Most traders get it backwards. They're thinking, I want to find a good strategy and I'll get profitable, and then I'll figure out how to get consistent. It's like, no, if you want consistent profits, you need to focus on a consistency first.
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You are listening to and watching the Financial Survival Network. I'm your host, Carrie Lutz. Got a new guest on. He has been trading for nearly twenty years. Well, he's been successful trading. He is real satisfaction is by teaching others how to become successful traders. And Brian McAboy, welcome to the show. So, first, how did you become a trader?
Well, actually I started trading. I've been helping other traders for almost twenty years. I started trading actually back in the nineties, back in the day before the internet, there was a guy named Ken Roberts who had this excellent book and a direct mail campaign through the snail mail and the book was who was selling a book called the Greatest Business on Earth and he was talking about futures trading and it was a great book and he did really well well. It introduced a lot of people
to the world of trading, myself included. And it was pretty interesting because that was back in the day. Like I said, this was pre internet. This is when if you wanted to place a trade, you're picking up a telephone like a landline. Sure, I remember those calling a broker to place your trade.
I knew one of the guys who was responsible for inventing or creating day trading, and he actually, you know credit is one of the fathers of it from back in eighty seven after the first well after the crash of eighty seven. His name was Harvey Houtkin, and he was an interesting character. So what do you think the best part of trading is, Well, the.
Best part of trading is is it's a great thing and a liability at the same time as really the low barrier to entry any other business that you want to pursue. It's going to take you know, a reasonable amount of upfront capital and usually a length of time and a learning curve, and it's not and a lot of times it's not just that easy to enter that market. But with trading, anybody can start trading today. All you need to do is fund an account and you can
trade other There are no other requirements. But to be successful, now that's a whole different story. And like I said, that's why it's a liability. The almost zero barriers to entry so many people. Because there are no barriers to entry, it kind of feels almost like an entry level job. Now, hey, I don't need a degree for that job. I can just go walk right in and start doing it. But it's not an entry level job. It's a skilled profession.
I mean, if you think about it, trading it for individuals, but if you're trading in the global markets, trading is professional speculation and it's essence. I mean, we're sitting here and we're trying to anticipate what we think is going to happen, and we're placing bets and so at this level, though you can't afford to be a rookie, you can't afford to be average, or you're just going to take a beating. It's professional and you're up against professionals.
That's true for sure. Oh yeah, so obviously you're a professional. How did you become a professional?
Well, I had to I had to learn that is the hard way. Back when I was cutting my teeth, there wasn't much good help out there, and so my first year, I kind of you know, I had Ken Roberts book, which was cool, and it was a paper book. I wasn't like anything on a computer. We didn't have YouTube videos and stuff back then. So you know, I jump into this. I started account and I'm trying to
learn how to trade. And my broker, he was a young kid, he didn't really know much about He knew he had to help me place trades, and so I'm trying to train myself and I'm I'm just flying along by the seat of my pants and not not knowing alarmed. I mean, I'm trying to train myself and I didn't know what I was doing, which is made for a lousy trainer. So anyway, I got kind of lucky though.
I started with a thirty thousand dollars account and over the first year I managed to run it up to over forty seven thousand dollars and then I just got completely stupid, and the stress finally got to me because I knew I didn't know what I was doing, and even when I was winning, it was still stressful. I mean, here I am, I'm like, you know, I'm young, I'm a young guy. I feel like I'm having a heart attack all the time. It just because I'm so wound up.
And so eventually the stress got to a point where apparently my subconscious said, you're going to stop trading because this is going to really screen up.
You know.
You know, it's like some when you work too much and you wind up getting sick and you're bed ridden for a week because your body just says you're taking a break, whether you like it or not.
Sure, yeah, I know.
So it was kind of the same thing. And that's part of why some traders actually they don't just take a beating that actually go ahead and blow up their account, which I did. I ran all the way down from forty seven thousand dollars down to seventeen hundred dollars. Wow. Yeah, And so Needles said, I took a break. And now, fortunately before that I had been working and well at the time, I was still working in a manufacturing plant making plastic bottles for like coke and Pepsi and gatorad
and stuff. And it was a super high volume, high speed, high dollar razor thin margin operation, and I was the quality assurance manager. So it was my job to make sure that we're getting good, consistent production and out of everything, the equipment and all the people. And so most of my time as a quality manager, you know, I mean, it's part of the time was spent with machines, but most of my time was spent with the people on
the planet. I had one hundred and eighty three people I was responsible for right and seven different departments for different shifts, all these different people, all these different jobs, and it's my job to make sure everybody's doing their job the right way and doing it consistent. And so a friend of mine, I was talking with her and let her know, you know, telling her about blowing up
my account and everything. She's like, Brian, at your work, you're just to get everybody good at what they're doing and get consistent performance out of them. Just take what you're doing at work and apply it to your training. And I'm thinking, duh, I just Like I said, I was looking at a kind of like an entry level job. I just jump in. Looks easy enough, I'll just learn as I go. That's why I took a beating though.
So what I did was I took my quality assurance stuff, which and I'll break down for you here in a second, but I took my quality of sharance stuff and applied it to my trading, and I was able to actually get a handle on it where I knew what the heck I was doing and settle down and turn things right now. It took a little while to figure things out, but generally, with quality assurance and the way I teach people how to apply it to their trading, there's three
basic steps to the process. First is you got to get you have to establish consistency first. Most traders get it backwards. They're thinking, I want to find a good strategy and I'll get profitable and then I'll figure out how to get consistent. It's like, no, if you want consistent profits, you need to focus on the consistency first, because if you have a consistent process, that's easy to adjust and to make better. But if you're all over
the place, that's kind of hard. To fix and that's where most most traders find themselves.
These are all over the place, right, So focus is focus.
Oh yeah, oh yeah. We established consistency first, and then the next thing we do is and again this is just where people aren't taught how to do it right. But we want to establish confidence in what we're doing. So there's testing that goes into it, and you have to know how to test the right way. Otherwise the testing can actually be more harmful than helpful if you're not testing right way, because it gives you results that
you can't rely on. But anyway, so we got a good process, we confirm that it works and then and then we dial it in for profit and then I take them through the mental conditioning, the training so that their execution is good. Gotcha. And this is how you get good at trading, is you you You don't try to trade everything. You find a strategy that works for you. It's a good fit for you. And that's a that's
a really crucial thing too. A lot of people think, you know, they can just grab somebody else's strategy because you know they're making money. It's like, no, it has to work for you. Because if there's certain things about it that don't agree with you. The internal conflict, they'll have you a second guessing yourself somewhere along the way,
or just playing sabotage in yourself. So you got to you got to start with a decent strategy and then, like I said, we build a good solid process on it so you have that consistency, establish a confidence with it, and dial it in and then we do the mental conditioning for consistent execution and kind of fixing the damage that it curus in the early months. So understood, understood, all right.
So, uh, when you're going to take on a new client to train, do you ever just tell them this isn't right for you. Don't you're going to lose money?
Oh yeah, yeah. If I'm talking to somebody, well, one of my favorite questions to ask people if they wanted to, you know, be an independent trader. One of the favorite questions to ask is have you ever started and run your own business? If they say no, what that tells me is they've never had to go through that learning curve of starting and running a business. And it's a
substantial learning curve. And the thing is there's mindsets and perspectives and expectations and all kinds of stuff that goes with running a business versus just being an employee. If you've been an employee your whole life, yeah, you used to, you know, you put in some time you get a paycheck. Doesn't work that way trading business.
You know what my father used to say, he was a lifelong entrepreneur. He used to say, anytime you go into a new business, you pay for lessons.
Oh yeah. Now, unfortunately, you talk to a lot of traders, and most people come to me, they've been trading for like three, five, eight, ten years already and they're still struggling. And one of the one of one of the most common comments say is, yeah, you know, but I've learned a lot about myself. Speaking well, life is sign it for a lot of lessons though.
Yeah, and there can be very costly Oh yes, that's why when trading, I know for sure, risk management is key.
Oh yeah, yeah, well again one of the one of the perspectives you learn as a business owner, and you go through those through the lessons you learn in starting and running your own businesses. You always have to have the long game in mind, because you're playing the infinite game. The goal is to stay in the game, not to just win this month. That's uh. I mean, I've heard that from Simon Sinek and a handful of others, and
I love that perspective. It's like, no, we're not trying to win this quarter, We're not trying to win this month. We're in the We're in it for the long haul. We want to be in this for long games. We have to survival is the first first order of business. Now, let me ask you a question, because since we're talking about business, if you were to hire somebody as a trade let's say you wanted to start trading, but you're going to you wanted to hire somebody to do it
forty or somebody comes to you. You know, you've got a great business ide and you're going to hire somebody to do the startup for you? Are you? Would you, you know, just to hire somebody because they're cheap, and you know they're kind of They'll say, sure, i'll do it for you, I'll do it for almost nothing, and but you know, I don't know what I'm doing. I'll
just kind of learn as I go. Or would you want to, you know, have somebody who's trained and they know what they're doing, and you know they actually have the competence to do it. I mean, who would you want to hire? Yeah, yeah, well obvious. Yes see. Here's the funny thing about it, though, so many traders and I'm not judging anybody. I was totally guilty of this myself. When when you go into it yourself, you're the trader
you're hiring. And so if you don't know what you're doing, do you want to just jump into it and start trading or do you want to say, wait a minute, I don't know what I'm doing. I'm new to this. I need to go get trained up before I start trading with real money, actually acquire the skills of this profession. Or it's just like hiring a lawyer, you know, a good mechanic where it's like, you know, you want somebody who knows what they're doing, not figuring it out as they go.
Yeah, I gotcha, I gotcha. So I guess I guess. Really the key is knowing yourself, right, Oh.
Self awareness is huge, absolutely yes, And well right along with that though, is being brutally honest with yourself. Mhm. I mean it's okay to be self aware, but if you're seening going no, no, no, no, I can do this. It's like no, that's that's how you spend five years taking a beating and getting a lot of life lessons without making money.
I can understand that. So yeah, like ye, So sometimes I'm sure you think somebody is good when you first meet him, and then they turn out not to be so good.
Right. Oh, Now, in fairness, most of the people who come to me are generally successful people. I mean, traders on the whole are above average people. I mean, if you think about it, you almost have to be in order to be in a position to trade. That's this is not one where the average Joe's going to sho up because they don't have five, ten, fifty hundred thousand dollars to trade with. So you have to have demonstrated
certain characteristics to start with. And most traders are generally upper middle class professionals, you know, project managers, business owners, software engineers, doctors, lawyers. They're professionals. Like I said, it's an above average group. And that's the part of the trap of trading though, is you know, you look at it, it's like, wow, yeah, looks easy enough. I can do that. I understand how it works. I see what I'm supposed to do. But and this is my favorite analogy, it's
just like with the game of golf. I've grown up around the game of golf. My dad, but he was an avid golfer, love the game, and it seems pretty decent. His dad was even better. He was able to throw a golf course year. Anyway, I was never a great golfer, and I'm still not a great golfer. The thing is, though I've grown up around the game, I understand everything about the game. I know all the rules, all the terminology. Yeah, I know what I'm supposed to do. Yeah, it doesn't matter.
Huh.
That doesn't make me a good golfer. Yeah. And so many traders it's like we you know, we jump into it, we look at it. It's like, Okay, I understand how it works, and I understand what I'm supposed to do, but that doesn't make you good at it. And the thing is, in trading, you actually you have to get good at this until you do I mean, because here's here's the thing. Like most other professions, there's a level of skill required to be good at this and trade
and just do the job. Well and with confidence and the you know, it's a calm emotional state as long as you're operating down here where you basically know enough to be dangerous but you're not good at it yet, it's going to be it's it's going to be stressful. You're probably not going to do that well. And there's no way for it not to be an emotional experience.
Once you get skilled up and now you you have the contents and the no and you know that you know, yeah, your emotions settled down and it becomes just like any other day job, which is really cool. Yeah.
Yeah, So who's like the most successful trader you ever met?
Well, met in person. Unfortunately with trading, I haven't met that many traders face to face. I met a lot of people online, met a lot of traders.
They both come into contact with one way or the other.
Actually, Ray Barrows is probably a favorite. He's he's a guy who's been in the game for a long time. I mean, I've known quite a few traders, but yeah, he's probably my favorite. He's just a super nice guy, super sharp, got good perspectives and everything, a lot of fun. My favorite one that I've ever heard of, though, was Nicholas Darvius, the guy who wrote the book a long time ago, before the way, before the internet and everything, how I made two million dollars in the stock market.
This is like in the sixties, and he was he was funny because he was he was a professional ballroom dancer and got started trading because one guy didn't have the cash to pay him so or he didn't anyway, he wound up getting three thousand dollars worth of stock as payment for one of the gigs that he did,
and that's how he got started trading. But the way he approached the trading was, Yes, I'm going to get good at this, and I'm going to be very mindful that I'm a human being and I'm susceptible to certain influences like opinions of others and all that kind of stuff. And so his whole focus the entire time was, I'm going to develop the method that I like and it makes sense to me, and I can demonstrate that it works,
and I'm going to get very good at it. And he was able to take three thousand dollars and turn it into two million dollars in just a couple of years, and that was a huge accomplishment. I mean this is back that this was back before we had long distance across the ocean. I was trading via cable and was able to accomplish that. So anyway, it's like yeah, yeah, yeah. Other than that, yeah, Like I said, over the years, I've come to know a lot of really good traders,
a lot of different backgrounds. Some focus on trading psychology, others you know, learned four X and like in the prop firms. Another buddy of mine, he's big in a strategy, is really good strategy developer. And so for anybody that's listening, if you have an interest in trading, or if you're already trading and you're kind of wonder, you know, where's your
starting point? One of the very first things you have to do is don't try to be a discretionary trader where you're just going to sit down and just trade whatever the market's thrown at you and you just trying to chase it around. You do want to pick a strategy specific method again that you can get good at. And so your process is going to be built on a strategy, and it's really important that you have a
strategy again that suits you well. You understand it well, it agrees with kind of how you see the markets and your philosophies and how you like to operate anyway, and that's your starting point. And so if you like, I've got a free guide that I wrote. It's called the Perfect Trading Strategy Guide, but it's the nine Criteria. When you're looking at a strategy, it's like you want to run it through this criteria list to make sure that it is going to be a bit fit for you,
because that's your starting point. Is just what kind of method do I want to trade?
Yeah, and so for somebody starting out, what do you think is best?
Really, it's it's totally why open It all depends on who you are. Some people they're good with day trading. They can sit there and in front of the charts six to eight hours a day and love every minute of it. Others two three hours and past that it's diminishing returns big time. Some people sitting in front of the charts at all really sucks, and it's like, no, I want to be an end of day trader, or you know, like it's half an hour a day or
I'm just sitting down with the daily charts. I mean That's one of the best things about trading is you can choose your involvement in your working hours however you want. It really is going to be driven by your financial goals, what you wanted to get out of trading, what kind of return on your capital and your time do you enjoy it? But the trading hours, your your financial goals, your level of enjoying, your passion for the activity itself.
You need to answer those questions. Those are like core questions, and those are the same questions you would ask about any business you might be looking to get into it. Yeah, but trade definitely with trading, and you need to look at them. Don't just jump into it. And I want to make some money, and that's the only guidance you've got for making decisions. You get sucked in. It's buying somebody so much crap just cost you money.
I understand. You know, it's a serious commitment. And what about having like a business plan for trading?
Oh? Absolutely absolutely. And the cool thing is it doesn't have to be some big, twenty page, you know, formal you know business plan, Like if you're trying to start a you know, a fortune five five hundred company, it can be a pretty simple document, but you do need to go through it. And like we were talking about earlier, in standard business plan, the first section is the executive summary. Who's going to be executing this plan and what are
their qualifications? And so again you kind of need to again be brutally honest with yourself self awareness, be brutally honest with yourself. Am I a total rookie at this? Do I have some skills you know that I can bring to it that will transfer most people for most people know? So it's like, Okay, where do I need to How do I how do I become a good trader?
Where I do know what I'm doing so I'm not just taking a beating and getting a lot of hard lessons and waste the time and lost money and so yeah, but a business short business plan, you know, brutally honest. Am I even suited for this? Do I want to do it? And then yeah, what are my goals? What do I want to accomplish with trading? And you know how much am I willing to you know, possibly lose
with it and I'll be totally married to it. You always got to be trading with money that you you know you're okay with a losing the not going to screen up you know, cost you your marriage or anything. So but yeah, business plan, simple business plan. Uh and again the you know the basic structure. You know, what are you trying to achieve? What's your plan to achieve those goals?
Yeah? Gotcha?
Gotcha?
All right, So people want to find out more about you, connect with you on the web, Brian. Where is the best place to go?
Uh, inside out trading dot com. And if you like, if you go to inside out Trading dot com forward slash, what's l u t z, it's starting point. They can pick up the free trading Strategy Guide, all right and get a little quick intro into the thought process. But you know that's like an initial thought process to become a successful trade. That's a good starting point.
So all right, I like it. All right, Well, hey, thank you for coming on. If you got any questions for Brian myself. KL Atcarrieluts dot com is the email address, and you'll find a link to Brian's site on our site Financial Survival Network dot com. Just click the link, it'll take you right there. What we ask is if you're at the site, sign up for your free newsletter like over eighty thousand other FSN listeners and community members have Brian, we'll talk to you again.
Thanks for coming on, Hey, thanks for having me on and ap Plot everybody the chair looking to improve their lives and make some money along the way.
Thanks for listening to Carrie Letz's Financial Survival Network, your solution to today's trying times. For the latest, go to Financial Survivalnetwork dot com. Financial Survival Network now more than ever,