You may have gone through it – or are going through it now. In this article, I will help you understand why this is happening and what needs to be done to change this situation before giving up and feeding a trading failure statistic.
Have you ever stopped to think about how difficult it is to form good habits? How easy is it to repeat bad habits? The truth is, few things can have as real an impact on your life as improving your daily habits.
As hard as it is to do, habits are ingrained when we perform the same action long enough. The problem is that this applies to both good and bad habits.
All the situations that you repeat that make you lose money in trading are regular situations. Consciously or unconsciously, you repeated these behaviors that lead you to reap these results day in and day out.
These behaviors become automatic and fully integrated into your identity, reinforced by phrases you repeat to yourself, such as:
I can’t use the station.
“I can’t accept losing”
“I can’t stop working when I say I will.”
“I’m not disciplined”
and so on…
Continue after the announcement
In Atomic Habits, author James Clear talks about the three layers of behavior change.
The first layer is to change your results. This superficial level is concerned with changing your results, such as closing a day, week or month on a positive note, as well as making a living from trading. Most of our goals relate to this level of change.
The second layer changes your operations. This level is concerned with changing your habits and systems or “processes”, such as having a pre-trading routine, a well-made trading plan, as well as filling out and studying a trading journal every day. Most of the habits we create are related to this level.
The third and deepest layer is the change of your identity. This level is associated with changing your beliefs, such as your perception as a trader, if you feel you deserve to make money in the financial market or if you feel safe and confident in the business and believe you can make a living from trading. Most of your beliefs, assumptions, and biases are associated with this level.
In this way, outcomes relate to what you have, the processes of what you do, and the identity of what you believe in.
As long as you do not change your identity, you will not be able to move forward in this process, that is, to do what needs to be done every day in order to get the results you want on a conscious level.
Continue after the announcement
Most of the traders don’t even think about changing the identity when they want to improve something. They simply think, “I want to be a profitable (outcome) trader, and if I adopt this strategy, I will be a consistent (process).”
They set goals and specify the actions they must take to achieve those goals regardless of the beliefs that drive their actions.
They do not change the way they view themselves, nor do they realize that their old identity is capable of sabotaging their new plans for change.
Behind every system of actions is a system of beliefs. Therefore, it is important to build your results on the basis of identity, that is, from the inside out, and not from the outside in, as most people do.
You have to become the person who can get and maintain the results you want.
Any behavior that is not consistent with “yourself” will not last.
Herein lies the importance of seeking self-knowledge, and knowing how to better manage your emotions. It will make you a more confident, secure, prosperous and truly free person.
If you want to become a consistent trader, you need to become an informed trader.
Self-awareness.
Learn how to diversify your assets and reduce risks by investing abroad easily and safely (partnership with XP)