Hello fellow koalas!
Today I will like to write an important aspect of becoming a professional trader! RESPONSIBILITY!
The major part of this article that I’m sharing with you is the words of a respected trader regarding psychology of a trader’s mind, Mark Douglas.
The books I’ve read, pro traders like Alexander Elder, Steve Nisson, Mark Douglas between others, they tell us about the importance to keep good records of your trades, winning trades and losing trades both alike. This should become your own guide to trade because without a plan, you catch yourself in a successive random winning and random loosing pattern, thus producing automatically fear and anxiety. Furthermore, you create for yourself the possibility of loss based on the random choices of the market’s behavior for whatever trades you want to take!
Like described by Mark Douglas: “If you can’t define your own behavior and that of the markets, you can’t learn how to repeat your wins or prevent your losses” Wise this isn’t it? In his book The Disciplined Trader: Developing Winning Attitudes – a must read, he explains to us the importance of a trading plan and your attitude towards your mistakes.
He feels that If you do not plan your trades and follow it religiously, you will be catching on a psychological trap of refusing to plan and to create structure for your trading activity. This is so that you can avoid taking responsibility for your results.
Taking responsibility is something extremely difficult to do. We don’t live in a society that has a highly evolved concept of the growth process and as a result, we learn to become very intolerant to mistakes!
Taking responsibility is a function of self-acceptance. You can measure this degree of self-acceptance by how positively or negatively you think of yourself when you make what you perceive as a mistake. The more negatively you think of yourself, the greater your tendency to avoid taking responsibility so you can avoid the pain of your harsh thoughts, thus generating a fear of making mistakes. However the greater the degree of self-acceptance you have for yourself, the more positive your thoughts will be and the greater the degree of insight you will be able to extract from an experience, instead of generating fear. The more self-accepting you are, the easier it is to learn because you are not trying to avoid certain information.
Therefore planning your trades, following your plan and taking notes from whatever the result will help you understand yourself and your style of trade! Learning to take responsibility for your mistakes will teach you when is the right time to enter a trade because you’re free from fear and confusion as you have already planned your trade and calculated your money management! You learned and accepted your error made before and now you can prevent repeating it!
I hope you enjoy this article and learn with it. The Disciplined Trader: Developing Winning Attitudes, is a must read for every trader. Personally I learned a lot with it.
Green pips for us all and you can buy the book via the link below if you are interested to read more!