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Introduction to the Market Mamas Podcast Interview with Adrian Reid
In this engaging episode of the Market Mamas Podcast, Adrian Reid, founder of Enlightened Stock Trading, shares his journey from struggling trader to becoming a master of systematic trading. We focus on some really interesting trading psychology issues as well. Adrian opens up about the lessons learned, challenges faced, and the mindset shifts required to trade with confidence and consistency. This episode provides useful insights for traders at any level, as Adrian candidly discusses his approach to building automated systems, balancing emotions, and achieving success in trading.
Whether you’re a day trader, swing trader, or exploring systematic approaches, this conversation will leave you inspired and equipped with actionable advice to elevate your trading journey.
Key Trading Lessons from the Interview
- Start with Systems: Adrian highlights the importance of starting with proven strategies instead of trying to “reinvent the wheel.”
- Test Your Emotions: Use emotional reactions as data points for backtesting and refining your systems, rather than suppressing them.
- Avoid Divergent Learning: Focus deeply on a few strategies rather than scattering attention across too many shiny ideas.
- Embrace Automation: Adrian’s fully automated systems allow him to trade multiple markets and conditions with minimal time investment.
- Portfolio Diversification: Build multiple systems to thrive in varying market conditions, including bullish, bearish, and sideways trends.
- Consistency Over Emotion: Systematize every aspect of your trading to minimize emotional interference and decision-making errors.
- Learn from Setbacks: Failures and losses can be leveraged as stepping stones to refine trading systems and build confidence.
- Education Accelerates Progress: Adrian advocates for mentorship and learning from others to shorten the time to trading mastery.
- Long-Term Thinking: Trading success is about staying in the game for decades, not hitting quick jackpots.
10 Quotes from the Interview
Transcript of Adrian Reid’s Interview on Market Mammas Podcast
Becky: [00:00:00] Hello and welcome back to our podcast, Market Mamas. I’m Becky here with my co host Kendra, and we are super excited for today’s episode. As a trading psychology podcast, we strive to bring you all meaningful conversations that will help elevate your game in whatever your pursuits are, whether it’s trading or otherwise.
And so we find such value between us, um, with our, and within our personal communities and just discussing the topics that serve and support us the most. And one of our very favorite things is to talk to fellow traders. So even when, if we trade different instruments, different timeframes or styles, there’s generally always so much crossover.
between the experiences of traders and so sharing tips and tricks and experiences, it can be really helpful to kind of make us feel more normal with what we’re all working towards and as we create our most effective trading systems. So it’s with great pleasure that I get to welcome trader and mentor Adrian to our show.
Welcome.
Adrian Reid: Hey, thanks so much for having me. I’m excited to be here and I love the energy you guys bring to your show. So I think this is going to be really fun. And I really love what you just said to normalize the things that we’re going through because. I don’t think people realize how challenging and different this is when they first get into it, or at least most people.
And I think normalizing the emotional turmoil that we go through as traders is really, really powerful. So I’m looking forward to getting into that.
Kendra: 100%. And that was Becky and my intention. to have a safe space because we create a safe space between the two of us. And as our viewers know, when we first became accountability partners, and we were going through the very, very difficult stage of just learning and trying to get our feet wet and encourage each other.
And so that’s what we want our channel to provide as well. So if you want to get started by telling us and everyone just a little more about yourself, what got you into the world of trading and where you’re from. When did you start? And just how it all came about for you, please.
Adrian Reid: Yeah, sure. Absolutely.
Well, I mean, as you said, my name’s Adrian. I’m, uh, I’m the founder of Enlightened Stock Trading, but before that, I’ve been a trader for, for 25 years. I’m from Australia, so the accent’s a bit funny. I apologize for that.
Love it.
Adrian Reid: Thank you. So, look, I, I started trading a long time ago, and the reason I started was because, I mean, for a start, I, I was fascinated by the markets and I got.
Originally, I started getting into or interested in the markets because of a board game. Uh, if you can believe it, we had a board game called the Stock Market Game when I was a kid. And the Stock Market Game was just so cool. It was like Monopoly, but a thousand times more interesting. Because Monopoly is super slow, right?
You have to kind of go around and around and around and around and around, and eventually maybe you’ll have enough money to buy a property, and then, you You know, blah, blah. You know how it is. Property is to the
Becky: condo.
Adrian Reid: Yeah, exactly right. But the stock market game, every square was a, uh, a different stock on the Australian market.
So it’s Australian game and every square you landed on, the market went up or down and you can buy or sell, you can collect dividends. And it was just so dynamic. You know, you go around the board and the market moves. It’s like, okay, the market’s down. So I’m going to buy this. The market’s up. So I’m going to buy that or [00:03:00] sell that or whatever it is.
And I just love that. And you play for a couple of hours, you end up being a paper billionaire and it feels great, and so I thought the stock market is just awesome. Little did I know it didn’t actually teach very good trading strategy, but that’s sort of a lesson for many years later. Um, so fast forward to when I started work, I, um, I started working in a consulting firm and doing business strategy and sort of corporate finance type stuff.
And, uh, the hours are really punishing in that sort of job. And it took me about five minutes to realize I didn’t want to do that for the rest of my life. So I said to my dad, Hey, I want to retire early. And he laughed at me because he said, like, you’ve only just started. What do you mean retire early? And, uh, then we got into the serious conversation about, okay, well, you’ve got to invest and you’ve got to save money and, you know, here’s some different things you could do.
And I didn’t have the money for property at the time. And to be honest, I didn’t actually, I wasn’t that interested in it. So the stock market was the obvious. Kind of next place to look. And that was sort of the start, if you like. And then I went through the usual, you know, palaver of trying all the different methods and, you know, most things didn’t work and getting confused and, um, reading a million books and, and then eventually I landed on what I do today, which is systematic stock trading.
Um, which, you know, we can get into a little more how I discovered systematic trading and why I, I love that method. But that’s basically the story of how I got started.
Becky: Yeah. I feel like we all just like, once you get your feet wet and you decide this is awesome, then it gets super messy. Cause you’re like, it’s so awesome.
There’s so many things to look at. Like squirrel. I want to look at all of it and learn it all. And definitely it’s all goldmine. And yeah, that’s right. Yeah.
Adrian Reid: What’s, what’s interesting is when, when we, and I’ve, I’ve seen this with a lot of people, we’re getting interested in the markets and then there’s this massive divergent learning, which is this and there’s this and there’s this and someone else is doing that and someone else is doing that and.
Um, you know, I mean, you can’t quite see in my screen there, but I’ve got, you know, dozens and dozens of trading books on my shelves, as I’m sure you guys do. And I’ve read hundreds over the years, many hundreds. And if I looked at the number of books that actually mattered for my path, for the journey that I’m on right now, most of them didn’t matter.
Because it was all in that divergent learning phase where I’m distracted by shiny objects trying to find something that appealed. And then I found something, and this went, you know, did, went into the convergent sort of learning phase, and just doubled down, focused on one thing, and then all of a sudden it started working.
Becky: Okay, that’s like where Kendra and I are at. Like, we also were exposed to a lot and learned a lot, and then we, we, so we both kind of dialed into futures day trading is what we, The niche that we’ve locked into right now. And we are focused with advanced mentors and really dialing in our process with studying and replaying and journaling and figuring out our best system within that and finding some profitability now.
And so that’s exactly it. You know, you look at everything and then you start to niche down. I feel I can figure out what speaks to you, the timeframes, the instrument, and then that’s when you actually can start getting [00:06:00] some real outcomes that you were daydreaming of the first year or two. So a lot of people know Kendra and I.
If they’ve watched the show before that we are futures day traders in the U. S. indices. So what about you? So you do stocks predominantly, yeah?
Adrian Reid: Yeah, I trade stocks and crypto and I trade 100 percent systematically on daily or weekly charts. So, and the reason I do that is because when I started, I was working full time in a very intense job and there was zero chance I had time to day trade.
And I did actually try it and my one day trading experience, I did it for about three weeks and I lost 30, 000 and that was a warning sign to me and many others that if you have a full time job and you’re sitting at your desk and your boss expects something from you and you’re supposed to be at client meetings, don’t day trade.
Right?
Becky: Yeah.
Adrian Reid: If it fits your lifestyle, great. But if it doesn’t, then, you know, I think be honest about that and find a strategy, find a method that does. So I was, um, I was working in a pretty intense environment and I was traveling. I had, um, you know, very early on, I had, I was managing projects in three different cities.
So three different projects in three different cities and flying between the cities basically every week. And so it was pretty tough to fit trading in. And so I developed the method to allow me to trade despite that intensity of lifestyle, I guess. So yeah, stocks and crypto, systematic, which means no discretion at all.
Everything is 100 percent rules based. Everything is computerized. In fact, now everything is 100 percent automated. So the computer runs the whole thing, it’s in the cloud and it basically every day it updates the data, it runs the backtest to generate the signals, places the trades, reports back, so I kind of like the lifestyle to be honest.
Kendra: That’s amazing, that’s like way over my head right now. Can you kind of just break that down, like a timeline of how you were able to get to the point you are now?
Adrian Reid: Well yeah, so the point, good question and you’re right, it’s, It’s a progression, right? Um, so where I am now, fully automated stocks and crypto across Australia, US, Hong Kong, Canada, plus crypto, that’s all in the cloud on a virtual private server.
Okay, that’s where I am now, 25 years later. So most, it takes time to get there. Um, I would say my students now, the people I work with, it doesn’t take that long to get there, like six, Six to twelve months to get to where I am. Yeah. If they’ve got enough capital, because, you know, we can skip the divergent learning and go straight to the, this is the thing.
And this is exactly what you do. But my path was much more windy. Yeah. So at the beginning, I tried stocks with fundamental analysis and technical analysis, and I tried tips and I tried broker recommendations and all of the different things. And then I found systematic trading, and I, I built my first system, and then I had, well, actually just before I had my first system, I had like a quasi sort of system, you know, checklist, kind of, okay, this and this and this sort of have to happen, and if it looks good, looks good, whatever that means, then I buy it.
But when I got to that stage, I had good risk management, I had some rules, I knew that I was buying stocks that were trending fast, holding them for the long term, not long [00:09:00] term as in forever, but for the long term trend, right? And so I found this stock, and the stock was a small mining company in Australia, and I bought it, and that was the trade that changed everything.
Because it was the perfect setup, I bought it. I followed my rules. I bought the right amount. It went not to the moon, but it went a long way towards the moon. And my account doubled as a result of that trade. I’d pyramided in a couple of times. And when I got to the end of that trade, I was like, this is what I’m doing for the rest of the month.
Right.
And so
Adrian Reid: I took that, I took that trade and I converted it to the system. So I got rid of all the discretion, put rules around it, tested it, and put that in place. And basically, more or less, I ended up trading that system for about seven years before I did anything else. I’d made some tweaks to it, I had some bumps along the way, I had to correct some things, my stops were way too tight, my position sizing was a bit too aggressive, blah blah blah.
But that one system took me basically up to sort of For 400, 000 in the account from 15, 000, that was kind of like the big, the big thing. What’s interesting though, is that success trapped me, because I had one strategy that worked. I tried all this other stuff that didn’t work. I was, frankly, I think I was a bit terrified that if I did anything else, I would just lose money.
Because everything else I had done lost money. So I just clung to this dogmatically. This was my one approach. This is the way that works. This is how you trade. And I just did that for so long, which was great because it made me money, but bad because it left so much money on the table.
Becky: God, you seriously are like speaking to my soul right now because I’m in this place where like within futures day trading, I find so much success in scalping.
And I have a large history as an ER nurse and I really am like quick pace works for me and I love the in at the bottom, out at the top, like I take a bullish engulfing on the five minute and I’m set and I like trade copy it. But I also recognize that that, but while I see those and I can grab them on a lot of the days, I’m leaving so much money on the table.
And I, you know, Ken and I talk about this and I talk about it. With my mentor and within my community, and it’s like, there’s so many more moves. And so when you find something that you’re good at, that you can consistently make profits at, it is kind of like a golden handcuff situation because you don’t want to abandon it, but you know that there’s like so much potential within trading.
There’s so much potential, which is a huge part of it that we love. But it’s also, it is tricky to start finding success and then know that you want to diversify and expand. But to be a little bit fearful as well of like messing up what you’ve already achieved.
Adrian Reid: Yeah, absolutely. There’s this, there’s a challenge in trading, in many areas of trading actually, where you’ve sort of got to hold two opposite thoughts in your mind at the same time.
Like you’ve got to be optimistic that my strategy works, but pessimistic that this trade is probably going to be a loss so I need to be ready to stop it out.
So you
Adrian Reid: gotta, and you have to have those two thoughts in your mind at the same time. And this is the same, like I’ve got this method which I need to stick to, but I also need to diversify.
You know, it’s, it’s psychologically, it’s pretty tough, right?
Kendra: Yeah. Like two things can be [00:12:00] simultaneously true at once. Right. And
Adrian Reid: apparently they could be, they face value, they appear opposite. So
Kendra: they both have to be in play. Yeah.
Adrian Reid: Yeah.
Kendra: So if you could tell us more about your automated system that you said, so for about seven years you committed, like what were the, some specific parameters you could share with us around that?
Like the hard rules, um, that you stuck to for so long, because seven years is a long time to commit to one system. Oh
Adrian Reid: yeah, it really is, isn’t it? And look, and looking back on it, it was a huge mistake, right? It made me money and it was great. but I was way too slow to diversify and, you know, I’d be so much better off had I diversified sooner.
And this is part of the, you know, part of my push now is to educate people that you need a system, but not just one system. You need strategies that cover systems that cover multiple different market conditions, multiple different markets and so on. So that one strategy, that was a long term trend following strategy on Australian stocks.
Now you can do this. I was trading Australian stocks because A, I’m Australian and B, at the time it was costing me. 40 to buy and 40 to sell brokerage per trade. Um, to trade a US stock, it was 150 to buy and 150 to sell. That’s heavy
Becky: commission. Goodness.
Adrian Reid: It’s crazy. Like back then, like we didn’t have, I mean, they weren’t really discount brokers that were just starting.
And, um, it was just really difficult to trade anything else other than the local market.
Kendra: What year was this? Just for context,
Adrian Reid: what years? So it was, it was about 2000. Yeah, thereabouts. Yeah. So anyway, so it was a long term trend following system and the crux of it was buy long term breakouts and then hold for a, uh, hold for the entire move.
If it, if it went a little bit against you at the beginning, stop out. And if it moved in your favor, uh, trail a really wide trailing stop. I think 25, 30 percent wide trailing stock was about a six or seven average true range trailing stock. And that was enough to catch big moves in small cap miners, mining stocks, which is, you know, the Australian market is pretty, it has a lot of those.
We have a lot of explorers, a lot of mining companies. And so what I was looking for was The sort of companies that made a big discovery and then moved on to becoming a producer. Not that I cared about any of that, I just cared that it was a big move. And big diversification, so each position was pretty small, 20 stocks in the portfolio, all managed by the same rules.
So that was at the beginning. Now, I have systems very much like that, but I have short term, medium term, and long term systems. And I have systems that cover trend following, so buying something that’s going up and holding it until it’s very obviously coming down on the daily or weekly chart. I have rotational momentum strategies, which is buy the strongest stocks, and then when they’re no longer the strongest stocks, sell them, and then buy the new strongest stocks.
So you’re constantly rotating into strength. And I have mean reversion strategies, which is something that’s going up and it takes a sudden dip, you buy it because it’s likely to bounce, and if it keeps going down, then you get out. And then I also have short side systems to make money when the market goes [00:15:00] down.
So I’ve gone from just trend following, being absolutely dogmatic about one strategy and one market, to very diversified. Uh, and so I think when I, when I did my capital allocation just recently, I had 19 different systems in stocks, and there’s a similar sort of number of systems in, in crypto and, uh, and they’re all being, yeah, all being run automatically.
Becky: It sounds as if you have sort of created your own system. I’m wondering how much early on you, you used resources and mentors and programs, and then when did you start to pivot to sort of fine tuning your own system? And it sounds like you’ve designed it. And so how did that look for you in terms of taking guidance from others and then pivoting into running your own situation?
Adrian Reid: It’s a really good question. And what I did is probably not what people should do because I spent a lot of time trying to figure it out on my own, partly because Uh, I bought a lot of books and I read a lot of books about, um, about trading and most of them came from the U. S., from U. S. based authors. And what’s interesting is the, the markets move a little differently.
So the, what works well in the U. S. doesn’t necessarily always, you know, work well in Australia and vice versa. And it took me quite a while to figure out the reason I wasn’t I wasn’t able to find success or the success that I wanted was because the strategies, uh, were made for a different market. And so I, um, there were a couple of trading mentors in Australia at the time, but none of them really resonated with me.
And so my journey was mostly about figuring out first that I had to translate what was happening in one market. to another market because it’s, you know, it’s like a slightly different language, slightly different market participants, different dynamics. And, um, and so I, I, I found strategies and systems and then converted them and learned to test and design them myself.
So my first real success came from a strategy that I built, not one that came from a mentor. Now though, There’s a lot more information about how to trade successfully. There’s a lot more people offering support. I mean, my business does it, you guys do it, lots of podcasts and so on. And I think now the fastest path is definitely not to start by developing your own strategy.
My approach is here’s a, here’s a system or a strategy that works. Let me show you why it works. Then let me show you how to test it so that you can build confidence in yourself. Thank you. That it works, not just taking my word for it. So test an existing strategy and then start trading it. And then you can say, okay, well, that’s one strategy.
Let’s get a few more strategies in diversified portfolio. None of which you’ve probably built yourself, but all of which you’ve tested for yourself so that they become yours. They just didn’t start off as yours. And then later, when you’re kind of more at the mastery stage, it’s build your own strategy.
Because now you have all of the groundwork, all the foundation, and you can start to do that. So my, my journey was hard and slow, because I tried to, I learnt it all my, figured it all out. Not my, I didn’t figure it out myself, I don’t want to sound like arrogant like that. [00:18:00] It’s more just that I struggled through by piecing together information from lots of different places.
And then, designed and backtested my own, my own system. Whereas right now, if I work with someone, for example, it’s like, you know, on in the first week, it’s like, well, here’s a system that works and here’s why it works. And here’s how you manage your risk. And this is how you test it. And so on. It’s much quicker.
So
Becky: to be fair, I mean, it has changed so much in the last 20 years. I mean, the availability, just, you’ve mentioned, it’s just astronomically diverse now. I mean, there’s so much opportunity to learn so many things. Yeah,
Adrian Reid: and there’s
Becky: platforms, because now
Adrian Reid: it’s, well, what do I learn and there’s all these shiny objects and, um, and that’s then something we, you know, we then have to learn to focus.
And cause it takes deep learning, right? We can’t, you can’t just do a peripheral trading and yeah, buy strength and sell you know, blah, blah, blah, you know, buy dips. And like, you can’t just do what seems intuitively obvious at base value because it doesn’t work. So we’ve got to, you know, people have to go deep on something and master it because otherwise.
You just, you gamble it.
Kendra: And I think a lot of building that edge too, has to match your personality. And that’s a major factor that is going to be challenging if you’re, have this hundred mentors, different mentors to, you know, choose from, and who are you going to really, what system is going to work for you?
So with your system, since it’s all automated and you said you diversified, so you could trade different strategies across different market conditions. So how does that work then within your system? So does your system define when market conditions have changed? And okay, now we’re trading this strategy.
Now, now we’re picking up, you know, these stocks instead. And also, how does it work in terms of like how many positions you would have on at once? I mean, how do you build in those parameters? Cause it sounds amazing. It’s still over my head.
Adrian Reid: Yeah, no, really, really, really good questions. So what I, the best way to explain it is the building block is the system.
So the system, as I define it, is one set of buy and sell rules that tells you exactly how to get it in and exactly how to get it out of the market. So one system is just that. You can trade it on its own with nothing else. So what I have is a portfolio of many different systems, each that do different things, that work in different markets, that work in different market conditions.
And each of those systems is fully self contained. So it knows, I mean, the rules define when you should and shouldn’t trade that system. So for example, long term trend following on the long side, we’re only going to do in a bull market. If it’s a bear market, we’re not going to do it. So the system has a rule.
There’s a rule that says we’re only going to take a trade if the index, the relevant index is behaving in a certain way going up. Yeah, if that, if the index is going down long term, then that system will not generate a signal. So that’s fully self contained. But there’s another system over here, which is a short side system that will generate signals when the index is going down, but won’t generate signals when the index is going up.
So each set of rules fully contained to specify the conditions under which it can make money.
Kendra: [00:21:00] Okay, so for example, one system would allow you to say enter a counter trend trade versus another system would not.
Adrian Reid: Exactly. Yeah, exactly right. Exactly right. So I’m not trying to create one system that does everything.
That doesn’t work. It’s impossible. What we want to do is have different systems that make money in different market conditions. Yeah, so I have a system that will make money in a strong bull market in Australia. I have systems that will make money in a strong bull market in the U. S. I have a system that will make money in a strong bear market in the U.
- And so on. Then the job of the, of the portfolio trader, which is what we’re doing, is to combine the systems with different weightings so that the whole portfolio will perform over time. Each system, you know, a system might have somewhere between 1 and 20 positions within the system. Yeah. And then imagine you have five, 10 systems, obviously you can have a lot of positions in the portfolio, but they’re all managed very easily because the system tells you exactly when to buy and sell.
Becky: You essentially create the parameters that say, if these conditions arise at this level with this support data behind it, then I will execute a long position. And then if I, in said long position, if the market does X, Y, Z, then that will trigger me to exit either to cut my loss or to capitalize on the profits at this point.
Adrian Reid: Exactly right. So the rules. of when to get in, how much to buy or short sell, and when to get out, uh, absolute, absolute and objective. So there’s no interpretation required. It’s just all formulas, indicators that tells you exactly when to do those things. So then our job is to combine these different sets of rules, different systems into a portfolio with different weightings.
So what I do is I look at when each system performs and when it doesn’t perform and combine them in different weightings so that the sum total effect is the same. You know, it helps me meet my objectives. Yeah. So I have a capital allocation spreadsheet that does that. It brings in the backtest for each of the different systems.
I can change the weightings and see how the combined effect would have worked in the past. And I can do a bunch of sort of probability sort of analysis on that to figure out whether I should have more in this system or less in this system.
Kendra: That’s what I was going to ask next. So essentially you’re having to constantly allocate capital to which systems are kind of performing best.
So have you noticed patterns since you’ve been trading for 25 years now, like during the year, like cycles that you have, like, kind of like you already know what’s coming up? Oh,
Adrian Reid: good question. I just want to rewind just a touch because you said something which was interesting. Um, I’m going to paraphrase, but it was basically that you allocate Capital to different systems depending on what’s working or what’s performing the best.
The, the approach for a portfolio trading, um, kind of business like this is not dynamic in that I’m not shifting capital from this to that all the time and, and making decisions to turn this off and turn that on the systems always have their allocation of capital. They may or may not be using it because a system could be on using its capital or off not using its capital.
And I have many systems that are layered together, but when a system turns on or off, it’s always got the same [00:24:00] percentage capital exposure available to it when it’s on.
Becky: You have pulled the discretionary out of all of it.
Adrian Reid: Absolutely. Yeah, absolutely. Because you know, the emotions get in the way, right? If you’re just trading on a purely discretionary basis, the emotions get in the way at the trade level.
You know, should I buy this stock? Should I sell this stock? I really like this stock. I’ll buy more. I really, I’m nervous at the moment. I’ll buy less. Like, that, that, the emotion gets in the way. That emotion will get in the way at different levels depending on where you let it creep in. So, I’m purely systematic.
So, there’s no emotion at the trade level. The system just buys and sells. I don’t care. Like, I’ve got so many trades on. It doesn’t matter if one’s a winner or a loser. I’m completely disconnected from the outcome of one trade. But further up the chain, if I have 10 different systems, and I’m making a decision to turn one on or off based on whether it worked last week or not, or whether I think it’s going to work next week or not, guess what?
That emotion creeps right back in, but it’s at a higher level affecting more trades. So that’s actually quite dangerous. So instead, my, my approach is to allocate capital so that no matter what happens next. I’ll be okay. And that’s, that’s the main, uh, the main thing I think that, uh, that traders need to get to.
We need to make sure that we stay in the game, no matter what happens tomorrow. We have to survive to trade the next day. No matter what happens next month, next year, we’re going to survive to trade the next month, the next year. And so, uh, I, that’s my primary focus when I’m building the portfolio systems is making sure that no matter what happens, I’ll be okay.
So there’s not a lot of leverage because if the market crashes, I don’t want to be wiped out. It’s my living, right? It’s important for me to preserve capital. And if the market goes up, I want to be able to make money. If the market goes down, I want to be able to make money. So I need to have. Strategies and systems that can make money in different market conditions.
And when those conditions emerge tomorrow, that strategy will automatically generate a trade because the conditions are right. Yeah. Now, it doesn’t mean that every day I make money. You don’t because trading is volatile. The markets are uncertain. There’s a lot of noise. So there’s up days and down days, up weeks and down weeks, up months and down months.
But if you take a long term perspective, having strategies that will perform in a whole range of different market conditions, and if you allocate capital correctly, it means that you don’t have to worry so much about what might happen. Does that make sense?
Becky: Yeah. You cut out the fear and greed potential of manipulating your choices and you keep your risk tolerance consistent and managed so that your accounts overall will withstand whatever happens.
Adrian Reid: Yeah, yeah, absolutely. So when I’m doing that capital allocation, I’ll look at, all right, how much long side exposure do I have to this market? How much, no, sorry, how much long side exposure could I have to this market as a maximum? Am I comfortable with that? And then I can just do a scenario analysis and say, okay, well, if the market crashed and I had that much long side exposure, would I be okay?
And then how much short side exposure could I have to that market? And if the market suddenly [00:27:00] rallied, then would I be okay? And this is about making sure that no matter what happens, I can stay in the game because that’s the number one thing. Like I could make a thousand percent this year, but if I lose a hundred percent next year, I’m out of the game.
You know, the thousand percent means nothing. So that’s not the primary goal. A primary goal should be absolutely staying in the game. That’s number one.
Kendra: I love that. That’s the best advice ever for sure. If we can backtrack a little bit, I believe at the beginning you mentioned the timeframes that you trade on and the.
period that your trades usually go for. Can you tell, talk a little more about that and just how long you spend, like how long, because since your system’s already given the, um, alerts and the, um, indications, how, because like Rebecca and I, for example, what we do, I’m sure, is It’s completely so different than, than what you’re doing.
So I’m just curious to know, and I’m sure our viewers are too, what your typical day looks like, what your week looks like, how much screen time you spend, just how, what, what goes in, um, to working your system?
Adrian Reid: Yeah. Good question. And you’re right. It is quite different. Um, but that’s okay. Right. A lot of the psychological things are very, very similar.
I, I use daily and weekly charts. So, um, I think Becky, you mentioned five minute charts and I went, ugh, you know. You know, that’s okay. We’re all different and I’m definitely not an ER nurse type of person. I would not function in that environment. You do, you can. So therefore, you know, um, you have different trading skills than I have, which is great.
But I, I use daily charts because I was, you know, I, I realized very quickly after the whole day trading debacle that I went through that I mentioned earlier, I wasn’t going to be able to look at the charts during the day and do it consistently enough to make money. So I had to use daily charts and look at the markets when the markets were closed.
So my approach is end of day position trading essentially, where I get the data at the end of the day of what all of the different stocks and markets did, and when the market is closed I make my decision, well the system makes the decision, and I place my trades for the next morning. So the, um, the process is actually really simple.
It’s press the button to download the data from the, from the trading day after the trading day is finished. Then I press the button to run the backtest to generate the signals for the next day for each of my strategies. And then I go and place those orders in the, in my platform and then I close the computer.
That’s it. So generally when I was trading manually, it took somewhere between 5 and 30 minutes a day. And I did that basically at night or first thing in the morning before I went to work.
Well, awesome.
Adrian Reid: And, um, You know, the upside of that is it’s very easy to fit that into your, into a lifestyle where you’re working and family and all of that.
The downside is you’ve got to be willing to take overnight risk, which a lot of people aren’t. Personally, I don’t actually know why I think overnight risk is one of the best things you can do because there’s a lot of overnight edge in the markets. If you look at the S& P 500 for the last, you know, several decades, and you look at the movement that happened Open to close during the day.
And you look at the move, movement that happened close to open overnight, when the market was closed, [00:30:00] most of the upward drift is overnight. And so therefore taking overnight risk, you actually get paid for that. There’s more edge in it. And so I actually quite like the long term approaches.
Kendra: That is 100 percent accurate, and for me, so I know Becky talked a lot about being more of a scalper, and I guess I am a day trader, but I don’t necessarily consider myself a scalper, even though I do scalp on occasion, but I really like to identify Bigger moves and a lot of times I’ll have in the back of my mind, you know, because I always like analyze, of course, on a weekly timeframe, daily time frames too.
And I’ll identify, you know, these potential trades and a lot of times they play out overnight and it’s like the market will give you telltale signs at closing, you know, the previous day and then a lot of times we wake up and I’m like. Damn it. I was hoping to take, get in some of that today. And so it’s, it’s very true about that, that taking on risk overnight, it can be extremely profitable.
Adrian Reid: Yeah, absolutely. And it’s interesting because there’s a, there’s a bit to test around that. So all of my, all of my trading, as I said, is purely objective. It’s all systemized, which means I can backtest everything. So I can put the rules into the backtesting software and test over the last. And I can test three decades or more how the system would have performed if I followed these rules.
And then I can change the rules and test it again. And it only takes a couple of minutes to do all of that. You get thousands of trades of history. And so you can make pretty good data backed decisions doing it the way I do it. And if you look at the end of the day, for some strategies, it makes sense to wait until the open the next day to place your trade.
For other strategies, it makes more sense to get in right at the close and benefit from the overnight. So for example, you know, with overnight, with position trading or swing trading or Mean Reversion, the longer term stuff, you want to think really carefully about how you use stop losses, for example, because you can place a stop loss in the market, right?
And if it stops in the market and the market touches it, guess what? You’re out. But when does the market touch your stop loss? At a point of fear and panic, generally. And what I found is that if you, instead of executing when the market touches your stop loss, if you wait until the open the next day, say, Oh, I’m stopped out.
I’ll get out tomorrow at the open. Often, a lot of the fear has come out of the market. The panic has sort of subsided and the market comes back up. So with one of my strategies in particular, when I realized this, I tested with in market stops that I was using, and I tested with next bar on open stops, and the expectancy of the strategy increased dramatically by just waiting until the next bar on open to get out.
The trick, or the trap, is that you have to get out. Right. If you’ve got your stock on the market and it gets hit and you’re out, you’re out, right? There’s no room to psychologically screw it up. But if you’re like, Oh, I’m stopped out. I’ve got to get out of the open. Oh, hang on a minute. Maybe I’ll just wait and see if it recovers a little bit more before the close and maybe I can get back more of my loss.
Then that’s dangerous. You don’t want to do that. But yeah, you’re gonna absolutely follow the rules. There’s some [00:33:00] really interesting Kind of dynamics over the close to the open that you can take advantage of.
Kendra: Yeah, that’s tricky because I feel like the market usually always will give a nice pump at open, and then whether or not it’s going to continue, usually it doesn’t right away.
And so, yeah.
Adrian Reid: Yeah, absolutely. And the other thing is, I want to be clear, I’m not telling people not to use stops, and I’m not telling people not to use in market stops, I’m telling people to think and analyze exactly what actions you’re taking in the market and ensure objectively that you’re doing the right thing.
Becky: Well, I think you’re doing it. You’re doing a very good job of saying, like, put in the work, you know, study the system and like, have an idea and then study it and looking on different indices and different situations, different markets, and then dial in what is most effective. But don’t cut your rules.
Like, you’re doing a great job. It seems like a following specific rules. That’s impressive.
Adrian Reid: Oh, absolutely. Yeah, yeah, yeah. The, um, Um, following the rules, absolutely. And this is one of those things you have to have two ideas in your head simultaneously that are apparently conflicting. When you’re placing trades, you have to absolutely follow your rules and not deviate.
Don’t bend the rules. Don’t change the rules. Don’t break the rules. Don’t skip the rules. Just follow the rules. Right? However, emotions come up
like,
Adrian Reid: Oh, I really don’t want to take that trade or I really want to take that. I’m going to go big on that trade. Right? Well, no, I really don’t want to trade at the moment.
Interest rates just went up. Oh, COVID, I’m not sure what I should do. You know, whatever. But those emotions shouldn’t impact the behavior you play, you take in the market right now. However, they can actually be really valuable because it’s stimulus for ideas and testing. So for example, let’s say your system generates a signal and it’s like, I don’t wanna buy that stock.
Or, oh, I don’t wanna go into the market right now because X, Y, Z, whatever. It’s okay. I’m tempted to break my rules. I’m tempted to override. I’m like, why? What exactly was the stimulus that caused me to have that emotional reaction? And then when you look at the chart, for example, you say, it’s really gapping this, this stock, or the market is really volatile right now, or whatever it is, isolate the stimulus, and then you can test it.
Because if you can isolate the stimulus and then put a rule around it, that will avoid trades in that type of market behavior, then you can test it. So you’re going from emotion of potentially overriding your system to something testable that may or may not improve your system. And this is really powerful because what it does is allows you to take the emotion and not try and bury it.
Like, I have an emotion and then you can kind of dig into that. rather than what most people are trying to do is like, no,
Becky: I must be a
Adrian Reid: robot. I must follow my rules. I must follow my rules. And that, you know, it wears you down. Eventually something is going to break.
Becky: That’s beautiful. Like embrace it and use it in a constructive way to move you forward instead of hate it and try and bury it.
Because that just doesn’t work.
Adrian Reid: Well, how much does burying emotion in our life work, right? It doesn’t. Eventually it comes out, you know, there’s going to be a boom eventually if we keep burying something. And in trading, it’s no Yeah, so the beautiful [00:36:00] thing about taking your emotions and then identifying the stimulus that caused the reaction and then testing it to see if it helped or not is only two things can happen.
Either you find something that improves your rules or you build confidence in your existing rules. Both are positive. Actually, both are hugely positive. So you went from an emotional reaction, which most people view as bad in trading, to one of two really great outcomes, either more confidence or more profit.
Kendra: I think that’s so, yeah, that’s so good. And I think that is a lot about discovering, like, what are your tilt triggers? And then, okay, well, what can I do with this information now? Becky knows I talk a lot about that and we’re at the point now in our, in our trading careers that we’re starting to get more and more familiar with that.
And, uh, it is empowering and it’s the way you frame it. I like how you frame it that way. It’s like, emotions aren’t bad. Just use them, use them to make you better.
Adrian Reid: I mean, we’re human, right? We’re, we’re, we’re designed to have. Fear and greed and, and emotional reactions. It’s just part of being the human experience.
So like, I don’t feel like we should become robots and most people won’t be able to anyway, because you know, you’ve got to do so much work to get clear enough to really not feel that. You may as well just feel them and channel them appropriately.
Becky: Okay, so you are clearly very mature. So what about when you were a younger trader?
What did you do? How did you get through that? How did you like figure out what your triggers were and like find solid footing and get past like psychological hurdles? Because did you have a point in your career that was like your lowest low where you had to like decide to knock off certain things and lock into discipline systematic situation?
How did that period look?
Adrian Reid: I did and I, I definitely had the period where I was kind of immature and driven by my emotions and I took some trades that were big and I took some trades that were small because of how I was feeling or what I thought was going to happen and whatever. I remember a conversation with one of my friends, I was on the phone and he was asking me to come meet him to do something, it was a social fun thing, I really wanted to do it.
I was like, I can’t, I’ve got to watch the market because I’ve got this big position on and he’s like, what do you mean, like what are you doing? You’re investing in a way that’s making you like stressed about like why you’ve been doing that. And he wasn’t a trader. He was a long term fundamental investor.
And I sort of got off the phone. I was like, what am I doing? And I realized that there was a lot of emotion in that. trade to get in. I was being greedy. I really had this strongly held conviction that the market was going up and I acted on that at size, not size that would have wiped me out because I’m, I’m actually a pretty conservative person in general.
So I’ve never had the risk of being wiped out. In my trading, I just wouldn’t have happened. But for me, the level of volatility that in that moment was bigger than it should have been. And I think, you know, that, that sort of, that happened a couple of times and I realized that I was being pretty emotional.
And then at the same time, I read Market Wizards and the, [00:39:00] so there’s several books in the Market Wizards series, right? And this was before I was purely systematic. And I started reading the books and it was just fascinating. And I read, read an interview. I was like, Oh my God, that person has the most horrible life.
I would never do that in a million years. Crossed it out. And I read the next one. It’s like, Oh no, I don’t know how to do that. I’m not interested in learning that. That just sounds terrible and boring. And I’m like, I would never do that. And then I’ll get to the next one. Never next one, never. And then basically I crossed out all of these people.
I mean, they were great traders. They made tons of money, but I was not going to do what most of them did. And I got to the guys who were systematic. I was like, I like that. And it just really appealed. And I started, I started doing it. But then I realized, I did observe, I wasn’t doing any personal development back then.
You know, I wasn’t really an emotionally driven person, but you know, everyone, when they, everyone has, you know, emotions that drive things that they do in life. And so I was a bit up and down and a bit less regular than probably what I am now. But I did notice that even though I was following rules, I was still having these reactions.
And I was just lucky because I was systematic. And because I observed that I was fearful about a particular trade or greedy about a particular trade. And I was like, why is that? I don’t know. I just, I’m curious. And I just started asking those questions. And I think curiosity is actually a really powerful skill for traders.
Yeah. Because if we can be curious, then we can take whatever we observe, whatever we fear, whatever we think and dig into it before taking action. I think where people get into trouble is taking action before the thought of the analysis. And so anyway, I started, I was following the system and I started observing that I was having reactions.
It’s like, Oh, why is that? I was curious. And I found, Oh, I don’t like the look of that chart. Why don’t I like the look of that chart? Oh, it’s really gappy. Oh, I wonder if gappy stocks are good or bad because it’s, I’m scared of taking that trade because I think it’s going to gap through my stop loss. I’m going to lose a ton of money.
But is that right? And so I started backtesting these things and when I first launched my system, I wasn’t confident in the system, the very first system, because I was still finding my way. So I was having all of these, you know, emotional reactions, chatter in my, in my brain. And I started like investigating, okay, is that real?
Is that fear real? You know, is that greed warranted? And that started this idea of testing the emotions. And I did it for a long time, like at the beginning, I would like every day something would come up, like, Oh, I don’t want to take that trade. Oh, I really like look at that trade. Oh, you know, and so, um, there was a lot of this testing going on.
I was doing hours and hours of testing. Because A, it was fascinating, and B, I was just, you know, I was, I was, um, so unsure. But then gradually I noticed it got less, and less, and less, and then eventually I just started getting signals like, yep, buy, sell, buy, sell, buy, sell, no problem. Because I’d cleared all of the fear and [00:42:00] greed.
Because all the emotions I tested, look at them and go, okay, it’s not, it’s warranted or it’s not warranted. And now with every strategy, when something comes up, I’ll go through that process.
Becky: You’re like mitigating doubt by work, like work studying.
Adrian Reid: You mean you can’t get rich by trading, by just pressing a button doing nothing?
What?
Kendra: Oh my goodness. It sounds like you’re highlighting, you’re highlighting the importance of self observation, which is something I think we all want to avoid. We want to dissect the markets, but we don’t want to dissect how we’re reacting to them.
Adrian Reid: Well, actually dissecting, like noticing how we’re reacting to the market is, it’s really powerful insight, both because, you know, we will react to things emotionally that are happening in the market.
without consciously realizing that we’ve seen something that made us uncomfortable. And so the emotions can help uncover some behavior that we didn’t really consciously see was there. So that’s really powerful. But secondly, how powerful is it to be able to observe that we’re having an emotional reaction in other areas of life?
Like it’s no, it’s no longer, you know, instantly get into an argument with someone. It’s, Oh, that’s interesting. No, when you said that I kind of got. You know, a bit defensive, or I kind of got a bit fearful. Why was that, I wonder? And then, you know, dig into it and do the analysis. So trading is, in this way, has actually really infiltrated other areas of my life, and in many more ways as well.
You know, like movie stop loss is very important. Can you leave some time? Yeah. Do you have a movie stop loss? Yeah. So like, you know, we sit down at night. So we sat down the other night to watch a movie, my wife and I, and she said, okay, so how long is the stop loss?
Kendra: She’s not even a trader. I love it. I love it.
Adrian Reid: This one rates pretty bad on Rotten Tomatoes. It’s a five minute stop loss. No, no, five minutes. This was a short term trading strategy on that movie, right?
Becky: You’re scalping it.
Adrian Reid: I will be honest though. I do sometimes let my stop losses kind of slide when I’m watching a movie. And it’s like a
Kendra: gray
Adrian Reid: area at five, at five minutes.
It is a gray area. Correct. At five minutes, I think we can let this one run a little bit more and just see what happens. But I will not do that in a trade.
Kendra: One more threshold only. Yes. Sounds like you need to build a system for your, your movies also.
Adrian Reid: Probably do. Yeah. Yeah. Um, there’d be a lot of movies that I never ended up watching.
I’d probably get more hours of my life back, but, you know.
Kendra: Oh my gosh. I’m so happy we brought you on because you’re bringing so much diversity to our channel. We’ve never had a trader like you, which is awesome. And I just want you to tell our people, tell us more about your business called Enlightened Stock Trading, um, about your mentorship you offer.
Um, and your educational program.
Adrian Reid: Yeah, I mean, let me first tell you why I started it and, uh, if that’s okay. Because I learned to trade from books and, you know, I did, I did do a few courses whenever I never had a mentoring program and no one in my life traded. So I didn’t know any other traders. I knew lots of gamblers who bought and sold stocks, but I didn’t know any other traders.
And so, uh, 2012, September, I walked out of my corporate job forever, that was my, my last corporate job, [00:45:00] and I went home and just continued my trading, and I thought that was great, the pinnacle, you know, I’d achieved my goal, trading for a living, rah rah, but it took less than six months and I was bored, lonely and depressed.
Because I had no one to talk to. All my friends were at work doing their big corporate jobs. My wife was still at work. Uh, basically I was, you know, doing the kids before and after school and I was sitting in front of the laptop, kind of doing trading on my, like doing trading analysis on my own. And my trading doesn’t take very long.
You know, I was still manual back then, like 20 minutes a day. I don’t know what I’m going to do now. I don’t have any ideas to test today. So, you know, it was actually horrible. Yeah, it was isolating. Seriously, I, I, I did, um, stuff up. Um, emotionally as a result. And so I started, you know, at the same time I had just left my job.
So people were like, were asking me, how did you do, how did you leave your job? And what are you doing? And how do you make money? And how did you succeed in the markets? So it kind of very naturally can, uh, morphed into teaching people how I did it. And so I started meeting people, like going to town for coffees and stuff and explaining how I was trading just to friends, like who were interested.
But, you know, I’d sit on the bus for an hour for a half hour coffee catch up and the person didn’t turn up because their boss called a last minute meeting. I’m like, well, dude, I just wasted two hours of my life and you’re not here. And so that, that kind of chit chat, help other traders wasn’t really cutting it.
So I kind of professionalized it. I started, uh, you know, I, I built a, built a course eventually and started taking people through a program. And so, um, you know, fast forward a few years, I’ve been teaching for 10 years now, over 10 years. And thank you. And, um, I, uh, so now when someone joins, I have a very clear process.
At the beginning, you know, I was like, this is what I do. But at that time, you know, I was decades into the, into the journey. So I was trying to teach someone like what to do right up at the top, the mastery level of, you know, what I was doing. And I, it took me a while to figure out how to take someone from the beginning through the journey quickly.
So now what I do is, like I said earlier, someone starts, okay, here’s, here’s, here’s a strategy that works. So here’s a couple of strategies that work. Let me show you why they work. Let me show you how to test them so that you can build confidence that they work. Now, let me show you how to combine them into a portfolio and actually run the daily process and manage your risk and Now let me show you how to build a portfolio of multiple strategies.
And by the way, here’s 20 different strategies you can choose from, all done, all coded, right? And you can weight them and combine them together. And we show you how to test that. And now let me show you how to do some of the more advanced analysis so that, you know, when all of these emotions come up, you know exactly how to test it and, and do your own interventions essentially.
And, uh, now that you’ve done all of that, you know how to analyze an existing system, my system. Let me show you how to build your own system so when you’ve got your own ideas, you can go through a standardized process and at the end, you come to a go, no go decision on a system idea that you came up with.
So that’s the journey that I’ve got now, which is super cool, because A, I get to help people succeed much more quickly. It took me years, like three years. to find systematic trading and actually get profitable. [00:48:00] And I know people who’ve been doing it for 10 years or more and still haven’t found success, right?
Which is just heartbreaking because when I take someone at the beginning, you know, six weeks trading two strategies live with confidence, six months fully automated with a portfolio of three or more strategies with, you know, with absolute confidence. So imagine taking Three to five years or more of a learning curve and condensing it into a couple of months and giving people a path actually feels really good.
Like it’s fun because people are like, you know, wandering around in the wilderness for years, and then I can start working with someone and say, look, do this, do this, do this, do this. Oh my gosh, I’m a trader now. And it’s like the best thing ever. And I have people to talk to.
Becky: That’s beautiful.
Adrian Reid: Yeah. So yeah, that’s, I mean, it really started because I just needed people to talk to.
I was just lonely and bored and isolated. And now I just have this, this process where I can take people on the journey really quickly. And the thing I love most, and you guys ask such great questions. The thing I love most is the questions. Because when someone starts, when you first deal with a brand new trader, they ask questions, which are good questions at that level, but then you see the questions progress and get more and more kind of insightful and, and more, and, you know, more in depth and interrogating and show a deeper level of kind of mastery.
And that’s the progression that I really love. When someone asks that first question, it makes me go, wow, good question.
Becky: You’re raising them up.
Adrian Reid: Yeah, it’s just the coolest thing ever. I just really like it. And, um, it’s happening quicker and quicker because I’m getting better and better at teaching, which is, um, which is also good because, um, then I get more people asking me questions that actually challenge me.
And, uh, I have to like, okay, let me do some work on that. I’ll come back to you. So that’s, um, that’s kind of nice. So that’s what the mentoring program is kind of like that, you know, basically I’ll take someone from beginner, show them the, all the way through the process to mastery of systematic trading very, very quickly, a couple of months, you know, six months of automation now is what we’re doing.
And um, it’s a combination of online training cause there’s a lot to learn, you know, it’s not like it’s like, Oh yeah, just do this and this and you’ll make money. There’s depth to it. So there’s a lot of, there’s online courses from beginner through to advanced. But then we supplement that with face to face to face via zoom contact in a group setting so everyone can learn from each other.
And I think that’s really important too. Like we’re doing this as a group, you know, I say something and you ask another question, then I think of something, I offer something else and it’s, you bounce off each other. And that’s just, that’s really powerful. You get five, 10, 15 people in a room and the learning is so much better.
Becky: Sometimes you don’t even know what you don’t know. And it’s like, you’re thinking about something and you know, you don’t quite conceptualize it and then someone will ask it and you’re like, that’s what I don’t understand, and then the mentor can review it and it’s like everyone’s light bulbs can go off more instinctively and you can grow together.
Adrian Reid: Yeah, absolutely. I have this, as part of the mentor, the mentoring program I run, it’s called the Trader Success System. We have four live calls a week. They’re group calls. One of them is called System Builders Club. And in System Builders Club, myself, one of my coaches, or one of the students is presenting a system that they’re [00:51:00] working on.
And the cool thing about that is very often someone will present something and I’ll get to say, I never thought of that. That’s actually a really cool idea. And, and sometimes, or often also I get to say, Oh, I’ve tried that and that doesn’t work for these reasons, but try this. And so that, that, um, collaborative learning works in both directions.
So I’m a hundred percent better, better at my craft because of sharing my craft. And so people say, why do you teach? Like, if you’re so successful, what do you teach? I mean, it’s, it’s such a defensive. skeptical question, which in our industry is warranted, right? There’s a lot of scammy people who don’t actually know what they’re talking about.
But for me, if I didn’t teach, there is no way I would be as clear at, uh, in my mind about what I should be doing.
Becky: And I talk about that just with market mamas of like, Just having these conversations about how we struggle and why we struggle and what we did and what she does and how we’re improving.
Just having the conversations, even when it’s just limited to trading psychology, are really powerful for us because we put it out there and sometimes even just hearing yourself out loud to another person can set off your own light bulbs and help with your own growth.
Adrian Reid: Yeah, I also think that there’s something about the honesty of saying it out loud to an audience.
Yeah, because. We’ve got to be honest with ourselves as traders, you know, if we’re not honest with ourself, bad things happen, like really bad things happen in the markets when you’re trading, if you’re not honest with yourself and practicing sharing, you know, what’s going on for you. And I’ll talk about my, you know, my psychological challenges and the systems I’m struggling with and analysis that I’m not sure of.
And I’ll get the students input. Because I think that honesty is really important and you know when I started actually being honest about what am I doing in this trade and did I follow my rules and did I follow my system or am I kind of cheating a little bit on this one or a lot, my trading really improved.
And I, you know, I think, you know, kudos to you guys for being so consistent with the podcast. It’s exactly what it’s doing. It’ll make, it just makes you so much better.
Kendra: Thank you. Yeah. Becky and I have always stood by, um, that shame thrives in isolation. And so shame thrives in isolation.
Adrian Reid: Totally. Absolutely.
Kendra: Like as much as it sucks, like you got to get it out. You’ve got to get it outside of you. And then all of a sudden it’ll go instantly. It still sucks. situation and I’m still embarrassed, but at least it’s not like festering in there and you know, yeah, you gotta get it out.
Adrian Reid: Also like, um, okay, let’s say I had a loss because I did something stupid.
So let’s say I lost a thousand bucks, 5, 000 bucks, 10, 000 bucks, whatever. It doesn’t matter. And I’m feeling shame, you know, ashamed because I did that and it’s inside. But if I share the lesson publicly and I stop, 10 people from losing money because of the lesson I shared, then that lesson is profitable net to humanity, right?
Now, maybe not to my account, so I can still feel a bit ashamed [00:54:00] if I want to about that, but it’s actually, you know, It’s really powerful. And I like, I kind of liked the idea of turning all my scrubs to be net positive.
Becky: Adrian, we have to have you back. You’re one of our new favorite humans. That’s a really great point.
I mean, I think that a lot of trading is very hard emotionally, psychologically, and then there’s just a huge like technical learning aspect of it, but it really is. It’s a lot to go through as a human to get to where you are consistent and disciplined and calm and reasonable. And you don’t carry so much of the weight of it with you being like open with it.
I think gets you there sooner because you’re not trying to hide and bury something you did wrong. You’re trying to learn from it openly so that you can do it less. And I think that that is a big thing for Kendra and I, that we are kind of. As hard as it is some days trying to embrace, because we really want to do this dang thing.
And so that’s, I mean, I think you get that.
Adrian Reid: Absolutely. Actually, the, probably the, um, the trading mentor that had the most impact on me, particularly early on, was Dr. Tharpe, Ben Tharpe, and he talked about, he’s no longer with us sadly, but he talked about personal development. with trading as a metaphor. And so what that means, what he meant by that, I think is, you know, we can do personal development, right?
We can work on ourselves and we can become better humans and work on our psychology. But if you want to be a trader, it will bring things up, you’ll get triggered. You’ll get fearful, you’ll get greedy, you’ll have emotions, you’ll have doubts, you’ll have all of these things. Trading brings things up for us to deal with to become not just better traders, but just better.
You know, more clear, more calm, more confident, more at peace, more present, all of these things. And I actually think it’s one of, it is one of the best. Metaphors for that, because money brings up so much junk, so the quicker you can bring it up and deal with it, you know, the more at peace we can be as a human, and I can honestly say that mentally, I am so much more at peace now, because of my trading than I ever was before.
I mean, obviously I’m older too, but the trading is so responsible for it. Bringing things up, making me face them so I could deal with them because I didn’t want to keep losing money.
Becky: You can tell your energy is just so peaceful and accepting and calm, I guess, with it. And that’s not as common in trading.
Adrian Reid: No, that’s right. Actually, one of the other, one of the other people that I really, um, really love is, um, Tombasso. Talks about Mr. Serenity, right, is the nickname. And it’s because of the systematic approach, being at peace with the rules and knowing exactly, you know, how they’re going to perform because of all the testing and work, you can just take the trades and just be calm about it.
No, I think that’s, uh, it’s really important.
Becky: This episode is getting long. And so we are just going to have to have you back, but I do have to ask you one more question cause I don’t ever want to forget it. You mentioned that you’ve read hundreds and hundreds of books, and a few of them have been the most impactful for you.
Can you, just off the top of your head, give us a few of your most favorite titles? Because we are total big readers ourselves.
Adrian Reid: Yeah, absolutely. Look, I think [00:57:00] everyone should read Market Wizards, the whole series. So all of them, because there’s so much you can learn from different, uh, professional traders who are really, really great at it.
And, uh, do what I did, you know. Cross out the ones that you don’t want to do, learn from the things that they do that you can’t, and find the approach that resonates. So I think that’s, that’s really powerful, a really powerful series of books. Second one is Trade Your Way to Financial Freedom by Van Tharp.
I think that’s um, very, super useful for keeping you in the game. You know, he’s very strong on risk management, good on position sizing, having a clear strategy, having a written plan, all of the foundations that are just critical. If you want to be systematic, as in purely rules based like I’ve been talking about, Way of the Turtle by Curtis Faith is one of my all time favorites.
Curtis was one of the original turtles. He didn’t end up so, you know, in such a great place later in life, I don’t think. But his trading was fantastic and the book is very clearly articulated and just, just fantastic, insightful. So I love that one. And then Richard Weisman has two books, Trade Like a Casino and Mechanical Trading Systems.
And both of those are excellent if you want to be a systematic trader and purely rules based.
Kendra: Thank you. Thanks for sharing those resources with us and our viewers. I definitely second what Becky said. We have to bring you back. You could go on for another hour, I’m sure. And we’re going to have all your information in our description below for our viewers to find you and contact you.
It’s been so awesome to have a trader as yourself who is fully systematic and has an automatic trading style. We’ve never had that before. Had that before. So it’s very cool. And, uh, we want to learn more from you for sure. And just thank you so much for coming on our show, adding more value and from all the way from Australia, that’s also very, very cool.
Um, do you want to add anything else before we wrap up the episode?
Adrian Reid: Yeah, thank you. Look, it’s been absolute blast. Love talking to you guys. So I’d love to come back. I think there’s so much more to, you know, dig into and unpack. So we should definitely do that if you, if you’d like another guest, I think if someone wants to learn a little more about the systematic.
approach. Um, I’ve got a whole bunch of free resources. Um, if they want to go to my website, enlightenedstocktrading. com forward slash free, um, you can opt in there and there’s a, there’s a free system. There’s a couple of courses, there’s some eBooks that’ll really lay the foundation for all of this. See if it’s something that, um, that they resonate with.
So I’d encourage people to just check that out. No cost. Uh, you know, if, um, if someone wants to learn more, feel free to reach out with me to, uh, discuss it further.
Becky: Perfect. Thank you. And we’ll put the link for that directly, just right in the description below. So people can find and just click right on it, make it easy.
Yeah. Thank you so much for your time. And if anyone else is interested in having a conversation with us, we are so open to just talking to traders because there’s so much value in every, everyone who trades, I think. So thank you for coming to reach out to us and our information is in the description below as well and have a great day, everyone.
Our best trading days are ahead, especially learning from experts such as yourself, Adrienne. So take care, everyone. Bye.
Podcast Interviews with Adrian
Watch my full collection of interviews covering a wide variety of trading topics on our podcast interviews page.
- Listen to Adrian on the Better System Trader Podcast
- Listen to Adrian on the Talking Trading Podcast
- Listen to Adrian on the Desire To Trade Podcast
- Listen to Adrian on the Traderwave Academy Podcast
- Listen to Adrian on the How To Trade It Podcast
- Listen to Adrian on the Kiss My Money Podcast
- Listen to Adrian on the Market Mamas Podcast
- Listen to Adrian on the WeInvested Podcast
- Listen to Adrian on the Financial Survival Network Podcast
- Listen to Adrian on the Financial Investing Radio Podcast
- Listen to Adrian on the Cryptogic Podcast
- Listen to Adrian on the Crypto Leviathan Podcast
- Listen to Adrian on the Market Adventures: The Journey to Financial Freedom Podcast
- Listen to Adrian on the Financial Freedom for Fathers Podcast
- Listen to Adrian on the Passive Income Network Podcast
- Listen to Adrian on the Screw The Stock Market Podcast
- Listen to Adrian on the Wealth Architect Podcast
- Listen to Adrian on the LifeBlood Podcast
- Listen to Adrian on the Colloquium Podcast
- Listen to Adrian on the Personal Brand Talk Podcast
- Listen to Adrian on the Eric Mueller Show Podcast
- Listen to Adrian on the Money and Business Hero Podcast
