Difficult Markets Produce Fine Results – Part 1

[analyst75 12]

“Trading requires you to be wrong on a regular basis – in fact you are wrong more often than you are right. And this constant grind requires a certain degree of fortitude to endure.” – Chris Tate

 

There’s no way to become victorious easily.

 

You don’t become victorious by trying to be victorious. You become victorious be surmounting the challenges life puts in your way.

 

Trading success doesn’t come by accident. You’d attain it through hard work, humble acceptance of reality, faithful endurance under difficult challenges. What a remarkable example for many traders today! Never forget that your breakthrough is largely in your own hands.

 

Trading mastery isn’t beyond your ken, though you might emote that nothing good comes cheap. Where you’re coming from doesn’t matter, but where you’re going. Your dismal trading experiences shouldn’t deter you from attaining your dreams as a victorious trader.

 

Difficult Markets Produce Fine Results

Unlike those who become envious and sad when they see their fellow human beings making solid achievements in life, I’m happy whenever someone becomes successful in life. I’m happy whenever I come across a successful trader, just because it strengthens my conviction that it’s possible to be a winning trader. This also serves as a powerful testimony to doubting Thomases in the public.

 

As a one-on-one trading coach (not via webinars or trading rooms), I’ve trained many people the art of trading and I’m happy whenever they go on to become successful market players.

 

Some people completed their training and then abandoned the markets. Some didn’t bother to finish their training. Some completed their training and then abandoned the Golden Rules given to them, doing something else. Every strategy under the sun must be accompanied by the Golden Rules; otherwise the joy of trading won’t last long.

 

I need to mention this fact: Trainees simply do themselves a favor when they get coached by successful traders who’re also talented teachers. It’s common for someone to think they’re doing you a favor by hiring you to coach them. Unless the coach isn’t a successful trader on her/his own (which is very common), it’s the coach who’s doing the trainees a favor by revealing their winning systems, which took them many years to perfect.

 

It’s a great joy for me to see that some of my former trainees are now successful – a good evidence that difficult markets produce fine results.

 

One of those successful traders who happened to be a past trainee is called Caleb by name. He got coached several years ago and undoubtedly, he was practicing with the markets.

 

Last year, some of his acquaintances told me that Mr. Caleb had been making money from the markets. That was no big deal, for the Golden Rules of trading work for everybody who applies them faithfully, but what made me surprise was the fact that year 2015 was a very difficult year for traders, and if anyone made money in the markets in that year, then it’d be much easier for the person to make money in years when the markets become favorable.

 

I began to plan an appointment with Mr. Caleb because his trading results in the year 2015 were 3 times better mine (who’s his former coach). Some days later, he sent me his full account history. I was amazed to see that he made decent profits in the most difficult months of that year. This guy wasn’t a lucky gambler who used high risk to make maximum profits in a short period of time. Instead, he’s a conservative trader who goes for very small but consistent profits.

 

I was also amazed by these facts I discovered in his trading habits:

 

1. His was trading manually

2. His trading took him only 5 hour per week, for he was then working full time for an employer

3. His position sizing methods were safe and sensible

4. He used stop loss and stuck to them religiously

5. He’s one of the most disciplined traders I’ve ever seen. He sometimes cuts his negative positions before they hit his stops

6. He sometimes used take profits, but not always (a method exposing him to unlimited gains which can wipe out his many small losses)

7. He’s the fortitude and patience to endure days or weeks of losses, knowing that some big wins would soon wipe out those losses

 

The above list is part of his secrets. I think some of these things are what every trader should do, irrespective of their trading methodology.

 

One day, as I was walking beside a paved road on a campground, he pulled up his jeep and gave me a lift. We talked briefly and he gave me an appointment. I appreciated this because he was a very busy man.

 

That’s another point. He was able to trade his way to success despite his very tight schedule, contrary to the excuses certain people give for not trying trading (they wrongly think they’re too busy to trade). I was able to see Mr. Caleb where he lived. He told me that the trading method he used was similar to what I gave him several years ago, but with some modification.

 

What was this modification? That was what I wanted to know. Clearly a former trainee can become better than his coach. Mr. Caleb is a good example. He’s a bright trader indeed!

 

I interviewed him about his entry criteria, risk control style and money management approach. What were his stop loss and take profit levels? What factors did he consider before making trades? What about his exit strategies? Mr. Caleb took out his laptop and explained everything to me in a generous and transparent way.

 

The interview was an eye-opener. It would be posted in the second part of these series, so that you can gather some points that might potentially help you in your own trading too.

 

This piece is ended by the quote below:

 

“The fact that I trade my own strategy, in my own broker account, lets people know that I believe in my own work, and I'm willing to stand behind it with my own money.” - Jan Roozenburg

 

Copyright: Tallinex.com

[zdo 20]

Great post A75 !

thx

 

Your insights into trading teachers and students meshes with things I’ve posted over the years here in TL. I will emphasize (again) that traders should only seek a teacher, coach, or mentor after they are ready - not before. I will also add (again) that teacher, coach, and mentor are distinct specialties and it is very rare that an individual can provide services in more than one of those specialties.

 

Btw, Caleb also sounds like a perfect example of ‘find your own way’ which I’ve also banged on over and over in here.

 

The only place where I disagree with you is re: “Trading mastery isn’t beyond your ken”. Trading mastery is actually beyond the ‘ken’ of all but a few.

 

Re: #'s4,5,6 above - I’m back home for a couple days. Came into the office for a few minutes today to

1 check and move stops,

2 take some losses (no 6’s at this time) ‘manually’/early, and

3 adjust some sizes (simultaneous with a bit of rollover)

for all my discretionary longer holding period trades ...

[JoelDarr 10]

Nice article. I wonder though... I suppose this could be considered bad habit in certain situations: "He’s the fortitude and patience to endure days or weeks of losses, knowing that some big wins would soon wipe out those losses". What I mean by this is that if you blindly keep up to the losing stock or a defective trading strategy blindly - this might bring some pretty sad results. I guess I'm carping some minor details now, but I thought I had to point this out

[zdo 20]

Joel,

re:

“...I suppose this could be considered bad habit in certain situations: "He [has] the fortitude and patience to endure days or weeks of losses, knowing that some big wins would soon wipe out those losses...".

 

Best for traders to avoid viewing that virtue via “in certain situations”.

Instead frame it in terms of ‘system specific’.

For example: The closer to true trend trading your system/method is the more import “fortitude and patience and endure “ have - especially in the early stages of a position. The further away from true trend trading your method system/method is, the less “fortitude and patience and endure “ is indicated... ie some systems require complete absence of “fortitude and patience and endure “

 

Btw, most noobies working to apply trend oriented systems are far more likely to develop the “ habit” (in certain situations ) of NOT having the “fortitude and patience to endure “ winning positions.

 

See ya’ll later...

 

zdo