I wanted to provide some additional personal insights to a blog post by Toni Hansen recently entitled “Frustration in Achieving Trading Success,” which included personal statements of similar difficulties her journey to trading success.
I do recommend the entire post, but I wanted to highlight a few quotes for you:

“I think that nearly every single one of us has had to deal with that point in time where we have asked ourselves if it was worth it…. I know very few traders that are “a natural.”

Spot on. I think I’ve asked myself that question five times now. You get really down after a particularly horrid trade, or a series of smaller trades and you wonder why you’ve chosen this type of endeavor. It is SO much more difficult than the books and advertisements would have us believe. The ones who succeed are actually the ones who keep persisting despite doubts.

“With time though, as long as you [are] not flipping back and forth between strategies, then that comfort level will develop and you’ll find yourself not hesitating or making as many incorrect decisions.”

Early on, following my major trading loss, I jumped from strategy to strategy, book to book, seminar to seminar, and found that the more information I learned, the more hesitant/doubtful/scared I became.

I think at one point I had about 5 indicators on the screen and refused to enter a trade until all of them lined up. And when they all lined up, I’d look at the higher (or lower) time frame and decide that the other time frame had some sort of contradictory signal and I would sit aside.

I discovered the basics – trends, Dow Theory, price patterns, momentum etc – and committed to a specific strategy at the exclusion of all others. That helped build a solid, less volatile track record which also increased confidence in taking trades, and I stopped blaming myself (which was very difficult) when trades didn’t work. I realized truly that losses were necessary, did not mean I was less of a person, and that sometimes losses can provide information that the market is undergoing a change I need to be aware of.

“I remember that the one thing that always drove me insane was that I would find 6 or 7 great setups in a day and take 2 which underperformed and for whatever reason I simply could not pull the trigger on the others, even though I saw them develop and was convinced they would work. It was almost as if I could not take something that looked perfect and was settling for mediocre.”

I think Toni summarizes the entire “intermediate beginner’s” syndrome in that sentiment there. It’s not like I didn’t recognize set-ups when they occurred, but I would second-guess and decide to “let this be a time for me to see what happens” rather than participate and try to profit from the opportunity.

When one or two opportunities would have resulted in profit, I would force the next two or so trades and – you guessed it – end up with losses. That further complicated the process, in that I was seeing clear and profitable opportunities but every time I joined the market, I would lose or receive sub-par results. Even on the trades I won, I would take less profit than the signal (or target) afforded, afraid that the trade would reverse at any moment and my profit would be gone.

It took a while, but what really helped was learning from errors and studying why I did what I did and focusing on personality/psychology/risk etc. Also, it helped immensely to categorize and annotate each trading day for a variety of stocks to see intraday patterns (or daily chart patterns) in a series of files I called “Ideal Trades of the Day” based on my perception of opportunity and understanding of market/price principles.

By physically seeing trades from start to finish, complete with stops and targets, and seeing how many worked out had the “thrill of the order entry screen and rapid price movement” been removed, I began to rise above the fog of war to see the charts and the patterns more clearly.

It still took time, and I’m still improving each day and each week, and I know that 100% consistency is an unrealistic goal, but I try to take perhaps 75% of the ideal set-ups I see and reward myself when I do so. I’ve stopped berating myself when I miss out or hesitate and have learned to trade more relaxed and removed from the money.

That’s also what struck me is seeing actual money vanish before my eyes. Sometimes turning off the “actual dollar gain/loss” window of your account can help, provided you focus on the charts and perceived price opportunities.

Realize you’re committed for a lengthy but rewarding endeavor and don’t give up when doubts creep in. Take some time off if need be and re-focus, but always come back.

And do try to have fun along the way!