SCOTT WELSH TRADING BLOG

Too Many Cooks

Too Many Cooks

Nov. 18, 2020

Because I started late and didn’t come from money, I always had a soft spot for atypical kids.

The kids who were too old, too raw, or could barely afford lessons were always exciting to me.

An when I started with the “undesirables”, nobody wanted anything to do with them.

Other pros wouldn’t let them in their programs, parents wouldn’t come to lessons or take them to tournaments.

It was just me and them, alone on a court nobody bothered to look at.

Until the kid started blowing up.

As soon as they won a few tournaments, everybody got interested.

Parents suddenly loved to go to tournaments so they could brag about their kid to other parents. Other pros miraculously had open spots in their schedule.

And everyone seemed to have great tips on how to “take it to the next level.”

When the kid was nobody, there was no one around. When the kid started beating great players, everyone couldn’t wait to take credit or give advice.

It’s maddening, but it’s how it goes. And if the kid gets distracted by the newfound attention, it can (and usually does) all fall apart.

Trading systems are the same way.

First, we start out trading a system that kind of sounds good but came from a free Newsletter on the internet. How good could it be?

This isn’t a hot pick from Cramer or a secret trading method touted by a cool ad. It’s just a boring system from a guy we don’t know.

But, what the heck, maybe we start trading it anyway.

At first, we barely pay attention.

And then it starts working.

After a few months, we’re up 30, 40, maybe 50%. It’s amazing!

Now we can brag to our trader friends in person or online. Now we are experts.

We’re going to get rich.

But the success also makes us want to get involved.

The same losing trade we took early on is now a hit to our ego, so we override and exit early. The same entry we took many times now looks sketchy, so we pass on it. The same profitable move now looks like it’s going to turn around, so we take it out.

Suddenly, we’re involved with everything.

It’s self-defeating, but it’s how it goes. And if we get too involved for too long, the system performance will fall apart.

If we really want to be traders, we have to trust the system.

We have to fight hard to keep our hands off.

Too many cooks can spoil the broth.

And too many system overrides can spoil our financial future.

If we have real goals, we have to stick to the program.

Our profits depend on it.

Talk soon.

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Disclaimer:
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.