Success Depends on Knowing Your Outcome

The Asian Traders Investment Convention (ATIC) held in Singapore over the weekend drove home to me how important it is to our success that we clearly identify the outcome we want and the reasons for the outcome.

In Singapore, I hold one seminar a year. The aim of the seminar was always to provide an educational service that would allow newbies an avenue to take that first step to trading success.

My experience with the mentor program suggested that providing a free service was not the way to go. Not a single ‘sponsored’ (i.e. free course) student has ever graduated – perhaps one day. So, when I first ran seminars in Singapore, I charged the going rate and taught the areas I had the best knowledge: The Barros Swing, the Market Profile and the Ray Wave. Cost per head ranged from S$2,800 to S$3,500. But because overheads and cost of acquisition were so high, I normally lost a little money on the events.

The loss didn’t worry me; but what did cause concern was the fact that I did not achieve my outcome: the seminar made little difference to most of the attendees. So, they not only wasted my time, they wasted their time and their tuition fees.

So I went back to the drawing board and designed a 2-day course that focused on a quantitative journal keeping approach to identify the impulse trades; a simple position sizing approach and a plan based on Cutler’s use of the RSI – I did make a tweak here and there. Back-testing shows the plan will make a profit of around 10% to 12% with low drawdowns.

The outcome I want from the seminar is to teach the attendees to execute consistently their plan with proper position sizing. Once they attain this, they can expand their knowledge and improve their plan.

Since previously I had lost around S$5k per event, I planned my budget around that and came up with a fee of S$400.00 per attendee. If no one attended, my maximum loss was S$4000.00. All in all, a win-win situation: in my worst-case scenario, I’d lose less and the attendees had an inexpensive leg-in to success.

The trial seminar last year went well – around 63% of the trial class is making a small but consistent return. They are now ready to move on and expand their knowledge of the markets.

This year we launched the seminar at ATIC and I succeeded in niggling everyone around me:

  1. Understandably, I niggled my friends and fellow educators who were promoting their own S$3K seminars.
  2. I also niggled my wife and Ana Wang who work tirelessly on my behalf – they feel that the I am ‘selling’ my services too cheaply.
  3. But surprisingly, I niggled some ATIC attendees who were overheard to remark: ‘so cheap, must be no good!” And “Why does he think he is so good?”

The point is: unless you have a firm idea of the outcome you want, it would be difficult to maintain a sense of purpose. In this case to provide the attendees with a solid platform for future success preferably, at no financial cost to me. Whatever others may think of the idea, this is the vision I have.

What does this have to do with trading?

You need to know why you trade – this is part of the Vision and Goal aspects of the trading plan. And when setting the Vision, it’s not enough to quantify the dollars you want out of trading. Another Dr. George Lianos quip: ‘money is never just about money; sex is never just about sex”. What he meant was we need to look beyond the obvious: what does the dollar return mean to you?

Security, love, appreciation? And so the list continues.

By identifying the emotional premise for trading, we are on our way to identify what Denise Shull calls ‘the echoes of perception’ – the unconscious motivations formed in our youth that govern our lives today. By forming a well-formed outcome, we achieve two things:

  1. A standard by which to measure our behaviour and
  2. By understanding the underlying reasons for our outcomes, we ensure that they align with our values and in the process discover, and thus manage, our unconscious motivations. By uncovering them, we find that consistent execution of our plan becomes more a habit than a chore.

6 thoughts on “Success Depends on Knowing Your Outcome”

  1. Ray

    This basic course that we plan for August 23 & 24 2008 at the Singapore Management University at SGD400 per attendee at a steal, were nevertheless well received as there remains less than what you can count on one hand.

    Today I have received calls or emails about applying, to which I have decided that the few remaining seats will be on a first come first serve basis ie when I receive their deposit of $100 to secure the seat.

    This is fair to those who are serious as many who pre-registered a few months ago failed to send in their deposits when given notice 10 days ago.

    Now their seats have been released to all who send in their deposits on a priority basis.

    So do email me for details if you wish to secure the last few seats available on my list todate.

    Email: yintrader@gmail.com

  2. Below is an e-mail I received. I am posting it here because the reply may be of general interest. Please send enquiries about a blog to the blog so all can benefit.

    Dear Mr Barros, your recent blog mentions,Cutlers use of RSI. I have had a search for Cutler but have not found anything at this stage.

    Could i impose on you to point me in the general direction.

    ————

    Cutler’s original work is no longer available. John Hayden’s version of Cutler’s book is available from Amazon: “The Complete RSI Book”.

  3. FOLLOW-UP ON PAYMENT OF FEES FOR AUG SEMINAR AT SMU, SINGAPORE:

    Payment of fees in full before end of March will be sent a link to download a free ebook.

    This postscript has been prompted by a reader/attendee of the forthcoming seminar.

  4. BREAKING NEWS

    JUST SOLD OUT ALL SEATS FOR SMU AUGUST SEMINAR .

    WE WISH TO THANK ALL WHO STILL WRITING IN TO ENQUIRE FOR SHOWING YOUR SUPPORT AND INTEREST IN THE SEMINAR.

    WE ALSO WISH TO WELCOME SOME OVERSEAS ATTENDEES FROM HK AND VIETNAM WHO HAVE SHOWN GREAT SUPPORT FOR THE SEMINAR.

    THANK YOU , ALL

  5. Hi Ray,

    I had no idea your seminars (even your expensive ones) make losses for you!

    It’s admirable that you still want to spend your time conducting them.

    I was one of the lucky ones who got a gift of your book at the ATIC. I will be reading it with interest.

    Thank you again.

  6. Hi Lion Investor

    Thanks for the comment.

    As far as the seminars are concerned, I’m happy to give something back.

    I hope you enjoy the book; it’s a harder read than the Wiley edition (and that’s no snack!). But I believe there is ‘gold in them hills’ if you persist.

    All the best in your investing.

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