Prop Diaries EP2 – Being Thrown in the Deep End
There’s no material out there on coaching other traders to consistency.
Consistency in itself is this elusive beast that seems almost like a fantasy to those who don’t have the fortune of tasting it. Once you taste it, it becomes so personal, and trying to understand how you are doing it can be the mystery of a lifetime.
I do, however speak on behalf of most independent retail traders.
We almost never journal or stat track specifics in the beginning of our careers. It seems to take getting burned to oblivion and parsing through so much material online before we start to realize you should be doing some work outside of trading the charts. This is why for years, I preached trader work. This is also why I created TradeCraft, a trading journal that’s focused on tagging and the ability to find specifics; to see statistically where edge truly is.
TradeCraft was specifically built for my prop traders. I need to know what they are doing, and where edge, and failure is coming from. When it comes to crunching stats – there can be hundreds of millions of combinations – and that’s some mind boggling shit that can make ones head explode. This is why my current method, and I guess recommendation for you guys – is to look at the worst performing tag combos – assuming you’re doing the work – and the best performing tags.
The problem is, when you have a low sample rate of tags – those statistics will veer wildly over time, but they are still a starting point, and we all have to start somewhere.
A trade not tagged is a waste of data points for finding edge.
My method with my traders is to cut the bad shit out. I mean think about it – the less you do what’s hurting you the better your performance, even if its not “green” yet, you are getting closer. And obviously the good stuff you see – do that better and more frequent.
The thing about TradeCraft is we are still actively building it. While capable as is, I need tooling to parse through tags faster – which we have a plan for that. I also need to have a master dash just for me and the prop traders that isn’t available to our retail users. We will offer an enterprise edition for prop firms as we flesh this out. But for now I need some cobbled together shit to just monitor my traders, trading real time and tagging real time.
If you read episode 1 here; I talk about how I coach traders.
Like I said at the beginning of this post, there’s nothing that teaches this shit. I just have to draw on experience at this point from earlier guinea pigs whom my results were not concrete. However, we’ve seen some progress in the right direction. Using TradeCraft, it’s my hope to get more performance from my traders. After all, big prop seems to be doing this, so I need to as well. Because after all, just guessing is never good enough.
Wake the Fuck Up
Until I have my master dash, I keep my guys busy and have them just tag. I need sample size. They call me when they need me, and while this isn’t the best method, I need to be with them all the time, this is what we’re doing, plus the amount of shit I do is overwhelming.
-Trading
-Reviewing
-Updating my KOFI
-Content creation
-Tutorials for TradeCraft
-Doing daily meetings on the software
-Personal life
How am I suppose to do more shit? Really the answer is simple. Wake the fuck up.
I knew it was coming. I struggled with sleep forever. I’ve done all sorts of stuff, like black out curtains, cold plunges before bed, meditations, not eating past a certain time, etc. Could be a genetics thing? I just could never pull it off consistently unless I had a normal job and no choice.
I enjoy trading because I can come in late morning.
My thing is, if I’m going to perform – I want to feel good. When I wake up early in the morning even if going to bed on time – I wake up pissed off for no reason. I hate the world, I want to kill the birds chirping, I hate the joy on morning peoples faces. I don’t know why, but morning Cat is a different animal. It’s not me. It’s like I’m possessed or some shit. Sleeping in, avoids that cranky bull shit. Look I know how to fix it: Hypnosis tracks. Problem with hypnosis tracks – is there’s better shit to listen to.
Well, I’ve made one – finally.
If I’m to perform – which is what trading requires, I want to perform when I feel good, alert and on my time. I want to sit down, see the flavor of the day – because each day has a flavor. I can hone in and know how I need to attack the market, at what angle, how to manage, and dial in my pulse check. Thing is – getting up is something I knew had to be done. My guys, most of them, trade the open except one of them. He’s like me and just struggles with it as well.
I have to be up for the boys. Well, I figured maybe I can run my hypnosis for a month while TradeCraft gets built out further and then I can be prepared for this. That actually did not go as planned. Trading is like war: You have the first plan and then it all goes out the window the moment shit hits the fan. It’s to be expected, and I knew this would be tough. Not just tough, but more of a grind since I know what direction our ship needs to sail.
Traders Come and Traders Go
So I have one trader named Chronik. He’s lurking in the Twitter sphere, and all my prop traders know I’m documenting this. It also helps us all stay accountable. Also it does inspire others, and in the end we will need more talent. Building prop really is also the ultimate “content generating” idea IMO. So Chronik knows our money partner is The Futures Desk. So he knows we’re splitting the account. He purchased an account with anticipation of us doing this together. For me, I have no problem with them trading other combines as we gear up for full coaching and all that. There was also suppose to be an order of who was going to be first. Problem is, these are humans and shit happens.
There was originally 5 traders.
–Trader 1: his father passed – and was drinking a lot, and disappeared. He has since come back. However, he is months behind on tagging. I need that to get him lined out. He’s an old school trader that used to game the spread by only reading a DOM; no charts in the ES and well that ship has sailed many years ago, as he can’t do it anymore. Can I teach an old dog new tricks?
–Trader 2: crushes it, then hits these dark periods of draw down – and his personal life hits pockets of depression. This is also my guy who has sleep issues. But he has promising performance at times. He however just recently hit a month plus stint of deep darkness he never experienced before.
Plus, the increase in volatility has been tough for a lot of these guys, as they haven’t been around that kind of volatility before. Or they can’t remember how to make the proper adjustment to handle it if they’ve been through it before. Some may have not even been consistent in this. It’s one thing to experience high vol, but to know how to adjust and trade it is another can of worms. As my guys sort of disappeared, it made more sense for me to wait for the tooling to be ready.
Going back to Chronik – he was the last in the line up, Trader 5. I still think of it being 4 traders, because I’m not sure if trader 1 can get themselves stabilized. I don’t rule with an iron fist, and if they stray (like a cat) I let them. However, if they want priority attention, I need to see them doing the work. The guys putting out the best quality of work get bumped up in the queue.
Chronik had put in a lot of work and his reviews were above and beyond anyone else. So I told him you are in. He took the initiative without realizing it and pushed his way to spot 1. He bought the account and was like a few days from passing with the intention of us sharing it and being the prop’s account. He hit me up and told me “I need your help, I’m about to pass“. I’m like shit, I’m not ready but we’re going to make this work.
I immediately planned our approach. This was good as it forced me to have to wake up. I’m more likely able to do something I struggled with for others than myself. This is also why I think prop is important for traders’ growth – They’re more likely to review and tag and trade better if they are on my watch.
Accountability really does go deep, and it can be the pivot one needs to accomplish certain tasks they otherwise will struggle with. Because lets face it. As easy as it is to just tell someone to be disciplined and do XYZ, that’s not reality.
Week 1 – Trading Prop
Week one with Chronik was interesting. After he told me he was ready, I immediately made a nightly hypnosis track. Monday, we sat down and I let him just trade day 1 alone. I let him pick and choose. Talk him through the session, do some breath work the moment he hit his first loss we would do Whim Hoff breathing, as it forces delta waves in the brain. I’d do some hypnotist stuff to get his heart rate and mind refocused.
Monday was good. We got closer to target and needed only 2 more days of trading to pass this thing.
Tuesday, I was more aggressive. I was reading the market and sharing my thoughts on what was going on. He had trade ideas, I kept him out of some bad ones and then we got a 100% win rate. At this point I’m feeling confident.
Welp Wednesday rolls around. The volatility is high. It’s whipping both directions hard. Chronik seems to be impatient. He did mention before the session he listened to his hypnosis prior, and was pumped. However, he was getting a pit in his stomach. Being very close to passing was contributing as well as over confidence according to him.
I noticed as he was calling trades, because we do pulse checks, where you read the micro PA and see how in sync you are. The more you can read the noise, the better the pulse check, the better clarity which I wrote about here. I noticed Chronik was sort of calling trades in what I deem to be bad areas. I’ve dedicated my entire 8 year career to reading noise so I have a feel on it. Especially as I have exclusively dedicated my life to ES.
There’s a point where you are proficient in things and can do it very well. Don’t get me wrong, I’m never satisfied with my own trading; I can always be better.
Chronik’s pulse check was bad. He couldn’t get a solid read when he called mental trades. Something else he struggles with is shorts. On Tuesday, he kept taking longs on a down day. Which is okay as long as you are scalping and know the wind is blowing downward. After all, we are momentum scalpers.
Some traders have difficulty computing the opposite direction. It’s like writing with your left hand when you are right hand dominant. It just twists your brain up. For me however, the art and skill of trading both sides is very necessary to cultivate more opportunities.
He also runs stops that are way too tight in this higher VIX environment, and doesn’t push the trades long enough. Higher volatility is an illusion. It’s the same price action as lower a VIX environment, but it’s just more stretched. Like a rubber band. Its the same piece of rubber but you can grab it stretching it. In a resting state, the band can be 1 inch tall. You could stretch it 8 inches. The measurement in inches can be transferred to points on a chart. If I average 1 point in low VIX scalps, well – in high it can be 3 points.
You have to adjust risk to volatility. I always heard this as a new trader and just – it would never make sense to me how to do that. I do recommend slightly higher time frames in higher volatility. Going from a 3s chart to a 10s, so that I can read more context since we have more movement. Also in higher VIX, you will get slapped on the back side harder and if those stops are too tight, you will roll into a big hole, and often times the direction was right but you didn’t adjust the room the trade needs to breathe according to volatility.
This was Chroniks issue on top of always being long biased. His FOMO issue is wanting to catch pullbacks on rapid dumps. But sometimes, the pullback just keeps dumping and then before you know it, there’s no more risk. FOMO is not one size fits all and when it comes to fixing FOMO issues, you really need to know what specifically is triggering it.
This is why meticulous stat tracking with journaling software like TradeCraft can be helpful to see how this stuff is really impacting your trading. I also noticed he tried to catch pullbacks in general with a slip reclaim technique I talk about a lot on my YouTube channel. This is a good technique – however in really high volatility, all the Price Action is almost in a perpetual state of reclaim. So there can be one on both sides and you can you can get blasted. The best method is to let there be a stall and slight reversal before hitting in.
I let Chronik trade and wanted to loosen the reigns on him more for the Wednesday session. The issue is over management vs under management. This applies to stand alone traders and their trade management. Over management means you cut too much and keep over hitting or over trading areas, flip hitting. Stuff like that.
Under management is just pure choking and not doing shit about anything – letting good trades slip through your fingers. So I need to figure out that balance when it comes to how much control I exert on the traders’ decision making process.
Obviously, on Tuesday I was on top of him which we crushed it. But that makes me wonder: Is it me just trading through him and he doesn’t have skills, or is it helping? Typically when I do that – every trader swears by it. But that’s because we can do well and that may be an illusion? Time will tell…
So I decided to loosen up. Much like trade management, you need to find that precious balance point. Not too much – not too little, and you really will never be fully satisfied, but at least you get closer to that center line. He puts this one trade on and I’m thinking I should tell him its bad. He gets flushed. I knew it.
At this point, he took 2 immediate stops and had one left. So I told him we will drill. His pulse check was shit and so was his trading decisions. I felt he was just hitting in to hit in with no real context.
He doesn’t look at Higher Time Frame like he once did. So he’s too zoomed in, which is shaking him about.
Higher Time Frame is critical to scalpers; I don’t care what anyone says.
I remember someone commenting here that I put in a ton of energy and effort for a few ticks. Damn right. It works, and all I care about is extracting as much alpha as possible consistently, and if that means I need energy and effort to come up with the trade idea, then so be it. I’d exert a ton more energy working manual labor for less money, which I’ve done. So a ton of mental energy being put into a scalp for several hundreds of dollars in a 20-minute period is worth it for me.
Chronik and I drill. I just push him. We get into trouble which I like, because it’s going to happen and a lot of traders fall apart when they’re down; they cant handle it mentally. Anyways, we grind it out and are break even. I tell him we’re done. Traders also need to learn to walk away from situations that aren’t always green and be okay. Because most traders are either green or red as fuck to the point of catastrophic red. There seems to be no contentment with being break even on the session, or down but not daily drawdown. Just a slight red.
So I tell him, it’s not your Price Action – leave it alone, the next day is a new day, let’s not touch it anymore today. Well, he did. He claims he had an A+ setup and blew it. Hit daily drawdown. Just a bigger hole we had to dig out of. He was honest about it. Which I appreciate and he was disgusted and knew how unacceptable that is. I later told him nicely, if you keep doing that you will be fired. I did it with as much grace as possible and the first offense truly is not a big deal for me.
These traders are like my kids, and I must be as centered as possible, maintaining pure calmness. This is a way to set an example for them. Always lead by example. Always, always.
As a leader, if you’re cussing the trader out and being a fucking prick, it’s not to your benefit. I could go on about this. But think about it like a child. You cuss a child out, they will lie and hide shit from you. Same with a spouse. You maintain a masculine calm frame the entire time. They will be more open about fuck-ups. And I need openness about fuck-ups, so we can fix them, instead of the trader bottling it up and trying to fix it themselves out of fear.
Impulse control is a real glaring issue with retail traders. Something that has to be trained out of them or broken.
Hypnosis and Emotions
We had only one more session in the week. He works and that’s something else I have to navigate around – all of these guys have jobs. So on our final Friday session, we chatted and I had trouble getting him calm. He was getting worked up. Turns out, contentment was his issue.
I made a video on the 3 pillars of emotions:
Contentment has a lot to do with PnL. PnL really messes with some traders. And prior day losses can bleed into the next day. I’m sure most of you trade combines? You have one or two sessions before passing. You start to think about PnL and choke, destroying the account right before funding or right after.
Calmness and patience are the other two emotions I talk about which are pretty self explanatory. However contentment is a more elusive one out of the holy trinity of emotions. When I talk to my traders I know that one of these 3 issues is usually a real glaring problem they face. Typically, when you deal with one it causes 1 of the other emotions to be an accomplice.
With Chronik, so far I’ve found that contentment is the issue. We talked as I said – on Friday about this and he talked about how the PnL messes with him, especially when he’s going to pass these combines. There’s a pattern of blowing out on his end before passing. So what I elected to do was a full blown hypnosis session. We did attempt to do some minor breath work in the session before that and his heart rate did go down. However, he still had hints of a lump in his core.
You know? That feeling of unease. So – a full blown hypnosis session was employed. Usually these things are 10 minutes plus. A real disconnect was needed from the session. Getting a trader into trance takes time. I need that full trance state. Then I start making suggestions to his subconscious mind.
In this case, it becomes more spiritual. It’s a real art on my end to be creative and use no scripts to guide him through a journey. Painting as many visuals as I can. He starts by listening to delta waves and thunder rain sounds. Typically these sounds are natural relaxers. Then I talk about the rain hitting his skin and washing away feelings of tension, and the thunder striking, is him becoming a professional trader.
I’m not going to go into too much detail. As my hypnosis sessions are my proprietary weapon to give us psychological edge. I do use very certain circumstances from the session however. Specifics are so important. At the end of a session I want the trader to feel a narcotic feeling where their heads feel heavy, and they feel almost like they’re sedated on drugs. This is how I know I had a successful hypnotic session.
When I go into these sessions, it becomes almost like ritual magik for me. I do have a totem I hold when I guide these traders on my end. For me, it’s an anchor to draw upon. Your emotions are drawn upon anchors whether you realize it or not. Such as looking at your PnL, which can evoke emotions. Petting your cat or dog can evoke peaceful emotions, or even love.
So having a totem where I only handle it from a specific mindset – over time anchors my feelings and emotions to it. For me, it’s the best emotions and visuals I can muster. When I touch it – it feels scared and I draw upon the emotions I’ve attached to it, while putting new ones back into it.
So my totem is for our prop firm. When I hold it, I want to be as empathetic to the trader as possible. Empathic people typically are sensitive to others feelings and emotions. It’s almost like you become that person.
When I go into a hypnosis session, I want to become the trader. I want to feel what they feel and hit internal triggers in just the right way; being delicate to re-program their subconscious minds in a way that they really believe in themselves and are truly content with their PnL – like Chronik.
Making any product or food with love and passion reflects in the quality of that “thing”. So for me – pouring my heart and soul into a hypnosis session does make a difference in the trader. I have a solid sample size of this – so I know I’m on to something. I think it’s best you guys read from Chroniks words himself and see what he thought about our first week of coaching and how the hypnosis sessions helped him:
Changes I need to make:
-Wrapped up my first week of coaching, and man what a week its been. There’s a lot I need to digest this weekend and a lot of changes I need to make next week to optimize this learning time. Keep in mind these are just my thoughts; FC might have other observations and he can chime in where he wants. Personal Observations:
-My confidence got the better of me half way through the week. I was so excited to be trading with FC and, to be fair, we were killing it. 100% WR on Tuesday! At one point I was 97% of the way to funded, 13 green days in a row. These emotions (overconfidence, euphoria) would culminate in my performance on the 14th day, where I hit DLL.
-My overconfidence could also be interpreted as complacency. I didn’t put in nearly as much effort as I’m capable of into my reviews. I’ve been a fucking review monster in the past and I need to emulate that now more than ever. I passed up valuable learning opportunities this week by not diving into my session recordings with meditation and visualizations.
-I didn’t take FC’s advice seriously enough. He’s my boss now and I need to respect his decisions as such. On Wednesday, after taking $300 DD, he told me I should stop for the day. Shortly after he left I placed a couple more trades thinking I found clarity, and I got chopped up on the exact price action he told me to watch out for. I don’t need FC to babysit me, but I also need to smarten the fuck up and treat this like a job. If I was an athlete and my coach told me not to make a certain play and I went against his wishes, I’d be canned the next day.
On the brighter side, this week has changed my life. I’ve experienced things this week that I’ve never experienced before. Not just in the price action and exposure to FC’s edge, but also in how I observe the world around me. He was able to pull me out of extremely emotional moments and calm me down COMPLETELY. Slow my heart rate, steady my breathing, clear my head. In MINUTES. Holy fuck! That’s edge!
-I need to be reviewing the moment I stop trading. Meaningful review. Not just tagging. That information, those emotions need to be fresh. I need to utilize the notes. Recordings are useful but I need to observe how I was feeling and what I was thinking when taking those trades. Getting those reviews done quicker also gives FC the ability to pour over it himself and help diagnose problems I might not see. It’s just gonna streamline this whole process. My goal is to tag every trade, write notes where necessary, and have a COMPLETE DRC before I walk away from the desk for the day.
-I need to be more honest with myself and with FC. I think there were a couple instances this week where I WAS feeling FOMO, where I WAS feeling tilt, where I WAS worried about PnL. I don’t think I ever hid those emotions from him, but I probably wasn’t communicating the severity of those emotions properly. I want to make sure I’m really taking the time to recognize how I’m feeling when doing my temp checks. I also need to make sure I’m doing them more often throughout the session
-I need to be coming into the session 100% focused. I was fucking around during a couple of the sessions. Talking or switching between discord or whatever. I need to make sure that I’m utilizing these sessions correctly. I need a routine before the session starts to ensure that I’m focused and my mind isn’t drifting off. Miller made a really good point that I should be exercising in some way before the session to get the blood flowing and oxygenating properly. I should also be doing self hypnosis beforehand so that feeling of calm and focus is fresh in my mind when I start trading.
-I need to get rid of the noise. I need to optimize my technology to be as close to FC as possible. A lot of times I just have too many charts or I’m too zoomed in to notice shit that he sees. A lot of this comes from complacency. I need to always be thinking about how I can optimize.