This one goes out to those of us who try as much as possible not to take responsibility when things go wrong, but are up celebrating when things go as planned. When it comes to money, one needs to make decisions that, whichever outcome, they will take responsibility. Say for example one buys into the stock market. There are no rules written on stone. The few that are there are often thrown out through the window. Trading is a game, and one needs to get into it with a winning attitude, and if the rules we employ are not working, we need to device those that are working. Then we need to have a reason for every step we take in trading, so that we can learn from it whether it succeeds or fails.
I came across a conversation that indirectly describes the trader you shouldn’t be- a trader who is confused and doesn’t know what exactly he is doing in the market, or why exactly he is trading the way he is. Have a read, and make sure you are not this kind of trader.
“The market is rigged”
“What do you mean, give me an example?”
“Well I was trying to be long at X price and it did not trade my price.”
“Ok, so the market cared about your 1 lot order?”
“Yes.”
“So in a multiple billion dollar market your $200 matter?”
“(Silence)”
“Ok, so if you think it is rigged why do you put your money at risk?”
“I am not sure.”
“You should probably not trade. One because if you are playing a game you do not believe you can win you will never be able to take full responsibility for the outcomes you produce. Taking responsibility allows you to take the steps necessary to be successful. Trading is not easy but you are making it harder.”
“But there are times when I don’t get filled or I get stopped out on the highs.”
“This is part of trading. More over you are always going to remember the ones that did not work out. What about the time you played it perfectly, was the market rigged at that time? Why are you held by a single price anyways?”
“That is what my strategy tells me to do.”
”So you can’t adjust your strategy depending on market conditions. You take a trade the same no matter what else is happening?
“Yes.”
“Why?”
“Because that is why the strategy says to do.”
“How is that working for you?”
“Not very well.”
“So you are doing the same thing and not getting where you want to be and you keep doing it?”
“Doesn’t make sense does it?”
“It does not make sense but it is not uncommon. You have to take what is not working and either make it work for you or get rid of it. You have to stop looking at the market is rigged. It might not be fair but it is possible to make money. The market promises a playing field not the rules. If you are going to risk your money you better be able to improve and adapt.”
“You are right.”
“Secondly, if you are held to a single price and the same position size you are too restricted. You have created a limitation and it is hard to fit rigidness into this market. You are trying to put a circle in a square hole. It can work but it is much harder over time.”
Original Article- Trader Habits