| If you want to be a successful trader, you | | | | allowed your ego to get the best of you and |
| must make sure you do not deny reality in any | | | | you are no longer humble. I've named just a |
| phase of your trading. You cannot deny | | | | couple here. I challenge you to think about |
| losses, price direction, mistakes you make, | | | | the many things that can distract you from |
| being undercapitalized, or a whole host of | | | | seeing when market conditions have changed. |
| things you would rather not think about. | | | | Make a list of those things and confront |
| | | | them. |
| Many traders think the best way to deal with | | | | |
| unpleasant ideas, events, or personal | | | | The second aspect of the problem stems from |
| character flaws is to shut their eyes and | | | | inconsistency. Here again, you should make a |
| pretend they don't exist. | | | | list of those things that cause you to be |
| | | | inconsistent. |
| Let's face it, trading can be difficult, at | | | | |
| times very difficult and it's essential that | | | | "Perhaps I was a good trader at one time, but |
| you focus on reality. Denial takes your focus | | | | the market conditions have changed and I may |
| away from the very thing you need to be | | | | not be able to keep my reputation up." This |
| concentrating on-the action of | | | | is an issue that all traders face at some |
| prices-regardless of time frame. Your mind | | | | point: keeping up their reputation. When one |
| must be clear so that you can look at the | | | | makes big profits trading, it's tempting to |
| market and see what is really there. | | | | tell neighbors and friends how well you are |
| | | | doing. It's great when you're making the big |
| The way I learned to handle denial was to | | | | profits, but keeping up appearances is often |
| simply write down and confront all possible | | | | the downfall of even the most astute trader. |
| ideas I had trouble accepting. Some thoughts | | | | Again, denying your need for fame and glory, |
| I could fix and others I just had to accept. | | | | or pretending that you can maintain an |
| But facing the truth of what and who you are | | | | unrealistic reputation, will use up your |
| is the only way to deal with denial. You | | | | psychological energy and interfere with your |
| have to realize that for the most part the | | | | ability to concentrate. Huge profits tend to |
| only things you can change are in yourself. | | | | go to the humble, so try not to build up your |
| Other things you just have to accept. You | | | | reputation. Admit that you will have |
| have to accept the reality of slippage, for | | | | difficulty keeping up appearances and just |
| example. You have to realize that indicators | | | | quit doing it. |
| often give false signals and that there is no | | | | |
| magic moving average nor is there a magical | | | | One fact that traders wrestle with |
| oscillator. | | | | continuously is the notion that, "Trading is |
| | | | not a legitimate job." |
| You have to realize that some winning trades | | | | |
| are just lucky trades and had nothing to do | | | | Many traders struggle with the legitimacy of |
| with your skill as a trader. By the same | | | | trading. Some traders find that they can |
| token, you will also experience the bad luck | | | | simply remind themselves, "Trading provides |
| of having prices make a sudden and unexpected | | | | liquidity and helps control prices." Other |
| move against you. | | | | traders, however, think this isn't good |
| | | | enough and need to find more meaning in their |
| Rather than wasting your time in denial, | | | | daily trading activities. For example, they |
| concentrate your mental energies on improving | | | | may focus on how trading helps them provide |
| yourself and improving your trading skills. | | | | for their family, or may plan to donate some |
| Work at improving your abilities to observe. | | | | of their profits to charities they view as |
| Realize that you have to survive the markets | | | | personallyvaluable. The point is, don't deny |
| in order to benefit from the experience of | | | | the possible truth to such ideas. You will be |
| the markets. | | | | better off acknowledging and working through |
| | | | them, and then just moving on. Denying they |
| There is really only one true problem with | | | | exist, on the other hand, will use up time |
| your trading-that problem is you! However, | | | | and energy. |
| the problem manifests in two ways: 1. Market | | | | |
| conditions have changed and you haven't. 2. | | | | Unacceptable beliefs tend to lie in the back |
| You are no longer doing what you did when you | | | | of your mind. They remain there, lurking, and |
| were winning. You have drifted. You are not | | | | when you are vulnerable, they can powerfully |
| consistent. | | | | influence your outlook. So acknowledge |
| | | | unacceptable ideas, and once you admit the |
| The first aspect of the problem is due to | | | | possible validity of such ideas, you will |
| poor observation. The market has changed and | | | | neutralize their potential influence. This |
| you haven't changed with it. Poor | | | | will free up limited psychological resources, |
| observation stems from a variety of lesser | | | | allowing you to focus all your energy on |
| but very important problems. You have | | | | trading profitably and consistently. |
| married a market, or a trade. You may have | | | | |