How my Imagination Turned into Trading Profits

This post was inspired by watching a two year old girl paint her cheeseburger, with ketchup, using a French fry. 

I got into the trading business as a day trader and expanded into a swing trader.  Along the way I never thought I would be trading spreads between two different securities.  Play around.  Make lots of mistakes.  Color outside the lines.  Be creative.  These are some of the fundamentals that I learned from trading spreads and much like the kid and her ketchup, I knew that I was on to  something really cool.

Michael Bigger introduced me to the concept of staying small and rotating your inventory over and over until your value compounds and compounds towards infinity. Value increasing along the money, knowledge, satisfaction, and doing great work vectors. Sounds great but it was only when I actually tried it that I realized it was possible.  Spread trading allows you to see relative value between the two sides of the trade, and play with your food where you previously were taught not to.  Looking at the market from this perspective reminded me that everything I've done well in my life I've done with my imagination.  Imagination is limitless, and if your approach to the market requires your imagination, shouldn’t that make your profits limitless too? I liked where this was going.

So I went and played with my trading.  Put on a trade, closed the trade.  Learned and adjusted.  Put on a trade, closed the trade.  Learned and adjusted.  I put on a stock vs. a stock trade.  Then a stock vs. ETF trade.  Then a ETF vs. ETF trade.  I made directional trades like I always do and then I made statistical mean reverting trades where they made sense.  All those trades were like inventory in a store and I moved them out when they hit my profit or loss level, replacing them with a new inventory of trades.  I stayed small to keep rational and that rationality allowed me to stay creative.  Trading became a process rather than a result. 

If I knew the road to trading success began with sticking my fingers in food I probably would have done it a lot earlier in my career.  Now that I've found a community of traders that share a creative outlook in trading, I have the confidence and support to make the adjustments that I always knew I could. 

This is a guest post written by Eric Gong. Eric is a member of the SpreadTraderPro community. Follow Eric on Twitter and StockTwits.