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.