Tuesday, May 20, 2008

The more I learn, the more I don't know?




















The more I learn, the more I don't know?
This is the first paradox of learning I discovered when I was a student!
It can be resolved simply.... during our early years as students, as we were introduced to new topics of maths, science & technology, the boundary of knowledge seem limitless! The more I know, I discovered there are even more I don't know out there!

This paradox came back to mind when I received an email from my best friend CK, a few days ago. Quote:

Since last November after learning FX from you. The first two months were great. I was able to win consistently. However, I believe that was more luck than anything. As I learned more and more I found I loss more often ?? What happened there? Very interesting. Isn't I suppose to win more with more knowledge?

The background was I gave him an introduction to forex via the Meta Trader platform 6 months ago. He liked it immediately. Well, I said, try it out on a demo account and learn how and when you can loose money; and how you can get busted!

So he was on a road of discovery and reach the juncture facing the paradox.

How this paradox can be resolved?
The answer came from a trading psychology book I was reading recently. It cited when new traders begins trading practice, they are generally cautious, neutral and unbiased when starting out.

They may experience a winning streak when trading along the trend. That was the time when "even blind chickens can find corns"! As times goes on, both greed and fear sinks in and affect the trading mentality.

The next phase when one encounter more losses than wins; the normal reaction is the feeling being inadequately equip. So the quest of knowledge in market landscape and technical tools - which I think is correct and good. I had been through exactly the same route before!

One missing piece is to learn about one's trading psychology!
The advice was to regard trading as statistical game, losing is part of it. Take responsibility of the problem inside you. Acknowledge it is the first step towards a paradigm shift to develop a mindset in reducing (if not eliminate) the emotions involved in trading.


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