If you love singing, then you would also have noticed that you tend to remember the words to most of the songs that you do sing. It doesn’t matter after how many years you hear that song. You will immediately start humming the words as soon as it begins playing. How does this happen? We have not taken pains to memorise the words thru the years. We just sang them.
It has been proved that to remember something for a long time we need to first believe it ourselves. If we like singing, we think of, first, ourselves as a singer. After that we make efforts to sing and do it well (because we like to) and over time we tell ourselves that we ‘know’ the words. Eventually we believe it too. So to become what we believe ourselves to be (a singer) we have to first believe that we are one.
Now let us look at trading and investing. What is the most common lines you hear? There is no money to be made in trading. Only thru investing you make money. Long term investing is the way to go. This is what you keep hearing, no matter where you go. This is what you are told when you come to the market. This is what you are told when you lose some money or make some. This is what you hear on the TV, from industry icons, read in the papers, see on the websites etc. etc. Now, if this is what you keep on hearing, then, this is what you will eventually come to believe. And that is what you will be.
There is more. Most people who get into trading or investing, lose money. That is mainly because they have no idea how it is to be done. Both investing and trading are matters of skill and who has spent time to acquire this skill? Hardly anyone. Then why would they succeed? But if you are ignorant of the fact that you need skill to succeed at trading and investing, then it is unlikely to think that you are the one that is at fault! So you blame everything else. But that doesn’t solve the problem of not succeeding, does it? Therefore it brings you back to the same spot you were at the start- a creation of your belief about who you are. And that is wholly based on what you have been told so far and now, confirmed by your own less than satisfactory experience!
Thus most people remain locked in this cycle without ever knowing how to break out of it. Not that they don’t try. But desultory attempts cannot succeed in breaking years of habit formation. So what is the answer? Well, it is quite simple really. You have to create a belief that you can be a successful trader or investor.
One of the ways to do that is to experience success. Easier said than done of course. But see the upside. Once you can get a few small successful trades going, that will build a new image as well- one that says to you that You Can Win. Aim small but aim to be consistent. A Rs 500 profit per trade may look small (especially in the context of what you have lost till today!) but more than the quantum, it is the consistency of the profit that will make the difference. I recall a piece of dialogue in a movie The Recruit where the hero is in a hospital and the nurse is trying to make him stand up by himself. He refuses and asks for the medicine. She says she will give it to him if he stands up. And then she adds, “Not because I can but I want you to know that you can too”!
That is the key element- for you to know and believe that You. Can. Profit. Consistently. This kind of approach creates a new positive cycle in your thinking that can have such a fantastic effect on your psyche that you will be amazed when it does happen! I have gone thru this process myself and I have also got other people to go thru this process and can therefore vouch for its power. There may be many other ways of succeeding in the market. But I do believe that there is nothing more direct and more impactful than beginning to make some profits and instilling the knowledge that you can make them too. Then you will believe that it is indeed possible. And then it will become a habit. And finally, it will become You. Remember to start small and then build it up later. Idea is to become a consistent profit maker. Mark Douglas puts it in a similar fashion when he says that ‘money should be a by-product of your process.’
So, give yourself a new goal. To make a certain small sum every time you trade or invest. Be focused on becoming consistent at this rather than increasing the quantum (for now). Results, I guarantee, will be very satisfying.
You are what you believe you are. Thats the only truth.