On Trading Psychology
From BMT, courtesy from user : TennisOrDie
Last week I had the best trading week of my life. I finally dug myself out of the hole I created and was positive for the year.
Guess what happened this week?
Lost. It. All.
Did I lose it because my system failed me?
No
I lost it all because I was overconfident and careless. I thought I knew what I was doing now. I thought I could just go on cruise control and let the money print itself. Wrong, wrong, wrong.
There are a million different systems and most of them will generate a profit depending on the trader. It's not the system that makes a difference, it's the piece of meat in between your ears that's going to make a difference. Your mind is the cause and solution to all your problems.
The more I trade the more I realize the importance of psychology in trading. This is a game of who can make the most money and KEEP IT. Yes you'll lose money sometimes because your system was wrong. But most times you'll lose money because of overconfidence, lack of confidence, cashing out too early, cashing out too late, hope, fear, greed, lack of patience, overtrading, and revenge trading. These are problems you will face using any system. These are the demons you must conquer in your mind.
Are others better at trading because they're better looking, smarter, or rich? Nope. None of those things determine a consistent and profitable trader. The answers we seek are in our mind, not in indicators.
Take literally any sport for example. What usually happens when you're winning by a lot? You think to yourself "ok i'm winning so now I can relax." You become careless and the next thing you know, the game is tied.
In tennis you know when the most common time for a player to serve a double fault? Right after they served an ace.
In gambling you know when you're most likely to tilt? Right after a big win
It's all the same.
So if you want to become a better trader what do you have to do? GO OVER YOUR FREAKING TRADES FOR THE DAY. Look at what your tendencies are. Look at why you lost money. Look at why you made money. This is a game where you need to master yourself, so you need to look at YOUR results. This will give you a personalized journal of what you are doing wrong and what you are doing right. Don't look to others for the answers. Just look within.
Am I a profitable trader? Not yet, but with every trade I'm learning. I finally feel like I'm on the right path. I know that I can be a successful trader if I can successfully conquer myself. I am alone on this journey. No one can save me but myself. No one can change me but myself.
Lastly I want to state that everything is related to everything. Your problems in school will reflect your problems in trading. Your problems at work will reflect your problems in trading. Your problems with your spouse will reflect your problems in trading. Your problems with addiction to drugs, tv, porn, video games whatever will reflect in your trading. If you want to become a successful trader, the one and only thing you need to change is YOU.
I feel like I've been walking in circles these past few years. The same problems keep popping up into my life over and over again. I get clean from drugs, then I think oh everything is fine now so I can party a little bit. Wrong. I finally get over that girl so I think oh I guess i can be friends with her now. Wrong. It's just the same shit over and over again and I'm tired of it. I've found that the same thing is happening in my trading. There are a few mistakes that I make over and over and over again. If I can fix my issues in my personal life, I know I can fix my issues with trading.
I feel like I hit an invisible ceiling in both my life and my trading account. There's this mental barrier that causes me to fuck things up when things are going good. This is all in my mind.
Trading isn't just about trading. It's personal development. I doubt there are successful traders with huge glaring issues in their life. They've learned to control their lives and their emotions, and that is why they succeed.
I firmly believe this is what makes trading so difficult. You're not playing against anyone except yourself.
I lost money today and it had nothing to do with my system. My main issues are over trading, lack of patience, and overconfidence. These are problems that I know I have and I know I need to fix if I want to make it in this business.
So, why did you lose (or make) money today? (Don't tell me it's cause your system failed you, it's because you failed you)
Last week I had the best trading week of my life. I finally dug myself out of the hole I created and was positive for the year.
Guess what happened this week?
Lost. It. All.
Did I lose it because my system failed me?
No
I lost it all because I was overconfident and careless. I thought I knew what I was doing now. I thought I could just go on cruise control and let the money print itself. Wrong, wrong, wrong.
There are a million different systems and most of them will generate a profit depending on the trader. It's not the system that makes a difference, it's the piece of meat in between your ears that's going to make a difference. Your mind is the cause and solution to all your problems.
The more I trade the more I realize the importance of psychology in trading. This is a game of who can make the most money and KEEP IT. Yes you'll lose money sometimes because your system was wrong. But most times you'll lose money because of overconfidence, lack of confidence, cashing out too early, cashing out too late, hope, fear, greed, lack of patience, overtrading, and revenge trading. These are problems you will face using any system. These are the demons you must conquer in your mind.
Are others better at trading because they're better looking, smarter, or rich? Nope. None of those things determine a consistent and profitable trader. The answers we seek are in our mind, not in indicators.
Take literally any sport for example. What usually happens when you're winning by a lot? You think to yourself "ok i'm winning so now I can relax." You become careless and the next thing you know, the game is tied.
In tennis you know when the most common time for a player to serve a double fault? Right after they served an ace.
In gambling you know when you're most likely to tilt? Right after a big win
It's all the same.
So if you want to become a better trader what do you have to do? GO OVER YOUR FREAKING TRADES FOR THE DAY. Look at what your tendencies are. Look at why you lost money. Look at why you made money. This is a game where you need to master yourself, so you need to look at YOUR results. This will give you a personalized journal of what you are doing wrong and what you are doing right. Don't look to others for the answers. Just look within.
Am I a profitable trader? Not yet, but with every trade I'm learning. I finally feel like I'm on the right path. I know that I can be a successful trader if I can successfully conquer myself. I am alone on this journey. No one can save me but myself. No one can change me but myself.
Lastly I want to state that everything is related to everything. Your problems in school will reflect your problems in trading. Your problems at work will reflect your problems in trading. Your problems with your spouse will reflect your problems in trading. Your problems with addiction to drugs, tv, porn, video games whatever will reflect in your trading. If you want to become a successful trader, the one and only thing you need to change is YOU.
I feel like I've been walking in circles these past few years. The same problems keep popping up into my life over and over again. I get clean from drugs, then I think oh everything is fine now so I can party a little bit. Wrong. I finally get over that girl so I think oh I guess i can be friends with her now. Wrong. It's just the same shit over and over again and I'm tired of it. I've found that the same thing is happening in my trading. There are a few mistakes that I make over and over and over again. If I can fix my issues in my personal life, I know I can fix my issues with trading.
I feel like I hit an invisible ceiling in both my life and my trading account. There's this mental barrier that causes me to fuck things up when things are going good. This is all in my mind.
Trading isn't just about trading. It's personal development. I doubt there are successful traders with huge glaring issues in their life. They've learned to control their lives and their emotions, and that is why they succeed.
I firmly believe this is what makes trading so difficult. You're not playing against anyone except yourself.
I lost money today and it had nothing to do with my system. My main issues are over trading, lack of patience, and overconfidence. These are problems that I know I have and I know I need to fix if I want to make it in this business.
So, why did you lose (or make) money today? (Don't tell me it's cause your system failed you, it's because you failed you)
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