Ruminations on Trading (Book Excerpt #2)

The biggest secret that traders don’t want the world to know is that anyone with a more or less sane disposition can do what they’re doing. The trick is getting access to the trough, to the P&L, to the “book.” The road toward it is tough, treacherous and crowded. On the way there, you will be misled into believing that in order to be a trader you must have a physics PhD, or know how to write code and build models, or have a top-school MBA, or, when all else fails, just be a young Caucasian male. But in the end, it doesn’t matter who made it to the top. In the end, it all comes down to merely placing a bet. The ideas of those who made it become validated by the platform on which they stand, by the levers they can pull.

Becoming a trader is like reaching a craps table on your twenty-first birthday with your rich uncle’s money in your hand; without that craps table and without that money, you are a nobody. Without a seat and a desk and a Bloomberg terminal, your ideas aren’t worth shit. Whatever you do at home with your 401(k) doesn’t matter; your trades have to be big and visible to everyone or, at the very least, to those who dispense your reward at the end of the year. If you know how to drive but don’t have a fancy car to demonstrate your prowess, no one cares about your prowess. The platform becomes a powerful communication tool: One should have great ideas and only act on them using a big podium.

The “book” is the medium through which you can communicate your entire worldview and let fools know that they’re fools without needing to actually say anything. If you’re right on your trades, you will become rich; you can then fancy yourself to be Bruce Wayne or John Pierpont Morgan or James Bond. You can establish scholarships in your name and start foundations to spread your gospel — conservative, liberal, libertarian, whatever floats your boat. If you’re wrong, well, you won’t get more money from your uncle, but you will gain an invaluable experience. You will earn your bona fides to speak about the irrational players and stupid monetary policies and dysfunctional government, and still insist that your general strategy was correct and would most likely work next year. And you’ll probably be right, too, at some point. You can’t lose! Becoming a trader is the greatest trade of all.

In this newfound realm, Vika had developed a new moral compass. Indecisiveness was an especially grievous offense according to her new standards. One should do the analysis, pick a side and stick with it — not question it afterward, not wring hands and second-guess. But those who overanalyzed and became paralyzed by the weight of their knowledge as a result immediately made it into Vika’s mental black book. Those chin-stroking pointy-heads who can argue both sides just don’t have the stones to take the plunge. They mask their fear and inaction with perpetual pettifoggery.

“If my grandma had balls, she would have been my grandpa,” Vika liked to say, mocking the absurd mental contortions of someone complaining about the way a trade had gone. “Take a loss and move on. What use is it to dwell?” Stepping into the abyss requires a certain skill, a special mental disposition, an ability to let go. This philosophy of letting go, of abandon, fascinated Vika. Once she’d decided on a trade, she would fight off the doubts. And with shaky, sweaty hands, Vika would pick up the phone and make a trade. And then… the weightlessness, the fall.

Why is it that we claim to want certainty? Only fools and cowards seek certainty. Certainty is a dead end; it’s a rich old widow living out the rest of her days on the Upper East Side with a little dog and big memories. Unless you are a senior citizen, you’ll go nuts after a few weeks of knowing what the rest of your life will bring. You’ll die of boredom. But uncertainty is what keeps us alive. It is that flip of a coin, that brief moment when it’s in the air or spinning on its side, that snaps us out of our daily stasis. Some invisible Odds Gods are giving you a chance to become better, smarter, richer. What fun it is to get paid if you earned it by the skin of your teeth, by the close call. And how dreadful it is to shoot fish in a barrel. Exposure to uncertainty earns you membership in a select tribe: You are a Padawan mastering the Force.  Once the trade is on, once the die has been cast, you’re in a parallel, auspicious universe. There’s only one way forward and there are only two ways out: Take it off at a loss or take it off at a profit.


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