Everyone wants to say they’ve completed a marathon and check it off their bucket list. But few actually will train and have the perseverance to finish it. Everyone wants to be able to consistently make money from the stock market. But few are willing to put in the effort and dedication that is required. If it was easy, everyone would be a trader.
The stock market is mechanism of moving money from the lazy and unprepared to the patient and hard working. It is a zero-sum game. If you are slothful, you will always lose money in the markets in the long run. You will give all of your money to traders who have work ethic and a proven process. Here are the 3 most common reasons for slothfulness in the market, and what you need to do to avoid them:
A big reason why a lot of traders become slothful is because it is possible to make money from the markets without doing any work. If you chase a penny stock that’s up 500% without doing any research or technical analysis you could make money that one time.
This is the trap most new traders fall in. They make money without doing any work, and think that they can consistently achieve the same result. The reality is that they will lose money in the long run. The stock market is random. Theoretically a baby who knew how to use a computer could come into the market and make money on a trade.
One winning trade does not mean you are successful trader, or that you have a winning trading system. One losing trade doesn’t mean the opposite. Winning traders focus on their process, not on the outcomes of individual trades. They worry about developing a winning trading system that delivers them profits in the long run.
Slothful traders don’t do any work before the market opens. They wake up 15 minutes before the opening bell and look to a chatroom to tell them what to trade. They don’t have any process, but still wonder why they always lose money from the market.
The secret to successful trading is not what you do during market hours. It’s the time you put in after hours and pre-market. Winning traders plan out their trades before the market opens. When the market opens, they are just executing what they have already planned out, as opposed to trying to figure out what they are doing on the fly.
In addition to planning out your trades before the market opens, you need to be recording and reviewing your past trades as well. What is not measured cannot be improved. Slothful traders never review their past trades. They have an account at Tradingview, but they’ve only uploaded their trades once, and never looked at them. They don’t know where their edge lies, because they don’t take time to study which setups bring them success and which setups cost them money.
Reviewing your trades shows you what to do more of, and what to completely eliminate from your trading. Study your best trades and figure what you can do to replicate them in the future. Study your losing trades, and figure out what you can do to prevent them from reoccurring.
If you missed Day 3 where we discussed emotional attachment in trading, check out the article here.
We are doing a free web-class on December 17th where we will go over my after hours routine for preparing for the market open. We will go over all of the 7 sins in even more detail, show exactly how to overcome these, and build a bulletproof mindset. Mark it on your calendar and join us live.