When I read this for the first time, it shook me (the 9-to-5 one!). I was just starting on my journey. I think I am still yet to prove to myself I'm not one of those. Anyway, all Brett's stuff is a must read as far as I'm concerned. Hope it will be helpful on your journey. http://traderfeed.blogspot.com/2006/11/three-market-idiots.html?m=1
Do you still have your job or did you quit it to pursue a career in trading or did you put your family in a difficult financial situation via your trading ??? That should answer if you classify yourself as Idiot #2 (the 9 to 5 one) in Brett's article. Traders should never quit their jobs to pursue trading when there's many other options such as taking a leave of absence, change work schedule so that its easier to trade, move to a different time zone so that it doesn't compete with your trading schedule, trade only on day's off or vacation days. The economy and growth in retail trading in today's markets is not suitable to quit their jobs to become a retail trader as it once was back in the 90's. In addition, in today's market conditions, you really need to save up enough income for a few years of salary along with your trading account to have a fighting chance to treat your trading like a business. I've met too many traders quitting their jobs and they didn't even backtest their trade method, didn't test it with real money on days off from work or vacation or leave of absence... They just jumped into the cold waters and figure it will just work in their favor. Resulting in not being able to manage the unusual stress conditions that they put themself into. Trading is not suitable for anyone that can open a trading account or read a trading book. At the minimum, they gotta have enough money saved up to pay all of their living expenses including insurance/medical coverage as if they had a job for a few years along with being properly capitalized to be able to produce the needed income for their lifestyle. Seriously, they typical person that has a job and decides to start their own business...they at least do that start up business on the side until they have the income level from the business to justify quitting their job. Unfortunately, most traders throw that out the window...ignoring they gotta treat their trading like a business. wrbtrader
In In fact I did, but I never put my family at risk! Took me quickly enough to realize I didn't know what I was doing. But the more difficult question is - what is your motivation to trade - can you REALLY honestly answer to yourself?
I got involved into trading prior to college and then continued through college with trading although my academic study/degree had nothing to do with trading. My trading account was funded by my old man...an ex floor trader on the CME that later quit due to health reasons (panic attacks & heart attack) and then next worked for the FED out of New York. Later, after college and the military, I sat down with my old man & elders at a family reunion in South Dakota to discuss my career...we decided that trading was a good fit for me. Its what I decided upon after that meeting with them. Motivation changes often over time. The motivation I have currently is to continue to support my family. My kids are now approaching their teens and I'll be going back to an office like environment with other traders...no longer trading from the home office. Recently I turned 50 early this year. I think I have about another 10 years at treating trading like a business prior calling it quits...either going back to family in France to manage the family business or going back to my ancestoral roots in South Dakota or just staying where I'm at to be near my children as they start their adult lives. Simply, what motivates me now is something I'm starting to see in the future about my life in 3 different countries. Thus, I have honestly answered that question many years ago and my answer has changed over the years and will continue changing until I retire or see my own children reach their adult years. wrbtrader
Age changes perspectives. Goal is to be around long enough to teach kids, and maybe grandkids .. I’m not to far behind you. 47
I have very little regard for the article and reminds me of the "Dog and Pony" act since it was written by a PHD who has written other books and was doing Psychology of Trading coaching in 2006. So when the guy is making his living working with losing traders, doing this article looks to me like free advertisement to get losing traders to sign up with him. And fact remains, if these traders had a well back tested method that they can trade within their personality, you wouldn't need a shrink coach. Do a sim account and triple it three times in a row while working the 9-5, then automate it and keep working till you have 3 mil in bank account, then quit your job. Losing traders lose for a host of reasons, and internally they will lie to themselves of not knowing why, but they actually do know why, and truth hurts.
Psychological trading coaches are being hired today at many institutional trading firms. Heck, there's now a TV series called Billions that has a pscychological trading coach via the character name Wendy Rhoades (psychiatrist) played by Maggie Siff. https://en.wikipedia.org/wiki/Billions_(TV_series) Actually, in the early scenes of the series she mentions she studied Behavior Finance in college which by the way is a real academic study (degree) and one of the fastest growing careers on Wall Street. I believe the reason why firms or individuals seek out these types of psychological trading coaches is to help employees of the firm or private traders to deal with things in their personal life that's having a negative impact on their trading careers & performances. Simply, people and firms obviously think they are needed especially when they are trading million(s) trading accounts. Lets put it this way...if I was a bank or trust fund and I had traders trading all those millions of dollars and one of my employees is starting to have a hard time at work after a difficult divorce, death in the family, stress related problems, depression... I will bring in the psycho therapist or in-house psychological trading coach to spend time with the employee having a rough time instead of believing the employee will figure it out on their own while trading millions of dollars of my business. wrbtrader
Also, I want to point out that there are many trade journals here at ET where the OP (thread starter) of those threads state that their trade methods are backtested and they had "positive expectancy" and some then went on to simulate trade the backtested trade method and the results were positive too. Yet, something strange happen when they then moved into real money trading... They were not profitable. Simply, there's a psychological variable in the trading of those particular traders that's impacting their trading in real money that obviously doesn't show up in backtest results due to there's "no emotions" in backtesting and many argue that there's "no emotions" in simulator trading. Seriously, there's no emotions in backtesting and lack or realism in simulator trading even if the simulator program inputs slippage. In contrast, there's plenty of emotions in real money trading and it's easily impacted by outside influences from our personal lives. In fact, I believe most season traders are equip to deal with trading related problems that impact their trading results but what about outside issues such as a death in the family, divorce or seperation, mental issue, serious change in health, negative change in the home trading enviroment and many other typical life changing events ??? Those particular traders that failed at trading via a trade method with a positive expectancy are traders that clearly needs a psychological trading coach or a psycho-therapist or a good personal talk with someone that fully understands the stress demands of the job as a trader along with having a plan to help that trader to deal with influences from the outside that's impacting that trader's career or job performance. This is the very essence of why many institutional trading firms have in-house psychological help for their employees or contract with an outside psycho-therapist or contract with just a plain shrink to help the employee to deal with issues impacting their job performance. Many jobs not related to the financial markets have such or support such via the health/medical benefits...Wall Street have been doing such for a long time now... Retail traders shouldn't believe they will "never" have any problems or that all they need is a well backtested trade method with a positive expectancy to help them deal with serious issues in their personal life before it can sabotage their trade performance. P.S. I knew a profitable trader that was always in control of his emotions. He eventually unglued after the death of his daughter (car accident). He was no longer profitable and just couldn't recover from the death in his family. He never did get professional help to deal with the death of a loved one. wrbrader
===Am I one of these idiots?== There are idiots and there are suckers Bret is a sucker (and you recommend us to read all his articles...?!, fuck him) , and you maybe an idiot ( i never discuss forum users unless they are asking to) What the difference between the sucker and the idiot? The suckers never dream and they strive for achievable (at least it was achieved by many before them) things. The idiots dream and they strive for unachievable (at least its was not archived by many before) things, suckers call it fantasy. When the idiot's dreams die, he morphs into the sucker. But there are some idiots who never give up on their dreams, most of them never came back , and they die unsuccessful - die as idiots in eyes of the suckers, those few who became a success die as geniuses... But to summarize what idiots do and why I want to finish with the words of one famous but unsuccessful idiot - British mountaineer George Malory. When asked before his attempt for concur mount Everest why does he go to the mountain, he said: "Because its there !" The idiot never came back.