The cycles of trading. Do we get worse sometimes if we overthink and get too caught up in things?
@mikebellafiore
I was asked this question during a recent Webinar “Trading Fundamentals: Things Great Traders Do and Never Do”. Gr8 question!
Yes, traders can over-think. I sat in our conference room yesterday with one of our brightest traders who has been underperforming. He said, “Sometimes I overthink everything and get all confused.” I suggested that he make the game easier. Write down his best setups. Trade only them. Trade them with less size. If he sees his best setups just pull the trigger and make the trade.
Sometimes as traders we have to make certain trades even if our gut tells us otherwise. If I see a Trend Trend Trade, my favorite trade, I force myself to stay in the trade even if the tape is not clean. This setup is so powerful that the spotting of it is more important than my intuition or gut. I may catch myself overthinking all the reasons to exit, but I have come to peace that I must stay with these positions. During our midday review an often refrain is: “My trading system mandates that I make that trade. I have to be in that trade no matter what the results.” The right thing to do is make Trend Trend Trades. The wrong thing to do is think my way out of Trend Trend Trades.
I hope that helped.
Related blog posts:
The Trend Trend Trade
Find the Setups That Fit Your Personality
You can be better tomorrow than you are today!
Mike Bellafiore
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