One of the biggest problems I see with traders is that they refuse to forgive themselves for trading mistakes. This causes a much bigger problem than most people realize. You see, when you make a trading mistake, you need to forgive yourself for making that mistake.
But the thing is many people do not forgive themselves for their mistakes. In fact, they do quite the opposite. They beat themselves up and continually picture what they did wrong in vivid detail. This is the very worst thing you can do after making a mistake, trading or otherwise.
Forgiveness is a key concept in Psycho-Cybernetics. As we’ve just learned about how our subconscious works, we know that if we continually picture in vivid detail something, it causes that picture to come true for us. Or it at least makes it much more likely for it to come true. So it only makes sense that if we make a mistake, we must forget that mistake and forgive ourselves completely. If, on the other hand, we don’t forgive ourselves and relive the mistake in our minds again and again, what do you think is going to happen?
It’s obvious that we will repeat the mistake. This happens because our subconscious does not care whether we give it good or bad information, it simply sees the clear pictures we give it and tries to act it out in our lives. Obviously, it can only act this picture out if it’s within our capabilities. And I think we all know that making trading mistakes is quite within our capabilities.
This is the reason it is so important to forgive ourselves when we make a mistake or an error. If we don’t, we are likely to relive the mistake in our minds and then most likely project it onto our trading. This will cause big problems.
If you think back, I’m sure can you think of times where you made mistakes and beat yourself up for it. Not forgiving yourself, no matter what the mistake, will bring out the worst emotions. Remorse, regret, self-doubt, and guilt all come with not forgiving ourselves for a past mistake.
You’ve heard it all before. I’m sure you’ve been told to forget a past losing trade and move on to the next one. Emotions are used correctly and appropriately when it applies to something in the present time. Since we cannot live in the past, we can’t appropriately react emotionally to the past.
As Dr. Maltz says, “The past can be simply written off, closed, forgotten, insofar as our emotional reactions are concerned. We do not need to take an emotional position one way or the other regarding detours that might have taken us off course in the past. The important thing is our present direction and our present goal. We need to recognize our own errors as mistakes.
Otherwise, we could not correct our course and steering or guidance would be impossible. But it is futile and fatal to hate or condemn ourselves for our mistakes.”
One of the biggest reasons people get into losing streaks while trading is because they confuse their losing trades with themselves. In other words, we conclude that because we had a losing trade or a series of losing trades, we are a losing trader.
But the important thing to remember here is we are not our losing trades. Losing trades are part of trading. There isn’t a single trader in the world who doesn’t have losing trades. The only way to avoid them is not to trade in the first place. You cannot be a successful trader until you take mistakes and losing trades for what they really are. They are simply by-products in the trading game and need to be used to gain learning and understanding. But in no way do they define us as a person.
But that is where the big problem comes in. Many people let their losing trades and mistakes define them. If they’re having trouble and have had a series of losing trades, they start to think of themselves as a loser. They continually think of themselves in that way. As we know from before, this kind of thinking will just bring on more of the same.
Forgiving yourself completely is the only way to avoid this trouble. You are not your mistakes and losing trades. You must put the past behind you and go forward. Holding a grudge against yourself only hurts yourself. Forgive yourself, it’s the only way to be successful.