Speaker 1: 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.
Speaker 2: You're listening to Carrie Lutz's Financial Survival Network, where you
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Speaker 1: And welcome.
Speaker 3: 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?
Speaker 1: 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.
Speaker 3: 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.
Speaker 1: 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.
Speaker 3: That's true for sure. Oh yeah, so obviously you're a professional.
How did you become a professional?
Speaker 1: 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.
Speaker 2: You know.
Speaker 1: 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.
Speaker 3: Sure, yeah, I know.
Speaker 1: 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.
Speaker 3: These are all over the place, right, So focus is focus.
Speaker 1: 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.
Speaker 3: 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?
Speaker 1: 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.
Speaker 3: 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.
Speaker 1: 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.
Speaker 3: Yeah, and there can be very costly Oh yes, that's
why when trading, I know for sure, risk management is key.
Speaker 1: 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.
Speaker 3: Yeah, I gotcha, I gotcha. So I guess I guess.
Really the key is knowing yourself, right, Oh.
Speaker 1: 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.
Speaker 3: 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.
Speaker 1: 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.
Speaker 3: Huh.
Speaker 1: 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.
Speaker 3: Yeah, So who's like the most successful trader you ever met?
Speaker 1: 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.
Speaker 3: They both come into contact with one way or the other.
Speaker 1: 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?
Speaker 3: Yeah, and so for somebody starting out, what do you
think is best?
Speaker 1: 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.
Speaker 3: I understand. You know, it's a serious commitment. And what
about having like a business plan for trading?
Speaker 1: 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?
Speaker 3: Yeah? Gotcha?
Speaker 1: Gotcha?
Speaker 3: 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?
Speaker 1: 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.
Speaker 3: 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.
Speaker 1: 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.
Speaker 2: 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,