By Steve Wade
Most of the traders I am working with are doing pretty good but it is all over the board. Some have more than doubled their accounts. A few have floundered but still trying. All traders got the same advice from me. I trade 100% of everything I recommend, but I will trade things that I don’t recommend also.
So, who should get the credit for your success? Who should get the blame for the bad trades? Is it me? Who is accountable?
I have been associated with several market advisory services through the years. One thing that most market advisers have in common are enormous ego’s. They are constantly selling themselves in their advertisements to prospects, and in the communications with their clients. They need to prove over and over that they are smarter than all the other market advisers. This sets the bar very high and disappointment is sure to follow at some point because the market eventually proves everybody wrong.
Human nature, being what it is, is predictable. That is what makes cycle trading possible. Humans are not so different today than we were 5000 years ago in terms of how our emotions work. Humans are good at taking credit, not only for their own good works but sometimes for the works of others. Likewise, we are also good at avoiding responsibility for mistakes. It is why we have terms like “scapegoats” or “throwing somebody under the bus.”
Having a market adviser is like buying a put. If the client does well, he/she can brag to their spouse or their friends about how smart they are for how much money they are making. The gains in that regard are only limited by how large the client’s ego is which is probably unlimited. If the client does poorly however, he/she can throw all the blame onto the market adviser. “That stupid such and such….” I mean, how else are you going to tell your spouse that you lost a lot of money?
Some day I will get the nerve to talk about my greatest trading loss ever. I followed advice from a trading “guru” and it was horrible advice. My trading loss was enormous and scary. It was far and away worse than any bad trade loss that any of you that work with me have suffered. In fact, it was larger than all of my clients combined losses. I had to face my wife and tell her what I had done. It causes me a lot of pain today to think about that time. I am sure I blamed the adviser at first because I was angry, but as I went back and thought about why I took the trade, I realized that I did a lot of things wrong. I took a much larger position size than I should have and I did not exercise any risk management to the trade to speak of. When I look back on that time I was not trading. I was betting. The money came out of my account, not the advisor’s account, so who was ultimately accountable? Me.
I would not be in the position I am in today as a broker without a very understanding and forgiving wife, and a good friend encouraging me to do this. The lessons I learned because I accepted responsibility for my poor trade have helped me grow into this role. Accepting the responsibility has forced me to learn. Accepting the responsibility has ultimately allowed me to make money trading. The disaster has actually become one of the best things that could have happened to me.
Accepting responsibility for your bad trades will allow you to grow also. Once you accept responsibility for your bad trades, you will deserve to accept the credit for your good trades. All the credit. It should be me patting you on the back.
The Speculation page is used for educational purposes and to talk about our opinion on trades and what is going on in the market. All trade recommendations are made in "The Pit". This is also a blog page where you can ask questions, post your thoughts, or ask for help. Be sure to use an anonymous name. If you have any questions feel free to reach out to us via email.