Smarter, Quicker, Stronger (special guest: Matt 'PAX' Kenah)
Mar 9, 2024
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In this engaging discussion, legendary trader Matt 'PAX' Kenah, known as the 'King of the Nasdaq Pit', shares his incredible journey from a floor runner to building generational wealth by 33. He reveals how he adapted his trading strategies when the market landscape shifted from physical pits to digital platforms. PAX dives into the psychology of trading, emphasizing resilience and emotional detachment. He also reflects on pivotal moments in his career, including overcoming setbacks and the importance of mentorship in the trading community.
Matt 'PAX' Kenah highlights the transformative nature of trading, revealing its cyclical challenges and the essential need for a strong psychological framework.
PAX emphasizes the significance of risk management, demonstrating how understanding various trader success levels can help navigate the trading journey.
The importance of setting small, achievable trading goals is underscored by PAX, advocating for clarity in market behavior and aligning strategies with momentum.
Deep dives
Pax's Early Journey into Trading
Pax began his trading career at the Chicago Mercantile Exchange right after high school, initially working as a runner for minimal wages. He was inspired by a childhood friend who became a successful trader and decided to pursue a similar path without any prior knowledge or connections in the industry. The vibrant atmosphere of the trading floor captivated him, prompting him to learn the intricacies of trading quickly. Despite starting with no financial backing, Pax distinguished himself among thousands of traders through sheer determination and intelligence, leading to a successful career in trading.
The Challenges of Trading
Pax emphasizes that trading is a journey filled with ups and downs, often compared to a marathon rather than a sprint. He recounts personal experiences, including financial highs and lows, such as reaching a peak of generational wealth and later facing divorce, which forced him to reinvent himself. He highlights the reality that many traders face hardships, and it's essential to maintain a spiritual foundation to withstand life's inevitable storms. With changes in personal circumstances and market fluctuations, he advises new traders to be patient, focus on consistent learning, and take their time to grow in their trading journey.
Understanding Trading Psychology
Pax discusses the importance of psychology in trading, noting that fear and confidence can significantly impact decision-making. He explains how many traders struggle with emotions, which can lead to hesitance in executing trades or taking unnecessary risks. To combat this, he suggests that traders leave personal issues at the door and maintain a focused mindset while working. By advising traders to only enter trades they are confident about and to create a mental framework where losses are viewed as business expenses rather than failures, Pax promotes a healthier trading mentality.
The Four Lanes of Traders
Pax introduces a model consisting of four lanes of traders, each reflecting varying degrees of success. At one end are consistently losing traders, progressing to break-even traders, slightly profitable traders, and ultimately profitable traders. He emphasizes that moving through these lanes is a common experience for many traders, and developing a deep understanding of risk management is crucial for success. By cultivating the ability to manage risks and profits effectively, traders can enhance their potential for becoming ultimately profitable.
Strategies for Consistent Trading Success
Pax outlines key strategies to maintain consistency in trading, such as focusing on small, manageable goals for daily profits. He highlights the importance of recognizing market behavior, asserting that the market will either trend upward, downward, or remain flat. By establishing clear entry points and using foundational concepts like opening range breakouts, traders can improve their trading decisions. Pax also emphasizes the significance of aligning trades with market momentum and understanding the role of algorithms, thus stressing that traders should continuously adapt their methods to stay relevant in an evolving trading landscape.
Join our phenomenal conversation with legendary trader Matt 'PAX' Kenah.
PAX started out as a runner on the trading floor of the Chicago Mercantile Exchange (CME) in 1988 and quickly became one of the biggest traders in the pit. PAX was referred to as the 'King of the Nasdaq Pit'. He amassed generational wealth by the time he was 33 years old, making multi-millions in trading profits. However, in 2011 with the collapse of MF Global he lost $1.5 million overnight. This event forced him to rediscover how to support his family. PAX shares how he successfully shifted his trading approach from the floor to the screens.
special guest: Matt 'PAX' Kenah ( / @thepaxgroup )
hosts: Andrew, PJ and Mandela
executive producer: Mandela
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