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This is a discussion on my journal within the Trading Journals forums, part of the Reception category; "Losing my head cold sober", yes, that's exactly what happens to me. Well, "compulsive gambler" is also a good and ...

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Old Sep 11, 2009, 2:28pm   #31
 
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Yamato started this thread "Losing my head cold sober", yes, that's exactly what happens to me. Well, "compulsive gambler" is also a good and common description. Best explained in these two movies:

Watch Owning Mahowny movie on LetMeWatchThis.com Free Online Movie and TV Downloads
Watch Rogue Trader movie on LetMeWatchThis.com Free Online Movie and TV Downloads

It's me, in both movies.
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Old Sep 11, 2009, 4:39pm   #32
 
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Yamato started this thread Relapsed. And doubling up on losing positions... disaster. I felt that uneasiness, that boredom, that emptiness, and I felt the irresistible urge to fill it with a discretionary trade. Losing 500 right now. Believe it or not - after all the things I've been writing.
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Old Sep 11, 2009, 4:52pm   #33
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Relapsed. And doubling up on losing positions... disaster. I felt that uneasiness, that boredom, that emptiness, and I felt the irresistible urge to fill it with a discretionary trade. Losing 500 right now. Believe it or not - after all the things I've been writing.
Good job it's Friday. Keep writing. I think that you have done me some good but you, still, have to convince yourself.
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Old Sep 11, 2009, 6:08pm   #34
 
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Yamato started this thread You are right. I am a good preacher, but I don't put my preachings into practice. Well, maybe you can tell me if you have similar problems. That way maybe you can do me some good, too. Finally I closed the series of trades (about 10) and ended up losing, once again, about 100 dollars. Lucky again, like the other day, because I usually lose thousands. Anyway, guys. In one week of diary already two relapses. Am I not disgusting? There's something inside me that pushes me to trade, and that overcomes all the barriers I try to place between myself and discretionary trading: hiding the trading platform, getting rid of quotes and charts in it (it has to stay on for automated trading, or I would uninstall it), hiding excel... but it's never enough. In the past the only thing that kept me from investing was having an empty account. BUT. There is one period, in early 2008 and 2007 when I was just back-testing and forward-esting and back then I stayed without making a trade for almost a year. So I definitely can do it, but I need to be frantically developing new systems - something I can't be doing all the time (for lack of ideas and energy).


----

Unbelievable! After writing all this **** - it's as if there was another person inside me (one writes and the other one trades) - I went and made another trade and actually made over 100 dollars and broke even for the day (the systems didn't make any money today). So today no losses, after a few two hours of emotional roller coaster and considering I got very lucky. Which means, once again, that for me discretionary trading, from a financial point of view is useless.

---

After a few minutes, I thought of yet another thing to add:

After making even just 20 dollars with my discretionary trading, I am left with a feeling that I am good. I am left feeling good about myself. Whereas instead, if I made ten times as much with my automated systems, say 200 or even 400 dollars, I would not feel as good. I would need to make 1000 to feel good, and still I would feel like I got lucky and I didn't deserve the profit made. Instead, with just 200 dollars made every day I think I would feel very good about myself. Only, unfortunately it rarely happens. I wish someone could teach me to trade discretionary and make money consistently. But I wish they taught me almost univocal rules, and not told me to go by instinct like most people do. Many profitable discretionary traders don't exactly know what they are doing, or don't know how to explain it in words, or don't wish to explain it clearly at least. I am different. I enjoy explaining things clearly. If you ask me something, I'll either say I want to keep it secret, or explain it really clearly. Nothing in between.

-----------

13:25 CST

What the hell, another 300 on the CL, just now. I called a friend. He kept telling about how he was losing 2500 in paper trading on the CL, so I figured the CL must be really low for him to be losing 2500 by going LONG. So I went back yet another time to my trading platform and made 300 dollars in a few minutes. So today I am up 300, thanks to my discretionary trading. Which still means nothing because today I am up 300 but - as far as discretionary trading - I am down several thousands in the past 30 days, and several thousands in the previous 30 days. All it means is that I have an addiction - that's for sure.

Another note. If you want to go against the trend this is the best time. At around this time you tend to have reversals, viceversa if you want to go with the trend, you should have traded until a few hours ago. It's interesting: some traders tend to do one thing and they should trade at certain times, others do the other and should focus on different hours, others can do both. I can only go against the trend, but I can't wait till around these hours - so I just lose and lose.

Last edited by Yamato; Sep 11, 2009 at 7:29pm.
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Old Sep 11, 2009, 7:08pm   #35
 
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Originally Posted by travis View Post
Relapsed. And doubling up on losing positions... disaster. I felt that uneasiness, that boredom, that emptiness, and I felt the irresistible urge to fill it with a discretionary trade. Losing 500 right now. Believe it or not - after all the things I've been writing.
I am with Tenbobtrader ... "You got to learn to cut his water off."

Maybe my experience with stopping smoking may do some good...

I couldn't give up. Each time I decided to quit, I would buy cigarettes again. It started to feel that I wasn't in charge! :^) So after many attempts, I started to watch myself to see what it is that makes my go get another cigarette *even though I do not want to*. So I would smoke, enough to satisfy my craving, and then make a promise to myself that I will not break down and start smoking this time. Then I would watch myself - and observe how I talk myself out of stopping *this time* because there was some important reason and I would definitely do it tomorrow. This was the pattern few more times so I promised myself not to fall for this, to remind myself that it is just a ploy an not real. So again I watched myself talking myself out of quitting. It was quite unreal. But closely observing myself I could feel that **I did not want to quit**. The rational me said "quit", my subconscious said "forget it, why now?". I could see I stood no chance. So I decided to work on my subconscious, I created an image of my lungs being, as a result of smoking, rough like a sandpaper and each time I breathed the walls would rub against each other. After about a week, I felt I didn't want to smoke a gave up with no problem and never smoked not felt a need to since then.

My guess would be that you are addicted to some hormonal rush (endorphins?) triggered by your trading. You might try to observe your thought processes that lead you to 1. resuming your discretionary trading and, when you succumb :^), 2. stopping you bailing out when the trade goes against you. Then work out how to break the habit.

Good luck,

Karel
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Old Sep 11, 2009, 7:39pm   #36
 
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Yamato started this thread Thanks, Karel, for your very good description: what was smoking for you (wanting to quit, and not wanting to quit at once) trading is for me. Definitely a perfect example and description of the feelings I experience.

However, I find it hard to work on my subconscious: my subconscious is smarter than me, and doesn't get deceived by stories of lungs being like sand-paper. First of all, I don't know how to get in touch with my subconscious. Where do I find him, to talk to him? And, if I tell him "look at the balance, discretionary trading is bad...", he's going to tell me "get out of here... it is just because you are not using stoplosses, or else you'd be making 100% returns a month: remember last November?"

"Endorphins"... actually, I have a feeling that a lot of this has to do with not having a girlfriend, because otherwise I would make a sexy time with her every time I have those feelings of emptiness.

---

Another thing is that, besides for example today being really happy about making those 300 dollars I eventually made, I actually deep down inside me feel that I am totally capable of making money. I can't accept that so many people make money trading so fast after their start, and I still cannot be profitable after 12 years. I cannot accept my limit. I was taught by my father to always push my limits further, and not trading discretionary because I am not profitable seems like quitting to me.

---

But thank you. All the things you told me will stay with me, and will be useful at one time or another. Right now, I don't feel like you gave me the "eureka" answer, but maybe you planted an idea in me that will grow... and eventually make me solve the problem, like you solved yours.

Last edited by Yamato; Sep 11, 2009 at 7:48pm.
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Old Sep 11, 2009, 9:21pm   #37
 
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Quote:
Originally Posted by travis View Post
......................... I actually deep down inside me feel that I am totally capable of making money..............
travis

That's your rational self talking and you're right. Unfortunately that rebel demon inside you just hates rules of any kind, even loosely framed ones drawn by your rational self. eg: rational self - " I should cut this trade now": rebel demon " no way, man, let's rock and roll".

If you can't cast out your rebel demon then you have to subvert him in your discretionary trading as you have done in your automated trading. Maybe this somewhat simplistic piece would help T2W Day Trading & Forex Community

Cheers

jon
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Old Sep 11, 2009, 10:10pm   #38
 
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Hi Travis,

As before, you yourself know the answers to your problem better than any of us here (notwithstanding all the good advice given above). The problem is putting the solutions into effect.

For example, you said that for a whole year while you were developing automated systems, you didn't try trading in a discretionary way. You clearly get a buzz from programming (can relate to that), and it might be an even bigger buzz than you get from discretionary trading (and we should return to exactly what _you_ mean by that phrase below). It seems to me that what you shouldn't be doing is trading, but writing systems for other people to trade, either with their own money, or (under very strict conditions, and of course, only the right people) your money. In an ideal world, you would never even trade your own automated system, let along your discretionary one, so you may be able to uninstall the appropriate software from computers in your immediate vicinity, and have some distance from temptation.

I don't know how realistic this is in your particular situation, but maybe it will give you food for thought.

Quite frankly, I'd be damned prouder of having successfully written an automated system that worked, than being able to trade manually day in, day out, hour after hour. Any fool can work.

Discretionary systems: I wonder exactly what you mean by this phrase. You haven't defined it, and I don't think anyone else has asked. From reading far more experienced traders than myself, I gather that they very often have strict rules, but these rules don't define every possible situation; they are just a framework. Sometimes a setup can be perfect on paper, but the experienced trader doesn't feel that it's right somehow, and passes it up. That's one example of a discretionary (non)-trade, but it doesn't mean there were no rules involved.

I think that what I am getting it is that you seem to be posing automated trading and discretionary trading as two extremes of a spectrum, and I believe that may be a false dichotomy.

The hardest thing to program into any system is what we normally call "common sense". That's the discretion that a human trader brings to the act of trading, or should do.
__________________
Regards,
Mike
--
Still learning my trade.

Just because it worked, it doesn't mean that it works.
Think of losing trades as your training fees.
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Old Sep 11, 2009, 11:29pm   #39
 
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Quote:
Originally Posted by barjon View Post
travis

That's your rational self talking and you're right. Unfortunately that rebel demon inside you just hates rules of any kind, even loosely framed ones drawn by your rational self. eg: rational self - " I should cut this trade now": rebel demon " no way, man, let's rock and roll".

If you can't cast out your rebel demon then you have to subvert him in your discretionary trading as you have done in your automated trading. Maybe this somewhat simplistic piece would help T2W Day Trading & Forex Community

Cheers

jon
Yes, thank you. I just read about "Jack" and his method, even though it's not a real person (but maybe the author talks about himself). I've done what Jack has done, by devising a method that allows me to make money - automated trading. I guess the only thing missing is making the system perfect so that it'll make money every day, which it doesn't. That way I won't come home, find a loss, and try to recoup it (and then usually lose more money). Right now the system has a drawdown as long as a few days. To be good enough it'd have to close every day as a positive day. Then I don't know if I'll find other reasons (I think there are) to start trading discretionary - first one I can think of is boredom. As I said I get a lot of excitement by trying to make money in the market. I think everyone will agree that it's one of the most exciting things.
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Old Sep 11, 2009, 11:42pm   #40
 
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Quote:
Originally Posted by tenbobtrader View Post
"I was taught by my father to always push my limits further, and not trading discretionary because I am not profitable seems like quitting to me."

so deep down you believe its the limit ?

you believe your father, why would't you ?

your pushing yourself to breaking point to allign with your belief perhaps

you prove in the 1st 3 trades or so of a session your good enough to get consistent results then you go about F..cking things up to correct the result to the one you expect

= happy = you have aligned belief and result = all normal

imvho discretionary traders are ~

"rule-governed. If a trader does not have explicit rules to guide entries, money management / position sizing, and exits, all the therapy in the world won’t bring a positive slope to the P/L curve."

by Brett





they are almost a machine even if they do not know it

they have developed ingrained good habit

Andy
You make interesting points simply by quoting what you quoted and by your remarks. I don't know how to reply, because I am still thinking about it. I will quote in red the things that got me thinking (some things you are quoting, by Brett, I've been saying for many posts, those about psychology not being helpful). Sometimes people make me think about something new simply by quoting something I said. Other times I read my old posts without knowing they're mine... and I say "who said this brilliant thing?", then when I find out it's me I say "wow, how could I be so knowledgeable back then?". Even when I was years away from being profitable I was writing brilliant things that still make sense today, because you could be doing 80% right, but that 20% you're doing wrong may keep you from being profitable. With automated trading it's faster to find out what it is (you find out before you even start trading). With discretionary trading it's foggy world, and you may never find out (so far it's my case).
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Old Sep 12, 2009, 12:11am   #41
 
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Yamato started this thread I will comment as I read, because it's long and I would forget:

Quote:
Originally Posted by montmorencyt2w View Post
Hi Travis,

As before, you yourself know the answers to your problem better than any of us here (notwithstanding all the good advice given above). The problem is putting the solutions into effect.

For example, you said that for a whole year while you were developing automated systems, you didn't try trading in a discretionary way. You clearly get a buzz from programming (can relate to that), and it might be an even bigger buzz than you get from discretionary trading (and we should return to exactly what _you_ mean by that phrase below).
I don't know how I conveyed that, but I get the biggest "buzz" from discretionary trading
Quote:
Originally Posted by montmorencyt2w View Post
It seems to me that what you shouldn't be doing is trading, but writing systems for other people to trade, either with their own money, or (under very strict conditions, and of course, only the right people) your money.
Yeah, unfortunately just yesterday a friend whom I offered to help by giving him money to discretionary trading once he will show me he's profitable, now wants more - my money and my systems. I am kind of upset about it. That's what I get for being friendly. On the other hand, his efforts and ideas are giving me ideas for new systems, which I knew from the start would have been the case. But I hope he'll be able to learn what I couldn't learn (discretionary trading), rather than ask me to build systems for him.
Quote:
Originally Posted by montmorencyt2w View Post
In an ideal world, you would never even trade your own automated system, let along your discretionary one, so you may be able to uninstall the appropriate software from computers in your immediate vicinity, and have some distance from temptation.

I don't know how realistic this is in your particular situation, but maybe it will give you food for thought.
Yes, I thought about having my systems run on a remote server, and then connecting to it once a day.
Quote:
Originally Posted by montmorencyt2w View Post

Quite frankly, I'd be damned prouder of having successfully written an automated system that worked, than being able to trade manually day in, day out, hour after hour. Any fool can work.
Maybe like others, and definitely like myself, I tend to want what I don't have. As I said, I tend to push my limits further, by (my) nature. Even if sometimes what I am reaching is useless and doesn't interest me anymore once I reach it.
Quote:
Originally Posted by montmorencyt2w View Post

Discretionary systems: I wonder exactly what you mean by this phrase. You haven't defined it, and I don't think anyone else has asked.
I haven't defined it? No, no, I have defined it. I wrote many posts about what I mean by "discretionary methods/systems". But I thank you even for reading just one of my posts, because I don't have the patience of reading anyone's posts. What I mean is this. I believe first of all that unlike what I might have implied by quoting and agreeing with tenbobtrader and his quote of Brett (the whole talk about discretionary traders being like machines), there are no univocal rules in discretionary trading, and, by definition, there must be some part played by "discretion". Which in turn causes our inability to back-test and have future expectations based on such discretionary methods, which by the way we shouldn't even call "systems" (if I used the term "discretionary systems" I made a mistake). If a method has nothing but fixed and univocal rules and no room for discretion / intuition / instinct / improvisation / interpretation / flexibility, then that is not a "discretionary method" in my opinion.
Quote:
Originally Posted by montmorencyt2w View Post
From reading far more experienced traders than myself, I gather that they very often have strict rules, but these rules don't define every possible situation; they are just a framework. Sometimes a setup can be perfect on paper, but the experienced trader doesn't feel that it's right somehow, and passes it up. That's one example of a discretionary (non)-trade, but it doesn't mean there were no rules involved.
I hadn't read it yet, when I wrote the above, but of course I agree with you.
Quote:
Originally Posted by montmorencyt2w View Post

I think that what I am getting it is that you seem to be posing automated trading and discretionary trading as two extremes of a spectrum, and I believe that may be a false dichotomy.
Well, I don't know what dichotomy means, but if it's false, I have nothing to do with it, because I always tell the truth, even when I lie, like Tony Montana says. Now, seriously, those two things are in my opinion two extremes of a spectrum. With AT I can be at the beach all day, with DT I have to be at home all day, stressed out and on an emotional roller coaster. With AT I could let it run without looking at the markets nor making one decision for a whole week, with DT I have to make decisions and look at the markets throughout my trades.
Quote:
Originally Posted by montmorencyt2w View Post

The hardest thing to program into any system is what we normally call "common sense". That's the discretion that a human trader brings to the act of trading, or should do.
Yeah, I agree. I don't even have that common sense that I should program into my systems. And in fact my systems didn't come from my common sense, but from my interpretation of statistical data. Most of the time I wanted to build a different system, but then accepted what the data was telling me, and often built a system that was doing the opposite of what I originally had thought would work.

Last edited by Yamato; Sep 12, 2009 at 12:17am.
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Old Sep 12, 2009, 12:16pm   #42
 
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Yamato started this thread All quiet today. No trading because it's saturday. I will have to test 9 volatility breakout systems - they work. Unfortunately that friend of mine is now hoping that I will give him the systems once I automate them, just because he came up with the idea. It was his idea, yes. It took him 5 minutes to tell me. By the end of everything I'll have worked on it for 200 hours, and he wants me to deliver the systems to him. True, I am the one who told him: "You can have these systems once I'll be done, because it was your idea". But... well **** me. Now my promise is like a debt - he immediately expects me to deliver everything I ever offer (like children do), plus all the things he asks. Now it's like I'll have to work for him, implement it entirely - he knows nothing about computers, and may even have to implement new ideas he has - if he starts relying on this as a source of income. It's not enough that I offered to give him the money to start discretionary trading on his own - thanks to which proposal he started to paper trade and now he's giving me plenty of good ideas. He's an honest person, very intelligent, even though with little formal education, BUT: I don't know what I got myself into. I've known him for almost 20 years. However, I am afraid that now - he's unemployed - his family will rely on my systems for future survival - which would really really be bad. I mean - the initial proposal was "get consistently profitable with paper trading and I'll give you the money to start", and in return he would have told me what worked. Now, after paper trading for almost 2 months and reasoning with me on trading, he's more like someone who remotely thinks that if he doesn't get profitable I will still give him the money (a few thousands) AND the systems that I developed "thanks" to his ideas (which actually I could have gotten myself, but I am letting him think it's all his merit). But this is not the case. Because then he'd be relying entirely on me for the rest of his life, and then he would try to convince me to give him all my other systems to him as well. I'd have to work for him for free, after giving him my money to invest. This is totally ridiculous. I am going to write him an email stating clearly that if he doesn't get profitable, I will still give him the systems I created from his ideas, but not the money, because that was not the deal. I don't want him to rely entirely on automated trading because he knows nothing about it, and I'd end up having to work for him for free, and maybe even give him more systems. Years of work given to him for free. This is way too generous and I may even do it, but on my free will, not because you ask me repeatedly and insist, because you want it really badly. I am sorry to disappoint you and I know you need money desperately but as we say in Italy "I offered you a hand and now you're taking my arm". You're getting too needy, and I am not ok with it anymore. You either limit your expectations of me or we forget about everything. One thing is to say "you get me started, you give me the capital, and then I'm on my own", and another is "you get me started, you give me the capital, and then you keep on doing everything for me". What the hell. I feel like never offering any help to him, ever again. It's not even that fair that he comes up with an idea that he thinks might work, spends 5 minutes to tell me what it is, then I spend a whole month back-testing it and automating it, and then we split the profits 50-50. If things were so easy, all he'd have to do is get a technical analysis manual and start throwing ideas at me, until, after working my ass off, I find that one of them works, and then we split 50-50. Not fair. Nice life it would be... I might as well make an agreement with somebody so that I give him my money and he accepts it in return.
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Old Sep 12, 2009, 1:25pm   #43
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from your own profile ~

"I can't do discretionary trading also because I actually enjoy breaking rules. I go to work late, I go to bed late, I bend most social rules, being an anti-conformist. I think I'm similar to other unprofitable traders, who fail and quit. Yet, together with all my deficiencies, I have one clear quality: I am not superficial. I obsessively kept at it until I found a way to make it work.

With automated trading, the only problem is to let my system run without interfering. It was not easy, but necessary - as a discretionary trader I lost money every month for 12 years, whereas as an automated trader I made money every month ever since I started."


"Remember this: The house doesn't beat the player. It just gives him the opportunity to beat himself."
Nicholas (Nick the Greek) Dandalos


“When we play, we must realize, before anything else, that we are out to make money.”
David Sklansky


you win Travis, that all there is to it .......... nothing else

except it, go gambling small change at the track :-)

later

Andy
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Old Sep 12, 2009, 1:58pm   #44
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I thought you'd spend this weekend working on a method that would make you wealthy, but I see that you have a morality problem, as well. Remember that behind every fortune there is a moral or criminal act. I would say that there are more immoral acts than criminal ones. What you must think about is whether you have a conscience, or not. If you have, will it, always, nag at you?

In the UK, we have just had a political furor over expense accounts. The accused always fall back on the argument that "it's within the rules"

Personally, I would wonder about how good a friend your friend is. If he is a good one, he will be reasonable about your arguments and want to share. If he isn't, forget him. But you have to decide that for yourself.
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Old Sep 12, 2009, 2:47pm   #45
 
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Yamato started this thread Yeah, everybody makes sense here: a lot of wise people. Thank you for your comments and advice. You all make sense, what can I say. I'll keep writing to keep tracking my development, and to see if I'll start acting more in the direction of my own self-interest, without being constantly harassed by my conscience and my upbringing. Damn, am I in control, or am I just acting according to how I was planned by my parents? I want to start being in control a little more.

That friend is a friend, but when things are too unbalanced that's what happens: one asks, and the other one gives. If you have two friends, and one doesn't have financial concerns, while the other one is unemployed, with a wife and two children, and is having trouble paying his bills, it's pretty normal that he's going to try to ask for help. It's already a miracle that he never asked me for money (I offered it if he ever becomes profitable, but that was two months ago, and he's had financial problems for years).

Last edited by Yamato; Sep 12, 2009 at 2:53pm.
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