Unrealistic Expectations

BarroMetrics Views: Unrealistic Expectations

The other day I participated in a forum on why so many traders fail. The agenda was to go beyond the truth that so many trade without a proper foundation for ‘Mind’, ‘Money’ and ‘Method’.  I suggested that there were two underlying reasons:

  • Most failures came about because traders entered into the profession with unrealistic expectations of what it takes to succeed….the necessary investment of time, effort and money. And,
  • Once the ‘easy money’ illusion is shattered, an unwillingness to pay the price necessary for success.

In some ways, a newbie cannot be blamed for having unrealistic expectations. Just look at the hype we receive …hype that proclaims 80%, 90% and above win rates, a mere 1% per day profit (200% pa) etc.

A story to illustrate…….

Last year, my personal trainer asked me what I thought about a software that produced day-trading signals that ‘guaranteed’ 80% win rate, and a 45% pa ROI. I told him I’d be happy to have a look at it, but that I was skeptical.

It turned out, his niece had been retrenched and had decided to enter the stock market. After reviewing the software, I advised her to go elsewhere. Course she paid little heed; she is no longer trading, having blown her account.

On the other hand, the hype environment does not excuse the newbie from performing a thorough due diligence. In this respect, the newbie of today is a far better position than the newbie of old. In the days of pre-internet, due diligence was much, much harder.

If unrealistic expectations should be only a temporary problem, the question that naturally arises, is why has the dismal failure rate not improved – given the improvement in technology and learning theory?

More tomorrow…….

One thought on “Unrealistic Expectations”

  1. Hi Ray, in cases like that, how can you litigate for misrepresentation , where would you lodge the paper work? It seems that anybody can make any claim they like and there is nothing that can be done about it. The world wide web has massive opportunities but also massive caveats in matters such as this. The word guarantee means nothing to these marketeers. cheers baz

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