Attitude in a trade... Was answering some messages from my post last night about the importance of attitude and was asked what attitude I have going into a trade. Got to thinking about my attitude entering a trade versus some friends I know and their attitude.
I enter a trade thinking about how much money I'm going to make, not what I might lose. Call it being over confident if you want. I also call it conviction. When I enter a position, I don't fret one bit. I do it, and go on. I don't do it on a whim either. I have a plan, as you all have heard me state over and over, and I stick with it, adjusting it as needed of course. That helps me know when to execute.
On the other hand, I have friends that will fret over entering a trade to the point it overwhelms them with worry. It makes them execute poorly when they do decide to do it. They think how much they stand to lose. That is their focus. They don't focus on why they are investing. It's sort of like they play not to lose versus playing to win. You've probably heard that in sports.
Years ago, when I made that transition in my investing away from focusing and worrying on losing, and started thinking more positively about what I stood to gain, which is why I was doing it after all, then I started making smarter investing decisions. I'm not saying you should not be concerned about losing capital. Remember, preserving capital is rule number 1. However, I believe it is imperative an investor have a positive attitude with confidence and conviction in their investment decisions. If not, like I've seen happen, they make poor decisions. The market is very unforgiving for poor decisions. This isn't pee-wee league stuff as you know.
Just my additional thoughts FWIW.
Good luck all.
RR |
