Well, it happened again. We got an email from yet another trader who’s no longer going to be able to trade. For the purposes of this blog we’re going to call him “JOHN”. John is headed back to the “real world” and got another “real job”. He had been at this day trading thing for longer than I have but he was never able to quite figure it out. Lately John was struggling a lot (the market has been tough for a while this year) and finally he had to call it quits. I admire him greatly for finally making the decision. Family first ALWAYS. You have to make a living.
This wasn’t the first John to send an email like this and it certainly will not be the last, no matter how hard we try. Most Johns just fade away and you wonder what ever happened to them. Damn John, you could have at least said good bye!
I HATE seeing this. It drives me nuts. It’s a HUGE part of why I write the blog and attempt to help anyone who reaches out. I fully understand exactly how freakin’ hard it is to become and STAY a CPDT (Consistently Profitable Day Trader). There were many sleepless nights for me years ago when I was struggling. I also realize for some, no matter what they try, the work just isn’t cut out for them. There are some that no matter how hard they try, no matter what they do, they just will not figure out a way to become a CPDT. Just like I never could become a professional baseball player.
You hear questionable unconfirmed chatter all the time about WHY so many traders fail:
The gambler mentality and those betting the farm on a single or couple of trades (like shorting $AWX too early recently).
The hold and hopers whose stock(s) never come back ($DRYS or $HMNY).
The risk averse traders who can’t push the buy button and/or handle the pressure of losing money and/or being wrong.
There are countless reasons why traders fail but in my opinion there’s one BIG one and that’s what we’re going to talk about today. This one has exploded recently thanks to the ever-expanding influence of social media and traders trying to FOLLOW other traders.
So, let’s get to the point:
I wrote in my last blog and say this all the time: YOU WILL NEVER BE CONSISTENTLY PROFITABLE over the long haul BY SIMPLY FOLLOWING other traders. You’ll never become and stay a CPDT until you find YOUR process and YOUR edge. I also firmly believe that edge is inside your head. We’re not talking about that today though.
Social media has made it so easy to follow other traders. Between StockTwits, Twitter, Facebook, countless chat rooms, and/or YouTube there are endless “traders” all willing to show you how it’s done. Want to learn how to use VWAP? I’m not sure why you would, but type VWAP in Youtube’s search bar and you’ll get and endless supply of videos. Thinking about using Fibonacci Retracements to find your edge? Countless videos on that too with the tops hits having hundreds of thousands of views, if not over a million.
You would think with all this FREE content out there more traders would be successful. So why aren’t they?
Most don’t gravitate to the right type of content. They don’t gravitate to the material that actually teaches them something and/or makes them think. Rather they go to what makes them feel good. The content that gets the adrenaline going. The content that shows them the lifestyle they wish they had. Yep, most gravitate to those videos showing you the $$$$$$$$. The videos of the guy or gal making bank. BAM $6K today. Wow, another FIVE figure day, check me out! Oh, and I did it using shitty WIFI at the beach from my laptop while drinking and having hot scantily clad women fawning over me. Those are the videos most gravitate towards. Those are the videos with the most views and the most comments. Wow dude, you inspire me… I can’t wait until I can trade like you… I mean why would you watch a video of a guy making $40 per day when you can watch a video of a guy making $4000 per day?
In my opinion, you’re MUCH better off watching the guy making $40 per day. I bet he’s making that on his own with his own process. More often than not, the guy making $4000 per day couldn’t even make the $40 per day if he didn’t have thousands of followers driving his/her stocks higher. Btw, if you don’t understand this is really how it works with many of those big-name advertisers, please watch our free webinar on Pump and Dumps HERE.
So many spend their precious time watching those videos thinking, if I can just be like them…
But guess what?
You can’t be like them.
You can’t be like me either.
You can only be YOU.
Now, don’t misunderstand what I’m saying. I firmly believe ANYONE can do anything. YOU CAN BECOME A CONSISTENTLY PROFITABLE TRADER. And in the beginning when you’re trying to figure it out, you should try to learn something from everyone. Even if you learn what NOT to do. However, at some point (the sooner the better), you have to cut the cord. You have to stop following. You have to figure out what does and doesn’t work for you. You have to figure out what type of trader you want to be. What type of trader you CAN be.
Can’t get a handle and how fast things move in the opening 15 minutes? Then don’t trade the opening 15 minutes.
Getting too many false reads from your MACD cross? Then stop using your MACD cross.
Constantly losing money trying to follow someone in your chat room? Then stop following!
Does VWAP help you identify reliable and repeatable entries? Then continue to use VWAP.
Does your P&L continue to show you have an edge trading AFTER 10am? Then start looking for MORE setups AFTER 10am and sit out the open.
Consistently making money trading a particular pattern? Then put pen to paper on EXACTLY what that pattern looks likes and go find MORE of it. Make it YOUR A+ Setup.
BTW, here's my #1 A+ Setup (super duper clean IP) before it triggers:
There’s no right or wrong way to make a living Day Trading Stocks. There is ONLY YOUR WAY. If you hear anyone say THIS is how YOU MUST do it or THIS is the ONLY WAY, run... My favorite is REAL TRADERS do this______________. "Real traders don't scalp" was my favorite example on twitter this week. If I had $1 for every time someone told me I wasn't a "real trader" because I don't short more or because I don't use VWAP or I do/don't do/use something else... Well, I would probably have more dollars than they do. The only thing real traders do is what works for them. Anyone else is just pushing their own agenda and ego.
Let me say it again, the only way for you to become and stay a CPDT is to find YOUR way.
Yes, I have my way which took me YEARS to figure out. Mike has his way which also took him years. Even though there are A LOT of similarities between our 2 methods, we each have our own and are different in many ways. One example: Mike rocks the “Buy Zone” plays. He often nails just the right place to bid. Personally, I never bid. I buy on the way back up. On this play, Mike gets in at way better prices than I do (hell, he’s probably selling me some at times), but I trade that A+ Setup the way that works for me.
The same day Mike was talking in chat about John who was going back to work, I saw these posts in chat:
This is exactly what I’m talking about! The traders who have taken our course and are the most successful have taken the material and made it their own. The course, like ANY trading material you learn, needs to become yours. You need to be 100% bought in and it needs to become yours. That’s one of the biggest differences, if not THE biggest, between a GTMI and a NGTMI.
Now, I don’t want to turn this into a commercial for our course. Whether you learn from us (free material or paid) or anyone else, do yourself a BIG favor: Take everything you’ve learned and put it into practice. Trade small and slowly start to figure out what does and doesn’t work for you. Build on what does. Ignore the rest. Then stop worrying about what everyone else is doing and focus on YOU.
You’ll soon come to realize that your problem all along hasn’t been that missing indicator or that magic scan. Your problem all along is that you’ve been trying to follow and mimic other traders. Once you fully realize and embrace this, pat yourself on the back and get to work because you’re well on your way to becoming consistently profitable over the long haul.
After reading this if you STILL feel like that guy with the 4000000000 followers who advertises all the time or the recently uncovered paper trader kid is the way to go, best of luck and reach back out when you realize you need to go back to the real world because that doesn't work. I hear that John’s company still has a lot of openings.
Speaking of John, let’s go back to THEM before we end this today:
John never took our course. I’m not sure if he took anyone else’s either. He often stated he couldn’t afford it even though the cost is only about what he was losing every few days. He insisted on being self-taught. I guess I’m glad he didn’t want to be a brain surgeon.
John complained all the time about how he can never nail the entires and things always move too fast. Like the stock is suppose to pause at the Inflection Point so we can all load up with as many shares as we would like. The is the same John who never recorded his trades so he could go back, watch the Game Tape and see what he may have missed. Sure, some move too fast. Some.
John jumped around chat rooms, constantly looking for the hot hand to follow. Hell, at one point he basically told us that we sucked and that one of those marketing guys with a zillion followers was the “real deal”. That didn’t seem to last long though, because John was back in Mike’s room and no longer in the other.
John was also all over the place with his process. Constantly talking about this indicator or that indicator, but always a different indicator. John had so many lines on his chart I’m not sure he could see the damn candles clearly.
John was holding stocks overnight at times. And let’s just say he was extremely passionate about his overnight holds, like stalker passionate. He wouldn’t sell them. He wouldn’t listen to reason about them. Hell, his stock would be down 25% overnight and he would go on and on about why he was buying even more.
John would ask a question and I would happily share my opinion and what works for me. This was his way of acting like he was trying to learn. John wasn’t listening though. The entire time I was talking John was thinking about how he would respond to me.
And let’s not forget my favorite John. The one who acted all along like he knew what he was doing. The one who was just pretending to trade. He was convincing for a while, but it turns out this John couldn’t turn a profit at all. He wasn’t in it to make money anyway, he just liked the attention. Probably why this John still pops on social media once in a while and acts like he’s still trading. Sure John, sure… You caught that gap play. Anyone can “call” a trade, CPDTs can actually trade the call with real money.
For the rest of you: PLEASE, don’t be a John. Any of them.
Stop following. Be YOU. Find YOUR process. Find YOUR edge. YOU CAN DO THIS!
Thanks for reading! Question? Comment? Reach out and/or leave a comment below.