The truth is hard to handle…

Is there any harm in fooling yourself? Certainly, if on a whim you decide to invest your entire account balance on the next setup you see in the stock markets and expect to double your money, you are living in a fantasy world. But there are times when fooling yourself a little bit would not hurt, and can actually help you a little.

There are many truths of trading that are hard to handle. First, it’s hard to make a profit. I was watching a television talk show the other day about investing, and the moderator asked the guest why investing is often portrayed as difficult. The guest, a CEO of a money management firm, said that investing is easy and the notion that investing is difficult is largely a myth. A myth? Not exactly.
Surely, it’s easy to make a trade if you have extra money to spare, so investing is easy in that sense. The hardest part is making a profit, however. That is where the hard work comes in. If you trade the markets, you must be aware at some level that putting on trades is easier than taking out profits. You will face many more losers than winners. Second, it’s difficult to truly become an overnight success. Honing the skills required for profitable trading can take years. Although some novice traders or investors hit upon a winning streak early, it is usually short lived. If you want to master the markets, it is vital to plan to persevere and work steadily.

In the end, you can’t live in a complete fantasy world, but there are times when fooling yourself a little can work to your advantage. If you have taken every precaution to protect yourself, and the only way to find the truth is to execute your trading plan and see what happens, you only have one choice: Bite the bullet, believe in your method, execute the trade, and see what happens….

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