About

Today's episode features a trader with over 45 years of experience - amazing Peter Robins. Throughout his career, Peter has encountered and overcome numerous challenges, providing him with a deep understanding of the trading market and the psychology behind day trading. In our discussion, we explored how day traders can effectively manage their expectations, how to keep the motivation going, where to acquire valuable experience and wisdom from other day traders, and how to overcome fears such as FOMO.

Peter's insights are invaluable for both novice day traders embarking on their journey and seasoned professionals looking to enhance their skills. This episode is full of practical advices that can help day traders navigate the complex and ever-changing trading market.

If you are intrested to learn more about trading psychology check other episodes of Confidence in Trading podcast HERE.

Mentioned book: In this episode Peter is mentioning "Trading Chaos" by Bill Williams which had a significant impact on his trading journey. This book is great introduction to a trading strategy and what most important to a psychology in day trading. It is a definite "must-read for anyone intrested in this topic.

The "Made It" Day – Episode #2 of Confidence in Trading Podcast

In this Episode

Day Trading Psychology:

The reality of being a day trader

Peter: Everyone knows the risks of driving, right? It's self-evident. But something like trading, especially a lot of these young new traders, or new people interested in trading. There’s just so, so much misinformation online. So, they're basically told well, you can day trade, quit your job, you can be making a million in no time, etc. And no one is telling them the reality right and those hard facts. You know, you don't sell courses by being real, right? Because no one's going to be interested to hear that, right? It's, but it's very easy to sell someone on something that and they have no concern for the risks that these people are taking and the devastation that's being caused by that.

Agnieszka: Yeah, and the devastation is that we're not only talking about financial devastation, but I mean, I see it every day that you know, when that financial devastation takes longer, or just simply the frustration, the health, the family life suffers, there is really so much more to it. When you're making that parallel to a car, or learning to drive a car—I don't know if this is also in the U.S. But that just popped into my mind. Do you know that when I did my driver's license in Poland, back then, a long time ago, you know that the cars that we are actually driving that we are learning on, the instructor has an extra brake pedal? Is that also here in the US?

Peter: In Canada, and I assume in the US, too, if you're taking a driving course, with an instructor that has a vehicle, yeah, they have a brake on their side. So, they can, they can monitor you, they can watch you and they can, you know, put a stop in if they need it. Right? And, and it's the same thing with a trader, right?

Agnieszka: Yeah, that would be helpful. 

Peter: Yeah, no one, no one has a mentor, if you don't have a mentor, you don't have anyone that's experienced. You know, it would be nice if there was a mandatory stop that protected you, or mandatory limits to the size that you could put on. And again, like, I know, for myself, when I talk about new traders and how I would approach trading, if I was to do it over again, I would start off with one or two instruments that are not too volatile, I'd be trading small size relative to me, to what I, what I hopefully will get to, and just like driving, right? You do, you do your drive around on the side streets until you get comfortable. And then you eventually get bigger in size and as you gain skills and experience.

Agnieszka: Yeah, totally. That's a very good, very good metaphor. So, for everyone who is listening, just think about how you drive. And that, you know, most of the time you do stop at the traffic lights, right? You do avoid the risk, you're not exposing yourself on purpose to get in trouble. So, try to do that in trading too. Just simply managing your risk and thinking about the consequences of every action you're taking.

Day Trading Psychology:

Why most traders fail?

Agnieszka: It's so interesting, like the statistics are actually staggering, right, it's over 90% of traders are not going to "make it". I had that myself, like, "but I will be different". Do you see that from other traders that like maybe the ambition, is that the ambition that they have? Or does… is this day of "I make it" keeps them motivated? What do you think it is?

Peter: Well, I think a lot of people come to trading as already professionals. So, there's this group of very intelligent people, they've had a career that they've been very successful at, and they just think this is just another business, right? Then I'm gonna learn it, I'm gonna be expert at it, and they're already well educated, possibly, they already have been successful in other endeavors in their life.

And then all of a sudden, the reality of trading is something completely different to them. And, you know, I think whenever you're dealing with something where money is involved… {laughs} people did not put constraints on themselves when they learn, right, so, you can basically do anything you want, and people don't understand the risks involved.

That it is a journey, and you've got to start slowly, and you've got to build up your experience, and you've got to challenge, you've got to deal with these, you're talking about the different challenges you face as a trader, right? So, it's like any other business, there's, there's all the things you've got to deal with, right, the administration, setting up an account, having capital, you know, making decisions. And all of that is hard enough, like you got to learn that as a new trader, but you've also got this opportunity to do whatever you want, right? And you can do anything.

If you don't understand or come to the game, come to the business with an understanding of what those risks are, it's very easy to make decisions that can either wipe you out or take or make you go back, right, one step forward, two steps back, instead of let's just take one step at a time until we get to our, to our… What did you call it or "made it"?

Agnieszka: Yeah, the "made it" day.

Peter: The “made it” day, right? So, the problem is you can… And over time as well, you can feel like I've “made it”. How many people during this late last bull market thought they “made it” after one month of trading, right? They started trading, it's like, oh, this is easy, I understand this, I'm making lots of money. And then they realize awful quickly, okay, I might have “made it” for a month or two. But, you know, I didn't really understand. You know, and that's, again, part of that learning, right, that you go through?

Agnieszka: Right. And, you know, it's like, it's so very interesting what you, what you said about how people step into it, and the fact that they can do what they want, because there is really nobody else telling them, okay, you should not be doing that, right? Because it's just them on the computer. So, in fact, the fact that they don't have the limitations, kind of brings them into trouble. Plus, of course, they trade, not just for money, they also trade the money. So, the money is just like right there like this carrot on the stick, so to say, right? Becoming a total frustration for, the source of frustration for a lot of people.

Peter: Or, I use an example of learning to drive a car, right? So, it's very structured, right, you start off by going up and down your driveway. And it's all about being safe, right? So, initially, you just stay off of the roads. And then eventually you do testing to make sure you understand the fundamentals of it. And then they finally allow you to go out on the road, but you have to be with someone else who's watching you and making sure that you're safe. And then, then you do another test to make sure you've reached a certain level and then eventually you're allowed to go on the highway where maybe the risk is the highest. But in trading, you can literally start the car and be on the highway immediately. Right?

Agnieszka: And just drive.

Day Trading Psychology:

Finding Balance, Perspective, and Defining Success

Agnieszka: Yeah, it's almost like this trading for a living kind of at some point takes over your living and this is not what you want, right? Because, you know, if you cannot mentally disconnect from the need of money, and the need of money will always be there, no matter how much money you make today, because everyone has to pay their bills. Everyone has obligations, so the need for money will be there. But if you are, whether you have your own business, or are you trading, if you cannot disconnect from, from that and just focus on what you're actually supposed to do when you are trading and just concentrating on money, that I think it is very difficult to, to distantiate and take off that pressure from yourself. And who can really perform under too much pressure. And to have a bit, it's okay, right? Because it keeps you sharp. But if you're completely stressed out because you think you will lose money, that's not gonna really help you to trade. So, after so many years of trading, how do you feel about trading? Like, what place does trading have in your life because you do spend a lot of time, you know, you're on Twitter. I don't know how much time on Twitter you spend but you do help other traders. I know you do different interviews. A lot of people know you. So, they approach you. You never say no. Well, I don't know never… You never said no to me so far. But do you feel you “made it” in terms of trading? And what does that mean?

Peter: Right. So, to me making it means, well, let me, let me back up for a sec. So, yeah, I spent a lot of trading is a passion. And it always has been right. So, you know, some people, they play golf, some people do whatever, it's like, me, I love to talk to traders, I love to read about trading. And I love to trade, right? And the thing that I've been able to say… As far as “made it”, the beauty now… I've gone through so many cycles, I've learned so many techniques, I found what works for me, right, which is hopefully you can do that earlier in your, early in your business, right? So, you don't have to keep shift shifting until you find that. Because if you can find what calls for you and then focus on it, then you can become, you know, an expert in it, right? But also, the thing I've learned is your personal circumstances change, you get older, your risk profile changes. So, you may go from… so there's nothing wrong with switching styles. And even that, what you've learned is that you may have to change styles because of the current market environment, right? Like, look at the last two years.

Agnieszka: I know.

Peter: You cannot make it, you cannot make a living as a Trend Trader. Right?

Peter: But, that knowledge of knowing, okay, this is a good time not to trade, say, as an example, or learn another technique, right, or, and be in tune with the market and what Bill always said want the market wants, right? So, you know, you gotta learn to dance with the market, you got to want what it wants. Not necessarily what… It's not what you want, the market doesn't care what you want, right? So, but that idea of being able to step back with the experience and say, I understand the cycles we're in, I understand what technique is going to work. And either I want to trade that way or I don't, like for the last two years, you know, it's a great time to be a Day Trader, right? Lots of volatility, lots. You can trade the five-minute chart and do great, but I have a full-time job. So, it's not something that I could do. But it was a great opportunity. Just like five years ago, it was great to be a Trend Trader or a Swing Trader, because you just bought the dips, bought the dips, bought the dips, and you can make a great living, right? But, but being able to see that and so when I say, when I've went to someone asked me, have you “made it”, to me that's making it, being able to understand all that and be able to adapt to it. And because there's also this false impression “made it” means you've made your million dollars, it's and again, this is how society portrays traders, on social media, as well as in the movies, right? And look at all the movies, right? Whether Wall Street, whatever it's like, it's all about greed. It's all about making all these, all this money. And they don't even look at the fact that a lot of these people that are like that are the ones that lose the biggest amount of money too. When you look at the biggest, most successful traders in the world, most of them have had devastating losses. Many of the many of the successful traders or, you know, historically successful traders that people read all their books have died broke, committed suicide, right? And that's a thing.

Agnieszka: Nobody talks about that though, right? In commercials.

Peter: Exactly. But that thing about trading? Well, again, there's a lot of people that they call themselves traders, they're really gamblers, they're high-risk takers, they have devastating losses, impact their family, their own personal lives, a lot of people commit suicide, there's definitely a negative side of the business. And it is very difficult. It is a hard business. But having that… Making it as far as having a good work-life balance, Trader-life balance is critical. And you can get so caught up in trading, that it becomes all-encompassing in your life. And it is like an addiction, right? And being able to recognize that, you know, if you're going down that path, it's probably not right for you and get out of it or get help. But it's, it's one of those things where it's easy to get caught up in that, right? And it's but having that balance, being patient, learning it slowly is, is what people aren’t saying out there and unfortunately, a lot of young people are getting sucked into the sales pitch and paying severe consequences because of it, right?

Agnieszka: Yeah, I love the way that you have explained what does that mean for you—“made it.” And I really hope that the listeners will take it very deep into their heart. Because that's exactly what I think the key is to success too, to have more distance to all that ideal picture of, you know, “made it” millionaire, and all this success that is kind of waiting somewhere and nobody really knows if anyone has achieved that, like, easily, right? Without getting bankrupt or getting a heart attack or all the other things you mentioned. So, if you look at the word “made it”, you have to, I think from the mindset perspective, you have to make trading it; it has to be this impersonal thing to you. But a lot of traders make it personal, they identify themselves through the money, through their success. So, they make it very personal and that makes it actually difficult to “make it” to make it impersonal. And it's very difficult for people to stop that. Because once you identify yourself with your success, and you then you really have to keep going, right? Because if you are not bringing something into success, it says everything about you personally.

Day Trading Psychology:

Market is always giving honest feedback

Agnieszka: The market gives you very honest feedback about yourself a very immediate, and you really have to be willing to listen and not negotiate, not resist it. Just just take the feedback, learn from it. And then it will be, it will be much softer for you, you will not get slapped that hard every time.

I gave this example, you know, that very first time when you let the loser go and it go, the price goes down, and you actually let it too far and go too far. And now you pray for the price to come back up. And it's almost like the market says, okay, this is the first time I'm gonna help you. Okay, this time, I'm gonna save you. So, you pray there, and you say, I promise I will never do that… This is the last the first and the last time I do it. So, you're saved. The market helps you. Now you can get break even. And you all… thank God, lucky me. But then instead of learning from this and say, wasn't I lucky, the next time that it happens, instead of saying, I'm not gonna do that mistake again. Say, you know what? Last time it worked. I'm gonna just wait until it comes back.

So, there you go, you see the feedback we are getting. And actually, if you start seeing things in that way, you get the lesson. If you don't learn, the lesson will be much harder, because you will have to pay.

Peter: Yeah. And not only that the market will entice you to do something even, even crazier the next time. So, that example, what'll happen is the next time you hold your loss, it's down 20%, you'll say I know it's going to come back so you'll add to the position, right?

And you'll keep adding to it and adding to it and that's where a lot of people end up blowing their account. They're saying, well it’s gonna come back, it always does. It might rescue you, but it's like, it's tough. It's testing you again. Yeah. Let's see what happens.

Agnieszka: You didn’t learn the first time. So you know, sorry, this time I already have to pay. I tried to help you. But sorry.

Peter: Exactly.

Day Trading Psychology:

Irrational Fears

Agnieszka: Do you ever struggle as a trader? Do you ever have a feeling like maybe that you missed it? So you, you were at work? And then you see the move? And you go like, I've missed it. I wish I was there. Or that you struggle because you took a loss? Or did you ever struggle?

Peter: Well, I struggle every day, I think most traders will most traders will say they struggle every day or learn something new every day. And when you say struggle, the question is how much do you struggle, right? So, this is that thing of like, let's say for example, FOMO (author's note: Fear of missing out, is the fear of not taking advantage of profitable opportunities or missing out on potential profits. This fear can cause traders to enter trades impulsively or hold onto positions longer than they should, leading to poor decision-making. 

Let’s use FOMO as an example. So, as an experienced trader - FOMO shouldn't bother you, you should say, opportunity is gonna come every day, right? Yeah, and you should be as experienced enough to see the FOMO, because FOMO will pop up, right?

Let's use you know, Bitcoin as an example. It's gonna go to the moon and everyone's making money. So, you know, during those periods, and I know, let's say the last 10 years, you've seen the marijuana stock bubble, you've seen the Bitcoin bubble, you've seen, you know…

There's always a bubble happening. And what's great now with my experience is to say, okay, I see what's happening, right, and I can, I can watch it. And sometimes you while knowing what's going to happen, you can take advantage and trade accordingly. Buying the new, the high and things like that. So, part of it is using that experience, understanding the FOMO because you can, you'll still feel it, right? So, you'll still, it's easy to get caught up in that, but the difference is not acting on it. And, and this is a thing about your emotional reactions.

So, do you struggle? Yes, you're human. You're gonna have emotions, you can’t help it. One of my big struggles is often taking profits too soon as an example. I'll just use that as, as an example. Right? So, obviously, if you take profits, and then the next, next week, it's up another 10%. You're like, kicking yourself, right? But, you know, putting it into the right perspective realizing, you know, this, I always say, one trade shouldn't make you but one trade can break you. Right? So, knowing that, okay, I missed that one, on to the next one and learn, it's not necessarily learning a lesson, but you do. Again, you're continuously learning.

If you want to listen to the full episode with Peter CLICK HERE to choose your favorite Podcast platform.