In answering the above question, I suggest you consider the following: As a trader we are not only responding to the market, we are also responding to our beliefs, our perceptions, our expectations, our thoughts, and our fears. In fact, how you respond to your internal state will have a much greater impact on your trading than anything else (assuming you are not a complete beginner and you have reasonable trading method). Do you agree?

If you agree, that means by extension you also agree that the path of a trader must involve the development of self-awareness. And what you need to know is self-awareness for a trader not only involves the ability to be aware of your internal state, but it also involves an understanding of how it impacts your behavior, which is where self-management comes into play. This is what holds most traders back. It’s not so much about intellectual ability or chart analysis. If it were that simple, there would be many more profitable traders.

Most traders lack effort in developing self-awareness, or they don’t know how to manage themselves in spite of building self-awareness. Now, I suspect many of you reading this think you know what your “issues” are (“I over-trade” ,“I get too nervous when holding a winner” “I hesitate too much” , “I have a hard time with losing”, “I get too impulsive”, etc) and therefore you believe you are self-aware. However the real work begins when you try to understand why you have those “issues”. Without such an understanding you are destined to repeat the errors that come with those “issues”.

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