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Locus of control

Whether you experience outcomes as driven by your own actions or by outside forces - and the trap of being wrong in either direction.

An internal locus attributes results to your choices; an external locus attributes them to circumstance. Neither is correct on its own in a domain with real randomness.

Traders fail from both ends. A purely external view produces helplessness and conspiracy: the market is rigged, the brokers hunt stops, nothing can be done. A purely internal view produces the illusion-of-control and self-punishment over outcomes that no process could have avoided.

The workable position is precise rather than balanced. Own the process completely - entries, size, stops, whether you traded at all - and hold the individual outcome lightly. That split is the whole of process-over-outcome stated in psychological terms.

Related: illusion-of-control, process-over-outcome, self-attribution-bias, self-efficacy

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