Trading on AutoPilot mode

I once read this story on Reddit long back and wanted to share that, because I could completely relate this to trading.

An Airbus 380 is on its way across the Atlantic. It flies consistently at 800 km/h at 35,000 feet when suddenly Fighter Jets appears.

The pilot of the fighter jet slows down, flies alongside the Airbus, and greets the pilot of the passenger plane by radio: 

“Airbus, boring long flight, isn’t it? Now, have a look here!”

He rolls his jet on its back, accelerates, breaks through the sound barrier, rises rapidly to a dizzying height, and then swoops down almost to sea level in a breathtaking dive. He loops back next to the Airbus and asks, 

“Well, how was that?”

The Airbus pilot answers: 

“Very impressive, but watch this!”

The jet pilot watches the Airbus, but nothing happens. It continues to fly straight, at the same speed. After 15 minutes, the Airbus pilot radios, 

“Well, how was that?

Confused, the jet pilot asks, 

“What did you do?”

The Airbus pilot laughs and says, 

“I got up, stretched my legs, walked to the back of the aircraft to use the washroom, then got a cup of coffee and a cake”.

The moral of the story is: 

When you’re young, speed and adrenaline seem to be great. But as you get older and wiser, you learn that comfort and peace are more important.

Don’t worry about the Jet planes surrounding you. Enjoy your Cruise mode. I could relate this story with my trading journey, let me share it.

When I started trading 14 years before, I was completely in love with trading, I even used to remember which stock closed in what price. I loved reading everything about markets, even though I was trading for short term, I analyzed balance sheets and profit/loss statement, used to read every fundamental news about a stock, though it doesn’t really matter for a day trader or a swing trader, i just followed every kind of analysis. Its all because i really loved the process of analyzing about a company and placing a trade and when the trade goes right, and you make profit, it gives you greatest pleasure. Eventually, you get addicted to this pleasure and adrenaline rush that you get with every trade you place. 

Then came Zerodha in 2010, I opened an account with them immediately when i came to know that they charge only Rs20 as brokerage. But this has done more damage to my trading, because when suddenly the transaction cost went down considerably i started placing multiple trades, sometimes 100’s of trades, sitting in front of the system throughout the day buying and selling frequently. Here’s a snapshot of my old contract note with Zerodha, looking at it now feels nostalgic. 

These phases are burnout phases, traders get exhausted easily spending hours on analysis and again spending more screen time, watching charts, placing trades. At one point of time, you will ask yourself is this all worth it? Then you will check motivational videos from famous investors like Warren Buffett or traders like Paul Tudor Jones, Or Jim Simons and then you will answer yourself, yes it’s all worth it, and you keep fighting with the markets, looking for that secret sauce for many years. 

Over the years, you slowly start learning about yourself. One day you will realize that it doesn’t matter how much you learn about markets, it’s not going to help you become a successful trader, its all about knowing yourself, finding what suits you, what kind of strategy you can stick to, what kind of position sizing doesn’t make you panic, the more you learn about yourself, the more you detach yourself from markets. Once you attain that zone, trading becomes like an autopilot, you just focus on take off and landing and leave the rest to cruise control that manages your flight journey.

Every trader is here to make money, but they get lost with all the adrenaline rush and dopamine effect from trading. You need money to make money, not just passion. If you wipe out your account balance, your passion is not going to fund you with additional capital. You need to work hard else where and bring in the capital. 

In Twitter, you could see lots of traders keep positing tons of stock recommendation, trade recommendations with multiple charts. You don’t need to feel bad, if your profit looks so small compared to their profits. Lot of traders still sit in front of system 9 to 3, some make money and many doesn’t. But even if you make just 1/10th of what these traders make without spending so much time, through autopilot mode (automated trading), it’s definitely worth it. 

Only thing that is common among every one of us is time that we have, looking back i regret that i wasted 6 years from 2008 to 2014 doing random manual trades, this is the period i got married, this is the period i became a father, this is the period i was doing well in my coportae career, but i wasn’t there at the moment back then, i was constantly chasing my desire to become successful trader spending so much of time and effort, i was under illusion that there is some secret out there, once i figure it out i will be successful but it took many years to realize that the actual secret is there are no secrets, its all about following a process and being disciplined in following that process, am glad that i moved to system trading 8 years before. 

I realized the importance of time, since then am able to spend so much time with my friends and family, was able to quit my IT job and move to full time trading and run business. All these years, I never spent time on monitoring the markets 9 to 3, never bothered about what US markets are doing, or how SGX Nifty is doing. System trading is all about having that inner peace. I may not be making millions of profits every day like others, but am extremely happy with whatever the profits I make because I make that profit without spending hours in front of the system or worrying about market moves now and then. 

If you have decided that trading is your career, ask yourself, will you be happy doing what you are currently doing for the next 30 years of your life? If yes, continue with it, if not then you need to figure out what you could change and follow that. 

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