What a dull week it was in the market last week. Nothing was going on. Just lifeless, low volume mid-summer trading days. Zzzzzzzzzzz…………………!!!!!!!!!!!!!
By Thursday I was going out of my head with boredom so I decided to do something a bit different in my pre-market trading routine on Friday. First I switched my regular desk out for one of those semi-circle tables with the green felt, and then I invited some people to sit around it with me.
Howie and Loraine, a nice young newlywed couple from New Jersey. Phil, a nineteen year old kid with a fake ID. Estelle and Hazel, two sweet seniors citizen ladies from Florida. And lastly Hiromi, a guy from Japan who says he is in the Yakuza.
To top it off, I hired an ex-stripper named “Bambi” to come by and offer us all free drinks every 30 minutes while wearing a sexy Roman toga.
We all smoked and drank, and told each other interesting stories and anecdotes while I traded. When I made a profit on a trade, with my table’s encouragement, I “doubled down” on the next trade. When I was losing I just “let it ride.”
Unfortunately, by the time the market closed I had lost about 90% of my account value and will soon be applying for a job on the night shift at IKEA, but I did have a lot of FUN.
When you go to Vegas, the two best games to play in terms of odds are blackjack and craps. But here’s the problem, that is assuming you play perfect strategy on each hand or roll of the dice.
In blackjack it’s as easy as following along with the basic strategy cards that are sold in every gift shop down the strip. The dealers up card is a seven and you have twelve, just go down the columns and find your answer. Hit..!!! It’s as simple as that. Lather, rinse, fall asleep.
In craps it’s just as boring. You have to limit yourself to the Pass/Don’t Pass line and have to take the “Free Odds” allowed by the casino. If you find a table with 10x odds you can reduce the effective house advantage to .184%.
But who wants to do that? When I am playing blackjack, I want to have FUN. I want to be getting loaded, while smoking a cigar, and wrapping my arms around two ladies from Olympic Gardens (before I was married of course).
In craps I’m throwing out “yo’s,” “hard ways,” and “horn bets”. I want to be at the action table. The “live” game. The one everybody else in the casino is looking at saying “boy, I wish I was over there with that tall good-looking guy.”
That’s what Vegas is about; having fun, not winning. If you win money it’s a bonus. Consider yourself lucky, tip big, buy your friends a nice dinner, and bring something nice home for your wife, like a dice clock.
Making money in the markets is enjoyable, but the process of doing that is not necessarily “fun.” A lot of times it is boring. Often it is frustrating. And at other times it can be aggravating.
If you don’t know what you are doing, having “fun” in the markets can be very dangerous because it is almost impossible to have “fun” without emotion; and emotion in the market kills.
Some of the biggest losses I have ever had were when I was having the most fun in the markets. I remember traders going into 2008 that were having a blast. I would see them in the chat rooms every day throwing out big bets on this stock or that stock, and for a while they were “crushing it” and were the life of the party. But when that party ended they blew out. Fun is not a methodology.
And believe me, you don’t want to be that person who the fun ends for. Hell, you don’t even want to be around that person when the fun ends.
In my early twenties I went with a group of buddies to Vegas for what was maybe the second or third time in my life. I was barely adept at playing blackjack at that point and was totally intimidated by the non-stop action and colloquialisms of craps, but my more “seasoned” gambling pal convinced me that I should give it a shot.
Bolstered with barley-and-hop based courage I sidled up to the rail. I watch my friend play for a bit and started to get the rythmn of the game down. Before too long all my other friends and I were ringed around the table, drink and betting.
I would basically parrot what my friend was doing. He look so experienced, so worldly, and man was he having fun.
“Give me the yo-eleven,” he would shout while simultaneously tossing a $5 chip towards the stickman. “Yeah, I’ll take the ‘yalenven’ too,” I would say.
“…and give me the ‘hard four and eight’ and ‘four on the field’ boxman,” he continued. “Yeah, ‘the field’,” I echoed.
This was great. Chips were flying, the booze was flowing, and we were making money. The table had a vibe to it, a palpable energy that seemed to lift it and its players off the ground, levitating us just above the cigarette stained carpet.
We were the table everybody else wanted to be at, were having a great time, and my buddy was having the most fun of all.
Then it all went bad. Real bad.
As I went to take a swig of my beer, my friend grabbed two $10 chips and gave them a sideways toss towards the felt as if throwing the keys of a Maybach to a valet. He then uttered the fatal words….
“Twenty dollars on ‘skinny-red’.”
The boxman looked puzzled for a moment and said “what do you want this on?” My friend, looking nonplussed, repeated “skinny-red.”
“I’ve never heard of skinny-red,” the boxman replied.
“What, you’ve never heard of skinny-red,” my friend asked with a smarmy air.
At this point the boxman looked at the stickman and asked incredulously, “Dave, have you ever heard the term ‘skinny-red’ before”, knowing the answer before he asked it.
“No John, can’t say that I have,” came the reply.
Most of the other players had laid down their bets by now and were ready to get on with the next roll to keep the table’s mojo going. Even as a newbie to the game I knew my friend was treading on thin ice here. I gave him the “why don’t you just tell them the goddamn number you want” glance, but he looked right through me.
“I can’t believe you have never heard of ‘skinny-red’ before,” he said while taking a sip from his drink and pretending he still looked cool.
The stickman now motioned to the pit boss. “Hey Max, have you ever heard the term ‘skinny-red’ before?”
“You know, I have been in the business for twenty-five years, and I have NEVER heard that term before,” the pit boss replied.
I’ve written before about the “second mistake theory.” My friend had already made a mistake by pushing this issue instead of just saying the fucking number he wanted, and I was now praying that he wasn’t going to make the second mistake. My prayers were not answered.
“What….that’s what they call ‘twelve’ in Hawaii,” he blustered.
You ever hear that screeching sound a car makes when it hits the brakes suddenly, bringing itself to a dead stop? I swear I heard that sound right at that moment.
What had just moments before been a lively, energetic, fun table was now a morgue, complete with a dozen sets of angry zombie eyes staring right at my buddy, as well as the rest of us.
“Really….I didn’t know they had gambling in Hawaii,” the pit boss said looking straight at us with not a trace of humor.
My friends and I, in order not to lose face, stayed at the table, pushed our luck, and eventually “sevened out,” losing all the money we had made. We did have “fun” though…..at least for a while.
As a trader your goal should not be to have “fun” but to trade as stress free as possible, using a methodology that removes emotion, and keeps you leveled.
Save the fun for spending the money that you make from consistently dull and boring trading.