The saying “there is more than one way to skin a cat” is an awful one when you really think about it. But when it comes to key takeaways from the Simpler Austin Mentorship that took place last week, that is what comes to mind.
The Simpler Trading Traders showed that there are many ways to “skin the cat” of the market. There are different indicators, different time frames, different instruments and different strategies – and all of them can work.
There is no Holy Grail in the world of trading.
You can use a squeeze on different time frames. You can use various levels and targets. You can set up unbalanced butterflies or long puts funded by short call spreads. You can trade TSLA options or Dollar/Pound or E-Mini S&P 500 futures or Gold.
Those are not the things that separate the average (losing) trader from the great trader. The Mentorship was all about what actually does make the difference. These are the basic “rules”.
- Protect your capital
- Cut losers (quickly and unemotionally)
- Have a setup
- Know your exits
- Don’t overtrade & don’t trade from boredom or impatience
- Position size appropriately
- Review your trades
I had some other key takeaways from the amazing trading team at SimplerTrading
- Think probabilistically – Anything can happen (Brexit???)
- First learn not to lose, then you can learn to make gains
- Limit emotions
- Don’t approach the market like an analyst – they have to be “right”
- “If I am losing, I am wrong”
- Test your ideas with trades (25)
- Look at different time frames
- Don’t watch every tick – get away from the markets for a time
- You don’t need to know everything about the markets or the news
- “All it takes is one bad trade”
- Don’t anticipate, just participate
- Poker is a lot like trading – fold quickly, bet appropriately, don’t overplay
- Don’t play poker with Chris Brecher ;-)
- Know thyself
That last is an important one that ties together the commonalities and the differences. You need to find a way of trading that works for your personality. As John discussed, some people love trading futures short term, while others find it more like hitting their heads against the wall. Some people want to make 20% a year in relatively conservative trades, while some want to make 100%.
You can choose the markets that you want to trade. You can choose the time-frames that work for you and your personality. You can choose the instruments and strategies that are best suited for your trading. But the basic rules and tenets of being a great trader are universal.
And the Simpler Trading Traders are truly great traders – and great people. We know that the financial industry is comprised of some less than scrupulous folks. Many of the “gurus” out there are not great traders, despite what they would have you think. I have met and worked with many of them. And even worse many of them are not such great people. That is just so clearly not the case with John and his team and that is the real draw of Simpler Trading.
What struck me most about the Mentorship was the great people – traders, staff and clients. I am just getting to know all the people at SimplerTrading but I have been universally impressed with how they are authentic, down-to-earth, and approachable. They are great folks. And I was equally impressed with the clients. They are curious and driven to make the next step as traders.
The best part of the Mentorship is that community of traders and the amazing interplay and interaction when a group of unique, but like-minded people come together with a common goal – “skinning the cat”.
This post was written by guest author, Chris McKhann:
Chris McKhann has been involved professionally with the stock market for more than 15 years and specifically with derivatives for 12 of those. He started as a stock broker, but quickly moved on to options and futures trading. He spent some time as the Derivatives Product Manager for TD Ameritrade. He was the chief analyst and hedging strategist for OptionMonster. He has been an options trading educator and content provider for many years. His writing and analysis has been featured on Reuters, the Wall Street Journal, Forbes, TheStreet, CNBC and internationally. He has also designed and traded option and futures strategies for prop trading firms and hedge funds as well as managed accounts.