The World's BEST Trader Reveals the 10 Commandments To Profitable Live Trading

made $4.7 million. USA Today wrote an article about I was the biggest trader of S&P futures in the country. When you're trading, there is no practice day. It's game day every day. This

guy was the world's best trader. Welcoming back Lewis Orcelino. If people are being honest with themselves, they could sit down and say why they're not profitable. I could show a P&L 20 years of never having a losing year, maybe a dozen losing months. I was never swinging for the fences every day. I was swinging for the I was talking to my exartner the other day. He said that with AI,

every day. I was swinging for the I was talking to my exartner the other day. He said that with AI, what used to cost him $200,000 a year to gather all his information, come up with his trading signals is now costing him $5,000 cuz he can automate all this. This AI is kind of exciting cuz it's going to make more millionaires than you could ever think about. But Lewis Borcelino

ran the Chicago trading pits for the S&P having the largest portion of volume than anyone else on earth. All the biggest orders ran through Lewis. There's no such thing as a bad trading program.

earth. All the biggest orders ran through Lewis. There's no such thing as a bad trading program.

you know that you can if you have a good trading program, it may go against you for a while and then maybe it'll turn around, but you got to have enough cash to be able to to survive that survive that draw down, right? You want to be where the action's at. You want to be where the volatility

is at. You want to be where the where there's the most order flow. The worst thing to do. And in

is at. You want to be where the where there's the most order flow. The worst thing to do. And in

this episode, Lewis shares the exact principles to profitable trading. Exactly what he looks for to identify potential and what it takes to be a profitable full-time trader. Markets will humble you, right? So you you think uh you make money every day for a month, you can't do no wrong. What

you, right? So you you think uh you make money every day for a month, you can't do no wrong. What

happens is that a lot of traders their careers became shortened or became difficult because all this and more in this special episode with a true trading legend, Lewis Boral.

Welcome everyone back to the words of wisdom podcast. We are back once again and still the number one trading podcast in the world and the fastest growing thanks to all of you and our incredible guests. We're on our second US tour of the year and obviously our tours are thanks to our

incredible guests. We're on our second US tour of the year and obviously our tours are thanks to our incredible sponsors, Trade Zella, the number one trading and journal in the space and back testing tool allin-one. So, huge thank you to them. But our incredible guests, for the first time

tool allin-one. So, huge thank you to them. But our incredible guests, for the first time in a very long time, we have a guest returning to the show. And really, you know, I'm super super excited for this. And there's only one person to kick off our first part two in a very long time.

He is known as one of the greatest traders of all time, the largest trader in the S&P trading pit in Chicago. You already know who it is. It's the one and only Lewis Borcelina. Lewis, thanks for coming

Chicago. You already know who it is. It's the one and only Lewis Borcelina. Lewis, thanks for coming back. Thanks for having me. It's my absolute pleasure. Yeah, it was it was fun and we had

back. Thanks for having me. It's my absolute pleasure. Yeah, it was it was fun and we had such a huge impact last time. Uh, you know, the trailer I remember still to this day is pinned on my my Instagram page cuz it was just so amazing. I think we did over a million views just on that trailer. Oh, really? Let alone the episode. But to start things off, as I said, this is a part two.

trailer. Oh, really? Let alone the episode. But to start things off, as I said, this is a part two.

So I was always wondering about like what are we going to go into? How do we start it? So we had an incredible comment on our last podcast, a guy called Tom Hogard, who is a a very wellrespected trader of today and has a really famous book, The Best Loser Wins. And he commented on our episode,

and I'll just read it out to you. I I'll read most of it uh of what's relevant. I would love to hear your thoughts, but it's and really less so about your thoughts, more so just to show the impact that you actually had in your career and even to this day. And he said, "Dear Riz," and it'll be on screen for everyone, but dear Riz, I think a thank you would be an understatement. You deserve

a massive applause for bringing this interview to life. I can't begin to describe how important this podcast is for the world of trading. For traders like me who every day show up to hustle up for a dollar or two, Lewis Borcelino was a trader that I tried to study when I started trading 26 years ago. There was not much information available like there is today. What I would have given

ago. There was not much information available like there is today. What I would have given for this information almost three decades ago is significant and it's still still like today. It

was the fewest who made it like Lewis Borcelino who made it. I don't believe we will study this podcast in the years to come trying to figure out what his strategy was. We will still study this podcast in the years to come to figure out who he was, what his belief system was, what his inner dialogue was, and how he handled setbacks. You've created an interview of lasting legacy, and

I'm truly grateful for it. Thank you, Tom. That's it's nice to hear. All right. Exactly. And yeah,

the reason I bring that up is just to really showcase, you know, we did a podcast last year, right? And it's had such an impact for the traders today. But it just showcases how much of a massive

right? And it's had such an impact for the traders today. But it just showcases how much of a massive trader you were cuz bear in mind back then there wasn't really social media, right? Uh which

connected the whole world in this way. But yet almost three decades ago, Tom Hogard knew exactly who you were, wanted to study you to be able to, you know, elevate his trading. And it really just shows the impact you had. Well, you know, it's funny because uh no one realizes when you're doing what you're doing, right? Um how interested people were, right? I kind of figured out when um I got a

call from um Ron and Sana, right? And so he worked for uh CNBC and he wanted he he called me up and he said, "Hey, can do me a favor? Would you please do an interview um this Friday on the money supply when it comes out or unemployment number?" And I said, "Why me?" And he goes, "Well, I can't get

anybody to do an interview. you're the only name I really knew and everybody always talks about how you're the largest trader in the S&P pit. I said, "Why why isn't anybody else going to do this?" And

they go, "Well, they're all worried about the FBI investigation from uh the early uh '9s, right?"

And I was like, "Well, I'm not worried about that. We're not killing people here. We're not stealing any money." Uh I said, "I'll do the interview." And so then um I started doing the interview once

any money." Uh I said, "I'll do the interview." And so then um I started doing the interview once a week and then within you know that that kind of coincided with me writing my book and then we um started a um we started a a a website called teachrade.com right and I became so fascinated

with the internet I mean literally I was looking at the internet and I'm going you know within 6 months we had 20,000 people registered on the on this site and what I did was I put it together to be shorten the learning curve, right? I wanted to shorten the learning curve for, you know, would be

traders. And I kind of, you know, you remember the old saying in in um uh in the US it was everyone

traders. And I kind of, you know, you remember the old saying in in um uh in the US it was everyone wants to be like Mike, right? So, Michael Jordan. And so that's like I was going everybody wants to be a day trader. Everybody wants to be a trader. And then so many people I ran into, you know, doing uh the money show or doing anything in and any sort of uh trading environment and everybody

wanted to be like the day traders. They all wanted to, you know, you know, in Chicago Mhm. Um I think there were 6,000 traders and they were all in their 20s and they're all driving around in Porsches and Mercedes and have second houses and so on. And so I think in Chicago we saw that how the futures market grew up, right? When I first went there, it was like a a club. I mean,

literally, you know, they had um pork belly, cattle, uh wheat, but then the financial futures were born. You know, you had all the in the currencies, the euro dollars and so on and so

were born. You know, you had all the in the currencies, the euro dollars and so on and so forth. So, in Chicago in the 80s and 90s, um you know, every single girl wanted to marry uh doctors

forth. So, in Chicago in the 80s and 90s, um you know, every single girl wanted to marry uh doctors and lawyers. Not anymore. They wanted to marry traders, right? So um uh we used to joke they used

and lawyers. Not anymore. They wanted to marry traders, right? So um uh we used to joke they used to come down to the floor either for you know to get their degree or get their MRS degree right but uh yeah I mean it I saw that explosion and that's why I did the website and what we did with the

website we literally did uh a website to you know I had the ten commandments of trading right and then we had introduction to technical analysis and then we had um I I created a psychological profile for, hey, take this quiz and see if you have this the psychology of being a good trader, right? Literally, it wasn't really about the psychology of being a good trader. It was about,

right? Literally, it wasn't really about the psychology of being a good trader. It was about, can I get all your information? Who are you? Where did you come from? How much money you make? What

school did you go to? And we were we're creating, you know, a database of people, right? Um,

but it tell you how far ahead of we were really. Yeah. I mean we were way ahead of the time because um I didn't even realize how you know uh important that information was the database of traders right and uh we were looking at it and the thing that fascinated me when I when I looked at the web

trend report was we were getting people from 19 different countries and this is 1996 my the first website that I built it cost $150,000 you could do the same website now you know for free so true basically So, we were um we were kind of ahead of our time. And what I would I I met this

gentleman who uh um well, he had a computer science major, but he worked for Baker's, right? So, he was in the oil business and um he had developed some trading programs and he said,

right? So, he was in the oil business and um he had developed some trading programs and he said, "Look, if if um" and I don't know if I we talked about this last time, but he said, "If you trade my trading program, I'll take care of your website and all your stuff and anything you need." And um

so he had this trading program. It was based on uh the open and uh the five-minute close. So if the market closed above the five minute uh close and back then we had an opening range like so it was uh 30 to 60. So any orders filled within 30 and 60 were okay. So if we uh we uh we closed above

the 5m minute range then it was going to be a bullish day. Yeah. So, we would put a buy on and we would put a stop in at um 600 points below that entry point and then we had a target of a,000 points on the up and in about 6 months we made about $2 million with that with that program.

Really? Yeah. And then one day it just stopped working. Just classic program, right? And and so um we were you know we were doing that and then you know we were looking at um uh when I was looking at I was I was looking at him and I said you know all these traders all these people that are on our website they have to keep going back and forth to the website right I said well what

if it just popped up like what if you could just pop it up he go oh yeah there's this new language out there called Java he goes uh I can write that program in 48 hours he had a program that when we so what we were doing is we were literally typing ing in market updates all day long

uh for um for the Nikkei for the S&PS bonds and and so on, right? And um we were in the what how we decided to move further into doing more updates was um when I went to the the web trend report, I'm going well, let's see where everybody's going. So you you know how a web trend report works,

right? You people go in there and say, well, are they going on our technical analysis? Yeah. Okay.

right? You people go in there and say, well, are they going on our technical analysis? Yeah. Okay.

So many people would go there. How much time did they spend there? Are they going the psychological profile? How many go there? Are they going to the ten commandments? So we were looking what

profile? How many go there? Are they going to the ten commandments? So we were looking what everywhere was going and where everybody was going was our morning comment, our mid-after afternoon comment and our closing comment. Right? So that's telling me that people human nature is they rather hear what the expert has to say than do the work themselves. Right? And we were literally trying

to to you know shorten the learning curve. people wanted to do this for a living, right? And so then when we saw that, we just started updating it uh home 15 20 times a day. And then when we had the ability that you could just stay on the um on the website and just, you know, leave it minimized and

it would pop up, right? So we're doing we were doing push information to in in 1997 96 we were pushing information out to people and um that took our our um website usage to 6,000 traders using it for six hours a day. Wow. Right. And so we were still way ahead of our time because I was

then going to FCMs and saying, "Hey, why don't you sponsor this pop-up window?" Mhm. Right. So I go, I've got all these I got all these traders. They're on it for 6,000 a day. there, you know, 6,000 uh 6 hours a day. If you guys, you know, and and you know, in this business, unfortunately, you

know that the average uh retail trader lasts about 6 months, right? It's still true today. Hey guys,

before we get into this incredible episode, I want to say a massive thank you for all of your support so far on both Words of Wisdom and Chart Fanatics. We have grown immensely and are still the fastest growing channels in the trading industry. Now, a way to get back to every single one of you.

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though? you really reflect, think about it as you say, you're ahead of your time because even that

though? you really reflect, think about it as you say, you're ahead of your time because even that what you just mentioned there is like the original podcast sponsorship if anything, right? Um but

yeah, like you're ahead of your time, but as we've talked about even in the previous uh podcast, we even talked about what the the profitable traders do even as well like follow the money flow. That

same principle is the same today. Why do you feel like even though technology has changed and access has changed and all of these changes have taken place yet the statistics for success in trading or failure has remained the exact same pretty much. You know, I think that um you know, trading is one of those uh industries that people look at and it was funny because you know, in ' 87 when

I made the $4 million and I was written up in USA Today, I had everybody calling me up saying, "Hey, with your money and my brains, right, we can make more money." And I'm thinking, well, what's wrong with my brain? Right? So I I think I think the problem or not the problem I think the way uh when successful traders are um given recognition or people become famous for being traders um I think

they kind of look at us sometimes and say well if that guy could do it I can do it right so and and and it's and when you look at traders there they're definitely people have done it for a long time definitely have a different personality type right number one you have to be able to deal with

loss you have to be able to deal rejection. You're not always right, you know, and uh a lot of people when they start trading, if uh you know, like I said before, if they had three the guys that I was sponsoring, I always knew it would take at least a year to actually get the the better traders or if

they were going to succeed. Mhm. So, um and I just think it's the the nature of that person, right?

Because there's some people that just imagine if you made uh you know, you went five days in a row and you weren't profitable. I mean, would you freeze? would you then say look I've lost this I can't do this so you got to have a short memory and you got to have an inter like an a strong uh composition that says hey you know this is part of the game you can't always have winners right let's

learn from our let's learn from our losers let's learn from our mistakes um and I think that that takes uh that takes a different personality type like imagine if if you went to work all week and and your the guy who employed you said Yeah, you did a good job this week, but um I can't pay you, right? How long would you do that job, right? Is that And that's the same thing with trading,

right? How long would you do that job, right? Is that And that's the same thing with trading, right? You you could go two weeks, three weeks, a month and not make money. And then, you know,

right? You you could go two weeks, three weeks, a month and not make money. And then, you know, if you have a lifestyle and you got your presence, you know, you're it's a lot of outside pressure, right? Talking of that sponsorship, as you mentioned, you would train traders and sort of try

right? Talking of that sponsorship, as you mentioned, you would train traders and sort of try and identify the right traits for who's going to be there long term. And one thing you mentioned, I believe even in the last podcast is you would try and look at professional uh sports or people who have really played at a very high level in terms of sports. Why is that? What was the correlation

you were looking at there? Well, so you know, I'll leave I'll leave the long-term trading and market trends to the analysts, right? And uh what we were doing is we were just taking advantage of market movement, right? And so if you were inside the pit, there were different uh traders or different

movement, right? And so if you were inside the pit, there were different uh traders or different uh signals that you got from the people that were filling orders and then the bigger traders, right?

So you had to be able to to interpret your, you know, market flow, uh order flow, um where where the pit was sitting, was it long, was it short, and then be able to take advantage of um and in seconds be able to take advantage of that. Um, so the way you listen, the way we kind of looked

at it is that, you know, um, you don't have to be very cerebral when you were standing in the pit.

I mean, you had to take in a lot of information, but you had to be able to react fast. And if you can react fast, then you can train yourself. Then it just becomes repetitive. Hey, I saw this guy buying. I have to do this. Boom, boom, boom. The market moved up five ticks. I'm going to take my

buying. I have to do this. Boom, boom, boom. The market moved up five ticks. I'm going to take my profit, get out, go to the next trade. Right? And I think what happens a lot of times um when you're getting and out of day trading and scalping like that, what we call scalping, um you know, I I I

said it last time, the quickest way to turn a day trader into a position trader is let the market go against them. Because when the market goes against them, it's so unnatural to say, "All right,

against them. Because when the market goes against them, it's so unnatural to say, "All right, I'm going to sell this and get out." Yeah. And take a loss. Right. And then if you take a bunch of little losses in a row, is that affecting your psyche? Is that affecting your ability? Right? I I

I'd said last time there were times where I didn't make money for four or five days in a row and I wake up in the middle of the night, you know, in a cold sweat saying, "I've lost it." Right? And

um but you know, you have to go back and just you got to stay grounded. I mean, literally, you have to do your work. You have to do your research. You have to stay sharp on your game. um

like a I keep referring to last time, but I didn't have any uh bad uh habits. You know, I I wasn't a drinker. I didn't do drugs. You know, Monday through Friday was my time to work and you know,

a drinker. I didn't do drugs. You know, Monday through Friday was my time to work and you know, on the weekends it was my time to party. But my my point is is that you have to if you're going to be a trader. Uh now there's so much information like you know uh in 1987 in the crash I was sitting in

a trader. Uh now there's so much information like you know uh in 1987 in the crash I was sitting in uh in in the office with Jack Sander who was the chairman of the exchange and I said look I now get a check for like 2 million I have $4 million in my trading account and he looked at me and said

uh I can't get you any money right now we can't make our margin calls and I'm waiting for a call from Alen Greenspan. So while I was sitting there, Alan Greenspan called, he put it on speaker and he goes, "Jack, what's going on at the exchange?" He said, "Well, Jack, you know, Allan, um, uh, you know, having trouble making margin calls." He goes, "Don't worry, the Feds are going

to loosen up money or get." So, I'm thinking to myself, "They're going to loosen up money.

That means bonds are going down. They're going to flood money into the money supply." And I'm like, I'm not thinking like I can get a check for 2 million anymore. I'm thinking, how do I get short, right? I want to get short short. And there was no electronic trading back then. It was just starting

right? I want to get short short. And there was no electronic trading back then. It was just starting you know uh and access. So now and you know when I first started trading you know you talk about the internet and talk about u news the news cycles they were six you know they were seven eight hours

long news cycles. Now you had you know it's it was you know democratization of information. There's

nothing that goes on in the world that doesn't you know can't get to your phone within seconds right?

So all those things are um made made trading if you're going to be a a scalper or someone who's going to take advantage of uh these gigantic market movements that's been going on, right? And

then look at all the products that are out there. You know, you've got more derivatives. You got now you got this whole crypto um opened up. Yeah. And that that's opened up and now they have futures on crypto. So the whole derivative market um now they have these buy binary options where you can just

crypto. So the whole derivative market um now they have these buy binary options where you can just literally just bet the market's going to close higher or lower. That's it. Right. Um and I think uh it's it's it's funny too because I was reading an article last week about um u bankruptcies for

kids in their 20s and couple things that have done it to them. Trading. Mhm. Gambling. Yeah. Right.

I think there's 14 billion dollars a year now gambled on these on sports in the United States and all of you know all these young kids um young kids all all the kids in their 20s and 30s they're they're all you know properstors you know so I and I think that a lot of time people conflate

gambling with trading and they're nothing alike right a you know a gambler is a gambler you might be betting odds or whatever but you don't control your destiny, right? In trading, the markets move, but you can control your destiny as far as how how do I approach it, right? Um, so, you know,

like I said, a lot of a lot of studying, getting your charts. Um, now with with AI, I was I was talking to my exartner the other day. He's still in the trading industry. He said that with AI, what used to cost him 200,000 a year to gather all his information, come up with his trading signals

is now costing him $5,000 because he can automate all this. Mhm. So, um you know, there's uh there's the the markets have certainly changed. You know, with us, we had all the information. We had, you know, well, we didn't have the information. We had um the end result from the information. So yeah,

you know, if I was someone in there putting a buy, there was a reason why I was putting a buy in, right? And whether that was inside information or whether it was the result of my technical

right? And whether that was inside information or whether it was the result of my technical analysis, right? So, and so like when it came to that speed and being able to execute and

analysis, right? So, and so like when it came to that speed and being able to execute and take that information and be able to do it at speed, did you just find that the people who had done sports were like kind of had this innate skill they had already developed to move at speed?

Yes. Because it has to be repetitive, right? So if I if you know the athletes knew how to train their mind and their body I mean their body right if I do this five times a day I do this 10 times a day this will make the end product in a game right and I used to talk about how

um with athletes there's there's practice practice practice practice but game day the speed is game day speed right when you're trading there is no practice day it's game day every day So I think that what happened with the because it was such a physical thing back then, you got to remember

we did our homework. Yeah. Then we went into the pit, everybody else was doing their homework and everybody else had their reason for buying and sell. You had to take all that physical sort of input that you were getting from the orders that were entering the pit, the the locals who were speculating on where the market was going and how those all interact for you to, you know,

come up with a a decision, right, to buy or sell. But literally within a day, and you can see today, there's all these little micro uh uh micro moves within within the whole day, right? So, you know, we were we were back then we would I would trade 2,000 contracts. Wow. In a day. And, you know,

sometimes I was making uh, you know, two or three ticks on them or sometimes I was making, you know, 100 points on them. But getting in and out and not freezing and the ability to keep my body trained.

And so, that process is the same thing as a as an athlete. You know, if I'm going to I'm going to be a a tennis player, I'm going to hit so many balls a day. I'm going to do this. I'm going to do that.

you know, if I see uh my opponent with a backhand, I know the ball's coming across, right? Yeah. So,

my point is when we were in the pit, you could see the setups all day long, right? And when you see those setups, you had to be able to act. And when you were wrong, you had to get out. And what

I found was the people that were um professional or or college athletes that already trained their body, they were able to do the same thing with trading. I got you. Right. Because you didn't have to be a genius. Mhm. You know, I I said that you didn't have to be a rocket scientist to be a pin trader back in the ' 90s and ' 80s and '90s, right? Let's take a break for a minute there,

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challenges. Link is in the description below. Now, let's get back to the episode. So, going back off

challenges. Link is in the description below. Now, let's get back to the episode. So, going back off the back of that, I think it's a perfect way to segment into it like what Tom Hogard had mentioned in terms of his inner dialogue. Like, what did that look like for you, you know, coming to the floor each day, especially when you're in sort of that that peak flow of your career? What did

that look like, you know, coming into the floor? What would your sort of inner dialogue be like, you know, before you start that market, that chaos, if you will, of the of the uh the pits back then? Yeah. Well, so um I always kind of approached the markets a little differently

back then? Yeah. Well, so um I always kind of approached the markets a little differently only because the way I I um my introduction to the the markets was that I was an order filler, right?

So, when I first put my deck together and I first started looking at what an orderflow deck looked like and I would noticed uh you know there's five different firms and um so five different firms and there was 20 different orders that came from those five different firms and they're all at the same price or within 10 cents of each other. What made those people think that this is where

it's going to buy? Right? And same thing with the sells or where they put their buy stops. when you

see buy stops and sell stops. When you see these girrations in the market, it's because there's a lot of people that are where those buy stops and sell stops are, right? And um and people are putting their stops there because of their research. Okay. So, I kind of approached it from a different point of view. Once I saw that, I started learning about technical analysis and

more of the m the the market psychology of traders back then, right? And you know there was two types of traders, right? There were uh institutional traders that were probably using the markets or the the S&P. They were growing up and learning how to use the S&P pit to hedge their positions in cash because that's what derivatives should be, right? And then there were the speculators. So

trying to um discern from who are the speculators and who are the uh hedgers was another thing that you had to sit down with. So what I did is that I like I told you before I I I studied the market from three different sort of disciplines. Mh. So I had a I had someone who was a GAN expert. So we

did nothing. All he did was he was a GAN chartist had the GAN numbers, the GAN oscillators and so on. And I had somebody who did nothing but uh reversals, right? Where he thought the market

on. And I had somebody who did nothing but uh reversals, right? Where he thought the market were tops and bottom reversals. And then I had an intraday trader, right? So I would take all that information from these PE from them, right? And their numbers are right. I you know there's no such thing as a bad trading program. You know that you just run out of time, right? So you get if you

have a good trading program, it may go against you for a while and then maybe'll it'll turn around, but you got to have enough cash to be able to survive that survive that draw down, right?

So, um, I took all that information and what I was able to do was I could take the points that were pointed out by the three different disciplines and I was able to in real time make decisions based on what we thought. Mhm. And then I saw what was going on in the pit because now this

was real time. market open markets are hitting and so they're forcing the market to either go up or down and they're going to get to the points where we were already identifying as either support or resistance or a reversal or whatever right uh that's what we you know we did and then we started developing like I said we started developing our own trading programs um not based on most mostly

based on technical analysis we we didn't really do a lot of fundamental analysis like uh you know long-term market positions We were just basically daily technical analysis. And so since we had all the information before there were the e- minis, all that information from around the world,

anybody was manifesting itself in that pit, right? and be able to to to take that absorb all that information and make a buy or sell was based on something that you know it wasn't just a it wasn't

it was a um it happened instantaneously but the work behind it was not instantaneous. Yeah. So,

so you'd have to essentially you'd have these levels coming into the pit. When you're in the pit and sort of at the height of that chaos and you're taking in the different emotions and the orders, you're recognizing that flow and then understanding already here's our sort of above price levels that we have mapped out and our lower price. So, when you're seeing that order flow, you

can then just not know ex 100% but have confidence knowing that price should lead to one of these levels depending on the pit. Well, and and besides that, you could feel the emotion, right? I think

I feel sorry for the the screen traders of today, right? Because they can't feel the emotion. They

could see the market spike up. But we heard it. We saw it. We saw the physical, you know, we we we saw that physical energy when that market turned bid and there were no more sellers, you could see the panic in everybody's faces, right? Yeah. I I I the screen traders of today uh are, you know, unless they're sitting in a room with a bunch of guys and bunch of girls and people and,

you know, trying to help each other or whatever, it's such a um I think it's a a disadvantage. Now,

some screen traders believe it's an advantage because they're not being suckered by all the noise in other people, right? It's more of a individual thing. It's always been an individual thing, but um uh you know, I've done some screen trading and it's it's it's different than when we were in the pit, right? Cool. Have you ever seen order flow like level two data in terms of the

equivalent I guess now of trying to recognize and see the orders? Well, the only time that I could ever give you something that would might have been uh you know, similar is that when we started the I started the first NASDAQ stock trading room in Chicago, right? So we had the level two machine uh where when we originally did it um we had the prop traders inside that the were trading NASDAQ

stocks they're actually doing what was called the so bandits which are small order execution system right and so what they were doing back then um when we first started the company we had somebody who who had a series 7 license sitting in front of the room and they would you know buy me a thousand shares of Microsoft and they would yell it out and the guy they have to type it in,

right? And then um you know, sell me a thousand shares. So there was a lot of um and then they

right? And then um you know, sell me a thousand shares. So there was a lot of um and then they were looking at things like Instinet and they were looking at the level two machines and they were looking at there was only three ECN's back then too, right? And um so they were looking at the island and they were looking at the different ECNs. Uh until archipelago came along, there were

no uh where they were all joined together, right? So after the New York Stock Exchange board bought uh Archipelago or they merged um then that's when all the ECN's became connected. Well literally it came before when Archipelago was bought by Goldman and Goldman bought the Pacific Stock Exchange. Archipelago became the first ECN that was also an exchange. Right. So that's the only

Exchange. Archipelago became the first ECN that was also an exchange. Right. So that's the only thing that I ever saw similar to it was when they were doing the because the SOS uh uh bandits were made for retail traders. Oh really? It came out in 1987 in the crash. Mhm. Uh NASDAQ traders couldn't

get their orders out for a week. They had no idea where their account was after the 87. Right. So

the the the NASDAQ came up with what they called that small order so bandits, which is small order execution system. So what would happen is if I was a a retail trader, I could sew a market maker

execution system. So what would happen is if I was a a retail trader, I could sew a market maker and if I hit him before he pulled his order, he had to give me a thousand shares. Wow. Right. So

what happened back then is all these small all these banded rooms started um uh popping up all over the country. Right. And so now the the market makers were being picked off by retailer traders and you had some guys making, you know, several million dollars a year by picking off market

makers. Mhm. So um that's the only time I ever saw where you could literally get the same level of uh

makers. Mhm. So um that's the only time I ever saw where you could literally get the same level of uh um emotion. Yeah. And because you could literally look at at them because you know when you had all

um emotion. Yeah. And because you could literally look at at them because you know when you had all the five market makers start pulling their orders you know their offers or their bids you would see them do they you know disappear you know and uh but that's the only time I ever really saw that where it uh was similar to the I understand. Yeah. You know one thing that's stood out to me when

interviewing other floor traders and pit traders is that a lot of them would end up trading pits like in different locations. you know, some, you know, going from, say, the US to Europe, some even from Europe to to Asia. Did you ever find yourself trading in different pits as well, or was it just Chicago? The only the only one I ever decided that I I might have done, I was going to go to

Chicago? The only the only one I ever decided that I I might have done, I was going to go to the ComX. Mhm. I had bought a seat there just cuz I wanted to come to New York and hang out. Really?

the ComX. Mhm. I had bought a seat there just cuz I wanted to come to New York and hang out. Really?

I never actually traded there, but uh I knew some guys that were traders down there, but uh um look, if you're going to be a pitch trader, you want to be where the action's at. Yeah. the volatility is at. You want to be where the where there's the most order flow. The worst thing you can do is

at. You want to be where the where there's the most order flow. The worst thing you can do is get caught in a market where there's no volatility or no liquidity. Mhm. Well, that's probably still sound advice to this day because a lot of people try and trade say CFD, the euro, right? Forex

euro and the euro has that that lack of liquidity. It just ranges and yet they still do it. And I'm

partially one of those sort of people, you know, and uh you can feel again that lack of liquidity, that lack of volatility, and you know, what that ends up doing to your trades and therefore your psychology. Um, you know, so again, it's so interesting as I say to find all these reoccurring

your psychology. Um, you know, so again, it's so interesting as I say to find all these reoccurring themes that have not shifted over this time period because it just shows you that the the foundations and I guess we can go to the commandments in one sense. So we'd love to I'd love to be able to go through it and then be able to say okay well these have complete relevance to this day. So like

if we go into the ten commandments of trading by Louisis J Borcelino you have number one trade for su success. So trade for success not for money. I guess that one's self-explanatory right? Pretty

su success. So trade for success not for money. I guess that one's self-explanatory right? Pretty

much right. I mean, um, I used to tell people that, you know, I try to buy and sell the market and I I respond to what's going on in in the pit and at the end of the day, if I was good at reading the market, I made a lot of money, right? So, but it wasn't it's hard to separate the two,

but when you're in the pit and you're it's me against you, me against all the other guys in the pit, there's a there's a bit of uh you know, we're going to see who the tough guy is, right? You

know, so the, you know, it is a competition. It's you against the other traders. It's you against the market. It's you against the institutional traders. And so you know individually but if you

the market. It's you against the institutional traders. And so you know individually but if you were what happens is a lot of traders their careers became shortened or became difficult because they kept thinking about the money they made or lost in that trade. Yeah. Right. And if

that's your only source of income or you're trying to be a trader and have your lifestyle it it's hard because uh you know you think about the money you lost versus the money you made. So,

trading scared, you know, it's hard. Yeah. What was your dialogue like though? Say, for example, coming into a new day with you had a really good day the prior prior day. What would your process be? Would it be just the same regardless of what the prior day was like? That's it. We were

process be? Would it be just the same regardless of what the prior day was like? That's it. We were

day traders. Didn't matter what I did yesterday, you know? It's like, uh, hey, what have you done for me lately? Right. And so, like when I left, right? I mean, I could show a P&L of 20 years of never having a losing year. Maybe, you know, in those years a dozen losing months, right? But I

couldn't go to Gold Goldman Sachs and say, "Here, here's what I did for the last 20 years. Tell me

uh pay me a million dollars a year and I'll tell you everything I know." Right? So it when you're you're a trader that's a a total independent trader unless you've made that crossed over and did some fund management right and you look like Tudtor Jones right he you know eventually he he

just became a large fund manager but you know we came from different positions we knew each other but he was always um a floor trader not a floor a a trader that uh traded from upstairs but he was always managing money for other people right? He got started with u um people from the south

that where he was from and so he was always he always had that mentality of managing somebody else's money right so that becomes a a different mindset than you know there you're looking for a return right can I beat the S&P 500 can I give you know 15% right return and so on with leverage

versus when trading your own capital you can push that push that button as far as you can yeah I always had a I always had trouble with uh you know like with you know when they were talking um well why don't you invest in this if we're going to make 7% on our money and I'd be looking at it going I think I'll leave my money in my trading account make 100% on it but I still

had 100% of my my effort right you know the goal is to what I think what Henry Ford said I want to make 1% of 100 people's efforts right but you know and so that's when I started backing traders became good. You know, you know, I once we put them through a process and you know, I was getting

became good. You know, you know, I once we put them through a process and you know, I was getting um I was getting money from other people trading, but I still had to manage that whole process, right? Course I had to recruit the traders, train the traders, um you know, ascertain who was going

right? Course I had to recruit the traders, train the traders, um you know, ascertain who was going to be good and who who was going to be bad. And it was funny. It's like uh uh multi-level marketing.

Yeah. You know, they tell you call everybody. You know, you never know who's going to say yes.

Well, same thing with trading. I I kind of knew the people I recruited to training. Yeah. Um

but I still was surprised because I could have five people I was training and the two people I thought were going to be stars ended up being duds and the other three people that I thought were going to struggle became great. Right. And I I I just wonder sometimes maybe the less cerebral guys are better at trading than the than the guys that go to Harvard and get NBAs.

I think so because obviously they start to over complicate and try and find reasoning for the market's movements versus just as you say acting you know based off the reflection of what the market's doing right I mean look at the end of the day it's hard to I don't care who you are you can't even today I don't care how much AI how many algorithms you have it's hard to pick a top hard

to pick a bottom of course right so the the goal is is to pick a trend and be able to get on the trend with with the institutional people pushing it. So that second commandment then discipline is the one quality that all traders must possess above all others. Yeah. I mean if you lose you

know if you you know what they say you lose your head your ass follows right. So at the end of the day you have to be disciplined and um and you have it's hard to be disciplined when you have a lot of outside distractions. Right? If you can't shut off the outside world and walk into that pit or walk

outside distractions. Right? If you can't shut off the outside world and walk into that pit or walk into your office and shut everybody else out and shut that phone off and not get any information that that's external to what's making you make your trading decisions and and not stick to it,

right? Uh you know, I saw so many people that would get in positions and they would just sit

right? Uh you know, I saw so many people that would get in positions and they would just sit there and says, you know, because they couldn't take that loss. they couldn't take that loss and regroup, right? So, in in in the pit trading days, I was able to regroup whether I had a bad day or

regroup, right? So, in in in the pit trading days, I was able to regroup whether I had a bad day or a good day, but I didn't approach I didn't go into the market and say, "Hey, the market did this yesterday. It's probably going to do the same thing today, right? I mean, maybe it was

this yesterday. It's probably going to do the same thing today, right? I mean, maybe it was in my the back of my mind, but when I walked in, I had a blank sheet. I had our new numbers for the day where our our buy and sell points were and as the market unfolded and I saw the order

flow come into the pit, I was able to look at that and then uh help it reinforce the uh my decisions, right? That the order flow just reinforces the decisions when we were getting long or short,

right? That the order flow just reinforces the decisions when we were getting long or short, right? And this is what I'm saying about screen traders today, right? It's hard for them to

right? And this is what I'm saying about screen traders today, right? It's hard for them to see that order flow, but I'm sure they they're able to look at the market and they see the way uh the dome will move at times. Yeah. That looks like, oh, you know, I've seen this pattern before, right? And that's all trading is is recognizing patterns and jumping on the pattern. Number three,

right? And that's all trading is is recognizing patterns and jumping on the pattern. Number three,

I love because it's so it's not even specific to trading, I would say, but know yourself. Why

is that, you know, number three in terms of the the commandments? Why is know yourself?

because before I told you um I didn't mean to cut you off, but uh everybody has different fear and greed, right? And everybody um when you I I knew a a bunch of good traders that could only trade

greed, right? And everybody um when you I I knew a a bunch of good traders that could only trade one lots and two lots, but they were making three, four, 500,000 a year with very little risk, right?

And so if you don't understand what your propensity for risk is, then it will cloud your judgment. So I saw guys that were very good at trading ones and twos, but if they

your judgment. So I saw guys that were very good at trading ones and twos, but if they kicked it up to a five, they weren't very good anymore because they were thinking to themselves, "Oh, I'm now losing $1,000 on this trade versus 300 on the trade." Right? And so now the money, so this is that whole thing about success, right? The money influences my decision- making.

because I'm not prepared to take that kind of risk, right? And so I I think that that's true of everyone, right? Everyone has different, you know, that that's why there's accountants in the world,

everyone, right? Everyone has different, you know, that that's why there's accountants in the world, right? You know, they're very risk adverse, right? But you need somebody to count your money,

right? You know, they're very risk adverse, right? But you need somebody to count your money, of course, right? I love that. Yeah. Yeah. So, um yeah, you got to know you got to know when you're comfortable when you're not. Mhm. You know, once you can get yourself into that, um the mold of you know, not to say that you can't go from a one lot to a two lot to a five lot to a 100 lot.

That's what I was going to ask in terms do you think people can progress still? Sure. If they

if if um one they don't you know there there's no there's very rarely that you get lucky in trading, right? You might make a mistake and it goes your way. But if you don't, you know, people say to me,

right? You might make a mistake and it goes your way. But if you don't, you know, people say to me, you know, you made a million dollars in 13 seconds once. Well, I was never swinging for the fences every day. I was swinging for the, you know, the the singles, you know, and at the end of the year,

every day. I was swinging for the, you know, the the singles, you know, and at the end of the year, I had a I had a gigantic year, but my point was I was never looking to make that home run. There

were so many guys that I would see ended their career. Yeah. Because they were swinging for the fence every day, right? And then one time they got in into a position they couldn't get out of.

Right. But I don't know if it's still one of my commandments that I used to say, "Thou shalt not shoot their whole wad." Right? So if you're not if you can't get back uh to trade the next day because you were stupid enough to risk everything you had in one trade, then you deserve to be out

of there. That's fair. That's fair. To be fair, it kind of ties on to to the next one perfectly

of there. That's fair. That's fair. To be fair, it kind of ties on to to the next one perfectly in terms of the fourth commandment being lose your ego. Yeah. Yeah. So, uh you know, markets will humble you, right? So, you you think uh you know, you you make money every day for a month,

you know, and and you can't do no wrong. There were days where, you know, before I even wrote the the trade down on my card, it was going my way and and it just kept going, right? And uh and you know it's just like anything else in life you know uh people think that you know you make a couple good

decisions in your life and you think oh you know life is easy right and then you get a catastrophic event that reminds you that uh you know life's not easy and if you if you don't stick to the you know stick to a plan and be able to uh have a um a backup plan then you will you know you're

going to be shortlived in the trading industry for Did you find even in the pit days were there like peaks and troughs meaning that there were highs and lows like consistently throughout that career and even in life like there's always going to be highs and lows and you know those lows catch you off guard if you let the highs get to your head a bit. Yeah. you know, you know, people would would

look at you and say, "Well, man, you know, people outside of the industry, they look at you and say, "Wow, I could never do that or I could do that. I can do that." And and and to us, and and this is true of the traders today, too, the guys that are successful, like I said, people look at you

and go, "Well, you know, if he could do it, you know, and they think it has it might be because they think it might be an intelligence thing. Mhm. It is intelligence, but it is the the physical makeup of that human being. If that person has the propensity and the ability to do all these things,

right, and stay grounded and, you know, not get a big head and do all these different things, then they will last in the trading game, right? It's the it's the people that that, you know, I it's always the person who ends up swinging for the fences, right? and they're doing it because they've got themselves in a bad position because they had a bunch of losing trades, right?

Instead of going back to the drawing board, they got to go, "Oh, no. I you know, I lost, you know, 20,000 this month. You know, I' I've got to make it all back." Right? So, it it's a it's a really um fine balance between your your ego and reality, right? It's true. Because then equally the ego

helps you as well if you allow it to or you you use a small dose of it to be able to push that boundary to elevate the risk when necessary and end up having like you said it's not luck is it's an element of luck in terms of okay you're in the right place right time you executed well and then

that moment created enough volatility for you to get such a huge trade and then maybe there's a little little ego use there but in terms of generally speaking ego in trading and life you know is very detrimental and and they can hold you back a lot. What do they say that luck is when success meets opportunity? That's right. Yeah. Right. Mhm. And and you know it's true. I mean the

fact that I that my mother was the legal secretary who was the biggest gold trader in the country and he gave me a job that was very fortunate for me. Mhm. You know I was able to capitalize on that.

Throughout your life whether you're a trader or not you're going to come the peaks and valleys that you talk about. You're going to make some bad decisions. you're going to make some really bad decisions, right? And you know, it's a cliche, but everybody, it's true, it's not the good decisions

decisions, right? And you know, it's a cliche, but everybody, it's true, it's not the good decisions that really, you know, that that that hurt you. Yeah. It's not coming back from the bad decisions, right? You know, what's the uh alternative? You know, when I left uh when I left Merc,

right? You know, what's the uh alternative? You know, when I left uh when I left Merc, um I started a healthcare company. Oh, really? Right. and I was uh buying nursing homes, okay? And I love the demographics. I put this company together and within um 03 we started

okay? And I love the demographics. I put this company together and within um 03 we started 04 we started the company and we got up to about 2,000 beds. We're doing about 30 million a year in revenue and I love the demographics. Baby boomers retiring, nursing homes, memory care,

all these different things, right? Well, one of the things that that you look at is how do you derisk, right? And because of my, you know, number one, I didn't like partners. Number two, you know,

derisk, right? And because of my, you know, number one, I didn't like partners. Number two, you know, I had a propensity for risk. Yeah. I signed all the loans. I did all this business, right? Uh that

company is probably worth about 65 to 75 million at the time with what we were doing. And then my bank failed. I personally guaranteed all the loans. I had and gotten out all of it. I mean,

bank failed. I personally guaranteed all the loans. I had and gotten out all of it. I mean,

that whole debacle cost me about $50 million. Wow. At 58 years old or 57 years old, right? I'm,

you know, I literally lost about 90% of my net worth except for what I put away in trust. Mhm.

And I was like, what do you do now? So, I had to literally start over again, right? And, you know, I was I was used to a lifestyle. always used to, you know, but if if I would have let that paralyze me, where would I be, right? I had my children, they were still in college. I had, you know,

and what did I do? I found a way to get into something different, right? And I got into the cyber security business. We started out with three employees. We got 100 employees now, right? So,

you learn, you know, you can only move forward, right? You got to learn from your mistakes. You

know, I'm I'm not personally guaranteeing all the loans anymore. That's it, right? Mhm. But you

know, but and that came from making thousands and thousands of mistakes throughout my life because I made a lot of trades. Not all of them were winners, but it didn't stop me from trading.

Exactly. Right. So, anything in life that you know when it it hits you and you think it's over, just you got to get pick yourself up and go. That's it. Well, move forward. Don't know

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is in the description below. Now, let's get back to this episode. That's what I loved about number five on the commandment list being there's no such thing as hoping, wishing, or praying because no doubt I've seen it. I've been there myself where I'm in a trade and I'm like, "Please be this one."

And you even to the point where I'll be like, "If this one hits TP, I'll start praying more often.

I'll know there's a God and I'll know there's, you know, this is real." Um, and obviously that's not fair to do, but you know, it's a it's one that comes up quite a lot. I'm sure you probably saw it a lot when it came to the pits. Well, you know, you you put it straight on. you, you know, and here's what happens. You start making deals with yourself, right? Well, the the market's going

against you going, "All right, well, I think it's going to stop here." Well, well, let me lighten up a little. And what do what do most people do? They add Yeah. They add to the losing position and then they, you know, then the market keeps going against them and they now they've added to a losing position and hoping it's going to turn around and it doesn't and then they puke it out.

They lose more money than they expected because when you put on a trade, you should have a a an idea where your stop loss is going to be. And what do they do? They they violate all the rules because they're hoping they're going to be right. Right. And that's when you see, you know, that's when you see the guys come in with the with the white coats and pull you out of the pit because

you got no money in your account, right? So that's a that's a um that's a reality. That's a reality.

And and taking a loss in anything is the hardest thing to do. It's the hardest thing to do, you know. Um you know, everybody wants to be a winner. What do you feel like makes it easier to take

know. Um you know, everybody wants to be a winner. What do you feel like makes it easier to take a loss if anything? Well, in the trading world, it's that whole idea. This is what it is. Buy low,

sell high, or sell high and buy low. And that generates profits, right? I think what happens is that people get used to generating profits, then when they have to take a loss, they're stubborn because they don't want to see that red uh, you know, the red debit in their account. Yeah. At the

end of the day, they went, you know, so um like I you know, I used to tell people it's like imagine working all week long, right? And then your boss telling you, "I'm not going to pay you this week, right?" That's what trading is like. I could work all week long and not make any money,

right?" That's what trading is like. I could work all week long and not make any money, right? And I got to have the constitution. And I also have to be set up in life to be able to have

right? And I got to have the constitution. And I also have to be set up in life to be able to have that style. So I can either I have enough money saved so that I or I've I'm living a small life

that style. So I can either I have enough money saved so that I or I've I'm living a small life and I can put more resources of my cash towards my trading. Mh. Or I'm going to live a bigger life. That means I'm going to have to I'm gonna have to always be right. Right. And I think a lot

life. That means I'm going to have to I'm gonna have to always be right. Right. And I think a lot of times people get caught up in their lifestyle. Yeah. Right. outside of the pit and uh and and and they see other traders that are more successful than them and you know they want to be like Mike,

right? Yeah. So I think that those things those outside forces play on people's minds and when

right? Yeah. So I think that those things those outside forces play on people's minds and when they plays on people's minds they make bad decisions and everything and and no matter what just not only in trading you'll make bad decisions in everything if you let if you let uh

the wrong influences affect you. Definitely. And commandment number six let your profits run and cut your losses quickly. Uh you know that's very self- advantage. Okay. You know, and when I, like I said, if if if you put a trade in, like when we had that trading u algorithm that we built, um

what we had was uh 600 point stop. Yeah. And a,000 point profit. Yeah. Right. And the only thing I was able to do because I was in the pit and we we put the trades on. Well, now I could see what was going on. And when the nine when I saw that the algorithm was right. Yeah. Well, what do you

mean when I saw the algorithm was right? Well, the market started moving higher, right? But what made the market move higher? Oh my god, look at all this institutional buying coming in, right? And

you could see that in an electronic trading if you had an algorithm that says, hey, there's our ent all all the buys coming in, right? So, I was able to actually enhance that because in that program, we would buy a um a five lot with a stop. Well, when I saw that the market was right and we were

going to reach that thousand point objective Mhm. I just loaded it up, right? And I I I put more than the five lot on. Mhm. And because the market momentum and the the order flow that was coming into the pit was telling us that we were right. So, I was able to get on that. I could I

could take more risk and and write it up. In terms of that, like do you think overall base hits are good, but in terms of having a sizable P&L as a trader, it comes down to identifying those really key moments and being able to size up and sort of really maximize those. They might happen not

very frequently but those are the moments that actually create much of the larger P&L's uh P&L traders P&L essentially like the larger portion of that profit will come from those few trades.

Yeah. When when you look at um like Richard Dennis and the Turtles back then that that was he was a big position trader, right? So he was identifying trends and he would have positions on for months, right? But again he was also trading with other people's money. Yeah. So when he raised a fund

right? But again he was also trading with other people's money. Yeah. So when he raised a fund of 100 million, right, he was very good at what he did. He did have risk, but most of the risk was being, you know, borne by investors. You think that makes it I won't say easier because no doubt there's another element of uh psych psychology that comes into managing other people's money. But

do you think it removes an element of at least the risk side to a degree so that you can purely focus on process and getting that return versus when it's your own capital where you could lose it all and a lot of the time if it is your own capital you're trying to use that money to live as well

and to further your lifestyle. Yeah. So yeah. So, and after 87, um, they USA Today wrote an article about I was the biggest trader of S&P futures in the country. Um, you know, I made 4.7 million and

so on. And so, um, I just said, well, let's just let's start a fund, right? And, um, so I started a

so on. And so, um, I just said, well, let's just let's start a fund, right? And, um, so I started a fund, but in ' 87 after the crash, 88 was dismal. like literally I think in ' 88 I made 100,000 or

150,000 from 4.7 million to 150,000 there was no market val market volatility um after 87 crash and everybody was you know still licking their wounds you know right so um when I put the fund together

my first client uh was I got a call from a guy in New York and he said I'm chic Abdul Abdul Abdul Abdul I don't you know I didn't really know who he was. He worked for Maril Lynch. Oh, really? And he

said, "I have a client who wants to put a million dollars with you." I said, "Okay." He said, "But you can't tell anybody who the client is." I said, "Well, we got confidentiality. We're not going to tell anybody the client is." He goes, "Um, okay. So, the client's client the client's Mark Rich." I

go, "Well, I can't tell anybody who Mark Rich is anybody because I don't know who he is, right?"

Well, you know, Mark Rich ends up being um you know, the famous oil trader who in in the 1970s in the oil embargo when we couldn't buy oil from the Saudis and OPEC, right? You know,

when when I was a kid, gas was 50 cents a gallon. I woke up the next day, it was a $150, right?

So after they that so we it was against um the law the government put into place that you couldn't buy any um oil from uh OPEC. Yeah. Mark Rich was in United States citizen went and set up all his companies in and uh in Switzerland and he was literally buying the oil from OPEC in

South United States. Um eventually he's the guy that was famous uh pardoned by uh Bill Clinton.

Bill Clinton pardoned him and you know he owed like the IRS like $500 million and literally his case is the it took 15 years for the IRS to get through the Swiss laws to actually get to Mark Rich. Wow. Right. But I didn't know who he was. Right. When I started doing some research,

Mark Rich. Wow. Right. But I didn't know who he was. Right. When I started doing some research, oh he's an aluminum trader. He's this and that and so on. And you know, we were we we we raised about three million bucks. All right. And there was no market volatility in ' 88. And then ' 89 there there there wasn't anything. But you know, we made a we made a little bit of money, right? And then

um when the FBI investigation hit the Merc, he pulled his money out because he didn't want anybody to know it was him, right? But my point is, it was hard for me like to trade $3 million of somebody else's money and try to get a return on it was so distracting and I had so much

um that cost me uh a lot of internal stress when they lost money. Mhm. Because it wasn't my money, it was their money and they were counting on me. Right. So early in my life in my trading career, I realized I'm just better off trading my own money. I didn't have the propensity to to manage a fund,

right? Uh so, you know, that's something I figured out from I I just couldn't lose other people's

right? Uh so, you know, that's something I figured out from I I just couldn't lose other people's money. Yeah. Right. Well, it goes back to what you were saying, know thyself, you know, know yourself

money. Yeah. Right. Well, it goes back to what you were saying, know thyself, you know, know yourself because even in that scenario, and I think it's actually quite interesting. Shows you the layers of trading that always exist is that you could be a phenomenal independent trader trading your own capital. That does not mean you can just copy and paste that same result and that same process over

capital. That does not mean you can just copy and paste that same result and that same process over to managing someone else's capital. Correct? You know, it has a whole different elements to it.

Of course, the trading itself can be the same, but the the nature of the pressure potentially the nature of even if it's not external, right? I'm sure they weren't calling you up saying, "Hey, what's going on?" You probably doing a lot of that just internally to yourself, uh, of adding this pressure of wanting to perform. And also there was always this give and take between

um you know remember I grew up in the era where everybody was a discretionary trader right even the fund managers were discretionary traders right and then um people started developing trading uh programs right and they would say oh no the computer makes all the the computer's making all decisions and we take it all out right well you know how you you stop a a a program trader

become a discretionary trader let the market go against them what do they do they optimize Yeah. Right. So, if the program doesn't work, they're optimizing it. So, um I I I give a lot

Yeah. Right. So, if the program doesn't work, they're optimizing it. So, um I I I give a lot of credit to people that have been able to to manage other people's money and have the success they have it. Yeah. Because that's a different discipline than just trading your own capital, right? And you got to remember when you're trading your own capital, the ups and downs,

right? And you got to remember when you're trading your own capital, the ups and downs, if you're charting them, you'll look like, "Oh my god, I had a 20% draw down. I had a 30% draw down." Most funds would be blown out if you have a 30% draw down. Y right. So having that mentality

down." Most funds would be blown out if you have a 30% draw down. Y right. So having that mentality to trade for yourself versus trading on a fund money because you had to you know you had to give people a comfort level with risk. Yeah. And and so there had to be all kinds of these you know uh you know risk governance and that I mean we're actually going through that right now in the cyber

business because because of AI right? So the firms that literally have been the financial firms are way ahead when it comes to cyber security because people have been trying to steal money from them, right? But all these algorithm traders when you're thinking about GRC and corporate governance,

right? But all these algorithm traders when you're thinking about GRC and corporate governance, you have to go and do, you know, a risk assessment on how that algorithm is going to trade and what you're going to do to to mitigate losses, right? Well, this is happening in AI. When you think

about, for example, think about this, you got a a trading firm or you're Goldman Sachs, I don't care who you are, your employees are using Chad 2 or they're using uh Grank and they're typing all this stuff into that, right? They don't realize that that language learning model is taking all

your information and remembering everything and everybody's information. So if you do anything in those algorithms that's a a publicly traded um uh uh AI. So let's say you're putting in uh what the profits of this company are going to be for this week or this month or this quarter. Mhm. And

somebody else goes in the chat uh PT or Glock and says, "Hey, what do you think the earnings on uh Microsoft is going to be this month?" And somebody from Microsoft had already typed that into that.

It's going to spit out exactly what people are think the earnings are going to be, right? And a

and a better guess than you're gonna have. Okay. So, this corporate governance around AI and how people are using it is really going to be um u a problem. It's going to be a problem um for a lot of companies, not just financial companies. Any any company that has any sort of IP. Yeah. Right.

Because you're giving it away almost. Well, and and that's that's the whole um you know premise behind the artificial intelligence. Give me as much data as I can so I can crunch it all.

But when it doesn't have all the data, what does it do? It it gives you a best guess, right? So,

um you know, we're there's a there's a lot of a lot of u this AI is kind of it's it it's exciting because it's going to make more millionaires than you could ever think about. Yeah. But I kind of feel like it's a bubble. I feel like there's a a bubble brewing that we don't know anything about

yet that, you know, I'm just getting this gut feeling about it. Does that make does it kind of like send your your senses into overdrive knowing that obviously the crashes you've seen before, the trading aspect of it and the opportunity that also comes with a lot of pain? But equally then, you know, from having a business yourself, having to think about, okay, how do we navigate this as

well as a business side? So you have all these different layers probably happening at once. Yeah.

I'm looking at like even on a macro point of view, we got $ 37 trillion in debt. We're not going to we're not going to retire that debt. So if you think back to what they did back in 1970, right, when we came off the gold standard. Yep. Right. What did they have to do? Because from 71 to 74,

the dollar was getting crushed. And when we came off the gold standard, um, we had to find a way to prop up the dollar. So, literally, what did the US do? They went into Saudi Arabia and said, "Hey, this is great. You got all this oil. You got all these fields, but you know, you're all in here like you're like an island out here. We're going to put all these bases in here and we're going

to protect you and we're going to give you jets and we're going to give you and then by the way, I think you should peg oil to the dollar." Mhm. So literally coming off the gold standard, then we went to to the petro dollar. Well, what's going on in the world today? I mean, you got the um the prick companies, countries that are wanting to come off the petro dollar, right? So,

I think there's a lot of things, a lot of forces out there right now. I mean, you look at the price of gold. We just go at $4,000, right? You remember when I first started trading, gold was at $300,

of gold. We just go at $4,000, right? You remember when I first started trading, gold was at $300, went to 700, back to 300. So that that gold movement is telling me there's going to be some sort of devaluation of the dollar and it's going to, you know, it's going to get pegged to gold and

crypto in crypto. I think it's going to be gold and crypto and I don't know. Um, so, you know, right now in my spare time, I'm doing a lot of research and how am I going to be able to uh, you know, benefit from that or or profit from it, but I'm I'm just looking at what's happened in the

past. Mhm. I mean, you know, that's how we rescued the dollar. You know, I didn't know this. I I saw

past. Mhm. I mean, you know, that's how we rescued the dollar. You know, I didn't know this. I I saw a podcast and uh there was only one country that came here and sent their battleships and said, "We want our gold back." Really? It was France. Oh, really? And that's when, you know, after we came off the co when Nixon in in 71 um said, "We're not pegging to the dollar anymore."

And so they said, "Okay, well then we want our gold back." So then that's when they came up with the petrol scheme. Yeah. It was a next Yeah. Yeah. And it's been fine up to them, but I I don't know how we get we're going to get out of this debt. It's going to be a combination of devaluating the dollar and they're going to peg it to gold and some and maybe Bitcoin. Yeah. You know, well,

that would be a massive turn of events, you know, into Bitcoin's a million dollars. Yeah. Well,

that's everyone's everyone's dream, a lot of people's dream. There's obviously the people who still think you know it goes to zero at one point but it just shows you that polarization in the marketplace and the polar extremes in terms of opinion and viewpoints is always going to be there right and uh well going on to sorry the seventh commandment here just to finish up these

know when to trade and when to wait which again is a very prevalent one to this day I love how these commandments even though written so long ago is is just as relevant to this day. Yeah,

I mean you've got unemployment number coming out on Friday. Thursday is not going to be a good day to trade, right? It's going to be choppy and so on. Um but you know that's that you know what happens mostly and and the day traders and if these guys are on screens. Yeah, I I feel for them

because what happens is that they make a trade and then the market just dies out and what do they do? They end up overtrading. And and you know when you overtrade the only one who makes money is

they do? They end up overtrading. And and you know when you overtrade the only one who makes money is the is the cleaning firm, right? They make their money. You know, you know, uh they're they're like bookies, right? Yeah. Exactly. Buy, sell, pay me, I don't care. It doesn't matter. Yeah. So, like

bookies, right? Yeah. Exactly. Buy, sell, pay me, I don't care. It doesn't matter. Yeah. So, like

number eight and the eighth commandment be love. This one I really love because it's so different and you don't I've not really heard this statement before, but commandment number eight, love your losers like you love your winners. Yeah. Well, like I said, you know, you you learn in life. It's

any any any lesson that you've learned in life and you think about it and anybody ought to listen to this podcast, if it didn't cause you some pain, it wasn't a lesson, right? So, if you get away with overtrading and still make money or if you get away with adding to a losing position, okay,

and get away with it, eventually you keep breaking those rules, the rules will break you. Mhm. Right?

And so that's my point. Everybody loves a winner, but what did my loser teach me, right? You know,

I'll tell you what it taught me in the nursing home business, right? I'm not going to guarantee all the loans. I was literally trying to get all my loans out into into uh into HUD loans, which were non-reourse. And I then, you know, we had the banking crisis and it it it happened too fast. But my point is, you learn you got to learn from your losers in life. Otherwise, you can't get

fast. But my point is, you learn you got to learn from your losers in life. Otherwise, you can't get lucky all the time. Exactly. Yeah. Right. Look what they get you so far. Right. And and so like you know a lot of times people will manufacture a trade Mhm. in their brain because they need the money instead of understanding you can't violate the process. The money is just the byproduct of a

good process. When you corrupt the process, you know what do they say? Uh uh information good

good process. When you corrupt the process, you know what do they say? Uh uh information good information in is good information out. Mhm. Bad in is bad out also, right? So, my point is that, you know, you it's it's a process, you know, and and I don't care what I don't care what um you

know, what you do for a living, right? There's a process that works. Yeah. Right. And so, um that you you can't be uh you know, you can't just ignore when trades go wrong. I think people try and avoid focusing on or really trying to think about pain and losses. Yeah. When they happen,

they one a lot of people crumble of course. Uh and the worst thing you can do is probably try and avoid it or neglect it because then it will compound and it will still come back again and and hurt even more when you finally face it. Um which kind of it's an interesting one actually. The

ninth commandment here after three losing trades in a row, take a break. And the reason why I say that is interesting because recently literally I think it was last week maybe a week today even uh we had a a shoot that we were doing a production we were doing and it was kind of a bit of a debate format as well and someone said that like have these rules in place like two trades and you're

done three trades and you don't have that sort of rule and someone was trying to disagree like no I'll trade my system I'll keep trading my system if my setup presents itself I have to trade it like what are your thoughts then because obviously this is in here you know and this as we said this commandments have been written for a while now and Yet it's still true to this day,

I believe. So why would you say after three losing trades in a row, take a break? Well, I mean, we're

I believe. So why would you say after three losing trades in a row, take a break? Well, I mean, we're in an environment where we might make 20 trades in a day, right? But, you know, I used to put that little circuit breaker in there that the guys that I was backing so that they could clear their head, right? Because, you know, when you're backing a trader, what are they thinking? Oh, you know,

right? Because, you know, when you're backing a trader, what are they thinking? Oh, you know, Loose is going to get rid of me if I don't start making money, right? Um, so my my first trader, it was funny because his name was Brad and he actually Brad Sullivan. He's still been trading

ever since I left. So, uh, he was my partner in the in the trading company. And when I first uh, put him, he was always an upstairs trader and I met him when we had the NASDAQ stock trading room.

So he was trading NASDAQ stocks from a computer and then he moved over to trading e- minis and so he ran the upstairs office and um so when I I staked him I staked him with the $25,000 account and so he was upstairs trading minis he just got married you know his life was changing and so on

and in like four months three to four months he lost the whole 25,000 and I walked upstairs. He

he had a nice note. He said, "Look, you know, here was our agreement. I lost money." Um,

and you know, I thank you for the, you know, thank thank you for the the opportunity. And I looked at him and said, Brad, I go, you know what you're doing. You know what you did wrong. You just

got married. You just had a baby. I said, you're worried about, you know, making a living. I go,

get in there and just don't worry about the money. go just put put the process together. Right. And

so that was the first four months of of the that year. And then by the end of the year, he made a million dollars. Wow. Right. And I I think it it had a lot to do that he knew I had confidence in him. And I was telling him, don't worry about the money. Just trade the systems,

use the rules, do this. And when he did got down to that, everything fell in place with him. And

and so that's you know that's that's that was that was like all the rules all you know culminated into one in one. Well that's what the 10th your commandment says is the unbreakable rule. You you

can break a rule and get away with it once in a while but one day the rules will break you just as you were just mentioning prior to that. And if you continually violate these commandments of trading you will eventually pay for it with your profits. And that's the unbreakable rule. That's

it. Because you know like but it comes to the fact that you know it's kind of hard to keep control of your ego. Of course. Yeah. Especially if you know you have a $100,000 day or 200. It's hard in general, right? In general, right? It's hard in general in life to control ego or those sort of

general, right? In general, right? It's hard in general in life to control ego or those sort of emotions, let alone when you embed money which is just pure emotion. Uh especially in high amounts, especially in short periods of time as well. You combine those two things like of course with your you know your record trade that was in seconds. Yeah. That must have like afterwards it must have

felt insane. You know what is it's even worse is when people are blowing smoke up your ass. Oh,

felt insane. You know what is it's even worse is when people are blowing smoke up your ass. Oh,

you're the best, you're this, you're that. You're this. And you start believing that. Yeah. Then

there's something wrong with you. You know I was in the right spot at the right time and did the right thing. Yeah. Right. it that doesn't mean that everything I touch is going to be gold. Yeah.

Right. So, you know, I I never I didn't have that, you know, when it come to laughing at myself. I

was the number one person who laughed at myself. I used to look at people go, I'm not that smart, you know, but you know, people get caught up in their in their success and think it's all about them. But, you know, it's not. It's it's a combination of discipline, hard work,

um you know, just putting together a process and and you got to have a have a you know, I don't want to use the word chi, but you got to have a good aura about yourself. Yeah, for sure. Every

day. Like towards the end of my career at the Merc cuz things had changed so much. We weren't getting all the information and half of the information was going to the e- minis and yours and so on.

I would pull into the building and get stress headaches because Yeah. And it was it's crazy, you know. Um and and in in trading there's no way you can have that clouded judgment. Yeah. And to

you know. Um and and in in trading there's no way you can have that clouded judgment. Yeah. And to

finish up, I really want to finish with like two key questions. And one was just something that happened accidentally on the podcast and we've kind of repeated it and I'd love to hear your thoughts especially from such an incredible career and even outside of trading as well, which is in regards to what is your definition? How would you define success? Uh that's uh well there's

different things that you're successful at, right? Um like you know for me it's about my family. Mhm.

You know I you know I raised seven kids. They're all great kids. They're they're all doing well in life. Um uh people ask me all the time, what is your uh where's your you know best place to visit?

in life. Um uh people ask me all the time, what is your uh where's your you know best place to visit?

Yeah, you know, in the world, where would you go? I go, wherever those 20 people that are part of my family now with the in-laws, I mean, the son-in-laws and the grandkids and so on. Wherever

those 20 people are, that's my favorite place in the world. I don't care if it's in my house or in we're going to we're going to Italy in in May, you know, as a family. But um yeah, so success is uh you know, just you know, a able to you know, get up and have peace of mind every day. Um so, uh

and and and I don't care who we are. I don't care if you're a high school football coach or you're or whatever. You know, you got to be happy at what you're doing. You got to be happy in life. If And

or whatever. You know, you got to be happy at what you're doing. You got to be happy in life. If And

that's mainly when I left, I wasn't happy. Yeah. I was I was, you know, it was just I been there, done that. Time to go on. Yeah. This is coming to an end. Need to move on to the next, you know,

done that. Time to go on. Yeah. This is coming to an end. Need to move on to the next, you know, aspect of my life. So, um, yeah. So, being happy is like being happy in what you're doing. I love

that. I really enjoy building businesses, you know. It it's it's it's uh a little more cerebral than trading. Yeah, that's true. Definitely. Yeah. And then the final point, Rem, really is

than trading. Yeah, that's true. Definitely. Yeah. And then the final point, Rem, really is uh you know, as as we've talked about throughout the theme of this podcast in particular, you know, the reoccurring themes and how they have not changed. So, for just anyone out there really who finds themselves trading the last couple of years potentially and not really seeing that progress,

they're not really seeing that profitability. What would be your advice to them from your, you know, years and decades of of wisdom in the trading industry? Well, I'll tell you what, if people are being honest with themselves, they could sit down and say why they're not profitable, right? If they really sat down and said, well, you know, I'm not profitable because I have too much

right? If they really sat down and said, well, you know, I'm not profitable because I have too much stress outside of out of here. I have to lean that live out of my trading account. Um, and so on. I mean, I think, like I said, people look at successful traders and think I can do that, right?

on. I mean, I think, like I said, people look at successful traders and think I can do that, right?

If you're being honest with yourself, you'll know why you weren't profitable, right? And I I think that mostly most guys, most people trying to be traders, it's because they're under capitalized, right? And or they've, you know, you know, they you know, I turn a large fortune into a small one,

right? And or they've, you know, you know, they you know, I turn a large fortune into a small one, start trading, right? So my you know so I think that that um people that aren't being successful they may be taking a shortcut right and you have you look you got to look in the mirror if you

can't look in the mirror like like you know when uh I had the problem with the nursing homes cost me all that money I mean I didn't blame everybody else I blamed myself right I had too much risk I didn't leverage it Right? And so my point is you have to be honest with yourself. If you're not

honest with yourself, then you know you're just, you know, you you'll burn through your capital and you won't be successful and you'll blame everybody else and it's probably because of the things that you were doing and not doing right. I love that, Lewis. It's been an absolute pleasure again to do this and maybe we'll get a part three at some point in the future. Uh but thank you so much for

being here and sharing so much of your experience with us once again. And you know, I'm sure there's some exciting things that we talked about off camera that come in the future and hopefully, you know, people will be able to see that and I I'll be waiting to watch that as well, personally. But everyone at home, drop a comment with your biggest takeaway from

personally. But everyone at home, drop a comment with your biggest takeaway from this incredible episode, our first part two in a very long time. And no one better than Lewis to have that with. Hit like, hit subscribe, and until next time, everyone, take care.