BarroMetrics Views: Trading Mistakes
I concluded a Habits of Success Class last week. As is my wont, I make post seminar notes on the participants – perceived strengths, weaknesses, likelihood of their future success etc. I also look to identify the perceived ‘single most important stumbling block’. This exercise allows me to expand my own skills.
Given my time constraints, I thought a short series on common mistakes would be useful.
There are two reasons why we fail at trading:
- We don’t know what to do; and/or
- We don’t do what we know.
The first stumbling block falls within the first category – what I call ‘unrealistic expectations’. In Singapore, we see the ads just about everytime we open the local paper. Ads promising untold riches, with no money down and no effort beyond 15-minutes to 30-minutes a day – in short, become rich without effort to acquire the skills, become rich without the necessary capital, become rich without the effort of knowing and applying the necessary skills.
I find it interesting that of the thousands that attend the seminars and workshops, not one would believe we could become a heart surgeon in a weekend seminar, but many would believe that we can become instant investing/trading experts – never mind that K Anders Ericsson, probably the leading authority on expertise, estimates it takes about 10,000 hours to acquire expertise in any field. To become competent and a master at anything, It’s not a question of inborn talent, it’s more about the time and effort you put it. And, that effort takes a specific form which Ericsson calls ‘Deliberative Practice’. For an outline of the Deliberative Practice method see the blog “The Essential Nature of Markets“.
(I linked an excellent article I saw in the Australian on Ericsson – well worth reading)