Comparing Yourself to Other Traders
You have been trading for only a short while, let us say two years or less. Perhaps your performance isn't spectacular, but it isn't too bad either. You've made a decent return. Are you satisfied? Or have you been reading "Market Wizards" and reading posts on trading websites, and you can't understand why your performance isn't better. "Why are my profits so small compared to everyone else? I must really be a loser," you think. You have just made an understandable, but fundamental mistake. You have compared yourself to other traders, noted that you aren't doing as well, and have concluded that you are inadequate. Although comparing ourselves to others can help motivate us to do better, it can also be very discouraging in that it tends to be more detrimental than beneficial. Avoid making such comparisons.
When you are content to be simply yourself and don't compare or compete,everybody will respect you. Lao Tzu
Why do we compare ourselves to others? There are a variety of possible reasons. Perhaps because our parents or teachers taught us that we should do better than our peers, and gauging the relative performance of others is the best way to do that. It could be that many times, we don't know what "good" performance is and it makes sense to see how others are doing so as to get an accurate picture of what is acceptable. It makes sense to wonder about other trader's performance. Most novice traders quit within a year. Many are curious as to whether it is even possible to achieve profitability. (It is possible, but it is extremely important to understand the conditions under which consistent profitability occurs). If you are "new" you should know that some traders are able to maintain a consistent level of profitability only after years of hard work and skill building. Knowing that trading consistently is feasible will motivate you. If you know that it is possible to make a profit, you'll work hard because you know that there is a certain payoff in the end. Often, however, comparing ourselves to others can do more harm than good.
Each trader has his or her own personal history that he / she brings into trading. People differ in terms of personality, investment capital, life experiences, and the market conditions under which they trade. Any or all of these factors can influence one's trading performance. It makes no sense to beat yourself up because you haven't achieved a level of performance equal to someone else who may have had advantages that you didn't have. The only person you can compare yourself to is you. If you make any comparisons at all, it should be against your own past performance, not someone else's. You should only examine your past performance in relation to similar market conditions. If you made a 30% profit in the up trending market of the past year, for example, you shouldn't berate yourself for performing less well in prior not so trending markets.
Successful people in all fields avoid making comparisons to others. In the end, the only person's opinion that matters is your own. If you believe you are doing well, then that is all that matters. So when you find yourself comparing yourself to others, stop. Look inward. It is just you, the markets, and no one else. The more you can focus on your own standards, the more profitable you'll be.
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