The Art of Simple Trading Manifesto
This is a long lesson. I got a little carried away... But hopefully you get the point.
The Merriam-Webster dictionary defines a manifesto as “a written statement that describes the policies, goals, and opinions of a person or group.” That’s a pretty fair description of what this document is… Or at least what I intend it to be.
I’m often asked this little ditty of a question…
“If you’re such a good trader, why do you sell mentorship services/trading guidance?”
Fair question I suppose...
Except it’s not.
If that’s the question on your mind, stay with me as I’ll be providing my answer in just a second…
But before I do that... Do you ask:
- hedge fund managers why they trade other folks’ money if they’re so good?
- professional basketball players who make north of $20mm per year salary why they also have endorsements?
- doctors why they take money/perks to recommend certain branded pharmaceuticals?
No?
Then your question to me is out of place mate…
However, I’ll answer anyway.
My reasons are pretty simple:
- It’s an independent income stream. That’s important to day traders like myself as it helps alleviate the temptation to “trade for a paycheck.” Having been well indoctrinated to work long and hard as opposed to smart and hard, I'm a recovering "worker bee."
- I wish guidance like this was available when I started out.
- Day trading is solitary… I like that for the most part, but I also enjoyed being part of a team during my Wall Street days. Running an online trading room is a great way to create a similar environment.
There are more reasons, but I assume those will suffice... for now at least.
Now that we got that out of the way...
This manifesto and e-course are designed to help you see the truth about your financial life (both current and future). They're also intended to encourage you to make the necessary moves to chart a new, more fulfilling financial path… one that you control through simple, intentional interaction with public securities markets.
That’s right… this is all about that dirty word (in some circles)… Trading.
This manifesto and e-course will help you:
- See the path of likely financial destruction you're traveling
- Give you an idea how you (like most other people) came to be on this path
- Show you that there is a better approach to your financial well-being, and, finally
- Encourage you to plot a new path
That's a lot to accomplish. But I’ll get it done. To keep me honest, I encourage you to return to this list at the end and challenge me if I haven't completed each point.
The Crux Of The Issue
Personal responsibility.
This phrase shouldn’t just be a buzzword thrown around in political discourse.
Nor is it limited to a movement to return to some theoretically idyllic, “Leave It To Beaveresque” time past.
Personal responsibility is about the choices that we make and how those choices reflect both our sense of accountability and how much of it we choose to assume.
It’s my hope that in reading this post and following along in this e-course, you’ll come to realize that your life is not meant to just "happen" to you.
You’re accountable… and you have some control.
If you choose to just sorta meander along, it’s just that… a choice. You’re meant to embrace the gift of life. To reach your potential and then grow beyond those limits.
To do this I plan to show you the one overarching area that imposes the most limits on your life then encourage you to obliterate that constraint...
That limit is money.
Or perhaps, more accurately, the lack of money.
With your permission (and assistance), over the course of this ecourse I’m going to help you replace at least some of the discouraging voices... The voices telling you what ISN’T possible.
Initially I'll use my own dulcet tones as a temporary substitute...but ultimately the voice will be your own... newly informed, competent and confident.
What This Costs
Aka, “What’s the catch?”
The full version of The Art of Simple Trading Manifesto is $86,888.88.
Annually.
Jokes… That’s really just what it’s worth… or half of it anyway…
The Art of Simple Trading Manifesto is actually free.
You read that correctly… it’s free.
Zero…
Zip…
Nada...
But the dollar cost of the Manifesto is not the real price. Or all of it anyway. The true price is not free... or even cheap for that matter.
You were right… There’s always “a catch.”
The true price can't be reflected in Dollars... or Euros... or Yen.
No, the true cost to you of the Manifesto is the disruption in your certainty… The challenge to your understanding of how the world works... more specifically, how the financial world works.
How your financial world works.
This disruption is FAR more “expensive” than any dollar amount.
The reason this is so "costly" is because disrupting your understanding about something you know is inherently uncomfortable… unsettling even. Disrupting your financial understanding is like adding lighter fluid to a high flame... explosive. As a result, you’re likely to resist this information... even though the logic is unassailable... even though the proof is irresistible.
Your resistance to change will force you to experience substantial discomfort... perhaps even to the point of rejecting it.
I’ve spoken about what you will find in these pages to innumerable people over time.
Colleagues and competitors from my Wall Street days...
Family members...
My in-laws...
Close friends...
Associates...
Random strangers at bars...
As you can probably guess, the reactions have varied as much as the circumstances. They’ve ranged from “Yeah, right…” to “But Warren Buffett says…” to “Maybe…” to “Tell me more.”
It’s the last group that I’m really interested in.
It’s the last group that I can actually help.
But… as I said, it’s costly. Your certainty… your comfort… your understanding of the nature of money and markets.
This is the true “cost" of this information.
Can you pay that price?
Will you pay that price?
It’s Not For You
“The definition of insanity is doing the same thing over and over and expecting a different result.”
-- Albert Einstein
The “good news” is TAOST Manifesto is not for everyone. I’m not under the delusion that everyone will receive this information the same way.
Many will be disinterested.
As noted above, far more will resist any challenge to their ingrained “understanding” of how finances and financial markets work.
Still others will think me a charlatan and the information here a scheme to defraud.
I assure you... it is not (and I am not). That's part of why I made both the Manifesto and the ecourse free.
But, I say again this manifesto is not for everyone.
It’s not for those timid souls who are unhappy with their financial situation, but unwilling to do anything about it.
It's not for those whose minds are closed to even the possibility of another way.
And its certainly not for those so concerned with other people's opinions and comments that they will allow themselves to be talked out of even investigating a new approach.
It May Be For You
It might, however, be for you if you’ve grown tired of the results generated by the status quo:
- Low to no growth of your assets
- the falling availability (and viability) of what were once "good" jobs (also known as the “hollowing out” of jobs
- the feeling that your "American Dream" will only ever be just that... a dream... a fantasy for many
- the additional feeling that life is passing you by because of your finances
- the concern that giving your child a better start than you had is moving further out of reach with skyrocketing college tuition costs. Remind me to tell you the story of my buddy who’s daughter is in her third year at an elite midwest school. To the tune of $68K all in... for ONE year…
- the gnawing, growing worry that retirement is not only a far off proposition, but fast becoming an impossible one
- that it's all just... hopeless
This manifesto (and the ecourse of which it’s a part) is for those willing to challenge their thoughts and long held beliefs. I know… One shouldn’t go mucking around with belief systems. Yeah, yeah I know. And yet…
I wrote this for the people willing to put in hard, consistent work to change their investing/trading approach and, more important, their mindset. All this with an eye toward ultimately changing/improving their lives. It's for people who refuse to have their lives dictated by what others think they should do.
It Can Be Done
"No One Could Until Someone Did"
-- The Trader
Let me declare right here. Anyone can trade successfully.
I'll say that again...
ANYONE
CAN
TRADE
SUCCESSFULLY.
I'm sure that will be a bit controversial to some.
So let me soften the statement a bit (not really, but it will clarify it some)
Anyone can trade successfully... but most won't.
Notice I said most won't... not most can't.
And therein lies the big gap between those who believe in the possibility and potential of trading and those who don't. Believers know that trading is not only possible, but also that success is inevitable for those who learn a simple, robust method… and apply it religiously.
Who Am I?
You’ve come this far, so I suppose I should tell you a bit about me.
So who am I?
No one special really… In fact, I’m a lot like many of you. Others of you, I could easily have been under slightly different circumstances.
I could still be trying to climb the corporate ladder…
I could also be looking for my next opportunity having bounced from company to company...
I could just as easily be recently paroled from a drug distribution conviction and looking for a way to do more than scratch out an existence notwithstanding my record.
I know a person in each of these positions, but more important, I recognize that but for a few breaks and a couple of half-decent decisions, I could EASILY be in any of their shoes.
The point is you know who I am… because I’m you. I just happened to get to trading sooner than you.
Timing is indeed everything.
At any rate, I’m a professional trader… emphasis on pro… don’t let the home basement office fool you. You might also hear me referred to as a principal, prop or proprietary trader. Whatever the name, it’s all the same. I risk my own money in the market for financial gain. In my case, I focus 99.9% of my energy (and capital) on day trading. However, because of how I trade, being a day trader is simply a risk management tool… More on that later.
I have both undergraduate and graduate degrees from good institutions. I also spent nearly a decade on a Wall Street trading desk for one of the premier investment banks covering some of the world’s largest mutual and hedge funds.
That’s the good news I suppose…
The bad news (or could be the bad news) is that neither the degrees nor my extensive Wall Street experience and pedigree would amount to much of anything if I needed/wanted a job right now.
Interestingly, the degrees and work experience are really not much more helpful to me as a trader. In fact, you might say I’m able to trade successfully despite the degrees and work experience.
It’s a difference in mindset(s).
Getting the degrees was academic… ivory towerish even.
Spending years on Wall Street was more practical… but as a broker, I worked as the agent of my clients… helping them execute ideas (theirs or mine) in the market. But as close as I was to many of them, the money traded (and thus the risk of loss) was theirs… and theirs alone.
The Change
Everyone comes to trading for their own reasons. My decision to become a professional trader happened in stages (after all, i didn’t even know what “trading” was until well after college), but there were a few truly seminal moments that brought me to this point.
- Michael Milken
- Babysitting
- Can’t Compete With Heat
Michael Milken
In 1997 I had just completed the second of 4 years of a joint degree program. I was working a summer internship in the Corporate Strategy department of an old line industrial company. I don’t remember why but for some reason I started reading banking scandal books and plowed through a bunch of them... Barbarians At The Gate, The Predators’ Ball, Liars’ Poker and, the book that put me on “the path”… Den of Thieves.
Now before you go getting all judgmental, no… the book didn’t inspire me to pursue a life of financial crime. I wasn’t even all that impressed with most of the characters profiled in the book. What I was impressed with (and inspired by) was what was possible. The book taught me that it was possible to make a pile of money… a career… a life… freedom... from my own efforts. More specifically, reading about Michael Milken’s work ethic (in particular the miner’s hat on the bus before dawn) helped me see there was a target and place for my own boundless work ethic…
The markets.
Babysitting
A couple of years later I was a fast rising trading executive for a major bank. At a big year end party I saw the second reason for my soon to come exodus.
Clients were invited to attend the party if they were so inclined. The trader for my division’s biggest client showed up (interestingly I would end up covering this very account and client ultimately). At any rate, I got to see my direct boss (and Managing Director at my firm) follow the customer around like a babysitter… keeping his drink filled… making sure no one else developed a relationship with him…
It’s said that when you don’t want your boss’ job it’s time to go.
It was time for me to go… soon.
Can’t Compete With Heat
Let’s get something clear… your employer, to the extent you have one, does not exist to provide you with a good job… with stable income. In fact, from the moment you’re hired, your employer is looking to procure your services (or a close substitute) for as little possible… or eliminate the need for your services altogether.
It’s not personal… it’s business.
As an employee, you’re an expense. And what do all good companies do with expenses?
That’s right. They do everything they can to minimize them. Reduce them. Obliterate them.
That’s what I was thinking the day a beautiful colleague walked on the trading floor and asked me to set up meetings with my clients. She was leading the effort to put technology on their desks that would pretty much make me (and others like me) obsolete.
“Hmmm… Let me get this straight… You’d like me to help you schedule appointments for you to show my best clients a product that will essentially destroy their need for me. My male clients… You… With a product that will make their lives easier and transactions less expensive…”
“I’m gonna need to get back to you on that…”
Business… not personal right?
For the sake of clarity… I’m not a misogynist. I’ve been… challenged for including the bit about my colleague’s gender and looks and how that that would likely work against me. What I am is a pragmatist. I knew that most of my male clients would be only too happy to discuss my firm’s offerings with her versus me as long as she also knew what she was talking about… and she did. Plus, the technology she was taking to our clients was an inevitability.
And I knew it.
I’d actually been anticipating it for some time. But I say again, I was and am a realist. A business accelerating product sold by a smart, attractive member of the opposite sex?
Let’s just say that had I not been long working on my next hustle, I would have started that day… in earnest.
Can’t beat the heat.
Well that’s enough about me for now…
Back to our regularly scheduled program…
Can’t Wait For Retirement? Think Again
Here are a few disconcerting statistics:
- The median retirement account balance for working households as of 2013 was $3,000 ($12,000 for near retirement households)*
- Two-thirds of working households age 55-64 with at least one earner have retirement savings less than one times their annual income*
- A large majority of households fall short of conservative retirement savings targets for their age and income based on working until age 67. Based on retirement account assets, 92 percent of working households do not meet targets.*
- According to the College Board, the average cost of tuition and fees for the 2015–2016 school year was $32,405 at private colleges, $9,410 for state residents at public colleges, and $23,893 for out-of-state residents attending public universities.**
- The fastest growing occupation in the United States is projected to be Wind Turbine Service Tech at 108% 2014 to 2024. The job pays $48,800.***
- .07% of a large group of broad mutual funds were able to outperform for 2 years running in a study conducted by S&P Dow Jones Indices.****
*“The Retirement Savings Crisis: Is it Worse Than We Think?” Published 2013.
** The College Board
*** Fastest Growing Occupations In The United States US Bureau of Labor Statistics 2014.
**** “How Many Mutual Funds Routinely Rout The Rout The Market? Zero” New York Times, Strategies, Jeff Sommer; March 14, 2015.
In other words, based solely on simple math, most folks are in trouble.
Your Current Path
You work for a good company or firm. You’re good at your job and a “valued” member of the team. You’ve had nothing but glowing annual reviews and you have consistently maxed out on annual raises… except of course, in those pesky years where some other division hurt the company’s overall performance.
You’re doing well.
Nothing but a steady rise at your company for the next 20 to 30 years right?
Cruise control.
Except…
That’s not really how it works anymore is it? In fact, was that ever how it actually worked for anyone other than a handful of people who were perpetually hyped up by the co-opted media?
I don’t think so… But, I digress…
A Better Way
Let’s be clear… The personal finance industry wants you to own everything all the time irrespective of how appropriate or inappropriate the holding may be… with no regard for whether now is the right time to hold those same securities or not.
Was January 2000 a good time to load up on tech? Was April 2003 the best time to short the broader market? Neither one of these were timely moves. But I’m guessing your advisor didn’t draw a distinction between the actions needed in those two very distinct situations.
Virtually every product you buy from them is designed to enrich them and their firms rather than grow your account. The vast majority of them aren’t even required to put your interests ahead of their own.
I believe that growing your account is just as important as adding to it through savings… Maybe even more so.
I believe that the key to this is the not so “secret magic” of compounding.
I believe that you are capable of doing this for yourself as long as you are willing to stop acting like sheep and take the road less travelled.
So write these 5 TAOST Principles down:
- Timing is everything -- It IS possible to time the markets… not perfectly, but it is definitely possible.
- Less is more -- The more you know, the less you need.
- Time is a mirror within a mirror within a mirror… -- The same things that happen on longer term charts happen on much shorter timeframes.
- Magnitude -- Effective trading is about 1 thing… winning more when you win than you lose when you lose. That’s called Positive Expectancy and we’ll get deeper into that later in the course.
- In general, the faster you lose and the more slowly you win, the better you will do in the markets… I call this Lose Fast, Win Slow…
Conclusion
Short term (day) trading is possible… and you’re the one to do it, especially if you view it as a sidehustle to be taken seriously. If you ignore the naysayers, learn a simple, replicable strategy and make it your own, there’s no limit to what you can achieve.
I should know… I’m not just the founder, but a member of the Hair Club for… oh wait… sorry. I’m not just the founder of TAOST, but the path you’re on is the same path I took… without the benefit of a me. If I did it… you can do it.
KIS,
The Trader
P.S. Tomorrow we’ll take a look at 1 of the major things that blocks you from making money in the market… and how to get around it… or, more to my liking, through it.
