The Challenge of Comparing Trading Performance Across Different Time Periods Can Be Misleading: The Sailing⛵️Analogy
A🧵
Comparing trading performance from one period to another is not only an activity fraught with challenge, but often the act of comparison
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A🧵
Comparing trading performance from one period to another is not only an activity fraught with challenge, but often the act of comparison
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itself can itself be the catalyst for a period of sub-optimal trading performance.
To illustrate this, I will use a sailing
analogy:
Imagine a sailor⛵️ who sails around the world 🌍 in around 80 days, having had favourable winds💨 and sailing 🌊conditions.
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To illustrate this, I will use a sailing
analogy:
Imagine a sailor⛵️ who sails around the world 🌍 in around 80 days, having had favourable winds💨 and sailing 🌊conditions.
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The next time however, the winds aren’t as generous, and the seas not as easy to navigate🧭, thus the journey takes 120 days.
Would that sailor suddenly have become poor at their craft?
Not at all!
Their sailing time, on both occasions would have been influenced
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Would that sailor suddenly have become poor at their craft?
Not at all!
Their sailing time, on both occasions would have been influenced
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by factors beyond their control. One which worked in their favour for a fast time 🕰️ , the other working against them🐌
The same applies to trading.
Market conditions vary and can be in sharp contrast at different times.
Depending on a trader’s style and market💹.
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The same applies to trading.
Market conditions vary and can be in sharp contrast at different times.
Depending on a trader’s style and market💹.
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some periods can be super generous💰💰💰, producing great profits within generous trading conditions.
Other times can be extremely challenging, and just staying afloat becomes a challenge 😢
It is in these latter conditions, being good to yourself, and recognising the
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Other times can be extremely challenging, and just staying afloat becomes a challenge 😢
It is in these latter conditions, being good to yourself, and recognising the
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situation your in becomes vital.
The worst thing you can do during challenging periods is to turn in on yourself and assign self-blame🤬😡.
This ‘turning-in-on-yourself’ may cause far more damage than the unfavourable external factors themselves.
The difficulty becomes
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The worst thing you can do during challenging periods is to turn in on yourself and assign self-blame🤬😡.
This ‘turning-in-on-yourself’ may cause far more damage than the unfavourable external factors themselves.
The difficulty becomes
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compounded by the reality that we are trying to observe the market, yet are also part of it.
Assessing your performance based on previous "good times" can cause significant damage to your confidence, leading to self-doubt and hesitation just at the moment
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Assessing your performance based on previous "good times" can cause significant damage to your confidence, leading to self-doubt and hesitation just at the moment
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that you most need to be present and focused🔬on navigating a challenging environment.
This is why this job is so damned hard. - Sure the easy times are the good times, but its the times when it’s not working, when performance is negative, when your account is drawing down
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This is why this job is so damned hard. - Sure the easy times are the good times, but its the times when it’s not working, when performance is negative, when your account is drawing down
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that you need to be different.
There’s a brilliant quote, in a short story book written by a former Floor Trader Art Simpson, about a trader he called ‘the Phantom of the Pits’, where he says that ‘in the long run, the best loser is the long-term winner’.
As humans we
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There’s a brilliant quote, in a short story book written by a former Floor Trader Art Simpson, about a trader he called ‘the Phantom of the Pits’, where he says that ‘in the long run, the best loser is the long-term winner’.
As humans we
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are wired to make comparisons, it’s not a flaw or a failure to do so. But we must also understand that not all periods we compare are equal, and so we must try to rise up above that.
The secret to great trading, is not having the best set-ups, news, data, info, it is
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The secret to great trading, is not having the best set-ups, news, data, info, it is
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behaving in the ways that separate you from the herd.
What I have described above, is a way of being in trading. The great traders rise above the fray to fight their internal urge to make comparisons, or when they do, to react negatively to unfavourable comparisons
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What I have described above, is a way of being in trading. The great traders rise above the fray to fight their internal urge to make comparisons, or when they do, to react negatively to unfavourable comparisons
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