The list of enemies is probably the most important thing for all new traders. In other posts I’ve referred to ‘the enemies’ within. The fact of the matter is that the obstacles and failures in trading are due to the hidden enemies. These are enemies in the mind. Sometimes they’re not ‘so hidden’. Traders may be aware of them but unable to do anything about them.
I don’t propose to give instructions on how to deal with them. Why? Because I don’t know you and your enemies or how bad each of them may be. All I can do here is to describe them, and encourage you to find ways of dealing with them – if you want to become a profitable trader.
1. Lack of time
This is enemy number one on my list because if you do not have time—or cannot create time—to devote to learning, you are out of the game before it even begins. This is not something to “try” and see if it makes you a few quid. You will lose money. Even on a demo account, you will lose demo money, and that is expected. What you cannot afford to lose is the time required to understand why.
The markets do not care that you have a day job, a family, or a social life. They operate on their own clock, and learning their rhythms demands yours. If you cannot carve out consistent, uninterrupted hours for study, screen time, and review, you are not a trader. You are a gambler with a spreadsheet.
2. Lack of sustained motivation over a long period
Long period? Yes. If you come to this thinking, “I can learn faster than most people. I can do this in record time,” then I am afraid arrogance is also your enemy. Trading is a loser’s game. I will repeat that ad nauseum. Why? Because even seasoned, well-trained traders can expect to lose roughly sixty per cent of the time. What do you expect for novices? “Much higher” should be your answer.
Repeatedly losing at anything is demotivating, and the larger your losses, the worse the psychological damage. Your motivation will be assaulted throughout the learning process. You will often be left psychologically black and blue. How motivating is that? It is not. If you are the sort of person who is easily demotivated, you should not waste your time attempting to trade. You will simply prove that it “does not work for you”—those famous, well-worn words. Nothing is here to work for you. The work is yours to do.
3. Lack of dedication and commitment
This may appear similar to motivation and determination, but it is distinct. Motivation is the fuel. Dedication and commitment are the engine and the chassis. This is about setting a structured programme of activities for yourself to learn how the machinery operates—not merely having a punt and hoping you will eventually “get it.”
Dedication means showing up when the charts are boring. Commitment means journaling trades when you would rather watch television. It is the unglamorous, repetitive grind that separates those who endure from those who flame out. Without it, you are merely a spectator with a funded account, and the market will relieve you of that funding soon enough.
4. Lack of determination
Determination is linked to motivation and dedication, but it occupies a harder, more stubborn corner of the psyche. Determination is about setting goals and refusing to waver when the going becomes brutal. It is about pushing yourself well beyond the current limits of your mind.
The mind is the ultimate battleground in all of this—not the markets, not the charts. The market does not care whether you are tired, frustrated, or on a losing streak. It presents the same opportunities and traps regardless of your internal state. Determination is the quality that forces you to return to the screen after a humiliating loss, review the tape, and ask the difficult question: “What did I do wrong?” rather than the comfortable one: “Why does the market hate me?”
5. Inability to withstand failure after failure (ideally on demo accounts)
Withstanding failure is about not being injured psychologically so severely that you cannot pick yourself up, dust yourself off, and resume the work. If failure wounds you too deeply, your motivation and determination will plummet. Commitment will also collapse.
All of this is emotional self-management. I cannot teach people how to do that. Well, my fee would be well out of the range of most people, and even then I am so brutal it would not be an enjoyable experience. I am a bad teacher. I use the cane a lot—similar to the markets! LOL.
Failure on a demo account is the cheapest education you will ever receive. If you cannot stomach losing Monopoly money, you have absolutely no business stepping into the live arena. The market will sense your fragility and exploit it without mercy.
6. Inability to learn new skills
I see skill as the rapid sequencing of thoughts and ideas, focusing them in a coherent pattern so as to achieve advantageous outcomes. Skill depends on knowledge and experience. But it also depends on deep insight and understanding—pulling together disparate concepts and applying them in a structured, disciplined way.
The people who just want to have a go are fooling themselves. Trading is not a lottery ticket. It is a craft. It demands the acquisition of technical proficiency, pattern recognition, risk assessment, and emotional regulation. These are not innate talents. They are learned behaviours, built through repetition and refinement. If you resist the learning process—if you believe you already know enough—you are not a student of the market. You are a donor to it.
See: Self-deception below.
7. Inability to learn from mistakes
People often believe that identifying their mistakes means they will not repeat them. In practice, people tend to repeat their mistakes many times over. They may know precisely what a mistake was and what led to it. However, putting in place a strategy for avoiding that same error is not straightforward.
Mistakes are frequently the result of deeply etched habits of thinking and acting. Even cognitive mistakes—those occurring purely in the mind—are the product of well-worn neural pathways. These are patterns of error that minds reliably default to under pressure. At times you may say to yourself, “I knew this was going to go wrong. So why did I do it again?”
Learning from mistakes, therefore, is about developing routines for re-mapping or “re-wiring” the brain—erasing certain patterns of thinking or behaviour that do not serve you. That is not an easy undertaking for a sizeable majority of people. It requires vigilance, honesty, and a willingness to sit in discomfort. Most would rather chase the next trade than interrogate the last one.
8. Self-deception
This includes the notion that it is all done by “intuition,” hope, or luck. To me, intuition suggests some sort of mystical insight that emerges naturally from experience—something that cannot quite be pinned down, I expect to be told. To novices in any field, intuition is simply the under-appreciation of well-organised skill, structured thinking, and accumulated knowledge.
I would not be putting my faith in a neurosurgeon who intuitively knows where to cut or what to remove if I required brain surgery. Would you? Perhaps you would, if you are a diehard believer in intuition—and that is fine for you, but not for me. Bring intuition into the live markets and they will bite a substantial chunk out of your arse for a painful reality check.
The average human being possesses a formidable capacity for self-deception. I do not propose to delve into the psychological research underpinning that fact here. Suffice it to say, people routinely tell themselves stories that do not align with reality. The boundary between subjective perception and objective fact becomes blurred. Ideas become conflated with evidence. Delusion then sets in, rather imperceptibly. You believe you are trading the chart, when in truth you are trading a fantasy of your own construction.
9. The twins
a. Hope
Some traders think, “I hope it goes right for me—this trade.” The markets exist to kill hope. They do so quickly and without sentiment. If hope won the day, everybody would be doing this and everybody would be a millionaire. That is not the world we inhabit.
If you are hoping before, during, or after a trade, you are doing it wrong. You are deceiving yourself that hope exerts some slight influence over the outcome, or that because you hope, you may get lucky. Luck is not in this equation. The market does not reward wishful thinking. It rewards disciplined execution and sound risk management. Hope is a sedative. It dulls your reflexes precisely when you need them sharpest.
b. Greed
This is the enemy that makes traders overstep their risk management strategies. It whispers, “But if I size up just a little more, I will crush the markets and make serious money.” Such individuals are being driven to take on risk far beyond their reasonable capacity. And then hope joins forces with greed, and you are finished.
Greed and hope also conspire to keep traders in badly losing positions, thereby magnifying losses. That sixty per cent of losing trades—which could be higher for novices—then becomes catastrophic, dwarfing the aggregate of profits on the remaining forty per cent of winning trades.
Both greed and hope also work against traders in winning positions. They may hold on too long, watching profit evaporate as the market reverses. Holding on too long in a winning or losing position is a bad idea. Is that not obvious? Yet it happens every single day, to traders who ought to know better.
10. Fear
There are people on demo accounts who are crippled by fear or anxiety. Why? It is demo money. What is there to lose? Nothing but time. Yet investment of time must be weighed against the benefits of that investment. Why do people spend years and considerable sums attending university to obtain degrees? Because they understand the long-term payoff.
Fear alone prevents people from experimentation and learning. Fear of confirming you are a failure. Fear of losing. Fear of anxiety itself. On taking up a demo account, you must dare to lose. If you do not lose, you cannot examine what went wrong—or even what you did right. You cannot re-examine your thoughts, feelings, and actions. You cannot learn from the experience. You cannot modify your approach to improve outcomes.
Does losing demo money mean you would do the same with your own capital? It does not mean that at all. What is worse than failing to learn on a demo account is leaping into a live trading account and incinerating your first five hundred pounds. Fear will then kick you squarely in the chest. You will probably never go near this endeavour again.
Conclusion
Deal with the enemies. Kill them off as quickly as possible. This is a high priority for all new traders. It remains a priority even for seasoned traders, because half-dead enemies have a nasty habit of reviving themselves when you least expect it.
The market does not care about your feelings, your circumstances, or your excuses. It presents the same challenges to everyone. The difference between those who survive and those who do not lies entirely in how they confront the enemies within. No one else can fight this battle for you.