02 Nov Hiding in Plain Sight
Hiding in Plain Sight
Nov. 2, 2016
[Warning: The first hyperlink has a naughty word in it. Don’t click on it if that’s not your cup of tea.]
Looking back, I still can’t believe it.
Three times I’ve set an outlandish goal. Three times I’ve achieved it. And three times I’ve walked away.
When I first got interested in trading back in the early 2000’s, I was obsessed with stocks. More specifically, I was obsessed with one of my stock picks making 100% in twelve months.
So I studied stocks every single available second (when I wasn’t on the court) in mad pursuit of a 100% winner. Eventually, I came upon my breadwinner: Ceradyne.
Ceradyne was a company that made body armor for our troops, which was a hot topic at the time because the U.S. was involved in a little skirmish in the Middle East. Something about Weapons of Mass Destruction.
Anyway, I got the tip on Ceradyne (CRDN) from a Motley Fool newsletter, and I dove in. I wore out the pages in Value Line; I memorized Ceradyne’s historical stock chart; I even called the company’s Investor Relations department (more than once).
In my mind it was clear: this could be my 100% superstar.
Then one day I got a stock alert text on my phone. It was time to buy. I immediately left the tennis match where I was supposed to be coaching and sped home to make my first CRDN purchase. This was April, 2005.
From that point on, it was an intense, emotional roller coaster. The stock immediately went up and then down and then back up again. With every dip I went straight to the internet message boards to find solace. With every rise in price, I proudly patted myself on the back.
And then July came, and I rode a 50% jump. That was euphoric. Then it didn’t do anything for two months. That was torture.
Finally, in late September, all my work paid off. CRDN shot up and up and by the end of October I was up over 100%. I’d done it!
Then something weird happened. It wasn’t that much fun anymore. I had a goal of 100%, and once I got there my motivation dropped. I ended up riding the waves for a little while longer and eventually sold my thoroughbred for a 115% gain. You can see the CRDN chart here:
What happened next? Nothing. I really struggled after that win.
I knew I wanted to do it again, but I got distracted. It’s almost as if I wanted a new challenge. Something different. Soon thereafter, I got interested in Forex and never went back to stocks.
Mission accomplished. Mission abandoned.
After studying Forex for a long time, I got my breakthrough at a Rob Booker seminar in Orange County. His methods resonated with me, and I loved his systems.
After a little more research, I took Rob’s “Bossilator” principles and started trading Forex with my girlfriend/trading partner. I thought we could make a lot of money, and we did. I thought we could bank winners every day, and we did. We made 50% in three months and never lost a series of trades.
Then we got into a bad trade on the EURUSD, since dubbed “The Mother’s Day Massacre”, and got totally shaken up. We ended up making $10,000 on that bad trade, but that was it. The trauma had taken all the luster off. You can see our scary ride here:
We took a few more trades after the Massacre, but our days were numbered. After making about $1,000 a day for three months, we decided to stop trading that way forever (I wrote an eBook about this experience).
Then I got interested in robots. How great would it be to make a bunch of money and never have to push buttons?
So I worked for hundreds of hours in an attempt to build a robot that could make hands-free money. Most people say robots can’t do such a thing, which is music to my ears. There’s nothing I like better than proving naysayers wrong.
I wanted to do more than just prove robots work; I wanted to do something preposterous. I wanted to make at least 50% in one year trading only one robot. I had $2,000 available, so that’s what I used.
Did it work?
Here’s a screenshot of my account on May 1, 2014: http://screencast.com/t/yWgz3P0z
Here’s a screenshot of my account one year later on May 13, 2015: http://screencast.com/t/8lhvpf2A7x
As you can see, I didn’t make 50% in a year, I made over 100%.
Once again, I’d achieved my goal. And once again, what happened? I moved on.
After making 100% with that robot, I took a couple of losses. Those losses should’ve been no big deal, but they were. They were a big deal because I had lost motivation (again). I’d already proven my point. The little voice in the back of my head nagged me to do something else.
In the following months, I was ensnared by the siren song of diversification. I was doing research on all these great trend-following managers, and all of them were widely diversified. So I put my mind to that.
Recently I realized how silly I’ve been. I realized every time I had achieved my lofty goals, I’d done it by focusing. It was a successful way to trade, and it was fun. I realized that focusing is my truth, and I had puzzlingly told the truth to go away. It was embarrassing. And it was liberating.
That’s the next step in The Process.
First, you have to believe it can be done. Then you have to focus on how you’d like to get there. Don’t do what someone else tells you to do. Don’t do what you think you’re supposed to do. Do what you like to do–and what makes you successful.
And, above all, don’t get distracted. Even when you achieve your goals. Especially when you achieve your goals.
Once you believe it can happen and you commit without distraction to trading the way you like, the next step is to follow a plan.
We’ll talk about that next week.
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.