Coming up with a profitable trading method is the easiest part of trading. Unfortunately this is where people spend most of their focus, yet are unable to become consistently profitable.
Once they realize that trading is 100% psychology, and not about studying the market, only then they can progress.
This shift in thinking is what is required in order to be consistently successful, however people don’t want to hear this. All they want to know is where they can learn about the “holy grail system” that “makes” the most money. They continue on developing their systems and donating money to the market, failing to grasp that it is the trader who makes the money and not the system!
They continue repeating the same emotional mistakes over and over because people’s mindsets are wired to associate pain with losing, and with the need of being right. Unfortunately these characteristics make it so difficult to trade successfully. Until people change their thinking patterns and their beliefs about what actually constitutes successful trading, they don’t stand a chance of becoming consistently profitable traders.
There is no need for luck in trading at all, all that is needed is understanding the dynamics of successful trading, and then working on the different psychological aspects of trading, which encompasses risk and money management, self analysis, internal control, and being able to interact with the market from totally different perspective than the rest of the people. The so called perceived “randomness” and “unpredictability” of the markets that screws the psyches of most people is actually professional trader's the best friend.
If markets would behave in a very predictable smooth manner, then every Tom, Dick and Harry would be able to make money and the movement, volatility, and chart patterns would probably disappear and the markets could potentially become smooth transactions and our edges would be gone (at least on shorter timeframes, and we would have to become investors).
I believe that we should be very grateful for the fact that becoming consistently profitable is difficult for most people because they contribute to the pot and their trading emotions can be seen in chart patterns.
Once they realize that trading is 100% psychology, and not about studying the market, only then they can progress.
This shift in thinking is what is required in order to be consistently successful, however people don’t want to hear this. All they want to know is where they can learn about the “holy grail system” that “makes” the most money. They continue on developing their systems and donating money to the market, failing to grasp that it is the trader who makes the money and not the system!
They continue repeating the same emotional mistakes over and over because people’s mindsets are wired to associate pain with losing, and with the need of being right. Unfortunately these characteristics make it so difficult to trade successfully. Until people change their thinking patterns and their beliefs about what actually constitutes successful trading, they don’t stand a chance of becoming consistently profitable traders.
There is no need for luck in trading at all, all that is needed is understanding the dynamics of successful trading, and then working on the different psychological aspects of trading, which encompasses risk and money management, self analysis, internal control, and being able to interact with the market from totally different perspective than the rest of the people. The so called perceived “randomness” and “unpredictability” of the markets that screws the psyches of most people is actually professional trader's the best friend.
If markets would behave in a very predictable smooth manner, then every Tom, Dick and Harry would be able to make money and the movement, volatility, and chart patterns would probably disappear and the markets could potentially become smooth transactions and our edges would be gone (at least on shorter timeframes, and we would have to become investors).
I believe that we should be very grateful for the fact that becoming consistently profitable is difficult for most people because they contribute to the pot and their trading emotions can be seen in chart patterns.