Enemies of the Minimalist Trader: ENVY
- Posted by chicagosean
- on June 26th, 2011
This is the eight installment in my occasional series of Enemies faced by those wishing to approach trading and investing with a minimalist, yet effect approach. For more on this series, click here.
I began my trading career in 1998 in an office which eventually grew to approximately 40 full-time traders. It was a highly supportive environment. We were all essentially nobodies with no real market backgrounds or formal trading educations. Each one of us basically self-taught ourselves, and bounced ideas off each other in the endless attempts to finds things that worked. In this regard, we were all in it together.
We were all mostly in the same age group (mid-20′s) so this led naturally to forming lasting bonds that for some of us remain strong to this day – even among those who aren’t even trading anymore.
While as a group we were all rooting for each other, underneath it all was always the darker shade of envy. As 1998 turned into 1999 and eventually the memorable spring of 2000 where millions were won (and lost) when the Nasdaq reached its generational peak, the guys developing real trading skills began to truly separate themselves from the pack. Where once everyone in the office was content making $500 a day, there was now a handful of guys starting to routinely put up $5000+ days. And even a couple who would put up the occasional 6-figure day!
I wasn’t part of this group.
I was making money, yes. At 25-years old in 2000, making $20-40,000 per month ain’t bad, no matter how you slice it. But it didn’t feel like enough. Not when guys sitting to my immediate right or left were pulling down that much per week, and sometimes per day. And this is where I got into trouble.
Envy set in. Not in a resentful way where I hated the guys for their success. It was never like that. It was more like: “Why the fuck can’t I do that?” And thus began the unraveling habit of measuring my successes against everyone else.
Up to this point, I had come a long way (albeit slower that I would’ve hoped) by keeping my own stats, measuring my performance against myself. I measured everything: # of trades, trade size, gross profit, net profit, profit-loss per stock, profit-loss per hour, which days of the week was I most profitable? Etc. Etc. Etc. The kind of self-evaluating metrics that any aspiring market maven needs to pay attention to. It’s not sexy work, but absolutely necessary. I had done all this and the hard work was finally paying off.
Then everybody else really started crushing it, and I felt like I sucked.
I stopped measuring my own stats and then only really paid attention to one metric – relative performance. If I made $3000 one day, but the guy sitting next to me made $10,000, and another guy across the room made $75,000…. then when asked how my day went, my answer would always be something like: “Oh man, it was ok. I totally missed shorting XYZ at that level. Ruined my whole day.”
What kinda shit is this? Not 6 months prior I would’ve sold my brother down the river for $300 a day in daily profits, and now I’m thinking $3000 in daily profits is the market equivalent of minimum wage?
It’s amazing when I think back at those days and revisit the thought processes I had. Today, if I encountered a similar 25 year-old punk trader displaying these same characteristics, I’d smack him upside the head and yell at him to gain some friggin’ perspective!
Comparing yourselves to others is a sure recipe for failure. Yes, it can be good to observe how others are doing and use that knowledge to gain confidence in knowing what is possible. But the minute you’re measuring your successes or failure against anybody else, you’ve lost control. You’ve given up your self-worth to someone or something that is irrelevant and will always be one step ahead of you. In trading, investing, and in life, there will ALWAYS be somebody who is achieving what you want, but doing it better. There will always be a trader making more money than you, a friend with a nicer house, a college buddy with a hotter wife/girlfriend than you, a colleague with a cooler car than you, a neighbor going on better vacations than you.
None of this matters.
Measure your wins and losses against your own metrics. Stay the course. Set your own goals and achieve them. And then set more goals.
Envy has no place in building your simple, minimalist approach to the markets. Avoid it all costs.
For more Enemies of the Minimalist Trader:
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Sean McLaughlin - Editorial, Curation, & Investor Relations Solutions at StockTwits. Also, former Member of the Chicago Board of Trade who trades his own account in Boulder, Colorado. More »
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