The Nomad Trader

Hi,

Simmer down around the fire my dear friends and fellow speculators.... Right, before i begin, let me tell you a bit about myself. I used to trade as a junior trader for a bulge and prior to that, i did my apprentice training in a hedge fund and a physical house. In many way, i guess you can say that i am a jack of all trades but I would like to think that i am a master of some.

Fast forward after 6 years, I decided after some serious contemplation that i would leave the security of the big fat pay checks and come out on my own to trade, just me and the market, no regulations to deal with, no bosses to suck up to, no trader's mandate, specialization or requirements. I trade what the market tells me. The only way it knows how to, which is the price.

I think that i have acquire some skill sets along the way that will aid my journey of setting up my own fund one day. Hopefully, my 13% CAGR RAROC over the last few years continues and perhaps even increase . And i hope that you will come along with me for this journey.

I hear cynicism.... What is my purpose you ask me ... Nothing much.. i don't need anyone to affirm my trades. My P&L does that for me. I don't need praise or subscribers, points or accolades. My purpose perhaps, is to satisfy my own desire of giving back to aspiring traders alike, to learn from those better than me, to give inspiration to those worse than me and to provide jokes and laughs to individuals who doubt me.

Whatever it is, i hope that my journey has something for everyone.

Lastly, there is no system to be sold, no trick or predictions to be taught.. Nothing .. so if you wish to purchase an EA or a system, this is not the thread for you. I am sure that there are many others out there who wish to part you with your money for tips and tricks.. I offer none... I am but a simple man with one passion. That to understand and beat the market.


*As a matter of personal preference, please don't type in this thread mundane stuff such as the fact that you're subscribing. I wish to keep this thread as clean as possible. It is not about my trading methodology, my systems, set ups or my "crystal ball".... there is none.. This is a trading journal on my trading psychology and the battles within myself. I hope it can help you overcome your own demons...

I offer my own advice in quotes and anecdotal abstract ways.. The key isn't for me to feed you.. It's for you to think what does it truly mean to you. It doesn't matter what i say.. What matters is how you perceive it and internalize it. Only then, will you learn and grow.

Let me start off by saying this. Have a good think about it and i will explain to you what it means to me soon..

Start by doing whats necessary; then do whats possible; and suddenly you are doing the impossible Francis of Assisi

There is no royal road to anything.
One thing at a time, all things in succession.
That which grows fast, withers as rapidly.
That which grows slowly, endures.

Trading my friends, is like being a good brick layer.. Piece by piece, brick by brick. There are no short cuts. No holy grail and no system that can aid you to being the best trader.

You start off with a dream.
You begin by working the yards. Inch by Inch.

The progression of the few good traders i had the fortune of working with starts as these

You start off analyzing trade ideas and systems
You backtest them. Paper trade them. Demo, front test.
You understand the system. Why it happens, how it happens, what makes these system work. What are the risks and what are the rewards like
You come out with a realistic goal and rate of return
You front test with small amount of money (maybe 500k - 1 buck)
You gain confidence in your abilities and system and you begin to optimize it
You set up define rules base on your testing.
You develop discipline that will not waver.
You trade it successfully, reviewing it constantly in the event of decoupling / useless methodology.

You repeat.

There are no short cut to success. A trader is as much a profession as a lawyer and a doctor. You cannot bluff your way through, the cases won are your skill... the life saves are your returns.. so as much for a trader.. your P&L is your achievement. There is no two ways about it.

There are many reasons why people fail in trading. There may be multiple reasons but base on my observation, most or in fact all of these 4 fundamental reasons are as foretold by Jesse Livermore.

Greed
Fear
Hope
Ignorance.


Allow me to expand these 4 cardinal sins and go greater in depth. I am no Jesse Livermore though i very much would like to be in the future (less the failing multiple times part and suicide) but i wish i had half his ability to read the ticker tape.


You are greedy because you don't know your own ability and your trading system. You think that because you made some money and got lucky, it will always work out for you. You have multiple small wins and you think that makes you a god... it doesn't.. and then you blow up..

You are fearful that the market takes back your profit and fearful that you get whipsaw so you cut profits short and let losers ride... You don't know your system well enough cause you are too damn lazy to do the ground work and get to know your system.

You hope that the system that you stumble across is the gospel truth and that somehow or rather, you will make a windfall because you got lucky..

You are ignorant about your own trading methodology and your own skill sets... you lack the confidence to use it and stick to it.


See a pattern?

These are all human emotions that stems from your a). lack of confidence in your system that when it is time to go out, it is time to go out. b). a lack of understanding your system well enough to know that if it is losing money then the market is definitely going the other way.

Alot of these can be eradicated if you start off by laying the brick, piece by piece and understanding the methodology of the why and the hows of your system. It will a). allow you to cut when you have to base on your define parameters. b). allow you to get out of the market base on your own understanding of your system c). Cut your hope and greed given you know exactly the risk reward your system gives.

Far too many "traders" are too lazy to create their own trading method from scratch or at least deconstruct it. I begin to understand why when bulge and HF are hiring traders, they ask for these requirements.


a). Creative
b). Think of out of the box
c). Loves engineers and tinkering around with the system
d). Love military and sportsmen who train for hours and executes their plans base on their training

All of these are important. The fundamental reason why most trader fails is because they don't want it badly enough.. Badly enough to deconstruct the methods, to understand the methods, to test it rigorously and to prove it. They just head out and do a touchy- feely kinda trade and wonder why they always fail... YOU my friend.. don't want to think.. that's the problem with "traders" these days.

So what's my advice to you?

a). Don't trade if you don't want to be successful and you don't really intend to make this your profession. Don't trade if you don't want to give up your life and time to go through the basics and get it nailed down ..

b). Don't trade if you are lazy.. Don't trade if you kinda want it to get that models and bottles and that financial freedom to get out of your job.. rather, spend more time improving an working towards what you really want to do... what will make you happy. Trading because it will free up your time for something else isn't going to cut it.. The market is a tough master and it will not allow you to serve both at once... Give it your all or give it nothing at all.

Trading for a living isn't the same as trading for passive income.. That's an investor.. Read about investing from guys like Benjamin Graham and Warren Buffett.. but don't scalp, swing trade etc etc. Understand thyself and thy motive before trading. If you want to invest to get passive income to retire, you're on the wrong train my friend.. but if you want to live and die like Jesse Livermore, Soros, Nassim Taleb, SAC and the likes.. then you're on the right track.

I'm not saying either of these are wrong. I am saying, get your priorities and understand your goals first.


c). Don't trade because you have to.. Trade because you want to. . If you are in it for the fun and the adrenaline, then i'd rather you take your money and head on down to the casino. Place it on a casino war bet.. where it's 50/50.

d). Lastly, I'm not discouraging new blood, new traders or people who wants an ideal life because of trading. That is not wrong.. But first, understand thyself.. understand thy motivations.. then see if trading or speculating is truly the best way of life to grow your money... If you fail to do that, you are doomed for failure.