“Win or lose, everybody gets what they want out of the market. Some people like to lose, so they win by losing money…
“I think that if people look deeply enough into their trading patterns, they find that, on balance, including all their goals, they are really getting what they want, even though they may not understand it or want to admit it.”
- Ed Seykota (via Market Wizards)
JS comment:
Could Seykota be right? Are losing traders “getting what they want” from the market?
What are some constructive ways to interpret this idea?
Could it be that certain goals – desire for entertainment, desire for action, desire for escape etc – are more important than the goal of making money, and thus dilute the necessary focus on profitability?
What do you personally “want” from the market?
Are your subconscious desires aligned with your objectives?
Visit the Trading Wisdom Archives!
p.s. Like this article? For more, visit our Knowledge Center!
p.p.s. If you haven't already, check out the Mercenary Live Feed!
p.p.s. follow us on Stocktwits & Twitter! @MercenaryJack and @MercenaryMike
Jack,
What about the pain of losing as you hold on to the position? Nobody wants that and I never want that. That is not what I expect out of the market..It may be fun for few minutes but as soon as it started going south..you do not want that terrible feeling. Nobody do trading for that..if it is so 95% traders who usually lose in the market likes to be kicked in the nut..I guess
I think Seykota's observation is better taken as a food for thought exercise than a truism. But in respect to your question, I wonder if it's a trade-off: The pain of losing is deemed an acceptable sacrifice for whatever other motive is being fulfilled. Think of the biotech investor who consistently loses money on fly-by-night startups, but gets to bitch about his stocks on the golf course all the time, and occasionally brag about the ten-bagger he picked up on FDA approval. That whole experience, including the entertainment aspects, the conversation, the martyrdom, the glory, may all be worth the financial pain of consistently losing year after year. And so on.