Interview with Lionel Silva - Part 3
** Trading Mindset ** Q. Equally, profits and losses can have a significant psychological impact on traders. How do you deal with them? I trade like a robot and follow my trading plan. I adjust the plan as needed, but never a particular trade. Q. Isabelle, 36 is a mother of two children and stays at home with them during the day. Her husband works full time and his salary meets all their financial obligations comfortably. Isabelle arranges an appointment with you to discuss trading – she has never traded before but knows you can help her get started with some initial guidance. What will be the 3 most important things you tell her in the appointment? What are her goals? Why does she want to accumulate money? Determine what she needs to do to reach those goals (savings rate, ROI, etc.). Get a feeling of her risk aversion (helps to determine trading/investing styles, asset class diversification, etc.) Q. Jack, 58 is a very successful business owner who wants to start trading as he slowly moves into retirement and away from work. He has arranged a similar appointment to Isabelle – would your advice to him be identical to Isabelle’s or different? Same as Isabelle. Q. Is trading as difficult as many people appear to make it seem? For people accustomed to making money as an employee, trading is very different and requires them to be much more successful for their success. Also, I believe that a person must really understand and manage their emotions to be a good trader, than to find a holy grail system. Q. What are the 5 most important character traits of successful traders? Please feel free to briefly explain them. Know yourself. Q. Trading can be a very solitary existence – especially in the early days when you are learning, and often feel as though you have no idea what you are doing. Do you find trading a lonely experience? Does this sit well with you? If not, how do you deal with the loneliness? I have a network of other traders and we speak often on the phone. Sometimes too much. Generally they look to me for guidance and it is difficult for me to get them to take responsibility. Q. What would be or has been your most significant weakness in trading? Have you learned to overcome it or do you continue to work on it? Focus: I am involved in many asset classes and sometimes don’t have the time or interest in giving each one its required attention. Q. Assuming you are now consistently profitable, do you still have times when you experience self doubt over your ability to trade? If yes, how does this make you feel and how do you overcome it? Absolutely, since I am coming off a bad month. It makes me feel insecure since I am a full time trader. I need trading/investing income to pay the bills and grow my account. Q. Ideally, we would like to be emotionless when we trade – we would certainly make more sound trading decisions more often. How do you control your emotions when assessing potential trading opportunities or open positions? Do you get very emotional at times? I follow my system like a robot. Q. If you experience a large profitable trade, do you reward yourself in any way? Yes. Maybe a nice dinner, take my girlfriend to a show, gamble a little more (I live in Vegas!) Q. In your entire trading career, what are the biggest lessons you’ve learnt and how did you learn them? Be disciplined and never give up. Q. To finish off, if you were to start trading all over again now, what would you do differently to what you did originally? Spend less money on courses. Learn more from books and my own trading experience. Only paper trade to learn the mechanics of trade execution or of a system, instead of thinking paper trading predicts my actual trading.
Lionel has been investing and trading since he was a teenager (late 1960s). His focus has always been on capital preservation (”staying in the game”), then returns. In other words, he focuses on risk first, then reward. Learn Online Stock Trading Systems Return to the Index of Interviews ... |
