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Hey everybody, it’s Michael Martin. Hope you’re doing well. Normally you have ganja today, but we couldn’t get our schedules together. His professional stuff, my professional stuff, we couldn’t figure it out on the schedule, so I’m just doing today by myself. He’ll be back next week. I wanted to say thanks to a bunch of folks who have written in and I don’t like writing stuff down, so I’m just going to trading leprechaun. Thanks so much Driftway Auto, I appreciate you. Thanks for writing and you are a great love watching you. Appreciate that OMG. Want to say thank you. Then Raj said The best philosopher on trading is right here and now in front of me. What a strong mind you have, Michael. Thank you very much for saying so and as far as, so there’s a lot of that stuff. I don’t want to bore you, but I appreciate all the feedback. I do read all the comments and where I can say something halfway intelligent that will help you. I do. Otherwise, I don’t want to pontificate and start speaking about things that no one really caress about.
Tessa, I have watched through every video because of how much value you add. I’m in my second year in beating SPY. I have benefited greatly from your lessons forever grateful for you, taking the time and expertise to perfect the craft of presentation. Your experience really comes through this dharma, the dharma and the sga. So let’s talk about a few things. There’s a few things here. The first one is appreciate your efforts, Mike. This is from Ronnie. Appreciate all your efforts, Mike, and it’s a comment on the best way million dollar traders let winners run. Appreciate all your efforts, Mike. I’m struggling to book losses. I generally keep a target of 5K, but generally exceed it. How do I mentally prepare to book the loss? Well, I think before you sit down and you start thinking about ideating your trading ideas, you have to always revisit this whole concept that we have where trading is probabilistic.
So another viewer wrote in and said, I took a couple of hits this week and I’m like, that’s the wrong language to use. No one’s taking any hits. What does that even mean? Losses hits, losses are not hits. Losses are what you expect probably 50 to 70% of the time. So why is that a hit if it’s the most frequent aspect of your trading? I don’t understand why people use language. It’s either that they’re lazy or that they haven’t really taken the time to put the thought in to what it is that they’re actually doing and it’s not a dig. But you have to understand the whole reason I’m sitting in front of you today and having had the experience that I’ve had is because of language. The language that I choose to use in my inner voice that has to be omnipotent and omniscient.
Your self-talk has to be very powerful. If your self-talk is weak, your behavior’s weak and don’t make me bore you with what happens with behavior. We all know where that ends up. So it all starts with your inner voice. That’s why I wrote the inner voice of trading and that’s why I filled the book up with nothing but what you would think of as failure. I had monster winning trades. I was in sugar went up 200% on a price basis in oh 5 0 6. That trade’s not in the book because no one needs another frigging jackass writing about how he was 26 and he made $7 million working 20 minutes a day. It’s not believable and it’s not something that you could likely replicate. So more power to the people who are succeeding, but again, it’s not for every man, every person so to speak. So mentally preparing for the loss, easy way to do that is to look at the results that you’ve gotten and look at the frequency with which you lose.
Now, you might have, there’s two R words that begin with R reluctance and regret. You have reluctance to take your losses at the $5,000 spot, which is easy enough to do. You can do the math, I’ve said it before, it’s fourth grade math, and you can do that very, very easily. You’re reluctant to do it. Why? Well, because you don’t want to feel regret. You haven’t come to have peace around regrets. Where does the regret come? You put in your order. You buy something long, it works against you. You’re at your whatever, the 5,000, I don’t know what percent that means. You should always be thinking in terms of percentages. You get stopped there and then it comes back in your face. If you are reluctant to feel that feeling, it’s going to dominate your behavior. So you have to find a way to make friends with it because I’ve been trading for over three decades and that scenario is going to play out.
So if you know ahead of time that it’s going to play out, you can’t build your trading around that as something to avoid because sooner or later, whatever feeling you don’t want to feel, the market is going to gyrate in such a way to put you exactly in that spot probably very, very frequently so that you can figure out what that feeling is trying to teach you. The same way if I said, man, I can’t believe all the Teslas I saw on the road on my way to your house, and then what do you start doing? You start looking and noticing all the Teslas and they were always right there in front of you. So again, choose your words very carefully because then the more you recite them in your brain, in your consciousness, the more you highlight them. Losses aren’t hits, they’re part of your journey getting to profitability, and again, if you have anywhere from 30 to 50% accuracy, it means you’re going to have 70 to 50% inaccuracy. Now that could again mean bad luck, bad timing or shitty analysis, but that kind of goes with it if you want to be a pro trader or get the results that pros get. It comes from consistency.
And so I wouldn’t talk about taking hits, taking a hit could be more like in the way I use the expression, if you read the book where I had feeder cattle or no, it was life cattle, not that there’s a difference to you and I was caught in a limit move against me and there was really nothing I could do about it. That’s the point. But I kept a good attitude. I knew what my position sizing was. If you have reluctance to take those types of losses or you’re getting to those 5K, whatever, again, you should think of it in terms of percentages quicker than you’d like, well then you’d have to cut your position sizing maybe drastically so that you don’t get to it so quickly and give it more room this way instead of having a thousand shares that go five bucks against you have 500 shares and give it much more room because once you have your entry point, your stop should be calculated before you put the trade on. You’re not going to try to shoot from the hip and enter at market because that’s an emotional reaction to things. That’s kind of like, man, I can’t take the pain of missing out and I’ve got to get in. I got to do it now. Boom, hotkeys got all my shit lined up.
So I would say that that approach, it needs to evolve because it’s not going to go away and if you don’t process your feelings around reluctance or regret, they’re going to run your life. The feelings that you don’t want to feel have so much power, maybe even more power over you than the ones that you do want to feel. So make friends with that and I talk about it because that to me is the most important part of trading. It’s not going through someone’s training program and it’s not buying somebody’s damn book, right? Because even take a really good book like my friend Brian Shannon’s book on anchored v Wap, I don’t have any financial gain in it. I’m not affiliate sales on Amazon or this and that. Brian’s my friend, I’ve known him for 20 years. I love the guy, but even if you digested that book in its entirety and he’d tell you the same thing, if you have a problem with reluctance or regret, all the great theory and trading tactics in the world aren’t going to help you. Those feelings are going to overcome you at the worst possible time and undermine your trading.
It’s why I refuse to sell a how to trade class unless you’re going to do the emotional work because that is the work that’s 80, 90% of it everyone can understand well. So when someone says you, I can teach you to trade, maybe they can, or another one is a person can learn how to trade in and of itself, that’s a true statement, but that doesn’t mean you can trade because once you add emotion to it, you become another person. Many of you anyway, and the sad part is many of you don’t want to trade. You think you want to trade, but you don’t like who you become when it’s time to put the risk on.
So I would say change your language. Changing your language can change how you feel and understand what it is about risk. And if that doesn’t work, then reach out to me. Go look at the blog. There’s a place where you can do an education inquiry and we’ll see if we’re a good fit to work together because one way or another you have to overcome it and if you’ve tried every avenue for yourself, then see what we can do to help. But I would get used to the fact that there is a certain frequency, Ronnie, with which you’re going to lose your job as a speculator isn’t to go hellbent for election and emulate all the traders who are putting up their how-to videos on YouTube. That’s not the point. Your job is to think like New York Giants player number 56, Lawrence Taylor and be the best defensive player that you could possibly be. He was the best ever, in my opinion. Jordan’s the best basketball player I’ve ever seen and gretzky’s the best hockey player. I don’t care what Alex is going to do with goal scoring, I don’t look at points as if you say who’s the highest scorer, those numbers are black and white, but that doesn’t mean the best as far as I’m concerned. So you have to mentally prepare for the loss before you put on the trades and say, if I put on a hundred trades 60% of the time, I’m going to lose that money.
Then figure out when you do win and say, okay, well I know I’m going to lose that money, but the good news is is that when I lose the five, when I win, I win 15. So anytime I put a trade on, it’s just like casting my lure or bait into the water. Sometimes I’m going to snag something, sometimes I’m not. I’m just going to keep trying so that the trades just become attempts for you to figure out when and what and why and how you can get the winners. Then you can go back and kind of massage your process to say, okay, how can I make this more efficient and how can I avoid suboptimal trades? Where are there things that are slipping through the cracks where I’m putting on trades that I lose money on, but I know ahead of time on some level that I have no business being in those trades?
That to me is how you can become a profitable trader. It’s not needing to go read another damn book, watch another video and figure out what the magic pattern’s going to be because there isn’t one. The marketing language I know is very powerful. These people hire copywriters who are getting paid literally tens of thousands of dollars to write copy to hit you in your emotional buttons so that you click on the buy now button. I know it, I know it. I’ve read the books. I know who the best copywriters are. The best one ever was Eugene Schwartz. He’s since passed away, but there’s a reason why they make so much money because they can compel people to act emotionally,
And this might be a correlation between how many damn courses that you’re buying on the how to and how poorly you’re doing trading. You’re blowing your nose when you have a cold. You’re not going to the actual cause, you’re taking care of a symptom and that you feel insecure and you’re willing to buy your way out of it, but it’s not going to go away because every trading system, every discretionary chart pattern is like a person and they have their own emotional constitution and you might not have good chemistry with what you’re actually looking at, even though intellectually you can understand how to do it and sooner or later even your favorite people are going to find a way to push your buttons and that’s on you. That’s on you. If you let other people push your buttons, it’s on you. They’re just being themselves and it’s up for you to reconcile that and figure it out and don’t be a bitch about it.
Don’t blame other people. If you are having problems, it’s on you. It’s up for you to fix, and if you think it’s buying another book or buying another fucking $97 course because they’re just missing the one pattern, then keep doing it. Keep avoiding doing the hard work. Whatever you do that gives job security for the rest of us because we’re willing to have the discipline to look at the parts that don’t feel good, but I’m getting tired of hearing it, hearing myself say it because I feel like you know what to do. The question is why can’t you bring yourself to do it?
I know how hard it is. I wrote a book on it. I wrote a book on my struggles so that you could identify with the fact that it doesn’t come easy pretty much to anybody. And if you even read the first Market Wizards book, I think, what’s the next one? Bride of market wizards, son of market wizards. Everybody in any of those chapters, whether it was Ed or Michael or Bruce or Paul or Richard Dennis, they all had an emotional hazing that they had to go through right When Richard Dennis started on the floor, the board of trade or whatever, he was so afraid his brother was putting in the orders or something like that. So everyone goes through that. So embrace it and be in that spot. You’re not in the feelings. You’re with them. Figure out what they’re trying to tell you and then deconstruct your limiting beliefs that are holding you back because a lot of it just could be that you have the wrong philosophy on how things actually work.
So I would definitely make sure that you use better language because part of that could be like, okay, some days you win, some days you lose. That’s just the way that it’s going to go. Your expectation, your mathematical expectation and your emotional expectation is that you’re there to win intentions, equal results, but trading is probabilistic and that even before you put on the trade, you might only have a 30 40% chance of winning. So I would approach every trade like that, even though I want the outcome to be positive. It’s just not practical to think that way, and so I’m at peace with it because I can’t, if you look at the word risk, a lot of people are like, no, no, no, I’m not trading. That stuff is risky.
My whole thing is if you look at buy and hold investors, to me that requires a certain type of, I don’t care about the outcome, style risk management because all they’re doing maybe is diversifying their portfolios and diversification. That’s risk reduction, but it’s not risk management and sometimes you find out the hard way. Now you want to delegate your buy sell decisions to another manager, no problem, and if you have 30 something years plus to retirement, you’re right who caress, that’s a whole other life away from you right now, so what do you care about it? But it’s too open-ended for me,
So I wouldn’t look at losses as causing a psychological dent because you have to look at the fact that they’re going to happen and they’re probably going to happen more frequently than your winners. So somehow you have to make friends with that process and just realize that that’s you on your path to getting where you want to be. Those are the necessary instances of trading that you have to go through. I don’t want to say struggled because really no struggle about it. You put in your buys stop to enter, you immediately put in your protective sell stop to protect your capital and 40% or maybe 60% of the time that you’re actually going to get stopped out. So you should be more comfortable with that because it’s the more likely scenario.
So much of this can be done ahead of time. The next one I might as well cover while we’re here, comes from J Fan 1000 on a video called Do You Have Winning Intentions? Say, Mike, I want to say thanks for the vision. Thanks for watching. It was a slap in the face I needed. Well, I didn’t mean to smack anyone in the face. Sometimes it can shake your shit up a little bit. I’ve been legging into my positions to add to the winners, but the cost average gets catapulted. Another great word so far away from my original entry, I’m not liking it. Laugh out loud. What is your take? So I mean, I don’t know. I can’t tell if you’re using commodity futures or stocks. It sounds like stocks, I’m guessing now if you’re using some type of gauge for volatility, because you have to understand, given the fact that commodity futures, the majority of them have different standardized sizes, you have to try to figure out what’s the dollar volatility.
And many people use a number of the average true range to kind of calculate what that volatility is. Now, I know corn, wheat and soybeans all have the same volume based standardized size at 5,000 bushels, but you can’t go in and trade five contracts of sugar, five of cocoa, five of gold because they are all different standardized sizes, right? Sugar is 50 long tons, 112,000 pounds. Gold’s owe at a hundred Troy ounces. Cocoa is 10 metric tons. And so you’d have to figure out based on the volatility, what the dollar vault is for each of those instruments, and then knowing what our unit is, your risk of your overall capital, how many contracts of each, because you might find that you can handle only one gold, but maybe five sugar and then three of cocoa. And although the contract sizes are different, they all represent based on their own unique volatility as measured by say, 10 day or 20 day, 50 day A TR.
Doesn’t matter to me what one you use. Those would be the prevailing number of contracts for that risk unit. And then you could talk about adding to your winners. Some people refer to this as pyramiding. I don’t use that expression myself, but it’s typically something that you either do or you don’t do. It’s not something that you try once in a while. Then you bring a bias into your trading, like I’m really bullish on this, so I’m, I’m going to add to my winners here. You want to try to act and behave consistently, especially if you’re starting out. So why I say the difference between stocks and commodity futures is because it’s already in the public domain that with commodity futures, if you are going to adjust your position sizing for a TR and not try to sit and try to overlay 10 different strategies on the E mini, which is the wrong way to go in my opinion, as opposed to just finding one strategy that you could use across every instrument out there that is attainable for your financial risk, it would be a much more robust process.
It would also cut your bias and stop you trying to uptime and downtime looking for cloud formations when there’s nothing there forcing trades that you have no business being in, it’s in the public domain that adding to your winners at one half of the prevailing A TR is the optimal spot to do so. Point four is good 0.6 of the A TR is okay, but if you’ve back tested and use the simulator such as trading blocks, there’s a step function inside of trading blocks which allows you to test and see, okay, if you’re going to add to the winner at what multiple of the A TR is the best, and it kind of looks like an inverted, like a parabola where it gets better and better and better up to 0.5, and then you’ve got decreasing benefit by waiting till the price moves further than one half a TR as your entry point.
So that to me is something you can disagree with it. But then the question is do you have to go back test and find a better rule then? So if you’re using futures, a good place to start would be adding to your winner at one half the A TR. How do you do that? Well say the thing has an A TR of 60, and so half of that would be 30. If your entry was at 20, then your next unit of risk would be at 2030 and then 2060 and then 2090, and you could figure out for yourself how many risk units you want to add or not, and then you could also adjust your position sizing in that. You can use equal risk units where if say the risk unit for, I think sugar I had in the previous example was say three. You could add three contracts then at every 30 points above your previous fill up to a certain number of maximum risk units directionally.
Or you could say, I don’t want to buy something if a market does happen to get toppy and could have a potential to come back at me. Just from a mean reversion standpoint, which is something that you have to live with, you might say, well, I’m going to cut that down to one or two and not buy three. Obviously, it’s easier to do if your risk unit has an even number of contracts because that divides by two. You can divide that by half. So if you were trading six contracts, you might say, well, I’m going to add six and then I’m going to add three every half a TR. You could say, I want to add six as my first unit, six as my second, and then if the market really moves away, I still want to participate, but I’m going to cut my sizes by half or by what two thirds and just add two.
So you can choose that and back test and see what one better fits your emotional constitution because there’s no one way if you’re looking at stocks, again, what’s in the public domain of how other successful people are doing it, they oftentimes will look to buy things long after a consolidation or what people would call a stage one in the grand scheme of things, look for the breakout into what they would call a stage two uptrend. Add their first risk unit, not their optimal position. Let the thing run. Let it create a base, right? Or yeah, inside a base inside the stage and then add at the next breakout above. That’s another way to do it, and you can also vary your position sizes. You don’t have to buy the full jammy all at once.
Of course, if you buy your first piece, the thing might go and never stop. There might not be any basing, so you’re not going to get an opportunity to add to your winner in that regard. It’s part of life. Too bad. It’s happened to me. That’s the way it goes. So yes, I think it’s a truism that says if you’re going to buy something at 20 and then it bases and then the next breakout is 24, and then it takes off and then the next base doesn’t happen until 30, you’re not going to look uniform. And depending on how much you buy at those places, the one thing that you could say is that yes, your average cost is going to go up, but when you’re looking at trying to make 50, 60 bucks a share, I don’t care if the range of entries could go from 20 to 30 because if it’s going to 60 or if that’s what my intention is to hold the trade that much, then again, you have to change the way you’re thinking. If you think $2 is a big move, that’s a different mindset. That’s not allowed in my house. Take your shoes off and also leave your small-minded thinking at the door. That’s not what we do here. You can’t make money with that, and if you do, it’s probably because you’re trading too large.
But at any rate, I’d be super careful about the language that you use. And yes, it’s true that if you average into your short sales that your cost basis is going to change. And if you average into uptrends by adding to your winners, you’re at, your average cost is going to grow. But the point being is that you’ll have more on, you’ll have more of a position on more shares, more contracts, so that even a smaller move is still going to mean greater rate of return for you. You’re probably looking at like, here’s my basis and here’s where my exit, and I want that to be big based on one risk unit as opposed to adding all the way, having a higher average cost for your position and a smaller distance. So it’s kind of like you make it up in volume kind of a deal. So again, meditate on your language. It really helps to kind of journal this stuff out and then go back and look at the words that you’re choosing because in that scenario, there’s really nothing wrong about that. I’ve been legging into my winners in my positions adding to the winners, but the average cost average, what does so far away mean? You’re probably looking at a dollars and cents.
I don’t know. What’s so far away means that seems super subjective. I should have pointed that out earlier because again, if you buy something at 20 and your next entry is at 26, then your next entry is the 30. That doesn’t psych me out. If you’re buying the things the right way and you’re in things that when you look the left on the chart, there’s no structure in the way. You’re putting in multi period highs. Looking at the dailies and the weeklies, I’m not talking about intraday stuff. You have to expect to pay more just like you would. You got to pay more you quality stuff. Anyway, two really, really good reader questions. I appreciate them all coming in. I’m not bitch slapping anybody. I’m just saying this is based on the language that you’ve written. Investigate your language and make sure you write down the things that you’re actually thinking because it might not be realistic or practical, and I think your words have a lot of power, so I’m always hyper aware of the things that I say to myself and the language that I use because words have power. Anyway, I appreciate you. You’re all being here. Please like and subscribe. Get the audio book for free if you want, over at Martin Chronicle and Ganja is okay. He’ll be here next week and I’ll see you tomorrow.

What’s cracking, ma? How’s everyone today? Happy Tuesday. So the thing that can help you with this whole stop thing is you’re probably settling for less when it comes to making money. And in my opinion, you have to be absolutely unreasonable with making money absolutely unreasonable. I mean, what the hell are you taking all this risk for to make peanuts? And so what I mean by being unreasonable is you can’t be satisfied making 200 bucks a day and then be like, yeah, I’m showing everyone my trade ticket. I just smashed a trade for 200 bucks. If you’re doing that, you’re probably thinking about that’s like a sushi dinner for you and a date maybe, or it’s your favorite pair of kicks. Like again, get out of thinking in terms of dollars and start thinking in terms of percentages and start to envision for yourself how a current trade that you’re in could increase your assets under management, your account balance, your corpus, whatever the number. The thing is, it’s all different ways to say the same thing. How can that move the needle by five to 10%?
Don’t get in the habit of taking one quarter of 1% trades. Now, if you get stopped out at those levels, that’s the way God wanted it. But for the most part, your intentional activity should be, I’m going to put on a trade I’m going to add to my winners. I’m going to add change and adjust my protective stops as I need to, but I’m demanding from the market. Monster gains. Don’t tiptoe your way into futures. It’s the wrong industry. You have to be very, very brazen with your intentions. You can’t come in, be like, go, please give me some money. Please, Jesus, that’s not going to work. You can’t come to the market with a fear-based mentality. You have to play superior defense. But that’s just like enter protective stop. That’s the best you can do. Watching it isn’t going to help you.
Watching the market’s not going to help you manage risk. Now, I can say that because my system is calibrated for that. I’ve had, like I said, three and a half decades of constant observation, so I’m in a different spot. But when I was younger, starting out, it was exciting to watch the markets, but I realized that I’m not trading for excitement. I’m trying to make money here. And that when I watched the market and I saw I had $200 in my pocket and I had two weeks to go, I had four different people that wanted that money who I, for the various bills that I had to pay towards the end of the month, I was like, man, I got to make things happen. I have to create more profits. I don’t want to keep being in this situation where I’m robbing from Peter to pay Paul.
And so I had to develop the other side of my business obviously and serve my clients to generate the commissions and the fees until I had enough assets under management to go out on my own and earn incentive fees. And that was a real game changer. But in the meantime, what I didn’t want to do is get excited about making a day’s pay in one hour. I had to get rid of that thinking. It’s an interesting observation, but it doesn’t necessarily serve you if your goal is to make big money. So again, you have to demand from the universe all the abundance that you want. Don’t be like, well, one day it’s going to happen someday. Someday doesn’t exist any more than you’re saying, I’m going to be a world-class trader. I’m going to be means future tense and the future doesn’t exist. All you have is right now, so you can make up your mind right now in the ever evolving moment of now, of now, right now, of right now, right now that that’s what you demand from the marketplace.
Then you have to conjugate your behavior with that intention because it’s not going to come and kick you in the ass, especially if you’re cauterizing and taking off good risks. So the only way that I found able to marry my belief system with my behavior was to adjust my stops, stay in strongly trending markets and then stay out of my own way and stop thinking about stuff. Because going back to last week, if you were ready, willing, and able to risk a half a percent on any particular trade, what’s the damn difference? If it’s the initial half that would come out of your corpus coming into the day, right? Or you’re in a winning trade and you’re still risking that one half of 1%, why does it change? Because that’s the market communicating to you in no if and or buts that you’re on the right side of the trade. Again, whether it’s good luck, good timing or good analysis, what do you care? Figure it out after. You don’t need to think about it in real time. If you overthink things without being trained, you’re going to make the wrong decision all the time. That’s how I would bet against you. Not to say it that way, but I can count on you to do the wrong thing.
And the rest of us are like, man, it’s so easy to make money when you’re in a good trending market. Just stay out of your own way. Let the thing go. It doesn’t matter what happens on any given day, it’s going to go up and down in a positive slope. Y equals mx plus BM is positive. Great. Stay in the trade, right? I mean, you could write a children’s book on trading and say, okay, here’s the chart that you’re looking at. And if it’s not in the no, if it’s in northeast quadrant here, that’s a bi signal unto itself, especially if it’s daily or weekly. If it’s in the lower right corner, short it or stay, avoid. And if the thing’s going sideways for whatever reason, please for the name of God and everything that’s holy, don’t start down timing to look for opportunities. And that’s a message for you.
You stock index traders. If the trends aren’t happening on the dailies or weeklies, there’s nothing to do during the day. Find another instrument. Let the market do the work for you. It’s so easy to find up trending stocks for the love of God. I get so many emails from people who are struggling and they send me the charts and of course there’s 45 overlays on it and they’re like, man, these indicators are failing me. And I’m like, yeah, because they’re not indicators. They don’t indicate anything. They’re really confirmers. The price and the volume will tell you, especially price, everything that you need to know. What does Brian Shannon say? Only price pays. We say basically very similar things using different language, but the price will tell you where it wants to go. That’s the leading indicator, if you will. Everything else kind of confirms. So your indicators, again, are band-aids to help you deal with the feelings that you don’t want to feel around the uncertainty. Will my gains be there in the morning? Please, Jesus, please.
And I think you all get kind of uptight about this stuff when you should just let things unfold. And if you come in with that type of trepidation, granted, you always have to respect risk, right? So I’m saying macro. There’s the absolute minutia of managing the risk add risk with a buy stop above the market. Let the market come to you. Don’t chase your order gets filled, you automatically put in your protective sale. Stop. That’s the best you can do. Let the market activity unfold because you don’t know. No one does, and I’m not throwing names under the bus here, but people can have a good idea, they can figure that. They can have a good understanding of how things are going to go. But in reality, most people have a really bad at prediction. And I’m talking everybody from Bruce Covner all the way down to the guy who’s starting tomorrow or today, prediction is a sucker’s bet.
You don’t know all the forces that are at work. You don’t know what everyone else’s. Why are they in the trade? What are they doing? Are they adding to winners? Are there big investors who have hedge funds or forti act companies that have to step in and buy more stock? You really don’t know. You really don’t know. You can’t see most of that, and they’re selling you on wondering about what the market makers can see. It’s irrelevant. It’s irrelevant to how you manage risk. All you can do is put in your protective stops and if you sell short, you put your buys stop in above the market, the thing goes down, you can adjust your buys, stop lower. Don’t worry about your win ratio. If you’re winning 40% of the time, you’re going to be absolutely fine, but you need to start putting these things in context.
That accuracy is the name of the game. And sniper like entries matter. Nope, they don’t. You need to be relatively correct. And I’ve done, I’ve done some stuff and I’ve put orders in where there are massive amounts of slippage that would make you puke. I mean, thousands of dollars of slippage and skid on an entry, obviously we’re putting size on. So relatively speaking, again, it’s nothing to fret about because it’s a percentage game, but you need to start thinking abundantly and to start to think about how you are worth it or are you worth it? Maybe you have low self-esteem. Maybe you think you need to put in 10 years before you’re worth it. That’s not how my mind works. But this is the kind of stuff that we speak about in the coaching and the people sit back like, yeah, where did I get that limiting belief? Which parent taught me that?
Was it my overbearing father? Was it my engulfing and in devouring mom? Or was it some other sibling that was a know-It-all but is still living home at 32? You could make up your mind that that’s what you deserve right now. What the hell are you waiting for? I didn’t have a choice. I’m not getting into it anymore. I’m tired of talking about it. You all know if I failed on Wall Street, what I had to go back to and I didn’t want to do that. I was physically and mentally exhausted from doing that. I’d been working half my life doing that stuff and it was time for me to turn it on and work smartly now.
So that’s intention. When they say intentions, equal results, you have to believe that you’re entitled to it, that that’s part of who you are. Now, that’s what you do. You do the things that pro traders do. What do pro traders do? They manage their risk. They buy strongly trending markets. They move and adjust their stops and that’s it. And they let the big players kind of move the markets. And from lack of selling and increased buying, there’ll be ebbs and flows of the demand within the overall move, and all you do is have to hang on. Your protective stop will knock you out at the right time, but don’t think that you know better and that you can step in and figure that out on the fly by watching one minute bars or two and five minute divergences. Oh my God, that that process has killed more traitors than I think, than Bernie Madoff or Philip Bennett from Refco or John Corzine at Man Financial, or the other place. What was it? PFGBEST? Maybe I can’t remember all the firms that have gone wrong from egos anyway, think intentionally. You’re entitled to those if you do the work. Doing the work means putting your stops in and stay out of your own way and dealing with the emotional crap that really has nothing to do with trading. It’s your baggage that you’re bringing to the table that really doesn’t serve you, although you think it does. So you’re constantly wrestling with these emotions like, I want to make money, but I’m really afraid to

Lose. People feel pain a couple multiples more than they feel the pleasure of it. So the fear will pervade you and actually take you out of trades when you’re actually making money. Can you imagine the Vietnam that’s going on in somebody’s head there? I don’t want that. Anyway, those are my thoughts. I’ll be here tomorrow with Ganja. We have a great episode. I appreciate y’all being here, and I’ll see you tomorrow.

Hey everybody, it’s Michael Martin. Thanks for being here. I hope you had a good holiday weekend. I did. Today’s Friday, well, today is Friday, but it’s actually Monday for yous. I had a good Thanksgiving. I didn’t really eat that much, watch some pretty bad football and just did nothing. I like to have a day to kind of chill the most and not do anything, not think of anything. I also didn’t go shopping on Friday today because it doesn’t make me feel good to spend money. Someone asked about that a while back. His name is Michael’s good guy. I don’t please myself by spending money. Consumerism isn’t my deal. I live a very frugal life. What I do have is high quality stuff, but I just don’t have a lot of it in that I’m not into collecting things that I don’t need, and this whole Black Friday, cyber Monday thing is such a joke in that why you’re still buying shit you don’t need for half off.
I don’t understand why people think the way they do, especially if they have trading accounts that are underfunded. What is it that you need? I don’t really need much of anything. My best years. For example, even trading, I didn’t even have real time quotes. So anyway, I was speaking with a group of folks the other day and they were amazed as to how much marketing crap is out there geared towards day traders and day trading versus how the pros actually make their money. So I’ll probably doing some more content along those lines to see if it makes sense for you. Please be very vocal on what you think because again, I got better things to do than to create content that no one caress about.
I want to thank everybody for writing in and leaving the comments. I personally go through every one because it matters to me. I get a good pulse. That’s me taking my own pulse. I get a good pulse on what’s going on and what you care about. Also, the chats that you’re having amongst yourself in the comments. I tend to not encourage what we call crosstalk in that it’s difficult to give people advice on their trading when you really don’t know what it is that they’re doing or what their goals are, or especially how they want trading to serve them in their life. But again, win or lose, everyone gets what they want. So if you’re miserable and you’re still doing things the same way, somehow you benefit from that.
So today the topic is how soon do you move your protective stops if a position starts working in your favor? This is the gesture of when things start working in your favor. We talk with our hands in New York, I mean right away, which is kind of tricky because I advocate not looking at the screen. You definitely don’t want to be looking at your p and l during the day. That’s the worst thing that you could do because for the untrained eye, it’s going to induce you to do stupid things with your money. Take your wins too soon, which is how fear really pervades your trading. We’ll talk about that maybe tomorrow. So yeah, my whole thing is once I get filled on an order, like a hair trigger response, I put in my protective stops just to have peace of mind. I don’t really care about the outcome of any one particular trade, which is also why I don’t look at the screen and follow the chart and be like, oh yeah, it’s ticking up. Yeah, baby, I don’t care about that. I really put the trade on, put my stop in and then I go do other stuff. I have a couple of books on Basquiat over here that I’ve been reading. Again for the millionth time. I took a look at Brian Shannon’s book. Again, it’s a great book on anchored v Wap. Probably have Brian back on the show soon and a few other people.
So then I’ll set an alert and the alert isn’t a limit order, like a sell limit above the market that would take me out of the winner. The market going up is kind of intentional. It’s what I want the thing to do. So it would be way too early to try to get married on the first date. So I’m just trying to get into the position, have the thing work out, show me that I’m on the right side of the trade, whether I have good analysis, good luck or good timing, I don’t care. I’ll take all three, any of them because when things don’t work out, you have to take the dark side as well, Luke. So at the end of the day, you’ll set your alert. Where do you do that? Well, it depends, right? If you are using average true range as a position sizing mechanism, your entries and your exits are also going to be based upon that same number.
So depending on your sensitivity and your tolerance for risk, you can set that number at one half ATR. Currently on crude oil, the 20 day ATR is like $2 and 60 cents. So if you were short, which is the direction of the current trend, you might say you’re short at whatever, call it 77. So your protective stop can go in one half or one full ATR. It depends how you’re doing your position sizing and what number you’re using. And then as soon as it goes down, say a dollar 30, which is one half the ATR, right? So what would that be? 75, 70. You can adjust your protective stop to perhaps break even. I know a lot of you are like, man, a dollar 30 on accrued contract is 1,013 hundred bucks, and I’m like, so what

Are you doing it for? You can’t be happy making small amounts of capital, right? Don’t trick yourself into thinking that just because the number’s green that that’s necessarily good. You need to know what your why is, and in my opinion, if you’re going to do this, don’t go for blue collar. Don’t turn this into a working class job. If the trade’s working out in your favor, stay with it for as long as you can. The market will reverse at the bottom or it’ll start to consolidate and then you could start to think about stuff. But what you don’t want to do, especially if you’re not trained, is watch the thing tick in real time, in one minute bars thinking that that information is somehow going to help you because don’t know what you’re doing. You can’t think about this stuff on the fly. You need to make your decision first.
Put your stop in and then leave it alone. Don’t overthink things and don’t look at your p and l and get all fear-based. When you start making money like, my God, I’m just happy to be naked in bed with somebody. I’m going to take the first chance. That’s not how you make money. That’s in fact how you stay small. If you take small gains, you’ll never be a big trader. That’s not even just a truism. That’s an absolute truth. You have to let your winners run. Now, that’s tricky for some of you who like to offset your trades by the end of the day. I don’t know what to tell you. Some people just don’t like chocolate ice cream, so you’re going to have to figure that out for yourself. I’m not going to try to convince you, but I don’t want to have to reinvent myself every day, and that’s what they do every day.
They come to the market as far as I can see unprepared and try to figure things out that day. Like I’ve said kind of tongue in cheekly, there’s like three dozen guys who I know who have really, really good sense of timing and can do things like that. But the majority of people, although they can look and see what other people are doing within day trading or swing trading, they don’t have a feel for it. They were the last kids to get picked in gym class, if you know what I’m saying. And so look, I’m not calling your girlfriend ugly, but at the end of the day, if you don’t have a feel, it’s time to move on and let time heal all wounds and extend your holding periods and invite the success that you think you want at least. But I would adjust going back to the main topic, that you would adjust your stops as soon as possible. If you’re trailing structure, that’s a little bit different. You can wait for the end of the day, leave your protective stop in, wait for the market to close, check out the screens after the close. Maybe you don’t even adjust the stop. You put the same order in the next day. I’ve done that for weeks on end.
I’ve done that for weeks on end. In fact, I’ve done it for six weeks at a clip in a particular trade. I might’ve shown it with you, it was probably one of the longest times too, where I got in early in like oh 5, 0 6 on a sugar trade and it stalled and it went sideways. It didn’t knock me out, but every day I would call the floor, put in my protective stop and it would just sit there, and that was from, I want to say through the entire month of September into the first half of October before it started making new highs, and I added more to my position.
So you have to have the discipline and the stick to itness to be able to handle that and not necessarily worry about what happens day to day. I think some of you’re watching your p and l much too closely, and although I believe you have to trade your equity curve, which I’m not going to get into right now, you do have to stay away from looking at your p and l. If you’re trying to trade your daily p and l, chances are you’re a very small-minded thinker, and without the right training and without the right discipline, that is going to induce you to make decisions that are not in your best interest. You think they are because they feel good, and your feelings at that point in your life are like facts. But you learn if you’ve gone to any 12 step program, that feelings aren’t facts, so you have to find a way to subvert your strong feelings and realize that what feels good is not a good financial decision because of the fight or flight mechanism.
There’s probably a lot of reasons, but fight or flight is one of them. As a trader, you’re putting yourself in harm’s way, and the quickest way to make more money is to let your winners run. Take it home overnight. Take it home over the weekend. You always have protective stops. Don’t be afraid of what you can’t see. There’s no boogeyman under your bed. I can say maybe once a decade, there’s a trade where it moves sharply against me, and so that’s not enough. It’s not material enough to scare me from doing good financial decisions. In other words, some of you are so afraid of overnight risk that you’re like, oh, no, no, no, no, no. What are you crazy? And I look at that and I say, the opportunity to cost to you, the opportunity cost for you in that space of having that feeling of this is costing you millions because when things are trending, you’ll be making money for reasons that you don’t even know, and I think a lot of you might be uncomfortable with that.
You have to know shit. You got to have your stuff all lined up. You got to have your hockey. You got to have your mouse here. You got to have your headphones with the thing on. It’s too close to your mouth, by the way. I don’t need to hear every pop and snap out of your mouth, so get rid of that. That doesn’t serve you. If you want to make money, put on a small piece and let it go. It’ll grow to really, really big stuff. Quida doing that is to adjusting your stops. You could do that every day. Like I said, if you adjust using ATR, you can set alerts. If you’re trailing structure, whether it’s support resistance or swing lows or swing highs, you can figure that out based on your trading, but that’s what trading is to me. It’s adjusting a book of stops. One day we’ll have a discussion too about some of these guys who are saying the market makers can see your orders. Well, guess what? They can always see your orders. Unless you’re doing things at the market, which I don’t advocate, they can always see your stops and limits. Anyone with a frigging level two can see them, so I don’t see what the big deal is.
You have to protect your capital despite what these fear mongers are trying to sell you. You have to protect your capital. That’s job number one. Two, if something’s going down and you’re long market makers don’t want to own stocks that are going down, they don’t. They would much rather match you with someone else. They have to have inventory. That’s part of the deal about being a market maker, but they don’t want to be heavily long in their own book, in their principal account, which is what that is, right? They’re trading with firm capital at that point, so don’t worry about the boogeyman or something that doesn’t exist. Your protective stops are going to serve you in so many great ways and alleviate you of duress. Just let the market action play out. The market will tell you when the move is over at the end of the day.
But again, just to close this thing out, I would definitely say if you’re going to use some volatility measurement, whether it’s ATR or standard deviation, then set the alerts on your phone or what have you. When you get the alert, go back in. Change your protective stop, and if you’re using structure, that’s something that you could do after the close and prepare your order and adjust your order and then enter it again the next session. Appreciate all the comments about this kind of stuff, but really it’s really that easy. At the end of the day, you’re just adjusting a book of stop orders, and that becomes easy stuff to manage. You don’t have to look at the screen. The market’s going to go where it’s going to go regardless of whether you’re looking at it or not, and I don’t particularly find that entertaining, so I don’t really do it.
I don’t feel bad about losing money, and I don’t get overly excited about making money. I just take it all in stride and manage my stop orders. That’s the best that you can do. Remember we talked about control the controllables. That’s all I can do. Powerless over the outcome of anything. Trading is probabilistic. The sooner you get used to that, the sooner you get used to sitting on your hands, the more money you’re going to make. That’s the way it worked for me and about a million of the other people that I know who were at my level. Anyway, it’s good to be back and I’ll see you tomorrow, Wednesday. I’ll be here with the G-Man himself, ganja. All right, have a good one.

Ganja:
Hi guys. Welcome back to another episode where Mike and I go over your guys’ topics, comments and questions. Today, we have a great topic. Before we get into that, I wanted to say thank you guys so much for all the support. We really appreciate it. Make sure you guys like and subscribe, all comments, help the algorithm. And with that we can get into today’s topic, which is actually an email, and I’m going to go towards the end of it here, and it says, in this regard, I was wondering how you reconcile these aspects with the fact that every time one wins money, there is a counterpart that does actually lose it. Does this create any contrast with the ethics and integrity you preach as essential aspects of trading and for which I could not agree more? It’d be great if you could share your point of view on this. What do you got for me? Mike

Michael:
Reminds me of that Brad Pitt line from the big short.

Ganja:
Does it

Michael:
You just saying it? How’s it go again? Yeah, yeah.

Ganja:
In the movie, the Big Short, the two smaller hedge fund guys, they were talking about how excited they were. They shortened the market. They won, they made a ton of money and they were cheering and screaming, and Brad Pitt’s character was like, shut up. Like don’t cheer today because families are going to suffer and people lost a lot of money. It was funny, as I was reading it, I brought it up. I was like, this is crazy. I was literally just thinking about that the other day.

Michael:
Yeah, I mean there’s a lot of ways to look at this from depending on how a person orients to the world, there are people who are hyper political and they feel trading is evil and that there’s no real skill that’s very self-serving. Then there’s folks who run money for big pensions and endowments and nonprofits for special interests. And so you have to take the thick with the thin and figure out what everyone’s motivation is. I think there’s a difference between seeking abundance and absolute greed for sure. I kind of remember that scene. I don’t remember what they were trading in the scene though, to make that windfall.
I’ve only seen the movie maybe once, maybe twice, but I’m just reading the email here. So the things that this comes in from Stefano, thanks for the email, Stefano, the paragraph before what Ganja read says, you often mention that one needs to find what makes them tick emotionally, spiritually, and psychologically. You could put in intellectually and physically there, and he’s kind of putting them all together. And so now it might seem like he’s wrestling with the fact that in order for you to make that money is coming from someone else’s account. So just on a street smart kind of way of looking at it, I just figure people are smart generally, and they’ve put a lot of time into knowing whether or not trading is appropriate for them. They’re constantly being told by any number of people, including myself, only risk money that you can afford to lose.
And when they say that, that means to me that means don’t lose money. That would be adverse, that would, if you lost the money, it would adversely affect your life. You need to have your running money, you need to have your bills paid. You need to have a certain level of lifestyle. Then after all that’s met, if there’s extra cash that you want to take from savings and start to endow a trading account, you’re going to win some. You’re going to lose some. In my experience, no one’s really been forced at gunpoint to open up a trading account and they’re ready, willing and able to have to risk capital in order to make it. Now, the trickier part is to understand that when you put on a trade, you really don’t know who on who’s on the other side of the trade. It could be a hedger, it could be an investor, it could be a speculator, and two, you don’t really know what timeframe they’re looking at because they could be short-term day players.
They could be longer term or intermediate players or they could be longer term trend followers, position traders, investors even. So even though they might have an unrealized gain in their account, you could find someone to offset the position on for a gain, and they might still be by virtue of the fact that whatever your R is, even your three R still might not even be one 10th of there are when you think about it. So we can’t say for sure that someone is absolutely getting smashed just because you’re making money when they’re in a trade because the person that you bought the thing from or sold it short to isn’t necessarily going to be the same person that you’re offsetting the trade on. You know what I mean? Yeah, yeah, no. So there’s always newer people coming into the market. So if I bought natural gas from someone who sold it, there might be another person coming into the market that’s going to buy it from me when it comes time for me to sell, whether I’m selling it at a loss or whether I’m selling it on a gain.
So I don’t think there’s a moral argument here as it’s part of the free economy and it’s a way for people to bring financial abundance to them. What I would caution people, everybody is again, trade small. That’s small, lose small bits of capital, especially when you’re starting out because you could find yourself in a bad situation very, very quickly. But I always wish everyone the best, even the people that are trading against me and that they all have financial abundance. I take any pleasure in seeing anybody lose. When I do see the bigger blowups, I know that especially at the pro level, you’re dealing typically with ego in many ways. Folks that know better but didn’t take the trade off. And to me, that’s a breach of fiduciary responsibility, especially if you’re running other people’s money, you owe it to them to keep the losses small, but in those environments, you’re kind of encouraged to bet very big, especially if it’s other people’s money.
I don’t feel any conflict in my own body in doing this. I feel you can be spiritual and still wish everyone the best. It would probably help if we knew who the counterparties were on all the trades, but you don’t. They’re deliberately anonymous from you. So I think you can still hope for everyone else’s financial abundance on their own terms, in their own timeframe. All you can do is manage risk in the ever evolving moment of right now. So if you get hung up on the moral stuff, it’s probably not probably a good fit for you. But here in my house we’re capitalists and I’m not doing anything illegal or unlawful. I’m not cheating. It’s simple risk management. That’s really all it is. So I don’t really myself have any problems with it. What do you think?

Ganja:
I think that the only real ethical or moral argument to be made is only for people who are cheating. I think that otherwise you go into trading understanding that there is a chance that you’re not going to win, and it’s probably not small if you’re just starting out. If you don’t know what you’re doing, there’s probably more of a chance that you’re going to lose. So I think if you kind of stick to the core tenets of what you just said of don’t risk more than you’re willing to lose and obviously don’t cheat. Cheating’s not good ever, and just take your time, start small. I don’t really think there’s a moral argument to be made. I mean, if that’s the case, obviously they’re very different, and I’m not trying to draw a comparison, but then you should go around to every seven 11 and stop people from buying $3 lottery tickets.
It’s a similar concept, but obviously one is gambling and they’re quite different. But yeah, it’s like only risk what you’re willing to lose. And I think once you do that, then there’s no argument to be made. And sure, I get that somebody could be struggling or could have a form of gambling addiction, and then they also transfer that onto trading, but that’s unfortunate and that person should definitely get help. But that’s a completely different thing. You can’t treat the whole market like that. You just said it could be a big fund, it could be like a hedge fund, and it’s in their own timeframe. You don’t know what they’re losing or what their timeframe is,

Michael:
Right? Yeah. It’s important to understand too, when you’re starting out, you’re really running your money, but then when you get older and you go pro and you start running other people’s money, you’re serving a bigger purpose. You know what I’m saying? I’m impacting people who I’ll never meet for the good. Not that I’m not meeting them for the good, but handling their money. They’re going to get financial benefits. Some of these organizations are going to be able to go on for years and years and years beyond what their wildest dreams were because I was able to make them money and they go out and serve charitable cause or what have you. That makes me feel good. But again, it can be political. I think morals or ethics, I’m not doing anything that’s outside. I have impeccable compliance history.
Amateurs might say that you don’t create any value, but they obviously don’t understand how the markets work. They don’t understand how much math and science actually goes into it, and how much emotional integrity that you have to have when you manage risk because it’s really not about me. I’m trying to serve a bigger purpose here, so I don’t look at it or take it personally. It’s not like I’m getting beat. It’s like I’m standing century. I’m safeguarding people’s capital. Even in the commodity space, there’s no better person to do it than me. I’m not going to let them get taken advantage of. I’m not going to fall victim to stupid fads. I’m not going to get sucked into the memification, if you will, of certain names or certain trades. I’m a protector. I’m Michael Lee Archangel, and so who better than me? You see? And so I can see it on both sides, but as long as people have money and as long as individuals that I work with or for my job is to help them achieve their goals, that’s the primacy of my planning is to help them achieve their goals.
If other fiduciaries don’t have my sense of discipline, then it’s up to them to have to meet the standard as far as I can see it just in competition, you join a game, someone’s going to win, someone’s going to lose. You want to try to keep your losses small, especially if you don’t have a lot of money, which again is part of the paradox of trading is like you have to be in it. But if you’re thinking that you don’t deserve, if your politics are so messed up that you don’t think people have the right to earn money or to make gains, it would be impossible to take out your credit card or any cash and buy anything. Everything is going to be marked up for a profit margin, right? Salaries have to get paid. That comes from people spending money. You can’t think about being a victim every step of the way. That’s kind of how the world works. Even in government stuff, that money comes from taxes. So you trace the money, where’s the tax coming from? Well, it’s got to come from your AGI. It’s got to come from revenues. All the money’s got to come from somewhere. So there’s probably a few angles that you could look at this. I don’t have all the answers. I can only answer for myself.
I don’t know what the contrast with the ethics part would mean though, really. As compared to what though?

Ganja:
I think it was like, oh, if you do see it as a bad thing somebody losing, then how does that contrast with the ethical code that you set and that you have, if at all?

Michael:
Yeah, I mean, so my ethical code is do unto others, be a Christian about it. And so I just figure whoever’s coming to the marketplace, to me, okay, this is a really good question. It adds a different dimension and you think about it that way. I look at the market as a professional place. It’s a place where professionals meet. So if amateurs or newbies want to come in, and I was a newbie once, I don’t use that term in a condescending wake, which means to talk down to people,

Ganja:
Never judge

Michael:
Costanza stanza. It’s a professional environment, and that means the people who want to participate, there’s a certain level of stance. You go to Disneyland, you see Mickey standing there with the finger. You got to be this tall to go on the ride, and if you can’t meet Mickey’s finger can’t play. So that’s the way I actually look at the market, which is probably helps people understand why. Sometimes you might hear me speak as if I’m trying to discourage you, and in some ways I am. It’s because the level of competition is high. It’s an all-star league, if you will, and you can jump in as an amateur, but you have to understand everything that goes with it is you’re coming in used to playing a pickup game of basketball in a parking lot in your neighborhood, and you’re going against the dream team because that’s who’s out there.
So if you want to try to test your wares and go for it, I don’t, I’m never going to be a dream killer, but I’m going to be very practical and explain to you the reality of what’s out there. There are people who are just so skilled at this, who have a good feel, who have money, who have technology who’ve taken their beatings and are at the top. Forget having won Michael Jordan, you got 1200 of them on any given day coming against you, maybe more. And so if you go into that type of environment expecting to beat Michael or Kobe rest his soul in a game of horse or a game of 21, you have nothing to lose by trying, but be practical, be realistic. And so to me, if that person shows up at my house where the pros are, it’s not like it’s Augusta National where it’s members only, but you’re playing in a game against competition that has you far outmatched before you even know your ass from a hole in the ground before you even know what you’re doing. So to me, when you do that and you engage in the market anyway, your losses are on you at that point. You see? Yeah, I even know now as a 35 years of experience, I live in a paradigm of personal responsibility and if I lose money, it’s on me. There’s no one to blame.
Who are you going to blame if I’m acting intentionally?
So I think the question kind of begs, do you feel bad from the losers victims? I don’t think they’re victims at all. I think they’re people who consciously decided to open up a margin account or some type of equity trading account and they decided to have a go for it to them. Maybe they’re winging it, maybe it’s disposable income. It might not be their kids section 5 29 college savings plans. It might not be their 4 0 1 K plans. Again, when I say to people, you need to understand if this is appropriate for you, that’s kind of what I’m getting at money. It’s hard enough to get the grub steak in the first place. Is there a better thing that you can be doing? Could you buy section eight housing, for example, and earn rental income? Could you buy and sell wine? Could you do something that might put you in a higher chance of winning

Ganja:
In competition? That’s not for everybody. I think that’s one of the things I think this question is really, or the answer to the question is you really have to, it’s like what are your expectations in the market in the first place? What do you want? And I think that would kind of answer most of that. But one thing I wanted to mention is you talked about how they’re not victims, the people starting out or not victims. I’ve kind of believed that too because it’s like when I started cycling and I got put on the varsity team, I was the youngest guy on the varsity team, and it’s obviously a little different because in trading there’s more anonymity involved. But when I got on the team, I was fresh meet all the varsity guys wanted to not necessarily put me through the ringer, but they were happy they had a new playmate. They were like, oh, great, we got some more competition, someone else who can push me further. So to them it was exciting. And I remember one of the first practices we were working on, it’s kind of like a game of chicken. How close can you get to another person’s handlebars while you’re going through a corner together,

Michael:
Pull your elbow in the cheekbone and knock ’em off?

Ganja:
Well, and that happens. That happened to me in a race, but that’s what they were preparing for. That’s what I

Michael:
Would do.

Ganja:
So these guys were preparing me for that. You

Michael:
Pushed old ladies down the stairs.

Ganja:
Well, if you call an 18 year old kid, an old lady, then yeah,

Michael:
No, I’m just saying it’s the same mindset, right?

Ganja:
Right. It is. But anyway, so in this drill, my teammates started giving me a little bit more elbow one even actually pushed me to see if I’d fall over. And it’s like they were just testing me. Ultimately, they wanted the best for me, and they actually didn’t really think maliciously at all, but they were testing me. And I wasn’t a victim by any means. It was my personal choice to continue going that direction.

Michael:
It’s totally on you to be there. And so that’s why I don’t, again, I don’t know that where the angle, if it’s just a straight up comparison of what I’ve preached and try to be spiritual and loving and all abundant, I think it’s possible, again, for everybody to win, you do have to have extreme amounts of discipline. You do need to keep a good attitude, especially when you’re losing money, when you can go on tilt and do bad things and lose a lot more than you necessarily wanted to. But let’s be clear, if people come into the marketplace, and I generally think they’re warned 18 times to Sunday that you can lose money for things, even in the risk disclosure document, you list all the different ways people can lose money, then at the end you say, this document can’t possibly delineate all the ways you can lose money. So to me, at that point, even if the client gives you money and they lose, you’ve effectively tried to talk them out of giving you money in the first place. So if they go forward with that and you lose, right? Losing isn’t forever. Draw downs are part of the business. So I mean, what are we talking about? Do I feel victimized or am I going to claw my way back?
So it’s a simple question, but it’s also kind of sophisticated. I think you could answer it politically. You could answer it from a cultural standpoint. There’s certainly a spiritual aspect of it. There’s a capital way to answer the question, and I’ve touched on a few of them, but I don’t feel guilt for winning because I don’t sit around clicking my heels. I just think, this is who I am, this is what I do, this is my nature. Make money for people in the markets. And so someone’s got to do it because how else are they going to afford retirement? How else are the endowments or the foundations going to exist? Because these people, on a 5,000 year plan, these are entities that outlive the people who funded the accounts. In most instances, they were the grantors at the beginning, but then after they have to turn it over to other people, trustees and directors who have a lot of fiduciary responsibility, and I’m there to help them. So that’s my bigger purpose in this.

Ganja:
And one thing to add to that is no human should ever win 100% of the time all of the time ever. Because nobody, first of all, you can’t, it’s not physically possible. Not everyone can get first place. And also if you’re winning all the time, then you don’t appreciate it as much. There has to be some level of drawdown in anything in order to fully appreciate what you have and to not be greedy with it. Yeah.

Michael:
Yeah. I mean, I don’t think it’s practical to, I think that you’re going to win all the time. There’s a huge charitable component also to what I do in terms of who I work for, what I do for free, how much money I give away, how much volunteering that I do. So personally, I feel like I have a good balance of giving back in many ways, giving of my time, giving of my effort, giving of my money. And so I’m comfortable with that right now. It’s something that I look at all the time. I tend to be generous as a fault as it goes, but I don’t think you should wrestle with that. If Stefano is wrestling with this, I don’t think he should in as much, that people have every opportunity to not put their money in the market. And so if they lose, they’re not victims by any stretch.
They’re not a victim of circumstance. They’re not a victim of anything. They’re giving it their shot, they’re shooting their shot, and it’s really incumbent upon them to understand what they’re getting involved with. And that, especially at the beginning, I think they’re outmatched, they’re outgunned, they’re out ability. There’s a million things that are going against them. Unfortunately, there’s only one way to learn it, and that’s to be in it. So more to follow, but that’s really all I have to say about it based on my unique experience and the environment that I’m in now and what my thoughts are.

Ganja:
Yeah. No, I think that’s a good place to wrap up today too. I hope we answered the question. I think we did pretty well. With that said, make sure you guys like and subscribe. I’ll comments, help the algorithm. We really appreciate the support. Oh yeah. And I will see you guys in the next one.

Michael:
Take care. Okay, everybody, thanks for being here. Please take a minute like and subscribe to the show. You could also leave a comment. I don’t have all the answers, so it’s good to get some feedback. Also, if you would like to support the show, check out the links below. You can get the free audio book of the Inner Voice of Trading, and also information about the course that I teach with Victorio. Thanks for being here, folks. I’ll see you tomorrow.