The Relationship between Success and Credibility (Part 4)

Today I want to conclude by further emphasizing the respect I give to those sharing losing trades.

Gloria Loring taught us that we cannot have the good without the bad so I see little point in trying to overlook the losers. I believe I have at least as much to learn from the losers as I do the winners because the former can deliver me to Ruin.

When people suffer catastrophic loss, they tend to go quietly into the night. Maybe this is in hopes of preserving a positive self-concept or minimizing damage to personal reputation. A sense of shame may also play a role. Sharing failure with others could prevent the rest of us from repeating similar mistakes but Schadenfreude is a coping mechanism too.

On a smaller scale, this phenomenon of “going quietly into the night” seems to happen with regard to any losing trade.

As discussed last time, a great way to improve as traders is to understand mistakes we are most likely to make. These include mistakes made by others. I would prefer to hear a presentation on losing rather than winning trades because the latter, in my opinion, is more likely to be contaminated with self-promoting conflicts of interest.

I have considered creating a seminar on “ways to save thousands in the financial markets.” In this program I would discuss financial frauds and shady practices that I have encountered during my years studying the financial/trading landscape. I definitely believe one key to long-term trading success is to avoid being derailed by the tempting offerings (e.g. black box systems, trading newsletters, trader education programs) professing mouthwatering performance numbers. These are more likely to rob you blind should you get suckered in.

Ironically, I decided not to move forward with this seminar idea is because I questioned whether the negative is marketable. People often don’t like to hear the negative. Even I prefer to focus on the positive but I had to grow up sometime and realize that it’s not all winning and roses out there. Losing is part of life and I believe I have much to learn from its lessons.

I have often thought that a string of early wins can be a curse for those new to trading. If they assume this early success to be representative of future win rate then they may increase position size too fast. This leaves them vulnerable to the possibility of catastrophic loss when Mr. Market decides to change his mind.

I once heard “that’s why it’s called trading, not winning.” Sometimes it takes time for the reality of losing to set in.