Everybody happy Friday. Thanks for being here. I kind of got behind on some of these emails and these comments when I get back. For one, I don’t plan on having plants or anything on the wall. I’ve made too much money in this chair, and I like baseball players. I eat chicken on game day, so none of that’s going to change. I appreciate your comments. If you don’t like the background of the walls, there’s plenty other great YouTube videos for you to watch. You don’t have to watch this one. Chris Bram, I appreciate your comments too. You’re looking at the number of listens. Yeah, I mean, I’m not doing it for that. I don’t believe in likes and van, what we call vanity metrics. When the student is ready, the teacher is there right under the nose. This is the second largest search engine on planet Earth.
So for those who are interested, I’m sure they’ll find me one way or another. Again, the reason I started doing this was to kind of give back when, because I promised myself if I had any bit of success, I would give back to the community in ways that I wasn’t afforded because we didn’t have that type of environment. There were books and there were people, and the people were really greedy with their information. They didn’t want share anything. And so I kind of do it stealing an idea from Napoleon Hill thinking grow rich. If I put any abundance out into the universe, I know it’s going to come back. It may not come back from anybody who’s watching this, but I got karma out the wazoo. My Karma Bank is overflowing, right? And there’s no fault and there’s no fear of default mat. I think I’m saying your name right.
I appreciate you writing in a couple times here. This was a quote under your inner world versus your outside world. The second one, there was two parts to it, and the quote is, after a while, there is no excitement with he’s, I guess he’s mat, I dunno if it’s a man or a woman. They’re quoting me saying, after a while there is no excitement with making money and there’s no feeling of burn with losing money. He’s probably talking about paper trading. So what’s the point of still doing trading if it doesn’t evoke any feeling anymore? So you know, might want the emotional win more than the financial win. Most of the pro traders have an edge and they have a discipline and they have a process, and I don’t want to say they’re addicted, but their main goal is to follow their process. They’re powerless over the results of any one particular trade.
So they’re not emotionally invested. They don’t fall to pieces when they lose and they’re not clicking their heels as if they just cured or found a cure for the common cold when they win. Why? Well, because there’s the next trade and what’s the best you can do? Follow your process. There’s no emotion tied to that, right? I don’t fear the market. I don’t, I’m not afraid to win. I’m not afraid to lose. I don’t look forward to losing, so I can become a martyr and get attention from people. I don’t care about winning because I’m not going to go to the internet and gloat about my winners and get screen grabs and show size and all that kind of stuff. That doesn’t mean anything to me. So the point is to have a financial goal that’s going to change your life and follow a system or a set of rules that you’re compatible with that feel good for you that you can execute. Where you have a trading edge, there’s positive expected value, and if you do that thousands and thousands of times, you’ll end up with more money than when you started, right? You’ll have a tax bill too, presumably, but that to me would be a better way to understand that.
But people can trade for a million different reasons, and let me just see if I’m missing anything here. Yeah, I mean, Carlos, anything can go wrong. I want to go back to what I was talking about the other day, about maybe yesterday’s episode. You might be moving your stops and becoming despondent because you want that winner. Maybe because you want to show that winning trade to another person. It’s a long shot, but it could be there as well. Maybe you have a significant other or a spouse who’s certainly mindful of all the time that you’re putting in. This is something that you want to have a conversation about because if you’re in a relationship and you’re living together and there’s a lot of time being spent in and around the trading stuff,
You want to be super clear with your partner that this is going to take a lot of time and a lot of focus. But I would also, and so communicate that with them. Make sure that you’re having an open, clear line of communication because all good relationships have a component of strong, very honest communication. And two, if your partner’s saying you’re not spending enough time, you want to listen to your partner and find some middle ground, because I don’t know if you have a really great relationship that trading is worth putting all of that at risk. If you ask me, I’d say no, but everyone has their own tastes and preferences right? Now. Having said that, I would also encourage you to have balance. So when we do goal setting stuff on the consulting side, we have one personal goal and one business goal because if, first of all, if you have try to set eight goals, you don’t know where to start, which one you going to focus on. So what ends up happening is you really don’t get anything done in any of ’em. You end up being pretty good at knocking things out and getting to the first stage. I saw this written down, I want to read it.
Where did I write it down? Hang on,
Where did I write that down? See, I have too many notebooks. My goal is to consolidate my notebooks. So basically you don’t want to put yourself in a spot where you’re kind of getting really good at getting out of the gates on many, many things, but never really taken any of them home. So you put your blinders on, you have one personal goal. One of those personal goals could be investing in your relationship and having a good balance. I don’t know too many people in the trading world, I don’t really know any who did nothing, but think about the markets 24 7 to the point where they forgot or for had forsaken other things in their lives that were important to them. When you’re working hard and you’re not showing the results, you think putting more hours in can benefit you, right? Because you’re showing the universe that you’re committed and this and that.
But I can’t, don’t know that that’s true. I think you have to put in quality work, but that’s a derivative. It’s a D Y D X over time, and I don’t think 18 hour days is the way to go, even when you’re just trying to figure out and you’re just starting. You need to have some competence. But I look at it this way. Look at Jimmy Page, guitar player for Led Zeppelin. Guy wrote some amazing hooks. I would consider him a sloppy guitar player compared to many of the guitar players that I know. But he’s phenomenally musical, right? He’s written some of the most memorable lines ever to be written. But as far as comparing him to say Clapton in terms of technique, I’d say there’s a fairly big difference. I love both of them myself, and I know every Led Zeppelin song, acoustic or electric, so watch my behavior.
I’m not making any digs on Jimmy Page, and I can play in the different guitar tunings that he’s played in some of the opening on your stop, and that’s the way I can know some of those open tunings, they’re a little trickier, not in standard tuning, but you want to have balance, right? And so the way to do that is to make sure that’s part of your time blocking. Here’s when you’re going to put your work in, and here’s where you’re going to turn off, and you might have to put in 30 minutes of transition, meditation, yoga, going for a walk, doing something, getting out of the house, not spending any time with your significant other, nor the markets just to clear your brain. If you work at a remote office and have to go home, you’ve got more than enough time put on your favorite song.
Do what is, do whatever it is that you have to do to put yourself in a good state and then enjoy the benefits of being in a great relationship. So again, I remember the days where I was facing into the books reading because I didn’t have anything else to do, and I was looking for a God shot. I was looking for someone to tap me on the shoulder and say, you got to focus more on this and remove this, but they weren’t there. I had to do it all myself. And so it took a lot of time, and there were times in my life where I didn’t have that balance, and if I could go back, I would turn it around because ultimately, intentions equal results, and if it’s your intention to be successful at this, you’ll get there. I can’t you when, and you can’t tell yourself when either.
You only lose in my mind’s eye when you quit. You see, that’s my belief system. So do the best you can and keep in mind that to learn any type of process that’s new, this is something that you’ve never done before. There’s no parallel maybe in your life. There wasn’t one from me either. So you’re really carving something at a stone that never existed before. So give yourself a bit of a break. I know people, you should see some of the comments that I get via email because people are too, I don’t know what they’re feeling, may be embarrassed, ashamed, or frustrated. They don’t even want to put them attached to their name on a public channel, but people literally beat the living crap out of themselves over this stuff, and it’s, to me, it’s not worth it. You don’t want to do anything that’s going to affect your quality of life.
Even if you think that trying to learn trading is going to eventually give you a higher quality of life, I promise you, if that’s your mindset, you will find something else after your first X, Y, Z financial goal is hit to obsess about and to drive yourself crazy. You don’t want to be a martyr at the end of the day. You want to have a balance, because again, if you act intentionally in intentions, equal results, and if you can marry your behavior with your belief system, you’ll absolutely get where you want to be. Enjoy the process, because once you figure out your model, whatever that trading model is, right, whether you’re a discretionary chart reader, whether you’re, you’re full on systematic trader, you know this and that, you’ll get where you want to go. It’ll take some time. I would definitely enjoy the journey and enjoy the process.
I think more times than not, I did do that. But I do remember there were times where I was just so frustrated that I was putting in long hours, I was putting in times on the weekend, and I missed out on a lot of other things in life that I could have been out with my friends having fun, maybe traveling more. I didn’t really travel all that much for my first 15 years, which if I did it all over again, I probably would’ve changed. But at any rate, that’s my message. I appreciate y’all being here. Please like and subscribe and let me see.
Please like and subscribe and click the bell thing. I hope you have a great weekend. Take some time off. If you’re in a bit of a rut, take some time off. The markets aren’t going anywhere. Clear your head. It’s very, very hard to do anything very, very well when you’re frustrated or you want some kind of revenge trade, right? So go, there you go. Now I got it. You know, don’t want to be in that kind of mindset. It’s not really good for you. This isn’t personal. The market doesn’t know that you’re trading. It’s not trying to beat your head in. It is testing you to see how disciplined you can be. That’s for damn sure, but it’s not. You don’t want to, again, personify your p and l. There’s another episode on that. Anyway, I hope you had a good week and you have some fun plans for the weekend. If you’re in a grind, take some time off, put some space between you and the market. Come back Monday. If you need more time, come back the week after that. The markets will be here. They’re not going anywhere. These are not the easiest markets to trade, right? There’s a lot of overhang, so just be very, very patient and be practical with what you’re doing. Thanks for being here, folks. I’ll see you next week.

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Hey everybody. Happy Thursday. I hope you’re doing well. I want to read you a comment that was posted under a video. So I’m going to look at the screen here on the monitor and read it. It’s under the video performance coaching and sticking to your Game Plan. And it’s second entry long, I guess, is the name of the person who made this comment. So thanks again for commenting. I have read your book, the Inner Voice Trading and has become one of my favorite ones. Thank you so much. I have been trying to find my inner voice and keep my losses small, but I have a recurring problem while I do place protective stops. Every time I enter a trade, I find myself time and again moving the stops wherever it probably means. Whenever they are close to getting hit. Worse, I average losers and keep moving stops.
And this has caused me to blow accounts time after time. What are your thoughts on possible reasons? I do this. I am despondent and your videos are about the only thing that give me hope. I know I have to find it within me. There are no external solutions to my internal problems. Someone smart said that, but maybe you can provide some guidance so I can get started with self-discovery on this. So in the consulting side of my practice here, which is kind of a function of how much time I actually have to work with people, we start thinking about goals. What is it that you want your money to do for you? Because typically having a goal in trading, if people say, yeah, I want to make a million dollars, I get it. If you don’t have a million, it’s probably a big goal for you. I understand. Depends on your upbringing too. So it could be good, but typically it’s a very vapid and empty kind of goal to have because what the hell does that even mean? And why pick a million? Why not just pick 50 K because it’s 20 times below, right? It’s easier goal to hit. Yes, you have to get to 50 before you get to a million. So I’d set the goal for 50.
But I think in understand, in order to understand who you are, you have to understand what your money means to you. And in the beginning of your career, the money, if it’s your money, right, it’s really tuition. It’s not even your trading. Yes, you can call it your trading. And yes, it’s your money. You can zip it up and take it out and withdraw it and transfer it to a savings account. It’s your money for sure. But when you’re honing your craft, those are it’s points in the game. And yeah, I’ve been there, man, I’ve been in drawdowns cause I didn’t know what I was doing. And like I said, there was so many things where I’d make money in futures but then give it back in foreign exchange. Or I’d make it in stocks and futures and then I’d lose it in options because I had one loser and I bought a big debit balance, put her a call, and I let the thing go to expiration, which was stupid, but I didn’t know any better and it would wipe out the gains that I’d have in Deutsche marks or cotton.
And so you kind of have to carve your behavior and figure out how does it serve you to move your stops? What’s the emotion? What is the emotion that you’re unwilling to feel? Because those have as much power over you as the ones that you do want to feel. And so when you move your stop, I’m guessing it’s because you don’t want to feel the rejection or the humiliation or the frustration of having put in all this work. I don’t know what quality of work you’re putting in, but if you’re putting in a lot of work, you might feel that you’re owed some kind of due. I’m here to tell you that that’s a fallacy that doesn’t work. No one cares how hard you’re working. No one cares how hard I work either, by the way. The market is there to morph and to steal from you and to kill you and to take your money.
That’s why playing defense is job number one. I don’t care if you’re hell Ben for election balls to the wall speculator job number one, even for the commodities corporation guys job number, if they lost their money, they were out. They had to actually reapply to get more money if they blew out their allocation. And it wasn’t a fun process because I know the guys who, well, one since passed away Frank Fanon, but I know the three guys who were part of the management committee and if they blew out of their allocation and had to reapply, it was a very arduous process and it was humiliating. So no one has a free ride no matter how the trade or their trading style or their asset class. So how much of your money are you willing to lose in order to learn your craft? Because you can’t do it on paper, right?
There’s no burn. And I suspect when you want to move your protective stops, it’s because you’re unwilling to feel the feelings that go around losing money. But to me, you have to fall in love with that feeling because it’s going to be the most frequent feeling that you feel, right? Most people don’t have a high winning percent for small gains. They have a smaller winning percent, like 30 to 50% for bigger gains. We talk about the expected value of a trade. Now there are a handful of people who have a high accuracy rate and high numbers. The problem is with day trading, there’s not enough real unless you catch a move because some last week some name was upgraded, it was up 15 bucks. It’s just being in the right place at the right time. So most of the time though, you’re going to find yourself being in trades and if they get close to your stop, what I used to do, I don’t mean to jump all around here, but my mind’s going a million miles an hour.
Cause I’m trying to think back over 35 years in experience so I can be valuable to you. So let’s just say I bought a stock at 25 and for whatever reason my stop is at 24. And if it wasn’t making me money or it started to leak and my timing was off and it was 24 75, and then because again, this was in eighths, so 24 5 eights, five eights a half, right? Then three eights a half, I would sell it at three eights because I’m not going to let the thing come all the way down and stop me at 24 when I’m clearly my timing’s off because the better
Trades typically have a lot of slippage in skid and they start making money with you for you right away because you’re buying when there’s other buyers there. So if I put in an order to get it, a big 2000 shares at 25 on a stop and I get filled on all 25, on all 2000 shares at 25, my first reaction is uhoh because that’s not a good sign. I want to see at least half of the fills go into an eighth to a quarter because now I’m on the right side. There’s people who have enormous amount of size pushing the market, higher people are reluctant to sell. And there you have it. But I also used very, very early on, not at the very beginning, but very early on within my first two years, I also learned the importance of what we call time stops.
And that would be where I look at the same name by 2000 at X, Y, Z at 25 and over the next say that’s a Monday. If Wednesday ish Thursday I’m like 24, 7 5 25, 25 and a quarter and I’m not really seeing any movement. I unwind the trade, I don’t care about the price because something stalled or the momentum never showed up that I thought was going to be there. And after diversification, we all need some level of momentum, even if you’re not a momentum trader, you see? So part of this problem might be you don’t know who you are as a person yet when it comes to money in general, I don’t know what asset class and I don’t know what kind of timeframe you’re trading, but you might be looking at this as opposed to saying, okay, I have 10 trades and I’m going to lose six, seven times out of 10 and I’m going to take that failure very emotionally and I’m unwilling to, I want to change that ratio.
So I want to stay in the trade longer. So what do you do? You’re coming down again, you’re longer at 25, it’s 24 and 30 eights. I know I’m using old language, but this is what I was going in my head when I was younger and I would just basically say to myself, it’s not wrong. I’m going to preserve my cash because that’s job number one. Sometimes I’d even blow it out at 24 and a half because money was hard to come by. Plus, don’t forget, the spreads were an eighth to a quarter. So it was like the thing was going 24 bid, I was going to get stopped. So I figured if it was three eights to five eights the market, in other words 24 3 eights bid offered at five eights, I would sometimes call the market maker and say, I have 2000 shares to sell it a half. Can we do it? And he’d say, yeah. And I’d be like, okay, I took my 50 cent loss again, plus the commissions which were astronomic compared to what you’re paying today. So I learned the importance of playing superior defense. If you’re frustrated with the frequency with which you’re losing, then you have to trade smaller and get into some kind of a groove and do it with a small amount of capital because anyone can scale. Once you figure out what works and who you are and what works for you,
Then that’s easy to scale. But I wouldn’t be trading your optimal size at the beginning if you don’t know what your edge is. And again, if you don’t know what your edge is, then there’s no reason to trade at all. We only want to trade when there’s an edge. But Mike, I’m just starting. I don’t know what my edge is. All the more reasons to trade smaller risk 10 bucks. One of my buddies who runs a prop firm, I don’t know cause I haven’t spoken with ’em in a bit, probably owe my call. I think they only let their traders lose 10 bucks at the very beginning. And only, this is brilliant smart idea because it doesn’t say anything about the person. If you’re looking to print wins where there’s a comma, you’ll get there. But not if you blow up, unless again you make enough money where you can just roll the dice and bet half your account because you make 400 K a year, then it really doesn’t matter.
You don’t need to trade, right? That’s just like an ego win. So I would trade small and really evaluate your process, keep good records as to what kind of trades you’re putting on while you’re putting them on. And also understand what does money mean to you? Who taught you the rules around money, right? Because unless those people were Ray Dalio, you might not know anything about money. And that’s not a, if you come from a working class background and those folks will live and check to check to check, they might not have even had an investment account. Their biggest investment was probably their house. You see? So you inadvertently learn these rules around money and how to take chances. You could be super academic where you think of losing money as a failure because you live in an or you come from and have been reinforced.
Look, by the time you graduate high school for 12 years, you’ve been conditioned to think that being correct is good and being wrong is failure. So if you lose money on trades, you associate that with failure, which it’s not. That’s how the game works. So get clear on what your money means to you and what you want your money to do for you. And it’s typically not a dollar value. It’s usually associated with what you can do with that money. Does it give you liberty? Do you want to be a philanthropist and give it away? Do you want to convert it to a different asset class and create passive income that might have more favorable tax treatment than buying and selling securities on a listed exchange? I don’t have enough information here. Let me just go back.
Yeah, I don’t have enough information to know about the asset class or whatever. I appreciate all the compliments, but again, you’re despondent because you’re breaking your own rules when you probably know better, and I don’t mean to sound that way, but this is what you wrote. Don’t change your stop trade smaller and give it more room. Cause if you’re trading 2000 shares, risking a dollar right trade, that would be the same equivalent of trading a 10th of the size 200 chairs and giving it al that much more room. So do the math and figure it out. Give yourself more room to breathe, right? Or even and then cut it in half, right? Isn’t that what Bruce Kaner said in market Wizards, whatever you think your right position size is, cut it in half and then cut it in half. Again, this is probably the smartest thing written in any of those books, right?
Trade small at the beginning because until you can define your edge, there’s really no reason to trade If you’re panhandling for the gold because you’re just getting started, yes, it’s true. You have to be in the business. I’ll leave you with this. I don’t know enough about these funding accounts. They come across as terribly slippery. I’ll give you that much. And I don’t think it’s a Ponzi scheme. I did an episode on it. Chances are you’re getting, if the winners, they’re getting paid out on other people who are paying their monthly fees, right? Cause I don’t think there’s actually any trading going on. It’s all paper trading and somehow they’re netting out the books. Sometimes you have to wait, sometimes you need a bunch of green days in a row of a hundred bucks, five of them before you get paid from this one outfit.
I was going to say racket, but I’m not being condescending. I don’t know who many of these people are, but it might make sense for some of you. And again, I don’t have any financial stake, I don’t have any affiliate commissions. So truth is I just don’t even care if the funding companies exist or not, to be frank with you. But if you don’t have money and if it bothers you to lose your own money, it might make sense for you to investigate one of these funding accounts traded super small and super conservatively, right? Again, there’s a lot of rules that I don’t like about them. You make 9,000, you can’t have more than a $3,000 drawdown. Well, I would never make it even today, I would never pass with those rules because if I have nine K in gains, I might be willing to risk 4,500 of that to stay in a winning trade might not work for you. I get it. It’s different emotional constitution. So imagine I come out, I’m super lucky. I buy a bunch of nqs, I’m up 13 K and I want to ride my winners, but I draw it down to nine. Guess what? I got to reset because I lost 4K and I was only allowed three K in the program. That’s a bad rule.
I think that’s apex by the way, but I’m, I’m not a hundred percent sure. I think that’s a bad rule. If you’re making money and it’s especially, it’s on paper, but it might make sense for you to look at having a small monthly fee. Don’t go after the big three, 400, half a million dollar account sizes because it makes you feel bigger. Trade the smallest one possible and learn your craft. Pay the smallest amount of month that you possibly can because that’s like a call option or a put option. It was a call option, right? Because it’s a set monthly fee, it’s paper trading. You’re not really losing any of your money and you’re able to learn your craft. I do think
It’s not exactly the same though because you’re not feeling the burn of losing money. The benefit of what you’re going through right now of actually losing your own money and being despondent goes to the quote from Anaya N. And then the day came when the painter took to remain tighten up ball was greater than the painter took to flourish. Sooner or later, all this Deon is going to motivate you to stop making bad decisions and moving your stops. And I say that not to be sarcastic or snarky because I’ve been there. There’s no feeling that you’re going to have to feel or will feel or have felt that I haven’t felt for one reason or another. We might not have come. The orientation to those feelings might from our behavior might not be the same, but I know what it feels like to be despondent.
So the key is to lose less. How do you do that? Trade, smaller trade. Not frequently trade one of these funding accounts. Again, I don’t endorse any of ’em cause I don’t know, but at least you’re not really losing your money at that point. Then if you can determine that you have a small edge, go to the cash market where you’re using your own money and start there. But identify your edge. And if you don’t have an edge, just understand that you’re going to roll the dice and you’re going to crap out. It’s the way it works. No one’s immune from it. Okay? Anyway, please like and subscribe and click the little bell thingy so that you get notified. I appreciate you didn’t hear, keep all your comments coming because it’s really good. It kind of keeps this conversation going and I appreciate you all being here very much and I’ll see you tomorrow.

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Hey guys, welcome back to the weekly segment that Mike and I do where we go over topics, comments, and questions, and see if we have any feedback to add on. I wanted to start off by saying thank you guys so much for all the support. We really appreciate it. And if you haven’t already, make sure you guys like and subscribe all comments, help the algorithm and make sure you press the notifications bill so you don’t miss any time that Mike uploads a video and given the content that’s coming. You don’t want to do that. Don’t miss, don’t miss anything here. That’s right. Again, yeah, we really appreciate all the feedback that you guys are giving us and we have gotten a lot of insight as to how you guys feel about the content and we really appreciate that. Keep it coming. The more we get to do topics that you guys send in, the better it is for us because we get, it’s like a direct line, you know, get to communicate with us, with Mike, and it’s just beneficial for the whole ecosystem here.
So let’s keep those comments coming. Let’s keep those questions rolling in and make sure you guys check out the links in the description. And with that said, let’s get into today’s topic, which I wanted to bring up because I had a trip recently to Italy. I just got back from Italy, went to visit family, a little vacation, and I learned a really important lesson and it’s what a proper work-life balance really is. I had I’ve, I’ve always been the guy who just kind of bangs his head against the door to open the door instead of turning the knob kind of thing. I’ve always been a really hard worker and sometimes I get kind of blinded, a little tunnel vision from that. But on this trip I had a lot of really important downtime and lessons and it was a reset for me before I left, I felt like everything was really repetitive.
I was getting dragged down and in a not positive way in everything I did, I couldn’t be happy with the single thing that I did. And it really started to affect me mentally and how I was doing work. I felt like I wasn’t putting out good quality stuff. Felt like when I was doing the eSport stuff, I wasn’t doing as well. And I had this brilliant vacation. I had a great, great time. I got to see some amazing people. And as every day went on, it was two weeks I was gone. I felt so refreshed every day. I kept feeling better and better and better. I was drinking wine, I was hanging out in the Amalfi, had a couple gin and tonics next to the Italian Lakes. It was fantastic stuff. And as a wise friend of mine once said, sometimes you just got to go golfing in Puerto Rico. So I figured my Puerto Rico might be Italy. And I just wanted to see what you had to say about that.
Yeah, I think it says something on a whole bunch of things about planning for one, for everyone watching the show seemed seamless. Ganja was gone for two weeks, right? Because we planned ahead, we recorded a bunch of stuff, we got it uploaded, we did the episodes on Wednesdays, and I totally support if he went away for a month or two. I have no problem with that. Everybody needs to know themselves. This is a game of being completely autonomous and you have to be a governor of all your own actions. So when Gja said, I got to go take a break, I’m going to go do some traveling with the family member, I was a hundred percent supportive of it. I just said, what can I do and what can we do to prepare and we work well as a team like that. So that’s the front end.
The back end is how many times did I call or tweet or bug or bug you or ping you or whatever while you were away? Zero pretty much exactly right. When someone says they need space, leave them the fuck alone. That’s it. I trust him emphatically with everything. And if he said he needs space and he has to go away and he wants to go away, last thing he does is he wants to think about California and me. And we have a great relationship. People need their space. So if someone says, Hey, I need a break, give him the break, stay away. They’ll come back just like ganja did he come back? He’s refreshed, he’s happy, and he had a great trip. It’s good for you as a human being as it relates to trading.
I think there’s, the more time you spend in front of the screen, I think you would probably need more time away. I don’t spend a lot of time, cause I’m old school, I’m og. I still call in my Otis to the trading desk. So I have the luxury of not having to sit in front of the screen. So I don’t have that same sense of urgency to have to travel or get away because every day I’m kind of away. I’m not watching things. I, in fact was telling someone, a consulting client today who’s trading indices, which is a whole other thing. And I showed him some of my best years in terms of the returns. And we reviewed a few of the trades and I said this interesting thing, and I don’t talk about it a lot, I was getting my quotes. I cleared my business through Ed and F Man and I would literally go to man financial.com and get end of day data.
And through that whole year, catching the sugar move from nine to 19, I never had real time quotes. I didn’t have a C Q G, I didn’t have a Bloomberg. And they’re all really great tools. So I conditioned myself to give myself a great amount of distance because earlier on in my career after books and knowing people, you did want to spend a little time in front of the screen because there were only really those three avenues. And so you could very easily burn yourself out. And what I have found out and what Ganja was just talking about is that when you’re at that place where you’re grinding, grinding, ver is a bad investment on yourself, pay off. And two, don’t be a martyr because nobody cares, you see? So you have to have some balance in there where I like to do it every day because then it doesn’t accumulate.
If you grind and grind and grind, that stuff compounds just like anything else in life. You have compounding interest and you have the discounting process. And so I have just built, I said this when I was earlier in my career, I said, my pace of play is not sustainable. I’m going to burn out. And it happens to a lot of people. And when you’re burnt out and you’re grinding, you can find yourself pushing. And that means you can end up being in trades that you otherwise have no business being in because now you’re more focused on the emotional payoff of the trade, not so much the financial one. So I do think you need both balance in between your personal life, your business life, but you also need to keep the balance between the financial payoff and the emotional payoff. And if either of those get out of whack, they both could subvert your efforts as a trader. Is that the kind of answer you were looking for?
Yeah, no, totally. Just to add on to that a little bit, I felt like before I was grinding a lot because I’m trying to be the best eSports player in the world. That’s my end goal. And I always thought, oh, when I was a cyclist, what I was really good at was grinding and putting in the effort and doing more training than anyone else would do. And it paid off for races like a lot. But in this case, because this is a more, I would argue, cerebrally, taxing sport, there’s so much more thought that goes into it. It’s basically playing chess with physical mechanics involved. It’s a lot of work and it’s a lot on your brain. And I’m doing this every day and I’m doing it for four hours a day. I’m doing coaching on top of that and just trying to get a new insight into the sport.
But I realized when I got back a couple days before, actually my friend was like, Hey, do you want to play in a tournament? It’s Sunday, which was two days after I got back and I was like, yeah, it might be jet lagged, I might be. He’s like, yeah, it doesn’t matter. We need a sub. He’s like, so let’s just play in the tournament if you’re okay with it. I’m like, sure. So I was pretty nervous. So Saturday I did my practice routine and I noticed I was having fun with it. I was listening to music, I was enjoying myself. And then the next day comes, the tournament happens, and I match m d mvp. So I was the best person out of 10 people in this match, and they went on to go to playoffs. They didn’t need me as a sub anymore, but I got an offer for the team.
I just didn’t want to play on that team. And it had nothing to do with the players. It’s just not the atmosphere that I wanted, wasn’t the position I wanted. But yeah, it was funny. I always thought in order to stay at the top level, I have to be playing every day and doing all this. And I did maybe three training exercises while I was gone. I brought a laptop and my mouse, but nothing like what I was doing before. And it’s funny because I was still on top or pretty close to being on top, and that was a good feeling, that refreshment and then having that positive reinforcement like, Hey, you got to take a break sometimes, dude,
Well, I don’t want to mention any names because I know who they are, but the team that you were on, the head guy, his, let’s call him Thomas, he’s in Canada, he basically said, I can’t sustain what’s going on. I’ve got too much going on. I’m going to disintegrate the team. They pay you out your equity. And that was that. So you saw even in the high level of eSports on the team that you were on, people are having good boundaries where they’re like, Hey, what we’re doing, or at least for me, isn’t sustainable.
Yeah, for sure. And I also found out that there was a little bit of a different reasoning behind it, but oh, apparently that still held true. I guess he did feel like he was being overworked, but one of the players basically said, Hey, I’m looking at trialing for other teams right now. And that was kind of the rules the last, yeah, yeah. That was the last thing that made him decide, all right, this is a little too much for me and it’s a lot of work, so let’s just move on kind of thing. And it sucked. It was bad timing, but it’s like it doesn’t matter too much. I’m doing really well now. I’m coaching a team and I’m going to move on to playing for a team. I got a lot of credentials too, so things are looking up. I’m excited. Yeah,
You’re a free agent who’s not going to be a free agent for too long, as soon as the word, it’s difficult because there’s no centralized meeting place for this industry. So as the word gets out that you’re not affiliated, that you’re going to start to see and get smashed with pings of like, Hey, let’s talk, we could work together and you could play because you can play several roles.
Yeah, technically I could play all of them. The only thing I don’t really want to do is be an in-game leader. I think that while I can be really strong at it, and I can definitely put myself in that five steps ahead mentality, I really like to rely on my mechanics and what’s going on in that moment kind of thing. Because one is definitely going to suffer if you’re in game leading and you’re playing for four other people and telling them what to do, directing them, trying to read the whole map, and it gets complicated. And so then you’re not as focused. You’re not as aware when you have to basically use your mechanics. And so that’s why I really like to avoid that. I think my mechanics are something to show off. I’ve always been really flashy, but a very unique style of aim for sure.
And we’re talking about valant as an eSports team, competition tournament style eSports game. So I want to talk about this because I think a lot of people get confused. I mentioned this on the other parts of the show during the week where people can fool themselves into part of the grind would be the thinking aspect. They’re reading books, they’re checking out blogs, they’re looking at charts, they’re doing this and that, and they put in a lot of time. I do think people should measure how much time they’re putting in every day time. Block your day, allocate time. But then just like anything that where you would create a budget, you don’t want to run on a deficit. So time block the amount of time that you put in for practice or what you think is work, and then you have to turn off, you have to have balance.
People talk about yoga and meditation and I get it. I mean, not everyone can meditate. Some people can’t quiet their mind, they can’t sit still. Frankly, I think anyone can do it. You just have to force yourself to do it. You can do it for 15 seconds and build from there. And if 15 seconds is too long, do it for five seconds, right? Learn to quiet your mind. You can make anything. Meditation by the way, you could zone whatever you do to zone out, because to me, zoning out is a form of meditation. Put your headset on, listen to Miles Davis kind of blue. You’ll have 45 minutes of downtime. You’ll hear some of the best jazz that’s ever been recorded. Put on some symphonic music, put on white noise, just do whatever and let go and release and just zone out. Forget looking at the clock, don’t look at your phone.
Just close your eyes, quiet your mind. It’ll do some amazing things for you. People are afraid of doing that because they’re afraid of missing out, especially the short-term players. So I would think set a budget for yourself, because ultimately you can’t be on your A game all the time, even when the markets aren’t open. You have to put some time between yourself and the markets. And that’s a very healthy thing. In Market Wizards, there was a story about a particular trader who was going on a date and taken out his chart book. Again, this is long before remote wireless technology and this and that. And they’d bring out, there was a big c r t chart book that you would get and it was gigantic, and they’d bring it out and start looking at charts in the middle of trying to be on a date, a romantic date.
Obviously it’s a, takes a special kind of partner to want to have to tolerate that because how could you be doing work? Well, you’re supposed to be out with a potential partner. But the benefits to me are so powerful. It guarantees to me success when you can detach from the marketplace because your brain needs time to process things. And you could speak to that. What happens when you ask yourself a lot of open-ended questions and then you go to sleep, your brain’s working behind the scenes, even if it’s in your subconscious. So that’s really, really important stuff to do for your long-term success because trading is a marathon. It’s not a sprint, even though you think you need to put points on the board every day, you have to last and go the distance. The what’s compelling here, right? So how do you handle your downtime?
I mean, generally before I had set downtime where I could do stuff, but it wasn’t disconnected enough, if that makes sense. Yeah. I would have some time where it’s like, okay, you know, can hang out in your room downstairs, hang out with your dogs, go have some fun. I had friends and stuff, but I didn’t really enjoy going out and drinking and stuff. So I didn’t really do any of that. But what I used to do, which was really good, was go like 45 minutes an hour away from my house, whether it was at the beach or the forest or whatever. I’d go to the national park, I’d walk around there and I, I’d set time like, okay, you got to be back by four o’clock. And sometimes, obviously time doesn’t always, it’s not the most best thing to model off of sometimes, depending on if what you do is inconsistent. So what I would do is I’d be like, all right, what are the things I need to get done today after this or before this or whatever. And I just said it on a schedule. I’d be like, okay, I got a couple hours to go wander. Now I’m going to come back and now I have this stuff to get done. So it was definitely time blocking, but I realized that more recently in the last three months, it wasn’t disconnected enough from what was causing the stress and that stuff.
So that brings up a good point that’s kind of related, and that is when you set a budget, because first of all, what is work? What is work? For me? I did everything the day before because that was the environment that I grew up in. There was no other way to really prepare. The day of stocks traded in eighths, and there was no wireless technology. So a lot of the stuff, you know, had to be ready to be very fast on your feet. But the key was to be prepared for almost anything. And the only way that you could do that in that day and age, because of how information was disseminated, which was by facts on many occasions, you had to work through almost every potential scenario ahead of time and then have it written out, plan, what would you do if X, Y, Z happened?
So I got in the habit again, because we’re all function and we’re both, I don’t want to say victims, but we’re all products of our environment. And so the environment where I learned how to do things, it paid to be hyper prepared. And the only way that you could do that was the day before, there wasn’t enough time in the morning to be prepared for everything that could possibly go down, because again, there weren’t all these different channels for the dissemination of information. And if you waited till the morning, you were behind the eight ball. Nowadays it might be a little different because of how fast information can be disseminated. Information is a data point, but you have to be able to separate noise from signal. My humble opinion, especially if you’re a short-term trader, there’s a lot of noise. I wanted to do my preparation.
So my preparation oftentimes was from seven to nine o’clock. If I had a lot to do, I’d start at five and have a working dinner and get whatever I needed to get done between 7, 8, 9, sometimes 10 o’clock at night, depending. And so I’d have a game plan for every instrument because on any instrument, I could have four or five different scenarios. So I wanted to work out the game plan. The good news is that most of it could have been relegated to just knowing where I was going to place my protective stop, where was I going to add? Because I didn’t just put on a risk unit and take it off. It was always nibble, not at the very beginning, but very quickly I started to nibble. Cause when I was wrong, I was early, so that was frustrating and I was having bigger drawdowns than I wanted, so I cut my position size, blah, blah, blah. So then I did that. But then I would say, okay, well here’s where I’m going to get stopped. Here’s where I’ll take profits here. I’ll take small losses. And if I was in a winning trade, I’d say, okay, here’s my protective stop if it comes against me, but if it goes up, here’s where I’m going to add more.
And then you work through all these other things where if it goes against you, you’re like, well, maybe I should buy more. But then you realize that’s what we call the moron strategy. When it goes against you, you put moron. So we call it the moron strategy because it never works. You always just end up losing more money rather than if you were just willing to take the small loss when you should have. So I found my preparation was the key to my success, and I like to get that done the night before because then I could ask myself a lot of open-ended questions about how great the next day it could be, and why am I making so much money? Because the answer was my preparation was unbeatable. Now I want to talk about that because you hang out with professional athletes. Everybody knows about the work ethics of some of the greatest athletes, Wayne Gretzky and ice hockey.
Before him, it was Gela floor, who was the leading score of the Montreal Canadians, the most storied team in all of professional ice hockey. They’d have a game at the Montreal Forum, a place where I’ve been now they play at the Molson Center by, I was at the forum. I’ve seen him play there. And he’d be in his uniform skates laced up and tied tight, ready to go at three o’clock in the afternoon for a seven o’clock game, and he’d be the first one on the ice just hitting buckets of pucks working on his hand-eye coordination and his execution. Kobe Bryant used to go to the gym at four in the morning and work out from four to six, have a light breakfast, go back and work out more, take a bit of a break, go into the hot tub, go into the steam room.
Then he’d go to practice and meet everybody else at 10 o’clock. Now, he’s already gotten four hours of quality jump shots and foul shots before his own teammates, Michael Jordan, same type of a thing. These people had God-given talent. But what did they also do? They outworked everybody, but they set budgets and they put their downtime in their calendar in a moment that was good for them. So I think what ends up happening and that you want to think about this, cause people are like, Hey, it’s, I’m willing to do anything that’s the bad. That’s a bad approach. You can’t say you’d be willing to do anything. You need to have boundaries just like in your relationships. So what happened for me was when I said, okay, I’m going to start at five and go to 10, working an extra five hours at night after having put in a full day already.
Again, those are New York hours. Market closed at four, do some exercise till about five or so, take a working dinner, then put your work in. When you set a budget for yourself, what ends up happening inadvertently is you get to say, or you create for yourself a window. And in that window you have to, it’s not quantity at that point. The quantity is in the hours. So that forces you to put in higher quality work. If you say, Hey, I’ve got all night, or I’ve got all day, well, guess what? They say, work will expand to Phil idle time. And there’s nothing, there’s no valor in that. There’s nothing heroic about putting in a 15 hour day if you’re not getting any results. My challenge to you would be to cut that in half and improve the quality of your work. Also operationally define what the hell do you think work is? Is it looking at charts as it talk? Is it scouring through social media? And I don’t know if that’s work. Remember thinking is a form of procrastination. We get paid to execute. So how do you that? Because you actually have special tools that can work on your aim and your precision. They’re separate tools. It’s an amazing industry when you think about it. Folks don’t even know this, but you’ve got the thing with the mouse where you can work on just your aim.
Yeah, and that’s what I was doing on vacation a couple of times. I think I did it three times in total. But yeah, it’s, I guess I separate work from downtime when it’s basically kind of what you’re saying where it’s, as long as it’s in front of a screen, I know I’m working. It’s not really downtime. It’s something I need to separate from eventually. Because most of, even when I work out now, even when I go outside, I work out, go on a bike ride or whatever because I still have my bikes from when I used to race it. It’s totally different for me, it’s actually more of a refresher, going for a three hour tempo cardio ride because I’m outside, I’m away from everything. I don’t have to worry about all the stuff. I got people messaging me all the time. That’s another thing with being in this industry is you have people messaging you like crazy all the time.
They’re like, Hey, we should play. I have a friends list of 500 people, and I have a lot of them messaging me quite often to play. And people ask me for tips all the time because I got in a really good spot in a short amount of time. But yeah, I guess it’s really kind of hard for me to recognize that sometimes as long as I’m in front of a screen, even if I’m listening to a podcast or whatever in my room doing laundry, I still feel like I’m working because the screen’s involved. And that’s really draining for me to be in front of a screen all day.
So now we’re talking about quantity of working, the quality of work. It feels like, man, I want to show the universe that I’m willing to do anything. But you also have to draw boundaries and say, I have to work hard, but I have to work smartly. And this puts a budget, a time constraint. You’ll find you, you’ll force yourself to do better work if you put yourself on a diet of the mind. Otherwise you can just piss so much time away and think you’re doing work and be grinding. And this is the beginning of it, and you don’t even know it because you’re like, you’re desperate when you say, I’ll be, I’m willing to do anything. This is not a powerful proposition to the universe. Right? Yeah.
And I definitely improved the quality of my work, taking a break and going away for two weeks. Not that I recommend that for everyone, but I hadn’t had a vacation in over five years. So it was crazy to go that far away and just enjoy myself and really just deal with some of the questions that I had. Where am I going to be? What am I going to do when I get back? All that stuff. I had a good plan going into it. And then the quality of my work just improved drastically as a result. Everything that I was doing when I got back just felt like top tier work that I’ve put out. And a lot of the plays that I’ve made in valent in the game, some of the tournaments I’ve played, it all just feels like next level compared to what it was. And it’s also funny because I did basically cut my time in half. I cut my working time on valor basically in half since I got back. And I’m doing a lot less of the fooling around work that doesn’t necessarily get as much done. And I’m really just focusing on the stuff that I know is targeted and strategic and is going to get me where I want to be.
Yeah. How did you come to that conclusion? Was it the time of the way, or were you analyzing the production in your performance versus what the grind, if you will?
I don’t know. It’s kind of a tough thing. It kind of popped in my head. It was almost like a shower thought while I was on vacation. I was just like, man, I’m putting in so much time and I feel like I’ve been progressing a lot less than I have been historically. And when I got back, it was almost like a clarity, it was a clairvoyance kind of thing where I would have these opportunities to do that lesser quality work, playing a game with somebody who wouldn’t really be able to teach me anything or whatever it was. These things just pop up, people want to play with you. And I’d be like, nah, I shouldn’t really do that. I should should be focused and I should. It was, I had a better common sense about what I was doing and what I was spending my time on. It wasn’t even, I drew the conclusion, it was just a thing that popped up in my head while I was gone. I was like, Hey, I’m not doing as well as I was. And that’s really uncharacteristic of me. And it’s funny, it was the time away really just gave me a much better vision of what I needed to be doing.
So changing your environment seemed to help then?
Oh yeah. Yeah. I guess it could have been changing the environment. It was also just having a break from everything. I had a lot of stress going on the last two or three weeks before the trip, and so that had all kind of been distracting and everything. If you have a thousand things coming at you, it’s hard to deal with them all effectively. So taking a break and going away and dealing with that made it much easier for when I was coming back to figure out the stuff that I really needed to do.
So folks we’re talking obviously about a pro gamer here in eSports with a specific game, but the analogies are pretty much true for any type of an industry. You get out of stuff what you put into it, but there has to be a quantity of work, and there also has to be a quality of work. And outworking the competition is important, I suspect, because when you think about trading, who makes it long term? Because the long term takes away the randomness in the short run, randomness is all over the place, so you really can’t tell if somebody’s good or if they’re lucky or if they’re bad and unlucky. So you can’t interpret. I was talking with somebody and it was the same client. He said, well, I lost on the last two trades, so I totally sucked. And I was like, whoa, whoa, whoa. The hell you talking about?
You don’t know shit after two trades. You don’t know what the outcome of that was. And the loss parameters were within the guidelines that you set up for yourself, and that’s that you can’t make any determination. It’s like going and taking a speck of sand from the beach and saying, okay, tell me about the beach. What beach is this from? Is it from Zuma? Is it from Rancho? Palos Verdes, anywhere in the Santa Monica Bay? We know, can you tell me, are there sharks in the water? Can you swim with the PPOs? Is it littered with homeless people? Like it is in Santa Monica? You can’t make any determination and go back to the process, you see?
Yeah.
So people have a way of internalizing this, and we spent a good chunk of time looking at that because people, they are results oriented as opposed to looking at the process. And I think you did when you stepped away and you went to Italy, plus you probably ate some really, really good food. You actually ran into a friend of ours, which was completely trippy,
Which is wild. That was so weird. It was just randomly by chance. I was walking in a town square in Florence, and he, he’s like, Hey, is that you? And I’m like, huh, I didn’t know you were in Italy.
Right? So that’s awesome. And when you change your situation like that, it gives you context to kind of look back, because sometimes when you’re sitting on top of the fire, you don’t know where the smoke’s coming from. So everyone talks about having a 30,000 foot view. One of the best ways to do that is to take some time away. People are like, oh, I can’t possibly do that. I might miss something. Really, you’re only going to, if you’re a day trader, missing one day’s not going to mean shit. What is that? I don’t understand that missing one day markets aren’t going anywhere. There’s billions of dollars that are tied into the secondary market trading of equities, and more so in the futures markets. There are complete industry. There are huge, when you think about commodities, very different business. And if industries couldn’t hedge their basis risk, some of those industries wouldn’t even exist anymore.
So it’s a very different mindset. Futures markets aren’t going anywhere. Yes, there are certain things that would delist because they lose volume or blah, blah, blah, but for the most part, the secondary market trading of stocks and futures aren’t going anywhere, which also means the derivative trading on set underlying instruments isn’t going anywhere either. So you could easily miss a couple of days or some weeks and do yourself a whole bit of good in terms of preparing and refreshing your brains so that you come back with a new outlook on stuff. Because when you’re not doing the same thing day after day, you can look back and say, okay, last week this time, last week I was sitting in front of the screen, or this time last week I was in the damn discord, which isn’t getting me anywhere. So you have to be your own judge and jury and look at that stuff and become a mediator. An arbitrator, so to speak, of where are you putting your time, money, and your effort.
Yeah. And it was a really good tool, just being away for that amount of time, and look, by every metric, two weeks is a good amount of time that theoretically you should be missing quite a bit if you’re gone two weeks and you know, don’t have access to a whole lot. I didn’t miss a whole lot. All the stuff that I missed wasn’t that time sensitive. And I know obviously some things are, but it’s from what I got out of it, I don’t care if I missed time sensitive stuff. It remodeled my subconscious in a way that I was aware of, and I was doing it on purpose. I wasn’t just going mindlessly on a vacation. I was like, look, I know something’s going on. I feel like I’m in a funk. Let’s try and figure this out. I’m going to go to enjoy myself because I haven’t done that in a while.
And I did that, and it felt like the whole time I was there, I was slowly picking apart stuff that I was doing and kind of chewing on it and thinking it over while I was having a gin and tonic at the Italian Lakes. And it was just fantastic stuff. I was having a bini in Venice. I mean, who does that shut up? No, no, I, it’s just fantastic. No, seriously. So I was at a restaurant in Barran, which is a Venetian island, and there it was this beautiful fish place, you know, had to put your order in the day before so they could catch your fish in the morning. And I’m sitting there having a bini eating this beautiful seafood risotto, and I started thinking, I’m like, man, I really got to figure this out. I got to change things around how I’m doing stuff.
And I just sat on that and it ended up working out great when I came back. It’s just so funny to me. Like I feel like I got to do that once a year now because I was still getting work done before as a person who’s very process oriented. We’ve talked about it quite a bit. I’m very focused on the process. I do definitely get blindsided by my ability to grind, and it definitely wears on my mentality quite a bit, and I kind of forget that sometimes. So being away helped me dissect some of the things that I was having trouble with and put it together in a really, really effective way when I came back.
So I think folks, some of the key takeaways are is that quantity doesn’t, is not better than quality. You have to have a balance between both. You also have to have a balance of the quantity and the quality of work that you put in for your profession and what you put into your personal life. Because as they say in The Shining, the movie, the Shining all work and no play make Jack doll boy, if you know what I mean. Yeah. So plan in time have deliberately plan in time away from the marketplace because you can study charts, you can study fundamentals, you can be engaged with a support group, which I don’t know why anyone would do that, because trading is a solitary thing. You don’t need that. You need some time off from the whole process that you can go back and reflect on your own behavior because behavior predicts where you end up.
You can’t do that during the day when you’re watching your levels or what have you, especially if you don’t put your orders in ahead of time like I do. So again, under the chapter of studying yourself, this might be a good way to actually refresh the system, so to speak, reboot control, alt delete, so to speak on your system and come back with a clear head because then you could better evaluate your own behavior. The changes, what ends up happening is don’t be afraid to take one step backwards. It’s because it’s not really a step backwards. You probably see it that way, but I’ll use the analogy anyway, take a step back to take two steps forward. Right, because the goal here is about performance. It’s not worried about any one particular day.
Most definitely. And also for me specifically, I had downtime before I left. It’s not like I just worked super hotter all the time, even though I kind of did, but I still had planned downtime, but I kind of didn’t realize that that downtime became stale. It wasn’t the same thing that it used to be, and I didn’t get as much refreshment out of it. So if you’re feeling like that, then maybe try and reassess what your downtime really is going to look like and make sure that you have it allocated in a time slot that works for what you do. Yes. And yeah, I think those are all really good takeaways for today. Do you have anything else to add, Mike?
Nope. Thanks very much for being here, folks. I always appreciate the feedback. Every time I speak about a lesson, I jot down the notes. Obviously I read the transcript and I kind of go to school on myself. So there’s never done right. The work is never done.
Yeah, for sure. Yeah. Thank you guys again for watching this episode. We really appreciate it. Make sure you guys subscribe. All comments, help the algorithm. Make sure you click the notifications bell so you get notified every time that Mike uploads a video. And we will see you guys in the next one. Thanks
Everyone. See you tomorrow.

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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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Everybody, how are you today? Hope you’re doing well. Happy Monday. So question came in. I’m going to read it. Actually, I’m not going to read it, it’s too long. But what I’m going to do is paraphrase it and it had to do with Mike. Basically I make it sound like it’s super easy. I don’t think the person read the book. How do you develop your style eventually, right? That’s ultimately the question. How come I’m not a day trader as to opposed to doing what I’m doing and this and that? Well, I’m not here to promote the book. I’m giving the damn audiobook away for free, so there’s no money in that. I guess I’ll make it up in volume.
It took me over four years to figure it out. So I don’t really, I think you got the wrong impression of me. I did try day trading. As you know, I tried four different asset classes. I went to Wall Street thinking that I could trade interbank, foreign exchange options, buying and selling, puts and calls, buying and selling stocks and buying, selling commodity futures. And through lots of trial and error, I kind of came to some conclusions that I had certain skills that were better than others. We’re going to talk about that this week. Foreign exchange didn’t work for me because it was 24 7 and I knew I needed downtime, I needed time to go inward, yoga, meditation, that kind of thing. So I said, okay, I don’t want to be doing this 24 7. I’m going to be constantly burn out. I’m not going to have any type of personal life and I want to have balance.
I know when you’re really starting out, you’re like, it’s great. I got all this information, I got my community and this and that, and it’s like I sleep, I eat and drink and sleep the markets, and in my opinion, it’s not terribly healthy. Then everyone knows the story. I don’t want to rehash it. So how did I develop my style? Well, a big part of the discussion on holding periods. At the time, there weren’t discount brokers. The way you know them today, and certainly nothing like Robinhood or what have you. The discount brokers were like Kennedy, Cabot, what was then called Waterhouse, Charles Schwab, and they had flat ticket prices where a wirehouse would charge, say as much as $150 or maybe 3% for a 5K investment in a security. Again, as an investment, not a trade. Charles Schwab would charge $30 flat rate, and they were all kind of similar. All the discount brokerage services were trying to undercut and gather assets by offering virtually no commissions compared to what the wirehouses were charging. Again, you didn’t get the service either, so you always get what you pay for, relatively speaking. You can’t say the lower numbers better, but you have to remember stocks traded in eighths and so the bid ask was at least an eighth, if not more. So that’s 12 and a half cents. So
If you were trading some of the NASDAQ related stocks, anything with four or five letters and its ticker, those things often had 25 to sometimes 50 cents as a spread, and on top of that, you might have to pay an eighth or a quarter. So you can imagine if you’re trading something that’s trading 25 bid offered at 25 50 and there’s an eighth or a quarter markup, you needed to do five, five eights just to get back to breakeven. So it’s fantastically expensive. Now, if you were a hedge fund and you could negotiate with market makers and what have you, and eventually I got to the point where I was trading size, I think they started negotiating at like 2000 shares of stock. If it was trading, say 25 bid offered at 25 and a quarter, you know, might be able to call the market maker and say, could you do it in the middle and save an eighth?
But you’re still looking at 25 cents as a break even now. So again, it was very, very expensive to the point where it was almost prohibitive to try to be a very active day trader. The one benefit you had is that if you had a level two, since everything traded in eights and we weren’t quote stuffing and all this kind of stuff, I think Sal Och was telling me that there’s like 8,000 different types of orders anymore. And so when you’re trying to read the tape now, it’s a little difficult with Decimalization. I’m sure some people can do it, but it didn’t make sense giving the cost structure to have to sit in front of the screen and to try to do all that. Again, if you could read the tape, that definitely helped. But I think to answer the question that that’s why I started to hold things longer because I found out that when I sat out my hands, even with a prevailing 25 cents spread in stocks, for example, that if you held them longer or you got halfway decent at reading the tape and developed a feel for what was going to go, you know, could at least make your money back.
And then some futures were very, very different. Though I had a feel for those markets because I grew up in a state that was chalk rich and full of commodities and crop ears and this and that. So I understood how those markets worked because I kind of grew up in that environment. Then when I went to school, I got that job where they were hedging. So I got to understand the physical side of the business hedging side right before the specul, the speculation side, and then I designed my trading model using load what was then called Lotus 1 23, which was the prevailing spreadsheet of its day. So just like for you, things will unfold in your life that are going to kind of nudge you in one way or the other that will help you find a situation and a trading style for your capital base that will be suitable for you.
What I’m cautious to say is if your account is underfunded, right, meaning less than 25 K, you can find yourself developing bad habits because there’s virtually no commissions when you think about it. So some places are like they start you at a penny or share over up to a certain amount. Then you get fractions of sense above and beyond that. Some places obviously can do it for free, but that might induce you to trade when there’s technically no trade there, you see. So I think the cost-prohibitive, cost-prohibitive nature of the environment that I was in when I started actually was a good thing because it didn’t give me too many choices. It was very black or white. Nowadays, everything has been commoditized so that the commission structure is down 99 to a hundred percent compared to was it to where it was when I started. So you had to be much more selective right now, again, I had a bit of an edge. I didn’t know it was an edge at the time because I didn’t even know there was such a thing as a trading edge. So that’s how stupid I was compared to how smart all of you are.
I just knew I had to be selective and focus on one thing and do that one thing very, very well. We’re going to talk about that again this week because I get so many emails about process and things around that nature. I was also very hard on myself, just to be honest. So if you f and it doesn’t really pay when I didn’t have to be because why I was showing up and working hard and working very smartly. I was eliminating things and I think that’s, I said before, traders are leaders and leaders have to be very, very decisive. I was very decisive. It was also impulsive, which I’ll admit to, but there’s a huge benefit to being impulsive. You can sit there, there’s a form of procrastination called thinking. Cause as long as you’re thinking, you’ll be like, man, I’m working hard. I’m thinking about all this stuff.
I’m trying to figure it out, and you could fool yourself into thinking that that’s actually work when that’s actually a form of procrastination. You’ve all heard this expression blank or get off the pot, you know, get paid to do stuff, right? So when I say kind of tongue in cheekly, we don’t get paid to know stuff. We get paid to execute. That does not include thinking. You have to do some level of thinking. But remember in the book thinking simp, simple heuristics that make us smart, reduce the process down to one, two or three steps and then pull the trigger because you have to get into execution mode. I didn’t have any problem with that because I knew that it was in the doing right. I had other experiences in my life where I knew that I had to execute, I had to take action.
I had to ask people for their business. You see, so what else can I tell you? Why did it take four years? I mean, that’s just the time that it took. I also had other income streams, so I was afforded a longer period of time where I didn’t necessarily have to worry about getting my bills paid based from how well I was trading or not. So I was very, very deliberate with everything, but I didn’t have to trade under the duress of being broke, right? Two, I had all day to figure it out. I didn’t have here on the west coast, Coco for example, opens at five 5:00 AM local time. I don’t know about you, but I’m not exactly sharp at 5:00 AM and I don’t make any apologies about it. But what I do do is call in my orders the night before because there’s someone on the CTA desk who’s more than happy to execute my orders and get paid very handsomely for it.
So technically my orders are on the floor from people who are in a different time zone and who are very, very alert and who get paid to do a good job for me. So it’s not old school, it’s called professional school. You can do things how you see fit, but what ends up happening for some folks here in California is that they have to get up and be available for work, whether they’re on the road or remotely. So they have a one or a two hour window in the morning and then they have to go do their day job and maybe peek in during lunchtime or kind of cheat and take 15, 20 minutes during the day when they should be doing their, what they’re getting compensated for. I think that makes it hard, which is really not that much time, and if you say, well, I’m going to trade from six to say eight o’clock Pacific time, a lot of prop firms wouldn’t even let you trade in the first 90 minutes, and it’s probably be better for that because you could have head fakes, you could have a whole slew of things that happen at the beginning of the day.
We were told when we were coming up that it’s the retail side that does their business in the morning, and the institutions are actually kind of doing and executing their trades, either adding risk or removing it towards the close, which is typically at least on the exams, like the last say, 15 minutes of the day. Again, there’s no judgment here. This is just how things came to pass for me, given the environment that we’re in is very, very different now. Almost anything that I learned when I was cutting my teeth in the tactic side on the tactical side is the useless to you today because the mark world is a very different place 35 years later. All I can share with you is the emotional constitution of not necessarily quitting and focusing on your strengths, which is something we’re going to talk about tomorrow. Anyway, happy Monday. I hope you have a great week and I’ll see you tomorrow.

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This is an automated transcript