So, what are your excuses - and will you do anything about them???

When a trader who is struggling to become profitable loses on a trade, or on a series of trades, what is their usual response? And how does it differ to when a long-term successful trader suffers a loss or a drawdown?

Well, most successful traders have long since eliminated any errors, repeated mistakes or psychological issues that may have held them back in the past. They take full responsibility for their own actions, and the consequences of those actions. They also know that, how they react to the results of any prior actions will have a direct impact on how they think and feel going forward.

Most struggling traders however are quick to blame anyone or anything other than themselves - they do not take responsibility for their actions. As a result, they end up building a list of excuses with which they can justify or support their poor performance.

These excuses come out from time to time, but generally come from the same source. I gave some examples in an old post here.

This gap between the "those who haven't" and "those who have" is where all those excuses fit in.

Excuses are typically where money ends up draining from your trading account in big chunks, either by way of a loss of equity or an evaporation of open profits. Your job as a trader is to fill in those cracks, by eliminating those excuses and replacing them with something that will be robust and work in the long-term. It should form part of your goal of continual self-improvement.

"It is a happy circumstance that when nature gives us true burning desires, she also gives us the means to satisfy them. Those who want to win and lack skill can get someone with skill to help them." - Ed Seykota

I don't doubt that the vast majority of traders want to win. This may mean a tweak to your trading plan, or the entry/exit rules you use. More often though, it may mean that you have to make a change within yourself. And this is where most people struggle. They refuse to accept that they are the cause of the effect.

Sometimes discussing these issues with other traders, or by engaging a coach or mentor, and then working out a plan of action may help. Others may be able to work things out for themselves. Either way, you need to be committed to this process of improvement, otherwise you won't be around for long enough to get the rewards you desire.

If you are able to accept that, then you have started on the journey of progress. Often the first step is the hardest. But you need to make sure that you follow through.

Part of eliminating these excuses comes from having the discipline to keep a trading record, not purely in terms of numbers or metrics, but also of emotions and feelings. One trader I know kept a diary solely focused on his trading mindset. When he reviewed this several months later, he realised that his thought processes and emotional control had completely changed for the better. In other words, by improving his mindset he had plugged the gap from which money had been lost.

If you are going to do anything about your trading in 2015, resolve to identify the areas requiring improvement, and eliminate those excuses. Work out a plan to deal with it going forward. Most importantly, then you need to act on it!!!

And if you don't believe me, here's what Ed Seykota has to say on this:

"A losing trader can do little to transform himself into a winning trader. A losing trader is not going to want to transform himself. That's the kind of thing winning traders do."