Saturday, July 11, 2009

Overcoming Failure and Fighting for Your Future

Listening to favorite music early on a Saturday morning, I was contemplating the situation of traders who truly are damaged by their experiences in markets: the frustrations, losses, and dashed dreams. Then an email came through the inbox reminding me of other traders who perform the inspiring alchemy of turning failure into success. Here is the gist of the email:

I have been trading unsuccessfully for years. Your comment on how trying a different time frame could help. I have taken the last few months and analyzed the markets full time under a...time frame...I would have never thought of previously, using only one set up and am blown away by the results. Started using real money last week and just cannot say thanks enough for the inspiration to make the switch. Unbelievable!!!

Note what our reader did: He stopped trading, analyzed markets, and forged a strategy that fit the marketplace. It's amazing how many people fail to make such basic adaptations.

Consider radio station operators who play music that they like and want to hear, rather than research the interests of listeners; restaurant owners who prepare food that they prefer to eat and make; boutique owners who stock their stores with clothes and accessories that fit their tastes.

I know a business owner who selected a location for his enterprise based upon its proximity to his home. No traffic studies, no needs analysis. The venture failed--the site was not visible from the main highway nearby-- and he lamented his lost dream.

Such "entrepreneurs" are so busy gratifying their own needs that they ignore the needs of the marketplace. Theirs is failure born of self-indulgence.

I see the same thing among traders. The market becomes slow and they continue trading. The market becomes choppy and they continue hunting for trends. Why? Because that is what they want to be doing, not because the market is rewarding those activities.

Much has been written about whether human beings are inherently good or fundamentally evil. I say neither: people, as a whole, are breathtakingly mediocre. They stubbornly reside along a tall peak surrounding a zero mean, where the horizontal axis quantifies directed effort.

That's what made the email special: someone unsuccessful for years took full-time effort to reverse engineer markets and tailor a strategy that worked, not a strategy that merely felt comfortable and convenient. He found a single setup that fit market conditions and trades selectively to make money; he doesn't consume money in order to trade. If he continues that search process, I have no doubt he'll find other setups as market conditions evolve.

We are capable of greatness and nobility, so much more than mere indulgence. Anyone who fights for the future, Ayn Rand noted, lives in it today. The greater part of greatness is the willingness to move beyond comfort and fight for the future. Thanks for the email.