Emotional Blind Spots

BarroMetrics Views: Emotional Blind Spots

I received a very long, and interesting email. The author has asked me not to quote any portion, so I’ll honour the request.

The thrust of the email was to pose the questions:

  • if I have a system that makes money, why won’t that guarantee I become wealthy?  
  • why do so many players of the markets, lose money if there are so many methods claiming to be successful?

Let’s take the second question first. My reading between the lines suggests that the real question is: can I trust the vendors of trading systems?

The short answer, ‘yes’, sometimes. It’s a matter of ‘caveat emptor’.

Undoubtedly, many systems and methods sold have no chance of making money. But, there are many teachers who are providing a valuable service e.g. in my case, I owe a debt to Pete Steidlmayer (Market Profile), a genuine educator; but for his instruction, I may not have achieved what I have.

The bottom line is you need to do your research and determine if the claims made for the system have a probability of being genuine. And yes, there will be times when you will be conned. Get over it. Treat the money spent, and money lost, as lessons learned.

And before, you decide that a course is a con, ask yourself this: have you done everything you can to lean and implement the course? Have you kept written records of your efforts and results so you know you have done all you can to make the course ‘work’?

You’ll be amazed at how many attend a course and then fail to implement it the material in the way it was meant to be implemented.

If I had only one bit of advice to give you: discard your unrealistic expectations of easy, instant wealth. Becoming a successful trader is probably one of the most difficult things you can do. It requires a special kind hard work (deliberative practice); the highest degree of self-honesty and self-awareness and a commitment to constant improvement.

For more on deliberative practice and trading success, Google  “deliberative practice and trading success”. There is a wealth of information available. 

On self-honesty and self-awareness: we are built to project our best image. And so, few are willing to admit that their studies have not brought them the success they desire, admit especially to themselves.

And yet, this admission is one of the first steps to success. Without it, you will probably not look into the causes of your failure; and unless you are aware of the causes, you are unlikely to take the steps you need to take to change ‘failure to success’.

On constant improvement: the trading  environment is constantly changing. Unless you evolve with it, you will be left behind (i.e. if you have been making money, you will fail to achieve the returns you used to achieve). Improvement is not a luxury but a necessity.

If trading is so hard, why not take an easier path?

If the answer were only a matter of returns, I’d say: “in what other profession are 90% (and more) of your competitors so willing to hand you their hard-earned money?”

But, it’s not just about the money….for me trading provides an independence not available in any other field. In trading I am solely responsible for the results I receive. I can’t say that for any other profession.

The first question is more difficult to answer, I’ll deal with it tomorrow.