If you’re anything like me, the innocent question “are we there yet?” will trigger some serious flashbacks. Either, you were the kid on those seemingly never-ending car rides that took boredom to a whole new level. Or you have now grown up and become the unappreciated chauffeur to your own children, with each passing mile seeming to stretch on forever. Thank goodness for digital devices of distraction, which tend to reduce the fractious demands about when the journey will end.
And what do these fond memories have to do with trading? That’s a fair question and the answer, of course, is that they reflect an essential aspect of human nature. As a species, we tend to want things to happen. And if they don’t, then we are tempted to change the game and create our own action: taking up a new sport, for example, or starting a new business venture.
Unfortunately, trading is one of the activities that can result in people seeking to raise their excitement levels. As a trader, I seek to keep it simple and follow a sound and proven trading strategy which provides me with so many benefits, with a self-directed lifestyle ranking higher for me than simply the opportunity to earn money.
But some people trade for the excitement and the action. They like the thrill of those charts flashing red and green like a Christmas tree. Unfortunately, this usually results in a strategy that is nearer to gambling than serious trading.
We can see a lot of spontaneous decision making, inconsistent position sizing and adherence to the flawed old mantra of “got a hunch - bet a bunch.” While this can be as much fun as a trip to Las Vegas, it is seldom a good way to reap consistent returns from the market.
We have to decide what trading should be for us. Is it just a hobby, like watching Rugby, going to the casino or having an outdoor adventure? Or do we actively visualize where our trading can ultimately take us, develop discipline to get there, hang in and simply stop worrying whether or not we are there yet. One hint - think bigger. (You ain’t seen nothing yet!)
Be aware that the best traders sacrifice short-term excitement for long-term outperformance.
Most experienced traders have found out that the preferred way to approach trading is to treat it like a business: have a plan, execute that plan, monitor your results and tweak if necessary.
Unfortunately, this is not glamorous at all. It’s just like Mom and Dad driving safely to the vacation destination in the trusted and crash-proof family sedan. The trip might be boring as Hell, but safe arrival at the destination ultimately always made you forget about how you got there. Its far preferable than driving recklessly and dangerously to shave a few minutes off the journey time as there could be a lot to lose in the heat of the moment. For those reasons, I hope your trading will always be boring , and that instead you set yourself up to take up your personal dream destination - your self-directed life
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.