#089: THE 3 STAGES OF TRADING BLINDNESS
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Hypothetical results have many inherent limitations. Past performance does not guarantee future results. 

 

ACTUAL RESULTS SHOULD BE VIEWED WITH CAUTION, BECAUSE PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

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#089: THE 3 STAGES OF TRADING BLINDNESS

A common phenomena I call “system trading blindness” is one of the biggest obstacles towards long-term trading success and is one of the key reasons why so many system traders fail.

 

It usually appears in 3 stages and the last one is the hardest to overcome.

 

Let me explain this phenomena and the 3 stages with a short story from my own life.

 

Since childhood, I’ve been wearing glasses and pretty strong ones too (+5 dioptres). That means I couldn’t survive without them.

 

A year ago I realized that I didn’t like wearing them anymore, so I read a few books about self-healing vision and started practicing daily meditations (mainly focused on visualising clear sight) and daily eye exercises.

 

In about 6 weeks I went from 5 dioptres down to about 2 dioptres.

 

I call this experience “stage one”:

 

Significant results in a very short time.

 

In trading, this is what we all want right? Many of us are lucky enough to have a good start to trading and make some nice money in a short amount of time.

 

But this is extremely dangerous…

 

Because it often makes us proud, and ignorant too.

 

Like with my glasses:

 

After the quick results I started thinking I’d figured it all out, that I was a genius with extra human capabilities (many beginning traders feel this way after their first few wins too).

 

But then, “stage two” comes:

 

Reality.

 

With all the pride and ignorance of achieving fast results, you stop working hard and you stop evolving. And the results start changing direction too.

 

This is exactly what happened with my vision: I stopped my exercises, or at least significantly reduced my effort, and not surprisingly, my vision started getting worse again.

 

But my pride and ignorance remained: Instead of increasing my effort and working on the exercises to push my improvement to the new level, I became lazy and started looking for “quick fixes”, like faster exercises and meditations.

 

I started looking for the “Holy Grail”, while refusing to put in any new effort to get results.

 

No wonder my struggles continued for the entire year…

 

…and the same can occur with traders going through stage two.

 

This stage is extremely frustrating, painful, long and uncomfortable. Simply said, it really sucks.

 

Usually, during this stage, traders have two options:

 

1. Give up and start blaming everything and everyone (like many traders do), saying that it’s not possible to make consistent money in trading, or

 

2. They can just overcome their pride, stop seeking “quick fixes” that require no effort and get back to hard work – which is “stage three”.

 

But...

 

…most traders never get to stage three.

 

They don’t want to accept that to become a long term consistent winner in the markets requires hard work, a lot of thinking and a lot of effort.

 

It’s easier to keep looking for the magic “get rich quick” trading system and then blame others when it doesn’t deliver the results as advertised.

 

However, a small percentage of traders will be wise enough to realize that they don’t want to stay “trading-blind” forever.

 

They want to see – Clear and stable results, how markets really function, and the techniques that can truly make consistent money in the markets.

 

Which means doing your homework.

 

Exactly like I had to do with my eyes to improve my vision. Go back to the beginning and start working hard on my vision again, which finally starts showing some real progress after I lost an entire year searching for the Holy Grail ‘quick fix’.

 

So if you’re still not getting the trading results you want, keep at it. Put in all the hard work and focussed effort that you can, and with persistence you could start seeing better results very soon!

 

Happy trading!

 

Tomas

 

P.S. I’m so happy to see that more and more students of the Breakout Strategies Masterclass are doing the hard work and slowly getting some promising results too. In the next coaching call, Andrew is going to share how he used the framework I teach in the Breakout Masterclass to create 600+ amazing and robust breakout trading strategies. You don’t want to miss it.

 

This article was originally published on the Better Trader Academy blog.

 

 

 

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