In Search of the Holy Grail

Before we jump in, I want to get the definition of IGNORANCE out in front so that nobody gets offended — Ignorance: The lack of understanding or knowledge.

As with most things in life, I’m ignorant. But for the things that interest me, I take the time to learn the what, when, where, how, and why of the matter. 

I don’t think there are too many traders out there who are ignorant of the statistics that 80% of traders fail to make money and it is even worse when you look at the numbers of traders who fail to make CONSISTENT money. You see, almost every trader can make money here and there.

In all the years in this industry, most of the individuals I’ve come across are educated, or they are entrepreneurs and driven. Most are not looking for a get-rich-quick scheme. But I do think there is a lot of marketing that focuses on making a lot of money (and this is possible), but if you just stop and think for a moment about the statistics of success, it isn’t probable for the normal thinking trader.

It is amazing how many try and continue to fail. If trading was any other industry or business there would be nobody wanting to take the risk of starting a business that has an 80% plus failure rate. If it is true that the individuals looking to start trading are intelligent or successful entrepreneurs who are driven to succeed then you would have to think with the internet and all the information out there on different trading methods, strategies, and systems that the failure rate would be better than that, but it is not. I see so many new and struggling traders continue the search for the proverbial holy grail, the method, strategy, or system where they can be successful. I have to admit that when I was starting out I searched and searched for that holy grail system that would pay me like an ATM machine. Then one day I came to the realization that it did not exist (this is a whole other story). 

You see, the issue isn’t a method, strategy, or system that is going to make you successful when it comes to trading. I could write an entire book on just this one thing. If trading success was only about a method or strategy then the failure rate would be a lot better than it is. Now, I’m not saying that you don’t need a method or strategy (a trading plan), you most definitely do. But, it would behoove anyone who is looking to consistently make money trading to look at the statistics and ask some questions; 

Why is 80% plus failing if they all are learning or have access to the same information? 

Is there a secret to being a successful trader? 

What is the difference between the ones who make it and the ones who don’t? 

Let’s break this down a little. Most traders I’ve come across have pretty good market knowledge (a lot of them are far more knowledgeable than I am), so the answer to the first question is how they think, their false beliefs about the markets, and how they respond to the pressures of trading. Now, if there is a secret to the markets then it is a secret to me as well. I don’t believe that the trading legends are all wrong when stating the same fact that there is no secret to financial markets. And lastly, what is the difference between those who are successful and those who are not? Again, this to me comes down to thinking the correct way or responding to the pressures of trading in a different manner than the 80-90% who are failing. To sum it up, to be a trader who makes consistent money is one who is doing the opposite of what 90% of traders are doing and thinking, that is the secret.