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Nobody's Perfect In Trading
During his or her career, every trader has executed a trade under extreme pressure. Face it - at times, it's the nature of the job. Working under these circumstances can have dire consequences; you run the risk of losing your focus, questioning your plan, or hesitating at a critical moment. And when it happens, it can cause you to sink even deeper into a bad mood. Not surprisingly, your next trade doesn't go much better than the first. When you are in a "bad mood" - however you define it - your decisiveness and focus are impacted. The better your mood, the more earnestly you'll trade.
In fact, a bad mood - and the fear that mistakes are detrimental - can lead to a syndrome called "extreme perfectionism," as was proven in a 2005 experiment by psychologists Benie MacDonald and Graham Davey. A group of college students induced into bad and good moods and then asked to identify 100 spelling and punctuation errors in a document. Some were told that if they made a mistake, they would be punished, while other groups were told that mistakes had no consequences whatsoever.
Not surprisingly, the participants who were in a bad mood and were told they would be punished for mistakes spent an extraordinary amount of time obsessively checking and rechecking their work. Why? Well, according to MacDonald and Davey, they allowed their mood to dictate their behavior. In other words, they spent too much time on unnecessary work, and never felt satisfied.
Certainly, this experiment points out how a bad mood can lead to self-doubt, loss of confidence and unrealistic expectations. Extreme perfectionism can cause your trading plan to fall flat on its face. You'll question its viability and whether you are accurately analyzing current market conditions.
S When you find yourself in a bad mood, don't ignore it. It will cause you to think and act irrationally, and that can be a disaster for a trader. Either avoid trading while in a bad mood or don't let your mood guide your actions. If you are aware of the psychological mechanisms that influence your decision-making, you can overcome them. Don't underestimate the power of your mood!
There are plenty of traders out there who are failing at the moment. Many of those traders will end up quitting on themselves when their accounts start to get too low or they feel they have invested too much time. Alternatively, there are plenty of traders out there who just want to give it another go, who believe that if they keep applying the skills, they can eventually master them.
The biggest difference between someone who keeps on going and learning and trying and those who give in and give up is faith. Those with a great deal of self believe and the faith that if just one other person in the world can do it, so can they are the ones who end up making a good living trading. Those who decided it couldn't be done are missing out on the fact that there are enough people doing it to prove that is not the case.
About the Author If you would like to immensely improve your trading and investing results, check out www.secrets2trading.com AND for a Limited Time, you will also receive a FREE copy of a limited number of the amazing book "Trading In The Zone" which is jam-packed with daily trading ideas and psychological preparations to instantly improve your trading and investing performance.
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