“What are you willing to do to defend your faith?”
Well, my post yesterday unleashed a shit-storm of emails to my inbox; when I got back from the beach and eventually turned my laptop on, I had quite a few comments. Basically, they fell into 2 camps; 1) I should have some kind of live feed on you tube or some other app, so that traders could log in and see me trading and ask questions about trades, etc., and 2) yea, it’s easy for you cuz you got it easy while I’m out here struggling.
I can answer both camps with one response.
“Ultimate success in trading boils down to one key factor; ‘can you in fact have faith and follow your method or algorithm’? I’ve stated repeatedly, it is one of the hardest things you will ever have to come to grips with because it is impossible to ‘stop thinking’ while you are trading; but in essence it is what you have to do, especially on trade entry. Success each day isn’t measured by money; it is measured by how well you followed the algorithm.
When we separate ourselves from individual trades, and step back away from the marketplace and analyze what it is our priorities are in trading and how best to meet them, only then can you/me/somebody else develop a comprehensive plan called an ‘algorithm’ that must be followed if you want what you say you want.
The problem, of course, is that we are humans and we ‘think’, and it is not at all natural for us to place our livelihood in the hands of an algorithm that is probabilistic in nature; ‘we want to control, we want to decide, we want the power! Sorry, your wishes/wants/desires are not the way the successful trading universe works. Humans erect ‘hurdles’ to deal with conscious and sub-conscious decisions facing them, and I’m here to tell you that both camps that sent me emails [and thank you readers for sending them, I appreciate your comments] have in fact already in their minds eye erected ‘hurdles’ to deal with potential losses from trading via the algorithm; in essence, failure will be my fault either because I didn’t do enough videos, cover enough trades, or it’s my fault you’re not patient enough to build your account properly and you went out and used 100X leverage and did ‘stupid shit’ and now everything is my fault cuz I’m an asshole and I got it ‘easy’!
I have always said ‘life imitates trading; trading imitates life’. So, how far are you willing to go to defend your faith; faith in country, faith in your marriage &family, faith in your job, faith in your Christianity, and finally faith in yourself? You think it’s easy to somehow make the transition from the ‘Pudding Business’, where the illusion of ‘security’ wraps its fuzzy arms around you, to the trading business, where life is as unvarnished, open and brutal as it gets? And suddenly, it hits you; life has boiled down to probabilistic events that you can’t possibly control, and now all of my life’s obligations are dependent upon computer code that tells me what to do. Can you do it; is your faith strong enough?
Back in the day, when trading pits ruled the world long before SkyNet took over, and I was a ‘Certified’ Master of the Universe trader, I would walk each day into the SP500 futures pit and know that every one of those other 200 – 300 traders wanted my scalp. I was hated, detested, despised, & feared; all the necessary emotions you want in other traders when you are in a trading pit [love? ‘fugetaboutit’]. Often, I would get other traders to tell me that ‘yup today, I’m gonna follow you; you buy, I’m buyin’, you sell I’m sellin’, I’m sick and tired of being sick and tired from losing money in this shithole, and by God I’m gonna do something about it today, so long story short I’m followin’ you!’
End of the day I’m up money, they are down money; I would talk to them and the ‘hurdles’ erected by these traders could fill an abnormal psychology curriculum at any university for a decade. Bottom line; their desire to want to ‘know & control’ events was stronger than their faith in following me and by default my algorithm. Their desperation for the need to make money meant that all of their ‘so called brain power’ had to be devoted to figuring out where this shit was headed; ‘yea, that’s the ticket’. Only it never is. And so, here come the excuses, pouring out like water from a fire hydrant, rationalizing their failure so they don’t have to own up to it.
I’ve told people for what seems like forever, it took me 3 months to come to grips with what I originally created with my floor trading algorithm; and during that 3 months I did everything humanely possible ‘thinking’ about what it was doing while trading was going on around me, and then attempting to analyze, on the fly, whether at the moment it was a good idea or not to make the trade. I needed to make money, and like everybody else in this world I had bills to pay, and I tried EVERYTHING to try and rationalize any trade based on my brains & gut instincts. Go ahead, ask me how that turned out?
I eventually realized, after 3 brutal months, it was my inability to have ‘faith’ in what I created; that it was ‘smarter’ than me. Having gone through approximately 90 days of eking out a living, while watching and agonizing over the fact the algorithm basically ‘nailed it’ every frickin’ day, I came to the conclusion it was ‘illogical’ not to follow it; if you can’t beat ‘em, join ‘em, and the rest is history.
So, to all the people who suggested I do something live on the web; no, because all it will do is give you a false sense of security. Watching me trade live isn’t going to do anything for you when you are sitting there by yourself; you got the visual algorithm right there in front of you. You got eyes, right? You can read, right? Now, can you follow directions? Besides, what if I’m trading the DOW30 or crude oil today and you are strictly gold; what do you do then?
You have to 1) place your ass in the manual, 2) get a demo account, 3) put the algorithm on the demo, 4) trade the demo with the understanding the time spent is well worth it, and then 5) make all of your mistakes and total fuck ups with play money, and despite this watch the account balance grow so you can convince yourself following the algorithm is the proper path to ‘escape to success’.
YOUR SUCCESS IN TRADING IS NOT BUILT UPON YOUR OTHER SUCCESSES IN LIFE; SUCCESS IN TRADING IS BUILT UPON TRADING FAILURE AFTER FAILURE. IT IS THROUGH CONTINUED FAILURE IN YOUR OWN ABILITIES TO ‘OUTSMART’ THE MARKET THAT YOU COME TO SEE AND ACCEPT THE ALGORITHM AS THE ONLY WAY POSSIBLE FOR CONSISTENT MONEY MAKING SUCCESS. YOUR FAITH IN FOLLOWING IT IS YOUR ONLY CHOICE. Accept the premise, don’t accept the premise; your choice doesn’t affect my life down here in the Caribbean, it only affects you and maybe your family.
Besides, I am not at all interested in being beholden to a group of people on the web who will take advantage of me by wanting my time 24/7/365, and eventually demand anything and everything for free; ‘I want live streaming of trades, I want commentary, I want charts, I want email support, I want Skype support, I want a library of help documents and PDF’s, I want an 800 number for help, and I want it 24/7/365 for no cost’. In other words, it spirals out of control from a trading public whose demands upon my time and efforts absolutely know no bounds; and if I start it and don’t give them what they want, I’m the asshole. And if you think that isn’t ‘hands down’ the most likely scenario, then I got some swampland in Florida I can sell you cheap for development.
To the other camp of people who sent me mail; well, I literally started with nothing. I scrimped, saved, begged, borrowed and eventually got in the game; it is far easier now to start than when I did, and if you can’t raise a few hundred bucks to start, then now would be a good time to start the planning necessary to get your ass ready for what you say you want. You can sit there and bitch and moan about the cards life has given you, or you can do something about it. I’m offering you a new deck; can you pull yourself out of whatever mess you are in and do the things necessary to change? You are master of your own fate, you decide; I’m here to help with the algorithm and email support to answer any/all questions you got while YOU make your own life better through trading. It’s simply all you can ask and expect from me; the rest is up too you.”
Turning to gold today; “ok, it’s Friday … you already act like a bucket of shit with a nothing range overnight … now that trading has started in New York, my somewhat facetious question is, is anybody awake? … is there a subway strike going on or some big Gay Pride parade planned? … [oh shit, another micro-aggression on my part] … I’m giving you one chance with a very short leash cuz what I’m looking at on my screen looks like a market that is almost dead today, and chop isn’t something I want any part of … clock is ticking, do something damn it!”
Ok, screw it; possible only trade today given the action directly below.
And after being in this dead animal for about 13 minutes, I can sense and feel this is going nowhere; I use this small spike up to ensure my sell liquidation is a decent one [and it is]. It isn’t much of a profit [about half a buck after commissions], but I’m simply not willing to subject myself to this kind of dead action, and I’m willing to deal with the consequences of not profiting if this stuff explodes higher suddenly. Given the meager range, the fact that it’s a Friday, it wouldn’t surprise me to see a new high and a new low during the day, and at the close right near where we are at now. “Umm yea, no thanks!”
But, you know what? I could be totally wrong, but after yesterday’s very nice $5 per Oz. profit, I really don’t savor the thought of getting chopped up on a Friday going into my weekend or getting caught in some kind of one minute wonder spike down in price that sees about 20 minutes of price action wiped out in 30 seconds by dealers that are stop hunting. And quite frankly, given the sloppy trade of late, “Mr. Market please prove to me you can put in any kind of decent range, and especially a rally that means anything.” And until that happens, why should I think today is any different than the last 31 of 34 trading days that have been pure shit for rallies and that could make today … possibly … get this stuff above the upper 1260’s again? Cuz from where I’m sittin’, I got a better chance of getting mobbed at the beach later today by a group of 20 something model women than seeing price in the 1270’s happening. [“What are my chances? I ask; market Gods speak through the clouds and thunder “one in a billion”. I smile, look up to the sun and say, “so your sayin’ I got a chance … YES!!”] [Ok, I stole it from ‘Dumb & Dumber’; if the shoe fits wear it, right?] So, that’s where my head is at. And if I’m wrong, it’s lost opportunity, not lost capital, and I’ll deal with it.
So, while following the algorithm on trade entry and initiation is an absolute “must”, as long as you are willing to deal “with the consequences” of lost additional profit when liquidating, then given the circumstances you are well within algorithm guidelines. In other words, getting’ in is a whole hell of a lot more important than how you get out, given no exhaustion line “hit” which is mandatory liquidation.
Now, after a couple of hours and looking back with hindsight, if you stayed long from the first trade until the plum crossed under the yellow line [because there were no large spikes or exhaustion hits] about an hour and 26 minutes later, there isn’t much difference in my getting out and your price; less than a buck an Oz. in your favor. Yea, I can deal with that outcome.
Quite frankly, gold today has lost my interest after these first 2 hours. I’m much happier thinking about a little golf and being
possibly getting mobbed at the beach. And so it is; I’m outta
here. Until Monday …
Have a great weekend everybody!
OPEN A DEMO AND/OR LIVE ACCOUNT AT THE LMFX LINK IN THE “DOWNLOAD LINKS” SECTION OF THE WEBSITE TITLED “OPEN TRADING ACCOUNT – DO IT NOW!”