There is plenty of information in this book and others that tells actual and aspiring traders how to make a profit. Lack of information is not an obstacle. What is an obstacle is people's beha­vior. Too many people don't know how to accept success when it comes along. They need adversity to strive against, rather than being able to maintain focus on winning consistently. This is not a conscious decision by any individual trader. It is the tendency to change trading behavior when success comes along and not stick with the hard work of analysis, both of the market and of one's own actions, that is necessary for on-going success. In the rest of this article, we'll look at some of the things that prevent traders from winning consistently, all of which come from within the trader.

Among the things that attracts many people to day trading is the freedom it offers. There is no boss, no one to tell you when to come to work, or that your work is not good enough. In fact, there is complete freedom to do as you please. What can often happen, however, is that instead of this freedom being the deliverance that people expect, they are sidelined by the lack of control and feedback. In all of society there are controls to keep us on track and to give us warning signs, like a bad review at work warning us of dire consequences unless improvement is made, or a traffic cop handing out tickets for bad driving. Feedback is constant, and whether we realize it or not, we expect it to be there. One of the dangers in trading your own account is that there is no feedback, only the level of capital in your account. For many people, that lack of feedback can allow destructive behavior to become entrenched in their trading actions. When trading your own account, you have to let the level of capital in your account be your boss. If it is declining, or not advancing as quickly as you expect, do not trick yourself into believing that next month will be any different without a change in your trading behavior.

In other walks of life, when people enter into destructive behavior, there are generally self-help organizations to assist them in their recovery. To my knowledge, there is no such help group for traders. If you find some Internet chat room or other support group that you like, that is fine. Just don't use that to make your trading decisions.

Just because there is no well-established trader's self-help group does not mean that there are no lessons to learn from existing self-help groups in other areas. In his book, Trading for a Living, Dr. Alexander Elder points to Alcoholics Anonymous as an organization that can help traders. The discipline an alcoholic must live with to avoid alcohol is similar to the discipline a trader must live with to avoid losses. Dr. Elder's profession as a psychiatrist took him to many AA meetings, where he heard how just one drink led the alcoholic down a slippery slope to drunkenness, and he noticed a similarity with his trading activities. Just one lapse of discipline could lead him to lose control and compound losses. In other words, Dr. Elder equates the losses of a trader to alcohol for an alcoholic. So the same way an alcoholic avoids getting drunk one day at a time, which adds up a week, then a month, a year, and a decade, a trader avoids losses one day at a time. Anyone who trades knows that a winning streak inevitably ends when you start to become too sure of yourself and lose discipline.

There are many people who are not alcoholics, but who have had a little too much to drink at one time or another. Few people set out to get drunk, but how many people have gotten up in the morning with a hangover, swearing that they will never do that again? Plenty. No one thinks about tomorrow's hangover at the time he takes that one-drink-too-many. It is the same in trading. It can be difficult to avoid the lure of an ill-advised trade that holds some promise of getting back your day's losses, and then only deepens them.

I like the analogy up to this point, but Dr. Elder takes it a little further by saying that if someone who has to avoid alcohol is called an alcoholic, a person who has to avoid losses is a loser. He advocates telling yourself each day before trading starts that you are a loser. The idea is that this will remind you that without utmost care, you will generate losses rather than gains during the trading day. Here is where Dr. Elder and I part company, because this is a little too negative for my taste. I do applaud the goal of reminding oneself daily that any cavalier trading actions will likely result in generating and compounding losses. But I stop at recommending that you read your rules every day before starting to trade and stating that your goal that day is to trade in a disciplined fashion consistent with your premarket plan. This should be adequate to keep your focus on avoiding losses.

The other self-help organizations that are interesting from the viewpoint of trading psychology are the weight-loss folks. For most people, a simple plan that includes a healthy, low-fat diet and regular exercise is enough to lose weight and keep it off. But if it is that simple, how can a huge weight-loss industry derive millions of dollars from helping people lose weight? It seems many people are looking for that magical something: a new food additive, prescription drug, or fat-burning exercise machine that makes losing weight easier. Many people seem to take a similar view when it comes to trading. The majority will look for some market secret that successful traders know and they don't. Again, though, there are no market secrets. What leads to long-term trading success is simple to say, but difficult to adhere to. You have to become your own self-help organization and remind yourself constantly of the rules and disciplinary measures needed to reach and maintain trading success. Those who promote market secrets that you can follow blindly and promise to deliver easy returns are about as believable as those who promote the latest exercise machine or miracle weight-loss drug that will give you a model body effortlessly.

Just because you know what to do does not mean you will be able to do it. Doing what leads to success on a long-term basis is a challenging proposition.

There are many warning signs that you should heed when trading. One of the most common is the reluctance to take a break when you lose. If you enter a losing streak and find it impossible, or even difficult, to stop trading for two weeks or so for self-evaluation, you may be in trouble and in need of help. You should consider Gamblers Anonymous or serious psychotherapy. Equally common is the desire of traders to hide losses, or to claim that money obtained from other sources has actually come from trading. Both of these problems are indicative of an emotional rather than intellectual involvement in trading, which will only lead to depleted capital.

Your best defense in dealing with these obstacles is a set of rules that is customized to your strengths and weaknesses, which can only be generated from analysis of your own trading actions. In the next section, I share with you my own set of personal rules that guide my trading actions on a daily basis. Whenever I break one of these rules, I end up losing money.