I’m taking a wait and see approach in cryptocurrencies for now. I’m still contemplating ...
Life Changes That Help You Trade Better
08/08/2012 11:56 am EST
Traders don't have to spend money to start making money, says Rob Booker, who advises aspiring professionals to focus on being stable, consistent, and frugal...not just in trading, but in life.
We’re talking about trading psychology today with Rob Booker. Now Rob, this is something that you write about, you blog about, you’ve done some videos on this topic. Give us just your general thoughts on what the proper psychology really should be for a good trader.
Well, I do a whole podcast about it in fact. The Trader’s Podcast is published twice a week, and all we really talk about is the process of living better as a person to become a better trader. And it might sound counterintuitive—that it’s all about the charts or it’s all about the strategies—but there’s no better indication about whether or not we’re a stable person psychologically than our trading account’s history.
The ups and downs that we experience as traders are huge indicators of how stable we are as people, and how stable we are as a person is a great way to predict our performance in the markets. Regardless of the strategy we trade, regardless of the financial market that we choose to trade, how stable and how functioning we are as a human being has such a huge impact on whether we’re going to make money every day in the markets.
Now along those lines, one of the things I’ve heard you talk about is the need to keep your expenses very low in order to trade for a living. Say a little bit about that.
Well, we all talk about trading for a living. It’s the goal that we all aspire to. I remember back when I began the process of wanting to trade for a living, the first thing that I wanted to do was buy a bunch of monitors. I wanted to buy every book that was ever published on the subject of trading. I wanted to buy the best computer, the best monitor, the best keyboard even—and they have keyboards that are specialized for traders. I wanted a Bloomberg Terminal. That’s like $1700 a month, and soon enough I was spending money like I was a successful trader.
And you often hear people say you’ve got to spend money to make money, or if I can get the image of success around me I can become successful. But what I’ve found is that when I’m the hungriest, when I want it the worst, that’s when I do well. So I took all of that, and before I even began I stripped it away. I had a door that sat on top of two sawhorses in my office. I had these old giant, heavy CRT monitors. I had a computer that was hooked into those monitors that actually was a laptop, and the top of it was seperated from the chassis. So it was like a tablet computer, because the wires were hanging out, and I traded on that for four years.
It was the most garbage-oriented set up ever, but I was hungry to make money. That hunger to make the money made me want to make the money necessary to trade for a living, and I reversed the process. I didn’t try to live like a successful trader before I’d made the money, and it made me hungry to do the things necessary to get the profits necessary to live like a trader who could really do it for a living.
Rob, we just have a short amount of time here. Any quick tips for people in order to get themselves into some of these positions where they can be better traders?
Sure. It might be counterintuitive, but go through your budget. Eliminate everything from your daily life and your daily budget that’s excessive. If you want to trade for a living and you want to quit your job, start living frugally. Cut off the cable, cut off the extras. Don’t eat out as much. Don’t buy so many trading books. Don’t buy a fancy computer. Reduce your expenses first, and get that hunger that you need to really go out there every day and manage your money in the markets.
Alright, some words of wisdom there. Thank you so much.Thank you.
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