Recognizing and Overcoming Stubbornness
A large part of being a successful day trader is having the right personality traits, or if not, at least being able to control the opposing personality traits. Human traders will always be influenced by their personalities and their resulting emotions, but professional traders have learned to overcome the emotions that are counter productive to their trading.
One such personality trait is stubbornness. Stubbornness (or obsintance) causes people to become attached to their decisions regardless of the consequences. Day traders need to be decisive in order to make their trading decisions promptly, and then act upon those decisions without any hesitation, but they also need to be flexible and able to react when a decision was incorrect. In order to be successful, day traders need to find the right combination of decisiveness and flexibility for their personality.
Stubborn people usually refuse to admit that they are stubborn, so recognizing that stubbornness is causing problems with their trading can be difficult. Stubbornness usually causes several different trading mistakes, with the following mistakes being the most common. If you are making any of these mistakes in your trading, it is probable that you have some degree of stubbornness in your personality , and that it is affecting your day trading:
•Refusing to use targets and stop losses, and certainly refusing to actually place target and stop loss orders
•Choosing not to follow a trading system, because you know what the market is going to do
•Holding losing trades until the pain is just too much to bear (or even until your brokerage exits the trade for you, because you no longer cover the required margin)
For any other reason, these mistakes are actually easy to overcome, but not when they are being caused by stubbornness. In order to overcome these mistakes, stubborn traders first need to recognize that the mistakes are being caused by a natural human emotion, and that there is nothing wrong with admitting this. As being stubborn is a form of control, it may help to think that by recognizing the cause, you can have more control over yourself, and hence over your trading.
Once the cause has been recognized, trading in simulation will provide time to correct the trading mistakes without risking any real money. Trade in simulation until you are consistently profitable (by consistently, I mean several weeks, not just one day), and then move to live trading, but be aware of the additional emotion that will appear when you start trading live.