How I Maintain Control Over My Trading – Check it

We can do our best and still sometimes we do not get the result we wanted. This is no different in trading.

We can make preparations, make analyses and the market still shows us that we have misjudged it. Today I am convinced that a new expectation management is immensely important to achieve better trading results.

The problem is so often that we want to anticipate or anticipate something in advance that we cannot influence at all. This applies universally to other areas of life as well.

If I want to give my girlfriend a nice evening, tidy up the apartment, put fresh flowers on the table and cook her favourite meal, then these are good conditions for her to be happy and later fall around my neck as the best friend in the world. But if, just before leaving the office, she had an unpleasant customer on the phone, the boss let off some more frustration or she got stuck in traffic, then it is possible that the beautiful evening – despite all the preparation – will fall through.

And yet, how often do we ask ourselves: What have I done wrong?

Nothing at all.

Human behaviour cannot be predicted, even with the best analyses or preparations.

Especially on the stock exchange, where an unmanageable number of market participants are active at the same time, the whole game is even more potent! Some people consider the Daimler share worth buying at EUR 64.00, while others have to sell it at the same price, i.e. have selling motives, in order for the deal to go through. Both act at the same price for completely different reasons, one perhaps according to chart technique, the other has just read a newspaper article. The attempt to dissolve this, to anticipate this, is a Gordian knot. And yet we oracle and brood so often.

If we don’t separate our preparation from the result when trading, it creates real stress.

The stock exchange then gets on our nerves and we look for the reasons in our own company, in the trading system, in the product and often don’t see that the “mistake” wasn’t ours.

The best preparation, the best trading signal can and will fail at some point.

Even though I got up at five o’clock in the morning, read all the stock market news and chart analyses, and formed an opinion, I have to reckon with the fact that the day will develop completely differently than I had planned. Because there could be variables involved that I don’t even suspect.

I have realized for myself that the famous “Circle of Competence” is taking effect here again.

Some things I can influence, some things I cannot influence.

However, it makes no sense to want to change things that I cannot influence with the best will in the world. It is much smarter if I only concentrate on what I can control. For example, where my stop is, what plan I want to trade today, or how much risk I take.

As soon as I let go of everything that I cannot influence, my mind relaxes and I become calmer, react less emotionally and come closer to the famous “trading wisdom”.

It even has a second advantage. By recognizing that I am wasting a lot of energy on antiping developments that I can never correctly anticipate, I realize that a lot of energy is spent on this “guessing” and “weighing up”.

Once I have decided for myself that I don’t know how the day will end, but I can put all my energy into the “here and now” and maximize my preparation, I can put all my energy into what I can really influence.

Sometimes we become aware that we didn’t work so accurately in preparation, didn’t give our best. For example, we forgot to fill out our trading journal, we only casually analyzed the market and did not give it our full attention, or we were not as disciplined as we had planned.

As soon as we have made our trading decision, we often sit in front of the screen and try to influence the outcome of the trade with our thoughts. It’s crazy, isn’t it? Instead, we could refocus our efforts on what we can influence, e.g. thinking about what to make for our girlfriend for dinner.

Trading is one of the most dangerous jobs in the world (that’s why you can earn so much money doing it – risk/return law), but we have to be fully concentrated every day to keep control at all times, just like a helmsman on the high seas. As traders we simply cannot afford to waste our thoughts and capacities on things we cannot influence.

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