So just to note on the case studies, I got some great feedback via email and also comments on the channel if you want to know what I’m talking about. There’s videos up there called Case study one, case study two, and we talked about what happens when someone was in a bit of a drawdown, but they had two winning positions in their portfolio. What would they do in that moment of time, especially how would they feel? And so it’s not for me to say what’s the right answer? I think there are best practices for sure. There’ll be more to come on those case studies. I think they’re going to evolve. There seems to be some good engagement. The audience, you all seem to being not challenged, but asked for developmental purposes. What would you do? How would you handle yourself? I think in terms of best practices, the thing that you would want to do is to just continue to follow your rules in the short run, because those aren’t the exact numbers, but it does come from some of my own trading that I used to teach.
And there was a time when I was trading very, very well. But as fate would have it, although I stayed with my winners and the winners ended up being at that moment of time as much as 20-25% of the equity in my account, my account was still down 14%. And so I had to use all of my resources to make sure I didn’t do the stupid thing, like pull my flowers and let my weeds bloom. I had to stick with my knitting, stay with my winners, add to the winners as I would, and make sure I was taking consistent small losses over that period of time. So I think that’s best practices is to find some way in your own calculus when you have winning trades on to keep them adjusting your protective stops along the way, letting the winners go. And those winners, it was like a $50k rollover account and the winners went from in the first time I was in the position, it started out small. I was up $5k and then I was up $10k and the account was, like I said, down, I was up $10k in the position. In other words, there was $10,000 of unrealized gains, but the account itself was down 14%.
Then it went, I remember it very distinctly over a one to two month window of time because it doesn’t really work out on the first of the month to the end of the month, but somewhere within that one to two month window, I went from being down 14% to being up 20%. And so that’s just the way God wanted it. It was an early test, but I had to do everything in my power to make sure that I didn’t do the hair trigger response or the thing that would make me want to do stupid things with my money in that short period of time. Now, that position eventually went on to be worth upwards of $30,000 before I got stopped. I eventually got back in at higher prices with twice the size. I go through the whole thing in the case study and bury it that way. So it would be interesting to see. So I tried to allude to that here. So what I’m trying to say is that I think there might be a right answer for each and every one of you how you would handle it. Ultimately though, you don’t really want to change your world and turn your world upside down just because you’re in a bit of a drawdown. You have to have ample cash available to take existing trades. There are ways to take haircuts, but ultimately the nature of this beast is that you want to let your winners run for as long as possible. So I appreciate everyone’s feedback and comments. If you’d like to see a particular case study, especially on trades that you would take home overnight or over the weekend, leave them in the comments or reach out through email and we’ll get on it that way.

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So this brings into sharp relief. Again, I talked about a few things earlier this week, like I don’t let people play victim with me when I know they’re deliberately putting themselves or intentionally putting themselves in bad situations. I don’t commiserate with them. I don’t entertain that type of chat. That’s why I cut a lot of people loose in my life because I don’t want to be around losers, to be honest with you. And losers are defined by losing behavior. It doesn’t mean they’re bad people, but if you’re naive or you don’t put the work on, you think something’s too easy. Or if you come in with an ego, be like, how hard could it be? I could do all of this. Then you find yourself down 15, 25%. I got no sympathy for you. If you’re trying to trade on the short end of the curve and you’re not listening to me, then that’s on you.
It’s very difficult to do that. So I think you have to think it. I’m thinking about this right now as I’m sitting here. You need to have strong sense of mental health before you need to have strong mental health. So long before you find yourself in a spot where you want to go on tilt, you want to take your computer and throw it out the window because you’re aggravated, because you’re trading sucks. You need to be able to have yourself ready long before you’re going to need to have that skill. That’s where I was lucky. I’ve mentioned before, I’ve always had a strong inner game, but I had been in business before. I had people who, Welch, I had people who owed me money and didn’t pay me. I had people who worked for me and didn’t show up for work. I had people who worked for me and tried to sniff cocaine and drink alcohol in the middle of the workday, and I had to let them go.
Everything was a reflection on me. And I was doing that when I was 16, 17, so you could stab me and cut me with a knife, but I had very, very thick skin plus who I was working for. These were very tough people when I worked at the mob places. So you had to have game. So what I would do is I would make sure this is going to come across as being probably a little bit off base. Most of you feel comfortable looking at charts, doing courses online. Maybe you’re part of a telegram or a discord. Who knows what it could be. The choices out there, frankly, there’s too many of ’em and most of them are dog shit. But you should keep track of all the time that you put into the tactics and make sure that you’re putting an equal amount into your mental game.
So if you’re going to spend an hour a day looking at charts, then you need to spend an hour a day doing jiujitsu meditation, yoga, or something to work on your inner game because that’s 80% of it. It makes no sense to me to sit there and just try to learn about the tactics of trading when you’re not doing any work on yourself. That’s why I like to be in the section that I’m in because it’s like everyone else wants to sell you a box of shit over the internet and say, if you just did it this way, you’ll make all this money or do it the way I did it. Well, I can show you the way I do show people the way I do it, but I don’t make any guarantees that it’s going to resonate for you because it’s based on my personality and my psychology and my emotional makeup.
In the online mastermind. I show how I had sugar positions on for three months in futures, taking it home overnight over the weekend. And so that might not work for everybody. I admit, people do say stupid things just to save them from the embarrassment. Someone wrote in about taking home Nasdaq 100 futures overnight that they were taking their lives into their own hands. And I’m like, no, they’re not. They’re trying to make money the smart way, using time, money, and leverage to their advantage, which is what trading is. If you’re afraid, then just speak to your fear. You don’t speak to someone else’s style.
You have to speak about what’s appropriate for you. So I would make sure, and this is inside baseball right here, coming right out of the training program is you have to work on your mental health as a form of preventative medicine long before you’re going to actually need to have a steely resolve because you find yourself down two to 5% in a week or a month or whatever would be material for you. That’s when you’re going to need the skill the most, right? You can’t try to go figuring that stuff out on the fly when you’re in the moment, right? And that seems to me to be the biggest thing that I get from folks in the email is that they understood the math, they understood the charts, but their absolute rookies in understanding themselves are understanding their own mental game. So you can anticipate for sure that you’re going to find yourself in a spot sooner or later, whether it’s a choppy market or your trading style is not amenable with the market and what the market is showing you.
And you’re going to start to feel feelings that you think you don’t want to feel like aggravation or frustration. And so from my perspective, that’s when you’re going to need to kick into your mental skillset and hopefully have a bunch of arrows in your quiver at that moment in time so that you can work through that period of time because they are coming. If you’re not in one now, I guarantee you there’s going to be something that’s going to happen. Either the instrument that you’re in or the futures contract that you’re in, or the sector of the economy that you’re in, or something that you didn’t anticipate is going to work against you in a way that you hadn’t anticipated. The blind spots are going to kick in. There might be several of them cascade, and all of a sudden you could find yourself on the short end of the trade, short end of the stick. And it’s at that moment in time that you’re going to have to rely on yourself because the trading tactics have not necessarily failed. You think they failed you, but the results of your trading might get under your skin and affect you in a certain way, where you start to undermine yourself, undermine yourself, or you start to think about things that when people start to feel insecure, what do they say? Should I start changing my rules? Should I start changing my style? Maybe I need to adjust my screener. And the reality is that there’s so much randomness in the short run. You might not have to change anything. You just have to grin and bear it, stick through it, and persevere. So to start this process, think in your brain, where have you had to persevere in other parts of your life? What can you borrow from those experiences? And what can you recall? What notes can you take down? And what skill sets did you have to deploy in that period of time that you can borrow from and use right now?

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Mike, what happens when I take a larger destabilizing loss? Well, it depends again where your emotional constitution is. If you’re writing me about it, I don’t have any intellectual solutions for you other than to ask you, are you putting in your protective stops and trailing religiously if you can’t trail based on percentage, which is ATR? Okay? You could take a look at trying to use structure and see where support is after which point. You can put your stop in below there. But if you find yourself aggravated because of the state of where the market is, if you’re aggravated about anything and you feel like that’s the predominant theme in your brain, whether it’s politics, whether it’s the summer being slow, who knows what it could be? I would literally take time off. When I was younger, I felt like a great fear about missing trading days because I felt like there was a certain amount of opportunity and I needed to be there for all of it because the opportunity was fleeting.
And if I wasn’t in the market, I could very easily ruin my career, miss out on the best trades, blah, blah, blah, blah, blah. And basically it was all bullshit. It was all self-made garbage. So what I would say is take some time off, take the rest of the week off, take a day off, look at what occurred, and try to understand from your own behavior standpoint, what was it that happened that led to this outsized loss. Now, if you lost 1%, don’t cry for me, Argentina, that’s not an outsized loss. Alright? I’m talking about something where maybe you didn’t put your protective stop in market worked against you, so the market’s telling you something, it’s saying, no, I’m the one who’s omnipotent. I’m the one who’s sitting at the head of the table and you’re lucky to be able to participate in my world, and if you disrespect me and you disrespect the risk, I’m going to communicate with you in no uncertain terms, just who’s holding all the power.
And so you have to understand that there has to be a certain type of humility that you bring to trading in that if you lose money or you lose a good chunk of your money, you can be angry all you want, but anyone who’s traded for a long time has been there, and that’s just something that you have to deal with. Those are certain little hazing things that go down in the world that happened to all of us where it took a position home overnight and the market opened lower below where my stop was. So instead of losing a half a percent, I lost say three quarters of 1%. That’s going to happen. There’s going to be times when you put on a position and you’re just starting and the thing starts to take off, and then something happens. There’s a big buyer, there’s a news story, there’s a rumor, there’s conjecture. Who knows what it is, and the thing goes up $20 before you can get more on because effectively the market moved quick or you were unprepared to win. So all that stuff thickens your skin and helps you develop what I call traitor character, because everyone talks a mean streak about being a tough guy and everything about how the world’s supposed to work, but at the end of the day, it’s life on life’s terms and everything that you do in and around your trading account should be intentional. From time to time, you’re going to come to understand that there are blind spots that you have that just kind of come with the territory because you don’t have enough experience. It says nothing about your trading ability, and it says nothing about who you are as a human being or what you’re capable of, but ignorance is out there and that’s just going to come with time.
So what saves you in those moments is or are your protective stops, and then you get to go back after the market’s closed and you do your postmortem, whether that’s every day or on the weekends, and you get to look at the situation and say, I had no idea this could possibly happen. I learned from it and now let me reinforce the stronger tenants of my trading practice. Or if I didn’t have one, how can I shore this up? You see? But you can’t try to bull your way through that. I think the more you try to bull your way through something, it doesn’t work with the market. You have to understand who’s the boss. You see what I’m saying? And it’s not, you have to understand from a standpoint of humility that if you try to bull your way through trading or through certain situations, it’s typically going to work against you.
I’ve never seen anyone kind of come. If you have fear on one side of the bell curve on the tail, and you have greed on the other side, I haven’t seen too many people come to the market continuously in either of those outlier tales and try to teach the market a lesson. Typically, they can get carried out in body bags or they just lose so much money, they quit and they say things like the market’s rigged and this and that, and they start blaming other people. Remember, we deliberately put ourselves in harm’s way, and we also have the right to not participate. So if you find yourself feeling aggravated or frustrated, first thing you can do is cut your position size down to one fourth or one 10th of your normal trading size just so that you can try to get back in the groove with things. Or you can put a times stop on yourself, right? Times stop on the trade would be like, you go long on Monday, Tuesday, nothing’s happening Wednesday, the security’s still not moving. Momentum’s obviously stalled. You can offset the trade just for the sake of doing it. And if you find yourself in a losing streak, you can put a times stop on yourself and say, okay, I’ve done nothing but lose money Monday. Tuesday.

I’m not in tune with things. I’m not going to trade, but I’ll sit at my desk and observe. Or what I would like to do is I would just not even come in, I wouldn’t even upload and boot up the machine. I would just be like, I’m taking time off. I got to get in sync. I know this doesn’t happen to me, so I’m speaking hypothetically, but if your emotions aren’t right to try to trade through all of that, it’s a recipe for disaster. So that’s why I’m saying you have to work on the mental game first because it doesn’t matter what if you’re coming to the market in a bad spot. Think of it like a relationship. You are going on a first date and you’re in a bad mood because something happens at work. You’re going to bring that to the first date.
It’s going to be a short first date, and there’s probably not going to be a second date either. So every day you have to approach the market as if it’s a first date and you’re happy to be there. You feel grateful and lucky to be there, not like you’re God’s gift, right? People have choices. And so likewise, that’s a better mindset to approach your risk management than coming in thinking that you’re owed something because you’ve put in all these hours. Putting in hours in study doesn’t mean shit. You have to put your time in managing the risk, actually managing the risk, not managing paper trades so that you can calibrate your system with what’s actually going on and feel the burn of making and losing money. You want to know what euphoria feels like and see how that prompts you to act. Do you start trading bigger? Do you double your size? It all has to be systematized, so you have to work on all of that stuff before it happens.

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So you’re in a trade, you get your order filled, and now the first thing you have to do is put in your protective stop. This is kind of like religion. It should become a hairtrigger response. I know guys have very strong reactions to hairtrigger responses, but that’s the nature of the beast of trading. You have to put your orders in as soon as you get filled and you’ve added risk, especially if you’re using a leveraged investment. Adding not a mental stop, but putting in a protective stop in is exactly what you should be doing. Now, here’s where the tricky part comes in. I get a lot of emails. I told you this is going to be email reader email week. The question always comes up from discretionary traders. When is the best time for me to move my protective stop to break even?
I’ve always advocated as fast as possible. The thing is, is that there’s got to be a little math and science behind all of that. As a discretionary trader, you’re at an enormous disadvantage in that you don’t have enough instances to really know what the best is, so have to, you rely on your gut, and that goes with part of your deciding to be a chart reader. Now, if you’re using ATR, there’s two things going on. You can look at ATR, but your ATR should also be how you use for position sizing, right? So ATR is just like a data point. It won’t mean much. So there’s a big difference between someone who’s buying two contracts, five contracts, 10 contracts, a hundred contracts like me using ATR. What does that mean? So you have to conjugate all of that to know how it works with your R.
What is the percentage of your capital that you’re willing to risk on any particular trade that’s a dollar amount should also be based on percentages. So if you’re using one half of 1% as that number, then you can look at the ATR and so every ATR becomes a half a percent right up or down so you can do the math in your head. That’s how I would take a look at that. Now as far as moving your protective stop, it seems as if there’s a crowd of people out there who get aggravated by getting knocked out of trades, and I don’t know for the life of me why that is. Maybe it’s because you only have one setup and you’re trading one instrument, so you have to wait for leap year to be able to put a damn trade on. I’ve always advocated that you really should trade one or two setups, but across dozens of instruments so that you’re not forcing trades. And two, you don’t put yourself in a spot where you can become aggravated or go on tilt because if your account’s underfunded and you can only trade the minis and the micros and then you set up finally shows up, you’re just on your knees praying to God because you feel lucky that you’re in the damn trade in the first place. So now the last thing you want to see happen is getting knocked out and getting your protective stop hit. But again, that’s something that you’re going to have to reconcile with yourself emotionally and that the truth is you go to Disneyland and you got Mickey standing there with his finger out saying You have to be this tall to be on the, you have to be this tall to be on the damn ride and you can’t reach the finger yet. That’s just the way that it goes. You would kind of invite this kind of stuff. I was talking about it yesterday. I can’t, if you want to go against the grain and bull your way into a situation that you’re ill-equipped to be in, then everything that happens after that point is on you. No one owes you anything. You’re not old enough. You’re not tall enough, you’re not this and that you to be in the game. I understand that I too started with a smaller account, but the one thing I had going for me is the emotional constitution and also the maturity to understand that whatever happened in that account was my fault, especially with the frequency and the magnitude of losses.
I knew I was an underdog, not from an education standpoint, but I know I was undercapitalized, so I had to come up with a set of rules that really worked for me and the single most important rule that I think you’re going to be using both starting right now if you’re not already doing it and going into the next 20 years of your career, even if you’re just going to run your own money, is that your job as a speculator, you can be balls to the wall hell bent for election. As a speculator, your number one job is to play superior defense. That’s it. The winners don’t necessarily take care of themselves, but you have to absolutely keep your losses small. One of the benefits like I’ve shown, and I keep referring to this because I always try to put my best material out in the community for free, is if you go back to the live stream, you can see exactly what I was thinking at the beginning of my career and why I did what I did.
If the live stream was recorded and it’s on the live tab, on the main YouTube channel, I tried to move my break, my break my stop. Sorry folks. I’m trying to move my protective stop to break even as fast as possible because if you look at the equation for the expected value of a trade, there’s four moving parts that you can try to optimize. The first part is the winning percent. That’s kind of an accuracy game, kind of hard to do. The next one would be the magnitude of your average winner. You can do that and increase that by either trading larger, which I don’t advise or holding onto your winners longer, overnight over the weekend, which I do advise. Then you have your losing frequency and then you have the average loser size, so the losing frequency you can decrease because those are things that you want to minimize, and one of the easiest ways to minimize your losing frequency is to move your protective stop to break even. So if you have 40% winners and then 60% losers, forget magnitude for a minute and you can cut and decrease the frequency with which you lose from 60% to say 40%, where you have now 20% breakevens, that helps increase the expected value of a trade, which is really the second step that you should focus on after you learn to keep your losses small. I know it sounds antithetical because you’re like, Hey man, I want to be a pro trader. I want to be a scalper. I want to be a pro speculator, and that’s all great. That’s all fine and dandy. You have to take the chances you have to be in it to win it, but at the end of the day, you’ve heard me say this before, your gains only look like gains to the extent that you keep your losses small or as close to non-existent as possible. Now, that doesn’t really work. People are going to lose money, especially if you’re a discretionary chart reader.
If you want to use the math and you’re using ATR for example, you can use ATR as the measurement to set a threshold, at which point the security, if you’re long and you’ve got a protective stop, one ATR below your entry, you can wait for the instrument to appreciate one ATR before now you adjust your protective stop to break even. That does not mean that you’re not going to get stopped out for breakevens, which might be aggravating, but I don’t and nor can I really worry about how you feel about that. It seems like some of you, when you write, I can tell that you’re aggravated and one guy wrote recently about being in that spot and it’s like, look, don’t trade then. You know what I’m saying? I don’t know what to tell you. You can’t if you’re a discretionary chart reader and you didn’t want to invest the time or the money, especially into getting a simulator so that you would know for sure what the numbers were over a 10 or 20 year period of time, that’s your call.
But now you have to live with that uncertainty of not knowing, right? That’s part of it. Again, I can’t have sympathy for people who want to feel victimized by putting themselves in these situations. Like you know what the rules are and it’s up for you to make those decisions if you want to kind of cut corners or be cheap, because that’s what it comes down to, because there’s enough affordable solutions out there that are less than a thousand dollars where you can do the work, and it’s not for me to teach you. That’s something that goes way, way deep into the premium coaching stuff. I’m not doing that here. You have to be able to do just like I did, figured it out for yourself. How bad do you want it? And if you’re not willing to do it, well, there’s your answer. You know what I’m saying? You have to have a deep look within yourself and figure this stuff out. I wanted it more than the next guy, and when they were going out doing whatever, it was boozing, doing drugs, chasing women, I was going home and doing the work, or I was staying at work, being on the phone, trying to get clients, and if you cut corners, you get the results of what that looks like. You see, so use ATR and just realize that even if you adjust your protective stop to break even, that doesn’t mean that you’re home free. It just means that you’re going to get knocked out. But you can also look at the probability of what happens when you get in a trade and when it immediately works against you and you get knocked out, and what happens when a trade starts to work in your favor, you adjust your protective stop higher because either way, it’s one ATR. And so in the short run, it’s really, really random, and if you get knocked out of five trades, that’s when people start riding and be like, man, I’ve been using one ATR, stop. Do you think I should extend it and use two ATR?
And I’m like, well, if that’s how you position size, then maybe, but you’re going to have to find a way to process your feelings around frustration and aggravation when you get knocked out of trades, especially the ones that you get knocked out of and they go on to make money. That’s just part of the deal. It’s the way it goes. And if it makes you aggravated, I would take some time away from the market and just try to process your feelings around that because if you don’t, what’s going to happen is the feelings are going to keep coming up. You’re going to get so aggravated, and that’s when you start to open yourself up to doing really stupid things like revenge trading, going on tilt or entering orders and not putting your protective stops in.

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I’m about a year behind on Reader email. I try to create lessons on most of what comes in, but first, I want to thank you all for being here. We’re in the dog days of summer. As you can see, the market’s kind of turning over. The Magnificent seven might not be so magnificent going forward. Keep in mind folks, the names that the magazines were touting in the 95 to 2000 in the.com era don’t even exist anymore. So you have to be very, very objective in your thinking despite what the hype is, especially around old coins and Bitcoin and of course ai. Anyway, one of the reader questions that came in is, Mike, if you had to start all over again, what type of trading style do you think you would start with? And that’s a really, really good question. I think ultimately you end up trading your personality.
I think if everything else being equal in a zero commission kind of world back then, like I said, the commissions were too punitive for me to trade really, really short term, I probably would’ve tried. My gut tells me I probably would’ve tried swing trading again, it’s a different day and age. You could read the tape back then, but again, the costs were very, very high and I think I would start with swing trading, to be honest with you. That’s just my gut. I don’t know, because then from there I could really kind of split the base here. I could go longer term once I got a feel for the one to five day, probably three to five day I would call swing trading and then go from there and see what would it feel like to hold positions for several weeks even in futures. And then if I developed a really, really good feel, I could maybe downtime it to day trading or even scalping where having a feel is the asset, right?
You can be taught and shown the rules, but if you don’t have a feel, it doesn’t matter. You’re not going to make any money. I think that’s why 19 out of 20 people fail in that timeframe. So I think if you were starting right now, you’d want to start with the proposition of holding risk overnight. Now, if you don’t have enough money, I would stop and I wouldn’t start until you had enough money, and I know some of you are, you probably have a different opinion about things, but I’m not a financial advisor. You’d have to figure all that out. I don’t advocate people who are just starting using their retirement money or a 401k rollover. You want to think of that as a different quality of money than what you would do with your risk capital. Trading capital by definition, is risk capital. Even if you’re 10 years for pro, right? Your retirement money is and your Section 529 money and this and that is basically your sleep-tight money. So there’s really no point in as far as I’m concerned, for you to try to put that to risk and use that as capital for a couple of reasons. One, you can’t write the losses off. Two, their contribution thresholds, and there is wisdom in the investment. Adage of time in the market is more important than timing the market. So I would really look at that money as a whole different, we talk about the quality of money. That’s what I mean by that. So that would be your safest money, your sleep tight money, your God forbid money. There’s no reason why you’d want to roll the dice or gamble. And before you say something like I am talking out of both sides of my mouth, when I did trade my 401k rollover, I had 17 years of experience. I had over $30 million of client assets, so I knew what I was doing and I already lost and made a lot of money to develop my craft. I knew who I was as a trader.
The only way you can get there is by actually doing it. So if you’re going to try to start, I wouldn’t start with the smallest timeframe possible and trade with one minute bars and try to scalp. I know that must seem very, very enticing given all the marketing language and stuff that you’re out there. But you have to understand that that’s for the pros in the business. That’s where the majority of the failure is. So I wouldn’t want to go congregate in that space. I’d want to find a spot where the people have much more success and that’s over longer timeframes. So the misconception is that the day traders are making more or the money, and that’s just not the case. Just looking at my notes here, I would start with probably three to five day swings, and then I would try to test the boundaries on either side to see, okay, now that I’ve got this down and I know I could make money, at least I’ve got an asset, I’ve got a skillset that I know I could at least make money with.
From there, I can extend my holding periods or I could decrease the holding periods to see how I can do maybe intraday or something like that. There’s a million ways to kind of skin the cat, and you’re never going to really know until you try. So I always say, don’t let me be a dream killer. Do what you think is best, but don’t use your sleep type money and try your best with that. I would say give yourself a time constraint. There’s nothing sadder than when I get an email from somebody who says, and I get them almost every day where someone says, I’ve been grinding away for 3, 4, 5 years not making any money, holding up. I make what I lose. I lose what I make. And if you don’t show a skillset in a short period of time, I’m going to say three months, maybe six months, if you’re sitting in front of the computer all day, you should be able to see lots of observations. And so if you can’t develop a feel within say, six months, I would pack your bags and try a different timeframe. I would extend the holding periods. It doesn’t mean that you suck. It just means that you don’t have a feel and that’s all that it means. It doesn’t mean that you can’t make money in trading. It just means that you’ve got to let go of your dream of wanting to do things in the short term. Let the people who do have a feel thrive there, which isn’t you and big deal. You just change your timeframe. I’ve seen this happen 10 million times and people go on to make lots of money. So give yourself a time constraint if you are going to practice on the short end of things, and I would say, like I said, three months is probably enough, but once you get past six months, I would say the odds of you actually developing a feel after six months is probably very small. Do what you think is best.
I’m just giving you what I’ve seen over 36 years. You could prove everybody wrong. This isn’t personal, but I am not going to, you have to understand this folks, if you’re still watching at this point, I don’t have sympathy for people who put themselves in bad situations. What’s the point? You’re not a victim at that point because what you’re doing is deliberate, so you don’t need my sympathy, but I also refuse to tell you stuff that you want to hear because I have to sleep and shave with myself, shave my own face in the morning so I can only show you and tell you what I’ve seen. There are lots of people who have been able to do the short end of the curve very, very well, but in the grand scheme of things, it’s a handful of people compared to other timeframes, right? Anyway, do what you think is best. At least you’ve got my advice, and I wish you the best.

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So this week we’ve talked about a few things, but I think one of the central themes is position sizing. That’s kind of where we make and lose our money. Everyone likes to focus on what’s the safest entry. I would let go of that. There is no safe entry. As soon as you start adding risk, it’s on, right? You’ve got the risk. So sitting around and thinking about what’s the safest place to add the risk and this and that, I think is a waste of time. You could spend a lot of time thinking about that, but what I would really do is process your feelings around making and losing money, right? You have to understand that this is a probabilistic endeavor. It’s not a game about being accurate. You might have it in you where that yet you need that for yourself. In my humble opinion, you’re going to find trading very difficult.
The markets are never going to behave other than a new puppy, and that’s just the way that it’s going to be. So they’re going to pee all over your floor, as cute as the thing might be. So I would think about how to process your feelings about making and losing money, and how do you feel about accuracy versus expectation With that, the one thing that you can focus on understanding, and this goes back to I think Wednesday’s episode and a little bit of Tuesday’s episode this week, is what is the optimal portfolio heat for you and for your style? Many of you have got into the bad habit of thinking that it’s risk on, risk off and all of that, but if you really started to study that and you looked at your behavior and you followed on with the traits that you were in and where they went after you got out, you can better formulate your strategy and understand and kind of come to terms how to hold risk overnight over the weekend with the appropriate amount of risk to optimize your expected value.
That’s the goal here, right? It’s not to keep taking $250 winners day after day. That’s not the point. The point is to, if you want to do it the way the pros do it, it’s to obviously study yourself, study the markets, and find everything that you can do to keep your gains large and more frequent. Then you’re your losses. So whatever you can do, when you look at that equation for expected value, what is it? It’s winning percent times the average winner size. That’s magnitude, so it’s frequency and magnitude on the win side. Subtract from the well, you subtract from the winners, the frequency and the magnitude of what you lose when you lose, and there’s ways to optimize that. You can look at your winning percent. What can you do to increase that without having it have to be 90%? A small adjustment, even going from 30 to 35% accuracy, or 35% to 40% accuracy can have a big impact.

How do you do that? Well, yeah, you hold your winners longer, and then what can you do? Whether it’s using your instincts, whether it’s adjusting your stops, what can you do to decrease your losing percentage? If you go back and look at the live stream that we did, one of the tactics that I did when I started out, especially when my account size was very small, was I tried to get my protective stop to break even as soon as possible because then I could have 20, 25% of my trade, so I’d just get knocked out at break even, which was better than to let them sit and languish and then finally lose, right? Because momentum stalled and typically your winners start making you money right away. So you can look at using time stops and being able to adjust your protective stop to break even as fast as possible.
You see what I’m saying? And then that can help you decrease your frequency of losing, and then if you found, and this goes hand in hand with holding your winners longer, if you traded smaller, you would have less risk overnight over the weekend, so this way you could hold onto your positions longer, and so it all kind of moves together. It’s not just about trying to figure out one particular thing. You could look at any four of the components of the equation for expected value and see how to optimize that. To me, that’s not done by looking at a chart. It’s done by looking at the data, looking at trading history, looking at what you could have done. There’s lots of tools out there. You can go figure out what those are. I just use the spreadsheet, the cleanest. There are services out there that allow you to upload your data and that can help you, and that’s great.
They usually come at a premium. I like to do stuff. Everything that I do on this channel doesn’t cost you money, so you don’t have to buy yet another subscription to something as you’re trying to figure out your way here on this journey. But that to me is a way, if you’re struggling and you find that you’re in the grind, is stop looking for the perfect chart pattern. Start looking at the data that you do have and start seeing what are the ways that you could possibly increase or decrease any of those components of what goes into calculating expected value, either how to increase your accuracy, how to increase the size of your average winner, how to decrease the frequency with which you lose, and then how to decrease the size of your average loser. Any of those things, maybe you could do several of them all at once, but it’s only going to become from studying your behavior, the one who’s pushing the button that says buy and sell. So you have to look at your own behavior, what’s generating the results, right?

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Some of you have smaller accounts, and so there’s a big problem in that. You might find it difficult to take trades home overnight because the margin increases. This obviously is a problem because your account’s underfunded and you have big money problems. The biggest problem is you don’t have the money, so what can you do? I don’t want to say as a hedge, but instead of coping and having to day trade or scalp, which might not be suitable for you for a whole bunch of reasons, one, you don’t have the tactical skill worse, you don’t have a good sense of timing, so it’s never going to work for you. There is a way that you can take risk home overnight by using spreads. Again, you’ll have to figure out what’s appropriate for you. Talk to your financial advisor. I can’t give you trading advice proper because I don’t know you, but if you took a look at some spreads, there’s ways to manage your risk by being simultaneously long and short.
By doing that, you cut your risk substantially. In this case, we’re looking at a spread between Nvidia and AMD, and in this case, you’d have to have the account set up to be able to short sell stocks. With stocks being short, you have unlimited loss potential. You mitigate that by position sizing. This spread takes a look at what would happen if you bought Nvidia and sold another chip maker against it, and you can see that the spread had been down to $120, which meant the price of AMD was higher because whenever you multiply something, a bigger number from a smaller number, you’re going to get a negative balance. But you can see that the spread here is widening. Whenever it gets bigger, it’s widening. So at the end of the day, it’s moved quite something. Right here is March, March, and here is June.
So in three months, if you felt the volatility of any one particular name was too strong for you, you could trade both very much smaller and traded the spread. Right? Then you could see that it’s narrowed from $20 to where it is now at $52. As who knows, maybe it starts to reverse, but you can see that there’s breakouts, there’s pullbacks. You can look at this and say, this might be more appropriate for you or better for you for your tolerance of risk. I don’t know, talk to your financial advisor, but you can see the spreads actually move. Maybe this thing is going to get to par where the share prices are equal and then become positive where the share price of Nvidia exceeds that of AMD. Now, you can also replicate this with options, but they do expire and you need to have the money where you can buy a call on Nvidia and buy a put on AMD if you want it to play it that way. That’s a little bit more moving parts, so I’m not going to cover that here.

But for those of you that trade futures, you can look at term structure, right? So here we’re looking at crude and you can see that the market’s inverted, so the front months are higher in price than the successive months. When the market is in a normal market, the successive months are higher priced, and the difference between those prices are known as carry charges. The carry from one month to the next in term structure can be calculated. Those values are known. They don’t typically trade to what we call full carry. You’ll probably get between low end 60 to maybe 90% of full carry. So they don’t really trade to their theoretic full carry values even when markets are normal, right? So then what happens is if the market is tight or there’s higher demand, markets can invert, and that means the front months have higher prices than the successive months, and you can see that here in crude oil.
It also says that if you bring whatever you have to the market because we’ll ensure it for higher prices, we’ll actually going to penalize you if you choose to deliver in October. So this instigates people to bring their inventory to market sooner because the prices are better than if they were to defer them. And if you look how far we can go out, you can go out to next year and you could see that it’s substantially lower. Now, there is no upper boundary where there is a full carry In a normal market between months, there is no upper boundary. When you look at what happens when markets invert to say it in English, this could go to 90, 95, a hundred, while this stays still, right? So this provides an opportunity for you to buy a front month and to sell a deferred month against it and play that spread widening.
So I took it upon myself to create another spread using October, December, which is a very liquid spread, no pun intended. October, December is a very active spread, and you can see likewise the spread has widened In October was trading went from a $0.40 cent premium to a $1.80 premium in a very short period of time. So that’s December 13th of last year, and this is April 5th, so it’s not like it doesn’t have pullbacks, but this is a case where you would buy that October and you would sell December against it. The point being is that when you’re on both sides of the market, you’re afforded lower margin, so that might help some of you who have smaller accounts, and you can’t take directional trades home overnight because they increase the margin on you. In my experience, you’ll have to clear it and see what your clearing member does for you. But normally if you’re trading intra commodity spreads, which is what this would be, you might be afforded anywhere between a 70 to a 90% discount on the outright directional margin because you’re simultaneously long and short. Two highly correlated instruments in that crude is highly correlated to crude. Now you can see that there’s chart patterns here. You got little head and shoulders, perhaps you sell it off you bottom reversals. You can trade breakouts the same difference. And so now it’s like how high can it go? How high can October go above December? Because even if they both go up, as long as October accelerates, you’re going to make money. If December collapses more than October net net, you’re going to make money. So this is just something to investigate. You might find that it’s helpful for you. Again, you’ll have to figure out what’s appropriate for your cash and your account and your tolerance for risk.
I can’t give you financial advice, so you can’t hold me accountable here. You’ll have to figure out what’s appropriate for you. But people asked on when we talked about margin and taking positions home overnight, you can do it with options. You could trade positions smaller, and if the micros are still too big for you, you might want to just consider stopping until you can raise enough money to put it into your account so you could do this the right way and not have to kind of fit something that might not even be congruent with who you are or what you’re trying to do, and use that as an overlay. It’s hard to make money in those situations. Now you’re really coping. You’re not really becoming who you are. You think you are because you’re doing trading, but at the end of the day, you have so many handcuffs you can’t possibly succeed. I haven’t seen it. Anyway, take a look at spreads. They’re very reliable. They’re seasonal, so you can count on them. In the commodities markets where stocks are secular, commodities are cyclical, and so you might find some value in that to help you along in your journey.

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So on the heels of yesterday’s episode, there was a comment in the comment section, but that’s where comments would be in the comment section about position sizing and how would you do this and that and kind of build into your position. So I just want to go back and review very quickly what we had done on the live stream a while back and take a look. Let’s go over there again. So I had been adding, so let’s talk about the risk unit first, the live stream. You can go onto the live tab at the YouTube channel and watch the full video there where I covered this extensively. So I’m not going to flog a dying horse here, but when you look at this here, one contract here, I’m adding another contract, I’m buying a third contract. There’s several ways to do that and to understand what this whole process means, you might come in and say, well, so there’s two ways that you could look at this.
One might be that one is your risk unit. That’s really what you add. So by the time you get to four, if you had one half of 1% risk units, you can say that by the time you got to buying your fourth piece that you have 2% at risk. In terms of portfolio heat, that’s important because we’re going to talk about that later this week. That has a lot to do with your returns. Returns and reward kind of go together. So excuse me, risk and reward go together. Reward and return of the same things. So look at this as how much portfolio heat can you take or do you absolutely need almost as a prescription for your success. You can have a goal to make a million dollars when you’re taking off $200 winners. It’s just you’re never going to get there. It’s fantasy land. So in the coaching that we do, we do a lot of work on what’s the goal, what’s the dream, and then how do we marry your tactics up to get there? And that’s where we start to make the adjustments because the goal has to be congruent with what you know how to do, what you can execute tactically.
So here you’re buying one risk unit. Maybe this is good enough for you. You don’t have to add to your winners. So you can just risk on risk off with one half of 1%, and that’s fine. You might find yourself in a spot where you like to add to your winners at opportune times. This one could be based on an ATR of six, so you’re adding at every three because that happens to be the optimal spot to do it if you’re using an ATR based system. So you could find yourself having four directional units, each one of equal

Weighting, right? So this isn’t pyramiding where you’re putting in smaller amounts of risk. This is just straight up adding to your winners based on your equity. Also, you could see that the stops are being adjusted in a very regimented manner, very strict manner. There’s no discretion there so that at the time that you’re done, you could do this 6, 7, 8, 9, 10 times. It depends on the move and it depends on what you’re looking to do. What is the goal? A lot of traders come into the market and they’re like, well, I got to put on the risk and I take the risk off. And that’s certainly one way to do it, but you’d be surprised how much money you can make if you just stopped selling winners and let them run.
The next way you could look at this would be like, well, four contracts would actually be my one half of 1%, but I don’t want to put that on all at once, right? Because then I’m going to find myself in a spot where I could be too big too quickly, and then if the market works against me, I could get blasted and it would’ve a very detrimental effect on my equity. So this is more my style in that I don’t cannonball in cannon. Balling might be a strong word, but nonetheless, I’d rather be wrong with a smaller piece at the very, very beginning rather than trying to get in and get my timing exactly right. By trading it smaller at the beginning, I can have bad luck and bad timing and it’s not going to mean any damn thing. So if you come back here, you can see that four contracts might be your actual optimal risk unit. So by the time it’s up X, Y, Z, you’re just getting to a spot where you’ll have your optimal position size on.
So how does that make you feel? Because at the end of the day, this is risk management is what you’re faced with. So in this case, you’re actually starting only with at the very beginning. At number one, you’re only actually putting on a piece as a taster unit. It’s like an appetizer when you go out to dinner, knowing that four contracts would be your optimal risk size, one is just you’re building into your position over time. Now, some of you might for this type of a style say, well, Mike, this thing’s already moved 9 cents, I’ve missed the move to me. Again, you don’t understand the nature of how markets work, right? Things don’t just go up two or 3 cents and then they stop. That’s something that you make up in your mind and you speak to yourself about, but at the end of the day, you don’t really have a lot of science, and I know there’s armchair quarterbacks, but Mike, nine times out of 10, it pulls back on you. That’s really not true. That’s not my experience at all. That’s why I like to look at the data because then I could learn how to position size into the instrument that I’m looking at in a way that’s appropriate for the amount of money that I’m running and for the amount of risk that I’m willing to take on any particular name, you ought to do the same and stop looking at charts and put together some spreadsheets and think about what are you going to do behaviorally, because that’s going to predict how much money you make and lose, not the chart. What’s most compelling is your behavior, not the charts behavior. You need to know what you’re going to do beforehand. And if you’re looking at things as only moving one or 2 cents and then that’s it, well, what are you even looking at it for? How are you going to make any money with that? You have to anticipate, especially with charts that are in the top right corner, things that have the possibility to move $10, $20, $30 maybe more. That should be your outlook so that you can put on a piece of risk that’s appropriate for where you are in your life, where you are with your investing and your trading, and let the winners run for as long as possible.
That’s the goal here. It’s not to make nickels and dimes and feel good about it. We talked about that. Don’t get in the habit of feeling good about taking small gains. It takes 61 days. There was a study done, I’ll have to figure out and find out where it was, but I remember distinctly that they said it takes 61 days to break a habit and replace it with a good habit. And taking small gains is a bad habit when you think about it. So you need to learn how to take on larger amounts of larger positions, but without taking on larger risk because those two things are not the same, as long as you know where your protective stops are. And just to reiterate before I close, you could see here every time we added, I was only really risking 3 cents even as the position grew.
So by the time I got to the third risk unit, like if you looked at this entire structure here and I get knocked out, everything’s largely at a break even, I’m going to lose 3 cents on risk. Three, I’m going to break even on two, I’m going to make 3 cents on number one. So this might be helpful for some of you who want to trade larger, but don’t want to just cannonball and pound in with that larger size at the beginning. And yes, there will be times when you get knocked out. There will be times when you can’t get your second piece on. There will be times when you get your third piece on and you get knocked out. This isn’t a game of accuracy, folks. This is a game of probabilities and you can’t fall to pieces because there’s certain trade that you fell in love with or you got your hopes up on, didn’t work out and didn’t make you money. You’re going to have to think about trading in terms of hundreds to thousands of instances, and all that is those are just data points for you to understand your own behavior so that you could model your behavior in a better way to make money. So it won’t always work out like this. I know that for sure this would be ideal, but you have to begin with the end in mind. So this is what you would think to do. And again, you could either say, well, this one contract happens to be the perfect risk unit for me, and I’m going to add. So you could do a couple ways. You could say, this is my trading right here, risk on risk off. You could say, one contract is my risk unit, but I’m going to add, so I’m going to follow this entire thing. That’s scenario number two. Add and adjust my stops accordingly. So I’m not taking undue amounts of risk. Because really when you think about it, you’re not really risking all that money, although your position size is getting larger. And lastly, you could say, well, I want to just dip my toe in where four, or whatever the n call it, N as a variable is my optimal size. I’m going to nibble in one contract at a time till I get to my optimal size and adjust my risk accordingly.
So that this way, if I lose 3 cents or one half of an ATR on one quarter of 1%, for example, right? If this represents a 1% risk unit, then this would be one fourth. If this four represents one half of 1%, then this represents one eighth of 1%. So you get to figure out what’s good for you and what you can sleep with, what you can take home at night. Different strokes for different folks. I get that. But ultimately, you have to figure out, this is where the figuring happens, right? It’s not by looking at the chart, it’s really understanding what would you do at key inflection points as the price moves and stop looking at the chart. That’s the best way to start understanding your behavior because your behavior is what’s going to predict profitability, not the damn chart pattern.

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I got some great feedback on the case study that we did last week, so thank you very much for that. Look folks, this is all shapes and sizes. There’s probably four or five right answers to any particular situation. I don’t have all the answers. I can see them all and understand them all, but I appreciate you all taking the time to say what would you do? We couldn’t make the assumption that the positions themselves were just stocks so that the capital allocated was like one position. Now, I’m one at times to be overweight as what you might consider overweight in terms of position size. The thing is, is that knowing how I position size and knowing how I use my protective stops at key strategic spots allows me to go to bed at night. Some of you are having some panic attacks about my position sizing and this and that, so let’s go back and take a look and now we can see that the world has changed a little bit.
We are making and losing money at the same time. So I wanted to kind of come back to this. These are to me real life scenarios that you can find yourself in and if we could talk about it, it might help you when you get there yourself. We had started with a hundred thousand dollars and in the last lesson case study, so to speak, we had $30,000 in cash and our account balance was at $92k. ABC was up $7k RST was up $5k. So now we have a situation where you continued to put on trades, but those trades ended up being losers while you did the right thing and you let your winners go. So we can say ABC is gold futures. Maybe it’s two year treasury notes. It could be a short sugar position, it could be a Tesla position, right? All it means is it call this variable one that might be even better and this is what I had to post in order to maintain the position.
So that could be equity or it could be buying power. So it doesn’t really, you don’t have to think of it as just stock or otherwise. Same thing with RST. I was just using tickers, but if I could put variable one in position two, it doesn’t really matter what the underlying is, but now you’re in a spot, and this actually comes from a real life scenario where in the mid from 2005 / 2006 I was in a similar situation like this and the accountant ended up doing very, very well, but I had to go through and live through certain scenarios in order to get to where I wanted to go. And so here, and I was trading it a little bit more aggressively than many of you, but here you have a spot where now the equity that you had in ABC is up, right? And now you have $9,000, so your gains have increased from $7,000 to $9,000 and in RST, your gains have grown from $5,000 to $6,000. The time period doesn’t necessarily matter other than it’s not day trading or scalping. This is overnight over the weekend. So consider this several days to who knows what several weeks later where you’ve put on some trades where you can actually see that you’re down 4K on the cash side, and so now you’re sitting here, you have things, you’re up even more in your winners, but your account is down. This is a real life spot where you’re going to find yourself perhaps frequently, especially if you’re holding onto your winners for as long as possible, maybe even adding to your winners. There will be other trades that you put on that you get knocked out of for losses and that might cause you to start to think about doing things in the overall account because of how you feel about losing the $4k from the cash account.
So how would that make you feel? Right? I know some of you, I know lemme just say this. There’s some folks who are like, you can’t take the NASDAQ 100 home overnight. That’s a stupid thing to say. If your account is too small, I get it, it probably doesn’t make sense for you because I understand now that they changed the margin. There’s a day margin where if you’re sitting with your hand on the trigger, you’re probably trading something that’s too big for you, so you have to be able to look away or put your protective stop in and walk away. Sitting there at the screen I think is the last thing you really want to do. You think you want to do it because you saw somebody else do it, but it’s not the most popular way to do things. I would encourage you to learn how to position size, find a contract that’s good for you that you can have overnight and then stick with it or a requisite amount of equity.
You’ll have to figure out, talk with whoever you talk to, your financial advisor or whomever to figure out what’s the best strategy for you for what you want to do. You’re like, well, Mike, I want to be the financial. Well, no, you should have people who help you who know more than you. Everybody should have a financial advisor. If you don’t want to hear the answers that they tell you, then that’s a different ball of wax. But everybody needs to have financial advisors because you don’t know your ass from a hole in the ground when it comes to money right now and trying to wing it on yourself and make up your mind and make all these decisions. You need somebody who has more wisdom than you. You see, that’s what I always did and I still do. I’m always talking with people who are, I’m punching up as they say, so I wouldn’t get locked into these crazy things that you say. They’re almost comical, but nonetheless, I just delete ’em because there’s no sense in trying to call anyone out or embarrass people. I generally think people are trying to do their best, although, like I said, some of the things that come out of their mouth, they’re like the dumbest things I’ve ever heard, but you have to do what’s best for you. What I know is that if you look at the Magnificent Seven and think about certainly their meme stocks for sure, but you can still separate yourself from all of that and think about a position size. And so if you look at how many dollars per share they’ve attained over the last, say, six months to a year, and you can only talk about taking a couple of bucks out of it, what you’re doing is not helping you. Your model is not working for you because taking out nickels and dimes over moves that are $10 to several $100 and if you’re undercapitalized, you might consider stopping and finding a way to get access to more money, real money, not these funding things because then you’re going to have to try to trade somebody else’s rules.
You really want to develop yourself and your own rules. So what would you do? Now you’re in a situation where you did the right thing, you followed your signals, you put those trades on. They could have been, say, eight trades at $500 each. Maybe you made a little, but net, net you lost $4k since the last period, albeit your, these two big winners have continued to grow for you, but now the account’s down 12% despite the fact that you have winners that are still making you money.
So this is a spot that you’re going to find yourself in. What do you do? What’s your plan? You have to have this stuff all worked out. I think beforehand, no one really talks about the management of the trade. They’re like, okay, I’ll wait for my setup. I got my chart pattern, I have my entry, my exit, I move my protective stop, blah, blah, blah. But this is real portfolio management. What do you do now? You’re in the trades. You’ve already adjusted your stops on ABC, and RST, but your account is still down, so what’s your plan? Leave your comments below. We can kind of keep the conversation going. Try to not generalize about what’s good or what’s bad, what’s good for you. I don’t care if you’re going to hold the data to 150,000 that’s in fantasy land. That doesn’t, if the future doesn’t exist, you have to think about what you’re going to do right now and think of it this way so that you have the plan so that when you’re in it, you follow your rules and you don’t freak out. I don’t want to say what I would do because this is more to help you understand. Plus you probably intuit like what I do. Anyway, leave your comments below. I’ll leave the good ones up.

The post Case Study Part 2: New Challenges first appeared on MartinKronicle.

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So I get a lot of questions about what can you do about your mind? How do you help your mindset? It’s not just about learning the tactical aspects of trading, although that’s what everyone’s trying to sell you is if that’s the panacea and if that’s going to be the cure to your issues. But to me, it’s more about your approach to life because trading is just a subset to a bigger mindset. So I’ve been the inner voice of trading, right? But I’ve always had a strong inner game. I didn’t know what to call it because I just thought it was normal. I thought everybody acted the way I did, and maybe they do in their own way. But the way that I kind of enhance what’s going on in my brain is through yoga, meditation. But I don’t think you have to do sit there in lotus position on a yoga mat or a bolster, trying to look at the candle and figure out what’s the meaning of life.
The quieting of your mind just allows you to have a higher level of intensity, a higher level of focus. So I would completely look at that as you could look at anything as a form of meditation, right? So yes, I can sit still and meditate. It’s not easy at first. Your mind’s going a thousand miles an hour, but to me, it’s fun. I get to sit down, quiet, turn off the phone, turn off all the alerts and the emails and all that kind of stuff, turn off the market minding and blah, blah, blah, and start to focus on just by breath. And that allows me to kind of quiet my mind when that happens. My mind is still working on things in my subconscious. I can’t necessarily explain the process, but it works for me. It is difficult at first to kind of sit and quiet your mind, but if you sit there, you close your eyes and you focus on inhaling and exhaling, that’s a good way to find your entry point.
But it’s also true that you could do something completely inane. Like if you’re just cleaning the house, you can find a meditation inside of that. If you’re into gardening, right? You’d be digging in the dirt, pulling out weeds, whatever it might be. I like to paint. I like to play guitar. I can lose myself and find any particular thing meditative. I can go inward. It really benefits me quite a lot because there’s so much going on in my life doing all these damn episodes, which frankly are a pain in the ass. You know what I mean? I’m busy. I really don’t have time to do a lot of these. So I have this week’s episodes I’m doing at the very last minute. I just didn’t have any time, but that’s because I’m meditating and I’m using my yoga. The yoga to me. I was lucky enough to be able to study with Eric Schiffman. He wrote a really great book on it called, he’s a yoga teacher, pretty well known guy, super sweet person, love him to death. He wrote a great book if you want to read about it, called Moving Into Stillness. And he was my teacher

Of them for a long, long time, for over 10 years and over on the west side. And so I really learned a lot from him on how to think about yoga, not as trying to become flexible. That’s not really the point, although that’s a benefit. I just how to feel good inside your body and think about yoga as it in and of itself as a moving meditation. Which brings me to my next point, which is hard for me. I like to go to classes and I do. I used to go seven days a week before we all got 2020, and now I kind of go to certain classes depending on the teacher, and because I have the space, I have someone come to my house. So we do it here, but that’s because I want to control the environment. What do I mean by that?
Well, I like to lose myself in the class. I’m not going there necessarily at this stage after doing yoga for 20 years to kind of learn new poses and any type of a pose that you’d see in a calendar, you don’t need that. That’s like the advanced charting packages with these trading platforms. It’s all kind of ego based showing off these crazy positions that maybe they benefit you, maybe they don’t. But it takes years and years of practice to kind of get there. It doesn’t really prove much, but everyone evolves at their own pace. I always just look at them and kind of raise my eyebrows. But you can still find a lot of benefit in doing basic sun salutations and just quieting your mind, close your eyes because then you’re not bringing in that data as an input. You can hear things, I suppose, if you don’t put on noise canceling headphones, but you can really lose yourself in that and quiet your mind.
And it’s even beneficial for one day. So that’s why I do it is because I have so much going on. It helps me concentrate better when I need to concentrate. And sometimes my best ideas are when I’m sitting there just in stillness and the light bulb will go off. That happens for me a lot. And being super creative person, I kind of need that almost as my methodology. So you might find some benefit there. I know it’s difficult to light the candle, sit there, cross-legged. Most guys don’t have the hips to sit cross-legged Indian style, I suppose they would say on the floor. But you could find anything or any way that works for you. You could sit in an upright chair, just sit with good posture and lower your head. Try to quiet your mind for 15, 30 seconds. It’s a start. It’s just like anything else in life. You’re not going to be able to meditate like a Buddhist monk at the beginning, but you can get there. I don’t believe for those of you that are listening or watching, thanks for being here and saying like, oh, I can’t do that. It’s too much. My mind’s too busy. You’re the ideal candidate.

You just have to put your mind to doing it. So that’s what I would do. But I would endorse that practice of yoga and meditation I see as one and the same, at least it is for me. You might find something different in your own practice, but I would definitely encourage you because that helps you exercise your brain and stops your brain working on mindless things that don’t really matter in your life. That certainly aren’t going to add up necessarily to your trading. So that’s kind of why I like to do it too, is that it helps me stay super focused. And to be honest with you, if I didn’t have that in my life, well probably wouldn’t be able to do this show because I have to really economize my time and use my time effectively and efficiently. And I think when you think about trading or managing money or managing risk where you can sit still for a while and it allows you time to process things when you’re constantly in kinetic energy, that’s another vibe going through your body. So you might find great benefit in moving into stillness. There’s also some other good books. There’s a lot of stuff on the internet if you wanted to do yoga. Light on yoga is probably as good as any book. I think that’s Iyengar’s book, but it’s, again, it’s only one style. There’s so many different styles of yoga. I practice haha yoga, but any number of it would be good, whether it’s Kundalini or otherwise, or this and that.

The post Several ways to approach meditation first appeared on MartinKronicle.

The post Several ways to approach meditation appeared first on MartinKronicle.