John Locke Roundtable

Discussion in 'Round Table Presentations' started by Luke, Aug 2, 2017.

  1. Luke

    Luke Well-Known Member

    I was finally able to listen to last week's roundtable presentation and I appreciated it. That's the first presentation or interview that I've listed to from him. I shouldn't have watched it so late into the night when I was spent, so I probably didn't get as much from it as I could, but it was interesting. Especially that we both started trading options around the same time and I wasted so much time with binary gambling and he progressed like he did! That was pretty encouraging because it means I just need to focus.

    But, overall, I'm struggling a little to remember what the point I got from the presentation. Here's what I think he was saying: Be willing to take risks and accept that losses come with the risks. We can plan a max loss amount, but it's not always necessary to honor that during intra-day moves. This resonated with me because I've closed positions down when I thought I'm supposed to cut out, even though I didn't think it was the right move, because I wanted to honor the rules I wrote at the beginning of the trade.

    I think the biggest advice I want to teach my son is that a losing trade doesn't mean it's not working. The only time I don't like the loss is when I knew I should have made an adjustment or started protecting profits and I didn't because I was waiting on a signal or some sort of confirmation from a friend or forum (see July M3 in my journal). I'm in a weird spot in my trading because I never had a goal of trading not to lose money, but to learn and follow a process, so I've already accepted losses are part o trading, but I haven't forced myself into a rule based system of adjustments, regularly taking profits, and taking losses.

    That's what I'm working on: have a regular system for taking and protecting profits, keep losers in a place where they make statistical sense with the overall plan.

    Hopefully this isn't too much of a ramble, but I'd like to read what you all got from the presentation and what were John's main points? What are you working on and how does this help you?
     
  2. Kevin Lee

    Kevin Lee Well-Known Member

    The following quote is what I learned early in my trading career from this book... https://www.amazon.com/One-Good-Trade-Competitive-Proprietary/dp/0470529407

    "Do not judge a trade based upon its results! A profitable trade may or may not have been a good trade, what I call One Good Trade.
    A loser may have been One Good Trade. If your fundamentals for a trade are sound, then that is One Good Trade.
    Consistently profitable traders obsess about making One Good Trade and not money. Your job is to make One Good Trade and then One Good Trade and then One Good trade."
     
    PK and Luke like this.
  3. SVL

    SVL Well-Known Member

    If you want to be completely hooked and never look back, then please listen to the interview of Kevin Lee by John Locke which took place in January 2016.
     
  4. Luke

    Luke Well-Known Member

    I take that back, I did watch this one, but in my mind that was @Kevin Lee presenting. That was an excellent presentation and was very motivating.
     
  5. Kevin Lee

    Kevin Lee Well-Known Member

    If a beginner tennis player plays against Roger Federer, the chance of winning even one game is essentially zero. But trading is different. A novice trader can win in the short term against professionals based solely on luck. This will give the beginner a false sense of achievement and leads him to believe he is more skillful than he really is.

    Short term performance is meaningless in trading. Winning and losing are part of the game. The only thing that matters is the long term expected value.

    Trying too hard to avoid losses is often counter productive too and sometimes create even greater unforeseeable risks as a result. What I learned is that a good trader should think like casinos. They have no idea whether they will win or lose the next hand, but they know as long as the players aren't cheating, over the long run, casinos are guaranteed to be profitable.

    Once I understood this concept, I stopped worrying about whether my current position will win or lose and I stopped worrying about black swans as long as my trading size is kept at a comfortable level.
     
    john, PK, Luke and 3 others like this.
  6. Luke

    Luke Well-Known Member

    Excellent point, @Kevin Lee. I think I understand this on a principle level, but I've got to build my track record of success against a long term track record and keep ensuring the long term expected value isn't violated by letting losers run and cutting winners early. Thanks for your thoughts here...
     
  7. ACS

    ACS Well-Known Member

    The thing about trading that makes it so different (and tempting) is that you can step into the professional arena as a complete novice. Try getting into a pro sports game, championship poker or headline a Vegas show with zero experience.
     
  8. Luke

    Luke Well-Known Member

    Combined with leverage and it's even more tempting. On a 10 year time frame, I'm only down about $2k over the total time, but it's only been based on some luck, some training, and the desire to keep coming back to learn how to protect myself. It's almost cringe worthy how much retail accounts are advertised, much less the so called gurus selling strategies. But it feeds the market and gives us an opportunity to keep scalping off a little bit.

    I think the point on the casino mentality is so dead on and that was an interesting part of John's presentation. Out of curiosity, does anyone here trade his bull spread or a similar spread strategy? Between the parking trade, his bull spread, and the Alper's credit spread presentation, it seems like that's the best place for a novice to compete against the pros.
     
  9. SVL

    SVL Well-Known Member

    John is the advocate of not being glued to the screen all day as this leads to overtrading, overadjusting and underperforming. He always recommends to make the decisions to adjust/close the trade only once a day and preferably during the last 30 minutes. He actually talked about this topic for almost 15 minutes during yesterday's community coaching session.
    Kevin Lee’s talked about the same thing in his presentation when he showed his live Jan 2016 trade where he adjusted during the mid day and then the market reversed and rallied up almost 3 %.
    I am not sure if you are aware but John Locke has on his YouTube channel over 200 free recordings of weekly Monday webinars where he goes through 4 different trades ( M3. Bearish Butterfly, Rock and V-Condor) during the period of almost 4 years. When I was learning M3 strategy last year, I watched those recordings where John Locke showed M3 positions and back traded the same positions in OptionVue. It really helped me to understand the mechanics of M3 trade.
     
    OutATime and Luke like this.
  10. PK

    PK Well-Known Member

    Kevin made a point that has also been crucial for me as a trader: size matters. As long as it mentally hurts to close a losing position and as long as it boosts your adrenaline levels when you start making money, you will not progress in a sustainable way. Scale down until it becomes a game, learn to play the game, confirm that you win consistently, start scaling up slowly, convert it into a (boring) business. Be patient, be slow and you will achieve your goals much earlier than those who are running behind the big jack pot.
     
    Kevin Lee, john, SVL and 1 other person like this.
  11. Luke

    Luke Well-Known Member

    That's a really interesting point to scale down until it doesn't hurt and you don't get an adrenaline rush. That's a really good perspective and self test on how business-like it is...
     
  12. Tony Moore

    Tony Moore Member

    I am trading since 1985..never had any other profession and I met lots of traders along the way ..some good (few) some bad ..most trading other people money..running justbfor the bonus....but all had to stay glued to their desk almost 24/7 ..when someone is telling you that has a system thet you can check once a day...be carefull !! He dosn't trade or he is selling you a dreem ! Pro trader don't write books or mentor on other professions OR EVEN ON TRADING..if you are profitable you keep trading or study more for the next way to skin the cat...you don't coach..or write books or learn hipnosis....
     
    PK likes this.
  13. Marcas

    Marcas Well-Known Member

    :)))
    His trades have relatively good track record and are traded by many, so there is something into this. I never confirmed data myself.
    That thing from quote and heavy, heavy promotion hold me back from joining.
     
    Last edited: Feb 25, 2018
  14. Marcas

    Marcas Well-Known Member

    Re-reading Peter's remark. After Feb18 (still pending), I have a thought to add: size matters, true, but you size differently for RegT and PM if keeping similar level of risk.
     
  15. PK

    PK Well-Known Member

    Over time, and having spent too much money on this kind of mentoring staff, I learned that you are right, which does not mean that there are a lot of things to end up learning from dream-sellers, even if this may boil down in most cases to see which is the way NOT to take to become a good trader.
    Effectively, Span (PM) margin provides another nice layer of money management. Until end of January I had leveraged my account up to 2.5-fold (75k of RegT-equivalent risk on a 30k account/bucket). On Feb2, I reduced my leverage to 1.5-fold (45k RegT risk on a 30k Span account) by buying hedges (puts, put debit spreads, ratio back spreads and, some days later, selling an ES future). During the crash, I cashed in hedges and used this capital for closing the most exposed positions to end up with no hedges in place, nicely adjusted positions and a RegT- equivalent risk exposure of 24k (0.8 leverage), and a portfolio PnL within the expected range such as planned before the crash. On a RegT account, I would have been forced to close positions before adding hedges that require additional margin (e.g., Ratio back spreads) and lost the opportunity to gain time (and money) during the crash.
     
  16. David Stewart

    David Stewart Well-Known Member

    I'm not really sure what the point of your comment is. Why can a Pro trader not mentor if he decides he wants to do that. And why can't he or she write books as well. And finally what the hell does whether someone is interested in hypnosis have to do with anything at all? Isn't that just a personal decision whether to delve into hypnosis, meditation, yoga, whatever. Again, just don't see the point of your comment at all. I'll also add that whether you choose to stay glued to your screen all day, is a decision that only you as the individual trader can make. There is absolutely no reason whatsoever that you cannot be successful only checking once per day if that is your style. You probably would need some alerts set but other than that, I proved to myself that I could actually be even more successful if I did NOT watch the screen all day. That was last winter when I was in Central America for three months. I did utilize some alerts however but other than that I only checked the markets once and sometimes twice a day.
     
  17. ACS

    ACS Well-Known Member

    I guess real traders do have the time to make derogatory posts on forums.
     
  18. Marcas

    Marcas Well-Known Member

    Yes.
    I still consider myself to be in exploratory mode and looking for dangers that others are warning about. Events of Feb18 increased my level of confidence. It is plain obvious that if not treated properly PM/SPAN can kill you, and it is easy to forget about dangesr - I should make a poster saying 'Feb18' and hang it on the wall in front of me as reminder for quiet times.

    I don't intend to answer for Tony. Before it explode in flame-war (kidding : ).
    I think it is very simple. Somebody expressed his opinion. Agree with it or not. Forum is pretty quiet, new blood is welcome (imo).
    My guess is that you are somehow involved and took post a bit on personal side. Nothing wrong.
    Let ourself express opinions even if they are biased or unpopular (imo).
     
    Last edited: Feb 26, 2018
  19. Tony Moore

    Tony Moore Member

    I'm sorry if someone got offended By my post...I will just not comment any more on this subject.
    Have a profitable trading week !;)
     
  20. CATTY

    CATTY Member

    I don't see any "ATM butterfly" can make money! Even M3 is difficulty to make money unless you are very good at Market Trend estimation, because in M3 both Butterfly and Call will cost your money to open and adjust lately will cause your losing more money. Only "Artfully Trader know how to adjust near expiring date and put the position into the tent. I think the easiest way to make money is "Covered Call"!
     

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