Is It In YOU !

Would we be Humans if we dint have emotions?  But we also know emotions in markets are lethal, then how do we deal with this?  What makes suckers out of 95 % plus traders in the financial trading profession? This 95% club has members coming in and going out, in other words it is not a life time secured membership in the 95 and 5 percent clubs, the membership resembles a revolving door. This 95, 5 phenomenons are very real and you have to choose which club you want to be in, day in and day out.

Trading is a zero sum game and for those who question this should contemplate this ‘at a given price one trader is selling and one trader is buying, so both have very different reasons for doing that and at that level it is ‘zero sum’ and one of you has to loose, but when you add the time element both of you could lose or both could win too’. Someone has to loose in trading for someone to win, that’s the broader fact, and of course there are other nuances.

The critical part in being a successful consistent trader is execution. The greatest hurdle in that…? It is Your MIND, that gremlin of a being that sits in the skull, which is the hurdle. Why does it seem like we are on a self sabotaging mode more often than not?  We tend to get out early in a profitable trade and hang on to losers. Well, the simplest answer is, we have a burning need to be right and on top of that we want to know everything or rather the brain wants to know everything. I have had quite a few revelations on this front about myself and every time i faced with this dilemma of “I gotta be right? Or profitable“, slowly but surely i chose to be profitable. It is just a matter of choice and adapting.  The other biggest hurdle, “Need to know“, is an inherent boon and bane of human existence. If we weren’t curious we wouldn’t be the human race and no progress, or whatever you might term this “expansion of the possibilities in the material world “, would have occurred. The same curiosity slows our progress as a trader.

Trading endeavor is a mental exercise of attempting to tame your fear and greed. Add to that the effort of trying to know every reason why a price moved or who is causing it. You really think you can do yourself any good by knowing more in a space where it is always changing and the deciphering of human behavior on top of that? NO. Often times i get this question from some asking to “show me how you arrived at this entry trigger “or “i gotta know about your technical indicator setup, else how am i going to learn “. Well simply put you have a choice to make, would you rather be smart and just make money and know that discipline is all that matters or want to take the long and painful route of trying to understand analysis, market opinions, fundamental news and whatever else is out there? Sure both are perfectly fine. It is just a matter of choice.

History has shown one thing consistently and that is, every black box system which promised success based on back tested results failed. They tend to fail because they cannot provide profitable trades during corrective markets. Markets are 80 percent of the time in corrective phases and only 20 percent of the time trend and during trends even a novice can trade and you don’t need any system. Mechanical trading systems lose money for the traders. Mechanical systems are the trading systems designed with pure technical considerations and based on some patterns with no consideration to the social mood and mass market psychological considerations which cannot be gauged by traditional technical indicators. These systems end up making money during trends and losing all of it and more during the corrective phases. The biggest loss will be your faith, your self confidence which you cannot put a price on.

Trading is about thinking in probabilities, what do we mean by that? , When a price is at a certain level, the simple answer would have been, it could go up or down or stay right there. Well, the answer is a little more revealing, the price could go up and down and then up and on and on and the possibilities are countless.  So, if we were to take trades we need to make an educated forecast as to where the price could “probably” go and if so what am i ready to risk to know if my forecast will work. If you know the third part, “what could be my reward”, then you are all set to be a trader.  Know the “Rules”, which includes the knowledge, lay of the land etc …then know the “Risk to Reward” and finally know always when to “Quit”

Every individual has a certain personality trait they come with, some schools of thought talk about changing yourself, well good luck with that. The inherent core personality will hardly ever change, if that changes then why am I, Me and why are you, You?  . The way i see it… know yourself and use that as your strength. Align your nature, profession and goals, NOW that is harmony! This is exactly how you should approach the market too. Know the nature of the market or product you are trading, align yourselves with its nature and then there will be harmony.

When majority of the traders start out they bring their personal or professional history along with them and expect markets to behave in an organized decipherable fashion and there is no bigger blind sight than that. That would lead you to “Looserville“ and hence all those riches to rags to broke stories. Understand that at any given time there are millions of traders putting in trades based on their beliefs. So it is their “beliefs” that they are trading. We are just a part of that bigger organism called “Market”. How do we know then which way the market will go? , the simple answer is”I don’t know and I don’t Care“ and even more soothing and stress relieving answer is “I don’t even need to know“. Now, that right there is liberating isn’t it? If i can still make money without even knowing where it is going to go for sure… why should you care where it goes?

Me personally, if someone had enlightened me on this i would have chosen the first option and saved myself many years of frustration, hundreds of thousands of dollars and all the years of additional stress i took. However the journey did help me in many ways, but it is a painful and long one. Reason is when we start opening that Pandora’s Box, the “natural curiosity” and then “being right” comes into play and you will have a big mountain to climb. You gotta have lot of will power and loads of cash and support from the family to become a successful trader.

In my case, i was a stubborn ass, i was an obsessive compulsive kind of guy, i was very successful outside trading. But when i walked into trading, the glass house and my illusions were shattered, i was shown how trivial, me and my ego were. I was very fortunate to have a wonderful support system to keep me going. I have an amazingly forgiving and loving family, my wife, my brother and my son are the three people who always stood by me.  I was resilient in spite of the disgust i felt every time my account got wiped out. I have seen days when my account got wiped out in 1 hour on a trade. I am talking about tens of thousands of dollars.  I have been in tears, but withstood all that and now when i see the happenings in the market it looks so surreal and i can separate one trade result from another pretty quickly.  In the markets, we are alone; there is no support mechanism like we have in our social structure. No one comes to your rescue, there are no cops to call for help, none what so ever. You have to write your own rules and follow them. That takes a “Can’t beat them Join them” kind of flexible mind set, yet with in a framework of strict discipline. Discipline, is nothing but knowing how you would behave in any given situation and behaving exactly like that and in your own self interest.

Trading for living to me is about Freedom. I have an independent mindset and it works for me, you decide ”IS IT in YOU!“