21). You started small, right?
22). Ultimately, you’re staying consistently in the green, correct?
23). Then it’s time to scale up. Slowly does it.
24). Why the whole spiel about starting small? You make your biggest mistakes in the first seven years.
25). Hopefully, you don’t repeat a mistake once it has happened, and once you’ve learnt from it.
26). However, mistakes are good, because they teach you. Nothing else can teach you with incorporation into DNA. Mistakes can.
27). No university can teach you. No books. No professor. Play the market, make the mistake, and learn.
28). A big break early in the markets is a recipe for disaster. More likely than not, you’ll blow up later, when it matters.
29). The best possible way to scale up is using position-sizing as delineated by Dr. Van Tharp.
30). The good thing about position-sizing is that it makes you scale down, when trading corpus goes below par.
31). Day trading takes up the day. You’re exhausted and are not able to do much else.
32). Short-term trading also keeps you riveted to the terminal, mostly.
33). However, position trading and longer time frames keep you in the line for whatever else you wish to achieve.
34). Market TV makes it a video game. Switch it off.
35). Trading with targets caps big-win potential.
36). When you trade, you trade. You don’t invest.
37). Successful trading means buying high and selling higher, or…
38). …selling low and buying back lower…
39). …as opposed to successful investing, which is buying low, not selling for the longest time, and then selling for a multiple.
40). Read points 16 to 19 again.
How does one discover the missing ingredient?
By chancing it.
One keeps trying different mixes…
…till something hits.
The hit is then fine-tuned…
…such that it is reproduced again and again.
Once the hit can be reproduced at will, one has got the strategy all together.
A successful strategy is then let loose.
At first it is on manual.
Ultimately, it comes on auto, or semi-auto, whatever best is possible.
There has come and passed a stage, when this same strategy has not been winning.
What is the difference between the mix of that stage and the current – winning – mix?
It’s some kind of a twist you’ve discovered.
Something you are adding, or doing differently.
This something is making the strategy win.
You’ve kept trying.
You’ve been in the field.
You weren’t away from the field, ruminating.
You were getting action.
Losing action, but action.
Losing action has huge educational value.
It tells you how not to do it.
You keep twisting, fitting, tuning, upon loss.
You chance new stuff.
Eventually, something clicks.
You develop that something further and take it to the nth.
Where does that leave you?
You have to keep chancing it.
There is no way around this.
Make funds available for the R&D.
Have the courage.
Don’t be afraid of a hundred losses.
Winning is around the corner.
I don’t wish to add to my repertoire.
It has reached some kind of saturation.
There’s no limit to how far I can go within my repertoire.
However, it is not comfortable with strategy addition.
Did you just have this dialogue?
It’s good you did.
While you start out in a field, you’re developing it.
There needs to come a stage, in a while, where you have exactly identified, that you’re developing this, this and this further. Nothing else.
Once you know what the exact game is, all your focus is required to take it to the nth level. What that n is going to be is up to you, again.
Bottomline is, after a point, know your game.
This is the game.
This is what you are scaling up.
That, that, that and that you are discarding, or have discarded.
You need to reach this point within a reasonable time-frame.
Then comes the next step.
Pray, what might that be?
Before embarking upon scaling up, that what remains in your saturated repertoire – automate it.
What have you.
Use any means for automation.
Anything that’s legit, and which works.
Automation is a huge blessing if used properly and after having tied up all the loose ends.
If implemented in a hurry with sieve-like loopholes, it can even take you to the cleaner’s.
Implement automation in a justified and sure-shot fashion.
Do you know what’s going to happen now?
You have created a situation, where scaling up means just punching in an additional 0 in the right corner, before the decimal point.
After a while, the complete field will be on auto.
If you’re wise, you won’t scale up beyond your sweet-spot.
Because obnoxious scales come with obnoxious problems.
Anything beyond your sweet-spot…
What is your sweet-spot?
That only you can discover.
So what now is the exact status of the field?
Your repertoire in the field has reached complete saturation regarding strategy and scale. It is on full auto. It is adding to your well-being without you batting an eye-lid.
However, where does that leave you?
Is that even a question?
There’s so much to do in the world.
Discover a new field.
Develop your new repertoire in this field.
Take it to strategy saturation. Automate it. Scale it up. Take it to the sweet-spot. Wean off the scaling up. Move on.
What a life it’s going to be for you!
There’s expenditure and there’s expenditure.
Let’s say you start some work. It can be market-related, for all I care. What do you do first?
How do you prep?
Studying up. As long as I can manage.
Courses, workshops, the deal.
Naehhh. I try to keep it national though.
Haven’t required it till now for market work.
Ok. What happens next?
I hit the market concerned. Low-key at first.
That’s when you make the most mistakes. That’s why.
I see. Motive?
I want to learn from my mistakes and not repeat them.
Rather than from an instructor?
Of course. This is the market, remember. This is about you. Not about the instructor. This is about knowing your own shortcomings related to a particular market, and about adjusting and fine-tuning yourself to the market to trade it optimally. This is about fitting the market concerned in a tailor-made fashion into your own life without disrupting your own life.
Wow! Well, then, congratulations. You’re a prime candidate for doing it the plain vanilla way.
Is there any other way to do it?
Oh, there’s the fancy schmanzy one.
Kindly describe it.
Well, it mostly entails unnecessary expenditure along with necessary expenditure. There’s more unnecessary expenditure though.
One is normally too lazy to study up. Or, one doesn’t have the get-go in oneself to approach the subject on one’s own.
Sure, can happen.
One flips from instructor to instructor in search of the holy grail. Expensive software, international trips, five-star hotels, the whole shebang. In the end one has spent a bomb. To end up trading the instructor’s perspective. Finally realising that the markets are about oneself, and unless one is trading one’s own perspective, one is sure to lose. Or not realising this (!) and continuing to flip instructors and instructions. Finally burning out and giving up on the markets.
Sad though. All necessary software is available free of cost on the internet. One can do inexpensive internet courses to widen one’s horizon. These can involve one-on-one instruction too. Video-conferencing. File sharing. Threads. Assessments. The works. Live-market training. You name it. All travelling and extra expenses cut out. Few hundred dollars for the whole course.
I already acknowledged your plain vanilla acumen. I’m just trying to tell you that most others prefer the fancy schmanzy way.
I prefer to stay in the market and not burn out. I’m in the market to make a steady income.
Well, that you will, my dear friend. The plain vanilla way doesn’t promise any hype, but it does promise income.
Why…is it time?
And, time for what?
It’s time to go for the jugular.
There comes a time, when, after working hard, struggling, doing the whole jig, the rigmarole, you achieve your basics.
Well done. Pat on your back.
Then you secure these basics.
If you can.
Wonderful. More pats.
Worry factor is now out of the equation.
Your family is secure.
Food, safety, education, all basics intact.
Fantastic. You deserve an award. Not that anyone’s going to give you one. Frankly, nobody could care less. Never mind. You know in your mind that you’ve achieved a milestone, and that’s enough for you.
Whats the next step…
What is this jugular?
Call it what you will.
What does this mysterious thing do?
Better question is, what is it capable of?
You’re looking to multiply your networth.
This is different.
Because it is coming as a logical conclusion, and not as a first-step with no experience and no secure basics.
You’re keeping your head-earned basics secure.
Nothing is touching these. You’ll be surprised at the kind of courage secure basics give you to act further.
Next, you’ve identified an area where your skill-set can be leveraged into huge profits with minimal risk.
Specifically in the market, these areas are abundant.
So what exactly will you be doing?
Playing on a minuscule portion of your net worth. Let’s say not more than 2 %.
Position-sizing. Scaling up upon profits. Scaling down upon losses.
Overcoming your demons.
Going for the jugular.
Your systems are in place.
Basics are going. Life basics. Family basics.
Then you’ve got your income basics. They’re safe. They generate income. This income goes towards comfortable upkeep of your family. Some of it is saved.
Your investment portfolios are firing. Savings have built these up. You don’t touch these, but keep adding to them upon opportunity.
You’ve just finished implementing all your trading systems.
Some of these are on auto-pilot.
The other ones demand a little of your time each day.
They keep you sharp and all there.
Just fifteen to twenty minutes each.
Skin off your teeth.
You tackle them with your bed-tea.
In other words, you are set as far as being income plus plus plus.
Now you need to hold the line.
What does that mean?
It means everything.
It means no blow-ups…
…no crazy decisions that impact folios and family…
…basically nothing insane coming from you that will threaten your hard-earned situation or worse.
Holding the line means making sure basics stay intact…
…folios keep growing…
…and new systems keep developing that add to these.
It’s really that simple.
When you hold the line, your next step either maintains status quo or adds to you. Preferably, it adds to you.
However, the simpler something is, the more difficult it is to follow.
What are the demons that can slay you?
This stuff looks pretty harmless at first, but is enough to give rise to cracks.
…till you’ve either come back to your senses and filled and sealed them…
…or till they’ve destroyed you right down to beyond your basics.
Yeah, a full blow-up is never really far away, once cracks start to appear.
…while holding the line…
… you keep reminding yourself about what you’re doing…
…why you’re doing it…
…and that you’re never going to blow up, come what may…
…and that you’re going to keep holding the line, come what may…
…and that your next step is always going to add to you.