The most important part of investing and trading is psychology. Investing is a constant struggle where the battleground is not the market or advice given but comes from within you. You will face stress over losses, you will be in turmoil in deciding to enter or exit a position and you will be forced to think of about who you are and what you’re trying to achieve. But the crux comes when you learn things about yourself that you’d prefer not to acknowledge. You will automatically push them aside into your subconscious and be left with the easy part, such as laying blame or exploring a better way.
This theme runs through all our lives in various formats. Unfortunately the decision making processes throughout our lives, including ongoing management of investments, are formed within our belief systems that in turn have been seeded by our early childhood experiences and, less so, our experiences since then. I say unfortunately because talking a person out of their misconceived investment beliefs is like trying to talk someone out of their religion. It doesn’t matter that they can’t demonstrate positive results. They believe anyway, and that is that. Of course that is good for the rest of us, because if some didn’t lose there would be nothing to win.