All right. So in this episode, we're going to talk about being a Breakeven Trader We're going to continue the topic that we just began in part one. so if you didn't check that out, you could certainly do that. Or you could watch this and then go back.

It's totally fine. So many of you tuning in may be in fact, a break even. Trader someone who has two steps forward two steps back. We also can call that stagnation and trading, and we've sort of identified that there's two different places that this can occur.

The first is when you're not yet a profitable Trader at all and you've never been a profitable Trader This is usually when there's not a lot of strategy. it's you're just kind of going sideways and that's sort of because you lack competence. You don't really know what you're doing yet. You haven't developed a strategy.

Okay, that's fine. And then there's the second phase, which is you know what you're doing. You've been profitable in the past, but now you're in a rut and you're having a hard time kind of getting out of it. and many of us have been there.

Whether it's for a stretch of two weeks of being a break, even Trader A month, Two months, Six months. Almost all of us have been there for at one point or another. I Think my longest stretch since Turning the Corner would probably be about six months. We're over the course of six months I Made money, then gave it back, then made money, gave it back.

and at the end of six months I Really didn't have much to show for that period of trading. maybe a little bit, but but not much at all. So basically break even now in a lot of ways. that was.

uh, that was actually me doing exactly what I needed to do to manage risk during a market that wasn't really hot for me. I was reducing and minimizing my downside. So when things start to heat up well, I just went from the plateau to pulling away. but that obviously requires confidence, the ability to be willing to start to step up and take take risk.

So from someone in here who's been in a um, period of sort of sideways trading Breakeven trading and then pulled out of it I don't know if Timmy or Marcelo or Nick you have, you can comment on that moment of starting to pull away. Yeah, yeah, absolutely. I mean I've already had way too much to say this. come on comparably to everyone else.

Um, for entire 2021, you guys were killing it. Um, at the beginning March-ish Uh, the GameStop grades like I was responsible enough to trade it probably until like the last one and I took a little bit of an hour on cost and GMA yeah, Um, and that kind of put me in like a sideways folding pattern to where I would be like too aggressive, too conservative, too aggressive, too conservative, too aggressive, too conservative. and I didn't really lose money. Um, I lost a lot of time I guess and it was very frustrating.

Um, there was there was so many so many times where it was like I think I'm turning the corner and like it's like it was almost like right on. cute once I thought I was turning the corner uh Behavior would change and you know something. you start noticing after a while after it's happened two or three times and then uh, you know Behavior changes I get a little aggressive I start thinking I can play with the big boys you know. Shout out to Manoli and uh, everyone else in the room and you know my strategy would start changing and I'd start going from things that actually was making me money to you know, trying to trade like other people and that was like a big thing for me.

Um so I mean honestly, there were a lot of different things that I I had to work on like like it's I think people oversimplify life a little too much. um I mean it is simple, but it's not simple like you know. It's like why do you come in and like you? You do things that aren't in your strategy. um maybe you ate something that doesn't agree with you the night before and you're a little too emotional because you know, like, like you just don't.

You're not. everyone's not looking at like, like every little detail of their life for sure. um a little bit of a side point, but what I had to do is I had to realize like like I just spent a year of my life um doing this yeah and I had to like come to terms with like well it's it's basically like a vacation for me I'm trying something new yep it's an attempt. it may not work out um uh and when I run out of like my PDT money like if I have to go below PGT I'm gonna get another job and that's fine and I had to like start structuring it in two ways.

One was it was like a vacation so like I would try to get out a little bit earlier and go surf or go go to the gym or go work out and then I did on I did everything I possibly could on outside of trading because I I've already did everything I could in trading and it just put me in a circle. but outside of trading every possible thing I could like break down in my life um in the charts uh I got a tablet I started reviewing everything every day. every chart that was moving I took a take a screenshot of it still to this day. um I have this I have notebooks that like really logs in I prepped it for the next day.

Meditation was huge and being able to like have all these new insights but also be able to implement them. Yeah, so like there was like a big disconnect in the um like knowing what I should do and being able to implement a meditation was probably the only thing that was that really really made the biggest difference in being able to implement that. So I mean it's complex and you kind of have to like accept it is complex. Yeah, like it's not.

It's not a simple thing, there's so many people and if you are Break Even too like you are in a fantastic place because you're You're facing everybody who's trying to take your money like and if you're able to get in and get out and keep that you're you're dealing with like market makers who are like having the spreads as wide as they can. Um, you're dealing with people are trying to sell short Longs who are trying to get out before you payment for order Flow full payment for water flow. all these different competing parties that are trying to get your money and if you're able to stay stay in the middle you're you're doing something right? Yeah, and it doesn't mean that you're going to be successful because there is like a lot of stuff you have to work on to get past these like different hurdles that you're gonna face. Um, but you got to start like studying yourself.

Well you know the default for anyone to start trading is they'll lose money. so that's that's fine, right? exactly? People think oh I'm breaking even that any idiot can break even well and that's actually not true by itself is already a couple steps above right? right? Recognizing that helps with the frustration that will put your emotions out of whack when you're trading. So like if you're changing your behavior because you're break even um, middle of the day and you're frustrated, you see someone make like 10 10K Sure you know you say you saw Jorge make 50k or whatever. Yeah, you know if you see these big numbers coming out and you're like why why am I not there I better size up you know right now.

Um, you gotta ask yourself how long did it take you to develop this strategy that you have right now like you think you can change that in like a split second decision in the middle of the day and like be profitable with that like it just doesn't work like like so I've already staying present with yourself and like recognizing yeah yeah yeah yeah, yeah. really hard meditation really helps with that. Um, one other thing. one last thing is I have talked too long is the uh.

the book uh Mastery by George Leonard points out this. um points out this kind of it's a very American thing. Uh, we all think life is like this upward kind of trajectory. like this.

like a stock that's like just going parabolic, right? Yeah, and he was like a a keto or Judo guy and he's like life really looks more like you have these little spurts of progress and it goes sideways Spirit of progress. and it goes sideways and converted progress. and it goes sideways until you reach different levels of Mastery And it's because there's a um, there's a time that it takes for your brain and your body to like get adjusted to these new improvements that you had. So like, if you're not used to making you know you're not used to making 70k on your own, sitting at your house, not having to talk to anybody and you do that in a year and you're psychologically not ready for it.

There's stuff that's gonna happen from like I experienced that I bet there's a lot of people tuning in who are like I think I can get psychologically ready. You start changing your behavior absolutely and you develop an expectation that I'm going to be able to continue to do this forever. Absolutely. And then um.

And also like on the Lost side, if you're not ready to take those bosses, your behavior is going to change as well. shifting from profitable Behavior to impulsive behavior. Yeah, and so like it's all these little things which actually create like the that's good that you have these plateaus. It allows your body and your brain to get used to the variation in the trading experience.

I think I Think something else that a lot of people, especially beginner Traders don't understand is that the rewarding trading, especially when when you're going through the learning curve doesn't come as you go like for example, when you go to the gym, you're going to see results in the first week, You're going to see results in the first month and they're like it's like you put in work. You get results you put in work. You get results in trading and surviving the learning curve. You can put months years of work without seeing a penny back.

yeah or more. negative or negative exactly. So so it's also really good to ask yourself what are some other ways I could get paid like emotionally from this or right like as an experience like this is something new that I'm doing it's it's like like we have, we have the blessing to have this much capital in your account to go and like play with it on the market and like to be a part of this game. Like like how how can you learn from this, How can you grow as a person Like There's a lot of ways to get paid and it's not all money, right, exactly.

So you have to adopt that mindset. But the reward let's say, if you ever make it to the other side is going to come all at once. But once you finally survive the learning curve, don't expect to you know, give and you get back. Even you get back because this career is not a it's not like that, at least at the beginning.

Ted and I have talked about this um phase of getting into the place where you are profitable for days or weeks or maybe even months and then having those days where you give it all back as an intermediate phase of trading. then it's a necessary Plateau that a lot of a lot of people you know pass through. but the passing through it often takes longer, much longer than they expected and that's where you know the frustration that Nick mentioned and and the the way that that can, um, really intersect with the individual's own experience of themselves. So in terms of um I think you touched on this Larissa when you were talking about I might have been you might have been somebody else.

But anyway, talking about having that expecting expectation of getting there more quickly which is something we hear with a lot of Traders You know having that expectation of themselves that they should be getting there more quickly and a lot of times it's based based on well. I'm a fast learner I think I said that right? That was my word. Yeah, I'm a fast learner you know I learned all of these other things and and not really. It's almost sort of similar to not having the kind of respect for the trading or the market that you would for like the ocean or a river.

You know that it can be very dangerous. How long does it start to take a business to profitability? Yeah, right. in order to become a doctor, right? right? right? Exactly. There are similar things and and but oftentimes people's expectations.

Um, you know that's the part that really can help with acceptance is getting those those expectations in line and seeing this as you know some of those stages at least as an unnecessary part of the journey like you were talking about from that book. But the one of the the pieces that I do think about is what about when you become too comfortable there? You know when you're two right, too cozy in that space of not growing, what helps for your job and just rely on your training? Yeah, I can I can totally relate to that I Feel like last year when I was having pretty good progress and I could have definitely scaled up. It was just like a comfort thing I feel like 300 bucks a day? Whatever it was to 300 I'd just take it and I would just leave because I mean for me, it's like it's more than enough to do whatever I need to do. but in terms of actually like scaling up and becoming a better Trader throughout that time I definitely could have done a better job, just not being complacent on like I said earlier.

not looking at my winners every day to get better at the winners. Just like getting better at not losing as much. So yeah, and not doing that definitely. I I Think hurt me today not being able to scale up as much just because I'm so used to that size that I've just been accustomed to for almost two years now.

Yeah, I think uh, this the stagnation after profitable I I Think a contributor to that is things are going well so you don't feel like you really need to hold yourself to the standard of journaling or taking screenshots or reviewing your recordings. You're just kind of coasting. and that's all fine and well, until the market shifts and now the strategy you've been so dependent on for this period of time isn't working as well because you know the Market's always changing and it goes in. Cycles I mean a strategy will work really well, then it might not work as well and then it'll come back.

But you know of course the best Traders are able to adapt to the changing markets and and are able to kind of keep themselves improving which is a little hard when things are going really well because you might feel like I don't really I only need to. You know if you go to the gym a lot you get you know in really great shape. the kind of well I can maybe ease off a little bit and then next thing you know at this point you've got to be Tom Brady and just have it For the Love of the Game Right right? Yeah, But the other way around also applies whenever. for example, right now we're in a burn market and we're in a market that even the best Traders are not performing is good right? That is no excuse for you to be like okay I can I can I can do terribly bad in in this.

you know in this in this market because everybody else is struggling. Sure that is not. no. That that is no excuse to you know be comfortable in a place of losing money or be comfortable in the place of being Break Even You always got to be proactive in trying to get better regardless of the circumstance.

Yeah, in like in these current conditions, this is a time to get even more curious about right and and to not take it as as personally that okay the things that you're doing aren't working as well as they used to. that's not a condemnation of you as a person or even as a Trader it's it's more of an invitation into Okay, if this isn't working what will right and and approaching it with that mindset of you know this is a time to discover something new. and also having the mindfulness of of knowing when going sideways is enough because before I became successful in small caps I Remember I was trading large caps like um, earnings and that type of stuff and I was also for giving in that too but also I always I Always had this type of mindset that I'm never going to quit anything I'm always going to figure it out stuff like that, but in something like trading that can really harm you. So I got to get to until I Read this book called a Dip.

Funny enough, I had to I was able to get into terms that me quitting and me quitting this large cap strategy and me quitting you know that path and me refocusing my energy into something else was also part of being having a winning mindset of you know I only have this energy I only have this time for me to focus on something super super deep. Me choosing to quit this strategy doesn't mean that I'm a failure, it just means that I've tried it enough I've been going Star Wars for long enough I know that it's not for me, let me pivot and try something else and you know here: I Am you know there's so many different components to trading? You know there's all of the actual figuring out how to trade. There's all the emotional components. It often makes me think of the Rubik's Cube you know Oh well, I got one side of the Rubik's Cube and then yeah, gotta get like, okay, what does it take to get two sides and and every time it's like kind of like a groan you're like I have to screw it all up again to try to get and what if I can't get back to three sides? What if I never get back to three sides I Like what you said before though, Dan how it was like being Break Even or even like having losses that result you to a break-even Trader So to say is almost like a necessary Plateau that you have because I know for sure that if I did not have the losses I had I would not know how to deal with them right.

It almost took me having the losses that I had or giving back my entire month which I've done time and time again to understand how not to do that. or at least how to right? You know, here's my one huge red day now, my next one now, my next one. No, and almost sort of mitigate that. But then the other side of that issue is all right.

You're mitigating those losses now. but how are you increasing your winners? Because that's where I'm at Right now is where each of them are almost one to one. So to say, like long-term speaking, um, you know you're You go through those big drawdowns and you learn how to mitigate them. But now you need to learn how to.

And even as Marcelo said, if you don't put yourself out there, you don't just take the trade, You're going to be complacent and just you know comfortable in being that little sideways And it's not going to be like that forever. But there will come a point in time where you gotta say Hey you know now what's next Now how how do I improve from here? One of the pieces that I think is really striking when I work with Traders is that sometimes I'll be talking to somebody. and then as we kind of review maybe the last six months or something or even the last three months. you know.

But review a little bit about. um, you know, maybe they've been working on trying to cut losses and they've gotten to a place that compared to six months ago, they're cutting them so much faster that they've been. You know that that when they are having those red days or a small red streaks, they're having a situation where it's like they're They've cut it in half What they're losing. Um, maybe they're trying to stay in the winter is a little bit longer and and that's improved.

They're saying you know by 25 or something. It's not until they actually talk through that stuff that I can see them beginning to become aware of it. you know And and we talked about that a little bit earlier. and Ross was talking about the importance of talking through something even if you're just talking to yourself.

you know, like and the same thing when you're in a trade. Sometimes talking it out loud can help you get really grounded or more aware of what you're actually doing. Um, but all of all of that, all of that is really important. And coming back to what Ted was talking about about the shark cage.

it's like when you're in the when if you've created a safety around you if you've created that situation. and I'm thinking about a Trader that I have worked with Um for a while and he followed. He follows a similar strategy to Ross and so Ross is like you know the mentor that he's always paying attention to and in one of our conversations you know he felt like he had been frustrated and he pulled way back on um what he you know he was doing one trade a day and he put himself in kind of return to rehab and and all this stuff. and then he said oh well I you know I did these things today so tomorrow I'm really going to take the day off I'm trading.

um but he was punishing himself into a box. you know, really? because the other thing he said is I'm just really bummed out about it because you know we're seeing the we're seeing the movement that this is where Rossly says you have to go aggressive and so he he'd been Trading long enough he'd been Trading long enough. that he saw what was setting up. He saw the conditions.

He knew what he should do, but he was tempted to be in the in the short cage. Yeah, because that's where he had because that's where he gotten used to being I Read a quote just recently that said a ship is safe on the Harbor but that's not what it was built for, right? And that's sort of like what you're saying. and by taking that chance of actually getting aggressive in those places where he knew that that was, you know, taking that shark cage off and the places where he knew this is where I can go for it. that really helped him to grow out of that stagnation.

A lot of this comes down to the word Trust is what's really coming up as we're having this conversation. Um, all of the it's like the negative experiences that you might have as a Trader and the mistakes that you yourself make can really erode your sense of trust in your own trading. And when you have you know as you know in the in this you know trading. Journey Getting to those places where you're actually making good trades um I mean I've worked with traders who you know they're they're uh, accuracy.

You know, percentage could be even like 80 percent and yet they're still not profitable. Traders Because even though they you know day in and day out, they're able to prove that they know what they're doing. They have those emotional, emotionally hit days where they give it all back right? and you know the aftermath of when that happens is this complete loss of trust in themselves as a Trader and I've you know and I've spoken with them after days like that I need to throw away everything I Thought I was doing everything I Thought I knew nothing I'm doing is working and that's actually not true And and that's exactly why you gotta get out of the Breakeven pattern as soon as you can because if you stay there for too long, you get into that mindset of you lose all your skills, your intuition as the trader goes away and then you just suck there forever and like I don't want to mention any names but I Know some of my trading friends that I've been receiving for forever and it seems like they're stuck there no matter what they do. So yeah, Break Even is not a safe place to stay forever.

It's something that is good. It's definitely progress because you're not losing money, but still a place that you're trying to actually try and get. you should actually be trying to get out of, right? Yeah, yeah and you know that it comes back to taking steps that are going to help build your confidence as a Trader Looking at the things that you're doing that are working well, taking time to look back at my progress over the last three months even if it's not monetary. but my average losses have gotten smaller.

Or maybe they've gotten bigger, but it's It's something you have to spend time looking at right and really approaching this with curiosity. What am I doing that's working? What are other people doing right now that's working? Am I willing to explore what's working for someone else even though I've not tried that before and just really try to keep focusing on your growth as a Trader But you know, don't discount the fact that being break even by itself is some degree of an accomplishment, right? So you know you're you're making progress Now it's what are my action steps for getting you know, getting through that turning point and you know for and for me, when I was going through this period, my biggest turning point was discovering by looking through all of my metrics, it was discovering that there was actually a sort of strategy that I had I just didn't really realize or identify it as that. But when I looked at that I discovered you know this is the common denominator among all my winning trades. This is why I need to go all in on and everything else I Need to put it aside for right now.

it's not throwing it away, but it's just I'm not going to trade these news trades or these options trades I'm just going to focus on high relative volume up 10 straight momentum and then I Gave it some time, reviewed my metrics and I was pleased, right? Yeah, and then from there I continued to grow. So for those that have been tuning in for this episode, I Hope you find this interesting. We've got a couple more episodes that we're going to be recording. I Got one last thing.

Please cap it off. Sorry, yeah, please do. Um I I When I was turning the like when I was like kind of spinning but not going anywhere I read something about uh, like when you're playing poker at a certain point like you're you gotta just stop playing at tables that are too hard for you because you're not going to win at those. the players are too good.

If they're too advanced, they know exactly what you're going to do, like you're going to get faked out. so you just have to play at the kitty tables basically. Um, and that's what I started doing and it actually helped a lot. So how about this? I stopped playing I stopped playing Uh, Ross's strategy by the way.

Okay, all right so so how about this. How about for the next? The next episode we're going to talk about how to day trade. how to day trade like a poker player? Let's see where that takes us. All right? that'll be coming up next.

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