The Michael Martin Show

I think prediction is more about being correct (and doing so publicly) rather than anticipating a move or a series of moves that make you money over time.

The latter is about expected values, not accuracy.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

Forcing the issue or forcing a trade rarely works out well.

It's a need for an emotional win, more than a financial one.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

You can inadvertently invite a lot of frustration into your life if you place your protective stops too tight.

You'll get knocked out of an otherwise good trade.

Stocks and commodity futures have a personality and you can't expect them to be something they're not.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

Protective stops preserve your capital and preserve your mindset.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

If you let the weeds bloom at the same rate of your flowers, you don't have a garden. You have a mess.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

Backtesting forces you to be objective and not selective and removes the "yeah, I would've put that trade on..."

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

Short-term data are more random than upper time frames.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

Looking at the ratios between your winners and losers and the frequency with which they occur.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

Managing risk and determining the best use of your time.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

If you are trading on headlines, you are in reaction mode.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

If you put your stops here, you're going to get knocked out of any otherwise good trade.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

If all your positions have a zero at the end, that's a problem. Think in percentage terms.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you know what your target RoR needs to be, you can determine the number of trades you need to make knowing your winning % and ratio of average winners to average losers. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You can lose money from bad luck, bad timing, and bad analysis. However you start losing money, get out instead of adding more. You won't get out at a lower break-even price. You know it and I know it. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Backtesting is forced objectivity and it can help you stop deluding yourself. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Winning and losing streaks will happen perhaps from skill, but mostly from randomness. Don't become too emotionally invested in either. Take them in stride. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

Your goal is to trade your model, not worry about the outcome of any one trade.

Traders live in a probabilistic world, not a deterministic one.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show We get paid to execute. Everything else is self-medication. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Hint: it's everywhere. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

You need to learn the tactics and most importantly learn about yourself.

Those two processes accelerate and decelerate at two different speeds and you'll need to make adjustments between the two as the wisdom comes to you.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

There are too many reasons why a trade doesn't work out. Your protective stops will catch all of them, despite your inability to know them all.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show How to trade: 1) Add risk to your portfolio 2) Enter protective Stop Order 3) Don't watch the trade - go do something else Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you're missing trades, maybe you aren't as emotionally attached to your goals as you should be... Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Here are two things that can help you. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Discouragement can turn into resentment. That can lead you to begin trading with 'angry money." Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show What is past is prologue. If you've had trouble not following through with things you've begun, new trading ideas or strategies might go the same way for you. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show We only have so much brainpower each day. Here's how I do as I can to conserve mine each day. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show There are many answers to this question, but I think you could say that having discipline is right up there. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You can create programmable responses to things that catch you off-guard. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If something you own goes against you, the reason why doesn't matter. You cannot renegotiate with your initial stop price. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show What I've seen change and what has stayed the same. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show A little bit on how I learned what NOT to do... Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Trading gains and losses have 2 parts to them: the emotional and financial. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Being in the zone has nothing to do with winning or losing trades. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Whether you're a systems trader or chart reader, everyone has an emotional system they're running the in background - and that's what's running the show. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show "The more you sweat in training, the less you bleed in war." - Richard Marcinko, from the book Rogue Warrior You can prepare yourself mentally for challenging markets so they won't derail you when you're in them. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Having a hard time in the markets? Don't worry - most of the traders featured in Market Wizards either blew up or had a really harsh emotional hazing in the markets, so you're right where you're supposed to be. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You can't stay in a losing trade because Mohamad El-Erian is bullish and you're tired of getting stopped out. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you're trying to add an indicator or overlay to your charts, it might be an emotional band aid to what you're feeling right now. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Some traders refer to this as a 'two for one' trade. It might make sense for some of you if your trades are stalling. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you change your trading style to a second style because you are frustrated, you'll get the worst of both styles. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When what you're trading stalls, a reversal could be imminent. Use 'time stops' to protect your capital. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show How you trade becomes your style, and your style is uniquely yours. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If all you do is complain about what's not working, you get more of 'what's not working.' Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Managing risk successfully comes down to how well you deal with uncertainty. The best you can do is put in your protective stops. The real random part is how much upside will the market give you? Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show I don't know of a single factor or variable in your life that will have more of an impact on your long-term success in trading than keeping your losses small. Pedigree won't mean much if you can't enter your protective stops and keep losses small. Deep Thoughts was written by Jack Handey, not Al Franken. I misspoke at the beginning of the episode. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Trading is about expected values. The determining factor in establishing those values is the placement of your stops - your stops to enter trades, exit losers, and to exit winners. If you wing any part of these, the expected value of your trading goes out the window. At that point, you are putting your whole enterprise up for a gamble. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Forget setting a goal based upon achieving a certain rate of return. Set a goal on the process that you would need to execute each day to get the return. You're powerless over the result, but you can control the process. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show The one thing we all have in common that everyone can relate to. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Trading losses hurt for a variety of reasons. They are all painful. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show See the embedded video. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you're not uncomfortable, you're probably not growing. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Although you might live for the sprint, you have to have a marathoners mentality. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Trying to bull your way through choppy markets only brings deeper drawdowns. It's better to step away for the day and clear your head. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show With so many failed breakouts in this environment, it's not surprising that many traders are chasing trades that they missed. It's the perfect emotional set-up for losing more money. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show The reality is that you are going to miss some trades. Surprise announcements are obviously hard to anticipate. However, there are trading tactics that you can deploy to have your orders ready in advance. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Here's what I do to keep my goals front and center. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show It's the end of the first half of 2021, and the beginning of Q3 and 2H. See what you can do behavior-wise to hit your goals more effectively and efficiently. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Strategies won't become ineffective overnight, but they will need some tweaking over time. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show The markets will change in a way you don't want them to at a time that is very inconvenient to you. If you have a character defect, they will amplify it. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Many times when something's not working, folks look for external resources to fill in the holes. This is true for most traders. The best ones know that the majority of the time, the answer to what's not working is already inside them. IMHO, it's about attaining more insight to who you are and your "why" rather than learning a new trading tactic. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you can't see yourself becoming more successful, it's not going to happen randomly. Set goals and then act on them immediately. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show It's all about your mindset and how you interpret the environment in accordance with your goals. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You might find that when the markets go down, you get frustrated or depressed. It may also happen even though you're smart enough to sit on your hands when the tape is heavy. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When, during your day, do you feel uncomfortable? Albeit temporary, setting and achieving goals will leave emotional stretch marks. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show I don't believe in canceling people. I believe in redemption. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show I think mindfulness and awareness are two different but related things. Here's one way to differentiate between the two so that you can put both to work for you. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show It's not just about performance or what your trading potential might be. You have to fit in culturally with what the desk already has. [We don't hire traders nor allocate FYI.] Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Take a break from your charts and read The Economist, for example. When you can develop a thesis where the fundamentals and technicals align, you'll find yourself in a good place. Not all fundamentals are "funny-mentals" - the latter of which is often misused or taken out of context. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show A great deal of trader frustration comes from the need to be right or correct. That's a tall order since we're all dealing with imperfect information at best. Conjugating your emotional makeup with the expected value of your trading set-up(s) is a better way to evolve. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When you're managing risk, if you don't know who you are, it does't matter what you know. Almost immediately, your psychology and emotions will take over. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show In this episode, I answer a reader question about technical indicators and chart overlays. I referred to these as 'emotional band-aids' in my book. In this episode, I speak about studying the data around an inverse or reverse head & shoulders pattern as an example. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you are looking to grow your assets, you need to open accounts. The best relationships are ones where you and your clients understand each other on a deep level. You can't get to that spot without being a good listener. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you don't know the odds or probabilities (there the same thing), you can't effectively position size. You're gambling, but now at least you know. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show As of this date, the majority of companies that help you buy and sell crypto are not regulated nor registered as Broker/Dealers. It's highly likely that is going to change. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Knowing how the crowd is going to behave can lead to improving your trading edge. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show All of your emotions are trying to communicate with you and teach you something if you know how to listen. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Let the market help you build an investment thesis after you're already long. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You can learn a great deal about trading by doing it, and in doing so, you'll become your own best teacher. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you're seeking emotional support for not having your own trading model nor methodology, you're in for a surprise: financial televisions shows can't help you. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show One of my friends had to put on more than a dozen trades to have 5 current positions. If you are frustrated, you are not alone. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You might be able to find a nuance of a market by looking at the data, not the chart. That nuance could be incorporated or become your trading edge. Be open-minded in your research. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Trading spreads in the commodities markets and equity pairs in the stock market might be a good way for you to cut the vol in you portfolio. In these types of trades, you're trading the difference between the two instruments more than making a bullish or bearish bets. These are considered relative value trades. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Markets can move swiftly against you, sometimes before you can act fast enough to cut risk. Consider having protective stops in the market, especially if you're trading with leverage. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Trading bubbles is what you pray for, but you have to know that the market is in a bubble. If you get caught up, you can get hurt badly. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show My take on Warren Buffett saying he doesn't know any rich technicians. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Intentions equal results. Speak about the truth that you want in your life, not what you don't have. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Intentions equal results. Trader burnout doesn't typically occur during raging bull markets. It happens when you're grinding which happens in markets like these. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Why you should adjust your protective stops upwardly. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Refresh and restart. Although you can probably smell the smoke, sometimes you can't see where the fire is when you're standing on top of it. Take a few days off in this environment to clearly see all the NPAs (non-productive activities) that you might have accumulated since March 2020. It will save you time, money, and energy. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Intentions equal results. If you're burnt out and know it, and you're still grinding, how does that serve you? Take a day off and put some space between you and your trading. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Your subconscious is running the show. Get in touch with it. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Bad luck and bad timing can wear you down. False breakouts can evoke feelings of frustration. Good luck and good timing is around the corner. Sitting on your hands in frustrating markets and trading smaller will help you be in the right time at the right place for the good luck and good timing. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You define your own trading edge. If you can't define it, you don't have one. Be self-reliant in your risk management. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When investors are frustrated, it's a good time to discuss working with them and taking over their account(s). Ask them about their process. Chances are they don't have one... Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Suppose you could figure a way to better use your time to improve your trading or money management? Knowing where and how you're spending your time now would be a good place to begin... Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show The "fear of missing out" or FOMO can instigate a fight between your discipline and how smart you think you are. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Jumping the gun might work once in a while, but you're better off waiting for the trade signal. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show History lesson: Netscape Navigator v. Microsoft's Internet Explorer - how to see things for what they are. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Trade the price, but fundamentals will eventually matter. Although I believe it will evolve to a professional level over time, right now Coinbase is a 5G Company with 9600 Baud Client Service. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you have too many choices, you can find yourself stuck in indecision. Getting clear about your goals will save you enormous amounts of brainpower. That allows you to focus your intentions on the most important things to you - your goals. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You can manage your mindset like a portfolio manager. Sell the bad vibes and buy more of the good ones. When you sell your losers fast, you improve your mindset. That can lead to better performance. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You'll feel better taking the small loss today, rather than taking a larger one tomorrow. By avoiding the frustration today, you invite despondency tomorrow from having lost more. Things go from unfavorable to bad and then to worse. Which would you rather feel? Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Don't become soft and start negotiating with yourself when you start losing money. Be decisive and offset the position. You main goal is to play superior defense. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Don't let your greed overshadow risk management even with large unrealized gains. You can give them back in no time. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show It's the client's money, but you are the boss. Wherever you are sitting, it has to be at the head of the table. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show It's the client's money, but you are the boss. Wherever you are sitting, it has to be at the head of the table. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Tell your clients to mind their own business. You are the money manager / investment advisor. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show "When I fall in love, it will be forever." - When I Fall in Love, Nat King Cole (lyrics by Edward Heyman and music by Victor Young) Stocks aren't women (or whoever you're attracted to). Don't fall in love with them. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show The story around a stock can cross over into the realm of fiction. Only the price tells you the truth. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Set goals even if you don't know how you'll achieve them. Your brain will find a way to work it out. Intentions equal results. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show We are powerless over the markets. The best we can do is to harness the forces to our advantage only when it makes sense to do so. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Traders constantly make decisions with imperfect information. Be mindful and aware that your strong feelings for a name / sector don't outweigh the expected value of a trade. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Context on self-doubt when it begins to pervade your trading when you find yourself in a losing streak. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Managing risk when your names go against you but you don't get stopped on any one particular name. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Equity pairs (long one stock, short another correlated stock) can stake the sting out of market pullbacks. This involves short selling so make sure you know that short selling is appropriate for your level of risk tolerance and financial means. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Your upside and drawdowns go hand in hand. Make sure you investigate both when adopting a new trading style or asset class. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show I believe in knowledge for the sake of it. But you need to figure out the marketing game in order to attract clients and assets. Having a designation isn't going to attract new clients through the front door. This also marks the second time I misspoke this week: I'm pretty sure Alex Lifeson used a Flanger with Chorus on The Spirit of Radio. I believe I said Phase Shifter. (I can get the same sound with a Phaser FYI...) Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you're an investment advisor, you need to have an understanding of the narrative as it will come up with your client conversations. If you're creating alpha, focus on your own behavior and eliminate as much of the noise as possible. The price will tell you all that you need to know. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You can learn and enhance the nuances of your trading rules by looking at the same instrument over multiple time frames. This allows you to refine your rules to better suit your emotions and trading psychology. Fragile is the 4th album by the musical group Yes...I mistakenly said it was one of the first albums. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You can't delegate your emotional intelligence. What can you replace your feelings of frustration with that won't sabotage your trading or your life? Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Human behavior is predictable: people want to feel good. That means they'll do the wrong thing at the right time. Use that to your advantage in your modeling. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Seek pleasure in setting your protective stops. Love the outcome rather than becoming frustrated - you've just preserved your capital. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You run two systems. Which one are you feeding? Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You should take a week off and study market history. The names change, but human behavior does not. "You can observe a lot by watching." - Yogi Berra Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Know your history - it can help you model your risk parameters and help you with your #1 job - play superior defense. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Try something new. Change your daily routine. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show ...or, "How to not work yourself into a frenzy" Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Bob and weave, pivot, and then do some judo. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Don't fall in love with one instrument - you'll end up trying to find trades that aren't there. A robust trading system that you can deploy across an asset class is the better way to go. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Don't fall in love with one instrument - you'll end up trying to find trades that aren't there. A robust trading system that you can deploy across an asset class is the better way to go. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Study your own behavior for best results. Too many outside voices and opinions can make you more confused than you already might be on your own. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You get what you give. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You can quiet your mind by eliminating what you put into it. That might mean canceling subscriptions, not having the tv on during the trading day, and staying away from social media. If you can't attribute having the tv on with profitability, why have it on? Investigate all your security blankets for efficacy. You might be surprised how little they help you. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show I see and hear from many traders and advisors struggling to get it right. Most of the time, they need insight on how to understand themselves more than anything else. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When things aren't working, take a few days off and pivot. You're not going to miss anything. The markets will always be there. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You become empowered as a trader when you begin (or continue) to assume responsibility for the P&L and everything that happens in the portfolio. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Diversification is risk reduction, not risk management. Now is the best time to start managing your clients' expectations. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Sector rotation is underfoot. Time to look at new names in new sectors. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Don't fall in love with a stock or future contract. You have to remain objective enough to cut ties with either and never look back. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show As I've mentioned earlier, when you set your protective sell stops, you're not only protecting your financial capital, you're protecting your emotional capital as well. Even if you would consider yourself as having an aggressive trading style, your main focus in both strong and weak markets, is to play superior defense. Protect your capital at all costs. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When momentum stalls, you can deploy a "time stop" to sell before your percentage-based protective stop gets filled. Good trades start making you money right away. If momentum stalls right after you get long, it's a warning sign that you have bad timing. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show With a nod to Langston Hughes' poem "Harlem," there's a large opportunity cost to not taking immediate action towards hitting your goals. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You can avoid the "should have, could have, would have's" by acting with intentions. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When you get stopped out, you free up all the noise in your brain. Practice mindfulness during the day by trading in silence and listen to yourself. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Quoting Charlie Munger, it's hard to be a great investor. You can be average and still do very well. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When you set your protective sell stops, you're not only protecting your financial capital, you're protecting your emotional capital as well. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you have a robust system with positive expected values, it's just a matter of time for you to see the results that you seek. However, you have to take every trade. And although that might not feel good at times, it's integral to your overall performance and track record. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Your reluctance to feel frustration in taking small losses today ensures that you will feel despondent going forward. Reluctance makes you do the stupid things that you end up having many regrets around your decisions and large losses. Therefore, you should start to not only invite the frustration into your world, but you should come to love it because of what it means to you. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Putting your optimal size on all at once might be more of an expression of greed than starting smaller and adding to it. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When you try new things, you don't know what you're doing oftentimes. Let it get messy and pay attention to how much permission you give yourself to find your best version of you. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you don't have a trading edge, volatility does not equal opportunity for you. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show A favorable outcome does not necessarily say anything good about the process. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Subscribing to a Reddit feed does not constitute a trading edge. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Financial independence comes from being self-reliant. You cannot count on anyone but yourself. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show The Greater Fool Theory is alive and kicking on every trade, not just the momo stocks. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Protect your capital and play superior defense. That's job #1. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Why trading rules are your pilot and navigator. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you fear being conquered, you ensure defeat. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Traders live in a paradigm of personal responsibility. You have to find the ingredients, come up with the recipes, learn to cook, and then eat your own cooking. End of story. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show FCMs and B/Ds can change/increase your margin rates without notice and without an explanation. They do this to protect the integrity of the market whether participants like it or not. This is normally done to the retail market, not the institutional market. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You don't even have to buy Calls - you can get clients to give you them. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show I don't think you can intellectualize how you will feel about something you haven't experienced. The emotional and psychological wisdom you gain from experience is invaluable. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You have to write out what you think your instincts are telling you by hand. A short list is better than a long memory, and it helps you be honest with yourself and have integrity with the process. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show The price is a beacon for you to enter your orders to manage risk. Prices are not absolute, they are relative. If you get stopped out trying to protect your capital, you can always get back in at higher prices. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Winners rotate - what made you money last week, month, or last year, might not be what carries the day in 2021. Use protective stops to capture as much of your unrealized gains as possible. "You cannot step in the same river twice" is a quote from Heraclitus. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You will also hit your trading goals faster if you know what you're doing it for. Having personal goals outside of your trading goals will help you get the best of both worlds. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you are having trouble letting go of the emotional need (it's not financial) of letting go of price targets, you might consider thinking in terms of "price ranges" as you segue to not having any price targets and letting the market tell you when the move is over. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show There are no intellectuals solutions to your emotional problems around managing risk. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Just because a name moved 35%, for example, doesn't mean you've missed the move. Oftentimes they can continue to move many multiples beyond that - like 10x-type moves. Don't let relative price movements stop you from making smart financial decisions. Hint: they might not feel good when you make them. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show How do you make money arguing with people on Twitter or Stocktwits? Focus on the things that impact your P&L. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You are competing with yourself. There's nothing else that matters. There's no one else that matters. Do what's best for you. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show The goals you set for yourself outside of your trading can add AND detract from your trading success. Be mindful of everything you do. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show It might take a few months to figure out what the best process for you to follow actually is. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Traders trade. That's it. There isn't anything that you need to beef up your credibility. Just start managing the risk. What you learn from the doing will provide you with all you need. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show The investment advisor world does not typically train individuals to make their clients money. Naturally, learning how to read charts is something they have to endeavor on their own. Here's one way to begin to understand what's going on behind the OHLC bars or candles. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show There seems to be a natural order of things that risk managers need to endure to find their game. Those include security selection, position sizing, entries, and exits. For most, this is time consuming - and that can be frustrating in and of itself. I have found that there is one overarching thing that can help expedite the process. On some level it has nothing to do with trading, but on another, it has everything to do with trading. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you take profits, delete the name from your screen. These aren't lovers - you can't fall in love with former flames. The last thing you want to do is start looking at 5-minute bars after exiting a winner. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Adjusting your stops to take profits is an art and science and it ties directly into your tolerance for risk. How much of your current unrealized gains are you willing to risk in order to stay in a trending instrument? This topic is at the top of the list in trading psychology. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show It might not be great for your personal relationships, but there might be a benefit to keeping your risk on a 2-inch leash. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show It's wise to adjust your stops several times per day if necessary. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Mastery is achieved over time. The most important thing is to know yourself - which is a never-ending assignment. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Determining what consistency means to you and for you based on what you have to live through and perform. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show One way to understand the difference between creating gains versus creating alpha is the time frame. And creating net gains over time and benchmarking them versus the S&P requires one thing from you in terms of behavior. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You'll never be as emotionally connected to someone else's work as you will your own. Do you own homework - it gives you ownership and better connects you to hitting your goals. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show There are several levels of trust to consider and they all have to align. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You might be shooting for 50% RoR, but that comes with the potential for a 25% drawdown. Your clients might not want either... Make sure you communicate what you're endeavoring with your clients and be on the same page. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show It's very difficult to backtest chart by reading charts going back 20 years. A trading simulator that runs at the portfolio level is your best bet. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Take a small step in the direction of your goal. It's a much greater effort to put forth than someone sitting on the couch. Take action. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show On some level, everything is unexpected - I know that. In this context, I'm speaking about markets moving sharply against you before you have a chance to act. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You've probably heard the saying "what gets measured gets improved." There are several moving parts to managing risk as a trader or advisor. Here are a few things that you can chew on for your end of year or 2021 planning. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show The easiest way to lose a great deal of money is to bet big because you think you "have a feel" for the ticker. On the other hand, you might be leaving a great deal of upside on the table because you're being too conservative. A good place to start is by having consistent position sizing. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Put yourself first. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Are you wrong or unintelligent when a trade loses money? Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You have more time than you think to get it together. If you press, you'll lose. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show The best you can do is put your trades on. How you modulate your interpretation of the market activity comes down to managing risk. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Mindset is one of the biggest differences between the two. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show In order to get paid what you're worth, you have to have a clear understanding about what you bring to the table. You also need to understand the landscape of the industry and how you compete therein. One thing is certain: if you don't ask for the money, you're not getting it. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show What you do for homework can tell you a lot about the role you play and the value you bring to your clients. There is a big difference between managing risk and asset allocation. If you intend on collecting Incentive Fees, you have to do your own homework. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When you act decisively, you cauterize all the emotional angst that would normally come afterwards. Think of the great feelings you'll have when you can show your client(s) how you sidestepped large drawdowns, took profits when your names reversed, and didn't do things like buy pullbacks in a weak market that kept going down. Traders and portfolio managers have to be leaders, so show decisiveness and leadership. Someone has to be in control, and it might as well be you. But you have to set it up that way from the beginning. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When you act decisively, you cauterize all the emotional angst that would normally come afterwards. You come to the market the next day without the emotional hangover and a clear head. That leads to another productive day. Good leaders are decisive and traders have to be good leaders. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When you act decisively, you cauterize all the emotional angst that would normally come afterwards. If you don't offset losses quickly, they can become larger losses. Which feeling do you want to feel - the power of being decisive or the feeling of regret from not having taken action sooner? You get to choose... Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show A good advisor has wisdom across many areas in life and business. Clients will rely on those advisors for more than portfolio management. That's a good place to be so be that advisor. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you sell your losers regularly, all your clients will see are what's left: the winners. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You don't want clients asking you about names you don't own. Have them set up a second account for all their great trading ideas, and don't get involved. You'll thank me later. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Clients like to know that you have a plan. You're not likely to anticipate everything, but it pays to have discussions with clients before major announcements. No one likes surprises. Being conscientious about their money will pay you and your clients big dividends. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Clients are looking at the daily swings in their account when they see big moves in the market. You might consider having discussions with them before this happens to instruct them on what you'll do. Big increases in vol can also signal a change in direction... Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show The ultra-wealthy already have all the money in the world. They don't need you to double their money. Their main concern is to "not lose." How will you be different from the other managers they are interviewing? It's the differences that sell, so sell them what's in this episode. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Imagine if you had to interview yourself for the job you want. How would you grade yourself for the job you're doing? Would you give yourself a written recommendation? What would you write? Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Good trades make you money right away. Use a time stop to offset risk. Else, you might be too forgiving and acting like an Investment Advisor when you're trying to be a trader. Fight Imposterism within yourself. I made that word up - imposterism. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Bad spots in this context can mean trades that you have no business being in. Been there, done that. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Doing something once is easy. Doing it over and over is another ball of wax. Here's one way to know if you are compatible with what you're trying to do in the markets. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Focus on having discipline and executing that discipline every day. That produces consistency. That's what you're competing with - the ability / inability to do the right thing every day. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When you go long, you want momentum in your favor, not against you. The worse thing you can do is buy a pullback to support and try to sell at resistance. This is small-minded thinking. Wait for the instrument to clear resistance, then buy. There is no upper boundary to the price and prices are relative. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When you're not settled with where you are in your trading, you can find yourself doing things that don't serve you. That's because you want to be somewhere else as opposed to being present. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Ace Greenberg would sell any longs that were down coming into Friday's close. Some traders offset trades in 15 minutes if they don't show a profit. Takeaway: good trades make you money right away. If it doesn't act accordingly. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show There are 2 traders. One has 15% returns and trader #2 generated 25%. Who did better? You can't just say that trader #2 has done better in this regard. We don't know what type of risk #2 had to take on to get those returns. We have to focus on the getting risk-adjusted returns. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Sometimes you need a pep talk or to hear the voice of reason. Sometimes it's not easy to see the 30,000 foot view. Sometimes you can't see where the smoke is coming from when you're standing on the fire. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show "There's nothing you can do that can't be done. Nothing you can sing that can't be sung. Nothing you can say, but you can learn how to play the game. It's easy." -John Lennon Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Think of it like a never-ending culturing of a pearl that is your life. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show It takes many years to develop superior trading & investing instincts that you can count on. Too many traders and money managers unknowingly exhaust themselves day after day by deeply engaging with a process that is both inefficient and based on guesswork. A good first step to fix this: stop reading headlines for trading ideas... Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Like a lot of trading, preparation is a process - of elimination. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show It's an ongoing process... Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show The time is now. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When the instruments in your portfolio are highly correlated you can make bank. When they reverse, they will do so at the same time and you will get hit for an outsized loss. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Chasing the market is a person's inability to deal with regret. Adding to winners is a process where you have a set of rules to add risk when it makes sense. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When you don't have massive amounts of data on your trading, you don't know the probabilities of winning and losing. If that's the case, the trades you put on are nothing more than a gamble. Be careful not to place large bets on anything - earnings, Phase III clinical trials, or elections - your feelings are not facts. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Set your goals around processes that you can replicate day after day. Setting a goal around an object is passionless and not inspiring. It's your behavior that predicts where you end up in life. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Another good reason to have orders to add or remove risk - surprise announcements. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Sometimes markets jump for unexpected reasons. You can have an order sitting above the market to liquidate your position if the market goes parabolic. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Looking at the chart is just the beginning. It's not the map you think it is. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show From time to time, names you're watching will move sharply before you have a chance to add risk. That means missed opportunities. Names that you're already in will move against you - also before you have a chance to act and keep your losses small. Then you're stunned and frozen and you begin the process of negotiating with yourself. Either way, you're losing and there's not much to say about it despite your reasoning. If either of these scenarios sounds familiar, you can use Stop orders accordingly to hedge against such moves. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Frustration is the appetizer to a meal called despondency. If you are unwilling to feel the feeling of frustration regularly, you invite stronger feelings in the future. Use regret to help you make better decisions today. If you want to be a professional PM or trader, losses are a part of the business. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When bad news hits the tape and the stock doesn't sell off, you have a good long trade with more room to go. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show They are related but not the same by any measurement. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show From time to time, you might find an equity that traders and investors are betting against, but they prove all the naysayers wrong. If that stock has high % short interest, and it starts to trend higher, you have the potential to penalize the naysayers who will all have to pay you to cover. Look for high short interest and uptrends. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Great traders are using technical analysis to protect their capital which is job #1. If you know your risk, the entries are not that important. Most amateurs focus on the wrong things for several reasons. They don't have solid goals, they are too short-sighted, and they are not friends with their feelings. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When you're doing well, ask for more money to manage. Ask for a free Bloomberg. Ask for forgiveness of desk rent or fees. Ask for a higher payout on your trading profits. If you don't ask, they own you. If you don't ask, it's knot going to just show up. You have to ask for it. Make your case and have confidence in yourself. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Bet size determines what you make and lose. How did you come to decide your current bet size? You probably guessed and just chose one. You can use Kelly Criterion to figure out the best size after hundreds / thousands of trades. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Sidestepping the large losses will do wonders for your P&L and also build enormous trust between you and your clients. They've already lost a great deal of money on their own or with another manager. Admit your wrong and get out. The client will forgot your being wrong about a name over time, but they will not forget a 40% hit. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Using Relative Strength for stocks and seasonality in commodities are about as far as I'll go in talking about what you can rely on. Most others are unreliable as stand-alone indicators. If 'price' is the input, the indicator only helps you see or confirm what you can already see in the price itself, so just use the price. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You are programmed to behave the way you behave and that makes the results you are getting in your life predictable. The mechanical part of that is how you allocate the funds you manage. You can also backtest running several systems at the same time. Yes, you can do that... Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Don't worry about what it looks like. If you keep your mouth shut, you won't have to worry about what everyone else will say when you slip and get up. They don't slip because they don't have the b*lls to do what you do and take chances. They also stagnate and don't grow. Stay away from these losers. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Just give the money away ahead of time. At least you can steer it to a cause you care about, not a winning trader. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show This includes turning off the tv and having silence. If you're lonely, you know what you can do... Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When brokerage masquerades as prop trading: be careful for what you wish for. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Some traders succumb to buying services and research, or worse, chat rooms. Traders need to be self-contained units. All the decisions that go into a trade need to come from a goal that you set for yourself and one that you have a deep emotional connection with. Traders are leaders and need to be decisive. Subscription newsletters don't teach you to manage risk. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You are programmed to behave the way you behave and that makes the results you are getting in your life predictable. In order to change that - if you are not satisfied with your results - you need to change that programming. I've seen people that you would otherwise count out make enormous strides in their lives and attain great success because they got clear and set goals, eliminated non-productive activities, reset their paradigm, and executed day after day. When you focus on 'process' you will get the results you want. If you focus on the results first, it is also predictable that you will lose interest because you have no emotional attachment to what you're doing. An example of this type of mindset is setting a goal such as making a certain dollar amount from your investing or trading.

The goal should be about attaining that dollar amount from the result of specific behavior - the behavior is the goal - not the dollar amount.

And when you attach a powerful emotion to your behavior, the odds of your hitting your goals change to greatly in your favor.

You can achieve the success you imagine if you want to - it comes down to relative strength.

The question becomes "are you going to be remain uncomfortable sitting in your current dirty diaper getting the results you think you don't want," or "are you going to be uncomfortable making the changes you want?"

You get to choose what type of discomfort you want in your life.

"And the day came when the risk to remain tight in a bud was more painful than the risk it took to blossom." - Anaïs Nin

View Details

Subscribe to the show In order to affect the change(s) you need to make, you need to get out of your comfort zone and create new habits around that behavior. From what I've read, creating a new habit is going to take approximately 2 months. Take it one day at a time. Next thing you know, you'll have a week of new, more productive behavior behind you. Of course, you need to have a plan that you are emotionally connected with to drive you. Reach out if you're having trouble getting connected to your goals. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Play your game - don't try to become someone or something else when the markets go against you. Stick to your knitting - the market will continually morph to try to get you out of your mind so that you betray yourself. I misspoke on the show - the Russian hockey coach who succeeded Anatoly Tarasov was Viktor Tikhonov. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You have the right to 'not' participate in the markets - that's an edge. It's a good time to reach out to potential clients and gather assets to manage / trade. When markets are under duress, so are the people who have substantial assets at risk. They need help and you're just as good as the next person to provide it. You just have to believe that you are... Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Upside movement for long-only traders and investors can induce you to buy back into a falling market. This is your emotional system running your trading system. Even pro traders have strong emotions, but they don't let them undermine their trading. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Metamorphosis is a part of life, but not when markets are in turmoil and you are bored. Becoming a different trader because your main model is out of favor for the time being is a path to losing a great deal of money. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you jump the gun, you're satisfying an emotional issue not a financial one. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Let go of what's not working and watch your results take off. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Specialize one style of trading on one asset class. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When you stick to your knitting, you make more money. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you have blow out losses, it could be because you are reluctant to lose smaller percentages of capital. Sit on your hands for larger gains. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Why did you make the money you made? Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Look at where your returns are clustered. Work backwards from there... Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You get paid to execute, but stay in your lane. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Winners rotate. What made you money through the end of August, might not be the same names worth being in going forward. Be careful trying to buy the same stocks or contracts after you get stopped. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Poor trading is rarely about not knowing what to do - it's in the poor execution - and that's an emotional and psychological issue. Know thyself. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Avoid indecision in your behavior and don't join the crowd in theirs. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You can adjust your bet size based upon the probabilities that you discover from your backtesting. Keeping your losses small is the hallmark of professional trading. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You can simulate a trading model across any asset class. Make sure you test at the portfolio level, not one name at a time. Two, add back in the instruments that have been delisted or that don't trade anymore in order to help offset survivorship bias. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Setting a goal of "I want to make $1 million in my trading," is very different that saying "I want to do the daily activities that will lead to my prosperity." Make sure you goal is based upon your behavior, not the result of the behavior. Behavior predicts where you end up in life. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

When you manage your time better, your life gets better - and so does your trading.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show When you don't have a trading strategy or plan, any outside idea can look appealing. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

You have two portfolios that you're running at the same time: the risk you have and the risk you want.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Don't fall into buying pullbacks because you don't have a plan and the biggest feeling running through you is regret. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Don't be the uncertain element of your own trading. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Goal setters put their happiness in their goals and set the world on fire. Be one of them and surround yourself with them. Think like a portfolio manager and cut your allocations to negative people and energy. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Sometimes it's the things that aren't being said that have the most power and impact on an individual and organization. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show There's a trading plan and a business plan. You have to execute both. Don't forget the sales and marketing... Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you can't pull the trigger, you're in fear and have indecision.

The best traders are leaders and leaders are decisive.

  Click here to  get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Watch your language. You can convince yourself on a whole host of things without any basis in reality or truth. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

You get to decide how you want your life to unfold.

Design it. Execute it. Live it.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show All your questions about a trade are answered at this one point... Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You need a set plan ahead of time in order to manage risk and keep your biases at bay. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Entering Stops and waiting for the market to come to you means you're not chasing the market. It also means that you have conviction about adding or removing risk at the stop price. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Be the shot in the arm that someone needs. It will be good for both of you. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Pro traders plan for success. So should you. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Uptime your charts to dailies and weeklies and stop getting knocked out of otherwise good trades. Longer term time frames are less random than intraday charts. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you don't address the strong feelings you're having while trading, they own you. Make them advocates, not adversaries or antagonists. You can ignore them, but they will return time and time again - guaranteed. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

Reversals might happen before your ATR-based stop is hit or the structure is broken.

Use these reversals to improve your entries and exits and thereby improve your P&L.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show There are many ways to trade gold or silver, for example. Here are my thoughts on the best way for you. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Let the market tell you when the move is over. Don't use price targets and stop missing out on the larger moves ahead. In the process, you'll eliminate regret. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Stop orders are like your personal sentries that do nothing but add and remove risk from your portfolio. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

Go to school on yourself and learn from your mistakes.

You'll be your own best teacher.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Running your screens and having your orders ready the night before stops you from getting sucked into FOMO trades and shooting from the hip. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show All you need to do is fund your account and manage the risk. Keep it simple and enter your protective stops. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Bullish chart patterns show crowd behavior, but they can easily disappoint you. This is where that saying "intuition becomes into-wishing" might come into play. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show ...your position is probably too big. Learn how to trim the hedges along the way so that any particular earnings announcement is irrelevant. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You can fantasize about how much your account balance can explode if you get lucky. However, margin cuts both ways and you can get blasted more times than not. Protect your capital and play superior defense. Treat every trade as serious business. You can learn to do great things and grow your funds systematically. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show One bad earnings report can impact several of the other names you own. Trade your equity curve and cut your position sizes if vol increases. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Making a big bet before an earnings announcement is a gamble. You can't infer what the company is going to report because "you see something" in the chart pattern. Here are my thoughts. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show This might be too "inside baseball" for some, but you can study the simulated backtest of a model and use the insights gained to go back and adjust your rules. You can segment the winning trades from the losing trades and study both outcomes to improve your entries, bet size, and exits. By doing so, you might be able to improve either your winning percentage or the expected value of a trade for the rules you'll follow. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Trading systems have different accuracy rates and ratios between winners and losers. Knowing these ahead of time might better help you determine which is most suitable for you - at least to start with. A trend following model might have 30% winning percentage with winners being 3 times the size of the losers. A chart reading model might have a 70% winning percentage, but a winner / loser ratio that might be smaller than 3:1. Both can have a positive expected value of a trade, so they can be worth following. One might be a better fit for you although both are expected to make money. Of course, knowledge of yourself first is the best way to evaluate trading rules when determining compatibility. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Your data feed might only include what we call normal trading hours or "outcry only." For some of you, it might make sense to analyze what happens in pre-market and after-market activity. You may be able to define a small edge to either improve your entries or exits. For your exits, you might be able to effect a trade in the pre- or after-market to improve your price and limit losses or to better protect unrealized gains. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Most system traders can screen for tickers by price, volume, and volatility. You can also add some overlays if you want and test those parameters also. Here are a few thoughts on running screens. Be mindful to find the data on the securities that don't trade anymore and add that data into your overall data to screen. Else, you'll only be looking at survivors and it would be good to know how your rules would have worked if your model had initiated longs on ENE or BSC that eventually went bust, or other names that were taken over or merged. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Most system traders do not just increase their bet size on a whim. Many have their risk systematized to be a fixed percentage of their overall equity conjugated with the volatility of the instrument. They increase their risk systematically and only trade larger when their capital base grows due to gains or from adding capital to their account. Chart readers can do the same thing although they have to do it by hand. Be careful if you increase your size because you think "you are on to something..." and get too big too soon. That can come from hubris which we spoke about recently in another episode. You can look at your winning percentage and ratio of win size to loss size to help determine if/when you should increase your bet size / risk unit. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show In this episode I recall how I got stopped on CSCO for a loss and why that was a great trade. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If someone you know is bearish and they're not short, they're full of it and probably like to hear themselves talk. Do them a favor and call them on their nonsense. Ask them where their stop orders to enter the market are. I find this happens with people who are looking for attention and trying to show you how smart they are. What a snooze. I don't care about opinions and theories. If this is something you're falling victim to, you can gauge your own level of self-deception by listing all the entries you have for your theories. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Selling short on valuation at historic highs is a quick way to lose a great deal of capital fast. Selling long on valuation is a quick way to incur staggering opportunity costs and missed opportunities. Don't try to be smart - focus on making money. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Buying a pullback works in raging bull markets until it doesn't work anymore. Is it a 2-stage pullback...or is it the end of the trend? You don't want to be buying when the trend reverses. Know what you're going to do beforehand. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show It's easy to get blinded by our success when we're in boom times like we're in now. If you get used to it, you can lose perspective and forget that sometimes what's around the corner is going to be more than just a short-term pullback. In this episode, Michael Martin remembers what happened during previous boom times in his career for context. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show You want to trade rules that are robust. That will give you a better chance of surviving when the markets inevitably change. Backtest your rules with a minimum of 10 years of historical data. Click here to get your free copy of The Inner Voice of Trading audiobook

View Details

Subscribe to the show I don't worry about trying to make realized gains each day. It's not my goal to reinvent myself each day - I want the market to do the work for me. Focus on process and the results will follow. Click here to get your free copy of The Inner Voice of Trading audiobook

View Details

Subscribe to the show Raise you hand if anyone from your clearing member has called you when you're in a protracted drawdown or are overtrading and they tell you to stop... Click here to get your free copy of The Inner Voice of Trading audiobook

View Details

Subscribe to the show

You can count on "the other guy" to do the wrong thing most of the time.

Click here to get your free copy of The Inner Voice of Trading audiobook

View Details

Subscribe to the show So let's say you get five signals. You don't know which one to take. Will you take all of them with the requisite amount of risk that you're willing to take, then you let the market activity unfold. The market will tell you which one's going to be the best one. You can count on it. So if you're taking it home with you, you have your protective stops, whether you're trading off of a reversal, or whether you're doing some kind of swing trading technique, or whether you're trailing with ATR or whether you're trailing with structure, there's a whole bunch of ways you can offset winners which are hard to visualize on an audio only format. So I'm not going to get into it here, but the market will unfold accordingly in ways that you can maybe predict - maybe you can't. But the point is that if you sit on your hands and let the auction process work, the market will let the individual name one of the five, maybe even two of the five, raise their hand and say, I'm the biggest winner. Now, maybe you'll be lucky enough to say, Hey, that was the one that I was going with. But you don't know. There were times when in the mid 2000s, when China was buying up as much of the commodity markets that you could possibly get, you'd get signals on the same day in tin, zinc, nickel, high-grade, silver, and gold. And you'd be sitting there saying I got the entire metal complex is firing longs, which ones do I take? What do you think you should do? Click here to get your free copy of The Inner Voice of Trading audiobook

View Details

Subscribe to the show Focusing on your process can keep you placated as we said yesterday. It can also help you improve your attitude. When you're not chasing your tail or going outside the boundaries of your trading rules, you're conserving a great deal of energy. When you don't react, you develop of quiet sense of confidence about you. It doesn't mean you're infallible, but you're in control. You can take that feeling of being in control of your behavior and repurpose it. Then it begins to compound. Day after day, week after week - after a few months you can look back and see an change in yourself. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Focusing on your process can keep you placated. It can also help prevent you from getting too emotionally invested in an outcome that you don't have any control over. This is good advice and something that can help in life also. We talked about having an expectation about a trade that you've been stalking for several weeks. One where you saw the set up a mile away, yet it reversed in your face. I've learned the hard way that such expectations have built in disappointments. When you focus on the process you go to bed at night having done your best - and that's all you can do. You're powerless over where the markets go. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

What parts of your process can you delegate and even improve your results?

You can learn to trade and make money without being there.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

You can spend weeks stalking a chart and have the set up work perfectly, only to have the name reverse, sometimes in the same day.

You put all this work in and the name doesn't have the common courtesy to go up...

How do you feel about that?

For some of you, it can lead to disappointment or anger.

If that's the case, you can sometimes become derailed and trade on those emotions - whether you have systematized rules or not.

It's important to remember that we are guests at the market's party and we're lucky enough to be invited in the first place.

False breakouts and reversals don't care when you get long.

Sometimes the market is not amenable to your trading style.

It has nothing to do with you or your ability so you might consider not taking it personally.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show It happens from time to time that you make a huge win. You should celebrate it and understand that they don't happen all the time. Many traders will intuit that they are "on to something" and without any thought, start to trade larger. They also start trading names or asset classes outside of their core ability. Plan to grow methodically and not get to invested in the hubris that we can feel after large wins. Someone a lot smarter than me said "pride is a big banana peel." If you stick to trading a fixed percentage of your assets, you'll be fine. You can condition yourself to feel the same about all your trades - you're just following your system. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show What does trading mean for you in your life? What do you want your money to do for you? When you know the answer to some of these type of questions, figuring out the best asset class and trading style will be easier. Know and master yourself first, then figuring out the trading part is much easier. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Attitude is the one thing that I can't teach you. I can help you change your paradigm and that in turn can help you have a good attitude. However, you're going to want to do the work. Sometimes attitude can carry you when nothing else is working. According to General James Mattis, to the "USMC, attitude is a weapon system." Think about that for a minute... How do you think you can use this information as you manage risk? Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show If you know someone who trades across asset classes and trading styles, they are likely gambling. A person becomes the casino when they stick to one asset class and one style of trading, and get that down cold. Making predictions, fading the Fed, and fighting the tape are all examples of gambling. Tell them to keep their opinions to themselves and focus on getting good at one thing, and grow from there. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Many traders learning the craft are governed by the need for success for public purposes. Some like to peacock. Some are just flat-out greedy. You'll make a more progress sooner if you're clear about what your motivations are. In the end, consistent behavior predicts where you end up in life, not throwing around size trying for hero trades. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

A trader can gun for 100% RoR, but at what cost?

You need to conjugate what you're doing with risk (and time).

Your open trade equity shows allocators the risk that you're taking for the returns your endeavoring.

Most allocators are looking at daily vol and risk-adjusted returns.

If your ethos is to chase hero-sized returns, you have to know that those are often a result of good timing.

And if you continually trade too big, it will catch up with you - it's just a matter of time.

Slow and steady wins the race.

Know what you're trading for.

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show

Commodities are cyclical whereas equities are secular.

You can take advantage of that cyclicality by trading seasonally or by trading commodity spreads.

When you combine that with good risk management and maybe some trend following tactics, guess what happens?

Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Alan "Ace" Greenberg had a great rule that he mandated on the Bear Stearns trading floor: "If the name is down coming into Friday's close, it trades." He didn't wait for stops to be hit. If the prop trader was long and there was an unrealized loss, they sold it before the close on Friday. This simple, but brilliant rule is one that you might want to employ. By selling your losers and going flat, you have a clear head that night and the rest of the weekend. Life is good. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Things don't always go as planned. Give yourself some room to expected the unexpected. This is the best way to hedge against your blind spots for which you have many. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Your sole purpose in life is to play superior defense. Where do you think you can express that ethos the best? Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

Subscribe to the show Nothing happens randomly. You decide that you want to trade voluntarily. Whatever happens after that is your responsibility regardless of the outcome. The best traders I have known over the years are the ones who live in a paradigm of personal responsibility. Let go of judgment of yourself and others and focus on risk management. That's what traders are at the end of the day - risk managers. If you don't manage risk, the risk manages you - and it's your fault. Click here to get your free copy of The Inner Voice of Trading audiobook.

View Details

I think it's important to trade small at the beginning of your career so that you can find out what your edge is. Once you have it, then you scale and trade larger.

You should think of it like panning for gold (to find your edge). The goal isn't for large trading gains right away, but to discover and shine the light on your edge.

View Details

It's more than rate of return...

View Details

Marshall Ulrich is an American legend.

As a mountaineer, he's climbed the Seven Summits - completing each on his first attempt.

The Seven Summits consist of Mount Everest, Aconcagua, Denali, Kilimajaro, Mount Elbrus, Mount Vinson, Puncak Jaya, and Mount Kosciuszko by order of elevation.

Marshall has completed 130 ultra marathons, each over 100 miles in distance.

Most notably, he's known for completing the formidable Badwater 135 ultra marathon across Death Valley 18 times - winning the event 4 times - including 3 in a row.

Temperatures can reach 130 degrees F during this race in July.

View Details

Steven M. Sears is a contributor to Barronsonline.com and the former editor of the Striking Price column of Barron's magazine. He is the author of The Indomitable Investor: Why a Few succeed in the Stock Market When Everyone Else Fails published by Wiley.

View Details

Philip Shaw is a farmer in Western Ontario. In this episode, you'll here someone on the physical side of the commodity business discuss how he thinks about what commodities to grow, how he manages risk, and his thoughts from several decades in the commodity business.

View Details

Thanks to everyone who wrote in about September 11. Here are some of my memories from growing up in Manhattan and spending a great deal of time near WTC 1 & 2.

View Details

Don't build it so they will come. There is no connection to spending money you don't have in order to cast a bigger shadow when you have zero potential clients.

Start small. Nothing wrong with it. Grow as your defined needs grow.

View Details

If the instrument you're looking at has a daily volatility measurement that is greater in dollars than you are willing to risk, you must pass on the trade.

View Details

Money you don't spend when you're starting out is money that you don't need to earn. And that's important when you don't fully understand what you're doing.

View Details

The trading world has changed since I began, but the tenets of good trading are still in tact.

Here's how I would counsel myself at the beginning of my career based upon what I know now and the experiences I've had - both good and bad.

View Details

Focus on one style of trading. Build a system for client communications also. Else, your business is going to run you.

View Details

Cannabis Green Book partners with Equifax and Matt and Michael revisit the High Times IPO.

View Details

Michael Martin and Peter Borish discuss the current environment and when it looked like this before.

We also speak about what inspired him to develop his analog model that anticipated the market crash in 1987.

Peter is on the faculty at MartinKronicle and also joins the "live" Mastermind to answer our students questions.

View Details

Hari Krishnan returns to the show to discuss how the VIX can play a role in portfolio diversification, not unlike Managed Futures.

[Sorry about some of the audio. Hari's schedule is very tight and he was overseas at the time of our recording. No matter how many times we hung up and retried getting a better connection, nothing worked.]

View Details

Shareholders of GWPH need two approvals in order for their investment to pay off, one of which they have - the FDA approval.

Trickier to understand is the DEA approval which needs to happen by the end of September or 3 months after the FDA approval.

View Details

Check out their videos at YouTube also.

View Details

If you're wrong 60% of the time in good markets, why lose on your optimal bet size right away?

Cut that in half for your first entry and then add the second half to your winning trade...

View Details

You don't have more control over an instrument by downtiming to 10 minute bars? Trader smaller if you're afraid to lose and trade off of weekly charts, then daily.

View Details

Jeff Dorman is a Portfolio Manager and Head Trader at Arca Funds in Los Angeles.

View Details

Tape readers have had to evolve their process with the proliferation of HFT. This is just one example of what you'll face over the course of your career.

View Details

Matt Dula is an expert in the marijuana investment space. You can find out more about what he's doing at Cannabis Green Book.

View Details

Trim the hedges or not?

View Details

When directional momentum stalls after you've established your position, here's what to do.

View Details

All trades have a beginning, a middle, and an end. Most traders focus too much IMHO on the entry (beginning) and the exit (the end).

Mismanage the "middle" and it can mean all the difference between a winning trade and losing one.

View Details

Revert to more simplicity when you get in a rut.

View Details

Great traders focus on their behavior all the time.

Consistency
Perseverance
Persistance
Determination

When you're starting out you won't have the luxury of having these feelings if you blow up two months into your trading career.

Keep your frequency of trading to a minimum until you learn to trade one style and own it. Limit yourself to initiating two trades a day, else you might find yourself chasing everything that's up $2 / share because you feel you're missing out on many trades.

View Details

Most traders fail to reach their true optimum ability and optimal performance because they have no sense of imagination and the don't challenge themselves.

View Details

The biggest problem with being a chart-reader only trader, is that finding names for your watchlist is terribly inefficient.

View Details

Don't plan to get tasks done, else you'll be stuck in blue collar despair.

Make goals that include increasing assets under management, revenue, net income, and consistent behavior around following your rules.

That's how you'll grow your business and your wealth.

View Details

When I set personal goals alongside my business goals, I tend to hit both. When that happens, life is good!

Already hit your goals? Set new ones that are realistic and attainable.

Don't forget to set your "FU" or stretch goals also. You might not hit them, but you get your subconscious mind thinking about them even when your conscious mind is working on the attainable ones.

You just never know...

View Details

You need two variations of your marketing message: one for individuals and high-net-worth families, and another for institutional investors and allocators.

These two segments speak different languages and their concerns are very different.

For example, if you launch into your pitch loaded with industry jargon to a HNW family, they won't understand a thing you're saying, whereas the allocator will.

If you waver too much, you'll inadvertently end up trying to be everything to everybody. That tactic doesn't work.

Learn to speak to your audience and be mindful of the subtle variations that will make you a success speaking to both segments.

View Details

Write out a short list for some of the things that you're grateful for. This is your Gratitude List and it can help you feel a little bit better about things when you think nothing is going right.

You can try this just when you think you're gas tank is empty and you don't know where your next source of motivation might come from. Do everything you can to remain persistent and determined.

View Details

If you have no trading edge, where you execute your business doesn't matter.

View Details

Putting space between yourself and the market can be refreshing.

You don't have to do this only when you're losing.

View Details

You can learn trading faster intellectually rather than emotionally.

That's why it's easy to understand, but hard to do.

Your emotions can get the best of you, stop you cold in your tracks, kill your confidence, and keep you at the level of a very knowledgable spectator.

View Details

Just like professional athletes and competitors prepare mentally for a match, so can you.

In fact, you have to. You can't just wing it.

Intentions equal results.

Put it in your mind that you are going to achieve your goals then go and do it.

View Details

Here's a great example of how to combine your passion for one area of your life that can potentially benefit your business.

View Details

Michael Martin discusses how you can get potential clients to come to you.

View Details

People do business with people they like - so be likable.

If you're a fly fishing nut and know all the best spots to fish, you can find like-minded people to cohort with by joining a group or association that is passionate about fly fishing.

Or even better, you can start a weekenders fly fishing getaway for which you are the guide.

Successful businessmen like to fish and be outdoors, so it's a good group to affiliate with. They have the success, the business acumen, and the capital to risk to either back your company or become clients.

View Details

Setting personal goals in parallel with you trading goals can have a 1+1=3 type of payoff.

For one, achieving personal goals can give you a boost of confidence and raise your self-esteem. I generally believe that it's impossible to do anything well if you lack confidence.

Trading is a game of failure and learning to succeed in the face of low accuracy and high expected values can help you develop the mental stamina necessary to survive periods of time where you have no evidence of any trading skill.

Two, having personal goals keeps your brain in a mode of "figure-out-ability" that is critical for trading success. Your trading tactics and methodology is going to come from much trial and error.

When your brain is conditioned to figure things out, you're in a natural state of "curiosity leads to revelation leads to eventual solution."

When I have had to come to the trading whiteboard "cold" so to speak, it took me much longer (days and weeks) to get my brain in gear to figure out a solution.

Lastly, you'll meet new people along the way when you have similar interests. People tend to like and become friends with other people who share experiences.

Maybe some of these people would be interested in learning about your trading process and hiring you to manage the money?

View Details

Position sizing has the most impact on your P&L, so make sure you get it right.

In strongly trending markets, you can throw a dart to pick your entry and make a ton of cash.

The position size is the part of your trading algo where the sword cuts both ways. It's also the part of your trading that goes to the core of any self-doubt you might have about your ability.

Trade to big and bad news and bad luck can hurt you badly and destabilize you for weeks or months. Trade to small and never get anywhere for all your efforts (it's possible to trade too small and not have enough risk to meet your financial goals).

In this episode, Michael Martin discusses several things to consider as you carve out your methodology for position sizing.

View Details

Some options trades require you to complete the structure in two steps.

Whereas you don't want to "leg" into intra-commodity spreads, you might consider that a strategy for your butterfly or condor trades.

Instead of putting on a long butterfly all at once, many traders we've worked with are buying call spreads, for example, and then after the market moves selling the call spread above it to complete the butterfly.

This doesn't work 100% of the time, and sometimes you just offset the vertical spread. However, sometimes is does work and you can take advantage of the flexible nature of options to carve out your Reward to risk profiles.

View Details

Michael Martin discusses how it's appropriate for some traders to focus on one market or sector for professional purposes.

View Details

Both winning and losing streaks are "user-defined" so make sure you understand what your trading results are telling you.

Here's one way to know.

View Details

You are powerless over the markets, regardless if you have 30 years of experience or only 30 days.

Focus on your process, because you can't control the outcome.

I believe you need to have positive intention about your trading as "intentions equal results."

Your intention is closely related to your attitude and your attitude affects your judgment, judgment affects your behavior, and behavior predicts where you end up in life.

You can't work backwards from losing money in one month and determine that you are not a good trader. You may have had bad luck or the markets might not be amenable to your trading rules.

You may come to understand that your process needs tweaking to better suit the markets or your emotional makeup. That's what backtesting is for.

If your results from trading in one month are "in model" then all you can do is study the variance between what orders your system generated and what orders you entered.

The same can be said about winning months and good trading.

View Details

In this episode, Michael Martin has a frank discussion about what you need and what you don't need at the beginning of your career.

In one sense, your job is to survive. That means going slowly and playing superior defense.

Many traders keep a full-time job to make sure they can pay their bills before going solo.

View Details

Michael Martin discusses the "triumvirate" that every trader needs to succeed long-term trading the markets.

View Details

In this episode, a reader asks Michael Martin about some of the markets he's trading.

View Details

Most allocators know that you are powerless over the markets. But if you tell them the markets you trade, they'll have a good idea of where your performance should come from.

View Details

Be mindful of all your trading activity and non-activity. Growing too slowly can be problematic, but so can growing too quickly.

View Details

You don't have to double your position to have added to a winning trade.

Try adding 20% to see how it feels.

For best results, you'll have to backtest in a simulator to determine the best location and position size for adding to your winners.

If you believe, like I do, that most markets don't trend and that trends persist, this might be a good tactic for you to look at.

View Details

The hardest part of investing (and trading) is knowing when to take profits. In my trading, I'm using systematic exits.

Harder, is when I have a long-term buy and hold in my investment portfolio and I have to let go of a name that I've had for ages.

See the corresponding video on Disney.

View Details

You can create some interesting spreads between weekly and monthly option expirations.

Some traders buy the longer dated options and sell nearer expirations to pay for them.

Get the MartinKronicle Android App - it's free.

View Details

There are traders whose sole responsibility is to create alpha in only one sector or in one commodity group. Sometimes, it might be in just one contract such as natural gas, for example.

Since most markets are not trending, focusing on one sector can be a challenge if there is no direction or trend. Unless you've been trained...

These particular traders have learned to make money in natural gas regardless of the market environment. That ability did not show up overnight and it took a great deal of trial and error in order to understand the shifts between market environments.

You can get there also, but you have to be willing to run more than one system.

The key to understanding the context of "diversify" here, is that the trader deploys several systems depending on the market environment.

Get the MartinKronicle App for Android

When markets are trending, they're long or short. When volatile and choppy, they have vol crush trades on. When consolidating, they have credit vertical spreads. And when seasonal, they can create calendar spreads in futures. These aren't day traders either.

You can study the relationships between an underlying security and all the related instruments to find your trading edge.

Admittedly, some of them have access to the cash commodity markets too, so that gives them many more combinations of relationships to study.

View Details

I don't believe there is anything that can be called "advanced trading." Most of the time that I see that expression, it's in marketing literature.

The best trading rules that make your money are easy to understand and simple to execute. Words like "advanced" are there to feed your ego.

My take is that if a trader has a strong sense of self, then finding the right trading methodology is easy (or easier). Trading is largely psychological and emotional and the best traders acknowledge who they are and what they can handle, and act accordingly.

I've said before "if you don't know who you are, then what you know doesn't matter" when it comes to trading.

Get the MartinKronicle app for Android.

We'll be adding much bonus content that we can't include in a podcast or blog post. Apple iOS version coming soon!

View Details

There were times when I invited huge vol to my portfolio. It would run up 20% and then dive-bomb to -20%...that's intraweek!

The portfolio comprised of outright directional trades including long/short futures, debit option trades, and long stocks.

What I found over time though, was that all this ebb and flow created an equity curve that looked like a heart monitor.

I had to find a way to create positive slope to the curve. That's how we keep score.

Get the new MartinKronicle app for Android

Moreover, it wasn't about the instruments that I was trading nor the combination of them, but HOW I was trading them.

Once I determined that my up days and weeks were from a small semblance of skill and not luck, I had to learn to keep the profits that the market was "giving" me.

Backtesting, I found the optimal points where I had to cut my losses and, more difficult than that, where to take profits without unwinding profitable trades too soon - to me, the hardest trade there is to make.

In this episode, I remember how I had to make tough decisions around blue-chip names when you're taught that selling them is a sacrilege. (Watch the attached video to see what I mean.)

Our first order of business once we add risk, is to keep losses small. Once I did that in concert with learning tactical ways to take profits, my equity curve took off.

And that's not having to change my orientation to trading, the instruments I traded, nor the timeframes within which I traded.

Those two seemingly small adjustments led to huge gains and I didn't have to do that much to turn this situation around.

View Details

Frustrated about your trading? Maybe you're fine right where you are and you just have to accept "what is" and take life on life's terms.

I see this a lot in traders who always want to be somewhere else when they are doing fine right where they are. If this sounds like someone you know, listen in...

View Details

In this episode, Michael Martin discusses the evolution of your trading rules and system design.

View Details

Although it takes a bit of time and effort, building a systematized set of trading rules is worth it in the long run.

Instead of reading charts to come up with trading ideas subjectively, each evening you'll run your trading rules to generate orders which you'll enter the following morning.

In this episode, Michael Martin recounts how he developed his original model and how it evolved into what he's doing today in trading and teaching building models and systems.

View Details

Start with long-dated Call options and turn them into a Bull Call spread by selling the upper strike when the underlying reverses down. Cover that leg when the vol crashes.

You can create other structures too, such as condors or butterflies all based upon a core holding of long dated calls.

View Details

If you put every dollar you have to work, you don't give yourself any room when Murphy's Law kicks in.

If you keep some dry powder, you'll be able to able to withstand some shocks to the system, as well as have capital to deploy when something falls into your lap.

View Details

Michael Martin interviews options trader and portfolio manager Hari Krishnan on the current environment and how traders can position themselves with options to capture greater profits.

Krishnan is the author of The 2nd Leg Down: Strategies for Profiting after a Market Sell-Off.

View Details

Crypto investing is missing some key components that an investor's are used to in trading equities, options, and futures.

In this episode, Michael Martin discusses what's missing and why you should measure 8 times and cut once in the crypto space.

View Details

With the likelihood of the fed tightening, investors who rely on certain instruments for income are in a tough spot.

They can use options to transfer the risk and hold their current positions.

View Details

Key inflection points can happen with the fundamentals as well as the technicals.

View Details

I've seen too many traders try to trade something on a hunch because they thought earnings were going to be a blowout.

It's much more complicated than that.

There's the EPS, top-line growth, expenses, one-time charges, and forward-looking statements that get reported.

I've seen companies beat by $0.02 per share, but the forward-looking statements are bearish or cautious and the stock sells off.

Trading on hunches is a gamble: you don't know the probabilities nor the expected values.

If you can't model it, you can't trade it.

View Details

If you believe the adage that "good trading is boring," then system trading is boring to the nth degree.

There are days, sometimes weeks, that I don't generate an ORDER, never mind a trade. Then there are times when there are so many orders, you have to write them all out first in a general ledger and number the tickets.

On the flip side, system trading is also very peaceful because I'm able to scan thousands of instruments in less than a minute and not worry that I'm missing out of an opportunity. That is a mental advantage if nothing else.

View Details

Focus on your process and stay out of the results - you're powerless over them.

All you can do is control the "controlables" - that is, your behavior.

View Details

Seasonal commodity spreads can be very a reliable type of trade for your portfolio.

While commodities are surely not for everyone, commodity spreads are considered "hedged" because the trader is simultaneously long and short the same commodity but in different expiration months.

A great source of information on spreads is at Moore Research Center. You can find them on the internet at www.mrci.com.

View Details

Some investors will test you by asking you questions that are deliberately off the mark.

Stick to you message throughout even if they try to knock you off balance.

You might take a meeting as a CTA and someone interviewing you might say something along the lines of "We're looking to allocate $10MM to a crypto-only portfolio in the next 5 days" when they know you're looking for assets.

It's ok to laugh at them and say "good luck - I hope there is a short selling component to the model."

Tell them that it's "not terribly wise to make such an allocation on short notice." Most want some fight in the dog.

Stick to your message and what it is you can do and leave it at that. Otherwise, you'll look amateurish if you're all over the place.

View Details

Every once in a while, the market will open below the point where you would have stopped out your long position or above where you would have covered your short position.

The best practice is to offset the position right away. Bad situations become worse.

Your first loss is your best loss.

Aggravating as it might be, this has not happened enough to me to convince me to stop holding positions overnight or over the weekend. In fact, I'll go so far to say that holding my positions are what I attribute the majority of my gains to.

View Details

You need a great deal of help when you're getting started. That doesn't mean you have to give away the house in order to get it.

For one, I'll help you as much as I can with what I know that will save you time and money.

Second, pay as you go compensation plans have the most flexibility, as opposed to "you were here at the beginning, there are two of us, so you get 50%." That's a bad deal.

When you align your goals with your overall behavior, you'll have harmony in your life and business.

View Details

Coach your clients about what they should expect. It will save you tons of time in work and having to explain things, and in the process make you look like a pro.

View Details

It's the differences that sell. Your potential clients are looking for more than just performance from you.

Spend some time taking notes on this episode if you're looking to get new assets from potential clients.

View Details

There are a ton of moving parts to your trading business. Pick your partners carefully - sometimes you can't unwind things as fast as you set them up.

Everyone flirts hard to get your business and the best deal you can strike is on the day you walk in the front door - it only gets worse after that - and that's why people change firms.

Measure 8 times and cut once.

View Details

If volatility increases while you have an existing position on, you should probably cut the size of the trade down to reflect the new vol.

View Details

Market vol is increasing due to higher level of discomfort and uncertainty, but don't go adding new indicators now. They're not as telling as you'd think.

View Details

In this episode, Michael Martin discusses the various reasons you might consider to add short selling to your portfolio.

You can short sell for real returns, or you can use it to cut the vol in your long-only strategy.

View Details

If you enter a short sale late as can happen with breakouts to the downside, you might have it rally in your face before it becomes meaningfully profitable.

In today's episode, Michael Martin discusses one way that you can enter the market short with a more improved entry - and potentially less risk.

View Details

The most valuable information is not necessarily the recent data.

Michael Martin discusses what you can learn from a historical chart. Names mentioned CMGI, Munder Net Net Fund, Vertical Net, Cronos, Bitcoin, and Cisco.

View Details

Most rookies are looking to take profits when the have a winning trade. Professionals look to continue riding the trend for all it's worth. As I've said here before, inexperienced traders need the boost to their self-esteem by posting smaller wins to validate their behavior as traders. Small or not, a win is a win and that's what's important to them. We advocate something that takes a little more evolution.

I have found in almost 30 years of teaching that a trader's unwillingness to add to winners is more of an uncomfortable, emotional problem than it is to understand the math involved.

Like any behavior, it takes some getting used to, but if you do it enough times, you can make it a good habit and replace the bad habit of having price targets.

View Details

You're doing the work anyway, you might as well get paid for it.

Study how the security behaved after you took profits at your price target. What percentage of them continued to move in your favor?

What was the average gain beyond your price target that you might have earned had you stayed in the trade?

View Details

It looked like some of the markets were about to run, but they all came back.

How do you handle snap backs?

Michael Martin discusses how he handles quick reversals in the markets immediately after he establishes a position.

View Details

When it's time to chill, it's time to chill. Spying on the market during the time you've earmarked to put some distance between yourself and the market defeats the purpose of the break.

View Details

I don't use them per se, but I test the intraday data around key inflection points in a simulator. I don't look at nor study intraday charts.

View Details

Your max risk per trade is just that - your max. You might consider trading within that risk measurement. Why? Murphy's Law. Take that into account when you are position sizing your trades.

You can normalize risk across all instruments so that you can think of each security in terms of risk units, that is, shares or contracts per unit. That's achieved by calculating the volatility of each instrument. In position sizing this way, you won't trade one more aggressively than another. They'll all be the same risk % to your overall account.

For example, given the prevailing volatilities, 26 contracts of Sugar might be equal to only 6 contracts of Crude Oil in terms of percentage risk to your capital. Each would be a 1% risk unit even though Sugar has 4x plus more contracts than Crude Oil.

View Details

You have to surrender control for this strategy to work for you.

If you're hyper-vigilant once you're filled, or you have a strong emotional need to monitor your trades tick-by-tick, this isn't for you.

View Details

Despite the enormous "want" from investors from this growth opportunity, the stock is low priced. Why is that?

Does price move first and fundamentals follow (as PTJ said), or is it the other way around?

IMHO, price is the only thing that will tell you the truth, and in this case it doesn't matter if you uptime and downtime the chart - the answer is the same. Investors are in a "wait and see" mode.

Two things the price tells you are 1) what everyone is thinking about the prospects for growth; and 2) the overall trend of the security. If it's cheap, it's cheap for a reason.

View Details

Ultimately, blockchain technology is solid, but Bitcoin is a tulip bubble.

View Details

Don't put all your hope in one trade. If you trade a basket of names, the net upside can be greater than that of the one name you're counting on - and you've diversified your risk.

Trade smaller positions and manage risk with protective stop order placement.

View Details

In his guest post at MartinKronicle, Victor Sperandeo stated that he believes the market high is in for the year.

Maybe he's wrong - maybe he's right.

But if you trade the S&P 500, listen up. Trading rallies in a downtrending market is a different environment - and different trading style - than trading long in a bull market. It's a new dynamic that you have to get used to, mostly by doing it.

If you become frustrated, think about trading smaller or sitting on your hands until you learn how to short the market or find another vehicle that works for your trading style.

View Details

Michael Martin discusses the roles of luck and skill in your trading and offers a fool-proof way to create a greater amount of luck.

View Details

All you can hope for is that you use the frustration to motivate you to find another solution to decrease the frequency of what brings forth the frustration in the first place. That is of course, unless you want to continue feeling frustrated - then keep doing what you're doing because you already have a perfect system of generating frustration.

View Details

Has this every happened to you?

You're in a great trade, you have unrealized gains, and you're feeling good about your execution.

You're about to add to your winner, when the market craps the bed and takes the entire market down so that your gains are wiped out in less than an hour.

Worse, the market rebounds entirely over the next few days as you watch your former position rally to new highs.

Do you chase it? Not a good idea.

Getting back in because you're angry is another form of revenge trading.

If you don't have a bona fide rule for re-entering such a trade, consider looking at reversal patterns.

If your market sells off with the overall market, but rebounds, it might show up as a reversal pattern.

A good one to start with is Victor Sperandeo's "2B Reversal" as depicted in his book "Methods of a Wall St. Master."

You can trade this as a chart pattern or code it into your systematized rules.

View Details

You will get fired for trading in a way where you don't have a defined edge faster than you will for poor performance.

View Details

Your "leads" or potential clients are not going to understand some of the industry terms that you might use during your presentation, so they are not going to know what questions to ask.

They are not going to want to look stupid, so don't expect them to ask you what a certain word means.

Here's what I would do:

1) avoid jargon - don't use big words that the average person won't know

2) stay on message - answer every question in terms of how your system or trading rules would perform

3) take a breath and take your time - it's better to take a beat and put some thought into your answers, than be rapid-fire. It's not a race.

4) "I don't know" - you'll gain a lot of respect if you have to say "I don't know, but let me get back to you in X days." You might have to research something or double-check on an idea before you open your mouth. It also gives you a specific reason to follow up with them.

Don't let curveballs throw you and take you off on tangents. Focus on your trading rules while your trading, and when you're marketing.

View Details

This is a brief glimpse of some of what we cover in our courses.

No one wants to hear how great a trader or PM you are in a raging bull market. Everyone has it all figured out.

Then something bad happens and they're equity gets hit by 10%...

You enter the picture and show people how you can remain calm under pressure and capture the majority of the up moves and not capitulate at the market bottom.

Position yourself as a trusted advisor who the HNW individual will hire no differently than they would an estate planner or CPA.

View Details

Live instruction from Michael Martin who is joined by Peter Borish and Brynne Kelly.

Other lessons by Scott Kaminski and Tony Saliba.

Plus, special guests...

View Details

The more frequently you trade, the worse it is.

View Details

Peter Borish joins Michael Martin for his weekly visit.

View Details

Any group of unsophisticated investors or traders who are committing real capital can push the markets around based upon what they're reading in social media. You have to respect their collective power.

My job is still to protect capital despite or regardless who I trade against. A group of pikers acting in concert can run me over despite my methodology and 3 decades of experience.

View Details

Glaring at the screen isn't going to generate trade ideas. Volatility does not mean opportunity. Your trading plan has to be set before you take action.

View Details

Risk a fraction of what you're normally risking per trade. You will need to learn how the new component or strategy will work in concert with your existing rules.

View Details

Have a wish list and be prepared when things go on sale

View Details

Matt Dula is a former Marine having been honorably discharged from the USMC in 2014 after a 5-year commitment as am an infantry mortarman. He was on 5 different prescription meds when he returned home as a result of a tour in Afghanistan and an MEU in the Middle East. He is currently the CEO of CVRN - the Cannabis Virtual Reality Network.

He replaced all 5 of those prescription drugs through the use of MMJ. Dula feels the US can save billions of dollars a year if we allowed Veterans to use MMJ in lieu of prescribed medications.

To better understand the marijuana space, Dula advises that you focus on two things to start:

1) If you follow the money, you can see why it's slow going in getting marijuana off the Federal prohibited substance list. There are companies that have a vested interest in keeping it illegal for many years to come, or at least slow it down so they can play catch up and set themselves up to cash in by making private investments through private holding companies so they have the equity ownership in place once marijuana is taken off the list.

An example of this is Hawthorne Gardening Co, a subsidiary company of Scott's Miracle Gro (NYSE: SMG). Scott's has in fact shed its international businesses to focus on the MMJ space.

2) Marijuana contains over 400 medically beneficial phytochemicals, the most beneficial class known as phytocannabinoids. These mimic our own body's endocannabinoids that our bodies produce naturally. We produce over 80 but that list is growing with more research.

When we introduce phytocannabinoids into our bodies, they seek out "holes" to fill where our bodies might be lacking in the endocannabinoid space.

"Of the phytocannabinoids currently being studied the one that’s best known and most researched is Tetrahydrocannabinol (THC). THC is a compound that carries sometimes less desirable psychoactive properties. However, there are more than 100 other cannabinoids that are less known like Cannabidiol (CBD), Cannabinol (CBN), and Cannabichromene (CBC). CBD, CBN, and CBC have all shown promise maintaining the mind and body while promoting everyday health and wellness without these aforementioned psychotropic effects."

You can read more about these here.

Read more about cannabinoids here.

View Details

A small allocation is a strategy. A large allocation is a business. How you handle yourself in market corrections instructs allocators how you will handle yourself with their money.

Have a game plan ahead of time. The market is always right - don't deflect blame. Really good traders understand themselves very well. They have ownership of their emotions and trading.

Pairs trading is a good way to have a hedge that you can actually make money on. Simultaneously long one name and short another. Both "legs" can profit, whereas if you have a married put with a long stock, you're bullish on the stock but if you make on the hedge, it's because you're losing on the stock.

View Details

You have to always manage risk with the odds in your favor.

Even if you lose, if you're sticking to your rules, it could be a good trade that just had a bad outcome.

Keep putting on trades with high expected values and over hundreds of trades you'll come out ahead.

How you recover from a drawdown is more important that the duration or magnitude of the drawdown.

Everyone has drawdowns. Therefore, focus on your rules and play superior defense and allocations such as Peter will respect your process.

If you bail on your rules, like amateurs do, you relegate yourself back to amateurville. How you behave around drawdowns will show allocators how you will behave when you lose their money.

View Details

Michael Martin answers the question "How would you trade X commodity or stock?"

Also, he discusses how he trades laggards.

View Details

Energy analyst Brynne Kelly discusses term structure in crude oil and natural gas, as well as what happens when markets invert.

View Details

We all run two systems: our trading rules and our emotional rules. I think making money over the long term is about being a master of both systems. In the short run, your trading rules can benefit from luck.

Our habits or paradigms really tell us what we are feeling on a deep level and steer our behavior, and our behavior predicts where we end up in life.

I think this is why you can know some really smart people but they can't trade. Two, it can be tied to why some can make money but can't keep it. It's absolutely why anyone can learn to trade, but few can actually do it. They aren't built the right way emotionally for the profession.

Bull markets reward even the worst systems with net long exposure, but when the markets turn is really where the money is made so to speak.

How does your trading serve you in that regard, because sometimes people trade for more than the money. They think they want the lifestyle because they see the outward expression of the results without fully understanding what it takes to get there.

If you're not getting results that you'd like, you're likely going to have to change your behavior, perhaps more than your thought process.

If you believe that humans are pleasure seekers, you might believe that we do what feels good. Therefore, changing might not feel good until it becomes ingrained and habitual. In order to develop new habits, you have to subscribe to massive repetition and consistency.

What are you willing to NOT do to improve your trading results? Sometimes it's removing a factor or parameter that helps you get the outcomes that you want more consistently in a probabilistic endeavor such as trading.

Here are some good questions to ask yourself:

Can you stop daytrading or short term trading to make room for longer-term winning trades?

Do you feel like you're in greater control by trading more frequently?

If that's your belief system, and you're not making money, would you say that your need for the feeling of control is greater than your need to become a successful trader? That is true for many an aspiring trader because they haven't felt the feelings around what being a successful trader is, so they have no after-the-fact or "a posteriori" knowledge. Are you willing to let go of those feelings around control to evolve into something more than you are now? This is what I mean when I speak about 'surrender' - I'm not talking about giving up, but pivoting.

What does it feel like to make decisions with uncertain outcomes based upon short-term random data?

The more you can live with the uncertainty, the more money you'll make. Think in terms of increasing the odds or probabilities.

View Details

Sometimes the best trades are the ones that you don't enter.

I know this might sound cute, but entering orders around big announcements can be a big gamble.

Consider how you feel around trading the EIA, API, NOPA Crush numbers, quarterly earning announcements, and the FOMC announcements.

Are you keeping orders on the book or do you lift them? Is part of the payoff the excitement around the trade ?

Lift the orders around these moments of uncertainly. If you're trading options, that's a different story.

I don't think it's a good idea to make your bones trying to trade announcements as a strategy. Allocators won't know how you can model this in a way that has high expected values, and in today's world, low daily volatility.

Cancel existing orders around the releasing of key data points. I'm not saying to offset existing positions.

View Details

Advisors to HNW clients are in the business of gathering assets and wrapping them up in a "fee for service" asset management program built around an asset allocation model.

I know they like to call themselves "money managers" but they don't know their asses from a hole in the ground about portfolio management. Their sole focus is to get in front of money in motion. That's why they have as many as 5 securities licenses, in addition to the health and life insurance licenses.

You can bet that if their clients are considering an alternative investment or managed futures, that the Financial Advisor will have a product in-house to allocate their client funds into (and get the fees too). This isn't altruism.

Your best leads - the Glengarry leads - will be the people you already know who deal with commodities as part of their business. They understand the cyclical nature of commodities, they have superior fundamental knowledge of the business, and they understand basis risk.

These are the perfect candidates for you to market your services to. The less you have to explain to someone about how commodities work, the easier it will be to get your message across. If you run a long/short equity fund, these are good candidates for you too as they inherently understand the nature of shorting / short selling.

View Details

You typically need to register when you are going to be marketing a great deal and holding yourself out to the general public.

You can hold off from registration and take advantage of what are called "de minimus" exemptions and avoid paying the fees and doing all the paperwork until you have a certain number of clients over any 12-month period of time.

On the RIA side, you can register by state or with the SEC. There are asset levels that would mandate your registering with the SEC regardless of the number of clients.

One thing I'd like to stress is that most potential clients are not going to understand anything about registration.

Two, being registered will not make raising assets any easier. Clients are not going to show up just because you are registered. I think many new traders go and register because it will give them a sense of security or clout.

IMHO, it doesn't do that. All it does do is create busy work for you so that you can avoid the rejection you get from having to ask people for money. I'd save the registration fees in that regard, find some clients, and then go register using some of the management fees you've earned.

If you have a trading grubstake, and enough money to pay your expenses at the beginning of your career, spend the time and money raising assets. Everything else is a distraction from what will get you to where you want to be.

Getting assets to manage is the key to your success and growth. Focus on that process. Your track record will come over time. If you want to grow your business, double your asset base.

For example, if you're running $1,000,000 right now and you want to grow, go get 4 new clients at $250,000 each. That's the fastest way to double your asset base and increase your fees. If you achieve 12% RoR, it will take you more than 6 years via internal growth because your fees would come out of the account. You can get 4 new clients in a few months or less.

Save your money and don't buy shit you don't need like computer monitors, a fancy office, or registration fees. You can't buy your way into success - you have to trade up to it and gather net new assets.

View Details

Make sure you allocate funds to your marketing budget first. Don't skimp on the quality of your handouts. I'd create a nice 4-pager that folds over, in color, and have a bio about yourself, a summary of your trading style, and how what you do fits in with other managers. Unless you have 12 months of return data, I'd keep the performance in the Disclosure Document. Else, you'll be needing to update the color handout and color printing can get expensive quickly. You can write up the summary, get the headshot, and then have someone at upwork.com design and put together the 4-pager for you for a few hundred dollars.

Get a high quality head shot with a professional photographer. Do not, under any circumstances, use a cropped photo from a wedding or formal in which you were wearing a tuxedo. You can get a pro photographer to take a few dozen shots of your for a few hundred dollars. This is money well-spent.

You don't need to have all the social media channels on your firm's website. If you goal is to make professional connections, I'd use LinkedIn and leave it at that. That's the platform where people expect to get solicited and make business connections.

If you have Facebook, Twitter, Stocktwits, Snapchat, Instagram, and Google+, you'll need fresh content for all of those channels at least weekly. It looks bad if you sign up for Instagram, post one thing, and then abandon the channel.

I would be very judicious in posting personal things. That includes pictures of you and your frat brothers, political opinions, or thoughts about President Trump or Secretary Clinton, for example. Unless you don't care about polarizing your audience, do what you think is best, but I'd avoid such themes in my sharing.

You might offend a potential client and in the beginning, you can't afford to turn people off when you're trying to turn them onto what you can do for them.

Add this all up and you have the start of a professional appearance. You'll find though, that you still have to do outbound marketing in order to raise money. Setting up a website and a few social media channels is a good way to engage people, but you still have to ask for the money.

View Details

You need sales training to raise money. If you're afraid of rejection, you have to hire someone to do this for you. Money will not walk in the front door because you are licensed, have an office, or even a decent track record.

You need to ask for the business, ie, ask for the money. Clients will not decide unless you ask them.

In the beginning, you might not be able to hire anyone because of lack of revenue. That means, you'll have to learn to raise assets yourself.

You can rehearse and practice your "pitch" by recording it into your smartphone. Then listen back to it and hear your own voice. Are you exhibiting confidence? Where does your voice change, crack, get louder, emphasize certain points of a sentence? This is revealing information because as you know, any type of verbal communication is a combination of what you say and how you're saying it.

What do you sound like to yourself? That's exactly how you will sound to potential clients.

Record yourself reading your disclosure document. Record yourself explaining your trading process and risk management. Then record yourself pitching a friend or colleague and have them ask you questions about what you're saying. See if they can poke holes in your presentation. By doing this, and getting a little uncomfortable now, you'll be much better presenting when it counts.

I promise you there are guys running money who can't spell "disclosure document" but they are good salesmen. If you think that isn't fair, you might be right, but at least you know now that you have to find a way to sell and raise assets.

View Details

What do you do when you have all your capital committed, but you get a NEW trade signal before you get stopped for a loss or take a winner to free up some buyer power?

This can happen when you have a smaller account. It can also happen if you have a larger account, but have a maximum amount of the account that you commit to margin.

If you have a smaller account, my recommendation is to sell the biggest loser to free up the cash / buying power. This is done before your protective sell stop is hit.

In my experience, trades that have made me money did so from the 'get go' so that's why I puke out the biggest loser at that time. I believe that you'll be better served by taking the new trade that has momentum behind it.

If you have a larger account with a "target margin percentage" based upon the total assets under management, you can set a circuit breaker to make a rule around this occurrence.

For example, you might have a rule that allows you to commit as much as 15% of your capital to margin in your futures trading account. That means $150,000 for every $1,000,000 under management.

Do you allow it to go to $200,000 intraday? Do you offset the biggest losers or oldest positions that do not have unrealized gains in order to free up the margin?

Look at your backtest and see how many of those losing trades came back to be winners. In my experience, only a small percentage will (at least based upon how I trade).

Many of these new trade signals will be for additional risk units to existing winning trades in your portfolio if you have this as part of your system, that's why this rule is important.

It's not uncommon for me to have initiated 4-5 trades (in different names), only to have 1-2 knocked out for losses, 1-2 be flat, and 1-2 show modest gains. Once in a while, one position will run like the wind. [Sometimes, I get knocked out for losses across the board - fun times...]

If I get a signal to add to the winner, the margin has to come from somewhere if I have not gotten stopped or taken a gain from a system generated order.

View Details

When you trade with a system, you'll find that a few times a year the markets just stall right when you have a few positions on. Once this happens, it's important to remember that you have to play superior defense and protect your capital.

Professional traders sometimes use what are referred to as "time stops" to offset risk. Here's how to do it...

If after you get long, for example, and the market stalls and there is no real movement in your position up or down over the next 2-3 days, offset the trade and go to cash.

That might mean a range of $0.20 up or down from your entry or 1/4 point if you trade commodities. You can define what you feel your definition of the market being "flat" is.

The best trades make you money right away. From looking at my own backtests, I found that upwards of 70% of these trades that "stalled" eventually lost money. I pre-empted that from happening by offsetting them before they could get stopped for the max loss that I was willing to take on the trade.

So, I wasn't technically making money, but I was "losing less." Either way, I had more equity in my account that had I not utilized this strategy.

View Details

Backtesting is valuable for system design, as well as getting emotionally prepared for what's possible.

It shows you what your gains and losses would have been had you followed your rules over the previous time period that you're testing.

There are more things to measure besides gains, losses, and drawdowns.

For all the trades that you make, you'll have commissions and fees that you can calculate given what of your trades get filled. There is no cost for entering stop orders.

If your backtest generated $60k for last year, but you didn't consider the effect of commissions and fees, you might be surprised to find that you also generated $40k in commissions. Therefore, your net trading profits are $20k - a big difference than $60k.

Worse, you don't typically get filled at the price you entered in your order. Stop orders become market orders once elected. That means "you get in line" for the next fill based upon "Priority, precedence, and parity."

The difference in the price that you entered in your order and the fill price is called "slippage" or "skid" and it comes as a cost to trading. You can add a number to your simulator to represent the slippage in your trading simulations that will represent the impact it will have on your trading and your P&L. This will give you a truer sense of what you're endeavoring to do as a trader.

Therefore, I'm concluding that when you overtrade, you're getting the worst of it: you're losing money, paying higher commissions, and losing money from slippage.

When try to overtrade your way out of a drawdown because you feel more frequent trading means more opportunity to win, you make a bad situation worse.

View Details

The duration of your drawdown is "how long" it takes you to get back to the previous high. It's one thing to be down 10%, but how long will it take you to recover?

If your losses are "in model" there's no reason to panic. You can get this information from backtesting your rules in a simulator. If you are trying to read charts, you're out of luck because your activity is based upon guesswork.

While you're enduring a drawdown, your instincts might lead you to begin trading more frequently.

Greater frequency of trades doest not equal greater opportunity. Most trades are suboptimal so I think you'll do better in any case by trading less.

Your instincts might also lead you to "investigate" a new trading methodology to "overlay" on your existing rules, such as option selling because it brings in "revenue." You can lose your a** selling options.

Behave consistently as you would when you're up 20%. All you do is follow your rules. Take it one day at a time.

Meditate on how you feel when you have to be patient. You might feel anxious, depressed, angry, and frustrated to name a few. I don't believe your can overtrade your way out of a drawdown.

You may also consider trading a larger position on something that you are "sure of" because "...if it only goes up 10%, I'll be back to even."

"To every thing there is a season, and a time to every purpose under the heaven" - King James Bible

Your trading rules might be "out of season" with the market. If you're a commodity trader, you know those markets are cyclical - so no surprise there. If you're an equity trader, sectors rotate so your winners will ebb and flow in secular markets.

You will go much further as a trader if you understand that losing money and drawdowns are not a reflection of your ability to create alpha as a trader. But how you handle losses and drawdowns emotionally and behaviorally will provide you and others insight on your managing larger sums of money. Investors and allocators need to know you can be trusted.

View Details

If you want to be a professional trader, losses are part of the business. How you deal with losses, collectively called drawdowns, differentiate the amateurs from professional behavior.

If you're down 20%, you need to do 25% to get back to even. This is important because you don't participate in the upside, ie, absolute performance, until you actually make the client money.

Your sharing in the profits are called Incentive Fees or Profit Allocations and they are benchmarked against the initial account balance, aka, the "high water mark."

Your ability is going to be measured by performance or alpha, but also how little you lose. Risk adjusted returns therefore are your goal. If you can garner market-like returns but with only a fraction of the drawdown, you'll be able to differentiate yourself from the competition.

[Remember, the riches go to the salespeople. You need to learn how to ask people for money. It won't typically show up just because you have great risk adjusted returns. You need marketing and sales to 'show and tell' your performance.]

Shorter time frame trading does NOT give you more control over your losses or drawdowns. It just means that you're likely to "die by 1,000 cuts" instead of taking a position and hold the risk over night and over the weekend. Those are good risks to take. Selling or offsetting your trades because it's the end of the day is known as "bad risk" - full of giant opportunity cost. In effect, you're leaving money on the table by not taking trades home.

In order to minimize the impact on your P&L and also on your emotional constitution, you can take a haircut on your equity when you're in a drawdown. If you get to 80% of a previous high water mark, you can trade based upon 60% of your remaining equity, and effectively trade 48% of your original capital. This helps you trade smaller when your system is not aligned with what the market is doing. Your bet sizes will be based upon a smaller capital base.

Set a max drawdown limit for the day, week, and month to keep your losses in order. Examples can be "never lose more than 1.00% of your overall equity in one day," or "stop trading at -9.50% for the month" thereby avoiding a double-digit down month.

This infers that if you're at -9.50% on the 20th of the month, you stop trading until the start of the next calendar month. This may seem counter-emotional to you when I've told you to stick to your system, but you can benefit greatly as a professional trader/PM if you can say that "you've never had a down month of 10% or more." This rule is a circuit breaker in your system.

Talk to prospective clients about how they deal with losses. If you show them that you have a superior methodology for dealing with losses than the other managers they're dealing with, there is an opportunity for you to capture those assets under management.

View Details

Gains look like gains only to the extent that you keep your losses small.

Most traders lose and quit the business in frustration because they are underfunded, focused on short-term time frames, and trade to large for their capital space.

You can gear your target RoR for a high number, like 100%, but you'll also have to endure a drawdown of 40-60%.

I'd focus on consistency in your approach and your discipline. That is what you bring to the table that amateurs cannot. If the average person could act consistently around managing risk, there'd be no need for portfolio managers.

Risk-adjusted returns are the key to getting an allocation. Sure you can get big returns, but at what risk to the operation? Anyone can roll the dice and hit it big once or twice, but that's not how to build a business. Those type of results appear from random luck, not a bankable process that can be repeated like a robust trading system that can be deployed across many markets.

This podcast episode was inspired by a great email that I got about one particular trader's performance and a few of his discussions with "prop trading desk managers" (read: brokerage).

There aren't many prop trading firms out there. Most are brokerage masquerading as prop trading. True prop trading is a firm that will give you funds to manage WITHOUT your needing to deposit your own funds because you are talented.

If you want to trade your own capital, wait 6-12 months and see if you've developed a sense of trust with the firm. Making a deposit to an account makes you a brokerage firm client, not a prop trader.

View Details

We make predictions all the time, so why not in your trading?

Professional traders will backtest and then add new elements or parameters to their existing system(s).

Markets will evolve also, so you need to keep pace with evolving market environments. That means experimentation with something new.

You can also test your hunches within the discretionary percentage of your trading. For example, some traders are 90% systematic and 10% discretionary.

Test your predictions and hunches in the 10% discretionary allocation. Just make sure to follow you risk controls, ie, max risk per trade and correlation studies before you put on the trade.

I think prediction gets a bad rap because anyone who doesn't have a system is effectively guessing at the market. That typically doesn't work out that well for too long until your rules get systematized. For one, you need to have rigid risk management techniques in place.

It's likely that you will blow up if you put a large percentage of your capital on any one idea based upon a prediction or hunch. Risk 0.50% instead of 50%.

Your feelings aren't facts and it's better to gauge your reasoning with proper risk management. There will always be new ideas to trade, but if you roll the dice on one name based upon a prediction, with no training, you're likely to get the worst of it.

View Details

Many of our students set goals based upon what they want the end result to be. Hard to have ownership of going from point A to point B if you don't know how to get there.

Typical goals could be delineated accordingly: "I want to gain 15 lbs of muscle," "I want to lose 10 lbs of gut fat" or "I want to earn $X or X% this year."

Instead, focus on what you have to do to get those results.

For example, replace "I want to gain 15 lbs of muscle," say "I am going to the gym at 5 am M-T-Th-F each week before I get to the office."

Then you can break down what exercises you'll do each day to breakup the workout so you don't go nuts, but also so you'll have much more ownership about the process. You can envision going to the gym and the exercises you'll be doing more than what you'll look like having lost the weight or adding 15 lbs of muscle.

Professional traders focus on process, not results, so this type of thinking is in line with best practices.

We find that when our clients or students focus on the the process of what they're endeavoring, they get better results, perform more consistently, and enjoy the process of achieving their goals.

You can also make the small adjustments that you might need to make after several weeks, like adding an additional day of rest or adding cardio.

View Details

Frustration is the antithesis of confidence and euphoria. It can cripple you and distract you from your sense of persistence and determination.

Unlike other teachers, I don't put a negative connotation on euphoria - as long as you don't abandon your trading rules, have at it.

You can avoid frustration in the first place by "not" having expectations of the outcomes of anything (or any trades).

This is not the same thing as Expected Value, but an emotional expectation about the result of something you're endeavoring - such as trading.

One sure-fire way to decrease frustration in your trading is to make sure that you're protective stop is not placed inside the 20-day ATR of the instrument that you're trading.

For example, say you're trading an instrument that has a 20-day ATR of 15 points. If you're long and the current market value is 535 and you've placed your stop at 530 because you have set 5 points as your max loss point, you are more than likely to get stopped given that you're stop is well within the ATR. Many times, traders with smaller accounts do just this because they don't want bigger losses. This is respectable and totally understandable.

In our coaching and teaching, we've found that traders disregard the daily vol of the instrument their trading as if it was going to change because the trader put a trade on.

We can't change the nature of things. The instrument that you're trading isn't going to change how it behaves just because you're in the trade.

In the above example, you can trade a smaller position and give your smaller position a greater latitude by placing your protective stop at 520 (535-15). You can test this strategy. You might find that you are not getting knocked out of as many such trades and, if you are trading in strong trends, take the risk home overnight and let the market forces, time, and leverage work for you.

View Details

Bitcoin Bandits

Although most people speaking about Bitcoin or crypto currencies can't tell you what the significance of blockchain technology is, I've read stories about people quitting their jobs to become bitcoin traders because of what they perceive as the opportunity of a lifetime.

I remember the hubris during the dot.com boom very well. Regular Joes who had 9-5 type jobs were quitting their jobs and becoming day traders or SOES Bandits. Most eventually blew up. Some committed suicide or "went postal." They'd quit their jobs to become day traders and they used their 401k rollovers from the jobs they'd just quit to grubstake their trading account.

You can read a good piece about SOES and the environment at Themis Trading.

If you are considering this, please think twice - it's hard enough to get a good job that you like in the first place. You can be a trader by night and "keep your day job" so to speak.

Trading is difficult even in the best of times and when the markets turn for the worse - and they will turn - traders who have not had years of experience across various market cycles and no training to boot, will be left holding the bag.

Instead, learn to place your orders either the night before or the morning of the trading day. You can be sent alerts if your orders are filled at which point you can enter your protective stops. Although I don't do it myself, you can do much of this from a smartphone.

I'd recommend doing this for a year before you make a big leap employment-wise.

Many newer traders have a hard time paying their bills because they are trying to pay for their expenses from their trading profits. When the profits dry up as they do for every trader at various times during the year and career, traders can become reckless and take unsound risks because their actual performance is not what they had forecasted. Hard to make money when you're trading with scared money.

It's best that you keep your funds segregated: keep money for your bills in a savings/checking account and your trading corpus in your trading account.

View Details

Stoicism can help you develop your overall philosophy and way of life around trading.

However, you can't philosophize your way into emotional intelligence. Trading is experiential and that is the only way you'll be able to learn how to conjugate your trading rules with your tolerance for risk and your level of respect for the markets.

A good site where you can learn a great deal about stoicism is Daily Stoic.

View Details

Randomness is omnipresent. It's everywhere in your life and in your trading.

On any given trade, it's hard to determine if I had good or bad luck, if I have any skill, or if I'm in the right place at the right time.

But once you have monthly returns from over several years of trading you can begin to run statistical analysis to get a better idea if you are good or lucky.

If nothing else, the concept of randomness keeps me grounded or sober, in that "I am powerless over the markets."

A great place to learn about the role of randomness in your life and trading is Nassim Taleb's Fooled by Randomness. I recently listened to the audiobook version after having read the hardcover book 6 times. I found that I (think I) heard things for the first time.

Monte Carlo simulations show you how starting dates can alter your performance. If your first trade was on September 1 and that path led you to a 20% drawdown, you might find that someone trading the same system but starting two months later was up 25% by EOY, while you finished at breakeven.

FYI - if you are working on a trading system, make sure that you include data from companies that went out of business, were taken over or merged, or instruments that were delisted, else you have only a list of survivors.

For example, if your system would have had you long Enron, you'd like to know how that trade affected your P&L, as well as that of CMGI or any of the other dot.com stocks that blew up circa '99 and '00.

If you would have traded Pork Bellies back in the day, you should run that data through your simulator also although the contract has been delisted from the CME in mid 2011 because of lack of interest and trading volume.

Doing this will at least simulate the "worst case scenario" in your backtesting.

View Details

Please considering leaving even a 2-sentence review. It would help spread the word about the show.

You can eliminate the risks you can't see by removing names from your "watch list" or data that you've raked - the step before you run the data through your simulator.

Carbon Monoxide of Trading

Pro traders focus on "not losing" rather how much they can make. Of course we need to make money, but by preserving your capital and focusing on defense, you put yourself in a position to appreciate your money emotionally and financially.

Two invisible risks that you should be concerned with are below:

Correlation risk
Volume and Liquidity

You can reduce correlation risk by NOT having all the metals in your data source. You can "rule out" correlation risk by saying "if long gold, don't take trades in silver," for example. Or, you can set a max risk per group, ie, social media companies, metals, softs, interest rates, so that one group or name will not become unwieldy.

When the markets turn, they will turn for the whole group. If you have large positions of highly correlated assets, you might be in a spot risk-wise to give back more than you want to...and that's having placed definitive protective stop orders in the market to get filled - it's worse if you use mental stops.

Volume is what you saw traded yesterday. Liquidity is what you need to offset your position when you need to do so. Big difference. The invisible risk here is that thin markets move sharply.

You don't want to be in a position to take larger losses when the market turns on you because everyone is on the same side of the market. That's the case with Bitcoin right now. When you're looking to sell, who will be there to buy?

You can rake your data to include only names that have a set criteria of trading volume so that you avoid problems before they arise. Commodity markets like oats, lumber, and cocoa can be problematic in that regard. Cocoa is not necessarily thin, but it does not have a daily trading limit so your loss potential can be much greater than you'd imagined when building your system.

View Details

"Mental stops" are not really stops, per se, but thoughts. It's a price where you are losing money, but aren't emotionally ready to take the loss, so you don't take it.

Maybe you're not willing to take the loss because you've done a lot of work to research the trade and you feel it's not fair that you didn't get paid. Well get used to it. Neither the market nor anyone cares about what you put into your trading.

Long term success comes down to your consistent behavior: putting in the orders and taking small consistent losses.

Mental stops are an emotional place where you want to re-evaluate the situation to figure out what to do. That's the point where your lack of conviction in your process is starting to work against you.

I think that's especially true for chart readers and discretionary traders. System traders put in their stops, get stopped, and wait for the next order to be generated by the system.

The reality is that you've lost money. End of story. You have lost the money regardless whether you've "locked it in." Don't let the accounting language dissuade you from trading the way that will impact your trading positively.

Yes, taking consistent small losses actually impacts your trading positively.

Amateur move. Put your stops in and take solace in the fact that you'll be automatically get taken out of the trade before I lose any MORE money.

Being able to take small consistent losses is the hallmark of a pro trader. Losing money does not mean you suck or that you are a loser at trading.

The stop price is the point at which you are willing to transfer the risk to someone else.

If you want to be a pro, losing money is part of the business.

View Details

Challenge your own way of thinking and let other traders help you uncover your blind spots. We all have them. I'm looking for people who think differently than I do so I can learn. I don't have a monopoly on ideas and I can be a bonehead at any given time.

I rely on systematized trading rules and by gaining new insight from other people (who are mostly much more intelligent that I am) I am better off because I can oftentimes reduce the wisdom into a trading rule to enhance what I already have.

I couldn't do that on my own - not without a great deal of random luck or perhaps a big loss that helped reshape my thinking. Below is a partial list - there are more coming.

Brian Lund

Jared Dillian

Todd Harrison

Mark Yusko

Moore Research

Brynne Kelly

ETF Global

Chicago Sean McGlaughlin

David Aferiat - Trade Ideas

Tadas Viskanta - Abnormal Returns

Steve Sears - Barron's Striking Price

Options Insider

Sal Arnuk

Joe Saluzzi

View Details

It's impossible to imagine the value of the blockchain and crypto currencies, so I'm a long-term investor at this point. I think the value is in my process, not the instrument that I'm trading.

Two, I'm not going to let any one security put my trading process in jeopardy. I've talked before about what I look at and how I rake the data to include instruments within my trading system. I'm not going to change those rules for any instrument.

I have not traded bitcoin futures and I won't be in the near term. There is not enough data and I don't know who has basis risk. It seems like the market is dominated by speculators and not hedgers, and they are heavily biased long.

When the market is lop-sided and fickle, it makes for a poor trading environment. That's why I'm invested and not trading at this point. It's too easy to lose money when I'm trading well...

The best that will happen is that I'll add it to my system and trade it among all the other instruments that are in there. It's not getting any special treatment, nor am I going to try to develop a dedicated system to trade bitcoin.

Use cold storage for your crypto currency investments - that means offline.

You can use a USB drive and drop that into a safe deposit box.

You can also use what's called a "hardware wallet" such as those below instead of an online wallet and exchange such as Coinbase or another online digital wallet that can be hacked.

KeepKey

Ledger Nano S

Trezor

Lastly, keep your mouth quiet about owning bitcoin or any other valuable cryptocurrency and how your store them. No one needs to know your personal business. Don't brag or bring attention to yourself (about bitcoin, art, or collectibles) so you don't tip off anyone to come and rob you.

View Details

Goals need to be realistic and attainable. You also need to consider the growth in competing areas of trading.

If you're making money, how do you know it's not random luck or a bull market?

I'd love it if everyone could turn $10k into $1,000,000 but the majority who try will lose all their marbles. Those that do will be lucky having been "in the right place at the right time."

Think of it's this way: if you turned $10k into $1 MM this year playing the lottery, and you had to live your life over 100 times, you'd never replicate doing that ever again. Same for following a set of rules that don't make money [have positive expected value]. You can trade those all day, and you'll do nothing but lose money on average over the long term.

You'd have a better chance of making 20% YoY if you followed a systematized set of rules with positive expected values and traded them over and over. I'm sure Taleb and Ariely have said as much.

Goals and systems need to be reviewed. You might not have hit your financial goals even though we're in a bull market. That might have to do with your risk per trade, overall risk in your portfolio, or markets to trade. It's possible to have too little risk as well as too much risk. You can trade good rules and lose money. That's bad luck, not a bad system.

Keep a goal for minimizing losses. Let your upside goals run, like your profits.

There are forces at work right now that are working to undermine your trading, more so if you are trading intraday or short term. Your trading should evolve with the markets. As Victor Sperandeo said in one of my interviews with him, "the markets are always evolving to try to kill you." He would know - he's been trading since 1968.

I am continually testing my models to find my blind spots. I'm also looking to see if I can minimize my risk to achieve the same expected return. I'm also looking to make sure that what I trade hasn't become too correlated with each other so that I don't have the effect of a concentrated position in my portfolio.

Don't be reasonable with your upside. Yes, "the market can remain irrational longer than you can stay solvent," but it also means that bull markets can run (while you're long) much longer than you think they can.

How many people called market tops in 2017? They were all wrong. And these are smart people.

My guess is that they felt the market had gone up enough so the "market callers" published their feelings about risk and what is reasonable to you in the form of a market call.

Remember, your emotions and psychology effect your attitude, your attitude effects your behavior, and your behavior predicts where you end up in life. From a trading perspective, how and what you trade can predict your net worth over time.

What you can do in 2018 to positively impact your financial future and net worth:

1) trade less frequently thereby decreasing commissions and slippage;

2) increase your holding periods by letting your winners run longer;

3) diversify across more markets to cut your overall risk;

4) learn to trade a new asset class to impact your reward to risk ratio;

5) rely on a system and stop drawing lines on charts thereby decreasing subjective reasoning in your financial decisions; and

6) make friends with 5 new people who are leagues smarter than you

View Details

Whenever you have a margin call, offset the instrument that is generating the margin call. Don't meet a margin call with cash.

CTAs with margin to equity ratios of 12-15% are considered aggressive in today's day and age.

Margin is set by the exchanges, but can be made more stringent by the IB or FCM.

Margin levels are set to protect investors as well as the integrity of the exchange mechanism. Margin is considered a good faith deposit on the full notional value of the contract.

View Details

Favorite Yoga Pose - Ardha Chandrasana

You have to practice your yoga the most when you're off the mat and not in class. That's the whole point. Like great trades, you have to take them home at night.

Time Blocking

Trading begins the night before. I run my systems at 6 pm Sunday night for Monday's trading. Call in the orders by phone.

The orders are worked during the day and all I do is wait for the phone to ring with a fill. If I'm filled, I give them a protective stop immediately. Sometimes the there are no fills, then I repeat the process the next day with the same orders.

Most of the time I'm reading and studying. I don't have cable - I've cut the cord about 13 years ago. I practice yoga most days from 12 to 2 pm PT.

Risk Per Trade

In establishing a position, I risk 0.10% (10 basis points) per trade then it grows from there. I am willing to add continuously if the trade continues to work in my favor.

By risk so little at the beginning, I couldn't care less about any trade at any given time. I add when I'm making money, and that's how I decide.

We are powerless over the markets and how the instruments perform once we're long or short. With such small risk at the beginning, I'm not emotionally invested in the outcome of any trade. Even after adding several additional 0.10% units of risk, I'm still indifferent. For example, if I get to add 4 additional units, I'm only at 0.50% risk or 1/2 of 1%. Peace is a choice.

Too many traders are emotionally invested in having to be correct. I'd rather focus on making money over longer periods of time, and if that means having a commodity futures position on for 3 months, so be it. That does't make me an investor. Sometimes, it takes that long for "high tide" to come in.

FYI - I loathe having to look at a computer monitor or screen so I don't do it. My brokers are incentivized to fill my trades so I trust that I'll get filled when my stops are hit. That probably seems blasphemous to day traders, but I want to make money and have a high quality of life. Making trading look like blue collar despair is not what trading is about for me. It shouldn't be labor intensive. Hence most traders lack the emotional intelligence to be their own best coaches.

If you're struggling or not making money, do yourself a favor in 2018. Stop looking at 5 minute bars and start thinking longer term.

View Details

If the average person cannot explain to you what the blockchain is, how is the recent level of bitcoin a bubble?

I've seen this before in the commodity markets and although we're likely to see volatility that's uncommon in the markets, you can study the spread of viruses to get a better feel for this type of growth.

You can control the effect of volatility in your portfolio by decreasing your position size. You can further minimize your loss potential by using low to no leverage.

If Amazon or Walmart decide to take a crypto currency as a form of payment, demand for the underlying will explode as none are currently considered mainstream in terms of usage despite a steady stream of headlines about them.

Once this happens, I believe the best opportunity for adding crypto currency risk to your portfolio will be via an investment, not a trade. No crypto currency has gone mainstream yet, so all the talk is about "the trade" and that means the majority of people will leave the majority of the money on the table.

McDonald's went public in 1965 around its 10th anniversary. It was not mainstream until 10 years later and it still had a ton of growth to go. For example, they did not begin serving Chicken McNuggets until 1982, almost 20 years after IPO'ing.

If you'd bought 25 shares of MCD at the IPO price of $22.50 (a investment of $562.50 in 1965), your position would be worth over $3 million today at a price of $175 per share and adjusting for splits. That's more than 5,400 times your money over the same time period. That's also 50 years ago, so who can tell how they would have handled the position. MCD has split 12 times since the IPO.

Sure there had been some great trades along the way. There have also been some dead periods too, but when people who have not been trained to time the market or to trade, they leave the majority of the money on the table.

I think the reason is the people like to seem reasonable. Let's say you invested in MCD and you sold your entire position when it had doubled.

Maybe you felt at the time you didn't want to be greedy. Or you feared giving it all back...

What is the opportunity cost of that lack of emotional awareness or mindfulness around your process (or lack of one)?

Where is the opportunity in bitcoin or any crypto currency at this point? While I believe there will be parabolic moves, great trades, big drawdowns, the best bet is to invest in it and hold it for 20 years.

View Details

Focus on process and stay out of the results. Performance will show up if you trade a system with positive expected values. By focusing on the process or your system, you become the casino. Each time your system is open for business [trading], you are making money. You should strongly consider investing in a backtesting simulator.

When I started trading, I put a high level of emotion of making money on myself. That became expensive and I became frustrated about doing things that weren't paying off. They were never GOING TO PAY OFF, but I didn't know it at the time. I live by the adage that hard work will pay off...it was my turn. The thing is, I wasn't working smartly. And worse, I had no definable trading edge.

The funny thing is that as soon as I detached from the money spiritually, my trading improved in leaps and bounds, both emotionally and financially.

Nowadays, I think of the money as points in a video game. I don't actually play video games, but I still look at the net equity as how to keep score. As in poker, your money [chips] are your ammunition. I know when I make bad bets, I will most likely lose. Once in a blue moon, I'll get random luck and split a hand or everyone will fold to me. That's not a good business to be in though.

I can remember that as soon I had become emotionally invested in the outcome of a trade before I put the trade on...I could feel the disappointment before I offset the risk.

Such Betrayal.

Losing Money But Making Good Mistakes

One good thing that I can say about this time was that I was risking real capital - not paper trading. I also was taking the risk home with me which is what I always advocate. New traders should not be focusing on 5 minute bars. Focus on the intermediate to long term moves, and once you master those [in 2-3 years] come back to shorter time frames risking 0.10% on trades so you don't do any lasting damage to your portfolio.

Holding a trade for three months doesn't make us investors. It says that we have stepped aside and let forces that are much more intelligent and powerful than us take over. All we can do is enter our stops and let the market go where it's going to go.

If you find yourself trading 100 shares but offsetting them before the market close, consider trading 20 shares and taking them home if you making money on them at the close. You will learn about your emotions from the experience which is invaluable and can only be done by living it.

If 20 is too painful, try 10. But I also ask you to do this: why the lack of trust? Is it you don't trust yourself or you don't trust your process? Where does that come from, meaning, what scientific study did you read where it delineated that you should offset winners NO MATTER WHAT at the close and go home flat?

If you take home 10 or 20 shares of a winning trade, you'll learn a lot about yourself emotionally as a trader. That wisdom is priceless to us. Learn and understand what your emotions are trying to teach you. They want to be advocates, not antagonists. If you feel the opposite is true, your process is likely the reason why.

View Details

The measurement for volatility takes into account the magnitude of the vol, not the direction.

You obviously don't want to be in high vol, directionless markets, unless you are trading option butterflies or condors that can take advantage of those types of markets.

For equities, you can deploy what's called a "pairs trade."

Anyone can gear their portfolio for 100% RoR, but you have to be willing to endure a 40-60% drawdown both financially and emotionally. Hard to do. Slower and steady growth might be a better fit for your tolerance for risk as well as what you are looking to do professionally, such as running public money.

[I have a documented 100% monthly return, however I was in fact coming off of a 40% drawdown so my starting equity was only up 20% by the end of that reporting period/month.]

Spread trades are about relative performance between the two instruments, meaning your are looking for the long to outperform the short. There has to be high correlation between the two instruments else there is no relationship. You can find good candidates for these types of trades by looking in each sector and going long the "best in class," and shorting the dog.

I wrote about pairs trading in Inner Voice of Trading where I was Long MSFT and Short NSCP figuring that Netscape was going to have a hard time getting clients to purchase a premium, albeit superior browser, while MSFT was giving Internet Explorer away for free.

One trade I'm in right now is Long PYPL and Short SQ in the mobile payment space. You have unlimited loss potential by being short a stock fyi.

You can learn a lot about commodity spreads at Moore Research. Commodity spreads are a great way for newer commodity traders to get involved with those markets as you are both hedged and you are afforded lower margin requirements since you are simultaneously long and short the same commodity, but in different months.

By trading equity pairs or intra-commodity spreads, you cut the volatility in your portfolio yet keep the directional bias that will bring the alpha.

View Details

By trading a complete trading system, you solidify places in your trading where your success can break down. Relying on system-generated trades, you get to focus on high expected value trades and eliminate the sub-optimal trades.

Benefits of a complete trading system:

A good cure for daily set-ups is a systematized set of rules. It takes out all the uncertainty around your decision making process. That can give you a sense of confidence and self-esteem.

You get to trade from a place of personal power. Hard to make money trading long term without confidence.

You won't have to interpret any chart patterns: the price will pick up anything about the instrument that is bullish or bearish. You will therefore be cured of the need to massage charts all day and night, thereby freeing up hours of time each day and the brain power that goes with it.

You can trade any market around the world.

You can blend several trading systems like an asset allocation to smooth out your equity curve. For example, you can put 40% in a breakout system and 60% in a moving average system. Or, you can put 50% in a short to intermediate trend following system, and 50% in a long term trend following system. Possibilities are endless.

You don't need subscriptions, chat rooms, or premium research.

Systems and Emotions

Systems don't remove emotions from your trading although that has been included in many marketing materials. I believe that began by a clever marketer who doesn't trade and wouldn't know if that statement was true or not.

You still have to put on the trades, and if you experience fear around losing money or greed around not making enough, you can hijack the system and blow up.

Ed Seykota set up the Incline Village Trading Tribe for traders to get in touch with their feelings and psychology around trading for this very reason. We never spoke about trades, set-ups, or chart patterns.

It was not only a complete snooze to do so, those don't help a trader become profitable. They do, however, provide fodder for good conversation and for building relationships and bonding I guess, but you can do that without becoming a trader if that's what your real goal is - to bond with people.

Lastly, I think trading a complete trading system can provide you with a great quality of life. It makes no sense to beat the crap out of yourself to make it as a trader.

Martyrs don't get paid and as Jim Morrison sang, "...no time to wallow in the mire..." Build yourself a simple system that takes care of your entries, exits, and position sizing, and in doing so you'll remove the weakest link in your trading: you.

View Details

Price targets cut your profits. Let the market tell you when the move if over.

Price targets are about predicting the future and human beings are horrible at that at best.

Read Expert Political Judgment by Phil Tetlock to get an idea of what I'm speaking about.

Intraday data is not statistically significant, so uptime your charts and begin to focus on daily, weekly, and monthly time series. Longer time frames remove the randomness of price.

Don't trail structure when you put on the trade. Focus on percentages - that's what professionals do. Once the trade is working in your favor, then you can trail structure if you want. But make sure you're looking at weekly or monthly support, not cloud-like chart patterns that change when you breathe on them.

When you let go of price targets, you'll focus on "best practices" and that means financially letting your winners run, emotionally letting go of control (you don't have any in the first place), and spiritually living a life that's worth living.

Expert Political Judgment: How Good Is It? How Can We Know? - New Edition

View Details

Look at your equity curve like a price chart. You want the slope to be positive and upward. What the trajectory? Your equity curve can help you target your goals.

Start by putting all your trades and the costs into a spreadsheet:

Column A is today's Date

Column B - Entry

Column C - Exit

Column D - Commissions

Column E - Fees

Column F - Final Balance

Then you can chart the last column against the Date - Columns A and F. Do that every day and update the chart. You can study the results at the end of the month.

Your Equity Curve shows you the efficacy of your process and trading rules. What does it tell you if you are afraid to create one? Not worth your time? My guess is that the truth might be hard to acknowledge and we can bullshit ourselves to eternity.

The first step in getting healthy and making better trading decisions is to discover your truth. Nothing illustrates a failed or successful attempt at trading better than an equity curve.

Drawdowns are not failure - they just delineate those times when your system was out of sync with the market. This will happen frequently, but if you've backtested your rules, stick with them as you'll trade yourself back to new highs by sticking to your rules.

I find that day traders are fearful of this process. Position traders will find that their equity curves make the biggest jumps. Let the market and leverage work for you and you'll see those efforts and results on your equity curve.

View Details

Use your breath to control your breathing. In the process, you will quiet your mind over time and not need to fill your day with kinetic energy.

For me, that includes making too frequent transactions. If you're in good trades, keep them, take them home with you overnight and over the weekend.

First Technique:

Inhale on a 4-count and exhale on a 4-count. You can increase your breath to a 6 or 7-count if you can slow things down enough.

A variation of this is inhale on a 4-count and exhale on a 6-count. Yogis and buddhists find that if you can slow your breath down, you quiet your mind in the process.

Second Technique:

Inhale on a 7-count, hold your breath for a 7-count, and exhale for a 7-count. It might take you a few times to "catch your breath" so to speak.

Try this for 2-3 minutes if you can and do this 3 times per day. You might try this for 2 weeks before you feel anything material - it's different for everyone - but you should feel more relaxed, calm, and more energized.

Smartphone Meditation Apps

Insight Timer
Aura
Omvana
Stop, Breathe, Think
Calm

View Details

Enter Buy Stops above the market and let the market come to you.

Do this for every trade you have and then sit back. The good news is that you don't have to look at the chart once you're Buy Stop is entered. This is huge in that it frees up your time and energy.

You'll get an alert once the order is filled. Then place your protective Sell Stop at your predetermined price level.

Don't use price targets either. Once the underlying is up 2 ATR, move your protective Sell Stop to breakeven and let it ride. Make sure that you are not looking at intraday data either.

The key to all of this is to take yourself out of the equation. The more you are hyper-vigilant the less you're going to make on the trade. The more you watch the chart, the more you're likely to impose your will into the trade and cut yourself at the knees.

The overall markets are in strong uptrends, so let your trades run in this type of environment. Let go of trying to guess where the move is over - the market is much smarter than all of us and humans are horrible at best at prediction.

Having your Buy Stop orders entered will always have you in the right place at the right time. Why? Your orders are already in when the market moves and momentum hit and you can't possibly enter that many orders by hand in the heat of the moment.

You're already positioned. If the moves don't rise to your Stop levels, you won't get filled - and that's a good thing. At the end of the day, the orders will cancel because they are only good for the day.

View Details

Develop a systematized set of rules that you can count on. You can calculate your levels the night before and execute the rules the following morning.

The key is that you don't want to have to think in the morning - just focus on executing the plan. That means entering your buy stops to enter long and sell stops to protect your equity.

Here are the components of a complete trading system:

Breakouts - trading above previous highs or below previous lows;

Trailing Stops - to protect your equity after your initial order and also once the trade starts working out in your favor (see Exiting Winners);

Position Sizing - calibrated for volatility and your overall account equity;

Adding to Winners - systematized so that you don't join the hubris or factors that you can't prove scientifically;

Exiting Winners - getting out with the majority of your unrealized equity;

Also to consider is the correlation risk between the instruments that are in your universe.

These must all be conjugated to work together. One without the other is nothing - they are just data points. Think of them as a perfect complements to one another, like the starting 5 of your favorite basketball team or 9 players on the baseball diamond.

For example, your position size only matters to the extent you know how much you are willing to risk per trade, where you get in and where you exit.

Knowing how much silver is correlated to gold or how much or Facebook is correlated to Amazon will help you see the unseen risk in your portfolio before you add it.

You can't get this level of thoroughness from chart reading or understanding set-ups such as cup and saucer. It's only achieved from backtesting through a simulator that lets you simulate at the portfolio level, not one instrument at a time.

Examples of those are Mechanica and Trading Blox.

View Details

History is not going to repeat itself the way it did for my mentors and colleagues.

Investment into the trading business is going to Artificial Intelligence and Machine Learning. If you are doing things by hand, you are putting yourself in a very disadvantaged position.

You can't work orders on the floor anymore. There is no floor. How's that for a development?!

Another example is the risk per trade in contemporary trading. Back in the 70s and 80s, it wasn't uncommon to risk as much as 2% per trade! That would be madness in today's environment, especially if you want to get an allocation from a global macro fund or if you want to work for a real prop trading firm.

[A real prop trading firm will give you funds to run without your needing to add your own capital and you'll be able to take the risk home with you overnight and over the weekend, for example.]

Take the humanity out of your trading. If you are looking at charts for subjective interpretation, more and more you'll be competing against trading machines that are "trained" to beat you. If you think trading is unfair already, in my opinion it's going to get worse.

Whereas I think you should strengthen your sense of self through yoga and meditation, at the same time I think you should begin to extract yourself out of the trading equation by coming to understand that you are the weakest link in your trading.

To put it in context, I think even if you had the self-knowledge and awareness of HH The Dalai Lama, you should still develop a set of computerized trading rules and manage risk systematically.

Two good books on yoga are Light On Yoga: The Bible of Modern Yoga by BKS Iyengar and Yoga: The Spirit and Practice of Moving Into Stillness by Erich Schiffmann. Disclosure: Erich is a long time friend and my yoga teacher of 20 years.

View Details

Risk is an asset class. Keep in in your portfolio when it pays you to do so. That means overnight and over the weekend.

When you day trade, you are churning your own account.

In a recent interview with Chats With Traders, my friend Aaron Brown said that traders generally leave way too much money on the table.

The real money is holding the best risks. You can define where you are going "risk off" by placing protective stop orders on your winners and Stop Loss orders on recent fills.

Staying in good trades longer frees up time so that you can do more research, read, or go have fun doing whatever gives you pleasure.

Exercise: Go to your best trades and enter them in a spreadsheet. Column A is your Entry. Column B is your exit. Column C is where it is now. Column D is what the worst price was between the prices in column B and C.

Look at the percentage of those names where the price is Column C today is higher than Column B but also where the price is column D never went below Column A.

This helps you understand the opportunity cost of short-term trading and how it works against you.

View Details

Value is what you assign to something, not an analyst. What others assign to bitcoin are none of my business. What others assign to speculation in general is irrelevant.

There is no value per se in bitcoin anymore than there is in corn futures.

Bubbles are what speculators (like me) pray for. Professionals know themselves and know how to express risk in a manner that is best for them (compatibility).

Traders who have a systematized set of rules love to trade bubbles because although we cannot impose our will on an instrument, we can take advantage of the amateurs and day traders who don't know anything about managing risk.

Trading is a voluntary action. Winning and losing is up to you.

Buy the time the bubble pops, I'll be long gone...

View Details

Exits and entries are perfect compliments to your trading system. They are siamese twins that should not exist without one another - nor should they be separated at birth or otherwise.

Risk management defines your P&L and the distance between your entry and exit is critical to how you manage risk.

You can define that distance by calculating the ATR of the security that you're trading and using those as the entry and exit endpoints to your rules. Marry that with your position size given the size of your account and the volatility of security.

So the three crown jewels to trading are entries, exits, and position size. They are all calibrated to work with one another and rely on one another to help you create alpha for you and your clients.

View Details

You cannot shield yourself from struggle. It's what helps shape your trading rules and over time turns them into a complete system.

No psychologist, coach, or mentor can do it for you. You have to want to take a punch and learn to feel what it feels like to lose money and then use those emotions to affect your behavior accordingly.

Very little of it is intellectual or logical. If you need things to "make sense" I think you're in for quite an education if you're open to it

There are no external solutions to your internal issues. That should save you a ton of money in that you don't need a high clock speed computers, multiple monitors, nor televisions in each room.

One way to generate peace in your daily activity is to start using stop orders to enter and exit trades.

Professional traders use stops, not market orders.

Buy stops are placed above the market and are used to enter trades long or to cover short sales and minimize risk.

Sell stops are placed below the market and are used to enter trades short or to sell long positions and minimize risk.

Stop orders show your conviction in your process. If you're trying to read charts or you've been sold on something amateurs refer to as "set-ups," you can absolve yourself from that lifestyle choice and at least act like a professional on your way to becoming one.

Trading with a system will capture anything that is bullish or bearish and remove the need for your having to interpret charts. Plus, it's a lot less work as well so you save yourself a great deal of time. A third benefit is that you can eliminate having to trade frequently - something I believe is not necessary to becoming a professional trading.

I think trying to read charts every day is exhausting. Moreover, if you are glued to your monitor, you might be giving yourself a false sense of security that you can avoid "the big loss" by doing so.

You can't stop market volatility because you are sitting there hyper-vigilantly. What you can do is enter your stops are predetermined levels and let the market come to you. One benefit is that you won't find yourself chasing trades. Another is that if something unexpected does occur, your order will already be there to protect your capital. As a trader or speculator, job #1 is playing superior defense.

By entering your stop orders ahead of time when things are calm, you also have the added benefit of avoiding the errors that can occur when you have to act under the gun and you're not used to doing so. Errors cost money and you can assume that if you make an error, it won't add to your P&L, but hurt you.

View Details

Professional poker players know (as best they can) the expected values of every hand they play. The best of them know what hands to play from what position. Like traders, poker players have to make decisions under uncertain conditions with imperfect information.

They know what the percentages are of their hands improving. For example, if they are dealt a pair of Kings, they know the probability of getting another King to make 3 of a kind (a set of Kings), or quads - four of a kind.

They know what the probability of making a straight if they have two connectors or making a flush if they have two cards of the same suit.

This allows them to the knowledge to know how to bet given the odds and the size of the pot. Yet it's still possible that they can do everything correctly and still lose the hand. That's going to happen quite a bit if you play a lot of poker.

Like in trading, you can become emotionally invested in the outcome of a hand. If you have a pair of Aces, you can get beat from time to time despite Aces being a strong pair.

Professional traders can learn a lot from this type of knowledge. If you trade long enough, you will get beat when everything looks to be in your favor.

I've been long stock that beat earnings estimates, but was greeted with a down market because of some external factor that took everything down with it - including my stock. Not fair you say? No one cares what my definition of "fair" is when trading. Nothing is fair.

A good way to become mindful of what you could be in for is to study the winning and losing streaks from your backtested results. Most of them will tell you what you longest losing streak is (duration) and how bad it effected your equity (magnitude).

I think this will help you learn to build your confidence and put things into perspective.

The losing streaks that you'll have by trading a system will pale in comparison to those that you'll need to endure if you are day trading or trying to ready charts or "set-ups." Those are a thing of the past.

The modern trader - the trader who is going to set himself up to win for the rest of this decade and into the 2020s will have 100% of his trading rules backtested, know the expected values, and have rules to eliminate sub-optimal trades, and have rules built-in to trade for the marathon of the next 20 years. That does not now nor will include trading based upon charts nor intraday data.

Firms are investing tens of millions of dollars to trade against the short term lovin' traders as they are easy to pick off and bully. Plus, in that space, there are a million suckers born every minute so you've been warned: don't be one of them.

Trading simulation software will allow you to vary start dates, the instruments that you are trading at any given time, how to measure volatility, and how to cut risk during losing streaks.

A great book on how to understand what a poker player learns to contend with is "Getting the Best of It" by David Sklansky.

View Details

Go check out The Imitation Game on Netflix if you haven't seen it yet. It has many analogies to trading

Good trading is about being able to distinguish signals from noise. In the short term, everything is noise though - even potential signals.

When you don't have a plan, everything looks appealing. Any big move that you're not in gives you the emotional feedback that you've missed the move and that you should have.

The Enigma code breakers had great motivation to crack the code: save English lives and end the war. Our motivation is to limit risk and be in high expected value trades.

You can use price as your main signal, but admittedly, in the short run, it looks like noise. It's not until you look back to see the statistical significance of today's closing price to the past that you can begin to ascertain whether it's signal or noise.

Your trading system is what you can rely on to decipher the data and create trading signals that you can rely on. Without a system, much of what you see can be construed as disinformation - even the price. This is especially true for short-term, intraday traders.

This is why I think you're in for a life of frustration if you're trying to day trade: all the intraday data are random. If you're lucky enough that today's intraday data is aligned with significant weekly or monthly time frames, you might have a good trade. If that's the case, keep the trade though and let the momentum follow through overnight and over the weekend. That is the only way you can fight the manipulation that you'll otherwise suffer from the hands of the HFTs and their criminal counterparts - the exchanges.

Keep in mind that most indicators only confirm what you already know the price is telling you. You can probably simplify your trading by removing all the overlays and indicators from your charts.

Compare your daily data with weekly and monthly data levels to confirm your signals, not trading indicators, overlays, or lines that you feel compelled to draw on your charts. If you find yourself needing to do that emotionally, you're grasping for something that's not there.

You can also test your models and from the ones that I've done, the tests that I've run without the technical indicators versus the ones that included them, the results weren't improved by having the indicators included.

I wrote in The Inner Voice of Trading that I felt (and still do) that they are for the most part "emotional bandaids." Indicators won't help you "not" feel the feelings that are trying to teach you something. They will also add another layer of frustration to the mix and I've yet to see one that is foolproof.

The best thing you can do is simulate your trading ideas over 10 to 20 years of data to see if they have any "rich" history.

View Details

Calibrate the risk that's appropriate for your account and your emotional constitution.

Normalize risk across all instruments so that you can create risk units. This way, every instrument will be the same in terms of the risk that you'll represent in your portfolio.

Many commodity traders use the 20-Day ATR (Average True Range) in order to calculate the daily dollar-volatility per instrument. Then, they divide that into the percentage of capital that they are willing to lose per trade.

If the Gold ATR is $2.50 (it's not) then the daily dollar vol is $250 since the gold contract is 100 troy ounces. If you have a $100,000 account and you only want to risk 1% per trade, you can figure out the maximum number of contracts to trade.

$100,000 x 1% = $1,000

Daily Dollar Vol on Gold = $250 ($2.50 x 100 oz)

Therefore, you can only trade 4 Gold Contracts since $1,000 / $250 = 4 contracts

You can also trade only 2 contracts and give them $5 of risk between your entry and exit.

Then to manage the risk, if you enter the gold market long per your entries at X Price and place your protective sell stop $2.50 (the Gold ATR value) below the entry price.

Keep in mind that measuring ATR can be done with a computer and you can backtest all your entry and exit rules with the risk across all instruments normalized.

In doing so, you remove all the guesswork. You have the added benefit of not falling in love with any one instrument risk management wise since each trade will be the same percentage risk in your portfolio (at first, if you don't add to your winners).

More importantly, you won't want to jump off the bridge when you lose money on any one particular trade since they all represent the same risk and therefore you'll not be married to the outcome of any one trade.

It's hard to remain objective, especially if you are looking at the headlines of the day for your trades. Trading a system can remove all of that for you, but you'll still have to a) put on the trades and the protective stops; b) not over-ride the system and "not" take the signals; and c) not over-ride the system and put on trades that were not system generated.

If the volatility in the commodities markets are too great for outright trading, you can consider trading intra-commodity spreads. In a spread, you are simultaneously long and short two contracts of the same underlying but of different expiration months.

Instead of trading for an up or down directional trade, you trade the relationship between the two contracts for them to narrow or widen.

You are afforded lower margin with spreads, so if your account is smaller, it might be a good fit for you to get going in commodities. The good news is that most professional traders know the spread markets very well so it's a good idea to learn them anyway at one time or another.

You typically have lower risk since you are long and short at the time time and the seasonality of physical commodities tends to be very reliable.

We have some free educational training videos for you on this topic.

Go to MartinKronicle and set up your Free Account to get access.

View Details

You have to plan for 10-baggers in your portfolio and position yourself tactically and psychologically.

Two things need to occur regularly:

1) big moves don't typically happen intraday

2) you have to believe that you are capable of doing it emotionally and psychologically

Tactically speaking, you need to let time and money work for you for best results. A 10-bagger has to have been a 4-bagger first. Don't cut the 4-baggers at the knees. Place a trailing sell stop order and let the trend continue (if long). Don't impose your will on the trend.

Sit on your hands and let the market forces work for you.

Think in terms of percentages and not dollars. If you risk 0.50% per trade and it's a 10-bagger, you'll add 5% to your overall portfolio. What will that do to your Incentive Fees?

If you're smartly abandoning day trading (smart move), you need to find a better way to deal with the discomfort that you feel when you don't take short-term winners at the end of the day or before the weekend.

What is the discomfort trying to teach you? For each of us it's different.

nwiUllingness to feel the discomfort in your trading is also denying the the feeling of what you'd feel by having a 10-bagger in your portfolio.

In other words, the feeling of having a 10-bagger is on THE OTHER SIDE of not taking short-term profits.

Why don't you want to feel the feelings around getting a 10-bagger? Aren't you worth it? I think you are...you are willing to do the work - you might as well get paid as much as you can for it.

You can release that discomfort in yoga class or in your Trading Tribe - and replace the satisfaction you get and not sabotage your trading and still get to feel the feeling that you seem to want to have (because you're seeking it everyday - you must love it, unless you're a masochist.)

View Details

Here is chapter 2 of the Audiobook version of Inner Voice of Trading.

View Details

What are your personal Mission Statement and Strategic Plan for your trading? If you have them, my guess is you have tasks and goals with specific dates.

Professional traders also have Emotional Plans to take into account the Relative Strength Indicator (RSI) of their feelings about what they do during the day. Our psychology and emotional makeup dictate how we act and behave during the day.

How do you plan to feel good? If "I feel good when I make money and I feel bad when I lose money" is the ethos, we need to rework this a little. All you can do is follow your backtested rules. If you have the discipline to do so, define "happy" as "I followed my rules today which was the best I could do, therefore my thoughts, feelings, and behavior are in alignment and that alignment will lead to superior performance over the next year."

We can't predict when the profits will show up, so having a monthly goal of 5%, for example, might provide you with the goal of frustration because that is the result. [Intentions equal results.]

Rely on "Best Practices"

Best Practices in trading does not include day trading, intraday trading, or anything short term. Behavior predicts where we end up in life. What we do today provides us with the trajectory to where we want to go. We need to be mindful of the quantity and quality of the work we do.

Go through your activity with a fine-tooth comb. How do each of the points add up to profitability? Or, what 2 or 3 items in combination add up to to a positive slope on your trajectory.

What do you want trading to do for you in your life? What does it fulfill?

What do you want your money to do for you?

Making money is the end result of a big technical and emotional system.

"Discipline Equals Freedom" - from the book Extreme Ownership

We need to work hard, but also work smartly. If we focus on bad habits, we will be working hard, but not smartly. That's what day trading is to me: hard work for no money and a great expense of time.

Notice where your behavior breaks down and diverges from what your Mission Statement delineates.

If it's technical, take a class and read up. If it's emotional, take a yoga class, learn to meditate, or join a Trading Tribe.

We are all students over the entire duration of our trading. The best traders are mindful of everything they do and don't do. Everything they want to feel and not want to feel.

Keep in mind that the feelings that you don't want to feel have as much power over your behavior as the feelings that you actively seek out.

Don't judge your feelings, seek the wisdom that they are trying to teach you. If the feeling of public Pride is the "heads" side of the coin, realize that "tails" is public, abject humility. Use this rule to help target the feelings you want in your emotional system.

View Details

We as humans love stories and our brains are great at putting pieces together and following logical sequences. That doesn't mean they are worthy of investment or for trading.

"Stories" as they relate to investment themes are a bad for of entertainment. When you marry this logic with fear or greed, you can put yourself in a very unenvious situation very quickly by losing a great deal of money quickly or worse.

Looking for a promise in a world of prevarication. Why would you need to be alerted to an idea from mass media instead of doing your own research? Who's accountable for the gains and losses?

Own Your Own Process

You must think along the lines of being your own person - that's how you have a principle-centric life. You are in control and own all your gains and losses. Picking ideas from the media isn't a trading process anymore than chart reading is.

And following an on-air personality and trading alongside them is no different than betting that King Charles is going to hit his next shot or Houston Astros' Center Fielder and World Series MVP George Springer is going to hit another Home Run. Go look up the Hot Hand Fallacy.

Ask any real trader and they'll agree with me: traders live in a paradigm of personal responsibility.

In the end, you need to own your own process. If you don't have one, don't trade until you do. You cannot delegate the key aspects of a trading system to someone else nor make key decisions based upon someone else's philosophy.

Here's what you're missing if you are sourcing your trade ideas from TV or from the charts you see published via the Twitterati:

1) entry price

2) exit price

3) position size & risk management

4) stage of trend (if there is a trend)

..."and the grandaddy of them all..."

5) correlation risk to what else is in your portfolio

We can add another once we add you to the equation:

6) the best way to express the risk for your psychological makeup

That means, do you rely on the the equity, options, or futures markets to effect the trade? Which is most suitable for you and your emotional constitution, years to retirement, and tolerance for risk.

Develop your own fundamental ideas from your daily life. That is something you can witness by yourself. Then, marry up what you see for yourself with the direction of the trend.

If there is no trend, you might be wrong or you might be early to the trade. If the trend has begun, that's not a bad thing - there might be much more left to it.

Don't be turned off from this situation as most trend followers are "fast followers" and adapters than inventors, so to speak.

View Details

The business of trading is going to AI and more algorithms in the hands of new traders and retail investors. If you are trying to figure out what headlines are going to drive prices, you're a better person than me. I would rely on computers to do that

Bill Dunn, a 100% purely systematic trader since the early 70s, has been incorporating all the data he can find and incorporates that into his model.

Since 1974, he has taken only 1 discretionary "trade" and that was in advance of December 31, 1999 or the Y2K issue. The trade was to go flat and offset all his positions since he had no historical information to base his decisions on - including existing positions. This trade was taken to protect his clients' funds. Other than that, he has only traded system generated orders for over 40 years.

If you are trying to raise capital, you'll have to have a good answer for prospective clients as to why you think you can shoot from the hip and make clients money as a discretionary chart reader

In that regard, you are the share price and security. What information does the potential / allocator have based upon your behavior around security selection and trade management that will give them enough confidence in you to give you an allocation.

You'll make more money by managing OPM - Other People's Money and taking an Incentive Fee.

Ray Dalio feels that you should learn to code regardless of the industry that you're in else you'll be replaced by a computer. The computer can make the decisions faster, without emotion, and without error. Ray makes his decision in parallel with the computer and it provides "check and balances" between his thinking and what the calculations can show. He also won't leave out a key piece of data.

View Details

If you want to be a professional trader, losses and drawdowns are part of the business. You have to learn to live with them and be at peace at the same time.

If you've backtested your rules as you should have, you can tell from the Monte Carlo simulated results where you are in your current drawdown with respect to where you are now. Backtesting can give you perspective on that is great detail.

If your current results on "in model" - meaning the current results are within the parameters of what you have now - there's no reason to pull the fire alarm.

You might be on to something and not know it because you quit too soon. If you take 10,000 coins and flip them 10 times each and keep only the ones that come up heads, and keep flipping them you'll have 9 left after those 10 iterations. What can you say about the quality of those coins? Moreover, what can you say about the 9,991 that came up tails at least once and were discarded? Nothing really - those are random results.

Likewise, when you are trading, sometimes you'll just open an account and begin trading at the wrong time or a time of "bad luck" where the market is not conducive to your systematized rules.

You're not a losing trader if your system is in a drawdown because you are following best practices. All you can do is follow your rules and put your trades on by entering your stops.

There haven't been any backtests that I've seen on Bullish Flag patterns, for example, that tell you what the winning percentage is and what the expected values are by risk unit size. If you trust the person you've learned this from and you blow up on a pattern, that's on you.

I get it, being a chartist is cheap and all you need is a web browser. That might be all you can do to get started trading, but keep in mind that this type of trading does NOT fall into "best practices" anymore when the lowest common denominator can do it. You nee to dig deeper to define your trading edge.

Advice is like mushrooms, the wrong kind can kill you.

Relying on chart patterns is becoming a thing of the past as the computers are becoming more and more powerful to compete about and interpreting chart patterns is subjective and subjective trading is not trading with a definable edge.

View Details

Why do I practice yoga? It's impactful on my life and therefore it affects my trading.

I had no idea what impact it would have on me when I began my practice. If you haven't started, I would give it a try.

One of my teachers Erich Schiffmann has called yoga a "moving meditation" - you lose yourself in the vinyasa flow and don't think about the choreography of the flow.

Become mindful of your breath and you calm yourself, lower your blood pressure and level of stress. Surrender to the process and notice over time how you feel better the longer you practice yoga. I admit, I did not feel this way within the first 3 months of practicing yoga. But there came a point where I didn't want to go a day without it. The blissful hangover you have the day after a yoga class is worth the effort.

When you feel better, I think you'll trade better. You won't have the knots in your lower back, the stress in your shoulders, or tight hamstrings that distract you during the trading day.

You can also just meditate and forget the yoga altogether, but the benefits to you overall body with yoga are superior to that of just

You can also tap into your subconscious also by going with the flow and seeing where you are holding stress in your body and all the feelings that you are holding on to that you don't know you are holding on to...you'll release all the energy that your body is blocking mentally and physically.

You'll also develop a stronger sense of mental stamina because you'll condition yourself to quiet your mind - and that means focus. When you focus, you'll be able to harness all your mental power and put it on the task at hand. You'll also benefit by NOT spending energy on things that don't matter anymore. That's how your life will improve.

You can watch yoga lessons on YouTube. You can also buy some DVDs to practice at home. IMHO, you'll benefit more if you are a beginner because your teacher will help you make the adjustments so that your postures are picture perfect. Like for baseball pitchers, you want to have great yoga mechanics so that you don't inadvertently hurt yourself by trying to go to deep into a pose.

My good friend Ally Hamilton has an online yoga school where you can stream lessons for $10/month and have access to some amazing teachers - many of whom I know.

Listen to my interview with Ally Hamilton

Listen to my interview with TM master Norman Rosenthal

View Details

Forget chart patterns and focus on price. Price is the only thing on Wall St. that will tell you truth.

Every chart pattern will be captured in the price and the values of price over time. You can hire a programmer to capture those price movements and design your own algorithm to enter and exit trades as well as the correct position size.

Chart patterns are supposedly created by plotting prices over time. Some believe that patterns repeat themselves. Some believe that history doesn't repeat itself in exactly the same manner.

Human beings are emotional beings, even if they run systems. Even the most grounded and mindful individual has to interpret the chart patterns to "make something out of it." Then they have to figure out where to put on the trade and where to exit.

We are feeble at best and relying on subjective views is not the way of the future. Today, firms are spending tens of millions of dollars on AI and trading platforms to feed off of discretionary traders. It's job security to them.

There will always been someone who thinks they can beat the market by trading things off the top of their heads. Everyone is against you these days. The exchanges, the Broker-Dealers, the trading platforms - they are all the enemy in this day and age. They are encouraging your to make transactions as if making frequent transactions is the key to trading success. It's not.

Your f*** you money is their Earnings per Share. They look at the quality of your money in a more material way than you do. Don't give it away by making amateur-like decisions.

Charting is becoming a thing of the past. You have to evolve now so that you'll be in position for the new market that will be in full force in the next two years.

Sal Arnuk of Themis Trading told me that there are over 2,000 algos and trading rules that are already set to beat you and induce you into sub-optimal and losing trades. That number is growing by the day.

In the next two years, AI-based trading platforms and exchanges will have a rule to trade against you that says "7 out of 10 times, this guy (you) put this trade on when we pushed the stock by x% in this particular chart pattern. Each time he was good for $0.50 per share to us - minimum was $0.20 and the max was a whopping $1.00 per share. Each time he does this we must trade against him because he is a high, expected value sucker for our setups." So what you think are trade set-ups and reliable chart patterns are really nothing more than trade bait to get you to give over your money.

View Details

If any of our shows have resonated with you and you've gotten some valuable insight, please subscribe and leave a review. There's a lot more to come and we need your support.

It feels good to have a winner when you are coming out of a drawdown.

Trades, like hitting in baseball, will come in groups and segments. We are powerless over when and how those streaks will show up. All we can do is follow our rules that we know have positive expected values.

Follow your rules even if you are in a drawdown - here's why.

If your model generates trades that have positive expected values, and you DON'T put on the trades, you are effectively giving that money away each trade that you do not put on...so you're still losing.

Think in terms of percentages, not hard dollars so you don't get hung up on what you're missing out on. There is a trade-off between what you lose on a trade and what you could have bought with that money, but remember that there is a "quality" to your money.

The money you save is not the same as the investment capital you have. In Economics, "saving" is the act of "not consuming." Investing is looking to outperform cash.

Remain objective and let go of the need for one specific name to bring you to the pearly gates.

Focus on process and the results will come. You are powerless over WHEN they come. Surrender and let whatever name your system generates bring you to the holy land.

I'm often surprised that what I thought would work out as a trade did not, but some obscure name that my system generated was a 5-bagger and made up for a lot of other losses. Trust in your process and your system. The less you impose your will on a trade, the more sane you'll be and probably more profitable also.

Two Free Offers

Tony Saliba's Options Playbook

Inner Voice of Trading Audiobook

Subscribe

View Details

Don’t cut your winners - add to them. They're hard enough to find in the first place. Even though they are trades, look to hold them for as long as possible.

Everyone sees the same moving averages, breakouts, and pullbacks. Everyone is looking at the same contracts and stocks.

So how do you make the monster gains?

You can be lucky, you can bet big, OR you can have a winning trade and decide to stick with it and add to your winners.

If you are using ATR to measure your risk you can add a new risk unit every .5 ATR away from the previous entry. Base your new entry on the previous fill, not the system generated price.

For example, if you got long at $60 and the ATR is $2, then the next entry will be at $61.

This is discussed in detail in Way of the Turtle by Curtis Faith.

The Turtle Trading Rules generate very erratic returns. In today’s environment, the results are too volatile to garner allocations from global macro hedge funds. You will be measured on your daily vol. Back in the 70s and 80s, traders were evaluated on creating large gains. That’s not the case today.

IF you consider trading these rules for yourself - beware. The drawdowns are large and can range from 30 to 60%. You will still have to modify them.

You can vary the size of your second entry and add a smaller size to your existing trade.

The Turtles added the same size risk unit at each entry point. That means they’d enter the market at 60, 61, 62, and 63 - using the example above - all with the same size.

With the market vol being where it is today, you could likely go home long 3 risk units at 60, 61, and 62 and the name would pull back to 62 and you’d be at break-even with 3 risk units on.

In order to avoid that, you should consider adding smaller risk units to your initial trades. If your first risk unit has 4 contracts, consider adding 1s or 2s to the existing position. In the event of a pullback, it won't hurt as much. Of course, you need to test these ideas to get a feel for how such trades will behave and see if you are compatible.

Another method is to add to your winners above the next level of resistance.

In order to win big, you need to know yourself more than any other part of your trading.

Get your free copy of the Inner Voice of Trading Audiobook

View Details

Be open to learning new things and new ideas. They can lead you to garner insight on your trading.

We make our money as traders in position sizing. I use position sizing to be analogous with risk management. I can always move my entries and exits to accommodate my trading size.

It’s the effect of volatility on my position that determines my open trade equity - which can be positive or negative.

If the dollar-volatility of the instrument you’re trading is large than your risk unit, you might have to pass on that (and several other) instrument. If the daily vol on a gold contract is $4,000 and you only want to risk 1/2% on a trade on your $200,000 account, gold is too volatile for you to trade.

If gold’s daily vol is $40, then the dollar volatility is $4,000. You can change that. Trying to trade gold within the range of the normal vol and only risk $10 per ounce will likely get you stopped out for a loss much more frequently as the vol is non-directional and random on any given day.

You can't change the vol anymore than you can change someone's personality or behavior.

Free audiobook - Listen to your Inner Voice

View Details

Like your dog, your stop order is your best friend.

Your stop orders stand sentry to your risk management program so learn to trust them. Broker-Dealers have great incentive to execute your orders when the price trades at or through the stop price so you can count on them to do a job for you. You don’t want to be shooting from the hip and making decisions on the fly.

Stop orders are the ultimate employees. They never leave, have unlimited stamina, don’t call in sick, don’t have bad relationship drama, and are very reliable…

You can enter Stops GTD or GTC - good for the day or good ’tip cancel.

I use GTD stops to enter and exit the markets exclusively. This gives me a state of calm and not chase any market. The markets come to me. That puts me in a place of power. Why? I place my stops at places where I project there will be other buyers and at which point the market will have initiated an upward move. I don’t want to be long an instrument that’s not moving or trending.”

By acting this way, I let the market determine when I should get in or out. I’m never shooting from the hip

“If it’s not going up, don’t buy it in the first place.”

Enter your stops for the day and readjust as the market moves up. You’ll get into a groove of entering and resetting stop orders.

If your Buy Stop above the market doesn’t get hit, think if it as a good thing. “Rejection is God’s Protection.” No sense in getting into a trade if it’s not going to serve you. There’s only one reason to get into a trade and that’s because it has high expected value. You can test your ideas to figure out which ones are high EV trades.

I don’t use Limits as further price qualifiers. They make the trade less liquid and the last thing you want to be is long in a rapidly falling market when you could have gotten out. Slippage and skid is a part of life and if your need for such is great, get that feeling from throwing darts and keep it out of your trading. It’s better to incur small slippage, rather than larger losses b/c you had a Limit on your Stop.

Listen to your Inner Voice - or mine if you don't have one yet

View Details

Group your positions for better risk management.

You can have stops on each position. Put them on the groups and sectors as a whole as well.

For example, you might have a stop on your open gold trade limiting a decrease in your equity by 1% from the current market level. You might have the same for Tesla or Apple Inc.

Consider putting stop on all the metals in your portfolio so that collectively the aggregate risk across all of them is set at 2% for example.

You can test for the best level for you. The question is “what is the probability that I’ll be down 5% for the period if I’m already down X% given the backtest?”

That means, if you have 4 metals trades on in gold, silver, HG, and platinum, you may stop out of all your metals although a particular stop on any one of them was not hit.

That’s one way you can improve your performance and lose less.

Another way is to put a stop on your overall equity for the day, week, or month.

I think there was one time in PTJ’s career that he didn’t want to be down more than 10% in any given month, so he put a stop on his overall equity of such.

It’s key that when you hit that spot and get stopped, you actually stop trading. In the case of PTJ, he’d be done for the rest of the month. That might be hard for you if you like the action. Most professionals or aspiring professionals want to be experts in managing risk, not making frequent transactions.

In order to deploy any of these strategies, you’d have to offset your positions manually and then go in and cancel your existing stop orders - and I would do it in that order. Stop losing money first. Cancel open orders second.

View Details

The one surefire way you can become the best you can be - they way you become great - is to focus on Rules not Patterns

Head and shoulders patterns are not carved in stone. They look recognizable but must be interpreted. Like the Chinese language, there are more than a dozen dialects to this pattern.

Humans like us are bad at estimation and prediction. Read Phil Tetlock.

For every well-known “chartist” there are 25,000 guys who tried the same and blew up or didn’t make it. It's also emotionally and mentally draining to have to replicated each day.

Recognizing a chart patterns are no different to me than recognizing an odd number from an even number. What do you do with it? What’s the context of the information?

When I moved to LA from Manhattan, we all got a book of street maps called the Thomas Guide. It’s a spiral bound book of maps that we all kept in our cars. GPS was not included in smart phone plans and you had to get it separately, but it was expensive.

If you don’t know where you are going, having a Thomas Guide in your car is not going to help you. It will help you get wherever you want to go, but you need to come up with the destination. Same with trading. You need to know when to enter and exit and how much to own (or how fast to drive).

If you “recognize” a pattern, you don’t know where to enter, exit, or position size. That’s why I don’t consider charting as a long-term methodology to trading for the majority of aspiring traders.

Whereas a certain chart pattern might appear bullish, you know you're bullish when you have an order in to buy an N-Day high and that the expected value of that trade is 4 times your risk unit - regardless of the pattern. Trading rules supersede all chart patterns and remove the paralysis from analysis, the interpretation, and the uncertainty that comes from not having a decisive plan.

In fact, the way most good traders become “great” or even just better, it’s by letting go of charts and focusing on process and trading rules that are not derived from chart patterns.

Go from good trading to great trading.

View Details

Trading is a lot like poker. You're trying to made smart decisions under great levels of uncertainty with imperfect information.

That has been the case since the beginning of speculation. In many bubbles and manias, there sometimes isn't any fundamental information that's worth knowing. In that regard, you have to trade against the crowd or herd.

Chart reading as a skill is lot like trying to understand spanglish. Most of it is about interpretation.

You need to automate your data scanning asap to make things easier on you. Not doing so will exhaust you over time. I know it might be fun to scan the markets by hand, but you're going to find that you can't compete with a computer and a scanning service.

The downside of doing things by hand is that after a great deal of manual scanning with no results, you become desperate in thinking that you are missing out because "the markets are moving."

If you're a directional trader, volatility does not equal opportunity. If you're putting "today's big movers" on your screen - what are you looking for? A clue on how you could have gotten in before the move?

Don't be a piker - automating your rules is the first step to avoiding that scenario. No pro is "doing it by hand" - that's how retail traders do it because they don't know any better and they've bought into their trading platform's features as being benefits. They are not.

A good tool to use is called "Unfair Advantage" by CSI Data. It's a premium service, but I've used it myself and I vouch. I don't benefit financially for saying so.

Forget the charting, UA has a built-in portfolio manager and a correlation study and these tools are much more valuable to help you make decisions based upon expected values than looking at charts.

Become a "Super-Mind" Trader

View Details

Sitting on your hands is sometimes best. Like the Red Sox should have done with John Farrell.

Only trade when you have an edge. Casinos in Vegas never close because they "never" don't have the edge (in most games).

Exiting Winners can be a hard trade. You don’t want to get out too early, and you don’t want to overstay your visit so to speak.

In order to make the most money and have total sanity around winners because you’ll be executing the same trade effectively for each winner you have. That leads to consistent behavior. Consistent behavior in trading leads to consistent and profitable trading.

No second guessing yourself.

Sometimes you’ll get knocked out.

Sometimes you’ll get to stay in the trade and it will continue to grow.

Don’t isolate your trading to fret about one winning trade. Think in terms of how you’ll be in this situation 1,000 times in your career and now you’ll have a plan to handling exits with your winners.

The LAST place you want to be is to have to make decisions around handling winners each time you find yourself in a winner. That’s emotionally exhausting.

Know what you’re going to do BEFOREHAND and follow those rules.

Here are three potential techniques to exit winning trades:

Sell an “N-Day Low” for your Longs where N is the number of days in your look-back. N can be 5 days, 10 days…you get to set it.
You can wait for the shorter term moving average to cross below the longer to generate a sell signal. For example, when the 5-Day crosses below the 20-Day moving average, you sell your long.
Employ a “time stop” where if the security does not resume its uptrend in “N days,” you sell.

Learn about yourself and become the best trader you can be.

Get your free copy of The Inner Voice of Trading audiobook.

View Details

It's been a big week on behavior... You have to be willing to feel all your feelings around trading. What might be holding you back from great success could be your reluctance or lack of willingness to feel new feelings around techniques or trading styles that are different from what you're currently doing.

Go back and listen to the "Rituals and Routine" episode. You might understand a trading technique or style intellectually, but you don't know it thoroughly until you've experienced it emotionally and psychologically.

Ed Seykota taught me that "the feelings that I don't want to feel have as much power over me (my trading) as the ones I do want to feel."

When you are willing to feel all your feelings, none of them can control you. They are all trying to teach you something. Are you open to listening at least?

You can test a new system (feeling) with 5 or 10% of your capital. If you trade enough, you'll realize that certain trading styles and techniques are there for the sole purpose of generating the emotions you are willing to feel, even if the trading strategy is an economic bad - day trading, for example.

You might be married to your current methodology not because it's the best one for you, but because you like how executing it feels. I suspect this is how most aspiring day traders feel.

You get to hang out with other guys, talk shop, have a sense of community, yet practice a belief system around trading that is not effective for long-term success.

View Details

Your Daily Process Can Be Killing Your Career or the prospects for your trading career. Professional traders bifurcate their trading day into preparation and tactical.

After the close, pros get prepared for the next day in terms of research and running their models.

During the following day, they spend their time focusing on trading tactics and managing risk.

This type of focus on your behavior provides a platform for enhanced performance due to your focus.

If you try to do 14 things at one time while trading, the lack of focus can lead to your making errors, missing trades, or taking small losses.

This is a short list of what can happen... I would not try to find trades "on the fly."

That's amateurish and chasing trades or markets is not a sound strategy in order to build a long-term track record on your P&L, nor is it behavior that you can replicate for years and years energy-wise.

Do your work the afternoon or night before, and spend the next day executing the plan.

Don't waver from this discipline. It will serve you better.

View Details

Routine or ritual? The things that you do might feel good, but not actually effect your P&L.

That doesn't mean they are bad, but it's a good idea to keep a journal on your activities so that you can measure their efficacy. Why?

Time and energy.

Physical and emotional economics.

Your trading career is summed up by your trading P&L but also what you need to experience in order to achieve those results - regardless if the P&L is positive or negative.

View Details

This pertains to trades that you are in, not trades that you are about to enter. Consistency and discipline will show up on your P&L. That's the numerical representation

If you see a chart on Twitter or StockTwits, delete it. It's not helpful, insightful, nor entertaining.

How do you handle your winners?

Do you feel enough anxiety to want to take it out of your portfolio and get rid of it?

Are you afraid you're going to lose it?

Those are emotional issues, not financial ones. These emotions might appear for you whether you're a discretionary chart reader or system trader.

Do you have the willingness to love it and let it grow up and develop into something amazing?

Do you become overbearing and stalk the trade and keep it on your monitor all day?

When the vol expands, you can trim the position so that you have the same percentage risk that you did when you added the position to your portfolio, or when you added your last risk unit.

When vol expands, you can cut the number of contracts per risk unit.

Allocators are looking at your daily equity volatility and in today's environment, they are looking for low-vol gains.

View Details

Practice Having Discipline Like for a baseball pitcher, it's about feel and consistency.

That means discipline.

You need to do the same thing over and over in order to be good an anything and that's especially true for trading.

In trading, that means you have to start with good habits, trade positive expected value trades, and consistently replicate that process.

If you have a smaller account, you might think you are relegated to penny stocks or fallen angels.

I would not do that because the emphasis is on making lots of transactions. Unless you are an HFT firm, the number of transactions work against you.

Stay in your winners for as long as you can. They go a long way to ensure you are successful or are becoming a successful trader.

What I would do if I had a small account or was underfunded, is to either trade commodity spreads or option strategies.

You can create hedges with either strategy and limit your risk while putting the odds in your favor.

The margin requirements are also smaller so you don't have to tie up a great deal of your trading equity in one trade.

View Details

The benefits of running a system are multi-fold. Once you trust your model, you can go deep...

Once it's live and trading, you will learn about the markets, your model itself, and most importantly, yourself.

You have to be there and be conscious of all that's around you. A good trader will not become too euphoric in good times (they are what they are) nor too despondent during the bad times (as long as they are 'in model').

It's possible to have worse results than what you saw in the Monte Carlo simulations. That requires a great deal of discipline, for it's the daily discipline that will help you express your edge...every day, every week, and every month.

It's the consistency to be disciplined that will show up on your P&L.

So you can outperform a great lot of traders, even some pros, if you can be consistent with your daily discipline and not wavering from it.

Free Offers

Inner Voice of Trading

Managing Expectations

View Details

We traders are people who have to live with uncertainty and make decisions with imperfect information. No way around it. We willingly decide to take this lifestyle on.

Most people can't live with the uncertainly. John Q. Public and Public Pensions will pay you handsomely to make the decisions under the conditions that we must make and as long as you are consistent, they will continue to do so.

You can't do this from the beach or it flip-flops. That's Tim Ferriss stuff. If you want to be a beach bum, go for it. This is not for you.

You have to be dressed as if your best client can walk through the front door at any time. Looking like a frat boy is not how you install confidence and you're not going to trade $2,000 into millions.

Tiger Woods played his best golf while his personal life was a big lie. Think about the emotional system he needed to play his "game."

When his personal life blew up, so did his game. It's as if he needed the secrecy and his clandestine behavior to play at a high level consistently. Maybe that's how he got "in the zone."

That's how his emotional model served him. How is yours serving you?

Nothing should get in the way of you feeling happy and trading. If trading is making you feel bad, you can quit trading.

Go for a quality, happy life first. Put a protective stop on your trading career to preserve your happiness. Driving yourself nuts is not worth it.

Free Offers

Inner Voice of Trading

Managing Expectations

View Details

Setting Price Targets is fear-based behavior and you don't want to let fear dominate your trading.

Setting price targets is about your fear, not greed. You set a price target so that you seem "reasonable" with yourself in terms of what you want from the trade.

Why set your sights so low...?

You need to start thinking bigger to allow your trades go to 20-1 in a reward to risk ratio. Let the market tell you where the bigger move is over.

If you can't imagining it happening, it won't happen for you.

You may have been coached wrong or have been instructed in a small-minded fashion in setting your sights to low.

It's your fear that gets you out of the trade too early. Only small traders are looking short-term. Let the HFT guys chop them up, not you.

Join the big boys and let the institutions push your trades further into profitability. Use the market forces against competition for your greater profits, like in judo.

Whatever trading edge you think you have, you cut it at the knees by taking profits too early.

Free Offers

Inner Voice of Trading

Managing Expectations

View Details

Price targets hurt your performance.

Human beings are "bad" at prediction. There is not much science in guessing where a bull or bear run will end. Previous highs don't necessarily infer a price point where a rally will stall.

Fundamentals matter.

Institutions - the biggest traders in the crowd - place their wagers based upon fundamentals and their overall business. If you don't have a simulator, you can trail the trade structure with a protective stop.

Place your protective stop on your unrealized gains where you'll be financially and psychologically ok if you stay in the trade and eventually get stopped out.

You can ask yourself "How much of my unrealized gains am I willing to risk in order to stay in the trade longer?" The recent bull move in the S&P is a good example of how you can (and should) let your winners run.

Once you do it a few times, you'll become very comfortable with this strategy. You'll come to find that "you didn't have to do anything" to make the extra gains.

Sit on your hands and forget price targets. Let the market tell you when the move is over.

Free Books

Inner Voice of Trading

Managing Expectations

View Details

Take a mental health day whenever you feel you need it.

No one is going to be there to give you permission to do so. Trading is a grind and a marathon.

Doing the same thing day in and day out can become monotonous. You're not loser nor are you losing focus by taking care of yourself.

If you're taking 3 day weekends ever few months/weeks, you might not feel the burn that others feel.

I think it's very healthy to put some distance between yourself and the market for no particular reason.

You don't have to be in a massive drawdown to do this. Shake it up a bit and get back to center.

As you might have heard me say, "there are no external solutions to your internal problems," changing your routine can be refreshing when you're in a lull.

Free Offers

Tony Saliba's Options Playbook

Audiobook version of The Inner Voice of Trading

View Details

Preserve your sanity by implementing maximum levels of allowable losses per day, week, and month.

When they are hit, you stop trading for that period of time.

For example, if you set a daily loss on your equity of 1% and you lose that much on your overall positions, you go flat.

If you have a 8% rule on your overall equity for the month, you quit for the month even if it's only the 21st of the month.

As you approach 8% for the month, you'll want to haircut your overall trading equity (what you base your positions on) by 20 or 30% so that your losses will be even smaller.

If you trade with protective stops in place (and you should), you can calculate how much of your equity you will lose if they all get hit.

You can do this with open trade equity and trailing stops also. It's a very helpful process.

Free Offers

Get the audiobook version of The Inner Voice of Trading.

Tony Saliba's Options Trading Playbook

View Details

Chartists are discretionary traders. This is true for those who have a CMT designation.

How can you define your edge if you are looking at the same charts everyone else is looking at?

Charts need to be interpreted. That's discretionary.

You don't have the same emotional makeup that your chart-teaching coaches have.

You don't have the same life experiences that they do.

If you haven't backtested your rules, you don't know your numbers. What is the expected value of a trade that you put on in a head and shoulders formation?

It's integral to know if you are trading too big or too small for the risk that you are willing to take.

What is your optimal bet size for any trade that you put on?

What is your risk of ruin?

Don't optimize for share size or contracts...that's amateurish.

Forget tiers...

Most indicators are lagging indicators, they don't give you trade signals for entries or exits.

Indicators are emotional band-aids and won't relieve you of having to live with the uncertainty that we are traders must live with. We must make decisions with imperfect and incomplete information. That's the world we choose to live in.

Learn to develop your inner voice - for free.

View Details

Measuring your activity is a good way to begin improving your trading. Time blocking is more quantitative.

You can add qualitative aspect of it also by calculating the sum total of all your trading activity each day.

By the end of the week, you'll be able to see what you're earning per hour.

Marry this with your trading journal and you'll be able to determine what your time and efforts are worth fundamentally.

How effective and how efficient are you at what you're doing?

Challenge yourself to always get the most insightful information you can on your own behavior.

Be brutally honest with yourself. No one else will and you don't want to mindfuck yourself into eternity.

Control what's controllable.

Here is a great book on gaining insight on yourself. It's free.

View Details

Your #1 job as a trader or speculator is to play superior defense. "Your first loss, is your best loss."

Bad news becomes worse news, it rarely gets better. Offset the risk and then you can think with a clearer head.

Don't lament over a losing position when your emotional and financial systems are shocked. Use you entry rules to get back in. That's the best you can do today.

Your main goal is to preserve you capital and play superior defense. I'm not a big fan of band-aid positions - to me it's black and white. You're making money or not.

Follow you rules, but have a circuit breaker that you enact when an outlier event hits one of your positions.

Get the Inner Voice of Trading Audiobook Free.

View Details

How you place value on your time or money determines your trading style.

If you value your time more, you're likely not sitting in front of a wall of monitors all day. It's not worth your time.

If you value your money more, you may be holding on too tight and thinking that you have more control over your risk by sitting at a monitor. You don't.

That's the illusion of control.

Stop orders will get hit regardless of whether you're watching them or not. Let your control issues go. Delegate your hyper vigilance to your stop orders.

Acting this way is a bad habit.

Find out what works and scale that.

Backtesting will get you a good idea of what has worked in the past.

If what you're using is available to the general public, how do you think that adds to your trading edge? It doesn't.

Two Free Offers:

Tony Saliba's Options Playbook

Inner Voice of Trading Audiobook

View Details

Learning to pitch backers is a great skill to scale your trading business.

Go from trading your account to several accounts to getting big allocations from Global Macro Hedge Funds.

You are great at what you do and it's a unique skill to manage risk in the markets.

Business owners know what they know about their own business, but it's a rare skill to have to manage risk in the markets. Partner up with successful business owners because they are risk takers by nature.

Even just the simple process of keeping losses small is a big leap for many potential business owners who you can partner up with.

Two Free Offers:

Tony Saliba's Options Playbook

Inner Voice of Trading Audiobook

View Details

When bad news hits the tape everything is correlated and it always works against you.

You have to be careful that parts or segments of your portfolio don't become "one big trade."

Study the correlation risk between instruments and modify your position sizes in your trading system and portfolio accordingly.

Since instruments can behave similarly, you can inadvertently end up with the financial effect of over 100% of the risk you think you have.

This will cut your vol and smooth out your equity curve.

Two Free Offers:

Tony Saliba's Options Playbook

Inner Voice of Trading Audiobook

View Details

Consistency is the key to your success as a trader. You might have to learn to deal with the monotony in order to do so.

New York Yankee Closer Mariano Rivera had one pitch that he relied on - a cut fastball - and although the opposing teams knew the pitch was coming, he was very effective at what he did.

Rivera has the most Saves in the history of MLB.

You can reduce your activity to what creates alpha and trade set ups that have positive expected value.

Be economic in your activity b/c you'll also need to conserve your energy. It's a marathon, not a sprint.

Do one thing very well, create alpha, and keep losses small and you'll have a long career.

Get your free copy of the Inner Voice of Trading Audiobook.

View Details

Inner Voice of Trading Audiobook - FREE

You have to conjugate your feelings with what it is you think you know about trading. If they don't "feel" good, you won't take the signals and you'll spend a great deal of time second-guessing yourself.

When you do that, it's emotional not intellectual. You are insecure or lack confidence in what you do.

This book discusses how I failed my way to success so to speak in sometimes painful detail.

Persistence and determination have a great deal to do with your success in trading, and in most things in your life.

For a limited time, get the audiobook for free - no coupon codes.

Foreword by Ed Seykota.

View Details

A purchase of 5,000 calls could be part of a synthetic options position.

Why would it be bullish if the trader actually sold 500,000 shares short and used the calls to hedge?

You can use Tony Saliba's option trading simulator to backtest your ideas.

Become a student and get immediate access.

Get Tony's most recent book for Free.

View Details

Don't cauterize your winners. Let them run.

Position size your trades so that you can stay with them as long as possible. You can trade smaller if the vol is bothering you. Then backtest to see how the results would have played out.

You can blend two or more systems to smooth out your trading curve. Adjust your positions by conjugating them with the ATR.

Trade smaller with higher vol instruments and larger with lower vol instruments. Always risk the same amount per trade.

Make sure you are taking on enough risk to meet your financial goals.

You can haircut your equity when you are in a drawdown.

Trading using tiers for position sizes is amateurish as you inadvertently trade larger or smaller than what your optimal risk should be.

Optimal risk per trade can be calculated from backtesting.

Trade with consistent position sizing so that you are only risking the same percentage for each instrument.

One or two percent per trade is extremely aggressive in today's world. Think more along the lines of .1 to .2% per trade.

View Details

You enter and exit the market with stop orders.

No need to be anal and use Limit orders - they make the order less liquid. Your goal is to let the market come to you. Trading otherwise is impulsive.

Love yourself and stop looking at 10 minute bars. There's nothing material there. Trading is about making money, not the action. Buying and selling is not trading.

Sometimes the best trades are ones you don't get filled on.

Don't chase the market.

If it stalls, you'll go head-first into the back end of it.

Use protective stop orders 100% of the time.

Trail the market with stops in winning trades and reinvest your gains into the stop order.

Your stop price is the point where you are willing to transfer the risk to someone else.

You are not smart enough to have price targets. Humans suck at prediction.

Technical analysis is no more scientific than economics at large.

View Details

Timing has as much to do with your success as does your trading process.

Just because you have a system, does not mean that you will begin harvesting cash.

The markets must be amenable and compatible with the rules that you are going to deploy.

This is true if you are a credit option trader also. Selling option premier doest not mean you will keep it.

Monte Carlo your system to see how it would have done if you vary the start date.

The trading year typically doesn't start on January 1… Features are not benefits…

You don't need to program "hot keys" or the buttons on your mouse.

I don't have real-time quotes.

View Details

You need to monitor your mental health, your amount of sleep, and your diet.

Don't be afraid to take a mental health day to reset.

This is a marathon, not a sprint.

View Details

You are responsible for all your success and failure.

That type of integrity will need to manifest in how you handle money - your money and your client money - your investments and your trades.

Until you backtest, you don't know your numbers. You need to know the expected value of a trade. You need to know what the probability is of your risk of ruin.

You can't get this without a simulator or backtesting software. If you have talked yourself into the Johnny Cochran logic of "If it doesn't fit, you must acquit," (no basis in law) you have sold yourself on an outcome that is not based on 100% integrity and is not a 360 degree outlook.

Your success as a trader will come from your knowledge of yourself - what you know, what you think, and how you feel.

You have to own everything you do and that includes all the results of the trades you take and the ones you don't.

View Details

The sum total of all your trading activity will accumulate in your track record. You can be successful and be making a great deal of money right now, but you still might not be a good fit for a particular allocator.

I know a few traders with 20+ years who cannot get big allocations in today's environment b/c their results are too volatile.

These traders have their own models and have been trading the same asset class in mostly the same manner for 2 decades.

Allocators are looking for very low daily vol today. Your daily volatility will increase due to market forces as well as the relative strength of your attachment to your rules.

You have to do your own simulations, backtesting, and research. This is an ongoing process.

Markets will evolve - so will you and your model will need to keep pace also.

And you thought that you can buy someone else's trading rules and make a career?

View Details

With options you can bet where you think something is going to go and also where it might not.

You can backtest and simulate option strategies for outright directional trades as well as multiple option positions.

This includes butterflies and condors.

Love the VIX? Don't fall in love...

You can create a vol trade around any instrument and perhaps better manage your risk.

Tony Saliba's new book shows you how you can do with while minimizing your risk. (I published the book).

Click here to get Tony Saliba's new book for free.

If you are interested in studying this further, you can study with Tony AND get access to his proprietary options trading simulator.

View Details

Trading Tribe

The is a variance between what you think, what you know, and what you feel.

Thoughts are creative, knowledge can relate to intelligence, and what you feel is emotional.

Your emotions effect your judgement, your judgment effects your behavior, and your behavior effects where you end up in life.

We didn't talk about stocks or commodities in the Incline Village Trading Tribe.

We didn't talk about feelings either, except to get into the willingness to feel our feelings.

Then someone would "send" and get into showing us what it felt like to feel what they were feeling. We can relate to the feeling, not to the drama that got someone into the feeling. That was the "story."

This is why buying another person's trading system or "proven" rules is a mishap waiting to happen as you may understand some/all of the trading rules, but that you can incorporate them into something that you can replicate is highly improbable.

Their rules are not backtested despite there working for some people. Our teachers and courses teach proven, backtested rules and include what the emotional tradeoffs are at each point.

Denying your feelings around trading and risk leaves you with a blind spot that will reveal itself just when you are most insecure.

See how we can help you learn to trade for long-term success.

https://martinkronicle.clickfunnels.com/welcome2bu3bjg9

View Details

If you subscribe to get NYSE data, you literally get everything that trades there.

You're not likely going to need all those names running through your simulator.

I removed all the nonsense that I knew I didn't want to be in. I called that process "raking the data."

I removed the following from the data feed:

-stocks below $20 per share

-stocks above $100 per share

-shares with less than 1 million ADTV

-Preferred Stock

You can figure out what is best for you. What is left is what you will run through your simulator. This also helps you stay objective and can stop you from obsessing about one particular name.

Also, it's fantastically hard at best to keep track of all the potential names to trade.

This process can help you stay open-minded.

View Details

Use equity pairs trades to stay in trades longer.

If you are trying to increase your holding time but are scared, you can buy one long and sell another short against it.

Ideas to Test

Look at the strongest equity sectors from a relative strength standpoint. You'd buy the best name long and sell the worst short. You are looking for the long to outperform the short.

This is a relative value trade.

If the market crashes or corrects, the sting of the down move will be offset by the short position.

You have to test these ideas, but this is a creative way to get your testing ideas going.

View Details

Human beings are emotional beings. We all have emotional systems.

If you are not connected to your emotions, you are likely to see them emerge when you are under the pressure of trading. A system is a set of rules that you can follow.

After you get the system generated order, you have to enter the trade into your platform. That's where the fun starts.

The Trading Tribe was set up by Ed Seykota to help traders understand the emotions that would derail one's trading.

Scenario 1: you get a system generated order, but you do not enter the trade.

Scenario 2: you have no orders for the particular day, but you enter an order on the fly. In both scenarios, there is a variance between your trading system and your emotional system.

Befriend your emotions and make them allies not antagonists. They are trying to teach you something.

View Details

Discretionary chart reading is problematic as you can't backtest it and calculate the expected value of a trade.

Only trade set ups (the combination of entries, exits, and position sizes) that have positive mathematical expectation.

Get a simulator and backtest your trading ideas to find the expected value.

The software I spoke about in an earlier episode will do the calculations for you.

Expected Value Formula

E = (Ave Win)(% Win)-(Ave Loss)(% Lose)

Roulette

2 Kings

View Details

The Average True Range (ATR) is a measurement that professional traders use to adjust their position sizes to normalize risk across all instruments.

Normalizing risk allows you to look at Gold the same way you look at Sugar or AMZN for that matter - they are all the same percentage risk to your portfolio.

Don't make the mistake of trading with "tiers" as no one optimizes their trading for the number of shares. You are trading like an amateur if you are trading a security risking $2 if the daily volatility is $6.

Downtiming to intraday time frames is a foolish endeavor and even in doing so, you can't change the fact that the daily vol at $6 is too big for what you're trying to do at $2.

Average True Range ATR

Gorilla Glue #4

Jack Herer

View Details

Don't write covered calls.

Don't come up with a strategy on the fly. You need to know the math before you put the trades on.

Backtesting does NOT predict the future, but it gives you an idea how the idea(s) would have worked out over the last 20 years. What is past is prologue, but at the same time history rarely repeats itself the same way.

I encourage you to backtest b/c you can use the hypothetical results in your marketing and discuss how bad the "bad" would have been in the past.

Most investors or backers want to know the worst case scenario. Backtesting can give you an idea of the magnitude and duration of the drawdown, the worst loss, the expected value of a trade, and the best run of winners.

Knowing these numbers can help you build confidence in your ability and also give you great insight on your emotional intelligence regarding trading performance - gains and losses.

Get Tony Saliba's book for Free.

Go to MartinKronicle.com and look in the top right corner for the details.

Access to his options trading simulator is here: choose "options." It's for students only.

View Details

I don't trust stocks.

Commodities are so much more reliable.

David Stendahl - Signal Trading Group

Moore Research

View Details

You have to backtest at the portfolio level - not one security at a time. Simple models are best.

If you are testing on Trade Station, you can only test one idea and one security at a time. That might lead you to try 45 indicators or studies onto the name - that's your ego talking and you'll not likely have the same scenario show up the same way they more overlays you have.

Again, simple is best.

Test one simple idea across hundred of securities. Why would you spend weeks trying to find a model to trade only the ES or TSLA? That's myopic...

Tradingblox Mechanics (the follow up to Trading Recipes) I used CSI Data as the data source.

Seasonality in commodities is VERY reliable and it applies to both outright directional trades and spreads.

MNNAX was the ticker for Munder Net Net Fund. I said MMNAX which was not the ticker.

View Details

Entries don't mean anything unless you know your exit and position size. Entries are just prices. Entries, exits, and a position sizing algorithm are the 3 crown jewels to a basic trading system.

Don't look at intraday charts - they are worthless and contain the most random data compared to Daily, Weekly, or Monthly charts - in that order. Trading is a game of failure - like baseball.

You simulate your trading rules to a) see if they would have been profitable; and b) give you an idea if you have strong feelings about the frequency of losses and the drawdown.

Trading is systematized attrition of your capital until a winner hits. Risking 1-2% per trade is insane. Start with 0.10% or 1/10th of 1%. Break your capital up into 1,000 units. Don't trade size in your initial entries. Wait for the market to show you which way it's going to go before you add more.

Forget price targets. That's ego talking so that you can be "reasonable" with yourself around greed and fear. How do you know that what is a 3-bagger can't become a 10-bagger?

Learn from Scott Kaminski, Victor Sperandeo, Peter Borish, Tony Saliba, or Michael Martin.

View Details

Michael Martin follow-up with many of the questions with a more detailed context than is possible with 140 characters.

If you don't know who you are, any strategy will look good to you - and that is perilous for new traders.

The StockTwits AMA stream has been published at Medium if you'd like to read some of the questions.

View Details

Michael Martin speaks with trading expert Pete Renzulli. Over his career, Pete has held many roles across his trading career. He discusses how he developed his trading edge in this funny and insightful discussion.

View Details

Michael Martin reads and ad libs off an article he wrote for MartinKronicle.com. The post is on how traders and PMs can raise money from investors and allocators.

View Details

Michael Martin speaks with Cornelius Luca, foreign exchange expert. Topics include Brexit and European elections.

View Details

Michael Martin speaks with former CFTC Commissioner Chilton. Topics include position limits, Dodd-Frank, and disgraced FCM heads Corzine, Bennett, and Wasendorf.

View Details

Energy Analyst Brynne Kelly speaks with Michael Martin about the fundamentals of the crude oil market. Brynne puts out daily market analysis on the crude complex and has several decades of experience dealing in the physical crude oil market.

View Details

Michael Martin answers a questions sent to him via Twitter, "Besides Sugar, what are your 3 favorite markets to trade?"

This podcast is the answer.

View Details

Jeff is at the helm of a Modern Trader Magazine - a storied publication that dates back to 1972. It was originally known as Commodities and then Futures Magazine.

Today's incarnation is not relegated to commodity futures only, but equities, options, and exchange traded funds.

Go to >>ModernTrader.com<< to learn more.

View Details

Join Michael Martin, publisher of the new book Managing Expectations by Market Wizard Tony Saliba and listen to this free chapter from the upcoming Audiobook.

This is Chapter 4 of the 24 chapters and it's called "Options Gamma."

For a limited time, you can get free copies of the ebook and audiobook when you purchase the hardcover.

Go to >> Managing Expectations < Managing Expectations: Driving Profitable Options Trading Outcomes through Knowledge, Discipline, and Risk Management

450 pages with over 200 charts and graphs

Written by Anthony J. Saliba with Foreword by Jack Schwager.

View Details

Ally Hamilton is a Santa Monica-based yoga teacher, writer and life coach, who streams online yoga classes all over the world.

She's the co-creator of http://YogisAnonymous.com, which has been featured in The New York Times, Yoga Journal, Self Magazine, Shape Magazine and The Wall Street Journal.

She's a regular contributor for The Huffington Post, a wellness expert at MindBodyGreen, and writes an almost-daily blog athttp://blog.yogisanonymous.com.

Ally Hamilton changed her life with the eight limbs of yoga, a spiritual tradition first recorded in the Yoga Sutras 1,600 years ago. Join Ally as she shows you how to apply the wisdom of this honored tradition to your modern-day life.

Physical poses―asanas―are the best-known aspects of yoga, but in the eight limbs practice, healing comes through exploring your relationship to the world and to yourself while learning to recognize the obstacles that block your path.

Yoga’s Healing Power shows how to create the life you want from the inside out, working with your mind and emotions, your body and breath, your memories and your pain. With hands-on exercises, meditations, journaling prompts, and stories of healing, this book helps you uncover your particular gifts and begin to feel joy.

Yoga's Healing Power: Looking Inward for Change, Growth, and Peace

View Details

Russell Rhoads is the Director of Education with the Chicago Board Options Exchange (CBOE).

View Details

Dr. Norman Rosenthal, MD is an expert in Transcendental Mediation and has written a new book on the subject called Super Mind: How to Boost Performance and Live a Richer and Happier Life Through Transcendental Meditation.

In 1980s, he was a pioneer in the use of light therapy to treat Seasonal Affective Disorder or Winter Depression.

He speaks with Michael Martin on the many benefits that TM provides its practitioners regardless of whether they trade or manage risk.

Super Mind: How to Boost Performance and Live a Richer and Happier Life Through Transcendental Meditation

View Details

This is a TBT interview that I recorded with Larry about 5 years ago. You'll hear the difference between the audio in that we are using newer hardware and software.

View Details

In today's trading environment, you need more going for you than just a set of rules to make it as a trader. There's compliance, clearing and execution, legal, accounting, and creating a track record.

Most traders don't like the sales and marketing end, so they bury their heads and create trading models. Unfortunately, that is not the path to getting discovered by a seeder or allocator. An aspiring PM or trader needs to begin the thought and planning processes at the same time they are developing their models.

If you don't know what you're doing, take a course in sales and marketing.

Michael Martin ends this podcast by reiterating why you need to have your own model that you yourself have developed.

View Details

By the time he retires in a few years, Peter Brandt will have traded across 6 decades. He is the author of Diary of a Commodity Trader and the brains behind Factor Research.

View Details

Brian Shannon is a prolific blogger and author and a major contributor to StockTwits.

His blog Alphatrends.net is celebrating its 10th year.

His book is called Technical Analysis Using Multiple Time Frames.

View Details

Matt Davio is an expert at trading with Market Profile.

You can learn more about Matt and Market Profile at MarketProfileTradingAcademy.com

View Details

Financial markets are a creation of humans: humans who respond with fear and uncertainty, humans with damaged egos, humans who curse others for their mistakes, humans who make predictions, and humans who follow the crowd.

Market prices, like humans, are sometimes - but not always - driven by sentiment.

Trading on Sentiment: The Power of Minds Over Markets (Wiley Finance)

View Details

There is no such thing as 'revenge trading'

View Details

One of my first tasks as a magazine editor was to "fact check" Jon's written work. Easiest job ever...

View Details

You have an emotional system that you run right alongside your trading system. If you're lucky, the two act in harmony. Frustration is a feeling that can derail your trading. You have to learn to understand what the positive intention of your frustration is in order to continue forward. What is your frustration trying to communicate with you?

View Details

With his free time he runs a family office.

View Details

Richard Sandor is considered the founder of financial futures. He also founded the Chicago Climate Futures Exchange. Now he's created an OTC market for small banks to better manage risk.

View Details

Jared Dillian is the author of the the acclaimed book Street Freak. He also writes a daily research note at www.dailydirtnap.com.

View Details

I've been a big fan of meditation coach Susan Piver for a very long time. She's one of the best meditation coaches you can find, especially if you're not in an area where yoga or meditation is available.

Many traders don't know where to start, so I thought it would make sense to bring in an expert on the subject and record a real conversation between us about the positive impact meditation has had on our lives. It's actually quite easy to begin a meditation practice.

View Details

Renown energy expert Phil Flynn speaks with Michael Martin about crude oil and natural gas. Brent crude is in a bigger glut than WTI so we spoke about the potential for the Brent / WTI spread to invert.

View Details

Aaron Brown is the Chief Risk Manager at AQR. He works with PhD's, CQF's, and some of the best minds in quantitative finance. His firm runs over $US 100 billion and they used advanced math to manage risk.

Yet, I think that one of his greatest challenges was for Aaron to write a book on risk management for non-professionals using layperson's terms.

That's what he's done with his new book Risk Management for Dummies. I read the book cover to cover and then recorded this podcast interview with him.

You can read my Amazon book review.

View Details

Steve Sears and Michael Martin speak about the fallout from China in the gaming industry, the effect of ESPN and Start Wars on Disney, and volatility.

Michael gets Steve's feedback on using long-dated options as surrogate vehicles for investing and Steve discusses what he thinks he and his readership got out of his book.

Stocks discussed ASHR, WYNN, MGM, DIS, VIX, and FXI.

View Details

25 years ago Manny Ochoa was like many of you: he had a model that worked but wanted to grow his business to scale his operations to the pro level.

He used his own limited capital as his initial grubstake and built a track record. That led to an allocation from a major (and legendary) prop trading firm and eventually to owning a seat on the CME.

View Details

Can you have capitalism with a sense of spirituality? My guest today thinks so.

Motivated by an incident at Occupy Wall St., author and coach Kim Ann Curtin investigated how to be a capitalist while having a conscious.

Curtin interviewed over 50 Wall St thought leaders on the subject and condensed her findings in her new book Transforming Wall St.

View Details

In today's episode I answer questions from callers and point them in the right direction. This is along the lines of coaching and mentoring and it's a lot of fun and I know they got a lot out of it.

View Details

Peter Borish is the co-founder of Tudor Investments and The Robin Hood Foundation. He's used to giving back.

He is a faculty member of MartinKronicle and he works best with new traders to make sure they begin their careers well and not establish any bad habits. Needless to say, we don't get any Buyer's Remorse from Peter's students.

Peter is a very sought after executive and is an advisor to several companies and boards. He is the Chief Strategist at Quad Capital. He is a founding investor and member of the board of directors of CharityBuzz. He also served as Chairman of OneChicago.

View Details

Scott Kaminski is widely regarded to be one of the best trading coaches in the business. Scott traded for Tudor Investments for 8 years. His Trader Mastery program comes with the wisdom he's acquired from over 34 years of trading experience and teaching ability.

Scott Kaminski is a faculty member of MartinKronicle as a Trading Coach. His training program is about how to read any market and apply rigorous risk management in trend following and swing trading and to trade only when the reward to risk ratio is asymmetric.

View Details

Adam Grimes is a great role model for today's aspiring traders. He's a successful author, trader, and trading instructor. He leads a very rich life: he's a chef, speaks 3 languages, and taught himself to program (a computer).

The Michael Martin Show: Recent Episodes

Michael Martin