7 Insider Secrets to Stop Self-Sabotage
For the last 30 days, I followed along with Jay Capobianco, a ten-year foreign exchange market strategist, to discover the necessity of inconsistency and how we can set better goals in light of them.
In a world where change is the only constant, each step we take on our journey to success is made 100x more difficult by constant fear of the unknown. But is uncertainty is much more helpful than we make it out to be. In just 30 days, I've learned how people can profit from a seemingly unpredictable system and how we can make the best decisions despite ourselves.
#1: Nothing is random
Every circumstance is connected and relies on another to work. Our best decisions are nothing more than well-timed educated guesses. Things are never as coincidental as they seem.
Much like the stock market, the foreign exchange market is a reflection of ownership, in this case global currencies, being constantly switched from one hand to another. Each pair reflects how one currency is valued against another as people buy and sell units of its fair value for a profit.
“The moment the market becomes predictable,” Capobianco said, “the entire system becomes inefficient and simply falls apart.” Likewise, if everyone could tell the future, things would go very wrong very quickly.
#2: Not being risky can be just as risky
The one and only thing you can manage is your risk of exposure to loss. There’s no way you can get hit on the road if you’re not on the road and there’s no way you can blow an entire account if your whole account isn't at risk. But losses are unavoidable. You have to factor risk into your model of behavior, but you can’t build a model on risk – or the fear of taking one. Fear of loss is the #1 reason people fail in the market and ultimately in real life.
#3 – It’s okay to be wrong on your way to being right
The exchange market doesn’t move in straight lines and neither does success. Mistakes can be catalysts to even bigger breakthroughs on your way to achieving your goals.
#4 – Don’t sweat goals
When we don’t accomplish goals, we toss our previous achievements out the window and over-stress that which is incomplete, to our detriment. The same is true in the world of trading, but there’s a downside. If a trader hasn’t quite met their goal, many are likely to force trades and allow fear to take over. They go against their beliefs to blindly enter trades in order to squeeze in an extra hundred dollars – at the probable cost of losing much more.
#5 – Learn what your rational and irrational voices sound like
The rational mind will prevent you from the negatives of reaching an unmet goal. The rational mind fully appreciates the progress. The irrational mind will tempt you to break your own rules for fear of loss. This is self-sabotage.
A quick break about rules – and breaking them
How are new rules (and beliefs) acquired? The profession of trading is continual ongoing data collection, as is the profession of living. There is always something new to learn that will cause you to tweak your rules and beliefs. While there’s nothing wrong with tweaking, we have to be cautious of recency bias -- the false impression that the future will be identical to patterns in the recent present. (Ergo, not all Mondays are terrible and not all design critiques are doomed to be exactly like your last.) Before acquiring new beliefs, assess the validity of it by seeing if it has stood the test of time or if it was simply a one-time (or even three-time) fluke. Life is a box of chocolates, not a barrel of apples. One bad day doesn't have to spoil your week.
#6 – There is more than one single successful strategy
There are a dozen ways to do the very thing you wish to achieve. No two traders view the market alike, just as no two people view life (or design) alike. Furthermore, two people who view the market similarly can come to two different conclusions as to which way the market will go and vice-versa. How crazy is that?
#7 – Re-think setbacks
In the world of professional trading, losses aren’t only reflected in dollars and cents. “Wins occur when you follow your rules – independent of the results.” Capobianco said. “A loss occurs when you break your rules, even if it leads to a successful trade. A profit made by breaking rules sets bad precedent for the future.”
And so it seems it truly isn’t a matter of winning and losing, but how you play the game.