When you look at the chart about to take a trade, you are still hesitating, still unsure whether this is the right one. You are still uncertain about pulling the trigger.
Remember – it will always be like this!
No matter how much you trade, this feeling of uncertainty for the outcome of any one trade is not only to be expected, but to be desired. This is the feeling that tells you – you perceive the Market correctly.
Recognize the uncertainty, accept it with a smile. The nature of trading lies in this everlasting uncertainty, never being sure about the outcome of any given trade. Having accepted the uncertainty – pull the trigger, take the trade.
If you already have a solid system, then over the next 20 trades you will turn a profit, of which you can be certain. If you are still in the process of fine-tuning your system, it is only possible to fine-tune through placing these trades amidst all the uncertainty the Market throws at you.
Be comfortable with ambiguity. Take the fear out of equation by accepting that losses are needed to turn a profit, by accepting the uncertainty as the core part of the game. You are only afraid of something you try to avoid. Fear dissipates as soon as you embrace that which you are afraid of.
Trading is only difficult when you have inappropriate expectations. You ensure it will be difficult by expecting it to be easy. You ensure frustration when you expect the Market to be certain and predictable. By expecting the Market to do what you think it should do, you ensure disgust and subsequent lack of confidence – guaranteeing that you will not be available for the trade which the Market does agree with.
Expecting not to lose, you are sure not to win.
Expecting to be right, you are already wrong.
Give up all your expectations, let the Market go where it will, do what it must and behave as it should. Stay fascinated, stay uncertain and confused but with a smile. Place a trade and be fascinated when the Market occasionally agrees with you!
How often do you feel frustrated because of the Market? How often the Market behaves in ways causing stress and anxiety? But truly, how can anything be “because of” the Market?
The Market can only reflect back what’s already inside of you. If frustration is boiling inside, if you are anxious and unsure, all these emotions will find the way out. It is irrelevant whether the Market will be the final straw or something else in your life.
The Market is a great teacher. The Market is fascinating. It is not “bad” nor is it the cause of anything.
Gather courage, look inside and face your own issues. Use the Market as your looking glass – what does it reflect back unto you? Seek such a mindset where the Market will reflect curiosity, fascination and acceptance.
Never allow yourself to lose track of the Market. It is constantly changing and as soon as you let your attention to waiver, it will take you to places you have never seen before.
Never let the Market travel far ahead of you! It will always be ahead, but it is your job to anticipate each turn it takes, carefully comparing what you have anticipated with how it moves in actuality. Be ready for all possibilities, avoid surprises.
Stay vigilant, follow the Market, gather rewards.
If you are trading without first assuring your survival, you are just playing a game, a crazy gamble that a drunkard places over the weekend in Las Vegas casino. No real trader who aspires to reach constant profitability will participate in the Market without first assuring their survival.
The above is absolutely essential and goes without saying. It is assumed by default that your risk and money management, as well as psychological well-being, are taken proper care of.
Before anything else, you need the willingness to put in countless hours of work into the Market. Only this will allow you to gain this important subjective feel of the Market as you watch it. The trading ideas will come to you effortlessly and it will only remain for you to execute them. This is how you build your trading system.
Ask yourself: “Why am I not putting enough time into watching the Market? Why am I not willing to take losses, make mistakes and yet continue with my method, learning and improving with each passing day?” Find the answers. Write them in your diary. Propose the solution and implement it.
When you spend enough time on trading and seemingly totally committed to your success in trading, ask yourself this: “Why am I not acting on each and every idea I have? Why am I closing the trades before my targets are reached or my system tells me to close them? What am I afraid of?”
Honestly answering these questions in your daily diary will lead to important improvements to your trading system. Go back to the first step – putting countless hours of work – and repeat the process times and times again, with humble understanding that you will never be good enough to cease improving your method and your execution of it.
Above all else, remember – it is only possible to go through this difficult process when you have absolutely, perfectly ensured your financial and psychological survival! You cannot be worrying about your well-being or losing more than you can afford to lose AND going through the mandatory learning process of taking losses, making mistakes and being clueless.
It is often difficult to recover from frustration of bad trading. When you make the mistakes you know you shouldn’t have made. When your read of the Market had been particularly poor and you are feeling absolutely disgusted with yourself about it.
Notice your thinking, notice your feeling, hear your self-talk. Instead of learning something from your mistakes and using frustration as merely a catalyst to do something about it, you are succumbing to your frustration, carefully nurturing it together with your ego. You do not want frustration to end, because then it will be time to take action, fixing the issues you have in your trading. You’d much rather play the victim of big bad Market, who is out there to get you.
You can be pathetic or profitable – never both.
Let’s take a look at what consistently profitable trader might be going through in his trading.
Is this how you feel in your trading?
Price is moved by traders. Traders are moved by feelings and emotions. Our job is to read these emotions on the chart. When traders are under stress their behavior becomes much more predictable, allowing us to profit from their mistakes.
I cannot find a good trading system. The signals my system is giving me are really poor.
How do you act, what do you feel when you believe this?
- Frustrated – “No matter how hard I try, I cannot be successful with such a poor trading system”
- Depressed – “I don’t even want to trade anymore, I have tried so many systems and all them don’t work! The Market must be purely random after all.”
- Apathetic – “It’s not worth it, there is no point to continue. I must be a complete failure!”
- Lost – “What do I do now? No matter how many systems I try, the signals are still poor!”
- Disorganized – “I might as well just take random trades”
- (after a couple random losses) Hesitant – “I am not sure I should take this next trade…”
While it is true that a trading method is still necessary in order to be successful on the market, it will be of no use while you have so many conflicting beliefs about trading. After all, how many trading methods have you tested properly? By that, I mean taking 30-50 trades, without hesitation, in real account (demo just doesn’t cut it – better open cent account and risk $0.50 per trade), precisely following one method, not adjust any rules whatsoever?
In my experience, we are often impatient to get the positive results and so we cannot even stand a couple losses in a row, thinking that something must be wrong with our trading method. Of course, this is interrelated with our refusal to believe in uncertainty – we want to know what the outcome will be before we place the trade.
So let’s try and turn this around and see what happens:
The trading system I have right now is good enough for all practical purposes. I will not judge it until I collect live track record of at least 50 trades following this method.
How do you feel now?
- Liberated – “I can concentrate on the Market instead of constantly reading forums in the search of the next Holy Grail”
- Calm – “All I have to do is take the next opportunity, as defined by my trading method”
- Confident – “I know that the next trading opportunity will be provided by the Market. I know that whatever its outcome might be, it will take me a step further on my path towards trading success”
- Interested – “I wonder what the next trading opportunity will be? What lesson will it teach me?”
As was already mentioned before, when you have a proper trading mindset you might not become profitable in an instant. But you will be open to progress in your endeavors freely, without any internal resistant. The Market will teach you how to trade, it will become your friend, not an enemy – but you must take the first step.