State of Mind (Part 2)

I am the only successful trader I know and the second thing this brings to mind is humility.

If my trading endeavor has been “successful” then I am anything but arrogant about it. My trading strategies are hardly unique. I am uncertain whether my profits are more attributable to skill or to random luck. The next eight years may reveal how poor my trading abilities really are. If that doesn’t happen then the eight years after that might wreak havoc on any positive self-concept I have in this domain. Until the day I stop trading I am threatened by Mr. Market and for this reason I find it incredibly difficult to be overconfident.

In a nutshell, the most successful trader I know is virtually shaking in his boots every single day over the unknown of what will come next. Despite that latent concern, I press on intrepidly with my systematic approach and repeat it day after day with continuous monitoring.

Among a backdrop of other traders, my humble, fearful attitude seems to stand out. I could understand why every other trader would feel this way but I simply don’t hear anyone else expressing it. The tone I hear behind most trader talk is an arrogant voice of certainty and ego. I often hear “if the market goes up, down, or sideways then I can do X, Y, or Z.” No matter what happens they got this! It is a voice of infallibility and a stance of immortality.

Across a trader landscape I hear the scattered yell “I know nothing,” but I feel this is artificial exaggeration. I do know that we cannot know a great many things. For example, traders frequently engage in polarizing arguments about future market direction. I believe we cannot foresee the future. Discretionary traders sometimes present strategies with many degrees of freedom. I believe we cannot assess such effectiveness as a result of excess complexity.

I think much time could be saved if traders would take a step back start by considering whether potential answers to particular questions would even be actionable but this is a topic for another day.