 Welcome back to the Trade Hacker Mindset. In this episode, I want to talk to you about some tips on following other traders. Trading the markets can be difficult to master and seemingly just out of reach. Professional traders have a secret. Trading requires total mental and emotional control. It requires the Trade Hacker Mindset. All right, so let's jump into this discussion topic of following other traders. Now, keep in mind, I mean, this comes from my own personal experience of trading for over 20 years. And when I was learning to trade, you know, learning from other people, learning from other traders, following other traders, and it comes from the perspective of running navigation trading for the last five years and seeing some of the issues that people have when trying to follow us as a options education service. And so let's touch on a couple of the things that you don't wanna do if you're following other traders. Number one, don't try to mimic another trader's performance. You know, this is one of the biggest issues that I see when a newer trader comes in and joins our membership and starts to, you know, they see our performance because we post every trade. They wanna mimic that exact performance. And so they're trying to place trades in that aspect, in trying to exactly replicate our performance. And in their mind, they're thinking, if I can just make the exact same trades with the exact same number of contracts and everything else, I will get the exact same return and I will get the exact same performance. Here's the problem. You don't have the same account size that I do, okay? You don't have the same risk tolerance that I do. You don't have the same personality that I do and all three of those things are major factors in creating your trading strategy and actually becoming a consistently profitable trader. And I see this all the time where no matter what their account size is, people will try to do the exact same number of contracts that we do and it just, it blows my mind because your position size is relative to your account size. Your position size is relative to your personal risk tolerance. The position size that we do is irrelevant compared to what you should be doing for yourself. And here's what happens. As long as you're booking winners, hey, that's great, right? No matter what account size, as long as those trades turn out to be winners, but what happens when you get a loser? Because guess what? Everybody has losing trades. There's no such thing as 100% winning trades. And what happens is when you have a losing trade and it takes away a larger percentage of your net liquidating capital, when it takes away a large percentage of your account, sometimes you can't recover from that. And maybe it's financial, but more often than not, it's psychological, right? You just lost this amount and it starts to create an issue where you're making decisions about your trading that you shouldn't be making. Then what I find people do is they really dive into all of our performance statistics for the last five years. And they're like, okay, this is the best strategy over this period. So I'm gonna focus more on those. And they start trying to cherry pick the different strategies that we trade. And ultimately what happens is, sometimes they pick ones that are the losers and they miss out on the winners. The next thing you know, they lose their confidence in the strategies. And they're going down this spiral of issues that could have been avoided had they just taken the time to actually learn instead of trying to mimic the exact performance. The better way to do that would be to understand the strategies and create a portfolio of trades and strategies around that that fit best for you. So that's number one. Number two, the other thing that I see new traders do is they try to mimic the exact fill prices that we get. Okay, now this makes me laugh because if you think about it, the only relevance that the fill prices that we get on the trades have happened to be when we happen to be looking at the trading strategy at that particular time and we execute the trade. Okay, that's it. Think about this, because this will hopefully help you get over this because as soon as we get filled, we copy our alert directly from Thinkorswim and we shoot it out in an email and a text message blast. We have a whole delivery system that just blasts that out immediately. So you're typically getting the trade alert with our exact fill within 90 seconds, maybe two minutes, maybe if there's some type of alert delay, like three minutes. And so then you sit down and you enter the strategy and so from the time we get filled to the time that if you're right on it, it might be five minutes later and by the time you get it input into your platform in the price, obviously the market is open, these things are moving around, so sometimes the pricing could have moved. Well, I see people and they'll send me emails or they're posting the community about, I didn't get filled at the price that you did, should I let that price sit or should I adjust it to get filled? And if you think about this, like I said, if I would have taken that trade, if I would have went to the bathroom, come back and did some other things and 20 minutes later looked at that trade and liked that trade as a fit for a portfolio and put it in then and got a totally different fill price, as long as it fit for what I was trying to do, I still would have taken the trade. So the fact that I did it 20 minutes earlier and I got a certain fill price because I happen to be looking at my platform at that exact time that I ended up putting on the trade has zero relevance to anything for you as far as placing that trade at that exact fill price. What you should be doing is say, okay, navigation trading, just put out this alert, here's what they did, okay, this is what they got filled at at the time that they were looking at it two minutes ago, but does this fit for my portfolio and does the pricing still make sense for me to enter the trade now and does this fit my overall risk profile? Is this trade too big for me, too small for me? Do I need to adjust the number of contracts? Do I need to adjust the strikes because price has moved? Okay, so trying to mimic another trader's fills is just a ridiculous notion that you don't ever wanna try to do. The other thing that happens when if you're trying to mimic somebody else's fills and let's say price has moved by a couple cents by the time you input it into your platform, what if you let it sit and you never get filled? And that trade goes on to be a $5,000 winner. You just gave up two pennies or maybe it was $10 in fill price to miss out on a $5,000 profit, okay? So do you see how kind of ridiculous that is? If you're following another trader, the only thing that you should be looking for, like for example, for our trade alerts, the only thing you should be looking at those for is as a trade idea for you to decide if that's a good fit for you to execute in your own portfolio, that's it. You know, I don't have a magic platform that gives me some special magic price. You know, I get the same exact fills that everybody else does. In fact, this was probably a couple years ago but I had somebody email me and say something, I can't remember exactly, but say they're obviously a brand new trader because they didn't understand, but they said something to the effect of how I got better fill pricing than they did. I'm using the retail Thinkorswim platform. I get no special treatment. You know, I'm getting the same fills. I'm seeing the exact same thing that everybody else is and so there's no edge in the exact price that I get filled at over a price that you get filled at. You know, sometimes if you're right on top of it and you get that alert and you put it in, there's a lot of times you're gonna get filled at better prices than me. You know, so don't look at the fill price. The fill price has zero relevance. The only reason that we publish the fill price is because we're just copying and shooting out the exact, we're copying and pasting the alert directly from TOS just so you can use that as a learning mechanism so that when you set it up, you can see what we are looking at when we place the trade. The fill price is irrelevant and we post that because we produce all of our performance statistics on all of our trades and so we wanna show here's what we got filled at to enter, here's what we got filled at to adjust or exit or whatever, but the relevance of that fill price is only relevant to the time that we happen to be executing the trades when we happen to be looking at the platform at that time during the day, that's it. The entire reason that we send out alerts, if you're not familiar with our membership, we are a complete step-by-step training service to learn how to trade option spreads and different option strategies. And so it's not like our trade alerts are some black box alerts that you have no idea why we're doing it, okay? That type of service is, in my mind, just ludicrous if you've ever tried to follow something like that. We provide step-by-step detailed courses of exactly how and why in the environment to put on specific strategies. We're not just these black box trade alert services that just shoot out trade alerts and you have no idea of what they are or why they are, you're supposed to just get that alert and put it in and you don't have to learn anything, don't have to do anything except for copy the trades. Those have never worked ever in the history of trading. Don't even think about using those. If you're not willing to learn to trade, then you should not be trading at all. The goal is to understand the strategy, to walk through the courses that we provide, the step-by-step detailed courses that we provide to learn the trade and then use the trade alerts to see how and why and the environment that we trade those strategies in. So we give you the step-by-step learning of how to trade and then we give you the alerts to show you how we're doing it in real time, in live trading and that's the value, not the fill prices, not anything else. It's the learning component so that you can learn to do that yourself and you don't have to be reliant on the alerts to execute that type of trade. All right, so number three, don't ever follow trades blindly, okay? I don't know how many times I've seen this in our community where someone new will, after they've already entered, they will, I'll get an email or something that says, I put on this trade with 20 contracts and it's gone against me, what should I do now? Well, here's what you should do now, you shouldn't have put the trade on to begin with. If you don't follow trades blindly, if you don't understand the strategy, if you don't understand the how or the why or if you don't understand that if a trade goes bad, how to exit or you don't know how to adjust or you don't understand why you're putting the trade on at all, then you shouldn't be putting it on to begin with. We always recommend that you make at least 100 paper trades with a strategy before you ever decide to risk real money and then once you start to risk real money, start very small. Use one contract, use two contracts, use low price underlines, go very, very small until you understand. I say this over and over and over, there are so many nuances when it comes to trading that you can't learn all of them just from watching the courses and that's why we provide the trade alerts so that you can see, hey, here's what we're doing, you can execute that in a paper account, you can execute that with small size once you get comfortable paper trading it and then you can learn the nuances of that strategy and how it reacts to different environments in the market. And number four, I just kind of touched on this but with paper trading, you know, I know it sucks, right? But we always recommend that you do at least 100 paper trades for a strategy before you risk any real money. I know it's not, I don't know. I've never been a fan of paper trading but I've forced myself once I lost a bunch of money being an idiot early in my career. I realize I do have to use this, I have to go through this process because what happens is you're going to make mistakes at first that are going to cost you money, okay? So you must work through them and if you can do it in a paper trade account where you don't have any capital at risk, it's going to save you a ton of money in the long run. I cannot imagine the amount of losses that I took early in my career that could have easily been avoided had I just simply taken a little more time and paper traded those strategies before I tried to jump in and risk real capital. And I want to give a quick shout out to my boy Mike. So he goes by earnings Mike in the community and, you know, he's done a very good job. Every time he starts to learn a new strategy, he will paper trade it at least 100 times exactly like we say. He will document every single trade. He has meticulous notes and journaling of all of the trades that he does. And it's really served him well. I mean, I mentioned him before, but he's now at a point where he, just from his trading profits last year, he was able to take that money and buy this yacht, this boat of his dreams that he's taking his family out on and they're working on it and building it up and all kinds of cool stuff. But it all happened because he started out slow. He started out paper trading. Then he went small with small size and he built his way up, made all the mistakes, made all the, figured out all the nuances in building up to the point where now he can do bigger size and generate that type of income. You know, I think that a lot of people want to directly copy other people's trades for two reasons. Number one, they're lazy. If you're trying to copy people's trades and you don't want to learn, it's because you're just too lazy to actually learn how to trade. I see that a lot where people are just trying to make money too quick. They don't want to take the time to actually learn. They just want somebody else to give them the trade alert and it's gonna turn into an ATM machine and start spitting out cash to them. Now, when I say that, it sounds ridiculous, right? But I see this all the time where people are just too lazy to actually learn how to trade and they're just trying to take the shortcut. They're just trying to take the easy way and it never turns out well. So that's one reason that I think a lot of people try to directly copy other people's trades. Number two, they might be the person who always wants somebody to blame if something goes wrong. They don't want to take responsibility. They don't want to take ownership. Trading has to be 100% on you. It has to be 100% responsibility and you have to accept that responsibility. We've talked about in some of the past episodes when we were doing the series on Mark Douglas's book Trading in the Zone that when you're trading, you have to totally accept the risk of a trade. Well, when it comes to trading in general, you have to totally accept the responsibility that what happens is your fault or if you do good, it's you that did good as well. But you have to take that responsibility. I see it sometimes where people want to place blame on somebody who gave them the trade idea or a trade alert or a certain strategy and they haven't gotten to the point where either they never will, they're just the type of person who likes to blame everybody else for what happens to them and they never want to take responsibility for anything and that type of person when they come into trading, obviously the market plays no favorites so they're gonna get slapped pretty good eventually if they don't take that responsibility. And you see this with people who have financial advisors too, right? They either give somebody else their money to manage because A, they don't wanna take the time to learn the know-how, which is fine. That's not necessarily always being lazy. You might be so focused in your profession or so focused on your passions of what you do that you just don't wanna take the time and so your whole philosophy is, well, I don't wanna take the time to do this so I want somebody else to handle it and so there's nothing wrong with that. The problem is, using an advisor, you're just gonna get mediocre returns and you're gonna get whatever the market gives you, there's no strategic advantage to doing that but I think a lot of people also use financial advisors is because either they're lazy or they don't want the responsibility. If something goes wrong, if they lose money, they can call their advisor and yell at them, right? They can call their advisor and blame them instead of having to take that responsibility. Well, if you're going to trade for yourself, if you're going to take your money and learn to trade and actually be able to get outsized returns that beat the market year after year, you are going to have to take responsibility for learning. You're gonna have to take responsibility when you take trades and there's just no way around it. All right, so a lot of what I've been talking about so far is kind of a negative connotation around following other traders but let me be very clear, there are some very positive things about following other traders. And I mean, everyone who is just starting out, you have to learn from someone, right? You can't just learn from reading a book. You can't just learn from watching a few YouTube videos. You really need to be able to follow somebody that you connect with. You need to be able to follow a type of strategy that fits your personality. You need to be able to follow a group or a trading methodology that is a good fit for you. But when you trade them, it's an excellent way to learn but you have to be able to be committed to following them for the reason of understanding the how and why of the specific strategy. How is that strategy executed? How is that strategy closed out? How is that strategy adjusted if it goes wrong? All of the hows of that strategy have to be understood and if you're following somebody to learn the how, then that's an excellent way to do it. The other is the why. You know, why did you execute this strategy at this time? Why did you execute this strategy in this environment? So it's the how and the why and following someone to understand the how and the why is very important and is an excellent way to learn how to trade. Number two, another excellent reason to follow another trader is because you're trying to figure out what trading style is the best fit for you, right? So, you know, some people gravitate to selling premium with high implied volatility. Some people gravitate to day trading. Some people gravitate to long-term investing. Some people gravitate to directional trading. Some people like option spreads. Some people like just buying and selling stocks or futures. So maybe you're at a point where you're still a newer trader and you're still trying to figure out the trading style that is the best fit for you. You know, I know when I first started trading, I was trying all different types of things. You know, I was trading futures one day, stocks the next, finally learned how to trade options a few years later. I was, you know, 4x, you know, all every kind of trading vehicle and strategy you can think of, I've tried it. And part of it was obviously kind of the shiny object syndrome. Oh, you know, this looks like a better way to do it. So I'll jump over here and try that. This looks, now this one looks better. So I'll jump over here and try that. But some of it was also because I was trying to figure out which trading style was the best fit for me. You know, and for me, I think, you know, options trading and using spreads and all the different strategies that we teach at navigation trading, finally, you know, kind of sunk in for me because I was like, you know, I can be wrong on direction and still make money like that and that's my kind of trading right there. And then of course, you know, the strategies that we've created, they've evolved over the years and become very detailed and specific around, you know, different spreads and different strategies. But following someone else to figure out what type of trading styles the best fit for you is another great reason to follow somebody. Number three, maybe you're not a new trader. Maybe you are a veteran trader. Maybe you're an experienced advanced trader, but you still like seeing what other people are doing because it gives you confidence in the trades that you're placing in your own account. You know, it's a very powerful thing when you see a specific setup or you see a specific situation and you execute a trade and then later somebody else does, it kind of, it kind of gives you that confidence. It kind of, you know, builds on your trading acumen and your trading IQ to help you continue to become a better trader because you can see what other people are doing or let's say you execute a trade for a specific setup or a specific environment like implied volatility is high. So you, you know, sell a strangle on a specific underlying but then you see somebody else do it on a different symbol. And one that you didn't see or you didn't think of or something like that and you're like, oh, okay, I see why they did this. So it's something that kind of creates that confidence and yet that ability for you to see other nuances or other, you know, tweaks, you know, of how people are executing. Like another example would be, okay, implied volatility is low. We're getting some good backwardation between front and back weeks and you execute a calendar spread and then you see somebody else execute a double diagonal spread and they're using different strikes and a little bit different explorations. And then you check that out and it just, it builds on your trading IQ to make you become a better trader. And that also is an excellent reason to follow another trader. And then the last reason, and I've kind of touched on this a little bit earlier, but if you follow somebody for the trade ideas, you know, in other words, maybe you're very busy and you don't have time to sit in front of your screen and scan through a lot of different symbols and look at the implied volatility of each one or look at the setup for directional trade. And so you are an advanced trader, you're very clear of the concept, you know how to trade, you understand the strategies, but you like to follow somebody so that for those trade ideas, so that you don't have to scan through and you can follow somebody who posts the trade idea so that then you can go take that and go ahead and go execute it without spending a lot of the time up front with the research and just screen time of getting all that stuff done because maybe you don't have time to do that because of your other passions or other experiences or other commitments. So again, this comes from not only my own experience learning to trade over the last 20 years, but also running an education service where I've seen the good, the bad, and the ugly of how people are following other traders. And so I wanna make sure if any of these topics, if any of these points that I made in this podcast hit home for you, you know, make sure that you are taking that to heart, make sure that you are using that information to say, you know what, maybe I'm doing this the wrong way and start to move over and start utilizing the alerts, utilizing the education, utilizing our community in a way that allows you to follow traders the right way and don't get caught up in those initial things that I mentioned that will never get you to the point that you wanna be, which is a consistently winning trader. So I hope this was helpful. If you wanna be part of our community, just go to community.navigatientrading.com. It's free to join. People are sharing trade ideas in there all the time, along with talking about the mindset stuff that we talk about in this podcast. We look forward to seeing you on the inside and we'll see you in the next episode.