Trading Tip #3 – When You Hear the Word “Hope”
Take if from me – THERE IS NO HOPE IN TRADING. I tell this to every one of my executive coaching clients. If you keep thinking, “I hope it goes up” or “I hope it goes down,” then get out NOW. It’s not working. Do yourself a favor. Get flat and take another look at the market. Hope is on a date with an old friend of mine and trust me, it is not going well.
I know too many traders who are concerned about being flat and missing part of the trades. Don’t be. You can always get back in. No one catches every part of a trade. Being flat is the best and sometimes only way to think clearly, even if just for a moment.
How many of you have been crushed in a down move by hoping the market would go back up or telling yourself the market has to bounce? One of the most essential lessons you’ll learn is that the market doesn’t have to do anything. No one is bigger or smarter than the market, and if you think you are, in time you will be carried out like so many traders before you.
Yes, there will be times that you get out of a trade and the moment you do, the market will then go your way. Don’t waste your time getting upset. I have a lecture named “Screwing Up and How to Deal with It,” in which I explain this is not only for traders, but also for everyone – because the simple and true fact is that everyone screws up.
When I traded on the floor, nearly 60% of my trades were bad trades. I could have sat on my butt and beat myself up but if I did, I would have missed many more good trades.
So, if you get out and the market goes your way, don’t spend more then a second getting fired up. Just take a deep breath and step back in. You’ve learned an important lesson and now you can move on.