Manage episode 286358778 series 2134820
Welcome back. Do you remember a song I don't know, when it came out? It was I think it was in the 60s or 70s or something and it goes something like one is the loneliest number one is the loneliest. Now I apologize for my singing. And I think I was off key. And I don't even think that's how the music goes. The melody goes to the song sounds probably off on that too. And I don't even remember what they were singing about. But the message of the song to me is that yes, one is the loneliest number. I think it was about something that guy was alone, he lost his girlfriend. But the point is, for me is that yes, when you have only one of anything in your life, you don't really have a backup plan. Right? So if it comes to income, you only have one source of income. If you lose that source of income, you're kind of stuck up the creek without a paddle, right?
And so I was reminded of this today, I got an email from one of our members, and I wanted to read it to you, because he just got laid off. And he wants to know how he can replace his income with trading. It's crazy that we have so many people in this same situation, it's great that when you have a job, right, you have an income source, you want to get into trading, you don't really like the job or you really like your business or whatever you're like, oh, man, I wish this trading thing could work out, I could get it and you know, you you invest in one of our programs, and then you don't really follow through because life gets in the way. And I know how that goes. You know, it's really the why, right? You're why about trading wasn't strong enough until something happens. And he jars you away. You know, so you you might be driving along the street, you're not really paying attention to the road, and then all of a sudden the car comes out of nowhere almost hits you.
And after that you're like the best driver all the way home. You know, just jars you in. So this is a normal occurrence. But the older you get, or the longer you've been in a job, the chances of being laid off are increasing. Unfortunately, it's just the nature of the work ethic. And so you really need to have that backup in place. And unfortunately, for a lot of people, they're not ready with the backup plan when they get laid off. So here's Todd's email, says:
Hello, Allen, I'm going through a live change your opinion, I'm currently a member of your programs joined almost a year ago have not been able to devote enough time due to work and family obligations. (Totally understandable). I'm an engineer and work in the construction industry for a health care organization. I read your book, listen all your podcast sessions at least once while going to work. Oh, thank you for that. Last week, I was laid off from my job. And now I'm trying to decide my next moves. My wife works full time and we have funds to carry us along for a couple months. But I will need to replace my income fairly soon. and relieve the stress on my wife. As an aside, yes, that's very, very, very important. Because you're not, you know, when you get laid off, you're not the only one that's suffering, the whole family suffer, especially the other spouse, because that person has to carry the load, right? They're not used to carrying the full load. Now they have to carry the full load.
And then they also have to worry about you and your mental status and the pressure on them you also have to worry about so you don't want to add divorce to your problems. So be very, very careful about how your spouse is handling the situation. Make sure you give them enough time, enough attention to leave their pressure, take some of their work, you know their homework or whatever their work is off their plate while you can. And if you're looking to go into trading, discuss it with your spouse, explain what you're doing with them. So they don't think that you're just sitting at home doing nothing all day playing with computers, watching TV. Okay, so that's a really important point. So let me continue. He says I'm trying to decide if I should jump back into the construction rat race again, so I can draw salary and benefits, assuming I can find another job fairly quickly. Otherwise, I would really like to immerse my time into your programs and start trading. I realized I have to get up to speed and take some time to learn your methods and develop my own trading plan.
My main concerns are being able to learn your program soon enough, and being able to replace my income, I was making 120,000 a year, but need to replace approximately 5000 a month take home pay, I plan to start paper trading this week and scale up as I learn more eventually, I will have $250,000 in capital that I could scale up into an account, how realistic is it for me to replace my income? With the size of an account? I would appreciate your opinion in the comments. Thank you.
So that's the email, I want to read to you what I wrote to him, and then I want to give you my thoughts on this and a little bit going a little bit more detail. So I told him, you know, hey, I'm sorry that this happened to you very, very sorry, my first thought was, hey, you need to get out of where you are, I know where he is, he's in a different state where things might be slowing down. So I'm like, Hey, you know, get out of there, get your butt here to Texas, because we can't find enough people to do construction. But that might not be possible.
So I don't think the issue here is if you can generate 5000 from 250,000. The issue is how long it will take you to get there. And from what you wrote, this is me talking from what you wrote, it would be in your best interest, I believe, for you to get out of the job for now, as a fail safe. Okay, maybe not a full time thing, just something to bring in some guaranteed capital and keep the health insurance if possible, because that's a big concern for a lot of people.
Trading when you are super stressed out, and you have to win is super hard. Trading already is very hard. But doing it with one hand timing on your back, it's much harder, while you are looking for the second job or even after you get the part time job, spend three to five hours a day on your trading. Do that with the courses and programs you already have, you should be able to have the skills to do it full time in a few months. But having the skills is different from being emotionally ready. So you're going to have to overcome that aspect as well. So if you can start with a smaller goal, say 1000 a month on $100,000 account, that would be a great place to start.
And then you can scale it up from there. And then I told him because he's in the programs, I want to see you on the coaching call on Thursday, I want to see you and your paper trades in our groups, I want you to posting there, I want you to get critiques, I want you to get my opinion, my advice. And I want you to send me a bit I told him, Hey, I want you to send me your trading plan, and a concrete plan of how you expect to get to 5000 a month, including your asset allocation. And this is covered in whatever programs that he's already part of, you can do it. But having a job would relieve a lot of the pressure. But even with a job, 3-5 hours a day learning and trading. Because enough is enough screw these jobs, it's time to learn how to make it from trading.
Okay, so that was my email to him. You know, you can let me know if what you think if I gave him the right advice or not, really, this brought me back to my situation. And how I got involved in trading full time was also being laid off. And I eventually ended up losing over $40,000 of my wife's money before I got serious turned it around. And I don't know if you know my story, but pretty much that was my story in a nutshell. But really, I was doing all kinds of training and losing money at it.
Until really I sat down with my wife and we had like a, you know, come to Jesus moment and be like, Alright, I'm going to give myself three months, if I don't figure this stuff out, I'm going to go get another job. And at the end of those three months, I don't think I've ever shared this. But at the end of those three months, I still wasn't making money, but I wasn't losing money. So that to me was a huge step. So if I'm not losing money, then I can tweak the results I'm getting and start making money. You know, I've overcome the major hurdle of screwing up.
Now I just need to screw up a little less, and fix it and start winning and start doing the right things eventually took a while for me to make a full time income from trading. But even for the person who sent me this email, that's not his immediate concern. Right? He was making 120. Now he's trying to get up to five, which is a little bit less than he was making full time. I'm sure even if he can get to four, he would still be happy on the size of his account, it's totally doable. If he had the experience, if he had the knowledge, if he had the strategy. You could do it right now. But that's not where he is yet. Right. So the question really is how fast can you start trading for a living? So I have a few notes here. Number one, the thing you got to understand is that the stress can be overwhelming.
So if you have to win like if you have if you say I'm going to put on these trades and from these trades I can make $5,000 and every single one of them has to win in order for me to pay my rent, send my kids to school, get the gas in the car and eat, that's very, very stressful, you are not going to win, you're not going to be able to. Okay? trading is trading, there are losses, it's just the nature of the game, every trade is not going to win every month, you're not going to win. So if you have to win every single month, in order to pay the bills, it's not going to work. Eventually, there will come a month where the money's not there. And then what happens? Well, now you're taking out of your trading account.
So your trading accounts getting lower, lower your whatever you make all your gains, you're taking it out to live on all your losses, whenever you do lose money, you're still you're taking money out of the account to survive. So eventually, your account is going to get smaller and smaller, it's never going to grow, unless you're making a lot more than you're spending, which is going to be hard to do, especially in the beginning. Right? When you are desperate to win, what happens? You take more risks. Unfortunately, that's what happens. You don't play conservatively. You take more risk, you do a little bit more, because you're like, yeah, you know, you justified and you allies in your mind, and you come up with some justification to take more risk, even though in your gut, you know, you should. And what does that do? Well, that gives you ulcers, that gives you high blood pressure that keeps you up at night.
So you can't sleep and it ruins your mental health, it ruins your life, it ruins your quality of life, you'll gain weight, all of this stuff, you're not going to eat right, you're not going to exercise it, it's just a it's a spiral going downhill, and one that you really really do not want to be on unless you totally have to. That's one of the reasons you know, get a part time job. Even if you don't get a part time job. Get a some you know, right now there are so many companies out there that are looking for like the freelance type people, you can drive for Uber, you can deliver groceries, you can deliver food, and it doesn't have to be a full time thing. You can do it when you want to and stop when you want to. And there's no shame in it. Okay, that's the one thing a lot of people have to overcome, you know, driving for Uber, oh, my god, no, I would never do that. I'm too good for that. No, you're not. Right.
What is the end goal? What is the Why? The Why is to get off the rat race, to get off the hamster wheel, to be able to trade for a living and have the life that you deserve to eventually hopefully get your wife off of her job too if she wants to quit her job. Exactly right? So don't feel that you are too good for a part time job no matter what it is, as long as he's bringing them onto the table. Money is money. Green is green. Right? It pays the bills, when you also have to win, the stress, like I said can be overwhelming, you're going to feel worse about yourself, you're going to feel horrible about yourself when you lose, and that's part of the game, losing. But when you feel like you have to win, every time you have a losing trade, the blame is going to be on you, you're going to place the blame on yourself, I screwed up. I didn't, I didn't see that I didn't read the chart, right, I picked the wrong stuff, I picked the wrong strategy. And that's going to lower your self esteem, it's going to lower your confidence in yourself. And when you do that, it's just like a, you know, like a set of stairs going down. You do it a little bit and then gets worse, and it gets worse until you hit the bottom and then you just give up.
And that's not what we're trying to do. We try to pick you up, we're trying to move you higher instead of bringing yourself lower. So, unless you absolutely absolutely have to, I would not suggest for anybody to put their back to the wall in this situation and saying, you know what, if you got to eat, you got to win on your trades. That's the wrong way to do it. That's the wrong way to trade, especially for the long term is or growth. The second thing we're gonna say is that it takes time to trade through different market cycles. So we got bear markets without bull markets, we got recessions, depressions we had up, you know, growth. We have now we have pandemics that we need to deal with. We had a tweeting president that we had to deal with and uncertainty about that all the time. There's different market cycles.
And so when you think about trading for a living, you are thinking about what the market is doing right now. And as I record this, the market has been moving much higher. It's been moving it artificially, it's being inflated, that's not gonna last. So right now yes, you can put your money in something and have it go up above it, you can take money out and survive up that. How long will that last? If it changes, then what are you going to do that if you don't have the skills, so you need to develop the skills of trading through a bull market, bear market sideways market really fast crazy up and down roller coaster type market and the thing is, if you are trading for a living, and you don't have a cushion, like if you don't have other sources of income, or you have to win a certain amount, and you have to push the limits, you don't have the luxury of not being in the market all the time.
Actually, no, I'll say that, again, you don't have the luxury of being out of the market, when you shouldn't be in it. Because times happen when it's not a good market to be in, when things are too volatile.
When they're too crazy, when there's too much unpredictability and uncertainty, those are the times when we as option sellers, need to be on the sidelines, and just watching the clown go by, right, which is watching the parade go by, wait till things calm down, and then we get back in. And that's one of the beauties of selling options is that we go on a cycle of a cycle basis of month to month basis, expiration expiration, we don't have to be in the market all the time.
But if you're trading for a living, and you're doing it on a limited amount of capital, so you have to extract a certain amount every month, you have to be in the market. And that can also cause you big losses, because if you're in the market at the wrong time, or you don't know how to handle the market when it switches, then that could cause you a big gain of your chunk of your portfolio.
And then again, the smaller portfolio you have, the more stress it is to make to make your nut to make your amount of expenses that you have to come up with. Right. So those are the thoughts I had. Now I have some notes here about how to actually do it, what are the steps. So you take all that I've told you into consideration, you know, plan that if you're thinking about switching to quitting your job, or if you've been laid off, and you want to trade for a living, take all that stuff into consideration.
Okay, now, here are some steps that you can take number one, I want you to pick one or two strategies to focus on the ones that make the most sense to you, not 100 different ones, we're not the goal is to get as fast as we can to make our expenses. Right? The thing that works the best for you. And if you've been trading for a while, go through all of your trades. Go through all your history for the past several years, what worked for you.
What makes sense to you what seems easy to you? Now's not the time for you to figure out the nuances of Elliott Wave, you can learn that later on right now we need to put money on the table, right, we need to put cash in our pocket. What is the easiest, fastest way to do that? To me, I think it's selling options.
Number two, have a small amount originally, and then scale it up. So if you notice in the email, I told him, you know, not, I don't have to try to make 1000 on $100,000 account, he'll eventually he says he has eventually like 250 I'm not I don't want him to risk the whole 250 when he doesn't know what the heck he's doing. But if you can take a smaller portion of that, say 100 and make 1000 per month as a goal originally, that's 1%, that is doable. That is confidence building that is hey, I made money. I'm successful. I'm consistent. I'm profitable. That's the goal. Right. And though that's not his eventual goal, that's not a long term goal. But it is a current goal, I think you should start small, hit your goal over and over again, build up that confidence, build up that muscle memory that you know exactly how to put the trade on, what to look for, how to manage it. And then you can scale it up, you can add contracts, you can add more trades of the same strategy in different stocks or whatever. But you start small and you start hitting it and getting hits, hits after hits after hits, wins in your belt confidence, then you start scaling. So you're not going to go if your goal is 5000 a month, you're not going to you're not going to try to hit 5000 your first month.
Unless you've been trading for a long time and you know exactly what you're doing. You're going to start small, you know, 1% 1000 on $100,000 account is doable. Very, very doable. Then, once you hit the 1000 Okay, great. I've done that a couple of months. Okay, now I'm gonna try 2000. Now what I can do is I can just repeat, rinse and repeat what I've already been doing, maybe with a little bit more capital, right, I can take a little bit more of a risk. And I'm not risking, hopefully, you're not risking the whole 100,000. Right, whatever strategy you're using, but you can do it with a little bit more. And so you can get to 2000 and then she can get to three and four, five. Okay, at that point, maybe think okay, five is the limit 5% a month is a is really hard to eliminate for me, I can't do it. That's when you can add more capital to the account, let it grow. And then it goes back to being easy. Okay. 1% is easy. For some people 5% is too stressful.
So then you need more capital so that you're only making 1%. So now eventually, if he has $250,000 and he needs to make 5000 then all he needs is 2% if he can learn how to consistently make 2% on a smaller amount like, let's say 100,000, then when he puts in more money and he gets 250,000, he can easily make 2% on the 250. Because it's the same thing. It's the same trades, it's just using bigger knowledge. Maybe it's more spread, maybe it's more contracts, maybe it's instead of two stocks, or three stocks, this four or five stocks. But it's the same strategy, the same trading plan, the same system, just done with bigger numbers. So that's why I want you to hit small start off, and then you can add more money, or you can grow and scale from there.
Number three, just like I told him, in the email, three to five hours a day of learning, of trading, and back testing. So the trading, not gonna take you long, right? I mean, yes, you're going to be sitting in front of the screen, you're gonna be watching all the numbers go up and down, and the charts and the candles and whatever you're gonna be watching, up and down, up and down the daily ticks, you move them up to CNBC, or the Fox Business or whatever, on all day, we'll be watching all that stuff, because you have nothing else better to do. Do you need any of that stuff? No. Do you need some further screen watching? No, what you really need to be doing is back testing your strategy, putting on as many trades as you can as fast as possible. And getting that experience getting that no-how figuring out what went wrong. Why did go wrong? How can I avoid that in the future. Now the learning aspect is not as hard as you think it doesn't take as much time as you obviously do.
But that will not take you three to five hours a day, for months on time on some hedge, right, it takes a small amount of time to get the basics down, takes a smaller amount of time to figure out the strategy, what takes the bulk of the time is to do it over and over and over and over and over and over and over and over again. And that's why you have the backtest. Because right now he cannot afford to do it real money every month after month, he needs to do it right away, he needs to get experience under his belt right away. And you do that with back testing. So one of the software's that I prefer is option Explorer, it does cost some money, you can get a two week trial or trial or something like that, you know, if you're not working, you sit in front of that screen for six hours a day, five hours of it should be a back test. I mean, you do hundreds of trades in a day, if you sit there for six hours or seven hours or eight hours a day, literally hundreds, that is what you need to be doing. The other thing I have is yours, you don't want to be listening to idiots. I'm not gonna give you any names.
But you only listen to people who have done what you are looking to do. Okay, because I know there are Facebook groups out there. I know there's plenty of YouTube videos and YouTube channels and whatnot, everybody tries to sell you their next course and their next prop. If they are not making money, if they don't have results that you can see, they don't have hundreds of customer success stories. Don't listen to it. Okay? Because that's going to take you down the wrong path. We need to focus, we need to dial down, fix one thing that works, and do it over and over again and learn. And you're not going to learn from a group, you'll get small pieces of advice, you might post a trade. And you'll get some people that says Oh, hey, you know, check this out and check that out.
That's great, that might help you. But if you do the back testing, you'll figure that out yourself. Because you never know when you get advice from somebody online, what their experience level is, how much they know, how many trades do they put on. Because a lot of times people that are posting comments in these three groups are people that don't know anything. And they have all day to sit around and give other people advice when they're not doing anything themselves. That's the problem with free groups. Now, this fellow, luckily, is in our programs. And we have groups of people who have been through our training.
And so they know our methodology. And so if he comes and post something, a question in one of our groups, he's going to get a real answer from somebody who knows what they're talking about, or from me, or one of my staff. And that is invaluable. Right? So it's amazing that he has done this already. He doesn't have to pay for it, because he's already in the program. So he's going to get that where he can take something and say, Look, this is what I'm thinking about doing. Can you critique it, and we will critique it and find out what's going right and what's going on. That is invaluable. Okay. And then the other thing I have is yours, you want to pay for quality information from somebody that you trust, and you have access to. So this kind of goes back to what I said. There's tons of things out there that you're going to see about stuff for sale.
People talking about "Oh, you're gonna make a million dollars overnight". Oh, you know, you 500% Oh, we made 500 trades in a row that weren't most of it is all bull crap, unfortunately, and they get away with it. So if you're going to buy something if you don't have a course or If you don't have a program that you're already part of, I think you need to pay for quality information, you pay for something seven bucks, you pay something for 100 bucks, you're going to get what you pay for. Even unfortunately, now, some people charge you 2, 3 or 5,000, and it's junk. But if you don't know, if you're just starting out, you know, the library is a good place, books are a good place. And I would even say, I mean, this podcast, I try to be as real and as honest as I can. Other podcasts are not. So you know, I'm even hesitant to recommend listening to podcasts.
YouTube videos are wolves kitchen, any idiot could put up a YouTube and put up a website. So have you figure if you're watching, or if you're going from webinar to webinar, you're gonna realize that most of them are jobs that people don't know the type, but they're really good at marketing, they're not good at trade. You know, and you got to really pay for quality information from somebody you trust, and they don't just have access to, you know, our programs, they have access to me, because that that's like super important. Right? If you cannot talk to somebody who's actually doing what they're teaching you to do, then you're on your own is no better than than a scammy YouTube video.
So you really do need that access. But sometimes you have to pay a little bit more and get it. But if you can get access to a full time trader, or somebody who's doing this, somebody who's been through all the different markets, that is invaluable. And so for this fellow, I'm urging him that I want to see him on our coaching calls, I want him asking questions, I want him to post in the group and get responses from myself and the other profitable traders. And I gave him homework. You know, if he had not been part of our program, I would not be able to do that. But as a customer, it's like, dude, I want you to succeed, you showed me that you have an interest in succeeding. Now, I'm going to make you do it. Now you have access to me. So do this work. Right? And hopefully he does. And hopefully I'll be able to hold this in and help him through this.
Number four, on my list of how to do it, you need a job. It's not full time job part time job, just to ease the stress, to increase your income. And to relieve the pressure on yourself. And what I would suggest, if you're in the shoes is whatever income you make, from your part time job, I would suggest you take that money and give it to your spouse, don't even keep it, don't pay your bills with it, let her handle all that. Or you just take it and give it to your spouse, say look, honey, you know, this is the money I made from my Uber-Driving. I'm gonna give it you give it to you, anything I make for my trading, I'm gonna take it out, and I'm gonna pay the bills with it. But here, I need you to have this so that you know that I'm not leaving you all alone in it, you are not in this by yourself. Because like I said earlier, you need to pay attention to that person, your spouse's mental status as well.
Number five, keep doing what's working and tweak to improve your results. So maybe you're doing maybe you've tried 100 different strategies in the past, find out what's working. And when you find what's working, keep doing it. Don't go away from it, don't deviate, just do what it's working over and over and over and over and over and over. The thing that we have, as human beings, we have this tendency, if something starts working, we think that "Oh, hey, I can make this better". I can improve this. Oh, let me try it this way. Oh, what if I do this? What if I did that, that's great. You do that later. You do that after you're making money. So if you join one of my programs, and I give you a trading plan and say, Look, do this, because this works for me. I want you do it exactly like it says, only until you're profitable and consistent and making money and you have oodles of money in your billionaire, then go play with it and change it and try to fix it and make it better.
Until then do what it says because it's been working. If it's not working, I'm not going to sell it. Or if I tweak it, or if I change it, because I'm doing it every day. Then I'll go ahead and change it until you look I changed it.
So you don't need to worry about that's like one thing off your door but don't try to fix it. It's not broken. don't fix it. Just do it over and over again. Shake was working and just repeat. rinse, repeat. rinse, repeat, rinse, repeat. You're gonna get bored on your mind. Just do it. And then number six, no gambling because you don't have the extra cash. Yes, maybe you'd love to put some money in Bitcoin because it's going to go to a million dollars. He that's wonderful right now you can't afford right now we're working on income. That's what we're talking. We need to get income up.
We need to get you to a point where you're self reliant. After you have enough money, then yes, you can go buy a Rolls Royce or or a second house and do it on Airbnb or whatever you want to do. That's fine. For now, there's no gambling. There's no you know, high flying stocks. We're not buying calls or puts or whatever. We're not shorting. We're not buying Bitcoin or any other crypto or whatever that's gonna go to the moon tomorrow. We're focusing and focusing on income, doing the one or two strategies, doing them over and over and over again, trying to hit our goal, our small goal originally, and then increasing it as we show positive results. So we're not risking a lot in the beginning, over getting that experience, and we're doing it over and over and over again, and then increasing as we go. So after, you know, a couple months, if you hit your goal, increase the goal. See, if you hit it again, and increase it again, increase it again, keep going back for feedback, right? If you have access to a mentor, go back, get feedback, hey, this is what I did. This is what I do, right? What I do wrong, get some feedback from somebody who's actually doing what you want to be doing. And then just keep doing it over and over again, and scaling it. And eventually, yes, you can do this really, I don't know how long it's gonna take. But if you can put in the time, and you can do the back testing, and do hundreds and hundreds of trades, then it shouldn't take as long as you think it would.
Okay, so let this be a message if you've been laid off. Or if you want to start trading for a living. Can you do it in a month? Probably not? Can you do it within a year? Yeah, I definitely think so. You know, if you're putting three to five hours a day, and it's taking you more than a year, you're doing something wrong, your time is not being spent effective. If you can put three to five hours a day or more, then yes, you can definitely do this. I have 100% faith that you could do. Now, whether it's, you know, anytime after a month or two months, or three months, up to a year or longer, I don't know, it depends on every person. If you're motivated, you'll find a way. And I think if you're listening to this podcast, you already found the way. You know, this stuff works hopefully, beaten in in your head long enough over and over again. Yeah, this stuff works. I'm doing it approve, look. Now you just got to find the motivation. You gotta find the time now obviously this guy before he said, Hey, I joined because I was interested and I liked it. But I didn't have the time because my business and my talent. Okay, great. Now the business or the work is not there anymore. So now you do it. family will still be there, family will always be there. But you're doing this for the family. Right. So that's it for this episode, guys. Remember, always trade with the odds in your favor, I hope you do never get laid off. But if you do have a backup plan in place, or start trading, and doing it in a way so that you get to quit instead of being laid off. It done your time.
Don't let other people dictate to you what your end goal is, you should dictate your own. And so don't let one be the loneliest of all.
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