We all start trading because of the amounts of money we stand to make. This leads to our imaginations running wild as to all the ways how our lives will improve because of this. So it’s easy to understand why we mainly focus on money when we start trading.
But that is exactly where the least of our focus should be. Focusing on the money can play heavily on our emotions and can have a big impact on our trading decisions. It can lead to:
- Fear and greed like closing trades early
- Fear of missing out (FOMO) / chasing trades
- Struggling to cut losses / sticking to stops
- Strategy hopping
- Trading too big
- Overtrading
It’s so easy to start daydreaming about what we’re going to do with the money we’re “going to make” at the end of a trading day, week or month. But that’s in the future, that’s unknown.
Also, does it help in any way to keep checking in on trades, watching every pip / tick and profits / losses going up or down outside of the timeframe you’re trading?
Wouldn’t it be better to shift our focus to things we can actually do now that will help improve our trading results in the future?
What is it that we can do? I find the following helpful:
- Have a written trading plan according to a backtested trading strategy for each trade
- Record each and every trade in a trading journal
- Review trades periodically
- Always work on improving patience and discipline
- Practice mindfulness
Probably the most important part is to apply the above consistently, then look for ways where and how you can improve.
Remember, one trade does not define you as a good or a bad trader. So watching your profits / losses while you are in a trade is not going to help you in any way. The same counts for daydreaming about possible profits.
Trading results are not about one winner or loser, but about the overall outcome over many trades. Rather shift your focus away from the money. Concentrate on the other areas of trading where you can apply yourself in a consistent manner, and thereby increasing your chances to improve your overall results.
Thanks so much for reading. Hope you and your loved ones are well and safe.
Thanks and Regards,
Trading SOS SOS