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We spent the last article introducing the subject of guilty feelings and their affects on your trading. In Part II we try to identify the causes behind these feelings.

Why are you feeling this way? 

Could the money you just lost have been used somewhere else, for something more important? It’s important to realize that as a beginner, you should only be trading real money that you are absolutely ready to give up. You’ll naturally feel guilty losing money that you can’t afford. If this is your situation, you’ll need to reevaluate your live trading. Guilt will overcome you if your trading is damaging your financial well-being. Maybe it’s time for that weekend job flipping burgers or walking your neighbor’s dog. Why not?

Maybe your guilt comes from your parents or your need to uphold some moral guideline from your youth? It’s possible that you grew up with parents teaching you that money was sacred and you shouldn’t “gamble” it away. This belief is held my many and there’s nothing wrong with it. But (there’s always a ‘but’), as an up-and-coming trader, your perception of money must change if you hold this true. Professional traders view money purely as a way to get from point A to point B. Point A represents your money now, Point B presents your money now, too, but more of it! Money becomes your tool to make more money. And don’t think of your trading balance as money. Imagine you’re just using it simply to keep track of your trading progress. The higher your balance, the better you’re doing.

Finally, guilt could be a symptom of your need for perfection. Your guilty feelings come about because you consider trading errors and losses signs that you are an insufficient trader. And when the losses occur, you take them personally and develop an idea that you are a bad person and have no business trading. You’ve got to get it in your head that losses happen to everybody and it’s a part of trading. As with any sport or game, there are winners and losers; that’s a certainty. In trading, same thing – you win some, you lose some. And losing is inescapable. As a beginner, the losses will grow, but that doesn’t mean you’re insufficient as a person. It just means that you have more learning to do, more experience to gather under your belt, and other options to explore. Experienced traders fall into this as well. A severe string of losses occurs. They feel guilty and at fault for the outcome. Yet, it’s possible that market conditions are temporarily adjusting, and that their strategies must be updated accordingly. It doesn’t mean they’re deficient in their skills. 

My mother always used to say, “Be productive!” Guilt has a way of making you a sponge for negative thoughts about your trading. You sit there sulking around the office, reevaluating every decisions ever made to the point of a mad man. It’s definitely not a productivity producer. When it comes to trading, there isn’t always time to sit and dwell about the “could-have-beens” or “what-ifs”. Guilt can put us in our place at times. But with trading, understand that losses are routine, and anything that creates, ummm, un-productivity, needs to be controlled and dealt with. Become a problem solver rather than a problem dweller. Formulate new strategies, test new theories, and explore your options to keep guilt at bay.