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Tuesday, 10 January 2017

...the chicken or the edge.

What stops us from becoming the trader we aspire to be? Why, when we look at the market, do we see all this money available yet fail to extract any on a consistent basis? The answer is fear.
Fear is the wannabe trader's most formidable foe. It controls us completely, governs our thoughts and actions within the market and, unconquered, will ultimately lead to our failure.
This fear or fears manifest in numerous ways; fear of missing out, fear of being wrong, even fear of being right, fear of the opinion of others, fear of loss, the list goes on. Then, of course, there are the innate fears that have been imprinted on our psyche through our own life experiences. It's these innate fears people feel they need to weed out the most. The need to go through some Freudian process to alleviate. Is this true though? Can we not overcome the more obvious and still achieve trading success?
When fear is removed, we are confident. Confident in our ability, confident in our knowledge, confident that we can control ourselves in a given situation. Think about the first time you got in a car and how well and how automatically you drive now. Similarly, with your job; first day fear and nerves soon dissipate. But trading is different. No one market is the same as another, so how can we build a mental mould for it? We can't. That's the point. So, what is the alternative? What can we do to remove those fears, to build confidence, knowledge and therefore control? We find our edge.

Your edge is what you sets you apart from all the other would-be traders. All the people that begin this journey and the uncountable who end the journey without success.
The kingdom is on offer to us, there for the taking, but without an edge it remains so close but so firmly out of reach.
Ask yourself, right now "What is my edge?"
If your answer is quantifiable and based on positive probability, you're likely already profitable. If you're not, maybe your execution needs work.
But if your answer is ambiguous or you genuinely don't know, stop! Don't make the same mistake so many of us do/did. Spending every trading session guessing, hoping the light bulb moment will come will take years off your life and large sums from your bank balance. The more you try and trade in this way, the more fear will imprint itself and the harder it will be to reach your end goal. Deep dive into your results, make detailed examinations of every entry you've made. You might be so close but aren't aware of the small change you need to make.
Use your trading session time to examine the markets, decipher the flow, find the anomalies, the patterns (they do exist). Correlate what you find, back test, paper trade, fail and start again.
All the information is available but you cannot take it out if you're too busy getting blindly stuck in.