Why Market Conditions Shouldn’t Matter to You (Part 2)

Why Market Conditions Shouldn’t Matter to You (Part 2)
May 18, 2021 Market Traders Institute

The following is part 2 of a 4-part transcript of the “Equities – Risk Less, Make More” session at MTI’s Investment Leaders Summit event held on April 27, 2021. The session featured market experts Tyson Clayton and Chris Pulver, creators of the groundbreaking Equities on Demand training program. For more information, watch our Equities on Demand video or read Part 1.

Clayton: I want to get into some of the things that we do on a day-to-day basis in Equities on Demand. And I want to talk about some of the things we’re doing in our own portfolios. Here’s a conversation I want to have. First of all, I want to make sure that everybody in the room is on the same page.

I’m going to focus on the people saying, “ You know what, next year, or the year after that, I’ll learn how to trade stocks and options.” And let’s even separate the option side for now, right? Yeah.

Let’s just talk about the stock side. How many of you in the room believe that the stock market, whether you trade or not, the stock market is going to affect you?  I’m going to give you something to think about.

And again, I love Forex trading. Okay, love it. But I’m going to challenge you to think about this and I do not want this to happen to you. I’m anti what I’m about to say. Let’s say you had a string of losses and you just throw up your hands and say, “I’m done with trading Forex” and you walk away today and you commit to yourself to never think about the Euro dollar, a dollar yen or any of that ever again. Will that have a day-to-day effect on you or your life? Think about your spouse or your kids or your aunts, your uncles, your dads, your grandmas. Do they talk about the Euro dollar? The dollar yen? Typically, not. They don’t.

My point is, what you’re doing in Forex typically won’t affect you in the long-term. But now, I want you to think about the stock market. If the stock market rallies up 50% in the next two years, does it affect you? If the stock market tanks down 50% in the next two years, does it affect you? Does it affect your job? Does it affect the economy? My answer to that (and I think everybody in this room agrees) is  “100% yes.”

“Whether you think it does or not, whether you have a company 401(k) policy or whatever it might be, the stock market is going to affect everything we do on our day to day basis.”

And so I need to make sure everybody in the room — the 569 people in this room — are with me in saying, “Man, maybe I don’t trade stocks. Maybe I’m not focusing on it full time, but this is important. And it affects me.” Answer “yes” or “no” in the chat box. That’s a question everybody has to answer. Yes or no. That’s an awesome question because we’ve got to set that consensus.

And also, as we answer that question, I want you guys to understand this. We have a trade that’s being set up today, which Chris and I are in and a lot of students are in, that has the potential to make 30% to 40% tomorrow in one day, one day. Is there a currency out there that’ll move that much, other than cryptos?

We’ll talk about cryptos. Is there another currency out there that will move 30% overnight? No, not even close. We set up these trades on a consistent basis. So guys, when we’re talking about this, I assume a lot of you understand the importance of this.

I assume a lot of you are excited about this, but I want you to keep your minds open to stocks and options. Even if you’re learning how to trade Forex, there’s ways that we trade, there’s passive ways that we trade in Equities on Demand. And even when you’re learning, I would say that our weekly Power Play strategy, Chris is, is a stress-less way of trading once people get it.

Would you agree with that, Chris?

Pulver: Absolutely. I’m just going to type out what we do here, Tyson. We have active Daily Bottom Fishing. We look for good opportunities every single day. We have Weekly Power Plays, which is quickly becoming far and away my favorite trade strategy, like weekly income financing, one strategy with the next. It’s freaking awesome.

So I love this strategy so much. We generate some weekly income and have a nice chunk of winners. Earnings season has been phenomenal but I don’t think traders really grasp or appreciate how good of a streak we’ve been on to have 20 trades and have 20 trades for profit.

it’s incredible. Again, we did it because we’re in live trading sessions every single day. We did it because we’re actively following and managing and adjusting. We’re trying to be as transparent as possible with what we’re doing in our accounts or we’re helping traders do every single day in the session and with Telegram.

So we have our Daily Bottom Fishing for traders that want to try to make a buck today. We’ve got Weekly Power Plays that we want to set up something on Monday, take profit on Friday, take something on Monday and let it sit for the next two or three weeks. Not worry about it. Tyson, even strategy one for the Power Play that we kept going through this week, look at how easy that is.

It’s like a two to three week hold for high probability wins. We have earnings season, which everyone knows is a very popular thing. And this is one of the largest weeks for earnings. If I’m not mistaken, there are over 200 companies this week announcing earnings. It’s a big week.

Clayton: Yeah, but we’re very strategic.

We’re very strategic though. That’s the other thing I want everybody to understand is this, what we do is based upon years and years worth of algorithms and strategies and concepts built together. For example, there are probably 60 different companies reporting earnings in the next 24 hours.

We have one new play that we want to get into because we strategically pick the ones that make the most sense. And when we do that, we can go on streaks were we can have the 20 trades that win in a row. So again, how many of you in the room have ever gone on a 20 trade winning streak, were your average win is 15% to 20%?

Let me ask it a different way. How many of you would love to be able to go on a streak like that? Because I want every one of you to be able to go on a streak like that, because this season, Chris, happens four times a year. Four times a year, we go into this earnings season and we have a great time.

When we’re not in earnings season, every week we still find those great high-quality setups by using our Power Play, using our Bottom Fishing. And then what we do is we set up longer-term passive trades. We had a trader in one of our long-term passive traits make a $1,000 over the last week and a half in skills.

So we’ve had massive success and we’ll see you in a little bit here, guys. We’ll show you some of these charts and show you some of the things that we’re looking to do. We had a question on, “What was the stock that has the potential to make 30% to 40% tomorrow?” We’ll talk about that in a little bit here, but this is everything that we do, guys.

It’s really fun. I do want to say that some people get intimidated by the stock market because it is, it is a lot. But when it’s all said and done, it’s amazing what our students are getting when they’re learning from us every single day. And that’s another really cool thing. Guys, imagine the dedication that Chris and I are putting to this [program.]

I love the Money Flow Trading Room. I love Turning Point and they are, for sure, a dedication of mine when it comes to Forex. But there’s nothing I’m spending more time on than Equities on Demand, because I know that this is so much more important than how much money I make today or this week. What we are teaching students, Chris, honestly, is going to have effects for the next 15 years, for the next 30 years.

This is going to sound kind of crazy, but I believe this. I believe that when we have the next stock market crash, and it’s going to happen again whether it’s in three months or 10 years, we’re going to have students that reach out to us and say, “Thank you because you helped save me a half million dollars in my 401(k)” or “You helped save me hundreds of thousands of dollars.”

Maybe [those students] didn’t make hundreds of thousands of dollars, but they saved themselves from losing that. And that’s another really big thing that we’re teaching students, Chris.

Pulver: So imagine last year, being able to profit from the crash in February and March, as opposed to just holding on to what the market did at the end of the year, which has squeaked out an 8%,9%, 10% gain for the year, right?

We went down 40%, rallied up 50% to 60% to finish the year net positive. Imagine how many people just sat there and said, “I hope it doesn’t get worse. I hope it doesn’t get worse.” They’re lucky. They’re so lucky that the world decided to do what it did last year, which was throwing the kitchen sink [at the problem] by doing an economic stimulus, slashing interest rates.

It’s not a financial crisis. It’s a health crisis, right? So we dodged the bullet. We bought our way out of the problem, but guess what? We can only keep doing that for so long. It’s like the debt cycle. We know this is real stuff. These are real fundamental concerns out there, but we’re not doom and gloom people.

“What we know is that these are markets that are going to move. These are markets that the world is measured by. Countries are measured by these markets, and the opportunity is incredible.”

That’s one thing that might be intimidating, Tyson, when we think about the stock market. Maybe something that keeps people on the sidelines is how many stocks there are out there that you can actually trade.

There are literally thousands of stocks to trade. How do you find Amazon when it’s in its infancy? How do you find Tesla in its infancy? How do you find Walmart in its infancy? We have ways to do that. And again, we’re starting to build this portfolio of stuff right now.

We’re talking about long-term speculation. We’re looking at plays for the next five or 10 years. We think that it could be the next 5X, the next 10X opportunity. We’re looking for those big opportunities as well.

Clayton: Yeah. I was just thinking about that. And that’s one thing we’ve built, a group of trade scanners. I know that in a little bit here, we’re going to give you guys an opportunity to potentially get these scanners and everything else we offer.

So the reason why I want to encourage people to do this on your own, cause that’s another thing. So we want to make money up, down, sideways, and we want to risk less to make more. But we also want to empower people to [trade for themselves.] Nobody cares about your money more than you care about your money. It’ll blow your mind when you actually stop and think about the destructive tendencies of these money management fees, even a 2% management fee, Chris, over the course of 10, 20, or 30 years.

If I have a $100,000 today and somebody charges me  2% to manage my money, even if they’re a really good money manager, right?  And so I’m saying, “Hey, this person, they have a service, they’re doing something of value. They’re outperforming the market by a little bit.” That’s all good and great, but you’ve got to remember [that] every single year they take $2,000 in fees from you.

If I have a $100,000, they take $2,000 away from me, not just for this year, they take $2,000 away from me that can’t compound next year. It can’t compound the year after or over the next 20 years. That $2,000 is close to probably $15,000 to $25,000 worth of destructive value that you lost over time because it couldn’t compound.

So my biggest thing is this, and this is so important. Again, this is stuff that may not come off right away when somebody is with us every single day. But some of the value that students are going to get again, isn’t the debt. You’re going to get huge day to day opportunities and week to week opportunities.

“The best value is in 10 years, when you look back and say, “Man, I saved $87,000 in [management] fees. I saved whatever. I missed out on the stock market crash. I was able to buy the market at the bottom. I was able to find the right stocks that provided me safety.””

So again, I just want to know how many of you agree that saving yourself money, because nobody cares about your money more than you do, and avoiding the next crash and maybe even participating in some of the profits on the downside [are valuable things to learn.]

Type in a “Yes” if you’re like, “Yep. That sounds like something I need to learn how to do for sure.” It’s not something you think you need to learn how to do, guys. I’m telling you it’s something you must learn how to do because, God forbid we ever go through another 2008, 2009 and your company goes through real big financial distress, and you didn’t invest or trade correctly.

And guess what, you’re now out of a job, you better hope you did really, really well in your investments. And again, I’m not saying that that’s going to happen, but if it’s happened, I live in a world where if it’s happened once it can happen again. I fully expect something crazy to happen again within the next three months to 10 years, but I can tell you, it’s always, it’s going to happen.

We all know that this train wreck is coming and yet very few of us are actually doing anything about it, Chris.

Pulver: Yeah. And what’s interesting is, very few are doing something about it, but yet look how mainstream and how popular trading has become.

I think that this is the best time to be a trader. If you think about what Robinhood brought to the table, what Webull brings to the table. And again, there are pros and cons to these brokers that are essentially making trading like a game on your phone. But what they’ve brought to the table is they have brought this mainstream, almost like, meme trading, right?

Look at how many people that have never traded a stock over life now know what GameStop is now, [how many people] now know what AMC is. Now they have done more research on what a short float squeeze is. Right? How many of you know about what Citadel is? Melvin Capital? How about Archegos, the fund that blew up Bill Hwang, where he blew like $8 billion because he was short on something.

Credit Swiss took a hit for him. What stock was he short on? What did he get crushed on? Do you remember? Viacom, right? Wasn’t he like in some of Viacom’s streaming services? He ended up losing like an $8 billion fund. So anyway, this stuff is making headline news.

If I’m me 20 years ago and I’m just out of college.  I’ve got a smartphone. I’ve got some cash. I guess I’ve started my career. Maybe I want to start packing away some dollars. You’ve heard of maybe these apps called Stash and Acorns, where you can round up your purchases and you can throw a few bucks in and buy fractional shares of Amazon, Tesla, Apple, Facebook, all these major companies that are going to be around.

And they’re going to continue to be these pillars of growth. But as popular as it is, do you think that any trader like that, for all the right intentions, do you think they have any idea what they’re doing? And that’s where, again, Tyson, this is why I wanted to launch Equities on Demand, because we know people that can benefit from this system.

We want people to benefit from this program. Like Tyson said earlier, if we had to teach somebody how to trade Forex from start to finish, man, there is so much to teach and learn. The technical side is the trickiest side, right? I mean, there are only 28 currency pairs of majors and crosses.

But look at how many decisions we have to make just to make those 28 pairs play out. Right. And so, think about stocks [and the products those companies make.] If I have an Apple iPhone, [and] I think that Apple could be a great product. If I own Nike shoes. If I get Netflix and I stream it. I’ve had a Netflix subscription for the last 10 years so that’s an easy thing to relate to.

You’re relating to that product or service. And it’s like, you own it. So, you can buy that stock. But like I said earlier, Tyson, if we trade options, we never have to own anything and we can still make money. That is crazy. And the reason why is because if you just buy and hold positions, you tie up margin and you are essentially a buyer and you’re a holder.

Now, there’s the acronym, right? In cryptocurrencies, we have the acronym HODL that stands for “hold on for dear life.” And that’s what most people do with their 401k’s, that’s what most people do with their retirement accounts. And that’s what most people do in stocks. They just buy and hold, not realizing that there are other ways to make really great profits.

Clayton: They’re taught to do that from day one. They turn on the TV and you know what? All of these TV shows are funded by the same market funds that are trying to get your money.

Pulver: The NCAA March Madness tournament was sponsored by Invesco QQQ. Are you kidding me? And this is the NCAA, a not for profit organization, that doesn’t pay their athletes anything.

We’re talking about, who knows how many hundreds of billions of dollars of market capitalization for the QQQ. This is crazy, right? There’s so much money in that financial world. It’s nuts.

Clayton: Another really big thing that I want to make sure we hit on is [the tendency to force trades.] And I would just speak from personal experience in this. I’m a trader. I’ve traded for 20 years.

So I’ve gotten over this [issue] over time, but I am who I am and it’s hard to change your personality type. And because of that, I oftentimes feel that a trader must trade, right? In Forex, we have plenty of opportunities. There are 28 currency pairs, but sometimes there’s not an optimal opportunity available.

Yet if I’m focusing on Forex, maybe it’s just me, but does anybody else in the room have a tendency sometimes to force trades? Because you’re like, “Oh man, there are 28 currency pairs. I know the best level is down here or the best level is here, but I feel like I need to trade. I don’t feel like I’m being productive unless I trade.”

That’s the beauty of the stock market. Chris, we’re never going to lack opportunity. There are 7,000 plus stocks that we scan every single day. And everybody in this room, you guys are going to have an opportunity to get access to our core stock scanners.

We scan for this every single day. And we pare that down [to the best ones.] Today, I already flipped through it. The scanner brings us down to about 40 different opportunities for tomorrow. Now you might think, geez, that’s a lot. Well, it’s not. I actually narrowed it down. We have three trades potentially for tomorrow.

And we’ll talk about those in a little bit. But we’re always going to find opportunities. So what that means is we’re never going to have to feel like we need to force something. If you want to trade, if you want to be more active, there’s always going to be real quality opportunities. If you don’t want to trade, if you don’t want to be so active, then you know what? That’s okay. Don’t be that active.

But the nice thing that I love about the stock market is that I don’t have to feel like, “Oh man. I’m just getting in [this trade] because I have to feel like I’m trading.” And [not having to feel like that] is really nice for me.

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