Delivered by a Trader with 20-Years’ Experience --- Des W Woodruff
First, please give me the grace to make a brazen comment.
Well, studies show that you probably should NOT be trading in the live markets.
Your odds of success are as low as being a consistent winner in the casinos. The fact is, you will always have wins, but the odds of consistent net-positive profit gains are just not with you. Those “wins” that you experience keeps you gambling.
I’ll make this notion even worse.
Your mental makeup as a human being is likely to be the biggest sabotage to your success.
As human beings, we are not intrinsically wired to trade well. Our brains are created to assure survival, not to make money. For example, traders run away due to fear and run towards greed. Said another way, it’s hard to buy when everyone else is selling. Likewise, it’s equally difficult to sell your positions when they are making you money.
Intellectually speaking, traders usually understand what to do to make money in trading (ex. buy low; sell high), but they demonstrate the opposite and fail to measure up in their trading.
The odds of you being successful as a trader are sobering low.
Below are four (4) tips to fix your mental game and increase your profits.
Tip 1: ‘Mad Scientist’ Suicide
Most traders act a lot like how a mad scientist would act.
Chances are this is you. Your crazy decision-making in trading seems like correct-thinking to you. However, your decisions prove to be anything but clearheaded thinking. You demonstrate a chaotic methodology. You try every new trading idea under the sun. You test every new concept that you learn about. You try all the new indicators; you match them together striving for better results; you read all the books and try all the guru systems; you listen, learn, and experiment with anything and everything you can find. Your understanding becomes a boiling pot of chaos and confusion. Your Frankenstein of a trading system cripples your effectiveness in your trading. Losses become a certainty.
These mad scientists always wash out of the market.
What can you do? Find a trader who you trust/respect—someone with many years trading experience and someone whom actively trades in the markets. Find that person and learn their system—and learn it better than anyone else. Start there. (We highly recommended a mentor. Don’t let this get by you.) Let this step be the beginning of your foundation as a healthy trader.
You will have to mentally divorce yourself from your own trading ideas and beliefs. This will be the hardest obstacle for a mad scientist. Eight out of ten of them will find a way to lose money using a winning system. …let that sink in.
Tip 2: Out in ‘Left Field
For clarity, the idea to savvy successful trading is to begin your trading off with a winning trading system. Let’s assume you have been formally educated in your trading and have a great basis to start your trading. Now you want to optimize your trading system to better match who you are as a trader and to make more money.
To do this, the best thing to do is test one specific change in the system’s plan at any one time to validate whether it is a good change, or bad. Once it’s deemed to be a profitable change, keep it and test the next change.
On the flipside, the worst thing you can do is bastardize your winning trading system by making multiple changes while testing your system. If you do, you quickly become disoriented to what is working and what is not. When this happens, your trading methodology drifts off into the proverbial left field—somewhere near Jupiter. When it does, you find yourself becoming that revolting mad scientist once again. Don’t do this.
Tip 3: Map it or Trash it
The fastest way to stay grounded in developing as a trader is to map your plan and do so in painful detail. In other words, establish a foundational trading plan that will guide your every step. The problem is that most traders don’t have a trading plan and will barely even give the notion a nod.
It’s psychologically impossible to optimize and test your trading system without being bound by a written plan. You can only successfully test via a trading plan. If you make an excuse for yourself to NOT create and adhere to a trading plan, the best trading advice that I can give you is to trash the very idea of you being or becoming a trader. This will save you much money and unnecessary heartache.
Tip 4: Be Judged and Like It
This will be the hardest thing for you to do--- and for several reasons.
First, we need to make several assumptions before proceeding on. Let’s assume that you have been formally trained, you do have a proven trading method that you adhere to, you are faithful to trading that method, you do only test changes to that method via a singular tweak (before testing more), and you are a “good” student—one who follows instruction well.
Assuming the aforementioned, the single best thing you can do for your trading (at this juncture) is to allow another trader to review your trades. You need a rock star trader to review your trading.
The reason you need to have your trading judged is because trading in darkness breeds contempt. In other words, people who trade without accountability quickly take on the “island mentality,” and their peril is in the belief that they are self-sufficient due to their intellect. This is mad scientist thinking.
These traders fully believe that they can figure out their trading problems on their own. This is a trap that even the brightest individuals fall victim to.
The answer is to find a trader who has many years of trading experience and is an active trader. Get him/her to analyze your trades. Give them permission to be brutally honest with you and have them judge not only your profitability but your adherence to your plan.
This will be very hard for you to do because: 1) it’s virtually impossible to find a successful seasoned trader who is actively trading, 2) these traders will probably not want to do this for you, 3) your ego will more than likely not want someone else looking at all of your trading inadequacies, and 4) any lack in your resolve to be disciplined will cause you to fail at doing the hard work required to find someone to judge your trading skills and performance.
Everything you need to know is in the above text. It has been edited down for quick reading consumption.
Oh, one last thing.
The easy solution to all the problems highlighted in this article is found in the Grok Trade Mentorship program.
Des Woodruff (aka d-seven)