S02E56 – Brian McAboy – Do you want to replace your day job and become a trader?

Key Timecodes

• 00:46) – Background history
• (02:16) – When he first started investing in the stock market
• (04:39) – When he changed his investing strategy
• (06:11) – His investing background history in the early 2000s
• (07:12) – His strategy and business model today?
• (08:37) – His future trading business model
• (10:04) – How long does he usually hold before selling?
• (18:27) – What is his win-to-loss ratio?
• (23:13) – What are his annual returns?
• (25:54) – What type of skills makes a good trader?
• (28:58) – How to learn the systems and strategies that he uses
• (30:25) – How long is the period to learn the systems and use real money on them?
• (31:17) – The risks of the internet gurus and their instant miracles
• (32:45) – How many hours per week does he work trading commodities?
• (33:42) – Deeper into his website and educational platform
• (36:20) – Is it possible to face trading as a job replacement?
• (39:48) – The worst business or investment advice he ever received
• (40:23) – The best business or investment advice he ever received
• (42:46) – Guest contacts

Transcription

[00:00:04.090] – Intro

Hey, this is Sean Tepper, the host of Payback Time and Approachable and Transparent podcast on business investing in finance. I’d like to bring on guests to hear authentic stories while giving you actionable takeaways you can use today. Let’s go. Do you want to replace your day job and become a trader? My next guest is a mechanical engineer and quality assurance professional by trade who became a full time trader in the 2000. In this episode, he talks about the risks and rewards, his average returns, expectations on how long it takes to learn his strategy and systems, and how many hours of work this requires per week. Please welcome Brian Mcenboy. Brian, welcome to the show.  

[00:00:47.900] – Brian

Thanks for having me, man. Glad to be here.  

[00:00:49.810] – Sean

Yeah, thank you for taking the time. So why don’t you tell us a little bit about your background?  

[00:00:54.570] – Brian

Well, background probably the best place to start is back in college. Love numbers, was total math geek. And so I went up in engineering, started off an electrical wind up in mechanical, took a couple of mechanical engineering classes, loved it and so made the switch my senior year, but totally glad that I did. Got out of school, went to work for a manufacturing company, which was a great experience. Company I went to work for, we’re making plastic bottles like this for oxygen, a Coke, Pepsi, Gatorade, that kind of stuff. And it was fun because they bounced me all over the place. I’ve got tons of good experience there’s. Some stuff I had schooling and experience for, other stuff I had to jump into it and figure it out. But anyway, I wound up in quality assurance, which I loved, and it’s been actually really helpful since I left corporate world in 2005. One full time trading. The quality assurance experience that I had really is what saved my trading. It’s been a fun journey ever since then. But as far as investing in trading, totally love the financial world. This beats a corporate job any day.  

[00:01:57.990] – Sean

We’re going to talk about your journey here. We’re going to break it down and how you got to go full time. As we’re talking about offline is Tykr and this podcast, we’re heavily focused on investing, not so much trading, but I do love to hear stories on traders, how you got started in the market, what you do, how do you make money in the market. But let’s go way back here. When did you first started investing in the stock market?  

[00:02:22.610] – Brian

Actually back in high school.  

[00:02:24.050] – Sean

Okay.  

[00:02:24.610] – Brian

Yeah, I had a rather frugal mom. She was also a bookkeeper. That was her trade and she recommended that I go ahead and get started in the stock market. There was an investment club at the church where we all went and attended a couple of those and decided to get started with it. So it was kind of neat. When I graduated high school, had a car, motorcycle, $1,000 in the bank and 100 shares of Gulf States Utility stocks. So that was kind of fun. But unfortunately it was not far from the legal drinking age. So things changed shortly after that. I had to go through a little learning curve. Just hitting the adult world.  

[00:03:03.770] – Sean

Don’t we all? So instead of buying stocks, you decided to buy beer.  

[00:03:08.980] – Brian

Some of both, yeah. Okay.  

[00:03:10.400] – Sean

All right. No, I appreciate that. Transparency. And we’re all kids and we live and learn. With the first stock, though. Gulf States Utility. Utility Company. Are they even around any longer?  

[00:03:22.440] – Brian

I believe so, yeah, they were. Main reason I looked at that one, I just wanted a good stable stock. And the research I had done, it’s like, okay, this is one where, yeah, I can buy it and just sit on it. Decent dividend payout and not any kind of aggressive growth, but super stable company. Historically, utilities have also been an extremely stable industry to invest in, and it worked out really well.  

[00:03:48.830] – Sean

Did you look at anything else other than like, the dividend and the industry? Did you look at like fundamentals?  

[00:03:55.390] – Brian

Well, at the time, the main thing, I was primarily focused on industry focus because the time period that we’re talking about, this was the early eighty s. And if you may recall or not, country was in a recession back then. The end of the early 80s was.  

[00:04:09.820] – Sean

A rough time, 82, and then a recession of the Great Recession they called it. Is that correct?  

[00:04:14.690] – Brian

Yeah, I mean, it was interesting times. And so, yeah, being able to invest and not lose money was a big deal at the time. It’s just like in any other economically challenging time, to be able to invest and not lose is like your first goal. Making money is a secondary goal, but the first thing, you got to make sure you’re not going to get into some and it tanks on.  

[00:04:37.580] – Sean

Right. Got it. So then early 80s, they say the best time to get started in the market is when the market is down. And there’s, right there. Right. Market was way down early eighty s. And then through the next two decades, did your investment strategy change at all? And if so, how?  

[00:04:59.790] – Brian

It changed some, I diversified some, dabbled in different strategies. Probably my favorite when it comes to stocks is covered calls. Good stable stocks pay decent dividends, and I found covered calls. The interesting thing I love about covered calls is that strategy by itself is a zero risk strategy.  

[00:05:20.380] – Sean

Right.  

[00:05:20.950] – Brian

It’s cool because all your risk lies with the underlying instruments. So it works out really well and it’s a good way to cash flow and just get better returns on your investment. And if the market does, if they do happen to move up, cool, you’re selling at a profit. Otherwise you just sit there and continue to enjoy the underlying assets.  

[00:05:39.720] – Sean

Yeah. Take your premiums, right. And rinse and repeat and did you do 30 day calls?  

[00:05:45.380] – Brian

Covered calls? Try different stuff real short, like days or weeks. The month tends to work out pretty good.  

[00:05:54.240] – Sean

Got you. Yeah, that way you can take residuals, you could call it every month you’re taking some kind of premium or you’re selling your stocks for profits. I like the zero risk. We are a fan of covered calls, of all the options, strategies. I have mentioned covered calls on this podcast before and it is a safe strategy. But let’s keep moving here. Let’s go through the early two thousands. That was the big tech bubble bust. Did you make some changes to your strategy there? What did you do during that time period?  

[00:06:25.770] – Brian

Well, with the stock investing yeah, I’ve tried a few different things along the way through spells where I wanted to be busy, try different stuff. And like a lot of other people yeah, there were some tech companies that I looked into and lost money on. But aside, as far as the more speculative stuff and particularly the more speculative industries, while there can be good money to be made there, personally, with this particular part of my portfolio, I like to stay risk averse, think more long term. So I stay away from speculative industries. Pretty much the mistakes. You learn what you can from them, but then you just want to let them go and leave them in the past. Carrying with you, it only really tends to work against you.  

[00:07:10.970] – Sean

Right, let’s talk about your strategy today and we’ll dive into your business a little bit as well. But what do you do today?  

[00:07:21.230] – Brian

Well, as far as actively, I do like trading. It’s buy and sell, not looking for buy and hold for a long time, as long as I’m in a position now. As far as trading, I like the futures market. Just for me, if you’re going to be trading something, I like the futures market because at least you’re trading an instrument that in my mind, it’s valuation has some sense of the real world. So many other instruments, a headline can wreck the entire market. But at least with commodities, there’s some real supply and demand in the world. There’s a tangible asset that goes with it. It’s not just a valuation based on everybody’s perception and general agreement, which in my opinion, most of the other markets are. I mean, currency is definitely if you know, you look back through history and at one point, I don’t remember which country it was, but had established tulips as their form of currency.  

[00:08:14.910] – Sean

Was that? The Netherlands?  

[00:08:16.850] – Brian

That sounds right, yeah. Could you imagine going to the store with your arm full of tulips to go do your shopping? But it’s just the medium of exchange and whatever people have confidence in and are willing to exchange it for as far as value and purchasing power, all that kind of stuff. That’s why I like the futures market, commodities in particular, let’s dive into this.  

[00:08:38.950] – Sean

So it’s tangible for the audience to understand. How does a future trade work? Walk us through a buy scenario.  

[00:08:45.580] – Brian

Well, the easiest scenario to make it understandable, one that was presented to me early on that I liked, is, let’s say you open up a bakery and you go down to the grocery store and you buy your flour and sugar and other ingredients that you need for your goods to open your store and have something to sell. Well, it’s not going to take you long to realize that you don’t want to be going down to the store every day and paying retail and hoping that they have what you need on the shelf. You’re probably going to go down to the grocery store and say, hey, can you make sure that you’re going to have the stuff available for me because I’m buying decent quantities and can we agree upon a certain price? Because I’m saying that I’m going to be buying from you and let’s just go and make the agreement that I’ll buy so much every month for say, the next year or whatever. And so that in the shortest version, that is a futures contract. We’re agreeing to a transaction at some point in the future for set quantity of a particular item for a fixed price.  

[00:09:44.300] – Brian

And to me that’s like the most understandable story because I didn’t even explained it to like eight year old kids and you’re like, oh yeah, I’ll imagine that. But that really is how the futures contracts work. It’s a contract for an exchange at some future point where all the terms are already agreed upon.  

[00:10:00.550] – Sean

Got it.  

[00:10:01.120] – Brian

And then the contract itself becomes a tradable item.  

[00:10:04.250] – Sean

Got it. So that’s your entry, that’s your buy. Tell us about the sell moment. How long are you holding? And obviously you want to buy something low and then sell high typically.  

[00:10:14.310] – Brian

And it all depends on the markets that you work with. There are a few different markets that have pretty predictable cycles. For example, unleaded gas. Every spring as soon as school gets out, prices are going to go up just because demand increases, because now schools are out and a lot of people are taking vacation and it cools down in the fall when school starts backed up and heating oil picks up in the winter. So there are some price cycles that are reasonably predictable barring any unforeseen major events. But for the most part, it’s a pretty predictable cycle. So those I like, some of the grains and the other energies, some of the metals have predictable cycles to them. So that’s what I like to look at. And I might be in a trade anywhere from two weeks, depending on what it is, to six months.  

[00:10:58.850] – Sean

Got you. So six months is still pretty good. There are investors in our community that they’re looking for that duration, not years, but like, hey, I want to buy something and sell, like, six months. So that is a similar duration. Yeah. Okay, so you’re not, like, doing day trading where you’re buying something in the morning and selling in the afternoon?  

[00:11:18.340] – Brian

No, that was another learning period when I tried forex. Okay. It was fun. It was a heck of a thrill ride. And not being on set exchanges, it’s easy to have it be a life consuming occupation because 24 hours and kind of like, it’s still wild, wild west. I mean, it was 15 years ago, and it’s still pretty much the same way. Like I said, that was mostly a learning experience. The day trading, with any style of trading or investing, I mean, whatever business you want to be in, the way that you’re making money largely depends on the cycle of your investing. And with day trading, the big advantage to day trading is you might not be hitting big wins or sizable gains, but with the frequency that you can be turning your capital over is where you have the advantage there for somebody to turn. A lot of investment firms, financial planners say if you make 78% a year, that’s a good year. With trading, and particularly day trading, to make 10%, 20%, even 50% a month is not unreasonable simply because of the frequency of what you’re doing. Because if you think about it, even with, like, say, a $10,000 account, to make $100 on a trade, not that difficult.  

[00:12:32.540] – Brian

Still keeping your risk tolerance. So it’s how often can you do that? And so if you’re day trading, can you place one or two or three trades a day? Sure. When you make it $300 a day trading, 20 days a month, that’s six grand.  

[00:12:45.810] – Sean

Right.  

[00:12:46.140] – Brian

So it really comes down to the frequency of how often you’re turning your money over. Actually, it was funny. Remember when ATMs first came out early? Two thousand and ninety s and stuff where I lived. It was funny because there was this one major street, and there was this one lot in particular. That the bank where I went, they bought the lot, and there was nothing on this lot except ATM. Little covered space next to it, and a lamp and the the asphalt for for driving through. And I’m like, how can they do that? How can they, you know, afford to buy the land, pay for it, have the lamp and the ATM sitting here? It just didn’t register. It’s like, how can they do that? Because banks, they don’t you know, they’re not they’re not into doing stuff for free. They want to make money at every time. But then I got to thinking about it. Of course, if I’m there, you know, if I have an account there, it doesn’t cost me anything, but everybody else that drives through there, they’re paying two to $4. And so let’s say the average withdrawal is $40, and they’re paying $2.  

[00:13:43.260] – Brian

Well, they’re picking up, what is it, 5% on every transaction and it’s being on a busy street. Yeah, they saw pretty good traffic. So they’re sitting there popping 5% every day, every time somebody goes through there that doesn’t have an account there. And so, yeah, heck yeah, they’re popping 5% now, not 5% at the end of the month or at the end of the year. Every single time, as soon as that transaction goes through, bam, 5%. So heck yeah, they’re killing it because they’re popping I mean, it’s like how fast can you turn that over? And same thing with the, you know, the ATMs in like the gas stations and convenience stores and even like with Factoring. You ever heard of factoring? No. One of the coolest businesses I ever heard of. I actually did a little bit of brokerage back in the 90s. It’s a business where you buy somebody’s account receivables at a discount and then you manage the receivables, they get the cash upfront, they don’t have to wait to collect on. So the first deal that I did in that was a guy who he sold fax paper, the thermal fax paper when they first came out, he had a really good source for that where he could get it dirt cheap and he had a whole bunch of customers.  

[00:14:50.140] – Brian

But his problem was they were paying him on a net 30 or net 60, so he would make the sale, but he wasn’t getting paid for 30 or 60 days and he had these crazy margins. And so the Factor would come in and buy the receivables at a 25% discount. And they were thrilled because all they had to do is sit back and go collect the receivables. He was thrilled because now he’s getting his money, now he can go buy more fax paper and instead of only turning it over once a month or once every other month, now he can turn it over four or five times a month. So yeah, he was giving up 25%, but he had enough margin. He was still making 25% or 30%, but he tripped his profits just because he could triple the frequency of how often he turned it over. And I’m thinking this is a crazy business because the Factor, they’re making about 100% a year, 2020, 5%. Turn it over six, seven times a year and he’s able to increase his cash flow, like triple. So this is crazy. This is cool. It’s like a huge win win and it’s like big numbers and they have to look at it.  

[00:15:49.820] – Brian

There are other pretty wild businesses out there that are every day going all the time and just kill it. And they’re actual sound businesses. So yeah, crazy stuff like ATMs, that’s huge business because if you’re popping 5% every day, tell them to take it, hit 100%.  

[00:16:08.930] – Sean

Right? But what if it in the ATM situation? What if they stay at the average withdrawal of 40 and your account size is significantly higher than it’s not the 5%. Well, I guess it would be 5% against 40 if it’s a $4 charge or $2 charge on 40. But in this case, I’m thinking of volume in that play. You look at more customers that go through to withdraw $40. That’s the win.  

[00:16:38.830] – Brian

Even if they’re making 1%, if you can keep flipping it over every day, 1% every day, end of the month, you’re 30%.  

[00:16:45.990] – Sean

Right.  

[00:16:46.360] – Brian

That’s crazy.  

[00:16:47.970] – Sean

I like how you look at things like that because it’s the really small wins, but consistent wins that add up. And looking at those business models, like what you did with an ATM sitting in the middle of nowhere. And I know exactly what you’re talking about because I’m thinking where I live, I see these ATMs, there’s nothing around, but it’s the convenience for the customers driving to the nearby restaurants or the store or bars or whatever. It’s like, oh, I got to make a quick snap at this ATM. And there you go. The meter is just running.  

[00:17:18.440] – Brian

Well, see, that’s why day trading. Like I said, day trading, that’s where you can take a small account and build it up really fast just simply because of the frequency. Even though they’re small wins, as long as you got a decent strategy and you can execute it consistently, yeah, you can keep turning it over and over and over and over, even with a lot of account exposure. So the trick to it is solid strategy, good system.  

[00:17:41.670] – Sean

Yes.  

[00:17:42.850] – Brian

One of the biggest mistakes a whole lot of people make is they’ll jump into trading with an idea for a strategy. And it’s it might be a sound idea, but they don’t have to be consistent about it where they can repeat it a hundred or a thousand times. That’s the trick. And actually, I mean, and really the same thing is true with investing. I mean, because, you know, no matter what you’re wanting to put your money into, whatever it is you’re going to invest in, it needs to have some sound reasoning of, okay, I’m going to put my money in it. How am I going to get my return?  

[00:18:11.790] – Sean

Right?  

[00:18:12.370] – Brian

So whether it’s buying a business where you have an investment thesis or a piece of property or stocks or trading or whatever, you have to have a strategy going into it. You don’t just say, oh, that sounds like make me money here, I’ll throw some money at it. That’s a quick way to lose a lot.  

[00:18:27.720] – Sean

Yeah. Well, what you learned with and I’m going to jump into your win loss ratio here in a second. I’ve talked to people who have tried day traders, and I’ve done my own homework. And even in the Tykr onboarding, we do have a source cited that was actually posted on LinkedIn that talks about 99% of day traders lose money, but they’re trying to buy and then sell on that same day. It’s very hard to hit those moments where okay, I’m buying low here and then by 03:00, it’s going to be high. That’s that’s very hard to do. In your case, commodities. You gave us the window two weeks to about six months. What kind of win to loss ratio are we talking about here?  

[00:19:09.730] – Brian

I think we run about a 45% winning percentage.  

[00:19:13.450] – Sean

45% of the time you’re winning. Doesn’t that mean 55% of the time you’re losing?  

[00:19:20.710] – Brian

Sure. But so long as you manage to profit, the loss aspect of it, it works out.  

[00:19:26.070] – Sean

Interesting. Okay, so the wins you’re making are outpacing the losses.  

[00:19:31.490] – Brian

Sure. Okay. It kind of comes down to your strategy because anytime you get into a trade or an investment, you can either say it has the potential to run, and so I’m just going to let it run, or you can say I’m going to shoot for a fixed profit target and get out when it gets to that point. I don’t care if it continues to run or turn, whatever. So your exit strategy has a lot to do with that and of course, your risk management. Are you going to protect yourself if you happen to be wrong to keep it smaller than your runners? Interesting.  

[00:20:00.800] – Sean

At 45%, because I’ve talked to traders before, they’re like all they do is they aim for 51% or higher. If I can win more than I lose, then I’m making money. In your case, it sounds like the wins you’re making are greater than the losses.  

[00:20:16.130] – Brian

Yeah. And, well, see, here’s one of the real mental traps that people can get into. Whether it’s investing long term or short term trading, you have to understand the numbers because the winning percentage by itself is meaningless. A lot of the reason that a lot of day traders don’t make money is because they’ll be looking. And scalping is a real popular strategy where you’re looking to get in and out real quick, sometimes several times a day. I mean, there are a lot of traders, they’re trading 1 minute charts. So you’re talking in and out in 1015, 20 minutes an hour. For some traders, that’s a long trade.  

[00:20:49.700] – Sean

Right.  

[00:20:50.340] – Brian

So the thing is, with scalping, most of the strategies out there, it’s not unheard of. Actually. It’s pretty common form to have like an 80% win rate. The problem is your winners. You might hit the eight out of ten winners, but that one or two losers that you hit will wipe out or can wipe out.  

[00:21:08.890] – Sean

Exactly.  

[00:21:09.770] – Brian

Because it’s a large loss and you got a whole bunch of small winners. And where some people get messed up, like I said, they’re just looking at the winning percent and they’re not paying attention to. Okay, but how does that go hand in hand with my actual profit to loss ratio on my trades? Are my winners bigger than losers? There are tons of traders that I know. This one guy, he only hits maybe 20%, but he’s got real strong risk management. And when he hits, he’s letting it run, and so his winners way outpaces. Losers. Interesting. And so the numbers work out. I mean, one thing you might hear in the trading space, it’s kind of a typical rule of thumb, is to have a strategy where you’re looking at a three to one reward to risk. So before you even get into the trade, you’re saying, I’m expecting to have the profit I’m going to make is three times what I’m risking. And you have that multiple in there. So it’s not a one where you have to have better than 50% win rate. If you have a three to one reward risk, you can win only 40% of your trades, but you’re profitable because your winners are so much bigger than your losers.  

[00:22:14.480] – Sean

Yes. Let’s take a quick commercial break. Hey, this is Sean. I’d like to say thank you for taking the time to listen to this podcast. I know there’s a lot of other podcasts you could be listening to, so thanks for taking the time to listen to this one. I have a quick request, if you have a moment. Could you please head over to Apple podcasts and leave a five star review? The reason is the more ratings we get and the higher those ratings are, the more Apple will share us with the world. So thanks in advance for doing that. And then I have a quick comment. If there are any questions you want me to ask the guests, please head over to our Tykr Facebook group. You could drop a question right there. I’ll go ahead and make a note, and I’ll do my best to ask that question on the podcast. All right, back to the show. So it sounds like in what you’re doing, and this will be something, you know, our customers or our listeners can they could reach out to you, ask questions about the waiting or the the dollar sizes and how like a 45% win ratio can actually make you, you know, a profit.  

[00:23:13.950] – Sean

I’d love to learn. You mentioned monthly returns traders can make, you said 10%, and I’ve heard people aim for that, but far short. What kind of returns are you generating per year?  

[00:23:27.300] – Brian

Per year?  

[00:23:27.940] – Sean

Yeah. Percentage wise?  

[00:23:29.190] – Brian

Well, in trading portfolio, I’ll double my investments every year. Okay. That’s actually pretty easy. I’ve got this one buddy. Mine. Granted, he likes to have fun with it. He’s experimenting on a regular basis, and he’s active in the forex markets, but he likes to see how fast he can double an account. And his record so far is five weeks, and he has a lot of fun with it. And he’ll be making 300% a year, typically going and taking some out, not just leaving it all in. But again, he’s an aggressive trader. He’s a very experienced trader, and he’s trading full time. He’s making sure that he has the skill level to go with it. See that’s one of the other things, whether it’s investing or trading or a whole lot of other occupations, I mean business, there are skill sets to go with it. And one of the big traps to it, whether it’s buying stocks or investing in commodities or currencies or crypto or whatever, you can’t just look at it and say, oh yeah, I understand it, I see how it works. Buy low, sell high, I can do that. That’s where people get killed because they’re not paying us proper respect.  

[00:24:36.810] – Brian

It’s a skill based occupation and if you jump into it and you don’t have that skill set, it’s going to be rough and you’re probably going to lose money. What I learned a long time ago, and the same was true with me, especially if you’re a little smarter than average, which most traders and investors are, because you have to be a little smarter than average to be in a position to invest and to trade and that kind of stuff. The mental trap of it is you can look at it and say, oh yeah, I get it. And so you jump into it with a false sense of confidence and you have to go through the school of hard knocks to so free up and say, oh, hold on, yeah, I have some things I need to learn here, but unfortunately, that’s what most people go tell me. And so did I jump into it before I knew what I was doing and started trading real money. Now, with stocks, I was ultra conservative because I was paying it the proper respect. I was very risk averse with stocks and still I am for the most part with trading.  

[00:25:31.110] – Brian

It’s a little bit of a different situation and I would say in general, the more risk averse you are, probably the better off you’re going to be because regardless of what it is, you want to be in it for the long game, which means you have to survive. If you’re being aggressive and you’re not risk averse, your long term odds go down. The more aggressive you are and the less risk averse you are.  

[00:25:54.600] – Sean

You mentioned skills. There is a certain set of skills you need. Can you explain what makes a good trader?  

[00:26:01.310] – Brian

Well, what makes a good trader from a skill perspective? Probably the best way to summarize it, if you have a similar mindset to that of a business owner, where you understand this is a long term thing and it’s an activity that I’m going to be engaging in on a regular basis for profit. So it’s not, you know, I’m, I’m just going to put my money over here and not look at it for 20 years. It’s an activity. Taking kind of more of a patient and respectful mindset is like the first step. As far as the skills that go into it, you have to be able to look at it from a financial perspective and say, all. Right, well, first of all, what am I trying to accomplish here by putting my money over here? What are my goals? How much am I looking to make and when and how long is it going to take to develop that and develop myself into that person that can generate that? So you got to start off with your objectives, but then you say, okay, what do I need to know to get into this? Well, if you’re going to be trading commodities or futures, well, you need to understand the commodities markets and where they’re traded and how to place trades.  

[00:27:05.200] – Brian

And you get into the individual strategies, then a skill set by itself really is being able to look at a strategy and reasoning it out. Is it actually a sound strategy. And then when it comes time to do it on a repeated basis, the skill of systemizing something, one of the huge mistakes that investors and traders alike mistake make is they’ll assume that a strategy is the same thing as a system. And here’s the catch. And again, this is where my quality background really paid off when it comes to trading. Your strategy is how you’re going to jump into this, whatever it is, and make money, whether you’re going to jump in to the markets and get out today or tomorrow or next week or whatever. But it’s your strategy for how you’re going to make money. Your system is, how am I going to do this 100 times? And they’re not the same. And so many people, there are unscrupulous sellers out there. People. A lot of them are just pure marketers others, they don’t care. They’re just out here to make a buck. Let’s sit there and say, oh, look at this great strategy.  

[00:28:08.790] – Brian

This is how you’re going to make all that money. And I’ll show you one chart. And we got in here and we got out over here and look at all this money we made. You can do it too. And it’s like, no, because it’s a dynamic environment. Stock market, the world economy in very fluid state all the time. So you have to be able to deal with that. But it’s okay, how am I going to get in, how am I going to buy stocks? How am I going to get in and out of the market? So I’m trading, how am I going to do this repeatedly executing this good strategy and do it consistently so that I can keep making money. And like I said, just understanding there’s a skill set that goes well. First of all, evaluating strategy, but then evaluating if somebody’s handing you a system, is it a solid system and where are its weaknesses from being able to do it over and over again? Because if you got a great strategy but you can’t repeat on it, it’s a very limited value.  

[00:28:58.810] – Sean

It sounds like systems is really the emphasis. Strategy is great, but systems is really the key to learn the system that you’re using. And I assume you’ve got a website here we’ll promote at the end, but does it include courses?  

[00:29:13.910] – Brian

Yeah. And the main thing that I teach everybody is how to take whatever it is you’re doing and systemize it properly so that it becomes repeatable. I don’t teach a specific method, so it’s not like I’m saying be forex, scalper, or whatever. Trade this strategy. I’m not selling strategies. I teach the skill set of, this is how you take whatever it is you want to do, take that idea and make it repeatable, and then prove it out so that you know it works. And then you can go to the markets and go with real money. And now you’re going into it from a position of confidence and knowing, and you’ve minimized your risk because you took your idea and you tested it and you tested it the right way. Again, from a quality experience. A lot of people think they backtest by police. Five trades with it based on last week’s data. It’s like no. Or I tried it three times and I made money. Yeah, it worked like, no. There’s a whole thing to testing something properly. So, like I said, I stress to everybody, be risk averse. And if you don’t know what you’re doing, don’t start trading with real money.  

[00:30:19.880] – Brian

Don’t play with real money until you know what you’re doing right. And you can do it successfully in.  

[00:30:24.090] – Sean

The SIM accounts to learn the system or some of the systems you’re teaching. Set expectations for us. Should we be talking, like, a month long investment? Three months. How long does this take to really get up to speed to start using real money?  

[00:30:41.150] – Brian

Typically 30 days to teach, because the way I teach is you jump into it and start doing right away. And so you’re developing the confidence and the experience to have the confidence in what you’re doing. And again, part of that also is testing it out. So not only are you doing, you’re testing it. And so you get actual numbers that tell you how good it is. And like I said, from being risk averse that’s the best way to go into it is you’ve got this idea and I’ve proven it out. Cool, I’m ready, instead of, hey, I heard this great idea, I hope it works.  

[00:31:17.210] – Sean

And you see all that on Reddit and Twitter and YouTube. I’ve got this one strategy for you. Click here and get it and go make money. Like, no, it does not work that way.  

[00:31:29.180] – Brian

Oh, it’s crazy. Just earlier today, I was looking around on YouTube, and some of the videos that come up yeah, I turn $1,000 into $10,000 in three trades in one day. Don’t do that to people, dude. Sadly, the guy’s got, like, 75,000 views on that video, and it’s like, Dude, you’re just a racking. Click bait, set up false expectations left and right.  

[00:31:51.750] – Sean

Yeah, and it’s unethical. And unfortunately, in our space with investing and trading, you see a lot of that, a lot of unethical teachers. We just saw the BS that went down with FTX. Oh, my gosh. And the YouTubers that were promoting that platform and getting paid to promote something that was complete garbage. You should be ashamed of yourself, guys.  

[00:32:13.470] – Brian

Well, what really blew me away, to put it into perspective, you remember the Enron crash?  

[00:32:19.880] – Sean

Yeah.  

[00:32:20.450] – Brian

That was huge. This was like three times that.  

[00:32:27.310] – Sean

Went down in history.  

[00:32:29.230] – Brian

Hitting yeah. The numbers involved here is crazy. There are some countries that don’t run it with these kind of numbers.  

[00:32:35.360] – Sean

I know. Anyway, to get back on track here with expectations, so 30 days, we can get up to speed. Now this is a job you’re doing this week by week. How many hours per week are you dedicating to trading commodities?  

[00:32:52.750] – Brian

Actually, not that much. Okay. The way I do it, I mean, I’ve been at it for a while. When I was first getting into it, to spend all day on it, you know, sit in front of the charts for six, 8 hours a day was not that tough. But anymore it’s like now that’s, you know, after 20 years, like, it kind of loses its charm that much for smaller doses. So I spend maybe about 5 hours a week.  

[00:33:14.480] – Sean

5 hours a week? An hour a day.  

[00:33:16.700] – Brian

All right, well, depending on how you’re going about it, that’s one of the cool things about it, is as far as how involved you are in it, you can be anywhere from him. I’m just going to hand my money to somebody who’s going to manage it and trade it for me to I’m going to do the crazy forex thing and I’m trading 20 hours a day, six days a week and everything. So it all depends on how involved you want to be.  

[00:33:42.340] – Sean

Could you tell us a little bit about inside out trading? I’m at your website now, just listeners, so you know it’s inside outtrading.com and it looks like you’ve got a book, like a free copy of a book. Is that correct? What else can you get on this site?  

[00:33:59.580] – Brian

Well, from the home page, just mainly three things. I used to have a whole bunch of stuff, and I do have a variety of courses and books and tools that I’ve created over the years. But the main things that I keep available just as kind of a friendly intro is a webinar that I have where I talk about and I call it the Science of Consistency Applied to Trading. And that’s where I talk about how taking the stuff that’s practiced in quality assurance, which has been proven around the world for decades in the business world to be a great way to make money and hedge risk applying it to trading or investing again. Even if you’re long term investing, you still want to be consistent in what you do if you have a good strategy. And so the whole thing and the main message I try to get across to people is don’t focus on profit first. Focus on consistency first, because then the profit part gets easy. Because as far as strategies, I mean, you know, the stock market, investing, I mean, commodities, tech trading, commodities, it’s been around for, you know, centuries. The stock market has been around for decades.  

[00:35:00.420] – Brian

And so there are strategies that have been around for years, many, many years, and proven out solid strategies. They work if you can just apply them and execute them consistently. So a handful of strategies that have been around for a long time, actually, if you list them out, there are a couple of dozen proven strategies. So, again, consistency. All right, got that. And the report, it’s not a book, it’s a report. It’s about a 25 minutes read. Okay, well, one thing, and it was funny, because talking about the trading buddy of mine, and we were having this conversation about how a lot of really smart people get into trading, not knowing what they’re doing. Like I said, look at it and say, yeah, I get it. And so they jump into it. And so it was funny in the conversation. It’s like, oh, the four words came to mind, the magic four words that describe most traders and did for me when I first started out is enough to be dangerous. Because it’s like, yeah, this is an area where if you don’t know what you’re doing, what you don’t know can and will hurt you.  

[00:36:02.000] – Brian

And unfortunately, most people do get into it, and they start trading with real money when they really only know enough to be dangerous. They don’t really know what they’re doing because the training that they received was very inadequate, because the people that were there that they’re not incentivized to make sure you’re knowledgeable. They just want to get busy. That’s how they make their money.  

[00:36:20.970] – Sean

Yeah, we get a lot of people that they’ll reach out to me, and they’re looking for the stock market as a job replacement strategy. They’re in a position where they don’t love who they work for or what they do for a living. And I get it. We’ve all been there, and they’re like, how can I quickly get into something that matches my salary or exceeds it and do that overnight? And unfortunately, that is extremely you’re not in your head for those. I love it. I love your action here because we’re on audio. We’ll do some of this on YouTube. But I love that reaction because that’s not reality. We look at investing with Tykr as this is how you accelerate building your wealth. But most people, they still need a job to fuel their investment account. You got to be putting money every month. And this it sounds like if people are getting started, you probably don’t want to quit your job right away. You want to be doing this in parallel. And if it works and you’re consistent, you hit that keyword. If you’re consistent, then that creates the jumping off point. Like, okay, so the last 3612 months, I’ve generated this much per month, and I’m profitable.  

[00:37:33.320] – Sean

Okay now I feel good. Now I can leave my job. Does that sound a little more reasonable?  

[00:37:38.810] – Brian

Oh, yeah.  

[00:37:41.730] – Sean

You’Re grinning ear to ear.  

[00:37:43.890] – Brian

Yeah, well, what you’re saying is absolutely true. And what’s funny is, when I first got into this, I got to know a few different brokers, talking with some of these brokers, and the stories that brokers have to tell, especially from the days back when you place trades through a broker, you pick up the phone and you called somebody to place a trade. Not jumping online, doing it through the Internet yourself. These guys had some hilarious stories. I mean, people, they jump in and they’re in and out of their career, like, in one day because, yeah, they’re just looking for that super insanely quick buck. And again, it just boils down to treat it with the proper respect. Honestly, being realistic, if it was that easy, where, yeah, you could just jump into it in one day and be making a full time income from it, a lot more people would be doing it. But markets are more fair. And so they slap down everybody that does that and they’ll let you know it’s like, no, come back when you’ve grown up a little bit. Yes.  

[00:38:45.670] – Sean

Well put. Well, this has been really a lot of fun. What I want to do next is dive into the Rapid Fire Round, and then we’ll have you promote your site here at the end a little bit. So this is rapid fire round.  

[00:38:57.390] – Brian

This is part of the episode where.  

[00:38:58.430] – Sean

We get to find out who Brian really is. If you can, try to answer each question in 15 seconds or less.  

[00:39:04.910] – Brian

You ready?  

[00:39:05.950] – Sean

All right, what is your favorite podcast?  

[00:39:08.750] – Brian

Favorite podcast? Predictably Irrational.  

[00:39:14.570] – Sean

Okay. Is that with Dan Arielle? Yeah, I love him. He’s great. Next question here. What is the recent book you read and would recommend?  

[00:39:24.950] – Brian

The one thing love. Yeah, absolutely. And I’ve recommended it to hundreds of people.  

[00:39:32.470] – Sean

Good recommendation. What is your favorite movie?  

[00:39:35.740] – Brian

No. The matrix. Are you kidding?  

[00:39:37.040] – Sean

Even after we’ve got a data guide, we’ve got a mechanical engineer, and then Kiwi, of course it’s going to be The Matrix. Man, I can relate. All right, we got a few business questions here. What is the worst business or investment advice you ever received?  

[00:39:56.510] – Brian

The worst? Probably the worst was thinking that it was being told that I could jump into investments that I knew absolutely nothing about. Just if the if the pitch sounded good, it was a friend of mine back in back in college, and the whole thing then was the oil fields in Kansas or, like, movies and no.  

[00:40:19.170] – Sean

No, that is bad advice. All right, let’s flip that equation. What is the best business or investment advice you ever received?  

[00:40:29.450] – Brian

The best be risk of patient by far. Best advice?  

[00:40:35.970] – Sean

Two good ones. All right. And time machine question if you could go back in time to give your younger self advice, what age would you visit and what would you say?  

[00:40:45.710] – Brian

Go high school, for sure. And honestly, I would go one of two routes. When I was in high school, like up to my junior year, my plan was to go in the Navy when I graduated, get my engineering degree there. Like a couple of uncles did change that. Wound up my girlfriend talked me out of it. And so that’s probably one of the first ones that I would change. The next one is, honestly, I don’t know that I would have gone to college at least not doing it the way I did because I found that there are some and it used to be even more prevalent, but it’s a trend that’s coming back. It’s companies that will pay for your schooling. And what I would probably do if I had it to do over again is I would go back and I would go work for a company that would pay for my education and one where I wanted to work anyway, so that when I graduated. I’m graduating with a resume and a degree that’s paid for. That’s probably one of the big ones. Just graduating with the resume and the experience would be huge because so many kids nowadays, they go to school and they get out of school.  

[00:41:50.450] – Brian

They’ve known college life for four or five years, and the real world is just a huge shock form plus returning the debt load. But there are companies that look, I was amazed. Like I said, it’s a trend that’s coming back, and I’m thrilled to see it. The companies are willing to pay for your education if you’ll go to work for them for a year or two after you graduate. It’s like, cool. That’s a great deal. Not only am I going to have a resume, I got a guaranteed job. Cool. Those are probably the biggest things. I would go back in time and change because those would have set my life on different paths entirely.  

[00:42:25.790] – Sean

I love that advice. I think a lot of our younger listeners, especially if we do have anybody in high school or if parents have any high school students, that’s a sound strategy. Yeah. Try to network into a company, tell them you work for them, commit to them, get your education paid for, no debt coming out from school. Brilliant. Love it. All right, and last question here, I’ll actually turn it over to you. Where can people reach you if they want to learn more about your system and your strategy?  

[00:42:55.350] – Brian

Well, at the website insideouttrading.com, there’s a link there where you can email me or if you want to schedule a call with me. They’re both on the homepage. Or if you just want to go find out more about me, I got a channel on YouTube, Brian McEvoy, and Swing by there. Got videos going back quite a few years. You can see me when I didn’t have the gray and was just getting started with all this. Sure.  

[00:43:22.910] – Sean

Well, awesome. Brian, thank you so much for your time. Really loved your background and some of the expectations our listeners can set up to try getting into trading commodities. So thanks again.  

[00:43:32.960] – Brian

Yeah, thanks so much for having us. Love being here, man. Appreciate it.  

[00:43:35.620] – Sean

All right, we’ll see you.  

[00:43:36.690] – Brian

Cheers.  

[00:43:38.870] – Sean

Hey, I’d like to say thank you for checking out this podcast. I know there’s a lot of other podcasts you could be listening to, so thanks for spending some time with me. Also, if you have a moment, could you please head over to Apple podcast.  

[00:43:49.990] – Brian

And leave a review?  

[00:43:50.880] – Sean

The more reviews we get, the more Apple will share this podcast with the world. So thanks for doing that. And last thing, if you do hear any stocks mentioned on this podcast, please keep in mind this podcast is for entertainment purposes only. Please do not make a buy or sell decision based solely on what you hear. All right, thanks for your time. Talk to you later. See you.