New Client Feedback on Psychology

A client, Mark M. Rostenko, writes:

It always amazes me how few people make any money at this game even though successful methods are available. The reason is that MOST PEOPLE AREN’T TRADING TO MAKE MONEY. They think they are, but the fact is they’re trying to fulfill some other needs: for excitement, gambling, feeding their egos, being right, being clever, outsmarting somebody, sharing their score at the next cocktail party. Meanwhile, Trend Followers (and others) are sitting around, ignoring all the chit chat, all the arguments pro and con, discussions of the Fed, etc., just plugging in their numbers, managing their money, with discipline, and watching the cash pile up over time. There is what you must do to make money trading. There is a plan, a methodology that works and if you DO it, if you WORK the plan, you make money. That’s just how it is, but most people are more interested in trading some method that feeds their other needs: they want to pick tops and bottoms, they want riches overnight, etc.

It’s like Dennis said, you can publish the rules in the paper and people still won’t make money. Someone said you can publish tomorrow’s closing prices in today’s paper and people STILL won’t make money because they’ll put their own garbage in the way. It’s really a wake-up call when you realize that successful trading has nothing to do with forecasting the market. Something I fortunately learned early on is that it is a numbers game: knowing the risk, knowing the odds, and placing your bets accordingly. And it’s NOT glamorous. It’s NOT exciting. It’s NOT cruising in your Ferrari down Wall Street and flashing your Rolex. It’s just playing the numbers with discipline and doing the hard thing – the uncomfortable stuff that no one else wants to do. That’s what makes money and it’s why most people don’t. They’re not interested in making money. They’re not interested in being successful traders. That’s not their real motivation. If they really wanted to be successful traders, they would be because the information is there, the opportunities are there. But it doesn’t work the way most people would like to THINK it works and so you can show them what works, you can give them the methodology, and they don’t care. They don’t want it. It doesn’t fulfill their needs. Trading is for one thing — taking money [profits] out of the market. Any other needs you have, you better get them fulfilled elsewhere. But people bring their needs to the market and want the market to fulfill them. That’s why they get killed over and over again.

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