Hey folks. Happy Friday. Thanks for being here. I want to finish the question with something that kind of ties into yesterday for folks who might even be starting out, and that is, in your experience, is it more consistent to have one black and white entry around your area of value? I think S N R, which might mean support and resistance breakouts moving average, or are having multiple entries around those same areas of value, the more sustainable route? Well, I don’t know. I honestly don’t know. If I was starting all over again, I would probably go back and do what I had already done, which is to pick one method, one ethos, one ideology, and stick with it and gather the data, right? Because if you start putting several months together where you’ve won, but you’ve used 45 different entries, very difficult to look backwards and then say, okay, well, which is it?
You might also be able to say, it doesn’t matter because I have good instincts and I’ve used the right entry criteria for the particular trade at hand. That could be the case too. The truth is, at three months there’s not enough data. Even though emotionally you want that to mean something, it doesn’t. No one’s going to give you an allocation based on three months of track record. So what I would try to do at the same time, I’m speaking out of both sides of my mouth where I’m saying experiment, right? You have to figure out for yourself what you think the right amount of time or the right number of instances are for you to have data that’s statistically significant based on what it is you’re trying to do. I don’t know what that number is because I don’t have enough data here. I don’t have enough understanding whether you trade support and resistance or breakouts or moving averages.
You have to see what the trade offs of all of those are, right? If you’re looking at breakouts, sometimes they break out and they come back. Some people call those incorrectly false breakouts. I don’t know how it could be a false breakout if it actually broke, broke out, because there’s nothing about breakout that says it has to keep coming in order, keep going in that direction in order it to be a legitimate breakout. The breakout to a new high is a breakout. Whether it fails or not is something different. Moving averages can be good, but you have to sit there and wait for them to cross, and sometimes the price on the chart can move a lot faster than the moving average can demonstrate. When you look at most likely closing prices, which go into the moving averages, so you have to have a different emotional makeup to trade the moving average versus looking at straight breakouts. Both can work, but it really depends on who you are as a person. You can get a lot done with support and resistance. Doesn’t matter. Capitalization doesn’t matter whether you’re trading stocks or futures. I know people that trade for small potatoes in between support and resistance. Another style. You really have to see what feels good, what can you do no matter what the circumstances, because then you’ll know that that might be at least
In the short run, something for you to lean on to try which one feels the best. It’s awfully difficult when you know there’s, because there’s people who like to fade moves, which I don’t like to do because you really have to have good timing to understand whether the trend is over in order for you to go the other way. I don’t advocate trading against a trend for any particular asked class in any timeframe. I don’t like the idea of people trying to think that they’re smarter than the market or the participants they’re in because they’re typically not. There are people who can look and see and define what reversals are and see what market tops are, but in my experience, even if those people have made millions, the people who actually traded the directional trend up to the top are the people who are making the real money. So you can make a lot of money. You might think a million dollars is a lot of money. It’s up to you. It could be cultural, it could be your upbringing and where you’re from, but I wouldn’t try to get cute with that because oftentimes those trends can continue and you find yourself short in an upward moving market, you’re going to lose a lot of money quickly. Doesn’t matter if you’re trading minis or micros.
So this is from Jarvis, Jarvis Price, 8, 7, 7, 7, and it was again, a comment on the difference between trading and stocks and commodities. You really have to experiment, and I would start with one and whichever one feels the best, and then kind of go from there. Otherwise, I don’t have enough data to make a suggestion that says, definitively, this is what you should do and kind of go with it. I know eventually you’re going to settle on one thing, and that thing will both be profitable, right, from an expected value standpoint, but it’s also going to feel good to the point where it’s largely effortless for you to pull off both tactically and emotionally. All right, short episode, because yesterday I think I kind of ran a little bit long, but sometimes the questions require me to answer it from several angles, and there’s just no way to tell because the audience is so rich and diverse and pluralistic that it’s difficult to say that there’s any one definitive right answer. So sorry about that. Anyway, I hope you had a great week and you have fun plans for the weekend. Take some time off, get away from the screen. The things that you can learn about trading are oftentimes done when you’re out on a hike or out at the beach, and I hope you have a great weekend, and I look forward to seeing you Monday. Take care.

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Well, it’s Kraken Ma. Thanks everybody for being here. So today I just want to take a minute and thank everybody. I realize I don’t believe necessarily in tough love. It works for certain people, but it doesn’t work for everybody. So I’m very mindful of how I appear to you and what I say because what you’re trying to do in the trading world is hard. I’ve lived it, so I don’t ever try to mince words and make it sound like it’s going to be easy. The things that you’re going through, it’s really you against yourself as much as it is you being involved in the market. The market’s going to be there whether we participate or not. So to me, the real war isn’t with the market. It’s knowing how to eliminate and remove and have the willingness to feel who you are as a person.
When you put yourself deliberately in harm’s way, that to me is the rub. It’s not looking at here’s the 12 bullish chart patterns that you need to remember. And you’re like, is that a bullish flag? Fuck is that mean? Anyway, that’s all bullshit, right? That’s again taking you and steering you away from the important work. And so in the event that I have come across from time to time, maybe a little heavy handed, it’s not my intention to crack you in the head, but in a loving way. You know what I’m saying? So I just wanted to clear that no one has written in and said anything, but I am here to help. This is how I give back to the community. There’s a lot of stuff that I haven’t talked about, like my options trading, just because I don’t know that that benefits anybody, but you grow and you evolve As a person.
I had to take several steps back to take a half a step forward. Then I had to learn how to feel patient and say, okay, I don’t have enough evidence as to whether or not I’m going to make it. See, I also had other revenue sources that I didn’t need to put that kind of pressure on myself to make it or to know anything for sure. I don’t think you’re going to really know anything for sure, and that goes for life. All you have is the ever evolving moment of right now, but things can change very quickly whether you like it or not. And that’s just the way it works. That’s what I mean when I say life on life’s terms.
I did eventually learn foreign exchange. I did eventually learn a lot more about options and from time to time I used them. I’m in an options trade right now. The answer to your question is no, I’m not going to go over it, not for free. That’s for damn sure. My ethos here is to go over and give you the most of valuable information for free. That’s what you actually need. What you want is other stuff for that you’re going to have to pay. I’m going to try to figure that out, maybe going forward. But in the meantime, this is the most important work, whether you think so or not, and I’m willing to give it away for free to the extent that I have the time. You see me in these videos and I said, happy Thursday. Well, today recording this isn’t the Thursday that you’re watching it.
Why? Well, cause I have to find windows of time where I can get these done so that you have daily content, but I don’t have time to do it every day cause I’m actually very busy, but I’m still committed to wanting to help everybody as it relates to your trading. And I kind of go back to the comments. You should look at this period of time as one of experimentation, which should be very freeing for yourself. It would help you change your mindset and not put so much pressure on yourself to look at winning and losing trades and then trying to figure out whether you’re making it or not. It’s going to take you some time, even if you’re very experienced or you’re institutional and you’ve been a directional trader and now you want to look at say, intra commodity spreads. It’s going to require you to experiment.
You can back test till you’re blue in the teeth, blue in the face, but it’s going to require experimentation. Now, if you’re at a desk and you don’t like to suffer any humility because of the gossip in the office office, I know that I hear it all the time. We get a lot of clients like that because I’m in la. I’m not in Singapore, Hong Kong, London, New York, where you’re going to see me at the local watering holes with your peers or with your competition gossiping. So it’s a huge advantage to being in Los Angeles in that I get to keep a very reclusive, reclusive kind of life. But think about your trading as experimentation because largely every day is an experimentation, even if you’ve been doing the same thing for several years. Why is that? Well, because the markets change. So you’re really having, every time you put on a trade using the systems and strategies that you’ve used days, weeks, and months before, you’re still taking a leap of faith that it’s going to work going forward.
It’s still a probabilistic outcome even if you have success using the same strategy on the same asset class with the same timeframe. So you have to be ready for the unexpected. That’s a bigger problem on the institutional side because it’s difficult to accept that what used to work might not necessarily work now, but I would, if you’re younger and if you’re on the retail side, blocking out all the bullshit and looking and trying to experiment can put you in a different mindset that you’re not necessarily concerned with any one particular result, any one month of result, for example, because it might not tell you all that much. You can’t really tell. So for example, if I back tested a basic system of breakouts in a trend following model, I might find that over 20 years there’s a 14% drawdown that lasted six months. So when you jump into a discretionary trading model and you’re looking at the rules that you’re following, how do you know that if I’ve back tested those same rules, I can’t say, well, yeah, that’s obvious.
You’re in month number two of a six month drawdown, that’s going to be about 14%. You see what I mean? You can’t make any conclusions whatsoever about the outcome of any one particular trade and pretty much the outcome of any one month of trading. You’re emotionally invested in wanting to succeed. So you might look and say, yeah, man, I had a good month. I’m onto something. Maybe not. I got news for you. It’s going to take some time. So don’t get over excited about stuff. In the same sense, you can’t get all pissy if you’re losing money because it doesn’t mean much in the grand scheme of things. So Roman asked the question, and this was on the Michael Martin show, episode 18 with ganja trading and mental toughness, and eventually after a lot of stuff he says, I’m trying to test since you hear again and again that you cannot influence your profits. I would like to know how you should pay your bills. They will come no matter how successful you were or not than from from trading, right? There’s a typo there. He says, then from trading, but I think he means then from trading,
Do the people who do this always have several annual incomes in case there is a drawdown? What did Bill Dunn do in the two to three years that he didn’t earn money with the mechanical system? What did he live on during that time? Many thanks for your wonderful video. So
If you are thinking about wanting to make a living from trading, there’s certain assumptions that you shouldn’t make. One is that you’re going to be profitable every month or that you’re going to take money from your trading account, i e your profits to pay your bills. That never works. You’ll only be trading with scared money, and I’ll talk about that. But I want to get to answering the question. You should probably have six to 12 months of savings of your bills put aside, separate from your trading account. And I know most of you don’t have that, but that’s what it’s going to take. Otherwise, you might get too invested in the short term, in the term of your short term success and start to extrapolate that you’re onto something. The worst thing you can do at that point is give notice. And now you’re, you’ve got 50 K in a trading account and $4,000 a month in bills. That makes no sense to me because now you have to do 10% of returns every month just to pay your bills. How are you going to grow your account? Because now you’ve set yourself up for some very, very arduous times, and that doesn’t take into account what happens when you lose money.
So you need to basically double your account every year just to stand still. That’s an awful lot of pressure to put on yourself. Now, of course, you could say, well, I’m going to throw caution to the wind and I’m going to do it. And by all means, you’ll probably learn a lot about yourself in the process. I just don’t know that any good trading is going to come of it. Do you see what I’m saying? So most of these people have jobs, right? Full-time jobs that they may or may not like, but they’re tolerable. They give them a sense of security. They also give them benefits. They help them save for retirement. All that stuff is really important. I wouldn’t necessarily wing that because yes, your bills are going to come. Another question came in. I don’t remember from who. Oh, Louis, I can’t pronounce the last name here.
I don’t know. Let me see if I can get that correct. I apologize for not being able, I just can’t see it because it’s all stuck together. Louis Menezes, Menez is, I apologize if I’m saying your name wrong. He left the comment a while back for a video. Oh, the one that most people didn’t understand, and it was a Friday video, the difference between trading stocks and commodities. So how do you transition from any other work to trading? Well, you tell me how are you going to do it? How are you going to pay your bills? I mean, this stuff that you got to work out ahead of time. What can you do during the day or during the night, during the weekend to make your money so that you can put time into your craft? Because again, it’s tricky. While I agree, you have to start somewhere.
Paper trading is probably not. It’s a step so that you can learn how to use the entry, the order entry system on a particular trading platform. But I don’t believe that it helps you manage risk in as much that you don’t have any. You’re not feeling the financial burn of risking real money and losing real money. So I would find a way to get a funding source, whether that’s a job or whatever, but to me, that’s a question that you would inherently know how to answer. I mean, there’s a million ways to make the leap as far as quitting your job and knowing that you’re onto something. It’s very difficult to know when the right time is to do that emotionally that you want to do it tomorrow. But the truth is that even if you had a good year, and even if you were able to say, okay, here’s the 12 months of the last 12 months I was profitable.
Seven months I lost money on five months net, I still made money. What percent rate of return was that? What was your draw down in back testing software? They also allow you to Monte Carlo your rules because you want to vary the start date you see, because the results that you would get, and the example that I always use just to really illustrate this, is that what happens if you sold the house for a hundred and you had a hundred thousand in proceeds and you put that money to work on October 1st, 1987, or what would happen if you delayed it by a month and put that money to work on November 1st using the same trading rules? Obviously you sidestepped the crash of black Monday in 87, which would give you, if you were a long-term investor, very different results, right? Because you were starting from 0.0, which was 28% below where everyone else started in the top of October.
So that’s the trickier part. You probably need some time that could be six months to several years of learning your craft, getting your confidence and believing in yourself. So your emotional need is to become a full-time trader. But until you really see the data and have somewhat third party person look at it and can save for sure that you have talent, you should probably play that more conservatively. While I do appreciate the people, like the guys who founded Dreamworks, right? Steven Spielberg, Jeffrey Katzenberg and David Geffen, those guys were all billionaires and none had had a college degree. For every entity where that works, there’s probably 10,000 people that don’t make it. You see what I’m saying? They had a lot of wind at their backs to turn Dreamworks into something big. They were also very, very successful individuals before they started their own production company.
So you might want to consider what is it that you need to have all the creature comforts that you want? Because if you make that leap, you don’t have the right to complain, right? Because you did it to yourself, and I don’t know what, it’s too, too broad a question to say, here’s what you just should do definitively so that it meets everybody’s needs, meaning everybody who’s watching the show, I would play it. I don’t know what I would do to trade to make the trade-offs to wanting to get into the business. I know what I was willing to do 35 years ago, but today of a different mindset, the world has changed fantastically. So I would just say, you know, need to feel comfortable in your own skin. It’s probably going to take more time than you think, and it’s probably going to take more time than you’re emotionally comfortable with because in order to be sure, you really have to see a lot of data.
Couple of months is not good enough to give notice because think about it this way, if you were going to say, here’s my track record using what I’m doing, I’m paper trading, that doesn’t count. I would, no one’s going to give you money anymore on paper trading or hypothetical results because the old saying in that allocation world is you’ve never seen a back test you didn’t like, right? Because you can curve fit and cherry pick and data mine so that the system looks great. And how people behave with real money is, I knew a guy who was part of a men’s group. I dunno if I should tell this story. And he got an allocation from a big, big trader and he started following the system. Maybe I’ll tell this story. I got to think about it. Anyway, he started trading the system as promised, and he went into a drawdown and the rules were supposed to be, I think 90% systematic, 10% discretionary. And after one or two months, because the person went into draw down, they flipped it and went 10% systematic, 90% discretionary pulled the funds.
So you never really can tell what’s going to happen when you start putting on real money and have real risk. The pressures come from places that you might not fathom. So then you’re putting yourself in a spot where you need to make money. You can see how this plays out. You don’t have enough money to cover your rent. You have money in a trading account. Easiest thing to do would be take out some of that money and just pay your bills. But if you try to put on a hero trade, you might be taking on too much risk. So you run into the potential of trading too big or then increasing your frequency because you’re acting out of desperation. So you really have to project into the future. What are your needs going to be so that you can better plan for the things that are going to unfold that you know about, but then have a contingency for when life throws you a couple curve balls.
Having three months of bills is not enough. Any financial planner worth his or her salt will tell you that you want to have six months of savings to pay your bills just for life. So if you’re going to try to trade where the, and that’s for people who have paychecks when you’re trying to trade and the outcome is variable, and the outcome on any particular trade is probabilistic. You don’t even really know where your next paycheck is coming from. Literally and figuratively, all is, here are my rules. Here’s what I intend to do. I’m powerless over the outcome. What happens if you run into a 2, 3, 4 month drawdown, right? People don’t think, well, that’s not going to happen to me. I see other guys who have green days every day. Well, that’s great. That just tells you from a data point that it is possible.
It doesn’t mean it’s possible for you. You see, because you’re not them and your trading style and your emotional constitution are as unique to you as are your fingerprints. So you really have to think about what is it that you’re trying to do and giving yourself the best possible runway to succeed, which is very difficult to predict because people in my experience, when they send me their ideas, they tend to be rose colored glasses. They tend to be full of opportunities where they don’t really consider a lot of the downside because they just focus on what the good stuff that could happen. But you have to build that business plan around the worst possible outcome for every decision that you’re going to make. And then if you can insure against that and have the cashflow put aside to me, then you can do it. Now, there’s trade offs. Some folks are like, you know what? I’m going to start working nights. Well, that’s great. So you get home at six in the morning and you’re completely gassed. First thing you want to do is sleep. You’re going to take your clothes off, and now you’re supposed to come to the market and execute with discipline. It’s awfully difficult to do.
Some people say, well, I’m going to go wait tables at a fancy restaurant work Friday and Saturday, maybe pick up a couple dinners during the week. Doable, right? Because then you’re available for the open there. Markets closed in the late afternoons, it’s probably doable. But then you’re giving up your weekends for the most part, and that’s just the way, those are the trade offs you have to consider. So having said that, I don’t know if there’s anyone, there’s only there’s any one answer or good answer that that’s going to be a one size fits all kind of a deal. In the case of Bill Dunn, he was already a multimillionaire. He had been trading since 1974, and so if he had a couple of years, he’s a successful business person at the time, and I’m sure they had money in their cash account to pay their overhead.
They were still earning management fees. They probably weren’t getting incentive fees when you’re in a draw down, but you still get management fees. So they come in. So that means probably 10 to 20 K coming in on a management fee basis, paid quarterly in advance for every million that they had under management. So you can figure it’s 10. That would be 10 K a year for every million. If you had 10 million, that would be a hundred thousand dollars in annual management fees, minimum maybe 200 k if it was a 2% management fee, and that number’s paid quarterly in advance. So 10 million at 2% is 50,000 every quarter in management fee to pay the bills. Maybe that includes a small draw against performance. I don’t know. There’s a million ways to chop that up, but this is what makes it difficult. If your goal is to make it, you can sit and overthink a lot of stuff.
So anyway, I think I’ve exhausted this question. I appreciate everyone’s chiming in about how to make it. The best you can do is put on real money and see how it feels. Write down what you intended to do versus what you actually did. See if you can explain the variance, and if you do that for every trade for years, you’ll learn a lot about yourself When you’re running real money, it doesn’t have to be thousands of dollars. You could do it at the beginning anyhow, risking 10, 20 bucks a trade just to get a feel for everything. So that’s what I would do is kind of get the game that way. But in terms of you need a funding source, that’s all there is to it. There’s really no, there’s no way around it. No way around it whatsoever. Like I said, I had a couple of revenue streams and I had a couple of revenue streams, and so I was lucky in that regard in that I didn’t have the pressure.
I could experiment a lot, not necessarily worry about the outcome of any one particular trade, but I was super vicious and honest with my myself to say, okay, I looked at my trading results and say, okay, Michael, you have very no skill in this particular area, but it’s taking up 60% of your time. That’s easy to go. That was far in exchange. Then we looked at options, and again, that was plus or minus 5%. Took a lot of time, am let that go for the time being. Then I looked at where I was making money. That took me less time because I had a natural ability that was in stocks and commodity speculation. I looked at the results, enjoyed the aspect of leverage. You also don’t need as much money under management when you trade futures. Of course, you’ll have to figure out that’s appropriate for you or not.
But because of the margins, which were less than they are today, even there were a lot of products that didn’t exist, like the E mini didn’t exist when I started. Then there were other trade things like pork bellies that did exist that don’t exist anymore. So contracts change to fit the times to fit the volumes and the open interest margins can certainly change without notice. But I would say the moral of the story is to get used to experimentation and learn to understand how freeing that can be. Because in that process, when you’re actually in the game, again, the best trading coach that you’ll ever get is when you actually do the trading and you can learn on yourself. We can help you shorten the learning curve here, but you can still do it on your own like I did.
To me, that’s the best way to go. And if you don’t have a clear vision on how you’re supposed to start trading full time, you’d also need probably two or three years of a track record to have any type of sense. It depends what kind of chances you want to take, but it also, do you have kids? Do you have a supportive spouse? Are you doing this all by yourself? Because you’re going to need to communicate all your dreams and aspirations to a significant other who might have very different understanding how they want the world to unfold going forward for the next couple of years. So it’s way too complicated to just give you a blanket answer and say, here’s the way to go. But I think the more data that you have in terms of years of data, the hundreds or thousands of trades that you can review, the more sense of self you’ll have, you’ll understand who you are and how you behave over a longer sample space, which can only help you draw better conclusions, but only you really know what’s best for you in that regard of how you’re going to do it or wing it or take your chances, you see.
So anyway, very complicated question. There’s a million ways to answer that. There’s so many facets to this. Training is part of it, but it’s not the only part. But I appreciate the questions. I appreciate your trust in your asking me, and I always try to speak from experience because otherwise it’s just theory and who cares about my theories on anything. I want to talk and speak to you from things that I’ve actually had to live through, because that makes it legit, right? Thanks very much for being here, folks. Please like and subscribe, and I’ll be back with you tomorrow before the weekend. Have a good one.

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Hey guys, welcome back to another weekly episode where Mike and I go over you guys topics, comments and questions, and see if we can add anything on Toit today. I wanted to mention before we start the episode, if you guys haven’t already, go down in the description and get your free copy of the audiobook@martinchronicle.com and sign up for the email list because Mike and I are going to be doing a very special live event very, very soon. And it’s going to involve you guys and we’re kind of going to talk about the trajectory of the channel and I guess the roadmap that we have as far as coursework goes. And just in general the offerings that he and I are going to be having really, really soon.
So make sure you guys go do that. It’s going to be really exciting. And now if you guys haven’t already, make sure you like and subscribe. All comments, help the algorithm. We really appreciate all the support. So let’s keep the comments coming. And for today’s topic, it’s actually a viewer’s comment and it was one that I thought was really interesting and I wanted to get your opinion on it. Mike, it’s from David Plyler and it says, I made money today but didn’t follow my rules, completely aggravated with myself. My two areas I need improvement are both related. After making good decisions, my confidence becomes overconfidence. And then I take trades in anticipation of a signal. I’m positive most months, but these two things and then he was very, very upset about that. So what do you have to say on that?
Well, that, I’m kind of looking at it here. I don’t know what the two things are. My two areas I need to improve are both related. I don’t think he really says what they are.
Yeah, it’s the decisions and the confidence trading in anticipation of a signal. It’s like a loop. It’s like a feedback loop.
Yeah. Well what you said you really love this. What do you think?
Well, so most of the time when you talk about creating a process, what is that for? It’s to make on average more money. It’s not to catch that one in a billion lottery tickets, so to speak. It’s not like, yeah, you’re trying to reinforce good behavior and that’s what a lot of these processes are for. For me specifically when I was a cyclist in what I do now with eSports, I have a warmup routine and I don’t deviate from that. And when I do, sure, yeah, some days I can get on and not have to spend 30 minutes warming up and it’s like, Hey, great, I didn’t waste 30 minutes, but then I could do really bad. And if I don’t do bad and just happen to do good, I’m rewarding bad behavior, right? Yeah. So it’s not a consistent behavior and what you want to develop in life and in any profession is consistency.
True enough. As far as the trading and what I’ve had to live through, just like a trader can get down on him or herself when they’ve lost a bunch of times, they can kind of internalize that. And I talked about that on the show either already this week or it’s coming up. I can’t remember from day to day to be honest with you. And so if when you run your system that you have 30% accuracy, that means seven out of 10 times you’re going to fail, which or lose money doesn’t necessarily mean failure. You could easily lose three or four times in a row and internalize that and be like, I’m a loser. But your results are kind of in models still. You know what I mean? Likewise, if you go on a winning streak, you can internalize that and be like, king of the world, I’m better than Lance Armstrong and I didn’t have the dope and I can bang all the hot bitches.
And unfortunately the world doesn’t work that way either. But guys, being guys, women are better at this by the way, just generally speaking. They have higher level of emotional intelligence. I think inherently it’s how they’re built. I know there’s a study on it. I’ll find it and send it out if anyone cares. And I wrote about it a little bit in the book, and so you can internalize this and beat yourself up over it, but this doesn’t really happen with people who have a set set of rules that they follow every day. This is something that I hear mostly from people who are discretionary traders and to me that’s the harder way to go. But I think everyone gets out of the situation that they want. It seems that there could be some impulse control stuff here at work as well in that you’re making money, you can’t really tell in the short run if you’re lucky or if you’re good at least all I can do is behave consistently. So that’s really what my goal is on any given day to not get sucked in. Cause I have 35 years of experience. I have really good intuition, I have a really great feel for the market.
And it’s funny because when I talk about the book and how I started and how I had to drop off of many things, guess how I’ve been making my money day trading options this past month or so, which is not what I am, and really how I do, it’s a coping mechanism because of the nature of the market. But I’m not, if anyone asked me, I would say I’m not a day trader and I’m not really an options player either. Just with the volatility in the market, it’s a lot better for me to know what my max losses are or can be theoretically, at least when I go to bed at night because I’m taking risk home overnight over the weekend, over the holidays. I had positions through July 4th over the weekend. I like that. I only in fact to put on positions where I can stay in the thing.
But with the market being as choppy as it is, it’s like you get in knocked out, you get in, you get knocked out and you say, okay, that’s the world we live in. I have to adapt and how can I better reflect the risk in my portfolio given the market environment? And it’s like, I don’t want to be doing this it, it’s too, it’s too much work. I would much rather let the market do the work than to me do the work. The day traders turn trading into blue a job, they have to be at their screen. It’s blue collar despair. I guess it’s better than flipping hamburgers. But the best way to do it for me is put the risk on and then let it go and not watch it. Just let it kind of grow up. You’re planting, you’re planting tomatoes. I want a bunch of Bella de San Marzanos.
Yeah, those are the best ones. But yeah, you make a good point. And you also talked about impulse control for a second, and I think that’s a really important point to touch on because it’s not, trading in general isn’t just one step click and then it’s all put through. It takes effort and it takes time to put in a trade. Even if it’s only a couple of minutes, it still takes a reasonable amount of time. So I feel like if impulse control is something you have to work on before you make a trade, you should run yourself through a checklist. Am I doing this because of an impulse? Am I anticipating? Find the things that you want to improve on and just ask yourself questions before you trade. You don’t have to put a trade through. Like I said, you can go for it and you can chase that lottery ticket, chase the dragon. But most of the time it’s not going to work out. I mean at least percentage wise. And that’s the whole point of building a system, I think for everything.
Impulse control. So another way to do this if you want to do the homework at home, because it’s the kind of stuff that we do in the coaching, is to say, okay, go back and look at your behavior. And with all those kind of, I used to call them flyers, which means they were something I picked up on the fly. It wasn’t because I do all my, to me, I totally stole this from Paul Tudor Jones, I don’t know where I heard him say it, but he said something along the lines that trading is between five and eight o’clock at night eastern time right now. Of course the markets are closed then, or at least the outcry sessions are largely over in the us. But what he was speaking to was preparation for the next day. He could envision, and I can envision how I want to manage the trades, the trades that I’m in, and also the ones that I anticipate getting filled on because sometimes I’m looking at something, but the charts all over the place.
There’s no seasonality. And so I have an idea of where I want to get in, but we’re so far away it’d be driving from LA to San Francisco, and you’re not even in Ventura County yet. You’re asking how much longer. It’s like you got a fuck ton more to go. Or if you leave New York for Disney World is in Orlando Air Kissimmee and you haven’t made it through Delaware, there’s no point in asking how long it’s going to take because you still got 15 plus hours if you’re going by car, which is a whole other thing. Why would you want to drive in a car that long? So I don’t like to take things on the fly, even though I have really good instincts and really good intuition, I’m not really built for it here. If I was working at a day trading firm and we had that thing systematized and I had rules around it, I’m not so arrogant to think that there’s probably some training that I could benefit too because on all of this, so that could be beneficial.
So the world could be different if I had these opportunities, but being where I am and how I’m doing it now, kind of suboptimal. But the gentleman who wrote in and anyone watching, you can put yourself on a diet and the diet would look like this. You do your work the night before. If you’re short termer and you’re looking for what the catalysts are and you have to find it that morning, that’s awfully difficult again, because I think it’s looking at cloud formations, you know, can kind of see into things that you want to see. But you could say, okay, I have three trades today, three round turns, as we would say in commodities, which means long sell to go flat, sell short bite to cover, buy long, sell it flat, sell it long, that’s one round turn. So one entry and one exit. So you have three of those per day.
If you’re sitting there double clicking your mouse all day, or if you’re long and then you sell it long and then you sell it short and try to trade the reversal. To me, unless you have training in that, you could be feeding something other than your p and l and that you want the action or that you like the action. And so that to me is dangerous, is one of the most dangerous things that happened in this business is giving people access to their own accounts. Back when I started, there was no online trading. So you had to go to one of the five major wirehouses and open up an account so you couldn’t just open up your computer because most people didn’t have PCs. They were called clones at the time. And people’s sense of internet was a o l, which wasn’t really pure internet, it was Abu bulletin board, like a CompuServe.
And say to yourself, I’ve got two trades a day where I can get in and get knocked out, get in and get knocked out. And if I’m winning, I have to be up by a certain amount before I’m going to add another risk unit, even if it’s in the same name that I’m trading. So you could make all those rules up. They’re very important. I had them, ive, I put them to work very soon. I also put in stop stops on my overall account balance where I knew that bad behavior begets bad behavior and good behavior begets good behavior. Just like new highs beget new highs thing is making new lows. Get out of the way. Don’t try to pick bottoms here, wait for it to stall, wait for it to stop, wait for it to consolidate and then wait for it to break out.
Back to the upside if you need to be. Don’t try to be smarter than the market. So you know, can say to yourself, I’m not going to risk if I hit on my equity. If I lose 1%, I’m going to flatten out all my trades on any given day. So if I have a hundred K, as soon as my equity hits 99,000, I puke out everything. Doesn’t matter whether it’s winning or losing. And I’m going to go flat because job number one is to play superior defense. Most people come to the markets and be like, yeah, I’m gung ho, I’m going to trade all these things. And I got my email news alerts and they send me 15 names and somehow I’m going to have to pick one of them. I don’t know which one, but I’m going to pick it anyway. And they have bad money management rules to me.
That’s why the majority of people fail, is they don’t have impulse control. But the impulse control stems from not having good money management, which is the name of the game. It’s not about bullish flags and bear penance and all that other bullshit. It has it’s stupid 14 year old immaturity. Don’t be focusing on that. Learn about yourself. If you don’t know who you are, what the hell does it matter? If you know what a bullish flag is, it’s like the most amazing thing. 80 80, 80% of the trading is about you. So spend 80% of your time studying yourself. Most people have it fast backwards and they’re looking at the markets too long, not doing any personal work. Money is made and lost by position sizing and trade management. And that’s where if you’re going to think about trading, that’s what you need to work on. And that’s maybe half of the trading side. So that’s 10% of it. The other 80% should be work on yourself.
And that’s what the pros do. Pros aren’t stuck in Bloomberg reading news articles and doing back testing. That’s part of it. But the best ones are looking at their performance. That’s why we’re doing the show. Cause it’s the most important part of it. Important. So put yourself on a diet of the mind and limit your behavior. D, everyone wants to talk and Jocko and Goggins, but you have to actually do it sloganeering and putting the shit out on Twitter as if you’ve invented it yourself is empty and kind of shallow and banal to be quite honest. So same thing with weekly rules. You could say, well maybe 1%, I’m a little bit more aggressive, but I am going to set a 5% weekly rule. If I’m down 5%, it could be Wednesday, I’m done for the week, I’m going to come back Monday. Paul Tudor Jones had a 10% monthly rule where he didn’t want to have a double digit down month.
So if he was down seven, eight, 9%, he would really curtail stuff because he knew if he stopped trading in say, week three or July 20th, and you’ve got 11 calendar days, he’s going to sit on his hands and wait that out. I doubt the people watching can feel the burn of watching the market move and not participate. And that tells a lot about where the person’s head is at because the markets are going to be around for decades and decades. They’ll be around for a hundred years long after you’re dead. So you really have to think about what is it that you’re doing here and why do you do what you do? So I just knew very, very quickly if I acted like an idiot and blew up my account, what was going to happen. Everyone knows the answer could go back to waiting tables, could caddy golf bags or could go back to landscaping.
Cause I’d already done that very well and I had made a lot of money doing it, but I wanted to change my paradigm. And paradigm is the sum total of all your habits. So I had to adopt new habits. And the number one thing about trading is keeping your losses small and learning to play superior defense. That’s the difference between the pros and the amateurs is they think they wake up every morning and they want to be Lawrence Taylor, who’s the best defensive player ever in the history of the N F L, not the other LT who stole his nickname, LA LaDanian Tomlinson, who I think was a running back for San Diego.
So you want to focus on playing defense and putting those limits in, put it in for the day, the week or the month, but have ’em, or at least have an idea. Because if you don’t have any good boundaries with yourself, how are you going to have any boundaries with your p and l? To me, that’s car that’s correlated and that’s not post hoc ergo proctor hawk or any kind of logical fallacy. If you don’t have good boundaries, it’s going to find its way into your p and l. This again, is the kind of stuff that we do. We don’t look at charts. All that stuff seems really interesting. But human, if I know who you are as a person, I guarantee you, I can tell very quickly how you’re going to behave in the markets is all. Cause it’s all a personality type.
Right? Yeah, no, it’s a good point. And you know, talked about sloganeering and stuff like that. I think people do that way too much now. It’s crazy. It’s stay
Hard. I’m like, shut up, Goggins, stop being an idiot. I’m sick of your anger. Get over it already. You have all the resources in the world to stop being angry. Fuck’s sake.
I mean there’s definitely some motivation in that for some people. And I understand it. I used to goggins,
Not me, not me. It’s like a snooze.
I used to Goggins for a little bit, but yeah, it did get a little old after a while. I still think he’s pretty crazy. But yeah,
I like his first book. I don’t have time for audio books, but I have can’t hurt me. And I thought it great. If you haven’t read it or listened, it’s worth doing.
Yeah, it’s a great book. But
After it’s been through it once, it’s like, okay, I don’t need 20 years of that.
Right? Yeah, no, fair. I think it’s also important to mention with the slogan or thing, it’s like if you have taken the time to analyze things you need to improve on and you’re not doing it, I think that’s just willful neglect. And I’ve done this before as well. Sometimes it might not be intentional, it could just happen that, oh, I didn’t think about that or whatever. But part of trying to improve and knowing the things you have to improve on is keeping that in the back of your mind a lot of the time. At least that’s how I’ve improved on a lot of things really, really quickly, is with the eSports thing. The first team I ever practiced with, they were like, Hey, here are the things that you need to do better. And they broke it down list by list. They’re like, yeah, you need to communicate a different way.
You need to tell us how you’re going to be doing things and you need to think five steps ahead. And I’m like, okay, I can do all that. And it didn’t just happen. It wasn’t like you said, I didn’t post it on Twitter. Stay hard. I’m thinking about what I’m doing five moves from now. It was like I actually, in every game that I played, within every waking second of my three hours a day that I was playing, or four hours a day, five hours a day, I was thinking, okay, I need to communicate differently and I need to keep those things in mind. And I was actively trying to improve on those things
A hundred percent. And that’s why you’re, you’re a rockstar and that’s why you’re sitting here and not one of the other million frigging guys who write me and want help or want to, you don’t want the help. But they always want to barter. And I’m like, no, I don’t want the money. I’m not bartering. You got to feel the burn. Because if you give away shit to people, they’re not going to use it cause they don’t appreciate it because they have no skin in the game. So that’s why I’m, I’m willing to give this away. Everything else, you got to feel the burn. Two, it’s willful neglect, but it’s also for me, if I know that you’re not disciplined, trading is largely anonymous. We never really know who the contra broker is. You don’t know who the other, who’s on the other side of the trade. Obviously if you’re buying stock, someone has to be selling it doesn’t mean they’re bearish. They could be selling out of a position that they owned a hundred bucks ago and they’re getting out. So they’re not necessarily bearish, they’re just not bullish anymore. So you have to have two opposing views for the trade to happen.
And I don’t mean to sound this way, please tell me how undisciplined you are. Why? Because that’s job security. Because all the money that I’m going to make is already out in somebody else’s account. So the person who can de and show the most disciplines is the one who’s going to walk away with the most money at the end, or at least weather the storm to come back and play tomorrow. So I don’t want to sound this way, but the secret that the people who are selling their day trading systems and their swing trading lists and their flagship, other flagship is such a funny word.
First of all, there’s no guarantee that you’re going to stick to that, but it’s the undisciplined trader that’s going to give me job security. Because we feed off of those people because they’re basically philanthropists. You might as well give your money away to your alma mater or shul, which is a Jewish term for your school or your temple could be the same thing or your church or a hospital. Because then at least you get to direct the money to a cause that you believe in when you come to the market and you’re not disciplined. That’s great. I’ll take it all because I know if I’m in a losing position, I don’t stop and think about it. It either hits my stop or I puke it out right away. So when you talk about having discipline, it’s not something you talk about, it’s something that you live, it’s a lifestyle choice.
But the feelings that you need to feel when you’re disciplined can sometimes in interfere with the daydream of what it is that you want to feel. You’re just not there yet. You keep working hard, you’ll definitely get there. But again, we come back and this is a theme in almost everybody’s life in one way or another, the feelings that you want to feel next month are on the other side of shit that you have to do today that you don’t want to do. So that willful neglect, it feels good because you don’t have to engage, you don’t have to invite the failure. Cause I’d rather sit here and bitch and bellyache than actually do the frigging work and improve. So I could read Rumi and all these quotes and cut the screen grabs and send them out on Twitter, but it’s empty because although it might mean something to you, it’s not, doesn’t mean enough for you to actually do the work.
So to me that’s phony, that’s idolatry, right? Because who cares about Rumi anyway, not me. So I would say the best thing that you can do, and that’s why, look, it might not be the most popular guy out there, but I get results because I don’t let any people, anyone hide if they want to improve, people come back. The testimonials we have is not only is the trading better, but their lives are better. Because whatever you think you’re doing in the market, you’re probably doing in your life too. Especially in your relationships with people. Even if it’s for business, if they’re platonic friendships or if they’re romantic through your wife or your spouse or your girlfriend, your significant other, whatever it might be. All those things are patterned there. Everyone’s running an emotional system in addition to whatever discretionary or systematic rules they might be running. But as far as the gentleman who wrote David, you know, might just give yourself a limit as to how many trades you’re going to take per day.
And then having strict rules on what you think the signals are as far as having impulse control. You might give yourself a limit to how many positions you have on at the same time. That’s helped some people, it might a lot. There’s not really one prescription that could help you. There’s probably several. But for discretionary day traders, some of them can’t handle having more than one trade on at any given time. So that might be something that helps a person modify their behavior and curtail their behavior that stops them from getting into things that they might have regrets about. And then if you want to take it further, look in your life where you’ve acted impulsively. Because I know if you looked at me from the outside looking in towards me, you might say that he’s impulsive. I just didn’t have the fear of failing. Cause I knew that if I didn’t take the chances and change my behavior, adopt new habits again, what was I going to go back to? Blue collar despair. And I knew I was really good at that. I wanted to change my paradigm and go from blue collar to white collar. I knew that absolutely, I was crystal clear on that. So I knew I had to invite, you know, want to talk about the four years that it took me to make it. Every day was uncomfortable.
And everyone would say, well it sucked. It didn’t suck. It was really uncomfortable because I didn’t know what I was doing. I didn’t have the habits built yet. I was willing to try it because I to, I knew again what I had already done in the past. It served me well. It got me to that point. But then I wanted to change. I wanted to have intellectual property. I wanted to be a business owner, not a business manager. Cause I already knew I could work hard. I had been working since I’m 12 years old. So I had that. I knew that. And no one could take that away from me because I had the money in the bank. I had the results. So I wasn’t BSing myself that I had phantom success or I was making more out of something than it actually was. I knew I had great financial success, working hard and saving money.
But now I wanted to learn how to work smartly. How could I actually use my brain, which I kind of did in those other jobs because there is a bit of a knack to it. When you’re caddying, when you’re waiting tables, there is a small intellectual, but it’s still one of those things where it’s a job where if you don’t go, you’re not getting paid. So I knew day trading wasn’t going to really work for me because it was too expensive to do back in those days from a commission and spread standpoint. But I also knew that I didn’t want to be sitting at the computer all day. That was not the idea of macho stuff for me. I didn’t care about monitors. That stuff was all lost on me. I don’t fit the mold for that. I don’t find that people really need all that stuff either. But it certainly looks good in Twitter pictures, I suppose. Which of the great biggest comedy tweets, show me your trading set up. What do I got? I got a frigging Mac.
Yeah, for sure. I mean I think you brought up a lot of good points there. But yeah, I think if I had anything to add on that, it’s kind of what I’ve already said in this, just ask yourself questions before you take action. I call it my pre-flight checklist. Whenever I go to do stuff, whether it’s in regards to matchmaking or even in the play stuff, I always ask myself, am I doing this? Or what reason am I doing this for? And I have a list of things I go through. If I start performing poorly, I have a checklist. Have I been eating? Have I been drinking water? Have I gone outside today? Have I walked around? Because if I don’t do all those things, then I do perform noticeably worse, much worse. So I just ensure before I take action that I’ve asked myself the questions and I know that I’m not acting out of impulse because I am a fairly impulsive person, to be honest. I don’t think you can get into eSports without being impulsive. Yeah, that’s the whole thing is being able to think really fast on the fly. Really, really fast. So I gotcha.
Yeah, I, that’s the only thing I think I could add to that.
But that to me is as much as instinct as it is impulse two, you can look at the opportunity cost. If you looked at having that impulse to want to add an extra trade when there’s no si signal there because you’re overconfident, you could go back and if you’re honest with yourself, pull out all those trades and say, okay, here’s what my overconfidence has done for me. Here’s how I performed when I’ve isolated these particular trades. And then look and see what it does to your p and l. If it’s negative, the easiest thing is to eliminate it. If it’s positive, the best thing to do would be to hone it and to see, okay, is it more of an instinct, right? Because who really knows what overconfidence feels like in your body? It could be different for everybody. So you want to investigate that, isolate those trades and see, okay, well maybe it’s not all bad. Maybe there something in the overconfidence that’s like the appetizer for intuition.
Because if you do something enough, you can get a good feel for the markets. What you don’t want to do is look at your p and l and be like, I’m onto something. I put this trade on, therefore I’m great. You can’t reverse engineer that and make those conclusions after 10 years. You can look at your p and l and said, I did what I had to do and exhibited the type of behavior to get where I’m at. But on the other hand, this is where I’m at right now and I have to behave in a certain way because behavior predicts where you end up. So I wouldn’t necessarily adopt it and say that it’s all bad. You’d have to look at your p and l and say, okay, when I acted in what I thought was an overconfident matter, here’s what actually happened to my p and l and what can I do postmortem to change my behavior around that? What can I do you see to improve my performance?
So it gets deep. It gets really deep. You have to look at it. And again, this is one of the reasons why, again, you can do this stuff online and study if you worked. This is the kind of stuff that we would look at together. But it takes time. There’s a lot of time involved if you want to do it. So you can either do it by yourself or we can engage. But either way, it’s going to take a lot of time. And the question is, how quickly do you want to grow and what type of insight do you want? And how do you want to shorten your learning curve? It’s different answer for everybody, but how are things going in eSports for you?
Oh, so it’s really good. Yesterday was a bit of a difficult day with matchmaking, but that’s fine. I had practiced later, so I think I played in total six and a half hours yesterday. But yeah, I ended up, like I said, everything’s kind of like chess in this. And each different piece has a different combination of things you can do with it because there’s unique utility. And so, hold on, my dogs are freaking out. Hold on. Okay, we’re back after a little minor interruption there. But no, everything’s really good. I came up with a really interesting combination of these different characters that you can play. Cause they all have unique utility and it’s kind of like how popular combinations of things. Or there’s a fashion line that everyone loves this year or for summer or whatever it’s called, the meta in this game that we play. So if there’s a particular combination of these characters, it’s considered to be the meta for a specific map and it changes based on every map. And
I think I
See came up with a meta for a map that just came out that nobody’s come up with. Holy cow. And so I think I spotted something before anybody else did and I actually ran it and practiced with my team last night and they’re like, dude, you’re crazy. What are you talking about? This doesn’t make any sense. And so what I did was I sat down and I developed strategies. So I was basically writing a book on the game how I wanted it played. And I developed protocols. So if this happens, common scenarios that the enemies would do on attack or defense, I was like, if this happens, then here’s what we do. If they do this, then this is the utility I want to use to punish them. And then this is how we’re going to use the utility to get into the fight again. And so I spotted some really, really unique stuff. And needless to say, we won with a landslide last night in practice and it was really, I, I’m excited to keep working on it. I think I came up with some really cool stuff.
So again, preparation.
Yeah, yeah, yeah. Done it probably I think 1130 at night, not five to eight at night, but 1130,
Which is kind of the culture.
Yeah, yeah, no, and I kind of stray away from that because I like going to bed early at a reasonable hour. But yeah, I do tend to stay up and that’s when I develop all my really good ideas. That’s kind of how I’ve always done it I guess.
Yeah. Well you all should know ganja is ranked in, well within the top one half of 1% of players in his game. He’s badass and that’s remarkable. He’s not looking for people calling up looking for freebies, but because he is busy and when he is not busy doing his shit, he is working with me. So if you want coaching tips on that stuff, there’s probably other places. But nonetheless, when you’re high performance, there’s lots of things that you share. And we shared a lot of common personality traits. We understand each other very, very well. And in jujitsu we worked together quite a bit as his eSports stuff was evolving. So again, folks put yourself through the ringers, the harder you are. There’s a saying about practicing hard. And if you can practice hard and think about what Kobe Bryant used to do, he’d be out shooting at four in the morning till six, taking a break, hitting the sauna or the steam room, going back out another two hours, having a lit light breakfast.
Then his teammates would be showing up at quarter to 10, 15 minutes before practice from 10 to 12 and he’d already have four hours of work in by the time they got there and they would only get there 15 minutes before. And these are his teammates. And so in my opinion, the harder that you work in practice and get in your preparation, I think that’s going to show up in your trading if you’re trying to practice and do that stuff like the morning of, you don’t give yourself enough time to really get ready and to learn your craft. Very, very difficult to do things on the fly. Cause at that point you’re just kind of guessing and throwing darts. So you really have to put the time in and do the practicing, which is why I do that in the evening. Come back from Juujitsu.
I get my head kicked in most nights, even though I’m really good, I’m always training with people who are better than me. Saturday I got smashed by two black belts, but that’s the way it works. If I don’t like it, I can quit. But I also learned a lot. I also needed the entire weekend in a good chunk of Monday to recover because my body aches. But the thing is like you learn how to perform best when you’re doing your practice. And so what I find is that most folks aren’t going through the rigors of practice enough. They think what they’re doing is practice because they’re sitting in front of the screen. But I would argue and debate that that’s not practice, that’s not the insightful work that you think it is. And then ultimately, if you have a wishlist, if you haven’t done any personal work, not that you even need fixing, but just learning about who you are, what makes you tick, what things do you want out of your endeavors?
Are your goals realistic and attainable? Do you have a fundamental understanding of how markets work, right? Because there’s a gigantic difference between equity markets and futures, co commodity futures markets. And it’s not just the leverage. So there’s an enormous amount of work to be done. And as I like to say before we go, if this took you all a year, which most of you think that you don’t have because you don’t like the feelings that you have to feel when you have to be patient, you still would’ve done or did what I did and what took me four years. So it’s going to take time. Very, very few people walk into this business and start acting like Michael Jordan, who is the best all time basketball player ever.
Despite what you might think. Best offensive player, best defensive player in the same year. I don’t care about total points. It’s all bullshit. You got to put the work in and the more work that you’re willing to do and the more you’re willing to surrender to that process and know that it’s a process and know that it’s an ongoing process, I think you put yourself in a really humble mindset. And that’s a good place to be if you’re trying to be in the markets because the markets are very erratic in the short run. They’re very random. You can’t really tell what’s going to happen. You have good insight, but it’s awfully difficult to predict. The best you can do is enter your stops and protect your capital. And if you make money then great, but you have to put the time in. That really is the number one thing that when I listen to people when they write in on their emails is that they just haven’t put the time in.
And there’s a lot of reasons why they might not have it, right? If they’re working nine to five and they’re getting up and trying to trade for an hour or so in the morning and then trying to do more at the close, I know people that can do that. But it’s still is going to come down to your preparation. And if you have a personal life and a relationship and you’re working a full-time job and then you want to hit the gym, you know are at a bit of a disadvantage because you just don’t have the time to put in.
And I have empathy for that because I know how frustrating that might be. But just realize if you don’t have the time, you’re competing against people who do and you’re competing against people who are putting in a lot of time and it’s mindful work. It’s not like, well, I’m going to put in eight hours of quantity, right? Because everyone has seen the study when you’re doing a nine to five job you’re doing out of the eight hours that you’re there there only four or five hours are actually quality work. You know what I’m saying? People still want to fucking unionize even though they’re getting paid for more that they’re not doing. At any rate, appreciate the comments. The folks who have downloaded the audiobook version of the Inner Voice Trading, which you can get at Martin Chronicle in the top right corner. We’re going to notify those folks first just because it’s easier and they’ll get the date and the time for the webinar will.
We’ll be talking about a whole host of stuff, trades and some of the stuff that we do behind the scenes that we’re not going to cover here on the channel. And then also plans for the channel. How are we going to add some education and marry your emotional constitution with different trading strategies? See if that can help you amplify stuff. And so again, seating’s going to be limited only because I know everyone has questions and the worst thing to do is open it up to a thousand people, which could easily happen given I have been given the audio book away for 10 years, so I have a big following in the email list, even though I don’t email them all day long about offerings, it’s going to be held for people who actually want to do the work or want to get pointed in the right direction. So that’s why we cut Victor’s class off because we didn’t want a million people not getting any attention. So it’s easy to sign people up, but we have to be considerate of the user experience and make sure everyone’s going to get some FaceTime because again, the numbers are really vanity metrics. What’re trying to do is actually help people. So the work has to be high quality. But that’s all I got. Thanks everyone for sending in your comments. Appreciate all of that. And Danja, you got anything left?
No. Thank you guys so much for the support. We really appreciate it. Thank you for all the comments. Thank With that said, we will see you guys in the next one.
Take care. See you tomorrow.

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Everybody happy Tuesday. Thanks for being here. I give another comment from QV 36, and this was also on your trading style, reflects your willingness to deal with uncertainty. Man, if I can tell you like that was the biggest thing for me, the more that I was willing to feel uncomfortable and whatever that might mean for you, the better I actually did. Cause I let go of the need for the feedback mechanism that you get, like the emotional feedback mechanism. So the comment is had a great day yesterday. This also came in last Thursday, had a great day yesterday, trading Apple Day trading and flat overnight this morning was worried a bit, not sure why, maybe psychological but wasn’t feeling good and at the top in terms of confidence ended up hitting my daily stop today morning within the first 20 minutes of the market opening.
Feeling bad, but trying to learn from my mistakes will go slow tomorrow as it’s Friday. So thanks for sharing QV 36 when you put on, I don’t know where QV 36 is in his or her trading career or journey, but I would like everybody watching whether you’re institutional or whether you’re a beginner, to get away from the whole, I make money, I feel good, I lose money, I feel bad racket. Don’t know why that would even come up. Obviously if you want to endeavor to do this and get professional like results, you have to have more money net after all of your trades. The quantity of winners is not necessarily important to the extent that net net of everything, you have more money in your account than when you started. But if you look and you’ve done any type of back testing or you’ve kept accurate records that maybe 3, 4, 5 times at a 10, it’s not going to be more than 50% unless you’re super lucky or you’re in just that window of time where you’re going to win and the rest of the time you’re going to lose.
That might mean five to seven times, maybe even. I know guys that trade in five to eight times out of 10 they lose. And those are just the numbers. It doesn’t say anything about their ability. It doesn’t say anything about their intention. It doesn’t say anything about whether they’re going to make it long term or not, is in the short run. Everything is random. So when I know walking into a trade that six times ran, just generally speaking, six times out of 10, a person puts on a trade that they’re going to lose money at their predetermined stop. I don’t know how
You can internalize that and feel bad about it when you know it’s coming and I don’t want to get into somehow you’re a masochist, it’s coming and somehow you benefit from that. I don’t know enough about the psychology of this particular person to speak to that, but what I always celebrated for myself was that I was in the game. I was executing because I was in the process of figuring out the solution. I remember that very, very vividly that I was in the process of figuring out the solution of how to make money in the markets and I was doing so by making attempts. I was panning for gold. I didn’t necessarily care about the outcome of anyone, the outcome of any one particular trade. And I think that’s where you need to put your mindset to liberate yourself. Look at your grubs steak and say, I’m willing to lose all of this money to learn my craft. That’s the tuition, that’s prepaid tuition that’s in your account that you can get to keep. Any of it is God’s grace.
So the whole approach to me on how traders or aspiring traders come to the market is completely wrong. And I’ll be bold enough to say that this may or may not be the money that you turn into the millions that you want. You know very well may need to refund you, refund the account. Maybe that’s not what you want to do, but to me it’s life on life’s terms and you don’t really get to make that decision. The best thing that you can do is take your chances and see how it goes. Keep very, very accurate statements and trading journals. And by journals I don’t mean diary. I mean I want the who, what, when, where, why, and how. The date, the quantity, the entry, the trade management. What did you do when you were in the trade? Where was your initial stop? Where did you eventually get out?
What was the result? What was the cost? What’s the slippage in skid? And then if you’re so inclined, if you’re a discretionary trader, you need to know why you put the trade on. What were you thinking? Because all that’s super important, right? And if you’re going on intuition, which is completely legitimate, you need to be super thorough about what led you to have that intuition. And the more detail you can put in there, the better you’ll be to grow. Because if you do that 20, 2500 times, you’re going to have a story that can give you really good feedback as to what you were thinking before you’d put on the trade, what actually happened expost facto. And if you can look at that over 50 to a hundred times, there’s very revealing stuff there. You might find that you think you have intuition, but you actually don’t have a feel for the marketplace.
You might also learn that you in fact have really good intuition, but you mishandled the trade because you didn’t know how to manage the risk, which oftentimes comes from your unwillingness to adjust your stop higher because you don’t want to get knocked out of a trade. This happens a lot with options traders. They’re reluctant to roll cause they’re sitting there going, look at that beauty, look at that baby go, I’m just going to sit here and look at it. It’s moving. Shit’s moving. It’s a beautiful trade. And you learn the hard way that if you don’t know how to roll right, you end up leaving a lot of money on the table and sometimes that money evaporates because with options, there’s a lot of moving parts that go into an option. Trade being profitable, you’ve got the volatility, you’ve got all the Greeks going. You see all that.
Now, this is going to be an exhaustive discussion on options. It’s going to be one more where it’s oftentimes reluctance to do the right thing because you don’t want the feeling that you’re feeling in your body right now to end. I’ve been there about a million times. So you want to dissociate the feeling, making money and feeling good, losing money and feeling bad, and get yourself to the point where you put on trades and you feel the same. Same at the entry, same at the exit, make or lose money, you feel the same. All you’re doing is executing your rules. You’re powerless over the results. Now, I can’t look you all in the eye and say, I haven’t felt frustrated over at certain periods of time. I definitely have. I’ve had losing streaks, I’ve had winning streaks. If you do it long enough, here’s what I guarantee you’re going to have ’em too.
If you can talk about having decades of experience, I promise you, you’re going to have really, really good times and you’re going to have times when you look up into the sky and you have what Peter and I would say, where those park bench days where you’re over at poets walk, literary walk, whatever they call it anymore in Central Park, and you’re sitting there looking for the meaning of life. Everyone goes through that. But the best you can do is have a plan and execute that plan. And having one data point on one trade tells you pretty much nothing and you can’t make any conclusions. You can look and say, okay, here’s what I intended to do. Here’s what I actually did and here’s how I can explain the variance. This is actually a very positive process to go through. It’s like post-mortem kind of a deal.
You might also kind of understand on a scale of one to 10, where is your sense of discipline at that point? You see, that can help you learn. But again, it’s not going to come from paper trading. It’s not going to come from those funded accounts that give you artificial rules that might not really gel with who you are as a person. You don’t want to have any boundaries at this stage. If you’re just starting out, you want to kind of FreeWheel because at the beginning, again, if it took you, if it takes you or it’s taking you, you’re in the process of figuring it out. Let’s say that it’s a two year. You will have discovered quite a bit about yourself in about half the time that it took me and I’m very successful. So go with the process, be in it, be with your feelings.
You see this way it can help you grow as a human being and take it one day at a time. Because ultimately I would say in all of that process, the one thing that you can benefit from is looking at the variance between what it is that you intended to do and then what you actually did try to figure out. Cause it’s usually an emotional, sometimes it can be trading tactics, but after a while you know enough about trading tactics to get the job done. The question is why don’t you do the right thing? Because it’s either you’re going towards a feeling that you want to feel or you’re oftentimes avoiding another feeling, right? People are making money in trades. They oftentimes buy a stock at 10, it goes to 20. Your original stop at seven. You can’t have your original protective stop in at seven at that point, right?
Even if it goes up 12, 13, you can’t leave your original protective stop at seven, right? It can’t be $6 difference at that point. So that’s one of the things that I see happen all the time when people write in a call or ask about stuff, is that they see a winning trade. They don’t want to add cause it’s not where their head’s at. They don’t have the emotional constitution to add to the risk, even though they’re making money because they bought something at 10, it’s at 13, it’s up 30%. They can’t possibly buy more. Remember when Tesla went from a hundred to 900, even if you bought it at 300 after it had already tripled, it, tripled again. So you can’t say any of that’s predictive, you see?
So again, that’s today’s lesson is to get out of the emotional aspect of resulting or thinking that because you lost money, that somehow you’re a loser or you don’t know what you’re doing. The trading rule associated with that particular trade could actually be very, very lucrative. You just don’t have a big enough sample space to make the determination that you suck or that you’re good if you put on the trade and you make money. It feels good to make money. I know it’s a human condition to feel those feelings, but I don’t think the result of any one particular trade can really explain anything. The only thing you can really do, and I’ll say it again for the third time, is write down what you intended to do and be brutally honest with yourself. Then write down what you actually did and then try to understand the variance. A lot of times it’s not about tactics, it’s about emotions. So you need to understand that your emotions are affecting your behavior. Sometimes you can’t see it until after the fact, and if you can’t explain it, then that’s where we
Come in because we can help you figure out what your subconscious is doing for you. Right? That’s a very, very important part of learning about trading is to understand what’s going on with your emotions and how that affects your behavior. Ganjo be here tomorrow. Looking forward to it. He’s always very, very insightful. We’ll have more follow up on a whole host of things. Please like and subscribe. You can check the bell thingy because it’ll alert you, you know, this and that. And please keep your questions and comments coming. We’ll keep the conversation moving forward. I appreciate y’all being here, and I will see you tomorrow with ganja.

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Hey everybody. Welcome back. Thanks for being here. So I got a lot of great feedback on the episode that I did with Ganja last week, and so some of you commented on the video itself. Some of you wrote me via the blog or just emailed straight out. So I’m going to condense a few of the questions. I saw something from a longtime follower, second entry long, which you can see we also got some comments on. Your trading style reflects your willingness to deal with uncertainty. So I want to do that one first. Second, entry long certain times, aspiring traders are restricted by the circumstances of their choosing. So I want to stop right there. If you fall in love with a woman and you want to date and you eventually want to be exclusive and she says, I still see my ex, or I’m dating other people, if you move forward from that point in time, you don’t have the right to complain about what she’s not doing with you or what she’s doing with somebody else, right?
See, someone agrees with me. And so when I think about these self-imposed limitations, I don’t look at those funding accounts as prop trading accounts the way that you do, or not necessarily the person writing this comment, but the way the rest of the trading community can. Again, it’s a paid for solution that’s supposed to help you not feel feelings that you don’t want to feel, which are the feelings of asking people for money to fund a trading account for you from which you can trade and or share in the profits. So I feel like the problem with those accounts are, as we were talking about the willingness to deal with uncertainty, I think the point that I made that second entry long was kind of parroting is that you can’t deal with the uncertainty because you can’t take the trades home overnight. That’s not for this particular account fund, funding source where they’re not even really funded you.
You know how they work. You’re not allowing yourself to feel the uncertainty because they don’t allow you to take the risk home. So you don’t have to live with the probabilistic outcome. You have to cauterize your trades by the end of the day, whether they’re winning or whether they’re losing. And so again, in that relationship example that I gave you, you are saying Here is the outside world and I’m letting it affect my inside world. And I don’t typically operate that myself. I can’t go back 35 years and say, what would I do then with what I knew given the rules that they have here. My understanding what these places is that they’re not actually right, entering the trades and managing risk, they’re collect, collecting subscription revenue from its participants
And they’re likely marking things to the market and then paying you out based on your wins from everybody else’s subscriptions. There’s also a waiting period where I think they chop up your gains and they pay you out in equal installments over a certain period of time. So you don’t even really get all your money up. So it might be an easier way in than feeling the feelings of rejecting rejection or feeling feelings of fear of asking people for money. If you go to Spotify or you go to Martin Chronicle, you can look up episodes that I did in the past about trying to find backers and or investors. So there’s a big compliment. I’m not going to repeat myself on that cause it’s already been done. So I would just be mindful of putting yourself then deliberately in the rock and between the rock and the hard place, as it says in the comment, you can kind of see it. It was posted on last Thursday, I believe.
So again, you can say, well, I reject that. I reject these funding accounts. I don’t care that I’m getting 90% off and all of that because now I have to adopt other people’s trading rules. So now you’ve taken trading, which is hard to begin with, and you’ve created a coping mechanism. So you just have to be super conscious of what you get involved with because it seems like it’s the easy way out because then you can just adopt. But you are who you are and that’s why I see most of the people not making it through these programs. They sign up for, some people have more than 10 accounts and then they’re trying 10 or 12 different strategies. One, one strategy per account because all they’re looking for is to try to get funded on any one of them. But then you have to say, I look at that and I see desperation, desperation for funding because now it’s like, how do you even know that that type of behavior is really congruent with who you are as a person, right?
Long term, if you’re just trying to throw anything at the wall, something will eventually stick. You see, now, I admit when I started learn from me, I tried to trade four different asset classes and virtually every different timeframe that you could try, you see, and I had to come to my own sense and say, this isn’t working, and so I don’t want to see you throw again good money after bad because you’re desperate to raise money. I would much rather you have you go and deal with a business person who understands risk, they’ve made and lost money already in the business world, you won’t be the first person to lose them money where you can really learn your craft and become who you are and who you’re meant to
Be. You see, it seems like it’s a bit of a panacea because there’s no risk, there’s no feedback. You have a credit card, you pay the fee, you follow their rules. It’s like, man, easy peasy. But there’s a lot more to it. And it’s not like it’s the small print, but it’s just that trying to buy somebody else’s trading system, they’re imposing rules on you that will restrict your and stunt your growth. So even though you think the promise is that you’re going to get funded, the rules to me are too restrictive for you to be able to make real money. You see? And so I want you to be careful when you go out there, again, when you start looking at the solutions, you’d almost start to think that there’s people who make more money in trying to provide you trading systems and solutions than actually those, than there are people who trade and make money by trading.
It’s quite remarkable, I’m feel, the more I think about it, there wasn’t an opportunity for me with many, many of the things you have available. And I think in many ways it was a blessing because I really had pick up the phone and call people, meet with them, have copies of my resume with me and a cover letter or read a couple of books. But again, most of it was putting real money on because I had to feel the burn. And so I want you to be mindful that if you would go to adopt any of these types of trading platforms, the restrictions that they give you might not have anything to do with what the right trading style is for you. You see that? So you’re, you’re coping at the very beginning with that. That’s why I don’t advocate. That’s why I don’t have these people on the show.
That’s why I don’t do a deep dive or a case study because I’m just generally not for it. Some of you might participate it with it and see that’s how you’re going to raise your capital to trade. But again, I would want something that is much more liberal and not restrictive. You see, that’s my personal preference for you because that’ll help you develop into the trader that you’re meant to become, not develop into the trader using somebody else’s rules. Because whether you buy somebody’s box in a system, their flagship program, they’re penny stocking this thing long and short, it doesn’t matter. It’s somebody else’s rules. The best way for you to figure it out, just like in painting, is take out a bunch of cover colors, take out some blank canvas, paper, whatever you might, and start moving color on canvas. See how it feels. Find out what your gestural marks are. Find out what color combinations you like best. I don’t like the idea that you have to step into something and I’m reading to see if I missed anything here from the comment. Again, appreciate second entry long for making the comment, but I think this
Is effectively a truism, right? This is something that we’ve spoken about here in that every decision that you make effectively, there are trade-offs, and I would much rather have you go to the marketplace and do this yourself with your own money rather than try to use other people’s money and then adopt bad habits because you have to fulfill somebody else’s terms. I talk, I spoke about other proprietary trading firms that make you offset winning trades by the end of the day, just because they don’t allow you to take risk home overnight. To me, that’s irrational. But everyone has their own thoughts on how things should go when it’s their company. So at any rate, please like and subscribe, keep the comments coming in. I look forward to seeing you. Ganja will be here Wednesday, and I’ll see you tomorrow.

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This is an automated transcript