How To Become A Profitable Trader - Thomas Becker (aka Tomikazi)

In this episode, we are joined by Thomas Becker, aka Tomikazi, the CEO & Founder of The Financial Cloud.

Tom has a fascinating background with experience in sales, programming and law. This rare combination gives him a unique perspective on financial markets.

His focus now is The Financial Cloud where there is a community of thousands of students learning how to trade profitably.

We dig into his journey as a trader and we discuss a ton of things like:

• how he was able to predict many of the short squeezes that happened this year
• what makes a trader successful
• why do most people lose money
• what are realistic returns to target 
• and much more

Check out The Financial Cloud, my favorite resource for traders. Get a 7 day FREE trial & 50% off the first month by using promo code "RICH".

All show notes & resources available here -> https://boundtoberich.com/tomikazi

You can also watch the video version of this interview on YouTube -> https://youtu.be/aqVc5vvvtdA

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Transcript

This transcript was automatically generated using Descript.

[00:00:00] Welcome to The Bound to Be Rich podcast, where I attempt to reverse engineer people who seem to be successful, no matter the circumstances, so that you can apply those lessons to your own life. I'm your host, is Mel Hummed. One quick thing before we get started. I am starting my own email newsletter and I would love for you to join it.

It's going to be like a personal note for me to my friends, of all the best things that have come across that month from hacks and tips, interesting stories, products, books, ways to make money, and who knows what else. It's totally freight, and if you don't like it, you can always opt out at any time, so there's no downside.

The link to join is in the show notes, and I hope to see you on the list. In this episode, we are joined by Thomas Becker, AKA Tokai, the CEO and founder of the Financial Cloud. Tom has a fascinating background with experience in sales programming and law. In my opinion, this rare combination gives them a unique perspective on financial markets.

His focus now is the financial cloud where there's a community of thousands of students learning how to trade [00:01:00] profitably. We dig into his journey as a trader and we discuss a ton of different things, like how he was able to predict many of the short squeezes that happened this year. What makes a trader successful?

Why do most people actually end up losing money? What are realistic returns to target? And much, much more. Let's dive in.

Thomas, thanks so much for joining the show. Appreciate you making the time. Absolutely. So, uh, it's, it was hard. Like I said before, it was hard to find a lot of information on you, but I, I did some digging. Um, and I think I relate to you on a couple things. If I have this correct, you, you have a daughter? I do.

Right. And you've got another one on the way two weeks from now? Yeah. Maybe today. Who knows? . It's uh, she's been having contractions, [00:02:00] so I might get a call in the middle of this. You never know. , right? It'll make for some great, Yeah, I'd be like, Oh, gotta go. You know what's funny was when I was having my second, I uh, had to reshuffle a lot of interviews that I had scheduled.

Sure. Uh, thankfully everyone's pretty understanding. But my second one was a crazy story where, um, literally was about to give birth on the way to the hospital. But we'll save that story for another time. Um, do you know what it is? The gender? Yeah. I'm gonna have another girl. So all girls. Nice. Lucky guy.

Lucky guy. Mm-hmm. . Um, 

Managing your Family & Work life

I'm curious for someone working from home, cuz I have gone through this lately. How do you manage that as a father and then with a pregnant wife and that with another one comment cuz it was, the second one was very challenging for me. I'm looking forward to it, but not handling the, the mix of work and with the wife.

I mean, she works from home too, so, and we have a daycare that, you know, one of [00:03:00] our daughters will go to. But um, we're gonna kind of take it day by day and see how it develops. But, you know, I work all day and then at night I, I worked as well because there's always like, during the day we're trading and everything and then at night is when we're doing the developing and it's a lot of time and having another kid is gonna be extremely challenging to see if I could still do everything, but we'll make it work.

We always do can't. You probably can't just see though. Um, the first couple months is gonna, I mean from my experience it was just really rough. And I think the hard part about like, I was looking at talking to my brother, uh, they're younger. You got all the free time in the world. Yeah. And I, I reminisce about like time I wasted cuz now it's like how do you squeeze everything into such a small, small limit amount of time is a.

a challenge that I haven't really solved yet. It's like, I see, I wish I knew now when I knew when I was 24, you know, and I could do everything that I'm doing now and have it done then. But you, you can't do that. You can't go back in time. You get to take what you can now and you do the best with it. Right, [00:04:00] right, right.

Your Previous Career path

Well, what was your career before where you were developer before? Uh, I have a very, you could write a book about my careers, , I should say careers. So like, I have a dual bachelor of science in history and political science, but I actually went to college for computer science. Um, but I hated the classroom learning style of trying to learn code and a classroom and like watching them write code on a chalkboard and stuff just doesn't work for me.

Like I have to do it and learn how to do it. Like I'm a hands on learner. So, um, I was originally gonna be like when I was in the 1990s and early two thousands when I went to college, um, I figured internet law and coding law was gonna be the future of. Law. So I always wanted to be a coding lawyer. So basically I would learn computer science and then I would go get my advanced degree in law.

And so that was kind of like my career path I was gonna take. Uh, fortunately life doesn't always turn out exactly how you planned when you're a kid, but, um, so I did two years of [00:05:00] computer science and ended up switching my major to history in political science just to get my degree so that I could go to law school.

Um, and then I took the LSAT scored in the top 8%. I think I was 92, 90 second percentile. So did really well. And then I interviewed probably 10 different lawyers to make sure, like, cuz law school's not cheap, I was like, I'm about to spend 150 grand, is this exactly what I want to do? So I interviewed a bunch of high end lawyers, some corporate lawyers.

Um, I had some connections and um, some corporations or some lawyers agreed to let me interview 'em and it, I was kind of on the fence, so I was like, well, let me take a year and work and. Law school will always be there if I want to go back. And I got into sales and I love sales. I was good at it. Did sales for 15 years before starting, uh, the financial cloud.

So, um, that's been my career last 15 years. I've sold office supplies. I've sold, uh, I worked with the government and did government contracting for road repairs. [00:06:00] I've done, uh, oil, worked in the oil petroleum industry doing, uh, maintenance products for, uh, dealerships and ran the whole state of, uh, central state of Wisconsin, uh, Madison area.

Had a big territory there where I was a manager. The last couple years it's been a good experience, you know, managing a sales team as well as doing sales. You know, you meet a lot of people. Um, it's been the, it's been a crazy career though. That's a definitely, uh, interesting intersection of different things.

Are you a, do you code now too, a D program? Very limited, uh, be honest, like over 15 years my coding skills have deteriorated. I haven't kept up with it. So I have a whole team that I work with them and they, I tell them what I want. Um, you know, I basically, I do the algorithms and I lay them out and all that.

And then they do it in the different languages that we need for whatever, uh, medium that we need to present it on. So we have, [00:07:00] you know, probably five different languages that we use between everything. Yeah. I haven't really met anyone with like, for you to score that high on the LSATs and you're obviously clearly very intelligent.

Uh, but then to not do that and go into sales is not common. Well, um, do you have, The real reason I didn't do it is the lawyers are like, Well, you're gonna make a lot of money. Right. But not at right away. Say, they're like, You're probably gonna need to spend a couple years. Working for the government, uh, making 40, 50 K a year and you're gonna be working a hundred, 120 hours a week.

And then you can go into private and make, you know, 2 50, 300, but then you're gonna work even more. And then when you're 40, 50, when you become a partner, then you start working less. And I was like, so I'm gonna be working a hundred hours a week. Uh, not making a lot of money right outta college. And a 20, 20 year old me was like, That sounds awful,

So I turned out you could dig the same amount of money in sales work at 40, 50 hours a week. I was like, That sounds great. [00:08:00] did.

Sales Tips

Do you have any general sales tips for people like, cuz that I found that to be a skill that applies in anything like I I'm sure you use it for the Oh yeah, absolutely. I mean, my biggest asset and is always being truthful and putting myself in the other person's shoes.

Like, okay, what would I want a salesman to say to me basically? So, you know, being personable, opening up and not bullshitting people cuz people can. People can sense, you know, when, when you're bullshitting them and you're just trying to sell them something, if you generally believe in the product, that's the step one.

So you have to believe first because if you don't believe, there's no reason anyone else is gonna believe. So I have found, like I've tried to sell different things and the things that I was really good at were the products that I've truly believed in. And when I tried to sell stuff that I didn't believe in, I was a short run.

Like, I was like, I can't do this. I just don't like, I got it. Like I think I had a three month stretch where I tried to sell phone book advertising and I was like, I can't do this. This just isn't a thing anymore. . Yeah, that makes sense. So, alright, [00:09:00] so I'm, I'm cur, this might be a good segue because 

Pioneering the Financial Cloud

I'm curious about the origin story for the financial cloud.

Um, yeah, how it started, where it came from and specifically I guess to kick it off is I was floating around these discord groups. Um, I don't have to mention them by name, but there's a few of them that I was in and I saw all the people that you have on your board and your team. I saw them in the other groups.

You were more, I might be wrong, This is just my, my perception, it seemed like you were more under the radar in terms of like comparison, in comparison to them, uh, being out there as much, yet you were able to recruit them and start this your own big things. So I'm just curious, how did that start and how were you able to bring in all these great people?

So especially if you seem like you were more under the radar. I was more centralized in like two or three different groups. So maybe my, like my reach wasn't as far as them and I wasn't as big on social media until recently in the last year or so. So I've only been doing [00:10:00] the social media, Twitter, um, Facebook, that kind of thing, you know, I'm never really big into it, but you know, you kind of need it these days, so here we are.

Yeah. Um, so I always had great relationships with all of 'em. You know, I've been trading with them for years. Um, all of 'em that are on my team at least two, three years for most of them, and some of them I've met more recently. Um, just because now the word's getting out, obviously, um, with what we're doing.

So we're attracting really bright and really good talent now. Um, so I've always had good conversations and we've had private groups that you probably aren't aware of, you know, maybe a hundred person discords that we just would chat with each other. So we've always had the idea of, hey, if everything, if anything ever, uh, came up where we could work together, we always agreed to do it.

So, you know, it would originally started where it was just the newsletter where we're like, Hey, you know, , we can write a couple ideas every week. People can learn, people can make money. Um, and in return we can, you know, [00:11:00] it's be like a hobby where we could make a little money as well. So it's like if you're really good at something, you should never do it for free was something I was always taught.

So, um, that was kind of where like, you know, I've been trading for five years and I've always wanted to do it full time. And so this was a way for us to, and my wife main is like, well your trading, it's not guaranteed. She's like, If you're gonna give up your full time job, where, you know, I had was doing really well and I was making plenty to live on where I didn't need to give it up.

And, you know, I could have done it probably another 10 years and been happy, but 

Why Working for FREE!

this is way more fun doing this in my opinion and I'm so happy I took the plunge in doing it. So before you started this, you were, I'm, I'm curious cuz this is not something I asked Thomas too. Um, when you're in these disco groups, like you mentioned you were in a couple, you were more centralized.

You, you're kind of just working for free, right? Yep. What, what was the draw or the appeal to you? Cuz you were, you were doing well in sales, you obviously had other stuff going on. Why were you willing to work for free there [00:12:00] when you weren't willing to work at the law firm for low money? I think I just enjoyed it.

I mean, it was just the, the community. Um, I really enjoyed the community hanging out with people. It's like, uh, when you go bowling, you don't make money going bowling. Right. You enjoy doing it. Yeah. It's kind of the same mentality where it's like, Hey, we're all hanging out. We're having fun, you know, we're making memes and we're making money and because, you know, we're sharing trading ideas and things like that.

So it was a way to potentially make money through trading, but also having fun at the same time was the kind of the way I approached it. Yeah. And I'm glad that you mentioned the, um, so I'm, 

Trading is unpredictable 

I'm in a similar position where I've been getting most of my income from trading. I'm looking to buy a home, but I don't look at the trading income as, uh, I can't count on it No.

To pay a 30 year mortgage. Right. So it's all about generating like cash flow elsewhere that, you know, is coming in For sure. To pay that mortgage and then whatever you make, I've had some monster wins. Yep. And you can't count on that. And it's just unpredictable when that's going Well, the thing is, is you can [00:13:00] be profitable for years and then you have an unforeseen black swan event, you know, like Covid last year, like, like he, there were signs that it was happening, but then all of a sudden one day boom, limit down, limit down, limit down, and people got wiped out and.

Having the trading income is great and you could save and do that, but having a reliable income, building a business, you should always diversify. You should never put all your eggs in one basket. Um, having multiple streams of income is a hundred percent the way to go. And I think most people should have multiple streams of income, even if you're working full time, you know, having that one full-time job is great, but what happens if you lose it and now you have no income, there's no backup.

So, you know, trading is one stream of income. Uh, TFC is another. And you know, I have a couple other streams of income too that I do on the side. Um, if you wanna secure your, like what? Yeah. Uh, you like crypto mining, things like that. Uh, Nice. Yeah. We're thinking about diversifying into different things through TFC as well to protect the business.

You [00:14:00] know, we're talking about. Getting into swag, you know, if we're talking about, we're designing different swag, we're probably not gonna make any money on that. But you know, that's more to give back to the community cuz people have been asking us for some cool shirts and stuff. Um, but yeah, Crypto mining's a big one that I've been getting more and more into.

Uh, you know, you kind of see crypto people talking about it as the future. It's super interesting. So that's, uh, so on that note, I know I'm just following my curiosity though. Sure. So we might, we might not follow a straight line here, but I think I saw Jante, I was talking to him about mining. Did you partner with him on mining or did you guys do it separately?

Uh, we worked together on it, but we have separate, we don't have like a business together on it. We've talked about starting like a crypto mining business together and we're still kind of figuring out. The problem is it's so hard to get minors right now, um, with the computer with. with this chip shortage, it's like you have to pay so much money to get the good products.

Right now it's like, okay, well we have a war chest where if the prices [00:15:00] came down, we would consider it, but the, the investment you would need to make based on prices and because, you know, crypto is so volatile. It's good to start small and scale up as you make profits, but putting like half a million dollars into a crypto mining business where you're gonna pay 200% retail price on a minor is, it's tough right now, to be honest with you.

Agreed. And I remember going back and forth with him on it as well. And the reason that, and another reason

Stating a crypto mining business

I didn't pull the trigger is that the whole Ethereum mining going away soon. Yeah. Kind of. Yeah. That gave me some pause. Yeah, you can mine other coins, but I just, I don't know them as well, so I'm like, you know what, let me wait this out.

I'm not gonna pay 200% on the, on the graphics cards with Ethereum mining going away in the next year or two. It didn't make sense to me from that point of view. Well, exactly. I mean, you have. Staking where it's like, okay, why don't we just buy a bunch of Ethereum and stake it Then at the same time then you, you don't even need the equipment and you're getting, you know, eight to 10% back a year.[00:16:00] 

Excuse, excuse me. But, um, I dunno, it's, you know, you always gotta keep the, the options open, but, um, right now doesn't seem like the, seems like you would overpay and get an underdeveloped returns. So it's like, okay, what's the return on capital look like there? Should I just go buy a bunch of real estate that's booming right now and then flip that in a year?

Um, you know, there's all different types of areas that you can do that. And that's, you know, real estate is another one where I've made small investments in land around where I live. So, you know, when you see I have. Good connections in the banking and real estate in, in Wisconsin. So sometimes if a property comes up, you know, on a foreclosure or something like that, which you haven't been able to do because people can't foreclose on stuff.

But now that the moratorium is being lifted more and more, there's gonna be a lot of good real estate, uh, opportunities coming up. But, uh, you know, it's kind of similar to, to trading, but not quite the same, you know, in terms of investment and long [00:17:00] term, are you,

Your Real estate business

are you just buying land? Are you buying things to position as rentals or what are you, what are you looking to do in the real estate?

Are you flipping? Uh, currently right now I'm just doing, uh, land and development areas. So basically, uh, you know, central Wisconsin, things like that where people like to travel and develop around like water and things like, You could sometimes get some good deals. And then, you know, in a few years when those you, you have big, uh, investors come and develop those areas, you can flip the land for a nice premium, you know, sometimes two, 300% if you can get a good price on it.

You know, entry price is just as important as exit price. , I'm, I'm sure that that applies elsewhere too. Yeah. So

How to be a successful trader?

how do, you mentioned the limit downs during covid and, and the unstability, the instability of the income. How do you guard against that? Like what, what do you do or what's your advice to people?

Or you made money trading, do you take it out, put it somewhere else? Do you use bigger size to make more money? Like how do you handle, uh, making the money in trading? There's a great quote from Game of Thrones where they say chaos can be a [00:18:00] ladder and you can actually, wealth, generational wealth was made during the Covid crash as well as the rise up.

So if you were persisting yourself to make money on the way down, you could then, if you caught the bottom flip that. Money you just made and then ride it all the way back up. So, I mean, following some of the tools that we have now, I wish I had 'em then because we would've been a lot more profitable. We had some of the tools that we have then.

But the retail tools as well as the tools that we are making is nothing like we've had in the last couple years. You see a bunch of different services coming out now that are becoming more and more popular, that are bringing the tools that institutions had. Now retail traders are having 'em and that's why it's becoming more popular and that's why the retail investor now is so much smarter than they were five years ago because now they actually have tools that they can day trade, they can swing trade more properly than it's just, you know, a lot of times it was like throwing a dart at a dart board and hoping the market makers let us make money.

You know? You ever feel that way? ? Yeah. [00:19:00] It's still . It's like, I don't know what I'm, like, there's days where I'm like, I don't know what I'm doing anymore. Then like a day later it's like, yeah, I just had a thousand percent wind. You know? It's like, yeah, this feels great. The, the roller coaster of trading is, it's fun.

Um, but it can, it can get to you if you, if you have, if you don't manage your risk properly. You know, risk profile is something I talk about a lot and if you don't know your risk profile and you let your, your day trading affect your, your life, then you're doing it wrong, in my opinion. Like if you're taking too much risk and it's personally affecting you and mentally affecting you, you need to scale back and you need to.

Probably make a better plan in my opinion. Yeah, I, I think I mentioned this too, in t's episode, and by the way, people that haven't heard Thomas Watts and John Ta Porter's episode, uh, you can scroll back and and check them out. But I think I said to Jte that, um, you gotta be a little sick in the head to be a trader because being able to handle these volatile swings where you're down 80% one day, up a thousand percent the next day, [00:20:00] um, it's mentally taxing.

And I think that's, to me, the main appeal of something like the financial cloud is the community element. Um, particularly like listening to you guys on the live chat, um, having other people that, cuz it's like a lonely thing that you're doing by yourself at home. Yeah. The community aspect is nice. It's, it's huge to me.

Um, otherwise you kind of like second guess yourself, so having people that are level headed that you can listen to or bounce ideas off of is very valuable. Yeah. I'm looking at the lab chat right now. I think there's a couple hundred people in it and. looks like. How do you guys handle the, now by the way, do you let anyone speak or is it just, uh, the traders that you have on your team?

Team? So we originally had let everyone speak. It became too much and then we switched to push to talk and that became too much. So now we have basically approved people. So, uh, the financial cloud team can talk as well as people that we have vetted, that we believe they're, their knowledge is beneficial to everyone hearing.

So, um, we do have a, we do have a chat where people can ask us questions and we'll answer them on voice. So it's [00:21:00] just a voice q and a. Um, it's been working really well. We've been doing that for about a month and a half now. So as we've grown and we've had to grow with it and make changes and sometimes, uh, I don't think everyone likes that they can't talk.

But unfortunately, you know, you gotta do what's best for the majority of people. So, you know, having the ability to still ask us text questions still works really well. And we've had some good responses and people have said the, the value of the information, um, has gone up tremendously. So. . Agreed. And

Trade short squeeze

I, you mentioned this whole trend towards like power to the retail investor, um, and that's kind of manifested itself, itself in all these, uh, short squeezes that are, have been happening.

So you, you're kind of like, uh, becoming the short squeeze experts. Yeah. It seems like to me you've really focused on this and I, I've watched some of the videos that you made explaining it, so I'm curious to just hear you riff on, um, like it started with Game Stop and amc Yeah. And those, like, I had massive wins with amc.

Like that was ridiculous. Yeah. We got an AMC c I think around $4, and we've been, [00:22:00] we've, we actually have a resident expert in amc. Um, believe it or not, he is a lawyer and codes, so he took my dream job and did it for himself. . That was kind of how I connected with him. It was like, Dude, you literally were doing what I was going to do, so, Right.

He made himself a ton of money on AMC back in February, March, and then he kept, he bought LEAPS at the time. wrote it all the way down and then wrote it all the way back up. And he still is holding, you know, he's kind of the, the dv, the deep value of amc. He's like the, the guy for AMC that, you know, he was the Deep Value was the guy for, what is his name now?

Rapid Kitty or something. Um, yeah, but uh, the famous guy for Game Star, I think he tend to change his name cuz he had a swear word in it. But, uh, he, he made what? 40, 50 million off game stop. And that's a crazy story like that blew up retail trading. It really, you know, us catching that too was huge for all the people that were, you know, when we were still a [00:23:00] little bit newer cuz that was right when we were starting out and right when we were testing out.

A lot of that was right when we were testing out the short squeeze stuff. Um, and it worked really well. It's exciting. So do you think that that's like those, those are like one time fads or do you think that it's, it's now spreading to all these other stocks? Like I don't even know what these companies are anymore?

Well, short squeezes are not a new thing. Game stop. Just because. , everyone was at home. Trading became a phenomenon. And with Reddit, um, and the Wall Street bets, you know, putting a, pretty much putting a flashlight on it, a beacon on it. Um, it blew up in the media, but Short Squeeze has been around for, since the stock bar.

It's been around since you've been able to short, you know, back in the day. I think, I still think Volkswagen is the greatest short squeeze of all time. I don't know if you're familiar with the Volkswagen Squeeze. Um, I remember my first squeeze I was part of was actually Tilray. It was one of the most exciting days.

I was literally working, so I was working for a food delivery company, um, and I was delivering food and I'm sitting there on my Robin Hood app. This was my first like, literally [00:24:00] I think like one of my first months of trading when I'm like the new guy, uh, years ago. And I'm like, Well, it's like, oh, til rates, it's at $30.

Oh, it's at a hundred dollars. Oh, it's at $300. Same day. . I was like, What is going on? It got halted at like one 50. It opened up at two 50, got halted, opened up at 300, and then at, by the end of the day it was back at a hundred dollars. I was like, How do people trade this? Like , I'd sit there. It's crazy.

That's my next question and I'll link to the video, um, 

How to trade short squeeze?

for everybody in the show notes of you explaining short squeezes, but how do you find, I, I guess it's a two-prong question. Can you find them? If so, like what do you look for and how do you avoid getting caught in the crossfire? Cause eventually a lot of them drop significantly so.

I actually have great recent stories on this. You know, we found just recently S P R T at e r, um, specifically, those are really good short squeezes and we're following some, some other ones, um, currently as well. So, uh, for a short squeeze to happen, you need to [00:25:00] have people that have shorted it, right? So basically, if you're known, familiar with shorting and say if you go to a bank and you take out money, um, you have to pay that back with interest, right?

So when you're shorting a stock, let's say you own the stock and you're not doing anything with it, you can loan that share out to someone and they can do whatever, but eventually they have to give the share back to you, and then you charge them interest for however long they hold it, right? So typically what we look for is a high short interest, and then we wanna look at what that interest rate is called, cost to borrow.

So let's say like for S P R T, for instance, we're like, Oh my God, this thing is 60, 70% shorted. And it also has a 300% annual short interest. So every day someone holds it, it's costing them 1% and the stocks going up. So it went from $4 to $8 to $10 to $20. And , I remember, this is a great story, I haven't told anyone this, but um, one of my traders [00:26:00] called me like 10 minutes in after markets and he is like, Hey Tom, it's at $25 after hours right now.

I have a rather sizable position. Um, should I sell it right now? I'm up huge cuz I don't wanna lose the money. And I was like, It's gonna go . I was like, I hate, I was like, I hate to tell you not to, not to sell it and then it doesn't go. But I was like, everything in my blood and all my, my spider senses, I was like, it's gonna go, next day it hit $60.

And he's like, he made $160,000 on it. I was like, it's crazy. We had multiple people make a hundred grand on that squeeze. And which stock was that specific? Uh, support.com. So that's actually G R E E now. Yeah, it was a hundred percent shorted by the way when it got switched to g e. It's crazy thing, you know, some people got caught in that cuz they kept seeing, you know, I even got caught a little bit in it cuz I was playing with some runners on it.

But um, you know, I made a ton of money on it, you know, I turned two K into 50 K on [00:27:00] it, you know, it was a big story. Um, but how do you know when the end, I guess is probably what you're probably wondering as well? Typically when you get those major gap up like that, um, and then it becomes plastered all over the internet.

That's when all the shorts are like, yeah, yeah, I'm gonna short this thing down even more. And that's why you saw it go from 50, 60% and the short interest went down to probably like 43%, but then it went all the way up to 95%, a hundred percent because the shorts just kept tacking it. Cuz once the institutions, there's like Delta and Gama hedging as well.

So once the institutions know that the top is in. And they don't have to cover anymore. They'll just short it all the way down. So I mean, people that shorted at 50, $60 made a killing on it cuz I think G I'd have to look at where now. But I mean that thing's down probably 70% since the top and so people made a killing on it.

So you can make money, like I said, on the way up and the way down. As long as you can know the pivot points is the big part. [00:28:00] It, it can get complicated too. Like I remember when game stop went crazy, I actually opened a small put position on it and the stock went up the next day, but my put position went up as well.

Yeah, and I think a lot of people don't understand, like I guess the IV went up to applied volatility. Yeah. So as something moves faster and faster, the options pricing have to increase to comp to basically account for that. So yeah, I , I remember Tay actually put an incredible amount of money into puts on Game Stop and the stock didn't go up.

Or didn't really go down, but he still was profitable on it. Same, similar to what you did. He's like, Dude, I made money on this. The stocks up $10. I was like, How . That's why, that's why I was like, you know what? Let me sell this cuz uh, it doesn't make sense, but let me just get out of this cause it's not going in my direction.

Avoid Blowing Up Your Trading Account

Um, so you mentioned that small account challenge, uh, where you took that 2000, I think it was up to 50 at one point. Yep. Um, and that was primarily for short squeezes, which we just talked about, but almost everyone I talked to, this is why I [00:29:00] like you guys. You guys are very authentic and real and I think people have these images of grand door with trading, Oh, I'm gonna make all this money right away.

Yeah, that's a one that's almost year thing. Like it doesn't happen every day, but that's why almost every successful trader I talk to have stories of blown accounts, uh, especially when they first start out. So I guess can you talk to people about the reality of learning to trade? Yeah. Um, is it inevitable that you blown some accounts in the beginning while you learn.

And why did people blow these accounts in the beginning, and how do you avoid that? Yeah. One, uh, my first newsletter I wrote, uh, basically the cycle of trading for a new, new trader. You know, the seven stages of, uh, trading denial, I call it . But basically you start out, you know, you making a, you, you do your education, you make a plan, you make your first trade, it goes well, you make some money, and it gets addicting.

So you eventually, you get so comfortable in your trades that you take more risk. You take, uh, larger [00:30:00] positions with shorter time periods. So you, you're all of a sudden opening yourself up for major losses and you get overconfident and you make a giant play and it doesn't work out, and then you blow up your account because you're one, refuse to believe you're wrong.

Two, you're down so much you say, F it, I can't lose anymore. I might as well hold up now. And basically you're, you're praying to the stock gods that, you know, you're like, f it, I might as well write it out now. And then you're like, All right, I'll sell it. 95% for 95% loss, . And then it always happens where it goes up the next day.

Right. . But it's just, it's a psychological thing where people, they get comfortable and complacent and they want to take more risk because they're like, one, they get impatient or two, it's going well. They, they saying, And I'm gonna put my foot on the gas, and then they end up burning the car up, you know, or blowing a gasket or something like that.

So, you know, I, I have stories where I've blown accounts. When I first started trading, that's actually why I started TFC was because I was working full time. [00:31:00] Um, I didn't have the tools to sit there and look at my phone for five minutes and make a, a profitable trade, cuz I was like, Oh, this looks really good.

Just looking at my phone. Um, if I didn't have time to do the research. How am I supposed to really know that's a good trade? So I would get into a trade and then I would come out of a meeting or something and see I'm down 20% and be like, Oh man, I should probably cut my losses. It's just I didn't have the information, um, available that I would need to make profitable trades while working full time.

So I was like, What can I do to do that? So that was the idea with the newsletter is give people the plan written out they can follow the trade plan. And then eventually I was like, Well, what if we could make something that would basically trade for you? Right now there's algorithm algorithms out there that have certain win rights and you know, they trade shares and stuff like that.

But what if we could make an Autotrader that could trade options at a high profitability rate and you would never have to do [00:32:00] anything. You just hook it up. Tell it exactly your risk profile, what you're comfortable with, you know, and go from there. So everything that we're doing in terms of the coding size is end, is working towards the end goal.

Um, so all the algorithms we make, all the stat tracking we make is to improve that. And now

Message from Sponsors.

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All right, let's get back to the show. Now, obviously that sounds like the holy grail. Yes. Having automated that is the holy grail trading and all that. But you can imagine people are skeptical about stuff like that, Like how there, there're, they're naturally like just not, how,

Why do most people lose money?

how can a computer trade better than like smart people?

Um, so I, I guess obviously it's proprietary of the algorithm, uh, but generally how do you dress that? How can I tru trust this machine with my money to trade for me? Like people fail all the time. Well, machines don't have emotions attached to 'em. One of the biggest machines aren't impatient and they don't have emotions.

Those are the two biggest things that hold traders back is their emotions. Um, as well as their ability to not be patient. You. , even my own team comes at me sometimes when they're having a bad day and they're like, Tom, I had this great plan and you know, and we call it paper hands, basically, where they didn't trust their own [00:35:00] plan because they got impatient.

You know, they see their position sized down 20% and then the trade actually follows their plan to the T. But because they got scared and they closed, closed out their position, just to see that position rise up, you know, a few days later, you know, we're all human. You know, when you see yourself down, you're like, I should cut my losses now instead of, Cause you're like, What if it doesn't go up?

What if my plan doesn't work? You know, not trusting yourself is a big human flaw, and a machine doesn't know whether to trust itself or not. It just knows what to do. It's like, okay, this is the plan, I'm gonna execute it. So like having proper algorithms. Well, the number one thing we can do, So all the stat driving, all the, the, all of the machine learning that we're doing, everything that we're doing, all the flow crunching, the technical analysis, the news sentiment, all that stuff that we're putting into our algorithms, um, is to say, Okay, we know this one has an 80% [00:36:00] win rate.

We know on average it moves this much. We know on the losses it moves down this much. So then we can set proper stop losses, proper take profits, um, and so on and so forth. So when it just comes down to math and data crunching, um, you just play the statistical probabilities. It's like when you're counting cards, you just play in the statistical probabilities, right?

When you go to a casino, I mean, the stock market's not much different than a casino. You're just playing the probabilities like. technical analysis, you know, like rising wedges, cup and handles all have statistical probabilities. They're gonna work out, so you know how to position size properly and how to stop, how do you have your stop losses properly based on the statistics.

So that's why like math and computer coding go so well with the stock market that, you know, a lot of people, some people are emotional traders and momentum traders and things like that. I'm more of a, a data driven trader. You know, I like the, the data behind it. I [00:37:00] like to understand why something happens.

Any Formula to BEAT the market

Is it possible to come up with a formula to beat the market or is that just like an unattainable goal? I think we already have it, to be honest. I just think, uh, properly using it is sometimes what we have to do. So, I mean, most of our algorithms are at a 70% win rate and people are like, What's a win rate?

Right? So that means 70% of the time, You're gonna probably make five to 10% on an option. Right. People always have this, like you talked earlier in the show about a grandeur of making the thousand, 2000%. Like, like I've had trades where I've made 25000% on 'em before. Uh, I don't know. I, I think I have the record in the Discord.

I think it's 28,000 on a trade. $800 to a quarter million overnight. That's a, that's a good story. Wow. In one day. Yeah. Overnight. So, which, which trait was that? That was one, that was actually when I first started out, that's what got me addicted. So I've told this story a lot, but maybe not to [00:38:00] your listeners, but when I first started out, uh, I.

I saw basically a falling wedge on Cigna, and I was like, Oh, this looks nice. You know, I'm gonna buy a couple hundred contracts. They're 6 cents Eachs, right? And so I bought, I think it was like 122 contracts and next day it went down. And I was like, Well, that was a waste of a thousand dollars, right? I might as well hold on now, right?

Hope and pray, right? . And that night, Trump came out and signed a new health insurance law, and all of the health insurance stocks went out up 15% overnight. So Cigna went up like $30. So now my 7 cent contracts were $22 a piece, and I had 120 of 'em. I was like, I'm gonna go buy a Ferrari , but I'm sure, I'm sure you were more sensitive.

No, I paid off my wife's student loans and a bunch of my loans and I yoed a hundred K and lost that at, so that, that's how you blow up an account as you get overconfidence. So I took half of the money out and then I traded the [00:39:00] other half and I ended up blowing up that account and that was when I took, I stopped trading after that.

Cause I was like, Once you lose a hundred k, that's, uh, that changes you. So I don't look at numbers like I do now. I did back then, like numbers to me are just like numbers on a screen now. It's weird. Yeah, it's kind of like a, a video gaming. You have to get detached. But I, I had a similar story and I haven't shared this before.

Um, I actually that, I dunno if you remember the day Fastly dropped by Susie. Yeah, I had a ton of puts on Oh, nice. Firing that week and I think it was a Thursday that that happened. Um, and it similar story was like a few cents and it ended up being like 20, $30 contract. So it was a massive six figure win.

But. similar to you All right? Yeah. You saw the falling wedge, but it was really news driven. Yes. So like, did you look at that and say like, I got lucky, Or did you look at that and say, Hey, I know what I'm doing. No, a hundred percent got lucky. So the , let's, let's call what it is. You know, Like it wasn't me being a good trader, it was me winning the lottery, right?

That was me with a scratch off ticket and [00:40:00] then hitting jackpots across the board. Um, in no way is that normal. And the short squeezes is kind of like the closest thing you can get to predicting stuff like that. It never, always plays out exactly like you think it would. So, you know, no one has like, just like a book, like, Hey, look at this.

This is gonna, you know, I don't have the, the 2020 Sports Almanac from back to the Future that I don't have a a, I don't have, like, I can't predict the future. So, you know, you do the best with what you're given. That's why I scale in and I scale out of stuff. So like for instance, like S P R T, like yeah, I held a large position overnight, but I had already taken half my profits out before that.

Cuz you know, for me the rest of those things, the rest of those profits, it was free money to me. So it's like I had already made money, my original position size back and above that. So now what I'm, I'm playing what I call runners, right? So that's where you gotta risk adverse and hedge yourself. Like yeah, you could be a hundred percent confident something's gonna run overnight.

You know, even just like today, like paer, like [00:41:00] paer ran hard yesterday and I was like, I bet you it's gonna keep running. But I still sold half my position yesterday, even though I thought it was gonna keep running. And look, you know, it went up a little bit today and then I think I saw it crash just a few minutes ago.

But, you know, I had already sold my position. I closed out the rest when I was happy and then when I saw it broke my support, I, I closed the rest. And I never look back at it. You never look back at a trade in FOMO cuz getting, when you FOMO and you get back in a trade, it usually never. But Right. You know, it's, I just walk away.

Yeah. But

Advice to aspiring traders.

, but what you just outlined as someone that has experience like those, um, I don't know if it's a good thing to start your trading career with a massive win like you did. It's kinda like, it's not the, Yeah. Like you, you don't want to go to the casino the first time you and make a ton of money cuz then you get addicted and you just proceed to lose a lot of it.

But, uh, it seems like you stuck with it and you learn. So, like, the way you just explained scaling and scaling out, it's exactly what I do. And I think a lot of people fall on the trap of like, they have a thousand dollars and they go all in on like one Tesla contract. Yeah. You, you can't scale in, you can't [00:42:00] scale out.

You can't really like, do any position sizing and that's where people get stuck. So I, I just, I dunno if you have any general parameters of advice for traders of, uh, you wanna be able, you, you don't wanna play things like, so when you're starting out Yeah. People want to play with real money. They wanna feel like they have skin in the game.

Right. . So maybe you start with a small amount, $500,000, but you should also pay per trade. You should always pay per trade when you're starting out. Tell you could be a profitable paper trader. You shouldn't really use real money cuz if you're not profitable with fake money, what makes you think you're gonna be profitable with real money?

Right? But if you feel like you gotta learn the hard way, like most people, I would say probably 95% of people, maybe that number's a little high, but most people feel like they gotta use real money and you know, the cost of education's not much similar than going to college. You might spend 10, 20, $30,000 before you actually learn how to trade properly.

For me, you know, I think my first year I lost $40,000. Like it was a very expensive life [00:43:00] lesson. Um, and that's when, you know, I hit the big win and then all of a sudden I was super profitable. And you know, I've been profitable since, but I also took six months off. Learned, studied, paper traded until I was profitable again, that I felt comfortable coming back.

And then I started developing all the tools I needed to be even more successful. Cause I was like, there's not enough tools out there, um, for the retail trader. And I was like, well, if they're not out there, then I need to make them. So 

What are realistic returns to target?

what do you think is, um, realistic guidance on returns for people? Like everyone sees these a thousand percent returns, Like realistically, I mean, what can you expect to make people under need to understand like 10 to 15% annual returns is what Wall Street expects.

So if you're making 10 to 15% a day, that is insane. You know, I've made a video, um, that's my number one video I ever made is compound interest, adds up over time. You know, if you're making, we have a [00:44:00] lot of guys actually in the group doing what they call 3% a day, uh, challenges. So they're like 3% a day.

Add it up over a year on a $10,000 account, you could be a millionaire by the end of the year. If you're making 3% a day. Like people don't understand. It doesn't take huge wins. It's consistency that's gonna make you money. And when you're consistent and you stick to your rules, like people need to say like, Hey, I need to make sure I don't lose more than 10% on a trade because then I only need to have a 10% win to make it back.

You lose 50% on a trade, you have to have a hundred percent win to make that back. Like the more you lose, the harder it is to continue. So like I've had days where I just lose 10% and there may be a good trade later that day and I've said, You know what? I'm not mentally right to trade anymore today.

I'll come up with a plan and I'll come back the next day and the next day I'm up 20%. And I don't, I forget about that bad day. I don't think about it ever again. But you have a day where you lose half your account. That changes you [00:45:00] and. Not many traders can come back from that and they just give it up entirely.

They just say, This isn't for me. I'm just gonna go to Fidelity and give 'em my money. And there's nothing wrong with going to Fidelity or, or whatever broker you want and giving 'em your money. I would say most people should do that. You know, trying to trade your own money is not an easy thing. Um, we try to make it easier for people, but you have to understand it's still incredibly hard to be consistent.

Um, and that's why investing in yourself over anything else is probably the best investment you can make in, in education wise. And that's why like we focus so much on not only free education, but you know, as the best education we can possibly make. Yeah, I love that he talked about the compounding, the small wins.

Actually, uh, 

Rapid Flow Algorithm

that's my most viral TikTok video ever. is where I talked about you could take a thousand dollars. I mean, this is extreme, obviously it's just a mathematical, uh, example, but you could take a thousand dollars, turn it into a million in a hundred days by just getting 7% of it. Uh, and I, I think [00:46:00] the problem is trading is very psychological.

So you have a thousand dollars that you start with, you make 7% and you don't wanna sell it cuz it doesn't feel like a lot. It's like, Oh, I only made 70 bucks. It's nothing. I got a great story. Yeah. That's for you when you're done. Yeah, go ahead. I think I just wanted set you up and say, um, this small wins consistently add up to a lot.

The problem is people don't feel like it's a big win and they, they hang on for more and they lose. Like people are up 80% and they don't sell. So you, 80%, there's a lot on one trade. You can track this. So are you in, you're in my discord. Can you see the rapid flow challenge room? Are you, do you have it up right now?

Uh, I don't have it up right now, but I can check while you, while you explain it. Uh, well either way we have, we've made an algorithm that detects basically, um, extreme buying in stocks. Right. And we found out these generally return five to 10%. returns all the time. If you catch 'em, they're [00:47:00] very in and out five minute trades.

Right. So one of our users, um, which I think you should interview, I think would be a good interview for you. His name's Dan. He's like, Well, f it, I'm just gonna take my account and only trade those. Right. And I'm gonna, I'm gonna take profits at five to 10% every trade. And he took it to the extreme where he's putting half his account in every trade, right?

But he's done it for a month. Right now he started with $10,000. He's got a log of all of his trades. He's at $39,000 after one month. and he even has over a year, if he continues to do this, he'll have 5000% returns over the year on his entire account. There's nothing out there like that. That's why like it's so exciting when you see all this work and time you put into data crunching algorithms work out and then you're not even the one using it.

You see someone else do it, you're like, Damn. So that's amazing. so, Well, I, I think that's why the, [00:48:00] what you said about the computer is a un emotional machine. That's, to me the real value of having an algorithm. Uh, it's just math, right? A lot of people wouldn't take the games at 5% cuz it's not enough. But like you said, and I say this all the time, I remember one 10% a year was like, Oh my God, Overperforming.

Yeah. Now people don't take seven to 10% your 401k annual gains, people go gaga over that because over 50 years, that's gonna be your retirement. Like if you can do that over a year's time, make your retirement, That's crazy. If you could do 10% a day, you don't understand, like I did the math, like. And I was like, I was like, I need to do this with a hundred k.

Because with a hundred K, you could turn a hundred K in a month into $4 million, 22 trading days, 10% a day. It's insane. And to be honest with you, I don't know if you disagree with me. I feel like, um, literally almost every trade I have ever entered, I have been up. Yes. 10% I'd want. You just don't, you just don't take it.

[00:49:00] That's the problem. That's why like I made the small account rules. I was like, you, when you are day trading, your goal in a day trade should be five to 10%. When your swing trading maybe 20, 30%, You know, But honestly, your, your goal on every trade should be five to 10%. Because most of the time when you get in a trade, it's for a reason and.

Generally probably a good trade that you get into, but one, you hold too long, you don't have a plan and you don't know when you're supposed to take profits or your stop loss. And that's what burns people is they don't have a plan when they get in the trade. They just see, you know, people saying, gme gme, I should buy this.

But then they're like, I don't know when to sell. Well, and that, that, you know, that that's the other thing with the, these services that have like call outs and stuff like that, it's hard to, I don't know, I dunno how you feel about it, but it's hard to tell people when to buy and when to sell. It is, It's a unique thing.

Yeah. It's, again, it comes down to everyone's different, right? Everyone has a different idea of what they [00:50:00] want to do. So it's like, how do you tailor make a call out service when everyone on your service is different? And so, you know, I try to give people ideas and I say, Hey, here's what we think it can do.

Um, but here's what. Your stop loss. You know, we do price targets and stop losses and things like that when we can. And, you know, we chart it out, use technical analysis, but, you know, nothing's ever a hundred percent perfect. So if you have in your mind that you're just trying to make five to 10% in general, most ideas that are gonna do that for you, I think like the, our newsletter win rate, you know, with 10% gains is like 90%.

It's, it's insane. Um, but how many people, like you said, take profits at 10%? Nobody, It's like, everyone says, Oh man, if I had Bitcoin back at a thousand, you would've sold it at 5,000. Like, no one's gonna hold that all the way up to a hundred thousand.

What made you successful as a trader?

It's just a, I have that, I have that crypto story too, with Dodge Coin.

I owned [00:51:00] a hundred thousand dodge coins. Or what was it? I think it was a couple hundred thousand when it was like 0.02 and I sold it at 0.03, and then of course it hit 70 cents. Right? So that was, yeah, that, you know, I would've been, made me a Dodge millionaire, but I sold it for $5,000 profit. Do you dwell on that afterwards?

Like, Oh my God, House Star. I have so many of those stories, , Or it's like if I would've held one more day, you know, like I had, I had Amazon calls one day I sold for $200 loss, and the next day it went up $150, I would've made $200,000. You know, it's like how you just torturing yourself by doing that. You know, if you live in the fa, if you live in the past, you'll never be able to make it into the future.

You know, if you're always tripping over your own past, you're never going to progress into the, into the, the future. And so, yeah, in reality, you're still gonna think about it, but, um, letting it affect you, you should use it more as a learning experience than more of. Oh, that [00:52:00] sucks kind of experience, right?

It's like, okay, analyze it. What should I have done to prevent this from happening again? That's what you should take from it. Well, would you have done differently with do scale out? Uh, probably the same thing. I mean, in reality we just, here's the thing, like you ju we just talked about taking 10% profits and now you're like, how do I prevent myself from not taking the 200,000?

But I would rather like, it's like baseball. Would you rather have people that hit for 500% but they always get singles and doubles? Or would you rather have someone that hits a hundred and are like 0.15 but always hits home runs? It's like you gotta do the stats. And the stats Say you'd rather have 500% hitters, cuz then you're gonna be consistently driving runs.

Yeah. You're gonna have those games where you hit 10 home runs, but then you're gonna have those games where you hit none. So it's, it's an all or nothing prospect. Right. You know? Right. And having a win rate and being consistent is really what the name of the game and that's how you become a pro, uh, a profitable trader is consistency.

Right. [00:53:00] Um, you, you mentioned not everyone should be trading, right? So I guess 

Who can use Financial Cloud?

who is the financial cloud suited for if, if you think that most people should not be trading actively? Well, I mean if we get our golden grail, uh, , if we get our holy grail of the Autotrader, it wouldn't really matter cuz we would trade for you.

Um, but I mean, we're for the people that wanna manage their own money, right? So we have the education and then we have the tools where if you use the education, you could be successful, but if you don't educate yourself where you don't know how to use the tools, then, then we're probably not for you.

Right? Um, if you just want us to trade for you right now, yes, we are working towards that, but right now nobody can trade for you. Right? So, and if you just try to do things without understanding, it's never gonna work out. You know, there's the, the phrase, you know, give the man a fish, he eats for a day, Teach a man manda fish.

He. Eats for lifetime. And that's really what we're about. We're we're about teaching you [00:54:00] to fish and then giving you the, the bait that you can go catch a big fish with. Right? So that's what we're about is teaching you to fish and then giving you the fishing line and the bait with the tools that we have.

Benefits of Financial Cloud.

What do you think are the main selling points or what have you heard from people? What are the main benefits of the financial cloud? Like I said, for me I love just trading and having the voice chat on all day. Cause I'm like, sometimes I'm looking at the same play and I hear how you guys analyze it. I'm like, you know what, maybe I shouldn't FOMO into this one.

I think it keeps, keeps me grounded and doesn't feel as lonely. So like what do you think or what have you heard as the most popular feature? Uh, I mean the, the algorithms are obviously incredibly popular. The small account is incredibly popular. I think that's, the small account always gets popular cuz people have, you know, one to $2,000.

They, they dream about turning it into a hundred thousand. Right? So that's always gonna be popular. Uh, but then you have your, your. You're big timers that have the large accounts that, you know, they just want to use the service and, and all [00:55:00] likelihood, 90% of our subscribers don't really say anything.

They're just lurkers probably. You know, I don't hear much from you, but I know you lurk around because it's just something in the background that is providing, you know, education as well as focused ideas. So for me personally, like I love the tools, I love the community. For me, obviously I live in it, I breathe in it, do it every day.

The community for me is, is huge. You know, building that, uh, community where we don't yell at each other. We don't make fun of each other. You know, if someone has a big loss, you don't, It's not Wall Street bets where you like, ha ha lost porn, Right? No. It's like, Hey, what happened? What can you, what, what happened?

You know, how do we fix this? How do we prevent this from going forward? Talk to me. Like, and everyone's super supportive in that way. And, and that's what I love is we're all here with the same goal. We wanna make money, right? So the community and the tools are how you do that. For, for someone so focused on that, in doing this the right way, uh, how do you feel?

Cuz there's definitely a trend now, and I see this all the time, people start their own [00:56:00] services and they don't even know what they're doing, but it's like a cash grab. There's a lot of shady people in this field, which makes it harder for the right people to succeed, I would think. Um, I think the big thing, I didn't make this for my subscribers, the TFC is for me because I personally use it, I wanna make something that I can use that makes me better at trading.

And if I personally, like I said earlier, you know, one of the first things we talked about, if I personally love the product, you know, then other people will too. And so like, because I personally use it, I need to make it the best I possibly. And if I love it, then others will probably love it too. And that's, that's my core philosophy in life.

Like, that's what my sales philosophy is. If I love something, it's a great product. People will want it. You know, there's a reason why people love iPhones because it's a great product. Right. You know, that's what our whole goal is to make the best product there is. And we'll probably never stop. There's no such thing as perfection.

Right. [00:57:00] But there is the, the chase to achieve it. And that's, that's what we just strive for every day. Yeah. That's a, a perfect full circle moment. Uh, before I ask my two final rapid questions, I ask everybody, um, 

Any interesting success story

do you have any other interesting success stories or, or like, things with members, You mentioned people making 160,000 in a day, the short squeezes, or the guy that was doing the 5% a day, um, and he made 10,000 to whatever it was, 30,000 in a month.

Is there any other cool success stories or member stories like that? I mean, the short squeezes are always super fun. Um, We're always on the, on the lookout for those, Those are what provide the flashy headlines, right? Like, Hey, I turned 10,000 into a hundred thousand. You know, I think, I don't know if Tay told you, he turned 50 K into a million in a week.

So Yeah, that was why. Yeah, . That was why. I mean, we see he disappeared after that. Right? Why would he need to trade after that? Like, we have this running. Me and me and Avery talk about this lot. You really probably only [00:58:00] need to make 10 to 12 trades a year. Um, you do your research, Those well focused research plays, if you do them right, you know, you could be extremely profitable, 500, a hundred thousand percent annual gains if you only take the trades that you have the full confidence in.

But being able to turn it off is something that people almost can never do. Like it's the over trading mentality. They always feel like they gotta have skin in the game and. I've been trying to teach people that, but even me, I still am human. I love having skin in the game. You know, I'm a, I love gambling, I love going to the casino.

So, but there's a difference between having skin in the game and having your entire accountant in the game. So, like, if you have a hundred thousand dollars account and you know the market's gonna be like crap, but you have to have money in it. Okay, well put a thousand bucks in it, right? If you have a thousand dollars account, put a hundred dollars in it, but you don't have to have your whole account in there.

I have this, you know, I usually keep, no matter what my account, 30% cash for what I call black swan events [00:59:00] for the gme, for the short squeezes. It's like if you don't have the, the buying power available to catch those huge market moving events, um, what are you supposed to do when those happen? So having, you know, that war chest available is just as important as having profitable trades because you, you gotta have money to make the trades cuz if you blow up your account and then all of a sudden the huge winner comes, but you don't have money to play it, what are you supposed to do in that situation?

And I think that's where a lot of people struggle. they have, they feel like they have to go, like you said, go all in on a Tesla call with their entire account. Yeah. I have a friend that does the same thing where he, everyone has the fomo, so he puts a tiny bit in so that he gets rid of the fomo, but he doesn't take, uh, crazy risk like he, you were saying.

I think it's great advice. Um, alright, 

Image as a student in high school

so if I go back to people in your high school, your friends or teachers, anyone around you at that point and I talk to them about you, would they be surprised at where you are now? Or they be like, Oh, that guy he always had it in and he was always different? Uh, [01:00:00] I don't think they would be surprised.

Um, I mean, I was always kind of a nerd growing up, so I mean, Tall and athletic and I played a lot of sports, but really, you know, my passion has always been like nerdy things. Like, like I started the chess club in high school. I, uh, was part of the computer science club, but I was also say on the football team.

So I was like kind of that weird nerd jock before that became, like, that was, this was before that kind of stuff was not popular. So, um, I always tended more towards the nerdy stuff, even though I've always been super athletic, but, um, it's just for me, I get more enjoyment out of it. Right. Video games and coding and all of that.

What is a rich life to you?

Uh, we talked a lot about money, um, but obviously it's not the on only thing important, uh, in a rich life. So what, what's a rich life to you? I don't need a billion dollars. I wouldn't say no to a billion dollars , but I mean, to me, having enough money to do what I want to do with my family and my friends and to live comfortably and not worry about paying the [01:01:00] bills.

That's what life's about in my opinion. You know, if, if my wife wants to take a vacation, I wanna be able to afford that. If my daughter wants to buy a video game, I want to be able to provide that. If she wants to go to Harvard, I would love to be able to say yes to that. Like saying no for monetary reasons to something, you know, you should be able to say yes to.

Hurts you more than anything in my opinion. Especially as a father, as you probably know. You know, being, having to say no to your kid just because you simply couldn't afford it is something I never want to have to say. Yeah, no, I totally agree. And um, it's an interesting anecdote is I had Disney calls and I wrote it from like 1 78 to 180 7, uh, last week or the week before, and taking those profits and taking my kids to Disney World in a couple weeks.

So I think it's important too. Disney looks really good right now, by the way, . Yeah, it does. But I, I was like, you know what, let me just take this and go to actually Disney World and make some memories. That's a good point. Like when do you take money out? you, [01:02:00] if you'd ever take it out. You're never, it's not real profits until you put it, until it hits your bank account.

Like that's something also new traders should learn until it hits your bank account and you take it outta your account. There's always ways to mess it up, . So you should always have, like I said, a plan, say, Hey, when I hit this much, I'm gonna take out this. Much like with my small accounts, I usually have a couple because like, okay, well if I hit 10 k, I'll take it back down to two K and I'll start over again.

Right? And then I have money that I can go do stuff with. But what happens if you leave the 10 K in there and you continue going and then you blow up your account and then boom, you're like, Dang, I should have taken that out. Well, F yourself, Take it out. . What's your plan with the one that you have now where went from two to 40?

Uh, well, I actually started back over and I took that out and so we started a new account on Monday. It's kind of where I started cuz it's been a hard week to trade, but, uh, we're doing good with it and we're gonna continue with it, but you know, when you make that, you gotta take at least half of it out, right?

So, Right. [01:03:00] Yeah. It's what, um, what would you want to hand people off to? What do you mean? Like, as we wrap up the show, is there anything you wanna point them to?

Way to connect with Thomas 

I know you're active on Twitter now. Uh, yeah, you can obviously the one on Twitter, uh, the financial.cloud as our website. We're also on Discord gigg slash the Financial Cloud, so real easy to find us.

Um, we also have the official Twitter account, official Instagram account, TikTok, Facebook, uh, we're most popular on Twitter. Obviously. That seems to be like Fin TWI is the big thing, but, you know, Instagram and those other TikTok is becoming bigger and bigger. So we're, we're exploring, um, doing more and more on there as.

I, I will link to all of that in the show notes. 

FREE Classes on YouTube!

And I also recommend people check out the YouTube. I find that, uh, it's more valuable content there because you can go more in depth into things. YouTube is great. Like you, you, we, we do, uh, we video free classes every Sunday night free wrap up every day after market close at nine Eastern.

So if you want to check out the financial cloud, YouTube, uh, you [01:04:00] could probably just search the financial cloud and it will, should come up right away. You know, it's very popular. We have 8,000 subscribers and you know, people are always subscribing to us. So if you wanna go subscribe and get them to no notifications, uh, it's always free.

We don't do any ads or anything. It's all free. It's because I believe in education. Awesome. Tom, 

Thank You & Wrap up!

thank you so much for the time. I really appreciate it.

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[01:05:00] Until next time.