I have always liked to tell everyone that the markets are pretty much like a mirror… reflecting back to us our inner states of being and our habitual pattern of behavior. All of your character traits will be manifested in your trading.
If you are impulsive and lack patience, it will manifest in your trading as premature entries, exits, and trades based on so called *gut feeling*. If you are lazy and tend to procrastinate in your everyday living, it will manifest in the form of being lazy and not adjusting stops properly, not keeping your analysis and charts up to date, and so forth. If you lack discipline and patience in your life, it will manifest in your trading as an inability to follow a method or trading plan, and the tendency to get quickly frustrated.
If you are not an organized person, living with a lot of clutter in your daily life, it can manifest as not being organized in your trading, losing fill reports, charts, analysis, etc.
So, IMHO, an important part to becoming a successful trader is identifying the negative habitual patterns of behavior that effect us, and taking steps to replace them with positive behavior patterns. It is imperative that we cultivate positive character traits to allow us to become better traders. By not facing our *inner demons*, it becomes very hard to learn to be independent, confident, patient, disciplined and positive.
Trading is a business with many rocky roads. Adversity, frustration, mistakes, and hard times cannot be avoided. To trade successfully over the long term requires the ability to be persistent, and overcome obstacles. A common misconception is that trading is *easy money*. Just follow a few chart formations and you got it made.
Nothing can be further from the truth.
Trading requires hard work, discipline, persistence, preserverence, a high level of confidence and motivation. The ability to be true to yourself and acknowledge your shortcomings is very important. Only then can you take the steps to cultivate the character traits that are so important to success.
It is the nature of man to avoid change and resist pain. Yet these very traits will lead to disaster in trading. Pain, in the form of losses, confusion, stress, etc… is our constant companion. It takes a special kind of courage and humility to identify and recognize your faults… and take on the challenge of improving yourself.
Everytime a trade is taken, you are betting against battle hardened pros. Traders that have a large capital base, experience, etc. These are specialists – traders that work 50 to 60 hours a week on their trading, traders that live and breathe the markets. They have overcome their fears, cultivated a winners attitude, and are relentless in their pursuit and excellence and profits.
The average retail trader, however, only trades on a part time basis, has limited capital, limited funds, and limited experience.
How can one compete with the pros?
By trading on your own terms. Take the time to learn and research this field. Learn a method or system to identify low risk, high probability trades. Cultivate patience and discipline… and develop a high level of confidence… so that you can trade on YOUR terms.
Remain focused and patient. Stay organized and be well prepared. Take the time to learn your craft and mentally prepare yourself. For trading is an endless battle against yourself.
For continuation, see part eight of this rather long original article.