A Thin Line

BarroMetrics Views:  A Thin Line

The thin line between trading success and failure was recently driven home.

End June this year, we completed the first Ultimate course. I view Ultimate as my best course to date. I had a new format (Flip the Classroom) which I believed would make a difference to the learning. So what happened?

Fourteen weeks of intense study provided the attendees with a solid foundation for understanding the nature of markets and themselves; more important it taught them to apply that knowledge to attain their trading goals.  For most, at the end of the course had a trading plan, and templates for the application of their money management rules and psych process.  (For others, shortly after the end). From the perspective of achieving my goals, all looked rosy for their future.

Then……..

The other month or so, I spoke with a number of them – I wanted a handle on how the group was doing:

  • Some were doing great! 
  • Others were experiencing a drawdown but were psychologically in good space (i.e. they accepted that drawdowns were inevitable in this game and their positive expectancy was intact).
  • While still others were struggling and wondering where the success they expected had gone. They had worked hard but had little to show for their work.

Think about this: same course, same teacher, every graduate had worked hard to learn to the theory, incorporate theory into a set of trading rules, and then worked hard to consistently implement their rules. And yet, the results varied widely – especially among those who had done well and those who had little to show for their efforts.

I looked to find a solution.

  • Different instruments? That was my first thought. True most were trading FX. But two were trading stock indices, and their results were at either end of the spectrum.
  • Timeframe? Nope, most were end of day traders.
  • Consistency of execution? There were some differences but not enough to account for the results.

In fact in some cases, exactly the same timeframe, instrument, the same pattern, and execution brought about very different results of success and failure.

I found the discrepancy fascinating. Eventually I found two reasons that seem to explain most of the cases…..more later this week.

By the way, you may like to comment on this question: what is the single most important difference that has distinguished between your successes and failures?