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When you love too much.
Overtrading ... The Kiss of Death.
The #1 problem most traders face? I haven't taken a formal survey (feel free to
take the poll in this lens and maybe we'll get a more official answer), but I would guess it
is:
Over trading.
We don't really trade for the money. Oh sure, the money is great, and we do want it, and it is thrilling.
But there are many ways to make money. We choose to do it through trading because we LOVE to trade.
That's good.
And bad.
It's wonderful to pursue your passion. But when it comes to trading, too much of a good thing leads to failure.
Learn from the Cheetah.
The Cheetah waits and waits and waits in the tall
grass. It doesn't pursue the prey, but rather it just sits silently and perfectly still
waiting for its prey to come to it.
It can wait for looooong periods of time.
Perfectly still.
Perfectly quiet.
Boring.
And it doesn't attack the strongest prey. It's not interested in a fair fight. It wants the weakest one that's limping across the field.
Because the Cheetah isn't in it for sport. It's in it for survival.
It's the same with us as traders. If you want to truly make money at trading, it isn't going to be as action packed as you first imagined.
The best trades come by waiting for the weakest points in the market ... the times that don't happen very often, but when they do occur, the odds are clearly stacked in your favor. The rest of the time you just wait and wait and wait ... coiled like a cat ready to pounce.
Dr. Van Tharp once said: "Good trading is boring."
So how do you deal with the need for "action?"
You seriously and deliberately need to structure it into your life in another way, so you aren't even tempted to get that need filled at the trading screen.
When I first heard someone say you can't treat trading like a video game, I didn't believe them.
Tens of thousands of dollars (lost) later, I decided they were right!
Like most traders, I had a need for action, so I deliberately went out and bought an XBox!
That worked pretty well. So now I upgraded to a PS3!
I took it pretty literally. You may not like video games, but if you have a need for "action," then you'll do yourself the biggest favor by getting a hobby that gives you all the action you can handle so when it comes to trading, that need has already been satisfied and you patiently wait for the perfect time ... and let the amateurs have all the other trades.
Over trading.
We don't really trade for the money. Oh sure, the money is great, and we do want it, and it is thrilling.
But there are many ways to make money. We choose to do it through trading because we LOVE to trade.
That's good.
And bad.
It's wonderful to pursue your passion. But when it comes to trading, too much of a good thing leads to failure.
Learn from the Cheetah.
The Cheetah waits and waits and waits in the tall
grass. It doesn't pursue the prey, but rather it just sits silently and perfectly still
waiting for its prey to come to it.It can wait for looooong periods of time.
Perfectly still.
Perfectly quiet.
Boring.
And it doesn't attack the strongest prey. It's not interested in a fair fight. It wants the weakest one that's limping across the field.
Because the Cheetah isn't in it for sport. It's in it for survival.
It's the same with us as traders. If you want to truly make money at trading, it isn't going to be as action packed as you first imagined.
The best trades come by waiting for the weakest points in the market ... the times that don't happen very often, but when they do occur, the odds are clearly stacked in your favor. The rest of the time you just wait and wait and wait ... coiled like a cat ready to pounce.
Dr. Van Tharp once said: "Good trading is boring."
So how do you deal with the need for "action?"
You seriously and deliberately need to structure it into your life in another way, so you aren't even tempted to get that need filled at the trading screen.
When I first heard someone say you can't treat trading like a video game, I didn't believe them.
Tens of thousands of dollars (lost) later, I decided they were right!
Like most traders, I had a need for action, so I deliberately went out and bought an XBox!
That worked pretty well. So now I upgraded to a PS3!
I took it pretty literally. You may not like video games, but if you have a need for "action," then you'll do yourself the biggest favor by getting a hobby that gives you all the action you can handle so when it comes to trading, that need has already been satisfied and you patiently wait for the perfect time ... and let the amateurs have all the other trades.
- Dr. Barry Burns
