Investing, dealing with fear and greed.

I was listening to an interview of an Options Trader nicknamed “Karen the Supertrader” after she built her options account to 105 million dollars. The interview was filled with important “take home” points, otherwise known as “Pearls” and one was when the interviewer asked her how did she maintain her strict discipline about entering and managing her trades over long time periods.

An important context here is that the interviewer created the trading platform she used, so he had access to her trading account records for 5 years. He watched her account grow into probably the largest retail trading account in the history of retail trading.

She replied that her biggest trading enemies were fear and greed.

She dealt with “fear” by sticking to her trade Safety criterion, trade size criterion and by sticking to her trade management plan. Additionally, She was able to quiet her fear through consistent success. She said she knew the strategy worked because she traded it practically every day and it worked very consistently.

Lastly, she maintained thus calm when the msrket moved against her because she followed strict criterion fir rolling her trades to give herself more time to be right. Thus, She managed the trades until they were winners by setting them up correctly or managing them correctly.

She dealt with greed in a similar fashion.

She stuck to her trade setup rules. She didn’t increase her trading size to make more money on a particular trade because of the corresponding increase in risk and distraction that caused. She didn’t enter trades that didn’t fit her safety criterion even if they looked like big wins because she felt that was greed talking. She kept her greed “in check” a idiom first under control by considering the primary motivation for trading outside the rules to be secretly motivated by greed. Thus she refused to vary her style fir profitability except when volatility was much lower then usual for longer periods of time and credits didn’t justify risk. But even this alteration was detailed and rigid to insure safety and impartiality.

In summary,
So she crafted a plan for safety and success with modest profit and managed risk. She traded the plan consistently because she knew it would work if she followed the rules. She didn’t deviate from her size or safety parameters to make larger profits. She dealt with the “beasts” fear and greed. And the result was tremendous success.

Remember...
Bulls get rich, bears get rich, but pigs get slaughtered.
Don’t be a pig.

✍️ written by Shortsegments

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