Written by Pat Bailouni
The One Thing Holding 95% Of Traders Back From Consistent Profits.
From an early age, we are taught to think that winning is 'good'. And losing is 'bad'.
When we won in sport it was 'good' we got rewarded, we got attention and recognition.
When we lost, it was 'bad luck', we got punished and reprimanded.
We are hired-wired to seek after the pleasure we have associated with winning and avoid the pain we have associated with losing.
Being in this dynamic of perceiving winning as 'good' & pleasurable and losing as 'bad' & painful is the single greatest thing that will stop you from achieving your trading success.
Here are a few reasons why:
- When inevitable losses come around (based on probability) we will feel the 'sting' and the resentment towards the losses.
- We fear missing out on (FOMO) what is 'good' as a trader so we jump the gun and get into trades too early.
- Whenever we are trying to avoid the pain of losing and seek the pleasure of winning, we are NOT objectively trading our trading plan - we are being pulled by our emotions.
As a trader the wisest position you can be in is seeing losing as neutral & winning as neutral, putting you in the best possible position to just execute on your trading plan.
Ultimately, us taking a 'losing' trade from the perspective of the market is neutral. We may choose to label it 'negative' because it challenges our priorities or doesn't meet up to our expectations.
So, if we are labelling a neutral event 'negative' we must be conscious of the downsides of that event and unconscious of the 'upsides' of that event.
Same in reverse for winning.
It's very possible to change your perception of losing and winning - so you see them as neither bad nor good. Just neutral events. Putting yourself in the best possible position to just execute on your trading plan. I help clients do this every day and I can help you too.
There is, additionally, one quick fix you can add into your trading to help with your emotional response to losing trades...
Be mindful of your expectations before getting into a trade.
If your expectation going into a trade is that 'ThIs Is GoInG To bE a bIg WiNnEr' and the fantasy you set in your head of all the profit you're about to make is very pleasurable. Then if the trade is a loss, by contrast, you're going to be devastated.
It's much wiser to put a position on and 'observe' what the market is going to do next - with no expectations.
MORE ABOUT PAT BAILOUNI
Pat Bailouni is a mindset consultant (trained Demartini Method Ⓡ Facilitator) and a financial market trader. He uses his understanding of human behaviour and psychology to help traders & investors gain an unfair advantage in the markets.