What Can Make the Best Trader Lose 💸🏌️‍♂️

A CBOE options market-maker once said something that you should remember forever. "Take any athlete you know," he said, "and I bet I can make them miss. Suppose you are playing with a great golfer, and he is about to putt for par. Now, before he makes a move, tell him that you'll pay him $10,000 if he sinks it, but he will have to pay you $10,000 if he misses."

"Most people," said the market-maker, "will miss because they stop thinking about the shot and start thinking about the money." 💵 The market-maker was simply expressing the truth about financial markets that is almost always overlooked. Amongst all the talk of strategies and tactics, statistics and backtests, everyone forgets that none of those things matter once money comes on the line.

Every single mistake we make (not the mistakes we make on individual trades, but rather structural mistakes such as changing the stop, lifting it altogether and trading unprotected, or adding to a position beyond your strategy limits -- all those mistakes -- are always the result of money playing games with our psyche.) 🧠💰 The bigger the money, the bigger the games. 🎲

That is, of course, what makes trading such a challenge. It's not just the need to find an edge on the market, but it's also the will to ignore the minute-by-minute pressures of watching your money rise and fall. 📉📈 Even if we master the first part, the second part usually takes years to perfect. ⏳

That’s where prop really helps you out. By trading virtual money, the pressure is relieved somewhat (though not fully), and we can focus on “making the shot” rather than the “money”. 🎯🤑