This endeavor of futures trading attracts people from all walks of life. They can be doctors, housewives, or entrepreneurs (who are generally a good fit as they are risk takers to begin with). That said, there is one profession in particular that seems to have a special affinity for speculating in the financial markets. These individuals are an extremely bright lot and are known for their sharp analytical skills as well as their acumen for organization (I should know, I have several in my family). If you haven’t guessed by now, I’m referring to engineers.
In the world of engineering and science, most everything is usually black and white. In this realm two plus two equals four and there is no disputing it. “For every action there’s an equal and opposite reaction” is a widely accepted theorem throughout the scientific world. It’s recognized mainly because it has been largely proven. So when these very smart individuals first try their luck in the trading arena they find many challenges. Please don’t misinterpret, I’m not picking on engineers, this can be anybody that tends to be overly analytical. For those that overanalyze, one of the challenges is that in trading, unlike in many other aspects of life, things don’t come in tidy perfect packages. In other words, there is no such thing as a perfect setup. Incidentally, engineers turn out to be some of the best traders once they overcome their penchant for over-analyzing.
When we talk about odds enhancers here at Online Trading Academy, we are referring to certain criteria that we look for in order to increase the probabilities that a trade will work. This is not suggesting that every one of our odds enhancers has to be in place before making a trade. In fact, we teach our students that even if not all the criteria we teach is in place, it’s still fine to put on a trade as long as there are more odds present than not. We provide students with a scoring sheet in which they can compile a list of conditions which we deem “odds enhancers”. This information is then used to decide if the trade makes sense, or as sometimes occurs, taking a pass on the opportunity all together.
Even if the trade scores high on the odds enhancer sheet, it does not guarantee success. There is rarely a trade that we say is perfect; it doesn’t exist. More to the point, trading is more an art than a perfect science, and yet, we find that many traders need all the stars to lineup perfectly before they’ll pull the trigger. Moreover, if the trade has all the hallmarks of a winner and still doesn’t work, they become very upset. This set back gets them to devote even more energy in seeking out “the perfect setup”. This is one extreme, on the other side, some traders have no stars to speak of, and trading is left to random chance (or even worse) to impulse, emotional decision making.
This “perfectionist” mentality does not have a place in the trading world. Trading involves risk, which by its definition means uncertainty, so you can imagine how someone with this mindset would struggle doing this. Please don’t confuse perfectionism, with the quest for excellence. These are two very distinct pursuits. The former is unattainable, while the latter is not only attainable but also something to strive for.
Finally, remember that in trading, it’s perfectly fine to be wrong. And it’s perfectly fine to lose a little on every trade, which makes it perfectly OK to let your winners run.
Until next time, I hope everyone has a great week.