Accepting Criticism

Accepting Criticism

Novice traders are infamous for needing to be right. This natural, human tendency is so powerful that novice traders engage in unproductive trading behaviors to avoid admitting that they are wrong. They might hold on to a losing trade, for example, to keep losses on paper. They may procrastinate or put off making a trade in an effort to avoid facing the consequences of a bad trading idea. In many ways, a need to be right can be stifling. Rather than feel free and creative, a trader who consciously or unconsciously needs to be right may hold back at critical moments in the midst of a trade. When you are inhibited and afraid, you avoid making trades. And unless you make trade after trade, you'll never hone your trading skills and master the markets. Accepting feedback and criticism is vital for trading success.

Why is it so hard to accept criticism, whether it is from another person or the markets? One of the main reasons is that we associate criticism with feelings of inadequacy. We tend to place great psychological significance on a critical comment or negative feedback of any kind. It is as if parents or teachers are criticizing us for doing something morally wrong. But this is a false assumption. Criticism doesn't need to have any emotional meaning. It's vital to take criticism and feedback in stride. It isn't personal; it's just feedback. If you can learn to downplay its emotional significance and view it as cold, hard data, you'll be able to use this information to hone your trading skills.

Another reason it's hard to accept criticism is that we have an irrational need to be perfect. We often assume that unless we are always right, we will not be successful. We learn this assumption from school. In school, we were usually allowed only one chance to turn in a term paper or take a test. In most school settings, you can't retake a test or rewrite a term paper, and thus, you can't learn to hone your skills. Many people carry over this mindset into trading. But it doesn't need to apply. If you make small practice trades, for example, you can make a trade, learn from your mistakes, and make a new trade. Over time, you'll hone your trading skills. Since risk is managed, you can make mistakes and learn from them. There's nothing to fear.

There's no reason to avoid accepting criticism. Indeed, if you want to be successful at trading, you should seek it out, either by making trades and seeing what happens or consulting a trading coach. The more information you get about yourself, the more likely you'll be able to hone your skills. So seek out criticism. Don't be afraid to accept your limitations. If you can stand there and take all the criticism you can find, you'll hone your skills to the point that you will trade the markets skillfully and profitably.