Rebel Traders 048 : The Trading Samurai vs The Trading Ninja

Historically, philosophically and strategically the Samurai and Ninja were very different but there are distinct parallels with the different styles of trading and trader...

Nothing creates more reverence and awe than the history and legacy of Samurai and Ninja. Both have fundamental differences in approach and strategy to both combat and life but there are strong parallels to both in regards to trading. So, in this weeks show, Sean and Phil take a look and compare them to each other and how they directly compare to the different styles of trading and the attitudes to the business of trading.

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Sean Donahoe: Samurai Versus Ninja: Who Would Be a Better Trader and Why? Let's rock.
Automated: Rebel Traders takes you inside the world of two underground master traders who take an entertaining and contrarian look at the markets, to cut through the noise of Wall Street and help you navigate the trading minefield. Together, Sean Donahoe and Phil Newton are on a mission to give you the unfair advantage of a rebel trader. And now, here are your hosts, Sean Donahoe and Mr. Phil Newton.
Sean Donahoe: Hey hey hey, this is Sean Donahoe and I am joined by my partner in podcasting, the man with the plan, Mr. Phil Newton. How are you doing, sir?
Phil Newton: Good, I finally got some that I can agree with on that introduction, I am a man, and I do have a plan. So yeah, I'm doing fine.
Sean Donahoe: As we bang on that drum every single week with trading blends, I will be banging on it some today as well. But, we're going to do a little bit of a ...
Phil Newton: Bang on that big bass drum.
Sean Donahoe: Absolutely, you know the one man.
Phil Newton: I had a little flashback of Mary Poppins now. Bang on the big bass drum, bum bum.
Sean Donahoe: Oh dear me, yes.
Phil Newton: Can't save myself, now, there's nothing wrong with that. A little bit of a comical interlude. I just need one of those harmonicas and a little strap around the neck. And I can be the man with the trading plan and also the occasional harmonica accompaniment.
Sean Donahoe: Absolutely, now remember, okay, we're going to go back in memory lane but obviously the supercalifragilisticexpialidocious song, I actually heard a death metal version of that, it was about a year ago, but here's the thing. Every now and then it sticks in my head, so whenever I need a little bit of just stupidity, just to make me giggle, I throw that on. It drives my wife, actually hates that song, but she hates even more the death metal version because she hates everything I like, death metal, but it's bully brilliant.
Phil Newton: Taking it to the other extreme, though, I'm thinking about a recent discovery of the very and soft and mellow version of ACDC's "Highway to Hell."
Sean Donahoe: Well indeed, you shared that with me just a couple of days ago and I've been playing that on loop. It was bloody brilliant.
Phil Newton: It's a bit addictive, isn't it?
Sean Donahoe: It is. I like stuff that takes what you expect and what you're used to and completely turns it on it's head. I heard an acoustic version of "Sweet Child of Mine" which was by Sheryl Crowe, you know it's not an unusual off-the-wall thing, but she did an amazing acoustic version of "Sweet Child of Mine" which is one of my favorite 80s songs, Guns and Roses, obviously. I am a metalhead, I am a rock monster, I am the guy at the front of every rock concert jumping up and down like a bloody idiot with Iron Maiden and Metallica and what have you, but I do enjoy a good rock, but I also love all sorts of different other music, stuff that's completely off the bloody wall, that most people would just kind of cup their head and go, he listens to that too? But all good fun. Anyway! Kind of getting off the topic before we even get started which is not unusual for us, but today, and in today's show.
Phil Newton: It was very early this week.
Sean Donahoe: Absolutely, like, British rail on a Leafy's track but there you go. Amtrak over here in the United States but anyways. We're going to be taking a trip a little bit back in history and a little bit to the east, we're looking at the samurai versus ninja. It came out of a very weird conversation, and historically, philosophically and strategically, the samurai and the ninja were very different. And they're very much icons of popular culture, but there are also distinct parallels between the different styles of trading and trader.
So we're going to ask ourselves the question: who would be the better trader? The samurai or the ninja. And there are some points and relevancies to this, I promise you.
Phil Newton: We've also got the Rebel Trader mail bag, your trading questions are answered, and also we've got the Bullshits of the Week, we call it the hype of all of the shenanigans of the industry. And as always, somewhere amongst all of our nonsense we're going to try to ask the question that is, of where is the trade?
Sean Donahoe: Awesome. So, okay diving in. So recently I got in a somewhat heated semantic and quite ridiculous conversation with another top-level trader about eastern philosophy, martial arts, and how all this relates to trading. And the conversation somehow came around to the differences between the samurai and the ninja. Now, what started off as a nonsensical debate turned into a well-reasoned, well thought out outlook and some very salient and well-reasoned points I thought would be a great idea for the show. So, well, here we are.
Phil Newton: Why not?
Sean Donahoe: Why the hell not indeed. So, first lets set the base here. There's a lot of mysticism, mythos and ...
Phil Newton: And because we're in the Western world, everything to the East is kind of, well it's a bit interesting and exotic to say the least. And similarly, you know, as they are looking west, they might find, you know, what we get up to, maybe humorous and interesting in some way. I suppose the point is, the mystical and exotic is always, well it's mystical and exotic, isn't it Sean? It's interesting. Maybe we could draw some parallels somewhere.
Sean Donahoe: Well, look at how, even in popular culture, though the 70s you had all the Kung Fu movies, the martial arts movies, the big boom in popular martial arts which was moved to the west and just every dojo and every Uncle Tom, Dick, and Harry were suddenly martial arts experts, practitioners, it was a massive popular culture boom in the west. Which then, again, as people dove more into this, it became more and more centered around the samurai, ninja, and everything else, and again, a lot of it was, I want to say, dramatized, bastardized, and romanticized, and immortalized, every other kind of ized, you know. It really did ...
Phil Newton: Got taken to the extreme, shall we say. In every sense, both good and bad.
Sean Donahoe: Absolutely. So, let's start with a wee history lesson. First of all, lets define who the samurai were.
Phil Newton: Bit of a Jackanory moment, can I sit back and imagine.
Sean Donahoe: That Jackanory, for ladies and gentlemen in the United States was a children's thing in Britain where someone read a story aloud to a bunch of kids, and then televised it.
Phil Newton: Well when you say it like that, Sean, it doesn't sound great.
Sean Donahoe: It doesn't. It doesn't.
Phil Newton: I have fond childhood memories of sitting back at Jackanory time.
Sean Donahoe: I know, and I used to as well as a kid, but now I've just completely ruined that image, there you go. But anyway, so, a little bit of Jackanory here. The samurai served the Emperor or high level government officials, and followed an honor code called Bushido. Okay, the samurai were considered to be the greatest warriors in feudal Japan. We're talking through the 15th-16th-17th centuries. Medieval Japan. And they were an elite class of Japanese military revered nationwide. They were the highest ranking social class who revolved in the upper class circles. The samurai were very proud of their heritage and would announce their, even their clan's name and lineage before challenging their opponent to battle, very tribalistic in that regard, and they followed a very strict set of rules and doctrine and were incredibly well trained in the art of battle.
Phil Newton: Think in today's world, they might be considered somewhat akin to special forces. They were the special forces of the day but I suppose they might be considered more elite than even today's special ... I'm just trying to kind of draw a modern day parallel here, you know.
Sean Donahoe: Kind of, except they were only attached to, they were very much attached to the highest, they were considered the highest level of society. That was one of the things that it's really hard to draw a modern day parallel to that because in many ways I would also argue that the ninja were more equivalent to special forces, and I'll explain why it's very hard to have an equivalent. But the ninja were mercenaries. Now I'm not saying that special forces are mercenaries but the ninja were primarily mercenaries.
Phil Newton: They work behind the scenes I suppose, by comparison. So perhaps that's a more apt comparison.
Sean Donahoe: Exactly. They served anyone who paid their price. But they tended to be outlaws and mercenaries who were shunned and feared by the masses. It is speculated that the ninja and the Shinobi way came into being in order to fulfill a critical need in the military which was espionage, dirty work, you know, what special forces call wet work, but basically they were everything from assassins, espionage, spying, as I say all the different levels, poisonings, you know what ever needed for a price, which they were considered basically, by comparison to samurai they were considered unethical and were shameful by the samurai standards who again lived by this very strict code of conduct.
So the ninja hid their identity, dwelt in the shadows, and they basically were the necessary, I want to say a necessary evil, but they were a necessary tool in military work. So if you want to carry, first of all before we even get started parallels to trading, Bushido, and this is what I was banging on at the beginning, Bushido which is the code of conduct, the rules, that guide the samurai through everything they do, could be considered like a trading black. You want to bring it to traders.
Phil Newton: A code of conduct, a code of ethics, I would also like to add in there that the comparison might be, I would consider it a way of life. The way I view the markets and how I approach the markets, how I view a lot of things in life, the way that I trade and the mindset behind it, that's what I'm looking for, it's how I live my life as well. It's, I wouldn't say I'm very robotic in that regard but I try to make fast decisions, you know, can I deal with this now type of attitude. Okay, well, I'll put time aside for it now. If I can't do anything about it then I'm going to do it tomorrow. And that's kind of how I approach trading, is this something that I'm going to trade today, no, well I'll look at it tomorrow then. You know, it's that type of philosophy of trying to, you know, just perform to the best of your ability with whatever you are doing. And that's what I'm doing in trading, that's what I'm trying to do with my life as well.
Sean Donahoe: That's very true and then by comparison the ninja, with their parallel to trading here, is their sole focus was getting the job done by any means.
Phil Newton: Any means necessary.
Sean Donahoe: You know, a basket full of strategies, tactics, and approaches, to ensure the goal was achieved.
Phil Newton: Yeah, exactly, shooting from the hip.
Sean Donahoe: And they were very adaptable to any environment and situation. So, in terms of the base history and, I could go completely dirty about the origins and where they all came from, the Iga region of Japan, and everything else, we're not going to get that nitty gritty into the folklore, the mythos, and everything else. We're going to keep this kind of ...
Phil Newton: It's a tenuous link at best, let's just leave it there.
Sean Donahoe: Fair enough. And again the resistance of going full nerd, the urge is strong. Let's leave it at that. So anyway.
Phil Newton: You nearly went all Star Wars on me, there as well.
Sean Donahoe: I could ...
Phil Newton: The nerd is strong with this one.
Sean Donahoe: The nerd is strong with this one, yes indeed. And anyone who knows me personally knows that yes I am a complete bloody nerd so anyway. And I'm proud of it so I don't shy away from that. So let's talk about several different aspects of both the ninja and the samurai, break it down. Let's say we talk about the attire and arm. Now the samurai primarily wore a silk kimono. Now one of the things about this is most people wore, in that era, cotton kimonos. The silk kimono was also because it was high end silk was seen as again ....
Phil Newton: A symbol of status, I imagine.
Sean Donahoe: Social status.
Phil Newton: Oh that was a good guess, wasn't it, yeah.
Sean Donahoe: Exactly, absolutely, so they also would avoid, funnily enough, bright colors because obviously that is, just screams, make me a target.
Phil Newton: I would like to say, for obvious reasons at this point.
Sean Donahoe: Yeah, for obvious reasons but sometimes you have to point that stuff out. But one of the things they would also do, however, in battle is they would wear their clan colors and again it's, I always come back to it's like football. It's like football players with their team colors on so that in battle it's easy to identify who's the enemy and who's the target. But usually these samurai would challenge people one on one, unless there was a big sort of pitch battle, but usually it was direct opponent to opponent combat, and they would wear those clan colors so that everyone would know who was their master, so to speak. And they were very, very loyal if they swore an oath to their masters, they were incredibly loyal to the end.
Now when they did wear armor it was light, flexible armor to allow maximum flexibility and agility in the battlefield but obviously, you're going up against different people with different weapons, you go up against another sword master, then you need at least some protection, if you want to bring this to trading, it's being direct in combat, they knew that they needed a measure of protection against their opponent.
So for a trader, the opponent in this case, not necessarily the person on the other side of your trade but the markets in general. You could imagine that your individual trade is your one on one combat but your overall approach to the market in the long term, that is your pitch battle. And they have a plan to mitigate as much risk as possible, but still allowing for the flexibility. The ninja on the other hand, they really were the masters of stealth and guerrilla tactics. They adapted to suit any situation. For example, they wore black or blue for when they were operating in the dark, if they were working-
Phil Newton: And were famous for working in the shadows, yeah, yeah.
Sean Donahoe: ... exactly, now, if they were working in daylight, in snow or tundra, they would wear white. They were, again, early camouflage experts in guerrilla warfare. Now here's another thing and again, the ninja were all about psychological warfare as well. So one thing they would do is they would cover pretty much their entire body, except for eye slits, so they could easily see but they could use that to blend in, but one of the folklore aspects of the ninja and again it's something they imparted, certainly encouraged was just because the only thing you could see was the eye slits, is because, it created almost this demonic perception amongst the general populace who were terrified of this, so when all you could see, when these stories started emerging obviously through exaggeration and everything else, you know, they were ten feet tall demonic creatures and everything else, again that resonated because we resonate with fear rather than positive when storytelling. And look how the Greek myths and legends have been twisted over time.
Phil Newton: Larger than life, I think the phrase goes.
Sean Donahoe: Yeah that's the phrase I was looking for. So they became much larger than life but again, it's something they encourage, because that then increased their value, as well as the effectiveness of their psychological warfare tactics, guerrilla tactics. But they rarely wore any armor because they're, and this we'll get to in a moment, they train specifically on speed and flexibility and they wanted to use that as their primary tool of choice rather than having, being ...
Phil Newton: That was their primary weapon, they could adapt to any environment and use any instruments to accomplish any goal. Yeah it was ...
Sean Donahoe: Yeah, rather than being in combat, I mean they risked maximum bodily harm but they maintained that maximum flexibility. So parallel to trading here is psychological warfare. As it was a key part of the ninja core and approach. They also understood the risk versus reward of no armor, by maintaining and expediting that flexibility and agility. So while they were adaptable and could twist to any situation, they did a lot of that without the safety net, relying instead on their basket of strategies, that they could understand in each and every situation. What was going to work best for them.
Out of that, I mean, let's talk a little bit about risk mitigation. The pros and cons here. What do you think about that from those two aspects, one with the light flexible armor which allowed a good modicum of flexibility, for that or the overall adaptability to any situation without the safety net?
Phil Newton: Well I think there's a couple ways you could view it. You could view it as a direct comparison but I suppose you could almost compare the inflexibility of the big institutional traders as the samurai, everybody knows who they are, they've got status, but they've got the heavy armor by comparison, and their flexibility is not great but they're well trained. And the ninja is the retail trader, you know, they're working at ... they don't need the big guns, they don't need the heavy armor, they don't have it. They can be flexible, they can be nimble, they can be fleet of foot, they can be in and out of the situation or position, compared to the institutional trader who might need to talk ...
Sean Donahoe: It takes time to unwind some of those large positions as it comes.
Phil Newton: Yeah, exactly, or maybe they've got to make the decision to committee by which point the opportunity might have, you know, been missed. So, that's the way you can compare the samurai and the ninja in this case, so in this scenario, the ninja might be better, the retail trader is certainly more fleet of foot and allows you to be more active to, and responsive to a particular situation, because we've only got ourselves to be accountable for.
Sean Donahoe: Interesting angles, and absolute.
Phil Newton: I know, slightly different perspective, than you were expecting though, wasn't it?
Sean Donahoe: No, that's very interesting, and it is a very good analogy. The one thing that I would always say though is we look at risk very much like the professionals but still maintain a lot of that flexibility.
Phil Newton: Exactly. So operate like the samurai and be the professional with the discipline and the regimented systems and processes and develop the experience, the knowledge base and practice, practice, practice, which is what the samurai were in how we're describing it were famous for, but behave like the trader to apply that discipline in flexible scenarios.
Sean Donahoe: Absolutely.
Phil Newton: The best of both. Yeah, interesting.
Sean Donahoe: Absolutely. Now the weapons. Here's what most people think of when they think of samurai and the ninja, so we'll get started with the samurai. Obviously the primary weapon of choice was the Katana, a single edged long blade, and there's many different variants on this, again, I have a whole collection of Katanas from different era, it's one of my little nerdities, guilty pleasures, I actually collect bladed weapons, swords, everything from Claymores to Katana. From East, West. So it was the primary weapon of choice. Much revered and was, and with the ...
Phil Newton: Much revered and often feared, yeah.
Sean Donahoe: Absolutely.
Phil Newton: If it was pulled out on you, you would probably wish that you were somewhere else.
Sean Donahoe: Well, very much so and again, one of the things that was part of their code is it was never unsheathed unless it drew blood. I mean, one of the styles of martial arts I studied was Aida, which is about the ... it's basically a combat style that focuses on the actual drawing of the blade, striking, and then putting it back in the scabbard as in one fluid movement. Including, you know, the blood shake so to speak, so that once you have struck, you actually shake the excess off and then again, it's re-sheathed, but it's never drawn unless it's going to draw blood. That was one of the tenants of Aida specifically.
Phil Newton: Every movement that they practiced had a purpose. So that little flick, you know, was to shake blood off, as you were saying.
Sean Donahoe: Exactly, I know, as gory as that sounds, it is one of the ...
Phil Newton: Yeah, I suppose but if we're, is the modern day person just you know looking at it and practicing, it just looks like a fancy flourish in today's world, because we don't know any different. We've gone for a bit if you've actually used those methods in real life, you know, you wouldn't get away with it for a start. But you know, it's ...
Sean Donahoe: You would not.
Phil Newton: You wouldn't get away with it. But yeah, it's, everything had a purpose. You know the reason why they would practice that maneuver because it was in real life, they would probably have to use it. On a you know ... everything was efficient. And again, it had a purpose.
Sean Donahoe: And yes, depending on ... if we ever had a burglar, depending on which room they came into and where I was in the house, they would get a very big surprise, let's put it that way. So, anyway, moving swiftly, I'm thinking long.
Phil Newton: I'm thinking Arnie out, the out commander, what he tore himself up.
Sean Donahoe: Well, yeah, it actually, this is just by the ... it freaks my wife out because ...
Phil Newton: You can always turn up the action Sean.
Sean Donahoe: Absolutely, but no, I actually was, it was actually very recent, we had a weird noise that was in the middle of the night, and it was the usual, "Sean. Sean. There's someone in the house."
Phil Newton: Are you asleep? And she goes, no.
Sean Donahoe: "Where are you?" And I was already across the room with a blade in my hand and you know, she goes, "What the-," and she looked at me, because I was already out of the bed, silently across the room with a bloody ...
Phil Newton: The first thing to hand ...
Sean Donahoe: The first thing to hand which from where I was, on the wall, was a sword, and goes, "Oops," just like, "I'm terrified for anyone who does break into this bloody house," but, anyway yes. So, the Katana was a natural extension of their own body, getting back on topic from these side jaunts. But again, it was truly a natural extension. They practiced with it, they slept with their swords. One thing that they would do as well which again, going off on a little nerd rant, but they would actually sleep on their, if they were predominately right-handed, they would sleep on their right hand and that would be them for the night.
The reason being is they would always protect their sword arm, so if they were attacked on the middle of the night, and again their swords were right to hand, if they had to defend themselves they weren't doing it with their sword hand. They were defending themselves with their off hand so that their sword hand was always protected, so that if they were then able to move and everything else, bam, they're ready to go with that natural extension of their own body, which was their sword hand and the sword.
Phil Newton: Presumably if they had to defend themselves and they were injured, it was their off hand as opposed to their ...
Sean Donahoe: Exactly.
Phil Newton: Weapon hand.
Sean Donahoe: It was exactly. And that was just an idea of the rigidity and the discipline that they had. But, here's another thing that a lot of people don't realize, it was a weapon of choice for the samurai, which was the Tessen. Now this is the war fan. You might have seen this in some movies. It's occasionally used and shown off. But what it was, was basically when they couldn't use swords, they were going into for example, a meeting or a gathering where they weren't allowed their swords, they'd have these little innocent looking fans, that actually contained lots of little blades. And this particular fighting style, Tessen, I wanna say it's Tessenjutsu, if my memory's right.
But they would actually, discreetly, you know again they'll have these little fans that were used to cool themselves off, but it could be turned into a deadly weapon very, very quickly. So again, when they couldn't use the swords and there were situations where they had to be unarmed, they weren't unarmed. And it was a very, I mean you know thank God they didn't have metal detectors back in those days.
Phil Newton: Carry and conceal is what you're trying to describe, aren't you?
Sean Donahoe: Basically, yes. And another weapon that was actually a farming implement, and funnily enough, over the years between Chinese martial arts and Japanese martial arts, a lot of farming implements ended up being used and stylized as weapons. You have everything from the nunchuck, which is rice. You have the bow staff, because the populace and the general population were not allowed bladed gear, to carry swords and bladed weapons, so the six foot bow staff was just a walking stick, and there's all sorts of other just fighting sticks, which are just short sticks, Kami. There's another one which is the Kamasari, which is basically a miniature scythe, which was used by the samurai. Again, miniature scythes and farming implements, but could be used with deadly effect in the right hands, but for both defensive and offensive capabilities.
Another thing with samurai, and again, we'll talk about this more in a moment, was archery. They would become master archers as well. So there's lots and lots of different weapons of choice for the samurai, but to bring this into the realm of trading, I look at this like trading platforms. I mean, if you think about it, the primary weapon of choice for a trader is whatever trading platform they want to use. And funnily enough, there's actually a trading platform called Ninja Trader, which I'm not gonna get into. It's funny, because in marketing as well, you know there's X samurai of the ninja strategy for X, or the ninja awesome methods, and stuff like that.
Phil Newton: Yeah, it's major eye roll moment as far as I'm concerned.
Sean Donahoe: It is.
Phil Newton: Everyone tries to compare it, ninja, samurai, you know just do it dude. You don't have to come up with some witty name, and just put samurai on the end of it. Yeah, sorry from my perspective, a little bit of an eye roll moment.
Sean Donahoe: It is, but I'm not saying that in regards to ninja Trader, which is an absolutely awesome platform.
Phil Newton: You know, the tools, the tool, it does work. I think the point you were gonna come on to is that, they all predominantly do the similar thing. They all don't do exactly the same thing, but they're all close enough that you might as well say, they all do the same thing. They all do it in slightly different ways. The comparison I always draw is against the say for example, a car. You know you have the Audi, the BMW, the Mercedes, they're all going, they're all luxury cars. They're all drive and made to be, but they all do it slightly differently, and I think that's the point here. When it comes to the weapons of choice, it's they all do the same thing. They all create a dead person.
You know it's in our sense. We just wanna successfully execute a trade, so how we get there, there's a mountain of different ways to get the end results of a successfully executed trade, and which one you choose, the tool of choice, most of it is pretty much down to personal preference. What do you wanna focus on? Do you wanna drive in the Mercedes or do you wanna drive in the Audi? Or the BMW? Again, they're all gonna give you the same experience, but maybe the seats in the Mercedes are just a little bit more comfy, and that's what sells you on that tool. It's the same thing in trading, you know which one do you prefer, because I've gotta admit, that's one of the more common questions that we get asked. Which charting platform, which broker, which tool, which widget. It truly does not matter. What do you want, because everyone's got slightly different needs and requirements. Which tool is the right tool for the job for your situation, and that's really what it's about. Right tool for the right job.
Sean Donahoe: Absolutely, and I'm gonna say, this is a very important point as well, is people become very centered around their choice of trading platform. Almost to the point of, loyalty to a fault.
Phil Newton: I'm very loyal to my charting platform. I've been using them for more than 15 years now. Fifteen years? Yeah, 15 years. Yes, they're good.
Sean Donahoe: That's fine, but there's one aspect of this that again, is a cautionary note, is when it's something you're just used to, but when you don't know that you've got the right, the perfect tool for your perfect style. I know Phil does because I use the same trading platform.
Phil Newton: And I shopped around until I got there.
Sean Donahoe: Exactly. Well one thing with the samurai is, they would have very much loyalty to different sword makers, who have very specific styles or methods of manufacturing and forging. I mean a Katana could be folded 200 times. What an incredible effort to make this. And then it has a high carbon steel content, has a rigid back and I mean this is-
Phil Newton: Bear in mind this is 4, 5, 600 years ago, you know this is an ancient art. Literally hand crafted in every sense, from the mining to production.
Sean Donahoe: Absolutely with the highest quality techniques and everything else, and it literally, the sword makers became legendary.
Phil Newton: Almost as famous as for what the wielders of the swords right, some of them.
Sean Donahoe: Oh absolutely, in many ways more famous to be honest. You know there's very few samurai that anyone could name, but people who are familiar with this could probably name some of the actual sword makers. Again, because they were legendary and immortalized as well. Now the interesting thing in the side of this, is a lot of people are either, and you take it to the modern day guys, oh I'm a Mercedes guy, oh I'm a BMW guy, I'm a Ferrari guy, and everything else, because of social status and everything else. Or if you bring it down, I'm a Ford guy versus a Dodge guy, you know Mopar performance and everything else. You can very much-
Phil Newton: I'm a Prius guy Sean, you know that about me, don't you?
Sean Donahoe: Well as long as you've got something to charge your iPod, you're all right, yeah so it can be jump started by an iPod. Don't even get me started on those, but at the end of the day, we all have this kind of tribalism and central loyalty to one platform, because of familiarity and everything else, but is that the right platform. Like Phil has done. He's gone around and tried many of the different platforms to find one that suits him. And again, we recommend a few different ones, that we like, because of our particular style, yeah based on experience and that.
Phil Newton: Based on experience, yeah. We not familiar about every platform, and every day I get made aware of, "Hey, have you tried this platform?" I'll go and take a look. Okay, it isn't quite what I want, I'll stay where I am.
Sean Donahoe: Exactly.
Phil Newton: So you it's right tool for the right job, but also for the right person. I think that, that's a big proponent of what we're suggesting here.
Sean Donahoe: Exactly, it's again an awareness. One thing we always talk about, yeah one thing we talk about a lot is awareness. So be aware of the different options out there, to be aware that you've got the right tool for the right job. But let's take the ninja weapons. Now see the ninja have a very different philosophy in and weapons. See the samurai, their lives are centered around the Katana. They have all sorts of other options but the central focus, the core of their entire life, is their sword, which is even by their own standards, revered by them. Their sword is central to everything they do.
The ninja however, they really don't care about their weaponry. This is one of the different aspects here.
Phil Newton: I think the whole thing with ninjas as I understand it, and keep in mind I'm just a poor farm boy, but as I understand such things, their skill set was that they could go into a situation unarmed, and use any every day object as a weapon. That was the kind of the skill sets of the ninja as I understood it.
Sean Donahoe: To a percent.
Phil Newton: Like a deck of cards, they could turn that into a weapon of choice just for example, or a pocket full of change. You know they're the master of distraction and deception, and just taking every day objects and using them.
Sean Donahoe: They were able to do a lot of that, but one of the aspects of that was again, anything to hand but also they had a select arsenal, which were common tools of the trade. So for example, they had the ninjaken, which is also known as the ninjato, which is the ninja counterpart to the Katana. Now the Katana varies in different life, depending on whether you got Daito Katana, well I won't go over all the different types of Katana, but for example, they were long but had a slight curve to them. The ninjato was traditionally a straight weapon, couple of inches shorter than the Katana, but much poorer quality. They weren't manufactured and folder, and everything else. They were very rough weapons. They weren't treated the same, and again, much poorer quality but still deadly in the trained hands of the ninja, but.
Phil Newton: By comparison, I suppose it was more functional, although they're both again, doing the same job. But you know this is the Prius if you like. It's functional, it does the job. It's a that'll do, it's got a sharp edge, we don't care, you know who's made it, as long as we've got it.
Sean Donahoe: Indeed and because of the poor quality of the edge, they didn't rely on its cutting ability, like the samurai do. I mean the Katana, in trained hands allegedly and again, it's been proven in different demonstrations of practitioners who still practice the different sword techniques. But, you could cut a body in half with one fell swoop with that. You're not likely be able to do that with a ninjato. The reason being again is the way it's designed to cut, the blade, the quality, and everything else, was designed to go through armor very quickly, dispatch an enemy. However, with the ninjato, or the ninjaken, they were designed ... they didn't rely on its cutting ability, but they did rely on its stabbing ability.
So primarily, a lot of the sword techniques used by the ninja were about stabbing more than the edge work, and also to be disposable. If you needed to get rid of that in a hurry, bam, throw it away and you're gone. However, a samurai could never even dream of ever parting with their weapon. They would rather part with a limb than their weapon. So very different philosophies that. They also had, and this is one that most people associate with the ninja, is the Shuriken. The throwing star. One of the most iconic weapons, it's a small start shaped blade, more often than not, it's a medium range weapon, and it could, if it hits the target, it could pierce a skull or something like that. It's actually very, could be effective. But here's the thing. While they were not primarily designed for actual killing an opponent, they were a great distraction. They were a great dissuader at medium range.
If you had a pursuer and someone was too close to you, throw one of those at them and watch them run, because again, psychological tactics came into play here. They would dip these in poisons, or they could be dipped in poisons and everything else. And even the merest scrape of this could lead to death. They would use different poisons that, once entered into the blood stream, is like a snake bite, and it could lead to all sorts of different complications. The thing is that when people started hearing about these, and also to be frank, a lot of it was also rumor and supposition, but again it all served to-
Phil Newton: You mean it to say, that even in ancient days, they relied on fake news?
Sean Donahoe: Absolutely. ninja fake news, oh my God. That's brilliant. Ninja fake news. But they would also use things like cow traps, and explosives, and poisons. It created this legend around the ninja. Again, this is why it's also seeped into popular culture. Bombs, and poison, yeah.
Phil Newton: Folklore, what not, and yeah.
Sean Donahoe: Yeah, exactly, flash bombs and everything else. They would use these to create effect to almost create a magical philosophy, so whenever you were, the common foot soldier, and even the samurai were, had a serious and had a fear, in and around dealing with the ninja. So they also had the Kunui, which is a small like multi utility weapon. Sharp enough to pierce armor and dispatch a victim. We'll call it like a little dagger, like a tanto blade if you will. But the parallels to trading here are, this is very much as Phil kind of mentioned earlier on, it's the right tool for the right job.
But no overly rigid loyalty of reverence of any single tool. It allowed us, if there were a better option, as traders, if there is a better option available that is gonna suit our needs, and allow us to do our job, reach our goals, execute our trades, manage our portfolio that much better, and if it's practical to use that, or more practical to use that, or efficient to use that, rather than what we're using, then hey, guess what? We drop one, we pick up the other, and off we go. It's really that simple. There's a lot of flexibility rather than the rigidity of the samurai. So what's your take on that Phil?
Phil Newton: Yeah I completely agree. I mean we touched on it well, I mean it's the right tool for the right job. That, as traders, that's what we're looking to do. It's you know if you've got a variety of different strategies, what do you need to actually deploy that strategy? Again, it comes back to the ... I mean there's lot of strategies that I can use, and could use, and I do deploy. But I don't want to use them all, all of the time. So the environment is assessed, to deploy the strategy. And that's what you were saying with the ninja, I mean this is the conclusion that we're coming to, or certainly that I'm coming to, as you're describing the differences between the samurai and the ninja, it's almost like what we were describing earlier where you've got the samurai's the institutional trader, but the ninja's the fleet of foot, and retail trader.
So if we can take the principles of the samurai but be like, you know adapt to the situation like the ninja, and the environment, so that we've got the discipline of the samurai if you like, but we've also got the nimbleness of adapting to the situation like the ninja would. You know that's gonna be the perfect blend of the best of both worlds, for want of a better description.
Sean Donahoe: Absolutely. So let's talk about the fighting style. We talked about the weaponry, we talked about a lot of the origins, but let's talk about the fighting some. Samurai, they were masters of the blade. Sword fighting. Critical foundation to everything. However, the more experienced warriors were also training in archery and other weapons, but again, wanna emphasize that the core, the foundation, and everything else was fighting with the Katana. Now as they built on that foundation, gained more and more experience, they would then start practicing other weapons, but they always went back to that foundation of the blade. Now, higher class samurai, and I'm meaning this in, there were even within the class society that was feudal Japan, the higher class samurai would also learn Natsuhara-ryu aki jujutsu.
Now this is, or was considered the best form of hand to hand combat at the time. And one of the modern populace students of this particular school of martial arts, again back in the early twentieth century, was also the founder of Akido, which is one of the martial arts that I used to do and study as well. So there's many different forms and flavors, as many as like Ben and Jerry's. There's many different flavors of martial arts, that all have very similar origins and a core legacy, an ancestry so to speak. But a lot of them are specialized or derivatives of some of these early martial arts. So it's very interesting to see that only a slight group though, would learn this hand to hand combat, versus the majority, again they all came back to this foundation.
This is the parallel with trading here, is everything starts with the foundation as the core of everything they do, and once they had again, gained and mastered that foundation, it allowed them to learn other disciplines that made sense to build on in the direction they wanted to take, because of whatever they wanted to do, the area of specialization. So as traders, we have that foundation strategy, the core, the anchor of everything we do, and then you can build upon that with other strategies that allow you to, with the experience you've gained, capitalize on other opportunities and situations where you can again further develop that specialization. What do you say in regards to that?
Phil Newton: Yeah I mean this is what we said many times in different ways, is having that foundational strategy. I mean that's one of the things that we focus on is giving someone that foundation, so that with practice and time, they can master that foundational strategy, and then with experience, they can say, "Okay, well I'd like to layer on top, another specialty, or another methodology, or another string to the bow, or an arrow in the quiver. You know whatever analogy or comparison you wanna make.
But you've always got that foundation to come back to. Back to basics as it were. And whether it be training, whether it be martial arts, whether it be business, there's always that foundational strategy that you're going to apply, but then you might add specialty tactics to the strategy if that makes sense. So just trying to put some distinguishing features to, you know to the overall objective. I mean the objective in this case, the trading case, is to make money by any means as it were, but you need some consistency of strategy, before you can start to get creative and look for something that's practical for the situation, or that you might not apply every day.
Sean Donahoe: Absolutely. Now, on the flip side of this, you also have the ninja. Now the ninja developed a completely new form of martial arts called ninjutsu. And it's a very systematic approach that focused on speed and agility in handling any situation they would face in the field. Now there's very little actually known about the true origins of ninjutsu. Plenty of people have emerged, not surprisingly in the modern martial arts community over the last 40 years, claiming to have learned this from the masters, and but honestly, many are skeptical of-
Phil Newton: On the top of a mountain at the feet of an ancient master who's 3000 years old.
Sean Donahoe: Exactly. Many are skeptical of the validity and the true nature of the origins and claims and I always come back, you know again, from many, many years of studying different martial arts and being one of my obsessions.
Phil Newton: Well not just that, but people say it with whatever discipline that they're trying to master, again, whether it be trading, whether it be you know martial arts, whether it be some business strategy or technique. Everyone says, "I learned this from a master." No, I don't think mastery in a subject should be confused with experience, because experience doesn't necessarily equate to mastery.
Sean Donahoe: No, and I also think, and again this is one thing I wanna highlight. There's a lot of bull shit out there, you know? Okay, I come back to Hong Kong Phooey, I don't know if you remember?
Phil Newton: Yeah.
Sean Donahoe: You know his big thing was, he wanted to be a super spy, as you know a super hero, and he had his correspondence book on Kung Foo that he relied on all the time. And it was a correspondence course, that he bought a book on Kung Foo, and thought he could be, like this number one super guy.
Phil Newton: He had the practical knowledge, but he didn't have the experience.
Sean Donahoe: Exactly, he had the book which he kept referring to, to help him out, and he kept fumbling through ever damn situation, but at the end of the day, I see again a lot of people out there making outrageous claims about their experience, their knowledge, and how they you know the crypto market.
Phil Newton: The market is rife with it. Yes I've been trading cryptos.
Sean Donahoe: Oh my Lord, don't even get me started. I was trying to avoid that word.
Phil Newton: Only because it's topical at the moment.
Sean Donahoe: Yes, indeed.
Phil Newton: But when you do see, everybody probably instantly thinks of some example of someone who's telling you about his gains.
Sean Donahoe: Tell me about your gains, Phil.
Phil Newton: You know what, since the New Year, and since the demise of the meteoric climb that we've seen with BitCoin, surprisingly I'm not seeing a great deal of gains grow anymore.
Sean Donahoe: No, although I'm seeing one, I'm not going to mention their name, but there's one that just struck me yesterday, he's trying to get people to become an investor. Now last time he was a crypto expert. Before that, he was a real estate expert, and you always see pictures of him leaning up against his Lamborghini that's in his garage, and now he's telling people the secrets of Warren Buffet, and ...
Phil Newton: Is this the guy, is this the guy who's read a thousand books? He's one of two people-
Sean Donahoe: Yes, yes, yes, yes, yes.
Phil Newton: He's either the guy with the crazy perm, or I've read a thousand books, and look at my library, yeah. I know the one, yes. Mumble, mumble, mumble.
Sean Donahoe: Yes, yes, and yeah I again, I see stuff like this and it's just so BS. It's just distasteful.
Phil Newton: I think it's mostly about their ego, where people like that, just to be broadly speaking. Look at me, look how fabulous I am, look at the lifestyle I've created, because of crypto success, or stock market success. And to be fair, I'm not none of that. Yes, I've done it before, I've done exceptionally well over the years, but I don't need to ram it down my throat because, what I'm doing, it's not about what I've done. Yes, I've been successful, but I'd rather talk about the students that we've helped. We've helped them gain some, the start of their mastery. To me that's more important than look how great I am. As weird as it is, I always like to try and say, while yes I am a talker, I'm very conscious of that. But I've not got an ego that goes along with this trading.
I am pretty good at what I do, but then equally, there's other people that are also equally very good at what they do. I happen to be able to teach this very, very well, in a way that people can replicate. And that for me, is what I'm most proud of. Be able to get people to replicate what we're doing, and by doing that, it's not about me or my ego, or the books that I've read or the cars that I've bought. I've done all of that and worn the tee shirt and more. But, it's not, about us, and that's what we're trying to say. It's about you and getting you to replicate this process, because otherwise, what's the point in us doing all of this? So take the ego away, and what have these figureheads got? You know if you take the chest pumping, and banging, and beating, and look how great I am, they're not saying anything. They're not providing anything of any value to anyone. They're just showing.
Sean Donahoe: Well it's also trapping the lowest common denominator and again, a lot of the customers out there that fall for that, are the guys that they want to empty the wallets of. And that's really the ...
Phil Newton: It's sad to see.
Sean Donahoe: I mean I could, I love sports cars. I'm a gear head. I love my fast cars, I love my muscle cars, I could post all sorts of pictures, leaning up against some of the most beautiful cars in the world if I wanted to. Or I could go like a lot of these guys, go rent a Lamborghini, lean against it and take a photo and say how wonderful I am. Or, go out, yeah I fly private every now and then. Great. Doesn't mean I'm leaning against the plane like it's mine.
Phil Newton: Doesn't mean I'm doing it every weekend.
Sean Donahoe: Exactly. You know it's ridiculous.
Phil Newton: The other thing as well is, show me your skeptics will come back and say something like, "Show me your statement." And I've been down that road and I've done that. And all that does is create a lot of headache and heartache for me. I found it quite frustrating when I have done that publicly, and it just attracts the type of people that I don't wanna work with in a strange twist. And what I tend to do these days, is the people that ask, they're not the people I wanna work with for a start, usually, most of the time, but I typically respond to the show me your statement type of questions, prove it if you like. And other than doing it in real time every day for the last X number of years. You know other than that proof, show me your statements is, you know me show you my bank statements, and trading statements, will that make you a better trader? And inevitably, it's no.
Well then rethink your question. I'm a very open person, what do you wanna know? If show you my statements is not gonna make you a better trader, if you can ask me a question that will help you down the road of becoming more successful, ask that question, and I'll gladly answer it. And I'll answer it and help you understand to the best of my ability. But the reality is, they never come back with more suitable question. They're more fixated on the money that you've made, rather than the skill that they can learn that will help them achieve the money that they can make. And it's just a different mindset of person that you wanna deal with.
Sorry, I kind of got a bit rancy, kind of got a bit rancy about that subject.
Sean Donahoe: That's okay, but I'm gonna take this a little step further, because this is a really great point that we kind of touched on, and again, another one of our side tangents-
Phil Newton: It's a bone of contention.
Sean Donahoe: ... what is the right question that they should be asking?
Phil Newton: It's different for everyone. Yeah, I've gotta admit, there's no single right answer. But it's the problem that they're stuck on at that moment. That's the right question. So it's not about, again if Sean comes to me and says, "Show me your statements," will show me the statements help you become a better trader? No, okay well what are you stuck on right this moment? That's the thing that's most pressing. What are you having difficulty with? That is a more, I appreciate a more broad catch all type of question, but ...
Sean Donahoe: So on the flip side of that, the one thing I would think was the right question, and I think this oftentimes when we're speaking with people, I think this is the question they're asking. Or, the question they can't quite articulate is, is this gonna work for me? Can I do this?
Phil Newton: Yeah, that's it. That's it. That's it in nutshell, yeah. But they're looking at the people's success and they want to be able to replicate that success. So that's really the unsaid question, that's it in a nutshell. That's the unsaid question. Now interestingly, we don't need to answer that question. That's not their question, but that's what they're really asking when they say, "Show me your statements." So 100% now. Perhaps a more accurate question is to, what are they stuck on at that moment? What are they having difficulty with. You know that's what I need to know, because at that point it's then gonna help them get past that hurdle that they're experiencing, and then they can move on to the next hurdle, the next thing that they're struggling with, because it's not here's one problem, here's the solution, and wave a magic wand and it's all fixed.
You know it's a process, it's like anything. It's like starting a business. I'm having a staffing issue this week, for example. I need to hire more flexible staff, for example, or maybe, I've got a production line problem.
Sean Donahoe: You need more ninjas, you need more ninjas.
Phil Newton: So yeah maybe you've got a production line problem, maybe you've got, you know I'm just trying to use real world examples. You know trading, we're gonna hit those same hurdles. I've got a production problem, I've got a staffing problem. Maybe you've got key holders that need to open up, or you've not got enough key holders, and you get where I'm going with this. There's real world examples and comparisons with what we're doing with trading. So it's not gonna be one problem, that's ultimately what we're trying to get to. What are you stuck on at that moment, is what I need to know. Again, there's no specific question that there is the better question to ask. It's what's your situation at this moment, and where are you up to in your journey, and okay, you can't get past that point. Well, let's put a plan in place to get you past that point, and maybe help you avoid lots of other pit falls along the way, to give you a systematic approach and a structure to your ... you know to regiment your trading routine. That's my objective with coaching people.
Sean Donahoe: Absolutely. So bringing it back to what we were talking about, and again hit the nail on the head. Very relevant to what I was gonna say here. The ninja were basically master of camouflage, deception, and sneak attacks, but again, the focus in relation to trading is, the focus on adaptability, in developing your own strategies to suit your own exact needs that you have as a trader. It's all very valid if you have the right focus and understanding of the situation you're in, and a foundation to build from.
One thing you can't do is pick up a book and become a ninja master, despite how many home study ninja courses are out there, offered for sale in martial arts magazines.
Phil Newton: I suppose it's like being an armchair commentator. Use a sports analogy. I'm gonna attempt a sports analogy Sean, you know I'm not a sport person. But it's like being an armchair commentator.
Sean Donahoe: Okay, drum roll please. Drum roll please. Okay.
Phil Newton: But that's it. It's like being an armchair commentator. Everyone with the benefits of hindsight, can say what the coach should have told the team to do.
Sean Donahoe: Indeed, indeed.
Phil Newton: Everyone can do that, but when you're on the sideline, when you're in the heat of the moment, the coach made the right decision for the team at that moment, in the heat of the moment essentially. You know that was the right decision that they could come up with at that moment, but without the pressure, without the emotion, without the, "We're on the clock here boys, and we've gotta make a decision, we've gotta make a play." Everyone at home can go, "Of course, they should have done something different." So I would rather be the person on the sidelines, and make the mistakes. But I'm in the trenches doing it, versus the armchair commentator. And the armchair commentator in this case is the chest thumping person saying, "Look at how many books I've read and I'm the best person, and I know all the stuff," but they're not doing it in the real world. That's what I've got issue with.
Sean Donahoe: Absolutely. So, instead of trying to pick up a book and trying to become a master martial artist, or ninja practitioner ...
Phil Newton: Just go and do it. Just apply it. One page at a time.
Sean Donahoe: Yeah, you have to work with someone who's come before you. Who's learned all the lessons and can pass that knowledge on, directly to you. Who's correct in giving you the foundation to build your experiences on, and then take it to that next level.
Phil Newton: And there's some great people out there. Really some great people out there. I've got to mention, we do what we do. We're good at it. We've been doing it a long time, but if you wanna, as we keep saying Sean, if you wanna learn how to day trade, we don't do that. So go and find someone to teach you how to day trade, but if you wanna feel the top, armchair, read the paper, a nice relaxed approach that's not time intensive, then maybe give us a call. You know you've gotta find right, again, ninja or samurai, or what you wanna do. It's the same kind of principles that we're talking about. There's a right strategy for the right tool for the right job for the right person for the right situation. What do you want from your trading? And that's gonna help you dictate and determine which path that you go down.
Sean Donahoe: Absolutely so, moving on to the last section of this segment, way of life. Now the samurai lived by well, Bushido, Bushido, Bushido. Try and say that three, four, five times, it's gonna get complicated. But it was a strict code of ethical and moral principles that every samurai was required to observe. It was largely unwritten, unuttered, but deeply understood. It was the result of years of military training and discipline. Breaking the tenants of Bushido often resulted in severe punishment and even death. So among the rules were honor, courage, loyalty, self control, etc., etc. Good solid foundations, and there's about seven of them, I won't go into each one. But it is generally understood to be the rules of Bushido.
But the parallels to trading here are, well as we mentioned in the beginning, trading plan, trading plan, trading plan. It's the same basis that Phil mentioned in the beginning. It's kind of like not only the basis of trading, but also the way of life. The way you approach the markets is also reflected in your trading plan, because it's reflected on your specific goals, your needs, your requirements for your trading, around your life, and your life as a trader. It's a business, it's t business plan. It's the core, it's the guiding light, it's everything that your business revolves around. So what would you say in regards to that set up?
Phil Newton: Yeah, I mean once again, these are all things that we've been preaching in a variety of different ways, and we did say, I did touch on it earlier, for me trading is not just something I do. It is a way of life, mainly because how I got into trading at such an early age, and it's always been there in my life. I've grown up with it, I've developed with it. It's always been something that I've wanted to do. And again, these days I want to trade, but I want to have a lifestyle around it, so I'm very conscious that the way I approach my trading is, going to reflect the lifestyle that I wanna live. And the way that I approach trading is also how I live my life. You know can I, do I wanna do this today or can I do it tomorrow, if it's a problem, can I do something about it today, or do I need to kind of get more information or speak to people and do it tomorrow, or do it next week.
That's kind of what I'm doing, and my trading style is, am I gonna trade this today? No, if not, it might be a maybe, or maybe I'll put it on a watch list and look at it tomorrow or next week. That's the kind of the broad principle that I kind of follow with, with my life and the things that I do. You know should it be done today or can it be done tomorrow, or next week?
Sean Donahoe: There you go. Now on the ninja, on the flip side of that, they have no code of conduct. They were mercenaries for hire. Patient, hard working, inventive, and disciplines, but they were not-
Phil Newton: Highest bidder won.
Sean Donahoe: Exactly. Now while they don't have a code of conduct, they had their own approach. It still parallels with trading plan, trading plan, trading plan. I mean at the end of the day, both the samurai and the ninja, they had their approach.
Phil Newton: I might compare this, in this context, I might compare this to strategy flipping. You're gonna go with the highest bidder. So this is perhaps where being the ninja in this element might be the danger. Yes, you've got all these strategies available to you, but then the danger in this case is being the ninja in this very tenuous comparison. You know you've got strategy A, strategy B, strategy C. The highest bidder wins. Okay, this strategy is making money this week, so I'll have to trade this strategy next week. But that's the week that it doesn't work, so you jump to strategy B, because that's out performing strategy A and strategy C. And then you jump from another strategy, or the last signal on strategy D was a good one, so therefore the next strategy, the next trade on strategy D is gonna be also another great one.
And you just jump around, and jump around, and jump around. I'll try not to break into song, but you get my point.
Sean Donahoe: I was gonna say, I'm losing my head is all.
Phil Newton: But you're jumping around from one strategy to the next, just looking for the highest bidder in this example, you know and the reality is it does not work in trading. So that's the big cautionary tale, and that's what you want to avoid., is have the discipline to stick with one strategy, one methodology. Have that foundation in place, and then you can layer on other strategies. But if you get into trouble and you find yourself jumping around, you can fall back onto that base strategy that we're always harping on about.
Sean Donahoe: Absolutely. Now I've got that song stuck in my bloody head, thank you very much. What was that, House of Pain?
Phil Newton: Something like that, yeah jump around, jump around.
Sean Donahoe: I think it was yeah, dear me. Anyway, so which would we think were the better traders, the samurai or the ninja? Well, honestly neither. And we hinted at this earlier on. Both have inherent flaws, but if you take the best of both, if you bring in the elements of the professional trader, which we do, and then bring in the flexibility of the retail trader, which we do.
Phil Newton: And then that gives you the best balance of discipline and fleet of foot as we were talking about earlier.
Sean Donahoe: Indeed, you have, well basically if you bring in the best of these elements that we've described here today, then you have an awesome combination. So, and here's a little parting factoid, little bit of ninja geekery, so to speak. But some ninja were also samurai, who cross both lines. Basically by the day they would live and show themselves as honor bound samurai who lived by their specific code of conduct, then at night, or when the needs arose, they would actually bring on the aspects of that mercenary for the right hire. So basically, they break the tenants.
Phil Newton: So Bruce Wayne during the day, and Batman at night. Is that what you're trying to suggest?
Sean Donahoe: Basically, if you wanna take it that way, absolutely. There are parallels there. But it's the best fusion of both worlds, and as a trader, keep it in mind because again, while this was done more for fun, and you know again, there's a lot of lessons under the core here that give you the ability to think about yourself in both terms of samurai and ninja, but ultimately as a Rebel Trader.
So with that being said, let's move on.
Automated: And now, it's time for the Rebel Trader Tip of the Week, brought to you by Ready to take your trading game to the next level? Discover where smarter traders come to get coached by the best, and learning to trade just got was easier. Trade Canyon. Smarter traders live here.
Sean Donahoe: Okay, so Rebel Trader Tip of the Week. Making sure you have a 50,000 foot view is essential. Some people get too bogged down in each individual trade or the performance of every damn tick in the markets. One of the reasons we focus on this wide array of positions, or portfolios of stocks, is that again, we're bringing back to this business analogy, you are the manager of a trading business, working on your business, not in your business. So while you are placing the trade, you can consider each of these trades like an employee doing their job that you hired them to do. There and again, by giving them the room to actually do what they need to do. Which is make more money for your business. Micromanaging is not a way to achieve efficiency or success. The 50,000 foot view allows you to manage, and not be managed by the markets. What say you Phil?
Phil Newton: No, I agree. I mean we actually covered this. I had my epiphany the other week in the previous show where, you know your traders could be considered like an employee, but your ...
Sean Donahoe: Yeah, but I was talking about, yeah that's right I was talking about the dollars, every dollar working.
Phil Newton: Yeah, you're worried about the portfolio as a whole, and you're not so concerned about the individual trades to the point where you're micro managing, should I take a small profit or a small loss? And you've still got to do some degree of that, I appreciate it, to be able to take profits, but you're not worrying about every fluctuation in price. You've got set milestones. Has it reached target in the time you're expecting? No. Well that's when you can cut the trade, or it's, it's producing at target. We're at target one, cut the trade. You'll not worry about it on its way to targets, or if you're only a third of the way there for example, and you know it's no where near where you expected. You know it might be considered micro managing.
So yeah I mean, when I had that epiphany the week, I was quite excited about it. It was a good comparison, good analogy to use. And you're worried about the again, we think about it in the business context. You're more concerned with managing the ship as a whole, and you're not in the engine room shoveling coal.
Sean Donahoe: Pretty much exactly, love it. So there you go, the 50,000 foot view is essential. Don't manage your portfolio, don't be managed by the markets.
Phil Newton: Don't be a dick for a tick is how I've always phrased it.
Sean Donahoe: And as so eloquently extolled by my partner in podcasting, there yeah.
Phil Newton: Just bringing the tone down, for the poor farm boy level.
Sean Donahoe: Absolutely. Absolutely. Swing high, swing low. Okay, let's move on.
Automated: If you've got questions, they've got answers. Sean and Phil dive into the virtual mailbag, for this week's Rebel Traders Quick Fire Round.
Sean Donahoe: So, taking a dive into the Rebel Trader mailbag, and having a look at the questions here. Got a question here for you, which I think is right up your alley. What exactly is a prop trader?
Phil Newton: A prop trader, it's shooting for proprietary, so if you've got, so for example, if we had a trading room, basically it's just a fancy way of saying, we're buying a load of computers and we're ask people to come and trade our strategy with our money and maybe they fund some of their money in their accounts, they might be considered a prop trader. A proprietary trader. Their using our system, and our tools, and our methodologies, and some of our money, and some of their money, and we split the profits. , that's one example of a prop shop.
Sean Donahoe: There you go, that's a prop shop, so the traders in that prop shop are prop traders.
Phil Newton: Yeah, all it stands for is proprietary. You're trading someone's proprietary system. It might be my system, it could be your system, but essentially it's, you're getting a trader to come in and trade your methodology.
Sean Donahoe: Now here's the other thing, and I know this would be a follow on question. Why would you be a prop trader? What's the advantage or technical advantage?
Phil Newton: Advantage is, if you've only got a small sum of money, and you don't have a bog enough account, you can buy into a prop shop. Let's just say you've got $5,000, then when you start to develop a track record with the prop shop, they might top you up with, say $50,000. And then when you show some more consistency, they might add another $50,000. And then suddenly, you can be managing a half a million accounts, and they're gonna share in the profits, and you're gonna share in the profits of the strategy, and you're essentially using their money.
Sean Donahoe: So there you go, so that's what a prop trader, a prop shops.
Phil Newton: So why would you do that? It allows you to get into trading at essentially full time, and have an interesting enough trading account to make it worth while.
Sean Donahoe: Fair enough. Okay, what else is in the mail bag? I think he's happy, that was a very definitive answer.
Phil Newton: Yeah, so how do you start with Black Swan Investing? It's a question I have actually been asked once or twice. How do you trade at Black Swan Events, or how do you invest in a Black Swan Events. It's an interesting question. I'd like to see how you kind of handle that.
Sean Donahoe: Well the first approach I would have is if, you're intentionally trying to invest in Black Swan Event, that's like trying to play chicken with a freight train.
Phil Newton: Catching a falling knife might be how people who trade the markets phrase it. You're trying to catch a falling knife. Black Swan, something bad is happening in the markets, a financial crash that we saw, maybe a flash crash, I mean even earlier this year we saw a major sell off, a spike in volatility, you know there was something going on in the markets. You're trying to trade that as it's happening, that's difficult. That really is difficult to do.
Sean Donahoe: It was something that I would say is not advisable, certainly not for novice or new traders.
Phil Newton: If you happen to be on its as it's going, because I'm of the view that if you carry, if you do what you're gonna do anyway, and you trade your system, your methodology, you're gonna be involved in a Black Swan Event as it's happening. The whole point of a Black, you don't know what's gonna happen. That's the point of it. You might suspect that-
Sean Donahoe: That's exactly-
Phil Newton: ... you might suspect that I could happen, because to be fair, the financial crash that we saw in 2008, everyone knew who had half a brain cell, knew that it was gonna happen. We just didn't know when it was gonna happen. You know for two years, I was talking about it. I mean how many years have we been talking about a bear market? Maybe five years that I can count, we've been talking about it for quite a few years. We know it's gonna happen, we just don't know when it's gonna happen.
Sean Donahoe: We're way overdue. We're way overdue, that's for sure.
Phil Newton: Yeah.
Sean Donahoe: And that's just based on common cycles, so maybe the cycle has changed, because again-
Phil Newton: Maybe something's changed.
Sean Donahoe: ... information flow and the trading environment's changed, so then again, information is more prevalent and faster than it has been in any time in history. Certainly through the recent market cycles that we've seen over the last 20, 30 years. And that may have changed the speed in which these cycles will slow down these cycles, but again, pressure is mounting, and pressure has been mounting for a long, long, time. We've seen a lot of pressure release in the last few months, but again, at the end of the day, there's still a lot going on. We see it in many markets, many bubble markets and everything else, but it's always great to see them after the event. Hindsight being 20/20 as you said earlier on. So I would say that, you might be involved in a Black Swan event, but if you follow a lot of what we say and recommend, you'll actually be protected, because you'll have a balanced portfolio and we'll have one.
Phil Newton: After the Black Swan Events, there are strategies that we'll take advantage, because if you imagine the world financially speaking is imploding, either broadly on the indexes or a market, or a sector, or an individual stock. There are ways of trading after the events because usually accompanied by these things, there's going to be a spike in volatility and to be fair, this is actually Andrew's, one of his specialties is trading these Black Swan Events. But, it's waiting for that spike, the expansion and volatility, and getting positioned to ride the contraction of that volatility. There are strategies you can trade but, trying to trade at Black Swan Events, you need deep ... Just thinking back to the volatility pop that we saw. What was that big story that kept coming up every now and again?
Sean Donahoe: About the guy that kept waiting, and waiting, and waiting. I was just thinking the very same thing.
Phil Newton: How many years? How many years was he trying to position himself ahead of a Black Swan Event, which is this case was a spike in volatility?
Sean Donahoe: He was trying to do many, many months. Yeah, he was doing it month after month, and rolling that position. Rolling and magnifying it, and I think he was a long, long time, waiting for that giant.
Phil Newton: Hundreds of millions of dollars was spent to make by comparison, a very small return on capital that was used. Was it worth it? Hey he made all the headlines, if he's looking, if he's looking-
Sean Donahoe: He made all that, he made a shit ton of money, but not the amount of risk.
Phil Newton: ... yeah as a return on the capital, I personally think it was a bad trade. I mean it was a great play, but he was just way too early with it, as it turned out. They made money with it, but was it worth all the heartache? Probably not.
Sean Donahoe: Not from my perspective. It's a good headline but not an efficient use of strategy.
Phil Newton: Yeah, I mean if you wanted your ego stroked, then it was a great trade. But the heartache and frustration to maintain it, and that's what trading a Black Swan Event, for a couple of years, this guy was trying to, and very astutely and very smartly saw the writing on the wall for what it was. Trade at the Black Swan Events, but the timing of it was just way out of sync. And that's what makes it difficult to trade it, because if I tried to trade a bear market, because I've been banging on the bear drum for a long time, but if I tried to trade that, I probably would have bankrupt myself.
Sean Donahoe: Exactly. I actually had, at the end of last year, I had a volatility play, but I kept rolling, because I just felt like, very similar to this guy, there was a lot going on, but I eventually thought, okay no, the risk is not worth the reward here, and I got out of it. Now, again-
Phil Newton: With hindsight, you could have maintained it, and we would be having a very different conversation.
Sean Donahoe: Absolutely, again if I'd kept it going for another month, two months, I would have been quids in, and doing very well. But again my risk versus rewards profile was like, "No, that's not it. I'll cut my losses." I made money in other areas. Wasn't a big deal. I'm not gonna cry over spilled milk, but again, trying to catch that falling knife is oftentimes not the smartest way to trade.
Phil Newton: Deep, deep pockets are required.
Sean Donahoe: Yeah, it's not the smartest way to trade. We'd much rather have consistency over a period of time, and reliability in our ability to trade, rather than trying to do what, basically hit a grand slam.
Phil Newton: Yeah, I mean for me, just to kind of put a line under it, the events while they happen once a year, two or three times a year, maybe if you're lucky, the really big events happen once a decade. They don't happen often enough for me to even attempt to trade them. I mean yes, people's strategies are to do this, and they've got the funding and the finance behind them, but for me on a personal level, they just don't happen frequently enough to make it worthwhile. I mean, even with Andrew. Andrew's strategy is that even maybe three or four times a year, the conditions are right enough to trade after the events, and trade the volatility contraction as we were just talking about, but they just don't happen with the frequency to make it an everyday trade.
Now I want something to do every day, and for that reason, it's not my style of trading.
Sean Donahoe: Absolutely. So okay, last question for you. Is investing in stocks at a young age a good idea?
Phil Newton: It's always a good idea, yeah.
Sean Donahoe: Now, to me the answer is, a resounding hell freaking yes, and I wish I'd done this when I was very, very young, rather than when I did.
Phil Newton: Well I was. I did start young.
Sean Donahoe: I mean basically, as soon as you can get a head start the better.
Phil Newton: I did start young, I mean I was hand drawing charts at 15 as you know. But, you know any time that you can take control from an alleged professional, even then I didn't understand why people would hand over money to manage, even just a pension fund, and give that money to some snot nosed kid who's fresh out of university who's got zero experience. That was my view point, even all the way back then. I didn't understand why people would do that because they were as clueless as everyone else.
So if I just put a little bit of time into understanding what was going on, I thought I could do better than the pension funds and manage my own retirement. You know that was one of the driving motivations behind it. Plus I had a facilitation with making money from the stock market, obviously. But that was always something that I just didn't get, why people would have some 25 year old kid, who doesn't know their ass from their elbow, making investment decisions on your behalf, when they've got no interest or invested interest in making sure that their ideas work out. And probably because they're looking to advance their career, which is more important. In a couple of years, they're gonna bugger off somewhere else anyway, and forget about the investments they've made on your behalf for your retirement. Why would you do that? So yes, of course, of course. Taking control of your own finances, even in a small way, is a good idea.
Sean Donahoe: Absolutely. As long as, and I'm gonna put a little caveat there, as long as you have the ability and the capability, and the time to do that. Now the question was, investing but investing and trading, either way. Get into it, understanding how money works, how you, you have your best interests at heart. They don't. This is a thing that I talk about at lot.
Phil Newton: Exactly. At the very least, learn enough to question the person that is looking after your welfare, and have that conversation with them. Your financial welfare. You know, have enough information, to be able to ask difficult questions to the people who's looking after your money. It's your money they're looking after. They're trading on your behalf. Even the simple question of, "What are you doing, and why are you doing it?" If they can't articulate that to you, maybe you should reconsider if that's the person.
Sean Donahoe: Yeah, that's certainly a good question to ask them.
Phil Newton: That would be the minimum, the minimum criteria. Even if you don't understand what they're telling you. If they can come to you with a semi reasonable articulate answer, and if you don't understand something, just keep asking questions. Explain it to the poor farm boy in the room, as I like to say. Break it down to me further. Just understand what's going on. And from that, you'll be able to start asking more informed questions next time. And that's how your knowledge and your experience will grow. You don't have to push the buttons yourself if you don't want to, but at least ask the questions of the people who are doing it for you, and just make sure that they can give you a satisfactory answer.
Sean Donahoe: Yeah, Phil Skywalker here has the right angle. So yeah, all good. Okay, with that being said-
Phil Newton: Not my first rodeo.
Sean Donahoe: ... there you go. Ye haw! Okay, rock on.
Automated: Don't forget, if you have a question you want to ask Sean and Phil, just go to and your question may be featured on a future show.
Ut-oh, what's that smell? It's time to call out the Wall Street shenanigans, main stream confusion, and outright hi jinks and hocum of so called experts. Yep, it's time for Bullshit of the Week.
Sean Donahoe: So okay, Bullshit of the Week, and this one is very much a horse, trying to capture it. Gate is open, horse is gone, and you're left wondering what the hell happened.
Phil Newton: You're trying to say that the horse has bolted, is that where we're going?
Sean Donahoe: It has. It has bolted. It is gone. It's picked up it's lunch basket.
Phil Newton: There's a cloud of dust in the horizon, it's well and truly out the gate, is that what you are saying?
Sean Donahoe: Indeed. And so I mean. Honestly I was kind of going through the market news and everything else, and again, this one tickled my radar. There's a few different stories, tickling the radar. But this one is the one I had to settle on, is Twitter is now using behavioral signals to mute trolls in conversations and such.
Phil Newton: Wow really, you mean they're trying to stop cyber bullying and hate crimes, and cyber nonsense, and idiots calling other idiots you know, they're an idiot. They're trying to put a clamp on that, is that what you're trying to tell me?
Sean Donahoe: My God, it's only taken 10 years.
Phil Newton: Too little, too late. They've been crying out for some type of dare I say, regulation. But then, it's very Big Brotherish when you start doing that.
Sean Donahoe: It is, and here's the thing-
Phil Newton: It's necessary though, sad to say, but unfortunately, those keyboard warriors need reigning in sometimes.
Sean Donahoe: Well yeah, and I mean, well Twitter was founded in 2006, okay, and one thing with social media is, and we've all seen it, we all know about it, is it gives people the anonymity to be assholes. And we've certainly dealt with, in many, many different businesses, we all have social media platforms.
Phil Newton: We've all got one, we don't need yours.
Sean Donahoe: Well, that's a different angle I was never gonna go down, but okay.
Phil Newton: You get the sentiment, yeah you got the sentiment.
Sean Donahoe: You get the sentiment indeed. So yeah, we've dealt with trolls and everything else over the years, and in the age of machine learning, I don't see anything wrong, or why it's taken this long to come up with a solution to deal with the troll aspect, and everything else. But it's taken all this bullshit with Cambridge Analytica, and all this scrutiny on social media platforms.
Phil Newton: It reeks more of arse covering, just in case. "Oh we better do some of it now, because we might be next in the firing line." That's what it speaks of more to me.
Sean Donahoe: Yeah, pretty much, and then you got the same, I mean you have the same on Facebook, YouTube.
Phil Newton: Well it just seems to be, "Oops better pull our socks up here boys, let's do something at the very least, or be seen to do." I think the key there is be seen to do something.
Sean Donahoe: Well exact, now the flip side of this, is something you touched on, is then that becomes censorship. Who decides what is trolling and what is not? Who decided on what's actual open commentary and discussion?
Phil Newton: Because being offended is very subjective. Sad to say, but unfortunately that's just the way it is. You know one man's jovial-
Sean Donahoe: Well I find your oppression offensive.
Phil Newton: Yes I find the fact that you are offended, offends me. You know? Where do you draw the line. I get why it needs to be done on, and certainly at the extreme level that we're talking about, but at what point, where do you draw the line? What is free speech versus censorship and all the rest of it?
Sean Donahoe: Well, the interesting thing, and this is one thing that a lot of people have a problem with over here. And again, I love this, one of the reasons why I'm in the United States, I love this country. I love everything it stands for, I love a lot of the ethos, the patriotism, culture, the atmosphere. I absolutely am right here where I am.
Phil Newton: One of the trolls, from what you were saying?
Sean Donahoe: Well exactly. You know and at the end of the day ...
Phil Newton: You just weren't quite happy here in Blighty.
Sean Donahoe: Yeah, but one of the things here is you have protected free speech rights. The first amendment which is the right to free speech. Now the right to free speech means the government shall not infringe on your ability to speak your mind. Basically, in a nut shell. That doesn't extend, unfortunately to these private companies and their platforms. Your free speech rights do not exist in a private platform. They have the ability to shut you down.
Phil Newton: So if it, if you're your rights-
Sean Donahoe: The openness of the platform.
Phil Newton: ... if they've given you, the openness of the platform, then maybe yeah, use some-
Sean Donahoe: They have the right to shut you down and censor you.
Phil Newton: ... Yeah some form of censorship can be done. But I suppose it still comes to, where do you draw the line?
Sean Donahoe: Exactly, and again, that's gonna be really critical, it really is difficult.
Phil Newton: It's a tough one, it really is, as we said earlier rather flippantly. It's, everyone gets offended at different levels, for different reasons for the same thing.
Sean Donahoe: Yeah well the problem is that-
Phil Newton: Some people are, "It's a joke," and the next person might be, "I'm offended." Let's sue their arse off.
Sean Donahoe: And then when they impress that, or they force that new metric on everyone else, and then again, that's really becoming a difficult platform and difficult area.
Phil Newton: It's a difficult subject that, it needs tackling, I think it'd be fair to say, broadly speaking, but it's a difficult challenge to get right, and they're gonna be mistakes made, I think.
Sean Donahoe: Oh absolutely. And here's the other thing. I think we all need to be, I think we all, I mean just in general-
Phil Newton: I think they should be allowed to do it, yeah.
Sean Donahoe: ... culture, society, which it's from, just there needs to be just a lot less assholes, and the other side needs to develop a lot thicker skin.
Phil Newton: Yeah, don't be offended, it's just words from someone you don't know on the other side of the planet. Don't worry about it.
Sean Donahoe: Exactly, so I mean Jesus, if I, put it this way. I would not have got anywhere in business if I had taken a lot of the criticism, and the trolling, and any of the other nastiness that comes in business, if I had taken all of that personally and everything else. Because here's one thing, whenever you're, and this is applying to trading as well as business. Is when you succeed, other people who're out there are pulling you down, or trying to pull you down. They're again, it's like, "Oh look at you, aren't you freaking special?"
Phil Newton: "Who do you think you are? Ooh, trades in the stock market, eh?"
Sean Donahoe: Try to pull you down, and put you down, and everything else. "Oh look at you. What do you wanna be, one of the banksters? Wanna be one of those Wall Street half wits?"
Phil Newton: I've had it all, heard it all, and ignored most of it.
Sean Donahoe: Exactly, thing is, ultimately you've got your goals, you've got your purpose and everything else.
Phil Newton: "Why don't you get a real job?" Because I like doing nothing for most of the day-
Sean Donahoe: Because I like money.
Phil Newton: Because I don't wanna work for the man, man.
Sean Donahoe: Indeed, yes you know. So ultimately there needs to be something done with it. They're a wee bit late to the party. A lot of this momentum is coming because of criticism.
Phil Newton: Needs to be done, but too little, too late.
Sean Donahoe: Yeah so, get on with it, and let's see what you do and we can criticize you afterwards, and then have another piece of bull shit week.
Phil Newton: We'll be armchair commentators in this regard.
Sean Donahoe: Indeed, indeed, indeed. So there you go. Anyway, that's it for this week's show. I hope you've enjoyed it. I had a lot of fun with this one. There's a little bit of Sean Geekery in the back end here, but please remember the show is not free. It will cost you a five start review. Just go to where you can subscribe and review us on your favorite way to hear the show, and this helps us reach more traders, and investors, just like yourself.
Phil Newton: And if you'd like to reach out to us on one of those social media platforms, the Facebook through this machine, you can find us at the same link,, and then I think we've got pigeon post as well.
Sean Donahoe: Yes, absolutely. Snail mail.
Phil Newton: Snail mail. I think we've got a real phone number somewhere if you actually wanna talk to someone. Hey, whatever works for you. We're not biased. We'll ignore everyone equally. No, if you wanna get in touch with us, by all means. As you've probably gathered, we're very open, very generous people, when it comes to trading. I certainly am, I don't know about Sean. Shh, don't tell him. If you wanna get in touch by all means do so, in your favorite method.
Sean Donahoe: Absolutely.
Phil Newton: What have you got coming up, next week's show Sean?
Sean Donahoe: Just click on, I was gonna say, if you wanna get with us, if you wanna book a call, just go to, and we'll be having a chat with you about whatever you got going on. That's the way to get us, so next week's show, we are talking about future proofing your portfolio, looking to the future, what is going on, what is emerging. Ways that you can also look to add-
Phil Newton: Will Doc Brown be involved in the future?
Sean Donahoe: Absolutely, Deloreans will be involved.
Phil Newton: Excellent.
Sean Donahoe: Mr. Fusions, and when this baby hits 88, you're gonna see some serious shit, yes. So, we can have a look at that, looking at different things that are going on, and ways to kind of add a little future proofing to your basket of stocks and what's coming up. Anyway with that being said, rock the hell on. Hope you enjoyed this week's show. We loved doing it. Any final thoughts there Phil?
Phil Newton: No, I try not to think as you well know, but no it's been an interesting show. Slightly different angle but I think we actually hit on some quite interesting topics and points about trading, and look Bill certainly agrees in part, in the background. Bill's my parrot for reference, he's squawk in the background. The original squawk box.
Sean Donahoe: Is it, he's his own little squawk box, yes. There you go, so okay, rock and roll guys, we'll see you next time. Take care for now.
Phil Newton: Bye for now.
Automated: For more cutting edge trading advice, and a free trader workshop to help you build a personalized trading plan, and make smarter trading decisions, go to now.
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[00:07] Show Introduction

[03:03] Sean: We’re taking a trip a little bit back in history and to the East. We’re looking at the samurai versus ninja, this came out of a weird conversation. Historically, philosophically, and strategically they were very different but there are distinct parallels between the different styles of trading and traders.

[04:47] Phil: It’s interesting and maybe we can draw some parallels.

[06:24] Sean: The samurai were considered to be the greatest warriors in feudal Japan. They followed a very strict set of rules and doctrine.

[07:45] Sean: The ninja were primarily mercenaries. They served anyone who paid their price.

[09:00] Sean: The code of conduct that guide the samurai through everything they do could be considered like a trading plan.

[09:25] Phil: The mindset, it’s how I live my live. It’s that type of philosophy by trying to perform to the best of your ability with whatever you are doing.

[10:00] By comparison, the ninja, their parallel to trading is their sole focus was getting the job done by any means necessary.

[10:14] Phil: Shooting from the hip.

[13:00] Sean: To bring this to trading, being direct in combat they knew they needed a measure of protection against their opponent. For a trader, the opponent is not necessarily the person on the other side of your trade but the markets in general.

[16:20] Sean: Let’s talk a bit about risk mitigation and the pros and cons here. One with the light, flexible armor or the overall adaptability without the safety net.

[16:47] Phil: You could almost compare the big institutional traders as the samurai, everyone knows who they are, they’ve got the status, their flexibility is not great but they’re well trained. The ninja is the retail trader, they can be flexible, nimble, they can be in and out of a position.

[24:55] Sean: I look at this like trading platforms, the primary weapon for a trader is whatever platform they want to use.

[25:45] Phil: They all predominately do the same thing, in slightly different ways. Most of it is down to personal preference and what do you want to do.

[27:14] Sean: People becomes very centered around their choice of trading platform.

[27:22] Phil: I’m very loyal to my platform, I’ve been using them for around fifteen years.

[27:32] Sean: There’s one aspect of this that is a cautionary note, is when it’s something you’re just used to and you don’t know if you’ve got the perfect tool.

[27:48] Phil: I shopped around until I got there.

[29:27] Sean: We all have this loyalty to one platform because of familiarity but is that is that the right platform?

[30:00] Phil: Right tool for the right job but also for the right person.

[30:14] Sean: One thing we talk about is awareness so be aware if the platforms out there so you’ve got the right tool for the right job.

[36:07] Sean: No overly rigid loyalty or reverence of any single tool. It allowed us if there was a better option out there for us as traders that’s going to suit our needs, reach our goals, execute our trades, manage our portfolio that much better then we drop one and pick up another and off we go. There’s a lot of flexibility rather than the rigidity of the samurai.

[36:44] Phil: I completely agree.

[39:20] Sean: There’s many forms of martial arts that all have very similar origins. A lot of them are specialized or derivatives of some of these early martial arts. They all came back to this foundation and this is the parallel with trading, everything starts with that foundation and it’s the core of everything they do.

[40:34] Phil: Having that foundational strategy is one of thing that we focus on is giving someone a foundation. With that experience, they can layer on top and you might add specialty tactics.

[42:33] Phil: People say with whatever discipline they are trying to master, ‘I learnt this from a master’, but I don’t think mastery in a subject should be confused with experience because experience doesn’t equate to mastery.

[46:19] Phil: Take the ego away.

[48:10] I’m a very open person. If you can ask me a question that will help you down the road of Becoming more successful, what’s that question and I will gladly answer it.

[48:53] Sean: What is the right question they should be asking?

[48:57] Phil: It’s different for everyone. It’s the problem they’re stuck at that moment.

[51:47] Sean: The focus in relation to trading is the focus on adaptability and developing your own strategies to suit your own exact needs that you have as a trader. That’s all very valid if you have the right focus for understanding what you need and the foundation to build from.

[53:49] Phil: We do what we do, we’ve been doing it a long time. If you want to learn how to day trading, we don’t do that so find someone to teach you. If you want a relaxed approach that isn’t too time-intensive then give us a call.

[57:27] Sean: At the end of the day, both the samurai and the ninja had their approach.

[57:32] Phil: I might compare this, in this context, to strategy flipping, you’re going to go with the highest bidder. Being the ninja in this element might be the danger, yes you’ve got all these strategies available to you but you’re jumping around looking for the highest bidder. That does not work in trading, have the discipline to stick with one strategy.

[59:22] Sean: If you bring in the elements of the professional trader and then bring in the flexibility of the retail trader…

[59:30] Phil: I think that gives you the best balance.

[1:01:08] Rebel Trader Tip of the Week

[1:01:11] Sean: Making sure you have a 50,000ft view is essential. You are the manager working on your business not in your business. While you are placing the trades you can consider each of those trades like an employee doing the job you hired them to do, which is make more money for your business.

[1:02:25] Phil: You’re not so concerned about the individual trade that you’re micromanaging.

[1:03:25] Sean: Don’t manage your portfolio, don’t be managed by the market.

[1:03:57] Quickfire Round

[1:04:10] Sean: What exactly is a PROP trader?

[1:04:14] Sean: It’s short for proprietary. They’re using our system, our tools and methodology and some of our money and their money and we split the profits. That’s example of a prop shop.

[1:05:15] Sean: What’s the technical advantage?

[1:05:20] Phil: If you don’t have a big enough account you can buy into a prop shop. When you start to develop a track record they might top you up and they’re going to share in the profits.

[1:06:08] Phil: How does one start with black swan investing?

[1:07:08] Sean: Something I would say is not advisable for novice or new traders.

[1:07:23] Phil: The whole point is you don’t know what’s going to happen.

[1:08:45] Sean: You might be involved in a black swan event but if you follow a lot of what we say, you’ll actually be protected.

[1:09:06] Phil: There are ways of trading after the events, usually accompanied by these things there’s going to be a spike in volatility.

[1:11:58] Sean: We’d much rather have consistency over a period of time.

[1:12:58] Is investing in stocks at a young age a good idea?

[1:13:02] Sean: To me, the answer is yes and I wish I’d done this when I was very young.

[1:13:15] Phil: I was hand-drawing charts at fifteen. Of course, taking control of your own finances, even in a small way, is a good idea.

[1:14:47] Sean: You have your best interests at heart.

[1:14:54] Phil: At the very least, learn enough to question the person looking after your welfare.

[1:16:34] Bulls**t of the Week

[1:17:16] Sean: Twitter is now using behavioral signals to mute trolls in conversations in search.

[1:17:38] Phil: Too little, too late. They’ve been crying out for some type of regulation but then it’s very big-brother-ish when they start doing that.

[1:17:58] Sean: Twitter was founded in 2006 and we’ve certainly dealt with trolls and in the age of machine learning I don’t see anything wrong or why it’s taking this long to find to come up with a solution to deal with the troll aspect.

[1:19:10] Phil: I think the key there is to be seen to do something.

[1:19:14] Sean: The flip side is that then becomes censorship.

[1:19:27] Phil: Being offended is very subjective. Where do you draw the line?

[1:19:56] Sean: The interesting thing over here is we have protected free speech rights. That doesn’t extend to these private companies and their platforms.

[1:23:10] Sean: Ultimately, there needs to be something done with it, they’re a bit late to the party.

[1:23:32] Sean: Anyway, that's it for this week. Thank you for listening to the show! Please remember that this show is not free.It will cost you a 5 star review on just go to you can subscribe and review us on your favorite way to hear the show.This helps us reach more traders and investors just like yourself.

[1:23:55] Phil: If you’d like to reach out to us on one of those social media platforms at Facebook and on the Twitter machine, you can find us at the same So Sean, what do we have coming up in next week’s show?

[1:24:45] Sean: In next week's show future proofing your portfolio.

Resources & Links Mentioned in This Week's Show

3 Key Takeaways From This Show

  • There are weaknesses to both approaches, take the best of both and build them in to your style of trading
  • Build a damned trading plan (Yes, we keep banging that drum HARD!)
  • Everything comes from a solid foundation and it is the core of everything you should do

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