Random Thoughts
Beating The Dead Horse
I tend to beat the dead horse quite often. The reason I do this is twofold. One is because no matter how much I preach, I still get emails from many who ignore following my “dead horse” examples, or worse, do just the opposite and then ask me for help.
Here’s some of my preaching:
Keep it simple.
All you need is one pattern to be successful. (Raschke)
Plan your trade and trade your plan.
Wait for entries.
Honor your stops.
Take partial profits when blessed and trail your stops.
Let the market come to you.
What is, is.
You get the idea. Even with all that dead horse beating, I still get a plethora (I use that word because y’all tell me it means a lot) of emails:
"I bought XYZ because it looked very oversold and it was due to bounce back."
"I’m down 50% in that turd you recommended. What should I do now?" (The stock never triggered an entry and should have been avoided).
"I didn’t honor my stop. Do you think ABC will come back?"
"What do you think about this guru’s new system? Do you think it would be worth $995?" (note: the same guru tends to publish a "system de jour")
"This market looks like a fifth of a third, but it could be a third of a fifth. What do you think?"
It reminds me of the Tony Robbins anecdote:
A preacher kept preaching the same sermon. After church, a parishioner said, excuse me, Reverend, I couldn’t help but notice that you preached the same sermon, yet again. The Reverend said, “Ahh, I’m glad you noticed! I’m going to keep preaching the same sermon until everyone gets it.
It's Not Just You, It's Me Too
The other reason I beat the dead horse is that I often need to hear it myself. I’m not immune to bad behaviors. As I preach, trading IS unnatural. It’s an uphill battle against human nature. I live the struggle. I’m under pressure to perform for both my family and my clients. The problem is, in trading, often the best thing to do is nothing. Unfortunately, as Mr. Lambert once said, “Doing nothing is harder than it looks.” In life, you better do something or be left behind. In trading, doing something when there’s nothing to do will only dig your hole deeper.
You have to manage your emotions, not try to eliminate them. ALL decisions have an emotion attached, even minor ones. For instance, I’d love some fried catfish for lunch (it takes a lot of greasy food to maintain this body!). First, I’d have to buy some, and that would take time. I’ve got a lot going on, and it would be just my luck that I’d miss the mother-of-all moves if I left my screens for 20 minutes (I know, I preach that you shouldn’t have to be that close to the markets. It’s just that the VIX is stretched and I want to be here for when it snaps back! See the Week In Charts below. I haven't totally abandoned my methodology with this.) Further, I know I can’t just eat a couple of pieces. Therefore, I’m going to be lethargic all afternoon and likely won’t get much done. So, even a simple decision like what you’re going to have for lunch has emotions attached.
Again, EVERY decision has an emotion attached. Through injury or illness, those with damage to the emotional part of their brains cannot make a decision, any decision. For instance, suppose a doctor asks them if they want to meet next Wednesday or Thursday. They explain why Wednesday might work, then explain why Thursday would work, rinse and repeat. They arrive at a stalemate because neither has an emotional consequence over the other (Shull, Damasio).
Speaking of emotions, as mentioned often, I'm a very emotional guy. I cry like a schoolgirl when forced to watch a Nicholas Sparks movie or willingly watch a Formula One documentary (spoiler alert, they usually end badly). I also scored extremely low in agreeableness on a personality test (which, BTW, is total bullsh*t!). The point is, we all have our issues that we need to manage, even Big Dave (or "The Big Guy," as my father-in-law, who no longer remembers my name, calls me. That's yet another issue to deal with.).
Is It Crazy In Here Or Just Me?
Another “dead horse” I’ve been beating lately is that you’re not alone in being alone (Sting). We all have our struggles. Paraphrasing Linda Raschke, the market will do what it has to do to inflict the most pain on the most people. So, it’s not just you.
Lately, I’ve had a few interactions with clients that made me feel normal. Just yesterday someone asked me if I’ve “ever seen a market as manic as this one.” No, I have not.
“In his secret heart, every man thinks that the universe is especially hard on him.” Dickson Watts
I think my new dead horse is going to be camaraderie. Trading is a lonely sport. We’re not made to be alone.
Years ago I was speaking at Trader’s World in Germany. I remember two traders from my seminar. One was profitable while the other was not. Did one have a superior system or insight? No. They were best friends and shared everything. The Captain Obvious solution here would be for the unprofitable trader to simply follow the profitable one, become profitable, and then execute on his own. For him, I’m guessing it’s easier said than done, but again, the solution is simple. My point is that we’re better together.
A few years back, Marcy told me that starting my Facebook Group* (you must be at least a Gold member of www.davelandry.com to join. That keeps the riffraff out. I'm half kidding!) was one of the best things that I ever did. It’s been great to interact and see that, no, I’m not alone in being alone. Also, having additional eyes on the charts has been a Godsend.
Anyway, again, I think camaraderie is going to be my new “dead horse.” We can be better together!
May the trend be with you.
Dave Landry
*You must be at least a Gold member of www.davelandry.com to join. That keeps the riffraff out. I'm half kidding!)
