In today’s blog, we are going to see how unrealistic expectations harm trading account. As humans, we keep a lot of unrealistic expectations from different things, whether it be relationships, investments, or other important aspects of life. We are habituated to instant gratification that eventually has nothing to do with our growth.
Instant gratification is one of the most common reasons why traders destroy their trading accounts.
As we all know, trading is a long process, and eventually, you will earn massive returns if you follow the right path, but due to instant gratification due to small profits or a series of winning trades, traders expect unrealistic returns from trading at the beginning stage of their trading career.
As I mentioned earlier, human minds are habituated to instant gratification, so we want instant results. Because of instant results, generally, many traders don’t follow the right process.
For example, many traders expect huge profit with minimal capital, and for that, they will buy stock in huge quantities with the help of leverage, and they will sell it immediately after the slight up move. When the stock goes against their view, they will keep holding it until it comes back, resulting in a bigger loss.
Similarly, traders feel desperate to make profits when they are in a winning trade. Generally, at the beginning of their trading career, traders tend to think that every swing trade they take must hit their target within no time!
But in reality, some trades take days, weeks, or even months to play out. Unless and until you are not allowing the market to move, you will not make big profits. So, next time whenever you take a swing trade, you should have some patience so that your trade can play out and you can capture large moves in the market.
It is also important to understand that you can not make money each day and in every trade. In trading, it is very important to know when to play defence and when to play offence; otherwise, you will not be able to make money in the long term from markets. Trading is not like a job where you have to work every day; you have to choose your setup and then trade.
Every trade that you take comes with a certain risk. Trading is risky, no doubt about it, but handling that risk matters the most. In markets, most people lose money because they only consider the reward associated with the trade, not risk. This is how having wrong expectations with your trades can hurt you financially and mentally.
Every trader has losing trades. There are traders who lose more trades than their winning trades but still come out profitable because of their risk management and money management, which is the only way to make money in trading. All these things will start making sense to you when you get more and more experience.
In trading, to make consistent money, you should ignore the things that give you instant pleasures. This includes not giving enough time to your trades to play out, booking up profits too early, holding your winning trades with an expectation of reversal, etc. These things will work most of the time in trading, but you will not make money by following these wrong principles.
For example, adding quantity to losing trades or holding your losing trades will work in your benefit 10 out of 9 times, but there will be one day where the market will keep going in one direction without any pullback, and on that day, if you are on a losing side, you will blow up your account, and all the hard work will go in vain.
Considering all the probabilities of the trade and truly accepting the risk you are taking before entering into the trade is the only way to make a sustainable trading career. One of the biggest advantages of doing this is when you pre-define your risk, you will not overreact to your losses, and as a result, you will truly understand the risk of your trade.
This is the best way through which you can develop patience and give your trades time to play out. Throughout my trading journey, I have understood that it takes a lot of hard work and patience to develop a trading system and follow it no matter what other people are telling you.
When I was in my learning phase, there were very few resources that provided me with the correct information, but now, through my Booming Bulls Elite Traders Live Mentorship Program, I have developed a complete framework for a long-term profitable & sustainable trading career, and by following my frameworks anyone with no prior knowledge can develop their edge in trading.
Lastly, I would like to conclude this article by saying that following your trading plan, respecting your target, and stop-loss while not keeping unrealistic expectations is the best way to grow your trading account.
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