THE TRUTH ABOUT TRADING: WHAT YOU NEED TO KNOW

almost the worst thing that happens to you as a Trader is you make money right away I've stepped back and just really done nothing I'm barely writing my note I'm not doing a lot because I don't feel I have a real Edge in this market and the only way to do that obviously is to trade a lot smaller than you think is my opinion and your strategy is telling you you need to hold it but financially you have something going on in the back of your mind that you have to pay and you can't hold

it you're toast Market will eat you up you can work your ass off and lose mine right you need to live well below your means [Music] hello I'm Jason Shapiro with crowded market report.com and uh today I wanted to speak a little bit about something that I think is dangerous especially for newer Traders and people that are getting into trading which is the idea that trading is an ATM it's just a matter of getting the money together so you can put it in the account you know read a couple books on technical analysis follow some

Guru from Twitter or whatever and you're off and going man and it's just a question of uh time for you're richer than your wall this dreams okay and I just want to say it's not that I've been trading for 35 years not only have I've been trading myself so I can see results but um I have worked in many different places hedge funds prop firms and have witnessed many many Traders and I have a um Discord where we have many many Traders on there and and I I can watch them too I'm here to tell

you that that is not the case so if you go into this thinking that's the case you're starting behind the a ball to begin with and rather than just listen to cynical me I brought on um our friend Anthony kudell who has been trading for a long time as well I believe he started on the on the floors in Chicago which is the center of it all and he moved off the floor and there tra off the floor and also has seen a lot of Traders he actually has a relationship with Ninja Trader from what

I understand which obviously has a lot of Traders on there so uh I thought I'd bring him on to see his opinion on this subject as well so Anthony welcome here Jason great to be here yeah and tell me tell me what you think how easy is this game oh man where do I even begin and after 35 years how come I'm not a billionaire I got on the floor in uh the end of 95 beginning of 96 and so you know I'm coming up on 30 years which is crazy you I've been an independent

Trader for 25 years I got my seat in 99 so just over 25 years now actually I'm coming up on 26 it's crazy but I look at it like this I've had we weeks and months and even years that were careers in terms of p&l and I've had years and weeks and months where I'm working you know another job to keep my head above water and you know I've always felt that this business is I don't want to say feast or famine that's not really what it is but it's everything is in Cycles like I

I think that when you develop an edge which everyone talks about all the time right you have to realize that that edge is you need a a market environment that's conducive for year Edge and so I've always found that I've made money in moments there's times where I do extremely well where everything's working for me you I just have you know maybe these AR really great runs and they actually buy me time to last for who knows how long it could be until I have a good run again and I think that that's one of

the most difficult things for me to wrap my head around as as a new Trader is that I'm not coming in every day it's not a printing press and it could be you might have a great strategy out of the gates but you might have a market environment that's not conducive to it so then you keep switching back and forth and then all of a sudden you get a market environment that's conducive to that type of style or strategy and then you know you're not financially in a good place to take advantage of it and

that's something we see over and over again Jason right most people they shoot themselves in the foot way too early to finally be in an environment that uh you know like I said I I've use this word a lot conducive to their strategy and Style no I think there's a lot of really good points there I I think about myself and and also some other people that I've known where almost the worst thing that happens to you as a Trader as you make money right away because psychologically now that you get into hey look how

good I am at this I'm unstoppable so I don't have to worry about things like risk or you know discipline or you know cutting a loss because I don't lose I'm a winner look at me and that happened to me but as it turned out the reason that happened to me um when I was 22 years old was I got involved in a runaway bull market you know and it's a famous line like don't confuse a bull market for genius and I did quite frankly right and I levered and levered because I was making money

and I I you know put up one of these ridic you know as only a 22-year-old really could turned x amount of money into you know 40x amount of money inside of like two years and then of course the bull market ended and I turned 40x amount of money right back into x amount and then that is where I really started to learn about things like Risk Management and and that stuff and I think that's a pretty typical story you know as I'm a person just like everybody else is a person and so we all

kind of go through typical things and it's like you say to everything there is a season and it's hard to determine when your season is and when your season isn't but even if you can't determine when that is the key is to stay alive when it's not your season so that you can make good money when it is your season and the only way to do that obviously is to trade a lot smaller than you think is my opinion I I completely agree with you I mean you and I were on the phone the other

day we were cracking up and we were talking about just the markets and how little we were doing and I'm like I'm just sitting on a two lot because I feel like I can learn a lot from this two lot and was a loser you know but it it it it kept me from Trading a 20 lot or a 50 lot and you know and it's just like okay I love that phrase that you talked about everything has a season because it is so true because I go back to making money in moments I I

think the one thing that experience buir you it's why I say every year around the holidays give yourself the gift of time I say this to Traders all the time because that's the best gift you can give yourself the only thing that's really different I think about like yourself and me and and people that have been doing this for multiple decades is that we've seen the cycles and we know that when it's not our time to make money we're not really pushing it you know I I find other things to do I I don't put

myself in a position of weakness when all of a sudden the market gives me what I want and I'm mentally beat up capital's depleted and all of a sudden I need to be putting my foot on the gas and all of a sudden now I don't I don't have the confidence mentally and Fin anally I've been getting you know nicked and dinged for months and I think that that is the one thing that separates I think newer Traders from experienced Traders not that they can't find a great Edge not that they can't find a great

strategy not that there's so many great indicators and things out there that Traders I see using that I think really have a lot of validity and I think that they can actually build careers with but again because they put so much pressure on short-term trading that they shoot themselves in the foot in the times where things just aren't conducive to it and they can't separate themselves from it and so it could be like this goes back to why so many Traders go on a really good run and then have their worst run afterwards I've done

that multiple times and the reason is is because you build up this extreme confidence and you think that your Edge is now in place you feel like this is your time I remember saying it going yeah it's like I got it this is it I remember coming off of my best year and then having the best start to a year and then ultimately ended up being my worst year just because because I didn't adjust quick enough and I continue to try and force things that were were just working a week ago or even a day

ago that are no longer working and then it just puts you in such a bad place financially and mentally that you it's hard to come back from that and I think that is why experience is so important and you have to live through times because you will be able to see a setup or something that's happened in the past based upon a current market environment that worked really well and all of a sudden a similar situation that doesn't and I think we're seeing that right now Jason I think this year you mentioned the bull market

I think is so interesting and to see how this year has been like I actually started off pretty good the first like week or so of January and then since then it's just really I've been almost doing nothing and you look at all of these technicians a lot of them mostly bullish which I get why you know if you're trading indexes all of a sudden everything's mean reversion right all the biggest moves are coming off the highs back to the middle of the range and then it looks like we're going to get bearish and we

come right back in it's just like you know it's just chopping people to bits and again I've stepped back and just really done nothing I'm barely writing my note I'm not doing a lot because I don't feel I have a real Edge in this market and again when it starts to happen again I'll be ready to step back in but I'm not going to deplete myself mentally and capital wise right now and I think that to me is a big differential agre agre and you know I think also when people go through it in their

head the one that I like to quote a lot is George Soros like him or hate him the guy has um had a lot of success in the markets he's averaged a little bit under 30% a year and he had I believe a 40 or 45% draw down at one point so ask yourself am I going to be as good as arguably one of the greatest Traders ever and if I am then I can make 30% a year with a 45% draw down are you ready for that that's the question right people think they're going

to make money all the time and and clearly they're not you name it they've had big draw Downs right Stanley Ducker Miller to me is probably the king of it all and um he has had big draw Downs right and I I don't know that he had any years at a long time but he has said entry year you know just happens to be the calendar January to December where he hasn't head down but if you go march to March or may to may he has head down 12 month periods and then he's I would

argue the greatest one out there so I think that people need to take that into consideration I know we all think that we get involved and I just turn 20 grand into 80 grand very quickly and now I can turn 80 you know I can keep doing that time and time again and I'm going to be as rich as as Midas pretty soon it's just not realistic it's it's just not realistic you know you're not going to be the first person in the history of this entire game to do that and again if you look

at to what the best have done you'll see that that they have peries where they lose and you look at the best and look at what they've done during times where everything was aign for them they've done extremely well and even though you talk about experiencing a 45% draw down they've kept their capital in play to be able to withstand that most Traders financially aren't prepared for the hurdles that they're going to have to go through right and I think one of the struggles that you see a lot of newer younger traders that come into

the business that try to do this full-time on their own is there's so much more to this than just making money there's balancing you know your life around the income and as it it's sporadically coming in I think that's such a that's such a challenge and I think that because so many Traders come into this with the ideas of with high expectations of making a lot of money and then when they start to make a little bit of money and they're probably showing some success that you do and I would look at and say percentage

wise are doing very well but to them it's not financially enough to keep them afloat and so then they push even harder and there's these psychological battles that they go through because expectations were set too high now they're not making as much as they wanted but they're actually making some money and then all of a sudden it's this cry for help and they've they implode on themselves right they basically are just like oh God I just need this payout right this or I need that and I've seen a lot of Traders I've spoken with many

that have had really solid runs and have done really well and then set a level of expectation that's unsustainable even at the level that they just were and they're they're unable to find their footing as things start to go south on them and I think that's probably one of the biggest challenges as as a new Trader is to really think Beyond just this short-term expectation these short-term needs that we have you know I've worked other jobs while I was while I was a full-time Trader I was a member of the Chicago Merkle exchange and I

was clerking for Traders doing out trades doing whatever I could to make money so I didn't touch my trading account and so I can actually feel the es and flows of my account and be okay with it to eventually find a way to actually have a life as a Trader where you know maybe you don't make you know tens of millions of dollars like everyone thinks they're going to maybe you just make a good living I know a lot of traders that even in the days when I was on the floor then some of them

maybe never hit the million dollar Mark uh per year year but they made money every year and they were able to find a rhythm within their level of uh I don't want to say income but they were able to find a way to just kind of grind it out right and I think that's the other psychological part that I think so many Traders Miss is that they're just coming in either shooting too high or they have a good run and then they're back and they're not sure where to find it you know that is 250

a day enough is 500 a day and all a sudden I need to make a th and it's 5,000 they really have no Financial balance and and then then translate that into into real life because you know life's expensive and there's all these things that are going on and so sometimes it's not just the pressures of making money as a Trader it's how you deal with it as you make money what are you doing what decisions are you making to sustain yourself to maintain you know longevity in this business you look at you and I

when you think about it nobody wants to hear about I mean maybe they a lot of people do probably do want to hear this is just how much pain you and I have gone through and how many times where it's like you know I remember being in the car on my one-year wedding anniversary telling my wife as I'm driving to we're getting ready to go to nap and I'm like man I don't even know if we could do this I just got killed last week I'm like you know what I mean can I even afford

this right now I'm sitting there in the limo one week I'm a big shot the next week I'm going oh my God I have to cancel this vacation and you just like my wife is like what is this going to end like what is this and you know and you figured it out right and so there just so much to this I mean when I was 23 years old and I went on my bull market run the first thing I did of course was I went out and bought a Porsche 12 months later I couldn't

afford to put gas in it yeah and of course 12 months later it was no longer a bull market was a bare market so trying to get rid of a Porsche in a bare Market is a hell of a lot harder than trying to get rid of a Porsche in a bull market you know so I I I think it's a really and and this is something that I have come to because of experiences like that that I have come to uh to live by some of the things you talked about first of all you

shouldn't need to pay for your life out of your trading account otherwise you're going to have a very difficult time compounding the money even if you're successful right I I believe very strongly in that I believe very strongly in living way below your means especially as a Trader because believe it or not no matter how well you're doing it right now as you said there are going to be times when when it's not going as well so you need in particular in this business you know this is not a paid job right you can work

your ass off and lose money right you need to live well below your means I I've actually done videos on this before you know people were at one point looking at my videos and I had this chair that I sat at and the chair had like this huge rip in it and like it actually had like this piece of metal coming out that was like digging into my back and people were like oh you're supposed to be some freaking big millionaire Trader you can't even get yourself a freaking chair and to that point I went

out and did go by a chair but my point was I'm so used to not wanting to spend any money okay because I want to stay in the mindset of living so far below my means because that way the pressure you know you talk about okay it's not my time this is not the time for my strategy so I'm going to back well okay I may not make any money in that period so how am I going to live right well I'm living way below my means it's not a problem so I don't feel that

pressure to push which is such an important thing right sometimes you got to back off they say no when to hold them no when to fold them right no when to walk away and you can't do that if you are trying to make your living every single month off of trade I'm a strong believer a don't count on the trading account to pay your bills and B if you do reach a level of success live below your means there's there's no reason to go out and buy the Ferrari and buy the mansion and and do

all that stuff and as you get older I believe most people start have to realize that those things are not what it's going to bring you happiness in the end anyway you know stuff is not really what brings you happiness right um as a young person sure everybody wants to buy the Ferrari and all that stuff but I I was I'm not going to say lucky but in a way I was lucky that the first part of my career I went through it a lot of people go through with the ups and downs and ups

and downs and so that when I finally ended up having sort of steady success I already had gotten into the mindset of you know I was old enough to realize that I don't need all these things so therefore I'm going to live below my means and that helps so much with the trading that trading is such a psychological game this game is so in your head that the less you have to worry about when it comes to money the higher your chance of success is in my view I mean 100% I think if there's anything

that a Trader takes away from this today is live below your memes I think it's probably the most important thing that I did in my career and it took me a while to kind of figure that out because initially I was in it for the lifestyle I was on the floor I was a big shot parking you know P1 P2 at the CME you know big dinners doing everything right and you know eventually it it slowly went away you know and you look at it and okay I'm either going to deplete my Capital paying for

all these things that I have or I give myself a chance at longevity in this business and there's a lot of people that will always choose that they want to keep up with the Joneses as they say and that'll take priority and then ultimately they're out of the business right and so you know I I found luckily early in my in my career like okay I you I'm never going to be the richest I don't care if I'm the best I don't care what people think uh you know what I have or I what I

don't have and all all these different things all that matters is the next day I was able to come into the screen uh and do what I want to do and I was able to control my own destiny and that all started with me living below my means right cutting everything out and until you make some money financially you feel pretty good and then you start to lose it that and when that fear sets in of like not wanting to go back like I come from a background didn't have money to go to college only

High School educated you know looking at it where I was going to be working for the city or you know some sort of labor type job is most likely where I would have been initially out of high school instead I stumbled on the trading floor you know it was an accident it's a long story how that kind of happen but nonetheless it was like fearful for me to be like if I don't hold on to this if I can't be here today to click a button then what is it what do the rest of it

doesn't matter it's all going to go away anyway so once I reduced lifestyle expenses and was able to get control of that and that's why I mentioned a lot of times Traders have Edge or they have good strategies or but they just get way too far ahead of themselves you know or they finally make some money and then they implode immediately after because they're trying to push or something happens uh where they take money out of their account now they're Tighter and they just they don't give themselves the gift of time and that all starts

with expenses that all starts there because if you have a strong hand in the market and then what I mean by that is the ability to come in and make the decision that you want to make for that day that puts you above a lot of people if you come in with a week hand and all of a sudden the Market's a little bit against you and your strategy is telling you you need to hold it but financially you have something going on in the back of your mind that you have to pay and you

can't hold it you're toast Market will eat you up 100% this has to be based on your strategy and sometimes your strategy is going to have losing trades but you have to be able to accept that losing trade right and like you say if you can't accept that then your strategy is going to be useless you're going to get whipped around you're going to whipped out of what ended up being good positions which is going to get in your head again you're going to get mad and then your emotions are taken over and now you

can't trade now you're Frozen now you're this now you just can't do it and I'm not here to say that look this is a very hard thing to do we spend a lot of mental Capa capacity doing this and if you have success I'm not saying don't ever go out and spend any money right you do have to treat yourself once in a while but do it in a in a realistic way you know if you're into cars and you go out and make a budg okay then buy yourself an ex car but you know

what buy for cash right and don't have the loan over your head me personally I I I like traveling so I don't do a lot of stuff during the year I don't go out to dinner a lot you know what I mean I I I keep it pretty I'm I'm kind of a homebody I work out of my house and you know we don't do a lot of that stuff but a couple times a year we'll take nice vacations you know and I will and it's great because because I'm not blowing money in in all

the rest of my life I don't have any loans and I I don't have a big lifestyle I can go take my nice vacation and not worry about you know here we go we want to go out to nice dinners and stay at nice hotels and get a nice airplane you know I can do that stuff and I can enjoy what I enjoy but then the rest of the year I just tighten it up you know um so again if you like cars that you want to buy for okay you have a good run buy

a car pay cash enjoy your car move on right I'm not saying never spend any money because otherwise what's what's the point right but I just think those things are as important if not more important than your actual trading strategy because like you say you won't be able to execute your trading strategy I I if you're if you're feeling that Financial tightness if you want to elevate your lifestyle you've got to earn it right you can't elevate it quickly it just doesn't work that way elevator up right and then they rip the and you know

it falls straight down I mean it's no different than kind of with the market it it it it you have to earn and one of the things that I think one of the best piece of advice that an old school Trader told me years ago was when you're making money keep doing what you're doing keep saving it don't spend it when you start to get into a downturn a draw down that's when you can start spending a little bit of money because in that moment you've earned the right to stay committed to your strategy and

everything and then when all of a sudden you see that the market is not conducive to your strategy pull a little bit of money out step back go enjoy yourself regroup sit back wait to see when the market starts giving you something again and be ready to strike again from a fresh perspective because most people when they're making money they're just spending spending spending and all of a sudden they gets bad and all of a sudden now they're they can't adapt to it right and so I don't think it's perfect that advice but it helped

Slow Me Down in the moments of when things were going really well that I would just keep pushing and when I say pushing like I would just stay solely focused and try trying to maximize the most out of my strategy because I know that it could be tomorrow or that day that that strategy my strategy is no longer going to be working as well and the money I have to take it when it comes to me right when the market is giving me something I have to take it and when the market starts taking back

for me I can't give it too much and it's just psychologically really helped me it's helped me as a person slow things down and it just puts me in perspective of when things are going well tighten the news on everything in your life goes back to you know when you're doing well keep doing good don't spend when things pull back now you have the ability it's kind of like what you talk about with a vacation it's like you know I I don't ever really plan vacations that often I do do a lot of weekend trips

throughout the year but when all of a sudden things aren't going really well I look around and go maybe I just need to get out of here for a couple weeks or a week or two and just totally remove myself from it and you afford yourself that option because you really can't you can't buy that right like that to me is like you you need to to develop that discipline and you need to be capitally or have enough capital in that moment to be able to do that or remove yourself from that situation absolutely I

think we got the point across on that one I'm sure nobody will listen to it but uh this is coming from people who have been through the ringers still I always say this it doesn't matter really how I'll say it because hopefully it helps somebody out there I'll say a lot of things that I say because hopefully it helps somebody out there but I find that 99% of the people need to learn these lessons for themselves I know I did I always say like can't tell them they have I listen to all the things my

dad told me my life would have been a lot easier if my kid had listened to all the things that I told him his life would have been a lot easier but we don't because we have to learn our own lessons but here's the thing too Jason like our lives have been elevated slowly like when we finally got off of trying to be you know the biggest the best and I see all these people on Twitter talking about who's the best traitor who's this and it's like okay all these things whatever I don't care right

we've elevated Our Lives over time right like we're still here and and it comes a lot quicker than you think when you finally put your head down and just what you're supposed to do yeah when you try to make something happen it's just not going to happen you have to exist long enough and then ultimately it organically starts to happen you know all of a sudden you're like well I kind of get this so you know and then you start developing a rhythm and being a professional Trader this is not something that just happens I

mean I see people that have been doing this for three years they talk about like how they're Pros it's like man I've had you don't even know what comes at you at year 10 you mean you don't even know what could happen I mean it could be it I mean you could be done I mean you know we never make it in this business until we turn lights out and we're done my goal always is to be able to be here I want to be able to be here and when I think that way I

make better decisions for today you ain't alive then you ain't playing and silver that's good let me ask you this from your experience what percentage of people that trade the markets make money overtime not today or in a year or even in three years overtime what percentage you think make money yeah it's a very low percentage and you know I'm able to see a lot of bulk data you know over the years um you know working now even at ninja you get to see a lot of it you know a lot of people will talk

about how the future space goes through you know a lot of bodies right and it's historically just what's always happened right it's just it's the nature of this business and so longevity is not something that you see in the Forefront I mean you see a lot of people come and go in short periods of time and you know it's unfortunate and again I think it's it's really because I don't think it's because they can't make money I think it's because they can't make enough money and I think they set expectations way too high and I

think they have other things going on in the back of their mind you know other things going on in their lives and they come into this market and they're just not fully prepared for the time duration it's going to take you know there's a few guys out there on Twitter I think are hilarious and they talk about like I couldn't wait to become a full-time Trader to get all of this uh you know Financial Independence and I end up working 24 hours a day and I'm never taking time off you know it's kind of funny

right because you CU after going through that you realize yeah like this is not what you think it's going to be and I just walking in here and just unlocking the door to loads of cash as we started this conversation office it's not an ATM and in order to where the real money comes and this is this is such an important point where the real money came for me was building it over time right I was never the guy who had the best days the best weeks the best months or even the best years but

over time my numbers went up and over time I was able to take my money and do other things with it as well I was able to pay off debts I was able to pay off you know anything that I needed to I was able able to buy things that I want I was able to accumulate wealth by existing long enough and making money right and that's the key it's not about the big pnl for today it's not about the big p&l for the week or the month it's about being in this business long enough

to really accumulate wealth that's where the money is no and it's funny because that's where the the fun ego part comes in oh I had a huge day look at me I had a huge day I made $100,000 I'm a hero you know what I mean but that kind of thinking will will kill not to say don't go out and make a 100 Grand a day great but just know that that was that day you know and this is like you say this is about accumulating overtime this is about overtime not one time I exactly

and just to get back to my original question which to me I believe the amount of people that succeed with this is less than 5% if 5% of the people succeed at this then how am I going to be in that 5% and if I'm doing what the vast majority of people are doing then I've got a 95% chance of failing so I have to you have to think about in my to how do I do things differently than than what are the other 95% of people that are losing are doing and trust me those

95% of people that ended up losing had periods where they made money and I'm probably they made a lot of money and all that but that's irrelevant you know it's irrelevant you can make 100% a day for 10 days in a row and on day 11 you lose 100% and now you're at zero that's just math right that's just math so and there's and that 95% there's a lot of talented people a lot of talented people that really could have been successful traders that didn't give themselves time period no doubt about it see it a

lot yes yes good all right well that's really I think unless you want to add something I think that's that's the point here folks you know in particular for newer Traders which goes back to the very beginning it's not an ATM and if you think it is I think you're going to have a rude awakening Maybe not today how's that line go maybe not today maybe not tomorrow but I forget that line from the movie but you get what I'm trying to say that's the message here I hope that uh people hear it I hope

that people will consider it at the very least I know that they won't they won't live it until it catches them I wanted to throw it out there and and I'm glad that Anthony can come on here and and sort of give his views on as well because I think he made some very very good points and I will just again make the point that this is coming from people who have been doing this a long time and have seen a lot of trading and a lot of Traders and and these are the some of

the lessons that that we have learned and we're really just trying to pass them along to help people so I hope that helps people I want to say thank you to Anthony Anthony where can can people get to you or find you yeah so well first of all Jason you know I it's always fun speaking with you on camera and off camera I mean you're the real deal and it's it's we always have a blast when we talk and your openness and honesty I think is is great for this industry and I love what you're

what you're doing with crowded market report I think it's very much a a space that people need to go and check out and what you're doing so there's that for me Anthony Celli on Twitter Anthony cell.com and look on March 17th um we're launching uh Ninja Trader live it'll be on YouTube on on the ninja Trader YouTube channel uh so check us out there and I'm also working in the background of ninja Trader building a Trader development program uh that'll be free for Traders and so look for that to come out uh later this year

as well ninja Trader is Futures only or also do equities just Futures Futures Trading only okay good yep cool so everybody check that out probably good if I know if anony is getting involved and running it it's probably going to be something uh valuable would be my guess so check that out check out everything and good luck out there and uh stay focused and stay cheap