S4E17 – Kevin Jefferson – Lost $30K in one week with trading

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Key Timecodes

• (00:57) – Show intro and background history
• (16:55) – Deeper into his background history and trading model
• (24:29) – Did he recommend any broker?
• (31:47) – A bit about his course
• (32:47) – Understanding his strategies
• (37:19) – What kind of returns is he getting per month
• (46:07) – Deeper into his trading strategies
• (55:02) – What is the worst advice he ever received
• (56:09) – What is the best advice he ever received
• (58:32) – Guest contacts

Transcription

[00:00:00.000] – Intro

Hey this is Sean Tepper, the host of Payback Time, an approachable and transparent podcast in building businesses, increasing wealth, and achieving financial freedom. I’d like to bring on guests to hear authentic stories while giving you actionable takeaways you can use today. Let’s go.

[00:00:18.000] – Sean

So investing and trading are very different strategies in the stock market. So the big question is, can you actually make money by trading? Well, in most cases, no, but there is one strategy that you can makesure he returns with, and that would be forex trading. However, my next guest shares his painful journey of losing $30,000 in one week, and that turned into a teachable moment where he then decided to learn the correct way to forex trade. So in this episode, he breaks down his painful journey. He also talks about a strategy. He gets into what returns he makes per year, and he talks about what time investment you can expect to make per day. Please welcome Kevin Jefferson. Kevin, welcome to the show.

[00:00:59.840] – Kevin

Hey, glad to be here. Thank you for having me, Sean.

[00:01:01.600] – Sean

Absolutely. Thanks for joining me. So why don’t you kick us off and tell us about your background?

[00:01:06.950] – Kevin

Okay. I’m a public school product, born in Illinois, grew up in Dallas, Texas, from maybe the age of four. Went to college, even public school, went to and graduated from the United States Military Academy at West Point and was in the army. Was a field artillery officer and played around the dirt, spent some time over in Kuwait, and what a rapid deployment unit was my last duty station, so we were always in the field. Then I got out of the military in around ’99 before 2000. My first job out of the military was working for Georgia Pacific, which is a manufacturing company out of Atlanta. What I remember about the time, because it’s been an eons ago, was that there was a real heavy push for former military officers and former senior NCOs, non-commissioned officers coming out of the military because I guess there was a real push for leadership, I guess, in corporate. I found myself fielding a lot of offers to go into roles that I functionally didn’t think I had a particular skill set in. I didn’t know anything about manufacturing, per se, but I knew more about leading people and guiding people to outcomes.

[00:02:15.900] – Kevin

I was with Georgia Pacific, and I was in their containerboard and packaging division. For those who don’t know what that is, it’s what most people miscategorize as a cardboard box. There’s actually no such thing as a cardboard box. It’s actually called corrugated, and actually the corrugated materials will provide the strength for the box. Anyway, what I realized, even though we did a lot of really neat stuff, we had contracts with Kellogg’s. You do the Egglewaffle boxes and the cereal stuff and the wine stands that you see in the store with the literally convocated Ernest and Julie O’Gallow wine, that’s all corrugated. And so what I realized was there is a lot of money in what we call dumb stuff, like stuff that nobody really thinks about. I think it’s appropriate also probably from an investment standpoint, because sometimes we get entangled with the sexy names, but don’t really understand the value of the things that’s mundane. I really remembered that because I was like, We’re making billions of dollars, and all we’re doing is making brown boxes that people kick around every day in disrespect completely. I remember I didn’t even realize or appreciate the value of the brown box myself until I went into the corrugated industry and then I went into a U-haul and I saw how much they were charging for a box and I’m like, This is outrageous.

[00:03:36.900] – Kevin

This is really expensive. This is like a small Happy Meal for a box. Anyway, I was in manufacturing and they taught us everything from design to customer service, scheduling, logistics. It was really a fully encompassing, fast track management training program. I really appreciated that coming out of the military, it really got me into, I think, the right mindset as related to corporate. And if I wanted to have any type of corporate aspirations, what that would look like, or maybe at least in this industry, what it would look like. I remember coincidentally actually getting recruited by Amazon back then. This is the late 90s, so ’98, ’99, ’99, going into 2000. I didn’t take the job. I kept my little $52,000 a year job with Georgia Pacific, where I was guaranteed to get two raises in the next year or 58,000, I’m sorry. I’d have $62,000 by the time it was done a year. Amazon was looking to pay me, say, $80,000 to $82,000 a year. The only thing I could remember thinking was, This company isn’t making any money. I don’t want to go there because they’re like, They were not in profit, even though that was part of this manifesto.

[00:04:51.020] – Kevin

Anyway, I was really conservative and just speaking to my mindset when I was out there in corporate. But one thing I did know, one thing that was always ringing in the back of my head even back at West Point and coming through because I was what they call a dead poet. I’ve majored in English and I’m hired in the information systems at West Point. Basically, it’s like, okay, I got to be a professor, a lawyer, or something. I was actually studying for the while I was out in the desert. When everybody was asleep, I was studying because I was like, I got to find a career, be in the military when I get out. So anyway, financial advisory work was always something that was exciting to me because of the knowledge and and I really enjoyed the markets. I saw that as a true path to real financial freedom or whatever. And so back in the 90s, I remember going to Barnes and Noble. You think about the internet as it is today, it was nowhere near what that was back then. And so you still had to go to bookstores to buy books and actually get the intent and the motives of the author by reading, have to skim the book and do the work.

[00:05:55.890] – Kevin

I would spend Sundays literally at the Starbucks at Barnes and Noble and learning about how to be a financial advisor, about ADB forms and all this stuff. I say that to speak to really people talk about manifestation and really intentions. I really set my intentions on getting myself prepared to be in that industry. Although there was nothing at all to do with that space if you looked at my life at that time, or if my background really led you to believe that I should be even thinking about going that direction. Not from an ability standpoint, but just from a career where I’ve been. I remember doing that in then in November of 2001, so for those who don’t place that immediately in their memory, that’s about two months after September 11th, 2001, I got a call from a recruiter, a head hunter who was looking for former officers and ACOs to become a financial advisor with Merrill Lynch. And so when he called me and he said, Hey, can you fly up to New Jersey on Thursday to the headquarters for an interview? We just seeing about some guys. I was like, absolutely. And so for me, it was one of those moments to where I continue to tell my students this, prepare for the thing that you want, because when it comes, you’ll never, ever hesitate to do it if you really want it.

[00:07:12.070] – Kevin

So although the timing of when I got into the industry, when I was trying to become a part of the industry as an advisor, it would not have made sense. It didn’t make sense on any level. And even speaking back to when I just really thought about this, even going back to my comments about Amazon, I was more of a conservative, safety-driven person, I think, on some level. But I was absolutely certain that that was the direction I need to go. A lot of serendipity happened along the way, and I became a financial advisor and got my Series 7 and 66 and life insurance and did all that stuff. I go into production in 2002, and the thing is nobody wants to talk about stocks in 2002 because the market just was not ready for that. So it was bad. I did millions of dollars of mortgage business my first year at Merrill Lynch because that was interest rates were low. We did LIBOR-based refis and wealthy people love saving money. You get a 1% mortgage on your million-dollar house, you run to do that all day long. I just became more adepth at creating value and finding ways to meet people where they were and then back ended into a conversation that maybe I wanted to have.

[00:08:24.080] – Kevin

A large part of my success, I think, also with business owners and entrepreneurs because I would call them about just getting a better interest rate on your credit line of credit that you have at your bank because Meryl had a great business financial services arm. I’m always thinking, Okay, I’m an entrepreneur because I have to earn my commissions, I have to earn my keep, the production goals are high and they don’t care what happened last year. They want you to bring in this money. I would just go to, like you say, business owners would always have a conversation about… They would have a conversation about their business nine times faster than they would have a conversation about themselves. That’s just how business owners, what I found their sentiment was that their baby, their project, their thing, their identity was built around this business. I would just hit them where they were and they were concerned about their employees, so they’re trying to save on taxes. You just do these things to create value, and then all of a sudden, you talk about investing because you’re talking about a 401(k) plan or some type of deferred comp where the owner can keep more money and not have to do certain things and just get really creative and fun with it.

[00:09:31.960] – Kevin

When I went independent, eventually I left Maryland. I started my own outfit in 2005, I think it was. I took that with me, and I just took the openness to new things with me because that was the thing that made me successful or allowed me to survive in the time that I did. I moved back to Texas. I was living in Alabama at the time. Actually, I was working with Meryl out of Huntsville, Alabama. I moved back to Texas. Actually, I’ve gone through a divorce, so I had no reason to be there except for my clients. I moved back to Dallas and it was really starting over. It was basically refreshed my business, and thankfully I had a lot of great clients. Some of them, even to this day, work with me almost 21 years later. We do something together. We’ve invested together. I trade for them or something. I came back, and that was 2008, 2009 time frame. I remember stumbling across… The CNBC had this thing called a portfolio challenge that I was always participating in. And what it was was essentially they give you a million dollars of notional money and you create a portfolio.

[00:10:40.610] – Kevin

And the one that basically has grown the most after the contest was over, you actually got a million dollars. I never got a million dollars. But I remember that particular year, they had foreign currency as one of the asset classes that was available. The euro was twice as valuable as the dollar back then in 2009, 2008 time frame. I just bought a lot of euro and didn’t have any understanding of leverage or what that meant from a risk standpoint. But when I went back and checked my portfolio, it had grown significantly. It got me excited. I’m conservative on one side, and I know I’m very aggressive on the other side. There is this dichotomy that I work through when it comes to making money. It caught my attention. I started that journey, and I really attribute a lot of me even going down that path, not only to the fact that I wanted to learn how to actually have a skill, because being a financial advisor, you have the skill of selling and you have the skill of understanding concepts, and you have the skill of selling those concepts to people to get them to execute those concepts.

[00:11:44.470] – Kevin

But you don’t really have the knowledge of the market as a trader. I remember one of my clients, Sid Hutchinson, several years ago, we were at his house. He was a bond buyer. We were buying bonds in 2004. Something was on the news that Mark was coming back, economic recovery was happening. He said, I’ve never seen anybody who had a trade who wanted to work that couldn’t work. He was a tailor. He was a retired tailor. He had that business that he sold to his apprentice. It got my attention. I was like, Okay, you all want a skill set. I want something that I can actually drive outcomes with, regardless of if anybody’s buying or not. I started trying to try the stock market, but mind you, in the early 2000s, you have to read a book to do that. Reading books about learning how to trade is not my jam. I looked at this book and I’m like, This might as well be another… This must be the fourth religion. The fourth minor theistic religion, because I don’t know what it is and I don’t understand it. I put a pin in all that.

[00:12:44.170] – Kevin

My life was happening all around me. And so when I stumbled across the trading with 4X, it really got me excited. I started on that journey and it wasn’t easy initially because as we just talked about a second ago, going on YouTube is the default method now to go learn something like YouTube was not even around. It was like in its infancy. I remember ABC was promoting YouTube in 2009, like this new thing. The access to resources and trusted resources was very limited, and so it made it very difficult. And you had to basically trust the brokers and try to find stuff online to learn how to trade the currency markets. And aside from Babypips, babypips. Com is probably the best website I’ve seen that can teach you from zero to a hundred of understanding the currency market. But aside from that, you were just figuring your way out. And so fortunately for me, what happened was one of my childhood friends, there were a group of three of us who would trade together at night. We trade the London Session. And for those of you who don’t know what the London session is, that’s basically when everybody’s asleep, you’re up.

[00:13:48.020] – Kevin

It’s like third shift. You’re up at one, two o’clock in the morning and you’re training, that’s central. Two, three o’clock in the morning, Eastern, you’re up trading for about three hours because that’s where the meat of the market is, and then you’re going about trying to have a date. One of my childhood friends, Toby, who we grew up playing soccer together, he told me about a gentleman out of Florida at a point. Just like most people are, I think most entrepreneurs are, and most people who want to be financially independent are, I was very stubborn. I was like, No, I’m going to figure this out on my own. I completely rushed to failure and got to my… When you talk about a hero’s journey, you have that moment of reflection, right? You’ve got that sitting on a rock moment to where it’s like, Okay, am I really Batman? Do I want to be Superman or do I want to be Clark Kent? Do I really want to take the mantle of being great, or do I want to accept the mediocrity of being like everybody else and saying, okay, you know what? I’ll just take my losses and I’ll move on to do something else.

[00:14:45.980] – Kevin

I remember having that conversation with myself after a week to where I put like 50K in an account and I was highly leveraged. I really hadn’t learned about risk management. I took a trade and I think I was out of the money by $10,000 or so. I joke with people. You probably heard it on other people ask me about it. I call it the sinners’ prayer to where I got out of the money and then I said, God, if you give me back to break even, I promise I’ll get out of the trade. And it came back and I literally was lingering right there at take profit, plus or minus right there. And just like most sinners do, I was like, well, maybe it’s going to keep going. I didn’t close the trade out. It went against me. I obviously didn’t have a stop on it because I wanted it to play out. And after a week of moving my laptop between my bedroom and my coffee table, the non-farm payrolls came out on the Friday. I haged against myself because I thought I was on the wrong side of the market. And next thing I know, I took a $10,000 loss and turned into a $30,000 loss in a week’s time.

[00:15:48.010] – Kevin

So beat that. Anyway, my chest was hurting. I went and got a massage. I had a couple of drinks. I just had to reset a little bit. But I remember I had still had some money left in the account, so I was like, You know what? I still have a chance. Quite candidly and seriously, I really took that as an opportunity to go and get instruction. I started learning about price action because most people outside of the US were the ones who actually were trading markets. I learned from a guy from New Zealand, and then I got more consistent. At a certain point where I thought I was really at the turning point, I got really nervous. I took like 5k that I made from a trade, and I took Topay’s and flew out to Florida and invested that to learn from a guy who had learned from an institutional trader, and it changed everything. He showed me how to see the market in the right ways, and so I became successful with it enough to basically eliminate my advisory practice, keep the income, and remove the clients. And so that’s what landed me here.

[00:16:51.620] – Kevin

And that was over 15 years ago when I started trading.

[00:16:55.590] – Sean

Hey, we have a story in front of ourselves to unpack. Yeah. Kevin, I appreciate you sharing the loss there of $30,000. We at Tykr, we’re big on investing. And one of our rules is we call Rule 1 investing, Warren Buffett style, which teaches you Rule 1, don’t lose money. Rule 2, don’t forget Rule 1. You can do that with investing because you’re not entering and exiting the market. In your case, trading, there’s an example. Listeners out there, you think about trade. It can go against you pretty bad. Absolutely.

[00:17:32.990] – Kevin

Yeah, really badly.

[00:17:34.750] – Sean

Just to be clear, did you sell your financial advisory practice?

[00:17:39.900] – Kevin

No, I didn’t sell. We just throttled it down. We let them know that we were moving to transitioning and we were doing other projects. They just decided to either partner with us on new projects. We were doing more private equity stuff. I just moved away from the conventional stuff and we just became more partners than clients, I guess. We just changed our phase of business. But essentially, it was just how I was providing service to them was what changed.

[00:18:06.480] – Sean

Got you. I want to get an idea of your percentage split here. Is it like 20 % focused on advisory, 80 % on trading now?

[00:18:16.100] – Kevin

Now it is actually probably it’s interesting you say that because I just entered a new partnership that has nothing to do with the advisory, financial advisory piece as a personal advisor, per se, but more business consulting. We have an MNA partnership, Emerges and Acquisitions, where we advise people not only buying and selling business, so they do, but we have a consultancy. I was brought on as the financial director to help appraise them of their options with different financial stuff, but it’s really a part of a bigger thing. So pinning that aside from that, I would say actually it’s probably 90 % trading. And the 10 % consulting is actually probably me and my students, because I have students now that I teach how to trade. So the real consulting is with them. But 90 % of my days or my week, I’m a trader.

[00:19:06.420] – Sean

You’re a trader. Okay. Because I’m on your site here, which is fmtrades. Com, correct? Yes. And it looks like this is a place where you can do it yourself. You teach people how to trade on your own. Or I see you can do it for people as a service, correct?

[00:19:27.050] – Kevin

Correct. The DIY is do with yourself. And that’s really where we started. Actually, so we were talking before we start the podcast about getting some Nuggets, I’m really redirected back towards the DIY side because it got lopsided to the DIY, which is fine. But the DIY side was where I have the online course with self-paced and takes you from not necessarily having to know anything about how to trade to how to actually execute a trade, what to look for, and then how to actually take action upon that, how to manage your risk and things like that, and some mindset stuff. We start with mindset because a big part of training really focuses on your mindset. Then what evolved from that was the the DFY side, because at one point before COVID, we were doing boot camps. And so people would fly to Dallas and do a two-day boot camp with us where we would teach them the same thing that they basically learned online. We would teach them how to go from zero to hero in about 48 hours, at least being competent, being able to take a trade and read the markets. I don’t expect them to go out and make a million bucks, but they would come in and get really a sound.

[00:20:40.240] – Kevin

Some people are better in-person learners than online. So we had that. And then in one of the classes, one of the last two classes we had, I remember we had a lot of health care people coming through, so a couple of doctors came through, some nurses and some IT people. But one of the doctors asked me on a break. He’s like, I love the information. This is really cool. I get it. It makes sense. But we rescheduled three times to have this boot camp. How much would it be just for you to do it for me? We laughed about it, but he helped solidify the idea that the FY side had done for you. The DIY is for you if you want to learn on your own. What comes with that actually is the ability to have a trade one account on your behalf, one of your account with your own resources you put in. We have a way to where we can connect ourselves to it and not take custody of funds because that’s my big thing. It’s not violating any regulatory requirements, obviously. We have a way to do that. Even as a student, you can do that.

[00:21:36.440] – Kevin

Then we have our chat group where I send my trades out. So even if I’m trading for you and your student, I send you the trades with the entry, stop loss, take profit, risk percentage, all that stuff, so that you can actually… Even if you’re just demo trading, you could follow me and really see how I’m thinking about the trading. There’s a lot of ways to hit them and reinforce the concepts while they earn along the way, because that’s what most people I think in any financial endeavor, I think the biggest thing you’re trying to overcome is the fear of losing out or missing out. I try to alleviate the fear of them losing out or missing out by allowing them to have one account attached to one of mine. But then I also want to educate them along the way so they can build confidence and at some point feel comfortable detaching from us and doing it on their own, essentially leaving the nest. And then there’s the done few side because, like I mentioned, we have a lot of business owners and entrepreneurs who say, Yeah, that’s all cool, well and good, but really, we just want you to do it for us.

[00:22:30.450] – Kevin

And it’s not much of a difference because they still get the online course, but I don’t expect them to be engaged. And so we just charge in their membership fee and they re-up every year and they keep, depending on how they do it, they keep their profits. Or if they use a Prop account, they split the trading money with the Prop firm. We just try to find ways to serve people where they are. But the DIY is for people who want to learn, the DFO is for people who know that they’re not going to do it today, but they still want to win with us.

[00:22:57.050] – Sean

That done for you, does that roll up under or are you allowed to do that because of your certifications?

[00:23:03.160] – Kevin

No, it’s really more of a trade copying service. What allows you to alleviate that is, like you say, everybody is establishing their own account. We actually have some brokers in the US that when people are setting up their own accounts with their funds, one of our attorneys is what’s called the Introduction Broker. He has his licenses. We have contracts where he has relationships to where we can recommend, Hey, this is a list of people that are what you call regulated brokers, but the client sets up their stuff themselves, they funded themselves. All we do is connect it with our technology to where they read, basically reading our data almost like an API to where we feed their pro-rat a share of my trades into their account. Like, say, if you had a $100,000 account and I had a $100,000 account, when I took a trade in my $100,000 account, you get one-to-one basically lot size because it’s the same account. But let’s say if you had a $250,000 account and I had a million-dollar account, you get 25 % of that lot size that I would take a trade because it’s always proportional. That way we’re taking the same trades, but you’re getting it in proportion to your account size, which keeps your risk down.

[00:24:14.750] – Kevin

Then you can benefit almost as if you bought into a fund without actually sending money to us. That’s the piece that keeps it arm’s length is that you’re becoming a member as a part of that membership. You get to rock with us.

[00:24:28.970] – Sean

What I want to do next, I want to understand your broker, because our audience is very tactical. They like strategy. They like to do stuff now. I’m going to get into the course a little bit and then get into your strategy with trading at a high level. Of course, if they want the full recipe, they know where to reach you, which they can see below in the show notes. Do you recommend a certain broker? Is it like T. D. Am. A. R. Trade or Fidelity? What do you recommend?

[00:24:56.760] – Kevin

Great question. Actually, I look for just maybe execution and spreads, the low spread, relatively low spread. We have international clients, but the majority of our clients are in the US, and so our members are in the US. I’ll start with the US and then I’ll expand out from there. The two brokers that I generally work with in the US, I don’t necessarily recommend, but I’ll say my experience has been with, is on forex. Com, which they get a lot of high ratings and they’re good for people who maybe have entities. If you have a trading business, they’re good with business accounts because I think they give a little bit lower spread for business accounts or whatever. And then Oanda, O-A-N-D-A, is another firm that’s regulated and out of the US. Just from a customer service and reliability standpoint, those are the two that I normally try to get people to consider. Got you. Yeah, but then internationally it’s pretty wide open. I have worked with FX Choice. They’re out of Belize. I’ve worked with FX CM. Obviously, they’re not here in the US anymore, but IG out of London. And then I would say, yeah, FX Choice is one of my faves as far as international because I had accounts with them before people in the US couldn’t get accounts with them anymore.

[00:26:11.560] – Kevin

And I watched them through the Swiss National Bank crisis, and I think that was 2006, somewhere, I don’t know, 2000, whatever it was, it’s probably about eight years ago, there was a big Swiss National Bank issue to where the euro was pegged to the Swissie. And they decided in the middle of the night that they weren’t going to do it anymore. The market went horribly bad. And so what that meant in the currency market is if you trade poorly, you can actually end up owing your broker money because they’re actually loaning you on leverage. It’s credit on leverage. It’s the worst credit. There’s the godfather, and then there’s institutional leverage credit. If you don’t get your money from the godfather, you go to the institutionals, if it goes bad, it could go really bad. But they have fail-safe in there to keep you from that happening. But things happen. This is one of those times with things when you went wrong. I remember getting up, come into my computer because I didn’t trade that night and see any set ups. I got up the next morning and I came back and I saw this big, really long red bar from the top of the screen to the bottom of the screen.

[00:27:14.680] – Kevin

I was like, Oh, something interesting happened last night. I went and looked and everything that was tied to the Swiss franc had dropped significantly or whatever. I think this is what happened. I went and looked and that’s what happened to Swiss National Bank crisis, where they basically lied and cost a lot of people, institutions lost a lot of money. A lot of retail investors got locked in there. I’m getting to the point. Because of the lopsided move, first of all, if you didn’t have a stop, but then secondly, let’s say if you did have a stop, it might have blown you past 50 % of your account value because normally that’s where they stop you out. You could actually have a negative balance, and brokers might try to get you to pay that. But what FX Choice did was I remember them forgiving the balance to the people who were affected, and they were not negatively affected from a financial standpoint, because that’s normally where you get into issues with regulatory compliance is like FX CM. I think they have some issues with that. But when you’re either trading against or you’re using the funds of the customers for other purposes.

[00:28:19.090] – Kevin

You’re really not financially as sound as you think you are or they say you are. And I watched FX Choice go through that really well and handle it from a customer service standpoint really well too. Just as a bystander, I wasn’t personally impacted by it, so I really got to see it objectively. I really liked them as an international broker, FX Choice.

[00:28:37.560] – Sean

Okay.

[00:28:38.020] – Kevin

Thank you for the question. I get that question a lot.

[00:28:42.910] – Sean

Yeah, because with investing, we have a list of our customers favorites from around the globe. And we have customers all over. So in the States, the big players are TD Ameritrade, Robinhood, E-Trade, Fidelity. There’s a long list. And then internationally, now the big question is, okay, who can I use to buy stocks outside of my country? And usually we recommend Interactive Brokers is the largest footprint. There’s also First Trade, Free Trade, Etoro. Etoro is really hot in Europe. So there’s a long list. But yeah, it’s interesting about the trading world, different tools, in this case. I was curious to see what you’d say.

[00:29:23.020] – Kevin

Yeah, no, that’s great. Yeah, I think I had dealt with Etoro at one point years ago on their forex side, they may have, I’m sure it changed a lot, but I didn’t love it because they were definitely a dealing desk. And then I felt like they were trading against us very heavily. And so it was just like one of those issues for me that has nothing to do with the stocks. I’m not berating them. I just remember my experience. That’s why I didn’t say them. But yeah, interactive brokers I love because they give great pricing. They have a forex arm as well. And then now everybody has their own. So the difference, and the reason I didn’t speak to Think or Swim, or which I think TD Ameritrade took them or.

[00:29:58.300] – Sean

Whatever- They own that.

[00:29:59.170] – Kevin

Yeah, that’s what I use. Yeah. You have the Think or Swim platform, which has a forex component, but they have their own technology. And so you have your own servers, which are not what are called MetaTrader for MT4 servers. So the MT4 and the MT5 servers are the universal servers for forex trading. And so depending on if you’re a person who likes to code or do crates bots for yourself or whatever, sometimes working through a broker like a TD Ameritrade. So all their stuff is great. I love their tools. Their tools are amazing. And so when I can’t use them because I don’t use them, I use Trading View as my toolbox. But they have their own service, so they control it. It hits the market differently, which is nothing wrong with that, but you give up some control or autonomy going through there. Now, they normally have an MT4 or MT5 server that you can use, but a lot of times they’d like you to use theirs because I think they make more money that way. And that’s perfectly fine. I’m all about people making money. Just know that if you use a Think or Swim toolbox, you would want to use the MT4 component to where you could actually have the ability to either copy trades or do some stuff that you can’t necessarily do on the other side.

[00:31:14.470] – Sean

That’s pretty technical. We’ll pause there on the technical stuff. If people want to get into it, they should reach out to you. Got you. You even lose me when you get into stuff like that, like with servers.

[00:31:24.670] – Kevin

Okay, I didn’t know how far we were going.

[00:31:26.440] – Sean

My apologies. Okay. No, you’re good because we’re all based on it. Fundamentals, straight-up value investing. And of course, this podcast is more than just… The audience, you know this. It can be building businesses and then using real estate to create passive income and whatever. So let’s talk about your course and we’ll get into your strategy. Actually, I’d love to walk away with to know what your returns are. We’ll get there in a second. But with your course, what do you charge for your course?

[00:31:54.980] – Kevin

So the Platinum Lifetime Membership, which is you get access for life, you get the course, you get obviously there’s a place to get time on my calendar for one hour blocks of mentoring. I have a weekly video or a Zoom call that I do call Monday-day school every other Monday night to do tutoring with the students, and then you get the ability to have me connect one account of yours to mine, and that’s $7,497. Basically, $7,500 is the membership. Then the annual renewal, if you decide to stay a member, is $3,000 per year. That’s the DIY side.

[00:32:33.060] – Sean

Got you. $7,500 lifetime?

[00:32:35.630] – Kevin

Correct.

[00:32:36.180] – Sean

It sounds like initiation fee or like a.

[00:32:39.320] – Kevin

Seven fee? Exactly right. $7,500 initiation fee and then the annual renewal is $3,000.

[00:32:45.760] – Sean

Got you. Okay, excellent. Good to know there. Let’s get into the strategy a little bit. Just a hint to the recipe. What are you doing here?

[00:32:55.510] – Kevin

Yeah, great question. Basically, what the market does on a high level. First of all, I don’t know if people even know what foreign currency trading is.

[00:33:06.250] – Sean

We’ve talked about it a little bit on this podcast. We’ve had a few guests that do get into it. But please reiterate.

[00:33:12.010] – Kevin

Okay. Essentially, the best way to look at it is your money is taking a trip, just like you take a vacation. When you trade in the market, it’s like your money is taking a trip. I always use Mexico because it’s easy coming from tax to Mexico. If you’re going to Mexico, most times you’re going to exchange some dollars for pesos before you take your trip, and that’s just mere supply and demand. The demand for pesos is less in the US, so the price is cheaper. You get them and you go and enjoy your trip, and then at some point, you make a round trip home, you convert your money back. In the foreign currency market, it’s called a round turn. When you’re taking a trade or taking a position in the currency market, you’re essentially giving your opinion about two currencies at the same time. If you were buying the euro, because most people are familiar with the euro dollar, if you were buying the euro versus the dollar, essentially what you’re saying is I’m going to buy the euro now, exchange my dollars for euro, and I expect the euro while I’m holding it to increase in value versus the dollar.

[00:34:09.900] – Kevin

While I’m on that vacation, I’m on that trip, I’m expecting the euro to increase in value. At some point when that trip ends, when I decide that trip ends, I have to convert my euro back to dollars, and the delta between the values from when I bought it and when I sell it is what you’re getting. Just like the stock price has changed, but currencies are always traded in pair because you’re always buying one versus another one. That’s the relative strength and the value. That’s the only really way that value is derived is that one currency is more valuable than the other and you play those off of each other. With that being said, you asked me- Strategy.

[00:34:44.590] – Kevin

Strategy, thank you. Every market is essentially the same if there’s supply and demand and it’s chartable. You can do this in the futures market. You can look at options because options are derivatives of stocks and equities. You can actually chart these things and see what the probabilities are. What I look at is actually what’s called the market structure. Then within that market structure, there’s this thing that I call the price cycle structure. Price, what it does on a regular basis, is it makes certain moves, almost like footprint. If you were a hunter and you hunted deer, you would learn the nuances of how it would walk through the forest or where it would be at certain times of the day. What we’re doing is we’re looking at where price gives us the best indication of where it wants to go after it’s made its moves. We’re looking at the edges of the market, the high and the low. We’re looking at where price is as it relates to that, and then basically the probability that it’s going to continue going up if it’s going up or going down if it’s going down. I call that the PPC-13 method.

[00:35:48.900] – Kevin

What we’re doing is when the market is trending or moving in a certain direction, what we’re looking for is a retest or what we call a pullback, and then we’re looking for a certain pattern that happens after that pullback. That pattern could be a continuation pattern or it could be a reversal pattern, and we’ll call it, technically speaking, it’s called a complex pullback. We have a pullback from the market where the market is getting more oxygen. The markets, it moves in a direction and then it moves back. You see that in the stock market as well because it has to get air, it has to get oxygen to continue to thrive in a direction and move full steam ahead. On that pullback is where you get the best chance to get a good entry. Then the pattern that we’re looking for confirms that entry, and then we look for a close above. I use EMAs on my charts, Exponential Moving Average, so for a close above the 13 EMA, because I found that to be a very reliable EMA for continuation or reversal, particularly for continuation, but if it goes against it, a reversal and confirmation.

[00:36:49.130] – Kevin

Just really small things, pullback pattern close, and then you look at it in the context of where the market is. We try to avoid, and sometimes it’s challenging because you are always fighting against your psychology and wanting to be involved, but you try to stay away from trading the middle of the market and really try to trade the edges. And then really it drives your win percentages up to where when I do that, and I’ve experimented some other methods in some smaller time frames, but my win rate is about 70-80 %.

[00:37:19.310] – Sean

Perfect. I was going into that next. Okay, so win rate is 80 %. That’s outstanding. What returns are you getting per month and then per year?

[00:37:29.410] – Kevin

Great question. My conservative side, I shoot really for three to four % a month and then aggressively about six to eight % a month. I would say that right now, and actually this year, we’re probably up. I was tainted now, probably about 20 something % conservatively, and we’re up over 100 % in the aggressive account now, and this is year to date. We’re… I would say that this month we’re up 9 % in the conservative account, and we’re up about 88 % in the aggressive account. And so that’s anomalous. I would say we’re looking for maybe about 5-6 % a month on the aggressive side, and you should be looking to get 3-4 %. So we’re right there on the conservative side. Really what we do is just take the same trades and cut the risk in half. But I try to try and divvy it up. Some people want to get there faster and some people don’t want to go as fast.

[00:38:34.410] – Sean

Okay, that’s good to know. For context here with my investing strategy, I’m up about a little over 100 % this year. The only reason is we use a strategy called stockpiling. So you buy when the market’s going down. So you get these nice slingshot effects making 100 % return value investing per year.

[00:38:56.830] – Kevin

No, you’re.

[00:38:58.160] – Sean

Not going to do that, especially in a good year. It’s like you’re going to do well. You’ll beat the market a little bit. But when you’re buying when the market goes down and see that slingshot effect, that’s where you make big return. So you’re getting pretty close to that with this year at 88 %. What is normal, though? I know 2022 is very much not a normal year. What is normal?

[00:39:24.210] – Kevin

Yeah. So on the conservative side, I would say about 36-40 % a year is pretty normal. A year, really? Okay. Pretty consistently. I had a low year a couple of years ago when I was even just starting to think about promoting it. And we did about 21 and a half, I think. That was right during COVID or whatever, so that was a little bit low. And on the aggressive side, about 80-84 % a year. So we’re above where I want to be on the aggressive side right now. So I’m being mindful of the last two months of trying not to give back what we’ve earned already to this point in the year.

[00:39:59.880] – Sean

Not have a $30,000 loss in a week.

[00:40:03.050] – Kevin

That part. That exact part.

[00:40:06.560] – Sean

You know what I’m saying?

[00:40:08.720] – Kevin

You know what I’m saying. Exactly, right. So the strategy, what happens is you get some really good opportunities, you’re out of the market most of the time. And so this week, this is interesting to speak to that. We had, like I said, the first 10 days of the month have been amazing, right? We’re up already nine % this month, and then 89 % or something like that. I’ve been taking small trades to try to find my way in because I only trade the British pound and Japanese in. That’s just a personal preference of mine. I caught it going up to the 188-190, and that was six months ago, and it’s finally getting up to that point. And so the challenge right now is waiting to fade it because it eventually will tip out and run out of steam, and then we’ll trade the reversal. But I think it’ll probably be at least tomorrow until that happens. I’ve just concluded that I’m going to stay away from the charts until probably tonight or tomorrow so that we can increase our chance. That’s the biggest thing of the strategy is taking it when it’s there and then really having the discipline to stay away from it when it’s not.

[00:41:11.400] – Kevin

I think that’s how you keep the 78, 80 % win rate. It’s just not trading as much.

[00:41:16.710] – Sean

Got you. How much time per day do you spend on trading?

[00:41:20.480] – Kevin

That’s a good question. I’m up around four o’clock in the morning, Central, and that’s just my personal time. My wife and kids are asleep, and so I got two hours just for myself. But coincidentally, it aligns with the Asian session going into the London session or blending or ending and starting. And so some of my best trade opportunities are around the four-ish type frame. So what I committed the first basically six to eight hours of my day to looking at the market. And that doesn’t mean I’m always sitting in front of my computer, but I’m looking for a setup early. And then if I find a setup that’s suitable, because normally I’m more of a swing trader, although I do have some positions that play out intraday. Most of the times my positions are three or four days at a time or whatnot, and some have lasted weeks. It just suits my style, and it allows… Really, from a lifestyle standpoint, that’s what allows me not to be at my computer so much, just because I’m not looking at the 5-15 minutes to make my living. They may be entry points, but I’m looking at the 4-hour daily, 1-hour in weekly and looking at the bigger picture and then find an opportunity to get in on the bigger picture.

[00:42:31.640] – Kevin

I look at it, give about 6-8 hours a day, but as far as actual trades that I take, once I lock in, I essentially walk away from it because, and I share this in the course, I have a set of timers that I created for myself that show that 8, 12, 16 bars of activity are going to give us normally an indication if a trade is going to play out or it’s going to go against us. Until I get those markers hit, most times I don’t even look at the until they remind me to look at it. So that way you’re not overtraiding or you’re not over-baking. So there’s nothing like making a cake, putting in the oven and then you keep opening the door, you’re not going to get… Just little things like that. It’s trade management stuff, all those things that help you along the way. But yeah, the PPC13 method is what I do. Something real simple: pull back, pound, and close above or below the 13.

[00:43:20.570] – Sean

Yes. Now, for context there, on a few things here: audience, just so you know, day trading, you buy and sell same day, swing trade, that’s over the course of the next day. So buy today, sell tomorrow, or you can go a few days out. So that’s the difference there. Now, the timing question, very much in line with other traders I’ve had on the podcast about timing, six to eight hours a day on the low end. I have talked to people on this podcast that spend upwards of 12 hours per day, but they’re also working in multiple markets across the globe. So you get it. You could be doing the same thing.

[00:43:59.440] – Kevin

Yeah, for sure. I could do that and I could be divorced and probably not.

[00:44:04.650] – Sean

See my kids.

[00:44:05.730] – Kevin

But I’d be rich. But just for me, and I actually did that because of the DFY side. I actually didn’t even look at it that much. I’d be four hours a day at the most is what I would spend on the market before I started offering the DFY. What that did for me and to me was it forced me to lean back into it as a business because the people are counting on you to win. But then also I just realized that I’m okay with missing out. I’m still okay with it, but I found that if I just really just was a little more mindful at that extra couple of hours a day of being mindful of the market, even if I don’t take a position, I’m just that much more up on it. It’s like once you start double-dutch and you just stay in that rotation. But when you get out, you got to get back in sync. I try to stay in sync, even if I’m not trading on a regular basis throughout the day. That’s why I commit the first six to eight hours of my day to the markets. Because at noon, it’s pretty much in most cases, unless there’s a major news announcement, like afternoon, central, there’s no reason to be in the market.

[00:45:12.370] – Kevin

Unless you’re already in a position, you’re not going to find most things. It’s not going to be anything there. So at that point, you just get out.

[00:45:17.630] – Sean

Of it. Let’s take a quick commercial break. Are you a beginner investor and want to increase your confidence with investing? Tykredu is now live, which includes investing courses. The first course is titled Stock Investing for Beginners, which includes over 60 videos that take you through modules including Overcoming Myths, the difference between stocks, ETFs, Index Funds, and Mutual Funds, Investing versus Trading, the number one reason why stocks go up and down, knowing when to buy, knowing when to sell, increasing confidence, how to invest your first thousand dollars, and real life examples. It’s like looking over my shoulder to see how I buy and sell stocks. Simply go to edu. Com or go to Tykr. Com and click the courses link at the top of the page. Okay, back to the show. I have a really good takeaway for the audience here. And thanks for the data here because it really gives more weight to how you actually make money as a trader. So there are four, I’m going to break it a surface, four different trading, not strategies, asset classes you could use. You have stock trading, crypto trading, options trading and forex trading and crypto stocks options, especially the risky set of options, you lose money almost 100 % of the time.

[00:46:39.140] – Sean

And that’s based off the data of people being on this podcast or talking to people in this network. That’s where you lose money. But 4X, what Kevin is talking about, that is the one trade. If you want to trade, you better be investing in education. You better be investing in the time. And if you do those things right, then you can be making some consistent returns that sound like they can get close to value investing, which takes a significant less time. So just so you know, stock trading, crypto trading, options trading, in most cases, gain and lose money. I have to say this real quick. You’re probably very familiar with covered calls within options. Yes. Yeah.

[00:47:20.250] – Kevin

The most conservative.

[00:47:21.450] – Sean

Yeah, the most conservative. That is the one options trading our supports. We’ll also be releasing a course on that in 2024, essentially teaching people like, hey, you want to buy a bunch of stocks, sell a contract. If it goes up and hits a strike price, you sell and you take a profit. If the stock goes down, in that case, you keep the stock and you get paid a premium, so you make money when the stock goes up or down. So it’s a very conservative, good way to make money.

[00:47:47.970] – Kevin

Don, do me a favor and refresh me or enlighten me if this is still true. I remember there was a statistic that years ago that I read that said that most options expire worthless. This. I think that’s why probably that the numbers are there, because people are buying options, buying a coupon for the right to do something. But the coupon, you never go to the store and exercise it. The only person who made money is the guy who sold the coupon, which is a covered call guy or gal. Essentially, that’s what I took it to be.

[00:48:19.310] – Sean

Exactly. Yeah. And there’s options. There are strategies, like with what you learned, there can be unlimited losses. It can just go through the roof. It’s ridiculous. So I only support covered calls as the only option strategy. But yeah, in this case, 4X, you’re like the third or fourth guy that’s been on the podcast I talked about very similar. It’s a big chunk of your day. There’s due diligence, a lot of work upfront, a lot of education, but you can make consistent return. So good on you.

[00:48:53.090] – Kevin

Absolutely. Thank you. Yeah, it’s on his face, maybe simple, because when you talk about the concepts, just like anything, you can talk about the concept of driving a car, the concept of flying an airplane, but they take skills, and the fewer people that are into it, the probably the more skilled you have to be. But people go into it because one of the things that I think was actually to my benefit when I did get involved was because of the lack of social media, I was actually interested in it for what I consider more higher quality reasons. And then now, because the advent of social media and everybody speaking to things that they may or may not know, now the hype and the clouds are greater, and that’s in everything now. So it becomes a lot more about the Flash and the Lamborghini and the Ferrari that you can buy and less about saying, Hey, you know what? It’s okay to have a full-time job. It’s okay to take your time and learn this. It’s okay to take a year where you went to four years of college and you didn’t do anything over the four years, but study.

[00:49:59.380] – Kevin

So why not take a good solid year or a year and a half or whatever and get yourself foundationally strong to where now I make an extra $1,000 a month or extra $2,000 a month, whatever that number is, start somewhere to where you’re consistent and then build it up to where it’s something that’s stable. So many people, I think, really get locked into this battle between corporate and private or entrepreneurship and corporate to where they miss the holistic nature of how they can really harmonize. The best place that you want to be as a trader, and I don’t know if that’s for any asset class, but I believe so, the best place you want to be as a trader is from a position of strength. There’s no greater position of strength than when you have resources and you have reliable resources. Say what you want about corporate jobs or say if you want about old school businesses that may be cash flowing because I’m a big advocate of… That’s what I do. I take what the cash flow is, hey, cash flow and buy cash flow on businesses. That’s how you build your cash flow and add to your resources and diversify away from what you’re doing.

[00:50:59.530] – Kevin

But you take that… Getting rich slow in this business says you committed five to seven years of your life to something, or you can just do it in 40 like everybody else is doing it and maybe get there. If you’re in a position where you’re in a position where you’re in a position of a position of strength, just make the commitment and really look at what that is. Don’t be afraid or ashamed to say, Hey, I’m still working, and build it up to where you can replace your income or at least supplement it or pay off your debt to where when you do try to go full-time, you don’t have this pressure to go out and create results in the market. I think that’s one of the biggest challenges that people have, is that they put themselves in a position to where they’ve got to make money now. When you do that, you’re already hurting yourself because mentally you’re not trading from a position of strength. You’re approaching the markets from a place of weakness and need, as opposed to a place of saying… I heard somebody on a podcast the other day say I asked myself, does this trade, does this position, does it deserve the right to earn my money?

[00:51:59.110] – Kevin

I’m almost to that point of saying that I am in control. What are you showing me that compels me to believe that this is the best use of my funds on this particular position? It sounds arrogant, and it may even sound corny, but I could relate to that. You have to really do that. You can only do that when you’re mentally strong. When you’re trying to pay your mortgage, you’re trying to pay your light bill, and you’re trying to go and create $1,000 that way, I don’t know, you might as well just go to the godfather, because you probably have a better chance of coming out. Anyway.

[00:52:30.880] – Sean

That’s good advice. When you’re trading, or I should say this, when you’re trading and you need money badly, you’re going to make emotional decisions, and that can create compounding problems. You can lose a lot of money.

[00:52:46.230] – Kevin

Absolutely. That’s why I don’t even say I don’t even… I never ascribe to the fact that this gets philosophical, like chasing goals. I track goals because when I think about children, I think the nature of things like dogs and babies, when you chase them, they run away from you. Coincidentally, when you walk away from them, they chase you. It’s almost like a reverse psychology of the need and the desire. It’s almost like an energy. It knows that you want it, and so it doesn’t date you because it knows you want it. If you paid it no attention, it would completely be completely maybe chasing you down. I’m half-joking with that, but yeah.

[00:53:27.950] – Sean

All right, let’s get into the rapid-fire round. This is the part of the episode where we get to find out who Kevin really is. If you can try to answer each question in 15 seconds or less.

[00:53:37.820] – Kevin

You ready? Okay, got it.

[00:53:39.270] – Sean

What is your favorite podcast?

[00:53:42.120] – Kevin

Favorite podcast, as it stands right now, is actually Kerry Luts, the Financial Survivors Network. I was a guest of his, and so I started listening. He just has really different guests who come in and talk about different areas of finance, from land development to real estate to the markets. I honestly didn’t think I was going to like it or like him when I started listening to it, and I’ve become just super engaged into it. Yeah, that’s my favorite. Kerry Luts is Financial Survival Network.

[00:54:16.330] – Sean

Nice. What is a recent book you read and would recommend?

[00:54:20.140] – Kevin

A recent book that I’ve read and recommend is Excellent. I do read, and sometimes I do recommend… I’m going to say, past.

[00:54:32.840] – Sean

Okay, that’s fine.

[00:54:33.760] – Kevin

I’ll come back.

[00:54:34.530] – Sean

All right, movie question. What is your favorite movie?

[00:54:38.880] – Kevin

Okay, favorite movie all the time is Rocky 4: Syvestia, Stalone, the Palli-Freed, and the Paula and the Drago.

[00:54:45.630] – Sean

Yeah.

[00:54:46.960] – Kevin

No greater combination of.

[00:54:48.010] – Sean

The plane. That’s the first time that one’s been mentioned on.

[00:54:50.440] – Kevin

This podcast. That’s great. My sister and I could probably quote every word to that.

[00:54:55.880] – Sean

Living in America.

[00:54:57.150] – Kevin

There you go. That’s awesome. Yeah, that’s my favorite. Right on.

[00:55:03.570] – Sean

What is the worst advice you ever received?

[00:55:06.890] – Kevin

The worst advice I’ve ever received is… That’s a good question. Maybe stick with it, I’m sure, as related to a relationship or something. Stay with it. Give it a shout. Give it a try. So many things I’ve learned as it relates to cutting losses and things like that, I think that I would not do that anymore. That’s a relational piece of advice I got. Sure.

[00:55:40.340] – Sean

Yeah, I’m a firm believer that sometimes you do need to quit. If it’s something that you’re looking ahead, you see the force through the trees, and it’s like, This is not worth it. I’ve quit things in my history and moved on to something else. Not relationships so much, but other jobs and whatnot. Anyway.

[00:55:59.990] – Kevin

I got you. If it’s important to you enough, you’re considering staying in there, right? Whatever it is you want to hang in there because that’s how we’re built.

[00:56:08.710] – Sean

What is the best advice you ever received?

[00:56:12.370] – Kevin

The best advice I received, it may have probably been more encouragement. This too. This is actually funny, actually, as I think about it. It connects to the old one. My dad told me he passed away, but it’s a long passed away about eight years ago. But I remember when I was first getting married, and this is going to sound so bad, but it’s the truth, I remember we were in the back of the church, and he said, If you don’t want to do this, and I didn’t think I didn’t want to do it, but he said, If you don’t want to do this, if you truly want to walk away right now, you can do that. I know everybody flew up here because it was up on the East Coast, and it’s like, Everybody flew up here for this event, but they will be okay if you choose not to go through with it. It’s okay. I think my dad was the first person that gave me permission to reevaluate my circumstances. That was probably the piece of… It wasn’t advice, but it was a word of encouragement. I’ve taken that with me because he’s always…

[00:57:13.610] – Kevin

And he was not acquittered by any stretch of the imagination, but he always gave me permission to give myself grace. I think that’s the biggest thing that I’ve taken away from that conversation.

[00:57:23.620] – Sean

Yeah, love it. All right, last question here. If you could go back in time to give your younger self advice, what age will you visit and.

[00:57:30.180] – Kevin

What you would say? I can go all the way back to where I think the birth of my childhood trauma was, or I could try to encourage myself later on down the road. I probably would go back to college and I would tell myself, go for it, literally commit to your wildest dreams. Commit to your wildest dreams. Everything else be damned. Don’t worry about what has been perceived to be the path. Don’t worry about what you think you’re supposed to be doing or trying to combine conventional norms. Go with your heart and go all out for what you want and everything will work out. I think that would have been… I would have told myself, yeah, learn about credit. I had really good credit, but I didn’t know it, so I didn’t really use it. I didn’t destroy it, but I didn’t leverage it probably as good as I could have. I would say, yeah, learn about credit early.

[00:58:31.250] – Sean

All right, Kevin, where can the audience reach you?

[00:58:34.660] – Kevin

Okay, so I can be reached online at fmtrades. Com. That’s F-M, like the radio station frequency, tradeswithins. Com, F-M trades. On LinkedIn, my name is Kevin L. Jefferson. And on YouTube, we are the Forex family. And then on Instagram, it’s @helpmademillionaire, H-E-O-P-M-A-D-E, millionaire. You can find me those three places.

[00:58:57.380] – Sean

Awesome. All right, Kevin, thank you so much for your time.

[00:59:00.210] – Kevin

We’ll see you. Thank you, Sean. I appreciate it. I enjoyed it.

[00:59:03.440] – Sean

Hey, I’d like to say thank you for checking out this podcast. I know there’s a lot of other podcasts out there you could be listening to, so thanks for spending some time with me. And if you have a moment, please head over to Apple Podcast and leave a five star review. The more reviews we get, especially five star reviews, the higher this podcast will rank in Apple. So thanks for doing that. And remember, this show is for entertainment purposes only. If you heard any stocks mentioned on this podcast, please do not buy or sell those stocks based solely on what you hear. All right. Thanks for your time. We’ll see you.