Is your success in trading due to Luck?

Is your success in trading due to Luck?

A few days ago I wrote an essay stating that, “Trading is of course gambling. You won’t hear such a frank admission from the mouths of most financial experts because they are loathe admitting that Wall Street has more to do with Vegas than with Main Street, but hey, let call a spade a spade”.

Is response to this post I received a ‘snotty’ (lol) little email telling me that “Trading is gambling if you don’t know what you are doing”. We all know trading is not an exact science and therefore I advocate a critical but constructive discussion on many trading issues but as a professional trader being in the business for more than 20 years and mentoring plenty of aspiring new traders during that period I found this, if I may say so, a questionable remark because it displayed such sheer arrogance and arrogance is pure poison to trading.

You only need to read about the massive hubris displayed by LTCM principals in “When Genius Failed”, to understand that disaster for that venture was inevitable. In contrast to the “geniuses”, great traders like Paul Tudor Jones and Jim Simmons who have been making money for 30 years in a row are always humble and perpetually alert to risk. They never brag that they “know what they are doing.”

Volatility happens! Often the pair stays in a small range that feels like forever and sometimes it can drop on a heartbeat. We don’t control the markets; we can only react to them in the best fashion possible. Your trade may miss the stop or your profit target by a few pips and that may make a big difference. Let’s be honest there is often an element of luck involved in our trading.

Ask any successful businessperson about their accomplishments and if they are honest they will readily admit that luck played a part in their climb to the top. Conversely how many times has bad luck on any one trade not taken away all your winnings for the whole week? Luck alone of course does not result in success, but to deny its existence and to attribute all of your own accomplishments solely to personal skill and ability is the pinnacle of self-delusion and aggrandizement.

Luck is an important factor in trading the markets and anyone with a shred of intellectual honesty will instantly admit that fact. In many ways trading is in fact the art of managing luck, except in finance we like to use the term “risk” to make it sound more professional.

Rudy – Professional Forex Trading Mentor

https://www.forextradingacademy.co.za/
info@forextradingacademy.co.za

+27 82 926 6855

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