THE BIG FISH THAT GOT AWAY
Recently, I worked with a trader named Jack, who loved to relate stories in great detail about his ability to precisely forecast market tops and bottoms. Of course, his forecasts made money for everyone but him or so he claimed. “If I could only act on my own advice, I would be a multi-millionaire!” Jack clearly felt that it was important for me to be aware of this detail because he repeated it many times between his stories.
As a trader’s coach, I have heard stories like this many times over the years. They are a common theme of people stuck in the loop of over-studying and over-analyzing. These risk-averse analysts would rather have others act on their predictions and bear the risk than take action and responsibility themselves. After the fact, they can cherry pick the stories about being right on forecasts of big trades without assuming the risk themselves. Conveniently, they neglect to include stories about when their predictions were wrong and would have lost money.
Jack desperately needed to encourage himself plus win adulation and applause from others with his stories. Unfortunately, the stories were all that he had to show for his hard work. Jack did work hard—the problem was that he did not work smart. Jack wanted to find a new and innovative shortcut to trading success without having to do what top traders do to become successful.
Sandwiched between his self-promoting trading stories were stories that revealed Jack’s other side. These stories ...
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