There are two types of men in this world. One that falls and one that stands up after he falls. In NLP or Neuro-Linguistic Programming, there is no such things as failure. A failure is simply classified as a feedback and every feedback is a lesson to help you learn and improve. There are many hurdles a trader must overcome to become successful. A winning trader views each hurdle or setback as a step towards success.
The losing trader on the other hand does not hold this belief. Ed Seykota said it best.
A losing trader can do little to transform himself into a winning trader. A losing trader is not going to want to transform himself. That’s the kind of thing winning traders do.
Harsh but yet so true. Success only comes to those who want it badly. Nothing in this world should be done half-way. Losing traders refuse to take responsibility of their actions. They prefer to blame external factors for their mistakes and losses. In NLP, in order for a feedback to become a lesson one must take full responsibility of his action.
We All Start Off With A Dream
I think men in general spend half their life dreaming. Without a dream, there is no thought. Without thoughts, there is no action. However, too many men spend their time talking and thinking. What is required is action.
Losing traders think similarly. They are so used to thinking and not acting that when the opportunity knocks at their door, they are unable to answer it. Thinking traders usually turn to trading systems; tweaking every indicator they have to find the perfect signal. The problem is they spend too much time jumping from one system to another that they are never able to become good at one methodology.
Thinking traders need to know the outcome before hand. This conflicts with their ability to trade. They tend to be perfectionists wanting to be right all the time. Trading is not about being right. It is about making money.
How many men do you know that act before they think. A form of balance is needed when trading the markets. However, many new traders lack patience and discipline. They get too caught up emotionally in their ideas that they often do things just to regret rushing in at the end.
These type of traders have a hard time following their trading plans. They may understand what it takes to trade successfully but their lack of discipline and self-understanding prevents them from doing so. They believe that eventually things will turn out alright. They often play on a tilt after a loss and will trade recklessly with their capital.
Change Is Good
Many people are too comfortable with their current situation that they dread change. It is common to see couples who are unhappy with each other remain in a relationship because they are too used to being together. Some people associate change with fear. This attitude does not help in trading. Learning is easier than unlearning. When something does not work, one needs to change what he is doing right away. A trader needs to be flexible and hold an open mind.
Characteristics Of A Losing Trader
2. No money management
4. Overtrading habits
5. Easily tilted
6. Does not trade with probabilities
7. Trades emotionally without controlling: greed, hope, fear, and euphoria
8. Does not have a trading plan and strategy