The first three stages are obstacles, while the second three involve the process of learning to trade.
The first, ownership, which we will cover in today's lesson, is the biggest roadblock, and the reason why most individuals fail to become successful traders. Ownership encompasses your belief that you own everything from the idea to become a trader, to the method you will use, to the time you trade, to the platform you use, down to the chair you sit in and the mouse you hold. You are not only attached to these components, you own them, and value them as such. Because of this it will be difficult, and in many cases nearly impossible for you to change any of them based on someone else's suggestion. This can be particularly so if the person making those suggestions is different than the type of person you would normally seek counsel from. The problems created by ownership, also known as "attachment" are ego related, and commonplace in individuals who trade only their own money. Some of the best examples of this I've seen were experienced traders coming off the trading floor who would not take the counsel of younger traders offering advice about trading on the screen. It is not easy for people to heed the advice of someone younger who they perceive to be not as knowledgeable or experienced as themselves, particularly when the advice is free. Our ego makes decisions for us regarding other people based on everything from age, to different politics, to physical appearance without a second thought. The idea of taking advice from someone different than us, let alone of being in a position of owing them a debt of gratitude, runs deeper than we know.
Traders who have been trained professionally to manage firm or customer money generally don't have ownership issues. They own none of the before mentioned components, and always know that if they aren't successful they will be fired. It is obviously much easier to be trained, have a funded account provided for you, and to be given your marching orders by professionals, than to do it on your own. There are no egos on a professional trading desk on the first day of a new month. Most professionals are comfortable in the knowledge they owe their paycheck to those who came before them.
What is the cure for "ownership" for people just learning to trade? Realize that it is ok to be thankful to others for their help, and there is nothing wrong with owing someone a debt of gratitude. Most of us find the idea of owing someone, particularly for something that led to us putting money in our pocket, burdensome; that type of thinking is a serious handicap. Not listening to someone who can contribute something you need, and avoiding being indebted to them for helping you because of your pride is destructive behavior that contributes to failure. For many of us just about every decision we make, or have made, is done with our emotional or physical well-being in mind; which is human nature. It goes against the grain, to ask for help, and then express nothing but honest gratitude in exchange, particularly when that help comes from a source we could not have predicted. An open mind will eventually overcome the attachment of perceived ownership and opinion.
Trading is a risky endeavor and not suitable for all investors.
To see Jay Norris highlight trade set-ups and signals in live markets during both U.S. day and evening sessions go to Live Market Exercise. Jay is a professor at IBUniversity, and the author of Mastering the Currency Market, McGraw-Hill, 2009 and Mastering Trade Selection and Management, McGraw-Hill, 2011.