{"id":46024,"date":"2015-11-22T08:06:15","date_gmt":"2015-11-22T16:06:15","guid":{"rendered":"https:\/\/brookstradingcourse.com\/?p=46024"},"modified":"2022-04-05T07:07:20","modified_gmt":"2022-04-05T14:07:20","slug":"problems-on-road-to-trading-profitability","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/pt-br\/ask-al\/problems-on-road-to-trading-profitability\/","title":{"rendered":"Ask Al: Problems on road to trading profitability"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">BPA trading room Q&amp;A: August 28, 2015<\/h2>\n\n\n\n<p>On your road to profitability, you sometimes had doubts that you can get there. Can you explain what got you through those tough times and, being that it\u2019s such a personal journey at the same time, how did you communicate these issues to inquiring minds?<\/p>\n\n\n\n<p><em>Audio duration: 9min 34sec<br><\/em><\/p>\n\n\n\n<figure class=\"wp-block-audio\"><audio controls src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2015\/11\/ask-al-34-150828-problems-on-road-to-profitability.mp3\"><\/audio><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Audio transcript<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">Markets are fairer these days<\/h3>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"alignleft\"><img loading=\"lazy\" decoding=\"async\" width=\"144\" height=\"216\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2015\/11\/mad-wife.jpg\" alt=\"wife mad at trader\" class=\"wp-image-46029\" title=\"\"><\/figure><\/div>\n\n\n\n<p>I think what he\u2019s saying is \u201cDid my wife get mad?\u201d For me, in my mind, I believed in the markets. I believe that the markets are fair and balanced. They are much more fair today than when I started 28 years ago, but even then they were still pretty fair. There were certain built-in problems for traders. At the time when I started trading, you had to call in orders and so the guys on the floor had a big advantage. They\u2019re right there on the floor and they could trade instantly, and if you call in and you have to do something really fast and you hear it ring once, you hear it ring twice, you hear it ring three times, and the market\u2019s going against you &#8212; let\u2019s say you\u2019re trying to get out &#8212; it\u2019s really upsetting and it\u2019s really a big disadvantage compared to the guys on the floor. But that\u2019s gone.<\/p>\n\n\n\n<p>Most of the guys on the floor now are just like you and me &#8212; they\u2019re trading at home or in an office somewhere. So that advantage for them is gone. Institutions still have something of an advantage. They\u2019re operating with deep pockets and lots of computer algorithms, and they can grind out consistent profits. But my thought was: I don\u2019t have to be smarter than the other traders, although I\u2019m pretty arrogant &#8212; I think I am &#8212; but I don\u2019t think that\u2019s the key to successful trading. I think the key to successful trading &#8212; Babe Ruth is a famous home run hitter, right, but you cannot win unless you got guys with really high batting averages. You need the guys who are going to hit a lot of singles. And for me, the key to successful trading is not trying to be great. And I\u2019ve always thought that, that it\u2019s nice to be great, you hear about great traders, but I don\u2019t think that\u2019s the goal. Also, I don\u2019t think you need to be great. All you have to be is consistently good.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Starting out\u2014making too many bad trades<\/h3>\n\n\n\n<p>All of us make enough money to make a very good living as traders. The problem when people start out is they make enough bad trades to more than offset the good trades, so I think one of the keys to success is learning how to get rid of the bad trades and try to become more selective, and then trying to manage trades better.<\/p>\n\n\n\n<p>At the time when I was starting out, I lost for, like, 10 years. I don\u2019t remember; <a href=\"\/ask-al\/how-long-before-consistently-profitable\/\" target=\"_blank\" rel=\"noopener noreferrer\">it was about 10 years<\/a>. I had three kids. I had one daughter, and then 15 months later I had identical twins, so we had three kids under the age of 15 months, and I have to say that raising kids was by far the biggest focus of my life and trading was secondary. And I didn\u2019t mind losing. I felt like I could not devote my attention to it as well as I wanted. I was an eye surgeon for 10 years; I owned a surgical center, and I had a pretty good nest egg saved up so we were living off that, and plus my losing &#8212; it was not enough to eat up too much of my nest egg. So I got by; and as the kids started getting older and needing me less, I was able to concentrate more on what I was doing. And I was just confident that &#8212; it\u2019s like poker &#8212; all you have to do is be a little bit better than average. There\u2019s a vig, the house takes a cut, right? And trading, the house takes a cut. You buy at the Ask, you sell at the Bid, and there are commissions. You have to be better than the average person plus &#8212; pick a number, 5 percent, something like that. And that, to me, didn\u2019t sound like too hard a goal &#8212; to be better than average plus 5 percent. So I had to be in the top 45 percent of people.<\/p>\n\n\n\n<p>And yes, this is not like a pick-up softball game where you have to be better than 45 percent of the people, where you just have random people from your office and most of them really don\u2019t care. Here, everyone trading, or at least the real money is being traded by people who really do care, and they\u2019re not just recreational people &#8212; they\u2019re serious players and they\u2019re really good. But I felt that \u201cWhy not me?\u201d If I work hard and just try to be consistently good, and try to get rid of the problems that are created by my personality flaws, I thought that I could do it. And I just trusted in that and I just kept working at it, and then eventually I was able to achieve what I wanted to achieve. It\u2019s also the same with companies. There are a lot of corporations &#8212; if you open a restaurant &#8212; everyone knows most restaurants fail, but everyone also knows that if you really think about it, you could open a restaurant and be quite successful, or any kind of a business &#8212; a printing shop, a coffee shop. If you really put your mind to it, yes, there\u2019s always a lot of competition, but if you really think through what you have to do, it\u2019s not all that difficult to beat the competition.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Treat trading like any other business<\/h3>\n\n\n\n<p>So to me, this is a business, like every other business. Yes, there are guys working for Goldman Sachs and Morgan Stanley and all the banks, but a lot of them are good, but &#8212; a lot of them are just going through the motions. That\u2019s my belief. It\u2019s like corporations. A lot of the CEOs &#8212; you always hear about these great CEOs, <a href=\"https:\/\/en.wikipedia.org\/wiki\/Jamie_Dimon\" target=\"_blank\" rel=\"noopener noreferrer\">Jamie Dimon<\/a>, and you just hear about how smart they are and how good they are, how effective they are, but that is not most CEOs. A whole bunch of CEOs got the job because daddy started the company or because granddaddy started the company. Look at the car companies &#8212; Ford still run &#8212; I think it\u2019s still run by a Ford family member. And you have to think \u201cIs hiring a family member getting the absolute best and brightest to run the company?\u201d and the answer is no, and that allows a company like <a href=\"https:\/\/www.youtube.com\/user\/TeslaMotors\" target=\"_blank\" rel=\"noopener noreferrer\">Tesla<\/a> to come in and just kill Ford. Trading\u2019s the same way. There\u2019re a whole bunch of traders out there, even institutional traders, who are probably good but not great, and they really don\u2019t care if they\u2019re not great. All they know is they\u2019re getting paid a half million dollars a year continuing to do what they\u2019re doing, and there\u2019s really no incentive for them to get to the next level. The amount of work required to get to the next level is not worth it to them financially when they\u2019re already getting a half a million dollars a year.<\/p>\n\n\n\n<p>I think the competition is good, but I really don\u2019t think you have to be fantastic. You don\u2019t have to fantastically smart. I think you just have to develop the ability to hit singles. Just consistently do the right thing. You don\u2019t need to be hitting home runs; you don\u2019t need to be looking for the world\u2019s greatest trade; you don\u2019t need to be trying to get every tick out of a trade. All you have to be constantly doing is something that is reasonable. Just ask yourself, \u201cIs what I\u2019m doing reasonable? Is the buy setup reasonable? Is my stop reasonable? Is my profit target reasonable?\u201d And you don\u2019t have to be a genius to decide what is reasonable. We have juries all the time deciding what is reasonable, and the lives of people are in their hands, and our society trusts 12 ordinary people to come up with a reasonable decision, and the decisions that they make, a lot of times, are far more important than the decisions that we make.<\/p>\n\n\n\n<p>So, it\u2019s nice to be super smart, but it\u2019s more important I think, as a trader, to have the personality skills, to develop the personality skills, the ability to not take trades that don\u2019t suit your personality that you know that you don\u2019t manage well. Just try to stick to things that work fairly well to you and get rid of everything else. I play a lot of tennis and I like to spend a lot of time at the net. I play doubles all the time, and I\u2019m very aggressive at the net and I\u2019m very good at the net, and that\u2019s where I spend my time. I\u2019m not good playing deep at the baseline. I\u2019m not good hitting backhands, so I was trying to find a partner who\u2019s good at those things so I don\u2019t have to worry about them, and I just do what I like to do. I just stay at the net, and I\u2019m very good &#8212; I\u2019ve got very quick hands, and that\u2019s all I do. So in trading, it\u2019s similar. If you have a certain style of trading that suits your personality, don\u2019t worry about doing all kinds of other things that you don\u2019t do well, or that stress you out, or that upset you. Just find the things that work for your personality and work on getting consistently better at them.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Trading is not gambling!<\/h3>\n\n\n\n<p>I\u2019m sorry for the long answer, but that\u2019s how I look at it. Also with trading, I still get people teasing me about gambling. \u201cAl, you\u2019re just gambling.\u201d And I tell them, \u201cIs it really more like gambling or is it more like buying an apartment building, or buying a UPS store, or buying any other kind of business?\u201d I think it\u2019s more like buying a business or buying rental property. The only thing that\u2019s different is the timeframe. So, if you buy rental property, you\u2019re hoping to make money from the property over the next several years, and if I\u2019m buying an Emini contract, I\u2019m hoping to make money over the next several minutes. The risk is the same. I think what\u2019s different is the timeframe. We\u2019re just operating in a world where we hold things for a much shorter timeframe than if you buy a McDonald\u2019s franchise or if you buy an apartment building.<\/p>\n\n\n\n<p>So no, I did not get bothered by family members &#8212; my wife, my kids, \u201cAl, why are you doing this stupid thing? Why don\u2019t you go back to practicing medicine?\u201d But I think, in large part, that was because we were all so consumed with being a family, and I came in with a pretty good nest egg that allowed me to do it.<\/p>\n\n\n\n<p><em>Al Brooks<\/em><\/p>\n\n\n\n<p><a title=\"Al Brooks&#039; trading room\" href=\"https:\/\/www.brookstradingcourse.com\/online-day-trading-room\/\">Information on Al&#8217;s Online day trading room<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n","protected":false},"excerpt":{"rendered":"<p>BPA trading room Q&amp;A: August 28, 2015 On your road to profitability, you sometimes had doubts that you can get there. Can you explain what got you through those tough times and, being that it\u2019s such a personal journey at the same time, how did you communicate these issues to inquiring minds? Audio duration: 9min [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"shadow","_genesis_layout":"","footnotes":""},"categories":[159],"tags":[],"class_list":{"0":"post-46024","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-ask-al","7":"entry","8":"has-post-thumbnail","9":"override","10":"shadow"},"featured_image_src":null,"author_info":{"display_name":"BTC Admin","author_link":"https:\/\/www.brookstradingcourse.com\/pt-br\/author\/richardhk\/"},"_links":{"self":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts\/46024","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/comments?post=46024"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts\/46024\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/media?parent=46024"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/categories?post=46024"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/tags?post=46024"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}