When attempting a new challenge education and experience cannot be over emphasised or substituted.

However, I recently had some experiences that have taught me the importance of your state of mind when it comes to success.  Believe it or not – it is largely a case of mind over matter.

I started trading e-minis with a company called Traders International (TI). I had not traded on the share market before and was a complete newbie. TI have a pretty good online education structure as well as a good support system for day to day questions and needs for the complete beginner.

When I started trading in simulation and gained some experience, this means there is no financial risk associated with the trading, I did pretty well and was financially successful in my day to day ‘pretend’ trading.

I then switched over to live trading and realised my emotions were coming into my decisions and my trading suffered financially – this time for real!. At that same time there was also a change of moderators in the trading room. Moderator guide you (a hundreds of other close personal friends) through trades and recommend trades. I had become accustomed to the previous moderators and had learned to trust their judgement and trading calls. My trust was thrown into turmoil when there was a change in personalities. I started hesitating on some trades and jumping in too early on others. I started violating my trading plan and reversing decisions once they were made. Needless to say all this started to affect my financial situation adversely.

Hitting Barriers

It made me reflect on the issue: When I started trading I thought I will learn the ropes and a system, practice the skills and voila I will reap in the benefits from my hard work. Not so – I spent the time learning the system, I gained experience with the tasks – but I hit some personal barriers.

I observed a pattern forming: the more experience I gained the more I got into the thought pattern that I will be able to predict the markets next move, when the market went against me I stayed in the trade because I had to see the turn around and therefore didn’t cut my losses, when I made a gain I stayed in too long because there could be a ‘winning streak’ so I didn’t take the money out of the market.

Not Alone

All this is about ones attachment to money and the psychology of a winning attitude.  I have since read the book “Trading in the zone” by Mark Douglas. This is a must read book for any trader. I suddenly realised I am not alone with these emotions. Most traders go through some of these feelings and face the same hurdles that I faced. I felt a liberating sensation, knowing I am not the only one gave me permission to look at the emotion, analyse it integrate it into my trading plan as a genuine barrier to success. I understood and expected these emotions and was subsequently able to deal with them rather than ignore them and let then subsequently paralyse my decision making.

Fear and Greed

I love trading and the excitement that comes with it; but I learned to put it into perspective of my emotions of fear and greed. They both have to be reigned in and they are both part of my personality and my background. They determine my levels of risk and strategy. Taking my mind into account makes matters easier even in a challenge like trading.

I have a trading journal, previously it had mechanical entries of all trades that I took. Now it also includes the emotions that I go through that float through my mind when trading. I recommend you use a trading journal on a daily basis and read back over it on a regular basis.

Also join a trading group to discuss these feelings and emotions. Getting your emotions, excitement and fear out in the open is a wonderful way of acknowledging and being aware of those feelings.  I still struggle on occasions however I can now put it into perspective.

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