Humility and Its Place In Trading

I had a nice post all written out and waiting to be spell-checked when I got an email from a fellow trader asking me to take a look at a developing story in the trading community.

It seems as if a Mr. Tim Sykes has become embroiled in a bitter battle for his credibility as a trader with the editors of a large trading magazine. Mr. Sykes, if you don’t know, is famous for turning a $12,000 bar-mitzvah bounty into a pre-tax profit of over $1 million dollars in the stock market. He has made several TV appearances as well as authored a new book that has recently just hit the shelves. Anyway, because of what the editors of the magazine percieved as his over-the-top antics and self-hyping, coupled with a large negative %YTD performance, he was not invited to an important upcoming function the magazine was having.

If you look at this story, you will see an old theme emerging; young aspiring guy gets big, enjoys the limelight, and subsequently crashes in a ball of flames. Simple, right? No. This has happened to alot of people in trading, outside of trading, and wherever the competitive human spirit can be found. Sure this is a lesson in humility but let’s go beyond the lesson and let’s find an understanding here. First of, I do not personally know Mr. Sykes but let’s all be clear on this - turning $12,000 into $1 million is not luck as some of these “experts” think it is. If it was $12,000 into $100k, that’s different, it could be argued as just pure dumb luck or two to three obscenely leveraged trades (ummm…..like all these so-called “professional” hedge funds). A million is a very high number - to get there requires a degree of skill. Now I’m not here to say how much skill Mr. Sykes had but the important thing is - he had skill.

Ok, so now you’re wondering: “Why did the otter decide to put up this post instead of the post he was originally going to put up?” The reason I’m doing this is because there has been a consequent mushroom cloud of chat room criticism that surrounds Tim Sykes. While it is true that his is a story of hubris, we should also turn the attention on ourselves if we find that temptation to criticize him. First of all, Tim Sykes is very much like you and me. He has traded his own money to garner the success and additional capital that he has been able to garner. His fame is a result of the same entrepreneurial drive that you possess as you make your way towards FX proficiency. The only difference is, he made it to the winner’s circle, and unless these critics are trading with a couple of million dollars in their account that they grew out of their own trading skills, he is out of their league to criticize. Also, keep in mind that it’s good that we have traders out there like Tim and Grace that represent our community, and whether some of these other great independent traders are cognizant of it or not, they are a symbol that with enough work, trading success can be attained. You don’t have to be working in a big bulge-bracket bank or a hedge fund - you can do it in the middle of your bedroom amongst the empty soda cans, unwashed clothes and crumpled candy wrappers. Be glad that we have this kind of authentic representation - their success is the grand prize we all are searching for and believe me; the prize is indeed grand.

In closing, let’s just say that whether or not Mr. Sykes has a problem with humility is not the main issue. The main issue here is that we should look at this situation and see if we have a problem with our sense of humility. I can guarantee you that trading the market will humble you, whether you like it or not. Just when you think you’ve got everything under control, you will suffer a loss. That’s just the way it is. Being a trader is a big responsibility, not only to your money but to your psyche. Having your account broken can be a debilitating and crushing depressant - therefore it’s always important to have proper risk management as well as a healthy attitude towards speculation. None of us are immune to losses. We will experience them eventually. However, the key is to make sure that you responsibly enjoy the good times so that you can keep yourself emotionally even during the bad times. That means being respectful with other traders if they happen to be down when you’re up. If there’s one thing certain in this speculative universe, it’s that we CAN be the heroes at one time or another and most importantly, we WILL be the donkeys at one time or another.

Posted in Categories: Contributor, Psychology.