Traders Confession: Trading with Wrong Belief and Mindset

The Beginning!

“Every great men was once a baby, every great trader was once a newbie.” – Unknown

My journey as a trader did not go out well at the beginning. Just like most newbie traders out there, I commit a lot of mistakes and lost a lot of money in the process.

I endure red ports for a very long time. I was overcome by fear, doubt, and discouragement. Most of the time I was tempted to throw the towel and accept that trading in the financial market is not my craft.

Good God, it didn’t happen, I persevere and kept on calling the trade.

I realized that failure, doubt, and disappointment is part of the game. You need to overcome all these challenges if you want to commit to trading long term.

Because of our mistakes, we tend to learn more. We fall and get wounded. However, from that wound, it creates a scar, and that scar will turn into a mark, and that mark will signify that you are indeed a true warrior.

We strive more if we felt being challenged by any adversity. Some will make it through, but the majority will break. That what separates the winners and the losers.

Belief and the proper mindset is everything. You may have the best strategy, large capital, good trading system but with wrong belief and mindset…you will not make it in trading long term.

Getting hyped, gambling, unnecessary losses, not being able to execute your trading plan…these are just some of the issues that traders struggle every day.

Our belief about trading, the market and about ourselves will direct our thinking and subsequent action.

As Dr. Van Tharp put it.

You do not trade the markets. You can only trade your beliefs about the markets.

Beginners’ Bad Luck!

So here’s the terrible mistake I make when I just started trading. Hopefully, my journey will inspire young Filipino traders, especially beginners to avoid this mistake.

I thought trading was an easy game. I opened an account, deposit my capital, buy the hot stock everybody is talking about and follow the stock reco from the venerated market guru and here we go.

Sitting in front of my laptop with mocha flavor coffee beside…I am now ready to make my first million in trading.

Here comes the rumor… “ more of this stock, sigurado ito…double, triple bagger”

Without a second thought, I add more funds and increase my position. This is it, one big move and I’ll be on the easy street. Live and trade anywhere – coffee shop, beachfront, anywhere in the world while earning six or seven-figure from my trading account, doing the things I love, living my dream lifestyle…damn! who doesn’t want that kind of life?

easy money right? “pera sa hangin” as what others call it.

No big capital, No inventory, No monster boss, No deadlines, No traffic going to work. Just you and the market. Life is good!

And from there, I started thinking about how proud I am that I started trading the stock market early on and pitied those who haven’t started yet. Excited, determined, I am now ready to conquer the world!

Expectation Versus Reality!

No first million was made. Only huge losses and a bloody red portfolio in front of me with another mocha flavored coffee beside which I did not drink that time because of overthinking what has gone wrong.

As an engineer by profession, I do analyze things. Putting all the pieces together and studying the series of events…of what went wrong.

I was possessed with thinking that it was all my broker’s fault, It was the fault of the social media group I was following and It was my friend’s fault for not telling me whole story, etc.

Everything turns against me because of this, because of that..and there comes the blaming game. Yaykz!

Blaming others except yourself on your trading outcome is the wrong mindset every trader should avoid.

One must take full responsibility for his/her trade. The market doesn’t owe you anything, the world, in general, doesn’t owe you anything.

You cannot control the market and predict its direction. But we have full control over our emotions, our trading plan, the method we use, position sizing.

Gamblers Disease!

Now back to my story, with a huge loss, red port, disappointed but eager to take my losses back.

Now, given up to that thinking at that very moment, I started to treat trading as a sort of gambling.

Revenge trading as what they call it. I lost money and I want to take it back..right now and then…

The problem is when you were consumed by “revenge trading” emotionally the logic was gone.

You now throwing trade recklessly… no plan, no money management strategy, just you are driven by emotion to get your money back.

Throwing several trades hoping to recover my loss I ended up chasing the stock price. Well, it gives me some results. A “gambler results” as I call it, and the result was not very comforting.

I lost more money on that gambler’s trade…more red ports and now I am really disappointed.

The New Beginning!

I took a short break from trading and start analyzing and contemplate myself, the market and trading in general.

That’s the time I realize, “Hey! I did it all wrong from the start”

So I start searching ebooks in the amazon about Trading to equip myself before the comeback.

I came across these two books. Super Trader by Van K Tharp and Trading for a Living by Alexander Elder.

Luckily, a friend of mine who’s also a trader has these books and let me borrow it. So no need to buy from amazon. Yay!

These books are an eye-opener. In my opinion, everyone who just started trading and those who want to start trading…these two books are the best, to begin with.

Reading Van Tharp and Alexander Elders’ craft gives me not only information but also the realization that Trading like any business needs expertise, thorough planning, and commitment.

Delayed Realization!

Why did I not give enough time to know myself, the market, set goals and strategy? I always came across these words on the internet. “aral muna bago invest”, how stupid I am to ignore it.

If you treat the market seriously, it will give you serious money. The problem is if you’re not serious with the market…the market remains serious, serious about taking all your money.

Do you get my point? Your success in trading will depend entirely on your belief and way of thinking about trading.

So start it right or you will suffer big.

What is your goal why you want to trade? Is it to buy your dream house? For your retirement? for a car? Or only a hobby?

Always start with your “WHY”. Then create a trading strategy to achieve your “why”.

Plan your trade, and trade your plan. How much capital do you have? How much capital you are willing to risk? What trading methodology you will use that fits your personality and lifestyle?

Those were just a few questions a serious trader should ask themselves before entering the market.

Honestly, it took me sometime before I realize all those things mentioned above.

It took some time to realize that the battle should be first fought within. My mindset about trading, the markets, and about myself.

I learned my lesson, entering the market with the wrong belief and mindset gives me a hard slap in my face. wapak!