Hey everybody, it’s Michael Martin. Thanks for being here. So I got some good feedback on the episode from, I think it was Monday, the one that dealt with math. I do it on the white screen and the, sorry about the resolution. It’s harder to get it to be. This is on a 4K camera, so it’s easier. I’m working on finding a better solution. So that will come out. But anyway, the question dealt with why would we focus on increasing our winners? Can you believe someone asked that versus why not just become more accurate? So I start to think who’s the person that’s asking this question? And I think it’s someone who’s probably super smart and they’re intellectually oriented to the marketplace. And if you remember, my argument was if you’re in a winning trade, so a hundred percent of the time in those instances you’re in a winning trade, how much harder is it to stay in that winning trade?
When with fourth grade math, you can calculate what your R is, right? Whatever your risk unit is, what one R is, you can calculate up to 10 R. So then the key is to figure out how to scale out of the trade with smaller positions until you liquidate the full position hanging on for as long as you possibly can. Some of you are emotionally very, very uncomfortable with taking risk home overnight or over the weekend. I’ve shown studies that tell you that that’s a profitable strategy, but you can’t beat it into somebody’s head. They have to be willing to do it. So I deliberately went and focused on increasing the winners because again, I think if you’re in a winning trade, that would be easier to do because you’re already in the winning trade. You also know how to scale. Out of a third, you can calculate what one third of your position is right now, if you’re trading say one contract, that’s a little harder.
If you’re trading two, well, what are you going to do? Take off half and leave the other one on. But I think you get the point. You’re already in the winning trade. How much of your unrealized gains are you willing to risk in order to stay in the trade? Right? Now, some of you might experiment and say, okay, I’ve got 15 contracts and when I hit three R, I’m going to sell 10 and I’ll keep five. This way. If the thing comes back on me twice, the level that I had made on the other 10, I’ll still be at breakeven. So you could back test and figure out what’s best for you. But for me, the easiest thing to make more money when I was coming up was to hold on to my winners longer. And that was emotion, that was emotional because the math was not difficult to understand. The intellectual part also was not that difficult to understand. So intellectually, if you’re an intellectual person, I think you will go to great lengths to avoid certain feelings because it’s ingrained in who you are as a person to go study. You’re probably really good at it, you’re probably really bright, and so you’ve had success in other areas of your life, and so you want to replicate that in the trading world. But in my experience, if you’re doing this and if you want to do it for a long time, you have to maximize your winners.
This is before we get to the part where there’s a certain age, and I don’t know what it is, it might be 35 to 40, somewhere in there, maybe early forties, where unless you have somebody helping you burn out this, I heard someone say a long time ago that this is a young person’s business and I didn’t agree with them at the time because I was younger. As I get older, I do think you can burn out just from the monotony of it. So we’ll talk about this maybe tomorrow in terms of taking planned breaks to keep your mind fresh or hiring other people to do a lot of the grunt work that you would have to do. Maybe read through your charts, look for certain setups and help you with that. But when I was coming up and I felt insecure about my trading, again, don’t forget, there wasn’t an inter internet there. There was nothing digital. So anything that you’re comfortable with, it didn’t exist. And I’m not even that old. But that’s how quickly things have come to pass. You remember, if you’re an institutional salesperson, how many people were using aim, right? AOL’s instant message. I mean, that’s how they asked people if they cared, if there was inventory.
And now that I guess it’s a chat program, it doesn’t even exist anymore. So I had to go to the bookstore and then I had to rely on people. And the people were very unreliable except for two people. But I had known those folks from my hometown. They were childhood friends. Everybody else was like, I can’t possibly help you because if I help you, you could end up taking my job. And so that’s kind of the thrust of why I even do this show is I’m trying to give away every morsel of wisdom that I have because no one was there for me largely when I started. There was what I kind of coined an expression, intellectual greed folks were not that helpful at all. And so not knowing any better, I’d go to bookstore and I’d start reading books as many as I could find on the how to because I kept figuring, well, if I don’t make money, it’s because I don’t know how to.
But that’s not necessarily the case because in order to make even a lot of money in your trading or managing risk, you’d only need to be kind of right. You don’t have to be a hundred percent accuracy. So that’s why I kind of poke fun at the people who talk about advanced charting packages and sniper like precision because that’s a made up marketing term. You don’t need that. It might feel good if you’re super anal about slippage and skid grant you that, but that still is. That’s your own deal. That’s your own drama. I wouldn’t let someone bring that racket into my trading firm. It’s not going to happen. So it’s a natural thing to want to study up on something, take a course, look into this, maybe find a coach or a mentor. But in my experience though, from my own trading, the accuracy thing was not the big turning point because I didn’t have to be a hundred percent accurate. I could be relatively accurate and still make a lot of money. Hence the equation from Monday’s lesson, which was the one for mathematical expectation. What’s the expected value of a trade?
Again, there’s more to that equation I want to get into. Maybe next week we’ll talk about it because the expected value of a trade also kind of tells you on average how many trades you would have to put on in order to hit a certain financial goal. So this is one way to kind of keep yourself in check if you have a big financial goal, but your trades are too small, it’s physically impossible to put on the number of trades that you would need to put on in order to hit your goal. So you have to figure out, do you have to set a lower bar because your activity isn’t going to add up, right? So I figured when we look at the expected value, presuming that you don’t negotiate with yourself and move your protective stops lower in order to stay in a losing trade longer, that wouldn’t make sense.
I know the feeling though of not wanting to get stopped because of the fear that the thing will come back. Now, if you do hundreds and thousands and thousands of trades over the next 10 years, that is going to happen. I know it is. It’s going to happen to you. And so if you know that that’s going to happen, you can process those feelings today because there’s really no getting around it. It’s just the way the world works. There’s just so many different variations of what can happen with a trade once you add the risk to your portfolio. But the thrust of the lesson wasn’t to poo poo the need for accuracy. It was though. It was absolutely to downplay it though, because I feel that the majority of you and the majority of people, even at the institutional level that we consult to their number one problem is there unwillingness to feel certain feelings.
And think about it. Imagine if you went to bed tonight, and I’ll leave you with this, where you could improve your trading returns by say 20%. So if you did 10%, you’ll do 12. If you did 20%, you do 24, but in trades that you’re already winning. Imagine if I told you that you could actually make more money not necessarily doing anything differently except holding your winners longer. Why wouldn’t you do that? So you look at it the other way. Your unwillingness to feel whatever that uncertainty is is costing you money. How does that feel? So now start to compare those feelings. Does it make you angry? Because it did for me. And I just said, well, I can’t tell you what I said because in New York, we speak two languages, English and vulgarity. And so I said a lot of vulgar things to myself like, why am I such a bonehead?
And I was already in the winning trades. I was cauterizing them too soon, meaning risk on, risk off, all in, all out, because it felt good when I didn’t know what I was doing, it felt good. But then later on I said, man, I’m working like a dog and I should be making more. At least I felt I should be making more for the work that I was putting in. So I had to look at my behavior because again, I’m sorry to keep Bo you with this, but behavior predicts where you end up. So I found out that if I was willing to feel more of the uncertainty, I actually did better. Now, the way I did it was I wasn’t trading 20 cars in natural gas in order to take those home or even to trade the spreads and take the spreads home because it spreads are a little easier because you’re simultaneously long and short to the same commodities, different expiration months. So it’s kind of like what an option player would know as a calendar spread.
So in order to take the outright directional stuff home, I had to cut my positions down to ones and twos like a fraction of what I had been trading because I wanted to experience what that was like. What was it like to take home even one contract overnight and over the weekend when the trend was in my favor and I was already in the winning trade, the in a winning trade, granted with unrealized gains. And the more I practice that you thick in your skin, you increase. If your bullseye is here in terms of your comfort zone, you have concentric circles, you have to step into the discomfort of the next concentric circle to and feel those feelings. You don’t have to do it on the same scale. Make it your own and make it messy because you’re going to discover a lot about yourself and how you behave around managing risk.
And that to me is where the money’s made. It is not about advanced charting packages. There’s no such thing in the world as an advanced charting package. Think of it like cable. You can get Showtime, HBO, O, you can get stars, you can get whatever you want. MGM plus watch, godfather Harlem. It’s a good show. And so those are all just marketing packages to create bundles. But in the world of trading, there is no such thing as an advanced charting solution. Charts or charts you can make of them what you want. That in fact is good homework assignment. Anyway, I’ll leave you with that. Just keep this in mind though, that the feelings that you aren’t willing to feel around taking risk home or scaling out of your winners is costing you money. How do you feel about being your own worst enemy? I didn’t like it, so I had to do something about it.
But anyway, please like and subscribe. If anything here has resonated with you and always remind, I always like to remind you too, if you check out one of the links below in the description, you can get the free audio book version of The Inner Voice of Trading. It’s a book I wrote in 2011. I give the audio book version away for free. It’s on me. Thanks for being here, folks, and I’ll see you tomorrow.

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This is an automated transcript

Hi guys. Welcome back to the segment that Mike and I do weekly where we go over topics, comments, and questions from you guys. Today, I kind of wanted to keep with the theme of talking about mindset and I wanted to talk about what you do in your downtime and why do you do it. Is it like a refreshing thing? Is it so kind of elaborate on what you do with your downtime.
Me, are you talking?
Yeah.
I take mushrooms and I take massive bongheads with Percy sauce. No, I don’t do any of Percy sauce. It’s too strong. And you are gja, by the way. Not me.
There’s a reason I’m ganja.
I know, but you’re not a pothead. That’s the point. I
Know. Yeah,
No, some of my guys, I don’t want to mention any names, but some of those guys smash that, I think it’s like seven 10 labs or something. They do the wax and they in the quarts and they get the burner looking thing that you make the creme brulee with. No, they smash like 86% T hc. Yeah, people
Straight up dabs.
If I did straight up dabs like that, there’s three places I would go to. I see you. Yeah. Yeah, I’d be in intensive care. So downtime, this is a good question. Downtime. So I think downtime. First I want to ask you this question too because I, you’re a hard charger. When you’re a hard charger, you absolutely have to program and calendarize your downtime. It has to be a prior, a priority. It has to be part of your trading system. I’d known a lot of guys who could trade me under the table, but they never turned off. They were just go hard charges. They were out late at night making big money renting Porsches, trying to live on Central Park West, doing bottle service, which is got to be the stupidest thing on planet Earth.
And in three years they just couldn’t maintain that pace anymore and they just burnt out. They couldn’t take it. So this is a marathon. Sometimes you feel like each day it might be a bit of a sprint, but I think if you in your mind think of it, you don’t want anyone day to define your career. You want to manage the risk. If you don’t do that, the risk manages you. And yes, you will have some career trades, but you can’t go deliberately out to make those trades because like I said in an episode, or I think it might be an upcoming episode, that if you try to make those hero trades that and you toss that coin, what comes up on the other side is you blow up. So you can’t force the hero trades. They kind of come up for you. But you absolutely have to, and I have it in my own calendar.
I actually put in every day I practice jujitsu. So I practice, I train six days a week. I know the calendar and every course I know who’s teaching. I know if I’m teaching and I still put it in my calendar because if someone says, Hey, let’s meet Wednesday at six o’clock, and I’m like, no, I got class. I could meet you after. I can meet you before. But nothing’s getting in the way of that because my downtime is intentional and it’s just as important to me as anything that I do. From the opening bell to the market closes and I’m, for me, the opening bell isn’t nine 30 coco and opens at eight o’clock in the morning eastern time, which is five o’clock where I live.
Intentional with your downtime and program that in to give your mind a break. So with that, it programs your brain to understand that that’s really important. It’s good to get away from the screens. It’s good to get away from the people that you spend time with every day and it keeps things fresh. You get a new perspective. I’ll give you one example then I’ll shut up. Jiujitsu was fantastically difficult. It was built to beat all the other martial arts and it’s just abject humiliation because you get beat up every day and it’s not fun, but you lose when you quit. So I looked at it at first I didn’t know it’s changed my life and my friends at time ganja and other close friends who are family now that stress hardens and makes diamonds basically. So I wanted to exercise my discipline muscle from another angle because I have it down with the market stuff, right after 35 years, there’s one thing I have is my discipline and my self knowledge. So I wanted to exercise that discipline muscle from another angle in an area that had nothing to do with trading, but kind of had everything to do with trading. So that’s why I took up martial arts and it’s been very rewarding experience.
Now ganja, you are a pro-gamer and among other things you’re multi-talented person, which is why you’re here because you not only are smart, but you can also execute. Gamers don’t keep the best hours as far as I can see. How do you this because you’re playing with people who, if you got a team of five people, I’m guessing maybe two people are in the same time zone.
And it’s a really big challenge. I was telling you about this team that I’m working with from Canada and they function off E S T Eastern Standard time. And I have a challenge even with them because I’ll play with them until one in the morning, but for them it’s four and they don’t care. They’re like, yeah, four in the morning gaming sessions, let’s go. And I’m like, dude, you have to understand this is one so bad for your health. And two, I can’t keep pace with this and it’s not because I can’t stay awake until one or 2:00 AM because I know that staying awake at one or 2:00 AM while being fully alert and hyper congnitive is so bad for your brain and your body is terrible, especially being in front of artificial light. I mean were touching on earlier really ruins your circadian rhythm that those are things you don’t want.
So I guess to answer your question, how do I deal with those hours and stuff? I still have to do it because it’s unfortunately, I can convince people and they’ll say, yeah man, it’s so bad staying up late at one or 2:00 AM but they do it and they’re on my team. So you know, have to play with your team otherwise there’s issues. And I’m slowly trying to make people aware of how bad it is for your health. And I mean, just to give you an example, in high school I knew somebody who was a professional gamer and I played with them a little bit and they would always message me at one or 2:00 AM after practice for them and they’d be like, Hey man, let’s play. And I’m like, all right, sounds good. I’ll hop on right now, we could play, run some strategy together. And he’d be like, hold on. We, we’d get on a call, he’d be like, hold on, give me a sec, I got to go take some Adderall. And I’m like, what? At 1:00 AM you’re taking Adderall? And he is like, yeah, I just take 60 milligrams at night. And I’m like 60, 60 is the biggest dose you can get. And it’s just terrible what these guys are doing with their brains and their sleep and all that. So
We were talking about that privately on the phone too, about, I think the word you used was neuroplasticity.
Yeah,
It’s like a big deal man. And you can’t fight mother nature. These people who are doing and taking these hormones and whatever, I think it’s really bad for their bodies until they get to a certain age. I’m not a scientist, I’m not Andy Huberman. I listen to his show when I can and he’s really a good source of information on this, but really it does bad things to you. Even ganja. And I know guys who drink in 12 diet Cokes a day. That too is so bad for your body. The non-nutritive sweeteners to me, they’re worse for you than sugar. You might as well just drink the Mexican Cokes for example, and just have the pure cane sugar. So there’s a lot that goes into being a pro trader. And even if some of you are at home saying, well I want to use one of these funding accounts and go to Apex or this and that, or maybe try to get a seat on a prop trading desk.
You have to really think about trading from a 360. It’s not just that you can come in and create alpha. Yes, that’s what we talk about. We talk about the mindset, but it also includes your sleep, your hydration, your overall diet, and what do you do for your head away from the screen, right? Because we’re talking about mindset as it relates to trading, but then there’s other things that you can do. For example, I train martial arts. I also have painted since I’m 14 this October, I will have played guitar for 50 years so I can play anything, I can hear it, I can play it. And that again, takes practice, it takes time, but it gets me away from the screen and it kind of puts me in the zone. It could also be meditative. So I do a lot of things to keep my head in shape because that part is kind of like the basis, it’s like the bootcamp if you will, so that when I get to the trading desk, so to speak, I have my mindset as it relates to trading, but I’m not bringing baggage from my life.
Like poor sleep habits can’t have, don’t, I don’t drink a lot of caffeine. I don’t want to be amped. The reason I don’t like drinking alcohol is because, or even smoking marijuana, even though it’s legal here or taking edibles or any combination of it, because I am willing to feel all my feelings. I don’t have to check out. I don’t need some type of medication to cool off or to get stoned like that. Cause I don’t want to escape. I love my life the way it is. In fact, I want to bring more of my life. I want to amplify my life. So doing things that could be mind altering. And I’m not judging anybody, I’m just saying for me, I don’t want any type of escapism. At best I’ll go meditate or do yoga, which in and of itself is a moving meditation. But for me and for the people that I would work with, people that I would hire from the partners that I would have, you can’t ask somebody what their age is or what their gender identity is and any of that stuff.
But you can pick up a lot just from listening to them. And if they don’t have the right lifestyle choices, I don’t even look at them as candidates because so much of what you do outside of trading actually impacts who you are as a person and how you perceive risk, how you manage yourself under stressful situations. So it’s probably more information that you were thinking about. But for me, where I’m sitting, I’ve seen people come and go, people who had enormous amount of talent, people who I are fully, I’m looking you all straight in the eye right now. People who could trade me under the table and they couldn’t take it because they didn’t set themselves up to win. And it’s a huge thing. I mean that’s why I speak about the mindset as much because the how-to part of trading, once you figured that out, you’ll make small amendments, you know what I mean?
Over time because the market’s always going to morph. So you have to sometimes tweak your position sizing a little bit or this and that or adjust your entries. But it’s not major turn on 180 s, right? It’s not that major. It’s a, it’s small adjustments. It’s trimming the hedge so to speak, as opposed to growing a whole new set of hedges. So I feel like now you could talk about cycling too, that’s physically demanding on top of the mental side of it and the actual tactics that you need from drafting to man, you were telling me behind the scenes about that stuff, the amount of preparation that goes into the race. The race is almost the easy part on some level it’s the preparation that yeah really sets you apart. Which makes a lot of sense because how do you get to Carnegie Hall? Practice, practice, practice.
So a new piano player can go play Fran’s list who wrote so much complicated music that he was basically only, it’s about risking real money. Five, 10 bucks a trade doesn’t have to be a lot by one, share by one mini micro contract. Doesn’t matter to me. That’s practice. And you have to practice, you have to be willing to get beat because in the way I look at it, the first two years of your career, you’re really amateur status. You’re not worried about becoming pro in six months because you’re not ready to, no one is, you’re not ready in six months. You don’t know enough. You haven’t seen, you lack the maturity. And I don’t mean you act like you’re immature, you’re 14, I’m saying you’re acting because you haven’t seen enough market cycles. You don’t know what it’s like to trade in good markets and bad markets.
So to me, when we talk about the victorious and then seeks battle, the winning part has everything to do with preparation. And that means mental preparation. It also means physical preparation so that you have the mental and the physical stamina. And that’s a more true, if you’re on a short-term trader and you’re sitting in front of the screen all day, you have to have the stamina for that. And you can’t be drinking diet Cokes at two in the morning playing video games thinking that you’re going to get up at six or seven and do that. Yes, you can get away with it for a little while, but that’s not sustainable. It’s absolutely not sustainable.
To touch on that too, it’s, I kind of jokingly said I don’t deal with it, I go to bed at 2:00 AM I don’t do that every night. And it’s about realizing that it’s not sustainable. I have a self-awareness like, hey look dude, it’s been two days in a row. You’ve gone to bed at 1:00 AM you’re not doing this again. You know, need to fix this now or you’re going to have deleterious outcomes that you don’t want.
And that’s good use of the word deleterious. I love it,
Dude, you knows an
S a t word dude, I
Love that course. It’s an s a t word, you’re talking former pre-med guy here. But just to kind of touch on the cycling and the gaming and stuff too, and how you said preparation is key. The thing that set me aside from literally everybody else in cycling and in professional gaming as a whole is the fact that when I decided I wanted to do it, I sat down and I told myself, I’m going to outwork everybody. I don’t care who you are, I will outwork you. Yeah, I will outpace you. It might take me a year, it might take me two months, but I will eventually catch up to you because I worked way harder than you. And the thing is, is like that’s great. You can say, Hey, I’m working hard and you can even do it. The recovery is really hard. And you know, have to learn that balance and say find your recovery strategies. What is a recovery for you
A hundred percent. And you need to have that mapped out ahead of time. It’s not you. I mean look, yes at first you’re figuring it out on the fly because you’re new and you don’t have any experience, but that point that you just made is worth the whole price of admission. To me that’s very valuable stuff. I think I saw something on Instagram recently where I was scrolling through and I was listening to Kobe Bryant rest his soul talk about for his first two years he came off the bench mamba mentality, came off the bench and he said, and I’m paraphrasing a little bit but you’ll get the jux of what I’m trying to say here. He said he was going to make it, he was going to outwork everybody and practice so hard and increase his talent to the point where he put his coach in the spot where he had no choice but to play him all the time.
So he didn’t play like victim and he was a prodigy, he was very good player at a young age. I think he went pro like 17, only Wayne Gretzky as far as I know when pro at 17 for the whatever, when he was in the W H A before they moved to the N H L. But the point is, all these guys that you see, who everyone likes to quote and who everyone likes to emulate and parrot, you have to be able to do it. Now granted you have to do it your way. You probably can’t do it the way Jocko did it. You might not be able to do it the way Goggins did it or any other of these famous people that you like to quote, but they can’t do it like you. Right? Exactly. Doesn’t mean they’re better. They’re popular, they’re popular, but you know, can do it.
And that’s the beauty of it is that you get to do it and you get to make it your own. And Kobe was famous for that. I remember another Gretzky’s kids went to school with my kids and he told a story about how his late father Walter was watching some preseason work and I guess Wayne wasn’t skating hard, which is hard to imagine. But nonetheless the father knows best because he’s coaching the kids since he’s three years old. And he said, listen, if there’s a kid who’s going to buy a ticket and he is going to spend 50 bucks and he is going to come from our hometown in Branford, Ontario to come watch you play here in Edmonton, Alberta and you know, have to skate out of your skates, basically you have to skate every is more important than the name on the back. But you have to execute, execute every play. And I think that’s one of the reasons why I can’t say the number of the percentage, but I have a sense from everyone that I’ve known and I’ve worked with and I’ve worked for and or worked next to or kind of observed how they work. They might have been in different companies, different desks. The preparation, the 360 degree preparation was absolutely of paramount importance to longer term success.
Folks who started in 95 and bought tech names, by time 2000 came, they were up 50 fold, but they stepped into a really good market. If you stepped the s and p in 66, you lost half your money over the next two years. So what happens is they got used to making a lot of money, especially the guys who sold put contracts. Why? Because they markets would go up, the puts would expire and that worked until it didn’t work anymore and they got used to a certain lifestyle. So my point is, is that this business trading is like any other profession. And when you sit ganja and I talk about setting goals, that’s the number job number one. It’s like what do you want out of trading? How do you want it to serve you as a human being? Do you want to feel part of something bigger than yourself?
That’s cool. There can be a fraternity sorority kind of aspect to it, but that’s not typically the motivating factor that’s going to help you create the best alpha that you can make. Is it because you think there’s some kind of status traders and otherwise that doesn’t exist, right? It’s very subjective, it’s not a higher form of life, it just works better for certain people. So how do you want trading to serve you in your psyche and how do you want it to affect your soul but also what is it that you want your money to do for you? I know people that traded and made a lot of money, but because of the tax treatment, depending on where you live on short-term capital gains, they actually took all their money and converted into multifamily homes because they can generate cash flow and not get a tax bill because of the depreciation.
So they really knew investment finance. It wasn’t just all about the trading. The trading was part of a bigger plan. What does your trading mean to you when we do consulting? That’s question number one. And we don’t even get to lesson number two until you can get absolutely clear. And I don’t care if these people paying me a hundred grand a year, we don’t go to lesson two until they can absolutely define what is their, why do you do what you do? And it’s hard for some people to answer cause they speak about their feelings, but it’s a disservice to them to let them off the hook. And so bringing it back to the question, this is where what you do in the pre-market, what you do in the aftermarket that’s not trading related. When I was in school in New York City, I was so busy between study groups and reading books and typing papers I did and plus I worked two hours a day in a work study jobs, how I got my start in commodities because my school was the third largest landlord in all of Manhattan that I couldn’t find a way to get my exercise in.
So what did I do? I got up an hour earlier and jumped on my bike. It was a Bianca, you would appreciate that being a bicyclist yourself. And I would go and I’d ride because the loop in Central Park was closed at the time to traffic. So you could roller bladers and the skateboarding wasn’t that big then, but roller bladers and bicyclists would have free rain on the park. You just have to watch out for one another. But there was no vehicular traffic, no cabs, no otherwise that could drive through the park then. So I’d get up 5 36 in the morning, jump on my bike and go to the park and do the big loop twice and then go back, put the bike away, shower, shave and that whole thing and get ready to go to class because if it’s important to you, you have to find a way to get it on your calendar. And I felt that my ender fins and my energy, I actually slept better. And I know that’s something that a lot about because your brainiac that when you exercise it affects your brain and it affects your body in a whole bunch of ways. So why don’t I turn it back over to you and you kind of talk about your health, your diet, your sleep and your exercise, your endophytes, the dopamine stuff and all that as it relates to your overall health.
Yeah, no, for sure. And look, I mean I’ll tell you guys a little secret right now, if you are
Steroids, it’s all about steroids and H G H and it’s all about steroids and Percy sauce.
Well, so I used to manage athletes. I still have a couple of ongoing clients that I work with typically like high profile guys and I do manage steroid cycles and I do work with some of these guys with really, really niche optimization. And the secret to having the best cognition that you can possibly have is two things, working with hand eye coordination and high intensity interval training, cardio. Those are the two best things. Study backed. So you can look this up, it’s not like I’m pulling it out of the cabinet or whatever. It’s really amazing how you can optimize your cardio to just work for your life. Cardio is the secret to living longer. It is the best thing you can implement into your life. And people like Jim Bros, they shit on cardio. They’re like, whoa, I’m not going to kill my gains. Well the reality is it’s not going to kill your gains, it’s going to prevent your organs from having fatty deposits and stuff like that.
It’s also going to optimize blood flow to literally every area of your body. People think it’s just to your legs and stuff, but it actually has wider effects downstream cascades that result in more blood flow to the brain. And that early activity, especially if you can manage doing your cardio in the morning is so beneficial for just your circadian rhythm. So having exercise implemented reasonably early in the morning, if you can do it after an ice bath, wait to have your caffeine 90 minutes after you wake up because you literally don’t have the neurochemical signaling going on to actually have that caffeine work for you, it ends up working against you because caffeine doesn’t make you awake, it actually binds to the receptor that makes you tired and says, no, no, no, you are not going to be working. So with that said, what I ended up doing with all of the knowledge that I have on biohacking and biochem, I worked out a way to be as good and as alert as possible when I’m playing games.
And I did this for cycling too when I was a cyclist and it, it’s really beneficial if you just sit down and think what can I do to change how I’m going to feel in the day? Number one thing people don’t do vitamin D supplementation, huge ginormous measure how much sugar you’re having in a day. And I’m not talking about fruit. If yeah, if you’re really overweight then how much fruit you consume will affect you or if you’re trying to get super shredded, but I’m talking about how many cokes do you drink a day if you’re having diet Cokes, understand if you’re going to drink a Coke with sugar in it, having a diet Coke in my opinion is a better choice. But that doesn’t mean if I’m not drinking soda, it’s okay for me to drink a diet Coke. So the reason all of this is important is because it really just relates to how you feel and how you feel dictates really where you go unless you are so hyper cerebral and can say I know how I feel but I’m just going to ignore it anyway. And even if you say that you know are still subject to how you feel, if you wake up feeling great, you’re like, man, I feel great, I’m going to kill it today. You probably will. There’s a good chance you will.
So I have a lot of follow up questions because basically anything that you put in your body, whether it’s food or liquid, can be a type of a drug. And I don’t want to get into obesity and people loving themselves with food. I know that there’s a lot of mental stuff that goes on with that. So I’m not picking on anybody, but I do know that people can love themselves with food. And so a crazy nerd like me and you study your behavior, everything that you do, if we are pleasure seekers, then everything that we do in my humble opinion is either going towards pleasure or avoiding pain. I don’t medicate because I’m on. I am willing to feel every feeling. There’s nothing that I’m afraid of because only I can beat myself. You understand? I don’t care about other traders and how well they are.
Not that they do, I’m competing against myself. I’m a team of one. I got a lot of support, but ultimately I’m responsible for everything that happens in my life. You’ve heard me use the expression, we live in a paradigm of personal responsibility. So you have to accept if you want to be, see, here’s the thing, if maybe you don’t want to be a pro, but if you think that you’re going to be a trader for 10 or 20 years, you still have to do the things that pro traders do because otherwise you’re not going to make it. You’re not going to last long enough. So going back to what you said, vitamin D and something that Andy Huberman, I call him Andy because we’re just on that level. He said something about getting natural sunlight in your face, in your eyes at like 8, 9, 10 in the morning or something. Yeah, talk about that.
Yeah, kind of like what I was touching on earlier, being awake with that light in your eyes at 1:00 AM is horrible for your body. It’s terrible for a number of reasons there. There’s a study coming out that’s kind of elaborating on that and it really spoke about how if you’re exposed to computer screens or any type of light past 1130, and you can mitigate this with brightness, people thought it was like blue light turns out it’s actually not. It’s just a level of brightness and you would have to have it subvisible levels of brightness to be on a screen past 1130. But basically what this study says is people who are on screens past 1130 have decreased. They feel worse as people, they’re dopaminergic responses have been dampened to the point where it’s like pseudo depression for really hours of the day. Yeah, absolutely. A hundred percent. And I can
Speak up, I wonder what that says to folks who trade and sit in front of computer screens, not just one, I have 2 24 inch max here, but some of these traders have eight mo six monitors in front of them putting, showering them with this light that you talk about.
Yeah. And it’s really bad at the end of the day if you’re doing that at certain hours of the night, it’s like, yeah. And what about
Those glasses that you can wear the anti glare, do they help or is that just marketing bullshit?
It’s just marketing bullshit mostly. I mean,
Unbelievable. Yeah, and this idiot sitting there,
Well,
With his glasses on, I
Will say originally it was based off of good data. It actually was based off of good data. But
Yeah, silver, we Lance Armstrong’s blood test. But go ahead.
Exactly. But now we have the understanding of, hey, it’s not just blue light. Actually, it’s not in a specific wavelength, it’s actually just the brightness and intensity of the light additionally, which I see, which makes it challenging for people like me who try and biohack this stuff to speak specifically. I had a client who wanted to read late at night and he had trouble because it wasn’t bright enough, couldn’t we had a light solution for him that was based on some of the older studies. It didn’t work. It literally just didn’t work. He couldn’t read. He’s like, my eyesight sucks, and then if I wear glasses, that kind of ruins the whole point of what we’re doing here, right? Yeah. I’m like, yeah. So basically with all this in mind, if you want the perfect day, you should wake up early in the morning, preferably before eight o’clock.
I know that’s not early for some people. You should go out in the sun, have about 30 to 45 minutes of sunlight in your eyes. That doesn’t mean look directly at the sun, please don’t do that. It should just be on your skin synthesizing vitamin D. And also you should have it visible to your eyes to the right. Yeah, just the reflection. Just the reflection. And then make sure you eat and make sure if you can implement ice baths. And saunas are great too for closer to when you go to bed ice baths in the morning and yeah.
Oh, let me stop you there for a second because you mentioned something in a few minutes ago when we were talking about exercise. What’s you want to do your cardio or your exercise before the ice bath or after?
That’s kind of a tough one. I actually don’t really do ice baths on certain days of exercise. So if I’m doing weightlifting, I literally won’t even do an ice bath. So if I’m doing cardio, I will try to do an ice bath before. And some people are like, well, what’s the whole point of that? Doesn’t it help recovery? Yes, it does, but it also dampens the amount of muscle tissue that you can accrue. And what you can do to kind of mitigate that is take your ice bath before warm up naturally about an hour and a half is usually my experience. And then do your cardio workout immediately after get in the sauna for 20 minutes at 180 degrees because that actually accrues about 50% more slow switch muscle fibers and would’ve, you would’ve had them anyway. They just disappear because of the way lactic acid kind of circulates and destroys thing. You have destroys things, you have weakened metabolic function. There’s a lot of different reasons for it, but it does encourage muscle protein synthesis for both fast twitch and slow twitch, primarily slow twitch.
This guy’s 20 years old folks, these are actually, you shut up, you can’t talk anymore. You’re too smart. Okay, these supplements, do I want to take those with a meal? Do I take ’em in the morning or does it matter? How do I administer that? Because you can buy that at whole food. You can get that anywhere, right? I mean, it’s just a over-the-counter solution.
And I take vitamin D that’s in fish oil. They’re called solar gems. They’re made by a specific company. I really like them, not because I am sponsored or anything, but just because having those fatty acids in your diet is super important and people don’t really get enough of them. So taking
Vitamin, those are the omega-3 fish oils you’re talking about.
Yeah. Yeah.
Those ac. But that thins your blood if you take too much or
Yeah, but it, it’s great for a number of reasons. So omega-3 S in general are really good for your brain. They’re super positive for your brain. And vitamin D also does the same thing, right? It’s really good for your brain and you want to take it early in the morning because if you think about it, if you take your vitamin D at eight o’clock at night, yeah, the time it gets absorbed into your body, your body’s like, great, it’s morning time. I’m getting sunlight.
Oh, I see.
Yeah. So then, then your body is trying to go to sleep and it’s just confused.
So folks, as you can see, this stuff can get as deep as you want and you can make things over complicated. You can keep it simple, I guess is to set up a protocol that you can execute consistently because the consistency is your model. It’s a little bit of the how-to and it’s a lot of psychology and emotional intelligence and you want to be able to replicate it day after day after day and make it habitual. All of your habits are your make up your paradigm and you want it to be able to replicate this day after day after day with and make it almost automatic because then it becomes habitual.
Then everything that becomes second nature and then you can build off of that. So if you start small and pick one area of your life, then by all means you can certainly expand. I think with younger guys that I speak with, they want to become Paul Tudor Jones in three months and it’s just not practical. Enjoy the ride, set yourself up to win. Because if you get this business down, you’ll live a life nobody else. You’ll have liberty, you’ll have money, you’ll have freedom, you’ll be able to come and go as you please and do whatever you want and not have to answer to anybody.
But you have to prepare for it. And it’s so not about candlesticks and it’s not about cup and handle patterns. All that stuff is important, but there’s so much more that goes with it that you can’t necessarily rely on any one thing. So for me, success is something that you can plan for. You make up in your mind what it is that you want to do. What do you want your money to do for you? How do you want your money to serve you? So when you have deep emotional meaning attached to this stuff as opposed to I want to make a hundred bucks a day, or I want to make another client wants to make a million a month. Those are just numbers. And that’s, to me, when you just pick a number, it’s probably, this isn’t scientific, but to me, when you just say, I want to lose 10 pounds, or I want to quit smoking, or I want to make a million a month, this is why all those New Year’s resolutions never get done and people don’t even follow through beyond the January 31st every year. It’s because there’s nothing emotional attached to the process to get what you’re endeavoring to get. Some of these people are actually just writing stuff down to give it to the boss to get the boss off the back. It’s like, yeah, I’ve got my goals here, go away. But for me, you can manifest everything that you want. That’s how we coach to people is be clear about what you want.
Because if you don’t, likely things from your subconscious are going to be dictating your behavior. So that has a huge impact on where you end up in life. That’s why you want to be hyper-conscious of everything that you do. And it’s a lot. It’s to, but you start small and you build upon it. My big takeaway is be aware and conscious of everything that you do. How do you spend your time? When are you going in fifth gear? When do you downshift to first gear? When are you coasting? Because it’s all good. You just need to know what the mixture is, what’s the recipe.
Yeah. And I guess to add to that and sort of in conclusion, Mike has a great point. Ask yourself why. He mentioned this to me, and you kind of hear it a lot in general. It’s like, well, wouldn’t you want to know why you’re doing something? It kind of seems like common sense, but people almost never think it through if you actually ask them. And when we started doing this whole thing and working on the podcast and episodes together, I was kind of plateauing on my experience as a pro gamer. It was really disheartening. It’s hard to find a team and I kind of felt like, man, it’s so tough to keep doing this and to keep doing the level of effort. And then I heard you say, why? What do you want your money to do for you? And then I asked myself the same question about why do I want to be a pro gamer?
And the answer I gave myself was because I know I’m the best and I will eventually be out in front of enough people where they can see that. And that really kind of rejuvenated my whole experience and took away some of the, I guess the toil of it. It’s a lot like it’s a lot of work. And when you develop your routine, I guess if there’s a really big takeaway from this, make sure you implement downtime, make sure what it is and ask yourself why you’re doing stuff. And also, if you put those things in place altogether, you optimize your recovery your day, you schedule your downtime, you don’t just let it drag on. Eventually you will outpace people and it’s just going to be that way. It might take a long time, could take two months, who knows? But I can tell you one thing for certain, the reason that I am where I am at right now in video games is because I made a sustainable thing. I made a great schedule. And I can tell you for a fact that there’s at least 30 people who I started out with who were like, I want to be a pro gamer. They wanted to do the same thing. They’re all gone now. They couldn’t keep up.
Yeah, it it’s true. Trading is about life in many ways. It’s about jujitsu and trading are actually very close. Don’t get submitted, don’t get tapped. Play superior defense. That’s the name of the game. So can I tell people a little bit about what you do or is that okay? Or is that kind of ob out of bounds? Of course. So Brandon’s expertise in the gaming space comes down to Valant and go sees, right? Sees go,
Sees go, yeah,
See us go. Which is amazing, right? Because we should do an episode just on the economy inside and the skins and all that. Cause it’s very fascinating stuff because you’re kind of a traitor inside the game. Now, not only he plays all the different roles and he is also coaching people. So this is a guy who knows competition at a very, very high level and knows what it takes. So I would listen to him. He’s a very, very bright guy and he has a lot of wisdom to me. He’s like 20 going on 40 in terms of wisdom. He’s beyond his years. Don’t let your free time just happen to you in your schedule. That’s how a lot of people do it. They have all their stuff that they got to do and then the free time just kind of happens in the middle of it all.
I think that’s the wrong way to go. And I’ll challenge any prop trader guy, any guy who runs a desk, man or woman to tell me that I’m wrong. You have to build this in and make it important. It has to become a priority because the game, if you’re going to put the work in to succeed in this business, if you can succeed, yes, of course one or two years, it doesn’t say a lot because you might be in a really good market and not know it, and it’s really more of the market than it is you. But in order to do this over a longer period of time, you have to set a pace that’s sustainable, right? Folks that run the Boston or the New York or the LA marathons don’t go breaking out. They break out of the gates to get into the leader pack, but then they have to set a pace and even biking.
Everyone sets a pace and you have to set your own pace and own your time and know that it’s your time. You get to decide how you want things to go. It’s not what happens to you. You get to decide how many hours you want to put in on the desk. You get to decide. I know a guy who trades gigantic money and he spends two hours at the open before the open and into the open, so around two hours in the morning and then he comes in for the last hour of trading, whatever happens in the middle of the day does not care. And he goes out and does stuff and he’s trading wood, man. I mean, the guy’s got size. So you get to design it exactly the way you want it. You just have to not be lazy and get super clear because what you’re witnessing other people do isn’t necessarily what’s best for you. It’ll make you fit in. You wear your blue shirt and your khaki pants and your boat shoes and I get that right? But at the end of the day, that’s easy to do. Anybody can do that. So plan for it, build it into your life and own your time because it’s yours and you can carve it out of stone exactly the way you want it, have it and design your life the way you want it.
I know we’re running a little long here, so ganja, I’ll turn it back to you.
Yeah, I mean, I think that’s basically it. We touched on a lot of really great points today and we have some more topics to cover in the future as far as that. I mean, thank you guys for watching this episode. Really appreciate it. We will be back next Wednesday as usual, and make sure you like and subscribe. Press the bell for notifications, all comments, help the algorithm as well. And thank you guys for watching.
Yep. Thanks everybody. Appreciate it. I’ll see you. See you tomorrow.

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Hi everybody, it’s Michael Martin. Thanks for being here. So yesterday we talked about some pretty deep stuff. We looked at the actual math around your trading, not the hypothetical stuff, but the actual results from the trades that you did. A lot more can be said about that data, but I was answering a question I think about accuracy, right? Someone said, how can you help me be more accurate as a trader? So look, yeah, if you got 10% accuracy, you need your winners to be many multiples the size of the losers given those winning percentages. But like I was saying, you can definitely go a long way by learning how to increase your winners. Now, if you’re million dollar trader, and that would mean risking who knows what, 20 to a hundred k of capital of unrealized gains, for example. You can always try that on a smaller scale just to see how it feels because ultimately if it doesn’t feel good, what are you going to do?
You have to find a way to make it feel good. You have to get, find a way to get comfortable being uncomfortable. And so maybe doing that at scale of where you are right now is kind of hard to do, but you can certainly envision it if you tried it on a smaller scale just to see how it felt. Because ultimately you do have to make friends with those feelings. And if you’re not used to scaling in or scaling out, I don’t typically advise scaling out. If the number where your protective stop was is hit, time to go, you don’t want to negotiate with the market, because in my opinion, you’re always going to lose and it’s always going to take advantage of you, right? Because you probably mean well, right? You’ve got good ideas around all of that. But what happens is if you start to negotiate with where your protective stop is, it’s really the party’s over.
It’s time to go. Your timing was off. Maybe you got some bad luck. Maybe your analysis could have been off. It’s probably not likely analysis if you’re already a million dollar trader or you have several million line of credit with your hedge fund or prop trading firm. The key thing though is to get comfortable doing best practices, and even if you’re a shorter term trader, say swing trader, you can still find room to hold onto your winners for as long as possible, even part of them anyway. Selling winners admittedly, is probably the hardest thing, right? It’s like when do you know the move is over and they say you can’t go broke taking profits? Well, that’s true too, but you know what? If you were in trades that you could have made, say, you know, doubled your money, but if you had stayed in other winners, you might have made 160%, and that’s kind of material.
So I think the goal should be to optimize the process by looking at your winners. Now, when I speak to folks about this and then you revisit with them and you say, Hey, what’d you, what’d make out of that? What’d you end up doing? I was thinking about it, but I never really got to pull the trigger change stuff. Ultimately, your behavior, your sum of all your habits, oftentimes referred to as your paradigm, and if you allow yourself to say, be lazy or unwilling to feel the feelings that you need to feel in order to make those changes, I look at that as emotional or a spiritual type of inflation on your goals because it’s dragging and holding you back from what you could be doing. So I don’t want to say throw caution to the wind and all of a sudden become completely fearless. I think most traders are probably risk averse in that they’re not risk lovers and they’re not risk. They know they have to put on a requisite amount of risk in order to get the return. We’re going to talk about getting return setting goals using Kelly criteria and all this and that. It’s an old school way. It’s nothing new.
So the key is making the attempts because the behavior part is what’s going to drive the change. Admittedly, it might not be easy to do in the beginning, so you have to try it smaller, right? Because you’re used to doing things a certain way. So if nothing else, there’s a comfort zone there. So now you’re going to shake that up and put new criteria on. So I wouldn’t let the inaction of your goal hold you back because that is a form of inflation when you allow yourself to just haven’t gotten to it. To me, when I hear that, it means that you weren’t really ready to feel those feelings, and the best traders in my mind are the ones who are willing to feel any feeling that comes up because they’re all trying to teach you something, right? Doesn’t have to be monumental, doesn’t have to be earth shattering, but it’s giving you some feedback on your behavior and ultimately you.
That’s the only thing that you can really control if you’re already a pro, is your behavior, right? That’s what you do. You stick to your discipline. Did you win the week? Did you put in all the orders that you wanted to put in, right? Because you’re powerless over the results. The best thing you can do is just follow your rules. But that’s why it’s important to know at least do they have expected value, positive expected value. It’s also good to know what’s your drawdown ahead of time, because the last thing you want to do is start to freak out when you’re under greater pressure in the drawdown. So plan for this. Take the action because the growth can really help you perform better and also get you to a spot where you can become more comfortable in a new methodology. Then you can grow from there so they get comfortable in the discomfort because that’s where the growth can be. And it doesn’t mean be reckless. You can do this on a small scale, but I know enough about my own behavior that when I don’t revisit my goals or I don’t make sure that I’m marrying right, the fancy word is praxis, where you marry belief with your behavior. That’s when you’re in the zone. It’s when you’re like, nah, I’m going to take a day off, or I’m going to coast. I’m going to do this and that. Now you might want to reconsider what your goals are,
Right? Because you can’t just state your goal. You actually have to take the action. That’s the thing that I’m trying to get across, is that it’s the action. Even if you’re fumbling taking of the action is going to help you learn about yourself and the process a lot more than sitting around in theory theorizing about it. You see, it’s important that you actually step out of your comfort zone and take a step in that direction. Could be completely smaller scale, but that to me is much more valuable than buying yet another book or doing more research or doing things on the theory side, because we don’t get paid to know stuff. We get paid to execute. So in order to improve your results, you have to learn to execute. Maybe not better, but differently. See, anyway, appreciate all your feedback. Keep the comments coming. If you like anything here, it’s res resonated with you on a deep level, please consider liking and subscribing. I get a good bunch of data, and then I can create more content that’s better for you, and I’m not wasting your time, especially don’t want to waste my time creating videos that no one cares about. So far, so good. So I appreciate your feedback. Thanks very much for everything, folks, and I’ll see you tomorrow.

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Hey everybody, it’s Michael Martin. I hope you’re doing very well. So I get some really good questions from everybody who watches and I really appreciate it. It’s, it’s very, very good. Gives me some feedback, maybe it helps me understand where I wasn’t clear on certain things, but it also helps me get to the heart of the matter where I can really answer a question such a way that it makes a big difference for you in the way you interpret what I’m saying and how you can take it and put it to work for you right away. So comment on one of the videos was how can you please help me get to be more accurate as a traitor? And at first I was just going to write something back then I said, nah, let me think on it. Then. It occurred to me that trading isn’t necessarily about accuracy, it’s about expected value. The problem is the way we learn and the way we’ve been conditioned to learn. So when you think about the expected value of a trade, it definitely helps you see and visualize where what it is that your edge is or where your edge is. So the formula for calculating expected value, it’s probably pretty simple. It’s all over the internet. You might have seen it in a course that you’ve taken. It doesn’t take a lot.
It starts with the winning percentage. And with that, you’re going to multiply it by the average win and then you’re going to subtract your losing percent. And then what it is you lose when you lose and that equals the expected value. So when you do enough trades, you can keep the data and calculate what it is where your edge is at. So I’ll use a hundred as an example. It’s not a big number, but it’s enough to kind of see. So say after a hundred trades, you find out that you have 40 wins and you have 60 losses. From an academic standpoint, that’s an abject failure. If you’re batting average, if you’re in B American baseball, you’re going to the Hall of Fame because you have Ted Williams style numbers. But if you’re looking this as a pass fail, you can think, if you think of it academically that you’re somehow a failure.
I don’t believe that’s the case, but you might be able to see that yourself. Depends how you process information. So the question then becomes how can you make money if you only win 40% of the time? And I chose 40% cause I didn’t want to say that you have coin toss odds, meaning 50 50. I wanted to show you that you can lose more than half the time. You win less than half the time, but still make a lot of money. And it comes down to then this ratio here. What is your average win to the size of your average loss? What’s that ratio? So if you used something like three to one, which means my winners are three times the size of my losers, it means also that one winner pays for three losers. That’s another way to look at it. And now that we have these numbers, we can kind of plug them in and just come up with an example and go from there.
So my winning percent is 0.4, and when I win, I win three times. Whatever my risk unit is, right? That’s this number. So then what’s my losing percentage? Well, it has to be the compliment of what I win. Cause I can only have a hundred percent of everything. So when you think of these two numbers, they have to equal to one. The way I’ve written it, right? Point six is 60%, right? Point four is 40%. So you could look at it however you want, but it has to compliment each other in that it adds up to a hundred, right? Then you have the relationship between your winner and your loser. Whoops, I still have the damn eraser on. And that would be this ratio here, three to win, three to one. You see that? And so when you start to think about the accuracy game, you might be missing out on all the other moving parts because now I have one, I did it again, I have 1.2 minus 0.6, and so therefore my expected value is 0.6. And so you can use, when you think of this three here and this one, you can use R, you can use dollar signs, you can use percentages. It all, it depends on what the best orientation is for you. So the question came in and said, Hey, can you help me be more accurate with my trading? And normally I kind of can. I’m sure that there are things that I can convey to you.
So this comes in on the sneaky way you can undermine your trading profits. So that was the video and the comment came in from Stanford oh eight, Stanford with an M, not Stanford like the cardinal. Thanks sir. I hope you give us some insights on how to improve trading accuracy. So I want to change the nature of that question and think about, I can hope you can give us some insights on how to have a higher expected value or how we could make more money, because trading accuracy doesn’t necessarily mean making more money. In fact, the systems that I see that are really accurate, like 80, 90% accurate, they’re only accurate for small gains. I don’t see 10 to one or these crazy asymmetric payoffs with a 90%. You see, you’ll only know from trial and error because it’s not theoretical and it’s not absolute.
In other words, I can’t give you an absolute rule for this that would affect your trading. You have to go through trial and error. That’s why when we look at this, it’s a real number. It’s after the fact. So just like in paid traffic or advertising campaigns, your first month, two, three months, whatever it might be, isn’t necessarily to get results from your paid traffic to harvest the data to see what’s working and to eliminate what doesn’t work. So then you can go, I don’t do paid traffic, but I’m just using it as an analogy. That’s how you get to refine things. And so early on in your trading, you need to be able to go take the chances that you don’t want to take because you might not want to feel the feelings that are necessary with losing money because it was hard enough to get place.
So let me clean this page up a little bit. And anytime you have expected value that’s greater than zero, then that’s a system that’s worth following. That’s the rule of thumb. The higher the number, the better. So when you start thinking about accuracy, what you’re really thinking about is this is your winning percentage. How can I increase my winning percentage? Because everything else being equal, if that goes up, then my expected value value’s going to go higher. But I think to get accuracy improved upon, it’s actually harder because you’re powerless over what the market does. The best thing that you can do is put on your trades according to the rules that you follow. And I’ll use rules if you’re a discretionary chart reader and you have trading rules that you follow, whether it’s pattern recognition or pullbacks or stuff that other people teach, or if you’re purely systematic, I kind of refer to that inter system because I know people that are discretionary chart readers that can get quite robotic about it, meaning they don’t let their emotions interfere with their judgment and they can execute time after time.
So when someone can do that, it’s very close to being a pure mechanized system. And they don’t need the computer because they have extreme levels of discipline and they don’t let their emotions sidetrack them and knock them off balance. So if you’re an intellectual person, you’re absolutely want to increase your winning percentage because it feels good to be right. In America, you go to school from the age of six to 18 that you have to for the most part. So that’s 12, 13 years, whatever inclusive, where you have been graded on accuracy. Every true false quiz, every test, every paper, every fill in the blank, every term paper, every midterm, every final was graded on accuracy. And the more accurate you were, the higher the grade. And that happens systematically and in a very hierarchical way over years 12, like I said, 12 years, maybe 13 for some of you.
So that’s ingrained in your brain. So you’re always, your default is to let me read another book. Let me take another course, let me get another tool. Let me add another indicator, which is kind of what got me thinking about this in the first place was that you don’t need another indicator if you’re willing to feel all the feelings that will come up from your trading. You can’t insulate yourself from losing money. What you can do is make sure that when you do incur losses that they’re small, they’re paper cuts. Because what you don’t lose, you don’t have to earn back. Two. When you think about, whoops, I made a typo here. Pardon? Pardon, pardon me folks. Sorry about that. This is the average loss, I apologize. Sorry about that. So your average loss on some level, if you’re very systematized, even though the dollar science might vary small amounts, if you’re risking say one half of 1%, then every trade should be the same. So in that case, your average loss should also equal your largest loss because you always have it set with a protective stop no matter what.
Now, even if you’re using a simulator and you haven’t done trades, you might have found that these types of results had come up for you in your simulation. And the key one is this ahead of time that 60 out of a hundred trades are going to lose money if you followed the rules and the back test is positive because you have to take both. You have to take the thick with the thin. It would be great if you could just throw in, cast your fishing rod a hundred times and pull something in a hundred times. It doesn’t work that way though, as I’m sure you imagine. So one of the benefits of back testing is it gives you a reality check and shows you that you are going to lose money if you have a good simulator. It could also tell you how big the drawdown is and what’s its duration, what’s the magnitude, and how long is it’s going to last. I’m down 14%, it’s going to last five months. I don’t know what it is, but that could be helpful for you. Why? Because when it happens to you in real life, then you don’t have to freak out. Why? Well, because you can see it ahead of time. You can see that that’s a reality.
So then you go back to the drawing board and you say, well, okay, well I don’t like that. I’m going to have to cut this number smaller, keep my losses even smaller, because if everything else is equal, my winning percent, my average win, and even the frequency with which I lose that can all stay the same. If I decrease my average loser, then my expected value goes higher. You see? And that becomes another way that you could make more money. So I wouldn’t think there’s a few moving parts here that discuss making money in trading only one of which is accuracy, which coincidentally is in the equation for calculating expected value. So again, accuracy is important, but as you can see here, it’s not the only thing because if my winners are 10 times the size of my losers, I might be able to have a system that I’m only correct maybe 20, 25% out of the time. Now, how would that feel if you were putting on five trades where you knew four out of five of them were going to lose you money?
That’s a whole other type of emotional constitution that you have to process. So the easiest thing for me, let me clean this up a little bit, get some of the crap off the screen here just because when I’m talking, it could be a bit of a distraction. So I’ll take this off and I’ll take that piece off. So now that we’re looking at this, if you can’t necessarily change your winning percentage and your losing percentage is a compliment, right? Because your winning percent losing percent has to equal a hundred. One of the other ways that you could make a lot of money or make more money is to obviously cut your average loss as we just discussed, but also look at your average win.
Because if you increase your average win, everything else being equal, you can change these percentages or you can change the relationship between those two. You see what I’m saying? So that’s why I want to get you off of, don’t worry about the accuracy. That would be the last thing I’d worry about. What I’d be interested in is like saying here, okay, well my, let’s just say that my winning percent is going to stay at four and my average win was at three. I’m going to lose 60% of the time, and that’s going to cost me one risk unit and net net, there’s my expected value. Well, you can see then if I increase this number on my average win, then the product of this side is going to be even greater than this one, which would stay the same. So say my average win goes up a third to four, now I’m at what?
1.6 minus 0.6, you see? So you can see the mathematical effect of increasing your average win. Now, how do you do that? Well, if you have a winning trade, one trick could be to stay in the winning trade. Let me clean this up a little bit too and go back to what I had. I think this was three, right? So say that you are doing this in units of R, you make three R and you risking one R. Well, suppose you’re in a winning trade and the way you break it up, and so this is mindset stuff, but it’s also tactical. So see how it fits for you. Maybe you scale out of your winners. That’s not my style necessarily, but I know a lot of folks do it. So how about this? When you get to, if you’re not stopped out of your trade at your one R loss here, maybe when you’re here you say, well, when I get to three R, I am going to remove one third of the trade, and then I’m going to trail.
I’ll have my protective stop at now two R. So this way if it reverses on the other pieces, I’ll still walk away having made money, but I’m going to keep two thirds of the position on why I’m making money. I can perceive that necessarily as a good risk. So let’s go down and say, okay, well now at four R, after I let the thing run, let’s just say my protective cell stop is going to be two R. So I’ll raise it here for three R, and at here I’ll lift a third, and at five R, if I get there, I’ll sell the remaining third with a four R trailing stop. So now if you can do the average, you can see how your R level on your gains will go higher by how you’re scaling out of your winners. The good news is you can already say that they’re winning because you can see that on your p and l.
All you have to do is stay in those winning trades longer. Now again, if you’re day trading, it’s probably harder the longer you go out. If you’re like position trader more like me, or if you’re a swing trader, you know, can see about putting these rules in and scale out of your winners. So that should make this number higher. Now, you can test again with the fractions too. I mean, maybe you sell a half and you keep a half. I don’t know, you could sell forth. It doesn’t matter to me. It’s something that you have to test because there is no absolute answer. There’s only what’s best for you.
But then you can mess with the numbers, like I said, and say, this was your profit. I’ll put pie because economists use pie for profit, and then this would be your protective sales stop. Notice, I don’t say stop loss. Why? Well, because you’re making money and I just choose to use very specific language in my brain where I don’t want to emphasis losing. Yes, am I not making as much? I’m not. But the expected value of staying in a winning trade could actually be higher, especially since I haven’t tested it. That’s what you’re saying to yourself. So sell a third at three R, maybe trail it with a. So two R is where your stop is. So if the remaining position goes against you, you get taken out, you still make money on everything. If it goes to four R sell, I guess half of what’s left, it’s still a third of your initial position, but it’s half of what’s left.
So you’ll sell that at four R and then raise your protective stop to three R. So if that last third reverses, you’ll have two pieces sold at three R and one sold at four R. You’re still going to skew the average of your average win higher, which to me is easier to do than worry about getting more accurate because every system that has positive expected value is going to have times when it goes crazy and times when it looks like it’s just the worst trading system in the world, especially when you’re in a drawdown. You see what I’m saying? So as Warner Wolf would say, let’s go to the videotape and investigate this even further and put some numbers to it. Again, you can figure this out in your own notebook on how you want to do it, but let’s just say that you started with 40% winning per percentage, and you made three times the risk unit and you lost your risk unit 60% of the time. That equals your expected value. So if we did the math here, it’s 1.2 minus 0.6. So the expected value is 0.6. So let’s just say that you can increase your winning percentage, excuse me, your average winner by 33%. So let’s change that to four, right? Everything else being equal.
So now it’s one, right? It’s 1.0. Here’s 0.6. Now I have 1.6 minus 0.6. So now it’s one. So check it out. Look at the factor on the multiplier here. From three to four, we improve 33%. Fair enough. What is it when you go from six to 10? It’s 0.6 to two thirds. So I increase my profitability at a higher magnitude than I actually had my own profits. Is that fair to say? So 0.4 over 0.6, how do I get the 0.4? Well, it’s the difference here, and that’s where I’m growing from. So 0.4 over 0.6 is two thirds, but I only increased my gains from three to four. So that’s one over three, that’s 33%. So the goal for me then is to become more profitable, not worry about accuracy. And how do you know whether you you’re in a winning trade? You can already tell that’s the beauty of it.
You don’t have to worry about the accuracy thing at that point because you’re already in the winning trade. You see, it’s easier to just stay with what’s working than have to worry about coming out and putting yet another indicator on your chart. What can you do? Well, we talk with Brian Shannon. You can look at key points and do some anchored vw. You could check the trends over multiple timeframes. I would definitely look at weeklys and monthlys because that’s where definitely weeklys and dailies, because that’s where the material data are in the longer time series, short-term data, intraday stuff, people trading 65 minutes, four hour bars, I get it. The thing is, is that no matter how you slice and dice the intraday stuff, it’s much more random despite the patterns that you think you can see, all right? Whereas if you’re looking at weekly breakouts, that’s much more significant because there’s so much other time that can be employed into the data to really screw it up.
So if you see something evolving on the weekly charts, now you can downtime it to dailies or maybe even intraday to see where the specific levels are. So when people say to me, I want to be more accurate, I always kind of start to think and say, well, there’s a lot more too. Trading profitably in calculating where you’re trading edge is by looking at the results. That’s why I’ve said from day one, don’t sit around and think about it. Don’t read another book risk five bucks a day. I don’t care what it is, but put some real risk on and test your ideas and make sure that it’s with real money because you’re going to behave differently when real money is at risk rather than paper trading. And it’s not to say that some of you can’t treat the paper trading account, it’s real money.
Maybe you can’t. But I do know one thing is for Dam shore, when you’re starting to lose real money that you had to work for, and you’re still in the spot where you’re like, okay, there goes 10 pair of Air Jordans, or there’s a weekend away that beautiful Mount Air Lodge or wherever you’re going to go, you start to internalize that, and now the feelings become much more real. You see what I’m saying? So that’s why I say you’re better off trading real money and risking whatever, some tiny not measurable amount of money because at least it’s going to attach real feelings to you. And you’re an emotional system as much as you are a trading system. That’s absolutely true. Now, once you have all this data, you can do some really funny things because you might have, when I say funny, I mean interesting in the way I use funny here.
What’s funny is once you get the expected value, here’s your expected value. Now you can go back and say, okay, well what was my goal? Right? Because you don’t want to, when you think about trading any other endeavor, it’s like what is it that you want your money to do for you? And I don’t mean I want to make money, but once you have accumulated all that money, okay, well, I want to grow it. Okay, great. At the end of the day though, there’s a point where you’ve accumulated enough money to more than cover a very high quality of life. So that’s what I’m getting at. What’s the point of growing your money? What does that do for you? There can be small things along the way. My self-esteem goes high. I know I can succeed at something that most people fail that can make me feel good without being shot.
And Freud, I can make my hour own hours. I can be my own boss. I can for the way that I trade. I can do this over several days early in the morning before work, and then I can offset or put orders in during my lunch hour or what have you, for managing my risk the rest of the day. There’s a million ways to do it depending on what your holding period is, of course, and whether or not you’re looking at using or trading levered instruments. So I would say in a long-winded way that focus on how to increase your average win, because you can do that without having to have a higher winning rate, because you’re al, if you’re already in a winning trade, you can squeeze more money out of it by staying in it longer. And that might mean holding it overnight.
I’ve already done that study and I showed you that you actually get paid quite handsomely for having risk overnight and over the weekend, you see, but I wouldn’t let you know the lack of a goal, the lack of a goal to me. We’ll talk about this maybe tomorrow, if you get lazy with yourself, it just means you’re delaying gratification or you’re not really ready to hit your goals yet. So that could be your subconscious. Why is that happening? Are you not worth it? Right? Are you afraid to really kick in? What would happen if you actually hit your goals is that very, sometimes that’s very scary for people. You see what I’m saying? So it doesn’t matter to me. If you’re into reversals or you’re day trading, or you’re a short seller, or you’re doing option spreads or commodity spreads, or you’re doing any type of directional trading, you’re only going to get the real data that means the most from real trading.
The hypothetical stuff is interesting, but the truth is, is that very rarely do the things happen in the laboratory. Do they work out in real life? It is important to give you an idea because you can, if nothing else, see that your system would’ve made money one and two, you can calibrate your emotional constitution with those very rules because if you start to trade and you think, well, no, I’m not going to have draw down. It’s not at least the way other people do because that’s just not me. I don’t do draw downs and then, okay, fine. But if you looked at your rules and you followed them objectively, these systems do like these simulators, right? It’s forced objectivity it. You can’t go back and say, oh, yeah, well, that was a big loser. I would never really have taken that trade. You don’t get to make those decisions because the computer just looks at the data and says, the criteria is met. We’re going to add the risk according to this position sizing algorithm. And then there you have it.
It’s important though also, or in order for you to grow your average winner, you have to be absolutely regimented and militaristic about taking your average and your small losses. So that has to be locked in because the minute you give yourself permission to say, I bought something, here’s the chart, dot da, da. Got the breakout here. I got it at 18, my stop was at 17, it’s at 20 now, and then it comes back on me. And then when you find yourself at $17 and 20 cents, you’re like, oh no, I’m just going to make it 16 because I don’t want to get knocked, knocked out and have the thing go back up. I’ll feel like an idiot. But what happens is if it trades 1720s through 17 down to 16, the way I would look at this and don’t, I’m not using any data, is that sixteen’s going to bring 13 before it’s going to bring 20 again.
And you can see that. You can see when tops fail, that oftentimes happens, is the thing comes back, takes out a bunch of folks, and then there you have it and it’s lookout below. So you always want to make sure that no matter what you’re thinking, even if you have a hunch that the instrument’s going to come down and rally back up, it doesn’t matter. You can only manage risk in the ever-evolving moment of right now, I can’t manage my risk based on what I think is going to happen next week or into May when earnings starts to kick in again, when earnings are getting reported. If the price is going against me now, and I’ve already determined what my position size is, there’s a set spot where I have to get out and you need to own it right here. And that’s the key to making money, is to keeping that number small.
Because what you don’t want to do is it put yourself in a spot where your average wind can go up, but then you get super lazy on where you’re putting your protective stops. And so at the same time, your average winner goes up, but so does your average loser. Why? Well, because you had that one big outlier trade, and then you do yourself a disservice by saying, well, yeah, that was just a flyer. I took it. I admit I was wrong. I lost money, but I don’t include that in my results. Well, now your numbers don’t have any integrity, right? Because you’re kind of making stuff up on the fly, and I don’t think you’re being honest with yourself. So before you start worrying about batting average and your winning percentage, I would say the easiest way to have a higher expected value, which to me is the goal, not how frequently you win, look to increase your average win.
And that can mean staying in trades longer, scaling out of your winners at key times, and then putting protective stops below the market on the remaining position so that if it does reverse, you know, don’t get knocked out for heavy losses, right? That’s a very interesting way to look at the math behind trading and why is it? Why does it work? Cause this here represents what your trading edge is. Once you get this number down, it’s something really cool happens in that you can look at, say, Kelly criterion or otherwise, and now you can see, okay, well if this is the expected value of a trade and I know I want to grow my money fivefold, I want to turn a 10 K into 50 K or whatever, the number doesn’t matter, I want to take a million to 5 million. Well, based on your own behavior, what the expected value of a trade is, a couple things happen.
One is you can say, on average, I’m making my expected value even on the trades that I lose. And that’s why it pays you to put on every trade effectively and spiritually, is that you have to put on every trade. Because on average, when you have an edge and you follow your criteria, right, the expected value’s not going to change from one trade to the next. If you change your bed size, yeah, absolutely. If you change where you put your protective stop, that’s going to alter everything so that the rules have to be locked in and written in stone. But if the goal is to make more money, I would say yeah, be mindful of checking out and testing where you can get better winners by altering your entering criteria. But I wouldn’t go nuts, and I certainly wouldn’t look at overlays and indicators because I’ve already proven to myself that they don’t work.
So I’d save you the time if you want to go do the work yourself. It’s a very enlightening experience. But I think increasing your average winner is might be the easiest way. Then once you figure out what your edge is and what the expected value of the trade is, you can use Kelly criteria to see, okay, well based on these numbers, here’s my optimal position size. And then having said that, you can figure out further in order to hit your goals, you’re going to have to put on a certain number of trades, and you might be like, man, market’s stalled. There wasn’t really a lot of good opportunities this past week. I’m going to need to put on 10 or 20 trades, whatever the number might be. I might have to put on tw 20 trades a week because the system, after everything is said and done, suggests that I have whatever, 250 trading dates and I need 500 trades. So whatever that number comes up to be, two a day, maybe that’s it. Maybe it’s 20 a day. So now you can say, okay, well based on the practical, there’s not that many opportunities for me given my trading style, but at least now you, you’re dealing with objectivity and you’re looking at the numbers so that this way, if your count isn’t growing, at least the reason why, and it probably doesn’t have anything to do necessarily, or at least solely with the winning percentage.
You see what I mean? So it gets kind of deep, but this is all very, very important because you’re winning and losing percentage come from calculating position size, entering your orders, and letting the market come to you. The average winner, average loser is a ratio that you create also based on your own behavior that you’ve observed. And so if you want better results, then you can absolutely have better tactics for say, taking winners or staying in winners longer, or maybe even adding to winners. Like all of that’s doable. That to me, is much easier than trying to find the most accurate system.
Cause I would say embrace the uncertainty of making and losing money. Just use your protective stops. Once you’re in the position, use buy stops above the market to enter long positions. So this will motion or the need to chase, which is lethal, and then add it all up. Because when you then look at where your edge is at and how you’ve created, now you can set goals to me are much more realistic because you can see based on your own behavior, what you’ve deliberately done, intentions equal results. So that’s why I don’t think this is terribly difficult. It can be difficult if you make it difficult, otherwise it’s pretty simple. The math is not terribly difficult. But once you have the math, then you could really set better goals because you’re like, okay, if I want to grow my money five or 10 times my account size, I don’t have enough trades on to get there.
One, I might have to increase my size. So that means what you have tighter stops, you give it more room. Are you going to invite bigger drawdowns? So now you’re kind of, again, you’re carving it out of stone. David was already in there, Michelangelo just said him free. Now you’re kind of doing that with your own trading, and it’s not complete guesswork. Now, if you go back and watch another video I put up about how to use scale up, you can see why people just going from trading ones and twos to say fives to tens is reckless because your account isn’t growing in proportion with your position size. So you’re actually increasing your risk in a way that hasn’t been scientifically tested to help you maximize the results that you can see from this very equation. Again, then you can go use the Kelly Criterion Kelly formula to help calculate what’s your optimal position size, and then you’re off to the races based upon what you want your target rate of return to be.
So then the whole thing isn’t just a role of the dice, it’s much more scientific, but then you have to stick to the behavior because the behavior predicts where you end up. You can sit and do the math all day, but the reality is, is that if you don’t stick to the rules, then what’s it all for at that point? Because you’re not being true to the model, and it’s the behavior that predicts where you end up. So you have to execute your trading rules, your model, your system, you can call it. It’s the same thing to me, you know what I mean? So this is hopefully very, very insightful for you on how do you actually improve your trading and making money. I would not worry about accuracy. I would worry about increasing the expected value of a trade, which again is to me easier.
How do you know? Well, because you’re already in the winning trade, just increase your holding period. You’ll have to deal with the emotions that go with that. But that to me is a lot easier than trying to test indicators and moving averages or otherwise to find a more accurate entry system. Okay. Anyway, thanks very much for the comment. Appreciate please like and subscribe and always give me comments. Let me know what you think because I can come up with more material like this that’ll hopefully be very valuable to you and help you accelerate your learning curve. All right. Thanks for being here, folks. I’ll see you tomorrow.

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This is an automated transcript

Hey everybody, it’s Michael Martin. Thanks for being here. So I wanted to do some follow up on the video I did on position sizing. The title was What Most traders Get wrong about position sizing, which again, we’re splitting hairs here, right? So it’s not definitively wrong or they’re definitively right, because the thing ebb and flows and you’re really making these adjustments in real time. So say you’re working at a place where they have these tiers, to me that’s more of a managerial decision, right? Than it is looking at things based on the dynamic volatility of the marketplace. And I can see why it’s done, and I think it’s prudent, right? So I’m not, I’m poo-pooing it, but what it does do if you’re in that process is it conditions you to think in one particular way. What do I mean by that? Well, at any given time, your line of credit, your account balance, whatever it is, is reacting to the positions that you have in the marketplace.
And in my opinion, we really make and lose our money by position sizing, not by, that’s why I go crazy when I hear these companies talking about technical packages and technical analysis and sniper your entries. It’s not really that important. The sniper your entry. Yeah, again, if you’re trading 30,000 shares of a 6 cents stock, a penny can be painful. But I’m talking about trying to make real money with positions over a longer period of time. You have to be able to sleep at night, but also have enough risk on so that it makes sense for you when the thing does move in your favor. So think about having a hedge. It can be a beautiful eight foot hedgerow, but still, it still needs to be pruned. So when you find yourself in a position, and again, I’m not talking about intraday stuff, I’m talking about taking risk home overnight over the weekends, you have to conjugate that position size right?
With the volatility of the instrument and also with respect to where your account balance is. If you are up 200% already year to date, regardless of your account size, emotionally, you can free wheel a little bit. Not to just gamble, but you have it to give. Whereas if you’re in an A 20% drawdown and you’re trading 80 cent dollars, it’s a different mindset on how you handle the risk. So my take on all of this is that focus on your position sizing and dynamically adjust that because if you’re trading, say tens, for example, 10 contracts or a thousand shares of 10 future contracts, maybe five option contracts and maybe share sizes, you’re looking at a thousand shares, you might find that you can optimize your behavior better if you looked at say, 1,050 shares, right? Or 900 shares for your style of trading.
So that you can do that by testing. You can also do that by looking at the results that you have. So where I do think entries and exits are important, they have to be conjugated to the position size because you know, can’t just say having a $1 stop, for example, or a 10 point stop on the EI or blah blah blah is optimal until you’ve actually done it in real time. And then you might find that you don’t have enough risk on, which is actually a big problem in my experience. I think the professional traders do a really good job of knowing not to have too much risk on, but the one thing that I found is that oftentimes they don’t have enough on, and this is in the face of me totally agreeing with the idea that the job for us as speculators, as traders is to play superior defense.
That’s job number one. And so, yeah, that seems weird to hear when you’re thinking about, well, our job is to make money, but at what cost? Because ultimately, if you see somebody and they’re in these trading contests and this and that, which I don’t necessarily think they mean anything, it can bring out the worst of you because the key is risk adjusted returns. If you’re going to make 150% but have to live through a 60% drawdown, is that the type of trade-off that you want? Whereas if you make an 80% and you only have an 8% draw down, that to me would be remarkable. You see what I’m getting at? So I think you have to look at risk adjusted returns to what is the return that you’re getting for the risk that you’re taking, because you always have to be concerned about the draw down, which I think you have to ensure against first. And that becomes a function of your entry and your exit and your position sizing. So don’t sell yourself yourself short by trading too small and don’t be throw caution to the wind by trading too big. I think the position sizing thing is much more dynamic. And even if you’re going to trade, say gold futures or Nvidia stock, even if you’re risking say one quarter of 1%, you might find that your position sizing is different from day to day to day.
So look at it and make sure that you, it’s at least something that you think about from time to time. I’m going to do a longer form video on adjusting position sizes and how do you know when and how to scale? Cause it’s very hard to do in an audio only format and it’s going to take some whiteboard action. The only problem that I have right now is that I don’t like the whiteboard action scenario that I have here. I have to use a tablet and a stylist. And the quality of the video for your viewing hasn’t, doesn’t come out as good as if I’m using the 4K camera that I have here. So I’m going to work on that and figure out what’s best so that I can go through some examples so you can kind of see, because I think one of the things that guys do,
Especially they’re newer, they’re younger than, they have smaller account sizes. They want to go from trading ones and twos to twenties, and it’s just not practical. It, you don’t make that type of a leap. It’s much more dynamic based on the volatility of the instrument that you’re trading as well as the size of your account. So the growth is much more gradual. You go from ones to twos to twos to threes to threes to fours like this and that. It’s not practical to jump by. That type of a factor of say, five or more, unless you’re going to get a bigger allocation or to place where you’re working, gives you a larger allocation or a line of credit, so to speak. So you want to stay kind of consistent in your behavior. Part of that behavior is choosing the most dynamic position sizes for the risk that you’re willing to take.
Again, we talked about patience yesterday. It’s going to take you a while to get where you want to be. Again, what’s the goal? Do you want to walk around town and say to everybody that you’re trading twenties? Because to be frank, no one’s going to care, doesn’t mean anything. So you want to think about focusing on what matters most, and that is, can you behave consistently? Behavior predicts where you end up. So focus on what really matters more than stuff that might satisfy your ego. There’s nothing to feel insecure about. Everybody starts with zero. Richard Dennis, right of c and d commodities who trained all those turtle guys. He started with a couple hundred bucks.
Everyone’s got to start somewhere. So just enjoy the process and focus on the process as opposed to, I want to beat Paul Tooter Jones in a year. It doesn’t work that way. So it goes back to being patient, and I think growing your money has a lot to do with, yes, your entries and exits do matter, but they have to be conjugated with the position size because that’s where we make and lose money. As always, I appreciate your feedback and your comments. Please like and subscribe and send your comments along. I don’t have all the answers. I can only speak to what it is that I’ve gone through and then share my experience, strength, and hope that it might help you in your endeavors and in your journey as you grow in this business. All right, so thanks for being here, folks. I will see you next week.

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