Tonight some of us got together and watched the movie "The Secret," which is a feel-good DVD about "how to get what you want in life." The basic premise is that you attract to yourself whatever it is that you think about. And if you think long and hard enough about obtaining something, that you will get it. The message of the movie is well intended, and the creators certainly have a persuasive (and long) argument to make. But I started to wonder:
1. Does willful, purposeful thinking truly make any difference at all? Do you believe that you become a super-profitable trader by imaging yourself being a great trader? Isn't it possible that willful goal setting like this, if it is out of sync with one's true nature or "calling" or "purpose" -- will only result in failure?
Could it be more important to "want what the market wants," as Bill Williams writes? Might it be harmful to attempt to impose upon the market an expectation? Haven't we all met a trader who "decides that today is the day that I am going to change and be a great trader," and then sets out to do the most damage to his trading account? It occurred to me today that placing expectations on the market can be a dangerous habit. It leads to overtrading, poor money management, and huge swings in our emotions while trading.
2. Is it possible that when we let go of attachment to a specific amount of money that we "have to" make from trading, that we can finally find a way to achieve success as a trader? I am not sure I feel comfortable telling traders that pasting a $100,000 bill on the ceiling and obsessing about it will help them achieve wealth. And I question the wisdom in just telling people that if they imagine themselves being successful that it will happen. In the same way that I would not feel comfortable telling a teenage boy that if he simply thinks about the cheerleader all day, and posts a photo of her above his bed, that he will finally be able to obtain her affection.
3. I think it's possible that we can spend a great deal of time trying to achieve something noble (like making lots of money as a trader), but if we don't truly believe we deserve it, or if we are fighting the current (i.e., swimming upstream) that we probably aren't going to get what we think we want anyway. Thinking we know what we really want might could be the greatest obstacle on the path to happiness.
How does this, in the end, apply to trading? I have seen time and time again that traders do better when they finally let go of the need to look good in front of others, or to prove that they can be right all the time about their trading decisions. I have seen great progress made by new traders who realize they are not getting paid as traders to be right, but rather to make money (there is some great discussion about this in the book Inside the House of Money). When they make these realizations, they are willing to cut off their losses, or close out their bonehead trades. And they are excited about adding to their winners and capitalizing on their good decisions.
A wise new trader said to me last week: "I am not going to set a profit goal per day or per week. I am going to take the opportunities that the market gives me, and I am not going to limit myself by what I think the market can present. I am not going to place unrealistic expectations ahead of time on the market. I am simply going to implement a program of trading setups that have a historic probability of working out."
