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These 5 Traders Can Teach You More Than 50 Trading Books (1-Hour Masterclass) — Transcript

by Etienne Crete - Desire To TRADE · 12,555 words · 1,718 segments · language en · Watch on YouTube

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0:00Throughout my trading journey, I've
0:01learned a lot more from talking to
0:02traders than from books. You could read
0:04books about theory, about the markets
0:06and stuff, and you might learn a few
0:07patterns, but talking to traders is
0:09really the key to becoming successful.
0:10You learn how they do things, their
0:12mindset, their perspective on the
0:13market, and this makes a huge
0:14difference. So, we decided today to
0:16focus on five traders that can teach you
0:18more than 50 trading books. You hear
0:19advice about mindset, about the
0:20psychology of trading. You also kind of
0:22see the strategies they use, even though
0:23that's not the main thing that really
0:25matters. But listening to these traders,
0:26I guarantee will teach you more than
0:28books. There's a lot to cover here, so
0:29let's dive right into it.
0:33>> I can give you my opinion on how it
0:35could be. I won't be able to give you an
0:37experience because I haven't broken that
0:39plateau because I never thought I'd have
0:41I'd had one. I mean, I've been trading
0:43since what, uh, 2009 until now. I've
0:45been trading for a very, very long time.
0:47Um, you know, all my white hair is in
0:49trading, but I've been trading for a
0:51very, very long time, and I never had
0:54this issue. Like, the number was never
0:56an issue for me. um until I just
0:59realized that it might not be the
1:02number, but it might be your surrounding
1:04environment that makes you focus on the
1:06number and that can derail you. And I
1:08didn't think that's a possible thing.
1:11You know, there there's a there's a
1:13story um that I used to hear one of my
1:15mentors say um that when he bought one
1:18of these companies that he was looking
1:19at, this was one of this was a company
1:21in a uh in Los Angeles where he used to
1:25park at. He used to park in this garage
1:27and go into um uh the airport, take his
1:30flight constantly. And this particular
1:33garage, they were so unique that between
1:36each each parking slot, they used to
1:38have these leather dividers so that way
1:41when you open your door, you hit that
1:43leather divider so you don't ding the
1:45next car, so you don't scratch the next
1:47car. And these little little things that
1:49made them feel like this is a great
1:51company, you know? um they think really
1:53well. They they they can raise the
1:56prices. There's no competition nearby.
1:58So, this is great. And and it's locked
2:00in with airport commuters. So, he's
2:03like, "If this business ever goes up for
2:05sale, I'm buying it." You know, whatever
2:08the price is, given if as long as it's
2:09reasonable, I'm buying this business cuz
2:11it's a fantastic business to buy. A year
2:13and a half passes by and out of nowhere
2:16Uber comes into market and then suddenly
2:20he realizes
2:22forget everybody I myself don't drive to
2:25the airport anymore. I don't park at the
2:27airport anymore. I take a Uber to the
2:29airport and there goes parking. So this
2:32was one of those things where I I I
2:34planned for it that numbers will never
2:36be an issue for me because it's just a
2:38percentage of your account. And I never
2:41imagined that someone putting the
2:44attention on the numbers from from
2:46outside of what I do will have the
2:49effect. Same thing with my mentor's
2:51story that he was telling me about.
2:52Sometimes you don't know what comes in
2:53from other other sources that completely
2:56throws you off your game. Um so you got
2:59to be ready for these things. So to
3:02break plateaus um I think the first
3:04thing would be to you know never have
3:07enough or high enough ego to say
3:12you won't be taken off your throne. You
3:15should always be on your toes ready to
3:18say the higher you climb the more
3:21they're going to come after you. Stay on
3:22your game. Do the best you can cuz
3:24they're coming. You know um that's one
3:27way. It's not a fun way to live but that
3:29is one way. You know, the higher you
3:30are, the more they're going to pull you
3:31down. Look at what's happening to Dubai
3:33right now. Every single firm, every
3:36single news channel out there is talking
3:38trash about Dubai. And why is that? If
3:41you ask anybody who lives I live in
3:42Dubai. If you ask anybody who lives
3:43there, they'll tell you things are fine.
3:46There's nothing there's not a single
3:47problem there. Everything's okay. But
3:49you turn on the news and it looks like
3:52everything's on fire. No one has food to
3:55eat. Everyone's like crawling
3:56underground. Like, it's not like that.
3:58We're on the beach. We're sipping my
3:59ties. Life is good, you know. Um it's
4:03just people want to pull down what
4:05what's climbing fast to the top. Uh it's
4:08just human nature, right? They they want
4:10to hate on things that are that are
4:12great. Um so yeah. So, and if all of our
4:17aspirations as young developing traders
4:20that are up and coming, the goal for a
4:24lot of people would be to be the best
4:25that they can be, but they don't have
4:28that planned in that as you're going to
4:30be the best that you can be. There is
4:32this negative energy that that gets
4:34attracted to this, you know, whether
4:36it's your friends or your family members
4:38or anybody else who wants you pull you
4:40back down. There's only so much you can
4:41just cut off people, right? it will come
4:44after you. Um, and you're going to have
4:46to fight that and you will get beaten
4:48down every now and then, but you got to
4:50get back up and, you know, keep going
4:53through breaking that next plateau,
4:55breaking that next barrier, and then
4:57you're in another slot, and then you got
5:00to break that barrier, then you're in
5:01another slot. So, you know that I don't
5:03think that ever ends. Um, so you always
5:06need a better mentor each time. Maybe
5:09you need someone who's been there, done
5:10that a little bit to share some
5:12experience with you. What do they do so
5:14they can quit their job? That is a
5:17pressure point keyword right there.
5:20Because when you go into trading, the
5:22the whole game is can I make more than I
5:24lose? It's the same thing as uh
5:27exercise, right? Can I burn more energy
5:30than I consume energies, right? It's as
5:32simple as that. Now whether you consume
5:34it in forms of asai bowls and matchas
5:37and all this stuff that that's all
5:38secondary. It's can you burn more than
5:41your intake. So in in trading it's it's
5:44the same thing. Can you earn more than
5:47you burn uh with your losses? But when
5:51you add in that word of and then at what
5:54point can I quit my job? What happens is
5:56that word is translated into I earn this
5:59much from my job and I need this much to
6:01live my life. therefore I got to get
6:03this much in this frequency. That's a
6:06very strong barrier to break. Um because
6:10mentally a person will be set at well my
6:12rent is this much and the bill for the
6:14rent comes every month. It's not
6:16whenever the landlord feels like it.
6:18It's every month. You know I got to eat
6:20and that's every day you know that's not
6:22like whenever I feel like it. Um so
6:25there are certain things that comes at a
6:26regular frequency and you can't really
6:28control that frequency. So, if you're a
6:31forex trader, um it's a lot tougher to
6:35do that because you need to give
6:36yourself some time. If you're a stock
6:38trader, that's different. You can find
6:41pairs that are moving that that can make
6:43you some money on a day-to-day basis.
6:45But on in the FX side of things, you can
6:48only truly make money when the markets
6:50are moving. If the markets are not
6:52moving, you're not going to make money,
6:53period. You're just going to give give,
6:56you know. So if you can live with that
6:59then you can say in a year I will make
7:02so and so but it's very difficult to say
7:05in a week in a month I will make so and
7:07so that's hard at least in the FX world
7:11in the stock world it can be done in the
7:12options world probably can be done too
7:16um so that's my take is is that that
7:18word of can I quit my job what must I do
7:20to quit my job once you can remove that
7:23barrier and you understand which asset
7:26class can hit your goals, then the very
7:29first thing would be start small. Find
7:32out where your consistency level is. Um,
7:35find out what kind of edge trader are
7:37you. There's two very simple answers for
7:39edges. The best edges on the planet from
7:44the best traders. Low win percentage,
7:47high reward. Now, low win percentage
7:51destroys a new retail trader's
7:53confidence. When you have 10 trades and
7:56you have only two winning trades, that
7:58person is is mentally drained. He he's
8:01dead mentally. He cannot take the third
8:04trade that gives him that big winning
8:06trade that he needs. He's just
8:08destroyed. So
8:11if everyone is going after the one
8:13that's the high win percentage which
8:16also can be done well and if you're
8:18going for the high win percentage uh
8:20riskreward game then the expectation
8:24needs to be lower.
8:26So you got to find out which one is the
8:28personality first and then once you find
8:30out which edge is suitable for you then
8:32you find out you want to do mean
8:33reversions, you want to do breakout
8:35trades, you want to do range trades,
8:38then your personality will suit that
8:39type. And then once you figure that out
8:41and find out what your consistency is,
8:43then you build a number from that moment
8:47onwards. But you can't really build a
8:49number and saying I want to make
8:50$500,000 a month from trading. So let me
8:54learn everything that there is or let me
8:56learn something from this guy on the
8:58internet who's famous or this guy on the
9:00internet. You got to find out who are
9:02you? You know what what makes you tick?
9:05What makes you aggressive? What makes
9:07you conservative? Uh uh and so you can
9:10there's quizzes you can take for this.
9:12Um and then you can find out what your
9:14personality type is and then there is an
9:16edge specifically for that that you can
9:19do really well in your again personality
9:21types you know day trading you got to be
9:23you got you have to think of things
9:25quickly you have to think of your money
9:28management quickly you have to make
9:30decisions of um beyond this point so
9:33what happens in day trading is your
9:35brain needs to calculate odds quickly so
9:39it's like when you when you go to the
9:41casino and you're playing poker or
9:43you're you're watching TV and or let's
9:46say you you're going to bowling.
9:47Everyone knows bowling, right? You're
9:49going bowling and there's 10 pins in
9:51front of you. When you start the games,
9:53like what are the chances of you making
9:54a strike? Well, if you're going to take
9:56a 40 kg ball, then the chances are very
9:59low. But if you take a kilogram ball
10:01that is suitable to you, there's some
10:03chance out there. Let's say you you hit
10:06it the whole right side, all the pins go
10:09down. Now you're about to go again. What
10:12are the chance you're going to knock out
10:13the rest? It's still pretty high. But if
10:17you make it where only there's one pin
10:19on the right side and one pin on the
10:21left side left, what are the chances
10:23that you're going to make it now? Your
10:25your odds have decreased dramatically.
10:29So when you're trading and as the trade
10:32evolves, your brain is saying, "Oo, now
10:34the odds are not in my favor. Now the
10:36expected value has shifted. It's not the
10:38same anymore." So you can have a perfect
10:42hand for poker like you can have you
10:45know uh two kings and then as each card
10:49unfolds
10:51your odds change.
10:53The so the market is no different. As
10:55the market evolves your your odds of
10:58what you're holding on to evolves too.
11:01So in swing trading you have a lot of
11:03time to think about that and saying
11:04things still look good. Let's keep
11:05going. in day trading it's like you got
11:08to be nope not anymore things are good
11:10or things are better size up size up you
11:14know you got to be quick on your feet
11:15for that stuff so
11:18um if someone is starting out new and
11:21wants to become pro I'd say even if you
11:26fail start out as a day trader
11:29and that's a very controversial thing to
11:30say but even if you fail start out as a
11:32day trader get your brain thinking
11:36in terms of odds quickly. And the only
11:39way to do things quickly is either you
11:42back test the hell out of things and you
11:43do 500 examples sitting behind the
11:46screen clicking next, next, next, next,
11:48or you do it real life and then you do
11:51200 of those in real life for the span
11:53of one year and you will know what needs
11:56to be known uh very quickly. As long as
11:59you do some recap and post analysis
12:01every day, um you can become a good
12:04trader uh in less than a year's time
12:06very very quickly, even if you're a
12:08losing trader. Grow growing up, I was
12:11always the kid that if my parents gave
12:13me money, like let's say they gave me
12:15$20 for allowance, I'd spend the whole
12:18$20 on my friends and saying, "I got you
12:20guys. Don't worry." So there was no
12:22concept of how much is good. 20 I should
12:27split that into 10. and I should, you
12:28know, subdivide it. Like I didn't really
12:30do all that stuff. I would just have the
12:32amount and I would say it's good next.
12:35It's good next. Like, and when it when
12:38it came to trading, as I got my
12:41consistency going a little bit, sizing
12:43up was never an issue for me. If
12:45especially if it was like the right
12:47thing to do now is when you see the odds
12:49are in your favor, go from 2% to 8% or
12:5210%.
12:54Great. You know, I can do that. I mean,
12:56there's no fear of seeing that P&L
12:59ticker positive negative between
13:01thousands and thousands of dollars or
13:03tens of thousands of dollars or hundreds
13:04of thousands of it didn't bother me. But
13:07it does bother me when other people
13:09started to tell me, dude, do you know
13:11how much that is? You know, blah blah
13:13blah. And that got to me in a positive
13:16and negative way. But to me personally,
13:19it never had any effect on me
13:21whatsoever. So I' I'd say being social
13:25affected me but um but it it is what it
13:30is. You have to go through it. Uh you
13:31have to go through it. If you can keep
13:33it mechanical as much as possible that
13:35would be the best you know with these
13:38days everything you know you can make a
13:40script out of anything. You can hire
13:41developers quite cheap uh to do
13:43scripting for you. Um, I just say make
13:46something that says if I enter a trade
13:48once I put my stop loss in that needs to
13:51be 2% of my account size period. This
13:54way you just it's not in your thought
13:56process whatsoever. Money management you
13:58just do what you got to do. You know I
14:00think it always comes down to is there
14:03is this feeling of I want to make as
14:05much as I can but I don't know how much
14:09much is. So they they're constantly
14:12looking around trying to feed that
14:16hunger and they get stuck into Instagram
14:19videos and stuff about Lamborghinis and
14:21stuff like that. So there is this and
14:23it's not because
14:26you know losers attract losers. It's not
14:28that. It's they're trying to answer this
14:30question of I'm trying to become do
14:32trading because it answers one thing for
14:35me freedom. But freedom I also want to
14:38not I don't want to travel the world in
14:40a hostel. I want to go live in fi fancy
14:42hotels as well and buy what I want to
14:45buy and take my friends out too. Like
14:47there's a sense of
14:50um kindness when I hear from them.
14:52They're like, "I want a lot of money."
14:53But when I ask them, "What do you want a
14:55lot of money for?" It's like, "I want to
14:56take care of my parents. I want to take
14:58care of my friends." So there's a lot of
14:59kindness that people have that are
15:02trying to do this, which is beautiful to
15:04see, but it is undefined. I think that's
15:09the one of the biggest things that a lot
15:11of new traders coming into this market,
15:13they're just simply saying because it's
15:15more money, that's why I do it. I think
15:18the first thing they need to do is sit
15:19down and decide what should my life look
15:22like. What does more money mean? What
15:25would I do first? Where would I go? How
15:27much does that cost? How would I take
15:29care of my friends? How much does that
15:31cost? like try to define it a little bit
15:34more clearly of what more means rather
15:37than just keeping it vague and saying
15:40well the more the better you know uh
15:42unlimited. So I think that's what causes
15:44people to really not hit their goals
15:46quickly because it's too vague. So if
15:49you're coming into this industry great
15:51it's a stepping stone to do what you
15:53want. Um and you know more power to
15:56younger generations now they're they're
15:58coming in with scripts and everything.
16:00Oh, they're they're they're going to
16:01crush it. They're going to do way better
16:03than both of us and all the people in
16:05our age group. But, uh, you know, as
16:07long as they get their patience and
16:09goals lined up, uh, I think they're
16:12going to do it way way better, um, than
16:14all of the previous generations. It, you
16:17know, it was, it was a bit of a shock to
16:18me. All right. Um, you know, without
16:20wanting to sort of, you know, share too
16:23much with people, they're here to talk
16:24about trading, but, you know, literally,
16:25you know, I fell sick on the Saturday,
16:27went to hospital on the Sunday. um I got
16:30told you you have cancer. On Monday I
16:32met the surgeon and on Tuesday morning I
16:34was in for what should have been two and
16:36a half hours turned into eight hours um
16:38on the slab. So um kind of the thing you
16:41need to take about it is that you know
16:42your life can change you know in the
16:45course of like a 48 36 72hour period. Um
16:50and you should always be prepared for
16:51change. Okay. And you know uh it's like
16:53uh it's like what um John Lennon said
16:55you know um you know life's what happens
16:57when you're busy making plans and uh
17:00it's the ability to adapt to kind of
17:02complete huge changes you know complete
17:04huge changes overnight. Your ability to
17:07adapt to that ability recognize that um
17:09to be very present to realize you know
17:11this this is the here and now whatever
17:13you kind of might uh like to wish or
17:16think about is uh you know is of no
17:18relevance anymore. you know, you have to
17:20deal with what is right here, right in
17:22front of you. And I suppose in a trading
17:24way, that is a little bit about, you
17:26know, you can have you can have all the
17:27the ideas and the dreams and the plans
17:29you want, but actually, you know, you're
17:32being present in the moment and trading
17:34what you see right in front of you and
17:35dealing with that rather than being kind
17:38of distracted by, you know, ideas of of
17:42wealth and fame and fortune, etc. And
17:45actually it's just really dealing with
17:47what you hear today and just making the
17:49most of today and then letting the
17:50letting the future take care of itself
17:52in that particular sense. So I suppose
17:54that's kind of a quick um yeah a quick
17:56insight into some of the parallels some
17:59of the parallels between um dealing with
18:01a major event like that and actually
18:02sort of dealing with your trading career
18:04as well. in both trading and dealing
18:06with you know a major emergency like
18:07that it you know you hear performance
18:10coaches talk about all the time about
18:11you know you just have to focus on
18:13controlling what you can control you
18:15know uh in trading wise I've always said
18:17to people that um you control what you
18:19can control in terms of you know you can
18:21plan your trade trade your plan manage
18:22your risk those are the three things
18:24that are within your control and you
18:26should focus on controlling them every
18:27single session that you sit down to to
18:29trade once a trade is triggered anything
18:32can happen it's one of Mark Douglas's
18:34you um beliefs etc that you learn if you
18:36retrade in the zone enough times but it
18:38is a case of you know once trade is
18:40triggered anything can happen and you
18:41should be prepared for anything to
18:43happen that's why I'm constantly bang on
18:45about managing risk etc was the same
18:48with dealing you know with the
18:49experience I had you know in terms of
18:51you just have to focus on what you can
18:52control right do the very best at at
18:55what you can work upon you know just
18:57basically keeping yourself in in
18:58positive spirits recognizing what's
19:00going on and um you know it's a
19:02fantastic opportunity to to demonstrate
19:04great physical, mental and emotional um
19:06resilience. And uh if I blow my own
19:10trumpet a little bit, um if you were to
19:11speak to my partner, my family, my
19:14friends, etc., they were all they were
19:16all really really surprised at how
19:18strong and resilient uh I was and how I
19:21dealt with it. Whereas actually
19:25I just, you know, it's just it's what I
19:27do every day. You know, you just deal
19:30with what comes in front of you. All
19:31right? and you you know you put as much
19:33energy you can into the things that you
19:35can focus on and work on and the other
19:37stuff you have to realize that um you
19:39know you just there are elements you
19:40have to accept and so you just basically
19:43focus on what you can do best and that's
19:45the same for I suppose that's the same
19:47for trading dealing with cancer running
19:50a business you know being in a
19:52relationship you know any kind of any
19:54kind of situation is probably it's
19:56probably good sound advice and to sort
19:59to to take forward there are probably
20:00some people who are more naturally
20:03resilient than others, but that's
20:05probably um part of their part of just
20:07their life journey before they sit down
20:09to before they sit down to trade. Um you
20:12know, you know, my my early days were as
20:15an officer in the in the military, okay,
20:17as a battle manager for the Royal Air
20:18Force. So, you know, that's part of the
20:20it's part of the gig. Um [clears throat]
20:22but then when I look back on my life I
20:24realized I had always spent my time in
20:28performance environments whether that's
20:30the military whether that's in business
20:32and sales whether that's in sports
20:34whether that's in trading whether that's
20:35in coaching and so you know if you are
20:37if you're immersed in those environments
20:39by their very nature you know by their
20:41very nature you know you will experience
20:42events that that develop your uh you
20:45know resilience and mental toughness um
20:47[clears throat] you know and it's a I
20:48think it's a skill that like any other
20:50that you you know you can develop you
20:51can work upon. Um, I don't think if I
20:56look back and think about kind of all of
20:58the all of the great traders I've
21:00either, you know, worked alongside on a
21:02trading floor or coached, you know, they
21:05they all have degrees of mental
21:08toughness, you know, and, you know, it
21:10might it might show itself and man
21:11itself in different ways, but undeniably
21:14at their core, you know, they have that
21:17resilience. Um and once again, you know,
21:19I think that's just a great skill for
21:21for anybody in life to have. Um
21:23especially in these rather eventful days
21:25we find ourselves in. Quite simple for
21:28Ms is basically markets, method, money,
21:30and myself. And um basically the the
21:34reason I think they're important is
21:35because in my own trading and in the
21:38trading I've worked with others, when
21:41traders are on top of those four M of
21:43trading, that is when they tend to be
21:45operating at at their best. And if
21:47you're having a if you're having a
21:48difficult time in your trading then the
21:51the first stop the first debrief point
21:52should be you know of the of markets
21:54method money and myself um you know
21:57which one is out of kilter all right
22:00which one is you know is it might be
22:02more than one right all right I'll give
22:04you a hint more often than not it's the
22:06myself bit but um but equally you know
22:09and it's one of the reasons I
22:10differentiate between markets and method
22:13is because markets is about
22:16understanding your markets It's doing
22:17your analysis, understanding what phase
22:19it is, what environment it is, you know,
22:21is it is it is it trending, is it
22:22consolidating, is it transitioning, but
22:25then also ensuring that your method is
22:28aligned with um with the markets, right?
22:31You might have the best trend following
22:33method in the world, right? But but if
22:35markets are consolidating or they are
22:38reversing or transitioning, doesn't
22:41matter how good your method is, you are
22:42going to you're going to struggle. All
22:44right? So you need to have your markets
22:45in alignment with your with your method.
22:47You need to be ensuring that your money
22:49management is on you know is basically
22:51top level okay is that best practice as
22:54in if you are not managing risk you're
22:56roadkill ultimately like nobody I have I
23:00have not worked with or seen in all my
23:02years I've not seen one long-term
23:05sustainably successful trader who has
23:08not been managing risk. And then the
23:10final part is about managing myself.
23:12Okay. About um knowing yourself, knowing
23:16the space you're in, knowing when you're
23:19in a good space and and watching
23:20yourself so you're not overconfident,
23:22all right, and get yourself in trouble.
23:24But equally, uh know when you're not in
23:27the the best of space, when you're in a
23:28bit of air and and having the confidence
23:31to to to recognize either I need to
23:33change myself or I need to sort of, you
23:36know, uh pull my horns in a not trade.
23:38you know, if I you know, if you're if
23:39you're tired, okay, if you're you know,
23:41if you're tired, if you're struggling,
23:42you know, if you're going through
23:43chemotherapy, you know, going, you know,
23:45trading once you're going through that
23:46is not not a smart move. I didn't I just
23:48literally cut it out. So, it is that
23:51kind of understanding your markets,
23:52understanding your method, understanding
23:54money management, and understanding, you
23:56know, yourself, myself, and those four
23:58elements. As I say, when I see traders
24:00doing well, it's because all four of
24:01those, they on they on top of them.
24:03Okay? They are managing them. They are
24:05managing those fours well. For new
24:07traders, I would say they are
24:09overconfident and underskilled. Uh, and
24:12[clears throat] that is that's a
24:13dangerous combination. They're
24:15overconfident because um, optimism bias
24:18is is in play. They're excited. They're,
24:20you know, they're learning new skills,
24:22okay? They're developing, they're
24:23growing, you know, and they they of
24:24course they are they are very outcome
24:26focused. So, they, you know, they're
24:28thinking about all of the, you know,
24:29they're thinking about when they're
24:30going to buy their first speedboat and
24:32all that kind of nonsense. All right.
24:34But the thing is, they don't have the
24:35skills. Not only that they don't they
24:36don't know what they don't know. So they
24:39are operating at a unconsciously
24:41incompetent um in level and so for new
24:44traders that you know that kind of
24:46combination can be can be challenging
24:49and part of that combination is driven
24:51normally not always but normally I find
24:53by external factors. So [clears throat]
24:56they're content trading because they
24:57want a change in their life either, you
24:59know, they they they hate the job, they,
25:01you know, they hate the life, they hate
25:03the relationship, they you know, where
25:04they're living, etc. And they want they
25:06want change and they're looking to use
25:08trading as the vehicle to bring that
25:10change. Um, and that, [clears throat]
25:13you know, you're only successful at
25:15trading if you love trading, right?
25:16Ultimately, long term, you have to love
25:18it. You have to love the markets. You
25:19have to love the trading. And so those
25:22external factors you know you know this
25:24well they bring people to trading but
25:26actually it it's not that's not enough
25:28to to you know that might fuel you to
25:30begin with but when you start having
25:32challenging trading periods or
25:33struggling
25:35that kind of motivation es away it it
25:38tends to e away and that's why people
25:41you know they set themselves with kind
25:42of foolish expectations and you know it
25:45comes back to to to buy in the Biden in
25:47the backside and so if people call me up
25:50and they're unhappy in their, you know,
25:51happy in their life, unhappy in their
25:53job and and think trading is going to
25:55get them out of that. They're always a
25:57bit surprised when going to say actually
25:59what you want to do, go and address, go
26:01and change your job. All right, change
26:03change your life. What you might find is
26:05that actually uh you might be in a
26:07happier place and don't feel the need to
26:09trade or you might be in a happier place
26:11which means that your ability to trade
26:13will probably improve anyway because
26:14you're coming from a from a better place
26:16rather than coming from a place of of
26:19desperation and need because that rarely
26:21ends well for a trader.
26:23>> I watched the um the Arnold
26:24Schwarzenegger documentary on Netflix. I
26:26don't know if you've seen it but it's
26:28really good. And he he's [clears throat]
26:30talked about uh having I'm going to get
26:32to your question in a roundabout way.
26:33He's um he started with coming over here
26:36from Austria as an immigrant and won all
26:38these bodybuilding championships and had
26:39a real directed focus to do that. And
26:41then after that he he got into being an
26:44actor and struggled through that. Took
26:46classes and eventually was the highest
26:48grossing actor. And then he got into
26:50politics as a Republican. He ended up
26:52winning a Democratic state in
26:53California. So pretty three amazing
26:55lives with one person. And he always had
26:58that well the way he tells it I like to
27:00know the inner details but the way he
27:02tells it he had that directed focus on
27:04each thing and when you had that
27:06directed focus it was easy to to kind of
27:08narrow in but then your question is well
27:10what do you do if you don't have that
27:11directed focus and that that's the book
27:13I would like to read because I think a
27:15lot of us if in our trading and
27:17sometimes in our lives or as we age and
27:20we have different things to to
27:22accomplish and new things to try we
27:24don't have that focus and what to do And
27:27I think for for trading um I think it's
27:29it's experiment with things with small
27:31size. It's sometimes it's making an
27:34effort to network to get out of your
27:36house to meet with people to talk about
27:38uh different strategies different
27:39things. And like for me, I joined a a
27:42small cap stock trading group and I
27:44tried for this was a couple years ago. I
27:46spent a good 18 months with earning
27:48strategies and small caps and I I
27:50learned a lot about it and I ultimately
27:52learned that it probably wasn't for me.
27:54But I kind of know what I don't know
27:56now. So that was a push I made. And then
27:58another push I made was um which I'm
28:00doing right now actually is I'm working
28:01with a friend who I grew up trading
28:03futures with. And we use some
28:05programming stuff that we learned from
28:06GPT to develop a system. And basically
28:10the system is just a way to tell us
28:12whether to buy or sell with a very
28:15slight positive edge. But the draw down
28:17is pretty large. So you wouldn't do the
28:19system outright, but what we're doing
28:21with it is using our discretionary
28:23skills to decide if we want to take the
28:25trade or not and see how much better we
28:26can make it and is that something we can
28:28scale. So in a sense, it's almost like a
28:30way to scale, a backdoor way to scale.
28:33And that's another new product I'm
28:35trying. So, I don't know if these things
28:37are going to stick, but as I check them
28:39off, it's just another thing that I kind
28:41of know that um I've check I've tried
28:43and I can rule it out. And it
28:45strengthens my my core trading because
28:47sometimes when I've lost the most money,
28:50it's when I'm confused about what I want
28:52to do. I want to make another jump. So,
28:54I'll try a lot of other things and
28:56sometimes get lost and maybe trade a
28:57little too big doing something else. and
29:00it eventually brings me back to my core
29:03thing that I've done and then I I have
29:05more excitement and more of a focus, but
29:06sometimes I need to kind of go off to go
29:08back in. So, that's one thing that I'm
29:11I'm working on right now. I think
29:13another thing is just releasing
29:14sometimes and doing less of it. And when
29:17you get so close to something, I mean, I
29:19think we've all heard stories about
29:20people who really wanted something in
29:22their life and they focus on it so much
29:24and then when they forget about it and
29:25sort of give up, it comes. And I think
29:28with the trading is very similar where
29:30you have a clear focus on what you want,
29:32but sometimes when the market's not
29:33where you are or you're having trouble
29:36getting out of bed or you're beat up or
29:38you feel like this is tough. I mean,
29:40this is it's emotionally hard. This is a
29:42very emotionally hard job. Sometimes you
29:44have to let go. You might need to take
29:45walks in the middle of the day. You
29:47might need to reach out to other
29:48traders. You might need to just take
29:50some time off. And I found that my best
29:53runs consistently over my career have
29:55happened um almost out of the pits of
29:57despair, out of the the periods of
30:01disinterest and openness and a period of
30:04despair maybe before that and then kind
30:06of moving into this kind of empty spot
30:08where I don't really care what happens
30:10and then something happens. So is
30:13getting yourself to that mindset I think
30:15is really important. trading. I don't
30:17know. We we talk about trading and there
30:19everyone has a personal how to buy, how
30:21to sell. And I think that learning from
30:24others who are like you, who have your
30:25temperament, who have your lifestyle can
30:27be very useful because you can start to
30:29actually talk X's and O's of how you do
30:31things. But others, you might learn from
30:34them psychologically or um their
30:36attitude or how they carry themselves,
30:38but your strategy might be very
30:39different. But I feel like either way,
30:41it's important to kind of um be you want
30:44some peers that are your that maybe your
30:46age, your your trading zone. You want
30:49some people who are older than you who
30:50are more successful than you. And you
30:52want some people who are younger that
30:53you're kind of helping out. And it could
30:55be different levels of helping. It could
30:56be buy it, sell, how to do it. It could
30:59be what does life feel like when you
31:01have kids. Um I just have one, you have
31:03four, you have more money. What do you
31:05do with your money? It could be a
31:06younger person who's managing their
31:08their emotions and their temperament.
31:10So, I try to have all that going on. And
31:13sometimes it takes work to reach out and
31:15to connect with people. And I think a
31:18guy a good thing for that is just when
31:20you feel like doing it, you do it. And
31:21when you don't feel like doing it
31:22because you're into your own trading,
31:24you don't do it. And you'll know kind of
31:25when it's time for you to go on one of
31:27those uh periods where you're reaching
31:28out to people. And like for me, I was um
31:31I haven't done a podcast for a long time
31:33and I've just been kind of inward and
31:36just that's and I'm coming out of that a
31:38little bit now. So I feel like I'm ready
31:39to talk more and to discuss and reflect.
31:42And for a while I just that's not where
31:44I was at. I was working on stuff and I
31:46think you have to obey that. When I
31:47first started trading, this was um so
31:49I'm 42. I started when I was I mean I
31:51was tinkering in my in my teen years,
31:53but I really started at a firm
31:54professionally when I was I think 21 or
31:5622. And we we used to get paid once a
31:59year. So it was really difficult that
32:02way. They would give us what's called a
32:03draw. Was a couple thousand bucks a
32:05month. And we had to pay that back. So
32:07you make profits, you they'd pay it to
32:09then, then you pay it back out of your
32:10profits. Then you get a check at the end
32:11of the year. And eventually they paid us
32:13quarterly. So it got a little better.
32:15But as you started to succeed, you start
32:17stockpiling money away and then you
32:19would just get used to living that way.
32:21And now that I'm on my own, it's kind of
32:22all one flow where the money is just in
32:24different accounts and it doesn't really
32:25work that way anymore. So, I've made
32:27made enough money to live on fine and I
32:29don't have to worry about it. So, it's
32:30more about um it's just continuing to
32:33make money and make investments and it's
32:35not about um oh crap I I'm going to run
32:38out of money in six months where when I
32:40first started that was more of a
32:41concern. It was I need to I need to do
32:43this right now. I need to pay my rent.
32:45Um these are important things. But as
32:47you go along you learn to manage that
32:48and it becomes easier. Um you know I
32:52would like to tell you it becomes easier
32:53psychologically but it it kind of
32:55doesn't. it financially you lose that um
32:58that that crutch where you're worried
33:00about making money but I mean you get
33:02expectations you want to have uh a level
33:05of success you expect a level of
33:06professionalism and sometimes it's you
33:08let yourself down and you just do and
33:10you have to learn I think learning to be
33:12gentle with yourself and to be um to
33:16understand that cycles thing come and go
33:18and times are tough sometimes and you
33:20don't have to batter yourself into the
33:22ground which was a big problem for me
33:23for many years even when I had a lot of
33:25success uccess. It was being very hard
33:26on myself and expecting me to always be
33:29at the certain level of of proficiency.
33:31And when I wasn't, it was, you know,
33:33when I was at the firm in Chicago, I
33:34would compare myself to other people.
33:36How come I didn't see the move? And this
33:38and that. And that's just a destructive
33:40I've learned to iron a lot of that out
33:41with um with age and a lot of selfwork.
33:45But um I mean, this this is a never-
33:47ending challenge when it comes to that
33:49stuff. I mean, I actually like talking
33:50about this because no one talks about
33:52this. I've in my sphere, people who have
33:54been trading longer, there's very little
33:56discussion on um what do you do with
33:59your money? Uh people who have enough
34:00money, they you just don't hear about it
34:02because you assume everyone either has
34:04no money or they're they need to have
34:06the next trade work out to live or but
34:09it's I think um well right now is a good
34:12environment if you have some money
34:13because you get 5% with doing nothing.
34:15So that's that's something. So if you
34:17don't know what to do, you can do that.
34:18So I have some passive income coming in
34:20from 5% treasuries. I have um stock
34:23portfolios of index funds. I have a I'm
34:25a stock manager I use uh who runs a
34:28portfolio for some tech tech type names,
34:31eight or 10 stocks that are in and out
34:34of and there's some options that are
34:36written on those occasionally. And that
34:38stuff just kind of keeps me when I have
34:40someone else working on it, it keeps me
34:42out of it. And other people ask me,
34:44well, how can you have someone else work
34:45on any of your money when you've been
34:47trading your whole life? Don't you isn't
34:48that just stupid for you to do? But
34:50again, I can't do everything myself
34:52because these people are looking at a
34:54time frame that might be six months to
34:56three years, some of them five years or
34:58more. And I've been trained to watch for
35:00stuff during the day. So, as much as
35:03I've lengthened my time frame a little
35:04bit, you can't it's like you're the
35:07general of the of the army. You're
35:10fighting on the front lines and then
35:11you're also trying to recruit and
35:14station people in the uh in their own
35:16little subgroups in the middle. So,
35:18there's three jobs there. And I found
35:21that I can do the big job and the little
35:22job, but the middle job gets hard. At
35:24first, I thought it was better to do the
35:26middle and the small one, which would be
35:27swing trading and day trading, I found
35:29that to be I still do a little bit of
35:31that, but I found that to be tough. But
35:34like overall wealth management and mixed
35:36with trading, I can do that together.
35:38But I had to get a lot of it out of my
35:39hands. So index funds, treasuries, I
35:43have um what else do I have? Um, I have
35:45some passive investments. Um, some
35:46private investments that I don't know if
35:48they're going to work out or not.
35:49That'll that might take 10 years. Some
35:51biotech fund I have and some startup
35:54stuff. Uh, I live in the Seattle area,
35:56so Pacific Northwest Venture thing I
35:58have going on and some things like that
35:59that we'll see how they play out. But
36:01ultimately, it's um treasuries, trading
36:04income, and money that I've saved. I've,
36:07you know, made enough money trading
36:08luckily where I can just tap into that
36:10if I if I have a problem. So, I don't
36:12need to rely on the regular thing as
36:13much as I used to. Um, at some point,
36:15yeah, you got to make money, but the
36:17pressure of having it happen right now
36:19is not there, which is which is good.
36:21That's good. But I I've had a lot of
36:24stress. Um, and I know this is not
36:26relative or not applicable to a lot of
36:28people who are listening, but maybe it
36:29is to some. I've had a lot of stress in
36:31my life the last two or three years
36:32figuring out how to handle money that
36:33I've made trading in terms of what do I
36:36do with it? Um because you start to put
36:38on positions and try to trade them
36:39yourself and then you're trying to time
36:41that market. Um and then at the I would
36:43find that when I had a bad day day
36:45trading, I would go over and sell a
36:46bunch of my stocks and it'd be the worst
36:47time to do it and I couldn't
36:49emotionally. I would get my wires
36:51twisted and it just wasn't. So I had to
36:53I learned um how to do a better job of
36:55that the last I would say couple years.
36:57So the thing I described to you in the
36:59beginning about buying assets when
37:00there's a panic and then trading is kind
37:02of my approach for now until it evolves.
37:05It caused me so much stress because I
37:07thought, man, I need to I need to double
37:09this money every five years. I need to
37:11be smart with it. Um, I need to get to
37:13the next level by learning how to hold
37:15things for six months or 12 months, but
37:17I thought, well, that's not how I made
37:18the money. And now I think I can be an
37:20expert at that, which is really a whole
37:21another lifetime. And it's not that you
37:25can't be better at it. But I realized
37:26that being less stupid with it is better
37:29than uh trying to be really good at it.
37:31And I didn't really have the heart to go
37:32on and spend the time and energy doing
37:35that. But I tricked myself into thinking
37:37just because I had the money to do it
37:38because I was good at one business that
37:40I could just be good at the other one. I
37:42could be William O'Neal or whoever, you
37:44know, some great 12 to 18month uh trend
37:48trader and occasionally I'll find
37:50something, sure, but that's not what I
37:52did to get here. And it was arrogant of
37:55me to think that I could just do that.
37:57And better yet though was what if I
37:59could buy things? What if I could
38:01naturally have a more of a patience
38:02muscle because I can make money when the
38:04market falls apart or when it's busy
38:06because I can trade. So that keeps me
38:08busy. And then when it gets really ugly
38:10or panicky, I can kind of see the
38:11sentiment and the signs. I just start
38:13buying buying stuff that I like. Buying
38:15index funds. That's a that's a pretty
38:17cool system. And that's something that I
38:19can actually do. And even though it's
38:21buy and hold and things don't go up
38:23forever necessarily. I mean they they
38:24kind of do, but in other countries they
38:26haven't, but in the US they have. But
38:28when that stuff comes back, if I if I
38:30keep buying during panics, I I
38:31eventually do very well. I mean, it ends
38:33up being where you can at least get 7% a
38:36year over and double every 10 years. And
38:39that's not that's not exciting to some
38:41people, but if you're able to make money
38:42in other periods and you have money
38:43that's stacking up on the side, it
38:45become the math works out very well. So,
38:47um, while I hope in my life I have more
38:50ventures and I maybe get involved in
38:52more businesses and other things happen
38:54for right now, this is kind of the
38:56lesser of some of the other evils that I
38:58was doing and some of the stress I was
39:00creating and kind of what you were
39:01saying. My wife and I recently watched
39:03the Miracle Morning documentary and we I
39:05had read the book a long time ago and I
39:07thought, well, why does this work so
39:08well? And it there's just something
39:10about getting up early, walking in the
39:12morning, thinking about doing a little
39:15um I've heard it called segment
39:17intending, which means every time a new
39:18segment starts in your day. Um this
39:20podcast would be a segment and then when
39:22we get done, there's another segment.
39:23You kind of spend just a few seconds, 20
39:27seconds thinking about what do you want
39:28out of the next segment. So I've really
39:30tried to think about what do I want out
39:31of this conversation today? What do I
39:33want um out of my workout? What do I
39:35want out of my drive to town? So that's
39:37been very helpful to think in terms of
39:39that. So I don't always get up at 5:30
39:42every day and do the uh I like to get up
39:44early, walk, and then I do a little bit
39:46of what I said and maybe a brief bit of
39:48journaling and then like a 20 to 30
39:49minute meditation. Some days it doesn't
39:51happen that way, but generally speaking,
39:53that's kind of the routine I've been
39:55I've been on. And I've been also taking
39:57a break now when the market's a little
39:59slower midm morning every day for about
40:01an hour and just going on a walk. And
40:03that's been really nice to break up my
40:05day. And I find that I get more even if
40:08I miss a move, I end up coming out way
40:10ahead by being refreshed and sometimes
40:11seeing things a different way or just
40:13not losing money and something that um
40:15just banging my head against the wall.
40:17And then at night time, um I it depends.
40:20Sometimes it's walking audiobooks, other
40:22times I'm really into reading. Um I just
40:24read this novel called Mousashi, um
40:26which is really good. It was a Japanese
40:28novel. So I did that for it was a
40:30thousand pages. So I was on that every
40:31night. And once that stopped, I was on
40:33the uh documentaries for a little bit.
40:35And then I kind of now lately I've been
40:37meditating at night and just kind of
40:40hanging out and journaling and maybe
40:42watching a little bit of YouTube
40:43interviews with people. So it kind of
40:45changes depending on what I'm in the
40:46mood. Sometimes I'll watch shows for two
40:48weeks and just waste my night watching
40:50shows and then sometimes I'll just be
40:52learning and reading and then some. So
40:55my point being that I let myself have
40:57that freedom to move around a little bit
40:58in my routine. But that's kind of where
41:00I'm at for now. Well, I think if you can
41:02go on a walk, it really helps. I I'm on
41:04the Pacific US time zone, which is tough
41:06because um it's a 6:30 a.m. market open,
41:09so sometimes it's hard for me to to do
41:11that. I want to stay up. My kids go to
41:13bed. I only have like an hour um of free
41:15time and then I got to go to bed to do
41:16that. So, oftentimes I have to move my
41:18day around. But, if you can walk in the
41:20morning before the market opens, I think
41:21it helps a lot. It really just it resets
41:24your you can see you see nature or you
41:26see other people and it just puts you in
41:28a different mindset and you can kind of
41:30think you can consciously think about
41:32your day. Whereas when you get up right
41:34before the bell and you go in there and
41:36start trading you're you're kind of in
41:39some ways you're unconsciously creating
41:40your day because you're under the gun
41:43right away to just look at the market in
41:45which case it's kind of imposing itself
41:46on you. But if I can walk first and
41:49separate myself a little bit and you
41:51could meditate or journal or whatever
41:52you want to do, but I like to walk. If
41:54you can do that, you kind of are in this
41:56conscious mindset and then when you come
41:58into the market, you're deciding what
41:59you want to do versus having it kind of
42:01decide for you sometimes. I've noticed
42:03that that can be a little bit of a
42:05differentiator for me. And al also
42:08there's times when your style is in
42:10vogue or it works well. Like for me when
42:12when it's volatile overnight and we're
42:14having a lot of fear in the world or
42:16just uncertainty, I know that it's going
42:18to be good for me. So I get in there
42:20earlier and I'm ready to trade pretty
42:22much all day. But when it's not like
42:24that, like right now when it's been
42:25going up every day and it's a little
42:26slower, um I just take more time off. I
42:29I come in in the morning, I disappear
42:31for two hours, I I check on my phone,
42:34it's slow, I don't come back for that
42:36day. And I just give myself the room to
42:38do that. And I do better that way. I
42:40just it's okay to do that because it's
42:42not every single day is the same. And
42:44and that's something that being raised
42:46to work really hard and get up early,
42:48I've had to unwind some of that because
42:50while it's nice to work hard, I would
42:52rather be smart and be opportunistic
42:54than just to grind and work hard. And I
42:55think we some of us have to learn that
42:57lesson the hard way. I did. And I could
42:59actually do better at this. I used to
43:00record all my trades by hand every day
43:02um [snorts] at the end of the day. blue
43:04and red ink religiously for years and I
43:07I started to get sloppy and I haven't
43:08done that as much. But one thing that
43:10does is it gives you an awareness of you
43:12just see like I'm in the middle of the
43:13range. What am I doing? This is this is
43:15not good. I want to be proud of where I
43:17plot my trades tomorrow. And that's
43:20sometimes the I would say to myself, be
43:22proud of this when you look at it at the
43:23end of the day. And that would help me
43:24hold off on on a kind of a crappy spot.
43:27But if you don't know, if you can't if
43:28you don't have that awareness, then you
43:30don't really know. It's like you're just
43:31unconsciously doing the same stuff over
43:32and over again. So I think building in
43:34some sort of a review process like that
43:36and I think on a a bigger review like
43:38maybe on a quarter what you said is
43:40really smart where you say I want to
43:42work on this one thing or these two
43:44things not five things but one maybe two
43:47and just really drill down on that and
43:49that can be I think that can be
43:50powerful. I think people who stick
43:53around doing this are in it for the
43:54personal growth. It's a spiritual I
43:57people who don't trade this can sound
43:59stupid but anybody can grab an account
44:01and start trading and other businesses
44:03and other jobs you have to get degrees
44:05and you have to go to school so it's
44:07harder to jump in. So since everyone can
44:08jump into this everyone has an opinion
44:10there's lots of people who do it but
44:13really to make it in this job um and to
44:15to get the benefits of it is to really
44:17just grow through all of your buttons.
44:19It's going to press every button you
44:20have. If you're angry or you're you have
44:24scarcity and fear and whatever it is
44:27comparing yourself to others, it's for
44:29sure going to come up in this job. And
44:30not that it won't come up in other jobs,
44:32but part of the reason I think those of
44:34us who chose this, we chose it because
44:35we know that it's going to further us in
44:38breaking free personally on a lot of
44:40that stuff. So for me, it's always
44:42working on embracing that part of the
44:44job. And when that pain comes and that
44:46suffering comes, it's just another thing
44:48that I needed to learn and it needed to
44:50come. So I'm never trying to look at it
44:52as why does this happen to me? This
44:54sucks. This isn't fair. One of the big
44:56themes for me was always injustice or
44:58unfairness or things that you know if
45:01you work hard and you study it then you
45:02should get it. And sometimes in trading
45:05you just don't. And then sometimes you
45:06get it when you didn't work hard and you
45:08didn't study it. And it just goes back
45:10and forth. And I had to learn to unwind
45:11a lot of that that fairness aspect of
45:13things because it's that's not how it
45:15works. And I think embracing that
45:18process uh and just knowing that that's
45:22this job is going to really do that for
45:24you. And if you stick with it, you have
45:25to do that or else you won't make it.
45:27And I appreciate that about this more.
45:29That's probably the biggest thing I
45:30appreciate about the job. So I would
45:32tell others to not shy away from that
45:35stuff.
45:35>> It's mostly psychology. It's also
45:38mostly, I guess, the the predetermined
45:41thoughts they have about what trading
45:43is, how easy it's going to be, and and
45:45what it takes to be successful. And
45:47that's because the same junk is still
45:48out there on the internet. It's
45:50disguised in different ways, so it's not
45:52maybe as as blatant as it was back when
45:54we first started trading. Um, but it's
45:56the same get-richqu type of stuff.
45:57Here's a magic system, magic strategy,
45:59and people fall in love with that
46:00because that's what they want to hear.
46:02So, I get a lot of traders that want the
46:04quick fix, that are only worried about
46:05this, that disregard trading psychology
46:08and and not understanding that yes, you
46:11can have the best system in the world,
46:12but if you can't mentally execute it day
46:15in and day out, it's pointless. Or
46:17execute it without error day in and day
46:19out, it's pointless. So, um, we still
46:21see many of those those common errors,
46:23and it's the the same old fix, just they
46:25come in slightly different ways. I came
46:27across trading psychology and and
46:28learned the importance basically by
46:30being bad. Um, [laughter] I I was bad
46:33and I couldn't figure out why. And and
46:34and like many new traders, I I blamed
46:36everyone else. I I blamed my mentor, my
46:39coach, the the markets, the the the
46:41weather, the computer, the the trading
46:43platform until I I ran out of people to
46:45blame. And it was like, man, it's me.
46:47And I remember when I ran out of people
46:49to blame, I I did an evaluation at the
46:51end of my year. And basically, I and my
46:54mentors were and coaches were telling me
46:55this the whole time, but I didn't want
46:56to believe him. I was the the same young
46:58dumb trader that I'm dealing with now.
47:00Um, but I did a comparison. I I said,
47:02"Okay, well, they're telling me just
47:03execute the plan. Do this, do that,
47:04follow your edge, and blah blah blah." I
47:07looked at all my trading results and
47:08what I actually did. And then I went
47:10back to all my trades and and looked at
47:12the results of what I should have done
47:14if I did everything correctly. And then
47:16it it popped out to me. It said, "Man,
47:18like, you are trading a profitable
47:20system and strategy. You have the
47:22ability to identify trades the right
47:24way. You just keep messing up every time
47:27you do it." And that was kind of the
47:29light bulb for me where it was like man
47:31like it is me. It kind of hit hard like
47:33I am the one messing this up. I need to
47:36focus on not sabotaging myself and if I
47:39can do that everything else will fall
47:41into place. So it was just uh you know
47:44it it was a harsh reality check I guess
47:46you can say which are the best lessons.
47:48A lot of pain will will bring change
47:49often. I would tell them that if you're
47:51in a rush to make results you're you're
47:53you're probably going to be in a rush to
47:55go broke. Um because again going back to
47:57trading psychology, most trading
47:59mistakes come because you're messing up.
48:02And you're messing up because you have
48:03some type of unrealist realistic
48:05expectation. And man, I it hurts me so
48:08much. I've seen so many traders that are
48:10good, right, by anyone else's standards,
48:12but because they have this inflated goal
48:14where it's like, man, I need to make 20%
48:16a month. They start doing different
48:18stuff, right? I had a trader I work with
48:19who made like a 10% month, which I'm
48:21like, man, that's amazing. That's great.
48:23Great month. He's like, "Yeah, but I
48:24want to make 20." So, he started messing
48:26up his strategy that was making him 10%.
48:28He ended up losing money because he got
48:30greedy with targets. He got, you know,
48:32he was rolling stops back to stay in
48:34trades. He was entering trades he wasn't
48:35supposed to be in all because that 10%
48:38wasn't enough. So, I try to tell people
48:40when I say literally map it out on like
48:42an Excel spreadsheet or or a graph,
48:44right? You know, the power of
48:46compounding is amazing. And if you
48:48understand a a J curve, a J curve, it
48:50starts really really really really slow
48:52and then it shoots up. And although that
48:5510% or whatever that number is is going
48:57to seem like a little bit at the
48:58beginning, if you consistently do that,
49:01at some point your profits are going to
49:02boost um exponentially. Um but you just
49:05have to wait out that that period of
49:07time before it gets there. So be happy
49:10with your profits, right? Something is
49:12always better than nothing. And you
49:15know, don't throw away something good
49:17for the hope of something great that
49:19probably isn't achievable. I like
49:21consistency. So I I don't like big
49:24dramatic swings. So, but I try to be
49:27aware of what's happening in the market
49:28well in advance. That way I don't have
49:30to spend too much time doing it. And
49:32when you trade, when you have a
49:33consistent routine and you do your
49:35analysis the same time each day, when
49:36you have a consistent set of pairs that
49:39I trade, I start to know the market
49:41pretty well. So I can really and
49:44experience I guess helps with this too.
49:45I can see things well in advance. I'm
49:47never waking up to the markets and
49:49unless there's some type of crazy news
49:50event that came out overnight and I'm
49:52caught by surprise. I kind of have an
49:54idea of what's going to happen. I'm
49:55prepared. I know how I'm going to handle
49:56it or how I'm not going to handle it.
49:58And because of that, I don't have to
50:00kind of sit at my charts for a long
50:02time. You know, just to give you
50:03example, I would say my top down
50:04analysis in the morning to prepare for
50:06my trading day at this point probably
50:08takes about a half an hour at most. Um,
50:11I'm I'm clicking through. It's either
50:12yes, no, yes, no, yes, no, and then I'm
50:15I'm I'm gone. Um, but I still try to
50:17take breaks. Um, so I typically am
50:20active on the charts from, you know,
50:22I'll do my top down analysis probably
50:24like 6:00 in the morning. I'm done my
50:26live trading room by by 9:30. And I
50:28always try to take a break. I I need to
50:30take a reset, right? Either it's it's
50:32get away. It's go run, hop on a a bike,
50:35um, you know, go to the weight room, do
50:37something active to kind of get away
50:38from the market and use that as a chance
50:40to de-stress, but also kind of uncloud
50:44my mind. That way, when I come back in
50:45the afternoon, if I want to peek at
50:47something on the charts, I'm not
50:48cluttered and tired and exhausted. It's
50:51kind of like another fresh look and I
50:53can do another 10, 15 minutes of looking
50:55around to see if there's anything else
50:56there.
50:57>> I'm a psychologist. I teach at a medical
51:00school and uh work with people in an
51:05area called positive psychology
51:08which I sometimes define as psychology
51:12for the mentally well. In other words,
51:15we're looking at how psychology can help
51:20people who already are doing well in
51:22their lives do even better. how they can
51:25build upon their strengths and how they
51:28can figure out what makes them succeed,
51:31what makes them happy and productive.
51:35I began applying that to work with
51:39traders in financial markets and uh over
51:42the last couple of decades have worked
51:45with proprietary trading firms, have
51:49worked with hedge funds, investment
51:51banks helping professional traders be
51:55more successful at what they do. And
51:58I've written a few books on that topic.
52:01And the most recent book is called
52:03Positive Trading Psychology, which is a
52:06direct application of positive
52:09psychology to the world of trading.
52:12People reach out to me when they're
52:16doing well and when they want to expand
52:20their business. They want to get larger
52:22in their trading or in the case of the
52:24hedge funds that I work with, they want
52:26to build out their teams.
52:29It turns out that teamwork is very very
52:33effective in covering different markets,
52:36different strategies and it's also very
52:40effective for the psychology of trading
52:42because people on the team keep each
52:45other focused and they keep each other
52:48motivated. So many times people reach
52:51out to me when they're doing well and
52:52building their business. Other times
52:54there might be challenges going on in
52:56their personal lives. sometimes
52:58challenges in their trading and they'll
53:01reach out because of those. If a trader
53:04is already
53:06doing well and wants to expand,
53:10let's say they're profitable, but
53:12they're trading with relatively small
53:14size, so they want to get bigger. Or
53:17maybe they're trading a certain market
53:20or a certain kind of u time frame and
53:24they want to branch out and do more. The
53:27most important thing to do from a
53:30positive psychology vantage point is
53:33figure out what makes them successful.
53:37How are they able to make money? Even if
53:41it's not a lot of money, when they're
53:43able to make money, what are they doing
53:45right?
53:47There's an approach in psychology called
53:49solution focus
53:52which means that you look at occasions
53:55you study occasions when problem
53:59problems are not occurring.
54:03So let's say you have a trader who goes
54:04on tilt.
54:06Well, they don't do it every single time
54:08they trade.
54:10when you're not going on tilt, when you
54:14are trading well, what are you doing
54:16differently?
54:18Let's figure out what you're doing when
54:20the problems aren't occurring and that
54:23might lead us to some solutions. You
54:27know, my goal is to help people coach
54:30themselves.
54:32So they might pick up from me a few
54:34techniques, a few approaches that are
54:36helpful. But I want them to use those
54:40techniques for themselves.
54:43And if they can coach themselves, then
54:45they don't need to meet with me or any
54:47other coach every single week, every
54:49single month. But I'm always available
54:52if a problem occurs. Many people choose
54:56to meet with me on a monthly basis just
54:59to review performance.
55:01review what they did well, review what
55:04they need to improve, set goals for the
55:07next month. And so my meeting with them
55:11is actually a way of helping them coach
55:14themselves. My experience working with
55:16some very successful traders is that
55:20their success is built upon their
55:23talents, which means their abilities
55:27that are inborn, and their skills, which
55:30means abilities that they've acquired
55:32through experience.
55:35Many many many many many times a trader
55:38is successful
55:40because of talents they've used at some
55:44previous point in their life that has
55:46made them successful.
55:49In other words,
55:51the trader is leveraging the success
55:55they've already had in other areas of
55:57life and applying it to trading.
56:01So, as I've written in my case, one
56:05thing I'm good at is being a
56:08psychologist. And what do I do as a
56:10psychologist? I listen to people. I go
56:14into a meeting with an open mind. And I
56:16listen and I listen and I listen and I
56:19listen and I figure out what's going on.
56:22What are the patterns of this person's
56:24life that I can help them with?
56:28When I trade well, what do I do? I sit
56:32there with an open mind and I listen and
56:34I listen and I listen and I just watch
56:37the market and watch the market and
56:38watch the market and watch the patterns
56:41that are showing up and then I figure
56:43out what to do. It's the same exact
56:46skill. There are other people who are
56:49athletes who have different skills.
56:51There are other people who are
56:54quantitative and they have different
56:55skills. But in every case, success in
57:00markets leverages previous success in
57:04our lives. Many developing traders begin
57:08trading way too early before they have
57:11figured out their straits.
57:14So they read a book or two,
57:18they watch a video or two and they look
57:22for chart patterns or indicator signals
57:25and they start trading and put putting
57:27their money at risk and of course
57:29they're not prepared. They lose money
57:31and they become very very frustrated.
57:34So to succeed,
57:37you really have to figure out what your
57:40strengths are first
57:42and then see if you can apply that to
57:45different approaches in the market. For
57:49example, the strengths of an active day
57:52trader who's getting in and out of the
57:54markets. The traders I worked with in
57:56Chicago, the average holding time was
57:58six minutes.
58:00So, they're not looking at long-term
58:02charts. They're looking at order flow
58:04and who's buying, who's selling, how
58:06much is for uh sale, and how much is
58:09being lifted.
58:12Others are not short-term traders.
58:16They're longer term investors. The
58:19short-term trader is a pattern
58:21recognizer.
58:23That's what their strength is. They
58:25they're good at recognizing patterns.
58:27The longerterm trader is very good at
58:31analysis
58:33and figuring out bigger picture patterns
58:36in financial markets. In fact, that's
58:39why they hedge fund managers hire
58:41analysts because they're analyzing
58:46opportunities often in a quantitative
58:48way. Very different strengths, very
58:51different skills. And the important
58:53thing is that we figure out what we're
58:55good at so that we can leverage those.
58:58Yeah. Psychological health is sometimes
59:01referred to as well-being.
59:04It's the opposite of distress. It's what
59:07makes us feel good about life and what
59:10makes us feel good about ourselves.
59:12And so it includes things like joy and
59:16happiness.
59:18You know, feeling good about the things
59:19we're doing. It includes purpose and
59:24fulfillment.
59:26Feeling that we're doing meaningful
59:29things.
59:31It includes connections, meaningful
59:34connections with people, relationships.
59:39It includes physical energy and
59:42well-being
59:44which comes about from exercise of
59:47different types.
59:49And when we put all of those together in
59:52a lifestyle,
59:54when we do things we enjoy, when we do
59:56things that are meaningful, when we
59:58connect meaningfully with people, when
1:00:01we are activated physically,
1:00:05that's psychological wealth. That's that
1:00:08brings us
1:00:10positive emotional experience. And the
1:00:13research tells us that when we have that
1:00:16well-being, we perform better and we
1:00:21actually recognize opportunities better.
1:00:24We have a more open mind. But it's not
1:00:26only the way you think. It's what you do
1:00:29in your life. I mean, I could think all
1:00:32sorts of positive things and I'm going
1:00:34to be really successful and I'm the
1:00:35greatest person in the world. It's not
1:00:37going to help me in my trading. It's
1:00:39doing things that bring you that joy,
1:00:43that bring you the sense of meaning and
1:00:45purpose, that connect you with people.
1:00:48It's what you do in your life that
1:00:50generates. I mean, it's not that people
1:00:53can't succeed on their own, but in in
1:00:57any performance activity,
1:01:01people learn through mentoring and very
1:01:05often through teamwork. You know, think
1:01:08about someone who wants to become a
1:01:11professional musician
1:01:14and they say, "Okay, I'm going to learn
1:01:16to become a professional musician on my
1:01:18own by myself."
1:01:20Well, good luck with that. Or I'm going
1:01:22to become a professional athlete and I'm
1:01:25going to work out and do it by myself.
1:01:29Well, no. That never happens.
1:01:32it.
1:01:34Success requires
1:01:37mentoring.
1:01:39Success requires structured practice and
1:01:42learning and typically that's done
1:01:47in a training way with others.
1:01:51However, even once a trader is
1:01:53successful,
1:01:55they can benefit greatly by
1:01:58collaborating with others. That's why
1:02:00we're seeing many more trading
1:02:02communities
1:02:03springing up that by sharing ideas with
1:02:08others, by reviewing markets with
1:02:10others, we learn from them, they learn
1:02:14from us, we have so much more material
1:02:17to learn from that expands our growth in
1:02:22helping others, in mentoring others.
1:02:25We're reinforcing
1:02:27what we know.
1:02:30What the research in psychology tells us
1:02:32is that if we process information in
1:02:36more ways and in different ways,
1:02:40it'll be more likely to stick. So, I
1:02:43might go over information in my own
1:02:45head, and that's great. But then if I
1:02:48talk it out with other people, if I
1:02:51teach it to to others, then I'm
1:02:54processing it in a new and different way
1:02:56and cementing that information for
1:02:58myself. So that in teamwork, people
1:03:02learn by helping others and they learn
1:03:04from the help that others provide. All
1:03:06right. So tell me in the comment section
1:03:07below if you learned more from these
1:03:08guys than from books. Tell me your
1:03:10favorite advice below that you've got
1:03:11from this video. If you want to see more
1:03:13in the series, see similar videos. They
1:03:15have a ton of them in the watch list
1:03:16right over here. You can check them out.
1:03:17And here's a video on the screen you
1:03:19think you'll like next. Click it and
1:03:20I'll catch you back in that video pretty
1:03:21soon. Ciao.

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