If we cannot forecast accurately the course of a simple chess game, what makes some people think that they can do it for something as complex as the financial markets with millions of participants instead of just 2 players?
Look at the books and courses that are being sold. You will see some preaching value investing, right next to one insisting on price action. There are manuals on asset allocation and portfolio management. Here is one demanding that their trend following system surely works and that you only need to spend 2 hours a day. Another one saying its easy to turn $1,000 to $72,000. Some call for trading futures intra-day as a source of income, while some advise long term investing in high yield instruments.
The usual formula is this. Follow the methods of author or trainer, and you will achieve similar success. This is a fundamentally flawed methodology, because thousands of other traders and investors has tried to follow and lost money. They forget that the market is not dead, it is alive. As in chess, you make a move, and someone is there playing the Black pieces. When you enter into a trade, thousands of people are reacting to your entry. And a strategy that worked in the past may not always work again in the future.
Attend their seminars or read their books, many of them are very impressive and persuasive. Apparently, each of these contradictory formulas is the key to success. And some people believe it! Err, I was one of them. Now I know better.
Hi Ian
ReplyDeleteSame also la, i was one of those people too!
Actually thinking back, I can conclude that i was foolish to attend those courses (and 'waste' thousands of $$$ in the process) and believe i could be as successful as the trainers, or be like what they advertised.
However, some of them are really successful in trading, and they continue to provide live support every trading day, even till today.
But as to why i didn't become as successful as them, i guess it's just not for me. Everybody's circumstances are different, and our DNA are also not the same. I see it akin to me spending $18K studying in local uni for 3 years. The degree was just a stepping stone to my current career, i learnt alot in uni, but i may not have applied all (not even 10%!) of what i learnt on my job. Yet i gained knowledge one way or another and i've grown wiser & become more savvy. My 3 years spent in uni definitely played a part in moulding me into what i am today.
I tend to apply the same logic to my trading journey. (or maybe it's just me in self-denial!!!)
Cheers, CO