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26 Years Of Brutal Trading Advice in 23 Minutes — Transcript

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0:00Hello, my name is Doug and I've been a
0:01professional trader now for 26 years.
0:03And in today's video, I'm going to give
0:04you the 10 brutal truths of trading. The
0:07very best lessons that I've learned from
0:09a two-decade-long trading career, all in
0:11today's video. But before I do that, I
0:13want to warn you. This is not some
0:15cheesy list I pulled off the internet or
0:17something that I typed into chat GPT.
0:19This is real-world advice that was
0:21learned by using real money in a real
0:24market. Now, some of this advice is
0:26going to make you feel a little
0:27uncomfortable. It's going to challenge
0:29the way that you think and it's going to
0:31challenge the way that you've been
0:32taught. But I do promise that if you
0:34watch this video, you will never look at
0:37trading the same way again. So, having
0:39said that, how about we get started with
0:40today's video?
0:43Now, right before we jump into today's
0:45lessons, I'd like to say something
0:46because I think it's important and it
0:48will set the tone for the remainder of
0:49this video. And here it is.
0:51You are what you are and you are where
0:55you are. And whatever you are and
0:57wherever you are, I want you to know
0:59it's okay. Whether you're a new trader
1:02who's starting out with no money,
1:03whether you're a trader that's been in
1:05this business for a while and it's been
1:06nothing but a disaster, or whether
1:09you've been fighting with break-even
1:10year after year and you're just at
1:12bitter's end and you're ready to give
1:14up, wherever you find yourself, whatever
1:17country you find yourself in, if you're
1:19watching this video today, I want you to
1:21know that doesn't matter. The only thing
1:23that matters is the very next step you
1:26take in this process. That's it. Because
1:30the market is the purest form of
1:32business that there is. It does not care
1:35who you are. It does not care what you
1:37did in your past. It does not care where
1:39you went to school or what your
1:41circumstances are. It will reward those
1:44who put in the effort. Now, I started
1:46out with a sizable account as I said
1:48before, but I blew right through that
1:49account and went bankrupt. And I had to
1:51start over with just a couple of
1:53thousand dollars and I found a way to
1:54make it. My wife came from the poorest
1:57country in the European Union and
2:00started with 7 euro in her bank account.
2:03No kidding. And she was able to make it.
2:06All of our journeys will be different,
2:08but the only thing that should matter to
2:09you right now is not where you are, what
2:12you are, or what you've done in the
2:13past. It's what you do next. So, having
2:15said that, let's jump right into today's
2:17lessons. All right, so let's begin with
2:19number one. And that's going to be do
2:21not underestimate the power of simple
2:24stupid. The amount of information that
2:26you need to make successful winning
2:27trades right now and successful winning
2:29trades for the remainder of your life,
2:31it's probably a lot less than you could
2:33possibly imagine. You don't need dozens
2:35of indicators that are cluttering up
2:37your charts. You don't need to chase the
2:39latest shiny object that's in the
2:40market. You don't need to know
2:42everything about the economy and
2:44monetary policy and you certainly do not
2:47need to have an answer for every little
2:49thing that goes on within the
2:50marketplace. All you need to become a
2:53long-term profitable trader is just one
2:57simple edge. That's it, guys. Just one
2:59simple edge within the entire market
3:02ecosystem and you can get whatever it is
3:05that you came for because that one
3:07little simple edge, that, that's where
3:09you're going to live. That's going to
3:10become your domain and you will become
3:14the ruler of that domain. And every day
3:17when you wake up, you are going to
3:19hammer on that edge over and over and
3:21over again from now until the end of
3:23time. And anything that goes on that
3:26does not pertain to that edge and what
3:28you're doing, you don't need to know
3:30about it. It's none of your business.
3:32It's just noise and nonsense. I have
3:34made millions upon millions of dollars
3:36trading over the last two decades doing
3:39one simple layup trade every single day
3:42of the week. And after 26 years in this
3:45business, there's a whole hell of a lot
3:47that's going on in the market that I
3:48don't know about. But guess what? I
3:50don't have to and you don't either. Now,
3:53one simple tip that will help you keep
3:55things simple stupid. If you're a new
3:57trader, I highly suggest you stay away
4:00from indicators in the beginning. Start
4:03with understanding price action, support
4:05resistance, or something easy like the
4:08box theory. Then once you've mastered
4:10that, you can move on to indicators.
4:13Same goes for all of you traders out
4:14there who have experience, but you're
4:16not consistent. Start to remove some of
4:19the noise that may be on your charts.
4:21Get back to the basics. Understand how
4:24stocks and assets move, understand how
4:26price action works, understand support
4:29resistance, and understand the box
4:31theory. But always keep in mind, stupid
4:34simple will always win in the markets.
4:37Number two, focus on trading just one
4:40asset. Much like I mentioned in step
4:42number one where you will become the
4:43ruler of your domain, you'll also become
4:46the ruler of mastering a specific asset
4:50or a very select amount of assets. And
4:53the reason for this is because the same
4:54traders tend to trade the same stuff
4:57over and over again. And those traders
4:59have a specific habit and behavior to
5:02them. And once you can add that nuance
5:05to your strategy, you start to move to a
5:07whole new level. Now, this is also
5:09beneficial for the newer traders and for
5:11the struggling traders because it
5:13narrows down our focus. Instead of us
5:15scanning through hundreds of stocks and
5:17chasing those shiny objects every day,
5:20we've just got one singular focus going
5:22in one singular area. And when we
5:25combine that focus with the nuance, then
5:27we can really take ourselves to the next
5:29level. Now, start with one asset and
5:32then slowly add maybe one or two. But
5:35you can live the rest of your life
5:36trading the same three to four
5:38instruments over and over again. Keep it
5:41boring, keep it simple, and trade just
5:43one asset. Number three, screen time is
5:46your BFF, your best friend forever. You
5:49need to get in front of that screen as
5:53much as you possibly can. My mentor
5:55would always tell me the market's a lot
5:57like a movie or this is the philosophy.
5:59If you go and watch a movie, you see it
6:01the first time. You're like, "Oh,
6:02there's all these cool parts." Maybe you
6:04explain it to somebody. But if you go
6:06back and you watch that movie a second
6:08time, you realize there was an awful lot
6:10that you didn't catch the first time.
6:13Now, imagine if you sat there and
6:15watched that movie for 2,000
6:18straight days. You would become the
6:20master of that movie, am I correct? You
6:22would know where all of the mistakes
6:24were, you would know where all the
6:25missed lines were, and you'd be able to
6:27recite the whole thing in your sleep.
6:29And that's the point, mastering these
6:32singular things. It's very important.
6:35Now, luckily for a lot of you here
6:36today, is all of these brokerage
6:38accounts have some sort of playback
6:40device. We didn't have that when I
6:42started trading. You actually had to be
6:43present. So, the good thing is when you
6:46come home from work or whenever you get
6:47a free moment, instead of watching your
6:49favorite series on Netflix or some other
6:51sitcom, get in front of that screen,
6:54watch that one asset, and continue to
6:56watch it over and over and over again.
6:59And you will be surprised on how quickly
7:01your eyes can pick out patterns, how
7:04quickly your brain can pick up on these
7:06nuances, and you'll start to put these
7:08pieces together and that will take that
7:09strategy to another level. So, screen
7:12time, it's always going to be your BFF.
7:15Number four, position size is also your
7:17BFF. If you're a new trader, if you're a
7:20struggling trader, you have absolutely
7:22no business whatsoever putting real
7:24sizes down on the table. I mean, just
7:26think about it for a minute. Why would
7:28you risk your hard-earned money when you
7:30don't have a command over your strategy,
7:32you don't have a command over the assets
7:34you trade, and you've never at any point
7:36throughout your trading journey showed
7:38any type of consistency whatsoever. It
7:41doesn't make any sense at all, right?
7:43And look, I'm not casting judgment
7:45because I did the exact same thing
7:4720-plus years ago. I put big sizes down
7:50on the table when I didn't know anything
7:52about trading and that led me to being
7:54blown up or blowing through several
7:56accounts. And when you really think
7:57about it, traders don't blow up because
8:00they made a bad trade. Traders blow up
8:03because they over-leveraged on a bad
8:05trade and they didn't cut the bad trade
8:07and they continued to over-leverage on
8:09the bad trade until they ran out of
8:11money. So, if you can just control your
8:13position sizes, you're going to be okay
8:17because remember, you're in a learning
8:18phase. Now, a lot of you might be
8:20asking, "Well, what's the right kind of
8:22position size?" Your position size needs
8:25to be as low as it needs to be to keep
8:28you from over-fixating or having any
8:30types of anxiety whatsoever about being
8:33in that trade. So, for example, let's
8:35say you take a 100 share size position
8:38of something. If you're nervous, if you
8:40have anxiety, if you're constantly
8:42eyeballing that trade over and over and
8:45you're worried, it's too much. You got
8:47to back it down. Take it down to 70. If
8:49you have the same symptoms, take it to
8:5150. If the same symptoms, take it to 40,
8:5430, 10, 5. Go as low as you need to go
8:58where you are not worried about the
9:00position size that you have. This will
9:02help you stay in trades longer, this
9:05will help you focus on your trades, and
9:07it will help things come together much
9:09cleaner for you. So, remember, position
9:12size is also your BFF. Number five, do
9:16not focus on making money, focus on
9:18making good trades. Now, I know this is
9:20kind of tough to do because we all come
9:21into trading to make money, but this
9:24cannot be your main focus. Your main
9:27focus either needs to be on the trade
9:29you are currently in or the trade you're
9:32about ready to make. Anything outside of
9:34that is irrelevant. Look at it like
9:36this. Let's say an NFL football team,
9:38for example. They don't come out and try
9:40to score on every single play. What they
9:42try to do is just make one good play.
9:45And if they make one good play, they try
9:46to make another good play, then another
9:48good play. And if you can tie enough
9:51good plays together, you should be
9:53rewarded with what? A touchdown. And
9:55that's trading. You make one good trade
9:57at a time. Then you try to make another
9:59good trade, then another good trade, and
10:02the culmination of those trades should
10:04get you exactly where you need to be
10:06financially. Now, here's a quick tip on
10:08something that helped me understand this
10:10concept a little bit more. And this
10:12probably should have been a tip on its
10:13own. And that is at no time whatsoever
10:16during the course of a trading day,
10:18should you ever look at that P&L that
10:21you have. Never ever look at your P&L.
10:24And here's why. Because at some point in
10:26time, that number that you see, not only
10:29is it not going to be nice, but the
10:30biggest problem is one time that number
10:33is going to cause you to do something
10:36emotionally. It's going to cause you to
10:38detach from the trade that you have at
10:41hand, and it's going to cause you to
10:42make a serious mistake. At some point
10:46that number will influence you, and you
10:48don't need that. So, at no time
10:50whatsoever do you look at your P&L
10:52through the course of the day. And I'm
10:54sure for most of you that should help.
10:56So, remember in this part, don't focus
10:58each day on trying to make money. Just
11:00focus on trying to commit to your
11:02process, follow your rules, and follow
11:04your strategy, and just focus on one
11:06trade at a time, and you'll get a lot
11:08farther than you think. Number six,
11:11learn to fall in love with losing.
11:12Losing ain't your BFF here.
11:14Unfortunately, it needs to be your
11:16lover, and it needs to be your lover
11:17because you're going to do a whole lot
11:19of it, and a whole lot more than you
11:20ever thought you were going to do. But,
11:22I want you to know that's okay. I've
11:24been around for 26 years, and losing is
11:26part of the game. However, the reason I
11:27want to talk about losses is because
11:29there are two types. One of them is
11:31acceptable, the other is not. An
11:34acceptable loss is something that's just
11:36the cost of doing business. You saw the
11:38setup that you needed to see. It was an
11:40A+ setup. You followed your rules. You
11:42followed your plan. It was just one of
11:44those unfortunate random events of the
11:46market that caused you to be stopped
11:47out. Again, part of doing business. That
11:50is okay, and I don't want you to stress
11:52over stuff like that. However, the
11:54second loss is totally avoidable and
11:57should be removed. The unacceptable
11:59losses. This is revenge trading,
12:01emotional trading, blindly following
12:04other gurus or whatever it may be.
12:06There's absolutely no place in this
12:09business for that kind of stuff. I want
12:11to give you something that helped me
12:13overcome this and understand the concept
12:15of losses and taking losses so you can
12:17enjoy the rewards. I started to look at
12:20losses as part of doing business like I
12:22just recently mentioned. So, for
12:23example, let's say I had a 9-to-5 job in
12:26a corporate environment. Well, I would
12:28have to purchase a wardrobe so I'd look
12:30nice when I went to work, right? Well,
12:32the purchase of that wardrobe is a loss,
12:34but I must take that loss in order to
12:37get to job and get my paycheck. I would
12:40still have to find some transportation
12:42to that job, whether I'm taking a bus, a
12:44train, or putting fuel in my car, but
12:46whatever the expense was to get me to
12:49that job would be a loss, but I have to
12:52take that expense so I can get my
12:54paycheck. Now, the goal here is the
12:56expenses should be lower than what your
13:00paycheck is, that way it's a fair
13:01trade-off. But, in everything in life,
13:03it's risk versus reward. There's a
13:05trade-off. There's something that you
13:06have to give up in order to get some
13:08sort of reward. Trading is no different.
13:11Just understand that there are two types
13:13of losses. There's the acceptable loss,
13:16but what cannot happen is you can't have
13:18those moments where you have lapses of
13:20concentration, lapses of judgment, and
13:22you take those unnecessary losses. So,
13:25remember, learn to fall in love with
13:27losing, accept that it's part of the
13:28game, and everything's going to be okay.
13:30Number seven, if you don't rank, you
13:32won't bank. Every trader needs some form
13:35of ranking system to help them quickly
13:37establish the level of opportunity that
13:39they're looking at. Because we may have
13:40two charts side by side that have the
13:42exact same technical setup, the exact
13:44same technical signaling, but there's a
13:46good chance they are not the same
13:49opportunity, and that's important.
13:51Because the goal for us as traders is to
13:53be fully leveraged or stomaching as much
13:56risk on our high probability winning
13:59trades. However, if we don't have a
14:01ranking system, we're not going to know
14:04the difference between a high
14:05probability trade and a potential losing
14:08trade. Now, this obviously takes a
14:10little bit of time from your end because
14:11you are going to have to make trades and
14:13understand what a winning trade looks
14:15like and what a losing trade looks like,
14:17but you need to start ranking those
14:20trades and start studying the winners
14:22and studying the losers. Now, quickly,
14:24something I use is a tier one, two, and
14:27three type of method. So, for example, a
14:30tier one trade for me would be something
14:32that's most likely to have an 85% win
14:35rate or higher. Now, there's no
14:36guarantee that trade will work, but when
14:39I see that set of circumstances, that's
14:42a must take trade. And that trade
14:44normally works out for me. Therefore, I
14:46should put as much risk on that play as
14:49I possibly can. A tier two play would be
14:52sort of a play that I have a high degree
14:54of conviction. I like the setup, but the
14:56opportunity just isn't quite the same.
14:59Something might be lacking. Something
15:01might not be lining up, but I feel
15:03pretty confident about the trade. This
15:05is probably something around a 70 to 75%
15:07win rate for me. I still want to take
15:09the trade, but I don't want to
15:11over-leverage on that trade. And of
15:13course, a tier three play would be
15:15something that I really don't mess
15:17around with anymore, these cheap plays.
15:20These are something that in the past I
15:21felt like I wanted to be a part of. I
15:23wanted to try out, but most of the time
15:25they were just slightly over 50/50, and
15:27as time has progressed, I found no need
15:29to take them. I'd rather just be patient
15:31and wait for the tier ones and tier
15:32twos. However, if I never would have
15:34created that ranking system, I might
15:36have never known the difference between
15:38them, right? So, as of now, start
15:40ranking those trades and start
15:42documenting those trades. And if you
15:43don't rank, you're just never going to
15:45bank. Now, this will help me transition
15:47into number eight. Because you'll never
15:49be able to successfully rank and bank if
15:51you first do not journal your trades.
15:53Now, there's a lot of different opinions
15:55on what people think should and should
15:57not be in their journal. And through
15:58time, what is and is not in there will
16:01in fact change. But, here's what I want
16:02to say about journaling, or what I feel
16:04is the most important part. I feel as
16:06traders, myself included, are a tiny bit
16:09delusional. We sometimes think we have a
16:12problem, and we look at every losing
16:14trade as a bad trade. Maybe it's not,
16:16but we feel we have a problem in a
16:18certain area. But, unless we document
16:21it, we're never 100% sure that's the
16:23real problem. This was my experience.
16:26Because when I started trading, I lost a
16:28ton of money, and I lost all the time. I
16:30naturally thought I was just a terrible
16:33stock picker, that I couldn't
16:34distinguish opportunity. But, once I
16:37started documenting everything from what
16:39I was trading, the time of day I was
16:40trading, how I felt about it, the
16:42strategies and everything else I was
16:43using, I realized that was not my
16:46problem. My problem was that 60% of all
16:50the losses that I took never needed to
16:53be taken. I was panicking out of the
16:56trades. So, I didn't have a stock
16:57picker's problem. I had an emotional
17:00problem, but I never would have known
17:02that was the problem if I didn't journal
17:04it. Now, I also needed this to help
17:07reinforce my trading. Because as I began
17:10to continue to trade, I would look at
17:12losses, and right when I was ready to
17:13push that button, I'd pop up that
17:15journal, and there was the data. The
17:17data was telling me that, "Dude, if you
17:20cut that position, this this is a
17:22mistake. This is 60% chance that's a
17:24mistake." Again, you must journal all of
17:27your experiences. Now, the rule of thumb
17:30is to journal as much stuff as you can.
17:32And luckily for the new generation,
17:33there's all these great free tools out
17:35there online where you can just upload
17:37your trades, and it'll give you every
17:39little analytical detail. And every one
17:41of these are important, and you need to
17:43go through each and every one of them.
17:46But, another tip that I like to do is
17:47each and every week I begin that week
17:50with looking at something I would
17:51personally like to improve on. Whether I
17:54want to prove better on my entries,
17:55whether I want to be more patient on my
17:57exits, whether I want to increase my
17:59size or lower my size, and I make that a
18:01prime part of my journal. So, remember,
18:04to get to the next level, you will have
18:06to journal every single thing that
18:08you're doing, and you also have to make
18:09sure that you're taking care of your
18:10life outside of trading as well. But,
18:13start journaling and documenting those
18:15experiences and looking for each and
18:18every one of those areas that you can
18:19improve. Number nine, keeping with the
18:21theme of journaling and ranking and
18:23banking, every trader needs some set of
18:26rules in place. Now, rules are different
18:28than journaling. Rules are in place to
18:30protect us from us, from us unwinding
18:34and going down a path that we don't want
18:36to be because that's where
18:37self-destruction is, okay? Now, this is
18:40very simple. What I like to do is this.
18:42I have rules in place that if I lose,
18:44let's say for example, three trades in a
18:46row, I start to back off, maybe even
18:48take a day off. Because whatever it is
18:50I'm seeing, I'm not seeing it correctly.
18:53I'm doing something wrong. Even if I
18:54think I'm not doing something wrong,
18:56again, that's why they're rules, I have
18:58those in place because I am doing
19:00something wrong. My strategy is not
19:02coinciding with the market. I need to
19:04take a step back and not throw money at
19:06the problem. More importantly, I have
19:08something that I've referred to in the
19:10past as a GTFO number. Get the F out.
19:15When that number gets hit, you're gone.
19:17You must walk away. Don't care what the
19:19technicals are. You've hit max loss. You
19:21are max risk. You're done, okay? This is
19:25super important, probably one of the
19:26more important things in this entire
19:28video. Because the single greatest enemy
19:30in trading is us. It's in the mirror. We
19:34are our own worst enemy, and we must
19:37protect ourselves from ourselves. So,
19:39make sure you have a set of rules to
19:40protect you from losing trades, and and
19:42definitely rules to protect you from how
19:44much you are willing to lose. Because
19:46trust me, it's easier to step back, calm
19:49yourself down, then come back with a
19:51approach.
19:53Number 10, find yourself a mentor.
19:55Whether that's finding an individual
19:57person or joining some sort of a
19:59community, a mentor will get you to your
20:02goal faster than you ever could imagine
20:05because only a trader can understand
20:07another trader. Only a trader could
20:10understand that you put 50 hours of work
20:12into a certain trade, you waited for the
20:14perfect setup and as soon as you push
20:16the button, it smoked you out. Only a
20:18trader can understand exactly how that
20:20feels. Now, I know that most people on
20:23the internet feel that every chat room
20:25or everybody that offers some sort of a
20:27service has to be a scammer. Certainly,
20:30there are people out there, but there's
20:32a lot who are not. But, the reason that
20:35people think that way or the number one
20:37reason that people think that way is
20:38because they go into these communities
20:40with the wrong mindset. They're going
20:43into these communities to try to
20:44piggyback on alerts, to try to get
20:46involved in some big trades. That's not
20:49why you're there. You are there for the
20:51individuals experience. Again, only a
20:54trader can understand another trader.
20:56You need these people to hold you
20:58together when [ __ ] gets bad because
21:02that's what I remember about my mentor.
21:04He didn't just teach me how to trade, he
21:06taught me how to make trading my life.
21:08He held me together when I was ready to
21:10quit. He helped me on those days I was
21:13literally in tears and couldn't stand to
21:15even look at stocks or any other form of
21:18instrument. That's the things I remember
21:20the most was the the days that he helped
21:23me when I was down and I felt worthless.
21:26And that's what a community is for. It's
21:28for a group of people who share the same
21:31common goals and look out after one
21:33another. So, somewhere along the line,
21:36whether it's through us, somebody else,
21:38it doesn't matter. Find someone that you
21:42align with that can help you take that
21:45next step. Now, speaking of steps,
21:47that'll bring us to our final step
21:48today. Number 11, the last step will be
21:51the hardest step you take. At some
21:54point, you will have obtained all the
21:56knowledge you possibly can about
21:58trading. Enough people will have helped
22:00you, put you in the right position to be
22:03successful, but the final step between
22:05being average and being elite, that step
22:09has to be taken by you and it will be
22:12the hardest step that you ever take.
22:14There are no shortcuts here, there are
22:16no easy answers and no one can help you
22:19get through that. And you will find
22:21yourself, if you're not already there as
22:23a trader, at the proverbial fork in the
22:25road. To one side, it's the easy out.
22:28Yeah, just quit, make up an excuse,
22:30trading wasn't for you. But, to the
22:32other side is that final step. And
22:34beyond that final step is what you got
22:37into this trading business to achieve in
22:39the first place. But, no one can help
22:42you with that. Now, for each and every
22:43one of us, whatever that final step is,
22:46it's different, right? For me, I had a
22:48lot of insecurities, but my insecurities
22:50were created from my poor trading habits
22:53in the beginning. But, nonetheless, that
22:55final step was up to me. No one could
22:58help me with that. I had to come up with
23:00the internal strength to cross through
23:03that. So, on that note, guys, I want to
23:05thank you for watching today's video. I
23:06hope you found some value out of it.
23:08Right before I sign off, I want to
23:10remind you that my wife and I created
23:12now our brand new live trading room
23:14called the Rumors Squad. Every day, we
23:17are trading live on screen. So, if
23:19that's something that you're interested
23:21in, we appear to be the mentors that
23:23you're looking for, we can help get you
23:25to that level that you need to be as a
23:26trader, I'll put the link down there in
23:28the description. Other than that, again,
23:30let me thank you for watching today's
23:32video. Take care, trade well, cheers.

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