Series: Mental Roadblocks of Day Trading
How many people do you know, at any given time, that are on a diet? It seems like the perpetual battle for many Americans, despite the billions of dollars of industry aimed at treating the overweight. There are many reasons people overeat, under-exercise, over-analyze their weight but the common theme in any case is desire. If you desire to run a marathon MORE than you desire that cheeseburger and chocolate milkshake, chances are you will be more successful in your dietary goals. Fitness gurus report that people with a concrete goal, are exponentially more likely to succeed on their workout regime. Be it a wedding, a 10 year family reunion, a marathon or a vacation, when people have a clear idea of their end goal, the process becomes more focused and successful.
The parallel between day trading and dieting seems a little thin, yes. But the theme is the same. When you day trade, you are choosing between a momentary impulse (the cheeseburger) and a long-term objective (the marathon). If your objective is to build your trading account, work from anywhere in the world and have control of your trading future, then you will be less likely to react to moments of weakness or stress. If you are working without a clear goal, you will trade for the immediate gratification of action instead of the long-term priority of success.
1. Have your goals in front of you while you trade. Keep a picture of that vacation spot your want to visit or that great little sports car, or your daughter’s college acceptance letter!
2. Place a note in plain sight that reads, “Am I trading for this minute or for the rest of my life?” Ask yourself this question many times a day. If you need a more colorful question, you can ask yourself, “Am I choosing the cheeseburger or the marathon?”
3. Pat yourself on the back for correct trading, regardless of the outcome. Not every trade will work. A system that is correct 70% of the time is considered a good system. That means that 30% of the time, your trade will turn against you. It is easy to get emotional when a trade turns against you but this is when your true trading prowess is evident. Take a minute to ask yourself if you executed the trade correctly. If you did, then you are in line with your goals and congratulate yourself for being a disciplined day trader.