Jec: So a brief bit about me before we start… My name is Jec, or JT. I’ve been trading in the financial markets for almost 10 years now professionally. I mainly trade futures, megacap equities, and options. J, thanks for the time today, let’s jump right in.
Most of your community no doubt knows your trading habits but for those new readers, where might you say your trading interests mostly lie? And what styles or instruments are your favorite?
JTrader: Hi Jec, trading is about passion and when we have a passion, we simply need to practice. This is the best formula that I adopted in trading. Trade what makes you feel good, what inspires you and also what you are able to trade at best. I day trade stocks, small caps, big caps, futures and options.
Jec: What most of the readers probably wouldn’t know, the first time I reached out to Jtrader was actually for a close friend who was getting into trading. Analytically they were doing great, but the psychology was something they were struggling with. It’s not something I have much experience helping out with, but it is something you educate on often and I was able to rely on you.
Psychology is a very important concept that you discuss frequently J. It’s obviously a massive topic but right now what stands out most in your mind regarding psychology?
JTrader: If we would trade 100% systematically, it means we would be bots and bots don’t fail. They can lose money but don’t fail because they will simply execute instructions that humans provide them.
And this is why traders fail because we cannot be 100% systematic in our trading. We are human and humans are a mix of logic, emotions, contradictions.
Jec: I completely agree. Knowing how to have losses and red days is a rite of passage in this industry, on that note…
P&L and mindset
How much do you think P&L plays into the mind of newer traders as they try to navigate this world?
JTrader: Today I was mentoring a trader and one of the errors that he does, is that he focuses on P&L. This is one of the biggest mistakes that a trader can make. It is a common error. Don’t be a slave to your P&L as money will come ONLY when you trust your strategy.
Jec: It really shows how having a strong peer or mentor as a soundboard in this industry can help keep our expectations and goals in check.
How to deal with losses
For me trading has always been analytical, a profession of probabilities. Losses are going to happen but good risk management and reasonable expectations help compartmentalize that. As a mentor to so many newer traders, what’s something you’ve seen in how they deal with losses?
JTrader: We cannot prevent losses because every system out there will give you losses. What we can control is how we can react to losses. The distinction between a beginner and a professional trader relies on this, the difference in accepting a loss and being able to reset and move on.
Jec: That ties into what you said above, we can’t be robotic but we can definitely be mechanical! One of the things that we have in common that I noticed during one of your Bookmap webinars is we both have strong interests outside of trading, in this case physical fitness.
Trading and sports
Do you think that’s helped to keep you grounded in your trading? Any specific things that you’ve found work better for you personally? (like lifting before or after the markets)
JTrader: 80% of millionaires played or have competed in a disciplined sport such as; martials arts, weight lifting, or similar. This discipline plays an important role as it imprints on your mind and creates good habits that are necessary in trading. Think about this, you start weight lifting and on the first day in the gym you cannot bench 350 lbs. If you were to try, you would not be successful. Now, if you train for 12 months and each day you gradually raise your limit in weight, you will create more muscle mass and gain strength. This process/routine is not only creating physical changes but also mental. You are gaining experience in weight training, you are becoming more confident, and eventually you will be able to bench your goal. Now relate this to trading. You need a program. You need to practice. You need to gain experience by following a plan and setups. When you repeat them on a daily basis you will become more confident. You then can add size and eventually you will become a successful trader.
Jec: J, we’ve talked about work ethic both in and out of the charts. I know you put a lot of time into your preparation as well, we chat in your YouTube pre-market live while we’re both doing some of that.
One question I’ve been asked a lot is, are there any books I’ve read or would recommend to newer traders?
Jtrader: I can tell you that there is nothing better than experience but books that I would recommend are the ones of Mark Minervini, Larry Williams. And what about you Jec, which books were important for you?
Jec: For me it’d have to be Option Volatility and Pricing by Natenberg, that’s what brought me to the trading world and started my journey many years ago.
Jec: J, I want to thank you again for your time. I also want to thank the readers. JTrader posts weekly blog updates.
If you have any questions you’d like me to ask JTrader you can use the #askJTrader on twitter or submit them directly to J or Myself on Twitter or Discord.