Checklist: Challenges that even the best traders face (part 1/2)
You are about to learn about the range of challenges and dangers that can make it difficult or even impossible for you to succeed in the market. Remember: it is believed that most traders do not make money! I want you to familiarize you with these challenges today. We will look at them in more detail later. Getting to know yourself and your "opponent" is the first step to overcoming them and achieving success.
These are challenges that, if not addressed properly, lead to losses. If you are already investing then you have probably encountered some of these problems. If not - everything is still ahead of you…
Challenge: the system
In addition to finding a good system and testing it, the main challenge is to learn this system to the expert level as soon as possible, because only at this level you can not only systematically earn, but also increase your position.
You can use here the methods which accelerate learning. The simplest are: make your setups simpler, make relevant study materials, setting right goals for the next stages of learning, post trade analysis. At further stages of development - at the near-expert level, it is also worth using the Japanese Kaizen improvement method adapted to your trading.
Challenge: Systematic Analysis
If you want to make money it is not enough to just trade. You need to conduct analysis of your trading in the right way. I've seen studies of traders that unequivocally show that long-term, only those who learn from their mistakes, make money.
Post-trade analysis is just a more fancy name for learning from your mistakes. If you don't learn from your own and others' mistakes then you just keep making them.
Challenge: Milestone - convincing yourself that you can… earn on the market
This is part of one of the areas of every trader's challenge - "Mind Management". In our research, we found that you have to go through a period of convincing yourself that you actually can systematically make money with the system you have.
If you don't spend enough time on this - you will usually look for another system. Your path to profits will lengthen or you may give up. Therefore, the next goal after mastering the basics of trading (system) is precisely to convince yourself that you can make money with what you have. Without this, you won't be able to increase your positions peacefully later. If this stage is not there - traders enter a turbulent period of struggling with themselves and with systems. They buy and try every now and then another system, another, another, ... , and so on endlessly.
Challenge: Mind Management (managing states of mind).
The idea here is to provide methods of working with the mind so that you know how to eliminate your weaknesses as a trader. Interesting fact: methods practiced by the most elite special forces like NAVY SEALS apply here. If you are serious about your work then you should know what to do when something bad happens around you, how to deal with difficult situations - after all, this is about your money, the result of your work, sometimes many years.
Mind Management consists of 3 levels:
1) The first is the level of the novice trader, who experiences all or most of the problems mentioned earlier. For the sake of argument, let me remind you that we approach them as challenges.
2) The second level is STM (Stable Traders Mind Basics and Advanced). Here the trader should know techniques for dealing effectively with stress, losses, glass ceiling. The time comes for techniques to "turn off" stress, control the internal dialogue, control the emotional stream and control the imagination function. The goal is to stabilize the mind and learn to actively manage it. The idea is to ensure that various states do not interfere with our trading.
3) The third level is MTM (Mature Traders Mind). Here the trader learns how to effectively deal with the extreme states that the market can induce in the psyche, and learns what elements of traits are worth working on in order to look at the market and trading the way very mature traders - the best ones - do. At this level, one of the goals is to achieve mental comfort in the market.
Challenge: Recognizing and responding appropriately to emotions
Greed, fear, hope, desire for a rematch, hesitation and confusion. Familiar? Some are unfavorable some can be favorable. It is important to know how they work, what they lead to and how to "manage" them.
Challenge: Stress management
Stress is unfavorable because it weakens your memory and reduces, the quality of your trading decisions, and this is a path to losses. There is a number of methods at our disposal, which have been instigated by the best, on how to deal with e stress in trading. These include, for example, controlling your state of arousal, managing your internal dialogue, or techniques borrowed from Navy Seals training. I will cover some of them in the future.
Challenge: Inner Strength - Weaknesses and Strengthening Confidence.
Let's start with the fact that each of us has some weaknesses. This is very human, we are not robots. The problem arises when someone wants to use these weaknesses against us. And that's how markets work. The best traders are aware of this and most often have learned it by trial and mistakes.
What is internal strength? What is internal strength in trading?
We will define it by listing a few situations and qualities that are necessary at that time:
- When you are waiting to trade you need patience.
- When you are entering the market you need courage.
- When you are in the market you need mental resistance to pressure.
To coerce yourself if you need to act or not act you need a strong will. In the long run, a strong will gives you self-discipline. In the area of "inner strength", the trader faces several challenges. If you are not self-confident, internal weakness makes it 9 difficult for you to place orders and then make it to the end of the order. Internal strength is not a sure recipe for success, but the lack of it is a sure recipe for failure.
If you liked this post, give it a boost 🚀 and drop a comment so we know to publish more for you. Cheers!
These are challenges that, if not addressed properly, lead to losses. If you are already investing then you have probably encountered some of these problems. If not - everything is still ahead of you…
Challenge: the system
In addition to finding a good system and testing it, the main challenge is to learn this system to the expert level as soon as possible, because only at this level you can not only systematically earn, but also increase your position.
You can use here the methods which accelerate learning. The simplest are: make your setups simpler, make relevant study materials, setting right goals for the next stages of learning, post trade analysis. At further stages of development - at the near-expert level, it is also worth using the Japanese Kaizen improvement method adapted to your trading.
Challenge: Systematic Analysis
If you want to make money it is not enough to just trade. You need to conduct analysis of your trading in the right way. I've seen studies of traders that unequivocally show that long-term, only those who learn from their mistakes, make money.
Post-trade analysis is just a more fancy name for learning from your mistakes. If you don't learn from your own and others' mistakes then you just keep making them.
Challenge: Milestone - convincing yourself that you can… earn on the market
This is part of one of the areas of every trader's challenge - "Mind Management". In our research, we found that you have to go through a period of convincing yourself that you actually can systematically make money with the system you have.
If you don't spend enough time on this - you will usually look for another system. Your path to profits will lengthen or you may give up. Therefore, the next goal after mastering the basics of trading (system) is precisely to convince yourself that you can make money with what you have. Without this, you won't be able to increase your positions peacefully later. If this stage is not there - traders enter a turbulent period of struggling with themselves and with systems. They buy and try every now and then another system, another, another, ... , and so on endlessly.
Challenge: Mind Management (managing states of mind).
The idea here is to provide methods of working with the mind so that you know how to eliminate your weaknesses as a trader. Interesting fact: methods practiced by the most elite special forces like NAVY SEALS apply here. If you are serious about your work then you should know what to do when something bad happens around you, how to deal with difficult situations - after all, this is about your money, the result of your work, sometimes many years.
Mind Management consists of 3 levels:
1) The first is the level of the novice trader, who experiences all or most of the problems mentioned earlier. For the sake of argument, let me remind you that we approach them as challenges.
2) The second level is STM (Stable Traders Mind Basics and Advanced). Here the trader should know techniques for dealing effectively with stress, losses, glass ceiling. The time comes for techniques to "turn off" stress, control the internal dialogue, control the emotional stream and control the imagination function. The goal is to stabilize the mind and learn to actively manage it. The idea is to ensure that various states do not interfere with our trading.
3) The third level is MTM (Mature Traders Mind). Here the trader learns how to effectively deal with the extreme states that the market can induce in the psyche, and learns what elements of traits are worth working on in order to look at the market and trading the way very mature traders - the best ones - do. At this level, one of the goals is to achieve mental comfort in the market.
Challenge: Recognizing and responding appropriately to emotions
Greed, fear, hope, desire for a rematch, hesitation and confusion. Familiar? Some are unfavorable some can be favorable. It is important to know how they work, what they lead to and how to "manage" them.
Challenge: Stress management
Stress is unfavorable because it weakens your memory and reduces, the quality of your trading decisions, and this is a path to losses. There is a number of methods at our disposal, which have been instigated by the best, on how to deal with e stress in trading. These include, for example, controlling your state of arousal, managing your internal dialogue, or techniques borrowed from Navy Seals training. I will cover some of them in the future.
Challenge: Inner Strength - Weaknesses and Strengthening Confidence.
Let's start with the fact that each of us has some weaknesses. This is very human, we are not robots. The problem arises when someone wants to use these weaknesses against us. And that's how markets work. The best traders are aware of this and most often have learned it by trial and mistakes.
What is internal strength? What is internal strength in trading?
We will define it by listing a few situations and qualities that are necessary at that time:
- When you are waiting to trade you need patience.
- When you are entering the market you need courage.
- When you are in the market you need mental resistance to pressure.
To coerce yourself if you need to act or not act you need a strong will. In the long run, a strong will gives you self-discipline. In the area of "inner strength", the trader faces several challenges. If you are not self-confident, internal weakness makes it 9 difficult for you to place orders and then make it to the end of the order. Internal strength is not a sure recipe for success, but the lack of it is a sure recipe for failure.
If you liked this post, give it a boost 🚀 and drop a comment so we know to publish more for you. Cheers!
