The Part-Time Trader (10 page)

You may say, “But I won't make as much money.” But you won't lose as much either, and the goal here is not how rich you can get off of the market (the fool's draw to trading) but how you can equalize your emotions toward the capital that you trade in such a way that the trading you undertake is close as possible to emotionless (since we are humans, getting rid of the emotions altogether is impossible, despite what others might claim). If you do this, the profits will take care of themselves.

Because you are trading with reduced position sizes, you will likely see your returns go up as you are not making as many mistakes and bad decisions in your trading and are able to trade with less stress and less fear and anxiety.

So, going forward, ask yourself, “How much do I need to reduce the size of my trades before I feel comfortable and near stress free with my trading?” When you find that answer, then that is what you need to trade with. If you reduce your position sizes and still feel the anxiety that came with trading before, then reduce it again . . . and again . . . and again until you find that desired state.

At the end, if you do this, I believe you'll be glad you did. For most, this will not be an acceptable course of action to take because excuses and reasons why they can't do it will block them from making the right decision and they will continue to flounder in their trading. If there is a reason for why you can't trade at a reduced stress level and
must
trade position sizes with which you are not at all comfortable, then there is probably a very, very good reason why you should not be trading at all.

One thing to remember in your job is that you are being paid to perform a set of responsibilities and you should do them well. That goes without saying. I say that because far too often it is easy to get caught up in the trade and do something stupid that will put at risk the job that you need more than the trading itself.

If you find yourself in a trade that you know you cannot manage without heavy emotions, pressing time constraints, or not meeting the responsibilities of your normal job (hate it or love it, it is still your current job), then you need to skip that trade. Trade in a way that doesn't affect the psyche or your ability to do what the job mandates you do. A successful trade is not worth much if its profitability results in your standing in the unemployment line.

The key here is to ensure that your job and your trade align with each other. That is what I dedicate the rest of this book to. Trying to be a day trader and an air traffic controller isn't going to mesh. Scalping stocks for small gains while you are supposed to be on foot doing security detail at your local mall is not going to work either. And if sudden changes to your day can happen at a moment's notice (e.g., a firefighter), then placing trades that won't go radically against you at a moment's notice is preferable.

The key is to find the optimal combination between the time that your job affords you to, well, do things not so much related to the job, and the time that your trading strategy requires of you. You can be a successful trader with minimal time spent observing the markets. If your job allows you to have much more time than the normal job to conduct personal affairs or to have downtime, then your trading frequency can be much greater as a result.

Essentially, what is true about the job that you hold should be the opposite of how you trade. Time-consuming job responsibilities means a trading strategy that requires you to be more hands off with your trading. Less time sensitivity and a job where you have the ability to work at your own pace without daily deadlines or a micromanaging boss allows you to customize a trading strategy that allows for higher-frequency trading.

Now it is important for you to make sure that the job requirements and trading strategy you employ mesh well with your personality and your ability to trade close to emotion free on the trading parameters and plan that you set for yourself. So you have three parameters to account for: (1) job requirements, (2) time allotted to focusing on trading, and (3) the ideal trading strategy that best coincides with your personality and risk appetite. If all three of these factors are not accounted for, then your trading will be a miserable failure.

However, by incorporating all three factors, you will position yourself for trading successfully, while managing a full-time job and maintaining good rapport with coworkers as well as finding yourself able to keep the emotions of the trade and worries that come with it from spilling over into your full-time job.

I managed to pull it off managing a high-stress job with my own particular trading strategy. But I did it without a road map and, as a result, had to do a lot of trial and error. If I was able to do it as an individual who is fallible and prone to screw-ups, I am quite confident you will be able to do the same. Much of what I'm about to teach you and the tips I provide come from my own shortcomings as a trader, and despite my setbacks, I exhibited a constant willingness to push forward and find a better way. Equipped with the content of this book, there is no doubt your path to becoming a full-time trader can become much less stressful and much more likely than the odds that I faced of shedding the restraints of Corporate America and becoming the full-time trader that I am today.

O
h, it seems like yesterday, the office roulette game. Your office was yours until someone above you became desirous of it. For most individuals it works like this: the bigger the office, the more prestigious, the better you feel about yourself, and the more highly someone might think of you. It is really superficial when you think about it.

I benefitted, at least for the purposes of this book and my being able to explain it to you, from working in any and every kind of office work environment. If you can think of it, I have been there. From having my own office to shared offices, to desks in the hallway, and even a desk in the middle of a common area surrounded by seven other offices that had direct access to see at any given time what was on my computer screen. I've been in the cubicle environment and even in settings with two or three people crammed into one cubicle area—awkward, to say the least.

One thing worth noting right away is that you have to adjust to your environment. If you work at a company that prides itself in musical offices, then you need to have a basic game plan that will allow you to adjust to any setting or circumstance. Just to reiterate what I said in the opening paragraph, while it is nice to have a large office, it is not likely to last, because if you like it and find it spacious and fitting for all or most of your needs, then there is likely someone at a higher pay grade that will think the same as well and will act on obtaining it from you.

The boss man, where I came from, had it laid out that your level corresponded with the number of tiles on the ceiling (you know those square tiles that are about 2.5 feet by 2.5 feet). Entry or clerical folks were not technically allowed to have offices until all those over them had acquired their offices, and if you were a Level B, you were entitled to an office, but one without a door, most certainly without a window, and that office could have only eight full tiles or fewer on the ceiling. However, if office space was limited, you were required to take a cubicle, share an office (up to four people in one office), or possibly reside in a cubicle with just as many people. Often, there were ways around it, but that was only good until someone became interested in where you were staying. Squatter's rights meant nothing!

I had one office where there were probably 25 ceiling tiles and even included my own conference table. How long do you think I kept that office? Try a month. They not only moved me out of the office but out of the building into a dingy 50-year-old building that smelled of rotten cheese and mold.

I would later come to realize that the key to keeping your very own office was to have the worst office possible. If you were afforded the choice between a very plush office and one that was just a little bit larger than a broom closet, I would recommend choosing the latter. Why is that, you say? Consistency, longevity, and continuity. If you constantly pick out the best office, you will constantly be finding a new office, too. Your objective is not to gain glory or look special or have some kind of air of prestige associated with your name. No, it is to trade in such a way that you can eventually leave the workplace, or at the very least successfully trade part-time as a full-time employee.

Take the office that nobody wants, and when it comes time to reshuffle the office space, you will not be at the top of the pecking order for removal. In fact, if you pick a dingy enough office, it may keep you where you are while others above you are relegated to the cube farm. They might just be glad that someone was willing to occupy the office you were in.

Often, we cannot choose the office we eventually come to call our second home. It is usually forced upon us. With that said, I am going to go over the most common office setups and how you can survive trading in the most undesirable of conditions.

Figure 5.1
shows a simple office layout where the desk is strategically placed in front of the door. Do not put the desk against the back wall as some may do, because curious eyes will always take a glimpse at what is on your computer screen. So don't even think about putting your desk up against the wall and in plain sight for all to see.

Figure 5.1
A Basic Office Layout

Figures 5.2
and
5.3
show some other acceptable office layouts, for various circumstances, including offices you share with others.

Figure 5.2
Do Not Put Your Back to the Door

Figure 5.3
Another Simple Layout

Figure 5.4
is similar to the first design, but this time you have the door in the middle of the office. You will want to tilt the monitor by placing it at the closest corner of the desk and closest to the door as well.

Figure 5.4
Layout Mistake

Figure 5.5
Complex Layout if Necessary

You must avoid taking the desk nearest the door, but if someone claimed that location for their own, then you have no choice but to move the desk to where it is more privacy friendly as well as being easier work with (see
Figure 5.5
). It is not perfect, and it does put your new office mate somewhat in the line of vision of your monitor, but if you keep your body in front of the computer monitor, then you should avoid giving them a clear shot of it. Besides, the employee sitting behind you has to be focused on his screen and would have to perch his head over his own monitor to view yours.

Finally, if you have side-by-side desks; if you are farthest from the door, tilt the monitor away from the door as shown in
Figure 5.6
. This desk is your first choice. If you do not get this workspace, then make sure to align your monitor accordingly for seat two.

Figure 5.6
Side-by-Side Layout

The final layout (
Figure 5.7
) deals with office sharing in a more square setting than the rectangle versions we were dealing with. Either one of these desks is worth taking. The only thing you do not want to do is to place your desk at the far end of the room and away from the door. If that is the case, you cannot avoid having your screen monitored by everyone who walks by. Between the two shown, I would choose the first one because of the way the door opens and the ability to keep your screen private.

Figure 5.7
Multiperson Office Setting

The goal for all of these layouts is privacy. Arrange the desk and the location of your monitor based on the desire to keep your computer screen private if the boss man strolls into the office and from those who are passing by. Perception in the workplace is everything, and a lot can be falsely assumed by what is seen in just a moment on your work desk. So keep them from guessing its contents at any given time by being more strategic with your workplace layout.

A big chunk of this chapter pertains to dealing with matters that you really cannot do anything about. Whether it is the office space you are dealt or the computer you are assigned, the important part is that you adjust appropriately to the circumstances you are given.