Burn the Boats!

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Many people seem to struggle with commitment. With choice. Probably at least some of this is brought on by the absolutely immense number of choices we have available to us these days. Additionally, so many of the choices we might make in any given day, aren’t likely to be all that disastrous if they don’t work out. We can just try one of the other options instead, no harm no foul.

In trading, we don’t have quite the same luxury. We make choices constantly, every second we’re looking at our screens. Get long? Get short? Sit on Hands? Switch to micros? Change instruments? Change timeframes? The list is endless. Some of these choices have no particularly bad potential consequence (what harm will come from not being in the market?), but some are much more serious.

I think the most important choices start at a higher level though. For example, deciding to be a trader in the first place. This might seem at first glance like a pretty minor decision. That simply deciding to purchase a trading platform and some data, and throwing some money at a few trades, is deciding to be a trader. I would argue however, that this is not at all what it really means to decide to be a trader.

The decision to actually be a trader is very different from deciding to make some trades. The former requires a massive commitment to practicing and honing the skill of trading. The latter requires little more than some money (and not even very much these days!), some software (even free software), and pushing a few buttons. These are wildly different decisions, but I don’t think most people really think too much about the decisions they make, and how seriously they’re going to commit to them. People only really put serious thought and commitment behind decisions they know up front will be difficult or impossible to reverse once made. Quitting a job, getting married/divorced, having a child, etc. The “big life” stuff. But really those decisions are far less frequent than other decisions we make routinely, that will ultimately shape our destinies.

In my life, over and over and over again I’ve found that when I make a decision, a “fork in the road” occurs that often changes my life forever. Like the time over a decade ago when we spontaneously decided to turn left at a traffic light, to stop in at a pet food store we didn’t usually frequent for some cat food, and there happened to be a kitten there for adoption, and one of ours (who looked strikingly similar!) had just passed away a few months earlier. We made the decision to adopt, brought him home, and he is now our eldest.

Or the time the owner of the house we were renting in Silicon Valley, called to tell us she had found another house she wanted to buy. She had 45 days to sell the one we lived in, in order to get a huge tax advantage (called a 1031 Exchange in the USA). I decided that rather than move and get some really crappy apartment (if we were lucky – most won’t allow cats!), we would buy the house. With no down payment, and no income. That was 17 years ago and we still own it despite all the advice we got at the time to definitely not buy it because “prices are too high”.

These are decisions that, in the moment, would be very easy to not really spend any time thinking about. In both cases it would have been much simpler to go with the “lower risk” option. Don’t adopt the kitten so that we have no added responsibilities or expenses. Don’t attempt to buy the house because to even think of it is insane and it would be absurd to think we could even pull it off. But in both cases, I knew what I wanted, and had the faith in myself that I could make it work. And so I went with the decision that felt right in my heart, and I committed completely and totally.

Making a decision in this way, with total commitment to it despite not having all the information you might want in that moment, has always started an almost magical sequence of events. It’s really remarkable to look back on these moments in one’s life, and notice the chain of events that could only have unfolded in that way because of the decision that was made. Subconsciously, a whole lot of stuff goes into motion in our minds when we know what we want, and we’re simply unwilling to accept failure, period. And from there the people, resources, opportunities you need seem to just appear at all the right times. It doesn’t mean there aren’t also obstacles and challenges along the way – of course there are! But things can’t begin to happen until we decide.

There’s a saying you might have heard before – to “burn the boats.” This refers to several different historical/military figures/situations but the essence of it, is to be absolutely committed to one’s goal, with no option of “a backup plan in case this doesn’t work out.” Arnold Schwarzenegger expresses this beautifully in a talk he gave in 2018 that you can see here:

Many people’s instinctive reaction to the idea of making a decision you “can’t come back from”, is one of fear. Even terror. The idea triggers all kinds of anxiety and other reactions and they can’t bring themselves to make that decision. But I’ve always found that if you spend any time at all on crafting a well-thought-out “plan B”, subconsciously you’re going to want to use it. Just knowing that it’s there can prevent you from really committing, pushing for the big goal, the big prize.

Is it risky to not have a backup plan? Well of course! But what is life without risk? We all take loads of risks every day, often without even actually understanding the true nature of the risk (anyone drive a car??) but we do it without a second thought, or a backup plan. I believe strongly that if you’re going to commit to something potentially life changing (and trading is definitely that!), then you need to really commit. Go all-in. Burn the boats.

There can be no turning back.

Until next time, good trading!

Jonathan van Clute
Community Manager, Trading Research Group

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