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The (Trading) Fantasy
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The (Trading) Fantasy

  #1 (permalink)
Elite Member
Detroit, Michigan
 
Futures Experience: Beginner
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Posts: 295 since Nov 2011
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The (Trading) Fantasy

As my trading journey continues I made a serious realization when recently chatting with "newer" traders who are closer to the beginning of their journey.

The allure of the fantasy is what I crudely call it. The trading fantasy is that once I start day trading I will quickly be able to make significant income daily in short order and become a full time trader. Regardless of whether you start out with beginners luck and do well for or a while or struggle the results will typically end up with a blown account. This is what happened to me several times.

The fantasy is FALSE and dangerous and seems to prevent/short circuit any possibility to build a foundation. It is furthered by most vendors feeding the masses the justification and "evidence" that the fantasy is not only possible but probable.

The perpetuation of the fantasy makes the odds of the fantasy occurring as close to zero as winning the lottery.

So why do most folks including myself know several traders who seem to living the fantasy? Those traders who consistently pull "full time income" amounts out of the markets daily? They do exist - I know some of them personally.

From what I can gather, these folks got there by actually forgetting about the fantasy completely (stopped believing in the "santa claus" trading myth). They tuned their trading to reality, stuck to the basics, got an edge, worked on their psychology, paid their dues, built their foundation over time, and then finally through all that hard work came out the other side.

It appears those folks have had their fantasy come true. But its not true (it only appears that way). Appearances are deceiving and in this case really deceiving. The only way to actually get close to the fantasy is to completely forget it, wipe it from your memory, and stay to the task at hand. Any attention to the fantasy at any time during actual trading is dangerous and destructive to one's trading account.

Bottom Line - When I forgot about the fantasy my trading improved dramatically (profitability, consistency, longevity). I'm making less than the fantasy, but anything above zero is better than trying to live the fantasy.

My two cents.....interested to hear other perspectives.

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  #2 (permalink)
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  #3 (permalink)
 Vendor: www.traderrach.com 
Auckland, New Zealand
 
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Don't fall into the trap of unrealistic expectations


Hi TrendTraderBH

I agree with you that unrealistic expectations are a common cause of traders "blowing up".

These expectations are built on the fallacy that the destination can be achieved easily and in a short period of time. People who start trading are often clever and underestimate the challenges and personal growth that's required to achieve success in the markets, focusing on it more as an academic pursuit.

Unrealistic expectations can lead to unreasonable pressure. New traders will often change markets, change methods and go on an unending journey seeking out how to achieve the dream. They don't stay long enough with anything to achieve true mastery.

It's fine to dream about the future but new traders need to let go of their expectations of immediate wealth from trading and see it as a journey where they will grow and improve and never really arrive. The rewards are limitless but limited at any point in time by a persons own personal growth.

Developing consistency is the key to success in trading. Consistency in applying profitable strategies. That is the first goal - applying a strategy with a positive expectancy CONSISTENTLY.

Maintaining consistency has many challenges. You must act and think the same when you are going through a draw down just the same as when you are having a winning streak. True success comes with self mastery.

It takes personal growth to handle larger amounts of money and step it up when you have achieved a base level of success that you can leverage up on. This needs to be done incrementally at all times maintaining consistency in your application of the strategies.

My recommendation to new traders is always to start small, get the basics right and then look to increase. You can't build a mountain on matchsticks. You need a great foundation to build something awesome.

As you grow it is absolutely important to be consistent, not to stop suddenly or fall back on smaller sizes because the pain of draw down is too great. As soon as you trade down you are effectively crystallizing the loss. The only downsizing done should be reduced trade sizes in accordance with a money management plan. Not reduced because you can't handle it. That's why it's important to increase with your own personal growth and not too far out of your comfort zone.

All the best with your trading.

Cheers Rachel

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  #4 (permalink)
Elite Member
Detroit, Michigan
 
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Excellent points TraderRach! Very helpful.



TraderRach View Post
Hi TrendTraderBH

I agree with you that unrealistic expectations are a common cause of traders "blowing up".

These expectations are built on the fallacy that the destination can be achieved easily and in a short period of time. People who start trading are often clever and underestimate the challenges and personal growth that's required to achieve success in the markets, focusing on it more as an academic pursuit.

Unrealistic expectations can lead to unreasonable pressure. New traders will often change markets, change methods and go on an unending journey seeking out how to achieve the dream. They don't stay long enough with anything to achieve true mastery.

It's fine to dream about the future but new traders need to let go of their expectations of immediate wealth from trading and see it as a journey where they will grow and improve and never really arrive. The rewards are limitless but limited at any point in time by a persons own personal growth.

Developing consistency is the key to success in trading. Consistency in applying profitable strategies. That is the first goal - applying a strategy with a positive expectancy CONSISTENTLY.

Maintaining consistency has many challenges. You must act and think the same when you are going through a draw down just the same as when you are having a winning streak. True success comes with self mastery.

It takes personal growth to handle larger amounts of money and step it up when you have achieved a base level of success that you can leverage up on. This needs to be done incrementally at all times maintaining consistency in your application of the strategies.

My recommendation to new traders is always to start small, get the basics right and then look to increase. You can't build a mountain on matchsticks. You need a great foundation to build something awesome.

As you grow it is absolutely important to be consistent, not to stop suddenly or fall back on smaller sizes because the pain of draw down is too great. As soon as you trade down you are effectively crystallizing the loss. The only downsizing done should be reduced trade sizes in accordance with a money management plan. Not reduced because you can't handle it. That's why it's important to increase with your own personal growth and not too far out of your comfort zone.

All the best with your trading.

Cheers Rachel


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  #5 (permalink)
Elite Member
Detroit, Michigan
 
Futures Experience: Beginner
Platform: Ninja Trader
Favorite Futures: Futures
 
Posts: 295 since Nov 2011
Thanks: 302 given, 280 received

I guess the text on this section of the forum says it clearly:

"This forum is where successful traders spend most of their time and where struggling traders never visit. The psychology and money management forum is where you learn to become a profitable day trader."

I thought there would more interest in this particular topic, but I guess the quote above says it all.

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  #6 (permalink)
 Vendor: www.traderrach.com 
Auckland, New Zealand
 
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Platform: MetaTrader
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TraderRach's Avatar
 
Posts: 21 since Oct 2012
Thanks: 8 given, 26 received

I agree - Psychology and Money Management is Key

I agree TrendTraderBH.

As you evolve as a trader and go through the various stages to become successful there comes a time where you realize it's not about the method and the eternal search that can create.

Psychology and money management are where the answers to true trading prosperity lie. It's not until a trader settles on a method and looks within themselves for the answers, gaining expertise and refining their method, that they make measurable progress in trading.

Mastery in anything requires real application on a skill and you can not do that when you flip flop between methods and following different people thinking that is the answer.

A lot of marketing in the industry is about finding the winning method. This just continues to mislead people into thinking that is what's required to succeed. Trading methods are individual to particular traders and if you attempt to trade a method that doesn't suit your trading personality it will put undue stress on you. Buying an off the shelf method that someone else trades can also give people too much confidence so they trade outside of sensible money management levels that aren't appropriate to their own skills as a trader.

I suppose these issues are some of the reasons that most people fail at trading.

All the best and I hope you all "make it".

Cheers Rachel

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  #7 (permalink)
Trading Apprentice
KANO STATE NIGERIA
 
Futures Experience: Intermediate
Platform: FXPRO CTRADER
Favorite Futures: FOREX
 
Posts: 16 since Jul 2012
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CAN'T FANTASY BE A MOTIVATION?

Whenever the word fantasy is mentioned in the context of trading i use to remember Warren Buffet in his early life when he said 'I always knew I was going to be rich. I don't think I ever doubted it for a minute'.

and whenever the word fantasy is mentioned i always feel blame because i can selflessly call myself the icon of fantasy.

Fantasy encourages me, motivate me to work-harder, makes me feel confident, and whenever i don't have fantasy i felt powerless and discouraged.

Fantasy, is one of my fuel that help me by motivating me to work harder in order to achieve discipline and become master or super trader at all cost.

whenever the word fantasy is said, i use to look at those who have strive from zero point to the point that the become successful, even-though some are even school drop-outs.

Fantasy, reminds me of a man i had wanted to be. may be like Bigmike owner of these site or Albrook price action trader.

without the fantasy i have, i can not endure most of the pain of staying at home alone while learning,stop myself from going to many fantastic places, and laboring my self to become a master trader.


NEGATIVES;

Fantasy,makes me easily hopeless when something unexpected happen, but the same fantasy brings me up easily to the former path and now with another experience.

Fantasy, makes me waste time in watching or talking about many wonders that a successful trader is going to achieve ,such as being independent, trading everywhere, beating the major Banks etc, but the same fantasy makes me give up of such talk and go back to my work to gain it realisticaly.......

To me fantasy is life, fantasy is dream.Dream is illusion and dream motivate us.

To me the greater your fantasy in-combination with Self control the more you will stand to push higher and thus, what seems harder will now be a joy.


To me fantasy is good if combined with self control.

finally, i hope i understand the meaning of fantasy.

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  #8 (permalink)
Identify Evaluate Execute
Mercer Island WA
 
Futures Experience: Advanced
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TraderRach View Post
I agree TrendTraderBH.

Psychology and money management are where the answers to true trading prosperity lie.

@TraderRach

I couldn't agree more and it's unfortunate many people charge right into "setups" before addressing these two issues first. They are also highly correlated i.e traders that exhibit poor psychology generally also have poor money management skills. The two go hand and hand.

Cheers
DJ

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