It is easy to become obsessed with adding to our trading arsenal with knowledge, books, chart patterns, indicators, moving averages, and gurus, that we forget to analyze what we need to remove from our plan.
One of the largest determining factors as to whether a new trader ends up as a winning trader, is how well they can filter out what doesn’t help them make money. Traders can’t follow every indicator, trade every method, and endlessly add to their trading methodology. As traders we have to make choices. We must know what makes money and what to remove from our trading strategy.
Give up your need to be right: The market is always right, don’t strive to be right in your predictions and opinions. Strive to go with the flow of the market.
Give up control: No matter how long you watch a live stock stream, you have no power over the movements. Save your emotional energy by not trying to cheer on your positions and get wrapped up in every price tick.
Give up blaming other factors for your losses: There is no mysterious ‘They’ causing you to lose money. Your choices cause you to lose money, or your system just had a losing trade. It is a free country and free market.
Give up beating yourself up for losing trades: If you followed your trading plan, then there should be zero regrets involved in a losing trade. If you did not follow your plan and lost, then money was the tuition and you paid to learn the lesson. You must move on to the next trade.
Give up your own opinions: If you took a trade based on your own opinion, you have to give up your opinion and get out if the trade moves to a place that proves you were wrong.
Give up your inability to change your mind: The more you believe a trade just can’t miss, the more dangerous it is. It will cause you to trade too big and stay in too long. You have to always be ready to be wrong.
Give up your past trades: Each trade is a new trade. Do not hold grudges against stocks and think they ‘owe’ you for past losses. Do not fall in love with a stock and hold it as it falls lower and lower.
Give up letting your trading define your self worth: Do not let your trading define you. Diversify your life with friends, family, hobbies, and other interests. It is not healthy to become overly obsessed with the markets.
Give up on losing trades quickly when your stop is hit: Your best trades will be the ones that are profitable from the start. If they immediately go against you, be prepared to be stopped out. You can destroy your trading account when you start the “It will come back, I just have to wait” chant in the midst of a death spiral.
Give up on price targets let your winners run as far as they will go: In the right market conditions trends can go on to unbelievable levels. The big wins during these trends can make your entire career. If you set a predefined profit target, you will not miss the opportunity when it comes. Let a trailing stop take you out.Instead of giving up on the markets, give up on these bad habits and you will be more successful.