Infinate Freedom and Self Imposed Limitations - Why lasting market success is so difficult for most.
You should be better than this. You know how to trade. You should be better than this…
You have a method or system with an edge. It provides a profit over the long run.
You have seen some real growth and meaningful success in your trading. It IS something you know how to do.
You can do it well enough to make money on a regular basis.
You manage your trades well enough, and you risk very little of your account on a per trade basis.
So why are you not driving a ferrari? why are you not trading full time?
Because the market, quite possibly, provides us with a challenge that human beings are ill equipped to handle:
[B]Near Infinate freedom[/B]
It is possibly the only place where we can think, decide, and act in any way we desire… and promises us near limitless wealth to do just that.
Almost everywhere else in life, there are authorities outside of ourselves that we are conditioned to respect and follow.
show up late for work - boss is angry
show up late for dinner - wife/family is angry
drive a car too fast - get a speeding ticket
drive a car too slow - get yelled at/cause an accident
eat too much - get sick
eat too little - get sick
mouth off at someone when angry - risk an argument, a fist fight, or worse
express every thought we have as we have them - become a social pariah, a lewd, crude individual that others stay far from
heck, even the uninhibited pleasure mecca of vegas has rules to each game, table limits to bet, and social pressure of others reactions around you, not to mention casino authorities and the law should you push anything further than they will tolerate.
In almost every component of our lives, from the day we are born, to the day we die, to the countless social interactions we have… there are hard, fast rules that govern each of these.
Fall out of line, and someone else will punish us. Either through scorn, anger, hurt feelings, time in court, time in jail, time in the hospital…etc.
In the market… none of these restrictions exist.
Lose a trade - no one knows…no one cares. no one tells you right or wrong, yes or no, good or bad. no one else is even aware that you exist. hold it for as long or as short a time as you want. bet as much as you have in your account, or as little. re-enter it a million times, or never enter at all. go long, go short… anytime, all the time, forever, or never.
Other than the single restriction of a margin call, the market provides infinate freedom. Which requires true, profound and sincere self discipline.
It requires a discipline unlike any other that humans have had to channel throughout our existence.
not too offend or sound elitist, but it is possibly the only place that gives us the power to decide our actions without restrictions as if we were some sort of gods.
And humans make for piss poor gods.
The only way around this is to have some sort of self imposed limits.
A maximum daily loss, either in terms of actual dollars, or percentage
A maximum weekly loss, either in terms of actual dollars, or percentage
a maximum amount of trades taken per day/week/month
a maximum amount of losing trades per day/week/month
I personally have some of these as my own safeguards. They keep my losers small, and quickly recoverable.
For infinate freedom that offers unimaginable wealth is a sirens call too strong for nearly all of us, if we choose not to self regulate our actions.
We, as a race, need rules and structure to exist in a state of positive growth, cooperative interaction, and success.
The market as an entity, is completly devoid of rules and structure.
Then we, as successful traders, need to create our own boundaries, need to be our own policemen, need to be our own jailor if we fall out of line.
For lasting market success…some sort of self imposed restrictions on losses, risk amounts, and or trades per day/week/etc are not just a good idea, the are THE ONLY idea that will matter in the end.
Because we are not gods. we are not perfect, we will have losing trades, mismanaged trades, unexpected market events that make little (if any sense) and we will respond emotionally when this happens.
So who will limit our actions when we start to step out of line?
[B]We will[/B]. [I]Or we will never truely succeed. period. [/I]
[U]The market is a giant syphon that takes money from the accounts of those who lack their own self imposed restrictions,
and deposits it in the accounts of those who create and heed their own self imposed restrictions.[/U]
It’s as simple as that. The ultimate freedom requires the ultimate responsibility. Without it, we are not free, but simply prisoners of our own emotions.
Jay
