Money: How it sabotages your trading success

Live trading with real money changes our brain chemistry. Many traders have the experience of being able to trade successfully in a simulated or demo account. However, when they start trading live something very different happens. Real money triggers a whole new set of reactions that can sabotage our trading success.

Money. What is your relationship to money?

 
I had an internal limit on my own trading success. I have told the story many times about my own relationship with money as an independent market maker on the options floor of the Pacific exchange. I had an internalized $200,000 annual limit. I won’t go into details here, but I had a wake-up call (literally) and realized that that internal limit no longer applied to me.

Once the trading issues are resolved, traders can hit the “wealth wall.” What is been fascinating to me as I worked with the traders in my firm, my course members and my private clients is to see what happens once they gain more and more success. We work through all the issues that prevent their consistent execution, their state of mind, their strategy development and this can produce better, more consistent results.

Then something happens…they give the results of their hard earned gains back. A few losses in a row, a missed great trade, a comment from someone they love…any of a number of things can trigger a downshift in our brains. A common equity curve is slow gains over a long period of time and then sudden steep losses over a short period of time.

Some of my professional traders in my options trading firm followed the same pattern. What we discovered was each, like myself, had a hidden and subconscious “wealth wall.” A wealth wall is an internal thermostat that comes from earlier training, experiences, identity and belief systems. So, for both my floor traders in the past and my current course members and private clients, we can do all this work building our skills, taking a huge amount of risk, and when we get successful, something happens.

We have invested years of time and emotional commitment to our trading career with great risk, and yet we are unable to fully experience the upside success. This creates an asymmetric risk/reward profile. We don’t get the upside of all of our work, but take the full hit on the downside.

My current passion is to liberate everyone from every walk of life. This means you can be proactive and work on the wall before you hit it! I want to liberate all of us from our internal limitations that create an asymmetric risk / reward profile no matter what we have chosen as a career.

What can you do now to be proactive? Here is an exercise:

 
This exercise will take some focus and deliberate intention to get the most out of it when doing it by yourself. So, set aside a quiet time without interruption of email, texts or phone. Here is what you do.

Imagine someone like you, but not you, who has achieved the success that YOU want. Now, imagine them completely and fully. As you think about them, notice any physiological changes in your posture, face, muscles tensions. Notice how you feel about them. Create some judgments or warnings to them about who they have become. Allow all the voices in your mind to say what they REALLY think.

Journal what you notice.

 
This exercise is the first step in opening the door to a greater awareness of your own “Wealth Wall.” It is easy to just think “Oh, I don’t have a Wealth Wall…I want to be as rich as possible.” But my experience with not only myself, but hundreds of traders, is that this Wealth Wall is there. So take the time with this exercise and allow all possibilities to emerge.