As I'm not too familiar with this study, and spend much of my post market time scanning and spending time with my family, I'm not able to explore and relish in many of these somewhat relevant studies.
I am (as we all are) very familiar with the inner challenge we have at becoming better at what we do. I believe that all of us suffer from three things that prevent us from reaching our true potential:
1) The comfort zone: feeling content in the status quo and not honing in on our ambition to improve our situation. I don't believe that we are sado-mascohists, but we are sometimes "afraid" to take that step to the next level. Instead we lock ourselves into the boring world of mediocrity.
2) Failing to raise our standards: the comfort zone helps this along. Many of us who reach success in trading stay in the comfort zone, and we let it"work against" our expansion because we are afraid to lose what we have worked so hard to achieve. Something I wrestled with was not increasing my exposure as my equity grew. My personal trading plan called for an exposure increase, and I didn't adhere to it for quite sometime, because I was afraid of the unknown. Once I came to terms with the fact that as long as I stuck to my plan and managed my risk, I controlled the percentages. In essence, the risk and reward never changed. In return for increasing my exposure to the risk, I increased my exposure to the reward as well. The only variable was the amount of size I took on. A $100 loss on a $10,000 trade hurts just as much as a $1,000 loss on a $100,000 trade.
3) Not have the fortitude to stick with our plan: when I refer to the "plan" I'm talking about the global plan, and the plan for each trade (entry,stop and target). I'm sitting with a swing short, and it's my second time going back to the stock over a three week period. Years ago, I subscribed to the belief of "not going back to the well" too many times. Now, I try "my best" to look at the stock as a brand new trade. I set entry and exit, and I came very close to closing out the position several times today. There was no reason for me to do this, the stock had not reached my stop or target. I found the intra day minutia was getting to me,and I was bored.
We can let sado masochistic tendencies take control of our trading, or we can take control of our trading.
Interesting post, thanks for sharing.
