So following on from yesterday, I guess in a, in a, in a way you can say that you don’t wanna major in minor details, you wanna focus on the three things that actually make you money. Uh, you know, I don’t believe in, in reading thousands of books on trading, I don’t think, first of all, I think if any of the damn books were good, we wouldn’t need 75 new books every week on trading. Cuz the, you know, everything that’s been said has been said, so you need to put some money to work and feel your feelings about, you know, having made those decisions and you know, making and losing money. So you, you, until you have to dissociate yourself with the money, it’s not a, it’s not your grub stake for trading. Isn’t gonna be used for like a house it’s your trading capital.
And so, you know, when you separate that, it’s a big emotional relief, right? Because that’s basically, it’s like going to a video game store and that’s your role of quarters, right? It’s just your ammunition to put at the market and what you lose by trying a new strategy or starting to trade even for the first time is really, you know, there for you to make your mistakes so that you can learn a lot of people like myself, we refer to that as your tuition and you can’t kind of paper trade your way through your tuition. And then think that you’re gonna be absolved from that by trading real money. I know people think like it’s helpful and this and that. And what I will say about it is this it’ll help you. It will help you understand perhaps how to run or make order entries on that particular trading platform.
But because you’re not making or losing any money, real money, you don’t feel the feelings that you would get by doing that with real money. And that’s a huge part of trading is being able to feel good about making money and not getting into hubris and then either over trading or trading with too much leverage and just staying grounded. It also means not being destabilized because you took a big loss or 10 losses in a row. The whole point is to help you calibrate your system so that you could be at the zero point and be kind of PLA placated. So that you’re at the point where all you really do is follow your rules and making money and losing money from that system is incidental. That’s the after effect, right? It’s like inflation. Inflation is in higher prices. That’s the, that’s the effect of inflation, right? Inflation is monetary. It’s the print inflating of the currency. It’s the printing of the money. What can, what you can see from that process
Are higher prices for goods and services. So likewise, when you trade, you put real capital to work by following a strict set of rules with which you’re compatible and the outcome of those rules is either making or losing money. So then you gotta get comfortable with the levels. How frequently do you make? And what’s the magnitude of the winner compared to how frequently do you lose? And what’s the magnitude of the loser, right? You need to get that. And the only way you can get it is from real trading because otherwise you’re not gonna know what it feels like. I know people have been paper trading five years and I’m like, okay, it’s better than playing candy crush, you know, or donkey Kong or he, you know, Teris, you know, cuz that’s really what it is at that point. There’s no risk, it’s a form of entertainment.
Like let me see what I can do. And again, that goes for the folks who have tens of millions or more is, you know, they wanna sit, sit back and be comfortable. I get that. But being comfortable does not mean making progress. And so if your goal isn’t to make progress, that’s okay too. But to me you’re either growing or you’re dying, right? That’s the paradigm I live in. So anyway, just more food for thought, as you’re going through this, especially with the markets being soft, you know, you always have to be testing your ideas, you know, stop thinking and do, and I would absolutely test ideas. So for example, if you have strong, fundamental opinions about things, we’ll test those ideas, right? You wanna try to trade stocks long in a market where they could be tightening credit, perfect run, do your back tests and run it through, say whatever it was. 94 when we were in a midterm year like this year and the fed tightened credit, I think six times. So see how running long only strategy worked in that period of time. Okay. All right, folks giving you enough to chew on for today. Thanks for being here.
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