I finally got around to watching Wolf of Wall Street last week on Netflix. It was a lot worse than I thought it would be.
But not in the way that you might think.
The movie is based on the true story of Jordan Belfort. He was the founder of Stratton Oakmont Inc., a Long Island OTC brokerage that was primarily known for defrauding many shareholders and was eventually shut down. During its heyday, it did the initial public offerings (IPO) for many companies, including Steve Madden.
As a movie, I think it is fantastic. The performances are amazing and historically speaking, it is a fascinating look into one of the biggest boiler rooms in US history. Sometimes it is hard to believe that these things happen, especially on this scale.
But if you are an aspiring trader, it is a terrible movie to watch. In this post, I will get into why I think you should avoid this movie if you are an up-and-coming trader.
How I Felt as I Watched Wolf of Wall Street
As I watched this movie, I had a lot of mixed emotions. First, I wanted to be entertained by the movie.
I really did.
Because it is a pretty damn entertaining tale. They did some crazy, crazy things.
Your basic sex, drugs and Lamborghinis story. The movie opens with the main characters tossing dwarfs in Velcro suits at oversized dartboards.
Yeah, it's that kind of story…
That was just the tip of the iceberg, when it came to what went on at Stratton Oakmont. The movie goes into fairly graphic detail about the events.
The bottom line is that it is a sensational story and it is easy to get emotionally involved. But I was also very aware of the effect that it could have on my subconscious.
Getting sucked into a story like this can have subtle effects on you that you might not realize. So I kept my emotional distance from the movie.
Let's take a look at how this movie could you affect you as a trader. Since I told you not watch it, you probably will.
So this is what you should watch out for…
The 300 Pound Gorilla
Trading is a psychological game. Almost anyone can learn a profitable trading setup. But the hard parts are: matching a system to your personality, sticking with the system and understanding when the strategy is having a normal drawdown and when it is has stopped working.
It all comes down to having the right trading psychology. You really have to protect what Rafael calls, your “mental capital.” If you lose that, then you have absolutely no chance of trading profitably.
Walter Peters also talks about this in our interview. In order to improve his trading performance, he actually had to change his attitude towards money and rich people.
One way to do this is not to get too wrapped up in movies that portray traders in a bad light.
If you feel that you will have to be a terrible person to make a lot of money, then you will always subconsciously sabotage yourself when you start to do well. Even if you are not doing anything wrong, this feeling can be a big influence on you.
But just like video games don't make players shoot people in real life, trading crime movies don't make make you trade poorly on their own. However, they do reinforce behaviors that have been engrained in you before you watched the movie.
Forget a monkey. This can be a gigantic gorilla on your back that can seem to be impossible to shake.
If your parents taught you that money was bad or rich people only get rich by cheating people, then a movie like this will trigger these lessons. It could cancel out any progress you have been making in your wealth building endeavors.
There is no doubt that there are some people who do bad shit. But for every one of these people, there are thousands of traders who make a very good living by following the rules and doing the right thing.
So if you want to become a full-time trader, you probably shouldn't watch this movie. But if your curiosity does get the best of you, then keep your guard up. Although this might keep you from enjoying the movie completely, it is necessary to your survival as a trader.
It is a shame that so many trading movies like this portray traders in a negative light. But I get it, they are spectacular stories and they make great movies.
However, it has the same effect that watching too much TV news has. At least TV news in the US. When you only see the bad stuff, you think the entire world is bad.
Legitimate, profitable traders are actually quite boring. Nobody wants to hear about that.
The best positive movie ever, in my opinion, is Trading Places. If you have not seen it yet, do yourself a favor and watch it this week.
And stay away from movies like Boiler Room, Wall Street and Rogue Trader. Your trading account will thank you for it.
What is your favorite positive, trading related movie? Let us know in the comments below…