I think we've all experienced the same level of frustration at one time or another, so don't sit
around and beat yourself up over it! But do take the time to absorb and seriously contemplate
what Sir G and Kiwi were kind enough to offer; namely, good advice and good food for thought.
It's possible we've all become a bit callous about the psychological element of trading because
it's received so much attention over the recent past. But there's a reason for that: It is a
hugely important aspect of successful trading (and of life, for that matter), because it drives
every decision we make, and everything we do.
A lot of folks recognize at a high level that trading with a system will help them remove emotion
from the trading equation, and it is broadly agreed that this is a good thing. But the question of
why you failed to follow your system is the simple result of a more complex chain. Psychological
factors creep in at every stage of the investing process, and played a strong role over your
decision to trade systematically, rather than with discretion. Ditto for the decision of whether
to write a system, or buy one. And psychological biases creep into the system design stage, as
well, if that is the route you chose to go. See Van Tharp's Trade Your Way to Financial Freedom
for a good overview; his home study course, as Kiwi mentioned, covers this in detail, and is well
worth the time and expense. But be forewarned: It is not a weekend read. It takes a lot of time
and effort, and a lot of self-examination to properly work through. (How you approach his course
is a good gauge of the level of your commitment to becoming a successful trader, so it is particularly
valuable in this regard.)
Biases are insidious by definition: "A particular tendency or inclination, esp. one which prevents
unprejudiced consideration of a question." (Amer College Dict.) It takes some digging to flush them
out and acknowledge their influence on our behavior.
So the inability to take signals isn't a disease in itself. It is a more a symptom of underlying
difficulty elsewhere. In essence, it is very likely that your system contradicts one or more beliefs
you hold about the way markets work, and if you don't know what those beliefs are, then you should
probably dedicate some time to sitting down and sorting through them. And as Sir G pointed out, if
your intentions are not backed by a true desire for success, then the markets will willingly
accommodate you in this regard.
Another critical aspect of the psychological component is understanding your tolerance for risk,
which is a function of age, goals, and the amount of stress in your life (there are other factors),
and which could easily be a factor in the difficulty you describe (taking the signals your system
The level of dedication and commitment of successful traders is often under-appreciated. I have
read that some traders, before bringing a new system on line, will step through their system
day-by-market-day, over years of data, looking at the equity, and experiencing what it feels like
to pull the trigger under a variety of market conditions, trade after trade after trade.
The path of the journey to the level of confidence and discipline needed to consistently trade in
a systematic manner is different for each of us, and at the end of the day, it is just that â€“ a journey.
Finish every day and be done with it. You have done what you could;
some blunders and absurdities crept in; forget them as soon as you can.
Tomorrow is a new day; you shall begin it serenely and with too high a
spirit to be encumbered with your old nonsense.
- RALPH WALDO EMERSON