New traders and even some highly experienced traders completely underestimate the need to take charge of their psychology in order to succeed in trading. Most people who get into trading want to make money and may have no interest in personal development and may even scoff at such introspection.
In NLP (Neuro Linguistic Programming) there is a technique called re-framing. The idea is that by re-framing a situation the patient changes their viewpoint and they automatically change their response. Let me re-frame trading psychology to see if I can help change your perspective to appreciate how essential trading psychology is to trading your system correctly.
Imagine the trading system that you have chosen is a car, your destination is financial freedom. You need to drive that car in order to reach your destination, however in order to do that you need to learn to drive!
If you didn’t learn to drive that car (however fantastic the car itself was) you would very likely crash, this is why in the real world we take driving lessons and need to pass a practical and theory test in order to be allowed to drive.
OK so if the trading system is the car and the destination is financial freedom, then doesn’t it make sense that you need to learn how to drive that car. Well adopting the correct trading psychology is the equivalent of learning to drive, however this is not spelled out in most trading systems.
There seems to be an underlying assumption that buying the system and learning the mechanics of operating the system automatically enables you to trade the system, this is as ridiculous as saying that buying the car and learning the mechanics of operating the car automatically enables you to drive the car.
The great thing about adopting the correct trading psychology just as with driving is that it is transferable to different trading strategies, once you have the correct mindset, you could trade any system that suits your personality just as you could drive any car.
I have created a new trading site specifically to deal with creating a great trading mind-set, which I will be adding to over the next few months. If you would like to Learn How to be a Great Trader Click Here