Psychological issues that affect your tradingPsychological issues that affect your trading can lead to financial ruin.  In my last two posts I talk about how you can change the psychological issues that affect your trading using the laws of attraction, which incorporate positive thinking.  While some traders may have heard of positive thinking or the laws of attraction, they may not have fully understood how it works so in this article I am going to explain more indepth.

5 Psychological Issues that Affect Your Trading

  1. You expect losses.  If you are expecting a loss, then naturally you get a loss.  What you expect is typically exactly what you get.  Why?  Because the conscious mind is instructing the subconscious mind to execute losing trades.  What most traders fail to realize is how powerful the subconscious mind truly is.  According to research, the 10% of the brain we use is the conscious portion.  The remaining power lies within the subconscious. The gift that we have and fail to use is unlocking the power of the subconscious in a positive way.  For example, when you are terrified of taking a trade, the subconscious reinforces this “thought” and makes you even more fearful.  While your positive statement may have be I will not be fearful, a more powerful way of stating the same thing is “I am not fearful”. What’s the difference?  Power in words.  Read the statements out loud again and ask yourself which one sounds more powerful and active.  Chances are it will be the I AM statement.  When using “I will” statements, it needs to be followed by a more powerful word like NEVER or ALWAYS to create a more direct expectation.
  2.  You restrict your results.  I cannot even count how many traders want to make just 10 or 20 ticks a day. “If only I could make 10 ticks a day, I could survive.”  While some traders may feel this is developing discipline, discipline is achieved by having a trading plan and abiding by it.  It is not in restricting your profits.  While you may have a rule within your plan that states, “When I am in the green, I will continue to trade until I have a losing trade”, and you adhere to that – then that would be discipline. However, simply stating I will stop at 10 ticks is limiting your profits on the good days and it is also instructing your subconscious not to make too much money.
  3. Lack of gratitude.  Perhaps the markets gave you a nice profit today but are you thankful?  Are you thankful that you could read your charts?  Are you thankful for the skills and knowledge that you have developed so far?  Unfortunately in today’s world, there is a lack of gratitude.  We focus instead on what w didn’t get like, “I only took $200 out of the $400 move.”  Even if you made $25, be grateful because it is $25 you didn’t have before you started.  List 100 things you are grateful for — you will be surprised at how hard that one task is.
  4. Failure to Believe.  Traders, new and old, sometimes simply fail to believe that they can ever be successful.  Yet, with the right mindset everyone can be a profitable trader.  You need to believe that you are.  If you have a losing day, it’s okay.  Tomorrow is a new day and you can overcome whatever losses you have incurred.  If you put as much effort into believing that you can be a profitable trader as you put into beating yourself up, success would be yours.  Everyone makes mistakes — it is how we handle the mistakes that make us successful traders or one that gives up.
  5. Lack of Persistence.  Profitable trading takes persistence.  Even professional traders, who have been in the business for years, have bad days.  It is their persistence and passion that drives them to be at the same spot, doing the same routine the next day.  We don’t give up, quit, or concede to the markets.  We may exit a trade because conditions changed but we don’t quit.  Instead, we persist and have confidence.  Although we may have had a bad week or month and we may look for ways to learn from it, we do not walk away and give up.  We come back stronger, more focused, and more persistent than ever.

You must overcome these psychological issues that affect your trading before you can become successful.  There are not any shortcuts but a step by step process that over time will increase your profitability in the markets.