In some of my other articles you may have noticed some references to golf. Like trading, I love golf. There are so many similarities between trading and golf that I feel compelled to write a future article on the relationship between the two.
In this article I want to draw a simple analogy between golf and trading.
In my early twenties and thirties I spent my non-working and non-sleeping hours practicing and playing golf. I was obsessed with it. (you can probably see one of the similarities already).
What I tried to practice in golf was being perfect. Now any rational human being knows that is impossible. Looking back now I realize that too but when you are in the moment your thought process can be compromised.
Consider that there is not one person in the baseball Hall of Fame that was perfect. Heck many of the hitters and position fielders that were first ballot inductees did not even bat 300. That means they failed at least 70% of the time but they are among the immortals of the sport. Additionally, there is not one pitcher in the Hall of Fame that had a perfect record. I trust you now get my point.
As I matured as a golfer, still seeking perfection but beginning to understand that was not achievable I was introduced to a number of books written by Dr. Bob Rotella. His first book, “Golf is Not a Game of Perfect” was a true eye opener. The thoughts and ideals in that book suddenly changed my whole perspective on golf, so much so that it transcended into other areas of my life. To this day it has been one of my most influential reads.
As you mature as a trader you will understand that trading too is “not a game of perfect”. Trading is a probability based endeavor. You cannot be perfect! Trading is a business and you should treat it as such. I can’t imagine that everything you have ever done in your business career is perfect.
Don’t let your drive to be perfect keep you from enjoying and prospering in the “game” you love. You must develop this mindset! Like Dr. Rotella explains, “pick small targets” and focus like a laser on them.
Think about this. You could practice flipping a coin to come up heads every time until your hands bleed but of course you realize that you will never achieve that result. You can absolutely be the best “coin flipper” in the world and your outcome will still be 50/50 if you have a statistically significant sample size. This analogy of course seems ridiculous but it applies to Probability Based Trading which is the methodology that I use every single day in the selection and execution of my trades.
It is not necessary to continue to study to become a consistent trader. Simply rely on the odds that are right in front of you on the options chain. You find and execute trades that yield a favorable result. Your focus is to find and execute a large number of trades that meet the criteria and put the odds in your favor.
The more you “flip the coin” (translate as executing trades) the closer and closer you will get to the projected results. It really is as simple as that!
Practice will certainly improve your familiarity with your trading platform and eliminate what I term “fat finger” mistakes. But you can’t be perfect in your trading results. However, if you can put the proper strategies in place using defined risk probabilities you will be well on your way to be in the trading Hall of Fame.
I love trading, talking with and helping other traders. If you would like to discuss these (or other) trading ideas please give me a call at 239-272-3424. I answer my own phone.