Clay Trader Podcast

STR 243: Admitting Defeat to Accomplishing Victory

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Via Clay Trader

If you want the maximum value out of this episode, I’d highly recommend you go back and listen to episode 242 first. I wish I could say I had this all pre-planned, but I’m just not that good at my job! I welcome back long time member Jeremy (better known as “Remy” in community) for his 3rd appearance on the show. Jeremy has been crushing it lately and walks me through all the things he needed to admit to himself before making the change to his new and much improved strategy. It’s never easy to admit defeat, but after Jeremey did he was able to expand and explore into various strategies that fit his needs. If you’re looking for a deep dive into the details of taking a broad strategy and then shaping and modeling it into your own personal risk tolerance, then you’ll love our discussion. Let’s get into it. Ready for details? Let’s go!


Clay: This is The Stock Trading Reality Podcast, episode 243.
Announcer: This is The Stock Trading Reality Podcast, where you get to see the realistic of a trader’s journey. Get inspired and stay motivated by everyday, normal people who are currently on their journey to trading success. This is your host, if you want an adrenaline rush, he believes you should help someone with their health, ClayTrader.
Clay: Now, don’t get me wrong, I absolutely love doing a podcast. I love helping people out with their trading and with just kind of money management in general, taking control of their finances, building their wealth, creating streams of income. All that stuff is great, but ever since I started the Maintain The Gains Program that I offer and seeing people take their bodies and their literal health and transform themselves into a much healthier way, that’s a certain type of rush that it really feels good because helping people with their money, that’s good. That’s a very beneficial… that’s a very necessary skill, but at the end of the day, if you have some sort of billionaire who’s laying in his bed because he’s been so unhealthy, what actually is the value of that money?
Clay: Sure, that money can maybe be used to keep themselves alive for a little while longer because they can get all sorts of great medical treatment, but I wonder if you’d have asked that person, the billionaire, “What would you rather have right now? All that money or have your health where you can be out, maybe not having as much money, but you have the ability to go out and enjoy your money?” I fel like that person would have probably answered, “You know what? I really wish I had my health right now.” That’s why health really is important. I think health is the most valuable commodity, the valuable currency out there because, again, you can have all of the money in the world, but if you are unhealthy and not able to enjoy any of it or enjoy very little of it, there’s a bit disconnect there for me.
Clay: I guess I’ll turn this into a little plug right now. If you are somebody that’s maybe watched my YouTube videos and you noticed way back for those early videos I looked quite a bit different because, yes, I did let myself go a little bit on the health end and from a training perspective… This is where it becomes practical. Of course, you want to be in good health just for life in general, but from a trading perspective, when I was unhealthy and, again, like I said, you can go back to those early YouTube videos and you’ll… I like to call it my wrecking ball days where I was like a perfect sphere, but my trading, just life in general, my productivity, things just slow down. Your mind gets foggy. You just feel sluggish, and it’s just not goo, but now I’ve really turned things around.
Clay: That’s the one unique thing about my journey is you can literally track it through the trail of YouTube videos that I’ve been doing over the past, I don’t know, what, about five years now? I can say that I look a lot different and I feel a whole lot different. My mind is clear. I’m a beast. When I want to be a beast, I’ll get out there, I’ll get stuff done, and I can because my mind is firing all cylinders, my body is healthy, and it does make a big difference.
Clay: What I’ve done because people have asked me over and over again, “Hey, Clay, I noticed on your YouTube videos you’ve changed quite a bit. What did you do? What did you do?” I ultimately put together pretty much I call it an online boot camp, but I walk you through the exact process that I used to go from my wrecking ball days to where I am right now, and you can find that at,, and you can learn more about that there. I didn’t really plan on that to turn into a plug, but it did anyways and I’m fully confident in it.
Clay: This is one of those things where when it comes to trading people are going to be like, “Well, that’s not real”, so you show them like a picture. “Well, no, that picture is photoshopped.” Then you show them like something more. “No, no, no. That’s photoshopped.” Then, you show them tax records. “No, those aren’t real tax records.” Then, you show them audited tax records. “No, no, no, you paid off the accountant.” Some people, they’re just never going to be convinced of numbers, but when it comes to health, unless I’m using like special effects throughout the course of YouTube, which I’m not, that would be pretty cool, though.
Clay: It’s really easy to say, “Well, prove to me your process works. Prove to me your strategy works.” I say, “Well, okay. Watch this video from four years ago and now watch the videos from now and you’ll see the difference.” It works, so if you’re curious, there you go again, Now, for our guest today, great stuff. I wish I could say I was this smart to say that I had it planned perfectly right after last week’s episode with Ben, but a good follow-through in terms of Ben. We are talking with Jeremy now, and Ben, if you remember last week, we talked about, “Just let the price come to you. Let the price come to you.” Jeremy is somebody that really is doing and showing just the benefits of letting the price come to him, being very picky about his entry points and things are, as you’re about to see, are working out very well.
Clay: This is Jeremy’s third time back now on the show. He’s been around the community for years now. Great guy. I’ve hung out with him in Denver. Talk about that a little bit, but he’s one of these people where… I’ll just put it this way. We send the mikes to people so that the sound quality can remain as good as possible and then we just say, “Hey, just keep the mike.” We told Jeremy that and he’s like, “Well, how much do I owe you?” It’s like, “No, just keep the mike. You don’t owe us anything.” That’s just kind of the person he is. He’s a good, quality individual and he’s a great guy.
Clay: It’s great to see him now having success, but in a nutshell, and I won’t offer up any spoilers, it’s one of these situations where Jeremy was working on something and he had to admit to himself it wasn’t working. Then, we really drive home and go through all the nitty gritty details of what was that process looking like from admitting to yourself your strategy is not working to them getting yourself to a spot where something is working and it’s working very, very well, as you’re about to see. Let’s get to Jeremy and hear about and get an update on him and his journey.
Clay: Jeremy, welcome back to the show.
Jeremy: Thank you very much, Clay. Good to hear from you.
Clay: Now, this is your third appearance if my memory serves me right?
Jeremy: Yeah, the third. Yeah, it’s been actually a couple of years now since these started [crosstalk 00:06:23]-
Clay: Has it been a couple years since… Oh, since you started. Do you have any idea when the last time you were on? That was like right around probably a little over a year ago? Or has that been two years, too?
Jeremy: I was trying to look back and I think it may definitely be over a year for sure, but the first one we did I think it was like episode 39 or something like that.
Clay: Oh yeah. No, no, you’re one of those almost foundational-type podcast guests where you had the guts to come on here when… I mean, I guess we still don’t really know what we’re doing. We’re kind of just making it up as we go, but way back then, we definitely had no idea what was really going on in those first kind of 50 episodes or so. Well, I’m glad to have you back, and last week, well, I guess as far a listener is concerned, last week I had Ben on and I told the story then. I’m going to just remind you of it in case you forgot, but Ben was… I told this story last week about the Topgolf in Denver and that story last week. I said, “There was this other guy, Jeremy, who was a good golfer and pretty competitive guy”, and you are that Jeremy, right? That [crosstalk 00:07:31]-
Jeremy: That’s true [crosstalk 00:07:31]-
Clay: If I remember right, I also spanked you, so you and Ben got a spanking at my hands. Are you that Jeremy? I just want to make sure.
Jeremy: Like, not all of us can shake a shot and get a hundred points every time.
Clay: As I did last week [crosstalk 00:07:48]-
Jeremy: No, you were smashing it. You were [crosstalk 00:07:49]-
Clay: But as I did [crosstalk 00:07:50]-
Jeremy: Smashing it [crosstalk 00:07:50]-
Clay: Last week, that was… all the credit goes to Robin because she gave me those private lessons. You saw Robin swing and she had just a beautiful stroke every time, but-
Jeremy: Yeah, she was phenomenal. I’d like to play actually around to see how she’d do because she was striking the ball really well.
Clay: Yeah, yeah, but that was a good time and like I said last week, it was all in good fun. It’s not like me, Ben, and Jeremy were throwing food at each other or throwing haymakers at one another. All the trash talk was definitely in good fun, but that was my one money of glory, so I always make sure… I’m definitely not going to let either Ben or Jeremy forget about it now that I’m talking to him.
Clay: Well, Jeremy, I’m very excited to get you back on. You sent me an email a few weeks ago and I know a lot has changed since the last time you were on. We’ll just call it like a little over a year ago, but I guess I’ll kind of let you… What have you been up to? Or maybe what have you tried? Let me ask this, because I do remember talking with you at Topgolf in Denver and you were talking about the… I don’t know if it has a name, but basically if something gaps up or gaps down and then you have to locate the nearest support or resistance, does that all ring a bell?
Jeremy: Yeah, absolutely.
Clay: Are you [crosstalk 00:09:08]-
Jeremy: That was [crosstalk 00:09:08]-
Clay: Still doing that? Or is that something that you kind of do once in a while? Or, I guess, where does that fit into things right now? That’s kind of I think a good at least launching-off point. I guess, why don’t you walk listeners through what you were telling me, what you were trying to do and just kind of [crosstalk 00:09:21]-
Jeremy: Yeah.
Clay: Pick it up from there?
Jeremy: Well, I kind of took a 180 degree turn from that, but I did start out… I had an all-cash account, small account, and I decided that some of the techniques that I was using with the small account, I was trading with options primarily because that’s what you can afford when it comes down to it and total costs. I was trying to find ways and strategies where I could see consistency and my… I always would get in trouble in the last three years of not staying disciplined in my stop losses and mitigating my risks. I just found, “Okay, what type of personality am I?” I’m one that always has to win, as you seen in Topgolf, and I wanted to find a strategy where I would see more consistent wins, although the risks may be a little bit higher. I think that my ego would help me with my discipline and my patience.
Jeremy: There was one strategy that I was trying and I said, “You know what? Let’s see. If I change my account to a margin account, I can leverage that margin and now I can do some spreads and do a little bit of long-term swing trading.” I think that’s where I was discussing with you about these what they call a gap and go or a retest-type gap. I kind of explained to you as in there are some certain patterns that you can see here and it’s all based on kind of the buying pattern of some of the traders out there. I tried it for a while and, again, I started to get burned every now and then not staying disciplined in where I felt was a good RvR for it.
Jeremy: This year, I kind of did a lot of practice and I laid out, “All right, I see the charts. I understand what’s going on. What makes sense to me?” I started doing a lot more of rubber band trading, and for those of you that knows, and Clay talks about it a lot, but these rubber band trades are very similar process to how you trade in your YouTube demonstrations of your live trading. You’re a little bit more aggressive than I am, but I’m using options and I’m day trading. Day trading, as you know, I just have to follow the day trading pattern rule, but what’s really funny is that pattern rule has helped me basically not overtrade. I have been really waiting for the right setups and the right opportunities, and then I am executing my trades. Right now, I don’t want to… I think you and I have been going kind of back and forth on this. I don’t want to… What’s the word I’m looking for?
Clay: Jinx?
Jeremy: I don’t want to mess up… Yeah, jinx, thank you. That’s it. I don’t want to jinx it, but I’m kind of batting I think 21-for-21 right now on trades these last two and a half months. I think it’s because I’ve used my education, number one. Number two, I found a strategy that works for my personality and it allows me to have the right RvR and the right understanding that my loss, if I do take a loss, it may be a little bit greater than what I want, but I know what I need to do and I’m going to have a lot of wins. The wins have been actually exceeding my risks that I would put on a trade time over time in these last 21 trades or so.
Jeremy: I can explain to you a little bit of what that looks like in detail, but that’s kind of what I’ve been going after right now, and it’s been very successful for me. It’s been very successful for my personality and I’m really enjoying it. Been really excited about it, and all of it is just because of the education I put into it. I wouldn’t have been able to do this without knowing all the ins and outs of the market and support resistance and everything else under the sun of that. It’s been really exciting and very fun.
Clay: That’s awesome. Now, you said you had practiced for a while. Did you do like paper trading? Was that part of the practicing?
Jeremy: Yeah, so I use Thinkorswim, and that’s my platform. I’ve stuck with them because [crosstalk] of all the resources and tools and I use the paper trading simulator as my guide.
Clay: Okay, and I want to dig a little bit deeper because I don’t know if I’m going to ask it in the way or I don’t even know if it’s really possible to explain, but I’m curious and I’m sure listeners are, but you had a strategy and it just wasn’t quite working. Then, you made a comment, you started to experiment, you wanted to find stuff that kind of made sense for you. How exactly did you do that? You made the determination, “Okay, this strategy isn’t working for me.” Where did you go from that point? Did you just start like going back through notes from the courses? Or did you just start… How do you go from concluding one strategy is not working to then all of sudden figuring out a strategy to even try practicing? Then, how did you practice it before it went live? Does that make sense at all?
Jeremy: Yeah, it makes perfect sense. Every time… I have a rule. This is how many dollars I’m willing to risk in a given trade, and with some of the strategies that I’ve been using, I was exceeding that risk on a regular basis. It was outperforming what my gains were because I wasn’t patient enough to let my winners run. I ended up going… Every time, I would go back to the courses and I would say… I’d go through RvR and I’d go through… Robotic trading for me was really great just to understand the charts, understand the market, but the strategies is really what’s described in RvR.
Jeremy: I went through all of the strategies that you suggested and went through and I just found one strategy where I was like, “I think you can get some consistent wins out of this. You may be risking a little bit more than what you want, but I’m already doing that already. I can build some consistent wins and I can be a little bit more patient.” Every time I went back to your courses, that’s when I started to develop this strategy and then there was one day the light bulb went off. I was watching you on YouTube. I love watching your live day trades just because I like to hear some of your thought process. I can see things from the courses that you don’t particularly explain in YouTube, just for reasons that you-
Clay: Yeah, and thank you for bringing that up because what Jeremy is not saying is, “Hey, I learn and I did all of this from strictly the YouTube videos.” That’s not what he’s saying. Like he said, he understood what I was getting at, what I was doing even though I didn’t say anything because he has the context of the courses. Please, I want to make that very clear. I explain on like those live trade videos. They’re not how-to videos. They are just, “What does trading look like” videos. For example, if you’re watching Discovery Channel and you see somebody performing surgery, the point of that is not to show you, “Hey, this is how you do surgery.” No, it’s saying to you, “Hey, this is what a surgery looks like. Hey, this is what brain surgery looks like.”
Clay: Same with my videos. I’m just showing you what’s possible with trading, what trading looks like, what day trading and scalping all looks like. They’re not how-to videos where, “Okay, this is what you’re supposed to do.” Again, thank you for bringing it up. That’s a very big clarification that I don’t want listeners to go watch those live videos and say, “Okay, I see what he’s doing”, and then start to mimic it because you’re going to get crushed because there’s more to it than what I’m letting on. Sorry to interrupt, but that’s definitely a good point that you made.
Jeremy: Yeah, well, you always explain in your videos. “Look, I got some other charts on other screens here.” You’re not looking at everything. The only thing we’re really looking at is maybe a chart and some level 2s, but we’re not seeing like everything else you have going on on the next screen. I know what those were just because of the education you provided us. I already know what they are. I started to look at some of the trades that you were doing and I said, “I really like this style. I wonder if I could do it in a more conservative route and do it by using options?”
Jeremy: You’ve explained your process with us from the Webexes that we have and I kind of understood that. I was like, “What I really love about Clay’s strategy is his win rate, and that’s what fits my personality. I want to see if I can develop something that’s very similar knowing what I know, and then try to execute that high win rate.” That’s kind of how it started and where I started to practice, and then I can tell you what my setup is on my screen so you know what I’m trying to do here so you understand [crosstalk 00:19:36]-
Clay: Okay, perfect. Just to make sure I understand, you come to the concluding thought, “As much as I don’t like to admit it, this strategy is just not working out.” Then, “You know what? I attended the Tuesday webinars, I’ve gone through the courses, and I see some of this stuff Clay is doing on YouTube. You know what? I wonder if I can actually kind of shape and mold this? Not to copycat Clay, but to kind of model in my own way, model something that would work for what I want?” Is that kind of the thought process [crosstalk 00:20:08]-
Jeremy: Mm-hmm (affirmative)-
Clay: That occurred?
Jeremy: Right. I think it’s not the, “I’m going to do”… It is a scalping mentality, but it’s definitely much different than the way you do things. You just gave me the realization of, “I know what strategy you’re using”, because there are multiple strategies out there and some people use very similar strategies. I had to mold it into a way that’s going to work for me because I can’t obviously copy what you do. I don’t have the backing or support to do that, but I have the idea of what your strategy is and I think it was a good strategy for the win rate that you have right now.
Clay: Okay, and that’s a huge point that I want to make the distinction of. Jeremy, his thought process was not, “I want to copy what Clay does.” No, his thought process was, “I want to use the tools that Clay’s using to build something that, sure, maybe it’s similar in some ways to what Clay is doing, but that I put my own spin on and my own twist on to fit my risk tolerance and my personality.” Huge, huge [crosstalk 00:21:09]-
Jeremy: Correct.
Clay: Difference. Way too many people and I get it, it’s an easy sales pitch. “Hey, I’ll teach you how to trade. Trade like me and do this.” That’s just not how trading works because we’re all different creatures of risk tolerance. We’re all different creatures of how risk affects us. There is no one-size-fits-all strategy because that’s the equivalent of saying, “Hey, if you want to have fun, go skydiving.” No, hey, for some people, maybe skydiving would be the answer, but for someone like me, no, no. That’s not the answer for me to have fun because we all have different risk tolerances in terms of fun just like we do in terms of trading.
Clay: A big distinction there. He wasn’t looking to copy. Just use the tools that I’m using to trade in a similar fashion. You’ve made those determinations, then you’re like, “Well, all right. I want to start to”, or, “I want to start to practice”, so now pick it up from there.
Jeremy: Right, and I think once I start explaining my strategy, you’re going to be like, “Dude, that’s nothing like me.” I’m going to be like, “I know.”
Clay: I totally know what you mean. When you stay you like the rubber bands, you’re just talking about just the general premise, the general philosophy of it. I do know what you mean. It’s not going to be probably anywhere close, but you enjoy a way that you can… It’s hard to explain without [crosstalk] I know what you know or I know what you mean perfectly.
Jeremy: It’s hard to explain, but my personality is that I like to win, and even though there’s… I think what’s close to our strategies is high win rate, but higher risk if you do take that loss. You just need to know where the real discipline and strength comes into is, how do you mitigate that loss? You could let it really blow up in your face, or you could recognize the situation and make a smart executive decision and craft your way to get out of it.
Jeremy: There was one time it actually turned out to be a win, but I was in risk mitigation, as in I was about to take a loss and I happened to turn a profit out of that just because of being disciplined and starting to exit the position at the right time. That’s the strategy I really tied into. I like the high win rate.
Clay: Exactly, and like you said, high win rate but the risk is always bigger, but because it’s a high win rate, that overcompensate the losses, and that’s what a lot of people… They always forget about that there’s actually two forms of risk management. Most people are like, “Well, yeah, if you’re risking $10 that means you should be making at least $30”, for example. It’s like, “Well, not necessarily.” If you’re going for let’s just call it 30 bucks but you’re risking a hundred bucks, for example, but you get that 30 bucks a whole bunch of times, then that can overcompensate for the time where you do take the loss.
Jeremy: Correct.
Clay: A high win rate does overcompensate where the risk might actually be bigger than what the pecuniary award is, but as you said already, Jeremy, you’ve already had several trades where you even got more than what you thought the reward was going to be, but we’ll cross over that. We’re going through the journey, this is important. You’ve determined what you now want to practice, why you think that would work for you, so now let’s get into the actual practice mode. How did you go about practicing all of that with Thinkorswim?
Jeremy: Yeah, so what I really like about Thinkorswim obviously are the resources and tools. Everything that I need is just is here. Anybody who’s used the platform, you can have your watch list on the left-hand side with several charts up, however you want to set it up. What I wanted to do is I wanted to make sure I had visibility to what the market was doing. Thinkorswim has a little resource where you can open up a quick chart on the left-hand side of the screen. It shows basically a candle chart of whatever you want to see and I put Spy up there to see, how’s the overall market trending for the day? Then, I also pop up two watch lists, and those watch lists are actually configured in the way that’s based on my strategy. It’s basically my scanner. Where’s the opportunity? Where do I see myself fitting in the opportunity based on the market itself?
Jeremy: Then, I have a two-minute screen, which is my main screen, where I look for the opportunity, and then I have a… What I want to stress importance on this is I have a two-minute screen with After Hours on, and then my second screen I have a 15-minute chart with no After Hours on. I can explain my theory on that, but that’s my basic setup. Then, on a whole other screen, I have basically the option chains and some level 2s that are there as well.
Clay: I would love to [crosstalk 00:26:07]-
Jeremy: That’s kind of the basic.
Clay: I would love to hear your theory because not that anybody fist fights in it, but I feel like that’s a relatively contested thing is as traders as well, do you keep pre-market data on? Or do you turn it off for your [crosstalk 00:26:20]-
Jeremy: Mm-hmm (affirmative).
Clay: Trading? It sounds like you keep it on for the two-minute that is-
Jeremy: I do.
Clay: So yeah, I’d love to hear the theory.
Jeremy: Yeah, so when you’re thinking rubber band trades, if you know what that is, you’re looking for an oversold or overextended opportunity. I definitely use RSI as a main resource in that. When I use the two-minute with After Hours on, I feel like I get a true RSI reading that isn’t overinflated. What I mean by that is when you don’t have After Hours on, RSI ends up… when market opens, it ends up basically going wack because you have a gap up or a gap down. Automatically the strength will go extremely overextended, extremely oversold depending on which direction opens up. Then, it won’t happen until later on during the day that it starts getting into like a regular motion and starts making sense.
Jeremy: I keep the After Hours on because there are traders that are buying and selling stock in pre-market trading. I feel like it plays to the strength of the overall trend that’s happening or the overall move that’s happening. I get a really solid, true RSI reading.
Clay: That makes sense.
Jeremy: That’s my explanation [crosstalk 00:27:46]-
Clay: I can definitely [crosstalk 00:27:46]-
Jeremy: On that [crosstalk 00:27:46]-
Clay: See that. Well, first off, I don’t use the RSI, so there’s one… Red flag’s not the right word. There’s one major difference, there we go, of how are strategies are clearly different, but I can see, and you’d be right, those indicators do kind of get out of wack if all of a sudden there’s a gap in either direction. All of a sudden, as far as the mathematical formulas that are making up those indicators… Remember, everybody, indicators, all the math, all the equations behind them is coming from price and volume. That’s why those are the king indicators, so there’s only so much you can do and manipulate because at the end of the day, it’s all about price, action, and volume. When a price all of a sudden has a big gap or in any other direction, that stuff isn’t going to throw off all of that math.
Clay: All right, so you have those setups, and then I guess you’re walking through your setup that you were practicing with TOS. I guess I’ll let you take it wherever you want to go from that.
Jeremy: Yeah, yeah. No, I think for me, it’s very important to see where the most common indicators are, the 50 SMA and the 200 SMA. What I did was I added the daily SMAs, the 50 and the 200, to my two-minute charts and my 15-minute charts so I can see where these really important what everybody uses indicators are at. Then, I put in the 50 and the 200 SMAs for the particular chart itself, so the two-minute 50 SMA and the 200 SMA. I put those in there for the chart, and then I have like a nine SMA for the two-minute chart and for the 15-minute chart that are there, too, so I could see, what are the time SMAs doing? Then, where is the daily stand within all of those? That just really kind of hammers home where we could be coming up to a major support or major resistance based on what everybody’s looking at.
Jeremy: Then, I also use Pivot Points’ study. I learned this from Hooch, and I really think these Pivot Points are so ideal in picking support and resistance and the interval trading day or intraday trading day. I think they are just excellent areas to where you can build up solid trade plans. I use that also as another indicator. Those are primarily with RSI, the MAs, Pivot Points. That’s kind of what I really focus on and I have the Level 2s as well. I just want to make that clear, but that’s really all I needed to identify, “Okay, what is this “oversold/overextended opportunity” going to present itself?”
Jeremy: The key importance for me in all of this is in my watch lists, I included… You have different types of subjects that you can have, and one of my subjects on there or whatever you call… indicators on there is RSI two-minute with extended trading so that I could filter RSI from a very overextended spot, and then RSI from a very oversold spot. I can see all the tickers that I’m following and where they’re at in their RSI from the overextended/oversold side.
Jeremy: I got another theory on this, and I’ll share it with you in a little bit, but for instance, if right now if I were to look and I see Nike right now, RSI is at 24.65 on a two-minute with After Hours on, it’s starting to get into that oversold moment. I’m going to go look at Nike. I’m going to see where it’s at on the 15-minute chart to see, “All right, where is a good support level where if this thing could get really overextended beyond 20 RSI, where do I see this thing bouncing at? Where can I start building up the contracts I want to be at?” I find that spot, I open up the options chain.
Jeremy: I end up selecting on the options chain my sweet spot option price that I like, and then the most important part, what Clay talks about, is knowing your y-axis. Is this stock going to provide enough opportunity for me if I were to risk just by looking at the y-axis? Can I get enough of a bounce here where I can see a good profit and return? I’m going to play this bounce, I’m going to play where these buyers come in. I look at the y-axis. I say, “All right, this looks good.” The great thing about Thinkorswim is that if I were to open up the bid and the ask on the options chain and I start going towards the bid, Thinkorswim will estimate what the price is of the stock that that option will be bought.
Jeremy: I can go down and let’s say that Nike’s going to be at around $89 the option price that I selected, and where I see the overextended move getting to that support, I’ll lower down below the bid even if I have to to get to that 89 price point. I’ll sit there and seeing if I see any hesitation in price. If I see it still continuing to drop, I’m going to take my first couple contracts right at that price point because I’m really in this overextended move. Surely enough, we’ll get down to that price point, so that support from the 15-minute chart, and I’ll get picked up on my first… I use three contracts, my first three contracts, so like 300 shares. Looking at the chart, I’ll say, “This thing, it’s going to bounce, but I think I can get maybe 20 cents, 25 cents on this first bounce.”
Jeremy: I’m just going to put out a… Above the ask, I’m just going to put out a sell on my options and maybe I’ll get that 25 cents on this first bounce. If I don’t, my next buy point is going to be probably 20 cents lower than where I put my initial offer and they’ll maybe put me around the 88-75 mark or 88-60 mark. If it continues to drop lower, I’ll pick up another three contracts, but then instead of a 25 cents bounce, I’m looking for maybe a 15-cent bounce. Sure enough, my second time to pick up another three contracts doesn’t happen. The sucker bounces 25 cents in options and I just made three contracts, 25 cents-plus on that oversold move because I had the right RSI that I wanted to be at. I had the right oversold moment, the right support level.
Jeremy: Everything came together, and just like you mentioned, when you can start adding up all the positives in your favor, is the greater chance that you’re going to be successful in this trade. As I look at support levels, I look at Pivot Points, the MAs, and everything, and if I see a price just tanking towards those levels, you know what? There are a lot of positives in my favor that this thing is going to bounce. I could get a good healthy bounce depending on how volatile it is or what time of the day it is, or I could get a decent bounce and just get where I feel would be the right level. That’s kind of it in a nutshell. I didn’t explain my other theory, but that’s it in a nutshell right now.
Clay: This is what’s got you 21-for-21?
Jeremy: This is what’s got me 21-for-21, yes.
Clay: Well, as I tell anybody that’s wanting to do this sort of… You know what? I’d rather risk more than what I could potentially win in the spirit of winning high, and that’s kind of what I tell them. I say, “Well, that’s fine. You can if you want risk more than what you’re going to win, but you better winning a whole lot more.” So far so good if you’re at 21-for-21. That form of risk management has got to be a high win rate and it is a high win rate. You said you most of the times you get those three contracts and then you’re able to sell them because it bounces in your favor. Have you ever got… It sounds like you’re willing to buy up to nine contracts. Am I understanding that right?
Jeremy: Correct, correct. Nine is my maximum that I’ll go to, and then I’ll start… It really also depends on the options price. If I have like… If I bought an option… As you get later on in the week and I’m trading the weeklies, the stock has to have the weeklies and it has to have volume within the options so I know I can get in and I know I can get out relatively soon. It’s got to have the great y-axis so I know that it could get a good bounce and a good jump pretty easily.
Jeremy: If I buy contracts at let’s say 50 cents, I know that I can get more than nine contracts and be very comfortable with the position that I have there. I feel like nine contracts is great. I’d love to go higher, but if I get to nine contracts, I’m going to start mitigating my risks and any particular bounces that I get, I’m going to start reducing the number of contracts I have until I get out at a relatively… at a loss where I find acceptable. I won’t go any farther than that unless depending on options price point, if that makes sense.
Clay: Yes, that does make sense because essentially what you’re saying is, “You know what? At this point, this is not going to be a winning trade, and that’s okay, but let’s just make sure that this loss doesn’t totally spin out of control and derail everything. I’m going to take a loss, but let’s just make the loss a loss but not some sort of gigantic loss.” Is that essentially what you’re getting at there?
Jeremy: Right, yeah, and I think it’s the same as… This is where I see the similarities in what you’ve done in the YouTube side is that you have started to understand, “All right, this isn’t going to work for me, so I’m going to start mitigating.” It’s going to be a bigger loss than my… Hopefully it’ll be a loss of maybe three winners out of the 21, but you know when is the right time just by looking at the charts, understanding what you’re given, and then making a very disciplined decision that, “This is the right opportunity to exit.”
Clay: Exactly, yep. Well said. Like I said, it’s hard to explain just over the podcast, but yes, that’s why there’s power in charts and tactical analysis as you start to see things. Then, you watch the tape and Level 2s and you just have to admit, “This thing isn’t quite working out the way it is. You can’t win them all, so let’s just make sure that the loss doesn’t all of a sudden wipe all 21 wins. Let’s make sure the loss wipes out three, four, five.” Theoretically, and this would still be a big loss, even if it wipes 10 wins, you’re still 11 wins in favor, but obviously, that’s not what you’d be trying to do. That’s the whole point of that.
Clay: You mentioned risk mitigation once, so it sounds like you had one of these situations where you thought you were going to be taking a loss, but then it turned out to be a winner.
Jeremy: Yeah, and it’s all because the option… It was later on in the week and I don’t like to be terribly aggressive on Fridays on expirations because the option prices start to decline in value through Theta really quickly. If you’re sitting in a position for a long period of time, that bounce may not get you that ideal price point that you wanted to get out in. You have to be a little bit more aggressive in taking your profits right away. I ended up coming down. I think it was… I can’t remember the ticker on it, but it was just dropping for a Friday and I was completely surprised to see how much this thing was declining and it was really at that right opportunity.
Jeremy: I think the RSI oversold was like seven. It was sold oversold and I started loading up on contracts. I made an error and I put in six contracts right away opposed to three and I said, “Okay, I recognize this error. I need to be more aggressive in my profit-taking.” This is kind of embarrassing, but I accidentally hit another six contracts opposed to hitting the sell, so now I had 12 contracts. I’m like, “Okay, well, number one, I didn’t get in the ideal spot I wanted to where the support level was at.” I was actually above it by I think 25 cents. Number two, I already bought in my other allotment and at much more than I wanted to with 12 contracts on this thing.
Jeremy: I’m like, “All right, I know where this stock is going to”, not that I know”, “But I have a gut instinct just looking at my different timeframes of where this stock is probably going to bounce and it’s going to go probably 25 to 30 cents lower than where I’m at right now. What I’m going to do is I’m going to get another three contracts when I get down there, I think actually another six contracts when I get down there, and then I’m going to start mitigating my risks after this bounce.” Sure enough, the thing went down another 30 cents to the penny where I thought it was going to go to. It took a massive bounce, I mean huge bounce, and then it hit all of my orders out there, all the way to the one of my original order. It bounced so clearly high I ended up taking like a $75 profit and I was like, “How the heck did that even happen?”
Jeremy: I thought it was clearly going to be a loss on this thing, but I just had all of my orders out there in case this bounce happened and I left the original order I had there for the original bounce and it even reached to that point. I think that’s where I gained my profit out of it. I was already in risk mode. The sucker bounced exactly where I felt like it was going to bounce, where my original… I think my second contract order should have been placed, and not at six. It just bounced all the way up to the point at where I ended up turning a profit.
Jeremy: A learning experience, number one, check your orders, check your contracts. It was like, “All right, well, that could have been a mess, but I’m glad I was just in this… I’m glad I had a plan.” I had a plan on looking at it. I didn’t panic because I was confident that… I can go into my other theory in a moment, but I was confident this thing was going to bounce to a certain point. I don’t think I was clearly going to get to exactly where it went to, but I knew there was going to be a bounce in there and just looking at the overall market, too. The market wasn’t crashing. We weren’t having a recession, trade war talks, there wasn’t a massive… I knew that just looking at the market, looking at the chart itself, I had a way to mitigate my risk and get out of the trade.
Clay: If I’m understanding right, had you just not, “Oops”, and bought six up front, so had you gotten those three and then the other three, it would have worked out that much better.
Jeremy: Oh my gosh, it would have been actually probably… Just depending… I thought the bounce was going to be at least a $1.15 move just because of the y-axis on this ticker. That alone, I knew I could have had probably $125 profit just in my pocket, which it could have taken like a minute just to gain that. I’m not looking… The thing is with these rubber band trades and where I see a lot of traders make mistakes is they’re trying to predict the reversal of the stock. The stock now is going to reverse from this trend that it’s been in.
Jeremy: My goal isn’t to pick any type of reversals. If I happen to get a reversal in all of this, it just is sweet end of the deal. I’m just looking to capitalize on where I believe there are people evaluating the stock and think it’s a good opportunity to buy that day. That brings me to my next theory, if you don’t mind me sharing.
Clay: I don’t, but I want to bring up one point, which is not to inflate your ego, but just in general, and I don’t have any scientific mathematical statistical studies to back this up, but in general from what I’ve seen is you know you have a solid strategy when you can really screw up an entry point like Jeremy did, where he bought six instead of three, and then have it still work out in your favor. Now, I’m not saying that anybody needs to go out, be like, “Let’s see if I have a true strategy. Usually I buy a hundred shares. Let me buy 300 shares.”I’m not saying that, but there is power in getting a good entry point, and in fact, Ben, hopefully you’re listening to this.
Clay: Sounds like Jeremy lets the price come to him, and for those of you that listened to last week’s episode, you’ll know exactly what I’m talking about here. This was a common talking point last week was just, “Get a good entry point.” Get an entry point and it’s amazing what can happen, and here we have an example where Jeremy screwed up, but because he still got the entry point that he wanted, ultimately everything worked out. Even if it hadn’t gotten that crazy bounce, he would have still even with an error been able to get out with a manageable loss. Sure, a loss, but nothing gigantic.
Clay: That’s usually a good sign that, A, you’re being patient in letting the price come to you and getting that entry point that makes sense, and then, B, just in general, you have good systems in place from a strategy perspective where… Now, obviously, you don’t want to always be making those errors, but if things can still work out even with an oops-type mistake, that’s more times than not definitely a good sign. Yes, to your theory. I want to hear about it.
Jeremy: Yeah, so you want to know something strange? All of these 21 trades were all calls that I bought. There were no overextended trades. They were all oversold trades, and there’s a reason for that from my perspective.
Clay: Okay, that’s actually a super interesting statistic. Real quick for listeners, calls in the options world just means you want to see the price go up. If the price goes up, that is good from a call perspective, whereas if it was from a put perspective, the price going down would be good, but Jeremy is saying that in all situations [crosstalk 00:48:27]-
Jeremy: Correct.
Clay: He was benefiting from the price going up with calls. That’s a lot, 21-for-21 calls. What’s your [crosstalk] what’s going on? Explain this to [crosstalk] everyone. Let’s put on our tinfoil hats.
Jeremy: Right, yeah. I looked at, “Well, what’s the overall market consensus? I feel like looking at Spy, you send out a newsletter every year, well, Spy is breaking another high. Spy is breaking anther high. ‘Hey, we’re consolidating right now.’” There hasn’t been a sheer panic yet within the markets even though there’s a lot of talk with the trade wars with China and all that stuff. Everybody is still relatively… The fear hasn’t fully kicked in. I believe with that type of market sentiment, I believe that hedge fund managers, people who trade these blue-chip stocks, everybody is great at finding an entry point where they want to buy. Then, I don’t see where people have a very valid trade plan where they want to exit. I feel like the whole mentality right now is buy and hold when it gets to a certain price point.
Jeremy: That’s why I start becoming confident in some of these support levels because I believe that when people are buying shares within blue-chip stocks, they are buying to hold and think that this price in a certain time period can get to a certain price point, but then greed kicks in. Do they continue to hold after they get to their targets? Maybe they release a few shares here or there. I feel like we’re in a very buy and hold mentality, new traders buy and hold. Old traders buy and hold. “Oh, if the price can get to here, I want to buy this stock.” Then you look at, “Well, how many people want to short a stock?” The percentage of short interest is fairly low, so I don’t think people really have a great idea at, “Oh, if the price gets to here, this is exactly where I want to short and hold.”
Jeremy: Most people who short a stock want to short and get out to a certain price point because they don’t want to get left high and dry if there’s a squeeze happening and this thing starts taking off. We’re at a buy and hold market and I feel like there’s a lot of people out there that really know certain price points in these blue chips where they want to buy and hold. I feel like when I look at a stock and I start seeing a ton of oversold opportunities, then I was like, “All right, well, if I were an investor, where do I think just looking at how this has been performing for a year… There’s some certain areas where I’d love to buy a stock at a certain price point. I think I’m going to buy and hold until I see this get to a certain level, and then maybe I’ll sell it off. I’d like to buy and hold onto it.”
Jeremy: That’s my theory. That’s just my thought process, but I feel like just where the market’s at today and we’re not in a recession, the stock’s not in this major decline, I feel like that’s what a lot of people are thinking when they are thinking about “investing” and buying stocks or buying shares, and particular tickers. Just my theory.
Clay: It makes sense. You don’t claim to have any sort of like statistical studies, but there’s [crosstalk 00:51:58]-
Jeremy: No.
Clay: Doubt about it, not only is this a buy and hold market, but it’s essentially been this way for over a decade now given the bull market just keeps going and going. It does really make sense that, “Hey, buy the dip because all of these previous dips have gone back up.” Not that, but to just really distinguish, that’s not like the backbone of your strategy?
Jeremy: No.
Clay: This is just a theory on why you think calls have been working.
Jeremy: Correct.
Clay: It’s not like Jeremy is saying, “Hey, it’s a buy and hold market, people. It’s going to bounce because it’s a buy and hold market, so therefore I’m just going to buy right here and I’ll just wait because I know it’ll come back up because it’s buy and hold.” That’s not what he’s saying. He’s just throwing out a theory there, which does make sense. You kind of have the proof in the pudding there.
Jeremy: Yeah, and I don’t know. I trade intraday, right? What’s very strange, too, is all of these trades have been calls and all of these trades have been day trades and I’m following the day trade pattern rule. I only get three trades every five business days. When I get those trades back, I look for the opportunities again. I look at where they’re at and then I execute it based on my whole trade plan.
Jeremy: I’ve been following the day trading pattern rule and I’m on a margin account because that’s how I have to follow day trading pattern rule so that I can leverage some of those dollars for the contracts that I need. I just wait my turn, and usually I can get in into a month following day trading pattern rule, trading options. I could get in between 10 to 12 trades a month, maybe one more depending on the number of days, but I get 10 to 12 trades a month. I just sit and wait my turn, honestly.
Clay: Now, how do you… Again, this doesn’t mean much to you, given you didn’t hear last week’s episode with Ben, but how do you overcome the… I’m assuming some days you make zero trades. Is that correct?
Jeremy: Yes. Well, there’s… Yeah, like today. I don’t have any… Yesterday, I had a great win on a big drop on Tesla and that was my last day trade, and I think my last two trades I made were on Thursday last week, so it won’t be until probably Thursday or Wednesday that I get two back. Thankfully on Thinkorswim, it tells you how many day trades you have made and how many you have remaining and how many you have left. I just wait until my day trades come back and then I’m like, “Oh, okay, cool. I have two trades. Let’s see if I have an opportunity, number one. Let’s see if anything fits my opportunity.”
Jeremy: Again, Thinkorswim, what’s awesome is I set alerts on all of my favorite tickers that if anything in a two-minute with After Hours gets below 22 RSI, I’m going to get an alert saying, “You need to take a look at this and see if there’s a good opportunity.” Or, if it gets above I think 80 RSI, “You may want to take a look at this.” Although I’m a little skeptical buying some puts in some of these really aggressive stocks right now, I’ll look for the oversold moment first, but alerts will pop up when the right opportunity strikes. Then, I’ll go take a look at it.
Jeremy: I kind of just wait it out. I don’t take trades every single day. You know what I do if I really want to? I continue to practice, so I’ll open up a paper trading simulator that has live data, and then I’ll keep running my strategy. Then, maybe I will try a couple of puts to see, “All right, how is this working with the puts right now?” To feed myself and to continue to strengthen a strategy, if I don’t have any day trades, just do practice trades in a simulator.
Clay: I like that [crosstalk 00:56:21]. That’s a very… Really, you’re killing at least two birds with one stone. A, you’re just keeping yourself sane, but, B, you’re just getting better. You’re keeping the ax grinded and sharp and you’re making sure that everything is still kind of functioning as it should. My question, though, is let’s say you do have day trades. Do you ever have days go by where you don’t make a trade?
Jeremy: I do. Honestly, like… Absolutely.
Clay: Okay, so my follow-up question with that would be [crosstalk 00:56:52]-
Jeremy: Two or three days.
Clay: How do you deal with that mentally? How do you deal with… “Oh, I’ve got to make a trade, I have these day trades. Let’s go, let’s make a trade. Let’s just get these sold and then the rolling five-day period can get started. Let’s make a trade.” How do you overcome that? It sounds like from the tone in your voice that’s not that big of a deal, but how do you deal with that where you know you can make a trade, but some days you just don’t make a trade? Do you have any like mind tricks or anything?
Jeremy: It’s funny you bring that up because it’s taken me three years to beat my emotions. That’s been my biggest challenge is I have all the right tools and resources, and it’s really your emotions that can just drive everything out the door. It’s taken me a long time to figure that out, but I look at the charts. Like I said, I’ve been doing a lot of calls. Sometimes RSA isn’t going to get below 30 on most of the tickers throughout the day and I’m looking for it to get at least 22 or less.
Jeremy: I’m like, “All right, well, I can look to see on any overextended opportunities”, but I’ll look at the chart and be like, “Man, this sucker is just so bullish. You know what, Jeremy? Today is the day that I don’t want to take a loss, so if it doesn’t seem fit for you, do you want to end the day discouraged because you forced something to happen? If you feel like you really want to force something, open up that paper trading thing to see if it will really work out.” That will give me confidence that if the day looks like it did today, I can execute this strategy and be successful. Do you really want to take a loss today is a question I ask myself because the setup that you’ve been very successful with isn’t there right now.
Clay: It’s not necessarily the loss that would bother you, it’s the fact that you broke a rule, you forced a trade that led to the loss. Is that a right understanding? Okay.
Jeremy: Correct. Yes, it’s forcing the trade. Do you want to force a trade right now when not all of your metrics are lining up?
Clay: Okay, and then that [crosstalk] resulting in a loss. It’s not like you’re scared of a loss-
Jeremy: Correct.
Clay: You just know that you’d be extremely irritated with yourself if a loss was a result of you not following like you said all the criteria. Okay, that [crosstalk 00:59:14]-
Jeremy: Correct.
Clay: Makes sense. I like that, actually, is do you really want to take a loss that’s been caused by forcing a trade or just not following anything that you should follow?
Jeremy: Well, and that’s the thing is like I’m going to take a loss at some point in time. It’s, “Do you want to take a loss following a plan right now? Or do you want to take a loss by taking a risk that you don’t really have a plan for on how you’re really going to execute it because the market is just not looking the way you like it? Let’s look at everything that’s in your favor right now. Do you really want to take a loss right now? You know you’re going to take one.”
Jeremy: It’s just like, “Do you want to take one because you don’t have all your ducks in a row on this?” I don’t. It’s like, “I’d rather remain happy for the day”, because I told you I’m pretty competitive and I like high win rates. I’m going to strive for those and I’m going to find a strategy that has that high win rate, and if it doesn’t present itself right now, I don’t want to be mad at myself for being an idiot and forcing something.
Clay: I love it. That’s great stuff, and I think that could go… That’s really the epitome. It’s just, “I don’t want to be upset because all of a sudden… Not necessarily because I lost money but because the way I lost that money.” That can definitely be [crosstalk 01:00:38]-
Jeremy: Correct.
Clay: A good little trap that you almost set for yourself in the sense of, “Hey, don’t fall into that trap because that’s just going to irritate you.” For somebody like me, and I’m assuming somebody like you, even it let’s just call it a $5 loss, you would still be extremely frustrated because you’re like, “That should not be a $5 loss because I shouldn’t have ever even been in that trade in the first place because I broke the rules.” Is that probably pretty [crosstalk 01:01:02]-
Jeremy: Exactly. That’s exactly right. Yeah, exactly. Like today, it’s been pretty bullish today, but my chart’s telling me that ticker symbol TIF, Tiffany & Co. Right now is massive bear pull that’s happening and right now I look at the y-axis and I’d say, “Is this an opportunity for me?” Or CMG right now? Or IBM? Or Target? DGT? There are a lot of good opportunities for me right now and [crosstalk 01:01:38]-
Clay: That’s funny. I’m stealing this [crosstalk 01:01:38]. I’m alerting TIF right now in the chat room. That’s a good alert.
Jeremy: Oh, look at that. Look at that!
Clay: Oh, look at that bounce [crosstalk 01:01:43]. Nice, nice.
Jeremy: See, that’s what I’m talking about right there. That’s all I need-
Clay: Oh yeah [crosstalk 01:01:47]-
Jeremy: Is that [crosstalk] major bounce [crosstalk 01:01:48]-
Clay: Absolutely, yeah. I’m going to [crosstalk 01:01:50]-
Jeremy: You know [crosstalk 01:01:50]-
Clay: This might be a DebtCafe, though [crosstalk 01:01:51]-
Jeremy: Nobody can see it right now, but if you look at the RSI on it, a two-minute with After hours, and you see what I’m talking about. I like the volume that it has today. It has over 4.4 million shares traded. Looking at my Pivot Points, you can even pull those up. Pivot Points on that drop, too. You would see Pivot Points without After Hours. On a 15-minute chart you’ll see what I’m talking about, but yeah. Even with great driving markets, there’s still opportunities that happen, but there are just some days it’s not going to work even if I have day trades. I’d rather be great with the strategy than be forcing something without a strategy because it’s just going to lead to discouragement.
Clay: That’s awesome. That’s awesome. Well, looking at the time, we’re almost at an hour, but I still… I mentioned something in the chat room a while ago and I’m still curious. I just want to make sure, but you mentioned you’re 21-for-21, which tells me that you now know that you’ve won 21 in a row. You’re 21-for-21 and you’re a competitive guy. Are you worried at all that you’re going to end up letting some sort of what should be a mitigated controlled loss turn into a much bigger loss because you’re saying to yourself, “No, I want to be 22-for-22, no Jeremy, I want to be 25-for-25, no, Jeremy, I’m going to be 30-for-30”? Are you worried about that at all? Or are you kind of… Do you have some sort of like signs up in your mind that are saying, “Hey, don’t let that get you”? Winning streaks can be very… I’ve done videos on this in the past. Are you worried about that at all? Are you well prepared to ignore those voices when they will show up?
Jeremy: When you mentioned that, you know what’s funny is I open up my trading platform every single day saying, “All right, this could be the day. This could be the day, so are you prepared for this to be the day that we’re going to take a loss?” I try to frontload myself saying, “All right, let’s be prepared. Let’s execute. Let’s know where we’re going to get in, get out, and when we need to mitigate that where some price points where I really just don’t like where this thing has gone and what am I going to get out.” If today is the day, it’s going to happen. You just got to buck up and say, “I still want to take the risk because the opportunity presents itself, but if today is the day, it is what it is.” Every time I open up the platform, I always tell myself, “Well, is today the day?” If it is [crosstalk 01:04:36]-
Clay: That sounds like a great sticky note. “Is today the day? If it is, it is what it is.” That’s genius right there. I can see how that work is if you just literally tell yourself the first time, “Hey, today might be the day, and if it is, well, it is what it is. Nobody can be right all the time.” Well, you know what?
Jeremy: Correct.
Clay: Most times, people try to wiggle their way out of something and they give me some sort of reason. I’m thinking, “No, that’s kind of got… That’s pure weak sauce.” I’ll say, that makes sense to me. You’re really establishing… I like the word you use, you’re frontloading yourself to just prepare mentally that today might be the day. That’s great stuff.
Jeremy: That’s right.
Clay: Then, final question, and I’ll leave it up to you. You don’t need to give me exact numbers, but clearly your account has grown when you’ve had 21 winning trades. Has it grown in… I want to say significant way, but I also don’t want to demean because I know it’s all about habits and stuff like that. I guess what I’m getting at is this. What would you say to the person that’s saying, “Jeremy, I don’t have $25,000, so therefore, I have to be under the pattern day trader rule.” That’s not worth it. I need to like do penny stocks or something because it’s impossible to grow your account if you don’t have $25,000 and you fall under the pattern day trading rule.” Or, “Jeremy, I’ve got to find something that doesn’t even have [crosstalk] have the pattern day trading rule.” What would you tell to somebody that that has some sort of attitude?
Jeremy: Right. No, I mean, I ask myself that question, too. It’s like, “Could this really be done?” I think that’s what my whole search has been is, “How can you grow a small account by following the day trading pattern rule?” Just honestly, quite frankly, these last two months and some of the wins I’ve had, it’s paid for my Hawaii trip that’s coming up, so five nights with my wife that is… I’m expecting a third child [crosstalk 01:06:33]-
Clay: Hey, congrats [crosstalk 01:06:34]-
Jeremy: By the way.
Clay: Congrats.
Jeremy: Yeah, so we’re going on a babymoon, and I’m not doing this to be rich. I’m doing this that maybe this could cut out one of my expenses in my budget on a monthly basis. Whether that be a car payment, whether that be electrical or whatever. If I can add a source of income that could help pay for one of my bills, I am saving that much more money a month and my regular day job. I’m also having fun while doing it. If at some point I say, “All right, well, I’m going to start collecting and building my account and not taking out any profits and start building to it”, you know what? I could get to a point where this is totally… It’s not going to be an overnight success. It’s going to be a grind, but it’s going to be a very successful grind.
Jeremy: You know what? You can call yourself a successful day trader by paying a bill. You don’t have to be completely wealthy and rich on that. At some point, you’re going to get to an area where you’re building such a solid game plan that you can start saving up more and more money to get to that 25K amount, or hopefully by that time, the day trading pattern rule is lifted. I don’t know, but if you could just pay a bill every month and you’re seeing profits, and like I said I think from our last conversation, if you have to pay taxes on capital gains [crosstalk 01:08:14]-
Clay: That’s [crosstalk 01:08:15]-
Jeremy: You’re doing something right.
Clay: Exactly. I always say kind of at the core, our goal as traders should be taxpaying traders. If you’re sitting there saying, “Well, at least I got a tax write-off”, no, that’s not what… You should not be saying, “At least I got a tax write-off”, because that means you didn’t make any money. Well said, and basically I fully agree is for me it’s all about more so a practical point of view. What do I mean by practical? Well, Jeremy said, “Well, from a practical point of view, I’m literally paying for this trip for my wife and I to go out to Hawaii.”
Clay: Or for me, I always bring up the example there is… One morning, I’ll never forget, wanted to go out to Denver to do some hiking with other members of the community. I bought the plane ticket. It was like 205 bucks or something like that. Then, on the exact same morning, I made $325. Now, is 325 like a massive amount of money that you’ll see from a lot of people on social media? No, it’s $325, but in a very practical sense, it’s like, “Wait a second. Like 90 minutes ago I bought a plane ticket. Now, that plane ticket has been paid for already in the same exact morning, plus I have like a hundred bucks left over for food.”
Clay: If you approach it like that, to me that’s a great way to really just look and kind of keep all of this in perspective where you don’t need to be, “Oh yeah, I’m a day trader. I’m successful because I have three mansions and 19 Porsches and two Lamborghinis.” I get why people think that way in this Instagram culture and all of that, but try to look at things from as practical a point of view as possible, but…
Jeremy: Yeah, and most of these traders, people have got to realize that they started with a lot of money and they took major risks and some of them got lucky. Some of them had a good practice, but it started with a lot of money to make a lot of money. It takes an incredible amount of time to take a small account and build it to some overwhelming growth. It takes time and it’s not like a complete overnight success. It’s a grind and it’s perfecting a trade plan. I just feel like when people go to YouTube, they go through all their research. They’re like, “Dude, I just made $6,000 on this trade.” Well, it’s like, “How much capital did you have in the first place?” It’s all relative. If you got a lot of capital to do it, then you’re going to have some bigger wins, but you’re also going to have some big, big losses if you don’t have the right trade plan.
Clay: Exactly. Well said, and I don’t think we could really end at a better spot than that. Well, Jeremy, you know what? I didn’t give you any crap for… No pun intended, I didn’t give you any crap for being the toilet guy, but Jeremy, I’ll never forget Jeremy because, and he has a great sense of humor about it, but you sell toilets for a living and [crosstalk 01:11:06]-
Jeremy: I sell toilets for a living, man.
Clay: Yeah, he sells toilets for a living. Are you still in Southern California?
Jeremy: Yeah. Yes. Born and raised, man. Still here. Hard to leave this spot once you’re here.
Clay: Oh yeah, I finally got out to California a few weeks ago. Now, Northern California, but even there, amazing.
Jeremy: It’s still nice.
Clay: Like amazing weather. I now understand the high taxes. I kind of get it why people are like, “Yeah, these taxes are absolutely ridiculous, but it doesn’t rain. It’s like sunny every single day. There’s no mosquitoes. There’s no humidity.”
Jeremy: You could play golf year around.
Clay: Yeah, I mean I-
Jeremy: Play golf year round, everything. It’s kind of hard to beat.
Clay: Yeah, I mean all I know is that you’re living the life, man. You’re selling toilets in Southern California, making money from your trading account. That’s the life, but…
Jeremy: As long as you can’t do your duty virtually, I have job security.
Clay: There you go. There’s so many jokes that we could go here, but, oh man. Well, good times, Jeremy. I appreciate you hanging out and just walking us through everything and, yeah, just keep at it. I like that, “Is today going to be the day?” I think you’ll be just fine. My only worry coming into this was, “I really hope Jeremy’s not… There’s not some trap in plain sight that’s going to cause you to go into stubborn mode”, but if that’s your mentality every single day is you’re frontloading your emotions with, “Today might be the day”, then I’d say, yeah, you’re in good hands. Well, man, thank you for hanging out [crosstalk 01:12:33]-
Jeremy: Yeah, absolutely.
Clay: Did you have any final points or words of wisdom or anything before we call it good?
Jeremy: No, man. It’s been a fun journey with you for the last I think four years.
Clay: Yeah, you’ve been around a long time.
Jeremy: It’s been fun, man. I really enjoy the group. I enjoy getting to hear your perspective and I’ve learned a lot from you. A lot of it started with me figuring out me, too, in this. It’s just been a really fun journey, man. I’ve had a great time.
Clay: Awesome. Yeah, I mean really all I can say is just don’t flush it all down. That’s really all I got for you [crosstalk 01:13:10]-
Jeremy: It’s just don’t flush [crosstalk 01:13:11]-
Clay: Just don’t flush it all away, okay? That’s all.
Jeremy: Yeah, no kidding.
Clay: All right, Jeremy. Well, thank you for hanging out, man.
Jeremy: Yeah, absolutely.
Clay: All right, for you listeners, before you go, a final few things. First off, if you’re listening on iTunes or any of the other podcast players, if you could leave us a rating, that would really help us out, especially on iTunes. Either leave us… Just click the stars or a written review really goes a long way. We would really appreciate. If you are listening at, on the show notes page, then, there’s a little live chat box in the bottom right-hand corner.
Clay: Feel free to reach out, not necessarily just about this podcast, but questions, comments, suggestions, if you have any questions on the services we offer with the community or the educational stuff, we are here to help. That’s a way you can reach out to us. If nothing else, like I said, your support is always appreciated and especially on the iTunes, a rating goes a long way and a written review goes even that much further, so we would definitely appreciate it. Thank you to you as listeners, thank you to Jeremy, and we will see you all back next week.
Announcer: This has been The Stock Trading Reality Podcast. Thanks for taking the time to hang out. To learn more about Clay and the ClayTrader community, including the trading team, premium training and more, visit

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