Transcript by Arianne Elnar
A beginner trader on her journey of self-discovery, spiritual awakening, and she might just pick up “financial freedom” along the way
35) What trading is really like with Rui
Speaker 1: [00:00:01] If you’re not willing to do the learning work, you can’t have financial freedom, you just can’t. You have to study money. If you want to be successful with money, you have to study it. And that’s why I love what you do. I love listening to Mary Buffett’s podcast on your thing the other day, if people aren’t subscribed to your stuff, they really need to subscribe to it. One podcast isn’t enough. You’ve got to keep listening.
Speaker 2: [00:00:28] Welcome to Financially Free podcast with your host, Ney Torres. One of the reasons Ney could retire when he was 25 years old is because he was coached by the best. And now through this podcast so can you.
Ney Torres: [00:00:40] Welcome everybody to the show. Today, I’m interviewing Ray Lou. Ray, welcome to the show.
Ray Lu: [00:00:45] Glad to be here.
Ney Torres: [00:00:46] So, the reason I wanted to interview you is because you are starting becoming a successful trader in a very short time. So, can you tell me a little bit why trading is important to you? How do you end up here? And what will be the expectation for somebody that’s coming for the first time?
Ray Lu: [00:01:02] So, I’m Ray. I live in California. Professionally, I used to work in a large bank in the field of analytics. I first started trading right before the financial crisis. A perfect time to start as a newbie and I think I took some courses and really jumped right into the market really without knowing what I’m doing. And probably did all the wrong things. I made all the mistakes that you could ever imagine. A long story short, I restarted trading 10 years later. And having learned the lessons that I’ve learned in the past and now kind of starting to get on the right path, “right path” of working on my beliefs, my personal psychology and kind of really develop myself as a trader first. And now, I have a completely different view about what the market represents to me today. The market is really a spiritual teacher if you will or a teacher to me on many aspects. It teaches me about humility, it teaches me about patience and discipline. So, I see myself really more as a student of the markets and this is what trading is for me. In the way, I think you have to be a better person first and then you can be a better trader and again, “better”. Just meeting oldie aspects of personal growth and development so that’s sort of why I pray today. I can tell you more about how I got here all the mistakes in a little bit, but just in a nutshell all that.
Ney Torres: [00:02:35] That is a perfect introduction and a very good insight. I do agree with you. Most people, I think you and I got into this for the wrong reason. And then we find out that this is very, very interesting because this is a screening in front of you and these jumping up and down. It’s just a reflection of your beliefs and your beliefs then and it can drive you crazy or you can develop as a person, as you said, when did you have that realization?
Ray Lu: [00:02:59] I think I went into trading for excitement. It would just, I think personality, I like adventures in life and I like going out and backpacking and all of that. So, very much also like type a personality and overachiever, you name it. All these qualities. I think I went into trading because exciting and then I wanted to win. I wanted to win all the time. Making big money was kind of never really the big driver is it’s kind of a byproduct, but I want to be a winner and then I’m always very competitive. And then also the market offers endless assignment. It’s always something very exciting happened and changing all the time. So, that’s kind of the appeal of the market back then 10 years ago, like I said before the final crisis. I took some courses in Option Trading and without any stock trading experience I went right into Options which is pretty risky and especially when you don’t know what you’re doing. And I know you had interviewed Dr. Banjar in another episodes. Funny story here is I actually, when I first started trading, I actually had a teacher recommended a book that Dr. Darbs’ book, Safe Strategy for Investing, I think. Actually, Traded your way to Financial Freedom. Introduced me to the book and when I read a few pages of the book and I thought, “Well, it’s all about psychology and I don’t need that. I was looking for kind of “useful stuff”. Bot trading systems, whatnot strategies and the one I saw the psychology section, I thought, “Oh, I don’t need that.” So, I put the way, I kind of just had the book back onto the shelf and then proceeded to ruin my account. As you know, one of the most important concepts on Doctor Darbs’ talk about especially the position side, how much you bet the most critical factor in determining the fate of your trading accounts. But I clearly didn’t learn that and I just really bad way too much my percent and sizing, which was crazy the sounds that I would never ever do I get today, if I reflect back on what I did before, which is insanity. Of course, they had kind of list quickly, pretty much wiped out and at the same time that I was very emotionally hurt, it was painful for all of the people who have traded before. And losing money is never fun. It’s especially to kind of almost decimated like countless with just emotional, so painful and then I vowed not never to get into the market again. Essentially, I set all the intolerable markets with tenders. So, that’s what happens to them.
Ney Torres: [00:05:28] What makes you, after 10 years come back into trading?
Ray Lu: [00:05:32] I came back to trading in some 2017 coincidence, or you may call it synchronicity. I think I’m ready. Maybe, I guess, virtually, I was ready to learn the lesson that I needed to learn and somehow like even at, I swore that I’m never going to trade again. Never touched the market again. And somehow, coincidentally, I started get back into trading and then I actually still 10 years later. So, I read the book. I said, “Well, okay. Maybe let me just read the thought again. See if there’s anything useful.” And the second time around, I just almost finished the book in like one sitting or like not one setting but very real quickly. And I was like, “Oh my God, if I hadn’t knew about position sizing 10 years ago, it will be a very different story.” It was just other like I call it the concept position sizing and how powerful it is. So, that’s when I I realized, “Wow, I really need to learn to become a trader to really succeed in trading. I need to learn. There’s so much I didn’t know at all. It’s almost like you don’t know what you don’t know. “And like in 17 when I started training again, I realized, “Okay, there’s so much information that I need to study.” So, that’s when I kind of came back to trading and then my view of the market that changed at the time as well. I decided to start to trade again. I realized really, just all about you and your own thoughts. When you were sitting in front of the computer as you were saying about your thoughts it’s like your kind of alone with your thoughts there. You essentially just manifesting whatever’s in your head. As Dan would say, “You don’t trade the market, you trade your belief about the market.” Sometimes you can be so in your head, you don’t really see what’s wrong at all. You’re just seeing what you wish to see or what you’re afraid to see. So, you’re not seeing the market. Then I went to take some workshops as (inaudible) Institutes and Dr. Darbs’ Arbitrator Program. In the workshop that I attended, I learned so much about myself. Dr. Darb will always say that psychologist like 100% of trading success, the most important factor for sure through my learning at the (inaudible) Institute. And then through the super trader program, I realized that there was so much, I didn’t know about myself as a trader. I had to develop who I am and then just know more about myself and then overcome some psychological issue that I’m prone to have. Then everything else becomes easier.
Ney Torres: [00:07:44] So, will you agree that probably you had to unlearn some things you learn from that episode 10 years ago?
Ray Lu: [00:07:50] Yeah, definitely. Like there were some emotional charges and pain that you have some disbeliefs and get healed in a way. So, you don’t have that fear anymore and the other thing is really the kind of the bad habits that not at the beginning of traders make is in that attitude to where losses by losing money and just take it at the cost of doing business. If you think about trading as a business that you have a cause of the business and you’re going to have losses. They don’t get into the long travel. That’s actually a very important concept. A lot beginner trader will do not understand and kind of fall prey of is being stuck in the lost tribe which is essentially, you don’t want to take losses because it’s kind of a negative. A general negative emotion. You don’t feel good about yourself. And then you find reasons not to honor yourself or you don’t even have a stop and then your loss gets bigger and bigger. You kind of tapped deeper and deeper eventually you have to throw in the towel or maybe sometimes often it’s too late. So, that’s the Law Trap and that definitely one of the things. If I think back about my business positions, I did 10 years ago, that may just the classic case of getting a stock in the Law of Trap. It is just like hoping, it will come back. It’s gone.
Ney Torres: [00:09:04] We either done that. I can tell you. That is probably the most stressful day of my life was I can remember it like yesterday. I think it was probably over 15 years. Maybe it’s three years ago. I remember because it’s so painful.
Ray Lu: [00:09:21] Yeah. Finally, I said, “Okay. I can’t take it anymore. I’m getting out.” And all the time, you’d probably get all on the very bottom and they’re just —
Ney Torres: [00:09:30] So, you’re talking to yourself. Let’s say you can talk to yourself in the past. What expectations will you set to yourself to somebody that’s listening right now? They wanted to trade trading. I always tell them, please do trading because I know they’re going to have to develop personally. So, I hope they do become traders. What will be the expectation go through?
Ray Lu: [00:09:48] In terms of trade or development, as a person. Okay, I think, fundamentally, a trader needs to really confront maybe the biggest demon in your own personal psychology is which just acceptance self-acceptance. I mean, especially for people who are kind of high bay and looking for achievement wants to do well and oftentimes I think no matter how successful in your profession when you turn it on to trading, I think it’s a kind of a very different game because you have to like unlink or disconnect like unleash your self-worth with the trading results. Especially, on a virtual trade basis. I think that’s one of the biggest things’ is don’t take each individual trading all of them personally. Because there will be winners and losers and I think people go into trading set to win all the time. And so they refuse to accept losses. So, you have to take losses. It’s just part of the game and without making it affects your psychology. I think different people obviously have different thresholds this is where its kind of having a system, a trading system that fits your personality is very important, maybe talk about that a little bit. First and foremost is just learn to accept losses. It’s almost like, I don’t know if you practiced on for those who practice martial arts, you have a little boxing. You can kind of have to learn to take a beating first before you become successful or you have to learn to take some hits and then and just kind of work your psychology so that it doesn’t destroy your self-confidence. You don’t blame your self-worth with your pending outcome. And when you do, just ask it for, I think.
Ney Torres: [00:11:32] I really like that. There’s some other thing that you said the other day you were being interviewed and I heard something that you said and it made a clique. I’ve never thought about it before. But you said you clarify, it’s not like I’m waiting for a signal to appear. I’m ready and then I peeked signals. The market is there to serve me. I’m not as labeled with a market which value investors say it all the time but traders also do. And it’s the first time I hear it. Can you explain that a little bit?
Ray Lu: [00:12:01] Sure. I think this is probably the topic of FOMO. Like the fear of missing out which is I think we’ll beginner traders are like two biggest hurdles. One is refusing take losses. So, you get stuck in the loss trap and then on the other side is greed. The FOMO, the fear of missing out, it’s a big-time psychology issues facing traders special in the beginning traders. They don’t want to miss it and said, “Well, I said, there’s no other opportunities and something is easy. Something filling up parabolically means I’ll have to get in. I have to get in. Whenever you say I have to get in. Now, I actually, I tell myself whenever, if I have the thought of, I have to get in on this that’s a clue. That’s a cue for me to don’t do anything and walk away. Because I thought like the formal is a big kind of really big enemy to creators. And that’s why I said don’t be a slave to the market. Don’t let the market kind of push you around. You stay very grounded and center, you know just from a psychological standpoint. The market is always throwing opportunities at you. It’s you make the decision if is this good enough for me to take or not? Based on your objectives, some system criteria and et cetera. And there are days sometimes when the market is in a really good condition. It’s a good day on the market. But if I’m psychologically for whatever reason, if I’m too busy or I didn’t sleep well or whatever reason or I’m kind of like moody or something else happened that I’m not in a good mood. Then I know psychologically I’m not ready to trade. So, even if the market has perfect opportunities are there, I know I’m not walking in. I’m not taking it because I’m not ready, but when I’m ready and then I will go into the market and see what’s there and then decide.
Ney Torres: [00:13:45] Can you explain me a little bit. What is the process for you to be ready? What is a day in your life look like on a normal day?
Ray Lu: [00:13:52] Okay. So, for me, part of the getting into the ready state or it’s involves a lot of meditation. I meditate like 30 to 45 minutes every morning and like 4 in the morning I get up, I’m ready. I get up early and so I meditate and I run. I go about 30 minutes running a few miles so I’m kind of just clear everything and we’ll talk a lot about mental state is being in the right days. It means everything in trading and pretty much everything we do in life. If you want it to be in a good mental state and that the market will be the same but if you’re in a different, if you’re the wrong state, you can’t trade well. So, for me, this is all about clearing myself and getting centered. And so, I know what’s important. And then the market, I actually view the market as a spiritual teacher, teaching me lessons not being patient or being disciplined. These are all important lessons in life and humility. That’s another very important factor. Whenever you think, I’ve had days where like winning streak or I’m invincible. But then the market will prove right to you without you or not. So, it’s a great teacher. I think you have to determine your relationship with the market. For me, it’s the markets are as my teacher right now and it gave me any good lessons. And then whenever my performance, my trading performance very well, it’s actually their objective teacher. So, my trading performance is very well correlated with my state of my psychology or level of consciousness, if you will.
Ney Torres: [00:15:31] Really tell me a little bit about that.
Ray Lu: [00:15:35] I think when I operate at a higher level, higher level consciousness, a good state or low state, it’s very intuitive almost. I follow Gabriel (inaudible) it’s kind of a rule-based discretionary system. There’s an amount of discretion. When I’m in a good state and there are some times their intuition that will come in and it’s almost like as if you are one with a market, you know what I mean? Kind of like being in the zone and the flow and then you kind of just have a feel of what’s going on and connect with the energy of the markets for lack of a better word.
Ney Torres: [00:16:11] You are in this zone.
Ray Lu: [00:16:12] You just know what to do in a way. Conversely, not in the optimal state. It’s just you’re driven by all the Eagle. Eagle’s ideas of longing to win like that idea whatever. The egotistic factors then you just make all the wrong decisions. You see things that don’t even exist. You just make an optics at that point.
Ney Torres: [00:16:35] That was another thing that I learned from what you were saying is you didn’t realize, you said I didn’t realize I was making my own rules. As you were learning Gabriel’s rules, by the way, people listening, Gabriel is a teacher in the (inaudible) Institute, the teachers for futures. So, it doesn’t care, but you said that, and he was really interesting. I realize now because I’m taking trading again because I was never really good at trading. So, I wanted to visit that part of my personality and see what it takes to learn. And one of the things I realize is it takes a while. It is way more difficult not because of the rules but because of the rules we create in our mind. So, if we’re somebody that’s starting now, how long do you think you will be a reasonable timeframe to be successful in trading? Not talking about all of the good benefits that we’ve been talking about. You are by the way, the perfect person to interview because I’ve always wanted to interview people about trading but I was afraid of focusing too much on the numbers on the wrong reasons as say but now going into those more tangible reasons, how long will it take somebody to become profitable?
Ray Lu: [00:17:40] I think that really depends. This is such a cliche answer but that I think I was almost and that’s impossible to say because each person’s personality, the state of the psychology and how much work is needed the psychology is so different and Gabriel will say I think it’s actually, I don’t think it’s possible to cut a bit of time as ready to depends on into each individual but most people will that’s what I think it’s true is that most people underestimate how long it takes. It’s if you think about to become a brain surgeon and you will know that you have to go through rigorous training and sometimes it’s also experiential. A lot of the things learning the technical, you have to appearance it and then work through your feelings and even just gave her a sense of this really solid system. And even with that to make it your own to kind of make whatever adjustment that’s needed with to fit your personality and circumstances, it takes like years.
Ney Torres: [00:18:39] How long did it take you? What was your personal experience?
Ray Lu: [00:18:42] For me is let’s see. So, I took Gabriel’s course. I spend a year working on like not really like on trading but all my psychology through the super trader program. So, that’s like a ton of year of kind of cleaning out of all the non-usable leaves and all the belief that I didn’t know existed about the market, about myself, has and whatnot and I had to get into a good state kind of baseline good state. And then from there then I felt like that was my decision. I decided not to because I already knew before I joined the super trader program, I knew what the problem is not the market or the system, it’s me. I already knew it’s like, I need to fix whatever problem that’s stopping me from becoming profitable. And so I then that person decides to concentrate at the time I worked on my psychology and then once that was done, I kind of make the transformation then. And then it took probably another year I think from learning the systems too and that to do a lot of simulation and then profits in the live market paper trading and move on through real money, of course, starting with small position size and gradually gaining up.
Ney Torres: [00:19:48] So, yeah. So, everybody listening right now, I want you to take note of it. Here’s somebody that’s doing it right. Here’s somebody that’s taken it seriously. And you took a whole year to work on psychology trading because that’s the most important thing. Most people confuse trading because open an account, there’s buy a hundred dollars and click up or down. And it’s super interesting. And my hope with this episode is that people that been there done that see what takes and plan accordingly because it’s super fun. It’s been in the zone. It’s amazing. Isn’t it?
Ray Lu: [00:20:20] Yeah. And then once you become profitable and then there’s so much. You would do things so differently and then what’s your investment even if you’re not. I think even if you don’t pray very frequently, I think learning trading can also help in general. Just investing you just use your psychology is different than your whole approach to making money work. It’s very different. Now. there’re so many options that you could take advantage of then. Of course, the fringe benefit of becoming a better person. And in fact, I actually, speaking of the importance of psychology, I once heard another superior or her students say that, “Oh, you can learn to learn a system trading system first or you can do learn and work on your psychology first, either way that’s fine. But if you work on your psychology first you probably would with less money.” I think that’s well said.
Ney Torres: [00:21:05] Very good. And with that, I will like to thank you very much. I think that’s a great episode. And anything else you would like to tell yourself or somebody else listening in right now before we go?
Ray Lu: [00:21:14] Also, take it easy and trading is not say. Someone said, “it’s simple, but not easy because it’s a lot of work on yourself.” And I would just say, take it easy and it takes time but it’s not rewarding and it’s worth it.
Ney Torres: [00:21:26] Right. Thank you for your time and see you in the next location.
Ray Lu: [00:21:30] Thank you, Ney.
Speaker 2: [00:21:31] Did you learn something today? How can you apply your insights? What’s next for you? The fastest way to make things happen is to just share this podcast episode with more people that may find it valuable too. Talk about it with them and surround yourself with like-minded people. Hope you found this valuable. Don’t forget to subscribe. See you next time. This podcast references opinions and is for information purposes only not intended to be investment advice, seek a duly licensed professional for investment advice.