Is Limited Time For Trading - A Good Thing?
Okay, everyone. Welcome back to another episode of Line Your Own Pockets. I'm super excited with this one today because when Dave sent me the kind of article you wrote about this way back in the day, it was, like, one of the first that I remember reading from him and and getting super interested, from his his blog there. So we're gonna talk about what do you do if you don't have the amount of time that you think you need for trading. And and I say think you need because I think we're both going to agree, and we're gonna talk about how the amount of time that people think they need to trade isn't the amount of time that people actually need to trade.
Michael:But, Dave, you were talking about you know, this is a question that you got all the time, so why don't you hop into it? Tell me what tell me what people are asking and what you're answering with.
Dave:Yeah. So when people sign up to Monday's letter, in the welcome message they get, there's a question there. Like, what's the biggest obstacle to your trading right now? And I I ask them to reply, and I always look at these and reply to them and see if I can help. But probably the most one of the most common obstacles people think they have is they have limited time for trading.
Dave:They have a full time job. They wanna do this on the side, and that, man, if they just had more time, they could make it work. And it reminds me so much of when I felt the exact same way. Back when I was getting started, I was working full time for AT and T, and my daughter had just been born. I was just started working from home.
Dave:And, you know, a full time job is a full time job. There's a lot of commitments. You don't have the luxury of watching the markets all day. So I had the exact same feeling that a lot of traders that come to me now have. I wish I had more time.
Dave:But with hindsight, thinking back on that period, I know that that was actually an advantage for me. I know it sounds crazy. It sounds counterintuitive, but it was no question it was an advantage to me to have limited time. So we can, we can go into that further, and we will the rest of this episode. But Yeah.
Dave:Yeah. What do you think, Michael?
Michael:I think it's it's a lot of the same way, and we've already talked about in some of the podcasts some of the things you could already do. Right? The advanced order types, the that kind of thing. But, I've heard a lot of the same thing. And I don't know I don't wanna say excuse, but I don't know if it's an excuse that people are are kinda putting up in their in their heads for for why they can't do something, because I just thought about the question that you ask people.
Michael:It's like, hey. What's your limiting thing? And immediately, I thought if it was if you were a personal training website or, like, a weight loss website or learning a second language or or whatever it is, I think there would be the same answer. Right? I think it's something that just a lot of people say is that, and I don't know if it's kind of a barrier they have in their head where they think they're they're not they don't know how much time they have to allocate to certain things, or if it's just that fear of getting started, which I think is a big thing for a lot of people.
Michael:Once you dive into a project, I think it becomes a lot easier to kind of to to get started, like, even, you know, go back. I was gonna say go back to high school, but we can go back to college. There's so many so much gray in my beard that that's so long time ago. And you have to write an essay or do a project. It's always the first part of it that gets started.
Michael:As soon as you're in there, I think you realize someone says, oh, you gotta write 10,000 words or whatever. And you you look at that number and you say, oh, that's a massive, massive deal. But once you part it out and you start going through processes step by step, I think it becomes a little bit easier. You realize that you don't need as much as you initially thought. And I think it's probably the same with trading.
Michael:They they look at the end goal, and maybe they look at some of the things that they see on social media with, you know, this guy's got 34 screens open, and he's watching all these things, and he's got a news squawk and all of this. So I don't know if it's a bit of just not understanding exactly what's going to be involved when you get started. And then a little bit, I think, of that fear of just, you know, just going with it. Do you agree? Do you think that most people are I to summarize, I think most people are dramatically overestimating what it is they have to do.
Michael:And because they don't know how to get from a to z, they don't realize that they can break all of those parts up into individual individual processes and individual parts. You don't you don't have to learn to become a full time trader right off the bat. There's, like, a 1,000 steps you can take between where you are now and kind of that final goal.
Dave:Yeah. I think it's true. It's a little bit of a crutch, I could tell, for some people. But it's, you know, it it reminds me of you know how when you meet people, sometimes you have, there's some small talk and you say, you know, how are you doing? And sometimes the answer is, oh, man.
Dave:I'm so busy. Like, that's sort of the the default answer sometimes. It's kind of annoying, and, I can tell you could tell it's just they haven't really thought that much about it. So I think that there's a little bit of that here in this in this answer. But let me let me go into why I firmly believe that this was an advantage for me to have limited time, and and let me tell you how I, how I addressed it.
Dave:So, you know, I had worked for AT and T. I was I had conference calls all day, meetings, you know, to answer to my boss whenever he rang. So I needed to I I was basically forced to create a system for trading. I couldn't I didn't have the luxury of just watching the market and having some discretion thinking about things, deciding whether to take trades or not. My my trading day had to be very, very systematic.
Dave:I had to have a plan. I I didn't have the luxury. I didn't have time to not have a plan. I know that sounds kinda weird. So I had to have a system.
Dave:There's just no other way about it. So that it kinda forced you to do that. The other thing was, you know, how how many times do you hear traders say that they overtrade? Sometimes they overtrade. And and A lot.
Michael:Yeah. Not not only will I say traders say that, that to me was probably the main reason. We probably talk with this another podcast. That's probably my main if I had to pick one reason to become systematic, that was it. It's because I was I was one of those that saw, you know, c shapes and clouds.
Michael:Right? Depending I look at something enough, and I'll I'll talk myself into into trading it. Yeah. So I'd I'd say everybody. I'd say if you're not, if there wasn't a point in your life where you were over trading, I think that, you know, you you should you're probably lying to yourself.
Michael:Right?
Dave:Yeah. So this you know, to your point about clouds, having limited time, I couldn't even look at the clouds to see if there were any shapes. Right?
Michael:Mhmm.
Dave:So I didn't have the chance to overtrade. I I was only looking at so so what I did is I carved out 30 minutes for myself to trade a strategy that would start trading right at the open, finish trading at 10 o'clock. So I had 30 minutes where I could look at the market and take signals.
Michael:So sorry. Do you do you when you say finish trading, do you mean closed positions, or do you mean, you know, you've entered the orders, it stops out, and you would just leave it till the end of the day and and move on with your with your
Dave:I would only enter orders between that period. And then I had all my exit orders in. I didn't have to look at the market the rest of the day. There was no temptation to exit early or take a partial, and I didn't think I should. Mhmm.
Dave:All my orders were in, and they would just if I got sidetracked in a in a project at work, I couldn't look at the market at all, then my trades just executed automatically without my intervention at all. So it's a it was just an absolutely a huge advantage to have these constraints because it it it I I didn't like I said, I didn't have the luxury of making the a lot of the mistakes that I see traders make now.
Michael:Yeah. I, I had the same experience. I did a lot of trading while I was working at the hedge fund game and and did a lot of that as well. And for me, it was a little bit different because what I was doing was financial related, so I could always justify to anyone, working in an office, having charts up, having a Bloomberg terminal going. But it was the same thing.
Michael:You had a lot of things to do. So what for me, it ended up being more of a swing trader and less of a day trader, it was alert setting. Right? That was the the main thing. I'd actually go into the the company Bloomberg terminal.
Michael:I hope no one's listening, and they actually set those alerts. And this was, you know, 10 years plus ago. So having alerts that would actually text your phone and everything was a big deal. Like, we're talking almost pre iPhone, at this time. So that's that was my process.
Michael:I'd actually show up to work early every day, having done all my research at night and set all these alerts and then and then go about my day, but that was part of it as well. And the just the comment I made about over trading, I think I talked about this earlier as well where what was happening a lot for me, just journaling, not even the trades, just journaling the p and l at the end of the day and then journaling my life, I found that when I did absolutely nothing except trade it when those alerts took place and then left, that was way better than, you know, days that I would try to work from home to, you know, maybe slack a little bit of work and take more trades. So I think that was kind of the first step to me to to becoming systematic. So it's a lot of the same same thing. And, you know, we're we're talking about this, me and you, and, again, with the the whole gray in the beard joke is we're going way, way back.
Michael:The amount of technology that didn't exist back then that does now, to help people out, plus the more more and more people working from home, I I'm I'm gonna say, and I think you're gonna agree, it is way easier nowadays to do a lot of this stuff than it was before. You know, just simple apps like TradingView that will just like, I'm wearing an Apple Watch. It will send an alert to my Apple Watch and say, hey. The price of the stock that you're interested in is hit. You know, when you have time, you could open up your Robinhood account on your phone.
Michael:Like, we didn't have any of these. You had to be, you know, sitting there with a a full desktop application or it was no good.
Dave:Yeah. Back when I went and started working from home, that was back when that was highly unusual. I mean, this was 2,001. So that was it was weird. And I knew that it was weird for at a big company to to be able to work from home.
Dave:So, I mean, think about it. If that's a weird situation, you really wanna make sure that you're doing a great job at work and that you're not pending, you know, all day trading. So this was a way for me to, carve out time to do what I wanted to do, but also be very visible at work and know, you know, deep down that I was doing a great job, at both places. And there was no question that I was, you know, working from home, slacking off or anything, and I knew that. And this was the system that I had, you know, created for myself to be able to do that in in this situation and live with it.
Michael:Well, it's funny. The the stat you gave of you took that 30 minutes. I'm sure you've read some of the stats online on how many people in an office somewhere right now are on Facebook or Twitter or something like that. It ends up I I've read stats of, like, you know, up to 40% of people's day is just doing whatever. So you being, mindful of this is the time to trade, and then this is the time to do the other thing, and I'm just gonna hard separate those 2.
Michael:Again, yeah, probably made you a way better both employee and a way better trader because, you know, the people who are even trading and then at the same time scrolling Facebook or scrolling Twitter or or something. Yeah. I think there's just a kind of lesson in mindfulness there that if you block off, this is the time for this, and this is the time for that, and I'm not gonna let those two worlds collide at all. That's gonna be a better thing. Now for your 30 minutes, that can have been all of your time.
Michael:Right? Because our review and, you know, research and all of that. So would that be at a different time, later in the day, end of the day, that kind of weekends? Or
Dave:Sure. That's a that's a great point because, you know, most people when they think of trading, they think you're doing all this stuff during the day, but that's not the case. Like, you you don't have to set up your day like that. In fact, you shouldn't. You should be doing all your work outside of hours where you have a lot more flexibility in your schedule, if you have a job, certainly.
Michael:Mhmm.
Dave:And the the you know, you can really plan out your trading day and devote exactly the time you need to it. So, of course, you know, after hours, I was doing a lot of research. I I knew the system that I was trading, would work well over a large number of trades. So I I did all the work required to get to that point to have confidence to to be able to devote a small amount of time during the day because I know or I knew at the time that this would these trades would play out, and it didn't in a way that didn't require my constant attention and constant babysitting. And, yeah, of course, then at the end of the day, I could do a trading review.
Dave:And I over time, you'll get to where you can do that very quickly. You can do all the important steps, get all the unimportant steps, and get that to be a very efficient process. I mean, what we're really talking about here is, becoming ruthlessly efficient with what you do. And that's the way good traders operate. They think about what they're doing and then become ruthlessly efficient at finding trades, finding trades that they're missing that they can incorporate into their system, binding trades that they're not taking, that they can incorporate into a new system.
Michael:Yep.
Dave:They're ruthlessly efficient about doing that. And, yeah, that that's how I set up my trading day then, and I have it's it's like I said, it was very much an advantage.
Michael:And, you know, the same for me, and and I have, like like you do now, the flexibility to, if if I wanted to sit and stare at things tick up and ever down, but just learned a long time ago, that's that's not the move. So it's the same thing, and I have 2 very young kids. So it's put them to bed around 7 or so my time, and then that's when I get to work going through all of the charts again as a swing trader, setting in all of my alerts and everything that day. So I imagine someone, you know, like me, say you worked a full time job and then you come home and hang out with your kids and your family and do all that, and they go to bed. And for me, it's probably the whole process going through as someone who still goes through and looks at all these charts and does macro, analysis and all of that.
Michael:I'm still probably only an hour, hour and a half to go through the entire market to record what my system said that day, to place alerts and and orders and everything for the next day. And then I dedicate time to on the weekend for content absorption. Right? So I actually have time booked to say, you know, go read this new interesting sub sack that you've taken a note of or, you know, go watch this webinar that's that's interesting about that. And and, yeah, I think it's very much a a lot of this stuff, and it's funny.
Michael:They they always say, if you wanna learn about yourself, start trading because it's gonna show a mare. A lot of this stuff you could apply to any other aspect of life. You know? The amount of times I go to the gym and I see somebody at the gym who's also on their phone, you know, texting someone the whole time or, you know, even things like you you know, they're playing with their kids and and they're doing something else as well. You know, what we're talking about for training, I think, could apply to a lot of things as you you you schedule a time and you book at a time.
Michael:You say this is the time when you do x, y, and z, and then forget it. And I I'm gonna say this. I I imagine doing this podcast. We're hopefully gonna be doing it for a very long time and 1000000 times. If I could have all the hours back I spent staring at charts live tick up and down, you know, I would I'd be able to live like a second life if I had all that.
Michael:Yeah. I spent so much time just mesmerized by, right, 1 minute candles and up and down, up and down, up and down. And yeah. So definitely, if you find yourself doing that, then you know that whatever time you're spending, it's just not spent in the the right location. It's kind of like Yeah.
Michael:Those screen time apps you can have that tell you what you're doing. Right? Make a make a journal is kind of my suggestion. How much time did you spend actually staring at a one minute chart of whatever trade that you were already in? You had a stop loss, you had a profit target, you had a time stop.
Michael:You're in. Just how much time do you spend staring at that for no reason. Right?
Dave:Yeah. So, yeah, what's the what's the value you add there by watching that chart? You might you may think you do or convince yourself that you have some value to add there, but you probably don't. So as you're talking, it reminded me of, here's a good thought exercise for somebody who maybe doesn't have a lot of time for trading, and and maybe people that do have a lot of time to trade and, you know, live and breathe the markets and, spend a lot of time during their day. So think about how much time you spend during the day on your trading.
Dave:And now imagine you had to cut that by 75%. What would you cut? Think about what would think think if you had to do that, if you were forced to for whatever reason, what would you cut out? What would be the most valuable things you could do in your routine that would remain? And that I think that's a really good exercise because you could probably cut out there's probably some things that come to mind that, are kind of fluff in your routine that this thought exercise can help you identify.
Dave:But it's really good because it really forces you to figure out, okay, What is the value that I add to my trading each day? Like, what is the most valuable thing? What's the least valuable thing? And once you start thinking about it that way, you can streamline your routine, arrange your routine where you're doing more of the most valuable things and less of the fluff. It's a it's a really good way to to think about how you structure your day and the the time you dedicate to trading.
Michael:Well, I also say, you know, I I it's kinda controversial, but I also say embrace laziness. Right? There's that old, was it Bill Gates quote that he liked to hire lazy people because you gave them something to do. They're gonna find the most efficient path with the least amount of BS to get it done. And if he hired a hard worker, it would take him the same amount of time, but he would just grind at that thing until it was done.
Michael:So I think there's a bit of that. And I I've in trading, it's kind of different for the rest of our rest of life in general, based off the sole fact that most other things, the harder you push, the better the thing is. Right? You go to the gym, The the more hours you put in the gym, the harder you push to a degree is better. At the corporate life, it's generally better to be there before the boss shows up and leave after and and make sure you're, you know, showing everyone how hard you're working.
Michael:But trading, it's not really that. You could you can't push the button harder and make more money. It's it is the the work is involved in the testing and coming up with new ideas and all of that. And then the actual art of trading should be very effortless. It should be very low emotion.
Michael:It should be, very low time. But I think it's the old world and the new world where people have problems. I've talked to and and kind of mentored people sometimes who are, like, lawyers or, you know, business people, and they have this kind of type a personality, especially salespeople where right? With sales, it's how many people can I contact? That's how much money I'm gonna make.
Michael:Where in yeah. In trading, it's just more of this zen. I built the system. I now just have to follow it faithfully, and I have to let that work out. And that should be a very, very zen like thing.
Michael:You know, you shouldn't be showing up ready to fight or anything. It's just I'm gonna hit the buttons when the system tells me to hit the buttons, and then I'm gonna go do something else and try to think of a new system or refinements to my current one.
Dave:Yeah. I agree. And, you know, as you were talking, it reminds me of, a concept from running, from competitive running. So my wife was a she was in the Olympics for the US a long time ago.
Michael:I didn't know that.
Dave:Yeah. So she and she coached herself. So and and we've coached high school teams. So so we're we're into running. We're into the the the philosophy of, of running and, you know, competitive running.
Dave:And there's a there's a term there. It's called hard easy. And most people think of running, you're out there running hard as you can every day. Right? Well, that's that is a quick road to nowhere.
Michael:Yeah. You'll break something real quick.
Dave:So you really have to plan the hard days. And you you can't do that every day. You can do it maybe 3 times a week at most if you're in, you know, the prom of your life. So the the the times in between those are just easy days. You're just out running sort of mindlessly with friends.
Dave:The purpose of it is to run easy, to be quote, unquote lazy, you know, to not go all out. And that that's an important part of running is is making time for those easy days, making time for those days off so that every, you know, every day, every step, you're not, you know, fighting a fire and, you know, going all out. And then I think the same through with trading. You have to allocate time, put yourself in a position where you're just watching, noticing the market, but there's no you know, there there needs to be times where you're not going as hard as you can trying to come up with a new system or testing something. You you need to put put yourself in a position where you're just noticing and mulling.
Dave:It's important.
Michael:Yeah. Time for deep thinking, I think, is is probably one of the least, you know, emphasized thing of a lot of what most people do. Right? It's the whole thing that, you know, we talked about this before. You get your best ideas when you're when you're away from the office.
Michael:But, I think scheduling time for that is very important. I actually have a a thinking spot in the in the woods. Right? I live in the woods. I've got a little camp chair that I've carried all the way out there.
Michael:It's by a river, and it's it's far enough away from anything that there's no Wi Fi or whatever, and that's that's my thinking spot. And I I book time to, sometimes I'll bring the iPad with preloaded things to look at or or things to read or something, but it it purely devoted time to, okay, it's time to just think. Just don't do anything else, but just kinda and and for me, when I have the time to do that, that's where a lot of my best work comes from. But if anyone looks like, if if you were doing a corporate job and you just tell your boss, I'm just gonna go sit in the woods for an hour and a half and and think about stuff, that would be perceived as as probably being lazy. You should be doing something.
Michael:You should be working. I would argue that for most jobs nowadays, that would be beneficial as well. But it's this perception that if I'm not physically doing something, I'm not hitting a button. I'm not staring at a chart. I'm not doing something that I'm being lazy.
Michael:But, yeah, it is dedicating time, I think, is probably the the main theme here is that you have you have to block off your time. Like, I the the calendar app on my computer and my phone is probably the best thing that I have because it tells me what I should be doing at any given time. And I think that's a good way to guide yourself as well is actually go into your calendar and book. This is the time for trading. This is the time for work.
Michael:This is the time for family, and this is the time for research and idea generation, everything like that. And as soon as you do that, I think you notice that those you get way more done in those times because you're not multitasking, which is just horrible for the human brain. We're just really awful at it.
Dave:Yeah. I agree. So yeah. So, Michael, I wanna see a video of your, your thinking place.
Michael:A good spot,
Dave:Michael. Take your phone take your phone out there and take a video. I wanna see I wanna see these trickling waters that you're, where all these ideas are coming from.
Michael:Yeah. I'll I'll send, yeah, I'll I'll probably upload it when I upload this this, video. We'll Yeah.
Dave:Put it on the show notes.
Michael:Yeah. Show notes or Twitter. But, yeah, it's it's very nice. It's beauty is I've got my woods, and then the buddy next to me was actually the best man at my wedding. So between the 2 of us, we've got a massive spot.
Michael:And, yeah, sometimes I go out there, and he's sitting there. And I don't I don't know if he's thinking or I don't he's got 2 young kids too. I don't know if he's thinking or if he's just de decompressing a little bit and saying I need a little bit of time. But, yeah, I I definitely think you need need that. And I got that from reading about people like, Steve Jobs who famously would just go to the zoo all the time.
Michael:He'd leave all of his stuff behind, and he'd go to, I think, San Diego. I my geography is bad. Wherever their headquarters were, there was a zoo nearby, and he would just go purposely get lost because he was like, no one recognized me here. And I can just walk around and and figure stuff out, and there's a lot of stories of, writers locking themselves up in cabins where no one could get a hold of them and and all of that. But, you know, can't can't go that far, but I can go in the woods for an hour and when everyone's everyone's busy and no one notices.
Michael:And yeah. So find that yourself. And and my encouragement would be, if you think you don't have enough time, you do. Just understand that your goal is not to get all the way to the end goal right away. Right?
Michael:If you have half an hour a day, that's fine. You just have to dedicate that half hour a day to something. Right? Maybe even have less time in the day if you and you want to, simply put out You wanna do all of your research and you wanna set all your orders during that half hour and then leave for the day and let those things happen. Because, again, you have more automation tools now, that you did before.
Michael:And I think that'd be a good thing to go over, Dave, as well. Is that how much do you think from when you started to where you are now or to where the people are, that leap in technology can save that time? So take your your same situation where you were working for AT and T and everything and you and you're working from home, you're trying to do a good job, but just transport that instead of 2,001 to now. How much more efficient do you think you could be with that half hour?
Dave:A lot more. I mean, a lot of what came out of that time was tools for my trading that would that would automate more and more of that half hour. So now, like, if I was doing it now, I would have brokerage plus, and brokerage plus came directly out of that time period for me and what I needed. So I went through probably I've got 5 different applications that I created for myself to enter my orders in various stages of automation that finally culminated in broke what you see now in brokerage plus. So that the the so a lot of what the difference was is stuff that I've created and put into great ideas in BrokeragePlus, and and it was solely to make my life better and to make my life more efficient during that time.
Michael:Yeah. So that that would be kinda one of the I think leave the people with is that, a, you have enough time. Even what I would do is if you're saying, hey. I wanna start trading. I wanna start systematic trading.
Michael:I don't think I have enough time. The first couple weeks of these half hour increments that you're gonna find for yourself, should be just researching the technology. Right? Just looking for, you know, what is what are my goals? What am I looking to do?
Michael:And what piece of technology can I lean on? If you're someone who's like, I want to get really into investing and and I want to do longer term things like that. Well, there's probably research reports you could subscribe to, and there's probably, you know, alerts you could set. There's orders. We have that whole episode, 2 episodes, I think, on order types that you could put out.
Michael:So a lot of that could be done. If it if it's day trading, then, yeah, things like brokerage plus where you can just have the system trade for you as long as it's connected. Your your sole job there is either to input the names that you want traded or to fully automate it with with systems, however that is. But I think that that exercise of researching the tools that are out there will help with everything else because you'll understand that, oh, there's a lot that technology can do, and the amount of time and energy that I need around this full time job or whatever it is that's taking up all of your time. I I can create that flexibility because I don't need to be there necessarily even when the market opens or closes anymore.
Michael:I can just have the systems do all that for me.
Dave:Yeah. And I bet that once you start looking at your actual time spent during the day, not only will you be able to automate some steps, but some steps you'll be able to completely eliminate. So if you look at that with a really, you know, critical eye, you'll get creative and figure out how to do what you're doing with a lot less time and a lot less effort for sure.
Michael:Yeah. And journal it. Take take 2 days and Apple notes or a piece of paper, whatever it is, and just write, half hour blocks. What what did you spend doing all of these times? And you'll notice there'll be at least a couple in there that are just useless.
Michael:Right? And then you could say, okay. I can now take those, and I can move something useful in there. And then all of a sudden, I'm I'm walking down the road. So Yeah.
Michael:Another great one, Dave. I think this is a massive lesson for a lot of people. I think it's gonna save a lot of people time, a lot of people energy. Anything to leave the people with?
Dave:I think that's a good place to to end it there. I think this is a good one. Yeah. I think it's a good place to end it.
Michael:Awesome. And me and Dave, yesterday, we're talking about some of the podcasts we got in the pipeline. I'm excited for them. I'm excited for some guests that may be coming up. We'll we'll mention a little bit later.
Michael:Yeah. A lot of cool things to come, and and I'm always excited to record these. So, see you next week, Dave.
Dave:Yep. See you next week.
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