By Josip Causic, Online Trading Academy Options Instructor
In this article, the first of two parts, I will share a story of a motivated Online Trading Academy options student. She was able to take Online Trading Academy teachings about options, apply them, get cash flow going, and supplement her regular annual income at first and then eventually embark on the full-time journey of just trading for a living. This article utilizes her actual emails that came to me over several years to point out how her trading career gradually evolved. It focuses only on two points: Having a trading buddy and also a trading plan.
Several years ago, I was teaching an options class down in North Carolina, and there was a student who attended my class that was very different from the rest. Her motivation was outstanding and it was obvious to all present in the class that she was there to learn as much as she could in the shortest possible time and apply it almost instantly. Her goal was clear; she wanted to replace her current job with trading for a living. Along the way, she has evolved in areas that initially she never thought mattered at all. Here are some excerpts from her emails.
"Hello Josip,
...Rest assured that my dream and Online Trading Academy, in general, have never left the forefront of my mind. In fact, besides my daughter, trading remains my Top Priority... First I lost about 300.00 dollars. Then I emailed my Education Counselor at the Academy for help and he told me to bring my trades in to let him review them and we could discover my mistakes. He advised that perhaps my P/L calculations needed adjustment because he knew I understood the material. He was right. My biggest problems now are controlling my Patience; by the time I had started making constant profits, it was too late to be able to quit my job this year.
But, I HAVE A PLAN!!!!!
My family thinks I have completely lost my mind regarding my Trading business. I have reached the point that I don't even bother to talk to them about it anymore. I can't make them understand no matter how hard I tried.
Again rest assured, I have been reading your articles. Out of all of your Articles, I liked the "Disappointment, Discipline, and Domination: May 12th" article the best.
I think you have hit on the "Root Cause" of any Trader that Fails to make money Trading because knowledge without the Discipline, Patience, and Wisdom to accompany it is useless.
Well, that's all for now Josip. I just wanted you to know that I'm making progress; "You've got to crawl before you can walk and walk before you can run." Take care of yourself and family.
Well gotta go. MAY ALL YOUR TRADES BE GREEN!"
In that very first email, she mentions that she has lost some money, but she did not lose her motivation. She has taken advantage of the accessibility to her Online Trading Academy Education Counselors and first worked on finding her mistakes and then correcting them. She also makes a reference to a plan which is so essential for everyone trading. In this first article, I will focus only on two points: The importance of having a Trading Partner and also having a specific and written Trading Plan.
Every successful trader that I know has a Trading Buddy. This concept of having someone on the Team is as old as Napoleon Hill's book, "Think and Grow Rich." It is in that book that he clearly states that besides having a burning desire, which is so essential for achieving goals, one also needs to be part of a Master Mind Team.
When it comes to trading, I noticed through experience that the Trading Team tends to be very small, and in fact often it is composed of only a couple of individuals. As you read in this newsletter, the North Carolina student had the first ingredient that Napoleon Hill mentions - she had a burning desire. Yet, obviously, when she started trading on her own, she lost three hundred dollars from the get-go. She was wise enough to stop and evaluate what was taking place. That right there is a sign of wisdom. Without knowing where to turn, she looked to an Online Trading Academy Education Counselor for assistance. This is a good approach, but what I think that she really needed was a permanent Trading Partner.
Trading Partners are there (1) to look at the chart with a new set of eyes, and (2) to honestly share their view point, which could be quite different and opposing to ours. They are often there to challenge our thinking and our market forecast. They are there to keep us accountable to ourselves. I believe that it is wise to select a Trading Buddy who is at a higher level than yourself; one who has more trading experience than you. The worst possible thing to do is to select a Trading Buddy who is too agreeable and too polite. Those kinds of people do a great disservice to other traders.
Moving on to the second point, having a Trading Plan. At Online Trading Academy, we teach a simple rule: Plan the Trade and Trade the Plan. However, it amazes me that the majority of novice traders do not have even the slightest targets or stops for their trades. All that they want is just to make money. When they are challenged by me, or other instructors, they brush off our comments as unessential. I tend to ask the students, when they give me the reply that their goal is to make money, how much exactly are you anticipating from this specific trade? Then I get another general answer – as much as possible. "And that is?" I inquire, cornering them to think hard. Every trade has to have both a target and a stop. Period. There are no exceptions.
Going back to the ending of the email above, I would like to point out that she is encountering resistance from the people who surround her. It is normal to expect that there will NOT be any support from family members when one embarks on the trading journey with the goal of replacing a living with trading. The history books are full of abnormal people. There are very few "normal" people who have made it into those books. To break free, one often needs to think outside of the box. Trading the financial markets is exactly that.
In conclusion, this article has emphasized two simple points: Have a Trading Plan, and also have a Trading Buddy. There is nothing new in this, yet it is interesting that every one of the novice traders comes to that same conclusion on his or her own, and it is only then that the point hits home. So if you aren't where you want to be as a trader, then spell out your Trading Plan and get a Trading Buddy. Have green trading.
- Josip Causic
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