Top Ignored Factors That Could Affect Your Trading Performance – Introduction
As traders, we want to outperform the market and be consistent in our performance. We want to be good at what we do all the time. This is the main reason why we spend a lot of time reading and doing analysis on the market. As I have mentioned before, achieving consistent returns is not an easy thing. It is difficult and many people have tried and failed before. In this article, I look at some of the most ignored factors that could affect your trading performance.
This is probably the leading factor that makes many traders fail. When they make trading decisions, they become so overconfident that they are not willing to change their decisions. For example, a trader will buy a currency or a commodity and when the thesis fails, instead of exiting, they will continue to hold it. Of course, this does not happen to small-time traders alone. We have seen it play among big hedge fund managers. For example, David Einhorn made an investment in SunEdison. The company performed poorly and instead of him exiting the trade, he held on into it. Later, he lost all his money when the company declared bankruptcy.
Fear is not good in any profession especially, in trading. When you open a trade, you want it to be successful. But, before it achieves this success, chances are that it could move down. To succeed as a trader, you want to be able to hold on to the trade even when it goes south without fear. When you are fearful, you will close the trade before it matures. To prevent fear from taking over, I recommend that you always have a stop loss at a place where you are comfortable losing money.
As a trader, you want a good access to the internet. You want internet that is fast and reliable. Having an internet connection that does not meet this criteria can be what separates you from being successful. Essentially, you want an internet provider that is not very expensive but one who is reliable. For example, assume that you have just opened a trade and then the internet goes off even before you set up the stop loss. If this happens, chances are that you will lose your money. I recommend that you subscribe to a good internet and then have a mobile app as a backup.
As a trader, you want to have the best source of electricity. You want power that is reliable and one that will not fail you. However, if you rely only on the power of the grid, chances are that you will often have outages. Assume that you have just opened a trade and then power disappears. If this happens, chances are that you will lose money. To prevent this, I recommend two things. First, you can buy a backup generator that will run automatically when power disappears. Alternatively, buy a powerful UPS to backup your power.
- The Trading Office
The office that you trade in is very important. It can be the thing that separates your success and your failure. Most traders start trading in their bed rooms which is good. But as you grow, you will want to let your trading office grow with you. Essentially, you want a trading office that is conducive, silent, and away from distructions.