Everybody, it’s Michael Martin, welcome back to the show. So carrying on from the previous few episodes. Oh, by the way folks, if you are listening still, cause we strip off the mp3 and you’re listening on Spotify or on Apple Podcasts or some other podcasting platform we do. We are recording these with video over on the YouTube channel. So come on over and check it out. So following on from yesterday, I think one of the, I was talking with a big hedge fund trader the other day and we were talking about why do people get so frustrated? And one of the things that came up was that a lot of folks aren’t actually doing the work. There’s a popular group of tickers that you can follow. Tesla’s one, Nvidia is the other one. There’s a couple of other ones. And I’m not saying to buy or sell them, you’d have to figure that on your own.
But there’s a bunch of popular tickers like Kramer used to call the four horsemen that included research in motion. Then they were the fangs. Maybe they still are there. But what happens is if you’re a follower, not a leader, you’re hanging on somebody else’s opinion. Someone who you’ve already made the determination that they’re smarter than you or they’re better than you. And so therefore you give yourself permission to be a follower and you give yourself permission to not do your own homework. And I think you rob yourself. If you don’t do your own homework, you rob, and I’m not talking about looking at charts. How did you know to look at the chart in the first place? Because it was on Kramer’s TV show or it was on fast money. You have to be better than that. You have to be an original thinker. You have to find the things that other people aren’t seeing themselves.
And if you don’t like that, okay, but sooner or later you’re going to come to that realization on your own. We live in a paradigm of personal responsibility and if you fuck up your trading, guess who’s fault it is? It’s yours and I, this is the same for me. No one’s immune from it. So if you’re getting or searching social media in Twitter in StockTwits or other discords because someone else has this trading theory, that’s great. There’s no evidence that that’s appropriate for you. It’s interesting, it’s infotainment definitely, and you get what you pay for. But when it comes down to putting your list together, you have to put it down for your reasons. The first reason is what’s my goal? What do I want my money to do for me? And the answer isn’t, I want to make money. The answer is paraphrasing, is that you want to follow a system that has positive expected value. That’s ultimately the feeling tone of what it is that you want to do, right? Also to consider is if you are a cup and handle person and you don’t find any trades in that space for the share price of what you’re looking for, then you have to sit on your hands because the minute you step away from that, now you’re doing
Else. You’re not doing trading, you’re acting out emotionally. So I think when you are super honest with yourself, you can actually cure all your ills or the nuances of your trading rules that don’t really work for you but might feel good in the moment, right? Because we’re pleasure seekers, we’re going to seek pleasure and we’re absolutely going to have pleasure by avoiding the things that we don’t want to feel. And the minute you can put yourself in the spot where you’re willing to feel every feeling that you can possibly feel good and bad or what you would call good and bad, I think then you’re onto something. Because one of the things that I learned from my mentors is that there’s no such thing as a bad feeling because all the feelings are trying to teach you something. Two, you have to get used to feeling comfortable when you’re uncomfortable. And that probably, I don’t know for sure, but I’m going to guess it has everything to do with the uncertainty that goes around trading. You got 40 indicators on your screen, let it go, man. Because that’s not willing to feel the uncertainty.
And once you start doing your own homework, you’ll have more ownership. And that can only be empowering even if you lose money because now you’ve accepted the responsibility that adding and removing risk from your portfolio is on you, right? Reminded myself here, if you can’t make money using cash, please for whatever reason, don’t start using leverage, right? I know you have to borrow and sell short in a certain type of an account, but at the end of the day, you shouldn’t be using Reg T and for God’s sake don’t even go close to day trading buying power. I know there are other traders out there who have known for a long time that start their traders at risking like 10 bucks a day. And that’s terribly bright because in the beginning it’s not about the money, it’s about finding the process. And if you can’t execute the process by making and losing 10 bucks a day or portrayed for example, then you really don’t have any business. Scaling up. Scaling up isn’t going to be the answer to your question of how come I can’t make money? You have to focus on the process, right? Trading small isn’t going to make you more money if you have a shitty process.
So ownership is huge. We talked about Bill Dunn last week, I think. Great guy, super bright, PhD level education. And he was a purely systematized. He was a hundred percent me mechanical model. And he had even still with his trading as smart as he was, right? And he’s terribly bright guy, he didn’t let his strong emotions override his signals. He didn’t let his intuition override his trading signals. Ultimately, people like that are going to model, right? They’re going to create a model based on a thesis, then they’re going to test that thesis. And it’s very scientific. If you’re a discretionary chart reader, you’re kind of shooting from the hip. And yes, you can do very, very well,
But you need a lot of instances to know if you’re, excuse me, if you’re onto something or not, you can’t say, well, if I have five winning trades this week, I’m going to start scaling up. Not enough data. So I think if you’re in that space, you need to do a little homework and come up with some very stringent rules and make it hard on yourself. Be your own ballbuster, is what I’m saying. If you let yourself off the hook, you’re going to test boundaries in ways that are likely going to hurt. You see? And there’s nothing I could do about it. I had to live it myself and there was nobody to help me. There was no internet when I started, so I had to fall on my face and get back up. And if I didn’t get back up, that’s when I was a loser because I quit and I was not going to quit.
But you have to understand that this is a long term game and it’s going to take you a long time to get it. You might intellectually understand what it is that you’re looking at it, but that doesn’t mean anything when it comes to the emotional intelligence that you need to execute those very rules. Those are completely different situations and environments to live in. So get used to feeling all of your feelings and listen to what they’re trying to teach you. They might compel you to do better research that you’re more prepared for the next day. And if you do that day after day, after day by June, July, August, whatever it is, we’re in end of March now. You’ll have evolved so much more as a human being because managing risk in the markets pushes your buttons into the fight or flight mechanism. It’s a primal experience. So you have to train your body and your behavior to behave different. We are the sum total of our behaviors. A lot of that comes from our environment. What did we learn? Who did you learn? Who taught you the rules around money?
Because if those folks weren’t risk takers, you might be trying to be an entrepreneur, which is a traitor, a business owner, a decision maker, a leader, but you’re working with a follower’s mentality, right? And that’s just never going to conjugate. That’s like saying, I should have went. It’s just never going to work. Anyway, I care for everybody. Please like and subscribe. Let me know what you think. Happy to do a deeper dive on this. And just remember all the failure that you feel you’ve, that you’re going through. I’ve already felt it before. So we’re very much alike. Just keep working, keep plugging away and don’t quit. All right folks, good to see you, and I’ll see you tomorrow.

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