As you struggle through yet another unprofitable week, month or even year, let’s take a look at some of the reasons why you’re struggling to achieve the type of success you deserve.
1. You Don’t Have A Plan
Failing to plan is planning to fail, yet so many traders start trading options without a trading plan. You need to have an overall trading plan, a plan for each strategy and a plan for every trade. That includes both when things go your way and when they don’t. Remember – “Have a plan, Trade your plan, Review your plan”.
2. Trying To Run Before You Can Walk
In The Option Traders Lifecycle, I discuss the evolution of an option trader from fetus to retiree. Where do you sit on the lifecycle? Realistically if you are in your first 2 years of trading, you are not yet able to run. Take it slow and walk, or you will fall on your face.
3. You Don’t See The Big Picture
Each trade is a battle, and it’s disappointing if you lose a battle, but it’s the war that’s at stake. Don’t let one lost battle distract your from the overall goal of winning the war. Sure, we all have bad trades, we all make mistakes, as long as that one mistake doesn’t mean you lose the war (by blowing up your account), you will live to fight another day.
4. You’re Living In The Past
Successful people do no live in the past. Winners focus on the present and the future. They look at what they can do to improve their circumstances. Losers focus on the past and the injustices that the market has dealt them. Winners are able to move on quickly from bad trades and accept their shortcomings.
5. You Blame Someone / Something Else
If only the market had done this….. If only the Fed hadn’t decided to extent QE3…. If only the newsletter I was following had cut his losses quicker. You and you alone are in control of your destiny, don’t blame someone else for your failures. Accept full responsibility for where you are, and you’ll have a chance to change it for the better.
6. You Don’t Think You Can Succeed
Henry Ford once said – “Whether you think you can, or think you can’t – you’re right”. Option trading is such a mental game that if you go in thinking your going to fail, you surely will. You’ll cut winners too quickly because you don’t want to see profits evaporate and you’ll take losses when you should hold on. A positive mindset will go a long way to helping you succeed.
7. You Give Up
It takes a long time to succeed in the markets, I would say you have to give it a good 5 years before you give up and possibly 10 before you really feel like you get it. There will be a lot of blunders along the way, but stick at it and you will be better off than 99% of the other would be traders out there. It’s not about how many times you fall down, it’s about how many times you get up.
As Winston Churchil said – “Never, never, never give up.”
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