Mark Twain once said that

“the inability to forget is infinitely more devastating than the inability to remember.”

Traders, after they have traded for a while, have a vast store of memories (boy do I have some!) that can affect the way they trade. They’ve had trades that worked perfectly as planned, even ones that provided twice as much profit as originally projected.  But they’ve also had perfect set-ups go terribly wrong.

The question then becomes, which trade do you remember when you are about to enter the next one? Your worst trade? Your best one?  Your last one?

We have the free will to choose what we think about in all areas of our lives and this same free will is also available to the trader.  What you do with it can make a difference in your long term success.  At its core, free will can develop the kind of memory that promotes sound trading: a short term memory for failure and a long-term memory for success.  In CROSSHAIRS TRADING language, we always have as our focus the war (long-term) regardless of the outcomes of the individual battles (short-term). 

How do you bend your will to focus on the war?  Let’s look at two.

• 1) Allow yourself to enjoy the victories. Traders have a tendency to get very upset about busted trades and in so doing burn memories strongly in their minds. The same traders get little satisfaction from the good trades, thus not burning as strong a memory. If you have done your homework, followed your rules, entered and exited the trade as planned, then give yourself credit and enjoy it. You deserve it.

• 2) Take control of your beliefs. Successful traders are realistic about trading when accepting the fact that trading is a game of probabilities. Successful traders believe in probabilities and in so doing know that with each trade there is a higher probability the trade will work than not. How do they know this? Because they have tested and traded their set up(s) enough times to know that the odds are in their favor. However, the successful traders also know that favorable odds do not guarantee success 100% of the time. Successful traders believe with each trade that the odds are in their favor but they also believe that the trade will not always work. By knowing this successful traders will be able to enter every trade with a clear mind open to the fact that anything can happen NO MATTER WHAT HAPPENED ON THE LAST TRADE! If you believe this then you will never focus on the last trade, only on the present one.

You cannot live in the past so there is no need to trade in it either.  Just as every day is a new one so is every trade.  Focus on the present battle and in war you will be victorious!!

TRADING IS WAR. PREPARE YOUR WEAPONS.

Post from: The CrossHairs Trader

TRADING OPTIONS WITH THE WISDOM OF MARK TWAIN.

Related posts:

1. 236% OPTIONS TRADING GAIN IS BERNARD MADOFF’S PAIN
2. TRADING STOCKS AND OPTIONS LIKE A CHILD
3. TEMPORIZING GROUND: TRADING OPTIONS IN A RANGE BOUND MARKET

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