The Answer Is, Ask Another Question

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Why do people lose money trading? There are only two ways the trade can go, for you or against you. All of the trading systems and fundamentals in the world amount to hundreds of thousands of dollars in training and education, and when it comes right down to it, it’s a 50/50 chance that your trade could win or lose.

I’ve heard it said that for all the people who set out to be retail traders, trading from their home computers, smart phones, and iPads, there is only a 3% rate of success. When the odds are 50%, why is the payout only 3%? Honestly, I could have become a professional poker player and had a better statistic for the past 11 years I have been on this venture.

Two thoughts come to mind – what is success, and how do we mess up the odds?

I want to share with you, because we’re all in this together. Traders are the most interesting group of people I have ever met, and I’m proud to spend my time in circles of people who are generally characterized by traits such as:

Honesty – The markets flush out phonies pretty quick. If you can’t honestly repeat your trade setup, you won’t be able to stack up a profit in your account over time.

Desire to be self-sufficient – Most traders would rather make a million dollars trading than buy a million dollar lottery ticket. There is a lot of satisfaction in creating our own wealth.

Hard working, long suffering, and patient – How many hours can you stare at a line on a chart? How many times did you go back to your phone or your computer to look at it again today? And do you get up in the middle of the night to pee, or do you get up to look at a line on a chart? (You know who you are!)

Smarts and hearts – In high school I had an English teacher (who was also my tennis coach) tell me that the average person only uses 2% of their brain, and if we gave it just a little more effort we could produce more amazing works in less time. We believed her, and we all produced essays, dialogues, poetry, and short stories for her to read. She told me later, with a chuckle, she was just trying to get some more interesting essays to read, and it worked. On the court she said we could either bend our knees and have faster feet, or we could just “decide” we were going to win. She was big lady who didn’t “look” like she should be a great tennis player, but no one on the high school team (boys or girls) could beat her. Was she on to some untapped brain power?  I was prime for her manipulation and spent the rest of my life believing that I was capable of accomplishing great things. I recently tried to validate that statistic and could not, but I still believe there is some truth to the notion we have untapped potential. Some take a spiritual approach to this idea, and some more scientific, (like this cool blog I just stumbled upon, http://www.scientificamerican.com/article.cfm?id=do-we-really-use-only-10). Inspiration makes things happen. Is it heart or is it mind? I do not know, but it’s available to you and me.

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