Jack Schwager’s interview with Jimmy Balodimas from Hedge Fund Market Wizards does a great job of emphasizing the idea that you have to be completely comfortable with your approach to trading.
At one point during the interview, Schwager points out that Balodimas could be far more profitable if he adjusted his trading in a particular way. Balodimas basically responds by saying that he just wouldn’t be comfortable trading in that way, and for that reason, it probably wouldn’t work.
Balodimas was a great inspiration for anyone who trades a bit differently from the standard approaches. He is a reminder that you should stick to your guns when you feel strongly about your strategy.
Top Five Quotes From Market Wizard Jimmy Balodimas
Going along with whatever the market is doing doesn’t make sense to me, and I have to honor that. I have made money every year in my career. Even though my system is flawed – I’m not entirely disciplined and I give myself too much leeway – it has still worked for me. – Jimmy Balodimas
I found it incredibly interesting that Balodimas makes no excuses about his lapses in discipline. He strongly believes that altering his approach at this point would make him so uncomfortable with trading that the benefits would never materialize. His argument to maintain his current approach is the bottom line, and who can argue with that?
My firm has always given me a lot of latitude, which allowed me to stretch my boundaries. While it was uncomfortable, it helped me learn how to make and lose money without being scared of doing either. I learned by trading a lot all the time. – Jimmy Balodimas
It becomes very clear during this interview that Balodimas has some serious balls. His strategy of shorting fast rising stocks can backfire and hurt him badly, but he is somehow able to remain calm in those situations.
Having the ability to keep your emotions in check is essential for any trader, Balaodimas gives us a great example of what that looks like to the nth degree.
I don’t let myself panic. Even if I don’t know what’d going on, I’m not going to sell. I might lose 5 percent more trying to find out what is going on, but I’m not going to make a decision because other people are choosing to make a decision out of emotion. I’m not going to be that guy. – Jimmy Balodimas
Again we see this guy who just refuses to let the market rattle him. No matter what happens, he is able to keep calm and make rational decisions about how to deal with a situation. He refuses to be the one who panics.
I’m not trying to prove I’m right. I’m not trying to prove the market is stupid. I just like making money. – Jimmy Balodimas
Here we see another bit of timeless trading wisdom at work. Balodimas doesn’t care whether he is right or what the market thinks. He just wants to grow his bottom line profits, which should be the goal of every trader.
It can be easy to get caught up in whether you were right or wrong about one particular position. Especially if it’s one you have told all your friends and family about. Whatever type of strategy you trade, you need to be able to detach yourself from your trades so that you can look at them with a clear head and focus on the bottom line.
I knew I wanted it more than anybody else. There was no way I was not going to make it. I always had that competitive drive, whether it was getting into a top college, or competing in college sports. – Jimmy Balodimas
It’s interesting to see how many of the Market Wizards have become successful because they are really competitive people by nature. Balodimas says that he simply wanted it more than anyone else. That is the type of passion that you have to have in order to be a successful trader.