Stock Trading Surrender?
When you think of your stock trading, the first thing that pops in your head is probably not surrendering. After all, to surrender is akin to quitting, and we aren’t quitters, we are stock trading killers, right? Quitters never win! Don’t give up! Fight until you are dead! These are all great in theory, but can destroy your stock trading business when followed aimlessly.
Let’s clear something up- I’m all for persistence and dedication to one’s profession, whether it is stock trading or basket weaving. What throws so many stock traders off course is that they don’t comprehend that losing is not only part of the business, but taking losses quickly is the ultimate path to stock trading salvation. Being stubborn and giving losing positions more time will only cause you to develop bad habits, and in the end, be the reason for the failure of your business.
Be mindful not to buy into the hype from the super gurus who are just bull market geniuses that got lucky once or twice and are now living off their latest scam. Navigating the stock market isn’t easy, and it’s not getting any easier. You can do serious damage to your psyche and trading business if you do not learn how to surrender. It’s not just about screaming “I give up!”, it’s specific things that you have to surrender to in order to allow your business to flourish as it deserves to.
Surrender to the market-
The first thing you have to do is completely give in to the fact that you will never, ever, outsmart the stock market. Stock trading is not an intellectual pursuit, which is why so many “professional intellectuals” such as doctors, accountants and engineers can have fits when they are learning to trade. These types of professionals are always able to find answers in their field, and the stock market sometimes has none. A perfect setup can trigger and then move against you before you have time to move your stops. Why? Because the market is not a perfect mechanism, despite all the talk about high frequency trading “figuring things out”. Don’t believe me about the intellectual thing? Have you read the story of LTCM?
Surrender your biases-
When you lay out your trading plan, whether it’s for the next session, the next hour or the next minute, its important to have strong opinions. If you are wishy-washy or unsure, you shouldn’t be taking the trade. Despite having a strong opinion, you should never let it cloud your feedback loop. Be sure that the trade is doing what you expected it to do. If it isn’t, surrender your bias and cut your position loose when it violates your set parameters. One of the main reasons that traders get washed out of the business is by holding onto their bias like their life depended on it. In trading, this just isn’t the case.
Surrender every trade you take-
As soon as you put a trade on, give in to the fact that you lost your risk allowance for the trade. You will always start your trading plan with the risk amount you can tolerate, and that amount should never take you out of the stock trading business for good. Therefore, however anti-Robbins it may seem, expect to lose each and every trade before you place it. This will give you the ultimate respect for risk, and in the end, that’s what will drive your stock trading to the next level.
Surrender your losses-
Now that you’ve taken your loss, let it go. Surrender the loss, because it’s gone, and you have to move onto the next trade as soon as you can. For some, this is right away, while for others, they may need to take a walk, or get a nice stiff drink of distilled water. Those that turn out to be the biggest winners in stock trading surrender their losses without hesitation. To quote from my favorite trading book “your best trades are in front of you, not behind you.”
Surrender your gains-
You’ve just made a winning trade- congratulations! Now what have you done for your trading business lately? As soon as the gain is booked, the trade is over. Don’t dwell in the past, move forward just like you should be doing after a loss. Surrender your gains before they make you do something stupid like take the next trade with “their” money. Here’s a tip: it’s your money once your reward has equaled your initial risk, booked or not. Bragging about your winners just feeds the worst type of dope addict out there, which is your ego. Being confident is essential to your stock trading success, but being cocky will wipe you out faster than you can make the cash register say che-ching!
In conclusion, don’t think of surrendering as giving up. Think of it as putting yourself at an advantage that few traders ever achieve. By releasing yourself of this weight, you allow the market to lead you, pushing you past the major hurdle that hinders the advancement in your business.