Spiderman 3, which is getting rave reviews, has an interesting parallel with trading.
In the film, Spiderman has to fight the usual external battle as he comes up against a litany of villains. This time around, however, the superhero also wages war with his inner self as he contends with a new black suit that brings out the darker side of his personality. The suit enhances his powers; he can run faster, jump farther, and throw his web with greater power. But these new abilities exact a great cost. Spiderman’s moral compass becomes skewed, and he becomes more vengeful and egotistical. He is more powerful than ever before, but also more dangerous.
Several years ago, when I first started trading, I would take positions in stocks that I expected to deliver a reasonable rate of return. I used an on-line retail brokerage and would sometimes phone through my orders. My positions were small, I didn’t have the ability to go short, and there was no leverage. I imagine this is how most traders got their first taste of the markets.
Now that I trade the currency markets, I can go short or long in an instant. I also have a previously inconceivable level of leverage, with the ability to control over £1m in underlying currency. This new power gives me strength and opportunity. But it also comes with great responsibility, because the risks from ego, addiction, lack of discipline etc, are all magnified. I am stronger and yet I am more vulnerable to my own weaknesses.