Part 1: Stop Blaming Yourself — Start Looking at the Market
This is a Guest Post by Dan Fitzpatrick of StockMarketMentor.com
Most traders make the same mistake when their performance starts to slip: they immediately turn inward and start blaming themselves. They decide they’re emotional, undisciplined, unfocused, or not cut out for trading. It’s a familiar spiral, and it’s understandable — when you’re losing money, you want an answer. And since you’re the one feeling bad about the poor results of your actions, you will tend to hold yourself accountable. It’s a natural reaction to losses.
Most traders start at the wrong point in the diagnostic process. Before blaming your flawed psychological makeup, you need to examine the environment you’re operating in and the strategy you’re using within it. If the plan doesn’t align with the market, no amount of discipline or emotional control will rectify the issue.
It’s no different than how the ocean treats a swimmer. The water doesn’t care about you and holds nothing against you. Yes, you need to know how to swim. But you also need to know when it’s unsafe to be in the water. If you don’t see the ocean, even the best swimmer will struggle when a rip current or undertow occurs. If you are in dangerous waters, your swimming abilities are not the problem. You shouldn’t be in the water.
Remember that old breakup excuse, “It’s not you, it’s me?” Well, apply that to trading in the wrong environment. “It’s not me, it’s the market.”
You are indeed making a mistake. You have your proven strategy and are applying it. But you are in the wrong environment. You are trying to swim in choppy waters.
You might be a top-notch baseball player with a perfect swing — maybe you knock it out of the park regularly. But take that same swing onto a golf course, and you won’t even make contact. The problem isn’t your mechanics; it’s that you’re using a bat on a fairway instead of a club in the tee box.
The market is the first variable you must consider, because the market determines whether your style is being rewarded or punished. This isn’t about forecasting or predicting where the market “should” go — it’s about honestly assessing the conditions in front of you.
Think of the market like a river. If you’re going to swim across it, you need to know the direction and strength of the current. A strong, trending market is a friendly current; it pulls you along and forgives your missteps. A choppy, indecisive market is a headwind that pushes back against nearly every effort you make. If you keep swimming against it — or worse, pretend the current doesn’t matter — you’re going to exhaust yourself long before you reach the far side.
Many traders ignore this reality. They continue to trade the identical setups they used during stronger markets, even after conditions change. The setup isn’t failing because the trader suddenly got emotional or irrational — the setup is failing because the environment no longer supports it.
Years ago, Willie Nelson was asked how he managed to regain popularity after a long period of relative obscurity. His answer was perfect: “I didn’t do anything different. Musical tastes just came around to where I’ve always been.” In trading, the environment doesn’t revolve around your strategy. You must revolve around the environment. If you cling to an approach built for a different market, you’ll run out of capital before conditions “come around” again.
This is why relying on predictions — your own or someone else’s — is a dangerous habit. Every day, knowledgeable analysts make compelling arguments about which sectors should lead, which industries ought to rise, and which commodities are destined to explode higher. Their logic may be airtight. Their data may be impressive. And yet, none of it generates profits unless the market agrees. A brilliant thesis in a non-confirming market is still a losing trade. The market is the final arbiter of right and wrong.
If price isn’t confirming your story, the market isn’t wrong — the story is incorrect, or at least early.
And “early” is just a polite way of saying “wrong for now,” which is the same thing as wrong from a P&L standpoint.
Opportunity in the market becomes obvious not when you predict it, but when you’re already in a position that the market is actively validating. When a sector suddenly wakes up, or a group of related stocks starts moving in unison, the opportunity doesn’t lie in forecasting what might happen next month — it lies in recognizing what’s already happening right now. And the sooner you realize it, the more profitable your trade will be.
If you are in those stocks as they first begin to run, and each day’s price action reinforces the strength in your position, that’s when you press your advantage. Winning trades must pay for your losing ones, and they can’t do that if you consistently cut them short. A trader who never presses when they’re right will always struggle, no matter how good their strategy is.
So when you find yourself frustrated with your performance, pause before blaming your emotions. Start by asking the more objective questions: Is the market currently favorable to the setups I trade? Am I using the same playbook that worked months ago, even though conditions have clearly changed? Am I expecting follow-through in an environment where follow-through has been almost nonexistent?
These questions reveal far more than any internal monologue about “discipline” ever will. Once you’ve confirmed that the market supports your strategy — and not a minute before — then you can evaluate your execution and mindset with a clear head.
In Part 2 of this series, we’ll shift from context to process and walk through the SMART Trading framework: Strategy, Market, Actionable Setup & Reward, Risk, and Tracking. Once you understand the environment, the next step is understanding the machinery of your own approach. That’s where things really begin to change.
You can follow Dan Fitzpatrick on X (Formerly Twitter), watch him on YouTube, or get his “Fitz In Five” Daily Trading Video at StockMarketMentor.com.