Let's try again shall we, here's another one.
Another observation, a more general one this time, but still very important.
There are a few web sites that interview successful traders, 'Chat with Traders' is a good one, they have several hundred interviews on file and I've listened to good number of them and there are 2 common threads that stand out. You hear the same 2 stories repeated over and over.
In no particular order story A is the one where the person does all the learning and then hits the markets and gets it right straight away, they are making money and building their account month after month and then suddenly, before a year is out, it stops working. They start losing and keep losing, they keep going thinking it will all change back again but it doesn't and they end up giving it all back and then some. They are left totally bewildered.
Story B is of the one who does all the learning and gets started but it just never seems to go right, they just can't get it going, months roll by, then years, and no matter what they try they just get nowhere.
Both of these types have the same problem just the other way around. The clue to the first is 'making money quick/losing money quick'. The clue to the second is 'keeps going for years getting nowhere'.
The answer is risk acceptance and risk avoidance. To be successful you need to be very good at both but they are 2 ends of the same stick, they are opposite poles, if you're naturally good at one then you will be bad at the other. A person can't be naturally gregarious and naturally shy as well.
There is also a third group, people who are just average (in the middle) at both.
The people telling story A are good at accepting risk but bad at avoiding it. The people telling story B are good at avoiding risk but bad at accepting it. I would call it 'risk on' and 'risk off'. Yes I know generally risk on means buy and risk off means sell but here I mean 'risk on' means buy or sell and 'risk off' means wait, do nothing, sit on your hands.
So story A types are good at risk on, bad at risk off. Story B types are good at risk off, bad at risk on.
There is so much written on trading psychology but this is not really a psychology problem, this is personality. Very few are born to be naturally good at 2 opposite traits. Good traders are not born and they are not made by someone else, they make themselves.
But how do you change your personality? By Cognitive Behavioural Therapy (CBT), sounds difficult but is really quite simple.
First identify just what your problem is and how to recognise it and when to cut in and over-rule your wayward natural instincts. 'When I see this situation occur - I will implement my plan'. And so have a written out stepwise action plan on what you should do when that situation occurs. In time and with repeated use the written plan will become your natural response over-riding what was your inadequate natural response.
So people with story A will have an action plan for when they recognise 'risk off' conditions (e.g. which may be just 'do nothing'). People with story B will have an action plan for when they recognise a 'risk on' situation (e.g. always
enter the market on such and such indicator alignment that have been tested and are proven to have a good positive expectancy).
And the people in group 3, who are average at both, will write out an action plan for both 'risk on' and 'risk off' situations.
This, of course, is basically a TRADING PLAN. And yes, they do work - if you can be bothered to make one.