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Trading the Market or Your P&L? |
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By Dr. Andrew Menaker
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July 15, 2011
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We seek immediate comfort and try to avoid things that may bring immediate discomfort. Understand this basic principle that guides much of our thinking and behavior. Trading involves discomfort e.g. the discomfort of watching a move without being on it, the discomfort of holding a winning trade while it stalls or pulls back, the discomfort of admitting the trade is not working, the discomfort of losing money, the discomfort of boredom or anxiety while waiting for a valid entry, etc.
In many ways learning to tolerate discomfort is the key to taking control over your actions so you can act on your analysis/plan/trade idea as opposed to acting on emotions.
When we trade our P&L we are trading to manage our discomfort. Good trading means we have to tolerate discomfort, not avoid it. Ask yourself, “Am I trading my P&L or am I trading my feelings?”
To learn more from Andrew, be sure to register for his blog updates at AndrewMenaker.com.
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