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The AlphaMind Podcast
Mastering trading is not about mastering markets but mastering yourself. The AlphaMind Podcast focuses on the 'Trader Self'. We look at the person doing the trading, their interactions with the market, the impact the market has on them, and the skills, actions and activities needed to navigate their way through the complex and uncertain terrain of financial, commodity, energy and crypto markets.
The AlphaMind Podcast
#156: You Can Make a Fortune Trading - Don't Let Anyone Tell You Otherwise - With Matt “Pax” Kenah
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
In 2000, a young Japanese trader named Takashi Kotegawa (better known as BNF) began trading small-cap stocks from his bedroom with just $13,500. Eight years later, he had turned that modest stake into a staggering $153 million.
This legendary feat serves as the anchor for a recent viral X post by veteran trader Ryan Scott (aka The Flow Horse). Ryan’s post (linked below) argues a provocative truth: despite the cynics, it remains entirely possible to build a fortune in the markets. But if the opportunity is real, why do so few actually succeed?
In this episode, we welcome back veteran trader Matt "Pax" Kenah to dissect this debate. We explore the deep psychological, mental, and behavioral hurdles all traders face, specifically focusing on the challenges of transitioning to a home-trading environment and the discipline required to become one of the elite few who truly thrive.
Links:
Ryan Scott (Horse) @TheFlowHorse - The Post: You Can Make a Fortune Trading - Don't Let Anyone Tell You Otherwise
Find out more about Matt and the PAX group at https://thepaxgroup.org/
You can follow Matt on Twitter at https://twitter.com/paxtrader777
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Welcome to this week's Alpha Mind Podcast. And our guest today is an old friend of the Alphemine Podcast, Matt Kenner, also known as Pax PAX, a former floor trader from Chicago, who now still still trades a little bit, but also educates traders. And he has been around for many years, starting in the 1990s, when the uh old Chicago floor trades were uh very much the day, and uh he had um he's had quite a turbulent and volatile career, achieving great success, um, then facing challenges, trials, and tribulations, and then coming back to really learn how to trade on screens and online. Um, and it's been quite a fascinating journey for him. Our first podcast interview proved to be one of our most popular. It was actually split up into two episodes back in 2022. Um, so it it it's absolutely a thrill for us to have have Matt back on the F-MAN podcast, and we hope you're going to benefit from listening to some of his story again and some of his uh experiences. Uh, before we go there, um, first a little bit about our podcast sponsor, the Society of Technical Analysts, the STA. They provide technical analysis education and services. Um, they also provide a fantastic uh diploma program and a home study course, but you can really go in deep and learn so much more about technical analysis than you learn on those five-minute YouTube videos. And that is available by going onto their website, technicalanalysts.com. And uh, if you do decide to uh explore the home study course, be be mindful that we can um Alpha Mind listeners can get a small discount on the price of that course. Just go onto our website alpha-mind.net to find out about that. Now, on with the podcast. So, welcome to this week's Alpha Mind Podcast with me, Stephen Goldstein. Um, my colleague Mark Randall, unfortunately, is not able to join us today. But we're delighted to have back one of our favorite and most popular guests of all time, Matt Pax Kenner. And uh welcome to the uh the Alf Mind Podcast again.
SPEAKER_02Oh geez, Stephen, thank you for having me. And and what a what a what a great introduction. That makes me feel good. That makes me feel confident coming into this podcast, and I was I was one of your favorite guests.
SPEAKER_00Oh yeah, it was a hugely popular one of one of our most popular episodes, or both both actually. And I think I think a big part of them were how honest and frank you were.
SPEAKER_03Yeah.
SPEAKER_00You know, you told your story, you you you left nothing out, you put everything on the table, uh and people really resonated with uh with what you said, which was uh just as a reminder, you know, you had a fascinating introduction um into the industry. I think you originally were going to join the priesthood, if I remember rightly.
SPEAKER_02Yes.
SPEAKER_00Yeah. Um and um I think whilst uh whilst going through that journey, you you got introduced to the uh the world of futures in Chicago and the old open outcry place. Um and I guess you had an interesting choice.
SPEAKER_02Well, I started um I graduated high school in 1986, and I was driving a truck for my uncle in on the south side of Chicago after I played football in college for a semester, got hurt, didn't go to school, and uh, but I was still living there and and it was a school in the city. So I was living in the dorms. Uh I wasn't and I wasn't going to school, I was working. My father found out that I was driving a truck and said, listen, you can't, you know, you can't you can't have a family, raise a family on what a truck driver makes. So you have to, you know, become a policeman or fireman in Chicago, or you know, which is a lot of what a lot of first uh second generation Irish do, or you know, get a trade, learn a trade. And I'm um I'm the least handy person in the history of handy men. So I that wasn't for me. Um I I had a guy, um, uh one of my closest friends was a runner, um, and uh and becoming a phone clerk at the Board of Trade. Um, there was a guy in our neighborhood, uh guy named Pat Gironda, who had grown up, you know, very dis on the south side of Chicago, very much the same way that we did, but he was the he was very wealthy in his mid-20s, and he was one of the biggest donors to the high school that we went to in his mid-20s. So I wanted to do what he did. And I I called my friend Frank and I said, Frankie, you know, can you get me a job? And he said, Yeah, I got a job as a runner at the Chicago Mercantile Exchange in in January of 1988, which was just a couple of months after the crash of 87. So the markets were quiet, markets were dead. I made minimum wage, um, $89 a week. So I I uh um I didn't take that job to make minimum wage. I took that job to learn that business. But when I walked onto that trading floor, Stephen, I knew that whatever was going on down here, I was gonna find out what it was. It was, you know, the energy of the trading floor. The um, you know, I were uh was everything was on the same floor. The SP, you know, as you walked on, the S P was to the right. Behind that was the year dollar uh quadrant. On the other side was the currency quadrant where they traded, you know, all of the different Forex from Deutschmark to Swiss franc to Italian lira to Mexican peso to British pound, yeah, and so on and so forth. And then uh in the corner was smashed the meats. So he had cattle and pork bellies and live uh lean hogs. So all smashed onto one floor and we were bursting at the team. So they actually ended up starting a second floor. So I walked onto that floor and I wanted to know what was going on on there, and I wanted to be part of it. And it just, you know, I I I found my people, you know, my brain, my brain works quickly. I take in a lot of information and you know, and it slows down. So while I'm I might be talking quickly and thinking quickly, everything seems like slow motion to me. So and I and I I'm not very good with math, but I'm very good with patterns and I'm very good with, you know, like I can, I can uh if this I don't even know if this makes sense, but I can see sort of complicated mathematical equations naturally, you know, without really being able to explain it. So that helped. And I've got uh a great memory. That helped. So I I quickly rose through the ranks as a clerk, and I was making, you know, like I started off making $89 a week, and then I got a job holding a deck in the lumber pit. Uh, a deck is where the paper orders were written and ran to. And I was making $150 a week there, and then I learned the hand signals, you know, uh uh arbitrage, we called it, uh, to communicate in uh with the pit broker with the uh the customers, you know, uh that were all over the world with phone clerks. And I did that for $350 a week and I got good at that, and that led to a $500 a week raise, led to a $750 a week raise, led to $1,000 a week, and that's $52,000 a year. And I'm, you know, 19, 20 years old living at home, making 50 G. That was not bad. So my mother had gone to a place in uh Bosnia and Herzegovina called Medjigoria and and um had come home with a really renewed sense of our Catholic faith. We've always been Catholic, we always went to Mass, but there wasn't, you know, a whole lot of meaning behind it. Like it was just we are cultural Catholics. So I had she came home, she had come home, and my mother and I were very close. She had come home and and you know, we were she was going to rosary prayer groups, and I started to go with her. And you know, so here I am making a thousand a week, and I'm I'm I'm dating, you know, a beautiful woman, a big old you know, a girl that we were young. Um, but I just thought that there had something more to this, you know, I'm missing something. And you know, I'm going to mass almost every day at this point downtown. I I in my lunch break, I go to mass and I went to confession twice a month. And, you know, I'm really getting into, you know, and really learning the meaning behind the Catholic faith and and Christianity. And and and so I thought maybe I'll become a priest. So um we had a meeting, our group was expanding to every option in the pit. So almost every clerk was getting their membership, getting their seat. And I was gonna go fill orders in the second option with a guy who's still one of my best friends. And I raised my hand and said to my Jewish boss, Stephen, uh, his name was Steve Mendes, Stephen, I think I want to be a celibate man and become a priest. And he looked at me like I was I had three heads, but he said, All right, you know, uh before I sign this contract for three years, I think I have to go, you know, give this a shot. He said, Okay. Um so I did. And it was, it was uh uh I was there for three and a half years and I finished my my undergrad degree uh in philosophy with a uh double major in theology and a minor in history. It was a seminal experience of my life. I got a great education. Um I had structure to my life, you know, uh the seminary gave me that structure that I that I maybe lacked growing up. And I had, you know, I had learned a lot about a lot of things and was able to really kind of learn how to think and not only just think rationally and logically, but how to express myself and uh, you know, using my voice and writing, and you know, um, but my mother had gotten sick with lung cancer, and I was gonna go to Rome for my last four years. I I finished school in three and a half years. I was gonna go to Rome for my last four years. So I took a leave of of absence from the seminary, and um, and I went, you know, well, what am I gonna do? Well, my mother is is going through treatment. So I uh I went back to the Merck, and before you know it, I'm dating the woman that I would marry and uh my ex-wife. And and so I just, you know, I ended up leaving the seminary and I I started trading um about a year after that. So I left the seminary in '95, got married in '96, started trading in '97, and I made my first million by 99. So there went the seminary.
SPEAKER_00Fantastic. Great story. I mean, good. Uh you it is an unusual one. Most people are sort of okay. Most people don't go down that path.
SPEAKER_02No, no, no, they didn't. You know, my badge, my my trading badge, and what everybody knows me on Twitter and people still, you know, call me is is PAX. So when we got our when when we would get our membership, we had to, we we we chose, you know, an acronym that reflected who we were. And I think I have mine someplace here. And and I I had decided. Oh, here. Sorry for the noise. Oh no, those are trading cards. I had decided that I wanted my badge to mean something. So people would get their like their their initials, my initials were taken, um or or it'd spell like some derivative of their name, and that was taken. So I chose PAX, which means peace in Latin.
SPEAKER_00Fantastic. Beautiful.
SPEAKER_02Every so often when I would get in a fight with somebody in the pit, you know, or done punching each other in the face or pushing each other around, somebody would inevitably remind me that my badge means peace. That always pissed me off.
SPEAKER_00Listen, that that that term, the pit, is it's alien to most people because those days are are gone. And um, you know, if if we go back to those days, you know, it was quite hard to become a trader if you weren't trading in a pit somewhere as a private trader. But we we live in a very different age now, and you know, anyone with a keyboard and and a few dollars um can can start trading, and that's the world we're at, and it's become uh hugely, hugely uh democratized, and uh everyone around the world is seeming to do it. I I know estimates uh are that at any one time there's somewhere between 200 million and 400 million people involved somewhere in trading. I don't know how they get those numbers, but um you know I'm not I'm not gonna argue with that. Um so I I I guess the the challenge is that very few people can actually make a success of it. Um you know, outside of the professional world where you get paid to do it, and so let's let's let's park that for now. Um there is a a challenge of whether you can actually make money, and there was a or how hard it is to make it. And there was a brilliant post and put out by by Ryan Scott last week um on Twitter, uh The Flowhorse at the Flowhorse, which kind of went viral. I think I think it's had um well over two million, I think nearly three million views. Um and I guess I wanted to talk about that a little bit because it it felt so right to talk about it with both of us having working in that world. Um and and the the the head the the the title of the post was you can make a fortune trading, but don't let anyone tell you otherwise. Um and that that was kind of a uh a whole newsletter post he wrote. Um and it you know it it it sparked a lot of debate because there's some people that say, well, you can't make money trading. Um something I don't believe, um, and never have believed because I work with a lot of private traders, I coach a lot of private traders who who do make a lot of money and have made a lot of money. And I don't coach them on the technical aspects um of trading. I I gather people like Flo Hawks and quite a lot of other people out there um work on that. Um but it is it is possible to be one of them, but you have to realize that a very small number, a very small percentage of people are able to make it um work for them. But I think most people go into it wrong, and I just wondered what your view on that was.
SPEAKER_02I I I retweeted that article. That was a great article, Ryan, and it was very well written. I mean, if Ryan listens to this, man, that was really, really good. Um it is it's a statistical fact that 90% of us are gonna lose our money or or or lose at least our initial seed, right? You know, blown account, everybody talks about blown accounts, blown account, blown account. Um, but it's always been that, even when I was on the floor. And and on the trading floor, we human beings created the volume. You know, uh we moved, I uh I was a I was a very big, I was one of the biggest traders in the NASDAQ futures um in the pit. And I could move the Nasdaq by myself. I can move the Nasdaq a hundred points with the money in my account with my hands and my voice. We created the volume, we created the movement. That's our microprofile became important, uh, auction theory and all that other stuff. Um, but you know, as in 2003 computers began to take over, you know, uh uh talk about AI changing the business. It truly changed the business until gradually there was very little volume left in the pit. And I mean like by 2004 or five, the vast majority of the volume was on the screens. And and that was where the quants came into play. And and you know, and and and and it became harder and harder for for people to make money. Um, so you know, but it became easier and easier for people to become traders. You know, on the floor, you had to go through, you know I mean, you had to, you either had to have a ton of money behind you and then go through membership, or you know, to to just a lot of other things to become a trader. Or if you were like me, you had to earn your shot. You had to stand out from the three or four thousand other clerks on the floor that wanted to become traders, and you you had to work for five, 10 years to find a backer. Um, you know, now all you have to do is open an account, and you're you're you know, especially with the advent of these these uh these funding companies that call themselves prop, they have um, you know, anybody can trade. And the vast majority of them, those, those people are going to at least blow account after account after account before they learn. So, you know, if um Steven, there was, you know, what the biggest independent trader ever was a woman named Margie Teller. She was uh there there have been some huge traders, some incredibly successful traders that were independent traders, but Margie, I think, is the biggest. She was 10% of the Eurodollar, um, which is now the sofa. She was 10% of the open interest, not the volume, but the open interest. That's bigger than most banks. So um uh I was having a conversation with her and a bunch of other traders one day, and she said, You're looking at the same technicals as you, you're looking at the same so you got you have the same sport and resistance, you're looking at the same wedges, the same triangles, the same trend lines, the same everything. What separates you from you, from you, from you? Why will you fail? You fail, you fail, but you become wealthy, you'll blow that money, you'll keep it, you'll do this, you'll do that. You know, and I I listened to that and I took it to heart and I thought over and over and over again about what that meant. So ultimately, the difference maker is me. You know, it's not the technicals, it's what I'm bringing to the screens. You know, I I ran into Terry Duffy, the chairman of the CME group, who was who was a very good friend of mine for many years, and I hadn't seen him for a little bit. And, you know, uh, um, uh, did you ever start an HFT? You know, a high-frequency trading company. No, no, I figured it out on my own. It took me a long time to figure out how to trade on the screens, but you know, I figured it out. And that was a journey. Most of us coming from the floor to the screens couldn't trade, and we failed because you know, it was a different world, completely different world. But also, it was a, you know, the hardest part was computers were moving the market, humans didn't. So the things that worked in the past didn't work anymore. Now we had to figure it out. It wasn't until like 2013, maybe 14, that it became, at least among the independent traders that I knew, that it became, or even 15, that it became more and more acceptable that independent traders can, in fact, and are making money and are doing it consistently. And again, it's not about the technicals as much, I think, as it is about what's in your heart, what's in your mind, what you're bringing to the screens, you know, what your personal makeup is. That's why, that's why I talk about my journey, you know, and and I talk about having generational life-changing money. And then 12 years later, after divorce, after the Great Recession, after remarriage and the Great Recession, and after MF Global and all kinds of other natural disaster, you know, the disasters that happen in my life that I didn't cause, I blew myself up. You know, I went from having a gigantic net worth to driving Uber and starting all over again. And I when I started over again, Stephen, I knew that it was more about what was in my heart and soul. I I had I knew it was more about my fear. What were my fears? When I didn't have any money left, um, when when all I had was was uh a God that was faithful to me and the love of my beautiful wife and the the love of my five kids, when that's all I I had, and I realized that that's all I actually needed, I became grateful for the experience that I had because I knew I can build on it. I dropped the fear that I was carrying, you know. If this is the worst that can happen to me besides death, well, this is okay. We have a roof over our head, it might not be the roof we want. We have foods in our stomach, it might be not be, you know, uh wagyu, grass-fed beef or whatever, you know, but it's food and we have clothes on our back. It might not be our money and it might not be, you know, uh uh uh whatever, but you know, we have clothes in our back and we're okay. So I didn't fear failing anymore, I didn't fear success anymore. My kids needed to eat, you know, I needed to provide for my family again. And how can I do that? So I dropped a lot of that fear, you know. Now I am not as as Ryan wrote in this piece, I am not competing with the quads, I am not competing with the HFTs, I can't compete with an HFT that trades thousands of SP contracts in a picosecond, you know, and trading every tick and moving the market all over the place for a thousand different reasons. I can't do that. I don't have that speed, I don't have that ability. I'm competing with myself. And when I realized that I had no more fear, all I had to do was learn how to be consistent again. All I had to do was learn how to make money again. All I had to do was learn how to be successful again. And so I started to move forward again without any other baggage. The baggage was gone, the fear was gone. So I had nothing but blue skies ahead of me. I had nothing but things to accomplish and things to do. I had nothing but success and in and the ability to be able to visualize that success to move into. And so I did one lot at a time, one trade at a time. And I quickly realized as an independent trader that the less I traded, the more money I made. Not the less uh size, the less round turns. You know, if I if I make more than five or 10 trades in a day, I'm losing money. Um now, uh uh uh now, you know, I mean those when when the like today, I stopped trading about you know 10 minutes after the open. I anyway, that that's me, you know, my my my style of trading or my process. I I I do two shows on Ninja Trader live a week to explain my process. I'm not gonna do it here, and I do it on Twitter a lot. So follow me on Twitter if you want. But the point is, is that I uh I I knew at that point that my only competition was me. So I had to be consistent and then I had to repeat it, and then I needed to learn how to scale it. So whatever your situation is, whatever your trading process or trading methodology is, make sure that it is consistent. Make sure it is repeatable and make sure that you can scale it up, scale it down, and have a mechanism to help you decide when not to trade. Go big, go small, or not at all, as Anthony Cardelli says.
SPEAKER_00So that was great. And by the way, we'll we'll put if anyone's listening to this, we'll put Paxy's contact details on there, his Twitter account, etc., on the on the notes for the show. You'll see them if you just click on that. Um, but uh, you know, so so what is it uh for you that gets in the way for most people? What were you you you kind of said what got in the way for you, the fear, the worries, the anxieties. Um you know, for for me, this this this this trading is a giant game of poker, it's a huge game of poker. Um, and like in a in a giant game of poker, there can only be really be one winner. Um in in the markets, if you take that in percentage terms, um, you know, there's only a tiny percentage that can ever win, um, you know, by dint of the math. Um what is it that that in your mind separates those who are winning from the rest?
SPEAKER_02Well, um that that that word winning I think is important. I I don't win. I don't win money and I don't um and I don't think in those terms. So I think that the majority of people have their focus on the wrong thing. I, you know, they're they're not treating trading as a business, you know, they're not making business decisions, you know. Uh they're they're treating it like a game of chance, you know, and and and and it's not. So I you know, I changed the terminology in my mind so that I would begin to think in more in in business terms. Like I don't win money and I don't have winning trades. I mean, I say those things colloquially, but I don't have I don't win money and I don't lose money, you know. I I I don't lose money. I spend money, you know, and so like any other business, you have to spend money to make money. And I have a process that I employ that gives me the ability to be able to decide this is a market I am willing to spend some money in because I know that I can really pull it together and make some dough. Or this is a market that that's it's like I said this morning in the ninja show. This is a market that is not worth my money. And so I am not going to trade it. So when I began to think in business terms like that, you know, then what you know, what's my profit potential here on this trade? I'm willing to spend $800 on this four lot in the SP to try to make three or four thousand. Well, that's that's something that's you know worth the expense, right? And then I keep a little bit of a ledger every day to to to keep accounting of of what my expenses are relative to to what my my trading strategy is is telling me that I can make. I'm looking for places to be able to exploit my unrealized gains, you know. So I think I think the there's there's so now let's unpack some of that. Most traders are gonna add to losses, you know. Most traders, I you know, I I'm gonna dollar cost average an investment, right? Gold to me is an investment. I swing trade it too, but you know, I want to own gold from 33, 34. You know, these are prices that I've talked about publicly for a long time. I want to add to my gold position at $43. If we close above our $4,300, if we close above $4,400, then we're gonna go another $1,000. I said these things publicly a million times, and we did. Then we came back off. So I want to buy more down at 43. Okay, now that's an investment. 4,300. I'm gonna buy more. We just broke 800. All right, I'm gonna buy more at 44, uh 44.5. That's not how I trade. I cannot from my daily trading, or you know, I don't trade every day anymore, but you know, from my consistent trading, I cannot ever, ever, ever add to a loss. I can't ever average in a loss. I can never dollar cost average a trade, an investment, sure, a trade, no. So I don't add to losses, I don't average losses, I add to winners. See, there we go, colloquially. I add to profitable trades. You know, so for an example, if I'm long from if I'm long SP from 66 or 6850, and and we trade up to 6880, I'm gonna take profit on that trade and we go 82 bit. I'm going to add more. I'm gonna protect my real uh I'm gonna protect my my beginning balance of my statement. Now I'm gonna protect my unrealized gains and I'm gonna use my unrealized gains to make more. I'm not gonna buy 6850s and the and have the SP trade to 6840 and buy more, have the SP trade to 6830 and buy more, right? So I think that that many of us that uh that that are going to kind of gamble with our money in that way are gonna wind up making a ton of money, but they're gonna lose money, or you know, and uh eventually they're gonna get run over. That that running freight train is gonna destroy you. People that buy dips and sell rips for a living eventually wind up blowing up, you know. I don't I say this all the time, Stephen. I am not I am not impressed with what somebody makes in a year, five years, or 10 years. It does, and I tweeted about this this week, I got trolled a little bit by it. I I don't care, it's not impressive to me. The only thing that impresses me is and the only true measure of success is what you take with you when you're done trading for active income. I've known way too many traders, and I mean, I'm telling you, I'm not making this up, and you know it too. I mean, I'm talking to our audience. I've known way too many traders worth five, 10, 15, 20 million dollars that have gone completely broke, including me. So, you know, I I know how quick that that happens. You know, yeah, uh somebody dies in your family and something shifts inside of you. You get divorced, yeah. 50 or 60 percent of your net worth goes away, depending on how many kids you have, and something shifts inside of you. Something happens and something shifts inside of you. Fear creeps in, fear creeps in, ego. That's that that's more than trading, though, isn't it?
SPEAKER_00That's a life thing. But that but but but that that is trading. Well, I mean, it it you know it it's really interesting because we can go back to someone like Jesse Livermore, who's considered the greatest trader ever, or one of the greatest traders ever, and he went bankrupt four times in his life and ended up shooting himself at a relatively young age. And it becomes that question well, how can he be the greatest trader ever if he lost money? Well, uh for a time he was a great trader, but it you know, this is where I kind of try and bring the analogy in about sport. Um and and it it's almost like you know, you can be the greatest basketball player ever, but you don't carry on playing basketball till you're into your 60s or 70s, right? Okay, because you're not gonna be the best once you're past maybe your mid early 30s, you know. Everyone has a time. And this then comes back to this idea that actually trading is a performance activity, but we've got to do it when we're really, really good. And and people seem to think it's it's an intellectual activity. And I say, nope, you can make it, you you can systemise it, you can change it. Okay. For a time, there's a period where you can do it brilliantly. So I I know somebody who traded oil, you know, uh a few years ago, got to 32, he's made his millions, he's like, I can't do this anymore. I was brilliant, he said, for 10 years, but I'm burnt out. I'm not gonna I'm gonna step away and do something else. And he he recognises that the way he the type of trading he did was full on, full energy, boom, boom, boom, in and out, huge size every day, in the futures market. He was at his peak there, but he knew when it was time to stop. You know, it's you know, you he recognizes that there's a performance activity element to it. Now he he probably didn't stop, or he probably hasn't stopped investing. He may change into a longer term game, he might systemise his trading, but he's decided to stop trading. And it this almost goes back to the individual in that article, which you know, the um Takashi Katagawa, I think. He he made an absolute fortune very quickly in his early in the early 2000s. Um you know, he became a legend. But I think he stopped trading at a certain point. I mean, he turned I think in seven years he turned $13,000 into over $150 million. And it he he was a freak. Okay, and I don't mean that to be insulting to him. Okay, that the these outliers come across every now and then, okay. Um, you can't try and be that guy. Okay, every now and then someone comes along who for one it's a game to them, and they learn how to play the game and they're brilliant at it and they're full on. And there's right person, right time. Right person, right time, but also, you know, to them it's a game, right? They're not in it to make money. Okay, not that they're gonna turn the money away, but they're in it for the game, and they almost find some unbelievable algorithm and they just hammer it to death. Okay. He got to the point, I think he he was making so much money, but he realized that as you make more and more, the game starts to lose. It said you can't you can't play that game anymore. Once you've got that much, you know, you you the algorithm doesn't work, or maybe the algorithm changes. Um, now I think he still trades, I think, but he mostly invests as far as I know. He invests in property, he invests in stocks. He went and started playing a different game. You know, we can only do that for so much for so long. You know, you you did it on the floor, right place, right time. You can play that game on the floor. That floor game gone, it couldn't work anymore when people weren't on the floor. You could you couldn't play the game in the same way.
SPEAKER_02That's right, 100% right. Right. And then you know, and like uh uh uh he had he had found uh how did you say his how do you say his name? Um don't ask me to say it again. Yeah, I I was it was it was Takashi. Yeah, Takashi he found an edge. He he found an edge that he was able to exploit, yeah, and and and he just kept hammering it, hammering it, hammering it until it didn't work. And then he didn't go search for another edge. He took his money and he was done trading for active income. You know, like I mentioned earlier, the only thing that that that that the only true measure of success is what you take with you when you're done trading for active income. Yeah, you know, and and then you find something else, you know, then you go on to something else. You keep that money, you know. Capital preservation Friday, I talk about every Friday. You preserve and you protect that capital and you move on. You know, you find something else. Now I'm done trading for active income. I have been for the last two years. That doesn't mean I don't trade. I mean, I do trade. There are some, there are some things that I see that are going to be obvious, and that might be worth my money, what might be worth my time. You know, it's it's more, I wouldn't say it's a leisure activity, but it's more of a, you know, I don't yeah, maybe a game, you know. I I I don't like using those terms because I want people to think in in I want people to think of their trading as a business. But yeah, you know, it and that's kind of what it is to me at this point, you know, is is just something like that. And so I I enjoy trading. I I see myself trading to some extent or another, you know, as long as I can think. Uh, but I don't trade every day, I don't trade every week, you know, it's it's uh I am I am in capital preservation mode. I'm looking for other ways to build on um, you know, to build, you know, starting a prop group, you know, bringing that into the retail space and and I'm working on that and other things to to help traders find their edge, exploit their edge, and build upon that, and to be able to keep an eye out for people when things change. You know, somebody dies in your life, things change. Um, you know, the uh uh the business uh the business changes, you know, uh all there's all kinds of change that are gonna happen. And when that does, you've got to preserve and protect that capital. And if you're out blowing money on supercars, and and you're blowing money on, you know, expensive vacations and things that don't matter, well, you know, you're going to be left wanting. You're going to be left with things that are worth less, you know, and and and and and your edge is gone, and now you're stuck with things, you know, that you really can't get out of, especially in in the event that the market turns down. Pretty soon, you know, there's an old there's an old uh trader saying, get out when you can, not when you have to, because pretty soon everybody's gonna have to.
SPEAKER_00We will return to the podcast shortly. Just a quick reminder that we are sponsored by the Brilliant Society of Technical Analysts, the STA, the world's leading uh educational body for the advancement of technical analysis education. And we are delighted to be able to offer a discount on their brilliant home study course. You can go to their website technicalanalysts.com to learn more about that, and go to our website alpha-mind.net to learn more about the uh discount available on that. Before we go back to the podcast, also if you are interested in any of the services we offer AlphaMind, um whether it's for your business, your team, or yourself, do reach out to us. Info at alpha-mind.net, and we'd be delighted to start a conversation with you. Now back to the podcast. It's it's interesting because we brought up so many elements here. There's there's a game element and there's a business element as well. Um, I I you know I I work with some phenomenal retail traders, um, and I've had quite a lot of retail traders reach out to me over the years. Um, most of my clients are in the institutional world, but I I do work with some. And uh, you know, I find them incredible, and they they defy that logic that you can't make money from retail trading. But where I also come across a few where I'm you know, I'm I'm like, okay, you've got to build a business, you've got to look at it as a business, okay, and you've got to build capability and you've got to find an edge, and then you've got to learn how to work that edge and how to bring yourself to it. And then, of course, there's the environmental stuff. If you start making a load of money, okay, you have to keep it in the business, you have to build that wealth. Once you build the wealth, do it like you've got a business. You know, if you had a business and it started making a lot of money and you start making some surplus money, you know, put it aside and maybe you could buy that car with it, maybe you could buy the house with it.
SPEAKER_03Yeah.
SPEAKER_00But you know, don't put it aside yet until you've got enough to have a couple of years with you know, tough years, because the you know, the drawdown will happen, the context of the market will change. Um, your sister's method may not work forever, right? And you're gonna have to evolve it and adapt it. Um, for a lot of people they come into this, you know, looking for easy money. And I think that was the element of uh of that post. And I if you go back to the end of that post, you know, he he you know, he said the path is hard, it should be hard. Um you know, and that's what keeps the lazy and and indisciplined, undisciplined out. But he said, Don't confuse hard with impossible.
SPEAKER_02You know, that isn't that stop there for a second. Isn't that an interesting concept? This is the hardest thing that any of us will ever do. You know, I mean, this is so difficult, and it's so hard, and the grind to get there is so difficult. You know, it's a grind, a grind and grind, and it feels like you're spinning your wheels and two or three years, you're breaking even, not making any money. But then it all comes together and money comes rushing in, you know, and then it does it's the it's the hardest, easy money you'll ever make. But you, you know, you catch something and you, you know, you've got a you've got one of the best trades that you've ever had in your life, and in, you know, and and and that turns into a a career-making trade, and that turns into a life-changing, you know, event or you know, a sequence sequence of events that maybe start off with one trade and last for a year, you know, and your entire life is changed. But you had to grind your ass off in order to get there. You had to work yourself to the bone and confront fears that you didn't even know you had, and to confront insecurities and issues that you thought you were past, and all of a sudden they're kicking you in the teeth again. That's difficult to do, but when you can get past it and it all comes together, there is nothing sweeter in the entire world than when that happens. Uh, I of course, you know, in in the business world, there isn't anything sweet, you know, love and kids and you know, things like that are sweeter. But you know, in the business world, when that all comes together and things work, oh my goodness, what a great feeling. You got the Midas touch, you feel like you can do no wrong, and you hammer, hammer, hammer, hammer, and the money comes flying in. That's unbelievable. I love when that happens.
SPEAKER_00Well one of the things that uh I'm you know, I'm not involved in, um, but I do come across it sometimes, and I I come across people trying to trying to play it um is the idea of these prop firms. And and I know there's some people who succeed, you know. Again, it's it's it's a small word, but I I often think these are gamers more than traders. Um they learn how to understand the game. Um and you know, some of them become phenomenally successful, but then you know, it there's always a small peak, small number of people that are gonna succeed in it.
SPEAKER_02Even smaller than I think will succeed trading their own accounts, yeah.
SPEAKER_00Yeah. But tell me your your view on these firms, because I think you're a bit more involved with them.
SPEAKER_02Well, I I'm not. Um, yeah, I think that the majority of them are very dangerous to to to people that are are are chasing that dream. Yeah, you know, they uh they're the the few people that do make a lot of money with it then are paid an unbelievably amount, an unbelievable unbelievable amount of money to hype them. You know, I've gotten, I'm sure you have too, I've gotten DM after DM after DM from people who have who have racked up six figures in credit card debt trying to trying to chase this dream. You know, or I see I see these young people that are trading these these funding companies slash prop firms that have made a bunch of money and you know, and they're buying supercars with it, you know, when who knows what kind of change is gonna happen, or you know, when they make, you know, I I've met a few people that have made you know a few million with these companies, but they get banned, you know, and they they're they're not allowed to trade it anymore. So things change. Now, what are you gonna do? Right? Your edge is gone. You figured out how to exploit the rules. Though now, now you got to trade your own dough, and it's a different game, it's a this different business. So I think I think that they do more harm uh than good. Now, also a lot of these firms, they they they make 10, 20, 30 million a month. They're not making that kind of money a month because they're here to help you. You know, they're making that money because people, the rules are stringent and people reset. So I think as a trading community, I think it it it's there's there's good, you know, it it has certainly pulled millions of people's eyes towards futures trading that otherwise would not have been there. And I think in a world where, you know, really good paying jobs are less and less than because of the change in AI, I think it's given people some hope into, you know, being able to do things and you know, at a different level. And maybe they can start to envision themselves as successful traders. But I think that they that they hurt more than they've helped. There, there are a bunch of firms that have melded, you know, the old-fashioned idea of prop with this funding company mechanism. And and I think that that is where you know the sweet spot lay. Um, you know, and and there there are a few of those companies that you can go join and do their their, you know, you can pay for the, you know, the the free, you know, or the whatever, you know, how it works. You know, you pay for the combine or you pay for the tryout, you pass it, you put on a live sim account, and and you do really well. And they put you on live money. They actually open up an account with your name on it. And those firms are the ones that you need to seek out, you know, the the firms, you know, I yeah, you know, these major firms, I don't need to mention their names, you guys all know who they are, you know, they advertise, they don't advertise, but on they have they have to disclose it on their site, on their website, there's 300,000 people trading on this live sim, with maybe 30 or 40 trading actual money. Yeah, you know, that's a scam and that hurts people. So, you know, I think it, I think it, you know, if if people are doing these things in order to to segue into trading your own account, I think it's a you know, it's it might be a worthy endeavor, but you also have to realize that that trading, you know, on an you know, an actual count, a live account in the live market is different than trading on the sim account. You're gonna get filled on these sim accounts and things that you will never get filled on, you know, on live money. And, you know, and the rules are very stringent, you know. Uh you're paid to you're paid to scalp. I mean, it's just it's just a different, it's very, very different. So I think you're right to say that there it attracts a lot of gamers, you know. But if they can segue into more of a business-like model, then they can they can they can make money trading their own accounts. It's difficult. There, but there again, too, Stephen, you know, there this is the the the most difficult, easy money that we'll ever make. You know, if you can grind your way out, you can continue to push and push and push, then you know, you you might be among the three percent of people that actually make enough money to become free in this business. 90% of us are gonna fail, the rest break even.
SPEAKER_00Yeah, I I I remember reading somewhere and it was something. And it was quite difficult to define. But it was it was along the lines of and it this was day traders, it was a lot very large, very large research piece. I think about one percent of day traders made money. About an eighth of those made what would be called life-changing money, yeah. Yeah, yeah. Um, it wasn't one percent every year, it might be something like 15 to 20 percent every year made money, but then when you went down to year after year after year, those who could sustainably make money over years, it was very small percentage.
SPEAKER_02You know, you can you can make you can make millions in this business, but if you don't reset and you don't build this like a business, you know, and you start gambling with or you uh hold on, let me let me you know let me tweet this morning about capital preservation Friday. If you don't protect the beginning balance, you're gonna blow it. So, you know, like we were talking about the uh that guy earlier, you know, you you make the money and you preserve and protect it, stop trading for active income and change your life. Otherwise, you sit you sit in this business too long, you're gonna wind up giving it back. You know, uh uh a black swan event is gonna happen, uh, you know, you're gonna be caught on the wrong side of it. Uh things like that happen. You know, the world will see another great recession. The dollar will lose reserve currency status. And what happens to the market's then and you're on the wrong side of it, what happens? You know, things change, the edge change, your life changes, and and you now all of a sudden you're pissing away the money that you you you work so hard to earn. Take the if you're blessed enough to to do well, you know, you find that edge, you exploit your edge, you're able to make it work, preserve and protect that money and move on.
SPEAKER_00Yeah. So what what what are you gonna do? You're talking about setting a prop firm up.
SPEAKER_02I want to start. I've owned uh my own prop before, and I backed more traders than I can remember. Uh the vast majority of those guys that make money, but the ones who did, uh, you know, made enough to be able to cover the ones who didn't.
SPEAKER_01Yeah.
SPEAKER_02So um uh, you know, I've had the idea to to to meld the two, you know, to bring together um uh to bring real prop trading into the retail space and to to build something along those lines. So and in you know, in the beginning, uh I would want traders to trade my process. Here, here another point too is that if my if my trading method that I've developed is good enough, then you know, and is profitable enough in the right circumstances, you know, the right times, why wouldn't I back my uh people to to trade it, right? I mean, why not why not? Um I've got health issues that 30 years in this business are well, 28 years in this business are gonna cause, including including electrical heart disease with AFib, and uh I've got a heart implant and and I'm I'm um staring cancer in the face at this point too. So I need to take care of myself and I need to preserve and protect the capital that I've earned in the second phase of my career on the screens. And I want to be able to help people exploit the edge that I have found until that edge no longer works, and you know, bring some bring retail prop, bring real prop into the retail space and help some of those retail traders turn into independent traders.
SPEAKER_00Yeah, yeah. So what do you I mean, let's just say you've you've got a system, you've got a method. I mean, not you, but people in general. Where do most people go wrong then? In your opinion, or what are the various factors that that they go wrong?
SPEAKER_02Well, you know, I think uh um uh uh let's you know talk about people that like to catch falling knives, you know, or or uh uh people that pick bottoms and pick tops for for I I know a lot of people that have to that have made, especially since quantitative easing in from 2009. So from uh stimulus from 2009 all the way well until now. Um the market has been held up by money creation, right? So every dip you buy, you make a lot of money. But if you if you uh you know what dip are you gonna buy last year in the SP, you're gonna get long you we went from 61.66 to 48.34 in a couple of months. You're gonna buy um you're gonna buy 61 evens, 59 evens, 58 evens, 55 evens, you know. You you buy, yeah. I know a lot of people that lost a ton of money doing that. Um in 2000, March of 2000, and this is an you know, this might to some of you younger traders might seem like ancient history, but you need to know where we've been in order to know where you're gonna go. March of 2000, the NASDAQ set its all-time high at 4882. By um October of 2002, the Nasdaq was trading at 785, made a low of 785. That's a difference of 87%. That was during the tech bubble bursting, the tech revolution, beginning in 1998, ran up and ran up and ran up, and a lot of really rich people thought, oh my goodness, this is great. They're making fortunes, making fortunes. It's never gonna end, it's never gonna end, and it ended. And when it ended, the NASDAQ fell apart. It broke 40%, that doubled, it broke 80%, and then it sat there for took 16 years, by the way, 16 years to achieve that price again and trillions and stimulus. It was not until 2000 or uh, well, 17 years, it wasn't until 2017 that we saw 4882 again. So if you don't think that that can happen again in the markets, I can guarantee you that it does. And a lot of people are going to wind up blowing themselves up doing that. A lot of people have made a lot of money fading markets, but they inevitably give it up down the road if they overstay their welcome. If you overstay your welcome, you will give it back. You know, um uh if if you overstay your welcome, you will wind up giving it back in the example that I used from 2000 um to 2002, or to you know, 2008 to 2009, or or 2018, the fourth quarter of 2018. The SP went from 2944 to 2314 in in two months, October, November, December. You know, that was 2022. We broke 27 from 4808 to 3502. You know, a lot of people got destroyed doing that, right? So just don't don't don't walk up to the table for one more hand. Don't walk up to the table for one more roll of the dice. Treat this as a business. Preserve your capital, protect your capital, grow your capital, and when something shifts, have enough character, enough self-possession, enough self-honesty, and enough self-confidence to say enough's enough.
SPEAKER_00No, there's the challenge, that last bit. Getting sucked, getting sucked into the game. That's what the market does to you. That's ultimately what costs so much, so many people their money.
SPEAKER_02Almost everybody. That you know, like earlier when I was talking about working out, uh, you know, working out, taking care of my my my I guess I didn't, oh uh, but I was headed there. You know, taking care of your spirit, taking care of your mind, taking care of your body, you know, um, uh, those things are very important, especially from a like an athletic or a performance standpoint that you were mentioning earlier. We have to take care of our mind, our body, and our spirits, you know, so that we are self-possessed, self-confident, self-assured. And that, you know, when when things feel a little tough, they feel, you know, your uh your heart's beating a little faster, your breathing becomes a little bit more shallow. You recognize that and you take your hand off the mouse and walk away. Um, you know, you know your tells, you start to, you know, you start to feel the dopamine hits and the adrenaline hits. Sometimes that dopamine and the adrenaline can help you uh you uh take a an existing profitable trade and truly exploit it. Right time, right place, right circumstances, right process. But quite often those dopamine hits and the adrenaline can lead to the opposite reaction. And you have to have enough self-possession, self-confidence, self-awareness to know when that is happening and how to protect yourself from it. Most of us don't do that. Most of us, most of us think that trading is about the charts and your technicals, and it's just so much more, at least for independent traders, it's so much more than that.
SPEAKER_00Do you think your spiritual training helped you?
SPEAKER_02No, 100%, yes.
SPEAKER_00Truly. Yes. I mean, it it there is an element to this job where it's addictive. It is addictive, we know that. And that's what gets a lot of people into trouble. And I know from you know, not my own experiences, but from people I know and reading about it that you know the the these groups like Alcoholics Anonymous or Narcotics Anonymous, you know, people learn to kind of humble themselves to the fact that they've always got an addiction. And it's it follows the same sort of uh path as religions with humbling yourself in the face of something that's much bigger than you, and um and and staying humble to that. And I do actually meet a lot of people who are very religious, who are very successful in trading, from all religions, all faiths, because because that there's something about it that grounds them that they bring that same spiritual element to like, okay, you know, it's not the biggest thing in the world, there's something bigger than me. You know, I'm never gonna beat the market, the market is bigger than me, don't try and take it on. Um, you know, that okay, I had a bad day, I lost money, it's not the end of the world. Okay, there's something bigger than me. And it's almost like and they then they practice rituals, and you know, it's it seems to ground them in a way. And it when you lose that, when you lose that kind of you you start to lose your sense of self.
SPEAKER_02When we lose our appetites, yeah, you know, and and it becomes you know, it becomes like an alcoholic or or or a sex addict or porn addict or food addict or whatever kind of drug addict or whatever. Yeah, it if I'm living in my ego, Stephen, if I'm if I'm trading in my ego, I I'm um I'm gonna I'm gonna I'm gonna I'm gonna wind up broke. If I'm self-confident, there's a difference between ego and self-confident. If I'm self-confident, I know who I am, I know, I know what my tells are, I know what I need to do, I know how to protect myself. If I'm living in my appetites, when I'm hungry, I eat too much. When I'm thirsty, I drink too much. I can't have just one martini, I've got to have 14 of them. Yeah, you know, if if I'm that sort of a person living in my appetites, I will never make money. Oh, I know I'll make money, but I will never keep it. Yeah, anybody can make money trading futures. It only takes a click of a mouse. Very, very few of us, as we've outlined earlier, can keep it. And because they they neglect it, now I've got, you know, I'm Catholic, so we're big, and I'm a traditional Catholic. I go to Latin Mass, I pray the rosary every day. I pray the rosary on Twitter. Um, you know, I have uh those rituals are very important to me. The way that I live my life, very important to me. You know, and I didn't have that until I went to seminary and I had that structure in my life. I keep um I keep all kinds of strange little you know rituals. I you when I when I have a really good trading day, you know, something as silly as this. When I have a really good trading day, I take off those clothes, I fold them up, I put them away, and I wear them the next day. Underwear, socks, pants, shirt, shoes. I'll wear information. I'll wear this. I know I'll wear the same stuff until that streak ends.
SPEAKER_00Now, you know, I wouldn't want to be expanded next year at that point.
SPEAKER_02No, no, nobody does. But you know, I mean it's a it's a silly thing, right? But it's something I do. Uh uh uh the way I I wake up at the same time every morning and I go through the same rituals and same routines before uh on on trading days, you know. Uh uh, and and actually I don't anymore. I that would be disingenuous to say that I do, but when I was trading for active income, I woke up at 4 45. I did the same things every single morning, every day, every morning. And I went, I go to bed at the same time every night, you know, and I eat whole healthy foods. I I read, you know, I I I listen to to podcasts that are gonna feed me. I don't listen to podcasts. I didn't I didn't watch the uh the State of the Union speech in America. Uh Trump spoke of the President Trump spoke of the city. I didn't watch that because I knew it would just aggravate me. I don't read, I don't read too many people's feeds on Twitter because it's just gonna aggravate me. Yeah, I need to I need to be I need to be ritualistic about how I protect myself, how I view the world, and how I can act and react according to it. You know, the markets are busy, bigger than me, God is bigger than me. I, you know, uh, but I have um because I have a relationship with a higher power, it helps me stay self-confident. You know, because I know that the markets are a higher power, it helps me not to try to control it anymore. I cannot control the market. You know, I'm not a market maker, I'm a market taker. That's it. These little things are very, very important to me. And I didn't mean to, you were you were on a roll, I didn't mean to interrupt that, but that's very, very true.
SPEAKER_00No, but that that's exactly the point. That's what we were trying to get. That you know, it is at that that kind of mindset that we see in some of the most successful traders that people don't realize how much it's that mindset that matters.
SPEAKER_02Yeah, you know, if if um, you know, like uh uh this is it just came to mind. Uh Mickey Hoffman was is like a father to me. Mickey, Mickey is an old Jewish guy that one of the toughest dudes I know. He's 85 now, he's still alive. When when when I was trying to learn how to trade on the screens, Mickey said, You got to learn how to be at work at home. You know, I trade from home, right? You gotta learn how to be at work from home.
SPEAKER_01Yeah.
SPEAKER_02Well what do you mean, Mick? Well, you know, where's your where where do you keep your computer? Well, it's in the basement. This is at the house we were living in after I lost all my money with my dad. Um, all right. Well, get up, take a shower, go through, you know, establish a routine in the morning, take a shower and get dressed, get dressed in nice clothes and go um go go go to the Starbucks near the train station or go to uh um um uh I don't like Starbucks, so I'd go to Dunkin' Donuts, I'd get a cup of coffee, and I would read the Financial Times, read the journal, and then at the train station, and then get in the car, come home. And when I walked through the door of my house, I wasn't at home anymore. I was at work. You know, I had to do that um for I don't know, a few months before I realized that. And nobody bothered me. If my wife and kids were home and I came walking through that door, it wasn't, hey dad, you know, hi honey. You know, it was, you know, dad's going downstairs, he's at work now. Let's, you know, let's and I shut that door and that's it. I still dress nice, you know. I wake up in the morning and if I have the intention to trade, I I the first thing I do is I make my bed. If my wife's still in it, I make my side of it. Um second thing I do is I hit my knees and and I and I give permission to to God to use me for that day, but just to give me the the grace uh to be able to see how he does use me in people's lives. I don't I've never prayed for money, you know. I prayed for the Holy Spirit to illuminate my path. I've never prayed for success. I've asked for the vision to be successful, I've asked for the strength to be successful, I've asked for the the clarity to be able to face the things that I need to face, you know, to be successful. And and and the Holy Spirit is God has granted me those those prayers. And I've moved through some very, very difficult times because I was able to focus on those things. So, and then you know, breathing exercises. I did, I did Wim Hop breathing for a long time, and then just simple box breathing, and you know, that that's very, very important to me. And and and and that's all, you know, now I'm up and stretching, little yoga, and you know, and I'm up now. Um I again I don't do this anymore, but I did for years up until like two years ago. I'm up now um at like an hour, you know, an hour and 15 minutes doing all of these things in in and and that's before I shower, it's before I get coffee, it's before I look at the markets, it's before I check positions. Those are things that I would do in this little like little sitting room that we have off our bedroom suite, you know?
SPEAKER_01Yeah, yeah.
SPEAKER_00That's I mean that see that's brilliant, but that's what we're talking about. It's a lot sounded like the Serenity Player. Right. Yes, yeah. And and they these are the bits that people forget. It's you know, they they think this job is about the price action in the markets, the method they're gonna use, but actually the the person doing all that is them. The person placing the trades is them. Okay, the person holding back and deciding, okay, you know, the person who's burnt out and is still placing trades, even when they're losing money and they've lost sight of what the market is doing and they're doubling down, it's them, it's no one else.
unknownRight.
SPEAKER_02Until people realize that radical responsibility, yeah, radical responsibility. It's I I'm not a victim of the market. I'm not a victim. They're hunting my stops. Yeah, you know, they know where my stops are. Maybe they do, maybe they don't. Who cares? The uh last week with uh when the metals shut down this week, when when the metals and the anti gas shut down, you know, on uh it was uh Wednesday, you know, the CME went down and there was problems with it. Oh my goodness, it was the conspiracy theory after conspiracy theory after conspiracy, and maybe they're true, maybe they're not. I don't care. I don't care. You know, um, I'm not the victim of the CME going down. I'm not the victim of of uh uh you know of a Trump tape bomb. You know, I'm not a victim of anything. You know, I have the same chance of making money as everybody else does, a 50 per 50 chance of every trade that I make. Now, if I take a thousand trades, my chances are cut to zero. Yeah, but they take two or three well thought out, well-executed trades, I can change those odds into my favor.
SPEAKER_00Yeah, look the stop hunters are out there, they're part of the terrain. Sure. Okay, you get attacked, you walk through a jungle and you get attacked by a snake, you're not gonna go around and go plus start blaming the snake. That's right, right. Exactly. Okay, there's there's there's people out there whose strategies is to hunt for stops, they're gonna do what they're gonna do. You can't blame them, you just got caught by one of them. That's right. You got caught by one of those snakes, and make maybe maybe a tiger would be a better analogy um than a snake, but whatever. It's like people go out there and they want to absolve themselves of any responsibility. No, when you lose, you lose. Like when you win and you're the greatest in the world, okay. When you lose, okay, you can't go around and blame them. Don't don't claim you're the greatest in the world when you'll make money. It's your job. Just trade, just do it. That's a hundred percent. Accept the wins, accept the losses, treat them just the same. If you can, then you're on the right path.
SPEAKER_02You know, you that's that's a that's a great point. If you make a bunch of money, you're not the next Tudor Jones. If you lose about the the a bunch of money, you are not the biggest asshole in the world. You're just a trader that comes with the terrain. You're gonna have good days, you're gonna have bad days. Learn how to maximize the good days and minimize the bad days, and you're gonna be okay.
SPEAKER_00And if you if you can take it like that, you're gonna start having a lot more good days than bad days eventually. 100% correct. You know, it it is, I mean, it is an amazing game, this game, but it is so completely in the mind and between the ears.
SPEAKER_02All uh it it it it requires all of you, and it requires radical responsibility, it requires a level of self-awareness and self-possession that most people will never achieve.
SPEAKER_00No, no, and then you know, I think you've got to survive long enough to sort of get to that point. Yes, you do, and and then you've got to sort of remain there because you're gonna forget it, even when you get it right, you're gonna have periods where you go backwards. No, that doesn't happen.
SPEAKER_02Yes, that happens, and it's difficult to do, but you know, and you feel like a rookie again.
SPEAKER_00But hey, you know, like you said, it's it's it's possibly the hardest, easy money you can ever make. Ever.
SPEAKER_02Yeah, but it's the best this the this is the best business in the world because I I I it for so many reasons, but it requires me to be the best possible version of myself at every turn. And if I'm not, then I have to have a uh um the self-possession and self-awareness to be able to say, you know, I don't have it right now. I gotta walk away. Even if that right now is a month, two months, six months a year. I gotta walk away. I was told to retire by Mickey Hoffman. Oh, really? Yeah, Mickey told me to retire in 2002 when I was going through my separation. You've made enough money, you've got more money than you can spend as long as you live the right way. Just walk away. I should have. I I'm glad I didn't because I'm you know, I I I am uh I could I couldn't be more fulfilled and more happy in my life at this point in my life. Yeah, you know, but but he was right. I was going through divorce. I was, you know, my wife and I, my ex-wife and I were separating, we were getting divorced, and and you know, and that changed something in me. Uh anyway.
SPEAKER_00Um that that's I mean, but that that's important, what's important. It's like as as we always say, you are the one doing the trading. Okay, you are the person doing it. You are whatever trade is made, whether you won or lose, you pulled the trigger on it, you decided to increase, you decided to not take the trade, you decided to execute, to exit, whatever. It can only be you, okay. And you need to be you need to be at your best. Like I said, it's a performance game. Okay, like gaming or sport. If you're not at your best when you get out there, even if you're a great player, you're gonna get beaten by someone who who who's not as skilled as you okay. And if you're going through a life-changing event like you mentioned, you're not gonna be at your best.
SPEAKER_03No.
SPEAKER_00There's just nowhere, but we we did this is the bit where you you you realize that you have to be at your best. And I know some incredible traders who have stepped away at difficult moments because they realized, you know, they were smart enough to realize I'm I'm not gonna be at my best for this game.
SPEAKER_02Yeah, that's what I'm doing. That's exactly where I am now.
SPEAKER_00Yeah. Yeah. So and that's it. I mean, um, you know, look, I don't trade anymore. I still a little bit like you, I do what I call my fun trades. I haven't traded for years because I'm not I'm not a trader anymore, I'm a coach. Okay. Um I I when I traded, I had to be fully into it. The moment I stopped being fully into it, then you know I I'm a partial trader. I'm more like an investor almost. Just step in, step out.
SPEAKER_02Yeah, it's important.
SPEAKER_00Yeah.
SPEAKER_02It's it that and Stephen, that takes a level of self-awareness that most people will never get to. Cardelli called me after after I got out of the hospital in uh 2024. I wound up with May of 24, I wound up with AFib that caused my heart to fail. Yes. So my my my heart rate went to to 15 beats a minute for like in 45 minutes or an hour. And and I was at intensive care for the next four days, three days. I tweeted from from the intensive care unit that night to tell everybody. So Cradelli had called me. Anthony had had a heart attack when he was, I think, 36, 37. I remember that. I remember that. And Anthony had called me and said, you know, haven't you made enough money? Aren't you done? You know, you're the this uh nobody, Matt, nobody understands what 26 years at the time, I think 26 years in this business has done to you or done to us, you know. Yeah, you know, and the all the ups and downs and the rebuilding the last 12 years and all of that, you know, haven't you done enough? Why don't you step away? You know, and well, what am I gonna do? You know, it's all I've ever done. I did. I stepped away. I mean, I still, like you said, I still trade. I still trade frequently, but not I'm I you know, I trade small. If I do trade, I trade small and I, you know, and I trade with the traders in my group just to do it. But that's it. Active income is over, you know. I I I'm I I've made it, I've made enough. Now I've got another health issue I need to tackle, and you know, that's it. And I need to, I need to be, you know, I talk about being confident, carefree, fearless, and focused. And if I don't go, if I didn't go through my morning routine, if I don't go through my morning routine, uh then I can't I cannot determine my level of confidence, carefree, fearless, and focused or CCFF. I cannot determine if I am confident, carefree, fearless, and focused. If I am those things, then I can trade. If I'm not those things, I can't. You know, my my level of my my confidence, carefree, fearless, and focus now has shifted to other things outside of you know trading and making money that way. So I still am confident, carefree, fearless, and focused. I'm still on a path of being and becoming. I am always trying to be the best possible version myself, but I've got different goals.
SPEAKER_00Yeah, yeah. Listen, I I like I say, I I I I do like these performance analogies. Um, I always say investing is different, investing is long-term, investing is stuff, but trading, you know, it is intense. Um it is it requires a lot of you, and you can only have that for so long. You can only have that for so much time.
SPEAKER_02Before something gives. Yeah, and for me it was my heart.
SPEAKER_00Yeah, yeah. Listen, you know, Pat, this has been incredible having you on. Um, as you've known, I mentioned at the beginning, you know, we're coming close to the end. We're getting close to the end of the Half Mine podcast. We've done over 150 episodes. We've got maybe one or two left in us. Um we wanted to get you back on because you know, you were so great for you know, our audience loved you. We had a lot of love for you first time around. Um, and you know, we put it across two episodes, and you were very giving in that story. And again, you've done it. Once again, you've been fantastic. Um so I I can only thank you so much um for being a guest today. Do you want to give people one last reminder of where they can find you and follow you?
SPEAKER_02Sure, you can find me on Twitter. I'm you know, Pax Peace and Latin. So PAX Trader777. Um, and then any everything flows from there. I do I do uh uh a show on Sunday night uh uh US time at uh um five o'clock central, six o'clock eastern time on Ninja Trader Live on YouTube, where we prepare for the week. And then I do one on Friday mornings called Capital Preservation Friday at 8:30, um 8:30. I'm on central time. I always have to think of what time it is. 7:30 Eastern, eight uh 7:30 central, 8 30 eastern, where I, you know, where I talk about capital preservation Friday and and then I you know I trade a little bit on the open to try to showcase some uh some spread trading. But you know, outside of that, you know, I I'm I'm at PaxTrader777. You can find me on YouTube Sunday nights and Friday mornings uh at Ninja Trader Live.
SPEAKER_00Fantastic. And we'll we'll put those links again, like we say, those will be on the notes uh for this episode. Um, Max, it's been brilliant. It really has been. Um thank you so much.
SPEAKER_02Thank you, Stephen. Thank you, Stephen, and thank you for the podcasts that you and Mark have done and and everything that you've put out there. You know, there's like I said earlier, there aren't too many people that I actively read and pay attention to, but I do you, and I appreciate you very much, and thank you for that. And your book, by the way, is phenomenal. I I recommend it to everybody that I talk to.
SPEAKER_00Okay, thank you very much. Thank you. Well, we hope you enjoyed that. Um, we loved having Max back on the episode. We loved having you listening to Max back on the episode, and uh remember there are over 150 episodes of uh of this stuff out there in the past for you to check uh with some great guests, um, some legends of the market, and um thank you once again. Thank you all. Uh thank you once again for tuning into the Elfman Podcast. It's uh it's been our pleasure to talk to you and to share some of our uh our own thoughts and reflections uh with you today. Uh thanks again to our podcast partner and sponsor, the Society of Technical Analysts, the FTA. You can check them out on their website, technicalanalysts.com, where you can also find out more about their brilliant home study course. And do remember if you are interested about that, you can obtain a discount by going to our website and using a discount code. Our website is alpha-mind.net. And if you are interested, either for yourselves or your business, in any of the services that we offer at AlphaMind, um, be them personal development, coaching, education services, either for you or for the business you're part of, do feel free to uh to reach out to us. Email us at info alpha mind.net.
