TRADING PSYCHOLOGY
A Spiritual Center May Help You Overcome Your Trading Problems
Overcoming Trader's Block
by Hal Masover
You've done everything you can think of to profit from
your trading. Why aren't you making any money? Maybe the problem isn't
with your system.
I must have spoken to more than 1,000
traders in the past couple of years at various conferences for traders
and investors. I have met a few consistently profitable traders, but they
have been unusual; for the most part, I met a lot of interesting, knowledgeable
people with good trading methods who despite all of that are unprofitable.
Why?
The lack of success often has to do with the trader's actions in the
market rather than his methods. Some traders are afraid to pull the trigger,
while others have no trouble getting into trades but take their profits
too quickly. Many simply override their methods for emotional reasons.
These tendencies to sabotage are variations of what I refer to as trader's
block.
One trader I know is a TradeStation expert. He has designed systems with
very high percentages of winning trades and high average profits per trade.
Despite this and despite all of his trading knowledge, he is not a profitable
trader. Why? Consider another trader I know who has traded futures since
1972, met all the trading gurus, taken all the courses, traded relentlessly
-- and lost money just as relentlessly. Why?
The temptation is to look at such traders and assume they are on the
cusp of becoming consistently profitable traders. Maybe -- but some of
these traders seem to be stuck at that point year after year.
FORGET SYSTEMS
For most of these traders, the answer is not a new system. The first
inkling I had that a trader should look elsewhere to succeed was when I
attended a talk by a famous trading guru. He pointed out the importance
of ceasing all trading activity anytime you find yourself in an emotionally
upsetting situation. He told us about a time when his father had to go
into the hospital for surgery; even though he was not able to focus, he
continued to trade through this period and suffered tremendous losses as
a result. Later, he mentioned that he taught Sunday school, and had been
doing so for 13 years. That struck me as something to remember: Here was
a famous, successful trader, and he taught Sunday school regularly. That
reminded me of a conversation I had had some years before.
I was attending an industry conference in Chicago when John Walsh, a
friend of mine and a marketing consultant to the futures industry for more
than 25 years, asked my partner and me how our business was doing. Things
were going very well, we told him. He asked why. We started to tell him
about a trading guru we were following and how he was recommending our
firm and how the clients were making money -- and he stopped us and said:
"That's not what I meant. What are you doing in your life that you
deserve so much success?"
Hal Masover, who moderates a Web discussion group on
trading and spirituality, is president of Crown Futures Corp. and vice
president of Iowa Progressive Asset Management, a full-service stock brokerage
offering securities through Financial West Group. He can be reached at
800 634-9650 or hal@scaletrading.com or his Website at www.scaletrading.com.
Excerpted from an article originally published in the
December 2000 issue of Technical Analysis of STOCKS & COMMODITIES
magazine. All rights reserved. © Copyright 2000, Technical Analysis,
Inc.
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