Advice from a gambler who’s beginning to learn to overcome an obsession, to become a real trader
Last week I touched on the addictive gambling side of trading and today I shall try and explain it a bit better.
As many of you know I’m a chef. Us chefs, because of the industry we work in, are pretty much adrenaline junkies. Why? Well we typically work 5 x 12 hours shifts per week on our feet. In those 12 hour shifts you have 2 feeding times of lunch and dinner where we get very busy for a couple of hours. The adrenaline levels sky rocket during those busy periods. So, in our working lives we have serious highs and lows, and that’s just in 1 day. My typical day will be in at 9am, 2 coffees, get the kitchen set, sort mise en place (prep for next service), sort menu, get slapped (busy) for lunch, clean down, eat, mise en place, tea, get slapped for evening, clean down, finish around 10, go home, chill out, lights out around 1am. This is normal. I’ve said this because it shows the rollercoaster our bodies go through.
This way of life actually leads to much wider problems. What do chefs do to replace this “rush”? Well most have some sort of addiction problem. I firmly believe it’s rife in my field and it hasn’t really been addressed. You name it, alcohol, drugs, gambling, porn, eating, anything really which gives heightened pleasure or that dopamine effect. Mine has been gambling.
This is a trading site so why are you reading about me and Addicts Anonymous?
The simple answer is the rush of adrenaline. You are sat at your computer waiting for a big data point. Let’s say NFP every last Friday. You know whatever happens there will be big volatility. You have those little butterflies in your stomach. The anticipation is building. You’ve probably got a position in this and it’s either going to be a big winner or a big loser. Bang. Numbers out. Price moving like Zebedee on pills, your heart rate is now well up and you’re taking in as much info as possible trying to make your decision long or short. You’ve been gambling and you’ve got your hit. Win or lose it’s a by-product. Your satisfied because your body has produced adrenaline.
Trading is very much an addiction. Like all addictions one has to control it. It’s always there for me and probably the biggest challenge in my life is to quell those urges to lump £5 per point on a 50/50 bet on NFP. This is something I’ve only recently been able to succeed with.
Why is this so important? Well, coupled with my previous article of evaluating risk, not gambling on trades to get a hit is in itself making me much more profitable. We seemed to have arrived back to the same word. Control. For some, it is so much easier to battle, contain and control. For others it’s a losing battle and those traders become just another stat in the 85% of losers in trading. Also, there’s no easy fix. Yes, it’s easy to write it all down like this in a methodical way, but when you’re the one sat there, heart pumping away, you’re the one who makes those decisions. One way to control it, I find, is actually not trading it! Waiting and being more calculating takes away some of that rush feeling. Easier said than done. Muppet boy here clicked a lumpy buy on Dow over the Fed in January (I think it was), and was offside very quickly. Bad trade and chuffing stupid. I wasn’t in control. I wanted in on the action.
From the stories I hear from grizzled ex-City boys who have been in the trenche,s they appear to have many of the same problems us chefs suffer from. I expect it’ll be the same for many people who are under duress in their full-time jobs. Doctors, nurses, teachers, journalists, farmers. You think about it, pressure comes in many different guises. It’s how you manage it that matters. Trading is no different at all. A successful trader will be able to detach and analyse with a cold emotionless eye. He might still lose but he has eliminated part of the risk.
Part of being a successful trader, one has to be brutally honest with one’s self. When you’ve identified the problem/s you can go about fixing it. When they’re fixed or controlled then one has taken a huge step to profitable trading.
Philosophy: "If you like gambling and adrenaline rushes in your life, do base jumping, not trading"
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This truly is one of the most honest posts I’ve ever read about trading.
I think we all have some form of addiction when it comes to trading, and that’s natural because it can be a very exciting thing to do.
I think there is a big underlying problem with most people who use trading as an outlet from everyday life, either to chase the rainbow or escape from something else. I’ve known plenty of fantastic traders who were degenerate gamblers. What they made in the pits, they’d spunk in the bookies at lunch time, so it can go both ways.
I think everyone should take a look at themselves in the mirror and ask themselves why they trade because if it’s to fill a hole in their lives, that’s probably not the right frame of mind to be in.
It’s a very complex situation and perhaps we don’t delve deep enough into it as a trading community.
Yep! Not a get rich quickly scheme. I switched full time trading back in October 2009 after trading alongside my 30-year+ career in construction management. But I had to do a deal with myself. If I cannot replicate my construction salary, I may as well go back to construction. So although I was on a very good package in construction management, it wasn`t so much that I felt the need to take big risks and so without reallising it, I cut much of the gambling element out of it if that makes sense.
One thing has always puzzled me though. I was once told by an employment agency friend, that very few ex-bank, hedge fund traders, risk managers or the like who earned similar salary levels to mine in construction management actually take up trading. Many qualified as plumbers, electricians etc to replicate their bank salaries that way and some drifted into the analysis world.
So! Is that because they became consumate gamblers, trying to make the big bucks, survive the bright young things and boxes coming along and failed?
There’s a world of difference between “brokers” and “traders” and many who have just ‘made markets’ to fill customer orders have struggled to make the switch into trading for themselves. A lot of that is due to the fact that filling orders is not trading. Yes, brokers can be very knowledgeable and can call a market to a tee, and make profit for their firm but there’s not the same pressure as when it’s your own money on the line and there’s not a big fat pay cheque coming at the end of each month. I learnt that lesson very very quickly when I made the jump from broker to going local. Virtually everything I thought I knew about markets was worthless.
What you went through jumping from your industry to trading is absolutely no different to my journey, and I would hazard a guess, to Kman’s or other good traders we know that are ex-market.
“there’s not the same pressure as when it’s your own money on the line and there’s not a big fat pay cheque coming at the end of each month”
this is the biggest pressure as a full time trader. you can be a hero for a year (or years) and all, but all it takes for you to screw up just once to destroy everything you’ve ever built.
Yep. It also why traders should have realistic targets. If you’re doing this full-time, every trade doesn’t have to be a for a car or jackpot amount. You can make a great living just scrapping a few pips a day or a week.
Earnings expectations are generally in accordance with the size of your account/abilities and how much, therefore, you can afford to risk.
Good piece Chef and I particularly like the last paragraph, short, sweet and to the heart of it. “brutally honest”. Ne`er a few words spoken so truly.
Terrific ! I will write some more later as I’m late for Blackjack night
FFS ?
Only you could write that and and get away with it!
lol.
haha 😉
GREAT POST
by the way. i experienced those too, i self control it by playing world of tanks, and taking some stress relieve medicine,…but that seem abit over now. LOL.
WoT eh? I’d own you on that 😉
NO WAY
Hahaha, I think we’ll need to discuss this in the room Q 😉
we should “discuss” it on the battlefield
Hahaha.
I was just reminded of when I walked into my grandson`s bedroom some time ago with my daughter in tow to see his new gaming rig. I asked my daughter if he would hear me if I said I just saw his girlfriend walking down the road hand in hand with a fine looking beast of a man, that his cat just got run over and that I caught syphallis of his girlfriend. he didn`t hear any of it. I got a proper earful from my daughter 🙂
Lovely article. One thing I’ve learnt is that proper trading is really boring, and if you’re having excitements on a daily basis, you’re prolly doing it wrong. I admit that whenever I get on a roll, I tend to give it all away (and more) on subsequent trades. The trick here is to recognise your weakness, and act on it before it overcomes you.
bbq fox? are you foxy in the room?
yes q!
Let meet if you come to singapore
That’s a great point Foxy. Proper trading can be really boring because that means you’re doing it right and being patient waiting for trades rather than chasing them. That is another sign that you’re trading for a “fix”.
great stuff Chef. I can say that whenever I have that “gambling/adrenaline” feeling while trading there’s a big alarm bell ringing in my head. It means I’m not in control, i.e. I’m f*cking up. When that happens I scale down positions and take some hours off. It used to happen frequently at the beginning, and it’s pretty much gone as of now.
ok I’m going to join Dubs for the Blackjack now ;-)))
Feeling that you always should be in something ( if you trade for a living ) , or chasing things are the worst habits to overcome. I opened far less trades than normal last week going into and including today.
I was waiting to get into a long EURUSD earlier in Asia. I had the level in my mind that I wanted to see taken out for me to trade long……..went out for lunch and completely missed it . I’m not one of those that sit there watching my phone, as I hate it when people do that to me in my company.
I refused the urge to chase it …If I had – It would have still been a good trade .
There again it could have so easily tuned out to have been a bad one. Self discipline can hurt sometimes 🙂
But without it you can find yourself in all kinds of problems….most of them of your own making .
Yep! Always another opportunity after missing a trade. Takes patience and we have oodles of patience don`t we H`ness.
Not if you place a glass of vino and a pie in front of me and tell me not to touch.
I have my limits yer know
man i really like your humility. it can be gambling or it can be part of being more greedy as well. most traders lose bcoz of greediness rather than gambling. You cannot lose everything on NFP trade even if you are on the other side. atleast i never lose, I go hedged into the event and that saves me from the swings
Hi Chef/David, yep this is pure gold, really well put into words, mucho respecto. 🙂 As you have so brilliantly pointed out transgress a very much wider field than just chefs & traders who feel it acutely. What the answer is well ……….. differing slightly bespoke for each person ie a battle probably constant for nearly all if truth be told, push comes to shove lol , atvb Chris
Thanks for all the comments everyone. I find that honesty in life is one of the most important tools. So if you’re honest with yourself you’ll be true to yourself and be free of the baggage we carry when it comes to the trading mind.
Nice one Chef. I have found the best way to overcome this fact is to get your rush or fix elsewhere. Positive ways to do this might be, running or exercise. Negative ways might be gambling cards / bookies etc or drinking. The former positive fix is much more preferable but both work so that trading just becomes a normal mundane process to profits.