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LESSON: Traders Try to Avoid PAIN! (And this is why it is so un-natural for humans to be traders)

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[op_liveeditor_element data-style=””][text_block style=”style_1.png” align=”left” font_size=”16″ font_font=”Montserrat” font_color=”%237e7e7e”]This is a massive problem and a problem that can be quite deeply rooted in a trader’s behaviour and belief systems.

As people we all try to avoid pain, not only physical but emotional.

As humans we will do almost anything to try and avoid emotional pain and in generally in life, is in most cases fine. In trading however whenever we are in a mindset of fear or hesitation it causes severe problems.

Two most common emotional pains in the markets traders try to avoid are;

1. Being wrong
2. Losing money

Whilst the above two pains are completely normal it is what happens when the trader is trying to avoid them that causes the problem. As traders we need to be able to carry out our edge in the market every single time our edge appears. We also need to be able to do things like move to break even and take profits without the slightest bit of hesitation.

Traders who are trying to avoid the pain of being wrong and losing money will create a whole host of psychological trading errors. A few of these errors are;

• Won’t enter a setup straight after a loss
• Won’t activate a stop even though price has gone to the stop level
• Won’t close a trade even after the trade has clearly changed direction

A trader who won’t activate a stop even though price has gone to the level that they should be closing their trade, are behaving like this because they don’t want to feel pain. The trader is trying to avoid feeling wrong and also losing money. Until the trader closes the trade the loss is only a paper loss and the trader still has a chance of not being wrong as the trade could still turn around in their direction. Sounds silly right? Of course it is, and 9 times out of 10 this will only cause the trader to lose more money and blow their trading account up real fast!

Don’t fall into this trap. Realise that yes you are human and yes your emotions are going to come into your trading. There is simply no way to trade with zero emotions. We are not robots and we do feel things. You must not let this stop you following your plan and being disciplined. At the end of the day you made a plan to protect yourself and to help you make money. The only way to become a disciplined trader is to follow your plan and to never waiver.[/text_block][/op_liveeditor_element]