By now many of you are in full swing with the new year, and at least 6 days removed from creating your new year resolutions. Below are some interesting statistics about new years resolutions, some of which I think will not shock you.
1) About 8% of people are successful in achieving their new years resolutions (not far off from trading)
2) 25% of those who make them don’t even make it past the first week
3) 34% of those resolutions are related to money
Do these numbers above surprise you? My guess is if I surveyed 1000 people, the majority would not be surprised.
We’ve all made resolutions and failed to keep them (including yours truly).
Have you ever asked yourself why is that? I certainly did.
Why do so many people consistently make new years resolutions, yet fail to really nail them? Made a resolution to always fill out your trading journal each day without fail, only to a few weeks/months later finding yourself not filling it out? Why?
The reason you did not fill out your journal, or consistently risk a fixed % of equity per trade, or whatever resolution you made is the same underpinning reason all resolutions fail.
In this article, I will briefly share a far better method for making consistent change, then ask the critical question as to why most fail.
A Far Better Model For Consistent Change
One of my yoga students Mark Gonzales eventually went on to become a great yoga teacher himself. In 2012 he was given the Yoga Journal’s Talent Search Winner Award, and has one of the most influential power yoga channels on youtube. He still humors me in letting me know my classes were some of his hardest ever. I appreciate that sentiment as I wanted him to push his body and mind to become more than what he thought he could do.
One brilliant insight Mark recently shared captures a far better model to consistent change. Here is what he said below;
“New Years Resolutions are for those who didn’t work hard enough or look after themselves the year before. Self improvement can start now, all year round, from this moment forward.”
Indeed, for those who are constantly working on themselves all year round, there is no need for a new year resolution. It is far easier to work on yourself month-in-month-out then to rev up the change engine once a year. If you have not been working on removing your limiting beliefs throughout the year, then a new year’s resolution is most likely to fail.
It is like not running all year, then all of sudden taking yourself out for a long run when your lungs and legs are not ready for the task. You are most likely to fail, and then imprint negatively on your self-image ‘it is not like me to make the changes I need/want to‘.
This only hinders your confidence and decreases your likelihood of making lasting change in the future. Every negative imprint from failing to keep a commitment or resolution only adds on to the difficulty of changing your trading mindset in the future.
Daily affirmations by themselves will not make lasting change, especially since most are done improperly. Their is an underlying flaw in daily affirmations most fail to see. Also making those trading resolutions at the beginning of the year creates the idea you can only change once a year. This is also a fateful idea.
It is far easier to work on smaller goals throughout the year, that eventually build up your self-image and confidence to make the big changes. When you have seen yourself do the work earlier, it becomes more ‘like you‘ to do the work later. This is a far superior model for consistent improvement and hitting your target.
Why Do Most Resolutions Fail?
Understanding this one thing would help unlock many of the critical reasons why you make the same trading mistakes, why you have a streak of winners and lose them all in one trade. It is the same reason why you follow your trading plan for a few weeks/months, but then go off the reservation.
The reason why a trader fails to make consistent change and build a successful trading mindset is the same reason why most resolutions fail.
With that being said, before I share the answer – why do you think most traders make the same mistakes over and over again? Why do you think you fail to keep your risk management? Why do you think you succumb to the same emotions you know are toxic to your trading?
Many of you are smart people and can certainly figure out most of what you are doing isn’t helpful. Yet you still do it anyways. Why do you think you continue to do things which you know will only hurt your trading performance?
Please make sure to share and comment below. Your answers will be incredibly revealing as to where you are in your trading process, how much you understand about the trading mindset, and what you have to build mentally to become a successful trader.