To those who want to take home big profits, trading isn’t a hobby. It’s a serious business. If you want to make profits consistently, you must have respect for your trade. You must treat each trade as a business transaction. It should be well planned and deliberate. You should follow a business plan, which outlines a strong rationale for making the trade. You should have a realistic profit objective, and execute the trade with a strong resolution to make a profit.
Many novice traders don’t approach trading seriously enough, however. They don’t carefully delineate a trading plan, and when they do, they don’t follow it. In the “The Disciplined Trader,” Mark Douglas observes, “The typical trader will do almost anything to avoid creating definition and rules because he does not want to take responsibility for the results of his trading.” According to Mark Douglas, traders have a strong motive to avoid responsibility. And one of the most effective ways to avoid responsibility is to pretend that trading is nothing more than a leisure activity.
By taking treading lightly, you can always say, “It wasn’t important anyway; there’s no reason to worry about it,” whenever things don’t go your way. On the one hand, approaching trading as if it were just a hobby will allow you to minimize the psychological importance of a setback or a loss, but on the other hand, unless you take trading seriously, you’ll never give trading your best shot, and you’ll never make the huge profits you’ve been dreaming of. You’ll always have a way out, and it will be too easy to make excuses for things going wrong. Making excuses may make you feel good in the short term, but eventually, you’ll start to realize that you are taking the easy way out. And the more excuses you make, the less decisive you will feel.
If you want to make profits, you must feel you are in control of your actions. Taking a decisive approach to trading requires that you take responsibility for all your actions. That doesn’t mean beating yourself up for making a mistake, but it does mean trying to gain as much control of your trading as possible. You can’t control the markets, and you can’t control what other market participants will do, but there’s a great deal that you can control. You can manage your risk. You can carefully measure your trading performance, and discover what works and what does not. You can decide which setups to take and which setups to avoid, and you can decide to trade only under market conditions that are conducive to your methods and style. The astute trader distinguishes what he or she can control and what he or she cannot control.
Winning traders take responsibility for their actions. When you identify what you can control, and take responsibility for it, you feel empowered. You feel in control, and you are ready to act decisively. And when you feel in control, you’ll enter a winning state of mind. You’ll feel relaxed and alert, and ready to see opportunities and profit from them.