BPA trading room discussion: April 14, 2015
Discipline—While discussing trading opportunities in a tight trading range, Al talked about how trading just for the fun of it will get you fired — if you worked for Goldman Sachs! If you are your own boss, you will simply exhaust your account balance.
Audio duration: 2min 11sec — Scroll down for image
Trading is fun when you win, but to me, I never lose sight of the goal. I’m in this for the money. And I ‘m not embarrassed to say it, that’s my job. My job is to make money. I’m good at it, and I stay focused. I just keep trying to do things and only do things that will accomplish my goal. Yes, it’s fun to trade and it’s fun to do something and say “Oh I wonder if this will work. Oh boy, that’ll be fun if that worked”. To me it’s kind of disrespectful of myself and of my profession. I’m proud of what I do. Feel like I do it well. And I do take pride in what I do. Doing things that are unprofessional, amateurish, or entertaining doesn’t fit my image of myself and of what I am trying to do.
And if I were working for Goldman Sachs it’s easier to do the right thing because you’ll get fired if you screw up. Here, I am my own boss, and obviously I like me and I’m not going fire me. But, on the other hand, the ‘worker Al’ has to be responsible and respectful of what the ‘employer Al’ expects of him. I know it’s kind of odd to hear me talk about myself in two different roles, but in fact, that’s what it is. I am my own supervisor, and I as an employee do not want to do something that would get me fired. And if I was working for Goldman Sachs, I could not on bar 76 say “Oh I wonder if I sell that”, or on bar 72 “I wonder, oh maybe I’ll buy that. Maybe I’ll get a home run and get a big bonus”. More likely you are going to lose money and at the end of the year you’re going to get fired.
They don’t want you taking whimsical trades that are entertaining and feel good. They want you to only do things that make sense and have a statistical basis—a reason—a mathematical reason to take them. A likelihood that you are going to make money if you do that trade ten times. At the end of ten trades, will you be profitable? Yes, on any of these days you can buy or sell and you can make ten points. But if you take that same trade on ten days, yes, you’ll make ten points on one day, but you’ll lose four on another day, two on another, and you’ll end up losing more than ten points. So better not to do it.