What’s cracking, ma? How’s everyone today? Happy Tuesday. So the thing that can help you with this whole stop thing is you’re probably settling for less when it comes to making money. And in my opinion, you have to be absolutely unreasonable with making money absolutely unreasonable. I mean, what the hell are you taking all this risk for to make peanuts? And so what I mean by being unreasonable is you can’t be satisfied making 200 bucks a day and then be like, yeah, I’m showing everyone my trade ticket. I just smashed a trade for 200 bucks. If you’re doing that, you’re probably thinking about that’s like a sushi dinner for you and a date maybe, or it’s your favorite pair of kicks. Like again, get out of thinking in terms of dollars and start thinking in terms of percentages and start to envision for yourself how a current trade that you’re in could increase your assets under management, your account balance, your corpus, whatever the number. The thing is, it’s all different ways to say the same thing. How can that move the needle by five to 10%?
Don’t get in the habit of taking one quarter of 1% trades. Now, if you get stopped out at those levels, that’s the way God wanted it. But for the most part, your intentional activity should be, I’m going to put on a trade I’m going to add to my winners. I’m going to add change and adjust my protective stops as I need to, but I’m demanding from the market. Monster gains. Don’t tiptoe your way into futures. It’s the wrong industry. You have to be very, very brazen with your intentions. You can’t come in, be like, go, please give me some money. Please, Jesus, that’s not going to work. You can’t come to the market with a fear-based mentality. You have to play superior defense. But that’s just like enter protective stop. That’s the best you can do. Watching it isn’t going to help you.
Watching the market’s not going to help you manage risk. Now, I can say that because my system is calibrated for that. I’ve had, like I said, three and a half decades of constant observation, so I’m in a different spot. But when I was younger, starting out, it was exciting to watch the markets, but I realized that I’m not trading for excitement. I’m trying to make money here. And that when I watched the market and I saw I had $200 in my pocket and I had two weeks to go, I had four different people that wanted that money who I, for the various bills that I had to pay towards the end of the month, I was like, man, I got to make things happen. I have to create more profits. I don’t want to keep being in this situation where I’m robbing from Peter to pay Paul.
And so I had to develop the other side of my business obviously and serve my clients to generate the commissions and the fees until I had enough assets under management to go out on my own and earn incentive fees. And that was a real game changer. But in the meantime, what I didn’t want to do is get excited about making a day’s pay in one hour. I had to get rid of that thinking. It’s an interesting observation, but it doesn’t necessarily serve you if your goal is to make big money. So again, you have to demand from the universe all the abundance that you want. Don’t be like, well, one day it’s going to happen someday. Someday doesn’t exist any more than you’re saying, I’m going to be a world-class trader. I’m going to be means future tense and the future doesn’t exist. All you have is right now, so you can make up your mind right now in the ever evolving moment of now, of now, right now, of right now, right now that that’s what you demand from the marketplace.
Then you have to conjugate your behavior with that intention because it’s not going to come and kick you in the ass, especially if you’re cauterizing and taking off good risks. So the only way that I found able to marry my belief system with my behavior was to adjust my stops, stay in strongly trending markets and then stay out of my own way and stop thinking about stuff. Because going back to last week, if you were ready, willing, and able to risk a half a percent on any particular trade, what’s the damn difference? If it’s the initial half that would come out of your corpus coming into the day, right? Or you’re in a winning trade and you’re still risking that one half of 1%, why does it change? Because that’s the market communicating to you in no if and or buts that you’re on the right side of the trade. Again, whether it’s good luck, good timing or good analysis, what do you care? Figure it out after. You don’t need to think about it in real time. If you overthink things without being trained, you’re going to make the wrong decision all the time. That’s how I would bet against you. Not to say it that way, but I can count on you to do the wrong thing.
And the rest of us are like, man, it’s so easy to make money when you’re in a good trending market. Just stay out of your own way. Let the thing go. It doesn’t matter what happens on any given day, it’s going to go up and down in a positive slope. Y equals mx plus BM is positive. Great. Stay in the trade, right? I mean, you could write a children’s book on trading and say, okay, here’s the chart that you’re looking at. And if it’s not in the no, if it’s in northeast quadrant here, that’s a bi signal unto itself, especially if it’s daily or weekly. If it’s in the lower right corner, short it or stay, avoid. And if the thing’s going sideways for whatever reason, please for the name of God and everything that’s holy, don’t start down timing to look for opportunities. And that’s a message for you.
You stock index traders. If the trends aren’t happening on the dailies or weeklies, there’s nothing to do during the day. Find another instrument. Let the market do the work for you. It’s so easy to find up trending stocks for the love of God. I get so many emails from people who are struggling and they send me the charts and of course there’s 45 overlays on it and they’re like, man, these indicators are failing me. And I’m like, yeah, because they’re not indicators. They don’t indicate anything. They’re really confirmers. The price and the volume will tell you, especially price, everything that you need to know. What does Brian Shannon say? Only price pays. We say basically very similar things using different language, but the price will tell you where it wants to go. That’s the leading indicator, if you will. Everything else kind of confirms. So your indicators, again, are band-aids to help you deal with the feelings that you don’t want to feel around the uncertainty. Will my gains be there in the morning? Please, Jesus, please.
And I think you all get kind of uptight about this stuff when you should just let things unfold. And if you come in with that type of trepidation, granted, you always have to respect risk, right? So I’m saying macro. There’s the absolute minutia of managing the risk add risk with a buy stop above the market. Let the market come to you. Don’t chase your order gets filled, you automatically put in your protective sale. Stop. That’s the best you can do. Let the market activity unfold because you don’t know. No one does, and I’m not throwing names under the bus here, but people can have a good idea, they can figure that. They can have a good understanding of how things are going to go. But in reality, most people have a really bad at prediction. And I’m talking everybody from Bruce Covner all the way down to the guy who’s starting tomorrow or today, prediction is a sucker’s bet.
You don’t know all the forces that are at work. You don’t know what everyone else’s. Why are they in the trade? What are they doing? Are they adding to winners? Are there big investors who have hedge funds or forti act companies that have to step in and buy more stock? You really don’t know. You really don’t know. You can’t see most of that, and they’re selling you on wondering about what the market makers can see. It’s irrelevant. It’s irrelevant to how you manage risk. All you can do is put in your protective stops and if you sell short, you put your buys stop in above the market, the thing goes down, you can adjust your buys, stop lower. Don’t worry about your win ratio. If you’re winning 40% of the time, you’re going to be absolutely fine, but you need to start putting these things in context.
That accuracy is the name of the game. And sniper like entries matter. Nope, they don’t. You need to be relatively correct. And I’ve done, I’ve done some stuff and I’ve put orders in where there are massive amounts of slippage that would make you puke. I mean, thousands of dollars of slippage and skid on an entry, obviously we’re putting size on. So relatively speaking, again, it’s nothing to fret about because it’s a percentage game, but you need to start thinking abundantly and to start to think about how you are worth it or are you worth it? Maybe you have low self-esteem. Maybe you think you need to put in 10 years before you’re worth it. That’s not how my mind works. But this is the kind of stuff that we speak about in the coaching and the people sit back like, yeah, where did I get that limiting belief? Which parent taught me that?
Was it my overbearing father? Was it my engulfing and in devouring mom? Or was it some other sibling that was a know-It-all but is still living home at 32? You could make up your mind that that’s what you deserve right now. What the hell are you waiting for? I didn’t have a choice. I’m not getting into it anymore. I’m tired of talking about it. You all know if I failed on Wall Street, what I had to go back to and I didn’t want to do that. I was physically and mentally exhausted from doing that. I’d been working half my life doing that stuff and it was time for me to turn it on and work smartly now.
So that’s intention. When they say intentions, equal results, you have to believe that you’re entitled to it, that that’s part of who you are. Now, that’s what you do. You do the things that pro traders do. What do pro traders do? They manage their risk. They buy strongly trending markets. They move and adjust their stops and that’s it. And they let the big players kind of move the markets. And from lack of selling and increased buying, there’ll be ebbs and flows of the demand within the overall move, and all you do is have to hang on. Your protective stop will knock you out at the right time, but don’t think that you know better and that you can step in and figure that out on the fly by watching one minute bars or two and five minute divergences. Oh my God, that that process has killed more traitors than I think, than Bernie Madoff or Philip Bennett from Refco or John Corzine at Man Financial, or the other place. What was it? PFGBEST? Maybe I can’t remember all the firms that have gone wrong from egos anyway, think intentionally. You’re entitled to those if you do the work. Doing the work means putting your stops in and stay out of your own way and dealing with the emotional crap that really has nothing to do with trading. It’s your baggage that you’re bringing to the table that really doesn’t serve you, although you think it does. So you’re constantly wrestling with these emotions like, I want to make money, but I’m really afraid to
Lose. People feel pain a couple multiples more than they feel the pleasure of it. So the fear will pervade you and actually take you out of trades when you’re actually making money. Can you imagine the Vietnam that’s going on in somebody’s head there? I don’t want that. Anyway, those are my thoughts. I’ll be here tomorrow with Ganja. We have a great episode. I appreciate y’all being here, and I’ll see you tomorrow.