261: Humbled Trader - Lamborghini Money Quest Teaches Valuable Lessons

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Because let's let's be real, if it weren't for those kind of advertisements promising, you know, you'll get rich quick, most people wouldn't have gotten into trading. You know, if you had told me that this is something I have to grind for two years. you know, on on top of working my job and might spend like ten hours a week working on trading and I might lose, you know, a couple thousand dollars doing that, I probably wouldn't have.

Looked into trading. I'm I'm thankful to be honest. Like it sucks that I lost a lot of money, but I think everyone has to go through that. And we're now on episode 261. This is Tessa, co-host of Chat with Traders. After you listen to an episode that really speaks to you, for example, you may have picked up some great ideas or golden nuggets. What do you tend to do about it? In other words, how do you apply what speaks to you? Do you connect with someone and discuss it?

Or do you take notes and turn it into something actionable to experiment, test and maybe incorporate and apply into your trading routine, process or strategy? Or do you find that months later you've already forgotten all about it? Do you find that there's just so much great information out there that it can get so overwhelming and hard to focus and maybe you don't even know where to start? Or perhaps you were just listening to a podcast more for entertainment anyway.

I've always wondered about this and I'm just asking it now. What do you do after listening to an episode that speaks to you? Feel free to reach out to us on chatwithers.com and share your thoughts.

Now I want to focus on our next guest today who probably needs no introduction in the trading community. Her name is Shay, also known as Humble Trader on her YouTube channel. You know, I am personally inspired by the ordinariness of her journey, and I mean that in a good way. I think she speaks trading and her experience like it is and it resonates with so many traders in the trading community. Her journey represents many who are working full time or their primary job.

who have been looking for a change in their current situation and somehow discovered trading and have been inspired along the way. Like many, Shay was seduced by advertisements of easy money, but eventually learned that she had to find her own path and way of trading.

Taking the skills she learned as a special effects artist in Hollywood, She created the popular YouTube channel Humble Trader, and there's nothing ordinary here by the way, where she shares her trading experiences and wisdoms in a humorous and creative way that really sticks with her audience.

Join Ian Cox in his interview with Shay, the woman behind Humbled Trader. Ladies and gentlemen, we are so pleased to present Shay from Vancouver, Canada. Well Shay, otherwise known as humbled trader, welcome to chat with trader. Thanks for having me. Hello everyone. Hi Tessa. Hi Ian. Yeah, nice to nice to have you. Wha so where are you uh where are you now? I I'm from Taiwan. That's where I grew up. I'm current currently uh located in Vancouver, Canada. Uh I immigrated to Canada when I was

12. Uh and then since then I kinda, you know, been between the states and Vancouver for college, for work, uh, over the last couple of years. And now I'm back in Vancouver. How is it adapting to Canadian culture learning English uh in your early years? Um, it was a little bit tough. I'm not gonna lie. I think the best time to immigrate or to I guess move to a whole new country is when you're a lot younger.

Uh and by the age of 12, it's at that awkward age where you move there. I am in grade seven, and then the next year you go to high school. So it wasn't the smoothest. transition. Uh yeah, trying to learn English, trying to make friends. At the same time, it doesn't, it's not the easiest thing to do. So it was tough. It was tough the first couple of years in Canada.

Did you have any particular uh favorite subjects that you like to dive into uh when you're in high school? Or was it were you just struggling to kind of just adapt to the culture and learn the language? I I was always really good um with art. Like I'm a really creative person. So that's kind of where I used to escape. I would like hide in the arts room at lunch because no one would eat lunch with me and I didn't know who to hang out with. So I'll hide in the arts room.

That's kind of like my safe place. That's kind of why I eventually went to art school, went to film after high school. I'm always kind of very introverted, to be honest. So that's kind of my escape. to to be to be frank, uh my escape to not have to you know worry about meeting people or talking to people in English. Yeah.

Yeah. So uh early on when you were in high school and in college, uh did your family or friends have um were they into like investing or trading? No, no. I I didn't know anything about the stock market until after college. Um, you know, early on, no one in my family, no one in my friends group knew anything about the stock market. My parents didn't have the extra money to think about the stock market we're investing. So what did you major in in in university?

Uh I was in film. So I was I studied uh 3D animation uh in film, very different from what I'm doing now, but that's why I got started with like all the videos and all that fun stuff. Uh, were you like an editor of film and special effects? Is that it? Uh well, you know, in the in the modern day movies, like a lot of Hollywood block b busters, you see a lot of like three D effects, right? It's all green screen.

For example, uh, you know, any Marvel movie, the backgrounds, the vehicles, the the monsters, the heroes, all of that is green screen. So I'll be the people who design uh what the costumes look like, what the environment looks like, what the spaceships look like. Um, everything will be in 3D. So that's kind of uh kind of my former career in VFX. We call it VFX artists or designers. What what did you like and dislike about your job?

At first, I liked it for the creativity. At first, it was really cool because you're essentially working on film sets. Uh you get to see like the next room, they'll be filming um some shots in front of uh the green screen, and then you'll be editing. and kind of planning planning out with the 3D effects in the next room and building out the environments in 3D. So I had a really, really technical background, uh using all the different softwares, lighting, texturing.

uh to create these like computer generated images, CGI. That's the part I enjoyed. uh to be able to work so closely with a film set and uh it's a big production so you get to work with directors sometimes actors um actresses of course that's a part I enjoyed at first But what I don't like is the long hours because film productions are very, very hectic.

Sometimes you work six days a week from nine to nine. You know, it's not the best condition because in order to work on these CGI sets, the green screens, you have to work in really dark rooms. You don't get any natural light. uh and the hours are brutal. So you'll work like this for no two, three months and then the contract will end and you're on your own to look for the next contract. So it's not really stable and it's not a healthy environment long term.

Mm-hmm. Yeah, it sounds like you you weren't getting much um sunlight. No, well I still don't, but yeah. Uh, while you were working there, did you start saving and or investing? Did you do anything like that? Yeah, so it's because my job wasn't that stable. So during the weeks or months of break in between work, in between the contract, that's where I started looking at. other ways to supplement my income. I was living in Los Angeles at the time and rent was really expensive and still is.

Um, but I I need to find ways to make some income to be able to pay rent. So that's why I kind of stumbled upon day trading, swing trading and the stock market as a way to try to make some money. to make sure, you know, like I I have something coming in in between jobs. Did you get into trading before actually uh any investing or or did you get into investing before trading?

At the time, I didn't really understand the difference, to be honest. So yeah, I remember back then the first, it was when Robinhood, the the the trading app, was in like the beta. version. So I got one of those like priority invitation codes from my friends. So I started buying stocks in and out on my little Robinhood account on my phone. Uh and I thought that was investing. So I was like buying Apple today and then selling it next week.

But in hindsight, I was swing trading at the time. Um, but I thought that was the same as investing. But that's kind of like the gateway for me to uh you know seeing what the stock market is like and trying to make like a little bit of money here. So when did you open up your first uh trading account? Uh the Robinhood app was I think 2013, end of 2013, that's when they had the the beta vision. And then the a real trading account where I opened up was with Interactive Brokers was 2014.

Mm-hmm. So were you uh enticed by any uh grandiose claims by these promoters uh on the internet? Uh uh did you and how did you educate yourself? I joined a bunch of chat rooms, the the ones that give you alerts to buy and sell because I thought I would be able to make money really quickly. So that's what I joined and you know a a factor was all my friends were going to EDC, Las Vegas one summer. So I really want to go to VIP with them.

Um, so that's where I was, okay, like I've been saving up, you know, some small amounts of money here and there. Uh let me kind of place a little bit more trades to see if I can make enough to buy a VIP ticket. um with my trading. But and with all the chatroom alerts I was I was I was following, I'll make a small amount of money here and there, but when I lose, I'll wipe everything out.

You know, at first it was really rocky for sure, and I lost a lot of money with my first few accounts on my uh interactive brokers. So you ended up blowing up accounts or you did did you just slowly drain your account over time? Oh, I I I blew up. Yeah, the first account I think I blew up after two weeks. It was like a$2,000 account. And then that's when I realized, oh my God.

That's$2,000 I just lost and it took me a long time to save it. So I I realized I was pretty reckless really quick. So when I refunded the account, I I I toned it down a lot. Mm-hmm. So what were you trading early on? Like um any particular type of stocks or strategies, or were you just simply buying whatever the chat room told you to buy? I was buying whatever the chatroom told me to buy. And then it were like these like penny stocks. Um and then a lot of the$1,$2 stocks.

uh at the time, uh like super smoke cap, sometimes really low float. That's kind of my introduction to the stock market. A lot of, I'm sure there were a lot of pump and dumps, but I didn't know that. I just I everything was so random back then. I didn't understand why a stock would go up when you know the chat room say to buy at$2 will go up right away. And when I bought it, it was down at$150. I didn't I didn't understand why. So that was a lot of trial and error in my first year for sure.

Did you feel that you were part of a community in this chat room? Did you have any mentors? Um, how did you feel at that time of being connected to the trading world? No, there's usually these kinda chatrooms there's no such thing as anyone teaching you or mentoring you because the whole point is it's supposed to be easy, right? The whole point is you're supposed to just follow and buy whatever they buy and sell when they sell. And that's it. That's supposed to be the amount of effort needed.

So I didn't I didn't feel any sense of oh I was learning, uh at least in my first six months. I didn't realize that oh I need to like put work into this. Yeah.

Did you share with your family or friends that you started uh trading? A little bit at first, but then I stopped because everyone just said I was gambling. And and in in hindsight I was with the alerts. That was totally gambling. Um, but I I I I kind of stopped sharing and I kept it to myself because I just didn't want other people saying, oh, I shouldn't do this or shouldn't do that. Like I'm just gambling.

It's uh especially later on when I started to take it more seriously. I just didn't want the negativity to kind of hold me back. Right. D did your family or friends notice any change in your personality when you took some of these big losses? I'm I'm sure my family did. Because I used to have some anger issues. Um, and I I kind of would take it out on them, unfortunately, regrettably. Um, yeah. So I I'm sure they know.

Yeah, and I I'm not proud of it. Yeah, I used to take it out on them, yell at them. Um, and then I I had some, you know, keyboards that I used to smash my keyboards around. um and mouses as well. And I later realized maybe I shouldn't do that. It's kind of getting expensive. Yeah. So do you think uh trading can bring us closer to our repressed emotions?

I I think trading reveals whatever you already have inside. I think, you know, if if a trader already was struggling with some sort of um you know, any relationship issues in life or if you were before trading, if you were already financially stressed, I think trading will bring all of that out. Um, unfortunately. And if you have any sort of like inside insecurity and that's okay, but trading will bring it out to you. Um, I didn't think I was an angry person before until I started trading. Yeah.

Yeah, um you mentioned in uh one of your videos that uh anger is a secondary emotion and it's there to protect us. Um care to elaborate on that? Yeah. So I think it's a it's kinda like our Well, I'm no psychologist, but in my opinion it's kinda like our Our own inner reflection of like it's our instinct to kind of lash out whenever we feel like we're vulnerable. So let's say if I take a big loss, that's a huge hit to my ego.

So to react to that, to kind of protect myself, I have to I have to like lash out at the others and kind of express and yell and you know at other people to kind of react. to that emotion because to those losses. Because if I don't, then that means, you know, I have to take responsibility for myself. And most people don't want to do that. They don't believe that when they lose money in trading, it's their own fault.

I I used to blame it on the markets, blame it on the market makers, oh all the slippage. It's the market makers. It's not my fault. No, at the end of the day, it's just me not following the stock. So I think I come to terms with that. I I'm a lot better now. I don't really yell or smash my mouses or keyboards anymore. So I I kinda dealt with this over the last couple of years. I I take a lot more responsibility for my own losses now. Unfortunately, every trader has to go through this.

You suffered some losses. You said you blew up one account uh with two thousand dollars. Um after that. How did things go? Did you end up uh having any major losses after that? Enough to m g make you seriously consider quitting? Yeah, so after that first account, I still lost a couple more accounts, but it's not major blowups. It's just slow bleed of like small losses here and there. So I probably lost another two, two, two thousand dollars accounts.

Um, but no major blow ups after the first one. The biggest blow up that happened was actually after I became profitable. Um, because that's when kind of I've been slowly build up my account size. I was getting ready. This is um This is in at the end of year two. I was actually a lot more consistent. I found

um two strategies I I would just play in and out. I was getting ready to kind of size up more and take it to the next level and eventually be able to quit my job to do this. But that's when that's when I uh had a really, really big blow up because I think, you know, once you become profitable, you see how far you've come. A lot of traders have become cocky. And I was definitely one of those people.

So did you have a uh pretty long winning streak prior to this big blow up? And share with us a little bit about this blow up, like what what trade did you do and and what happened? It was it was kind of embarrassing because I was essentially back holding. Um it was a day trade turned into a swing trade.

Um, so I was stuck upside down short on Snapchat for a long time. So it it it it was after After the IPO'd, I did a lot of fundamental research on all my day trades at the time, and I was trying to short it to single digit. Um and it went to a single digits and bounced. And that's why I started adding in more and more. I didn't follow my stops and that turned into a swing trade short. And then I just kept on adding more size.

So uh when after I closed it out, I've been holding the the position for almost two months. uh essentially. It was a back holding position. And and unfortunately, like that just broke all my rules. I I I you know I was strictly a day trader. I didn't swing trade that much. I broke all my rules, I held a losing position, turned a day trade into a losing trade, I added to a loser. I was using more than the amount of size I normally would take. on a stock that's clearly uptrending on a daily chart.

So yeah, when this is the the biggest blow-up for me at that time, this was around forty-seven thousand dollars over the course of almost two months and that was really painful not to say the least. Oh yeah. I bet were were you um uh encouraged or enticed?

to stay in the trade because you were looking at perhaps some company fundamentals and looked at my God, look at how overvalued this company is or they're not making much money. Um would did you follow fundamentals at all uh in this particular company? For day trading, you know, usually yes, I every day I do some really quick fundamental analysis. But for day trading, you don't need to do anything that in depth.

generally speaking. So since we're holding this position for so so short term, you know, you just need usually need to know what a company does, you know, overall are they profitable or not. um any any you know if it's a smoke cap, any potential dilution. That's kind of the extent I do. But unfortunately, the thing with adding to losers and back holding is that the more Money you've sunken into it, the more losses, unrealized loss you're holding, the more research you do.

Yeah. You you find more and more things to justify bag holding the stuff. Yep, been there. Yep, so I will so I would yes, like like you said, I would justify it would Oh, Snapchat's not profitable. Come on. Like, you know, this is this is like, you know, this is something that only the teenagers use. They're not profitable. They're burning so much cash. There's no way this is going back to$20.

So I mean those were just excuses, to be honest. I should have just stopped out because because I was just breaking rules at the end of the day and didn't want to admit I was wrong and realize that law. Yeah. Have you ever watched a stock explode and thought, if only I had the capital, or sat on the sidelines because your account balance felt too small to matter? Good news.

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So uh after that loss, did did you consider seriously quitting? Uh I mean, what kind of and if so, what made you come back? In my in the course of the first four years of trading, even after I became trading full-time, I considered uh quitting many times. Um, and I quit many times, but there were two times that's very seriously uh that, oh, I was gonna quit and you know, just go back to my VFX job.

Um and that was one of those situations where, okay, I'm done. And then I I did go and uh look for another contract. That's another four weeks contract on another movie at a time. Um And yeah, I thought I was I was done with trading and that was it. You know, I go back to my regular film career and try to make it work. I see. So you hadn't uh completely quit. You just were trading in between contracts. Is that accurate?

No, basically I just stopped taking contracts. So I was Oh, I see. Yeah. So I will go I went back to my work, take up two contracts twice, um, with the intention of knowing back never going back to trade. But every time, you know, like I get that itch because we're on the West Coast.

I go to work at night. So technically I can wake up early every morning and study the market and trade. So even though when I wasn't trading, I was still waking up early to watch the markets. Like I I just get really, really drawn to the market. Even though I was determined to quit, I was still waking up and watch the market every day. Oh wow. So so the market still fascinated you and kept you um intrigued even while you were thinking about quitting.

Yeah. And even after I thought I quit, I was still watching the market. I think, you know, going back to work. It was fine, like I was getting paid again, but I it's very hard to go back to your regular for me it was nine to seven or nine to nine job. after you have had a taste of the freedom and the potential that trading can give you. It's very difficult to go back.

Oh yeah. So that's why I return to try to make it work so many times. Mm-hmm. Mm-hmm. Yeah, I'd like to ask you about your uh your YouTube channel. Uh when did you get into uh creating YouTube uh videos and what inspired you to get into that? Yeah, so the channel was created in twenty mid twenty nineteen. Um, so since then, since the 2016 blow up, that's been a couple of years, and I was trading full time, a lot more consistent, a lot more less stupid losses.

Like a Snapchat one. Once a while I still slip, not gonna lie. I'm human actual. But the channel was a way for me to have a creative outlet. Because when I used to have my job in filming VFX, I I still, you know, have some sort of creative input in my life and you know, some sort of creative challenge. Um, so that's why I was m very skilled with videos, storytelling, and design as well. So when I kind of was missing that in my day-to-day trading full time.

I realized I needed something to distract myself, ideally a side project that's creative for me to focus on midday after I'm done trading. Because what happens is I used to trade from, so market opens my time at 6.30 on the West Coast. So I'll trade till about my local time, 9 or 10 o'clock.

And then after that, I'm just throwing money back to the market. If I sit sit around and I stare at the market screens. So The YouTube channel is a way for me to be creative, have a side project, do something fun that I used to enjoy a lot when it wasn't work.

and uh distract myself. In a way, the YouTube channel saved me so much money because I will shut down my computer, shut down my brokerage account, and focus on making these like little videos that I really, really enjoy and find it fun on the side.

Do you think that your YouTube channel uh helped you in any way to hold yourself accountable for your your own trading? Yeah, for sure. Um I think If you have to talk about your trades, recap your trades. and talk about these like really important ideas to other people, summarizing a video, it's kind of it's kind of a positive reinforcement where, okay, I just talked about risk management in a video.

Then the next day, you know, when I'm trading about to do some stupid stuff, how can I do that when when you know I just told a thousand other people watching my videos that you should follow your stuff? Right. So it's a I think the the YouTube channel, I'm sure I'm glad it helped a lot of people, but really it's a way to help me. uh stay very disciplined to my plans, my rules, and know when to call it a day and be done with trading.

I I noticed that uh uh since you created your YouTube account, uh it looks like it was just about two months you already had videos uh that would get o well over a hundred thousand views. And now after over 350 videos, a million subscribers and some videos getting over a million views, when many other trading um videos by other people only get a fraction of that. uh of the amount of views that you get. What do you think the uh appeal is?

Well well, first of all, thank you. Um, but I don't think I hit that much views that fast. Um, like it's a slow trajectory, like it's something that I really, really like doing and people see the work I put into and editing and video creation came naturally to me thanks to my former career. But I think the biggest thing why people like my videos is because like I don't sugarcoat it.

And I usually talk about my experiences of why I had such big losses and why most people will have losses and kind of what you should expect as a new trader going into trading. kind of set some realistic um expectations for people. Otherwise what without some real real reality check, most people would think, you know, what I the same reason I was drawn to the market is I thought I was gonna make money right away and, you know, be able to drive Lamborghinis in six months. Ha ha.

It was thrown around. I mean it still is being thrown around, right? Oh yeah. You you uh in many of your videos you do make fun uh of the uh Lamborghini money. And I was just curious if uh if you had any experience then uh in these chat rooms that you talked about. uh whether they pr promoted uh Lamborghini money and and uh uh easy way to fast wealth. Did you get exposed to that kind of uh promotional hype uh early on?

Oh yeah, that's what was drawn I was drawn uh to it. Uh I mean the couple of chatrooms I was in, you know, usually there's a huge uh banner of uh the guy in front of Lamborghinis. It's like bright. Orange, bright, blue. I mean that's that's the everyone's seen the ad, right? Yeah. Yeah. Yeah, I noticed one of the videos that you have, uh uh it's it's quite funny, where you actually got a um I think it was a green Lamborghini and uh and made a uh

a skit on that, um kind of making fun of that whole uh yeah, that whole hype crowd. So did you feel uh in any way did you feel tricked by these kind of grandiose promises or or uh uh you know of a rich future by these chat rooms. A little bit tricked, but to be honest, I think this is every trader's rite of passage. Because you kinda have to go through that to uh to kinda to kinda understand, oh, I have to put work into

So I have no regrets. To be honest, I I I feel really thankful now looking back because let's be real, if it weren't for those kind of advertisements, promising, you know, you'll get rich quick, most people wouldn't have gotten into trade.

And you know, if you had told me that this is something I have to grind for two years, you know, on top of working my job and like spend like 10 hours a week working on trading and I might lose, you know, a couple thousand dollars doing that, I probably wouldn't have looked into trading. Uh-huh. So I'm I'm I'm I'm thankful to be honest. Like it sucks that I lost a lot of money, but I think everyone has to go through that. Yeah.

Yeah. Uh in your videos you you definitely seem to have a a natural flair for acting. Uh did you did you learn any of this? Um uh in your VFX job getting exposed to actors and actresses, or uh did you start any plays or anything like that? Or is this kind of like a hidden talent that came out as a process of this YouTube channel? I I think it's uh It's it's it's just something

that because you have to understand like I'm I'm naturally introverted. So the only way where I feel comfortable to talk is if I'm at home by myself in front of the camera. So it would be very different if I was in front of a lot of people. I wouldn't be able to do the same thing. Um, this is what introverts usually do. Like they're only talkative when they're by themselves talking to a camera. Yeah, if you put me in front of the crowd, I I uh I don't know what I would do. Ha ha ha.

Uh so with a million subscribers, um, I imagine some people are quite curious uh whether your YouTube channel usually generates significantly more or less income than you can get from trading. Oh my God, I wish I made more from YouTube. And that's a fair question, but it doesn't, it's not as much as people think. So I'm like on an average day, I probably like the YouTube will probably make like$200, which is good. Like$200, like if you do this for like the entire year is how much?

Seven seventy thousand? Seventy. thousand. Yeah. Yeah. So I mean it's it's decent. Like somebody technically can live on that, but for me, uh it's it's not Like it's it's not as much as I need or wanna make. Um so the majority of my income is still from trading. And at the same time, now that I have a videographer. And I have someone who helped me with the videos. So like all the accents, revenue goes to my team.

Oh really? Okay. Yeah. so it's kind of why i'm investing back back into the youtube channel essentially I see. So all those special effects that you put into your videos, um, do you do that? I used to. In my first year of YouTube, I had no help. It was just me doing it. But nowadays I have a videographer and editor. I see. It s it saves you quite a bit of time then. Yeah.

Uh great. I'd like to uh move on to transitioning to being a part time trader with a full time job. Uh is so when you were trading while you were working, um Did you focus? I mean, how did you manage your time to be able to trade? Did you focus in on narrow areas of the market or just certain time frames? What did you do? This is where I I feel really blessed and grateful that I'm living on the West Coast time zone.

Because... Yeah, if I'm in LA, Vancouver, Seattle, San Fran, you can well, you have to wake up early to prepare for the market. So I used to wake up at 5 a.m. Nowadays I wake up 4:30, but 5 a.m. to 6 o'clock is kind of like the the studying and the planning part, doing all the research. So I used to do that every day. So from and then from 6 30 to to 8 30 is when I will actively trip. So after that then I'll go to work.

Mm-hmm. I see. So any tips to consider for our part time traders um who do have a full time job? You have to well, ideally you get to work from home. That wasn't a theme back then in twenty fourteen, twenty fifteen. But nowadays I think a lot of employers are pretty flexible. So you can Talk to your employer, negotiate whether you can work from home half of the week and be able to kind of manage your time between work and trading. So block off certain time slots for trading.

Um if you're on the East Coast, it's a little bit tough. But Um, I talked to traders who schedule to start the actual nine to five at 11 a.m. market time on the East Coast. And they just focus on trading from eight o'clock to eleven. Mm-hmm. So it's doable, but you have to be very, very very productive with your with your time and really good at managing and and time blocking.

Did you ever calculate the percentage annual return that you would need to replace your working income? So you so that you could transition from a full time job to a full time trader? Mm, so it wasn't I didn't use percentage, but I used uh a hard number. So at the time when I was in LA, I was making about in US dollars, probably like sixty K per year. And and by the way, sixty K is like including all the

All the crazy overtime, so it's not a lot of money. Um, sometimes I work 12-hour days, but 60k per year. So at a time, I just want to have. You know, at the time I calculated my income, sorry, my living expenses, which was around 25k per year. And for one person at the time, that's you know, nowadays that's probably not enough, but back then it was. So for me, I just want to have one whole year of money saved up.

from trading and sitting in my bank account. So I want to be able to have that liquid cash 25K in my account. That's when I know that I I'm ready to trade full time. I see. So so that sounds like a good uh uh point for uh traders to consider is have that runway, right? Have that buffer uh so that you don't um have the pressure of having to make your rent money, you know, every day weighing down on you.

Yeah, yeah, this needs to be separate from your trading account because at the time I believe at the time when I quit, I was trading with a 40K trading account. And then the 25K for living is out it's in my bank account. So keep it separate. I see. And so how many years after so you started trading, is it around 2013? Is that correct? And then uh you started trading full time about around what year? I started trading full time three years after, so in twenty sixteen.

Twenty sixteen. Okay. So you had three years of experience to go on and you had a a year's worth of um expenses saved up. Okay. Great. Transitioning to being a full time trader. So you you quit your job in twenty sixteen, right? And started trading full time? Yes.

Yeah. Did you share share any of this with family or friends? Ha ha ha. Well, I kind of waited a little bit. I eventually told them. But I told them after well into my first year of full-time trading. When, you know, at first you're gonna have some rocky months whenever like I went full when I went full time. There's some rocky months where

You know, I wasn't sure if it's gonna work or like a break-even month. Um, but once you get into the flow of things, then I realized, okay, like I should just treat trading the exact same way as if I was still trading part-time. Because that's kind of what I was used to after the first, after three years of practice, right? So I had to treat it the exact same way, use the same routine, nothing much has to change.

I see. So did you expand your trading hours that you would do the trades because now you're just doing it full time? Uh or did you still keep to trading in the morning and then uh working on YouTube videos maybe in the afternoon. Did you keep to that same kind of schedule? Yeah, so at first when I first started trading full time, I would trade the entire day. And I realized, you know, this is pretty stupid. I'm throwing away a lot of profits after my local time, 10 a.m.

So that's where I kinda, you know, to know w YouTube is one of the things that I started doing as a side project to distract myself. But at the time I also did a lot of other things. Like I did a lot of online businesses with my friends. I was into real estate. um did some home house flipping, everything like all these like site side hustles I was doing was just to make sure I occupied well after 10 a.m. and don't give back my profit.

So even now, that's still the best time for me to trade before nine o'clock, to be honest.

Uh-huh. Um, can you share with us a little bit about your your bread and butter typical trades that you do? Yeah, so that kind of evolves over the years. I used to trade a lot of small caps. But nowadays I trade more on the large cap side because this year and last year the large caps have been so volatile. And I love it. What I like, my bread bread and butter is set up.

is whenever there's a huge gap on the on a large cap stock, huge gap up or huge gap down. I prefer the gap ups, usually due to earnings or any sort of news catalyst that's positive for the stock. So I'll see the gap up pre-market. And then usually if you look at any huge gap ups, there's usually some sort of profit taken at the open or sometimes pre-market. And then I'll identify that.

Um and I what I'd like to do is to to long to buy the reversal after it's did the profit taking, let's say for example, retracing 30% of the overnight gap, then I'll go long and buy the reversal back to the pre-market high. I see. And then uh when you have a dip, say on a on an earnings miss, for example, uh do you short at the open or like kind of what are you looking for uh to go long or short?

Yeah, so earnings miss, it kind of depends um on how the chart is set up. So if it sometimes earnings miss and it gaps down, that kind of just ruins the play. So if a stock has gapped down way too much, I I don't like to trade it. Um, but unless it does like a if the earnings is really a miss and they missed on all metrics, EPS, revenue, guidance, and then I'll even listen to the conference calls.

So that's a really quick uh like fundamental analysis I'll do on the stock. Um the call sometimes can take a little bit longer, but I'll tune in and listen to it. Um and usually for the for the tech stock. Especially the recent ones. It's very, really sensitive to what the expect what the actual earnings are versus the expectation. So a lot of times that's where you can see the surprise factor.

Whether it's a negative surprise or positive surprise, if it's a huge miss, then sometimes the stock doesn't even bounce for you to find an entry to short. Um, but then if it's like a really, really bad earnings, I'll try to find entries here and there to short. Essentially you're joining the trend to the downside. Like that's when you see like a huge bleed out, the stock will literally fade the entire day.

Do you find that uh the big cap stocks that you go long on on breakouts or short on a say earnings miss? Uh, do you find them more suitable for holding for multiple days or weeks? Or are you just simply strictly get in and get out the same day? Yeah, I still prefer to just day trade them. Um, I used to hold some of the stocks overnight, um, but I would say since.

Since 2022, uh, I think the overnight gap up and downs, this it's a little bit too irrational. Everything is so headline sensitive now. I just don't like the overnight risk. So I don't hold much overnight anymore. Mm-hmm. Wha was your uh transition from small caps to large caps um heavily influenced by liquidity drying up uh over the last year, year and a half? Yes. And also, also, I was reviewing my journal at the end of, I believe, 2021. Um, that's why I realized, okay, like smoke half.

when it's great, like especially the multi-day runners, you can make a lot of money. But I also look at my losses on the small caps. It's just like, oh man, like if I just take out small caps altogether, I will have a much you know maybe i won't be green by much more but it will be a lot less stressed a lot less stress Yeah. So I was looking at, you know, like the small caps, trading them all together, the wins and losses. It's not adding that much extra to my overall PNL.

And the large caps are just so much more, I wouldn't say easy, but they're a little bit more predictable than the small caps. Um, so that's when I started thinking, okay, maybe I should just. I only trade a small cast when I see something really, really good set up instead of trying to make it work every single day.

You you mentioned in one of your videos that uh being in tune with your emotions is an integral part of achieving success in the market. How much of this do you think is just simply tied to the position side? to optimize your position position size so you don't get too emotional. But you have some Hmm. I I think Uh a l yeah, I think some of it. But usually when someone gets really emotional when they add size.

You wanna be somewhat you wanna be a little bit uncomfortable, but you shouldn't be emotional. If you're emotional after adding size, it means you add it way too big, too fat. So if I'm normally trading, let's say, you know, a thousand share lots on the stock, I I wouldn't overnight change it to 2000. I I'll increase it slowly. So you know, maybe it's 1200, 1500, slowly over the course of

a month or a couple of weeks. So it's a slow increase to allow myself to kind of adjust to the the position size. So usually the emotion is not, for me at least, it's not from the position sizing. It's just from Doing stupid things like if I add to a loser, for example. Yeah. Excuse the last interruption here. This is Tessa. We hope you're enjoying this episode so far. If you love the podcast,

Please give Chatwith Traders the best review you can on whatever platform you're listening from. This will help us to keep the episodes coming. Also, if you haven't subscribed to our email list, please hop on to chatwithraders.com and click on subscribe. so we can keep you posted of information that may be of importance. Thank you. Now back to the chat with our guests. Uh have you ever uh used or consider using Chat GPT for um for your investing or trading?

Um... Just AI in general, I think I'm starting to kind of explore the avenue. But I don't think it's ready quite yet. I think at the moment it still requires a lot of human effort, which is fine. But I think eventually we'll get there overall in trading. Mm-hmm.

What kind of rules have you set for your trading and how did you come to discover and create them? Um, I think it's from I do a lot of journaling. So it's from your journey from my journals that I create rules for myself. For example, something I find is like I usually trade more on my red day. Uh and then let's say on a green day I'll place four trades. On my red days on average, I I I was looking at this uh a couple of months ago. On my red days, I would trade six to seven trades.

So knowing that a lot of times about like in trading, making money is one aspect, but the other aspect is trying to lose less, right? That's that's that's that's the the other aspect a lot of people don't think about. A lot of times you need to analyze your losses and look at, okay, on the red days, if I just stop trading after three losses, what would my PL look like?

So delete those losses, that's why I did, delete the losses after the third trade. And I realized, oh my God, my red days will be so much smaller if I just stopped trading after the third trade on my red day. Right. I did a lot of that to create those rules of okay, you can only trade until uh nine o'clock your local time or you can only you know take three losses on a day and be done.

What were the things that finally clicked for you in your trading that was a turning point for you where you started to become consistently profitable? And um how long did it take? Did you say it was like two, three years? Yeah, I became profitable after two years. Um, and then I realized it was in after year one, I started more taking risk management more seriously. So that's the big part where I used to have varying amounts of risk.

For all the different trades I'll take. So on like on small cap, I'll be risking at$200, on a big cap I'll be risking$50, vice versa. So it's a little bit too erratic. So what I found out is if I risk So it all goes back to my journal. So if I go back to my journal and kind of look at my entries and exits and the share sizes I'll take, I'm taking varying amounts of risk.

But if I set the risk constant at least for at the very beginning, every trade, I'd say every trade now, instead of risking, you know, all the different amounts, every trade the risk is now$50 or for me at a time,$50. then then I will see more success in terms of rent managing my risk. Cause the risk then will be kept around 50. With slippage, maybe 56.

um$60 slippage. Um, but then like this way it controls my risk to okay. So my max risk on the day is, for example, like you know, 2x my risk. So that's how I realize that okay, I should be no looking at position sizes from a risk reward perspective rather than thinking how much I want to make, um, which is like kind of the opposite of what most traders do. Uh-huh. Uh and then do you how often do you add to your winners uh And if so, is it a significant amount?

Yeah, so after, so it's only after I started, you know, managing the risk, so keeping it constant, then I'll look at on my journal, okay, which are the setups that I'm best at? Usually where I'll make, you know, like 3x or 4x the risk, then I'll only add into winners on those particular setups. And all the other ones, I'll use the same lot of risk. So maybe for the good ones I'm really good at, I'll 2x my risk on those trades.

I see. So so your uh what you would consider your A class setups, yeah. You would uh double the amount that you that you apply to that trade? Yes. So at the time because I was trading still relatively small, doubling my risk overnight, it was still manageable because we're talking about$50 risk at the time.

So doubling that would be$100 risk. It's a lot for me at a time, but I was kind of pushing myself more into doing that. And that that works better because in my opinion, a lot of traders when they add size, they add size for all the setups they have. But you should add size to your best setup.

I see. So for those traders who are struggling, you know, and hurting right now, um, any advice uh you'd give them? Um, I think You wanna make sure you have a robust journal. You wanna go and r and look at some patterns in terms of your own human behavior, whether your mistakes or emotions. Or whether it's your position sizes, for example, from your journals. That's kind of you have to review them, both your winners and your losers.

If you treat each and every single day as like a brand new day and you don't journal anything, you you there will there's never gonna be any pattern or routine that you can establish for yourself. Everything will be random. Um and the market is random enough, right? So the only thing you can control is kind of how you trade. So for people who are not tracking the setups in your journal, um, they need to I I I highly recommend you to start doing.

So uh in the kind of broad economic news, uh we've heard about the you know different banks blowing up, uh Silicon Valley Bank and First Republic. Uh, have you changed anything about your trading style or how much money you keep with the broker as a result of these uh bank blow ups? Yeah, that's a good question. Um in the in the state.

I think it's uh up to 250,000 uh for all the deposits as well as the the the broker accounts in Canada. So yeah, so I make sure if my brokerage accounts are with the state. with the US, I keep it max at 250 K. But my Canadian ones, the Canadian uh regulation is a lot different, uh, where deposits were only insured for up to 100K, but the broker account You are insured for up to a million.

So that I did I did re-redid some like asset allocation looking at my trading accounts. But yeah, so yeah, after seeing what happened to SVB, I I got a lot more cautious. Um, especially with my US exposures. So to wrap things up, what do you struggle with most? I'm a very stubborn person. I think a lot you hear a lot of traders say that. So I've gotten a lot better over the years knowing when I should start.

Um but but being, you know, we all have a little bit of DJing in us and being that I'm still, you know, sometimes I still feel like I'm a DJing. I think a lot of times. I I do struggle with uh with stepping away even till this day. So that's kind of my biggest struggle. Not every single day, but like it probably shows up once every month where I'll just keep on fighting and trying to make it work. Um, but

Yeah, so I'm a lot better at it now. It used to be every week or every other week, but now it's once a month where I have to fight my overtrading tendency. And not be a DGN. I I see so Uh beware of revenge trading.

Right. Yeah, revenge trading, trying to go back uh to make it work or go back to a stock that lost money on yesterday and make it work and think that's revenge on the stock. It it's really stupid, but yeah. I mean traders were kinda What kinda uh you have to be kinda a little bit insane, a little bit weird, out of whack to wanna do this thing for a living. Yeah, exactly. So if a close friend or a family member asked you if they should get into trading, uh, what would you tell them?

I think it depends on their situation. I would say If you have$5,000 lying around that you can ri you can afford to lose, then s then it's great. It's a great way to start learning about the market. and to see if the if this the skill potentially is something that you can utilize to make like the the amount of upside in trading is insane as long as you are okay risking the initial capital.

So I I'd say, you know, if you can afford to lose the what the first$2,000 or$3,000 you have or$5,000, then that's great. But then if you are trading with the last$5,000 you have in your bank account, I would say the Mm-hmm. Right. So so uh trading with just kind of gambling money in a way. Exactly. Yeah, you in especially in the first year, you pr most of you will probably lose all.

You got a good reminder. Well, thank you very much for coming on the show, Shay. Uh, how can our listeners get in touch with you? Thank you, Ian, for having me. And if people wanna uh get in touch, you can check out my YouTube channel, Humbled Trader. Or on my, um, I'm also on uh Instagram, Humble Trader as well. And uh my Twitter is HumbleTrader18. Fantastic, Shay. Thank you for coming on Chat with Traders.

Thank you Ian, thank you Tessa You've reached the end of this episode of Chat with Traders, but rest assured there are more episodes. Chat with traders.