Why is something so simple so difficult? (two)

Why is something so simple so difficult?  (two)

Let’s follow this line of reflection: trading is an activity that basically requires making the decision to buy or sell… and the market can go in favor of or against our decision Why is it so hard to be consistent?

One element that interferes with our success is the Total freedom that the participants have. It is as if people were not prepared to act correctly in the face of so much freedom… and it is partly logical because most people have never acted in such an uncontrolled environment: when they were little their parents controlled them, when When they went to school they were controlled by the teachers, at work by the bosses, if they became bosses by the board of directors… There has always been a control network that has asked us for explanations… and suddenly we find ourselves faced with the possibility of make ALL our decisions: when we enter, with what amount, for what reasons, how we manage the exit, when we consider the operation to be a failure, which days we operate, at what hours, based on which representation framework, with which grapher …

We have so many possibilities and so little supervision that it is very easy to lose our way. There are many who start trading called for this freedom: for the first time in their lives they will be able to have the last word on all the decisions they make… and finally, this freedom ends with them.

That is an obstacle that prevents consistency: absence of a control framework. But it is not an insurmountable obstacle, on the contrary, it is relatively easy to overcome. For this we need two things:

  1. Understand how important supervision is.
  2. Create a framework that allows us that supervision.

The importance is clear: either your performance is evaluable or you will run the risk of going around in circles. You need to measure what you do against the ideal of what you have to do and that means that you must put yourself in a position to be controlled. Then you will decide if you want to leave this control in the hands of third parties (like your partner for example), or if you want to do it yourself.

The creation of a control framework takes three paths:

  • Elaboration of a Trading Plan that establishes what exactly you will do and that will constitute your ideal behavior.
  • Detailed record of all your operations.
  • Analysis of that operation, that is, we compare a with b.

These simple measures will allow us to know if what we are doing is correct, in which case we will persist in it, or if we are wrong, in which case we can correct our action. Although trading attracts us because of the freedom of making all our decisions, we must be smart enough to establish a framework of control that looks after our interests.

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