This is an awesome post from my friend David Blair and includes great writings from some of my other friends and well known trading educators. Enjoy!
Enhancing our trading performance means we must swallow some nasty-tasting medicine from time to time. But I have found the nastier the medicine the quicker the cure. Here is some medicine for any trader who wishes to improve his or her performance.
The stock market does not care about your opinion; it does not care what you think it should or should not do now or in the days and weeks ahead. The stock market cannot be tamed, placed in a box, or coerced into your way of thinking. The stock market does not care about your technical analysis based on past history nor does it care about your projections for the future. The stock market does not care about this edge or that one. The stock market does not care about the trading services you subscribe to. The stock market does not care about what I think, about what the most popular flavor of the month guru thinks, or what the latest ANALyst on CNBC or FOX thinks. The stock market does not care about your dreams, goals, and aspirations no matter how well grounded and planned. The stock market does not care about your interpretation of the latest economic news or world events. The stock market only cares about the present. Remember this the next time you get into a trade believing, hoping, and praying that it HAS TO WORK.
The market doesn’t care if it hurts you, so if you choose to believe, instead of seeing what is right in front of you, then that which you fear the most will come to be.
I am not alone when I say these things. Check out the following from a few well-known stock market speculators.
“Professional traders make good risk/reward trades and are not concerned with the outcome. Nor are they under the delusion that they really know where a stock or the market is headed. Those who will be pushing paper around at some dead-end job in the near future are new traders who trade seeking to fulfill some narcissist need to be correct. Or smarter than the market. Or your trading neighbor. Or a friend. Get over yourself. You have no idea where the market or stocks are really going in six months. All there is are favorable risk/reward trades to make with the outcome uncertain and controlling your risk paramount.”
“This is one of the paradoxes of trading and investing: you need distinct views to put your money at risk, and you need to persist with these views in order to ride winners. At the same time, you can’t become married to these views; you need to quickly revise and even abandon your outlooks in order to limit losses. We can trade and invest for ego needs, and we can trade and invest to make money: over the long haul, we can’t do both. It takes a strong ego to formulate and act upon one’s ideas; an even stronger one to step back from those ideas in the face of non-confirmation.”
“Most people, let’s face it, must be right. They live to have other people know they’re right. They don’t even want success. They don’t even want to win. They don’t want money. They just want to be right. The winners, on the other hand, just want to win.”
“The stock market reflects confidence, but it’s the confidence of mostly a few wealthy people, or, more likely, the brokers and financial advisers of a few wealthy people. And because they are the main players in the game, they are essentially playing with one another and pulling the rest of us around.”
“The less I cared about whether or not I was wrong, the clearer things became, making it much easier to move in and out of positions, cutting my losses short to make myself mentally available to take the next opportunity.”
“If you enter a trade and the stock doesn’t go the way you predicted, go ahead and take that $50 to $100 loss immediately. Don’t sit their like a twit and try to justify a bad trade as you lose more money. Dump it. Move on. Forget the need to be right.”
“In reality, the market puts us in a contest with ourselves. Until we let go of the false ideas of what makes the market tick and simply respond as the market unfolds, we will continue to be punished.”
The degree by which you think you know, assume you know, or in any way need to know what is going to happen next, is equal to the degree to which you will fail as a trader.
Now, go take your medicine to enhance your performance.
THE CROSSHAIRS TRADER
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