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I didn't see this come through so I'm sending it again... I appologize if
it is a double posting...
RTers,
The training program that trained me as a psychotherapist had a saying that
"it takes 7 years to make a therapist." They didn't mean the knowledge and
techniques, they meant the person of the therapist takes that long to
develop. I've been practicing for 10 years now. About 6 years in I began
to get that feeling that I had seen most of everything that comes along and
that I just knew what was what. By year 7 I understood deeply the wisdom of
that 7 year thing. Every year since then my understanding has deepened.
(Oh, and yes, there are still some surprises along the way...)
As a trader I've heard the "5 year & $50,000" rule. This means that it
typically takes a trader 5 years and $50,000 to become a trader (I assume
this means a profitable trader.)
Like the 7 year rule in psychotherapy this 5 year trading rule is just a
rule of thumb that has some practical wisdom behind it.
I thought that knowing so much about psychology I would be able to improve
on this.
Ha-ha! I've now been at it for almost 5 years and have spent around $30,000
( 1/2 of this in losses, the other half in expenses and lost income
generation) and in the last year I have developed into an almost break even
trader. Whew! What a journey! Discretionary, systematic, and
listen-to-others. I've tried alot of approaches. The approach that I've
finally got the hang of that's worked the best is to be really, really
careful with my capital!, regardless of the method.
I now know that there have been approaches I've tried that if I had stayed
with them I could have made them work. Unfortunately, my development as a
trader wasn't ready for that yet. I've found that the technique and the
trader's maturity must match.
Right now I am a 5 year, break-even trader who hopes this year will be a
little better than break-even. What a change from those early dreams! I
now have a pretty good mechanical system developed by a friend and a
discretionary method I'm getting better at. I love the discretionary
method, but I suspect the mechanical system will be my bread and butter at
this stage of my trader development.
I was a "natural" at psychotherapy and it took me 6 of the 7 years for
everything to really fit. I'm not anywhere near a "natural" as a trader and
I expect it will take longer than the 5 years for things to fit. My work
with people and my own personal experience convinces me that we can't be
what we haven't developed into yet. We can't cheat the developmental
process. We can get lucky, we can be "naturals", but ultimately maturity as
a trader and as a human being require effort and the passage of time.
So, while both discretionary and systematic methods have places in the
developmental process of the trader, and finally they are chosen to fit the
personality of the trader, I must agree with the premise that the real deal
is the person of trader and how far along the developmental journey he or
she is.
Steve
Woodland Park, CO
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