Joe Maddon’s Five Levels of Traders

Hey Trader,

I was walking the dog this morning, 900 miles from Chicago, with my old Chicago sports station in my ear. The hosts got onto something Joe Maddon has been teaching for years. He puts every big leaguer on one of five levels.

Maddon managed the Cubs to the 2016 World Series, so he's earned the right to categorize people. Here's his ladder.

Level One: I'm happy to be here. He chased this his whole life and he finally made it. Everything's the best!

Level Two: I want to stay here. Now that he's in the show, he's scared of losing it. Scared players squeeze the bat, and squeezing the bat is how slumps and errors start.

Level Three: I belong here. He isn't going anywhere and he knows it. His only job is being good at baseball and bringing it every day.

Level Four: I want to make as much as I can. He knows he belongs, so now he wants the check. The window is short and the priority is himself.

Level Five: All I want to do is win. Confident, paid, and finally looking at the whole picture. One goal left.

That list stopped me, because I've watched it play out off the field.

I Stood Next to a Lot of Twos and Fours

The trading floor was packed with ex-athletes. Almost everybody played something in high school, plenty played in college, a few played for money.

Looking back, I can put most of those guys on Maddon's ladder. I stood next to a lot of Twos and Fours. Not nearly enough Threes and Fives.

The Twos traded scared and got run over by the guys who didn't. The Fours chased the biggest month in the room and usually blew up chasing it.

The Same Ladder Runs Through Option Pit

Happy to be here. Brand new, or been around the block long enough to recognize a real opportunity when it shows up. Learning the strategies and taking the trades as written.

I can do this without you. Now they're trading, and they're in their own way. They cherry-pick which trades to take, skip the stop, sit through the profit target.

The plan is fine. They just won't run it.

The Overanalyzer. Usually has made money following one of our traders. Also has a plan and also won't run it, but for the opposite reason: too many charts, too much data, too much fear. Can't pull the trigger alone.

The Money Maker. Starts placing their own trades off the strategies they learned from us. Reads a Tilt score and takes an overnight in Project Next without waiting on an alert. Consistency shows up right about here.

The Strategy Maker. Still follows what we do, but has made it theirs. Some of them build a version that fits their own hours and their own risk, because trading is the job now.

Licia Runs This Once

Two and Three are where traders die. One breaks the plan out of ego, the other freezes out of fear, and both land in the same place.

Education is the shortcut past both. Teach somebody a strategy inside and out and the fear stops running the account.

Licia's NXT Mastermind starts Monday. Six weeks, live, Mondays and Wednesdays, where she hands over her method for trading 1DTE overnight options (positions you put on in the afternoon and close the next morning) and the Tilt she builds them on.

She's running it once, and she isn't running it again. Sign up closes Sunday.

Tap this link and take a look.

Your only option,

Mark Sebastian

 

Mark Sebastian

Mark Sebastian

Mark Sebastian is a former member of both the Chicago Board Options Exchange (CBOE) and the American Stock Exchange (AMEX), where he spent years mastering the art of options trading in the most competitive environment imaginable. As Chief Investment Officer at the hedge fund Karman Line Capital, Mark manages sophisticated options strategies for institutional clients. He is the author of two highly regarded books on options trading: ‘The Option Traders Hedge Fund’ and ‘Trading Options for Edge.’ Mark is a frequent guest on major financial networks including CNBC, Fox Business News, Bloomberg, and First Business News, where he provides expert commentary on market volatility and options strategies.

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About the Author

Mark Sebastian

Mark Sebastian

Former CBOE floor trader and CIO at Karman Line Capital. Author of ‘The Option Traders Hedge Fund’ with over 30 years of options trading experience.

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