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TRADING PSYCHOLOGY

The Secret to Breaking the Code to Successful Trading Under Pressure

How Highly Intelligent People Are Duped into Believing, that Success Is Right Around the Corner

The Secret to Breaking the Code to Successful Trading Under Pressure

Why do experienced traders become unglued when losses occur, though they know that losses are part of trading?  And why do traders slip from confidence into over-confidence (and blow up their profits) just when they’ve put a string of winners together?  Finally, why does a trader’s execution plan fly out the window just at the moment he needs to adhere to it most?

An enormous amount of education and training are thrown at traders to solve these common problems. In the classroom where the trader is taught solutions to these fact-of-life circumstances of trading, most traders learn how to handle these situations – in theory, but not in practice.  But all the king’s men can’t seem to get it right to prevent Humpy Dumpty from crashing again and again. You will see this played out in your trading account with denial-piercing regularity.

Armed with all this classroom knowledge about how to bring a trading – and the trader’s desire to achieve success, you’d think that students of trading would move into sustained profitability, given some hard work and application of sound risk management principles.  Certainly, this is what they persuade themselves to believe, because it is what they most want to believe despite evidence to the contrary. 

No matter that the trading account reveals something different, the assumption the trader wants to believe (and is easily persuaded to believe) is that all he/she needs is more and more knowledge and that this knowledge will put an end to erratic trading performances.  Unfortunately, after many years of struggle, most traders discover that the dream of sustained profitability remains a seductive mirage for them – just out of their reach.

Trading Knowledge is only as Good as the Emotional Intelligence of the User

Why? Delivering in the clutch is so different from making good grades in class. Application of head knowledge to the risk environment of trading is a completely different world than in the classroom.  The real question is:  Can you deliver your knowledge in the clutch – or when the money counts? And if not, would you like to change that?

At the core of your successful trading performance is your tolerance to the vulnerability of being wrong (or not having the “right stuff”) found in uncertainty.  That tolerance is defined as the courage to face your misguided beliefs about your power to control and recognition that you were never in control of outcome.  Trading (and the drawdowns to your trading account) only exposed your illusion of control.  With the illusion of control busted, the vulnerability of being wrong is front and center. It is here where the trader faces his psychological demons and the fears lurking behind his need for control and of being right.  This is also where successful traders are born – if they listen to their trading account rather than what they have falsely persuaded themselves to believe.

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