While having a proven trading strategy and properly managing your money are key elements to being a successful swing trader, mastering the psychology of trading is an important success factor that is frequently overlooked.
I’ve already shared my insight on the 4 most dangerous emotions in trading, but the following guest post by Brian McAboy delves even deeper into the subject of trading psychology as he shares with you how to realize when your own actions are sabotaging your efforts in trading. Enjoy…
Understanding Self-Sabotage In Trading
Do you ever feel like you sometimes sabotage your own trading?
If you’re like most traders, you probably have and on more than one occasion.
One of the truly frustrating aspects of self-sabotage is that it’s right in your face.
You are very aware that you’re doing it.
You also know that you ‘re going to regret it.
Yet it happens anyway, and naturally the regret happens as you knew it would. Getting mad and chastising yourself often comes into play too.
If the sabotage was only due to one source, the problem might be easier to address and act upon.
However, there are actually four different sources of self-sabotage you must avoid.
And it doesn’t matter how many months or years of trading experience under your belt or how wonderful your system is; any of the four can totally wreck your trading account.
Which really stinks.
Fortunately, after you become aware of the four areas of self-sabotage, you can at least do something to protect yourself from their influence in your trading.
You can also enjoy some relief and ease up on yourself because nothing can crush your confidence faster than a heated session of self-berating.
When you understand what’s going on, you can be more productive by being a bit kinder to yourself.
Four Sources Of Self-Sabotage To Sidestep
Following are the top four areas of self-sabotage that directly impact your ability to keep a clear mind, make the right decisions comfortably and consistently, and act in a timely manner:
- Negative Personal Beliefs – Your self-image, personal beliefs about money, how much you deserve success, et cetera are crucial, non-trading related factors that will impact your trading results. Conduct an honest evaluation of yourself and correct any limiting and harmful personal beliefs that may be sabotaging your trading results.
- Living In The Past – Many harmful trading-related issues stem from past experiences you’ve had as a trader that haunt you and cause you to over-trade, hesitate, et cetera. Look forward and mentally approach each new trade with a clean slate to avoid problems that are quite directly related to your trading history.
- Lack Of Skills & Abilities – When you move into a new occupation such as trading and lack the proper, adequate preparation for the job, it WILL be emotional, stressful, and filled with mistakes. If you’re a newer trader, minimize this risk by soaking up as much knowledge as possible from other successful traders.
- Lack Of Tools & Resources – Have you ever played golf with fatigued clubs or tennis with a broken racket? If so, your results surely suffered because quality resources and tools are inherently necessary to perform well in any activity. Analyze the current tools and resources you’re using as a trader and determine where you may be lacking (trading education, proper software, size of trading account, et cetera). Armed with such knowledge, you will know how to fix related problems as they appear.
Each of the four areas listed above need to be averted or self-sabotage is likely.
If neglected, your subconscious just isn’t likely to feel that you deserve success.
In turn, this causes your mind to continually “correct” any success you do attain, to match your level of “deservingness.”
That’s why it is so critical that you treat your trading as a business and attend to all crucial matters in being a self-employed professional.
This includes, but also goes well beyond, creating a REAL and working Business Plan to make sure you achieve success and in a timely manner.
When you show trading the necessary respect and you have a process to follow, you can experience the quantum leap you desire in just a couple of months — instead of years.
* * *
About the Author:
Brian McAboy of InsideOutTrading.com takes an unconventional, yet highly effective approach to helping traders make genuine and rapid progress in their development as a trader.
Discover how to become a confident, consistent, and profitable trader in 60 days or less (even if you’ve never had a winning month) by attending this free webcast. Click here.