Mentorship Podcast #2

[00:00:00] Okay, this is the Mentorship Podcast. This is the second episode now. And I'm on here with Brent and we have Leo on here. And I'm going to run down through his general situation. And then if he wants to add something to fill in some gaps, we can do that. And then Brent and I will go at it and we'll see what we can come up with.

[00:00:16] So he is, he's utilizing some prop accounts and for funding. He's been trading for about two years. He's working a job during the day and then he's trading or he's working a night job and trading during the day hours. That's kind of his setup right now, which I think a lot of people can relate to that.

[00:00:34] But he's just a broad like setup of his situation is in the morning, he's looking at the market, he has an idea where it might go. And then he's looking for a reversal when it goes in the opposite direction. And oftentimes he finds that those trades occur more on days where there's something going on like a news release or an event or something like that. So he has a clear setup when he's trading well for how that might work.

[00:00:59] And some of the things that are getting him into trouble would be having consistency for a few weeks, taking some wins, and then all of a sudden getting eager to trade. None of us have that problem, right? Nobody is immune to that. Yeah. So he starts seeing some success. He's doing kind of what he wants to do. And then all of a sudden, like my mentor used to tell me, you think you can trade every price when you start doing well. And I'm not saying he's doing that, but that's something that I struggle with.

[00:01:26] And it seems like when we're doing well, then we start doing something else. And he talks about that impulsiveness he has, it starts to take over. And then all of a sudden, he's broken his daily loss limit. And then it's one of those days where you have a blow up or a bad day, and you kind of mess everything up. And it just seems to over time that that sort of boom and bust process starts to repeat itself.

[00:01:51] So there's a few things that we're going to talk about. I'll let Brent start first, because he kind of sees a lot of patterns in people that are similar to this. And I know I've gone through them. But Brent, why don't you start with what you think? Sure. Before you go, Leo, is there anything you want to add that I missed that you think you need to add? No, I think that was pretty accurate. Yeah, just a quick summary of my strategy.

[00:02:18] So on the New York Open 930, what I'm looking for before that is any relatively equal lows, smooth edges, basically, or highs, depending on whether I'm bearish or bullish. And then what I'm looking for, literally that first 15 to 25-minute range, what it'll normally do. If we're bearish, it'll take a high and then show an opportunity to reverse. And then that'll be likely to move to the boss 11am.

[00:02:48] And then the same goes for the bullish. It'll take a low and then show a reversal, which then I'll get a hold till about 11am normally. But yeah, that's about it. That's great. And one thing I want to note to everybody who's listening and whatever is that Brad and I are very reluctant to tell anybody how to trade because trading is a very personal thing. And everybody's different and everybody has to find their own way. And there's no one right way to do everything.

[00:03:18] What we can do is help with how you're approaching it. And so one of the things that I noticed that you said is that you're having, A, the issue with the over-trading. When you go on, maybe you've had a good trade. And the feelings that you get when you have that good trade bleed into making you think like, well, yeah, my rules, I don't need them. I'm really good at this. Yeah. And that's a trap that so many people fall into.

[00:03:46] So what I would suggest is that you have a system that you have rules that guide what you're doing. Right? Yeah. And so if you have those written down, you can write those down and review them every morning as part of your morning routine.

[00:04:06] And then if you make it your goal each day not to make money but to follow your rules and say, did I follow all of these rules and did I stick to what I said I was going to do? And really think about that as you're approaching whatever trade it is that you're about to get in. You can end the day with a win. And it may not be a monetary win, but winning that battle of like, I want to only follow my rules and be disciplined.

[00:04:35] And that first step is writing those down and making sure you are fully aware and embrace what your rules are. Does that make sense? Yeah. Yeah. That makes perfect sense. And I was just thinking about that before is that especially with these prop firm challenges, I'm sure you're aware of them. What's kind of happened to me, especially the past two years, like is that I've went from a lane to trade.

[00:05:04] But now all I'm focusing on is actually passing them accounts and earning money. So whereas, as you said, I'm not actually treating it like follow the rules or the strategy. I'm just trying to get there as soon as possible. I feel like that's what happens to me. Yeah. And I don't think that that's uncommon. I think that that's a pretty, pretty common thing. But I think if you change what your idea of what a winning day looks like. Yeah.

[00:05:32] And change it from like the money to the discipline to like the, did I do everything right? And then you feel good because if you lose money and you did all your, and you followed your rules, well, that's just some trades lose, you know, not every trade's a winner, but you'll feel better about yourself and it will help you stay more disciplined. Yeah. Yeah.

[00:05:57] I, um, I agree with that, but the problem is there is that, yeah, I, I agree. Like I, I'm also aware of that, but what will happen is I will do that. I'll take losses. I'll be completely fine. But then just one day, one day I'll either take a loss or take a win. Um, that's not a me strategy. And for some reason, I think it comes down to the ADHD as well. Hyper focus.

[00:06:25] I become, it's like, I become one, like with the screen and I just can't stop. Like it's crazy feeling. Of course. And so what have you done to try to in the past, what have you done to try to, to stop that or to minimize that? Have you tried any, what strategies have you already tried? Um, so I've, I have tried like to, to like meditation.

[00:06:55] Um, me, me daily life is very disciplined. I wake up, go to the gym, like eat clean foods all the time. I'm spot on with that. It's just, I feel like in that sort of thing, um, I'm doing well, but it just doesn't reflect in trading too much, but one thing I just wanted to touch on it. I don't think I, I, um, talk to you about it, but when I actually first got told about

[00:07:21] trading, it was from a guy who like didn't know what he was talking about, but he, he scalped the US 30 and I, I think I opened an account for about literally about $300 and maybe, and he'd teach me, but it wouldn't be teaching me anything. And I'd, I'd go through three sessions and I'd be on the chart for about three hours, just clicking buy and sell.

[00:07:49] And I'd look at the time and think like, what the fuck? Like, sorry, I don't know if I'm meant to swear, but, um, I'd be like, I'd actually think it was 15 minutes have gone by and it had to be three hours and it took about 200 trades. Like that's, that's how I first found out about trading. And I feel like that's created a sort of habit in me. Yes. And obviously I'm driving to that adrenaline, adrenaline rush. Do you know what I mean? Sure.

[00:08:18] I mean, that's the biggest attraction for trading is that it does give you an adrenaline rush. Yeah. Even, even just trading with fake money, I can, I can still feel the adrenaline rush if you get what I mean? Sure. Yeah. Um, you are not alone on this. This is something that we all go through. Brent and I talk about this all the time. It's been so a quick shared story for me. And I think Brent has a little bit of this too.

[00:08:46] I've been trading more, uh, swing and position trades, uh, in the stock market lately. And, but my whole career, there's a lot of success on short-term trading and sometimes, you know, 20, 30, 40 trades a day back in the day I used to do and have a lot of the same experiences you had. And that behavioral conditioning and being rewarded for that is so strong. Um, but that was, and now I have, I'm trying to do things a little differently now. And I, oftentimes what I'll do is my new strategy is working great and I'll go and sabotage myself

[00:09:15] doing my old stuff because it's so, it's so it gets busy and I'm in there and I got to do trades. And I had a recent podcast kind of about, um, Nvidia, how I did that and old habits die hard. That's, and so it's like, well, what do you do? I think some of the things that have been helpful are for me, um, I've been working on a lot of programming projects with GPT and a Claude and AI during the day. And I've been, um, Brent and I used to watch TV series and laugh our asses off when the market

[00:09:43] was slow and just watch like whatever we wanted with headphones. And then we would know the levels that we were interested in. We would trade when they would get violated and something would happen. And a lot of the other guys in the office where I always tell the story, it would be just banging around trading all day, stressed out. And of course you, you, you do this long enough. You've been on both sides of that, but it's, it's learning to really zoom out a little bit and say, what do I want out of my life? Like I want to eat clean. I want to work out. I want to be really detailed.

[00:10:11] Not, you're not going to be perfect, but you have to fully embrace this ADHD and this impulsiveness needs to be embraced and loved because it's one of your best possible qualities for being good at trading. But the downside of it is like, you know, you're in a zone and you're doing all these trades and that's kind of how you started a little bit. And you have to be able to say, okay, well, if, if I do what Brent says and I write down my rules and I have some projects that are maybe productive distractions and I'm waiting

[00:10:37] for those days where there's numbers, you can start to like separate how you want to be in the market versus where your strengths and weaknesses of your personality are and start living that way. And it's, it's just like, you're going to slip and screw up sometimes. And you have to just be like, it's okay. I screwed up today. And you keep, you just keep working towards that vision of what you want to be. And it's not a switch to flip and all of a sudden it's gone. It's just a process of slowly working that way. That's the best way I would, because I'm going through that in a way too right now. Yeah.

[00:11:07] Yeah. Yeah. That's, that's great to be fair. Um, just lost me train of thought, but I was about to say something. Um, but yeah, so what, what I think you, that's great that you have, or you've had, especially because you, you've worked in a trading environment with other people. And I feel like a problem for me is I don't, I don't have anyone, do you know what I mean?

[00:11:32] So it's, it's very easy to just get, get trapped in just you and the market and not getting away from it. Like, um, say I wake up at eight o'clock in the morning. I don't trade till about half two, um, 2.30 PM. So I'm anticipating that day to do everything right. And it then puts more added pressure on me. Do you know what I mean? Yep.

[00:12:01] So I'm going to just revert back to what we're talking about. I, I understand, I totally understand that pressure feeling that, that immense weight of like, I have to perform today. Yeah. And I would, I would love it if you could just try to change the, uh, the trajectory of what that, what that actually means. And instead of being like, I'm going to come out of here, I'm going to make, you know, X amount of dollars and then that proves that I'm, I'm good because if you make, because

[00:12:29] what you can sometimes do is, is use that as your benchmark to what means a successful day. And then if you do a, you know, a gamble style trade where you're like, well, this is that not side of my rules, but I see something. And then you make money on that. You leave the day with this false sense of security that like, yeah, I made money. So I hit my goal when you actually kind of failed on the day because you didn't follow your rules. And then the next time that happens, you think, well, I can get away with this because I did it that one other time.

[00:12:59] That's what happens. Yeah. Yeah. Right. And so if you can really just change it to where like your goal is just to follow your rules and really, and really dial in on that, I think you'll feel better about yourself and you'll be surprised at how quickly your profits start to add up because you're just following your rules and you're feeling confident in yourself and your ability to actually make the decisions. Yeah. Yeah.

[00:13:25] So an example is, say if I backtest on a simulation and I just focus on the 15 minute timeframe and I will set a buy limit or a sell limit pre-market and just let that play out, most of the time I'm making risking about 0.5% per trade. I end up making about 20% plus per year.

[00:13:54] And that's just from no micromanaging, just letting it play out and not touching it at all. Whereas when I actually trade, I'll be watching the market open and then I'll drop to the one minute and I'll think, yeah, it's drawing to there or this is my target for the day. And I'll instantly try and get in a trade to not get missed out basically.

[00:14:21] And then what will happen, I'll get stopped, tight stop, and then it'll drop into a low and then go to my target ultimately. So do you think that possibly changing timeframes, staying away from the one minute because especially at market open, it looks like a lot's happening when it actually isn't? Yeah. Yeah. So there's a lot of people who trade that opening range.

[00:14:51] It's an open range trade. I don't trade it, but I'm sure you've seen it online or talked about. So there's a lot of activity going in and positioning. And yes, you're right. It's noisy and usually nothing's going on. Yeah. And so, yeah, it might make a difference for you to change the timeframe that you're looking at. But I would say sticking to what you're, if you already have a set of rules that you're following, then I wouldn't change them too much.

[00:15:18] But if that will help keep you disciplined and not jumping in and like getting caught up in the noise that you see, then yeah, I would say that's probably a good idea. Yeah. So my rules are pretty the same whether I'm on the 15 minute timeframe or not. I'm framing my trade always on that 15 minute timeframe. It's just when I'll drop to the one minute to refine an entry, possibly get a better risk to reward.

[00:15:45] But from backtesting, I have actually realized that I am, I am a lot of the time better to just set me limits and then go away or set me limits. Just watch it. Once I see Price really come in me advantage, go to break even. Because likely, once it's left my entry, I normally win the trade.

[00:16:14] But yeah, so that's something I've been thinking about for probably over a year. But I just keep going back to the one minute every time, really. So when you say when you move the timeframe, it doesn't necessarily change your entry price? No. It changes my entry price, but it's just me getting in not perfect, which I'm happy with

[00:16:43] because I have good invalidation points. It's my stop loss. Most of the time, if my stop loss gets hit, the entire narrative is wrong and it'll go the opposite direction, which is fine. I'm happy to do that. Sure. When I'm actually trading, my narrative will be right, say 60-70% of the time, but my results won't reflect that, if you get what I mean. Yes.

[00:17:14] I don't personally like to trade the first half hour of the day, but I know some people love it. I would never tell somebody to do it or not do it, but I've found that I like to watch the bodies pile up and just kind of wait a little bit before I get in there. But that's personal preference. I mean, that might be something to tinker with. Yeah. Go ahead. Go on. Go on. Go on.

[00:18:08] Staying conscious within my trading session and making actual conscious decisions and taking my losses and taking my wins. That's literally all I need to do. Just focus on even just one trade a day or two trade ideas and just stick to that. That's what I need to do, really. But yeah, the pre-trade routine. I definitely need to implement that.

[00:18:37] I think it should be useful. Yeah. And I think that that's good. And I think that doing your best to try to avoid getting caught up in the noise of the market and making those impulse trades. It's it's you're never fully going to get it out of your system, but eventually you can really minimize it.

[00:19:01] And one other strategy that that I use and that I've given to given this advice to other people is that like if you do make one of those impulse trades, whether it works out or it doesn't work out like that's time for you put yourself on a timeout, say, I need to go take a walk, you know, step back from my screen and force yourself to take that 10 to 15 minute break because it will mentally reset you and will not allow.

[00:19:28] It will change your perspective where you might normally have the like I need to get back in there and make that money back. And now I see what's going on. And it changes that. And you're like, OK, I see what I did. I kind of screwed up. Now I'm going to go back to following my rules. But it takes some it takes some willpower to step away from your screen right after you do. Yeah. Yeah. And I'll add to that that willpower is a is a thing that depletes quickly. So if you're having to rely on willpower all day, you're going to eventually lose.

[00:19:56] It's like an overweight person puts a bag of chips in front of them. They're going to lose. But what he's saying is so smart because there's a lot of research and, you know, because you look in the meditation things about just pausing, taking 10 deep breaths and that that hijack in your brain kind of gets put on alert to chill out, slow down. And then you can go back and you can be conscious, as you said, which is a really good word to use for all this. And breaking using your willpower to interrupt the cycle that way is probably the best possible

[00:20:24] use of your willpower that you could do, because if you can learn to do that, then you're going to feel so good. You're like, I got my workout in. I ate my, you know, my clean food. I waited for my strategy. I put my stuff in that I wanted to do and I didn't interrupt it. I stopped myself when I did something impulsive and that's a good day. And if you just keep like, think about doing that a thousand times, if a thousand times, that's how you act, then the success starts to follow you. Yeah. Yeah. I get what you mean totally. Just one question.

[00:20:54] Why do you think that we take trades that we know about for us? Because normally we form habits to have some type of reward for us. So do you think it's down to the dopamine hits? Oh, definitely. Yeah. I mean, if you want, if you want it to be the, the markets can be just like a casino and why do people, you know, play slot machines or blackjack or whatever? Because it's kind of fun, right? Yeah.

[00:21:24] Yeah. It's kind of fun to take a chance or bet on sports or play the lottery. Well, it's kind of fun because you don't know if you're going to win, but like that dopamine rush that, uh, that you can get whether you win or lose is still there. And so that's, that's why we do it sometimes because you're bored. Yeah. And I think that I'll give you an example from my life that I've figured out is I do a lot of eating at night and I'm not even hungry. And I'm like, why the hell am I eating at night?

[00:21:51] Like, and I'm, you know, I'm in good shape and I work out and I eat clean like you guys do. And it's like, I'm eating all this shit at night and my wife helped me figure it out. And I think she's right on the money. It's a pleasure seeking mechanism for somebody who drives and works hard all day is always being disciplined, like following the rules and never really setting a time. A lot of, a lot of time aside for themselves to just enjoy and not do that. And what do you do? You start eating because it's a way that you can kind of find pleasure in something.

[00:22:20] And it's an outlet, probably an unhealthy one. There's worse ones, you know, you can have a drug habit or something, but you find ways to like act out that stuff. And sometimes the market can be something similar and it's just figuring out ways to replace that with other productive habits. Yeah. Yeah. I agree. Because to be fair, this, like trading could be an outlet for me because like the past two years I've rarely locked in on everything. I don't, don't drink.

[00:22:49] I haven't, I haven't drank for two years. I haven't smoked. Um, like I've basically, as you said, being very disciplined in every area of life. And then this could be a sort like something that I'm just like, as you said, like just using it as a pleasure seeking environment. Leo, is your goal from trading? Is this to make, it's to make it a career, right? Yeah.

[00:23:18] Um, uh, in the UK, I'm like, I've like had the luck for trading jobs, stuff like that, but I'm not too sure how I could possibly go into a career like job wise, but personal accounts, um, as I said, use utilizing prop firms. Yeah. It's to create a career out of it. Yeah. And so if you think about, think about it, like this is my career and this isn't just

[00:23:43] for fun, like, and you take it with the same seriousness that you were, if you were doing another career and you, you put it in those terms and think about like, if you were an accountant or something and you kept fucking up like the audit that you're doing just because you got sloppy, like you'd be fired. So if you can approach it with the same, like, like rigor and discipline that you would approach any other career, there's no question that you will have success in this, but it's,

[00:24:12] you have to, and that's the, you, you touched on this a little bit ago, like the, the gray line between is it gambling or is it, you know, a career, right? And so you really have to make that distinction to yourself. Am I treating this like a career or I'm treating this like it's gambling? Yeah. So like every, everybody, well, a majority of people come into trading just like me

[00:24:39] because the, like the thought of having control over their, um, making their own money, not getting told what to do. But then as you've just said, it, it's, uh, yeah, it's a great thing to want to do. But again, you have to, you have to make rules and you have to stick to them. So you need to treat it like a job. Yeah. And it's, it's a lonely job. It's yeah. And it's so hard.

[00:25:06] I mean, it's exciting because you hear the stories of the people who, you know, posting their stuff on Twitter or whatever, or X or whatever it's called now. And you're seeing like, man, see, it's that easy. I can just make a million dollars and it's super fast and like, great. But that's not reality. That's not the truth. The truth is, is that like to be successful at this, you have to be disciplined. You have to treat it like a job and, you know, stay with the same discipline that you would any other job.

[00:25:36] And then it's a long road. And sometimes it's usually really hard. And sometimes it's easy. If you stick around, there's little pockets where you feel like it's easy, but you never get to those pockets. If you haven't put in laid the groundwork and people on social media don't, no one talks about people talk about the upside. They don't talk about the downsides and the, what goes into the person behind the scenes that's developed themselves to do this for, it's like any other pursuing an Olympic sport. I mean, it's, that's what it is.

[00:26:03] So it's, yeah, I think that unless you guys have more to add, I feel like we hit some really good points on this. Do you feel pretty satisfied with it? Yeah, I feel, I feel good. Leo, how about you? Leo. Yeah, no, I think you've covered some strong points that I definitely, definitely I'm going to implement. But yeah, it's been, it's been good. Great.

[00:26:31] I'm going to wrap it up here and keep them under 30 minutes for everybody. And I, thanks guys for coming on. Thanks, Leo. Hopefully everybody enjoys this. Yeah. Really nice meeting you, Leo. Yeah. You too. And you, Brad. Thank you. Nice to meet you too. Bye. Bye.