Tuesday, January 24, 2012


               Waiting For Your Account Since Before You Were Born

Making money from a free trade is easy; I could put a chimp in charge of that and he would probably do a fine job. After all, by its very definition, you’re up money and have no capital at risk in the trade. But alas, not every trade finds itself in a profit position that allows you to adopt the “free trade” scenario.

I used to live next to a surgeon and in the summer we used to barbecue steaks and stuff a couple of times a month. I enjoyed his intelligent company and dry wit. What I found interesting was his attitude towards medicine; he hated medicine and always wanted me to teach him how to trade.

“Ohhhh vegas man, you got it made in the shade; medicine? Agghhhhhhh !! Medicine is boring stuff. Always the same crap day after day. You on the other hand are living the dream. C’mon man, teach me to trade!!”

He used to tell me how boring medicine was, and that with a few weeks training I could do 99% of what he did.

“Errrrr, what about the other 1% of the time?”

“Well yea, that’s why you go to medical school for 4 years, do a residency for 4 years, then apprentice a specialty and take AMA Board Exams for another 4 years; to handle the 1% that would otherwise DIE.”

“Maybe I get 1 case every couple of years that fall into that category, but day-in-day-out it’s a grind; boring assembly line medicine stuff. YOU on the other hand; in there swinging toe-to-toe with the big guys doing all that James Bond financial stuff; yea, that’s where the real action is. Vegas man, you got it made.”

I wonder how many people would think that what he does is “boring”?

Back in the day when I started trading, old timers would “take stock” of young traders and determine rather quickly if they had what it took to even get their attention. Slowly, they would impart life’s lessons on you in ways that if you didn’t remember it for the rest of your life, you were and are a trading idiot.

“We aren’t traders!! We are Professional Cannonball Dodgers. Each and every day, we stand in here and dodge bullets and cannon fire that can tear our account into shreds.”

Anybody can read a book on trading; anybody can look at a chart; anybody can say “up or down”; in short, anybody can do this. But not everybody can dodge cannon fire or know what to look for when actual trading starts. And that mi amigos is the heart of the nut.

In a low volatility environment, if you start to lose money, there simply is no way to win it back. Volatility is the lifeblood of a trader; it allows us the capacity to get what we want in the shortest time possible due to the clueless trading activity of others.

Every algorithm man can dream has at least 1 weakness; every single one without exception. Add however many millions of lines of code you want for “special circumstances” or your bias. The problem most traders find themselves in is that IN FACT their trading algorithm has MORE THAN 1 weakness and they aren’t aware of it.

“Hi losses, it’s very NOT nice to meet you. Don’t go away mad, just go away, OK?”

What do I do for a living?

“That’s easyyyyyyyyyy; I’m a Professional Cannonball Dodger.”

Have a good day everyone!


P.S. Don’t forget to catch my comments on today’s trading at my PAMM website:

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