One of the greatest things about the world we live in today is unlimited access to information. I think back to when I was getting started with Tim Sykes over 10 years ago, Tim was about it out there for discussion of real trading knowledge. Today it’s a great thing there’s so much out there but it’s a lot.
So today I’m gonna talk about the five secrets to online trading that no one tells you but I really think you should know.
Today I’m gonna talk about the five things you might hear about when you’re out there on blog or you’re out there Googling looking for trading tips.
Table of Contents
Risk
and the first one and it might sound counterintuitive but you know I watch a lot of these trading articles, I’m looking to learn, I’m also looking to see what other people are doing and the simple fact is a lot of people don’t really talk about the fact that there’s risk okay.
You’ll see the lifestyles, you’ll see the big profit numbers, but a lot of the times they’re not telling you that hey you can lose money, you can lose a lot of money, you could blow up your entire account.
So keep in mind trading is inherently very risky especially low price stocks. Now remember there’s a reason they call it risk to reward, I mean you can’t make any money if you don’t risk some, but I think so many times out there you’ll see that ratio skewed where a lot of newer traders are risking big money to make small money and think about that, I mean think about that you know what I just said.
If you’re risking a 1,000 bucks to make a 100, you know if you have a decent win rate of 50, 60, 70%, it’s not gonna work, I mean even if you’re consistently profitable with the win rate, you’re taking big losses and small wins, it won’t work over time.
So know that there is risk, know that there is huge risk okay. This is something Sykes talks about all the time, I mean he’s been doing this for 20 plus years, I’ve been doing it for 13 years now and he’ll still say trade scared, trade scared, he uses a lot of funny analogies, I won’t use ’em here, you know some of ’em but you know trade scared, because you should be scared.
So remember there’s risk, there’s a lot of risk, but if that’s in the front of your mind you’re way ahead of the degenerate gamblers.
Front end Loading
Second thing I want you to realize and again this gets left out of there’s a lot of great educational content out there, don’t get me wrong, I love YouTube, I don’t even watch TV anymore, I just watch YouTube videos and mostly educational type stuff, I always love to learn skills, but this is something I don’t necessarily hear talked about either is it’s very front end loading okay.
You are going to struggle and you are going to struggle miserably in the beginning okay. I mean this might be the first article you ever hear that other than I mean Sykes talks about this too, but I mean it’s going to suck, it’s going to be a grind, you’re gonna be like I don’t, yesterday I thought I knew somethings, today I don’t know anything, you know I’m three months into this, I’m six months into this, I’m still not getting it.
But what I want you to know is if you stay diligent, you keep grinding, you keep showing up every day, even when you don’t feel like it okay, remember that’s and many of you might be saying well jeez Tim sounds like the path to success in anything okay.
If you’re starting a business, if you started a restaurant and you don’t feel like opening the restaurant today, good luck. You show up and you open that restaurant no matter what, if you you’ve a customer service business and you’re like well I don’t feel like doing service calls today, good luck, your business is out of business.
Trading is the same way, just like a business it’s really front end loaded and I look back to when I started my business in my early 20s, it was a lot of long weeks and for years the only money I took out of that business was basically to pay rent and buy food, that was it but year later, two year, three years later, then you hit that upward hockey stick, you know with business and trading you’re gonna be at that foot of the hockey stick for a long time, but if keep studying, you stay diligent, you show up every day even when you don’t feel like it, all of a sudden you start climbing up that hockey stick.
So keep that in mind. If you’re a month in, six months in, nine months in, a year in, just remember it’s very front end loaded, once it starts clicking it starts clicking and you start climbing up that hockey stick.
Trade Plan
Third thing is have a trade plan okay. Everyone talks about the 90% failure rate, you know 90% of traders fail, I think the reason that failure rate is so high, I always say 90% of the 90% that fail just don’t have a plan you know, if your plan is to come into the market and say I wanna make money today, I mean that’s gambling you know.
Go to Vegas put a 100 bucks on black, spin the roulette wheel and hope ’cause you’ve probably got better odds actually even though I hate the odds of gambling, I don’t gamble myself but if you just wanna make money today and you’re gonna grab some morning runner, your odds are literally probably better in Vegas.
But if you have a plan and you have a process where you step through okay this is the chart, this is the news, this is the sector, this is what the overall market is doing, then you have a clearly defined risk to reward where you’re buying at a specific level, you’re stopping at a specific level and then you’re taking a goal, you know no trade is a trade unless you have an entry, a stop and a goal, it’s not a trade.
If you don’t have those three criteria and a process, you’re just throwing money on the craps table and hoping for the best.
This Is Not a Get Rich Quick Scheme
Fourth thing I want you to focus on and realize is this is not a get rich quick scheme okay. I think that one thing that I’m proud of is you know, Tim Sykes talks about this every single day, every one of your videos he’ll tell you is it takes time and it takes a lot of singles and a lot of doubles and this is day trading, swing trading, even investing is about the furthest things from a get rich quick scheme you’ll ever see.
Now you’ll see a lot of that on blog, a lot of people talking about making a $100,000 this month making a million dollars next year but it’s not realistic especially if you’re new, you’re gonna grind and grind and grind and it’s gonna be a 100 bucks here and a 100 bucks there and a 150 here and a $100 loser, but if you have that long term mindset okay, if you come in and you say it’s gonna take me a couple years to do this, I mean you’re ahead of 99.99% of the people that Google how to day trade.
If you have that mindset that it’s gonna take you months and years, that’s what I want you to have. If you’re here because and listen no offense, but if you lost your job and got divorced yesterday and you’re looking to make a bunch of money today this isn’t the video for you, day trading isn’t for you, try something else, buy lottery tickets, your odds are probably better, but if you’re looking for a skill and something that can bride you income over time that is the right mindset.
You Are Never Done
Last thing I want you to realize is you are never done. Personally that to me is one of the most exciting things about trading. You know if you’ve seen my bio you know I had a interest in stocks in elementary school back in the 80s you know, back when we didn’t even have electricity or indoor plumbing okay.
But I was actually before the Internet, I was interested in stocks, but you’re never done. No matter how much you study, no matter how much you do, there’s always something to learn, there’s always an improvement to be made.
Now that might be scary to you, to me it’s exciting, that’s why I’m here day trading actively 13 plus years later is because I know tomorrow there’s something new, there’s a new opportunity, I can refine my process, the chart patterns change and evolve, to me that’s exciting and if there’s one thing you take from this article, if you’re not excited by that, by that constant improvement, by that constant growth.
Trading might not be for you because I don’t care if you’re a 30 and the veterans will tell you this okay, read the books of the billionaire hedge funds, they’ll say the same thing, they might be billionaires, they might have way more money than me but they’re saying they’re reading every day, they’re studying every day.
I mean whether or not you agree with you know Warren Buffett’s longer term mindset, Warren Buffett say’s he reads 500 pages a day okay, you know Warren Buffett worth whatever 10 billion dollars maybe more now
and he’s still reading 500 pages a day of business news, of books, of financial reports.
He’s 90 years old that guy knows he’s never done. So that’s the biggest thing I want you to realize is even if you learn all of this stuff, even if you study and you work hard, you’re never done.
Now if that’s not exciting to you, maybe a different career for you, for me it’s exciting, hopefully it excites you, constant learning, always something new, always a new opportunity that’s what’s great about the stock market.
