Trading Insanity – Doing the Same Thing and Expecting a Different Result

Insanity Trading Overview

Trading Insanity

You probably must be aware of the saying: the definition of insanity means doing the same thing and expecting different results. This statement, without a doubt, is very familiar and might sound overused or even senseless. Still, it is the reality of thousands, if not millions of traders and investors every day.

Many people wake each day with the resolution to do the necessary checkups for their forex, futures, and stock trades; however, they get frustrated when they can’t keep their words at the end of the day.

Perhaps that is even you! At first, you promise to create and stick to a trading plan that might be even based on a supply and demand trading strategy, have a micro plan for each trade, or catalog all your forex, futures, and stock trades. You tell yourself that you won’t chase every trade, make unnecessary moves, and so on. But after the trades, you begin to wonder how you keep doing those same things. This is a self-discipline breach that will bleed your account dry if not taken care of. This is why many people in this category keep asking themselves, “why do I keep doing this?”

It is a bit difficult to get yourself corrected when you are addicted to doing the wrong things. The first thing we need to remember is that habits, which are stored programs and patterns that have become automatic, are very difficult to desist from. Bad habits form when you get caught in a pattern of taking actions that are contrary to getting your desired results. Negative patterns manifest as a result of something you notice on the charts or hear on the news that you ascribe a negative meaning to. In fact, you might even be oblivious to the fact that you are caught in the pattern until you’ve committed the act.

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Now when you are getting the wrong results, it is because you have bad habits. Take this example of Paula. Paula just recently joined our online trading academy because she finally wants to become consistent in her trading and investing approach. She had before this time vowed not to repeat all that was mentioned earlier. She initially had a perfect trading plan, but as soon as she’s done with her trade, she felt sorry for herself. She was caught in a negative pattern driven by greed and fear. She had placed a limit order to buy two contracts of Nasdaq Futures as the price action was about to hit a demand zone on the daily chart. She accurately outlined her plans, having determined from her weekly and monthly charts that a significant demand zone was about to be retested by the price. She had drawn her lines and precisely outlined her entry, rational, scale, and target points. Her plan was actually flawless as the price action followed her predictions. However, Paula wasn’t patient enough, panicking as the trade continued, hence, taking out a meager profit, only to watch the price shoot up dramatically from her exit. Had she waited; she would have had a more substantial profit. At this moment, she had let herself down, and she felt depressed and stupid, desperate to know how to stop this negative cycle.

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Humans are creatures of habit. It is one of the noticeable things about humans: repeating a thing or action makes such action familiar regardless of the result of such habits. Generally, people want ease and satisfaction and prefer to avoid discomfort and pain. But a dark side of this is that in running from pain and discomfort, you actually cause them. Remember Paula?

In avoiding discomfort and pain, you give in to the negative gestures of a wrongly programmed mind that always seek to warn you not to get yourself into trouble.

When you were young, let’s say a toddler, and you get sad and ashamed when spanked for breaking your mother’s favorite dish. Or in elementary school when you were called to answer your teacher’s question but didn’t know, prompting laughter from your peers, and you felt humiliated. Then, your all-protecting ego would say, “…see, you are bad because you made mommy angry so you mustn’t play or you’ll get hurt,” or “…you are not smart so you must be quiet so that you don’t get hurt again.”

Memories like these are the catalysts for creating a neural network of encoded sense stimulation of these events or experiences. By this, we mean that everything from these memories, from what you heard, smelled, saw, and tasted, is connected and unified with your emotions and thoughts. These neural networks are connected both electromagnetically and electronically to these unified sensory experiences and will go off like a bomb anytime you come across a similar scenario.

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As your life progresses and you repeat these same events of the past that cause you failure or ridicule, which earns you displeasure from those you would not like, your ego will come back to haunt you about your inability. Your ego will remind you that it had warned you that you should not try in the first place, or it had advised you that you do not belong, feeding on previous like experiences. These become unconscious conversations that lurk below the surface of your mind or the point of consciousness. From this, all sorts of negative emotions like anger, dejection, frustration, and others are birthed.

This is how neural networks get attached to other networks. The neural networks, therefore, build a wall between you and taking the actions necessary for growth. The coming together of these neural networks creates a clear pathway that ensures anxiety and avoidance are primary features of your behavior. You will then seek to always stay in the comfort zone where there is no challenge and growth because you will now operate from a position of fear.

Growth and comfort don’t go side by side. You cannot achieve growth without sacrificing comfort because growth requires shedding old skin psychologically, physically, and emotionally.

Everything around you, since you were a child, forms a relationship with you, ranging from places to things, creatures, and people. Each of these relationships has a neural network that is represented by chemical reactions, including the feelings and emotions of these relationships. Changing the relationship, you have with anything or person or place forces the networks to break and get reformed the same way people experience breakups.

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However painful or demanding it may be, such an internal network breakup is a good one. By so doing, changes will begin to occur, starting from your feelings, thoughts, and actions.

To know why you are repeating an action, it is imperative to discover the most negative factors behind your thoughts, beliefs, and actions. To say it in another way, it means you have to find out those certain things that cause negative patterns so that you can unravel them. One thing to remember is that trading requires that you give in your very best conditions before you can execute your plans properly. You must not be a victim of doing the same thing repeatedly and expecting a different result.

Happy Trading.. 🙂

About Aditi Singh 90 Articles
Aditi Singh is an independent finance and investment advisor since 7 years and recently added with Investment Pedia. Users are welcome to put comments on her contributions.

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