The Leap

simple trading

It’s tempting to jump right into trading isn’t it? To take the proverbial leap.  Especially that exciting and potentially enormously lucrative Day Trading right?

The attraction is often driven by a large and diverse range of “reasons.”  Here’s a sample:

  • financial imperative
  • the desire to avoid getting a “real job”
  • the related desire to avoid working too hard
  • the desire to make a big pile of money… fast
  • it looks exciting
  • it looks like a good place to prove how smart you are
  • how hard could it really be right?

The Peril Of A “Results Focus”

The “problem” for most traders is that those who manage to achieve consistent profitability do so by building a trading process… not through any single trade or decision.

The problem is that most people, especially those lugging around the “reasons to trade” cited above, are ill prepared to build such a process.  For example:

  • financial imperative clouds your thinking and makes you zig when you should zag… hold on when you should exit and exit when you should hold on… or
  • the desire to avoid getting a “real job” (i.e., a 9 to 5) and skip that dreaded “hard work” shields you from the truth about proprietary trading (or any small business for that matter)… that it’s incredibly hard work that scoffs at 9 to 5 on its way to 24/7… or
  • the “pot of gold” approach prevents you from recognizing and appreciating reasonable gains, while failing to truly accept small losses… virtually guaranteeing that you will eventually, inescapably eviscerate your account.

So what’s a would be trader to do?

Don’t Focus On Results

Redirect your focus to the how as opposed to the what.

How exactly to do that?  Give up your focus on results and focus on the process.

By focusing on process, traders can build their trading for the long haul, and, as such, any particular trading decision, while not unimportant of course, isn’t nearly as pivotal as the ability to make the next fifty… hundreds… or even thousands of trading decisions properly.

So you’re probably right… this trade you’re looking at is important and yes, you should want to get it “right.”  That said,  if you don’t have a logical, internally consistent process for making decisions about what to trade, when to trade it and how it should be traded, your result on this trade will be far more subject to the winds of chance… i.e. luck, than you would like.

The Trader’s Simple Point…

If you don’t have a trading process, get one.

If you have a broken process, fix it, because, in fact, getting the process right is far more important than whatever particular trade you’re in right now… No matter the outcome of the trade.

If you have a process that works, monitor, maintain and exploit it.

You can thank me later.

 

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