
BIG MIKE’S TRADING FORUM
Big Mike’s Trading Forum is a great place to hang out and discuss trading. I have been following Big Mike since he was on the Ninja forum as ctrlbrk. He has always been a very helpful guy. He was nice enough to answer a few of my questions as his forum is coming up on his second anniversary even with a broken hand.
This is a great interview and well worth a read. Interview posts are not very popular on my blog, but they are much more informative and useful if you want to make a living from trading , it would be good to listen to those who have been around for a while like Big Mike.
So after reading this post, head on over to Big Mike Trading, a great forum for traders and some of the things he has planned for the second anniversary.
- Memorial Day charity drive: All Elite subscriptions get donated to charity
- Battle of the Bots: June Winner gets Algo Trading book from Amazon
- Teaching contest: Win an iPad 2 for the best thread teaching a methodology (follow-up to our iPad 2 journal contest)
- Velocity Futures Webinar: Giving away two cent commissions for an entire month to two people
- Suri Duddella Webinar: Chart pattern expert, giving away 10 autographed copies of his book
- MultiCharts Webinar: Platform overview, new features, giving away two lifetime licenses and two sets of two hours each programming time for custom indicators or strategies
- NinjaTrader Webinar: Platform overview, new features, giving away two round trip tickets from anywhere in the world to Las Vegas for November 2011 Trade Expo, plus one two year subscription to NT
- Al Brooks Webinar: New price action books, price action trading: giving away 10 autographed copies of his book
AND NOW THE INTERVIEW
[1] One of my big things is journaling. I even print out my journals at the end of the month. When I go back over them months later I learn so much about my trading. I know you are a big fan of journals also. My question is, why do you think it is so hard from some people to do journals?
“Journals are probably the single best tool a trader can have. Yet most traders throw it out the window and think they don’t need a journal. Well, most traders fail. So do the math… I think people come up with a list of excuses that they don’t need to journal, but the single biggest one can probably be simplified into lack of determination to see it through. Another common one is simply the “lack of time” excuse. To me this says the trader is overtrading and it would take them hours to journal about all the trades.
Individual traders are not computers. Let the computers do high frequency trading. You should focus on just a small number of setups each day, maybe 3-5 trades at most. Anyone should be able to write down why they entered and exited a trade three times a day, no excuses.”
[2] Somewhat related to the previous question, in that you have to be honest with yourself to improve. Why do you think people are not honest with them selves in their trading. Almost as if they see what they want to see.
“It’s not that people intentionally deceive themselves. I don’t believe that. What I’ve found through my own experiences and through the forum is that traders get caught up in something and can’t see the forest for the trees. I refer to it as the black hole phenomenon, where the trader gets sucked into this vicious cycle of repeating the same mistakes over and over. But the trader can’t escape. In order to deal with this, the mind plays tricks and invents all sorts of reasons that a trade failed or that the trader lost money.
I’ve got news for you, if you don’t accept full and complete responsibility for every action, beginning to end, having to do with your trading – you will never succeed. Don’t blame your computer if it is slow. Don’t blame your internet connection for dropping out. Don’t blame your platform for crashing. Don’t blame Goldman Sachs for running your stop. And worst of all, don’t play the “if only” game with your indicators. If only you had… <insert 42 excuses here>. It’s all you. Own it. Take responsibility. If your computer sucks, your internet connection is flaky, and your platform crashes routinely, then you shouldn’t be trading until you resolve all of those issues.
Once a trader finally comes to terms with the fact they are solely responsible for their own trading success or failure, it can be an eye-opening experience. On the one hand, you can finally move past all the junk that gets in the way psychologically holding you back, and face it head on and deal with it. But on the other hand, you finally realize you have only yourself to blame. It’s crunch time.”
[3] We all start out somewhere trying to be full time traders. Do you have any advice for someone who is marginally profitable part time to make the jump to full time ?
“If you are marginally profitable, my first question is over what time period and how many trades? I would be cautious if the term is less than 1 year and the frequency of trades is less than say 500. Don’t get cocky and think because you had two good trades in a row that you’ve got this trading thing licked. Trading success is incremental. There are many things you must master, all individually, in order to finally put all the pieces together. You can’t skip over the hard parts, there are no short cuts. There is no indicator or trading system to download that will make you money.
My advice begins with “congratulations!”. Even marginally profitable is considered a success in terms of the larger group of traders. Build on it, slowly. One of the most common mistakes traders make is allowing their ego of always wanting to be right to get in the way of a trade decision. That often leads to giving back days, weeks, months or even years worth of profit in just a handful of terribly executed trades. So go slow, don’t get cocky, and make sure you have some meaningful analytics in place to measure your success.”
[4] I have been trading the same basic system for the last few years. It has evolved over time, but it is basically the same. I run into others who constantly want to radically change their system even when they have a perfectly workably system, one bad day of trading and they throw the system out and start their search again? What are your thoughts?
“Congrats! That’s awesome that you’ve been trading the same basic system for this length of time. I constantly tell people to stop changing everything. People rush to change indicators, tweak settings, or download the newest craze system in order to solve an underlying problem with their own trading psychology. They want more filters, they want to stay out of chop. Basically, they want the holy grail.
If you have been trading for 3 years but you’ve changed your method every few weeks, then you don’t have three years of experience but rather only a few weeks experience. I strongly believe that success is determined by your ability to read the market, and not by your ability to follow a blue-to-red trading system or indicator. You don’t stand a chance of properly reading the market if you are constantly changing your charts and indicators.”
[5] In trading, I have found that best advice I have ever received has been free or inexpensive. I usually steer people who ask me questions to Reminiscences of a Stock Operator ( can be found free ) , the CME website, and Al Brooks book ( Soon to be in English ). Besides Big Mike Trading, of course , where else would you direct others ?
“I prefer reading Trading Psychology books. Brett Steenbarger has several absolutely excellent books, and a blog online that is filled to the brim of real-world advice. I don’t read books that describe methodologies very often. If the book has lots of pictures of charts, then it is really of no interest to me. Sure, I’m always eager to learn new things, but I want to incorporate it into my existing trading system and am not eager to make any kind of departure from what is working for me.
As for online resources, of course I think BMT is the place to be. I don’t frequent any other trading related websites anymore since BMT has taken off.”
[6] How do you deal with the boredom of trading? That is sitting on your hands and waiting for a great trade. Is it something that came with experience for you?
“If trading is exciting, your probably losing money. I don’t treat trading like gambling. I go to Vegas to gamble, which means to have fun. I trade in order to make a living. I usually trade for about 2-3 hours per day. During this time, I turn off my phone, TV, and I don’t browse the web. I am looking solely at charts on all of my monitors and I work to get in rhythm with the market.
With my particular methodology, I know where I want to enter and exit a trade ahead of time. So I place limit orders and don’t have to watch the market tick by tick in order to press the button to get into a trade. I would suggest a similar approach to others, as watching every tick will just lead to over trading and second guessing of your original analysis.
That said, a huge number of traders have a problem over trading. My suggestion to them is to make a promise to yourself that you will take only 3 trades a day, period. So help me, if you take 4 trades…. I find that knowing this number ahead of time really helps to focus traders. Of course if you make this promise with yourself, your best bet is to post about it in your journal on BMT so you get the extra accountability you need. The mind is a powerful tool, be sure you are using it to your advantage
”
[7] Finishing up, if you could give one and only one piece of advice to a trader, what would it be ?
“Be realistic with your expectations. Too often, traders come into this business and think they can turn their $500 forex account into $5,000, or they can turn their $20,000 futures account into a steady $75,000/yr income. You cannot. Those kinds of returns are outlandish. Just because some guy on a website selling you his secret method says you can do it doesn’t mean you actually can. Be realistic. Realistically speaking, you will probably spend $20,000 to $50,000 the first two years you trade. I say “spend”, not “lose”, because I look at this period as your tuition and its an educational expense. Hopefully your third year you can earn a 10-20% return or so. By your fifth year, maybe you can get to your $75,000/yr income figure with a modestly sized account. A common number thrown around is 10,000 hours – you need 10,000 hours before you start to “get it”.
Expanding on the above – make sure you treat trading as a business. If you are serious about being a full-time trader, then act like it. This means no interruptions while you are working. No wife and kids coming into your office every hour. No surfing the web, watching TV, sleeping in, staying up late, etc. If you don’t respect yourself enough to treat your trading business seriously, then you won’t succeed. After you “make it” in trading, you’ll find your life will open up and you can do the things you’ve dreamed about without them interfering with your work, because you’ll likely only be working 2-3 hours a day. But during your tuition period, you can expect to work 12 hour days routinely.
TW, it’s been a pleasure answering your questions today. I look forward to seeing you, and your readers, on BMT!
Big Mike”

Good to see you! If you are new here, you can subscribe to the RSS feed for updates