Thursday Notes – Graduating Into Life

A lot has been written and passed around the industry about my successes in the mid to late 2000s.

And while the 800%+ 2004-2010 performance (including an industry leading 2008 performance for my asset class which was chronicled on a daily basis on the initial blog) is indeed 100% real, I’ve tried more times than not to use this blog and other public pulpits over the years to talk about the tougher times.

For example, the early days when I – like all accomplished traders before me – repeatedly fell as I was learning the ropes.  For such was a strong theme of my public speaking and daily TradingMarkets columns and lessons in the early 2000s.

The slumps or days when it seems that I’m fouling off pitches that are so close to home runs that the bitter taste in my mouth burns.

The bangs on the head, such as those infamous October 2008 and May 2010 days.

And those occasional days — and they still happen to all of us from time to time — when I simply didn’t have the dedication, heart, nerve, or courage to trade to my level of potential.

You see, as I mentioned in December’s presentation to Linda Raschke and her team, this business is ALL about maximizing gains when the opportunity arises and you’re on your game, and minimizing the damage when all of the above happen.

And oh, will they happen.

And they’ve happened in spades to this trader.

For one doesn’t reach the heights of either the industry or - more importantly – one’s true potential, without getting dragged through the mud and barbed wire of this business.

As a trader and instructor, I find too often that traders are unwilling to do two things:  (1) “Do whatever takes” to make their business work, and (2) playing it far too safe … i.e. having a tremendous lack of heart or nerve when conditions MANDATE they do.

And when I sub-optimize my own performance, I too fall into those same categories.

Examples:

Want to profit from a highly anticipated MATD?  Well, you’d better be willing to get your a$$ up at 3am ET to catch the far higher probability and better paced Europe open than what many international traders refer to as the whippier U.S. “Cowboy” open.

Most of course won’t for a number of reasons … and thus settle for, well … average.  Here’s a hint to all those who wonder how someone can achieve the returns I have.  Get up earlier and work harder than everyone else.  For example, it’s now 6:13AM ET as I write this and my MATD trading is pretty much done for the day as I was up at 3AM.

Have that 90%+ probability setup?  You’d better have the focus, courage, and nerve to both take the trade AND maximize your bet size.

See the whole world running for the buy or sell buttons?  You’d again better have the nerve to step in and take the other side at the right time  – and EVERY TIME — while embracing that ever-so-critical concept of variance that reminds us that you WILL get dragged through the mud during those rare times when the far lower probability occurs.  And you’d better have learned WHEN such timing is right.

At this end, when I don’t do the above, I might as well simply write a check out to other traders.  And yes, opportunity cost is AS critical as real financial loss … even more so for traders who truly “get” this business.

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In three days, my oldest daughter Courtney will be graduating from Ithaca College.  She’ll have diploma in hand as she pursues her career in the media industry. 

She’s heading to the west coast, doesn’t have a job yet, yet is willing to do what it takes and go through the trenches to make it work.  She’s also confident that her God-given and honed abilities will further develop and serve her well. 

Courtney is clearly taking a risk as she forgoes a more traditional and stable road of initial security to pursue her passion.  And she’ll undoubtedly go through her struggles, get repeatedly banged on the head, and even get criticized by a few in the “cheap seats” who will never take the field.

Winning or losing won’t be the issue.  Giving it her all will be.

Sounds like a trader I know.

Yet as was once said by someone far greater than me, and which I first posted on April 16:

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better.  The credit belongs to the man in the arena, whose face is marred by dust and sweat and blood; who strives valiantly … who knows the great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who have never known neither victory nor defeat.  – Teddy Roosevelt

Across the world this month, hundreds of thousands of students are graduating from high schools and colleges.

Yet as is the case in this business of trading, such an event simply marks the beginning of a life long journey in which there is no true graduation.

And while education - whether it be college or our highly acclaimed Jellie trader video course – can instruct us how to circumvent the mud and barbed wire, we must still set sail every morning knowing we’ll get dirty and scratched.

For such battle scars will make all of our nights to dance possible.

May God richly bless Courtney, all graduating seniors, and all educators and traders throughout the world.