Perfection in Trading

A hallmark of success is the dedication to high personal standards, a principle that applies to both individuals and organisations. Striving for progress and pushing beyond one’s comfort zone are essential for achieving true greatness.

In the realm of trading, our experience at TraderGuide indicates that substantial profits are not attainable unless one sets ambitious goals, accompanied by meticulous training practices.

However, excessively high standards can sometimes be counterproductive. Therefore, it is important to carefully consider what constitutes high personal standards in the context of trading. This concept may not be as straightforward as it seems, especially when it comes to trading aspirations.

In demanding professions, where even the best efforts may fall short, maintaining exceptionally high standards is crucial. For instance, teachers must ensure their students achieve a prescribed level of mastery, heart surgeons must perform flawlessly to save lives, and pilots must fly safely to protect their passengers.

However, there are instances where setting excessively high standards is inappropriate, and this also applies to trading.

Avoid Insisting on Perfection in Trading

Some individuals are extreme perfectionists, setting unattainably high standards. In extreme cases, this can lead to frequent feelings of failure and even depression when these standards are not met.

This scenario is common among traders who set profit objectives beyond their skill level, resulting in disappointment and frustration when expectations go unmet. Often, traders also impose unrealistic standards in other ways.

A common issue is "analysis paralysis", where traders overthink and overanalyse market data before making decisions. This leads to hesitation and self-doubt, ultimately undermining their trading strategy. Timing is crucial—failure to enter and exit trades at the right moments can significantly impact a trader’s account.

Another example is the belief that every trading opportunity must be seized. Some traders fear missing out on potential gains, causing undue stress. Experienced traders advise against this mindset, emphasising that it is neither practical nor necessary to capitalise on every opportunity.

Setting Appropriately High Standards

To establish suitably high personal standards in trading, maintaining a high level of discipline is essential. Develop and adhere to a detailed trading plan, defining specific entry and exit strategies while employing appropriate risk management. Once established, it is crucial to follow the plan without deviation.

Avoid fixating on immediate profits from individual trades. Instead, focus on whether your profits are justified by adherence to your trading plan. It is preferable to incur a "justified loss"—resulting from disciplined adherence to the plan—than an "unjustified win" achieved through deviation.

Setting high personal standards is critical for success, but they must be established correctly. Avoid extreme perfectionism. Execute your trading plan consistently and ensure strict adherence. High levels of discipline will facilitate profitable and sustainable trading.