80% Of Trading Is ……


 

80% of trading is behavioral, maybe only 20% is based on the other things that a trader does. Like much of personal finance it is not the math but the behavior that makes all the difference. Most people’s problem with being broke does not lie in their budget it is due to their behavior of spending too much money becasue they lack self control. The inability to say no to yourself in the present is what leads to most of the problems that we encounter at a future time. You can’t out earn stupid and you can’t budget away a lack of self control or work ethic. The same applies to trading.

Wanting to be a trader is only the beginning, once you make that decision you have to do the work to learn how to create a winning trading system. Having a robust trading methodology is still by far not enough it has to be expressed in a trading plan that also controls risk and fits your personalty. Even then, a trading plan is not enough you still have to follow it with discipline consistently for it to work out for you in the long term and make you profitable. But wait, there’s more…. you have to have the passion and perseverance in the market to shake off a losing streak and draw down and keep going. A great trading method is useless if you quit before you give it a chance to hit the big winning streak.

You see it is not your fancy computer, trading system, or smarts that will make you a successful trader. It is really our behaviors that determine our success as a trader. The ability to cut losses, keep learning, keep testing systems, stay focused, and staying humble are behaviors that will keep you on the right side of the markets. I am sure many mediocre traders become rich through perseverance, passion, consistently, and the right actions while many brilliant traders blew up their account and were ruined due to doing the wrong things after being influenced by ego and greed.