Greetings from Pueblo Bonita Pacifica in Cabo San Lucas, Mexico. If you come to Cabo, Pacifica is the way to go. It’s the smallest and most exclusive of all the resorts – and adults only, so no drunk spring-breakers or screaming kids.
While many of the other Cabo resorts are huge and seemingly overrun, with a significant trek to restaurants and amenities, at Pacifica it truly feels like a private, quiet getaway… and your bungalow door is a thirty second walk from everything, including the ocean.
It’s a working vacation – thanks to high speed internet, all a Mercenary needs is a laptop and comfortable chair to follow markets and stay on top of positions anywhere in the world. Phone text alerts for price triggers make this even easier too.
Places like Cabo are thus an ideal mesh for the independent swing trader’s life: Two to three hours of focus in the morning (on a “work-lite” schedule),,, coupled with relaxing or sight-seeing in the afternoons… and then another hour or two of research slipped in here and there, quite possibly via shaded umbrella by the infinity pool. (Daiquiri anyone?)
The trader’s life can seem ridiculously idyllic. Travel where you want, when you want… enjoying the best of everything… focused on work that is constantly interesting and engaging, with no boss and unlimited financial upside to boot. Believe it ,we sometimes pinch ourselves and ask, “How good can life get?”
But there is a real cost to all this — the cost of self-discipline and self-directed focus. It’s like working from a home office. Most people love the sound of a home office – no supervisor, no corporate policies, no punch clock and so on. But when the topic of working from home comes up, a common confession is: “I would never have the self discipline to pull that off.”
Most people wouldn’t…
And trading takes the self discipline requirement to a whole other level. In addition to a tough-as-nails work ethic, you have to execute your trading plan, and do your “homework” (research duties and trade setups) with no stumbles and no slacking, rain or shine, day in and day out without fail.
Nor does the above even touch on the need to honor your risk points… the need to never self-sabotage or do something foolish because of a discipline lapse… to always stay patient and cool as a cucumber in the face of adversity or “boring stretches” of low market activity…
We routinely hear discipline lapses presented as if they were acceptable, and it always makes us laugh. There is a strange sort of casual acceptance in the online trading community:
Forgot to place your stop? Pulled your risk point at the last second? Took a ‘flyer’ on a dumb position in too large a size because you were mad at the market? Blew off your daily routine because you were in a bad mood? Ha ha, that’s “just part of trading…”
Sorry, but that stuff is NOT part of professional level trading. It’s strictly amateur hour — screwing around and not being serious about the craft. The game is hard enough without tolerating an enemy in your own camp!
Imagine you were managing a large sum of capital for a very serious and demanding client. In our view, you should treat your own capital with the same amount of respect as you would that client’s. Any lapses in discipline that would get you fired from running someone else’s OPM, should also be out of bounds with your own money. Because seriously, aren’t you your own best client? Does it really matter that your personal trading account hasn’t reached $100MM yet? It shouldn’t…
Perfect trading discipline is no holy grail of course — it’s more like “table stakes.” As in,
To win the game, you have to have a seat at the table. If you can’t come up with “table stakes” — the minimum buy-in required to play the game — you don’t get that seat. (You may think you’re at the table, but you aren’t.) Certain requirements, like executing your methodology with 100 percent consistency, and constantly looking for areas of incremental improvement, should be considered “table stakes” in trading. Such does not guarantee you will be consistently profitable. But without such efforts, you’re damn near guaranteed not to be.
People underestimate the level of self discipline and personal emotional control it takes to become a competent trader. Why? Probably because “discipline” is a dirty word… and topics like, say, checking on markets from the deck of your bungalow in Cabo are a lot more fun and sexy. But the hard work is the backbone of the payoff. You don’t get the fun and sexy before working out the nitty gritty.
Much of this (working out the nitty gritty) is a function of trading psychology — getting your head and heart and mental perspectives right. Most would-be traders spend about as much time thinking about trading psychology as they do thinking about money management (that is to say, almost zero).
That’s a shame because trading psychology is critically important. It is the foundation upon which everything else rests. In such a competitive environment as trading, if you can’t operate with clockwork discipline and always bring your ‘A’ game, what chance do you have?
That is why we are kicking off our MT Drivers Manual — long in the works, finally being rolled out now — with the Trading Psychology Field Guide.
Part I of the Field Guide details the ultimate source of profits in trading… why the many lose to the benefit of the few… and why it is so critically important to undergo a transformation in outlook, so as to become one of the few.
Part II then digs into the actual nitty gritty — the hard transformative work required to change the structure of the mind… and in so doing laying the foundational groundwork for lasting trading success.
Part III — on packing and preparing for the trading “journey” — is now underway…
It’s a risky approach, quite frankly. We are going far afield from traditional trading topics with some of this stuff… sharing ideas and processes people have never come across before… straying well off the beaten path of more conventional “how to trade” materials.
The idea is, by sharing unexplored truths — and creative approaches developed over the course of a decade or more — we feel we can succeed in shaping traders from ordinary clay where other efforts failed.
We expect the Driver’s Manual to serve those not cut out for trading as well… by doing them a service in opening their eyes. The DM lays out in bold clear terms what is genuinely required, so that the challenge is clarified with no misconceptions. (If trading is not for you, in other words, the DM will give you a firmer grasp as to why — and possibly save a lot of effort and time.)
Because it isn’t just sufficient trading capital… or a workable method… or strong enough motivation and a logical plan… it is something bigger, deeper and more comprehensive than all those things. It can’t be encapsulated in a paragraph or two, any more than a white collar career discipline can be picked up in a weekend.
The DM is a wildly ambitious project all told. Over time (as the materials will be ongoing) we will lay out everything, and that means everything, required to build successful traders from the ground up — starting with only the building blocks of strong motivation and deep desire.
Through this process we will be forced to hone and sharpen and clarify our own procedures and thought processes like never before. (Nothing invites razor sharp clarity like sharing with the world, part of the reason we’re doing this).
If you haven’t yet signed up for the Driver’s Manual, there’s no cost or obligation to check it out. And the Trading Psychology Field Guide — as we have said previously, some of the most important work we’ve ever done — comes with the DM and is absolutely free…
Follow this link to get the Field Guide (and additional Driver’s Manual materials) sent to you via email.
Speaking of “the life of the independent trader”… in April we will continue living the life — because it’s profitable, and because we can — by hitting the Wynn poker room in ever alluring Las Vegas.
From April 3rd to 11th we will be staying and playing at the Wynn, crushing the $2-$5 and $5-$10 NL tables while getting our trading work done during the day (and at the tables, courtesy of high speed internet and chargers at every seat),
If you will be in or around Vegas at that time, or can make plans to drop by the Wynn for drinks, shoot us an email — jack@ or mike@ mercenarytrader.com!