Trading is a business and performance activity that must be measured over the long-term, but managed on a trade-by-trade, micro level. For example, your main goal should be to come out net profitable over a period of trades, days, weeks, or months. It doesn’t really matter if you win any single trade, only if you win over time. On the other hand, you must make sure you execute each trade to the best of your ability.
Just like in poker, you’ll win some hands and lose some. You’re not trying to take the entire table’s cash on every single trade, and you shouldn’t try and do that with the market either. Instead of looking for the daily grand-slam, go for consistent base hits. And if you work on a winning strategy, good risk management, and stay disciplined, you’re chances of being profitable are infinitely greater than shooting from the hip.
Don’t be over-eager to get into a trade. If you open your trading platform too anxious to place a trade, chances are you’ll get yourself into a less-than-optimal situation. So just sit back and relax; your trade could be right around the corner. I always like to start with a prime trade; something I feel really confident about. Just to reiterate, I don’t care if that trade works or not, I just want to gain self-confidence and know that I’m executing on my plan. And when I’m in the zone, you don’t want to be on the other side of my trades. So, when you get a “prime setup”, play them with confidence. And play them as if they have the potential to be a grand-slam. Not every trade will turn out to be a huge winner, but give it a chance to show you if it’s going to turn into one. On the other side, if the trade starts to fizzle out, then don’t get attached by hanging on. Get comfortable with scraping trades and getting ready for the next.
Don’t think about the money when trading. Instead, focus on your performance and execution on every trade. Of course you need to consider the risk on a trade, but your intra-day focus should be on your technical strategy and management plan, not if you’re positive or negative at that current moment. It’s possible to be winning, but trading poorly. Sooner than later, it will catch up with you.
Ask yourself this question: “Is self-control really that hard?” A lot of people slave away for 40, 50, 60 or more hours a week, often doing jobs they hate. All you have to do is sit on your hands when the deck isn’t stacked in your favor, then play strong when they are. This is often the most difficult part of trading for a lot of traders. A person can be disciplined for 95% of the month, then have a temporary moment of laziness that can wipe out a major portion of their profit. So, you must play like a professional until the game is over!
Posted in 