Hey everybody, it’s Michael Martin. It’s Tuesday. At least for you watching this. It’s not Tuesday. Today, I wanted to kind of develop a little bit more the idea about learning to trade on the fly, especially for those of you who have been working with some of these funding trading challenges and this and that, or those of you who are thinking about doing it. My take is, as you heard yesterday, is that you should first figure out how to trade then approach the funding process. I wanted to dig a little deeper onto that and explain why every trader has his or her own way of doing things and because of the emotions that come with it and who you are as a human being, you’ll find that your trading style is as unique to you as is your fingerprint. Mine isn’t better. It’s just good for me. Winning traders have that skill.
Yours might actually get better results. I might not be able to pull it off the way that you do. I might not be able to pull it off at all, but it works for you, and that’s what’s important when you skip the step of trying to figure that out. You put yourself not in harm’s way, but inadvertently something’s happened that you might not be aware of, and that is you’re out 500 bucks over the course of the year because you’ve been paying $40 into a program where you’re trying to learn how to trade with the upside call option being like, well, I might get funded. The issue there though is that the entities typically have set up the trading rules for you. So then the question is, can you overlay your temperament and your personality with those trading rules? For the majority of people, like 96% of them, the answer is no. You can’t. You have to set up the rules that work for you. Otherwise, you put yourself in a coping situation, and I know it’s like, well, I have to do something. I don’t have any money. Well, that’s kind of like the necessary evil that no one really talks about. It’s like a dollar and a dream. If you don’t have any money, you really can’t trade. These aren’t really solutions long-term for you to kind of make it and make big money.
History might prove me wrong, but they’re too new to go out and make any big wild bets. So if you’re in the spot of wanting to experiment with this stuff, by all means my information here is going to fall on deaf ears. But the idea that it’s actually going to give you an opportunity for the hours that you have to put in, and then you figure out what your hourly wages, the biggest part though, to me again, is that they set up monthly trading rules about how much you need to make as the achieved level, but then the draw down level is too small. The number of trades too is problematic in that you might have a set of rules that you could eventually develop on your own that only require you to put on four or five trades
Because of the nature of the setup that you have. But if you have to be part of some type of a program where you have to put on 10 or 20 trades on the month, that for your own natural system for who you are could be construed as overtrading, it might not feel good. And you already have people who are coping, right? They’re trying to go from make their money, minimize the drawdown, so then they change to the mini contract, the micro, and now the whole thing’s a soap opera. So it’s clever that they figured that out, but to me, it looks like desperation at the end of the day. So my advice is save your money at the beginning, fund it into your account even if you have to wait and be patient, feel the feelings that you have to feel around being patient and then really learn how to trade because then you set up the criteria that you need. Winning traders never act out of desperation.
You set up the criteria that are best for you. Some of you’re going to be like, I’d rather do it this way. So it’s your money. Do what you want. But I don’t know a single person. Two, I’ll be frank with you, I don’t want to mention any names. I’m not here to call anyone’s girlfriend ugly, but at the end of the day, if I looked at some of the rules that were around those, what they call challenges, they want to gamify it. They’re like, let’s see if you could do it. It’s only 40 bucks. Well, that’s great, but that’s the annuity income for the platform is your monthly service fees. But I’m looking you all in the eye saying some of the rules are so stringent, I wouldn’t be able to pass the damn challenge. I wouldn’t be able to get funded or whatever the language is.
So be careful of what you ask for because you don’t really fully understand what it is that you’re doing to yourself. From the people that I do hear from, they’re sometimes involved with these things for several years. They’re out the money and they haven’t made any damn progress because there’s no education. The education is here’s how you have to trade in order to follow these rules. So the education is more like it’s really the criteria that you need to operate within in order to get funded, I suppose is the language. But what I would rather do, and I was lucky I didn’t have these types of distractions, so what I was able to do was just to develop it on my own risk, my own money. Some of you don’t have the money, I understand, but my opinion is you should save your money and build up your grub steak. Find ways to save money. Put it in the account. And I know this doesn’t really resonate with the folks who are at the pro level, but there’s a whole community of folks who are up and coming or they want to be up and coming, and they’re not just there yet.
So they’re tryin to find their entry spot into the business with the promise of getting funded, per se. I don’t really think, I don’t know enough about it because I haven’t studied each and every one of the companies, but from what I can see and what I’ve been told from the people who were is that you don’t actually get funded, right? You’re just getting paid out on paper gains and those gains, that money is coming from other people’s monthly fees. So it’s not really prop trading, right? Prop trading is when you’re so good, you get a desk that the company pays for and they give you a credit line and you make money and you split it with the house. Of course, there might be certain things that you do have to pay for after those are all negotiated though there’s no one size fits all. The really, really good traders don’t pay for anything, so that’s just the way that it goes.
If you don’t ask, you’re not going to get it. But any rate, that’s my 2 cents, is that if you skip the harder part of not wanting to figure it out, but kind of jumping in and trying to figure out trading along somebody else’s rules, it’s for the majority of people listening, it’s not going to happen. And if you want, Michael Marcus speaks about it in the chapter in Market Wizards about system hopping and getting the worst of it. So you might want to go read that and hear it from him.
The advantages that winning traders have is multi-fold. Here are a few of them…
Winning traders trade their own rules – not rules that have been imposed upon them.
Winning traders do their own homework – they put the work in. They take chances.
Winning traders know that losing is part of the business.