For this series celebrating the launch of the Sang Lucci Master Course, we went through the analytics and pulled some of the most popular posts from Sanglucci.com history. Each one touches on an aspect of what’s covered in the course. Enjoy!
“There is nothing like losing all you have in the world for teaching you what not to do. And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. Did you get that? You begin to learn!” –Reminiscences of a Stock Operator
I’ve been re-reading the infamous tomb of trading wisdom, Reminiscences of a Stock Operator, for the past week in my rare moments of downtime. If you have a semblance of interest in trading and haven’t read this book, stop reading. Go buy it, read it, and then come back.
On nearly every page I find myself questioning whether I’m reading Lucci’s words or those of the now immortalized author Jesse Lauriston Livermore aka “Edwin Levefre”. Despite being separated by nearly 100 years, the extent to which these two traders agree on nearly everything trading related planted a question in my mind: What would Lucci’s own reminiscences look like?
Well in 10 or 25 years, there will be a book. Until then, we’re bringing you a post series discussing Lucci’s philosophical evolution as a trader and the lessons he’s learned from specific periods in his career, in his own words. As the foundation for a series, I decided to use a quotation that struck us as perfectly in sync with Lucci’s experience, which you can see at the top of the post.
The rest of the series are my questions, and Lucci’s answers. Starting… now!
Where did you start trading?
I was at a prop firm. For those of you that don’t know, a proprietary trading firm is a place where you can put down a small amount of cash to receive education and leverage on your money, which you can then use to trade rapidly and aggressively. Most of these firms focus on scalping in and out of mid-priced equities hundreds of times a day, with holding periods often times no longer than a few minutes. Now, one thing to note is that these types of firms before 2007 were largely unregulated and offered their traders an obscene amount of leverage. For example, at one point I had maybe $10K cash in my account and was allowed to trade with intraday buying power of over $2 million.
My firm also didn’t really offer much by way of education. They just sat you down next to a few hot shots and shoved you right in the fire to learn the hard way. Strangely enough, I didn’t have a problem with that because that’s in fact how I learn everything. Some say it’s a dangerous way to live, but I say it blesses you with the ability to always come back after failure. You learn to live with failure, and subsequently become a force to be reckoned with because you never go away and you never stop until you accomplish what you set out to do.
I was greener than the forests you see in any Lord of the Rings movies but I was hungry and at some point staring at the Matrix feed called the Time & Sales, I could see the money just like a programmer can visualize his code. It took me about a year and half to pull down a $50K month. Prior to that I would make $5K, piss it away the next month, make $15K, then piss away half the next month. I was in a place where I NEEDED to make money, but I also didn’t respect it.
What was going on in your personal life at the time?
Things with my girlfriend were getting rocky because of money. We just had our daughter. Daycare, diapers, baby formula, gas, food and rent were all expenses that we could barely handle between the two of us. Before the market crash, you could secure yourself all kinds of personal loans even if you didn’t have credit. I went to 3 different banks for uncollateralized (wtf collateral did I have at the time?) personal loans charging over 15% interest and used it to cover our $3K/month living expenses. My girl even took out a personal loan through our college just to make ends meet. The bossman at my prop firm was always money hungry so I convinced him to stake me to get back into the ticket hustling game for a while. I used $20K of his money to buy up Summer weekend tix for the Red Sox and flipped them for 100% gain in about 2 months. My boss was so greedy he got mad at me because I went to a few weekday games which we were going to sell for breakeven anyway. It cost us about $50 and he had the audacity to curse me out after I plopped $10K in his lap once the deal was done. Prick…
Anyways, I couldn’t make a change in my life because mentally there was too much pressure and stress to perform. And folks, when you’re in this kind of situation, most of that pressure is put on by YOURSELF. You sit there and blame others for your inability to cope with the stress but you yourself are to blame, most of the time.
My girlfriend couldn’t take it and wanted out. My Father wanted me to hurry up and do something with my life so he didn’t have to work anymore. All the maxed-out credit cards and loans were headed straight to collections. I had no ample cash stockpile to flip tickets aggressively. All I had was the Matrix feed in front of me, and a desperate need to make it work.
Ready for Part 2? Read on…
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