We recently had the pleasure of speaking to John Walsh, aka the Black Cabbie Trader, on the Two Blokes Trading podcast. We discussed his background and how he came to be a successful retail trader and find out what makes him tick. One of his most informative answers was when we asked him what the number one trait that he had that meant he was profitable? His answer: Resilience.
John felt that his ability to put bad trades behind him, potentially several bad trades in a row, meant that he could trade ‘like a robot’ in both good times and bad. Avoiding going ‘on tilt’ as they say in poker is what means he doesn’t have those big losses that wipe out days or weeks of small gains. He clearly has a very analytical mind and has taken the time to create a solid trading system based around technical analysis of US shares. But he freely admits that were he not able to trade robotically, to put emotion out of it and not ‘fall in love’ with certain trades and in particular not get hung up on losers then he would struggle to be successful.
When John has a loser, he cuts it. No emotion. Then he moves on. He doesn’t look back, he doesn’t wonder ‘what if’ and he doesn’t beat himself up about it. When trades go wrong he can console himself that they were part of his system and some trades will always be losers. He admits to making all the classic mistakes when he was just starting out but says that even then he never let a loser get him down. This focus on Resilience hits home with both Tom and me. We both cut our teeth in the world of Sales and the number one thing that is hammered home to young-buck sales people? Resilience. “Every No is One Step Closer to a Yes”! And it is true, absolutely true. Without resilience you will give up on sales long before you can become successful, and the same is probably true of trading. In sales you will often lose a big deal right at the end, just when you thought it was going to happen. You are sure it is gonna happen, you’ve already spent the commission in your mind and BOOM its gone.
Trading seems to be the same. I’ve only been at this game a few weeks but I’ve already been kicked-in- the-nuts on a few trades. Trades I really liked, or whisper it – loved. Trades that I was convinced were winners. Perfect technical set ups, in the direction of the prevailing trend ….nope, it’s gone against me! What does John mean by Resilience? Well for me it means: not throwing your toys out of the pram and trading something random off your trading plan, not upping your trade size to go and win your profit back and not just giving up and quitting either on a proven system or on trading itself! Mostly Resilience is about keeping doing what you know works in the long run despite short term difficulties. So forget that rubbish trade and pretend it never happened, have faith in yourself and keep doing what you know works!