Greed and Fear - Daily trading signals based on mathematics and software, no opinion, no emotion, no ego.

perfectionism1Some say in trading the true character of a person comes forward with all its strengths and weaknesses. Suppose a trader has a tendency to be perfect, to perform each and every little task in perfection. For people with perfectionism it may not be that hard to function in every day life, maybe with a little struggle here and there. But it's very hard to combine perfectionism with trading.

As we have seen so often, a significant part of trading is the acceptance of being wrong in many, if not most cases. A trader 'suffering' from perfectionism would have a hard time dealing with all the failing trades. A perfectionist trader will always find something that could have been better in every trade. Such a trader could start negative self talk and blame himself for all the mistakes, missed opportunities, wrong trading size etc. Doing such negative self talk will most likely influence his ability to recognize new trading set ups in the market, resulting in a even worse performance and more negative self talk.

It's not easy to lose the perfectionism, but there may be a way to tone down the negative self talk. Pretend not to be talking to yourself, but to a colleague who just completed the not-so-perfect trade. Try to bring criticism, but in a rational and positive way. Discuss the failure as something you and 'your colleague' can learn from. That's what colleague's are for ;-)

Recommended reading:

Accepting the loss of a stop: stop loss

No ego: don't be nice to your ego

If nothing fails and everything is perfect: overconfidence