It is one of the most difficult but easy endeavors to master.
Once you know the basics, understand the market dynamics and even know the risk management rules – you might still continue to be in the red.
Why is that?
Is there more to trading than understanding the principles?
I would say most definitely yes!
Here’s why you might suck at trading…
Reason #1: You haven’t found the system that suits you!
Whether you create, develop or adapt a trading system – it is very easy to do. For example. Place two moving averages on the chart (7MA and 21MA).
When the 7MA crossed above the 21MA you go long (buy). When the 21MA crosses below the 7MA, you go short (sell).
You might have a system with price action and candlesticks. You might have a simple breakout patterns strategy. Or you might just have a system with price vs Volume.
I’m telling you now.
Finding or creating a winning system is VERY EASY.
They are abundant on the internet.
But here’s where it is very important.
If the system, structure, layout and criteria does not suit your trading style or personality, it will never work out.
Why? Because you probably won’t have the discipline and patience to keep following it day in and day out – Year in and year out.
You might get emotional with when it goes against you. Or worse, you might want to take profits pre-maturely when the system moves in your favour.
That’s why you need to back and forward test a number of systems.
After time, you WILL know what suits you as a trader.
If you don’t, you’ll continue to suck.
Reason #2: You can’t stomach losses YET
In the 4th pillar of trading success – Mind – this is why it’s pertinent to train your brain.
No matter what trading strat or system you have, losses will come. Losses will come sometimes (10 in a row).
Losses will continue over a period of 4 to 5 months a year.
You need to understand, this is what is necessary to pass in order to excel. It might also be the reason why 98% of traders lose. Not because they are losing trades, but because they quit due to the fact that there were a number of losses.
I’m still down 7% of my portfolio since June. It is August now and I’m still smiling away, knowing the drawdowns will end.
Knowing the upside and green is very soon here to come.
And we will come out of it with all time high profits.
Own your losses, expect your losses and even love your losses.
Then you’ll find you have a chance at trading success…
Reason #3: You’re trading as if you want to retire next week
If your portfolio this year has been down 20% – 40%, then you are definitely risking too much money as a trader.
And the reason why you’re risking is because you’re trying to accelerate the success process.
I don’t know 1 trader who has made a fortune in a short period of time with trading. And that’s over the last 20 years I’m been in the markets.
To shake things up. If your portfolio is up 200%, then you definitely suck trading.
The good times do end. The bad times that will come will be 4 times the losses. And so you’ll only be in the game a short period.
When I hear some traders who are celebrating their major wins, I always try to help them preserve and protect their profits and show them how to go about it going forward.
But obviously they don’t listen, because their heads are high in the clouds (believing they have cracked the system).
3 years later, most of them are now back to their rat race jobs trying to make up for the losses they incurred over the bad times.
Trading might be short term per week. But overall it’s a medium to long term venture for your life.
Don’t treat it like a race but rather a marathon and you’ll have a chance at not sucking!
Reason #4: You haven’t endured the true market environments
Successful trading is also about experience.
Not just taking trades according to your strategy and improving on it.
You need to have seen and experienced the numerous different trading environments.
The retracements, the corrections, the recessions, the volatility, the gapping, the manipulation, the market circuit breakers and the overall movements of markets over at least 5 years.
It’s like a game plan. You need to have gone through hundreds of games, in order to know how to combat, defend and attack for future gains and wins.
That’s it…
So do you suck at trading?
It might be due to these four reasons:
Reason #1: You haven’t found the system that suits you! Reason #2: You can’t stomach losses YET Reason #3: You’re trading as if you want to retire next week Reason #4: You haven’t endured the true market environments
Save this article for a reminder for when you’re feeling you’re losing the game.
Then see if any of these factors could be the reason.
