Everybody, Michael Martin hope you had a great week and that you have fun plans for the weekend. Today is Friday. And, so let’s talk about a lot of the things we spoke about this week. A lot of the answers to the questions can be more easily determined if you actually have a goal. If you have clarity about what it is you want your money to do for you, and then how that money is going to serve you in your life. That really helps you answer a lot of these questions. But as we’ve mentioned, you can’t immunize yourself against having to deal with the feelings that you would feel around uncertainty, and you don’t want to feel or feelings that you don’t want to feel in terms of like reluctance. “I’m reluctant to put in my stop, because I don’t want to get stopped out”, but that reluctance then becomes an invitation – is an appetizer for despondency. You see?
So you don’t want to find yourself in that type of a spot because if you lose all your marbles, you can’t come back and play tomorrow. So it’s better to trade super small on high quality names, risk what you can afford to lose and then learn about yourself. Most people want to learn about the markets about trading, about tactics, but this is easy. You can get that for free on Google. The hardest thing, which is what we focus on here and all our consulting, when we do consulting and have time away from the trading part is to help the person study themselves because your behavior predicts where you end up and the feelings that you don’t want to feel are going to have as much power over you as the ones that you do and your reluctance to feel those feelings might actually be costing you.
I don’t know, a hundred percent more rate of return, which means if you’re ready, willing, and able to do what to do, do what you needed to do to make 20%. You know, if you were trying to avoid certain feelings, as opposed to embracing them, you might find yourself up 40%. So then look at that on a spreadsheet and compound that over 10 to 20 years. And that’s the opportunity cost of the unwillingness of your unwillingness to feel all of your feelings. So that’s why I say like, it’s hard for the amateur, the new person to look at a chart and say, here’s how I would feel if I was in this trade because you have to do it, but starting with a financial goal and then all the feelings that you want to feel go back two weeks and listen to the episode. I think it was on a Wednesday about all the feelings that go with the moving parts of a trade.
How do you feel from the inception and the ideation to the raking of the data, to putting together your wishlist, to trade entry, trade management, trade execution taking winners, adding to winners. Another one we didn’t talk about, but we could mention is what does it feel like when you get knocked out and you feel the urge to want to get back in? What is that feeling and how does that feeling serve you? Are you bitter? Are you angry? Are you going to try to show up the market? Don’t come to the market with a Napoleonic complex because you’ll get your head kicked in.
I know that enough from having seen it happen. So be careful your, your job is to always play superior defense. If you’re lucky enough to have a trading grub stake, then treat it like a newborn child and just be cool, just chill. But ultimately a lot of the answers to your trading questions can be garnered from the back testing. So then you could scour the data and say, okay, this was a bad day in the market. How would my strategy worked? How would some unrelated incident in the S& P affected affect the names that I had? How if the fed tightened or eased credit on this particular day, how did the names perform? Because you can’t predict, although everyone thinks they can humans suck at prediction, that’s a starting point. Some people have intuition and there are some people who can, after many, many years have a feel for things, but it doesn’t mean they have any better idea of prediction.
And so I think that’s what people are trying to do. Well, it’s like, well, if I just see this head and shoulders pattern, I can predict the last leg up and that’s when I can get in, but it doesn’t always work that way. Same for any other chart pattern, including cup and handle. So I was again, spend the time thinking about what it is that you do. What do you want to do? What’s your goal? You know, what is ultimately your goal? And it’s typically not in and around tasks. Like I have a goal, I going to get new monitors or I want to turn my trading account into $1 million. That’s not a goal either. And I’m not going to say anything more about it. I’m going to let you meditate about that over the weekend. Hope you had a great week folks and you got some fun things planned for the weekend.
This is a computer generated transcript.
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