Reading the previous post about the five fundamentals of every profitable trading system, you may think that once you figure those out, you’ll become a profitable trader. The reality, however, is that finding your edge to plan the trade and executing that plan in real time are two different skills. If you need confirmation, just ask any pro athlete or their coach, whether their peak performance activity is a basketball game, a Counter-Strike match, or any other sport. As described in the bestselling book “The Talent Code” by Daniel Coyle. So you’ll likely make mistakes like impulsively entering trades outside your trading system, skipping trades, breaking trade management rules, taking on too much risk, or taking on too little risk. But you can’t afford these mistakes. If you follow your system, you’re the casino; if not, you’re just a player at the casino. And the casino always has the edge.

The Market is the end result of interactions among people with different positions, sizes, and time frames. You are coming to the market to make money, other people have the same agenda, and each investor constantly try to gain advantage over the others. So market evolved into an environment where you make mistakes – you do wrong things with wrong timings.It’s not that the market is against us; rather, it set us against ourselves. It may seem like a bit odd, but think carefully – you never know if your next trade will work, you do know that over a series of trades, your system has a positive expectancy. Also there’s only a small time window to enter a trade since markets tend to be highly efficient. Emotional roller coaster – high-risk decisions, made under pressure with insufficient information. (c) Adam Grimes. For instance, imagine you need to stick to your system, but you’ve just had ten losing trades in a row. How hard will it be to take the next trade? This can be emotionally tough, especially if you’re risking too much per trade. If you risked 2% of your capital per trade, you’re down 20%. If you risked 4%, you’ve lost 40%, nearly half. Under that pressure, will you skip the next good trade, take less risk, or exit too early? These are examples of impulsive behaviors that can hurt you; markets are highly random, so sticking to your system is crucial to avoid adding more randomness, or you won’t be able to analyze your results accurately.

One more thing: if we continue with the sports analogy, think of a boxer. First, he becomes skilled at the gym, then competes locally, wins nationally, and then, perhaps, becomes a world champion. Athletes are gradually guided through a series of opponents with appropriate skills, neither too high nor too low, to maintain their interest and avoid mental burnout from a series of failures. In sports, no one would let a beginner step into the ring with Klitschko, but in trading, you can. The market throws both pros and newbies into the same arena. Your orders go through the same exchanges as those of financial institutions, big hedge fund managers, and HFT programs, so your competitors have more capital, better education, sharper skills, and faster reactions. This is why trading is so difficult.

Have no illusions—at the beginning, you will lose a lot. Consistent losses are tough, and this is where many people crack mentally. You need resilience to endure the learning curve. And to be resilient, you must love the game, or you won’t be able to sustain motivation. But how do you love a game where you lose more than you win? The answer comes from sports psychology: focus on the process, not the money. The first step is to set up your trading training process correctly!

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