Wayne Gretzky’s famous quote, “You miss 100% of the shots you don’t take,” can be applied to both life and trading. The quote emphasizes the importance of taking chances and being objective in your decision-making process. In this blog post, we will discuss how maintaining objectivity can improve your trading experience and help you manage your emotions better.
- Understanding Objectivity in Trading: Being objective in trading means removing emotions from your decision-making process. While it’s impossible to be entirely emotionless, you can aim to minimize emotional interference. Avoid looking at your profits and losses (PnL) from a personal standpoint, and view them as points on a scoreboard instead. This detachment can help you avoid the discomfort that losing money can bring.
- When and Why We Lose Objectivity: Traders tend to lose objectivity when they experience significant losses or gains. It all comes back to risk management. To maintain your objectivity, only put money at risk that you can afford to lose, and don’t view your losses as an attack on your personal finances.
- The Importance of Balance and Nuance: In trading, it’s essential to find balance and nuance. Traders often practice extremes, either using multiple indicators or none, or choosing sides in the ongoing debates, such as option sellers vs. option buyers. Remember that everything is nuanced, and finding the right balance can improve your trading experience.
- Learning from Michael Jordan: Michael Jordan missed 9,000 shots in his career, but he’s still regarded as one of the greatest basketball players of all time. Similarly, in trading, it’s essential not to take your losses to heart. Embrace the idea that you might miss some shots, but with persistence and the right mindset, you could become the Michael Jordan of trading.
To sum it all up, maintaining objectivity is crucial for successful trading. Only invest the money you can afford to lose, don’t take losses personally, and keep taking your shots. By applying the wisdom of Wayne Gretzky and learning from the experiences of successful individuals like Michael Jordan, you can improve your trading experience and increase your chances of success.