I know you're probably saying, "C'mon Dr. P., who doesn't want to succeed?" As silly as it sounds, the fear of success is as real as the fear of failure for some people.
In fact, I would argue that it is more detrimental than the latter because it is rooted in the subconscious. Everybody says they want to be successful, but some people fear the changes that success may bring.
The idea is not as silly as it sounds if you really think about it.
With success come higher expectations. Take for example an athlete who just ran a mile in under 6 minutes. Chances are that the athlete will set the bar high on his next run and try to surpass his performance.
This builds pressure on him to perform better than the last time. For some people, this is enough to keep them from even trying. The athlete might fear that if he tries again, he would come up short and start thinking that perhaps the first time was a fluke, so he would just rather sit on the sidelines.
These situations aren't rare. After all, most of us grew up being told that we need to give it our all, avoid losing, and always strive to be winners. This pressure to succeed makes trading all the more difficult because even though you give your best, you could never completely avoid losses and you can't win all of your trades.
I guess you can say that the fear of success is rooted in the anxiety of being on the wrong side of a trade. I often hear stories of traders passing on the chance to pull the trigger on a setup they're familiar with because they think their analysis could be wrong. A couple of hours later, they beat themselves up for not taking trades that could've been winners.
So what can we do to overcome the fear of success? Here are three tips:
1) Forget the profits, focus on the process!
The problem with many traders is that they focus way too much on the monetary results of their trading. Once they hit a losing streak, their confidence gets shattered and this negatively affects the way they trade. Sometimes, they result to taking cowboy trades (i.e., "bet the farm type" trades) or refrain from taking setups that they would normally take.
The solution to this is to keep the potential profits (or losses) out of mind and make sure that you follow your trading plans. By doing so, not only will the pressure to perform lighten up, you will learn what can be improved with your trading plan and methods, which improves your chances of long-term success.
2) Keep an open mind
Always keep in mind that market behavior is always changing, which means that you will have to adjust your trading as well.
Do not be afraid to feel like a noob and accept the fact that there will be a lot of instances when the market will prove you wrong. If you stubbornly hold on to your trending style system in a ranging market just to prove your system works, you will be burned badly.
Learn to let go of your need to "always be right." This will relieve you of the pressure of always being successful and will free your mind to focus on what's happening in the markets and adjust accordingly.
3) Set realistic goals
Not only do goals represent your expectations, but they also help close the gap between your aspirations and reality. If you set unrealistic expectations - like winning every single trade, for example - you may be setting yourself up for a ton of disappointment. This could spiral into a negative mental state and affect your decision making abilities.
By setting goals, you can begin to distinguish how far you are away from realizing them. The question is, are you willing to do what it takes to reach those goals? If not, it might be best to readjust your expectations.
At the same time though, don't sell yourself short! The best traders do not think about failure - they set difficult but reachable goals, knowing that this will also serve as motivation for them to keep pushing forward.
In the end, it will all come down to how much you believe in yourself. Successful traders are the ones who set plans and stick to them! They know why they're trading, use this to fuel their motivation, and help themselves rise above all the challenges they may encounter.
Successful traders do not back down from success - they plan for it and embrace it.
- 3 Common Trading Expectations That Lead to Disappointment 14:00 16 September 2011
- 3 Ways to Develop Confidence in Trading 13:00 13 May 2011
- 5 Traits that Successful Traders Share with Elite Athletes 14:00 16 December 2011
- 5 Ways to Overcome Performance Anxiety in Trading 14:00 15 June 2012
- Set Trading Goals That Work 15:00 07 January 2011