a backflip without actually knowing how to do it, would you do it? I guess not,
because you would have no certainty of landing on your feet, and you will also
fear of getting hurt. This fear of the unknown will hold you back.
If you ask someone
who does backflips on a daily basis, they would do it without any hesitation.
They have no fear because they know how to do it and they did it many times
before.
In trading is not
actually psychology that is holding you back. It’s your level of skills, knowledge
and experience. The more experience you have and the more conviction you will
have in your trading.
When you know that
even if you take losses along the way, you will still come up on top, you will
have no fear in trading. Your problem is actually not knowing if you are going
to make it or not.
I’d say that this
problem is more frequent with pure technical traders. That’s because with technicals
you don’t know why the price moves the way it does, when it should move in your
direction and when to exit a trade because it’s not working out as expected. Moreover,
there can be so many good-looking setups across different timeframes that you
won’t know which one to take and end up in overtrading.
Most “trading
educators” will blame psychology when their strategies don’t work for you. But
the problem in the end is not you. There are also trading authors that sold
lots of books on trading psychology, but they weren’t successful traders
themselves.
It’s like the
saying “if you want to become rich, write a book on how to become rich”. I’m
not saying that you won’t have psychological problems in your trading at all.
You will make emotional mistakes. It’s perfectly normal. We are humans.
What I’m trying to
tell though is that psychology is overrated in trading. And thinking that you
can become better with some books is nonsense. With more knowledge and experience
you will become better, and you will make less and less mistakes. It’s a
natural trading process. Remember though that you WILL make mistakes even after
decades of experience.
So, instead of worrying
too much about your psychology, focus on developing your trading skills. Your
psychological issues will be fixed automatically as you progress.
This article was written by Giuseppe Dellamotta at www.forexlive.com.