I have read in a lot of forums and online articles where many good intent people offer their perspectives on how to trade. The essence of it usually comes down to strategy, experience and discipline. I am in no way saying that these folks are wrong, but I have found for myself that the root cause that makes trading so difficult is mainly due to a seldom talked about or recognized aspect of trading which is called the amygdala hijack. It literally filters everything we see the moment we decide to open a position in the markets with REAL money, regardless of size or amount.
I have found that trading and money is akin to survival, it affects the part of our brain called the amygdala or the reptilian brain. It is an evolutionary knee jerk reaction that triggers pain or pleasure, fear or hope. So if one wins a trade, there is great euphoria, followed by fantasies of wealth, if one loses, there is great pain, regret and frustration, usually followed by great doubt, anger and revenge (trading). At this point, everyone usually blames themselves for feeling what they feel. I lost money, I'm nervous to trade, I waited to long, I jumped in too quick, etc. When in truth there is a somewhat invisible mechanism at work triggering each individual.
On a cognitive and intellectual level, you can say do this or do that when standing on the sidelines looking in, kinda like yelling at the players when watching a game. However, when an individual is IN the game, that objective perspective is replaced by a very deep and total animal sense of survival, there is very little to no subjectivity. That is why it is hard to see the market clearly when one has something at stake in it. You are mainly just focused on how near or far the market is from your entry point. The part of your brain that involves cognition (reason) is completely cut off by the amygdala, which is now taking over and trying to keep you alive.
So to be successful at trading, a person has to have a great sense of self awareness and emotional intelligence more than anything else. It is a fallacy that most people believe you have to be good at math to trade. That couldn’t be further from the truth. Trading is mainly pattern recognition (along with a solid strategy and money management), which is very straight forward, in truth 90% of trading it is being able transcend your emotions when they arise. Note, that I didn’t say remove, get rid of or ignore your emotions.
Trying to say, “don’t feel fear”, or “be emotionless”, is like trying to say don’t be frighten when watching a horror movie, or don’t get aroused when watching an adult movie. That is not to say you can’t subvert it, you can, BUT first you must recognize what the situation is and realize what you are getting into. Then, once you know the playing field, you can mentally prep yourself before getting into it and be ready for when the emotions DO arise. This takes effort and lots of practice.
The word discipline is also used a lot in trading, which I find to be a bit of a misnomer. It is as if you stepped on a nail, you feel an intense amount of pain in your foot and then someone says to you "will the pain away, it is only a mental reaction...if you can't do it, then you aren't disciplined enough". Silly right? Yet when you Google "trading" and "discipline" there is so much dedicated to this subject as if one has the ability to simply will away these deeply evolutionary responses. And if you can't will away these emotions, then it is implied that you are weak, a newbie, or undisciplined. Regardless, it is not a very encouraging tone.
So for me, the majority of trading is to dissociate with the emotions that arise as you watch the rise and fall of the markets. It is the ability to very gradually realize that what your emotions say is happening, meaning fear of loss (aka death) or hope of gain (aka safety and immortality), does not actually have any meaning. It is also the one pointed belief and burning desire to rise above these deep set responses - that to me is discipline.
That is why the people who have traded and succeed after a certain period of time (regardless of whether they are pros, retail traders, phd.s or high school dropouts) usually say that making money is rote, meaning mechanical, even boring. That is because the natural, instinctual sense of life or death that is hardwired in the amygdala is not kicking in to give one great highs or intense suicidal lows. They have managed to overcome or learned to disassociate from it, hence are able to see the market clearly and not affected by the sense of " I am losing!" or "I am winning!".
So if a trader does not recognize this very root sense that arises during trading, then no technique, strategy or any amount of academic education will equate to success in the markets. You can spend years trading, testing your strategy or trying new strategies after each fail, and you will still be met with this somewhat impenetrable wall. You will look at those who succeed and wonder what they have that you don't and eventually the pain will be too unbearable and you will give up, consoling yourself that you have other talents to be put to good use.
The reason so many people don't succeed at trading is not because they are stupid or incapable, it is because they have to first identify what really is at the heart of their mistakes and then ALSO have the ability to change it.
The amygdala hijack reflex is so evolutionarily hardwired into our systems that it is very hard to transform it, it's like learning to write cursive calligraphy with your left hand when you've been a righty all your life, BUT it can be done! So to those of you who are willing to dig deep into your own selves, then this will be a journey worth taking, as it will not only affect your trading account and financial health, but your overall outlook as a human being, as in the end, you will not be as swept away by the tides of fear and hope as most people are.
Good luck to all of you!!