Tai: What’s up guys? This is Tai Zen , I’m broadcasting from San one put a week do I just turn the camera on without you guys knowing about it because we were in the middle discussing something that really hurt out of training and investing when all of us myself, oh David Fong has a baby.
David: Hey guys.
Tai: Shut up! Hello, Eric alright so one of the things that we all three of us knuckleheads make whenever we were coming up learning how to trade was that we haven’t learned from other people that already knew what they were doing.
So one of the things that people talk about in training that there are 3 groups of people in training. There are people that don’t know jack-shit about training, there are people out there.
That’s the largest group of people that talk about training and they don’t make one trade with real money. No more real money on the line all simulated, all simulators, all demo, all chart analysis and not 1 real money trade whether it’s in the stock market, the options market, futures market, the Bitcoin market.
It doesn’t matter they don’t trade with real money that’s them enjoy the traders out there on the Internet. Those guys or what I call bullshit traders so that you don’t learn shit from those people. Because real training is not made up of simulators, of plane money and stupid shit like that real trading is done with real money.
And then so that’s the first group of people that you want to avoid, is the people that are just talking about trading and actually doing real trading.
The second group of people who are the people that actually do trade, they actually do the trade but they actually don’t understand the mechanics of how trading works.
What I mean by that is that there are people all that in this world that doesn’t, I’ll use a car as an example, there are people that drive cars in this world, I mean there’s people that don’t lot of drive cars in this world, they just dump a lot of drivers never seen a car.
Like we were in an area and put a week on yesterday where there’s a bunch of people buying like dozens of horses everywhere, and there’s a bunch of kids there that they were like 12, 13 years old, here are young teenagers that were riding the horses.
Now obviously we don’t matter the right horses but at the same time, those young kids don’t want to drive a car even because they don’t need to, because the town they were living in was so small and it doesn’t look like they ever left that area of town.
So there are people that have never driven a car don’t know how to drive a car and then there are people that drive a car but don’t know how that engine, the transmission, the turbochargers, the fuel injectors, they don’t know how that works they know how to drive it you put him in a car show where the ignitions are giving the keys to the car they can drive it.
Those are the people I don’t believe it is really good to learn it. For me, because they just not operate it, so these are the traitors that they not trade, they not to make money, they legitimately train with real money and real bitcoins, real cryptocurrencies.
Eric: But they actually teach you how to lose money. You push this button right here and it goes on.
Tai: Well, the problem with learning from those people that just know how to trade but they don’t want to send mechanics and the principles and the fundamentals of trading are that you always have to follow them and you have to be around them all the time.
Like whatever the trades they take you pretty much have to mirror what they’re doing. When they get in, you got to get in. When they get out, you got to get out. So it’s a monthly see monkey do and there’s nothing wrong with it as long as you have one of those people around.
If you don’t have one of those people around you where you can mirror their trade or calling their trade or copy their trades, that is very difficult to be successful in trading then there’s a third group of people that understand the mechanics of training and they understand what makes trading work. How is it possible that you are wrong over half the time and still make me profitable.
Those are the people that understand my mechanics of trading and because they understand it, they’re able to explain it to someone else how it’s done. So even on our team, we have people on our team that understand all of us on the team know how to trade and we all not trade with real money.
However, we have only a small number of people on our team that actually understand the full mechanics of how trading is done and we would convey it to someone else what those mechanics are.
So one of the things that confuse the public you know that that we were all just discussing and that’s what prompted me to turn these cameras but you guys can follow along right is that in traditional training image of traditional people who each trading the message that they convey is very vague.
David: We were using the exam to do your due diligence.
Tai: What the “do your due diligence” mean, what does that mean? Okay, I want to do my due diligence what am I supposed to do well stick my thumb up my butter left what was that what does that mean.
Eric: “Do your due diligence” with me you gotta stare at the chart really hard.
Tai: What does that mean? What questions did you ask? Big statements like that doesn’t do anything for a beginning trader or an investor to succeed because they’re so freakin vague and confusing, because if you tell me “hey time go do your due diligence”, what am I supposed to do, what am I supposed to go get a new computer, go get a hardware wallet, what is the action that I need to take and what is the data that I’m looking for?
So be careful when you learn to trade from we’re investing from people that have vague statements like that. Everything in training and investing is a mathematical probability that’s what if it’s probability and math.
If anybody tells you if anything else it’s full of shit because training is a game of probability in which you stack the odds in your favor you stack the advantage inyour favor. And that’s what you know Levon always talks about push the edge we’re doing it what’s your edge. What is the edge that I have when I go into the markets. And that’s why the other thing when you talk about was whistling.
David: Racing mastering X.
I prefer risk managers management what the hell’s proper risk management you know when what I go through what I grew up in the hood proper risk management means you carry a gun.
So there’s when somebody talks of Robbie you shoot their ass that’s proper risk management make sure you carry a gun with you, but out here in the market. What is constitutes proper risk management and that is so vain that’s why you and here are talking about things that you have to do your due diligence and use proper risk management.
David: So cuz we don’t when you hear these puzzle worlds that actually don’t have specific actions.
Tai: Whenever you want to get out of this video is I whenever you talk to another trader ask for numbers ask for specific numbers. So here I’m going to give you an example of how I would ask another trader.
Let’s say I didn’t know David and I thought he was a traitor and he talked about using the proper risk management they when you say common risk management what specifically you talking about you talking money the next size how big is your stop-loss. How long the hold on to that position why would it go, what exactly are you talking about?
David: I actually properties management is a bunch of things, very specifically, your position sizing the amount that you’re gonna risk.
Tai: What is the position size?
David: Position size is a general term depending on what your training whether the stock creates a currency it’s token an options contract. So it’s all about how much are you willing to lose, that’s a particular trade.
Tai: So basically position size means that if I have a $100,000 portfolio. It means how much of that you have risk on that trailer that investment.
Okay you see how specific that was as that was concrete that was numerical it’s a mathematical number right so if I risk 10% of my entire portfolio on that 1 trade is that a good idea?
David: All right!
Tai: So the answer is no the answer is you can’t use like stupid.
David: Waste too much!
Tai: No that’s not gonna work mathematically that’s never gonna work if you keep risking 10% of your entire portfolio on 1 trade. It’s stupid, it’s absurd, that should be the answer.
You don’t say it shouldn’t be well let me think about this. No, it’s not. Mathematically over 300,000 or 500,000 trades, mathematically that will never work out if you risk 10% of your entire portfolio on 1 single trade.
Because if you keep doing that within just a few trades, if you’re long a few times you lose your entire portfolio and you’re not thinking them. That should be the answer.
Here’s high enforcement it’s much its numbers training is a numbers game. It’s a numbers game and the more accurate that you are on the numbers that you’re dealing with the more accurate that you can reduce risk and increase your rewards and trade.
You don’t think so that’s the examples that I want to share with you guys right so that you should be able to whenever you hear people talk about trading it’s not just about thinking.
What that’s the right ICO to get in, that’s the right if I let you guys pick the ICO and the Crypto that I get in as well I get to control the best size, my position size, and when I get out.
I’m gonna still make money even if you are the ones that and if you’re the one that’s picking the Crypto. One of the stock or the Forex. So when we talk about risk management, we’re talking about specific numbers, we’re not talking about you know don’t use the terminology.
When you hear somebody say that ask for clarification you don’t say like what do you mean by that. When I trade options, how many times what’re the most contracts I should trade as a beginner.
If I’m not a profitable trader like you are how what is it don’t trade more than this number of contracts at any given time.
Tai: Don’t drink 1 in 3 contracts. David you train for X don’t take this movie more lives or stocks don’t take this many more shares. That’s what you guys when you’re asking another trader. Don’t ask them for their opinions ask for their numbers, how much have you risked them on that trade.
You say that you know so-and-so coin is really good or someone so stock is really good. How much of your money are you putting on it are you putting $10,000 on you putting $100,000 on it or what percentage of your entire portfolio or are you putting into that trade to see what works.
Eric: So, it’s not comfortable the outside just giving percentage proposed, a position percentages.
Tai: The way like most a lot of times people ask me how many bitcoins do you have? It doesn’t matter how many Bitcoins I have, what’s important is that I have less than 4% of my entire portfolio in Bitcoins.
I don’t think in 2017, I don’t think I ever had more than 4 or at most 5% of my entire portfolio in Bitcoins and now going into 2018 it’s even less than like 2% of my entire portfolio.
It’s 2 or 3% any given time fluctuates, depending upon the price, but that’s what when somebody asked me that’s what I share with them and that’s the correct answer is this percentage of my portfolio is in this. So that indicates that I’m not willing to risk more than 2% of my entire portfolio on 1 crypto on the web least, not on Bitcoin.
Now even grow to like 5 or 10%, that’s great and everything how we balance my portfolio but initial the initial investment how much of it is in there?
Eric: Now, before comparison, the traditional trails for comparison in the traditional training world the best traders on Wall Street the very best friends in the world will not risk more than 2 their accountant any one position.
And these are counter the aggressive position so if you got out there you’re talking to your buddies who are playing 5% or 10% of their accounts their portfolio on 1 position you already know.
Tai: There are people out there that risk 5% 10% 20% 50% 100% of portfolio on 1 crypto. I did, I mean you have seen videos in the past where I talked about putting all my nearly all my life savings into Bitcoin.
But keep in mind at the time that I did that Bitcoin was the only 1 that was around. There was other bullshit all coins and stuff like that but it was not the volume on him you couldn’t even put more than a few hundred dollars or a thousand bucks into it so if you want to put $5 $10 $20 $30 $50,000 into crypto.
The only one that you could do that on was Bitcoin and that’s why I did it I would never do that again today one is because there are 1,300 cryptocurrencies to choose fun.
Second is that bitcoins, not you know performing the way that it did back when I got into it. So anything else, thanks for watching this video we were just discussing late terns and crypto.
I the thing you want to get out of these videos that make sure you ask for clear concrete numbers when talking to another traitor thanks for watching this video and you want real-world training experience and make sure you go to www.markzware.com.
Make sure you follow me on Twitter at hair ties then thanks for watching these real I’ll see you know next one.