Episode 240: Being Negative Always, Always Costs Money

by producer on March 26, 2014

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In Episode 240 of The Traders Podcast, you’ll hear your host Rob Booker talking with Matt LaCoco about all the negativity that’s thrown at brand-new traders. Rob and Matt discuss why there are so many naysayers. Then they explore the positive aspects of trading that new traders can anticipate. Matt says that “being negative always, always costs money.” Rob and Matt also discuss how their friend, Shonn Campbell, now trades with the perspective of running a business as a warehouse owner. This episode is a little bit unique, because it ultimately turns into a couple of friends just wrapping about their trading. Don’t miss it, and thanks for listening.

Links from this episode:

Matt’s Awesome Trading Blog

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Rob on Twitter: @RobBooker

The Traders Podcast on Twitter: @TradersPodcast

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{ 5 comments… read them below or add one }

John Gear March 26, 2014 at 6:37 pm

Hi guys, great show.

I have been thinking about this subject for a while as I have been a losing trader and, although really optimistic about trading, felt the pressure of failure. One reason why I think people find trading hard is often because they expect it to be a holiday- but it’s not. Trading is working and like any job it requires discipline . The hard thing is being your own boss and answering to your self. which is hard if you hate the way you have to do your job.

Matt gives some really important advise here when he says “go make some chunky sauce”- the best way to be good at trading is by defining the method that you enjoy (or don’t hate) trading. It’s not enough to say I need a high win percentage or I like long term trades- the trading process almost needs to resonate with you to really work.

Regards
John

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Simon March 27, 2014 at 10:22 pm

“So easy a monkey could do it”

I could hear the cogs turning in Robs head when Matt said this..

Maybe this experiment could be a little impractical with an unruly simian but I have often thought about seeing how a child might trade. Maybe 4 or 5 with enough attention span to follow simple instructions. No baggage. Beginners mind.

I imagine the experiment might go like this. Set up a very basic display in Metatader with Fischer Price sort of colours and Duplo style candles. Or maybe no candles. Just a moving average. Short timeframe.

Have a simple hardware interface to make trades – Big Up and Down buttons.

These are the instructions..

Press Up when it you think it will go up and press down when you think it will start to go down.
If you get it right you can make the funny man on the other screen laugh.

I reckon it would be fascinating.

Thanks again for a great podcast..

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Brian Fortin April 2, 2014 at 11:30 am

I agree that we make trading too difficult, and Rob has even remarked upon this when he said new traders who know nothing yet often meet with great results, but there’s a flaw in your logic that a child or a monkey could trade. Your indicators, your system, and your money management, don’t make you win. They ensure you stay alive long enough to capitalize on favorable conditions. The MARKET decides when you win, and a child doesn’t have the patience to wait for those conditions. A lot of people have blown out because they didn’t recognize this distinction, systems and indicators are designed to keep you in the game to find the easy money, not make the market reward you.

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Brian Fortin April 2, 2014 at 11:02 am

A comment on the negative mind set:

Trading is a skill sport. Performing that sport on the deck of a rocking ship makes everything more difficult. A negative mind set is what rocks the boat.

For example: A lot of traders begin live trading without back testing and examining the probability involved. Therefore, they go all to pieces when what should be expected, actually occurs and surprises them. If one takes just four trades in a 250 day trading year, that amounts to 1000 trades a year. Using a simple coin flip for our resuts, we can expect, with almost 100% probability, ten wins in a row and/or ten losses in a row during that trading year. The unprepared trader thinks himself a genius during what should have been a chance run of wins, and a fool during the ten losses in a row. The prepared trader merely executes his drawdown rules and position sizing plan and hangs on, measuring whether something unexpected is occuring. During this crisis, WHICH THE UNPREPARED TRADER CREATED, naysaying and negativism will eat you alive. The negative trader is likely to alter his money management, change or even abandon his system, or do something suicidal like ANYTHING SPONTANEOUS. Then they go into what I call the death spiral.

My point isn’t that you have to remain positive to trade, although that may be so. My point is that too many things can go wrong on too many aspects of trading if you allow negative thoughts to pervade your mind. Trading is a business, and negative employees are bad for business.

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Cavex April 3, 2014 at 11:24 pm

Very good episode! I’m going to listen to this again.

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