Trading Lessons from Cool Hand Luke: Get your mind right!

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Tuesday 8 October 2019


“We do not see things as they are but as we are.”

--Samurai Trader’s Maxim Number One                                                                        

Commentary & Analysis

Trading Lessons from Cool Hand Luke: Get your mind right!

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My all-time favorite currency guy is John Percival (now retired and living comfortably in the French countryside I understand).  My respect for his insights over the years is immense.  John has likely forgotten more about currency trading than most people will ever know.  In his newsletter, Currency Bulletin, and book, The Way of the Dollar, John was emphatic about the “four knows:”

1.    Know your reasons

2.    Know your risks

3.    Know your time frame

4.    Know yourself

Books have been written on each of these four knows, some good, others not so (I have list of my favorite investment books posted on my site here if interested). 

Many believe if your reasons for a trade are right you have most of the trading game conquered.  But that is not true.  It’s not true because the market can find all kinds of ways to take your money even if you reasons for a trade are right. 

Of the “four reasons,” John warns the last one on the list, know yourself, is the hardest of them all to know

After years of playing at this game, making some great trades along with many excruciatingly bad ones, having some good runs met by nasty drawdowns, I couldn’t agree more with John: this game hinges ultimately on knowing yourself. 

I’d like to flesh this out a bit more with Luke’s help… READ MORE