Because we all get to this point in our game…
Since I was a child I have always enjoyed taking things apart. Breaking them down into their smaller prices, in an attempt to create understanding of how it worked. In an attempt to understand how I work as well… This statement will help you understand the following.
To be successful in any aspect of life I have come to note that definiteness in belief, or “being sold” on something is critical. Being sold on oneself’s abilities; physical or mental… I was not sold on my own abilities whith trading, I traded with self doubt. The following journal is me selling myself on being a successful trader, if you have something you would like to add, so long as it is constructive, go for it! I know that won’t stop some people…
After a series of losing trades recently I asked myself the simple question of why do 95% of retail traders fail, and only 5% succeed?
This led me to ask myself a series of questions. I do not remember the exact questions I asked but a basic idea follows; these are taken against common themes derived from many different sources.
Cites
So I Noted the following after searching around for a bit, you can find a gazzilion bajillion forum posts about these things broken into many different levels but here they are in their most generic form.
System/Methodology is an all too common theme, Everyone notes how too many traders focus on finding a system that is accurate to some extent than they do on risk management. But if this is an obvious observation, why does it remain so important for us?
Time is a common theme found amongst successful traders, If you run through forums you will also see many “experienced” traders expounding upon this on different levels, from times of day to the timeframes on their charts. Why is this variable something of such importance?
Psychology of the trader is something that comes across in many different forms from chasing trades to switching strategies before they have a chance to work or are understood, down to entering positions outside of their strategies bounds. What level(s) of this are actually the most quintessential to success?
Risk Control/Risk Management is something that everyone sees as of particular interest. The idea is simple but can be made complex if desired. The more money you risk than you stand to make, the more you will lose over time; call it compounding interest on the debit side of accounting. Why if this so important, if it the main cause of failure why does it persist? Is this tied to Psychology?
Many will read this and begin to ask different questions than the ones I have asked myself above, the idea is the same though, we are trying to break things down from one level to the next Whether it is through a conscious clearly defined objective, or subconscious thinking that drives us to find answers we are willing to accept.
The modus of acceptance can be different depending upon the person. On a higher level this could be explained as: An academic arrives at a hypothesis of somethings operation, he is unwilling to accept what knowledge is available at his level so he conducts research to his set of standards based on his perspective. This research has a conclusive (based on his perspective) result. Now at a lower level of thinking we have many who will not question this conclusion, “it has been proven by someone else with much more experience.” is a commonly accepted idea. But if we had understanding at the same level, or even a higher level than this “more experienced” person would we still agree? Or would we have a deeper understanding of an aspect they they failed to make a correlation to?
A few statements I noted while going through things, prompted an idea; Listen to how and what successful traders say when they speak about different ideas. This concept comes from the an idea I have formed that people who ease into things slowly and do not make correlations easily will have a hard time communicating how different ideas tie together to create a bigger picture. For these people, the idea of cause and effect is not an established model for implying a bigger picture based on the smaller components. They understand that certain ideas are of importance to overall success, but they may not be fully conscious of to what extent or importance this is so, this can also be relative to their perspective of life in a more general context as well.
The following posts will explore the above posed questions in greater detail, breaking them down further; using whatever evidence available or potential to support or disprove these accepted ideas.
Again this is an effort to sell my subconscious on the idea that I have enough knowledge to be successful in any trading arena. If this information can do the same for anyone else, all the better!
Anyone want to come for the ride?
