In most situations in life, there are things we can control and things we can’t. This is especially true in situations that involve other people; we can account for our actions but not theirs.
For example, an Olympic athlete might want a gold medal, but whether they get one or not isn’t actually within their control. They could train as hard as possible and hire the best coaches in the world, but if someone else is better than them at competition time, they aren’t going to win.
This is also what we experience in the markets. We can perform fantastic analysis, be exceptionally well prepared and have a great system, but what the market does is still out of our control. We can still lose.
That can be a bitter pill to swallow, particularly for new traders who tend to believe, at least subconsciously, that as you get better at trading you achieve absolute certainty and control. Unfortunately not!
This leaves us with something we need to reconcile in our minds if we want to have the best chance of succeeding.
On one hand, we need to accept that we can’t control the markets. This will affect the way we look at many things. For example, when we’re setting goals, we shouldn’t be setting them based on our return, because that relies on aspects we can’t control.
Likewise, when we open a trade, no matter how confident we are, we need to always accept that our success isn’t guaranteed. The trade can still lose and if we accept that before we open the trade, it’s going to help us to be more resilient psychologically. This means we can approach each trade in the right way regardless of the outcome.
But, having some sense of control still matters.
Our level of effort, perseverance and belief depends on our perception of the level of control we have. If we have an external locus of control and believe our success in trading is entirely out of our hands, we’re not going to have the motivation to work hard. We’ll feel disheartened, deflated and frustrated.
Instead, we need to adopt an internal locus of control. We understand that there are aspects we can’t control, but there are also some we 100% can. Things like how much we prepare before a trading session, how well we control our risk management, how much time we spend practising and learning the skills deeply. These things won’t guarantee a good return, but they have a huge impact on our chance of achieving one.
By shifting your focus away from the things you can’t do anything about, and towards the things you can, you’ll bring out the best in yourself and great performance will follow.