17/10/2022
Everyday I see traders fall victim to what I call bling bling trading.
#1 You have what you think is the winning strategy...
#2 You have big expectations...
#3 You start applying…
#4 You're disappointed because it doesn’t deliver the results you’ve been looking for…
#5 You find a NEW FLASHY STRATEGY that looks way easier and more profitable than yours.
#6 Repeat...
I’ve seen so many traders fall victim to this, not because their strategy wasn’t good enough, but because they didn’t
give it enough time!
Traders generally overestimate what they can do in a short time and underestimate what they can do in the long run
with consistency and commitment.
I too was that person...
When I first started trading, I used to frequent chat rooms around the tech bubble in 1999 (we didn’t have amazing
facebook groups like these back in the days). I was always on the lookout for new ideas, new people, and new
strategies.
One stock caught my attention, Rambus (ticker: RMBS). It had a cult-like following with people parsing every tiny bit
of public information.
Instead of sticking with my strategy and executing it consistently, I got caught up in all the stories, speculation, and
strategies shared in the group. Everyday I would find myself adjusting my strategy to what the so-called “experts”
were saying.
At one point - the most knowledgeable guy in the group - his handle was “RambusWins” sent out a message. It went
something like this:
“Hello, this is ** wife. I would like to inform everyone that ** has taken his life, I know he loved this group….and
continued.” - Long story short, the guy had lost everything and was spending 60+ hours a week obsessing over this
one stock, he committed su***de.
Everyone was floored, myself included. This was my first experience in “investing.” Much like him, I was losing
money, constantly trying to find the right strategy and totally ignoring that the best strategy is to stick with one
strategy.
It was a wake-up call that showed me how much time I was wasting by focusing on the wrong things that didn’t
make me a better trader.
I never logged into these types of chat rooms again. I learned that they were places where biases and group think
were easy to fall into.
I vowed never to get caught up in another “story stock.”
This wake-up call got me on the right path.
There were twists and turns. It’s easy to waste a ton of time learning things that won’t help you much in trading,
wave theories, moon cycles, news, etc. But, I kept looking for what actually moved prices, things I could touch and
feel.
The process I use today results from years of failing in a forward direction, tossing aside things that don’t work
rather than hanging on, and staying flexible.
Abraham Lincoln said, "Give me six hours to chop down a tree, and I will spend the first four sharpening the ax."
Sharpening my ax was all that mattered. Eventually - through the process of open-minded action - I found myself
able to understand the market in context - and how that context should affect my decisions.
There had great teachers along the way and people that greatly influenced my process, but the critical element in
working with them was that they (like me) were open-minded and always looking for new ways to sharpen their
Stop spending time jumping from one thing to another, taking losses, and never feeling confident about your
ex*****on. The key is to find a strategy that works for you, stick with it, master it, be the world’s best at your little
edge and continue to hone your skills.
Success in trading is in finding a process that works. A repeatable process that allows you to chop down this tree
we call the market. As you come across things that don’t lead you to be a better trader, it’s vital to recognize them
and toss them aside.
You must become obsessed with honing your skill set and focusing your mind on what matters to your process.
You have to get motivated about sharpening YOUR ax. You can’t succeed long term if you’re always jumping from
one strategy, furu, telegram, indicator to another.
Getting caught up in chatter, top calls, big guesses, worries about the fed, inflation, something that might happen in
China someday, and whether this is a wave 3 or 5 will never get you to where you want to be.
The good news is that anyone can make it as a trader. The bad news is that on average, only 5% can head the
warnings above and be vigorous in their discipline.
Be the 5%.
Find those that are in the 5% and learn what they are doing to get better.
If you become obsessed with anything, it should always be about simplifying down to what matters most so you can
live a balanced life and roll into each market session with a razor-sharp ax.
Keep grinding, my friends!
