Options Trading: Navigating the Roughest Terrain
Posted on 27. Jul, 2009 by Global in Options Trading
Anthony mentioned earlier the importance of having a good navigator to help guide you when dealing with difficult terrain. We really can liken this to your performance when trading the market.
Does the type of trader you really are differ from the type of trader you really want to be?
If the answer is yes, then you may need to enlist the help of a reliable navigator yourself.
Have you ever wondered why that sure-bet trading strategy for making consistent profits you were shown, just doesn’t seem to work that well for you at times? You know…. you’ve been following a trading methodology and getting really great results through the ‘oh this is so exciting’ phase and then suddenly you lose the Midas touch and don’t quite know what went wrong?
So you do what most traders do in the early days. You go back through your trading plan and you try to devise another one or you maybe add another indicator to it, or take one out to make it better. You then put this new plan into action and hey you might even have a few wins. Now you’re on the right track….that is until you start to deviate from this one too!
You know something? If your methodology works more than 50% of the time, then you should probably stick with it because chances are the real changes and adjustments you need to make are mental and emotional ones rather than methodology changes.
90% of your success as a trader will be determined by your personality and your ability to handle your emotions and remain disciplined. Don’t take that as a ‘bung any old combination of indicators and tools together’ and expect success, because you will need to follow a proven system for trade selection. I’m simply wanting to point out that we all have different strengths and weaknesses to even those closest to us, so the sooner we realise our own strengths and weaknesses and adapt them to our trading plan, the more profitable we will be.
One of the most dangerous weaknesses in trading (any instrument) would be patience because often we give into the temptation to trade more frequently than what we should be.
What I mean by that is the mistake of trading for the sake of trading when it may not necessarily compliment our comfort level for risk, and there are many reasons why we can easily fall into that trap.…
A) For some it may be the adrenalin rush they get from trading, the thrill of just being a part of the market chaos, even when positions don’t pan out the way they imagined.
B) For others it may be the necessity of generating an income if trading is their only income source. A feeling of having to trade even when there isn’t really anything to trade.
C) Then there are those who trade out of desperation, racing the clock to recoup what they’ve already lost.
When you let your emotions dominate your trading decisions, you will find many more 
reasons to enter a position than those to make you stay out. If you find yourself doing this, it may pay you to have an emotional checklist to follow when opening a position much like the checklist you would follow for the initial trade selection.
For Example:
1) Am I ignoring any of my money management rules?
2) Am I ignoring any criteria of my trading system just to get into this trade?
3) Am I trying to recover a past loss?
4) Am I feeling anxious and impatient?
5) Am I feeling uncomfortable about my decision?
If you answer yes to any of these questions then you need to seriously re-think your decision before you enter your order and consider enlisting the services of a reliable coach who can help you recognise your strengths and weaknesses and give you navigate you through even the roughest of trading terrain and ultimately guide you on the path to success.
If you would like more information about our coaching services, email us at info@globaltradingedge.com
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