What it takes to succeed in trading
It is interesting to read some of the emails I get from readers of the blog. Some people are looking for perfect course for traders or are wanting to find someone who will baby seat them while they try to develop their trading skills. The short and simple answer to that is they are unlikely to find it. But more importantly the quest itself tells you something about likelihood of that person succeeding in trading. It shows lack of self efficacy beliefs.
The most important determinant of your success in trading or in your personal life is your self efficacy beliefs. I have talked to several successful traders and interacted with them on regular basis and one of the most compelling reason why they are successful is they have high self efficacy beliefs.
Self efficacy beliefs is the biggest determinant of your trading success. Unless you work on self efficacy you will find many inhibitors and will be constantly dissatisfied with any method, guides, videos, or instructions, or site. You will constantly chase new methods, new scans, new claims, new gurus, new newsletters, and so on.
Psychologist have found that self-efficacy beliefs help determine how much effort people will expend on an activity, how long they will persevere when confronting obstacles, and how resilient they will be in the face of adverse situations. The higher the sense of efficacy, the greater the effort, persistence, and resilience.
Profitable trading involves all these challenges. You need to put in lot of effort to understand and internalize key concepts like equity selection, entries, exits, risk, risk/reward and then put it all together. In the process you will have several setbacks and false starts. If you have enhanced self efficacy beliefs you will persist in face of such adversities. If you have high sense of self efficacy beliefs then you will spend time mastering trading software, and mastering trading setups and make them work. Absent that you will abandon your effort at first hint of failure.
Learning to trade is not an easy task. It is one of the most challenging task you would handle in your life. Some are lucky and they find success instantly. For rest it is a big battle.
People with a strong sense of self efficacy beliefs approach difficult tasks as challenges to be mastered rather than as threats to be avoided. They have greater intrinsic motivation. That helps them to engage for long periods in activities and helps them overcome repeated obstacles. They do not have discipline problem.
Your self-efficacy beliefs also influence your thought patterns and emotional reactions. This is critical in trading. You should not be overly excited by profit on single trade and same way not get depressed by loss on single trade. At the end of the day trading is probability game. High self-efficacy helps create feelings of serenity in approaching difficult tasks and activities and activities where outcome is uncertain.
If you have low self-efficacy beliefs then often you believe that things are tougher than they really are. As a result this belief that fosters anxiety, stress, depression, loss of discipline, over trading and a feeling of being lost. You are unable to solve your own trading problem.
Psychologists believe that self-efficacy beliefs influence the level of accomplishment that one ultimately achieves.
The goal for new trader should be to enhance your beliefs. The goal should be to constantly work on your self efficacy beliefs. Goal should be to challenge your existing beliefs through testing and past winners studies.
If you do that then you will achieve your trading goals. And you will not need this site, or alerts, or alerts with sound effect.
Everyday think of how you can enhance your trading related self efficacy beliefs.
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