I was answering some questions at a trading seminar a while back and a trader stood up and said, “It’s impossible to average more than 12% per year on a portfolio”.
I said “OK” and went on to the next person. After all it wasn’t a question so what else was I to say.
Apparently, I missed something because he seemed to get a little upset and said in a louder voice “I said it’s impossible to average more than 12% per year on a portfolio”.
He was obviously looking for an attention, so I asked, “Is that what you truly believe?”
He said “Yup”.
I said, “In that case you are absolutely correct. YOU will never make more than you believe is possible. Unless of course you make some sort of mistake, in which case I’m sure you’ll correct that by bringing down your average the next year.”
Of course everyone had a good laugh but the sad part about what I said is that it’s absolutely true. I proceeded to tell a story in Dr Maxwell Maltz’s book Psycho-Cybernetics. In the book he talks about a salesman who was making $30,000 a year no matter what happened. His manager put him in a terrible territory; he’d work like crazy and make $30,000. His manger put him in a great territory and he’d slack off and make $30,000. The manager lowered his commission and he’d make $30,000. The manager raised his commission and he’d make $30,000. When asked why he always made $30,000 a year, he simply stated “I don’t know. I want to make more money but I guess I’m just a $30,000 a year man.”
The point of the story is that this man had every opportunity to increase his income yet his beliefs capped his income at $30,000.
What do you believe?
Among the greatest desires of our brain is to prove what we believe is true. It will filter out and ignore evidence that makes us wrong and desperately grasp on to, or even make up evidence that supports our beliefs.
Do yourself a favor and answer these questions to become aware of what your beliefs are about yourself and how you perceive the market and trading.
What do you believe about the markets?
How do you see yourself as a trader?
What kind of returns do you believe are possible?
Do you believe it’s even possible to make money trading?
Do you believe it’s possible to make money in the markets but you’re not capable of doing it?
If you are struggling with trading, I bet that once you write down your beliefs, the cause of your problems will be staring you in the face.
If that’s the case, it’s time to change those limiting beliefs because having the “proper beliefs” is critically important to your success as a trader.
Notice I did NOT say having “beliefs that are realistic or true” is critically important to you as a trader, because they’re not.
Most people get all caught up about having true beliefs. The simple fact is it doesn’t matter if your beliefs are true or not and in most cases you’ll never really know. Most of what you accept as true is made up anyway. Instead, focus on determining if a belief is helping you get what you want or if it’s not. If it is helpful, keep it, if not change it to one that empowers you because that’s the only way you’re going to get what you want.
For more information on identifying and changing limiting beliefs click here to learn about our One on One Coaching and Trading Triangle Programs !
Live with passion!