I hope you’re having a good Friday or you did have a good Friday depending on when you listened to this. So now, if you’ve listened to this week’s episodes, especially, I’d say from Wednesday through today, you can kind of better understand what I mean when I say “what is your, why?” Why are you doing what you do? If we’re all pleasure seekers and avoid pain as well. You can look at your emotional model and see the combination of all the feelings that you need to feel along the way of your process in order to get what you want, you see? So it’s very complicated to kind of do without images or having another person on the show to bounce ideas off and this and that.
But it’s very, very interesting to look at this because if everything that you do is supposed to give you pleasure, how are you winning by not making money? There’s got to be another payoff. And so when you’d study this type of stuff, you can dig very, very deeply and see where it is for you. What is the inflection point? It might not be the entire chain of emotions. There might be one that you really look at, the other ones are kind of necessary, because they help you get to the one that you want.
Remember at the end, if you’re losing money, people can find joy in being a victim, even if they lose a hundred bucks, they can go create a pity party, which is really the goal. So it gets pretty deep. So not only do you have to have a strong understanding of your emotions, you have to be brutally honest with yourself because there’s nothing wrong with kind of coming to the conclusion that this isn’t for you.
And even if you’re working at a family office or a hedge fund what is the purpose? Because at those places you can go brag about your own proprietary research and how you put on trades and then parade around the office, or you can sit with quiet confidence? There’s a million different combinations here. But the key is when you look at the moving parts and I only put down some of the moving parts, you can really kind of discover who you are. And so when you say, what is your goal? What’s the purpose? What do you want your money to do for you? It’s to serve you emotionally. And so when you break down each part of it, and again, I only put a handful down, you can look and see what that combination is. Then if you’re smart, not if you’re smart, but if you want to kind of get more insight, maybe you can put or rank them on a scale of one to 10,
There is an emotional feedback here is the emotion that I’m feeling. But on a scale of 1 to 10, it’s a 2 then on the risk entry point, it’s this emotion, and I feel it on as an 8 with 10 being the highest. So this way you can really kind of see, not only what are the ingredients, the emotional ingredients of your trading model, you can see what amounts of each: go in like a whole egg, a cup of flour, half a cup of milk, so you can see if you add it all up. What are the different denominations of the feelings that you need? And then also the order. Now you want to go get a PhD in this stuff, go look at the rest of your life and the things that are important to you, I would make a pinky bet with you that this model might actually be, or show up in other parts of your life.
And so it’s not good or bad. It is what it is, but it gets to help you uncover and figure out who you are in this big game of things, because trading will push all your buttons and over time you just want to make sure that those are the buttons that you in fact want to get pushed. Because if not, you might find that trading amplifies what I’ve heard called your worst character defect. And that’s when things become a drag. That’s when things become a chore, when you’re really just trying to get one of the feelings in the chain of events, and then you could find another way to get that feeling in your life and not even have to worry about trading. Do that time and again, and you’re running a racket with yourself.
So it’s pretty heavy stuff. Obviously it takes a while to get to the bottom of this. That’s why we spend so much time doing it. It would be very easy to just teach you the slope of a trend line, and how to do mean reversion trade, and how to trade commodity spreads, and build a mechanical system for trading rules. That’s the easy part, but how does it, how does it fit in with you?
It’s like buying your favorite pair of sneakers, but getting it four sizes too big or two sizes too small.
You want to have it just right. So anyway, keep the emails coming in. I appreciate you all listening and everything. Please consider subscribing to the show because the data really helps me. And if you’d also like a free copy of the audio book version of The Inner Voice of Trading, you can get that at MartinKronicle for free. We are on Spotify, Apple Podcasts, Stitcher, all the places where you can get podcasts or you can just come to the site and play with the embedded podcast player.
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