During one of my seminars at lunch break, a group of twenty traders insisted that I have lunch with them, at the same table. Usually, students want to get more knowledge, discuss their trading system, and get that magical indicator that will make their dreams come true!
Unfortunately, the hall was full, packed, not even one available table to sit. So, in no time they made arrangements to sit outside. Note that even though it was hot, it was also raining. That of course was not a problem. They made arrangements and we were all covered by umbrellas!
I asked all of them about their trading experience. I encouraged them to talk and say exactly what bothered them in their trading.
The vast majority had been trading less than a year and of course, they mentioned that they were in profit. Even though some of them were brave enough to admit that they had lost some money, over all they bragged that they had made lots of money.
Bragging is part of this business especially, in the early stages. They all brag that they make tons of dollars, rarely lose and of course, they buy at the lowest price and sell at the top!
The last student sitting closely on my right was a little bit skeptical. When it was his turn to share his experience with us, he couldn’t find the words to start.
Well, I always encourage my students to speak freely, so he eventually found the courage to start.
He had been trading for more than a decade. He had been primarily trading gold. In his part of the world, they love gold. He admitted that during his trading career he had lost about $200,000. I thought to myself that at least he is honest. I then asked what he believed went wrong. Again, he was honest. He didn’t blame the broker or anyone else but he admitted once more, with a smile, that it was all his fault. He explained that he started his career with no or minimal knowledge of trading the markets. He had the financial luxury to go "wild” on trading. But …
After a few years of trading and losing most of his capital, he mentioned that he started reading and learning how to trade. He mentioned that he explored several professional trading systems until he found one that reflected his trading style or character if you like. He also, mentioned that he discovered and started to follow basic risk management rules. This guy was on the right track after he lost $200,000!
When I asked him about his profit and loss he smiled again and replied:
"Sir, sometimes I win sometimes I lose. I am still struggling with my discipline".