Genesis of a Trader: How I Got to Stay at Home

I am a lucky man. That's right, I might be one of the luckiest folks you know. I get to work out of my house, doing things I love, and I get to spend as much time as I'd like on family, golf, swimming or whatever hits my imagination that day.

So, if you ever hear me complain, know that it's more whining than anything else: I wouldn't change spots with anyone.

Now, given all this, it's natural I get asked how I got here. How is it that Gary B. Smith -- by all accounts, an unexceptional person -- is entitled to a 42-second commute, while most other folks have to placate "The Man" all day, working their fingers to the bone, all to make something like an idiotic quota they could care less about?

And that's a fair question. So, let me spend today and tomorrow, talking about how I arrived at being GBS, Independent Trader. Next weekend, I'll discourse on GBS, Independent Writer, as I get a lot of questions on that also. As for GBS, Father and Husband, well, I'll save that for another time.

OK, let me start off with what I think is the real secret. Now, it's so darn trite, it gives me a toothache, but here goes:

No. 1: I had a vision. Oh, I know, it's like something out of a Tony Robbins seminar, but there it is. Nevertheless, let me add some clarity. Just as an excellent golfer can visualize his ball flying left to right, hitting about 7 feet past the hole, and then sucking back right next to it, I could visualize myself trading out of the house every day. I could really "see" myself getting up around 5 a.m., perusing the papers, reading up on the market and then making that day's trades. And this was way before I ever left IBM to trade full time. I saw it all in my head, and just kept working toward that reality. Yeah, I know, nothing new here. That's why the next item is also important.

No. 2: I never asked for permission. It's funny, but the things I think I'm relatively good at, like trading and writing, no one ever said, "Hey, go ahead and give 'em a try." In fact, whenever I told someone I wanted to trade full time, they scoffed. Thought I could never do it. In fact, they thought I would lose my shirt if the market ever took a tumble!

Oh, I don't know how many times someone told me, "You just can't make a living trading. Shoot, you're not a professional, Gary. How could you ever compete against the pros?"

So, I stopped asking for people's opinions. Screw it. I believe in myself and that's all that ever matters.

No. 3: I was a sponge. I just counted up the number of books I've read on trading, investing, market psychology, and the like: 75. Now, to that add periodicals, newspapers, Webzines, etc., and I've accumulated a lot of information. Of course, you always toss out about 99% of it, but it's worth it to find those little gems and synthesize them into a methodology suited perfectly for you, and only you.

No. 4: I got lucky early. I've read where many successful traders suffered early losses, to the extent that they were wiped out in the early stages.

That never happened to me, thankfully. I'm certain if I had been beaten up badly at the start, I wouldn't have had the heart to continue. Some people get stronger from a beating; I tend to acknowledge upfront I stink at something and then move on.

Now, that's not to say I was a great trader from the start. No, quite frankly, I was lucky. I started out doing a lot of covered call trading and, being in the midst of a bull market at the time, I thought I could do no wrong. I did eventually get my comeuppance, but by that time, I had a decent stake built up.

Still, never discount the virtue of getting lucky and getting lucky early.

No. 5: I love playing with numbers a lot more than playing with money. I really think if you want to be successful as a trader, you have to love "the game." Now, the game might be different depending on how you trade, but for me, it's all about odds, percentages and money management.

So, yes, it was helpful that I had a pretty good aptitude for numbers. Even better, I find constant enjoyment in just fooling around with my methodology by tinkering with stuff like stops and target percentages. Sure, that's the epitome of nerdiness, but it's that deep love of trading mechanics that keeps me in the game every day. Money? Sure, that's important. But that's a byproduct of what I really love to do.

OK, break time. Hey, it's the weekend. Relax a bit. Forget about your trading. Forget about the market. Instead, concentrate all your mental energies on ensuring my daughter Diana breaks 40 seconds in the 50-yard breaststroke this weekend!

I'll be back tomorrow with the rest of my story ...

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Watch Gary B. Smith and Silicon Valley columnist Adam Lashinsky face off at the first RealMoney conference, live in New York, June 28. The challenge: technical analysis vs. fundamental research.

Says Gary: "Technical Analysis rules, especially when my adversary is the pitiful Adam Lashinsky. Don't believe me? Then come watch me square off with him." -- Gary B. Smith

Says Adam: "Because I research *facts* about companies, I almost never agree with Gary B., who practices a form of voodoo called technical analysis. But when we get into the ring together, innocent bystanders generally enjoy themselves." --Adam Lashinsky

Surviving and Profiting in Treacherous Markets June 28, 2000, Marriott World Trade Center, New York City

For information and registration, go to RealMoney Conferences .

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Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. At time of publication, he held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Smith writes five technical analysis columns for TheStreet.com each week, including Technician's Take, Charted Territory and TSC Technical Forum. While he cannot provide Investment advice or recommendations, he welcomes your feedback at [e-mail].