The one thing that will change your trading results needs a bit of explanation to get to root of it. Click here or in the video below to learn what that one thing is in episode 25 of the Trading Performance Podcast.
Let’s boil it down to the one thing that will change your trading results…
Actions determine our results. But what is it that determines the actions that traders take?
Many people believe that the trading plan determines the actions that we take. Sadly this isn’t what we have discovered in our years of coaching traders. Even when traders all have the same trading plan they didn’t take the same actions. There is a disconnect between the trading plan and the trader.
Why were traders taking different actions than was stated in the plan?
The human animal is driven to take actions through their feelings and emotions. Unfortunately we are predisposed to do nothing. Therefore we will do nothing until we see an opportunity to avoid pain or gain pleasure. Our feelings and emotions are at the root of it all.
What is it that creates a person’s feelings and emotions?
It is their thoughts.
One trader may look at a situation and think it is a disastrous situation. Which will result in insecurity and fear. These feelings will prompt the trader do what they can to avoid the pain of the predicted disaster and take the actions they believe will accomplish that.
Consider the exact same set of circumstances where another trader is having different thoughts and therefore feeling different emotions. This trader sees the situation and thinks that while a future loss is possible, it is more probable that the market will go his way and provide big profits.
Both traders had the same trading plan. So in theory they should take the same actions. But no matter how you trade, or no matter how tight your rules are, or how strictly you keep to them, there are always areas of the plan that are open to interpretation. That interpretation comes from our thoughts. And those thoughts create emotions, which filter the information we use to make the critical decisions that determine whether a trader is successful over time or not.
What determines your thoughts? That is really the key here. Take some time to learn the one thing that will change your trading results now!