About a month ago, I put out a survey called "Trader's Mindset." If you haven't taken it, I'll link to it in this post.
I'm happy that almost everyone in the class has completed the survey, and I've been able to see the results. These results will help me better craft the message and help with what most people are having issues with.
I'll be doing a video series called "Trader's Mindset" very soon, where I will go over each of the questions most students have issues with.
As you know, I believe very strongly (and the evidence is on my side) that the most important part of trading is psychology. Your Trader's Mindset is what will take you to the next level.
I took note of the questions that had the most "incorrect" responses. Although as the survey stated, none of them are actually "incorrect," they are what is true for you at the moment. You should not answer with what you think is the right answer, you should answer with how YOU feel about currently about that answer, and then work on that.
Two questions tied for the #1 spot.
"I feel like the market is against me personally," & "I often find myself feeling negative when entering a trade."
Let's talk about those..
Before discussing them, I'll reiterate the point that came out the book "Trading in the Zone." A traders most important belief is a believe in the randomness of the market, and the consistency of their strategy over time.
You must come to believe that statement if you're going to be successful as a trader. There is NO strategy that is 100% effective. Not a single one. If there were, we'd all know about it, and there would be no volatility in the market. I'll challenge that with one strategy that has a 100% predictable outcome every single time.. That is, doing nothing. You'll never lose money with this strategy. Is also a fact that you'll never make money with this strategy.
Since there is no strategy that results in a win 100% of the time, then you must believe in the randomness of the market. If the market is truly random, then you do not know what the outcome of any given trade will be. You can simply just find a strategy that pays off over a large enough sample of trades, and continue to trade it accurately.
I feel like the market is against me personally..
On it's face, I'm sure we all understand that this is obviously not true. No one in the market knows that you exist, and they don't know that you have or have not entered a trade. Of course this means that from a literal standpoint, the market cannot be against you personally.
This will have the same as the response to another popular question which came in at #3, which was "I find myself feeling like I'm a victim of the market."
You are not a victim. The market is not against you. Both of these feelings are natural, but they both have the same problem; They remove the responsibility or capability of you to take control of your own situation.
Through all the troubles I had as a trader, I can honestly tell you that I've never felt this way. I think that's why I was able to overcome most of my problems, and stay the course through the learning process. One of the most hopeful things I ever realized was that the reason I wasn't making money as a trader was my own doing. It was due to mistakes that I was making. This is not always easy to admit, but I've always been able to admit it.
Anytime you go through a streak of losers, or if your entire career so far has been only losers, it's imperative that you pinpoint what YOU are doing wrong. I'll say this again; No one in the market knows or cares about you. Everyone is making decisions based on their own good, and looking for the same outcome as you. Since this is the truth, your problems are your problems, and they are your doing. There is a way to make money, you just aren't doing it. Believing that you are a victim, or that the market is against you, will only lead to an unwillingness to confront your own mistakes. If you don't confront those mistakes, you will never fix them.
I often find myself feeling negative when entering a trade
This one tied for #1. More than likely, this is a result of having several losing trades. That's my assumption, but of course if you are a heavily negative person, you could be negative for no apparent reason. Otherwise, it's likely because you have made more losing trades than winning trades. Why is that my assumption? Well, If you've taken 10 trades, and 8 or 9 of them were positive, you probably wouldn't be feeling much negativity when entering a trade.
I experience this problem on a daily basis. This one comes from that same belief we talked about earlier. That's the belief in the randomness of the market, and the likelihood that our strategy will pay off over time. If you believe that you are simply taking a trade based on probabilities, and that probability is in your favor, then you would feel excited to be in another trade. It doesn't matter what the result is! If you believe that your strategy will end up positive 70% of the time, then you should want as many trades in that strategy as possible.
If you are feeling negative about a trade, maybe you haven't lined out the strategy well enough. Maybe you aren't following it properly. The most important thing you can do is practice. Find a strategy, and implement it. Practice it first, either by only buying one share, or by using a simulator. Perhaps just follow along and trade "mentally" at first. Become flawless at the strategy, and see how you would have done if you were trading. If you see a major difference between how you would have done, and how you are actually doing, then it's not the strategy, and it's not the market. It's you. Don't take that personally, but make it a personal problem. The problem is yours to fix. If you feel negative when entering a trade, maybe you aren't ready to be trading yet. You should feel the same way you do when you flip a coin. If you call heads and then flip, do you find yourself feeling negative about your choice? No. A coin flip is random, and we all know it. Guess what? So is trading.. Treat is as such.
The rest of the questions will be addressed in the upcoming videos under the new tab "Trader's Mindset." As always, we're available for any questions you might have!