Ever wondered why trading in general looks so easy but happens to be unachievable by most people? I am going to give you an explanation that may shock some of you but if you think about it for a while, it makes so much sense.
Trading may be different from Gambling in many ways, and I deeply believe in this after all the years spent in order to master it but they have something in common which is the fact that they are very likely to generate an addiction in people who start performing it on a regular base.
What you are doing when trading is opening yourself to an outcome where you may possibly make money, and almost as importantly, get the pride from having been right which will both generate happiness signals in the brain. You are then short-circuiting the reward path of your brain by generating artificial rewards on a repeated base or at least on a much more frequent and faster base that what your brain is used to in normal life events. In the opposite, when you lose, it generates frustration as the outcome is not the expected good feeling. This makes you feel the urge to replace a trade in order to get back to that feeling of reward. This compares to a gambler pressing the spin button on a slot machine. The difference is that it has been wide spread that casinos are addictive and it also carries a rather bad reputation. The problem with trading is that it gives the image of a very prestigious thing to do and no one ever mentions its addictive component.
If you don’t believe in the above, just ask yourself this very simple question: Why do weekends suddenly feel so bad when they used to be the best days of the week?
So now the question: Why is it so hard to master it?
Well, obvious, because you are fighting against an addiction which is known to make people behave in an irrational way.
Think of some of the beginners mistakes that are mentioned again and again:
2 Revenge trade
3 Overconfidence after a series of win
4 too big lot sizes (tendency to increase the lot size gradually)
Of course not all people get hooked at the same intensity but I believe that everyone gets impacted at different levels which are strong enough to make it hard to stay in control and master it.
Now, I am not saying stay away from it, but I just want to make people aware of how big the enemy they have decided to fight is.
This explains why it is almost all about mastering your emotions: this is the point you get rid of the addiction and only then will you start making money consistently and without suffering. Keep this in mind and give it the time, it’s the only way.
I believe you have three sorts of traders:
1 The ones who never get rid of the addiction or get rid of the money before the addiction (very common group of people)
2 The ones who get to the point of making consistent return but somehow never manage to get rid of the addiction and suffer all the way
3 The ones who finally get rid of it and make consistent money with no pain
(It could as well be a path and everyone is set to finally reach number 3 but at various speeds.)
Personally, I have been stuck in 2 for too long and decided that it was time for me to at least take a long break until I sort other things in my life but most likely to find another way out in life.
I wanted this to be my last contribution to a forum on which I used to spend a lot of time and which I really enjoyed reading on an almost daily base even thought I have been mostly silent for the last year or so.
I wish a lot of success to everyone and hope that the above will raise some sort of healthy awareness.
Je suis Charlie