Hope: a 4-letter word?

H.o.p.e.

Is hope a 4-letter word when it comes to investments and trading? If your immediate and thoughtless reaction was "yes," sorry to inform you that I wasn't asking whether the word actually consists of four letters (tat much is obviously true). To determine whether hope is a good or bad thing (i.e. 4-letter word), one needs to first decipher the source of this hope.

If hope springs from a place of pure emotion, it's time to check yourself. This is the type of hope that you're often advised to stay away from when it comes to trading. It's the type of hope that often sparks excitement due to the unknown. Some might even be tempted to call this something similar to the rush provided by gambling. I always wondered why people were driven to gamble, knowing the odds were stacked so against them. It's probably that tiny, shiny, almost blinding light known as hope that sets people off.

Even the tiniest ray of hope can be amplified into something that takes over the mind and heart. Now here's where we reach a fork in the road. If that feeling (of hope) that has taken you over originates from verifiable data, do not ignore it. This is what leads to increased effort, finding the signal from noise, and running with something until it's complete. Some might even be tempted to call this passion.

I've heard some say that it's unhealthy to have a passion for things that are supposed to be more data-driven, like trading. That is tantamount to saying that you should never let hope enter your trading strategy. Well, I respectfully disagree. Positive, data-driven results that leads one to exert greater effort in separating the signal from noise and fortifying your trading strategy may sound very acceptable and almost academic, but this is exactly what it means to allow hope to seep into your work.

I end this post with one humble admission. That I see a ray of hope shining brighter than any other time before. No numbers here to back it up for the sake of preserving and almost protecting what I've been experiencing, but nevertheless a timely post to express something I've been feeling as the result of real progress as of late. Make of it what you would like. Results over time will provide more credibility to this feeling that has been slowly, cautiously, and undeniably been creeping into the background of my trading. It's what has been driving me to finally apply discipline in my trading unlike any other time period before (with FOMO ...NoMo'). It's also been driving independent reviews and postmortems of my trading on the weekends. Interestingly, it's also been a more humbling experience than I expected, allowing me to see things from different angles and perspectives rather than fueling overconfidence. I may choose to break this cryptic post down more one day, but until then, I hope that you too can experience this at some point in your journey.