Author Ray Dalio is the founder and co-chairman of Bridgewater Associates, which has become the largest and best-performing hedge fund in the world. In Episode 560 of The Traders Podcast, your hosts Rob Booker and the producer Jason Pyles discuss Palio’s book, “Principles: Life and Work.”

Rob says what was most important in building his company wasn’t knowing the future; it was knowing how to react appropriately to the information available at the time. We traders often become obsessed with a desire to know the future and with being right. Join us for this episode, and let’s explore these principles together.

Thanks for listening to The Traders Podcast. We release new episodes every Tuesday and Thursday. Subscribe free in iTunes!

Links for this episode:

Subscribe to Rob’s YouTube channel here: https://youtube.com/robbooker

Rob on Twitter: @RobBooker

The Traders Podcast on Twitter: @TradersPodcast

TFL365.com

Trader Interviews.com

Be sure to catch up with Scott Welsh at his Website
and at Twitter

Hear Jason’s movie podcasts:
Movie Podcast Weekly where we review new movies in theaters.

Horror Movie Podcast where we’re Dead Serious About Horror Movies.

Movie Podcast Network a group of eight film-related audio podcasts that cover various movie genres.

Full Episode Transcript:

Rob Booker: All right, there’s a new book out, Jason.

Jason Pyles: Oh, tell it.

Rob Booker: This is my favorite book, other than Shonn Campbell’s book Inventory Trading, which if you have not read that book, stop everything, go to Amazon. I think it’s even part of the Kindle Unlimited program. It is magnificent. Shonn’s not a writer and he’s not a professional educator, but it’s a great book. I’m just going to give him a little plug there. Other than that, I just finished reading essentially what is the best book about the financial markets I’ve ever read in my life.

Jason Pyles: Wow. That’s high praise. What is it?

Rob Booker: And I don’t ever say that, really. I said it about Shonn’s book, but there’s not a lot out there otherwise.

Jason Pyles: Yeah, okay.

Rob Booker: So a few years ago, I became enamored with, and there really is not a better word for it, enamored with Ray Dalio, the founder of Bridgewater Associates, and the story behind the building of the largest hedge fund in the world, now managing over $160 billion in assets. And I became fascinated, Jason, with this guy because of his reputation for having a culture at work of radical transparency, which I think we’ve touched on this subject before in previous episodes.

Jason Pyles: Okay, yeah.

Rob Booker: At the company, there are no meetings about other people held in private, unless it’s something sensitive to do with their health, which you don’t reveal outward. But there are no conversations about other people, there are no reviews, there are no private conversations in the company. Everything is recorded all the time, and there are editors at the company that chop up the footage into digestible chunks so that it can be archived and searched for and watched later. There is a culture of radical openness about disagreement, and there’s only about 1,500 employees there, and they have just cycled through and chewed up people left and right, because this culture just does not do well for people who are conflict avoiders. As you and I know, you and I are both world class conflict avoiders.

Jason Pyles: Oh yeah. That’s [inaudible 00:02:12].

Rob Booker: We actually almost made the US Olympic Team for conflict avoidance, but since it was a competition, we dropped out. We didn’t want to compete.

Jason Pyles: Exactly.

Rob Booker: We didn’t want to compete with … We didn’t want to take the spot from somebody else.

Jason Pyles: That’s true. That’s true.

Rob Booker: That’s the culture, and I became really fascinated by this culture that has built this great company. Anyway, they had an internal document at Bridgewater Associates, and this internal document was written by the founder and it was called Principles. Seven years ago, you could only get it by finding a copy somewhere on the deep web, like you could find someone had uploaded an original copy in PDF form somewhere on the web. And you could download it and read it and it was all formatted incorrectly and was messed up, and it was just gold to me. It was just absolute gold. And I would save it to all of my electronic devices, print it out, get it bound, highlight it, everything, because they’re these principles that he used to build his company and run his life, and principles are these universal laws that can be applied to any situation. Instead of directives, which are do this in this exact instance, a principle is a general law that can be applied in a variety of circumstances. And he wrote all 200+ of his principles out.

That became popular, then he offered it for download on his website, and then that turned into a book contract. And near the end of his career … he’s in his early 70s now … he wrote Principles: Life and Work. And I just got a copy on Tuesday, and I just blew through this book, and it was astounding. If you’re listening now and you haven’t downloaded the book or you haven’t read it, I think it’s sold out on Amazon, but you can still of course get the electronic copy. I want to read some quotes from this today, Jason, and just talk about some of the concepts that are in this book. It’s just absolutely brilliant.

Jason Pyles: Yeah, let’s do it.

Rob Booker: What was most important in building my company wasn’t knowing the future. It was knowing how to react appropriately to the information available at each point in time. And As traders, we become obsessed with knowing the future and being right. This is the world’s most consistently successful hedge fund manager ever in history. He’s the most important … other than Warren Buffett, he’s the most important financial persona in the last 50 to 100 years, and he’s telling you it’s not important to know the future, which so many people think is important, that predicting the future is really important. It’s not. It’s learning how to react appropriately to the information that you have in front of you.

An example of this would be thinking that when you plan a trade, you need to plan a trade that’s going to work out. Well, you just need to plan a trade and take it, and then all the money is made, or the success comes, from dealing with it as it is once it’s open. The money isn’t made before it’s open. The money is made from dealing with situations as they go. In other words, to be prolific in your trading at the early stages and learn as much as you can from each individual trade that you take, and then become more selective over time. Anyway.

Jason Pyles: May I ask a clarifying question there, Rob?

Rob Booker: Yes, I mean I’ll take on the persona of Ray Dalio and then I’ll answer your question.

Jason Pyles: All right, thank you. In terms of what you just said, if someone … so how does that jive with not interfering or fiddling with your trade prematurely or something like that? You know what I mean? Where’s the balance there between those two?

Rob Booker: At the beginning of one’s trading journey, there is no balance. You fiddle infinitely with it. You accept that you know nothing, but that there’s so much power and success that can come from openly admitting that you don’t know anything. For as long as you can possibly keep that attitude toward life, you don’t mind fiddling with it, but the point is that you fiddle with it consciously with the goal of learning from that. Open a hundred trades and fiddle with all of them, but make notes about what didn’t work, and in particular, make notes about what didn’t work.

Jason Pyles: Nice, okay.

Rob Booker: And then don’t repeat that. But at the beginning, instead of trying … This is so good that you brought this up. Instead of trying to be so selective at the beginning, putting so much pressure on oneself to be right and to prove to others that you know what you’re doing, don’t even try to prove to others that you know what you’re doing. In fact, openly admit that you don’t know what you’re doing, and don’t put the emphasis on that. So when you open a trade, don’t worry about whether the trade is right, worry about what you’re doing with it, and at the beginning of your trading journey, do all kinds of stuff with the trade. Open up the same trade in five different trading accounts, and treat every single one of them differently, and see what didn’t work. Then as time goes on, see what did work.

Jason Pyles: That’s good. I like that.

Rob Booker: All right, this is another great one. Maturity is the ability to reject good alternatives in order to pursue even better ones.

Jason Pyles: I like that. I like how he says maturity, because yeah, that’s the key to that right there. An immature person would just take whatever they can get, but this is having the insight to take what is best.

Rob Booker: Exactly. Exactly. And maturity … It automatically builds into it the fact that when you start off as a trader, you’re not mature, and you shouldn’t … you don’t have the ability to reject good alternatives to pursue even better ones, because you don’t know the difference. Part of maturing as a trader is taking enough trades and learning enough from them that you can sort out what doesn’t work for you and what does work for you. And he has this intense process that started manually, by hand, and then went, as the computer age evolved, he could throw all this stuff into a computer. But every single time when …

In the early ’80s when faced with the thought and the idea that inflation was spiraling out of control and it was going to lead to a depression, he basically drew a conclusion and went on Wall Street … what is the name? Louis Rukeyser, who was … he did this PBS show on Friday nights that I used to watch … and he went on there and he announced that there would be a depression. And he says, I’m certain of it. And there was no depression, and he was fantastically wrong, and he lost everything. He lost his company, he had to fire everybody, couldn’t even afford to fly to Texas to meet with a client that would have kept the company going.

That all happened because he bet the farm on … and he wasn’t mature, he didn’t know and he thought he did. So when 2007, 2008 came along, they by that point had built all these models, and they could run the data through all of these models. He went through newspapers from a hundred years ago. He went through everything, and he said when all of these economic conditions exist in this way, this is what has generally happened.

And this time, in 2007 and 2008, he didn’t bet the farm, so to speak, and he didn’t say that he was certain. He did meet with government officials and published warnings, but in his own trading and for his own clients he didn’t bet the farm. He put a bet that things were going to go wrong, and he put protections in place so that if the market dropped there would be a hedge. In the year 2008 when the market was down and the average hedge fund was down more than in any year in history, they were up like 42% or some crazy number. Or 14%, whatever it was.

And he said, I could have made even more, but what I did this time was I didn’t bet the farm. He was mature. He did all the things right because he was mature, and he only got that way because he’d been doing it at that point since the early ’70s, so for 30+ years. There are a lot of people in our industry and in our world of trading that want to be that good, and they want to be that good within 12 months.

Jason Pyles: Oh yeah, that’s the hard part. You just want to be successful and mature right off the bat, but …

Rob Booker: Somebody asked me one time, they said, I want to do a podcast. How do I do a podcast? And I said, You get a microphone and you start talking into the … well, get in touch with Jason and have him produce your show, ask him to produce your show … but get a microphone and start speaking into the microphone and start uploading the content. They said, Well, how do I have a popular podcast? I was like, Oh, do that a thousand times.

Jason Pyles: Yeah, Rob. Brilliance. That’s exactly right.

Rob Booker: At this point in time, you and I know what works and we know what doesn’t, right?

Jason Pyles: Mm-hmm (affirmative).

Rob Booker: And we’ve tried hard on some episodes and come up short, and naturally released episodes that were the best ever, to our listeners anyway. And how are you going to know the difference between those? How would we at this point know how to redirect an episode that might not be … whatever. You only know it through experience and through doing it wrong and through making the mistakes. And we’re still learning. We’re still learning how to do a full transcript of each episode and promote the … You have to just fall for the idea, fall in love with the idea that you don’t know anything, and that to the extent that you can, you’re going to figure out what generally works, a principle. And you’re going to do the best you can of implementing those principles in your trading. But you’re never going to fall for the idea that you know exactly what’s going to happen next.

Jason Pyles: It’s a marathon, not a sprint, right?

Rob Booker: Right. And there’s just an obsession with … it’s perpetrated out there by podcasts like this one, that there’s a chance that you could make a lot of money within a really short period of time. But really, there’s a chance that you can make a lot of money over a long period of time …

Jason Pyles: [inaudible 00:13:04].

Rob Booker: … if you’re stupendously lucky. All successful people operate by principles that help them be successful. Without principles, you’d be forced to react to circumstances that come at you without considering what you value most and how to make choices to get what you want. This would prevent you from making the most of your life. He also goes on to say, Three questions matter most: what do you want, what is true, and what are you going to do about it? What I love about these three questions at the very beginning of the book is that a lot of us think we know what we want. At the same time, a lot of us haven’t spent a lot of time thinking about that and thinking about the consequences of wanting something most. And that’s the first question: what do you want most? And then second, say what is true.

So let’s say I said, What I want most is a million downloads of the Trader’s Podcast within the next 12 months starting now. And then I would ask, But what is true? Will people listen to podcasts that are uploaded consistently, and people are responding to Facebook advertisements, and unless I get a lot of people to share the episodes with other people, I’m not going to get that many downloads. People are going to have to introduce the podcast to their friends. So I would have to build a plan that took advantage of that. We’d have to upload consistently, we’d have to be dependable, and then we’d have to build a program where more people that don’t know about the podcast find out about it, and then people who already know about it are incentivized to share it.

Those things are true. That’s true. At this point, we know that those things work. We know that. And we’d probably have to be … we’d have to do a bunch of things. I’d have to be interviewed by other podcasters that have a good audience and whatever else you’d have to do.

Then the third question comes into play. What am I going to do about it, meaning would I be willing to get up early, would I be willing to stay up late, would I be willing to miss stuff with my kids? What am I willing to do about it? How bad do I really … I said I wanted it. That third question asks how badly do you really want it. Our friend of the show, Scott Welsh, he’s a very successful robotic trader, and he got that way from saying what does he want. He wants to automate all of his trading. Well, what’s true? It’s true that you’re not going to find an automated system that works unless you do hundreds of hours of backtesting, even thousands of hours of backtesting.

The final question is what is he going to do about it. Then he did something about it, and that’s why he’s in the upper echelons of people who run robotic systems.

Jason Pyles: Mm-hmm (affirmative). Yes. That sounded just like him when you were asking those questions. I’m like, Yep, that’s Scott’s philosophy.

Rob Booker: This is probably my favorite quote from the book, and we can end with this one, and I recommend the book to everybody. It’s Principles: Life and Work by Ray Dalio, the founder of Bridgewater Associates. Time is like a river that will take you forward into encounters with reality, that will require you to make decisions. You can’t stop the movement down the river, and you can’t avoid the encounters. You can only approach these encounters in the very best way possible. Anyway, definitely worth reading. It’s a hard read for people that don’t like the financial world. If you’re the spouse of one of our dear listeners of the podcast, this is not the book to … Well, I don’t know, maybe it is. The stories are great. I mean it’s just fantastic.

Jason Pyles: Well, it’s a thinker book, you know? It’s not just something you breeze through. You probably have to figure out how to apply it to yourself and how to internalize the principles.

Rob Booker: Yeah, absolutely. Absolutely. If there are any books that you love as a listener, let us know in the comment section. Leave a comment on the episode 560 of traderspodcast.com. Jason, I would love to know more about movies. Where can I get …

Jason Pyles: That’s nice. Well, how about moviepodcast.network? We have a whole network now of movie podcasts. We have shows about sci-fi, if that’s your thing, even westerns. There’s a show about westerns. I mean, who talks about westerns anymore? That’s pretty cool.

Rob Booker: That’s pretty cool.

Jason Pyles: Streaming movie content, we got that covered. We got horror movies covered. Geek stuff, like if you’re into the geeky world, we’ve got that. There’s even a retro show that covers movies that are 20 years or older. It’s very nostalgic that way. And then of course new movies in theaters. At Movie Podcast.

Rob Booker: Have you seen A Ghost Story starring Casey Affleck?

Jason Pyles: Yes, it’s one of my favorite films of the year.

Rob Booker: I’m really looking forward to seeing this.

Jason Pyles: It’s profound, Rob. It might not necessarily be for everybody, but if you watch that film … like we talked about with this book here … with an open mind and thinking okay, how does this apply to me, it’s very … You will reflect a lot on your own life.

Rob Booker: Is it frightening?

Jason Pyles: No. No, it’s not actually. It kind of looks like it might be a horror movie, but it’s not at all.

Rob Booker: I’m very much looking forward to watching this.

Jason Pyles: It may … It’s definitely going to be in my top 10 list at the end of the year.

Rob Booker: Oh, that’s exciting. Oh, I can’t wait. Did you do a review of this on Movie Podcast Weekly?

Jason Pyles: Sure did, absolutely.

Rob Booker: All right. Go to moviepodcastweekly.com and search for A Ghost Story if you want to read that, or listen to that review.

Jason Pyles: Yep. Episode 251.

Rob Booker: And thank you everyone for listening. We love you so much. Don’t forget to subscribe to the episode on SoundCloud. You could follow it on SoundCloud, you could subscribe on iTunes, that’s always a big help. You can leave a comment or a review. The comments, we’d love for you to leave a comment at the traderspodcast.com website. That’s a great place to leave a comment. We’ll see you next time for 561.

Good morning and welcome Traders Podcast listeners. Imagine if there were a website where you could watch others trade in real time… Not like a webinar, but more like a live reality TV show. Well, in Episode 559 of The Traders Podcast, that’s exactly what Rob Booker and the producer Jason Pyles talk about, among other things. We’re happy you’re joining us!

Thanks for listening to The Traders Podcast. We release new episodes every Tuesday and Thursday. Subscribe free in iTunes and join us!

Links for this episode:

Subscribe to Rob’s YouTube channel here: https://youtube.com/robbooker

Rob on Twitter: @RobBooker

The Traders Podcast on Twitter: @TradersPodcast

TFL365.com

Trader Interviews.com

Be sure to catch up with Scott Welsh at his Website
and at Twitter

Hear Jason’s movie podcasts:
Movie Podcast Weekly where we review new movies in theaters.

Horror Movie Podcast where we’re Dead Serious About Horror Movies.

Movie Podcast Network a group of eight film-related audio podcasts that cover various movie genres.

Full Episode Transcript:

Rob Booker: When is your meetup?

Jason Pyles: It’s October 14.

Rob Booker: I really gotta plan ahead on this. I think I already bought my ticket for it and I haven’t even-

Jason Pyles: Yeah, that’s awesome.

Rob Booker: Where is it gonna be?

Jason Pyles: Yeah, it’s gonna be fun. It’s gonna be in Salt Lake City.

Rob Booker: I gotta come to this.

Jason Pyles: And I’ll tell ya, I mean yeah, if you’re gonna be in town, that Friday the 13th, we’re gonna hit a couple movies that day. And then the next day, Saturday, we’re doing the screening. That’s the actual formal event. And then we have a director coming in, we’re gonna do a Q&A. It’ll be really fun.

Rob Booker: Why do I get the feeling that you’re gonna go see a scary movie on that Friday?

Jason Pyles: I think, let’s see, one of them is Jackie Chan action movie, it’s The Foreigner.

Rob Booker: Okay.

Jason Pyles: And then the other one is called Marshall. Yeah, I don’t think there are any horror movies out that Friday, unless I’m wrong. I mean it is October, so they’ll probably be something by then but-

Rob Booker: All right.

Jason Pyles: But there will be a couple non-horror that you could hit with us if you’re around.

Rob Booker: Okay. That sounds great. I really hope to make this. This is really-

Jason Pyles: It’s super fun to go with the listeners, like to a movie. It’s really neat. It’s so funny.

Rob Booker: There’s nothing even similar to this in the world of trading. Nothing.

Jason Pyles: Really? Okay.

Rob Booker: You can’t go to a trading together, you know what I mean?

Jason Pyles: Okay, yeah.

Rob Booker: Are we recording by the way?

Jason Pyles: Yeah, it’s recording.

Rob Booker: Okay. This is the best part about working with you. It’s the greatest part ever, it’s the best thing ever.

Jason Pyles: Oh, thanks.

Rob Booker: So what is the equivalent in the world of trading to, and could something be structured to produce that same, cause going to a movie together, right, you go to see it and then you get to talk about it with people who love to talk about it, right?

Jason Pyles: Absolutely.

Rob Booker: Does anybody talk during the movie?

Jason Pyles: Oh, no. They know all my rules about going to movies cause we talk about it all the time. And so they even giggle about that, all that stuff.

Rob Booker: Can I hear these rules? I need to know these rules.

Jason Pyles: Well, I mean it’s just like for example, I prefer to sit in the top back row, center, in the middle.

Rob Booker: Okay.

Jason Pyles: And not everybody does that, so these other movie buffs who came to our last meetup, they were texting me and making fun of, like, the top back row sucks. And one guy was sitting beside me and he’s like, I’m nervous about even moving in my chair cause I know how particular you are. I’m like, Oh come on. I’m not. You know, they think I’m this Nazi about it, but I’m like that’s right. It’s just funny.

Rob Booker: Oh my gosh, that’s pretty great.

Jason Pyles: Yeah, they know me a little too well and it’s kind of embarrassing.

Rob Booker: Oh my gosh. Okay, so that’s one of your rules. Any other rules that we need to hear if we go to the movies with you?

Jason Pyles: Well, if we’re gonna be at like a ridiculous, okay, so one of my pet peeves since I sit in the top back row middle, is when people come in a little bit late and that’s fine, but their seat, cause in Utah, you pick your assigned seat. You actually know where you’re sitting ahead of time and when they come in the theater and they are actually sitting on the left of me, but they decide to enter from the right, so they walk in front of everybody in the row, rather than just coming up the other side and going directly to their seat. That kind of bugs me, but, I know. First world problems, Rob.

Rob Booker: Oh, this is good stuff. I really enjoy, that’s pretty much my favorite moment.

Jason Pyles: My neurosis, yes.

Rob Booker: All right, so back to the world of trading. We welcome everyone here to Trader’s Podcast, Episode 559. What would be the equivalent? So watching someone live trade a big trading account, that would be kind of the equivalent, and then discussing it afterwards.

Jason Pyles: Mm-hmm (affirmative)-

Rob Booker: Someone should make a, do you know these websites exist where people can watch other people play video games?

Jason Pyles: Oh yeah, yeah. There’s a lot of, I don’t know, Rob. I don’t know.

Rob Booker: Right. Okay, exactly. I mean I feel, my kids though, they watch it all the time. I mean they’re obsessed with it.

Jason Pyles: Really? Really, that’s interesting.

Rob Booker: Oh, it’s so popular.

Jason Pyles: Well, that makes sense. You know, it’s like okay, you want to learn how to do something so you’re watching someone who can do that thing, right?

Rob Booker: Yeah. I mean I could even prepare a clip for you of one guy playing, I used to watch this guy, b-double o-b dub or whatever he called himself, he was pretty funny. He used to play Sim City and it was, I can’t believe I’m gonna admit this, I would watch this guy on YouTube play Sim City.

Jason Pyles: Wow, nice.

Rob Booker: I wonder if there’s a market for this in the world of trading. I’d love to hear from everybody that’s listening to the Podcast in the show notes of Episode 559 of The Trader’s Podcast at traderspodcast.com. And we would love to hear from you. Wouldn’t that be a practical thing? Could you imagine a website built where there was just live video, streaming video, of people trading?

Jason Pyles: Neat.

Rob Booker: And commentary on it. And then those videos were then saved and archived.

Jason Pyles: Now see that makes a lot of sense to me because you’re demonstrating, I don’t know, I see a difference there. Because you’re demonstrating, okay in this scenario, I’m looking at these indicators, or I’m looking back and there would be a lot of reasons that you draw your conclusions that you could explain in that situation. And I think for me, the reason I’ve personally never gotten a lot out of the video game thing is because I can’t necessarily see what their hands are doing. It’s like okay, how are you doing that? Maybe it’s a direction. I know which direction to go but, so I think it works better for some mediums than others.

Rob Booker: Okay. All right, I like that. That makes sense to me. So what if that also, what if there was a camera on, yeah, so there’d be a specific emphasis in this website on what they were doing showing it, but then why they were doing it.

Jason Pyles: Yeah. Yes.

Rob Booker: Yeah, that’s pretty great. That’s a great idea.

Jason Pyles: Now you’re talking.

Rob Booker: And it would be different than these live trading rooms, like a webinar. That’s not the same thing. I’m talking about a website where there’s like 10 different selections and you could watch any one of 10 different traders trade stocks or penny stocks or options or currencies or whatever and it would be ongoing right now.

Jason Pyles: Neat.

Rob Booker: And it would be, it wouldn’t necessarily be interesting all the time. You might see that person sitting there drinking a cup of coffee, waiting.

Jason Pyles: So like a Truman Show of trading kind of.

Rob Booker: Yes. That’s exactly what I’m talking about. And there’d be some commentary maybe from time to time, but that would be one thing. Or you could do one where there was a row of desks and there’d be a certain stock trader, options trader, currency trader, futures trader and a moderator. And they’d be maybe competing every day and you’d go from one to the other and say, Oh, Jeff is seeing something right now, let’s take a look and see what he’s doing. And that’s different than, once again, it’s different than a webinar. The live action quality to it, that sports broadcasting. And remember, people watched people play poker on TV.

Jason Pyles: Oh yeah.

Rob Booker: That made it all the way to ESPN.

Jason Pyles: People watch people play golf, Rob, for heaven’s sake. Right?

Rob Booker: Do you know what they do in Texas instead of playing golf?

Jason Pyles: What is it?

Rob Booker: I’m not even making this up.

Jason Pyles: Okay.

Rob Booker: They go shoot shotguns.

Jason Pyles: Oh, nice. Okay.

Rob Booker: On a range. Like you get a cart and you put your gun in the cart and you put your shotgun shells in the cart and then you drive on the range, you stop, you put your little key card in the box, shoots out a clay thing and then you shoot at it.

Jason Pyles: I love Texas. That sounds exactly like a Texas thing.

Rob Booker: It is so awesome too. I took Robbie out there to do it. It’s right down the street from my office.

Jason Pyles: Cool. That sounds amazing.

Rob Booker: Yeah. And so I walked up to the guy at the desk and I said, I’m just gonna be honest with you, I haven’t shot a shotgun since I was in Boy Scouts, you know, seven years ago. Just kidding, long time ago. So I don’t know what I’m doing, but we still want to shoot guns and he’s like, Do you feel like you could safely operate a gun and click the safety button? I’m like, Yeah. And he’s like, Okay, here’s a shotgun.

Jason Pyles: Perfect.

Rob Booker: I mean like, whatever. Yeah. Anyway, and that’s what they do. They go around and they shoot at things. But back to the other point. This is a, there’s something to this idea where the live action quality to it, where there’s commentary, discussion and there’s interaction between a host and a, there’s something to this and maybe a, I don’t know, that would really, I think that would come off really well. And it could even be once a week to start. I should just do it.

Jason Pyles: I definitely think you should. I mean it reminds me, for some people this is a dirty word, but I think it’s cool. It reminds me of a trading reality show. A trader’s reality show.

Rob Booker: Yeah. Right. Which is what I, I’ve wanted to do that for a long time.

Jason Pyles: Yes, you have.

Rob Booker: And I just can’t seem to, you know, you gotta have, we just did a podcast about this for the Marketing Podcast Weekly, but sometimes it’s easy to get bogged down on the details and not just do it.

Jason Pyles: Right. Yeah.

Rob Booker: And not just go for it, just stop thinking about it and just do it. Like stop making it into a big production and just do it.

Jason Pyles: Yeah. I agree. I think you should, Rob. I’m always entertained by your projects.

Rob Booker: Oh my gosh, that’s pretty funny. Yeah, it’s easy to get bogged down on the details. Do you ever see that guy that, the movie, Craigslist Joe?

Jason Pyles: No I haven’t seen that actually.

Rob Booker: Oh, okay. It’s, I think he made it for Netflix. Back in the day you could actually make a movie and then upload it to Netflix, you could literally upload it to Netflix, like literally upload it to Netflix.

Jason Pyles: That’s amazing. Wow. Okay.

Rob Booker: You could just log in and you could upload it. And this guy made a video, with a reasonably okay microphone and a shotgun microphone and a shotgun light and a reasonably inexpensive camera, and he lived for a month off of Craigslist basically, I can’t remember how he did it but it’s a memorable film cause he sells everything and then he goes out on the road and he only gets by in life through Craigslist. Everything is done through Craigslist.

Jason Pyles: Right, okay.

Rob Booker: And makes a whole movie about it.

Jason Pyles: Yeah. I’ve heard of this.

Rob Booker: It’s like a one camera movie that he made by himself and it got on Netflix. And I’m sure it’s been viewed millions of times.

Jason Pyles: Yeah, for sure. That reminds me of the Super Size Me movie. The guy that lived off McDonald’s for a month, see what it did to his body.

Rob Booker: Yeah, where his liver almost failed.

Jason Pyles: Yeah, exactly.

Rob Booker: Do you know, have you heard about his new movie?

Jason Pyles: Morgan Spurlock, what’s his latest?

Rob Booker: So, it’s a sequel to Super Size Me. I’m surprised you haven’t heard of this.

Jason Pyles: What is it?

Rob Booker: This is great. Documentary film, this is from eater.com, like eater E-A-T-E-E, whatever. Documentary filmmaker, Morgan Spurlock is gearing up to debut the sequel to his wildly popular 2004 movie, Super Size Me and this time around he’s taking on the chicken industry.

Jason Pyles: Oh, okay.

Rob Booker: Supersize Me 2: Holy Chicken! will focus on Spurlock as he opens his own fast food restaurant. Presumably the fast food restaurant in this film is Holy Chicken!, the four-day fried chicken sandwich pop-up that Spurlock opened in Columbus, Ohio last year.

Jason Pyles: Interesting.

Rob Booker: Yeah. So I actually think that this may be his best movie. It just debuted at the Toronto Film Festival, which kicks off, kicked off, it already kicked off.

Jason Pyles: Mm-hmm (affirmative)-

Rob Booker: What happens at the end of something that you kicked off? You kick it on?

Jason Pyles: Yeah. That’s a good question.

Rob Booker: You kick it out?

Jason Pyles: Right. I don’t know. Interesting.

Rob Booker: That’s interesting. Completely unrelated but because I saw the name James Franco on this website, I tried to watch the first episode of The Deuce-

Jason Pyles: Oh, okay.

Rob Booker: Starring James Franco. Made, basically written and I think the first episode was directed by the creator of The Wire.

Jason Pyles: Yeah, David Simon. Yes.

Rob Booker: It was just terrible.

Jason Pyles: Was it terrible? I’ve been curious about that.

Rob Booker: Yeah.

Jason Pyles: I’m glad to hear.

Rob Booker: It’s just a giant bag of beep. Like it just, if you want like a really great lesson in the male anatomy-

Jason Pyles: Oh, yikes.

Rob Booker: And specifically like, giant males, just hairy men, like you want to see all their body parts, that’s the show for you.

Jason Pyles: Oh, wow. Okay.

Rob Booker: Yeah. Holy Moly.

Jason Pyles: Not necessarily what I was looking for, Rob.

Rob Booker: It gets in the way of the plot. Like literally, gets in the way of the plot. Like actually visually gets in the, like there’s something you’re trying to see on the screen and something else goes full view on the screen and gets in the way of the plot. Yeah.

Jason Pyles: Okay.

Rob Booker: But it’s funny because you see all these characters from The Wire appear in the show. Like all of a sudden, D’Angelo Barksdale pulls up, gets out, he’s got these really long 1970s sideburns and he gets out of a cop car and he’s a street policeman-

Jason Pyles: Oh wow.

Rob Booker: And he goes and sits down to get his shoes shined. Remember Chris and Snoop from The Wire?

Jason Pyles: Oh yeah.

Rob Booker: He sits down next to Chris, who’s a pimp.

Jason Pyles: It’s hard to see those people as different characters.

Rob Booker: Yeah, and Omar’s even in it. Indeed.

Jason Pyles: Oh, I love him.

Rob Booker: Yeah. All the little hoppers are in that, anyway. Dominic West is nowhere to be seen. But anyway, so back to the original point, I’m sure no one’s made it through this episode. I love the idea of sort of a live action, real time, live trading with commentary and hosting. You know, like a host. Someone who’s, all right, I’m seeing that you’re doing this but broadcast live. Not broadcast on a webinar, that’s not the same thing. Broadcast like its poker, like multi-camera shots.

Jason Pyles: Yes. Yes.

Rob Booker: I don’t know. If anybody, if you can even remotely imagine yourself watching that, send us a message on the blog. On the Episode 559 of The Trader’s Podcast. Go to the website, don’t forget to subscribe to the show please. Download all the episodes, just download all of them.

Jason Pyles: That’s right.

Rob Booker: Just go on a download spree.

Jason Pyles: Right.

Rob Booker: You can even put your email address in there. I love getting that email about the new episodes.

Jason Pyles: Yeah.

Rob Booker: Do you get that email too?

Jason Pyles: Yes, yes I do.

Rob Booker: Do you do that for all of your podcasts?

Jason Pyles: Yes, I do. Yeah, absolutely.

Rob Booker: I love that actually. I’m gonna go to your, tell our listeners how they can go to your podcast.

Jason Pyles: Let’s see, well we got moviepodcastweekly.com, that’s where you go for that one.

Rob Booker: Okay.

Jason Pyles: Yup. And just new movies that are in theaters. And then if you’re into horror for some reason, horrormoviepodcast.com.

Rob Booker: All right.

Jason Pyles: Yup. And you can check ’em out there. Love it.

Rob Booker: I can’t find your, the link on moviepodcastweekly for subscribing by email.

Jason Pyles: It may be down lower in the sidebar. I’m sorry, I’ll have to look at that again. We were recently talking about websites that were shotty or shottily designed. Yeah, so, that’s mine. I need to look at where that is. Maybe it got kicked to the bottom of the page.

Rob Booker: Well, on that note, sometimes when you, now we’re talking about all kinds of stuff. Sometimes when you make it more difficult to accomplish something from a marketing perspective-

Jason Pyles: Yes.

Rob Booker: Only the people who want to hear from you the most are gonna do that. Like getting through this episode was really difficult so only people who really love us and the show have listened to this entire show.

Jason Pyles: Right.

Rob Booker: And they deserve something special.

Jason Pyles: Yes.

Rob Booker: One of you that’s listening all the way to the end, I’m gonna say a word now. I’m gonna say, I can’t do a secret word cause the first person to say the secret word, okay, anyway. If you just want to claim that you listened to the entire episode, go to traderspodcast.com, click on Episode 559, leave us a comment and a question, or just a thought about today’s show. Even if you didn’t enjoy it.

Jason Pyles: Right.

Rob Booker: And leave a comment there and we’ll reward one of you with a gift card at Amazon. A $25 gift card at Amazon.com. Or if Amazon’s not legal in your country, then you get nothing. Just kidding. Leave us a comment, we’ll send you a gift card. We’ll have one winner and we’ll reach out to you. You got through this show, you deserve to be rewarded for that.

Jason Pyles: Yeah. Nice.

Rob Booker: I still can’t find your-

Jason Pyles: I’m sorry. I’ll have to see what happened to it then, Rob. I apologize.

Rob Booker: I want to subscribe by email. Now I really want to do this.

Jason Pyles: Okay. All right. I’ll figure that out and I’ll let you know, Rob. I appreciate it.

Rob Booker: That’s great. So go to moviepodcastweekly.com everybody. It is a great podcast and if you scroll down on the right side, you can support the podcast by becoming a monthly reoccurring donor and I only say that because you and I have done hundreds and hundreds, 600, 700 episodes of podcasts together.

Jason Pyles: Right.

Rob Booker: And this is some of your best work and it really deserves to be, I don’t know, subscribed to.

Jason Pyles: Well, thank you. I appreciate it.

Rob Booker: And for those of you that want real stuff about trading, don’t forget to listen to episode 560 of the Trader’s Podcast, available in just a couple of days. I’m Rob Booker, that’s Jason Pyles, the producer, and you’re listening to the Trader’s Podcast.

Welcome back! In Episode 558 of The Traders Podcast, your hosts Rob Booker and the producer Jason Pyles welcome back Scott Welsh once again to discuss the strangest things that ever happened to them in the world of trading. Rob tells a ghostly tale of a trading account he once managed that mysteriously opened trades on its own! And Scott tells a tale of his early days of robot trading when a storm thwarted his success.

Thanks for listening to The Traders Podcast. We release new episodes every Tuesday and Thursday. Subscribe free in iTunes and join us!

Links for this episode:

Subscribe to Rob’s YouTube channel here: https://youtube.com/robbooker

Rob on Twitter: @RobBooker

The Traders Podcast on Twitter: @TradersPodcast

TFL365.com

Trader Interviews.com

Be sure to catch up with Scott Welsh at his Website
and at Twitter

Hear Jason’s movie podcasts:
Movie Podcast Weekly where we review new movies in theaters.

Horror Movie Podcast where we’re Dead Serious About Horror Movies.

Movie Podcast Network a group of eight film-related audio podcasts that cover various movie genres.

Rise and shine! Welcome to Episode 557 of The Traders Podcast! In this show, your usual hosts Rob Booker and the producer Jason Pyles welcome back special guest and fan-favorite Scott Welsh! As a world famous robot trader, Scott gives us an update on his successful journey in automated trading. And we also get a question from Tyler who asks for a recommendation on which trading platform he should use.

As always, thank you for listening to The Traders Podcast. We release new episodes every Tuesday and Thursday. Subscribe free in iTunes and join us!

Links for this episode:

Subscribe to Rob’s YouTube channel here: https://youtube.com/robbooker

Rob on Twitter: @RobBooker

The Traders Podcast on Twitter: @TradersPodcast

TFL365.com

Trader Interviews.com

Be sure to catch up with Scott Welsh at his Website
and at Twitter

Hear Jason’s movie podcasts:
Movie Podcast Weekly where we review new movies in theaters.

Horror Movie Podcast where we’re Dead Serious About Horror Movies.

Movie Podcast Network a group of eight film-related audio podcasts that cover various movie genres.

Full transcript for this episode:

Rob Booker: Mr. Pyles.

Jason Pyles: Hey, Rob Booker, how are you?

Rob Booker: Doing great.

Jason Pyles: Hello, Scott.

Scott Welsh: What is up, Jason? Good to hear from you. Is Rob there, too? I guess it’s good to hear from him, too.

Jason Pyles: Yes.

Scott Welsh: So great.

Jason Pyles: It’s been too long.

Scott Welsh: Too long, but I’m glad we’re here today.

Jason Pyles: I know, it’s great.

Rob Booker: There are some listeners who don’t know that we did, far too few, but about 150 episodes of a podcast together called The Rise and Shine Podcast, and I think we would all agree that everyone should stop listening to this right now and go check that out.

Jason Pyles: Yeah.

Scott Welsh: Just stop. We can wait. How long, 153 episodes? We can wait a half hour. We’ll just sit here.

Jason Pyles: Yeah, they were short form.

Rob Booker: They could play them on fast forward.

Jason Pyles: That’s true.

Scott Welsh: Exactly, yeah.

Rob Booker: That’s spectacular. Our guest today is Scott Welsh, and Scott, what’s your website? Let’s just get that out there right now.

Scott Welsh: It’s ScottWelsh.me. It’s S-C-O-T-T W-E-L-S-H.me, at me.

Rob Booker: Alright, everybody, go check it out. Scott’s a good friend a longtime friend of the show. Not a first-time caller, not a first-time listener. We’re glad to have him here. Jason, we got a question from a listener, did we not?

Jason Pyles: Mm-hmm (affirmative), yeah, we sure did. We got a question from Tyler. I can read it right now. It says, Hi, Rob, my name is Tyler and I recently discovered your podcast on iTunes and have been devouring episodes on my drive to work. I have a question for you about trading platforms. I’m new to this and I’m wondering if you have a recommendation for a platform. I’ve done some research and there are many to choose from. Some cost money, some allow trades in certain markets only, etc.. Do you spend any time in any episodes discussing this? Appreciate your thoughts. Tyler.

Rob Booker: Well, Tyler, we do. We talked about this in episode 557, which is the one you’re listening to right now. Scott, do you have any- You and I have used about every platform there is. Do you have any comments on that?

Scott Welsh: Yeah, I probably used less than you, but yeah. I looked around at a few platforms. I started on TD Ameritrade back in the stock days, and that feels like caveman days even though it’s a fine company or whatever. But as far as technical trading, wouldn’t you agree, if you ever looked at it it’s pretty poor? But as far as technical trading, I love TradeStation. That’s what I grew up on. That’s the first really complicated platform I looked at. I still use it, I still like it. MT4 has been fine for me. It’s super stable, so it’s been fine. But if I’m gonna open up a platform, I’d probably pick TradeStation or its cousin, MultiCharts.

Rob Booker: Got it. Oh, I haven’t used MultiCharts. Is that a Windows-only platform?

Scott Welsh: Yeah, I think it is, actually. Yeah. I’m doing it on Windows so I don’t know, but yeah. It’s basically like TradeStation. It’s similar.

Rob Booker: Okay. Yeah, and it uses all the same language that TradeStation uses, right?

Scott Welsh: Right, exactly. Yeah.

Rob Booker: Can you trade 4X on MultiCharts?

Scott Welsh: Yes, correct.

Rob Booker: Oh. You can use all the robots that you built for TradeStation and you could run them on MultiCharts.

Scott Welsh: Right. I bought it probably over a year ago. It’s very expensive, which is why a lot of people, I think, don’t use it. It’s quite expensive. I’m getting very much into MultiCharts. I’m thinking about running MultiCharts on my VPS instead MT4. That’s the conversation I’ve been having lately with myself.

Rob Booker: Oh, wow. How expensive is it?

Scott Welsh: A lifetime membership, I think, was $1,300, $1,200.

Rob Booker: Oh, yeah, that’s … Yeah, alright.

Scott Welsh: That’s a lot for people to spend, but yeah, I did it.

Rob Booker: Yeah, I hear really good things about the platform, I just don’t have a Windows computer anymore. It makes it difficult to use stuff that needs a Windows computer. Now, why not just use something- Of course, we don’t necessarily want to recommend to Tyler that he jumps onto TradeStation or MultiCharts. What kind of free options would you recommend to Tyler?

Scott Welsh: Free options, then yeah, I’d probably go into MT4. You can do a lot of good things with MT4. I’m just dubious about the testing. For me, I do tons of research. It’s what I love to do. It’s what I’ve done a lot of. For me, the way I’ve done testing in TradeStation, whatever I’ve done, all the work I’ve done, when I take it to live markets I get very similar results. In fact, most of the time my live results are slightly better than my tested results because people get really freaked out by that. Oh, I’ve done some fact testing, it’s curve-fitting, it’s over-optimizing, it’s not gonna work in real life.

Well, that hasn’t been my experience. My experience is if something doesn’t work, it was bad design. It wasn’t because testing was fake and trading is real. I have not yet had that experience with MT4 where it shows up in the live market exactly as strategy tester does. It’s close, but TradeStation is superior. I’m gonna work on MT4 more, actually, in the next actually month or so. I will finally answer that question. I’m gonna buy some expensive data and I’m gonna see if it really can match up.

MT4 might be fine. I would say it’s mostly fine right now, I just don’t like it as well as the MultiCharts, TradeStation option.

Rob Booker: You’re saying that, in your experience, when you’ve done backtesting in MT4, MetaTrader 4, and then turned on a robot onto the live market, that the results have not matched up with your testing?

Scott Welsh: Slightly worse, yes. Almost without exception, when I take TradeStation to the market, the real life is better. But I have yet to do extensive testing on MT4 and have it show up and look exactly the same. It’s a little bit worse so far. I’m gonna be doing more work on this.

Rob Booker: What robots are you running right now?

Scott Welsh: I run a robot that I called The Hornet, which is a day trading robot. I run that. I’m very focused with my trading, so I only have two currency pairs that I trade with that. I’m also running The Heron, which I just [inaudible 00:06:03] robot I released late May. I run a fair value robot, too, also. I’ve got some other things I’m gonna be running, but that’s what I’m running sitting here right now.

Rob Booker: What about your trend trade robot that you had on the dollar/yen?

Scott Welsh: I trade that in demo. I’m gonna open up an account and I am gonna be trading that, but I watch that every day. But I don’t have real money committed to that at this moment.

Rob Booker: I’m obsessed lately with trend trading and trend trade robots. If you don’t mind, I’m gonna ask you a few questions about that.

Scott Welsh: Let’s go, yeah.

Rob Booker: Okay. First of all, does that trend trade robot use any stop losses?

Scott Welsh: Yes. Absolutely it does. Yeah, it is, that robot is the epitome of all the cliches we’ve heard. Stop out quick and take big winners, that’s exactly how it’s designed. It’s got our-

Rob Booker: Cut your losses short and ride your wins.

Scott Welsh: Ride your winners, yeah. That one does exactly that. It takes … Well, who cares how it stops? It’s a short stop-out based on the volatility of the market at that time.

Rob Booker: How many trades a year does that take?

Scott Welsh: Well, I love trend-following, trend trading robots on big charts. I started testing them on 240-minute charts and those are fine. I love daily charts the best. I just love … They’re so much cleaner. The results are actually better. But it doesn’t trade that much and people that I’ve talked to, and I’m sure it’s even more so for you, they want trades, trades, trades every day. How often does it trade? That’s a question that people ask me when they’re talking about robots, which blows my mind.

Shouldn’t it be, How good is it? Right? What are the- They don’t. How often does it trade? If you’re trading it on daily chart and you’re waiting for it to break to an all new level that it hasn’t been to in a long time, it could trade four times a year. That sometimes freaks people out.

Rob Booker: How long are those trades open, though.

Scott Welsh: Well, if it stops out, not very long. It could be a day. It could be a day or two ’cause those stops aren’t big. But the winners can be in for a month or two. But I’ve found that is not a problem. When you’re in profit, that’s a glorious month or two to spend. That’s not a problem to be in profit. The long trades, something good is happening. That’s good news. [inaudible 00:08:17]

Rob Booker: Yeah, that’s really good news. What is that robot called?

Scott Welsh: I just call it The Breakout.

Rob Booker: The Breakout.

Scott Welsh: Yeah, it’s based on the Turtles. It’s based on the famous Turtle methodology, but it’s not exactly the same as Turtles. I get questions about that. Just use it as inspiration. I didn’t actually follow the rules to the T. I made my own rules on it.

Rob Booker: Okay. It’s not-

Scott Welsh: But, yeah, The Breakout.

Rob Booker: It’s not the same as the Turtles, Jason, there’s a bunch of turtles that live in South Florida and they do some trading and it’s not the same.

Scott Welsh: Or the rock band from the ’60s.

Jason Pyles: Not Leonardo, Michelangelo, gotcha.

Scott Welsh: Oh, yeah, or those, too.

Jason Pyles: Gotcha.

Rob Booker: Did you see this comparison between Pennywise and one of the ninja turtles? They live in the sewer, they hang out with children, something crazy.

Jason Pyles: No, but that’s hilarious. I love that.

Rob Booker: But maybe Pennywise is secretly one of the lost teenage mutant ninja turtles.

Jason Pyles: Mm-hmm (affirmative), I think so, yeah. There is a turtle thing from the novel, as well. That’s interesting.

Rob Booker: Oh, interesting. There’s a connection. Scott, there’s also this thought in the back of my mind. Anytime anybody brings up trading, these Turtles, this question does come up. The ’80s or whenever it was, Richard Dennis and his partner had an argument whether or not trader were born or taught. Dennis said, I can pick some people off the street, teach them to trade, tell them to implement a system, and they’ll be successful. He was somewhat proven correct by teaching them a system to follow and asking them to follow it to the letter. The ones that did succeeded, and the ones that did not dropped out. The rest of it is, as they say, history.

Every time we talk about trend trading, I’m sure you’ve been asked this before. Did you ever built a robot that was based on the Turtle trade trend-following system?

Scott Welsh: Yeah, and that’s what this is. That’s exactly it. That was the inspiration for the Breakout robot, absolutely 100%. It’s just not exactly the same.

Rob Booker: Okay.

Scott Welsh: That’s exactly- I got fascinated by that story for the hundredth time and I decided, Well, I’m just gonna build something. I’m gonna get it in the market. There are still Turtles trading and trading very well and trading hundreds of millions of dollars. The Turtles still live from the original Turtle class.

Rob Booker: They live for hundreds of years, as far as I’ve heard.

Scott Welsh: Yes, they’re dinosaurs. Yes.

Jason Pyles: There’s no shortage, is there?

Rob Booker: There’s no shortage of turtle jokes in this episode. How do you answer the question, How many robots is too many? How do you choose a portfolio of robots to run? Did you upload all the results into a portfolio to see that they balanced each other out, or something like that?

Scott Welsh: Well, it comes down to personal preference. It’s like, How many girlfriends do you want to have or How many boyfriends do you want to have? When you’re younger, you like dating around. I like talking to this person, this person. Then sometimes you get to a different part of your life and maybe you just want one person. The first is preference. What do you like? We’ve talked about it in podcasts before. Do you like a lot of action?

Well, if that’s what you need for your trading then you’re gonna have a big portfolio. You’re gonna need a bunch of stuff. Something like the Turtle robot we’re talking about right now, if it trades four times a year, that’s gonna just mess you up. You’re gonna start taking trades that you’re not supposed to take and it’s gonna be awful. The first thing is, What do you like when people say, Well, what kind of portfolio?

For me, the second question is all draw-down. How much draw-down? If you could have a draw-down that you like and it’s just one robot trading one system on one currency pair, and the draw-down is manageable, and it makes the amount of money you want, why do you need 10? For me, I love focus. I love deep focus on one thing at a time. I fight as hard as I can. What’s the least amount of robots I can trade and get the results that I want?

Rob Booker: Okay.

Scott Welsh: When you’re talking about fund managers, though, we’re talking about 50, 60, 100. To manage hundreds of millions of dollars, you have to be diversified. As you get more money in your account, diversification probably becomes more and more of an issue.

Rob Booker: Okay, well that makes sense to me. There’s the famous, who is it, Renaissance Capital and [build simons 00:12:34] or whoever it is in Long Island or whatever and he built this firm of- Jason, it’s all turtles. The whole firm is turtles. The guy’s stiff, but once you break through his shell he’s pretty nice. They have a wide selection of grubs in the company cafeteria.

Anyway, he hired a bunch of Russian physicists and scientists and whatever and they were managing billions and billions of dollars. Eventually, they all were so rich- This is actually true. It sounds like this is a story. They were all so rich that they gave back all the investor money and now this super secretive firm only manages its own money internally from all the people inside of the firm so they don’t have to deal with any of the regulations or answering to people or whatever.

They have been known to … They have hundreds of strategies running, all of them automated, all of them with the computer that’s just making the trades and placing the orders, some of which are doing things as crazy as trading based on the cycles of the moon. He has been known to quote that it even gets stranger than that. If it works, he doesn’t care how stupid it sounds.

Scott Welsh: There was that one time, though, he got flipped over on his back and they had to cease trading, then they flipped him back over and it was fine.

Rob Booker: You couldn’t get back up. That’s right, yeah.

Scott Welsh: Other than that, yeah, it’s been amazing.

Rob Booker: Flipped on his back and he couldn’t get back up. Oh, my gosh. Jason, let’s plug your podcasts. Where can our listeners hear more about the best movies that are out right now?

Jason Pyles: Sure. MoviePodcastWeekly.com and HorrorMoviePodcast.com.

Rob Booker: I’ll plug Marketing Podcast Weekly for our listeners that are interested in online marketing, in particular in the financial space. You can listen to Jason and I sit around and talk about marketing, which I actually listened to Wednesday’s episode in its entirety again. I just listened to it again.

Scott Welsh: That’s a good podcast, by the way, guys. I really like that. I know it’s new, but I look forward to that a lot. I like that.

Rob Booker: Well, thank you.

Jason Pyles: Thank you.

Rob Booker: Scott, two things. One, where can our listeners find your podcast?

Jason Pyles: Yes. That’s what we want to know.

Scott Welsh: Yeah, okay. Well, Rob, knows that I’m thinking I would really like to do a podcast and I’m really thinking about that, so thank you, Rob, for bringing that up. That’s a little sore spot. No, it’s not a sore spot.

Rob Booker: We’ll be on the lookout for that. Maybe we can plug it inside of some kind of a trader’s podcast network of shows.

Jason Pyles: Yes.

Rob Booker: Second of all, where can people find out more about this Breakout trend trading robot? I know that’s what everyone who’s listening right now’s gonna want to know about.

Scott Welsh: Well, you go to that website and I’ve got listings of the robots that I offer. You can also email me, I’m the one who emails you back, which is Scot.Welsh@gmail.com, but it only has one T. My email has one T and my website has two.

Rob Booker: Okay, and you can also go to the show notes for episode 557 of The Trader’s Podcast and inside those show notes, we’ll link to Scott’s website and some information about the Breakout robot. Will you come right back and join us for another episode?

Scott Welsh: I would love that.

Rob Booker: Let’s do it. Thanks for listening, everybody, we love you all. We’ll see you next time.

In Episode 556 of The Traders Podcast, your hosts Rob Booker and the producer Jason Pyles discuss how success often comes from setting a goal to do the right things consistently (as opposed to just setting a goal to accomplish some great thing).

Rob also talks about having a specific trick or “scheme” that is your job that you do consistently. And we discuss the approach of sticking to what you’re best at and exploring it further by looking deeper inside rather than branching out and experimenting with new and unfamiliar methods.

Thanks for listening to The Traders Podcast. We release new episodes every Tuesday and Thursday. Subscribe free in iTunes and join us!

Links for this episode:

Subscribe to Rob’s YouTube channel here: https://youtube.com/robbooker

Rob on Twitter: @RobBooker

The Traders Podcast on Twitter: @TradersPodcast

TFL365.com

Trader Interviews.com

Jason’s movie podcasts:
Movie Podcast Weekly where we review new movies in theaters.

Horror Movie Podcast where we’re Dead Serious About Horror Movies.

Movie Podcast Network a group of eight film-related audio podcasts that cover various movie genres.

Full transcript of this episode:

Rob Booker: Welcome back, Mr. Pyles.

Jason Pyles: Thanks, Rob. It’s good to be back.

Rob Booker: When we left our dear listeners, we were talking about the fact that sometimes success comes from setting a goal to do the right things consistently instead of setting a goal to accomplish some big thing. Success in my life has been a mix of those two things and then just pure luck at times. I want to talk today about if someone were to choose the path of success by doing the right things … We’re, of course, specifically talking about trading in the end. But generally speaking, let’s just talk about success in general. If it’s about podcasting because you started podcasting before anybody else that I know … Well, we kind of started together before anybody else that I know.

Jason Pyles: Yes, we did.

Rob Booker: We’ve continued through the years. You only continue if you’re getting some measure of success. What are some of the things that a podcaster does that they have to do consistently well or at least they have to do it consistently in order to succeed?

Jason Pyles: I would say release episodes. You have to actually record the episodes and continue to release them. That’s one thing. I think for me it’s been … You have to have this interest in the topic itself. I genuinely love the topic. If you love it enough, usually you can continue talking about it. There have been podcasts, Rob, that I dropped pretty quickly that I realized I did not have a love like that one really stupid NBC survival show. What was that called? That was awful. Revolution or something like that.

Rob Booker: Yeah, right.

Jason Pyles: We went 10 episodes on that. We’re like, Yeah, that’s enough of this.

Rob Booker: Oh, gosh. All right. You have to release content on schedule. You have to have a purpose, meaning I think probably podcasting about everything is not as effective as podcasting about something.

Jason Pyles: Agreed.

Rob Booker: All right. Let’s apply that to traders. It can almost be as simple as that. Maybe it can be as simple as that. You need to sit down at the computer at the same time everyday or you need to run a robot that’s going to run all the time. Then you need to have a specific purpose, or a specific technique, or a specific trick, or a specific method. I like to call it a scheme these days. Whatever the trick is that you do, you’ve got to have that one thing. That’s it. That’s your job. You’ve got to sit down and do that job in the same way that you have to release content as a podcaster. You have to sit down at the computer and you have to get that work done.

Every month on the first Monday of the month at 11:30 p.m. my time, I sit down in a webinar with all of the members and I trade the Australian dollar when the Australian interest rate decision is released. It is potentially … I don’t know potentially. I mean it is. It is the best trading that I do all month long that I do. But it only happens once a month, Jason.

Jason Pyles: Interesting.

Rob Booker: I would guess that everybody listening, everyone that is a listener of the podcast, all seven of you, all of you, each of you has some kind of scheme or trick that you can do like that. However, that one scheme or trick doesn’t produce necessarily enough profit in order to accomplish your goal of trading for a living and so you seek other tricks, schemes, methods or strategies when in reality you’re already off course if you do that. It’s like saying to a podcaster, Well, I don’t have enough listeners from doing a podcast about scary movies, so now on the scary movie podcast we are also going to review children’s television shows with songs.

Jason Pyles: Yes. And that’s actually a real example. I’ve seen a horror podcast do that where they started reviewing Twilight stuff in order to attract the Twilight fans which to the horror community is a huge betrayal.

Rob Booker: Exactly what I was talking about. You got to stand for something. I’ve noticed, including this text message that I got the other day from our friend that was struggling and on the verge of quitting, this is exactly what I see happen is that I already know how to make this work but it’s not making me enough money so I’m going to add something to it. Instead of focusing on what is working and approaching that, someone will go off course and I mean when you find something that works like this Australian dollar strategy that I have and it’s … I’ve even described it on previous episodes of the podcast. You can go to robbooker.com and get on the email list if you want to learn more about all of this stuff.

Jason, being successful means diving deeper into that. It means, all right, I’ve got one strategy for when the economic news is released and how I deal with it. What about a strategy diving in deeper to the behavior of the Australian dollar on the day that that news is released? That led to an additional strategy for the Australian dollar. Now, I had two strategies because I dove in deeper into what I was already doing. What if I doubled, or tripled, or quadrupled down on that, and I added a trade to one of the trades that I was already taking? What if I quintupled down on that strategy by … I know this sounds absolutely bananas. What if I just dove deeper into reading about the economics of Australia? What if I did those things? Instead of looking for the answers outside, I went inside. Instead of going horizontal or laterally looking for additional stuff to focus on to be a jack of all trades, what if I went deeper into what was already working and I tried to benefit more from that? Ideally, I would just be happy with what was working.

Jason Pyles: Right. That reminds me of two things. It’s killing the goose that lays the golden eggs because then you see … You’re not getting any more golden eggs. You have a dead goose. It also reminds me if you have like an Olympic diver who’s practiced the same dive like a billion times and then the diver gets up and said, You know what? I’m going to try to change this up a little right here. Then they jump off and do something weird. Just saying. That’s what popped into my head as you describe this.

Rob Booker: Right. My niece is a diver. I’m sure she’s got three or four dives. I’ve seen her compete. She has three or four dives, Rachel does, in her repertoire. She’s probably got her one … I don’t know this for sure. I’m going to send her this episode and ask her if she’ll answer. She probably got one go-to dive that she knows she’s really, really good at and that’s her go-to dive, and she knows she can’t lose that one. Why would she still practice that one even after she’s won competitions based on that? She’s not done with it. I see this happen with traders all the time. Well, that works, Rob. But what else do you got for me? I ain’t got nothing else for you.

Jason Pyles: Well, they want something that works more, that produces even more results. That’s what they’re looking for.

Rob Booker: Yeah, yeah. That’s true. Here’s a great example. It’s not a great example. It’s a terrible example but I have to say it. As I’m re-watching The Wire … My wife has never seen The Wire on HBO. It’s every White person’s favorite show about Black people.

Jason Pyles: Yes, I know. It’s awesome.

Rob Booker: I don’t know if that’s true or not. I just thought I’d say that. But, even President Obama said it was the best television ever made. Anyway, let’s get back to the point. In that show, Bubbles, he lives on the street and Bubbles tries to get on his feet and get off of drugs and he starts Bubbles Depo. Do you remember this? He has a shopping cart.

Jason Pyles: Yeah, totally.

Rob Booker: On the front of it, it says Bubbles and then Depo with no T at the end. It’s just Depo. He starts by selling T-shirts, just T-shirts. And, then he realizes that these people that live on the street, they don’t want to go to the store, whatever. They’re out selling drugs on the corner, whatever, and he needs to have candy, or bus passes, or other stuff for them. He went deeper into his one concept. He didn’t then start, I don’t know, a hotdog cart or he calls them pimp steaks. He didn’t start a pimp steak cart. He went deeper into what he was already doing. Maybe that’s a challenge that we could ask our listeners is what can you do to go deeper into what you already are doing instead of seeking additional answers or profit outside of what you’re already good at? It’s possible of course that someone doesn’t know what they’re already good at. That’s possible.

You could listen to 500 episodes of The Trader’s Podcast and inside of those episodes, there would be at least, I don’t know, at least 10 different ways that you could focus. I heard from someone, Jason, just yesterday or the day before who just finished listening to all of the episodes of The Trader’s Podcast. I said, Oh, there’s a treat in store for you.

Jason Pyles: Wow, that’s amazing. I want to thank that person for listening.

Rob Booker: There’s a lot of people out there now that have just listened to every single episode. I think we can turn on the feature so that all of the previous episodes will appear inside of iTunes. We can turn that feature on so that if you want to get the old episodes on iTunes, you could do that. But, Jason, I don’t know if you knew this, of course you did, every single episode of The Trader’s Podcast is available in one location.

Jason Pyles: It sure is. That’s right, Rob. Traderspodcast.com, right?

Rob Booker: That’s exactly right. How can someone contact the show?

Jason Pyles: Well, Rob here, my friend Rob is kind enough to give out his own personal cellphone number and, yes, it is his actual cellphone. You can text him at 304-281-8332 or just-

Rob Booker: And, we appreciate you subscribing and downloading these episodes. We’re now at 1,773,360 downloads and we’d like you to be download number 361.

Jason Pyles: That’s right.

Rob Booker: Oh, my gosh. All right. Jason, let’s plug some movie podcasts here. Let’s make this happen.

Jason Pyles: That’s right. In the time that I’ve been away, I’ve actually started a Movie Podcast Network, if you can believe that.

Rob Booker: Can you believe it?

Jason Pyles: Yeah. I think it’s a eight different shows about movies. We have some about Westerns, sci-fi, stuff like that. Check us out. Our little hub site is MoviePodcast.Network.

Rob Booker: Nice. All right, everybody. Until next time. I’m Rob Booker and that’s the producer. Thanks for listening and subscribing to The Traders Podcast.

Welcome back to The Traders Podcast, and welcome back to your host, Rob Booker, and The Producer, Jason Pyles! After a very long hiatus, we are back again here in Episode 555, where we address a trader regarding what to do when trading doesn’t work out the way you might have hoped.

Remember to leave a comment below in the show notes and you could win a $25 Amazon gift card! The Traders Podcast will now release new episodes every Tuesday and Thursday, so please make sure you’re subscribed and join us!

Links for this episode:

Subscribe to Rob’s YouTube channel here: https://youtube.com/robbooker

Rob on Twitter: @RobBooker

The Traders Podcast on Twitter: @TradersPodcast

TFL365.com

Trader Interviews.com

Jason’s movie podcasts:
Movie Podcast Weekly where we review new movies in theaters.

Horror Movie Podcast where we’re Dead Serious About Horror Movies.

Full transcript of this episode:

Rob Booker: Mr. Pyles.

Jason Pyles: Rob Booker. It’s been a long time.

Rob Booker: Welcome back.

Jason Pyles: Thank you. It’s good to be back.

Rob Booker: Do you ever have anything that doesn’t quite work the way that you expected?

Jason Pyles: Oh yeah all the time. Like my kids for example.

Rob Booker: Give us an update on how you’re doing.

Jason Pyles: Doing great, thank you. Another one of those things would be my heart. That’s a good example. Earlier this year I had open heart surgery and I’m much better now. Thanks to Cleveland Clinic.

Rob Booker: You sound like it. You sound better than ever.

Jason Pyles: Thank you. Yeah I feel a lot better.

Rob Booker: I did a poll on Twitter on how badly our listeners wanted to hear your voice again. Someone said that you have a mix … Did you see this poll?

Jason Pyles: No but I’m nervous about the results.

Rob Booker: No need to be nervous. There were two choices. One choice was really bad. The second choice was really, really bad. And really, really bad won 78 to 28%. That adds up to more than 100% so more than 100% of our listeners want to hear you back on the show and most of those people want to hear you back really, really bad. One guy replied and said you sound like a mix between Casey Kasem and the Marlboro man.

Jason Pyles: I’ll take it. I love that.

Rob Booker: Sounds like a compliment to me.

Jason Pyles: That’s how I’m looking at it Rob.

Rob Booker: That’s great. That’s awesome. The movie related podcasts are doing great?

Jason Pyles: Yeah absolutely. I still have movie podcasts weekly where we review the new stuff that’s in theaters. I’m still doing that crazy horror movie podcast as well. We’re getting thumbs up for It this weekend.

Rob Booker: Alright. Are you going to go see that in the theater?

Jason Pyles: Yeah. Tonight, in fact.

Rob Booker: Oh my gosh. I can’t even get through the preview. He gets to the … The preview for the movie It, he gets up to the drain on the street and I just turn off the preview. I can’t even get past that part.

Jason Pyles: Yeah. Rob’s like, I’m not doing storm drains. Forget it.

Rob Booker: Storm drains, that’s right, exactly. Oh my gosh. Just one question about movies and then we can move on. At the end of Dunkirk, does somebody wake up from a dream?

Jason Pyles: I know right. You’d wonder right. With Christopher Nolan.

Rob Booker: I’m ready for a Christopher Nolan movie with a twist. I’m ready for that.

Jason Pyles: Me too. Me too. I’ve been waiting for years.

Rob Booker: Did you see his first movie?

Jason Pyles: Yes, I did. [crosstalk 00:02:32] The student film he made?

Rob Booker: Yeah.

Jason Pyles: Hmm?

Rob Booker: The Following or something like that?

Jason Pyles: Yes it is. It’s still quite decent actually.

Rob Booker: Maybe I’ll check that out today.

Jason Pyles: Awesome. Let me know.

Rob Booker: I really ought to start a podcast on your podcast movie podcast network about television ’cause I don’t really see movies anymore.

Jason Pyles: Yeah, you should Rob. You’d be great at that.

Rob Booker: That’s not a bad idea. Maybe one of our listeners would like to join me. I don’t know if you’d have us on the movie podcast network.

Jason Pyles: Yeah. You’re pretty amazing. Even though it’s TV. We would just say, Well it’s the small screen. There’s the silver screen and then there’s the small screen.

Rob Booker: Okay, that’s a good idea.

Jason Pyles: Right, that’s what I think.

Rob Booker: God, that’s awesome. We still haven’t talked about trading, which is the best part about this whole thing coming back together and doing a podcast. Officially, welcome back to both of us on the Trader’s podcast. It’s nice to be here. The subject for today’s episode Jason, is to welcome us back together, remind everyone that new episodes drop on Tuesdays and Thursdays, including full transcripts and show notes. Once again, very happy about that. Also, to talk about the subject Jason, when things don’t work out the way that you might have hoped.

I got a message. Now usually, I would send this to you beforehand but it just came in and one of our listeners wrote in and was pretty heartbroken about the way that his trading has gone. I thought I would read that comment and then over the course of this episode and maybe the next, we could talk about this dear listener of ours and perhaps answer his concerns or whatever.

Jason Pyles: Yeah. I hope we can help.

Rob Booker: Let me pull this up. Essentially this fine gentleman writes in and has just had a really, really tough time. I’m going to read it if I can find it. Maybe one of our support team has already, yeah they’ve already tackled this one. They had originally moved it over to me. Yeah, but it’s gone now. What a bummer.

Alright, well our friend had started in trading years ago, Jason. And had no success. Then started back up and had a lot of temporary success. Just recently went back to some old behaviors and dropped the ball, made some big mistakes and lost 50% of his account.

I just felt heartbroken about it. The reason is, I want everyone to be successful. The question that our friend wrote in was, ‘When do I just quit? This didn’t work out the way that I wanted. This trading thing didn’t work out the way that I wanted. When do I just quit? Do you have any thoughts on this before I just go down this road and start yacking my pie hole?

Jason Pyles: Wow. I can appreciate that because it’s like … I’ll say one thing really quick and turn it over to you ’cause you have way more experience and training. But I think it’s interesting, any time that someone has the courage to be reflective like that and have that be honest with yourself kind of moment where you’re trying to figure out what you should do next. I think that’s a good sign when somebody gets to that point.

In my understanding, in the years that I was on the Trader’s podcast in the past. I think sometimes it’s difficult for traders to be honest with themselves. I think being at this moment where they’re reassessing, I think is an important place to be. I just wanted to acknowledge that and then turn it over to you, Rob.

Rob Booker: I love that. I have a warning for this individual and anyone listening in, and to myself, just a reminder and a warning. The act of quitting because you lack discipline doesn’t reflect upon the endeavor, it reflects upon you, or me.

If I quit my marriage because … Okay, there are reasons to quit a marriage. Having done that, I’m going to justify that. But of course, I’m happily remarried and I love my wife and she’s the greatest thing that ever happened to me. Let’s just say that we have a difficult day and things don’t go the way that I might have hoped or wished they had gone. But it’s just in the ordinary course of a relationship.

If I quit, it doesn’t reflect on my wife, or the institution of marriage. It reflects on me. Let’s say that I lose my temper in the relationship, now it even reflects even more upon me and I have some work to do. That’s not a criticism. I don’t mean that to strike out at this individual.

But I do mean to say, if what you’re telling me is that you’re struggling with discipline or making the right decisions at the right time, or avoiding the wrong decisions. If that’s what you’re saying, then it’s time to get some help. That help can come in the form of therapy or mentorship that you get through books. Or it can come through prayer and meditation. There are a lot of avenues for that.

But the answer isn’t necessarily to close down your trading account and quit because trading doesn’t work. There are times when trading doesn’t work. There are times when that’s the case. And those instances might be when you’re trading a product that no longer is available. Or you’re trading a product like binary options outside of the United States where binary options outside of the United States are a complete scam and your broker’s going to walk away with all of your money and then you have no money left, then yes. There are times when there are external circumstances that prevent anyone from trading.

But if it’s merely and I say merely in quotation marks, ’cause it’s a big deal. A lack of discipline, then I don’t really see what the point of quitting would be. Because the next endeavor that you take upon yourself, or the next really important thing that you try to tackle, you’re going to run up against the same lack of discipline or the same propensity to make a mistake or get yourself into trouble or do the thing that you said you weren’t ever going to do all over again. It doesn’t make any sense.

You might as well draw a line in the sand, now, here. Change the way that you handle things. Get some help. Read some books. Do some meditation, whatever it takes. What are some ways that you have, Jason you’re an incredibly disciplined person. You got up again today at, what time in the morning did you get up again?

Jason Pyles: It was about quarter till six.

Rob Booker: Quarter till six. Our friend of the show Shawn Campbell probably got up at 4 o’clock in the morning.

Jason Pyles: Oh yeah, Shawn yes.

Rob Booker: What is this Jason? Is this cosmic energy flowing through you? What is this? You have an incredible amount of discipline. You once finished a podcast while you were sick. You said, Could you please hold for a moment podcasting crew. You went and threw up and then you went back and finished your podcast.

Jason Pyles: That’s true, yeah.

Rob Booker: That’s the discipline that we’re talking about. That is, you are an example of what we’re trying to achieve. What is it Jason? Were you born with this?

Jason Pyles: I don’t know.

Rob Booker: How did you come back from a surgery that left you feeling really … You were really bad off right after the surgery and then you just came roaring back.

Jason Pyles: Yeah, honestly that surgery was worst thing that ever happened to me this year, this March. I’ll tell you. For me Rob, it seems like with both the surgery and the other thing it’s just a desire to move forward and to progress. Progression is really important to me.

Yes, I plateau like everybody else. I’m not perfect at this. I get stuck in a rut. But when I really want to move forward with something in life that’s important to me like my own life or the Trader’s podcast. I was excited to get up this morning. It’s like, yes, I’m tired right now. Yes, this is difficult to get out of bed. But I want to progress and move forward and keep going. I think discipline can be born out of a desire to succeed.

Rob Booker: Yeah, that’s a really … I like that. That’s the motivation to change for the better comes out of that desire to succeed. There’s a possibility that when I have been … Let’s just use me as an example. It’s not fair to use our friend as an example. But when I have unsuccessful due to a lack of discipline, it is possible that my goal in these instances has been to make money. Or my goal has been to save face or prove a point. Something along those line, as opposed to maybe a goal Jason, ought to be the goal itself should be doing the right thing. Or the goal itself should be to follow a process.

We talked on our other marketing podcast weekly, shameless plug, we talked just on our last episode about the fact, oftentimes success isn’t the result of setting a big lofty goal that is accomplished all in one fell swoop. But instead, success is about setting a goal to do the right things every day and identity what those right things are. And then only do those things. Maybe we could come back in on our next episode on Thursday we could come back and talk about what those right things are.

Jason Pyles: I like it.

Rob Booker: How can, I don’t really remember anymore. How can someone reach the show?

Jason Pyles: You know. I was going to ask you the same thing, Rob. I wasn’t sure what means we were using. I remember back in the day when-

Rob Booker: I think they should send me a text message.

Jason Pyles: Okay, ’cause I was going to say, I remember when you have everybody texting your own personal cell phone.

Rob Booker: Let’s do it. Okay, my cell phone number is 304-281-8332. 304-281-8332. Or leave a comment under the show notes of today’s episode of the Trader’s podcast and we’ll give one commenter who welcomes Jason back, we’ll give someone an Amazon gift certificate. Jump on traderspodcast.com, click on today’s episode. Scroll down though the transcript and leave a comment for Jason. We’ll give one lucky winner, what do we say, $25 Amazon gift card.

Jason Pyles: Yeah. That’s nice.

Rob Booker: Jason, do you want to plug anything before we go today? Let’s do that.

Jason Pyles: Oh, thank you, yes. I hope people could check out moviepodcastweekly.com if you want to hear about new movies that are in theaters. If you’re a horror fan, ’cause Halloween’s coming up soon, horrormoviepodcast.com

Rob Booker: That sounds like a brilliant idea. We’ll see you next time everybody.