This is a little story I came up with to help show you the two worlds that traders live in.
Although Joe and Scott aren’t not real people (well … actually they are, but we’ll get to that in a moment) – the challenge they face is 100% real, and it’s what we all go through.
This is powerful stuff. It’s the stuff I wish I’d known when I started, when I was struggling.
It’s the stuff that helped me get to the point where I made $33,000 in one week of trading.
But more on that in a bit.
You see, we’re all either Joe or Scott.
I’m one or the other. You’re one of them, too.
Which one? Read on, to find out.
But to start out … one of them makes ZERO trading profits. Not even enough to cover commissions. The other one is killing it. Making $1,000 a day. Or more.
So get comfortable. Relax. Get your favorite beverage, maybe some tea, and read on.
This is an example page. It’s different from a blog post because it will stay in one place and will show up in your site navigation (in most themes). Most people start with an About page that introduces them to potential site visitors. It might say something like this:
The One Thing
Recently I read a book by one of the most successful businessmen in the world. It’s called The One Thing. One of the pages of the book was so profound, I just stopped, and looked at the quote for like 10 minutes.
I’ll come back to that quote in a bit.
You’ll see why I wrote that quote – and why it’s so important – for you.
But first – let’s talk about Joe and Scott. And the big difference between them.
A Little Backstory
You see, back in 2000, my business failed. It ended badly. My business partner fled the country. I didn’t know how I was going to pay rent. Like a lot of other people – I was in financial trouble.
But … the silver lining (kind of good news) was THIS:
I knew this was coming.
I knew the business was failing. Most first businesses fail. It’s natural. I wasn’t going to spend time getting mad at myself for that.
Instead, I made a decision that totally changed my life forever, and it’s the reason I am writing this story now.
I didn’t take the safe path.
Like everyone else does.
I dreamed of an uncommon life. Just like the quote above.
I could have started looking for a regular job with a big law firm (I had gone to a big law school in the San Francisco Bay Area). I even had a standing job offer with a major firm in San Francisco – Orrick, Herrington & Sutcliffe.
I was almost 30 years old. Working in a law firm would have been a big salary.
But I wanted something different for myself.
So I took the risky decision.
The road less traveled.
Rolled the old dice, so to speak. LOL.
I knew exactly what I did not want: A Boss.
I knew exactly what I did want: To start a family, and have time with my children.
Oh, and I wanted to see the world. Tokyo, Athens, London, Paris, you name it.
Family and travel. That’s what I wanted. And no boss. Haha.
What’s weird is that I felt calm about it.
I felt like – I know I’m going to be able to do this. I don’t know why I felt like that. I think I felt happy that I had made a decision about what I wanted.
There is security and peace of mind in knowing what you want.
And what you don’t want.
So … I was happy. In a weird, poor kind of way. LOL.
But at the same time, I was asking myself … what was I going to do to make the money I needed to do those things?
I didn’t have a new business.
I didn’t have much savings – just a few hundred dollars.
It was scary.
And this is when I decided that I would try to trade for a living.
And … I started the very next day. And without knowing it, I acted like a complete Joe.
The JOE of Trading
During my first few weeks of “being a trader,” I went looking online for trading advice.
And I went to the bookstore and looked at all the trading books.
I knew three things:
- I needed money.
- I was not making any money.
- There were plenty of people offering “THE ANSWER” in my email inbox every morning.
It was 100% certain that if I checked my email in the morning, I’d have an offer to buy something from a “super profitable trader” who “had the best system in the world.”
… and so … with my American Express card (on credit) …
I started buying a lot of this stuff.
I started out slow, just buying an ebook or two.
Every week or so I would buy something new. A new “magic answer.” It was like taking a drug. Soon, I needed the next trading education “fix.” Each new ebook or lesson promised me a quicker path to doubling my trading account.
And at the same time, each new ebook pulled me in a new direction.
- I was plotting volume-weighted moving averages.
- I was putting one Fibonacci retracement on top of another retracement.
- I was doing crazy amounts of chart-watching time on the tick charts.
- I was watching the daily charts for a special “candle formation”.
- I was drawing support and resistance levels all over my charts.
- I was learning to do Gann analysis, Murrey Math, and “Fibonacci Time Sequences”.
- I was doing this. And that. And more of this and that, over and over.
In other words, I was running in place. Spinning my wheels. Learning but never profiting. Chasing the next thing that would make me a profitable trader. I felt like my head was going to explode. For sure, I did not have a real trading business. I was just consuming education. More and more education.
One famous “trading educator” at the time said, “Knowledge is power.” Only now do I see that he wanted me to buy his next course. That’s why he said it.
All this trading education turned me into a “trading education junkie.” No joking. There’s no way to sugar coat it. This is how most of us start our trading careers.
It’s how most people end their trading careers, too. The journey into the unknown world of trading can lead us down a path of further and further discovery, but then we realize that the constant thirst for knowledge leaves us poorer.
This process looks like this:
[the cycle of the losing trader]
Back then, any new opportunity that came my way caused me to drop what I was doing, and learn something new. And try it out. Then I would chase that new thing.
But I made no money. In fact, I was losing money. Fast.
It’s like a disease.
But I’m thinking … you already know that.
I’m not telling you something you don’t already know.
Your email inbox (and mine) show us a reminder that …
The new magic bullet comes out every week, maybe every day. It demands our attention. It calls out to us.
And before I knew what had happened, I was 11 months deep into learning but not profiting.
Big losses. Strings of small losses, too. But plain and simple: Losses. I started to wonder if anyone ever could trade for a living.
I was miserable.
What was my trading plan?
I had a new one every week. Or, in other words, no plan at all.
11 months lost. I decided to call that “a lack of experience,” and “the rite of passage,” and start making different choices.
That was 17 years ago, this week, actually. 17 years ago this week. Wow.
It wasn’t really my fault.
My intentions were pure. I wanted to provide for my family. I was doing the best I could. I was learning from the best sources I could find.
So I decided that in the next year, I would change.
I decided I would focus.
And my results would be different, I promised.
I was wrong. Dead wrong.
Oh, boy, did I focus. I focused on the short-term charts. I watched the 5 minute charts for 13-14 hours every day.
I got up at 2:00am.
I watched the charts until at least 10:00am, and then I went back again around 12:00 noon.
I felt like I was going to run myself into the ground. I was a discretionary trader, with a profitable system, and I was working that system for what seemed like 24 hours a day.
I plotted just one trading system on my screen. I was using “AmiBroker” charts at the time.
And I did. I went into the hospital for 21 days straight.
I had a fever of 105 for 72 hours. I was shivering all over. I lost 27 pounds.
My results at the end of 12 more months?
I was profitable.
But at what cost?
The cost of my health.
I had made about $17,000 in profits for the year.
But I was there in the hospital, sick as a dog, and I had a breakthrough.
I had an A-HA! Moment.
I realized I’d been acting like a Joe Trader. (Although I hadn’t given it that name yet).
… Right then, I knew that I had made all the money I’d ever make as a Joe. I had maxed out what I could do as a discretionary trader.
The Scott Trader
Scott does his trading COMPLETELY DIFFERENTLY.
He’s no Joe Trader.
Scott manages his attraction to “the next shiny object.” He’s not addicted to trading, or trading systems. He has control over what kinds of things he decides to learn.
Otherwise, he ignores all the new stuff that comes out.
He knows how to keep his attention on 1 thing.
He knows how to value his time.
He knows how to automate what he’s doing so that he is not working 19 hours a day. He knows how to stay out of the hospital.
This is what it looks like – this is Scott’s trading mindset:
Scott does not sit in front of the screen.
He does not take great pride in “how hard he works.”
He builds trading ASSETS … and then he leverages those assets over time.
In other words, Scott builds a trading business.
He builds a system that works … then he automates it. That’s an asset. It’s something that will pay him money every day, whether he looks at the charts or not.
He changes his system / asset … almost never.
He is not trying to prove to anyone how hard he works.
He doesn’t even tell people he’s a trader. He doesn’t care what people think of him.
He cares about protecting his asset – his trading system that makes money – above everything else.
So I decided, after those first 11-17 months of trading, to stop being a Joe.
And to start being a Scott.
Instead of trying to learn how to do everything related to trading, I learned how to do 1 thing. And do it great. And automate it as much as possible, so it would keep making money 24/7.
Let’s call that “Finding an Asset,” and by “asset,” I mean a trading system that can be automated and that will run with minimal supervision.
The second thing that I did, and this is just as big – is that I became ruthlessly focused.
I stopped paying attention to almost all financial news.
It was fun, sure. But it was massively distracting.
Let’s call this “Massive Focus.”
This shift in thinking is a game-changer.
It’s about finding what works … and then hitting the gas pedal. VRROOMM. It’s about saying, I know this works, so that’s what I am going to do, even if there could be something better out there.
Making money now. Not making money later.
And once I found what worked, I lost my curiosity in what might “work better.”
New trading systems stopped being interesting.
They were now a distraction.
I picked a group of friends that traded the same system.
Then I talked to them about trading. And no one else.
By the end of 2004, and the start of 2005, I was making more money than I knew what to do with. I had automated a carry-trading system. I had my first million-dollar year. And then another. And then another.
Then It Broke
In 2009, that 1 system that worked so well – it broke. I was making so much money from the brokers that they cut off my trading.
And … I lost focus.
I took a high-paying job as the Chief Market Strategist for a major U.S. fx broker (IBFX). I was the TV guy. I was the market expert.
It was a boost to the ego, for sure.
I was given 25,000 vested stock options (which expired worthless, but that’s a story for another time).
I got off track. Way off track. At that job, I started building trading systems again. I loved building new systems. I built a new system every 90 days. Or more.
And none of them worked as well as the one I had been using before.
That lasted for a horrendous 4 years.
During that time, I would have huge ups and downs in my trading.
I’d be up $100,000 for the month, and then take a string of losses. I was back on the discretionary trading hamster wheel. Spinning my wheels. I would make $100,000 or $200,000 by the end of the year, if I was lucky. But I was in front of the charts all day long.
And I was making myself sick again.
So I decided to go back to “being a Scott.”
And I built a system I could automate.
It took me 3 years. And more than a thousand hours.
But I did it, together with my best trading friend Wes (who, incidentally, stuck by my side for the entire journey, since the year 2000. A friend like that is hard to find.)
So I’m now running that trading system.
I run that system together with worldwide family of traders. We’re over 2,300 traders from around the world. Chances are, 2 or 3 of our family members live in your city.
8 of our trader are making $1,000 a day. And now, almost 50 of them are making more than $500 a day. Everyone is focused. It’s the greatest family of traders ever.
A Joe wants to learn everything about trading.
A Joe sees a new indicator and knows it will only work for a few months. But he can’t resist changing what he does.
Each new trading email is an “answer,” and a “reset button,” and a new life. Of course, that’s just a scam. It’s an illusion built by the massive Trading Education Industrial Complex – an industry built by big corporations and brokers to sell you stuff, get you to pay lots of commissions, so that you can keep spending money even if you aren’t making anything.
They try to keep Joe tangled up in the cycle of buying expensive new courses – $5,000, $10,000, even $20,000 – for as long as they can. He will never stop paying – until, of course, he runs out of money.
Scotts are different …
A Scott knows that trading for a living is a process. It’s not an event, or a one-time click.
It’s something he builds, and then deploys – and then manages.
It’s like he invests in, like real estate, and then he watches the value grow.
The road isn’t easy. It’s tempting to change along the way.
The Scotts of the world are determined. They are stubborn. They are hyper-focused. And they make all the trading profits.
A Scott wants to take good care of “The Goose that laid the golden egg.” He knows that changing his system often will bring losses.
There are Scotts all around us. From secretive hedge fund managers, to traders living out in the hills of Alabama with a satellite dish on the roof of their trailer (I met this guy, and he’s making $400,000 a year living on 40 acres of land. Just hunts and fishes and plays with his dogs, haha).
It starts with having the right mindset.
The mindset is this: I’ll do what works, and be relentless with my focus.
I’m sure you get the point by now.
But I will say this to end the story.
We all know a Joe Trader. They seek the drug-rush of a new “fix.” They buy a new “magic solution,” and if it works, they are so happy for about a week.
And when it bombs (which it does, because they aren’t focused) … they cry.
They get a refund. Or they try to. Most of this huge trading companies won’t give a refund.
Then they complain. They get online and they commiserate with other Joe Traders who are struggling.
Some Joe Traders want to change. They want to get out of the rat race. They want to get off the hamster wheel. But they don’t know how. They want to be a Scott … if they could figure it out.
There’s still hope for them.
The most successful Joe-Traders that turn into Scott-Traders are those that:
- Decide today to have a relentless focus on what works
- If they don’t have something that works, they figure that out, and then they trade that method with a group of hyper-focused, serious traders
But the MASSIVELY SUCCESSFUL Scotts – the ones making $1,000 a day and more – they have a radical way of looking at trading:
- They don’t spend their time trading, they trade so they can spend their time doing other things.
- They would trade ANY system that works, even if it’s not “the perfect system,” because they know there is no perfect system.
And here’s the weird trick:
By not caring about trading, not spending a lot of time trading, they make more money. A lot more money.
Being a Scott, in other words, gives you two things that most people want:
Time and Money.
It comes down to … deciding that you will take an uncommon approach, and find your ONE THING.
Are you a Joe or a Scott?
If you’re currently a Joe, then you have a decision to make.
But whatever you choose, know that it’s the right decision (for you).
Back when I was struggling, I didn’t know I was a Joe. I didn’t know what a Joe Trader was. I didn’t know how to think like a Scott.
Everything changed for me – my life got a heck of a lot better – when I changed my thinking. I became a Scott. That was my decision. It was the biggest decision I ever made. To focus. Massive improvement in every area of life.
I choose to be different.
To take the uncommon approach.
To do what works, and do it now.
To reject the status quo.
To not make excuses.
To change my world.
What about you?
Have the guts to roll the dice. Perhaps it’s time.