Profits are never a guarantee in the various trading professions. If they were, you and your mother would be sitting next to each other making trillions of Euros while drinking a cup of tea or knitting a quilt. The guys and gals that have been in the business for some time make a big mistake from time to time, just like Joe Trader, and they pay the price, again just like Joe Trader. It happens to the professionals backed by the large financial institutions and it happens to the independent trader like you.
If you’re in one of those dreaded valleys again (rather than the much more desired peaks), don’t beat yourself up. It’s happened to everyone, and it will continue to happen to everyone. One the psychological side, though, feeling uneasy and weary about your lack of performance is understandable. And depending on the thickness of your skin and the width of your backbone, you may also feel a bit panicked about the situation. Facing any loss, especially when money is involved, is one of the most emotionally taxing matters to deal with. For the professional trader, life and limb is on the line. This is your job, your name, your business. For the part-timers, who wants to see their account balances dip and wonder what that money could have bought? For the inexperienced especially, it’s times like these where dealing with feelings of guilt and fear become troublesome. If you can’t get yourself on track, it might be the end of your trading career.
Losing money will make anyone feel uneasy or guilty. But for beginner traders, huge losses make them feel particularly guilty, more so than other more experienced traders. For some, it goes back to growing up and being taught by our parents to save the hard-earned money for a rainy day. Losing the money almost equates to breaking a family tradition we’ve lived by our entire life.
For short-term trading (the type of trading that many beginner traders are involved in), risking money is a necessity. And again, many believe this goes against how they were raised. Combine that with the ever-present pressures from family and friends when you tell them that you are becoming a trader or the “I-told-you-so” when you lose money, you’re almost set up from the started to feel guilty about what you’re doing.
But that comes with any trading you get involved in. If you want to make profits, you’ll have to risk money to get started. Whether the risk is small or big, that’s completely up to you and your strategy. And loses do occur. Everybody is going to lose money at some point. But should you feel guilty about this happening? No way! You have to take the position of a trader and understand this is business. If you still feel extreme guilt when you lose money, then it’s time to question your guilt.
Find out how by reading the next episode of Pipsychology, where we discuss the root-causes of your guilty feelings. See you back soon!