Dump the Blame Game

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Be careful who you blame.
 

I can tell you one thing for sure.

 

Effective traders don’t blame others when things start to go wrong.

 

You can hang onto your tendency to play the victim, or the martyr… but if you want to achieve in trading, you have to be prepared to take responsibility.

 

People assign reasons to outcomes, whether based on internal or external factors.

 

When traders face losses, it's common for them to blame bad luck, poor advice, or other external factors, rather than reflecting on their own personal attributes like arrogance, fear, or greed.

 

This is a challenging lesson to grasp in your trading journey, but one that holds immense value.

 

This is called attribution theory. Taking responsibility for your actions is the key to improving your trading skills. Pause and ask yourself - What role did I play in my financial decisions?

 

After all, you were the one who listened to that source, and decided to act on that trade based on the rumour. Attributing results solely to external circumstances is what is known as having an ‘external locus of control’.

 

It's a concept coined by psychologist Julian Rotter in 1954. A trader with an external locus of control might say, "I made a profit because the markets are currently favourable."

 

Instead, strive to develop an "internal locus of control" and take ownership of your actions.

 

Assume that all trading results are within your realm of responsibility and actively seek ways to improve your own behaviour.

 

This is the fastest route to enhancing your trading abilities. A trader with an internal locus of control might proudly state, "My equity curve is rising because I am a disciplined trader who faithfully follows my trading plan."

Author: Louise Bedford

Source: https://www.tradinggame.com.au/

 

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