When I first began trading, the idea of trading psychology never even occurred to me. Because I thought I had a sound mind and would not succumb to the pitfalls of typical traders, I sifted through all of the information on the subject.
What is psychology?
Psychology, as defined by Wikipedia, is the study of human behavior and mental processes, including both conscious and unconscious processes.
Why would a trader care about this?
To put it another way, trading is a mental game. In order to find lasting solutions to the problems we face as traders, we must dive deep into the psychology of trading in order to gain a better understanding of the underlying issues.
It took me over five years of slogging it out and hitting rock bottom before I realized that my preconceived notions about success were completely incorrect.
At this point in my trading career and personal life, I had to reassess whether or not I wanted to continue with this trading obsession.
Find out quickly and cheaply that trading is not for everyone.
It didn’t take long to find the answer. Yes, I’d lost nearly everything I owned, if not all of it. Yes, I was able to adapt my tactics and rules to suit my needs. There seemed to be no hope at all. Yes…everything was working against me… While still saying yes, I decided to go ahead with the plan.
A few things in life require the kind of dedication and perseverance that comes only from doing something day in and day out for years on end, no matter how many setbacks or failures you experience along the way. One of those interests is well worth pursuing if you ever come across one.
Despite the countless losses, failures, and stupidity, I remained as determined as the day I began trading. Something like that was not something I could take for granted.
I embarked on a journey of healing and renewal of the mind once I decided to do this.
This was not, in my opinion, amusing at all. It’s possible to derive some bizarre pleasure from failure. However, no one sets out to fail, but if you look around your society, it appears that most people are content with a life of average quality.
Trading is purely a psychedelic experience. The apostle Paul urged Christians to undergo a spiritual transformation through the renewal of their minds.
Everything in our lives stems from our thoughts. In any endeavor, whether health, spiritual, financial, or emotional, your mind determines how far you go high or low.
The stimulus that prompts our actions is a direct result of our thoughts and perceptions. The way we perceive and interpret these stimuli is a direct result of how and what we learned about them, whether in school, our upbringing, or the people with whom we have personal relationships.
Although it’s a hard truth to accept, many people embark on this journey with the expectation that they will fail. That’s what the numbers show. WHY? Because we focus on the superficial aspects of trading.
Consciousness plays a large role in our daily lives. When we learn something new, we tend to forget about it for the rest of our lives. Invasion of the unconscious mind
In contrast to watching me learn to play the guitar, I am not thinking about which finger should press which key on the keyboard while writing this. Years of typing have instilled in me the ability to type without looking at the keyboard. The same is true for any other skill you have mastered, such as driving, cooking, walking, or playing an instrument.
There are times when I review my trading journal and find myself baffled by the decisions I made. Having to re/move your stoploss when you know and have told yourself that you should never do it never makes sense.
Despite the fact that you know that patience pays off, it’s a mystery as to why you keep jumping the rope and not waiting for the perfect entry or exit signal.
Your trading will be riddled with inconsistencies when you take a closer look.
WHY?
As a result of our minds playing pranks. Mostly because we never received the proper training – and by that I mean training in cultivating the mindset necessary to support our success – to begin with.
I did what every other trader does, which is to devise a system and a strategy that I was confident would give me an advantage in the market. That, however, did not alter my tendency to lose.
As a newbie or a veteran trader who has struggled for a long time, I’ll bet that the root of the problem is in your mind, your psych.
In order to achieve long-term profitability, you will need to thoroughly clean and rewire your mental processes.
And that’s what we’re here for: to assist each trader in becoming their own best teacher.
No, I cannot overstate the importance of trading systems or strategies or rules. What I know from experience is that when you sit behind a screen and have money on the line, all of that goes flying out. No need to take my word for it; check your trading journal from when you first started or ask around.
Even if you aren’t an expert trader, you can still put in a winning trade because every trade has a 50/50 chance of being a winner or a loser. However, you will never be an expert trader who consistently makes money if you don’t learn the psychology of trading.
As you can see, trading is more a mental game than a game of strategy, plans, or the holy grail.
I sincerely hope I’ve piqued your curiosity enough to motivate you to invest the time and energy necessary to gain the success you seek by better understanding your own mental processes.
What’s next?
I, along with a small group of others, will be creating and disseminating resources and tools that we use to better our minds in order to achieve our goals.
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