There is a big desire to want to be right about “calling” the future outcome of a market
Would you rather make more money, consistently
Be right about calling the market top/bottom and not be in the trade?
Trading is a damn hard job
Only about 10% of all traders make money (Student)
Only about 2% make a living as a trader (Pro’s)
Only about 1% make incredible returns (Elite)
To be clear, about 90% of traders LOSE money trading (Gamblers)
I work with every one of these groups from the struggling trader who is looking to start this new trading business/lifestyle
To people who make over a million dollars in a single day
I have identified a number of characteristics of each trader type and I will break each one down
New traders who are full of confidence that they are able to predict the future and rightly so, they are usually very successful already in another area of their life.
They are addicted to news and are always looking for a narrative to why “the market” did something
They throw money at every idea that they have with random amounts
They have no plan for when to stop out of their position if they are wrong and will hold on to their losing positions much longer than they should
They have no plan for when to take profits if the trade works out and will let a winner turn in to a long term loser
They are constantly betting on the most extreme outcomes with their trades anticipating Armageddon or parabolic ramp ups
They don’t understand how to size their positions correctly
They do not keep accurate records of their trades
They stack indicator upon indicator on their charts
They don’t use checklists or systems to ensure they are following a plan
They might have a trading plan but it isn’t properly built, missing things like manual backtests which give you fairly accurate statistics such as:
-number of trades per year/month/week/day
-std-deviation of expectancy
They are unsure of what their expected monthly returns will be over the next quarter and even the next 5-10 years
They don’t have a Profit and Loss statement for their trading business
They are at the most confident and dangerous with their own money at this stage in their trading journey believing that they have this trading thing figured out
Gamblers lose the most amount of money compared to all other trader types on a % of net worth basis
Gamblers are manic depressive, with huge optimism before every trade and quickly feel the pit of despair in their gut as they watch another trade go against them
Gamblers can continue at this for years before finally throwing in the towel and giving up
Eventually they develop a systematic approach to making money in the markets and move to the next phase which I call STUDENT
Students are traders who have moved away from being tied to the news all day/night.
They no longer focus on the news/narrative or presidential tweets to make money in the market
They now spend far less time trading
They take very small positions when they do trade, and may even just paper trading without real money
They keep records. They may not know what they need to be recording but they are learning to be more meticulous=
They still chase for news events as to why a market/asset moved but they also are aware and begin to separate trading from news
They seek out a mentor
They find a trading system to study and learn how to focus on what’s important and divorcing from all that is irrelevant
The pit of despair that is constantly in their gut as Gamblers, is far less frequent as is the extreme optimism before every trade
They narrow down their trading setups to one at a time and focus on that one setup
They cancel dozens of newsletter, chat rooms, signal services and special news feed services and find one single service that works with their system saving thousands of dollars
They may only break even that year or make $1 profit (which is frustrating)
They see the opportunity that having a system to trade can provide and seek out ways to tighten up their results by trading more assets or learning how to compliment the system adapting it to be their own system
This can take years for a Gambler trader to move to a Student trader that can see the light at the end of the tunnel
It may take years for the Student trader to become a Professional trader
The professional trader runs trading as a business
The professional trader has a detailed trading plan, workbooks, p&l statements, pro-formas driven by backtests and live tests
They have heuristics they monitor constantly to ensure they are implementing their plan efficiently
They are focused on their own personal performance and are fanatical about daily routines, health and wellness, mental state, and adapt their world to ensure they are operating themselves and their trading business as best as they possibly can
They take accurate position sizes
They implement their system at peak efficiency
They are constantly reviewing the previous trading day/week/year
They are constantly testing new systems to implement as they market evolves
They do not blame the algo’s, the Fed, a Tweet or some other reason
They take responsibility and continue to adapt as the markets change (or don’t) over the years
They mentor student traders because they learn more themselves when they mentor
They don’t spend money on frivolous items
Simpler is better
They make consistent returns week after week, month after month, year after year
Very few traders make it to being a professional trader who earn a very consistent income and grow their accounts methodically
Even fewer get to the Elite level
Elite Traders have all the characteristics of a professional trader but have such a high level of focus and commitment to implementing and managing their system that the rest of their life is on the sidelines
Elite traders are fanatical about high performance for themselves and have been at the professional trader level long enough that the edge they have in the markets has played out over years
If you can identify yourself on that list then you know what to focus on to move to the next higher level on that list of traders
Turn off the news
Study and Implement a system
Find a mentor
Focus on your habits and how to structure a high performance lifestyle
Build and implement a thoroughly researched and backtested trading plan
You can do all of this on your own, all of the information in the world is available if you just know how to find it, separate the good from bad, and take the time to iterate over and over on each new idea
We have reopened the Quantitative Earnings System to just 50 Traders for Black Friday
I limit the number that we offer because as you can see by my tweets, I’m very interested in great people making amazing lives for themselves through trading.
I don’t want to sell this to the whole world, only those who really want to succeed and make a future in this business
The system only runs for about 2-3 weeks per earning season and only trades the best setups where the positive price outcome regardless of the companies earnings report/news.
This past earnings season we made 13% in two weeks on 17 trades. If you do that 4 times per year, that’s some big results in 8 weeks of work
I truly hope my work serves you
Everything you need to bring your trading to the next level.
If you are interested in this stuff, Have a look at what we have to offer.
And think about joining us in the Lab, we work on these projects every day together
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