Yesterday we talked about overconfidence. Today I’d like to talk about how to achieve the state of confidence.
As you probably remember from my previous post, people are most confident and accurate in their decisions when they deal with tasks they are familiar with. What exactly does it mean? That recipe of confident trading is very simple: make yourself truly familiar with your trading.
Most people start live trading too soon. Much sooner than they should. Result is usually sad. Not only newborn trader is unprofitable, she also gets negative experience of consistent losing and psychological condition similar to post-traumatic syndrome, which causes fear when placing new trades and serious problems with confidence, discipline etc.
Sometimes this condition is so severe that one is unlikely able to ever trade at all, let alone successful trading!
That’s why I always say: don’t hurry! If you slowly learn to invest or trade, watch the markets long enough to understand what’s going on there, thoroughly develop strategy and tactics, carefully test it in a simulated environment then trade it live with the smallest risk possible until you are truly sure it works (some day we’ll talk about statistically significant samples of data), don’t feel the slightest stress pulling the trigger and managing trades and result of your trades is consistent profitability… act this way and chances are you will be successful and it will happen much sooner than if you try and trade since day one, going through endless painful experience of losing, failing again and again.
Trying to force natural processes usually leads to slower progress. Wish to make good things happen sooner can be understood, but result is often irrational behavior (which is not optimal of course, we have evolved into logically thinking creatures for a reason).
Number one cause why business start-ups fail is lack of necessary skills. Don’t make it happen with you! Money lost is not the worst thing in this case, psyche damage can be much more difficult to cope with.
Let’s remember wise Japanese saying: “fast is slow, but without pauses”.
Make your learning to trade logically, reasonably, truly fast!