Overcoming our Trading Fears

trader psychology

Overcoming our Trading Fears

Operating in an unstructured environment. Trading requires you to operate in an environment with few rules and little structure. Most people need order and rules for guidance, it is the way their lives have been structured since childhood.

Confronting your inner self is very difficult. Standing alone is uncomfortable because it makes people do one thing that most feel uneasy about, which is taking responsibility for one’s actions. Most people like to delegate responsibility, blame others and make excuses when they don’t succeed.

Most people simply cannot face the simple truth that they are responsible totally for the consequences of their actions. People tend to make excuses and reasons why things are not working out for them.

Overcoming our trading fears when a person can go for a job interview and convince himself that he did not get the job due to a personality clash with the interviewer. A attorney can prepare for months for before an important case and convince himself he lost because the jury was biased against him.

A salesman can convince himself that it was his product that was not up to scratch and not his presentation

The trader, however, has nowhere to hide when interacting with the market. He is really competing against himself, and the market will judge every day how well he is doing. Overcoming our trading fears in confrontation with our own personality, our strengths and weaknesses graphically exposes, is something most people would rather avoid.

 The work ethic does not apply

The normal work ethic of time, effort and reward that is common in most job situations does not apply in the markets. For example, a factory worker putting in overtime and working extra hours is rewarded with more money. As a general rule, the greater the effort we put in, the greater the reward we expect. However, no such work ethic exists with the markets.

Overcoming our trading fears trader can spend years creating a trading system, only to see his equity wiped out in a matter of days. A trader, however, may quickly develop a simple system and reap huge profits.

Whether we acknowledge it or not, we normally believe that we deserve money under certain conditions where we have to expend a certain amount of effort to get our reward.

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