There is a common quote that has become somewhat of a clich?. It is, “The definition of insanity is continuing to do the same thing and expecting a different result.” No doubt you are aware of it. It might be a clich? but that doesn’t mean it’s not affecting thousands if not millions of traders every day. Are you struggling with this issue? Are you continuing to say that you are not going to chase a trade, inappropriately move a stop, double down on a loser, etc., but still falling into that trap? Are you finding yourself saying that you will create a trading business plan, or construct a micro plan for each trade, or document your trades; but finding that you are consistently not following through with your commitments? This is a self-discipline breech that if uncorrected will bleed your trading account dry. This is why people ask themselves, “Why do I keep doing this?”
The first thing we must remember is that habits, which are actually patterns and programs that have become “automatic”, are difficult to break. What has happened is that you get caught in a pattern of thinking, feeling and doing, which is contrary to getting the results that you want. This pattern is “triggered” by something that you, for example, see in the charts or hear on the news that you ascribe a meaning to that is usually negative and therefore the pattern is negative. In fact, you may often be oblivious to the fact that you are caught in the pattern until you have committed the violation. Consider this: Sally winced hard as if her skin had been pierced by a deep dull needle. She had sworn over and over that she wouldn’t do it. But here she was, again caught in a web of self-induced seduction driven by greed and fear. “Why is it so hard?” she thought as she looked at her trade. She had input a limit order to buy 3 contracts of the NQ as the price action was about to hit a demand level on the 60 minute chart. She had meticulously determined from her daily and weekly charts that a significant demand zone was about to be retested. … Continue Reading
