Knowing Yourself Is More Important Than Knowing the Market


Yes, I’ll say it again, knowing yourself is more important than knowing the market. Please don’t get me wrong, of course it is important to know the market or else how would you know how to trade it? Right?

What I am really saying is this – you should prioritise learning about yourself over learning the market. That way, you can manage yourself much better when you are in the market.

Until Something Changes

Before I started trading, I thought I knew myself pretty well. I asked myself, “Seriously, how much do I need to know about myself to trade? Let’s just learn about the market and get on with it.” And I did get on with it. In fact, I was really enjoying the learning that my coach said that I was picking things up very quickly. “Great!” What a confident booster.

Six months went by and trading went really well, but only until the day I decided to top up (more money) into my trading account.

My rule was, whenever I closed with a profitable month, I would top up my account and I actually did that for a few months. However, what I did not realise was that I was also trading less and less as time goes by. To my surprise, I found out that I had a very subtle trading problem – fear of losing money. Just to be clear, it has nothing to do with the fear of losing but it was the fear of seeing my money disappear.

In short, I had a psychological obstacle that was stopping me from trading profitably and it was working against me subconsciously. After more observation, I found out that (1) my relationship with money (or Money Relationship) was unclear and (2) this issue has affected my trading significantly.

Note that this has nothing to do with my technical know-how and it was a pure psychological problem.

Stop Chasing and Start Thinking

Stop ChasingTrading Psychology has been one of my biggest passion and, thanks to that, I make every effort to observe my trading psychology and to analyse my progress. Thankfully, I managed to identify the issue of Money Relationship within a few months of trading.

Unfortunately, not many traders make an effort to monitor their psychology. Many traders have no idea why they are not profitable even though they have decent technical knowledge. Instead of analysing themselves they constantly chase after the so-called Holy Grail.

If you are one of them, please stop chasing because a Holy Grail trading system does not exist. More importantly, start thinking about you and your personality. Or think about your beliefs and your trading routines that might not be in sync with your personality. Or anything along those lines.

If it took me a few months to realise and verify my trading problem (even though I pro-actively manage my own psychology), think about those who do not – how long do you think they would take to identify their trading problems?

Conflicting Beliefs

Money Relationship is just one of the many problems that exist and I noticed that it was a common problem amongst many traders. However, another frequent problem that traders have is the issue of holding tightly to conflicting beliefs. As written in my free ebook, beliefs are often inherited from your parents, your environment or your early trading education. Many people carry these beliefs without realising it. That’s fine until they start to conflict.

The following is an example which I used in my trading psychology workbook (see details here) and I think it’s a great way to illustrate my point.

“Cut your losses and let your profit run” will completely contradict “Take profit now as the market will still be open tomorrow”.

One belief requires you to manage your stop losses very carefully and the other requires you to aggressively use take profit targets. They work fine as individual trading mechanism but you will really go nowhere if you use both of them as the same time.

Do you see my point?

What should I do now?

If you are genuinely committed to trading success, here are a few actions that I would recommend:

  1. Include in your trading journal an emotional control mechanism (see related article). Recording your emotions and thought process when you are taking a trade is a great way to pro-actively understanding yourself.
  2. writing-things-downWrite down all your trading beliefs (somewhat similar to point 1). The chances are, you won’t remember all of them consciously, so write down anything that comes to your mind each time you analyse a trade because many of your beliefs will only surface subconsciously.
  3. You could consider getting professional help. It might be less useful to look for technical coaches but try using a personal coach instead (or something along those lines), trading coaches that help you understand yourself will be ideal. 
  4. An alternative to that is that you can consider getting a copy of my Trading Psychology Booster workbook (read more). The workbook is a 28 day course to help you break down many internal elements that are not obvious. At the end of it, you will create a clear trading plan that is aligned to your own personality and trading beliefs.


I think the point of my article is quite clear, if you want to be a successful trader, you really need to take control of your own personal mental environment (this is a phrase another trader once told me and I thought it was a great way to explain today’s article). Trust me, this applies not just in trading but in many non-trading activities as well.

There is no best way to resolve this but I truly believe that having the awareness of yourself will be the best starting point. Once you have identified your trading problem (be it psychological or beliefs), you will eventually find the solution.

Thank you for reading and have a good weekend.


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