Trading veteran, John "Rambo" Moulton (Live interview)

what I'm always doing is I'm focusing on the next right I don't think about the training for it and and I'm not analyzing the risk I just took with that previous trade it's just the tried I don't care you know it's just put it in the books let's get on to the next trade I think us I'm mainly a spread trader so I'm buying here I'm selling here I'm trading 20 different things all the time on the bidding off or blah blah blah a lot of times I have no idea what I'm doing I'm just trying to make the trades and then and then they're like that closes and I go I wonder if my position is let's sort of in that position calculate I look at the position go well okay I'll get that up on the chop I'll get that up on the charts and see if that looks good oh yeah it looks good on the charts I like that position I might keep that pretty [Music] I guess why should I introduce John Bolton or as many of you will probably know better as Rambo first of all I got to say a big thanks to Rambo come up Rambo for so as Mick hinted to John is a very serious traitor he's originally from Chicago he came over here and got his start on the Sydney futures exchange in the 90s ie7 okay and yeah as we'll find out he certainly earned his reputation and became a really large portion of the volume that was done on the Sydney futures exchange which is very impressive considering that he was what you would call a local right yeah yeah so it wasn't working for a bank or anything like that it was a self-funded trader anyway John is still very active in the markets today and yeah as we'll find out he's got a lot of really great insights that I'm sure many of you can leverage from so okay so I mean this this might be somewhat of an unconventional interview I'm not sure exactly how it's going to go I know John has some of his own ideas but I'm probably just going to start by asking a couple of questions we'll see how it goes we'll keep it casual work a bit of fun he may ask the audience for a few questions so you know be alert he might fire something your way I mean John tell us a little bit about how you actually got started and trained and I were going back to the 80s and won't spend too much time on this but just a bit of context everyone in the room I'm actually going back to the 70s okay we keep going back further well yeah Carson brings the Spade like where did you get your start we we training in Chicago all right we're going to keep this brief is that I want to talk about myself too much I'd rather talk about what's happening right now with these people here so I'm happy to do this for a couple of minutes and that's it I started training at the Mid America change in January 1978 okay Mid America exchange is an exchange in Chicago that wasn't one of the primary exchanges the primary exchanges with the Chicago Mercantile in Chicago Board of Trade travel the mid-america exchange traded in smaller increments so it was a much cheaper way to get involved with trading for example I wanted to trade soybeans at the board of trade soybeans are traded 5000 lot increments five thousand ten thousand twenty five thousand six hundred and thirty-five lights everything's increment of five thousand at the Mid American exchange everything was one thousand so you trade a one lakh to live an eight lap twelve live the prices came across on a price jet these prices were being sent from across the street from the Board of Trade on a price jet in a random sequence and we didn't offered basis the prices we saw coming across on a price jet really crazy hard to believe it nowadays isn't it anyway that's where I started trading one two Lots in these little contracts at a mid-america exchange where the seats cost $12,000 my mother gave me the money and I put two thousand dollars in the trading account there you go that's why I started two thousand dollars so I mean I know you don't want to spend too much time on this but it's an incredibly impressive that you were able to you know at a later stage like I'm sure if there was a few years between that point and when you became a very large portion of the volume that was done on the Sydney futures exchange like how did you work yourself up to that point well for my floor trading right yeah for training I was tailor-made to be a floor trader from this big a university I scalped tickets to all the football games basketball games hockey games at the University of Wisconsin well I was a ticket scalper I played poker to a four o'clock in the morning I loved taking risk and when I first saw the futures floor I knew that was my destiny this was that okay but how did you scale up well present big balls all right I was always an over trailer I should have been treading five locks I traded 20 laps I should be trading 20 watts I traded 50 lashes we're taking 50 laps I created two hundred Lots no fear and do that don't you at any point so imagine you oh yeah yeah oh yeah I went broke a few times sure you ain't broke hey you lost all your money again how many times that twice okay can you walk us through what may be led you to blow up like I know you said you were training to bigger size yes why it catches up to you I mean yeah when you first start learning how to trade isn't all you guys are traders here anybody here not a traitor not nobody that's good I'm gonna rule the traders everyone here knows this you start out small and you work your way up right that's what you do you start really small and you work your way up it's like climbing a ladder two steps up one step down you're used to trading a five let's say let's say for example you use the training of five left is the first time you try to train a ten lot you're gonna lose every time okay then you say okay but I know how to trade a five lakh so you go back to trading a five lot then a month or two later you say I'm gonna have a go at that ten lot now and this time it works and then you go okay I can trade the ten lakh now now I'll try 220 lot first time you tried twenty-nine you lose and so on and so on and so on so you know you got to learn how to lose I'm sure everyone in this room knows how to lose right it's very important I want to talk about this later losing is extremely important winning is easy Luzi is the key to trading your turn when you win Park those couple times we've ever did you have it out yourself that you could make it as a traitor like we contemplating whether you should maybe look for a different career never you're in your 20s and I just had a lot of self-belief a lot of self-belief it's a real it's actually interested looking back on it because it's a real balancing act between believing in yourself and and having a bit of an ego but not being to the human ego where you are your own worst enemy or you get greedy and like that you just have to you have to really know yourself and the sooner you can get a real handle on who and what you are you play to your strengths and you work your weaknesses out of you bouton she went broke was there a point where things began to click for you we feel too sorry account not going broke again um like what changed what changed just stopped you from going cool I give you example one of the times I went broke okay I bought a board a trade seat in January 1980 I was sponsored it was a cosign loan with the gentle by the name of Bob Collins through the Continental Bank in Chicago and now defunct continental Bank in Chicago at that time I had about $25,000 a seat the Board of Trade he couldn't rent seats in those days the only way to gain access to the floor was to buy a seat the seat at that time was about two hundred and twelve thousand dollars a lot of money in 1980 I had a bid in for the seat of the third week of January of 1980 and that weekend Bill Clinton put a grain embargo on with Russia no trading any of the grains Monday Tuesday through our Board of Trade I went these seats are gonna head south I women tried to cancel my bid for the seat I sue the doors open for to travel in their canceled made canceled I did my bit had already been hit 212,000 by the end of that day seats are trading for 185 thousand right over the next six months seats went down to 135 thousand now I'm in at this price up here most of the money is borrowed and then add injury they had insult to injury I wanted to be long swim inside I saw a spread between soybeans and wheat I want to be long soybeans in short week but it's just a spread I wanted it wasn't working so wasn't working by mid June of that year I was about $30,000 in the hole for my in my training hunt you have to understand in Chicago you can trade with the devil I know it sounds crazy but if you remember the Chicago Board of Trade or the Chicago Mercantile Exchange they gave you the grace of trading with the dead anybody did it they just did it there was this old-fashioned that's what they did so I walked through live on Collins's office and I said I was about to say mate I didn't say mate I said I said about listen I can see that my accounts debit and they were organized to go to Europe to play golf with this friend of Milan oof since high school he was number one man on the northwestern golf team for four years and for six months before that we'd organized this golf trip in Scotland and England for first two weeks of July and I said then let's not cancel this trip as I can see I'm in the hole here I'm bulk and he's looked at me says John don't worry about it you won't need off and you come back and start trading whenever you want I was like wow that's cool okay I'll go on the trip and I left wrong a little near little three live at the Mid America I was wrong three thousand bushels of soybeans right in the two weeks I was in Scotland and you have to understand there were no cell phones there was no telephones I was gave up my price dissemination was coming out of an orange newspaper that came out of London it was called the Financial Times and it was on it was on a day and a half delay and all of a sudden I saw soybeans limit up next day sweetings I want to go back I wanna go back I want to go back about time I got back to Chicago my little three lot had paid for my holiday we're in the midst of a massive bull market and between the second week of July and the first week of September not only was out of debit I had my seat paid off just real quick can you explain how this situation works like why did you need to say just limited context memories I'm gonna sound like an old now say um in those days in those days the only way you could really trade was on the floor otherwise you're seeing in a broker's office looking at price information that's anywhere from five to ten minutes old okay you know like if you wanted if you just a position trader and you just want to have a position that's fine but if you want to be a scalper a day trader you had to be on the floor use heavy we always it from the get-go I guess it's naturally gravitated absolutely scalper day trailer yeah okay let's go back to the point you make where you spoke about how it's important to lose it sounds like you've got a few things you want to say about that Tara well it's just my observation the last couple years of my life that done a society in general doesn't really teach people how to lose they teach you how to win winning is easy everybody knows how to win you know they see LeBron James win a basketball game making the last shot he knows how to win he's a winner winning is easy but there anything in society that teaches you how to lose is there a course at university you take that says hey come take this course we're gonna teach you how to lose in there is what there is one thing they'll teach you how to lose in that's organized sport because an organized sport you will lose okay that's the only thing I can think of that teaches you how to lose other than that you have to figure out for yourself you really do and losing is it's in how you deal with losing is extremely important in training cuz winning I'm telling you is easy that's easy it takes care of itself the key to trading is learning and figuring out how to take a loss and how you deal with that up here do you hang on do it and let it bother you or do you release it and let it go all I can say is is that you need to learn from when you're trading you have to learn and you can learn from them from being correct and say I did that correct and you learn from that you'll also learn from when you lose when you lose you have to experience the loss feel it learn from it and spit it out and let it go and focus on the next trade if you hang on to loss too long it will pollute you it will not allow you to make the next trade and you have to focus always on the next trade the next trade is the most important trade in the world not the last trade or the trade before that of the trade before that just let the trades happen and focus on the now of trading do you have the belief that each trade is individual of itself like the Amoy times where you're actually going through a rough period do you still treat every why are you so negative I'm not losing here it says yeah you know that's true I mean yeah yeah the way I've always traded is is that because I'm fairly I don't wanna use the word high-frequency because that you guys have algorithms that are high-frequency trading algorithms and I'm more of a hands-on trader and what I'm always doing is I'm focusing on the next tray I don't think about the training for it and and I'm not analyzing the risk I just took with that previous trade it's just the tried I don't care you know it's just put it in the books let's get on to the next trade I think us I'm mainly a spread trader so I'm buying here I'm selling here I'm treading 20 different things all the time on the bidding off or blah blah blah a lot of times I have no idea what I'm doing I'm just trying to make the trades and then and then they're like that closes and I go I wonder if my position is let's sort of in that position calculate I look at the position go well okay I'll get that up on the truck I'll get that up on the charts and see if that looks good oh yeah it looks good on the charts I like that position I might keep that for a day or two you know like it what motivates me to make trades is is what I'm looking at the markets is a lot of different things it has to do with relative value it has to do is there a buy program in the ten years is there so program in the ten years are these spreads reaching historical levels are we getting their expiration now these spreads historically have a tendency to move a certain way to go into expiration so it's a lot I'm thinking about when I'm making treads but I dwell on what I've done I never dwell on what I've done ever when you're talking about learning how to lose I mean I know who's who here has been training there so less than two years okay so I mean it who's been training for more than ten whoa cool young crowd that's cool so I imagine especially for newer trains that's a very strange concept to put forward yeah learning how to lose how what do you actually know if you've learned how to lose you stop doing it you don't lose as much you need to lose less frequently and then you say to yourself ah maybe I'm getting this now okay but you're gonna lose so I don't dwell I once again I'm repeating myself but I I I'm so focused on the next train this is real Zen man this is like living in the now and spitting out what's happened in the past your Zen Buddhist if it needs any Buddhists here you'll make a fortune trading so what you're trying to do here is you're trying to focus on the absolute moment of the price information that you're getting off the screen and that's what you're focused on and everything that's happened before that you can look at it later but in an active market when you're trading you want to be focused on the now of the price action that you're looking at and if you're dwelling on other things that happened in the past it's gonna it's gonna keep you from doing that it's as simple as that as far as losing is concerned I mean you know like when you really actually realize that you've lost money well when you get your statement the next thing you look at the total equity at the bottom you say I lost money yesterday but I but I don't I don't do that going months and months without looking at my statement to see if I've made a loss any money I've gone months with that one of the things when I first started trading like a lot of you guys are new traders I had to keep track of how much money was making daily basis I used to go from Chicago on the Chicago Northwest and trade up to Lake Forest every day it's about a 45 to an hour train ride depending whether I'm taking the Express trade or not and I'd sit down I'd count every trade I made and figure out exactly how much money I made or lost on the day I did that for a few years right so it's an evolutionary thing when I first started trading I really wanted to see how I was doing on a daily basis right it was important to me then I realized that per period of time that wasn't so important then I got to a point where I said actually if I can completely divorce myself from money I'm going to be a much better trader I know it's hard to do but I'm telling you now if you can if you can get away from the money aspect of trading and just focus on the market and making good trades you have let you'll be distracted by less things there you go I mean I just I'm at a point now I'm a heaven for about 15 20 years where I just don't care about the money I am unthe Li statement now I look at a monthly chart of where my equities been and that's it I don't look at daily statements that look at nothing I'm focused on my on my position and the trades I want to make the trades I'm making I feel like in your eyes today you may have well this may be a good point for me to ask you about your comment analogy I don't know anyone who's seen the Bulls ABARES documentary I think it's in the one of the opening scenes isn't it yeah so let's let's hear a little bit about the common analogy and how that applies to your trading well it's kind of like what I just said I mean the tail the comet is looking at charts and I match artists I love charts that's why I don't listen to fundamentals how if the non-farm payrolls are coming out I don't know what's not what's known what's number what's number I don't give a I can see by the price action of the 30-year bonds in the States what what what you know whether it was what it's down to the mark I'm only interested what all this information is doing to the market so with the common analogy my by the way that's my old material it has to do with like the tail of comet is what you can see when you look up in the sky and just like you can look at historical charts you know you can look at the daily bar chart and you can see what it's done going back as far back in time but that comments moving just like the prices that you're trading are moving continuously moving across that screen prices are changing prices are changing and looking at the historicals is okay but really trading is about being right there in the momentary instance of price creation being involved with the second by second price creation and that's the front of the comet I suppose did you have in you an analogy for that no no right not if the time I had made thank you all right well let's let me ask you I mean there's some subjects which you might like to talk about I mean I think maybe we can tap into how long have you been trained you said you started in the 70s just over four years okay four years so you know let's let's make the most of that and tap into some of the you know the insights that you've gained over that time through you know you know hard lessons learned etc so I mean what are some of the lessons I know this is a really cliche sort of thing to say but given someone like yourself who's been doing this for 40 years I think it might be an interesting subject to go into what are some of the lessons which you would like to pass on to a younger group of traders believe in yourself soft belief real big real real big don't quit and never lose all your money it's like a poker game you lose all your money you have to leave the room go away come back when you have some more money so yeah that's a very simplistic thing to say but it's it's really true stay in the game and really believe in yourself it's it's some it's a real balancing act between having too big of an ego and not having enough of an ego you know and you got to know yourself really well you don't know what your strengths are and you have to know what your weaknesses are and it's a real game of inner exploration up here I find it interesting now we're all trading from screens the screens over there and I'm here you want to externalize the experience of trading real easy the screens over there and I'm here it shouldn't be doing that you should be internalized in the experience of what you see on that screen into here internalizing it it's not you against the machine the machine should be part of you metaphorically so I suppose it's view point one of the things I would like to talk about a little bit is observational skills in order to be a good trader you really need to work on your observational skills very important you need to notice what the market is telling you I don't make a whole lot of decisions on tray I'm like I would sit there go um you know based on the charts the 10-year bonds are going to this level I'll let the market tell me what to do I don't buy the bonds unless the market yelling at me bye buddy bonds you idiot and then I buy because I let the market tell me what to do I I kind of divorce myself from my opinion and I'll let the market tell me what to do my opinion is guided by what the market is telling me how do you find out how do you figure out what the markets telling you you have to watch it very closely but then too closely sometimes you can deep focus from it and sit there and let your eyes drift away from the screen and your subconscious brain will be picking up on what's there and you look back at you know I know what to do now use the power of your subconscious mind your intuition and your your the power of observation really really help you intuition observation really really potent tools for being a good trader how do you learn that stuff is it purely from sitting there in front of and just building up your screen time or are there exercises you can do away from the market yeah you know hey you you practice your power of observation every second of your life I'm looking around here right now and I can see these wooden rafters I can see the lights over there I can see about how many people are in this room my eyes are wide open all the time and I love looking around I love walking on the beach with my eyes open looking up at the clouds at night I'm looking at the Stars just use your power of observation continuous in everything you do your life every weapon waking second notice what's around you use your observational skills then when you look at that computer screen it's gonna be so much easier to look at it focus on it and make decisions so you have to practice your observational skills especially nowadays with social media and everyone I mean I was at the airport this morning and everybody's on their bloody iPhone a computer screen like put it away have a look around if you focus all your attention on one thing you're not doing it justice to your brain let your brain work the way it was intended the way it was made for you utilize and hone your observational skills and let your brain do what it wants to do okay you're gonna be your brain wants to be flexible your brain wants to work for you it can't wait to make great trades for you all you have to do is let it do its thing don't stand in the way what does this mean oh you have to have a really open mind you're gonna be non-judgmental you have to open yourself up to everything and utilize the fact that your spirit inside you wants wants to be open and and free I'm getting really philosophical here but we all have it in us every single human bein can be a good trainer I have absolutely no doubt about that it's inside every one of us we just gotta learn how to how to find it dig it out and don't let anything stand in the way don't let any dawn was coming between you and yourself get to know yourself really well it's a great thing about training you're gonna get to know yourself really really really well and you'll become a better human being for it the life lessons I've learned from training have manufactured me into the person I am now and I like glam and I like to think I have an open mind and I like looking at things and I like life I love it these Institute intuition and observational skills which you talk about when do you feel as though like if a trader is there watching the market every day how long if they're doing this day in day out do you think it should take them to sort of feel like that it's cheesy that sounds almost like one with the market like they can really feel when it's screaming at them telling them to buy the 10-year bonds or you know you know it'll just pop in your brain you know a lot of times not all the time but sometimes I'll be just sitting there and I'll just kind of go into a bit of a Zen moment I'll empty my mind out of all thought and I'm not kind of focused at the screen but I'm not really focused at the screen but I know that my subconscious is looking at that screen I was just kind of zone out for 10 minutes empty all thoughts out of my brain I'm in front of the screen all of a sudden I'll come out I'll look at the screen like oh I know what to do that was so easy practice a little bit of meditation learn how to empty all thoughts out of your head are you you guys anybody here have a sleeping disorder no she don't have a sleeping disorder they're really bad learn how to completely empty all the thoughts out of your head and then you can fill it up with the ones that are important and if your traitor okay let it flow out of you and fill it up with whatever you want looking at that screen and your brain will do it for you it really will the trend is your friend the market will show you its direction it gives you a little clues I was talking about this with a bloke from Macquarie Bank today anybody here trade the three year bonds against the 90 day bank those in this country there's one there there's a couple over there good on you good I trade that too in August 8th 9th and 10th of 2007 there was a major divergence between the 90-day titles and three-year bonds in this country to such a point that I was flabbergasted there were always the price relationship always moved within a certain band and now they're just gone ballistic the bank bills were losing against the three year bonds massively I called up one of my friends in Sydney and I said what's going on he said well you do know what you're trading don't you know yeah of course I know what I'm trading you won't tell me what you're trading I said 90-day Bank bills he goes 90 date baked bills what yeah and what sort of thing you trying I said three-year government government bonds right so the banks are in trouble would appear the markets telling us that the banks are in trouble and people are fleeing bank debt and no moving it into Treasuries safe-haven stuff this occurred 13 months before the stock market crash completely tipped the whole thing off that was going to happen if you were listening and watching the market you have seen it anywhere said bloody hell something's something's up here something's up I'm not making this off the market was just saying that to me something's gonna happen here okay so the market the market will really help you out if you if you watch it and listen to it it'll show you a direction in a big trade like that that was that was monumental I mean that's one of those things that I'll always remember for the rest of my life what year was this August 2005 2007 then I got the year wrong side so August 2007 so it was a full 13 months before September 2008 when a hit the fan how did you were trying change during that period well that's another thing with training you have to change with the markets I don't care what algorithm you built you've got the black box if that thing doesn't morph with the markets you're doomed you have to and I have nothing against people with algorithms and trading systems that they plug in and just the computer does all the work there's nothing wrong with that but most of them over long term or a very long term stop working because the markets are always changing they do they completely change you know in 2011 the exchange called me up and said you worried about these algorithms that are coming to the market I said now why should I be worried only three things you didn't buy so we do nothing and now it is unbelievable but like you have to have an algorithm to try it you have to okay there's a monumental change in the market so you have to you have to change with the market and if you are stubborn or you're closed-minded it's not going to happen very very important to change with the markets what did I do in that scenario I stopped trading the spread it was out of control I had no idea what was gonna go next see you at a key moment directional trades well I stuck the bill spreads and trading the curve right I think as subject which would be really interesting about you kind of hinted on this a little earlier is your appetite for risk you said it's kind of natural from the beginning you had this this appetite for taking risk so a lot of people that probably doesn't come quite so natural do you think it's something which can be learned it's only risk if the firm you have money with is demanding margin money from you village risk for the better asking you for any money who cares is is that possibly why you blew up those couple dollars probably I've always been very lucky they've always allowed me to over trade because I'm a classical over trader I always traded far more than I should how do you know when you're over trading like us obviously you just do huge volume naturally Elaine cuz I only have $100,000 in the account I'm trading thousand watts and going back to an earlier point you said and I should not gloss over this because it's a pretty bold statement you said you must have an algorithm to trade oh well you don't have to I don't I know it what what made you say that because it's all I know it's it has to do with assuming risk or taking risk you guys know the difference between assuming risk and taking risk anybody won't have a crack at this one what's the difference between assuming where it's been taking risk anybody okay I'll explain it to you real simple a casino assumes risk you walk in the door of a casino he's sitting there with his doors open it knows the odds are in its favor you can't wait for you to come in and bet your money you're taking the risk and they're assuming the risk they're happy to do that okay for a lot of my life as a trader I was the one who seeing the risk I didn't care whether you bought or sold from me I didn't make a market and you I don't care about from me good luck Sal to me good luck I was making a two-way market and everything because I had built into my head and ate the idea that I was getting an edge well if I could buy at this price or I could sell at this price I was getting an edge those that just don't exist anymore especially in the 6:7 think Dumont there's always three to five hundred on the biddin offer so you know in 1989 you know how's the fourth bill month John eighty-five billion 95 when you want to do how hard is that to do now it's eighty eight bit at eighty nine five hundred aside so unfortunately because I don't have an algorithm I've had an algorithm completely that stacked me up in the in the ladder of where I could get Q priority if I've algorithm that could cancel my bid or offer in a nanosecond like everyone else has maybe I can go back to making markets like that again but I am not fast enough with a mouse the cancel bids and offers without getting steamrolled and that's the problem I have so now I'm a risk taker I'm not assuming risk anymore but I'm completely happy about but I'm morphing into that and it's a challenge for me so there you go MIT so by being a risk taker you're essentially saying that your edge you have less of an edge no there is no edge the only edge I have is is my ability to listen to what the market is telling me my experience and then I go from there I mean you know you look at the you look at a bill month and it'll be like 95 billion for 5,200 off at 96 I'm fifty lots of the 296 I'll get these is 5,000 on the bit no there's not there's really only 300 all those other bids in there been putting in by an algorithm and then a flash of a second cuz the eyeball only works one 27th of a second this is milliseconds it now only is been is gone there's now five thousands on the offer at 95 because everyone's piling over the back of each other their algorithm to get on the offer you know so I have to start hitting bids and offers that I Beckett are value for me and it's the trade I want and in the old days I could just sit there someone eventually bother 96's off me give something OD how many algo traders here hold your hand up one two only three you keep come on guys how many our traders really here okay so there's not that many members of the evil empire is that okay though that's kind of cool I thought to be a lot more Auto traders here kind of what kind of algorithm you have can you tell about your algo no see outside what they are about it talk about relative value and the trade what I'm interested in is on the internal one of your legs might be aggressive now what about the other leg so you're trading spice and pay are you willing to be passive with the out goes on the chance that you're going to get set um well good question um it's all about feel for me a number one I don't worry about commissions and that's something you guys should do fight for every dollar with whoever you're trading through for every Commission dollar nail them down your biggest cost of training is paying Commission's might and just just screw them down as far as you can in the Commission's you're paying it'll pay off in the long run so I don't do it I don't pay I don't care about paying extra commissions because I just pretty much screw it down the next to nothing anyway but sorry the leaving the market cost ah market cost I don't perceive it as market cost I just perceive it as is am I gonna give it the price I wanted that now I have to pay up a half tick that's okay it doesn't it doesn't bother me to do that if I want the tread I want the tread sometimes it works sometimes it doesn't especially from trading say like the you know the spy against the S&P or the the ten-year notes in the state's against our 10-year bonds which I don't do a whole lot it's very dangerous and that's another thing guys if you guys are all young go for it man just go for it I'm gonna stage in my life where it I'll tell you what if I did something really stupid the mark and I gave it all back I'm gonna feel like a really idiot I mean I don't want to do that I don't want to give it all back I got a good lifestyle you know I don't you know you work really hard at something you get good at it you do you you're just one of your one of your concerns is that you're all of a sudden just gonna give it back for one stupid trade the virus they keep taking days of being an over trader and trading huge size or over with I don't need I don't want it any amounts of money that I make now are not gonna affect my lifestyle making more money does not change my lifestyle so when you're young you want to make money to enhance your lifestyle and hopefully for some other good reasons why do you want to make money family that's good very noble how do you why do you wanna make money yes yeah that's yeah it's a good question I think we should all be asking that of ourselves well what do we what do we what are we chasing the money for and it is a very funny game because they're only a measure of success is how much money you're making you know at least LeBron James has a trophy to hold up and he scored 52 points and it gave me you know he he he has he is more of a acknowledged greatness but if you're sitting at home and by the way who trades from home hold your hand up please whoa alladia cool that's good and you trade from your mother's basement not just I'm just kidding um is it lonely trading home because would you prefer to be trading with someone else just like curiosity you prefer to trade by yourself do you prefer to trade by yours okay it's a very insular game if you don't have anyone in your room trading with you and it's gonna in it's tough because if you've had a good day or a good week how do you kind of want you kind of want some acknowledgement of that and you don't really have that you're not gonna get any knowledge front of that yeah well you yeah that's right you can treat yourself by spending some money which is always a good idea to do that but the one thing that I found and and about trading and it's the greatest gift that training ever gave me and has nothing to do with money it has to do with freedom up here I know early in my life I wasn't the type of person who's gonna be told what to do I realized I was gonna have to find something that I could do for myself I wasn't very taking orders of working for somebody and initially it was like okay to do that I need to make some money on my own I'll become a trader okay down the track and I made mistakes I started you know when I first got some money I started buying stupid things buying stupid things then I realized that owning physical possessions was just gonna be a burden to someone like myself I'm no good I can't look after things I don't have to changes oil I can't do this again do that only physical possessions is a complete burden so I stopped doing that and then a little bit further down the track I realized that the greatest thing that training was gonna do for me was freeing up my mind freed me up up here I can look at any situation in my life and treat it honestly and fairly without having to accept anybody else's Dogma being shoved down my throat and I like that I love having freedom up here it's a really beautiful feeling and I wouldn't trade it for the world and that's that's what money's done for me it's enhanced my my existence on a lot of different levels and has nothing to do with fast cars fast women or any other nonsense okay so I just want to pass that one on you hey listen up clients look few questions for rowdy up so we asked the algorithm question how many people here trade their own account hold their hands up please just a little money or the family money they don't trade for anybody else Wow cool that's not--that's most to you that's good that's good you know I've noticed I've noticed with traders that some are really good at just trading their own money and they can't trade for anyone else and there's other people the exact opposite like a lot of people they trade for a bank they're there for ten years and they keep some money trading they go I'm so I'm gonna go do this on my own and they fail 90% of the time they fail as soon as I start putting their own money when you're plenty of money it changes the psychology of training completely but it's good it's good psychology when you're trading on money you're gonna learn faster you're gonna learn you're gonna learn more and you're going to be more focus on what you're doing really important focused on what you're doing so I'm a big believer in trading your own money if you want to trade someone else's money just be really careful especially family money and grandma's pension just try to just try to trade your own money and go from there and grow organically you know if you start with $10,000 in account that don't there's nothing wrong with that it gets up to 15 pull a couple thousand out build build build grow organically and don't try to make it happen too fast you got to stand the test of time if you really want to trade for a longer period of time you can't go ballistic too early and what I mean is I know a lot of traders that would trade for nine months and they'd make money every week every week good money money money money money money coming in and then in three days after nine months they give it all back they give it all back and I thought about this over the years I've seen this more than once and I said to my I've said I said well why does this happen there seems to be a self kill and a lot of traders and I can only put it down to the fact that I think one of the one of the things that happens to us as human beings is we really enjoy the challenge of trading and the climb up the hill and that's where the thrill is the thrill is climbing up the hill and if all of a sudden you think you've reached the top of the hill because you may have a bit of money a bunch of money you don't like that your subconscious mind takes over and goes I don't like this let's climb the hill again and you lose everything in just two or three days hold on I'm not I'm back but I want to be I'm back down here and now I'm gonna have fun climbing the hill again so be careful because don't be one of those people it's no good not good no no no okay so but to be aware it's out that if you let it crawl into you it can happen you got to really know yourself really well talk to yourself have a chat get to know yourself really well it's very important okay well now we get on a little bit so that's dedicated time to some Q&A I'm sure there's a there's a few of you can do have questions knock yourself out you can ask me anything yeah all right please okay okay to the mic if you have that porn your sub post one how would you I'm sorry to repeat the question you know I really don't know because it's never happened to me I never had this self kill I'm losing money but I never never beat my and that's another thing another thing guys this is real important to don't beat yourself up when you lose money you're gonna lose money this is one of the keys to losing money alright I had a bunch of traders a few years ago they were beating themselves up because they missed a trade or they have they had a minor loss and I'm like don't beat yourself up it's gonna happen just just just get on with things no especially missing a trade right Aaron yeah out there I miss those 50 ones the other day in the curve not two hours later the curves at 53 are missed those 50 ones and just like night let it go let it go it would always be another opportunity so don't beat yourself up as far as the self kill those those thing I don't know you know I've always just let my subconscious mind do whatever wanted but I know my subconscious mind doesn't doesn't want to kill me no worries mate are there any other questions rather same over prospecting you're talking about how the bills that the phrase they may have a little bit village think back then and I just lost week you know the what's with her crazy committed the Reds in pain the urinals are up in the watts I cut her floor the Reds are on fire out of what do you look aunt brought down the dome rocket I love you that's great um well the markets telling me that that there's been a lot of issues with the first one or two bill month with the LIBOR rate out of the United States a lot of you guys not gonna know what I'm talking about here but he will sorry I'm so the LIBOR rate other states has been has been created creating great incredible volatility in the first two bill months so volatility that I've never seen before it's insane normally the June bills which which you know go off the board on Thursday they would normally for the month of May have a three point range in May they were up twenty down twenty up ten down ten it's insane and it all has to do with the borrowing rates that our banks have to pay to the banks in the United States for short-term cash United States rates are going up there's the United States wants more bang for the buck in this country the banks in this country are having to pay more short-term interest on this country and and it's really in this country so it's really quite interesting because the RBA cash rate would you just sing at one of that percent I don't know if the RBA really wants this but that cash rate that they haven't won that percent is gonna become redundant quite quickly no one's gonna pay attention to anymore doesn't mean you don't mean you know what really important banks is how much they have to pay for the short term cash that's the real interest rate in this country not the RBA cash rate heavy cash rate is it's becoming meaningless very quickly and I've never seen that before there there you go that's something completely new but and as far as the structure of the bill market is concerned I'm just doing what the market tells me I mean you see these June bills go five under the set bills last night you know that that's tied to the LIBOR thing I don't want to be along in the first two bill months only short them I don't want to be long out the back cuz that's the market markets telling you that own a negatives on which is which is something you wouldn't normally do if you thought they were raising interest rates the opposite structurally the bill market the threes intends actors come out get specific with you guys you don't get real specific with you normally there's the structure of our bill marking our yield curve acts a certain way whether it's in a bull market a bear market or in between market right now we're in between market and what they normally do is they said we know interest rates are going up we don't know when so the beam up on the 10-year bonds we don't know it was so long dated stuff because there's no sense in selling three months out six months out because they might not work if I just see here not move so they they have a tendency to steepen things up in anticipation rates going up right then when they start actually raising rates and flip-flops and goes the other way the three year bonds are a funny one the three year bonds and the normal bull marker the strongest thing on the board and a bear market the others the weakest thing on the board but they always predict what's going to happen before it happens if you watch the three year bond contract and its price relationship with the second bill month in the ten years okay I trade something here's a good one for you guys you guys to trade this I had I trade something called them priced spread divergence right I made the term up what it basically basically what it is it's it's a spread relationship that moves in tandem with the market going up and down so if the market makes new high the spreads doing a certain thing I'll give you a perfect example the curve the three years versus the ten years we have a really nice rally on the back of this Italian situation and the curve was coming in as the market rallied the ten years are stronger than three years they should be the more volatile the spreads coming in the spreads coming in the spreads coming in and what I'm waiting for I'm waiting for the market and you don't want it back so often that it makes new highs that it backs off and it makes new highs I'm waiting for the mother then the spreads coming in every time the market makes new highs the spreads lower the price of the spreads lower I'm waiting for a market to make a new high but the spread doesn't make a new low that is priced the virgin's relative to the spread and that's telling you it's time to buy the bloody curve because the strength isn't in the 10 years anymore they're giving up on the 10 years the trend has always been for that spread to make new lows as the market makes new highs now the markets are making new highs this happened last week when three years got back up to 40 their old high was 40 and a half 10 years old high was um Aaron where are you I think continued the 10 year I was like 41 and they could only get up to 38 so the curve before when it was making new highs was in at 50 when 50 sellers this time the markets back up near is all the highs but the curves 51 bid now what's the beauty of that is that if you put that spread on you're gonna make money where the mark goes up or down and that's what I look for I want to put spread relationships on they're gonna work regardless of whether mark goes up or down and these are what the situation's I look for I'm not good at tell me what the markets going up or down I would never clue is that my job my jobs do what the market tells me that's what I do I don't second-guess the market I look for these price relationships to the verge wrote through the overall price the market I'm watching very carefully I'm trading them every day I'm really focused on them and watching them and and I do all little things that I do and then when I see the opportunity and I'll jump in you got that cool that's that the new things that you do this are building good habits for example well you know what that's a really good question I'm glad yes to that it's funny how the brain likes to categorize them organize everything but it also wants a change if you get into a routine your brain will accept it initially but then eventually after period time it's going to get pissed off so what I do if I have a regular way I drive to and from work I'll change that route twice a week I'll go a completely different way I just changed things up instead of just doing the same thing I'll change it all the time my brain likes that so it's really quite strange because because the brain likes to is if I you know we build computers is just just a mirror of the brain and computers can disseminate information much faster than our brains can now and the brain who loves the file and categorize things because it's easier to deal with things like that and we compete a bloke at a cocktail party his name's Bob he's got three kids he's accountant that's what he does for a living and it seems and you can in you go you put that in your bankers you've now categorized Bob Bob's categorized as anybody brain wants a you your psyche likes that okay you see Bob a couple years later you know how the kids he goes they're gone like that divorced he was you soon accountant now I'm a bum you know you just and now you have to recharacterize in your brain these different situations try not it's very difficult but try not to categorize things too much in your brain keep it keep it really open on all levels and changed and change things up change the way you talk change the way you do things remember in unit this is gonna sound like I'm bragging but believe me or not when I was in university I got so bored and going to lectures that I learned from da Vinci used to write things in mirror script and the only way you could read his notes he did this to disguise it but it really didn't workers once you learn how to read it you can see it anyway only way you could read his nuts is by holding it up to a mirror and looking at the mirror and reading it that way so I started taking notes in mirror script because there was a challenge for me there's a challenge for my brain and I wanted to do that I'm challenging my brain all the time I got a really good question did someone ask you what do you do what do you say it's really important how you answer that question what do you do okay I've had a lot of different answers that question over the last 40 years of my life I have to size the person up if I say like trade 90 they bake those spreads of the city view change huh so I don't always say that besides the person up and they decide what I want to say 10 years ago if you ask me what do you do I'd say I'm in the business of losing they're looking at what yes it's a very important that I lose lose II is very important to me and they go they think I'm out of my mind and they usually walk away nowadays if you ask me what do you do I have to think about what I'm doing on a daily basis and the answer that question is what do I do on a daily basis I'm trying to solve problems love being a problem solver I love being challenged by mathematical equations Euclidian geometry - don't go puzzles everything I love expanding my brain I want to learn and learn and learn and by the way I'm still learning how to try it if you think I got all the answers I don't have to be in five years I'll have more answers for you because I'm still learning how to try it it's hard it's not easy but it's fun that's why I keep doing it because it's a fun challenge it's a very much a challenge for me up here but I enjoy the challenge and I you know and a little a farm now with you know 89 steers and 90 acres to look after and I'm doing that I never before did in my life I have to go out the barn and there's a huge broken up there I gotta figure out how to fix that hinge then let the cows are pissed off over here and I got a saw I'm solving problems I'm solving problems continuously then I turn the computer screen on there's another problem I gotta figure out what the markets gonna do next another problem but I trying to solve I wouldn't have it any other way okay no all right I don't I I don't you know I I go I go skiing on really steep mountains that's a pretty good adrenaline rush I got a six year old daughter she's an adrenaline rush I've got I've got you know I got seven children I mean I've got yeah well I got a lot of things happening I do I need adrenaline rush from trading like I used to get Aish I had a little bit of adrenaline rushing here I was totally and nervous when this first started that was his non-farm payrolls out in about ten seconds it's how I get just before non-farm payrolls I'm like oh like this so I get fired up but do I purposely fire myself up by putting on big trades no no I don't do that I don't do that no well maybe I should almost lay the studied finance and not naturally I crafted it to wear sunglasses for failure or it gets all my favorite podcasts what's the one you have with Brendan boots Wow this Australian has like the first stop sausage fun um I have a non-conventional view which is sports trading to me is essentially trading the flow and I'm often met with a question that that is gambling which open baffles me you know sometimes you need to really explain that you just have to look at it this way it's not really what ladies waiting trading my question to you is where do you draw the line between gambling and trading and does it matter where you trade or wagon train well to me gambling's going to a casino or betting on the horses or getting involved in a dice game you know in an alleyway that that's that's gambling trading because I like to think that I'm good at it there's not the same perceived risk for me to me trading is something that I think I'm gonna win at a lot easier than walking to a casino playing blackjack I'm not a Casilla I'm staying at the casino but I won't go to anything neither rooms doesn't it doesn't hold any appeal to me and that's another thing if you once you start trading and you really fall in love with trading all other forms of gambling in the pale by comparison you're not gonna be interested in that it always amazed me I knew some traders in Sydney I still know them and they it didn't matter whether they were trading of futures hundreds of thousands of dollars back and forth each day they go to the track and do the same thing they have a hundred thousand dollars out of Randwick on the weekend they go to casino and then they do you the high roll and they give him a bunch of chips and they'd and and they didn't they didn't make a distinction between trading futures or shares or something that they're kind of getting paid to do is why these guys work at banks they they didn't make a distinguish between that and all other forms of gambling it's semantics and it's psychological is it is listen Futures Trading is glorify gambling it is it's glorified gambling but I guess it's the way you think about it in your head you know yeah I mean I have you up I had $250 in the Sacramento Kings due to win the NBA hopefully they'd beat LeBron but he's the king so I'm watching basketball right now the NBA it's crazy stuff crazy stuff oh I do have some little little stuff and just bear with you right here I was watching the Gulf over the weekend and they were at the Memorial Tournament in Ohio and Jack Nicklaus was there giving a little speech and I wrote down what he said he was because I think Golf is very similar to trading it's the one sport that has a draws a lot of parallels to trading and he said the following he was talking about Hale Irwin was another golfer of Hazira who was just receiving a big prize and he referred he said hey Leland is a great manager of himself and the course the analogy here is that a golf course is like the market when you tee off on the first tee why are you up against well you're up against how are you gonna swing the club what do you think in your head how am I gonna play today it's very internal the course how's the wind blowing how fast are the greens how thick is the rough that's the marketplace you can't you that's what you have to deal with when a professional golfer tees off he has to deal not only with himself at the golf course every time you turn that machine on you have to deal with yourself and you deal with the market very close parallels anyway he said hey learnt a great manager of himself in the course and then he just said this anybody wanted to hear he said know who you are know your game play within yourself I wrote it down because in fact this is just this is trading this is trading you know I mean and he said believe in yourself I don't really said that to you guys believe in yourself and eat another thing he said that I thought was very fascinating he's talking on the TV he said and he's the greatest golfer ever you know he's won dominated the sport during his era and he said I never thought I was the best I never thought I was the best he said they were started thinking that way I was absolutely destined to screw up take a triple bogey lose the tournament not make the cut so I never thought about being the best to me it was always the challenge to try to be the best I thought that was interesting I thought I'd pass it on you guys Bagon is there anything else in that notebook which we should um dig into probably got about ten minutes left oh you were gonna ask me how do I become a large trader and I'm telling you right now it wasn't because I it was the markets have grown I had the exchange send me the open interest for the first six bill months in 1998 it was three hundred and fifty six thousand on the first of June of 1998 first six bill months open interest ten years later June second two thousand eight nine hundred and seventy three thousand it's almost tripled I was gonna get the numbers for last week I didn't get him but I guarantee you it's gone up again my volume grew organically because the market volume increased I didn't force it upon myself to trade larger as the market volume grew my volume grew okay I didn't just decide one day I'm going to double my volume what if I you went up because the marketplace allowed my volume to go up it wasn't predetermined it just happened that way because I'm riding on the coattails of a industry that has grown a shitload my last 40 years there you go would you say it was a factor of that combined with your your risk appetite I'm always interested by these really big traders who can control around a little bit I feel as though a lodge or Megan or a large but a great big factor of their success is their appetite I'm honest I'm completely unfocused on risk risk then he doesn't exist I don't put a trailer on and think well what are the margins and it's gonna be what's my risk where I'm gonna get I've never used a stop in my life I've traded means and means of contracts over the last 40 years I've never ever used a stop there you go wait a while should I you are managing your risk in other ways aren't you like you adjust your spread or yeah yeah you know yeah I'm you know in you lose you win you become it listen you become immune you become immune to winning and losing what are you losing don't matter anymore this doesn't matter anymore I'm telling you I'm repeating myself here but you just focused on the next trail all the time and the chips will fall how the chips fall I told you guys I one time I explained nine months I've never looked at the statement I didn't care about the money who cares the money the money is gonna do whatever the money wants to do I can't change that I just wanna make good treads I just want to focus on the now of trading I know that's hard to do when you're starting up I'm up completely aware of that what I'm talking about is stuff that you have to evolve into over a period of time you just can't say I'm trading now and I'm gonna do it what Rambo says you can't you can't do that it's something you have to evolve into believe me and and it's and it's something that is hard to do if you're not inclined to be that way I was just inclined to be that way no I'm spreading within the 98% of the time I'm spreading within the interest rate structure instead of the yield curve let's just add one more question over that way the teachings of Buddha I'm sorry I love that question you know many times I've been asked that question right stop to put it in a nutshell lifestyle you know like if I wanted if I want to be a really really really rich I had to stay in either Chicago New York or London and I discovered Australia and I fell in love with this people the open spaces and every I'll give you I'll give you a funny little example this as many girls here there's a few girls here I got high in America when I was training in America the Chicago Board of Trade and the girls in Chicago knew if you were a traitor at the Chicago Board of Trade believe me they knew but nonetheless about the second or third question a girl in Chicago would ask you when you're out in your 25 years old roaming around the city and so what do you do what do you do now that's a really polite way of saying how much money you make because they want to target someone who isn't a complete loser if those days I was a bartender so I would say I'm a bartender and just see the reaction the face how long they stay want to talk with me if I said bartender but I knew if I said I'm a trader the Chicago Board of Trade the next question oh do you own your own seat they were smart they knew in Chicago the trading mentality is so huge everybody knows about the markets the Merck the Board of Trade everybody there's not a single person doesn't know about these institutions when I came to Australia at same age I'd go into pub somewhere and I meet a beautiful astraying young lady and she would look at me and she'd ask me almost the exact same question but with completely different meaning she said so you're from Chicago yes so what are you doing what are you doing do you want to go to the beach with me tomorrow we're having a barbecue tomorrow afternoon what are you doing while you're here let's have some fun together you want to come back to my place what are you what are you doing not what do you do so I just found it very refreshing that the Australian is in general and the particular women were not focused on the money element things it's you know that's one of the problems I think they have in the States to be honest with you is I think a lot of people were they're way too focused on money but I came here for lifestyle night I fell in love with with the the beaches and the girls and and the beer was far superior beer now with craft beer these states have made a huge comeback but in those days beer America sucked you know Budweiser Bud Light you gotta be kidding me come here and have a rushes at the Spain Hotel in Manly that's a real beer better wrap this up yeah it's about one YouTube yeah well you need to give me a specific question involving that doesn't or they didn't do it on me they didn't bid it on four or five different traders and the whole taco was supposed to be on the closing of the Sydney futures exchange from floor training to screen trading and they followed me around with the cameras for a while and we became really good friends I became really good friends with the cameraman the producer the director of that series or whether the series of documentary and I said to them when they were doing this I said hey guys listen I don't want you to misrepresenting me and I want full abilities when you make this thing let me have a look at it and I can ask anything out of this that I want they said no worries Jon will do that so they had the final product I looked at it I looked at it I said you know what I use the f-word an awful lot in this and I normally don't use the f-word in my real life that much you heard me use it tonight a couple times but I you know the it made me sound like but they were doing that drama to make it more watchable because people you know they want to watch something that has a bit of excitement to it so they gave you full editing rights and I looked at it and I said alright yeah so if there's anything in there that makes me look bad I I can only blame myself but I'm not too fussed with people think about me in case you didn't know alright let's uh let's leave it there John is gonna head over to the bar with us afterwards so you got to catch have a chat over bear or what have you drink yeah I gotta say John absolutely honor pleasure man yes I'm very fortunate to have John come down here he's come all the way from the Sunshine Coast especially for this well you went out of your way and we definitely appreciate it so thank you find out what y'all doing and it's it's very interesting to me I like my fellow human beings

Channel: Chat With Traders

Views: 88,244

Rating: 4.9072905 out of 5

Keywords: bulls and bears, john moulton trader, john rambo moulton, bulls and bears documentary, futures trader, day trading, swing trading, options trading, futures trading, technical analysis, investing, trading, stocks, equities, wall street, chat with traders, podcast, trading strategies, day trading strategies, momentum trading, money management, risk manegement, the basics of futures markets, legends of trading, trading legend, day trading success, profitable day trading

Id: EkRw6NC0Jew

Length: 72min 54sec (4374 seconds)

Published: Thu Jul 05 2018