Why Your Trading Strategy Might Be Wrong for You · Alex Temiz and Bao Nguyen

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[00:01:32] [SPEAKER_10] For me, what I realized is I was using the same size on every single setup. I was up $10,000 one day, down $20,000 the next day. Up $30,000, down $20,000. Up $50,000 minus $40,000. And at the end of the week, somehow I was break even after all those swings. It was because I was not grading my setups.

[00:01:48] [SPEAKER_09] Unlike a blackjack, blackjack makes you force to bet blind, right? You're not betting blind, guys. And in trading, you can start with a little $5 bet. And then when you draw a hit at $20, boom, you raise, you add to the winner. You can add another $100. That's why I examine why I lose. It's only because I think I know better, right? I'm always up. It's just one damn stop because you know what? There's a combination of no one told me about stop losses that I taught myself.

[00:02:12] [SPEAKER_09] And then when you heard about stop losses, you hear bullshit from people saying, oh, these market makers hunt for my stop loss. I don't use the stop loss because they're going to figure me out. They don't give a fuck about each two-year-old trade. You see what I'm saying? So here I'm losing $50,000. You think I'll get the shit about $50,000?

[00:02:30] [SPEAKER_10] If you are nervous in a trade, meaning you enter a trade, your heart is racing, your hands are sweaty, that means that you have not planned one of four things. Your entry, your exit, your stop, or your target.

[00:02:42] [SPEAKER_09] I already put out my orders. I call them fancy orders. So the way to eliminate fear, fear comes from the unknown. I'm always afraid of the unknown, right? So you're fearful. But if you already know exactly how much you can lose ahead of time, you're pre-planning, do math. How can you be scared? If you're scared of losing, then size down. So between me and you, that's the thing people don't understand. You have to have realistic expectations. None of us thought we're going to make millions and millions. I didn't think I was going to make millions a day.

[00:03:08] [SPEAKER_09] You know, my biggest day, I started down $10,000. Then at the end of that day, it went for $5 million. Yeah. So I didn't expect to make that. I was trading my process. I was never superstitious until I met Bao. Now I'm the most superstitious guy in the world. So I'm very superstitious, guys. The reason why is this, guys, is anxiety. So do what you have to do to calm yourself down, even though it's exaggerated. So you make a ritual what the hell you need to do, right?

[00:03:35] [SPEAKER_09] Because once you get out of that ritual process, that's what you all screw with.

[00:03:39] [SPEAKER_12] So what's your ritual? I mean, I hope you wore the same pajamas.

[00:03:41] [SPEAKER_05] But when you get that ideal A-plus setup, how does the risk side of it, like how much are you willing to risk on that? Right. So.

[00:03:51] [SPEAKER_08] Markets, speculation, and risk. This is the Chat with Traders podcast.

[00:03:59] [SPEAKER_02] Guys, this is exciting because Chat with Traders is here live in Orlando with MIC and just absolutely incredible. I mean, you guys are such a family. Last night I was going around, interrupting all of your conversations, and you were so just happy to share. I mean, I think we're all much of the same people. It's in our blood. It's in our DNA, right? We have these losses. We have amazing wins. But a lot of the ego is stripped from us, isn't it, in much of these. I will say I've been able to interview incredible people like the two we have here today.

[00:04:29] [SPEAKER_02] And a lot of the themes remain the same. That is looking for the asymmetric opportunities, the certainty that you have. It needs to be not in the trade, but in yourself and what you should do, what you are going to do. You have to know what you're going to do, regardless of what the market does, because the market can be irrational, right? Longer than we can be solvent, as the famous Mark Douglas says. So eight years. Congratulations. Congratulations. I mean, this is an honor. Much of the same mission that Chat with Traders has is the same mission you guys have,

[00:04:58] [SPEAKER_02] and that is to add value to the traders. So we wanted to partner with another credible source, of course, with MIC. Now, one of the things that Alex said in this interview was he knows... Well, there's a lot of lessons I learned, by the way, in this, and that is to size into your winners. Now, we're going to get to some of these questions in a little bit. Last night, I went around and I asked a lot of you, what questions do you have for Alex and Bao? Now, some of you may not remember what you asked. I won't name any names.

[00:05:28] [SPEAKER_02] Maybe you asked me for the same question twice. But we're going to get into those. Now, one of the things I learned a lot from you, Alex, is that you need to lean into your winners. When you have a winning trade and this is your A-plus setup, now you have to know what that A-plus setup is to be worthy. This is what he teaches all the time. But something else that Alex told me was he knows a trader that trades much better when he's under the influence. Do you guys know who that is? Last night, it could have been any of you.

[00:05:57] [SPEAKER_02] But I wanted to start off and ask you both. We'll start with you, Bao. What was the vision with MIC? Now, this is eight years ago in the making. Is this what the vision was?

[00:06:07] [SPEAKER_09] You know what? It's like a trade, right? You go in, you think you're going to make a million bucks, and then you end up with something else. And sometimes, you know, not reaching your original goal is actually a good thing because things change, right? So the key is everything I do, everything is to basically, if it doesn't help me, how can it help you guys, right? So me and Alex developed this so that it helps one another. What? Because we're successful, but the problem that we have is the fact that it's so lonely, right? And so we cured it by creating a community where it's the same people with same ideas and stuff, and so it grew like this.

[00:06:36] [SPEAKER_09] So we never expected to be this big. And the good thing is, you know, we kept it simple, and we taught people what we did. There's so many ways to trade, guys. It's like all I can do is teach you how I did it, and hopefully you do better. It's like don't reinvent the wheel. So instead of like it took me and Alex a long time, a lot of money to lose to figure out what strategy to work, right, guys? There's so many indicators, for example, right? You have a million indicators. Which one works? Which one doesn't? So I've spent a lot of time trying to find what they call the golden grail, right? What's that?

[00:07:06] [SPEAKER_09] The holy grail. Me like, oh, my God, man. If I put this indicator on, I'm never going to lose. And so you waste your time doing that kind of stuff. And so what we do is we help you to kind of live like, hey, I've gone down that path. If you want to keep going down there, you're going to lose a lot of money. You'll waste two years. You see what I'm saying? So a lot of people do. They don't believe us. And then, hey, sometimes you have to do what you have to do. So that's what I'm saying. It's kind of like you want to reinvent the wheel. You've got to trust that the round wheel works better than a square wheel, right? And so it kind of grew organically through.

[00:07:36] [SPEAKER_09] If it doesn't help us, how can it help you guys, right? So everything we do is to help us, which kind of trickles down to everybody else.

[00:07:43] [SPEAKER_02] And Alex, is that much of the same line of thinking as you when you envisioned MIC? And then where do you see it going as well?

[00:07:49] [SPEAKER_10] Yeah. First of all, Bao said it pretty amazing. It's the same way that Bao and I learned to get better through each other. We thought that we could replicate that, right? There are so many ways to improve your trading. And the best way is to fix the fundamentals. What do we go over every single day? The fundamentals. The same beginner foundation, right? To build a skyscraper, we need a strong foundation. By being teachers the way we are, we reinforce that foundation every single day, which also makes us better traders.

[00:08:14] [SPEAKER_09] And I always said this. It's like, if you really can't explain it simply to your mom or dad, do you really know what you're doing? So here we are. Me and Alex have been doing this a long time. And most of the people here are all homegrown. All the mods are homegrown. And so obviously it's like something works, but of course it's going to be changed. Everybody's different personalities, right? We start with the fundamentals. So I consider myself like a grade school teacher teaching you math. Who teaches you that kind of basic stuff? If you want to learn calculus, you need to learn how to add and subtract first, right? And we need it, right?

[00:08:42] [SPEAKER_09] So if you have that solid foundation, then you start leveling up. And so our goal has always been to have what's called the Trading Fish Academy. Basically a school. It's like you have schools teaching all these trades, right? And trade as in like a welding, nursing, you know, carpentry. Why not day trading? You know? So no one teaches people at this level. Who wants to waste their time, guys? Teaching people what a bid is. All right? It takes a lot of work and patience to teach a kid how to do one plus one. But those are the most important teachers.

[00:09:11] [SPEAKER_09] Because if you don't know one plus one, how the hell are you going to do everything else? And so I love seeing the moderators in different levels, right? So imagine this, like this is a PhD, right? And then I'm teaching kindergarten. And then, you know, Phil and everybody else grows up. And that's how you do it. If it's just me and Alex doing this, it's like it's been so long. And I take things for granted, right, guys? Because when people ask, what's a bid? Oh, you don't know what bid is it? We forget. Like, hey, we were once there before. And so you have to go through progression. That's what it is. So take a look at the mods.

[00:09:38] [SPEAKER_09] Those mods, there are so many people that wish they were at their level. But then at that level, you're like, I want to be higher. But you don't understand. It's kind of like, hey, if you want to get to the next level, do you really understand this level? So I always tell people, if you can't teach someone simply to do what you do, you really don't know what the fuck you're doing, right? So explain to your mom what do you do for a living. If you can't really do that or a strategy, it's too complex and you have no clue what you're doing.

[00:10:01] [SPEAKER_02] Now, you guys use the car example a lot, which I like as far as having the safety precautions on the account. And we have Cobra here, amazing, that can put those on the account, the auto liquidation, max exposure per ticker, and these kind of things.

[00:10:15] [SPEAKER_09] And all those are from huge losses that me and Alex have. So everything we're telling you, I wish someone told me why to stop losses. When you start, you don't even know the hell of a stop loss. You don't even know there's a broker, max loss, any of this stuff. Why aren't anybody teaching you this? Because they don't know what the fuck they're doing. So what we're doing is we're like, I can say myself like a Christopher Columbus, right? Going to a new territory, don't know what the hell he's doing. It could be a crocodile eating me, whatever. So it's like I'm building the, we're building the roadmap for you. Why are you going out and going to a different road? Just take the damn road that Google Maps tell you.

[00:10:46] [SPEAKER_09] You think you know better, right? That's the whole point. Eventually, once you get used to the road, yeah, you can start finding off track, off trail roads, right? But for the majority, why the hell are you wasting time? So if you didn't have Google Maps, how would you drive from where to where? You would trial and error, right? You waste so much time. So that's what it is. It's kind of like a cheat code, not really. So we have another saying like mentorship is the shortcut to success. You still got to do the work.

[00:11:12] [SPEAKER_09] But if someone mentors you, you get there really quickly, more quickly, right? Just like having a good coach for a football team.

[00:11:18] [SPEAKER_02] So Alex, I mean, do you think, I love that example too, but do you think one of the common problems is that traders, they see you guys making a lot of money and then rather than putting the training wheels on, they want to get in the car, no seatbelt, no airbag and go a hundred miles per hour. They don't even want to follow the speed limit. Do you think there's a step-by-step process?

[00:11:37] [SPEAKER_10] Yeah, I mean, at this point, I've been trading for 12 and a half years and we've been doing MIC for eight years. And I think the biggest observation that I've made is people are always way too big on their size. No one ever complains that they're way too small. So what I find is that if you cannot be successful with 50 shares, you will never be successful with a thousand shares, 5,000 shares, 10,000 shares. So I often find that the biggest barrier for most traders is not the process.

[00:12:06] [SPEAKER_10] It's not the strategy. It's the size. You know, there's certain times where you want to be as big as possible, but that is maybe like once or twice a year, right? There's 250 trading days in the year, 248 of them. You should really probably not be that aggressive. What I find is 248 days people are aggressive and maybe two days they're not. You know, it makes no sense. It's the exact opposite. So I find that most traders, if they're able to even cut down their size in half, they'll be successful. I'll give you guys a story.

[00:12:34] [SPEAKER_10] So early on in my trading career, I thought that trading was like a day job, right? And what does that mean? That means that the more you do it, the more money you're going to make, right? And for me, what I realized is I was using the same size on every single setup. I was up 10,000 one day, down 20,000 the next day. Up 30,000, down 20,000. Up 50,000 minus 40,000. And at the end of the week, somehow I was break even after all those swings. It was because I was not grading my setups.

[00:13:01] [SPEAKER_10] I often find, I mean, I use the Bao at Disney World example and we'll use it one more time because I think it's very relatable. So you're going to make a bet. And the way that you win the bet is if Bao gets drunk, right? I'm going to give you two scenarios. Scenario number one, Bao goes to Disney World. There's probably a 50% chance he's going to get drunk. Do you want to bet on that setup? Maybe. Polymarket. But now here's setup number two. Bao's at the club. They just ordered a bottle of Hennessy. There's a couple of cute Asian girls there.

[00:13:30] [SPEAKER_10] What percentage do you think Bao's going to get drunk? 99%. So which setup do you bet aggressive on? Bao at Disney World, which is 50% or Bao at the club, which is 99%. What I was doing is I was betting the same on both setups and I was getting inconsistent results. When I see Bao at the club, I want to go as big as possible because I have the highest probability, right? So you have to ask yourself, is this a Bao at the club setup or Bao at Disney World? One has 50%.

[00:14:00] [SPEAKER_10] One has 99%. I don't know about you, but Bao at the club, I'm betting heavy every time because that's going to be...

[00:14:06] [SPEAKER_02] You have to earn the right to know what that A-plus setup is, though, correct? So what if you have somebody that says, well, I mean, that's Alex's A-plus setup. Here's a more different analogy.

[00:14:17] [SPEAKER_09] That would probably make more sense. So we always talk about like, you know, like can you imagine going to a casino and playing blackjack and not having to bet before you see your whole cards? How much can you make? We've killed the house, right? Imagine you see your cards and you see the dealer's cards. Then they let you bet. You think you can lose? You still lose, obviously, if they draw you, right? But then that's a probability. So would you...

[00:14:43] [SPEAKER_09] If you did not have to bet before you saw the cards and a six showed up, you wouldn't bet, right? You wait for what? 18, 19, 20. Same thing with trading. You're waiting for that setup. Why are you going in when it's a 12 hand? So you look at the... So if you're bored, you're going to sit around, well, eh, 17 is okay. 12 is okay. You see what I'm saying? But you know it's a bad entry. So you can control when you bet. So that's number one. Unlike a blackjack, blackjack makes you force to bet blind, right?

[00:15:12] [SPEAKER_09] We're not betting blind, guys. And in trading, you can start with a little $5 bet. And then when you draw, hit a 20, boom, you raise, you add to the winner. You can add another 100 bucks. But if you draw and now you bust, are you going to freaking double down? You're already broke, right? So when you go red on the trade, nothing's confirmed. Are you adding more or are you taking out? So consider that as... Keep thinking of that. Okay, you rate your setups. Is it a 17 blackjack, 20 blackjack? And always remember, guys, even if you have 20, I never go all in.

[00:15:42] [SPEAKER_09] You know why? 20 gets beat by 21 all fucking time, right? How often... I hate these stories. Everybody gets bad beat in poker. I hate it. I hate talking to people that play poker. You hear about this bad beat? It's like, no shit, dude. You see what I'm saying? So the point is like, I don't need to hear that bad beat. Everybody gets a bad beat. You know what I'm saying? Like 20 gets beat by 21. That's what we always say. It's kind of like, don't overly commit, right? Save the best setups, but know your problem.

[00:16:08] [SPEAKER_02] How important is it though in discovering this edge? Do you think that traders have to go through some kind of adversity early on? You were speaking earlier about the hedge fund manager that was 22 or so and lost everything. But Val, you said, I mean, it's because he hadn't lost anything. It's because he lost everything. So do you need to lose in order to win, essentially? Do you need to go through that?

[00:16:28] [SPEAKER_09] You see? No, you don't. But he's so damn smart. I keep telling you guys. I hate teaching smart people. They think they know better than everybody else. And here is Citadel sitting and waiting. BlackRock. Those guys are letting him hang himself. Because you know why? They're on the other side of the train. They're going to teach this cocky kid a lesson. Right, guys?

[00:16:48] [SPEAKER_10] Good thoughts. Yeah, I mean, it's the truth. The question is, how much pain do you want to suffer before learning your lesson? I mean, for me, I'm stubborn. So it took me a ton of losses to learn my lesson. But if you're smarter, you would rather take what we learned and run with it. For me, back in the day, you know, I had to lose money to learn what not to do. By being in this community, you're taking our 10 years, 20 years of losses and condensing it down into the lessons to help you avoid those mistakes.

[00:17:16] [SPEAKER_09] Just like the ADR. You know what? I skipped one step in that process. You know what I did? I didn't look up the fucking what the stock was. I just saw that it was like, oh, shit. It's in my price range. So I skipped my process because I was making money every day, every single stock. And so I skipped the part where I'm supposed to look it up at FidViz and see what the hell that stock is, where it's from. Only after I lose, I go, fuck, it's an ADR. No shit. That shit goes like that. You see what I'm saying, guys?

[00:17:45] [SPEAKER_09] So it's kind of like, you're going to trust us or you're going to learn on your own? It's like a seatbelt, right?

[00:17:50] [SPEAKER_10] Like one more thing is that every single morning, I make the watch list, right? Like Anik said, there's 17,000 stocks moving and I condense it down into four stocks. It blows my mind how many people ignore that watch list and start trading random shit. Like you can't make it up. For example, the day I made 100 grand on gold short. We had a guy message us saying that that same day that I went short gold, he went long silver. The fuck you doing going long silver the day that we're sizing up on gold short? It makes no sense.

[00:18:17] [SPEAKER_10] But these are the stories that happen over and over and over again. And the reason why we continue to bring it up because it keeps happening every single day. Every single day, people that are in the community are ignoring us. Every single day, we're trading from 930 to 1030. When we're done trading, people start trading random shit at 1030. They lose the money they made in the morning. It makes no sense, right? So as long as you just stick to what we say, which is follow the watch list, track your trades,

[00:18:45] [SPEAKER_10] see what your best setups are, what your worst setups are. And from there, just stick to that and walk away. Trading is not a job where the more hours that you show up to work, you're going to get bonus in overtime. Oftentimes, the less you trade, the more money you make because the market is designed through algos and all these different things to take your money over time. Right? When you're at the casino, do you make more money the longer you're at the table? Or when you get up and walk away, the market's very similar.

[00:19:10] [SPEAKER_09] And that's why they ban advantage players counting cards at a casino, right? So same thing with trading. If I'm against you in trading and I see you only load up winners three days in a row, first day setup, those are big percentage winners, right? That's what it is. So same thing. You try to find the edge, guys. The edge is not randomly going in, right?

[00:19:31] [SPEAKER_02] So you'll see a lot of traders taking random trades and that'll equal random results. So what you guys are saying is define it. Have it clearly defined ahead of time and don't stray from that.

[00:19:40] [SPEAKER_09] Oh, yeah. This is the thing, guys. Trading is not about one-off big wins or losses. It's creating a repeatable process based upon winning strategies, okay? The key is repeatable process. If you cannot figure out how you make that money and make it into a repeatable process, that was a lucky-ass trade. You'll know what the hell you're doing. So that's where the watch list comes in. See, Alex has the process. The process is going to spit out these stocks for the watch list. So basically, I always say this. Don't focus on the piano.

[00:20:09] [SPEAKER_09] Focus on trading well in your process and the profits take care of itself, right? The results, it's like the results are because of your process.

[00:20:16] [SPEAKER_02] Well, now, I couldn't ignore the fact that both of your journeys start off in a similar way in which you bet on yourselves. Alex, you sold the rims off your car. The famous VGGL trade, it was 2,000 shares short, right? You made $1,000 on that trade. And then, Bao, you took a lean out on your house. Is that right? Now, how important is it, though, to bet on yourself?

[00:20:38] [SPEAKER_09] Well, this is the thing, guys. So when I started trading, it was like I would make money most of the time. It's always that one damn stock that I lose, right? And why did I keep losing it? I got fucking stubborn as hell. It's like, oh, it's like, what was my favorite song? It's like, I'll be different this time. And don't short ADR. But, but, but it's different this time, right? And that's what it is. So it's kind of like, what was the question? I'm having a flashback on the losses.

[00:21:08] [SPEAKER_09] Oh, yeah, yeah, take your money out. Yeah. So this is what it is, guys. If you can figure out why you lose or win, not everybody's made out to trade, seriously. I could look at someone and say, or I can tell what the reasons are that people fail, okay? People fail because they treat it as a hobby. If you make too much damn money in your day job, you're going to throw money out because you don't get a damn. You can read, you know what I'm saying, guys? So you'll never learn. So those guys are like hobbyists. Just go buy a football card, Pokemon card, right?

[00:21:38] [SPEAKER_09] Same shit, right? So what you have to do is you have to, you have to figure out what your goal is, guys. Because like, if you really want to make money, then why are you taking a trade that is on the watch list? Because you think you're better than the system or you're greedy or you're gambling, you see? So you have to ask, it's okay, guys. It's okay if you want to gamble. Be realistic with yourself. Go to the fucking casino. Don't take a fucking loan out. Don't fucking buy shit on margin. No short shit that can go from zero to a hundred, right? Give all you want. So if you make that, so whatever your expectation is.

[00:22:07] [SPEAKER_09] And so for me, it was like, that's why I examine why I lose. It's only because I think I know better, right? I'm always up. It's just that one damn stop because you know what? It's a combination of no one told me about stop losses that I taught myself. And then when you heard about stop losses, you hear bullshit from people saying, oh, these market makers hunt for my stop loss. I don't use a stop loss because they're going to figure me out. They don't give a fuck about each two-year-old trade. You see what I'm saying? So here I'm losing $50,000. You think I'll get the shit about $50,000?

[00:22:38] [SPEAKER_02] One of your interviews recently, you said there is an edge almost in sizing down and widening the stock. Now, can you-

[00:22:45] [SPEAKER_09] So basically, to make $1,000, you can do what? 1,000 shares for- 1,000 shares dollar. Dollar, right? Or- 10,000, 10,000. Yeah. So basically, so what I do is this, guys. It's kind of like you have to figure out the range of the stock. The range is going to be market cycles. You have to study the market that you're in, the sector, the niche you're in. That's why people that trade every single stock, I don't think they're going to be successful.

[00:23:14] [SPEAKER_09] You cannot be a jack of all trades. You have to be a master of one, even as a small niche, because trading is so much. $17,000. Like, how the hell are you going to compete with AI? Unless you just solely trade that one little event. Because you have algorithms doing everything. So I see a lot of these, like, what are you trading? Oh, one day I'm trading at $500 stock. Another day I'm trading at a nickel stock. I'm like, what are you doing? Unless you have a process. But that's okay, too. So it's kind of like, what was the question?

[00:23:43] [SPEAKER_09] I thought you got off on a ten times. I'm sorry.

[00:23:45] [SPEAKER_02] No, you're good. I want to segue from that, though, into basically you have the stock selection, right? And that's very important because you said random trading, you got to get it out of the way. It's going to equal random results. So now let's say the traders, they have that stock in mind. What's more important, knowing the entry or the exit? Because I was just talking to somebody who said, I get into the stock, but then I get into my own way. So what would you say to that?

[00:24:08] [SPEAKER_10] Yeah, so I worked with Dr. Brett Steenbarger for about a year, who is probably the top trading coach in the world. And something that he taught me is if you are nervous in a trade, meaning you enter a trade, your heart is racing, your hands are sweaty, that means that you have not planned one of four things. Your entry, your exit, your stop, or your target. If you have planned your entry, your exit, your stop, and your target, you have nothing to worry about. You're just going to let the trade work.

[00:24:36] [SPEAKER_10] So what I did is I would take a post-it note for every single stock that I was interested in and write my entry, my exit, my stop, my target, post-it note it on my screen in front of the chart that I was looking to trade. So if there was five stocks on my watch list, entry, exit, stop, target, post-it note, post-it note, post-it note, post-it note. That way, if I was turning my head and looking around at the chart, I would have my exact entry, exit, stop, and target there.

[00:25:04] [SPEAKER_10] That way, I entered the trade and I was sticking to my plan. Oftentimes, I find that traders that enter trades have not planned their entry, their exit, their stop, or their target. If you do all that, you're good to go and there's nothing to worry about.

[00:25:18] [SPEAKER_09] And this is where repetition, repeatable, all that stuff, muscle memory comes in, guys. That's why you need to have a repeatable process. You can't just wing it one day. It's like playing blackjack where you double down. If you double down, you have to double down all the time, right? You can't selectively one time double down or not. So it becomes an instinctual process. So after a while, Alex doesn't think about it, right? It comes natural because he's doing the same thing over and over. It's always when you deviate that you screw up.

[00:25:45] [SPEAKER_09] So as a new trader, you don't know what the hell you're doing, which is fine. So we have our process. And so what do you do is you take that and you put your personality, you refine it. But it always comes to pre-planning, guys. You don't just sit down. I see these guys, educational rooms, like they wake up and they're pounding shit. How the fuck do you know what the fuck to trade, dude? It's like most of the trading hours are spent researching.

[00:26:11] [SPEAKER_09] And the rest is just waiting for the triggers to happen. I already put out my orders. I call them fantasy orders. So the way to eliminate fear, fear comes from the unknown. I'm always afraid of the unknown, right? So you're fearful. But if you already know exactly how much you can lose ahead of time, you're pre-planning, do math. How can you be scared? If you're scared of losing, then size down. But sizing down, I'll make less. Fine. Then take winners later.

[00:26:40] [SPEAKER_09] Why are you scouting for two cents, dude? Are you in a million shares? You're in a hundred shares, two cents. What the fuck are you doing? Why don't you take in 20 cents? 50 cents. So you learn that kind of stuff, right? You lower the size, but you get a wider range. At the end of the day, it's the same dollar amount. So you base that upon liquidity. These are like more experience, like kind of feeling. But at the end of the day, it all comes down to pre-planning, doing your math, knowing where to get in and get out for both a profit and a loss. It's all math.

[00:27:10] [SPEAKER_09] And we have the calculator. Remember the thing you're talking about? Yeah.

[00:27:13] [SPEAKER_10] So that's why we've been kind of resharing the position size and calculator. We're also working on some AI tools to help you guys size correctly based on your setups. But yeah, I mean, it's the same thing over and over again. You could either take big size and take a smaller move or take a smaller size and a bigger portion of the move. And for most people, it's better to be smaller and take a bigger portion of the move. Can they ask the Alex AI? Yeah, I'm sure they can. Yeah.

[00:27:39] [SPEAKER_11] Tell us about that. Is that essentially you?

[00:27:41] [SPEAKER_10] Yes. So the Alex AI, so we have over 2000 videos. So the Alex AI has read the transcript for all of the videos. It has read all of the messages in chat. It has read all of our PDFs and has read all of our watch lists. So based on all that data, AI is only as good as what you train it on. So we've trained it on pretty much everything MIC related. So a little bit later, we're going to do a demo on that as well, just so you guys can see it. But how many of you guys, show of hands, have used the AI so far? Yeah. And what do you guys think? Good, bad?

[00:28:11] Good.

[00:28:12] [SPEAKER_10] It really, honestly, it sounds like me. It really, it's actually unbelievable. It's really unbelievable. But yeah, that's something that's really important to us is being able to provide you guys with that. You can upload your charts. It'll study your charts, spit out some more information. But for some reason, if it's midnight and I'm asleep and you guys are checking up on your charts, ask the AI. It'll solve the question. Don't use the Bao AI. Yeah. Bao AI will just yell at you. They tell you to drink more.

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[00:31:38] [SPEAKER_10] I mean, I wouldn't say that there's a certain day that I remember, like November 22nd is the day that it clicked. It was just a matter of not feeling so stressed out in my trades. You know, when I was first starting to trade, you know, I wouldn't know if I had a green day if I was doing the right thing, or if I had a red day if I did the wrong thing. Maybe I had a green day from breaking rules and I got rewarded for that. Maybe I had a red day for sticking to my rules and I thought I was doing something wrong. So I had no idea.

[00:32:04] [SPEAKER_10] For me, kind of everything got a lot easier when I stopped feeling so stressed out in my trades and just let my plan do the work and just take it from there, right? So I wouldn't say there was a specific day. It was more of a less stressed in my trading activity that made me feel confident in it.

[00:32:21] [SPEAKER_09] The moment that I start feeling it, it still like sometimes doesn't click, guys. It's like when you don't think about it, like let's say like breathing, right? You have to think about breathing? Unless you like get an accident, then you have a machine, right guys? So it's kind of like that. After a while, you don't even think about trading. I don't even think about, okay, where am I going to enter? Where am I going to exit? Because like I've been doing that for so long. But how did I get there? First, like Alex says, you have to get the post-it note. I always tell people, man, write it. It's very simple.

[00:32:51] [SPEAKER_09] That's the discipline workshop. Just get an index card. Where you enter, where do you exit for both the winner and the list? Just write that down. And after a while, you're writing that down for a year. It's like it's in your head. That becomes your process. So my process, it's like after a while, you don't even think about the steps, guys. But when you deviate, that's when it starts to unclick. That's the problem. When I know I fucked up, when I start to fucking like, let's say like do research on why I should hold that loser.

[00:33:21] [SPEAKER_09] I should have done that before, right? All of a sudden, I'm the master on the filings of this fucking stock. I think, well, next year they're going to do this fucking IPO or whatever, right? And so it's like, shouldn't you do all this before you get in? You went for a scalp. You end up a long-term investment. Or when I start adopting different religions, right? Praying to Buddha and Allah and whatever. God. Yeah. So that's what I'm saying, guys. It's like it comes out repetition and unlearning all your bad habits. That's the hardest thing.

[00:33:51] [SPEAKER_02] So, Bal, did these legacy orders I want to talk about, I was researching your videos. Way back when, you would take a lot of positions on earnings play. You would take them long the night before, and then you would get a bunch of them gapping up. But these days, I mean, I see your charts, and I admire them. And you're throwing at what looks like just bullets, or you have these legacy orders out already on 10 or 15 stocks. Is that essentially part of your pre-market process?

[00:34:16] [SPEAKER_09] Well, remember, I come trading like a long time. I have a lot of bad habits. So sometimes, like, you see, like, the worst swings in baseball, but it works. Or, like, the worst throw-arm action, right, guys? Sometimes it works for those people. But it's like if I didn't go back, I would have a good coach. If I was taught to throw the football correctly, I wouldn't be doing a weird motion, right, guys? Like golf. I'll give you a very simple example of golf. I've been playing golf for, like, freaking, like, 20 years. I suck. That's because, like, dude, I refuse to take a fucking lesson.

[00:34:45] [SPEAKER_09] Because I'm like, you see what I'm saying? So I suck for life. Why? It's all a fucking ego. So that's it. So when you're talking about all these orders, I've made it work for me. I would not recommend it for you guys. So sometimes, so I'm kind of like, you can trade however you want, guys, as long as it works for you. We're just telling you what the best practices are. But the reality is, like, dude, we still do dumbass shit, dude. You see what I'm saying?

[00:35:11] [SPEAKER_09] But we, so, like, to mitigate what I do, everybody has a strategy. So he mitigates by not even touching it pre-market. You know, that's how you eliminate stuff. He's not trying to cure, like, now, okay, I've got to learn how to trade pre-market, right? Nah, dude. Eagle, walk the fuck away. So that's what it is, guys. It's kind of like, you can still do the wrong thing and make money. But you know what keeps me safe? If max loss, auto liquidation, you can only lose what you put in. You can trade as fucked up as you want. I pre-planned my shit.

[00:35:42] [SPEAKER_09] I know exactly how much am I going to lose. The reason I lost that much that day is because I did not plan the risk enough because there was no stops in that shit. So that when you don't have, so if you don't know what your maximum risk is, you're fucked. You're going to lose it all. If you put in a hard stop, that's your freaking maximum risk. If you're uncomfortable, lower that price, right? Lower the share price and get a wider range. But in that example on pre-market, how can I stop out? I only can stop out when my account blows up. That's the risk.

[00:36:11] [SPEAKER_09] And I'm fine with that. It sucks, but I'm fine. I don't have a million dollars in there. That day, I was supposed to wire out half the money. So I'm like, okay, if I lose 30 grand, that's fine. I already took out 30 grand. You see what I'm saying, guys? So you have to determine what your maximum risk is. And if you're not willing to put a cap on your maximum risk, that's on you. No one here should ever fucking blow up. We tell everybody, max loss, go to the corporate, call them up. How do I set up this max loss? Set up on a ticker level you have to. There's no reason anybody should just blow up unless they're breaking the rules.

[00:36:39] [SPEAKER_09] If you're trading in pre-market, there's no auto liquidation in pre-market. Why the fuck are you trading in pre-market? You see what I'm saying? Or put in 100 shares. Because you have to take a look at how the potential goes. For the XHG, that's the extreme example. It went from $1 to $18. Who the fuck can account for that risk? The only way you account for that risk is don't have a million dollars in your account loading up in that one fucking stock.

[00:37:04] [SPEAKER_02] Yeah, there's a few things I want to touch on there with pre-market too. Now, did you guys see, you mentioned XHG that went from $0.50 to $18. There was another one that was ENSC that went from the same thing but like $30. And it ended up resulting in a trade bust, which I had never heard of. I got fucked up that too. NASDAQ essentially canceled all of these orders.

[00:37:28] [SPEAKER_09] I got fucked up. I made money and they broke the fucking trade. So if I cover, I end up short. You see what I'm saying? How often have you seen that? Dude, this is very rare. But they busted because their fucking alcohol broke it. So that stock, I expected to be busted but didn't. It still remained at $4. So the bust never relied on the busting. But when you see something crazy like that, you have to expect like, why are you trying to get in that shit?

[00:37:58] [SPEAKER_09] And if you get in that shit, the risks are all on you, man. You're greedy as hell. You saw a stock go from zero to $18 and you're trading this shit? Yeah, I made money but then the ES said they broke the trade.

[00:38:11] [SPEAKER_04] Yeah.

[00:38:11] [SPEAKER_09] And so I ended up like, I ended up long, guys. And it fucking kept going down and shit like that. So I'm like, fuck, I made money. And the broker don't tell you because they get the trade breaks later. And then I see the shirt. So I'm like, ah, fuck. What the hell? So the end of the day, guys, if it's too weird, don't get it. If you don't know what the fuck you're doing in that, that's why you stay in your niche. You see what I'm saying?

[00:38:33] [SPEAKER_02] Stay in your niche. And Alex, you have that. The first hour of the day. Anthony from Venezuela was asking, how do you have the patience to stick to your trade? Even if that means you may skip a day or two. Because for some traders, they feel that itch to constantly trade. How do you develop the patience to just wait for your setup?

[00:38:54] [SPEAKER_10] Yeah. I mean, the honest answer is I've lost so much money doing the wrong thing that I'm tired of losing money. Right? It's how much pain are you willing to endure until you learn your lesson? I am sick of those losses. I don't want it anymore. Maybe it took me years. Maybe, I don't know if I did the math, maybe a million dollars in losses. Who knows what the number was to say, you know what? That's good enough for me. I don't want to do that anymore. Right? So the thing is, don't let yourself get to that point. I think that something that's really important is temptation. Right?

[00:39:19] [SPEAKER_10] For me, I love ice cream, chocolate cake, cookies, brownies, anything, chocolate fudge, anything. If it's in the house, I'll eat it. So the way to do it is not to have it in the house. If you know that these stocks are risky pre-market, take it off your screen. If it's in front of you, you will be tempted. And sometimes that temptation is way too fucking strong. So for me, I try not to look at it. I try not to have it on my screen. I try not to have the cake at home because I'm weak. If it's there, I'll do it.

[00:39:49] [SPEAKER_10] So understand what those temptations are for you and create a process around it. My temptation is if it's at the house, I will eat it. If it's on the screen, I will trade it. So it's better for me not to have it on the screen.

[00:40:03] [SPEAKER_02] Now, Alex, another question for you. Bao was saying that the legacy orders and throwing these out in the morning, he may not recommend for everybody, but it's what he's found for success for him. Now, for you, Alex, Luciano was asking, you learned from Bao way back when, but you guys trade so different now. So how important is it to then find your own way? Like learn from you guys, learn from the moderators and mentors, but then develop your own process within that.

[00:40:31] [SPEAKER_10] Yeah, I think that's a great question. I think that the thing about me and Bao is we trade the same stock, but we trade it very, very differently, right? And the reason why is I think it's a different personality, right? If you think about Bao's personality versus my personality, Bao is super outgoing. He's all over the place. His trading is super outgoing and all over the place. I'm a lot slower, a lot calmer, a lot more, you know, take it slow. So what you have to find is not only are we trading the same stocks, but what is your trading personality, right?

[00:41:00] [SPEAKER_10] Are you more analytical? Are you slower? Are you faster? Because that's going to go into your trading as well. We use the same lines, same technique. That's the key, guys, how you trade around. We trade the same stock, almost the same exact spots, but way different based on our personality.

[00:41:16] [SPEAKER_09] Because it's your time frame and all that. What's your goal, right? Like Alex is in there for, because that's just like one of 10 stocks I trade. So my goal for each stock is not to ride it all the way down with huge size. So you can either pick the best setups like Alex does and bulldoze it. We have that good setup. You see what I'm saying? So basically, behind your personality. So Alex, in my opinion, plays it the right safe way.

[00:41:45] [SPEAKER_09] But sometimes you don't have the patience. Because like what can you do with 100 shares sitting there all day? And he's trading a $500 stock, right? So that's the key. But the point is, guys, it's the process you're looking at. You guys are trying to copy his trades. He has a different count than you. He has different numbers, different goals than you, different time frame. He can sit there all day adding and waiting. You see what I'm saying? He can make zero trades for five days. The next day is $100,000.

[00:42:12] [SPEAKER_09] Because he's looking for a different goal for him. So you have to understand what your goal is. It's okay. You don't need to ride with Alex all the way down. Your goals are different than his, different than mine. So I take money off the table way too fast. But it's safe for me. You see what I'm saying? I take the meat and move on. So it depends on how you do it, how many shares you have, all that. But the key is it's the same mental process.

[00:42:41] [SPEAKER_02] Are you taking pieces off and recycling shares?

[00:42:44] [SPEAKER_09] Because I'm only 10 stocks at once. Anything pops up, I'm just doing my range. You see what I'm saying? So, and it's a different account size. So, I mean, it basically, it's through experience. I find that that's my niche. But I can trade what he does, the same thing. But it's like, for me, it's kind of like, do what you think is easiest for you.

[00:43:06] [SPEAKER_02] Right. Because you add liquidity a lot, I noticed. And then Alex is removing the liquidity, especially on the winners. I want to ask you guys about that too. Is there a reason you don't?

[00:43:17] [SPEAKER_09] Because lately, small caps has not been an all-day fader.

[00:43:21] [SPEAKER_04] Yeah.

[00:43:21] [SPEAKER_09] That's why. Back in the day, you do the backside, you short, you wait, you chill. But now, dude, it reclaims even 10 times higher, right? So I've adapted my trade to small caps. Notice Alex doesn't trade to small caps than I do. I trade a dollar shit, right? That's crazy. So for me to trade a dollar shit, I'm not here holding for the backside. I'm going to die. If I take 20 cents of a dollar stock, that's 20%. I do that all day. And it takes me a few minutes to see that. Boom, boom.

[00:43:52] [SPEAKER_09] But where it comes is, if one of those goes to the moon, I'm dead. So therefore, it's a different strategy. That's why you see me, you know, so I don't need size. But the thing is, like, even 12,000 shares on a dollar stock goes to $18. You're fucked. So it's basically, you have to trade for the market condition you're in. And small caps isn't crazy. That's why I'm like that. Back in the day, they would do the same thing, write it all the way down.

[00:44:22] [SPEAKER_04] Yeah.

[00:44:23] [SPEAKER_02] And then, Alex, walk us through your process with that. Your 25%-ish share size, is that right? Above VWAP, and then it goes under. I watched DSY, I believe, was a trade the other day you were taking. And that's when you're getting aggressive to the point where maybe on a certain trade and an A-plus setup trade, you're putting funds in the account. That's another question I wanted to have that one of your members was asking too, is that how much cushion we were talking on earlier? Is there such thing as cushion? Do you want to have cushion?

[00:44:53] [SPEAKER_02] Or do you always want to have your back against the wall with your account and constantly taking profits from your account so you're not in a position where you get comfy and you're lazy with your trades?

[00:45:03] [SPEAKER_10] Yeah. What I find is this. I find that whenever I take a trade, if it goes in my favor, whether it be fast, slow, whatever it is, I have to take a little bit off. I build a realized P&L cushion. What that does for me is it calms me down. It tells me worst case scenario, if I'm wrong, I could risk some of that realized P&L. I often find that my biggest trades come after I lock in a little bit of profit

[00:45:28] [SPEAKER_10] because that little bit of profit gives me the confidence to get in bigger, risking those profits. So for me, that's super, super important.

[00:45:39] [SPEAKER_09] So by taking gains along the way, what you do is you build that cushion, right? The profit. And so what happens is the stock can still go against you and you still be green. So if it goes against you on your first thing, you can stop out. But if you don't take anything – so it basically depends on your personality. Some people are like – remember, it depends on your goal, guys, your plan. His plan, he's – you make the plan in this discipline workshop. You make the plan.

[00:46:08] [SPEAKER_09] Don't change the freaking plan because the plan was made before you got in the stock. That's when you're most clear-headed. It's like dating a crazy girl, right? It's like, okay, before you date her, you have all these like insane plans. Like you're the most clear-thinking guy, right? Next, you know, you have this crazy relationship. You're changing stuff up. So never make a plan when you're in the trade, guys.

[00:46:37] [SPEAKER_09] Seriously, close that fucking trade. Finish whatever setup you have. If you don't have a plan, don't fucking trade.

[00:46:44] [SPEAKER_10] Like we said, entry, exit, stop, target before the trade and put it in front of you and you have nothing to worry about. Wow.

[00:46:51] [SPEAKER_02] I want to go back to stock selection a little bit and ask, you know, what's the certain criteria you guys are looking for in the mornings and preparation? And then what is – what is a blacklist for you essentially? Like a certain float, Chinese, you know, how does that process go for you?

[00:47:06] [SPEAKER_10] Yeah, so Val told me this one time and I ran with it. So stock selection is very important. Every day that you show up to the market, your goal is to show up and see if your opportunity is there. Val's analogy is you walk into a bar and it's filled with dudes. Are you going to start hitting on dudes or are you just going to wait, right? A lot of people, they walk into the bar, they show up to the market. It's a slow day. Nothing's moving. It's all dudes in there. You're not going to start doing that, right? Unless you're into that, right?

[00:47:37] [SPEAKER_10] So that's the reality here is that you have to understand that stock selection is very, very important. You could have the best strategy in the world, but if you use it on the wrong stock, you're going to get punched in the face, you know? Yeah, use the wrong biggest line. What's the disqualification for you then? Yeah, so these are red flags, right? So I think some of the biggest red flags are what we go over all the time. So number one is low flow, less than 1 million share float. Chinese stocks have been very, very risky. ADR stocks have been very, very risky.

[00:48:06] [SPEAKER_10] Does it have SSR on? Is it a day one stock, right? Now, additionally, some other stuff is what is the short float? Is it a high short float? Is it high institutionally owned? What is in the press release? Did they just partner with NVIDIA? Did they partner with Walmart? Or is this an AI company that's now a crypto company that's now a marijuana company, right? These are all very, very different stocks.

[00:48:32] [SPEAKER_09] So do we shut that off so we can share some stuff with MSC so it doesn't get on the phone? No, but no. I'm going to tell you what I've been doing, okay, guys? Which kind of like... So basically like dilution all that stuff. Dude, AI. I'm telling you right now, man. And AI is going to replace all of the backroom, due diligence, finance, analyst people. So what I do is I... So basically it all comes with process, right? Most of this process is manual.

[00:49:00] [SPEAKER_09] And that's why we screw up. We take shortcuts. We're like, oh, today I'm going to look at the float size. I'm going to look at if it's a Chinese stock. And we skip this stuff. But dude, with AI, you basically have a prompt. You can copy and paste that same fucking shit. They do the whole process. So what I do is I need to check for the reverse split to see when the reverse split, what the share size is, float is, all that stuff, right? So those are manual. It takes time. So what you do is you write a script. So what I use for the AI is I ask them a very simple question.

[00:49:29] [SPEAKER_09] I ask them, why did this stock go up today? It's surprising they don't fucking tell you. They'll tell you if there's news or not. I don't have to do shit. But I still have to double check, right? And then I ask, is there dilution? They'll tell me all the possible dilution. I mean, I'm like, holy crap. That used to take us forever, dude. Now it's like 30 seconds. And so that's been a huge edge. But that's a means that you should, like, just because there's dilution, it means they're going to use it, right, guys? But it helps me. And then I ask another prompt.

[00:49:58] [SPEAKER_09] Are there any upcoming important events? That's the thing that kills a lot of people. So a lot of times, I don't know. Like, why is this stock running? Oh, there's an earnings release at the end of the day. Maybe they're running it up. Or they have an investor conference next week. Oh, do not short that shit because they're trying to get that stock up to pump it for that conference. You see what I'm saying? And so when I see the date of the conference is next week, I'm going to mark it on my calendar,

[00:50:27] [SPEAKER_09] buy the rumors, sell the news. That day I'm going to short. Because that day, all the news, right? And so those are the things that AI is going to help you with, okay? And so, but how would you even know how to ask that? And that's the whole point. So it's all, it's basically how you get the information. But now it's even easier for you guys. We don't need to eat them filings anymore, dude. You know, but you should help.

[00:50:53] [SPEAKER_09] I mean, so basically it's easier for people to start learning now because the information is there in a clip of one. Back then, there's no way you'd fucking retouch 50-page financial report, right?

[00:51:07] [SPEAKER_02] Yeah, the edges have evolved. I mean, I just talked to a chief brokerage officer at Robinhood. He said they were paying $10,000 for basically what we all get for free these days. So edges just continually change.

[00:51:19] [SPEAKER_09] So now they're going to, data is, so now data is important because in order for you to train the AM models, you need data. You see what I'm saying? So you're going to see a different type of, you know, market changes, you have to adapt. And so those are the things I've seen that has changed my trading. And probably it's kind of like, that's what the algorithms are doing, right? And that's why it's like you have to keep up. But a simple buy and sell, buy low, sell high, but we're going to buy.

[00:51:48] [SPEAKER_09] So I had a lot of conversation with people. It comes down to support and resist. Same thing, guys. It's how you, basically, you need support, resistance, VWAP.

[00:51:58] [SPEAKER_02] Are those the only indicators you used? I mean, because last night I went around asking all the members, you know, what's their favorite indicator. They said the Alex indicator was their favorite indicator. You're selling out. No, I'm telling you what that is.

[00:52:13] [SPEAKER_10] So the Alex indicator is as soon as I get out of stock in Craters. That's usually what happens. So wait for Alex to get out and load up.

[00:52:22] [SPEAKER_02] That's what you guys are waiting for. So as far as the edges go, Alex, are you still focused like the first red day? Is that still an edge you're salivating on when you see that set up?

[00:52:34] [SPEAKER_10] Yeah, of course. I mean, look, at the end of the day, we've had some pretty big opportunities this year being silver, gold, oil. I think there was one more really big one.

[00:52:47] CAR.

[00:52:48] [SPEAKER_10] CAR. That was another really big one. That was probably, that is, if you ever wanted to see a first red day, you should print out the chart on CAR, frame it, and that's the one that you're going to make your most.

[00:52:57] [SPEAKER_09] How many red days, first red days card have them?

[00:53:00] [SPEAKER_02] So, yeah, that's what I was going to ask you because, okay, this is important, I think, for traders. This is important, Alex. This one's for you. And that is, okay, you have the A plus setup and you want to size it and you see the CAR. But if you guys remember, CAR kept doing red to green moves like every single day. So, at what point, like how much of your account are you willing to give one if the trade keeps getting better? Does that make sense?

[00:53:27] [SPEAKER_02] Like, okay, this went from $50 to $200. This looks like a great opportunity. Now $300, now $400. Like, are you hitting it every single day? Can you walk us through your price?

[00:53:35] [SPEAKER_10] Yeah, I think just like anything else, the market evolves, right? So, basically, the way the first red day used to work is multiple green days in a row, massive extension. Then the first day it goes red, triggers profit taking. Now, the market has changed. If you notice on CAR, the real first red day was not only when it went red, but it was under the previous day's lows as well. So, now that's the new trick. The new trick is not only does it have to go red, it has to go under the previous day's lows. That is an evolution, right?

[00:54:05] [SPEAKER_10] Something has changed. And the quicker you're able to observe that change, the more aggressive you can be.

[00:54:12] [SPEAKER_09] Or, like you said, play it simple, man. You'll need to score the entire move, man. Take the meat of the move. There's so much meat. That's the thing people don't understand. People always want to get the top tick. But top tick is how you get burned.

[00:54:27] [SPEAKER_02] And, Bal, are you looking mainly for – I want to talk about money flow too. Are you looking for opportunity out there that's not day one, for example? You're trying to find the plays that everyone else has forgotten about. Is that your approach? Yeah.

[00:54:39] [SPEAKER_09] So, there's a bunch of strategies, guys. So, we have what's called a low-hanging fruit. Basically, it's a continuation downtrend day or continuation up, right? And so, when a stock – what happens is when a stock reaches a peak and goes down. The next day, people forget about it. And so, those are the ones that we short. But the marketing has caught up. And so, there's been a stretch where that stuff doesn't work. They trap. So, but at the end of the day, it's always resistance and support. You don't go bulldoze in.

[00:55:09] [SPEAKER_09] You basically have to feel it out, right, guys? And so, let's go back to what you said about my legacy. I think we call them fantasy orders, but those are limited orders that you set up. So, what I'm doing is I have a strategy. I have multiple strategies. All I'm trying to do is find stocks that matches that strategy. That's what I'm doing. So, you see me trading 10 stocks. You know why? It's the one strategy that I found five stocks that matches that pattern. That's all I'm doing. I'm not even thinking.

[00:55:37] [SPEAKER_09] I'm saying, okay, these are the criteria that match that pattern. So, I'm going to sort that at these points. And so, I don't even think. So, when you see me like, wow, wow, how do you trade all these stocks? I trade the same exact way because I only trade the stock for that strategy. Everything else, I don't care. So, my strategy, I like to do dollar stocks. If I see a $4 stock, I don't even look at that shit. But if I do, it would be a different strategy based upon that particular setup, that particular price, all that.

[00:56:04] [SPEAKER_02] Bao, one of your members was asking, how do you have the discipline to bail on some of these? So, I've seen your charts. I know. But you don't re-attack. I mean, you'll see the red triangle and the stock goes up.

[00:56:15] [SPEAKER_09] Maybe I hit a Mac loss. So, I'll tell you right now. I'm my worst enemy, guys. And so, after – so, the thing is this, man. The thing is like you – the most dangerous trade is the ones where you've been on a hot green streak. And usually green streaks end with what? A ginormous loss. Because like the way you make money is very indicative of your long-term success. If you're making money, breaking the rules, adding a loser, praying to God, double down, praying.

[00:56:47] [SPEAKER_09] So, it's like you have to understand, are you making the money the correct way? And so, that's why I show my chart. My chart might look ugly as hell, but they look the same. So, the only thing is like I have to stop out. So, basically, at the end of the day, guys, it's kind of like you have to keep – stay in your niche. The moment you go – the moment that there's nothing in a trade is when the shit hits the fan, guys.

[00:57:15] [SPEAKER_09] And that's why you need to – so, I always say this. Don't give me the gun. Don't give me the gun to be able to kill myself. Take everything away. So, I strip my ability to – I have a max loss, all that shit. And, of course, I would love to trade that stock again. But I already hit my max loss on that stock.

[00:57:29] [SPEAKER_02] Okay, on that particular stock. Maybe not on the day, but on that particular stock you have with Cobra maybe with that.

[00:57:35] [SPEAKER_09] So, that's why we see I don't want to attack. I want to attack, dude. But why sometimes – it's not even a max loss. If I got beat up from the bully, why am I returning back to trying to fight that bully again? Why don't I wait tomorrow until the bully is weaker? Because usually when a stock beats me up, it's going to beat everybody up. And it's going to go higher. And so, what happens – and sometimes you forget the fact that, dude, tomorrow is a new day, guys.

[00:58:03] [SPEAKER_09] The bully is going to be weaker the next day or the next hour. Why do you have to wait? And sometimes, like, it's best because you have PTSD already. When you get beat up, bro, your brain's all screwed up.

[00:58:14] [SPEAKER_10] I mean, another really good example is this. When you're focused on the short side, these stocks are moving based on hype, based on pumping, based on things like that. As soon as the hype is done, these things crater really fast. So, what you have to remember is a lot of these stocks on day one is when they are the freshest, most hyped up, most momentum. It's Mike Tyson from 20 years ago. You don't want to be fighting Mike Tyson from 20 years ago. But day two is Mike Tyson that fought Jake Paul. A little bit better odds, right?

[00:58:44] [SPEAKER_10] So, that's what you have to think about these stocks is day one on the short side is very, very risky, very difficult. It might work sometimes. But chances are you're better off waiting for day two when the stock is a little bit weaker, when it's forgotten, when there's no more hype. And you've seen these stocks sometimes fade 50% on day two with the easiest, cleanest fade, no bounces, nothing. And that's where the edge comes from.

[00:59:09] [SPEAKER_02] But it's important to, even on day two, if it does red to green, it's invalidated at that point, right? In which case, take it off, right? Right.

[00:59:24] [SPEAKER_10] Yeah, big time. Everything is a lot crazier. I feel like ever since PDT went away, a lot of these moves are way more irrational, a lot crazier because now there's way more market participants, right? There's a lot more people doing a lot of things.

[00:59:36] [SPEAKER_02] How have you adjusted your strategy?

[00:59:38] [SPEAKER_10] Yeah, I think something that has been really, really key lately is instead of trying to go for bigger picture trades, instead of trying to go for these home run trades, it's more of a nail and bail. Take the money and run away. Let the singles add up versus trying to add to winners, add to winners. Because what's been happening is every time you add to a winner right now, they just reclaim and come back on air. So I found that at least in this current market cycle, take the money and run away. Sometimes all you get is a starter, which is totally fine.

[01:00:08] [SPEAKER_10] But it's better to have that and to build that consistency than to kind of get chopped up trying to size up. Because six months ago, you could have added to your winners and massively improved your P&L. But right now, adding to a winner is not rewarding. So take the money and run has been currently what's been working for me.

[01:00:27] [SPEAKER_09] And always remember this, guys. For me, it's easier for me to make, let's say, finer bucks two times than it is to make $1,000 once on a trade, right, guys? Or three $300 trades. So consider that. So that's why I, because everybody trades differently. Every strategy is different. You go back and you examine your trades, obviously. And then, so I figured out for me, the best way for me to make $10,000 a day is not to make one stock making $10,000.

[01:00:55] [SPEAKER_09] It's to do maybe 15 stocks that will make me $500 each. And that's what I'm doing. I'm looking for the steps I make that. So you can try that. Like, if you're really good at making $200 and you want to level up, why don't you find more setups that makes you $200? Or find more stocks that fit that setup before you try to load up. But you can load up. But I'm just giving you different ideas of how you can achieve the same P&L results.

[01:01:20] [SPEAKER_02] Is that something, Val, you're most proud of is your consistency? Because you've gone, like, a whole year and only, what, four red?

[01:01:27] [SPEAKER_09] I work way too hard, and I'm trading 20 stocks, and Alex wakes up, trades one stock. And he's like saying. So it's a different type of personality. That's my point. But it's a different setup as well. Alex is, like, tracking that stuff all day. Whereas I am, like, a nervous wreck. I like low-risk kind of setup, right? And so, like, so that's why I put a max loss, not even a day max loss, guys. I put it at a point where I can make back the loss.

[01:01:51] [SPEAKER_10] I mean, so the way I think about it, trading, is, like, attention. You only have 100% attention per day. If Val is trading 10 stocks, he has 10% attention on every single stock. If I'm trading one stock, I have 100% attention. I'm watching every single little nuance. Whereas Val might be watching one stock here, turning his head. Maybe he missed something over there that I saw because I was focusing on it. So for me, I like to focus more on one, have all my attention there.

[01:02:19] [SPEAKER_10] Whereas Val kind of divides his attention because he's better at multitasking.

[01:02:22] [SPEAKER_09] Remember, in terms of your personality, guys, there's people that, you know what I'm saying, I wish I could do that, but I can't sit around all day. And I can't do what Val does. I can't do what he does. So we make our flaws work for us. Everybody has a flaw, guys. Like, I can't wake up. So, you know what I'm saying? So I know, like, if I wake up, I'm drunk, it's just, man, shit's gonna happen. Just drink until I pass it out so I don't wake up. So you basically go back to your trades, guys. Every week, every day, go back and see what works.

[01:02:53] [SPEAKER_09] If you're losing all the fucking time trading a penny stock, don't trade penny stocks. Or at that time, right, guys? And if you keep losing long, go short. Or if you're losing short, go long. Try different things until you become consistent at one thing. And so, like, I've been doing this a long time, guys. So the reason that I'm able to have so many setups is because when things are slow, I don't cry. I'm trying to find a different strategy all the time.

[01:03:22] [SPEAKER_09] And so the longer you do it, the more tools that you have in your bag, right? Like, if I teach you just to use a hammer, that's all you can do. When there's nothing to hammer, what are you gonna do? You're gonna sit and cry? We're gonna learn how to use a power drill, right? Yeah.

[01:03:35] [SPEAKER_02] Traders, just a couple more questions, and then I'd like to open up the floor to some of you. So if there's a question you have on your mind, go ahead and start thinking of it. And we'll address that in just a little bit here. Moving forward, you know, one of your members asked this. Now that PDT is gone, especially as well, I mean, how important is it to keep, what's the threshold traders should keep in their account? And how much should they continuously pay themselves and not have a certain cushion like we were discussing earlier? This is Kevin.

[01:04:05] [SPEAKER_02] We hope you're enjoying this episode so far. If you are, take a second to leave a comment. We read them all and truly care about what you think. And if you haven't yet subscribed to our email list, visit chatwithtraders.com and click subscribe so we can keep you posted on information that matters. Now, back to the chat with our guest.

[01:04:22] [SPEAKER_10] Yeah, I mean, back before PDT was out there, what I would do is the account minimum was $25,000, so call $30,000, and I would have a $35,000 account. Now, every time I took that $35,000 to $50,000, I would wire out $15,000, right? That was my paycheck. So I made $35,000 to $50,000, wire out $15,000. $35,000 to $50,000, wire out $15,000. Now, these days, I mean, you know, it all depends, but I try to at least wire out once a week.

[01:04:50] [SPEAKER_10] So let's say I made $10,000 on the week, I'll wire out $5,000. You know, if I made $2,000 on the week, I'll wire out one. Because for me, what I found is you are not rich with the money in your trading account, you are rich with the money in your bank account. And for me, I would rather have the biggest bank account versus the biggest trading account. Because with the money in your trading account, that is at risk. All it takes is one day to be an idiot. All it takes is one day to ruin everything.

[01:05:18] [SPEAKER_10] And for me, I would rather ruin a $35,000 account than ruin a $3 million account.

[01:05:25] [SPEAKER_02] But we always hear that once you find consistency, you just need to add zeros, you know, and continuously grow the account. So what are your thoughts there?

[01:05:33] [SPEAKER_09] Nah, man. It's kind of like you're used to getting punched at the lightweight level, and then now Mike Tyson's punching is not the same, right, guys? So every time you add size, it's a different complexity. You have to, imagine if you want to make, you make $100 a day, and now you want to make $1,000 a day. Can you afford to lose $1,000?

[01:05:52] [SPEAKER_10] Like for me, for me, you guys can see my daily trades are anywhere between $1,000 to $10,000, right? Because for me, that's what I feel comfortable with. If I wanted, I could put more money in my trading account, maybe go for $20,000 to $50,000 a day. But that to me is not worth the stress level. That to me is not worth the headache. For me, I found my sweet spot in that little window versus a guy at a hedge fund. I mean, to that $1,000 to $2,000 a day is like he's going to get fired. You know, they have to do larger size.

[01:06:21] [SPEAKER_10] They have to take bigger trades because that's their level. But for us, I mean, $1,000 a day is $250K a year. $4,000 a day is a million dollars a year. I mean, I think a lot of us would be very, very happy with $4,000 a day because that's, to me, what I found is the perfect level of being happy in your day life and being happy in your trading life. Because at the end of the day, the more size that you put on, there's a direct correlation with stress, right? And now trading for, you know, over 12 years,

[01:06:51] [SPEAKER_10] I would rather be less stressed than have more money because the money is not going to change anything. So what you guys have to realize is there's going to be a sweet spot in your trading. Maybe for you, it's $100 a day. Maybe for you, it's $500 a day. Maybe for you, it's $1,000 a day. Whatever that number is, you want to be able to consistently show up to the market and make it feel boring, right? Like for Bao, Bao could show up every day, make $1,000 a day, but that's too damn boring. So he pushes for more, right? Same thing with me. I could show up every single day,

[01:07:21] [SPEAKER_10] make $1,000 a day, but that's too boring for me. So I try to find my sweet spot, one to 10. Same thing with Bao. You know, anything more than that, to me, I find increases stress. And if I'm going to have increased stress, it better be at Bao at the club setup because that day is worth it. So the car example, right?

[01:07:39] [SPEAKER_02] I mean, for the traders listening here. Keep what you need to work in your account, guys. That's what it is. But okay, so for the traders listening that are having trouble being the aggressor in those opportunities, there's like the aggressor and then there's the kind of traders that retreat. You know, we get fearful in the winter. So some of us take those positions off early and then we get hopeful in the losers sometimes. I was talking to one of your members about that. So what's the intersection there?

[01:08:09] [SPEAKER_02] How can traders learn to be the aggressor more in those car setups?

[01:08:13] [SPEAKER_10] Yeah, I think something that's really important is it's always okay to take a starter, right? If you have a plan, take a small starter, whether it be 10% of your size, 15% of your size. Now, one of two things is going to happen after that starter. Either A, it's going to invalidate your thesis and you're going to get out on that starter and have a very small loss. Or you're going to get a signal of confirmation. If you get that signal of confirmation, that is when you add to your winter. So what you have to remember,

[01:08:43] [SPEAKER_10] let's use short buys as an example, right? If a stock is breaking under VWAP, that is a signal. If a stock is having a death candle, that is a signal. If a stock is breaking low of the day, that is a signal. Well, if you see any of those signals on your trade, that is your green light to get them a little bit bigger. Now, if you're taking a starter and the stock is reclaiming VWAP, your thesis is invalidated. If you're taking a starter

[01:09:13] [SPEAKER_10] and the stock is reclaiming the death candle, your thesis is invalid. If you're taking a starter and the stock is breaking high of the day, your thesis is invalid. So in one scenario with your 10% size, 15% size, whatever starter size you want, if your thesis is invalidated, you'll probably lose 100 bucks, let's say. But if you have a starter and you add to your winter after a signal, then the chances of your trade ballooning into a bigger winner are amplified.

[01:09:43] [SPEAKER_10] It does not mean it is guaranteed, but at least the odds are in your favor. If you're taking a starter, maybe your chances of winning are 50%. Then you get a death candle. Chances go to 75%. Then you get a low of the day break. Then it goes to 90%. So you have a pretty high probability on that setup. But 10% of the time, it's going to go from low of the day to high of the day and kick your ass. When that happens, you get out and you move on to the next because that's not going to happen every time. It's only going to happen 10% of the time.

[01:10:12] [SPEAKER_09] Another good trick I like to think all the time is like we always think about the entry, the exit. Try to think about the exit first. Where do I want to get out of this stock? Is it even worth it? Because oftentimes people think, okay, I'm going to get in this setup. And then you're scalping for two cents. You see what I'm saying? So it all starts with drawing your lines, doing your technical analysis. But more importantly, ask yourself, what do I want out of this trade? Because a lot of times like,

[01:10:42] [SPEAKER_09] oh, this is a good line. I'm going to get it short. But they don't realize that the next line, support line, it's like very tight down there. So you're risking a huge upside for a tiny win. So ask yourself, where am I going to exit? And is it worth even entering? And oftentimes I'll tell you, no, don't enter there. Another trick is like, back side, front side, it changes all the time. But I like to use like two line breaks because I trade line to line, support to support, resistance to support, right? So I short the resistance, I cover the support.

[01:11:12] [SPEAKER_09] But the thing is, if that line is too tight, why would I even enter for 10 cents a scale? So the rule of thumb I usually do is like, if you want 10 cents, you need a 20 cent range. You want 20 cent range, you do 40. Because you need that wiggle room for error. Because like, if you're trying to make 10 cents and the perfect trade is 10 cents, you're fucked. So line in line, guys.

[01:11:33] [SPEAKER_02] Yeah, incredible. Hey, I got one more question for you. Thought I'd make it fun. Val, I did a little research and I saw that. You was the AI? No, no. I was doing some research on some feng shui superstitions. And look, I heard that you, look, you bought a $10,000 computer and took a loss and you threw it out. Is this true?

[01:11:57] [SPEAKER_09] That was at David, DC. I went to visit him in the Cayman Islands and I brought, dude, you remember that freaking IBM laptop that was the first dual screen and weighed like 15 pounds. And this was like 15 years ago. It paid like, it was like almost like $8,000 laptop or some crap like that. And it was so bad luck that it's still sitting at home. I'm there again. But I was, because it was so expensive and the ones I bought it. And I feel bad, like, you know what I'm saying? So I kept it like a relic.

[01:12:27] [SPEAKER_09] So I'm very superstitious, guys. The reason why is this, guys, is anxiety. So do what you have to do to calm yourself down, even though it's exaggerated. So you make a ritual what the hell you need to do, right? Because once you get out of that ritual process, that's what you all screwed, right?

[01:12:44] [SPEAKER_12] So what's your ritual? I mean, I don't think you wore the same pajamas. Knock on wood. Take a shot.

[01:12:52] [SPEAKER_09] But, but, all right. So the thing is, it's like when I play sports, guys, like when I'm learning to play golf, I'm going to buy the best equipment I can because then I have no freaking excuse why I'm losing. So a lot of people on Twitter, oh, my internet is down, my computer crashed. What the fuck? You're making fucking excuses. So I am assuring I make no excuses. Oh, today's Friday the 13th. That's why I'm losing. But, but, but, but if you, so why don't you get, why don't you have some sort of like rabbit's foot

[01:13:22] [SPEAKER_09] to combat it? Whatever stupid thing, I want to give myself zero reason. When I lost on the XHG, you know that post, I didn't give any excuses while I lose, right? I didn't say I was fucking tired. I'm like, fuck, I fucked up. I shouldn't have woke up. You know, that's easily fixable. Why did I wake up? That was my mistake. I was greedy. I broke my rule and then God punished me and where the hell is this? So my ritual is basically to strip myself from any possible excuses because that's,

[01:13:52] [SPEAKER_09] that's how I know I'm going to break the rule because I, I justify breaking the rule by looking at the filing and seeing that, oh, there's dilution. That's why I broke the rule. Bullshit. You know, you give me some, so that's where all the feng shui, all that stuff comes in. Gotcha.

[01:14:07] [SPEAKER_02] Alex, would you like to add to that and then anything else, you know, final words over to the both of you and then, of course, we'll open up the floor to you guys.

[01:14:13] [SPEAKER_10] Yeah, I was never superstitious until I met Bao. Now I'm the most superstitious guy in the world. You know, I have, Bao gave me a lucky piggy bank. Bao gave me a lucky year of the dog frame. So anything that I have in my office is usually pretty lucky. It's actually very funny because, I keep it all. And if I ever have, so there's a story, I don't know if you guys remember, I had a lucky candle, right? It was supposed to be lucky and the moment I lit it up, I lost money. So I was going to throw it out

[01:14:42] [SPEAKER_10] but my cousin George was around and I was like, George, do you want this candle? It's supposed to be lucky but it's pretty much unlucky and he's like, yeah, sure, I'll take it. I was like, just before you know, I lost money. Are you sure you want it? He's like, yeah, I'll take it. He lights it up. He loses money. Next day, it's in the garbage. So like Bao says, these are things just to calm us down because you don't want to feel the anxiety in your trade. You don't want to think, oh shit, my unlucky rabbit's foot is in the room. I got to get rid of it. You just want to make sure that you are calm, cool and collected in the trade and like,

[01:15:10] [SPEAKER_10] it may be lucky pajamas, it may be, you know, rabbit's foot and maybe whatever the hell it is but it's just meant to calm you down because trading is already stressful and you're already overthinking. Sometimes you feel like if you have a lucky microphone next to you, that's going to calm you down enough to just focus on the trade in front of you.

[01:15:29] [SPEAKER_09] So some funny things. So people see me like, when I enter and exit, it's always like an eight or a seven and people, wow, is that some sort of secret thing? Nah, dude, because I'm superstitious as hell. Four in Chinese is death. I never want to have four so when my penile says four, I have to either take a loss or make more to get rid of that.

[01:15:50] [SPEAKER_10] Bao's engine. Hello? Nope. Bao's entry is always ending eight. He's always entering 398, 378, 368, 428. So if you ever see eight on the tape, that's Bao because superstitious, right?

[01:16:06] [SPEAKER_09] No, the craziest one was I was trading at my home and then I was like, fucking, I had a little, I mean, I wasn't really losing but someone told me, that's why, don't tell me any superstition. Someone told me like, the feng shui of your house is bad because it covers the front door. I literally pay someone next day to break down the fucking wall and I remodeled my fucking front of the house and then move the door because like, front door because I have the back door. Yeah, so I fucking had to move the door and do all this shit.

[01:16:36] [SPEAKER_09] But it worked. It's like drinking, right? Whatever you need to do is a better way to do it. That's what I'm saying. So it's like, numerology. So you know what time my fucking alarm is? 4.28, not 4.30.

[01:16:52] [SPEAKER_02] Just whatever it takes, right guys? We identify the secret. All right, traders. Hey, thank you so much. I mean, tremendous value add here. So traders, let's open up the floor. Any questions you guys have prepped, raise your hand.

[01:17:06] [SPEAKER_00] We'll get to you. First of all, there's two concepts that you brought up here and they kind of go together and I was wondering if there's something I could ask that would take it further where I would use it. So you talked about risk earlier and you also, somebody, I think it was Alex made the comment earlier about bring your size down so that you can make your risk larger. One of the things that I tend to have happen to me is right before it would go where I'd make money, I'd get shaken out because my stop loss is too close and that. So

[01:17:35] [SPEAKER_00] what the question I have is, would you, what would you use to gauge it? Because I would go smaller to make it larger so that I don't get shaken out. Now there's the ones where they shake you out it just goes bananas and that. But what would you use to gauge where you want to set your, you know, the range for your loss so that you're not getting shaken out before it actually does the move?

[01:17:53] [SPEAKER_09] Let's take the mic back if we can. We actually have a video on how to take a loss but then you can answer

[01:17:59] [SPEAKER_10] on specifics. I think it also depends on the range, right? So like Bao said, if you're trying to make 10 cents on a stock, the range has to be at least 20 cents or above. So for example, if a stock has a dollar range, you know, your stop should not be 10 cents. It should be at least giving it 50 cents worth of room. So you should be sizing accordingly enough to be able to withstand that 50 cents of the move. So that to me is what I feel a comfortable amount. Do you think anything different?

[01:18:27] [SPEAKER_09] So, so we have a video you guys should all watch the FAQ on trading series. FAQ on trading. I made a bunch of these videos and one of them is how to think a loss. So when people talk about loss, right, you have stop loss but there's many ways to take a loss, guys. It could be time-based. Like, bro, at my 1030, you better fucking cover your short, dude. By 3 p.m., you better cover your short, dude because that spike is fucking coming. You see what I'm saying? So don't think of stop losses as just like one thing. And remember, you can stop out

[01:18:54] [SPEAKER_09] not all your partials too, guys. You see what I'm saying? Because you're adding, confirming, and you also can exit before you... It's like, you don't have to like eat all your losses at once. Why don't we eat small losses along the way?

[01:19:08] [SPEAKER_11] Any other questions?

[01:19:09] [SPEAKER_09] Oh, yeah. And the one thing is this, man. Don't worry about them hunting your thing. They don't give a damn. But they will hunt you if you're stopping at two bucks. Everybody stops at two bucks. Why the fuck are you doing at two? They're going to go two or one, boom, you're dead. So what I do is I do two, 14. You cannot go with the herd.

[01:19:27] [SPEAKER_07] Thank you, Chad with Traders and Alex and Bao for doing this. It's great. It seems like Alex and Bao, you both have good lives. You have material means. You have good relationships. You have a house to live in and you're pretty healthy. What keeps you from just laying down on a beach and sunning and having pina coladas? Why do you keep getting up in the morning and doing what you do? I mean, what keeps you motivated? I ask myself that every day.

[01:19:57] [SPEAKER_10] I mean, the honest truth is this is not work. This is like pleasure, right? For if you think about Bao, Bao told me one time that if his hands get chopped off, he will learn how to trade with his feet. If his feet get chopped off, he will tell me verbally what trades to take. And if I don't add liquidity, he's going to haunt me from the grave. So Bao is, he has love for the game, right? Bao loves trading. He loves trading. I love trading. I love the game of trading. You know, when you're growing up,

[01:20:27] [SPEAKER_10] you have that favorite video game, Call of Duty. I mean, mine was Batman back in the day, but that's that game that no matter what, you still want to keep playing. You still want to keep getting better. You still want to unlock more achievements. So for us, the riches, the house, the cars are all almost, what is it called? A high score in a video game, right? So we don't need the high score anymore. We just love the game. And I know for a fact that after 20 years of trading value, you still have the same love for the game and you still keep playing the game because to you, the game is everything.

[01:20:57] [SPEAKER_09] Exactly right, guys. Because what, I mean, I've sized down to an account worth like 30,000 just because I want to show you guys that you don't need millions of dollars. I used to trade with millions of dollars, guys. And let me tell you something. It's like, so I keep telling you guys, the roadmap to making $1,000 a day is making 50 bucks a day you get to sleep. And then you make 100, then you make 200. Don't rush to make 1,000. Some people are happy with 200. My goal when I started trading like a long time ago was to be able

[01:21:26] [SPEAKER_09] to walk into any restaurant and buy a food because I still have a job. I suggest that everybody do not quit your job. It's like supplement your income. The moment your supplemental income exceeds your day job, then you quit. Why? Dude, I didn't want to quit my job. I was an engineer. I was making a shit ton of money, dude. But they forced me out because I was trading more than I was working. And I was collecting a paycheck. But until you get to that point where you're making millions of dollars, I'm like, they're looking at me like, Baal, you need to be training. I go, oh, bye-bye. They don't know what I'm doing. You know what I'm saying?

[01:21:55] [SPEAKER_10] There was something really powerful that Baal told me a while back and it really stuck with me. It was the moment that Baal realized he was rich is when he stopped looking at the price on the menu. That to me, when I heard that, I was like, holy shit. That was the level of rich that I want to be. So if you think about it, like that doesn't really take much, but it's still so powerful. So you have to remember that, you know, being rich is not a Bugatti. It's not a beach house. It's not that. It's the freedom to do what you want with no one else telling you otherwise.

[01:22:25] [SPEAKER_10] To Baal, that is ordering whatever he wants on the menu and not looking at the prices. And that to me is really powerful.

[01:22:31] [SPEAKER_09] Exactly right. Because I don't wear Gucci and stuff. So you find, you base your rich on something else. If your family's happy or you have an extra day of work that you don't have to work or you pay for your kids to go to Disneyland, which is like, what, $10,000 now? That's fine. So that's my point. So I keep telling people all the time, and the problem with that happens, you think you need a Bugatti? Nah, dude. You know how much $200 is? Extra income? Imagine. That's like a win-for-life lottery ticket. You can now walk into a restaurant and order a steak or whatever the hell you want to do.

[01:23:02] [SPEAKER_09] That's life-changing to me. So between me and you, that's the thing people don't understand. You have to have realistic expectations. None of us thought we're going to make millions and millions. I didn't think I was going to make millions a day. You know, my biggest day, I started down $10,000. Then at the end of that day, it went for $5 million. Yeah. So I didn't expect to make that. I was trading my process. What was the lucky close or the lucky things you had at home? Dude, man. I'm so serious. So like, that year that Alex said, I only had seven losses.

[01:23:32] [SPEAKER_09] So I wore the same pajamas until I lost. It was so crinkly. It was over three months. I did not wash that shit. There was a hole every fucking wear. And I'm so fucking mad because like, because like one day I was like, I put in a wash, but then I was married at the time. And so like, my ex was like, what the fuck is this? She threw out my fucking looking pajamas. And then that was when the berries went downhill, dude. I'm fucking out here. That was a true fucking story.

[01:24:02] [SPEAKER_06] What else do you guys have? Now AI is making real time revolution nowadays. A lot of university professors advising people to become a plumber, electrician, whatever. What's your expectation for traders, for real traders? Is the AI going to take this job? Is maybe some people will have the AI to trade with another AI or what's your expectation for next three, five years?

[01:24:29] [SPEAKER_10] So great question. And what you have to remember about AI is AI is as good as the data that you put into it. If the person putting info into AI is unprofitable, AI is probably going to be unprofitable as well. So it's all determined based on the data that's in there. So I think that regardless of AI, not AI, there's always going to remain inefficiencies in the market. You know, there's always going to be stocks like CAR. There's always going to be crazy moves like oil, gold, whatever maybe, or beyond meat from last year. Right? So I think that there's always going to be

[01:24:57] [SPEAKER_10] inefficiencies in the market. And I think so long as we are able to capitalize on those inefficiencies, it will not matter. It may reduce the amount of edge in one place, but it'll probably increase the amount of edge somewhere else.

[01:25:11] [SPEAKER_09] Surprise, surprise. AI has been there before you guys were even like thinking about trading. So 20 years ago, I used to work for a company, Fair Isaac, FICO score. They invented the ready. I worked for an AI company before it was AI. So I went to night trading and they tried to implement AI for that shit. So AI's been there, guys. And so AI is just a tool. AI is like, remember when computers came on and said, oh, he was going to lose all his jobs as a fucking computer now. Right? What do we do? We still got to work.

[01:25:41] [SPEAKER_09] So don't worry much on AI. It's like focus on, first you have to read and write and do arithmetic. Learn the core. Once you learn the core, you basically tailor your strategy to whatever because the AI is using to make billions of dollars. They don't give a fuck about your two bucks, $200, right? So I figured, hey, I'm just going to take my little piece. I'm not going to read that. But if you become really good, then you got to worry about AI. But at this level, what am I going to do? I'm going to scalp 100 shares, make 200 bucks.

[01:26:10] [SPEAKER_09] I don't give a damn about AI, but I'm going to use AI to find information that matches my thing. So don't be scared of anything new that comes out because if AI was able to kill you, they would have killed you already. But they're still humans, right,

[01:26:24] [SPEAKER_05] trading against AI. Thanks, Bao and Alex, for taking all the questions. In the Bao at Disney World versus Bao at the Club example, I want to ask about the risk profile for both of those scenarios because the reward profile is obvious that you want to bet big. But let's just say Bao at Disney World is one to two days of work on a normal day-to-day basis. But when you get that ideal A-plus setup, how does the risk side of it, like how much are you willing to risk on that?

[01:26:52] [SPEAKER_10] Right. So the honest answer is more risk is more reward, right? And I think that what people have to understand is exponential bet sizing. So I go over this, but let me kind of go over it again just in terms of basic math is on a C setup, let's use 1,000 shares. On a B setup, you use 5,000 shares. On A setup, you use 20,000 shares. So the difference between a C setup and an A setup is 20x the size, right? So that's something that to keep in mind very, very important is how much bigger

[01:27:21] [SPEAKER_10] you should be on that setup the higher the grade is. Now for you in terms of risk, it's what you're comfortable with. Let's say normally your risk is $100. That's your day-to-day risk. But if this setup is an A setup, a true A setup that you are confident in, not that you're gambling on, not that you're guessing on, a setup that you've back-tested, you have confirmed, and you know, maybe you should raise your risk from 100 to 1,000 for the day, right? Now that's totally up to you. Maybe you say, hell no, I never want to risk $1,000 in my life.

[01:27:51] [SPEAKER_10] Maybe the number's 500, but it should be an exponential amount. It should not be 100 to 200. It should be, if it's, again, 20 times larger, right, in terms of share size, I mean, at that point, it should at least be five times larger in terms of risk, maybe even 10 times larger. And if you're not comfortable with that, that's not a problem. Not a problem, but you have to adjust that accordingly. What people do is their normal day-to-day risk is $100, and on that setup, they risk $200. I mean, dude, that's not enough. You've got to be able to risk for the reward.

[01:28:20] [SPEAKER_09] Well, that's the thing. That's the correct way to do it. Remember, 12 years. If you're starting out, guys, don't do multiples, right? You basically, you have to, it's the trust process. It's the learning process. Because what's going to happen is first, not all first grand days is traded the same for everybody. You see what I'm saying? And so what happens is you have to, you don't just go from zero to big size. Do it slowly. Remember, this is a marathon on the spring, guys. So when you're asking this question, which is good, but you know what? You should have data set examples for yourself,

[01:28:50] [SPEAKER_09] right? So what you need to do is find those setups, back test it, and play around with the numbers. But then you have to trust yourself. So basically, in my opinion, guys, you start with a little bit first so you get trusted, and then you double and a little more and a little more. And then after a while, you're going to see the nuances, okay? Because not all first days setups are the same. And also, not all risk is the same. So when you say, oh, I'm going to risk five times, whatever, where are you risking? The risk should be adding to the winner

[01:29:19] [SPEAKER_09] when you're up. Not, I'm losing, I'm going to add. Not all risk is the same. So you have to apply the risk at an appropriate time at an appropriate setup. And also, it's like, okay, how are you going to stop out? If you're five times your size, are you going to do it partially or are you going to do all at once? So there's a lot of things that you guys have to figure out. So don't just automatically go, okay, I'm going to do five times like Alex told me. Oh shit, Alex, I fucking lost. You see what I'm saying? So basically,

[01:29:48] [SPEAKER_09] Alex is doing it for his thing. You follow the process because you have to understand the fact that his risk is like maybe different than your risk because he knows that setup because he's done seen that set up 10 times already, whereas this is your first time seeing it.

[01:30:02] [SPEAKER_10] It's just data, right? The more data you have, the better. Like, you know, if you do not know what your best setup is, you have not earned the ability to size up. If you do not know what your best setup is, you have not earned the ability to size up. My best setup may be your worst setup. Your best setup may be my worst setup. So it all depends on you, right? It all depends on you. Traders, that's been incredible.

[01:30:23] [SPEAKER_02] Alex, Baal, hey, thank you so much. Know your setup. Overcome adversity. I mean, these are themes. Find those asymmetric opportunities. Traders that are listening at home, if you want to see more of these live events, let us know in the comments below. We're going to be traveling more. I'm excited. Again, getting to meet with like-minded traders, there's nothing like this. And MIC, as I've witnessed, is a family. I mean, you guys are incredible. It's been a pleasure to get to know you.

[01:30:53] [SPEAKER_02] Thank you again. I appreciate the both of you for the invitation.

[01:30:59] [SPEAKER_08] You've reached the end of this episode of Chat with Traders, but rest assured, there are more episodes loaded with real market insight and zero hype on the way soon. So to stay updated with each great new release, subscribe to the podcast and we'd love it if you'd leave a rating and review. We'll catch you next time on Chat with Traders.

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