The Role of Responsibility in Trading
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Alan (not his real name) was an extreme case - blaming the markets, some 'market controllers', bad luck, the central bank governor... for his trading results. From his viewpoint, he never seemed to be in control of any part of his trading destiny, always at the beck and call of others.
It took some time to persuade him that he was failing to take responsibility for his actions and that interacting with the markets had a characteristic that differed from normal human interactions - a difference that often makes taking personal responsibility a critical success factor for a trader.
First he was given a range of examples from normal life - in terms of shared responsibility.
Imagine you are conversing with your spouse or your boss or a client - a human being - they will normally try, using goodwill, using body language clues, using experience, to interpret what you say or do to identify what you really mean.
For example if you say at dinner time "I would like some more peas please" is unlikely to be interpreted as just 3 more peas - except as a joke.
If you say to your broker "sell 1000 IBM at 130 with a buy stop at 127" she or he might ask if you meant a buy stop at 133.
If you said you were starving, unless you were particularly thin and unhealthy looking, most people in the Western World would interpret this as being particularly hungry not actually starving.
If you went to a touch a hot plate in the kitchen, the cook might say, "careful, it is hot".
If you said to your broker sell my Intel to close please, she or he might say, "but you do not seem to have an open position."
You get the point, often we expect and get some help and shared responsibilities for our interactions with human beings.
However the market is more literal and unforgiving - what you ask for is supplied - it is the ultimate want-satisfaction system - you get what you ask for literally. It is part of what makes trading addictive for some people - it is a form perhaps of unconditional love - "you just ask and I will give" the market seems to be saying. If you ask for three peas you get three peas. If you ask for more than you can handle - you over-trade - it is supported by the market - for a while anyway. If you have mis-interpreted your system it does not know.
If you intended to close but had no open position the market does not know, takes your trade anyway and so you now do have an open position!
The normal 'soft' checks and balances involved in dealing with a human system are not present. So there is more onus on the trader to know what they want, what they need, in what quantity, for what purpose, when, how and why - and say so clearly.
This is a test many traders cannot meet - they are too used to being protected by soft checks and balances - they cannot stand on their own two feet, they are undisciplined and it shows up fairly quickly. If they do not take full responsibility for their actions and they cannot cope with the consequences - there is no-one or no thing to hide behind. This did not stop Alan trying to find scapegoats for the outcomes from his trading actions.
The beauty/perfection of the market was too much for Alan to handle while he assumed it behaved like a human. "It is frightening" they say, or "the market is rigged" or "they should not allow that" or "I was ripped off by slippage" - all common expressions of those who do not take full personal responsibility for their actions.
A classic translation or projection onto the market or on other market participants of aspects of a trader in denial of personal responsibility.
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