Your Most Common Trading Challenges Examined

Do you believe  that it is first and foremost your trading system that will make you a good trader? Most new traders think so and even many established traders do to. Well, please think again:

Trading is 80 % mental and 20% skill

Below are the four main reasons why traders fail:

# They do not understand that the markets are a mirror of life on a chart. Markets are a living thing and reflect crowd behaviour, you , the trader are one of the crowd too.

# They fail to understand their own personality and what that means for their trading style. It can make THE difference between success and failure as a trader.

# They fail to notice how they transfer their feelings and emotions to their trading and believe that the emotions they pick up from other traders and the markets are theirs.  Feelings are unpopular with traders, big mistake!

# They have unresolved psychological blockages which they supress with superficial positive thinking and learned discipline. We all have blocks, to think that you are the one who has not is dangerous arrogance. 

# And finally....

..add to this one most important point for the beginning trader: Under capitalisation due to unrealistic expectations and poor trader training. The recipe for trading failure is complete.

However, this need not be so:

I have  traded  for many years and learned, like most traders, the hard way until I became successful

I managed to lose most of my money, in six figures, in the first three years of trading, mainly following other traders\' systems  rather than working on building my own personal trading style and confidence. I had to stop trading for three years partly because of lack of funds. During this time I immersed myself in the study of trading and investment psychology. The involuntary sabbatical turned out to be a time in my life where I learned much about myself and how and why psychological factors make us good or bad traders.

Having read many  books on the psychology of trading I found that none of them helped me become a profitable trader for one reason:

Most books on the psychology of trading do not tell you the number one reason for your trading difficulties:

Your conditioning, it\'s part of universal evolution and greatly misunderstood. 

Looking back on my trading journey, which, incidentally is still very much an ongoing journey; I know now that I really wasn\'t in touch with my real self and acted out my conditioned self. My market calls were influenced by the so called experts,  and not my own views of the market. In fact I did not have a personal perspective on the markets, but I didn\'t realise this. 

In my first  few years of trading I became aware of many unresolved money issues.  I learned that my past lack of self awareness had  made me repeat self sabotaging patterns over and over again without my conscious knowledge.  In those early days I went from impulse trading to hesitance, all out of fear of losing yet again. My trading life was a permanent emotional roler coaster and I did not understand what had happened to me.

After all I had  always been succesful in pretty much everything else I had done untilI I embarked on trading full time. It did not dawn on me that my challenges actually were my greatest teacher and were propelling me forward, growing me as a person. Instead I was in resistance at every point along the learning curve.

I bet this sounds pretty familiar to those of you who are new to trading...

... and those of you who have been at it for a long time and made the grade to master trader.

Like most of us I was conditioned to show plenty of stiff upper lip and get on with it. The main goal in life was to keep face and this attitude makes it difficult to tune into the markets  with sensitivity and detachment and flow with market cycles. Making profits was the main objective. Only I wasn\'t making money!

Few books on trading really prepare you for the trading game. They do not  talk about the importance of getting to know yourself and how to get in touch with the real you. After all, how can you be in touch with someting else if you are not in touch with yourself?

Stay out of your own way

After the initial trading problems I met a professional trader who mentored me and who taught me  the importance of staying out of my own way  first and foremost. It took me quite some time though to understand what this meant and apply it to my trading.

You must be able to distinguish between your true inner self, meaning  your own thoughts and feelings and outside influences. from the likes of CNBC, Bloomberg which you uniwittengly allow to influence your market opinion. Learning to distinguish  between what you feel is right for YOU and making up your own mind about market action is the biggest hurdle we traders face on the path to trading consistency. Consistently successful trading is ultimately about one thing only: It is about tuning into yourself and thus tuning into the markets. 

Trading requires total honesty with yourself above all else

I have a trader friend who is a successful hedge fund manager. He told me many years ago that the biggest difficulty a traders faces is being honest with themselves. Western culture does not teach you honesty or the essence of truth. Western culture teaches you to look outside of yourself to measure the results of your actions. In doing so you are receiving a distorted picture of reality because what you see is back to front. Our reality is the result of our thinking and not the other way round.

You probably believe that you are very honest and strict with yourself. Most traders do. They are blissfully unaware how their judgements detach them from  the market reality unfolding on their screens. Yet, how can you be in tune with market action when you can\'t be honest with yourself  and are detached from your true authentic self? This is a big issue and needs to be addressed if you want to become a professional trader making consistent returns in the markets.

Excessive focus creates tunnel vision

Focusing on excessive trading discipline makes for unnatural hard work and can lead to failure, because you are disconnected from yourself and the oneness of the universe. When you allow discipline to dictate your trading decisions first and foremost you are constantly reinforcing this separation. This causes immense stress.

Excessive  focus  promotes tunnel vision, judgemental heuristics and anxiety.  None of these characeristics help you to be truly honest with yourself. and allowing yourself to become a successful trader based on the rules that are right for you.

Sooner or later  though everything reverts to its mean. This is a market law and a universal law affecting all of us. If you are suppressing core aspects of your personality, and permanently manipulate your mind, you will pay the price at some point. The name of the game is to get to a point of allowing and letting whatever happens be okay.

Suppressed issues have a habit to raise their ugly heads until they are resolved, because until they are neutralsed you will be unconsciously trading your suppressed emtions. If you have a problem in your relationship, or  have exprienced the loss of someone close to you, pusshing these matters away does not assist your emotional health nor your trading. If you want to be a consistently successful trader create a sound psychological foundation.

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I invite you to read \"The Buddhist Trader\" It will shorten your learning curve.