Gaining psychological insight into the nature of the trading environment.
Very few traders understand the nature of the environment in which they operate. As part of my attempt to redefine the market in your mind, I will be providing insight into the unstructured nature of the trading environment.
Unlike our everyday society with rules and regulations, limits and moderation, systems of discipline and retribution, the market environment is like a constant, flowing river with no beginning or end. Jumping into this river is so risky to the point that it can change direction at any moment without any form of notice.
To survive in an environment like this, you must create your own rules and be determined to follow them at all costs.
There are really no rules stopping you from entering this river or even limiting how long you can stay in the flow. You decide your criteria, and it’s all based on your perception at the time.
Creating your own rules in an unstructured and unlimited environment helps you create boundaries that tame recklessness and guide your behavior. This prevents unforeseen outcomes like you taking a huge loss that can be damaging to your trading account.
Taking Responsibility
By creating rules for yourself, you are signing up to take full responsibility for your actions. In so doing, you will have to stop blaming the market for your outcomes. You must learn to take responsibility for your decisions and stop seeing yourself as a victim whenever your trade goes in the opposite direction. The only way to learn how to trade effectively is to make yourself accountable by creating structures to guide you in an unstructured environment.
The painful truth remains that most traders have not set governing rules for their trading activities. This is because most of them want to make money while avoiding any form of responsibility that could come with it.
This kind of trader can be seen as one who follows the herd. They carry the mentality of doing anything just because they see others do it. And when things go wrong, they blame the outcome on the signal provider and whoever it was that defined their decisions in some way.
Success in trading can never be achieved this way. You can step into the market environment without knowing what to do or the criteria for action and expect to succeed. Success in the trading game is for those who have set rules, are following these rules, and are ready to accept the outcome of such rules. Anything other than this is a signature of doom in the marketplace.
