Episode 281: Most Traders Don’t Fail

by robbooker on August 18, 2014

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Episode 281 of The Traders Podcast features a special introduction by Spencer, an apparently faithful listener who recites our intro via voicemail. Anyone else is also welcome to call in to The Traders Podcast and leave us a voicemail message at (801) 382-8789. The main portion of this episode is a Rob Booker rant in response to an e-mail Rob received from a fellow trader educator, who shall not be named. In the midst of explaining why traders fail, this solicitor said that most trader educators are scam artists! Rob takes issue with this and explains why. This episode is a good time. Join us! Thanks for listening.

And here is Rob’s video interview with Ben from England. Be sure to check it out!

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{ 17 comments… read them below or add one }

Prochargedmopar August 18, 2014 at 4:30 pm

All Ive got to say is that if you want to eat a box of cocoa-puff every day you better do it in the evening.
http://www.carbbackloading.com
Better yet just do it once a week if your not a weightlifter.
http://www.carbnite.com

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Bob August 19, 2014 at 12:06 pm

Personally I think if you’re an trading educator who doesn’t trade you should say so, and also say why that is. Probably because they could understand what to do mentally, but couldn’t handle the emotional side, which is basically what trading is. Which explains why they are charging money because if a real trader had a system that worked consistently they wouldn’t need money so they could share their ideas for free.

The real reason traders charge for their training is because that extra money provides an income so they don’t have to depend on trading to survive. Then they would be trading with “scared” money and would have to take profits quicker because they can’t take the chance of letting that income slip away because they have bills to pay. When you have an extra income, it doesn’t matter what it is, you have risk capital every month to lose, which makes a night and day difference to one’s ability to let winners ride.

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BrianF August 19, 2014 at 2:29 pm

You don’t go to someone who owns a sewage treatment plant to learn how to be a plumber, you find an articulate plumber who knows his trade and you learn from him. I think we doom ourselves as traders right from the git go because of our primate craving for status. (Read Gustave LeBonn’s The Crowd for a great book on trading) Instead of looking for a small retail trader to teach you how to do small retail trading, we listen to big hedge fund managers, former pit traders, and million dollar authors with multiple book sales. Unfortunately, none of these animals are small retail traders. Hedge fund managers can’t trade like you due to size, and the fact that the industry forces them to jump into and out of the same 100 big movers as every other fund manager. Let’s face it, you don’t risk a $20 million per year job just to make $22 million, knowing that if you under perform, you are gone. We look up to former pit traders, but most of them couldn’t make the transition to electronic trading, so how reasonable is it to believe they can teach you small retail trading? Finally, there’s the bit bloviating (Russians with Dr. titles) authors with multiple best sellers (being first isn’t the same as being best). As Rob has discussed in this podcast, the trading book sector of the publishing industry is wafer thin. Books that get published MUST be books that they think will sell. It’s irrelevant if they will help you succeed as a trader, the publishers are fighting to survive, and I am NOT criticizing them, they are not traders, so they are following what the crowd wants. Rethink this reality for a moment, the greatest book on how to trade will never see the light of day unless it can prove to the minds of the publishers that it will sell. Expectations among the publishers, and the readers, determines what gets published. Unfortunately, like kids who want candy for dinner, the readers have no idea whatsoever what is good for them, so the best books don’t get published. (Losers crave what causes them to lose) Did you really think this messed up situation was going to help you? In most cases, it will lead you down a rabbit hole and use up a decade doing the wrong things, making you and EXPERT at what doesn’t work.

I don’t know why I do this, I keep telling myself I won’t post, or at least keep it short and sweet, but I just love trading. If you want to be a happy and successful retail trader, find a small retail trader who also coaches. He needs three qualities: he has to actually trader from time to time; he has to speak with other traders or at least listen to their interviews; he has to actually like trading enough to think about it all day long; and finally, he has to say “I don’t know” and change his mind from time to time to establish his bona fides as an actual trader and not a businessman (some say scam artist).

Here’s a few tips I’ve been thinking about for some time. The thoughts of scam artists are set in stone. Their highest priority is sales, so they have to exude confidence and finality in what they say, not accuracy. However, the thoughts of real traders are very conditional, so when the context changes, they seem like they are contradicting themselves. In fact, the thoughts of real traders actually DO contradict themselves, which is good. This shows they are sorting out the variables and tracks the progression of their beliefs. It shows progress in thought, foundation, and process. For example, when Rob writes a piece about how you have to examine your losers for a forex site, and several years later says you learn nothing from your losers, it establishes he’s more concerned with substance than sales. When he says you have to cut your losers, and them endorses sizing down and learning to massage losers, you know you’ve found someone that will tell you the truth about how his thinking about trading has progressed.

I’d love to end this rant with some impressive conclusion, but there’s no conclusion. The best training in small retail trading is to be found with small retail traders like Rob, Jennifer, Matt, Brian S., Shonn, Raghee, and Rob Wilson. I’ve read all the big books. I did my homework. Save your time, those books are chock full of the diminishing returns of technical analysis, the empty promises of special indicators and secret values, and the musings of proud parrots desperate to fill the pages of their 20th best seller. The real deal in trading education occurs far down from the top of this industry, where people are forced to actually spend time thinking about trading.

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BrianF August 19, 2014 at 2:35 pm

Obviously, sitting on my mower and drinking beers while listening to the podcast does nothing for my brevity or my grammar.

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Brian F. August 19, 2014 at 5:05 pm

The point of that whole dissertation was that the reality of trader education is exactly the opposite of our human baseline expectations, when you move down the ladder of status, you have a better chance of finding what you need. The bigger the operations of the guru you are following, the more fodder they need at the bottom of the pyramid to support their operations. That means you are more likely to get scammed. Fortunately, the reverse is also true, the smaller the operations, the more latitude they have to open their heart to you about trading.

If I were Rob, I’d forgive my friend for his criticisms of trader education, because these opinions are like a lot of opinions about trading, they are conditional. A lot of the big names in this industry are offering nothing, telling you exactly what you want to hear to support their pyramid, BECAUSE THEY HAVE TO. On the other hand, there’s a lot of professionals telling it like it is, and they don’t have a lot of overhead that needs to be supported, BECAUSE THEY DON’T HAVE TO LIE TO YOU. They can tell you what they think, and give you what you need, because they are the real deal, not just because they are good people, but because their self interest isn’t working against your self interest.

This was a three part post. I am really sorry it took that long to covey what I meant, but we can’t edit what we post, and I really didn’t understand what I set out to convey when I started this post. My point turned out to be that all the good feeding levels for budding traders are at the small retail trader educator level. These people digest anything put out by the big guys almost immediately, recognize what isn’t true, and clarify what works. There’s nothing for real traders, the people who want to learn this craft, from mining the top of the pyramid, and any criticism, apply first to the people who benefit most, those with the big books, the big coaching fees, and the big holy grail systems. Thank you for listening, I will STFU now.

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Bob August 19, 2014 at 5:39 pm

I think you’re lying to yourself, Rob. Add up all your income that has resulted from your trading via account statement profits and losses, and then add up all your income from your education material and subscriptions teaching others how to produce that number, and you will have the truth about trading educators. Please prove me wrong by making a video demonstrating those two numbers. That’s the best marketing material you could possibly have. Any trading educator who can show a bigger profit from trading than educating will attract endless students. It’s technically still not fair b/c all the educator income affects trading performance in a positive way, but it’s a start. If you can’t do that then you certainly don’t have to explain yourself publicly, but you should look yourself in the mirror and ask whether what you are teaching has any long-term merit, whether you are adding or subtracting from people’s lives. Are you simply surviving from pedalling the false hope of another methodology that will allow people to quit their jobs and live their dream life that we all want but only trading educators actually get?

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robbooker August 20, 2014 at 3:15 pm

I will respond with a podcast. I accept your challenge.

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robbooker August 20, 2014 at 3:47 pm

Bob, I just finished recording a response. I was really angry with you, but I am over it now. I accept your challenge, and I expect you to do the same. I will be way more open about how much money I make. But I want the same from you. I want to know what you do for a living, and I want to know how much money you make from charging for that, and I want to know why – if you know how to do it – that you charge for it. I am intentionally putting you on the spot with me. Why do farmers charge for their crops if they know how to feed themselves? Why isn’t everything free in the world today? BECAUSE COMMUNISM IS BULLSHIT. Anyway, I appreciate that you challenged me to be more transparent, and I will do that. I think you were a jackass about the way you challenged me, but I accept it anyways.

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BrianF August 20, 2014 at 8:00 pm

Oh-hoh-hoh-hoah
Oh-hoh-hoh-hoah
Oh-hoh-hoh-hoah
Oh-hoh-hoh-hoah

[Chorus:]
Everybody was Kung Fu Fighting
Those kicks were fast as lightning
In fact, it was a little bit frightening
But they fought with expert timing

There was funky China men from funky Chinatown
They were chopping them up
They were chopping them down…

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Bob August 21, 2014 at 4:38 pm

Rob, just seeing your response now. I do apologize for being a jackass in challenging you. I was having a bad day and took my frustrations out on you. You touched a sore subject for me because, no, I don’t believe trading educators put out material and have subscriptions b/c “this is capitalism and it’s fair they should be paid”. I think they do it for the income stream so they have risk capital every month to trade with. And also to survive because they can’t make it on trading alone. Which is my point. There are three types of traders out there: those who are extremely profitable that you never hear of; those who can’t make it as a trader alone so they sell systems; and those who are unprofitable and trying.

With the leverage that is possible in our markets, a workable system should provide so much money that there truly is no need to charge others. That’s what I would do. That is my plan if I can get more consistent. I’ve been trading for three years now, and things are coming together for me, but it is an endless journey of learning.

Farmers charge for their crops because that is their only source of income. Traders should be harvesting profits from the markets. And then show others how from a sense of charity and gratitude. If a trader can’t survive from his own system then how will someone else who buys it from them? Isn’t that the real secret of this industry? The rare trader who can actually make a living from his trading will never be heard from because it’s a full-time effort to stay on top of ones own trading instead of being bothered with all the marketing.

I would never have confronted you if you didn’t do a podcast on this subject. I’ve been burned by many educators who act like their system works only to find out that it doesn’t and they are really surviving from selling the system, or it only works for them because they have a huge income stream from selling subscriptions so they can ride winners longer and sit with a loser until it comes around. Whether or not that is you is not really my concern. I’m not judging you. I’m challenging you to decide for yourself whether you’re a trader or a system seller. If you’re gonna make yourself public and also do a podcast on that subject then you open yourself to anger and criticism from people who have been burned.

I actually enjoy your podcasts quite a bit. But I’m not paying for them, or losing money from listening. Now that this is out of the way, I’m happy to be more positive in my comments in the future. No offense.

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Bob August 21, 2014 at 4:43 pm

I will add one more thing. Let’s say a trader was really good and wanted to share his entries and exits so others could join him. Then I could see charging a small fee just so he feels obligated to make his videos every night. If he did it for free, he doesn’t really have an obligation. But all the rest of his systems videos and other material should be available for free because he doesn’t need money anymore and the struggling trader trying to learn from him does.

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Prochargedmopar August 21, 2014 at 7:05 pm

Bob,
If you are not a member of tfl365.com then you have no idea how much Rob offers for the measly pitence he charges for the service.
And $27 for a complete trading method with live support videos and many hrs of training is less than a couple of my kids and I can eat burgers at sonic (was $54 last night).
I feel your pain.
At the 3 yr. mark of your trading career and knowing HOW to trade but not being able to execute it can really piss a person off.
Been through that stage myself.
Trading shows us exactly who and where we are.
There is no right or wrong only profitable or unprofitable. period.

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Cavex August 21, 2014 at 11:49 pm

Yeah PC Mopar, I also had burgers yesterday with 2 kids & spouse at a favorite-local-family-run-joint near Seattle, 4 of us for $48. I thought the Burgers, Fresh cut Fries and handmade shakes, were outstandingly DELICIOUS & expensive, but compared to TFL365.com, the TLF365 price is SO worth it. I have to admit here that I was the one that mentioned Steve Nisson not being a trader once, and I think that was what opened the door to DarkRob entering our world. Thanks to Rob for being gentle in giving me the rebuke I deserved, & thanks he was not as harsh as he was to the fellow educator. I thanked Rob for the insights and I had not thought of Nisson that way before. Very good episode Rob!
Moral of the Story: Don’t be too quick to judge, and when you do admit it and reverse course. When someone else makes the turn around, give them the benefit of the doubt and forgive it privately and publicly if needed.

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Brian F. August 22, 2014 at 5:00 pm

Hopped off the mower for this one…

I think that if one is shopping for a coach for their small retail trading, you should look for a small retail trader. BUT, I don’t want just somebody that traded. You can do this your whole life and not learn a darn thing. I want someone who trades, talks and writes. With that balance, you have a chance to learn something. The most popular book on trading, the one regarded as packed with the most trader wisdom, is Reminiscences of a Stock Operator. The majority of the material for this book came from A NON TRADER, Edwin LeFevre. Edwin LeFevre was casting about for somebody to hang his ideas on, and he found Jesse Livermore. Knowing that traders wouldn’t listen to what he had to say, because he didn’t have the STATUS to make a primate listen, is probably the best indicator that LeFevre understood traders. He packed everything he knew into his opus, giving all the credit to the straw man on the pedestal, Livermore. Most of the material in the book came from LeFevre’s articles and columns (he was a Wall Street journalist). Those ideas have been sourced, they weren’t Livermore’s ideas, they were Edwin’s and were dated years before he ever met Jesse.

Here’s the point, there is no indication that LeFevre, who spent his life around traders, EVER TOOK A SINGLE TRADE. Livermore wrote his own book, it was horrible. Livermore was a great trader, but he couldn’t teach you to trade. LeFevre was THE MAN when it came to teaching people how to trade, and he didn’t trade.

Let that sink into your mind for a while. Some of the best trader coaches never made any money trading. This shouldn’t surprise us, but we are primates and follow the crowd, saying “Oh yeah, how come you don’t have a billion dollar account?” Tony LaRussa, coach of the Cardinals, never hit a ball in his life. He didn’t play baseball, he’s a LAWYER, and yet, he led his team to World Series wins.

The message here is everybody wants to listen to a Soros, a Livermore, or a big mouth piece of filth like J. Welch. Screw those guys, they have nothing to teach me. I want a coach that trades, but that’s not the only requirement. The doing is almost irrelevant, you can’t learn by doing in this profession, it’s the talking, the interviewing, and it’s the thinking that’s important. When you find someone that does all three, so much the better.

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mike August 27, 2014 at 4:38 pm

Hi Brian
loved the
“Hopped off the mower for this one…”
what a top thread!
cheers
Mike

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Brian F. August 21, 2014 at 9:25 pm

Hi Bob,

Thanks for clarifying your thinking. Really sorry, I thought you were just a troll, but trolls don’t explain or justify their posts, which, being a troll myself, I appreciate. I disagree with some of what you wrote, but I get it and would like to offer my perspective.

It’s ok to make generalizations, but the people swept up in them can feel slighted. For example, I could say “beware of money managers” because they will churn your account and put you in investment vehicles like annuities with huge up front fees for them, but those generalizations would be most unfair to people like the man who has handled Rob’s dad’s accounts for decades, who is a saint. It’s all misplaced anger in my opinion. Put the criticism where it belongs, at the top of the particular industry deserving criticism.
Every industry (political institution or even human institution throughout history) has a minority that are exploiting the majority, everybody else is just trying to make a living and doing their jobs. I wouldn’t be rude to lawyer because Saul Goodman and the bar is corrupt, a local politician because Francis Underwood and Congress is corrupt, or the manager of a local credit union because the Fed is a criminal conspiracy. That criticism on the little guy is misplaced, it ignores the inevitable structure of human institutions, it’s not fair, and even if true in some cases, it’s just not proportional.

It would be wonderful if artists who spent years learning how to paint could immortalize my big Irish melon for free, but it doesn’t work that way. You want a free painting, but can you get them another ear? Trading costs many traders everything, their money, their best years, their family, friends, health, self respect, and a good part of their sanity. This business has cost me who I used to be, and to think of it, I didn’t like that guy anyway (off point). We do what we do because we are compelled to do so. Many are willing to share who they are now for free, but for the others, such a big part of your life is worth something, isn’t it?

Nothing is free in this world, but sometimes the best things are. This particular trading educator has shared everything, his successes, failures, access to his friends, even his suspicions about trading. I believe he is compelled to do so. He’s a unique kind of guy, and this is who he is (All Caps Rob). NOBODY trying to sell you allows you to see behind the veil into their thought process, where one day they say one thing, and a year later they are saying something completely different. THAT’s the sincerity here, and THAT’s the excitement here. What does this world, which I love, has to do with that other ugly side of this business? Not much, the Big scammers with the $19k systems CAN’T say “I don’t know” or “I think this now.” Real traders and educators say that kind of crazy shit all the time. This is evidence of the real deal. Master traders don’t write f#cking Moby Dick in one draft, HERMAN friggin MELVILLE took seven drafts to get Moby Dick right, why should a real deal trading educator be any different?

I just have this vision of Luke Skywalker telling Yoda he charges too much for Jedi training because he demands you build the fire. What is too much to pay to get to the next level depends on the available level, and your current level, if you pay too much, it’s your own fault. In this case, the cost was $27 bucks after 280 podcasts (that, and it built on my theme about massaging losers) My life, my account, my future. Nobody sets that price, I decide. Trading is a solitary life, it’s all about me, it has to be.

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Brian F. August 21, 2014 at 9:54 pm

“(that, and it built on my theme about massaging losers)”

One of my favorite themes, not MY theme.

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