Saturday, August 20, 2005

Mental Balance or How to live with what you know already



Every trader can have a certain routine he establishes to get himself ready to trade. Many involve waking up with coffee or breakfast and looking over current market conditions.

Every trade is more or less prepared for in one way or another even if it is just clicking the mouse he just put his hand on.

There is a mental balance he establishes to convince himself to enter and also exit a trade. Every trade has two sides so every trade must have some decision seemingly beneficial to both sides of the trade. If you look at this exact point you will see two opposing views of *every* trade. So it stands to reason that if you listen to other traders long enough you will get conflicting points of view on everything.

If you study everything with equal weight you will eventually be exposed to a complete conflict of views on any trade you could possibly make. Such a state of mind is described by some as "paralysis by analysis". It could simply be called mental confusion, or indecision.

If you were to assume that this is an undesirable state for a trader, what that trader would need to do would be to select his own method of approach to a trade and test them for his own satisfaction that they will be workable, if not perfect and use these methods exclusive of everyone else's viewpoint.

A trader without a viewpoint will end up without his own mental balance.

Daily tinkering with a working system due to someone's bright ideas is likely to lead a trader down a road to paralysis.

Don't tinker with a working system.