Larry’s note: Welcome to Trading with Larry Benedict, my free daily eletter, designed and written to help you make sense of today’s markets. I’m glad you can join us.
My name is Larry Benedict. I’ve been trading the markets for over 30 years. I got my start in 1984, working in the Chicago Board Options Exchange. From there, I moved on to manage my own $800 million hedge fund, where I had 20 profitable years in a row. And, I’m featured in the book Market Wizards, alongside investors like Paul Tudor Jones.
But these days, rather than just trading for billionaires, I spend a large part of my time helping regular investors make money from the markets. My goal with these essays is to give you insight on the most interesting areas of the market for traders right now. Let’s get right into it…
The year was 1984, and I had just started my trading career.
I worked as a runner and a clerk in the pits at the Chicago Board Options Exchange (CBOE). And there I learned the first, most fundamental rule of being a successful trader.
As a clerk back then, you would answer phones, write orders, and run the orders out to the pit to execute them. And then, you’d get back on the phone and report the fill to the customer.
When I first started, I was getting trained by another clerk who worked for my boss. My boss was a big-time trader. And the clerk who was training me said something strange…
“Look, you’re going to get fired every day. But don’t listen to it. Come back tomorrow and everything will be fine.”
I’m originally from New York. And here I was… 21 years old, in a new city where I didn’t know anyone and I knew absolutely nothing about my job. Not to mention, I’m being told I’ll get fired every day.
I also didn’t know the ins and outs of working on a trading floor. I was expected to know what I was doing. But I knew nothing about trading, period. And on the first day, I got thrown right into the fire.
My boss was giving me hand signals for what trades to do from the pit, but I was clueless. They gave me a sheet with all the hand signals, but it was like having to learn sign language in minutes… I’d look up at the screens with the current stock prices, and it just looked like scrolling gibberish.
He really needed someone with much more experience than I had.
Inevitably, I messed up an order and my boss went ballistic. He told me I was an idiot and didn’t know what I was doing, and he fired me.
So of course, I’m freaking out. I called my mom and told her, “Mom, I just got fired. But they told me I’ll get fired every day and to just keep coming back.”
And she goes, “Well, just do what they say then!”
So I go back in the next day, and I’m there early. My boss walks in and he’s got a cup of coffee and a bag of McDonald’s, like everything is normal. He starts asking me what I did last night in a normal, upbeat mood.
It was crazy. Everything really was fine.
The next day comes around, and he asked me a question about adding fractions together. I didn’t know the answer, so I guessed.
Bad move. I guessed wrong. Then he went ballistic and fired me again.
Suffice to say, it was a high-strung and high-intensity environment. And as miserable as it was doing that every day – getting fired and coming back with my tail between my legs – I kept coming back.
Not a lot of people are built to handle that kind of environment. But you learn that way. You get knocked down and get back up, every single day.
That’s what my boss was trying to teach me, in his own strange way. And it’s a lesson every new trader needs to learn.
No matter how many times you fail… lose money… or “get fired”…
You have to get up, dust yourself off, and try again. That’s the only way to learn and improve.
It’s easy to get discouraged, especially when money is on the line. But if trading were easy, everyone would do it and everyone would be rich.
Maybe the advice to “never give up” is something of a cliché.
But that cliché is the reason why I turned that first job into a 35-year trading career, making millions along the way.
And if you want to be a successful trader, you must follow it.
Editor, Trading With Larry Benedict
What are some hard truths you’ve learned in your trading journey?
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