Market Psychology – Process over Prize
By: Gaurav Taneja, Financial Trainer, Venteskraft May 15, 2020
In this section of the “Market Psychology“, we will ponder over Process over Prize. If you missed the previous blogs of the series, take a time and read them out.
Before even entering the trade are you imagining the admiration you will get after making that huge profit? Are you feeling proud of the “Prize” you will earn after the trade? It is very easy to get distracted while trading; and the panic and make a wrong entry. You have a certain amount of focus and you choose to spend majority of the focus more on the prize rather than the process. The trader with a winner mindset puts his/her attention at the present experience and not on the outcome.
When you keep thinking about the profit; you can’t accept any other outcome than a profit, and the second thing which happens is you get a lot of mental pressure. Just imagine an athlete who is famous for winning, he/she will have a next level pressure during his/her performance. Imagining the profits can be a good motivator. Bu the reality is that if you focus more on the prize you can’t trade profitably or consistently. When you get your hopes high, you already have decided that the profit is in your pocket, and even a little thought about a loss is devastating.
Anxiety and fear emerge when we grieve over the past and worry about what might happen in the future. Instead be happy to get a chance to experience the present and have an opportunity to learn. As soon as we start thinking about the future, we lose the focus from what is happening in the present. We miss out the critical moments of trade. And the most common reason is thinking about the big prize. You start thinking let me make a profit here enjoy the success and glory. And due to that you start panicking and make some errors and end up in loss. But the more you think on the process and the intellectual part of trading, the more likely you will execute your plan effortlessly and become consistent.
And thinking about the big prize is not completely bad, occasionally is fine, but not during trading hours. It may be motivating in off hours to think about the long term benefits of trading. There is a difference between “must” have the prize and “it would be nice” to have the prize. If you truly think like that you will definitely be unaffected by these small distractions. You can easily convince yourself that this is not a good reason to make trading as a career. No matter if you win or lose, but at the end of the day if you focus on ongoing experience, you will feel more fulfilled as a trader.