Luck plays an enormous role in trading success. Some people were lucky enough to be born smart, while
others were even smarter and got born lucky.
How about a serious answer?
"Luck" or "smarts" or "gift" are words indicating an attitudinal proclivity for mastery. One tends to do well at
one's calling. I think most good traders have a little extra spark about trading. Some people are natural musicians or
painters or salesmen or analysts. I think it is difficult to acquire talent for trading. However, if it is already there, it
can be discovered and developed.
What effect has trading had on your personal life?
My personal life is integrated with my trading life.
Is the joy of winning as intense as the pain of losing?
The joy of winning and the pain of losing are right up there with the pain of winning and the joy of losing. Also
to consider are the joy and pain of not participating. The relative strengths of these feelings tend to increase with the
distance of the trader from his commitment to being a trader.
When you made your first few million, did you lock some of it away to avoid the Jesse Livermore
experience? [Livermore was a famous speculator of the early twentieth century who made and lost
several fortunes.]
I feel the Livermore experience was a function of his psychology and had little to do with the location of his
assets. In fact, I remember reading that Jesse Livermore used to lock some of his winnings away and then find a key
when he needed to get at them. Therefore, locking up winnings would be necessary to emulate his experience, not to
avoid it. Furthermore, you would probably also need to overtrade and have wipeouts, while you simultaneously fired
up your emotions with the burning desire to "win it right back." Acting out this drama could be exciting. However, it
also seems terribly expensive. One alternative is to keep bets small and then to systematically keep reducing risk
during equity drawdowns. That way you approach your safe money asymptotically and have a gentle financial and
emotional touchdown.
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