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Shoulda-Coulda-Woulda Mentality

Winners take credit for their successes and full responsibility for their losses. Losers blame others for their losses and take full credit for their successes. A "shoulda-coulda-woulda" mentality does more than characterize the losing trader, it prevents him from making positive behavioral changes. Acceptance of total personal responsibility is not an optional choice for a winner it is a mandatory obligation for all self-reliant traders who want to become winners. Winning creates positive expectations of future events usually from past self-generated positive experiences. Winners create their own positive self-fulfilling prophecies then turn these into reality.

Refusing to take full responsibility for losses is the sign of an immature trader. It is also a form of cheating. But the only one being cheated is the person refusing to admit it when he/she is wrong. Refusing to take full responsibility is a form of lying to oneself. It's bad enough to lie to others, but when you begin lying to yourself, who are you kidding? Telling yourself what is not true is a sure way to becoming a loser. It destroys self-confidence in a big way. If you can't believe yourself, how can you possibly have the self-confidence to become a winning trader?

Yet here at Trading Educators we often see that sort of self-fooling by others. We see people denying the trend. We see them extracting from the market only what they want to see. We see them projecting their opinion onto the market. We see them moving their protective stops to give the trade "a little more room." We see them convincing themselves that any minute now, the direction of prices will change and they will have been proven right.

I could go on and on with the things we see people do in order to make themselves feel good about what happened in a losing trade. But the relief is only temporary. Underneath it all, they are actually undermining the very thing they need to become successful. That is the ability to believe in themselves and know that what they are doing will win often enough and in amounts sufficient enough that they can prosper as winning traders.

If you've been kidding yourself about losses, stop immediately. It's time for a bit of self-examination. If you can't do that, there is little hope that you will turn out to be a winner in the business of trading.

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Monday, 27 May 2024

Derivative transactions, including futures, are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results, and all of which can adversely affect actual trading results. For more information, see the Risk Disclosure Statement for Futures and Options.