Hey everybody. Happy Friday. I hope you had a great week and you have fun plans for the weekend. I try to do stuff that’s far from where I live. Take a couple weekend trip, go away for a couple days. Sometimes I take off Friday just because I can. Last week I saw Keith Harring installment down at the Broad Museum downtown Los Angeles, and I kind of tune around, try a new restaurant. So I have lots of what I would consider very life rich life experiences, ganja and I talked about that. Taking a break, getting away. Sometimes you can’t travel, sometimes you can’t get away because you have too many things lined up. Excuse me. But all that notwithstanding, I want to talk about accountability. I think Ganja and I had talked about that, and there’s a lot to say about that. When you work by and for yourself, you have to be accountable to yourself. One of the problems is that if you don’t have a good attitude, you don’t have good discipline. If you lack persistence and determination, sometimes you can find yourself falling into bad habits because there’s no one there to scold you, so to speak. There’s no parental figure. There’s no mother or father figure. There’s no boss. And so you can just say, well, it’s my money. I can do whatever I want. And you certainly can, it’s yours. But there was a little trick that I played on myself, and I bring this up a lot because we do have some rather large prop trader hedge fund style folks who look to me for accountability only because I know the difference between when they’re trying to shine me and when they’re actually talking sensible stuff, and that helps them perform better. So when I was coming up, I had already had some management experience. I had owned my own landscaping company. I had people work for me on Wall Street. I had been a training manager. So I knew what the behavior was that was expected of these particular people. And it wasn’t like there was any threat of them getting fired. That’s not the point. But when you’re helping people learn really, really good behavior, it has to be consistent because again, we all know that behavior predicts where you end up. And so my job as a coach was to do a lot of listening and to help them understand why they did what they did, because it never makes a lot of sense after the fact. But it feels really good in the moment, especially if you’re trying to avoid pain and go towards pleasure. And so when we look at that and we conjugate that with your behavior, and we conjugate that further with the goal that you want to achieve, even if it’s a short term goal, and that could be gathering assets, that could be a certain type of performance, it could be executing a particular type of a trade because there’s those windows of time where you’re really just Practicing even though you’re real using real money. It’s like a scrimmage, right? It’s not paper trading, but it’s not like you’re not pro yet, but you still have to try certain trades on for size to see how they feel, how you can execute them. And you don’t have to trade size. You can just put on a small piece. So the trick that I did for myself first was I imagined myself having a boss. And so I would say to myself, if I had this boss who could fire me or who would evaluate my performance, what would they say about what I’m doing today? Right now, if I had a meeting at the end of the close or after the close every day and I had to say, here are the trades that I put on, here’s what I was thinking, how would that feel? And a lot of times it was humiliating what that eventually did, even though I didn’t put those trades on, right? Cause I was using this as a mental trick. It saved me from being a bonehead, which is easy enough to do no matter who you are. Now, accountability is important because ultimately behavior kind of predicts where you end up. And it’s tricky because when you’re starting out, you have to take attempts, you have to kind of take flyers if you will, but you do it in a very small scale to see how the trade feels, because trading is going to push your buttons on the fight or flight mechanism that we have. You see, it puts you deliberately into a risky situation, and you have to be mentally and psychologically with that. Some people don’t like the stress of that. It makes them freak out and do, I don’t want to say stupid things because that’s condescending, which of course means to talk down to people if you saw the Seinfeld episode. And so you have to be loving when you’re coaching people because if you come in over the top and use the wrong word at the wrong time, you can shatter someone’s confidence. And that’s the whole point of being. Accountability is to be, for me anyway, to be kind of paternal. It’s to be a good coach, to be a really good listener, and then actually to ask open-ended questions that can evoke really good responses so that the person can kind of figure it out for themselves. And that’s true of anyone. I had an accountability coach who might have heard of him. His name’s Ed. So whenever I would ask him a question, he would almost always reply with another question so that I could figure it out for myself. And that really made all the difference. You might feel differently, but it worked for me. But long before I even got there to Incline Village the, I used to put this trick on myself where I would say, okay, well, I don’t have this accountability coach, so I made one up in my brain, call him the Wizard of Oz. And if I had to at the end of the day, break down all my behavior and explain why did you do this? As if I was kind of on the rookie trader witness, I’d have to have a really, really good answer. And so that helped me create my thought process so that it helped me not get into those types of trades. Now, when you are starting out, you are kind of taking flyers, if you will, because you have to see if the strategy fits for your personality, and then you have to work on both the trade and your personality to get them to be in a marriage, so to speak. But it’s a very clever way to help you keep yourself accountable if you had to explain to somebody else what it was that you were actually doing and did that behavior line up with your goals, even again at the beginning, you’re kind of rolling the dice with certain things, but then you evolve to know one or two strategies that make sense for you. I personally think people have too many strategies. They should focus on one, maybe two, and then leave it at that. Because trying to be each trade is actually a trader, you see? And so I feel like if you try to fade gaps at the open, for example, that’s a trader. It’s a setup, but that’s also a specific type of trader. If you look at things that got smashed during the day and you’re watching the last half hour of trading to see if it rallies and recover some, that’s a different type of trade too. So I think you would want to try to master one before you try to be all over the place. That really worked wonders for me because again, if you’re trading with real money, you might have limited capital. And so what you don’t lose, you don’t have to earn back, and you can get to profitability much sooner. This is true in a lot of areas in life. This past week we had, I’m involved with a nonprofit that brings kids in from the slums of the favelas in Rio Jane era, from Nia, Jare, PUA, and the big ones in Esca and of the, so basically we give them, after three months, we give them a kimono, a free one, and that we pay their tuition. So it’s basically a scholarship school. Now since, and the schooling there is very, very different. There’s a point to this story, so stay with me. So from like eight in the morning to 12, there’s actually nothing going on. So the kids go to train from 12 to four, they’re actually in school academically. Then after school, which ends at four, they come back and train till around eight o’clock at night, then we feed them dinner. So the point is really yes, to give them great jiujitsu instruction, but it also, if you know Coca, it’s a very rough place. It’s not unlike Skid Row or la. It’s not unlike what the South Bronx used to be in the seventies. So if you’re poor, you can find yourself stealing and then fencing stuff to raise money for your family. And this is day-to-day. You could get involved in drugs, you could be a part of the begging Mafia, or worse, you can get into child prostitution. So it’s a bit of a safe haven. Long story short. But the point is, Is that even though they, they’re there to train for jiu-jitsu, we make sure that they attend school, that they don’t just duck out for four hours and find something else to do. They have to have perfect attendance in order to get the free tuition at the jujitsu school. And also in jujitsu, they’re trained to compete and the best ones there actually come to America to compete. Most recently, they were in the IB J J F World Championship at the Walter Pyramid in Long Beach. And so that’s really exciting because putting them on that type of a stage really changes their lives. They can kind of see, eventually they’ll go in eval and evolve, get their black belts, then we’ll open up an academy that they can run for themselves and they can train and earn money from giving private lessons and this and that. But it occurred to me also that there’s an analogy between jiu-jitsu and trading, especially at the tournament level, because there’s ways to avoid having your opponent score points on you. You see, because what points aren’t scored on you, I don’t have to score on my opponent because it get gets to a point. If you’re in a five or six minute match and someone’s up maybe 16, nothing, it’s awfully difficult to come back and win. You almost have to go for the knockout. And you see that in mma. You see that in boxing. You have these rounds. If you’re down several, two rounds, you have to really score a submission in mma, for example, or some type of choke in the tournament. So they’re taught to not give up points. Don’t let anyone pass your guard. Don’t let them accumulate points on you because then you don’t have to put yourself in a bad spot. Because normally it’s like me and the Matt against my opponent, but then if I’m in a tournament, it’s also the clock. And that can get you to do stupid things. And they say in Jiujitsu, you don’t get the arm bar, you don’t get the rear naked choke. Your opponent gives it to you. And so I started thinking about this as it relates to trading, is that if you don’t put yourself in a bad spot, you don’t put yourself in a spot where you have to recover. And that relieves yourself of a lot of duress. Now, I happen to perform well under stress, but I was born that way. I have the personality that would’ve been good for being an emergency room surgeon or 9 1 1. What’s your emergency? I don’t panic under stress, it’s just my makeup. I think you can work on that too. So I think it’s a learned skill. I just happen to have been born with it. So I’m super lucky that I found this channel of trading, especially with highly levered instruments in terms of commodities and this and that. So think about being your own accountability coach by setting up rules for yourself where this imaginary figure would look and kind of grade your behavior for the day. Because if you could win for one day, then you could win on Tuesday, and then you could make it a goal to win for the whole rest of the week. Now you have a week behind you of really, really good behavior. Doesn’t matter what your p and l is, You’re powerless over the p and l. The best you can do is keep your losses small. I was talking with a consulting client a week or two ago, I might have said it, and he said, well, I lost two trades in a row, so I feel like a f an idiot. His word’s not mine. And I said, you’re internalizing the results of something you, you’re result. That result. I think people call it resulting. I don’t know. I’m not a psychologist, but you can’t look at the result of your process and kind of go back and say, well, the process was bad because the result was bad. Same thing. I can’t be reckless and put on a big trade, make a lot of money and say, yeah, now I’m onto something just because the result of what I did was positive. It could be absolutely horrible system with negative expected value, and it’s just a matter of time. If I repeated that process where I could give a lot of money away from being not connected to my process. So this really, really helped me quite a bit. I haven’t spoken about it enough because it just doesn’t really come up in the kind of conversation, nor does it come up in the questions that people ask online. But being accountable for your behavior is really good. Cause it helps reinforce discipline and after attitude, I think, yeah, discipline’s really, really important. Anyway, share with your, share me how you do it, because I don’t have all the answers. This was just what worked for me. If it helps you, great. These are the kind of things that I wish I knew that someone would’ve helped me when I started and those people just didn’t, they weren’t around. So I had to kind of learn it and do it myself, which kind of made all the D, if you look at that Robert, Robert Frost poem, I’m about, there were two paths, whatever, and I took the one less travel than that made all the difference. So you might find something similar in your own behavior where you could learn and be your own best coach. If not, certainly reach out to me. I’ll point you in the right direction. Anyway, please like and subscribe, share this with your friends if you think anyone could benefit from it. I hope you have a great work weekend, and I will see you Monday.
What’s up party people. So I want to follow up on Tuesday because it hit me of course after I hit stop recording about something else that I had that I didn’t know I had at the time that I realized after the fact several years later after that four and a half year kind of window. And that was self-sufficiency. And it came from a comment from another video, let me see if I can find it. Brett had written in again about one of the biggest misconceptions, and it’s true, when I was in the office, we had about 70 guys and there were a few guys who really, really did well. And a lot of the younger Turks would kind of come in, do what they had to do in the morning, and then little by little they’d kind of find a way to wander over to the desk of some of the better traders and just kind of stand there and try to talk to them and this and that. And so there can be an education process if they were mentoring. I don’t think it was a mentoring program, it definitely was not a formal one anyway, but a lot of people wanted that reassurance and I think they were afraid to step out and take the risks. And again, the world is very different now. Trading desks have that kind of built in. But I always knew I don’t want to have to rely on anybody else because what happens if that person leaves, right? There’s lots of attrition people that started at one firm and now they’re at another firm. Well, if that person was at firm A was integral to your success because they kind of fed you ideas and you rode their tail coats. But then they moved to another company now. So I knew inherently that I did not want to rely on anyone. I was always a very autonomous person. I was a self-starter even from the time I was young and I was cutting grass and trimming hedges in my neighborhood. I was 12 years old. And I just said, if I remember this vividly at the time, you know, wanted to have, just like today, kids want to have the most, and adults too probably. They want to have the coolest sneakers. That was a big thing when I was younger or else you would get the fruit of the loom skippers at the Grand Union or the Vons or the Ralphs, wherever you get your grocery stores. And there’d, you’d fit them in. They’re very affordable, they weren’t terribly comfortable and they weren’t made very well, but they were affordable. Being that I wanted to be popular and cool. Anybody else? There were really two sneakers of the day. Both still exist. One that was the Adida Superstar, which was the white leather with the black stripes, the low cut Oxford with the plastic toe looking thing that was always around. And then there was Puma. And the Puma Clyde was after Clyde Frazier. It was in probably his endorsement sneaker. He was a New York nick and that was, they called them Puma. And those were the blue, the beautiful blue suede leather with the white Stripe. And they were like 30 bucks adjusting for, well, actually not adjusting. They were $30 back then. And they looked great because we didn’t really have dress sneakers, if you will, nor did you have these distressed golden goose kind of things. And we didn’t have the money for those. And so my father said, look, what you do with your money is your business. And he helped me. Hockey gear, right? Hockey gear was fantastically expensive. It was then and it is now. And that was really my sport. I started skating when I was three and a half. So in order to get those cool dunes, the jeans and the 5 0 1 s were just coming into the button flies things and this and that. And so you want it to be hip and be popular with the opposite sex, you know, had to have the cutting edge popular stuff. And so I just start, some of my friends, Ray and Tom, they had paper roots. We lived on this big hill, it was like half a mile up and one had one side of the hill, the other guy had the other. And that was kind of interesting. But that was an awful lot of working. And you had lugged the papers with you and they were heavy. It was gannet newspaper chain, I think, in my hometown in that county. Now it’s all kind of low hud.com. But back then they actually had physical papers. And that paper was called the Reporter’s Dispatch. And that served that part of Putnam County where I was. And so having said that, I said, okay, well where’s my opportunity? Where’s there a hole in the community that I could fulfill for everybody else who was unwilling to work or whose parents didn’t instill in them that they needed to work? And that was something that my dad made sure that, you know, got to work, you’re going to have to start working sooner or later. And it’s good for your discipline. So again, we’re talking about being self-sufficient. And so I said, okay, well I was good at cutting grass. I could make the lawn look good if you let it grow too long before you cut it, now you got clumps of grass, you have to go back and rake it up. Otherwise, if you have a clump of grass and the sun comes out in the blazing hot summertime, it’s going to bleach or give shade to the grass underneath that’s going to turn yellow. It doesn’t make your lawn look good. So I had a lot of good aesthetic because some people like manicured lawns. Now that’s important to say cause it’s going to come up five years later. And so what I would do in the summer to make money so I had more liberty. It wasn’t like we were completely poor, but I wanted to be able to come and go as I please. That was just my emotional makeup I had. I would fish. We had lots of large mouth bass, Crappies, perch, catfish at night. And so I like to fish with my friends. And so in order to fish, you need good gear. You can tackle box, right? So I also funded that I had a bike. And so when I go back and think about that, I would take the gas, I’d have a gas can and a push mower and I would just go up and down the street and say, Hey, you need your lawn done. Your lawn looks long. It was like, oh, I’m going to do it this weekend, or sure, go ahead and do it now. I wouldn’t even ask them, like say I do it for five bucks. I’d just say, do you want your lawn? Cause I’m 12 years old, what the hell do I know? And they would just give me a five or a $10 bill. So I would do that, save up my money when the winter came, because in my hometown we had four distinct seasons. So the fall come leaves would fall off the tree. California, we don’t really have that rake the leaves, mulch them, clean the gutters for the winter, maybe dig out some ditches, prepared the lawns for the winter that was lucrative when the winter came first, snowfall, I’d be out with the shovel walking around the same. So I kind of became the little mini landscaper for certain people, especially the older folks whose kids had grown up, had families of their own. And it moved away. And this is before the whole cottage industry of the landscapers now who have that kind of business. I certainly didn’t invent it, but I made a lot of money and became very self-sufficient in those years. And so I’d go back and hit the same people where I would cut their grass, rake their leaves, trim their hedges, clean the gutters, I’d go back and then help them winterize coming through the fall. Winter comes, we would get six inches, 12 inches of snow. And I didn’t have a snow blower, but I had a snow shovel and I’d go clean their driveway, clean off their car, clean a path from the front door to the car, that kind of deal, maybe throw a little salt on the ice so that no one would slip. And that again, was probably good for 10 bucks a driveway. And on a good snowfall, I could do three, four, or five driveways in a particular day. And that’s kind of what I did in the winter. So I had an idea to be self-sufficient from a very young age, just from my own design because I wanted to have a certain life. So I had felt comfortable for me to do that. Why do I give you that long-winded story? Because when I hit Wall Street, I was not interested in anyone else’s opinion. I remember what everyone’s like, oh, Elaine Garelli called the stock market crash. I said, 50 other people called the crash. And now I even know the numbers. Every one of the guys who I with or work with in Market Wizards, they were all short the market. It wasn’t a big surprise to anybody, but when you’re a retail space, you don’t know any better because why? You’re looking for tips. You think that there’s some kind of fix when there’s not. There’s really just a good model that’s appropriate for you. And so I didn’t also felt like it was humiliating now that I think about it, to have to go in to see these guys to start small talk about, yeah, hey, about them, how about them Yankees, or how about the Rangers? And eventually get into, well what are you looking at these days? What do you think? You see the move on Sun Microsystems, or did you see the move on whatever the darlings of the day were? And they were smart. They knew what was going on, and I just didn’t want to be in that spot emotionally for myself. I didn’t want to have to rely on anybody else. So I never really asked them advice on that front. So I feel like if you’re on the institution side and things are difficult, you know, might have to morph your trading style. Certainly trading smaller can be beneficial in these times. Two, Nvidia had a big move recently, and I had a lot of folks write me and said like, man, how come I didn’t see that this, that, or the other thing. And it’s like, you know, have to remember if a thing could be up 80 bucks a day, it certainly could be down 80 bucks a day. So you can’t look at it and just say, well, I didn’t have a model to get me into this outlier event. No one would predicted that nobody was calling for that kind of a move. They’ll all take credit for doing because they’re sheep, right? But at the end of the day, you thing that saved me again from Mad Cow when I was long cattle was my position sizing, which has remained consistent, which is one of the benefits of not being a discretionary trader in that the position size is largely the same regardless of the instrument, regardless of long or short. So this will come for you if you’re newer over by making your attempts and developing it that way because you have to be in the game. Simulating is good. Paper trading is okay. It certainly helps you learn how to work and enter orders, but it doesn’t necessarily help you because you never feel the burn of making or losing money, you see. So I think the goal should be to be autonomous, to be self-sufficient, and to eat your own cooking. That’s the fastest way to learn. The more you’re going to lean on other people or alert services or otherwise, to me, you’re stunting your own growth because the growth is on the 80% of the side of self emotional intelligence, your trader psychology. If you’re leaning on other people for your trading ideas, your trader psychology is telling me that you don’t feel secure enough in your own skills yet to do this. And that makes it hard for anyone to want to hire you if you’re subscribing. I always mention Jim Kramer, not because I have anything against him. He’s super bright, he knows more about stocks in his left pinky than I’ll ever know. I do think it’s challenging for him to do play. I think as a trader versus being a public persona, I think he’d probably do a lot better if he didn’t have to be on TV all the time, right? Because he had a great track record as a trader for sure. But the more you have to rely on outside stuff, it can tell you a lot about your psychology. So I’ll leave you with that because you can go only you know what it is. If you want to think about that and reach out to me, I’m happy to help you. But in the meantime, that’s kind of the deal is like when you have your own model that’s compatible with who you are as a person, then you’d really never, you don’t have to rely on anyone or anything for the rest of your life. So it’s like your little formula for Coca-Cola and it’s uniquely yours and no one can take it away from you. So that’s why I don’t listen to the tv, I don’t subscribe to anything. I do my own work. Admittedly, when you’re starting out and you have to cut your own teeth, that’s the scary part because you don’t, it’s life without a net. But that’s feel that burn and embrace it because that’s what’s going to help shape you, right? You’re culturing your own little pearl there. Okay? Anyway, please like and subscribe as everyone says on their YouTube channel. Click the little belly thing so you can get alerts when we do videos, which is probably every day. And please keep your comments coming, your suggestions, because it helps move the conversation forward. That’s all today though, folks, and I’ll see you tomorrow.
Hi guys. Welcome back to the series that Mike and I do where we go over comments and questions and kind of talk about it, see if we can add on to what you guys have to say. And yeah, today’s a really good episode. I am always excited to respond to some of the viewer comments and suggestions. Before we get into that though, I wanted to say, if you guys haven’t already, make sure you guys like and subscribe, all comments up the algorithm. Make sure you guys click the notifications bell so you get uploaded every time, Mike, so you get notified every time Mike uploads a video. I’m going to redo that. Okay, I’m just going to cut If you guys haven’t already done so, make sure you like and subscribe. All comments, help the algorithm, click the notifications bell so you get notified every time Mike uploads a video. And with that said, we’re going to get into today’s topic, which is from Twitter. Actually, it’s from Stella Effects on Twitter. And it says, I listen to his daily monologue in the background. The way I view these conversations is as an accountability partner, even if some lessons are repetitive because they are from a different angle, it keeps me motivated to want to listen more. As a trader, the learning never stops Truth. So you want my comment on that. So yeah, the learning never stops. That’s for damn sure. I have 35 years of experience and I’m constantly not necessarily studying the markets cause I know the markets. It’s more like I’m studying my own behavior as I adapt to the ever-changing environment. So I think it’s a good point. Also, I just want to say thank you for commenting. Hopefully you’re subscribed at YouTube as well. You can see a lot of great comments on the shows that might resonate with you and join the conversation there. Cause it’s really, really, it’s more robust I think, on YouTube than it is in Twitter. But I appreciate you. I think Dutch Trader had made a similar comment in that thread, if I remember correctly. And I appreciate everyone taking the time to write. This isn’t like, this is kind of like aa, it’s for those that want it, not those that need it. So I don’t care about vanity metrics, the numbers, when the student is ready, the teachers really right there and underneath their nose, and this is all public, you can find it as far as, I try to have a daily monologue because it reinforces the things that are important to me. Although this is my way of giving back to the community, it also reinforces the things that are important to me. So I’m, I don’t want to say relearning it, but I’m reinforcing it. And it’s important to do that. You have to stay on message, right? That’s important to anybody who has an agenda or who is what I would say a successful person, which is a goal setter. I appreciate that anyone would use me as an partner. I think that’s good. In fact, most of the institutional folks who hire me for the one-on-one, a lot of that is for accountability. Because I’m not in London, I’m not in New York, I’m not in Chicago. So you’re not going to see me at the local watering holes talking with your peers or your colleagues or competitors, for example. So there’s never going to be any gossip. And I’m also, I’ve made every mistake. I’ve worked with high level people. I’m working with legendary guy right now, and I’m incapable of being bullshitted on that front too. So I can hear when someone speaks the kind of language that they’re using, of course in a very safe and loving environment, ask you to rephrase something. Why did you choose the words that you used, right? Because it probably comes from your environment. So accountability is really, really important. I have people in my life that I use in account for accountability, for the art, for guitar, for trading and for jiujitsu and all this stuff. I keep it very, it’s part of my consciousness. Cause I think whatever you measure that way can be improved upon. I didn’t come up with that saying, but I believe in it. And I think he said something about, what did it say about repe rep repetition or something? Yeah, It says even if some of the lessons are repetitive because they’re from a different angle. So I think you’re spot on there. This is sometimes I’m repeating myself and that’s not lost on me and I appreciate you saying it. I don’t take it as a dig. You have to remember, I am definitely doing this show for our subscribers, but I also have to think that someone who might be watching this episode, it’s the first time they’re actually seeing the show. So that’s why I in fact, think about goal setting. I might sound like a broken record about it because you can’t underestimate the importance about it. If you don’t have a goal, what the hell are you trying to do? You’re just killing time. You’re passing time until you find the next thing that captivates your attention. So the way I try to keep it fresh on the repetitive theme of goal setting is to look at it from as a multifaceted kind of asset class, if you will. And I try to think about it from another angle because that also helps me. But I think you’re dead on, you know, called me on it. But I think it’s important. And that’s how I approach things like that because I keep the, to me the most in single most important thing is the goal setting is what are you actually, there’s a financial goal and there’s an emotional goal. So when you think about the goal, envision yourself in the future, what would life be like if you hit that goal? Not just what would you do with the money, but how would you feel? Because now you probably have what, more liberty, you don’t have to sit in front of the screen. So I think it’s not being repetitive because I’m running out of things to say it’s because there are certain things that I think are the hallmark of success. Goal setting is by far the number one thing that folks should think about, think about. And then two, just like you’re doing, your goal was to play for a level team and to be in that world class level. And you’re absolutely there and your trajectory is still up. And for me, it’s the same thing. Once you’ve attained a certain type of, for the blind that once could see the bell tolles for thee, I don’t want to lose what I’ve attained. So how do I do that? Well, I have to throw my consciousness at it. And I’m not sitting here on a trading desk. I don’t have two or three or other partners. I don’t have 14 people working for me. I don’t have consultants working. It’s all me by myself with you obviously on the show here. But for the most part, a lot of that I live and die by my own sword. And there is no short swords here. This is all really, really important stuff. So for you, Stella fx, hopefully we’re saying it correctly, your name, thank you again for writing. But a lot of it is for my own accountability and for my own motivation. And I’m sharing it hopefully in a bite sized way. I don’t have to blather on for 30 minutes. I was listening and trying to listen to an interview the other day and the guy, he was a guitar player guy saying, he’s talking about the history of a certain song and you only have a minute on its I Instagram reel. And it seemed like for 40 seconds he was blathering on and on. It’s like play the damn, play the piece already. So there’s no throat clearing. We cut right to the chase. That’s a hallmark of the show. And if I can’t say it in five minutes, I can’t say it. But I think that’s, that’s seems to be an absolute truth about the show and how it works, why it exists. What’s the ethos of the show and what the show means to me, not just as the person who’s creating it, but who’s a fellow trader. What do you have to say about and where do you see repetition in your practice schedule and all of your mental aspects of your high performance career? Yeah, I mean, repetition’s big. It’s training. It’s part of what helps you show up for those competitions and when you need to be there and be present. And a lot of the repetition is really just to take away the mental strain of thinking about something and just doing it instead. And what I mean by that is a basketball player, they’re dribbling all day. They’re practicing layups, like they’re doing everything so that when they’re in the game, they don’t have to think about what’s my proper technique for a, how do I pass? And they don’t have to think about that. They just do it. And that, that’s the whole purpose of repetition, especially if you do it at a different angle too, because it’s like, it’s hammering the same point from five different ways. And really, if it’s an important point, it’s worth that. As far as repetition and what I do, the aim technique stuff is big. Doing a warmup routine is huge. I do a shorter warmup routine than I’d say a good amount of the people that I know. These guys like doing 45 minute, an hour long warmup routine before they play a game, which I will do for a competition, but I will not do just to be playing matchmaking. That is just ridiculous to me. Yeah, these guys aren’t that good. You, you’re just doing it to play casually and stay fresh kind of thing. But I’ll do a 15, 20 minute warmup routine. And that’s basically it. I, I’ll look at footage of me and I’ll say, okay, well I clearly I’m having issues flicking to the left. And sometimes that’s just a muscular thing. Sometimes it’s like, oh, maybe my mouse pad’s messed up. I got to look at that. Get a new one. I need a new mouse pad. I mean, that’s why my trading sucks is because there you go. That is not working well. The mousepads not working. Glad. I’m glad I could tell you because if the surface texture is inconsistent, sometimes moving to the left or to the right definitely affects what you’re doing. Well those are the things I’m thinking about. It’s like, is the surface texture my mouse pad equal? All of these things that generate consistency. I’m constantly analyzing then looking, whoa, footage. What about your hot keys? Dude, I don’t have any hot keys. Something The thing that day traders have that I don’t have. See I don’t need ’em. Yeah. Cause I’m not looking to ex offset my trade by the end of the day. No reason I’d have to act that fast in the marketplace. But to each, their own Hot keys are illegal in what I do. So it’s a good lesson to carry over. No more hot keys you don’t need, if you’re doing hot keys, you’re probably prepared the wrong way. But so do all this stuff all the time. We work on mobility training and a lot of it gets repetitive. We work on training for movement in the game because it’s not just about your mechanics and where you’re aiming and what you’re shooting, it’s also about your ability to move in a certain way. There are different swinging techniques for how we clear angles and stuff. It’s all really complicated. But basically I practice all this stuff and it gets pretty repetitive sometimes. But that’s what we have coaches for and that’s what the coaches, it’s kind of their job to say, Hey, here’s a different way we could do that while we’re still hammering down the same point. And that’s what I do as a coach. We had an example recently where I was coaching a team for a tournament and there were some issues with the team as with every team. And we were having issues with a couple of players and their confidence and their ability to coordinate with each other. Coordination’s huge. Not every character in the game has the same utility. So it’s really important to say, Hey, if you have a flash, if you can blind people temporarily, let’s coordinate that and have somebody else swing off of it as fast as possible. So you get the most value out of that flash. And we are having issues coordinating and stuff. And so every practice for two weeks, I was saying, guys, you need to coordinate your utility more. You need to do this, you need to do that. Talk to each other. I feel like you guys are just playing your own game solo. And the in-game leader, she totally agreed with me. She was like, yeah, I feel like I’m having to micromanage everyone. I can’t do that and whatever. And anyways, before the tournament there was this big problem. Everyone was mad at me. They’re like, Hey, you’re just saying the same thing over and over again. How is that helping us? And I’m like, okay, why don’t we just actually try it mid tournament, see what happens, try coordinating with each other. And the I G L was backing me up. That’s the in-game leader. She was like, no, he’s a hundred percent we got to do this. We got to do that. During the tournament. They worked on coordinating plays. They did incredibly well. They had more success than they had had basically for that entire season. Wow. Yeah. And it’s like repetition’s big and sometimes it gets taken the wrong way or sometimes it’s frustrating. I totally understand. But as with anything, that’s why it’s different to hammer it from a bunch of different perspectives. So it becomes second nature. If you’re not learning from the repetition, then you’re basically drilling. So how did that alter the team’s behavior when they started to come to that realization? What were the insights? What did you got without, you don’t mention any names and you can paraphrase. Cause I know there’s a viciously competitive industry, so whatever you’re comfortable saying. Yeah, I mean it really changed the team’s perspective because it’s like that’s how team play is supposed to work. You’re supposed to rely on each other for that stuff. That’s why you have specific character compositions. There are 20 characters in the game, but you can only pick five because there are five people on a team and they all have different abilities. So you’re trying to figure out how can we get value out of each other’s utility with specific compositions of these characters. And so we picked brilliant compositions for these maps and for these teams to get the most value out of it because there are different compositions for every map because some maps have things where certain characters work better than others. And so there’s a lot of forethought that goes into this. And so we had all this amazing utility, but we weren’t using it. And that was causing issues like, oh, they’re just running into site and they’re taking the bomb site. They’re planting the bomb, literally 10 seconds into the round. How’s this happening? That shouldn’t be a thing. We have the utility to stop it. So once we started coordinating these plays together, we really stopped a lot of these rounds that should never have been lost in the first place. And what that ended up doing was compounding in a way that I know the players didn’t understand, but it affects their confidence heavily as somebody who’s able to understand the psychology of each player and who I’m, I’m constantly paying attention to that it affects the confidence of each player. And so these players that we had with issues, with their confidence, they started getting more excited, getting more ready to play, do riskier plays and getting themselves out there, taking space and denying map control, denying visibility and all this stuff is really important for how you play a really solid game. It’s having a perfect opening on chess that’s going to be great for helping you in the mid-game. So let me ask you about this then, because I think there’s an analogy for the trading part too. Are there people who want to be in-game leader but just are not built for it and have issues like being relegated to another role on the team? Right. Because with the team, to me it’s like you have five people and it’s like, how do you get the right of all, you have to choose only 25% of the roles. So there’s some randomness there. Then you have to find the people who are best suited for the roles, even if they are, they want to play, their ego wants them to be the in-game leader versus any of the other roles. So do you find that you run up against egos or personality conflicts because people are got their heels dug in that they want to play a certain type of a role even though they’re not best suited for that particular role? Oh definitely. I mean I, I’d say probably the biggest one is for the in-game leading. It’s funny how you even mentioned that I’m smart And I have a good friend who’s a professional gamer. I mean, people like being listened to is I guess kind of the bottom line. So if you’re saying you’re in game leading and you’re directing everybody, it’s a really satisfying feeling to have four other people listen to everything you’re say and do exactly what you want. But some of these guys, they’re just not meant for it. And I, I’ve trialed for a couple of teams where the in-game leader was the reason I had chose not to join the team. And it’s like all the other players were really solid. There were some great teams that I wish I could have been a part of that just had an in-game leader that was lacking. And as somebody who has in-game leading experience, I tried stepping in and doing what’s called mid round calling, which is basically the in-game leader, the original guy. He sets up a plan at the start of the round and then I can help co-lead with him during the middle of the round because it’s hard to keep track of all these different things that are going on in the map. It’s a big map. Lots of people, there’s a lot of things that can happen and sometimes there are openings that you need to capitalize on that the in-game leader may not be aware of. So I tried cold-calling for this guy and basically got shut down immediately. He’s like, no, no, you don’t do that. That’s not for you buddy. This calling stuff, that’s all me. And I’m like, okay, fair enough. But then the owner of the team was like, no, no, no, you need to let him call because he had great calls. He was saying some great stuff that you guys needed to work and you know, needed the rotation. I know where this is going. And so they ended up dropping him and they were like, why don’t you lead? And I’m like, I don’t want to be a full in game leader. That’s too much for me to do. And I feel like I should rely on my mechanics a little bit more. But anyways, yeah, no, it happens all the time. It’s not the first experience that I’ve had with that. People really let their egos take control over what they think they’re good at. And it’s a big problem in this industry because ego is kind of basically what makes the whole thing. Yeah, I mean this is, I think there was a question about, cause we talked about what happens when fear kicks in. Someone asks, Hey, could you do something around ego? And this is a good example of where there’s somebody who is emotionally invested in the outcome of a certain type of a trade or a certain type of a role or the outcome of a certain type of a trade, and then they find themselves in a bad spot where they can’t make any money because they’re not listening, they’re not listening inward, they’re not looking at the results and trying to grow. They don’t realize I did, you know, got to remember when I started trading, I went, I was wrong on everything. I thought that going to Wall Street, I could trade everything, meaning every asset class, every timeframe, and that my accuracy rate would be 70% or better. And I was completely wrong on everything. Now if I stayed with that mindset, I could have burnt myself out, lost all my money, become bitter and resentful, and then be a worse and blame the system. But when you think about it, it’s easy to say now 35 years later, but who’s at fault there? And who would be at fault if I kept grinding? We talked about grinding last week, didn’t we? And that doesn’t really serve anybody. So you can sit there and grind and grind and grind, but at the end of the day it’s like, man, I’m trying to find the article on the ego. But anyway, this is where ego kind of comes in because someone sees that there’s status probably on the igl, right? Oh yeah. There’s a lot of status too because it’s like these guys who are great in-game leaders, it really is playing high level chess at the very top level. And so if you’re able to play high level chess and have good mechanics, people get the nickname like Galaxy Brains because their brains are as big as a galaxy. Some of the great in-game leaders of this generation, they’re known for being big brains and super intelligent and all this stuff. So a lot of people, I think are seeking out the in-game leading role when they really have no place in it. And it’s not because they’re not intelligent, it’s just because their ability to micromanage is not that good. Their ability to adjust on the fly might not be that good. They could go in with a beautifully thought out plan, but when it comes to adjusting in the mid round, they can’t do it. And then they have too big of an ego that they don’t want anyone else to do it. And then what ends up happening is they never actually, because they have this emotional need for the ego, which KU knows where it’s coming from, insecure. Whenever I see a lot of ego in trading, I see insecurity and forcing everyone to follow their lead. You don’t serve the community when you’re in your ego, which is what the in-game leader’s supposed to do is kind of be selfless, help everybody else be really, really good at their role, which kind of means being selfless probably on some level, even though you’re helping with the team win. Definitely. And so in ego, no one hits their potential. And I remember talking to somebody, I forget it might have been Peter Boorish, and it said, there’s no hi. There’s no telling how high you can go if you don’t care who takes credit for the win. You know what I mean? Yeah. So when I think about winning and trading, I just think, yes, I put in the work, I put in the time I have to cite myself for a good chunk of it, but I also stood and I’m still standing on the shoulders of the giants basically. So I feel this is where self-knowledge, just in trading self-knowledge really is of paramount importance. If you don’t know who you are, it doesn’t matter what you know. And so it’s interesting to see somebody who can play at your level, which is very rare, say out loud for everyone. It’s a public statement now that there were reasons why I didn’t join a certain team. It’s the I G L was a suck ass. Yeah. And you must have thought that you don’t want to do the role, but you realize the importance of somebody being in that role. And it probably would’ve hurt your own performance, held you back, stunted your growth, but more importantly stunted the growth of the team. Definitely. Yeah. The reason I don’t I G L is because I, I’m not, I’m capable of doing it at a high level, but it’s so mentally taxing for me that it’s like I have to give up somewhere else. I have to give up on my mechanics or I have to it. I’m sure I’d get better at it with time, but it’s not something I want to work on right now. Cause I feel like the majority of my value comes in the mechanics. I, I’m a very mechanically gifted player, and so I recognize the importance of an I G L because I’ve had to do it before. But like you said, I realize that it’s not where I should be and I still have to be able to appreciate the I G L and they have a tough job. But it’s also because I’ve done it, I can recognize a really good one and a really bad one. And again, it doesn’t even mean I’ve ever been fantastic at it. It just means I know when a call is a bad call or I’m capable of weighing out all the things that are going on in the map, which gives me another added bonus as a player, I can help you mid round, but if you are not willing to let me do that, then it’s like, I don’t know, that’s a tough thing. And when somebody’s not willing to improve, it’s tough. Not something I want to be a part of. I don’t care if the team that I play on is not the most talented or anything, as long as everybody’s really willing and capable of improving and they have a learning mindset. So being that your name is ganja, you know, might consider vaping. Yeah. Because we know that when you cloud your brain like that, that’s how you can perform at an optimal level. Yeah, man, I mean, this gets me thinking on so many things about knowing yourself. This is so important because these decisions that you make actually steer you in the right direction. You need to know what you can do, but also what you can’t do. I knew, again, going back to my own self, I was trying to do too much, which is a hero trade on a macro level, trading interbank, foreign exchange, trying to trade derivatives, trying to trade equities, trying to trade commodity futures. And then just coming to the realization, I’m spreading myself too thin. I need to focus. And I think about, I talked about this in another episode where I said, don’t worry about your weaknesses for focus on enhancing your growth or where you have skill and enhance that and get it to a point where it’s owner, you have complete ownership and it all comes to you. Second nature. That was really, I mean, I was probably lucky, but it was also a terribly insightful, good kind of break that I built for myself only from having studied my own behavior. And that was a monumental, that really set me free, which was really scary at the time because I didn’t know I was going to have any success. But I knew that what I was doing was not sustainable and I was not moving the ball down the field. I’d run, I’d make nine yards almost at a first down, and then I’d get sacked and I’d be back to the original line of scrimmage. And so I’d make some money and then I’d lose something. And I’m like, this is, I’m shoveling sand against the tide only to have it come washing back up on the shore. And so we talked about Kobe Bryant, we talked about Michael Jordan and practicing and going to the gym and making those shots. It’s like, and you talked about practice in the eSports, when you dribble, dribble, dribble and you practice your threes and this and that, it becomes second nature because you’ve done it so much. That also means you’re not likely to choke because you’ve been there that in your brain a million times. So that when you get the ball beyond the three and that shot counts, it’s not a question of execution. You’ve, because you’ve done it before in your brain a 10,000 times, there’s that shot that there’s, there’s a funny joke, Steve Kerr, who’s now a coach, talks about, there was 25 seconds left on the clock and they knew everyone suspected Jordan’s going to take the shot. So they all kind of converged on him after they inbounded the ball. And then Ke got free at the three point line. Michael passed the ball, joke about it on the internet, about Jordan not feeling comfortable in the big moments. You kind of had to be there, but it was quite something. Then I also think about something that we know here or kind of heard about in LA called Hacka Shack. Of course we’re talking about Shaquille. He was famously bad from hitting for hitting free throws. And to me that’s only because he probably never practiced it. There’s no way someone could have done a thousand shots a day and not improve what I’m saying. And my guess is he just didn’t, he was going to get fed the ball down low and he was going to muscle the guy because he’s like, whatever, seven feet, 3, 280 pounds, bump the guy out of way. They won’t call offensive fouls and he’s just going to stuff the ball and jam it every time. So somebody really smart, who knew the expected value of a foul said, Hey, this guy’s only shooting 70% from the free throw line. If we foul him underneath and he gets two shots, what’s the probability of him hitting two shots? Well, it’s 70 times 70 or 0.49. So someone came up with this really smart strategy that if we found Shaq got the ball down low, foul him quickly, because the probability of him getting two points is less than half the time. Whereas if he did dunk it, we know that if we gave him space, he’s going to jam it down and make that almost a hundred percent of the time. So the expected value of the foul was actually very, very valuable from that standpoint. And my whole thought process on it, because I’m a math guy, was like, well man, if he just went in and practiced his free throws, he could impro improve that to 80, 85% or whatever. And then another whole strategy. So again, we talk about the quality of work and the quantity of work. Kobe would shoot man hundreds of shots every day, every day, hundreds of shots. And God rest his soul. And Michael, the same thing. They would just practice, practice, practice and drill and drill and drill and drill. And so that everything that they tried to execute in the game, it very, very rarely was something that they were inventing on the spot. It looked like they were inventing it on the spot because we didn’t, hadn’t seen it before. But when you put that much practice in, your confidence goes up. And not to belabor the point, you give an average person a lot of confidence and there’s really no stopping or telling how high they can go. So remember, it’s not pr. Practice makes perfect. It’s perfect Practice makes perfect. Very true. Yeah, no, I think those are some really good points. Do you have anything else you wanted to add? I’m not wearing any pants. No, just kidding. I don’t know. Me neither. I don’t know what to say. That was really just it. I want to thank the folks who make comments everywhere. If I’m not really active on Twitter, to be frank, I use it as a syndicator for the show. I know there are a lot of people on it. I’m just mostly on listen only mode because there’s just so much junk out there and so much of it is polarizing and political that it doesn’t really serve me. I don’t need those mental wins, even when I see something so stupid and narrow minded. So I just kind of stick now with where you can make comments and have the chat, which is largely at YouTube. So thank you very much St. FX and Dutch Trader for making these comments on the show. And I appreciate your feedback. If either of you or any of you want to see Ganja and myself speak about something, shoot it in and we’ll take a look. And if it’s not something that we’ve already kind of answered, cause we’ve done quite a few, there’s like a thousand episodes. Oh, by the way, we’ve only been doing the show here since February 6th, but there’s several years of audio only content that you can find on the Michael Martin show as it’s called over on Spotify, Stitcher, apple Podcast, Google Podcast. We’re also on Audible, so if you have a Hey Alexa, that kind of thing. So we do have many, many years of audio only that we haven’t brought over here, because again, it’s audio only, it’s not the video version of the podcast that we’ve been doing again since February. So if you want to hear some of the older stuff, you can go subscribe to the show there and get the whole host of stuff. There’s still a very, very active community in the audio, only because they’re probably listening to it when they drive, right? It’s kind of hard to drive and have your phone and watch the video, or maybe even at the gym, you know, put your headset on and you’re listening because they’re bite sized. These are five or 10 minutes, so you can binge listen if you will. And every few minutes you’ll get a new topic just to give you, I forgot to mention that before. But yeah, thanks everybody for the feedback. I appreciate we get really good data when you subscribe. I can also see when your subscriber leaves a comment because Google, YouTube has that little thingy that they put on and say, this person subscribed. So if you’re listening to show all the time, please subscribe so we can get that data and then continue to put up content that we know resonates with you. Yeah, most definitely. And when you guys subscribe, it tells us which videos you guys want to see more of all the metrics, like the likes and the comments and stuff, that also gives us a good indication as well. And yeah, thank you guys so much for watching today’s episode. And again, make sure you guys subscribe. All comments, help the algorithm, click the notification spell, so get notified. Notified every time Mike uploads a video. And we will see you guys in the next one. Thanks folks. See you next Wednesday or see you tomorrow. G will be here next.
Welcome back folks. Happy Tuesday. So I had a good question that came in from, I think it was Roman. I’m going to read it here, and it is a comment under the video where Gaja puts up M M S E P, which would be Michael Martin Show, episode 12, the biggest misconception about trading. I think we got to work on that title for our Wednesday shows, but who knows? Good video. Again, maybe you could talk about setting goals again. What qualifies as a good goal in trading, if not a financial one, how you managed to find set goals for yourself when you started out, and how they might have changed over time. Thanks in advance. So there’s a couple questions in here. So I always knew that I needed a process. I was obviously in a very different financial situation when I started and I didn’t know anything. I was also, I didn’t know anything really about the business in many ways. I knew I had great instincts as a trader, and those instincts served me well. What I needed to do was to find the process. So although I know I needed to have more wins or no more net income from the wins i e more credits, quantity of credits than losses, right? Net income, I didn’t know what that was going to look like. At first. I thought it was an accuracy game then since I was a kind of bit of a math, whereas I understood expected values and Bay Theorem. So I was like, oh, that makes much better sense. That takes the pressure off me of not needing to be right. And then you can use Kelly criteria to figure out all the stuff that you need to do to hit your goals. It’s a little bit too much to do without being able to diagram it and illustrate it. That’s the way I say diagram and sign lang. Michael Martin. Sign language could also mean when there’s a crazy driver on the streets of la. So my goals weren’t necessarily about making the money because I knew if I made money on a trader, I’d be like, well, great, but how the hell did I get here? So I didn’t want to feel that feeling. So I knew I had to focus on the process. That’s just probably dumb ass luck. I knew that I had to focus on the process. I also knew how to manipulate data. My nose was always modeling stuff. I looked at, I’d look at the box scores of baseball games and look and see if Ron Gire went deep into a game, what was the likelihood of the Yankees winning? So in the Probabil base, the right, what’s the probability of gire went seven innings, or if Gire had X amount of strikeouts, what was the outcome of the game win or lose? So I’d look at things like that. Now, these days you can go to different gambling sites and bet on the outcome of everything that I wasn’t betting, but I wanted to understand the math. I also looked at humidity levels and temperatures of New York City in the month of August to see if it had any predictive value in having a longer summer. That would go into the September, october. I don’t think I could draw any conclusions, but I used to look at the data like that to see if there was stuff. It’s like a crossword puzzle because the data’s right under your nose. Everyone could see the data. So I would get that data and put it together in spreadsheets and just try to come up with macros to see if it would show me anything. Just as a test to myself. I didn’t actually care if the summer went long. I actually liked the fall in New York much better than almost any other deal. So it wasn’t like I had an interest in the outcome. I didn’t care. I just wanted to see if there was any way to look at the data. So the goal for me was to find, and I didn’t say it as articulately then, but I needed to know a process. What’s my trading model? What is it that I’m going to do every day? I was quick to get into it almost impulsively, but then I was also impulsive in cutting and being decisive like a trader, a good trader should be. I cut away into bank foreign exchange. I let go of options. I even put equity trading on the side because I had to focus on where I had skill, which at the beginning you don’t even really know, but you do have some evidence you got to haunt, you have to go with it. So that’s what I would focus on today if I could talk to my younger self, is to focus on the process more on the outcome. Because too many people get emotionally invested in the outcome of something and they don’t really have the process down. Then they get all mad or angry or frustrated or despondent. Doesn’t matter what the feeling is. But intentions equal results. So I would in other to understand that, go back in your life and see where you’re winging it or maybe you’re acting impulsively or maybe you have unrealistic expectations where you think you’re putting in a lot of work. Remember, because thinking is actually procrastination. Maybe you’re actually procrastinating by thinking too much, doing not enough work on the modeling, putting trades on, getting angry at the results and then bitching and belly aching to everybody. That’s a fucked up emotional model. But you see it all the time. People, they buy into the marketing hype of various things. I also didn’t look at the pros that I had access to and resent them or nor did I admire them because I had a very sober way of looking at the fact that they had experience and they developed a model with which they were compatible and they were able to execute that over and over and over again because I knew there wasn’t any good stock picking gurus. There was never about hot tips. They didn’t exist. Hot tips exist in the mind of the unsophisticated, and I would never let anyone rent my brain that way. My brain is too good. So I would think, okay, well what did they have to do to get where they were? How did they think about the markets? Were they in the right place at the right time? The folks who made their first investments in technology in the mid nineties and for five years think that they were like hot shots. In reality, when the tide goes up, all the boats go to again, no, no, no dig on them, but you know, need to know what your model is. If you’d started trading from 68 to 70 like Victor did, it was a bear market. So if you didn’t know how to short sell, it was a hard place to try to make money on the long side. You could interpret that you’re an idiot if you’re looking at the results of buying long in a bear market, might be something that we have to think about now, given the environment that we’re in now, I did need the money. That was the point, that was the end goal. But I didn’t say like, oh, I need to make money right now. What I need to do is I need to find a process that works for me. What’s my, how do I ideate, right? My trades, is it from reading the newspaper? Is it because financial TV didn’t really exist at the time? It was kind of just starting, but it was still at a very nation stage. It wasn’t what you see today. So it was, and I don’t find it for me as a human being, I don’t find it particularly useful. I don’t care to see Paul Tu Jones interviewed about stuff, interesting guy, but it doesn’t help me trade better, good human being. F Robin Hood’s given away over 2 billion. But that’s not, again, any information that I could use to help me be a better trader. It can help me certainly have a role as a role model for Humana, humanitarian stuff. And I have a lot of nonprofits that I’m involved with in one that’s very important to me. I’ll talk about another time. It involves kids who live in the favelas in parts of Rio de Janeiro that we sponsor and train and bring to America that just competed in the world championship. They do very well, but they train eight hours a day. So you get what you get out of it, what you put in. And so my goals actually didn’t change over time. That was the second part of it or the third part of it. There’s a few moving parts to Roman’s question because the goal is always to try to stick to your process. The amount of net worth changes and the market environment changes. But the thing that you should focus on all the time is your process, because the markets are going to change, right? They’re going to morph because they respond to the economy, not just the American economy, but they’ll change to global economy. Interest rates have a lot to do with how stocks perform. Interest rates also affect the US dollar. Higher interest rates tend to support in a bullish way, the dollar not all the time because there’s lots of factors. So what happens if the dollar goes up compared to what happens with foreign investment, for example. So you need to know all these things and be mindful because what worked in 21 didn’t necessarily work in 22. See, and that’s particularly harder for the shorter term traders because the shorter term models can get out of whack a lot sooner than the longer term models. If I’m testing things over 10 or 20 years, those models don’t just all of a sudden not work. But if I’m trading one minute bars, it literally might not work next week. And so that’s the choice that you make deliberately to fulfill your financial and emotional needs if you’re doing it that way. And I’m sure if you ask or if even I asked my friends who are in the shorter term space, they’ve had to evolve and they have to evolve quickly because like I said, the markets are going to change in what works in the shorter term space one period of time. They can change very, very quickly. But I think one of the benefits of longer term holding periods, I suspect is probably the best way to call it. I have found in back testing models, again, not predictive, but what I have found is that if you ran data on 60 different commodities or a thousand certain capitalized stocks and you modeled that they don’t work up to a certain point and then they don’t work anymore, they do ebb and flow, and you can certainly isolate periods of time within that back test and see that there were certain losing periods that if you had isolated then by themselves, you’d be like, well, this system doesn’t make money. But when you back it out and you look over a longer period of time. So I could give you an example. You might run a trading strategy that worked for the last 20 years, going back to 2003, but in 2017 it lost money. So if you look at some of the shorter term simulators where they only let you test one idea, you might come to the wrong conclusion, right? Because you’re only looking at a smaller data set now a year, I guess to some people, if you’re looking at one minute bars, a year’s worth of data could be a lot of data points. But if you’re running something that’s a little bit more robust, that’s going to work across more than just say, the Russell two K, the emen and the nqs, and you’re more promiscuous in that. You have metals, you have the grains, you have the softs, you might have interest rates, you might have currency, you might have large cap growth up to 500, whatever the number might be, and how you segregate capitalization. You might have a model that just looks at in index components and you want to be objective and look at that data. So I also looked at longer term data, which saved me a lot of the duress of having to figure out and what I would say, reinvent myself every day. That to me was exhausting. I didn’t want to have to come in every day and think, what am I going to do? I wanted to know exactly what I was going to do, although the instrument might change. A lot of people come to the market again, especially the short term folks who look at, and this is probably some ad trading advice too. If you’re struggling and you’re trying to day trade or look at short term timeframes on just the indices, those indices are strongly correlated. Admittedly, you can look at spreads between NASDAQ and s and p for sure and see some differences, especially in this environment. But this is a unique, unique in circumstance. Most of the time, those markets are highly correlated, and if one goes up, they kind of all go up. So if you don’t see something in the emen, I think I’ll debate you on it, but you might be forcing trades, right was the point. And I didn’t want to come in and have to force myself into trades because I had a financial goal. I wanted to have a process goal where I knew what the process was going to be every day. It might be a different vehicle to help me get there. So that was something that I was lucky to strike upon early, and then that’s carried forward over the years. So that really doesn’t change. I think when you have a financial goal, your goals will tend to change more frequently, but if your goal is to have a process that’s going to pay you handsomely over periods of time, then I think you’ll have to do less work. And it’s more about editing the model and making smaller adjustments than having to come up with a whole other model, right? Again, maybe I was lucky to fall into it that way. Again, I was physically trained, so I kind of understood how the hedging business works, where most commodity traders are straight out just speculators. So I did maybe have a bit of an edge, and then I later kind of came to understanding, speaking about edge, that if you don’t have an edge and there isn’t a vehicle for you to express that edge, giving your trading style on any particular day, then you got to take the day off, go take a blanket and a radio in the newspaper and a cup of coffee and do the crossword puzzle in the great lawn, or go walk through a museum or go do something else, as opposed to trying to reinvent something right on the fly, especially if you’re newer, because you don’t have the right instincts, instincts to kind of do that, and you could be looking to fulfill an emotional need for that particular day more than a financial one. It’s okay to miss a day. It’s okay to take a day off. But anyway, there’s all different shapes and sizes you might feel differently. As always, I appreciate the feedback. Any rebuttals or comments or disagreements, it’s all good because it helps Move the conversation forward and everything has to be in context. It’s hard to do that in such a short window of time here. But please consider liking and subscribing. Send all your comments over. I see them. I’ll be here tomorrow with Ganja and look forward to seeing you then. Take care.
Hey everybody, it’s Michael Martin. Happy Wednesday. I mean, Wednesday is Monday. What am I talking about? See how disorienting trading could be even for pros. I have a great topic today. It came in from Limitless on the video. How can you benefit from trading with detachment? And the question or the comment would be, I’d love to hear your thoughts about addiction versus passion. It feels like a fine line between the two, suppose. So before I get there though, I want to give a couple of shout outs because I see all the comments. I do all my own homework here and I want to thank a few folks. Second entry long. Thank you very much again for commenting. Derek, if you can’t get the audio book, chances are you had already subscribed and when you try to fill in the form, the system already sees you as a subscriber. So you’d have to email me through the website. Okay, Jo G. Thank you, Mike Shaea. W worth watching more than Once. Words to Live by. Thank you very much, Roman. Always appreciate you Bruno. Thank you Mohammed. Matt stole, really appreciate you Michael Walstad, it’s a bunch of folks who have written in. I appreciate you taking the time. It’s probably a lot of other choices that you have during the day to consume content that you might feel valuable. So I appreciate you being here. I get good feedback. This is the kind of stuff I’m talking about when I do content. It helps me understand who the audience is because in many ways it’s a one way conversation. By inviting your comments, we can kind of have a bit of an ongoing dialogue For those of you who care about this type of content, which in my humble opinion I could be wrong, this is all about trading. People can sit and diagram charts all they want, but after a while it just gets to be too much, right? And I remember my uncle, Steve Martin, the comedian when he did Wild, wild and Crazy guy, he said when he went to college, he studied philosophy and he said, the problem in studying philosophy is you remember everybody else’s to f yours up for the rest of your life. And that’s kind of what happens when you’re sitting in watching people go over charts. Plus they oftentimes aren’t really good teachers, so they go over and they move things so quickly and they’re changing timeframes and you don’t know the context. So although it might work for them very, very, very well, it’s also very, very difficult to be a good teacher. I’ve been teaching for over 30 years and it’s a skill unto itself. But I teach Jiujitsu. I used to teach the series seven way back when I started on Wall Street almost as soon as I was done with my own two year apprenticeship kind of because once you pass the test, you still have a lot of time before you’re actually considered a solid citizen in the business. So anyway, I want to get to the question though. Don’t want to blather on. But anyway, I appreciate you. Thank you for being here. Please like and subscribe and hit the alert belly thing that Gaja tells you about. He’ll be here Wednesday. So again, coming from Limitless is a comment on the video that we did. How can you be benefit from trading with detachment? You just want to kind of be in the zone. Trading is who you are. It’s what you do. It’s your nature managing risk. And the reason you do that is because you’re probably better at doing that than other people are, right? I’ve mentioned this analogy before where people say, oh, you’re a commodity guy. You’re a risk lover. You love the action. And that’s just not anywhere near being true. It never really was the same way. You can’t say that a fireman is an arsonist. They love fire. That’s not true either. They’re just really built and trained to deal with that type of risk and help it, help remove it for you. They’re not removing it for themselves. I’m sure in Maslow’s hierarchy, in serving the community. I know a lot of folks on the job from New York, A lot of my friends from my hometown became police officers with N Y P D was one of my best buddy. His father was a detective. And a lot of my friends, Kevin’s dad was a lieutenant with the fire department. Peter Man’s dad was a captain. He eventually became a captain. Lot of great lot of g, lot of great guys. Salt to the earth. So first of all, I want to say I’m not an addiction specialist. Someone like Dr. Drew Pinsky, who some of you might know, he’s pretty famous. He used to run a show, maybe he still does, called Loveline. So he talks about mostly love and sex addiction, but he also knows enough because I think he’s an md, which means a psychiatrist probably where he can speak to addiction much better than I can. However, what I can speak to is what I’ve witnessed and observed in my experience from offices and trading desks and this and that. And so when I think of addiction and I versus passion or a professional commitment to one’s craft, because in my humble opinion, you can be tradings SPS on one minute bars. You could be a soft commodity trader who wants to buy and hold futures like an investment. So you can capitalize on these monster moves as opposed to kind of getting it right and getting lucky, frankly, that a big move is going to happen intra day for you. So again, different shapes, different sizes. One’s not better than the other. You just have to find what’s best for you. Some of my good friends are very good, Steve and Mike at smb. I’ve known ’em for 20 years. We don’t do things the same way, but we don’t hate each other, right? They’re good guys. So when I think of a trade, so I’ll answer the question in this context. I’ve said before that I think there are two payoffs to any trade. There’s the financial payoff and then there’s the emotional payoff. Right now for professionals, the emotional payoff isn’t necessarily on a per trade basis in as much as it is a more of a macro emotional payoff that they can stick to their system over long periods of time regardless of what type of market environment you’re in. So I don’t sit here and click my heels when I make money, and I also don’t want to go drink myself with my single malt scotches or whatever. Very, very rarely drink only count on one hand the amount of times I usually get them as gifts. But so for the emotional benefit is in that when I go to bed at night and I say, okay, did I do what I intended to execute? Right? Because the behavior predicts where you end up, you win some, you lose some. So on any given day, to be frank, and I’ll say this to Victor and I’ve said it to his face, I don’t give a shit about any particular day and just don’t care about it. I’ve been around long enough to know I’m going to get liver kicks, but I’m going to get a boss Rutin liver, liver kick. I know boss Rutin very well. And so I don’t care about that. Also as a circuit breaker, I know that there’s not any one particular day that’s ever going to put me in a bus out a business. And I’ve been caught offer limit down in cattle when mad cow hit the tape. So I’ve survived, I’ve survived nine 11, I’ve survived everything. So that gives me solace in knowing that tomorrow’s another day, I know what I’m doing. I have phenomenal instincts, good systematic rules. I just got to follow those rules powerless over the outcome. The way I kind of intentionally work too is by doing this show a given back to the community because I didn’t have something like this when I needed it most. And so my promise to the universe was, I’m going to do a show like this or before, listen, this is before YouTube I, I said to myself, I’m going to try to find a way to give back to the community to help the people that might be like-minded with me, for example, and needed that type of help on the trader psychology, emotional intelligence, that angle of it, which to me is 80% of the game. So with those two different payoffs on the trade, you have the financial payoff and then you have the emotional payoff. The pros learn to kind of wain themselves off of the need for that emotional feedback. It’s true if you really nail a trade, it can feel good, but you also know that pride’s a big banana peel. And sooner or later, if that’s where you live, you’re going to be looking at the sky from your back. You see? And it’s not fun. It does feel good to know that when you follow your discipline, you do get the results and that reinforces you following the damn process in the first place. But you have to take the thick with the thin. You’re going to have drawdowns. Even the best traders have big drawdowns. I’ve mentioned Bill Dunn who’s now retired as a legend, I think if he’s been trading or he had traded by the time he retired since 19 71, 74. And again, no dig against him, purely systematic. I think he had three years in a row down 15%. And the guy’s unequivocally a legend. He was also chairman of the recent foundation and this and that. I have a video, if you look on the channel, a 30 minute interview with Bill Dunn, one of my favorite guys, no nonsense kind of guy. So the addiction part to finally get to it is where I think the emotional payoff is more important than the financial payoff in my way of looking at things. There’s probably many ways to do it. And so the potential for financial gainer loss is really just the vehicle to get to the feeling of the emotional win and that emotional or that need for that emotional win or the emotional lo loss. Because there’s ways to kind of win by being a victim. You get a lot of attention and this and that. It gets super deep. But that’s why I say you got to study your psychology. So to me, an addict needs to be in the market to feel the emotional feelings that they want to feel regardless of whether they win or lose. You see, they want the action. That’s why people go to Vegas and play games of negative expected value because it’s entertainment. It’s called economic utility in specific economist language. When you do something for pleasure, it’s typically falls into that category of economic utility. I get pleasure from it. So I don’t care about winning. I’m going to throw dice, I’m going to pull the slot machines. Again, game of negative expected value. So there’s other games. So then you want to try to focus. If you do gamble, obviously you want to focus on games of where you have, you can exhibit some skill probably like Texas hold them or some type of form of poker where there’s not a gigantic rake or of course blackjack. But that would be the way I would understand things like if you felt like you needed to feel the emotional win more than what was actually happening with the money, then I would say that it could be exhibiting addictive behavior. Again, I’m not, there’s plenty of places where you can go if you feel you have gambling addiction, which is probably the category it falls under. Obviously it’s not a sex addiction, so it’s probably a gambling addiction and it’s very easy to set up. You could bet on anything. Right now I look, I scroll through cause I practice jiujitsu. So when I scroll through my Instagram, my personal one, I’ll probably set up a business one for some reels. Maybe I’ll take some of the clips that I do with ganja and isolate those as just me and feed ’em through YouTube shorts or Instagram reels. I don’t know, just to test. There might be an audience there. If not, I’ll just kill it. You just don’t know until you test. I’ve seen it. I’ve seen people bet big. I know guys, guys that who had been hired by one of the guys’ partners actually hired me because they were whipping around weekly options and throwing size around and they couldn’t stop themselves. I couldn’t stop them either because again, it’s a strong emotional pull to want to be in that space. I’m not judging anybody either. I’m just saying that it can be too easy to get sucked into. I found that there were people who were super smart and they went on tilt because they needed the emotional feedback, right? Because they didn’t see the financial one and they equated their intelligence with making money. And when that didn’t manifest, at least with the frequency or the size that they wanted, the emotional size became overwhelming. The meaning, the emotional payoff for that particular trade, or a string of trades within a certain window. And that P makes people go nuts. And even if they’re not addicts, they can go on tilt, which to me is like a short term addiction infatuation, if you will. And obviously it’s not healthy. But again, I’m not a doctor or a professional psychologist. I’m just a guy who studies his own behavior and witnesses that of other like-minded folks. So I wish everybody the best. But I think that’s when you want to take some time out and reflect upon your behavior, what is it that you’re trying to do with your money on the consulting side of the practice, that’s always job number one to try to really get down to the nitty gritty. Because in many ways it’s not always about the money, it’s about what lifestyle it can afford you or things that you want to achieve in your personal life or maybe with your family and your kids if you’re married. So that’s pretty much the way I would look at it. If you wanted to understand, as this might relate to you, the addiction could be that you just want the emotional payoff, but where can you get that emotional payoff in another area of life where you don’t have to put hundreds or tens of thousands of dollars at risk? Are there other places in your life where you can get that emotional reward that won’t be so costly, which might be hard to delink, right? Because it might mean something to you to print a big number, have a big month, have a big trade, but for why? So you can tell other people because that would speak to ego or some kind of inferiority complex or some type of insecurity just from the outside looking in. Most people don’t really care what you do for a living. Doesn’t matter to them. Why? Because most people are self-centered, right? They’re just concerned, can I pay my own bills and not become a burden to society? So that’s what I would look at is if you’re doing things for the emotional payoff more than the financial one in the short run, it could be you kind of going towards going on tilt. But if you find yourself doing this all the time and you’ve had to reload many, many accounts, you might want that emotional victory that comes with the big win. And so you risking too much. I could tell you an easy fix obviously is cut your position sizing, but that’s not going to help you meet the emotional win. Cause if you’re running an account and you’re looking for, you don’t want to try to double your account in a day or more than double your account in a day or make 50% in a month investigate. Why do you want that? Cause it’s not about the money you see. That’s why I feel like this work that we’re doing here collectively as a team, as our own little group here, is really, really important. Because the more you can understand your behavior, the better way you can find what trading strategy is good for you. As I’ve said before, if you don’t know who you are, it doesn’t matter what you know about trading because you will constantly find yourself in a spot where your subconscious is really driving you to meet your emotional needs. And that’s a deep statement. That’s a heavy thing to have to live with. So when you don’t know who you are, you really don’t know at least consciously why you’re doing things sub subconsciously. Your subconscious knows exactly why it’s doing it. And that’s why when we do the work on the consulting side, when I have the time for the hedge fund folks, they’re usually fairly balanced, but it’s to really get to the bottom of their behavior. Where has this shown up in the past? So you look for patterns because I believe we all run emotion, we have emotional systems that we’re running. And a lot of it can be explained when you look for how do you seek pleasure and how do you avoid pain? And then for those of you who like pain, how does that serve you? Right? Because there’s masochism and all that kind of masochistic behavior. Anyway, folks, please like and subscribe. Send me all your feedback. Helps me think about myself. Remember experiences in my own life. Lucky for me, I never really went on tilt because I had a strong understanding as I mentioned last week, that my behavior was going to predict where I was going to end up and it was in the doing right. That’s why I was a little impulsive cause I just wanted to start, right? And that helped me get into the game and start learning and start making my mistakes quicker. I want it to fail fast and fail forward. So that was the upside. Anyway, thanks very much for being here folks. I’ll see you tomorrow.