Good morning everyone? All right? Well uh, it is 9 30 and the bell would be about to ring except that today the market is closed. So today I'm gonna give you guys a special uh episode here of the Live Day Trading Morning show which is going to be 2020 year in review. As you probably already know because I've talked about it a fair amount. I made 5 million dollars in 2020.

It was the best year I have ever had day trading. It may be the best year I will ever have. It may be my high water mark. I I mean time will tell.

but um, of course I've had a lot of questions about 2020 and what I think made it so different from my previous years. how and why I was able to break out of what I thought was kind of a plateau in my trading profits which was about a high of 500 000 a year to make 10 times that in one year. It was completely unexpected. Phenomenal trading environment.

And so that's what we're going to talk about during um, this, uh, morning show. So thank you guys for tuning in. Those of you guys uh who are streaming this uh live right now on Youtube or Facebook, please hit that thumbs up as soon as you get tuned in. Hey those you guys watching on a replay hit the thumbs up for hitting five million dollars in one year That is, uh, really remarkable.

Now the goal of this uh episode here is not just for me to uh, brag and pat myself on the back. My goal here is to actually give you some actionable takeaway ideas that will help you hopefully improve your trading. Now I want to get my notepad. I've got a couple things that I'm going to take some notes on here just for myself.

I want to make sure I cover my kind of hit list of things that I want to, um, teach you guys. Um, and this is also probably a good time just while people who are watching this live are getting, uh, filtered in just to remind you guys of my disclaimer that my results are not typical. So you have to just assume as a beginner day trader. net all metrics all studies everything right.

Now that we know about beginner day traders is that beginner day traders lose money 99. Probably Well, 90, probably 99. So you should assume as a beginner trader that you will lose money. Now there's a lot of different reasons that beginner traders lose money.

Uh, no. strategy. Not trading with the right tools, don't have the right broker, don't have an ability to maintain discipline. You know, there's a whole slew of reasons, But for you as maybe an aspiring trader, or maybe someone who's traded a little bit and who has already lost money, I would encourage you to trade in a simulator before you ever put real money on the line.

and not to try to just blindly follow me or someone else just because Ross makes money just because Jim Cramer makes money. Just because Bill Ackman makes money, doesn't mean you want to blindly follow them on every trade they take. You don't know how they're managing risk, how they're how they're positioning each trade relative to their portfolio value. You know you you ultimately have to make the decision on your own.

So um, now as I go through year in review, as some of you guys already know this, Um, I already did my 2020 year review for all of my Warrior Pro students, I'm pointing here to the mod. I'll just put it up on my screen here for a second. So I'm just pointing here to the monitor that has my metrics. So I already did this.

for Warrior Pro students, I'm going to do an abbreviated version for all of you guys um, who are on Facebook and Youtube. kind of watching this as a free broadcast. But what I want to let you know is that, um, I'm going to put a link right down in the description and let me just copy and paste it and I'll put it there. So let's see Day trading.

I'm going to host a series of day trading classes. Um, this year and I think we'll have that. Well, that'll just be posted right in the description so you guys will see it. Um, everyone who registers to that class.

Um, so I just actually taught this version of the new my new Workshop two weeks ago And so if you register right now, you'll be able to watch a replay of that workshop. And during that workshop, I'm going to talk about strategy development. So Strategy Development essentially is your process for number one: how to find the right type of stocks to trade each day, what your process is for finding the stocks, number two, Where you get in, where you actually buy to minimize your downside, risk and maximize your upside potential, and where you get out to lock up as much profit as possible, but also try to hold for the bigger move. So all of the strategy development I break down for you in that workshop.

So I encourage you guys to click the link right down below to register to that workshop. Now everyone who registers to it will also get a pdf of my small account trading strategy. So it's the strategy that I've used when trading with an account as small as five or six hundred dollars. All right.

You also all get a copy of my best-selling book titled How To Day Trade which I just had. Oh, here it is over here. All right. So how to Day Trade? You guys will all get a copy of this.

Everyone who registers I'll send it to you as A as an ebook so you can just, uh, read it on your device and uh, we'll also do Q A at the end of that workshop. So like I said, uh, if you register today right now, you'll actually be watching the replay of the workshop that I taught uh, two weeks ago. Throughout the year, I'll host a live workshop, maybe every three to four months. Something like that.

Maybe it might not be until June, so it might be every six months. So we'll We'll have a newer version up there at some point. But in the meantime, you guys can watch the replay. And whenever you watch the replay of my webinar, I actually have support staff that are in there able to answer questions that you post a question that someone asked during the webinar.

Ross: If you made five million dollars day trading last year, why do you bother running webinars, Why do you? You know? Why do you even, uh, teach Now I answered that question during the webinar. It's it's a good question and um, I think you guys will be interested to hear my answer. So again, we'll talk about that in the workshop, so make sure you click down there. Everyone who is in the workshop will get a special opportunity to join my Warrior Pro classes and become a student this year and to really take their learning to the next level.

My Warrior Pro class is a 35 chapter day trading course and it's an opportunity for you to learn just about everything that I know about trading. All right. So with that, I'm going to run the intro while I'm running the intro. You guys should jump over, register to that webinar and then we'll come back here and we're going to get into 2020 year in review.

All right. Okay, so uh, I don't know if that gave you quite enough time to register, but if not, you can pause the video and then you can resume over on um, or on Youtube or Facebook in just a minute. So this is these are my metrics right here from 2020 so I'll just put this on full screen so you can see I will be answering questions. For those of you guys that are trading or that are streaming this live on on Youtube typically, well it's 9 38.

This is when the market would be just opening. Obviously markets closed today, we've got a bank holiday so this is a great time. I figured a lot of you guys would probably be up anyways. um and and hanging out hanging out.

So this is a good time for us to do this type of um, little uh episode here of the morning show. A little abbreviated, but that's fine. So this is my gross profit. You can see right here this is on gross.

This is my gross profit. which means it is before fees, taxes and commissions. Now my net profit net of commissions and fees is 4.57 million. So I paid about a hundred and thirteen thousand dollars in commissions, and I paid about 384 thousand dollars in fees.

To the market makers that I use to route my orders. we could talk about that. Um, if people have specific questions on that, but let's look at that in in gross and then from a tax perspective. The majority of my trading I do in tax deferred accounts, retirement accounts, and so I pay no income tax at this time on those trades.

However, any trades you take in a traditional account where you can withdraw the money immediately, you would certainly pay income tax on and that would be at your uh, income tax bracket Because short-term capital gains are taxed at regular income rates, not at a long-term capital gains rates. So just a word to the wise there. So if I'm going to talk about 2020, I think what I want to talk about first, Um, is why was this able to be such a phenomenal year? It was so far above average, so far above what I expected. And so why don't we look at Uh 2020 just sort of stand alone for one second.

and then we'll compare it to a few of my other years. So in 2020, you can see here: five million dollars in gross profit with an average daily gain of twenty thousand dollars. My average daily volume was six hundred and seventy thousand shares of volume. So that means I would have bought 335 000 shares of stock and then sold 335 000 shares of stock.

So your volume is a combination of every share you buy and every share you sell assuming you finish the day with no open positions. My accuracy was 71.2 percent and my total number of trades 7 212.. now there's about 250 trading days in the year, so let's just do the math on that for one second. So Seven thousand, two hundred and twelve.

Uh, so that put me at about 28 trades per day, 28 trades per day. My biggest winner was 120, 119, 000, my biggest loser was 58 000.. All right, and my average trade time was about four or five minutes long. So I'm a pretty quick trader.

I look for short-term opportunities, I get in, I get out, and I book the profit. I do have some live trading examples that I'm going to show you here. Um, during this work, or during this workshop or whatever we call it here. Um, let's see.

I'll grab a couple of them to show you a few that I think are particularly interesting. But um, before I do that, let's just look at. uh, let's just look at 20 2018 for one second. So in 2018 January 2018 to 2018 total number of trades 1 305 Only about 565 000 of profit.

But this was one of the biggest differences. I traded so much less only 1305 trades. So again, 1 305 divided by 250. It's about five trades per day.

So I went from trading in 2018 about five trades a day to taking 28 trades a day in 2020. My accuracy was similar. Uh, largest gain was certainly smaller. Largest loss was also smaller.

Uh, average volume each day only 87 000 shares. So I traded five times more. I traded on almost eight times higher volume. So I simply in 2020 was trading much more in quantity than I had traded in any prior year.

So what allowed me to take so many trades in 2020? And I think this is where we have to have the perspective of looking at the overall market. So if we look at the overall market here for 2020 as you know, probably well depending on when you're watching this, um, the Coven 19 virus was it was on the radar for people back in I think December and into January and even early February. In early February of 2020 I had a trip to California and I remember in California um that there were some people on an army base that were in quarantine with Covid and you know I was like I was just as I was flying, uh, into San Francisco or I was flying out of San Francisco back to New York. There were, um, you know, a lot of people on the plane wearing masks and I was like huh? this is interesting.

This is people really are starting to get a little nervous about this and then you can see here. All of a sudden by the end of February the market was tanking as Covid was spreading like just obviously the pandemic that it became. and we had the the global, um, well I guess the um, the the shutdowns and the quarantines and everything else. So uh, you know, one of the things that I was sort of thinking about during this big drop, I was thinking that this was going to really throw off my trading for the rest of the year.

I was kind of like this is not good. We're um, you know, the market's dropping Oftentimes when the market drops, traders get fearful, we don't see the big momentum stocks, things really cool off and that had been the case back in um, December here of 2018 when the market had this kind of big drop, people got really scared and momentum slowed down and then it bounced back in January. So from my experience in trading, usually when the market is having these big drawdowns, you know things are a little. Things are a little choppy for Momentum traders.

I'm a trader who trades primarily to the long side. Now, the market doesn't necessarily need to be going up for me to make money, but when it's dropping 15, 20, 30 percent in a short period of time, traders tighten their wallets and they get nervous and they just step back for a second. So we had this huge sell-off and then we began this almost, I mean miraculous recovery. certainly fueled by the Fed and this bounce right here.

from the low down here where we dropped 35 percent, then all the way back up to the highs by the end of the year, this was definitely in. Um, oh, this was not. This is sort of a divergence from what seemed to be happening in the overall world and in the United States in general with the economy. But the market was bouncing back and it was certainly led by a number of tech stocks, including Tesla, as you all know, made a phenomenal move, but so did Amazon.

Certainly, Zoom was another big tech stock. um, I mean, we were just seeing in the tech space, some serious momentum and Fomo, and so that kind of, you know, some of those big companies led the way a little bit. So what we ended up seeing? Uh, and this is sort of interesting and unexpected: Robin Hood Td, Ameritrade, E-trade Charles Schwab. All of these brokers were reporting crazy surges in the number of traders opening accounts with them, and so what The shutdown kind of ended up doing was, uh, triggering people to say, hey, wait a second.

This is an opportunity for me to start trading the markets a little bit. I think you know everyone was hearing about all this volatility in the market and so many people say, you know what I want to get a piece of the action. I want to jump in here and see if I can make a little something I'm working for. I'm working from home or I'm not even working at all.

This is a great time to learn a little bit about the markets. Now this is in contrast to you know, the market dropping in 2000, Uh, 2008 in a way because back in 2008 you didn't have free commission brokers. You didn't have a lot of brokers that catered to retail traders with small accounts. You know you had the big brokers, but you didn't have most of these small ones that exist today.

So and then, Plus, you know whatever. 12 years later, Accessibility just through technology, the ability to easily and have fantastic apps for trading on your phone or just the the wi-fi and the the ability to have a strong enough sell signal to trade you know in the city or something like that when you're not on wi-fi Those technology differences allowed a lot more people to come into the market than in 20 than 2008. Now for me, the 2008 uh, crash in the market is what prompted me to get into trading. And so although I didn't really, I started thinking about it a lot in 2008, 2009-2010 and then I started get get into it around that time.

That was sort of what sparked my interest in the market because at that time. I had investments that were in the market long term and of course they dropped in value and I felt like, man, this isn't um, you know this is I'd be better off investing this myself. You know this is ridiculous Now that Uh is maybe a common thought and in fact, it's very difficult to invest yourself as I ended up learning. But because I've been in the market now for about 10 years, I was in just after 2008 And so by the time this big drop came, I was in a place to really capitalize on the opportunity.

Probably the same as traders who got into the market in 1999, 2001, the dot-com bubble bursting, then by 2008, they were in a good position to really capitalize on similar opportunities. And so the result of all of these new traders uh, it may be investors and whatever you want to call them coming into the market created a bit of a surge of momentum. And you know, some of the big commentators out there have been talking about how maybe it's retail traders all across the world who are buying up this market and buying up these tech stocks at outrageous levels that just keep pressing the buy button buy button buy button as Tesla or whatever it is goes higher and higher and higher. So to what extent retail traders have played a role in this recovery versus just simply the Fed? I, you know, I don't know that anyone can say with certainty.

However, it is simply a fact that Schwab E Trade, Td, Ameritrade and Robin Hood all saw over 100 increase year over year in signups. Uh, that was based on their quarterly Uh reports at the end of the first quarter or second quarter I think of 2020, the overall volume in the market it much much higher year over year, as you can certainly see just by these volume bars and in the world of small cap stocks. We saw some pretty incredible things this year, and that was probably fueled by just so many more traders in the market all scrambling to get a piece of the action. And I think that there's definitely new traders out there that did very well this year, and I could see that from just you know.

Anecdotal comments that I've heard from people who seems like they did well, but also from the members of our community. We have a 100k club at Warrior Trading. so the 100k club is for a student that has verified they've made over a hundred thousand dollars in profits, and we've had a number of students who joined our classes in 2020 and have already gotten 100k badge, which is to me impressive. They're far exceeding what I did in that amount of time, and if that's just a little bit of beginner's luck because they were in the right place at the right time, I don't know.

Um, again, that's not a guarantee of any type of any results that will be obtained by you. It's just me sort of commenting on the trends that I'm noticing. So the big thing that I always focus on, and I'll talk about this, um, in quite a bit of detail when we get into the actual webinar. for those of you who have already registered.

But the thing that I focus on each day is trading the stock. That's obvious. So what makes the stock obvious? And so just to kind of break that down, I like to focus on the stock each day. That is obvious because it's the biggest gainer in the entire market Now, the biggest gainer in the entire market that's going to be on, um, that's going to be on sort of the front page of brokerage platforms all across the world.

So you know, Robin Hood, E Tray, Td, Ameri, Uh, Etd, Ameritrade, Lightspeed Schwab. All of these brokers show you your top list. It shows you the leading gainers each day. News Networks.

You know, they all talk about the leading gainers. They show them sort of. you know, across the bottom of their their broadcast. So stocks that are among the top five or ten leading gainers in the entire market always get just sort of, invariably a fair amount of attention.

And what we ended up seeing this year was that those stocks repeatedly were going, not just up 15, 20, 30 on news such as you know, first quarter, or you know, annual financial results or something like that, they were going up 150, 250, 350, 450 hundred percent. and certainly any stock that we were seeing that had any headline related to Coven. You know, if you saw a company that came out with news and uh, so Pixie is one of them here. So this is a stock that had, um, some covid news, let's see, where was it? Um, I think it was back in this area.

So you know this is a day right here where although it's a red candle you can see on this particular day, the stock the previous day was eight dollars. The next day it hits a high of 27 bucks and they've got news out about. you know, some type of covid? Um, I don't remember. It was, um, some collaboration.

It was a coveted related catalyst. So any type of catalyst that had Coven in the headline was going up like 100, 200, 300, 400. It was just phenomenal. And we were seeing these opportunities back to back to back to back.

And so what that meant was we were seeing the obvious stock doing far more than the obvious stock was doing a year prior. You were just seeing so much more follow-through so much more momentum. So if we look at some of the Um stocks, just to name a few, Uone, this is a stock here that went from four dollars a share up to over 50 52. It was a high there 54 a share over the course of three or four days.

Something like that is the type of move that we may have seen once or twice in 2018 or 2019. and then we were seeing these back to back to back in 2020.. So the market, as you know, can be irrationally strong. and I talk about irrational moves.

I would say that the move on Tesla is a little irrational. The P E ratio is absurd. Uh, it's and and who knows, maybe it keeps going higher. but this is this type of move is generally not considered sustainable.

Generally, these types of moves don't hold very well and they end up reversing dramatically and painfully. And you know you ride the momentum while you can. But people start buying it at irrationally high levels and then those who have shorted the stocks just are forced to cover and it just keeps going higher and higher. And higher.

People are like. This Makes no sense. The fundamentals don't justify this type of move, but it keeps going. and so you know.

We saw that on Uon E, We saw it on uh, Car. These were two stocks that within the same period of time both made huge moves. Now this one you can see on this day. Uh, it hit a high of 22 and then sold off back down to like eight bucks.

So this sort of exemplifies some of the uh, risk that we were seeing in the market where if you were getting in too high and you weren't cutting your losses, you were potentially getting yourself into a position of experiencing a pretty big drawdown. This is a stock that went from four dollars up to 32. I mean, there's just there's so many. Here's another one that went from a dollar to 13 bucks.

Wnw? This was just recently. This went from ten dollars to a hundred and sixty dollars a share. A Hundred and sixty dollars a share. You wanna see a couple other big ones.

Lrtpb? Um, this one went from ten dollars to a hundred and thirty dollars a share. It came back down. Then it went from about 25 to 120. It did it again.

Duo This stock in one day went from 10 bucks to 130. So you know when we're seeing these types of moves in the market, you know this one was a red candle. I guess it hit a high of 15 bucks and then sold off. Lghl.

I mean, these moves are clearly presenting opportunities to traders, and while some are holding up really well and others are fading a bit, the opportunity is in the volatility. Acy. This one just two weeks ago, went from six dollars all the way up to thirty eight dollars a share. So those are the type of opportunities that we were seeing in 2020, not just, uh, you know, and again if I go back to 2016 or 2017 when we had Drys.

So some of you guys remember Dry S. It was a shipping stock that went from about ten dollars or maybe five dollars to a little over a hundred dollars a share in a couple of days. The company was in not great financial standing. their earnings were terrible.

I think a lot of people were shorting them heavily to the downside, waiting for the company to either file bankruptcy and get de-listed or whatever. And then all of a sudden this epic short squeeze began. And at around that time we saw some crazy momentum in about five or six other stocks that were also shipping companies. As traders were jumping sort of on what we would call sympathy Momentum so you know you had one that was strong and then traders are jumping on three, four, or five others that are also moving quickly.

And this year we saw that sympathy momentum sort of. across the board, we saw stocks that you know rhe and acy were both happening on the same day Uon E Carve Cohn. Those were happening around the same time and we saw these little clusters of momentum where one stock goes up 300, 400 percent the next stock that starts to open up. Traders don't even wait, they just jump in and try to ride that momentum as early as possible.

And so that irrational exuberance presented a lot of opportunities. I'm not going to talk specifically about entries and exits in this episode, right here. I will do that in the webinar. In the webinar.

I'll talk more about the strategy development, but right here I just kind of want to talk about the the high levels of what were what we looked at in in 2020. So the one of the metrics is kind of interesting here and I'll show this to you. So this these are my metrics here for. Uh, let's see.

Actually, it's right here. So uh, this is my performance by the instrument. Let me put it back up. So my performance by the instrument's relative volume.

So relative volume is a term that you'll hear me use a lot. And you've probably already heard me use a lot in the live morning show and just maybe in other recaps and things like that. But for those that haven't heard it, it's every stock has what we would consider a level of relative volume. It's what's normal for that stock.

So over the last 30 days, what is normal for the stock that you're looking at? And let's say the normal relative volume is 100 000 shares a day. So if a stock is trading on 100 000 shares a day and then on, you know the day that I trade it has 10 million shares of volume. It obviously has a relative volume of 500 or higher, and you can see that 4.6 of the 5 million came from stocks that had 500 percent or higher relative volume. So I'll pose the question to you guys who are live streaming here on Youtube and Facebook.

What are some reasons why a stock might have five times relative volume? You throw out a couple ideas. So David says Catalyst, Harvey says Catalyst, Josh says Catalyst Positive Catalyst News News News. Correct. So generally what causes the initial move, what causes the stock to initially start to spike up, is a News Catalyst.

There are algorithms in the market, the their computer programs, and their program that as soon as a news headline hits the wire immediately, the algorithm will start buying shares. And that's why Oftentimes you'll see when a news headline hits, especially during, uh, regular trading hours, the stock will surge up, get halted, and you don't even have it. By the time you're pulling it up, it's already halted and you're like, man, who the heck. Well, those are the computer algorithms.

So those algorithms initiate the beginning of the move through their interpretation of the news. Now, sometimes they're wrong, and sometimes you'll see a stock spike up and then immediately reverse and go down. As maybe retail traders or institutional traders who are really analyzing the headline in more depth to realize. Wait a second.

No, no, this is not good news, so it's important to give it a second. But what typically happens is you know a headline breaks and all of a sudden those Hft high frequency trading algorithms buy the stock and it pops up and starts. That begins the momentum. Now my process is: I don't trade anything that's not already up.

So if a stock is just exactly flat as the previous day and happens to have news, I'm not even going to see it Because I don't look at every single stock that has news, I look specifically at the ones that have already started moving. So in terms of my stock selection process, I'm looking for stocks that have high relative volume because high relative volume inevitably means that there's some type of news catalyst that traders are very, very interested in the stock, and then there's a high likelihood that the stock is up more than 10 right here, and the stock is gapping up right here over two percent statistically, and that it's going to be on the top of all of those sort of hot stock top stock lists that are on brokerage platforms all around the world. Now, one of the things that is interesting is that while 99 of my profits or whatever this percentage is comes from stocks that have 500 percent higher volume versus 30 days ago, my profits are a little bit different when you're looking at the volume versus the prior day when you're looking versus the prior day. Some of it is a little bit more spread out and so this right here.

Uh, 500. This would all be the trades that I took which was on day one of the news, and these would be the trades that I took where it was maybe day two or day three, or day four, Because sometimes, as you saw with some of these charts, we have multiple days of continuation, right? So on a day like this, um, you know you've got day one, day two, day three, it actually went higher, but on slightly lighter volume. So the the relative volume here versus the previous day is actually a little bit lower. But of course, versus 30 days ago, it's still up 50 or 500 or whatever.

It would still fall into that category, especially since this is a recent ipo breakout. Among the setups that I traded and made the most on, um, there's a couple of things that are sort of the common denominator, and again, I don't want to get into sort of all of that because that's I don't want to be too repetitive of what we talk about in the workshop. For those of you, they're going to watch this and they're going to go right into that workshop. But essentially the stocks that I make the most money on.

They all share similar characteristics, and I'll leave it at that. Then there's five of them, and that's what I'll break down for. you guys in the workshop And so wnw and um, uh, let's I'm trying to think of another one just off the top of my head that was also um, that would fit within that um, particular setup. Uh, maybe acy.

Let me look at acy um, acy rhe. So you know these all have, uh, they have a shared characteristic which is very critical to the ability for the stock to go up 500 percent or a thousand percent or whatever the case happens to be on that day. So you know I think that it's important to be mindful of this and also realize that I do better on stocks that have higher volume in the past. Um, so if I do price and volume here, let's see.

So let me see. Um, actually maybe it's maybe it's a nervous instrument. Um, yeah, that's all fine. So performance by price you can see here.

I usually do better on stocks under 50. I guess I don't usually trade higher price stocks too too much. but you know I will occasionally. Was it here? Oh yeah, so my performance by the instrument, volume and the the bulk of my profits.

Ron Stocks had 25 million shares or higher of volume and so the important takeaway there is that I found in 2020 I started to scale up my share size. So not only was I trading from five trades a day in 2018 to 28 trades a day in 2020, I went from trading you know, eight? What was it? Um, 87 000 shares of volume? I think a day to almost 700 000 shares of volume. So while the number of trades I took increased by a multiple of five, the volume I was trading increased by closer to a multiple of eight or nine. So not only was I trading more, I was trading more with larger size.

And the only reason I was able to take more size was because we had more volume in the market. There was more liquidity, so there was an ability to get in and out with much larger share size than I probably would have been able to in 2018 if the market has. If the you know trades or stocks that I'm trading in general, if the leading most obvious stock of the day trades on only five million shares of total volume, I'm not going to be able to be as aggressive as if it trades with 50 million shares of volume. The more volume that it trades, ultimately, the easier it'll be for me to get in and out with larger positions.

And I'm sure that there's traders out there that get into some of these stocks with 100 or 200 or 300 000 shares of volume that have. I don't know, maybe they. They haven't had a scare the way I've had before, and they haven't Kind of learned the danger of trading with really, really big size or they are just confident and comfortable with the risk. But the fact that you could scale your strategy this year from, you know, certainly 100, 200, 300, 400, 500 shares all the way up to 50 000 or 100 000 shares allowed for this year sort of an exponential curve in profitability if you had a profitable strategy.

And so you know, That kind of comes back to one of the biggest reasons that beginner traders lose money. They have no strategy. They might buy a stock like you know, wnw or rhe and you know, maybe on rhe. Let's say let's say on Wnw they they bought, um, you know, 5 000 shares at 20 bucks it went to 30 and they were up 50 thousand dollars.

Awesome. They went to 40. they were up 100 grand. You know it just keeps going higher and you're talking about one trade right there where even beginner trader could have potentially made a lot of money, but that's more of beginner's luck you if they did the same exact thing on rhe they bought it at let's say 10.

Well, this thing is now back at 3.45 and now you've got this really big loss. So ultimately, success as a trader, it requires the discipline to follow a strategy. And so the strategy. Uh, you know it has to be proven.

It has to be one that's proven You know, not just by someone else, but by you. you know it's one thing. if you learn my strategy, you can say I'm learning a proven strategy. So I'll put, I'll just start trading with real money.

Okay, but you haven't proven it yet. You haven't proven that you truly understand it. You haven't proven that you could be profitable trading my strategy until you've proven that you can profitably trade my strategy. You shouldn't trade it with real money.

And that's why you should trade in a simulator. And so for students that started trading in maybe 2018 or 2019 by 2020, hopefully they were in a good position to really take advantage of this opportunity that was in front of us. For a lot of the traders that have come in to the market here in 2020, I'm not sure how many of them were really in a position to take full advantage of this opportunity. It's I don't think that they probably had a strategy that was well defined.

I think there might have certainly been some amazing beginners luck, but if they then quit their job and they're like I'm gonna keep trading now because I made this money, well, then reality is gonna set in that what's your strategy? So I would say most beginner traders lose money because they have no strategy. and then probably the second reason most beginner traders lose money is because they have a strategy, but they don't have the discipline to follow it and that's something that even I struggle with at times. Um, now let me give you a little analogy. So let's put, let's just pretend for a second that I'm a chef and um, what? what should I make? I'm going to make.

I'm going to make some something. Call us something that I should make as a chef and you're You're my student. So I'm uh, you know, Gordon Ramsay. Whatever.

A chef. Uh, Mr. Chef Ross And you're my. You're my apprentice coming in here to learn how to cook.

So Jason says soup. All right? Okay, so so we'll go with it. All right? So I'm gonna give you the recipe. I'm gonna give you the recipe to make soup.

whatever kind you want. Um, crawfish, souffle? uh, cake, grilled cheese, eggs benedict? Whatever it is, I'm giving you the recipe. Now as an apprentice, as a what's it junior chef, I, I'm not. I'm not really up on the chef lingo.

Um, as a junior chef, you need to follow that recipe to a tea and all know by the end result, whether or not you follow the recipe to the tea. Me: At this you know level of experience, This is where I might improvise a little bit and the ability to improvise can be important. So to be spontaneous and say, hey, you know what? Here's a little. uh.

I'm making this soup. I. I didn't expect it, but there's a nice little rosemary bush growing right out there. Where in, let's say I don't know Southern Italy.

Let's go pick some of that and add that in. and you're saying Ross that that rosemary that was not part of the recipe. And then you have the soup. You say, oh wow, that was so good.

So the ability to be spontaneous, the ability to deviate a little bit from the sort of hard outline of the strategy or the recipe is something that you will want to be able to do to really be at your best. Whether it's as a chef or it's as a trader. But unfortunately you can't get into a place of deviating until you first proven that you truly understand sort of the the fundamentals of how all of this works. And so sometimes people will say Ross, you know you, You teach these specific strategies or specific sets of rules.

But then I'll see you take a trade where you know it's really aggressive and it works. but it's how does that fit in. And that's where I would say that I teach a Tr, I teach a strategy for beginner traders, and I trade a strategy that is suitable for my risk tolerance. So there are times where I take very beginner trades that are very straightforward and there's nothing wrong with that.

And then there are times where I'm going to take more advanced trades and I'm going to be more aggressive and I think that that's the right decision to make to capitalize on the opportunity that's right in front of me. As a beginner trader, one of the challenges can be being able to understand when can I start deviating and when do I have to just hold myself to this really tight set of rules. And I would generally kind of refer back to, um, how many days does it take to turn something into a habit, right? And so what if it's 30 days to turn, um, exercising every morning into actual part part of a habit. Not just something you're doing for like a week, but a real habit part of your routine 21 days Jt says, so if it takes 21 days to turn something into a habit for 21 days, follow the strategy to a T and see what your metrics reflect.

So for our students, just for instance, um, I'll just open this up here. So I we have a simulator that some of our students use and I'll just pop this up. So one of the things that we do as part of this is we measure your metrics so we can tell you without question what your performance is. so I'll put this back on the full screen.

So the reason we do this is because we want you to know your metrics. We want you to know whether you have the aptitude based on trading the simulator to put real money on the line so you know your your profit loss ratio, your average winners, your average losers based on the calendar, your profit trifecta. This is all the type of stuff that we do because we want to see whether or not you're at a place where you're learning the strategy, where you're really getting it. and of course a lot of beginner traders.

This is exactly what they need because they'll feel like, well, I think I'm getting it, but I don't really know and you need to be very dialed in with your metrics. And if you're not dialing with your metrics, then you don't really have that measuring stick to be able to tell you. Okay, I'm I'm doing well. I'm ready to start trading with real money or you know I'm not doing well.

I need to take another 21 days of just following the strategy to a T and prove that I can be profitable just doing that. So let's see, we're about 45 minutes in. so maybe what I'll do here, uh, for the next few minutes is, um, do. Actually, I don't think we're quite that far in.

Um, let's see. Well, maybe we are. But anyways, um why don't we do a little Q A and I'll answer some questions. Um, from those of you guys that are streaming on Youtube and Facebook, those you guys that are rewatching this later after the fact, um, you know, keep listening because I think some of these questions will.

I'll try to answer the ones that I think are most relevant to the majority of people watching. I encourage those of you guys who haven't already registered to my workshop to go ahead and register to that and again just to recap. For those that didn't already hear, everyone who registers will get a Pdf uh, copy of my small account strategy and a copy of my bestselling book. That's everyone who registers and shows up to the event shows up to the workshop.

Now the workshop will be a replay of the last live workshop that I taught and I actually just taught it two weeks ago. But by the time some of you are watching this, maybe it's a year in the future you'll still be watching the replay of the most recent workshop that I taught. Uh, so you'll watch the replay during that event we host at Uh 1 P.m daily. I actually have my support staff in the webinar software standing by to answer questions from those you guys that are in attendance and um, so they'll be able to help you and for everyone that's there, you guys will get an opportunity to join the classes and to take your trading and your education kind of to the next level by learning the strategy that I'm trading every single day.

So that's where we'll break down through the 35 chapters of the Warrior Pro Class Strategy Development in Um in in full. All right. So Eric says, uh, small Account Challenge Question Mark So that's a great question. I didn't do a small Account challenge in Uh.

2020. I was continuing the small Account Challenge that I began in January of 2017.. So since January of 2017, I'll just go here. As many of you know, I started with 583 dollars and 15 cents.

That was January of 2017.. I've now turned that into 6.4 million dollars in gross profit. That is real money. That's the real deal from less than 600 bucks.

No, those results are not typical. I did it to prove that, uh, I could, I wanted. Some people had challenged me to ask, they didn't think I could and I said, well, that sounds like a challenge And so I. I and I did it.

So uh, let's see averaging up or averaging down So that's a great question. Uh, so thank you for that. That was from uh, Abracus One. So Abracus says average upper average down.

Now my approach with trading is that I often average up. So if we have a stock like Wnw, we'll just look at this one again and I'll go to the five minute chart on it. So let's go back to this first day. averaging up would be when, for instance.

Um, let's just say if we're looking at this, I buy 5 000 shares. Um, let's just say let's just call out a price. Doesn't really matter, I buy 5 000 shares right here. At 44, it goes up to 50 and I add another 5 000 shares at 50..

So my average now is 47, right? So my average becomes in between 5 000 there. 5 000 there. that's averaging up. That's what I would call adding to a winning position.

I like to do that. I like to add to winning positions as it goes higher. I like to add a more conservative trader instead of adding. Might take the profit off the table.

But what I know is that when a stock is the obvious stock in the market, when it's making a big move, it's usually going to make. It's usually going to keep going. So I like to try to add and add an ad and ride that momentum as much as possible. Now in the context of a losing trade, let's say I was long on this.

You know, like right here it pops up right here and then flushes. I honestly would rather exit right here than hold all the way through the pullback because you don't know how much it's going to pull back and then add take a brand new position on the bottom. Now if I was caught holding through this drop like this, it drops, halt's going down and then halts the second time going down. At that point, if I'm already in it then what I would typically do is I would draw a line in the sand.

I would say okay, my max loss is, you know, wherever I would usually wait for it to bounce, I'd wait for the first candle to make a new high. I'd say okay, my stop is there at 31. That's my hard stop on the whole position and based on that level, I may decide to add off the low and keep this as my stop. However, doing something like that is called averaging down and usually usually that's throwing good money after bad money and it makes the loss bigger and it just gets worse.

So it's in the classes. I always say beginner traders should never average down and even for me, I would say probably. You know I'd actually be interested to know statistically whether or not averaging down actually serves me. I I would say that you know I'm in a place where I might do it at times and I can salvage the trade and turn it into a break-even trade or maybe a smaller loss.

but there's also been times where I average down and I just get smoked. so I honestly don't know if averaging down, even for me at my level serves me or not. So that's a good question. Uh, but I think it from a beginner perspective.

The general consensus of most people would be not to average down. So Diego says Ross, can you briefly explain psychology and trading? So yes, it's a topic that I could talk about for uh, for hours. We actually have a trading psychology program and uh, in that program, I invite Ted and Diane who do uh, trading mentor sessions, Uh, traitor Psychology mentor sessions with Um, with my students and with me. I have.

I have a session every single week with Ted and I've been having sessions with Ted for about 10 years and he's not. He's not like a, you know, multi-millionaire trader anything like that, but he is a, uh, he's A. He's a coach from the mind game perspective because the fact is, even once you've mastered your strategy, even once you've proven you can trade the strategy in a simulator. There are some people that when they flip the switch to trading real money, they struggle with a whole new hurdle of dealing with the emotions of loss and the pain that comes with experiencing loss.

And the frustration, the disappointment, the pressure. So trading psychology is a very important topic. I would say in summary, just to be brief about it, it is probably the biggest challenge that I continue to face, even today, even after having a five million dollar year. Uh, and of course, the pressure after having a year that good is.

can I keep it up? But the the big challenge is that when you experience loss, there's some studies that talk about this. When you experience financial loss, it triggers the same place in your mind where that fight-or-flight response comes from. which is your amygdala. And so essentially experiencing a financial loss is the same as seeing a you know, saber-toothed tiger running and charging at you in terms of your emotional response.

And so when you get when you go into that fight-or-flight response, you are in a state of what we would call emotional hijack where your emotions are trying to save your life and so you don't have time to think about the sort of analytical, intellectual part of hmm is this a good idea for me to do this? Or do that? Your body just goes into act mode and when your body is going into that mode, we call it that's emotional hijack. You are. you can trade completely from emotion and you can do some crazy things. And so for instance, you experience a really big loss and your your immediate emotional responses try to make it back so you average down, or you get back in and next thing you know, the loss is getting bigger and bigger and bigger.

and now you're doing increasingly, uh, just sort of erratic things to try to make back the loss until finally you hit a max loss. Or you even blow up your account in one day and then you step back and a few hours later, once you've come back down, you're looking at that and you're like, man, what was I thinking? So how many of you have asked that question with your own trading? What was I thinking? So for every one of you who have asked that question, there's a good chance that in that period of time, you were in an emotional hijack and you really weren't thinking. And so one of the best things that I teach regarding this is some of the coping mechanisms for experiencing loss without allowing it to trigger an emotional hijack and learning some of the earliest cues of what can lead to an emotional hijack. so you can stop trading right there before things start to spiral out of control.

That's really the best thing you can do because the fact is, trading will continue to be risky and you'll continue to be exposed to the risk of having big losses Because that's part of trading. They will happen from time to time and you ultimately just need to, um, find a coping mechanism to be able to handle it without allowing it to trigger. You know this, um, uh, you know this obvious, Um, you know, really serious situation? Okay, um, so thank you for that, Diego And yeah, totally so. Uh, Barbie says, um, when you paper trade so you can know you can make money on paper trading But when it comes to real money, that's when the emotions start to kick in.

And that's 100 true. And it doesn't mean there's not still a value in paper trading because there is a value in paper trading. However, you just have to remember that you don't want to get over confident paper trading thinking that you're making a ton of money and therefore it's going to translate exactly to real money. Paper trading is important for learning the basics of trading, the basics of getting in and getting out, and you had to use hot keys how to read level two.

And it's important to switch to start trading with real money as early as possible so you can begin the process of emotionally conditioning yourself to experience loss without having kind of big reactions. Um, let's see. so Killer Frost. Did I ever lose money As a beginner trader? Yes, I did.

I jumped into the market and I lost money As a beginner trader, my first two years, my first three years, I was losing money. I was not consistently making money. I would have some days where I made money and then I would have one day where I gave back three weeks of progress. and then I'd have another few days where I made money and then I'd give it back.

So I kept. I was in this pattern of three steps forward. Five steps back. Five steps forward.

Seven steps back. Five steps forward. Four steps back. Five steps forward.

Ten steps back. And that was. That was what I struggled with. and ultimately for me, you know, I was making money.

but I was losing more than I was making. And so the question was, it felt like I don't know how it felt like the machine was running, but it wasn't tuned quite right. I just had to make a few adjustments and so I had to cut out some of the trades that were causing unnecessary losses, and I had to focus on the right type of stocks to trade. and I had to cut losses a little sooner, hold winners a little longer, you know, But it was through that process of fine-tuning trial and error, making some adjustments, and then no, that didn't work, that's actually making things worse and then going back.

And that was all because I didn't have someone that I could really look up to. That was I mean, I feel like that was a big problem for me. I didn't have someone I could look up to that could really help me. As a as a coach and as a teacher, I was just doing it on my own and through trial and error and it was not a successful path.

It just took a lot longer to do it that way. Ben asks how valid our patterns, well, patterns are extremely valid. As traders, we're very technical and so we're focusing on charts and so what you'll find is that when one pattern starts to resolve positively, you'll start to notice this theme where the next three or four times you see that same pattern. It resolves similarly because traders are starting to anticipate the last time I saw this, it did this.

so this time I think it'll do that. So patterns are extremely important in the market, and learning to recognize those patterns as they're forming will certainly be a key to your long-term success as a trader. Okay, so let's see Um Alby says how much should be the average profit loss ratio for a trade, so that's a good question. and maybe I'll I'll end on that since we're coming up to about an hour and in the Um in the workshop that I taught the one from two weeks ago, I also did some Q A I was.

I wanted to show you guys some live trading archives and I didn't get a chance to do that during this episode, but I also did that in the webinar. so there's some live clips of me actually trading that you can watch if you'd like to. Um and Taxes. I do talk about in the classes as well.

Again, taxes are a tough variable because there's it's a tough one because there's so many variables. So just back to profit loss ratio. When I take a trade, I always ask myself if I have the potential to double what I'm risking. So if I'm going to risk 100, I want the potential to make 200..

So I always focus on two to one profit loss ratio. I don't always hit it, but that's what I focus on. So thank you guys for tuning in today! I want to see you guys in the workshop. I hope a lot of you guys end up joining.

I think you'll learn a lot from it. And if you're not already subscribed to the channel, hit that subscribe button and please hit the thumbs up and I will see you guys for the next live day trading morning show. All right, I'll see you all soon! So we're coming in here just under one hour. You.