Page 8 - Module 2_The_Human_Element

Module 2 -Lesson 1 – the human element

Men are socially conditioned to succeed from the
moment they enter the world. They are brought up psychology of trading
to become achievers. Influenced by family, friends,
education, and career environment, they are Emotions such as fear and greed
encouraged to seek professions as doctors, lawyers, can have a negative impact on your
and bankers.
trading. Learn how to overcome
Striving to be right, number one, the breadwinner, these emotions and become a
and the best, always seeking perfectionism. better day trader.

Men are socially conditioned to be family providers.
Moreover, various cultural pressures and demands
add up to this, and as a result man have an intrinsic
fundamental obligation to succeed.

The solution is to take a reality check. Losing is part of the game. The possibility to lose is always
there. Bottom line: traders do lose. The how much and how often is what distinguishes great traders
from those who will always struggle.

You can learn how to accept losses by re-defining the meaning of loss. If you equate it with failure, it
will sooner or later take its toll, but re-defining it will help you move forward, improve your trades
and cope with possible losses. Consider losing as positive in the sense that it will improve your next
trades. Find something new. Make the mistake a blip on the radar, don’t over-react, and let it come
and go with ease.

6. locked patterns
The second most important trading challenge is the innate human characteristic of patterns. Here
is an example of a trader with a locked-in pattern:

He keeps making the same mistake when trading. When asked to describe the mistake, he will do so
in detail. When he is told not to repeat the same mistake again, he says he can’t help it. Although he
intellectually knows he should stop making the mistake, he can’t. He keeps repeating it and as a
result, repeats his losses repeatedly, too.

If you recognize the following – you are in a trading psychology spiral, and need to focus on breaking
your locked emotional patterns:

▪ You go long, and the market immediately goes down.
▪ You go short and the market immediately goes up.
▪ You start shaking, sweating, get short of breath.
▪ You are ready to throw your computer out the window and jump out yourself.
▪ And the market has only been open for 30 minutes.

7. breaking a pattern

It is critical to notice when the pattern is happening and to never let it take hold. Dealing with the
loss immediately will help you to achieve this.

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