Until you make the unconscious conscious, it will direct your life and you will call it fate’

This quote has to be one of my favourites,

In the world of trading we can have many psychological battles, but what makes us better from yesterday is making those bad decisions a pivotal learning point.

No this isn’t a ‘sales pitch’ even though your inbox is full of them, this is merely a friend here to remind you that you are on this journey to better yourself and your future and to not give up.

This is day 4 of 7,

This string of guidance does not only run you through our 7 key trading principles within the markets from a technical perspective but we also tough base with the psychology aspects of trading.

Each one provides genuine, transparent trading insights from over 10 years combined trading experience.

With that said, I thought our fourth installment should be one to remember,

One to sit and read while sitting on the sofa relaxing or read while you enjoy your morning cup of coffee.

We will be looking at “7 Trading Sins That Kill Starters”

First up…

1. Greed –

This sin can make us act out of character, it can make us not realise what is in front of us, greed will leave us looking for more when we should be content.

They say…

‘The bulls and bears make money, the pigs get slaughtered’, so don’t be a pig…

2. Fear –

Fear can lead us to do impulsive things, it can also make us put ourselves in danger. 

Fear is a natural emotion, it can keep us safe but we must learn to manage our fear and use that to our advantage. You’ll often find your most feared trade being the one that plays out…

Why? 

Well, the mass psychology of the market creates an area where traders are staying out of positions or closing out positions – this creates a liquidity pocket and so the market moves erratically and often reverses aggressively. 

3. Pride –

As human beings we want to be right about the things we have control over. 

WE HAVE NO CONTROL OVER THE MARKETS, so leave your price at the door. 

You will overlook, undermine or not understand trade setups due to your pride. Use your losses as a lesson, document them, analyse them. 

4. Envy –

Have you ever felt envious of a friend or colleague? 

It’s human nature to feel these emotions sometimes, who wouldn’t be envious of that friend who bought Bitcoin back in 2012? However, envy will lead us down a path of wanting and expecting more – this leads your right back to Sin 1…

The market will always search out the greedy and often liquidate their positions. 

5. Wrath –

 Also known as ‘anger’, this sin can lead many people to negative outcomes. 

Have you ever revenge traded after losing a series of trades? This will be the wrath inside you wanting to impulsively react to the scenario, but as we know wrath will only hinder our results, blow accounts and set you on a slippery slope of psychological instability within the markets. 

6. Lust –

Lust is an interesting one, we may love to be traders, we may love sitting in front of the charts all day, we may also love being in the markets, but with anything in life, we must have breaks to see clearly, otherwise we are blinded by our lust. 

Overtrading, over-refining will lead to loss after loss after loss.

7. Stress –

Too much of it will tip your emotional balance overboard, too little of it will make you lazy.

 However, finding the sweet spot with stress can be an incredibly powerful tool for proactivity. 

When trading stress is an emotion we must master to avoid negating our technical edge and ‘flow state’ within the markets.

These 7 trading sins are the cause for many traders giving up, or not committing themselves to the process of becoming consistently profitable.

We know the true power that psychology has on trading, we also know that if you don’t listen to your unconscious mind, your conscious mind will become a mirror.

To truly harness your inner greatness, you need to accept your trading sins.

Do not worry, every trader on any level has been guilty of one or more of the 7 trading sins.

The difference between the professionals and those merely testing the market waters is their ability to learn, adapt and hold themselves accountable.

The markets do not owe us anything.

Keep an eye out for our next email, we will be covering a topic we all know you want some more insight on.

… And don’t worry we’ll be jumping into some juicy technicals again…

Warmest Wishes,

The Social Traders