I’ve written a lot about trading in various list groups and forums.  My psychological problems yesterday morning reminded me about some old posts I had written which provides a perspective on how psychology fits into trading.  Now if I can only remember to follow my own advice… 🙂

Trading is much different than working a job.  With a job, if you want improved results, you work harder.  In trading, market movements dictate when you can make money and no matter how hard you work you cannot change when the market moves.  So trading is not about working hard, it’s about waiting for the proper market conditions and acting on your system’s signals once the market conditions are in place.  Burning desire to trade is almost always a killer for a new trader because it tends to lead to overtrading and taking trades when the market conditions are not conducive. 

If you think of successful trading as a chain, if one link of that chain is broken, you will not be successful.  The chain links include a profitable system, money management, hardware, software, broker, data feed, internet connection, environment, health, and your psychology (I’m sure there are more links, I’m just rattling off a few).  The psychology link is the hardest to keep whole.  Lack of discipline or strong emotions like greed, fear, or anger can break that link which in turn breaks the whole success chain.  Think about it, if you’re sick or your environment is distracting or your broker connection is bad or your hardware fails or any link is broken, your success is greatly hindered.  Success is only as strong as your weakest link.