I have heard that 95% or more of all traders ultimately fail.
Have you ever wondered why?
Most traders will tell you it was the system or method they were using. They'll also tell you they had a few bad trades they couldn't recover from. Or their dog chewed through the telephone cord just as their computer crashed, and they couldn't get out of a losing trade.
Everyone has a different reason, but when you hear enough of them, a pattern begins to develop. I believe most traders fail because they sabotage themselves.
The markets work differently from other investing opportunities. There is probably more freedom in the trading business than any other industry in the world.
You can do what you want, whenever you want to do it. You can trade 1 contract or 100. Buy the market or sell it; it's up to you. The only thing that holds you back is running out of capital.
Most people are not accustomed to that much freedom.
If you can't control the market, the only thing you can control is yourself.
Trading is also very different than the things we do on a daily basis. In everyday life we exercise some control over our environment. If a room is too dark we turn the light on. If we want to go somewhere, we jump in the car and turn the key.
In trading you can't control what the market does.
No matter how much you want the market to go in a certain direction, there is nothing you can do to force that to happen. You can't turn a key or flip a switch. Hoping, pleading, screaming... nothing will make the market do what you want it to.
Embrace the uncertainty - plan for the best and worst cases
One of the most important things you can do to avoid the mental sabotage is to understand the lack of control you have over the market, and plan for every trade. Now I donít mean a trading plan like buy a contract and then close the position when the market trades higher. I mean a real plan. That includes specific entry points based on certain market movements or conditions. It means exit strategies for when things go right and for things go really wrong. It means placing limits and stops and keeping your emotions in check. If you have a roadmap for your day, you are less likely to fall into that trap of mental sabotage.
Remember: if you can't control the market, the only thing you can control is yourself.
Successful traders all understand and embrace this concept. Unsuccessful traders continue to try to make the market conform to their wishes.
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Fred C. Amityville NY (Testimonial from The Secrets of Floor Traders Course.)
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