The financial markets have been my passion since 1990. I’ve seen the valleys as well as the peaks, and I’ve also seen a LOT of traders cross my path with trading issues. Here are the top three mistakes I see almost all amateurs make… read on to make sure you’re not doing these things wrong…
1) Misunderstanding the role of mindset
Chris Tate, my business partner, and I caught up with a member of our Mentor Program the other day. He said: “Well, if I haven’t made it now as a trader, I’ll never make it”.
Hmmmm… well… this is a problem. It could be that this is just a case of lousy self-talk. (If you think this might be your issue, you can download my free Special Report on this topic by clicking here.)
However, it could be that this is a hallmark of having a fixed mindset. Trader’s with a fixed mindset think their upper limit of endeavour has been reached, and that they’ll never grow any more. We see this so much in beginner traders, doubting they’ll be able to learn about the markets. We also see it in advanced traders, thinking they know it all, so they don’t need to continue mastering the basics.
It’s been proven in study after study that those with a fixed mindset are more likely to give up, as well as cheat on tests. Why do they cheat? Well… they feel that if the questions are difficult, a bad test result will threaten their identity as being ‘clever’, and they’ll fight like heck to maintain that image of themselves. They’ll quit for the same reason. Easier to quit than to continue on in a field that’s challenging.
So, what about those with a growth mindset?
Well, they love learning, and because they’re not tied to the outcome, they continue to grow and achieve. They adore the process.
They can handle life’s lows as ammunition. They use that low as a platform upon which to stand and see further.
Their identity isn’t threatened when they have a failure.
Careful about thinking you’ve achieved all you can achieve in life. It will bite you in the bum.
2) Making things too complex
I know one of my key money blocks – it’s complexity.
When things get too complicated in my life, it usually means that I’m under pressure, and I’ve stopped saying ‘no’.
‘No’ to adding just those extra 5 pages to my trading plan.
‘No’ to learning about that new market that trades 24 hours a day which doesn’t fit in with my family values.
‘No’ to the time vampires around me, wanting to suck my most precious resource out from under me.
What’s blocking you from money today?
What’s going to make you the most money with the least effort?
That’s where you want to head. Complexity, be damned.
I hope that as I write today, that my words seep into your heart and help to inspire you to see the world differently, BE in the world differently. I hope that in my words, you can see yourself, as your BEST self. Focused, disciplined, kind you. The powerful trader, you.
3) Thinking you can go it alone
Ayn Rand had a label for people like us. She called us ‘The Producers’ – ironically resented and disliked by the majority.
As a society, we take great care not to offend every other minority – like members of the Church of the Flying Spaghetti Monster, and 3-eyed mutant alien worshipers – yet, it’s still fashionable to proverbially swing a punch at a Producer. So, if someone has given you some lip, take it as evidence that you’re doing the right thing.
People desperately hoping their Superannuation will give them double-digit returns, and whose financial futures rest in the hands of fund managers who don’t give a hoot about them… those people still look down their noses at me.
This is the key reason why I resist normal socialising, with meaningless neighbourhood get-togethers, or school functions that are excuses for parental piss-ups. Unless I lie, or somehow throw out a red-herring about who I am and what I am… I know where the conversation will end up.
Am I super-sensitive about this? Perhaps… but I don’t think so. Such tongue biting is miserable work. That’s why I prefer to hang out with members of my Mentor Program. There’s no judgement there. We link arms, face in the same direction, and choose to see each other as the true heroes of society. The Producers. Those providing for our families by living by our wits and our trading plans. Those applauding a new angle on money management, or a triumph after a long drought.
Watch who you associate with, or you’ll suffer the consequences. Find a group of traders who will support you, care for you, and nurture you. If you think you can go it alone, you’re destined to make a batch of mistakes that won’t just damage your bank account, they’ll damage you emotionally.
We haven’t got a safety net.
We know it’s all up to us.
We don’t have an employer to bail us out, or government assistance to see us through.
Yes, it’s all on our shoulders. But really… unless you associate with other traders in the trenches, you just won’t ever achieve the returns you desire.
To join the ranks of elite traders, take some time for some serious reflection. Recognise that trading psychology is the main thing separating the professionals from the amateurs, and don’t discount the importance of keeping things simple, and relying on the support of other traders.
About the author
Louise Bedford (www.tradinggame.com.au) is a full-time private trader and author of several best-selling books, including The Secret of Candlestick Charting, Charting Secrets and Trading Secrets. Get the results you deserve. Grab her free Special Report called ‘How Much is Your Self Talk Costing You’, by clicking here.