Top 13 Questions Beginner Traders Ask

get started here I'm going to do a Q&A
and uh my thought was that well the
Market's closed today so I'll come on
here do live stream and give you guys uh
some time so uh I hope you guys are all
doing well today and I'm going to jump
right in with the first question but
those of you guys tuning in for the live
broadcast please post questions in the
comment stream and I'm going to look
through them and I'm going to try to
answer the questions I think are going
to be the most uh relatable to the most
people so everyone uh tuning in and
listening to this broadcast will get
some great value out of it okay so the
first um topic that I'm going to hit on
which is a question I just saw in the
comments last night um is about the
Brokers I'm using for my small account
challenges okay so many of you guys know
in January I started a brand new small
account and I small account challenges
are something that I've been doing for a
long time and one of the things I really
like about doing small accounts is that
you I feel like it's a protected
environment and I actually almost would
say I think everyone at some point
should do a small account because when
you fund an account with $500 or $1,000
and you're trading in it you may make
some mistakes and that's fine the the
damage is low the the total amount that
you can lose is very minimal whereas a
Trader perhaps who has the money could
fund an account with 25,000 30,000
$40,000 $50,000
and a mistake there could be
lifechanging and I feel like as a
beginner Trader you don't want to
position yourself to ever make a mistake
that could be lifechanging you want to
keep the the guard rails on it's just
like a beginner driver you don't want to
give a beginner driver a Rolls-Royce or
a Ferrari or something like that to
drive as their first car because they're
going to make mistakes everyone does
when they get started you want to you
know learn to drive in a beater doesn't
really matter if it gets scratched or
dinged and trading is sort of similar
you want to start trading in a safe
environment where um where where the
total impact of you know a a mistake is
is very minimal and I think the other
thing that I like about trading in a
small account is that if you make a
mistake most likely if it's a big
mistake your account's going to be
deactivated until you add more money and
that sounds like a bad thing but if you
only lose $700 or something like that
bear with me it's actually a good thing
because it forces you to take a step
back and re-evaluate and ask yourself
what am I doing right now that's working
what am I doing that's not working
whereas if you had5 or $10,000 you
probably wouldn't take a step back you
would keep trading you would keep
spiraling and you would get more and
more emotionally invested so a small
account really forces you to be very
disciplined from a very you know from
the very beginning as a Trader to manage
your risk to bail out quickly and to
focus on one trade at a time sometimes
Traders with big accounts will be in one
trade and it's a losing trade and then
they're just like well I'll hold that
and I'll go focus on something else and
that's really not a good habit as a
beginner okay so um so Ike and Dan yes
this is a live broadcast so I'm going to
answer questions um that you guys have
uh here okay so let's see so I'm going
to scroll up in the chat feed um to one
of the last questions that I saw uh
let's
see all right so so question here Ross
I'm using the offshore broker that
you're using any tips on how to save on
fees it seems very pricey for me for the
first month okay so um so what I've
noticed with the broker um that I'm
using and I'm going to let's see switch
this roll this over to this other side
um I'm using an offshore broker as well
uh same broker it sounds like that
you're using and and the idea with this
broker is that I can deposit uh
$500 and I have uh six times leverage so
that means I have
$33,000 in buying power which is great
all right so now if I see a stock just
for instance at $6 a share I could buy
500 shares for $3,000 now if the stock
goes up to$ 650 I can sell for a profit
of
$250 and in one day my account's up 50%
even though the underlying stock only
went up about a little less than 10% my
account's up 50% because I'm using
leverage now just as a comment on
Leverage for a moment um those of you
who may trade futures or Forex you know
certainly in Forex Traders use a
tremendous amount of Leverage and the
reason they use a lot of Leverage is
because the amount of movement in the
underlying asset a currency pair like
the US dollar to the euro the actual
amount that it's moving is really very
small we're talking about fractions of a
penny so when the moves are that small
yes you still have a chart and you're
going to look at the chart you're going
to see you know that the chart's moving
you know up or down you have a bull flag
and and you've got volatility but you're
talking about a total range of maybe not
even a penny fractions of a penny so
similar with trading uh an actual penny
stock in order to make money when
something has that small of a range you
need to take more size and so what a lot
of traders in Forex do is they'll use
leverage up to 100 times leverage
sometimes even higher in order to make
profit on such a small move so when you
have a small account leverages is common
practice however as a beginner Trader as
a beginner it's best not to use leverage
at first it's best first of course to
trade in a simulator prove profitability
and then start trading with tiny size
even just one share or 10 shares again
again prove profitability with small
size and then increase as you go now
when it comes to the
commissions so the commission structure
um let's see with the broker that I'm
using it's if you buy a th000 shares
their current commission structure is uh
0.00 uh five I believe it so it's half
of 1 penny for every share you trade uh
which is actually this is not bad so so
a th000 shares one if you were paying
one penny on a th000 shares you'd be
paying 10 bucks right so half a penny
would be $5 um and and for me that's
tolerable um you know so it's $5 to buy
$5 to sell now I I'm I am aware of the
fact that they're actually doing some
changes um with the commission structure
depending on new accounts and older
accounts so anyways um but what I've
generally found is that about 10% of my
profit goes to commissions so on a day
where I make $100 in a trade uh usually
I'll have about $10 in commissions all
right so the problem here though is that
if it's sort of based on cents per share
because the commission is based on cents
per share so if you're trading a stock
and you get in at $5 and you sell it at
52 well in that case you only made two
two cents uh per share and because half
of a cent is going to the commission on
the buy side and then half is going to
Commission on the sell side of that
transaction you're actually going to
have about 50% of your profit go to fees
and commissions so in other words I try
to only focus on trades that I think
have the potential to go up 15 to 20
cents a share and then paying
approximately 1 cent in commission per
share is only you know is less than 10%
of my total profit so that's the way I
think of it the problem here is that if
you were trying to trade a penny
stock well you know if you're trading a
stock that's 11 cents a share you need
to get 10 15 20 cents to really it's not
going to work so so for me I found that
the sweet spot for stocks to trade where
I can make enough that the commission
doesn't become burdensome is really
stocks between $5 and $10 a share two to
10 is fine uh but a little bit on the
higher price range where I can
reasonably get 15 20 maybe even 50 cents
a share on a good trade so naturally
some of my best trades so far during my
small account challenge have been when
I've been able to get a um 25 35 or 50
Cent even a dollar a share on a
move okay so thank you guys uh who have
been posting questions in the chat feed
appreciate it
okay so what's my opinion on trade zero
as an international broker uh trade zero
is fine as an international broker it's
a popular broker that a lot of people do
use um one of the things that I like
about trade zero is that for um for
international Traders they have a
commission structure where it's free you
actually pay no fees as long as you're
using a limit order uh and and that's a
non-marketable limit order so as long as
you use the right type of order you can
get totally free commissions with um
trade zero so I I think that that's nice
but they do enforce the PDT rule for us
Traders so that's a little bit of a um
an issue there okay so let's see next
question um let's see just scrolling
down okay
so um where should a beginner who can't
afford uh expensive courses start with
their education in order to become a
profitable Traer so if you cannot afford
expensive courses you know that there's
courses out there there's courses that I
have there's courses other people have
but you just you're like I can't afford
that okay I'm going to give you two
recommendations the first is don't trade
with real money yet that's an important
one sometimes people will say I'll buy
the Course once I make my first x amount
of money once I make my first $10,000
but it doesn't work that way anywhere
else you can't like as a doctor you
can't operate on people until you make
your first 10,000 and then go to medical
school right you can't fly a couple of
planes and then go to flight school you
won't have the skill to be able to do it
successfully so it's a misconception to
think that I will make a little money
trading and then I'll invest that in my
education because you won't make money
until you're educated okay so now the
question is how do I educate myself on a
budget how do I essentially educate
myself for free what I can tell you is
that there is a tremendous amount of
content out there on YouTube there's a
lot content if you Google search the
problem for you is sifting through what
is credible and what is not because
there's a lot of people out there that
put out information but not all of it is
credible not all of it has been produced
by someone who actually knows what
they're doing so for instance especially
in the last two years there's a lot of
people that have tried to make a living
as a as a like you know social media
influencer in the financial space
because there's a lot of people that
watch these videos
so there's incentive to make content
just to try to make money but they're
not actually Traders they're not
profitable Traders they're just content
creators and that's a problem because
then anything they say you have to take
with a grain of salt because they don't
even make money trading they're trying
to make money as an influencer they're
not making money as a Trader now I'm
different because you know of course my
broker statements are audited and
they're on my website so you can check
out them at any time so so that's the
first thing so always ask is the person
person I'm learning from credible are
they qualified do they actually make
money trading so number one what's their
personal
profitability so if you don't know what
their personal profitability if they're
profitable at all uh then that's that's
a problem you shouldn't be probably
consuming content from that person it's
going to send you in the wrong direction
then the second question when you're
looking at uh content out there is does
the strategy meet that this person is
teaching meet with my risk profile now
you might find my strategy doesn't fit
your risk profile cuz I'm too aggressive
or you know whatever the case is I trade
small caps and you don't want to trade
small caps and that's fine you got to
choose uh an educator that meets sort of
aligns with your comfort sometimes when
I was getting started I I saw people out
there who um like you know like a Jim
Kramer or someone who's investing and is
buying you know has is holding like 40
stocks at the same time and I was like
that's not really someone that I should
learn from because there's no way I'm
going to be able to do that with a small
account right so whatever they have to
say as interesting as it may be is not
really relatable or helpful for me right
now because I can't apply it in in my
own learning so so this is your big
challenge but once you find somebody or
a few people who are credible qualified
and their strategy aligns with yours I
would watch all of their content I would
watch every single episode that you can
now the problem with my content that's
on YouTube is that it's not um it's not
organized into a course there's not we
don't have the quizzes we don't have the
PDF handouts and it's not everything
that I have in my course but that's also
kind of the whole thing is I have a lot
of free content on YouTube but it's sort
of disorganized so if you don't mind
going through and just trying to weed
through all of it to find little pieces
here and there then you should do that
because it's free and you can learn a
lot just by doing that it's not the same
as going through the structured
curriculum but you can learn a lot I
would also encourage you to read so if
you want some recommended reading I'll
share a couple books with you of course
course you know I've got my book how to
day trade the plain truth we've got um
from a educational standpoint um with
trading psychology trade mindfully by
Gary Dayton that's a book that I really
like um this these two secrets of the SS
Bandits and dark pools those are more
like entertainment they're not super
relevant for your trading um thinking in
bets though this is a good one for
trading psychology and quit is also a
good one and the Candlestick course by
Steve niss if you can find a used copy
this is also a decent book um it's it's
like $50 $75 $75 us 82 in Canadian um
well this was many years ago but anyways
um this is way overpriced for what it is
I mean you just watch my Candlestick
videos honestly that that'll be fine um
but those that gives you some
recommended reading so you just have to
do that and you have to immerse yourself
in oops you have to immerse yourself in
watching as many of these episodes as
you can these q&as but also my full
length episodes just to continue to
learn and learn and learn and then
practice in a simulator don't put real
money on the line until you've first
proven you can make money in a simulator
and is it going to take you longer than
someone who's going through you know a
sort of rigorous curriculum with like a
a proper learning path maybe it will
maybe it won't it just it probably
depends in part on your own aptitude and
your ability to be
self-motivated so hopefully that's
helpful um and again you know if you get
to a point where you can save some money
for your first trading account obviously
um you know continue saving continue
investing in your
education okay so let's see next
question um so thank you guys by the way
uh Hey anyone who's tuned in here for
the live broadcast uh do me a favor real
quick if you hit the thumbs up I would
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share this stream share it on Twitter
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people check it out we're going to be
streaming here for another like 45
minutes or so I'm going to do about an
hour long
broadcast okay so let's see
um Can the starter program be a good uh
step for a new Trader it Connor so yes
the warrior starter course that we have
is literally called a starter for that
reason it's a great it's a great starter
it's a great introduction into the
trading uh courses that we offer here at
Warrior trading we have the warrior
starter and the warrior Pro Warrior Pro
includes the starter but some people
want to just dip their toe in so they
begin with a starter and then they
upgrade to the pro and it's that's not a
problem at all so you could do that
anytime okay so um let's see so how to
manage risk on a swing trade um I don't
think I'm going to cover that in this um
broadcast because I think most folks
here are interested in learning more
about uh day trading so here's a
question do I day trade um under a
personal account or an LLC or an es Corp
so um
how would you like me to tell you about
how I pay zero income tax on my trading
profit zero income tax okay so this is
how I do it many of you already know
this but I'll share it with you anyways
but I'll also share with you a couple
other ways you can pay zero income tax
on your trading so for me what I did uh
I I funded a small account back in 2017
was $600 $583 15 right I grew the
account up to 100 Grand in 45 days by
the end of 2017 the account was at
$335,000 let's jump on the Whiteboard so
it crossed in 2017 I was at
$335,000 now in 2017 the max
contribution to a retirement account was
$6,000 so I deposited $6,000 into a
traditional
IRA I then converted it into a Roth IRA
this is called a backdoor conversion at
any time you can convert a traditional
IRA to a Roth IRA
what you do when you do this conversion
is you pay income tax on the
contribution which was $6,000 so I paid
income tax on $6,000 it became a Roth
IRA I then contributed I did that uh two
more years until I had $188,000 in total
contributions so $188,000 in total
contributions and then from that level I
had to use a US broker an international
broker won't let you trade in a Roth IRA
or or a traditional IRA because they
don't support those so I had to a US
broker once I got the account above
25,000 I just started trading actively
and I kept trading and trading and
trading in that account cuz here's the
thing that's really
incredible all of your trading profit
you could you could do all of your
trading you could do in a retirement
account which means you pay zero income
tax on the on the gains right now and if
it's a Roth IRA you'll pay zero income
tax when you withdraw that profit so
when I turned $583 into 335,000 I had to
pay income tax on the 335,000
right I I traded it in a taxable account
I had no choice and so I deposited 6,000
the next year in 2018 I made half a
million all right so 500,000 and again I
took out $6,000 for my 2018 contribution
and I had to pay income tax on 500 Grand
the next year in 2019 I made I think it
was like
370,000 something like that and again
had to pay income tax on
$370,000 this is a lot of income tax but
but I got that contribution so then
starting in 2020 I began trading in my
Roth
IRA and at that time I was doing half in
a Roth IRA and half in an LLC account I
was doing 50/50 because I wanted profit
I wanted to grow the Roth IRA but I also
needed to make actual money because I
had things I wanted to to buy and bills
that I needed to pay you know with my
actual trading profit I then got to a
point where I said you know what I'm not
going to trade in the LLC anymore
because I feel like here's the
thing it's an incredible opportunity
that you can earn money in a Roth IRA at
the rate that we're able to do if you
become a successful Trader with my
regular like like when you have a
regular job if you have a W2 you or even
if you have a business you can't put
your business into a Roth IRA there like
you have to pay income tax on the profit
you make running a business so Warrior
trading as a software company I have
income and I have income tax I pay on
and there's nothing I can do about that
YouTube I get a little bit of income on
YouTube and I have to pay income tax on
that there's nothing I can do about that
but my trading profit I don't need to
pay income tax on it if I want to trade
in a Roth IRA so that's the first thing
I do now sometimes I hear about people
that go to kind of extreme lengths to
try to avoid you know paying their tax
they're like oh I'm going to buy oh well
I I heard if I if I you know you hear
about these very wealthy people who will
like buy an airplane you know I'll buy
an airplane and then I'll write it off
against my income now I own like a $3
million airplane or something or they'll
buy they they'll they'll just find
things they can buy that they can then
expense against their income and I kind
of think that um one of the most obvious
things that people can do although most
people don't want to would be to move to
Puerto Rico because if you move to
Puerto Rico you won't have federal
income tax you'll have you'll have tax
in Puerto Rico but you have US federal
income tax and you won't have state
income tax and so a lot of people who
are making serious money will move to
Puerto Rico and they'll live there for 6
months out of the year six six months
and one day out of the year and then all
of a sudden they're income then here's
the thing you're you still have a US
passport you're still a US resident
you're you're a Puerto Rican resident
but you can move back to the US at any
time you're not giving up your US
citizenship now again this isn't going
to be for everyone but if you're someone
who's making millions and millions of
dollars and you're paying half of that
in in tax like you live in California
or you live in New York and you're
paying nearly 45% of your profit in tax
well think about it right so again it's
it's to each their own and of course the
the the next level would be to move to
like you know somewhere that has no
income tax at all like Costa Rica but
then I'm pretty sure you have to give up
your us CI citizenship if you do
that so um so so yeah so Puerto Rico um
anyways or Roth IRA
I think it's a good idea so that's what
I would do um okay so let's see so next
question
um so and and I guess to fully answer
the question with the LLC um I I
actually earlier in my career I used an
es Corp um and I prefer an escorp
because um and this is going to get a
little complicated but but I'll just
I'll just go with it for those that are
interested so with an es Corp if you put
your trading account in an es Corp um
it's a corporation with an s u you've
done an sc Corp election so if you make
let's just say you make a million doar
in your es Corp um sorry you make a
million dollars in your es Corp um one
of the rules is that as an es Corp you
have to pay yourself a wage so let's
just say you pay yourself a wage of
$1,000 you're going to pay W2 income
taxes on um the 100,000 but then the
company can distribute the remaining
$900,000 just for instance you know
maybe after fees and stuff are paid as a
distribution this is called um a K1 and
on a distribution you don't pay um
Medicare or social security so you're
actually going to pay you're you're
going to pay less money on the income uh
from that $900 ,000 and then of course
all the expenses that you have with
running the business go through the es
Corp it's a little more complicated
though to set up because you have to put
yourself on like you have to set up get
up little payroll for yourself do
withholding do a W2 um you know so it's
kind of like to get the accountant an
attorney to help you sort of set this up
you sort of have to be making at
least I don't know a couple hundred
thousand I would say um but if you get
to that level it makes sense um I I
don't think an LLC would really achieve
um the same result I I think the only
benefit of an LLC would be be that your
asset of which is your a trading account
would be protected from liability um you
know which God forbid like you got in a
car accident someone tried to sue you or
something like that your your LLC your
business would be protected so um
anyways I think that that's that's why
some people would use an
LLC okay um doing a C Corp would you
would be subject to um double taxation
so most people would do an es Corp but
you know I mean again there could be
scenarios where a C Corp would work
depending on what you're going to do
with the proceeds and how much you
actually need to pull
out okay
so let's see
um okay so next question so thank you
guys by the way who are tuned in uh
appreciate you guys who have just gotten
tuned in in the last few minutes to hit
that thumbs up if you haven't
already the thumbs up is um great for
the YouTube channel oh yeah so Jordan
says Dubai and Singapore are places
where you keep all the profits if you
live there so you know the thing of
course with a lot of people is like well
but you know my family well if you're
making millions of dollars you can your
family can fly on a private jet to come
visit
you okay so
let's see
um thank you guys appreciate you guys
being here I'm just looking for a good
question that I think everyone will um
benefit
from oh thank you for saying that yeah
my so someone just mentioned that my um
day trading course is listed on
Investopedia as um the most
comprehensive day trading course yeah
thank you for saying that and you're
you're right it
is all right so Joshua says my first
month of trading and doing it your style
I've made $3,000 I'm limited to a cash
account how can I get around this I
don't have an overseas account or a non-
Us address to apply for one okay so look
first of all congratulations $3,000 in
the month is great that's a great start
now make sure you're taking it slow one
of the things that um
one of the things that that are really
important is that you recover from your
first draw down because what happens to
some Traders and hopefully this won't be
you but just just so you know what
happens to some Traders is they have a
little bit of progress and some might
even say it's beginner's luck and then
that progress kind of runs out they
start to have a little bit of loss they
give back half they start to get
emotionally fueled they get frustrated
and then they start trading and getting
more and more aggressive they start now
going red on their Venture of learning
how to trade trade and this is the point
where some Traders will just exit the
market and they're gone they're like
well that was interesting and I'm done
and now that I don't want to see happen
to you so what I would encourage is that
when you have your first draw down and
you're going to have it at some point
whether it happens now or it happens in
a month or five months or whatever
you'll have your first draw down at some
point so when you have your first draw
down number one reduce
size this is the opposite of what your
brain's going to tell you to do your
brain tell you to scale up so you can
recoup your losses as quickly as
possible you got to do the opposite most
people lose money so do the opposite of
what most people do reduce your size by
reducing your size you're going to stop
the bleeding so you don't draw down even
more all right now you're going to start
trading with smaller size for a little
bit and you're going to need a little
period of rebuilding confidence after
taking a couple of losses so trade with
smaller size stay focused on a quality
setups reduce size and reduce the number
of Trades to F but you're going to do
that by focusing on the highest quality
setups it's going to reduce the number
of Trades you're taking now once you've
made back about half the loss then start
to uh increase share size again and
start to increase the number of Trades
so once you've gone through your first
draw down and recouped that loss that's
when it's time to consider scaling up
now coming this year on May I think it's
28th we're changing to T1 settlement T1
settlement means your cash account will
settle overnight so currently with a
cash account if you have let's just say
$5,000 on Monday you could buy 1,000
shares of a stock at $5 you could trade
the full
$5,000 but then on Tuesday you have no
funds you have no cash because it hasn't
settled then on Wednesday you could
trade with the $5,000 again plus
whatever profit or loss from Monday but
then again on Thursday no trades so
that's because right now we're on a T2
settlement it takes two days to settle
but it's going to switch to T1 on May
28th so starting June 1st essentially
you'll be on T1 settlement which means
you could trade with your full balance
every day you can trade 5,000 on Monday
Tuesday Wednesday Thursday Friday so
you're going to be able to trade twice
as much in a cash account so that's
something to get excited about that's
coming soon it's not that far away so if
you're trading in an account with like
Weeble or Robin Hood or think or Swim
you have no commissions which is
compelling right you're just limited
right now because if you want a day
trade you would need 25,000 because of
the PDT rule Rule now International
Brokers depending on where you're
located there are some that don't
enforce the PDT rule so the way to get
around that is either you have an
international address and you can say I
I'm an international resident I'm not a
US resident which you can't lie so if
you're not a US resident then then it's
not going to work if it's going to work
if you're a US resident then you can't
do that so the broker that I use I'll
put a link in the description I don't
like to share the brokers in these
broadcasts because sometimes I'll switch
the Brokers I'm going to use so people
who are watching this like a year from
now because I'll leave it up all of a
sudden I'm giving them the wrong
information so the link in my in my
pinned in my comments will have the link
to the broker that I'm currently using
anyways with that broker uh I can fund
an account with $500 or $1,000 and they
offer leverage and they don't enforce
the PDT rule which is great uh
unfortunately these Brokers still charge
a commission so you're going to pay a
bit of money in fees and commissions on
that broker and the question there is is
it worth it and if it allows you to
trade you you know I let's just say 15
or 20 times in one
day then you're going to be rolling over
that money at such a rate that I would
say it is worth it right but that's
that's easy for me to say because of my
experience level the way that I trade
and so on and so forth there is a real
commission and the commission is well
there's a commission on every trade you
take plus there's a platform fee which
is about $150 a month so if you really
only have a tiny account it may just not
make sense for you right now it may make
more sense to keep trading in um just
your standard um you
know like cash account with Weeble or
Robin Hood or thicker swim or whatever
it is so anyways um I'll put the link
here um I'm going to just post it in the
comments to the international Brokers
that I use and you can check that
out uh but anyways congratulations um on
that first um month and that nice profit
that's really
great okay so let's see so next question
H thank you guys uh throwing questions
in the um in the chat feed here I
appreciate
that okay so let's see
um all right so I'm going to look for
another uh good question so Josh can you
talk about the difference between
trading in a real account versus is
paper trading so I encourage people to
um I always encourage people to paper
trade as they're getting
started because the thing with paper
trading is well the thing with getting
started is that you're going to make
beginner mistakes you're going to press
the wrong hot Keys you know you're going
to you're just going to Fumble because
that's what it's like getting started
just like learn to ride a bike so you
have training wheels you have a helmet
maybe you have knee pads things like
that when you're learning to ride a bike
because you you know you're going to
fall so you might as well protect
yourself from the
press the buy button for 100,000 shares
you'll fill 100,000 shares when in
reality you wouldn't have been able to
fill that many so some people will get
an artificial sense of confidence that
they're going to start making like 500
Grand a day when they flip the switch
and that's not realistic because of
slippage in the market so I would
generally trade in a simulator with like
100 shares and just use that as like
this is just I'm not trying to trade
with big size or make big money I'm just
trying to show that I can make at least
15 to 20 cents per share per day so if
you're walking away at $15 to $20 a day
and you can do that every day for a
month then do that exact same thing with
real money with 100 shares see if you
can make $55 $20 a day with 100 shares
with real money if you could do that for
a month month two go 200 shares now
you're making 40 you know3 $40 a day
month three go to 300 shares 400 shares
500 shares next thing you you're trading
1,000 shares if you're making $100 $200
a day with 1,000 shares you're making
$50,000 a year
go 2,000 shares this is the right way to
scale up it's the right way to scale up
because you're acclimating yourself to
experiencing loss because one of the
things a simulator can't replicate is
the true emotion that comes with losing
money so when people train a simulator
with 5 10 15,000 shares and they're like
yeah I'm going to trade this way with
real money but then they do that for the
first time with real money and they're
down 10 grand in one day big emotions
come out you could lose half your
account in one day and then all of a
sudden you start a spiral
so you know it's just my two cents but
some of my uh students at Warrior
trading some of our members who have
done the best have been members who
traded in Simulator for a long time with
small size Justin one of our members
who's made over a million dollars he
traded with one share just one share and
because it's proof of concept it's not
about making money in those early days
it's about proving consistency by how
many cents per share you can pull out of
the market because that's what's more
scalable cents per share if you're doing
15 20 cents a day you know you could
scale the share size right but if you're
trading 100,000 shares and you're
pulling two cents a day out of the
market and you're like oh look I'm
making $20,000 a day it's not it's not
going to uh carry it's not going to
carry
over so so yeah I would say the two
issues uh with a simulator is that you
can't simulate slippage and it doesn't
simulate the emotions uh also you don't
pay borrowing fees for shorting so it
could it could you could short almost
anything but it doesn't really replicate
um that it's actually difficult to short
a lot of
stocks um okay so I'm just looking at
the comments here and the
questions
okay oh internet speeds um so from an
internet speed perspective I've
traded with terrible internet and it's
really not a problem that much because
the
for traveling well you can't have DSL
while you're traveling um but for my
home office DSL or cable even though
it's slower would be more
stable and you know so for me I I Puerto
Rico or any of these places I've had no
issue trading uh on the Wi-Fi there or
and on the internet there no issue at
all uh thank you guys uh who are getting
tuned in so so one of the reasons that
you won't see me shorting is because in
a Roth IRA you are not allowed to short
stocks
so that is a little bit of a
disadvantage of the Roth IRA you can't
short stocks and the reason you can't
short stocks is because when you short
you subject yourself to the potential of
an unlimited loss right if you short a
stock at $2 and it goes to a million
dollars a share you would have to cover
the position and in order to cover a
loss you could be forced to have to make
a contribution to your Roth IRA and that
would exceed the maximum annual
contributions so they don't let you
short at all to prevent that from
happening now you could buy puts
on a stock and profit from it going down
if you wanted to but of course you can
only do that on uh large cap stocks that
have well traded options uh chains so
for small caps you're you are more or
less restricted to trading the long side
and for me the way I think about it is
in my Roth IRA I get to keep every
dollar I make to the long side because I
have no income tax so if I short I have
to do it in a taxable account which
means I only get to keep about 55% of
the profit I make
you know but I lose 100% of what I lose
I mean right I mean you can I guess you
in theory you could write off your
losses but but no one's intending to be
a losing Trader so in practice you only
get to keep about half of what you make
now that's for me because I'm in a high
income bracket if you're in a lower
income bracket the percentage is better
right and depending on where you live
and things like
that
okay
[Music]
um so let's see uh thank you guys uh who
have tuned in just in the last uh five
or 10 minutes I'm going to broadcast for
about an hour so we've got a little bit
more broadcast um time coming up here
and I want to try to answer as many
questions as we can so thank you guys
for throwing some questions in here
especially questions that you think
other people will be interested in um
learning the answer
to
okay
so Richard says' it's so hard to make 5%
on a trade uh don't you want to stay in
for big money and I I would kind of
disagree with you on that um I don't
find it hard to buy a stock at $3 and
sell it at 315 that's 5% I don't find it
hard to buy a stock at five and sell it
at 525 for 5% I actually find that that
is much more consistent and easily
achievable than trying to hit 25 35 40%
% returns because let's just think about
it for a second you know how many times
have you seen a stock that's at $5 a
share right it squeezes up to five it
pops up to
525 and then comes all the way back down
traders who were holding for that move
to six or seven they end up stopping out
flat or even for a loss traders who are
happy to take the 5% off the table walk
away with profit traders who are
consistently walking away with profit
are traders who have lots of small base
hits now occasionally they'll take a
bigger loss because you know they get in
something at five and it does a jack
knife down to you know 460 or something
like that or or even 430 so they'll take
big losses from time to time but they're
generally going to be really consistent
about locking up those base hits traders
who are swinging for the 30 40 50%
returns are going to have longer periods
of like not getting anything and getting
small losses and then you know the
occasional big winner and then long
periods of waiting and then like bigger
winners but these long periods of
waiting can be difficult to endure and
it can be emotionally frustrating to
have 15 trades in a row where you were
up 5% you didn't take it off the table
and then you drop back down meanwhile
you're watching these base hit traders
who just keep grinding away and it's
like the turtle who's winning the race
so this is the way I trade I just focus
on base hit base hit base hit and look
occasionally I'll we'll be in a market
where I'm getting more more than base
hits because the Market's just really
strong we're seeing big moves but I'm
still focused primarily on just hitting
base hit base hit base hit so you know
that's something um that I I I just
don't think it's as difficult to hit 5%
winners um but again maybe it's the the
type of stocks I'm trading so if you're
trading a 4050 $75 stock it's going to
be a little bit
harder how can I day trade without level
two so if you're day trading without
level two
it's going to be really hard for you to
be a scalp Trader and to be taking quick
profits um you're almost going to be
forced to focus more on five minute time
frames longer time frames and even daily
time frames where the level two is less
important so you can day trade without
level two but it would be next to
impossible to do it on the 10c and one
minute time frames and to participate in
some of these really extreme moves that
we see if you don't have level
two it really is uh it's an important
skill to have because the chart is
historical context the chart tells us
everything that's already happened and
we use the chart to make sort of a
prediction of what we think is going to
happen but when we're actually looking
at the level two you can already see all
the orders that have been placed they
haven't been executed yet but they've
already been placed so now you start to
be able to create context of future
because you're like well gez the chart
looks good but on the level two I see a
1 million share seller that is that
we're going to run into in about you
know 10 cents so you already can kind of
predict the future there you know that
we're going to have a resistance there
the chart doesn't show it yet but you
could see it because it's right there on
the level two SO trading without that
information would be um you would be
missing quite a lot and if you're doing
it just because you're trying to save
money I and by not paying for level two
data I think that that's a mistake um
you know it's if you want to perform at
the level of other Traders if you want
to pull money out of the market
consistently you need to come uh to the
table with sort of the minimum level of
of tools that other people are using I
think um okay so let's
see yeah I mean there are definitely
times um when the market is choppier and
I I know that feeling of that
frustration of like oh man you know we
we had a stretch where everything that
was hitting the scanners was like super
strong and continuing another 15 20 30
40% like really big extensions and then
you know all of a sudden we kind of come
into a period where things are moving up
but then they just sort of stall out and
the first pullback doesn't get bought up
it just kind of goes lower and you know
that's a market that's going to be a
little bit more difficult to trade and I
get it you know it's but the thing is
this is the E and the flow of trading
it's not always always crazy crazy hot
it it it does um you know it's
oscillating between hot and cold just
like the tide that kind of comes in and
then goes back out comes back in and
then goes back
out let's see um by the way for those of
you guys um who are tuned in if you want
to continue
um over the weekend here over the next
few days if you want to watch um some
classes and and you want to uh join me
next week I'll put a link here for a uh
two-e trial at Warrior trading for uh 20
bucks and if you start it today then
part of that trial will give you access
to a selection of classes from my
warrior Pro curriculum so you could
spend the weekends studying and then
getting yourself ready for Monday and
then you be able to trade with me um
through Monday and and through the week
after so I'll just put a link here for
those you guys that are interested in
doing the uh that two-e trial it's $20
so I mean look I I you get free market
data during that period I'm actually
going to lose money for people that are
on the $20 trial because it costs me
more to give you services for two weeks
but we do it because we know a lot of
people are going to do the trial they're
going to enjoy it and then they're going
to say you know what maybe I'll join
Ross in his full Warrior Pro curriculum
so you know I'm happy to do it for those
of you guys who are just going to do a
twoe trial and nothing more you'll get a
lot out of it you'll learn a lot about
my strategy you'll watch some classes
and um
and I want you to have that and enjoy it
again this isn't something that is about
making money it's just trying to at
least offset the cost of you guys being
uh streaming that data for two weeks so
I hope you guys um some of you guys take
advantage of
that okay so let's see um explain how to
trade pre-market okay so trading
pre-market is uh is very simple you
could trade pre-market with really any
broker now some Brokers will require you
to change your order settings pre-market
so your order type would change so when
you're opening your actual order entry
window you know where you've got your
buy and you've got your sell button
you'll you might have what's called a TI
which is your time and force this is a
dropdown that'll give you different
options uh it might say Day by default
and you have to change it to say uh
pre-market so or after hours so you
might have to change the setting if you
trying trying to buy pre-market and your
order keeps getting rejected rejected
rejected the first thing you do is check
your time and force the next is check
the order type you cannot use Market
orders premarket you have to use a limit
order so if I see a stock let's say
trading at $5 and I want to buy you know
3,000 shares of it what I will do is
I'll write up a limit order in my order
entry window to buy um whatever what did
we say whatever let's just say 5,000
shares and I'll put the limit order at
505 so so then I'll send it I'll press
the buy button and my order is going to
go to the market and I'll fill 5,000
shares up to a price no higher than 505
so if there was only let's say 1,000
shares for sale at
$5 and at 502 there was another 2,000
shares for sale and then at 505 or
whatever there was another 3,000 shares
I would fill and I'd have a blended sort
of average of about you know 502 you
know four five or something like that
for that 5,000 share block and that well
this is the same as the way you would
fill during regular trading hours if you
used a market order it would just do it
automatically but with a limit order
you're you have to stipulate the most
you're willing to pay the reason they
don't allow Market orders pre-market is
because pre-market can be very volatile
but volatility is opportunity and that's
what I like I like volatility I like to
see stocks that are moving that have the
potential to make big moves so
pre-market we have no Market orders we
also have no stop orders because stop
orders are traditionally a stop market
order so there's a little bit of risk
there with the fact that you can't use a
stop order as a safety net pre-market
what that means is I've got to have my
hand over the button to sell so if I
don't like something I can bail out just
by pressing contrl z contrl z is my
bailout button and that order is a sell
order which does uh full position so
it'll sell my full position and it
actually will calculate bid price minus
10 cents
so it automatically calculates it so
when I press contrl z contrl z right
here it goes full position bid minus 10
sell it executes immediately so if I
have you know
1,173 shares because I got a partial
fill it takes my full position it puts
it in there if the bid is you know $4 uh
or
whatever5
$573 if automatically sends the order at
563 so it's just instant and this allows
me to get in and out very quickly so I
can lock up my losses get out of the way
if something is declining but I can also
get in something very quickly by
pressing my hotkey uh to buy which is
shift one so I press shift one to buy to
get in something that's strong something
that's moving
quickly okay
um so Z Zona you're an aggressive Trader
were you born this way or did you have
to train yourself into it you're right I
am an aggressive Trader and and so much
so that I almost sometimes feel like I
have to train it out of me because my
instinct is to be very aggressive my
instinct is to chase when a stock is
moving higher I'm buying I'm adding and
in a hot Market that's where I've been
able to make up to half a million
dollars in one day now my results aren't
typical as always I'll say that so just
to share that with you but when the
market is hot I will lean in and I can
do incredibly well but when the the
market is cold I just keep hitting
myself you know hitting a wall I'll add
I'll add and then it'll drop I'll add
I'll add and then it'll drop and it's
like again and again and I'm like oh my
gosh like I need to stop being so
aggressive I'm being too aggressive so
I'm not good at kind of switching from
Hot Market mode to cold Market mode cuz
I'm just sort of tuned to being
aggressive now I think that early in my
career I was a little nervous when I was
pressing the buy button you know when I
was first getting in like I I did feel
that sense of anxiety like oh my gosh
I'm going to take real risk but I think
what overcame that for me was some of
the Early times where I took a trade
with like 10,000 shares and in an
instant I'd be up 2500 bucks or four
grand and that's like whoa I got excited
and so I think I kind of chased that
excitement of like the big wins and when
the Market's hot I'm getting them and
I'm getting the reward I'm getting that
adrenaline rush and it it's it's like
that aggression is getting rewarded but
in the cold Market I can get really
frustrated and so you know for me that's
something that I deal with where in the
hot Market my p&l is like going up
really quickly but when it's
cold what ends up happening to me is uh
it cools off and then you know I take a
couple big losses being too aggressive
and then I try to recoup losses I take
another big loss and then you know I I I
just kind of keep kind of like jumping
up and down like this like I'll have a
day where it's hot and I make money and
then the next day I'll lose and then
I'll make money and then I'll lose and
then I'll make it and then I'll lose so
it's much more jumpy like this when the
Market's cold now generally I'm still
green I I don't know and I should knock
on wood before I say this but um I've
had red months for sure I had a red
month um I had I think one red month
last year um and I think that was the
first red month I'd had in like a year
and a half but I typically will figure I
might have one or even two red months in
a year that's not uncommon that's not
unheard of for me to have two red months
in a year however I have not since I
turn the corners as a profitable Trader
had two back-to-back red months and I
feel really superstitious even saying
that so look it could happen it could
happen and if it happens it's okay but
um the reason it would happen would be
because in month one I suffered a draw
down probably at the beginning of the
month and it was a big one and I was not
not able to
recoup and then in month two I had like
a freak loss and or I had two months in
a row with like freak losses which
sometimes happens I mean trading is
risky so we know this is a risk so a
freak loss would be like you know I got
into a trade and then it got halted on a
T12 or I got into a trade got halted
pending news and then it opened like 50%
lower and I lost like 50 Grand and you
know that's not going to kill me in
terms of you know having made over $10
million but it would be a painful loss
and it might be hard to make it back in
just a couple weeks so anyways um so all
that was to say
that I am trained to I I I don't think I
think I Am Naturally pretty aggressive
and I'm trying to train myself to be a
little bit more conservative um so we
all come to the table with our with our
own aptitudes and our own kind of just
disposition um and for me mine has
perhaps been um
you know one that's held me back when
markets have been cold and other Traders
have been a little bit better um you
know just being like keeping their head
down and focusing on base hits and this
is something I struggled with in this
last month because I had you know over
$100,000 of profit in February and then
coming into March I was swinging hard I
was up $30,000 in like four days and
then I lost 20 grand in two days see I
got a little sloppy I got I started
getting really aggressive even though
things were cold and then I spent the
next two weeks trying to recoup the
losses and then I had another two red
days and now I'm like I'm still a little
bit uh down versus my peak in March but
what I'm telling myself as always is it
doesn't matter because March is over
March is over and I walked away with
more profit than I had at the beginning
of the month and now we start a brand
new month of April ail and my goal is to
walk away at the end of April with a
little more profit than I had at the
beginning of the month I want each month
to stand on its own and each month to
try to be a green month and that's a
nice opportunity each month to Cle clear
the slate and to start fresh so whatever
happened in the previous month it
doesn't really matter anymore it's
behind us now we have a new chance to to
lay a solid foundation so for those of
you that want to lay a solid foundation
with me for the next two weeks join me
for the twoe trial 20 bucks twoe trial
you'll get to watch a bunch of episodes
over this weekend that are straight out
of my warrior Pro curriculum and then
bright and early Monday morning 7: a.m.
right about 7: a.m. I'll be live
streaming I do my C my my live broadcast
every day for warrior Pro members from
about 7:00 a.m. till between 10 and 11:
sometimes I go as late as noon or 1:00
depending on what the Market's doing and
uh you guys will be able to be tuned in
for the whole thing so uh so yeah I
encourage you guys to join us uh here I
hope you enjoyed this episode this is a
free Q&A here on YouTube so thanks for
tuning in I hope you hit that thumbs up
I hope you subscribe to the channel I
have some more episodes coming soon and
uh join me for this twoe trial uh here
today and then you can watch some more
classes uh over the weekend all right so
thank you guys as always for being here
and I'll remind you that trading is
risky my results aren't typical so
manage your risk take it slow and I'll
see you back here bright and early on
Monday
morning