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Trading as Character's X-Ray

Tim Knight from Slope of Hope's picture




 

I've pondered in the past how much we really know ourselves, or each other. Real-life heroes, for instance, seem to me to be born that way, and fate provided an opportunity for them to do something extraordinary that most people wouldn't do. The person who leaps between the subway tracks and puts his body over a child who fell down there wasn't necessarily trained to do such a thing. I don't think there's anything specific to their gender, ethnicity, racial background, or anything else that drives them to behave heroically. In that split-second, where most people's desire for self-preservation would have held them back, some individuals choose to do something with what we might describe as a very bad risk to reward ratio.

 

0624-contemplationBut stepping away from the subway tracks - always a wise move, both figuratively and literally - let us consider more elementary aspects of our character. How well do we really know ourselves? What can we do to reveal our inner nature which, in my estimation, most people elect to keep hidden by the veil of ignorance their entire lives?

Slopers know I've never had an interest in watching sports, but over time I've come to accept that athletes of all kinds are people who, by the very nature of competitive situations, have demonstrated themselves to be people of extraordinary character. By this I don't mean they are paragons of virtue; some of them are, and some of them act detestably. What I am saying is that one does not become a world-class athlete (or a world-class anything) without having substantially more drive, self-discipline, determination, and resiliance than the average fellow.

Trading is, let's face it, extraordinarily challenging as well. We are all in a daily competition with one another. Although our scores aren't normally a matter of public disclosure (unless you are running a big fund or otherwise have to reveal your results), we all have a sense as to how we're doing versus the market as well as how we're doing versus our own expectations.

There are a couple of reasons this has been on my mind lately. First, my children are becoming more serious about their sports, and I've been reading what I can about sports psychology. Much of the advice laid out in such books is almost identical to the kinds of things successful traders speak of. My respect for athletes has definitely kicked up several notches since I am witnessing up-close the mental challenges in what are assumed to be physical activities (my disdain for the mere watching of sports, however, remains completely grumpy and sourpuss).

The second reason is what happened with me earlier this week. Dedicated Slopers may recall that on Wednesday, after the FOMC announcement, I panicked a little later in the day and gobbled up long positions left and right, which was not in my plan nor executed in a sensible, rational fashion. It was emotional, and when it comes to good trading, following the whirlwind of surprising emotions is hardly a recipe for success.

I brooded quite a bit about my failure on that day (so much so that Slopers started insisting I just put a lid on it), and the next day I tried to share my thoughts more eloquently in a video about the difference between being nimble and rash.

The reason this matters so much to me is that I simultaneously want to know more about my character while at the same time I'm afraid of what I'll discover. I think that most people like to feel positively about themselves. Mentally healthy people don't want to tell themselves what rotten humans they are. But I also think people who want to grow and improve aren't afraid to look at themselves in the mirror and be prepared to face some truths they might not want to face.

Perhaps the fatalistic side of me as showing. At the risk of sounding irresponsible, I do not believe I am wholly responsible for what makes me tick. Yes, I am largely in control of what I choose to do, and the sort of person I'd like to be, but I also believe there are some core elements that are difficult if not impossible to change.

I've never had the opportunity to save someone's life, but faced with a circumstance in which I could help someone at risk to myself, I would hope that I would be compelled to do so. If I weren't, I would see that as a weakness in character. But what if I did take the risk and save someone from danger, ignoring the peril to myself? I frankly don't think I would deserve much credit for such a thing. I simply got lucky. I simply happened to be born that way (whether or not I was, I have no idea; again, there hasn't been the opportunity).

The only thing I can point to as a situation in which I was pretty pleased with how I was "wired" was during a couple of car spinouts I experienced. I'm a pretty careful driver, but there have been a couple of times when my car starting orbiting out of control (once on ice; once on a slick rainy/oily surface). In each instance, I got completely Spock-faced and calmly directed the car back to safety and control.

Am I some kind of great guy that I didn't shriek and grasp my head with my hands? No; there was simply something about me that didn't freak out and took on the task in a very detached way.

It's that same sort of calm detachment that I yearn for in trading. Part of the reason I trade such an absurd quantity of positions (currently 12 long, 63 short) is to make it almost impossible for me to act rashly. The awkwardness and unwieldiness of my portfolio forces me to take time to think, because whereas I could exit a single SPY position on a moment's notice, even the most panicked and adept trader would take several minutes to exit that many positions.

Through my many years of trading, I can think of several things I've learned about myself:

(1) I never get tired of charts. Call it a mental illness, but seriously, I've looked at hundreds of thousands of these things, and I still look forward with excitement each day to looking at some more. This isn't work; it's play; and that's all I've ever asked of my gainful employment.

(2) I favor the short side far more than the long side. I wish this weren't so, and I'm starting to think I'll go to my grave with this being the case, but for reasons I don't understand - impatience? pessimism? a propensity to worry? - I am always more enthusiastic and forgiving with short positions compared with long positions.

(3) Although I've made progress, I wish I never acted rashly during market hours. This is a battle I am slowly winning, which is why what happened last week weighed on me so heavily. I recognize this shortcoming, and I know what to do to conquer it. But it's an ongoing battle with my default nature.

If you, as a trader, find yourself to be utterly capricious, emotional, and profoundly lacking in anything resembling discipline, don't be surprised if you consistently lose in the markets. Someone with those characteristics is not someone you want to wind up with on a deserted island, because the chances of you surviving are lower than if you'd simply wound up their on your own.

I am flawed, and I recognize that. My flaws are made crystal-clear to me during some instances of trading. Trying to trade for a living also serves as an uncompromising X-ray into your character. I can only hope that, with determination and persistence, I can attenuate some of my shortcomings. I will leave this world still flawed, but I am striving to be less so once that day arrives.

 

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Mon, 06/25/2012 - 10:26 | 2557708 janus
janus's picture

stephanie red-headed rhule:

to you and the thundah storms ouside my door:

http://www.youtube.com/watch?v=jYpSIahYSjc

you know you luv it,

the thunder

Mon, 06/25/2012 - 09:57 | 2557578 janus
janus's picture

how should i start, and where should i begin?  let's think back to where this all began; twas with a quote, though i expect you'll remember not...from the mouth of a redneck, called faulkner -- in case your forgot.

on the cusp of holocaust-nuclear; a prophet from down-south said it all-too-clear...something like this:

"i believe that man will not merely endure; but prevail."

and so we must, in these most harrowing of times.  and so we will as the sands slip through time's narrow gate.  but WE make our FATE.  and WE steer the keel.  this is the Truth; so fuckin fo-Real.

so, what lies ahead.  live-eyes starin down the dead?  no; i think it's bettah -- for you and all that come after.

janus wants to give thanks first to those that love me; and reflect back all that good stuff to ya:

http://www.youtube.com/watch?v=KMfVQ5WKYPY&feature=related

but, understand, janus is just a shadow of a MEGA-MAN...make no mistake, this IS the time of janus; but i'm just-a pavin the way...i'll let you all know when the MEGA-MAN stalks the day.  be forewarned.

http://www.youtube.com/watch?v=4-ciVlsNPRY

portugal. the man -- incredibly brilliant!!!!

times like these:

"man is born to trouble, as the sparks fly upward."  The Book of Job.

what will become of america?  are you castin your gaze at politicians these dayZ?  it'll cost ya your soul.  you want a new slogan for the New-Age?  "no hope in dat muthah fuckin vote!"  or "no vote 4 no hope"

know what, bitchez?  janus now recalls something he read in Harpers magazine (back in the Golden Age thereof; back when Mr. Lapham ran the show...alas).  it went a lil something like this:  it was this portugese writer and he positied thusly -- what if nobody showed up for your muthah fuckin elections?   your despotic jokes...your sad burlesques....your dilletants on depraved parade?  what if it twas only a majority of the weak...the constituents of a clownishly contrived conspiracy; a coalition of the compromised...the muthah fuckin weak!  a coven of witches cloying against your gain.

THIS IS YOUR DEMOCRACY!

think about your class presidents, your committee members, your congressmen, your senators, your presidents -- they are nothing less and nothing more than an amalgum of the least-common-denominator...the least offensive twat to the crusty cunts in cleveland, OH.  and God bless ya, ole cleveland hags!  i'm out to protect ya...but you don't know a goddam thing about leadership and whatnot.  take another ambien and go back the fuck to sleep.  your 'right' to vote is being stripped from you; and for your own fuckin good.

jamie olivers food revolution is proof-positive that you're all a bunch of slack-jawed imbeciles that need a stern talkin-too, middle-Amorica.  so, take heed; lest it's taken heed therefore ya.  too late, actually.  

you've been placed in the ancient-most of scales; and, again, thou art wanting -- and badly.  the Truth commeth; and for many of you, sadly.

janus will form a minorty of the strong to smite your majorities.  cast your eyes ground-ward, wittle ones.  your 'democracy' is a religious-fool's desperate end...and so here we are -- and your most holy priests cannot this folly defend.  what now, bitchez?  defend this charade...someone...please your zealotry over the people's vote...every voice COUNTS; does it not????  sit in your idle hell and rot!  go and do or vote and die.  and, really, that's all there is in this modern life.  

maybe i should stop with words and let my buddy daniel day sling the sharps (i've posted this before; but what the matter...i tried to tell you but james madison said it best in #1 federalist papahs...'the greatest danger of democracy is the tyrrany of the majority.'  and as KING DAVID would say, selah....nevertheless, ZHealots, this'n's for ya:

http://www.youtube.com/watch?v=WLKbcrC0krQ

tis the Divine Right of Kings...

I AM THE MINORITY VOTE,

janus (THE YANKEE!!!)

GOD BLESS AMERICA!

FORTUNE FAVORS THE BOLD!!!

america, you are neither cold nor hot...

learn your plato, bitchez: the republic, the cave and the dialogs (it all mattahs).

 

http://www.youtube.com/watch?v=r4p8qxGbpOk

 

strength unto strength,

janus

 

 

Mon, 06/25/2012 - 07:00 | 2557196 janus
janus's picture

oh, BTW, sara eisen...LUV the dress.

here's to ya:

http://www.youtube.com/watch?v=rUWA707m1qc

yup!,

you might read from revelation back to genesie/

don't forgit your southern kan belongs to me!,

janus

(don't bring no jive to da hive)

Mon, 06/25/2012 - 06:25 | 2557162 janus
janus's picture

all righty, bitchez!  11 beers, four bowls and countless cigs in; and i'm still the world's greatest.  

slopah, again, this-n's to ya...you cosmic-minded SOB...it's a-gonna be epic -- so you're all welcome-like.

okay,bitchez, if you'll remember, janus was pursuin another 'job'...well, it's like this: janus has NEVER interviewed without likewise recievin an offer.  and so it shall be.  it's like this:

janus has been being requested as gentleman-driver by the manager of some place special.  shit happens when you're fly...pay attention, bitchez.  anyway, the overseer of said special-place advised that janus apply.  and since it didn't require any sort of digital device to record my commings and goings; nor did it demand my serivce outside normally-expected reasonability, i figured it a decent enough possibility.  then, when i was informed of the jaw-droppin sums that can be made serving the hundred-dollah plate patrons...well, it was enough to tempt ole janus.

so apply i did.

"don't try...you can't beat the psychological profile...it's fool-proof." sez manager.

"wha-what?  oh...no, no, no."  humbly guffaws janus "beat a psych profile? i nevah could.  i'm as sane in the brain as the noblest johnny-be-goode."  humbly janus replies; as it were.

'this doesn't sound like you, janus', some of his fans may demand.

well, my brothers, what you've just-now thought is Truth.  it isn't like janus...there's another dimension entirely...it begins and ends with a certain shade of blonde.  

here's where it begins.

so, she's a 20 year old pre-medical student.  i hate her for this.  but i hate her for many reasons other.

she's also a size 2, or there-abouts.  probably a 3...if they put it on the rack as standard-size, that's what she'd be.  fuck a bunch a even numbers.

yeah, like i was sayin...i hate her for her slenderness.  she's gettin evil, janus knows.   but, hold on...it gits much worse.

she's clever.  no shit...a keen-witted millenial.  a playful and intelligent and beautiful young blonde.  oh, and did i mention, she has coyly placed piercings?  no, i didn't...nor should have i.

all that, and the bitch has to go and tell her manager that she has a "big-time" crush on ole janus...as i picked her up at the chestnut-hill T-station one fair afternoon.  she can't help it...i imbued her with a lil of the spooky olde majik...so what?, i was tempted.  at this point, janus is the last person you could blame.  well, you can blame God, too.  He just broke mrs. janus's ankle...so i need a spare.

like i was saying, pussy needs protecting...if God won't do it, janus has to step in.

right, then, i think i'll take the job.  janus needs a new and most-convenient concubine.  

here's to ya, Xxxxxxx:

http://www.youtube.com/watch?v=G45QmaBlJCo

yup! take me to your best friend's house/

marmalade, we're makin out/

fool around and scounge about/

i loved ya then i'll love you NOW/

...slumber party--pillow fight,

(luv ya playful millenials!...JANUS!!!)

 

right, where was i....oh, yeah, women.  un-wedge your panties, ladies -- janus is a-ridin in on his white horse to save the day all hero-like...which is his idiom.

welcome to my neighborhood, bitchez:

http://www.youtube.com/watch?v=Iz-WDk7Tbsc

where to begin?  ahhh, perhaps with fat, awkward feminist professahs?  maybe, just maybe, with morbidly obese, mildewy, cankle-over-cankle, third-rate-loosah, professahs? perhaps...perhaps.

 perchance we should begin with the ugly-o-ugly adjuncts who waddle about wafting of some sulferuous-early-mornin-egg flatuance that lofts about the dinner partry, beseeching all attending, 'where from hence do you begin and when, oh foul-demon, do you end your torment there-of-us?' 

there is no gentle answer forthcomming.  the demon-god of flatulent-despair lingers long and haunts us still.  but, though the time is short, we can banish this demon anon.  how, you may ask?  thank God you asked at last...janus has answers a-plenty.

work-camps for loosah professahs.  did janus just say that?....OMG!  he did indeed.  weep not for janus, professahs; weep for yourselves!  the time is nigh.  your theft and idleness is at an end.  time to learn the lessons you feign to foil.  time to reap just what you sow.  look at the clock, bitchez...the solstice is less than 6 months near.  time is dear...Time is dear.  

tremble...tis your lot.

cutie-pies...the beloved of janus.  think not that janus abides some arbitrary version of 'beauty'...oh, no-no-no.  it could be some amber fleck in some raven tress...could be some flicker of some periwinkle dress...could be some dimple on some rosy cheek...could be some high-spirited sparkle in your hazle eye...could be some late-night-drunken do or die...could be some idle wish and hopeless prayer...could be just because janus is there...whatevah, ladies, i love you all; and if i could gather and protect you all, i'd huddle and snuggle you large and small.  so to each and every one of y'all:   here's a song to make ya smile:

http://www.youtube.com/watch?v=51tvZnkn5V8

ahhhhhh, deep breath before i start fo-real...and one more song till i spill:

http://www.youtube.com/watch?v=Naf5uJYGoiU

yup, 12 beers and now 5 bowls...what now?  did i evah mention that tobacco calls down The Spirits? tis a lil secret...shhhhhhh!

ohhh, did i mention?  thought ya should know.  war on what????????????????????????????????????????

http://www.youtube.com/watch?v=IwuO2dfqrF4

BIP!!! learn it.  undahstand all da fuckin lyrics.  tain't nuthin without y'all, luvily ladies.  we slave fo y'all.  and lap it up lovin-like.

but, bitchez, tis a MAN's world -- 555.

stilll...janus NEEDS ya, cutie.

YUP...preach it, MR. BROWN!!!  

(did i evah tell y'll the stroy of when janus sold him a mercedes???  maybe latah -- let's leave it in augusta/aiken fer now..oh, and then there's the story of young riddick bowe and young janus the car salseman...nuf 4 now).

welly, welly, welly well -- phlematic and prosaic professahs, what say ye now?  i've strutted and stunned, and still you challenge me not? ho ho ho!  now i shall lord over you and condemn you.  i will make you a mockery and a spectacle; a desolation to end all ambitions oozing from ilks such as should despoil the young of their future to insulate their cankered and callowed old-aged despair.  i am who you imagine i am...your bitter end.

http://www.youtube.com/watch?v=SWvWyYz9ttk

viddy well, lil brutha...viddie well!

la-die-dah...where was i? ahhh the lovelies.  let us return.

these 'feminists' who claim to protect you? well, good-looking-among you, they are your mortal enemies.  they seek your utter destrustion; and will stop at nothing to accomplish that end.  fear them lest ye perish, my fairest,  listen well:

they have spent their whole lives lookikng in...and at who?  why, my fairest, at you.  staring and hating and hoping to betray ya.  these 'feminists' have an idea and it happens to be thus:

we know what 'women' is to be...it's as we say...and tis thus: thou shall wear drab cloting, spectacles...thou shall have pale and pock-marked skin, and be proud thereof (not sinning according to the demon make-up)...thou shall read what oprah says, and learn the salient lines...thou shall be fat and indulgent of thine weakness; up to and including pharma -- because your man is too much like steadman.  oh, and if your man speaks against you, call the law -- they's always on your side.  

listen, crapulent feminist professahs, you fucked wid the wrong janus...now he's gonna tell the cheerleaders and fine-ass hos what you been up to.   the world belongs to them; and you just jealous.  fuck a bunch of haters.  janus is restorin the natural order of things...a face to lanuch a thousand ships and all that.  

wonder not.  tis as olde as TIME.

and again it returns.

 http://www.youtube.com/watch?v=IVJD3dL4diY

think now...

http://www.youtube.com/watch?v=3MCHI23FTP8

early dis mornin,

janus

 

 

 

 

 

 

 

 

Mon, 06/25/2012 - 04:42 | 2557101 Roger Knights
Roger Knights's picture

I read a good book on investing by a Russian immigrant. He said, in the last sentence, that if he had one word of advice for investors. it's "Wait." That's similar to Buffett's advice to wait for a good pitch. It's emotionally had to follow, because we want to be involved. But being detached is the way that works.

“He that can have patience can have what he will.”

?Benjamin Franklin

Mon, 06/25/2012 - 03:55 | 2557092 janus
janus's picture

HOLY SHIT!!!

the best non-janus shit i have evah read on ZH.

solpah...i've been followin you since you started.  mutha fuckah!!!  now i gotta dedicate what follows to you...i've gotta step back and reckon.  a new thinker has revealed himself.

ALL HAIL THE SLOPAH!!!

goddam son, that was powah!!!

i give pause and AWE!!!

but, recognize, it is the day of janus...and again, quiet now, the first rule of janus is: you don't talk bout janus.

here's a dedication to the slopah:

http://www.youtube.com/watch?v=fmTS4TieO28

give a listen to EVERY WORD, bitchez!

notice the reptile a-reachin!

did i evah tell y'all the story of my stealin a piece of muddy water's birth-home?

maybe later.

the WHOLE WORLD...mutha fuckahs!

 

 

 

i AM the blues,

JANUS

 

Mon, 06/25/2012 - 03:54 | 2557091 SuitablyIronicM...
SuitablyIronicMoniker's picture

Think you meant grape post. I'll have another, too. Cheers!

Mon, 06/25/2012 - 03:00 | 2557061 TraderTimm
TraderTimm's picture

I think Mr. Knight is sometimes responding to the 'cancer' in the market - FED actions and HFT ramp-till-you-drop bid-lifters. Had this been an actual market with real human beings as a majority, perhaps the strategy would be appropriate -- there is just a disconnect between what is a 'real' market and what we have now.

There's probably some human error thrown in there too, but honestly - anyone tired of the 2:30-3:00pm rampjobs? The gap-opens in the morning off of nothing?

I hate how the markets have become infected, and they don't even seem based in any kind of reality anymore.

 

Mon, 06/25/2012 - 02:35 | 2557046 steveo77
steveo77's picture

Tim Knight is a bear's bear and a heck of a good guy.   One of the few that blog honestly about their own faults.

I got into Charts because of Tim.    Don't look at hundreds per day though...

Developed my own charting methods, works far better than anything else.     14 of 18 profitable weeks this last third of a year, thats not bad, actually very good.

http://oahutrading.blogspot.com/2012/06/sunday-boatload.html

 

Mon, 06/25/2012 - 00:51 | 2556989 Solarman
Solarman's picture

Good post Tim

Mon, 06/25/2012 - 00:04 | 2556954 bankruptcylawyer
bankruptcylawyer's picture

youre just another small fish in a big pond with lots of big fish whose behavior dominates your behavior almost all the time. you caanot always predict what bigger fish do with charts, because even they cannot always predict what they will do. 

 

you are emotional because uncertainty must necessitate an emotional response. this bullshit about being totally emotionless as a trader is just that. bullshit. 

if you cannot take the stress of it all, you shouldn't be doing it. 

Mon, 06/25/2012 - 02:39 | 2557051 RECISION
RECISION's picture

I have read that humans need emotions to be able to make decisions.  

We are simply incapable of being Spock.  

Studies on people who have lost the ability to feel emotions (for whatever reason... injury etc) have been shown to be incapable of making decisions.

On some levels at least, you cannot separate out your desires and emotions from your decisions.  Whether you realise it or not. 

Mon, 06/25/2012 - 02:28 | 2557040 steveo77
steveo77's picture

methinks you have no idea who Tim Knight is?

Sun, 06/24/2012 - 20:36 | 2556701 Sir Edge
Sir Edge's picture

I am a long time Sloper... an active member of Tim Knights SlopeOfHope Blog Website...  and happy to be part of it...

Every week... Tim Knight does a TSA self scan of his own market and hedge trading psyche right in front of the whole world... this is a rare sight to behold... win, lose or draw Tim will stick his neck out and point out his losers and his winners to the blog commentors... and he is totally open about the trades that crushed him... the whys and why nots and reasons for this or that entry or exit...

He allows and encourages many competing blogs / website posters to submit trading post material to him that he publishes daily... many times this trading material opinion is in opposition to his thoughts at the time... but up it goes if it is well done and well written...

It's amazing but He has even uploaded trading articles written by women... and beyond that... he has even allowed people from France to post too... (Blow Me)... (jk)... Mon Dieu... :o)

The most amazing thing about The SlopeOfHope Blog / Website is the sense of humor of the participants... there is almost nothing sacred that does not get zinged sooner or later... The fact that Tim even puts up with direct taunts from others to him is another rarity in the world of online... and he zings them right back... it takes a lot for a member to be deleted... and usually the majority has to urge Tim and his moderators to delete someone who is totally out of line... it takes a lot...

For a humour filled example is this short passage... by some typical members..

******************************

Viscous:  Hey guys, hey. I'm evil.

Iggy: You're beyond evil.

Edgey: Is There A Basement in Hell... ?

Viscous: LMAO...

*******************************

All day long and night... the Slope plays on.... a party of trades, zings, dings... rips... tips and blips... it never ends... The Bar is Always Open...at the Slope...

Just so as knot to make this too saccharine... Lets go with the TK's theme in the post above... about When is it time to take a stand...!

Its time Now TK... Its okay to say the American Wars in Iraq, Pakistan, Yemen, Somalia and Afpak are illegal, immoral and unnecessary... and that American politicans and Miltary should be held accountable in a court of law... even the carpenter would agree...

thanks... Sir Edge...

Sun, 06/24/2012 - 20:30 | 2556693 rsnoble
rsnoble's picture

Do yourself a favor and go join inthemoneystocks.com, join the chat room and don't touch a single fucking button until they tell you to. By far the best t/a traders on the planet. They'll show you shit on charts you've never seen.

Sun, 06/24/2012 - 19:13 | 2556577 This is the end
This is the end's picture

I think the author is slowly realizing that we have a fallen, sinful nature that every person is born with as the Apostle Paul put it,  

"I know that nothing good lives in me, that is, in my flesh. For I have the desire to do what is good, but I cannot carry it out. For what I do is not the good I want to do; no, the evil I do not want to do—this I keep on doing. Now if I do what I do not want to do, it is no longer I who do it, but it is sin living in me that does it.

 So I find this law at work: When I want to do good, evil is right there with me. For in my inner being I delight in God’s law; but I see another law at work in the members of my body, waging war against the law of my mind and making me a prisoner of the law of sin at work within my members. What a wretched man I am! Who will rescue me from this body of death? Thanks be to God—through Jesus Christ our Lord!

Romans 7:18-25


Sun, 06/24/2012 - 18:08 | 2556467 covert
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