Everybody, it’s Michael Martin, happy Friday. How’s it going? Hope you’re doing well. So I know the volume on one of the mics was a little low on Wednesday’s episode, so we’ll get on that. We’ll fix it. Just growing pains, but we’re on top of it. Appreciate it. Today I want to talk about something that I live by and it does come up in both the mastermind and the group. I know I was going to tell you the differences, but I just don’t feel like doing that today. Maybe I’ll do, we’ll do it Wednesday with ganja or the week after. I want to stay on the theme of self-improvement and what you can do for free here, and it’s something that I say to myself, I don’t think I came up with it, but it’s something that I live by and the saying is progress, not perfection.
It’s true for everything in life, right? I mean, perfection’s hard to find. You might have the perfect trade, but you really wouldn’t know it until after the fact. You’re looking for the perfect partner, boyfriend or girlfriend or spouse. I don’t know that perfection actually exists. I think if you make a list of the 10 things that you’re looking for in a partner and you can find six or seven of them, you’re probably cooking with gas as they would say, but do what you think is best as far as trading is concerned. When I think of progress, not perfection, it’s along the lines of like, can I get half a percent better every day, right? Because what I hear from the emails is this sense of urgency that folks have to get there tomorrow and you rob yourself of enjoying the process of your growth because those haha moments are very, they’re very valuable to you.
They give you a lot of great insight, and I get emails from the students and the breakthroughs that they’re making are extraordinary and they’re changing their lives in very profound ways. So when I look at myself, even at my stage, I say, okay, how can I improve this one thing? Here’s something that I became aware of and I can do it better. I can improve it, take a shot at improving it. Maybe the first time it’s a strikeout, maybe the second time’s a strikeout, but I’m still in the solution. That’s the way I look at it. I’m still taking the chances, I’m still in the solution and I’m testing. I’m putting things together to kind of see what the results are. And two, if you’re going to make a test, very rarely are you going to get the results in one day that are going to satiate you.
If you’re doing and trading with live money and not back testing, say over 20 years of past data, sure, you can get that hypothetical spit out on the results screen and see how it would’ve done, but when you put the thing into practice, it’s a whole other ball of wax, and so you need much more data. So to think that you’re going to make improvement over the course of the week and you’re making gigantic leaps and bounds, I hope and pray that that’s the case for you, but it’s not typically how it goes. Yes, from time to time there’s a big light bulb that goes up and you’re like, oh, wow, I didn’t know that. All the route on the highways that go east to west end in a zero and the ones that go north and south have a five at the end. I never
Knew that. And it blows you away when you find it out, and so you’re like, wow, big aha moment. I hope you have those, but they’re few and far between. They require a lot of work, a lot of insight, a lot of personal work, a lot of experimentation, especially with real money. And so suppose you could improve your own account half a percent a day, what would that mean for you? How would you feel about it? Would you feel excited or is it me? It’s not big enough, right? I don’t think in terms of dollars, I don’t think you should either. I don’t care what instrument you’re trading, I just feel like thinking percentages, it’ll help alleviate, especially if you’re coming out of blue collar despair or a working class background and you have to deal with getting out of the idea of like, wow, you just lost 300 bucks or some nominal amount of money and then thinking of what that money could have bought, right?
You have to get out of that thinking, and one way that you can do that is to think in terms of percentages. Two, it allows you to be, if you get used to it, it’s not going to happen on day one, but if you think of your R, right, your risk unit as a percentage of your capital, call it one fourth or one half of 1% of your capital, then you don’t have to become married to any one particular trade. Now, I know that’s going to be hard for those of you who, yes, I sometimes make fun of who are trying to just trade stock index futures, and damn it, if you don’t find it in the daily chart, you’re going to downtime it until you find something that looks recognizable. I feel like that’s a mistake in you’re forcing the issue, but I feel like if you could grow your account by one fourth of 1% or even a half a percent, what we have about 250 trading days, and if you could grow one half of 1% over 250 trading days, you’re going to be up over a hundred percent by the end of the year.
So think about if you would apply that ethos to your lifestyle and what you’re doing in your personal growth as a human being. Yes, it can be related to the trading tactics, kind of where you make your money. You don’t need to memorize chart patterns, and again, I’m talking to the folks who are trying to learn how to have one setup that they can trade across many instruments as opposed to saying, I have 12 different trades that I’m going to try to find, and by God something’s going to work. I find that those folks are the ones who are pushing when they shouldn’t push, and it’s hard to make money when you’re pushing. Remember, I’m not the only one who’s ever said that in order to put on a trade, you have to have a definable trading edge. So if you’re pushing, there’s no edge there and your edge is not going to be in the chart pattern or knowing a chart pattern. It might be how you trade it, but that’s because you are the alpha. We’re going to talk about that
Another time, but I don’t like to see people pushing because they’re not in the natural flow of things. When you’re pushing, it’s like you have an emotional urgency that you need to fulfill, and then you’ll have the financial one. You want to get to a place where you understand that the emotional and the financial always go together, and you don’t want either one of those things to be tipping the scale and inducing you to have to put on a transaction. Again, that’s why I advocate look at trading one strategy, maybe two strategies across 60 different instruments because then you’ll have something where you can affect your edge. The probability of finding something over one particular over 60 different, the probability of you finding at least one or two out of 60 potential instruments that you’re following to me is greater than you trying to find, stick with one instrument and try to overlay 12 different trading strategies.
Ultimately, you are your trading strategy, and it’s very difficult to have that kind of split personality, especially if you’re at the beginning of your career. Again, I get the emails and I have the benefit of hindsight, but I also lived it. I also tried to go to Wall Street and be not a he-man, but I thought I could do everything everywhere all at once, and it doesn’t work. It didn’t work for me, and so I can only advocate what I’ve experienced in my own life and then studied in other people over the years, and that to me is the best way to do it is to take the growth slow and steady, one half of 1% every day and give yourself some space to be wrong. Give yourself some space to be a human being because there’s lots of pressures these days, lots of stuff going on.
There’s all kinds of political crap. There’s financial stuff, there’s gender politics, there’s just so much that can infiltrate your day, so give yourself a pat on the back for doing the work and kind of pulling it out, but be kind to yourself at the same time and realize that Rome wasn’t built in the day and you’re going to figure out exactly what you need to figure out as long as you’re taking the steps, you have to actually take the steps. You can’t ideate your way to financial freedom. You actually have to do it and then learn to be patient because sometimes it’s in the postmortem or it’s in the studying of your own behavior after the fact that you can learn something and see patterns in your own behavior. That’s where the gems are. That to me is where you can start to pan for the gold and start to uncover where your alpha might be, where your edge, your trading edge might be. It’s in looking at your own behavior because again, behavior predicts where you end up. So study your own behavior and then make the modifications if you can, and realize that we are emotional beings. Even if you’re purely systematic, you still have emotions running through your body. We can guarantee you if you’re trading a purely systematized set of rules and you’re down 20%, you got a lot of emotions running through your body, despite what folks would tell you the
Amateurs, you’re a human being first, which means you’re an emotional being, and that’s just the way it’s going to be. What you don’t want to do admittedly, is let your emotions affect your judgment. Your judgment affects your behavior, and you know what happens after that. And so you, you’ll have to calibrate your system to be very, very disciplined to stick to your rules, but that’s true whether you’re discretionary or if you’re systematic. I knew of guys coming up that are like, yeah, I’m going to be just like Ed Dakota. I’m going to trade systematized rules and this and that, and I said, okay, well be careful what you wish for because you’re still going to have a strong vein of emotions running through your body when you’re making a lot of money or if you’re in a big drawdown and what ends up happening or can happen anyway, is you get so psyched out that you don’t run the system the next day because you’re in a drawdown.
You’re afraid to lose more money, so you have the rules. They probably have positive expected value, but you still can get sidetracked. But anyway, I think all that notwithstanding, if you just think about growing a little bit every day, you’ll be surprised at the progress that you could make over bigger periods of time. Most folks, they want to get there tomorrow, and part of the discovery process is allowing for the time because that’s when the aha moments kick in and you really learn about yourself. Anyway, that’s all I want to talk about today is just think about little bits of progress each and every day. Be con to yourself because you’re probably doing a lot better in and around all of that stuff. You can’t see the fire sometimes when you’re standing on top of it, so just keep sticking it out, become insightful, increase your sense of self-awareness, and I think over the course of several months, you’ll start to see some growth.
I know that in not necessarily the Mastermind, we do more trading stuff, but in the group coaching, it’s a 12 week program, and by week three or four people are already starting to see big changes in things, so I know it’s absolutely possible. I know that you don’t need to be part of a group or a mastermind. Some people like to do it. I just know that I did it. It just took four and a half years, not 12 weeks. So it depends on how do you want to amplify your results? Do you want to use leverage, lever, your time and money to accelerate your learning curve? Anyway, I hope you have a great weekend. I hope if you’re in Florida and the southeast of America, you’re doing all right and I’ll be here next week. We’ll see Ganja on Wednesday. I hope you have a great weekend, and I’ll see you Monday.
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