I’ve dealt with my fair share of losers both in the market and in life. At the end of the day I’m the one that made either the initial decision or the decision on how to react to the hand I was dealt. Therefore, I’m responsible for the results. It’s easy though to pass the buck and look for an excuse. In fact, it’s almost become second nature to first find fault elsewhere before holding oneself accountable. It seems that for many accountability isn’t an option. It used to be failure wasn’t an option but you only fail if it’s your fault, right?
I remember one of the best decisions I ever made was to share my trading results with my wife. I had taken a large hit and she was unhappy and questioned my methods. It seemed so easy to her to manage risk and make money. After all, that’s what all my “buddies” were doing, why couldn’t I do as well as them. Well, only one of those guys still trades while the others have moved on. BS can only last so long before it catches up to you and takes all your coin.
I learned to appreciate accountability by sharing my results with my wife. This keeps me from kidding myself with thoughts like “I’ve got things under control” or “everything will turn out OK in the end.” That type of thinking is naive and useless when you’re staring at a huge loss and you start to look for events/circumstances/one offs, etc. to place the blame.
So, how important is accountability in trading? Research has shown that prop traders who, while working for the firm, were successful and then failed miserably when they went off on their own. The difference is that they had someone holding them accountable at the firm. If they have a certain number of losses or lose a specific dollar amount they are done for a period of time. I can’t imagine a firm doing it any other way and so it makes sense to have a similar setup when trading solo.
If you don’t have someone you share your positions/returns, etc. with then you are missing out. That someone could be a significant other, a trading partner, a sibling or an independent third party. Just knowing that someone will check your work at the end of the day is needed fuel to turn the corner in trading. So, if you are at that proverbial corner, take a look in the passenger seat. Is anyone there?