by Brady Dahl
What's your biggest loss?
My biggest loss was like $60K or $70K but I don’t even remember what the ticker was. I had too much size and let it go against me by not following my rules. Lack of discipline is always the biggest culprit when I make bad trades. Pulling a hard stop because you think it needs a little more room before it goes back in your direction is always a mistake. You end up playing the waiting game and then the pain just gets bad enough to where you need to get out immediately. But those types of situations usually come from my intraday trading.
278 The Swing Trader
Why do you think that is?
Because it’s me getting away from what I’m good at and trying to do something that Pm not. Too much size, getting caught up in the crowd, and trying to play momentum with the big boys. So I’ve learned my lesson there. And there’s nothing wrong with what they’re doing. It’s just not what I do best.
Have you had unprofitable months or years since the early days?
I’ve certainly had unprofitable months but not years. January this year is a good example. The market was really volatile and had some really wide swings. Trades would go green and then whipsaw back and take out my stops. So you have stretches like that every once in awhile.
How do you push through those periods of unprofitability?
Scraping and clawing, (laughs) Actually what you need to do, and what I wish I had been better at as a new trader, is just stop trading. And that’s one of the hardest things to do, because you feel like you need to hurry up and make back those losses, but you’re only going to compound them by making more bad decisions. You need to just stop, take a break, reevaluate, and figure out what you’re doing wrong.
Are you trying to trade momentum intraday when you really don’t have the skill set or personality type for it? Are your entries sloppy?
Are your stops within your risk tolerance? Whatever it is, take a few days or ideally a few weeks to get a mental reset so that you can come back to the market with a fresh set of eyes and figure out how to correct what’s wrong.
Do you still worry that one day you won’t be profitable?
You never want to say never, but I don’t spend a lot of time thinking about it, no. I don’t live a particularly fancy lifestyle. We live within our means. My husband, Corey, is very successful at what he does, and I’m at a point in my trading career where I’m pretty consistent, so we have choices and flexibility. I just continue to make forward progress by
279 The Swing Trader
continuing to learn and get better as a trader. Focus on what I’m really good at and don’t get distracted by what I’m not.
What has been a defining moment in your trading career?
I’ve had a couple. Blowing up accounts early on I began to question whether or not I could do it. I could have easily quit. But I realized I loved trading. I loved waking up in the morning, and I felt fortunate for that. I felt like I had truly found my calling in life. And more recently, it was a realization that I need to stay focused on the style of trading that works for me. When I stop trying to make trades outside my wheelhouse, my trading improves dramatically. That understanding has definitely defined the type of trader I am today.
Is that an ongoing process, that refocusing on swing trades?
Yes, especially with running the swing trading service I do now. I have members who are using the information I put out, so I’m working harder at finding the best swing setups, the best stocks that are really ready to move. The process has forced me to take a hard look at my strategies and setups, and that refining has really made me become a better trader.
What are you proud of when it comes to trading?
I get a lot of satisfaction from actually working with other traders over the last several years. I love seeing the light bulbs click on for other people after I’ve helped them incorporate something into their trading.
See new traders in the chat room begin to see their own trades and spot the good trade setups. I get thank you emails from people who say it’s making a lot more sense for them now. It s all very satisfying.
Obviously making a living is also great and something to be proud of, but I really like helping other traders. Hearing from them that I’ve made a positive impact on their trading is great.
280 The Swing Trader
You’re of the camp that thinks trading can be learned then…
Yes, I think it can be learned. Certain personalities are probably more inclined to do it, but I definitely think that if you have the desire and will to learn, you absolutely can. You might not be naturally wired for it, but anybody with the necessary dedication can learn to trade.
What mistakes do you see new traders making?
One of the biggest mistakes I see now is people not trading their own plan. They’re simply blindly following someone else’s alerts. And that doesn’t mean you shouldn’t trade alerts, but you need to understand why that person is making that trade and how you’re going to manage everything that comes along with it, including entry, exit, stop, size, etc. You need to be confident and independent in your trading.
Understand what style of trader you are. If you want to make a career out of trading and have longevity in this industry, I think it’s a huge mistake to blindly follow someone else. How anyone can do that just amazes me. When I first started trading it never even occurred to me to care where anyone else was getting into or out of a trade. What does their entry have to do with yours? Besides, you don’t know their plan.
Their plan could change the next minute. I also see traders getting overly emotional about every trade, which is easy to do when you’re starting out. Part of overcoming that involves a conscious effort to stay more grounded, but part of it is also just time in the seat. Time will help level the emotions.
What do you wish someone had told you when you first started?
I wish someone would have told me trading is a business. You need to have a business plan. You need to have a strategy. You need to understand the ins and outs of a trade. You need to be disciplined How are you going to manage your trade? Where are you going to enter/exit? You re going to have to invest some time and capital in educating yourself and acquiring the necessary mental tools to be successful, whether that’s books, DVDs, or subscribing to a service. If you want to be a trader, you better treat it like a business.
281 The Swing Trader
That makes a lot of sense…
It does. And I m not trying to promote my service. Just find something that works for you. But knowing what I know now, if someone had offered me a tool for $1K to shorten my learning curve and help me not blow up my accounts, I would have paid 20 times that. Every foolish mistake I made in the early days cost me more than that. There are so many tools out there today that can help you get a leg up, but if you’re not investing in yourself and treating trading like a business, you’re setting yourself up for failure.
How do you judge success in trading?
The obvious way is based on profits. Are you green or red? But I think staying focused on what works for me is being successful. It has been sort of a coming-home-again moment for me as I’ve refocused or swing trades in the last few years. I have a nice feeling about it. A big part of trading is the mental aspect of it, and staying grounded and focused on my path feels good.
What are the traits of a successful trader?
A successful trader definitely has to be self-motivated. Nobody is going to tell you that you need to get up in the morning. You can’t flop onto your computer two minutes before the bell and think you’re ready to trade. You also need discipline. You have to be willing to do your homework and prepare every day to trade. Being humble and grounded also helps you stay on the right path while trading. I think having an entrepreneurial spirit is also important. And curiosity. Every day I come downstairs excited because I feel like I’m about to put a puzzle together. It’s a challenge. What chart can I find today that’s going to do really well? What can I find tha
t’s going to make somebody in chat a lot of money? I love to figure things out.
282 The Swing Trader
Do you have any advice for people on how to be emotionless while trading?
I’ve put a lot of thought into that because I know when I was finally able to eliminate those huge highs and lows it made a big difference in my trading. But I’m not quite sure what to tell someone to get them there. When I look back at my own career, it just seems like the emotional swings got smaller and smaller with time. If I could graph it, you would see huge mountains and valleys in the early days and mere blips on the radar today.
So you ride the rollercoaster until you’re just numb to it all…
That’s kind of it. You just get numb, (laughs) But besides the passage of time, I think something you can at least try to do is check yourself in the moment, get ahold of yourself and make a concerted effort to control your emotions. Also, as new traders we tend to waste a lot of emotional capital by looking back, whether good or bad, and wondering what if. But your emotional capital as a trader is so important it needs to be preserved. Instead of dwelling on what just happened, look forward and focus on what’s next.
What do you think is the public’s biggest misconception about trading?
People assume it’s easy. But it’s not. It can be a huge struggle and very stressful Trading still has a negative connotation in the public eye, too.
Most of the movies depicting traders, like The Wolf of Wal Street, don’t paint the industry in a very positive light. The public doesn’t see regular people like me trading to make a living. Soccer moms and dads who trade for a living. Maybe through things like Traders4ACause we can change some of that perception. In my early days, I was a young, blonde female so nobody took me seriously when I told them I was a trader. I remember having a discussion with my mom about what to tell people I did for a living. I think we settled on stock speculator or some crazy tide, so she could tell her friends what I did.
283 The Swing Trader
What one thing would you change about the market?
I would really like a four-day work week. I need three-day weekends. I have a lot of chores to get done, (laughs) What are your goals right now?
To continue to trade successfully. To continue to focus on what I’m good at. Corey and I have been married for 17 years and all my stepkids are grown and out of the house, so we’re at a cool point in our lives where we have options and a lot of flexibility. I’m also excited to be involved in Traders4ACause and give back a little bit. I’m excited to continue to grow TradeOnTheFly.com and help new traders become successful.
Where do you see yourself in five to 10 years?
Definitely still trading and just doing what we do. I’m not trying to become president or anything like that. I just want to continue enjoying life here in Montana.
284 The Swing Trader
285 Afterword
Afterword
So what makes a great trader? What combination of traits, characteristics, and skills produces someone capable of earning in mere minutes what most people earn all year? The traders in this book come from all walks of life. Some are outgoing and excitable. Others are introverts. Some are brash. Others are humble. Some approach the market methodically and with caution. Others play it as it comes, seemingly by the seat of their pants. Even strategies that appear similar differ greatly in how they are executed.
So there is no simple answer to what makes a great trader.
Becoming one yourself is a subjective process. Trying to emulate each and every trader in this book, trying to adhere to every single rule they mention and regimen they follow, will either drive you mad or leave you paralyzed with fear and unable to place a trade. So you have to find what methods are most comfortable for you.
Which trader did you connect with most? What strategy resonated with your approach? Can you stomach large drawdowns for days, or would you rather cut losses quickly? Do you prefer to have a backtested system governing your trades, or would you rather make decisions in the moment? Start with what comes naturally and grow from there.
286 Afterword
Having said that, if tasked with building the perfect trader, I would pull various characteristics, skills, attitudes, and philosophies from each of these traders. .
Great traders are calm under pressure like Tim, patient like Michele, consistent like Nathan, emotionless like John, risk averse like Bao, optimistic like Eric, analytical like Gregg, objective like Phil, humble like Derrick, and confident like Tom. Great traders are also studious, disciplined, self-motivated, resilient, grounded, proactive, and ever-evolving. They focus patiently on the best setups, trades with a perceived edge, and capitalize on them to the fullest. They trade their own ideas, never follow, and take responsibility for their own decisions. They trade their plan, entering and exiting positions without hesitation nor arbitrary conditions. They add to their winners and take partial profits on big moves along the way. They’re willing to be wrong and admit to mistakes freely. They’re able to detach real world value from the money in their account and treat their P&L like points in a video game. They review their trading, realize what works, what doesn’t, and then adapt.
Last but not least, great traders understand that trading, including learning how to trade, is a journey without a guaranteed destination.
It’s a story that might have three beginnings, two restarts, a bumpy middle, and no end. Because even after years of learning, hundreds of hours spent in the chair, once profitability is attained, it still must constantly be sustained. The market is ever-changing. Not only must you claw your way to the top, you must 6ght to stay there, too.
If you’re up for the challenge, as the traders in this book were when they started and still are each day, I wish you the best of luck.
Although, as you now know, luck is the very least of it.
287 About the Author
About the Author
Brady Dahl is a trader, entrepreneur, and writer best known for his work on the first four seasons of the FX hit show Sons of Anarchy.
Trading since 2008, he is fascinated by the speed of the industry and the voracity of its players.
He currently resides in Minnesota, where he can be found raising a family, writing books, film and television, staring at stock charts, or hiding at the lake.
Connect at BradyDahl.com or @MiltonaTrades.
288 About the Author
289 Traders4ACause
Traders4ACause
Traders4ACause is an organization which supports and promotes charitable works and giving among members of the stock market day trading community.
As professionals capable of capturing gains and accumulating wealth, traders have been blessed with the means to help others. Learn how you can give back at:
www.Traders4ACause.org
In recent years, Traders4ACause has supported organizations like GiveWell, Breast Cancer Research Foundation, Building Dreams for Marines, Care Foundation, The Bachmann-Strauss Dystonia & Parkinsons Foundation, The Rapunzel Project, and many more.
290 Traders4ACause
www.MomoTraders.com
Exclusive content, including videos, trading materials, review, links to resources mentioned in this book, and a whole lot more!
Document Outline
Foreword
Preface
Acknowledgments
Note From Nate
The Storyteller
The Gambler
The Youngster
The Scanner
The Rock
The Tape Reader
The Student
The Steadfast
The Resilient
The Swing Trader
Afterword
About the Author
Traders4ACause
er>
