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Trading psychology: 4 internal hurdles that affect trading success

These internal hurdles set back personal trading performance

Is trading success determined by nature or nurture? Certainly there are personal traits that are a ‘gift’ to some traders and there are those that handicap others. Good thing is traits are not cast in stone. With determination and help, individuals can modify their own behaviour. (My colleague wrote ‘Internal hurdles on the road to successful forex trading‘ – this is a sequel.)

 

Internal hurdle #1 – Cannot follow rule

Picture of jaywalkers under an overhead bridge

In a traffic system that has clear rules, there are still individuals who choose not to comply at the risk of their own safety

  1. Act according to personal whims
  2. Harmful, self-destructive behaviour
  3. Unable to follow plan

 

Internal hurdle #2 – Like to catch a falling knife

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Catching a falling knife really hurts

  1. Catching low is a phenomenon that happens more often in the stock market among individual investors than in forex trading.
  2. Cheap can get cheaper.
  3. Then when price is zero, well it is really really cheap.

 

If hurdles 1 and 2 are most associated with individuals who have very strong opinion about what they want to do or achieve, the next two hurdles are likely to be associated with followers.

 

Internal hurdle #3 – Following the wrong crowd


 

  1. As we can see from 0:40 – 2:02 if jumping over the cliff did not kill, bravely swimming to where no one has swam before will.
  2. You jump I jump‘.

 

Internal hurdle #4 – No conviction

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Eternally in a different state and always out of phase

  1. This one lacks conviction to follow and jump and lacks conviction to NOT follow and jump

Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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2 thoughts on “Trading psychology: 4 internal hurdles that affect trading success”

  1. jayromelai says:

    I was like this , through all the stages before .
     
    1. Never follow rules ( after attending the course , followed the rules , earn the money already , then start to think about funny things , then break rules. punished by market for not following rules , go back to following rules
     
    2. Catch a falling knife and following wrong crowd – did that even before taking Tflow Course , when first started to trade more seriously during university days. sigh… A typical conversation would be a such
     
    Broker : Eh you can take this counter A , sure move one !
     
    Me : oh ook ook , steady i take
     
    Broker : ya , so low already , this one sure go up one ! I heard from xxx , sure go up
     
    Me: oh like that add more lots for me !
     
    3. No conviction – this would plague me when the set ups and analysis are not done properly . Trust the method and system. #TFLOW

  2. jeannie says:

    thanks for summarizing it so well. I couldn’t agree more, however to a certain extent these lessons must be experienced first-hand (on live accounts) to be fully understood and appreciated. I think the key is to realise this quickly in the beginning stages so that you only pay a small price to learn!

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