WHEN DESIRE TRUMPS REASON
When desire trumps reason, disaster ensues.
Desire ; a strong feeling of wanting to have something.
Reason ; the power or ability of the mind to think, understand, and form judgments logically.
A disaster is an event that results in great harm, damage, or death.
Therefore, in summary, if Desire >Reason = Disaster.
From the definition above, human beings should, by all means, endeavour to place reason above desire. However, our daily existence is a representation of the opposite. Our lives are filled with instances where we consciously let desires rule over us with consequences registered later on.
In the world of retail forex trading, desire seems to rule supreme over reason. Like any other business, forex trading ascribes to the ebbs and flows of business cycles and phases. Consequently, it takes time to build mastery, a credible track record, and profitability.
From the study of economics, we learn that an overwhelming desire for a product or service, otherwise known as demand leads to the creation of a market for that commodity. The overwhelming desire for supernormal profits in forex within the shortest time possible has led to the creation and rise of questionable ‘solutions’ in the form of;
- Proprietary software (indicators & robots)
- Account management and
- Unregulated investment services.
Emphasis is placed on approaching forex trading as a business. Profitability is a result of consistency in learning, practicing, and implementing sound, reasonable trading practices. Note that your primary objective is learning then application of the concepts acquired.
This journey takes time. Unfortunately, a majority of new entrants in the forex space do not desire to surrender themselves to the process of learning. Enter desire, exit reason. A quick survey on social media platforms leads you to gurus selling proprietary software or account management services. These services promise exponential returns in the shortest time possible. Desire goes into overdrive, imagination deludes you into believing that you will earn millions by a certain time. To some degree, hubris sets in. This ‘solution’ deludes us into thinking we are smarter than the rest.
As mentioned earlier, businesses go through cycles and phases. Profits are a lagging indicator of what the business has implemented in the recent past. Reason therefore dictates that overnight or exponential short-term profits are an illusion. From this premise, the ‘solution’ is unsustainable and probably a scam. At this point, however, desire is strangling reason and we end up committing our resources. The outcome is usually disastrous, financially.
Why do these ‘solutions’ fail?
It goes back to an unhealthy and overwhelming desire for quick profits. Unhealthy and overwhelming desire to shorten the learning curve.
In the case of account management and questionable investment services, we desire to cede control to a third party. Whoever is trading/managing your account has no attachment to the capital invested. They have no incentive to trade conservatively, eventually, they become reckless, especially in account management. This happens when we insist on eliminating the process of learning by ceding control to a third party.
For instance, the account management below is found on Instagram promises 100% weekly profit. Upon close interrogation, you will notice the comments section is disabled. Why is it disabled? ideally you want to prevent honest realistic feedback from the public.
Questionable investment services are a special kind of scam. Usually, you will see an ad on social media promising to exponentially grow your capital within a certain time. In addition to the ad, there is ‘evidence’ of individuals receiving large payouts. Automatically, your desire kicks in. Such services thrive in obscuring their true intentions under the guise of forex, crypto or other types of investment. I have seen many individuals ‘invest’ in such scams. There is no proof of actual investment or trading that takes place. The messages displayed on their social media pages have been fabricated and edited to elicit desire. Once your capital is committed, there is no recovery, thereafter it’s a series of ignored communication, reasons and excuses.
Lets check this example below,
The page conveys the information that within 7 hours, you will earn exponential profits. Let us go further and see what else is visible from this account.
Interestingly, the page also displays fake information. The letterhead from the Central Bank of Kenya lends credibility to this page. However, further investigations reveal that the Capital Markets Authority maintains a list of all licensed brokers in Kenya. Multivest LLC number 112 is not part of the list. Therefore, this would constitute fraudulent behaviour.
Below is the actual list from the Capital Markets Authority
Finally, we look at the logo which is a replica of a well-known prop firm; City traders Imperium. There idea is to use such logos to lend credibility to the scam.
There is a possibility a lot of individuals have fallen victim to this scam driven by the universal overwhelming desire to become wealthy in the shortest time possible.
Proprietary software (robots & indicators)
People tend to procure this ‘solution’ because it allows us to transfer our analytical and reasoning abilities to software that tells us when to act. Human beings tend to prefer the path of least resistance. We do not necessarily desire to submit to the process of learning, instead we desire shortcuts. Unfortunately, we do not know what information the software uses to make decisions or even how it works. We are not interested in asking such questions, if we asked such questions, we would be forced to learn how to trade which consumes time, and time that we do not intend to dedicate to the process of learning.
For instance, the Instagram page below advertises an indicator claiming you will earn 500$ daily. Note, the comments on this Instagram page are disabled.
For the sake of clarity, there are forex robots that do work. However, they are not affordable and accessible to low & middle-income traders. Such bots cost at least 5000$. Further, these bots require a well-capitalized account of at least the same amount as the purchase price.
Nothing comes to you by osmosis or desire. You must work for it. What you invest in, you become good at. Ceding control to our desires and thereafter to third parties leads to unhealthy exposure to risks and outcomes. Often it ends in disaster.
I am no exception to this weakness. Severally, I have let desires overrule my reasoning, the outcome of course is predictable. In response to the disastrous outcome, I forced myself to learn the art of forex trading.
If we all submitted to the process of learning, practicing, and improving our forex trading craft, we would be in control of the risk exposure and the accompanying outcomes thereby guaranteeing a higher chance of success.