All right. So in this episode, we're going to talk about stagnation in trading, which is the phenomenon of going sideways as a Trader where you're making two steps forward and then two steps back. This is something that I dealt with chronically as a beginner Trader I had a little bit beginner's luck when I first got started and then I kind of got into this cycle where it felt like every three to four weeks I would have a big loss in one day that would wipe out the previous you know, three four weeks of progress. So essentially I was taking a couple steps forward and then right back to where I was.

and so over the course of months my account was not growing. but of course my cost of living was a problem I'm you know, spending money and so I was having to take money out of my account to pay bills or I was just letting bills accumulate on my credit card to keep as much in my account as I could. so I could hopefully have enough money that when I started to turn the corner I could Excel But this put me sort of in a trajectory that was not going in a good direction because I was accumulating debt I was barely maintaining PDT in my account and I was like I need to turn it around or I'm going to run out of time I can't keep doing this forever and so I have sitting here at our trading Summit a group of traders who are at various points in their career and I thought that we could talk about this topic of stagnation and trading and how to break through when you kind of are hitting a little bit of a I don't know, you're at a plateau and you're not excelling. So I've got Timmy Marcelo Larissa and Nick and I have two members from our trading psychology team Ted and Diane here and so we're going to dive into this topic of stagnation and trading.

so who wants to kick it off? Well Ted why don't you kick off? Sure. Um, yeah. this this idea has sort of been kicking around for a while in my head with a lot of the traders that I work with. Um, a lot of just traders that we know who what what seems to happen is.

Um, you get on the roller coaster, you have all these you know these highs and lows that occur and the first thing that if you're if you're going to make it as a Trader one of the first things I think you really need to learn how to do is to control the loss. So a lot of Traders come in. they don't have the discipline. um they are treading emotionally and you know pretty big losses can start to accumulate as a result and so as they start to rein that in, you know they reduce the share size, they reduce the number of Trades that they're taking and their the losses are getting controlled.

but it just plateaus everything. kind of compresses yes so you don't have which is you know on the one hand good. I Made the decision earlier this year to step off the roller coaster right? I was like you know what I've been doing too much roller coaster trading and you know it's an expression I use basically when you have really big swings in your P l even right huge green days and big red days and you know you can trade like that and be net profitable and in fact be very profitable. but there's a lot of stress that comes with it for sure.

And you know besides the fact as a beginner, Trader usually those ups and downs are leaving you break even because the losses are so big. So when you try to tighten up the losses, you're reducing risk and then you know the home runs also go away too, right? And so now you start trading in this sort of just you can trade in a sideways fashion. better than a roller coaster, but you can spend a lot of time there. and yeah, you know, and given you know various market conditions, you know like you know for like right now for example that might be, you know the the best possible outcome right? you know I just I Literally just need to survive this time that we're in without experiencing such a big loss that it can jeopardize my career.

Yeah, um, but even within that I think that there are adjustments that you can make you know, staying curious, staying. you know, in that zone of you know what's working, what's not working and how can I start to to build on on what I'm accomplishing. and I think the thing that I've seen with so many really successful Traders you included um, y'all's ability to to get really aggressive when it's called for and so not everyone. well not anyone I think can start out in that place um but being able to put your foot on the gas when it's going to serve you? Yeah, and I think a lot of Traders get in this place where they've had, you know, too many hits that they've taken that they're very afraid of that gas pedal right? I'm seeing I'm seeing some heads nodding here.

yeah and I feel it too. but well to me you you tell me yeah. I mean I'm definitely in a period right now of you know, just right at all-time highs pretty much maybe 900 bucks below Last month was just like what Ross was saying. a couple big Winners couple big losers.

it's just really just chopping around and I think what it comes back to is some of the where I'm getting gun shy almost to where I hasn't been working very well or I've taken a couple big losses and when I see something that is perfect for my strategy I'm hesitating and just yeah, a couple seconds of hesitation. entry's gone I'm getting in a little higher now if I do get in and then just not as comfortable in those trades and getting the confidence back when I know it's not like what Marcelo was saying earlier. you're not if you're taking the right trades, it's just not working out. That's completely different than just breaking your rules and trading something that you're just not supposed to trade.

And that's where the mindset for me too I got to get better at. in terms of it was a good trade, it just didn't work out whereas certain trades are just terrible and I need to not focus on those as much. So I see I I Feel like like where's confidence come from? Where does the ability to be really confident in your trade come from To me, it starts with a track record a very recent history of really good accuracy Some Solid success and it can be small dollar amount, but it's like what I'm doing is working and it's almost. It almost feels inevitable that you start to lean into that when something is working now.

I Suppose there could be people in a stagnation phase that are, um, I I I just one I wonder if they're very confident and still in stagnation? Or if they're in that stagnation because they sort of are lacking the confidence to scale up? Is it is it a lack of confidence that's holding them back? or is it a fear of loss? I'm sure it could be both person to person, but what do you think? Ted um I Think Well, because I've seen people get to a place where they're they're showing up and they're trading. and their competency does seem to be getting pretty. you know, pretty high. but the confidence isn't coming with it.

and a lot of times that's You know, when you've racked up some losses, it is really hard to shake those off. You know? So you're constantly looking at. you know this memory of oh, this could happen to me, Um, it's it's an image that keeps as we've been talking today that keeps coming up is um, you know for a lot of beginning. Traders You know the stories that you hear of.

You know I started trading like two weeks ago and I made twenty thousand dollars, You know I know what? Yeah, well and but that's it's. kind of like um, you know, going to the ocean I'm going to jump in I'm going to take a really long swim and I have no idea that these are shark infested waters. So you do it confidently. but you have like, total confidence because you're not even thinking there's anything.

kind of waiting for you. Incompetent. Yeah, that's that's right. Um, and you know you get bit and maybe you get bit several times.

Maybe you get chunks of you. You know you know, ripped out and then the next thing you think it's like, well, man, these are shark infested waters I Need a shark cage? You know? So you get your your shark cage around you and you're protected. Um, so you're not. You know, getting bit anymore, but it's really hard to, you know, swim across a distance in a shark cage.

you know. So there's no progress really being made. but you're just. you're just hanging back in this place.

Okay, I'm protected. but then you know at some point what's the, what is the point of trading at all? If if there's no sense of this is the progress I'm making I Think part of the reason why a lot of Traders find themselves stuck in this going sideways pattern is because there's this this misconception that just because you're putting on trades, it means that you're a risk taker. Or it means that you're actually accepting the risk of loss. Or you're accepting the risk of a drawdown or accepting the the risk of a big loss.

Which in reality, most people and most struggling Traders going sideways are not accepting the risk because you know, As you said, they they rather sing and not go anywhere as long as they're in that cage rather than actually putting themselves out there accepting the risk of getting bit, but trying actually to move forward and take trades. And this is assuming that the reason why they're going sideways is because of a confidence and not a strategy issue. Um, but yeah, it's just the mindset mindset thing. if you have a profitable strategy, but yet you are going sideways because of their mindset, it's you just got to put yourself out there.

You know, set stuffs in place, and actually go for the setups that take your strategy dictates And you know, no second guess yourself. But just a few minutes ago, you said go with your initial gut feeling. Oh yeah, no. once it's informed, once once you're done.

Okay, that's it. That's the caveat. Okay, yeah, going back to that earlier. I was saying that you know a way to, uh, remove fear off of your trading Is that sometimes when you're looking at a charter, when you're looking at the level two, there's a quick first initial thought that pops into your head of a trade idea.

but usually because of the fear you get yourself. you took yourself out on the trade. And of course that is the trade that goes the highest or is the best rate of the day. So what I was saying there guys? Um, was to go with your initial thought because your initial thought is your instinctual thought that doesn't have time to implement fear to it, doesn't have time, doesn't have time to, you know, convince yourself to get out of the out of the trade or to not take the trade at all.

So you just got honestly. you have to go for it and then after the fact, try to manage what happened, try to learn from it. try to try to see what went right and what went wrong. but in the moment of just pressing the byte button, you just have to go.

So I have to go and no stop thinking and just do you know and you're right that that is educated and educated intuition, right? It comes through accumulation of a lot of experiences watching where you see a sediment very quickly. you're like I like this and right and I find in my trading that sometimes I'm I'm in a trade before I even realize because it's just it's like autopilot and that's that can be when I'm trading so in the zone. Yes, because I just I see the setup and I react. Um, you know in certain markets I I can find myself sometimes that that's a trap where you see something but then what you don't realize is happening in that moment.

you're so hyper focused but you've lost sight of the greater Market Center which is called and so that's where I do think it's important to be able to have that sort of stop Gap just for a moment to say wait, what? Market are we in is this time for me to be going all in right? So I don't just go purely on Instinct But uh, so did you have a period of stagnation in your trading? Yeah? I I did for sure I mean the word the word break even Trader resonates with me so much because before I turned the corner which took me by the way, two and a half years of failing every day, every week, every month. Um, I used to be. you know for the first year I used to be a losing Trader I was losing money and going into a downtrend. but for my second second year and a half I became a break-even Trader and a lot of people underestimated power of being break even and going sideways because you're not making money, you're not living the dream.

you're not raining Lambos you're not a millionaire yet and it's like you're just working really hard. Yeah, you're working really hard for nothing. and then you feel you watch your friends work in a minimum wage job and they're and they're making more. and you're You're working all day, every hour.

and then they're like what you want to go out with us. and even though it feels like a failure is a big win because once you're going sideways and let's say you're actively trading every day, something in your strategy or something, whatever you're doing is actually netting you money. The problem is that you're not able to keep it I Remember going back to my Excel sheets because that's the way I used to track my metrics. but the reason why I didn't quit was because I saw that I made 70 000 in games somewhere in my trading, but I lost 70 000 somewhere else.

So you know, a big part of me turning the corner was diving deep into my metrics and removing all the stuff didn't work and just keep hammering whatever it was working. So um, you know it's too. it's there's two different type of Break Even trailer never even Trader before turning the corner and being ever given Trader because of fear after being profitable after putting profitability just because of fear because of Market sentiment I Think that's so important that you said that? Marcel Because um, I'm a case in point of being stagnant right now for this entire year and I am Um, first and foremost learning that acceptance and the definition of progress are really what's going to keep me afloat. Because um, just to very briefly give you like an example or some context of where I'm at right now just because I'm in a uh, it fits with what we're talking about.

But you know, after my beginner's luck, I was straight back down and it wasn't until I actually accepted where I was and started like maintaining small, consistent goals that were easily attainable for me that I was able to grow a very small account all the way back up. Um, at that point though, you know I had my losses. Um, you know, whatever, it wasn't a stagnation, it was just like a deep big losses. um I was I was back then again at a lower point and I thought, well if I built it up once I can do it again.

But what I failed to realize was that like our Market we were in at that time wasn't calling for me to be able to easily do something like that. So once again, I had to Define I had to accept where I was and then Define Okay, what's going to be my progress now? my progress at this point. As you know, let's face it: I'm still a beginner Trader I'm only two years into my journey that's considered beginner for me. So what's my progress now? My progress is actually as a beginner Trader surviving right now.

Exactly. So if that means I have to accept I'm not going to be able to make a living off of my trading right now, which I you know it helps. A side note: to have a full-time job or some other side income to take the pressure off of your growth as a Trader But aside from that accepting, you know you're not going to be able to have a reliable source of income just surviving your Market But you're going to be able to stay in the game longer and you're going to be able to learn from that. So now you know.

After my low period at the end of last year beginning of this year my curve has been like this. but towards maybe like you know September October I'm slowly slowly so slowly getting back up there and that you know still Break Even but still not exhausting all my efforts to the point where I say I have to give up So but that's a great thing though because whenever you whenever you get to the point not you uh, I mean every other Trader gets to the point that you actually start to thrive. Do things can happen. You're gonna be digging yourself out of a giant hole or you're actually going to be making money right? So it is key to go sideways in whether yeah, in markets like this or if you're a beginning Trader at the beginning of your journey, it's not a bad one.

Go inside with it right? Because once you finally Thrive assuming you make it there all right, um, you're gonna be, you know, actually building profits on top of profits. rather than digging yourself a massive hole and then driving whatever the market gets hard just digging yourself out of the hole, then you don't get out of it. and then the market is called again and then yeah. You're in this down training soccer forever Exactly.

But you're going sideways. Whenever you get good, you're gonna just build up from it, right? right? and you know, work on yourself. Don't worry that other people are making money when you're not. you're not on the same level.

No one is on the same level as anyone else. Just work on If you're in that same sort of situation that I'm in right now. just work on yourself and work on if you can't grow an account at this point, surviving at the very least until you know that you're confident enough to do it. and you know it comes with like a lot of things in the market too.

I Found that during some of the times where we've had the hottest stocks going in 2022, I wasn't able to trade them for broker reasons or buying power reasons and that can, really, you know, set a fuse where this is my only chance to sort of start growing. And I can't do it because I'm physically limited, not mentally limited. But then that affects your mentality of trading. Sure, Yep, yeah, so you know that's just part of that's just part of the deal.

Everybody's going to have an issue at some point with their broker or whatever the reason is aside from mentality, but it's just learning how to deal with that and not letting it get you off of your track of where you're at. Just stay grounded and remember your long-term growth and your long-term goal goals. Because if you lose sight of that even for a second when you're trending sideways like Marcelo said, it's so easy to just dip straight down and then you have maybe another year just to get back to that break even spot you're at before your high. So yes I Defense: I Think Stevens comes before offense, right? So basically you got to learn how to not take those big losses like there.

There's a lot of things that you can do to keep yourself from being in the wrong spot at the wrong time. and until you have that, it really doesn't matter how much money you're making because you're just gonna scale it to where you're just breaking even or losing at the same time. So if you can, like cut out those bigger losers I think that'll help a lot. Yeah, newer Traders out there.

Well I think um, you know a lot of people quickly discount that being a break even Trader is actually a it's progress on the journey yes and that there's something that you have there. So if you're a break even Trader Tuning in and you want to learn more, let's go to episode two of being a Reiki trainer. Hey I Want to thank you for watching this episode I Hope you really enjoyed it. This channel has crossed over 1 million subscribers as thanks to viewers like you.

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