The impostor syndrome

The term “impostor syndrome” refers to an internal experience of believing that you are not as competent as others perceive you to be.? It disproportionately?affects high-achieving people, who find it difficult to accept their accomplishments.?

No matter how much evidence there is that we are successfully running our lives, jobs, and relationships, we tend to develop false beliefs that make us doubt about our capacities for moving on and balancing it all.?

Trading can sometimes be so hard that you'll probably end up questioning yourself. The same happens when you decide to become an entrepreneur. And if your idea of entrepreneurship is earning money with trading, you might find yourself in a terrible day, with several negative trades, wondering what you have done with your life.

Just this morning I stopped a trade on Natural Gas (NATGAS) with a negative outcome. I was uncomfortable with that trade for 2 reasons: the investment amount was higher than usual, and I had that trade running since Friday. I decided to close it because of this discomfort although market signs were not clear on whether the trend was moving up or down (as it so commonly happens on Monday mornings…). As I came from lunch, I discovered that NATGAS was in a rising trend (as the U.S. market opened) so I would have won money if I stayed in that trade. Acting on emotion, I decided to buy NATGAS again (at a higher price than the previous) and at the time of writing I am losing money.

I should know by heart never to repeat the mistakes I made today:

• Investing more than 2% of my capital (the first risk management commandment).
• Leaving a trade open during the weekend (markets are so unstable due to the conflict on Ukraine that you cannot afford such risk).
• Ignoring that market trends can reverse over lunch as U.S. market opens.
• Deciding out on revenge to recover money lost, in exactly the same product.

This kind of bad days happen quite often, not only to me but to everyone I know that does trading and is open to speak about mistakes (it is easier to find traders showing off their success).?Such mistakes don't make me a bad trader.

Markets do have ups and downs and I know that I shouldn't worry about things I cannot change. Accepting loss is the basic rule to keep on trading.

Luckily, before I learned technical analysis, I had already understood that trading is a mind game. Years of coaching taught me how to quickly overcome failure and the fear of failing again.

People act on thoughts and if you don't change your thinking pattern process from failure to success you will repeatedly make the same wrong decisions.

The beauty of the impostor syndrome is you vacillate between extreme egomania and a complete feeling of being a fraud. You'll experience those exact feelings in trading: when you take profit you experience a tremendous joy and feel overconfident; when you lose money you doubt your analytical skills and your ability to make decisions.

Those emotions happen all the time and they boil in your head. We are run on emotions, but emotions can be tamed. The basic rule is to take emotions out of the trade.?

The best way to overcome the impostor syndrome is to acknowledge it and to address pragmatically the facts that are making you disbelief in yourself.

I can share some basic coaching techniques that I apply in my day-to-day life:

1.?????Separate feelings from facts

Accept that such feelings of uncertainty are normal. Observe them, be mindful of them and try to understand the circumstances that trigger them, as to avoid those or, at least, to be better prepared when they happen so you can respond with objective arguments. For instance, if you think you don’t have enough knowledge to do trading well just keep on studying and practicing in a demo account.

2.?????Take note of your accomplishments

I've already talked about the importance of having a trading journal to register gains and losses. As I read more about the habits of professional traders, I am coming to understand that some of them are obsessive about this. Registering losses is good for learning and registering gains is good for incentive, so you can have a tangible reminder of your success. Trading is a lonely activity, and you have only yourself for motivation and appraisal.

3.?????Talk to someone

Finding someone to talk to is a tricky task. I am an huge advocate of coaching and I know that in other countries there are coaches specialized in trading to support such professionals (if you have seen Billions you know what I am talking about). Your family will probably question your decision if they find out you're losing money, your friends might not understand your journey and associate trading with gambling. Probably only an entrepreneur will understand you, someone who has ambition, is adventurous and doesn’t mind undertaking risks. The objective is to get thoughts out of your head, not to get advise on trading.

Most people experience moments of doubt, and that’s normal. The important part is not to let that doubt control your actions.

Accept you can have an impostor moment, but never allow yourself to have an impostor life.