I think the hardest thing for most people to develop in their trading career is being honest with themselves in what needs improvement in respects to their character. 

We all have character flaws and we’ve all made mistakes right.  All of us also have unique talents and have had success as well.  And I think no matter how you slice it, every human being is an individual first before being part of a group. 

In my opinion, the single biggest problem facing each of us as traders, is knowing where to draw the line in our individual thinking as it then becomes our individual actions imposed on the group. You need to understand what creates your urge to action, why is it that you do what you do.

Everyone of us will express that in different ways.  Y’know for some of you, a sharp rally in the market could cause you to take profit because you think prices are too high and may fall back soon.  Some of you might look to initiate a new sell position from here.  Others might wait for a pullback before buying, and some of you might buy right at the top of the rally because you think it could be a breakout.   In all cases right, the price action is simply there.  It is what it is.  Every trader participating in the market is choosing to see things a certain way, and we all execute our trades from a unique point of view.  But in all cases, the price action itself is the same for everyone.  All of our individual actions form the group.

The group, the crowd, the herd, will keep going with or without you.  In order to profit from this, your thinking must rise above the average thinking process that comes from the unregenerate mind of the herd.  Your thinking and behavior must recognize what is destructive and what is profitable.  When you see the herd choosing to behave destructively, you then have the opportunity to behave profitably.  The herd or the crowd will only function on the principle of the sum total of individuals behavior and that is always at the lower end of the spectrum, and because of that, it will be mostly made of up people who don’t take the time to think that their behavior is destructive right, in other words, they are behaving very similar to every other member of the group. 

When this happens, you need to think and behave differently, so that you’re more aware and ready for new information about the structure of the group.  That difference in thinking comes from your discipline of being a student of yourself, self analyzing your behavior and observational skills so that you can see clearly whether you are performing exactly like the crowd which is destructive, or your'e about ready to do an about face and exploit the destructive crowd behavior.  Once you know this difference, and it doesn’t have to be by a wide margin right, you will finally buy weakness and sell strength often enough to win.

You will finally realize that confronting yourself and doing what is uncomfortable in trading will be the source of your profit potential.  Asking yourself the uncomfortable questions and the most confrontational ones.  Where is the loser?  What trade today is the trade that nobody wants to take today?  How can I discipline myself better today to follow my trading plan?  These are just a sample of what you need to ask yourself right. 

Y’see guys, I no longer have the conversations with others that involve opinion about price action, or what the fundamentals will do to prices today, or what some talking head in the press has to say about the market, and so on, because that type of thinking is thinking like the crowd, and so I now know how to exploit that crowd thinking.

I have to do this daily because I also know I have a tendency to be overconfident.  Its easy to think that when you’re winning consistently, you’re tempted to think you know what you’re doing.  That’s an illusion.  However, since Im tired o losing and don’t want to do it anymore, Ill do whatever it takes to do whatever it takes to remain a winner, even if that means being a better student of myself and critically analyzing myself, not someone else, critically analyzing myself, so that I don’t end up in the poor house.

In my opinion, your objective in this business is to exploit price action.  That usually means exploiting the crowd thinking.  To do that means you have to be honest with yourself and critically look at yourself and say what do I need to do personally right now to adopt winning behavior and start thinking like a winner.  That usually means being a student of yourself.

Y’know no one got to the top of his or her game by accident.  All or most successful traders will tell you that the first blowout taught them not to rely on illusion, and that includes the illusion of the crowd being right, and the illusion of you not needing to improve yourself because you think you’re perfect.  You’re not.  Yet the market requires from you nothing short of perfection in order for you to profit from it.

Be a student of yourself, and you will become a lot clearer in seeing where the profit potential in the market is going to be at today.