5 Difficulties in Trading and How to Overcome Them:

Introduction:

Hard times are a common occurrence for new traders. The challenges encountered by various novice traders are frequently the same, regardless of whether they trade on a live or demo account. I've compiled a list of the Top 5 Trading Challenges that novices encounter.

One thing you must know, I went through all of them.

1) Confusion About What To Trade:

The gap between what we learn and what we actually need to know as traders is quite large. Confusion is thus one of the challenges associated with trading.

Some people find it challenging to sort through the deluge of material available on Forex, Trading Tactics, Psychology, Risk Management Approaches, and other related topics.

After that, such traders are unable to implement anything because they are unsure of where to begin. I've been in a similar circumstance. You can study about Trading Chart Patterns, Reversal Methods, trend following tactics, and Scalping, as basic examples.

Then, What Do You Trade?…

A common characteristic of successful traders, which I got from the book Millionaire Traders, is that some may trade in the opposite direction to each other. However, their success has been created by selecting one way to trade and sticking to it.

As a result, I believe in becoming the “Expert” of your own style. No single trading style is better than others. What makes the difference is the person behind it.

For Others, the trouble is that they are not learning the right things. You can learn as much as you want but as long as you do not learn what you need to learn, nothing good is going to happen.

That's why it is crucial to know what you must learn before starting to trade. While trading is a discipline in which you continuously learn, I believe in starting out with just what you need and building on it.

I also know those who do not receive a sufficient education. Like me, they start with no background knowledge, which raises another problem. Naturally, knowledge can be acquired through experience, but doing so just heightens the Difficulty and Anxiety Level.

In short, if you educate yourself and read the right material, you will overcome the first trading challenge.

2)No Confidence:

How often do I hear “Among My Difficulties In Trading Is Developing Confidence!”

The answer is: almost every day.

This parts closely relates to trading beliefs. Not only must you be confident you know your strategy works, you have to be confident in your ability to Succeed As A Trader.

No matter how hard you try to convince yourself that your strategy and methodology are working, there's only one way to build up your confidence about them. You have to test and experiment.

What Is Meant By That? It Implies That You Must:

 1) Make sure your trading technique yields a respectable return by Backtesting it.

 2) Try different lifestyle and habit combinations to determine if they help you perform at your best.

If you've completed those Two Steps and you're still having trouble trading, you need to go deeper and investigate how your personal beliefs are affecting your trading. Make sure they position you for success. If not, try to acquire the correct beliefs.

3)Being Trapped In A Circle:

Getting caught up in a vicious cycle refers to Repeating Negative Behaviors. There are Two Possible Outcomes:

 1) Always seeking out new information.

 2) Making the same trading errors repeatedly.

Continuous Information-Seeking:

With today's abundance of information, it is quite simple to become caught up in the "Information Search" cycle. That is typical. That has a scientific explanation, in fact. Research indicates that dopamine drives our desire for objects. Once we've located something, opioids provide us a pleasurable high in return. Here's the thing: we tend to loop back on ourselves.

We look for new trading strategies whenever we see that our current one isn't working, and we keep looking until we find the next "Best One." That makes us feel better, but only momentarily.

The process restarts after a few more losses. The excellent essay "Dopamine Makes You Addicted To Seeking Information" was Authored by Susan Weinschenk, Ph.D.

Repeating The Same Trading Mistakes:

The second way of being stuck in a circle concerns mistakes we make in trading. Now, understand that, as a beginner, it is totally normal and even essential to make mistakes when you trade.

"The key lies in not repeating those mistakes over and over again."

The Best Solution and the one I use in that case is to keep a journal of your mistakes. It doesn't have to be very complex nor it should be. Simply write down bullet points of your mistakes.

If you've already done that, great! But you've only applied half of the solution. The next thing to do is to review your mistakes periodically. I review my journal every week.

I Found That Using A Paper Journal To Write My Mistakes Down Made It Easier To Remember Them.

4)Taking Improper Action In A Trade:

One of the Major Factors in my losses as a beginner in trading was not behaving properly once I took my trades. I could usually, with some exceptions, enter the Trade As A Pro. However, once I was in the trade, things started getting bad…

What I Mean By Behaving Improperly:

 1) Closing a trade too early

 2) Not locking-in profit

 3) Not placing a stop loss

 4) Moving a stop loss.

Of course, there are a lot more improper behaviours once you've entered a trade. That will depend on your trading strategy.

As Mentioned Previously, keeping a journal of your mistakes when they occur is a key behavior to have if you want to avoid repeating your mistakes over and over again.

All difficulties in trading can be tackled, but you must first be aware that you experience them.

Another thing that worked for me and many others in trading is meditation. Now, the best person I know to talk about is "Yvan Byeajee", He shares his meditation practice in episode 7 of the Desire To Trade Podcast.

Whatever you may think about meditation, research has shown that there are benefits to it. Meditation is known to calm your mind in the moment and help you in stressful situations.

I definitely recommend trying it. I started using Headspace, an app that guides you through short periods of meditation.

5)Having Unrealistic Expectations:

Something I heard recently hasn't left my memory:

"You shouldn't have the right to expect anything as a beginner."

In an essay titled You're Getting The Results You're Supposed To Get, "Houston Truong", one of the guests on the Desire To Trade Podcast (Episode 2), talked about this concept.

To what extent is that true? It really is, though.

Expecting a specific financial result when one is a novice trader is Totally Wrong. Applying your approach is all that's required of you when you first start trading. And that's it. Next, evaluate your results and consider how you may do better in the future.

I've noticed that some traders set the bar too high that makes it harder for them t concentrate on trading. They become more Greedy and Fail To Execute Their Plan.

In other words, don't be stressed if you don't double your account in the first year of live trading. Trade and you'll get whatever you get.

If you do that, you are better than most traders (The 68% who lost money in each of the past 4 Quarters in 2014 according to Bloomberg.) because you're less likely to experience Greed and Frustration, and more likely to get results.