Everybody happy Monday. Michael Martin, here it is a holiday week in America. So I think I’m going to end up having a short week, which means we’ll probably have episodes today, tomorrow, and Wednesday. And then we’ll pick it up the following Monday. It is Thanksgiving holiday on Thursday and it’s a big deal here. It’s kind of the beginning of holiday season.
So anyway, I have a few things though. I’m going to do some follow up this week just to kind of answer or re-answer some questions with some more data, if you will. But first I want to give a shout out to my friend Alice in the UK. Thank you for all the wonderful things that you’ve said about me in the show. It means a lot to me, more than you’ll know and keep listening. I hope to meet you one day.
Anyway, the question came in about reading books and this and that, and I’m definitely looking forward to some books that are coming out. But at the end of the day, for the newer trader, when you are learning your craft, you should be doing the trading. Even paper trading is better than not doing something. The key, again with paper trading is that you’re not really losing real money. So your emotions are not necessarily getting amplified the way they would when you have real risk going. And I have found, or I certainly have evidence from some people, that when you are in Discords and when you’re reading books, you’re doing things to avoid the feeling of the actual trading.
Now, that might not be true for everyone, I admit, but more times than not, when I’m speaking with folks who are just kind of starting out and they’re like, well, I got this book and when I’m done with this book, I have these three other books, and I’m like, wait a second, you ought take it easy with the books?
Read one book, take two or three ideas out of it or however many you have, and then put those ideas to work, backtest them, trade them, because there is no magic set up. There’s one or so that might really resonate with you, and that’s my experience. Most people aren’t trading seven different setups. They have one or two indicators that they look at, if any. I don’t use any myself, but other people do. I tend to think that the price kind of tells you everything that you need to know, and the indicators typically kind of confirm what you can already see in the price.
Some people need reassurances, not just in trading, but in life. And I think the best way to build one’s confidence is to actually do the trading, realizing that people typically have loss aversion and they’re risk averse and blah, blah, blah. So with all that, you have to realize that your initial grub stake in trading is really just points in the game. You can’t really take risk without losing some money and not take it personal. So I would put myself in the emotional standpoint or in the place that I could lose all this money and I’m still going to be okay. because if you try to avoid trading, you really rob yourself of the education because you only get the education, the real education as far as I’m concerned, from managing real risk. That’s where it all kind of happens. And I thought about that for a long time because I thought, well, maybe people shouldn’t trade until they know what they’re doing. But it’s a Catch-22 because you really don’t know what you’re doing until you go and you’re try and you do it right.
It’s like anything in life that comes from experience or that’s experiential. You can talk about sex all you want, but until you’ve gotten naked in bed with somebody, it’s a whole different ball of wax despite how much you’ve seen in television shows or how much erotica you might read. So same with trading. You have to get into the game, start managing some risk even with a small position size so that you can see and feel how you’re going to react to losing real money. Then you’ll find out also how do you feel about making money? Are you going to be one of these hair trigger guys who take your profits too soon? Or are you going to let the thing run and let the market do the work for you?
So if you find yourself in the spot where you’re looking for a new video channel, a new discord, a new book, a new course, you might really just be doing something to avoid the feeling of losing the money in the first place, which is really what’s holding you back, not the lack of information. Anyway, thanks for being here folks. Please consider subscribing. And if you haven’t already gotten a copy of the audiobook version of my book, The Inner Voice of Trading, you can get that at MartinKronicle at the top right corner.
Click here to get your free copy of The Inner Voice of Trading audiobook.