Trading, What’s the Last Phase before Success

31 January 2023 - 11:41

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The activity of trading involves the achievement of several errors in the learning path. Let’s see together how to understand if we are doing well.

Trading, What's the Last Phase before Success

The trading activity is an activity that involves making several errors, from incorrect money management, to wrong market entries, up to the lack of strategic structuring, a fundamental aspect in this job. Many times, in addition to the mistakes that are made, it can happen that we face a period in which things "go well", that is, we earn constantly but immediately afterwards we are denied by another period where the operations that brought us earning doesn’t seem to work anymore.

This learning phase is typical of those traders who are close to being profitable in the long run, therefore one is initially deluded about one’s own abilities, or rather, about the results one is achieving. In this article we are going to see and analyze a phase which is practically crucial in achieving the goal, i.e. the last obstacle before succeeding in becoming a profitable long-term trader and which could be so pressing on a psychological level that it could make most of those going through this period quit. “Don’t worry” one would say, because this obstacle is easily circumvented through a simple trick which consists in a change of "vision" of the general situation. Let’s see it together in this article

The last stage before the finish line

This stage of learning is the last before achieving the goal of making trading one’s business, or rather of making trading a real business. After an initial phase of study, another phase where you experience the use of technical analysis and the implementation of money management, you move on to real practice where you get errors that in most cases reside in a certain lack of discipline about what was budgeted for.

Furthermore, trading is highly subject to an emotional phase which usually characterizes novices, i.e. those who get excited after a trade that went very well or get depressed after a trade that went bad. Unfortunately these emotional swings, which can even lead to a real gambling addiction, are the absolute evil for traders because, if we wanted to decide to do this job, we could not physiologically bear these emotional swings with strong negative repercussions on our psyche. Trading requires calm and balance, a so-called "cold blood" which is simply the result of a well-defined strategic planning and which characterizes the majority of profitable traders in the long run.

Planning one’s own activity allows not only to appear as those with cold blood, but leads to a certain tranquility and initially to a "operational boredom" which is perceived as such when compared to the emotional experience of the first stages of learning. We remind you that trading is a job like any other and therefore requires a certain professional approach if you want to make trading your daily activity, or rather make it become a real productive work.

Returning to the question that we could define as the "last stage of learning", the trader has already experimented and has already structured most of his operations, therefore he will be faced with a period of consistent gains over time and which are the result of time-based programming a priori which appears to be successful in the long run.

At some point, the opposite happens, i.e. you enter a vicious circle where you miss a trade, then another and another, leading the trader to lose confidence in his business so as to question all the work done in the past. recently because of the lack of results, or rather, because of the bad results obtained in the last period. For the trader this is a really difficult moment, a real and very strong psychological obstacle that could make many give up, especially those who have reached this stage in a short time. Unfortunately in this work the experience of the markets, but above all the experience on oneself is very important.

This period of negativity is simply the result of a psychological return to the first phase in which one dreamed of having constant, consistent gains over time and planned in advance. In this phase the trader goes back on an emotional level and in fact also in the approach since emotion is a big problem in trading. The trader then becomes emotional, regresses psychologically and, without realizing, he changes his approach and returns to an almost playful approach.

The solution

I am convinced that many find themselves in these words, indeed, I hope so since this is the last obstacle before making trading your business. The important thing in this phase, especially where you go wrong initially, is to identify if we are changing our operations, our money management and our risk management. At this juncture, once the last operation has been compared with the one in which it was profitable, it is useful to re-parameterize one’s own operation in terms of risk precisely to avoid a depletion of one’s capital and in fact, by carrying out this work of examination on the work carried out, return to a more professional approach, all in an almost unconscious way.

In practice, what happens in this phase is comparable to a racing car which during a race, before the finish line, goes off track. In this case the driver’s ability is to bring the car back on track, calmly and lucidly without getting caught up in the rush to get back. The important thing is to finish the race alive and not set the best time possible. In these cases, the driver has two alternatives, i.e. to get caught up in the rush to return, the same rush that took him off the track, and exit the race definitively, or calmly regain control of his vehicle, return on the track and finish the race.

The trader does the same, i.e. he is taken by the enthusiasm and emotion of crossing a real finish line and makes mistakes that could be fatal for the final outcome of the race, mistakes that if not corrected as soon as possible could permanently compromise their operations.

Original article published on Italy 2023-01-31 08:57:00. Original title: Trading, l’ultima fase prima del successo

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