The Evils of Trading You Must Avoid At All Costs
Trading has a dark side. You might already be familiar with it. There are certain ‘evils’ that we are all susceptible to as traders, and you have to deal with them, or they will deal with you.
Our brains are like sponges, absorbing everything we put into them. Whilst this is obviously good in most regards, it can be detrimental to success as a trader. You’ve got to learn to filter out the unnecessary variables from your trading, because if you let your ‘sponge’ get too full, it will become over-saturated and you won’t be able to do anything with it.
Specifically, you’ve got to learn that not everything you come across in the trading realm is worth thinking about, or even considering. The following points discuss some of the evilest trading ‘evils’ that you need to avoid getting ‘possessed’ by, at all costs.
News and Financial Media is Toxic
If you watch the financial news or read financial media publications on or offline, if that news and information is negative, you will become negative about the stock you have invested in, you will become negative about the currency pair or commodity you have traded and so on. Conversely, if that news and information is positive, you will become positive about your trading and investing decisions.
Even a professional seasoned industry veteran will still be influenced by information they are exposed to. The problem with main stream media is that it’s typically produced by people that are not traders and not investors, it’s journalistic content, and created to ‘make the news’…it’s generally always far from accurate and usually after the fact. This is why you’ve probably heard the old saying, “Buy the rumor, sell the news”.
In regards to swing trading, there’s really no point in worrying about economic news events or trying to ‘trade the news’. The more time you put into trying to figure out how XYZ event might affect a particular market, the more likely you are to lose money by over-trading or making a stupid trading mistake. News and really all variables that move a market, are reflected on the raw price action charts of a market, so there’s really just no point in trying to take on the extra analysis of thinking about the news. It’s simply a distraction and a waste of your time and mental energy, and ultimately, it’s a waste of your money.
Screen watching creates trade-aholics
Even if you tell yourself you’re not a day trader/ scalper / gambler, if you watch 1 minute or 5 minute charts all day (lower timeframes), and if you’re watching 20 different charts tiled over your computer screen, you’re going to eventually become a day trading gambler. You can’t say you’re a swing trader who trades higher time frames and still watch lower time frames and hundreds of markets all day every day for ‘entertainment’ sake. It leads to addictive trading behavior which includes unplanned / spur of the moment stupid trades, gamblers addiction (looking for the next high), and so on.
If you sit there for hours on end trying to ‘figure out’ what the 5 minute chart is going to do next, hoping to scalp 10 pips here and 20 pips there, you’re quickly going to find yourself in your doctor’s office asking him for a prescription for Xanax or some other anxiety-reducing drug. You can literally drive yourself mad sitting around watching low time frame charts all day.
Giving in to Greed
I see it all the time. Traders write in to me, explaining how they did very well for a few months and then it “all fell apart”. They lost all their trading profits that they worked so hard for over the last few months, on one or two trades. They did this because they gave into what is perhaps the most dangerous of all ‘trading evils’; greed.
Trading can obviously bring out the greedy side in us. We think to ourselves, “If I can just make XYZ amount of money on this trade, then I’ll start managing my risk properly”. However, that time never comes, because once you put yourself in the mindset of risking more than you are comfortable with losing, you push yourself into an extremely dangerous cycle of emotional trading.
All of the trading ‘evils’ discussed in this lesson are very important to avoid, but if you could only pick one to avoid, it should be greed. You will not make consistent money in the market being greedy. You may do well for a while, but eventually greed will come back to bite you and will result in a blown out trading account.
Following multiple trading strategies doesn’t work
People are exposed to a lot of trading strategies, ideas and philosophies about trading around the internet and from various books, seminars, webinars and so on. For a beginner there is no way you can be confident that this information is real or if it’s the right way to trade or the wrong way to trade, there is a leap of faith a trader takes. The problem with most people is that they take that leap of faith, try a method and study it and then they quickly move on and start ‘adding’ methods and ideas together. I see it all the time, a student joins up to learn my trading strategy, sends in a chart with a question and on that chart are 2 indicators, an ‘a b c Elliot Wave’ annotated on the chart and a squiggly line with 3 beautiful colors I have never seen before, a few trend lines, a few pivot points, and so on.
If you only learned one thing from me and never came back to this site, please take my advice and do not combine multiple trading methods. If what you were doing was working for you previously, why would you be here looking for something else? Think about it logically!
If you have taken yet another leap of faith and are here wanting to learn what you now believe is the right way to trade (i.e. my price action trading methods), then leave all your prior knowledge at the door, leave the ego at the door, leave the analytical obsessive-compulsive behavior behind, let go of this compulsive obsession to find a use for ‘everything you have ever learned … it’s time to start with a fresh outlook and perspective, be a blank canvas, wipe the slate clean and allow your mind to re-learn and evolve into the trading powerhouse you know you can and need to become.
Not trusting yourself
Another dangerous ‘evil’ to give into when trading, is not trusting yourself. You have to trust what you know and trust your trading abilities. If you are constantly influenced by other people’s opinions, you won’t last long in the market.
Trading is an intensely personal journey, and you ultimately need to develop an intimate feel for the market and get ‘in the zone’. If you allow others’ opinions to influence you, it will really do nothing but corrupt your own personal sense of the market and what it’s doing / where it might go next. Everyone has an opinion on the market, but what matters is whether or not you can trust yourself and rely on your own trading abilities and decisions, not someone else’s.
If you don’t have the self-discipline to stick to your trades and see your trading edge play out over a large series of trades, you will never make money over the long-run.
Learn an effective trading method like the price action strategies I teach in my trading course, make it make sense to you, get in touch with the ebb and flow of the market (in the zone), and then to hell with everyone else. Remember, opinions are a dime a dozen, real consistent trading results are not built on other people’s opinions, they are built on you trusting yourself and your trading method.
It’s hard for people to accept that what they had been studying or what they had been doing for many years is probably a complete waste of time and probably toxic financially and emotionally. As humans and as traders, we have an attachment to the journey we have taken so far (even if we know it was wrong or leading to losses and toxic behavior), we have an ego and we can’t let go. Well, today, right now, I want you to face whatever ‘evil’ has been holding you back and banish it from your life forever. You need to get out of your own way and stop making ‘unforced trading errors’ if you ever want to have a real shot at long-term trading success.
36 Comments Leave a Comment
I need to come back and read this article again, one time is not enough.
Another gem from the coach. I have no regret choosing you as my Forex mentor and instructor. Frankly, my trading results have taken a positive turn simply because i chose to follow your trading principles.
Thanks a million for your noble effort towards liberating the trading community from the shackles of frustrations of unending losses in Forex trading.
This is a lesson that will be sooo useful that I will continue make reference to.
I really like this guy. most of the things he’s telling i learned them on my demo acc and He’s right always. This is a type of mentor who’s intention is to see you succeed than the rest. Nial I said it you are an excellent mentor and i am joining your team soon.
You are so right Nail
Nail, you are a mentor indeed. Your article is educative. That was the mistake I used to make, but now am following your advice, wish to have this since. God bless you.
Thanks Sir. This is another great lesson, very educative..keep
the good work and God bless you.
Been there done that got the tee shirt
Martin from Nigeria.
Hey, Nial you’ve really improved me on my strategies through your articles, infact kudos.
Keep the fire burning, you are the best i’ve ever come across.
Great article as usual, Nial.
Yes Sir you are right. I keep coming back to your website and enjoy so much. Thank you.
Great lesson Everyone should know a novice trader, the most important thing. The only problem is that a beginner looking for a “grail” in the trade, and the grail – is knowing yourself first, emotional control, control over the mind. I am grateful to you all Nial all your training me, and how are you doing out of the ordinary man – the Personality. Thanks Nial.!!
Thank you very much for you nicely explained ariticle
on reckless trading & indeed it goes a long way in our trading career !
Thanks Nial for hitting home with the hammer yet again.
You could rewrite all of your posts a hundred times over and they would still be of great value. We tend to forget with our day to day needs of life.
Repetition of learning will eventually sink in. ( to our thick skulls)
Keep on writing these valuable lessons.
Thanks so much everything said here is so true
Vancouver, bc Canada
Good article Nials makes good sense. Every time I get away from what I know works and start wasting time on something else, it really affects me mentally in a bad way. I start feeling down about trading from awhile. Then I get back on track everything feels good again and feel I can be successful at trading and produce an income I’m looking for.
Thanks Nial. As always your articles continue to encourage me as a trader with today’s lesson reinforcing the values of oneself in trading the markets.
Probably the best trading logic I have ever read.
Very many thanks Nial.
Thanks, for yet another encouraging article.- sharing your wisdom
so generously with traders.
A good one as always Mr fuller
thank you my dear friend
you are the best
Its makes good sense in any business for one to succeed is to stick to you guns , just like you put simple by saying giving in to greed.this to me is the worst off all
Very Good ^^
Nice to be reminded of some of these TRADE LOSING thoughts, Follow the Trend, trade Daily charts, Price action entries only……thats it ……… Thanks Nial…..
Thanks a lot ! Very helpful!
Wasted so many time watching 1H, 30M, and 15M even 5M making and giving back profit to the market for no pay. Such a cheerful giver…..burn more than 7 trading accounts, though no funding more than I am comfortable to part with. Thinking it was brokers manipulation why I am not making any success…. But I kept reading your time publication yet could not break free abdiction to gambling below 1H chart….. I have to close my pc change my phone n stay clear from trading for about eight months or more in order to unlearn for me to learn your advices on PRICE ACTION trading and to trade in my own way using only one indicator with no chart below 4H. Trading Daily chart has save me time and time and also my internet subsription. I have my trading style now and if my edge did not show at one time it may show the next time or even next. No more compiting with the market to change my living standard any more. Slow and steady win the race.
Thank very much. Keep changing people’s mindset about trading.
Onungwe Baah, Nigeria.
it’s time to start with a fresh outlook and perspective
Keep that momentum going! Great work Nial!
Thank you Sir, your lecture is very conscience and rich. I appreciate it,. With people like you, there is a light at the end of the tunnel. Keep it up Sir!
Was just going through my charts now with all you just said above in mind. it has certainly strengthen my resolve. cant remember the last time i checked even one hour timeframe. And i dont bother with the news too, all thanks to you nial
You are the best Boss !!!!
Keep it up. You’re doing a great job of enlightenment.
Another great article.
Also, really like the new format of your website.
Good advice for both the beginner and the experienced. Very hard to recognize you
have cluttered up your trading plan and developed some nasty bad habits. Always liked
the KISS principle (Keep It Simple Stupid) .
Yes sir…i am the one of it. Wanted to be a swing trader but still look at lower time frame. I was inspired after reading your post and trying to be a trader with minimum loss but higher profit. And thank you for your sharing.