In life, we are each ultimately responsible for our own actions. The markets are no different. We are responsible for our own success and / or failure and the degree to which we are successful.
Winning at a career in trading is no different. To ensure a profitable future, one must be proactive. Preventing failure is an important part of that process. If you find yourself saying:
...or any number of negative mental messages, you are heading down the path that leads to failure.
Having been a successful business consultant and having traded for many many years, I have found several recurring characteristics and traits of people who thought they would hit a home run but who struck out in their attempt. Many of them stood with their bats on their shoulders, failing to swing at the ball as it passed them by for a called third strike.
How many of these actions or beliefs apply to you?
Failure has five degrees. What degree describes you?
I am not one to dwell on negatives, and this article certainly describes many negatives, but I felt it was the best way to deliver my message, or wake-up call, to every aspiring trader. If you are weak in any of these 19 areas, it is urgent that you make a change as soon as possible.
Each one of these weaknesses is like an unnatural cancer -- mostly self-inflicted due to bad habits and neglect, easy to uncover, hard to cure -- but not impossible. It takes outside help and regular treatments to maintain your trading health.
'Failure is an event, not a person.' Zig Ziglar
Winning at a career in trading is no different. To ensure a profitable future, one must be proactive. Preventing failure is an important part of that process. If you find yourself saying:
" I'm just not cut out for trading."
"I'm not disciplined enough."
" I hate staring at the computer all day and not doing anything."
" I see the trade; I just cannot pull the trigger."
" I cannot believe I got out of that trade so early."
" I cannot believe I am still in this losing trade."
" I had a hunch."
" It feels as though I'm fighting just to get nowhere."
" I cannot take another loss?"
...or any number of negative mental messages, you are heading down the path that leads to failure.
Having been a successful business consultant and having traded for many many years, I have found several recurring characteristics and traits of people who thought they would hit a home run but who struck out in their attempt. Many of them stood with their bats on their shoulders, failing to swing at the ball as it passed them by for a called third strike.
How many of these actions or beliefs apply to you?
| What You're Thinking | Strive to think | |
| 1 | You do not believe in yourself. | If you do not think you can do it, how can you build the confidence you need to do battle with seasoned traders? |
| 2 | You do not trust in your ability. | If you do not have the proper education, how can you honestly think you can compete in the world's largest playground, which is ruled by the two most powerful emotions: Fear and Greed. Lack of conviction manifests itself in many ways in this business (for example early exits or entries). |
| 3 | You fail to treat trading as if it were a business. | If you do not start thinking of this as a business and filling in your areas of weakness with solid reason and education, how can you achieve any level of success? You may hit a streak, but dumb luck runs out and then what? |
| 4 | You fail to plan. | Failure to define and achieve specific short-, medium- and long-term goals is a recipe for failure. |
| 5 | You are just lazy. | Your self-motivation and continued education are the lifeblood of your business. You must be eager to learn at all times regardless of past experiences or level of current knowledge. |
| 6 | You fail to equip your business properly. | You must have the proper tools. Do you think a doctor would perform surgery with a shank instead of a scalpel? How does a carpenter build without a saw or hammer? You get the idea. Use a reliable data and charting provider; get high-speed Internet access, and so forth. |
| 7 | You fail to understand how to accept a loss. | The markets do not know you. You do not exist to them in any other form than as the other side of a transaction. They do not care if it is your last dime, and your kids will not have shoes, and on, and on. We need losers to make money in this zero-minus-sum game, but taking an acceptable risk-reward ratio position and being wrong is not losing. |
| 8 | You fail to control your emotions. | Whether you win or lose, you should strive to remain at a comfortable emotional state while trading. Building the proper business plan for trading is enormously helpful in getting you to do just that. |
| 9 | You fail to learn and execute the fundamentals of trading. | Read, listen to CDs, attend seminars, read the Trade2win forums daily and practice your newfound knowledge. Everything you seek to know about trading has already been written or spoken about by successful traders. Try to learn something everyday. |
| 10 | You cannot cope with change. | There are three paradigms your mind should be a slave to: Patience, discipline and money management. The markets change everyday, and it is these three skills that allow us to be rigid and flexible at the same time in order to take consistent profits. Fight it and fail. |
| 11 | You cannot follow rules. | Losing traders often think that the rules of trading are made for others. Think that they are not for you? Think again. Fight them and you will have a very short trading career. |
| 12 | You are too greedy. | Thinking about trading profits instead of how you could better execute your plan is an obvious sign of greed. |
| 13 | You fail to do what you know. | Many people know what to do; yet very few people are able to do what they know. It is the rules of trading that force one to take action. |
| 14 | You fail to understand that hard work makes luck. | Some people think good traders are just lucky. Quite the contrary. They are studious, knowledge-seeking people who understand the paradigms they need to operate by. Take a close look at the traders you see as successful, and you will find years of education and hard work that created that "luck." You can be just as "lucky." |
| 15 | You blame others when the full responsibility is yours. | Accepting responsibility is the fulcrum point for succeeding in anything, especially trading. Doing something about it is the criterion. Execution is the reward, not the money. Money is the by-product of executing to plan. Do not blame the broker for a bad fill, when it was you who hesitated. This is just one example, but we are all aware of many others. |
| 16 | Your lack of persistence. | Be willing to take a stop loss at a particular price and time and just accept it without a fight. Be equally able to jump right back in at the same spot if the chart patterns and price action dictate that it is prudent. Or, even reverse your position if that is the prudent course to take. If your plan is drafted properly, you can be successful over time, but only if you are still around to be in business. |
| 17 | You fail to follow the first law of learning. | The first law of learning is repetition. Write it down and study it several times a day. Commit it to memory. Execute your plan. |
| 18 | You fail to establish and maintain a positive attitude. | This one is self-explanatory. |
| 19 | Yes, that's right; this is the 19th reason for failure: BTNA (Big Talk No Action). | Many "traders" are not honest with themselves regarding the actual results of their trading; therefore, it is impossible to build the level of trust in themselves needed to act in the proper manner as situations arise. For example they put on a trade and then change their stop loss, or, even worse, they don't place a stop order. This is a self-defeating cycle that is hard to break. However, if you are honest with yourself, you have a shot at improvement. |
Failure has five degrees. What degree describes you?
- Failing to do your best
- Failing to learn
- Failing to accept responsibility
- Failing to execute to plan, or, even worse, failing to plan
- Failing to have a positive attitude
I am not one to dwell on negatives, and this article certainly describes many negatives, but I felt it was the best way to deliver my message, or wake-up call, to every aspiring trader. If you are weak in any of these 19 areas, it is urgent that you make a change as soon as possible.
Each one of these weaknesses is like an unnatural cancer -- mostly self-inflicted due to bad habits and neglect, easy to uncover, hard to cure -- but not impossible. It takes outside help and regular treatments to maintain your trading health.
'Failure is an event, not a person.' Zig Ziglar
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