Podcast Episodes – Traders Podcast

Happy Halloween! Welcome to The Traders Podcast with your hosts Rob Booker and the producer Jason Pyles. Want to talk about something really scary? Episode 569 is a listener feedback “mailbag” episode whose questions coincidentally pertain to discipline in trading. We talk about how getting what you want requires making tough decisions to do things that are difficult. During the course of this show, we field questions from Steve, Tyler and a person we call “Grateful.” Join us!

The Traders Podcast releases 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

Jason’s movie podcasts:
Movie Podcast Network A group of eight movie-related podcasts covering new movie releases and many genres: sci-fi, horror, western, etc.

Direct download: RB569.mp3
Category:Podcast Episodes -- posted at: 10:10am EDT

In Episode 568 of The Traders Podcast, your hosts Rob Booker and the producer Jason Pyles talk about fear and how bad experiences with trading can haunt you and tend to affect your perception of yourself and your ability to trade successfully.

Jason cites singer-songwriter Glen Phillips who sings about this victim-mentality rut in his song, “Professional Victim.” Technically, the possibility of success always exists, so it’s never completely impossible to make money. Unfortunately, sometimes we convince ourselves of the defeatist C-3PO perspective that “we seem to be made to suffer” and that being an unprofitable trader is just “our lot in life.”

Join us for Episode 568, so Rob can explain how to break out of the victim cycle of abuse from the currency markets. Thanks for listening to The Traders Podcast. We release new episodes every Tuesday and Thursday. Subscribe free in iTunes and leave us a review!

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 Network A group of eight movie-related podcasts covering new movie releases and many genres: sci-fi, horror, western, etc.


Full Episode Transcript:

Rob Booker: Jason, have you ever punched anybody in the mouth?
Jason Pyles: No, actually I have not.
Rob Booker: Okay. I got in one fight when I was in 7th grade.
Jason Pyles: Oh, yeah? How did it go?
Rob Booker: One kid, a little bit larger than me, pushed another kid into the lockers and the other kid was disabled. I don’t know. I just flipped. All of a sudden, I just flipped and I punched this kid in the mouth and then he beat the tar out of me.
Jason Pyles: But still you were trying to help someone and I think that’s admirable. That counts. I mean that counts and you probably got a lot of very positive attention from people after that.
Rob Booker: Okay. True that. That’s very true.
Jason Pyles: That’s right.
Rob Booker: Now, what do you think the ordinary reaction is, kids on a school ground, kids on a playground, the usual reaction if one kid who is smaller gets punched in the mouth and beaten up by a kid who is bigger? What’s the usual reaction the next time the little kid sees the bigger kid?
Jason Pyles: Oh, just runs away. Fear.
Rob Booker: Runs away.
Jason Pyles: Yeah. Fear.
Rob Booker: Fear. Trading is the only profession in which something punches you in the mouth and then somehow you wake up everyday and you can’t wait to go see that person again. I don’t understand why that is, but I think that there are elements of … It is difficult to understand why some people continue to trade, especially when we get punched in the mouth so often. It’s an interesting profession, Jason. We get ground into the dirt by a currency pair or a stock or an options contract and then we get up and we go back straight at it all over again with the expectation that we’re going to get back at it.
Jason Pyles: Glen Phillips refers to this as a being a professional victim. It’s that whole abusive relationship syndrome where the abused is, for whatever reason, just compelled or addicted to stay within that relationship. It’s interesting.
Rob Booker: Is he related to Glenn Frey?
Jason Pyles: I don’t believe so.
Rob Booker: Smuggler’s Blues is one of my all time favorite songs and it’s just not a very good song but… Tell me more about Glen Phillips. Let’s investigate this idea.
Jason Pyles: Okay. You got it. Glen Phillips is from California. He’s the lead singer of Toad the Wet Sprocket, went off on a solo career for a long time but Toad the Wet Sprocket, the band that had that Walk on the Ocean song. You’ll probably remember from the ’90s. Anyway, he’s a good dude like a genuinely nice guy. You could tell by talking to him and he’s thoughtful. Anyway, he has a song called Professional Victim and it’s about that sort of relationship. It reminds me of what you’re talking about with trading, Rob, where someone knows that this is happening to them and it’s not all positive. A lot of what they get from a relationship is negative but maybe a little positive but they keep ending up finding themselves in that same circumstance because they’re a professional victim.
Rob Booker: That’s interesting. It’s so important as a trader if you are continually getting punched in the mouth or left for dead by a currency pair to walk away from it. I don’t want to make any comparisons to abusive relationships necessarily. Those are serious. If you find yourself in that kind of situation, you need help and you need to know that there are people that are ready to stand at your side and protect you from that kind of thing. I don’t mean to make light of any of that kind of stuff and it’s a real problem in society today and I don’t want to make light of it.
In the world of trading, however, what I find is that because we don’t see immediate physical ramifications and consequences for going back to and repeating the same behaviors, what we will do is we will put ourselves in a situation where we allow ourselves to be hurt by financial instruments that we don’t need to have in our life. We don’t have to trade those financial instruments. I see this time and again and I’ve done it myself where a currency pair in particular will cause me a lot of stress and then I will be found months later trading that same financial instrument again against my own best interest knowing that generally I don’t do well at that financial instrument and I will go back to it as if there is something that I can prove to it or something that I can change about it or something I can change about myself.
Meanwhile, off to the side, there’s a financial instrument that has done well for me repeatedly over and over and over again. An example for me is about two years ago I decided I would never trade the Japanese Yen again. Then I traded the Euro, Yen again. Then I lost a bunch of money. Then I traded the Euro, Yen again and I lost a bunch of money. Then I traded the Euro, Yen again and I lost money. Then it swung back and I had a huge win and it was a huge emotional high. What am I doing right now? I’m stuck in a Euro, Yen position again. Why? Because I just can’t stop myself from … I can stop myself but I don’t. Meanwhile, I’ve got the Australian dollar, Canadian dollar which I have just a really simple methodology for getting into a trade on that financial instrument and having a lot of success with it.
Jason Pyles: I have a theory here, Rob.
Rob Booker: All right. I’m ready for it.
Jason Pyles: Seriously I think this is … Unlike the example we were talking about, I think with trading, I think somebody sees the Euro, Yen, for example, they see that and they say, “You know what? Somebody can make money at this.” It’s not impossible, right? There is a way that it can be done. I think it’s the very existence of that possibility. Well, obviously, I got to get this figured out and I’ve already invested so much time and effort and money thus far. It just seems like that they do it because it’s something that you could potentially make money in.
Rob Booker: Right. The danger of having sunk costs.
Jason Pyles: Right.
Rob Booker: That’s really true. That causes so many problems because you’re like, “Well, I already invested all this time and now I have to get a return from it or otherwise it’s embarrassing.” No, you actually don’t.
Jason Pyles: It’s weird to think about because I presume there’s not a currency out there that’s impossible to make money from, right? Or is there, Rob? Is there something that’s impossible?
Rob Booker: Oh, we joke about it but, no, that doesn’t exist. We joke about it but no. It’s possible theoretically to build a trading system that will work on any currency.
Jason Pyles: It’s that possibility I think that lures people.
Rob Booker: That causes the problem.
Jason Pyles: Yes, yes.
Rob Booker: Ain’t that the truth?
Jason Pyles: I sense you’re saying this from experience.
Rob Booker: I certainly am. If you’ve got a story of a currency pair that keeps causing you problems, Jason, how can someone reach the show?
Jason Pyles: Oh, here’s the thing. Well, you can text Rob in his cellphone. His personal cellphone is 304-281-8332.
Rob Booker: I’m holding it right here, banging it on the table right there.
Jason Pyles: That’s right. That’s right.
Rob Booker: Can’t wait to get your message. You can find me on the Twitter. Also I’m back on arguing with people about politics and trading and whatever else. You can find me @robbooker on the Twitter. I would love to hear from you there. Jason, what can we plug for you today?
Jason Pyles: Oh, I’d just love if they check out moviepodcastweekly.com. We review the new stuff that’s currently in theaters.
Rob Booker: Hurray. The upcoming movie that you’re most excited about?
Jason Pyles: Let me see here. Well, I guess it would be Star Wars. I got my tickets, Rob. Did you get your tickets?
Rob Booker: No, I couldn’t get them. Literally, everything was sold out. It just happened so fast.
Jason Pyles: I know.
Rob Booker: I don’t know what I’m going to do now.
Jason Pyles: It’s ridiculous, isn’t it?
Rob Booker: Yeah. It is ridiculous.
Jason Pyles: It’s very frustrating. It was 12 hours into the sale and I’m like, “Whatever. I’ll get it after work.” Then people at work are saying, “Yeah, right. They’re gone.” I found the theater where I could get two seats for my son and me. But, man, it was close.
Rob Booker: I needed five or six seats and I just couldn’t get them.
Jason Pyles: Oh, wow. Yeah, I could see that. Anyways, it’s insane.
Rob Booker: I probably could have gotten one and then been disowned by my family.
Jason Pyles: Yeah, you’ve been like, “I’ll tell you if it’s good.”
Rob Booker: Oh, my gosh. You’re not going to believe how good that was. It will not go over well. It’s pretty funny. Oh, man. All right. Well, have the best day ever. This has been fantastic explaining time with you again. I talk to people all the time now, Jason, that just say how happy they are to hear your voice on the podcast.
Jason Pyles: Oh, I’m glad. Thank you. Thank you. It’s good to be back here.
Rob Booker: All right, everybody. We’ll see you next time. I’m Rob Booker. On behalf of Jason Pyles, the producer, you’re listening to The Trader’s Podcast.

Direct download: RB568.mp3
Category:Podcast Episodes -- posted at: 9:37am EDT

Halloween might be around the corner, sure, but of course, serial killers are no laughing matter. In Episode 567 of The Traders Podcast, your hosts Rob Booker and the producer Jason Pyles don’t intend to make light of how much traders have in common with serial killers, but as you will hear in this episode, the similarities are uncomfortably numerous…

Serial killers can do unspeakable things and still feel totally “normal.” Much like traders, serial killers tend to live outside of typical societal norms (in some ways), and they do things that tend to separate them from others. And they are completely at peace with this fact. We trust that all our listeners are fine, upstanding contributors to your respective communities, but if you’d like to hear more out of morbid curiosity, listen to Episode 567!

Thanks for joining us for The Traders Podcast. We release new episodes every Tuesday and Thursday. Subscribe free in iTunes so you don’t miss any new episodes!

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 Network A group of eight movie-related podcasts covering new movie releases and many genres: sci-fi, horror, western, etc.


Full Episode Transcript:

Rob Booker: Okie dokie artichoky. Mr. Pyles.
Jason Pyles: Hey, Rob.
Rob Booker: Have you watch Mindhunter on Netflix?
Jason Pyles: No, I haven’t, but I’m curious about it. Tell it.
Rob Booker: All right, so Mindhunter, without spoiling anything, is the story of a fresh off the boat FBI agent who tightens his tie so tightly it’s shocking that he can breathe. It’s the story of how he ends up on the hunt for serial killers, which they call sequence killers because it’s 1977, and they don’t know the word serial killer yet, I guess. Didn’t realize that. It is a David Fincher show actually. He directed the first episode and produced it, so you know it’s kind of twisted.
Jason Pyles: Yeah. Love it. Okay.
Rob Booker: I love David Fincher, so anything that he produces I really enjoy. What the story ends up becoming is the story of how in order to catch a serial killer, you have to get into the mind of a serial killer. It brings to mind, for me anyway, this idea that in order to become a successful trader, you have to get into the mind of a successful trader. The mind of a successful trader, I’m not going to compare it similarly to serial killers, that would be terrible, but I’m just going to talk about some of the characteristics of serial killers and tell you how that’s similar to traders.
Jason Pyles: Okay. Great.
Rob Booker: All right, so serial killer, in the show anyway, a sequence killer is unable to factor in or in some cases detect the emotions of others. I don’t know if you would call it lacking empathy or just being completely narcissistic. Some of the best traders I’ve ever met, some of the traders that are willing to take the most risk and make the most amount of money in the shortest amount of time, if that’s what we’re talking about, really making a lot of money, they have some kind of way to turn off the connection between choice and consequence. These individuals in some cases sort of have this blank stare when someone else is criticizing their way of looking at the market. They are truly wrapped inside of their own world and their own point of view. It’s not just that they disagree. There are a lot of good traders that get into arguments about what’s best and what works and what doesn’t. I’m saying these individuals appear to not even have processed what you just said at all.
Jason Pyles: Wow, so there’s like a real stoicism about them. They’re stoics.
Rob Booker: Okay. Yeah. You could say that. That’s right. Yeah, really stoicism is right on the verge of sociopathic behavior.
Jason Pyles: They’re stoic about it. Okay.
Rob Booker: Okay, yeah. We can call it that. I’m game for that.
Jason Pyles: Okay. All right.
Rob Booker: Another characteristic in this show, in many cases a sequence killer had a complicated family relationship. I don’t want to spoil anything, but that wouldn’t come as much of a shock. In many cases, a killer has something to prove. A killer is expressing that something to prove in an anti-social, disgusting, and horrible manner. Let’s now talk about traders.
Jason Pyles: Okay.
Rob Booker: A lot of the most successful traders I’ve ever met are individuals who became redundant at work, made redundant or laid off at work, who have a spouse or a partner who is unsupportive of what they’re doing, and they have something to prove. They take it personally, and they act with an energy and determination that otherwise they wouldn’t have in the same way that many children brought up in very difficult circumstances for whom you would feel a great amount of sorrow and empathy actually grow up to accomplish great things or creatively express themselves in totally unique and amazing ways because of the difficulties in their childhood.
In that same way, traders who have something to prove and that desire to prove something is directed at someone close to them, either living or dead, those traders are on a mission, and they do great things. They do amazing things. There is something about that desire to prove something, get back at, that can express itself in anti-social ways. You can channel that as a trader into getting up earlier, cutting off your losses because you certainly don’t want to get caught, that sounds very much like a serial killer, that your goal is to persist in what you were doing and not get caught. Next on the list, Jason, once caught or once found out, a serial killer, a sequence killer, might be effusive in a description of unspeakable acts of terror that seem very ordinary to them.
Jason Pyles: So they’ll go on and on, talk about it a lot.
Rob Booker: Clarice.
Jason Pyles: Yeah, yeah, exactly.
Rob Booker: Right.
Jason Pyles: Very nice.
Rob Booker: To this individual, what is unspeakable to anyone else seems ordinary, and they can describe it in great detail without emotion. I’m talking to people who have turned a small amount of money into a lot of money. When I talk to those individuals and they describe what they have done, they do it very matter-of-factly, even though the things they are describing are just outrageous. For instance, and I’ve told this story on the podcast before, but someone asked me about it the other day. They said, “Well that guy you used to travel around with in 2009, he would regularly turn a $3,000 account into an $80,000 account.” What would happen, he would hit the wall. He couldn’t go any further than that. Sometimes he’d keep the money, and sometimes he’d take $80,000 all the way back to 3, fast. He had this meteoric rise and just volcanic eruption at the top and then come back down. Sometimes he’d keep the money, and sometimes he wouldn’t, but he was just this driven individual, driven to prove something and unable to understand why what he was doing seemed so exceptional to other people.
He would stand in front of a group of people and show his trading account. One morning it would be up $25,000 from the day before, so he’d make like $25,000 in a day. The next day he’d wake up, and it would be drawn down or open losing trades of $50,000. It would be so obvious that this was outrageous behavior, which was making money in the end, but it was just outrageous. To him, he just couldn’t understand why people thought it was a big deal. He would just say, “Well, I was just doing what it takes.” It was just so different than anybody else that’s out there learning to trade, who are taking notes and all those kinds of things. Do you have any comments here?
Jason Pyles: I do because what you’re describing right there kind of reminds me to drive the serial killer analogy. He apparently must have had a stomach for risk. He wasn’t really worried one way or the other about that. Just like when serial killers do horrible things, they have a stomach for those horrible things. They can do things that most sane people would think, yeah, I’m never going to do that, or I should never do that, right?
Rob Booker: Yeah.
Jason Pyles: Stomach for risk.
Rob Booker: In the act of doing it, they would feel some kind of a thrill or whatever that would just be terrifying to anyone else.
Jason Pyles: Right, right. Yes.
Rob Booker: Yeah. This is terrible because now I have friends that have made a lot of money that they’re probably thinking that I’m comparing them to serial killers, but whatever. The fourth thing is they take a lot of notes. Their notebook looks like the diary of a madman, the obsessive scrawlings of a tortured individual.
Jason Pyles: Like all the notebooks in the movie Se7en, also David Fincher.
Rob Booker: Yes. Exactly. Yeah, right. Exactly. That’s a great point. As I say this, I’ll just use myself as an example. My offices now, I have these 3 foot x 2 foot post-it notes. We should take a picture of this. I put them on the whiteboard, so there’s no glare when I do a video. I’d make my notes in that, and then I stick those notes on the walls. Now my office walls are surrounded by these notes. I mean, I’m looking around now. I’m frightening myself. It does look kind of scary and weird. I have these notebooks. When I become obsessed about a certain business type project or whatever else, I’ll have these notes. I would say that I share a lot of these characteristics when it comes to just online business and being obsessive about it and whatever else. Not so much in the world of trading. I feel like I’m not obsessive in that way about trading. My results are not spectacular sometimes because of that. I’ll make a consistent amount of money, but I don’t do things that turn $3,000 into $80,000. I just don’t do those things.
Jason Pyles: Right. Right.
Rob Booker: I feel like in order to do those kinds of things you end up sacrificing your personal relationships and your inclusion in regular society, which I have done from time to time with the business type projects that I’m passionate about. That’s happened for me. It’s never really happened with trading, but I’ve watched individuals basically exit society and dive into their work as traders in order to grow those accounts. They become separated from the rest of the world.
Jason Pyles: That’s interesting.
Rob Booker: Yeah. I don’t know if you can even voluntarily choose to go down that path. Turning $3,000 into $80,000, I don’t know if that’s a okay, I’m now going to become crazy and do that. I don’t know if you could even consciously decide that you’re going to go down that path. I think that you can have consistent returns and compound gains, but it seems unlikely to me that someone could ever consciously set a goal to become crazy enough to make those returns.
Jason Pyles: Mm-hmm. Yeah, so it just kind of happens then. Okay.
Rob Booker: Yeah. You’re either crazy or you’re not.
Jason Pyles: Right. Right. Well, it does seem like it’s some sort of a trap though that people could fall into if they’re not careful.
Rob Booker: Right.
Jason Pyles: I mean, slippery slope kind of thing where you could get a little obsessive, I guess.
Rob Booker: Yeah. That’s a good point. Maybe there could be a learned obsession. I mean, people get obsessed all the time with people or projects or jobs or works of art or musicians.
Jason Pyles: Yeah. It’s amazing. It’s kind of weird. Have you ever wanted to kind of take a look at obsession from an outsider’s perspective? There’s a documentary called I Think We’re Alone Now about that ’80s pop singer Tiffany about a couple of her biggest fans. It’s very fascinating. I don’t know. It reminds me of what you’re talking about a little bit where people just allow themselves to go down this road. That’s kind of troubling, I guess.
Rob Booker: Yeah. I don’t know. I’m kind of fascinated, Jason. I wonder if there can be a guidebook to insanity. It sounds like something I would get in trouble for.
Jason Pyles: Yeah, probably.
Rob Booker: It sounds like a great documentary. The only way to make a great documentary about trading is to watch someone descend into the madness necessary to make a spectacular return.
Jason Pyles: I think you should do that, Rob. I’m serious. I think you should do it.
Rob Booker: Does it have to be real, or can it be a fictional?
Jason Pyles: Well, if it’s fictional, then I guess it technically might not be a documentary in the true sense, but you could do a mockumentary that depicts that.
Rob Booker: You think Eugene Levy would be in it with me?
Jason Pyles: Yes.
Rob Booker: He’s in all the great mockumentaries.
Jason Pyles: That’s true. That’s true. That’s funny.
Rob Booker: Oh, man. All right, everybody. How can everybody listen to your movie related podcasts, including movies starring Gene Levy?
Jason Pyles: Absolutely, yeah. They can go to moviepodcast.network. We have a whole network of eight different podcasts about movies, all types and genres. Just check us out there.
Rob Booker: Excellent, and if you want to reach the show, you can send me a text message to 304-281-8332. You can hit me up on the Twitter and say hey, I just listened to the episode, it was great, sort of, @robbooker on the Twitter, and we’d love to hear from you. I’m Rob Booker. On behalf on Jason Pyles, the producer, you’re listening to The Traders Podcast.

Direct download: RB567.mp3
Category:Podcast Episodes -- posted at: 10:06am EDT

Most people go through life making the same mistakes at age 60 that they made at age 20. It’s astounding and even discouraging, but unfortunately, it’s true. And some people structure their lives so they can succeed in one area while acting out internal conflicts in another area.

In Episode 565 of The Traders Podcast, your hosts Rob Booker and the producer Jason Pyles explore the pitfall of self-destruction and how many traders get caught in this downward spiral. Rob says that 75 percent of experienced traders are struggling with self-destructiveness. Join us to learn how to escape the self-destruction cycle!

Thanks for listening to The Traders Podcast. We release new episodes every Tuesday and Thursday. Subscribe free in iTunes, and please leave us a review!

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:
http://moviepodcast.network/ – A group of eight movie-related podcasts covering new movie releases and many genres: sci-fi, horror, western, etc.


Full Episode Transcript:

Rob Booker: Mr. Pyles.
Jason Pyles: Hey, Rob.
Rob Booker: Did you know that four years ago this Christmas it was a very Bitcoin Christmas?
Jason Pyles: I remember that Christmas.
Rob Booker: Episode 214 of The Traders Podcast featured a conversation about Bitcoin, and then episode 224 featured a conversation about Bitcoin and Tesla Motors and some other stuff. Four years ago in one or the other of those episodes, I think we talked about Bitcoin at some point in time, at some day, would travel all the way to $10,000 or even $20,000.
Jason Pyles: I remember that very Bitcoin Christmas. I think if I’m not mistaken, either that was going to release on Christmas Eve or we actually recorded it Christmas Eve morning, and so I have fond memories of this, yes.
Rob Booker: Yeah, I do too, especially of those episodes. Back in 2013, I can’t even go back this far on my Bitcoin charts right now. I can’t even go that far back. After that time, Bitcoin went up and down, sideways. It went down again as far as … it halved in value at that time. It dropped precipitously in value. It went down to 200, then it hovered around $200, $250, $400 or whatever, and I have a friend and a friend of the show that around the time that Bitcoin was still trading in the $100-$200 area put his life savings into Bitcoin, Jason.
Jason Pyles: Wow, okay.
Rob Booker: Not because of the podcast, but put life savings into Bitcoin, and then started a business that basically ended up handing him a 1,000 … it was so many Bitcoins I can’t remember anymore. 2,000 Bitcoins? A lot of Bitcoins. Today as we record this episode, Bitcoin has now reached $5,800 per Bitcoin, is trading at $5,500 per Bitcoin right now, and all of this movement has happened this year. All of it, from $700 to $5,800, the big jump happened this year.
I just want to say two things: Number one, everyone should listen to us, because it only takes about four years for stuff that we say to come true. When Facebook IPO’ed, we did a podcast and we talked about it, and I said Facebook will be $100 a share stock, and we had people write us and tell us that we were stupid and that we were crazy. We had a lot of people tell us that we were insane. Today Facebook is trading at $172 a share, and it will probably fall from there, but …
Jason Pyles: Right.
Rob Booker: Still the same, that’s an extraordinary move. Anyway, the point that I want to make is that Bitcoin is on this run, and everybody’s calling for the end of it, and everybody’s talking about how this is a bubble, and it is a bubble. It is a frothy bubble, and it is insane. It is crazy, but it’s for real. This is really happening, and every time you think that a trend is going to stop, it just keeps going. Trends will go a lot farther for a lot longer than we think they will. It just happens.
Jason Pyles: That’s amazing. One question about Bitcoin, Rob, and I’m sorry if I reveal my ignorance to everyone here, but do you think Bitcoin has had this kind of a run and this ride because digital technology and the world of the internet itself is so insulated? I don’t know if that’s the word I’m looking for, but it just seems like a very secure … the future of it just seems like a very secure place to go.
Rob Booker: There are a couple reasons, I think, and I’m going to do my best here. This wasn’t always true; however, it’s really hard to hack the Bitcoin or trace the route of transactions in Bitcoin, so if you want to hold a bunch of Bitcoin and then you want to spend that Bitcoin or you want to move it somewhere, no one’s really going to know it’s yours. You’re going to know it’s yours, and you’re going to have a unique identifier. That’s number one. Number two, all transactions on the network are peer to peer, so the entire network is supporting the transaction log of all the Bitcoins. So there’s an incredibly secure process for verifying and processing transactions that’s not instantaneous but is verifiable and trustable instantaneously.
That is really appealing in a world where the entire financial system is really easy to hack, and people are very suspicious of it. Bitcoin is, on the other hand, a complete fiction. It is a completely made up, absolutely made up coin. It is no different than US dollars. US dollars are backed by the full faith and credit of the United States government, which means as much as you want it to mean. And the value of a dollar can change, and so can the value of a Bitcoin. The value of a Bitcoin is really just what the collection of people who are holding Bitcoins, or who want to hold Bitcoins, think it is. You can say Bitcoin is worthless and doesn’t have any underlying value, but that doesn’t really make it any different than any currency in the world today.
Jason Pyles: That’s amazing.
Rob Booker: It is really amazing.
Jason Pyles: It’s just fascinating. It’s like, “Hey, everybody, let’s across these clouds, and just because we believe they’re there, they will support us.” It’s just amazing to me.
Rob Booker: Yeah, right, it is. The insular nature, or whatever you want to call it, of Silicon Valley and the tech industry in general perpetuates this. There’s confirmation bias. Bitcoin is amazing, and you say that to your friend who thinks that Bitcoin is amazing, and then your friend says, “Yes, Bitcoin is amazing.” And then you both go out and you buy more Bitcoin, and you’re like, “Yeah, we’re amazing.” You don’t really ever have to hear the counterargument. I’m not real familiar with any credible counterarguments right now. Four years ago when we talked about this, I said that what a lot of people think ought to be happening with gold is going to happen with Bitcoin, and that’s played out to be absolutely true, that Bitcoin has been the one that has moved in response to the fact that people don’t trust the international financial system anymore. They don’t trust it anymore.
Four years ago when we were podcasting, gold was trading around $1,300. Guess where gold is trading now? $1,200. It’s basically gone sideways over that same amount of time, and Bitcoin has gone straight up. The point is this, that when Donald Trump was elected I said he’s going to be elected President, there’s no way he’s going to lose, and then I said the dollar’s going to tank and gold’s going to shoot up to $1,400 and then $1,900 an ounce. None of that … the financial side of that didn’t happen. The Bitcoin side of it did. And what the price of Bitcoin is reflecting is a distrust in the political systems of the day, and plain and simple a place where people can go off-grid with their money.
Gold really doesn’t represent that. If you want to store gold in your house, it represents that, but Bitcoin can be stored securely and privately, and almost no one is ever going to know. And eventually you’re going to be able to spend it. On top of everything else, eventually you’re going to be able to spend it too. At some point in time, Amazon’s going to accept Bitcoin. It’s going to happen, and when that happens, that’s where Bitcoin goes to 10,000.
The other side of this is that China is just filled with miners, companies that are building giant warehouses and water-cooled computers where they are mining Bitcoins, and when China says it can’t be done anymore, that’s going to go someplace else. Someone else is going to do it. This trend, like all other trends, will last longer and go farther than people think it will, and it will have deep corrections and significant problems, but it’s hard for me to imagine a world in which it goes away, because of its nature as a private peer to peer transaction network that people will depend on in the face of political and economic uncertainty.
Anyway, Bitcoin is going up, the stock market is going up. They’re both what you would call risk-based assets, but if the stock market takes a significant drop and people run out of the stock market, I don’t know what will happen to Bitcoin. I imagine there would be a correction, but I imagine that Bitcoin is becoming more and more the new flight to safety. Now it’s too expensive for a lot of people to get involved. It’s kind of sad, Jason. But we did do a podcast long ago about it, so I feel like we’ve done the right thing there.
Jason Pyles: Mm-hmm. Yeah.
Rob Booker: And gold probably is … I mean, I was early but I don’t think I was wrong. At some point in the Trump presidency, love him or hate him, gold is going to rise to $1,900 an ounce. I guarantee it. If not to all-time highs. I guarantee it. Because Bitcoin is so expensive right now and there’s just no chance I’m going to buy Bitcoin at these levels, my thing is I’m now looking at ways to buy the gold ETF and have some exposure to that, because although it won’t go as far and it’s not going to double in value necessarily, I think it really in times of uncertainty and political strife and whatnot, it really will be one of the safest places to go.
Jason Pyles: Mm-hmm. Nice.
Rob Booker: All right, so do we have anything in the mailbag?
Jason Pyles: We sure do, Rob. Yeah, we got a text from… let’s see, this is from is it Bama Garrett. It says, “Hey, Rob. Bama Garrett here. I hope all is well with you and your family. I’ve told you previously that I listen to every episode of The Traders Podcast twice, well all the ones prior to the reboot. Anyway, the latest episode reminded me of episode 211 where you said, ‘Peace comes from the doing. The unhappiness/anxiety comes from the wanting.’ That’s so true, and it goes hand in hand with what you were saying about just putting in the time and not wanting everything right away. I’m happy to report that I’ve been trading stocks live since February 2016 and just recently have crawled out of the negative, thanks to a $2,300 September, and I feel that I have turned a corner. I’ve been trading only one system for probably about 14 months of the 18 that I’ve been trading, and I have tracked every trade via a Profit.ly. My system is solely focused on the stocks that have missed three or more daily pivots, using Paladino’s brilliant missed pivot scans, and distilled further with Nox D and 5 RSI.”
And then he says, “I hope to meet you soon. Ever since you had to go and meet your now wife the weekend we were supposed to catch the ‘Bama game, I have wanted to meet you. Thanks for all you do and God bless.”
Rob Booker: The story behind that, Jason, is that the weekend that Garrett from Alabama had bought us tickets to go see the University of Alabama play in Tuscaloosa … I think that’s where they play … go to a college football game, to the best college football team in the United States at the time, and still is today, I had an invitation to go see who is now my wife for the weekend. I just said to Garrett, I said, “Alabama will play more games, but I may never get another chance …”
Jason Pyles: That’s amazing.
Rob Booker: “… to date this woman, so I am going out to see my …” Because I kind of knew I wanted to marry her too. I mean, it was pretty early on.
Jason Pyles: It sounds like you certainly made the right decision, but I think you owe Bama Garrett a game, it sounds like, Rob. Just saying.
Rob Booker: I do owe him a game, that’s true. That’s great. Appreciate him. If we can stop there and come back to the mailbag next episode, I have a couple announcements to make.
Jason Pyles: Let’s do that.
Rob Booker: All right. Everyone’s asking us how they can easily get the archive of all the episodes of The Traders Podcast, and it’s not easy to do. For reasons of space and time and the time-space continuum vortex, if we plug all 500+ episodes into iTunes, because our show notes are sizable and descriptive, it blows up the iTunes feed. So what we’ve done is if you … This is what I want you to do if you’re listening right now and you’re someplace that you can use your fingers and whatever else, and you’re at your computer, I want to ask you go to The Traders Podcast website, and that is TradersPodcast.com, and on the right hand side of the page on the navigation page, I will put up a link where you can download every episode in .mp3 form straight to your computer, and then you can load it into iTunes and sync it up with your phone. But you could just have all of those files, all of them, all the episodes right on your computer, and that makes it easy to listen to all of them.
We’ll never be able to count those downloads, Jason, which is really unfortunate. I wonder if there’s some way to count those downloads. I’m going to find a way. But anyway, we want you to have those episodes, so go to TradersPodcast.com, click on the right side of the page. This will be up for just a limited amount of time, because it’s going to cost us like $1,000 in bandwidth just to give so many people all the downloads, but we want you to have those episodes, so go there, check that out right now.
And then, Jason, while we’re talking about downloading a bunch of podcasts, are you going to go to the “Star Wars: The Last Jedi” the night it opens?
Jason Pyles: Well, it’s actually the very next morning is what it will be, the 16th I believe it is, or 17th.
Rob Booker: I can’t get tickets. I can’t get a ticket.
Jason Pyles: I know. I almost didn’t … I waited 12 hours, it was like seriously 12 hours, and I’m like, “Yeah, I’ll get them, it’s fine.” And almost all the seats were gone, and they were like, “You can sit in the front row.” And it’s like there’s no way I’m sitting in the front row for that movie, this terrible place. So anyway, I went around to theaters and I found a theater that happened to have two seats for my boy and me, and we got it. We got it.
Rob Booker: Oh, that’s awesome. Speaking of movies and where someone can hear your review of “The Force Awakens” and “Rogue One” and other Star Wars movies, where can they find that?
Jason Pyles: Yes, sir, that would be at MoviePodcastWeekly.com.
Rob Booker: Excellent. All part of the Movie Podcast Network?
Jason Pyles: Yes, sir. We got lots of different kinds of shows there, like western podcasts, sci-fi, horror, whatever you want.
Rob Booker: That’s so awesome. I love just the regular Movie Podcast Weekly. Highly recommended, friends.
Jason Pyles: Thank you.
Rob Booker: I’m Rob Booker, that’s Jason Pyles, the producer, and you’ve been listening to The Traders Podcast. We’ll see you next time.

Direct download: RB566.mp3
Category:Podcast Episodes -- posted at: 10:51am EDT

Most people go through life making the same mistakes at age 60 that they made at age 20. It’s astounding and even discouraging, but unfortunately, it’s true. And some people structure their lives so they can succeed in one area while acting out internal conflicts in another area.

In Episode 565 of The Traders Podcast, your hosts Rob Booker and the producer Jason Pyles explore the pitfall of self-destruction and how many traders get caught in this downward spiral. Rob says that 75 percent of experienced traders are struggling with self-destructiveness. Join us to learn how to escape the self-destruction cycle!

Thanks for listening to The Traders Podcast. We release new episodes every Tuesday and Thursday. Subscribe free in iTunes, and please leave us a review!

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:
http://moviepodcast.network/ – A group of eight movie-related podcasts covering new movie releases and many genres: sci-fi, horror, western, etc.


Full Episode Transcript:

Rob Booker: Mr. Pyles.
Jason Pyles: Hey, Rob. Good morning.
Rob Booker: How are you?
Jason Pyles: Oh, I’m great. How are you?
Rob Booker: I’m good but I have a really important question for you.
Jason Pyles: Okay. I’m ready for it.
Rob Booker: I need your advice for our listeners.
Jason Pyles: Okay. I’ll do my best.
Rob Booker: I’m going to share with you a problem that most traders have, and then I’m going to ask your opinion about it. Then I’d like to read a quote from one of my favorite trading books I ever read.
Jason Pyles: Okay. Excellent.
Rob Booker: How do people control or contain their self-destructiveness? In your experience, is that even a real thing?
Jason Pyles: Oh, yeah. Yeah, absolutely. In fact I think that a lot of people go through phases so you don’t even have to characteristically be a self-destructive person. Sometimes you just go into a phase of this. All kidding aside, sometimes you might buy a bag of Oreos and feel like you’re going to destroy yourself that night. But, anyways, let me see here.
Rob Booker: Well, I feel like going out and buying that bag of Oreos when you know that it’s going to cause some health problems, or immediate problems, or whatever is kind of like in those horror movies when someone looks under the bed.
Jason Pyles: Yes. It’s like-
Rob Booker: You feel like they’re better off not looking under the bed.
Jason Pyles: Why are you doing that? What’s wrong with you?
Rob Booker: But, we don’t often think that it’s that way because fulfilling a desire is like a first order consequence, meaning I’m hungry for Cookie Crisp cereal. I’ll go get the Cookie Crisp cereal. Now, I have it. Now, I fulfilled the basis first order desire and then there’s all kinds of second and third order consequences that are now tripped up because of that. Self-destructiveness is trading what you want most for what you can have right now.
Jason Pyles: That’s right. What you mentioned there, Cookie Crisp, is a great example because that’s among Maslow’s hierarchy of needs. Yes, it’s an excellent example.
Rob Booker: What is it? It’s video game time, texting your friends on an iPhone. The highest need is having Cookie Crisp cereal?
Jason Pyles: For sure. At least it is for me. That’s been my experience.
Rob Booker: Maslow’s hierarchy of needs.
Jason Pyles: Right? Doesn’t it come down to if one wanted to try to contain this, this self-destructive thing, doesn’t it come down to, as you’re talking about here, priorities? If you were to try to make a list of what is most important to you and then start doing that reverse engineering that we do, it’s like how can I get that thing that’s most important to me? Is that unreasonable, Rob, for someone to do?
Rob Booker: No, it’s not unreasonable and it brings up the point that … Let’s say that one achieves the discipline necessary to strive only for what they want most and can put off what they want today. The question then becomes does that person even know to what end they should apply that discipline? Great. Now, you only want what is most important. What are you going to with all that discipline? And a lot of people then just flail because you still have to have a plan. You still have to know what’s going to work. But, I think that’s the easier side of the problem. I think the harder part of the problem is even just getting to the point where we get out of our own way. As traders, Jason, what they’ll do is a trader … The equivalent of getting a box of Cookie Crisp cereal and sitting on the couch and eating the entire box, the equivalent is sitting down in front of the computer and then breaking one’s rule about trade size.
This is the number one way that it’s done. A trader will sit down and they’ll be ready to have a perfectly normal trading experience and session. Let’s say that they’re just looking at bitcoin and they’re just ready to buy some bitcoin and they’re going to long bitcoin, which we’re going to talk about in our next episode, and then they just get so excited about how right they’re going to be that they just think, “This is a chance of a lifetime. I can always close this immediately like I can always stop eating the Cookie Crisp anytime I want. I’ll just get the entire box out. I won’t portion it out in the same way that I’m not going to have somebody supervise me eating. I’m just going to do this myself.”
The next thing you know they’re trading a much larger trade size. The trade goes against them and they get into this negotiation. I’ll just have one more Cookie Crisp and then I’m closing the box or whatever. They say, “I’ll just let it go a little bit further but then I’m cutting it off.” And, then it comes back a little bit and you’re like, “Oh, it came back a little bit. Oh. Well, see, I made the right decision in the first place. I think I’ll hold on for a bit.” Then it even comes really close to the original entry of the trade and they’re like, “Well, this is great. Now, I made the right thing. I’m not going to close it now. Why close it now? Everything is actually going in the direction that it should have gone.” Then it drops even further against than it went the first go round and now they’re in this just … They go into a self-denial, or they just close the charts, or they just … Now, there’s a monster living under the bed and now there’s a real problem.
Jason Pyles: What strikes me about this, Rob, if somebody is new to trading or new listening to The Traders Podcast, they might think, “Oh. Okay. This must be a problem that beginners have.” But, honestly, I think this is even more characteristic of veteran traders like people who’ve been doing this and “should know better” and I say should know better in quotes because this is a very difficult challenge.
Rob Booker: It’s funny you say that because there are … Let’s just divide traders arbitrarily, not arbitrarily, but let’s just for the purpose of this episode divide traders into three categories. Category one, brand new and reasonably successful because they’re brand new, small percentage of traders, and I would say brand new traders represent … Let’s just even say that it represents 15% of the total universe of people that are attempting to trade. And then on the far end, opposite end of the spectrum, there are veteran experienced traders having success and we’ll go on the high end and we’ll say that’s 10%.
Now, there’s a 25% made up from 15% of just absolute beginners experiencing all the thrills and the highs and seeing the chart for the first time and entering their first trades and experiencing success and then following the rules because at the beginning, you follow the rules and you get the right to be creative after you’ve learned to follow the rules and your platform. Then there’s the experienced traders making money and that’s another 10%. There’s this middle ground. Imagine this big middle section of traders. 75% of all traders are experienced traders who are struggling with self-destructiveness, all of them.
Jason Pyles: Wow.
Rob Booker: I’m sure that this episode resonates with almost every listener, almost every person listening.
Jason Pyles: Well, let me ask you a question about that, Rob. Because as people know, I’m not a trader but I can see parallels in my life with this kind of thing. Is it a matter of pride, I mean I don’t want to say pride, but we just think we can handle it. What is that? We just think, “Oh, I’m different from everybody else. I’m above this. I can handle this.” I don’t know.
Rob Booker: Yeah, right. Well, let’s read a section from Alexander Elder’s book Trading for a Living, which is the book that didn’t start it all with me. It was Thomas Dorsey’s Point and Figure Charting that started it all for me. This book, Trading for a Living by Alexander Elder, was the first book that I bought when I opened my first trading account. Page 27, “Controlling self-destructiveness. Most people go through life making the same mistakes at 60 that they made at 20. Others structure their lives to succeed in one area while acting out internal conflicts in another.” That is so true, Jason.
Jason Pyles: Yes.
Rob Booker: A lot of successful people in business or life or their career will come into trading, and they’ll be completely disciplined and successful in their business in other life and then they’ll just go bananas in the world of trading. “Very few people grow out of their problems. You need to be aware of your tendency to sabotage yourself. Stop blaming your loses on bad luck or on others and take responsibility for the results. Keep a diary with reasons for entering and exiting your trades. Look for repetitive patterns of success and failure. Those who do not learn from the past are condemned to repeat it.”
Now, I don’t agree with everything he’s saying but this wakes me up. This is a call to action and this next part is where I’m going. You need a psychological safety net the way mountain climbers need their survival gear and then that just shocks me back into consciousness. Living in the middle 75% of experienced but unsuccessful traders as I have done at times in the past, dip back into that world, it reminds me how important it is to have a safety net in the same way a mountain climber has survival gear.
Just like you said, we have this go it alone mentality. It’s so brilliant what you said that we want to climb without a safety net because that gratifies our vanity and it makes us feel stronger, more capable and it’s embarrassing. It’s one thing to be a climber and have a safety net. As a trader, what I would say is if trading were climbing, what I would want isn’t a safety net. I would want a whole bunch of motherly type of women giving me sandwiches and I’d want multicolored lines stretching all over the mountain, and I’d want soothing music playing to keep me calm. I would just be like that. You have to go overboard on how embarrassing it would be for someone to see how much help you are allowing yourself to get.
There’s 10% of successful veteran traders. They’re not like John Wayne out on the open plane drinking coffee grounds straight with no water, shooting themselves in the foot if a snake bites them. That is not the image of the successful veteran trader. The image of the successful veteran trader is someone who is surrounded by people who fire them from trading inside of an institution if they break their money management rules or someone who has a group of people who they depend upon to keep them straight and keep them because they know what it was like to feel like you’re trying to go it alone.
The image of the lone cowboy out there getting it all done, or cowgirl, or whatever, getting it all done and going it alone and facing danger on their own and looking under the bed by themselves without calling their friend, those people are the failures. Those are the ones not doing well.
Jason Pyles: That’s right. Watch any horror film and people always go off by themselves and those people die. [inaudible 00:12:17].
Rob Booker: And a group of teenage kids are excited to go do disgusting things to each other and drugs in the woods and they split up.
Jason Pyles: Yeah, exactly.
Rob Booker: Then they get killed off one by one.
Jason Pyles: Yup, that’s how it happens. Yes.
Rob Booker: All right. Anyway, I just wanted to bring it up and I think people are smart enough and mature enough that are traders that they know the things they need to place around them. Other people, they need to be transparent about their performance with someone they trust. They need to have written rules for money management. They need to keep, I wouldn’t say a diary about every single trade, but you need to keep a record of and a recording of the mistakes, the big mistakes that those are the ones you want to just sear those into your memory that you never want to repeat that again.
Jason Pyles: Yes.
Rob Booker: Any other thoughts that you would have for someone out there seeking to cure their self-destructiveness?
Jason Pyles: Yeah. Honestly, for me, I’m a rewards-based motivated type of person. Once you slate out what your objective is, then I would think of some sort of reward that would I guess encourage me to get to that next goal before I bail out and crash and burn. There’s got to be a caret for me personally to help me get through and stay disciplined.
Rob Booker: I really appreciate what you’ve said. That deserves some more conversation at some point in time on the podcast.
Jason Pyles: Thanks. Let’s do that.
Rob Booker: All right. When we come back, friends, we’re going to talk about bitcoin in our next episode and we’re going to reach deep into the mailbag if we have some and we’re going to hear from you, the listeners. I always love that kind of stuff. Jason, while they’re waiting for the next Traders Podcast to come out, let’s just say what other podcasts might they want to listen to?
Jason Pyles: Well, let’s see. If they like movies, if you want to learn more about horror movies and people who go off by themselves and get killed, then you have horrormoviepodcast.com. Then if you just like new movies of all genres, moviepodcastweekly.com.
Rob Booker: Excellent. I’m Rob Booker. That’s Jason Pyles, the producer, and you’ve been listening to The Traders Podcast.

Direct download: RB565.mp3
Category:Podcast Episodes -- posted at: 8:35am EDT

We understand. We like excitement, too. But trust us when we tell you that your trading account is not the place to look for thrills. In Episode 564 of The Traders Podcast, your hosts Rob Booker and the producer Jason Pyles warn that when your tried and true trading strategy becomes boring for you and you’re tempted to mix it up, remain steady and safe. Look for roller coasters and drama elsewhere in life, but not in trading.

Also in this episode we discuss our newly opened comments section. We hope you will get involved in our community! 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:
http://moviepodcast.network/ – A group of eight movie-related podcasts covering new movie releases and many genres: sci-fi, horror, western, etc.


Full Episode Transcript:

Rob Booker: All right, Jason, I have a special announcement, which we alluded to on the previous episode.
Jason: Okay. Yeah, tell it.
Rob Booker: The comments section of Traders Podcast.com is fixed. That means that hundreds of comments that were previously not visible on the blog and on the episodes are now visible and you can go in there and just argue with your friends right on the episodes.
Jason: Right. That’s right. That’s what we do. We tend to sow seeds of discussion, right?
Rob Booker: That’s right. Exactly. And we ran a contest recently, and I think it came in episode 559, and we said, “Hey listen. Go to the episode. Leave a comment and we’ll give an Amazon gift certificate to one of the commenters.” And we’re ready to announce that winner, because now we can actually see the comments. So, I’m going to read you a few of these comments. You ready for some of these?
Jason: I’m ready. Let’s do this.
Rob Booker: Desiree writes, I think the idea of a live stream of people is great. You guys are awesome together. I love listening. I listened all the way through and always do. I thought that was a really sweet comment.
Jason: Yeah, that’s nice, because a lot of people shut off a podcast like three fourths of the way through, but it’s amazing she goes all the way to the end.
Rob Booker: I heard that the new version of analytics for Apple podcasts is going to include the ability to see how far into each episode people are listening.
Jason: Okay.
Rob Booker: Yeah, I’m really looking forward to that. Scott writes, Jason’s rules for movies sounds legit. That live trading idea is something Myfxbook or Fundseeder should jump on. The top ranked traders on Myfxbook will be given the option of live streaming their trading. Those top ranked traders would be compensated for sharing their live trading and compensation would come from traders who paid to view the live trading streams.
Jason: That’s kind of brilliant, actually.
Rob Booker: Subscribers would be given a preview for each top trader to let them know how they trade. Price action, Fibonaccis, etc., swing, day trading, et cetera. What a wonderful comment.
Jason: Yeah, I like that one.
Rob Booker: This one comes in from Rohan. It just made me think of the Lord of the Rings.
Jason: Yeah, me too, I was just thinking that too. Like, wow, this is serious.
Rob Booker: I wonder if that woman that Aragorn, I wonder if that woman that he spurned or didn’t marry, I wonder if she ever found anybody she fell in love with. Maybe she fell in love with a hobbit.
Jason: Maybe, I bet. She was a keeper, I think.
Rob Booker: She was as keeper, yeah, exactly. Okay. Plus, her dad wasn’t a zombie anymore.
Jason: Yeah, that helps. That helps.
Rob Booker: Rohan says hi. Just listened to the episode. Rohan here, from Jamaica. Welcome back guys. I didn’t enjoy this episode as much as some of your previous ones, but just wanted to give a shout out and put my application in the hopes of winning that gift card. Now, points for being honest.
Jason: Right, right. Because, that was that one episode where we were just kind of talking about nothing sometime, yeah, I remember. I remember it.
Rob Booker: But…
Jason: It’s fun.
Rob Booker: Andy says best. Random. Episode. Ever. That’s great. So, you either love that episode, or you hate that episode. Lynn says, sorry, I wouldn’t like a trading reality show and I heard this from a bunch of people on the Twitter and on Facebook and a bunch of other places. Some people just said, “No, that’s a terrible idea.” I don’t want to get confused by other strategies, I don’t want to watch other people do it. I thought, fair enough, that’s fair enough, and then for someone who’s purely interested in making money as a trader, I agree. Watching a show of people trading other strategies would only mess you up.
Jason: Right. It reminds me of watching golf in a way. Some people find value in it, but I could see where some people would be like, “Oh wait. I’m overthinking my swing now.”
Rob Booker: What if the golfers, though, could run after each other and hit each other with the clubs?
Jason: Now that’s hilarious. That’s almost as funny as mascot fights.
Rob Booker: Exactly. That’s what I’m talking about for the show.
Jason: Right.
Rob Booker: Ivan says, very interesting topic. It seems a difficult choice. I’d watch it, something like poker on ESPN, but at the same time, may become so hooked on it that it could be counter productive for my work. Keep up the good work guys. Peter says, great podcast. Even more fun when they’re a little random. You mentioned the shotgun and then you think of an analogy, which is what you tend to do a lot. I recently started to go clay pigeon shooting, something I’ve always wanted to try. Not blowing my own trumpet, but was a natural when having lessons. Hitting roughly 8% of the clays, like my first few months of trading, the more I learned and progressed and a keen urge to get better, the worse I got. Yep, that was my trading too. You just go the same trap where you know the direction, the angle and the speed, but what’s this, an unexpected win? Oh, I missed the clay pigeon.
Was there some unexpected trading news? This is a good comment, I like this. Okay, I’ve got this now, I can compensate for the wind direction and just shoot below the target. The wind didn’t behave as suspected and calculated. I traded what I knew and I took into consideration what might happen. I watched the news, I took into consideration all the stuff and I missed again. So, I bought my own gun, and in the end, had it customized just for me. In other words, I changed my changing trading strategy from what worked to customization. So then I went out to shoot with my shiny, new customized 12 Bore, my result was hitting about 20%. I did this with my trading and it went downhill. Now when I go shooting, I learn again from the beginning how to shoot, same with my trading. I go back to the basics and I do what works. Pete from the UK.
Jason: Wow, that was-
Rob Booker: That was a lot of really great wisdom.
Jason: … and profound, really, yeah, excellent Pete.
Rob Booker: Peter, you’re the winner of the gift card. Peter, would you, well, I don’t know, maybe I can even reach out to Peter. I can’t reach out to Peter. I got to find the comments and … Peter, you’re the winner. Write to me. Write to us. Send me a text to 304.281.8332 and give me your email address and I’ll send you back an Amazon gift certificate. Peter, thanks for listening to the show, that was awesome. We’ll do a new contest, and we will … one of the listeners of this episode who leaves a comment on this episode, just leave a question for the show and we’ll read your question on the air and respond to it and let you know what we think and give you an answer, and we’ll give you an Amazon gift card as well, to one of those commenters.
About that, I want to just jump on this point that Peter made and we can close out with that, Jason.
Jason: Mm-hmm, okay.
Rob Booker: He’s got this point that when you deviate from the basics everything starts to go wrong. But the problem is sometimes the basics are boring. How do you deal with that?
Jason: Well, honestly, for me, it seems like in that case you wouldn’t want your whole world to revolve around trading in the first place. If that’s the only fulfillment you’re getting out of life, then maybe you should add some other things into your life. Trading doesn’t have to be all consuming and life consuming, and so, that’s kind of where I go. I mean, it’s like, yeah, that’s boring, but I’ll do what I need to do and then move on to the next thing. That’s my two cents.
Rob Booker: All right, well, we look forward to hearing your comments on this episode. Go to Traders Podcast.com. Leave a comment on this episode and leave a question for the show, we’ll read it on the air. I’m Rob Booker, that’s Jason Pyles, the producer, and you’re listening to the Traders Podcast.
Jason: Perfect.

Direct download: RB564.mp3
Category:Podcast Episodes -- posted at: 11:26am EDT

Sometimes the most valuable truths about trading are those we don’t want to hear … or accept. In Episode 563 of The Traders Podcast, your hosts Rob Booker and the producer Jason Pyles talk about the importance of focusing on how to reduce your risk, not making money. If you manage your risk, the money will accrue over time. This is not very sexy news for those who want to “get rich quick” and become overnight successes, but those are the realities of trading.

Also in this episode, we receive a question from Dave in Columbus, Ohio, who asks about hedge funds and why so many have closed this year after being so profitable for so long. Dave wants to know why they aren’t profitable anymore. Join us, and we’ll discuss it!

Thanks for listening to The Traders Podcast. We release new episodes every Tuesday and Thursday. Subscribe free in iTunes and leave us a review. Thank you!

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

Jason’s movie podcasts:
http://moviepodcast.network/ – A group of eight movie-related podcasts covering new movie releases and many genres: sci-fi, horror, western, etc.


Full Episode Transcript:

Jason Pyles: Hey, Rob. One of my favorite things on The Traders Podcast and something I really missed was getting questions from the listeners because I find that these episodes where we’re discussing the listener’s thoughts and concerns are some of the most insightful, for me at least.
Rob Booker: I love it, and I love the episodes where we get comments inside of the show notes, so wait a minute, are you saying you have a question?
Jason Pyles: Yeah. Well, there’s a question here that comes from Dave from Columbus.
Rob Booker: Dave from Columbus.
Jason Pyles: Yeah, and Dave says, “Home of the greatest trader in history, Scott Welsh.”
Rob Booker: Not anymore. Scott lives in Florida now.
Jason Pyles: That’s funny. He says, “Hey, Rob. I thought that this story might interest you. Apparently several hedge funds have closed this year due to poor performance. I’m curious to hear why you think all these guys who have been elite for so long can’t seem to turn a profit in the markets anymore.”
Rob Booker: Well, fascinating. Yeah. There have been, especially in a year where the S&P 500 is way up, the stock market’s way up, it is interesting that hedge funds are down. Like a lot of hedge funds are down. Now not all of them are down, but it is interesting. Jason, it is a quandary wrapped in a paradox.
Jason Pyles: Okay. A conundrum within a donut. Yes.
Rob Booker: It’s a shroud of uncertainty wrapped in creamy filling.
Jason Pyles: Yes. Right.
Rob Booker: The answer is most of these hedge funds are driven by performance, meaning they are constantly striving for gains, and most of these hedge funds were started, I hate to be so crass, but the reason they started was because someone wanted to make a lot of money. If you just think about it for five seconds, if you build a set of relationships in the world of finance, and then you have the potential to go out on your own and raise 100 million dollars, you’re going to do it. It’s just going to happen. Finance and arrogance go hand in hand. If you have had one good year, you suddenly think that you’re going to have 30 good years. This business is terribly difficult.
The other part about it is that hedge funds, they are restricted by what they can do. Once you put together an offering document and you say that this is what you’re going to do. You’re going to trade Norwegian bonds against Afghani currency or whatever, and you’ve specialized in a method for doing that, then you’re kind of stuck. That’s the method you’re going to do. That’s the crazy thing is that once you’re stuck in that method, if that method stops working or goes through a difficult period of time, then you’re screwed. I mean, that’s it. A lot of these funds are hampered by the fact that they promise that that’s what they were going to be doing.
You kind of get the feeling that these people shouldn’t be managing money, but it’s not about getting a return. It’s about getting more money to manage. When you manage money as a hedge fund, automatically you earn every year a percentage of the assets under management, generally 1 to 2% automatically. If you raise 100 million dollars, you get 2 million dollars every year just for having the 100 million, whether or not you make any money for any of those people. To me, also the incentive to make any money, then it goes down. I don’t know. I just think it’s a cycle that spirals out of control. You start because you want to make money, and then you’re stuck with a strategy that might not be working, and then you panic, and then investors want quarterly performance. You’re chasing after performance instead of chasing after actual processes.
Instead of focusing on what works, you’re trying to quickly make a bunch of money. It’s such a vicious cycle. I don’t know how anybody makes money managing money professionally. I don’t know how anybody does it. The largest hedge fund in the world is Bridgewater Associates, run by Ray Dalio, which we’ve talked about him a lot. Ray is the most successful hedge fund in history, and it’s the largest hedge fund in history. The whole thing is basically fully automated. The whole thing is automated because it’s so hard to make money, but they find strategies that work, and then they program them, and then they run them automatically. I think a lot of hedge funds are run by people who want to be the one that pushes the buttons. They’re constrained by the strategies they use. If they’ve had a somewhat okay year, they want to make it better so they don’t lose their investors. It’s a cycle that just spirals out of control
Jason Pyles: Wow. It sounds difficult. If we were to analyze that, though Rob, the reason that happens is because, I don’t want to say inner principles, but the priorities of how they’re going about making money, that shifts, and they’re not focusing on the true principles that they know. They’re just focusing on desperation and emotion.
Rob Booker: Yeah, right.
Jason Pyles: Interesting.
Rob Booker: Yeah. Agreed. I mean, if you want to turn this into lessons for us as traders, you’d say be flexible enough to achieve your goals. Don’t constrain yourself by one strategy, although you might have one strategy that you’re best at, one pattern that you recognize that you do over and over. You want to remain flexible. The goal is not necessarily even to make money. The goal is to manage risk. The goal is to reduce risk. The goal is to never get yourself into huge amounts of trouble, and then let the money take care of itself, as opposed to being a hedge fund who believes that the goal is making as much money as possible, all risk be damned.
Jason Pyles: Right, so-
Rob Booker: Yeah, go ahead.
Jason Pyles: You said this before. Really what I’m starting to take away now in trading is that being a successful trader isn’t about making money, it’s about not losing money, right?
Rob Booker: Yes.
Jason Pyles: I love that. [crosstalk 00:06:59]
Rob Booker: Yes. There’s only one rule of trading. Never let a small loss become an unmanageable monster loss. That is the only rule. If you abide by that only rule and you don’t lose money, you will survive, and if you survive, you will eventually come across a trade, a strategy, or a method, or a situation where you have the opportunity to make money. There’s a balancing act. There’s this tension that exists between how badly do I want to try to make a lot of money versus how badly do I want to stay in the game for a long time. This is the same tension that exists in all areas of our lives. I want an exciting relationship, but I don’t want to blow my relationship. I want to drive fast in my car, but I don’t want to die. I want to have as many really fun technology gadgets in my life without going broke. What most of our world is centered on is the risk taking part of that.
We idolize and put up on a pedestal all of the people that have taken huge risks and then succeeded. We read news stories about them. We live in a world that sensationalizes and makes it seem easier than it is to accomplish and have extraordinary success having taken huge risk when day-to-day grinding it out and reducing risk is boring and unenjoyable, but it’s the way that you get from here to there. It’s the way that spectacular successes really are made. You put yourself in a position to have spectacular success when you have lasted through all of the difficult experiences in the world of trading without losing all of your money. That’s how you get to the point where you can take that big trade.
So many people, they just want the big trade. They just want it now. They don’t want to put the work in, and they don’t want to go through seven years. If I tell somebody, “Okay, it takes seven years to become truly successful at trading,” they’ll just go on to the next podcast. They’ll just go on to the next teacher. They’ll just go listen to the next interview with somebody. They’ll just think, where’s the shortcut? The Tim Ferriss 4-Hour Workweek spawned an entire industry of how do I get the same result that I don’t have to do the work? What they forget is you can trick your body into growing muscle quickly. You can shortcut it. The trade-off is you’re going to take risks with your health, and you’re never going to grow the mental stamina along with the physical growth. That’s what everybody seems to be interested in these days is how do I get the result, how do I pump whatever it is up by taking shortcuts, and then you don’t mature as an individual during that process at all, and you lose all of it.
I’m not trying to be old school. I’m just trying to be real school. There isn’t a shortcut. There are no shortcuts without consequences. The shortcuts exist, and I don’t hate Tim Ferriss. I just think that a lot of this advice is really, really problematic because it sells well. How do I get from here to there more quickly, how do I take a pill, how do I take a little bit … I mean, there’s a whole industry. Do you know this Jason? There’s a whole industry, like a little cottage industry of selling small doses of LSD in Silicon Valley to programmers.
Jason Pyles: Whoa. No. I didn’t know about this.
Rob Booker: You don’t know about microdosing?
Jason Pyles: No, no. I’m out of touch with the cool kids and what they’re doing.
Rob Booker: I hate my job. I’m not happy at work, so I microdose, and it puts me in a state of mind so that I can get my work done. People microdose. It is like an erection for the happiness portion of your brain. I’m just going to take a pill and that’s going to happen.
Jason Pyles: I do that too, but I do it with Snicker bars in the afternoon.
Rob Booker: Exactly. Yeah. Exactly. All right, fine. Now, how far do people take it? This is exactly the thing is that maturing as an individual says, I’m going to face the reality that this situation isn’t working, and I’m going to work through the root causes of the problem. Whereas the new shortcut industry is how do I ignore the root cause of the problem and treat the symptoms?
Jason Pyles: Mm-hmm (affirmative). Yeah.
Rob Booker: In the world of trading, that’s really dangerous. How do I shortcut everything, learn a pattern? Can I make a million dollars tomorrow? No. However, the journey is enjoyable. That’s the best whole thing.
Jason Pyles: Yeah. Yeah. No. Wow, that’s so interesting. It reminds me of The Karate Kid in a way. Do you remember that movie from 1984? It’s one of my favorites. Daniel just wanted those beliefs to stop. He just wanted a fast solution. Mr. Miyagi started out with having him stay on the floor. You know what I mean?
Rob Booker: Yeah.
Jason Pyles: It was a long progression to get him where he ultimately wanted to be.
Rob Booker: Yeah. Favorite line from that movie, Jason?
Jason Pyles: The one where he talks about being on the right side of the road as [crosstalk 00:12:09]
Rob Booker: “Squish like grape.”
Jason Pyles: Yeah. “The middle of squish like grape.”
Rob Booker: Yeah. That’s my favorite too. I also never forget the, “Put him in a body bag.”
Jason Pyles: Yeah, that’s hilarious, and “Sweep the leg.” Yeah.
Rob Booker: “Sweep the leg.” Oh my gosh. All right. Well, to our dear listeners, we have a special announcement here at the end of the show. We ran a contest on the comments section of the podcast. Two things have happened. We have a winner, which we will announce in the next episode, and we also fixed the blog so that all of your content, all of your comments, are now visible on the blog. You can talk to each other and comment to each other, and all the comments are now visible on each episode. Go to traderspodcast.com, leave a comment on your favorite episode, and, Jason, we’ll do it again. We’re going to announce a winner next time, but we’ll start running the contest again for the next few episodes, and we’ll give an Amazon gift certificate to the comment or question that comes in that we like the most.
Jason Pyles: Yeah. I like that. That’s fun.
Rob Booker: Love you all, everybody. Thanks for listening. I’m Rob Booker and on behalf on our esteemed producer, Jason Pyles, you’re listening to The Traders Podcast.

Direct download: TTP563.mp3
Category:Podcast Episodes -- posted at: 8:58am EDT

Do you use the news to make your trading decisions? Or perhaps you’ve been wondering if you should learn more about trading fundamentals in relation to economic news and news in general. In Episode 562 of The Traders Podcast, your hosts Rob Booker and the producer Jason Pyles discuss trading off the news cycles and how economic fears and hopes can influence the markets. Join us to learn more!

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

Jason’s movie podcasts:
http://moviepodcast.network/ – A group of eight movie-related podcasts covering new movie releases and many genres: sci-fi, horror, western, etc.


Full Episode Transcript:

Rob: I call this meeting to order.

Jason: All right.

Rob: The Traders Podcast Episode 562, I believe.

Jason: I think so. It might be right.

Rob: I’m not quite sure, but I believe it’s 562 and want to welcome our new listeners to the podcast. If you want to start with the Traders podcast and you’re brand new to the show, might I recommend episode one which you can find at traderspodcast.com. And if you like the show, we’d love to hear from you and you can leave a comment on the episode post at traderspodcast.com. Just leave a comment. We’ll maybe read it on the air, answer your question. That kind of thing.

Okay, let me ask you a question Jason. Nothing in mind, I just want to ask you, right now in the United States, as we’re talking and as we’re recording this message, what is the big news?

Jason: Oh, the big news?

Rob: First thing that comes to mind.

Jason: Presently the NFL people kneeling and people standing for the National Anthem.

Rob: Okay, it was easy. You came up with it. It rolled right off the tongue. It didn’t take you a long time to think about it. Now, there are some days and times when answering that question is a little bit more difficult. There are quiet news cycles, and during those quiet news cycles, there really isn’t a major thing. You might have said recently, Oh well it’s Hurricane Irma or Hurricane Harvey or this devastation in Puerto Rico,’ from I think it was Maria. Whatever it was. But from time to time, there’s no major news but usually you can say, with absolute certainty, this is what the major thing that I’m hearing about in the news is. And today on the podcast, what I’d like to do is address how that relates to the world of trading, because there are traders out there who announce that fundamentals or economic news or just news in general, is the major driver of price action. And because it’s the major driver of price action, that it is the sole thing that someone should focus upon.

Now hey listen, I’m no one to argue with focus and I think that’s a great idea. And I think that if you do want to focus on fundamentals and you want to make that a strategy, then focus on it exclusively and do great at that. And if you want to do that, focus on watching for the release of the economic news reports that come out and focus on learning how to trade short term strategies that are in line with whatever numbers were released or the surprise, or I don’t know, whatever else.

Jason: Is it okay if I have three different TVs to watch?

Rob: Yes.

Jason: Okay, awesome.

Rob: There were these commercials about trading back in the day when Yahoo was a thing. And I wish I could find this commercial online, but this guy wakes up and there’s a TV with Yahoo Finance on it. And then he walks in the kitchen, there’s a TV or monitor with Yahoo Finance on it. Everywhere he goes in the house, he’s looking at economic news or something and everywhere he goes, and I thought, Oh, that guy’s got the life.

Jason: Right.

Rob: Or it was like an E Trade commercial but I really think it was Yahoo. But anyway, I was like, Yeah, that’s the best ever. That’s amazing. And now I want to get away from that stuff and I just want to sit and read and stuff. Okay, but yes you can have three TVs and whatever else or you can get a Bloomberg terminal and focus on the news and economics and diving really deep into that one subject area. But I want to just speak about a particular way that our listeners can focus on the news and use it to benefit their trading or to avoid costly mistakes or big problems.

Jason: Okay.

Rob: So the other big economic and political news that’s going on right now is that there is a major conflict politically between North Korea and the United States.

Jason: Yes.

Rob: And it seems to have escalated into some pretty significant tension and that tension has resulted in the financial markets gyrating more wildly than usually and risk assets like the stock market’s dropping, and safe haven stuff like the Japanese yen, rising. And it really as of the time of this recording, it’s still really in its infant stages and we’re not seeing a lot of that yet. And by the time you listen to this episode, maybe a lot of this has already played out. But the lessons that I want to talk about right now are still the same and still going to be applicable. And here they are.

The question you want to ask at a time like this is what is the major political or news related influence right now? What is influencing the collective consciousness of the nation wherever you live? And in the United States right now, it’s the National Football Association and kneeling or standing during the National Anthem. And then you’re gonna ask yourself, does that inspire fear or hope or indifference in the financial markets? What would your opinion about that be Jason?

Jason: I think that would be indifference for that particular subject.

Rob: Right, it’s indifference. And during that time, if that’s the only major economic news or whatever news, if that’s the only thing, then there is no reason to incorporate economic fundamentals in your analysis. And I know some of you listening disagree with me. But I’m talking about the big moves. Of course, if there’s a consumer price information release that day you could use that for short term trading or whatever. I’m speaking about something bigger and that has more influence.

Now we’ll move on to the North Korea. Do you think that the North Korean news which is capturing the fearful imaginations of so many people, do you think that inspires fear, hope or indifference in the financial markets?

Jason: Well, it seems fear, but my understanding of trading is, traders can usually benefit from other people’s sorrow and pain. Is that right Rob?

Rob: That can be true, yeah. So let’s talk about that. That’s a great segue way into what we’re doing here. Okay, perfect. Because the North Korea situation is so dominant and its on the front pages, and because it does lead to fear, what we then look at is we have some options and we want to be careful. Number one, we don’t want to be going long or buying lots of risk-related assets. We don’t want to go long, lots of technology stocks. We don’t want to go long, the broad financial markets. We don’t want to do that immediately because that fear is pushing the markets lower and causing people to, in other words, worry and that worry is expressing itself through declining prices. And what you can do in a situation like that, as that news dominates and as that news escalates and as that news sort of just circles on top of each other and comes back around on itself, you can basically turn that into a trade that lasts more than one day.

Last week, I shorted the Euro Japanese yen, and I did that very publicly and I did that on Twitter and on my big telegram channel that everybody follows me on, and in my members area and whatever else, and I shorted the Euro Japanese yen and it dropped significantly. And the reason that I did it was primarily economic or news related. This news was gathering steam, hitting the front pages and the only thing that it could result in is fear. Now I could have done what you just mentioned, Jason. In a situation where there’s a lot of fear, like a financial crisis or whatever else, I can wait for that fear to dissipate or in another words, I can use that fear as an opportunity to buy financial instruments that I have wanted to buy for a while and I can buy them on sale after they’ve dropped.

Jason: Yes.

Rob: I can use every drop of information to sort of enter the market and collect some of this asset that I know I really like.

Jason: That’s neat.

Rob: And you could do either one of those two things. I’ll give you another example. So when Donald Trump was elected president, I know this sounds like I’m just bragging but maybe I am a little bit, but I said back in March of 2016, there’s no way he loses. He’s absolutely gonna win the presidency and I remember my mom called me. She goes, Oh that’s so great. I’m so glad. I really hope you’re right. And I was like, You’re a Donald Trump supporter? I was like, What? What? I don’t understand this but okay. And a lot of people were really happy with me because I said that, and a lot of people really hated me because I said that. I think all told that week, 150,000 people heard me say that, that week.

Jason: Yeah, it’s not like you were making a value judgment, right? You were just making a prediction. Right.

Rob: Right. Yeah. And then, I made a value judgment and said, When he wins, the dollar will fall and gold will rise within 12 months, gold will rise to $2,000. Was totally right about the election and totally wrong about the result. Totally wrong about that. He got elected and all of a sudden his promise to put a ton of money into infrastructure and possibly lower taxes, just pushed the dollar up and be protectionist, pushed the dollar up and the financial markets just went crazy. They loved it and then gold fell. And I was wrong about all of those things.

But, okay, that doesn’t matter, that’s not the most important part. The most important part of it is, is that I could either have said, All right, what I’m going to do is, I’m going to go ahead and I’m gonna just trade this sentiment. I’m going to go with this sentiment. I might not have thought it was going to happen but I’m gonna view it, it’s reality. It is what is happening and so I’m gonna go along with it. I’m just gonna basically ride this thing all the way up. I’m gonna just go with it because the news is dominating, it’s causing this momentum and I’m going to ride it.

Or, just like you said, everybody else’s euphoria could be an opportunity for me to get in and trade against them when the time is right. And so the other way to play it was, to wait until the end of last year when the dollar sort of topped out after a giant run upward, the dollar kind of topped out and then started to fall. And I could have waited for the euphoria to settle down and dissipate and I could have used this rally in the dollar for example, to start shorting the dollar every time it moved up let’s say 5%. Just like you said, I could basically fade euphoria or fade fear. Go the opposite direction that the entire crowd is going and use that as an opportunity.

Jason: Yes.

Rob: And I think that’s the real way that you play the news or whatever you want to call it. That’s the way you do it is you either take the sentiment as it is right now, you say, Does that inspire fear or hope? And then you trade that hope or fear. Or you say, That’s not gonna last forever. I’m gonna start fading that or trading against it and building a position. And those are some of the biggest trades that you can ever take in your whole life.

Jason: Yeah, because it’s not a matter of is it going to move the other way. You know that that’s gonna happen, that’s inevitable. But the question is, when, right? So that’s a timing matter.

Rob: Right.

Jason: Gotcha.

Rob: Yeah, and because most people are pretty good at picking direction, because these are obvious things that nothing can go up forever and any euphoria associated with Donald Trump’s election or any fear associated with the North Korea situation dissipates over time, because it’s just a reality, that will eventually turn around. The real question is how do you build a position slowly and surely without losing your shirt and keeping your losses down. How do you build a position over time and can you become patient enough? Can you do that? Are you able to be patient enough to build that position? That’s the real question.

Jason: Yes, yes. Tricky.

Rob: So in other words, I don’t know what’s happening right now in the markets, but I’m long the yen right now anyway, as most of the yen pairs, the Euro yen, the Aussie yen and the stock market, they’re all up. THey’ve all gone up and so as they’ve gone up, I’ve wanted to basically fade that euphoria and this North Korea situation is sort of the catalyst that turns all that stuff around. That one news reporter, or one news event, or one news cycle ends and then another thing picks it up and carries it in the other direction. And that seems to be or appears to be what might be happening now. And so I’m kind of hoping and maybe I’ll get lucky, that I’m gonna be able to catch the beginning stages of something that maybe lasts for a long time and travels in the opposite direction. Maybe. If not, I’ll just stop out and not worry about it.

Jason: Yeah. Set your stop losses, right Rob?

Rob: Yeah, yeah. Maybe you’re right, maybe you’re wrong. But if you’re wrong, just get out and just go back in later on with whatever. Exactly.

Jason: Yeah, it’s simple.

Rob: Where can I go to hear more about movies?

Jason: Well, you could go to MoviePodcast.Network. We have eight different shows there and it talks about all different kinds of movies, like sci-fi movies, westerns, horror movies, new stuff that’s in theaters. So yeah, check it out, MoviePodcast.Network.

Rob: That sounds amazing. As of the time that we are discussing all of this stuff, what are you going to see this weekend?

Jason: Oh yes, American Made, the new Tom Cruise movie. Have you seen trailers for that?

Rob: Oh yeah, yeah. He’s like a crazy wild adventure guy.

Jason: Yeah, but once again, on an airplane. It’s like you can’t have a Tom Cruise movie where he’s not flying in airplanes improperly.

Rob: Did you like the Jack Reacher movies?

Jason: I liked the first one. I did not like the second one.

Rob: Yeah, okay agreed. I didn’t even get through the second one.

Jason: Yeah, yeah. Agreed. I know what you mean. Yes. The first one’s very good though and it was set in Pittsburgh, our old stomping grounds.

Rob: Oh. Oh right.

Jason: Thereabouts, right?

Rob: Yeah, okay.

Jason: That was kind of cool.

Rob: All right, well, Jason thanks for that. And thanks for listening our dear friends. You can go to traderspodcast.com, comment on the episode. Don’t forget in iTunes, we’d love it if you’d click that subscribe button in iTunes, that helps us out. That helps the show. That helps us all, helps us all, helps all people of all walks of life. Not really, just helps us. Just me and Jason.

Jason: That’s right.

Rob: Hopefully that’s worth it still the same. We love you all. We’ll see you next time. Bye for now.

Direct download: TTP562.mp3
Category:Podcast Episodes -- posted at: 10:49am EDT

Peter Drucker once said we greatly overestimate what we can do in one year, but we greatly underestimate what is possible for us in five years. In Episode 561 of The Traders Podcast, your hosts Rob Booker and the producer Jason Pyles discuss trading goals, namely, what they could be versus what they should be. Often a trader’s goal-setting has to do with bottom-line numbers, as opposed to goals that help the trader develop characteristics over time to accomplish those goals. Join us to hear more!

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: Mr. Pyles.

Jason Pyles: Rob Booker.

Rob Booker: Peter Drucker once said, People often over estimate what they can accomplish in one year, but they greatly underestimate what they could accomplish in five years. Your thoughts?

Jason Pyles: Oh my, when I hear this quote it’s a little overwhelming for me because I’m like, okay, how am I supposed to know? If I have trouble grasping the smaller amount of time, how could I even have an idea of what to shoot for in the larger amount of time?

Rob Booker: So, where do you fall on the subject of, the spectrum of goal setting then?

Jason Pyles: Well, that’s a good question. I get the concept that where if you work backwards, reverse engineer your big goal, then you can break it down and find out what the smaller thing should be, what you should do next. Yeah, I’m a big fan of goal setting actually. My biggest mistake has always been I try to make too many goals, too many things to accomplish. For me it’s like pick one or two things and focus on those, accomplish those, and move on to the next thing.

Rob Booker: Oh, that’s interesting. I really like that. I was thinking this morning about my own goals related to trading and what those goals could or should be. I realize that so often in the world of trading, what we do is we set goals that are largely financial in nature. We set a goal to make a certain amount of money, but we don’t often set goals, or we forget that we should set goals that focus primarily on the things that someone does to make money in the markets. What someone will do is they will set a goal to make $500 a week, but they don’t really set any goals related to the type of person that they’re going to be or the type of schedule that they’re going to keep, or the little things that they do, the incremental things that get you all the way to the goal that you said that you wanted. A little bit of each of those things is really necessary, and as a trader, it’s good to think about what you can and want to accomplish in purely financial terms.

What I thought I’d share today is maybe a little bit of a strategy that has worked for me in the past, and even try to explain how those things are interrelated for a trader in particular. Because as a trader, it’s not going to work if you simply say, I want to make a lot of money and I’m going to use the law of attraction, and suddenly then you’re just suddenly making a bunch of money in the markets. It’s just too difficult. It’s just doesn’t really work.

Jason Pyles: And it’s not really specific, right?

Rob Booker: Yeah. I’ve seen this happen a bunch of times to myself and other people. I’ll set a goal to make a certain amount of money from trading, or just make a certain amount of money, and I’ll assume that it’s from trading and then I’ll make the money from somewhere else. So it’s like, okay, I mean thank you universe. That was great, but I really wanted to learn how to do this trading thing. So let’s say someone out there is listening and they’re relatively new, and maybe even they’re listening and their partner or spouse is listening with them and they’re interested in the financial markets. They don’t really know if it is a scam or if it’s possible. They want to set some goals because setting goals makes it sound like you’re serious.

So here’s a little strategy for goal setting. If you’re brand new to the world of trading then your goal should be to not lose more than a certain amount of money. Your goal should be within a six-month period of time to discover and focus on one particular trading method that you’re going to use somewhat exclusively, whether it’s systematic and robotic or otherwise. Those are the two things that matter so much. When you take Peter Drucker to heart, and I’m sure he was a good man … Well, I don’t know if he was a good man. He could’ve been a complete deviant for all I know. I don’t know anything about the man. I mean some of the stuff was kind of creepy.

Anyway, the point is that he said, Oh well, think about what you can accomplish in five years. Let’s see, if you started thinking about five years, you run into what you said, Jason, that when you’re just starting out as a trader thinking about the five-year thing is ridiculous.

Jason Pyles: Yeah, you’re like, I don’t even know if I want a baby in eight months, right?

Rob Booker: Exactly. Think about all the children we could have in five years. Well, let’s just focus on maybe taking care of the one we have. So you don’t want to have an expansive vision as a trader. Maybe if you’re in some other industry, but as a trader you want to focus at the start on finding and excelling at a system that’s going to require a ton of experimentation and a ton of creativity, and a ton of learning about lots of different things, and diving in and bringing in information from all different kinds of sources and all different places. It’s going to require that.

So you’re going to do a lot, but during that time your goal is to eventually come to love and focus on one system that seems to produce any kind of return, any kind of positive return, even if it’s just a dollar a week, anything that produces a return, positive return. Then the second focus is on not losing more than a certain amount of money within each day, week, or month. Those are the two most important … those are the goals that matter that lead to incremental success.

Jason Pyles: So Rob, I have a question about this, that what you said is just very simple and I love that, actually. But I wonder if somebody kind of new to trading, maybe in their previous work … You spend eight hours at a day job doing whatever it is for eight hours and it’s complex. There are lots of things to do. Do you think that traders get a little bit … They’re a little surprises that, Oh, so all I need to do is A and B, like what you just said? Do you think that sometimes they just feel like they should be doing more and so then they try to do more?

Rob Booker: Yeah, I feel like people are disappointed when they find out they don’t have to do more. There’s this badge of honor of martyrdom that traders, or really everyone kind of has it; I’m doing something difficult. Like the tech used to say, I’m doing the laundry, if you wanted to be called a superhero for having done something really ordinary. I think we want trading to be different and we want it to be exciting, and we want it to be complicated. A lot of people get into trading because they’re interested in the markets, and they’re interested in the markets because it seems like a get rich quick scheme. So they learn everything they can but as soon as it becomes apparent that the primary responsibility is to not lose money, the primary responsibility is not to make money then people just, they lose their interest.

I think one way that people get caught up in the markets is this idea that you can make a lot of money and that’s what inspires … So, it’s the same way that you want to learn everything you can about someone you’re dating in order to get that relationship to the next level, hubba-hubba-hubba, you know. If you realize that that’s never going to happen … yeah, maybe it’s just not going to happen, then your interest in learning their favorite color or favorite flavor of ice cream … then you’re not going to do it anymore. You’re just not as interested.

I think that happens a lot in the world of trading that true love is in a relationship … Listen, what I’m learning in life is that it’s getting through the simple moments and enjoying the companionship when all that other stuff has faded away and some of that passion isn’t the same as it was at the beginning of the relationship, and it’s a friendship and it’s a lot of other things. You want to know more about that person even though you already know everything about that person. I want to get to that stage and getting to that stage requires not blowing it, you know.

Jason Pyles: Right.

Rob Booker: Not blowing it, but the challenge at the beginning of the trading career isn’t that you’re going to become bored with it or it’s going to bad or whatever. The challenge is blowing the whole thing to the high heavens. That’s the challenge and that’s the same with the relationship. In trading, it’s very similar that the goal is to just not blow it. Don’t lie to the other person at the beginning of the relationship. Don’t give them a disease. There’s just things you don’t do, and the same with trading. Don’t blow it. It makes it kind of sad because you want it to be all over the top and crazy and wonderful and amazing, but there are these simple things to do and that’s all you need to do. It’s your only responsibility.

Jason Pyles: Well, as most of the traders out there know, I’m not a currency trader myself. But I will say I can see into the world sometimes, maybe. I think that the reason why perhaps they feel impatient or frustrated is it reminds me exactly of that dating advice you get when you’re single and they’re like, Hey, when you stop looking, that’s when it’s going to happen and you’ll fall in love. Because I feel like we’re saying, Just don’t lose money. Then once people get that and they stop having their hearts set on making money, then they actually do start making money, but we can’t think of that.

Rob Booker: Yeah, right. I mean imagine a movie where the hero of the movie is desperately seeking love, and then in the search for love becomes lonely, and in the search for love hit’s rock bottom, and in the search for love exhausts all the options that they could have thought and runs through everything. Then doesn’t notice, right, the person that works at the record store that’s kind of geeky, and loved them all along and he didn’t really notice it and invested … Anyway, I mean you get the idea that this is what traders do. They go, Oh well, I didn’t know how to use those moving averages. This Fibonacci stuff is amazing, [crosstalk 00:11:06]. They have an affair with Fibonacci and then one day they wake up and the Fibonacci is tying their shoes quietly at the edge of the bed and they’re like, Where are you going? The Fibonacci is like, I just need some space, and then they leave.

Then they’re like, Oh, fudge muffin, and later on by the pool they meet again, or they meet exponential moving average and they’re like, Oh, wow, that’s just what I needed! It’s my rebound. They’re constantly going from one to the next and it’s exhausting. Then they realize that there’s this simple way of doing things that produced a return, and it wasn’t spectacular but it wasn’t for anybody that’s doing well.

I have a friend. His name is Tim Sykes and he’s a penny stock trader. He’s good to his family and he’s good to his students. He’s just … overall he’s a good person. He used to have as really brash persona. Time says to people, he says this all the time, Like start with a small account and you’d be surprised what you can accomplish if you focus. He’s not saying you’re not going to make a lot of money. He’s just saying don’t put your entire focus on that. Learn the pattern. Learn the system. What I say is download a simple robot. Automate your trading and watch the robot trade. Manage the robot. Be an asset manager, and don’t go down the road of all the other crazy things that you can do. Just be a little bit less frantic about trying to achieve success and do one thing, and that is protect your account. Don’t lose money. Don’t have a big loss.

If you can do that, if you can simply cross that hurdle, the stuff that opens up to you as a trader is unbelievable. It’s unbelievable what will happen to you if you simply never allow a significant loss to occur in your account. If you’re constantly paying down your bad trades or cutting off your bad trades, or whatever … Everybody can find a simple strategy that will make some kind of return, but most everyone blows it all because they get too excited. That’s the challenge. Do the things that are incremental. Do the incremental small things well and then just, as a primary responsibility, protect your trading account.

Jason Pyles: Uh-huh (affirmative), I love it.

Rob Booker: Let’s plug the movie podcasts.

Jason Pyles: Sure, yeah. So if people out there are into movies, which I am, then you can listen to our reviews of the new movies that are in theaters at MoviePodcastWeekly.com. If you happen to like horror films, we also have another show called HorrorMoviePodcast.com, which is perfect for Halloween season.

Rob Booker: Brilliant. I love the podcasts, can’t wait.

Jason Pyles: Thank you.

Rob Booker: I might even start listening to the horror movie podcast.

Jason Pyles: You’d be surprised Rob. It’s a lot more analytical than you think.

Rob Booker: Okay, that sounds good. Hey, I watched A Ghost Story, starring Casey Affleck and Rooney Mara.

Jason Pyles: Yeah, so what did you think?

Rob Booker: Okay, my wife was like, What is going on here? [Crosstalk 00:14:19]

Jason Pyles: She’s eating pie for 10 minutes straight, right?

Rob Booker: I loved it.

Jason Pyles: Me too.

Rob Booker: It’s a movie that stayed with me after I watched it.

Jason Pyles: Uh-huh (affirmative), it sure does.

Rob Booker: Which is a defining characteristic of a movie that I know I love.

Jason Pyles: Same, yeah.

Rob Booker: But it’s not … It’s a frustrating movie also.

Jason Pyles: It’s a little bit of an art film, so yeah.

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

Direct download: TTP561.mp3
Category:Podcast Episodes -- posted at: 11:26am EDT

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