Striving for excellence motivates you; striving for perfection is demoralizing.
– Harriet Braiker
Whatever type of trader you are, whether it is for your own account or a client the fact is that you are to a large extent driven by the desire to make as much money as possible. It is the identification of being successful at your job and within today’s society money is seen as a measure of personal success and social standing. For the trader, trading can become is their obsession and losing on a trade becomes an issue. They are driven by the need for perfection.
However, where is this strive for perfection going to lead them? Mark Douglas of “Trading in the Zone” notes that the fear that goes with the need for perfection as they can’t cope with being wrong as one of the biggest problems for a trader. While in her book “Seven Deadly Sins of Trading” Ruth Barrons Roosevelt states that perfectionism is one of the deadly sins. The fact is that the trader can get so caught up in the need for perfection that they can start procrastinating, second guessing themselves, extreme hesitation and falling into the trap of “analysis paralysis”.
What causes this drive for perfection in some people though? According to Dr Albert Ellis is something that becomes ingrained in childhood where the belief is set that perfection is critical. In all areas there is reinforcement that we need to be consistently delivering or suffer the consequences for ‘incompetence’. So over time this converts into the desire to be more than adequate and competent and should achieve all we set out to achieve. Not good for the trader who finds they are paralysed by fear and anxiety as a result. Indeed it’s a known fact that “The harder you strive for perfectionism, the worse your disappointment will become…”
When considered within a trading environment the paralysis that the strive for perfectionism can cause supports Dr David Burns’ theory that there are more disadvantages from perfectionism than advantages. The need for risk taking that sets a successful trader apart from the majority would be compromised by a fear of failure. Opportunities will be missed as a trader will be dis-inclined to risk exploring further than the arena they already know. All this with the accompanying thought that they could have done it better.
So how do you reign in the natural inclination for perfectionism and even turn it to your advantage? Dr Burns states that for starters it may be helpful to learn to lower personal standards. This links into the theory of Dr Ellis that suggests that a trader has to recognise that they need to adapt their approach as it is impossible to always achieve. This doesn’t detract from the good behaviour skills that should be followed of always creating a detailed plan before entering into a trade and reviewing all the possible adverse scenarios. However there is a point at which to stop and execute the trade and accept that there may be an event that you didn’t account for but that is fine and mistakes happen. The trader in reality needs to identify the most profitable option and not the most perfect one so it is possible to go for trades that just pitch into ‘average’. Making it acceptable might feel so much better and less stressful that it allows for greater clarity of thought and reduced less of fear so that you can take more risk overall.
The recommendation by Ruth Roosevelt is to review the mantras that you live and work by. For the trader it is important to control any tendency towards extreme perfectionism so the advice is tell yourself that you need to “do my best and my best is enough. Trading is an imperfect art and science, the future is unknowable, so I don’t have to accurately predict it. I can forgive myself and improve.”
So if you are consumed by the need for perfection then do yourself and your trading account a favour. Acknowledge that mistakes are to be expected and that your need to avoid them is costing you more than you can probably see. In order to get the best advantage as possible and get ahead in the world of trading you need clarity of thought and it is worth sacrificing some of your perfection for the rewards that you will gain.
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