Fifty-nine years ago today everyone in the United States was a bit freaked out. It had nothing to do with the stock market or economy. It was due to something unseen that was floating over our heads. The Russians had launched Sputnik, the first artificial satellite to orbit earth. The Russians had beaten the United States to being the first in space. The reaction in the US was a combination of fear (does this mean we are behind the Russians militarily as well?) to let’s get to work and catch up fast! Both reactions were natural, but either reaction is not necessarily how traders should react to other’s beating them to a new strategy having success with a new market. In trading being first is not always being best. It was true in the space race as well.
We all have the experience of hearing other trader’s success stories. A human reaction to the trader at the option club who has discovered a great way to make profits in Russell 2000 Index options, which worked great for the past four weeks since you saw him last is to start doing the same thing when the market opens tomorrow. However, this is often a recipe for failure. Keep in mind that when the Russians put Sputnik into orbit they had failed in many ways that were not made public. Heck, they put people’s lives in danger in ways the US would never consider, just to beat their rival into space. Your trader friend most likely has suffered through months if not years of trial and error leading up to their short term success. Remember that he’s only sharing the success.
The geniuses at NASA went to work catching up with the Russians in the space race, eventually through hard and independent work became the only country on earth to put a man on the moon. We had our own setbacks as well and they were public, but through focused hard work, we prevailed in the space race. You can do the same in the trading arena, but there are no short cuts. Focus on your own methods, don’t worry about the other guy, and take your time working into becoming a consistently profitable trader. It worked for NASA and it can work for you as well.