Power Outage and Technical Issues

Introduction and Apologies

• The speaker begins with an apology for the late start due to a power outage affecting their camera setup.

• They confirm that audio is working properly after checking with participants, indicating a collaborative environment.

• The speaker shares personal context about electrical issues at home, which caused the delay in starting the session.

Upcoming Events

• The speaker notes that there will be no midweek mentoring sessions on Christmas Eve or New Year's Eve, emphasizing the importance of today's session before the holidays.

• They express commitment to providing valuable content today despite technical difficulties.

Session Structure and Content Overview

Three Key Areas of Focus

• The session will cover three main topics: alpha strategies, technical analysis, and psychological preparation for trading.

• A PowerPoint presentation is prepared to assist in planning for successful trading in the upcoming year.

Humor as Engagement

• The speaker attempts to share a dad joke to lighten the mood but experiences technical difficulties with audio playback.

Market Analysis: Google Stock

Observations on Google Stock Performance

• The speaker discusses Google's stock chart, highlighting its inability to break above a critical level around $292 multiple times.

• They question what might be wrong with Google’s fundamentals but suggest that there may not be significant issues currently impacting its performance.

Technical Indicators

• Emphasis is placed on understanding key levels of support and resistance in stock trading, particularly referencing the 34 EMA (Exponential Moving Average).

Understanding Risk and Reward in Trading

Key Concepts of Risk to Reward

• The speaker emphasizes the importance of seeking good risk-to-reward ratios, aiming for at least a two-to-one bounce back to VWAP (Volume Weighted Average Price).

• Traders should be psychologically prepared to test their strategies, accepting small losses in pursuit of larger gains.

• The discussion focuses on Google stock, identifying a potential buy zone around the 34 EMA (Exponential Moving Average), specifically near $29.50.

Options Strategy Discussion

• Suggested options include Google Jan 16 calls at $310 or $300, depending on individual budget constraints.

• The speaker notes that while the $300 calls may yield higher returns due to being out-of-the-money, they are also more expensive; thus, budget considerations are crucial.

Technical Trading Strategies

Sniper Approach in Trading

• A "sniper" trader operates with clear rules about when to enter trades, focusing on specific technical indicators.

• Emphasis is placed on trading at risk zones; for example, only buying when prices pull back to key EMAs like the 8 EMA.

Understanding Risk Levels

• Different EMAs represent varying levels of risk:

• 8 EMA: Highest risk but smallest position size.

• 21 EMA: Medium risk and medium position size.

• 34 EMA: Lowest risk but largest position size.

Market Trends and Pullbacks

• Traders must wait patiently for price pullbacks to these EMAs before executing trades while always maintaining stop-loss orders.

• It’s important to trade within established trends—bullish or bearish—where EMAs are stacked accordingly.

Identifying Relative Outperformers

Analyzing Market Performance

• The best time to execute trades is during market pullbacks on stocks that show relative strength against a weak market backdrop.

• Microsoft is highlighted as an example of a relative outperformer; traders could have capitalized by buying during its pullbacks across various EMAs.

Practical Application with Silver Trade

• A successful trade example discussed involves silver, which showed significant movement after pulling back to key support levels.

Trading Psychology and Identity Development

Market Analysis and Risk Management

• The speaker suggests waiting for a 60 pullback in silver before making any trading decisions, indicating a cautious approach to market movements.

• Discussion of IBM as a relative outperformer, though the speaker expresses concerns about its previous chart performance, highlighting the importance of historical data in decision-making.

• Emphasis on managing risk as a critical component of trading strategy, setting the stage for deeper discussions on psychological aspects.

The Importance of Psychological Factors in Trading

• The speaker introduces a PowerPoint presentation focused on psychological beliefs that influence trading success, emphasizing the need for self-reflection among traders.

• Participants are asked what they believe matters most for successful trading in 2026; responses include risk management and discipline, showcasing common trader concerns.

• The speaker challenges participants' answers by suggesting that while these factors are important, they may not be sufficient alone for achieving success.

Goals vs. Identity in Trading Success

• A discussion about New Year’s resolutions leads to an exploration of how goals without actionable plans can lead to failure; this sets up the argument against superficial goal-setting.

• The speaker argues that simply having goals or resolutions is inadequate; true progress requires understanding one's identity and values beyond just setting targets.

• A core belief is introduced: great trading is built on personal development rather than merely focusing on trades or financial outcomes.

Becoming Who You Need to Be

• An anecdote illustrates that aspiring for wealth (e.g., wanting a $50 million account) should focus more on becoming deserving of such wealth rather than just desiring it.

• Reference to Jim Rohn's philosophy emphasizes that striving for financial goals should also involve personal growth during the journey toward those goals.

Identity Formation Through Values and Standards

• The value derived from becoming a profitable trader lies not solely in monetary gain but in personal transformation throughout the process.

• All outcomes are believed to stem from one’s identity; thus, understanding who you perceive yourself to be is crucial for achieving desired results in trading.

Prioritizing Values and Standards

• The process of building identity involves establishing values which then inform standards; prioritizing these standards helps shape who one becomes as a trader.

• Reiteration that aligning standards with values will facilitate personal growth necessary for effective trading practices.

Understanding the Identity Chain in Trading Success

The Role of Values and Standards

• The speaker emphasizes that belief in one's identity is crucial for success, stating that who you want to become is rooted in your values, which set standards and priorities.

• Consistent actions based on prioritized values lead to results; success is described as a natural consequence of applying fundamental principles consistently.

Identity and Its Impact on Performance

• The speaker shares a personal anecdote about professional athletes, highlighting that reaching a desired outcome without becoming the right person can lead to failure.

• A friend's experience in trading illustrates how an identity crisis can affect performance; believing in one's ability is essential for recovery after setbacks.

Failures of Traditional Trading Plans

• Trading plans often fail because they are outcome-based rather than identity-based; motivation can fluctuate, leading to inconsistent actions.

• Instead of setting resolutions or goals for 2026, traders should focus on defining their desired identity as traders.

Defining Trader Characteristics

• The speaker encourages aspiring traders to identify specific traits they wish to embody, such as discipline and patience.

• Warren Buffet's concept of "temperance" is introduced as a key characteristic for successful trading—emotional regulation is vital.

Establishing Clear Standards

• To achieve desired traits like temperance or consistency, one must establish clear values that dictate behavior.

• Setting measurable and non-negotiable standards (e.g., daily journaling trades and emotions) helps maintain focus on growth.

Prioritizing Actions for Success

• It’s crucial to prioritize standards; if something matters, it should be reflected in one’s schedule and commitments.

• Practical examples illustrate how prioritization manifests through time management and financial investments related to health or trading practices.

Reflecting on Progress

• Traders are encouraged to reflect on their past year (2025), identifying areas for improvement tied into their desired trader identity moving forward into 2026.

Understanding the Path to Trading Success

The Importance of Purpose in Trading

• Emphasizes that having a clear purpose or "why" is crucial for achieving success in trading. It suggests that understanding one's purpose can guide actions and decisions.

• Highlights the need for discipline and execution in trading, stating that traders must manage risks effectively while remaining focused on their goals.

• Encourages reflection on personal thoughts regarding trading strategies and beliefs, indicating that one does not have to accept all ideas presented but should consider them thoughtfully.

Tools for Self-Reflection and Planning

• Introduces a "trading identity planner" document designed to help traders define their values, standards, and priorities. This tool aims to clarify who they want to be as traders.

• Discusses the significance of identifying oneself as a specific type of trader based on personal values and standards, which helps maintain consistency in trading practices.

Market Analysis Insights

• Analyzes current market conditions using the SPY (S&P 500 ETF), noting recent price movements such as hitting resistance levels and testing support.

• Describes expected market volatility during "chop X week," suggesting that fluctuations are normal and may continue until clearer trends emerge.

Understanding Market Dynamics

• Points out various factors contributing to market drawdowns, including earnings reports and quad witching events. It stresses the importance of focusing on actionable insights rather than just understanding reasons behind market movements.

Personal Development Through Challenges

• Shares an example from participating in a 75 Hard challenge, illustrating how setting high standards based on personal values can lead to positive outcomes like improved health.

• Conveys the message that prioritizing personal growth through challenges can translate into better performance in trading by fostering discipline and commitment.

Conclusion: Becoming Your Ideal Trader

• Concludes with encouragement for traders to focus on who they want to become by aligning their actions with their values. This alignment is seen as essential for achieving long-term goals in trading.