Do you remember playing pretend when you were little? Maybe you were a superhero, a dinosaur or a princess. It’s normal when you’re little, and it’s usually harmless. Most children know the difference between pretending to be a superhero and jumping off the roof thinking they can fly.

But adults often forget.

For instance, we may stop pretending to be superheroes, but a lot of us seem convinced that we can pretend to be investors. That’s dangerous.

1. Pretend investors think that financial pornography is real, so the ticker tape scrolling across the television screen all day represents actionable information.Real investors know it might be entertaining, like going to the circus, but they would never make a decision because of it.

2. Pretend investors think it makes perfect sense to change their investments based on what they hear in the news: There’s a new president, so act! He doesn’t like the Federal Reserve, so trade! He criticized bankers, so buy bank stocks!Real investors know that they make changes to their investments based on what happens in their own lives. If their goals change or there is a fundamental change in their financial situation, then they consider an alteration. But they would never make a change based on someone yelling “buy” or “sell” on television.

3. Pretend investors think they need to monitor their investments all the time. The little supercomputer they carry around in their pockets makes it so easy.Real investors know that it takes a long time for a tree to grow, and it will not help to dig it up to see if the roots are still there. The same rule applies to investments. And because watching things get big slowly is not very exciting, real investors tend not to talk about that tree all that much.

4. Pretend investors talk about their investments — a lot. They say things like, “I’m long this, or short that.” They use jargon that often does not make sense, though it sounds kind of impressive if you don’t listen too closely. Sometimes they cheer for things like increased consumer spending, higher unemployment, or in some cases, war.Real investors understand the difference between the global economy and their personal economy and choose to focus on the latter.

5. Pretend investors will worry endlessly about the news in some far-off part of the world or the impact on their portfolio.Real investors focus on the things they can control, like saving a bit more next year, keeping their investment costs low, not paying fees unless it’s necessary and managing their behavior by not buying high and selling again when prices are low.

6. Pretend investors complain endlessly about volatility in the market and external actions that have short-term impact on the big bets they have made on individual stocks.Real investors have enjoyed the benefits of a market that is up more than 180 percent in the last 20 years.

So ask yourself this: Isn’t it finally time to stop pretending now?

SOURCE: BEHAVIOUR GAP

What do you do when you want to be a trader but you’re struggling to be consistently profitable?

Some traders take endless courses or read countless trading books, some find a mentor. Most just keep struggling until they get it right, or give up.

But Aaron Fifield decided he wanted to do something different. So he started a podcast where he interviews some of the best traders on the planet.

Fifield, the host of the popular Chat with Traders podcast – one I listen to every week – told Business Insider he “was making little progress and something had to change if I really wanted to become a profitable trader — it had to become more than a hobby”.“I understood the power of mentors and having relationships with those who were where I wanted to be (or at least, further advanced). But no one in my circle of family or friends etc had any interest in financial markets, investing or trading and I’d always learned a lot from listening to podcasts and enjoyed listening to them.”

And thus his podcast was born.

Fifield is now 88 episodes into his journey which has included chats with Blair Hull, Jerry Parker, Tom Sosnoff, Nick Radge, Nicola Duke, RealVisiontv founder Raoul Pal and even Jack Swager, the author of the Market Wizard series of books and himself a student of great traders.

So we asked Fifield if he could share some of the wisdom he’d picked up along his journey.

The one piece of knowledge that he’d like to share with his novice trading self and other traders was you have to find your comparative advantage, your edge, to be successful.

“You need to understand the importance of having an edge — and understand what an edge is,” Fifield said.

“Blair Hull defines as an edge as making the same kind of trade hundreds of times, and in the long run, having more money than you did to begin with.”

And it’s edge that pops up again when Business Insider asked him what were the most important lessons he’d learned from his conversations with traders.

Blair Hull told him “If you’re missing an edge, there’s no reason to play”, while Tom Dante taught him “If you’re not working on your edge, someone else is”.

For me though, my favourite episodes, amongst so many, are Fifield’s discussions with ‘FuturesTrader 71’. He appears in episodes 37 and 82 and is a trader who really learnt his craft from the ground up.

His point, the one Fifield thinks is among the most important he’s taken away from his scores of conversations, is that traders need to “stop being afraid that somehow you’re going to lose money”.

“In fact, you’re guaranteed to lose money, it’s part of the process.”

Traders need to learn how to lose before they can learn how to win, Fifield added

1. Successful traders trade uniquely

2. Successful traders are multidimensional 

3.Successful traders work at their trading

4. Successful traders know when to not trade

5. Successful traders are self-aware