limiting beliefs – 2nd Skies Trading

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Why We Are Afraid to Lose & How to Transform This Fear

Have you ever failed to the pull the trigger, even though your ideal setup was right in front of you? What about feeling paralyzed to hit the buy/sell button after a big loss? Have you noticed how your mind tends to race right before you fire off a trade as you think about your last loss?

All of these debilitating experiences tend to follow our fears, particularly being afraid to lose. Ironically, our ‘being afraid to lose’ often times goes beyond the potential loss of money. In most cases it has to do with something beyond the pure dollars at risk. In many cases, it becomes one of the primary hurdles a trader faces and never overcomes.

This article will first go into the underlying reasons why we are afraid to lose. Then I will share a method how to transform this fear to enhance your trading performance.

Behind The Curtain
In reality, there are several ‘reasons’ why we experience being afraid to lose when we are trading. A few examples are;

a) Perhaps we have an unconscious fear of making a mistake and what that might bring (i.e. a parental punishment)
b) We fear the potential loss in money and our ability to make it back
c) Making another mistake will only confirm our suspicion that we cannot trade

I could probably spend an entire day listing dozens of reasons why we experience this fear. But behind the curtain of it all I find are two variables which remain constant;

1) The anticipation of what has yet to come
&
2) An unconscious or limiting belief that perceives the potential outcome as a threat, dangerous or painful

The first one is something the Buddha once said, that ‘Fear is the anticipation of what has yet to come‘. Imagine if we approached our next trade and had no anticipation of what was to come next. We just trusted our system and pulled the trigger, then let the system play itself out.

More than likely you’d experience a lot less emotions and the debilitating physical responses that tend to affect our thinking. Although many people get this idea ‘intellectually’, it is easier said than done. Often it takes years of practice, training and experience to have happen moreso than not.

As to the second one regarding ‘unconscious or limiting beliefs’, most of the time, we are not just trading the price action setups in front of us – we are also trading our thoughts and beliefs about money, our ability to make money, what our perception is of our P&L, our current trading skill, and more. In most trading situations, we are not just trading setups at key levels – we are trading our unconscious limiting beliefs + our motivations for why we are trading.

How To Transform These Fears
There are three things you can do help reduce and transform these fears. They are;

1) Expand Self-Awareness

2) Awareness Practices In The Moment

3) ERT to Remove Unconscious or Limiting Beliefs

Expanding Self-Awareness
The first step to expanding your self-awareness is to recognize how our thinking, emotions and perceptions in the moment affect our interpretations of things, particularly related to trading. When you do this, you begin to realize how these ‘perceptions’ of your trading will color your experiences and memories around trading. This can have an empowering or debilitating effect on your trading performance.

A trading journal also helps us to see how our trading behaviors often repeat, and thus help us to become aware of the mistakes we make frequently. This is to help keep us honest and in check about how we are really doing from day to day.

Awareness Practices in the Moment
One awareness practice that helps us in the moment is a silent meditation practice. I am not talking about a guided visualization, but a mindfulness practice designed to help us become aware of our mind, thoughts and mental activity in the moment. By sitting every day before you start trading, you can calm your mind and see how the traffic of thoughts can affect your trading.

If you think your mind is busy while you are just sitting trying to focus on your breath while little to nothing is going on – imagine what its like during trading?

Meditation and mindfulness practices shed a light on how our mind works and is working in the moment. By having a contextual experience of calm, clarity and focus, you can recognize when you are not calm, clear and focused.

Also, meditation and mindfulness practices help tremendously in expanding your self-awareness, so taking out two stones with one.

ERT to Remove Unconscious / Limiting Beliefs
Sometimes we have unconscious or limiting beliefs which interfere tremendously with our trading. If you find yourself repeating the same mistake without knowing why, in 99% of the cases, it has to do with an unconscious or limiting belief.

Our mind stores memories like a bunch of pictures stuffed in a shoebox, so your memories around money when you were a kid could be right next to your memories around trading. Activating memories of one can excite the other, and thus affect your trading performance in real time.

These often take the longest to uncover, transform and remove, and could take years of both meditation and awareness practices. One short cut to this process is ERT Training which helps you to discover and transform them quickly. We actually have an ERT Training program specifically built for trading. Many traders have already gone through the program and noticed tremendous changes in their trading.

One final note about doing the three above is they inevitably lead to greater market awareness and more profitable trading. This comes from seeing more of what’s going on in the markets finding clues others would not since you are less inhibited by your fears. Intuition, confidence and your learning curve all tend to increase heavily when you build self-awareness, expand your awareness in the moment and remove your limiting beliefs.

Avoiding Losses in Trading

I had an interesting conversation with a developing trader about avoiding losses in forex trading. After discussing the subject with them for a few mins, I realized there seems to be a great misunderstanding about trading and losses. This is not surprising as there is a lot of sophomore information out there about these A+ setups, that good setups only occur on higher time frames, that you should only take these high quality signals. But this misses an essential point of trading and something that all professional traders understand.

The A+ Setups Myth
Beginning traders try to ‘avoid losses’ by waiting for these ‘A+ setups, trading like a sniper stuff‘. This is a big reason why they fail to make money. To trade successfully, you have to trade and think in probabilities. You cannot ‘avoid’ losses in forex trading. This fear, this rationalization & desire to avoid the inevitable, actually takes you away from a system that has an edge and understanding what is a high quality signal.

A great example of this is how a beginning trader wants to ‘avoid’ a loss by waiting for some perfect setup, as if trading is a fashion contest. They fear losing and thus rationalize not trading this setup which may have a lesser probability hit rate. But here is where so many beginning traders go wrong and what you want to avoid.

Understand What An Edge Is
If a system has a 33% win rate, this may seem low, but if it always hits a 4x target, (e.g. you risk 50 pips to get 200), then this system has an ‘edge’ and makes money over time. By waiting for these ‘A+ setups‘ and trying to ‘trade like a sniper‘, you avoid the trade because it is not A+ or high probability.

What this actually does is separate you from a system that is profitable over time, that has a mathematical edge, and makes money. Yet if you ‘avoid’ this trade because you want to ‘avoid losses’, then you are passing up a profitable equity curve which could provide consistent profits over time. It is critical to understand your edge, and trade it when it presents an opportunity.

But here is another crucial point about this topic.

You cannot ‘avoid’ losses at all in trading. Losses are part of the forex trading game. They are something you will have to get comfortable with, and not identify with, or value yourself based on the latest win or loss. Trading is really about getting comfortable with yourself, and getting comfortable with losses. They are going to happen just like the sun will rise and set.

Avoid the Misconception, Not Losses
Trying to ‘avoid’ that which is unavoidable will create a limiting belief in your head that only interferes with your trading. Understand that in reality, losses get you closer to your next win as you let the edge play out.

Don’t pass up an edge/system which makes money, simply to avoid the fear and psychological discomfort of the loss (which is really up to you how you experience them). Don’t fall for this ‘A+ setup, trade like a sniper motto‘, which is really a misunderstanding of trading professionally, and a sophomore understanding of it at best. So time to start thinking about trading on a new level, and avoiding the misconceptions about trading, not the losses.

If anything, you should avoid the mistake of thinking you can avoid losses, by only waiting for these magical A+ setups.

There is really nothing to avoid in trading, which is more about getting comfortable with uncertainty, and understanding losses are part of the game. When you start to do this, you will find yourself taking trades less personally, and executing with greater discipline, lesser emotions, and a clearer perspective on the what it is to trade professionally.

Forex Strategies, Trading Mindset & Risk Management

The Beggar and The Trader

There is a story about a beggar several hundred years ago from a small village. He was orphaned at a young age, and with no education and family, he had to fend for himself. He was reasonably intelligent and able, despite his challenging start. Living in a small village his whole life, since the village was abundant, he was able to beg for food and receive what he needed to survive.

He tried several times to find menial work to give him some basic subsistence, but was unable to find any.

Difficult Times
Later, some hard times fell upon the village, and many people were struggling. The beggar went around the village asking for food, but many were unable to offer him any. He went without food for some time, barely maintaining his energy living off what little he could find.
Eventually, after struggling for many months, unable to find any work, he decided to leave the village and go to another looking for food. Working his way up the mountain, unfortunately he was unable to find any food or work in the nearby villages after his repeated efforts.
Now days later, it was getting dark, he started to lose hope and realized the end may be near. He eventually found a cave which was empty to rest in, and spend his last moments. He was sad because he really felt he could do something in this world, but was unable to make things work.
Dark and barely able to see, he started to lie down on this rock, and noticed it was really warm. He thought to himself, ‘Oh wow, this rock is really warm. I am glad I was able to at least feel warmth while I rest here‘.
Shortly after closing his eyes and falling asleep – he died…
In the Very Same Cave
The next day, a group of explorers were looking for something on the mountain, and passed by the very same cave as the beggar just passed away in. As they entered the cave, they noticed a motionless person lying on a rock, and realized he had passed.
Out of respect, they decided to bury him, but when they moved his body, they noticed something that sparkled really bright. Under the man’s head where he was resting when he passed, was gold.

Akin to Beginning Traders
This story is very similar to many beginning traders who come to trade the forex market. They see the potential of what forex trading can offer, but stability, consistency and success seem just out of reach.
They often try a system for a short period of time, but then abandon it if it doesn’t make them a million dollars after a few months, let alone with the first few trades.
What many fail to realize, is that the actual gold they were looking for (a consistently profitable system), was right underneath them the entire time. They likely have been resting on something highly valuable, but because of doubt, limiting beliefs, and unrealistic expectations, are unable to see what is in front of them. When encountering obstacles, instead of working through them, they abandon their system, and look for the next best thing.
The Main Difference
I think the main difference between profitable and unsuccessful traders, is in how they approach the market. Consistently profitable traders do not analyze or value their abilities based on their last win or loss. They are trading and thinking in probabilities.
What the consistently profitable traders are willing to do, was to work through their obstacles and challenges. They understood what they have available to them, and work at it until they are successful. They realize the pot of gold has been right underneath them the entire time, and all they had to do was dig – long, hard, and with the unfailing belief they will get to the gold underneath them.

I know of no profession, sport or skill based endeavor you can enter, that within a few months, you are operating at a professional level. Yet many beginning traders quickly abandon something if it doesn’t create a 45+ degree equity curve and hit over 80% accuracy in the first month or two.
What has fascinated me, is how I could teach traders the exact same price action or ichimoku systems, yet get wildly different results, with some being highly profitable and consistent – while others not. Usually those who stick with it regardless of the results eventually find their ground, and start to trade consistently and successfully.
Imagine a World…
I cannot imagine a world where Benjamin Franklin gave up after his first few rejections and failures, or Einstein not pursuing science after failing to get accepted at the Swiss Polytechnic school, or Michael Jordan never playing basketball after failing to make the Varsity team in High School.

The good thing is, whatever is separating you from being consistently profitable at this moment, is completely learnable. The mind has neuroplasticity to it, & without a doubt you can learn to trade successfully.
So keep digging for your pot of gold. Work with a trading mentor, continue to improve your systems edge, money management, and building your successful traders mindset. You might just be surprised what you’ll find if you keep digging.

Forex Strategies, Trading Mindset & Risk Management

What Limits You From Trading Profitably?

The Question
I was recently talking with a student in one of my trading courses who is an eager beaver. They definitely have the desire to trade for a living, but I noticed something of a repeating pattern for them. They would constantly not trade the system as is, make modifications to it and adjust the risk parameters.

I have often wondered why a developing student who wants to learn how to trade, but hasn’t made it on their own, make all of these decisions which would hurt their trading.

I am certainly guilty of this in my early days, without a doubt. But like in Archery, I trusted my teacher, and decided to practice the technique he taught me. Originally, this was not the case, but he told me that when I can shoot consistently and the technique is 2nd nature, then I can bring in my own style. Until then, I followed his technique.

But the question has been with me for some time, as to why traders like myself (back in the day), or others would make decisions that obstruct them from the goal they so clearly want – to trade profitably and for a living.

The answer to this mercurial piece of the puzzle came together this past July.

A Weekend of Training
For about 6 weeks this last summer, I was on vacation in the US visiting family and friends. But for one weekend, I was in a training that helped me answer some long lasting questions about trading, for myself and my students as to why some do things which hurt the learning process.

The training was a QRA Level 1 intensive. QRA stands for Quantum Reflex Analysis and it was a weekend where I was pounded with information. QRA is based on Biophysics, particularly on the work by Fritz-Albert Popp, an award winning physicist with hundreds of publications.

QRA is mostly focused on the healing of physical illnesses, but also works on a psychological/emotional level.

Although I remember many things from the weekend, one moment stood out amongst the rest.

The trainer was talking about someone who had cancer that came to see the Doctor and head of the QRA program. They were wanting to get cured of their cancer, but the Doctor kept running into strange ‘blocks‘ in trying to help with the healing process. It dawned on him that the client actually had underlying psychological or limiting beliefs that were interfering with the healing process.

The Answer
Imagine – someone has cancer and they have tried everything to cure it, spending hundreds of thousands of dollars and going through tons of painful treatments and surgeries. They obviously want to live and want to be free from the disease. But the whole time, there was something interfering with the healing process – and it was them the entire time. It turns out they actually had a sub-conscious belief they did not deserve to live, and this program was running in the background the entire time.

Suddenly, the light went on and it all came clear to me – this is what happens to traders who use improper risk management even though they know the math is against them. This is what happens to traders who don’t trade the system, even though they know it makes money. This is what happens when;

-a trader jumps in too early, before they get a signal
-or chases a trend when they know they shouldn’t
-trades out of emotion, trying to get losses back when they have no signal
-overtrades
-adds to a losing trade
-gets over-confident and thinks they ‘got it’ after just a few months
-trades way beyond their position sizing
-takes profit before hitting their target
-doesn’t accept their risk and panics, exiting too early only to watch the trade run to their limit
-fails to pull the trigger when they do get a signal

You know the story, because it has happened to you, just as it has happened to me.

Have you ever wondered, why you make the decisions you do, even though you know they are not helpful to your trading?

Is it your fear that overcomes your clarity? Is it your impatience that overcomes your discipline? Why do you not prepare for your trading day when you know how challenging trading is?

Whatever it is, it is currently in you, in your psyche and wired into your brain, causing you to repeat many of the patterns that has held you back.

You have known this in some way (hopefully), but it is very possible (and likely) you have a program running in the background, which is interfering with you trading successfully and reaching your goals.

You Mean I Don’t Want to Be Successful?
It is actually possible (like the patient), some part of you does not want to trade successfully. It is actually possible, some part of you is afraid of being successful, of being wealthy, of being a disciplined trader, of reaching your goals. If any of these, or many other programs and unconscious beliefs are there, then they will always short circuit your process and efforts to trade profitably.

The good thing is – you can change all this. The brain has an ability to learn new things. It has neuro-plasticity, meaning it can be re-wired with amazing flexibility. You can learn new things at almost any age, you can increase your IQ, you can develop skills regardless of your background and training. Thus, regardless of what patterns and behaviors are inhibiting you, they can be re-written.

I have actually trained in both QRA and ERT (Emotional Repolarization Technique), doing dozens of sessions designed to re-wire my neural connections, to function in a more optimal state, in a whole-brain state, to remove any unconscious programs which would interfere with my trading, along with many other things.

If I could have started my entire trading career over, I would have started with this training from the very beginning. If I could recommend one thing to build a successful trading mentality, for those having psychological issues interfering with your trading, to combine with your learning process while working with a mentor, it would be this.

Two Questions
With all of that being said, I would like to end with two questions;

If you could watch yourself trade, like an observer, what advice would you give yourself?

and the other…

What would you do, study and train in order to trade successfully?

I hope you enjoyed this forex trader tip article, and that it has brought up some intriguing questions for you. Please feel free to share, along with your thoughts on the article.

Kind Regards,
Chris

Tag Archive for: limiting beliefs

Why We Are Afraid to Lose & How to Transform This Fear

Avoiding Losses in Trading

The Beggar and The Trader

What Limits You From Trading Profitably?

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