The Michael Martin Show
By Michael Martin
The Michael Martin ShowJan 22, 2021
Your trading edge is embedded in your style
How you trade becomes your style, and your style is uniquely yours.
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Be careful what you say to yourself, you get more of it
If all you do is complain about what's not working, you get more of 'what's not working.'
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Managing risk comes down to dealing with uncertainty
Managing risk comes down to dealing with uncertainty.
The best you can do is put in your protective stops.
The real random part is how much upside will the market give you?
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Pedigree is more marketing than a predictor of success
I don't know of a single factor or variable in your life that will have more of an impact on your long-term success in trading than keeping your losses small.
Pedigree won't mean much if you can't enter your protective stops and keep losses small.
Deep Thoughts was written by Jack Handey, not Al Franken. I misspoke at the beginning of the episode.
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Why trading without stops is gambling
Trading is about expected values.
The determining factor in establishing those values is the placement of your stops - your stops to enter trades, exit losers, and to exit winners.
If you wing any part of these, the expected value of your trading goes out the window.
At that point, you are putting your whole enterprise up for a gamble.
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Set a goal based upon a process
Forget setting a goal based upon achieving a certain rate of return.
Set a goal on the process that you would need to execute each day to get the return.
You're powerless over the result (the RoR), but you can control the process.
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The one thing we all have in common
The one thing we all have in common that everyone can relate to.
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The worst pain I've ever been in
Trading losses hurt for a variety of reasons. They are all painful.
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My YouTube interview with Alex
See the embedded video at MartinKronicle.
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Invite discomfort and uncertainty for the most growth
If you're not uncomfortable, you're probably not growing.
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My take on the marathon versus the sprint
Although you might live for the sprint, you have to have a marathoners mentality.
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Don't fight the urge to clear your head
Trying to bull your way through choppy markets only brings deeper drawdowns.
It's better to step away for the day and clear your head.
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You didn't miss the trade if it wasn't your setup
With so many failed breakouts in this environment, it's not surprising that many traders are chasing trades that they missed.
It's the perfect emotional set-up for losing more money.
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One way to avoid missing a runaway market
The reality is that you are going to miss some trades.
Surprise announcements are obviously hard to anticipate.
However, there are trading tactics that you can deploy to have your orders ready in advance.
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Review your goals and behavior every day
Here's what I do to keep my goals front and center.
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It's a good time to re-evaluate your goals
It's the end of the first half of 2021, and the beginning of Q3 and 2H.
See what you can do behavior-wise to hit your goals more effectively and efficiently.
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The markets will evolve and you have to too
Strategies won't become ineffective overnight, but they will need some tweaking over time.
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How the markets push your buttons
The markets will change in a way you don't want them to at a time that is very inconvenient to you.
If you have a character defect, they will amplify it.
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Where to find the solution to what's not working
Many times when something's not working, folks look for external resources to fill in the holes.
This is true for most traders.
The best ones know that the majority of the time, the answer to what's not working is already inside them.
IMHO, it's about attaining more insight to who you are and your "why" rather than learning a new trading tactic.
Click here to get your free copy of The Inner Voice of Trading audiobook.
Create a vision of yourself then become it
If you can't see yourself becoming more successful, it's not going to happen randomly.
You have to envision it.
Set goals and then act on them immediately.
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Having peace with yourself is a choice you can make
It's all about your mindset and how you interpret the environment in accordance with your goals.
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Do your feelings change based upon your performance?
You might find that when the markets go down, you get frustrated or depressed.
It may also happen even though you're smart enough to sit on your hands when the tape is heavy.
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How to know if you're growing or not
When, during your day, do you feel uncomfortable?
Albeit temporary, setting and achieving goals will leave emotional stretch marks.
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If you feel the need to lash out at someone, do something kind instead
I don't believe in canceling people. I believe in redemption.
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Putting awareness and mindfulness together for personal growth
I think mindfulness and awareness are two different but related things.
Here's one way to differentiate between the two so that you can put both to work for you.
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The things that aren't being said in your trading interview
It's not just about performance or what your trading potential might be.
You have to fit in culturally with what the desk already has.
[We don't hire traders nor allocate FYI.]
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Why and how reading can help you improve
Take a break from your charts and read The Economist, for example.
When you can develop a thesis where the fundamentals and technicals align, you'll find yourself in a good place.
Not all fundamentals are "funny-mentals" - the latter of which is often misused or taken out of context.
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Expectation v. Accuracy and dealing with imperfect information
A great deal of trader frustration comes from the need to be right or correct.
That's a tall order since we're all dealing with imperfect information at best.
Conjugating your emotional makeup with the expected value of your trading set-up(s) is a better way to evolve.
Click here to get your free copy of The Inner Voice of Trading audiobook.
Managing risk and knowing what makes you tick
When you're managing risk, if you don't know who you are, it does't matter what you know.
Almost immediately, your psychology and emotions will take over.
Click here to get your free copy of The Inner Voice of Trading audiobook.
Why most indicators are useless
In this episode, I answer a reader question about technical indicators and chart overlays.
I referred to these as 'emotional band-aids' in my book.
In this episode, I speak about studying the data around an inverse or reverse head & shoulders pattern as an example.
Click here to get your free copy of The Inner Voice of Trading audiobook.
Why it's a good time to speak with prospective clients when markets are skittish
If you are looking to grow your assets, you need to open accounts.
The best relationships are ones where you and your clients understand each other on a deep level.
You can't get to that spot without being a good listener.
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When you think you're trading, but you're really gambling
If you don't know the odds or probabilities (there the same thing), you can't effectively position size.
You're gambling, but now at least you know.
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How the crypto market & exchanges will likely evolve
As of this date, the majority of companies that help you buy and sell crypto are not regulated nor registered as Broker/Dealers.
It's highly likely that is going to change.
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Understanding yourself better leads to understanding the crowd better
Knowing how the crowd is going to behave can lead to improving your trading edge.
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When to rebalance your emotional portfolio
All of your emotions are trying to communicate with you and teach you something if you know how to listen.
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How to backdoor your way into a thesis
Let the market help you build an investment thesis after you're already long.
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Peeling back your onion and going inward
You can learn a great deal about trading by doing it, and in doing so, you'll become your own best teacher.
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MSM, bias, and your energy levels
If you're seeking emotional support for not having your own trading model nor methodology, you're in for a surprise: financial televisions shows can't help you.
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Dealing with frustration when markets stall
One of my friends (who is a pro) had to put on more than a dozen trades to net 5 current positions.
If you are frustrated, you are not alone.
Click here to get your free copy of The Inner Voice of Trading audiobook.
Trading edge and market nuances
You might be able to find a nuance of a market by looking at the data, not the chart.
That nuance could be incorporated or become your trading edge.
Be open-minded in your research.
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Understanding relative value trades (pairs and spreads)
Trading spreads in the commodities markets and equity pairs in the stock market might be a good way for you to cut the vol in you portfolio.
In these types of trades, you're trading the difference between the two instruments more than making a bullish or bearish bets.
These are considered relative value trades.
Click here to get your free copy of The Inner Voice of Trading audiobook.
If you smell smoke, assume it's a 5-alarm fire
Markets can move swiftly against you, sometimes before you can act fast enough to cut risk.
Consider having protective stops in the market, especially if you're trading with leverage.
Click here to get your free copy of The Inner Voice of Trading audiobook.
Trading within a bubble
Trading bubbles is what you pray for, but you have to know that the market is in a bubble.
If you get caught up, you can get hurt badly.
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Using charts to play superior defense
My take on Warren Buffett saying he doesn't know any rich technicians.
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What to do if the market determines your mood
Intentions equal results.
Speak about the truth that you want in your life, not what you don't have.
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Keep your perspective on the big picture
Intentions equal results.
Trader burnout doesn't typically occur during raging bull markets.
It happens when you're grinding which happens in markets like these.
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Whether you're up or down, your #1 job is to play superior defense
Why you should adjust your protective stops upwardly.
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The benefits of making a strategic break in your routine
Refresh and restart.
Although you can probably smell the smoke, sometimes you can't see where the fire is when you're standing on top of it.
Take a few days off in this environment to clearly see all the NPAs (non-productive activities) that you might have accumulated since March 2020.
It will save you time, money, and energy.
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Know when to take a day off
Intentions equal results.
If you're burnt out and know it, and you're still grinding, how does that serve you?
Take a day off and put some space between you and your trading.
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Why acting intentionally will help you hit your goals (faster)
Your subconscious is running the show.
Get in touch with it.
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