As traders, we often look for that extra ingredient that we firmly believe that can solve the problems that trading entails and start reaping great benefits in our account. Whether you think there is a magic indicator or some revolutionary insight from an expert on fundamental analysis or economic reporting; There will always be a large number of traders who think that they have not yet found the “master key” to achieve success with their trading.
As in many things in life, we are the worst enemy when it comes to achieving results with trading, and achieving consistent results for many does not mean adding one more indicator or using new software, more than that it is about doing less, being less involved with your trades and practically “doing nothing” most of the time.
Being too involved, thinking too much, and analyzing too much is one of the biggest, but least identifiable, mistakes most people make, and if you want to make money in the markets, you’re going to have to learn how to get rid of yourself along the way and let the market “think” for you.
What is the biggest obstacle and that does not allow you to achieve success in your trading?
Think for a moment about all the negative trades you’ve had. Some, I am sure, were normal losses, as with any strategy that will have losing trades that are distributed throughout the winners. And I’m not talking about those losses; The losses that I refer to are the ones that frustrate you because you “knew” that you lost because of something you did and that it was not part of your trading plan or that it was an undisciplined action taken.
Let’s be honest at this point; How much money have you lost trading or doing too much trading or being too involved with your trades by being micro-managed?
If I liked betting (which I certainly don’t like) I would bet that if you WERE truly SINCERE, the reason why you are not consistently achieving positive results throughout this year could be summed up by saying that you are simply doing too much. Some traders tirelessly search for a “master key” to achieve trading success; they look for all sides except inside, in themselves.
The key to trading is really, nothing. Simply do nothing, most of the time – that’s the key and that’s surely what you’re not doing.
To clarify, I’m talking about doing nothing more than what you do, and I don’t mean doing anything at all. This means, being out of the market longer than being in it and leaving your trades alone and ignoring them more times and longer than you are now observing them and stop “finding out” what you should do next.
So the biggest obstacle to your trading success is the fact that you are doing too much; you are thinking too much and you are doing too many operations and adjusting your trades that are in the market.
A monetary management experiment
Here is your “homework”: In the next trade you take, I want you to analyze your entry and do nothing for a week. Put the entry point, your stop loss, and your target and don’t look at your charts again until 7 full days have passed.
If you do this, and if you do it right (don’t fool yourself) you will possibly be amazed at the result. Either you will achieve your target, the stop will skip at a predetermined point and you will be satisfied with the possible monetary loss, or the trade will remain open.
What these 3 possible scenarios have in common is that the MAXIMUM you can lose is the maximum risk that can be assumed in 7 days. The alternative is that the opposite side is much more profitable and you will be on the positive side of results.
Now ask yourself the following … If you did not pay attention to this plan, in how many operations would you have entered and left in those 7 days? How much stress and negative emotions would you have experienced? I am sure the answer to both questions is: A LOT
Do this experiment and do it well and you will learn a valuable lesson. If you can’t get disciplined for at least 7 days without looking at a trade, you probably don’t have what it takes to be a successful trader, so keep that in mind.