I wanted to follow up on a social media message that I got to clarify something. The comment was “I really enjoyed the podcast just wish you didn’t hate on day trader so much :)” And the reality is I don’t hate day traders. I’m friendly with many, many successful ones, but the part of the iceberg that you can’t see is obviously under the water. And I virtually get zero emails from people who are longer term people who hold overnight, people who hold over the weekend – position traders, trend followers, and investors. But I get a lot of emails from folks who are, or who want to be day traders and swing traders and who blow up. And so my words are words of caution to say, don’t buy into the hype. You can’t work 10 minutes a day and pull down this, that, or the other thing.
It’s just not the way that it works. And then another friend said to me, well I, I made $30 grand today and I’m like, awesome. But if you had held the trade overnight or over the weekend, you would’ve made $110k. So this is the problem of thinking in terms of dollar sizes, dollar signs and not percentages. He’s like you can’t celebrate the trade when you left $80k on the table and I’ll say that to the day that I die. $30k you can’t say $30k is a lot of money, because it’s relative. If you’re broke and you’re making $50k a year, you make $30k of course going to be, have a big impact on you. But it makes no sense to me to be in a winning trade and to offset the winner and then leave the majority of the gains on the table that just doesn’t make good business sense whatsoever.
And that’s an emotional problem. You’re already in the winning trade. So my argument is and I’ve got the data on the firms too. So one day when I lose my cool, which is probably never going to happen, I’m going to publish the information that I have and the sources on what a jail break it is. When you think about day trading and the prop trading firms, because I know all the information here before I haven’t said anything because I’m just not a guy who talks shit or throws shade at people. But when it comes to trading, for those of you who are starting, my suggestion is to get to know yourself first, too, whatever amount of money you have saved, spend it on education. And don’t worry about using it as a grub stake to trade. If you’re cheap and you’re tight and you’re afraid to lose the money and that’s all you’re thinking about, guess what’s going to happen? That’s right. You’re going to depart with the cash or you’re going to start bad habits. So I think my advice has been very sensible, um, based on what I think it’s going to
Take for you to succeed, because once you have the longer term stuff down, which I already know works, then you can downtime to see if that resonates with you on some level. But that’s after the fact. That’s after you’ve already achieved some success in other longer timeframes and you could always cut it down this way. You have something to fall back on. What happens is people misunderstand all the emotional things we spoke about a Wednesday or two ago on how, how trading works. So if you have a burning desire to do this and you’re going to do it no matter what, because you can’t stop yourself I’m pretty powerless over that. I might be more powerless than you are. The idea though, is that give yourself a timeframe and say, if I’m going to try this, here’s how much I’m willing to risk as a percentage of my overall capital to pay in terms of tuition and or here’s the amount of time that I’m willing to spend.
So, and I’m saying like maybe three months, six months, something like that, you can’t do this for five years, grinding you’re missing so much of your life. And I know over that period of time, if you had longer holds, you would do better. The problem is people get in their will. But like I said, I would say it’s, if I was in a court of law and on the witness stand, I could look everybody in the eye and say about a hundred percent of the emails that I get are from folks who are trying to make it trading intra day stuff. They trade too big. They trade too frequently and they make all the mistakes which are coincidentally built into those models. It makes no sense to me to encourage somebody to get up to $25k or whatever it is.
So they could initiate day trading buying power when they don’t show any profitability, just trading cash on cash. So that’s the part that I have the problem with. It’s not necessarily the people. What I do do is try to caution them and say, yes, when you look at the entire universe of traders, there’s a handful who can trade the short term stuff. And it’s not a big number. Right. But that’s not, what’s you know, marketed to you. So all you see are the survivors. You don’t see the guys who blow up. You don’t see the guys who are like, “yeah, I took $500k down to $65,000. And you know, I did that in six months. It was like, I had natural ability. I just, I didn’t even have to try. I was my expertise in tax flows, carried forwards. And I last about 10 seconds in bed.”
Guys don’t talk that way because it’s emasculating which I can identify with because I’m a guy. So all my advice is really to be first and foremost, I guess I have to be consistent. And so my advice is if you have to trade, knowing that people coming out of the womb are not built for trading at all. It’s a happy accident that you have all the, the skills and the tools that you need. Most importantly, the personality and the temperament to do it. You ought, skew the odds in your favor to achieve what you want to achieve. And then once you get some success, then you can move around and start trying other asset classes or trying shorter timeframes. because I feel like no one’s ever coming out.
There’s no one else on that I can think of that comes out and says, don’t do this. And I just find that the world has no integrity. If that’s the case, because that’s the spot where there’s the greatest amount of failure yet they sell the stuff like lotto tickets just can’t do it. It’s not in my constitution. So anyway, I hope that clarifies my position on stuff. It’s not the people, it’s the marketers. And then it’s also the, the data that I have please consider subscribing to the show.
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