Trading success: dependent on psychology?

[HannesJoubert]

Hi there All.

More esoteric questions

As some of you may be aware, I have been struggling with my trading for a few years now, and have recently contemplated on giving up, and the kind members here have convinced me to rather continue...my eternal thanks to them.

Now...

The above has given me pause to take stock and look at the what, why, when and where of my failures and there seems to be a silver thread that runs through my trading journey and indeed my whole life.

I *think* I have identified self defeatism or self sabotage if you will, as a possible major contributor to my trading failure (and other failures in other aspects of my life that I will not bore you with.)b

In the opinion of the members of this forum, does this sound likely, has anybody else had problems with this type of psychology? If so, how did you overcome it?

I have done the requisite Google search and the approach that makes the most sense in combating and ultimately triumphing over this defeatism seems to be positive affirmations and a positive disposition in general (also attained by positive affirmations).

I would like to get as much info as possible and to make work of this situation so that I can get back on track.

Thought, suggestions? Please?

Thanks

H

:hi:

[Over60]

Hi Hannes,

Try the simple method of “Mean Reversion” and stay patience.
Trust it, it works in every timeframe.

Buy cheap and sell expensive and vice versa.
That’s the law of trading.

It is not a question of psychology or whatever.

Trade well my friend
Over60

[HannesJoubert]

Thanks for the replies guys, much appreciated.

I am taking a break from trading for a while whilst I work on my psychological aspects, making use of the positive affirmations above...my confidence is shot, so this would be a good idea in any event...

I must admit that it is not the first time that I have heard that Forex (and indeed most endeavors in life) are mostly governed by your state of mind, so I will pay attention to that for a while, but will still be around using that time to also save up a bit to continue my trading journey.

This thread may eventually evolve into a trading journal once I have sorted myself out, who knows...

Stay well

H

:hi:

[Jemook]

During my time at Global Prime I've met and gotten to know all types of traders - the ones that make consistent money have the following attributes:

• - Don't need / use high leverage
  - Extremely nice personal demeanour which probably reflects their calm approach to trading
  - Have larger account sizes - IMO due to testing on smaller accounts and only moving up as they found something that works. If you have a small account balance losing $500 might not hurt as much as having a $50,000 balance - the stakes are higher so those traders are more careful.
  - Understand all aspects of trading, especially how their trades are being executed
  - Small balance fluctuations, cut losses quickly rather then let open drawdown become unmanageable

I think you need to treat trading as a hobby rather than a source of income. If you find something that works keep it going on demo and then look to open a small live account. If you can keep that account profitable for a year and you find that you aren't stressed out with your trading style then it's time to grow the account and you can look to profit properly off your trading.

If trading is stressful / highly strung for you then you should focus on doing something else that's enjoyable to you. Unless you can find that inner stillness where your trigger finger does not exist anymore I don't think you can be a profitable trader.

A winning strategy cannot be profitable when traded by someone who allows trading to effect them emotionally.

An emotionally balanced person without a winning strategy also cannot be profitable.

You need both aspects. Meditation is a great way to relax your brain - if you meditate for 20 minutes before your trading session you'll be more relaxed and focussed. Read some Eckhart Tolle - I really like his way of thinking.

Cheers,
Jem

[Pedigree]

........ Meditation is a great way to relax your brain - if you meditate for 20 minutes before your trading session you'll be more relaxed and focussed. Read some Eckhart Tolle - I really like his way of thinking.

Cheers,
Jem

I concur. I recall distinctly Eckhart saying in one of his sessions:

"What's in the way IS the way"

meaning that the issues in your life that you presently view as unpleasant and distasteful are just the ones you need to get to a better place.

You cannot separate your Self from anything you do - and trading is not an exception. If I were to hand you a system to trade today and left you by yourself, by the time I returned in a few months, I probably will not recognize it as what I gave you anymore. You would have moulded it to suit your personality and style, that is if you have not migrated to some other entirely different system.

On several occasions in the past, I have come across some new element of trading that fascinated me much and seemed very promising. I would get so engrossed with it that I would forget the salient parts of what I used to do before it came along. And always, I would reach a dead end and have to ask "Now, what's wrong?" Only on looking things over again do I always realize that I have abandoned all that I had previously identified as right - right for me. It wasn't by any means perfect (probably will never be) but it certainly was the foundation - my foundation - for whatever else is to come. I had to finally come to realize that the way I trade now is essentially me. It is an integral part of my personality. Anything new and worthwhile that comes along must compliment, not replace it.

I agree again with you, Jem, on the issue of treating trading as a hobby from the stand-point that it must be fun for you. If it isn't fun but simply something you want to make a living from, it must be one hell of a preoccupation. Ironically, it is only if it is fun for you that you can get to make a living off of it!

And Hannes, whilst you are out on your sabbatical and taking time off to weigh things over, just remember one thing:

There is NOTHING that you really want that you can't get. The irony of it is that you cannot REALLY want anything that is not meant for you.... (now, that may need some mauling over..!!!). But the point is this: failure in anything you really want does not mean it is not for you. Take a good look at any one who has really succeeded at anything. THEY LITERALLY FAILED THEIR WAY TO SUCCESS. Hannes, if trading is where your heart lies, don't ever give up on it because you are not yet succeeding.

I think I was at the point you are now over a year ago. I had identified trading as what I wanted and was going to do, yet I was blowing account after account. I really was at the point of signing off with the notion that maybe it just was not possible to build up the kind of figures I had as my target. Then CJ came on the scene. That guy did something I had never seen anybody else do - he published the trades and figures of his LIVE account, and boy, how they resembled the figures I had been dreaming of!!! For me, it was like a shot in the arm! Remember the 4-minute mile? Everybody thought it was impossible until Bannister came along and did it in 1954. But what is more significant is that within a year or so of his achievement, not one, but several others did it also.

So, take a break Hannes, if you need it, but hang in there and you'll see that all that you need will come your way somehow, some time.

I really must apologize for this rant, if anyone has been able to read this far. I saw this thread today and it coincided with much of what I'd been turning over in my mind lately. I couldn't hold it back from spilling!!! Maybe some bit of it will be of use to someone.

All the best.

[HannesJoubert]

Thanks for the replies, Jem, Pedigree.

Your replies do confirm my assertion that trading is indeed +90% in the mind

Lot's of food for thought in those two posts...

If I may reply to Pedigree regarding if trading is for me or not, given my history with projects, just the fact that I have doggedly held onto Forex is amazing and thus a confirmation (to me at least) that it is indeed for me...

That being said, the best thing I can do right now is sort out my head.

If you can remember, in my first post I mentioned self sabotage as the probable reason for my failure to date, turns out that procrastination is the biggest flag for that...and do you think that I have actually started with the affirmations yet? So, in my case, self sabotage is probably my biggest problem...But I will push through that and come back stronger.

Being type A personality sucks, but hey, at least I have a personality. Just changing it after 40 years of habits will be a battle, but not one that cannot be won.

Cheers

H :hi:

[macman]

As some of you probably know, I set up a paid for forex training course a while back, and one of the most fascinating things to see is the huge differences in psychological temperament each student brings along with them.

Indeed, Jem, Pedigree and many other posters are absolutely right about the importance of psychology; in my experience trading is 90% psychology.

I have seen both fear of winning and fear of losing as well as a host of other situations making successful trading extremely hard.

Is there anything practical that you can do?
It is great to read about how others worked, like the thousands of stories about George Soros for example, but many students just find that so far away from their own reality that it often does not help that much.

A successful trader needs to be balanced across many different areas and almost nobody is 'naturally' balanced.
As one of my starting points I get students to fill in a simple SWOT analysis which is basically a list under the headings (S)trengths (W)eaknesses (O)pportunities (T)hreats - the first step into really looking at your own situation.
Quite often something which a student has listed as a (S)trength may IMHO actually be a (W)eakness and often large areas are just not addressed at all.

There are ways to combat most psychological barriers, but not many to combat chronic shortage of time.

One of the hardest concepts for most students to accept is that losing money is NOT a 'failure'. In our western cultures we are constantly bombarded from birth with messages about 'losers & winners'. In fact the term 'loser' is often used as a very derogatory remark, and yet losing positions (money) are just another part of trading forex.

So my tip would be to step back, really look at your own situation, then look again a few weeks later. When you know and accept yourself, you can start to move forward as a forex trader or as anything else. Quite a few students actually come to the conclusion that trading forex is not right for them at this moment in time.

Best of luck

[HannesJoubert]

Thanks Macman, yet further confirmation that psychology is the elephant in the room for me.

H

:hi:

PS, I may venture a guess and say that I am not the only one struggling with this? It just takes a long time to realise it though...