Hey everybody, this is Michael Martin. Happy Tuesday. So I have another comment that came from YouTube by Roman. I hope I’m saying the name right, and it says, can you please, can you make videos on these topics? One, patience until our setup forms. Two, writing prophets. Three, emotional intelligence. Sure. I mean, I kind of have been making videos on those all along. I could probably spend a whole year on any of those three because they’re very deep subjects. I think it starts with the fact that we’re products of our environment and that the people that we were surrounded by are nuclear family. Our friends, they demonstrated certain behaviors in certain circumstances, when they were happy, when they were sad, when they were angry, when they were rich, when they were broke. And we learned that, right? We learned that behavior and part of it becomes part of us because if nothing else, it’s in our subconscious. If you’ve ever seen somebody fly off the handle or you have found yourself doing that, it probably comes from have you having seen somebody else doing it, right?
Verbal abuse that’s typically taught. People don’t gene generic generally come out of the womb wanting to rail on people and berate them. That’s kind of stuff that you have to see. Well, where did you see it? It might have been an innocuous type of a thing where it wasn’t really a big deal, but it was on that particular day. Usually those folks have regrets if they have any sense of consciousness. So I think we could take any of these and turn it into an episode. We’ll start with the first one. Patience until your setup forms. There’s a lot to be said. I’ve mentioned patience. What is patience? It’s the state of not doing anything. You’re in a moment of limbo. You’re waiting. Now that could mean you also have your stops in and you’re just waiting for the market to come to you, right? It’s life on life’s terms.
You don’t want to chase, or you certainly don’t want to engage in the market just because you’re not doing any activity, right? Because trading is not making executions. That’s the very last step in a very, very long process. Does that make sense? So it has to be intentional intentions, equal results. Well, what do you trade for? You’ve heard someone really bright say, what do you want your trading to do for you? How does it serve you? Does it help you busy up your day? Because man, you could look at charts in multiple timeframes and uptime and downtime and throw on indicators, and you could spend hours every day observing that stuff, but not making any particular progress. So I think when you think about patience, you have to think about what is it? What is it that you feel when you have to sit on your hands, right?
Because that’s really what comes up. Cause I don’t think of patience as a feeling or as an emotion. It’s a state of being, right? Patience where they’re, there could be things to do, but it’s out of your consciousness right now. So you’re going to go learn it on the fly. I don’t really advocate that. I think do your preparation. I think it was Paul Tooter Jones who said, the trading happens between 5:00 PM and 8:00 PM every night. And what he was saying is in the greater context is that that’s in your preparation at least, that that’s when it was for him for the next day. You might do it earlier in the morning, especially if you’re short-term trader and you’re looking, you’re really looking for a catalyst more than you’re looking for the name. So that’s a different mindset than someone who might be stalking as a position trader, knowing the fundamentals of a commodity future or looking at technical charts.
A good example of doing that right now and looking at a move that’s underway would be in sugar, right? Sugar’s taken off. There’s fundamentals that are going on. The charts moving up, hasn’t taken a break. I’ve seen these things move. They can keep going for a long period of time before it kind of settles in and creates another stage as stock traders would call it. So where did you have to be patient in other parts of your life? And what were the results then? Because chances are, if you don’t like the feelings that you have to feel when you have to be patient, there’s an emotional model, a psychological model around that you’re replicating. And it could infiltrate your trading. You might find it. We talked about relationships yesterday. If you’re impatient, you might try to accelerate a relationship before it’s had enough time to really ripen on the vine so you can study your own behavior, which is why I say self-knowledge is more important than trading knowledge.
Because if you don’t know who you are, it really doesn’t matter what you know about trading, about anything in life. You need to know what makes you tick. And the folks that I know that are really successful, whether they’re traders or Richard Branson or anybody else in business, is I believe that they have superior self knowledge and they know what they can execute. They can envision themselves living a life that’s very different from the one that they’re in, and they make that their goal and they go towards that goal knowing that it’s going to be messy, that it’s going to be full of failure, but they’re going to keep failing forward and learning along the way. So when you learn the hard way about patients that if you sit around and you keep trying to put on trades, when you have no business being in those trades because you put them on because of boredom or because you saw somebody else making money in a certain name, you realize that that type of behavior sabotages yourself by way of drawdown, right? Because it’s very rarely that you’re going to put on these trades as a roll of the dice and they’re all going to work out and become career trades. What are you thinking about? And I’m not trying to ridicule people because I’ve had these thoughts in my mind. I did things very intentionally coming up where I didn’t really roll the dice. I can count on one hand the time that I took flyers. I always had a preparation involved. My thought process might have been faulty because I was ignorant
To myriad things that you need to be aware of. But I was still making attempts because it’s in the attempts that you learn. Now, maybe you’re going through that right now. It’s hard to say. There’s no context in your question. But where in your life did you have to be patient? Was it applying to a school and you were waiting for the acceptance letters? What did you do? Did you call your friends and daydream about what it would be like to be in that school? Did you start looking at the online store to buy the hoodies with the repping the school name? Did you go visit the campus again by yourself? I’m not making fun of anybody. I’m just giving you some for instances. What did you do when you had to be patient? How did you spend that time productively knowing that you’re powerless over the outcome?
So I look at that as patience can mean a few things now as it’s hitting me. It could be when you’re not in a trade and you’re waiting for a setup and it’s not there, or they haven’t evolved yet, or you haven’t found them right? Because now you’re stacking emotions. You have to be patient, but you’re also frustrated that you don’t have enough names. So how do you do better research? So that feeling might motivate you to help yourself do better research so that you’re better prepared. That means maybe fewer missed opportunities. Cause I don’t know these days what the screening process is. I know there are tools out there. I don’t typically endorse any of ’em, but you might find one that helps you screen your names because that’s the beginning of it all right? Is to figure out what’s going to even be on your watch list to trade the certain way that you trade.
Then there’s, when you’re in the trade, you might have to be patient. Is it moving enough for you? Or do you cauterize the winning trade because you can’t take the pain of winning, right? I have a whole thing on that where I think there’s a whole family in a universe of short-term traders that could make a lot more money if they could just learn to hold onto their positions longer, especially if they’re winning, you see? So what does that feel like? Does the lack of patience cause you to unwind an otherwise good trade that you’re in because it’s whatever, it’s hit your three R level or it’s 3 45 eastern time?
So try to reconcile what those feelings are trying to teach you, because I believe sometimes the feelings that you do want to feel are on the other side of the ones that you don’t want to feel. You just have to learn to get used to them and take what used to be discomfort and make it comfortable. How do you do that? Massive repetition. You just keep doing it little by little. You don’t have to make gigantic strides. Just do it little bit, little by little. But then again, if we’re all pleasure seekers, what is it that you feel when you have to be patient? And how does that serve you think you don’t like those feelings? Why?
Because I’m from the school that there’s no such thing as a bad feeling. They’re all good because they’re all showing you that there’s a certain stage of where you are in your life right now that doesn’t conjugate with an image that you might have. And I learned, one thing I learned from Ed was knowing how to understand the difference about judgment and being a judge so you can really go to school on yourself when it comes to patience, because sometimes sitting on your hands is the best trade. And that could mean two things. One, not putting on a trade impulsively, which I know a little bit about. I I’ve acted impulsively when I was younger.
And then what do you feel when you have to be patient when you’re in the trade? So there’s two things there. What to do when you are not in a trade? Do you force trades because you’re busy and you can’t take the feelings of doing nothing when there’s other people that might be making money trading another style and another instrument or another asset class? So how can you reconcile that and realize that sometimes being a pro means no activity, right? Because either the setup that you’re looking for isn’t there, or the exit on the trade that you’re in isn’t there either. So then you could study, yes, I didn’t get stopped, I didn’t take my profit, but I have a time stop that I’m going to put in now. So after two or three days, if I’ve been a trade and it hasn’t worked out, I’m just going to offset the risk because clearly momentum has stalled.
Now look, I can go on and on about this stuff for hours, but to me it’s like the best thing that you can do is really study yourself because behavior predicts where you end up in life and it’s no different for traders, you see? So look at that and just notice there when you’re engaged with something and you’re looking for an outcome, but the delivery of that outcome is uncertain, right? Cause trading in and of itself is probabilistic. Look at anything in your life though. You reached out via email to somebody or you sent someone a text or you were going to get tickets for the new Basquiat installment downtown la, which I would I’ve seen last week and I would go see it. I’m going to probably see it again. When you invited somebody and they didn’t get back to you. So what is it like? Why didn’t they get back to you? Well, maybe they’re blowing me off. Maybe they’re being discourteous, this and that. Maybe the email went to spam, maybe their phone was off when the text was sent and it was never delivered. So you make up all these things in your brain about what it could be that’s off putting for you and maybe what happens, you act out of emotion and snap at the person. So again, that all comes from not being willing to feel the feelings around patients.
What happens when you have to sit on your hands?
Does that emasculate you? Right? Do you feel you should be doing more? Maybe your opinion of yourself is not congruent with where your ability is just yet. And that could certainly cause a lot of trouble because you could find yourself. I was in the very beginning of my career on Wall Street, I thought that a trader was someone who could trade any asset class in any timeframe and owe how wrong I was. And my success only came by saying, okay, I have to put some of my goals and my dreams and my aspirations on the back burner and focus on one. So I think I remember telling you that I had to first cut away foreign exchange, the interbank stuff, then I had to stop options trading. Cause it took up a lot of time and there was certainly a knack to it. I had some skill in managing stocks, but I had the best results from commodity futures, and that’s just the way God wanted it, basically.
So I put four x options, equity derivatives and stocks over here while I focused on getting good at one thing and one style. And then from there, I could grow. In the meantime, I had to deal with the feelings of like, why was I a failure at far X and how do I reconcile the fact that I had skill in trading stocks, which was much more popular, much more broad asset class that almost anybody could talk about. Whereas commodity futures is not necessarily a household asset class, if you will. It’s not something that you’d jump in a cab in New York City and someone could talk to you about the march april spread in natural gas, for example, where they might have an opinion about Amazon or Apple and the new iPhone at the time, or this and that. So the best thing that you could do, I think, in any of this trading stuff, is really study yourself and investigate why do you feel the way you feel?
And then how did you pick up those feelings? Because it’s from learned behavior, right? Then you could begin to unwind it and or replace it with behavior that’s better for you that suits you based on what your goals are, and of course what it is that you want your trading to do for you. That’s why I bring all these questions up because they all kind of come back to that. It all comes back to you having a goal and having a clear vision of what you want your life to look like in the future. So anyway, thanks for the question. I appreciate it. Please like and subscribe and let me know what you think and the comments below. I usually respond and or I’ll do a show on the next one. Thanks for being here, folks. I’ll see you tomorrow.
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