Happy Wednesday, traders…
Jeff here.
Let me ask you something: Do your personality traits hold you back in the market?
For instance, you might think perfectionism is a strength — a badge of honor even. But in trading, it’s a silent killer.
No one hands out trophies for calling the perfect trade. Trust me, I’ve been at this game for over two decades, and I’ve never had anyone applaud me for getting it “just right.”
In fact, chasing perfection will do more harm than good. It’ll paralyze you, leaving you stuck overthinking every move while opportunities slip away.
And that’s just one of the mental traps traders fall into…
If you’re not careful, you might find yourself stuck in other dangerous habits: freezing when the pressure’s on, burying your head after a loss, or getting way too comfortable after a win.
With that in mind, let’s go over the three biggest mental traps that sabotage traders — and, more importantly, how you can steer clear of them…
Mental Trap #1: Striving for Perfection
Are you a perfectionist?
Well, I’ve got a bitter pill for you to swallow, but it’s the truth…
Perfectionism is the arch-nemesis of excellent trading.
You don’t get an award or a cookie for getting the perfect trade.
If I nail an ideal exit on a position, nobody shows up at my house with a blue ribbon and says, “Jeff, you got the absolute to-the-cent high on Microsoft!”
It just doesn’t happen like that…
Over my 25 years of professional trading, I’ve learned to forget about perfectionism.
I’ve learned that exiting, say, five cents below that perfect price gives me almost as much money without any international acclaim or recognition.
I can accept that.
What I want you to do is to get away from perfectionism.
Get in there and start trading — just do it.
Put a small position on. Always interact with the stock market. Be nimble, pulling little pieces out of the market organically.
On the one hand, when you’re in action — in a true flow state — you’ll end up trading the correct position.
On the other hand, if you strive for perfection, you might find yourself freezing up, not knowing how to proceed…
Mental Trap #2: Going Into “Ostrich Mode”
Have you ever been in a trade, trying to nail the perfect entry and exit, and felt like your head was in the sand?
You freeze up and go into Ostrich Mode…
On Wall Street, that’s a fireable offense.
What happens is your brain goes into a state of shock when you experience an extremely negative emotional event — like a big loss in the stock market.
But the good news is you can train that shock reaction out of your mindset.
The human brain is an unbelievable mechanism. There have been countless psychological studies on how you can control this phenomenon.
So, next time you find your confidence affected by a rough trade, don’t let yourself go into Ostrich Mode.
Take a deep breath, self-reflect on your loss, and make the adjustments you need to get your strategy back on track.
Don’t get stuck mentally after bad trades.
But don’t allow overconfidence to mess your game up either…
Mental Trap #3: Taking the “Victory Lap”
Do you find yourself taking “victory laps?”
You know what I mean…
You put on one good trade and start to feel invincible.
You think, “I’m having a great day. I’m the best in the world. That was the best trade!”
But trust me — this mindset is a recipe for disaster.
When I worked at a hedge fund, we had a hard ban on victory laps. The firm would fire you on the spot if it felt you were taking a victory lap.
Don’t gloat — and not because you’re gonna make someone feel bad…
Avoid gloating to make sure you don’t tilt on the upside.
(“Tilt” is a poker term for a state of mental or emotional confusion/frustration in which a player adopts a suboptimal strategy.)
If you tilt in the market — you’ll quickly lose your edge.
When you get too happy, you put yourself in an emotional state where you’re overvaluing a single victory.
On the contrary, winning should become something you’re used to. It shouldn’t be something you celebrate with champagne.
A lot of traders go on losing streaks right after a big win because they let their guards down and get cavalier, flippant, and lazy.
Don’t let this happen to you. Stay humble, forget about your last trade, and focus on what’s in front of you…
Happy trading,
Jeff Zananiri
P.S. My AI trading system has already delivered returns of 145% on QCOM, 235% on TECS, and even a staggering 900% on PBR…*
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*Past performance does not indicate future results
