It perplexes us that many traders haphazardly jump into trades and risk significant capital without having a carefully thought-out plan. You should create the plan before the trade, not during. This helps keep the guesswork and emotions out of trading, and to focus on what is happening “in the moment.”
Objectivity is defined as “having to do with a material object; having actual existence; uninfluenced by emotions or personal prejudices; based on observable phenomena; presented factually.” One of Greg Capra’s famous axioms is, “It is what it is!”
Greg also coined the term “Mirage Trading” for those who make decisions based on the “wishes in their mind,” not on objective price data.
Master Trader methodology and strategies help you focus on “what is relevant” in the moment, to permit you to act (or not act) with unemotional clarity (i.e., objectivity).
When trading, it is easy to become emotionally involved because your capital is being “put on the line.” Often, traders fall into the mistake of counting “dollars and cents.” This is extremely unhealthy as it often causes people to mismanage their trades by focusing on things that do not matter to proper trade management.
Successful trading requires the employment of a systematic strategy.
To apply a consistently successful approach to trading, one must stay objective. One effortless way to do this, which I teach my students is to learn how to view a trade (or market) from the perspective as if you are not in the trade, even when you are.
Learn how to deal with losses so you don’t trade “scared.” Learn how to control your elation from a good day so you don’t feel “indestructible.”
Staying objective allows us to control our own selves effectively, reducing the chances of “self-destruction.” It also helps us view the market in an unbiased manner, allowing us to view it much more clearly.
As you can see, objectivity is a key component of all successful traders!
Dan Gibby
Chief Options Strategist
MasterTrader.com
