Are You Making Money?

I receive a lot of emails from traders asking for advice. As a full-time trader and trading coach my time is limited, but I do what I can and I reply to all emails. Besides my limited time, one of the difficulties in responding to these emails is not knowing much about the specific situation and history of the person except for what they happen to include in their email.

Yesterday I received an email from a trader who is frustrated and asked for some specific advice. He says he follows another trader on twitter who is ‘very successful’ but is wondering why he isn’t making money.  I get emails like this all the time, but this one was a bit different because he mentioned whom he specifically follows and also wrote that he has the exact same charts with similar levels to watch.

My email response:

“Here’s what I can tell you: 1) Every successful trader defines their success in different terms, and 2) Every successful trader has some “general” and some specific advice for others that sounds good but will probably have nothing to do with your own individual potential trading success.”

I hope he realizes what I meant in #2.

I also told him…
“Most people do not succeed at trading because they get in their own way and are unwilling to do the internal psychological work required to develop the right mind-set. Trading is unlike any other endeavor for a number of reasons, and I suspect you already have a sense what makes trading unique. Trading is simultaneously very simple and very complex.  Trading is also largely about tolerating and becoming comfortable operating in an uncertain and ambiguous environment. Simple and complex (there’s that annoying ambiguity again!). In fact, most successful traders have gone beyond tolerating and have learned to embrace uncertainty and ambiguity. For that reason, I believe trading is mostly psychological. Once you have a basic understanding of market dynamics and have a trading methodology, your methodology will only work if you have the right mind-set. Developing the proper mind-set is most often the missing link once you understand the market basics.”

That was part of what I told him.

And as I tweeted later, many if not most successful traders at some point along their journey realize that being motivated by money is necessary but not sufficient on its own. Working on oneself is often the missing link.  Or sometimes I like to say it this way, ‘learning what makes you tick will help you learn what makes the market tick and will make you a better trader’.

How does one do that, you ask?  It’s different for different people. One person may get what they need from reading a book, or talking to another trader, other traders need more of an action plan to change their thinking and subsequent behavior. One size does not fit all in trading.