Fear Itself

Since the start of this blog back in July 2009, we have posted a couple thousand entries that mostly pertained to the technical aspects of trading. I have personally pruned 1000+ aged posts in the past that no longer received traffic, and it’s past time to do that same thing again.

Now it’s time for us to shift our focus in this blog to the mental => emotional side of trading. Without question, this is the highest hurdle to navigate and overcome. Anyone can purchase a working, viable, iron-clad guaranteed edge over the markets. We offer that for sale to everyone right here.

I’ll be sure to post trading results from our educational programs for the sake of validation that we somewhat know what we’re talking about. So let’s talk about what it takes inside our minds to bridge the gap from unprofitable to consistently profitable traders 🙂

The Learned Curve

Beyond the world of support and resistance and entries and exits lies the gray areas that exist in our minds. Or maybe we should say min(d)efields? Sometimes it seems like that is more the case than not. Successful, profitable trading is simple. Very simple when you boil it all down. But we all make it complex enough to elude most who give it a try.

Your belief system or lack thereof, the confidence in your own mind or lack thereof will certainly dictate your inevitable failure or success. Having worked closely with a number of traders and likewise the general trading population thru the years, there is no doubt in my mind that most people who pass thru this profession never for one moment position themselves for success. Most people set themselves up for failure before they even fund the ill-fated trading account with cash.

Hope To Fears

Most aspiring traders enter this profession with equal measures of hope and fear. They hope that their dreams and aspirations will come true. Deep down, they hope success finds them quickly and easily. Instantly would be nice… sort of like going to a casino and walking out with millions $$ of the house money, somehow.

Unfortunately, most people who attempt the trading profession do so from a position of weakness. They expect it to be a quick path to success. They hope it will be a simple process of clicking in some orders and extracting cash from the market. More aspiring traders than not actually need it to be a quick-success path to profits. They are in between jobs or professions, they have limited amounts of capital or a strict timeline to succeed or move on to the next pursuit.

Inwardly, in the back of our minds, all of us know deep down that quick, easy wealth from the markets is no more viable than quick, easy wealth from anything else in life. We all know that if trading were so easy to perfect, why then do 90+% of all who try, fail? That realistic fear coupled with various self-doubts lingers in the back of our minds only as long as the euphoria of hope for quick success can stem its tide.

Sooner than later, said traders have experienced the natural win/loss cycle of trading. Unfortunately, the loss side is heavier than the win side. So their initial hopes and dreams in the forefront of mind slip to the back, while initial fears and doubt firmly take over the front. Said trader(s) still have hopes and dreams that they cling to, but fear and doubt now dominate their every thought.

It is from within this struggle of hope and fear that every, and I do mean EVERY obstacle and roadblock and ups and downs between success and failure, exists.

Eliminate The Noise

If you stop and think about it, this profession of home-based or individual trading is pretty darn tough to validate. Everywhere you look there are signs and evidence of failure. Visit any message board, most blogs and most twitter-style feeds… pretty much anywhere individual traders gather in the public realm.

For the most part, what do you see? Struggles, turmoil, mixed results, up & down emotions. What don’t you see enough or even very much of? Consistently profitable performance.

I’m going to tell you why there is so much visible failure and so little visible success in the public realm. Openness and secrecy for each is based on pure human behavior alone.

Many if not most of the public blogs and posts in message board forums are from traders who are struggling towards attempted success. They are seeking validation, self-discipline, support and acceptance from the general masses. Some believe that acting successful leads to being successful. Some believe a public diary will help keep them self-honest inside their trading day… as if an anonymous alias talking to an anonymous audience is some sort of accountability.

Regardless, there are many reasons for struggling traders to go public and share thoughts which in turn are their emotions. Unfortunately, there is nothing for you to learn from other who are struggling that can move you towards success.

Focus On The Positive

Profitable, successful traders have no reason to publicize their results, unless of course they are in the business of trader education. Other than that motivation to share profitable performance, there is no reason to do so at all… and human nature does nothing without self-reward involved.

I have been told many times thru four years this blog has been published that what we share in here is motivating to others. Well, I can see where consistent performance could be validating the potential for anyone to succeed. Likewise, I’m on record in here and elsewhere thru the years stating that it’s my opinion ANYONE who works long enough, hard enough and most importantly smart enough… can succeed in this trading profession of ours.

What you and I and everyone else who is working hard towards continual greater success must do is focus on the positive. Tune out all the fear and doubt and negativity around us. Fixate on the possible, not the improbable. Seek out success and dissect that.

Realistically Speaking

There are reasons most trading educators don’t post personal results, and that is not because they aren’t profitable. It is because they aren’t profitable every day of their lives, and sometimes not even for an entire week or more.

It’s a funny thing, human behavior is. You can take a group of people who have never done anything but lose money to the markets from day one and show them a net profitable trader offering to help. Do you know what the general reaction too often is? Can’t be true. Must be false. Or faked. The only real successful traders out there are too busy making millions gazillions annually to bother with lowly human life forms.

But the reality is, most successful at-home traders are making five or six figures annual. Why? Many reasons for that. Real living expenses being one. Trade size and liquidity limitations are another. Apart from the ES and perhaps bonds, there aren’t any other futures symbols where large block size can be nimbly traded without slippage and/or partial fill challenges. To grow from one CL or TF contract to five contracts is not a big deal. But to go from five to fifty is a completely different universe of executions.

Realistically speaking? An at-home futures trader would do very well for themselves making a solid five figures to six figures per year on average. For that they need to be profitable at least half the days, with wins being bigger than losses of course. Some losing days, lots of losing trades mixed in. Wrong decisions, judgment errors, mental lapses, hardware and software issues dealt with. Toss in the occasional outlier market move against an open position thru pure random chance of poor timing, and you describe the life & times of an at-home trader in reality.

Does that seem like a tall order to you? Or more like an impossible feat?

Then you’ve come to the right place. We are here to help. Stay tuned for more

For more daily updates from Austin, visit his blog at Coiled Markets.