Maintaining balance in trading is not an easy task. Successful traders have learned to avoid the extremes and become masters of balance.
Here’s a list of a four dilemmas that traders have to put some thought into… and how they can help us find balance in trading.
Balance of work and play: Yes, as traders we have to put in hard work, this occupation requires a lot of time and energy. Sometimes the work feels endless. However, spending too much time focused on trading may become overwhelming and exhausting. Traders have to make it a habit to unwind from the stress and find other hobbies to act as distractions from trading thoughts. Rejuvenation is key, and performing with a clear, refreshed mind is optimal for trading results. This type of balance in trading is critical to success.
Balance of emotions on good days and on bad days: I struggled with this concept when I first started day trading. We have all gone through this. On good days you feel as if you are the master of the universe. On bad days you feel as if you should never trade again. The balance lies somewhere in between. Violent emotional swings can really take a toll. I have trained myself to maintain a pretty neutral emotional state no matter what kind of day I have. As they say, someone shouldn’t be able to visually tell what kind of day you had in the market.
Balance of having conviction and being flexible: Another extremely important concept. You have to be able to take signals with confidence and without hesitation when they appear. You also have to be able to realize when your signal is invalid and exit the trade accordingly. Having a rigid trading process and a proven system makes it easier to act with both conviction and flexibility. Without this structure, getting attached to trades or investments can become a habit. People don’t like to admit that they are wrong but acceptance of loses is the first step towards success. It is vital to have a defined area where a thesis is invalidated and a clear exit strategy for winning trades/investments.
Balance of learning from wiser traders and the capacity to generate your own conclusions: This is a principal that applies to amateurs and even to professionals. Trading is an ever-lasting journey, traders must constantly evolve and grow. We must be able to listen to the words of wiser traders but not be consumed as if they are absolutes. While it is important to have a trader you are able to learn and draw inspiration from, your trading style must reflect your own personality and thoughts. This will provide another element of balance in trading.
Use these points as possible examples for your own reflection. Through contemplation and self-examination, you will be able to achieve your personal trading equilibrium.
Twitter:Â Â @Johnny_Manzz
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.