BPA trading room Q&A: March 30, 2016
Question: How long would you suspect it takes to build a sufficient skill to become consistently profitable?
Audio duration: 4min 45secs
Trading skills for consistent profitability
That is such a personal issue. It took me 10 years to figure it out. I’d come out of a medical training where the whole design of medical school is you’re learning from honest people who know how to be doctors and they’re trying to teach you what they know. But at the time in the ‘80s when I started out, the only people who were talking about how to trade and the only people trying to teach you how to trade were liars and thieves. There were no honest people. Now, I think there are some honest people out there, but back then — if you were around trading 30 years ago, you’d be shocked at just how dishonest it all was.
Anyway, I came from a medical school model where if somebody’s offering to teach, you assume they’re honest, and it just took me years to discover that the world was just filled with dishonest people. And it also took me years to discover that even honest people were not giving ideas that were not particularly helpful or profitable. And eventually I just started looking at charts, and after I started doing it — it probably took me a few years to become reasonably, reasonably, consistently profitable. But I’m trying to make it easier for everybody else.
Muhammad Ali — I don’t know if you know who he is, but to me, he’s probably the most admirable person in my lifetime. I know you can point to John F. Kennedy and I go back to Truman. Truman was president when I was born. You could point to anybody — Nelson Mandela, Martin Luther King. Muhammad Ali, I really admire the guy–he did some really difficult things. But anyway, now he’s incapacitated. He’s got really bad Parkinson’s from a career as a boxer, and if you listen to him talk, which he rarely does anymore, he talks about — he’s a Muslim. He talks about his life and how important it is to try to make peace with his God, and try to be very helpful and kind, and that’s how I feel at this point in my life. I have enough money and what do I want to do that makes me happy? And one of the things that I want to do is try to help people get ahead as traders.
There’s a lot of, I think, appeal to being a trader. And I want to see people happy; I want to see their lives better. And so it makes me happy to do whatever I can to just try to help traders become consistently profitable much faster than it took me to become consistently profitable.
Building trading skills
But going back to your question, “How long does it take to build sufficient skill to become consistently profitable?” Some people do it in six months to a year. I’ve gotten a lot of emails from traders who have done very well inside of a year of two, I guess. But other traders, it might take a few years. A lot of it has to do — I mean, it has entirely to do with your personality. How willing are you to give up your vices and become objective? How willing are you to start looking at the chart and saying, “I don’t care. The market’s going down– I got to sell. I don’t care if I think it should go up. I don’t care if coming in to the day on the news they said it was going to go up today. I don’t care. It’s going down–I got to sell. Or it’s going up–I got to buy. I don’t care if it’s not supposed to go up. It’s going up–I got to buy.” Or if it’s in a trading range. “I don’t care if it looks like it might go down forever. This is trading range price action. It’s going to go up. I don’t care if it’s going up. This looks like a lousy rally — it’s going to go down.”
Trust your objectivity
It takes a while to trust your objectivity, but that’s one of the most important things to develop in becoming a profitable trader. And once you get to that point, boy, life becomes really, really easy. To me, it becomes really easy. It’s just easy to do the right thing, trusting that what you’re doing is logical, and if you do things that are logical and if you manage your trade well, you’re always going to do well. You’ll be just fine.
Closing market review
All right, so I hope everybody has a good night. Tomorrow, I would not be surprised if it gapped down. We’ll probably trade below today’s low tomorrow and trigger the sell. Today’s a bear reversal bar after a gap up above last week’s high in what I think will ultimately be a trading range. So I think we’ll trigger the sell tomorrow, either by gapping below today’s low or opening somewhere in today’s range and then trading below yesterday’s low. Okay? Hope everybody has a good night.