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torero

Rewarding yourself

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I was reading John Carter's book about rewarding himself in the trading plan section. The mentions how he rewards himself for following his plan with a new car, country farm, etc. It's a bit on a high end for me but I wanted to know how traders reward themselves when they follow their plans in losses and wins.

 

For me, the reward is withdrawing cash from the account for winning trades upon following my plans to the letter. For losing trades but still following the plan to the letter, I reward myself with an ice cream or a music CD or buy a CD rack. I think the withdrawing cash reward ties in with money and it's a no-no but I think it's also an incentive and a reminder why I should follow my plan.

 

How do you guys reward yourself?

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Very interesting point, torero. In my opinion rewarding yourself is very important to grow as a trader. Having money on the account is nothing but figures. You need to reward yourself and spent some money from the gains to train your brain that when you are doing things the right way - you can fulfil a great wish. This is described as a positive reinforcement by pavlov (Operant conditioning) - Wikipedia, the free encyclopedia.

 

I'm lightyears away from buying a country farm from trading gains like JC mentioned, i am aiming for these very expensive things in 10 years or so, but still have them in my trading plan as a far end goal with a lot of minor little goals before the big one.

 

Currently i am rewarding myself with spending a great weekend with my girlfriend in a wellness hotel, going out for dinner, buying some clothes or doing a short weekend trip in a city i like to see.

 

It is helping me a lot because i can say that e.g. this weekend was completely "sponsored" by my trading wins and it supports me in doing the right things in the future to have this great feeling again.

 

nice weekend

Norman

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Good thread tor!

 

All traders, esp those new to trading, could learn a lot from the info we share here.

 

Here's my basis for doing what I do before I explain the specifics - I found that much of what I learned and was taught while a stockbroker translates very well into full-time trading. As a new stockbroker, you are taught that many, many hours, months and years of hard work are required to get the elite level (just like trading). We were also taught that if you follow your 'plan' you NEED to reward yourself, regardless of the commission screen (or P&L). My goal as a new broker was to contact 25 people per day and offer them some sort of investment service. I was taught that as long as I did this, the commissions would soon follow.

 

And you know what? They were right! My first month I made $60 in gross commissions. I could not believe I was working 10-12 hr days and took home a whole 60 bucks gross (good thing they also paid us a monthly salary for 12 mo's). But you know what? I stuck with the plan and each and every month that number increased till I got the point where it was a matter of much $$$ could I make that month...

 

And towards the end of my tenure as a broker, I just laughed when I thought about the tough times of working all day and all week and making very little.

 

What does this have to do with trading and rewarding yourself? Everything.

 

As long as you follow your plan, you need to reward yourself, no matter how little it may seem now. You have to program your brain to think that if you just follow ABC then you will be rewarded with XYZ. Just like training a dog - as soon as your dog realizes that it gets a treat when it shakes hands, it will shake hands any opportunity it gets. I know, that's a very simplified explanation, but the idea holds true.

 

Here's where I think many traders fall short - as an individual trader, most do not have that structure in place (like a corporation) that tells you over and over again to just follow the plan and you will make money. None of us have that luxury. And had I never been a broker, I probably would not see the difference either. I had so many tough days as a new broker and when I called another broker, went to training, etc. it was drilled into my head to just keep doing the work and the $$ will come. And it did. Traders just do not have that service available at all b/c 1) many doubt their trading systems to begin with and/or 2) if it does work, many aren't sure that it does b/c there is no reinforcement.

 

It's a very tough situation in my opinion. If you do not come from a sales career, bridging to trading is difficult in my opinion simply b/c you do not have the knowledge and experience of what is expected of commissioned sales people. And trading is no different - we are not working for commissions, but we also do not make a penny unless we do our job. And even if you do your job, you still may not make any money. That's a difficult hurdle for many.

 

Sorry that I digressed here, but I think the topic is a great one tor and everyone needs to reward themselves for doing their job b/c no one else will.

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brown....PERFECTLY said! I, too, came from a sales gig where I was 100% commission except for the first 3 months. It was HARD! I had to move out to a new state (whole new part of the country) with my girl and start a new life. They, too, taught me...do ABC and you'll get XYZ. I did ABC for hours upon hours a day, day after day, week after week until I was the one new guys were asking questions of (when I was 6 months out). It didn't take me too long to become one of the higher paid guys there (the highest for my tenure there) and holy moly does it translate into trading. When I had a big sale...out to dinner I went :) 2 big sales in a week? Went out for dinner, twice in a weekend! haha (my town is so boring all there is to do is go out to dinner)

 

So, I agree completely that coming from a sales background helps bridge the gap between the former job and the new job of trading.

 

Just thought I'd add.

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tin - that's cool that we have similar sales backgrounds before entering trading. Until you've actually been on 100% commissions and trained by a company that knows what they are doing, it's hard for others to understand. When I decided to make the jump to full-time trading I did not expect so many things I learned at the firm to translate over to trading.

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When I decided to make the jump to full-time trading I did not expect so many things I learned at the firm to translate over to trading.

 

like the lack of instant income? :) hehe Thats the most major thing that I think is tough for people who don't come from sales backgrounds to grasp. I knew it was gonna be tough, and it still is. But I know that by following the plan, it's gonna be OK. Then...I get to reward myself :)

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like the lack of instant income? :) hehe Thats the most major thing that I think is tough for people who don't come from sales backgrounds to grasp. I knew it was gonna be tough, and it still is. But I know that by following the plan, it's gonna be OK. Then...I get to reward myself :)

 

Good point. When you come from a background where you learned to accept fluctuations in income, transitioning is a little easier to trading. It also helps to have come from a position where earning 'good' money was expected. What I mean is that if you think that 5 or 7 grand a month is good money, you may be leaving a lot on the table. Don't get me wrong, 5 grand a month is a nice income from trading, but coming from a position where you would be fired for earning that, it can light a fire under your butt.

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Is there or should there be a different reward type/level for following the plan perfect that resulted in a loss and a win? I believe they both should be rewarded equally but the final result (monetary) makes it a slight difference, at least in my reward system. I think this is where the difficulty for news traders to grasp, you obey the rules and still get negative response (a gain) AND sometimes you get a positive response (a loss) even when you don't follow your rules. This create in the end a confused mesh of reinforcements that screw up everything in the end. Agree?

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Hey T...I totally agree that whether you make or lose money, as long as you're following your plan to the letter that you oughtta reward yourself in some way. Maybe it's just something as simple as getting that pint of your favorite ice cream and indulging a little...which I've been known to do. :) Or maybe you lost some money on a beautiful day weather wise and you decide to treat yourself by being outside for an extra long walk. That's free and you get to be out with nature for a little longer than usual. that's always a beautiful thing.

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Is there or should there be a different reward type/level for following the plan perfect that resulted in a loss and a win? I believe they both should be rewarded equally but the final result (monetary) makes it a slight difference, at least in my reward system. I think this is where the difficulty for news traders to grasp, you obey the rules and still get negative response (a gain) AND sometimes you get a positive response (a loss) even when you don't follow your rules. This create in the end a confused mesh of reinforcements that screw up everything in the end. Agree?

 

tor - great points. The problem all traders face is that until you know for sure that you can trade profitably, it's hard to reward yourself for losing money. And it becomes even harder when you stray from your rules and make money. You've just taught yourself that you can stray and make money; whereas your actual rules lost you money (at least on this particular day).

 

It boils down to knowing if you can make money following your rules or not. Until you are 100% confident, there will always be a game going on in your head.

 

That is the biggest challenge I have seen coming from an environment where everything was laid out in front of you, all you had to do was what you were told. We do not get that luxury in trading. Sure you can buy books and manuals, but there is no guarantee those even work. After years in the stock business and now years in trading, I can tell you that trading is much more difficult, esp in the beginning. And that is due to simply having to create your plan yourself from scratch and then see what works and what does not work. And hopefully you can stick around long enough to find what does work... It's a challenge to say the least.

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Interestingly I was reading the first couple of chapters of Curtis Faith's new book "Way of the Turtle" and he points out an area where ex-sales types may be at a disadvantage (although five or six months on commission only waiting to become rich does toughen one up a bit - especially after the 3 months guarantee runs out).

 

Outcome bias: The tendency to judge a decision by its

outcome rather than by the quality of the decision at the

time it was made.

 

Sales types are very focussed on the numbers. No matter how much process is discussed you end up a hero or dead on your numbers. So it may be harder to detach from outcome and focus on process than for some other former careers.

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Kiwi - I'm sure we could make arguments about the best types of careers to come from for trading. I personally have come from sales and see the many correlations, so I think it's an advantage. And until someone has actually gone thru what myself and tin have, I take no stock in their comments. I'm sure the author of the book is a smart guy, but until he's been in a sales environment for years and successful at it, just another opinion.

 

Just like any other book on trading, it's all just someone's opinion and that's fine. But I am of the belief that until you actually do what you are commenting on, it's just a speculative opinion. For example, I would think that being a social worker can be a rewarding job even though it pays very little. Now, someone that was actually a social worker may disagree completely and say that with all the red tape, the job is terrible. Obviously my opinion was not worth much b/c it was based on my opinion only.

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You might want to look up Curtis Faith.

 

I have gone through "what you have" both as described above and as a manager of sales people and as a manager of managers of sales people.

 

What I don't have is experience of seeing many of them move to trading. What I do have is experience of seeing a lot of people move to trading and fail.

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You might want to look up Curtis Faith.

Faith is Galt's Chief Investment Officer. He is an original Turtle, an elite member of Richard Dennis' trader training program. Called the most successful of the Turtles by the Wall Street Journal, Faith has been developing computerized quantitative investment strategies for more than 20 years.

 

Faith is also a seasoned technologist and entrepreneur. He has founded and/or worked on the startup team for several enterprise software and technology companies including Borealis, Sierra Software, Efficient Field Service, OneCard, and ScoutFire.

Galt Capital: The Most Profitable Community Of Investors In The World

 

- Ok, there is his bio. Not sure what I am supposed to see here b/c I see no reference of being in an actual sales position.

 

I have gone through "what you have" both as described above and as a manager of sales people and as a manager of managers of sales people.

 

What I don't have is experience of seeing many of them move to trading. What I do have is experience of seeing a lot of people move to trading and fail.

 

OK, missing the point again... I don't see how this translates to the argument that previous sales people make bad traders. The fact that a lot of people fail has no correlation to a previous career as a sales person.

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You can be obtuse. Where does this say "sales people make bad traders?"

 

 

Interestingly I was reading the first couple of chapters of Curtis Faith's new book "Way of the Turtle" and he points out an area where ex-sales types may be at a disadvantage (although five or six months on commission only waiting to become rich does toughen one up a bit - especially after the 3 months guarantee runs out).

 

Outcome bias: The tendency to judge a decision by its

outcome rather than by the quality of the decision at the

time it was made.

 

Sales types are very focussed on the numbers. No matter how much process is discussed you end up a hero or dead on your numbers. So it may be harder to detach from outcome and focus on process than for some other former careers.

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Let's see where it is implied that ex-sales persons make bad traders:

 

> he points out an area where ex-sales types may be at a disadvantage

 

> Outcome bias: The tendency to judge a decision by its

outcome rather than by the quality of the decision at the

time it was made.

 

> Sales types are very focussed on the numbers. No matter how much process is discussed you end up a hero or dead on your numbers.

 

> So it may be harder to detach from outcome and focus on process than for some other former careers.

 

Now, since I am 'obtuse' please elaborate on how those comments do not imply or flat out say that ex-sales persons may be a bad trader.

 

And if this is not your point, what was the point of the initial post to begin with? Tin and I shared REAL LIFE examples of how coming from a sales background was to our advantage and you chime in with some quote from some guy's book who's never been in sales... What exactly were you trying to share with the group?

 

PS

If you want to start the name calling, feel free to spend your time over at elitetrader. To say that I am "Lacking quickness of perception or intellect" is what I expect over at that place. Take your name calling elsewhere unless of course the plan is turn TL into another version of ET. Completely immature Kiwi and it simply shows how childish some people are, regardless of what forum they may post on.

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LMAO brownsfan, You take the cake (and can keep it).

 

Why so incredibly defensive? Not only does it not say "sales people make bad traders" but you take name calling to a special level. Very small.

 

James. I can't be bothered with his sort. Hope the site rises above him.

 

Good luck.

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Guest cooter

Yep, looks like the ET attitude is slowly creeping in over here.... Shame.

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Hi guys,

 

Let's do our best here to respect each others opinion and keep the debates constructive. No need for personal attacks and such. Please lets try to keep it friendly and educational. Thanks

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This is the best message board I have ever seen for traders.

I hope it stays that way.

I don't have time to post during the week, but I do like to read on the weekends.

Thanks SoulTrader.

 

Hi guys,

 

Let's do our best here to respect each others opinion and keep the debates constructive. No need for personal attacks and such. Please lets try to keep it friendly and educational. Thanks

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LMAO brownsfan, You take the cake (and can keep it).

 

Why so incredibly defensive? Not only does it not say "sales people make bad traders" but you take name calling to a special level. Very small.

 

James. I can't be bothered with his sort. Hope the site rises above him.

 

Good luck.

 

Kiwi - you want to call me obtuse and then act like you did nothing wrong? Give me a break. For the record, no name calling was done on my part. That was initiated and started by you. In an attempt to understand what the point of your post was, you could not explain like an adult, you resorted to name calling.

 

So, when you refer to someone as obtuse and then wonder why they are defensive, either 1) you have no idea what that word means or 2) got called out and ran with your head between your legs.

 

Enjoy your time ET, I'm sure I'll see you over there. :p

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Hi guys,

 

Let's do our best here to respect each others opinion and keep the debates constructive. No need for personal attacks and such. Please lets try to keep it friendly and educational. Thanks

 

James - that is very easy to accomplish as long as people are willing to explain their opinions vs. resorting to name calling. Kiwi obviously did not have anything meaningful to share, so he did what my 3 yr old nephew does.

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James - that is very easy to accomplish as long as people are willing to explain their opinions vs. resorting to name calling. Kiwi obviously did not have anything meaningful to share, so he did what my 3 yr old nephew does.

 

I dont want to point any fingers here at all. Both of you guys (brownsfan and Kiwi) have made great contributions to the forum and would hate to see any disputes. Let's crush this heat and try to get along? :)

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I dont want to point any fingers here at all. Both of you guys (brownsfan and Kiwi) have made great contributions to the forum and would hate to see any disputes. Let's crush this heat and try to get along? :)

 

James, I agree. As you can see by reading the posts, I was not the attacker here. As Kiwi knows, any good trader has an ego and when attacked, most people will fight back. That's a simple human response.

 

I have to assume that Kiwi thought by using a fancy word like 'obtuse' that his comment would be taken lightly. As far as I am concerned, it's the same thing as saying you are stupid. I may not have my thesaurus handy like Kiwi, but the meaning of the word is the same.

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Guest cooter

This may be off-topic, but just to provide some perspective as to what triggered all of this. Words DO have specific meanings....calling someone obtuse who recognizes the nuance of this word, will provoke a reaction (providing, of course, that they're not really obtuse after all ;) )....

 

obtuse - Definitions from Dictionary.com :

 

 

ob·tuse –adjective

1.not quick or alert in perception, feeling, or intellect; not sensitive or observant; dull.

2.not sharp, acute, or pointed; blunt in form.

3.(of a leaf, petal, etc.) rounded at the extremity.

4.indistinctly felt or perceived, as pain or sound.

 

[Origin: 1500–10; < L obtūsus dulled (ptp. of obtundere), equiv. to ob- ob- + tūd-, var. s. of tundere to beat + -tus ptp. suffix, with dt > sthinsp.png]

 

â€â€Related formsob·tuse·ly, adverb

ob·tuse·ness, noun

 

â€â€Synonyms 1. unfeeling, tactless, insensitive; blind, imperceptive, unobservant; gauche, boorish; slow, dim.

 

 

Dictionary.com Unabridged (v 1.1)

Based on the Random House Unabridged Dictionary, © Random House, Inc. 2006.

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Gold’s Outlook – Uptrend may continue, but US jobs data could trigger profit-taking. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. 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    • Date: 31st March 2025.   Trump Confirms Tariffs on All Countries, Sending Stocks Lower.   The NASDAQ continues to trade lower due to the US confirming the latest tariffs will be on all countries. In addition to this, bearish volatility also is largely due to the higher inflation data from Friday. The NASDAQ declines to its lowest price since September 11th 2024. Core PCE Price Index - Inflation Increases Again! The PCE Price Index read 2.5% aligning with expert forecasts not triggering any alarm bells. However, the Core PCE Price Index rose from 0.3% to 0.4% MoM and from 2.7% to 2.8% YoY, signalling growing inflationary pressure. This increases the likelihood that the Federal Reserve will maintain elevated interest rates for an extended period. The NASDAQ fell 2.60% due to the higher inflation reading which is known to pressure the stock market due to pressure on consumer demand and a more hawkish Federal Reserve. Boston Fed President Susan Collins recently commented that tariffs could drive up inflation, though the long-term impact remains uncertain. She told journalists that a short-term spike is the most probable outcome but believes the current pause in monetary policy adjustments is appropriate given the prevailing uncertainties. Although, certain investment banks such as JP Morgan actually believe the Federal Reserve will be forced into cutting rates. This is due to expectations that the economy will struggle under the new trade policy. For example, JP Morgan expects the Federal Reserve to delay rate cuts but will quickly cut towards the end of 2025. Market Risk Appetite Takes a Hit! A big factor for the day is the drop in the risk appetite of investors. This can be seen from the VIX which is up almost 6%, Gold which is trading 1.30% higher and the Japanese Yen which is the day’s best performing currency. Most safe haven assets, bar the US Dollar, increase in value. It is also worth noting that all indices are decreasing in value during this morning's Asian session with the Nikkei225 and NASDAQ witnessing the strongest decline. Previously the stock market rose in value as investors heard rumours that tariffs would only be on certain countries. This bullish swing occurred between March 14th and 25th. Over the weekend, President Donald Trump indicated that the upcoming tariffs would apply to all countries, not just those with the largest trade imbalances with the US. NASDAQ - Technical Analysis In terms of technical analysis, the NASDAQ continues to obtain indications that sellers control the price action. The price opens on a bearish price gap measuring 0.30% and trades below all Moving Averages on all timeframes. The NASDAQ also trades below the VWAP and almost 100% of the most influential components (stocks) are declining in value.     The next significant support level is at $18,313, and the resistance level stands at $20,367.95. Key Takeaway Points: NASDAQ falls to its lowest since September 2024 as the US confirms tariffs on all countries, adding to inflation concerns. Core PCE inflation rises to 0.4% MoM and 2.8% YoY, increasing the likelihood of prolonged high interest rates. Investor risk appetite drops as VIX jumps 6%, gold gains 1.3%, and safe-haven assets outperform. NASDAQ shows strong bearish momentum, trading below key technical levels with support at $18,313 and resistance at $20,367.95. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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