“I cannot find a good trading system”

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?

  1. Frustrated“No matter how hard I try, I cannot be successful with such a poor trading system”
  2. 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.”
  3. Apathetic – “It’s not worth it, there is no point to continue. I must be a complete failure!”
  4. Lost – “What do I do now? No matter how many systems I try, the signals are still poor!”
  5. Disorganized “I might as well just take random trades”
  6. (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?

  1. Liberated“I can concentrate on the Market instead of constantly reading forums in the search of the next Holy Grail”
  2. Calm“All I have to do is take the next opportunity, as defined by my trading method”
  3. 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”
  4. 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.

“I should only take 100% certain signals”

I should only take 100% certain signals – the ones that I know will not fail me

This one is tricky. It seems that it makes good sense. Shouldn’t we all analyze the market properly and find the best possible trading opportunities? Why should we even bother taking the trades that we are not certain about?

So how do you feel, think and act when you believe this?

  1. Reluctant – “This signal does not look quite certain yet…”
  2. Frustrated – “I’ve been analyzing the market for hours now, but no trades look certain enough yet!”
  3. Reckless – “Now that I found this 100% certain signal, I can scale up my position and I don’t really need Stop Loss either – this trade can’t fail!”
  4. Worried – “Well, this trade does not behave quite as I expected, but I am sure it is just a temporal correction.”
  5. Hopeful – “I should just double my bet while Market gives me better price…”
  6. Afraid – “This does not look good so far, I don’t have much margin left…”
  7. Numb – [just stares at the screen…]
  8. Horrified – “It’s all #u?king gone! My whole account!”

The above example might be over-dramatized but it shows what can result from your inability to accept uncertainty.

You certainly get a lot of excitement trading that way, and I guess for some traders gamblers excitement is a goal in itself.

Let’s consider the opposite belief:

I should take any signal my trading system offers, knowing that none of them is certain

How do you feel when you believe in the above statement?

  1. Calm – “I am just doing my job, taking each opportunity I find”
  2. Quiet – “Every trade feels completely the same inside”
  3. Composed – “I know exactly what I am doing”
  4. Safe – “My account is always protected when I trade like this”
  5. Optimistic – “I am looking forward to positive long term results of my trading regimen”

Not much excitement, nor fun. Reminds me of one of my favorite quotes from “Market Wizards” in interview with Larry Hite:

“Larry, how can you trade the way you do; isn’t it boring?” I told him, “I don’t trade for excitement; I trade to win.” It may be very dull, but it is also very lucrative.

If you are excited about your trades, you are doing it wrong. If excitement is what you want, just go to Las Vegas – at least you get free drinks as you lose your money.