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They Say it Couldn’t be Done

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Psychology and Risk Management

• What to expect
• Risks
• Position sizing
• illusion of control
• Accepting critisism
• Paralyzed by fear
• Loss is a feedback, not a failure
• The flexible trader
• Focusing on the positive
• Short straddle
• The dynamics of greed
• The herd mentality
• Notes

For six months, Jim has been trading. He had Rs 5,000 to start, but now he just has Rs 1,500. He’s beginning to worry, now. He’s angry and frustrated. I believe it is difficult to trade and make a life, he says to his friend Jason. I’ve put in six months of labour, but I’ve lost money. I haven’t earned anything. I don’t think it’s possible to trade profitably.

 

Any of this familiar to you? Jim is suffering from a condition that many beginning traders experience. He had high expectations for quick success, but trading has more drawbacks than he anticipated and cannot handle. He’s frustrated because success has eluded him. Profitable trading is challenging, in fact. The general consensus among professionals is that less than 20% of people who attempt trading will have long-term success.

learning sharks stock market institute
Source: Investor's business daily

You need to be upbeat if you want to be a good trader. You must firmly believe that if you work hard enough, success will eventually come to you. That does not imply that you should adopt a pessimistic outlook. That doesn’t mean you should try to downplay how challenging and demanding trading is or that you should be frightened to tackle such issues. Instead, you must be willing to accept and meet the obstacles. You must recognise them and take decisive action to address them. It’s challenging to accomplish this.

 

The more your financial resources, the more likely it is that you can find long-term success. In order to learn how to trade and obtain the experience you need to perfect your trading skills, you must also put in a lot of time in the beginning. You won’t be able to accomplish your objectives by pretending that you don’t need to fulfil these requirements. You won’t be able to give up easy. You must possess the ability to persevere in the face of unfathomable challenges. And you must not give a damn what people think. You must respond, “Maybe it can’t be done, but I’m going to do anything I can to see whether I’m one of the few who can,” if they claim it’s impossible.

Don’t Forget to Take a Break

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Psychology and Risk Management

• What to expect
• Risks
• Position sizing
• illusion of control
• Accepting critisism
• Paralyzed by fear
• Loss is a feedback, not a failure
• The flexible trader
• Focusing on the positive
• Short straddle
• The dynamics of greed
• The herd mentality
• Notes

Reality is arbitrary. In the same way that there are various mental or emotional states, there are several states of reality. For instance, the outlook for the future can be dim after a string of failures. On the other hand, you might feel joyful and even omnipotent following a string of significant victories. Which then is the real reality? Answering this question is challenging. It can be useful to think about different realities, some of which are more suited to optimal trading than others.

 

Making money is a necessary reality. Your account will lose all of its value if you don’t make enough profitable trades. Even though this is a truth of trading, pressuring yourself to make a transaction after a winning deal can really cause you to pass out from stress. It is advisable to forget about this truth while trading the markets. The more you can avoid concentrating on your past performance and keep your attention on your present experience, the better. The better you trade, the more carefree you get.

learning sharks stock market institute
Source: Wall street journal

But you must mentally distance yourself from everything if you want to switch to a peak performance attitude. You must allow your thoughts to unwind. Slowing down your thinking is necessary. You must occasionally step away from the trading industry’s competitive environment. Everyone has their own strategy. Some people meditate. Others exercise in the gym until they have exhausted all of their pent-up energy and are completely relaxed. Additionally, a lot of folks get massages to unwind physically. The secret is to force your mind to switch to a different world by shaking it.

 

Here’s a technique that can really jolt your head in the right way. You can spend two minutes submerging your body in warm water (hot but not boiling, ideally at a professionally run spa), after which you can plunge into a pool of cold water. All your thoughts are focused on adjusting to the heat when you submerge your body in a hot pool of water. It hurts a little, so you have to keep your focus to keep from springing out. It helps you concentrate on it. Actually, all you can think about is how you’re going to deal with the immense heat around your body. You soon start to feel meditative.

 

You’re at ease and a little disoriented. Repeat the procedure several times to achieve complete relaxation. You’ll be in a brand-new world. Adapting to this new reality can be a revitalising experience psychologically.

 

You’ll view things objectively. You’ll realise that your trading endeavours and the high standards you strive for are just one part of who you are. Having this insight might be comforting after a hard trading day. You’ll keep in mind that despite the pandemonium, there are alternative realities. But more significantly, you’ll feel at ease and reenergized to take on the strains and tensions of the markets.

 

Inherently stressful is trading. Even if we attempt to prevent it, when it comes to money, our ego is frequently on the line. It’s vital to mentally disconnect from everything. Whether it’s through meditation, physical activity, or a trip to a tropical island, it’s important to change your reality, get some rest, and recharge.

Realistic Optimism Keeps You Grounded

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Psychology and Risk Management

• What to expect
• Risks
• Position sizing
• illusion of control
• Accepting critisism
• Paralyzed by fear
• Loss is a feedback, not a failure
• The flexible trader
• Focusing on the positive
• Short straddle
• The dynamics of greed
• The herd mentality
• Notes

A little-known commerce company has just been launched by Rohan and Himanshu. I sense it, Rohan declares. We’re going to get rich quick. We’ll be flush with cash by this time next year. Himanshu responds, “I don’t think so. That need a miracle. You’re such a pessimist, Rohan remarks. Why are you so depressing? Himanshu asserts, “I believe we will succeed. However, I don’t believe it will happen immediately. It will require patience and a great deal of effort! The realism Rohan is. He is aware that they will eventually earn enormous profits, but he does not hold out hope that a miracle will take place. You will have to overcome countless obstacles if you want to become a successful trader.

 

Although optimism is necessary, realism is perhaps more crucial. Overly pessimistic people, like Rohan, set themselves up for failure. You can take unneeded risks or feel especially let down when you experience the seemingly constant disappointments that come with trading.

learning sharks stock market institute
Sourse: The economist

If you want to outperform the market and become a successful trader, you must persevere through numerous disappointments and make trade after trade. To be able to get back up after falling and be eager to tackle each obstacle requires a particular kind of person. Dr. Martin Seligman has conducted research on how optimism encourages people to persevere in the face of obstacles. For instance, optimists outperform pessimists in terms of academic performance, electoral success, and professional success. Optimists outperform pessimists in all of the occupational groups he’s researched, from elite winning athletes to traders on the trading floor.

 

What is their trick? It’s in the way they justify failures or setbacks. The blame is not placed on them. They don’t think that enduring personality attributes determine success or failure. Instead, they justify defeats as the product of unimportant, manageable circumstances that are unrelated to them individually. They think they can overcome a setback if they are persistent enough. A positive way of thinking is something you must practise if you want to be a successful trader. As a trader, you will encounter far more losers than winners, therefore it will need perseverance to keep going until you discover a string of profitable transactions. But everything you do, avoid placing the responsibility on yourself. Think not, “I’m a loser.” 

 

Instead, concentrate on how you can make a firm decision to alter both how you respond to and the external circumstances. You’ll advance considerably.

Despite this, being pessimistic has benefits. Despite having negative feelings the most of the time, studies have shown that pessimists are better at assessing their level of control over particular situations. Being occasionally pessimistic may be advantageous since pessimists tend to make more realistic judgements. While optimism may make you feel fantastic, pessimism allows you to assess whether your plans, objectives, or ideas are realistic. Traders are infamous for having excessive confidence, especially beginners. Terrance Odean, a behavioural economist, claims that new traders frequently overtrade and have overly high expectations.

 

Realistic expectations when it comes to trading are essential for survival. While optimism aids in overcoming obstacles, a healthy dose of scepticism will keep you grounded in reality. It can be helpful to reconsider your trading strategy before putting it into action, for instance. Have I considered every unfavourable circumstance that could undermine my plan? Have I properly controlled my risk? Do I have enough money to accomplish my financial goals? Have I allotted enough time to learn how to trade profitably?

 

Long-term survival depends on asking yourself these kinds of questions and making sure you have the answers. To become a successful trader, one must overcome a number of actual challenges. Sugarcoating the truth can only temporarily improve your mood. You’ll eventually come to realise the grim facts. The best course of action is to confront the challenges head-on rather than setting oneself up for failure. Making a realistic action plan with sub-plans to get around the seemingly infinite obstacles helps keep you grounded even if it initially seems overwhelming. You’ll be one of the select few traders who succeed in the long run since you’ll have an optimistic yet practical plan for turning into a successful trader.

Getting Ready to Trade

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Psychology and Risk Management

• What to expect
• Risks
• Position sizing
• illusion of control
• Accepting critisism
• Paralyzed by fear
• Loss is a feedback, not a failure
• The flexible trader
• Focusing on the positive
• Short straddle
• The dynamics of greed
• The herd mentality
• Notes

Trading is difficult. It tests the bounds of your abilities. And if you don’t carefully manage your risk, the results of a poor decision could be devastating. You must ensure that you are prepared to trade before you risk your pride or your money in order to survive. Without the right attitude or tools, you wouldn’t attempt to climb Mount Everest, so why try to trade when you’re not ready? It’s best to avoid the marketplaces until you are fully prepared until you are rested, at ease, and well-equipped. Here are some fundamental things to think about before you start trading seriously.

 

Before the markets start, it’s vital to do some research and restrict your trading options. Since they have traded the same vehicles for years, some seasoned traders may argue that they don’t need to prepare for the markets, but it’s crucial that new traders understand the value of planning ahead. Knowing your specific trading vehicles before you enter the markets is a sign of good preparation. It’s helpful to choose precisely what you will exchange because there are so many options that it can be overwhelming.

learning sharks stock market institute
Sourse: The new york times

If you limit your emphasis to a few key deals, you’ll discover that you’ll make more money. (Trading every opportunity is not necessary to be profitable, and attempting to do so may frequently overwhelm you to the point where you won’t make any trades.) Not to mention creating and following a thorough trading plan. Make sure you take into account every last detail (for example, entry strategy, exit strategy, and risk control). Don’t put off developing your trading plan until the last minute. Get ready early.

 

It’s crucial to prepare for any potential negative forces that can work against your trading strategy. Just like a mountain climber must prepare for terrible weather, traders must prepare for situations that could adversely affect market behaviour. Make sure, for instance, that you have taken into account key market occurrences like interest rate changes, earnings reports, mergers and acquisitions, or the status of ongoing legal processes. These events can quickly ruin your trading strategy because the general public is often persuaded by them. So be on the lookout for them and be prepared to adjust your plans if you do.

 

Be sure to psychologically prepare yourself. Trading is hectic, demanding, and emotionally draining. In order to vigilantly attend to the numerous sources of incoming information necessary to take swift and decisive action, your mind must be operating at full speed. You must practise having the appropriate frame of mind. Make sure that significant stressors don’t enter your consciousness. In your free time, deal with pressures and settle old disputes. Don’t undervalue the impact that these psychological influences may have on your perspective. They may obstruct your immediate experience as you put on trades if you don’t take care of them beforehand.

 

The need to prepare physically is equally crucial. It’s crucial to keep in mind that even though you might spend the most of your day sitting in front of a computer screen, this somewhat sedentary activity nevertheless requires physical stamina. You’ll have a tendency to act impulsively if you don’t have the physical stamina to carefully monitor your trades since you’ll be too exhausted to keep up with the fast-paced activities. Make sure you receive the appropriate nourishment and activity. You’ll not only increase your physical endurance to handle the demands of trading, but you’ll also release tension. Trading is difficult. Exercise on a regular basis helps to prevent the buildup of stressful feelings.

Take Credit for Your Efforts

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Psychology and Risk Management

• What to expect
• Risks
• Position sizing
• illusion of control
• Accepting critisism
• Paralyzed by fear
• Loss is a feedback, not a failure
• The flexible trader
• Focusing on the positive
• Short straddle
• The dynamics of greed
• The herd mentality
• Notes

Successful traders gain money. The degree to which you are profitable as a trader ultimately determines your success. It is simple to feel as though nothing has been accomplished or that your efforts have failed if the results of your efforts are unsuccessful. However, concentrating only on a trade’s results can be off-putting, particularly if you feel like you aren’t making any progress. Even if part of your efforts don’t directly result in a profit, you still accomplish a lot as a trader even though earnings are vital. Pat yourself on the back for everything you do as a trader, regardless of whether it results in a profit, as it is crucial for your self-esteem and wellbeing.

 

In a conventional job, you work 40 hours per week and are paid for it. Even though the living can occasionally be tedious, there is a feeling of security. You as a trader are unsure of the exact amount you will make from your trading endeavours. It’s tempting to use your account balance as the only benchmark for your success. You’ll feel quite pleased if things are going so well that your equity is increasing. However, if you are having a bad day, you’ll feel frustrated and a little let down. You can feel disappointed in yourself or your loved ones. You can feel as though you are in a rut or stationary.

 

 

learning sharks stock market institute
Source: Barrons.com

Giving oneself a mental reward for all your hard work is one approach to stay positive. You could even compile a list. Record your accomplishments as you complete them so that you may look back on the list at the end of the day and be proud of your accomplishments. Make a note of it, for instance, if you scan 20 charts. Add any newsletter articles you’ve read to the list. Making a list of things you’ve finished and rewarding yourself for them won’t necessarily replace making deals that are successful, but it will help you feel accomplished. You’ll feel like you’re moving forward, particularly during those periods when you just can’t seem to turn a profit.

Back On the Right Course

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Psychology and Risk Management

• What to expect
• Risks
• Position sizing
• illusion of control
• Accepting critisism
• Paralyzed by fear
• Loss is a feedback, not a failure
• The flexible trader
• Focusing on the positive
• Short straddle
• The dynamics of greed
• The herd mentality
• Notes

Have you ever been furious or frustrated without understanding why? Maybe you were simply keeping an eye on a position when the market abruptly changed direction, and when it did, you saw half of your potential profit disappear. An ordinary occurrence like this one would have been tolerated, but it wasn’t. You experienced threats, upset, and fear for an unknown reason. Without prior notice, it seemed as though a centrifuge of emotions grabbed over. It simply passed you by. You weren’t ready for it. You didn’t know why you were so horribly agitated, but all you knew was that you became disoriented and were unable to concentrate on sticking to your trading strategy. You were unable to think coherently. You were lost in a fog.

 

Why do we overreact when it’s not necessary? We often let our expectations dictate how we feel. We respond emotionally and impulsively when our expectations don’t line up with what really occurs in the markets. Although it’s in our nature to want to win, the markets aren’t always on our side. When we are taken off guard, our first instinct is to assume that the markets have been unfair to us. When something doesn’t go the way we expect it to, we become irate. However, trading is a career where you should operate under the premise that things won’t always go your way.

learning sharks stock market institute
Source: Businessstandard

Even if certain trading events could not go your way, you shouldn’t let this aspect of trading depress you. A poor trade or an unexpected loss will depress you if you are caught off guard. But if you prepare for such things, you’ll remain composed and at ease, prepared to move swiftly to correct the issue.

It’s essential to prepare for bad things to happen rather than reacting emotionally and impulsively. Expecting things to go your way is unrealistic. If you think that something bad like this should never happen, you’ll be frustrated and angry when it does. Furthermore, you won’t be able to take significant action if you are too irate and frustrated. You won’t be able to react to potential issues right away.

 

You need to remain cool and consider how to take evasive action to protect yourself rather than getting upset, frustrated, or distracted. If you foresee a difficulty, you can calmly come up with a different solution and implement it.

Setbacks and unfortunate occurrences are a part of trading the markets, and without the right perspective, such setbacks may be crippling. The proper mindset is essential for traders. You won’t be mentally caught off guard if you actually expect disappointments and unfavourable circumstances. Instead, you’ll be able to recover fast, engage in fresh profitable transactions, and ultimately win out.

Developing New Trading Ideas

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Psychology and Risk Management

• What to expect
• Risks
• Position sizing
• illusion of control
• Accepting critisism
• Paralyzed by fear
• Loss is a feedback, not a failure
• The flexible trader
• Focusing on the positive
• Short straddle
• The dynamics of greed
• The herd mentality
• Notes

Any seasoned trader will tell you that developing novel, creative trading ideas is the key to long-term profitability. Finding winning tactics is challenging. And then, after all the bother of creating a successful trading strategy, it abruptly fails. Finding fresh tactics and possibilities is essential to staying ahead of the competition; else, your overall revenues will noticeably fall. Here is a fundamental three-stage approach for coming up with and evaluating fresh ideas: brainstorming, planning, and arguing against the evidence.

 

The objective of the brainstorming step is to generate as many fresh trading strategy concepts as you can. Be honest with yourself and let your thoughts flow. Don’t be reluctant. There is no such thing as a stupid concept, so live by that maxim. Consider the actions you would take if anything were feasible. The aim at this point is to generate as many ideas as you can, even if some of them are implausible. Avoid placing restrictions on yourself. You risk preventing an original thought from entering your consciousness if you suppress your creative urges.

learning sharks stock market institute
Source: Businessstandard

The objective of the planning step is to improve your possibly creative concept. It’s time to transform your concept from a hazy notion into a specific strategy. Consider how you will carry out the strategy and make an effort to iron out all the details. Think imaginatively, yet realistically. What practical steps can you take to put your idea into practise? What omens or clues point to the ideal market circumstances for putting your proposal into practise? What is a reasonable profit goal for your concept? How do you plan to reduce your risk? What is your plan of action? The strategy will be easier to follow if it is more comprehensive. It will also be simpler for you to gauge its prospective profitability.

You must take the devil’s advocate role in the last phase. You’ve described a workable idea, now it’s time to think about what’s wrong with it. This is a crucial phase. It has been claimed that brilliant trend-setters are those who can tell the difference between a truly original concept and a wishful thinking. It’s essential to have a critical eye. At this point, it’s helpful to think that the majority of trade concepts are “poor ideas,” and that you must consider every scenario in which your plan might go awry. Even the most rationally sound proposition can fall short on the market. What evidence do you have that your plan will be successful? What presumptions did you use to formulate your plan? Are they logical? What could possibly go wrong?

 

Losses can be avoided with a skeptic’s mindset, thus it’s crucial to identify every mistake and either fix the strategy or abandon it.

You may create cutting-edge trading methods that will keep you profitable in constantly shifting market conditions by using this three-stage technique of brainstorming, planning, and critiquing.

Closing the Gap

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Psychology and Risk Management

• What to expect
• Risks
• Position sizing
• illusion of control
• Accepting critisism
• Paralyzed by fear
• Loss is a feedback, not a failure
• The flexible trader
• Focusing on the positive
• Short straddle
• The dynamics of greed
• The herd mentality
• Notes

Do you ever feel like your chances of making money on the trading day are slim? You simply sit there, frustrated, and gaze at your devices. In situations like these, having a positive outlook can give you new energy. When you approach trading with an upbeat perspective, you’ll be prepared to look for new opportunities to make a profit. Mark Douglas, a trading expert, claims that traders should work to narrow what he terms the “reality gap.” According to Douglas, “there is a vast disparity between what is conceivable from the trader’s personal perspective and what is achievable from the market’s standpoint, which is nearly anything.” What traders believe they can extract from the markets is constrained by their expectations. The possibilities, though, are numerous.

Successful traders keep going despite what seems like never-ending defeats. Rare individuals possess the ability to bounce back swiftly from a difficult fall and eagerly take on another possible obstacle. Dr. Martin Seligman has researched the benefits of having a positive outlook on life. He has researched a variety of occupational groups, including dealers on the trading floor and elite, successful sportsmen. Being optimistic is a key predictor of success. Pessimists struggle at work, perform worse academically, and lose more elections than optimists do.

learning sharks stock market institute
Sourse: Thenewyorktimes

The way people view events in their lives has an impact on their optimism. People that fail attempt to comprehend why they failed. People who are pessimistic think that they have a permanent personality flaw that causes them to fail. They believe that their failure is an indication of a persistent and stable weakness in their aptitudes. For instance, they become overly sensitive during a particularly difficult trading day. Others can trade on a day like this, but I’m so untalented that I’m stuck, they may reason. There is no hope. I’ll never be successful as a trader. But it’s crucial to keep your spirits up when you feel defeated.

 

Robert Koppel recommends establishing an optimistic mindset by repeating specific uplifting concepts in “The Mentally Tough Online Trader.” It helps to tell yourself, “I believe I will be a successful trader,” when you’re feeling depressed. I think my trading will produce amazing profits. Every day’s performance is, in my opinion, new. You can take on the markets and sort through available market opportunities until you identify a workable strategy to turn a profit by thinking these encouraging, upbeat thoughts.

 

If you want to be a good trader, you must adopt an upbeat mentality. It will take tenacity to persevere until you find a run of profitable trades since as a trader, you will come across far more losers than winners. It’s easy to feel discouraged and like your options are limited. A positive approach, though, can enable you to overcome the disparity between your low expectations and the abundance of market chances.

The Mindset of a Professional Gambler

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Psychology and Risk Management

• What to expect
• Risks
• Position sizing
• illusion of control
• Accepting critisism
• Paralyzed by fear
• Loss is a feedback, not a failure
• The flexible trader
• Focusing on the positive
• Short straddle
• The dynamics of greed
• The herd mentality
• Notes

The “established” investment community has many people who are keen to clarify that investing is not gambling. Gambling carries a lot of bad connotations in the popular mind. When the topic of professional gambling is brought up, the majority of people immediately picture compulsive gamblers who recklessly blow through their wages and other essential funds for their daily survival. However, gambling is not always “evil” or “bad.” In fact, traders who make a living at it are simply gamblers. It all comes down to developing the proper mindset—the cool, analytical mindset of a seasoned gambler.

learning sharks stock market institute
Source: Edexlive

Trading is a sort of gambling, but it’s important to distinguish between obsessive, recreational, and professional gamblers. Gambling addiction is present in compulsive gamblers. They play games of chance to feel elated and rush. They have no discipline at all. Obviously, a compulsive gambler or trader has no place in the trading world. However, a lot of people mix up compulsive and professional gamblers, despite the fact that they are diametrically opposed. Professional gamblers and traders may engage in risk-taking, but they do so with caution. They first search for high probability trade setups before placing a wager.

Social gamblers, sometimes known as amateur gamblers, only gamble for fun and leisure. They set aside a set sum of money for gambling entertainment and use it just like they would for a show, concert, sporting event, or other enjoyable activity. Fun is fun, thus it makes little sense for a social gambler to construct a thorough plan for taking down the casino or meticulously minimising risk, for instance, at the blackjack tables. Gaining excitement and holding out hope that one will get Lady Luck on one’s side and win a large prize are both fun aspects of social gaming.

However, a lot of new traders make the error of viewing trading as amateur, sociable gaming. Trading is seen by them as fun. This approach to trading is fine if you have money to burn, but the majority of us want to make money. Furthermore, a social gambling mentality can quickly deplete your trading account. Changing this mindset is essential if you are serious about trading professionally. Although you might like trading, the primary goal of professional trading is to make money. That entails developing effective trading techniques as well as rigorous risk management, self-control, emotion regulation, and the ability to execute trading plans when in a peak performance level.

 

Don’t engage in deals only to feel excited. Look for trade setups with a high likelihood of success, then wait until you discover one where you can profit. The phrase “you’ve got to know when to fold ’em” is used by gamblers. When it comes to risk management, you must also behave like a seasoned gambler. Trading involves patiently waiting for the odds to change in your favour, just like a seasoned gambler. A professional gambler takes extremely little risk on each throw of the dice in order to prepare for and stop a losing streak.

 

It helps to think about trading as high-stakes gambling. It gives it the correct context. Instead of being a novice player, you are the casino who meticulously evaluates the odds, ensures that they are in your favour, and uses the “law of averages” to your advantage to make sure that, over a large number of deals, you make a sizable profit. You will trade profitably and regularly if you give up an amateur mindset and adopt a professional one.

Take Responsibility and Take Control

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Psychology and Risk Management

• What to expect
• Risks
• Position sizing
• illusion of control
• Accepting critisism
• Paralyzed by fear
• Loss is a feedback, not a failure
• The flexible trader
• Focusing on the positive
• Short straddle
• The dynamics of greed
• The herd mentality
• Notes

There are basically two ways to comprehend and interpret occurrences in one’s life, according to renowned psychologist Dr. Julian Rotter: Either one can assign the reason to internal factors, like hard work, aptitude, or ability, or one can ascribe the cause to external forces, like luck or fate. One tends to assume full and complete responsibility for an outcome when one searches for internal forces. One may remark, “I made a profit on the trade because I was well-prepared, patiently awaited the perfect indications, then traded my plan,” as an example. That is a justification that relies on internal factors.

 

For a winning trade, it’s easy to explain the outcome with internal forces. We have a natural tendency to build ourselves up and enhance our ego when we win, so it makes us feel good when we do well and believe it is due to our talents and skills. But what about a losing trade? When we lose, it’s also due to our talents and skills, but in this case, it may be a lack of talent and skills. Such a possibility is harder to accept. When faced with a defeat, most people suddenly switch from looking for internal forces to looking for external forces: “The market conditions changed too quickly.

learning sharks stock market institute
Slate.com

Once more, price manipulation is being done by market makers. I should not have followed that analyst’s ignorant advise. I had bad luck. When a loss occurs, it is simpler to make an excuse than to accept complete responsibility. During these times, the majority of us have a tendency to view the world from a self-serving perspective, attributing our successes to intrinsic personal traits while attributing our failures to environmental factors. But there are benefits to going against our natural inclinations and constantly accepting full responsibility for both our victories and failures: One feels powerful and in total control.

Participants who tended to attribute life outcomes to internal forces, such as the psychological advice we offer in these Innerworth daily columns, were found to be more satisfied and able to apply the self-help information to change their lives than participants who tended to look for external explanations, according to a study on self-help instruction. They were able to apply the self-help advice to them more readily, which gave them a sense of empowerment and control over their life. By embracing accountability for one’s actions, it is possible to take complete charge of one’s life and implement significant changes.

 

All energy is concentrated on improving performance and learning new skills rather than always searching for justifications and attempting to lay blame on external circumstances. Contrarily, traders who don’t accept full responsibility often focus a large portion of their psychological energy on defending themselves against their errors. They tend to be readily influenced due to a constant need to maintain their egos rather than building an accurate, impartial picture of the markets. Focusing on external factors for failures may make one feel better in the moment, but it will ultimately have a negative impact on performance. Over time, abilities stagnate and scarce psychological resources are wasted on ego-protection. To identify an outside cause for failure needs effort and time.

 

It can be challenging to accept complete responsibility, especially after an unsuccessful trade. Looking at one’s flaws and limitations is difficult. However, the long-term benefits outweigh the momentary discomfort felt while considering one’s restrictions. You will ultimately obtain power and control if you examine your shortcomings, accept accountability for them, and accept complete responsibility. So assume complete accountability and exercise control.