Everyone knows the seven deadly sins: pride, envy, gluttony, lust, anger, greed, and sloth. But did you know there are commodities trading sins as well? Sins that are surprisingly similar to the seven sins, and that can be just as deadly to your commodities trading career. The commodities trading sins are: pride, envy, greed, and laziness. I`m sure there is a way to work in the other three if I really try, but let`s stick with these four, since they cause many traders a great deal of difficulty.
But when they get out of control, greed and fear are two of the basic psychological pitfalls that make traders fail.
Other pitfalls include:
1. Wanting to seem wise,
2. Not admitting to making mistakes (pride),
3. Trying to do what everyone else is doing because they seem to be doing better (envy),
4. Being unwilling to stop your commodities trading in case there is more money to be made (greed), OR
5. Being too willing to follow advice and not find out on your own when you trade (laziness).
If you want to improve as a trader, you must identify the mistakes you make consistently so that you can recognize your own stumbling blocks. Look back at the ten losing trades you`ve made in the last few weeks. Can you find any likenesses? Look closely and be honest with yourself. Part of being a good trader is being able to look at things with a clear eye and seeing what`s there, not what you wish was there.
Now this is harder: Look back at your recent successful trades and find the ones that succeeded only by luck. How would they have turned out if you hadn`t been lucky? What were your mistakes with those trades? If you`re not certain what your mistakes are, or how to correct them, read the next articles in this series. I`ll be discussing each sin separately, with tips on how to overcome them.
Your goal as a trader should not be to trade perfectly all the time, to win on every trade or to be perfect in any other way. Putting too much pressure on yourself to be perfect is one of the best ways to make many mistakes. Besides,, no one can be perfect. You don`t need to be perfect. You can make amazing amounts of money in the markets by being a good, consistent trader. As a trader, you`ll be richly rewarded if you do your job consistently and well. You`ll be doing far better than 99 percent of the other people trading stocks in the market, not to mention money managers, analysts, and other so called EXPERTS
The purpose of identifying your stumbling blocks in your commodities trading is not to make you feel like you`re a poor trader. All traders, even the best, have weaknesses, they just recognize and control those weaknesses. Instead, this process enables you to develop a realistic sense of your strengths and weaknesses so you can recognize mistakes before they happen. Being realistic, about yourself, about the market, and about the trades you make. This is the way to succeed as a trader.
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