Ever had a bad day? For you students, failed a test? For traders, lost a lot of money? Or whatever else is not pleasant, the answer is yes; people have bad days all the time, and we all will have more of them in the future. It’s not cynical to think like this, it’s responsible and honest. What’s not honest and irresponsible is to ignore the reality and think that life is all fun and roses, the only thing that this belief will lead to is a naive conception of life and a dry day-to-day existence.
So, given we should recognize that we will have bad days; what should we do about that this? Find solid grounding. Whether it be in life or in trading, we all need something we can anchor into when the waters get rough.
This could be different for everyone, but these are some traits it should have:
- It’s not fallible
- It’s consistent
- It’s reliable
- It’s true
- It’s logical
The list could go on, but I think you likely have the idea of it; it’s something that is outside the self that the self can ground it’s self in when the self gets tossed around in the stormy waters of life (or trading).
It’s not hard to relate this concept back to trading; when you have a bad trading day, what do you do?
There are a couple options; you can sulk in your loss of money, you can get angry at the market, you can give up or you can go back to what you know is true (namely, your rules/process). In the case of trading, the “rock” or “solid ground” of your trading when you have a bad day is the process/rules you worked hard to develop and create, the rules you have backtested and they have proven to be true and valid.
This concept is one that is hardly limited to trading, but also to life itself; next time you have a bad day, find that ground, the true ground that you can anchor yourself in to get you through the storm.
Perhaps this wasn’t the stock market analysis post you came here for, but before we can do good analysis on the stock market, we must be capable of doing that and that involves knowing who (and whose) we are in trading (life).
If you have any question/comments, I am always available. Let me know. Best of luck (and PS; the market is choppy, if you are a swing trader, I wouldn’t get too excited about purchasing new stocks here).