Episode 285: Reduce Your Trade Size and Calm Down

by robbooker on September 1, 2014

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Returning to a more typical and positive vibe, Episode 285 of The Traders Podcast features your host Rob Booker and Jason the producer talking about some of their favorite quotations. Rob relates these quotes to trading, naturally. Rob asserts that people generally do what they want to do, regardless of their reasons given.

Rob reads a quote from a forthcoming trading book by Shonn Campbell called FX Inventory, which encourages traders to be free from the burden of false precision. He cites another portion of the book that suggests that trading is about playing offense and defense at the same time. Rob also asserts that your ability to make money is directly proportional to your ability to calm the hell down. Rob says that dramatic people make the worst traders. And we conclude this episode with a voicemail from actor Morgan Freeman, who tries his hand at reciting The Traders Podcast intro! Thanks for listening.

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{ 4 comments… read them below or add one }

Bob September 1, 2014 at 6:48 pm

I’ve found in my life that being challenged by opposition leads to a healthy self-analysis, which either creates change, or a deepening of my convictions. In both cases, it makes me stronger.

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BrianF September 2, 2014 at 6:46 am

Our preconceptions about trading prompt us to think like everybody else, and reject what we don’t want to hear like everybody else, thereby dooming us to spend our trading careers becoming experts at what doesn’t work, until we suddenly realize, “position sizing is the Holy Grail of trading.” Position size for your psychology and throw away those psychology books. Rob can say this stuff until he’s blue in the face, but he can’t teach you anything until you are ready to unlearn what you think you know.

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Dave Vaughan September 2, 2014 at 1:43 pm

Hi Rob and Jason,
I do hope that you do not include, The mad Welshman, in your list of “dramatic people”: else; I am sunk! Regards, Dave.

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Brian F. September 3, 2014 at 10:14 am

A great comment in this cast concerned confidence and ignorance being deadly. One of the most dangerous things about trading is it seems so simple, but we who study it know that isn’t so. Chess seems simple, rooks move horizontally and vertically, bishops move diagonally, but the nuances of chess are what make it a difficult game. There are strategies and traps which new players don ‘t appreciate. Similarly, trading seems simple, but it has exponentially more traps and nuances. At least in chess you know the rules. In trading, the rules are conditional, the game changes as you play it, and most of the important rules are counterintuitive and hidden in plain sight from our primate preconceptions. I think overconfidence is pardonable in a trader, because we all have to deal with it and learn humility, or the markets will take care of the problem in the way markets always do.

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