Why am I losing in trading? We can try and provide you with some insight as to why that could be the case.
Welcome to our day 19 challenge. Today I wanted us to reflect a little on the ebb and flow of the markets and the opportunities that we are presented with. The following article by Van Tharpe is a great explanation of both the challenge and opportunities that we have with the ever changing financial markets. It should help you understand the inner thoughts you have of Why am I losing in trading.
Imagine yourself floating down a river, only you don’t know that you are. You do, however, notice that when you move in one direction, with the flow of the river, you move rapidly. When you move in another direction, against the river, you move slowly or not at all. In fact, when you go in that direction, you seem to put out a lot more effort just to stay in place. Your life becomes a struggle. It just seems to push you in another direction. Feeling miserable, you fight against it. But it doesn’t help. You still seem to move only in one direction—with the flow of the river. Why am I losing in trading? Could this be part of the answer ?
Most people prefer to struggle against the river. They try everything they can think of to go upstream. All solutions like this—going against the flow—have the same result: frustration. If you were in the river, what could you do to make your life easier? One solution would be to get out of the river. But that would be giving up. There is only one easy solution—to acknowledge or accept that the problem has nothing to do with the river. The river just is. And it moves downstream and nothing you do can change that. When you realize that the problem stems from you, then the solution is obvious—just relax and flow with the river. Clearly if you are feeling that this could be “Why am I losing in trading”? you could be getting closer to changing your story.
Buy High, Sell Low? Why am I losing in trading?
One of the oldest adages in market psychology is “Don’t be afraid to buy high and sell low.” Let’s analyze what that means. If the market price is high, then the market is moving up. Those who are afraid to buy because the market is too high are fighting the flow of the river. It is possible the river may change direction, but you cannot predict if it will by determining how long it has been flowing in a particular direction. It may continue in the same direction for an unspecified length of time. Then again, if the market price is down, it also indicates the direction of the flow of the river. Those who are afraid to sell, once again, are fighting the flow. Do you find yourself saying to yourself Why am I losing in trading?
Why do traders resist the flow of the markets and why do they ask themselves why am i losing in trading? They do so because they play psychological games with the market. The most common game involves not being willing to give up what you perceive to be control, the need to be right, although you have no control over the market flow. So why do traders ask themselves Why am I losing in trading?
When you are struggling with the market, the struggle becomes all consuming. You don’t realize that you are struggling with the market. Instead, you find yourself always looking for some solution to overcome the struggle. The struggle obscures the obvious solution:
Letting go of the Why am I losing in trading mentality.
For example, suppose you have a tendency to be in a perpetual market bear, always expecting the market to go down. For you, every little turn in the market is evidence that the market is turning. As a result, you always go short and consequently, take a beating. You repeat the process, over and over, until the market actually turns down. With each transaction the struggle against the flow of the market intensifies for you.
Even worse is the trader who refuses to accept the inevitability of eventual loss. The market moves against each position the trader takes, but he refuses to go with the flow and refuses to accept the loss, no matter how small, they then ask why am I losing in trading? It is an affront to the trader’s ego. As a result, he/she refuses to accept it and the loss becomes larger. The bigger loss is even harder to take and the trader again refuses to accept it. The struggle continues until the loss becomes so overwhelmingly large that the trader has no choice but to take the loss and then ask again why am I losing in trading.
The solution to the problem of resisting market flow is to realize that the problem has nothing to do with the market. The problem stems from you, the trader. The market is not going against you personally. The market is simply moving. Whether you go with the flow of the market or struggle against it, the market will continue to flow, taking you with it one way or another. Market flow is bigger than any individual trader. The question is whether you realize how you are creating your struggle against the market. When you push against the market, the market seems to push back. But the market is not the problem. Does this help answer of Why am I losing in trading?
The trader’s struggle with the market is the problem.
For today’s session please complete the following tasks:
Listen to your 10 minute visualization recording;
Record a daily comment below;
Record any feelings, ideas, and thoughts in your personal trading journal.
Have a great trading day. Contact us for more information
Team GMT Futures & FX
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Trading involves the risk of loss as well as the potential for profit. Please be advised that any advice provided by Key Equity Education Pty Ltd including this video on Why am I losing in trading is general financial product advice only, and your personal financial circumstances have not been considered in its preparation. Please consult your licensed financial consultant to decide if trading in Securities, Derivatives, & Foreign Exchange is suitable for your personal financial situation