CAN MISSING A STOCK TRADE BUILD CONFIDENCE?

Learn how 10 is Greater Than 90 with The Crosshairs Trader's new eBook. Get your copy today!

The short answer: YES.  IF YOU ALLOW IT TOO. But allow me to provide some explanation. One of the psychological issues (yes there are more than one) that a trader must face is the fear of missing out. 

The fear I am going to discuss here is the fear generated by the last move of a stock that, in hindsight, could have made you money but you sat on the sidelines instead. 

The question you must ask yourself is:  1) did you miss the trade because it did not meet your trading rule parameters or 2) did you miss the trade due to lack of confidence? 

The answer can make a huge difference in your long-term success.

Take for instance the following chart of APPLE (AAPL), just one of the soldiers in my trading army. 

I developed a very simple technique wherein I enter trades based on my CROSSHAIRS parameters. 

The trades are entered on an intraday “deployment” chart with confirmation from a larger BATTLEFIELD TERRAIN chart.  For our purposes here, the deployment chart rules simply state that the blue line must cross the red line for entry.  If you look at the chart above you will see that there were two CROSSHAIRS entries on May 12 (PUTS) and then again on MAY 26 (CALLS), both of which were successful because I take quick option trading profits over and over again.

Now, look at the lines crossing in the squares. 

Why did I not take the trades within the squares even though they “appear” to look just like the other two AND each one would have also been profitable (assuming I would have quickly sold the options for a profit)? 

Because there is a subtle difference between these two and the two CROSSHAIRS trades. 

This subtle difference gives me the confidence and the patience I need to wait for my set-up.  I allow my set-up to come to me based on my rules.  By doing so I conquer the fear of missing out, not because I did not miss a potentially profitable move in the stock (I did) but because in my mind there was not a trade to miss! I did not miss the trade.  The trade missed me.  If my rules are not met, then there is no trade to miss! See the difference?

Subtle differences in the way we think about trading makes all the difference between the professional traders and the amateurs.  Just like the subtle differences in the chart example above.

Instead of focusing on what could have been, choose to focus on what might soon be.

CHT

“Patience and tenacity of purpose are worth more than twice their weight in cleverness.” 

Thomas Huxley

Related posts:

1. HIGH PROBABILITY TRADING IN THE CROSSHAIRS High probability trading focuses on your trade set-up as it...
2. TRADING CONFIDENCE AND THE CROSSHAIRS BATTLE EXIT LINE The battle exit line will not deceive you into thinking...
3. THE STOCK TRADER’S CIRCLE OF SUCCESS (AND FAILURE) The following graphic describes two types of traders. The first...
4. A SUCCESSFUL TRADE: THE CROSSHAIRS TRADER LOSS RULE WORKS AS PLANNED Although I have become very confident in the highly probable...
5. SUN TZU AND THE ART OF STOCK TRADING PATIENCE   “THERE ARE ROADS WHICH MUST NOT BE FOLLOWED, ARMIES...