I recently returned from Las Vegas where the second annual Tickerville Trader gathering was held and where I was pleased to experience a successful run at the black jack tables throughout my stay. No, I didn’t return home with a new car and Papagiorgio status, but my play was consistent and I was rewarded enough to pay for just about all our ancillary activities. The interesting thing about it all is that I haven’t played Black Jack in a casino in more than 4 years, or just about the time I started to set off on a course to dramatically improve my trading. I correlate the two because throughout my experience at the tables, I kept thinking about just how similar the two are from a psychological and emotional state. More often than not, I pondered this correlation as I fought the urge to increase my bet out of frustration, or pass on a clear rule such as hitting on 16 when the dealer shows a king. Like black jack, good traders impose rules upon themselves however also like black jack, it is the great traders who stick to these rules regardless of how heated the situation gets. See if you find the same similarities I did.

Accept Your Possible Loss – In his book Trading in the Zone, Mark Douglas hits upon this subject beautifully where he discusses that most traders do not really accept the losses that are possible with each trade. When you sit at the black jack table, each hand you play you face the real possibility of losing the money you have bet, rarely can you lose more. Each hand is independent of the others and each time the player puts forth what he is willing to lose. So many traders do not identify upfront the amount they are willing to lose, whereby setting a stop loss and accepting defeat when the trade is over. If they did, they would immediately be a much better trader taking steps to remove the emotional state of hope that accompanies each trader without a plan.

Play The Grind – There is a misperception about being a successful trader. Those looking in assume it is a sexy or exotic profession where most successful traders will tell you that it is more like pick axe work than anything else. That is because successful traders know that their edge gives them good odds over time as long as they keep pushing forward knowing that, as mentioned above, each trade is unique and therefore independent of the others. As long as the trader remains in the game, they know that over time they will prevail. When sitting at the Black Jack table and observing other players, the biggest downfall I saw from others was varied bets most of the time out of emotion and not high probability. Typically a player would go on a losing streak and rather than sticking with their original bet, would become frustrated assuming that it was surely the next hand where the cards or ‘trend’ would change. Most of the time they would lose these hands and dig themselves deeper into the hole. I ponder the issues that some traders have recently gotten themselves into, shorting Volkswagon. I wonder what else, other than pride would make a trader throw good money after bad, assuming they knew when the trend would change. Rather than allowing emotions to dictate your trading, identify what you are willing to lose, allow your stop to dictate the size of your trade. Remain consistent and grind it out. Stay in the game and over time you will chip your way back to highs.

No When to Get Up – There are typically three variables that always cause me to step away from the black jack table.

1.) If my designated stake is gone – Whenever I go to Las Vegas I set out with a set amount I am willing to play with over the course of a weekend. I will separate this into smaller amounts, which will be what I sit down with at the table. If I happen to lose at a particular sitting, I step away, accepting defeat and moving on. Sometimes the cards simply don’t fall into your favor however I do not get angry and pull out more money. While I don’t have a set amount for the day while I am trading, I don’t throw good money after bad when I am stopped out of a trade. When the trade stops me out, I leave it be. If it sets up again, I take it, but I don’t keep pulling out new money when it is already broken.

2.) Profit or Time – Each time I sit down to play, I do so with a designated time allotted or profit goal. If that profit goal comes in the first 5 minutes, whether I like it or not, I step back and move on. On the other hand, if I have given myself 2 hours to play before lunch, and that 2 hours is up, I don’t change my plans and stay. I get up and accept the money I have made or lost. Whenever I enter a trade, I identify ahead of time the time allotment of the trade, whether it is a swing trade, a day trade or a very long term speculative hold. When I designate this ahead of time, it helps me to stay on the right path with my plan. I also set designated profit targets where I know when to peel off gains and step away.

I always wondered why so many excellent gamblers were excellent traders. I thought it might be personality or their desire for action. I now know it is their ability to define and control risk. It is their understanding that success comes through a grind and not in big scores. They also know they are nothing without a stake and above all they must remain in the game. While I might not go back to Vegas until next year’s Tickerville gathering, I won’t soon forget the correlation between what I do every day and what I did over the course of a weekend. Next time, I’ll bring a little more cheese and might just call myself Papagiorgio after all.