"It is what we think we know already that often prevents us from learning." Claude Bernard 1813-1878, French Physiologist
Most of us enter the market with the right attitude. But on closer examination one has to question that premise. Is it really the right attitude? If we know that only 10% of investors are winners why don't we enter the markets with some fear or trepidation? The normal reaction would be to arm ones self to the teeth before going to battle in an area where the chances of survival are 10% or less? Instead we go in as lambs thinking we are wolves with big smiles on our faces and with illusions that we are going to retire rich. What is even more amazing is that even though we see our friends, family and others getting ravaged and torn to pieces by the wolves in the market, we seem to think that we are strong enough to beat all those odds. We are willing to bet we can win without even taking the time to study or asses the situation clearly. Is this not just another manifestation of the huge programmed secret desire to lose syndrome. Would any of you think of getting into a racecar and driving almost 200Mph without any training? Would you think of performing surgery without spending a decade or more educating yourself? The answer is a screaming NO. Yet in the most important and sensitive area of your lives you willingly expose yourself to complete and utter destruction.
Lets look at the how this begins
We go in with all smiles then we lose half or more of our portfolio. We pat ourselves on the back saying this is the price of learning. We then infuse more money and join a plethora of services, convincing ourselves that we will win, now that we are armed to the teeth. We then lose even more. Now we are angry and start cursing the services and asking other investors/friends for some service that could help us recover what we have lost. We keep jumping from service to service and keep losing. Not once during this massacre do we consider asking ourselves these questions. What the hell am I doing? What is wrong with me? Why don't I take some time out? Why don't I educate myself a bit so that I can distinguish a good service from a bad one, or to the point where I might not even need one.
Now the cost of most services do not kill you, what kills you is the fact that you take this junk information and invest thousands of dollars in it. In one transaction you can potentially lose more than what you would pay for over a year of this service. Why is it that we try to join services that think like we do? If we are thinking like morons what good does it do, to find another moron and have him tell us what to do? Is this not yet another sign of the programmed secret desire to lose syndrome. Why is it that we get mad with a service that will take a position that is counter to our own? If you want someone to think and act like you then buy yourself an African grey parrot. They are very smart and can copy all your actions, that way you won't need a mirror anymore. In addition they can live over 100 years, so you can pass your stupidity down to the next generation, if you so desire.
Getting out of this stage is very difficult and the only way to do so is to either take time out or find someone who can guide you and help you look at the world with a different set of eyes. The best would be to do both. Money comes and money goes, but ignorance and stupidity have an unpleasant tendency to overstay their welcome.
Most people have no Goals other then the stupid ignorant one of making more money. Quantify what more means to you. Have a target or decide how much you would like to make in terms of percentages each year. And if you should hit that point early in the year what should you do. Try to get more right. No don't be a pig, take time out. Spend time doing nothing, why would you want to torture yourself more. Go out and take a nice vacation, spend time helping others, or read some great books etc. There are so many other things you can do. Never alter your goals or objectives each time they are met. Once you have met them take time to do nothing and re-evaluate the situation.
When you think you have no time that is precisely when your body requires the most rest. Ask yourself this question you have no time to give the engine that has produced all this wealth or the one that is going to produce all this future wealth a break. If you answered no: you are a bad investor, because one never bites the hand that feeds them. Your body and mind is what has brought you to this point and if you are going to do the best you can to destroy both, then you truly deserve to lose. If you have no respect for yourself how can you possibly expect to win in the markets?
Do you know the best investment in the world is good health? If you just cut your stress levels you can avoid over 80% of modern diseases. Why is good health the best investment? Well what good would do you to have all the money in the world if you suffered a stroke and now became paralysed? Or you had to have your stomach or lower intestines taken out. Or the doctors tell you have cancer and the list goes on. You cannot buy health and so a smart investor first starts with trying to find ways in which he can reduce his/her stress. It is for this reason that we opened up the wellness centre.
What we are trying very hard to impart to everyone here is that investing is a way of life. Which simply means one should invest in ones physical health, mental health and financial health in the same manner. We should equally invest in all areas and never abandon one for gains in another. If you do, this is bad investing and the results are in most cases unpleasant.
We almost never take the time to arm ourselves with the right tools. First and foremost any investor who seeks to make any money in the markets should understand the basic concepts of TA. One only needs one good book on this subject. Now your job is to find the indicators that appeal to you, the ones that you are drawn to. Then look to customize them. Changing the settings can often do this; one should never use preset settings because all the penguins do that. Some of my favourite tools are stochastics, RSI, % Williams, also learn how to read channel formations and base formations. Learn also the simple concept of trend lines an up trend and a downtrend. Next spend time reading the some good books, such a popular delusions, lord of the flies and the crowd by Gustave le bon.
Take time to conduct your own mini investment surveys. Talk to your hairdresser, the cashier at the supermarket, your neighbours, the cab driver etc. Not only will you get your own mini investor sentiment ratio, but you will also get a glimpse into how others think. This is the basis of mass psychology and the more you do it the better you get at it.
So look to improve your attitude, set goals and arm yourself with right tools before just jumping into these treacherous markets.
"I think knowing what you cannot do is more important than knowing what you can." Lucille Ball 1911-1989, American Actress, Producer
The Brittle Truth
By John Tyler CEO Trader 007
The Buddhists say that the main cause of suffering is desire. Our western myth is that if you want something badly enough, you'll get it. "Think Rich and Grow Rich" by Napolean Hill is a classic example that is held in Biblical reverence by most self - improvers. It fits nicely with what we want to belief: we can do anything if we set our minds to it, and persist long enough. Of the 90% of traders who fail, close to 100% belief this, so their failure just cannot be their fault.
If you're interested in reality and not illusion read on, but if you hate myths being exploded, stop now before you become mad.
Napolean Hill was a failure.
Yes, you read correctly. A wonderful fellow and an excellent writer, but like WD Gann, survived financially by pedaling myths of what folk want to believe. Hill's modern day publishers were so concerned about the truth, they wrote a full account of Hill's life. The truth is sad. Poor Hill never knew when he was successful, and eventually destroyed each achievement, as he believed that greater success was just around the corner.
His greatest success is his posthumous fame.
As a market letter writer, I know that immediately I write something that challenges commonly held illusions, I will have a number of angry resignations. I look at some of the longest surviving letters and am amazed at how the most disastrous advice is blamed on those things that we love to hate - the market manipulators, the Fed., cartels and the list goes on.
Get real! These things have been and will always be as long as there are markets. Stop fighting windmills like Don Quixote. The real battle is within!
Dr Janice comments by exercising some poetic license (with apologies and gratitude to Glenn Fry and "Smuggler's Blues") and asks, "What are you people smoking and can we get a big Amen?"
There's trouble on the street today, I can feel it in my bones
I had a premonition, that he should not go in alone
I knew his charts were loaded, and he was ready for the kill
Until the stock imploded, and the blood began to spill
So baby, here's the ticket...lick your wounds and slap your hand
Here's a little money now, do it just the way we planned
If you're cool for 20 hours, it might pay you twenty grand
I'm sorry it went down like this,
And someone had to lose,
It's the nature of the business,
It's the trader's blues
The hedgies and the gurus, market makers and the law,
The pay-offs and the rip-offs, and the things nobody saw
No matter if it's futures, stocks, commodities or stock mo-mo
You've got to get those loaded charts 'cause it's all about the dough
There's tons of shady characters, lots of dirty deals
Every name's an alias in case somebody squeals
It's the lure of easy money, it's got a very strong appeal
Perhaps you'd understand it better
Standin' in his shoes
It's the ultimate enticement,
It's the trader's blues
You see it in the headlines, you hear it every day
They say they're gonna stop it but it doesn't go away
They move it through an ECN, or flip it on the NAS
They hide it up in ARCA , I mean it's here to stay
It's propping up the governments in the big fat global stew
You ask any SEC man, he'll say, "There's nothin' we can do"
From the verbose newsletter writer, right down to me and you
It's a losing proposition
But one you can't refuse
It's the politics of fear and greed
It's the trader's blues