Just received this from my dear friend Janice Dorn, a trading Psychologist, whose insights will benefit traders especially newbies! Thank you, Janice, for sharing.
RECKLESS VERSUS TENACIOUS (With deepest apologies to Aesop)
Janice Dorn, M.D., Ph.D.
Don’t be afraid to give your best to what seemingly are small jobs. Every time you conquer one it makes you that much stronger. If you do the little jobs well, the big ones will tend to take care of themselves…Dale Carnegie
Once upon a time there was a rabbit named Reckless who was always boasting about how fast he could run. He criticized all the other animals (especially the smaller ones)—saying that were slower and lazier and could never beat him. He was really rough on this one particular turtle (let’s call him Tenacious) and bullied him constantly. Reckless said ugly, nasty words to Tenacious who just sat there day after day and appeared to let the words roll off his shell.
But enough was enough.
Finally, Tenacious got really fed up with this. He stuck his head out of his shell, looked up at Reckless and said “Who do you think you are anyway? Why are you always bragging about how you are “all that” and so fast that nobody can beat you? I am sick and tired of hearing his abuse from you. “
Reckless smirked, looked down at Tenacious and squealed with laughter. “Nobody can beat me. Especially you—since you are slower than molasses. If you want to race, bring it on because you don’t have a chance. I will win, no matter how hard you try. “
“It’s on” said Tenacious, “we’ll race tomorrow at the crack of dawn. The next day came and Reckless and Tenacious showed up ready to go. The race course was all laid out and they both stood on the starting line. Reckless was cocky and confident as he watched Tenacious move slowly along the path. Reckless had been up most of the night partying with the other rabbits, so he was sleep-deprived and decided to take a nap.
Reckless woke from a fitful sleep and gazed round, looking for Tenacious. Slowly and steady moving forward, Tenacious was about a third of the way to the finish line. Breathing a sigh of relief, Reckless decided he was hungry and had lots of time to eat. The heavy meal and the hot sun made his eyelids droop. With a quick glance at Tenacious– now halfway along the course– he decided to take another quick nap before running past the turtle to beat him to the finish line.
The nap turned into a longer sleep and when Reckless woke up, the sun was beginning to set. Reckless jumped up in alarm and saw that Tenacious was now almost at the finish line. Reckless bolted as fast as he could, gasping for breath, leaping high into the air, giving it everything he had. Too bad. Too late. Tenacious beat Reckless.
This is my rendition of one of the stories from Aesop’s Fables and the moral is: Slow and steady does it all the time.
Many traders come to the markets with the idea of making huge profits by doing very little or getting rich quickly. They are like the reckless rabbit who thinks he can win with the least amount of work possible. What they don’t understand is consistent winning in the markets has to do with slow and steady gains. The real secret of winning is to get rich slowly. This is done by striking out (taking stops and small losses), hitting some singles and doubles (taking profits larger profits on a regular basis) and occasionally hitting home runs.
So- what are a few of the many trading lessons from Reckless and Tenacious?
(1) Overconfidence is a badge of ignorance. Unless you approach the markets with humility, you are doomed to failure. You might knock out a few good trades, and then get even more confident. You are an accident waiting to happen.
(2) Self-confidence is great, but it must be tempered with continual self-analysis and vigilance.
(3) While you are sitting back resting on your laurels and bragging to yourself and others about your wins, another trader is out at the gym doing pushups and strength training. He/she is preparing to do battle with you. Stay strong and alert!
(4) You and you alone are responsible for your successes and your losses.
(4) Learning to trade properly is a marathon, not a sprint.
(5) Never underestimate the value of patience.
(6) Take your setups and use them to maximal advantage.
(7) Chasing price is almost always a recipe for disaster and losing.
With ordinary talent and extraordinary perseverance, all things are attainable…Thomas Foxwell Buxton
Thanks and Good Trading!