Phil Newton — Short-Term Stock Trading For Everyday People

This is an intro, intro, intro, intro.

Hustle and Flowchart with your boy, my boy, Matt Wolf. Hey, hey, hey, what's up? Welcome back to the Hustle and Flowchart podcast. My name is Matt Wolf. I'm here with my co host, Mr. Joe Fear. Today we've got a sort of different episode. We're talking about a different form of investing today. Our guest is a guy by the name of Phil Newton. And Phil is an expert at options trading. He actually tuned into our episode all about cryptocurrency, and after he heard that episode, he reached out to us and said, hey, you know what? I love cryptocurrency. I love the, the sort of idea behind it. I love the, the technology and I think it will eventually go big places, but I actually think I have a better sort of safer strategy that people could get into if they're really interested in investing and trading and that sort of thing. And he went on to tell us about options trading, and we brought him on the show to talk about his various option trading strategies. And it was really, really fascinating stuff. In fact, after the show, he invited us to do a 30 day challenge, and he has been personally mentoring us on options trading and showing us his ways of option trading. And it's been really, really cool. Now, it's not, it's sort of out of the norm of what we typically talk about on the Hustle and Flow Chart podcast, but we think it's just as important to learn how to not only make money, but how to make your money grow and how to actually keep more of your money. And various investment strategies are a good way to do that. Now, saying that what you're going to hear on this episode is not investment advice. This is, you know, for entertainment purposes only. All that good stuff. Phil tells us what works for him. We were really intrigued by this strategy, but there is risk involved with any sort of investment vehicles. Don't, you know, don't invest more than you can afford to lose. You know, the, you know, use common sense when it comes to investing. With that being said, enjoy this interview with Mr. Phil Newton. All right, thanks for joining us, Phil. We're really excited to have you on. How are you doing today?

Pretty good. Thanks for having me. It's always a pleasure to basically talk about the things that I'm interested in. Who doesn't like to talk about what they know about?

Yeah, well, it's fun. Funny, you said prior to the call here, you know, longtime listener, first time caller.

Yeah.

So you're.

Well, I can't remember the TV show as often as it was. It was Midnight Caller, wasn't it?

I think so.

Am I aging myself now?

Well, it's interesting because this is actually something we've never really done before on this podcast. You know, we had a couple episodes a few weeks ago all about cryptocurrencies and bitcoin and blockchain and all that kind of stuff. And you actually sent us a message saying, you know, I love the technology of those things, but I actually don't necessarily think that's the best way to get into sort of growing your wealth, investing, that sort of thing. You mind if I jump on the podcast or we chat and talk about some alternative scenarios? Yes, we said yes. And this was like, what, maybe three days ago? So it's been a very rapid, like, yeah, let's do it. We'd love to talk to you about this stuff and hear some alternate perspectives because we're still learning about all this stuff ourself. So we're going to dive into a lot of that stuff on this call today. But before we do, I actually kind of want to talk about you and your business and your background and how you got into doing what you're doing today. So can you kind of fill those gaps for us and let us know, you know, a, what do you do today and B, what was sort of your progression and how did you get to what you're doing today?

How did you get into it? Right. Well, I'll start with what I do just in a nutshell, and then I'll just explain how I got into it. So I pretty much do four things. I trade the financial markets, and I've been doing that for just going into my second, second decade. So a little over 20 years. I mentor people how to do that, and I typically guarantee people's success, which is unusual in itself. I then leverage my knowledge by doing something similar to you that you guys do, and that's pretty much provide a newsletter, which is the analysis of how I trade the stock markets. And then wrapped all around that, I can also license what I do. So if you want to get involved with it yourself, you can slap your own logo or on what I do and call it your business. So that's essentially what I do in a nutshell. Right now it all revolves around trading the financial markets, and I'm just leveraging my knowledge in lots of different ways by putting several different business and income streams around that, how I got into it.

Do you want the sob story version?

Yeah, a little shorter story Just so we can kind of get into the.

Main hero's journey version.

Let's hear your hero's journey.

That's of the truth for a change.

That's fine.

Yeah, it pretty much started. I went around to a neighbor's house on an errand when I was about 15, 16 and dropping something off for the parents and you know, basically said, come in. And while I'm waiting to deliver my messages, he's on the phone talking lots of numbers. Gold has mentioned, buy, buy, buy, sell, sell, sell. All sounded really exotic. But as a 15 year old person just eavesdropping on someone who I now know was talking to their stockbroker, it was all really exciting and fascinating. So you ask what's going on. So you basically said to me, you can trade the financial markets and it doesn't matter where you are, who you are, there's no knowledge barrier. If you've got the money, you can play. That was it to me. And that's all he said to me. And he goes, if you want to learn about it, you go away and learn about it. But that was the only advice that he ever gave me. And that kind of seeded the, the path for, you know, just starting to investigate the financial markets. And like most people you kind of send off the thing. This is like pre Internet days. So you send off for things and you read magazines and it just kind of grew and grew and grew. And from the age of 16 I started hand drawing charts. I would sit down in front of, you know, the, the old teletext. I don't know what you had, what you called it in the U.S. but you, you turn on the text programs and you get the financial feeds and I would literally be writing down the numbers of the stock market and hand drawing charts at the end of every day and just like trying to figure out, well, what drives the markets and everything that I was reading in the textbooks, I was just simply trying to apply it from an early age. So fast forward a few years, on my 18th birthday, bought my first stocks and it was like crack cocaine. I would imagine I was hooked from that day on. It was first trade on and I don't think I slept for eight months. I come home every day after college and check prices and it was the most exhilarating and frustrating time at the same time. But it was that, that was it, that was my kind of gateway drug into, into trading. It was just that first experience of I can work for some money and then invest that in the stock market and then sit back and Watch it grow. And that, that's where, that's how I got into it, essentially.

That's.

I mean, that's fascinating. And that's. That's something that most people, especially at that age, would never do.

It was emotional. I even remember that. I mean, I remember the name of the stock. It's a UK stock. It's not really important, but you always remember your first time. So that was the kind of the first trade. But the sob story version is that when I went full time into trading, I was actually diagnosed with Crohn's disease. So I was pretty much made unemployed. My then employer at the time, I was trading for a software company at the time, so I'd actually managed to get the job trading the markets. And shortly afterwards, when I was diagnosed with Crohn's disease, I was in hospital for quite a long period of time. And there's nothing quite so motivating as having pre stand over you and offer you the last rites. You want to try and get your life together when you've got that second opportunity. But my then employer came in and said, when you get better, there's no job for you. You basically fired me on what I thought was my deathbed at the time, which I thought was very nice of him. When I was in the hospital, I couldn't go anywhere, couldn't do anything. I was housebound for a period of time and the Internet was, you know, essentially brand new. This is sort of 2001, 2002 time now. And I'd been on and off trading for a period of time, but it was, I need to get the lights on, I need to put food on the table. I had the skill set, but I'd never really committed to doing it full time. So it literally was back against the wall. What's the worst that could happen? Lose some money and, you know, have to figure something else out. But I took some money off my credit card. I took £1,000 and you know, in the following eight months, I took that from 1,000 all the way to 92 and a half thousand and.

Oh, man, there you go.

Now, are you talking short term trading or. I mean, I'm assuming based on what you just said, it's kind of getting in and out quickly of stocks.

Correct. Back then that was index futures and currency trading back then. So essentially it was short term trading for one to three days, but mostly it was essentially day trading back then.

That makes sense. Okay, so then fast forward now. I mean, now you're doing all sorts of stuff. I'M sure you're doing more than that. You have the training out there, you educate other folks. Kind of taking that progression now then, that's when we're talking. Now you kind of reached out to us. So I guess let's transition to the cryptocurrencies. Your take on that. And we'd like to hear some kind of alternate thoughts on how to get in initially for folks. Because I think like we were talking previous to the call here, you hear a lot of bitcoin this, bitcoin that. Oh my God, it's at $7,000. Now I gotta get in. I missed it.

If you'd got with five pounds, $5 five years ago, you'd be a crypto millionaire.

Right? You hear that a million times now.

Everyone can do it with hindsight. That's the funny thing about all this. I think, to give you the short answer, I think there's two answers to this. The technology. I'm not going to bash the technology. It is revolutionary, and I don't use the word lightly. A lot of people throw words like that around. It is an industry shaker and it's going to shake up and merge with a lot of industries, blockchain type technology and whatever evolves from afterwards. It's already starting to evolve. Well, I think from a trading point of view, to actually make money from the fluctuations in price movements. It's a bubble. And it's the problem. Well, the problem is also the benefit. The benefit is that it moves an awful lot in a very short space of time. You can make a lot of money very quickly in a very short space of time. And that's also the problem because it's so volatile, it moves very dramatically from one extreme to the other, you know, plus and minus, you know, 10, 20, even 30% in very short space of time. And it's a quick way to lose a lot of money. And similarly, it's a quick way to make a lot of money. But you can only make a lot of money if you know what you're doing. And most people don't know what they're doing when it comes to this type of trading.

Yeah, and like you said, the technology is really the crux of this whole thing. And that's where our interest lies.

I can't bash the technology, I can't fault it.

It's already revolutionizing industries and technologies and the potential and the prospect for the future and what it can do. So I can't deny that.

It is good. From a trading point of view. You're Absolutely right. You see on every virtual street corner you can be an overnight success with Bitcoin or whatever the latest hot button is. There's always something that's new, shiny and sexy that people want to be involved with, whether it be in the financial trading or the online marketing arena or whatever the latest hot button is. Right.

Right now we are actually, Joe and I both are invested a little bit in, you know, some various cryptocurrencies, including bitcoin. But we've always taken the philosophy of it's almost like gambling. We're kind of throwing some money in there and you know, hopefully we make.

Some money, have the right idea, don't try and trade around the fluctuations of price. In the short term, you take more of an investment approach where you might have it for minimum of 6, 8, 12 months, maybe even a few years out and see where the technology evolves, develops, that's where the opportunity is. That's not going to give you an aneurysm if it goes wrong.

Right.

Right.

Now, as far as the strategies that you like to talk about and that you like to teach, what would you think? Not cryptocurrency, but what would you say is sort of what you recommend is a starting point for somebody who they work a job or they've got their own business, but they're not really working on wealth growth. They're not really working on. Now that I'm making this money, where do I put it? What recommendations do you have for those complete investor newbies?

Yeah, I think it's worth just restating first. I'm not against cryptocurrency or the technology behind it. I'm just saying it's not a starter, it's not a starter business. It's not the best place to start.

It's good to have in the mixing of your trading what you do trade, but it's certainly not somewhere to start. So where do you start is what you're essentially asking.

Right.

I think most people are. Didn't have my situation where when I started out trading was the only thing that was available to me to do because I didn't, I couldn't go and get a job. So my situation was very different to probably most people's situation. You've probably got the day job or other commitments, whether it be work, life, family, you've got other things around you. So you don't want. Most people don't want it to be a full time job. It needs to be something that they can do in a short space of time. Would that Be fair to say it's something that you could spend 30 to 60 minutes.

That's perfect.

With that in mind, then.

If you think about what's not available to you, day trading is out. Contrary to popular belief, day trading is not a situation of you log on to your trading platform, you sit there for 20 minutes, you push a few buttons, you make a few trades and you make a fortune. It's not like the adverts say, so day trading, you can wait several hours for that trade. That would last 20 minutes. So it's not really what most people expect. So day trading would be out for most people unless you can commit a lot of time to that, which is a little bit weird. So if you think about the time that you do have available, you've got 60 to 20 minutes. So day trading's out. You're probably going to be looking at something that you can, what, you know, what's typically known as swing trading. So you're looking to try and from my perspective, looking to benefit from the moves in a stock price that might last for a few days to a few weeks would be the shortest time horizon. Does that make sense? You're looking for a trade that would last for a few days to a few weeks.

Right, right. So short term, but not necessarily day trading.

Exactly, yeah. A day trade just to qualify as you open and close the same position in the same day. That would be day trading. Swing trading is you're looking to capture the swings in price that might last a few days to a few weeks and then might be 6, 8, 12 months out. That would be the time horizon. Long term investing, Warren Buffett, you know, you're looking for multi years on your trade ideas.

Yep. But he obviously has the capital. He's been in the game forever, so he can do that.

I mean, I think, I mean, always a span to be Warren Buffett, I mean, that takes it to the other extreme. I mean he basically invests in businesses. He doesn't necessarily, you know, buy shares and hope that they go up. You know, he has a say in what goes on in those businesses usually.

Oh yeah, yeah. He wants control.

It's a very different trading style.

Yeah.

So, so again, come back to where do you start? So I think if you think about what time you have available to trade, first of all, I've got, I mean, my style of trading, I advocate you can find 30 minutes in the day to find, filter and sort stocks that might provide you an opportunity to invest in on a short term basis. So that's what I Look to do.

Okay, I like that.

Yeah. And then I don't want to worry about gluing myself to the screen every day, all day. So how I place those trades is also another factor that I want to consider. So another stress that a lot of people do have or experience is when they place their trade, they might buy some shares, and at some point, if that trade idea is wrong, they want to get out.

Right.

So they'll put what's known as a stop loss in place so that if the stock moves against them, it would automatically close their position. Or that's the. That's the idea behind a stop loss.

Right.

Does that make sense so far? I appreciate I'm. I'm talking a little bit of jargon at the moment.

Oh, no.

I mean, I was. I was a finance major when I went to school, and I did a lot of investing in my time. So I do sort of know a lot of the terminology.

I'm a little bit more of the newbie of you, but so it makes perfect sense.

Yeah.

Just conscious. It's very easy for me to nerd out on this. And I just want to make sure.

That.

This is good because, I mean, for those people who are in crypto or maybe want to experiment with something a little bit more. A lot more risky. Same kind of jargon as you use there.

Yeah, yeah, it's all the same terminology.

Exactly.

Anyway, the point is, is that that nervousness around when they put the trade on, there's the apprehension that if they're wrong, they will get stopped out. And that's one of the bigger fears when you make trade choices. So that's if you buy outright shares, or depending on where you're on, the world could be CFDs, stocks, forex futures, spread betting. The point is, if you're wrong, you would close your position. So the way that I like to do it is manage my risk on the entry so that I don't have to worry about the ebbs and flows, the little minor fluctuations in price. So I use something called stock options. So a stock option, just to really dumb it down. It's not entirely accurate. Before people hop on the soapbox, it's kind of like a deposit. You're reserving, say, 100 shares. You place a deposit down, and if the stock moves favorably, you will benefit from a proportional value. So if the stock rises $10, the option will increase proportionally. But the key point is that if you're wrong, your risk is limited to the price that you paid the deposits. Does that make sense?

Sort of you actually are starting to lose me a little bit.

Yeah. So maybe. How do we make simple.

It's like if we. If you wanted to buy a car, you. But you couldn't pay for it in full until the end of the month, you would reserve it with a deposit, wouldn't you?

Okay.

Okay.

Okay. So a stock option is like that. You reserve the car and you place a 10% deposit down. And if it turns out that Steve McQueen owned that car once, the value of the car would increase exponentially.

Yeah, it makes sense. Okay.

The value of the deposit would go up. You could sell that deposit to someone else for a profit.

Okay.

If it turns out it's a ringer, it's been in a chop shop 10 times, all you're out is the deposits. You've not bought the car, got it reserved, the cost. You've only ever lost the deposits.

So it's just that percentage, whatever that percentage is, instead of usually, it's usually.

Around about 10%, you know, a few percentage points.

Okay.

The point is, is that if you're wrong, your risk is limited. And it doesn't matter how wrong you are. You don't have to worry about a black swan event. You don't have to worry about the stock market crashing. You don't have to worry about these, like in cryptocurrency, these wild 10, 20, 30% swings. It's up to a gazillion dollars and it's crashing overnight. And then it's back up again at y yo yos back and forth. There's none of that anxiety that's involved in that type of trade. So at the upside, relaxing approach.

How's the upside look on something like this? So obviously you're minimizing your downside. You only lose.

Exactly. Fixed, doesn't matter how bad it gets. So the upside potentially is. It's a proportional movement. And it's usually the way that I teach it, it's between 50 and 80%. So if the stock moves $1, you will get between 50 and 80 cents of that $1 stock movements.

Gotcha. Okay. Interesting.

It's not completely 100% of the movements. You get a proportional increase. It's still pretty decent. Don't get me wrong.

No, it's great. And it's just minimizing your risk.

Okay. So I'm very conscious that I over nerded out a little bit there.

I'm thinking now.

Yeah, I think the. The point I was trying to illustrate was that compared to how most people would associate, trading or investing is they would buy shares and they would put one position on. And that can also be capital intensive. It takes a lot of money to buy those shares. Whereas comparatively, if you use the stock option for the same position.

Then it's not capital intensive. So it allows you to utilize the money that you have available in a multitude of different ways. You can do more positions, you can place more trades, you can have a portfolio of positions.

Got it? Now I have a question about that. Are all publicly traded companies, do they all offer options or is it limited to specific companies?

It is limited and there is a list. There's plenty of them. You're going to be spoiled for choice. That raises another question, actually. What do you trade?

So you're limited. Well, you're not limited. I restrict myself to stocks that have options on them, first of all. So that brings the universe of potential stocks down to a smaller list, because not every stock has a stock option. So if we then also get rid of the penny stocks because we don't need them. We want to trade what's known as liquid stocks. It would be like.

Trying to sell a product in a market of one person. Whereas you want to. You want a hungry market of buyers when you're selling products.

Right.

So we want the same thing in the stock market. We want to know that if we. We want to know that we can buy our stock and sell our stock whenever we want. And you can't always do that because of liquidity. It's not a highly traded market. So if we restrict ourselves to those stocks that are active, then I have a universe of around 500 stocks. Not. Certainly beats the sort of 15,000 or so stocks that are listed on the stock markets. I've now got a very, very small universe of stocks that are highly tradable. I can get the position that I want on them and they've got options, stock options available on them. So the choice that's available to me is a smaller universe, but it's the cream of the crop, for want of a better description.

Well, that's nice because you can keep tabs on 500. I'm sure there's some ways to aggregate information to see. Okay, well, what are some trends? What do we see with these companies? You start to know the.

Well, that. Well, that's where the next part of it is. I mean, you guys, you're big fans of systems, aren't you?

Absolutely. Yeah.

That's exactly what we do. So how do we take that now.

So that it's not time intensive? You need a systematic approach to find, filter and sort stocks. So that's what we do. If we imagine them in a spreadsheet for a moment, and when certain conditions are met, we just sort the column in the spreadsheet and says, okay, These are the 10 stocks that meet these conditions. So out of that universe of 500 stocks, I only need to look at five of them today.

Makes sense.

And it suddenly becomes very easy to look at five stocks rather than 500. And of those five stocks, I just need to pick one or maybe two if they meet some other conditions. So again, it's just that conveyor belt of, you know, having a systematic approach so that I've got a stock, I'm likely to be trading it today. It's a liquid stock, it's got stock options, and, you know, it meets all those criteria for me to, you know, be able to potentially profit from it. And if I do a stock every day, in 20 days I'll have 20 stocks and I can start to slowly build up this portfolio of positions because then I'm not reliant on one stock or one trade choice or one instrument or one market making me money. Because one of the, again, one of the drawdowns is that most people just look at one instruments and then like, for example, bitcoin, and they would get very nervous about putting the trade on and watching it like a hawk. And if it doesn't do what they think it's going to do, they can lose money very quickly. They might make money very quickly. You have this anxiety around what you're doing. I suppose it might be compared to you just put one Facebook ad on and you hope that it brings enough people in to the products. So, you know what I'm saying that you want to experiment with lots of different Facebook ads to find out which one's going to give you your conversions.

Dan Kennedy said the worst number in business, probably in life, is one. So if one thing fails, you're kind of screwed. So where do you go then? My question I was going to think about, or have been thinking about, how long do you typically stay in for each of these stock options? Do you have. Do you just let them roll or do you have a process to that?

Again, I've got a process. So. So one, I. My, my personal trading, I like to be in and out positions on an average of around 12 days.

Okay.

That would be a perfect scenario for me. It lasts about 10 to 12 days.

The way that I trade the option, just like a deposit, it has a lifespan.

So I have a lifespan of up to 45 days.

Deposit like, like you reserve the car. I'll let you know at the end of the month whether I want it. Here's the deposit. So that's what we're doing with the shares. I'll let you know in 45 days whether I want those shares. Now I'm not going to take delivery of them. I'm just using the option as a weight, as an alternative to trading stocks because it's more cost effective.

I get it now. Oh yeah, it just finally clicked in my head, this whole thing.

Me too. Yeah, exactly what you just said.

That's a while. Everyone gets there eventually. It sounds complicated, but if you think about it, there's lots of real world examples where this happens.

You know. Although, I mean that's just to be fair. That's just one way of trading. That's one trading strategy that takes advantage of a portfolio of stocks. And again, if we think about how do the institutions, how does the big boys make money, how do the hedge funds and the other funds and how do they make money? It's not trading one stock at a time like every retail trader does. They're trading a portfolio of stocks. So if that's how everyone who's successful over the long term makes money, then that's what we want to do.

Sure.

If you're a smaller trader, then using stock options in the way that I've just described it means that you can take a small fund and to be fair, anything under a quarter of a million is considered small. But you can take a small fund and you can really leverage the available funds that you have available and you're just making best use. Again, just to use a pay per click example, it's like, like trying to find out the best quality traffic at the cheapest possible click. That's what we're doing.

Got it. That's interesting. Now, do you, you said you typically try to trade in like 12 day windows. Do you set any sort of. I'm drawing a blank on what the term is. But an automatic sort of sell order when it hits a certain point.

Yeah, that's exactly right. I mean one thing that you would do is you would have. Everything that I do is known in advance. So tomorrow's stocks. I know today.

Got it.

I know what I'm going to trade before the market opens. I know my entry price because I've got a process and a system that says when you find the stock, this is what you do to find the entry. When you've done that, here's the Price, here's how much you want to risk per trade. And there's a process for that. I've got a spreadsheet, it works it all out for me. And then I've got a process to say, okay, well, if the stock moves favorably, when am I going to take profits? And again, that's known in advance. So before I even click send on my order, I know where I'm getting in, what I'm doing and where I'm getting out. So to answer your question, yes, that's, that's all known in advance. So the idea of having that systematic process that takes you from A to Z on every aspect of what you're going to do, I know everything that I'm going to do before I do it so that when something happens, it's not a surprise. I'm not stressed again, I've got Crohn's disease. I want a stress free life. I don't want to relapse, you know, so I want to know these things. And it's such a liberating experience. When you know your inputs and you've got an average, like every business, you've got an average expectancy on the other end. You know what your return on capital is. I think that's, that's suddenly a stress free, very liberating experience. And it's not time intensive.

Right. You know, I think it takes longer to explain it. Well, it stops a lot of people without having the A system. If you don't have a system and you, I want to throw some money at this thing or I want to get into stocks, it's like, no, don't do that until you got a fricking system, man.

Yeah.

But most people get caught into the hype and like the hot shiny thing, the push button solution, the latest whiz bang widget, it's the same in most industries and in trading it's the same as the kind of the online business world in that, you know, whatever the latest sexy thing is, that's what everyone wants to do. But you know, as we said, you know, right at the beginning, the best place to start is what time do you have available to trade? Because then that's probably going to exclude most of the hot shiny buttons.

And the fact that this is about 30 to. Yeah, about 30 minutes or so. 60 on the, on the upper end maybe as you're getting started. This is killer.

Yeah, yeah. I mean, what do you.

Sorry, I was just going to reiterate it. Just like a business. All we're doing is the financial equivalence of operating a business.

Yeah.

Which, and if you think about it like that, most people are familiar with the process of running your current business. And if I knew more about the specifics of how you run your business on a day to day basis, we could probably draw many comparisons and examples with what you would do and how you would do it. But just in the financial trading world.

Got it now when you're looking for the stock options, you know what, what sort of specific things are you looking for? And then what, you know, you mentioned that you've got like a process to know when to get out. You know, what are we looking for on when to get out as well? Because I know you, you know when you're getting out the day that you get in. Right. I think you said something to that effect. So what are you looking for on both those things? What are you looking to get into? And you know, how do you know what to look for on when to get out?

I'm trying to explain that without visuals, I'm just trying to think how to do it. In fairness for anyone who wants to know, I've got a. I've got a little bit of a. Well, I'm not. A little bit. I've got a mini course if you want to kind of go through it in more detail. I've got some free training for that if you want. But just to try and give you.

I want it, that's for sure. I'll be getting there. Yeah.

Well there he go. Yeah, maybe we can find some time. I'll happy to go through it with you.

Yeah.

Well, essentially it's price. You're familiar with the price charts. Haven't you probably seen them on the news? If not, you've probably searched a few of. If you've got a few stocks and shares, you might have looked at the chart on Yahoo Finance or something. Not be fair to say you're familiar with the price charts.

Of course. Yeah.

And on that price chart you can see the swings in price that the bars go up and the bars go down. Well, when the bars go up to a certain point and then they start to move down, it creates a level on the chart where price hasn't been passed before. So for example, again, because we've been talking about Bitcoin's recently made new highs as we talked it. So that creates a Barry point and then it's sold off after it made that new high. So that's what a lot of people would call a resistance point. It's gone up to a point that price has hit and then it's reacted away from it and then I call those like a speed bump, you know, it's hit a barrier. So when price sells off.

I want to be able to buy that sell off. The idea being is it's going to revisit that recent high, the resistance points that it just met.

Got it. Okay. Okay.

I think Matt, you were just used.

My words sufficiently enough to describe what's commonly known to anyone who's familiar with the term.

Well, for the novice here, for the novice, me, not Matt with stock charts and stuff like that, that makes perfect sense.

Okay, cool.

I've done some explanation to Joe on some of that kind of stuff. What we're talking about now is kind of like the technical analysis of stocks and the price ceilings and price floors and you can actually look at a chart and see the sort of resistance line that's kind of going up and the floor, I don't know all the perfect terminology but the, you know, your ceiling and your floor and you can actually see it climb and.

Okay, anyway, so that, that's how I do it on a day to day basis. And then for newer traders there's tools that can be automatically overlaid onto that chart and it just says here's the points that you want to look at. So there's tools that can do it for you. Or if you're a little bit more experienced, you can visually see, oh, that's my target there.

Got it, got it. Okay.

So again it's a quick process and again depending on if you're experienced, I've got a process to find the targets and if you're less experienced, I've got an automated way. It's usually be a smaller target but it's automated and it just gives you, gives you a point to aim for.

Now how much do you incorporate sort of fundamental analysis or do you at all?

I don't, I don't. Again, it doesn't mean that I'm against fundamental analysis. I made this decision, I remember it very vividly. I was 19 and I was working in Blockbuster Video at the time and I was reading one of those thousand page books on technical analysis. And it was a book that explained the charting side and the fundamental side. And I'm reading through, it was like the second or third pass through and I thought to myself, self, I've got to choose one here, which one do I want to do? And I made the choice way back then that I didn't want to sift through company reports and that was My decision, what am I attracted to most? I think, I think I'm attracted to those pretty pictures on the charts. I'm going to focus my attention on that. So that's the only reason why I don't. And I made that decision a long time ago and I'm happy with that. So the time horizons that I have. It also means that I don't need to worry about the fundamentals of the company, the profit and loss, the quarterly reports, the who's running the business. I'm aware of all these things because you pick it up after 20 years anyway. But I don't need to worry about it. It now if my time horizon for a trade was say six months, eight months, 12 months, two years, you know, multi years, certainly after 12 months, if I was looking to put a trade on and hold it for 12 months or more then now, yes, I would be looking at fundamentals because those things will have an impact on my decisions.

And that's more the Warren Buffett kind of strategy.

That big, long term, is the company a good company? Is it profitable? There's all the basic stuff that you could look into.

Got it right. Well, I got. Well, let's take it to some tools and resources, some very specific things that people can use because I think the strategy now, at least to us here, is pretty dang clear. So where should people go to get some help? I mean, obviously you do a lot yourself.

Well, I'm also curious about as far as what trading platform should somebody start on? I know some are more basic, some get really complicated. You know, what sort of trading platform should somebody start with? You know what, what are the kind of tools they can use to look at charts and sort of do their own technical analysis once they learn a little more about it? What kind of tools do you recommend for those kind of things?

Yeah, I think if you just want to have a quick look and just, just have a look at the charts really passively just to kind of, oh, what's this thing that they're talking about? And just kind of introduce yourself. You could do no worse than just take a quick look at Yahoo Finance just to kind of. Oh, that's what they were talking about. So that's one end of the spectrum. And then you could go all the way up to the kind of the Rolls Royce type platforms. It's all singing, all dancing, does it all for you. I use a program called TradeStation.

Okay.

And they're also a brokerage. So if you want to execute your trades through them, you can do. I'M not affiliated with them in any way, but. But that's what I use. And I've got all my software programmed in there so I can literally click a button and it says, hey, Phil, these are the five stocks you want to look at today.

So you're like integrated in there, synced up and got it.

Yeah, I mean, it's not essential. I mean, most of the. Although I've had some tools custom coded, I'm not using anything that doesn't come as standard in most charting platforms. So if you want to go to something else that is more preferable to you then you can do. I usually send people to a broker called thinkorswim because they've got a really good platform to learn on.

Yeah, I've used that. I believe that one that was owned. It either was or still is owned by e trade. Right.

TD Ameritrade.

Oh, okay. Yeah, sorry. Got the two confused.

Yeah, I think they bought it out in 2009.

Right. Yeah, I've used thinkorswim in the past.

Yeah, it's a good platform to learn. To learn on. And you can do actually in the. In the. The training course that I provide. I'll give you a link to that if you want.

Perfect.

There is. I actually go through that as the demonstration because most of my clients are the coaching clients are in the US So it just makes sense that, hey, we go to a US broker, if you want to use that one just to kind of get used to what we're doing. And it's familiar. There's all, all the setups explained. Again, I use TradeStation. Again, if you want a copy of these tools and you use these programs, you get in touch, you know, I'm happy to kind of share them with you if you want.

It just makes the whole process so much easier.

Do you have a website or do you have a website that they can easily go to?

Yeah, I've got a link. It's antevestor.com forward/access. And I'll just pop. I'll pop the link over onto Skype for you. So you can pop that in the show notes.

Yeah, perfect. Cool. We'll link that up and let me just. Cool, that sounds good. I just want to say the name one time.

So. So yeah, software. I mean, think or swim. Tradestation. Again, there's lots of choices out there, but they would be my kind of two picks for. Specifically for charting and stock options. Cool.

Yeah. We just want to repeat this URL one more time here. It's Antivestor. A N T I V E s t o r.com access correct.

Perfecto. Cool. Yeah, we want to make sure that was very clear because we'll be going there after this. Yeah. What other maybe final question or some wrap up stuff that we might have missed or not asked you.

So one thing I actually did want to touch on is I've checked out your anti vestor site in the past and I did notice that there was some mention of forex type currency trading type stuff. How involved are you in that kind of stuff at the moment?

Not at all. I was 12 years a currency trader and I've moved from that to stock options. I think again, to answer both your questions at the same time, what we need to consider as a trader, a trader of the stock market or the financial markets. I don't categorize myself as a currency trader or an index futures trader, or a UK trader or American stock trader or a German index. I don't categorize myself in that way. You've simply got to look for where the opportunity is. Now, as a new trader, it might be difficult to figure that out for yourself, but relying on what people consider to be the latest hot, fashionable thing to trade, everyone still talks about forex now because it's still for some reason hot and sexy and great. It was fantastic in 2005, 10 years ago, we had a golden age. In 2002, I managed to hit the ground running with what was an explosion of the currency market markets. And now the volatility, the range of movement, those price fluctuations that we were talking about earlier, they are dramatically lower than what they were in 2005, 2006, 2007 and even up to what was the financial crash. So the range of movements is not great is the point I'm trying to get to.

Right.

People are still saying that the currency markets are fantastic to trade, but yet the range of movements you could make 100 point move in a single day and that might give you $1,000, that 100 point move to get the same movement in a single day. Right now that same movement would take three to four weeks to happen to get that profit from a single trade. So the range of movements just not there. So what is moving? What is the opportunity? Where is the opportunity to trade? So that's what we need to be looking for. We need to be looking to the future of what's the next opportunity as opposed to what's the sexy thing to trade or what was the best thing to trade 10 years ago. So why I'm looking at US stocks and stock options, it's undeniable. The stock market is going up every day. New highs are being made. It's a rip roaring trend. There is a vast amount of movements everywhere. It's hard not to make money is what I'm trying to say. But then the opportunity over the next five, 10, maybe even 15 years is when the bear market happens. And rest assured it will happen because of quantitative easing, which is just a fancy way of saying we're printing more money.

The US markets have gone straight up and we've skipped what would normally be a healthy and normal bear market or an economic contraction. And we've skipped two of those and we're possibly going to skip a third. Bear markets. So the US markets, sorry to say folks, they're going to be hit very hard compared to the rest of the western world when that economic contraction happens.

So possibly even three times as hard.

It will happen, yeah. Now when that happens, volatility will expand dramatically.

Part of the way the options are priced is by taking into account volatility, which is at historic and all time lows because of quantitative easing. So when the bear market happens, volatility is going to go from all time lows to all time highs and that's going to affect the pricing of the option, which is going to provide a natural, another opportunity because you don't have to just buy options. It's a two sided market, which means you can be the casino, to use the gambling terminology, instead of being the player, you can flip it on its head and be the dealer and you can sell options and collect that enriched premium, which is the opportunity that I'm seeing in the next five, 10, maybe even 15 years again when this bear market happens.

Got it. Wow.

Why is that important to be right on direction? You, you've, there's three things that can happen. A stock can go up, down or it can stay still. So there's, you've got a one in three chance of being right on direction if you're the buyer, meaning that you will benefit if the stock moves favorably. But if you take the other side of that trade and you are the seller of the option, you've now got two ways to make money. It can stay still or it can go down. You're essentially saying as long as it doesn't go up, I'll get paid.

Right.

Probability that you get to make money.

Is twice as much for any craps player at Vegas. It's, it's the pass line or don't. Do not pass line.

Exactly. There we go, so. So you've got more opportunity to get paid, really, what I'm trying to say. So that's the opportunity that I'm preparing for right now. Now. And also I'm really good at picking direct and so I'll benefit both ones.

Good for you.

I mean, this is amazing. My mind is going.

And this is one of those podcasts.

I'm gonna have to not scratch the surface yet.

Oh, I didn't think we did. And we're 45 minutes in almost.

Yeah, no, this is one that we'll have to listen back to for sure. And you know, let's see. Yeah, we'll probably have you back to take it. Take us to the next level with this conversation. But, but, you know, as of now.

We'Re very happy to come back, if you'll have me.

Oh, yeah. I mean, this was very eye opening to us. You know, this is kind of a world that we're not really that familiar with. My sort of investing experience in the past was all just, you know, pierce, buy and hold blue chip sort of stocks, you know, so this is, this is a new world that we haven't really dove into yet. So it's very, very exciting stuff. And we want to start getting our listeners to think other than just their business, how do they take the money that's in their business right now and grow it with, you know, make your money work for you? We're trying to open people's eyes to that kind of stuff.

Right.

So this is, this is always welcome on our podcast. This, this type of discussion for sure.

Perfect. I think I'd just like to underscore it if a mate with you. While I've said a lot of kind of jargony type terms, don't be put off by it. What we're doing in the. And we've already said this, what we're doing in the financial markets is no different to any other business. We're running the same business. We've got the products on the shelf, we've got the customers come through the front door. We've got the profit and loss, we've got the refunds, we've got the overheads. We've got all the same things that a regular business on the high street would have. We're just doing the financial trading version of those things. So if you think about it more like a traditional business and what would be the equivalents in the financial markets, it suddenly becomes a little bit less daunting than focusing on all these jargony, industry related words. If you put those to one side, we're not really doing anything different than what you're already familiar with, right?

Yeah, that makes a lot of sense. So we do have a couple wrap up questions. I'm sure if you've listened to past episodes, you know, we always kind of ask for a book recommendation.

I'm an avid listener. I have one ready.

All right, let's hear it.

I've got an easy one for you as well. It's a good read. It was written in the 1930s and it's called Reminiscence of a Stock Operator.

Okay, cool. I don't never heard of that one. That's new to me. So we're definitely gonna have to check that one out.

What's the 30 second blurp on that?

It's obviously a stock market related book, but it's essentially about a guy's rise and fall and subsequent rise again to stock market riches in the 1900s-19 sort of 20s, 30s. And it's very simply about how he started off as basically a chalkboard runner writing the numbers on the chalkboard for the old stockbrokers and how he went from that to in the twenties, multimillionaire from trading the stock markets. It's a really good story. It's not intensive, there's no jargon, but there's so many lessons to learn that are still valid today that were absolutely bang on the money back then. Both from a trading point of view, a business point of view, and a life point of view. There is so much to learn in there from every element. I read it two or three times a year. It is a fantastic book to read for many different reasons and not just because I'm interested in trading.

Awesome.

Yeah, perfect. I feel like those are the best books too, and it's a kind of a parable. Yeah.

And if you want a novelty primer, go and watch Trading Places with Eddie Murphy and Dan Aykroyd.

I like it. I like your style. Love it, love it.

All right, so anti vestor after people listen to this, go check out antivestor.com access. Are there any other sort of resources or things you want to share that you want people to check out after listening to this?

No, I think it's all there. If you want to contact me, you can reach me directly from there as well. There's a contact form if you want to. I'm pretty accessible. If you want to hop on the phone and have a chat about this. At the very least, I'd like to try and point people in the right direction for what's right for them. So, you know, if you. If you want that, you know, it's available to, you know, anyone who wants to let me talk at them about trading for a while.

You're a generous man, Mr. Phil Newton. You're doing great. So thanks for reaching out because we would never have known this. So appreciate that. And we'll probably have you on for another after we kind of get our feet wet in this, too.

Yep.

So.

Well, thank you very much. I'll be very happy to return if you'll let me.

Yeah, it's funny. One thing I think most people don't know who listen to this podcast is when we have guests on that teach new concepts. One of the next things we always like to do is go and test those new concepts, see how they work out for us.

How about this? How about a 30 day challenge? You, the three of us, and I'll throw you some complimentary training in just so you can report back to your loyal followers and fans and say yes or no, and you can give it a full test drive.

I think that's a deal right there.

We're 100 on board with that. Let's do it.

Do some case studies.

Yeah, perfect.

Awesome, man. All right, we'll be in talking.

Yeah. Thanks so much for joining us.

It's a pleasure, absolute pleasure.

All right, thank you, man.

Talk to you soon.

Bye.

Hey, thank you, thank you, thank you for listening to this podcast. Now, if you want to learn more and hear from us every single month, which a lot of people do, it's pretty fun. We actually write this thing called the Evergreen Profits Letter, and that is a printed newsletter that we actually send to hundreds of people every single month to your doorstep. So you actually get it in the mail. You can read this sucker, you can highlight it, you can dog ear, you can scratch some stuff out. If you don't like that one, you say no. Joe and Matt, that's not cool for me. But you can take a lot of different strategies, about 15 or so from every single issue, and it's really cool. So basically, these are actionable strategies that you can use in your business right away to test out and pretty much build on what you already have going on. So check it out. It's at www.egpletter.com. it's pretty amazing. And you should go check it out, see what it's all about.

Boom.