How I stay in control of my trading

We can do our best and still sometimes not get the result we wanted. It's no different in trading.

We can make preparations, make analyses and the market still shows us that we have misjudged it. Today I am convinced that a new expectation management is immensely important to achieve better trading results.

The problem is so often that we want to anticipate or anticipate something in advance, which we cannot influence at all. This applies universally to other areas of life as well.

If I want to prepare a nice evening for my girlfriend, tidy up the apartment, put fresh flowers on the table and cook her favorite meal, then these are good preconditions for her to be happy and later throw her arms around my neck as the best friend in the world. But if she had an unpleasant customer on the phone just before leaving the office, or the boss let off another quick frustration, or she got stuck in traffic, then the beautiful evening - despite all the preparation - may fall through.

And yet, how often do we ask ourselves: What did I do wrong?

Nothing at all.

Human behavior cannot be predicted, even with the best analyses or preparations.

Especially on the financial exchanges, where an unmanageable number of market participants act at the same time, the whole game is even more potent! One considers the Daimler share worth buying at EUR 64.00, another must sell it at the same price, i.e. have selling motives, so that the transaction comes about. Both act at the same price for completely different reasons, one perhaps according to chart technology, the other has just read a newspaper article. Trying to resolve this, to anticipate this, is a Gordian knot. And yet we oracle and ponder so often.

When we don't separate our preparation from the result in trading, it creates real stress.

The stock market then annoys us and we look for the reasons in ourselves, in the trading system, in the product and often do not see that the "mistake" was not ours at all.

The best preparation, the best trading signal can and will fail at some point.

Even if I got up at five o'clock in the morning, read all the stock market news and chart analyses, formed an opinion, I have to expect that the day will develop completely differently than I had planned. Because there could be variables at play that I don't even anticipate.

I have recognized for myself that the famous "Circle of Competence" applies here again.

Some things I can influence, others I cannot.

However, it makes no sense to want to change things that I cannot, with the best will in the world, help to decide. It's much smarter to focus only on what I can control. For example, where my stop is, what plan I want to trade today, or how much risk I take.

As soon as I let everything I can't influence go, my mind relaxes and I become more composed, react less emotionally and get a bit closer to the famous "trading wisdom" again.

It even has a second advantage. By realizing that I waste a lot of energy trying to anticipate developments that I can never correctly foresee, I realize that a lot of energy goes into this "foreseeing" and "weighing".

Once I decide for myself that I don't know how the day will end, but I can put my full effort into the "here and now" and maximize my preparation, I can put all my energy into what I can really influence.

Sometimes we then realize that we haven't been that accurate in our preparation, haven't given our best. For example, we forgot to fill out our trading journal, we analyzed the market only casually and didn't give it our full attention, or we weren't as disciplined as we had planned.

Once we make our trading decision, we often sit transfixed in front of the screen, trying to influence the outcome of the trade with our thoughts. Actually crazy, isn't it? Instead, we could refocus our efforts on what we can influence, like figuring out what to cook for the girlfriend for dinner.

Trading is one of the most dangerous jobs in the world (that's why you can make so much money doing it - risk/return law), but we need to be fully focused every day to stay in control at all times like a helmsman on the high seas. As traders we simply cannot afford to waste thoughts and capacities on things we cannot influence.