June 15, 2006 at 12:35 pm | | Comments 0

Expectations Can Be Harmful

Facing the first fairway or the start of a new trading month inevitably brings us to expect something from ourselves. Maybe the weather is nice and we think we can shoot our personal best score today. Maybe trading has been good and we naturally think that this will be our very best month. Imposing rigid expectations on our performance is a bad idea, because there will inevitably be a need to adjust. I certainly believe that having an optimistic attitude and thinking positively have an impact on our results, but rigid expectations are a different topic. Expectations change what ‘par’ is. Expectations change what a ‘good month of trading’ is. Because we never know what each day will bring, why not instead choose to be decisive and smart with the chances we’re given? There is no way of knowing on the first tee box what good or bad breaks you might get later in the round. There’s no way of knowing if the wind will pick up or if your swing will leave you. Trading is the same way. The conditions can change at any time, and a poor break might be just around the corner. Overestimating yourself can leave you forcing trades (shots), while underestimating yourself will leave you well below your true potential. Decide at the beginning of the day how you’ll respond to your trades (or golf shots), and stick with it until you finish. Be confident and decisive, but take it one trade (shot) at a time and in the end you’ll no doubt be pleased with the score.

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Jeff White
President, The Stock Bandit, Inc.

[tags]Golf, Trading, Trading Psychology[/tags]

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