Hey everybody, it’s Michael. Happy Tuesday. Hope you’re doing well. A while back I also got a comment about struggling for a while and I kind of hinted upon it. A trader who watched the video talked about not getting the results that they had wanted to get despite the grind of doing it for three years and trading for several hours in the morning before they had to go to work. And so I think I can say a few things about that. And first of all, kudos for being a hustler. If you think about what your peer group is doing, you probably deserve a little bit of a pat on the back to try to do the trading and learn about yourself in the process despite the struggle. Typically, in my experience, people who are willing to do the work eventually get rewarded. They might not get the reward from the trading, but that type of mental attitude is actually a really good thing because it shows discipline, it shows direction. You have a goal, it shows commitment on some level. Again, we’re not speaking about the quality of the work, we’re just talking about the mindset to put yourself in the seat in the morning to try to make the attempts.
The thing is that you’d want to, that might be able to help you with the struggle is this. If you’re trying to trade in a two hour window, I think a person puts a lot of pressure on themselves to have to behave a certain way within that finite amount of time where your competition has all day. So you might find yourself forcing things because you only have a finite window of time and it probably wouldn’t occur to you. Well, I shouldn’t say that because who am I? It might not occur to you that sitting on your hands and not trading for a particular day might actually be a good thing because otherwise you could be thinking like you’re missing out on opportunity and that’s emphasized by the fact that you’re missing a good chunk of the trading day because you’re working your nine to five job.
So you might come in with that mindset. I know I’m already missing out, so I have the FOMO times too. I have to make up for the lost time that I can’t spend in front of the screen that some of the other traders are doing. So I would get rid of that thinking if that’s present in your mindset. And I would also start to think about coming up with a set of rules where at the open that there’s certain criteria that have to be met in order for you to put on the trade as opposed for you to be sitting there watching the screen in minute bars or whatever you might be. I think you mentioned like one three and 10 minute bars or something. And so I don’t know what that model would look like, but instead of trying to trade on the shorter term criteria, think of trading smaller and actually trading when while you’re not there. And by doing that you can look at the smallest possible risk unit that you can afford given your capital and trade that just based on prices from the previous day or the previous week or the previous month. The higher timeframes don’t say, I come to the market every day trying to trade just the einy or one of those micro contracts using convergences or divergences between smaller timeframes. The data are much too random. At least for me, I don’t care about 10 minute highs. There’s no point in it for me.
And this way you can have a position on that can stay on as long as it’s a winning trade while you’re nine to five. To me, that’s leverage. That’s using the two hour window to set yourself up to win as opposed to saying, I have to make it and take it in that two hour window. Then moves are probably not all that pronounced. Maybe you see a big pop at the open, but to the markets, from what I can see are kind of retracting. That slopes of the moving averages are down in the world we live in right now and the fundamentals are not terribly bullish. We’re coming into Q four. So what can you anticipate? Well, the window dressing is too generic an expression in any jackass who’s read a book about trading can say and speak to it, but a lot of you will see people repositioning themselves, maybe not in October, but certainly coming into the period between say Thanksgiving and the end of the year. And that might cause for some volatility. People might be protecting their profits and actually locking them in looking to kind of come back to the market in January after the 30 day wash sale rules go by.
So I think you could change your outlook and say, I’m going to look at my two hours in the morning as more research based rather than trading based and finding ways to buy whatever it might be, one risk unit or even a fraction of a risk unit. Then put your protective stop in, then go to work because most of these places have trading apps and you can take a bathroom break, look at your position, adjust your protective stop. You could probably do that without anybody looking. And if you’re working from home, it’s probably a lot easier. The thing is, you don’t want to become a stalker and start looking at your trades and obsessing about it. So I would encourage you to think in longer timeframes because this is the way that you really can leverage your efforts and then you let the market do the work for you when you’re sitting there trying to day trade in a two hour window. And again, from my point of view, I want to be a business owner, not a business manager. I want to own stuff and have everybody else do the work because then I could pay them. And then in the process, I’m not paying them for the labor. I’m paying them to buy back my time.
And it might be exciting for where a person is in their career to sit at the screen and to look at it and see things move in real time. That has kind of come and gone for me that window of time and that kind of came and went within my first year. I didn’t find it particularly exciting to sit and watch the tickers nor the scroll of the tape unless I was tape reading on a particular trade. Little harder to do now with decimalization and also the advent of the 8,000 algorithms that can be running at any given time along with high frequency trading.
So it might not be the answer that you want to hear, but I have to think in terms of productivity. And if you were working for a bigger company and your boss hired me, what would I say to help you become more productive? It might be to reevaluate your time and the quality of your time, what you’re doing within that time window, because it’s awfully difficult to put that kind of pressure on yourself to say, I have two hours and I have to make money in that two hour window. You’d almost want to use high frequency trading or something like that in that type of a situation. Otherwise, I would program the computer to look across who knows, 60 to a hundred different instruments to see what could move as opposed to maybe looking at one. I’m going to guess you’re looking at indices or one in particular in the timeframes that you stated.
And I’m not judging you, I’m just saying if you want to give yourself a bigger or a better chance, higher probability of winning, you might have to change your mindset and your whole approach to things because you admitted to having a grind for three years. You said it, not me. And so under those circumstances, again, I started giving you a compliment saying kudos for having the mindset to stick with it. That’s a huge part of success because you lose when you quit, that’s when you lose. When I go to Jiujitsu early on I was getting smashed because I didn’t have any technique and I didn’t have any experience. So the combination of those two things put me at a disadvantage every single time. But I knew that going to class and getting beat was still a because I was there, right? I only lose when I quit and I quit on myself, and you didn’t do that. So to me, that’s a big win. If you’re willing and you’re open-minded to say, well, what I’ve been trying to do here to for isn’t working, I need to pivot because the answer might be right. Remember I said the feelings that you want to feel about being a winning traitor, they might be on the other side of feelings that you don’t want to feel. The feelings that you might not want to feel is abandoning what you’ve been doing because although it’s frustrating, it’s still bearable, otherwise you wouldn’t be doing it.
So that would be my 2 cents, is to try to think about reshaping your day and how to use that two hours to put yourself in a winning position so that the whole rest of the day could be levered to your advantage, which might mean increasing your holding period for the time being, especially if you’re working nine to five. So I appreciate the situation that you’re in and kudos for keep kicking it. If there’s more to the story that I’m missing, please add a comment here and I’ll address it if I can say anything intelligent about it. But otherwise, I appreciate everybody being here. Please like and subscribe. I’ll be here tomorrow with Ganja. We’ll have a great episode. So I’ll see you then.
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