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The Key to Success in Trading

The short answer is, there really isn't one, especially if that's your sole pursuit.

It's a paradox, if you try to use trading to create success out of thin air, the odds will be against you.

That's because the way you define success is important. Do you have to be right in order to be a successful trader? If you think that's true, you will be exposed to all sorts of psychological issues which will wipe you out eventually.

If you are inherently successful to begin with, a losing trade won't stick with you for long because it doesn't change who you actually are. If your emotions are controlled by the close of the Dow every day, you've got issues.

Dr. Brett exhibits this nicely in his book The Psychology of Trading
:

Online chatrooms and bulletin boards are filled with lonely, frustrated traders who live for their trading and have precious little to show for their lives if their trading falls short of expectations. Successful traders don't need to trade to be successful; their trading success is an extension of -- and is permitted by-- their other life accomplishments. The markets can be challenging, rewarding arenas; but they are not life and they cannot fulfill the panoply of legitimate human needs. To pursue one's development as a trader at the expense of one's personal development is to court the very emotional interference that generates inconsistent, substandard results.

This passage was one of my "a-ha" moments. If you don't excel in other areas on your life and need trading to fill that hole, you will suffer. If you treat trading as a reflection of who you are already, it will put you on the path to become a much more profitable trader.

by Steven Place

Steven Place is the founder and head trader at investingwithoptions.com/