Important lesson for new and newly successful traders.

I don’t necessarily like to talk about clients, but I think this is an important lesson.  Also know that I am talking about it with his permission. One of our core values in our trading group is that we do whatever we can to help each other, like this blog.  Every member is at a different level and that helps in a couple ways.  It helps because the less experienced traders can see how the successful traders work.  The more experienced traders can see the mistakes the less experienced are making and can be reminded of what not to do. Much can be learned.  As a trader you are always susceptible to trading like you are less experienced.

Background.

A little about the client.  Dino Fratto is 25 and started trading in options and now is trading futures. He left the business and found his way back.  He started with us about a month ago.  He has been a model student.  We made it clear to him the challenges he would face and he has been working through them.  He has attended every after hours class and every live trading class. He has worked hard to understand the materials.  He has asked the right questions.  He has been taking it slow and being extremely patient.  He wants to be a trader not have a trading account.  All of those are important ingredients.

Yesterday he had a great day.  Once again, it had been cultivating for over the past month.  He did all the right things and it came together in that moment.

After you finally see the hard work pay off, trading actually starts.  Handling failure is easy because for whatever reason everyone always has that 90% of traders fail thing stuck in their head.  I loathe that statistic, one because it gives people an excuse and secondly I do not know if it is even true.

The pitfalls and responsibilities of success. 

After every big day you should read this post.  I firmly believe that until you have done it a few times that the gains will be erased.  They can be erased by taking the money out of the account or giving it back.  There is a psychological shift that happens, until you have done it a few times it is hard.  You are going from a state of disbelief /lack of confidence/fear to a state of hope/ prosperity / excitement.  You can never ever forget how you got there.  You fall the farthest when you are on top and it is the time when it is easiest.

Now that you know you can do it, you have to do it.   I felt the need to rebuild my account.  Maybe it is human nature to destroy ourselves.  I do not know.  There is real pressure to perform.  The pressure is relieved, once again, by focusing on routine and the things that got you there in the first place.  At the start of the day everyone’s P/L is 0.  We are all rookies, nothing is older than yesterday’s P/L.  You do have an advantage though, you did it.  It is important to note that doing it once, is not the objective.  Doing it over and over and over and making it a career is the objective.

Another pitfall is taking too much risk.  Although we are constantly putting risk on and taking it off, that process is a cornerstone of trading, there are times when you take risk and it works out.  Other times it does not.  If I hadn’t seen the statement I would have never believed that he made that much trading at most a 2 lot and netted $1150. He was a taker all day, that does not always happen.   You have to always be learning, equally from the successful and unsuccessful trades.

Conclusion.

I will never handcuff another person, what I can say is that I have been there and seen many people in that same place.  I hope he can continue on this pace. If he does continue like this it will because he will have kept a level head and continued to do the things that got him there.  One day does not make a trader, unless it is your last. The works starts now.  I really like the progress Dino is making, he is on the right track.  Teaching someone to trade is harder than trading but working with Dino has been a pleasure.

True to this blog and our trading group, I hope this post helps you in some way. Click here to see his statement.

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The services and materials provided should not to be interpreted as investment advice, an endorsement of any security, commodity, future, or personal investment advice, or an offer to buy, sell, hold or trade futures, options or commodity interests or a recommendation to buy, sell, hold or trade futures, options or commodity interests. You assume the entire cost and risk of investing and are solely responsible for any and all gains and losses, financial, emotional, or otherwise, experienced, suffered, or incurred by you.

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Eating like a bird, sh@#ing like an elephant syndrome.

Trading is simple, take in more than you give out. There, my work here is done. Ok I guess not....

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