Why a Small Win is Better than a Kick up the Backside

kickIt’s a new trading day. Market is in session and eager traders of forex, stocks, bonds and commodities are at their trading desks, eyes glued to the screens, fingers tapping the keyboards, ears on the news channel, mouths chattering down the phone, toes twitching in anticipation and backs to the world. Such incredible multi-tasking people these traders are – and they haven’t even left their seats. There is of course a common purpose as to why this group of special people are acting this way. They all have an expectation of making profits! No other outcome in their minds is on the table as far as their trading expectations go.

So let’s drill down a little to the role of a single day trader tuned into the markets from home. Stick a pin into the day traders hand, not too deep, just to see if he or she bleeds so that we can establish whether we are dealing with a human trader or a robot. A painful scream identifies the trader as human, therefore we know two things for sure.

  1. The human trader will suffer fatigue and lack of concentration the longer the trading session endures.
  2. The human trader has one reason for sitting at the trading desk and that is to make money.

Fast forward to the end of the trading session and we can see that the trader’s end of the day trading account capital balance is a different amount from the opening capital balance in his/her trading account we know that:

One of four outcomes has occurred to the trader (no crystal ball required) :

  1. The trader made a small win.
  2. The trader made a small loss.
  3. The trader made a big win.
  4. The trader made a big loss.

If the trader hit outcome 4 – A Big Loss – then no positive financial outcome occurred from the trading day. The result could have wiped out all or more of the trading capital, and the trader has no other financial option open to themselves other than to replenish their depleted funds and go into the next day with the expectation of hitting outcome 3 – A Big Win and even then that would only get back to around breakeven at best. This is trading suicide.

As the trading day began, none of the traders had an expectation of a big loss. All of the traders had an expectation of winning. Most secretly hoped for big wins but few achieved that, and not consistently.

win-or-loseSo let’s focus on outcome 2 A Small Loss. The result was not positive, but it was not financially devastating either. The trader suffered a loss, but not defeat. Sufficient trading capital still remains to trade another day. The trader has suffered no broken bones, crippling injuries or loss of confidence other than pride. You may call it a kick up the backside, but that is part of the game and part of the mindset of trading.

So, why not change your expectations for the next time you plan to take a trade? Bring your trading expectations up to a realistic level of  a Small Win and you will notice your capital and your confidence grow larger.

You don’t have to hit big winners to  get your trading balance to grow. No small win can ever be defeat. No small win can deplete your trading balance. And so you must concede that your next small win (which didn’t meet your expectations of a large win)  was better than a kick up the backside!

 

 

 

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

Facebook
Facebook
Google+
Google+
http://pipasylum.com/small-win-better-kick-backside/
Email
RSS

Leave a Reply

Your email address will not be published. Required fields are marked *