Meet Mr. Analyst Trader
I want to expand my thoughts from yesterday’s post and accomplish 2 very important goals as it relates to trading as a professional; 1) convince newbie traders that you are indeed blessed because you don’t know anything yet and therefore have no bad trading habits for me to break, and 2) try and convince veteran traders that the reason for failure in trading is precisely because intelligence and intuition is working against you and not for you.
What is a “trading professional”?
[And no, I’m not being rhetorical here. Before proceeding past this paragraph, think for a minute on what has to happen before you can call yourself a “professional” trader.]
Well obviously, he/she has to be successful at making money from trading [taking positions] a market so that they don’t need [or want] an additional income from other sources. If you can do this, why would you want to do anything else?
Who are some of the members of the “Wizards-of-Smart” group that are definitely not professional traders? Some of my favorites:
1) People who lose money consistently and are back in the “pudding business”,
2) Corporate hacks [analysts] who appear on Biz TV talking their positions,
3) University professors who teach investment finance, and last but not least,
4) Doctors & Lawyers who trade and provide the market with money.
Brains [intelligence or thinking] will cost you money!!
I will never forget one day coming off the trading floor, after an extremely wild trading day in S&P futures, where just outside the entrance to the trading floor were a ton of newspaper journalists and TV business reporters. A lady reporter from the prestigious Wall Street Journal collared me first and asked for an interview. OK lady shoot!
WSJ: “Wow, a crazy trading day; first off how did you do?”
Me: “I made money.”
WSJ: Gosh, that’s amazing. How’d you do that with all this volatility?”
Me: “Have a plan and stick to it.”
WSJ: “What’s it like being in there [the pit] doing battle each and every day with the brightest financial minds in the business and trying to make money?”
Me: “Whaaaa? Are you serious?”
WSJ: “Yes, I mean it must be on the one hand tremendously gratifying to make money, but on the other hand a little nerve racking knowing they might have you over a barrel that could cost you a lot of money?”
Me: “Are you going to print this? I’m going to give you a little secret, a real scoop if you will, that nobody has probably told you.”
WSJ: “Yes, I go to print in 2 hours for tomorrow’s national edition. Our interview will be in there. That would be great, please tell me!!”
Me: “Most of these guys couldn’t operate a hot dog stand they are so stupid. Half of them won’t be here next month because they have no idea what the game is about. If you took the total collective IQ of the entire pit [about 400 people] you might get to a 1,000 but I doubt it. Greatest financial minds? Most don’t know the difference between livestock and preferred stock. For those with a plan it’s easy pickings! Now, go print that because I am dead serious!!
And with that, I walked off onto the elevator taking me up to the 17th floor where my office was.
Next day in the national edition of the WSJ there was no article with my interview.
Calling Jack Nicholson
Normal people [the wise, college educated, investment elites who have money to trade or invest] don’t want to hear the truth. They don’t want to know how Goober made a million bucks trading cotton, coffee, FX, or oil because it is an insult to everything in their life that they believe. They want and demand the fantasy.
I’m Sophisticated & Elite: I’m Also Poor
I Graduated 6th Grade; I followed Directions & I’m Rich
Goober may not be the brightest bulb in the closet, but he can follow directions and stay disciplined; can you?
You don’t have to be there for every move the market makes; you physically can’t be there 24/5. There will be times every week where you will miss something. So what? Deal with it like water off a duck’s back and move on; opportunity is infinite! Stay within the confines of the algorithm and trade accordingly.
The entire logic and premise of the algo is that during the week any particular market will move; and the algo is there to catch it.
For you unconvinced souls, I suggest you open 2 demo accounts; the first you trade solely with the algorithm and follow its rules, the second you trade according to your “brains”. At the end of the month add it up; I’m betting you aren’t going to like what you see.
Right now, the only thing holding you back from the financial life you want is a delusional belief that you can "out-smart" or "out-think" a market and that you are smarter and more brilliant than the algorithm. When you finally give up and admit the truth, you will be ready to start making some serious money.
Have a great day everyone, and for those that need additional help, please write me at firstname.lastname@example.org and I will respond as soon as I can.