In this episode of 2Traders Podcast, Darren and Walter dig into the idea of “The Theory of Everything” and the psychology behind a natural human behavior. Why do we want someone to do something even if they don’t want to do it? The discussion moves into risk management, trading goals, expectations, and the Eastern concept of “non-attachment.”

According to Walter, a person’s intelligence and educational background does not guarantee success in trading. Does securing a PhD give you absolute trading win rate of 100% all the time?

Darren also pushes on the importance of backtesting and how, oftentimes, you’ve got to accept painful losses and learn from them. So, on the next trade, ask yourself: “Am I going to get any better at this?”

You’ll also see how “chopping wood” can foster better trading decisions.

Download (Duration: 31:14 / 35.7 MB)

In this episode:

00:50 – punch holes

02:48 – jumping-off point

04:42 – driving factors

06:36 – chopping wood

11:24 – trading game

13:24 – execution phase

15:59 – unfortunately stuck

18:47 – execution and risk

21:55 – do it slowly

23:19 – negative human traits

26:33 – herd mentality

28:04 – strange anomalies

30:38 – forces

Tweetables:

Learn to lose and learn when to walk away. [Click To Tweet].

Risk management rules are your trading goals defined. [Click To Tweet].

All the decisions you make rely on emotions. [Click To Tweet].

Download The Full Episode 73 Transcript Here

Walter: If you want to be good at this, typically, what you have to do is put that to the side and just execute and keep executing and then come up for air every so often and have a look. “How am I doing?”…

Announcer: Two Traders, Darren and Walter, pull back the curtain on profitable trading systems, consistent money management, and profitable psychological triggers. Welcome to the Two Traders Podcast.

Walter: Welcome to the Two Traders Podcast. It’s, Walter here. Good day, Darren. How are you today?

Darren: Hi, Walter. How are you doing?

Walter: Great! Darren, I have this weird idea and I am really interested to see where this goes. I have this theory, I have been thinking about it for, I do not know, three years? Three or four years now and I am still trying to punch holes on this theory and I cannot come up with any which probably means that, of course, I am locked in confirmation bias or one of those cognitive biases that we are so aware of but I would love to get your thoughts on these and obviously apply it to trading.

Here is my “Theory of Everything”. My Theory of Everything goes something like this: every single disagreement, war, conflict, or issue you’ve had in your life is essentially due to one thing and that one thing is that you want someone else, something else,