The Fine Line

There are many things that satisfy the idiom "There is a fine line between..." We try to tread carefully along this line is fear of tipping towards the wrong side.

There is a fine line between...

Ambition and Greed
Love and Hate
Confidence and Arrogance
Genius and Madness
Bravery and Stupidity

The list goes on.

We correctly identify that a slight distinction exists between these pairs but rarely seek to identify this variance. It is much easier to claim that there is no one quality that makes one desirable and the other avoided. However, identifying these subtle differences is what gives a clear path to staying on the right side of the line.

I have struggled in the past distinguishing confidence from arrogance. I considered people of great intellect and talent and thought that they must be aware of their abilities. So, if one of these people opt for the 'playing it humble' approach, that would make them liars. The alternative is to recognize their gifts and be labeled as arrogant. I won't preach on what I think defines the line between confidence and arrogance but if you can identify the key element that differentiates the two, you can take measures to avoid finding yourself on the wrong side of this line.

In trading, there is a fine line between being a profitable trader and a losing trader. It may seem like the traders making the big bucks are highly educated individuals with great insight into world economics. Or perhaps they are mathematical genius with an innate ability to visualize patterns. Even after years of trading, I am surprised at the subtle differences between a winning trader and a losing trader. One small tweak in your trading habits can be the focal point of a profitable trading career.

I was able to identify my fine line through analysis of my past trades. I noticed that I had many good trades, but lost the majority of my money in one or two bad trades. I let the losses run too much and, often times, a single trade wiped out the gains for 4 to 5 winning trades. I also noticed that I had a high percentage of losing day trades. As a swing trader, some days can get boring with no action and I sometimes try to throw in a quick daytrade to keep things interested. This break in discipline only lost me a bucks here and there but the net loss of all these trades was significant.

Practically overnight, I eliminated these discrepancies in my trading and was amazed how far I was up in the first month. I not only made the switch from a losing trader to a winning trader, but to a highly profitable trader. This line is different for each trader but it is necessary to take the time to identify this line. As a losing trader, I spent months thinking that eventually something would click and carried on trading as I always had.

When I was growing up I played the violin. I started playing when I was only 8 years old but didn't see much improvement until I was about 13. Previously, I had practiced the same time over and over, believing that repetition would build proficiency. It is said that 'practice makes perfect' but in fact, Practice Makes Permanent. Practicing something incorrectly over and over just makes you better at doing something the wrong way. I eventually practiced violin for fewer hours but spent the time to think carefully about what I was doing.

In trading, doing the wrong thing repeatedly only makes it a habit. One must take the time to pause and analyse what is going wrong and what is going right. I was able to take a couple hours to turn something that wouldn't after months of trading. In the future, I plan to analyze my trades to further eliminate mistakes and become a more profitable trader. I'll save a lot of time, a lot of grief, and a lot of money.


-Still Broke