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Scott Phillips: The Dumbening


The deadliest of all trading sins is bias. Not only will it wreck your account, but it generally makes a fool of you in the process.

Let me explain.

Today I was speaking with my friend Massi, who is a true expert system trader using the Scalpius system, a daily mean reversion system for Futures and FX.

The crux of Massi’s system is that it’s about 80% mechanical and 20% discretion. He follows a lot of markets and cherry picks the best setups. His exits are mostly mechanical, but he juices it up by giving himself the freedom to jump early from trades he thinks will end up being stopped out.

Great strategy, suits him perfectly.

And he’s killing it. Last time I checked he was hovering a bit above .35 expectancy.

Anyway, he asked me about my opinion on a mean reversion trade on Gold today. This setup, actually, a Retest Variation Sell (if you have the Price Action Masterclass)



Now, if you’ve been reading my emails you would know that I have a long Gold trade on right now with a fair bit of open profit. I’m trailing a stop at monthly candle lows.

So immediately I started out with reasons why this was a crappy trade to take.

“You don’t want to take a short on Gold right now, no Sireee”

But I’m an idiot. This is a perfectly reasonable short trade for a scalp, and my brain had just turned to mashed potato.

I had to tell him that I can’t trust my own opinion, that I’m biased.

Here’s how it works. The very second you enter a trade something I call “the Dumbening” happens.



You start to want that trade to work.

Which means you become emotionally invested in it. And that means you will experience emotional pain if it doesn’t.

Your brain doesn’t want that. You see, your brain has trouble differentiating between the physical pain of touching the stove… or the emotional pain of a losing trade.

You brain really wants to help. But once you are in a trade it’s too late. The Dumbening has already happened.

Your brain has a total priority of helping you avoid pain. It will absolutely hijack your reality and make you believe your sh*tty trade is still good. Or that a setup is one you don’t want to take.

You will ignore contrary evidence. You will make up plausible sounding reasons which are all crap.

It happens to me just like everyone else. It’s important for me not to pretend like I’m some kind of guru who never gets things wrong.

Thank you for reading.


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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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