In the movie “A Few Good Men” written by Aaron Sorkin the following dialog takes place in a courtroom as Tom Cruise questions Jack Nicholson on the stand:
Jessep (Jack Nicholson): You want answers?
Kaffee (Tom Cruise): I think I’m entitled to them.
Jessep: You want answers?
Kaffee: I want the truth!
Jessep: You can’t handle the truth!
The film was made 15 years ago, but I’ll never forget that scene. First because it was so dramatic and second because those words, “You can’t handle the truth,” have applied to so many situations in my real life.
In trading I have students who come to me after attending course after course, reading book after book, and working with indicator after indicator. Yet after years of this they’re still searching for the “truth” of how some traders are able to be successful while they continue to fail.
The funny (or “sad”) thing is that the “truth” doesn’t reside where they think it does. They continue to look for new chart patterns, indicators, techniques, etc.
But success comes with money management and psychology.
Now I just shared with you the secret.
Will it change your trading success? Probably not, because you’ve heard it before and you “think” you already know that.
Odds are, the average trader may have “heard” it before, but they aren’t DOING it. Why? Because it doesn’t meet their expectations and it’s not an exciting solution.
Here’s another little secret: If you’re trading well, it will feel more boring than exciting because most of trading is waiting, waiting, waiting for the primo setup to occur. That can take a long time, but you must keep your attention on the market so you don’t miss it.
Most amateurs’ expectations of trading success is way out of whack with reality.
I once had a trader of a $10,000 account tell me that if I couldn’t help him make at least $5,000/month he would consider the course a failure!
50% per month!
I told him it wasn’t going to happen and sent him on his way. I didn’t even try to explain it to him because his expectations were so far in outer space that he couldn’t hear me.
And this is very common.
- Amateurs over-estimate realistic returns
- Amateurs under-estimate draw downs.
- Amateurs look for answers in the market instead of in themselves.
So that’s the truth (if you can hear it):
Instead of seeking new indicators, put that same effort into learning proper money management and self-management (trading psychology) … and you just may find the “Holy Grail” of trading!