How I Use "FOMO" to Make Money Day Trading Stocks
Hey it's clay and i want to show you how i use, fomo, the fear of missing, out to make money day trading stocks, and right up front quick disclosure. This is not going to be all in theory, i'm just going to set up a little bit of context, and then i'm going to show you using some of my personal, day trading results, how all this plays out in the real world of trading so just very limited theory, more so just context. And then we'll get right to some real life trading results so you can see like i said, how what i talk about, ultimately, plays out in the real world, of day trading, and then you know set up, only the broad context, here you're probably saying wait a second clay fomo is a bad thing right i've heard other traders talk about it or through my own personal, training upon self-reflection. Those times where i've created headaches, and heartache. And in a very practical sense lost money for myself. It's really because, i've experienced that emotion of fomo the fear of missing out and it's caused me to do some bad things and you're right, it is bad, but that brings up the question of well is there another, angle we can look at things. Meaning. If it's bad for one group of traders, could it potentially, be good, for another group of traders, and yeah, absolutely. And that is how i use fomo and that is how i want you to use fomo, to make money when you're day trading those stocks and this could be used in swing trading too, but it's really a question of, all right where is fomo. Happening. Where is it probably, happening because again there's no guarantees, in the market but. At that situation. If you can look at it and say you know what there's likely some fomo there's likely, traders, that are behaving, their emotions are taking over they have the fear of missing out, and if you can identify, those, then you go to the next question of okay. As somebody that's observing, this, is there any ways that i can make money, and yeah there absolutely, is so let me go here and show you the backbone, of this trade, and then i'm actually going to show you how the trade played out live in real time so on my screen here you see microsoft. And this is the trade that you are going to eventually, see all play out but let me set up a little backbone, here like i was saying, and this is all, around the premise of me going short, now if you're a beginner to the market if you're just getting started. What is going short mean well going short shorting a stock, at the core means if the value, of that stock goes down, then guess what you as the day trader. The swing trader, make, money your account, actually grows, i get it super bizarre to hear the first time but completely possible and i offer lots of other videos, about how it works on the channel in fact i'll put a link down below to one just in case you are a total beginner and you're like wait a second what clay, did you just say you can make money if prices go down, how does that work like i said i'll put a video down below but that's the premise here is that my focus was on this. Meaning. I wanted to see. Prices go down that is how i thought i could make money, which leads to the question of okay well, if i'm looking, to make money when prices go down, where do i think some potential, fear of missing out is playing out well, let's ask, myself. Ask yourself, when do you have the fear of missing out from the long side meaning when you were buying a stock. And if you go through microsoft, here there's a couple of very key dynamics, here now let me full disclosure. There is more that goes into this than what i'm i'm portraying, here i'm just trying to portray. The general, idea the general kind of rule of thumb the idea, the thought process that you should have as a trader, where you can look at these charts you can look at trades from multiple angles and help develop, trading ideas for yourself, so in this situation, there is going to be a couple of resistance levels that are broken. I'm not saying, hey find, a time where there's two resistance, levels broken, and then go short that's not what i'm saying, i'm just saying this is what my thought process was that began to led me to the fact of you know what i think there's going to be, some fomo that's occurring, out there so to set up the context here like i said microsoft. On this day, microsoft, had some news and you can tell basically right when the news came out, right there i mean volume, came pouring in, and the price just absolutely, started to explode. So right there we know you have some fomo out there, for whatever reason. People. Were well not for whatever reason i know the reason is the news kind of just came out in the middle of the day so people would have just said oh wow what happened with microsoft.
And They're going to pull up the chart, they're gonna see this and what are they gonna think they're gonna the longs are gonna think oh wow. Look at that move i missed out on. Okay, well, that that's i i missed it all right well i don't wanna fomo though, i need to be disciplined. And then you know a lot of them very well could have recognized, this area right here, there's this resistance, line right there. So you can see right there the price. Pulled back. Came up bounced around bounced around bounced around, and who knows maybe they hesitated. Maybe you if you've ever day traded if you ever trade with real money you know it's not, it, it's one thing to see things. But to actually, execute, you know that that's another level that that's where, the a bigger challenge becomes, so right here you could have a situation. Where, people were watching watch around and they saw it break, and they were but they but they just didn't do anything about it and they're thinking uh oh look i was right it broke out and it's going. So now what that's the second myth right the first myth in their mind is well they missed the big surge right there and all of a sudden this could be potential miss number two, now again do i know for sure this is what's going on. I don't know for sure but, from a general, just knowing there's. Millions of other traders there's millions of market participants. You know this has got to be going in one form or another, because i mean i felt this before have you ever felt anything that i'm describing, were you missing, something, then you identify, it and then you miss it again, and then you're that much more frustrated with yourself and you're thinking, what's my, like, i don't know maybe i'm alone but i've been there many times before, so a great way to make money from the short side is just to put yourself in the the shoes that you've been in from the long side and then just do the opposite. So here we have a situation where that was a second miss. And then there's another area. That pops up and these people could be saying well you know. There's another resistance, just the highs. Maybe this thing can try to break to new highs if it breaks new highs. Well then you know what. That's gonna be an area where that would be another breakout, trade opportunity. And you can see that's exactly what happened here it broke out, at that point. And that's where i thought you know what. I think there's some fomo going on. I think there's a fear of missing, out, so because, of that, i'm going to act, now again. It's not just because it broke out of highs i'm not saying hey if something breaks the new highs you go short that's not what i'm saying, i'm just saying based on how things were behaving, in this situation. And then based off, some other little formations, that i was recognizing, and seeing, and i'm not going to get into all the nitty gritty details because like i said this is just a broad sense of how i want your mind to begin to work, how if you start to view the market from different angles, you can actually take something as fomo, and then, leverage it in your favor. And in this situation, like i said, because of what i've mapped out, at that point it became, very very interesting.
Now Some patience was required, as you saw, but i mean let's think about this, think about what had been going on, where was the price not that long ago the price was. All the way down here. And then it was all the way right there. So by the time it gets up to this area. Yes you're going to have. Fomo. But what else are you going to have. I mean if you want pause the video real quick, so you're going to have fomo, but what else are you going to have see if you can get this right so go ahead and pause. All right if you pause welcome back if not that was probably a little awkward as i just. Sat there, but well the other thing that you're going to have is you're going to have profit takers right you're going to have prof takers private takers from where, well those people i mean think about it some people bought that breakout, right there, they got in all the way down there, some people, bought that dip, congratulations. To them, other people, bought that breakout right there, and you know what breaking the new highs. Hey you know what there's going to be momentum, there's probably going to be people that are what full mowing fear of missing out they missed all those other opportunities, well i'm finally getting in right now, so when you have both fomo, people. And you have a bunch of people. Locking in those profits. You know what guarantee. No, but is it a situation, where the fomo may lead you to making some money, well let's see how this live trade played out, but it's really a question of does this thing want to finally roll. Over. I mean this thing like i said usually microsoft, doesn't move very quick at all but. In this situation. It is moving, extremely. Fast. Let's see if this thing wants to actually get the break of 230, or if this is just a pause before this thing continues, on. With with this uh big move. And i should know it is 10 43, so usually i'm done on the day by now but i mean if, a nice setup comes along in microsoft, with the movement it's getting in the setup here. You know i'm not opposed to trading later on in the day but. So yeah the big question now is is 230, finally going to let go is it going to let go as a support. Or is it just going to keep on, holding strong like it's been doing. So again it breaks down and you just saw how fast it got back up to 230.. But can the price actually get some more downside, pressure through that area. But yeah wow two. The 229, 90s. Very very stubborn. So much so that i might have to take some more off the table here i want to give it be a little bit more patient with. It. But yeah this thing does not seem to want to move, to the downside. Or at least in the extent that i i'd like to see it do. It. Taking off another 100 here just because i don't know if this thing. Is ultimately going to, behave in my favor or not. So again i'm still at risk of potentially losing money on the trade but, my, much smaller risk now. Given i've locked in share or i've locked in profits and my position size is now only 200. Shares but again. Still the potential is there to, lose money on the trade. Which is okay i'm green on the day, and the risk of losing some money, uh with the potential, reward of making a whole lot more, it's definitely worth it. But yeah this 230, area, is it gonna break or isn't it. I'm gonna have a fantastic. Looking five minute right now, bring that over there's a five minute i mean you gotta love that candle here and the location of the candle. But it's just really a question of can the price actually push down through, the 230, mark. Which it is being, very very stubborn, with right now. Definitely a lot of selling though going on up here too so it's just a question of are there going to be enough buyers. To continue to support all the selling that continues. To occur there's very clearly people are offloading, right now at 2 30..
But, There's plenty of people that are still willing to buy a pair at 230.. So are there just going to be more sellers and buyers or the sellers, finally going to overwhelm, the people that are for whatever reason wanting to buy up this high. We'll see. Right now those buyers they just, keep on coming in. We're making a little bit of progress down to the 229. 80s but. Okay now we're getting some momentum, here. Okay, have a hundred, shares left now. Let's see if we can get this thing, down below 229.. I'll take off another, 50 shares. Come on get on down through there. Oh, well 229, is to be expected, behaved as a support. Let's see if the price wants to give it another go. So again 229. Can the price actually push down through it. There it is the break. Pulled off another 50 shares so at this point it is just all. Profit, in my pocket, i am no longer at risk of this being a losing trade i will look to pull off another, 25, if it can get down below 220. 850. But this move right now is getting relatively, overextended. If it does go back over 230. I will, stop, out. So, let's see what i don't even remember my entry point my entry point was that okay so basically, i i'll, break even, if this thing all of a sudden snaps back against me on my final, 50 shares, but. Overall. A nice trade. Still in the trade like i said if this thing wants to keep on pulling backwards, or backward yeah i guess that's backwards, down down was probably more the accurate word, this thing wants to keep on pulling down. Then uh, you know the sky's the limit and this is the the best spot to be in as traders. Where the only question i have right now is how much money am i going to make i mean think about that, not if i make money but how much money am i going to actually make on this trade. Because it's already a winning trade and as traders, this is the spot you want to be in you want to put yourself in a position. Where quite literally the only stress you have is just not knowing how much money you're going to make. I like that stress i like that stress quite a bit. Thinking about taking some off at 228.50. If it can get down through there. Or even better yet. But this thing is getting relatively, overextended, here on the five minute but. Let's see if we can get enough momentum, push, to get down through, 228.50. So it's knocking on the door. There we go. Excellent. Fantastic. So took off some more profits there, 25, shares still left in the position. Let's see high, of. So now if this thing goes up over 229. I will be out. I'll just use a mental stop for that, so 229. If it goes up like i said i'll stop out. So i gotta watch the the level twos. Given i'm doing a. Mental. I mean i could see this thing wanting to bounce now, it's made the pullback it's made the move. But i could be wrong. And if this thing wants to keep on going in my favor. Well then that's awesome, i will take it. Where are we at all right not even 10 minutes, um let's see should i let this, i don't know let me know in the comment section, should i keep the video rolling right now when not much is going on, or should i just pause it and when it either looks like the price is going to go in my favor. And let me know i'm kind of torn. All right let's see what is the high of that, high of. Whoops high of uh 228. Okay. New stop loss. 220. Eight. Is now if it goes up over 228.50. So just letting it work for me as the price goes down in my favor i'm going to lower my stop more and more, but if it does go over 228.50. I'll have to get out got to get out, so there we go um. Nice, 258. On the trade. And. I mentioned like in the setup how long was that entire trade got it started, at. 9 41. And 53. Or excuse me 10 41 and 53, got out, so almost about a 10 minute trade and there you go took some patience, the thing was stubborn. But you know what eventually, became, a, situation where so many people. For i don't know who was up there still buying and buying and buying. At 230. But you know what eventually, they ran out, and just as an update here so you can see the rest, now i realize you saw all that but it fell off. And then the rest of the day you can see that basically nailed the top right there. Let me do this, you can see that it just went sideways sideways, sideways, so it's not like the price ever collapsed, or anything like that, but just went sideways.
The Rest of the day and then eventually did start to pull back that much more, uh but overall. It worked out and it worked out very nicely, patience was required. But the reason why it was easier to have that patience, was because in my mind at least i understood. What was going on i knew that i was doing i knew that there was fomo out there i knew that there would be profit taking out there, because of like i said all those other different you know opportunities within the market where people probably got in, with some good entry points, but once again none of this is guaranteed, to happen the price could have just kept going that's why risk management, that's why all that stuff definitely matters, but this is why because of the thought process going forward because i knew i was using fomo. It was much easier to have patience and just sit there and give the give the thing the chance, to happen that i thought would happen which ultimately did and, you know made 200 what was that 50, in like 10 minutes, not too bad 250, dollars 10 minutes, for me at least i'm more than happy with it so hope you found this helpful hopefully you now kind of have a a better idea, better way, of different angles you can view the market, and ultimately turn you know situations, for, that are bad for one group of trader. Into you know a good situation, for you. And this can of course be applied on the long side too right if you can also say well where would be some bad spots for shorts. Where could a short if somebody's going short where could they be full mowing, and then you can flip that around and try to play that for the long side so this does it is a two-way street, it just happened to be in this one, i was just short trying to figure out, where it would be you know a fomo location for those longs, and then trying to take advantage, of it so if you enjoyed this video if you would like for me to make more like this, then quickest way to, uh communicate, that to me just hit that like button super time efficient way to just let me know you enjoy these videos, also comments, questions suggestions. Please leave those down below if you've ever watched in my past videos you know i do read and will reply to all comments and then finally check out the channel as a whole if you enjoy the live trading bit, of this video then i have an entire playlist a lot of just that are strictly live trade videos, so check those out and then a lot of other videos. On the channel, so if you like what you see enough to have, to hit that subscribe, button as i'd love to have you to subscribe to the channel so yeah get out there and start using fomo, but in, your favor. First off thanks so much for watching the entire video real quick before you go, i want to invite you to a live webinar, web class, training, workshop, online event, whatever you want to call it but it will be me, live, revealing, to you what i discovered, that has allowed me to transform, myself from being an employee.
To Being my own boss, including. How i had only one losing day out of 73, days in total, i'm going to cover three keys that have helped me, unlock, profitable, consistency. Within the markets. The first key is super weird, but in a productive, type of way, the second, key is super awesome because it quite literally, is wired into our dna, as humans, making it very easy to use, but in a cruel way, this becomes a pitfall for many traders, i'll explain it all though, including, how to avoid the pitfall, that it creates for some, and yeah the third key when you hear it sounds way too good way too good to be true but it's not and i'll show you, how it all works, then at the end i open it up for a question and answer session that is again, totally, live, even if you can't make the live session, please still sign up as it will be recorded. And you can go back and watch the replay, that i will send you, click the image on the screen or click the link down in the description, box, so you can get the date and time and claim your spot, which i should note is limited, due to the fact that this truly, is a live event, if you have any questions. Let me know if not, i'll be seeing you soon.
2020-09-17 03:31
