Trading Psychology: The Mindset Of A Losing Trader

"The only place where success comes before workhand. This conflicts with their ability to trade. They
is in the dictionary." -Proverb-tend to be perfectionists wanting to be right all the
There are two types of men in this world. One thattime. Trading is not about being right. It is about
falls and one that stands up after he falls. In NLP ormaking money.
Neuro-Linguistic Programming, there is no such thingsJumping The Gun
as failure. A failure is simply classified as a feedbackHow many men do you know that act before they
and every feedback is a lesson to help you learn andthink. A form of balance is needed when trading the
improve. There are many hurdles a trader mustmarkets. However, many new traders lack patience
overcome to become successful. A winning traderand discipline. They get too caught up emotionally in
views each hurdle or setback as a step towardstheir ideas that they often do things just to regret
success.rushing in at the end.
The losing trader on the other hand does not holdThese type of traders have a hard time following
this belief. Ed Seykota said it best.their trading plans. They may understand what it
"A losing trader can do little to transform himself intotakes to trade successfully but their lack of discipline
a winning trader. A losing trader is not going to wantand self-understanding prevents them from doing so.
to transform himself. That's the kind of thing winningThey believe that eventually things will turn out
traders do."alright. They often play on a tilt after a loss and will
Harsh but yet so true. Success only comes to thosetrade recklessly with their capital.
who want it badly. Nothing in this world should beChange Is Good
done half-way. Losing traders refuse to takeMany people are too comfortable with their current
responsibility of their actions. They prefer to blamesituation that they dread change. It is common to
external factors for their mistakes and lossses. Insee couples who are unhappy with each other remain
NLP, in order for a feedback to become a lesson onein a relationship because they are too used to being
must take full responsibility of his action.together. Some people associate change with fear.
We All Start Off With A DreamThis attitude does not help in trading. Learning is
I think men in general spend half their life dreaming.easier than unlearning. When something does not
Without a dream, there is no thought. Withoutwork, one needs to change what he is doing right
thoughts, there is no action. However, too many menaway. A trader needs to be flexible and hold an open
spend their time talking and thinking. What is requiredmind.
is action.Characteristics Of A Losing Trader
Losing traders think similarly. They are so used to1. Undiscplined
thinking and not acting that when the opportunity2. No money management
knocks at their door, they are unable to answer it.3. Unprepared
Thinking traders usually turn to trading systems;4. Overtrading habits
tweaking every indicator they have to find the5. Easily tilted
perfect signal. The problem is they spend too much6. Does not trade with probabilities
time jumping from one system to another that they7. Trades emotionally without controlling: greed, hope,
are never able to become good at one methodology.fear, and euphoria
Thinking traders need to know the outcome before8.