The Long Road Home !!!
This article and my history is meant to inspire, show the importance of dedication and the endless pursuit of knowledge, while never ever settling for anything less than your Dreams.
Before reading this article, for background, it might be useful to read this prior article I wrote:
Message 29282626
It was 1984, the year I graduated from college and found an accounting job at a small software company paying lousy 18k/year.
(2 years later through very unusual circumstances became CEO of this company and finally quit in 1987 to pursue my dream and happiness.)
That fall an acquaintance of mine told me about a poker game he played in and I asked him if perhaps I could play once.
He brought me to the Cavendish club, a place where people gambled (various card games, poker and other games)
Barely knowing anything about poker at the time I was eager to give it a try.
The game was full that night and I had to wait over 3 hours before finally getting a seat and joining the action.
While I waited, I went to another room and found 4 people playing backgammon for money, a game I never even heard of before.
I sat down and quietly watched for the next 3 hours trying to understand the game.
I was absolutely mesmerized by this amazing game !!!
To most people backgammon is a simple game of luck, but there is another side to this game that most people have no idea about.
It is a game of extreme skill and on a professional level every move is based on math, statistics, strategy and psychological warfare when playing for money.
I felt like a kid walking into a candy store for the first time and after that day felt it was my calling.
I went to the library the next day and took out 3 books on backgammon and read them all in extreme detail that weekend.
The following 2 weeks outside of work I spent every minute studying this game staying up till 4-5am every day.
I was completely obsessed with it.
I then returned to the Cavendish club and for the first time played with someone besides myself and ended up winning $600 that night.
I started playing 5-6 days a week and studied the game endlessly and the more I studied, the more I realized how much more I had to learn.
6 months later I went to Reno to play in my first backgammon tournament and won it, first prize being 18k which equaled my yearly salary as an accountant.
2 years later Lloyds of London recognized me as one of the 10 best players in the world after I won many tournaments in the US and in Europe.
As I mastered the game, the problem became very apparent >>> I needed a new challenge in my life.
So I turned my attention to other games >>> Hearts, Gin-Rummy, Poker and spend countless hours/weeks/months/years studying them.
I played them all for lots of money and sizable profits, but the theme was always the same:
I would dedicate myself endlessly to perfect my craft and become the best or one of the best at it.
But as soon as I mastered a new game, I would realize the need for a new challenge.
This is my life in a nutshell.
Fast forward to April 24, 1998 and it was the day I married the love of my life in Vegas (who I meet and started dating in 1982)
That day we had to move the wedding up 5 hours earlier, because the prior day while playing at the World Series of Poker I managed to make the final table that would be played on my wedding day.
I had won many poker tournaments prior to that day, but none were sweeter or self-fulfilling than that one I won on my wedding day in front of my wife.
The next day on April 25 the Vegas Journal ran a story about me that headlined “Wed and Won”.
Interestingly, that was the beginning of the end for my huge interest in poker as I said to myself “mastered another one, time to look for the next challenge”
Prior to that point in my life I had tried trading on a part time basis numerous times, but never had the time/patience/consistent success to pursue it fully.
However, it was always in the back of my mind as something I wanted to pursue and focus on at the right time.
After returning from my honeymoon, in need of a new challenge in my life, I opened a trading account with a $110k (prize for winning the poker tournament)
I took up trading as a full time occupation devoting an incredible amount of time and effort to absorb as much knowledge as possible.
I read many books on trading/fundamentals analysis/charts, reviewed all my trades daily, took notes, endlessly searched for all type of trading trends, made do/don’t lists, etc.
There was never ever any middle ground for me, it was always either full steam ahead huge success or bust.
If I pursued something, I would never ever settle for ordinary or average, instead I always had something to prove to myself and wanted to be the best or something very close to that.
In 1998 and 1999 I found lots of trading success, but really didn’t focus on monetary gains that much.
Instead, my goal every single day was to learn as much as I could and absorb as much knowledge as possible, which always pays huge dividends in the long run.
Year 2000 was my HUGE breakout year, as everything I traded seemed to turn into gold.
Individual Investor Magazine (Maria Bartiomo’s husband ran the magazine and it went bankrupt in 2002) had 5 trading contests that year and I won all of them for total prize money of $180k
That magazine named me investor of the year in both 2000 and 2001.
Ameritrade also had a trading contest that year with 47k participants and I won that bad boy and collected a $1 million prize.
Afterwards, CNBC interviewed me about winning that contest as my wife and I spent a week in NYC.
That night after the interview my wife and I were sitting at dinner basking in the glory of the moment when out of the blue she asked:
“Now that you mastered trading, what’s the next challenge?”
It was a question out of left field that I did not expect.
I paused and gave it some thought and replied:
“Trading is a whole different animal than I ever tackled before. I have only scratched the surface of knowledge so far and doubt could ever truly master it in my lifetime. I am a student for life.”
Since, not a single trading day goes by when I don’t learn something new and I make a point of doing so.
I can’t imagine a more enjoyable profession that offers so many unique and unexpected challenges every single new day.
Dream the Dream, live the Dream and never settle for anything less !!!
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Gambling 101 and Trading !!!
Gambling, poker, backgammon and other games in my early life have really prepared me well for trading.
There is an enormous correlation between them and trading.
Discipline, money management, quick decision making, logical reasoning, patience, dealing with financial swings, mathematical and statistical precision are just some of the crossovers.
All of them are crucial, but today I want to offer some food for thought about gambling 101 and changing gears/money management.
In my 20s there was a time when I enjoyed playing Blackjack.
I learned the basic strategy and would never make a strategic mistake while playing.
The casino has roughly 5.5% advantage on perfect play. (that % might be higher depending of the rules of a particular casino)
So, if you play 1 million hands at $10 per hand your expected loss will be $550,000 or .55 cent/hand.
You can’t possibly win in the long run, but you can try to bring the house advantage lower by counting cards and possibly altering your betting structure.
The point I am leading to is betting structure/changing gears/money management.
I tried many betting structures in blackjack and one in particular seemed the most appealing to me. (off course in the long run still can’t beat the casino)
I would bet 1 unit on a hand.
If lost would bet 1 unit again and so on.
If won, would pretend I lost the previous hand and add would add 1 unit to the 2 units from prior hand and bet 3 units total.
If won again, would take 3 unit off and bet 3 units again.
Each win afterwards would increase bet by 1 or 1.5 units.
Once lost a hand, would go back to original bet of only 1 unit.
The point of this betting structure is to wager the smallest when losing and increase size when winning and riding a hot streak.
In general this concept is Gambling 101 >>> press the hot streak and run and hide during cold streak.
This concept has made me a fortune in trading.
When I am hot , seeing things crystal clearly, mentally/psychologically engaged I will have the foot firmly pressed on the accelerator by trading larger and larger size on ideal setups.
When I hit a road bump, lose my focus or mentally distracted I enter the No Wake zone, reduce my size and patiently wait out the storm.
I once had 61 straight profitable trading days and the size I was trading in the later part of that streak was simply obscene.
On the 62nd day I lost $522k, but that didn’t mean that much compared to the overall gain during the streak.
That loss was totally expected by me and was eventual considering the streak and the length of it and the size I was trading.
The next day I was back to trading standard size, while waiting for the next streak.
I am not suggesting anyone adopt my extremes.
Rather create your own betting structure that is in your comfort zone that will keep your losses small while struggling and create big/huge gains when you hit a hot streak.
Not every trade setup or every trading day is the same, so don’t treat them the same.
Learn when to attack, learn when to retreat !!!
Happy Trading
Michail
If you haven’t seen before, here are a couple other articles I have written that might be of interest:
Message 29282350
Message 29308243
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