Things are often harder than they look

So as we’re looking at how do you screen for names and make yourself a very independent person when you have the data based on your own actions, not things that were originated by other people, including their entries, what their watch list is, this and that. You get to understand the difference between skill versus luck based on your own actions. And that’s a very powerful place to come from because if you’re going to endeavor to do this for a decade or two decades, this is information that you absolutely need because it’s very, very likely that you can survive the very, very groups that you’re part of or otherwise they don’t last that long. They don’t go on forever. So what happens when it’s not there anymore? What are you going to do? Look for another one. So I’m speaking to the person that’s looking to grow their account from their own trading, but also maybe looking for allocations from other people.

And so that’s the lens that I look at the world through is would I give this person money based on what’s observable? You see, because the world has become completely bastardized and it’s, again, it’s because it’s highly unregulated. What people think of as prop trading is not even close to being prop trading. It’s all risk reversal. You’ve got to put in your money, you have to pay rent, you have all these expenses. That’s not prop trading, that’s brokerage. You see? So again, if you don’t have money, it doesn’t really matter. You can call it the color purple because you don’t care what it’s called. You just need the money to run because you’re broke and you don’t have the money. But if you’re going to do this long term, you need to have confidence in order to do anything. Well, you need confidence and there’s times when your confidence may be shot, but you can take solace in the fact that you have skill.

How are you going to know that you have skill or not? Well, you’re going to have to monitor your own behavior. That doesn’t mean getting a chart book from somebody and saying, I pick these names. How do you know which ones to pick? How do you know how much of it to have? What’s your entry? What’s your exit? You see, that’s why these services really don’t help you. My ethos here is along the Chinese proverb that you’ve probably heard and you kind of know it because you’re living it every day if you’re listening. And that it’s better to teach someone how to fish than to give them the fish. Well, if you’re subscribing to any type of a service where they’re giving you the fish, you’re going to have to debate me long and hard that you’re doing it because it’s saving you time.

My call on that is bullshit. And I know who’s listening, I know who’s subscribed to various services, but in all due respect, I say merde – bullshit. You can do that yourself. I think in a lot of cases the idea of convenience is really just a way of being self deceptive here. And I like to see people being independent because once you can learn how to rely on yourself and exclusively yourself, then you’re unstoppable. And I think in the end, that’s really where you want to be. That’s what at least I see on social media. “Dude, we running shit here.” All right, we’ll see. But I know traders, I know this community probably better than anybody and I know that the best folks have certain personality characteristics that transcend trading tactics. That’s the easy part.

No one really trades on fundamentals, even though they’re very, very important. So you have to learn, when you think of your craft of trading. what is it that you’re going to execute? What do you do with a certain pattern or setup that’s unique to you that you can pull off consistently that will help you create the alpha. So your goal is to achieve a basic education which you can also get by yourself, by just trading and not relying on other people. Measure the results and then make the changes if necessary. Trade small trade infrequently and do everything that you possibly can to preserve your capital. because playing superior defense is the name of the game.

You have to understand that the whole, especially in the day trading space, it seems that that whole industry is there to suck you of your capital by teaching you things that are wrong, that are not important and that get you to rely on other people ongoing, which is really good for them, but not necessarily good for you. And I have too many emails from too many people over too many years that say something to that effect. It usually starts with, “Dear Michael, thanks for all you do for the community. I just got wind of your show. Boy, do I wish I came across this show years ago…” or something along those lines. That’s how the majority of them start. So I feel like that’s the market feedback that I’m getting from the show. I have to share that with you because for folks who are newer in the space, again, they’re coming to the market with dollar signs in their eyes, believing the hype when the reality is, is that the majority of people fail for any number of reasons, most of which is that they’re just not compatible with the profession. Again, nothing personal doesn’t mean you’re a loser, but it’s very, very difficult business despite what claims you see other people making.

So I give you that as a moment of pause because I come from that type of background where I had to survive, I had to make it on my own. There wasn’t a community, there wasn’t any of that and I did it. I also know how hard it is to make money because I come from a working class background. And so I had to always, as they say, the carpenter measures twice in cuts once. Well, I had to measure eight times just as a default because I didn’t have a trust account, I didn’t have family connections, I didn’t have many of the things that other people have. I came from a small town in upstate New York and that was that where everybody was working class. And so I had to do a lot to get out of that environment because I knew if I didn’t get out of the environment, that the environment like everybody is going to have an enormous impact on me.

And I wanted more for myself. I wanted a different type of life. So anyway, I’ll end it here for today. Of course, I don’t have all the answers. I appreciate that you may have other opinions, but I feel like I have integrity with the community by speaking my truth and putting things out there that I know for a fact that you’re not hearing any place else on any type of media platform. And to be frank, that’s how I can live with myself, telling you honestly about my own experiences, the experiences of people who write in for me, and having a lot of integrity with that and speaking again, what I think is the truth. You might not like to hear it, but I’m not here to push an agenda. This is a hard business.

This is a computer generated transcript.

Subscribe to the show  

Click here to  get your free copy of The Inner Voice of Trading audiobook.