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So you weren't born to be a trader, now what?
An excerpt from the following live event:
"A Habit of Winning," featuring Tony Peterson
You’ve tried and tried, but this whole trading thing seems to be escaping you. You feel like a big idiot. You may have concluded that you are doing something wrong. That might true, but it’s not what you think it is. You probably think if you lose a trade, you did something wrong. So, you try not to do that same “wrong” thing again. Your criterion for success is: if you win a trade, you did everything right, but if you lose a trade, you did everything wrong. That’s how you start judging what you’re doing. So, what happens next? This is where the trouble starts.
When most of us started trading, we immediately got hooked. We saw initial success, and we were filled with excitement. We saw an entirely new life ahead of us if we could just learn this trading thing really quickly. After all, it should be easy based on the performance of other people in trade rooms and online forums.
Those initial successes that you had just don’t seem to be happening anymore. In fact, things start on a downturn for you. The harder you try and the more excited you get about the potential, the more you just seem to get hammered; you just can’t seem to do anything right. Your unrealistic expectations start getting the better of you. Doubt and fear become your trading partners.
Many of us like to golf or at least have tried it. Remember when you first went golfing and had a lot of fun? Maybe you didn’t even know how to hold a golf club, but your buddy took you out for a round of golf and you had a blast. You sucked, but you still had fun. You thought, “If I get better, golf would be even more fun.” But if you think back, the reason it was fun was because you didn’t have any real expectations of your golfing capabilities. You just wanted to go out and hit the ball around at first, but it was so much fun that you wanted to play more, and then you wanted to start working at your game. Soon, the following expectations started to creep in: “Well I’ve been working hard at this; I should be a ‘scratch golfer’ by now or at least a low handicap golfer.” Golf becomes a real source of frustration for you. You’ve seen those guys break their clubs and throw them in the lake. For me, golf was a constant source of frustration, yet I kept working at it because I was chasing the fun and thrill that I had early on when I had very few expectations.
So, you start approaching trading with the expectation and the anticipation that something bad is about to happen. You consciously think, “I can do this.” You want to be positive. You tell yourself, “I know what I’m supposed to do. Today I’m not going to make any mistakes. I’m not going to do anything stupid. I’m just going to stick to the plan.” You try to do this consciously, but your subconscious is telling you to expect what you usually get out of a trading day. You are fully prepared to have a big losing day yet again. This is not what you want, but subconsciously this is your expectation. You’re hoping you can end the day as a winner so you can have that rush, that elation that you have every now and then, that thing that brings you back to trading every day. I might have played a round of golf and scored a dismal 120, but there were those one or two shots in the round that were just perfect. A pro couldn’t have done it better. Those are the shots that keep you coming back for more. It’s the same thing with trading. You have that day where nothing goes wrong. Then you think, “Okay, because of that perfect day, I know it’s possible. I’m going to keep chasing this dream to earn an income from trading.” We want to be winners, but subconsciously we’re totally prepared to be losers.
Here’s what I’ve been leading up to: Be patient. Please understand that what I’m talking about now is more important than charts and indicators. What we’ve got to do is change that doubt into the belief that you can do it: not talking yourself into believing, but ACTUALLY believing. That’s not necessarily a good characterization either. There's a difference between believing and knowing. Let’s take it a step beyond know. When you can prove it to yourself consistently on a regular basis that you can do this, then the sky’s the limit. That’s a huge hurdle for you to get over—that “doubt hurdle”—and most people get stuck there. I’m going to show you exactly how to get past the doubt hurdle. This is something that you can easily start doing. I’m going to show you how you can prove to yourself that you can do it. I know many of you have serious doubts that you can do it. Maybe you’re on your last few days or weeks of trading with very little money in your trading account. You may feel you’re very close to the end of your attempt at trading. Maybe you’ve decided that this trading thing is not for you, that you weren’t born to be a trader. I’ve got news for you: not one of you here was born to be a trader. I wasn’t born to be a trader, nobody was, but every one of you has what it takes to be a trader. I hear this all the time: “Oh, man, you were my last hope. I was just about to quit.” I’m going to teach you how to prove to yourself that you can be a trader.
This doesn’t mean re-motivating yourself after a bad trading day or giving yourself a pep talk: the old “trade like a machine” thing, “trade without emotion,” “get back in that game, rededicate yourself.” It also doesn’t mean reprimanding yourself or making promises to never do those things that you did before that were keeping you from being successful. I’m assuming that many of you are here because you aren’t getting out of trading what you want to get out of it, so you’re looking for answers. How does it work for you when you give yourself a pep talk? We all do it. Maybe it works for a little while. Maybe it works for a day or a week, or even a couple of weeks, usually not more than that. Unfortunately, we are conditioned to be impulsive and to be emotional. We use that in our everyday life so much that we feel that we should be able to do that in trading also. You can’t convince yourself not to have emotions. Don’t even try to talk yourself into trading without emotions or trading like a machine. You can’t do it! I could tell you, “Please, stop having emotions for 10 seconds.” You can’t do it. You can’t do it in trading, either, although that’s the prevailing conventional wisdom, right? You've probably seen it, heard it, or read about it in a lot of different places.
We’ve got to create new habits. Rather than trying to motivate yourself with a pep talk or a giving yourself a good “talking-to”, you need to get rid of these bad habits that are causing the emotions. You can’t talk yourself out of having emotions, but you can create new habits that make those emotions separate from what you’re doing. You can’t create a good habit by talking yourself into a good habit. Also, you can’t just stop bad habits and start good habits; it doesn’t happen like that. It’s a complete process of conditioning. This is what I’m going to teach you in a few articles. This is what you will be able to start working on. This is all actionable. I’m going to tell you the step-by-step way to start replacing bad habits with good habits.