In trading, many of us take comfort in routines because they feel safe13 November, 2016 by Paula Rodriguez in Forex Lifestyle
This post is written by Hao Sun of Trade With Precision. Hao Sun is a trading mentor and active contributor to the Precision Perspectives video newsletter and group mentoring sessions. Hao holds a Bachelor’s degree in economics and a Masters degree in financial engineering. In addition, Hao also holds a level three Bloomberg product certificate in foreign exchange, fixed income and equities.
It is easy going through the motions when we know exactly what the outcome is going to be. However, one of the quickest ways to grow and improve is to be open to embracing change. New experiences broaden perspectives by challenging who we think we are and what we know of the world. But not everyone likes change. Departing from routine can be terrifying, especially for those who are overly attached to a certain way of doing things. What then to do when these routines no longer serve us? Should we stick with them when they are more hindrance than help? To improve your trading, the answer is to let go. Here are some ways to do that.
Realise there is more than one way.
One of the reasons traders are reluctant to embrace change is because they are convinced there is no other way to achieve their trading goals. Over time, there is significant buy-in into a process and letting go, especially where there have been no results to date, is very difficult because you can be convinced the desired results are “just around the corner”. Getting too hung up on something can create tunnel vision. Important signals or warnings are missed along with the opportunity to refine your approach and get to your desired results faster. There is rarely just one way to achieve your trading goals and it pays to realise this early on!In trading, many of us take comfort in routines because they feel safe. Click To Tweet
Look for efficiency.
Another reason why embracing change is difficult is the failure to realise that more efficient options have become available. When you first created your trading routine, it may well be that this routine was the best one available at the time. However technology does not stand still and there are new and innovative solutions coming onto the market every single day. What was clearly the best option in the past may not work as well now. As the decision maker, efficiency should be one of the key things you look at when evaluating whether to continue doing things a certain way or to let go. Weighing this against costs (and other factors) will give you a clearer picture and assist you in improving the way you trade.
Let go of pride.
Sometimes traders dig in their heels and refuse to change because of pride. They may have all the facts and figures, and be convinced that changing is the better option, yet there is no way for them to make the decision to change without losing face. Admittedly it is difficult to let go of pride in a corporate setting in full-view of your colleagues, superiors and subordinates; but would you believe it is also equally difficult to let go of pride when it comes to situations where you are accountable to yourself only? In trading, pride affects us the same way whether we are trading on our own or whether we belong to a trading desk with a corporate target. It concerns our evaluation of self. When it comes to letting go of routines that are no longer working for us, we need to separate out pride from the equation.
Doubt is normal.
An emotion closely linked to pride is doubt, and in extreme cases doubt can turn into fear. Doubt has to do with our perceptions of risk. If the inherent risk in a particular undertaking is high then it is likely we will experience a corresponding high level of doubt as we grapple with uncertain outcomes. People (traders included) tend to prefer the certain over the uncertain as we would all like to be assured of certain reward and gains when we put in the work. However, nothing in life is certain. As traders, the very nature of the market we deal in is uncertain. Doubt is a normal part of trading, one of the best things you can for yourself do is to accept this, limit your downside risk and trade anyway!
Failure is inevitable, be resilient and try again.
It is universal truth that even the best laid plans and thoughtfully considered options can go awry. How we carry ourselves when things go wrong can determine whether we come out on top or experience stress and dejection. The fear of failure is one of the reasons why people cannot let go. They worry that they will be giving up too soon, or that their peers will think they could not go the distance and label them failures. It is important to realise two things: 1. Failure is subjective, not objective. This means that what you may consider a failure could well be seen by another person as a learning opportunity. Also 2. Failure is not final nor fatal. Even if you feel you have failed, you can still take action to correct the situation and move past it. The key is resilience, the determination to try again, and this separates successful traders from the unsuccessful.
Happy trading!Failure is inevitable, be resilient and try again. Click To Tweet