We talk about size management, emotional management and also timeframe when the market gets busier.
[00:00:00] I figure this is a good time to talk about market conditions changing. Volatility goes up, moves get bigger, and then people start to maybe not adjust and making or losing large amounts of money, getting wired up in the chest and feeling emotional, feeling anxious, tight, high strung, because you can't help but not become, you start becoming the way the market is.
[00:00:26] And you got to keep yourself calm and stick to your plan, which is very possible to do. But it's easy to just become the market and act like the market acts and feel that way inside. So a couple things. I've done a lot of podcasts on this in the past, but since a lot of people probably don't remember podcasts randomly from busy periods from years ago, you can go back and find them. But it's basically stay small, especially in the morning if you're trading during the day, and try to hit a few singles and doubles early in the day.
[00:00:56] Build your confidence up. And then what you'll find is that you accidentally get bigger just by your process at the right time when you need to, without even trying. And then you have bigger days. You don't need to try to jack your size. If anything, you cut your size down. You make way more money this way. Seems counterintuitive. It's kind of the magic of small size. Because there's so many opportunities in the day and there's so many like crazy headlines that you don't, that you can't see coming.
[00:01:20] That if you are able to stay small, you weather the storm, you start building singles and doubles. You're quick to get out because you're small. You're not worried about it. One move doesn't make or break your day. And then you build. And if you catch some really good stuff, great. A lot of times my best day is I start small. I start building in the morning. Take a break. Maybe have some, all of a sudden something sets up in the afternoon where I'm like, wow, this is a great idea. Everyone got screwed. I think it's going to go to the highs, whatever it is. And I end up trading a lot bigger.
[00:01:48] I get some small and I add to it when it pulls back. I add it to the highs and having a big time day. That'd be like the perfect setup. And it all happens because I'm small. But when I stay big in the morning, trying to force it, trying to make up for something, those hits that you take in the morning are devastating and you're basically done for the day. It could cost you a whole week of action, honest to God. So you have to keep that in mind when it's busy. Go down, put your ego away. Don't worry about it.
[00:02:16] Go back up when you just magically go up. Everyone's like, well, when do I go up? Don't even ask the question. Just do what you got to do. Like trade the market. Try not to trade the emotion. And if you do that, forgive the cars here. Give me a sec. If you do that, it'll take care of itself. Just don't worry about it. Cut down and don't worry about it.
[00:02:43] And the other thing is know your size and your time frame. And it's kind of the same, but maybe a different topic. But it's on my mind right now because I've been going through it. You really have to discern, is this a trade for... Okay, before I get into it, if you're short-term trading during the day, I'm going to talk about my position in swing trades now. It's the same thing, though. Because you can have a long-term day trade for three, four hours, or a short one for 30 minutes, or two minutes, whatever you want.
[00:03:12] So it's the same thing for me. So I have to make sure that when I'm in a trade, I know the size and the time frame ahead of time for the trade, or else it's a disaster. Because if I'm trading really big, and I love a theme or something, but the time frame is like six months, well, I'm too big. I can't sit through the pullbacks. It's not going to work. Or I'm going to blow out of my stop right away. So that trade needs to go maybe in a different account, or needs to be earmarked for like, okay, let's put the size on where I can sit through the noise. And this is a six-month trade. I think it's going to double.
[00:03:43] And I'm risking, you know, whatever, 15%. I'm trading really big. I want it to work right away. Sometimes they're the same trade. I'm really big. I take some off because I love it. And then I sit with the rest of it for six months. That's an extreme example. But same thing during the day. You can't just be shooting your same size for all time frames that you're doing. And you might just trade one time frame. It's easier. Sometimes I'm moving around a little bit with my time frames. I've been trading a long time. So I have different strategies and things. But I've actually had to have a separate account.
[00:04:12] And that's worked very well for me to trade like one-fourth, one-fifth, one-third, maybe half, usually smaller than half the size. And that's for three, four times longer holding period to sit through the noise. And those trades, I'm like, I got to make at least two, three times my money to have that be worth it. But I sit through the noise. China trades right now are those trades for me. Emerging market trades, some commodities, things that I think are going to move a lot
[00:04:40] over the next maybe six to 24 months that I have good spots in. And then in the short term, they might be there too, but it's different. And there's other stuff that's just singles and doubles. Same thing with your short-term trading. Super important stuff. This has nothing to do with how you trade. I mean, I never talk about how you trade. You guys will laugh. I'm always thinking about like talking about all these things I'm going to do. And I do do things, but I have to feel it out.
[00:05:08] I don't really know if this is going to be something I stick with. I know I'm going to stick with the podcast because I've been doing it for years and I enjoy it. But the mentorship podcast, Brent might actually take that over for me. He's so good at it too. So he might take that over and start posting those on here. And then, because he helps people. He coaches traders too. He's really, he's always been, he's helped me before. He's been so good at it. So he might do that. And then for me, I'm thinking about a sub stack letter that I would do a free one first.
[00:05:38] Then I would, it would be a charge letter where I would share all the things I'm using AI for every week, every, every probably once a week or every two weeks. And then how you can use it and things I'm programming. And then I've developed a really cool tool to track price action. I could share that. I think people would love that. And then none of this is like, hey Brad, have some magic strategy. There is no such thing, right? It's, there's no such thing. It's more of like, how do you think? Like, what do you look at? How are you adapting? What trades do you like for the week ahead or the month ahead that you're waiting for?
[00:06:08] Like I would have all that stuff on there. So that'd be the value. And it would just be, a lot of times people are busy. They don't have time to look at AI for two hours a day like I do because this is all I'm doing. So I have a lot of things I do that I don't share with anybody except for friends that I talk to that I think are pretty valuable to people. So I'm thinking about putting that out. Hey, ready, no, but with the AI tools, I can probably talk and transcribe and put something nice together. Just got to keep track of everything I do. So that's,
[00:06:37] that's potentially a thing I'm looking at. I have a big interview coming out too. Some guy asked me to be on his podcast. Words of Rizdom. R-I-Z-D-O-M. So I did that. I'm not out yet. I'm going to be out probably next. I don't even know when he puts him out. Month, two months. No idea. So I got on that. He asked me to be on that when he toured the U.S. So that was kind of cool. Got a lot of cool guests on there.
[00:07:06] A lot of other really good interviews on there if you ever look at that. I'll let you guys know when I'm actually on it or I'll post the link or something. Twitter. I think that's about all I have to say today. But really important points about the volatility and about the timeframe and about the size that you use. And they're all just such important points. So many people that aren't even like only traders like me who have jobs and trade on the side, like part-time traders,
[00:07:34] which I think you can be very successful if not more successful doing if you have your stuff lined up that you want to do. Because you don't get distracted and do stupid stuff because you only have a little bit of time. It could be very effective. But especially with those people, it's the same thing. It's like the timeframe and the sizing and the holding period. And a lot of people struggle, I think in that arena, struggle with like somebody gave me a tip. My buddy is really smart and he's always winning in stocks and he gives me a tip so I buy it. And then all of a sudden it goes down 20%.
[00:08:05] I get killed. And he tells me, oh yeah, man, I got out. I cut my losses. It wasn't acting right. And you're like, well, great. I just lost all my money. And how do you handle that? Well, everyone struggles with that because there's always somebody you think is smart and you see them. That's just part of being around. And you could say, I never listen to anybody but myself. But reality is I've had a lot of great trades from other people's ideas. You have to learn to make it your own. You have to have a risk management system that you do. So if someone tells me that it's really good, that they like a stock,
[00:08:34] I'm going to look at it and say, okay, it checks a lot of the boxes of something I would buy. I like the chart. I like its nice, tight, narrow bars. It's a good entry. I like the fundamental setup for the things I look at. I like the theme. I'm going to do this trade. And if it doesn't work out, maybe I do options. Or if I do the stock, I'm like, it shouldn't trade below this price. I'm going to do this size. And this is how long I'm going to hold it. That's how I approach it. It doesn't work. I got it. So I don't care what he says anymore because I've taken the idea. I've made it my own. And I have a plan. You have to do that. If you don't do that, it's not going to work
[00:09:04] because he tells you when to get in and he's not going to tell you when to get out. Only you can. I wish I could just bury this in everyone's brain and never have him forget it because it's so painful. And it's amazing how these things get you at the worst time when you're not expecting it. So especially when you're like feeling a little shaky and someone else gives you an idea and you want to cling on to something, especially if you have one that works. And all of a sudden the next one, you don't have a plan to get out. And you do it bigger and you get crushed.
[00:09:32] So I've, of course, made all these mistakes five, ten times over again in every possible angle from doing this for, you know, my whole life basically. And I just hope other people can not do it. That's basically it. It's hard to listen to somebody else though and not make the mistake yourself. But if you can do it, power to you.