Sunday, April 6, 2008

Las Vegas Style Trading

I was at the dog park recently and chatting with a regular doggie parent. He was telling me that he and his wife had lived in Las Vegas for several years. He then told me of how the gambling fever got him. This reminded me so much of how so many traders get "hooked" on trading.

He said that the first time he gambled he won 'big'. That was enough to do it, he said that it was so "easy". That is so typical of what happens to many traders just coming into the markets. They come in no experience, no research, just an idea that they can win. Sort of crazy isn't it? Then the worse case scenario happens...they win big! Yes, that is the worse case scenario because it seems to anchor into the brain that trading is very easy and there is easy money to be made.

From there it can be a very long, expensive and painful process for the trader to finally realize that trading is not so easy and they need to learn a sound trading methodology that can be applied in a systematic way in order to capture probabilites that do exist in the markets.

It has always been a curiousity to me that this business of trading is so unique in this way. Not a lot of brain surgeons, pilots, CPA'a, engineers, dentists, etc. ever would consider approaching their fields in this manner (not to mention it may be difficult to maintain clients if they did).

If you are coming into trading or have been at it for some time with no success, ask yourself if you are really approaching trading as a business or if you are approaching Las Vegas Style.