Why is trading so hard?

Buy lower and sell higher. What is so difficult about that?

The root cause that makes trading so difficult is mainly due to a seldom talked about or recognized aspect of trading which is called the amygdala hijack.

Trading and money is akin to survival, it affects the part of our brain called the amygdala or the reptilian brain. It is an evolutionary knee reflex reaction that triggers pain or pleasure, fear or hope. So if one wins a trade, there is great euphoria, followed by fantasies of wealth, if one loses, there is great pain, regret and frustration, usually followed by anger and revenge (trading).

On a cognitive level, you can say do this or do that when standing on the sidelines looking in, kinda like yelling at the players when watching a game. However, when an individual is IN the game, that objective perspective is replaced by a very deep and total animal sense of survival, there is very little to no subjectivity. That is why it is hard to see the market clearly when one has something at stake in it. You are mainly just focused on how near or far the market is from your entry point.

So to be good at trading, a person has to have a great sense of self awareness and emotional intelligence more than anything else. It is a fallacy that most people believe you have to be good at math to trade. That couldn’t be further from the truth. Trading is mainly pattern recognition, which is very straight forward, in truth 90% of trading it is being able transcend your emotions when they arise. Note, that I didn’t say remove or ignore your emotions.

Trying to say, “don’t feel fear”, or “be emotionless”, is like trying to say don’t be frighten when watching a horror movie, or don’t get aroused when watching an adult movie. That is not to say you can’t subvert it, you can, BUT first you must recognize what the situation is and realize what you are getting into. Then, once you know the playing field, you can mentally prep yourself before getting into it and be ready for when the emotions DO arise.