Addicted to Action

It takes wisdom and self-control to resist taking trades that aren’t the best fit for your trading strategy. Especially if you have not traded for a while. Sometimes the temptation to trade for the sake of trading can be so great that you end up taking shortcuts or miss glaring red-flags on a potential trade set up. Being addicted to action clouds your judgement and is detrimental to your long-term success. What can you do to overcome the urge to jump right in?

I was speaking to TWP’s founder and head trader Nick the other day, and he said something that made me think. We were chatting about strategy and Nick said, “I used to start taking action within 24 hours of coming up with a strategy. Now it takes me longer because I spend more time planning and researching first.” I certainly could relate to his statement. Planning and research are important preparatory steps that cannot be overlooked when working towards a goal, however we all wish we could blitz through that phase and get on with it! We are impatient because we can see how we would be better off once we achieve our goals!  

There is no shame in admitting we feel impatient. We live in a fast-paced world where people who are able to get things done in the shortest time possible are rewarded. Common sayings such as “time is money”, “first come, first served”, “you snooze, you lose” further entrench these values in our psyche. When it comes to trading, there is a tendency to mistakenly think that you need to be trading constantly to get ahead. Popular culture portrays trading as an intensive, high-stakes, adversarial zero-sum game i.e. you either win, or someone else does at your expense. This is definitely not how the professionals view trading!  The reality is very, very different.   

Measure twice, cut once.

In reality, trading is a game of education and calculated risk. It takes discipline and patience to scan the markets looking for the best set ups. Professional traders know when to take a break when they cannot find good opportunities. Forcing a trade that is not consistent with your trading strategy does nothing to improve your trading skills (if anything, you will be picking up bad habits).

With the myriad of markets out there, it is highly unlikely you won’t find any trade-able set ups. However, if you find yourself with some free time on your hands, there are many things you can do while you continue stalking. I usually use my downtime to load upgrades for my trading platform, tidy up my trading records or read books related to trading. All of these activities contribute to improving my trading performance and keep me out of the negative cycle of emotions that come with taking losing trades inconsistent with my strategy. I come back to trading refreshed and more equipped to take trades when I see viable set ups.

Ask yourself if you are addicted to action. If you are, don’t take bad trades! Rather, channel that energy into doing something that is productive for your trading. Trading isn’t just about putting orders in the market, it’s about becoming a well-rounded professional who trades their strategy flawlessly.

Happy trading!

Regards,
The TWP Team