“The two words information and communication are often used interchangeably, but they signify quite different things. Information is giving out; communication is getting through.” – Sydney Harris
Trading doesn’t have to be complicated but I am continually astounded at the number of “professional traders” who make it sound difficult. I often wonder if some traders feel good making others feel clueless.
Even our education system offers little to support for individual traders to provide real trading literacy. Have you ever felt this way? Chances are that you have at some point. Trading shouldn’t make you feel stupid, so let’s consider three reasons why it might be making you feel that way and how to overcome it.
Trader Speak Shouldn’t Be a Secret Code
Trading has its own language but there are few “Trader Speak” translators out there actually defining or interpreting this trading language. Learning a new language is difficult for anyone, and Trader Speak is no exception.
Every new trader has to learn the basics including new meanings for words like bull or bear, but Trader Speak should not feel like a secret code. If you are learning to speak “trader” don’t be afraid to ask for clarification. Most traders will inform others of their market analysis or interpretation of the markets, but few (including those broadcasting on large media outlets) will explain the basis behind their trading assumptions. Many traders will inform, but fewer will clearly communicate their Trader Speak.
Trading in Someone’s Shadow
Unfortunately some traders will trade using someone else’s chart analysis or indicators without developing their own trading assumptions. This will result in a feeling of powerlessness especially if the trade goes against you.
It is important to learn from other successful traders, but there is a difference between learning from them, and relying on them. It’s important to develop your own trading identity without becoming someone elese’s trading shadow. Regardless of whether you use technical or fundamental analysis, if you remain in control of your trading decisions you will feel empowered. There is power in making your own trading decisions based on your own assumptions.
Trading Reflects Our Best and Worse Self
Trading has an amazing ability to help us to be reflective individuals and become aware of our strengths and weaknesses. And luckily (or painfully) for us, trading will help us work through any of these strengths and weaknesses quickly in order to trade profitably over the long term.
For example, when I was learning to trade options, I used to get confused with the various ways to trade options. Learning that a call spread is a bearish assumption but a long call is a bullish assumption often brought back childhood memories of school during math class. I hated that feeling of losing track of what was going on in the lesson and having to muddle through it without clearly understanding while being too embarrassed to ask for help. What I have come to realise and would like to help others with is: complicated trading setups are not a measure of someone’s trading skill. This lesson has served me well and helped me to overcome one of my self- imposed trading barriers.
Trading shouldn’t make you feel stupid, but the reality is that sometimes it can. Trader Speak, trading shadows and a trader’s self are just three examples that create feelings of inadequacy at various times throughout a Traders career.
Key Takeaway
At the end of the day it’s important to remember that you can’t control the markets, but you can control how you feel.
If trading is making you feel stupid spend some time thinking about what is contributing to this feeling and develop a strategy to overcome it. Trading will bring the best and worst out of you, take time to reflect and create real goals to overcome any limitations while focusing on your trading strengths.
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