1:06 PM
Unknown
Most
people enter trading with the idea that they are going to make a lot of money.
In other words, they have high expectations. There is nothing inherently wrong
with that idea. In fact, we need motivation, and making a lot of money can be a
great a motivator. Unfortunately, many traders also have low self-confidence.
And are not profitable or not trading at the level they desire or are capable
of
This
is a fairly common condition that can be expressed in the simple equation: High
Expectations + Low Self-Confidence = Poor or Inconsistent Performance.
The
new formula becomes: Focus on Process Goals + High Self-Confidence = Better and
More Consistent Performance.
The
Mike Bellafiore’s excellent book, “One Good Trade”, and the book seems to be
saying the same thing. In fact, just reciting the title, “One Good Trade” as a
mantra (repeat it over and over) while trading seems to have the effect of
pointing one in the right direction of focusing on executing or following the
correct process while remaining flexible and realistic with expectations.
This
approach accomplishes a number of things, and helps to operationalize what I
mean when I talk about focusing on what we can control and letting go of the
rest. It is also a good example of one of my rules in action, that we must be
rigid with risk but flexible with expectations.
Trading
well over time requires that we control what we can and let the market do the
rest. In other words, we control the risk and are flexible with expectations by
accepting the fact that we must adapt to what the market is doing regardless of
our wishes. When we do this consistently, we build self-confidence over time.