Trading Psychology | Do You Want To Be Right Or Do You Want To Make Money?
There seems to be an unspoken assumption that professional traders have to be “right” when they make a call on a stock or a market. This assumption, in my view, is made by the majority of the public and by novice traders.
One of the best lessons I learnt in my trading career is that it matters not whether I am right or wrong on my opinion about a particular market or stock, as long as I am making money. “Being right” is something that market analysts have to worry about (or as one of my mentors called it, the analists – if you catch my drift). Traders are focused on making money and care little if they are right or wrong.
Sure, I’ll admit, there is a part of my ego that does want to be right when I place a trade, say on Goldman Sachs, the Euro-dollar or the futures markets. But as a trader I have learnt to ignore the voice of my ego and instead focus on following my trading plan and setups.
Here is a brilliant article by professional trader, Peter Brandt, where he explains more about the difference between a market opinion and trading. I think it is an important lesson in trading psychology.
Does it matter to you whether an expert gets it right or wrong? Do you want to be right when you trade the markets? Does it hurt your ego when you’re wrong? Leave me your comments below.