Why Professionals Lose In The Market

Trading is unique in many ways. It is not by accident that many of the people who are drawn to trading are successful people from other walks of life. After all, to trade you need some free capital. Many obtain this from running or selling successful businesses, or from high paying professions. The problem is that trading is unique from most other businesses...

Most of your previous successes in life will likely not be able to help you in trading. The things you have learned are often not transferable to trading. Worse than that, they may be harmful. Take the successful doctor. Every time his stop hits, he decides to add more shares. Why? To the skilled trader, this is a crime. To the doctor, this is a way of life; it is bred into his system. What is he thinking? He is thinking about 'saving the patient'. He is taught that the object of his attention must be saved at all costs, at all measures. To trade he has to adopt the philosophy of 'killing the patient at the first signs of ill health'. This appalls him at some level.

Consider the skilled lawyer. Taught to make a case and an argument for any possible situation. As his stock begins to fall, he comes up with dozens of ways to justify the position. He is skilled at 'making the case' and he does so for the stock as it begins to fall. 'They just had good news, the fundamentals are excellent, this is just a shake out, the operators are playing games'. He will use a thousand different arguments to stay with a loser.

Consider any successful businessman. Often in the beginning, success came by simply working harder. Putting in more hours, taking on more personally. Doing whatever it takes. Unfortunately, 'trading harder' is not even a working concept.

Consider the accountant. The accountant is a perfectionist with numbers. The thought of having 'red ink' on a trade can be hard to take. It forms the need to not take small stops, hoping that the ledger can show all winners today.

Consider the professional athlete. Losing is not an option. Unfortunately, in trading, losing is mandatory. Losing the right way is what matters, small amount on appropriate trades. Once a trade has stopped, it is a loss and the trader moves on. The trader knows that what matters is process that delivers winners over a period of times, not what happens on one trade. To the athlete, losing is not acceptable. It must be avoided at all costs, at all levels.

So what is helpful? Learning the whole process of trading. Learning from those who have been through it, or having the ability to learn and adapt quickly as you go. Having the mindset of having a plan, being able to adjust that plan, and carrying out the plan until the results are reached. Then constantly evaluating the process, eliminating mistakes and being mindful of the need to change and be flexible.

"Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan 'press on' has solved and always will solve the problems of the human race."

-Calvin Coolidge, former President of USA

This is a good warning to all. Many talents you may have may not directly contribute to your trading. An open mind, coupled with persistence and determination in your goal are keys to trading.

Ok now we can call them professional losers

Professional Losers Anonymous. Is It.?

I dont think they are anonymous they are everywhere.

This is an excellent article. Management books are all about how one has to go southwards to move northwards. Practical life works like that. The current PM,unleashed liberalization in 1992 only because the foreign exchange reserves situation was horribly bad- nobody could have followed any other policy and the reserves proved to be a blessing in disguise. There is a saying “Without danger, one cannot go beyond danger”
Even many stock market reforms have come after major scams.

Even in other spheres like the guys who won the nobel prize for DNA and Computer chip, by their own admission, they got creative ideas because they were not already qualified or too knolwedgeable on their subjects. In spirituality also they teach that if the cup is overfull, you can't fill it further.

Where trading is concerned, common sense says that losses are unavoidable since nobody can predict the market- people who fail are egoistic are those who try to fight the market which is like hammering yourself against a brick wall. Trading is actually good training for learning emotional intelligence and I am not joking.

Wow !!! The way u put ur point out really derseves a wow.

Nice article

Hi
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Regards
Mukeshsingh

we want to be professional earners?
wat to do for tat

1) don't loose the way professionals loose
2) do the opposite of what non-professionals (average investor/ new traders etc) do.

happy trading.