Over the three-day weekend, Jim received a call from his friend Andy. “Hi Jimmy, did you take a look at Google last week?” Jim replied, “It was a rough week for my short positions. I didn’t anticipate the buying surge and it hurt me a little. No, I didn’t look at Google closely. I was caught up trading my own positions.” Excitedly, Andy says, “Well, on Monday I bought at 345 and sold at 370 on Friday. I made almost $4000 on that one trade alone.” Have you ever received a call from a friend in the trading business bragging about a great trade that he or she made? If you aren’t doing as well, and can also bask in the glory of success, it’s hard to avoid feeling a little resentful, envious, and somewhat disappointed in yourself. You may think, “It’s just a matter of being at the right place at the right time, and unfortunately, I was at the wrong place at the wrong time.”
Trading can indeed be a matter of luck. When events aren’t going your way, you can get thrown off, and become overly consumed with how poorly you are doing, that you can’t think clearly. Trading the markets skillfully requires a clear, focused mindset, however. You can’t get thrown off. But when your money is on the line, it’s hard to think clearly. There’s a powerful human need to trade with perfection. You want to be at the right place at the right time and make a huge win.
One of the worst fears of many traders is missing out on a significant trading opportunity. It’s natural to want to search for a once in a lifetime trade and make a year’s worth of profits in a day. But constantly searching for such trades can be distracting. You spend the majority of your time searching for the ultimate trade setup, and when you do that, you start placing demands on yourself that you just can’t reach. You think illogically. You lose focus, and you can no longer think clearly and astutely.
Ironically, if you become overly consumed with being at the right place at the right time, you will probably be at the wrong place at the wrong time. You won’t think freely and creatively, and you will miss the potentially profitable opportunities right in front of you. From a god’s eye view, they may not be the absolute best opportunities out there, but they may be good enough to profit from. If you devote all your effort to trading them, you will make profits. Remind yourself that you don’t have to be perfect.
You don’t have to trade the best opportunities at all times. You just need to trade the best way your know-how with the resources and opportunities you have available to you. You need to trade freely, rather than stagnating under the pressure to trade to perfection. Trading can be a matter of probabilities. Sometimes you’ll be at the right place at the right time; at other times you won’t.
That’s all right. If you are consumed with perfection and finding the ultimate trading opportunities, though, you will tend to put off making trades. And when you don’t trade, you can’t make profits. So don’t limit yourself. There are many opportunities out there for you to take advantage of. The more trades you make, the more likely you will increase the odds of success, and take-home profits.