Trading really can be such a frustrating game. One day you're winning and making a lot of money, the next day you don't seem to be able to put a foot right. It's also a game of fine lines.
One mishap here, one misjudgment there and you can go from what ‘should’ have been a highly profitable day to a big losing day. Some of the causes for this you might be able to easily accept as part and parcel of the trading business. However, some of them are infuriating and frustrating. These are the things which happen and make you really mad. I’d like to share with you a few of these things which have happened to me at various stages in my career.
Identifying that the market is strongly trending, going with the trend and yet still ending up losing money.
Getting stopped out to the tick just before the market turns and races off in the direction of the trade.
Taking an entry at a price, immediately realizing that a different price would have been far more sensible to wait for, staying in the trade anyway, then feeling a whole load of heat while the market moves to test the price that should have been the entry.
Missing some really good trading because there was something else needing doing, sitting down at the trading desk to see this, then losing a packet on the rest of the day.
Seeing the market motor in the direction of a trade, then getting out of the trade way too early and without any proper reason, only to see the market continue to motor in the same direction. After the trade is exited, the market nearly immediately continues in the same direction and hardly even moved against the trade anyway.
Seeing a trade get to very close to a profit target only for the market to turn around, still not taking any action to exit and then finally having to exit for a loss.
Straying from a proven strategy when the market really looks like it will do something different this time, only for right at that moment following the ‘custom’ entry, the market moves in favor of the well thought out, well tested strategy and hard against the position just taken.
Making any of the above mistakes over and over again without doing anything to change them.
I can almost feel the temperature of my blood rising just writing about these things! I’m sure that many others will have experienced some, all and possibly many other of these abominations. But the thing is, that these intensely annoying things are really only annoying because they are preventable. Perhaps not in every case. You will for example, get stopped out at the very high or low of a move on occasion just before the market turns in what would have been your favor. However, if the same thing keeps happening, then that is shouting load and clear to you that you need to take a look at your strategy and possibly make an adjustment to it. Until you learn the lesson the market is trying to give you, the same frustrating situations are likely to repeatedly crop up.
The absolutely imperative aspect to all of this is that when the inevitable annoyances do occur, you don’t let them take hold of you and your emotions. You take hold of them. You look at what happened and why and whether there’s a way to adapt you behavior, strategy or money management to lessen the probability and impact of the same thing happening again. If you keep doing the same things, you shouldn’t expect different results. Let your annoyances be the catalyst for change.
“It’s fine to celebrate success but it is more important to heed the lessons of failure.”
Like with many things in life, the best lessons are often the hardest to stomach. But if you’re willing to be humble and listen to them, they will be the most valuable to you in attaining success. So when you next get frustrated and something really annoys you, step back and assess why that should be. This assessment could just end up saving you a great deal of time, money and future annoyances.
For more updates from Mark and the team at NetPicks, be sure to visit their trading tips blog at NetPicks.com.