Let The Next Five Minutes Save Your Trading Career

 As a beginner trader, one the most important concepts to understand is all about psychology. The sooner we figure this out, the faster we’ll get the desired results. There are so many great books about this matter that I recommend you reading (my favorite one is “Trade Mindfully” by Gary Dayton) that go further in detail on describing how complex we’re built as human beings when it comes to mind balance.

In particular, dealing with losses is by far the biggest issue among traders (read more about it in my previous blog post here). From the newbie to the most veteran of all, every single one of us will experience getting stopped out of a trade, realizing a loss. Especially for day traders, from this point on the strongest desire is to immediately make it all back. The problem is now that the emotional composure can be in real trouble causing the ability to get good decisions about the next trade to be seriously compromised.

In fact, I personally believe that the capability to promptly bounce back and recover from a loss is one of the hardest to achieve when it’s much easier to jump into another trade and, next thing you know, to get into even deeper holes. If you’ve ever found yourself in this situation, here are my own four practical instructions to deal with it.

Add these four practical steps to the trading routine

Right after a losing trade (more importantly, in case this is the first trade of the day) I highly recommend to:

1. Stop Trading for 5 minutes: take a deep breath and start the countdown timer. Until it doesn’t reach zero, do not take any more trades. Until then, focus on the next two steps.
2. Write down your emotional state: always keep a pen and a sheet of paper nearby the trading station. Whether is anger, frustration or anything else it doesn’t really matter. Writing down how you feel is an effective way to start letting it go.
3. Have a short walk: this will allow your mind and body to “physically” get rid of that sensation and, also, you can take advantage of this time to mentally post-process the trade. Did you respect the trading plan? Remembering that losses are part of the game always help.
4. Wait until the next “A” quality setup: get back to the trading station, make sure that the countdown has finished and start hunting for the net “A” quality setup to present itself knowing that now, after only five minutes, you may have recovered the proper psychological state to start trading again.

Of course, this time-span is arbitrary and can be readjusted to fit your own personality. A great approach can be to lower this countdown time as experience grows. The main point remains that discipline, perseverance and patience will make a trader being successful in the long run.

“Use the losses and failures of the past as a reason for action, not inaction.” -Charles J. Givens

See you in chat-room!

Trade safe,

Roberto Barbaro

The Ultimate Answer For Questions About Freedom

When I decided to radically change my life and to focus entirely on trading (read more about it in my previous article here), of course I did not know exactly what was lying ahead for me. But luckily, I decided to look at the mystery behind that state of uncertainty more as a stimulus than a hurdle that would have prevented me to move on. I’ve just had enough of the 9-6 office habit that I was willing to sacrifice the level of comfort I had gained and got prepared to start completely new.

During this phase of my life, I started digging deeply within myself with the only goal of working for something I was really passionate about. I quickly realized I wanted to learn how to trade mainly because I’m literally in love with the process of doing that (and, yes, I’ve done another article about this you can read here). With that said, I also love doing many other things, including a profound passion for traveling the world.

In fact, one of the greatest benefits about trading that has always been fascinating to me is the possibility to do it from potentially anywhere in the world. In my opinion, this is by any means, the ultimate definition of freedom. And I was in desperate need of that! But, that’s another story, because here I want to give you my best possible pieces of advice about trading “on the go”.

The top 4 tips for trading “on the go”

I always like to give my contribution to traders in the best possible way to truly help anybody that would find himself in the same situation. Personally, this is the first time I’m actually traveling and trading away from my main trading station. So here is what I’ve in store for you that I’m learning from trading and traveling:

• Make sure your laptop has every tool and is set up with everything needed for your trading activity and test your traveling environment for at least one full trading day while still being at home;
• Trade with lower size than usual, especially at your first experience. I’d suggest to not go over 50% of the normal sizing. You don’t want to get overexposed in a non-familiar environment;
• You’ll never have the exact same setup or layout that you have in your main trading station at home and that’s ok. As traders, we always need to adapt to the surrounding circumstances, this is a great chance to prove yourself you can readjust to them. I’ve started trading with as little as one laptop and an iPad used as an external display and I can tell that’s enough to make money, as long as we’ve brought the skills to do so;
• Prepare a checklist that contains everything you need when packing the next time. This will allow to have everything you need to perform the trading activity once you have a stable internet connection. And remember to keep updating it as your needs evolve.

“Man cannot discover new oceans unless he has the courage to lose sight of the shore.” – Andre Gide

See you in chat-room.

Trade safe,

Roberto Barbaro

Grinding Out A Challenging Month As A Day Trader

Hey all, JohnL10 here!

Now that April is over, I can put some of my thoughts on paper about why I think it was a challenging month for both long and short biased small-cap traders.

From my perspective, there hasn’t been much follow-through on positive corporate news from the companies that we focus on, and it seems like we’re on the tail end of a lot of hype from earlier this year. Contrary to Q1 of 2017, where I have already made more than a 6-figure salary in 3 months, Q2 is starting to be much more challenging.

Here’s the run down:

Many of the stocks that we’ve traded in Q1 have raised a lot of capital, even back during Q3-Q4 of 2016. During that time, stock that was sold to private investors gets locked up and is restricted from trading. Most lock ups are anywhere from 3 to 6 to 12 months long.

I feel like for the entire month of April, maybe those shares are now unlocked, and those investors are selling at any price, thus what is making stocks that gap up on positive news, make new lows and go red on the day, sometimes often making a new low right before market close. Something like that, isn’t short-biased traders pounding a stock down, it’s financers selling their unlocked shares all day long, taking easy profit off the table.

That’s not anything new if you have experience in the capital markets, or know anything about how these companies are financed. Debt, or worse, toxic debt is sometimes the only way for these companies to raise money and keep the lights on. Now of course, short sellers take advantage of the opportunity and take a small piece out for themselves, but from what I have been seeing, it hasn’t been easy for shorts either.

The market is crowded and every newbie trader wants to short, making many trades difficult. This also is making borrowing very hard for the more experienced traders. They are left with only the hardest and most expensive borrows, which makes their trades quite limited. It got so bad I have even seen short biased traders tell new people to go long! They want people off their playground.

It’s quite simple, if traders see stocks keep going up, like the shipping mania for example, everyone wants to go long. Then a trend-shift, traders see stocks giving back almost all their gains or more, they want to go short. For me, I stick to what I am good at. I go long, and the only difference in this kind of market is how long I go long for.

The reality is there’s a finite amount of borrows out there, and if enough people want to go short, there won’t be any supply. So what happens then?

The market usually corrects itself and punishes naïve traders via a short squeeze.

The market gives and it takes, but when it takes, you must hold on for dear life. In the screen shot below of my trading P&L for April, I make an analogy about walking into traffic. You don’t want to stay out there for too long or you will get killed.

That’s how April was as a long-biased trader. If you overstayed your welcome in a trade, you were killed. If you stepped out at the wrong time, you were killed. If you stepped out in front of the wrong trade even if you timed it right, you were killed, if you tried to make any bias about corporate news, you were killed. There was only 1 way to live, and if you figured it out soon enough, you might have done well. If you didn’t, you learned something about yourself and will become a better trader.

I am not sitting here all high and mighty, trading is a very difficult. Emotions are not easy to overcome, as they keep changing and becoming more complex as you evolve as a trader. The emotions you had when you started to trade are long gone and now suddenly, you have much more different emotions. It’s a constant struggle with ones self.

The reality is from 4/12 to 4/28 I was almost red every other day. Being up 4-figures, and then a small 3-figure profit. Then being up 4-figures again, and then up only 3-figures. Those 3 figure days I barely got out alive. I was probably even red on most of those days and somehow came back to green.

So what’s the end result? I still grossed $21K on the month, averaging about $1.1K per day for the month of April. A $21K month is $250k+ a year in just capital gains. I am cool with that; especially considering that I have other businesses that provide income! The most important thing I had to realize was, I really needed to not have a big red day, as I knew, if we never saw a good trade for the rest of the month, it would be hard to recover.

The strategy I trade is very similar to what Ross trades day to day and what he teaches in Warrior Pro course. Although Ross himself had somewhat of a difficult month, he also has additional pressure of being the head moderator who voluntarily reports his entire trade history daily. That’s a lot of stress that I don’t have. I don’t know any traders that do daily video recaps, showing their P&L like he does throughout the good and the bad, only to have people judge you. So you have to give a certain amount of respect for that, it’s not as easy as it seems to lead, trade and teach, all at the same time.

So that about wraps up what I wanted to say. Many traders can trade the same strategy and have wildly different results, and I think April is a good example of that.

Keep it up, and see you in chat.

Why Do I Want To Day Trade?

People often ask me, “Ross, what made you want to start trading”.  My path to becoming a full-time Day Trader was far from direct.  Although I’ve always had an interest in the stock market, growing up in Vermont and living in the country led me to believe a career on Wall Street would never be in the cards for me.  Through my years in school I decided to study fine art & environmental science by taking classes focused on environmentally sustainable architecture.

From Working In NYC To Day Trading

In my final years of college I began looking for an internship at a design firm.  I was hired at an interior architecture studio in Manhattan, first for a 3 month internship, then as a full-time employee.  During my time working there I managed construction budgets, filed our projects with the Department of Buildings, and assisted with design development and material sections.  Since I was working at small firm I was able to do a little bit of everything.  In those years I would work 12hr days and I was making less than $50k/year before taxes.  Eventually I got burned out of living in NYC and working such long hours.  I think there were probably dozens of people lined up after me to go work the same position in hopes of it being their foot in the door to something bigger.  It was a good resume builder, but I didn’t feel the upward potential was there to justify continuing to work there.

I Was Sick Of The 9-5 Grind

I had lost my passion for architecture.  I wanted more from life than working 12hrs/day on thankless tasks.  Once I realized I couldn’t do it another day, I put in my 2 weeks notice and moved back to Vermont.  This was before I even knew that Day Trading would be my future.  All I knew was that I couldn’t keep punching the clock.  In the first few weeks after quitting I felt such a huge weight lifted off my shoulders.  I told myself I was now going to take control of my future!  The only question was what would my future contain?  As I looked for work and began to realize prospects were slim, I stumbled back onto the idea of being a trader.  I decided specifically to research day trading.

Becoming A Full-Time Day Trader

With the boom in online day trading that started in the late 90’s, it was now common place for people to make a living trading the markets from the comfort of their own home.  After some preliminary research, my goal was to make $200/day as a day trader.  That income would fully replace my salary from working in NYC, could be achieved from the comfort of my own home, and ideally, would only require 2-3hrs of work/day.  This was the beginning of my journey that has lead to me where I am today.  Little did I know making $200/day is easier said than done!  In my first 18 months I made zero profit.  Through trial and error, I lost over $30,000.00 testing different strategies and I spent the majority of my life savings keeping myself afloat.  But I was hooked!  I knew the potential if I was able to succeed and I refused to quit.  Eventually I discovered a pattern in the market that led to the creation of my momentum trading strategy.  That strategy is now the basis of the Day Trading Courses we teach beginner traders every day.

Finding Your Passion

Having gone through years of grinding a 9-5, and years of struggling to learn how to trade, the biggest lesson I’ve learned is that you have to follow your heart!  You need to have a passion in life.  Once you find your passion, and for me it’s been day trading, you’ll become 100% dedicated to making it work.  Today I am living my dream life, and I’m teaching other beginner traders everything I did to be a success.  Our Warrior Pro trading course is designed to teach beginner traders the exact same strategies I use to trade the markets everyday.  Even though I’m back to working 12hrs/day, I enjoy every minute of it.  I wish everyone could have the same level of excitement I feel every morning when I wake up.  This is the joy of doing what you love & loving the life you live.