I have been lately caught up by my impulsive trading. Most traders know what I mean when I talk of taking your profits too early or getting out of a trade too late. The fact that I am spreadbetting is of course not helping as I have the cost of the spread to take into account. I have also moved from Esignal to Tradestation ( these are the platform most used by individual traders around the world). As I am not a computer wizard- alas- it takes me quite a lot of time to get used to my new tools. I also discovered that despite the fact that I am a woman, I am not good at multi tasking while trading. I need to focus on my screens only and not let anybody break this state of pure concentration. I don’t even start to think of failure, what I have to do, if the new indicator is worth it- I just check my parameters and look for anything that might stop my trade in its tracks. I heard someone comparing trading to hunting today – there is alot of waiting, stalking the charts and then going for the execution. The image is quite right.
There are several stages in trading. The first one is when you discover that if you don’t study and learn to analyze a market, you will never make money in it. Although it seems to be common sense, one would be surprised to find out how many traders don’t bother to go through this process. They are not shy about asking questions though, but expect what they think are more qualified traders to answer them. I don’t mind sharing what I know, but I am getting increasingly fed up to have people asking me about a problem they have and when I give them what I think is the appropriate answer ( such as : ” Have you tried to read this book?”- hey, I am not going to do all the work for them, but I’ll be glad to spare them the research), I am being told: ” Oh, yeah, this book…I actually read that one, which is more recent from the same author, so I guess it covers it all anyway…”. Yeah, right. We all know that writers keep writing the same book over and over again. One could wonder how they sell another one once they have written the first one. Really. I am not talking about the fact that when they take the book, they read it in one hour ( they basically read the title of the chapters) and then they wonder why they haven’t learned anything. The list of all the sins one can commit can be very long. The truth is that most good traders did their research themselves. They may have had a lead, someone who introduced them to the market and showed them how it work, someone who was an example, but sooner or later, they had to make their own decisions and discover what worked for them. In short, they did what it took to get there.
Once the analysis, even basic, has become ingrained, there is the next stage. It is exciting, but if one has its head on its shoulders, it is also scary; you play with your money ( or most of us do). It means that losing can cost you dear. If the analysis is one thing, the mastering of the trade is another. It is not enough to have an idea of the strategy one can adopt, it is time now to fix rules about entries, exits, stoplosses and all the reason for which a trade is going to be taken – or not. The lessons are usually costly. And there are two different things going on here; one is all technical- you have to fix the limits of your theories. What are the points you can or can’t ignore, what invalidates your strategy or your trade, what can stop the trade, what can actually change the trend and so on. The other thing is emotional. You never really know how you are going to feel when the trade is on. The emotions can be quite strong – and sometimes contradictory. You can from joy to panic within seconds, from calm to nervous, from anxiety to relief. Most men I know prefer to have an automatized system in order to avoid these feelings. I don’t know many women in the job, but they seem to prefer being in control personnally. It doesn’t really matter what you prefer as long as you do it. But this is what happens to a lot of us. I am quite trustful that it actually happened to all of us traders – and probably more than once. You look at your screen, you see your trade happening and you don’t take it. You keep staring at the screen and you feel hopeless while you watch the trade going even further that what you would have expected it to do. Now the issue is that this is one more step forward ( congratulation, you know how to spot a good trade), but also a step back ( it is called ” analysis paralysis” and all sort of other names and is the equivalent of the white page for a writer). And it is also the moment of truth. This stage can last a bit. But if you can’t shake it, then it is game over for you because you will slowly but surely loose faith in yourself. And what a trader needs most is confidence in his abilities.
The last step is the Holy Grail. Some have it mistaken for a magical strategy that would give infallible results – and snowballing benefits and gains. But the Holy Grail of trading is much more simple. It has to do with consistency. It is about learning what suits you – the market that works for you, the indicators you know like the palm of your hand, the strategy you’re most comfortable with-, learning how to build the right state that allows you to trade with your full capacity, learning how to manage your winnings and your losses and making money on a regular basis. Then, when you have reach this goal, and you are able to repeat it ( almost) every day, you know that you are there. Now you only have to do it again and again- and keep it going.
You think it is that easy? well you are wrong. A trader’s job is never done. Cycles appear, things change, people psychology gets in the way and the news are where the wind blows. Let’s not talk about new tools, new indiactors, new strategies. But the bottom line is that traders are people who end up learning the greatest lesson of all: their ego should be left at the door. The only way to be right is to be able to follow the trend and if possible, anticipate it. So there isn’t really a right or wrong- there are just the facts. Traders have to keep an open mind at all time.
I know one thing. Great traders do. The others….They keep not opening the book.

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