||HERE'S WHY YOU ARE FAILING IN TRADING (EXPLANATION)
If your reading this your one of 3 people , you have been trading for more than 1-3 years without any success whatsoever that you can be proud of ,you are just in your beginning phase and you just can't understand why you can't get the hang of it(trading) yet you had a few good months in the start , you are unknowingly addicted to the idea of yourself being this top trader but keep making the same mistakes and are wondering whether you made the right choice joining trading to begin with!. Well to you, all are in luck because pretty much everyone in the industry has lived or come close to those same ideas and thoughts ,asked those same questions over and over until you come to a certain realisation which am going to relay down below .
How does it start ? (the losing consistently) you might wonder;
well when the analysis and trades you takes aren’t rewarded 100% of the time, nor do they cause a negative outcome 100% of the time, this keeps you trying: You the trader realise that you have a chance of profitability anywhere between 0% and 100% to win. In your mind, a loss or a string of losses are just part of the process and you need to keep going to eventually win. You expect to be rewarded some of the time, and this expectation motivates you to keep trading.
And to make things more interesting you overestimate the probability that something will happen because your mind can produce immediate examples of when it did happen(I know you recall your last winning trade you took how nice it felt) It might even be because you can recall a time when you had a lucky string of wins yourself. Thus, you think your chances of winning are larger than they actually are.
As a trader you commonly think that the chances of winning increase with each loss, but this is completely untrue(learn from the loses they say).
The chance of winning neither ‘increases’ nor ‘decreases’ when trading. Chance does not work by shuffling through a pre-determined number of losses or wins. Each trade is a new, isolated event and has the exact same chance of winning or losing as the previous one.
Think of it like flipping a coin. If it comes up with tails 7 times in a row, that doesn’t suddenly make the chance of getting heads higher than 50%. Each new flip is always 50%. Our brains just try to rationalise the unlikeliness of getting 7 tails in a row by saying it’ll ‘balance’ out with a heads next.
Chance has no methodology, but traders often think it does. We believe that our next trade is ‘due’ to be good because all our previous ones have been so lousy or that the pair/stock/metal we’re trading on is ‘due’ to pay out, and this flawed mentality urges us to keep trading.
Many traders also falsely believe that they have some influence over markets. This might be reinforced depending on the type of strategy we’re trading – one where there is some level of control due to choices , but in the markets primarily the driving force is whether someone wins or loses
we want to feel in control – it’s within our nature – so the frustration of how unpredictable trading is can lead to a person convincing themselves that they can gain some control over it. (am sure you felt like you had some control, who hasn't ).
We as traders are also more sensitive to losses than gains of equal value. For example, losing a 100$ to the markets generates a more prominent emotional reaction than finding 100$ in your wallet. This is why many traders endlessly invest time and money to try ‘win’ back previous losses or alleviate the feeling of disappointment or frustration by gaining a win. At this point, winning becomes less about excitement and more about ‘making up’ for losses, so we get stuck in a vicious cycle.
These psychological factors, combined with genetic predispositions, mean a trader can very easily fall down a slippery slope leading to failing in trading.
Some times you can have trades running in positive but fail to close them and come back finding them in negative then you decide to close them, reluctancy to make emotionless decisions to cut trades when in profit but rather in negative has something to do with how you react to handling risk in your mind and you need to fix the gap, Gap( is you thinking that any increment you get in an environment of pure risk isn't worth but then react when it goes against you.)
It also makes it incredibly difficult for a trader to know when they have a problem. Failing at trading is often accompanied with denial and an unrealistic views of things.fortunately there's lots of information out there to help you set yourself on the right journey but it ends with you asking yourself this question!
ARE YOU PROFITABLE (REALLY PROFITABLE) OR ARE YOU IN DENIAL AND LYING TO YOURSELF?
if the answer is (NO!)
You can do the following;
-weekly trade reviews
-strategy reviews
-risk management review
-money psychological review
among other things
leave a comment if you have experienced any of these situations in your trading and how you overcame them to help everyone better there trading
thank you ps-dabag.
How does it start ? (the losing consistently) you might wonder;
well when the analysis and trades you takes aren’t rewarded 100% of the time, nor do they cause a negative outcome 100% of the time, this keeps you trying: You the trader realise that you have a chance of profitability anywhere between 0% and 100% to win. In your mind, a loss or a string of losses are just part of the process and you need to keep going to eventually win. You expect to be rewarded some of the time, and this expectation motivates you to keep trading.
And to make things more interesting you overestimate the probability that something will happen because your mind can produce immediate examples of when it did happen(I know you recall your last winning trade you took how nice it felt) It might even be because you can recall a time when you had a lucky string of wins yourself. Thus, you think your chances of winning are larger than they actually are.
As a trader you commonly think that the chances of winning increase with each loss, but this is completely untrue(learn from the loses they say).
The chance of winning neither ‘increases’ nor ‘decreases’ when trading. Chance does not work by shuffling through a pre-determined number of losses or wins. Each trade is a new, isolated event and has the exact same chance of winning or losing as the previous one.
Think of it like flipping a coin. If it comes up with tails 7 times in a row, that doesn’t suddenly make the chance of getting heads higher than 50%. Each new flip is always 50%. Our brains just try to rationalise the unlikeliness of getting 7 tails in a row by saying it’ll ‘balance’ out with a heads next.
Chance has no methodology, but traders often think it does. We believe that our next trade is ‘due’ to be good because all our previous ones have been so lousy or that the pair/stock/metal we’re trading on is ‘due’ to pay out, and this flawed mentality urges us to keep trading.
Many traders also falsely believe that they have some influence over markets. This might be reinforced depending on the type of strategy we’re trading – one where there is some level of control due to choices , but in the markets primarily the driving force is whether someone wins or loses
we want to feel in control – it’s within our nature – so the frustration of how unpredictable trading is can lead to a person convincing themselves that they can gain some control over it. (am sure you felt like you had some control, who hasn't ).
We as traders are also more sensitive to losses than gains of equal value. For example, losing a 100$ to the markets generates a more prominent emotional reaction than finding 100$ in your wallet. This is why many traders endlessly invest time and money to try ‘win’ back previous losses or alleviate the feeling of disappointment or frustration by gaining a win. At this point, winning becomes less about excitement and more about ‘making up’ for losses, so we get stuck in a vicious cycle.
These psychological factors, combined with genetic predispositions, mean a trader can very easily fall down a slippery slope leading to failing in trading.
Some times you can have trades running in positive but fail to close them and come back finding them in negative then you decide to close them, reluctancy to make emotionless decisions to cut trades when in profit but rather in negative has something to do with how you react to handling risk in your mind and you need to fix the gap, Gap( is you thinking that any increment you get in an environment of pure risk isn't worth but then react when it goes against you.)
It also makes it incredibly difficult for a trader to know when they have a problem. Failing at trading is often accompanied with denial and an unrealistic views of things.fortunately there's lots of information out there to help you set yourself on the right journey but it ends with you asking yourself this question!
ARE YOU PROFITABLE (REALLY PROFITABLE) OR ARE YOU IN DENIAL AND LYING TO YOURSELF?
if the answer is (NO!)
You can do the following;
-weekly trade reviews
-strategy reviews
-risk management review
-money psychological review
among other things
leave a comment if you have experienced any of these situations in your trading and how you overcame them to help everyone better there trading
thank you ps-dabag.
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