I was on the phone today with a guy who a few weeks ago expressed an interest in my services.I had been trying to get in touch with him about it, and finally reached him today.
It turned out he had signed up for a $2500 a year subscription service to get trade signals and a newsletter for another trading vehicle. This service’s marketing talked about their winning percentage (a near meaningless statistic) and how much money they had made. Of course all of this was wrapped up in fancy marketing.
Well, big surprise, the first three trades he took with this service lost money, and he said he “felt betrayed’ by the service.
This situation epitomizes what’s wrong with the state of trading today (I suppose it has always been that way, but it seems especially bad now). A trader gets sucked in by a tout service with fancy marketing,they don’t do their due diligence, then are surprised when the trading results don’t live up to the marketing of marketing material that was nuanced to make the service sound good.
It’s like the Buddhist saying: “If you meet the Buddha on the road, kill him”.If someone (or their marketing) tells you something that sounds too good to be true, it probably is.If you are going to follow an advisor, a service, or a newsletter, study for yourself to see if it will really do what you are led to believe it will do. If you can’t decide whether it can live up to its hype, think long and hard about whether to follow it.
Secondly, if you decide to go ahead and follow the advisor/service/newsletter, take responsibility for the results.It is your decision to hand your decision making over to another person/computer; so the results are yours.It’s so often the case-if a service makes money, it’s the result of the client, but if it loses money, it’s the service’s fault. This asymmetry of responsibility is all too common.For many, systems, newsletters, and gurus become a crutch to avoid taking responsibility for one’s actions.
I might also add that if this investor had done his due diligence, he might have had the confidence to stay with the system. Three trades is not a very big sample size, and points out how important psychology is to trading. If he had done his homework, and had confidence in the system, he would be more likely to stay with it as it got back on track. Due diligence and work gives you the confidence to stay with trading through drawdowns.They are unavoidable, even for the best traders.
The bottom line? Please take responsibility for your actions, in trading and in life. It’s the hard road to take, but it’s the honest one.
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