Trader Mindset

Some investors will test you by asking you questions that are deliberately off the mark. Stick to you message throughout even if they try to knock you off balance. You might take a meeting as a CTA and someone interviewing you might say something along the lines of "We're looking to allocate $10MM to a crypto-only portfolio in the next 5 days" when they know you're looking for assets. It's ok to laugh at them and say "good luck - I hope there is a short selling component to the model." Tell them that it's "not terribly wise to make such an allocation on short notice." Most want some fight in the dog. Stick to your message and what it is you can do and leave it at that. Otherwise, you'll look amateurish if you're all over the place.

Every once in a while, the market will open below the point where you would have stopped out your long position or above where you would have covered your short position. The best practice is to offset the position right away. Bad situations become worse. Your first loss is your best loss. Aggravating as it might be, this has not happened enough to me to convince me to stop holding positions overnight or over the weekend. In fact, I'll go so far to say that holding my positions are what I attribute the majority of my gains to.

You need a great deal of help when you're getting started. That doesn't mean you have to give away the house in order to get it. For one, I'll help you as much as I can with what I know that will save you time and money. Second, pay as you go compensation plans have the most flexibility, as opposed to "you were here at the beginning, there are two of us, so you get 50%." That's a bad deal. When you align your goals with your overall behavior, you'll have harmony in your life and business.

Coach your clients about what they should expect. It will save you tons of time in work and having to explain things, and in the process make you look like a pro.

It's the differences that sell. Your potential clients are looking for more than just performance from you. Spend some time taking notes on this episode if you're looking to get new assets from potential clients.

There are a ton of moving parts to your trading business. Pick your partners carefully - sometimes you can't unwind things as fast as you set them up. Everyone flirts hard to get your business and the best deal you can strike is on the day you walk in the front door - it only gets worse after that - and that's why people change firms. Measure 8 times and cut once.

If volatility increases while you have an existing position on, you should probably cut the size of the trade down to reflect the new vol.

Market vol is increasing due to higher level of discomfort and uncertainty, but don't go adding new indicators now. They're not as telling as you'd think.

In this episode, Michael Martin discusses the various reasons you might consider to add short selling to your portfolio. You can short sell for real returns, or you can use it to cut the vol in your long-only strategy.

If you enter a short sale late as can happen with breakouts to the downside, you might have it rally in your face before it becomes meaningfully profitable. In today's episode, Michael Martin discusses one way that you can enter the market short with a more improved entry - and potentially less risk.