There will not always be support

There will always be resistance. Our default expectation should be resistance. But in markets, just like it many other aspects of life, there will not always be support. This is an important lesson because it is one of the reasons that winning in the markets is a really difficult process.

If you reflect on your life’s accomplishments, they were almost certainly met with some form of resistance before they were achieved; there were people who didn’t see the vision, people who didn’t want to change, and probably a few people who were passively (or actively) trying to sabotage your mission. Yet, you powered through it all to achieve the goal. You took calculated risks, changed direction more than once, and managed to ensure that you were protected when things didn’t go as planned.

There is no doubt that you also had your supporters: the people who saw the vision, knew the change would lead to something great, and were active in helping you achieve. If you look back on the accomplishment, you know you could not have achieved it without this core group of supporters.

But what would have happened had you been unwilling to change direction on an obviously miscalculated risk and that miscalculation caused concern at the highest level of your organization? As the momentum against you and your decision making mounted, how many of your supporters would have stuck with you? I propose that the doubt in your ability to pull off your dream would have led to your supporters moving on to another opportunity. That’s just human nature. People like to be on winning teams.

It’s the same in markets, all the research and conviction in the world cannot save you if the supporters of the stock you own decide to sell and that selling begets more selling building momentum as the crowd bails in search of some other “winner” to support.

Winning in markets requires active thought about downside risk. It requires a process that protects the account from fickle support. Great leaders recognize when they are wrong and are quick to cut their losses. Similarly, great traders know the exit point before they enter; if that exit point hits, they move on from the trade and never look back.

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