Interview with Jared Tendler
Okay, everyone. Welcome to another episode of Line Your Own Pockets. As you can see, we have a special guest here today. I'm going to allow David to do a lot of the intro, but I'm really excited. I was actually listening to a lot of Jared's audiobook to to prep for this and learning a lot about the psychology game, right?
Michael:And I think the mental game and learning about your mind and doing all of that is so important, even for us systematic kind of quant nerds and maybe even more so. So we'll get into that as well. So Dave, why don't you carry away intro and talk about how you guys started to communicate and how you heard of Jared.
Dave:Yeah, so just to kick things off, Jared, why don't you for listeners who may not have heard your name or maybe hearing your name for the first time, tell us who you are and what you do.
Jared:Yeah. Well, happy to be here, guys. I am a mental performance coach, mental game coach. Been doing this for twenty years now. And I started working with golfers because I knew golf well.
Jared:I played in college, was a three time All American, wanted to play professionally, got tripped up on my own mental hangups, trying to qualify for the US Open, play big tournaments. But kind of pivoted here. Started with working with golfers in 02/2005, met a poker player, used to be a pro golfer. And all of sudden, there was this sort of huge open runway where nobody was doing this in poker. And so in 02/2007, I kind of pivoted there and began working with poker players around the world and wrote The Mentally of Poker in 2011, The Mentally Game of Poker two in 2013.
Jared:And around that time, traders started picking up the first poker book and basically saying, look, if you change the word poker to trading, it all applies. And so I started kind of working with traders, got some institutional gigs, would fly out and work with 40 institutional traders on a three or four day stretch and do that on a monthly basis, then just kind of kept growing. 2021, wrote the Mentally Ambit Trading. And now my kind of foray into trading has kind of gotten even broader. I still have professional golfers that I work with and still do that and work with other business professionals and lawyers and I've got radiologists, entrepreneurs.
Jared:You know, it's You kind of change any word to performance or, you know, any environment can benefit from, you know, improved ability to make decisions, you know, more emotional stability, better focus. There's a whole lot of kind of mental facets to anything you do and take seriously. And I just happen to work with people that tend to be more on the intellectual scale and intellectual endeavors and kind of the hardcore sports psychologists who like the professional NBA teams, MLB teams that have people on staff. That's never really been interesting to me. I like the variety and I like being able to kind of work with people around the world.
Jared:I've got clients in 45 countries. So on any given day, I'm talking to people on three continents. So it's kind of cool.
Dave:That's great. So, Jared, just a little bit of background about how I came to know you, and it's been several years now, and then we finally actually, a a former poker player that I'm coaching now for trading put us in contact. And I won't mention his name because he likes to keep a low profile. But so years ago, you know, I had been trading for many years, and a good friend of mine was really into poker. And I thought he was encouraging me to try it.
Dave:And I thought, you know, there's probably some good things I can learn from trying to do poker, going back and being a beginner at something that I could pick up and learn and apply to my trading. So for a while there, I was really into poker. And I think it was before you wrote the first book. And I remember thinking when that book came out, I believe there was another very popular psychology book on poker for many years before that that's like one of the cornerstone books. I was like, man, what a gutsy move to write a book.
Dave:Now it seemed like it was in response to that. And then when I saw you write this book on trading recently, I was like, wow, okay, this is somebody I need to know. So yeah, worked some connections and now here we are on the podcast. So I'm really happy that you're here and I want to go into a lot of things, poker, trading, lots of stuff. But I think the first question is, I think it's very interesting to look at top performers any field.
Dave:So tell me what you talk a little bit about what you learn from top performers and what seems like on the surface might be a different domain, poker, golf, but can apply to different domains. So what are some things you pick up there that you learn from and that listeners might be able to learn from?
Jared:Yeah, mean, I think at the end of the day, like you have to love what you're doing. I think people sometimes shy away from that, you know, thinking that you can do whatever you will whatever you want, whatever you put your mind to. Sometimes people put their mind to things that they feel like they have to, and it becomes more job like. And I'm not saying that you can't be successful as a trader or in any endeavor if you don't love it. But it gets really, really hard to become elite at the top of the game.
Jared:So, yeah, trading, there's way more levels where you can be successful than there is in professional golf and mostly in professional sports, just like there is in poker. I've got plenty of poker players who don't love it, but they're kind of stuck and they're 36 and making good money, not going to be able to do anything else. So they just keep doing it and kind of grinding out and finding a door. Because without that love and that passion, you're just not going to put in those extra hours. Sometimes, like, work ethic seems to be kind of put at the top of the list of the traits that are kind of most causally connected to success.
Jared:But like, what drives the work ethic? I mean, if you love something, it doesn't feel like work most of the time. And then the times where it is really hard, you're still willing to do it because you understand what it's going to get you. But if for the most part, it's a grind, I mean, gets really tough to put in the kind of hours to really create a different, you know, the delta between you and others that are out there. So, yeah, I think the love, the passion, the motivation, the drive, like that, that is at the top of the list.
Jared:And that doesn't mean that it always has to be optimal, right? It's going to go through ups and downs. And I think people sometimes think like, oh, if I'm kind of falling out of love with this thing or I'm struggling to find the passion, the motivation, that means there's something wrong. It might mean you're burned out. And that's legitimate thing.
Jared:And traders absolutely suck at being able to recognize burnout. Market's open. You got to be there. You got to be making money. And I can make arguments that taking days off, even weeks off regularly throughout the year will make you more money long term than they would, you know, being in front of the screens at all times.
Jared:Now maybe a little bit less so if you're truly systematic and algo and, you know, that's just, okay, fine. You can turn this thing on, turn yourself on, just be there and make sure you press the buttons, fine. But if you're going to be able to truly develop and grow and improve your execution, your system, your strategy, and adapt to different market conditions, being able to have clarity of mind and presence and poise and focus is a that's your mental and emotional capital. You burn too much of it. You're in a struggle.
Jared:So, yeah. Going back to the original question, I think that those kind of waves of motivation and passion are not necessarily a problem. But like when you have full energy and you absolutely love this thing, that is, in my opinion, one of the most causally connected things with success. It sure is shit not going to guarantee it because there's a lot more things that have to, you know, kind of line up in your favor. But I think without it, everything gets a lot harder.
Michael:I think the especially, you know, we keep these evergreens, but people will probably guess based off my question, where we are in the market right now, because I think that burnout topic is probably a good one to to hammer in because the market is is insane right now. I've been talking to a whole lot of trader buddies, and they're feeling that that burnout as well. I think part of the problem becomes, and this is why I want to give you a chance to make that more of an argument of taking time off, is that when you're in the burnout markets, which we're in right now, COVID or February or 02/2008, the ones that really, really strain on you mentally, those are also the markets that end up giving the best opportunity sometimes because of the volatility is bound. So, you know, say you have a client and you're having that argument of saying, listen, you're burnt out, you will make more money in the long run if you step away, they're going to come back to you and say, but you know, the VIX is huge right now, right? Volatility is crazy.
Michael:There's opportunity abound. So what would you say to that person to really just kind of convince them to know, right? You know, take a couple of days, take a week, take a breath. You know, yes, you have the potential of missing out on a whole lot of money. But in the long run, this will be better for you.
Jared:Yeah, no, I'm not I'm not a fanatical with this, Right? I've got clients who play in the World Series of poker. Right? This is a torture test of two and a half months, you know, and they're playing 30 events and they're playing long days, day after day in Vegas. One Hundred And Fifteen degrees outside.
Jared:They're in air conditioning. You know? And then you get to the final then you get to the main event, which is a maybe a nine to ten day event, and you're having to grind through. It's like, no. No.
Jared:In market conditions like this, no. You suck it up and you dig deep and you find a way to continue to fire away. The problem is that you got to this market conditions already kind of limping. Yeah. Right?
Jared:And so you're not burned out because of the current conditions. You're burned out because you didn't take time off before you got to the prime money making opportunity window, right? So there are times and places to take time off, and it's not now. And it shouldn't be in any hot market for traders. But when things get quieter, you just keep revving that engine, redlining it, just their hours.
Jared:And there's just not a whole lot going on, and you take these kind of BS trades to just be involved because you're a trader. And if you're not taking trades and you're not doing your job and all these things that we kind of convince ourselves to be true, you know, are they actually true? Because, again, if you're gonna make 80% of your year in three months out of the year, you don't always know when those are. So figure out ways to find those indicators. And I've got clients who, and again, this is not one size fits all right.
Jared:Got clients who will have a pretty good idea at 08:30 in the morning, like, what the day is gonna look like. And and then they give themselves to, like, 10:30, eleven. There's not a whole lot going on. They're playing golf. They're going away.
Jared:Like, they're doing other stuff the rest of the day because they're preserving their mental and emotional capital. I say that purposefully because it has to be thought that way. Preserving it for those times like now. So look, if you're limping right now and you're burned out, like, you're SOL. Like, you got to find a way to sack up.
Jared:And to me, in these situations, I like to kind of think about it conceptually. If you look at athletes on the sidelines, I remember very specifically Rafa Nadal, Wimbledon semifinals. He was down like five-three in the fifth. I don't remember who he was playing against. But you could just see like, he was digging deep.
Jared:And that's a phrase that athletes use a lot. Right? And I I think in that moment and I don't know this because I never talked to him. But I think a lot of athletes in those moments, they connect to the why they care so much. Like the and I'm not saying that he was thinking about that in that moment.
Jared:I'm saying that there's a there's a a gut check, a a, like, a drive that you're connecting yourself. I'm not willing to fail here, and it's because of x, y, and z reasons. Right? And for Rafa, it could have been I mean, just he's he's a or was a bull. Like, there was not a scenario where he was gonna back down from a fight.
Jared:So in order for him to continue to be the kind of athlete that he is, he had to step up. And so, yeah, in these moments, you gotta step up. But then at the end of the day, you gotta do a better job cooling down. Right? Having a whiskey, having a beer every night is not gonna like, once in a while is fine.
Jared:But, like, to truly actually cool down and let your mind relax and decompress, you get off the screens, you get off your phone, you go for a walk, you work out, you eat healthy food, you do a bunch of writing to get all the data out of your head, Right? Our brains are like a sponge. Right? During the market, you were saturating your mind with content. If you do not squeeze it out, you will you will sleep worse.
Jared:You will not rest as well. And then you wake up the next day, you know, still a little stumbly. So, no, in these times, market's open. You gotta dig deep, connect to your why, find a way to keep pushing, but then let yourself relax so you have a chance of, kind of getting back tomorrow with some reasonable shape. And then once market conditions come down, probably in three and a half years, then you'll be able to rest again.
Michael:Yeah. Nice. I like that.
Dave:I I love that analogy with the sponge. That's great. And it reminds me as you were talking there. Could you talk a little bit about the role of optimism in high performance activities? I I know that I feel like being an optimist is a real advantage for me.
Dave:And in fact, my wife she sometimes calls me a toxic optimist because I'm so optimistic. Is it, like, is it possible to be too optimistic? And and how do you how would you approach that kind of psychology with top performers?
Jared:So the psychology and optimism is pretty clear. It's not right for everybody. You take somebody who's a natural pessimist, although I use air quotes because sometimes pessimists tend to be more realistic than optimists. And I don't mean that as a snide comment. I'll get to that in a second.
Jared:But the research is clear. If you take somebody who is naturally more pessimistic and you give them optimistic feedback and learning, and the research they did this with was with people playing darts. Never played darts before, right? I give you positive feedback. Oh, yeah, you're doing great, doing great, doing great.
Jared:They will be worse. Right? I give you that kind of feedback, you'll get better. The pessimists tend to want more realistic feedback. Oh, looks like your arm angle is little bit off here.
Jared:You got to do better here. They want that kind of harsher criticism feedback. Whereas optimists, again, I'm not saying everybody, but tend to want more of the aspirational, like, believe in you kind of language versus some of those details, and then you'll figure out the detail. You give somebody the wrong feedback, they're gonna be factually worse. If I give you those harsh critiques that pessimists like, you will be worse for it.
Jared:So I think first off, from a performance standpoint, you gotta understand kinda what is your like, who is your optimal coach? Right? Who is the person that you would love to help you to get the most out of you? And if you can kind of envision that person, then, yeah, it would be nice to have your internal monologue be more aligned that way. And if it's not, then, you know, you do some work.
Jared:But, yes, you can be too optimistic. I would call that, you know, overconfident. When you're ignoring real data that suggests that, you know, no, you actually can't predict what's gonna happen in the market. You might believe and be optimistic that, you know, you're gonna make a bunch of money today, but you can't guarantee it. So if that optimism helps you to perform, cool.
Jared:If it crosses the line where now you're taking on more risk, you know, your sizing position's too large, or frankly, you're just, like, getting into things that you shouldn't because discretionarily, think that, you know, the market's gonna move the way you think. Well, then that's that's a problem. So I tend to think about overconfidence much like greed. They are oftentimes things that have to be determined by your own strategy. So to use another analogy, take a baseball player, hits a ball into the gap, kind of round in first.
Jared:Is it greedy or overconfident to turn that into a double? I mean, it's kinda their discretion. If they're fast, probably more likely. If they're slow, it gets a little riskier. But that player, that team, that coach, they're the ones that define where that line is between optimistic and then overconfident, greedy, and then, you know, kind of costly or just too risky.
Michael:So you mentioned something that, you know, we did a little bit of a chat about before, but I think I kind of want your opinion on. We talked about, you know, building a trading group and how important that is and finding mentors and all this. You mentioned, right, you've got to find the mentor that makes the most sense to you, right? If they're critiquing you the wrong way, if they're pushing you in the wrong way, it's not going to work as well. So, say you're somebody out there and you're listening to this and you're like, okay, well, I want to find a mentor.
Michael:How would you know first yourself on what of those feedback mechanisms would work best? And then how would you find someone to fit that? Because I I couldn't agree more. I think Dave's way more of an optimist than me, and I want I want someone to tell me all the things I'm doing wrong to fix, and he just wants someone saying, good job, keep it up. But, you know, if I'm out there shopping for somebody to mentor me in trading or any other aspect of life, how would you go about?
Michael:Would you just ask their style? Or or how would you go about getting that?
Jared:I think the first thing you gotta do is look back in your own personal history. You know, people just too often think that they understand themselves, and most people don't. When I have new clients come to me, I have them fill out a very detailed questionnaire. And the questionnaire is not about assessing my ability to help them. It's about getting the data about themselves in terms of their mistakes, in terms of how what their goals are, what they're looking for from our coaching.
Jared:Do they experience FOMO or vengeance trading, overconfidence? Like, very kind of long laundry list of things. And they do that on their own in a relaxed environment. Because if I ask those questions, like I were to ask both of you right now, you're going to give me at best 80% of the right answers. Meaning that, like, off the top of your head, what are you going to be able to recall about how you experienced all these issues, what you're looking for, etcetera.
Jared:But you do it in a relaxed environment where you've got time to think, reflect, and then maybe a couple days later, you think of something else. People think there's actually a great book called The Invisible Gorilla. Okay? Invisible gorilla, fantastic about misperceptions in the world. And one of the biggest ones they talk about is the illusion of memory.
Jared:K? And people generally have bad memories, myself included. And this is not about remembering names. It's about remembering kind of factual narrative history of yourself. So go back and think about what it was like when you were growing up in, you know, in school.
Jared:Who was your favorite teacher? Right? And and why? Like, what was it like, what were they doing for you then? Right?
Jared:Maybe you went to university, you went to college, you had coaches, teacher coaches or mentors, you know, bosses. Like, think about the people that have been surrounded you, maybe even like grandparents, uncles. People that surrounded you and kind of helped you along the way. What were those traits? What were the things that they were doing for you?
Jared:What were they were they, you know, maybe good at asking questions? Were they good at giving direct critiques? Were they good at maybe being a bit aspirational, showing some belief, reflecting aspects of your character that you couldn't see yourself? You know? And so I think if you'd kind of do that progressively over a couple weeks of time, you're going to really start to formulate a more coherent picture.
Jared:It still will not be a hint a %. But if you get close, then you're more likely to then be able to go after and say, here is the kind of person I'm looking for. Do you fit this bill? And so then you're kind of weeding with, here's what I'm looking for, as if seemingly you're the job applicant, but yet you're the one kind of interviewing the potential job or the employer that you're hiring. So it just sort of changes the game a little bit.
Jared:But as far as, like, the resourcefulness for finding training coaches, I couldn't tell you that. I've never done it. But I think the bigger part is what I've just mentioned. If you don't do that, then you're basically gambling in my mind.
Michael:I think a great help. Think because now people, they have that roadmap to at least ask the right questions. Right? And that gets you a lot of the way there.
Jared:Yeah. And I'd say also just be demanding. People are sometimes, especially when you're kind of asking for help, can be a little bit too weak and, you know, like, oh, this person seems like they fit. Like, yeah. Because they're the expert.
Jared:They know better than me. Like, no. You're the expert on you. You're the expert on what you're looking for. You're not the expert on the strategy and the tactics and the things you need to learn.
Jared:But in terms of the kind of person you're looking for, well, then, yeah, you've got to lead with that expertise and have the confidence and conviction that you're right in terms of what want. And if you don't find it, then don't settle. It's not worth it. You have to get lucky, right, at that point to find the right person. And I believe in that.
Dave:So, Jared, I feel like a lot of people that we work with, maybe they have a discretionary system that they're trading that works pretty well, but they wanna systematize it. And part of there there's a a certain class of trader that is doing that kind of as a way to deal with their emotions or sort of get rid of their emotional trading. Right? And it and a lot of times that works really well. I was struck when your book, The Mineral Game of Trading, we'll put a link in the show notes to it, you had kind of a different approach on emotions.
Dave:And in fact, they aren't things to get rid of completely. It was almost like you were suggesting that you harness your emotion somehow. Can you talk about that? I thought that was a really interesting perspective.
Jared:Yeah. I mean, I'll try not to go too long here. A broad topic. But the basic premise is that actually factually can't get rid of emotion, right? And that's It's myth to think that you are capable of becoming this robotic stone cold kind of person.
Jared:And Denise Scholl has done a great job of making it clear within the research that people who have brain damage to part of their emotional systems are actually really awful at making risk management decisions. Right? So we need emotion. Not to mention, when I mentioned earlier, right, love, passion, motivation, emotion. So you're gonna suppress and control emotions.
Jared:Here's what's gonna happen. You're gonna start to burn out faster. You're going to hate trading more. So and I've seen it in in not just trading elsewhere. Right?
Jared:The more you suppress the negative emotions that you're trying to get rid of, like maybe anxiety and anger, you suppress the passion and the motivation as well. And so everything gets a little bit crustier and harder, and then that's only going to increase the experience of the frustration and the the bad ones too. So, yes, we we cannot, and it's not advantageous long term to quote, like, kinda get rid of emotion. Manage in the short term, sure. You break your ankle, yeah, we're gonna put a cast on it, give you crutches, and help you out in the short term.
Jared:K? So I'm I'm not saying that my strategy does not include short term tactics to try to manage and control emotion. But if that is your long term goal, you're basically now incapacitated. You can never run again. And that's generally what happens.
Jared:So for traders who are primarily trying to become discretionary to manage emotions, you are preventing yourself from growing beyond current construction. Right? Emotions are just another sensory organ to think about it that way. Right? You've got, you know, sight, sound, touch, emotion.
Jared:Emotion helps us to identify the underlying flaws, biases, wishes, illusions, etcetera, kinda running in the background of our mind. So some traders have these expectations of making money every day. K? And on the surface, if you ask them that question, like, no. No.
Jared:I I logically know that that's not possible. But in the background, like, it would be kinda nice. Right? If I could make money every day and never have these big drawdowns, then yeah. Like so it so this subtle expectation turns into frustration when they take three losses in a row.
Jared:Probabilistically, well within their framework, that third loss now triggers them. And now that fourth one is gonna be entered rapidly with more size and in a spot where it shouldn't happen. So the the expectation is the problem. The anger, the frustration is a symptom or a signal of that. K.
Jared:Now we know that because I'm giving the the example, but what a lot of traders are experiencing is the FOMO, the revenge trading, the the greed, the overconfidence, the loss of confidence, the fear of mistakes, the fear of failure. Like, all of these all this stuff just kinda spills out, and you can't make sense of it. Right? It looks chaotic and crazy. So, yeah, of course, we just wanna get rid of it as quickly as we can and trade normally.
Jared:So what you do in my system is begin to chart and map what is occurring. Right? It gives you the ability to take that pattern recognition ability that traders are incredibly skilled at, turn it on yourself so you can see the waves that you go through systematically. Right? When x or y and z happens, I feel FOMO.
Jared:If I'm if I'm down, if I'm not capitalizing on current market conditions, I will experience FOMO. It's like the a plus b equals c. And so then the question is why? Why when I'm losing? Oh, actually, it makes me feel worse as a trader.
Jared:It feels it makes me feel like I'm doing something wrong, like I'm falling behind the curve. It eats away at my confidence. K? Maybe because I have some illusions of control. I have some expectations of perfection because I have some desire to make up for losses of the past.
Jared:I think there's a variety of things that can do that, but it has nothing to do with the FOMO. The FOMO is just sort of helping us to figure out now. It's actually a little bit more about your confidence and more about the way you're perceiving your own skill set. This kind of dissection gives you the ability to correct your emotional reactions so that once you're once it's corrected, situation happens again. You're not experiencing that FOMO.
Jared:You're not, you know, revenge trading after that third loss. Now it takes work to get there, just like it takes work to rehab that broken ankle, rebuild the musculature, and get yourself back in a strong position. And it's harder here because lots of traders still have this very negative perception about emotions. So to do this kind of systematic, precise dissection is hard. The book makes it a lot easier, and that's what it was written for.
Jared:It was written to help you figure out the wide variety of things you're dealing with and what's behind the surface, and then gives you the ability to develop a strategy and a tactic to progressively make the corrections. Because another common illusion is the illusion that you can just change your mentality like that. Oh, because there are many times where you can, you know, just like wake up and you're like, oh, man, I feel great. I've been struggling for like weeks. So like all of a sudden, wake up and my my broken ankle is healed.
Jared:Okay, cool. Well, that can happen, right? We can all kind of find the factors that produce our A game. And some of it is just, you know, sucking for a little while. And then you just wake up with that conviction, that backbone, and you're like, all right, today's day might be better.
Jared:And you are factually. So you kind of find your A game again. But the mythology is thinking that that actually means that your C game, you at your absolute worst is gone. And it's not. You actually have you have to get in there and progressively make the shitty parts of your game better.
Jared:As I like to call it, sucking less. In those moments where you can suck, you have to suck less. And if you don't do that, then you reinforce those weaknesses. And even if you're able to jump into your a game that that day or later that week, right, it doesn't change the fact that that is still there and a potentiality. You know?
Jared:And it's like a gravitational force that's gonna suck you down at certain points, especially when you're burned out, which is why many traders struggle at these times too, because they're fighting up against those impulses. So here you are trying to capitalize on amazing market opportunities. You're tired and you have to battle this crap that you've been dealing with for years. Like, it's makes it so much harder. So, yeah, that's what we're trying to do is we're trying to kinda clean out the contamination of those flaws, biases, wishes, illusions.
Jared:And if you do that, right, obviously, you're gonna start to see things that you never saw before. That's the biggest advantage of this. Because if you keep yourself kind of buried protecting against these emotions, you don't actually get to progress. And, you know, the the the I'm sure you all have seen this, right? There's times where you are seeing the market very, very clearly, right?
Jared:And you're able to have those small adaptations even within a very systematic system, right, to find just a a a little bit more edge. But you can't do that if your your mind's contaminated with all a lot of the emotional crap.
Michael:No. I I love that. And I love that part when I was when I was listening to your book too about the whole kind of described it as like a bell curve, and it's this is your shitty trades, and these are good trades and or or you as kind of a trader as a person, and you're just trying to shift that shift that over. And I think that's kind of freeing for people sometimes to realize that you're not really ever getting rid of the worst part of you. It's just you're trying to identify it earlier and you're trying to shut it off earlier and
Jared:And make it less bad. You can make it less bad. You will always have a weak you always have weaknesses. The best traders in the world have weaknesses. Their weaknesses are probably better than your strengths.
Jared:But, you know, that that Yeah.
Michael:And I just it it gives you a little bit of forgiveness of, okay, I messed up, but I caught the mess up way quicker. I caught, you know, that I was in the bad space way quicker. It cost me less money, so now I can I can move on and focus as opposed to something that felt, you know, from a lot of other books that I've read and stuff, was more of just an elimination of it? Then every time you slip back, you feel like you failed as opposed to, I know I caught myself a little faster. It reminded me a little bit of, you know, kind of mindfulness meditation or mindfulness aspects or something like that.
Michael:And you mentioned it a little bit in your book, but you want to talk about how much that kind of thing helps people, whether you think it's kind of person specific, whether you think the, you know, because it's one of those, I see it as kind of like a prescribed as like a panacea of, right, you have to do mindfulness meditation, and that's the only way out. Then, but I think you had a little bit more of a nuanced take. Can you talk a little bit about that?
Jared:Yeah. I mean, mindfulness generally does not correct underlying flaws. Right? It's not gonna correct the illusion of control, the perfectionism, the hatred of losing, expectations of making money. Mindfulness can help to train your mind to be more of a tool, more of a weapon to correct those problems.
Jared:So you absolutely can use mindfulness to become sharper with regards to the corrections you're making intraday regularly to correct those emotional reactions. You can use mindfulness to help you become more aware, more tuned in, both intraday and also upon reflection. But you don't have to. I mean, I don't. I've gone through periods in my life where I have, and it's like, know, it can be helpful, and it can and and it doesn't have to be.
Jared:So for me, client comes to me, says I'm doing it. Cool. Keep doing it. Client comes to me, says they're interested. They might wanna try it.
Jared:Give it a try. Client says, not for me. Fine. Like, you there's not, like, one size fits all things. I I don't really believe that mindfulness is a cure.
Jared:I don't believe that meditation is a cure. I believe it's a tool that can help to lead to cures, but there are many other tools that get to do that too.
Dave:So Jared, I work with a lot of traders and a lot of times they're coming to me with some baggage or they're a losing trader, right? And part of our work together frankly makes them start making money, right? So a lot of them have some newfound success. And from that point, it's really about getting them to the next level. So my question for you is, for somebody that has, you know, sudden success, things are going smoothly, there's a bit of a sometimes there's some complacency.
Dave:How do you suggest people really who are at a new level really try to make it to the next level as a top performer?
Jared:Just conceptually, I would think about it like a stock or, you know, like just consolidating. You know, there's a nice leg up. Right? It's just not gonna go parabolic here. Yeah.
Jared:You need that kind of support. Right? In other words, like, you need your confidence to kind of catch up with your success. And if you keep kind of just climbing higher and higher, your confidence is that go on for the ride, it's almost like you're kind of free soloing up a mountain. And it will feel like you might just kind of crash at any point because it doesn't feel real.
Jared:It's tough for us to make kind of rapid transitions of success like that. So it's okay to take a step back and take, you know, a month, two months where you're actually not sizing up. You're not kind of pushing the envelope. You're letting yourself kind of acclimate to this new level. Again, kind of like a stock, you know, consolidating.
Michael:Yeah, so, you know, we mentioned a lot in the green room about, you know, and then you kind of tease us with maybe an argument against systematic trading. So I think that might be a good place to to bring this discussion. But first, let's just start with, you know, have you dealt with a lot of just pure quantitative kind of traders before? And what do you notice that are the psychological difference? Because you mentioned before and, you know, obviously the research is there, and I remember reading about that as well, that you're never getting rid of emotions, right?
Michael:And a lot of people, I think, and me and Dave try to correct them, come to systematic trading because they were a discretionary trader and they found that, you know, their emotions just made them do dumb things and lose a lot of money. They said, Okay, well, I'm going become systematic. And me and Dave always laugh kind of when we hear that because you're you're not getting rid of emotions, you're you're changing them, right? There's different in the moment you're not hitting the button, but you're still building the strategy, you're still testing it. There's a lot of that same kind of baggage that still arrives.
Michael:So, you know, I think it's kind of a two part question, I guess, is one is what is the main difference if someone you had two people come to you and they're pretty equal as traders, one's a systematic kind of quant, one's more of, you know, discretionary, like tape reader type person. Where would you focus those two people? And then, again, you tease us a little bit about an argument not to be fully systematic. So I'd love I'd love to hear that as well.
Jared:Yeah. I guess I'll kind of preface this as I like So I mentioned emotions being kind of the basis of these, like, flaws, bias, etcetera. Sometimes they're also just a byproduct of your feel or sense of the market, right? And so And how your strategy interacts with it. And I have clients who have found that FOMO or greed was actually an indication that there was more opportunity in some trades.
Jared:They just couldn't kinda put their finger on exactly what they needed to adapt in their strategy to capitalize on it, but it was factually there. So one trader would, you know, go down to a one minute chart so he could have his entries be just even more precise, you know, where he's trading on a five minute chart. So that was one example. And then that removed the FOMO. Right?
Jared:Because it was not based off of a flaw. It was based off of almost like an intuition, right? There was some kind of sense and feel, as you said, kind of the tapered or style, more creative, etcetera. But like every person has that pattern recognition ability. And so if you're coming from some discretionary style, you become more systematic, and it removes a lot of the emotional stress that was maybe a byproduct of you not trading the right way for your personality, for your style.
Jared:You know, mean, trader, it's a beauty beauty. It's like you gotta have to create your own fingerprint. You have your own unique perception in the world. That gets reflected in your trading. And so sometimes, stylistically, systematic trading is just better for you because it fits your personality board better.
Jared:Right? You you don't wanna have too much of you are somebody who is more rule based. And if you're quant and you're mathematically like, there's things that just fit your personality better. And so stylistically, that removes some of the stress, some of the emotion, some of the frustration just because you're now trading the way you should be. But I think that's separate to this idea that your intuition goes away.
Jared:And I think that's what systematic traders end up missing out on. Now, discretionary traders have more of a responsibility to be clean, have their mind be clear. Because if you don't, then you're at risk of kind of misinterpreting the signals. Is this fear, this stress, this anxiety a byproduct of me recognizing, like, holy crap, like, I need to get out or I need to go short here because there's like, something is is seismically changing. Or is it just me, and I don't wanna I I fear losing money, you know, here.
Jared:I feel fail I feel like I'm failing. I'm at my high watermark of my career. And all of a sudden this fear comes in, like, well, which one is it? So discretionarily, like, you have to be able to have that precision and understanding yourself well enough to know what biases you're imprinting in the market and being able to distinguish those from the genuine real intuition so that there's a greater responsibility as discretionary discretionary traders for that. But I do think that systematic traders miss out on the opportunity to continue to evolve and adapt because if they're not forced to create that kind of awareness, then, yeah, I think you're leaving money on the table.
Jared:And if you're leaving money on the table today, then what does that mean three, five, ten years from now? Right? It's not just the exponential decrease in profitability that could be capitalized. Maybe it means in five to seven years, like, you're out of the game because you're not continuing to adapt and evolve. And so that's the, to me, the worry.
Jared:So I do think that, you know, even people who are highly systematic need to continue to have like kind of an R and D budget of their time and their energy so that they're continuing to look at the market with that sensitivity, with that goal of creating intuition and maybe turning on a different system or adapting existing ones. You got to think long term here. And that to me is the worry, right? If somebody comes too emotional, become too systematic, you know, are they kind of pigeonholing themselves, maybe have a few years of success, and then they're just dead? You know, it's I'm a longevity guy.
Jared:So, there's, I think, short term, long term arguments, Can we do both? And I think there you can kind of find that balance.
Michael:Yeah. I see I see you. I was going to say I see Dave Clameron is is warming up. He's getting ready, but I I already know what Dave's going say. So so have at it.
Michael:Well,
Dave:so I can I love what you're saying about perfectionism, and I can see what you're saying about you you constantly have to adapt as a trader? And, like, if you're not adapting all the time and really probably dedicating a large portion of your time to coming up with new ideas, yeah, it's just a matter of time before you are gonna be on the sidelines. As you were talking there, it reminded me of a situation that I see some systematic traders get into. It's sort of like perfectionism, what you what you were describing. So I I call it they they get stuck in backtest world where they're trying to come up with the perfect strategy.
Dave:The one they're working on is not good enough. There's just a couple more rules they can tweak to then it'll be perfect. Then only then will they be able to go to the market with it. What do you say to somebody like that's stuck in R and D land and not really They're drawing up plays on the sideline, but they're not in the game, and they should be in the game? So can you talk a little bit about that and perfectionism in general?
Jared:I mean, there's a certain element where you just can't get enough data from the sidelines. And some of that data is your own self. And I have I have discretion sorry, systematic clients who've come to me saying, I cannot follow my own rules. So you could develop and this example you're giving, like, you could develop the perfect system, but does that mean that you're gonna be able to trade it? I mean, unless you truly create the algo and you just turn it on and walk away, which think very, very few people do on a retail basis, then, you know, you gotta be the one to trade it.
Jared:So, like, at least at a minimum, just get some practice getting in the market, executing whatever you got, even if you do a very, very small size. Even if you do it I don't know if you can do it perhaps on, you know, some of these, like, kind of prop firm combine accounts. Find a way to just get some experience in the game because the more you kind of build up these expectations from the sidelines when it inevitably is a struggle, when inevitably you have some emotion, when inevitably, you know, even the system starts to, you know, put out some losers, still within the the confines of within the the the parameters of how it was designed, you are going to struggle with it. So there's only so much you can do from a sim. There's only so much you can do from a back testing standpoint.
Jared:There's only so much you can do from the sidelines. At a certain point, you have to get in the game and start to acclimate yourself to that environment. They are two functionally different things. It's like the driving range is not golf. It was one of the things I loved about poker.
Jared:There really was not a great now, is now, you know, with these some of these GTO trainers where you can, like, kinda play poker against bots and kinda learn. And that's actually quite good for a lot of poker players to really learn the game. But, you know, back in the day, you just you you had to play. You had to put money on the line. And when you put money on the line, I think experientially, things are just different.
Jared:Like when you're in a trade, I have clients who it's okay to take some paper cuts. They're like kind of a hybrid discretionary with systematic. And they just kind of have to have their hand in the water to be able to feel some of the nuances. And to be in a trade versus not, it kind of turn like when you're in a trade, everything gets kind of turned up and amped up in a good way, right? It helps to create the precision in that sense and that feel.
Jared:So same idea applies even for systematic traders. You got to be able to learn how you are going to react and experience when you're actually trading within that system.
Dave:Yeah, I like the analogy there with the taking bets with really small size because that's really what you learned. It doesn't have to be a lot of size to really experience what it's gonna be like. It it reminds me of you know, you've seen poker apps where you can play for free money. Well, we all know it's a very different it's a completely different experience creating with or, you know, playing poker with live money. So to bring it back to poker, I I wanna I wanna tell you a little bit about the my poker journey and where I sorta hit a roadblock, and I wanna get your take on it.
Dave:So remember, I'm coming from a trading perspective, do a lot of back testing. Most of my trading is completely automated. Now in a poker game, what I felt like I would get to is situations where I I couldn't like, I wanted to go back and do a back test to see exactly what I should be doing here. And there's just so many different situations that can occur in a poker game. I just felt like I couldn't be really prepared for all of them.
Dave:Where with a trading strategy, I can be sort of like the world's best expert at this one tiny niche that's my strategy, and I can know that really well, and I know it happens a lot. Or if I try that with the poker with a poker game, there might be, you know, there may be months that go by before a situation occurs. The I just think the the analogy is really interesting. And, yeah, can you talk a little bit about the differences between poker and trading? And am I am I just crazy in the little the roadblock that I ended up there?
Jared:No. You're basically getting to to select the hand that you're starting with. Yeah. The you're You don't exactly know that the run out, know, the remaining cards to be seen in, like, in a, you know, no little hole in scenario where you're dealt two cards and five cards are gonna be shared with the community. You're not gonna know what the run out's gonna be, and maybe in this hand, you lose.
Jared:But if you get to only play poker when with those two starting hands, then you can define the situation well enough that you're, you know, gonna be an expert at it and be incredibly profitable long term. So, no, I I that that's that's the the one of the many differences between poker and trading. The the variety of options and how you can make money in trading is, you know, x full larger than poker. Yeah. Yeah.
Jared:No. It doesn't it makes sense to me. I mean but I think it does express some of your personality, right, in terms of that precision, that perfection being what you're looking for. So, you know, I'm not saying blowing things up more often would be fun, but, like, changing and and disrupting not necessarily the bread and butter. Because you can be a company, you know, let's say, like Apple, who builds, you know, the iPod, and it's an incredible moneymaker for x number of years.
Jared:But you continue to kind of play around with other ideas both around that and ancillary to it. So as traders, I think it's important to think about it as a business. And then so you have a product that is making good money. Don't mess with it. I mean, but mess with it around it, you know, through kind of an R and D budget, whether it be capital or mental, emotional capital or just time to continue to see what other avenues there are out there.
Jared:And I think you were saying that also, but the perfectionism might slow you down and being able to kind of turn on and experiment in ways that could be more advantageous to you.
Michael:Yeah, I think that's huge because we talk about it all the time in the trading aspect and same with kind of poker here is that the best trading strategy that you have is one that you haven't discovered yet, right? So when you have something and you systematize that, and so now that doesn't take a lot of, I'd even say mental capital over anything for systematic traders. Because once it's systematized, you've got a robot doing most of the work and that's gone, spending that mental capital and going back into the game to figure out something else, I think makes absolutely perfect sense and something people should should really focus on because, you know, myself and, you know, I you mentioned the the prop firm space, which I'm gonna ask a quick question on too, but, you know, take $10 and put it in a completely separate account and say, this is my discretionary account where I'm just going to play, which is kind of what I've I've ended up doing. And sometimes when you hit a big win, that could be the best path to that new strategy that you never thought about. Because you know, oh, I bought natural gas because of this thing for this one reason.
Michael:Well, did I get lucky or did I discover something and then and then kind of go back and test it. But I like that, and I just want to hit quickly, we won't take up too much more of your time, but on these, this kind of prop firm evaluation space, because I know it's growing bigger, I'm doing some work with them, I've been tapping Dave ever so, so carefully on it. I like it for the reason that, and for those who don't know, there's just a growing industry now of these companies where they're real prop firms that have real trading desks, but how they figured out to make a lot of money is by doing something simple and saying, Okay, if you give me a hundred bucks, I'm gonna give you a $50,000 SIM account. If you're able to pass make enough money in these rules, then I'll give you a real account. So they've kind of made you pay for the interview process at a prop firm, which I think is hilarious and good for them.
Michael:I really, really like it as a way to put some money down like you talked about. So you have some risk on the line, but not a lot. So it's not a real $50,000 account. If I lose 5 k, I'm not actually losing. I'm losing the $100 I put in.
Michael:Do you have a lot of clients that have found a lot of success in that world? Or do you just recommend it as a way to get started to maybe help fund a personal account or to experiment with something they don't want to do in the personal account? Like what role have you found this? Because it's a massively, hugely growing industry out there.
Jared:Yeah, again, I think it's a tool. If you're somebody that is new, it's a great way to learn. Be a toddler, bumble around. Some of the rules can be quite restrictive and sometimes antithetical to a trading strategy that would be viable long term. So they kind of force you in a way to make money under some arbitrary rule.
Jared:So I would be very selective at the prop firms that you go to, that they are not trying to kind of force you to make money every day for five days in a row or seven days in a row or something that's not really what you're going to experience as a trader. And so then it kind of forces you to trade in ways that are kind of antithetical to that. But again, if it's you're new, you're dealing with a bunch of emotions, right, it's just too early to put your own capital on the line. If you've got a strategy that you think can work and you're working another job and trading is sort of this like kind of longer term play that maybe can eventually replace your existing income, you can do so without tapping your own capital. Like, I think there's, it's a great opportunity for that.
Jared:But I think you have to be really, really selective about the prop firm that you go to because, yeah, some of them are shady, frankly. So there's that. You know, we want make sure you get paid if you're actually making money and get paid out. And I mean, so but the the kind of the the mechanics of it, I think, provide opportunity. Yeah.
Jared:Just with that kind of caution, I'll just say. And and I I will say also, yes, I have had clients who have been able to kind of work their way through it and be successful, get payouts, become full time. But the numbers are small. I think a lot of traders in general, we know the attrition rate is incredibly high. And I think in large measure, it's because of the lottery winners mentality.
Jared:I mean, this is an industry that promotes and provides avenues for people to basically win their own lottery. And those that do sometimes promote it very heavily. And I know that two of you are not that way. You're very kind of sober minded in terms of like what this enterprise takes to be successful and to do it right. But a lot of people come to trading, trying to make a lot of money really, really quickly.
Jared:Wall Street's bets on Reddit. We saw it in the COVID era. Like, it just became a thing. So the reality is that I think a lot of traders fail in the combines because they're just like looking to make money very quickly. And, you know, you get funded and all of sudden you're just going to kind of run this thing up.
Jared:And we know from research, eighty percent of people who win the lottery go broke in three to five years. And it's the same with, you know, ex athletes. You know, the number of hundreds of millions of dollars that people have lost after retiring from, you know, X, you know, sport is incredibly, incredibly high. And it's because you don't know how to handle that success, right? And so, yeah, just be a bit more sober about kind of what you're looking for from trading and from these prop firms.
Jared:And if you're looking to actually become a skilled trader, then it's at least a minimum of three to five years, in my opinion, because none of you would go to a lawyer who spent three years in law school and then has been practicing for two years. But you got into a car accident and you got to sue this person for injuries. It's like, you want somebody with two years experience or you want somebody with ten to fifteen to twenty years of experience? I mean, it's night and day. So like, as a trader, I mean, okay, three years to get your education.
Jared:Some of you are going have some success there. It gets a paid internship, cool, right? Maybe you'll have wildest success. Great. But, like, what's gonna happen over the next period of time?
Jared:Like, this is a true, you know, skill based endeavor. It's not about making money quickly. And the prop firm industry, I think, helps to kind of promote that opportunity to make money quickly. You have to be smarter and treat it like it's something that's a real skill that requires a lot more training than many people get credence to.
Dave:Okay. I think that's a great way to say it. I think that's a great way to finish up here. One last question for you, Jared. In case any listeners wanna get in touch with you, how do they do that?
Dave:And then the next thing, do you have any projects that you're working on, and what's coming up next for you?
Jared:Yeah. So I've got yeah. So jaredtendler.com is my website. There's free worksheets there to help, you know, use the book and to use my system. There's also a free ebook on intuition.
Jared:So if anybody wants to kind of follow-up on my points on intuition, that ebook is there as well. I have a program called the mental game of trading live. So if you like the book and want more assistance and a community with some accountability and regular feedback and coaching for me, there's that. I also do one on one coaching, although space is fairly limited there. I do have another project in in the works, but I can't quite say it yet.
Jared:No
Michael:no teasers at all? Nothing? Yeah. Yeah. All
Dave:right. We'll have you back when when it's time to announce that.
Michael:Sounds good. Yeah, thank thank you everyone for tuning in. I think this is a great area that you have to explore again, systematic, discretionary, doesn't matter. So again, thank you Jared for helping out our viewers, and definitely everything he mentioned will be linked in the show notes and the description of the video and all that, so make sure you go down there and check that out. Thank you guys very much, have a good one.
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