Welcome back party people. So one thing that I want to talk about is some things that you hear coming out of people’s mouths. You wonder if they put any thought into what they say at all. Like these truisms conventional wisdom, you’re only as strong as your weak, weakest link. And you should always be working on your weaknesses. I think that’s a crock of shit. What are you going to work on your weaknesses for so that you can be the complete trader? What the hell does that even mean? What is a complete trader? Well, I’m in complete, so I only know my entries. I don’t know exits. I don’t know. Position sizes. I’m incomplete. I hear that expression. I don’t even know what to make of it. And I’m pretty well-read guy, and I know a lot of really good, some of the best traders who ever traded.
I don’t know what a complete trader is. What’s a complete trader I think, yeah. So what I would do, and I did do this, I haven’t articulated it this way, but I want to do that now. When I stopped four x I stopped option options. And then I stopped equities because I really wanted to get good at one thing that I showed promise in. Cause I kind of showed promise, or I don’t know promise a good word, ability. I learned I had ability in stocks and even more so in commodity futures. And I knew that if I was going to be a success, I wanted to have at least one skill that I knew I could count on. And so when I whittled everything down, the foreign interbank Forex just took up too much time. And it was like having a newborn. It was just constant attention.
So I was like, I got to put that aside for now. Can always come back to it. Cause it’s not going anywhere. It’s the biggest market in planet Earth, right? Trillion dollars a day options are kind of cool, but so many moving parts between the Greeks and the volatilities. To me, I thought of it like the trifecta. I have to get the name right, I got to get the direction and it all has to happen before expiration. I was like, that’s putting a lot of pressure on me. I don’t have any experience. So let me put that on the side. Super cool stuff. But just a lot have to be hypervigilant. Hypervigilant about with no experience and no one, again, I didn’t have anybody to teach me right now. Maybe if I knew Sean McLaughlin, a good friend of mine and he was up on that stuff, then maybe, right? If we both went back in time, 35 years, he’s probably not even 35 years old. The thing is it’s like great guy loving to death. I didn’t have a buddy like that who was really up on that, for example, who I could lean on. World’s very different. Now again, I told you a lot of the things that I had to cut my teeth on it, it doesn’t matter to you now. Cause the world’s a fantastically different place.
So I had to focus on one thing. And I think inadvertently what I was doing there was again, focusing on a strength. I had ability and
Aptitude in commodity futures. I just got it. I understood it. Still had to go through a lot of growing pains for one position sizing. How do you figure that out? Cause you don’t really need any of it. What’s the appropriate amount of risk? And then conjugating the volatility of the instrument with how much of your own account that you’re willing to risk. Don’t forget all the Nqs and the ess, they didn’t exist. You largely had physical commodities. You had futures on currencies, which is different from interbank and pips. And then treasuries. Richard Sandor, who invented all that’s a good friend of mine. So the scope and the instru, the number of instruments were smaller. There wasn’t a very wide array of things now and certainly the environment in training, oh my God, I can tell you stories about how those markets worked. It was, it wasn’t wild west. But when you think about how much more mature the markets are today than they were back then, even though the Chicago Board of Trade was opened in what? 18 50, 18 52, something like that. So the market was already a hundred years old, but there’s still so much evolution that’s kind of gone parabolic since even going back to say the early nineties to the mid nineties during the beginning of the.com and internet boom.
But if I were you and I wanted to enhance my learning curve, forget about this complete trader nonsense. Find one thing that you’re good at and then amplify that. Because if you can have one skill where you know how to manage risk, and that’s your alpha, right? That’s your trading edge, you’re all set, right? Yeah, I know Paul Tooter Jones and the old timers that I know and I work with can trade a lot of different things. But Paul Jones got 40 years of experience. When you get to that level, you’ll probably be able to do it too. So yes, options and futures and stocks, yes, you can definitely develop a feel, but at the beginning you have to put points on the board.
Maybe you have a lot of time if you have a trust account. And it doesn’t really matter if you make money trading or not. I wasn’t in that spot. So what I would definitely do is whittle away and start to find where do you have skill? What type of asset class is it? What share price are you good at, right? What’s your best holding period? Because it’s a fallacy to think that one holding period is more profitable than others. That’s all very subjective. That’s like saying my, well, my team is the Atlanta Braves and they’re the best team ever. The Braves are actually playing very, very well. And I like ’em. A big fan of their former manager, Bobby Cox, who’s shortstop with the Yankees in the day back, played with Mickey Mannel and their team is really, really good. And those
Pitches they had in the nineties, who was it? Glavin and Maddox and Mtz was a starter then before he went to the bullpen. And you also, let’s not forget, Avery was a beast. Amazing team, amazing team. I’m from New York, so I was always met. And Yankees, my first game was at Shay. Saw Tom Siever, just like any baseball player, they have one thing that they do very, very well, right? Sometimes they’re good for on base percentage, some guys are sluggers. It takes all shapes and sizes. There’s this place in this world for you, but you have to carve it out of stone. But the same thing with no experience. You have to find a way to make it work and whittle away the things that aren’t important or that are not going to be there for you to create alpha. You see? So that requires some type of discipline, probably a little maturity.
You have to be decisive and say, look, those when I let go of foreign exchange and the far into bank stuff, I actually never went back. I actually never started trading interbank foreign exchange again. Why? Peace of mind. And if you look at what I largely made my bones trading and still kind of trade today, like the softs. If someone said to me, Mike, you’re prob, you trade so much sugar. If someone could call you a sugar trader. And I’d say that’s not terribly inaccurate if you look at it that way. But if you look at the sugar market, it suits my personality in many ways. Tick size is not terribly different than a quarter whatever, a quarter tick in the emen, right? So there’s similarities. It’s $11 20 cents versus 12, what? 50 in the Es. But market closes at 10 o’clock my time. And there’s no aftermarket stuff where it constantly trades and it’s reflecting earnings and this and that.
And I like that. I like to have peace of mind. I don’t want to be trading 24 7. I want to have enough energy to come back tomorrow and do it at a very, very high level. You can find the level that’s perfect for you and it will be perfect for you. It might be very different from the way I do it, but we’re all subject of our environment. And the people that inspired me and that mentored me. They didn’t teach me to trade, but I learned a lot from them. They traded the softs. Many of them, what we would consider, they’re not food, but some people mistakenly call them food or agriculture. They’re not agriculture in that strict sense. They’re segregated in a good way. And they’re called softs. Coffee sugar. Cocoa cotton, I suppose. And in some places, orange juice. I can’t say it being been a big juice trader. But the key here is forget what your weaknesses are. You want to eliminate them. Don’t go back and try to do that. If you’re playing speed metal shredding, why would you go back and listen to Andre Segovia playing classical less? Of course, you just want to develop your ears and listen to a lot of stuff. I’ve played guitar since I’m seven and I played a high level, but guess what? I’m not listening to shred metal.
I know who the guitars were in the eighties and nineties that were pretty popular, but the majority of the time during the day, I don’t have that on is just too much energy. So I have B Bob Jazz, mostly John Coltrane, Charlie Parker, Cannonball, Laley, miles, Davis. There’s not too many days that I don’t have kind of blue on. I don’t want lyrics or libretto, even though I’ve seen every major Broadway show and musical theater just because it’s people talking and I want to focus. Same reason why I don’t have TV on. So you get to know yourself and you again, eliminate, eliminate and focus on the thing that you do well. Therein is your edge, or at least the starting point for developing your edge. So I think I was kind of so stupid. I didn’t even notice that as I was coming up.
I just said, I don’t have any skill here. I have to be honest with myself and I want to succeed. So I let go of this stuff where I didn’t have any, if I was in a court of law, people would say, well, show us what you did with the deutschemark. And I’d be like, I’m plus 5% minus 5%. And for all the time that I’m putting in, it’s just not worth it. So I got to move on and find something else. So when I listed, created a barometer of where I was putting my attention, because there’s only so much time.
Where did I have skill? And then I emphasized in trying to improve my skill and also understand where it come from. Because if I couldn’t understand it and describe it to myself, how the heck am I going to describe it to the people who I wanted to give me money to run as a cta, right? So I’m kind of stupid smart in that regard is that it just seemed like the right thing to do was to eliminate. So when I see and hear people saying, focus on improving your weaknesses, I’m like, no. They’re like losses. You put your stop in. Here’s the amount of time I’m willing to put in. If I don’t show any skill, it’s gone. It’s trades, I’m gone. I’m going to focus on something else and try a different timeframe or a different asset class. So I show some skill there and then focus on developing there in that so that I could be even better.
And I’m not competing with anyone else. I don’t like these trading competitions. They don’t bring the best out of me. I’m in competition with myself because I know what I’m capable of doing. And you should be too. If you want to compete, I get it, but it seems to be like a young guy, macho kind of thing. I would just focus on what you can do and how do you want to change your life? How do you want your money to serve you? Right? Forget about your weaknesses, eliminate those. Don’t focus on those. Why would you do that? Focus on where you show some skill and you’re going to get results faster. Please like and subscribe. Maybe share this with a friend and click the belly thing. Apparently that’ll alert you when a new video’s posted. I don’t know. We’re here every day. I’ll see you. I got [inaudible] tomorrow and I’ll see you tomorrow. Thanks for being here.
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