I never would have

[15:34] created that ranking system, I might have never known the difference between them, right? So, as of now, start ranking those trades and start don't rank, you're just never going to bank. Now, this will help me transition

[15:47] into number eight. Because you'll never be able to successfully rank and bank if you first do not journal your trades. Now, there's a lot of different opinions not be in their journal. And through time, what is and is not in there will

[16:00] in fact change. But, here's what I want to say about journaling, or what I feel is the most important part. I feel as traders, myself included, are a tiny bit delusional. We sometimes think we have a problem, and we look at every losing

[16:14] trade as a bad trade. Maybe it's not, but we feel we have a problem in a certain area. But, unless we document it, we're never 100% sure that's the real problem. This was my experience. Because when I started trading, I lost a

[16:28] ton of money, and I lost all the time. I naturally thought I was just a terrible stock picker, that I couldn't distinguish opportunity. But, once I I was trading, the time of day I was trading, how I felt about it, the

[16:42] strategies and everything else I was using, I realized that was not my using, I realized that was not my problem. My problem was that 60% of all the losses that I took never needed to be taken. I was panicking out of the

[16:56] trades. So, I didn't have a stock picker's problem. I had an emotional problem, but I never would have known that was the problem if I didn't journal it. Now, I also needed this to help reinforce my trading. Because as I began

[17:10] losses, and right when I was ready to push that button, I'd pop up that journal, and there was the data. The data was telling me that, "Dude, if you cut that position, this this is a mistake. This is 60% chance that's a

[17:24] mistake." Again, you must journal all of your experiences. Now, the rule of thumb And luckily for the new generation, there's all these great free tools out there online where you can just upload your trades, and it'll give you every

[17:39] little analytical detail. And every one of these are important, and you need to go through each and every one of them. But, another tip that I like to do is each and every week I begin that week with looking at something I would

[17:51] personally like to improve on. Whether I want to prove better on my entries, whether I want to be more patient on my exits, whether I want to increase my size or lower my size, and I make that a prime part of my journal. So, remember,

[18:04] to get to the next level, you will have to journal every single thing that sure that you're taking care of your life outside of trading as well. But, start journaling and documenting those experiences and looking for each and

[18:18] improve. Number nine, keeping with the theme of journaling and ranking and banking, every trader needs some set of rules in place. Now, rules are different than journaling. Rules are in place to protect us from us, from us unwinding

[18:34] to be because that's where self-destruction is, okay? Now, this is very simple. What I like to do is this. I have rules in place that if I lose, let's say for example, three trades in a row, I start to back off, maybe even

[18:48] take a day off. Because whatever it is I'm seeing, I'm not seeing it correctly. think I'm not doing something wrong, again, that's why they're rules, I have those in place because I am doing something wrong. My strategy is not

[19:02] coinciding with the market. I need to take a step back and not throw money at the problem. More importantly, I have something that I've referred to in the something that I've referred to in the past as a GTFO number. Get the F out.

[19:15] When that number gets hit, you're gone. You must walk away. Don't care what the technicals are. You've hit max loss. You are max risk. You're done, okay? This is more important things in this entire video. Because the single greatest enemy

[19:30] video. Because the single greatest enemy in trading is us. It's in the mirror. We are our own worst enemy, and we must protect ourselves from ourselves. So, protect you from losing trades, and and definitely rules to protect you from how

[19:44] much you are willing to lose. Because trust me, it's easier to step back, calm yourself down, then come back with a approach. Number 10, find yourself a mentor. Whether that's finding an individual

[19:57] person or joining some sort of a community, a mentor will get you to your goal faster than you ever could imagine because only a trader can understand another trader. Only a trader could understand that you put 50 hours of work

[20:12] into a certain trade, you waited for the perfect setup and as soon as you push the button, it smoked you out. Only a trader can understand exactly how that feels. Now, I know that most people on the internet feel that every chat room

[20:25] or everybody that offers some sort of a service has to be a scammer. Certainly, there are people out there, but there's a lot who are not. But, the reason that reason that people think that way is because they go into these communities

[20:40] with the wrong mindset. They're going into these communities to try to piggyback on alerts, to try to get involved in some big trades. That's not why you're there. You are there for the individuals experience. Again, only a

[20:54] trader can understand another trader. You need these people to hold you You need these people to hold you together when gets bad because that's what I remember about my mentor. He didn't just teach me how to trade, he

[21:06] taught me how to make trading my life. He held me together when I was ready to quit. He helped me on those days I was literally in tears and couldn't stand to even look at stocks or any other form of instrument. That's the things I remember

[21:20] the most was the the days that he helped me when I was down and I felt worthless. And that's what a community is for. It's for a group of people who share the same common goals and look out after one another. So, somewhere along the line,

[21:36] whether it's through us, somebody else, it doesn't matter. Find someone that you align with that can help you take that next step. Now, speaking of steps, that'll bring us to our final step today. Number 11, the last step will be

[21:51] the hardest step you take. At some point, you will have obtained all the knowledge you possibly can about trading. Enough people will have helped you, put you in the right position to be successful, but the final step between

[22:05] successful, but the final step between being average and being elite, that step has to be taken by you and it will be the hardest step that you ever take. There are no shortcuts here, there are no easy answers and no one can help you

[22:19] get through that. And you will find yourself, if you're not already there as a trader, at the proverbial fork in the road. To one side, it's the easy out. Yeah, just quit, make up an excuse, trading wasn't for you. But, to the

[22:32] other side is that final step. And beyond that final step is what you got into this trading business to achieve in the first place. But, no one can help you with that. Now, for each and every one of us, whatever that final step is,

[22:46] it's different, right? For me, I had a lot of insecurities, but my insecurities were created from my poor trading habits in the beginning. But, nonetheless, that final step was up to me. No one could help me with that. I had to come up with

[23:00] the internal strength to cross through that. So, on that note, guys, I want to hope you found some value out of it. Right before I sign off, I want to remind you that my wife and I created now our brand new live trading room

[23:14] called the Rumors Squad. Every day, we are trading live on screen. So, if that's something that you're interested in, we appear to be the mentors that to that level that you need to be as a trader, I'll put the link down there in

[23:28] the description. Other than that, again, let me thank you for watching today's let me thank you for watching today's video. Take care, trade well, cheers.