Bitter Truth about Trading

By | September 12, 2014

As a Trader it totally amazes me to see how we are almost “hard-wired” to do all the wrong things. It’s almost as if we were put on this planet to determine how many ways we can mess up our trading.

How do you respond to a loss? How you respond to losing trade.
During my trading session I ask my students to sit down and write  on, “Why I lose money in trading, Why I fail as a trader “ Be honest with yourself. What are your typical excuses?

You might write something like this:

“I was desperate. I was running out of money, and I needed to do something. I really didn’t want to go back to work, so I had to make money. As a result, I really didn’t have time to do a trading plan Instead, I just made trades.”

For the 30 minutes that it takes to do “Why I lose money in trading, Why I fail as a trader ” exercise, give yourself a break and be brutally honest. You know that you’ll con yourself in order to not make any progress. Treat this exercise as a test to determine just how you con yourself. Can you be honest and tell it like it is, or is it more important to justify the excuses and be a failure?

So go ahead. Take 30-60 minutes right now and start writing down your excuses about your trading.

Do the exercise even before continuing reading this article! It’s that important.

So What Did You Write?

If you were honest with yourself, you justified your limitations. You’ve probably created a record that includes many of the major thoughts and beliefs that you use to undermine virtually every endeavor that you create. Furthermore, the more honest you’ve been with yourself, the more valuable this exercise will be for you.

What might some of those excuses and justifications look like?

Here’s a list of possible excuses:

  • I just haven’t had the time that I need to trade better.
  • I have had too many distractions, and I cannot focus.
  • The market has not been acting like I expected.
  • I know I need to study trading psychology, but I just can’t seem to find the time.

 

You make excuses simply so that you can be right. You are basically saying that you like your excuse beliefs because they are right.  Do remember Excuses don’t make you happy.  Excuses don’t make you successful. Excuses, however, do allow you to be right and if that’s so important to you, so be it.

If your trading isn’t going the way you want it to, change what you are doing, As per Behavioral studies if something doesn’t work, do something else. Almost anything else will get you different results.

Maybe you need to change something about your trading system (your exits or your position sizing strategy).

Trading is a process. There is no success or failure—only Profit and Loss. You’ve been getting P/L statement about what you’ve been doing for a long time. How have you been responding to it so far?  Have you been making up a lot of excuses?  Are you more interested in being right than making progress toward your goals?  Are you willing to change now? It’s never too late. You’re never too old.

Just imagine that you are responsible for everything that has happened to you up to now in your trading. That’s part of “responsibility” that I’ve talked and written about so many times. And when you finally decide that you are responsible for your own life—for what has happened in the past—you will find that you get an immense rush of freedom.

You can decide right now what you want, and you are in charge of making it happen.  Today is always the first day of the rest of your life, so begin now.

6 thoughts on “Bitter Truth about Trading

  1. Bramesh Post author

    Thanks Vipul for your straight forward Confession.

    Knowing symptoms are working on it will only lead way to success..

    Rgds,
    Bramesh

  2. Vipul

    My Mistakes :

    1.Most of the times I traded without any system which had given me losses.
    2. I traded on impulse which had given me losses.
    3. I wanted to make some quick bucks, therfore I traded as a jobber and one losing trade took all the profits of 10 small profitable trades.
    4. I always had a self imposed pressure to settle in Pune , therefore meeded money and that is why took trades which had given me losses.

    5. Never traded on my learned system alone.
    6. Ticker came on CNBC and here I am in action .

    7. Taking small profits from the trade and let the losers run on hope.

    8. Not there on terminal for the whole day when my trade is ON.

    9. Just heard about some script on FACEBOOK through XYZ and here I put same on my terminal and trying to make a trading opportunity out of it.

    10. On days when my trades can be profitable, I was not their trading.

    11. I traded first and then look into charts to justify my actions which were always wrong.

    12. Never ‘made’ a plan for the next day. When made, never ‘rehearsed’ it in the mind for either being successful or how will I respond when SL will hit. When rehearsed, never ‘acted’ upon them on live trading day.

    13. But the main factor which I think made me unsuccessful in trading is my full time day job in an MNC a high paying job which always distracted me from doing and concentrating on trading.

    Everything said and done, I think biggest factor in my success in other fields und being unsuccessful in trading was ME MYSELF and nobody else.

    I am learning.

  3. SP Iyengar

    Good advice.. trading is a process..it cannot be developed by simply buying and selling waiting for a gain.. you have to work hard.. devise your own strategy..as you rightly said change now.. instead of saying that you are right begin to change and make progress.. positive advice.. I am impressed with your analysis and blogs..Good work..God bless you to continue the service..

  4. Nikhil

    Most of the time , trading is never a loss when you have patience and ofcourse the financial stand required for that very patience.
    If you are a trader who invests the money that is from his savings , then it’s okay to have patience and wait for things to turn positive. And you can always convert the loss if you analyse!
    Nice write up. 🙂

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