A contributing factor to the failure of many traders is our belief systems.
Beliefs define realities, help in differentiating certain experiences, and even sponsor certain actions. Your belief systems define your actions and when it comes to trading and investment decisions, we literally act based on our beliefs about market conditions.
Many belief systems are directly against the success of many traders; whether you are aware of these beliefs or not, they exist and are fully operational. The results of the trader over time are a direct interpretation of his prevalent belief systems.
Training yourself to become an expert market analyst is not an escape route to confronting limiting belief systems. It does not matter how good you are at analyzing the market; you will not achieve the level of profitability you desire if these beliefs are not directly addressed and replaced with positive ones.
The extent to which a negative belief system has power over your mental environment is the degree to which you will encounter limitations as you seek to rise up the ladder of success in the financial market.
Let me buttress more on the above point; there are many market gurus or even experienced traders who can predict market directions and carry out analyses with a high level of uncanny exactitude but still can’t make money as a trader. Some of them even call trades that end up going their intended directions but still got left out when the move begins.
These and more scenarios are effects of limiting beliefs. Either these traders are not aware of how much effect their belief systems have on their ability to trade effectively or they are unwilling to confront wrong thought patterns and change them for good.
Changing Your Belief Systems as a Trader
To have a change of trading result, a trader must look within and consciously pick all beliefs they have about the market, then see for themselves through careful scrutiny of each belief system how they affect their trading adversely. Until this exercise is done, belief systems remain unchecked and negative results also remain unchanged.
Our beliefs define the boundaries in which we perceive the market environment, and everything we see whenever we sit before our charts or are about to take any investment decision is a product of our belief systems.
A wrong belief will lead to wrong perception and distortion of market information. For instance, a trader who believes that he should not lose a dime in any trade will do all he can to avoid losses while perceiving the market as a threat to his account. The effect of his inability to factor in the inevitability of losses in his trading career will lead to him trading out of fear and as a result, create the very reality he is trying to avoid.
Your beliefs as a trader can block your awareness of other possibilities in the marketplace such as an imminent reversal or a trend continuation. A lack of a flexible belief system can be very detrimental as it limits your perception of all that is possible in the trading environment.
What belief systems do you have about trading? Share with us in the comments below.
Featured Image Credits: Trading-Lessons.com
