Module 12 Innerworth — Mind over markets

Chapter 341

Fear of Leaving Money on the Table

During the trading day, there are often opportunities to make huge, profitable trades. The trouble is finding them! Some traders are so obsessed with looking for the ultimate opportunities that they spend most of their time looking for the most profitable opportunity, rather than actually trading. They don’t want to miss a potential once-in-a-lifetime trade. There’s nothing wrong with searching for a good setup, but constantly looking for the ultimate setup can be time-consuming. Why do some traders spend too much time searching for the ultimate trade? For many, it is a fear of leaving money on the table. They don’t want to miss out on a rare opportunity.

 

The fear of leaving money on the table is natural. We desire profits, and we have a strong human need to strive for perfection. We want to believe that if we analyze the markets long enough, we’ll find the perfect setups and take home huge profits. But these assumptions usually do us more harm than good. We may spend all our time looking for perfect setups that don’t exist, and ironically, failing to trade available high probability setups. Many times striving for perfection can be “maladaptive” in that it restricts our actions, and often causes unwanted stress. And when we are overly stressed, we may stagnate rather than move forward. It is much more useful to aim for more modest goals. But many people work under the assumption that they must be thoroughly competent, adequate, and achieving in everything that they do.

Renowned psychologist, Dr Albert Ellis, claims that holding such a belief produces fear and anxiety, which for traders often produces hesitation and self-doubt. The development of this belief is understandable. As we grow up, whether it is at home, school or work, we often face adverse consequences for not being scrupulously proficient, and we begin to believe that we must be thoroughly competent, adequate, and achieving in everything that we do. And we believe that if we could just be perfect as a trader, we will make the most profits. Ironically, however, the opposite happens. If we believe that we must always be competent, we will expend all our precious psychological energy looking for perfection, rather than taking action, specific actions.

A more adaptive approach is to realize that it’s impossible as a trader to be thoroughly competent, adequate, and achieving all the time. Certainly, you should develop an extremely detailed trading plan and try to account for all adverse events that may go against your plan, but there are limits to what you can do. You don’t need to be perfect. You don’t need to trade the ultimate setups. You just need to make profits, even if it is just from trading mediocre setups. Searching for perfection can lead to stagnation if you aren’t careful. Don’t be afraid of leaving money on the table. Relax, trade instead of search. You’ll find you will take home more profits in the long run.

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