copyright Ó 2009 by shahrul nizam hussin
Hope is a very common word that we use daily. One way or another, each of us must have had hoping for something, whether we admit it or not, especially when those things are beyond our control and achievement.
Looking at the reality of hoping, I wonder if there is any difference whether we hope or not? Will hope affect the outcomes of certain results or events? If the answer is none, then why do we hope? The key is because it is a universal trait of human being that even a 5 year old kid knew what hope is all about. (ie hoping papa will buy me a playstation for birthday etc).
Hence if we look hope from the trading perspective, frankly speaking H-O-P-E is the most unwanted four letter words that we should not apply in trading.
Why? There are at least 7 reasons that I could recall.
1. Hope kills. The more you hope the more money you’d lose and the more emotional you become.
Looking at the reality of hoping, I wonder if there is any difference whether we hope or not? Will hope affect the outcomes of certain results or events? If the answer is none, then why do we hope? The key is because it is a universal trait of human being that even a 5 year old kid knew what hope is all about. (ie hoping papa will buy me a playstation for birthday etc).
Hence if we look hope from the trading perspective, frankly speaking H-O-P-E is the most unwanted four letter words that we should not apply in trading.
Why? There are at least 7 reasons that I could recall.
1. Hope kills. The more you hope the more money you’d lose and the more emotional you become.
2. Hope will encourage you to trade blindly and carelessly. You simply hope that you are correct without thinking on the consequences.
3. Hope will encourage you to ride your losses as you are hoping the market to reverse.
4. In case you are right, hope will turn into greed that keeps you losing money. Say you are at 200 pips in profit and hope that you could make it another 100 before exits. Without proper analysis and realistic target, this kind of hope will surely kill.
5. Hopers are not realistic. They set ridiculous TP and gigantic SL. They wish for a home run that seldom happens. Again it kills.
6, Hopers live in different world. They put even more hopes in their trading when they managed to get their earlier hopes successfully or perhaps by chance. It only takes one mistake for these hopers to be flushed out of the market.
7. Hope will make you forget about all your previous mistakes. You will never learn and hence you can under no circumstances improve your knowledge and skills as a trader.
In short, hope will keep you frustrated when it is not happening. So, don’t hope.
The only thing that good about hope is it keeps your dream alive, well at least within your imagination. It may happen and it may not. At times, it is inevitable to hope when there is nothing else you could do. It is more to religious slant that turns one to become more humble and subservient to his God.
Anyhow from trading perspective, instead of hoping, you should trade with open eyes. Digest and analyse the market data that are available to you. After doing all that you can, then only you should consider taking informed decision whether to take the trade, wait or otherwise.
Finally, you should decide base on facts and the reality that if anything goes wrong, you can and probably have swallow all the paints upfront simply by understanding the consequences of your trading decision. Good risk management as well as patience in getting the right entry are all it takes in getting profitable trades. Not HOPE.
All the best to your trading!
In short, hope will keep you frustrated when it is not happening. So, don’t hope.
The only thing that good about hope is it keeps your dream alive, well at least within your imagination. It may happen and it may not. At times, it is inevitable to hope when there is nothing else you could do. It is more to religious slant that turns one to become more humble and subservient to his God.
Anyhow from trading perspective, instead of hoping, you should trade with open eyes. Digest and analyse the market data that are available to you. After doing all that you can, then only you should consider taking informed decision whether to take the trade, wait or otherwise.
Finally, you should decide base on facts and the reality that if anything goes wrong, you can and probably have swallow all the paints upfront simply by understanding the consequences of your trading decision. Good risk management as well as patience in getting the right entry are all it takes in getting profitable trades. Not HOPE.
All the best to your trading!
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