316 · The Turning Points That Shaped Great Traders

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Tessa co host of Chat With Traders and this is episode three hundred and sixteen. Over the years on the podcast, there have been hundreds of conversations with traders across different markets, strategies, backgrounds, and while no two paths are the same, certain moments tend to repeat. Not necessarily moments of big wins or dramatic calls, but quieter turning points. The moments where something shifts internally, where progress depends less on the market and more on how the trader evolves.

So this will be a shorter but special episode of Chat with Traders. Now we've had many conversations that could belong in an episode like this, far more than we could ever fit into this collection of excerpts from past conversations centered on the moments when trading finally changed. We'll start with Tom Dante from Wayback, Episode 39.

For Tom, the turning point didn't come from a new strategy. It came after years of knowing what to do, but still not being able to make it work. And when he finally reached out for guidance and The response he got changed everything.

The question that you asked me is was there a point when I, you know, I made that transition and I realized that I couldn't do this anymore. And there was a specific point. And that point was When I wrote to my mentor. that was on the James 16 thread. And I was very, very disgruntled because I just couldn't make any money, you know, trading my PL. And I wrote to him and I said, you know, this strategy is fantastic and I want to thank you for teaching me it. But

Ultimately, I just can't make any money. I just keep trading my PL. And Of all the answers he could have given me at this point, right, to to one of his students, what could he have said? He could have tried to uh help me get my, you know. to get my mojo back to to to feel good about myself again he could have said well you know what keep plugging away or you know don't trade your PL or or anything. He could have said anything positive, but he didn't. He wrote back and he said Wow.

You gave it a go, but I guess you're not cut out to be a trader. And when he said that, I was like, oh no, no, no. You didn't just tell me that. You did not just tell me that. And that really spurred me on because I'm I'm like an ultra competitive person. And that's not always a good thing. Sometimes it can piss people off, but I am really, really competitive. And when somebody told me that I could not do it, that is when.

I was able to perform at the top of my game, absolutely at the top of my game. Lance Breitstein from Episode two hundred and thirty six. All the really great traders I know, they have enormous, enormous, enormous skew in their trading. And so when the opportunity set gets drastically skewed in their favor. When they get those pocket aces, they are not betting linearly. And so what I mean by that, right, is if you have two seven or maybe five ten or s or seven ten and you bet one dollar.

And then if you get Queens, you bet two dollars. Then when you get aces, you bet$3, you will not be a profitable poker player. Why is that? Because so many times you're gonna lose on the mediocre wishy-washy hands and it's not going to offset enough when you get. the rare aces. So What the really, really great traders recognize is on those specific, special, really exceptional hands, you need to bet exponentially.

I want to make those pocket aces matter so, so, so, so much that it outweighs all the variants of everything else. And the way to do that is to bet exponentially. And obviously when you're new, you you might not have the same skew.

that that you can like an experienced person, but that's part of the progression. That realization changes how you see the game. Not every moment deserves action, and progress often comes not from trading more, but from finally knowing when to press and when to wait. In episode two hundred forty nine, Jack Kellogg's journey shows what happens when ambition turns into obsession and what it takes to come back from that.

And I knew how hard I was working in 2019. So I used all that energy. And I I feel like this is what kind of separated me between a lot of other people is that they didn't work as hard because they would didn't grind as hard and put themselves through depression to learn the market in 2019 and and 2018, 2017. Um and I just wanted it so bad that I was willing to do anything and tell anyone to leave me alone. Like I'm focused and I was so zoned in and so much tunnel vision.

I ended up getting super sick in 2020, 2021. 2020 uh got COVID, traded through it. And then towards the end of the year was my worst sickness. I got um mono and strep throat at the same time. I was so beat up, but the market was so hot. This was in December of 20 uh 20. And I just continued to trade through it, ended up really just like putting myself into a habitual burnout where I I had no energy for like two or three years. Like I was so sluggish. I was so irritable.

And but I knew like this is what had to be done to get where I wanted to be. Now this year I've made sure like, hey, if the market's not good. I'm not gonna sit here and trade all day. I'm gonna go I've been go traveling a ton this year. I get um massages weekly. I make sure to get outside and go for a walk every day. I make sure to exercise. This was nothing I was doing. I was just sitting in front of the computer screen. All day, every day. Um, the last couple of years.

And I had to uh reteach myself how to have fun because when people were having fun um the previous three years, I wouldn't even allow myself to have fun because I just wanted to focus on trading and that's the only thing that mattered. That's a lesson many traders learn too late, that intensity can build skill, but without balance, it quietly erodes everything else. Knowing when to push matters. But knowing when to step back might matter even more. Some lessons in trading arrive quickly.

Others take years and extract their price slowly. Peter Brandt, from Episode thirty six, who was featured in one of Jack Schwager's Market Wizards books, understands that process as well as anyone, a trader whose career spans decades. Learning to trade is kind of like uh going to

a university, uh except the mar you don't get to determine your own tuition. The market kinda gets to decide what tuition you're gonna But it is a process and I I think it's a process that that uh takes most people I know who have become good traders somewhere between three and five and seven years to get to the they really feel confident in what they're doing enough to kind of go all in.

and uh take a leap of faith and say this is the way I'm gonna trade and I'm this is what I'm committed to. And it it it takes a lot of mistakes to get to that point. Uh and it's not something I don't think beginner traders uh can do quickly, I think those that that do and come to a conclusion that they really know what they're doing too quickly will end up paying the ultimate price.

That patience to endure the tuition without rushing the conclusion is something most traders underestimate. And it's often the difference between those who last and those who disappear. One of the most subtle and destructive things traders bring into the markets isn't a bad strategy. It's a mindset shaped long before they ever placed a trade. Vincent Brussisi, featured in episode two hundred fifty five, learned this by spending time around people who didn't just trade money, they lived with it.

And what he noticed completely changed how he thought about risk, profits, and losses. It's very interesting because Having been in the movie industry and and being been successful there, I got to be within the circles of people who have wealth and money. And then I'm not talking about just like rich, but wealth, real wealth, the people who sign the checks, the people who have

you know, enormo you know, the type of wealth where they could buy and sell you. And Their mentality is completely different the way they view life than the person who comes in and you know their paycheck to paycheck because when you live that life of paycheck to paycheck and put away a little bit money for a vacation, let's say. Your mentality is that if something good happens, the other shoe's gonna drop.

So you have to take advantage of it. And if something bad happens, then well you're due. It'll turn around eventually. So you take that mentality into trading. And what happens? When you're when you when you lose, when you're losing, you sit there and you hope it turns around. So you hold on to your loser. But when you're winning and and your position's in a profit.

What do you do? You you you want to take profit quickly. Oh no, I never gotten broke taking uh taking a profit. Yeah, you fucking did. Because you all they take profit so fast.

Because the moment they got that profit, well, it the market's going to take it away from them. And they they close the position. But when they're down, well then they leave that position on because it's gotta turn around. So they they take that mentality into trade. Whereas a person with wealth when they're trading and their positions up, they want to press it. Add to it. Keep it going. Cut the loser. I don't want those losers. But keep the keep the winners. Completely opposite mentality.

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Next is Christian Kulamaji, one of the most requested guests on the podcast, in episode 212. an eight figure swing trader, and what stands out isn't just the result, it's how he scaled. Because plenty of traders learn how to make money, but very few learn how to increase the size without changing their behavior or blowing themselves up. Something I have done successfully is I've managed to scale my trading up massively. Like if I double my account.

My risk and my size will double also. It's there's a lag there, but uh it's usually a few months, but it will eventually double too. So I'm always bringing my risk and my size up. In relative, it's the in relative terms and percentage terms, it all stays the same, the position sizes and the percentage risk relative relation to the account.

Um, but I know a lot of people they just take money out of their accounts all the time to put it away in other stuff. Uh, but I've never done that. I only take out money when I really have to, like to pay living expenses or to pay taxes. And other than that, I just use the the the the account to grow my account uh all the time. And I also I'm and I should mention I use margin quite a bit.

I only use it when things are going well, when I deserve to use margin. I think margin is something you have to deserve. It's not a privilege.

Just because it's there doesn't mean you should use it. Unfortunately, a lot of people do use it and they use it the wrong way. They start using margin when things are not, they may use the margin when things are not going well, but that's not how you do it. Scaling isn't about getting more aggressive. It's about keeping the same discipline when the numbers get bigger. That distinction matters.

Jason Shapiro, featured in episode two hundred and eighty six, is one of the most well known contrarian traders. He was also featured in one of Jack Schwiger's Market Wizards books. My fundamental belief is that the market is a discounting mechanism. And that the discounting mechanism is in fact positioning and sentiment rather than price. So I'm a counter trend trader. I don't counter trend things because of price. I counter trend things because of positioning.

So when I see people are way too long something, you know, I'm looking to get short. When I see that participants are way too short something, I'm looking to get long. His turning point wasn't deciding to trade against the crowd. It was realizing why the crowd matters. That shift turned being a contrarian from an opinion into a process. For the next traitor, the shift came in a far harsh way. Patrick Peterson from Episode 260.

He didn't learn his most important lesson from a chart or book. He learned it after losing everything, to the point of living out of his car. Um, the biggest mistake was that I don't uh accept the losses, I let it run and not cut it very fast. So this was my hard learning. And I was saying, so I was also uh three months. uh without any any place to live. So I I live three months and

uh in the car. So I have I have no place to live. I have nothing. So I was homeless. Three months I was completely homeless because I lose everything. I lose I lose all the connections. Uh I have no smartphone to connect and all this stuff. I I lose everything. And I have no family where I can go. So I was completely homeless three months and live in live in in the car. So and and this was this was the this was the big change. Uh where I was thinking about my my how to take

Because I know when I t when I don't take the loss uh very fast, uh to to cut the losses very fast, I remember, hey, maybe you get homeless if you do don't do this. And this was my biggest lesson. That experience rewired how he trades. Cutting losses stopped being a rule. It became survival. And once that lesson is learned the hard way, it's one you never forget.

Lucas Frolick from Episode two hundred and fifty nine has been known for extraordinary returns, the kind that attract attention, admiration, and scrutiny. On social media many know him as the short bear. When asked what actually changed his trading, the moment things truly shifted, his answer wasn't what most people expect.

I think trading is so complicated for people to get into or specifically shift from one space to a two trading because it's such a delayed game. So it's it's very much delayed gratification. You the work that you did yesterday on your review, you might not feel that impact until two months from now.

And by then you will forget that it was that work that actually made it happen. So it's the sum of all the work you you did last year that's gonna add up this year almost. So I think that's a that's a major thing. And and that's really what shifted my training from unprofitable to profitable as well.

It was that understanding that I need to run my trading like a business. So how would a business react? Is the business going to show up at any time of the day, just do random business with other partners they don't know and just sell paper even though they're selling cars or something?

They will stick to what they know, they will show up at a specific time to do so. They are prepared. They know what they're doing and they have to reconcile everything at the end of the day, end of the month, whatever, look at the numbers and and formulate new strategies based on that. So it's um so much different than what it is portrayed uh as in general. What makes this moment easy to miss is that nothing dramatic happens when it occurs.

There's no breakout day, no sudden confidence, no signal that says, This is working now. The shift is internal, a decision to keep showing up long before the results justify it. Most traders quit in that gap. For a lot of traders, the market doesn't break them technically. It breaks them emotionally. Every tick feels personal. Every drawdown feels existential. For John Moulton, who is also affectionately called Rambo by traders.

In episode 163, the turning point didn't come from a new setup or a new market. It came when he stopped trading money and started trading the market. 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 after a period of time that it wasn't so important. Then I got to a point where I said, actually, if I can completely divorce myself from money, I'm gonna be a much better trader. I know it's hard to do.

But I'm telling you now, if you can f if you can get away from the money aspect of trading and just focus on the market and making good trades, you'll have l you'll be distracted by less things. There you go. I mean I I just

I'm at a point now and I have been for about fifteen, twenty years, where I just don't care about the money. I I get a monthly statement now, I'll look at a monthly chart of where my equity's been, and that's it. I don't look at daily statements, I look at I'm focused on my on my position and the trades I want to make. This is one of the hardest shifts a trader can make.

Because when money stops being the focus, something else takes its place. Clarity. No more scoreboard watching, no more emotional swings tied to PL, just the work, just the trade. And finally, Sunny Harris from Episode two hundred fifty, She thought she was doing the responsible thing, retire early, hand her money to professionals, and let them manage it.

And I got an opportunity to move down to San Diego and join a company that was tiny little company of three guys. And they wanted me to turn it into a business. So I worked with them and we did Uh machine and device independent computer graphics. So I did that for eight years and then I decided to sell out my part of the business and retire. So when I was thirty, I retired and I got a sizable amount of money.

And I did what I thought was the smart thing. I gave it to investors to money managers to manage for me. And they lost$75,000 in three weeks. And I thought, well, I can do that poorly on my own. I'll take it back. And I started learning to invest and trade on my own. And there you have it. That's our collection for this episode. These stories reveal a common thread. Progress doesn't stop. It evolves. Not because the market changed, but because the trader was willing to.

We hope you enjoyed this and please revisit the collection of 300 plus episodes. Thanks for listening to Chat with Traders and tune in for more guests coming to you. You've reached the end of this episode of Chat with Traders, but rest assured there are more episodes.