1. Introduction
Imagine you just closed out a winning trade. Feeling like a market wizard, you jump right back into the next trade, eager to repeat the success. But this time, the trade goes against you, leaving you frustrated and questioning your skills. Sound familiar? We’ve all been there. In trading, getting caught up in the emotional roller coaster of wins and losses is easy – and damaging to your trading account.
But what if there was a better way to trade with more focus and less stress? That’s where the difference between a process-oriented mindset and a results-oriented mindset comes in.
Think of a process-oriented mindset as a well-defined roadmap for your trades. It helps you focus on making good decisions based on your plan, not just on the final outcome (win or lose). This approach is key to achieving long-term success in the markets.
2. Introduction The Allure (and Peril) Of Results-Oriented Trading
Have you ever gotten so excited about a win that you jumped right into another trade without much thought? Or maybe a losing streak made you completely abandon your strategy, feeling discouraged and lost?
It’s where you judge your every move based solely on the final outcome – a win feels like a good trade, and a loss feels like a bad one.
The problem? The market doesn’t care about your emotions. There will be times when you follow your strategy perfectly, and the trade goes against you. Likewise, you might make a risky impulse trade that happens to pay off.
The problem? The market doesn’t care about your emotions. There will be times when you follow your strategy perfectly, and the trade goes against you. Likewise, you might make a risky impulse trade that happens to pay off.
Results-oriented thinking can lead you down a dangerous path. You might chase wins by taking on trades that don’t fit your strategy, or overtrade to try and recoup losses. This can quickly spiral out of control and hurt your long-term results.
On the flip side, losing streaks can be brutal. But here’s the thing: a loss doesn’t always mean you made a bad decision and many traders abandon potentially profitable trading strategies too early. We’ll explore why focusing on the process is a much more sustainable approach in the next section.
With a process-oriented mindset, you take a long-term view. By consistently following your plan and managing risk, you increase your chances of statistically favorable outcomes over time, even if individual trades don’t always go your way.
