Yesterday I was fortunate enough to be a guest on Winning On Wall Street again and I spoke with host Marc Mandel about trading and the markets.
Thanks again for having me guys.
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What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in). Why not subscribe for free Via E-mail or Via RSS and follow me on StockTwits and Twitter.
The number one question I get asked by readers of my blog is “how can I become a better trader?” My answer is usually “find a mentor.” What I am going to show you in this post is how to find that person using StockTwits (and how that process in itself can make you a better trader).
How does a mentor make you a better trader? Think of it this way, if you are trying to get better at golf, there are a number of different things that you can do to improve your game. Problem is, you may not know what those things are, nor where to start, or how to implement them.
If you had a teacher/mentor who could cut out the superfluous and focus you more on what’s important, your learning curve would shorten drastically. Having a mentor will make you a better trader, and the process of finding a mentor will also make you a better trader as well.
A few quick codicils first…
What is a mentor?
Unless you are a new hire in the trading department at Goldman Sachs or your uncle is Paul Tudor Jones, you are going to have to redefine what you consider a “mentor” to be. Having a veteran trader sit down with you and walk you through his collected knowledge while sipping brandy by the fireplace is not going to happen.
We live in a different time where the one on one mentor/protégé relationship rarely exists in that form. If you have it, consider yourself extremely lucky. However the rest of us can still use the power of social media to find someone who is a guide. Someone with experience in trading that you can have a two-way interaction with on a semi-regular basis. And in fact, it doesn’t even matter if your “mentor” actually knows they are being a mentor.
This is the context in which I use the term “mentor.”
Reasonable expectations.
There is no substitute for time and experience, and I am not saying that you will all of a sudden be able to quit your job and trade for a living after completing this process. What I am saying is that if you do follow this process, whether novice, intermediate, or experienced trader, you will be a better trader by the time you are finished. And you may come away with not only a mentor, but a friend as well.
Time frame.
Is 30 days really enough time to find a mentor and/or make you a better trader? The optimal way to do this would be to expand each 1-week phase to a couple of weeks, or a month, and if you have the time and patience, I recommend it. However, I think if this process is done in a focused and methodical way and if you put in enough hours working at it every day, 30 days is enough time to make an impact.
So don’t be in a rush to go through this process. You may be tempted to cut the time frames down, but don’t. Take your time and do this right. I would also suggest, especially if you are a beginning trader, that you don’t trade during the first three-week time period. Focus on this project solely during that time in order to get the most out of it. You have the rest of your life to crush the markets.
Week 1 – Watch, Filter, and Follow
Your goal in the first week is to find 7-10 candidates on StockTwits that you would like as potential mentors. There are a number of ways you can find them.
You also want to filter by asset class. If you trade exclusively Forex, at least for this process, try to focus only on the currency streams. Same goes if you trade exclusively options, futures, or equities.
You could even refine the process more. If you only stick to trading big cap tech stocks, monitor the streams of companies like Apple ($AAPL), Google ($GOOG), and the like to see who the “axe” is in those type of names.
These are just suggestions for the filtering process; the point is, use whatever method you prefer to cull some top candidates.
This first week is the most critical, and once again a reminder of why you want to use the full-time period to find candidates. You want to find someone who not only knows what they are doing, but has the right tone and temperament to be a mentor, and you will need as much time as possible in order to get the best “feel” for those people.
Once you have your candidates selected, if you are not already, make sure to follow them.
Week 2 – Analyze
This week is all about analyzing the 7-10 mentor candidates that came out of the first week’s filtering process.
If you are able to be at your computer during the trading day, then you can analyze them in real-time, however, this is not crucial. If you have a day job and can only do your analysis at night, it will work just as well.
By clicking on the name of a candidate you will see their specific stream with all the messages they put out during the day, each with a timestamp.
Start with the first message of the day and follow along with what that user does during the course of the day. Look at what type of information are they giving out. It is timely? Is it insightful? Does it add value? Is it the type of information that fits in your trading style?
If someone is sending out messages about fundamental analysis and macroeconomic trends, even though they may be a quality follow, if you are day trading, they probably won’t work as a mentor for you.
If they are calling out live trade entries and exits, match them up with charts from the day. Look at the style of trading they are doing. Are they entering on a breakout or pullback? Are they exiting at chart based targets or loss of a trendline?
The list of things to examine is endless, but the ultimate goal again is to see if their style fits with yours. If you are more comfortable with swing trading, it won’t do you any good to have a scalper as a mentor.
If they have a blog put it into a reader and then go back through a few months worth of posts to find out what they are all about.
You are looking to find users that have a compatible style, a methodological approach, and are profitable.
(One note on this: even the best trader can have a losing month, let alone a losing week, so makes sure that the user you are analyzing is at least using good risk/reward techniques. If they are a net loser during this week, but obeyed their risk criteria, this should not automatically rule them out as a candidate).
And if you are worried that some of the people you are considering may not actually be trading, read my post “When You Catch Somebody Faking It.”
You also want to take into account if they are already interacting with people and if so, how they do it. The best trader in the world can’t be a good mentor if he communicates with people badly. Throw those users out as potential candidates, as well as any whose style doesn’t fit yours.
Week 3 – Ask and Interact
Now that you have refined your candidate list down even more, it’s time to “break the ice” and interact with them. Let me expand on this a bit.
It is important to emphasize that StockTwits is a free service and the people who post on it do not charge a fee. Some of them are also full-time traders, meaning that trading is only way they make their living. Even if they are not full-time trader, people have lives outside of trading, and may have limited time to respond to every tweet addressed to them.
So to best improve your chances of a reply when reaching out to a user;
You are looking for a relationship, not a one night stand, and you have to remember that you are trying to interact with someone and benefit from their knowledge; knowledge that may have taken them 10 or 20 years to learn trading through the school of hard knocks.
That knowledge is like gold to a trader and they are under no obligation to share it. The way you make initial contact will set the tone going forward, so here are some examples of how best to do it.
Ask a question about a successful trade they made.
“That was a nice trade on $BIDU. Can I ask how you determined the entry?”
If you see a something of value that they tweeted, retweet it with a comment.
“Finally it makes sense to me. Thanks for the insight! RT@bclund - How To Explain Short Selling To Your Mother“
Or bring some value to them.
“@bclund I saw you said Steve Cohen was your favorite trader. Here’s a cool article he wrote http://bit.ly/HXKmsP”
The best thing you can do is just be “real” and approach them in an honest and sincere way; like you would anyone you wanted to start a relationship with.
After the first two weeks, you should have a pretty good idea as to who is more open to continued interaction. But if somebody is not interested in communicating don’t be upset or bitter, just let it go, and move on. Being a mentor is not for everyone.
Week 4 – Implement
At this point, if you have done this process right, you should have found at least one person that you can call a nascent mentor. Now it’s time to put what you have learned through this process into action.
The purpose of this week is to take the applicable parts of what you have learned and incorporate them into your trading, NOT TO COPY YOUR MENTORS TRADES OR METHODOLOGY.
If you have never traded before, this is the week to begin. Start by using very small positions and to try to craft a trading methodology using your mentor’s trading as a guide. Do not paper trade! You can read why in “Thoughts On Paper Trading.”
If you are an intermediate or experienced trader, you will take this week to refine your trading methodology with some of the ideas and techniques you have gleaned, once again, using positions that are smaller than your normal size.
Assuming that week 3 went well, this is where you will also want to give your mentor some (positive) feedback about how what you have learned from them is working out.
Review break.
Yes, I know that four weeks is only 28 days, and that is why you will spend the last two days of this process reviewing everything that you have done from day one. You will hopefully have a sense of accomplishment, not only in what you achieved towards bettering yourself as a trader, but also in actively starting the process of engaging with your mentor (or mentors).
Continuing the process.
As you may have guessed, this is the just the beginning of an ongoing process. From here your goal is to continue to engage your mentor, broaden your interaction, and improve your trading.
You should continually be on the lookout for quality traders on the streams, and when you find them, repeat the process that got you your first mentors. Before you know it, you will have a group of people who can both passively and actively help you to become a better trader.
Then at some point the process reverses itself and you may find yourself in the role of potential mentor. If that happens, do whatever you can to help those that were once in your shoes. Post into the streams, write a trading blog, suggest quality follows to others, or if you think you are up to it, mentor somebody who needs the help.
…and don’t forget to subscribe to a quality blog about the markets, trading, and life. By the way, what bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in). Subscribe for free Via E-mail or Via RSS and follow me on StockTwits and Twitter.
Today’s guest post is by Tom Morton. Tom started his career at the Chicago Mercantile Exchange in 1996, working in the Eurodollar futures pit, then moving to the Nasdaq 100 pit in 1998. In 1999, Tom left the floor and began building a successful career trading individual equities. He is the co-founder of The Equities Room.
Its been awhile since we’ve seen markets like we’ve seen this week.. About 4 ½ months to be exact. If you are like me, it was easy to get used to the smooth trending upward bull trend we saw from December through last week. Unfortunately, the action this week has looked and felt quite a bit different.
Here is what this week has felt like using sports analogies:
-Seeing a curveball pitcher come in after facing nothing but fastballs.
-Playing a fancy golf course after months of getting used to the local muni.
-Going from the no-checking over-40 league to the full contact hockey league.
-Playing in a full court officiated basketball league with your nephew after months of playing half-court church league basketball against your uncles.
-Skiing down the icy black diamond after spending all your time on groomed blue runs.
I could go on, but you get the idea.
The low volume, low-volatility rise was occasionally frustrating, but most often gentle (for the bulls, of course) and predictable. Seeing the price action today and yesterday, its easy to get the feeling that things just got a bit tougher out there.
Frankly, I don’t have the faintest idea if we’re going right back to highs, or if we are headed toward October lows. I do know that there will be a lot of noise from a lot of pundits out there pounding the table in both directions.
I am no longer a confident bull, I’m not necessarily a bear, and I’m thinking its a good time to make the adjustment to less trades with less size in the near term…at least until we get a feel for whether this correction will be a quick, price-based one, or a longer, time-based one. I know which one I’m hoping for. I like my muni course.
Follow Tom and The Equities Room On StockTwits.
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What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in). Don’t forget to subscribe for free Via E-mail or Via RSS and follow me on StockTwits and Twitter.
Most people don’t know that Tiger Woods’ name is actually “Eldrick.” Eldrick Tont Woods to be exact. We all have just been calling him by his nickname, Tiger. His other nicknames include; El Tigre. The Woodster. The “T” Wood. Wood-a-licious. And in certain gentleman’s club’s in the South Florida area, “The Big Wood.”
After his performance during the last few years his nickname though should probably be “Chernobyl.”
Unless you are really into practicing Schadenfreude, watching Tiger Woods melt down in the Masters over the weekend was pretty painful.
Here you have perhaps the greatest player ever to walk the links; so dominant at one point in his career that major championship sites like Augusta National actually began “Tiger-proofing” their courses by adding yardage to their tees in order to slow him down. And now he is turning into the butt of too many jokes to mention.
As a trader, the take away from watching Woods implode is to understand that trading, just like golf, is mostly mental.
[Note from Brian's inner dialogue:
Really Brian? That is the brilliant conclusion you came up with for this post? That trading is a mental game? Great, maybe next you will tell us that water is wet and the sky is blue. If people wanted simplistic crap like that they could read any of a hundred other blogs or Alexander Elder's books. You better friggin' dazzle us with something else here pretty quick.]
Okay, I get it. Saying that Tiger is off his mental game is obvious, and the comparison to trading too easy. But what isn’t so easy to understand is exactly why Tiger cracked.
This is a guy who was on national TV hitting golf balls at age two with Bob Hope. A guy whose father drilled golf into him throughout his youth with the intensity of the Green Beret he was. Yet that didn’t crack Tiger.
He played for Stanford and at age 20 became the first golfer to win three consecutive amateur titles, but nothing in that process phased him one bit.
He went pro, signed massive endorsement deals, was covered by every major sports outlet, and became the fasted golfer ever to reach the #1 ranking, and yet his game never faltered.
He went up against the legends of golf and proceeded to destroy them and the courses he played on. Along the way he got married, which could mess up anybody’s head, but not Tiger’s. Having two kids was a drop in the mental bucket for him. And even while banging every stripper and porn star he could get his hands on, his mastery of the game never lapsed.
And then one night his wife found out about his affairs, and his game has never been the same. But I don’t think it is because his wife found out about the affairs, I think that it is because of the publicity, that the world found out that Tiger Woods was out of control.
Tiger Woods bought his own press. He believed in his own infallibility; not just on the golf course, but in life. And having the public know that he was not 100% in control at all times was more than he could bear, and he snapped.
If only he had learned from Kevin Costner’s character in the seminal golf move “Tin Cup.”
Roy ‘Tin Cup’ McAvoy: The critical opening phrase of this poem will always be the grip. Which the hands unite to form a single unit by the simple overlap of the little finger. Lowly and slowly the clubhead is led back. Pulled into position not by the hands, but by the body which turns away from the target shifting weight to the right side without shifting balance. Tempo is everything; perfection unobtainable as the body coils down at the top of the swing. Theres a slight hesitation. A little nod to the gods.
Dr. Molly Griswold: A, a nod to the gods?
Roy ‘Tin Cup’ McAvoy: Yeah, to the gods. That he is fallible. That perfection is unobtainable. And now the weight begins shifting back to the left pulled by the powers inside the earth. It’s alive, this swing! A living sculpture and down through contact, always down, striking the ball crisply, with character. A tuning fork goes off in your heart and your balls. Such a pure feeling is the well-struck golf shot. Now the follow through to finish. Always on line. The reverse C of the Golden Bear! The steel workers’ power and brawn of Carl Sandburg’s. Arnold Palmer!
A nod to the gods. A surrendering of ones ego in admission that we are fallible and perfection unobtainable. Tiger’s failure to understand, acknowledge, and accept that concept is what wrapped him so tight, that when the illusion was shattered, his game collapsed and may never recover.
The goal in trading is to make money, not to be a perfect trader. The real take away from watching Tiger Woods is to learn that in the markets, just like in life, ego kills. Pridefulness kills. Vanity kills. Self-importance kills. Self-delusion kills.
As traders we lose on trades. We sell to soon. We miss an entry. We top tick a move. And we have losing streaks. We are the definition of fallible; every one of us. And thinking otherwise is the kiss of death.
What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in). Don’t forget to subscribe for free Via E-mail or Via RSS and follow me on StockTwits and Twitter.
I’ve had a number of new traders over the last few months ask me what tips I can give them, so I thought I would take the opportunity here on Easter to both answer them and be blasphemous. These are by no means the only “commandments” of trading, and if you have some suggestions, please feel free to list them in the comments section.
Know yourself- Understand what style fits your personality. Can you hold a position for a few days or only a few hours? Are you okay with larger draw downs or can you only take small ones? Are you more comfortable trading pullbacks or breakouts? Most importantly, don’t try to use a style that doesn’t “fit” your personality.
Educate yourself – But don’t over educate yourself or fall into the trap of reading to many biographical trading books. They may be entertaining, but you will learn little about the current state of trading. Stick to my ”Holy Trinity” of books “How To Make Money In Stocks” by O’Neil, “The Disciplined Trader” by Mark Douglas, and “The StockTwits Edge” by Howard Lindzon. The rest you can learn from online trading communities and blogs.
Find a mentor – It’s never been easier to find a mentor, even if it is a virtual one. I can’t emphasize how crucial this is because being able to interact with a seasoned trader on a regular basis will shorten your learning curve like nothing else. And don’t be averse to using a paid mentor via a trading service. The $50-$100 bucks a month you will pay may save you thousands.
Develop a methodology – Analyzing your trading success by outcome is a dangerous game. If you go to Las Vegas, put your life saving on “red” and win, it was still a bad move, because over time you will eventually hit “black” which will wipe you out. You have to develop a risk based methodology that over time is successful and then evaluate your trading by how well you follow that methodology.
Use the right tools – You don’t need four monitors and a quad-core water-cooled processor to trade stocks. You do need a decent computer, solid broadband connection, and a good broker. As far as I am concerned, there is no need to look past Interactive Brokers. A solid data/charting service is a must as well and my choice is Esignal.
Turn off CNBC – There is absolutely nothing you need from CNBC anymore. Quotes, breaking news, whatever, it can all be found through a thousand other more focused outlets. CNBC is really not for trading news, it is for financial news in general. At least turn the sound down. And of course everything I say about them is 100% wrong if they would like to have me as a guest.
Remove your emotions – Understand that you will lose on more trades than you will win on; that is just part of the game. If you are the type that always has to be “right” you are going to have a hard time becoming a successful trader. The market is perpetual, it continues on no matter what you think about it with no knowledge that you exist.
Cut your losses – It’s pretty simple. You will not make it in the markets if you can’t cut your losses. You have to be confident in yourself as a trader to know there are an infinite amount of opportunities in the markets and that you can capitalize on them. That gives you the ability to let the losers go.
Trade less make more – Be picky about your trade setups and only take the best ones. The goal is to take the least amount of trades needed as over time even the best traders will lose on more trades than they win on.
Only trade liquidity – Illiquid and low float stocks are death unless you are an experienced trader. Trading them is a specific type of style that is hard to learn and even harder to master; stick with stocks that trade at least 1 million shares a day on a 30 day average. Liquidity is not limited to stocks but can apply to markets as a whole. Options expiration, holiday weeks, and lazy summer months often have low liquidity where the mechanics of the markets come into play and make clean trade setups a rarity.
Bonus commandment - What bclund is, is the intersection of markets, trading, and life (with some punk rock, pop culture, and off-beat humor mixed in). Don’t forget to subscribe for free Via E-mail or Via RSS and follow me on StockTwits and Twitter.
Today’s guest post is by Henry Brookins. Henry is a former hedge fund manager with 18 years of trading experience. He is a graduate of the US Naval Academy and holds a dual Masters of Science degree in Meteorology and Physical Oceanography. He is the founder of Stocklooker.
Subscribe to bclund.com Via E-mail or Via RSS and follow me on StockTwits and Twitter.
(Note: If you are new to my blog, I post about all sorts of things. Sometimes it involves something extremely personal, like creating a 30K baby or my Monster Trades. Other times it deals with hot ex-porn stars who trade stocks. And sometimes it’s about how to avoid “suicide”. But a good place to start is The Best of bclund. If you like what you read, please tell a friend. If you don’t, please tell two friends.)
The nice people at SFO Magazine were kind enough to ask me to write an article for them. I have to say that I give them great kudos for trusting me to write a more “journalistic” piece given the fact that my blog is decidedly…well let’s just say…”not journalistic.”
The topic was the world of overnight trading, and if you are on StockTwits, you will recognize some of the names that I interviewed for the article.
Read the full article: The Night Shift – Trading After Hours.
Subscribe to bclund.com Via E-mail or Via RSS and follow me on StockTwits and Twitter.
(Note: If you are new to my blog, I post about all sorts of things. Sometimes it involves something extremely personal, like creating a 30K baby or my Monster Trades. Other times it deals with hot ex-porn stars who trade stocks. And sometimes it’s about how to avoid “suicide”. But a good place to start is The Best of bclund. If you like what you read, please tell a friend. If you don’t, please tell two friends.)
I’d wish you good luck but you wouldn’t know what to do with it if you got it. And to answer your question, pal: why am I here? I came here because Mitch and Murray asked me to, they asked me for a favor. I said, the real favor, follow my advice and fire your fucking ass because a loser is a loser.
- Alec Baldwin in “Glengarry Glen Ross”
I saw something happen in a trading room this past week that gave me mental wood.
This is a popular trading room full of great content and a ton of seasoned traders who communicate via chat. At some point a new member, let’s call her “annoyingtrader,” entered the room. Right off the bat she started complaining that she couldn’t hear the live audio commentary that was going on.
The trader who runs this room politely pointed out where the “live mic” button was, and how the volume slider worked. But that wasn’t working for annoyingtrader and she kept complaining that she couldn’t hear the audio.
At this point a few of the regulars in the room started to join in, trying to guide her in how to get the audio on. But once again, she kept complaining that she wasn’t hearing anything and that “something must be wrong with the chat room controls.”
“Look annoyingtrader, we have 300 traders in this room who are having no problem hearing the audio, so my guess is that you are dealing with user error,” was the still convivial, but increasingly frustrated answer from the lead trader.
I got distracted from the chat stream for a moment at this point, but still had the audio on in the room. Apparently “annoying” was now getting into it with the chat room administrator, berating him repeatedly without any acknowledgement of his efforts to help her.
I then looked back at the chat session and saw the following message;
…The admin has kicked out [annoyingtrader] from the chat room Msg 6349…
At this point the lead trader got on the mic and said roughly this…
“So annoyingtrader could not get with the program here. In addition to that she kept giving the admin crap, and basically we kicked her out of the room, cancelled her membership, and refunded her money. And that’s it…she’s done. Folks, I don’t charge $59.00 a month to make me rich. I have this service because I like interacting with good people and I like building up a community.
Look, I trade serious size in this room and if you think that paying the subscription fee gives you the right to come in here, disrupt everyone in an aggressive way, and then to berate the admin who is just trying to fix something for you that you can’t seem to understand yourself…well then you are wrong.
It is a privilege, not a right to be in this room. You come in here with a good attitude and let people help you, you can ask whatever you want. But you come in here with some kinda of entitlement attitude….well your just not going to last.”
Damn Straight….!!!
I honestly have to say I don’t remember this entitlement attitude being as pervasive in the past as it is today. I supposed technology and social media have caused more people to act like they are owed something. But where it gets really odd is when they complain about content that they are getting 100% free and that is not solicitous.
For example, last week I did a post entitled, “The Greatest Myth About Trading.” It dealt with how the average person thinks that trading is inherently risky, and I laid out the case as to why I thought that was not true.
I received a lot of great feedback from traders on the streams and in the comments section of my blog. But then I got a response that stopped me cold.
via mortongould
trying to benchmark risk is a fool’s game as it’s all relative …I don’t see your point at all….and please, learn to edit as well….now I see why you like altucher..cheers!
I have what I like to call a “dick meter” in my head. It looks like a tachometer, ranging from 1-10, with the dial getting increasingly redder the closer it gets to 10. The meter was now “on” as I re-read this comment, breaking it down to try to get the real meaning.
“Trying to benchmark risk is a fool’s game it’s all relative.”
Okay, so he disagrees with my post; hey that is what an open forum is about. Everybody is free to differ and I never censor comments, even negative ones. Calling it a “fool’s game” bristles a bit because the implication is, that since I was in fact trying to benchmark risk in the post, that I am in essence a fool. Not sure why Mort had to use an ad hominem attack, but no big deal. Dick meter at “2″ or “normal.”
“I don’t see your point at all”
No point at all Mortimer? So in that whole post, even if you didn’t agree with it, you couldn’t a least see the point I was trying to make? Am I that bad at communication or are you just a retard? Hypothetical question of course. Dick meter now “4″ or “slightly intrusive.”
“and please, learn to edit as well.”
Well he does have a point there. I mean my original response to this was going to be, “I know that I am often verbose on this blog, but it is part of my style and character, and people seem to respond to it in a generally positive way.” But instead I’ll just edit it down to “go pound sand Morty!” Now we are spiking up to “6″ and the “annoying” range.
“now I see why you like altucher.”
Where do I go with this? Because I am too verbose, that is why I like James Altucher, who by implication is too verbose as well? Does this mean that if I see the light and follow Mortimer’s rules of blogging, that I can learn to edit, correct the errors of my past, and no longer enjoy that windbag Altucher? Definitely in the red here at an “8″ or “self-entitled.”
“Cheers!”
Okay…sounds good. Fuck you too! ”Full dick” has been achieved as we are maxed at “10″.
Mind you, I no longer sweat “Mortons” as they are only an annoyance, like a fly that you swat away.
They are the guys that constantly bad mouth someone on Twitter instead of just hitting the “unfollow” button. They flit around to blog sites and trading communities that give them info, insight, education, entertainment, and actionable ideas for free; and then shit all over them.
My blog’s tagline has always been “guaranteed to change your life, or your money back,” which I used partly because I thought it was funny and partly as a defensive move to hopefully pre-empt any of the ungrateful on the blogospheres from taking a shot at me.
The tagline is changing soon to better reflect the direction this blog has been going in the last few months, and because I don’t worry about guys like Morton anymore.
Even though I won’t block or erase their comments, it is just so easy now to cut these losers mentally and move on. Or write a post about it.
Subscribe to bclund.com Via E-mail or Via RSS and follow me on StockTwits and Twitter unless your name is Morton.
(Note: If you are new to my blog, I post about all sorts of things. Sometimes it involves something extremely personal, like creating a 30K baby or my Monster Trades. Other times it deals with hot ex-porn stars who trade stocks. And sometimes it’s about how to avoid “suicide”. But a good place to start is The Best of bclund. If you like what you read, please tell a friend. If you don’t, please tell two friends.)
Elementary school can be a brutal place if you are not careful. It’s not so much the possibility of being bullied, shunned, or made fun of as much as it is the fear of being “branded.”
Yes, this is the place where if you didn’t play your cards right, you could end up with a nickname that would scar you for life.
Enjoy your grilled cheese sandwich a little too much at lunch one day, well guess what….your new name is “cheese.” You might as well just get it tattooed on your forehead because it is going to follow you wherever you go for at least the next 20 years.
This nightmare scenario became a reality for a guy I knew named Chris Stevens. To be honest, Chris wasn’t really a friend of mine. In LinkedIn terms he would have been considered a “2nd degree contact,” meaning I was acquainted with him, but really only hung out with him because one of my good friends was friends with him too.
Back in the 70′s they had this weird annual event called the Presidential Fitness Council Test, where elementary school kids would be tested to see how many push-ups, pull-ups, and “line straddles” they could do. Arnold Schwarzenegger was even Chairman of the Council for a while.
The winners in each grade would get a medal and a certificate signed by the President. There were always a couple of pre-pubescent über-athletes at each school that took it seriously, but most of the kids just sleepwalked through the process, doing enough of each exercise to be deemed respectable.
The test started out okay for Chris. He got through the line straddles with a decent score and was able to post a reasonable amount of pull-ups. But it all fell apart at the push-up mat. He did seven. Seven measly push-ups. I still can’t figure it out to this day. He wasn’t a weak or scrawny kid, but for some reason that was all he did…..seven.
I’m not a religious guy, but I will swear on a stack of Pumping Iron DVD’s that I never heard anyone call him “Chris” again after that. He was simply known as “Seven.”
There was no committee meeting to decide it. No decree from on high. Just an instinctual understanding from all those who knew him that this numerical scarlet letter was to be his new and permanent moniker.
The transition through intermediate and high school did nothing to erase its hold. Just like with Norm on Cheers, in any room he walked into, the occupants would simultaneously raise their heads and shout “Seven!” And eventually, in some twisted linguistic derivation, the nickname ultimately just ended up morphing into “Sev!”
Sev was a solid guy, but not too smart and the one thing I remember about him (besides the push-ups), was how on one 4th of July he tried to pull a stunt that would have made the Jackass crew shudder.
We all had few packs of firecrackers, and like any normal young male pyromaniacs we were trying to see what the “coolest” thing we could do with them was. One guy threw some in a hole, another put a few in a tin can, and still another chucked a whole lit pack into the air at once.
Sev thought he could do everybody one better, and decided he was going to light one and drop it in the gas tank of a car. Like I said, Sev was not the brightest guy, and since I am actually writing this post you can infer that his plan did not work out, but it was one of the riskiest things I ever saw anybody do.
Risk is something that most people associate with trading. In fact, to the public at large, you are often likely to get the response, “isn’t that risky,” when you tell them that you trade for a living. However, I think that is one of the biggest myths about trading, and I assert that trading is no more risky than most other jobs.
When I ran my own business, on the first of each month, the moment I woke up I was 60K in the hole. That meant that in order to just “keep the lights on” I had to generate 60K in revenue each month, even before taking a dime out for myself. And every month that I decided to keep my company going, I had to take the risk that I would not meet my nut.
Trading has no operational costs (or very minimal ones), which makes the decision to pursue the endeavor a relatively risk free one.
“Yeah, but where else do you have the possibility of losing more money than you started the day with,” is the lame rebuttal I often hear. Really…? These people obviously have never run a business. If one of my employees damaged a client’s merchandise or backed a truck into a parked car I could easily lose more money than I started the day with.
Trading has no operational risk. No employee is going to hurt his back and jack your workman’s comp rates up. No douche from OSHA is going to unexpectedly show up at your office and tell you that you are not in compliance with a new law passed the previous week and are on the hook for a large fine. And you are not going to have a piece of equipment go south on you that you have to drain your bank account to replace.
But that is only for business owners right? What if you do the “dance” by getting a four-year degree and going to work for a solid blue chip company? Well in some ways that is one of the riskiest things you can do. Now you have turned over the fate of your continued employment to some mid-level management asshats or fair weather board of directors. Take a look at how many people took that “safe” path to corporate security and got tossed out on their ear when the economy imploded in 2008.
Trading has no asshat risk. Nobody will even come into your trading room and tell you that you are being downsized, or that the macrame conglomerate you work for is going out of business after 75 years because the board of directors couldn’t resist getting involved in arbitraging high risk CDO’s.
At the end of the day, trading is one of the rare businesses where ONLY YOU DECIDE THE AMOUNT OF RISK YOU ARE WILLING TO TAKE.
The reason that most people go off the rails and blow their account out is not because there is any outsized risk associated with trading, but because the barriers to entry are so low, they are able to jump in feet first without really knowing what they are doing (or they are a seasoned pro who lets their ego get the best of them).
Being a pro football QB is risky. Being a firefighter is risky. Being a jet fighter pilot is risky. But the average Joe can’t just jump into those positions without a shitload of training and without attaining a high level of competency. And thus the risk is less for a Tom Brady, for a fire Captain, and for a Top Gun pilot.
Trading gets a bad rap due to the “Sydney or the bush” portrayal it has received in pop culture and OWS type propaganda. It’s perception has been “Gekkoized.” But in reality it may be one of the safest professions if you do it properly and make the choice to keep your ego in check.
It’s no myth. You can actually subscribe to bclund.com Via E-mail or Via RSS with no risk. Or follow me on StockTwits and Twitter.
(Note: If you are new to my blog, I post about all sorts of things. Sometimes it involves something extremely personal, like creating a 30K baby or my Monster Trades. Other times it deals with hot ex-porn stars who trade stocks. And sometimes it’s about how to avoid “suicide”. But a good place to start is The Best of bclund. If you like what you read, please tell a friend. If you don’t, please tell two friends.)
Jeff Morse was a dick. Okay, perhaps that is a little bit harsh. Jeff Morse was a “corporate dick.” The type that buys moderately priced brown suits from Men’s Warehouse by the baker’s dozen. He was everything a young, pseudo-nonconformist like myself hated, and now I had to spend an hour listening to him drone on like a second-hand air-conditioner.
It was “orientation” day at the Sheraton Newport, and all new hires, of which I was one, had to attend this mandatory meeting designed make sure you knew which side of your shirt to wear your name tag, as well as other critical information contained in the revered employee manifesto.
This was the type of day that Morse got off on. He loved nothing more than to break the spirit of each batch of new recruits; crushing any sense of individuality they possessed, and replacing it with the distilled teachings of his beloved Sheraton Corporation. He had the ability to create new batches of “group think” automatons in a way so ruthlessly efficient it would have made Mao proud.
I was hired as a “bellman” which though technically pretty low down on the food chain, could, if worked correctly, be a powerful position due to the freedom of movement and ability to interact with guests it allowed. Unfortunately, at that time I had no “game,” no “hustle,” and definitely no “flow.”
I was forced, at least until I got up to speed, to toe the line and follow all the paternalistic rules Morse was laying down. And the rule he was bleating on about at the moment made my stomach churn…..
All employees at the Sheraton Newport are required to meet a guest’s eyes, smile, and say “hello” in a strong but warm voice, before the guest does. I never want to see an employee in this hotel pass by a guest without looking them in the eye and greeting them first. If I see that, it is grounds for a write up.
The “dick meter” was going off the charts in my head. Smile and say hello to somebody I don’t even know? First off, I never smiled; I scowled or better yet, sneered. That was much more “punk rock” than smiling.
Sid Vicious – One of the greatest punk rock “sneerers” ever.
But what could I do? I needed this job, so I had to follow the rules until I could figure out a way around them.
It was hard at first, very hard. Each time I saw a guest coming down the hall towards me my body would start to go into an involuntary spasm. Greeting them a la Jeff Morse’s insisted upon way went against every instinct in my being, so much so that it physically hurt when the corners of my mouth started to turn up and the whites of my teeth began to show.
“Hello” would then somehow emerge from my mouth with the same enthusiasm you get from a cat when dragging it towards a bath.
I continued on in this way like the good worker bee Morse wanted, consoling my inner rebel by learning how to “appropriate” beers from the lobby bar, stashing them in various refrigerated vending machines, and then drinking them on night shifts while watching “spank-travision” in vacant guest rooms.
Then something strange happened. I began to actually greet customers without thinking about it. Not only that but I would then find myself walking out in public or at the mall and just greeting strangers with a warm smile and a loud “hello.” It got to the point that my then girlfriend would freak out on me when I did.
“Who was that girl?” she would scream.
“What girl?” I would honestly reply.
“That girl right back there with the mini skirt on.”
“Hey, I have no friggin’ idea who she is.”
“Oh, don’t give me that. You just smiled at her and gave her a big ‘Hello!’”
“I did? I didn’t even realize it.”
And I didn’t. At some point, after forcing myself time and time again to do the “corporate shuffle” and greet all those guests, the process became internalized and automatic. I didn’t think about it anymore, I just did it. Nor did I have any negative emotions attached to the act; I just did it and moved on without a thought.
It was an extremely important lesson in my young life; that not everything you should do, have to do, or is beneficial for you to do comes naturally.
The same goes for stopping out a losing position in the market. Most traders don’t like to take losses; it doesn’t come naturally and often it is very hard, and sometimes painful to do. The problem is that there is not a universal “dick” like Jeff Morse standing over your shoulder, forcing you to do what is ultimately best for you.
Each trader has to find what method works for them. What trick or device they can employee to get them in the mindset of taking their losses. But If you do this on a consistent basis, even if it seems forced in the beginning, eventually your ability to put your stops in and take your losses will become internalized. You will be able to act automatically, with no negative emotions attached, and can move on to the next trade without a thought.
Ultimately my time at the Sheraton Newport was one of the best and most interesting of my life. It is where I met one of my life-long best friends. Where I fell in love for the first time (with a girl who then ripped my heart out and fed it through a meat grinder…..but I’m not bitter). And where I learned that even a “punk rocker” can learn something from a “corporate dick.”
You would never catch Jeff Morse subscribing to bclund.com Via E-mail or Via RSS, which is exactly why you should.
(Note: If you are new to my blog, I post about all sorts of things. Sometimes it involves something extremely personal, like creating a 30K baby or my Monster Trades. Other times it deals with hot ex-porn stars who trade stocks. And sometimes it’s about how to avoid “suicide”. But a good place to start is The Best of bclund. If you like what you read, please tell a friend. If you don’t, please tell two friends.)
