Every time you make a trade, you put money on the line. To the seasoned trader, money is just abstract “capital.” It loses some of its significance. But to a novice trader, money represents house payments, school tuition, and food on the table. When you think of your stake as actual money, there’s a strong need to want to trade it perfectly. You don’t want to make a mistake and lose your valuable assets.

However, a cold, hard fact of trading is that you’ll see more losses than wins, especially when you are first starting out. It’s a game where losses are the rule rather than the exception. Feeling that you need to be perfect, and make a profit on almost every single trade is not only unrealistic, but it can create so much psychological stress that you’ll have difficultly focusing on the trades that actually will produce a big profit. It’s wise to take a more adaptive approach to trade and acknowledge that many times things are not going to go your way.


There’s a strong human need to want complete control over our destiny. We want to believe that if we analyze the markets long enough, we’ll have perfect knowledge and we can trade to perfection. But these assumptions do us more harm than good. Many times core assumptions, such as these, are “maladaptive” in that they restrict our actions, and often cause unwanted stress. And when we are overly stressed, we have a strong desire to avoid dealing with problems, rather than facing them head-on. It is much more useful, though, to examine core assumptions, realize they may be faulty, and change them.

For example, many people work under the assumption that they must be thoroughly competent, adequate, and achieving in everything that they do. 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. We pay a price for this belief, however.

If we believe that we must always be competent, we will expend all our precious psychological energy mulling over the negative consequences of failing, rather than focusing on what we are doing in the here-and-now to implement our current trading plan. Traders who believe they must be thoroughly competent spend all their time worrying about what they did wrong, what may go wrong, and how they will recover should they fail. These thoughts are distracting and obscure the flow of immediate experience, and the ability to read current market activity with unfailing accuracy.

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. Your trading idea may just not pan out, and there’s little you can do about it besides taking proactive steps, such as managing risk and having clearly defined exit strategies to protect your long term financial interests.

Holding yourself up to unrealistic standards is just going to make you feel frustrated, fearful, and unnecessarily uptight. By accepting your limitations, and trying to work around them, you’ll feel more at ease, and ready to capitalize on a high probability setup when you come across it. So don’t be such a perfectionist. Be realist in your goals and expectations, and you’ll realize the profits you’ve been seeking.

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