In this first episode of “The Great Trading Debate”, Adrian Reid from Enlightened Stock Trading debates with Brian McAboy from Inside Out Trading about which is more important, Your Trading System OR your Trading Psychology.
Comment below and let us know what YOU think…
To take your trading to the next level, download The Trading Mistakes Cheat Sheet from Enlightened Stock Trading and improve your trading TODAY!
Click To Read Full Transcript
Adrian Reid: Hi, it’s Adrian here from Enlightened Stock Trading. I’m here today with Brian from Inside Out Trading and we’ve got something new for you ’cause Brian and I were talking last week for the first time and I really enjoyed the conversation and we came up with this concept which is super cool, never seen it any way before.
Adrian Reid: Basically you’ve seen hundreds and hundreds of traders interviewed, yes. What we’re gonna do today though is completely different. Today is a trading debate. What is more important, your trading psychology or your trading system? Brian is very heavy on the trading psychology side, I’m all about developing trading systems, so this should be interesting, I don’t know where it’s gonna go but here’s … this is what we’ve got for you today. What is more important your trading psychology or your trading system. Brian, why don’t you kick it off. What’s your view and why?
Brian McAboy: Well, as far as having a point counterpoint it’s also fun. I’ve had this debate, as I’m sure you have lots of times, especially for me, it’s almost fun having the debate with like the pure psychologist who learned the trading space on or just an area you don’t know, you got all these … We need to put him on a therapist’s couch for a couple of [inaudible 00:01:09] $25,000 and it’s like, no, that’s not it. But as far as yeah … for the conversation, they haven’t way point counterpoint. But because it is valid. I mean it’s not that either one is 100% of the answer.
Brian McAboy: From a psychology standpoint though it really … I find it fascinating and more of a [inaudible 00:01:32] over the years. It is psychology, I mean, as far as your system … you can have a great system, but if you can’t keep your head together, if you can’t show up into what you need to do, your system is of limited value. I find a lot of people come to me over the years and they’ll be, Brian you [inaudible 00:01:48] trade for 15 years and I can’t stop hesitating and chasing bad trades, so what do I do?
Brian McAboy: And a lot of times I run a jump into it and we look at our system and [inaudible 00:02:02] decent system. The whole validity of the hesitation, and for me what I found is also big one is self sabotage.
Adrian Reid: Right?
Brian McAboy: ‘Cause self sabotage, there’s a whole lot of interesting asset or aspects to a self sabotage, the trading that are purely psychological and maybe 10% related to the system, and so … And actually really is, it’s all in your head. I mean the trading’s a mental game, that’s a decision making process and if your head’s not right, your system really doesn’t matter. It doesn’t, you kind of base this on a plan, so-
Adrian Reid: [inaudible 00:02:46] interrupt for a moment because a lot of what you say I completely agree with and it is a mental decision making game, but what I’ve seen after coaching and counseling with hundreds of traders, is that there’s definitely psychological problems that are causing them to lose money. No question, right? But my view is that most of those psychological problems can be sold, eliminated, or bypassed with the right system for that person. Because what I see over and over and over again is people fighting their system because they’re not comfortable with the system.
Adrian Reid: And I’ve tried this, I’ve tried short term, I’ve tried day trading and I lost $30,000 in a space of about two or three weeks because the system was wrong for me, it didn’t fit my personality, didn’t fit my objectives, didn’t fit my lifestyle, it was a disaster. I’ve tried train following and that works amazingly well because I’m a patient sort of guy, I don’t want a lot of activity, I don’t wanna be watching the screen all day. I just wanna buy here, sell there, all good. It’s very easy and natural for me, and my students when they get a system that fits them, I find that a lot of the psychological challenge goes away because it’s easy and natural.
Adrian Reid: Good system is not the answer, the right good system. I feel like that actually eliminates a lot of the psychological problems unfortunately it also takes away the constant revenue stream from a lot of the psychologists because you no longer then need to kind of spend years in therapy because you can just follow the system because it’s the right one. What do you think about that?
Brian McAboy: You’re also ripping off the brokers too and the guys [crosstalk 00:04:32] their crappy trading systems.
Adrian Reid: Correct.
Brian McAboy: Actually, it’s hilarious, I heard this not too long ago and I thought it was just a [inaudible 00:04:40] because … I’m sure you’ve seen it on a sales page or two like ClickBank when they were just raging, piled up with people selling crappy trading systems and robots and stuff. The saying, give a man a fish, feed him for a day, teach him how to fish and you feed him for a lifetime and here’s the magic, we’re gonna teach you how to fish. I heard this a while back and this is more of the mentality of a lot of people that have been in the trading space for a while, is give a man a fish and you feed him for a day, teach them how to fish and you’re ruining a good business opportunity.
Adrian Reid: Yeah, I’ve actually gone in my mind with my teaching and the style I use, I’ve gone one step further than that analogy because in trading you can give a man a fish, right? Follow this … Here’s a tip, here’s another tip, here’s another tip, here’s another tip, and you can make an awesome business out of that, which absolutely sucks for the trade off, but it’s great for the educator. Okay. But I’m not into that model. I don’t like that. Teach him to fish, here’s a system, follow the system for yourself, right? But the next thing, the next stage, which I feel like helps with this psychological challenge is teach the man or woman to build the fishing rod.
Adrian Reid: Because I can give you a fishing rod, but if it’s a deep sea fishing rod and you live on a lake, you’ve got no chance, right? You’re not gonna catch any fish, or at least not consistently. But if I can teach you how to construct the rod that you need to fish in the way you like to fish in the environment that you fish in, you got a fighting chance of success and of being independent henceforth. Similar with trading, if you can develop and build your own trading systems for your environment, your personality objectives and a lifestyle, surely that bypasses a lot of the psychological challenges that you’re saying cause people to lose money.
Brian McAboy: Well, yeah. I mean, there are two different aspects of the psychology though that really do come into play even once you fix your system. You got … Because some people do have genuine my daddy issues so they [inaudible 00:06:53] the trading. I just picked the term up a long time ago and I like it because, you talk to most people with psychology, the psychologist are gonna say, well, most of your problems are gonna be rooted to something you heard in your childhood and the environment you grew up in, whether it was a poor mentality and a lot of the crap that gets programmed into your head that you’re not even aware of anymore.
Brian McAboy: There is some of that, the people have to deal with and they may have been able to overcome it enough to save up enough money to start trading, but they still deal with those issues. Worthiness, if they can become successful, they’re gonna kind of violate the family values because the family’s always been frugal and really tight with money and that kind of stuff. They don’t wanna feel that they’re breaking tradition or going against what’s been the standard for a family or embarrassing … There are some genuine psychological issues that come into play even when a person gets through their system squared away.
Adrian Reid: Right.
Brian McAboy: But that aside then you’ve also got to deal with … ’cause I run into this too when I’m working with people and helping them fix your system is the painful memories and triggers and cues that they have, that they trigger the old memories really painful stuff like when they first gonna go trading … the first time they had … they blew up half their account and then had to go tell your spouse about it or one guy, this is one of the worst ones I’ve heard, I mean, ’cause I’ve had broker friends who … They had a number of stories where it seemed they would come in at $10,000 account and they’re done the same day because they came in and instantly blew it out. It was like a one day trip to the Vegas thing for him.
Brian McAboy: But I had this one guy called me up one day and I’m sure you’ve had your horror stories. I knew of people who took a huge beating. I’ve had my own fun stuff to deal with. I had this one guy calls me up one day and he’s like, now if I can just get a couple of thousand dollars, I could trade my way out of this, and I’m like, well good, tell me where you’re at right now. He said, well, I haven’t told my wife about this yet but I really got her house like, loaned out to the [inaudible 00:09:02] or mortgaged to the [inaudible 00:09:03]. I’ve wiped out all our savings and our 401k’s are gone and even my inheritance that my dad let me have been … I’ve kinda done through it a little over half a million dollars and I’m like, and you haven’t told your wife?
Brian McAboy: Yeah. But if I can just get a couple of thousand dollars on that, I can trade my way out of this and like, dude, here’s what you gonna do right now, I’m not suggesting, I’m telling you. You’re gonna get off the phone, you’re gonna go remove any weapons from the house, make sure there aren’t any knives in the kitchen or anything. I need you to sit down and you’re gonna talk with your wife and you’re gonna stop trading because if you don’t, she’s gonna kill you. And he’s like, you think so? And I’m like, you think? You basically wiped out every bit of financial security that women kind of like to have and you haven’t told her about it, so you better tend to this.
Brian McAboy: And he’s like, wow, and it hadn’t even occurred to him, and I’m like, dude, you better quit. But as far as the damage that people pick up, the psychological damage from the hard experiences, because so many people are getting into trading are above average and they’ve enjoyed a pretty good measure of success in their life. And they come in here and man, they just take a beating and it’s like, damn I’m getting my ass kicked over here. I’m not used to this [inaudible 00:10:27] always win but man, I’m just getting hammered. I’m feeling like a loser and this sucks and of course … and you’ve seen it too, I’m sure, where you’ve got somebody and they go through the cycle where you have, they are literally sacrificing themselves.
Adrian Reid: Absolutely.
Brian McAboy: They are aware of what they’re doing, they know they’re not supposed to be trading this way but they’re doing it. They’re aware of it, they know they’re not supposed to, they know it’s just killing our account and they can’t stop themselves and a lot of times that cycle goes until they’re forced to take a break.
Adrian Reid: Yeah. Basically, until they blow up and that forces the break. The challenge with that situation is I’ve seen that over and over again, particularly with people with small accounts. I mean, I’ve seen it with big accounts, but more often with small accounts because people don’t … A lot of people aren’t valuing the money in the small account and so they’re developing bad habits which they then carry on into a big account.
Adrian Reid: Now if you do that sort of behavior with a larger account, If you got a large account like say six figures and you’re going into a 30 40 50% drawdown and you’re trying to like just frantically dig your way out of it, I’m gonna say you should not be trading. You should stop, if that is the sort of a gambling addiction kind of behavior and frankly that’s what it is that you’re taking into trading, I’m not sure that many people can help, and I want you to stop trading until you’ve actually taken a step back and really understood the math and the process of how trading profits work, because we don’t dig ourselves into a $500,000 drawdown and then dig our way out by just scraping together a few thousand dollars to trade.
Adrian Reid: I mean, that’s just madness, right? It’s not … it’s a real kind of clear thinking by any stretch of the imagination. But what’s interesting is I find that a lot of people … I wanna talk about this for the people who are doing this behavior with the smaller accounts. I find that a lot of people will take those gambles and trade in a risky way like that because they don’t have faith in the process that they using that it’s kind of like, when you buy a lottery ticket, you know that you’re not gonna win … likely to win, but you might, and if you do, then maybe you can make something of yourself.
Adrian Reid: But when I present a systematic approach to someone and show them the path to success, this is methodically step by step how you’d get there and build that faith confidence in the system through the testing. I find that a lot of the need to be gambling in a risky kind of dissipates or at least reduces because there’s something that you can have some faith in that is gonna work. Whereas if you’ve got no hope may as well gamble because it may pay off randomly. What do you think?
Brian McAboy: Well, There’s definitely some merit to that. The challenge that I find a lot of people have and I’ve experienced it myself a couple of different times is when you’ve been through the cycle of try and fail 20 or 30 or 40 times.
Adrian Reid: Wow.
Brian McAboy: Well trading is a world where that’s easy to do, especially if you’ve been in the game for five or 10 years and you’re busy and I just sitting here just pedaling around. You’re actively on the forums, on the webinars, on different podcasts and all this kind of stuff. You’re hearing about different stuff and you’re looking for solutions. You’re looking for more ways to go about this and a lot of times it’s funny because again, some of the smarter people, they’re even more susceptible to it because they’re gonna be active. They know something’s broken, and so they’re actively looking for solutions [inaudible 00:14:46] missing a couple of key pieces. They come over here and listen to this guy, and it’s like, man, that makes a lot of sense. Oh yeah, man, and they see the logic in it-
Adrian Reid: Right.
Brian McAboy: And they can follow and it’s just like, a highly intelligent person taking a multiple choice test. A lot of times they’ll do worse than somebody of average intelligence because the person of average intelligence, the answer’s obvious. Whereas the smarter person, they can argue for all the different answers and the correct answer isn’t as clear because that’s like, yeah, I can see how it can work and they can argue all the different answers.
Brian McAboy: Anyway, but like I said, once you been … you’ve gone through that cycle where it’s like, okay, here’s the solution man, it sounds like it’s gonna work and you get your hopes up in your faith and bam, it blows up, doesn’t work and you do it again and again and again and again and again. Even when you get around over here and it’s still, yeah, this works man and it’s just step one, step two, step three and here, here’s the proof and all that kind of stuff, man, shaking that out from just that repetitive try and fail cycle, that can be rough and that can be hard to get over. I’ve actually had a couple of guys where we went through the whole process, get everything squared away, get well systemized, do all approved and all that kind of stuff.
Brian McAboy: And the first time I went through all that with this guy and I spent a lot of time with him over about two month period, and man, I thought we were just solid. He said, “Brian, I gotta be honest with you, I’m so crushed. I gotta take a break for about six months.”
Adrian Reid: Right.
Brian McAboy: And I’m like, John seriously, and he’s like, man, he said, “This is so compelling and I really want to,” he said that, “man my head is so beat up, I’ve just got to step away from this for a while because I just … if I do this one more time, I don’t know if it’s gonna ruin me as a person.” But he’d been that badly beaten down, getting him built back up again, made him feel totally vulnerable and fragile and just at psychologically a risk of just having like 100% destroyed. Right.
Adrian Reid: And I was like, Damn, and we got back together after about nine months and he was slowly stepping back into it, but he had taken that bad of a beating.
Brian McAboy: Yeah, I mean that’s common, right, very common. [crosstalk 00:17:07]
Adrian Reid: That bad was kind of extreme, cause I mean you can hear his voice shaking, he was almost at tears. He was a good guy and he was smart and he outside of trading was very successful. I mean [inaudible 00:17:22] make $400,000 a year in his practice.
Brian McAboy: Right.
Adrian Reid: Trading, never could make it work.
Brian McAboy: What got him to that point because he would have tried system and process and method after method after method, each of them losing money and blowing up the account. So at the end there’s a psychological problem which is undeniable. Right? So in that particular case, yes he has to deal with this psychology to keep going as a trader, to be a trader. What got in there was several methods that weren’t right.
Adrian Reid: Absolutely
Brian McAboy: And position sizing that was too aggressive that cause big drawdowns. That cause each of those successive accounts to blow up or methods that didn’t blow up or systems that he couldn’t follow.
Adrian Reid: Yeah. Well it was a combination of crappy systems, just being screwed over [inaudible 00:18:20] systems. You have one broker rip off about 50 grand along the way. I mean he did have some pseudo successes along the way, but it’s like … and I was part of what was so hard for him is because, he would actually be making a couple of steps forward and again start to feel like, hey wow, I can like open up and start to accept some success here and then bam, here he’s getting crushed again.
Adrian Reid: What happened with him, that was not a common thing. It was kind of an extreme, but I’ve seen it a few different times and that’s one of the things that people really need to safeguard and with a couple of my programs, but I wrap it up at the end and say … have specific exercises and things in place to address. For years you’ve been over here just getting hammered and your confidence and your faith and everything is just trashed, that right, you’re at about a one on the scale right now, so now that we’ve got you where you wanna be, we’ve got to safeguard your head here just so you don’t have all the crap from the past creeping back up on you, and even though it’s terrible it’s that familiar place.
Adrian Reid: You’re stepping into something new now and so you get used to the new normal and help make the new normal stick, because we’ve got things fixed.
Brian McAboy: Right.
Adrian Reid: Just getting yourself off in a wreck just because you’re so used to the old normal.
Brian McAboy: Right? Yeah, absolutely. My approach to dealing with that is getting them into that new normal. Right? And for me, the new normal is a system which you have confidence in which you’ve back tested, which fits your personality objectives and lifestyle and the objectives bid as critical here because if you’ve been beat up and you’re stressed about losing money, then your drawdown tolerance is low.
Brian McAboy: I believe that you need to trade within that tolerance. If you exceed that all of that past baggage is gonna come right back up and you’re gonna sabotage your training or end up upholding poorly.
Adrian Reid: Oh yeah. Well, part of the reason I’m grinning, is we’re … and a lot of people don’t realize this, but when they very first open their first account, right there is where a lot of things are going wrong psychologically.
Brian McAboy: Right.
Adrian Reid: ‘Cause a lot of people, they’re getting into this and they’re starting off trading more money than they should and they get the brokers as doing what they’re supposed to do is saying, hey don’t be trading with money, if you lose it’s gonna affect your lifestyle and keep you from being able to feed your family and all that kind of stuff, but of course the brokers, they want you to be funding as much as you as you will just like-
Brian McAboy: Right.
Adrian Reid: When [inaudible 00:21:14] your house. They’re gonna want you to buy as much house as you can possibly afford. Not necessarily what’s smart. If they can get you in a half million dollar house, you’re gonna stay in a half million dollar house, even though a $200,000 house might be proper for you and financially prudent. Brokers are the same way, and what they’re gonna do is they’re kind of walking you over to the edge and they’re helping you hang and look over that edge but hold on to you, so you’re like feeling your chest is just palming and you’re like, holy crap, I don’t know if I should be doing this or not. They’re pushing you way outside of those comfort zones and then having to sign off, okay, I accept this.
Adrian Reid: And so right from the get go, people are … they’re being conditioned to step outside their comfort zones and do [crosstalk 00:22:05] much riskier than are probably healthy for.
Brian McAboy: Absolutely, and as part of the trading system development process, I feel like identifying the edge of that comfort zone and taking a big step way back from there is ultra important. I mean, it doesn’t make the broker’s happy for sure, but if you as a trader have a system that fits you and you’re well back from the emotional triggers. Like it or not, trading is money and the financial fluctuations cause emotional challenges and that causes psychological misbehavior in the markets. No doubt. And I experienced it myself too. I can feel my emotions when the account goes up and down, I’m not a robot, but I know that my fluctuations are well within what I can stand.
Brian McAboy: And so if the system is right and the portfolio management kind of rules are right, we can stand well within our comfort zone and still succeed as a trader and not trigger some of those things. That then again helps kind of reduce the impact of the psychology or bypass it because we’ve got rules to follow which aren’t triggering us constantly because that’s not a place to trade from.
Adrian Reid: Yeah. Well, in that scenario, and that’s … that is really prudent, it’s good you suggested that, when I’ve had conversations with certain people along the way, they were doing that and they were in a problems was … And just everything was still statistically valid, but when they would get on a run where things are going better than they normally would for a period, just like it can be perfectly valid for your system to maybe go through a little drawdown where you’re losing 12 out of 15 trades and it’s just … It’s only gonna happen once every 10 years, but it is statistically possible for your system.
Adrian Reid: On the flip side of that, once in a while you might have a system that only wins 50% but now, hey, all of a sudden you’re just killing it for a little while just because that’s how the odds are rolling around, and what the challenge that I’ve had to help people through is when I start getting overconfident and the things are going better than our expectations-
Brian McAboy: No questions.
Adrian Reid: Reckless and overconfident, and all of a sudden that’s like, they’re only used to making $500 a week and now man, all of a sudden the last two weeks I’m making around three grand each week and damn, I was starting to have fun now, and they’re getting all amped up and it goes on long enough that they start getting overconfident and now they’re starting to deviate from system just because things been going so well. They’re feeling that invincibility kind of thing. And that can be a real tough one to [inaudible 00:24:49] back from until they lost all their gains.
Adrian Reid: That’s what I found it … and it sucks because I’ve experienced it a couple times myself where it’s like, yeah man, you’re just kicking ass and taking names for a little while and then you get too big for your [inaudible 00:25:03] and then you get smacked all the way back down to where you started just because it took that to get you to finally say, all right, I gotta quit screwing around.
Brian McAboy: Sometimes it takes that to say, “Follow the system.” Right. In the process and we wrap this up in a second here. I know I’ve got some terrible background noise, sorry about that everyone but, in the process of developing the system, if you can do the investigation and the thought experiments to actually understand how some of those behaviors will impact your performance, then the answers starts to become more obvious that you just follow the system. You have a run up, you follow the system, you have a drawdown, you follow the system. Because any deviation is the human psychology going on to the system, which is inevitably gonna cause losses or reduced profits.
Brian McAboy: I am trying as much as possible with all the people I work with to interrogate the system and understand the behavior in many different ways over many different timeframes, to build that understanding that your experience, what’s happening through your equity curve does not matter. You just follow the system, whether it’s up, down, sideways, keep following it, because if you’ve built it properly and if it fits you, then that’s what keeps you out of trouble. I think that the biggest challenge most traders have is keeping themselves out of trouble, and the easiest way to deal with that is, have a system that is profitable and just follow it, because anything else any deviation is gonna get you into trouble, my view.
Adrian Reid: Probably the worst situation for somebody to have happened and speaking directly to that is, when they deviate from the system and if they would’ve followed the system, they would have a resulted in loss but instead they won, ’cause it’s like that’s a double whammy there. Not only did they not have faced the negative consequences of doing the right thing, they got rewarded for doing the wrong thing, and that can be so tough especially if it happens two or three or four times in a short period of time. That is just massive just horrible behavioral conditioning, ’cause it’s like the whole carrot and stick is flipped around on and that man, that right there can just crush their confidence and assistance. As far as real [inaudible 00:27:37] honesty, just get back to the system like, but look and I’m like dude, get back to the system.
Brian McAboy: What’s interesting is that … is the measure of performance. I think another big challenge a lot of traders face is they’re rewarding or punishing themselves based on the wrong thing. Did I make money today? Did I make money on this trade? They’re actually the wrong things to measure. That the right thing … because the reason of the wrong thing is because there is so much randomness in, did you make money on this trade? And did you make money today? Or this week or this month? There is so much randomness in that, that you end up rewarding and punishing yourself on factors that are actually outside of your control, truth be known. What’s inside your control as a trader is, did I follow my rules today?
Brian McAboy: And if he can score himself 100% on that, over time, you’re gonna make money. Most likely if you’ve got a good system. I think that reframing what is good performance, what do I get a pat on the back for, really helps and in the early stages of trading, I think the quicker traders learn that. With $10,000 in an account and a trading system, you’re not gonna make a fortune this year. But you can reward yourself and build the right habits to make your psychology strong, so when you’ve got a half million or a million dollar account, you can keep on system.
Adrian Reid: Right. All right. Well speaking of that specifically, I mean that was why years ago when I developed the training performance analyzer, we were choosing of extracting your traits and running the metrics and stuff. As far as the data field where you put in the trade out, I added a field where you would score your execution, whether or not you stuck to your system, how well did you stick to your system? How well did you. … like I said, it’s literally an execution score.
Adrian Reid: If you stuck to your rules and you followed your system, you give yourself 100% if you went way off the farm, you know it might be 50% and then it would tell you that and that was part of one of your metrics that you got scored on for average over period, just specifically so they could track that. How well are you sticking to the process? How well are you … How good is your execution of the system as it is, simply for that reinforcement and to keep their focus there. ’cause that’s critical. Absolutely.
Brian McAboy: My favorite thing to do for new traders and experienced traders who are not yet … have not yet really cracked it and made hundreds of thousands of dollars in the market. Because if you haven’t yet taken a few hundred thousand dollars out of the market, then you’re still in the process of really cracking the puzzle for you and building the discipline. If you haven’t yet done that, one of the most important things for me to do is to help find the style of system that makes all of this easy. Because I know for me, mean reversion for instance, it’s quite hard. It takes focus and challenge and real mental energy to follow a mean reversion system to the letter and make it work.
Brian McAboy: I can do it now. I’ve been training for 18 years and all that, but I know psychologically that’s harder. But for me train following is dead easy, brain dead easy and it’s just a matter of clicking the buttons, clicking the buttons, clicking the buttons and trading is done. If you as a trader can get the system that fits you that well and execute it with discipline as you’re saying Brian, with this execution metric and making sure that’s 100% every day, build that habit. I think that’s what sets you up for a successful trading career because you establish that rock solid habit of executing the system exactly early. Then you’ve got the right trading habits going forward. Maybe the answer is not system psychology. We’re gonna wrap this up here in a second, but it’s probably more than that.
Brian McAboy: You need a system, you need your psychology to work, but somehow they’ve got to come together in a way that makes it easy for you because there’s enough challenge in trading as it is without trying to use a method that’s hard for you as an individual. What do you think?
Adrian Reid: Well one lesson I learned long time ago, is just like you can’t separate your winning percentage and your profit loss ratio-
Brian McAboy: Right.
Adrian Reid: Who cares if you’re winning 99% of your trades, if your profit loss ratio is dreadful and you might still have a losing system. Same thing with system and psychology, they go hand in hand. Because, like I said at the beginning, “Trading is a mental activity, it’s a decision making process.” and so you gotta have this right, but this is where your systems running as well. This is where it’s getting executed, it’s in your head because you’re either following it and understanding it, and doing what you’re supposed to do when you’re not directed by your head or everything doesn’t work.
Adrian Reid: They go hand in hand it’s are you gonna develop the right system so that this becomes easier to function properly, and so they go hand in hand, which is really cool. That’s part of what makes it such an interesting occupation.
Brian McAboy: If you’re gonna buy trading books, you need psychology books and you need system books. You can’t do one without the other. I mean study your trading psychology all day long, you still don’t have a positive edge in the market, but study different systems all day long, if you can’t choose the right one for you and execute it consistently, you’re not gonna make any money and in fact it’s probably gonna be even worse because you’re gonna keep blowing up until you get that combination right, so psychology and systems both are both critical here.
Adrian Reid: Yeah. Well and just like with system, like you have been saying, you’ve got have a system that suits you as far as trading psychology books, and I say this with all the respect in the world to the guys out there that have established themselves as good trading psychologist and they helped a lot of people at the same time, understand if you’re struggling with trading, it doesn’t mean that you have psychological issues.
Brian McAboy: Right.
Adrian Reid: It doesn’t necessarily mean that because if you just to get into a position to trade, you’ve already demonstrated that you have the traits to make it as a trader, you’ve already proven that you’re okay with money, otherwise you wouldn’t have money to trade with. You’ve proven that you can succeed, otherwise you wouldn’t be here. You’ve already demonstrated the traits that you need to win a trading. It’s proven just in the fact that you’re here, you’re in a position to trade. Are there other things that might be messing with you? Possibly, but what I would suggest is don’t let anybody talk you into thinking that you’re screwed up as a person.
Brian McAboy: Absolutely.
Adrian Reid: If you look into psychology, look into performance psychology, ’cause that’s really where you’re gonna find what’s applicable to trading. Not necessarily, just ’cause somebody is saying this is trading psychology, don’t necessarily buy into it. Because if [inaudible 00:35:08] saying, “oh no no you’ve got [inaudible 00:35:10] and issues.” It’s like no, I’m not in love with my mom and that doesn’t affect my trading. Even if I were, this is trading.
Adrian Reid: How do I get good at what I’m doing and then get consistent at it.
Brian McAboy: I would just add an extent to that because this whole industries around both of these things. From the other side … from the system side, my suggestion would be don’t go into any old system and try and solve your psychology so that you can trade that system, because if that system is wrong for you, the system is wrong for you. If you’re a really patient, considered a longterm thinking person and you’re trying to day trade, you have the wrong system and no amount of psychology is gonna change who you are as a person quick enough, for you to ever make any money in the market.
Adrian Reid: Right.
Brian McAboy: Instead of trying to fix you, find a system that fits you and the amount of psychological work you’ll have to do is dramatically less-
Brian McAboy: Oh yeah, that really [crosstalk 00:36:19]-
Adrian Reid: So much easier. Don’t just buy a system, learn how to build one for you or learn how to understand yourself so you can find the right one for you. That would be my message.
Brian McAboy: Very cool.
Adrian Reid: Very good. Okay. Trading psychology or trading system which is more important, interesting debate. What do you think? Comment down below this video you’ll find a chat stream, let us know what you think. If you have any other questions that you want debated because there is conflicting information everywhere in the market and I’m super keen with Brian to kind of go head to head on some of these issues, take different sides of the argument to help you understand, what it is, that’s really important for your success as a trader, so comment below, let us know what you think and what else you want us to invite. Brian, any final thoughts?
Brian McAboy: Well close to this, I hope it’s been helpful for everybody. Trading is a top occupation, it’s a skilled occupation, it’s one that … well it’s a true profession. Not only the people that become professionals get paid like professionals, you can’t just come in here and screw around. If you go into it and you’re sincere about it and you’re focused on becoming a good trader, you become who you need to be with the understandings and skills, you’ll be okay. If you just want to be somebody who’s here to make some money and find like an easy push button kind of thing. You’re in the wrong place, go to Vegas, you’ll probably do better there and have a better job.
Adrian Reid: Well, you’ll probably lose less but have more fun.
Brian McAboy: Yeah. Like I said, hopefully it’s been helpful for everybody anything we can do for you. Definitely. Slide in the comments and that’s all. Hopefully-
Adrian Reid: The other thing will do is, we’ll put some contact details below so you can reach out to us and get in touch if you need help with some of these issues or taking your trading further, because both Brian and I we’re very well aligned in our philosophy about how to work with traders and improve performance and help you along the way. But look, I wanna do a lot more of these videos, so I’m looking forward to the next one. I hope that it serves you, this is Adrian and Brian Enlightened stock Trading and Inside Out Trading. Out for now. Bye now.