If I Could Go Back & Tell Myself What I Know Now... Part 1 of 4
Introduction and Expectations
In this first part of the four-part series, the speaker sets expectations for the episode. It is a hypothetical conversation with his younger self, discussing what he would do differently if he could go back in time.
Hypothetical Conversation with Younger Self
- The episode is a commuter-style conversation that can be listened to while going back and forth to work.
- There won't be any graphics or new market maker secret concepts revealed in this episode.
- The speaker shares personal experiences and discusses things he wishes he could have done differently in his trading journey and life.
Reflecting on Past Decisions
The speaker talks about how everyone has moments where they wish they could go back in time knowing what they know now. He shares personal reflections on his own trading journey and life decisions.
Learning from Past Circumstances
- The speaker reflects on circumstances in life, including trading, where one wishes they had known better.
- He mentions sharing personal experiences on his Twitter feed about the frailties in his personal life as a younger man.
- This discussion aims to provide insights into what the speaker would tell his younger self based on his own experiences.
Learning from Growing Pains
The speaker acknowledges that everyone goes through growing pains when starting out in the markets. He offers his personal perspective on some common challenges faced by traders.
Personal Perspective on Trading Challenges
- The speaker advises listeners to appreciate his insights as he has weathered financial and personal storms to gain knowledge.
- Whether young or old, new traders will face similar challenges and growing pains.
- While some points may be found in books or heard from others, the speaker provides a personal spin on them based on his own experiences.
Major Hurdles in Trading Development
The speaker discusses the major hurdles he faced during the first six years of his trading development. He aims to provide a resource for listeners to learn from his experiences without having to go through the same struggles.
Learning from Trading Development
- The first six years of the speaker's trading journey were filled with mistakes and challenges.
- This discussion serves as a history book of what he personally experienced during that time.
- The speaker hopes that even his adult children can benefit from listening and learning from his experiences.
Focus Areas for Younger Traders
The speaker shares advice on what younger traders should focus on in their development, based on what he would tell his younger self if given the chance.
Advice for Younger Traders
- Don't seek approval from others right away, as it is not a characteristic of successful traders.
- Family and friends may not understand or support your trading journey initially, so don't seek their approval.
- Friends may only show interest once they see you making money, but they may also feel uncomfortable with your success as it reflects their own unfulfilled pursuits.
This summary covers the initial part of the transcript.
The Impact of Sharing Your Goals with Others
In this section, the speaker discusses the potential negative consequences of sharing your goals with others, including co-workers, family, friends, and strangers.
The Negative Effects of Sharing Goals
- When you share your goals with co-workers, they may provide negative feedback and make going to work even more difficult.
- Sharing your goals can create a divide between you and your co-workers as they may see you as unrealistic or a source of annoyance.
- Family and friends may discourage you from pursuing your goals or show limited interest unless you become successful.
- Co-workers who are unhappy in their own lives may give you negative feedback because they want to see you fail.
- Seeking approval from others often leads to disappointment as people rarely respond positively or offer support for your goals.
Avoid Sharing Goals with Strangers
This section emphasizes the importance of not sharing your goals with strangers and highlights the lack of interest or understanding they may have.
Lack of Interest from Strangers
- It is not advisable to share your goals with strangers as they will likely not understand or be interested in what you're pursuing.
- When asked about what you do, mentioning trading commodities or foreign exchange markets will often lead to confusion or disinterest.
- Strangers are unlikely to engage in meaningful conversations about your goals and achievements since they have no prior connection or investment in your journey.
Relying on Self-Approval for Trading Success
This section emphasizes the importance of relying on self-approval rather than seeking validation from others when it comes to trading success.
Self-Approval and Independence
- Depending on external sources such as family, friends, coworkers, or strangers for approval can hinder progress in trading.
- Making decisions based on personal conviction is crucial in trading, regardless of whether others agree or not.
- Enduring losses and not seeking comfort or validation from others is essential for growth as a trader.
- The journey of trading requires self-study, development, and rewarding oneself for achievements rather than seeking external validation.
The transcript provided was already in English.
New Section
In this section, the speaker emphasizes the importance of understanding and accepting the risks involved in trading with live funds. They highlight that losses are inevitable for every trader and share their personal experience of starting with a loss.
Understanding Risks in Trading
- Trading with live funds involves the risk of losing money, which is guaranteed.
- Every trader experiences losses at some point, and there is no trader who starts without any losses.
New Section
The speaker shares their personal experience of starting trading without understanding the risks involved. They mention how they initially relied on a book's instructions without considering the underlying risks.
Lack of Risk Understanding
- The speaker's first trade resulted in a 50% loss overnight due to lack of knowledge about options trading.
- They admit to not understanding the risks associated with trading and expecting immediate success based on a book's instructions.
- The speaker realizes that blindly following instructions without comprehending the risks can lead to significant losses.
New Section
The speaker reflects on their initial approach to trading, where they were more focused on making specific dollar amounts rather than understanding compound interest or advanced money management theories. They also discuss the consequences of not having appropriate stop-loss measures in place.
Unrealistic Expectations and Lack of Stop-Loss
- Initially, the speaker was solely interested in making specific dollar amounts from trades without considering other factors like compound interest or optimal money management strategies.
- They had unrealistic stop-loss levels or sometimes didn't have any stop-loss measures at all.
- Not having proper stop-loss measures while actively engaged in other work responsibilities caused additional stress and uncertainty.
- The speaker compares themselves to a cowboy riding bulls without experience, always facing worst-case scenarios when taking losses.
New Section
The speaker emphasizes the importance of appreciating percentage gains or losses over specific dollar amounts. They highlight the need to manage risk and avoid taking on excessive losses that can significantly impact a trader's account.
Appreciating Percentage Gains/Losses
- Traders should focus on understanding and appreciating the percentage gains or losses rather than fixating on specific dollar amounts.
- It is crucial to avoid taking on excessive losses as a new trader, as it becomes challenging to recover from significant account depletion.
New Section
The speaker discusses the importance of limiting trade frequency and avoiding overtrading. They share their personal experience of feeling compelled to be constantly active in the market, leading to impulsive trading decisions.
Limiting Trade Frequency
- The speaker admits to overtrading due to a belief that they had to be actively involved in the market every day.
- Impulsive trading decisions were made based on short-term profits, leading them to enter trades with only 20 minutes left in the trading session.
- Lack of knowledge and understanding resulted in gambling-like behavior rather than informed trading decisions.
Conclusion
In this transcript, the speaker shares their personal experiences and insights about trading. They emphasize the importance of understanding risks, managing risk effectively, appreciating percentage gains/losses, and avoiding overtrading. These lessons serve as valuable reminders for traders starting their journey in financial markets.
New Section
In this section, the speaker discusses the importance of limiting trade frequency and avoiding changing strategies during a trade. They emphasize the need to stick to objectives and be content with profitable trades.
Limiting Trade Frequency
- The more frequently you trade, the higher the likelihood of losses.
- Having a lot of trades can lead to mounting losses, especially for developing traders.
- It is important to learn how to limit trade frequency and avoid turning short-term trades into long-term ones.
Changing Strategies During a Trade
- Initially, the speaker struggled with being a position trader and found success with short-term strategies.
- When a trade starts moving in your favor explosively, there is a tendency to change strategy from short-term to long-term.
- This change can turn a short-term gain into an immediate loss.
- It is crucial not to change strategies while in a trade.
Contentment and Risk Management
- Stick to your objectives, scale out when you reach your target, and move to the sidelines.
- Do not change strategies during a trade; it is never beneficial.
- Be content with enough profit; there is no obligation to trade every day or press your luck.
- Lack of appreciation for risk can lead to closing profitable trades prematurely due to fatigue or discomfort.
New Section
In this section, the speaker reflects on their past experiences as a trader and emphasizes the importance of understanding risk management. They discuss how they learned from their mistakes and developed respect for the market over time.
Lack of Appreciation for Risk
- In their early years as a trader, the speaker had no appreciation for risk and took on excessive risks in pursuit of big profits.
- Despite making some profits, they would close positions prematurely due to emotional fatigue or inability to handle small gains compared to their expectations.
- Lack of respect for the market and risk led to multiple trading account failures.
Understanding Risk Management
- It is essential to understand how you personally engage with the market and be aware of how adverse market conditions can affect you.
- Feeling the pain of being in a market that moves against you helps develop an appreciation for risk management.
- The speaker experienced significant equity swings but did not care or have respect for the marketplace at that time.
New Section
In this section, the speaker discusses the importance of preventing life imbalances caused by excessive focus on trading. They share personal experiences of missing out on family events due to being consumed by the market.
Prioritizing Family Time
- The speaker admits to failing in maintaining life balance due to excessive focus on making money and building businesses.
- They missed many important moments with their children, including sporting events, due to being consumed by trading and financial pursuits.
- Looking back, they realize the amount of time they missed and regret allowing the market to steal those moments.
Chasing Success
- The speaker chased success relentlessly, believing that they were doing it all for their family when, in reality, it was driven by personal dissatisfaction and a desire for more.
- Every adversity brought a new sense of urgency to change their situation.
This summary covers selected sections from the transcript.
New Section
In this section, the speaker reflects on the negative impact of being consumed by the financial markets and emphasizes the importance of balancing family time and trading activities.
The Dangers of Being Consumed by the Markets
- Vampires: The speaker compares being consumed by the markets to vampires that drain every aspect of life.
- Regret: Despite making millions of dollars, the speaker expresses a desire to go back in time and prioritize spending time with family over money-making pursuits.
- Prison Cell: The speaker acknowledges creating a prison cell for themselves by obsessing over market activities, neglecting their role as a good employee and family member.
New Section
This section focuses on managing family time and establishing a study and trade schedule to maintain balance between personal life and trading activities.
Managing Family Time
- Prioritizing Family: The speaker emphasizes scheduling dedicated family time without distractions from market-related activities.
- No Market Consumption: During family time, it is important to avoid looking at charts, watching TV related to markets, reading news reports or articles, using social media platforms like Twitter, etc.
Establishing Study and Trade Schedule
- Time Allocation: Determine specific times of day, days of the week, and months of the year for studying and trading. Allocate sufficient time each day for studying.
- Avoid Gambling Mentality: Spending excessive time analyzing charts can lead to gambling behavior. It is important to have a structured approach rather than relying solely on intuition or binge-watching charts.
New Section
This section highlights the significance of taking breaks during periods with no market activity or holidays to focus on personal life instead of constantly being immersed in trading-related activities.
Off Days
- Importance of Breaks: Utilize days with no market activity or holidays as off days to disconnect from charts and market analysis.
- Family Focus: Use this time to fully engage with family, avoiding thoughts about missed opportunities or what could have happened in the market.
New Section
This section emphasizes the importance of patience and realistic expectations when it comes to trading development and financial goals.
Patience in Development
- Realistic Timeline: Rushing into trading without proper development can lead to self-destruction. It is crucial to give oneself a realistic timeline for growth and learning.
- Self-Awareness: Understanding one's tendencies and potential pitfalls is essential for long-term success. Simply acquiring knowledge or investing more time and money does not guarantee success if self-awareness is lacking.
Unrealistic Objectives
- The speaker initially aimed to retire at 40 with a modest monthly income goal. However, they quickly realized that greater possibilities existed but were unprepared for the emotional rollercoaster that came with significant gains and losses.
The transcript provided does not include timestamps beyond 1953 seconds .
New Section
The speaker discusses the ineffectiveness of retail books and courses in teaching how the actual markets work. They share their personal experience of purchasing over 2000 books and not finding any secrets or valuable insights.
Stop Wasting Money on Books
- The speaker emphasizes that everything taught in retail books and courses is diametrically opposed to how the actual markets work.
- They express regret for wasting money on over 2000 books, both in electronic format and hard copies, without finding any valuable information.
- The speaker advises against buying more books and suggests that others should stop wasting their money as well.
Finding Inspiration from Selected Books
- Despite the lack of overall value in retail books, the speaker mentions a few exceptions that they found helpful.
- For money management, they recommend Ralph Vince's works on optimal F and Kelly criterion.
- They acknowledge that these concepts may be advanced for beginners and caution against using them without proper understanding.
- The speaker also mentions a book from Larry Williams published in the 1970s, which provided inspiration by showcasing how smart money operates in the marketplace.
- They mention "Trading for a Living" by Alexander Elder as another recommended book for inspiration.
Doing the Opposite: John Murphy's Book
- The speaker suggests reading John Murphy's "Technical Analysis of Financial Markets" as it serves as a guidebook for doing the opposite of what is taught.
- By learning to do the opposite of popular strategies, one can gain insight into market dynamics and potentially find profitable opportunities.
- Charts are highlighted as an interesting tool to observe due to their high failure rate when following conventional wisdom.
Avoiding Dependency on Gurus
- The speaker shares their experience of chasing after various gurus and subscribing to their services, but not making any profits.
- They mention trying out Larry Williams' hotline service without success.
- The speaker advises against looking for hot hand gurus and emphasizes the importance of becoming an independent thinker and trader.
- Codependence is discouraged, as it can hinder personal growth and decision-making abilities.
Accepting Losses and Developing Skills
- The speaker encourages new traders to be willing to accept losses early on in their journey.
- They emphasize that losses are inevitable, even with guidance from mentors or experienced traders.
- It is suggested that traders should not use real funds until they have a solid understanding of trading strategies and themselves.
- Developing skills may take longer than expected, ranging from six months to several years, depending on the individual.
New Section
The speaker discusses the importance of self-awareness in trading and acknowledges that trading may not be suitable for everyone. They encourage individuals to recognize when trading is not for them without feeling ashamed.
Recognizing Personal Suitability
- The speaker acknowledges that not everyone is cut out for trading, and there is no shame in realizing it's not the right path.
- Self-awareness plays a crucial role in determining if trading aligns with one's personality, goals, and capabilities.
- It is emphasized that recognizing one's limitations can lead to better decision-making regarding pursuing or abandoning a career in trading.
The Importance of Embracing Losses
In this section, the speaker reflects on the significance of accepting losses in trading and shares his personal experience.
Embracing Losses
- Losing is normal and acceptable in the trading industry.
- It is essential to understand that losses are part of the business transactions.
- Controlling losses over time will lead to making more money than losing.
- Initially, the speaker tried to avoid losing altogether, considering each loss as a significant event.
- Mistakes and losses are common in trading, and it's crucial to learn from them.
- Early on in your development as a trader, be willing to experience many losing trades.
- Practicing on paper or demo accounts helps you understand what it feels like to be wrong without risking real money.
Avoiding Social Media Influence
The speaker discusses the impact of social media on trading decisions and advises against relying too much on others' opinions.
Social Media Influence
- In the early days of trading (1992), social media was just starting with message boards similar to Twitter.
- The speaker used to get influenced by others' opinions shared on these platforms, leading him to make impulsive decisions.
- Allowing others' opinions or expectations to change your trade can result in loss of control over your own decisions.
- Joining trading clubs or groups with hive mentality can hinder personal growth as a trader.
- Discovering who you are as a trader requires individual exploration rather than conforming to group thinking.
Trading as a Solo Sport
The speaker emphasizes that trading is an individual endeavor and highlights the importance of being self-reliant.
Solo Trading
- Trading is a solo sport and not a team sport, regardless of the expertise of gurus or mentors.
- Blindly following others' advice leads to codependency and lack of control over your own trading decisions.
- Subscribing to alerts or signals from others prevents you from taking responsibility for your trades.
- Being the source or generator of trade ideas forces you to assume responsibility for your actions.
- Avoid subscribing to other people's alerts as you don't know the influences behind their trades.
Don't Count Other People's Money
The speaker advises against comparing oneself to others in terms of wealth and success in trading.
Avoiding Comparison
- Subscribing to other people's alerts or counting their money is a waste of time and money.
- Focusing on how much money someone else has or their material possessions is unnecessary.
- You don't know the circumstances behind someone else's success, so it's futile to compare yourself with them.
The transcript provided does not include any further sections.
New Section
In this section, the speaker discusses the allure of materialism and how it can distract individuals from becoming better traders or students. The speaker shares personal experiences and emphasizes the importance of not measuring one's success against others.
The Dangers of Materialism
- The speaker compares material possessions to a carrot dangled in front of a child, explaining that people are often enticed by lavish toys and lifestyle materialism.
- The speaker states that they have never pursued such things because they do not contribute to becoming a better trader or student.
- Personal experience is shared about falling victim to the allure of materialism when starting out as a trader, highlighting how courses often focus on extravagant lifestyles rather than practical trading strategies.
- The speaker recounts losing 50% of their initial investment in their first trade, which was not mentioned in the course materials. This serves as a cautionary tale against being enticed by other people's money and possessions.
- It is emphasized that comparing oneself to others' success or wealth is unnecessary and can lead to feelings of insignificance. Instead, individuals should focus on setting personal goals and striving for self-improvement.
New Section
In this section, the speaker warns against measuring one's success against others and highlights the prevalence of fake personas on social media platforms. They emphasize the importance of staying true to oneself and finding a trading style that aligns with one's personality.
Avoiding Comparison
- The speaker advises against measuring oneself against others, including themselves. They caution against comparing achievements seen on social media platforms as many profiles are fake or exaggerated.
- It is emphasized that the majority of people showcasing wealth or success online are frauds. The speaker encourages individuals to focus on their own journey and not be influenced by others' false narratives.
- The importance of finding a trading style that suits one's personality is highlighted. The speaker shares advice from Larry Williams, stating that scalpers should make quick decisions, while short-term traders should be able to sleep while in a trade.
New Section
In this section, the speaker discusses their contributions to market analysis concepts and warns against falling for watered-down versions or false narratives created by others. They emphasize the need to stay true to oneself and not be swayed by external influences.
Staying True to Yourself
- The speaker mentions being an early pioneer in market-maker concepts and notes that many current teachings are watered-down versions of their original lecture notes from 1996.
- They express frustration with others who have fabricated experiences similar to their own and caution against believing false narratives.
- It is reiterated that most people claiming success in trading are fake or fraudulent.# New Section
In this section, the speaker discusses the allure of materialism and how it can distract individuals from becoming better traders or students. The importance of not measuring one's success against others is emphasized.
The Dangers of Materialism
- The speaker compares material possessions to a carrot dangled in front of a child, explaining that people are often enticed by lavish toys and lifestyle materialism.
- It is highlighted that while the speaker possesses these things, they do not contribute to becoming a better trader or student.
- Personal experience is shared about falling victim to the allure of materialism when starting out as a trader.
- The speaker emphasizes the need to avoid being enticed by other people's money and not comparing oneself based on their possessions or success.
New Section
In this section, the speaker advises against measuring one's success against others and warns about the deceptive nature of social media portrayals.
Avoid Comparisons and Deceptive Social Media
- The speaker shares personal experiences of feeling insignificant when comparing oneself to others' successes.
- It is cautioned not to measure oneself against someone else, including those seen on social media platforms who often present a false image of success.
- Examples are given of individuals who showcase fake lifestyles on social media, driving cars they don't own and living in homes they don't sleep in.
- The importance of focusing on personal goals rather than trying to match someone else's achievements is emphasized.
New Section
In this section, the speaker emphasizes the importance of adapting trading style to one's personality and decision-making abilities.
Matching Trading Style to Personality
- The speaker shares advice from Larry Williams about aligning trading style with one's personality.
- It is suggested that scalpers, who make quick decisions, will do well if they can act decisively. On the other hand, short-term traders should be able to sleep while in a trade.
- The importance of making quick decisions and avoiding hesitation is highlighted for successful scalping or day trading.
New Section
In this section, the speaker discusses their reputation as a market analyst and highlights their contributions to market-maker concepts.
Market Analysis Reputation
- The speaker mentions having made a reputation by providing what they believe is the best market analysis.
- Personal experiences are shared regarding developing market-maker concepts in 1996 and teaching them through one-on-one sessions.
- It is emphasized that many others have since written books and created courses on similar concepts but lack personal experiences to back them up.
Due to the limited content provided in the transcript, it was not possible to create additional sections.