A WARNING TO START THE YEAR

The start of a new year can be a very exciting time, but also a very dangerous one. It’s exciting because it’s looked at as a fresh start where you can erase your sins of the prior year & start anew with new dreams, new ideas & new tactics.

From a trading perspective, this means a clean slate on your balance sheet & the chance to get off to a hot start. But be warned, this is a dangerous way of thinking for a few reasons.

TOO MUCH EXCITEMENT

The honest truth is that the market doesn’t offer as many opportunities as you may think. Correction, the market doesn’t offer as many GOOD opportunities as you may think. Most of trading is sitting on your hands & waiting for those good opportunities to show. However, when you’re overcome with excitement, waiting is easier said than done, especially as everyone else on your social media feed is bragging about how much they’ve already made. This will often cause a trader to bail on his/her plan & give in to finding action, vs. waiting for good trades & trust me that always ends poorly.

TOO MUCH CONFIDENCE

Getting off to a hot start is great, but it’s important that you don’t allow yourself to become overconfident. Overconfidence can lead to overtrading & the diminishing of quality of trading opportunities. It can also lead to overleveraging & trading a position size that is way too big. This year in particular, we have a major news event (Non-Farm Payrolls) happening at the end of week 1. No doubt a lot of traders will get lucky & happen to be on the right side of this move by pure accident. This can lead to a massive amount of overconfidence and cause a lot of major problems down the road.

TOO MUCH ANGER

Anger can cause a handful of responses. The need to get back at the market for what it took from you aka revenge trading. Or cold feet, fear of entering new trades because of the previous trades results.

It’s important to understand that trading is a marathon & we’re only at the beginning of the race. Take it from someone who has ran multiple marathons (not all smartly), you can’t win the race in the first mile…but you certainly can lose it.

If you want to hear more about this topic make sure you check out the video below featuring the live discussion that we had on it.

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Akil Stokes

Akil Stokes

Trader — Trading Coach — Host of The Trading Coach Podcast — Author for Entrepreneur & FX Trader Magazine — Proud Husband & Father — Sports Nerd & Coffee Addict