The following is part 4 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, Part 2 and Part 3.
Pulver: Let me read this [viewer’s message,] This is so awesome. Donna, who just typed in and says, “I’ve been in the class since day one. They aren’t exaggerating the effectiveness just as importantly as they’re teaching us to do it ourselves. Their dedication is amazing.” So I share that comment with everybody.
Clayton: I just have to say this, Chris, regarding what Donna just typed in. I’m a skeptic, right? So I’m just a skeptical person by nature. If I were standing in a student’s shoes, then I’d be saying, “Come on, dude. Who the hell are you? If you’re so good, then why are you spending time shooting and marketing videos at Market Traders Institute on this webinar, trying to convince people how great you are. I mean, why do you do this?”
There are a couple of reasons. First of all, I want you guys to understand there’s a selfishness to [being a trading instructor] for me. I do this because when I’m around Chris, when I’m around the FX Chief, when I’m around Gary, and when I’m around you all as the students, I can feel strong and motivated. I could be the biggest boneheaded trader in the world, but when I’m around these guys I’m less of a bonehead than I am by myself. So that’s really important to me.
Second reason, I get access to amazing developers and ideas and platforms. And that’s a huge reason for me. But also it’s because God has given me this massive desire for freedom and this desire to help others become more free.
I think what Donna just said is the key to it all. I want every person that’s with us for three months, six months, a year, [or] forever to get to a point where you keep coming back because you love being around us. But you don’t need us because you’re already making enough money. You’re already doing what you need to do.
I want you guys to be the next people who pass this knowledge forward and bless others. That’s my goal, Chris.
Pulver: Yeah. And I want to say that I’ve been the same way, Tyson. I’ve been doing webinars for a long time and been around financial education. I’ve done conferences. And I get that question too, “Well, can’t you just trade for yourself?”
You don’t understand how lonely trading is. If that’s all you want to do is trade by yourself, then it might seem good in theory to say, “Oh, all I do is trade.” But if it’s me staring at my four screens, if it’s me with too much time on my hands, then that’s not a good thing.
Having too much time alone is probably gonna make me force trades. That’s going to make me question what I do when I have a drawdown or a bad streak, right? So can’t we do both? Can we actually enjoy the process enough where this is what Tyson and I like to do?
We like to talk about this stuff. I have a lot more fun talking about this with Tyson, talking about this with thousands of traders and teaching traders how to do this because I was in your shoes once. Right? Ten years ago, I was a student at Market Traders Institute. Ten years ago, I was doing one-on-one lessons. I was working with professional traders.
I was on trading floors and proprietary trading firms. I wanted to be a trader. So I’ve gone through this journey. I like to think that if I can do this, so can everybody else, and that’s not an exaggeration. So, guess what?
“There are real, authentic, genuine traders out there that can trade well and can teach well. There are not very many people that can do that. And I’m happy to say that Tyson and I are two of those people.”
And again, with the students that are in this class and anything we teach here at Market Traders Institute, I hope that [dedication] comes out in how we teach. I hope you see how much we care about this and we’re not going to stop.
I get a lot of fulfillment out of number one, selfishly. We have a great development team. We can build wherever we want and the sky’s the limit. If we can dream it, we can do it. We can build it. That’s awesome. But we also can trade, there’s not a lot of things where you can have a job, get paid to trade and still be trading and making your gains as well. There’s a lot of extra dipping there, which I really like, so that’s fine.
Clayton: It’s absolutely true. Chris and I have been talking about doing this for over a year. I think it’s the same with Chris, but I sought him out to partner up with this program.
I look at Chris as a partner in this and he doesn’t know it yet, but he’s stuck with me for life now. So, it’s forever. But the first reason why I sought Chris out is because he’s one of the most amazing traders I’ve ever been around. But I’ll tell you the second reason, and this is going to sound kind of conceited but I think I’m pretty good at what I do.
I haven’t met a whole lot of people who are as passionate at what I do as I am. But Chris also has a way of bringing things in an instructional way to students that I don’t do myself. That is awesome and that’s so great about what we’re doing, Chris. We’re teaching together every day and [our students] get the best of me. They get the best of you.
There are some students that connect better with you than me. There are some students that connect better with me than you, and they get both of us. And what’s cool is, if it doesn’t quite click today, they get to join us tomorrow. If it doesn’t quite click now, then tomorrow we do the same things again.
That’s the best thing about what we’re teaching is that it’s repetition. It’s the same stuff every day. And then once it’s [learning] the same stuff every day, over time it eventually becomes your own. It becomes easy. That’s the whole goal of all of this [course], guys.
Pulver: I wanted to ask, do we have any traders in the room? Do I have Chris A in the room? Do I have Robert M in the room? I’m curious if they’re joining us because a week or two ago, they were the very vocal traders on a Monday session. They’re like, “What is going on? I don’t know where to start.” And now, Robert today closed out a trade for nine plus dollars on UPS.
Chris asked a question in a session today. He was spot on with exactly what we’re doing. It’s the ability to catch on from Monday to Friday. I swear that the learning curve is exponential. I think a lot of that [learning growth] is because of how we structure the course, because we decided to be together every single day.
That makes a huge difference. Because we can look at these markets every day. We can be on live sessions every day. We can manage these trades from start to finish and throw them in Telegram and do it together with our broker platforms live in session. That’s awesome.
And again, FX. I run a Flex Trading Room. I’m in live sessions on Monday, Tuesday, Wednesday, Thursday, and Friday between YouTube and my Flex Trading room. I don’t place trades every day in Forex. We don’t place trades every day in Equities on Demand, but we are building and planning. We have a process every single week, but there’s never a dull moment.
“Tyson, I love it because the trader in me is so satisfied with having stuff to manage, watching things work. But all we’ve done is stick to the rules, stick to the process, stick to the formula. And it’s [enabled us] to make a 10% return on a decent amount of capital without owning anything.”
And it’s just incredible. In the back of my mind, I’m thinking, “Man, this market’s going to have to crash at some point this summer.” We keep thinking that. But you know what, who cares? I’ve got friends of mine that manage millions of dollars and they’re not bearish yet.
They’re going to ride this train as long as they possibly can. They think that the environment right now is so conducive to risk-taking and so much money is forced to come into these markets every single month. Look, at some point they’re going to be wrong. The conspiracists out there and the doomsday preppers and all that crap, they’re saying, “The market’s going to tank, the market’s going to tank.”
And then when it finally does, they’ll say, “See, I told you.” But they’re losing money right now. Right. By just waiting and waiting and waiting and selling newsletters on how the world’s going to end, that’s fine. But we’re actually trading [in this market.]
Clayton: We’re doing it with real money, real accounts. So I want you guys to write down something, Chris, because I want to take this back.
I want to really encourage everybody to understand [this point.] We’re going to teach you it all. We’re going to teach you equities and options and all this kind of stuff, but I want you to write down this. On one column, just type one line and then a space and then another line, write 332%. Okay. And then type space, 11% and then type space, 0%.
And then in another line, down, right, type 185%. Okay, type 0% and -6.4% under the 0%. If these were returns in your account, guys, would you rather be line one, the top line or the bottom line? You have an opportunity upside of 330%. If the stock breaks even, you make 11%.
If it goes down, you basically make zero. The second person could make up the 185%. If the stock goes nowhere, it makes 0%. And if the stock goes down, they lose 6.4%. Every person in this room is saying, “Aw, man. Obviously I want to be the top person.”
Also, this is a trade we’re going to talk about tomorrow. And we’ve already talked about this, but we’re going to mention this and I’ll make sure you will know what stock it is, Chris. I’m going to save this for the [next Equities in Demand session]. But this is a trade where the trader number two has to risk $1,400 to buy 100 shares.
Trader number one only has to risk $810. They risk less. They make more if the market goes up, down or sideways, guys. If you understand even a fraction of what I just said, that’s the power of understanding derivatives and understanding options. [You have that power] no matter what stock you guys hold, unless they’re penny stocks. We don’t deal in penny stocks.
I’m sorry. That’s just not our game. Right? I don’t deal in Doge and I don’t deal in penny stocks. Sorry. But almost every stock you guys own, I’ll bet you that Chris and I can help you buy at a better price and make more money if the market goes up, down or sideways. If you guys love that, then let me know, type in a “yes.”
If you love that, because that’s the point. That’s it. That’s what we do. Please write this down. Everybody write this down. Risk less, make more, up down sideways. I don’t care if you’re trading cryptos, real estate, pencils, toothpicks, stocks. That should be your goal in everything you trade and invest in — risk, less, make more, up, down or sideways, Chris.
Pulver: And just to illustrate that, Tyson, we can go right through this same thing. If we had a stock trader on the left. I had a feeling, this is what you’re talking about. So, this is what we’re talking about. Trader one is just the stock, right?
You buy 500 shares at $17 target $40. I mean, Tyson, if you want to go through it, that’s totally fine. I know we have about 13 minutes before we pass it back over to Aaron, but I think we can get through this today.
Clayton: Yeah, for sure. Let’s just break this down. This is a really important slide. because again, I want you to overcome your skepticism a little bit. Overcome the concern that you may have a learning curve, because I think there might be some people out there saying, “Yeah, but man, this seems complicated.”
“[Trading stocks and options] can seem complicated on the surface, but once you start to understand the processes, then it’s easy and it’s worth it. And that’s the biggest thing. If something is complicated to go through at first, but the end goal is worth it, then I believe we must do it.”
Right. Even if it’s a little complicated, even if it’s a little hard, it’s still worth it. So, we can get you [to understand how to trade].
Pulver: All I want to say is one more thing on that topic, traders. If you’re in this webinar right now and you have taken on the journey of learning Forex, then [learning] stocks and options, you’re talking about a level playing field. If you’re willing to put in the time and energy to learn how to trade Forex, [then] stocks and options — I don’t want to say that it’s easier because just like everything else, there is a learning curve.
Right. But since we started Equities on Demand, I’ve made more money [in Equities on Demand,] in a month than I have in Forex. I’m just gonna throw it out there. Now, that’s for the amount of money that I’m trading in Forex versus stocks and options. Again, my Forex journey is that I trade from January to December.
I try to make as much money as I can on the best optimum setups. I’m a very patient trader when it comes to Forex. Traders in my Flex Trading Room know that. Stocks and options, like I said, they fulfill the trader in me because I know that we have trade setups every single week for some nice steady income. It’s like a piece of cheese for me.
“I know that we’re not breaking any rules. I know we’re not doing anything crazy, but the fact that I can place a trade with high probabilities and see some cash rolling in, that’s a good feeling.”
And to take that a step further, how many of us have been in a bad trade in Forex? How many of us have been in a drawdown in Forex?
Every single one of us has. What gets annoying is sitting in a drawdown for a month, waiting for a trade to pay us for three months sitting and wondering, “Why the heck the dollar is not moving and blah, blah.” But again, I’ve sat in trades for months in order to pay them.
Not necessarily a big drawdown, but I’ll sit in bad trades and I’ll sit in trades where it’s like, “I am going to make this trade profitable because that’s my plan.” And so let’s say that we have a flat time in Forex, but we have, I’m not going to say ‘super profit.’ Let’s say, we have enough to generate returns.
And so we can just offset it. Maybe we’re going to have a great couple of months in Forex coming, but we can have steady income and stocks and options. Maybe we have a flat month in Forex, we can have a steady month of stocks and options, right? So there’s no reason for us to sacrifice. If we’re struggling in one asset class, we can make up for it elsewhere.
And that to me is super important to be a diversified trader. And you’re all here to do it. You’re all here to trade.
Clayton: Yeah. And also I’ll say this just on a personal note. My Forex trading, I look at as, most of the time it pays for my day-to-day living. It’s going to pay for my gas, my gym membership, my Netflix membership, all that kind of day-to-day stuff. Let’s say I want to own a beach house someday. What’s going to pay for my beach house? My stocks, my options are what’s going to pay for it. Maybe it’s not my day-to-day stocks and options, but it’s the stocks that we’re looking to get into that I believe could be the next 20X, 30X, 40X stocks.
It’s the stocks like Walmart, that if you would’ve bought $1,000 worth of Walmart in 1970 and still held the stock, you now have $16.5 million. I want you to think about that for a second. You bought $1,00 of Walmart stock 50 years ago. Now, I know some people are like, “That’s 50 years, Tyson. Why are you talking about that?”
“We live in a world where things are happening so much faster now. But how do we find the next Walmart? How do we find the next Tesla? The next big stocks that we can get into today, be patient and wake up in five years, 10 years, 15 years, and have multiple upon multiple times more money.”
So again, I keep going back to…Yes, what we do is super fun. Yeah. What we do on a day-to-day basis like pins. Hey, we have a big earnings play that’s happening right now in one of our stock plays. All of that is fun, but none of that is going to affect me 25 years down the road.
Some of the things that we do in Equities on Demand and things that you’re going to learn are going to affect you. Not just today, not just this week, but forever. They’re going to affect, it’s going to affect multiple days. Generations, Chris.
Pulver: Yeah. And you know what, and on the slide, I saw this when we brought this slide up earlier, Tyson. People think like, “[Buying] Walmart [stock] 50 years ago, I wasn’t around. I wasn’t alive.”
Well, look, you can put the same trade on Tesla in 2010. So, if you can wrap your head around 10 years ago, you could have an IPO with shares at $17. A $1,000 in Tesla stock is now worth over $500,000 about 10 years later. So it’s there and it’s real. Tesla’s a real example.
Everybody knows that. Oh, so it’s should’ve, could’ve, would’ve. What about what’s happening [right now]? Tesla has actually had its market share drop about 12%. There are [business] competitors. There are other opportunities out there in this sector. These are huge opportunities down the road. So again, we’re talking about this in our long-term spec plays.
Clayton: One of the bonuses we’re going to be giving out here [to the audience]… And you know what people, if you want to type your phone number in and get access to all of this, go ahead. I’m just going to say it now, type your phone number. One of the big bonuses, Chris, is our scanners. And, we’re going to show people how we find trades.
So there’s what I call bubble stocks, right? So, all right. And by the way, there’s still massive growth in Tesla, right? There’s still massive growth in Amazon and Facebook and all these amazing stocks, but how do we find the [best] stocks? So here’s how it works. There are trillions of dollars that have a mandate to buy stocks.
They must buy stocks. And a lot of these trillions of dollars must buy stocks in a certain group, a certain cohort. So they have to buy S&P 500 stocks. Maybe they have to meet certain market cap requirements or certain volume requirements. So how do we find the stocks that are not quite in that exclusive list yet, but are on the bubble?
So the S&P 500 has [listing] requirements. You have to have X number of quarters that are earnings positive. You have to make money for X number of quarters. You have to be a certain size. You need to have X amount of volume to get into that group. Which stocks are getting really close to being in that group, or maybe a little bit outside, but in the next year, two years, three years are going to be a part of that group?
We want to catch them. When they’re $10 a share and they’re under the radar, nobody knows about them and they work their way into becoming a part of that group. So in the next five years we wake up and now everybody is talking about it and we’ve been invested in it over the last five years. That’s what we want to do.
And we set up the scanner, some of the scanners to be able to help with that, Chris, which is awesome.
Pulver: Yup. And I just put it [on screen], Tyson. So I know you weren’t in the live session with me this morning, but we literally watched Pinterest today go up a dollar during our session. And then, so I was chasing, I was manipulating the spreadsheet.
I’m like, okay, we’ll start bidding at $76.50, we’ll start at $77. It’s like a bidding war going on between Pinterest. I think we called it right with a $77.50 bid at the money. So looking forward to tomorrow’s report, which comes out today at four or five,
Clayton: Pinterest stock’s already down six and a half percent.
Pulver: I was just going to say, it’s like, after Michael. We’re already down for that hit tomorrow morning when we get it and we’ll manage these trades when the opening bell hits. So I’m looking forward to it, absolutely.
Clayton: Chris, if you want to go back to that slide, I’ll just run through this real fast. Guys, if you want some of these bonus scanners, if you’re like, “Man, I would love to spend time with Chris and Tyson every single day, get all of their strategies every day, bottom fishing, power play strategy, the master blaster.”
We also haven’t even really dove into this yet, but in the next few weeks, we’re going to really dive into passive income. Chris, I shared with you that diagram that we’re going to be talking about here in a couple of weeks, which is absolutely an amazing way to buy stocks at a discount and generate some nice returns.
But I want to talk about this, guys. So again, thank you for those that have typed your number in, Larry and Franklin and Barbara. Thank you. But let’s look at just an example of two traders.
You got trader number one, who has an $8,500 account and says, “Oh man, I want to buy this stock.” And so they buy 500 shares of the stock. It’s trading at $17. They buy 500 shares and the stock goes up, let’s say their price target is $40. The stock goes up, then that trader makes $11,500. They did great. They made a 135% return. The stock goes up only to $20. It’s still a really nice return, but if it goes to $20, then the trader makes $1,500. That’s a nice 17% return.
The problem is this isn’t a dividend income stock. So if the stock goes nowhere, then the trader loses out. That’s a problem too, because you have opportunity costs the trader made [in getting 0% return,] but that happens, okay. Here’s where it gets real. Let’s say the stock goes down to $15, that trader just lost a thousand bucks or 11.75%
To make it even worse, let’s say the stock goes down to $12. It just tanks down. Now, that trader’s down $2,500. They are down almost 30%. Now, this is a scenario that could happen for the stock trader, right? We have to be prepared. It could go up, down, sideways, wherever. What if instead of buying the stock, Chris, we were able to use derivatives?
We were able to set this exact same trade up, but with options. So the trader who has $8,500 says, “You know what? I’m going to do it the smart way. I’m going to take the same trade, but I’m going to actually use options. And I’m only going to have to put up $4,500. I’m going to put up $4,000 less than the stock trader. “Here’s what happens in that scenario, guys. Now, if I had to put up $4,500, what do I have? I have that $4,000 still available sitting there risk-free. I’m not risking that money. That’s awesome. Now, think about this. The stock goes up to $40, hits the target. Instead of only making 135%, which is a great return, the options trader makes 153%.
So here’s a quick question, everybody. Is the options trader – number two -making more money in an up market? Yes. Is the option trader – number two – risking less? Yeah. $8,500 compared to $4,500. Okay. But what if the stock doesn’t go up that much? Okay. Well, if the stock only goes to $20, the stock trader makes $1,500. The option trader makes $3,000.
What if the stock goes nowhere? And this is where it gets really fun. Chris. If the stock goes nowhere, because we can go sideways, the options trader still makes a 17.5% return, $1,500. Whereas the other trader, the stock trader, made nothing. You had dead money. And if the stock goes down by five%, almost 6%, the options trader still makes 5%.
If the stock goes down almost 12% the option trader still makes five%, almost 6%. And then here’s the deal. Oh, is there never a loss? Yeah, there’s a loss. But again, if the stock tanks down, a 30% loss is a pretty big tank. If it tanks down, the stock trader loses 30%, while the option trader is only down 12%.
So again, here’s the question, everyone. Are we risking less to make more up, down or sideways? Yes or no. And this here is the crux of what we’re trying to teach everybody, everybody in this room. This is what you have to learn how to do. And by the way, you should learn how to do this in every asset class that you trade.
Here’s the last thing I want to say real fast. I’m telling you guys right now. I’m going to let you guys know [that if] you join [Equities on Demand] — Chris, I want your opinion on this — we’re going to help traders become master stock and options traders. Do you agree with that?
Pulver: I one hundred percent agree with it. I think that Tyson and I, we get a lot of benefit out of [Equities on Demand] because there are only so many ways that we’re going to trade the Forex market. We can create systems every single month.
There are only so many systems we can trade because there are only 28 currency pairs. [But] we’ve got thousands of options and stocks. Or a thousand different symbols and stocks. There’s never a dull moment. We’ve got strategies for up, down and sideways markets.
And I think, Tyson, this is a blessing to really be able to do this [program] because it’s re-energized me to have more live sessions and more teaching opportunities than we’ve ever done before. And we’re still cranking it out with tons of knowledge.
Clayton: I’m working harder than I have in a long time and I’m loving it.