Conversations with My Younger Self

Welcome back folks. This is going to be a four part series and right away let me get your expectations in alignment. This first installment or part one is basically one of those commuter episodes going back and forth to work. You can listen to it that way because there's not really anything in this one that's going to be graphic intensive. There's no charts, nothing like that. No market maker secret concepts being revealed on some charts. It's basically a hypothetical conversation with my... my younger self. I get questioned a lot by email if I could go back in time, you know, what would I like to do differently? And I kind of like twisted that whole idea to come up with this perspective. And if I could go back and tell myself what I know now, and this is basically a hypothetical conversation with my younger self. If I could go back to the start of it all, knowing what I know now, said everyone. How many times have you looked at a circumstance in your life, not just in trading, but in anything, every facet of your life, you wish you could go back knowing what you know now. I used to hear my grandparents. say things like that and I was like what? I couldn't relate with it and or to it but being 47 about to turn 48 years old there is a laundry list of things I wish I could go back and change not just in my trading journey, but in all facets of my life. So I shared a bunch of those personal things today on my Twitter feed. If you haven't been over there, you can take a look at that and see my open discussion about many of the frailties in my personal life coming up as a younger man into where I am today. I want to talk a little bit about some of the things that I wish I could go back in time and tell my younger self. Now the way you can use this for yourself is take what I'm saying with a great deal of appreciation because I weathered a lot of storms financially and personally to get to what I know now. You may be a very young person and or an older person just now getting involved in the markets. You're going to have the same growing pains that everyone else has. And some of these things are going to be things you probably read in books, heard other people talk about. But I'm going to give you my personal spin on some of them and how it applied to me. So it's kind of like a little bit of a little history book of what I was plagued with in my first six years. The first six years of my trading development. The first six years of my trading development is plagued with everything you could have possibly done wrong. And. I want to kind of like use this discussion to kind of like go through some of the major hurdles that I had and again Since I have children adult children now They can hopefully listen to this and mine the I guess the experience portion of it because a lot of the things that I've put on my youtube channel and I've taught over the years it's heavily technical, just a lot of things that are going on in the chart, and I am always accused of being long-winded. And again, if you're not into really understanding what is most likely going to plague you, if you just want to go through it yourself and have all that experience, have at it and don't even listen to this video. And there's no harm in you not listening to this part. You could really just say, okay, I'm just going to wait until part two. But it's meant to be. a a resource for you to glean experience from without having to go through the suffering portion of it so if i were to go back in time and i could sit at a table and talk to my younger self what would i tell him or me where to focus what should i as a younger person focus on in my development as a trader First thing, don't seek the approval from others. Right away, that's the number one characteristic of a successful trader. Now you might not agree with the things I'm going to say in this episode. I'm just speaking from my own personal walk and the things that I had to endure. When I first started, the first people that I looked to to get approval with was my family. And I love my family. Both my immediate and extended family, but none of them shared in my excitement. They gave me all the reasons why it was a poor decision. It was a bad idea to get involved in it. I'm going to just lose money and just accept working for the rest of your life. And that was simply not in the cards for me. I just didn't want to do that. So you don't want to seek approval from your family because they're not going to understand what you're trying to do. They're going to give you all of the heartfelt reasons why they're going to try to protect you from yourself when they don't really understand what it is that you're trying to do or learn. Don't seek the approval of your friends. Number one, your friends are only going to be interested once you start making money. When they start seeing the changes in your life, then and only then will your friends be on board with it. Your friends, much like your family, Really don't feel comfortable with you being successful because if you tell them what you're going to do, then you get to the point where you succeed at it. You act like a mirror for them and they will always look to you as a reminder of what they failed to pursue in their own life. So again, don't try to seek the approval of others, family first and friends because it doesn't work out. Third, don't go to work and tell your coworkers that you're going to be quitting your job soon. I made all those errors, okay, and many times I've shared the low-income, high-hour, heavy workload job that I was doing as a young man when I was beginning this journey. And I just don't. Think that it's a good practice for anyone to go to work and tell their co-workers. Number one, they're going to be giving you, again, all the worst feedback you're ever going to hear. Yeah, right, you'll be here with me the rest of your life. You're going to retire from here. All those things, okay? So when you get this feedback... from your co-workers you're gonna hate going to work even more because you might have liked going to work it to some degree and hanging out with the people you work with talking about sports talking about movies talking about the opposite sex all these things that you had a common i guess agreement on or an interest in will start having a great divide because you're going to look at them as a source of annoyance and they're just gonna look at you as your pipe dreaming and you're not going to get to where you're going and it's gonna be fun for them to watch you fail and you don't want to have someone constantly you Poking you every day. It looks like you're still here. I guess I'll see you to work tomorrow Those types of things is what I had to endure. So don't tell your co-workers what you're going to be doing. Don't tell your boss what you're going to be doing. You're going to basically fire your boss and fire your co-workers when the time is right. But you don't want to broadcast it. Because all it's going to do is provide them a timeline when... they think you should be doing it and tease you the entire time. So your family is going to constantly give you heartfelt advice of why you shouldn't do it. Your friends are going to say, I'm not really interested, but if you get successful, I might be interested then. So why tell them? Your coworkers are going to give you every negative thing because they hate their life too. They're at the same place you're at, yet you're trying to escape. So why would you want them? to you know pump you up that that's what we do as humans we want to have our peers say yeah that's a good idea but how many times in your life have you ever had that experience i can tell you unless it was my fifth grade teacher mr lorber or it was my uncle that talked to me about commodities when i was 16 years old and taught me about narrow sideways channels and one two three tops and bottoms and head and shoulders you know all those bull flags and things at 16 years old I was looking at it and it was going in one ear and out the other okay so when you tell all your family your friends and your co-workers that's what's happening and they're not going to say you know what that's brilliant I wish I would have thought of that that's the react that's the reaction you're expecting right it never works out that way but yet we all do it as humans we want to have that that's a good idea response and it never comes so what does it do it causes deflation you don't want to be around these people because now you're like i wish i would have never said anything but once you put it out there it's done and lastly strangers as a young man When I was doing my job, I would finish off filling up the candy machines and the soda machines and coffee machines and such. And I used to do a vending route. I did a long day, 13 hours or so. And during my route, I felt this unreasonable desire to tell other people that I don't even know. Yeah, I'm looking at a market. I hope it goes up. Blah, blah, blah. What? They're looking at it. What are you talking to me about that for? So when you tell strangers or if you meet someone in the pub, okay, or you're at a club or, well, right now it's hard to go to those places right now because of all the things that's being impacted by the illness that's being spread around. The. social circles when you run into people they'll ask you hey you know so what do you do with yourself that's not the invitation to say well i'm looking to start trading commodities they're gonna be like what yeah i'm trading the foreign exchange market right away they're gonna be like what is that and that's what you want them to ask you and then when you start talking about it they're like oh yeah that's like the stock market you're not interested or they're interested and they want to know how much money you made and you can't tell them that you made any money you're just now starting so really you're a startup and they're not really interested in the conversation anymore so you're not going to get that feedback again what you're looking for so don't seek the approval from others you have to pursue this on your own steam your own energy and if you have any dependency on an outside source be it any one of these four groups family friends co-workers or strangers To give you that nudge, that little bit of a pat on the back that you're doing the right thing for yourself, you're going to struggle. Because in trading, you've got to be there to make the decisions whether anyone agrees with you or not. And when you make money, you reap the rewards of that. But when you lose it, and you will, You have to be able to endure that and not feel the compulsion to go to someone and say, hey, look, I just lost a lot of money. That's the same thing. Don't turn to anyone else and say, I made a mistake today. Help me feel better. You have to endure that. And if you're going to start your journey with this mindset of seeking approval or support outside of yourself, this is going to be a very hard journey for you. So you have to prepare yourself to seek your own approval by your own study and your own your own development. Reward yourself when you do it right. And when you do it wrong, give yourself permission to be wrong and allow yourself to grow. Next, learn risk management well and make that your initial, very first thing that you want to master. So you're controlling your impulses to stop telling everybody your business. Okay. It's your business. It's not their business. to stop giving your business to someone else. Next in line, it's the risk. You have to understand what you're getting involved in. If you're going to be trading with live funds, you are losing money. That's a 100% guarantee you are losing money. There is never, ever going to be a trader that starts and never has a loss. My very first trade was a loss. I lost 50% of my account overnight. an orange juice option i had no idea what i was doing i was baptized thrown into water and drowned okay it was just that short and sweet and i closed the account asked for the remainder of my account and that was the end of my Fox investments career. That was the brokerage firm I used at the time. And I had to go and discover how to actually look at charts and learn a little bit more about the risks. So So I didn't understand risks when I got into trading. I thought that it should work right away because I saw the book. The book said it does this. So therefore, when I looked at the chart, our interest should have performed the same way. Because that's what this guy said in the book. You know, this guy told me in at least three pages that the market, when it does this wiggle and waggle, then I should expect it to move this particular way. And where does he get off? Telling me this and then it not being true. You see where the disconnection is? That was how I looked at it. because I didn't want to take the responsibility of the risks and I figured well I'm in an option what's the worst that could happen all of my money could have been gone that's the worst and in one day overnight while I was sleeping woke up expecting to see I'm gonna be in I'm gonna be in the profits yeah I wasn't expecting that down 50 percent welcome to trading Michael and it was a shock and I just completely collapsed said give me my money I'm one out and that money couldn't get back to me fast enough and back then they'd sent it in a check and then you had to wait for the check to come in the mail it was just it was awful so the first thing you want to be focusing on is managing risk and understanding the underlying risks that's available to you if you trade You want to appreciate the percent over the dollar gain or loss. When I first started, I was interested in making a specific dollar amount. I didn't understand compound interest. I didn't understand the Kelly criterion, optimal F, none of the advanced money management theories that I adhere to now. And I just looked for dollars. You know, if I can make 500 bucks on this move, that's what I want to make. And my stop loss was what was the maximum I could take. And that's exactly what I was doing because I was afraid I was going to get stopped out. So I had this unrealistic stop loss that was just unbelievably wide or I didn't have one. I was using a mental stop, which will drive you mental if you're driving in a truck 13 hours a day, getting out, loading canned soda and junk food into candy machines and going around and fixing machines that aren't right. And you're constantly wondering what the market's doing and you don't have a stop loss. Yeah, it's already bad enough that you have to time the market and pick the right direction. But now you got to add to it that you're doing it blind with no stop loss and anything can happen. And that's what I was doing. I mean, literally, I was like a cowboy out there riding bulls with no experience. experience whatsoever. And if I was thrown off, it was always going to be the worst case. It was really going to be bad. Every single time I took a loss, it was going to be bad. Either I got crushed and I got out because I couldn't handle the pain anymore. Or if I had to stop, it was running against me, taking me out. And it was going to be the maximum risk that I could absorb in that trade. So you want to appreciate the percentage of what you are taking on as risk also with your gains. So don't be impressed with a specific dollar amount. Or don't look at a specific dollar amount as, well, it doesn't hurt that bad because it's only 300 bucks. But if your account is 3,000, that's 10%. That's considerable. You don't want to do that because you can't do too many of those and not see your account be lower to a level where it's a little bit difficult to come back from that as a new trader. So appreciate the percentage over dollar gain or loss. Learn to limit trade frequency. I felt that since the markets were opening up tomorrow, I had to be in there. So I was over trading. And if I got a profit, and I was able to get out in intraday, I would like, well, that was fun. I want to go in there and do it again. When there was 20 minutes left in the trading session, because I was trading commodities. They had pit hours where it would open at this time and close at this time. And I figured, well, it's still open. Anything can happen. And if I'm right, man, I can make some more money before it closes. I had no idea what I was doing, folks. Zero idea. I was looking at these charts, and they were speaking to me. And... it was all the wrong things it was telling me gamble and that's what i was doing i had money in the account there was hours still left in the trading or 20 minutes in this case as an example hypothetically and i was going in there and if i could get more money before the close that's what i was doing and that's what hurt me because i didn't understand the risk when you're getting close to the end of the session the end of the trading day or the end of the week you have to know that there's a large degree of risk And the fact that you're probably not going to see any really major move at that point because it's already behind you. And you want to limit the number of trades you take because the more frequency you have in your trades, the more likely you're going to lose. And if you have a lot of trades, you're going to have a lot more losses. And losses mount up. And you don't want that to occur, especially as a developing trader. You really don't want that to occur at any time, really. But you have to learn to limit your trade frequency. Avoid short-term trading, turning it into long-term trading. When I first started, I had no idea what style of trading that I was going to really focus on. I was being told I wanted to be... position trader you get on the daily chart catch a one two three hold it for three four five six months and I couldn't do it I just couldn't do it and when I started trading with short-term strategies and such when I was in winners that started to move a lot for me if you trade of any length of time eventually you're gonna get lucky with something and when it starts moving in your favor really explosively Something happens inside of our brain. It's like, okay, this was only going to be a trade for a couple hours and maybe make five or six handles in the S&P or 100 pips in the Forex or a $2.50 move in the stock that you're trading. But now because it's exploded, you're like, well, this is now a six-month trade. and you end up holding on to a winner turn loser and you changed your strategy from it was gonna be a short-term trade to now a long-term trade and that short-term gain turns into a now immediate loss it's debilitating Stick to what you are trying to do when it gets to your objectives. Scale out and get your target and move to the sidelines. Don't change strategies while you're in a trade. It never, ever, ever is a good thing. And be content with enough. If you had a profitable week and it's Thursday, close up shop. Who says you have to trade on Friday? What happens if you have a good Monday and Tuesday and it's way beyond your normal return? Why would you want to press your luck? The chances are you're probably going to give some of that back, if not all of it. And when I was younger, I did that a lot in my first six years. But I didn't care. It didn't bother me. And I didn't have any appreciation for the risk. Because I figured, well... I'm going to be right eventually. In every trade, I was swinging for the fences, and I wanted to make lots and lots of money. But the problem with that is, because I was taking on so much risk, when I had a little bit of a profit, I would close because I just couldn't handle it anymore. It was wearing me down. I'm expecting to make $1,000 in this trade. All right, I'm up $250. I just got to get out. I'm fatigued. That's what the market will do to you if you have no appreciation for the risk. Don't. undermine your trading by not tackling the first lesson in risk management. You have to understand it and how you personally engage with the marketplace and how you are, I guess, adversely affected. I guess that's the train of thought I'm trying to communicate here because unless you feel the pain of being in a market that's not moving in your favor or screaming against you, you're not going to fully appreciate what I'm saying here. And as a younger man, I saw lots of equity swings that would make anyone else nauseous and I just I didn't care. I had no appreciation. I had no respect for the marketplace because I figured I'm going to get it right eventually and I went through many accounts. not one or two many like 14 individual trading accounts and I would save up money save up money my first account was with a credit card and then the second account was with another credit card $2,600 on a nation-span credit card visa And you pay a lot of percentage in terms of interest when you borrow cash. And I just was doing everything wrong. Everything wrong. But I was not going to be deterred. Moving on, you want to prevent life imbalances. And this is one of the things that I failed miserably at. I have a pretty large family. I have five children, one that was brought into my marriage. I brought one into my marriage and I had three children or three sons with my present wife. I didn't spend a lot of time with my kids when I was younger. I was consumed with the marketplace. I was consumed with making money. I was consumed with building businesses. I was consumed with real estate, buying franchises. just always money money money money money and most of my children's sporting events i missed them and it was very hard To see how much time I miss when I look back and now look at my children as adults. Not all of them. I have a 15 year old and a soon to be 13 year old that's still living with me. But my older children, I don't have a lot of memories. Because I allowed the market to steal that. And I chased it more. The faster it ran away from me, the more I would pursue it. Because I was telling myself that I'm doing all of this for them. And that wasn't true. I was doing it for me. Me. Because I hated my job. I hated where I was in life. And I wanted more. And I wasn't satisfied where I was. And every adversity brought on a new sense of urgency. That I got to get this changed right now. And days would pass. and turned to weeks, to months, to years. And I missed so much time with my wife. I missed so much time with my children. And the greatest lesson I can tell you right now, if you're new, especially if you're a young man or a woman, and you're getting ready to get into this, these markets are vampires. They will suck every drop in the marrow in your bones if you give it to them. Thank you. It does not matter how much money you think you can make or eventually make. Because I'm going to tell you something. I've made a lot of money. Millions of real dollars. Millions. And I would give it all back. If I could go back in time and be able to spend the time with my kids and my wife that I missed. I created a prison cell for myself with these markets that I willfully put myself into every single day and it wasn't enough. to be in the daytime worrying about it all day long at work. Was I being a good employee? No. Many times I half-assed my job because I had to get back to the truck where my quote track was, which was my little quote machine, telling me what the soybean market was doing or what live cattle was doing or what the bond market was doing. I was more concerned about that and most of the time I was losing money. So I wasn't a good employee at the time. And when I got home in the evening time, what was I concerned about? Family? No. I was concerned about the market. I was wanting to know, what can I do to make more money? And my family will be there when I'm done. And that's a lie. It's a lie. You're going to give up your life if you don't pay attention to it. So how do you avoid it? You have to manage your family time and schedule it. This is the time for your family. No markets. No charts. No TV time looking at reports and news events that would drive the marketplace. No newspapers. No articles in magazines. No internet. No Twitter. None of that stuff. You manage your family time and you schedule it. and then once you have gave your family your time an ample amount of it then you have to return back to the marketplace you want to keep a study and trade schedule that means what time of day are you going to be looking at the market trade and there are specific times of the day days of the week months of the year that you want to be focusing on trading and there are other times when you don't want to be doing that and you want to be focusing on what they are and when are you going to study how much time each day are you going to a lot for studying because if you don't have that you're just going to go in there and say well it's basically like Netflix I'm gonna sit down binge watch and see what happens well if you look at a chart long enough it's gonna start telling you You know, if you put some money into me, I might give you some more back. And you're going to gamble. How long will a gambler sit in front of a slot machine with a pocket full of quarters before they put all the quarters in there? as fast as they get the next one in and that's what these charts are they're slot machines and you're you're being groomed as a gambler and all the books and things that you learn from other people and it's just an enticement to constantly do that feed that beast so you have to keep a study and trade schedule and only operate on that basis Off days are off days. On the weekends I spent more time worrying about the marketplace when I should have been spending it with my family. So you have to absolutely hold yourself hard and fast to when you don't have any market. activity and it's not trading or it's a holiday it may impact with lower volume that's an off day and you don't look at the charts you don't consume yourself with looking at what could have happened none of that stuff you pour it into your family that will prevent you from having a life imbalance and finally you want to be patient with your development I was overzealous and unrealistic about what I wanted to do. Once I started making money, that's what caught fire in me. And I was like, I want more. I want more. I want more. And when I saw I could take a very small account, $1,200, $1,500 to $15,000 in less than six weeks, I was like, this is exactly what I want to do. Like, I want to do this. I don't want to do anything else. And... you don't have to rush especially if you are younger than 30. like if you're in your 20s you have so much time to get yourself where you want to be but you want to take the time to develop yourself and learn a lot about yourself because if you're not aware of what you're going to likely do to yourself to throw yourself off the rails It doesn't matter what you're going to learn or what you're going to do or how much money you start with or how much time you put into it. It just means that you're going to rush to destruction. So you have to give yourself a realistic timeline. When I first started, my plan was I wanted to retire at 40, I want to make $1,000 a month, and retire at 40. That was my plan. And I quickly learned that that was a really low objective. What was possible was a lot more than that. But I wasn't prepared to see that type of equity increase. When I started making a lot of money, it's like a drug. And it makes you want to do more and more. And you throw that in with you didn't care about risk because I didn't. It hurt me and I would see these huge gains and then huge drawdowns. So while I'd have really big run up and I'd have a roller coaster drop and it would just put me back in that. I got to go back and spend more time in the charts. And who was suffering? My family. My children didn't get to see their father that much. My wife didn't get to see me as much as her husband. And I missed out on a lot. And seeing a couple photographs is not the same as being there to cheer your kid on when he's up there and he hits his first home run. I miss that. When his basketball team wins and he made that shot right before the last bell, I miss that. But hey, I made money on lean hogs. It doesn't measure up. Stop buying retail logic and tools. You just don't want to be filling your head up with all of this poor thinking, okay, because that's exactly what it is. Everything that you learn in retail books and courses is diametrically opposed to how the actual markets work. So stop wasting money on books, and I've purchased either by electronic format or actual hard copy books. I have over 2,000 of them. And I won't buy another book ever again. And I wish I would have stopped the second year that I started buying them. In my mind, I was going to buy as many books as I could because somebody out there is going to have the secret. And I can tell you, after reading over 2,000 books, none of them did. And there are some real classics in there. And the ones that I do like, I've mentioned before. And I know some of you are new and you want to know what they are. For money management, I like everything from Ralph Vintz and Ryan Jones. They do a lot of Optimal F and Kelly Criterion. It's a little bit advanced. I'm not saying that everyone that first starts trading should mess with that because it's meant to run your account up pretty quick. You're not going to be prepared for that, and I wasn't either. That's why I couldn't make it work right away. So I had to learn a lot about myself and then tune it for me. How I Made a Million Dollar Trade in Commodities Last Year. It's a 1970s book from Larry Williams. That book still is relevant today. Not every little thing in there is, but the majority of that book is. That was the real first inspiration. For me to see how smart money operates in the marketplace. And then that was my pursuit for the rest of my life. I was going to crack these markets. So that Trading for a Living by Alex and their elder. Market Wizards 1 and 2 just for inspiration. And Street Smarts by Linda Rashk and Larry Connors. that's it now you wanna know what to do the opposite of John Murphy's technical analysis of financial markets book that's the retail traders Bible I always recommend that one simply because you wanna learn how to do the opposite everything is being taught in that book and if you do that you can quickly see how charts are really really fun to watch then because its such a high degree a percentage of the of failing that it's more likely if you just fade those moves you'll probably see the chart work in your favor avoid looking for hot hand gurus i did this a lot on america online i chased everybody if they had a service i was trying it out at least for well back then they would do it by the week now everything's by month and uh Everything was, at the time, a newsletter or a phone number that you had to call and pay a couple dollars a minute or whatever. And it would tell you what they were trading. And I never made money with that stuff. Even Larry Williams, not to be disrespectful towards him, but I, at one time, was paying for his hotline. And you would just call him up and he would have a recording. And it was basically what he was going to do with the bond market and with the S&P market. And I did those trades and I lost money. Again, I'm not saying that he's not a profitable trader. I'm not saying he's not a good trader. I'm not saying he's not a good teacher. I'm just saying my personal experience doing that, I lost money on every single trade. So avoid looking for hot hand gurus. This is the reason why I don't hold people's hands. I don't say, this is what we're going to do. Buy here, sell here, stop. I don't do that. Because all that does is create codependence. And you don't want to be a codependent trader. You want to be an independent thinking trader. Become your own signal generator. The big thing is always as a new trader you want to find someone that's good. You don't want to find a mentor. You want to find someone that's going to tell you what they're doing and making money so you can copy them. And I fell victim to that too. I didn't want to trust my own analysis. I got lazy and thinking well I really just want to make a lot of money so if I can find someone that's really good I'll just copy them. And everything they do, I'm going to take the trades. Since they're successful, even if I take a couple losses here and there, I'm just going to stick with it. So what am I really saying there? I'm saying that I'm going to use them as my system. And I'm accepting losses. I know they're probably going to come. But I'm holding out that they're going to have more wins than losses. Now, doesn't that make sense if you apply it to your own strategy? But when you, as a new trader, start, you don't want to accept loss. losses that's not acceptable but when you justify your spending when you buy other people's signals it's somehow brought into the reasoning part of the decision-making that it's something that's acceptable losing trades it's acceptable until you take that first loss and then you're not subscribing anymore you go back to looking for another hot hand guru Be willing to lose and lose a lot early on. It's part of it. You don't know what you're doing and no book, no course, even me, if I sat with you every single day for a month. You would still take losses. You would lose. It's unavoidable. But early on, when you are developing, you're going to be wrong a lot. And this is the reason why I tell people, do not trade with live funds. Until you know exactly what you're doing, and you understand yourself, and that may be longer than six months, it may be longer than a year. For some of you, it might be two, three, four years. like a college degree and some of you aren't prepared for that and there's no shame in you saying you know what the same for me that's good that means you're not going to lose money that means you're not going to have and balances in your life it means that you're not going to hurt yourself both financially and psychologically because I did that I caused physical problems with an eating disorder I developed agoraphobia which was a fear of being around other people because I didn't want them to find out how bad I was losing and I wish I could go back in time and tell myself Losing is normal. It's acceptable. It's part of the business transactions. In this industry, you're going to have losses. Control them. Over time, you're going to make more money than you lose. I didn't think that way when I first started. I was trying to avoid losing altogether. And then every single loss was a paramount event. Like it was huge. It was elevated to some grandiose, painful, just terrible thing that I had been enduring. When it's just, I did it wrong. Simple. You made a mistake, Michael, and you're going to make lots of them. 27 years from now, you're going to have so many losing trades. You're going to look back and say, you know what? It didn't kill me. So be willing to lose a lot early on in your development. That's why you want to do it on paper. That's why you want to do it on demo. Because you need to see what it feels like to be wrong a lot and not have the money taken from you. And then correct those problems before you put real money at work. Stay away from social media drains. Well, in this age, we have a lot of social media, but back when I first started, November 5th, 1992, social media was just starting out with message boards, or bulletin boards they call them. So it's kind of like Twitter or... you know, not so much Instagram, but I see like Twitter, just people would just communicate with open emails, basically, as the format was whatever you would look at and see that would be sent by way of an email, it would just be a open source where people could see what everybody was doing a message board basically and I would get my feelings hurt back then because someone would say that's a stupid idea what you're doing and then when I was doing it right everybody was like man you are a rock star I'm taking that trade and I was like yeah I know I'm making money now because he or she thinks it's a good trade man that's stupid that was dumb I let other people back then influence my decisions or change the level of expectation I had on the trade because if they said me that's a good idea I think it's gonna go to 1150 when I was looking at like 1080 I'm thinking myself yeah they're probably right and I would change my trade to what they're saying because, man, I don't want them to be right and me miss out on that extra profit. You see what that trap disc did? It took my trade away from me, and now I took their trade. Who's in control there? It wasn't me. I let go of the wheel. Don't join trading clubs, okay? That means circles where everyone has the hive mentality because you need to discover who you are as a trader and it's very, I guess, wasteful for your time and it stunts your growth if you start going into a group. That has, well, this is the only way of trading and this is all we do around here because what you're trying to do is be part of that click. Okay. You're trying to take on the hive mentality and it may not be suited for you, but if you waste more time and unfortunately money. You don't want to discover that you've been wasting your time and money, okay? So you want to be solo. Trading is a solo sport. It's not a team sport. No matter how good your guru or mentor is, if you're doing everything they say, you aren't in control. You're growing codependent. Don't subscribe to alerts. That gets back to signals. You want to be the source or generation of the trade ideas. That way, when you're wrong, you're forced to assume the responsibility. You can't say, well, I just listened to that person. They were wrong. They suck. Well, what are you going to do about it? Well, I'm going to find somebody else. That's not responsible. That's gambling. You're going to another slot machine at another casino. That's all that is. Versus, I want to learn how to play cards and manage my risk, not bet too big, and just be Steady Yeti at the table. You want to be the generating source of the signals. Don't subscribe to someone else because you have no idea what got them into the trade. You don't know what influences are being imposed on them. Maybe they had a bad day. Maybe they had just recently had a spat with their spouse. And they feel like they have to feel good, empowered. I'm going to go out there and just tell everybody to buy S&P tomorrow at the open. And if I'm right, I'll feel good. I'll feel better about this whole thing. Because they're human too. Do you want to be subscribing to someone that's like that? You don't know if that's what's going on. They're not going to come out and say, yeah, it's trade worked out, but let me tell you what really was going on. My wife told me I was a bum. I spent too much time in front of these charts and I ain't spent any time with the kids and I ain't walked a dog in six months. But I knew if I got this right, I'd feel stronger about myself. That never happens, folks. That never happens. Never subscribe to other people's alerts. Don't count other people's money. That's what's popular right now. Everyone wants to know how much money someone else has. Instagram, what cars do they drive? What houses do they live in? Where are they having their vacation? What do they wear? What kind of shoes do they have on? Do they wear socks? What kind of underwear do they have? What jewelry do they have? Come on. All that stuff is a waste. It's a waste. It's a waste of your time. It's a waste of money. And you don't need all those things. If you're trading to do that, you're never going to get there. And I want to repeat that. If you are trading to live like that. You're never going to get there because you're looking at money and you're not looking at the process that's involved that would eventually lead to profitability. So you're chasing that carrot, that little piece of candy that's dangled in front of a child. You may be a stranger, but if you dangle that candy in front of a child, what's the child going to do? Reach out for that candy. And that's what all these people do. They dangle all this lavish toys and lifestyle material. materialism, all of that is fluff. I've never done those types of things. And it's important to understand that the reason why I don't do it, it's not because I lack of it. Because I have all those things. But it doesn't do anything to make you a better trader. It doesn't make you a better student. And it will not, in any capacity, motivate you. And then that translates into a greater skill set that's derived because you saw that. It doesn't work like that. But how many people fall victim to that? Everyone. Everyone. The first course I bought from Ken Roberts. That's all he talked about. You want to go on vacations? You want to have enough money to quit your job? job. You want to buy a yacht? You want to live in a mansion? That's what was sold to me. And I bought that course. And in one trade, the very first trade, I lost 50% of what I put in. Well, I can tell you that was never said in the book. That didn't get talked about at all. It just said, well, you can take some losses, but you don't want your losses to be too big. Okay. But what happens if it is? Because options are a little bit different animal. And I found out the hard way. Don't be enticed by other people's money. Don't count other people's money. Don't ask them what they make because you can't spend their money. That's why I don't talk about what I'm making. That's why I don't talk about what I have. And that's why I don't show you what I own. Because you can't drive my cars. You're not going to spend a night at my house. You're not going to eat dinner on my dishes. And you're not going to be on my vacations. So what difference does it make? It's not going to make me feel better about myself for doing it. In fact, I'll feel like a slime ball like I did when I was younger. Because I did that stuff to get people interested in me. And it's not necessary. Don't feel insignificant by contrast. When you see other people succeeding or supposedly succeeding, don't measure yourself against that. Because if you do, what you're saying is, I'm only successful if I get to where they're at. I did that. And when I stopped and said, you know what? I'm going to look at a goal that's above everyone I've seen out there. I didn't believe anyone else was more successful than Larry Williams. And he took $10,000 to $1.2 million in one year. Actually, it was over $2 million that same year. 1987, but the crash hurt him and he had to trade it back and got it to 1.2 before the close of the Robbins World Cup that particular year. And you can see he still has the highest percentage gain in that contest. So I said, I'm going to make more than that. because that's what that was my measuring stick and i wanted to do better than that and i always lived my life with that in mind i didn't want to say well am i good as at the time jake bernstein which he got himself in a lot of trouble and it's questionable of how much money he actually made as a trader point is I fell victim to that in the beginning. And you don't want to do that. Don't measure yourself against someone else. Don't measure yourself against me. Don't measure yourself against somebody else you see on social media, Instagram, all that. These people, 99% of the time, are fake. They are driving cars they don't own. And they are in homes that they don't sleep in. And the clothes that they have, many times, they're taking them back the next day. So, what's the deal? And watches, they're all basically fake. All that stuff is a lure to make you think they're successful. If they're successful, they'll prove it by showing you they know what's going to happen in the marketplace. But strangely enough, that's the thing they don't ever do. And that's what I focus on. I've made a reputation on telling you what I believe is the best in terms of market analysis concepts. In 1996, I penned what everybody else is out there now touting as market maker concepts in one capacity or another. It's a watered down version of what I put in lecture notes in 1996. What I started using in 1995 improved with real money. I started teaching one-on-one sessions and they have made their way through the internet over time and now we see even more. People have wrote books about it. They've made courses about it and they even included some of the things that actually occurred in my personal life as some of their narratives and And it's all a lie. They didn't have those experiences, but I did. And I'm the only one that can prove that makes this stuff work. Don't feel insignificant by contrast. Because the majority of the people you see out there, they're fakes. They're frauds and they aren't what they claim to be. Match your style to your personality. This is something I picked up from Larry Williams. It made a lot of sense. I avoided doing it for a long time. I wish I would have done it sooner. But if you're a scalper, you're going to do very well if you make quick decisions. That's as simple as that. But if you hem and haw about trying to make a decision and you want to be a scalper or day trader, it's going to be a problem. And if you short term trade. Typically, you're the type of person that can take a trade and sleep while you're in it. That is a real good general rule of thumb. If you can sleep while you're in a trade, then you're probably a good short-term trader. Don't force yourself into any mold. There's gurus, there's mentors, there's people out there that educate. And unfortunately, they try to take everyone and press them into this mold, this cookie-cutter approach. And it doesn't work. Avoid doing that. Don't try to copy someone. Their style, their image, their forte, their approach, their vocabulary. You see where I'm going with this, don't you? So many people out there on YouTube now sound a lot like ICT. Don't try to copy someone. Be original. Make your own unique model. Don't change trading approaches. Stick to one approach. One method. Master it and then see how you work with it. That means you're going to have to spend some time with it. Most people don't want to do that. Avoid system hopping. Okay and the trap is if you take a trade and it loses. Okay that's reasonable but if you take another trade and you lose that's it. I'm throwing this away. This is stupid. This method doesn't work. I did that a lot and I went through all kinds of trading systems. that's the reason why I went through all kinds of trading accounts because I wasn't consistent with anything except for system hopping that was my only consistency the baseline of my consistency was all around me not being consistent with one trading approach many traders failed at every model loses you're going to have to accept that I mentioned it earlier with the risk you can't avoid it it's part of the business treat it like Normal transaction. When you go to work, if you get sick and you miss a day's work, that's a loss. Did you lose your job? No. Did you lose your house? No. Did you have a little less money that week? Yeah. That's life. Well, that's how trading works. Losses are inevitable. You're going to have them. Find your unique model and grow from it. Don't tweak it too much once it's profitable stick with it And then what you'll find is by using a more advanced money management approach if you have a method that gives you a delivered Result that's measurable and it's consistent enough that it does it more times than it doesn't if you add impeccable risk management and money management to that you will become wealthy in this story there's no ifs ands or buts that's the way it is but you cannot get to that point until you go through all these other steps that are very very boring admittedly but they're all part of the process settle on one trade setup initially determine your asset class Pick one market asset class. It's a commodity, it's an index future, it's a forex pair, it's a cryptocurrency, it's a stock. Whatever it is, stick to that one asset class. And inside that one asset class, pick one market. Outline when you want to buy. That means what's the criteria that you feel comfortable with when it's a buy. And then outline that and make it as detailed as possible. Put it on paper. And the same thing with you when you want to go short, what's the characteristics and circumstances that would drive you to believing it's a short? And with that, you want to build many study journal cases. Notice I said not live trades with real money. You want to have a study journal that has a plethora of examples of where this worked in the past and when it didn't. And study them at great lengths. So that way you get familiar with what it looks like by recognition. And then when you see live price action, you'll recognize it as it forms. Now. With all those things, you have something to start with. And now you can plan your beginning. In part two, I promise I won't be so long-winded and boring. We're actually going to give some insights on how you can go into the marketplace and study a very particular thing. And what that is, is the optimal trade entry. Until I talk to you then, I wish you good luck and good trading.

There's no charts, nothing like that. No market maker secret concepts being revealed on some charts. It's basically a hypothetical conversation with my... my younger self.

I get questioned a lot by email if I could go back in time, you know, what would I like to do differently? And I kind of like twisted that whole idea to come up with this perspective. And if I could go back and tell myself what I know now, and this is basically a hypothetical conversation with my younger self.

If I could go back to the start of it all, knowing what I know now, said everyone. How many times have you looked at a circumstance in your life, not just in trading, but in anything, every facet of your life, you wish you could go back knowing what you know now. I used to hear my grandparents. say things like that and I was like what?

I couldn't relate with it and or to it but being 47 about to turn 48 years old there is a laundry list of things I wish I could go back and change not just in my trading journey, but in all facets of my life. So I shared a bunch of those personal things today on my Twitter feed. If you haven't been over there, you can take a look at that and see my open discussion about many of the frailties in my personal life coming up as a younger man into where I am today.

I want to talk a little bit about some of the things that I wish I could go back in time and tell my younger self. Now the way you can use this for yourself is take what I'm saying with a great deal of appreciation because I weathered a lot of storms financially and personally to get to what I know now. You may be a very young person and or an older person just now getting involved in the markets. You're going to have the same growing pains that everyone else has. And some of these things are going to be things you probably read in books, heard other people talk about.

But I'm going to give you my personal spin on some of them and how it applied to me. So it's kind of like a little bit of a little history book of what I was plagued with in my first six years. The first six years of my trading development.

The first six years of my trading development is plagued with everything you could have possibly done wrong. And. I want to kind of like use this discussion to kind of like go through some of the major hurdles that I had and again Since I have children adult children now They can hopefully listen to this and mine the I guess the experience portion of it because a lot of the things that I've put on my youtube channel and I've taught over the years it's heavily technical, just a lot of things that are going on in the chart, and I am always accused of being long-winded. And again, if you're not into really understanding what is most likely going to plague you, if you just want to go through it yourself and have all that experience, have at it and don't even listen to this video.

And there's no harm in you not listening to this part. You could really just say, okay, I'm just going to wait until part two. But it's meant to be. a a resource for you to glean experience from without having to go through the suffering portion of it so if i were to go back in time and i could sit at a table and talk to my younger self what would i tell him or me where to focus what should i as a younger person focus on in my development as a trader First thing, don't seek the approval from others.

Right away, that's the number one characteristic of a successful trader. Now you might not agree with the things I'm going to say in this episode. I'm just speaking from my own personal walk and the things that I had to endure.

When I first started, the first people that I looked to to get approval with was my family. And I love my family. Both my immediate and extended family, but none of them shared in my excitement.

They gave me all the reasons why it was a poor decision. It was a bad idea to get involved in it. I'm going to just lose money and just accept working for the rest of your life. And that was simply not in the cards for me.

I just didn't want to do that. So you don't want to seek approval from your family because they're not going to understand what you're trying to do. They're going to give you all of the heartfelt reasons why they're going to try to protect you from yourself when they don't really understand what it is that you're trying to do or learn. Don't seek the approval of your friends. Number one, your friends are only going to be interested once you start making money.

When they start seeing the changes in your life, then and only then will your friends be on board with it. Your friends, much like your family, Really don't feel comfortable with you being successful because if you tell them what you're going to do, then you get to the point where you succeed at it. You act like a mirror for them and they will always look to you as a reminder of what they failed to pursue in their own life.

So again, don't try to seek the approval of others, family first and friends because it doesn't work out. Third, don't go to work and tell your coworkers that you're going to be quitting your job soon. I made all those errors, okay, and many times I've shared the low-income, high-hour, heavy workload job that I was doing as a young man when I was beginning this journey.

And I just don't. Think that it's a good practice for anyone to go to work and tell their co-workers. Number one, they're going to be giving you, again, all the worst feedback you're ever going to hear.

Yeah, right, you'll be here with me the rest of your life. You're going to retire from here. All those things, okay? So when you get this feedback...

from your co-workers you're gonna hate going to work even more because you might have liked going to work it to some degree and hanging out with the people you work with talking about sports talking about movies talking about the opposite sex all these things that you had a common i guess agreement on or an interest in will start having a great divide because you're going to look at them as a source of annoyance and they're just gonna look at you as your pipe dreaming and you're not going to get to where you're going and it's gonna be fun for them to watch you fail and you don't want to have someone constantly you Poking you every day. It looks like you're still here. I guess I'll see you to work tomorrow Those types of things is what I had to endure.

So don't tell your co-workers what you're going to be doing. Don't tell your boss what you're going to be doing. You're going to basically fire your boss and fire your co-workers when the time is right.

But you don't want to broadcast it. Because all it's going to do is provide them a timeline when... they think you should be doing it and tease you the entire time.

So your family is going to constantly give you heartfelt advice of why you shouldn't do it. Your friends are going to say, I'm not really interested, but if you get successful, I might be interested then. So why tell them?

Your coworkers are going to give you every negative thing because they hate their life too. They're at the same place you're at, yet you're trying to escape. So why would you want them?

to you know pump you up that that's what we do as humans we want to have our peers say yeah that's a good idea but how many times in your life have you ever had that experience i can tell you unless it was my fifth grade teacher mr lorber or it was my uncle that talked to me about commodities when i was 16 years old and taught me about narrow sideways channels and one two three tops and bottoms and head and shoulders you know all those bull flags and things at 16 years old I was looking at it and it was going in one ear and out the other okay so when you tell all your family your friends and your co-workers that's what's happening and they're not going to say you know what that's brilliant I wish I would have thought of that that's the react that's the reaction you're expecting right it never works out that way but yet we all do it as humans we want to have that that's a good idea response and it never comes so what does it do it causes deflation you don't want to be around these people because now you're like i wish i would have never said anything but once you put it out there it's done and lastly strangers as a young man When I was doing my job, I would finish off filling up the candy machines and the soda machines and coffee machines and such. And I used to do a vending route. I did a long day, 13 hours or so. And during my route, I felt this unreasonable desire to tell other people that I don't even know.

Yeah, I'm looking at a market. I hope it goes up. Blah, blah, blah.

What? They're looking at it. What are you talking to me about that for? So when you tell strangers or if you meet someone in the pub, okay, or you're at a club or, well, right now it's hard to go to those places right now because of all the things that's being impacted by the illness that's being spread around.

The. social circles when you run into people they'll ask you hey you know so what do you do with yourself that's not the invitation to say well i'm looking to start trading commodities they're gonna be like what yeah i'm trading the foreign exchange market right away they're gonna be like what is that and that's what you want them to ask you and then when you start talking about it they're like oh yeah that's like the stock market you're not interested or they're interested and they want to know how much money you made and you can't tell them that you made any money you're just now starting so really you're a startup and they're not really interested in the conversation anymore so you're not going to get that feedback again what you're looking for so don't seek the approval from others you have to pursue this on your own steam your own energy and if you have any dependency on an outside source be it any one of these four groups family friends co-workers or strangers To give you that nudge, that little bit of a pat on the back that you're doing the right thing for yourself, you're going to struggle. Because in trading, you've got to be there to make the decisions whether anyone agrees with you or not.

And when you make money, you reap the rewards of that. But when you lose it, and you will, You have to be able to endure that and not feel the compulsion to go to someone and say, hey, look, I just lost a lot of money. That's the same thing. Don't turn to anyone else and say, I made a mistake today. Help me feel better.

You have to endure that. And if you're going to start your journey with this mindset of seeking approval or support outside of yourself, this is going to be a very hard journey for you. So you have to prepare yourself to seek your own approval by your own study and your own your own development. Reward yourself when you do it right.

And when you do it wrong, give yourself permission to be wrong and allow yourself to grow. Next, learn risk management well and make that your initial, very first thing that you want to master. So you're controlling your impulses to stop telling everybody your business. Okay.

It's your business. It's not their business. to stop giving your business to someone else. Next in line, it's the risk. You have to understand what you're getting involved in.

If you're going to be trading with live funds, you are losing money. That's a 100% guarantee you are losing money. There is never, ever going to be a trader that starts and never has a loss.

My very first trade was a loss. I lost 50% of my account overnight. an orange juice option i had no idea what i was doing i was baptized thrown into water and drowned okay it was just that short and sweet and i closed the account asked for the remainder of my account and that was the end of my Fox investments career. That was the brokerage firm I used at the time.

And I had to go and discover how to actually look at charts and learn a little bit more about the risks. So So I didn't understand risks when I got into trading. I thought that it should work right away because I saw the book. The book said it does this.

So therefore, when I looked at the chart, our interest should have performed the same way. Because that's what this guy said in the book. You know, this guy told me in at least three pages that the market, when it does this wiggle and waggle, then I should expect it to move this particular way. And where does he get off? Telling me this and then it not being true.

You see where the disconnection is? That was how I looked at it. because I didn't want to take the responsibility of the risks and I figured well I'm in an option what's the worst that could happen all of my money could have been gone that's the worst and in one day overnight while I was sleeping woke up expecting to see I'm gonna be in I'm gonna be in the profits yeah I wasn't expecting that down 50 percent welcome to trading Michael and it was a shock and I just completely collapsed said give me my money I'm one out and that money couldn't get back to me fast enough and back then they'd sent it in a check and then you had to wait for the check to come in the mail it was just it was awful so the first thing you want to be focusing on is managing risk and understanding the underlying risks that's available to you if you trade You want to appreciate the percent over the dollar gain or loss.

When I first started, I was interested in making a specific dollar amount. I didn't understand compound interest. I didn't understand the Kelly criterion, optimal F, none of the advanced money management theories that I adhere to now.

And I just looked for dollars. You know, if I can make 500 bucks on this move, that's what I want to make. And my stop loss was what was the maximum I could take.

And that's exactly what I was doing because I was afraid I was going to get stopped out. So I had this unrealistic stop loss that was just unbelievably wide or I didn't have one. I was using a mental stop, which will drive you mental if you're driving in a truck 13 hours a day, getting out, loading canned soda and junk food into candy machines and going around and fixing machines that aren't right. And you're constantly wondering what the market's doing and you don't have a stop loss. Yeah, it's already bad enough that you have to time the market and pick the right direction.

But now you got to add to it that you're doing it blind with no stop loss and anything can happen. And that's what I was doing. I mean, literally, I was like a cowboy out there riding bulls with no experience.

experience whatsoever. And if I was thrown off, it was always going to be the worst case. It was really going to be bad. Every single time I took a loss, it was going to be bad.

Either I got crushed and I got out because I couldn't handle the pain anymore. Or if I had to stop, it was running against me, taking me out. And it was going to be the maximum risk that I could absorb in that trade.

So you want to appreciate the percentage of what you are taking on as risk also with your gains. So don't be impressed with a specific dollar amount. Or don't look at a specific dollar amount as, well, it doesn't hurt that bad because it's only 300 bucks. But if your account is 3,000, that's 10%. That's considerable.

You don't want to do that because you can't do too many of those and not see your account be lower to a level where it's a little bit difficult to come back from that as a new trader. So appreciate the percentage over dollar gain or loss. Learn to limit trade frequency. I felt that since the markets were opening up tomorrow, I had to be in there.

So I was over trading. And if I got a profit, and I was able to get out in intraday, I would like, well, that was fun. I want to go in there and do it again.

When there was 20 minutes left in the trading session, because I was trading commodities. They had pit hours where it would open at this time and close at this time. And I figured, well, it's still open.

Anything can happen. And if I'm right, man, I can make some more money before it closes. I had no idea what I was doing, folks.

Zero idea. I was looking at these charts, and they were speaking to me. And... it was all the wrong things it was telling me gamble and that's what i was doing i had money in the account there was hours still left in the trading or 20 minutes in this case as an example hypothetically and i was going in there and if i could get more money before the close that's what i was doing and that's what hurt me because i didn't understand the risk when you're getting close to the end of the session the end of the trading day or the end of the week you have to know that there's a large degree of risk And the fact that you're probably not going to see any really major move at that point because it's already behind you. And you want to limit the number of trades you take because the more frequency you have in your trades, the more likely you're going to lose.

And if you have a lot of trades, you're going to have a lot more losses. And losses mount up. And you don't want that to occur, especially as a developing trader. You really don't want that to occur at any time, really. But you have to learn to limit your trade frequency.

Avoid short-term trading, turning it into long-term trading. When I first started, I had no idea what style of trading that I was going to really focus on. I was being told I wanted to be... position trader you get on the daily chart catch a one two three hold it for three four five six months and I couldn't do it I just couldn't do it and when I started trading with short-term strategies and such when I was in winners that started to move a lot for me if you trade of any length of time eventually you're gonna get lucky with something and when it starts moving in your favor really explosively Something happens inside of our brain. It's like, okay, this was only going to be a trade for a couple hours and maybe make five or six handles in the S&P or 100 pips in the Forex or a $2.50 move in the stock that you're trading.

But now because it's exploded, you're like, well, this is now a six-month trade. and you end up holding on to a winner turn loser and you changed your strategy from it was gonna be a short-term trade to now a long-term trade and that short-term gain turns into a now immediate loss it's debilitating Stick to what you are trying to do when it gets to your objectives. Scale out and get your target and move to the sidelines. Don't change strategies while you're in a trade. It never, ever, ever is a good thing.

And be content with enough. If you had a profitable week and it's Thursday, close up shop. Who says you have to trade on Friday?

What happens if you have a good Monday and Tuesday and it's way beyond your normal return? Why would you want to press your luck? The chances are you're probably going to give some of that back, if not all of it.

And when I was younger, I did that a lot in my first six years. But I didn't care. It didn't bother me.

And I didn't have any appreciation for the risk. Because I figured, well... I'm going to be right eventually. In every trade, I was swinging for the fences, and I wanted to make lots and lots of money.

But the problem with that is, because I was taking on so much risk, when I had a little bit of a profit, I would close because I just couldn't handle it anymore. It was wearing me down. I'm expecting to make $1,000 in this trade. All right, I'm up $250. I just got to get out.

I'm fatigued. That's what the market will do to you if you have no appreciation for the risk. Don't. undermine your trading by not tackling the first lesson in risk management. You have to understand it and how you personally engage with the marketplace and how you are, I guess, adversely affected.

I guess that's the train of thought I'm trying to communicate here because unless you feel the pain of being in a market that's not moving in your favor or screaming against you, you're not going to fully appreciate what I'm saying here. And as a younger man, I saw lots of equity swings that would make anyone else nauseous and I just I didn't care. I had no appreciation.

I had no respect for the marketplace because I figured I'm going to get it right eventually and I went through many accounts. not one or two many like 14 individual trading accounts and I would save up money save up money my first account was with a credit card and then the second account was with another credit card $2,600 on a nation-span credit card visa And you pay a lot of percentage in terms of interest when you borrow cash. And I just was doing everything wrong.

Everything wrong. But I was not going to be deterred. Moving on, you want to prevent life imbalances.

And this is one of the things that I failed miserably at. I have a pretty large family. I have five children, one that was brought into my marriage.

I brought one into my marriage and I had three children or three sons with my present wife. I didn't spend a lot of time with my kids when I was younger. I was consumed with the marketplace. I was consumed with making money. I was consumed with building businesses.

I was consumed with real estate, buying franchises. just always money money money money money and most of my children's sporting events i missed them and it was very hard To see how much time I miss when I look back and now look at my children as adults. Not all of them.

I have a 15 year old and a soon to be 13 year old that's still living with me. But my older children, I don't have a lot of memories. Because I allowed the market to steal that. And I chased it more.

The faster it ran away from me, the more I would pursue it. Because I was telling myself that I'm doing all of this for them. And that wasn't true.

I was doing it for me. Me. Because I hated my job. I hated where I was in life.

And I wanted more. And I wasn't satisfied where I was. And every adversity brought on a new sense of urgency. That I got to get this changed right now. And days would pass.

and turned to weeks, to months, to years. And I missed so much time with my wife. I missed so much time with my children.

And the greatest lesson I can tell you right now, if you're new, especially if you're a young man or a woman, and you're getting ready to get into this, these markets are vampires. They will suck every drop in the marrow in your bones if you give it to them. Thank you. It does not matter how much money you think you can make or eventually make. Because I'm going to tell you something.

I've made a lot of money. Millions of real dollars. Millions.

And I would give it all back. If I could go back in time and be able to spend the time with my kids and my wife that I missed. I created a prison cell for myself with these markets that I willfully put myself into every single day and it wasn't enough. to be in the daytime worrying about it all day long at work. Was I being a good employee?

No. Many times I half-assed my job because I had to get back to the truck where my quote track was, which was my little quote machine, telling me what the soybean market was doing or what live cattle was doing or what the bond market was doing. I was more concerned about that and most of the time I was losing money.

So I wasn't a good employee at the time. And when I got home in the evening time, what was I concerned about? Family? No. I was concerned about the market.

I was wanting to know, what can I do to make more money? And my family will be there when I'm done. And that's a lie. It's a lie.

You're going to give up your life if you don't pay attention to it. So how do you avoid it? You have to manage your family time and schedule it.

This is the time for your family. No markets. No charts.

No TV time looking at reports and news events that would drive the marketplace. No newspapers. No articles in magazines. No internet. No Twitter.

None of that stuff. You manage your family time and you schedule it. and then once you have gave your family your time an ample amount of it then you have to return back to the marketplace you want to keep a study and trade schedule that means what time of day are you going to be looking at the market trade and there are specific times of the day days of the week months of the year that you want to be focusing on trading and there are other times when you don't want to be doing that and you want to be focusing on what they are and when are you going to study how much time each day are you going to a lot for studying because if you don't have that you're just going to go in there and say well it's basically like Netflix I'm gonna sit down binge watch and see what happens well if you look at a chart long enough it's gonna start telling you You know, if you put some money into me, I might give you some more back.

And you're going to gamble. How long will a gambler sit in front of a slot machine with a pocket full of quarters before they put all the quarters in there? as fast as they get the next one in and that's what these charts are they're slot machines and you're you're being groomed as a gambler and all the books and things that you learn from other people and it's just an enticement to constantly do that feed that beast so you have to keep a study and trade schedule and only operate on that basis Off days are off days. On the weekends I spent more time worrying about the marketplace when I should have been spending it with my family.

So you have to absolutely hold yourself hard and fast to when you don't have any market. activity and it's not trading or it's a holiday it may impact with lower volume that's an off day and you don't look at the charts you don't consume yourself with looking at what could have happened none of that stuff you pour it into your family that will prevent you from having a life imbalance and finally you want to be patient with your development I was overzealous and unrealistic about what I wanted to do. Once I started making money, that's what caught fire in me. And I was like, I want more.

I want more. I want more. And when I saw I could take a very small account, $1,200, $1,500 to $15,000 in less than six weeks, I was like, this is exactly what I want to do. Like, I want to do this. I don't want to do anything else.

And... you don't have to rush especially if you are younger than 30. like if you're in your 20s you have so much time to get yourself where you want to be but you want to take the time to develop yourself and learn a lot about yourself because if you're not aware of what you're going to likely do to yourself to throw yourself off the rails It doesn't matter what you're going to learn or what you're going to do or how much money you start with or how much time you put into it. It just means that you're going to rush to destruction. So you have to give yourself a realistic timeline.

When I first started, my plan was I wanted to retire at 40, I want to make $1,000 a month, and retire at 40. That was my plan. And I quickly learned that that was a really low objective. What was possible was a lot more than that. But I wasn't prepared to see that type of equity increase.

When I started making a lot of money, it's like a drug. And it makes you want to do more and more. And you throw that in with you didn't care about risk because I didn't.

It hurt me and I would see these huge gains and then huge drawdowns. So while I'd have really big run up and I'd have a roller coaster drop and it would just put me back in that. I got to go back and spend more time in the charts. And who was suffering?

My family. My children didn't get to see their father that much. My wife didn't get to see me as much as her husband. And I missed out on a lot. And seeing a couple photographs is not the same as being there to cheer your kid on when he's up there and he hits his first home run.

I miss that. When his basketball team wins and he made that shot right before the last bell, I miss that. But hey, I made money on lean hogs.

It doesn't measure up. Stop buying retail logic and tools. You just don't want to be filling your head up with all of this poor thinking, okay, because that's exactly what it is. Everything that you learn in retail books and courses is diametrically opposed to how the actual markets work.

So stop wasting money on books, and I've purchased either by electronic format or actual hard copy books. I have over 2,000 of them. And I won't buy another book ever again. And I wish I would have stopped the second year that I started buying them.

In my mind, I was going to buy as many books as I could because somebody out there is going to have the secret. And I can tell you, after reading over 2,000 books, none of them did. And there are some real classics in there. And the ones that I do like, I've mentioned before.

And I know some of you are new and you want to know what they are. For money management, I like everything from Ralph Vintz and Ryan Jones. They do a lot of Optimal F and Kelly Criterion.

It's a little bit advanced. I'm not saying that everyone that first starts trading should mess with that because it's meant to run your account up pretty quick. You're not going to be prepared for that, and I wasn't either.

That's why I couldn't make it work right away. So I had to learn a lot about myself and then tune it for me. How I Made a Million Dollar Trade in Commodities Last Year. It's a 1970s book from Larry Williams. That book still is relevant today.

Not every little thing in there is, but the majority of that book is. That was the real first inspiration. For me to see how smart money operates in the marketplace.

And then that was my pursuit for the rest of my life. I was going to crack these markets. So that Trading for a Living by Alex and their elder.

Market Wizards 1 and 2 just for inspiration. And Street Smarts by Linda Rashk and Larry Connors. that's it now you wanna know what to do the opposite of John Murphy's technical analysis of financial markets book that's the retail traders Bible I always recommend that one simply because you wanna learn how to do the opposite everything is being taught in that book and if you do that you can quickly see how charts are really really fun to watch then because its such a high degree a percentage of the of failing that it's more likely if you just fade those moves you'll probably see the chart work in your favor avoid looking for hot hand gurus i did this a lot on america online i chased everybody if they had a service i was trying it out at least for well back then they would do it by the week now everything's by month and uh Everything was, at the time, a newsletter or a phone number that you had to call and pay a couple dollars a minute or whatever. And it would tell you what they were trading.

And I never made money with that stuff. Even Larry Williams, not to be disrespectful towards him, but I, at one time, was paying for his hotline. And you would just call him up and he would have a recording.

And it was basically what he was going to do with the bond market and with the S&P market. And I did those trades and I lost money. Again, I'm not saying that he's not a profitable trader.

I'm not saying he's not a good trader. I'm not saying he's not a good teacher. I'm just saying my personal experience doing that, I lost money on every single trade. So avoid looking for hot hand gurus. This is the reason why I don't hold people's hands.

I don't say, this is what we're going to do. Buy here, sell here, stop. I don't do that. Because all that does is create codependence.

And you don't want to be a codependent trader. You want to be an independent thinking trader. Become your own signal generator. The big thing is always as a new trader you want to find someone that's good. You don't want to find a mentor.

You want to find someone that's going to tell you what they're doing and making money so you can copy them. And I fell victim to that too. I didn't want to trust my own analysis. I got lazy and thinking well I really just want to make a lot of money so if I can find someone that's really good I'll just copy them. And everything they do, I'm going to take the trades.

Since they're successful, even if I take a couple losses here and there, I'm just going to stick with it. So what am I really saying there? I'm saying that I'm going to use them as my system.

And I'm accepting losses. I know they're probably going to come. But I'm holding out that they're going to have more wins than losses. Now, doesn't that make sense if you apply it to your own strategy?

But when you, as a new trader, start, you don't want to accept loss. losses that's not acceptable but when you justify your spending when you buy other people's signals it's somehow brought into the reasoning part of the decision-making that it's something that's acceptable losing trades it's acceptable until you take that first loss and then you're not subscribing anymore you go back to looking for another hot hand guru Be willing to lose and lose a lot early on. It's part of it. You don't know what you're doing and no book, no course, even me, if I sat with you every single day for a month.

You would still take losses. You would lose. It's unavoidable.

But early on, when you are developing, you're going to be wrong a lot. And this is the reason why I tell people, do not trade with live funds. Until you know exactly what you're doing, and you understand yourself, and that may be longer than six months, it may be longer than a year. For some of you, it might be two, three, four years.

like a college degree and some of you aren't prepared for that and there's no shame in you saying you know what the same for me that's good that means you're not going to lose money that means you're not going to have and balances in your life it means that you're not going to hurt yourself both financially and psychologically because I did that I caused physical problems with an eating disorder I developed agoraphobia which was a fear of being around other people because I didn't want them to find out how bad I was losing and I wish I could go back in time and tell myself Losing is normal. It's acceptable. It's part of the business transactions. In this industry, you're going to have losses. Control them.

Over time, you're going to make more money than you lose. I didn't think that way when I first started. I was trying to avoid losing altogether.

And then every single loss was a paramount event. Like it was huge. It was elevated to some grandiose, painful, just terrible thing that I had been enduring.

When it's just, I did it wrong. Simple. You made a mistake, Michael, and you're going to make lots of them. 27 years from now, you're going to have so many losing trades.

You're going to look back and say, you know what? It didn't kill me. So be willing to lose a lot early on in your development. That's why you want to do it on paper.

That's why you want to do it on demo. Because you need to see what it feels like to be wrong a lot and not have the money taken from you. And then correct those problems before you put real money at work. Stay away from social media drains. Well, in this age, we have a lot of social media, but back when I first started, November 5th, 1992, social media was just starting out with message boards, or bulletin boards they call them.

So it's kind of like Twitter or... you know, not so much Instagram, but I see like Twitter, just people would just communicate with open emails, basically, as the format was whatever you would look at and see that would be sent by way of an email, it would just be a open source where people could see what everybody was doing a message board basically and I would get my feelings hurt back then because someone would say that's a stupid idea what you're doing and then when I was doing it right everybody was like man you are a rock star I'm taking that trade and I was like yeah I know I'm making money now because he or she thinks it's a good trade man that's stupid that was dumb I let other people back then influence my decisions or change the level of expectation I had on the trade because if they said me that's a good idea I think it's gonna go to 1150 when I was looking at like 1080 I'm thinking myself yeah they're probably right and I would change my trade to what they're saying because, man, I don't want them to be right and me miss out on that extra profit. You see what that trap disc did?

It took my trade away from me, and now I took their trade. Who's in control there? It wasn't me. I let go of the wheel.

Don't join trading clubs, okay? That means circles where everyone has the hive mentality because you need to discover who you are as a trader and it's very, I guess, wasteful for your time and it stunts your growth if you start going into a group. That has, well, this is the only way of trading and this is all we do around here because what you're trying to do is be part of that click. Okay.

You're trying to take on the hive mentality and it may not be suited for you, but if you waste more time and unfortunately money. You don't want to discover that you've been wasting your time and money, okay? So you want to be solo. Trading is a solo sport. It's not a team sport.

No matter how good your guru or mentor is, if you're doing everything they say, you aren't in control. You're growing codependent. Don't subscribe to alerts. That gets back to signals. You want to be the source or generation of the trade ideas.

That way, when you're wrong, you're forced to assume the responsibility. You can't say, well, I just listened to that person. They were wrong.

They suck. Well, what are you going to do about it? Well, I'm going to find somebody else. That's not responsible.

That's gambling. You're going to another slot machine at another casino. That's all that is. Versus, I want to learn how to play cards and manage my risk, not bet too big, and just be Steady Yeti at the table.

You want to be the generating source of the signals. Don't subscribe to someone else because you have no idea what got them into the trade. You don't know what influences are being imposed on them.

Maybe they had a bad day. Maybe they had just recently had a spat with their spouse. And they feel like they have to feel good, empowered.

I'm going to go out there and just tell everybody to buy S&P tomorrow at the open. And if I'm right, I'll feel good. I'll feel better about this whole thing.

Because they're human too. Do you want to be subscribing to someone that's like that? You don't know if that's what's going on. They're not going to come out and say, yeah, it's trade worked out, but let me tell you what really was going on. My wife told me I was a bum.

I spent too much time in front of these charts and I ain't spent any time with the kids and I ain't walked a dog in six months. But I knew if I got this right, I'd feel stronger about myself. That never happens, folks. That never happens.

Never subscribe to other people's alerts. Don't count other people's money. That's what's popular right now. Everyone wants to know how much money someone else has. Instagram, what cars do they drive?

What houses do they live in? Where are they having their vacation? What do they wear? What kind of shoes do they have on? Do they wear socks?

What kind of underwear do they have? What jewelry do they have? Come on. All that stuff is a waste. It's a waste.

It's a waste of your time. It's a waste of money. And you don't need all those things.

If you're trading to do that, you're never going to get there. And I want to repeat that. If you are trading to live like that. You're never going to get there because you're looking at money and you're not looking at the process that's involved that would eventually lead to profitability. So you're chasing that carrot, that little piece of candy that's dangled in front of a child.

You may be a stranger, but if you dangle that candy in front of a child, what's the child going to do? Reach out for that candy. And that's what all these people do.

They dangle all this lavish toys and lifestyle material. materialism, all of that is fluff. I've never done those types of things.

And it's important to understand that the reason why I don't do it, it's not because I lack of it. Because I have all those things. But it doesn't do anything to make you a better trader. It doesn't make you a better student.

And it will not, in any capacity, motivate you. And then that translates into a greater skill set that's derived because you saw that. It doesn't work like that. But how many people fall victim to that?

Everyone. Everyone. The first course I bought from Ken Roberts. That's all he talked about.

You want to go on vacations? You want to have enough money to quit your job? job.

You want to buy a yacht? You want to live in a mansion? That's what was sold to me. And I bought that course.

And in one trade, the very first trade, I lost 50% of what I put in. Well, I can tell you that was never said in the book. That didn't get talked about at all.

It just said, well, you can take some losses, but you don't want your losses to be too big. Okay. But what happens if it is?

Because options are a little bit different animal. And I found out the hard way. Don't be enticed by other people's money. Don't count other people's money.

Don't ask them what they make because you can't spend their money. That's why I don't talk about what I'm making. That's why I don't talk about what I have. And that's why I don't show you what I own. Because you can't drive my cars.

You're not going to spend a night at my house. You're not going to eat dinner on my dishes. And you're not going to be on my vacations. So what difference does it make? It's not going to make me feel better about myself for doing it.

In fact, I'll feel like a slime ball like I did when I was younger. Because I did that stuff to get people interested in me. And it's not necessary.

Don't feel insignificant by contrast. When you see other people succeeding or supposedly succeeding, don't measure yourself against that. Because if you do, what you're saying is, I'm only successful if I get to where they're at.

I did that. And when I stopped and said, you know what? I'm going to look at a goal that's above everyone I've seen out there.

I didn't believe anyone else was more successful than Larry Williams. And he took $10,000 to $1.2 million in one year. Actually, it was over $2 million that same year. 1987, but the crash hurt him and he had to trade it back and got it to 1.2 before the close of the Robbins World Cup that particular year.

And you can see he still has the highest percentage gain in that contest. So I said, I'm going to make more than that. because that's what that was my measuring stick and i wanted to do better than that and i always lived my life with that in mind i didn't want to say well am i good as at the time jake bernstein which he got himself in a lot of trouble and it's questionable of how much money he actually made as a trader point is I fell victim to that in the beginning.

And you don't want to do that. Don't measure yourself against someone else. Don't measure yourself against me. Don't measure yourself against somebody else you see on social media, Instagram, all that.

These people, 99% of the time, are fake. They are driving cars they don't own. And they are in homes that they don't sleep in. And the clothes that they have, many times, they're taking them back the next day. So, what's the deal?

And watches, they're all basically fake. All that stuff is a lure to make you think they're successful. If they're successful, they'll prove it by showing you they know what's going to happen in the marketplace. But strangely enough, that's the thing they don't ever do. And that's what I focus on.

I've made a reputation on telling you what I believe is the best in terms of market analysis concepts. In 1996, I penned what everybody else is out there now touting as market maker concepts in one capacity or another. It's a watered down version of what I put in lecture notes in 1996. What I started using in 1995 improved with real money.

I started teaching one-on-one sessions and they have made their way through the internet over time and now we see even more. People have wrote books about it. They've made courses about it and they even included some of the things that actually occurred in my personal life as some of their narratives and And it's all a lie.

They didn't have those experiences, but I did. And I'm the only one that can prove that makes this stuff work. Don't feel insignificant by contrast.

Because the majority of the people you see out there, they're fakes. They're frauds and they aren't what they claim to be. Match your style to your personality. This is something I picked up from Larry Williams.

It made a lot of sense. I avoided doing it for a long time. I wish I would have done it sooner.

But if you're a scalper, you're going to do very well if you make quick decisions. That's as simple as that. But if you hem and haw about trying to make a decision and you want to be a scalper or day trader, it's going to be a problem. And if you short term trade. Typically, you're the type of person that can take a trade and sleep while you're in it.

That is a real good general rule of thumb. If you can sleep while you're in a trade, then you're probably a good short-term trader. Don't force yourself into any mold. There's gurus, there's mentors, there's people out there that educate.

And unfortunately, they try to take everyone and press them into this mold, this cookie-cutter approach. And it doesn't work. Avoid doing that.

Don't try to copy someone. Their style, their image, their forte, their approach, their vocabulary. You see where I'm going with this, don't you? So many people out there on YouTube now sound a lot like ICT. Don't try to copy someone.

Be original. Make your own unique model. Don't change trading approaches. Stick to one approach.

One method. Master it and then see how you work with it. That means you're going to have to spend some time with it. Most people don't want to do that. Avoid system hopping.

Okay and the trap is if you take a trade and it loses. Okay that's reasonable but if you take another trade and you lose that's it. I'm throwing this away.

This is stupid. This method doesn't work. I did that a lot and I went through all kinds of trading systems. that's the reason why I went through all kinds of trading accounts because I wasn't consistent with anything except for system hopping that was my only consistency the baseline of my consistency was all around me not being consistent with one trading approach many traders failed at every model loses you're going to have to accept that I mentioned it earlier with the risk you can't avoid it it's part of the business treat it like Normal transaction. When you go to work, if you get sick and you miss a day's work, that's a loss.

Did you lose your job? No. Did you lose your house?

No. Did you have a little less money that week? Yeah.

That's life. Well, that's how trading works. Losses are inevitable. You're going to have them. Find your unique model and grow from it.

Don't tweak it too much once it's profitable stick with it And then what you'll find is by using a more advanced money management approach if you have a method that gives you a delivered Result that's measurable and it's consistent enough that it does it more times than it doesn't if you add impeccable risk management and money management to that you will become wealthy in this story there's no ifs ands or buts that's the way it is but you cannot get to that point until you go through all these other steps that are very very boring admittedly but they're all part of the process settle on one trade setup initially determine your asset class Pick one market asset class. It's a commodity, it's an index future, it's a forex pair, it's a cryptocurrency, it's a stock. Whatever it is, stick to that one asset class. And inside that one asset class, pick one market.

Outline when you want to buy. That means what's the criteria that you feel comfortable with when it's a buy. And then outline that and make it as detailed as possible.

Put it on paper. And the same thing with you when you want to go short, what's the characteristics and circumstances that would drive you to believing it's a short? And with that, you want to build many study journal cases.

Notice I said not live trades with real money. You want to have a study journal that has a plethora of examples of where this worked in the past and when it didn't. And study them at great lengths. So that way you get familiar with what it looks like by recognition. And then when you see live price action, you'll recognize it as it forms.

Now. With all those things, you have something to start with. And now you can plan your beginning.

In part two, I promise I won't be so long-winded and boring. We're actually going to give some insights on how you can go into the marketplace and study a very particular thing. And what that is, is the optimal trade entry.

Until I talk to you then, I wish you good luck and good trading.

Transcript for:Conversations with My Younger Self

Transcript for:
Conversations with My Younger Self