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95% Of traders fail. And we accept that as a truth,
as that's just the norm. And I took a look at that. I'm like, well,
why are we accepting that? Why can't we do something different and change that?
So I pieced together what I think is a very fair assumption.
If you look at most courses, you look at most mentorships,
they pretty much more or less all offer the same thing, right?
You got your community chats, you got your PDFs, you got your videos, et cetera,
et cetera.
There is no real difference between how these people are being taught and people
are still losing.
So maybe just maybe there's a connection between how traders are learning from
their mentors and how many traders are actually failing. But the problem is,
and this is kind of how I close the gap with,
from what I've seen from my losing students, is that discipline, patience,
consistency, trust in your process.
All these things that feel good when you hear them,
but don't actually make you good. They are outcomes. They are not things you do.
They are things you are or become. So in order to be disciplined,
what are the action and habits that create that?
I've seen that the winners have closed that gap, whether they meant to or not.
And now I wanna talk about, you know, the mentors for a sec.
I don't think they're intentionally making this mistake.
I just think they aren't aware of it.
And the people who have found success in trading have just come by naturally,
but haven't been able to put it into words or onto paper onto the computer for
somebody else to learn from that. I have a series of processes. Alright?
I have something called the show method.
You don't need to know any more than you already know.
Skill and education and knowledge is not lacking in this industry.
What is lacking is that gap to create the way to fill in that gap between the
skill, which is the strategy and the outcome,
which is discipline patients successful trading, which are all one and the same.
Episode 225 folks. We've got Tyler Malone back on the show here after two years,
and he's been on a bit of a journey where he's come up with some amazing
insights about the whole industry, the whole trading industry,
and why so many people struggle. Uh,
he's also managed to implement some of these insights and explains how they all
work in today's interview. Um, alongside that,
we've did a back testing video with Tyler afterwards.
So you're gonna get to see a bit about his strategy and find out the biggest
mistake you are probably making in your own back testing may be the reason why
you hate doing the back testing if you're not doing it.
So that's all coming up here on Trading Up. But before we jump into it,
let's hear from my sponsor.
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Alright folks, here we are on trading.
Now we've got familiar face in the house again,
we've got Tyler Malone back on the show after two and.
A half years, mid pandemic. It was the last time you were on .
Welcome back, what have lots changed in the world since then?
Oh, yeah. And it's, it's amazing to be you back.
I've been wanting to do this for quite some time, but, uh,
I wanted there to be some big changes happening first before I could come on
this and actually provide some, uh,
value and very valuable advice essentially that, uh,
people really need to hear.
And I think what, what, what, what's, what we're gonna talk about today,
what Tyler's gonna talk about today is, is probably gonna blow your mind,
cuz is,
is a complete perspective shift to a lot of the things I think you've heard in
previous shows or around the internet, et cetera.
So hopefully this could be the answer to, you know,
what's missing from your trading if you still haven't made it, uh,
as a successful trader yet. So, um, but before we dive into that,
I just want to sort of touch base on what have you been up to in the past couple
of years?
Oh man, I've been all over the world.
So the last time that we had our, our, our last, our last,
uh, call, um, I was still living in Canada. I'm for anyone who doesn't know,
I'm, I'm from northern Canada. And, uh,
shortly after that I moved to Mexico for six months because I said,
you know what? Sick of this winter,
and if you've ever been in Northern Canada or you've ever heard of it,
it is just inhabitable, , very inhabitable. And, you know,
spent some time in Mexico, um,
and then went back to Canada because it wasn't quite what I,
what I had expected, what I needed. And, uh,
and then the fall of 2021,
I ended up taking a trip to Europe and landed in Spain,
checked it out,
and from the airport ride to my
Airbnb in the city I live in now in Spain, I just looked around and I said,
yeah, this is it. So I got everything together and by the end of
January, 2022, I had an apartment in Spain and I've been here ever since.
Wow. And you're loving Spain.
Oh my God. It is just, it's something else, the lifestyle here and you know,
as traders we always talk about, uh, being free and,
you know, living by our own terms and you know,
we can all relate to that,
but you don't really know how it truly feels to do that until
you come into a, a place like this where it's perpetual summer, where the, the,
it has all the amenities of the developed world,
but still the laid back feel of of of vacation hotspot at the same time. Yeah.
So it's, it's the best of everything. And, you know, being, you know,
a traveler that I have in my entire life, it seems only fitting that I,
I landed here. Yeah.
It's always been one of the places that I,
I think I said maybe a friend asked me 10 years ago, where would you wanna be?
Where would you wanna live? And I said, Spain,
I'd love to live sort of southern Spain.
Mm-hmm. , um.
For maybe a couple of years. Just do it. I just remember the tappers.
That's all I remember is like when I was there last. Um, right.
Let's dive into this, uh, this trading related chat that we're gonna have. So,
uh, to start off with, I mean, I,
I know a lot of it's to do with you being a mentor,
uh mm-hmm to students and how you've sort of decided to shift what
you, or how you go about teaching or I suppose molding students. I mean,
do you wanna start off by giving us some background as to what you're gonna talk
about today?
Yeah, so when we talk last, and actually it's a great starting point, and we,
we start from where we talk last is I was kind of taking the traditional route,
right? It's like I saw what other people were doing. I'm like, okay,
that's working, but people are still failing.
So what can I do differently in order to, you know, make a big,
a bigger and better impact? And so I developed my,
my very first course that I sold, or that I,
I provided to everybody after our last call. And it worked really well. I mean,
I was turning over traders in about, you know, four to five to six months.
They were learning the strategy, they were learning the skill. Um,
we were doing a very, very, very heads on psychology approach. Um,
and actually above that we, we took a very philosophical approach,
cuz in the meantime, I had gotten gotten really big into stoicism,
which is an ancient Roman philosophy. And I realized how many,
how many parallels it had with the,
the characteristics and the traits that we need as traders in order to succeed.
And so I'm like, you know what, people could benefit from this.
So I built a course around the main concepts of that philosophy,
and it worked really well. Uh, but at the same time,
I was noticing that I was having the same problems with my students,
that everyone still has w they were having, you know,
my people were still asking, well, what's next? Well, what do I do now? And,
and I'm sitting back and I'm just like, well, what, what can we do different?
What's, what am I doing wrong here? All right. And, you know,
I made the one mistake that every mentor makes,
and I, you know, I,
and most of these things that I'm gonna be talking about today, uh,
I'm guilty of. And the reason why I can speak on them is because I've done them.
And I've corrected that behavior,
that perspective in order to help everyone else in a different manner.
And I took a look at what mentors were doing,
and what I realized is almost every mentor was saying,
I can teach you how to trade, but I can't, uh,
I can't give you good results. You have to do it yourself. Mm-hmm. Right?
And so what was happening is that these mentors were sitting there saying, Hey,
I'm gonna teach you how, but if, if you mess up, if you screw up,
it's not my fault. But then, you know,
a couple minutes later they get a text from another student who just made a
thousand dollars in a day, and they're posting it on their social media saying,
I'm responsible for that win . And that, that didn't sit right with me.
I'm like, these guys are, these guys are paying, you know,
these ninjas are getting pardon of my friend shit.
Tons of money from the people watching this podcast, from everybody out there.
And they're not gonna be beside you if you lose, you know, that is,
that doesn't, that's not right. You know, if, if a kid grows up to be a dick,
who's, whose fault is it? It's the parents, right? Mm-hmm. ,
if a team has a losing season, who gets fired? The coach?
Why should us as mentors be any different?
And so I took in much more accountable approach saying, you know,
I'm responsible for every single result, win or lose.
Now does that mean I'm gonna give, uh, my, my,
the traders who lose their accounts, their money back know, obviously.
But what I will be able to do is take the lessons that I learned from the people
who don't succeed to make that program and that mentorship that much stronger
and more powerful for the next person. And now the second biggest, uh,
uh, piece of clarity that I got was I realized that, you know, every,
if you get into trading,
what's the one number that everyone says in terms of percentage of traders who
fail? It's always 95%, right?
And I actually think you recently had an individual on here who,
who you made a quote about that 95% of traders fail,
and we accept that as a truth, as as that's just the norm.
And I took a look at that and I'm like, well, why are we accepting that?
Wh why can't we do something different and change that?
And so I pieced together a what I think is a very fair assumption, and it's,
if you look at most courses, you look at most mentorships,
they pretty much more or less all offer the same thing, right?
You got your community chats, you got your PDFs, you got your videos, et cetera,
et cetera. Um, you,
there is no real difference between how these people are being taught and people
are still losing.
So maybe just maybe a connection between how
traders are learning from their mentors and how many traders are actually
failing. And so from that is,
that was basically the ground floor of what I'm doing now.
That's very interesting. That's like, I,
I've gotta say no out of all the interviews and we're up to, we're,
we're over 200 here,
nobody's ever sort of talked about this particular aspect,
which is the trader that goes into a course and losers and you never hear about
them again. Right? So, and your, I, I'm interested, intrigued to,
to find out a, what your stoic course was,
sort of how you formatted that, number one mm-hmm. , and then two,
how you,
how you sort of glean this information from the losing traders that had come
through and gone through either the stoic course or some other course that you
created.
Yeah. So we'll start with the stoicism. Um, if anybody's familiar with that,
it is the grandfather or because it's 2000 years old, the grand,
grand grand grandfather to modern day behavioral cognitive psychology or
cognitive behavioral psychology, C B T,
which is by and large known as the most effective form of therapy.
And the central thesis is control what you can
let go of what you can't. Alright? You know,
the only thing we have control of are our actions. No,
we don't even have control over our thoughts or our feelings cuz a lot of things
that we think and feel are instinctual, they're reactive.
But what we do control is how we, how we respond to it. You know,
do we press buy or sell? Cuz we have fomo, that is our fault, right?
That is what we have control over,
but we don't have control over anything else on this planet.
Anything else in this universe. And so separating that, that,
uh, the difference between what we can control and what we can't,
we can now hit the markets with a, a, a much more grounded,
and I don't even know the word for it.
We'll stick with ground much more grounded approach so that we know that we are
going to feel certain things. We can't help what we feel. Right? You know,
people say trade like a robot. They,
and they think that means trade emotionless. Well, that's actually not what it,
what it means, it means trade your make decisions like a robot would.
We're humans, okay?
We are pieces of meat fueled by electricity and we're gonna be irrational.
We're going to feel things, all right?
So what stoicism really does is it helps you compartmentalize those emotions and
still do the right thing anyways. All right?
And so bringing that into a course was very effective,
right? You know, we created some supercharged minds, some supercharged souls,
everything like that.
But I was still making the same mistakes that mentors were making because I
wasn't providing, um,
a way to fill the gap from being a trader to, or sorry,
from learning how to trade to being a trader. So if we think about it,
all right? We, we, we ask what are the most necessary skills in trading, okay?
And people say, okay, you need discipline. Well, you need patience,
you need consistency.
You need all these buzzwords that you hear all over social media that people,
you know, hashtag facts, hashtag truth to all the time. But the problem is,
and this is, this is kind of how I close the gap with the, uh,
from what I've seen from my losing students, um,
is that discipline, patience, consistency, uh, trusting your process.
All these things that feel good when you hear them,
but don't actually make you good. They are outcomes, okay?
They are not things you do, they are things you are or become.
All right? So in order to be disciplined, what are the action,
actions and habits that create that? Right? If you take one trait,
one good trait, according to your rule or your rules, are you disciplined? No.
Right? You take a hundred good traits,
then we can start talking about how you are disciplined.
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So what are the actions and habits that will allow you to take those a hundred
good trades? So what we're doing is we're taking a much more process,
process-oriented approach versus an outcome approach. Mm-hmm.
And one of the things I realized, cause I like every other trader,
like every other mentor I've taken probably 20 courses I've taken, you know,
pirated ones online, I've, I've paid for them, I've learned from mentors,
I've had one-on-ones. And I realize at the end of the day they're saying,
you know, psychology is, is everything you need to learn,
but trading is all about mindset. But that's where it stops. Well,
if it's all about mindset and psychology, then why are you focusing,
focusing so much on the thing that doesn't matter as much,
which is the strategy? So we have to flip it on its head. And when we do that,
we start to see that these things that we think we need are
really just the end result of what we should actually be doing. And so,
from those losers and from the winners, because I, I would,
I would compare the winners and the losers.
I've seen that the winners have closed that gap, whether they meant to or not.
And now I wanna talk about, you know, the mens for a sec.
I don't think they're intentionally making this mistake.
I just think they aren't aware of it.
And the people who have found success in trading have just come by it naturally,
but haven't been able to put it into words or onto paper onto the computer for
somebody else to learn. Alright? So I, from that,
I have a series of processes, all right?
I have something called the show method, skill, habit outcome. Alright?
Now, when you get your traditional course, alright,
you get your traditional mentorship,
you learn the skill and the skill is the strategy, alright?
And then what happens is you learn the strategy and then they're saying, okay,
go trade.
The most commonly asked question I got in my first rendition of my course was,
what's next? Alright? Like,
there is no plan to go what's next with most courses.
And so I created one because I felt that from what I've seen around
the trading sphere from the people that I've helped,
is everyone is skilled enough. You got everyone watching this podcast,
I'm telling you right now,
you don't need to know any more than you already know.
Skill and education and knowledge is not lacking in this industry.
What is lacking is that gap to create or the,
the way to fill in that gap between the skill,
which is the strategy and the outcome, which is discipline patients,
successful trading, which are all one and the same. You know,
be you become disciplined at the same time you become a successful trader.
All right? So you, they, they aren't, they aren't interdependent.
They are the same thing. And so when you, when you forget about the outcome,
right? And the outcome ends up being live trading, right?
It doesn't matter if you want to be a millionaire,
it doesn't matter if you want to just pay for your groceries, you know, the out,
you have to, you have to be able to trade live for that.
And so the outcome we've kind of bundled into just saying it's live trading.
Well, in order to go take the skill to get the outcome,
what we have to do is find out which actions and habits are
required to repeat over and over again to achieve that outcome. Now,
the beautiful thing about this is it is not a method, it's not a strategy,
it is a model. Alright?
And so what I mean by model is it becomes a framework where you can
pick and choose the things you wanna focus on and fit them in there. So on,
in the skill part, with the strategy, any strategy can fit there,
it doesn't matter. All right? In the habits, well,
all strategies need the same habits in the outcome. Well, all strategies,
we want to end up at the same outcome. So what you've created is, now you,
you you've taken this idea of trading out of its box and you've made
strategy. The strategy is no longer the focus,
it is simply a subset from an even bigger picture. Mm-hmm. .
It's interesting, I I,
I've sort of had this in the back of my mind for a long time.
That habit is a major part of trading, right?
Mm-hmm. and finding that habit, let's call it a routine habit,
whatever you wanna call it, it's that sort of regular thing that you do,
which essentially instills the discipline, right?
Because if you've got that habit,
then all of a sudden it's easier to be disciplined because you're just going
through the same process and all the routine every single time.
Which yep.
Makes it harder to break. Cuz if it's random, if you haven't got a habit, it's,
it's gonna be random, right? And if you're random, then you're basically,
you're just doing whatever. There's no discipline that c comes with randomness.
So it's mm-hmm. . So do you want to, how did you, um, how did you,
because you are probably the one of the first people to actually talk about the
habit, um, as being a thing. I mean, how did you sort of come up with like,
what was your aha moment around like,
this is where people are falling down the habit, they've got a.
Habit, . Well, uh, it was really just human nature in general. Um,
when you take a look at how we behave and the things we believe,
uh, let's start out, let's be a little bit, let's,
let's be a little bit pragmatic with our train of thoughts. Okay?
So let's start the outcome. Let's reverse engineer this, alright?
To get an outcome. So to get the thing we want, okay?
We have to become the person that gets that thing, all right?
And now people say, you know, actions, not words. Well, I say patterns,
not actions. So actions and patterns are what make you who you are. Alright?
You can say that you're, you know, you're a marathon runner as much as you want,
but if you don't run marathons, you are not a marathon runner, right?
So in order to do those things that make you that person,
to get that goal,
you have to make the decisions that lead to those actions. All right?
Now, when we talk about decisions, well, what drives the things that we decide,
all right? It's our beliefs and values which we hold to get,
which we hold to be true. And now this is where it gets a little bit tricky,
because this is where almost I would say actually every single trading, uh,
issue stems from is the beliefs and values we hold to be true. For example,
if we believe that more trades equals more money,
which we all know that less is more in the industry,
and we refuse to budge from that, we will never,
ever be able to make the decisions that lead to the actions or patterns that
lead to the person we are to get the outcome.
So how do we shift the beliefs and values that we hold to be
true perspective? At the end of the day, it's perspectives.
Now we always say psychology is the most important part of trading. Well,
that's, that's only half true because you don't do psychology.
How do you work on psychology? Psychology is just an overarching concept over,
you know, habits, outcomes, behavioral, you know, all that stuff, right?
And so when we can specifically define these things that drive, uh,
who we are, what we do, the way we think, we really,
it all comes down to how do you see the world?
How do you see the things in front of you? How do you see the charts?
It's all perspective, right? And so that,
that sounds all well and good, but unfortunately, like I said,
humans are irrational animals. We are, you know, slaves to our emotions,
if you will.
But when we can quantify or put numbers
to a behavior or to an action or to a habit,
that's when everything changes, right? So when we want to,
so when we want to talk about habits, right?
You talk about the one trade versus being not being disciplined versus a hundred
trades being disciplined.
What's the thing that we can do to take those hundred trades according to
our rules every single time back test and get your data.
Data acquisition is the most important part of trading the
active trading, right? Mm-hmm. . Now,
the most important part of being a trader is something completely different,
which we'll touch upon shortly, I hope.
But right now it's your habits of trading properly,
according to your rules are going to be driven by the data you acquire back
testing. So let me go into that a little bit further. Alright?
We do not collect data to prove that we're right.
We don't collect data to show how much money we can make, right?
Because it doesn't matter how much money your strategy makes,
if you can't trade the strategy as it's supposed to be traded,
you will never make the money that you're promised when you're back testing.
So when we back test, it is solely for data.
And what we have to do with that data matters.
And the very first and foremost thing is we have to be able to compare
past performance to current performance. So let's say you have two traders,
okay? Trader one, trader two, trader one and trader two, exact same strategy,
exact exact same mentor trader one has no data, no back testing.
Trader two knows all the me all the,
the metrics that go along with the strategy, right? So they,
they know that they're supposed to win, let's say 60% of their trades,
all right? They know they have an average RR of two to one when they win, right?
Metrics like that. Trader one doesn't know this, this you hit a losing skid.
Okay? So let's say you know that 60% win, uh,
win rate turns into 20% win rate. Okay?
So they lose two outta 10 versus six outta 10, alright?
Who do you think is more likely to continue to trade the strategy?
The guy who knows that historically they're supposed to win 60% or
the person who doesn't, it's gonna be trader number two. Mm-hmm.
And the reason why is because we treat it like we're counting cards in
blackjack. And for those of you who don't know how to count cards, um,
this is exactly what I mean by that. And those of you who do, uh,
please forgive me, um, I might butcher it a little bit,
but basically what a card counter in blackjack does it is they keep
tally of what's in the deck, all right?
They know when there's big cards in the deck to be played and they know when
they've already been played.
So they know if they're gonna hit a couple losers or they know that they have a
higher probability of hitting those blackjacks and taking that big money.
And that's when they know, um, how to manage their expectations.
And so what we do is we do the exact same thing, alright?
We realize, you know, we have a 60% win rate. Trader two has a 60% win rate.
He's lost eight outta 10 trades. So he has a 20% win rate,
but over a thousand trades should be 60. Does that mean that he's,
his losing streak means his strategy isn't working? No,
it actually means that he's more likely to hit a winning streak cuz that's how
probabilities work.
And so what we do is we weaponize these probabilities based on the
data that we've acquired to mitigate our motions because now we can manage your
expectations appropriately. And so by doing that,
we've now taken a perspective of this is we,
our perspective is we let the math do the talking, right?
We don't take a trade based on how we feel based on what's going on.
Cuz you're gonna feel all sorts of things.
All you need to do is look at the hard numbers and say, okay,
I'm supposed to win six outta 10 trades. I've only won two outta 10 trades.
All right? The next 10 should actually be 10 outta 10. If not,
I'll probably hit an 18 outta 20 over the next 20.
And then you can start comparing. You can see if I'm underperforming,
I should be overperforming pretty soon to bring it back to the baseline.
And then the other way, right? If you've, if you've, uh, what'd I say?
If you've, if you have a six outta 10 uh, win win rate,
but you've won 10, outta 10, you can now expect the opposite. You're saying,
well, I've won a lot more than I usually should. So when I lose,
I know what's going to happen. This cannot keep up forever. But the thing is,
here's the thing is we don't know when those winning streak start or end.
We don't know when we're gonna lose. We don't know when that's gonna end.
The key to trading in this sense is to always be able to take the next trade
according to the rules.
And so that is the first thing that data does for us to help create those
habits.
It helps us to always take the next trade because we always know where we're in,
uh, in regard in terms of the count or the count of the markets, right?
Like we're counting cards.
And so that is one of the biggest perspective shifts that I had
when I realized that we can quantify these things, alright?
And now the second biggest thing about this is this allows us
to take this trading live. And when we take it live, we can now see, oh, right,
I'm supposed to be getting these numbers, alright,
but now for some reason when I'm live, I'm not getting them,
you now know where to look. So you've created a not one, like I said,
not a strategy,
but a model of being able to pick and choose and change things
at will because you are aware of everything that goes on with your strategy,
the strengths, weaknesses, and you are able to manage your expectations.
And by manage your expectations, you mitigate your emotions.
Cuz if you expect a losing streak because you've been winning too much,
why would you be upset if you expected it? Right? Versus if you, if you get a,
if you expect to have a winning streak cuz you've been losing so much,
why are you gonna over trade and over-leverage because you're now on a winning
streak. It just helps you trade the plan exactly how it's supposed to be.
So when we talk about trusting the process, this is how you do it.
You quantify,
you add numbers because as soon as you get those hard numbers in there,
the math does the talking not you.
Mm-hmm. , it's a, it is very like, I mean, it,
it rings a lot of bells here in terms of, uh, I mean, I was talking to a,
a friend the other day who, who had done exactly that back tested something,
uh,
I think it was a hundred trades and it was like a really high win rate strategy,
90%. And, uh, I mean, the risk to award wasn't always great, but, um,
the win rate was high and then went live,
it played out. And then, uh,
but then he knew the times it didn't play out were when the emotional side
kicked in and he started breaking the rules because his problem was,
he got too used to the fact that 90% win rate, you're winning all the time,
right? Mm-hmm. , when you get a loser, it's like, well,
I don't wanna take a loser anymore.
So all of a sudden your psychology kicks in and it's something he had to sort of
try and get over to, um, to,
but he knew that the numbers were there to back him up.
So if he just went back to what he was doing,
he's gonna start winning trades again. Uh, exactly.
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How, how on earth do you structure a course that sort of, uh,
encompasses all this so that people can follow the process?
And how do you make sure that,
that these guys who would normally be losing traders that exit your course,
you never hear, hear of them again, turn them around into, into winning traders.
I mean, what do you, how do you keep people on their, on that path?
Well, once again, we,
we gotta go back to how mentorships operate and how courses operate, right?
It's the mentor ha or the teacher, whatever you wanna call them.
They have a course and they want people to come over to the side of the fence to
learn it. All right? I have not seen the mentor go the other way,
trading or your strategy. Uh, first off, um,
this is kind of the thing that I would,
I talked about earlier that I hope we talk about shortly.
And a lot of you are gonna be sitting back and probably fall off your chairs
when I say this, but your strategy, the strategy you trade,
is the least important thing out of all the things that matter, right?
Scalpy, swinging, doesn't matter.
What really matters is does that strategy fit in your
lifestyle? All right? There's, there's nothing above and beyond that.
You could literally have a, the best win rate with the best rr with, you know,
objectively the best strategy on the planet.
But if you live a life where you can't trade it according to the rules that that
are required, you'll never take advantage of that. And this is,
this is kind of where your question gets answered because
we, we always say trading's not one size fits all yet,
mentors trade or they teach one size fits all, right?
And so what I did is I took that whole overarching model approach, and I said,
you know what? I'm not going to teach the strategy centered around the strategy.
I'm going to use my strategy as a measuring stick for someone to create their
own personal and unique way of trading. Because we're all different.
We have to accept that, all right? We all have different perspectives. You know,
we have, we're just so unique in so many ways. So the strategy that I created,
it came from my perspective of the world,
the beliefs and values that I hope to be true based on the decisions that I've
made, that led to the actions that I've made,
that made me who I am today and made me get what I have. Alright?
Then to have someone want to learn my strategy and say, okay,
step in my shoes and do exactly the same thing. When you really think about it,
it's kind of crazy to ask that. And honestly,
I find it kind of arrogant to ask that as well. So instead of saying,
here's my strategy, learn it and then get outta here, it's, here's my strategy.
I'm going to teach you how the market works.
And what you're going to do is use my strategy as the measuring stick to build
your own.
So I want to tell you a little bit of a story about what I mean by that. I,
you know, I'm,
I I think we talked about this last call is I used to bottle build. You know,
I used to be a physique competitor. I was, uh,
top 20 world ranked in W B F F at one time. So I know my,
I know my stuff around that. All right?
So when you do a body building show or a physique show or something like that,
it is the hardest thing to do, not because it's a first time dieting. It's,
you know, your first time standing up on stage in front of people.
It's because you do not have anything to compare
what you're supposed to look like to, alright? However,
that second show that you do, third show that you do,
you now have these measuring sticks.
You can take a look at your first show when you're three weeks out and say, wow,
I was way leaner, then I'm three weeks out now I'm not lean enough.
So now I know that I have to make changes moving forward to do that, right?
Or say, oh, my last off season I didn't have big enough shoulders,
so now I can focus on prioritizing shoulders for my next show.
And so when you have that measuring stick,
you now have something to really build off of a foundational
approach. And that is what I did. So rather than, you know, and that, and that,
that goes to, you know,
goes part and parcel with the whole mentor accountability thing. It's,
I I should not be asking you to meet me where I am, right?
I should be meeting you where you are,
which is why I actually went from group calls, you know,
have as many people as possible in the course to just doing one-on-ones.
You know,
I only care a load of 10 to 15 people for clients because I cannot best
serve the people that that sign up with me unless I am talking to them.
I'm meeting with them,
I am learning about their beliefs and values and finding out what they like or
what they're good at in the markets. All right? So I had a student last week,
um, I had a really good talk with him.
I was trying to teach him my way of seeing lower highs and higher lows,
et cetera, et cetera.
He sent me his homework and I noticed he was marking his highs and
lows the exact same every single way. So I said, you know what,
why would I try and change his na natural inclination on how the markets
work? If he can do that every time,
because a very important part of trading is can you repeat the same thing time
after time?
And can you define it and specify it so that it's very easy to spot out?
And so what we've done since then is we've changed the way we see highs and lows
to how he naturally leans towards to,
and he has just gone from here to here in a matter of five or six days,
everything quit for him. All right? And so I personally,
obviously this is my personal belief, is that, you know,
your mentor needs to be doing everything in, in his power,
her power to make sure you succeed, all right? You know,
there's gonna be the odd one that, excuse me,
the odd student that just absolutely crushes it, obviously.
But every student that ends up crushing it always creates their own way of
trading. So my students,
my top students that I've had over the last two and a half years,
they've all made their own strategy outta the things that I taught them.
Because I have such a simple and, uh,
uncomplicated approach to the markets, I figured, you know, what,
if they're going to do that anyways, why don't I just help them?
So I teach them my strategy as a measuring stick. They can see my statistics,
my metrics, and so when they go and back test it, they see if they can match it,
and then they plug and play their own little way of doing things. And then,
then by then they know how to, how to test it, and they can see, well,
is it better or is it worse? If it's similar or better, then yes,
by all means go forward with that way of doing things.
And I I personally believe that,
that we can trim down that 95% failure rate quite a bit if we take that kind of
approach to it.
Now. Now, what do you do to like,
sort of make sure that these guys are tracking along, along the way? I mean,
are they, are there any things that you've sort of come across where you know,
quite common that even guys you're doing one-on-ones with, they, they sort of,
you know, trip up at this point? And what are those sort of hurdle points that,
and I'm guessing a lot of people listening are probably, you know,
at that hurdle point or, or have stumbled across it themselves.
What are they for your, uh, the guys that are common?
So that's actually a really good question.
So when I deal with trolls on Instagram, I'm gonna answer it in the same way.
My one response is, you are not my target audience. And so how I figure that,
how I do that is I only help people in my target audience,
and there's a specific type of trader that will benefit from this.
So if you are a new trader, you're still figuring it out.
You haven't been kicked sideways, lost your accounts,
you ha you haven't learned the lessons you need to learn that we all
inevitably learn, right? In order for the,
the things that allow us to go above and beyond where we are right now.
You know, those won't hit the same way. In fact,
they might not even be on your radar to begin with until you go through these
growing pains that all new traders have to go through.
And so when I started out my one-on-ones, uh,
a lot of it was simply figuring out who,
who is the type of person that I can help, all right?
And so as I went through, I realized that new traders, they just,
those are the ones that kind after the third or fourth session kind of
disappeared, right? And I said, well,
I'm not doing anyone in service if I'm taking my time helping people who,
who just, they don't hear the lesson. So there's a, there's a,
there's a stoic saying, okay, it's called when the student is ready,
the teacher will appear. Hmm, all right. And so
how we avoid that, you know,
that problem that you just mentioned is we make sure the person joining
the program has experienced the things they need to experience so that this,
these lessons and these perspective shifts, um,
will land the way that they're supposed to.
Roddy ho Now on that, on that sort of note, like, I mean,
it sounds like obviously people are in different phases and different stages of
their absolutely. Journey. I mean, how, how, um,
if you had to sort of break it up, like,
cuz I think people listening would be quite intrigued to find out where they are
in, in this, in this journey. I mean, what would you sort of like say,
here are the stages of, of a trader? I mean,
maybe not like the whole sort of break even profitable, not profit, you know,
that,
but more from like a psychological or actionable thing that they're actually
doing a do you have sort of like a, I don't know,
it might just be off the top of your head or it might be something you've sort
of, you know, written down, but like, uh, you, if you are doing this,
you are at this stage in the process and you've got 75% to go kind.
Of thing. Yeah, well, you know, I do, like, before I meet up with anyone,
I always have a discovery call. I see where they're at.
I have a cer a specific set of questions,
and from that I can kind of see what kind of pers perspective they have on the
markets. Whether they're a, um,
it's my fault I'm losing or it's the market's fault I'm losing.
But generally what I see when I, when I talk to, you know,
the people who fit in this, in this type of, uh,
mindset and who are able to be coachable is
when they get on, I, I get them to teach me what they know.
I get them to sit there and I'm like, okay, show me the strategy you're trading.
And honestly,
I have been taught by these students the most incredible
ways of trading in the amount of times I have said that is a
effing great idea. Or something like that, right? Yeah. And
so that's kind of the gauge that I use is they get them to explain it to me,
but then I start poking the holes.
So there's something called the Socratic method of arguing. And if,
if you don't know who Socrates is, he's, you know,
one of the goats of the philosophical world.
And what it's meant to be is it's a way of plugging holes,
uh, and fixing gaps in an argument. Alright? And so that's a,
i I I turn it in and I say,
the Socratic method of trading is I get them to teach me the strategy and I show
them where the holes are.
And from there you can kind of gauge their understanding of what they're
actually doing. Are they just following blindly, following a set of rules?
Or do they actually understand what they are doing? Right.
And from my experience, I've probably had, oh my God, I've,
I've done quite a few sessions now. Um,
and even more discovery calls is,
you all know enough that you do not need to know more about trading.
The answer to your trading is not found in the charts. It's found in here,
it's found here, it's found outside the charts.
You have to figure out who you are, where you stand in this world,
what you actually want, and be authentic about it.
And the moment that you start being authentic about it,
then those lessons will start to sink, right?
All the emotional responses are gonna go out the wayside and you actually be
able to learn. All right? So there isn't really a set of rules,
it's more so, um, I take a look at how the person feels about their trading.
You know, how do they feel about them, about themselves? Uh, are, are they,
are they quick to react? Do they sit and think, uh, are they argumentative?
Et cetera, et cetera. A lot of these, a lot of,
I don't like putting people in a box,
but most of the time traders who are at similar stages
all behave the same way. Right? Now,
obviously there's gonna be minor differences. Yeah.
But more or less they all have the same cuz they've all been taught the same
thing.
So it's only safe to assume that if you've all been taught the same way then
where you're at, up until the point where you finally realize that,
you know anything is it's pretty consistent.
Yeah. Yeah. It's, it's funny, it just sort of reminds me of, um,
last night. Was it yesterday?
Yesterday or two nights ago I actually bought a golf,
and I know you're into golf. I bought a golf Oh yeah. Uh, like a swing thing.
So, so my golf, like over the last two decades has been absolutely atrocious.
It keeps getting worse and worse and worse. .
And then it just turned a corner in the last like, uh, three or four months,
right? Mm-hmm. and I started getting better again. And I dunno,
I dunno why I started getting better other than just not caring and just trying
to hit the ball. Yeah. Right. And then mm-hmm. , I thought,
and then I played last weekend, had an absolute shocker,
couldn't hit anything until the 17th hole last two holes were good.
And I'd sort of just said, oh, let's just hit the ball again. And .
Anyway, long story short, um, I ended up, uh, buying this course cuz I was like,
you know, heads had to hit a clean shot and blah, blah, blah.
So I bought the course, started watching it,
and the guy's going through everything. Like everyone seems to think,
and it sounds like similar to what you are saying,
everyone's taught and the common sort of sayings the common rules,
it's all wrong. And he's saying, it's all wrong. You've got it all wrong.
This is what you should be doing. And he's like, in literally two minutes,
showed you the difference between what you are doing with a golf swing and what
you should be doing with a golf swing. And,
and given a simple like two-step technique. And I'm like, oh my word. It's,
it's almost like when I learned to play tennis many, many years ago,
I went to see a professional tennis coach just on the off chance I didn't pay
for it or may had paid for it. He said, jump on, I'm knackered. And a guy says,
no, no, you do this, you brush the ball. I'm like,
why has no one ever told me this before? , it's, it was like,
and I started that's.
Exactly the same thing.
Yeah, exactly. And I was like 40 years old and it's like, well this is too,
too late for me to start playing tennis again. But, um, it sounds like yeah,
exactly the same thing. Yeah.
It's just these sort of completely different perspective shifts. Now,
one thing I did wanna ask was sometimes people get it and like,
I've been at culprit of this as well,
where they're going along and they've finally got, I've had a profitable week.
And then things start to curve off. You start to slightly adjust things,
you dunno what you're doing mm-hmm.
and then all of a sudden you're back to square one again. Mm-hmm.
and things are veered back to like, you know, not, you know,
you're having an unprofitable week or you've just, just broken even.
Have you had any guys come through or girls come through that,
that have that kind of behavior and how have you been able to tackle that
to get them back on track again?
Uh, it's, it, I go back to data. You know, at the end of the day it numbers,
numbers will not lie if you have a big enough sample size, right?
And so when you, when you, when you're creating your strategy,
you're creating a set of rules, you know, we back test it, creating, you know,
we get in the markets, we just, we fool around. Uh,
I'm just gonna tell you new traders right now, if you don't have a strategy, uh,
stop trading live because you're just going to make your progress take
that much longer. Alright? Press a,
a brake pedal for a few months and that by the time you're ready,
you'll leap forward to where you would've been otherwise. Um,
is in order to kind of mitigate those issues is
you have to have that data. But in order to collect the data,
you have to have a set of rules, a set of parameters that, or that are,
are algorithmic, right? Meaning that it's this or that.
When you take a look at a lot of strategies,
there is so much gray area in there, right? It's, you know,
for how to determine direction. You have six different ways. It's like,
well if it does this, it's gonna be this. If it does this, it's gonna be this.
Well, there's only two ways it can go up and down. So find your parameter there,
right? For entry. They're like, well if I have a a pin bar in this area,
I can take an entry or engulfing here. If I break the structure, just pick one.
Alright? Same with exit.
And because in order to collect the most accurate data you can,
you have to take a massive sample size.
I have a few thousand trades to work off of at this point, right?
So my sample size, my data is pretty solid. Um, but, you know,
new traders who are kind of coming into it, you know,
back testing a hundred trades is tedious and it's boring,
but it needs to be done. Uh,
but most people don't do it because it comes dressed in overalls and looks like
work. But the things that people aren't doing well,
it's the reason you're not succeeding yet. Yeah.
And so when you go back to your strategy, you have,
if you have all these different parameters that you can follow for all these
different steps, well you are now needing to trade or, or test,
um, you know, three to the power of nth whatever, um,
for your strategy. So if you have three steps to your strategy,
you have five ways to perform each step. Well,
now you're three to the power of five.
I think that's like 245 or something like that is what the number ends up being.
You now have two, two hundred and forty five different sets of parameters that
you need to get data on, right? Because if you do one way for,
for step one and do another way for step two yeah. In one trade,
and then you do another way for step two in the next trade,
well you're trading two completely different strategies at this point.
All right?
And so what we need to do is we need to realize that our edge in trading,
right, in regards to the problem you addressed in anything, it's not ab it,
it's not what gives us a huge r o roi. It's not how many trades we get in a day.
The edge is, is fa is, it's the rules themselves, alright?
And within those rules, we have two things. Okay? We have two subsets of edges.
We have the strategic edge and we have the edge of execution. All right?
And so strategic edge are things that directly impact your p and l. You know,
it's like, okay, well where do you take profit?
Do you hold or do you take partials along the way? Right? Those things,
the moment that you enact them or change them, your p and l will change.
Now the edge of execution, execution is indirectly, uh,
going to affect your p and l. And in fact, I believe it's more, more important.
Um,
it is simply creating a set or a system of trading that you
can repeat and do every single time.
So if you have those three ways of your direction entry, exit,
and you only have one way of determining direction,
one way of determining your entry, one way of determining your exit,
you have now created an algorithmic pro process where it's either this or that,
right? There is no in between. It's like, if you don't get this, it's this.
If you don't get, it's this, it's this. And so from that,
you can now create or not so much create,
you can find the data that supports those underlying assumptions. Uh,
and then you can start using that as you go live and finding your perspective,
right? Data will give you that perspective when you're in the market.
So you have a good profitable week, well, you gotta go address and say, okay,
did I overperform, did I underperform?
And the only way to do that is to look at your historical data.
And the best way to do,
to have historical data is to get as many trades that follow those rules as
possible. And in order to do that,
you need to have a very simple step-by-step approach.
You can't have multiple rules for every separate LU eight.
Now. Now, la last question before we wrap this thing up,
and we'll actually two more questions. Um,
this question is around the back testing, on getting that data. I mean,
what do you, what's your recommendation around that given the fact, you know,
you've got, you know, thousands of instruments you could be trading. Uh,
some data may work good on, you know, if you,
if you say tested like a hundred on one market and then you go off and they
grow, well that works. I'm gonna trade all the markets now. Mm-hmm.
, um, and then you find that, oh, it doesn't work.
And then you go well, maybe I should have tested all the markets.
How do you sort of help people get over that hurdle of a decision around or
losing confidence in the data that they actually collect?
So the pro, it's about that less is more, right?
Uh, we have to decide, you know,
what is necessary to do what we want with trading, but also what is enough,
right? And you have to have a really good perspective on the realities and the
expectations of what a strategy can do in the market,
which is up to the person who teaches you everything that it comes down to.
Is your mentor,
are they preparing you properly or are you having to figure stuff out on your
own that you wouldn't have to otherwise if the mentor prepared properly, right?
And so, yeah, it's, it, it's, you know,
the reason why we try more markets is cuz we want more. But you have to think,
do you necessarily need more? And I was guilty of that. You know what,
as a beginning trader, I wanted to make a million dollars a year. I am,
I am not a millionaire right now, right?
But I accepted the fact that what I have is enough. I don't need more.
And I'm living in Spain living the dream.
And you don't need a lot, right?
And that's one of the greatest culprits to your success is thinking that you
just need to go more and more and more. It's like, no, it's, it's,
you only need a few percent a month because it's not about having more return
for your trades, really, at the end of the day,
it's about how big is your frigging account, all right?
You want to get that account to a point where one trade pays for your monthly
bills, right? Which means you're gonna have to wait,
you're gonna have have to be patient and you're gonna have to have a plan to get
it there. All right? And
so to figure out the back testing dilemma, it, it really comes down to that.
It's, it's what's enough, all right?
If you have something that works really well on one instrument,
how can you make it? So you only need to do that for that thing.
Don't make anything harder or more complicated than it needs to be at the end of
the day. Because trading, I, I, I'm gonna sound like an asshole for this,
but trading's not hard. Trading is actually very, very simple. Uh,
we make it impossible though, because of, of, of we're humans is.
How we do.
Things, right?
Yeah. Actually it reminds me, like in terms of the back testing,
it reminds me of a couple of things where, um, like one i one is I've seen like,
you know, people, uh, come to me with back tests and said, Hey, look,
this thing, this thing works, here are the rules. Uh,
I've then automated it and found that like, oh,
well you didn't actually factor that this and the other thing into the, like,
they missed out that the actual setups that the automated bot didn't miss
because it's like, well, you told me to do this, I'm gonna take the trade.
Exactly. It's like you missed those trades or,
or it worked over a short period of time when the market obviously liked those
trades, but then when you went back further in history,
all of a sudden the thing fell apart. Yeah.
And it was only just working in that period of time.
It just happened to be the period they back tested over. The other one,
which is an idea for people is, uh, and another friend of mine said this, like,
he gets somebody else to actually give him a market
and a date to start from and he's gotta take a hundred trades
and a back test in that period. So it could be some random market. Love that.
And, and if it, and then just notes down the results and it,
and it might be that like the strategy is not robust over that market or mm-hmm.
, then it does work and it gives you, gives them more confidence.
So another thing that people could pot potentially try with either I suppose
their, their, you know, get their kid to do it or get their partner to do it,
or just do some random thing on the internet. Man, I might,
I might even chuck something up on trading notes so that people could go,
here's your, here's your random back test challenge.
Um, yeah.
But yeah, look that, so that was the second to last question.
The last question is, is it,
what have I not asked you that you wanted to share today?
Oh my god.
Or is there have,
or have you managed to let us know everything you wanted to get out?
Hmm. Off the top of my head, um,
I'm just gonna say this and you know,
you can put me under the microscope as well.
If you're a student of mine or wanna become a student of mine, whatever is,
you know, take a look at, you know, what your mentor's actually doing for you.
Is it making you feel good or is it actually making you good? And I'm,
I'm kind of, I'm more or less referring to, you know, the hype, right?
The excitement, you know, it's,
you get those group chats and you get everybody riled up with the memes and
everything. But trading doesn't require that.
Trading needs to be as quiet and calm as this conversation here. You know,
trading is not emotional, right? It's not about excitement,
it's not about getting hyped up, right? In fact, you need to be the opposite.
And this is why I,
I dive in stoicism so much cuz it creates that grounding when it comes to
trading and uh, really go and take a look at social media, you know,
um, cuz social media is, at the end of the day,
it's such a huge factor in our lives. You know, we bought it,
it is how we run our lives, right? It's how we communicate,
it's how we find the things that we do. I mean we're,
this is on social media right now. That's how you're listening to this.
And so what you have to take a look at is, um, you are,
if you hire someone and you do everything you're supposed to do,
then and you do are still not finding success and that person is not trying to
help you then find someone else.
And you can usually locate those people by the things that they post and what
they do. You know, there's a lot of,
there's a difference between problem aware content and, uh,
content that just makes you feel good, that gets you psyched. You know,
does a hashtag facts, hashtag truth and stuff like that. You know,
you see the moody low exposure reels that,
you know have the motivational quotes, well, motivation and inspiration,
they're useless, right? They, they're fleeting, right? If,
if you only do stuff when something else makes you feel like you need to do it,
then you're only going to move the needle when that happens.
And that's where we dive into,
well are you actually becoming good or do you just feel good?
And so being able to make that distinction all comes down to the person that you
are looking up to in order to trade. Uh,
the very last thing before we go is I want to touch upon just one more huge
perspective shift. Okay? Now,
I have coached so many people by this point. I had, you know,
I can't even remember how many were, were in my first co first course.
I've had a revolving door since I started launching my mentorship. You know,
it's, it's like three months. So every three months we get new people going in.
And the biggest mistake that new traders are making is they're trading live
too soon. And this is why I know this for a fact.
So if we take the markets about 20, 30 years ago, uh,
in order to trade the markets, whether it's four x,
whether it's stocks in dicey crypto wasn't a thing back then.
So we won't worry about that is you,
we didn't even have cell phones that could do that.
So the barrier for entry for that was much more difficult. If you wanted to,
to be a trader, what did you do? You had to go to post-secondary school, uh,
university college, you had to at least get an accreditation or a certificate.
Uh, you could not go and trade live money right away.
You had to work as an intern, as an associate, et cetera, et cetera.
It probably took about five or six years for you to actually, you know,
be on your own two trade. You know,
maybe minimum two or three if you went to a specific tech school.
So why is it that we think that nowadays just because we have
access to it, just by opening up our phones,
that we are gonna be able to do it without taking the proper steps.
So remember that. Alright, this, do you really think that in 19,
in the 1990s, the failure rate of the trade of the, uh, Harvard,
you know,
brown educated Ivy League people who are going into the marks,
do you think there's a 95% failure rate? No. There, there no, absolutely not.
Because the barrier for entry was completely different.
So what we have to do is we have to think, well what's changed, right?
It's us, it's our access to it.
So the moment that you realize that these guys who are having to go
through these steps to do the same thing you're doing now, um,
and they're having a low failure rate,
well maybe you start walking that same path. Do not trade. Live right away.
Get your strategy, get that data, develop the habits and the patterns,
test it live, then you'll be ready.
It'll happen sooner than you think if you just take goddamn time.
Yeah.
it then is.
Great advice to wrap up on. And I think folks,
you're probably gonna wanna rewind this, watch it a few times. There's,
it's packed full of useful nuggets and even I didn't catch all of them so I'm
probably gonna have to do the same . Tyler look,
thanks for coming back on the show. It's been fantastic now.
Love it. Thank you so much for having me.
Before you wrap up, what,
what's the best way for folks to find you and get hold of you?
Well, at my Instagram tag, um, that is probably the best way. Uh,
cause I'm still using my old, um,
email and Instagram kicked me off in August because of scammers.
You guys all know those fake accounts that keep popping up about the Forex guys,
you know,
you have Trading Nut or trading nu dot t and it starts asking people for money.
I had that happen to me. They got my old account taken down 10 to of followers,
I had to start from scratch,
but allowed me to recalibrate and redo everything what we're doing now.
So it's at your fourex mechanic on Instagram and yeah,
just hit me up on there, give me a follow,
whatever I'd love to hear from you and I'd love to talk to you and maybe see if
we can get you where I need to be.
Awesome. Well look folks, a big thank you to Tyler for sharing with us today.
Everything we've discussed here along with those links he's just mentioned, uh,
are gonna be the show notes to find them.
Simply search to Tyler in the search box on trading net.com. Until next time,
wish all my listeners Trading Happiness and Success. Alright.
Folks, there you have an interview done and thus with Tyler.
Now you do wanna probably hit that one on repeat, download it,
listen to it again sometime in the future. So many nuggets in there. Now,
if you do want more from Tyler,
then we did shoot a video afterwards where he takes you through his trading
strategy and one of the biggest mistakes you're probably gonna make back testing
any strategy that you come up with. In fact,
it's probably the reason why you hate back testing if you do.
So that is coming up on the YouTube channel. So head over there,
links underneath the video or pod folks, thank you for listening.
Thank you for watching wherever you are, and we'll see you in the next one.