Category Archives: Psychology

25 Jan

Principles and Profits – for Commodity Traders

Larry Pesavento sent me a small pamphlet – written by (I think ) Roy Longstreet. It is written 60 years ago. I hope you will enjoy it:

Principles and Profits – for Commodity Traders ( by Clayton Brokerage Co.)

There are certain truths that have been with us since the beginning that form the foundation for action. They cannot be ignored. Commodity trading is on art. It can be mastered by anyone provided he is willing to pay the price in time and concentration. Each of the following ten principles must become a part of one’s personality. Each principle must become a habit in living.

SELF KNOWLEDGE

Whatever success I achieve will be the result of my efforts. The help I receive from others will be as a molehill compared to the mountains I must move myself. I must prove that I can endure the life of a trader. It will not be an easy lot. The rewords of success will be great because so few succeed. I must overcome obstacles to success because victory comes only after many struggles and countless defeats. I cannot regard myself as a trader until I have been exposed to knowledge and experience. I will become what I think about. My thoughts will determine my habits. I should form good habits and henceforth become their slave. I am a unique person. Nobody has ever been like me. I have talents that others do not have. It is my privilege to develop them to the utmost. I will abandon vain efforts to imitate another. I am a tree. My wealth is the vine. The vine can grow no higher than the tree. I have limitations, too. These I will recognize and learn to live with. I can learn to be content and also achieve victory. There is only one person I can depend on for success – myself. The only thing I can expect from others is that they wish me well. When I blame my failures on somebody else, I am a complete failure.

SELF CONTROL

I will master my emotions. The market will add to my emotional problems. After victory there is a tendency to overact. After defeat the tendency is to underact. I will recognize these human weaknesses and overcome them. Each day I awake with moods different from yesterday. One day is sad; the next is joy. There is exultation and depression. These can do me injury unless controlled. My secret of control of self lies in my ability to force my actions to control thought. I will exercise. Walking stimulates positive thinking. Sadness vanishes with increased circulation of blood.

When I feel inferior, I will buy a new suit. When defeated, I will eat o good meal at a fine restaurant. When I fear, I will act and fear will disappear. When I feel bold, I will remember past defeats. I will regard discipline as my greatest friend. Horses and traders hove one thing in common – neither are worth much until broken.
No man reaches the peak by doing what he wants to do, the way he wants to do it, when he wants to do it. Only those who do what must be done when it should be done reach the pinnacle.

ACCEPT COMMODITY TRADING FOR WHAT IT IS

Commodity trading is a contest.Skill counts. Knowledge is necessary, but it is not sufficient. Courage, too, is needed. Commodity trading is high-risk speculation. It is possible to be right seven times out of ten. Some of the big winners are wrong seven times out of ten. It is possible to make a great fortune quickly. It is also possible to lose all quickly. Prices do not always act in o rational manner. Sometimes the market pays no attention to value. There is not much that con be said about commodity trading with any degree of certainty. Everything must be qualified with maybe, perhaps, probably, potentially, etc. The one sure thing is that commodity trading is war; and to the victor belong the spoils.

PICK BIG MOVES

The one important thing that commodity trading offers that makes it all worth while is the opportunity to make o lot of money with a little. I must be alert to pick the big moves. They
will not always be forecast. They may start unnoticed. They depend in part on luck. The sequence of fundamental events occurs rarely. Each day I will look for the opportunity where
I can multiply my fortune a hundredfold. When I find the market, I will apply my skill to take full advantage of the opportunity, should it develop, and protect myself should it not. The greatness of my goal will not hold me in awe. I may stumble many times before it is reached. This will not concern me, for I know that all men who achieve stumble often. I am not a sheep that follows others. I am myself – a man. I will build castles in the air. That is where they belong. Then I will build foundations under them.

FACE FACTS

Substituting hope for fact is the greatest gamble. It leads to wishful thinking. Bias is the greatest of pitfalls to a trader. One sees things he wants to see – sometimes when they are not there. I will hove the courage to face facts even though they cause me pain. Each day I will see the market as it is – not as I hoped it would be yesterday. I will know my position each day so that I may close out losing trades and hold the winners. I will accept the verdict of the market, even though it is contrary to my expectations. I will not be like the ostrich that sticks his head in the sand and hopes that adversity will go away. I am a man. I will face facts.

ACT

I cannot succeed and at the some time escape the hard realities of trading by daydreaming. I must act. If I act, my mind becomes heated and the job will be completed. If I hesitate, I will only become confused. When I am afraid to act, I will act. Then fear will disappear. All my dreams and plans are nothing unless followed by action. When tempted to procrastinate, I will gain courage by action. I will not avoid the tasks of today in hope that tomorrow will change my fortune. My actions may not bring me success, but it is better to act and foil than not to act and flounder. When I om tempted to quit, I will act. That is the only way I con be sure of being in on the big one. The market will not wait. While I dolly, opportunity posses me by. There is a time to do the right thing in the right volume. When confronted with losses, I will not hold on until my capitol is depleted. I will act to conserve my capitol and my will to win. When opportunity knock, I will be ready, mentally and financially, to act. I will be like the good general who never loses all of his army and who always takes full advantage of every opportunity.

MANAGE MONEY

My money is my army. It has power. The more I have, the more power I have. I will take steps to manage my money. It must not manage me. I will not trade just because I hove money. My object is to trade to make more money. I must always regard what I have as being more TEXT MISSING FROM PAMPHLET

LEARN TO LAUGH

As traders, if we do not learn to laugh, we can say with Lincoln, “My heart would break.” Traders ore bruised souls. Try as they will, they make mistake after mistake. What does one do with his mistake? They are serious. They cannot be token lightly. One learns from them and forgets them. If I am to succeed, I must learn to forget. Unpleasant truth must be made invisible. Anything that reminds me of errors must be obliterated from my memory. If I can re-establish a favorable image by Achievement, I will do so. But nothing must be permitted to be a millstone around my neck in my pursuit of victory. Therefore, I will learn to forget those unpleasant truths which I cannot change.I will laugh and my burdens will be lightened. Most of all, I will laugh at myself, for am I not most comical when I take myself seriously? Everything that man does looks amusing from a distance. I will learn the great truth that never changes – that this, too, shall pass. When heavy hearted with unbearable losses, I shall console myself that this, too, shall poss. When men offend me with disrespect, I shall laugh as I remember Henry Ford, Edison, and Pasteur and how they built success on failure. I will laugh at my failures and they will vanish in clouds of castles I build in the air. I will laugh until others laugh, too. Never should I become so important, so wise, so dignified, so powerful, that I cannot laugh at myself and at the world. I will laugh because, with other traders, I am a bruised soul. It is the only way I con find happiness in a world filled with people who can be made happy because I laugh.

07 Apr

When Everything Goes Wrong

The next time you go through a tough period in your trading, and you are thinking about taking a break, do me a favour: please read this brief post.

I have a question you need to consider. Which one of these two scenarios do you closest fall into?

quote true adventure begins-when everything goes wrong

Scenario 1:

You have been trading like a man on fire, and you have very quickly built up your trading account. Maybe you even doubled the account or quadrupled it – maybe more. The market environment suited you, and you were able to capitalise well on the market movements. Yes, you did have losing trades, but it didn’t bother you. You were in control of your trading. You took the losses and you did your best to let your winners ride.

Then from one day to the next day things changed. It started off slowly. The peak of your account was behind you, and you seemed to struggle to read the market well. At first it was just a normal drawdown, but then it turned ugly. You had a really bad day or bad week, and it only stopped, when the day ended, or the week ended. You lost a significant portion of your gains. You were still up, but you were far away from that equity peak you were so fund of and proud of.

The next day or the next week you were back in the saddle, and you felt ok about yourself. You realised that losses are a part of the trading profession. Yet somehow you could feel yourself placing trades that were bigger and more desperate than previously. It was more of the “hope” kind of trades than trades based on sound technical or other considerations.

It wasn’t long before you continued where you left the previous day or previous week. Now you are very unhappy with yourself. You have realised that you need to stop right now.

Is this where you are?

 

Scenario 2:

You have been trading with some success but you also had your fair share of big losses. You have perhaps traded well all day only to lose it all on some final trade of the day. It may be that you have traded well all week, but on that Friday afternoon, you gave it all away.

Your account is below where you started, and you jump from one market to the next, without really knowing what you are doing. You feel ill equipped, and you don’t really know what to do next.

Is this where you are?

 

Moving forward

I have losing periods too. I go through these periods with a sense of “regret”. I know intellectually that they are part and parcel of my trading life. Nevertheless it always seems to catch me by surprise when it happens.

It shouldn’t surprise me. There will be times when I am trading like a demon, and there will be times when I am trading like Blind Freddie.

However, the two scenarios above require a different approach. I accept you may not fall in either category perfectly. So I recommend that you read the solutions to both situations, and you see what you can take away from the suggestions?

 

Remedy for Scenario 1

You need to step away from screen for a day. I recommend this because staying in front of the screen can tempt you into trading.

You need to ask yourself: Is there anything you could have done differently?

If there is, then you need to do something about that. If there is nothing you could have done differently, and you have a good methodology, then take a break. The market will be there tomorrow. Right now your body is chemically not in balance, and you are going to experience some very powerful thoughts about getting back to “the peak”. You will get there, but right now, you need to step away until you feel like you are in balance again.

If there is something you could have done differently, it is most likely one or more of the following reasons:

  1. You overtraded and you chased the market.
  2. You were so desperate to catch the next move that you got whipped on the long side and the short side, or you were overtly bullish even though the market kept stopping you out.
  3. You traded too big to make up for the losses you made previously.

What I recommend you do is as follows:

Get the data from the period where it went wrong. Print out the day charts for the markets you traded, and plot the trades on the chart. This will give you a visual representation of what you are feeling: the loss. You will see the loss for what it is.

So what is the loss? Your particular loss could have been just like any of the other small losses you have had, and that you gave no thought to. Yet somehow this loss or these losses cost you a lot more. You either traded too big or you gave the trade way too much leeway.

Whatever the reason, make sure something good comes of it. There is nothing like a little book of “big mistakes” to remind us of the ever-lasting truth in the markets: We are on our own in the markets, and either we learn from our mistakes or we don’t. If you don’t create a little memory of this “un-memorable” moment, then you risk the lesson will be forgotten.

 

Scenario 2:

I was once in Scenario 2. I moved away from this when I got some trading techniques that worked well. I recommend you spend some time working on two matters:

Develop some solid entry techniques by doing your own studying or pay someone to teach you some solid techniques. I teach solid techniques, but this is not a marketing pitch. This is a suggestion to the path you need to take from here. There are plenty of avenues to take when it comes to education.

Whatever you do, please make sure they suit you. You need to work with techniques that fit your style of trading. Mechanical entries are great like that because they tend to be “time scalable” to suit a time frame that fits you.

The second thing you need to consider is to work on yourself. I have written a trading psychology manual on this subject. The point to take away from this (irrespectively of you are reading my manual or say the book by Mark Douglas about trading psychology) is that we often make the best trades when we are in perfect balance, and we have a clear idea of what we are trying to achieve.

When I am in my most balanced self, I trade well because I am patient, and I am flexible. If I lose one of those two traits, I tend to not trade well.

I hope this will help you. If I can help you any further, then please drop me an email using the form on the contact page.

Kind regards

Tom

Tom Hougaard

16 Feb

Your Mind Is Your Enemy – Part 2

When I made the decision to fast and go raw for a month, I immediately received a mental boost. It was a curious sensation. It felt as if I had already achieved my goal, and somehow I had already received my reward. However, once the fast had begun, and I got through day one and day two, I learned something very important about goal setting and time.

(I suspect that) Most people never factor in time when they make a plan. In my case I experienced the concept of “time” of a 30 day fast in a matter of seconds. Not for one moment did I stop to question how long one day is, when you are not eating, let alone a whole 30 days.

Eating is the one constant in our lives. We may not think about it, when food is abundant around us. If you take away food, as you do when you fast, you quickly realise how big a role food plays in your life. Food comforts you. Food brings you together with family, and with friends. It binds you together, and it sets the scene for nourishing not only body but also mind.

When you strip away that factor, as I did voluntarily, you learn about time. When people around you eat, and you don’t, time pass very slow, especially if you are hungry. By drinking the juice I was able to carry on not taking solid foods, and I was able to keep focused on my goal. The juice nourished my body and my dream of fasting for 30 days.

However, it was TOUGH going, and it was a lot tougher than my mind could have imagined when I was considering doing the fast. I made an important realisation:

When you set a goal for yourself, you get the reward twice. You get the instant reward of imagining the successful completion of your task and achieve your goal. You also get the reward again when you actually achieve the goal, and THAT IS THE DANGER.

Most people are satisfied just to talk about it, and receive the chemical brain boost it gives them imagining the achievement of their goal. For most people they never realise that this is the danger. The mind has cut out all the hard part and jumped straight to the goal line. It has stripped away all the pain, because it is wired to make your life as painless as possible.

Think about it a moment: Have you not made resolutions that you failed to commit to? When you made the resolution, did you not feel a boost? Did it not make you happy to think about stopping smoking or getting up at 5am every morning to go to the gym, but once you started the actual process, the fun quickly disappeared.

I wonder if this is the reason why so many people make promises to themselves, which they never fulfil: because they receive a bodily euphoric high by conceiving the plan/the dream/the goal, but to actually achieve it means you have to live it minute by minute, hour by hour, and day by day, until it becomes a reality, and once the bodily euphoria wears off, there better be something very compelling to look forward to, to drive you forward in the face of the mundane repetitious run-of-the-mill every day experiences we all go through.

One of the great motivational writers and speakers of the 21st century is Anthony Robbins. He has written bestselling books such as Unlimited Power and Awaken the Giant Within.

I have had the pleasure of attending two of his marathon weekend seminars together with 10,000 other delegates. It is quite an experience to witness so many people being reduced to single-minded power-houses for the briefest of moments.

It is now clear to me that every one of us truly have the seeds of greatness within us, and it is an incredibly intoxicating feeling to be reminded of how great you really have the potential to be. I don’t wish to trivialise Tony Robbins contribution to the self-improvement movement, BUT he is simply tapping into a latent trait we all possess: greatness in our chosen endeavour. He is reminding us of our true potential and he is taking credit for it through the process of association.

I am being unfair to Mr Robbins, because he is doing his best to give us the tools to achieve the greatness. However, I wonder how many of the 10,000 cheering hot-coal walking bombs of inspired energy actually achieved what they decided to over that weekend. I suspect we are talking a fraction of them. I guess that of the 10,000 people in that seminar, only a handful of them did what they planned to do.

Why is that? I go back to my fasting and raw food experience. It was hard work. I had to compromise. I had to dig deep and I had to put up with discomfort, a lot of it, and I had to remind myself constantly that this euphoria I had experienced when I conceived the idea of a 30 day fast, well that was my mind celebrating – appeasing me – giving me a reward and then saying “go back to where you were – we don’t like change, do we – it is hard work to change – it means pain and I don’t like pain“.

And this is where 99.99% fall by the wayside. The sad part is that they don’t really feel they failed either. For them (and I include myself in many of the goals that I set but never achieved) it was enough to set the goal, to imagine the outcome, to receive the chemical boost the body created in response to brain’s imagination, and to enjoy this momentary joy.

The chemical boost of imagining the outcome, to say the outcome out loud is essentially all the motivational speakers are facilitating to create success for themselves. Very few of them actually help people, not for the lack of trying, but because of who we human beings are.

Our energy flow along the path of least resistance, and this path is generally a path which requires only a modicum of effort, just enough to give us the feeling of achievement, but never taken us to the full potential. Again, it is the imagination of the success which gives us the greater thrill than the actual realisation of the success.

I decided to put my body to another test; something I knew would boost my productivity and my energy exponentially. I decided to get up every morning at 04:50am, and immediately go to the gym.

I knew what would happen. My mind would flood my body with “feel good hormones”, and I would feel like a million dollars, just from thinking that ludicrous thought of getting up in the middle of the night to go to the gym. That is the role of my mind: to make me feel good.

I also KNEW that my mind would say NO THANK YOU the very first time I set the alarm clock to 04:50am. And it did. It was so predictable. So when I rolled out of bed for the first time, I gave my thought patterns ZERO attention. I knew it would talk me out of it, if I listened. I was prepared to
combat myself and my mind.

What is the conclusion: be aware that your plans for a better future will create a sensation in your body which in itself can be addicting, and to most people is enough. Be aware that the moment you begin changing yourself, you will meet resistance, and it will be painful. If you know this in advance, you can prepare for it.

I knew day 3 would be painful during my fast, so I prepared for it, and I was ready when it arrived. I knew my mind would say no, when I first woke up at 5am, so I was ready for it. I knew not to read too much into the brain euphoria I received when I made the goal of going to the gym.

And trading? I knew my mind would congratulate me and flood my body with feel-good hormones when I decided to follow my trading plan, and let my winners run and cut my losses short. Of course it would do that.

And I knew it would kick up a sh** storm the first time I wanted to do it in a real trading situation. I was prepared for it.

It seems to me that our mind is not always our friend. It occurs to me that the mind is the coding facility, the place where we install the habitual software, the habits that leads to consistency, which leads to confidence in ourselves, which leads to success, but once it has done the programming, we have to turn it over to the body, and execute. From then onwards, it is now our job to IGNORE our minds and let the body do what we set out to do.

It is a complex balance of body mind dynamics, where we have to almost become an observer of ourselves and our thoughts and action. One moment the mind is your friend, and the next moment it is the enemy, standing in the way of you achieving your goal.

Thank you for reading

Tom Hougaard

16 Feb

Your Mind Is Your Enemy – Part 1

This is two part article about why your mind lets you down on your trading goals, and all your other goals.

It is long-winded, but it needed to be. If you want to change your life, turn it around, be the success you know you can be, then read Part 1 and Part 2, and you will understand WHY your mind has let you down in the past.

I recently completed a 30-day fast/raw food. I fasted for 13 days and ate nothing but raw vegetables and some fruit for the next 17 days.

I learned a lot about myself and about 21st century man in that month. I learned we are absolutely addicted to food, and quite often we are not 100% at fault ourselves. However, the most important lesson I learned was why 99.9% of people fail at reaching their goals in life. We are addicted to pleasure and will avoid pain like the plague.

Before I reveal my insight, let me share with you how I came to that profound insight.

The day after Boxing Day, I went on the scale to weigh myself. I am 6”3’ and my weight should be around 14 stones, or about 88kg. The scale showed 15.6 or 99kg exactly. I know for a fact that it had been as high as 105kg.

I knew I was overweight. I knew I had drunk too much in December, and since I had sustained a knee injury, it had been completely impossible for me to exercise. The only thing I had done was to walk up and down the swimming pool, trying to strengthen the knee muscles.

I am not your average kind of guy when it is comes to health. I have studied alternative health for 19 years on and off. When I was at university I was a heavy smoker, and I didn’t look after myself very well. I contracted glandular fever, and my immune system was in a dire straight. I nursed myself back to health back then, and it was there my interest for natural health really started.

My first health book was by Harvey Diamond. It was called Fit for Life. It was a great book about food combining. I also studied natural therapies, and I discovered many great authors, past and present, who wrote about many diverse topics, but I won’t bore you with that.

In 1998 I had started working for an Investment bank and my career was taking off. One day my mum called me to tell me she was in great pain. She had been diagnosed with Myalgia Fibrosis. She could hardly walk, lie down, or sit up or do anything without having intense muscle pain.

At that point my interest in health had not diminished. On the contrary, I spent every Saturday and Sunday bicycling around to all the local 2nd hand bookstores to search for old health books.  I had learnt about macrobiotic diets, the Natural Hygiene movements, and probably most importantly, I had discovered the works of Edgar Cayce, “the sleeping prophet” from Virginia USA.

Inspired by his readings and his work I had started fasting from time to time. It was somewhat counter-productive, I admit, that I was still a heavy smoker. Nevertheless I suggested to my mum to go on a fasting retreat. It would act as a relaxing holiday while being in the care of two professional therapists, who had specialised in scientific juice fasting.

My mum had some doubts, but I persuaded her to go by promising that I would go too and support her. Two months later we were sitting by the pool at a private farmstead health community in Portugal, surrounded by spectacular apple and avocado trees.

The retreat lasted 10 days. The first 7 days were dedicated to pure fasting. There are many ways one can fast, and I have heard all sorts of definitions. This particular fast had a fairly rigid structure. We would meet in the apple grove in the morning for yoga, and once we were done, we would pick apples off the tree and go to the farm kitchen and juice the fruit we had collected. We would then proceed to mix psyllium husk into the juice and drink it very quickly, before husk swelled up in the juice.

The psyllium husk acted a broom in the intestinal tract, while the freshly squeezed apples provided some sustenance and acted as a detoxifier in our acidic bodies. It worked well.

During the day you would hang out by the pool with the fellow fasters, of which there were 10 in total. When you felt tired, you could rest, retreat to your own cabin and mind your own business. Basically you just relaxed for 10 days.

My mum emerged from the retreat a lot stronger and a lot wiser. She had stopped taking pain medication during the fast, and after the retreat she embarked on a much different approach to eating. She also sold up and moved to a warmer climate. All in all the retreat cured her of her ails.

The experience of the retreat never left me. Even during the height of my career as a TV analyst for a City brokerage, I was still quite a fanatic when it came to my food. I have to be honest though and say that it was quite a yo-yo approach to healthy eating and living. My days would often start at 5am and finish at 10pm, and there were times when I would eat whatever I could get my hands on, including McD and BK etc.

Then there were times when I would be overtly healthy, making my own raw food and bring it to work. Whatever pre-conceptions you have of people on a trading floor, let me tell you this: There were many on that trading floor, which obsessed over what they were eating. My boss for example never touched carbs, and he had completed the Hawaiian Iron Man challenge. Another guy was training to swim across the channel for charity. His diet reflected the calorie need for such a spectacular feat.

During 2013 I had a conversation with a fellow trader, and we got talking about addictions to food and alcohol. He asked me if I had ever fasted, and I explained about my interest in health and longevity. He told about the movie “Fat Sick and Nearly Dead”.

Fat Sick and Nearly Dead is essentially a movie about being lost and being desperate for change. The idea of people putting themselves through a huge challenge with a film crew following their every step is an incredibly powerful form of entertainment. It is entertaining to follow their trials and tribulations, and it is intoxicatingly inspiring as well.

Before we move on, I had to tell you about a little known documentary called “Fat and Back”. It is about a fitness coach/personal trainer in Australia, who grows disillusioned with some of his clients.

The clients blame him for their lack of progress. The also accuse him of not understanding what it is like to be fat. So he decides to set himself a challenge. He will over the course of 12 months increase his body weight by 50% and then proceed to lose it all again. He binges for 6 months, and his weight goes from 80kg to 120kg. Over the next 6 months he proceeds to go back from 120kg to 80kg. All the while the film crew is following his every movement.

Fat Sick and Nearly Dead is a slightly different documentary. Here we follow another Australian, as he embarks on a journey across the heartland of USA for 60 days, whilst fasting!

Joe Cross is a former futures trader, whose weight has ballooned to 140kg and he is “one cheeseburger away from a heart attack”.  His mission is to fast for 60 days. The film crew follows his every step and the movie is incredibly well made. You can watch it on YouTube.

I promise you that we will get to the point I set out to prove at the outset of this article. Just bear with me a little longer.

The paradox of Fat Sick and nearly Dead is that the hero is not our main character, Joe Cross. The real hero is the guy Joe bumps into at a truck stop in Arizona. His name is Phil. He is a truck driver and he is over 200 pounds overweight. The two men strike a friendship bound by their suffering of the same disease, Uticaria.

I was very inspired by these movies and I decided that it was time to use all the knowledge I had acquired in the last two decades and put it to good use. One thing I knew I didn’t want to do was to start on New Year’s Day. I wanted to start when I was truly ready.

I am not a role model for change, but I do know from experience that your chance of success is much better, when you are 100% at peace with what you are trying to do, and you feel good about it, and you can’t wait to get started.

Sunday the 5th January was my starting day. My goal was simple. Fast for at least 7 days and then move on to raw food for the rest of the month.

The first few days flew by. My energy levels were generally good, and if I felt tired, I would simply lie down and rest. The third day was tough. I had expected that. I have done a number of short fasts so I was familiar with the” third day” syndrome. Some call it the “hump day”, the day where you begin feel very hungry, and very tired. It passed by day 4.

By day 7 I was well on my way, and I decided to continue the fast. The second healing crisis I had was on day 10. It was very tough going, and I was struggling immensely to hold it together in my professional job as a trader. My energy was at rock bottom and I considered my options.

One option was to start eating again. I had gone past 7 days, but I felt there was more fight in me. I just needed to get past day 10. I decided to cheat a little.

I realised that my body was detoxing at a rate which caused me to have severe headaches and my energy was rock bottom. My body was working overtime on getting toxins out of my system, but when you don’t eat anything, you rule out one major source of elimination: toilet visits.

So I cheated. I “ate” large quantities of psyllium husk with ample of water. The next 24 hours were interesting but it had the desired effect.

When the relief came, it was absolutely amazing. It was as if my body had gotten rid of years of toxins in one “sitting”. I felt very strong afterwards, and my headaches disappeared instantly.

My sleep patterns up until day 10 had been very irregular. I was not able to get meaningful rest, and I often took to sleep during the day. However, after 10 and the experiences of day 10 and 11, I slept so well, and from then onwards I had no need to sleep during the day.

 

By day 13 I had lost nearly 17 pounds, or about 8kg. I had gone from 99kg to just below 91kg. I realised that if I continued with this rate of weight loss, I would go from overweight to underweight in just 30 days.

To compound the challenge and the dilemma of whether to start eating again or continue the fast was the fact that I had been summoned to an important business meeting, which I need would almost inevitably result in a social aftermath, such as a dinner or drinks.

I had no desire to drink, and I really didn’t want to break the fast either, but I accepted that my weight loss was much more rapid than I had anticipated, and I could really use some grounding ahead of the business meeting.

So on the day 13 I broke my fast.

My first meal in 13 days was a whole cucumber. I know what you must think. A cucumber is not exactly a culinary delight, but to me the cucumber is crunchy and watery, and that was what my body wanted. I wanted to chew something so badly. I didn’t have anything else that day but the cucumber. I felt strangely full on eating one cucumber.

On day 14 I had a raw salad for lunch, which was an amazing experience. From the onwards, for the next 17 days I had nothing but raw vegetable juice and salads. I did cheat once, on day 22, when I had some warm rice. The sensation of eating something warm again was out of this world.

Fruit vs. Vegetables

In the past I have always favoured carrots and oranges when it comes to juicing. This combination is simply so delicious, but it is unfortunately also very high in sugar. Yes, I know it is “natural” sugars, but the factual reality is that it is not natural. When you are juicing, you are separating the juice from the fibre. It means that you instantly metabolise the sugar, causing the body to produce insulin. This is exactly what I wanted to avoid. I don’t doubt that carrots and oranges are healthy in their natural state, but juicing isn’t exactly natural. So there is no point in making it worse by flooding your body with sugars at a time when you are trying to give your body a rest.

After I started eating again, I have lost another 4 pounds. This fast has been the best I have ever done, and I believe the reason is because I fasted only on very dark vegetable juices. Let me give you an idea of what I would juice in the morning:

3 large packs of Kale

2 whole bags of Celery

2 whole cucumbers

1 big lump of ginger root

5 whole lemons with only the yellow skin removed but the white skin intact

2 apples for sweetness

This is a powerhouse of a juice, and I would drink about 3 litre of this a day during the fast. I would always attempt to buy organic where possible. It was only the Kale that wasn’t always organic. I would always put plenty of ice cubes into the juice container, to stop the oxidation. I added the two apples for sweetness after experimenting with taste. Without the apples the juice would have been too dark green for me.

On day 6 I allowed myself a treat. I juiced a bag of carrots and two oranges with a lump of ginger. I then ran the juice through the Vita-Mix blender to mix the juices and the ice cubes. The result was a silky smooth juice, which had an amazing taste. Unfortunately this was way too much sugar for my body, and about 30min later I felt so tired I had to snooze on the couch. This was a clear indication to me that I should stick to the very dark raw green juices for optimal energy.

When I started eating again, I found a recipe online for raw chocolate brownies. Ah, the pictures looked so delicious that my mouth was salivating. I acquired all the necessary ingredients in the local health food store and set about making the brownies.

The result was nothing short of a food miracle. It tasted so good and obviously it must be good for me since it is raw. WRONG. It took about 30minutes before my body reacted, but it reacted with the same response as it did when I drank carrot and orange juice. You see, chocolate in its raw state is actually not great tasting at all. It is the sugar that brings out the taste. On its own it has a very bitter taste, and for the raw brownies to have an appeal it is loaded with raw honey.

I have two friends who are far more evolved on the raw food scene than I am. Both are in their 60’s and both have moved away from raw food. Their decision to come off raw food, despite the knowledge that raw food nutritionally is far superior to cooked food, was based on their experience with digesting raw matters. They found that their bodies functioned much better with an element of cooked foods in their diet.

I find the above paragraph incredibly life confirming. You embrace or reject or compromise but you do so on the basis of your own experiences. You listen to yourself, to your own body and mind, and you decide what works for you, what resonates with you.

Being a raw food enthusiast is not easy, even in an enlightened 21st century. My family is happy I have lost weight, but otherwise they don’t care to listen to me. Some of my friends think I am absolutely off my rocker, and that I should get my head examined. Some are curious, but generally will only enquire if they are sure no one is listening.

Then there are relationships. As you can imagine, there aren’t many raw-food guys or girls around. So if you are looking for a compatible mate, then you might find yourself alone on many a Saturday nights. During my fast I was invited to a birthday party. I solved that particular problem by knocking down 4 pints of Kale juice mixed with lemons before the party. It was a buffet, so no one really noticed I wasn’t eating.

My intention is not to be 100% raw. I know it would suit me to be, and I know my body would love it. I have seen what this way of eating has done to me in the short 3 weeks I have eaten raw: lost a lot of weight, gotten rid of a persistent mucous cough, toned up my body, gained a lot more physical energy, gained much greater mental clarity, eyes much clearer, skin glowing (I would say hair was shiny, but since I am follicle challenged, I would not know), and overall a much greater sense of well-being. Incidentally the live trading room that I run with David Paul and Larry Pesavento registered its best month ever while I was on my fast.

Has it been worth it? I could write another 2000 words about this question alone. I learned something incredibly valuable during my fast. I haven’t verbalised it before, so bear with me, if it seems a little long winded. I know I keep saying this, and I promise I will get to the point now, and how it relates to trading and to life goals in general.

To be continued in Part 2

09 Feb

What is holding you back?

I received an email in response to my trading posts over the course of the last week.

The email reads as follows:

Tom, can anyone really trade as well as you do and make this sort of money – £5,000! in one day.  Seems to me we can’t.  You have Esignal, probably a powerfull computer for fast execution (if not a bespoke trading computer), multiple sceens etc, a clear desk to concentrate, money to cover a rainy desk. I don’t think i would ever be able to trade like that.

The emailer is sceptical about whether he is able to replicate my trading result. He lists a range of possibilities as to why I am able to perform at this level and he and many others aren’t.

I like to answer each suggestion individually, after which I will reveal my secret.

The emailer asks if anyone can do it, because he doubts he can do it. I don’t know if ANYONE can do it, but I know that I am doing it, and I know others that are doing it. We have a secret that has not been revealed, but which I will reveal later.

Let me address the suggestions for my success:

Is it because of “E-signal”?

I don’t use E-signal. Neither does my colleagues who perform as I do. We use the charts from the brokerages, which are free of charge. So it is not the chart brand that is key to the secret.

Is it because of our powerful computer for fast execution?

I use a laptop to execute my trades. People at the trading shows and exhibitions always laugh at me because I have taped my laptop together with Gaffa Tape, after I accidentally threw it on the pavement. The laptop is a Toshiba which is now 4 years old. No, the answer to the trading results is not because I have a magic laptop or equipment, which is exclusive to me.

Is it because of my multiple screens?

I don’t deny that having a few screens help. However, you can buy a second hand screen for £50 or less these days, so I think this is affordable to anyone who is interested in trading. No, the secret is not the screen set-up or the amount of screens that I have.

Is it because of my clean and clear desk?

Hmmm, now I smile. I assume my desk hygiene is like everyone else’s. Often it is messy, and then I get into a fit of rage over the cups and plates, and I cover the desk in Mr Muscle, and I vow to keep my desk clean for eternity and onwards. However, my trading performance is NOT correlated or inversely correlated to the amount of dust on my desk.

Is it because of having money to cover a rainy day?

There are arguments for and against having a financial cushion to fall back on. I assume that we are an adult responsible audience congregating at TraderTom, and that no one would enter the trading arena, contemplating it as a primary source of income, without having done due diligence, having a setup that works, and having ensured that there is a cushion of capital to ensure essential expenses like food, rent, mortgages can be met during the start-up phase.

The purpose of trading is to provide a living for ourselves, first and foremost. It may be that we love trading and the business of speculation fascinates and excites us. Ultimately though it has to provide for our basic needs, pay the bills, save some away for a rainy day, and build wealth and security for our senior years.

So, does it help to have money in the bank, when you start out on your trading journey? Sure, for the purpose of transitioning from one profession to another, it does. You should not expect to make money trading the moment you start out.

Does having money tucked away help you achieve success in trading?

Actually, I don’t think it does AT ALL. You may disagree with me, but bear in mind I speak from the perspective of someone who has worked in the trading brokerage industry for more than a decade:

Having backup capital simply allows you more leeway to manoeuvre, more time to make it happen for you. It is however not a recipe for success.

I have seen it time and time again. People with funds come into the trading arena after a long and successful career in some other professional capacity, and they have a lot of capital behind them. They are motivated, and they believe they can make it happen. 3 months later, sometimes longer, often with a drawdown on their accounts, they give up. They give up before they really got started.

When I think back to my own start, I believe I had the right attitude to begin it, even though I was hopelessly inadequately funded.

I quit my job at JP Morgan with savings worth £13,000. I figured I had rent money for 18 months, money for food, and I could open a small trading account with Finspreads.

I lived in a room in a house, sharing kitchen and everything else with 5 others. I could not afford a computer, so I bought graph paper, and I hand charted the NASDAQ using updates from teletext. It updated every 3 minutes. CNBC ran from 6am until midnight, and often it was on during the night.

If you think I was an 18 year old student, I can forgive you, but I wasn’t. I was 30 years old, and it was a time in my life when most people my age have settled into a life of career and family. I had two university degrees, none of which has done me any good as a trader. I had left a major career job to pursue my dream of trading.

This leads me into my secret, and the secret of my trading friends.

Are you ready for the secret? There isn’t one secret. There are several:

The first secret is self-belief!

If you start off your email to me by saying that you probably won’t be able to make it, then you are most likely right. You have shot down your own hopes of success before you even got started.

If you think my success is because of my screens, or my charting package, or even the state of my desk, then you are wrong.

It is because of my drive, my relentless pursuit of my dreams, and my single-minded pursuit of what is important to me. THIS is my life. You live YOUR LIFE. What goes into it is up to you. I WILL leave this earth naked and battered. I have no choice in that matter. Neither do you. What I do while I am here is 100% up to me. The same applies to YOU. I want to make it count. I rely on no one but myself, but I often turn to family and friends for support.

You think it is all smooth sailing for me? There are days when I am so sick of this business, so sick of losing money days on end, so tired of putting on one losing trade after another. There are even days when I call a friend and say “that’s it – I quit. I am going to get a normal job”.  But I come back, once my body and mind has calmed down, and I sit down in front of the screens, once more, and I am ready to do it all again. You know why? Ultimately because I have an unshakeable belief that I can do this.

This belief comes from cultivation. You don’t buy belief. You cultivate it, you nurture it, you look after it, and you do everything you can in your power to help yourself. You develop relationships with people who want you to succeed as well. These people are rare, because most people want you to fail. They want you to fail, because it ensures that they don’t look inadequate.

Click here for link to YouTube video about your deepest fear

Another reason for my success is good old fashioned LUCK.

I met some fantastic people along the way, people who taught me invaluable lessons, invaluable trading setups, who stood by me, who nurtured me and supported me. Their names are forever imprinted in my mind, and I will always stand by them as they stood by me. I started TraderTom for this reason. It is my way of showing my gratitude.

Then there is grit. Do you know what the difference between me and so many others are: TIME. I am not smarter or better equipped than anyone else. I am not better endowed mentally or physically than anyone else. I don’t have a trust fund to support me. I don’t have any advantages over anyone. The only reason I am where I am, is because of the time I have devoted to training, to executing trades, to study, to push myself.

Moderation is for cowards. You want something in life – go after it and overdo it. No one EVER achieved anything in life through moderation. Not the Nadal’s of the world, not the Nicky Lauda’s of the world, and not this gentleman either.

I am here to help. That is what TraderTom is about. I am not a charlatan, I am not a show-off, I am not afraid to shout that I am a fool when I am wrong, and I am not afraid of failure. I am not afraid, and neither should you be.

So, Sundeep, if you want help, and you want to make it, then start by helping yourself. Go through my trades. I don’t post them to show you how great I am. I am posting them so you can see time of entry, time of exit, and you can learn from that. Study it, move forward. Then contact me.

I will leave you with some great words from the immortal Michael Air Jordan, which sums up everything I have tried to articulate in this article:

Success isn’t something you chase. It’s something you have to put forth the effort for constantly. Then maybe it’ll come when you least expect it. Most people don’t understand that.

– Michael Jordan

 

Have a nice weekend

Tom H