Are you driven to succeed? Do you feel the need for everything to be perfect? Do you have to be perfect every single time before you trade?
If you're an overachiever, driven to success at all costs, it's also likely that you might be striving for perfection all the time. While the drive for being successful and getting the details in place is important, sometimes this need for perfection can be taken too far.
In business, the businessman cannot wait for perfect conditions to launch his business. If he did, the business would never be started as things are hardly ever perfect in all areas and aspects. The same goes for trading. Perfection in the trading markets will hardly ever be achieved.
SIGNS OF PERFECTIONISM IN TRADING:
This need to be perfect seems to be a problem for many traders. Many traders spend the entire day looking for the "perfect" trade set-up, or perpetually wait for the "ideal" market conditions. This can result in traders compulsively looking at as many indicators as possible, hoping to find new information from the same information already available to them.
This leads to traders over-complicating things with several overlays of different indicators, trading systems, charts and so on. In the end, the entire analysis becomes a confusion of colors and lines which are unintelligible. Which results in what is commonly known as "analysis paralysis", where one analyzes beyond what is necessary to the point of being paralyzed.
Another sign of perfectionism in trading is the need to be on a winning streak all the time. If they are not on a winning streak, they feel something is wrong either with the system or themselves. And when they try to fix something that isn't really "broken", the irony is they end up breaking it.
HANDLING PERFECTIONISM:
Experienced traders who have been trading profitably in the markets over long periods of time will understand that while some trading systems can be complex, usually the simpler is better. And at the same time, they realize that the markets will always fluctuate up and down. Sometimes going in their favor, and other times not.
Statistically, you don't have to win all the time to be a winning trader. In fact, from a mathematical standpoint an extremely profitable trader can be wrong more times than right. The issue lies with the ability of traders to handle losses and losing streaks.
From the perspective of trading psychology, children are taught from young that making money is "hard", losing money is "wrong", and other psychological imprints that make money seem more valuable than life itself. And when they start trading in the markets and realize that losses are inevitable, it creates an inner struggle within.
And when they make a losing trade traders tend to beat themselves up over it, thinking the more guilty they feel about it and the more they "punish" themselves, the better things will be. It's hardly rational thinking in the markets, but people usually aren't that rational when it comes to things like money.
It's vital for a trader to forgive themselves when they make a losing trade. This helps them to clear up their mind, so they can view the trade with a clear perspective in order to review the trade for errors. Errors not just in their following of their trading rules, but to review if the system has somehow "broken" down.
In most cases, if a trader already has a decent trading system based on sound market principles, it's usually because it's one of those losing trades that inevitably come along with any system. That's why having a solid trading education and system is so invaluable to the long term success of any trader. Conclusion
The fact is, trading is a tough business. Few make it, and statistics show that the majority of traders won't survive even the first few years in trading. While this can be daunting, if you allow yourself to become pessimistic and give up, you'll never make profits.
You don't have to be absolutely perfect as a trader, so long as you have a robust, solid trading system which you follow. You don't have to hit winners every time to be profitable over a period of time. Sometimes you will be right, sometimes you will make mistakes.
The thing is not to allow your mistakes to pull you down. Learn from them, improve yourself as a trader both in education and psychology, and you will very likely end up profitable. Which is the entire point, isn't it?
Ryan Lee Daniels runs a website dedicated to Forex Trading Education.
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http://EzineArticles.com/?Trading-Perfection---An-Illusion?&id=725565
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