The root cause of failure in day trading.
With nearly 9 years of trading along side with thousands of stock traders and watching them come and go, one constant has remained: traders do indeed come and go. The standard excuse used is, “trading is hard”, but, what is the root cause of why trading is hard, and can we figure that out? I think we can.
I have given a lot of serious thought on this topic, especially as many traders continue struggle to post gains after a very turbulent last couple years. A lot of it comes down two core challenges that I am aiming to solve with Plan and Trade.
The first problem is something every trader has faced and that’s the fear of missing out, or commonly referred as FOMO. This is a very unnecessary issue, but as traders we make the fear of missing out a much bigger problem due constantly sharing, comparing, marketing and boasting about profits on social media and trading communities. Consider this, if you didn’t know what other traders made on a stock that just doubled, for example, would you have FOMO? Perhaps, but, would you have a lot less of it? I think so. If you see traders posting big gains (whether they are real or not, you have no idea and is another part of the problem) and you missed the move, what happens to you? Well, you become very much emotionally hijacked at this point unless you can center yourself maintain discipline again. Veteran traders understand this but still fall victim to the fear of missing out. Why? You can thank emotions for that. At Plan and Trade, we strive to reduce these negative experiences by eliminating a lot of what causes it.
The second problem is a total lack of understanding when momentum shifts in and out of ones favor. A lot of this can come with experience or education but, traders can still get tripped up even with a lot of both. It’s very easy to make a costly mistake that takes just one second to make. At Plan and Trade, I am look for the big picture and strive to avoid a lot of the trading scenarios that both amateur and even experienced traders can get caught in due to their emotions, greed, second guessing themselves, not being focused or being in a toxic or immature community.
You can see the pattern already (pun not intended), traders are essentially trading against themselves and If your emotions are not in check and if you are not aware of your mental state, you will have a very difficult time becoming a consistent trader.
At Plan and Trade, I aim to solve this. If you have struggled by yourself, or within a community of traders and constantly find yourself giving into fear of missing out or not understanding the big picture. I challenge you to become a more disciplined trader by subscribing to Plan and Trade. Join me and other serious traders daily.