Trading as a War Zone

By | August 10, 2015

You know how some propagandists (from the passive, buy the index camp) like to portray active trading or investing as a war zone. There you are with your laptop or four screen PC  pitted against the brightest PhDs and quants that the money of hedgefunds and banks can hire. It’s like a caveman with a club going against a modern tank. You have no chance, you’ll just get crushed.

I’ve always maintained this line of reasoning to be baloney. There is indeed a fight, but it’s all internal, between your emotions, mainly fear and greed. It’s no Ph.D.’s working for Goldman Sachs fault that you averaged down on that EUR/USD trade until you got margin called.

However, recently I developed a new perspective on this whole trading – military parallel. Reading this review helped me crystallize my thoughts on the subject. In one way, soldiers and traders are quite similar. One risks being killed or maimed, the other one risks the same, financially speaking.  You see, a soldier who’s been on the battle front returns home at the very least with psychological scars, if he was lucky enough to escape physically unscathed. That’s true as well for any trader worthy of the name.

What would you think of a guy who’s played some first-person shooter games and watched Rambo 4 calling himself a soldier? And selling courses and mentoring about how life is on the battlefield? Well, I don’t know if someone that sick really exists, but there are plenty of wicked characters doing this type of thing in respect to trading.

I cringe whenever I see these flashy designed websites with copy along with the lines of ‘let’s learn to trade in an exciting and fun way’. Bullshit! If you want excitement and fun go to an amusement park. Trading is a serious business. After some nine years in the trading trenches, I can easily tell apart the fakers from those who are the real deal. Look at how these salesmen act in their YouTube videos and then compare them to  Paul Tudor Jones, a real trader. Or read Marty Schwartz’s book, Pit Bull, a personal account of a famous day trader.

The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the man of inferior emotional balance, nor for the get-rich-quick adventurer. They will die poor. – Jesse Livermore