Corey, I know most highly successful traders run their private finances much differently than they do in trading. By that I mean in trading we are programmed to take rational chances when the % of that win is in our favor, sometimes risking millions and millions on a trade. While in our personal lives we are less than enthusiastic to take chances or even to spend large sums of money. We know someone personally that is very liquid yet uses coupons in his personal life but is willing to take what most would consider big PnL swings in his account. Do you find that trait to be highly common among successful traders or even in your lifestyle. I know I personally tend to be more on the conservative side outside of work and during trading can be a downright animal in certain stocks when I know the % win ratio is highly in my favor. Most of the traders reading this thread think about all the things they can get from trading (mansions, ferraris, and whatever their eyes beg them for) however there are certain behaviors that I have seen over 12 years that run very common among good traders. maybe you could expand on the top 3 traits that the very best traders have.
Sounds like me.....use coupons often but a few thousand daily swing doesnt even get the palms sweaty.
The thing that's helped me get to another level is to truly not care about money when trading. That sounds counter intuitive, but I mean if you can train yourself to not care about your p/l, and only focus on executing, you will be better off. Every trader has been in a situation where they were up or down enough that they ignored their rules or did the wrong thing at the wrong time because they were letting the p/l affect them emotionally and influencing their thinking. I mean if you could trade 1 share of stock at a time, and your p/l moved around in swings of 50 cents or so, you wouldn't care right? That is not enough money to register any emotional response from you. Everybody has a level where they don't care about the $, but it's different for everyone. Confidence in your system, the size of your account, how much you need that capital, etc all factor in. The trick is to trade at one level where you can ignore p/l and focus only on perfect execution, then increase your size very slowly. If you start to get worked up by the money, move back down and move up again slowly after more time. If you were on the table receiving life-saving surgery you would not expect the doctor to be thinking of what he can buy with the money he's going to collect for the procedure would you? You would expect him to be reviewing the plan, coordinating the team and things like that. Yet so many traders who consider themselves professionals get worked up over money. Society has ingrained in us that money defines things like self worth, importance, attractiveness, etc. That is a very hard thing to break. But I don't think a trader will achieve his best if he can't learn to execute like a machine and ignore p/l. Keep in mind that I'm not advocating recklessness. I mean execute a plan that includes proper sizing and risk controls. In my personal life I'm just like everyone else. My mother raised me to be cheap and look for bargains, and that's still what I do. My wife gets mad at me for reusing zip lock bags! I just can't accept the idea of paying too much for something on purpose. My brain just don't work that way. Plus I always want to maintain a cushion because you never know when things might dry up. No debt, more cash on hand than I'll probably need, don't buy lots of expensive depreciating assets. These successful traders that spend every dollar they make just blow my mind. I just assume they're all young and dumb.
Any comments on how you deal with the isolation of trading? Can be a very lonely world out there. Thanks in advance, mmmarkus
If you are making money solely from your own capital, you'll likely be as stingy as scrooge. The living large aspect is mostly for those who make money from attracting other people's money to manage. The flash is to reel in the large number of idiotic people who confuse ability with a good haircut and teeth. Unfortunately this notion is deeply ingrained and continually reinforced. Index futures trade very differently from equities for many fundamental reasons. It's not the naive argument of efficiency that counts - futures are a mostly professional market that's true, and that does make it "harder", but the real thing is that the futures market has very different dynamics than equities - harder to decode for most people.
Never been an issue for me, I actually prefer working on my own. No distractions, come and go as a please, can pick my nose whenever I want. I am also fortunate to be in a private chat room with 10 or 12 solid guys. We don't do much calling out trades and such, but it's nice to have someone to chat about work stuff with or politics, sports, whatever. I call them the 'guys at work' to my wife, even though we're spread all across the continent.
I'd like to get a question in if possible. Could you think back to when your biggest aha moment was? Do you remember THE time where you knew you finally turned your trading around? Could you describe that moment?
Read the original post. "Iâm only going to report weekly results. Iâve always treated daily p/lâs as noise and donât pay attention to any time frame shorter than a week when it comes to tracking profits." Thanks Lescor for putting yourself out for this.
Lescor, Its good to see you back. Very much looking forward to this year. Many thanks. Quick question, are you a sector hunter??, meaning do you look for setups in "hot" sectors, stocks that will swing nicely, such as tech only or oil related when it was hot. Or do you scan the market in general and dont pay attention to any particular sector like that. thanks, EF