November 23, 2006 in Psychology
Feedback from an old pro trader:
After over 30 years of being involved in the futures markets I have now
come to the conclusion that the old cliche about trading being 90% mental is
really true. As I have stated before Trend Following may not be
everyone’s cup of tea either because of emotional or perhaps financial issues,
but I can guarantee you one thing-trading AGAINST the trend in any time frame
will lead to a very short and painful trading career be it hourly or weekly. I
have been listening to some of my old "mental" tapes and here are the "Mental
Levels" of trading successfully.
Unconscious Incompetence: You don’t know it and you don’t
know you don’t know it.
Conscious Incompetence: You finally figure out you don’t
know it and are aware there is something you need to learn.
Conscious Competence: You now know it for the most part and
frankly this can be a difficult stage for some like me. I knew that I knew it
but if you still have to think about it "as in pulling the trigger" on a trade
things can still be difficult.
Unconscious Competence: Where I am now I don’t even think
about "it" I just do "it"! There are no parts of my brain screaming, "Is this
really a set up?" or "What if this does not work?” I have found myself in the
"flow" and have accepted that losing trades simply put me closer to winning
trades. I have also become more humble realizing what I had to go through to get
"here" and the funny thing is that I truly feel I have only scratched the
surface of what I have yet to know! Have a great trip to the Far East!