09 Nov The Impossible Climb To Success
The Impossible Climb To Success (Part III)
Nov. 9, 2016
Let’s say you want to do the impossible.
The first thing you have to do is believe it can be done. How? You could simply choose to believe for any variety of reasons (confidence, naivete, data, etc.).
Or you could look at other people who have done exactly what you want to do, and logically conclude: If they did it, I can, too!
Once that’s decided, you have to choose what you like. If your goal was to become a professional tennis player–and you believed it was possible–the next thing you’d have to do is choose your style. You can’t mimic someone else or do what you’re “supposed” to do. You have to do what you like and what suits you.
Keeping our tennis example, if you’re tall and powerful, you probably don’t want to build your style around defense. A defense-oriented game plan takes away your assets (power/offense) and makes you vulnerable to other people’s attack (powerful frame makes you slow and inflexible on the run).
In short, if you pick a style that doesn’t suit you, you’ll suffer a lot of defeats early and lose your desire to try for your goal. Whereas, if you use a suitable style, in this case an offensive game plan, you would hit aces and winners and blow people away. The victories would make you believe–and down the success path you go.
Of course, trading is the same. First, you have to believe you can make money. Second, you have to pick a style that suits you (and is fun to trade).
Once that’s accomplished, the last part is incredibly difficult. The last key to doing something impossible is the strength to stick to your plan.
Keep in mind, the plan should have shown itself to you while doing the first two steps. When you research people who have done what you’d like to do, the path they took to the goal should be clear. You want to do what they did? Follow the plan that they did.
And when you are choosing your style, the chosen style should help you see the road map to your goal. If you like trading a certain way, then you also like the journey it takes you on.
If the plan isn’t clear after believing and choosing, then you’re not quite ready for your journey.
If you do have a plan, then you’re ready for the toughest part of all.
We’ve talked about how $10K can hypothetically turn into $1 million.
There’s a problem with that example, though: No one can actually do it.
Well, someone could do it, but that person is a rare, rare bird. Here’s why.
Let’s say you want to turn $10K into a million dollars. You believe it can be done, you’ve chosen your style, and you have your plan.
You want to trade just one trading system and you want to just use one currency pair. You like to focus and you like how that type of trading feels. You know the drawdown and the winning percentages and how often it trades. You know what you can expect on a monthly and/or yearly time frame.
So you begin.
And then one of the worst possible things in the world happens. It goes exactly as planned.
You start making money. Things go really well. You see your modest starting amount of $10,000 grow and grow.
At first you’re ecstatic. Who wouldn’t be when things are going well? But then the lofty air starts making it a little hard to breathe.
Yes, it’s true you’re now successful and your account has grown. But the higher you go, the bigger the stakes. And the losing streak is just around the corner.
Take a look at this. In our $10K To A Million example, eventually we hit alosing streak.
In that six month period in 2011, you had three losing months and saw your account drop by $9,175.
Think about that. You’ve made a lot of money and your $10K account is now almost $50,000. And then you have three massive losing months in a six-month period and lose over $9,000. The losses over that period equal almost the entire account you started with! In your mind, you started as a $10,000 trader. Now you’ve lost almost that amount in half a year.
It’s really hard to change that mindset. If you started with ten thousand, nine thousand is going to feel like a lot of money to lose. The easy thing to do is to stop while you’re ahead. You made a nice chunk of money. Now you just want to walk away.
There’s no shame in that. You’re a big success. But you won’t be getting to a million, either.
Mission accomplished. Mission abandoned.
But maybe you’re stronger than most and make it through that tough period. Consider what happens later.
You’ve traded faithfully for many years. You’ve turned a mere $10K into $900,000. You are the greatest trader on earth.
And then in a four month period you lose $160,000. That’s a massive number for anyone, but remember you started with just $10,000. That loss is sixteen times bigger than your original trading capital! Who could make it through that and keep going?
There’s no shame in stopping right then. You’ve made gobs and gobs of money. You’ve proven your point. By any metric, you’re amazing.
But you haven’t gotten to a million, either.
People think having success is easy, but it’s not. Success can do weird, nasty things to one’s psyche.
That’s why it’s so hard to achieve something extraordinary.
Most people don’t believe it can be done in the first place, so that eliminates the majority.
Then the remaining people don’t do what they like and get frustrated. So more are eliminated.
And then the inability to stick to the plan when the big numbers hit takes a huge toll on anyone left.
In fact, I don’t know anyone who could incorporate the three steps and do something impossible.
Or do I?
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.