Last winter

16 เม.ย. 2022

Traders often make the mistake of taking profits too early and taking losses too late. Why is that? Because they have no incentive to follow the trading rules. They knew the rules but did not use them to trade.

If you trade on a 1 to 3 risk/reward ratio, the average gain on each trade should be at least three times the loss. However, when the ratio changes to 1:2, traders often can't tolerate a bit of negative movement. His subconscious projected pain and floated a lot of false information, and in fear and confusion, at the slightest sign of an adverse move, he hastily closed the position, perhaps making a 1:1.5 trade. When the price recovered and reached its original target of 1:3, he could only curse.

Moreover, when a stop loss level is hit immediately after an adverse move, traders are reluctant to accept losses and begin to hope for improvement, hoping for luck. However, the market was obviously not considerate enough to expand the loss from 1 unit to 1.5, 2, or even worse. The need to avoid pain (losses and mistakes) led him to violate trading rules that he knew were correct. This is the same contradiction in a different form: the enforcement of trading principles causes pain, while failure to enforce them increases levels of dissatisfaction and deprives trading of capital.

If you reflect on yourself, I think you'll find that this pleasure/pain paradox is often at play when you have trouble reaching your goals. Let's say you have the right knowledge, and you have a problem with execution, because there are conflicting motivations, there are two opposing subconscious needs, and in general, the need to avoid pain tends to prevail.
Ironically, in this case, the result is always the pain of frustration and dissatisfaction. In order to avoid one type of pain, the subconscious creates another type of pain and reinforces feelings of frustration and dissatisfaction. If left uncorrected, this process can lead to a vicious cycle that erodes your values, undermines your achievements, stifles your growth, and sets you up for failure.

In order to establish positive and non-contradictory motivation, the subconscious mind must view goal pursuit as a pleasurable rather than painful process. If you can reach this state of mind, the choice to take action to reach your goal is complete, the choice is gone. Basically, sticking to a given decision is a commitment -- a state of mind in which knowledge, motivation, and execution all point to the same goal. It is a state of complete integration where your mind will drive you towards achievement and inevitable success.