I do not know if it is 90% or 75% but it is clear that a very important part of your success as an operator depends on the management of your emotions. Or, at least, this is what most traders say.
Normally, when a person is interested in trading, he begins thinking that what he needs is knowledge of trading psychology. Compile information, watch some videos, do some tests with a platform and conclude that knowledge is not enough to win.
90% of trading take placed with trading psychology
The next step is usually to seek other knowledge: “I need knowledge, but the one I have does not work for me, I need another”. Another system, another market, another type of graphic, etc.
You say to yourself “I do not win with a system based on the Elliot Wave, so I learn a system based on a pair of oscillators. I do not win in stocks, so I switch to Forex, where there are surely more opportunities. I do not win in hourly charts, so I better move to 150 ticks graphics”
This movement can be developed for a long time because the range of available options is almost infinite. There is always another new system, another new school, another indicator or the modification of the parameters of an indicator, a new type of representation framework, etc.
When the trader’s apprentice has invested enough time in this type of trading psychology and observes his poor results, he is often perplexed: everything fits in the theory, but in practice, nothing works. When he learns a system he seems infallible; Analyze like this, take the tickets like this and take ticks with shovels, but in reality, there is always something, however small it is that does not allow you to get the kind of results you have in mind.
He analyzes well, but ends up in BE, he works well but manages two losing trades, so he abstains on the third chance that turns out to be good, then he takes the fourth and loses once more. And in most cases, those traders who are able to persist and overcome frustration often do more of the same. They do not win because they do not have the right system, the necessary indicator, or the essential secret.
Many others leave this adventure and leave the field with the tail between their legs, but those who stay, after going deeper with more exotic alternatives, usually analyze their poor results and reach the conclusion that this is much more complicated of what may seem a priori, and a few privileged, a really small redoubt of the total, after so much suffering and frustration come to a new conclusion: if they have sought out all the knowledge there has been and have, and the solution has not appeared, they only have one place to look.
If it is not outside, it is inside, in their heads, in their minds, in the ideas with which they reach the market.
After having tried with one system after another, in one market and in the next, with a kind of graphics and with the latest news, if they are “lucky”, they conclude that it is not about looking outside and looking inside. It will not be, he asks himself, what are they themselves that make themselves lose? Could it be that all these defeats in the market are not due as much to the system they use as to the mind from which they apply that system? And if so, if they come up with that idea and embrace it, they conclude that inner work is the key to success.
Now they have a new explanation for their poor results, it is no longer the market, it is no longer the type of graph, it is no longer the system, it is their ideas, their fears, their irrational beliefs and then they are in a position to do something truly new. They can start working on themselves.
These are the traders who say that 90% of trading happened based on trading psychology, not because there is not a technical part to master, not because you do not need systems, tools or models, but rather because, after all the way to knowledge, the real obstacle is self-generated: it is the trader himself who loses himself.
Now, knowing that understanding that there is an inner battle to wage does not mean, much less, that the trader will emerge victorious from that stake.
The development of a mind capable of winning in an environment of uncertainty is much more than a desire. It is much more than a good intention and requires a kind of dedicated, focused and precise work.
Identify the nature of the challenge
Knowing the nature of the challenge does not imply that one will be able to successfully face this challenge.
You may have seen a hundred times as a bullfighter “diabla” in the envy of a bull, feinting with the crutch to the right to finally go to the left and that does not mean that you, in front of a bull, armed with a crutch, are able to do what you know you should do.
You know how to walk in a straight line by putting one foot in front of another, but that does not mean that you were able to walk on a catwalk of a meter wide that was 40 meters high.
Knowing does not imply doing and the only thing that achieves results is doing, not knowing. You have to apply the knowledge of trading psychology. Thus, even though this fortunate redoubt of traders can see where their real problem lies, that does not mean that they will be able to overcome the internal battle.
I tell you that you must keep your emotional mind controlled and below a certain threshold of activation, that if you pass through it when you are in front of the market, your most primitive mind, which is in charge of your survival, will take control of your actions and act to free yourself from the threat of the market and that will lead you directly to chain loss after loss, but since I do not tell you what to do to keep that mind under control, as I do not teach you to achieve this kind of inner victory, what good will it do you?
One more thing I tell you: make sure that your actions do not contradict your thoughts, because, as you say yes, that you agree with what I say, that a very important part of your success as an operator depends on your trading psychology, how do you accept that that’s true you’ll have to look in the mirror.
I do not know if it’s 90% or 75% but attend, what percentage of your time are you dedicating to work on yourself and what percentage are you dedicating to the analysis? What percentage do you dedicate to the technical part: systems, indicators, inputs, and what part do you dedicate to the management of your emotional response?
I do not know you, but I would bet that, although you know that inner work is fundamental, you are not systematically dedicating the type of effort that you say it deserves, so ask yourself, are you going to continue thinking that it is very important while you are not congruent with that belief? Or are you going to decide that, if 75% of your success as an operator depends on your emotional management, it is reasonable to dedicate 75% of your effort, 75% of your resources, your time and your dedication?