They say you learn everything you really need to know in life back in Kindergarten and in many ways that is so true. However, as adults we often forget some basic lessons that can serve us quite well in our careers, especially as traders and investors.
For me, I remember as a little guy that life wasn’t fair. After all, there were people who were better looking, much smarter, had far less strict parents and had much nicer and many more toys than I did as a child. However, I soon learned that if I did good things and was a good person, I would be rewarded and that what inequities existed, didn’t really matter!
I think this lesson is one that many traders need to relearn and remember. Take for example this email I received in my inbox this morning….
“While I greatly respect your technical trading skills, I think it would beneficial to you to realize the government is manipulating the markets. To deny this fact is pointless. They have wanted the DOW above 10,000 since March 2009. They manage news flow via Leesman on CNBC and use buy programs via JPM, MS and GS. I have been trading stocks for more than 10 years and I know the difference in a free market and a manipulated one. I realize you do not like to mix these thoughts with your trading but reading your comments on the web site, I feel you are in denial. I feel an occasional comment on the subject is needed.” – George
I have one simple question – how does having me talk endlessly about how “unfair” or “manipulated” the markets are make more money for you? Those who know me know that I am a doer, not a whiner. My #1 job as a trader is to profit, no matter what – not to sit here complaining to the cows come home how unfair or not I think the market is to the average individual investor!
Second, it is sad but true, in my experience those who complain the most are also those who tend to underperform the most. All of us unfortunately and far too frequently look for others to blame for our mistakes and losses and frankly right now there’s no better excuse than to blame widespread market manipulation. However, at the end of the day, how does that make you more money or, even more importantly, put you on the right track to improve yourself in the future?
Let me tell you a secret – the market has ALWAYS been manipulated to some extent AND always will. You can either choose to play and find ways to profit from the market or just go home and do other things with your money. Those who make money in this market don’t have time or energy to complain about how the markets are unfair unless they’re selling services and advice that pray on the fears of others. In my humble opinion, we have too much of that already and I’m not going to be part of that group!
Frankly, if you’re wasting more than one single second on such negative thoughts regarding market manipulation, you’re cheating yourself and your financial future. Such thoughts are nothing but a huge, time-sucking energy drain that you don’t need in your life! Part of being a good trader and investor is not letting such things get to you. Instead, let the herd worry about how unfair the markets are and go back to work!
In fact, the very next time you waste time and energy about how unfair things are, try to remember this excellent quote by Albert Ellis:
“The best years of your life are the ones in which you decide your problems are your own. You don’t blame them on your mother, the ecology, or the President. You realize that you control your own destiny.”
I couldn’t have said it any better than this!
Finally, last Sunday I watched the 60 Minutes segment on HFT and a friend asked me what I thought. In particular he asked me if I thought I could still make money trading in such an environment with the Wall Street quants and math wizards taking control. My reply? All I know is that I am doing pretty well (up +54% right now on the year) and that eventually these quants are going to blow each other to Kingdom Come. As I told him, my plan now is to profit as much as possible while they are in control and then profit as much as I can when they eventually blow themselves up.
That’s the way I look at things! While others focus on unfairness and manipulation and being angry and upset about it, I channel that energy and focus on finding and exploiting opportunities. Which approach do you think is better?