Have you ever noticed how quickly time flies? The months seem to roll on by and before you know it the year is almost over and you’re starting to think about all the resolutions you’re going to make for the new year ahead.
If you’re a long term losing trading this is the typical time that you re-energise yourself with the promise that this year will be different, you’ll dedicate yourself to trading and will finally crack it.
Is this a familiar story to you? How many of you reading this can say that you actually did it and are now settled into a profitable strategy?
A useful motivator is to look back over all the half completed trading journals you may have kept over the years, this can provide an interesting insight in to your approach to trading in general. There‘s a decent chance that you’ve attempted a number of different strategies and abandoned them at the first sign of trouble. How many of those have drifted slightly into drawdown and then the record keeping stops? If you’ve been diligent enough then you will have also made a note of the date these trades were taken, it may shock you to see how long ago those trades were taken!
Now is the time to take a long look in the mirror. During the time since those trades were taken how have you progressed as a trader? Have you moved forward and are you closer to being where you want to be? If you’re not yet consistently profitable then the answer would have to be no.
At this point, after acknowledging that you are effectively going around in circles, you have some decisions to make. Are you sure that you actually want to be in this business? Be honest with yourself about why you haven’t broken into the realms of consistency. There are a number of factors that could be at play here:
- Shiny Ball Syndrome – Are you being lured into trying new strategies because they make winning look so easy
- Are you becoming despondent and losing interest because you’ve suffered a string of losers?
- Are there things going on in your personal life that are stopping you moving forward? Maybe you’re time poor or even close relatives aren’t supporting you in your journey?
- Are you prone to making amateurish mistakes such as taking on too much risk, taking poor quality set ups, not having a plan, not journaling properly?
What is quite common, and it takes some honesty to admit it, is that you are scared of failure. What if you completely commit to something, maybe even publicly to friends and family, and then you fail? The very notion of this is enough to stop many people from taking that ultimate step of commitment. This applies to many areas of life and endeavour however our experience has taught us that it is prevalent in the trading community. It’s what keeps you going around in circles, constantly turning to new strategies and not applying yourself when you do ‘test’ them out.
Only you can answer these questions but somewhere in there you will have the answers as to what your particular problem is. Knowing the problem is only half the battle, committing yourself to fixing it will be the considerable challenge.
The key here is to not get caught up in the idea that you are taking action and therefore moving forward. It’s very easy to convince yourself that you are taking action by keeping busy however if you’re honest the activity you are undertaking might not actually be moving you forward.
Reading another trading book, or researching yet another indictor to apply to your charts might feel like you’re doing something constructive however it’s unlikely to move you forward. Committing to one strategy, journaling appropriately and carrying out self review is taking action and far more likely to yield positive results.
Rather than jumping from one random activity to another plan your week ahead, keep of diary of the things you wish to achieve, making sure it’s ‘action’ and not masquerading as action, and review it and the end of the week. How much did you achieve? If there were things missed then write down why. Aim to get into a cycle of consistency whereby you take regular action each week. This mentality of focusing of the process will over time move you to where you want to be, you might not even notice it happening.
Taking action is totally down to you, you can choose to do so or you can choose to avoid potential failure by going around in circles avoiding commitment. Which ever you choose the time will pass anyway so make sure you choose wisely.