Wednesday, April 5, 2017

Striving for Perfection

Strive for continuous improvement, 
instead of perfection. 
Kim Collins

Lexus advertises the "The Relentless Pursuit of Perfection" and it seems an amiable goal; perfection. Unfortunately we are human and humans are not perfect. Perfection is a pursuit, but we can never really attain perfection. What we really do is strive to be better and better at who we are and what we do. Perfection however is out of the question, especially in our line of work. As traders the pursuit of perfection can be very costly if carried too far.

Some traders are so obsessed with looking for the ultimate opportunities that they spend most of their time looking, rather than actually trading. They don't want to miss that once-in-a-lifetime trade. There's nothing wrong with searching for a good setup, but constantly looking for the ultimate setup is time consuming. Why do some traders spend too much time searching for the ultimate trade? It may be a fear of leaving money behind. They don't want to miss out on a rare opportunity.

We want to believe that if we analyze the markets hard enough and long enough, we'll find the perfect setups and take home huge profits. This however can do us more harm than good. Spending so much time looking for the perfect setups, that really don't exist, will have us fail to trade the "available high probability setups". If you constantly search for the "perfect setup" it will restrict your actions and most often will cause unwanted and unneeded stress. Instead of moving forward; you stagnate.

Many people work under the assumption that they must be thoroughly competent, adequate, and
achieving in everything that they do. Psychologist, Dr. Albert Ellis, claims that holding such a belief produces fear and anxiety, which for traders often produces hesitation and self-doubt. As we grow up, we often face adverse consequences for not being proficient. We begin to believe that we must be thoroughly competent, adequate, and achieving in everything that we do. It is normal therefore that we come to believe; if we could just be perfect as a trader, we will make the most profits. Ironically, what happens is just the opposite

A more adaptive approach is to realize that it's impossible as a trader to be thoroughly competent, adequate, and achieving all the time. Certainly, you should develop an extremely detailed trading plan and try to account for all adverse events that may go against your plan, but there are limits to what you can do. You don't need to be perfect. You don't need to trade the ultimate setups. You just need to make profits, even if it is just from trading mediocre setups. Searching for perfection can lead to stagnation if you aren't careful.

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