Walk into a casino and you can identify each one of these types immediately. It makes for good people watching and even some side bets with friends.
Type 1: The Good Time. The vast majority of individuals enter a casino to have a good time. They’re never alone. They bounce from game to game and they often have a drink in hand. They put some money on a few games (most often games that require no skill like lottery, tickets, bingo and slots). They win some. They lose some. But other than finding some entertainment, there really is no objective or strategy. At the end of the night, they go home and share the stories.
Type 2: The Strategist. This player has an objective. They know the odds. They play games with a strategy where skill is involved (most often sports, blackjack, poker or bridge). They’re systematic and unemotional. They’re robotic and disinterested in the entertainment value. They are there to make money. If they go home with a loss, there is disappointment. If they go home with a profit, it’s expected.
Type 3: The Button Presser. These players are often just at slot machines. They are effectively trying to win a lottery with little to no effort at all without any consideration for the odds or outcome. Losses have little to no effect while the rare… very rare win… encourages them to play more (even if that win was for someone else). The Button Presser sits emotionless and disconnected from surroundings. They’re robotic in a way, that keeps them from seeing the forest through the trees.
Market participants are just as easily identifiable either via email, online comments or conversations.
Type 1: The Good Time is a passive investor. They don’t pay much attention to the market on a daily basis other than to passively review the news and quarterly performance. They have invested in ETFs, mutual funds, some stocks and perhaps have an active manager making decisions for them.
Type 2: The Strategist is a hedge fund. The Strategist is an institutional trader. The Strategist is anyone following a system with clearly defined rules, risks goals and objectives. The Strategist is systematic and unemotional and they actively follow the material required to continue to perform. A bad month brings disappointment. A good month raises more money and is largely expected.
Type 3: The Button Presser is virtually every retail trader out there.
* I want to daytrade. The more I trade it seems the more I make
* So far ‘winging it’ has allowed me to grow my demo account back from a 13k balance to a 66k balance in a fortnight.
* I’m talking like the 2-5 minute time frame. Scalping.
Button Pressers get excited about unrealized wins. They get excited by the potential for profits rather than the actual profit. They take excessive risk with little to no strategy and they look for that “lottery ticket” win to justify all the losses it took to get there. Button Pressers are revenue generators for brokerage firms… and liquidity providers for the market. Don’t be a button presser.
On a daily basis, we get emails from people identifying their own strategy and objectives. The vast majority of you who write us are looking for help generating results. The vast majority of you are “The Good Time” traders who want results but know not to try and produce those results yourself.
But mixed within those emails we receive, are a plethora of emails from individuals who think pressing the button is how profits are generated (it’s not). This group thinks success and profits come from “more research and better charts” (it doesn’t). This group is often determined to highlight strong wins while ignoring all of the numerous losses that far exceed those wins.
Button pressers are no different than slot machine junkies where the hope and dream of a big win drives the motivation to keep going… while all those quarters and dollars are tossed away with no result at the end of the day.
Don’t be a button presser. Approach the market with a strategy and be systematic in your approach. Take the losses knowing your system has time to recover and move on to the next trade unemotionally. Button pressers are revenue generators for brokerage firms. Systematic traders are revenue generators for their own pockets.