My point was not that the “tough” trader always succeeds.

Whether or not you think the market is rigged, as an individual trader you are more likely to lose money than not (with everything else being equal, which it is not, you lose out on the fees). So your “advice”, like most trading advice, is simply an exercise in nacrissism and self-delusion, aimed to promote a fantasy of a “tough” trader who succeeds against the “weenies”. – from a comment on the post “Don’t be like this Trader”

Yes you are right, as an individual trader you are more likely to lose money than not. If you think it is rigged there is a 100% chance you are going to lose. You are not willing to learn you will fail. If you do not learn to lose you will fail. If you do not take responsibility you will fail. If your expectations are too high in the beginning you will fail. If you do not have the capital you will fail.

I do not make any bones about the amount of failures in trading. Probably not the best marketing if you are a partner in a trading education business. Our goal is to get people to the point where they say, I gave it all and I failed. Because at the end of the day you can either do this or you can’t. Not every person can, will, or can maintain what it takes to be a trader. Trading is harder than most things because:

You are constantly being introduced to yourself. The way you see a market is effected by your mood, attitude, etc. In order to remove that you have to look at yourself every day. It will catch up with you if you don’t.

The feedback you get is not like any other you are accustomed to. Because you are making money or losing does not mean you are doing anything wrong. It is evaluating the outcomes the same. In most circumstances you only have to change after or have the energy to change after something bad happens.

  • The amount of effort you put in may or may not correlate to result. If you stick it out long enough you start earning from the work you did 3 months ago or 3 years ago.
  • Everyday is new. Both in terms of what you know and what you accomplished. You can be wiped out tomorrow if you let it. I have given back what took weeks to build in days.
  • You have to learn how to lose. Knowing you can do everything right and still lose is hard to overcome. Getting up the next day is hard. There are days I do not want to get up but I have to.

I could go on forever but chances are you have already thought about all this if your are risking money right? No. I said what I said to make a point. Because what is obvious to some are not obvious to other. I talk with people that should absolutely not be trading. I tell that to their face and it is not to be a dick it because it is the truth. There are situations where I tell myself the same thing.
A trading account does not make you a trader. Trading is different in that respect too. I can buy a plane and not be able to fly it. I can own a NASCAR and not be able to race it. Anyone with, in some cases, $500 can open a trading account and not trade it. It is hard for me to understand “their narcissism and self-delusion” that they can be successful.

Some may argue that I am a narcissist and they could be right depending on when you met me. But that was not about narcissism. It was about being real with people. If you believe you are ultimately going to fail at something you are never going to be able to succeed and especially at something as hard as trading. It takes hard work and if I had to do trading all over knowing what it took I would have never done this. Fortunately I had help along the way that made it easier.

That post wasn’t about telling people to rub dirt on it or stop being weenies. It was about getting people to not waste their lives doing something they do not feel like they be happy with it. If you do not think you can accomplish a goal why even try. So you can ultimately fail? It was not about telling people to not be a wussy it was about telling anyone to stop what they are doing if they think they are going to fail. I don’t want them to quit trading but they absolutely should if they are hoping to be successful doing that way. Yes there is a lesson in failure and I do not look at any of my failures as a waste because it helped form who I was but that does not mean it was not wasteful and unnecessary after a point.

I expected to have some feedback from this post. I was especially surprised by the positive feedback. It is really hard for me to understand how anyone could argue that if you think you can’t win you are eventually going to be successful. Now where I made the mistake is assuming that when I said, “if you think you can or you think you can’t, you are right” also meant you had to work at it. I also should have known that by saying you think you can that you will. That is not the truth.

That the way you are looking at a market is probably not working and you should quit or change. That was the message, it was not stop being a weenie. It was revealing part of what it takes to be a trader with one example that I hear enough that I reached a boiling point that not enough people knew that.

I do not write to make friends. I write because I love the futures industry and I love what I do. I do not want people to love it like I do. I want to give those that love it some basic tools. We are at an interesting confluence in the futures industry where it is easy to publish and the traditional way to learn, coming to the trading floors is gone. People need to step up and be honest. Once again, I am a trader and in the trading education and I know how scummy the education business is so I see where the conflict of interest may be. I absolutely have a profit motive but why would I ever tell a trader that they should not trade, that is free money for traders. I hardly ever talk about our business. Yes I do talk about my mentor and partner Anthony Crudele a lot because I think he is one of the best in the business. There are very few if any independent e-mini traders who have traded longer or more than he has, in the world.

Sorry for the rant again. As always I appreciate any feedback both good and bad. I stand by what I write and if I am wrong or I failed to communicate I will fix it.

Remember just because I cannot be a professional basketball player does not mean it is impossible.

Sorry I didn’t edit this and not spending more time on it.

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  • RogueTraderette

    I’ve really enjoyed your last two posts, and I totally agree with you that so many people come to trading with no intention of doing the hard yards to make it work.  They just want a dream on a plate then come up with excuses  – like the market is rigged – to make their failure more palatable.

    It literally took me 3 years before I saw ANY money coming in from trading.  Hardest, but sweetest money ever.

  • Full Circle

    I found much “truthiness” in your post, particularly the three bullet points. The markets sometimes remind me of the game “Calvin & Hobbes” play where the rules are made up as you go and the other side has to adapt quickly or lose unlike say chess where the rules are very strict.
    The other statement you make that resounds is “You are constantly being introduced to yourself.” This is constantly eye opening and I find the process fascinating.
    Great posts.

    • Full Circle

      Here are the unofficial ules to “Calvinball” and are, in my opinion, not too dissimilar from “Marketball” (just made that up)
      http://www.bartel.org/calvinball/
      As a for instance:
      1.4. Any penalty legislation may be in the form of pain, embarassment, or any degradation the rulee wishes to execute upon the other player. (see Fed, Madoff etc.)

      • Eli Radke

        Thanks, great reference.

  • I would like to suggest a very simple  method that anyone can follow while investing in exchange traded funds and closed end funds that can greatly increase returns while at the same time lower risk. I believe this method because of its simplicity can enable even those with limted financial knowledge to become rich with considerable less risk.Anyone that has any doubts as to the Accuracy and validity of the information provided below feel free to check it out with any competent financial advisor. I feel totally confident that my analysis will withstand any serious security.Im am speaking about exchange traded funds and closed end funds from the perspective of a citizen of the united states. The following may not apply to investors worldwide.Their are now over fifty single country funds available and maybe over 100 narrow sectors like airlines steel solar so why the concern for the nasdaq or the standard and poor five hunderd each one of these countries and sectors is a index of and by itself The solar exchange traded fund {TAN} is now down 90% from its high in 2007. If I were a investor or trader I would simply look for any exchange traded fund or closed end fund that does not use any leverage in their porfolios and start buying in the ratio of 0.50 percent of your cash on hand in my account after their is a 75% decline from its all time high and than buy twice as much in the ratio of 1.00 percent of your cash on hand in my account if that exchange traded fund or closed end fund declines another five percent an 80% decline from its all time high buy twice as much in the ratio of 2.00 percent of your cash on hand in my account at a 85% decline from its all time high buy twice as much in the ratio of 4.00 percent of your cash on hand in my account at a 90% decline from its all time high and finally buy twice as much in the ratio of 8.00 percent of your cash on hand in my account at a 95% decline from its all time high. Now I know that some of these funds will not decline 90% from their all time highs. Another thing that you might be wondering about I would run out of money. If I followed that method right wrong example take one hundred thousand dollars. Example Buy 500 dollars of xyz fund at 25 dollars off 75% from its all time high of 100 dollars buy 1000 dollars of xyz at 20 dollars off 80% from its all time high of 100 dollars. Buy 2000 dollars of xyz at 15 dollars off 85% from its all time high of 100 dollars Buy 4000 dollars of xyz at 10 dollars off 90% from its all time high and finally Buy 8000 dollars of xyz at 5 dollars off 95% from its all time high This way you will have your biggest positions in the funds that have declined the most and the smallest positions in the funds that have declined the least. Also keep in mind that if your cash position in your account is say one hundred thousand dollars to start this will gradually decrease as the equity portion of your portfolio increases. Example If your cash position is fifty thousand dollars of your one hundred thousand dollar portfolio you would invest one half of one percent to start which would be two hundred and fifty dollars. Also keep in mind when you buy an exchange traded fund you are buying a basket of stocks so the fund cannot go to zero unlike a stock. Than when any fund has regained three quarters of its value that would be say fund XYZ which traded at 100 dollars five years ago. It now trades at 75 dollars in the case of XYZ. Now you would use a 10% trailing stop loss to protect your gains. So if XYZ declines to 67.50 from 75.00 you would be stoped out insuring that you retain most of your gains. If XYZ continues to rally without correcting by 10% Who knows you may sell out of the stock within 90% of its all time high. Its all time high could be 150 dollars..And their you have it a simple but brilliant strategy for exchange traded fund and closed end fund investing.

5 Responses to My point was not that the “tough” trader always succeeds.

  1. RogueTraderette says:

    I’ve really enjoyed your last two posts, and I totally agree with you that so many people come to trading with no intention of doing the hard yards to make it work.  They just want a dream on a plate then come up with excuses  – like the market is rigged – to make their failure more palatable.

    It literally took me 3 years before I saw ANY money coming in from trading.  Hardest, but sweetest money ever.

  2. Full Circle says:

    I found much “truthiness” in your post, particularly the three bullet points. The markets sometimes remind me of the game “Calvin & Hobbes” play where the rules are made up as you go and the other side has to adapt quickly or lose unlike say chess where the rules are very strict.
    The other statement you make that resounds is “You are constantly being introduced to yourself.” This is constantly eye opening and I find the process fascinating.
    Great posts.

    • Full Circle says:

      Here are the unofficial ules to “Calvinball” and are, in my opinion, not too dissimilar from “Marketball” (just made that up)
      http://www.bartel.org/calvinball/
      As a for instance:
      1.4. Any penalty legislation may be in the form of pain, embarassment, or any degradation the rulee wishes to execute upon the other player. (see Fed, Madoff etc.)

  3. I would like to suggest a very simple  method that anyone can follow while investing in exchange traded funds and closed end funds that can greatly increase returns while at the same time lower risk. I believe this method because of its simplicity can enable even those with limted financial knowledge to become rich with considerable less risk.Anyone that has any doubts as to the Accuracy and validity of the information provided below feel free to check it out with any competent financial advisor. I feel totally confident that my analysis will withstand any serious security.Im am speaking about exchange traded funds and closed end funds from the perspective of a citizen of the united states. The following may not apply to investors worldwide.Their are now over fifty single country funds available and maybe over 100 narrow sectors like airlines steel solar so why the concern for the nasdaq or the standard and poor five hunderd each one of these countries and sectors is a index of and by itself The solar exchange traded fund {TAN} is now down 90% from its high in 2007. If I were a investor or trader I would simply look for any exchange traded fund or closed end fund that does not use any leverage in their porfolios and start buying in the ratio of 0.50 percent of your cash on hand in my account after their is a 75% decline from its all time high and than buy twice as much in the ratio of 1.00 percent of your cash on hand in my account if that exchange traded fund or closed end fund declines another five percent an 80% decline from its all time high buy twice as much in the ratio of 2.00 percent of your cash on hand in my account at a 85% decline from its all time high buy twice as much in the ratio of 4.00 percent of your cash on hand in my account at a 90% decline from its all time high and finally buy twice as much in the ratio of 8.00 percent of your cash on hand in my account at a 95% decline from its all time high. Now I know that some of these funds will not decline 90% from their all time highs. Another thing that you might be wondering about I would run out of money. If I followed that method right wrong example take one hundred thousand dollars. Example Buy 500 dollars of xyz fund at 25 dollars off 75% from its all time high of 100 dollars buy 1000 dollars of xyz at 20 dollars off 80% from its all time high of 100 dollars. Buy 2000 dollars of xyz at 15 dollars off 85% from its all time high of 100 dollars Buy 4000 dollars of xyz at 10 dollars off 90% from its all time high and finally Buy 8000 dollars of xyz at 5 dollars off 95% from its all time high This way you will have your biggest positions in the funds that have declined the most and the smallest positions in the funds that have declined the least. Also keep in mind that if your cash position in your account is say one hundred thousand dollars to start this will gradually decrease as the equity portion of your portfolio increases. Example If your cash position is fifty thousand dollars of your one hundred thousand dollar portfolio you would invest one half of one percent to start which would be two hundred and fifty dollars. Also keep in mind when you buy an exchange traded fund you are buying a basket of stocks so the fund cannot go to zero unlike a stock. Than when any fund has regained three quarters of its value that would be say fund XYZ which traded at 100 dollars five years ago. It now trades at 75 dollars in the case of XYZ. Now you would use a 10% trailing stop loss to protect your gains. So if XYZ declines to 67.50 from 75.00 you would be stoped out insuring that you retain most of your gains. If XYZ continues to rally without correcting by 10% Who knows you may sell out of the stock within 90% of its all time high. Its all time high could be 150 dollars..And their you have it a simple but brilliant strategy for exchange traded fund and closed end fund investing.

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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