Last updated on April 15th, 2020
At the heart of every trader’s endeavor is the struggle to turn their trading knowledge into concrete success trading the markets. This is always a learning phase and in trading, the phase is about gaining knowledge about the nature of the markets.
From that, a way of trading can develop.
But be clear, you can have trading knowledge but that does not equal a straight line to being a profitable trader.
In fact, even after several years of trying, many still struggle to attain any level of trading success and profitability.
- Is this because they’ve not learned enough?
- Is it because they’ve got too many distractions in their life?
- Is it because they’re just not cut out for trading? Any of these might apply.
In many cases none of them apply. Yet there is still a disconnect between knowledge and performance. But trading is certainly not the sole source of frustration in people’s lives.
Diet, exercise, smoking, drinking and many other things which are far simpler than trading, end up being lifelong struggles for many. This is what makes the subject so fascinating.
Trading Knowledge Begins The Success Process
A tremendous amount of frustration stems from the fact that although there are numerous facets to organize in order to give yourself the very best opportunity to capitalize each time your trading edge shows up, each one is relatively simple.
Of course an argument can be made on the relative degree of complexity requisite for the mastery of each part of the process.
However, many still fail at even the most basic level. If the basic level can not be tackled with success, the more intricate levels are sure to be a huge struggle.
But let’s be clear….
It’s not through ineptitude – it’s due to the process breaking down.
Be in no doubt that the organization of your trading universe can play a critical role in enabling success. It’s no coincidence that Van Tharp has the Planning Trader as one of the two types of trader with the highest potential for success.
Effective organization allows you to get to the end of the loop and start again.
Settle Back Into Your Natural Rhythm
I am convinced that a large part of the problem is that the when things go wrong, it is far easier to fall back into a natural state of being than to persist with what you are currently doing – and if the natural state is unproductive, subsequent success is obviously going to be made more difficult.
So the question is one of how to change what comes naturally.
If you notice where I’ve positioned belief in the process, you’ll see that it’s right at the very end. This is perhaps why so many fail to really get going with their trading in the first place.
In my experience, it is belief which allows desire and commitment to take an iron grip on the rest of the process – without these, there’s a greater chance the rest of the process will break down and a trader will struggle to achieve the consistent results they desire.
What I mean by belief is the confidence in your own ability to execute and in the efficacy of your strategies.
It is my conviction that genuine belief is only generated by the observation of your own results over time. Of course it can be of benefit to back-test and this will create a certain type of confidence – but true belief is built from experience.
It is built over time. It’s built through repeated proof that you have taken your trading knowledge and are slowly building it into the success you seek.
It is added to and as importantly, it is also taken away from. This is why it’s so important to have each part of the process loop well organized and functioning correctly.
Do You Have True Belief That You Will Succeed?
Belief allows you to act in a certain way in the face of uncertainty on that oh so very hard, right edge. It allows you to accept the possibility of a loss and to humbly take one when it comes your way.
It gives you the dogged tenacity to embrace your trading plan more than ever when you make costly errors, instead of abandoning the very foundations from which you are striving to achieve your success.
Belief generates consistent action and this is vital in changing your natural state. By acting consistently we are able to form habits. Some habits are strong and some are weak, but over time, they can get stronger. If you tend to the process loop well, you can create strong and valuable habits.
If you leave it to chance, you may find that your habits hinder your progress.
All Success Comes From Habits That Aid In The Process
In essence, we are but a sum of our habits.
As we live we form new ones and together with those which we have already developed, our actions are largely orchestrated without the need to consciously make decisions. Trading is a profession where many habits which serve people well in broader society, can be problematic.
Changing these and creating new and useful habits boils down to keen organization, the development of belief through process and repetition over time.
Of course there are many other cogs to the machine, but if you adhere to this outline, you will find that you will be able to more consistently do the things which you already know to be helpful – and in time, you will turn your knowledge into trading success.