Thread by @Fxflow

1/ My Weekly Trading Column

Who are You?

There is nothing more annoying, uncomfortable and unproductive than doing something you don’t enjoy over and over and over again.

2/ In our Anglo Saxon and Confucian worlds we are indoctrinated from birth to accept the fact that all progress comes through pain and discipline but that’s not really true.

3/ Einstein and Richard Feynman achieved their breakthroughs because they loved solving the mysteries of physics. Van Gogh, miserable as he was in personal life, couldn't imagine a day without painting.

4/ Michael Jordan, Steph Curry and Kobe Bryant are all known for their prodigious practice habits but they practiced precisely because they had a burning passion for the sport.

None of this is a claim against hard work and dedication.

5/ I am simply arguing that in order to excel at something you must truly enjoy the activity. That’s why anyone who pursues trading just for the money fails miserably. And the easiest way to prove that is to look at some of the greatest traders of the past half century.

6/ Paul Tudor Jones, George Soros, Ray Dalio, Steven Cohen. If money was a key motivator for them they would have stopped decades ago.

But ask yourself why? Why does Soros at the ripe young age of 91 still keep his steely eye on macro risks?

7/ Why does Stevie Cohen, who has enough money for one hundred lifetimes, still review his positions every Sunday afternoon? Why does Tudor Jones dive into the complexity of crypto markets when he could be skiing on the slopes of St. Moritz for the rest of his days?

8/ They all do it because they love it, if you come to trading without that passion you’ll be gone after your first unexpected loss.

But loving the markets is not enough. Successful trading requires a clear, honest understanding of who you are as a human being.

9/ If the idea of waiting for a restaurant table even for 10 minutes annoys you to no end - then trust me my friend will never, ever be a buy and hold investor.

10/ If on the other hand, your perfect idea of a weekend trip is to sit still on a boat for hours on end waiting for a fish to bite then it’s probably safe to say that trading the one minute chart is not for you.

11/ The next question you need to ask yourself is whether you are greedy or fearful.

12/ This is perhaps the most difficult question to answer honestly because the market offers you only two clear choices for success: you can win a tiny amount frequently and occasionally suffer a big loss (the insurance model) or you can suffer many, many small losses and…

13/ …collect an occasional big win (the lottery model). If you are always frustrated about the potential profit that you missed you will never trade the insurance model well. If you despise losing more than three times in a row then the lottery model is not for you.

14/ Put another way, you need to ask yourself this simple question - do I like being right more than I like making money or do I like making money more than being right? And you need to answer it honestly.

15/ If you just pretend to answer choice 1, when in reality what you really prefer is to be BOTH right AND to make money - well then you have failed before you start.

Lastly you need to know which way you are oriented. (And no - this isn’t some kind of a sexual quiz).

16/ The question is what is your natural market posture - trading with trend or counter trend? This is a purely personal choice and you can devise successful strategies to win either way. K for example is a pure continuation trader.

17/ Her Zip strategy always follows the flow and she has been trading it for more than 40 months in f-ing forex - the least trendy market in the world - and has only two or three losing months during that whole time.

18/ I, on the other hand, am much more comfortable being on the opposite side of the flow.

19/ Ever since the days of the Internet bubble when I shorted INKT six times, making money on every trade while the stock climbed against me 25 dollars that day, I have always been comfortable being on the other side of the market.

20/ Some people are anxious about trading breakouts, others are anxious fading them. You need to know where you stand.

Notice I haven’t mentioned anything about trading strategies. That is because they are totally irrelevant to your success.

21/ Every successful trader adapts the trading strategy to their personality instead of adapting their personality to the strategy.

But before you can do that you need to find out exactly who you are.