Take Personal Responsibility
There are two ways to understand and interpret events in your life. You can attribute the cause of any event to internal forces, such as talent, ability, or hard work, or you may attribute the cause of that same event to external forces such as luck.
When you look for internal forces, you tend to take full and complete responsibility for any outcome. For instance you might say, “I made a profit on that trade because I prepared properly and I waited for the right signals to occur before acting, in accordance with my plan.” With a winning trade that explanation is easy to come by. It’s quite natural for us to build ourselves up and enhance our ego when we win. It makes us feel good and we believe it is due to our talents and skills. But what about a losing trade?
When we lose it’s also due to our talents and skills. In this case, however, it may be a lack of talent and skill. That possibility is much harder for us to accept. When faced with a defeat, most of us switch instead of looking for internal forces we begin looking at external forces; “The market conditions changed too quickly. The markets are being manipulated. I shouldn’t have taken the advice of that obviously uninformed analyst or friend. I was unlucky.” Notice how easy it is and how many choices we have when we look to external forces rather than taking full responsibility when we face a loss. It’s at these times when most of us tend to look at the world in a self-serving way, attributing our success to internal personal characteristics, but our failures to external situational causes. However, there are advantages to bucking our natural instincts and always taking full responsibility for both our triumphs and defeats: One gains a sense of power and complete control.
Most people have a tendency to attribute life outcomes to external forces. Those that take responsibility and attribute outcomes to internal forces are more satisfied and able to use the self-help information to change their lives. They were able to more easily apply the self-help advice to their lives, and feel a sense of power and mastery. Taking responsibility for your actions allows you to gain full control of your life, and make significant changes. Rather than always looking for excuses and trying to place blame on situational factors, all energy is focused on increasing performance and developing new skills. Traders who don’t take full responsibility, in contrast, tend to devote the bulk of their psychological energy to defending themselves against their mistakes. Rather than having an accurate, objective view of the markets, these people are easily biased because of an incessant need to protect their egos. An emphasis on external causes for setbacks makes one feel good in the short term, but it hinders performance in the long term. It takes time and energy to find an external reason for a failure. This time is better spent identifying one’s flaws and developing new skills to compensate for these deficits.
Although taking full responsibility is difficult, especially after a losing trade. We all know and understand that. It’s hard to look at one’s faults and limitations. In the end, if you look at your faults, acknowledge them, and take full responsibility, you’ll be gaining power and control.