Hey everybody, it’s Michael Martin. Happy Wednesday. I mean, Wednesday is Monday. What am I talking about? See how disorienting trading could be even for pros. I have a great topic today. It came in from Limitless on the video. How can you benefit from trading with detachment? And the question or the comment would be, I’d love to hear your thoughts about addiction versus passion. It feels like a fine line between the two, suppose. So before I get there though, I want to give a couple of shout outs because I see all the comments. I do all my own homework here and I want to thank a few folks. Second entry long. Thank you very much again for commenting. Derek, if you can’t get the audio book, chances are you had already subscribed and when you try to fill in the form, the system already sees you as a subscriber.
So you’d have to email me through the website. Okay, Jo G. Thank you, Mike Shaea. W worth watching more than Once. Words to Live by. Thank you very much, Roman. Always appreciate you Bruno. Thank you Mohammed. Matt stole, really appreciate you Michael Walstad, it’s a bunch of folks who have written in. I appreciate you taking the time. It’s probably a lot of other choices that you have during the day to consume content that you might feel valuable. So I appreciate you being here. I get good feedback. This is the kind of stuff I’m talking about when I do content. It helps me understand who the audience is because in many ways it’s a one way conversation. By inviting your comments, we can kind of have a bit of an ongoing dialogue For those of you who care about this type of content, which in my humble opinion I could be wrong, this is all about trading.
People can sit and diagram charts all they want, but after a while it just gets to be too much, right? And I remember my uncle, Steve Martin, the comedian when he did Wild, wild and Crazy guy, he said when he went to college, he studied philosophy and he said, the problem in studying philosophy is you remember everybody else’s to f yours up for the rest of your life. And that’s kind of what happens when you’re sitting in watching people go over charts. Plus they oftentimes aren’t really good teachers, so they go over and they move things so quickly and they’re changing timeframes and you don’t know the context. So although it might work for them very, very, very well, it’s also very, very difficult to be a good teacher. I’ve been teaching for over 30 years and it’s a skill unto itself. But I teach Jiujitsu.
I used to teach the series seven way back when I started on Wall Street almost as soon as I was done with my own two year apprenticeship kind of because once you pass the test, you still have a lot of time before you’re actually considered a solid citizen in the business. So anyway, I want to get to the question though. Don’t want to blather on. But anyway, I appreciate you. Thank you for being here. Please like and subscribe and hit the alert belly thing that Gaja tells you about. He’ll be here Wednesday. So again, coming from Limitless is a comment on the video that we did. How can you be benefit from trading with detachment? You just want to kind of be in the zone. Trading is who you are. It’s what you do. It’s your nature managing risk. And the reason you do that is because you’re probably better at doing that than other people are, right?
I’ve mentioned this analogy before where people say, oh, you’re a commodity guy. You’re a risk lover. You love the action. And that’s just not anywhere near being true. It never really was the same way. You can’t say that a fireman is an arsonist. They love fire. That’s not true either. They’re just really built and trained to deal with that type of risk and help it, help remove it for you. They’re not removing it for themselves. I’m sure in Maslow’s hierarchy, in serving the community. I know a lot of folks on the job from New York, A lot of my friends from my hometown became police officers with N Y P D was one of my best buddy. His father was a detective.
And a lot of my friends, Kevin’s dad was a lieutenant with the fire department. Peter Man’s dad was a captain. He eventually became a captain. Lot of great lot of g, lot of great guys. Salt to the earth. So first of all, I want to say I’m not an addiction specialist. Someone like Dr. Drew Pinsky, who some of you might know, he’s pretty famous. He used to run a show, maybe he still does, called Loveline. So he talks about mostly love and sex addiction, but he also knows enough because I think he’s an md, which means a psychiatrist probably where he can speak to addiction much better than I can. However, what I can speak to is what I’ve witnessed and observed in my experience from offices and trading desks and this and that. And so when I think of addiction and I versus passion or a professional commitment to one’s craft, because in my humble opinion, you can be tradings SPS on one minute bars.
You could be a soft commodity trader who wants to buy and hold futures like an investment. So you can capitalize on these monster moves as opposed to kind of getting it right and getting lucky, frankly, that a big move is going to happen intra day for you. So again, different shapes, different sizes. One’s not better than the other. You just have to find what’s best for you. Some of my good friends are very good, Steve and Mike at smb. I’ve known ’em for 20 years. We don’t do things the same way, but we don’t hate each other, right? They’re good guys. So when I think of a trade, so I’ll answer the question in this context. I’ve said before that I think there are two payoffs to any trade. There’s the financial payoff and then there’s the emotional payoff. Right now for professionals, the emotional payoff isn’t necessarily on a per trade basis in as much as it is a more of a macro emotional payoff that they can stick to their system over long periods of time regardless of what type of market environment you’re in.
So I don’t sit here and click my heels when I make money, and I also don’t want to go drink myself with my single malt scotches or whatever. Very, very rarely drink only count on one hand the amount of times I usually get them as gifts. But so for the emotional benefit is in that when I go to bed at night and I say, okay, did I do what I intended to execute? Right? Because the behavior predicts where you end up, you win some, you lose some. So on any given day, to be frank, and I’ll say this to Victor and I’ve said it to his face, I don’t give a shit about any particular day and just don’t care about it. I’ve been around long enough to know I’m going to get liver kicks, but I’m going to get a boss Rutin liver, liver kick. I know boss Rutin very well.
And so I don’t care about that. Also as a circuit breaker, I know that there’s not any one particular day that’s ever going to put me in a bus out a business. And I’ve been caught offer limit down in cattle when mad cow hit the tape. So I’ve survived, I’ve survived nine 11, I’ve survived everything. So that gives me solace in knowing that tomorrow’s another day, I know what I’m doing. I have phenomenal instincts, good systematic rules. I just got to follow those rules powerless over the outcome. The way I kind of intentionally work too is by doing this show a given back to the community because I didn’t have something like this when I needed it most. And so my promise to the universe was, I’m going to do a show like this or before, listen, this is before YouTube I, I said to myself, I’m going to try to find a way to give back to the community to help the people that might be like-minded with me, for example, and needed that type of help on the trader psychology, emotional intelligence, that angle of it, which to me is 80% of the game.
So with those two different payoffs on the trade, you have the financial payoff and then you have the emotional payoff. The pros learn to kind of wain themselves off of the need for that emotional feedback. It’s true if you really nail a trade, it can feel good, but you also know that pride’s a big banana peel. And sooner or later, if that’s where you live, you’re going to be looking at the sky from your back. You see? And it’s not fun. It does feel good to know that when you follow your discipline, you do get the results and that reinforces you following the damn process in the first place. But you have to take the thick with the thin. You’re going to have drawdowns. Even the best traders have big drawdowns. I’ve mentioned Bill Dunn who’s now retired as a legend, I think if he’s been trading or he had traded by the time he retired since 19 71, 74.
And again, no dig against him, purely systematic. I think he had three years in a row down 15%. And the guy’s unequivocally a legend. He was also chairman of the recent foundation and this and that. I have a video, if you look on the channel, a 30 minute interview with Bill Dunn, one of my favorite guys, no nonsense kind of guy. So the addiction part to finally get to it is where I think the emotional payoff is more important than the financial payoff in my way of looking at things. There’s probably many ways to do it. And so the potential for financial gainer loss is really just the vehicle to get to the feeling of the emotional win and that emotional or that need for that emotional win or the emotional lo loss. Because there’s ways to kind of win by being a victim. You get a lot of attention and this and that. It gets super deep. But that’s why I say you got to study your psychology.
So to me, an addict needs to be in the market to feel the emotional feelings that they want to feel regardless of whether they win or lose. You see, they want the action. That’s why people go to Vegas and play games of negative expected value because it’s entertainment. It’s called economic utility in specific economist language. When you do something for pleasure, it’s typically falls into that category of economic utility. I get pleasure from it. So I don’t care about winning. I’m going to throw dice, I’m going to pull the slot machines. Again, game of negative expected value. So there’s other games. So then you want to try to focus. If you do gamble, obviously you want to focus on games of where you have, you can exhibit some skill probably like Texas hold them or some type of form of poker where there’s not a gigantic rake or of course blackjack.
But that would be the way I would understand things like if you felt like you needed to feel the emotional win more than what was actually happening with the money, then I would say that it could be exhibiting addictive behavior. Again, I’m not, there’s plenty of places where you can go if you feel you have gambling addiction, which is probably the category it falls under. Obviously it’s not a sex addiction, so it’s probably a gambling addiction and it’s very easy to set up. You could bet on anything. Right now I look, I scroll through cause I practice jiujitsu. So when I scroll through my Instagram, my personal one, I’ll probably set up a business one for some reels. Maybe I’ll take some of the clips that I do with ganja and isolate those as just me and feed ’em through YouTube shorts or Instagram reels. I don’t know, just to test. There might be an audience there. If not, I’ll just kill it. You just don’t know until you test.
I’ve seen it. I’ve seen people bet big. I know guys, guys that who had been hired by one of the guys’ partners actually hired me because they were whipping around weekly options and throwing size around and they couldn’t stop themselves. I couldn’t stop them either because again, it’s a strong emotional pull to want to be in that space. I’m not judging anybody either. I’m just saying that it can be too easy to get sucked into. I found that there were people who were super smart and they went on tilt because they needed the emotional feedback, right? Because they didn’t see the financial one and they equated their intelligence with making money. And when that didn’t manifest, at least with the frequency or the size that they wanted, the emotional size became overwhelming. The meaning, the emotional payoff for that particular trade, or a string of trades within a certain window.
And that P makes people go nuts. And even if they’re not addicts, they can go on tilt, which to me is like a short term addiction infatuation, if you will. And obviously it’s not healthy. But again, I’m not a doctor or a professional psychologist. I’m just a guy who studies his own behavior and witnesses that of other like-minded folks. So I wish everybody the best. But I think that’s when you want to take some time out and reflect upon your behavior, what is it that you’re trying to do with your money on the consulting side of the practice, that’s always job number one to try to really get down to the nitty gritty. Because in many ways it’s not always about the money, it’s about what lifestyle it can afford you or things that you want to achieve in your personal life or maybe with your family and your kids if you’re married.
So that’s pretty much the way I would look at it. If you wanted to understand, as this might relate to you, the addiction could be that you just want the emotional payoff, but where can you get that emotional payoff in another area of life where you don’t have to put hundreds or tens of thousands of dollars at risk? Are there other places in your life where you can get that emotional reward that won’t be so costly, which might be hard to delink, right? Because it might mean something to you to print a big number, have a big month, have a big trade, but for why? So you can tell other people because that would speak to ego or some kind of inferiority complex or some type of insecurity just from the outside looking in. Most people don’t really care what you do for a living.
Doesn’t matter to them. Why? Because most people are self-centered, right? They’re just concerned, can I pay my own bills and not become a burden to society? So that’s what I would look at is if you’re doing things for the emotional payoff more than the financial one in the short run, it could be you kind of going towards going on tilt. But if you find yourself doing this all the time and you’ve had to reload many, many accounts, you might want that emotional victory that comes with the big win. And so you risking too much. I could tell you an easy fix obviously is cut your position sizing, but that’s not going to help you meet the emotional win. Cause if you’re running an account and you’re looking for, you don’t want to try to double your account in a day or more than double your account in a day or make 50% in a month investigate.
Why do you want that? Cause it’s not about the money you see. That’s why I feel like this work that we’re doing here collectively as a team, as our own little group here, is really, really important. Because the more you can understand your behavior, the better way you can find what trading strategy is good for you. As I’ve said before, if you don’t know who you are, it doesn’t matter what you know about trading because you will constantly find yourself in a spot where your subconscious is really driving you to meet your emotional needs. And that’s a deep statement. That’s a heavy thing to have to live with. So when you don’t know who you are, you really don’t know at least consciously why you’re doing things sub subconsciously. Your subconscious knows exactly why it’s doing it. And that’s why when we do the work on the consulting side, when I have the time for the hedge fund folks, they’re usually fairly balanced, but it’s to really get to the bottom of their behavior.
Where has this shown up in the past? So you look for patterns because I believe we all run emotion, we have emotional systems that we’re running. And a lot of it can be explained when you look for how do you seek pleasure and how do you avoid pain? And then for those of you who like pain, how does that serve you? Right? Because there’s masochism and all that kind of masochistic behavior. Anyway, folks, please like and subscribe. Send me all your feedback. Helps me think about myself. Remember experiences in my own life. Lucky for me, I never really went on tilt because I had a strong understanding as I mentioned last week, that my behavior was going to predict where I was going to end up and it was in the doing right. That’s why I was a little impulsive cause I just wanted to start, right? And that helped me get into the game and start learning and start making my mistakes quicker. I want it to fail fast and fail forward. So that was the upside. Anyway, thanks very much for being here folks. I’ll see you tomorrow.

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The post The Difference Between Addiction And Passion first appeared on MartinKronicle.

The post The Difference Between Addiction And Passion appeared first on MartinKronicle.