Interview with John Locke
Could you tell us a little about yourself?
I am the managing partner of Locke in Your Success, LLC, an internationally known success coach, trading performance coach/mentor, options trader and creator of the infamous Bearish Butterfly and M3 Trading Systems.
How did you get started trading?
I went to an Investools presentation while at a Success convention in 2006 and got hooked.
How long have you been trading now?
7 years
What do you like best about trading?
I like the freedom that comes with being able to make money without sitting at a desk all day.
What markets do you trade?
I personally trade the Russell 2000 but have clients that trade equities and futures.
What style of trading do you use?
I use complex, positive Theta options strategies on the Russell 2000.
What have been the biggest influences on your development as a trader?
My biggest influence in my development as a trader is the drive to help others become successful traders. By helping others, I have been able to drastically improve my own trading and thereby provide an even better service. It is a win/win all around.
What is the one biggest lesson that you have learnt since starting trading?
The best way to become profitable is to stop bouncing around, DECIDE on a strategy, modify it to your personality and tune it until it works.
How did you get interested in coaching other traders?
Prior to being a trading coach, I was part of a large online options trading community. When people started seeing what I put together for trading, I was constantly being asked to help them with their own trading. Since I was, and still am a success, business and life coach, and I love to help others succeed, I was more than happy to add trading to my business.
Do you focus on coaching of one particular area of trading, e.g. risk management / psychology or finding trades?
I focus on the whole system; the business, the personality and trading style of the individual, psychology, risk management, everything. I want to produce traders that can comfortably trade a system that fits their individual goals, personality and risk tolerance.
How do you work together with your clients? E.g. phone / email / screen sharing?
Most of our work is done via WebEx (screen sharing).
What sort of results do your clients get after coaching with you?
I believe that after our time together my clients will have a much deeper understanding of the trading business, options and themselves, all essential elements of becoming an outstanding trader.
What is the most satisfying part of coaching traders?
The most satisfying part of coaching for me is that moment when people open up to the realization that they CAN achieve their dreams and begin the process of actively perusing them.
What is the biggest but most easily fixed mistake that you see traders make?
The biggest and most easily corrected mistake I see is lack of goals, poor planning and unrealistic expectations. This is the root cause of most of the challenges retail traders face.
Do you recommend journals or other record keeping as an important part of trading?
Yes, as with ANY business, record keeping is extremely important.
What are the most common issues that you see in your clients that prevent them from becoming better traders?
As stated previously, is lack of goals, poor planning and unrealistic expectations which lead to uncertainty, poor decision making and jumping around from system to system; all very unproductive behaviors that significantly delay progress.
What advice would you give traders who are just starting out?
Create a clear set of goals. Know what you want to get out of trading. Know how much time you want to spend working, how much freedom you want, how much money you want to make, what your risk tolerance is, etc. This will help you narrow down the thousands of trading systems to ones that are right for you. There is nothing more depressing than to see someone who spends years to finally learn to day trade, for example, so that he can leave his stinking job and gain some freedom only to realize that, as a day trader, he has less time and has less freedom than he had at his JOB. Do some investigating and think about what you really want so that you can create a plan to get there instead of wasting time trying to get away from what you have and not knowing if your destination is any better.
What 3 books do you recommend traders read?
- Success Principles by Jack Canfield
- Awaken the Giant Within by Tony Robbins
- Failing Forward by John Maxwell
That’s right; none of these are “trading” books. The mechanics of trading is seldom the problem for poor performance.
Any other advice or wisdom from your experience in trading that you could share?
Full time trading is “just another business”. A trading business comes with all the stresses and challenges of any business. One of the biggest challenges to becoming a full time trader is transitioning from a “paid employee” to a self employed business owner. Business owners have money at risk and need to plan for normal business cycles. This means that they will have times where income and profit are great as well as periods of draw down, sometimes for extended periods of draw down, which eat significantly into their working capital. And during this drawdown time, business owners must continue to work at the things that made them successful even though the business may not be making money for them “right now” and they must be confident that, over time, the business will be successful. In other words, it is not a steady paycheck; the work does not always produce instant gratification and sometimes you need to work for extended periods of time with a negative cash flow. Traders who do not understand this often see their savings dropping and mistake a “normal drawdown period” for a system that does not work and panic, often scrapping or drastically modifying a perfectly good strategy or even worse start taking on too much risk, becoming too risk averse or start jumping at any strategy that “seems to be working at the time” which usually results in the trader blowing up and going back to work. So the biggest challenges will revolve around poor planning, unrealistic expectations and the need for instant gratification. The best way to combat this is with clear goals and a good business plan. So get to work and I’ll see you at the top!