Probably, you are well acquainted with the 7 Deadly Sins or spiritual shortcomings; however it might be helpful to briefly list them:
- Pride or vanity – an over-the-top belief in your own capabilities which dampens the individual’s perception of his/her relationship to a higher power.
- Envy – the craving for someone else’s circumstances, abilities, or stuff.
- Gluttony – wanting way more than you actually need in terms of food or any other consumable.
- Lust – craving more and more bodily pleasures, most often referring to sex.
- Anger or wrath – extreme annoyance with someone or something that you dislike.
- Greed also known as avarice – insatiability with regard to prosperity or wealth.
- Sloth – evading or dodging work.
So, what are the 7 Deadly Spins? These are obviously a loosely associated offshoot of the aforementioned title. They are this writer’s interpretation of some of the things traders tell themselves before, during or after they violate one of their trading rules.
- Just this one last time – Often said as a way to ease the emotional backlash associated with the violation. Of course, this is a lie that you tell yourself. Unfortunately, because you are reinforcing bad behavior, rather than it being anywhere close to the last time in most instances you will increase the incidence of this trading rule violation rather than decrease even one iota.
- It’s OK to do this if I make a profit – This is often said as a way to elevate obtaining a profit at all costs. This one may for many be slightly more difficult to wrap your head around. The long and short of it is that as a new trader you want to only focus on the process and not at all on the profit. This is true because investing emotionally or behaviorally in the outcome is necessarily negatively affecting your ability to maintain focus on what matters most…what you are doing which will make or break your outcome.
- I’ll write my Master Trade Plan as soon as I have more time, it’s more important to make some money now – This rationalization, like all of them, is designed to make the trader feel better about not doing something that is as important to your success as devising your blueprint of how you will achieve the trade goals that you have set. Your master plan or blueprint represents how you will move forward and supports your ability to align yourself in body, mind and emotions to go in the same direction and for the same goals. This aspect of trading cannot be over-emphasized.
- If I beat myself up enough I’ll stop doing this – Now, this thought/belief is often experienced on an unconscious level and is more felt than realized as a thought. The underlying point here is that you would not continue to disrespect yourself if there were no payoff or perceived benefit; which is the notion that self-punishment is a deterrent to doing things that you don’t want to continue. In the majority of instances self-punishment is not a deterrent. To prove this is true, just ask yourself how many times it has actually worked for you.
- The Core Strategy is just a guideline, surely I can make it better – Of course, with several years of trading you might be able to embellish on some of the aspects of the Core Strategy as it relates to how you trade; but surely not in the first few. It’s not a bad thing to have confidence in your abilities. However, true confidence is built upon competence – otherwise it is simply hubris to believe that with only an introduction into a strategy that took years of experience to develop, you can make appreciable improvements. Engaging in this type of folly will likely result in your downfall as a trader.
- All I need is one more indicator and I’ll turn the corner and be profitable – Analysis paralysis is arguably one of the most difficult trading pitfalls to avoid. In other words, if 3 indicators are good then 5 is better. Many, if not most of the high achieving traders will tell you that indicators are good but within limits because they are all lagging. Well, all are lagging except one, the price action, which is the only real-time indicator.
- Psychology!?! Just give me the secret, the magic indicator and I’ll be profitable – Well, the real tragedy here is that within the Core Strategy lies all that you need. If you can’t follow those clearly identified steps, then even if there were a magic indicator you would still be lacking due to an inability to follow trading rules and keep commitments. In other words, if you have difficulty in those two areas, which amounts to your ability to self-regulate internal impulses which cause you to do things that you say you don’t want to do or your psychology, then your ability to actually use the so-called magic indicator would be compromised. You’ve got to come to grips with why you are experiencing an inability to follow rules and keep commitments which is overwhelmingly due to internal issues and not the lack of veracity of the strategy.
Now, these deadly spins are not necessarily the top 7 issues or particularly your issues. They are meant to be a starting point for the conversation with yourself regarding results that you are experiencing and whether or not those outcomes are what you want. If you are not getting the results that you want then you must change something; and the best place to begin is inside; that is, your thinking. This is what we teach in Mastering the Mental Game, online and on-location classes. Ask you Online Trading Academy representative for more information; and get my book From Pain to Profit: Secrets of the Peak Performance Trader.