Absence of hard work. I think your self-talk probably sucks. You see, because what ends up happening is when you get into that spot where you are grinding and you know that you want to be a trader, you know that you want to trade better. It doesn’t matter where you are in your career. When you haven’t put the time in, you kind of know it. You see, and when that happens, you can fall into this thing of, see, this always happens to me, blah, blah, blah, blah, blah. And when I start thinking that way, I quickly stop and go and start saying things in the positive. Because if you focus on what you don’t have and you keep saying that to yourself, in my mind’s eye, you’re going to keep getting more of what you don’t have then. So if you don’t like a certain situation and you haven’t put the hard work, and then your emotional response is like, see, this always happens to me, or Why does this always happen to me?
It’s an endless loop question first of all, and there’s no real answer to those and you’re going to get more of the behavior that puts you in that spot because if you keep doing it, again, I’m not a psychologist, but there’s something that’s pleasing for you. I had mentioned one point in time where people can sabotage themselves by taking small gains and small losses and go on and on like that for years because it puts certainty to an uncertain situation or probabilistic outcomes. So the first thing that you can do if you want to get better is what are your intentions, right? Focus your work on your intentions and then act intentionally. If you are constantly pumping other people for their trading ideas, you’re going to go through a lot of people, right? I mean, because the pros don’t really talk about it. I don’t.
Anyway, maybe some do. I guess it depends where you work. Maybe if you’re on a trading desk, there’s that kind of environment. I always kind of kept my own business to myself and I always reciprocated by not asking other people either. I just generally don’t care. So if you’re having trouble finding trades, there’s a lot of services out there that can help you jumpstart. If you’re a chart reader and you want to just do it yourself, look for the things that are trending up. Call up a six month daily chart and look for something that’s the low is in the lower left corner and the high is in the top right corner and then back it out and see where we are in the greater scheme of things. Don’t get anchored and think like, okay, it was here, now it’s here. I’ve missed a trade. Sometimes those things are just getting starting. I mean, it’s only six months of data.
A lot of great things can happen. I mean, think about it. If you put on a trade right now, there is a possibility that you could still have it on coming through the holiday season at the end of the year. So you get what you think about in many ways. And so think intentionally. Think about, again, we talked about how to make more money. We talked about adjusting your stops and staying in the trades. You can make that an intention so that as you start looking for trades, look for the things that are already up quite a bit. What happens is people were like, oh, the things up 50%. I missed the trade. It can’t go up anymore. Well, if it’s going to go up 200%, it has to have gone up 50% ahead of time. Do you think the folks who had Nvidia at a hundred knew that it was going to trade up to whatever it traded up to 500 something?
Everyone likes to say that they could predict things after the fact, but in my experience, they’re usually just full of shit anyway. No one can really predict what’s going on out there. They can have a sense, but in order to call it exactly the way it unfolds is fantastically difficult. Now, look what happened with, well, actually, I don’t want to get into it. Focus your intentions on what you actually want and then use that as part of your self-talk. Even if you don’t have any evidence of it showing up, you start to condition your brain to see things in a much more abundant way. If all you think about is the frustration that you have because the market is stalled or your trading style is not amenable to what the market is giving you, you still have to be thinking like today is the day.
Remember a couple months ago I talked about every time I’m in this business every day, I know I’m going to win. I might not win today, but I know I’m going to win. I do winning things. That’s my nature, that’s who I am. I’m a winner. That’s what I do, I win. So you have to put yourself in that mindset, and that is going to require some mental growth. For those of you who are small traders or who are taking small gains, I think you can prove it mathematically that if you take small gains and small losses that you’re going to be that person for a long time unless you can find another way to endow your account. You have to focus your intentions on working hard but also working smartly. And if you’re not getting the results that you want, something has to change.
You can start with your research and how do you source ideas? Again, there’s plenty of places where you can go free online and they can help you figure out. If you’re just looking at charts, my goodness, you can go to bar chart, you can go to Yahoo Finance and just scroll through every possible name in the s and p 500. You can go through all the names in the nasdaq. I mean, there’s only five dozen commodities that trade with any kind of liquidity for the most part. So it doesn’t take too long to scroll through those and look for the things that are in uptrends and stop putting limiting beliefs that, well, the thing didn’t, I wonder if you did that and thought like, well, if you could correlate the performance of an instrument with your own performance, you might be holding yourself back on a few levels. In my experience, I know guys who don’t even look at things until they’ve made new 52 week highs and they make bank, you don’t have to worry about catching bottoms.
Cheaper prices don’t mean greater value. We understand that. That’s to me an absolute truth. But for some reason, people like to equate it with getting a baker’s dozen, and in my opinion, it doesn’t exist in the markets that way. You can think how you want to think. I’m not here to call your girlfriend ugly, but in my experience, when things are going on sale, so to speak, and they’re getting cheaper in price, I usually say, well, somebody knows something. I don’t know it, but I’m not going to come in here and try to prove all those people wrong. I know there’s short-term folks who like to fade rallies and stuff. That’s great if you want to collect nickels and dimes, but if you want to make bigger money, you have to be on the side where the power is. You know what I’m saying? Not terribly difficult to catch a 50 cent move on a retracement in an uptrend, right?
The reversals are pretty loud and clear. If you don’t have any idea, go get Victor’s Brando’s book, methods of a Wall Street Master, and you can look about it there. I have a relationship with Victor, but I don’t get anything on his book sales. So it’s a book you should probably have anyway, you don’t need me to tell you that. So look at reversals. You can see reversals at the bottom of the market. They could be pivot points, but usually you’d want to see something consolidate after that. Stage four, wait for it to sell off, then wait for it to consolidate. Sometimes it doesn’t do that, but ultimately you get what you think about, and so I want you to focus on the abundance, and in order to do that, you have to put in the work. If you’re reading charts, then what is it that you’re looking for? Are you looking for patterns? To me, it’s a lot easier to ascertain the trend. Now, if you don’t have a good eye for that, you could always look at a moving average. Like in commodities, it’s popular to use a 20 day exponential moving average. Look at the slope for where
You’re, this is a positive slope. If it’s this way to this way, that’s a positive slope. Obviously, horizontal markets have zero slope, so you don’t want to really trade where there’s consolidation, wait for it to break out on one side or the other. Obviously, if there’s a negative slope, you can be short, but you certainly don’t want to be long, and I would let go of trying to prove other people right or wrong, especially wrong. It doesn’t necessarily pay to try to be the smartest person on the desk. In my opinion. You want to make the most money and trying to be clever is kind of cute for a little bit, but I wouldn’t hire someone like that. Usually that’s tied to ego and people who have big egos can put themselves in positions to lose a lot of money because the goal isn’t necessarily about making money.
That’s the vehicle to get the more important emotional response, which is the public adornment and the likes and the thumbs up and all that other bullshit that you get in social media or what have you. I don’t particularly care for that because I just know pride’s a big banana peel and I’ve gotten blasted too many times over my career to want to make that ego stroke the goal. So that’s like when you start thinking about intentions, what is it that you really want from your trading? How do you want your trading to serve you? When you look at everything that you do over the course of the week, what was the feedback that you got on things? What were the highs and lows? For example, were you humiliated? Was your ego boosted? Did you make or lose money? And think about it in terms of percentages.
No one cares about dollar signs, and once you get to that spot, you’ll have more of a self realization and build your inner voice so that you can grow away from that. Because you have to remember, I always look at when people talk about the rich versus the middle class and they start talking about where the pay is or the compensation, and they use that as the breakpoint. To me, I always thought because I came from middle class, middle class is a form of behavior. It’s not about what you make. The middle class is the middle class because of how they behave and the things that they do with their money.
And I can speak from that where I am from. So if you’re struggling, you have to look at your behavior. What are you doing and what are you not doing? And look at how all of that serves you. How does not doing certain things like taking winners home overnight serve you emotionally? What emotions are you missing out on? What would it feel like if you had a 10 R trade? You really don’t know. You can imagine it, and then act intentionally to get that. You see what I’m saying? So that all kind of comes you, because then you can change your behavior because behavior predicts where you end up, but it all has to start in your mind, what is it that you want? When I ask people, I can tell you this and I’ll look you square in the eye, squarely in the eye.
I’ve had institutional clients who’ve confided in me because I’m in la. I’m not in any of the big cities where there’s traders, so they don’t have to worry about gossip and small talk and me showing up at a gin mill. I really don’t go to bars anyway. I don’t drink. But when you ask them after they’ve achieved a certain level of success, and I think this also ties into the one reason why business business leaders who are at presidents and c e o level start to fail and their colors start to fade, their careers go gray, if you will, is they stop having goals and they stop having personal growth. The single best thing that you can do for yourself, and yet there’s a bit of a conflict of interest, is to find yourself a coach and be accountable. All the biggest winners want to stay on top.
Tiger Woods had three coaches. You see what I’m saying? So you can do what you think is best, but they all act intentionally, acting intentionally and have a clear vision for what you want. And knowing what every action that you take means to you, both financially and emotionally, is a quick way to start figuring out how to pick that lock of success. You see, again, I was really lucky I was kind of born this way, but it doesn’t mean that I didn’t have to work. It doesn’t mean that I didn’t lose money because man, I’ve lost a lot of money trying to figure things out. Nowadays with the way the market is, I kind of pick my spots and I do as I have to do.
But at any rate, keep that in mind. Intentions, equal results, put that on a post-It note. You’re getting whatever you want at any particular situation, and you usually do it by design. And if you don’t know why you’re doing it, it’s likely because it’s tied up into your subconscious, which guess what is about a third of what we do on the consulting side is helping people actually figure out why do they do what they do when they can’t figure it out? Intellectually, the big hint is that it’s usually because on some level you’re just used to it and it’s probably emotionally appealing because it helps you seek pleasure and oftentimes avoid discomfort. People don’t like discomfort, so they avoid it, but as I’ve said before, sometimes the feelings that you think you want to feel at least intellectually are on the other side of feelings that you’re not willing to go to through your subconscious. Anyway, it’s been a good week. I hope you’re having a good week too. Thanks for being here. Please like and subscribe, click the bell thingy, and if you haven’t already gotten a copy of the Inner Voice Trading Audiobook, you can get that for free at Martin Chronicle. I’ll see you tomorrow. I.
Click here to get your free copy of The Inner Voice of Trading audiobook.
This is an automated transcript