As technology has developed we as a society have grown overly impatient. Often times stopping the microwave with a few seconds left, crossing the street before the light turns green, or pressing the elevator button 32 times as if it that helps. As I write this post I’m also checking charts and opening up my email but since those websites take more than 2 seconds to load I find myself drifting to other tasks while I wait. With this impatience we can begin to allow the small details to wander. But as with life and in trading, the details matter.
Every trade and nearly ever decision we make as traders, money managers, investors, or what have you impacts the P/L. You can nickel and dime yourself to death if you allow yourself. Many traders that I know and have a great respect for are deeply and passionately focused on the details. It’s starts from the custodian you trade through and the costs you pay for each executed order. Many retail investors pay an unearthly amount of money, that they likely don’t recognize, in order to have a brokerage account. They don’t take the time to find the best fit for them and realize how much commissions are eating into their potential profits.
As a technical-based trader it can be easy to torture a chart into telling me what I want to know. Trying to come up with some way to keep myself in a losing trade or taking on more risk than my process or system designates may seem minimal on a single trade but can have a larger impact on the psychology that impacts future positions.
This idea of focusing on the details in trading translates well into everyday life. It’s been said that the difference between a boy and a man is the understanding of the purpose and the use of a shoehorn. As children we often throw on our shoes forcing our heels to break past the shoe’s counter (the back piece of a shoe). This has little impact on the integrity of the shoe but after repeated forced entries the back of the shoe, the counter, begins to break down. Even though it seems as a small issue, a man recognizes the importance of a well-kept pair of shoes and begins to use the right tools. Details are essential.
To be a successful trader you must be focused and detail-driven. Understanding where the risk lie and what tools are needed to best impede their growth. Maintaining the growth of an account requires the use of the proper tools. Success starts with the use of a shoehorn.
Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer.