What’s Holding You Back with Your Trading?
What’s holding you back with your trading? When trading, why do we sometimes do the wrong thing?
We have a strategy in place. A set of rules. Risk management guidelines, etc.
Yet we deviate.
It’s called the AKRASIA EFFECT. The state of acting against your better judgement.
It’s when you do one thing even though you know you should be doing something else.
It can relate to both procrastination and a lack of self control. Even though both these behaviours are in many ways opposites.
So why do we do it?
Mark Douglas stated that your personality comes out within you’re trading. This of course could be a positive if you are a patient or disciplined person. Yet not so good if you’re an adrenaline junky or a risk taker.
So your personality could be holding you back.
Good traders are generally humble and tend not to be braggers and chest beaters.
Which one are you?
Good traders are not looking for instant gratification. They have a more longer term risk / reward based approach that requires an element of patience.
Which one are you?
Process driven and organised? Or are you unstructured with a tendency to ad lib in a more carefree way?
Are you a terrible money manager preferring to leave book balancing for others to sort out? Or are you someone who is more aware of the flow of money in and out of your accounts?
The thing is, most of the time we know when we are doing something wrong within our trading. Especially as the behaviours being exhibited have generally been part of our personality for most of our lives.
We can retrain ourselves to embrace the traits needed to become a successful trader. Yet knowing what you are bringing to the table right from the start is at least going to help you become more aware during those moments of self sabotage.
It might be an impulse you have on a particular day to take a day trade when you are not a day trader.
It might be that you decide to move your stop position because you’ve suddenly had an epiphany that you know what the markets are going to do from one day to the next!
Let’s face it, we all know when we are doing the wrong thing and what is holding us back. Yet the AKRASIA EFFECT can still come into play when you least expect it. No one is immune to it. Yet you can make sure you are fully aware of it, and be ready to take corrective action whenever it raises its ugly head.
