AK has been an analyst at long/short equity investment firms, global macro funds, and corporate economics departments. He co-founded Macro Ops and is the host of Fallible.
Ben Kim’s timidness on Billions is sad. Especially when he’s so smart and capable! But fortunately Wendy helps him get over it. Today we’ll use Ben’s example to find out how we can remove our own fears of entering a trade so we can get better returns out of this market.
There’s a few ways fear manifests itself when entering a trade. First, is the inability to size up on what looks like a great trade. Everything is lining up from the technicals, fundamentals, to sentiment, but with no confidence you won’t be able to capitalize on it. Lack of trust in yourself puts you at a huge disadvantage.
This becomes even worse when you’re operating in a drawdown, are are really struggling to make a winning trade. That bias against yourself becomes a big hindrance. A lot of traders even stop trading during this time, which sets them back even further.
So what’s the solution to this problem? It’s pretty simple. And it’s actually the solution to a lot of common trading problems…
Make a trading plan and stick to it!
The goal is to take yourself out of the decision making process. When you’re emotionally tilted, you want those trade decisions outsourced. If you have a trading plan that you follow, then those decisions are basically outsourced to yourself, but yourself at a different time, that isn’t influenced by all the emotions of right now.
“Confidence” shouldn’t even be a factor. All you need to do is shut your brain down and follow your plan. Don’t overthink it. All the hard thinking was done beforehand when you were putting together the plan. Your only focus should be on executing that plan.
If you’d like more videos like this, make sure to subscribe to our channel and hit that bell for notifications of new videos.