While starting a career in trading the money should be the last outcome in our focus. Focusing on the outcome when carrying out your trading strategy can lead to big losses. It really makes achieving the desired goal considerably more difficult. We should focus on the trading strategy first.
Why To Focus on Trading Rather Than money?
Following the guidelines laid out by our trading method, trade after trade is all it takes to be a successful trader.
- We know exactly when to enter, the size of the position, and when to leave when we have a trading plan. Focusing just on the money will make it extremely tough to stick to your trading strategy.
- More concerntration on money will force you to enter trades even if there’s no real signal prompting you to do so.
- When you are too greedy to money, you’ll probably wish to stay in a trade for too long, even if a sell signal appears.
- If you keep track of how much money you’ve made on a trade, you’ll probably exit it too soon for fear of losing your paper profit.
- If you keep track of how much money you’re losing on a trade, you can decide not to cut your losses and instead stick with the losing trade, changing or even deleting your stop loss.
- When new traders lose a certain amount of money on a trade, they more likely to engage in the dreaded “revenge trade” in an attempt to recover your losses. It normally doesn’t work.
- Focusing on money, breeds fear and greed.
- Furthermore, concentrating on money involves concentrating on something over which we have no control.
So, where should we concentrate our efforts?
We now understand that focusing solely on money can be damaging to our trading. So, where should we concentrate our efforts?
The only variable over which we have any control is ourselves. Only we have the power to make us stick to our plan to the letter, resulting in long-term earnings and allowing us to eventually achieve our financial goals. This is why the most successful traders frequently advise us to concentrate solely on being the best trader we can be.
“My biggest achievement occurred when I eventually resolved to put money aside and focus on becoming the best trader I could be.” Then I started earning.”
So, basically, we should concentrate entirely on carrying out our strategy flawlessly. Perfect execution of our trading plan includes buying just when our system gives a buy signal, buying the precise quantity stated by our strategy, and exiting only when our plan tells us to, without hesitation. We should just forget about the money when trading.
The Change
From that moment forward, there should be a complete shift in perception of what constitutes a good trade and what constitutes a terrible trade.
A profitable trade no longer qualifies as a good trade.
Regardless of whether or not we gained money, a good trade now becomes one that was completed properly according to our trading plan. A terrible trade is one in which we failed to follow our trading plan, regardless of whether we profited or lost money.
We know that any money we made on a “poor trade” would eventually be taken back by the market.
When we execute a trade flawlessly, regardless of the outcome, we should give ourselves a pat on the back. And, regardless of the outcome, we should penalize ourselves when we do not stick to our plan.
Always try to take control of the situation by adopting this viewpoint. Don’t rely on something over which we have no control in the market. We are in command now that the market has lost control of us.
So, if you don’t focus on the money, the money will find you.
Regards, The Prolific Trader