If people were meant to fly then I guess God would have given us wings. Ever since the ill-fated Icarius man has dreamed of soaring into the heavens and launching into the unknown. Nature bestowed upon human kind two feet to keep him firmly entrenched on the ground. Perhaps that is why the concept of flying for most of us is still not without its inhibitions and fears.
Most investors are used to the concept of accumulation, we observe nature around us and watch a seed become a sapling and that sapling become a tree. Therefore the concept of physical growth is abundant all around us. Thus a trader is used to buying low and selling high or going long over time wherever he finds a good bet for long term price accumulation. This is the norm; in an investor’s mind there is no inhibition or friction at the concept of watching a price rise as much as watching a seed become a tree. However when it comes to watching prices fall …….. the mind just cannot come to terms with leaping off a cliff and soaring through the heavens because we all know what happened to the hapless Icarius.
In 1929 New Yorkers, and in fact most Americans, detested the name Jesse Livermore. No one trader in the history of modern financial markets had accumulated such ill-repute for so little reason other than going against the trend and selling when everybody else was buying. And when the whole Wall Street buy mindset began to slow down and a few people like Jesse Livermore started selling, the ensuing avalanche that brought the whole US financial machinery to a collapse ensured an odious reputation for little more than going against the trend.
People still have trouble in their minds with those that try to buck the trend. Jesse Livermore in the 1920’s had built such a career betting against the herd of sheep and in doing so earned himself the curious nickname “the boy plunger.” Why? Because man is supposed to keep his two feet planted firmly on the ground and cast his eyes up to heaven and watch his stock prices soar rather than to glide through the air and plunge back down to earth!
Perhaps it is an in-built trait that the mind struggles to grapple with in understanding that money can b made by shorting a market rather than to go long because things tend to grow upwards in nature. It is not easy to retrain the mind; it takes a lot of determination to separate oneself from one’s deterministic social conditioning since childhood. The formative years of youth have a powerful bearing on adulthood. So it is hard to imagine looking down from the heavens when all our childhood we spend running around in parks amidst the tall trees of walking through city centers with our parents gazing up at the majestic peaks of skyscrapers. That’s why most of us start to feel a little giddy when ascending some buildings and then take a peek back down to earth from several levels above. In similar fashion the majority of investors cannot cope with the concept of shorting a market because of an inability to surpass childhood experiences and mental blocks which arouse all kinds of fears in the mind when it comes to looking down from heights.
Successful traders are able to evolve their minds and grow beyond the early defined parameters of childhood experiences and concepts of natural growth. And certainly the more early successes in shorting a market then the faster the break-down of natural inhibitions about making money on a bungee jump! So this is why it is important as an investors to come to see a market from a new perspective that allows for opportunity on the down side as well as the upside. We watch trees grow and then decay. It is the nature of things for seasons to be cyclical. Therefore it is already a concept well ingrained within the mind that a tree should rise majestically and then wither in time. However the concept of ‘withering’ decay and death becomes abhorrent and therefore assists in early formative mental blocks that can present stumbling blocks to the new trader in the markets. But the sooner one is able to take the plunge into the markets and swim with the fishes one would soon see that money can be made in all directions whether you swim with a school of fish or whether you swim in the opposite direction once in a while.
The successful trader always keeps an open mind synergizing his left and right hemisphere brains to combine logic with emotion to interpret the sights and sounds of the market chaos around him. The mind has evolved past the concept of rise and fall to detach from any inhibitions about growth directions and values. The truth of the matter is that a trader can make good money on both the long and the short of it. The only stumbling block to grappling with the concept of the short of it though, appears to rest in the mind.
Yours sincerely
TraderSynergyBrain
No comments:
Post a Comment