What is your biggest source of anxiety about every trade? Well, for most traders, it’s typically all the variables, or “what ifs” about the immediate and eventual outcome. ‘What if it goes against me?’ Or maybe even ‘What if this turns into a huge winner?’
We talked recently, however, about eliminating factors we can’t control, and needless to say, neither of those result-oriented questions are good ones to dwell on, but there are some questions that are, and that will be our purpose here today.
So, to get right down to it, here are two “what if” questions you can—and perhaps should—ask yourself with every trade.
It takes some serious guts to trade live in front of other people, and if you’ve ever seen or done it yourself, then you know. You have to have confidence and conviction in every trade and everything you do to plan and execute it.
There’s no room for improvising or trying something “just this once.” It’s about extreme commitment to your proven methods, and while any savvy trading audience will understand that no strategy or trade is perfect, you’re being judged on the merits of your plan and your compliance to it, and you’re on the hook if you don’t do it well!
Sounds like a great way to develop discipline, doesn’t it? And in fact, it is, so much so that this is actually a scenario you can play out in your head with every trade!
What if people were watching? How would you convey the reasoning behind your trade set-up, and explain the conditions that are all present in accordance with your strategy? Is risk/reward solidly in your favor, and how will you manage that and every trade so that those in attendance would likely nod along with you in approval?
Then, from there, you’d want to execute decisively and with confidence, and leave the end results up to the random nature of the markets. Afterall, you wouldn’t want to let the audience see you sweat, right?
If any of this sounds like a more empowering and effective way to trade, then try it for yourself! It’s a great way to be accountable for your process on every trade, and with an audience watching—even an imaginary one—you may be far less likely to gamble, trade sub-par set-ups, or maybe even go against your better judgment and talk yourself out of a great trade.
Trading is, more often than not, a solitary business. It’s typically just you, alone with your thoughts and the information on your screens, and while that seems blissfully simple, solitude and a lack of accountability is a common problem for traders at all levels. You may not really have anyone to answer to, so just like imagining an audience around you could be helpful, so, too, could be imagining every trade out there in article form for the entire trading community to see!
Now, there’s no need to shop for a publisher just yet, but when planning every trade, why not think about its merits and ask, ‘How would I present this trade, in writing, to an audience of my peers?’
You would want clear reasoning, a list of the exact technical and/or fundamental conditions that are being met, the risk/reward profile, perhaps the chart(s) you’re using, and a few, brief comments about the set-up. And, remember, you don’t have to convince anyone else to take it, but you do have to show precisely why you did!
So that’s your mission, and if there are problems with your logic, this audience is bound to tell you all about it, so make sure the case is strong for every trade! You can even try journaling your trades this way, because even if it’s only you that’s seeing it, taking a real, objective look at every trade as if it were happening publicly is a powerful technique that could vastly improve your performance!
Questions about “what if” usually have no place in trading, and to some, “what ifs” have no place in life, either. We can’t control outcomes, afterall, so why face undue stress about them?
For traders, such “what if” questions typically involve making or losing money, or being right or wrong about the markets, neither of which is aligned with a traders’ purpose, which is to simply execute a proven strategy right down to the finest detail.
To trade more in the present and remove the focus from money and end results, try asking yourself the “what if” questions we discussed here instead, which focus only on the process behind every trade, and not the eventual outcome.