Are You Too Educated to be a Successful Investor? - Psychology and Money Management | futures trading

Go Back

> Futures Trading, News, Charts and Platforms > Psychology and Money Management

Are You Too Educated to be a Successful Investor?
Started:June 19th, 2012 (07:25 PM) by madLyfe Views / Replies:864 / 2
Last Reply:July 22nd, 2012 (05:33 AM) Attachments:0

Welcome to

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

-- Big Mike

Thread Tools Search this Thread

Are You Too Educated to be a Successful Investor?

Old June 19th, 2012, 07:25 PM   #1 (permalink)
Elite Member
Des Moines, Iowa
Futures Experience: None
Platform: Ninja, TOS
Broker/Data: AMP/CQG, TOS
Favorite Futures: CL, TF, GC
madLyfe's Avatar
Posts: 1,634 since Feb 2011
Thanks: 9,205 given, 998 received

Are You Too Educated to be a Successful Investor?

Are You Too Educated to be a Successful Investor? - The Traders Journal

Are You Too Educated to be a Successful Investor?

Gatis Roze

Highly educated people are, for the most part, trained to ask the question “Why?”* Engineers, accountants, doctors, lawyers and the like invariably want to know all they can about why certain things happen. The assumption is, of course, that knowing why will help you do the right thing in your career domain and therefore get nicely rewarded for it. *

While this strategy may work well in one’s particular profession, the stock market domain is completely different. In the financial arena, one is not necessarily going to be rewarded just because they understand the underlying reasons why something happened. To the contrary, pursing rational answers within a seemingly whacky market may generate an academically satisfying list of explanations but without financial rewards. An investor’s pursuit of “why” may waste precious time and energy when the focus instead should really be on identifying the “what” and then following up with the appropriate action.*

For an investor, the market only rewards one for knowing what is happening at any particular moment and for then acting upon those insights. Yes, you may find the “why” to be intellectually satisfying, but unfortunately she is the one who is always late to school, allowing the “what” to score higher grades!

Once you can embrace the belief that your rewards lie in demanding to know what is happening, you will gain a measure of control and peace over your all-important “investor self”. Only then will you be allowed to proceed further up the mountain of enlightenment and profitability by now wrestling with probabilities versus predictions.*

Many professionals, such as engineers, know that if they apply solution A to problem X, a good outcome can be predicted with near certainty. When these same individuals bring this sort of predictive thinking to the markets as recreational investors, the results can be frustrating. The stock market game is one of odds and probabilities. It’s a complex auction arena fueled by millions of different investors, voting with their money based upon their unique emotions, needs and beliefs. Even the most sophisticated algorithms can’t predict how particular individuals will react. Having said that, a carefully designed trading methodology, deployed in a disciplined consistent manner, will shift the probabilities significantly in your favor. The more appropriate the methodology, the higher the probability of profits.*

Once you are focused on the “what” and have accepted the reality of probabilities, your final quest is to embrace change. The realities and consequences of investing at today’s fast internet speed requires both retail traders and recreational investors to resign themselves emotionally to change. They must be willing to tolerate adjustments in their methodologies and to acknowledge that busted chart patterns and failing indicators are part of the investing landscape these days.*

If you think it’s difficult selling a stock you’ve fallen in love with, consider the sizeable struggle you endure by conceding that your beloved trading methodology – the one* you’ve spent years building and learning – must now be changed as well. You must recognize that this will require immense emotional and intellectual energy. Are you willing to change and do what it takes to pull profits out of the market?

Bottomline: Highly educated people must learn to overcome their need to know the cause of things.* Instead, they must learn to focus on clearly understanding what is happening and then having the discipline and risk management skills to act decisively. Retail traders and recreational investors alike must embrace and trade the actual market they are given, not the market they hoped for or the one they believe they are about to figure out.*

If you are an educated professional and you want to succeed in the stock market, you must be willing to jettison those portions of your career training that are at odds with investing. Instead, you must:
focus on what is happening and not why it is occurring
deploy probabilities over predictions
embrace change and be willing to make necessary adjustments

Trade well; trade with discipline!
-- Gatis Roze

dont believe anything you hear and only half of what you see


(╯°□°)╯︵ ┻━┻
Reply With Quote
The following 14 users say Thank You to madLyfe for this post:

Old June 19th, 2012, 07:25 PM   #2 (permalink)
Quick Summary
Quick Summary Post

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.


Old July 22nd, 2012, 05:33 AM   #3 (permalink)
Elite Member
Auburn California
Futures Experience: Beginner
Platform: TOS, Ninja Trader
Favorite Futures: Spot Forex
Posts: 162 since Aug 2011
Thanks: 48 given, 36 received

Well, I think it depends upon the person, the personality. I come from a blue collar family, but I am highly educated i guess. I feel trading fits my personality quite well. For me I don't think my education really matters in trading. My background is biochem,biology,research, mechanical engineering. I really don't like math all that much, go figure....... I do like to build things.

Reply With Quote

Reply > Futures Trading, News, Charts and Platforms > Psychology and Money Management > Are You Too Educated to be a Successful Investor?

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Upcoming Webinars and Events (4:30PM ET unless noted)

An Afternoon with FIO trader bobwest

Elite only

NinjaTrader 8: Programming Profitable Trading Edges w/Scott Hodson

Elite only

Anthony Drager: Executing on Intermarket Correlations & Order Flow, Part 2

Elite only

Adam Grimes: Five critically important keys to professional trading

Elite only

Machine Learning Concepts w/FIO member NJAMC

Elite only

MarketDelta Cloud Platform: Announcing new mobile features

Dec 1

NinjaTrader 8: Features and Enhancements

Dec 6

Similar Threads
Thread Thread Starter Forum Replies Last Post
Educated By Randomness Big Mike The Elite Circle 131 August 23rd, 2014 01:20 PM
The 5 things you need to know to be a successful daytrader sharky Psychology and Money Management 2 April 5th, 2014 12:12 AM
Do you need a mentor to be successful? Big Mike Traders Hideout 115 January 30th, 2012 07:53 AM
7 Habits of a Successful Trader Myshkin Psychology and Money Management 17 July 29th, 2011 06:47 PM

All times are GMT -4. The time now is 02:08 PM.

Copyright © 2016 by All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts

Page generated 2016-10-22 in 0.09 seconds with 19 queries on phoenix via your IP