Justin Kay, a seasoned attorney and full-time trader since the late '90s, shares his incredible trading journey. He discusses his transition from equities to options and the impact of life changes on his career. The conversation delves into the importance of community in trading, balancing collaboration and competition among peers. Justin highlights the psychological aspects of trading, emphasizing emotional resilience amidst volatility. He also announces a new course focused on innovative strategies, specifically for long volatility and short-dated options.
Justin emphasizes the importance of community in trading, highlighting that collaborative sharing of ideas fosters better learning and strategy development.
He outlines the psychological challenges faced by traders during drawdowns, stressing the need for resilience and careful risk management in a trading career.
Deep dives
Justin's Journey into Trading
Justin began his trading career in the late 1990s and initially focused on equities but later shifted his focus to options trading. After years of trial and error, he dedicated himself to understanding options pricing and began honing strategies around 2015. By 2018, he was increasingly involved in options trading and ultimately transitioned to full-time trading after leaving his job as an attorney. This transition, though initially driven by necessity, led him to fully embrace the challenges and opportunities of a trading-focused career.
Community and Collaboration in Trading
Justin emphasizes the importance of community among traders, noting that sharing ideas and experiences can significantly enhance learning and development. He suggests that while some individuals come seeking specific strategies, the most fruitful approach lies in collaborating and exploring different perspectives within the trading community. This deeper collaboration helps traders refine their strategies and supports the psychological aspects of trading, as facing challenges is often easier with a supportive network. Establishing a space where contributors can share insights without fear of competition is crucial for fostering an enriched learning environment.
The Balance of Sharing Knowledge and Competition
There is an ongoing tension between sharing successful strategies and the fear of crowding, which can diminish their effectiveness. Justin clarifies that while trading strategies may have some level of shared success, the true test lies in their differentiation and adaptation across various traders. He highlights that the proliferation of automation in trading exacerbates this issue, as identical entries can lead to unintended crowding and wastage of profitable opportunities. For successful trading, balancing collaboration with a sense of individual strategy development is essential to avoid destructive competition.
Mental Resilience and Managing Drawdowns
Transitioning to full-time trading brought Justin face-to-face with the psychological challenges of drawdowns, which impacted both his finances and mindset. Experiencing a 13.5% drawdown over a prolonged period further tested his resolve and highlighted the realities of relying solely on trading income. He emphasizes the importance of maintaining a strategic perspective on drawdowns and understanding their potential long-term implications on one's trading career. Ultimately, the experience taught him resilience and the necessity for careful risk management, making clear that the journey of a trader is fraught with mental battles that require support and self-reflection.
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