This is a provocative article.
But I believe we all need to be honest with ourselves first and foremost, if any progress is to be made in life. In this light, after years in the retail trading space, I have come to believe that most people want to be told what to do.
I hear the same story all the time: I want to be free, I don’t want to have a boss, I want to be flexible and enjoy life, etc…but at the end of the day it all boils down to “tell me how to get what I want”, “show me the money”.
My experience has let me to believe that this same behavior is what compels people to buy self help books, buy diet books or exercise books or even books on wealth management. People “absorb” goals and objectives from peers, parents or society and then want to be told what to do with their time, money, and even lives.
If you want to trade well, you will need to abandon the sheepish way of thinking, and start to take initiative.
You Want A Recipe for Success, Don’t You!
Self-help books tend to be huge, in part because they tell people what to do. Personal finance books do the same thing. For example, some popular books tell people that they need to build a business that will produce cash while they sleep. Sounds like a great idea. But how many people are actually cut out to be a business owner? How many people have the time, the energy, the commitment to do the nitty gritty work necessary to get a business off the ground?
The reality, as many statistics point out, is that the vast majority of start-ups fail.
It’s the same thing for most people that want to lose weight. They buy a book, or join a course that tells them “exactly what to do”. But research shows that the majority of all people who participate in a diet program gain back any weight they have lost within three years.
The same goes for aspiring traders of course. Most brokers now disclose how over 70% of their clients lose money. Just like losing weight (and keeping it off) or starting up a business, getting your trading business off the ground is hard.
Naturally, most people turn to trading books, forums, websites, gurus, because they want a “recipe for successs”. Since failure rates are so high, they want to know a “sure way” of succeeding. Here are my own personal beleifs on why people want to be told what to do:
Relinquish control: by following orders, they don’t have to think. Thinking is hard. Making decisions is hard. So why not have someone give you orders to follow?
Relinquish accountability: by following orders, whether they succeed or fail is not their responsibility, is it? But trying to follow the easy route gets most people into trouble. Here is what typically happens:
No Follow-through: people just don’t remain on course. Sooner or later, the willpower dries up and the person drifts back into old habits. I told the story in a recent webinar about a trader that reached out to me for help. He was losing money and wanted to invert the trend. However, he was consistently falling back into his bad habits. Simply stated, if you aren’t personally motivated to change…or if you continue to hold onto previous beliefs…or if your ego just keeps you from admitting your mistakes, you just won’t follow-through.
No learning: by only following orders, there is no learning curve..no possibility to understand why certain step are required. There is usually even no interest in understanding why certain steps must be taken. And as a consequence, there is no learning. When people fail to reach their objectives, they simply throw in the towel, give all the responsibility to the “guru” or “recipe” they were following, and go look for a new recipe or a new guru that is better. This is one of the reasons why traders reach me after hopping from course to course, without getting anywhere.
Reality Check: There is No “One Size Fits All”
Sadly, in the markets my experience has led me to believe it is impossible to give someone a “take-away recipe” and expect them to actually survive for more than a short spell. I have mentored a fair amount of traders in the past six years. All mentoring students receive the same information: I transfer my own habits, best practices and technical tools.
However, during the process usually the students go astray now & then, and need to be coached to understand why they deviated, what beliefs led them to deviate, what would happen if they continue on this road, and then bring them back on course.
I have personally interacted with another industry veteran who, for a short season, attempted to teach aspiring traders what he did. He had the same experience and told me “they would take 2 trades as per the plan, and then go off on a tangent and never return“. My experiences are somewhat similar to the Turtles Experiment. Not everyone that was taught the method actually went on to become a good trader!
I’ve said it before: the traders that I have either mentored or coached, who are now on the path to receiving funding tranches through funding partners, all took matters into their own hands. As a Forex trader, you have the freedom and the necessity to make your own decisions. You operate in what is essentially an “unlimited environment”. This lack of restriction can be a double edged-sword. While you have the freedom to do as you please, this lack of structure can cause you to make mistakes. Instead, you need to build your own set of rules that guide your behavior in the markets.
Sadly, I wasn’t brough up to be a creative thinker…and you probably weren’t either! The current education system is all centered around being told exactly what to study and what to do in order to get good grades. In many jobs, being a good employee has to do with following gui