The Brutal Reality Of Trading
Most of us want to succeed and we want it fast, this is just our nature. We live in the age of Amazon next day deliveries and content binges across social media, Netflix, etc.
However, trading is about being able to follow a systematic plan consistently over time. This consistent execution then translates to probabilities playing out in our favour over a fair amount of trades. Due to most traders wanting to succeed and do it quickly, combined with all the information and opinions flying around online, they begin forming unrealistic expectations about what they need to get to achieve what they want.
I know because I wasted over 2 years cycling through over 100 strategies, backtesting them all, trading them all and STILL losing money.
In practice traders think they need extremely complicated systems to develop an edge, this often leads to more room for human error. What's a fantastic catalyst for increasing the frequency of human error? Emotional stress. What are the markets great at? Generating extreme amounts of emotional stress!
The result? A lot of mistakes and a lot of losses.
To compound this, we are always monitoring our progress and comparing it to what we want to achieve. This is normal and healthy. However what's unhealthy for traders is how they measure their progress.
For most, trading progress is measured by profitability. However, profitability has so many components within it that if multiple elements are faulty, judging yourself on whether you are "profitable" or not is completely pointless.
For example, if you struggle with FOMO entries, not holding your trades to target and extending your stop loss, then just because you fix one of these, doesn't mean your results will be profitable. Your P/L could improve, get worse or stay the same. However if you conclude that you haven't made progress, you'll disregard the changes you made to fix that problem and you'll repeat this cycle over and over again until you look back months later, stuck on the same issues, hopping around from method to method.
I don't want to drag on, so let me just share an exercise I think is extremely important for traders to implement:
Make or find a very basic plan. Sometimes even finding a plan that barely works or even doesn't have an edge is effective.
Follow those rules for 1 whole month without breaking a single rule, forget the outcome.
This simple 2 step plan most will say they don't have the time for, but will waste years going around in circles making no progress. When I did this about 4 years ago, everything changed. I could go and slowly improve my strategy because my foundations were strong, I was focused entirely on my processes (backtesting, journalling, self review, ATA), not the outcome.
I really hope this helps you because it's always the ones who see things like this out that achieve results the fastest, your rush to "success" will blind you to it and keep you chasing the holy grail which doesn't exist.
Let me know if you have any questions !
However, trading is about being able to follow a systematic plan consistently over time. This consistent execution then translates to probabilities playing out in our favour over a fair amount of trades. Due to most traders wanting to succeed and do it quickly, combined with all the information and opinions flying around online, they begin forming unrealistic expectations about what they need to get to achieve what they want.
I know because I wasted over 2 years cycling through over 100 strategies, backtesting them all, trading them all and STILL losing money.
In practice traders think they need extremely complicated systems to develop an edge, this often leads to more room for human error. What's a fantastic catalyst for increasing the frequency of human error? Emotional stress. What are the markets great at? Generating extreme amounts of emotional stress!
The result? A lot of mistakes and a lot of losses.
To compound this, we are always monitoring our progress and comparing it to what we want to achieve. This is normal and healthy. However what's unhealthy for traders is how they measure their progress.
For most, trading progress is measured by profitability. However, profitability has so many components within it that if multiple elements are faulty, judging yourself on whether you are "profitable" or not is completely pointless.
For example, if you struggle with FOMO entries, not holding your trades to target and extending your stop loss, then just because you fix one of these, doesn't mean your results will be profitable. Your P/L could improve, get worse or stay the same. However if you conclude that you haven't made progress, you'll disregard the changes you made to fix that problem and you'll repeat this cycle over and over again until you look back months later, stuck on the same issues, hopping around from method to method.
I don't want to drag on, so let me just share an exercise I think is extremely important for traders to implement:
Make or find a very basic plan. Sometimes even finding a plan that barely works or even doesn't have an edge is effective.
Follow those rules for 1 whole month without breaking a single rule, forget the outcome.
This simple 2 step plan most will say they don't have the time for, but will waste years going around in circles making no progress. When I did this about 4 years ago, everything changed. I could go and slowly improve my strategy because my foundations were strong, I was focused entirely on my processes (backtesting, journalling, self review, ATA), not the outcome.
I really hope this helps you because it's always the ones who see things like this out that achieve results the fastest, your rush to "success" will blind you to it and keep you chasing the holy grail which doesn't exist.
Let me know if you have any questions !
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