Line Your Own Pockets

Michael: 00:00

Alright, everyone. Welcome to another episode of Line Your Own Pockets. We're recording this on a different than normal day, and that's gonna lead into the story here. Because what we're gonna talk about is having redundancies and everything for your trading. So the day we were going to record this, I went and I dropped my kids off at daycare and I come back and there's no power.

Michael: 00:23

And I'm looking outside and it's like, it's pretty beautiful day for Canada. All things in I'm like, what what the heck is going on? We got so we got no power. I could barely get on with my cell phone to even message Dave because everyone's probably trying to connect to the same tower at the same time, so that's impossible to use. And it turned out that randomly, a bus backed into a telephone pole.

Michael: 00:48

And because I'm so rural, there's only one circuit for all of that. Knocked out our power entirely. I had to go all the way back to daycare to get the kids because they don't have power, and we don't have water. We have wells, and they need power to operate. So you can't have thirty, fifty kids in a building without being able to give them water.

Michael: 01:06

So a whole nightmare and a mess, and and this kind of got me and Dave talking about a great idea for this podcast of making sure that you can operate whatever it is you're doing in your trading operation even when just the most random unexpected thing either takes you out or takes your technical setup out, know, knocks out your power, your Internet, whatever it is.

Dave: 01:31

Yeah. And there's so many things that can go wrong that you just can't imagine.

Michael: 01:35

So Mhmm.

Dave: 01:36

I remember you know, it's not really that important if you're not trading a lot and you're not making money. I mean, maybe sometimes for some traders when the power goes out, that's a good thing so they don't because they don't trade. But when you start making money and, you know, the people I work with, this is what they do for a living, the more important that is. It's and it kinda sneaks up on you because if as you scale up your trading, it becomes a more important topic as time goes on. So and, also, eventually, something is going to happen.

Dave: 02:14

Like, it's just it's not if, it's when. So it is something you need to be thinking about. And I've thought about this a lot over the years. So I I've I've changed a little bit over the years with this topic, so I think it's a good one that we'll get into. So tell me, the first thing I asked you once you were able to connect was, okay, do you have any trades on that you're unprotected or, like so tell me how you think about that.

Michael: 02:48

Well, right, as a swing trader, you know, I always have trades on. Now this all happened before the market. So in this instance, if it came to day trading, it wouldn't have been an issue because I wouldn't be able to place any or or get any out. But as a swing trader, yeah, I've always got positions out there. But it does make you think of, you know, your house is vulnerable to not having power at some point.

Michael: 03:14

Right? And and then also not having Internet there as well. So even, you know, I was thinking of, you know, do I crank out the generator? Right? Because that's one kind of backups that you should think of not only for your family, right, in event of power outages, but also for your trading.

Michael: 03:31

I have the ability to if I wanna go out back in the shed and pull out the generator and start it up and do whatever, I could power a, you know, my router and and all of that very easily, fridge and basic things like that. So, you know, that kinda had me thinking that if if I needed to, if the cell phone towers continued to be unresponsive or something like that, you have to have that backup. But yeah, that's as a swing trader, very rare I'm sitting in a 100% cash, sometimes a lot of cash, but, you know, it's very rarely all cash.

Dave: 04:05

Yeah. And, you know, this for for me, it's easier to think about when I think about this right from the beginning as I'm creating my strategy. So I remember when I was creating the automation for some of the very first versions of the trade client years ago or what, you know, ended up becoming the trade client, I knew that there were certain points in the process for using some APIs where if your power went off at this one specific instant, you could be in trouble. You could have a position where the stop wasn't active. And I knew that, okay, that is very unlikely, but it could happen.

Dave: 04:52

And I would sort of stay awake at night thinking about these scenarios. And because the important thing to think about here is this is your path to confidence. Like, this is a huge part of it. Like, you're thinking about what are the big risks that I'm not thinking about? What are what am I not considering that could happen that I'm not thinking about now, and how can I prevent it?

Dave: 05:19

And that was a big reason that I went to Interactive Brokers and used their API specifically because it there's a one very nice feature that I still don't see anywhere else, And that's you know, we talked about the timed exits last time. That's one thing. But the way they do their orders, it's it's beautiful because, basically, there's a the difference between a queued and a transmitted order. So you can queue orders and then transmit them once they're on the platform. So what that allows you to do is and this is the way the trade client that comes with Mabe kit works.

Dave: 05:57

Your entry order is is queued. All your exit orders are queued, and the very last exit order is transmitted. And when you transmit it that way, all of them go live at the same time. So there's literally not a situation that can occur where your entry order is active, but your exit orders aren't. And that's built into the API.

Dave: 06:22

And that was a big a big reason I switched there because of that stability. Because just think about it. If you if my power goes out, there's no I'm always protected. Like, okay. Maybe I won't be able to make new trades, but the trades that are already in there are just gonna play out on IB servers.

Dave: 06:44

So I'm not ever in a situation where I'm in a panic and need to have my power come on or my Internet to come on or my router. I need to get a replacement router to make it work. Right? So that's a huge thing, but that comes from thinking about that from the very beginning.

Michael: 07:02

Well, yeah. And if we talk about, I I guess, steps of complexity to solve this solution, that's like the bottom rung, is to make sure that on order entry, like you mentioned, there is held away from your machine, so held on their servers, a stop loss, and then, like you mentioned, some sort of timed exit if you're day trading, if you're swing trading, it's less of a big deal. But that protective stop, even if there's no target or anything associated with it, at least that saves from, like, an absolute catastrophic event where you're, you know, short something even worse and it's it's just rocketing. You have that order that will just execute a market and and away you go. So that's step one.

Michael: 07:48

And that's the first thing from the swing trading side of things that just made me feel totally fine is I had all these orders out. I've I've been in these positions, but they all have stop loss orders associated with them. And I just don't I'm not worried about that because it will just trigger at some point on its own, and it's all being held at my broker. It's not being held at my house like a meteorite could fall in my house, and at least these trades will get stopped out eventually. You know, if I didn't have time stops associated with them, then they may not close on their own.

Michael: 08:20

But I'm not worried about, oh, no, you know, the power's out. I'm gonna lose way more money or even like blow up an account or something based off of, you know, you know, one dumb thing that was not done by me. It was done by the bus driver.

Dave: 08:35

Yeah. And, I mean, in the area where I live in North Carolina, we have hurricanes. And I remember very distinctly the power going out for a week when a hurricane came through, probably it's probably twenty years now. But these things can happen, and you need you need to think about it. And just just because it's rare doesn't mean it's not gonna happen.

Dave: 08:57

So and those are the kind of things where you can avoid a big loss and and you have more risk on than you think.

Michael: 09:09

Mhmm.

Dave: 09:09

And this is, like I said, this is a big part of a path to confidence, not having to worry about these things or controlling what you can actually control.

Michael: 09:19

Well, so so that bottom rung, that bottom layer, that's kinda that's step one, and that stops the the catastrophic, you know, loss or event or something like that. But, you know, let's kinda go, I guess, up the complexity scale just a little bit. Right? And say, okay, well, like you mentioned, if you couldn't trade for a whole week, well, right, that's unfortunate. So, you know, you're you're missing a lot there.

Michael: 09:45

So, you know, what would you kind of say? Because I've got some ideas for that that next step assuming you are your house is completely out of power and that because it happens here too. It's usually like ice storms, things like that that, you know, way down the lines and and can take people can't physically go out to fix them because you're not gonna go up on a ladder or one of those cherry pickers when there's an ice storm happening. So two to three days without power is is actually pretty common. Probably happens a couple times a year.

Dave: 10:16

Happens a couple times a year in Canada?

Michael: 10:18

It has. You know, I remember we had one we had one year, like, two years ago where I think there was, yeah, probably three instances of a day, two, and then the longest one, I think, was four days without power from hurricanes and ice storms and things like that.

Dave: 10:36

So I used to live outside of town. Lived there for many years. Loved it. And it was on a different electrical service. So there was one power company there.

Dave: 10:52

I've got a different power company now. And there were definitely more power outages when I was out of town. And now that I'm in town or closer to town, there's definitely a lot fewer. I have access to Google Fiber, so Internet's a lot more reliable. So it has I I get that it's you know, I'm probably gonna jinx it here, but the you know, it's it's kind of a luxury to have this situation where I don't really have to think about it that much.

Dave: 11:25

And but if it did happen more often, I would think about it more, and I would the first thing I would do would be thinking about a virtual server and running all the stuff on a virtual server outside of your home. Now because things are so reliable here, I don't do that. I I think that has some complexity. There's some cost there.

Michael: 11:54

Mhmm.

Dave: 11:56

I just feel more comfortable not doing that now. But if if I was in a different situation where, certainly, the power's going out four days four days in a row once a year, I would definitely be thinking about that.

Michael: 12:09

Yeah. Because that was kind of the next thing that I I started to to mill about. And I had done this for years just because I was working at Tradeideas, and it's a Windows only application, and then I had my Mac. So what I did is I just bought a cheap AWS server, and I would just I use that. The beauty of it is is then for the job too, I was traveling a ton, and I was able to always connect and have interactive because with with the trade ideas, the brokerage plus, and all that, you had to have those running.

Michael: 12:43

So I'd have I could have those trading all the time. And I replaced that with just having a PC at home. The reason I did that is because to get a a VPS that is powerful enough to do some of like the AI stuff and the back testing, whatever, it it becomes like insanely expensive. Right? Cheap VPSs or or light VPSs, you could say, are actually really cheap.

Michael: 13:07

You can get something with, you know, a decent little processor and maybe eight gigs of RAM, and it's it's relatively cheap, like less than a $100 a month. And then but to get something beefy is expensive, but that's actually exactly where my brain went. I said, okay. Well, do I create, which just you're right. It becomes cumbersome.

Michael: 13:25

So I've got my Mac for content creation and, like, personal stuff, and then I've got the PC there for back testing. And then do I have a whole other VPS? And the only purpose of that would be to trade, to store the backtest Yeah. And to store, you know, any any trading related things. That to me seems like the ultimate solution.

Michael: 13:45

I don't know if it's the correct one, but it does seem like kind of the ultimate. Because then it's it's located generally, if it's AWS, it's actually probably colocated across a bunch of different places in the world, and

Dave: 13:58

Yeah. You can be

Michael: 13:59

very sure it's gonna be up.

Dave: 14:01

Yeah. And you can control where your workspace is, and that's what it's called. So if you go to AWS, the the service is called workspace workspaces you can create.

Michael: 14:11

Mhmm.

Dave: 14:12

I'm sure there's other ones now. And at the time when I was really scaling up my trading, that wasn't an option or I didn't know of any options. So but yeah.

Michael: 14:23

There are actually, there are trading when I was looking at it because I've since then, it was about a week. I think it was, yeah, last week that this happened. I've been looking at them. There's a couple that actually at least branded and marketed as trading VPSs for quants and they actually come pre installed with like Interactive Brokers. Think Amnibroker and a couple different things.

Michael: 14:48

You have to use your own licensing and everything. But what they advertise is that they're located like in, I think it's New Jersey next to to the other ones. I don't know how huge of a difference that would that would make probably for especially for what I do little to none, but that is very interesting that there are these things that are built for quant nerds like us that that exist in, and that's their whole business models. They just create these servers for for people out there who want to trade and they want a VPS to do it. And I found this because actually there's a whole bunch of Australian people.

Michael: 15:26

Right? So this could be a whole another thing. I know the I talked to if you're Australian, I guess, comment down below because I so many systematic Australian traders out there. I just it's a huge community and I think it's because of the time zone and then also the difference. So, you know, you could be thinking about something like this for, you know, power outages or or unexpected things.

Michael: 15:49

But also, if you're on the other side of the world and you notice a bit of lag back and forth, it's something to look at anyway.

Dave: 15:55

Yeah. For sure. I mean, the other thing I was thinking about as you were talking there was you could split up the backtesting and the real time trading. Just like I'd suggest with Amber Broker and the having a backtesting database versus a real time trading database because the back testing is what's gonna be the hog.

Michael: 16:17

Mhmm.

Dave: 16:19

It's gonna be resource intensive. You need a lot of RAM. It'd be silly to pay for a VPS for that, I think, because you're gonna have to pay for a certain amount of compute over the entire month where when you're backtesting, you're not backtesting solid the whole month. You're going in and out of backtesting. And Yeah.

Dave: 16:38

The other thing is you could do backtesting at your leisure. Time is not of the essence, so you can do it kind of anytime if the power goes out well, okay. That's not a huge deal. Right?

Michael: 16:49

Yeah. And that's that was kind of what I was thinking is that and and just so you like, for the pricing of this, to get a a pretty big and even talking just like a base quad core and like 32 gigs of RAM, it was like 4 or $500 a month. So you just think of the mechanics behind that. Well, you could buy your own PC in like two months that is that spec. Or if you, you know, six months, you could get an absolute beast in in comparison.

Michael: 17:18

So, yeah, it just becomes prohibitively expensive. And I think it's just because most people are using these VPSs as a way to be able to connect to do connect to their office and do documents and things like this. So there's probably not that other side of it. Even ones that I explored that I thought might be interesting from the gaming side of things, cause there's a bunch of those as well. People who, you know, they have a Mac and they want a PC game and and you can do that as well.

Michael: 17:45

They still aren't intensive enough in the stuff that we care about, which is like RAM and things like that. They're more into yes. They're GPUs. Right? They've got you you you're renting, like, NVIDIA, I guess, you can rent actually GPU usage and things like that, but it's just not not what we need.

Michael: 18:03

So, yeah, there's not a lot of options for that. So, you know, the next thing is I would say, like, you look at your house, I guess. I don't know if you, like, have any backups inside that are are interested for this.

Dave: 18:16

So I've thought a lot about this and, you know, because I didn't have a VPS option at the time when I was getting my trading really off the ground. I would think about power. The the two obvious ones, power well, there's actually three. Power, your computer and your Internet. So you can have, you know, a whole house generator to power your whole house.

Dave: 18:47

I didn't think that was worth it. What I thought was, okay. Well, I'm I've got these orders down pat. I could let me just I'm gonna live with, if the power goes out, just not being able to trade, hopefully, the rest of the day or something like that. So I got a UPS, which is an uninterruptible power supply.

Dave: 19:08

Mhmm. So it basically has a battery in it and can power your computer for some period of time, thirty minutes, an hour maybe. So I had one of those with my computer plugged into it. And I was like, okay. I feel better about this.

Dave: 19:24

Over time, though, like, my power like I said, my power hardly ever goes out. It never really paid off in any way. You have to have software on your machine to communicate with the UPS, which is kind of a pain. You have to power it. Like, you the battery goes dead sometimes.

Dave: 19:42

You have to replace the batteries. Had to do that. So it just became you know? And then comparing to the reliability of my power now, like, well, I'm I'm just gonna live without it if the power goes out. So I'm I'm but that is an option.

Dave: 19:57

You you can have a UPS. That's a pretty inexpensive way

Michael: 20:00

Yep.

Dave: 20:01

To have that covered. So the other one is your Internet. And one thing that I thought very hard about At the time so I was using AT and T Internet at the time. It was not super reliable. So Internet outages were somewhat frequent.

Michael: 20:25

Mhmm.

Dave: 20:26

I thought about having a backup Internet service, and they actually make these routers that can connect to two Internet services at a time. And you can toggle, but, like, it can provide some redundancy. It's such you think about it. It's such a niche market. Like, no.

Dave: 20:50

There's not a huge demand for this thing. But at the time, I did some research to see if this was feasible just for some more redundancy with what I was doing. I concluded that, like, let's say you're using one as the primary. It goes out, and then how quickly can like, how seamless is it for it to recover and and convert to the other one?

Michael: 21:19

Yeah.

Dave: 21:19

Turns out it's not that seamless. Like, it it it may be a minute before things fail over.

Michael: 21:26

So not forgetting kick out and Right. Resign in. And

Dave: 21:30

Yeah. It's so it's not at least at the time, it was not perfect. So it didn't really seem like it was getting me that much. The other thing I thought about at the time was some of them will I think some of them were smart enough to basically have two Internet services going at the same time and using both of them simultaneously, so getting more capacity. So that's sort of interesting also, but and I'm sure there's a whole lot of complexities there.

Dave: 22:01

But it's something to think about. If you're depending on your Internet service, that that is an option to think about. And I'll I'll I I didn't go back and search for these devices. I'll have to go back and search for them again, maybe put them in the show notes if I can find them. But they were it was an interesting little rabbit hole to go down and and imagine how I could put myself at ease a little bit more.

Michael: 22:24

Yeah. So what I actually did is I reached out for the for the Internet angle. I reached out to my Internet service provider, and I have fiber here, which always surprises people because I live in the middle of woods. Yeah. They actually have, and I'm probably going to get because I mentioned I have a generator.

Michael: 22:44

Right? I can get it out. It's it's not a a house, full house generator, but it's kind of if things really hit the fan, it can do some heaters and things like that because we have that problem where that's not without power for a while, you know, we can actually freeze death out here. And the but in there's actually ones that have a battery, so the same as the the power supply that you talked about in the router itself. And because the router isn't that big of a battery hog, you can get, it says, eight to ten hours of consistent Internet.

Michael: 23:16

So anything that's plugged in via Ethernet or even on WiFi, it will be able to connect even when the power is out because long as that cable is not cut, then that's fine. So I thought about that as well, so I'm gonna get that installed. So that would be enough that in theory, I could have actually still done this podcast, which is what we're talking about, and trade it. And that leads me back to the computer because right now, I use a a MacBook for when it comes to, like, execution, things like that, I could do on on that side of things. So, like, simple things like the Basket Trader for Interactive Brokers, I use for my my swing trades.

Michael: 23:55

I could have Interactive Brokers installed on the Mac and use that. What I'm talking to you right now is on the and it's on a laptop. So that's another thing to consider as well is that if instead of splitting it up with, you know, your big powerful kind of back testing thing and a VPS, maybe it is a back tester and a laptop. Maybe your laptop is then your execution thing because they have come a long way. It's not like old chunky giant laptops.

Michael: 24:23

And if it's only for execution, you wouldn't need an extreme beast. So even if not as your primary, maybe you have a laptop as a back a backup and then to your Internet point tethering to your phone. So I intentionally have a different Internet provider than I have a cell phone provider. So in this case, it sucked that the all the towers were overwhelmed, but probably maybe a half hour or so after we talked, that got alleviated because everyone was probably going on their phone at the same time to figure out what happened to the power. And also the benefit of laptop is I could have just left.

Michael: 25:03

Right? So in this situation, and the power outage was the guy backed into a pole, so anything on that circuit was out, but I could have just picked up my laptop, which has a backup ability to to do the trades from it. And I could have just driven into a Starbucks or or coffee shop or friend's house or whatever, and open up the laptop and go from there. So start to think about these, you know, there are the grand solutions of of generators and all of this, but some of just the more little ones. Like, I was talking to a trader who didn't even have his broker app on his phone.

Michael: 25:35

And I'm like, well, that just seems like even if you never use it, if it's there Yeah. And you could sign into it, that's just a note. You can pick up your phone and and and exit trade. Like, there's, you know, kind of look at how much of a pain and how much of a cost it's gonna be versus, you know, how much you can save it. Right?

Michael: 25:52

Sending orders server side, having a laptop that has the ability to do your trades even if it's cumbersome to to set up or whatever. And and mobile things, that's I think, you know, the lowest hanging fruit that I think everybody, if you don't have right after you listen to this podcast, you should probably take care of those.

Dave: 26:13

Yeah. I think, yeah, most people could benefit from doing, you know, a little fire drill to, like, maybe even pull the plug on their computer and see how what they would have to do or at least simulate that and try to connect on your phone. How cumbersome is that gonna be? Do you have the right things installed? What's it gonna feel like?

Dave: 26:37

You know, if you set up your phone as a hotspot and connect your computer to that, how's that gonna look and feel? Like, go through the motions of doing that when, you know, it's not an emergency situation and get that ironed out. Because I'm sure there's gonna be some things that you haven't thought about that Yep. You're gonna have to step through or, like, you know, get the authentication working, something. Mhmm.

Dave: 27:00

There's gonna be some steps that you hadn't thought about that are gonna be easier to go through and document now, and it's not an emergency so that you're prepared when that happens.

Michael: 27:11

Yeah. And I I I think that is the ultimate the ultimate solution is is go downstairs to your basement at some point one day and just flip the circuit breaker to your office and go, okay, now what? How are we at how are you going to are you going to function? And, you know, you again, you could do that physically or you could just do it mentally and say, okay. Do I have and it could be as simple as a a little cheap Windows laptop, and all it has on it is these things signed in or, you know, some I think there's I don't even know if mobile hotspots are even a thing anymore, but can you tether it reliably to your phone?

Michael: 27:49

Can you right? All of these little things. And then look at where you are geographically. Like, when I told Dave that we get constant power outages due to ice storms and stuff, he was surprised. So there might be somewhere that you guys look at that has perfect weather, and and if so, invite me.

Michael: 28:06

The that you don't have to worry about this stuff. But and you say, oh, it's no big deal. But a bus hit a telephone pole. Like, it wasn't raining that day. It's not like, you know, there wasn't any possible it it was I it's hilarious how I walked in the door and the like, I'm flicking the switch and the power's not working.

Michael: 28:27

And my brain went to, did I pay the power bill? It's like, you know, I know the market was in a little bit of a drawdown or it wasn't it wasn't that bad. But it's still in my brain, I'm like, it's not like they can just cut off the power that I'm telling you. I'm like, did I not pay? But, yeah, it's you the point is it can be completely entirely out of your control in kinda there's nothing that you it's not anything that you could predict because the weather's not bad.

Michael: 28:53

It could not be anything. But, yeah, sometimes shit happens. Guess the moral of the story. Right?

Dave: 29:00

Yeah. So the the other thing I was thinking as you were talking there and the your computer going down, let's say something happens to your computer, a big thing that I've started doing is keeping very good, very anal documentation about the things I install on my computer. So I keep a a very tight list of things that I had to do to get this computer up and running every single step in meticulous fashion. And anytime I install something new, I go back and edit that same document. It says, okay.

Dave: 29:46

Here's the thing I installed. So you remember my our episode about me buying a new trading computer

Michael: 29:53

Yeah.

Dave: 29:54

And the the sort of the fiasco that was. So I ended up having to do that a couple times, like install a computer from scratch. Such a huge time saver. I got it down to where I could basically get the computer up from scratch in about thirty minutes

Michael: 30:08

with

Dave: 30:09

everything the the way I had it, including, you know, security keys, layouts for Amibroker, like, everything I need is in there. So and and if it's not, then that's a problem, and I need to go back and document that. So it's just been very helpful, and, it really just came out of just convenience because it was such a pain in the butt to to go through and forget that I, you know, I need to install this other thing that I don't realize I need until two or three days in. Yeah. But it's it's gonna come in very handy if your power goes out for four days or, you know, your computer's out and it turns out that you need a new one, you have to install stuff from scratch.

Dave: 30:55

That's gonna be very, very helpful.

Michael: 30:58

Yeah. And two two things there. One, that's a really good use for AI. Right? I think even I haven't tried this, but I bet you even with Cloud Code, you could go in and you could say document everything that I I have on my computer, you know, make a backup, write write your own file of of where to get this, and maybe even set a process that installs everything for you.

Michael: 31:20

Right? Go to the web, grab these, you know, these are the applications that we need in order to get going. And you could set up a process that all you have to do is go and type in a window and say go, and it just pops everything down on your computer for you and then you just need to you need to sign in. So that's a good one as well. And then another thing that I think is good that I've actually been doing a little bit here as well is because I have a Mac and I have something called parallels, right?

Michael: 31:47

You can it's way to run Windows on the Mac. You can do with a bunch of virtual software, but I've been periodically having like a version of the Windows that I'm using on the on the computer actually saved somewhere so that in theory, could just load it up with this virtual software and everything should be kind of laid out the way it is. But, yeah, that makes a lot of sense as well, just in case. And that could just be even your computer just explodes one day and you gotta run down to your local Best Buy and buy something that's, you know, cheap laptop enough to get you by in the trading side of things until you rebuild what you actually need. You might just need a a backup for a couple days.

Dave: 32:27

Yeah. The the other thing to think about here, this is probably the last thing that I will will will say, but this the math for some of these decisions changes over time.

Michael: 32:43

Mhmm.

Dave: 32:44

So, I mean, back when I was first trading, you know, I was making some money, but it wouldn't have been enough to justify, you know, having a huge redundant setup. Right? But as time goes by and you scale up and all of a sudden you're making real money, the math can change. Like, all of a sudden, it could be worth it to to go through and, you know, have the second Internet connection. Whatever it is, You and the the other thing that changes is tech changes.

Dave: 33:17

Like, VPSs were not a thing when I was first starting this. It wasn't even really an option where So now it maybe the math is different now. Maybe this the technology is different. The options are available. So all those things change over time.

Dave: 33:33

So I would say maybe once a year at least.

Michael: 33:39

Yep.

Dave: 33:39

Maybe when you do your taxes or something or January 1 or something, go through and think about this. Document your thoughts at the time. Go back and revisit them periodically. Because, like I said, if you're if you've been in this industry a while and you're serious about your trading, your profits are gonna go up over time or they should.

Michael: 34:01

Mhmm.

Dave: 34:02

And the the math is gonna be completely different years from now than it is now.

Michael: 34:07

Yeah. And it was you know, just to to relate to that, the so many people when I I worked at Trade Ideas and I I would help out with some support sometime, there'd be so many people who come in and just go, oh, it's Windows only. I'm not interested. And, you know, I always go back to them and say, you can get a a pretty good, pretty cheap Windows, like mini PC or desktop or something. You're talking back then before the RAM crisis and everything.

Michael: 34:35

You're talking like $300. $2.02, $300. You get a little tiny PC. It would run trade ideas and your broker fine. You'd be able to trade from it great, and then they would hoe and about that that cost.

Michael: 34:48

Yeah. And it's like the easiest way to say, okay, you are not a profitable trader yet. Because, you know, if you're hoe and humming about a $200 purchase to use a software that you believe will make you a better trader, that's less than one trade. Right? The the the difference between having that thing and and not having that thing.

Michael: 35:07

So you're right is that if you're new or you're not yet profitable or whatever, don't worry too much about this. Just take the day off. Right? Make sure you do the thing we talked about in the beginning where you have stop losses and all of that. But just take the day off and go and and do something else.

Michael: 35:24

But, yeah, when you get to the point that you're a 6 figure, right, high six figure, 7 figure trader, now you're talking one two day of interruption is a a sizable amount of cash. And, you know, the way the universe works is your particular system will work the absolute best when the power's out. That was the that was the day that you would have been short, when we're looking at car now, down 80% in two days. That's that's the the time that it would have wouldn't have happened the day before, and it won't happen that so you have to think about these things because you never know when, you know, the money's gonna come in. And if you don't have the backup, just the way the fates work

Dave: 36:06

Yeah. I mean

Michael: 36:06

the day.

Dave: 36:07

These incidents don't happen at convenient times. That's that's the problem. So yeah. But it's worth it's it's worth thinking about this. And and I remember, you know, not quite laying awake at night thinking about this, worrying about it, but it was something that was I spent a lot of time thinking about because I wanted to make it I I wanted to sleep well at night, and I wanted to make sure that if there's something that I could do to make my trading more robust, more reliable, I knew that that was a way that I could feel better about scaling up over time.

Dave: 36:40

And that's it's such an important part of that process. I I see it as, you know, fundamental to that process, you know, having that down pat and having a plan. It's sort of like having, you know, a plan for a trading system. Like, what are you gonna do for each fork in the road for this trade you're gonna make? I mean, that's just so fundamental to good trading.

Dave: 37:05

I mean, I think this is the same sort of thing. Thinking about, okay, what what could go wrong here? And and am I risking something where I could I could and and can I live with it? I mean, I think when you get down to it, you aren't gonna be able to satisfy every bit of risk that you have or can think of. Right?

Dave: 37:28

But you can minimize, I think, the big ones, and you'll need to make judgment calls about, okay, here's what I'm living with and here's why and here's, you know, here's what it would cost to alleviate that risk and it's probably too much right now. So but thinking through that, I think is just very important.

Michael: 37:46

Well, yeah. And you'll have a note for later. Right? You'll have something for later saying, not worth it right now, you know, maybe when I make x amount, I buy the the backup laptop or something like that. But again, great topic.

Michael: 37:58

So a lot of these the the best topics I think come across the just through the of, oh, yeah. That sucked. Let's try to let's talk about it with everyone and make sure you guys are prepared. So, you know, take whatever step of this that you haven't done yet and make sure you please do it for when a bus inevitably hits a telephone pole near you. But as always, I'm Michael Nauss.

Dave: 38:21

And I'm Dave Mabe. Talk to you next week on Line Your Own Pockets.