Lots of people in the industry want to tell you to keep trying to figure out how to trade. This is a story about knowing when to give up the dream…..
Several years ago I was on the board of a non-profit discussing new ideas for the organization. Many of them sounded promising and exciting, but as with any new idea, there was risk with all of them.
In one of our meetings, the chairman of the board suggested that for any new initiative we approved, we also attached a “poison pill” to the initiative. This was a new concept for me, so I asked him to explain.
He described the poison pill as a way to keep the organization from investing time, effort and money in things that don’t work.
So, for each new initiative we approved, we not only set desired outcomes and objectives, we also did the homework to determine how we would all know the initiative was failing so that we could have a frank and honest conversation about how to abandon the program.
Few people are wired to easily abandon what once seemed like a good idea, particularly if they are emotionally invested in the idea. This is what made the poison pill such a brilliant idea. It set the stage to help the organization save resources and only invest in outcomes that worked.
This past week I had the pleasure of meeting a young developing trader. He came over to my office to have lunch and talk about trading and succeeding in the industry. He’s bright, he’s smart and he already has a successful start-up business. He’s recently married and he just found out that he’s going to be a father. He wants to trade full-time. He’s been learning on his own for close to 5 years.
My perspective is that this young man, like many who have been attempting to learn the craft for years….needs a poison pill. He would do well to have a definitive line in the sand that will tell him when to abandon this trading dream and focus his talent and effort on something else.
Maybe the same will be for you. If you don’t have one, let me encourage you to consider establishing a poison pill for your trading. Just because you fail at trading doesn’t mean you are a failure. It just means that you found something that didn’t work for you. Being able to cut ties with one dream and find a new dream is a far better alternative to spending years (sometimes decades) of time, effort and money chasing a dream that will never materialize.
BTW, Based on where his development was at the time, I suggested to that if in 6 months he was not progressively and independently profitable and able to recover from any drawdowns, he should quit and walk away from the dream of trading full-time.
He remarked how the idea of a poison pill made his pursuit of trading a lot more serious. That’s not a surprise.
What’s your trading poison pill? If you don’t have one, let’s talk. We offer free half hour consultations for traders who don’t yet have a poison pill. Use this link to schedule a call.