Have you ever had an expectation and then was completely disappointed or shocked?
Then let me tell you a story from when I was a boy.
Cricket is a popular sport in many countries around the world, including Australia.
I remember as a kid, my dad would get up out of bed all hours of the night to watch it, supporting the English cricket team (because he’s a pom).
One of the biggest events in cricket for Australia and England is The Ashes series, which goes way back to the late 1800s.
The Ashes series is such a prestigious event, as two countries with such deep history compete on the international stage, so for events like this you’d expect a trophy to match the occasion.
In fact, as a young kid I expected a trophy of GIGANTIC size.
Well, you could imagine my surprise to discover…
The trophy, the ‘Ashes Urn’, is only 11cm high (4.3 inches)!
Yup, 4 inches high.
I can still remember my reaction when I first saw the Australian cricket team holding up the Ashes Urn. It was completely different to what I was expecting.
It was so small.
I was in a state of both shock and disbelief.
And that was one of my earliest lessons on EXPECTATIONS.
Expectation can be a funny thing, and a dangerous thing too, especially for traders, who can be misled by expectations in a number of ways:
…How profitable a trade might be…
…How profitable a strategy might be…
…How much money they’re going to make…
As industry veteran Bob Pardo mentions in podcast episode 60:
“another big issue with a lot of people is that they just don’t understand that it’s important they believe in what they have and just take it and accept it and let it do its thing, which is going to have good times and bad times, and live with the outcome..
but people frequently have expectations about trading systems that are a little bit unrealistic, and they often can’t find something they’re comfortable with”
So how can traders be more realistic with their expectations of trading systems?
There are a number of ways, but one way is to have a defined strategy creation process, one that’s been proven to work and that they can fully trust.
Bob goes into much more detail in our podcast interview, you can check it out here.
PS. Bob Pardo has been in the trading industry for almost 40 years, and his fund Pardo Capital has won numerous awards for it’s performance over the years.
He was even crowned Futures magazines “Trader of the Year” so he knows what it takes to build profitable and robust trading strategies.
If you’d like to know more about how he does it so you can do it too, check out buildingrobuststrategiesmasterclass.com
2 May 2018