In this Episode of the Podcast join me as I engage in a fascinating conversation with Gary Portugal, a seasoned pro trader and investor. Together, we dive deep into the world of trading and uncover the truths that are rarely spoken about. If you've ever wondered whether it's truly possible for ordinary individuals to make a living from trading, this episode is a must-listen.

Gary's wealth of experience and expertise shine through as he shares invaluable insights and challenges commonly held beliefs. From the importance of discipline and mindset to the realities of trading in an ever-changing landscape, we explore the often-overlooked aspects of the trading journey.

And if you want to check out more episodes of the Confidence in Trading podcast, CLICK HERE.

Trading for a Living #3 of Confidence in Trading Podcast

In this Episode

Is Trading for a Living for Everyone?

A Professional Trader's Perspective

Agnieszka: So, what I wanted to ask you, from a professional trader point of view. Do you think it is realistic to think that trading for a living is actually possible for regular people, like, you know, retail traders? Or is it just a dream? Like, if you, if you look from the perspective of like you worked professionally, so many years? Are retail traders being seen as like, what, what are you trying to do?

Gary: I think it is possible. But I think that it's only possible, if you're prepared to quit to take quite a bit on onboard in terms of discipline, in terms of preparation that you need to do. If you're prepared to take on things like mindset. And I would argue that a lot of people aren't prepared to do that, that extra work, that to me is the real work. Being able to maybe sit in front of a screen and read and learn, do some research, you know, put some thoughts together, actually not trade, I think to make money, a lot of what you have to do is it can sometimes be very unsexy. But I think it's not going to be for it. It's not going to be for some people because of that. In other words, for anyone who thinks that the route to doing this profitably is like, as you suggested, just trading constantly and equating trading constantly with working hard. That's not the case. And I think that there are a lot of people who will fall in or fit into that category. So, realistically speaking, I would say probably, you know, for the majority of people, it's not realistic. And when I say majority, I'm not saying that 90% of the people are going to fail, I don't, I don't think it's that. We all know what the statistics are about strengthening platforms and how many people lose money. But maybe a more positive way of phrasing it is that, if you are prepared to have a process and work on improving that process, and operate with discipline, both maybe in trading and other aspects of your life, that that's not going to guarantee you of success, but that's going to, that's going to increase the likelihood of success. And then getting back to what we've said before, is the element of time. In other words, if you have time on your side, if you're able to allocate a period of even years to get good enough. That I think, can work. The issue is that for many people that, that isn't realistic, they need income now, they can't just give up their day job. And then so I'm gonna spend the next three years, you know, barely or barely covering my costs, they have to live, they have to eat. That's why I think for a lot of people, it may not be realistic. If you can do it in the beginning, such that it's a supplement to your income rather than maybe being wholly dependent on it. I think that increases your odds of success. But, I mean, I don't think there's any quick route and that's the other thing. Anybody entering this, if you're looking for a quick route, it's not going to happen unless you have tremendous natural talent and of course, there are people like that. I think they are the exceptions.

 

The Realities of Day Trading:

Why It Won't Be Easy

Agnieszka: Most of traders who are getting into trading is because they like challenge because they're ambitious, right? But then the moment they're there and it starts to be difficult. The focus switches to, when it's gonna stop to be difficult?

Gary: Exactly. I mean, like, Can you, can you just embrace the fact that it's not just gonna all of a sudden become easy? Can, Can you just take that on board and say, okay, it might get a bit easier, but it's not going to become easy? And I'll tell you why it won't be easy, it won't become easy, because conditions are always going to change. And I think is part of what makes it challenging and difficult. Is that regimes change, conditions change, and I think now faster than ever. You know, because of what I said before because of the availability of information. You know, narratives and trends are changing like at lightning speed compared to how they did before. So, you could find yourself maybe making some money in the early part of the week, but if you're not careful to sort of recognize the shift in the narrative, in the middle of the week, in a lot of parts of the week you can end up giving a lot of that money back.

 

Emotional Capital

in Day Trading

Agnieszka: When I day trade, I evaluate and look back at the bigger picture of, you know, the moment in time that I trade a momentum stock, and then I look at the bigger move. It's just so revealing, like how much you can make yourself emotional and crazy about this little move on, I don't know, five minutes or one-minute chart? Well, in a bigger picture, you think if I would just get in here and stay for a few days, I would not lost all my emotional capital, and I would have much more money...

Gary: Absolutely. I mean, you hit on. And that's a great phrase, emotional capital, which I think is overlooked. Yes, obviously, we all do this, to make money, we want to be profitable doing it. But there's, there's emotional capital that you expend as well. And you have to make sure that that's being used wisely, that you're not just burning yourself out or spinning your wheels. And the biggest reward, I don't think and, obviously, there are exceptions. But generally speaking, I don't think it's reward, it's gonna come fly, be able to predict the next hour's move, the next five minutes of me, you can drive yourself crazy doing that, unless you're doing that in very significant size, I'm not sure that it's going to really be that productive anyway. Whereas, if you're, if you see a bigger moves in whatever it is, whether it's Tesla, whether it's a currency or whatever, and you're not rushing yourself to make the money within 24 hours and saying, Oh, the P&L has to be made by Tuesday morning. If there isn't that sort of time limit on, I think you have a greater chance of success. In other words, because the move doesn't happen immediately, doesn't mean that it's not going to happen. And because it hasn't happened by the end of the trading day doesn't mean that you should take the risk off either. And so yes, that's kind of a place I got to eventually, but literally trading less frequently was much more productive. And then trying to couple that with what I have, you know, less frequently meeting when I really have strong conviction. And then backing myself, trying to back myself accordingly, instead of just trading elective with a normal size might be if I have like an idea or hunch or whatever, actually trading over and above that, a bit more, because I really have a high confidence level. And because I know that I've been disciplined, and stayed away from a lot of what I call the garbage trades, of you stay away from the junk, and you have more, both actual capital and emotional capital, to invest when it counts, and I think you almost feel psychologically entitled to it. And so you know, what, I've been, been good, I haven't wasted it on on junkie trades, I’ve been patient, this is what I've been looking for. And we're gonna do this. And If it doesn't work, you know, that's okay, you're allowed to get it wrong, you'll have to get out of the mistake, if you make a mistake. Because if you take time, if you have 10 trades provided at the risk-reward ratio, which I haven't really gotten into yet here, but provided the risk-reward ratio is good enough. I mean, it's not easy, but my preference is to look for three-to-one. And if you, if you're looking to make three times what you're risking, it's really an incredible figure. If you do the math, you can actually be wrong 70% of the time, and still, make money. So, it's not in my opinion, it's not about being right like all the times, of course, we all want to be right as often as we can, but that's not the requirement.

Mistakes as Feedback

How to Build Confidence in Trading for Living

Agnieszka: I think it's really the matter of taking things very personally. That has a lot to do with experiences that people have, and that are getting triggered on a deeper level. Because a lot of times what I see is that mistakes instead of being taken as feedback, and in a way to adjust the course, are being taken as failures, and a way to cut your confidence. And if you don't have confidence, your commitment is gonna also get less. Yeah. And without commitment, you're going to question everything. And then this whole process just collapses.

Gary: I think as well had the, the element of ego is important. You often see people mentioned this dealing with trader psychology. But when we go to school, we're trained to be right, we're trained to get it right, you know, 90 to 100% of the time. So, entering a field, where actually, that's not necessary, it's okay to even be wrong half the time or even if you're you might even be able to get away with being wrong more than half the time. That goes against the grain. I think people, it hurt their egos, like, how can I have done that wrong? How can I get it wrong three straight times? You know, why did this not happen in my previous line of work, or my previous job, or in school? I was always a top student. And, you know, markets are different. It's not just about the percentage of times that you're right. Obviously, that helps. But that's not the only element. I think a lot of times, people's egos can get in the way and so I don't want to do this because, you know, I can't handle being wrong. I can't handle how it makes me feel being wrong. What that feeling does to me. You know, and I suppose it takes an element of humility, that as well to be able to say, yeah, you know what? I do get it wrong. In fact, I get it wrong often, but I'm willing to recognize that quickly, and not let it build up and fester.

Agnieszka: Yeah, don't make drama out of it. Because it is. It's a matter of focus, right? You're, wrong many times, but it is not about being wrong. So, why putting so much focus on it, the moment that you start putting focus on being wrong. Now you're only fighting to be right. So, and that brings a lot of traders into trouble, like if you take the wrong decision and start fighting the market. Now you're really wrong.

 

Trading for Living:

It's a Journey of Never-Ending Improvement

Agnieszka: So as a professional trader, have you ever felt it, I made it. Because we talked a lot about having success. And traders have this idea of the day that will come at some point, when I made it. And I always tried to bring over the message, day like that doesn't exist, because that would mean that once you reach it, is then you'd have can relax and just not work hard anymore. And I don't think it exists in trading. But have you ever had that moment? Okay, I made it, or is there always that uncertainty?

Gary: I think there's always an element of at least for me, there's always an element of uncertainty. Although there have been, I think there have been times to in my life where, when I felt like my confidence has risen. And like my competence, you know, has risen, that I've been, you know, through experience really knowing when to recognize situations that are in the react to those situations faster, when I recognize them. But I agree with you, I've never felt, where I reach a point and I go, oh, wow, I feel like I've got this figured out. And I can therefore allow myself to lower my discipline or get lazy with my process. I say this all the time. I think it never ends. I mean, whether you're 30, 50, 70, or during this, this, you know, you're always growing, and there's always room for improvement. And I think it's better to look at it that way, instead of saying, I want to reach a day where, you know, I can just turn on the light switch, I can say I've made it. I mean, I think, if that's what you're looking for, I think you're gonna be disappointed. Whereas, if it's more a case of just ongoing, incremental improvements, your results and your process, you're going to be happier and I think you're going to do better, in the end, and also accepting that you're never going to fully figure this out. Never. I mean, even the best, you're never, you know, they're always going to be times when you get something dead wrong, even when you thought you had 100%. You know, properly analyzed, and I think it requires that sort of humility as well. And rationality to say that, you know, that's okay. You know, the goal isn't to be like, the Lewis Hamilton of trade.

 

If you want to listen to more episodes of the Confidence in Trading podcast, CLICK HERE.