Thursday, November 12, 2015

Just Stand Aside Awhile or is it Time to Give Up?

Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.
Thomas A. Edison
Have you ever heard a market trader state: "It's all a sham; there's no way to make money in the markets. There are just too many roadblocks. The odds are against you all the way?" If you have stated this or something similar to yourself it is apparent you are ready to quit, find a new profession. However it is at times like this that you must be resilient, it is not a time to brood. 

If someone tells you that trading the markets is easy, they are kidding you or themselves or both.
Trading is not easy; there is no Holy Grail, no quick and dirty way to make profits. If there were everyone would be trading the markets, now wouldn't they?  Who would be left to do all the rest ofthe worlds work? If you want to become a successful trader it is going to take sacrifices, commitment,and just plain hard work. Until you have become skillful and experienced the odds are indeed against you. If you approach trading as an amateur hobbyist you will come to believe it is all a sham. You will begin to convince yourself that trading just is not worth it; you will be finding reasons to just give up. If this is the way you are approaching trading and you are experiencing setbacks; it's decision time. Are you going to commit to doing the work required? If not then it is probably wise to give up and walk away.

That said, it is often hard to stay upbeat. There are times when nothing seems to click. Your trading strategies are not working, or you may have trouble getting an accurate read on the markets. This is a very common ailment. Depending on your past experience, there are times when the market does not seem to behave in the way you anticipate. Market conditions change, and unless you have a wealth of experience, you may simply not be familiar with the factors that are driving market action. It may just be a matter of standing aside until market conditions change. It becomes necessary to weather the storm.

Winning traders view unfavorable market conditions as a learning opportunity, a time to gain even more market experience. They objectively study the markets, trying to understand how the market moves and why. It is a time to think creatively and hone trading skills. It is at times like these that it is time to stand up and cultivate a fighting spirit. Instead of quitting; why not just rest awhile. It is all right to take a break. Even the most successful trader feels a little burned out at times. By resting, relaxing, and rejuvenating, you will find the strength to muster enough enthusiasm to tackle the markets again. And this time, you may find that the obstacles that once seemed insurmountable are now just minor bumps in the road to success. 

After you have taken your rest, review your plan and your risk management techniques, build up enough trading capital: only then should you address the psychological side of accepting losses. Begin to refute assumptions about risk and loss. Make a list of justifications that you can read after you have lost: "Losses are a business expense. It is like a personal investment in your trading business. It is like paying tuition in order to learn important trading lessons." These sayings may not work at first. It is hard to change over night. Practice! That's why you should actually write down these sayings about losses, and read through the list when you feel guilty about a loss. 

Trading often is emotionally draining, and if you are not careful, you can feel beaten and ready to quit. But rather than search for a way out, remember the reasons to stay. If you persist, gain as much experience as possible, and hone your trading skills, you will achieve enduring financial success.

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