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How to Protect your Wealth by Investing in AI Tech Stocks

Simple? Yes - Easy? No

InvestorEducation / Learn to Trade Sep 18, 2009 - 07:32 AM GMT

By: Charles_Maley

InvestorEducation

Some will never learn anything because they understand everything too soon - THOMAS BLOUNT


I was having a conversation with my partner Martin yesterday, and he was telling me how a mutual friend of ours, a commodity trading advisor, was losing some accounts lately. I was quite surprised by this since the program was in a routine draw down. In addition, this program makes a lot of sense and has been proven profitable for quite some time. So, why is it that people are throwing in the towel?

I think it’s mostly because people confuse knowledge and belief in that knowledge. They know that these 10% - 15% type draw downs are as normal as the run ups, but when faced with them in reality they don’t really believe. They think it’s never going to end and it is a lot easier to quit than to shift the perspective.

I think one of the most important keys to long term success in trading, is really accepting that draw downs are part of the process. We instinctively know that we go through losing periods, but we have a hard time believing it is a normal and necessary part of the winning process.

Martin told me a story about a guy named Toshihiko Seko who won the 1981 Boston Marathon. He said his training program was very simple in that he ran 10 kilometers in the morning and 20 kilometers at night. That’s it. There were no computer models, fancy running shoes or state of the art training regimens. When Seko was confronted that his plan was too simple to win, he agreed that it was simple, but he also said that he does it 365 days a year.

Simple? Yes.  Easy? No.
Thomas Fuller once said, “An invincible determination can accomplish almost anything and in this lies the great distinction between great men and little men.” Sometimes the hardest thing to do… is to do nothing. We need to train ourselves, just like the runner, to stay on course until there is a real reason not to.
Simple? Yes. Easy No.

Charles Maley
www.ViewpointsOfaCommodityTrader.com Visit my blog!

Charles has been in the financial arena since 1980. Charles is a Partner of Angus Jackson Partners, Inc. where he is currently building a track record trading the concepts that has taken thirty years to learn. He uses multiple trading systems to trade over 65 markets with multiple risk management strategies. More importantly he manages the programs in the “Real World”, adjusting for the surprises of inevitable change and random events. Charles keeps a Blog on the concepts, observations, and intuitions that can help all traders become better traders.


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