Michael Martin, a professional futures trader with over 30 years of experience, shares his insights on the crucial role of emotional intelligence and risk management in trading. He discusses his rise from a blue-collar background to Wall Street, emphasizing the importance of psychological resilience in navigating the trading landscape. Topics include strategic trading with progressive exposure, the impact of younger traders, and the necessity of structured regulations in cryptocurrency. Michael also relates trading lessons to broader life principles, advocating for self-awareness and perseverance.
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volunteer_activism ADVICE
Strict Risk Management with Pyramiding
Martin practiced strict risk management by setting protective stops and pyramiding cautiously to keep risk constant.
He accepted occasional stop-outs as a price for sleep and peace of mind while building larger positions.
insights INSIGHT
Technical Indicators as Emotional Band-Aids
Martin found that technical indicators serve mainly as emotional comfort rather than improving profitability.
Price itself is the only necessary indicator; extra tools mainly validate what price action already shows.
volunteer_activism ADVICE
Own Your Trades Fully
Take full responsibility for trading outcomes; blaming others leads to failure.
Be decisive and manage risk daily; avoid holding losing trades based on hopes or news.
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This book is a classic in the field of technical analysis, providing a methodology for interpreting the predictable behavior of investors and markets. It covers in-depth discussions on Dow Theory, reversal patterns, consolidation formations, trends, channels, and technical analysis of commodity charts. The book also includes expanded material on Pragmatic Portfolio Theory, Basing Points procedure, and modern investment technologies. It is an indispensable resource for technical traders, investors, and finance professionals, offering practical advice on stock selection, charting, risk management, and portfolio diversification.
The inner voice of trading
The inner voice of trading
Michael Martin
Market Wizards
Jack D. Schwager
Market Wizards is a must-read for traders and financiers, offering a deep dive into the strategies and mental attitudes of the world's most successful traders. The book includes interviews with traders such as Bruce Kovner, Richard Dennis, Paul Tudor Jones, and others, revealing their approaches to trading and the factors that contribute to their success. It covers a wide range of markets, including treasuries, futures, commodities, and more, and highlights the importance of solid methodology and proper mental attitude in trading[2][4][5].
Michael Martin, raised in a hardworking blue-collar community, embraced the same ethic. An entrepreneur at heart, he hustled from cutting grass when he was 12 to working all types of jobs including golf caddying and waiting at restaurants to starting businesses. Determined to transition into the white-collar working world and being at the right place at the right time, he was exposed to the financial markets.
He subsequently worked on Wall Street, managing commodity accounts. Despite the significant commissions, he realized that he could potentially earn more through an incentive fee. After three years at a brokerage firm, he started his own CTA.
Emphasizing the importance of risk management, discipline, and emotional intelligence, and maintaining a mental edge in trading, he discusses his early experiences with commodities, the evolution of his trading strategies, and the significance of networking and mentorship.
This episode of Chat With Traders is sponsored by Plus 500 and Trade The Pool. Click here to learn more about Plus500 and Trade The Pool.
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