​Making Choices

When confronted with a choice, how do you decide?

Are the choices you make in life in general different from the choices you make in trading? It has been my experience that decisions in life that involve a perception of a possible loss, being wrong, or making a mistake, will very often take the same approach as the decisions you make in trading.

Stuck

Gary was a "want to be" trader for over twenty years. He was obsessed about making trading his profession. It was lucky for him that his other business did well enough to support his life. It was very clear to Gary that he had an issue of being afraid to lose and not wanting to be wrong about his choices, but the same thing that kept him from following his rules also kept him from making a decision about overcoming these issues.

A trader friend, who earned a great deal of money as a result of listening to Gary's advice, suggested that he take one on one trading with me. My evaluation of his questionnaire, along with our initial conversation, highlighted everything that Gary already knew and other sabotage issues that he was not aware of. I knew that Gary had what it takes to be a great trader, but was he going to excuse his way out of making the right choice, or continue on the same path of making excuses?

I have listened to many traders whom I believe could be exceptional traders, but because they did not have the ability to pull the trigger on a trade, they could not pull the trigger on doing what it took to overcome those issues.

Here are some of the excuses traders give themselves and me (and what I am thinking when they do):

1. I don't have the time and or money. (Then you shouldn't be in trading.)

2. I will do it but not now, but someday. (I don't know of a day of the week that is called 'someday'.)

3. My wife doesn't want me to spend the money. (It's your responsibility to gain her support.)

4. I need to schedule it around my vacation. (This is a business decision, not a vacation decision.)

5. After I become a profitable trader, I'll then come to you to become a Master Trader. (If you have the ability to do it yourself, then why haven't you done it already?)

6. I have many books on trading, I'll read them first. (You've not read them till now, what makes you think that you have the motivation to carry through with this plan?)

7. It's better for my taxes that I do it next year. (And what'll you say next year?)

8. You're my last hope, if it doesn't work with you, then I'll have to give up trading. (You may already have done so.)

Weighing Your Choices

When you weigh your choice to get help versus to not get help, you should see the obvious decision:

1. Go back to your last year of trading and analyze what you believe you would have earned if you had followed your rules.

2. Ask yourself how many hours you put into trading.

3. How much is your hourly rate of return?

4. How much would have been your hourly rate of return if you had followed your rules?

5. What has not taking care of your psychological issues cost you in time and money?

6. What excuses do you have that have more value then earning what you are worth in trading?

Conclusion

The choices that you make in the process of becoming a professional trader will make the difference in how successful you will become. It is a good feeling when a trader can look back and know that he/she has made the best choices at every step of the process.

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