I talk about trading psychology and the importance of developing good habits quite a lot…

There’s one subject that may not be as obvious as say not doubling down on a losing trade, or knowing to step aside when you’re obviously having a bad day, yet in many cases the mental toll it may put on you is tremendous.

I’m referring to a habit that most of us naturally have, even if subconsciously, to compare ourselves to others…

And when we’re talking about real money, such comparisons can become increasingly more disturbing.

Let’s go over why this happens and what you may do to reduce its effects on your trading performance.

Trading is a Competitive Sport

Look, in so many ways, trading is very much like any other competitive sport out there.

In basketball, you need to get to the ball first, make the most out of your time with it, and then make a quick yet thought-through decision whether to shoot or pass.

Needless to say, that’s no easy task given you’re playing alongside people trying to do the same exact thing.

To consistently prevail you must always strive to be faster, stronger, smarter, and sharper.

It’s a very competitive game and if you’re not ready to continuously practice, learn and grow better than your opponents – you won’t last long.

The same exact thing happens in trading – you’re competing against other traders in the market.

To consistently trade well, you have to get to information quicker than others, know what information matters, calculate your risks quickly and position accordingly, and once a move happens, make a quick yet thorough decision to cut a loss, take a profit, or hold for a larger move.

Much like professional athletes, traders have to stay competitive literally every screen minute of every day – and that puts a huge toll on any man out there.

Competitive people naturally have big egos, so it’s only fair you may feel agitated whenever you see some twitter kid bragging about a huge winner, while you’re sitting on a losing day full of bad trading decisions…

Trading Styles Differ

If you’re having a disastrous day, yet everyone else seems to be making money – don’t beat on yourself, that says nothing about your trading skill.

And the reason is simple – trading styles are very different.

Let me give you a real-life example here… I know two traders:

  • Trader 1 is a great scalper, he is green virtually every day and may only have 1-2 red days on any given month
  • Trader 2 can bleed for days and weeks on end… But then he hits a huge winner that more than covers all the drawdowns he took.

Both of them are incredible traders and outperformers on every front, yet if they start comparing themselves to each other – Trader 2 will get depressed when he loses money, Trader 1 will be angry as he doesn’t get big winners.

In trading, there are no simple comparisons… it’s always apples and oranges.

Don’t waste time looking at others; know your strengths and pursue them every day of the week.

You Can’t Make All the Money

Look, let’s go back for a second and focus on what your objectives are as a full-time trader.

In the NBA, you can win the championship – that’s every player’s biggest dream and number one end goal.

In trading – there’s no such thing.

You can sure strive to be the next legendary stock picker that the world talks about, but there’s no trophy.

Your only goal is to come in and consistently learn and make the trades that you know best.

There will always be somebody who makes more money than you, especially on any given day.

Your motivation should be to diligently follow your process, not make more money or all the money.

Learn From Others, not Envy

Whenever you see somebody obviously doing something better than you, don’t get angry.

Use that as a learning opportunity.

If a Twitter or a TV head is bragging about a stock trade, listen carefully, pull up the chart, and study what they did and how they did it.

See if you can apply parts of their process to yours, consider adding their playbooks to your skillset.

The market continuously evolves – what worked yesterday won’t work as well today and will likely stop working tomorrow.

If you see somebody doing well – take advantage of it, explore what edge they see that you aren’t seeing, and learn the heck out of it.

Jason Bond

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