Market Overview

Is Your Quest to Make Money Actually Hurting Your Performance


You want to make money, right? After all that’s why you’re here. You sit down in front of your computer every day to do your research, plan your trades and ultimately execute.

But, in a sick and twisted way, it turns out your desire and quest to make money might be what’s preventing you with doing so.

The language you use, “I made money” and “I lost money” suggests you’re in control and are totally responsible for the outcome, good and bad.

It’s certainly admirable for you take responsibility for the end result, but is it possible this is adding unnecessary stress and pressure to an activity which already comes with a big weight?

Game of Failure

For starters, trading is a game of failure. Even great traders will lose on half their trades. This puts you in a position of constantly dealing with failure, which adds unnecessary stress because failure is not something we often deal with outside the market (100 structural engineers will correctly design the column of a building every time).

If you make money, you’ll pat yourself on the back and feel smart and accomplished. “I did it” you’ll tell yourself. “Nice job.” If you lose, you’ll beat yourself up. “You idiot. You just lost half your rent payment.” If you like constantly berating yourself mentally, go for it, but it’s not a way to trade, it’s not a way to live.

You’re Not Entirely in Control

Secondly, making money is not entirely within your control. Like a baseball player who can have a good, quality at-bat and hit the ball hard right at a defensive player and get out, a trader can do everything right and still lose.

This sounds like a losing proposition. Making money is not entirely within your control (any trade, no matter how good, can quickly become a loser for reasons completely out of your control), and feeling like a failure half the time isn’t good for your psyche given the confidence needed the press the button and play this game.

An Alternative Way to Think

Instead of putting the onus on yourself to make money, your objective should be completely within your control, more quantifiable and much less stressful.

Your objective should be to execute good set ups under favorable conditions. Period. And then you judge yourself based on whether you did this, not on whether you made money.

I trade good stocks within good groups in the direction of the trend. And I judge my performance based on whether I executed property, manage the trades wisely and exited according to my plan. Whether I make money or not doesn’t matter. If I have what I consider a “good, quality at-bat” (to use baseball terminology), I did my job, and I know that in the long run, profits will take care of themselves.  

Tomorrow morning when the market opens, I will be under no stress to figure out what is going to happen. I will not be under pressure to make money because that’s not my job.

My job will be execute properly, make good decisions, manage traders correctly – all things that are entirely within my control, all things that are quantifiable based on prior experience and my plan.

At the end of the day, I might have two winning trades or two losing trades, but it won’t matter because my report card doesn’t have a P&L column. It only has a “good quality at-bat” column.

Ahhhh. Exhale. Relax. It feels good. I’m being judged based on criteria entirely within my control, and I don’t have to live day to day with the stress of trying to figure out what will happen. This sets the stage for future success. Not the alternative, which is to get graded on things not entirely within my control.

Every day, I wake up and remind myself it’s not my job to make money, it’s my job to methodically execute the set ups according to my plan. Period. 

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.


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