Trading Psychology: Comfort Zones and Mistakes in Your Trading

So what do you think? Should you be trading inside your comfort zones or slightly outside of them? There seems to be a lot of controversy about comfort zones when it comes to trading. And there are even those who say, you know, it's, it's such an emotional activity. You know, as soon as you click, you know, the button to enter a trade, it's like a shot of heroin. And so, you know, it's going to be that much of a rush. So really, the thing is, when you're trading, you know, should you be in that, you know, on edge and, you know, just really heightened and while you're focused and you're amped and that, you know, yeah, your energy's right up here, or should you be in a relaxed and calm state, you know, well, inside your comfort zones? Well, here's what I found over the years. If, you know, if your goal is consistent profits, you really want to be operating inside your comfort zones. And here's why. I mean, I think everybody can agree emotional trading is probably not going to be real successful. It's going to have a lot of errors and regrettable mistakes and, and trades that go south. If you're letting your emotions interfere with your trading. It's hard to make a judgment when, yeah, you're in an emotional state. Well, see, the problem is if while you're trading, you're outside your comfort zone, by definition, you are in an emotional state because you're outside your comfort zones. When you're in your comfort zone is when you can be relaxed and have a clear head and your emotions are at a low level outside of your comfort zones. Again, by definition, you're in an emotional state, whether it's anxiety or excitement or fear or hope or greed or whatever. But by definition, if you're outside your comfort zones, you're in an emotional state, which is not conducive to good trading, good decision making. And so, okay, so how do you stretch your comfort zone stuff? Let's say you're not starting off real aggressive with your trading. You don't have an aggressive strategy, you don't have a ton of money out there, but you're still having a hard time controlling your emotions anyway. So how do you deal with that? Well, from the perspective of comfort zones, one way that you can address that, really is by not stretching your comfort zones when you're trading with real money. Make sense? There is a time and a place to be stretching your comfort zones, but not when you got money on the line. Really, you want to be stretching your comfort zones just like now, again, just like with any other performance activity, there are times when, yes, you want to stretch yourself. You want to challenge yourself, you know, for the growth, for stretching, those comfort zones. And same thing with trading, but you just don't do it in your live account. With live trading, with real money, you want to do that in your sim account. And hopefully, hopefully, you're practicing outside of your normal trading hours. You're practicing your method just like you would with any other performance activity. So I love using golf as a metaphor here because it really is so applicable. If you wanted to get really good as a golfer and, you know, like, you know, be a competition golfer where you can enter tournaments for money and that kind of stuff, you wouldn't just sign up, you know, for tournaments and then, you know, run out and, you know, buy a nice set of clubs and then just show up at the tournaments and that's it. No, you get yourself a good set of clubs, and you would be over at the, you know, the driving range, working on your tee shot, you know, so, yeah, you can. You can put the ball where you want and you're getting the distance and you got the control and working on the curves and all that kind of stuff. You're working on your stance and your backswing and your grip and your posture. You'd be working on your game. You'd be spending time on the par threes, you know, working on your short game and your iron. So, you know, yeah, you can get on the green, and then you'd be spending a lot of time over on the putting green. So that once you're on the green, yeah, your putts are good. So, yeah, you can count on a two putt once you're on the green. And so the point is, if you're wanting to better your game, you know, maybe work on, you know, a little more challenging things, you do that while you're on the driving range or the par three or the putting green. You don't do it when you're in the middle of a tournament. That's not the time to be developing your game. That's when it's time just to just show up and perform well. Trading is the same way if you're not practicing your method outside of your trade, you know, your live trading, you're putting yourself at a huge disadvantage, and you're almost guaranteeing that you're going to be in an emotional state outside of your comfort zones. But see, it's when you're doing your practicing that that's when you can stretch Your comfort zones and really, you know, solidify so that when it does come time to show up and perform, your comfort zones are pretty wide because you've been practicing, you've been getting in the reps, you've been focusing on your game and you know you're good. And again, you've gotten in a lot of reps. I mean, put it this way, are you likely to be more comfortable placing a trade if you've only executed five trades with this particular strategy or if you've executed 500 trades? Well, yeah, obviously if you've executed 500 trades with a method, you're going to be pretty darn comfortable with it. But if you only, you know, if you're only, you know, using it when you're in live trades, your comfort level is going to be way lower. So getting in the reps, focusing on your game outside of your normal trading, you know, with real money is critical. That's when you expand your comfort zones and that's how you expand your comfort zones. And when you're trading, live trading, if you don't want to, you know, if you don't want to be making the stupid mistakes, you know, chasing trades, getting greedy, getting out early, you know, all that kind of stuff, if those are the things that you want to avoid, expand your comfort zones by putting in the reps, practice your trading outside of your normal trading time. And so that when you do show up, you'll be comfortable, you'll have a lot of reps. So you know, you won't be so bored and itching to get in on a trade. Cause you've already put in 50 this week. So, you know, yeah, to chase that trade. Nah, that itch to get in a trade has been satisfied. And you're again, your comfort level because your confidence is there because you've been practicing. So, you know, I hope this has been helpful. It has. You know, give me a, give me a like. And you know, maybe comment down below and subscribe to the channel. You know, if you find this helpful, if you have friends, you know, share it with your friends if you know you want them to do well. If you know you want to keep doing better than them. Okay, don't, don't share, share. But if you care about your friends, go ahead and share this with them. If you found helpful and you think it'll help them. So do you sometimes struggle with inconsistent results from your trading, you know, a little too much variability and in what you're getting, as far as, you know, winners and losers, if you like some help with your consistency. That's my area of expertise. I used to be a quality assurance manager. And quality is all about getting consistent results. Predictable, reliable results. So if you'd like my help with your trading, swing by insideouttrading.com to schedule a call with me. We'll get on. We'll talk about your situation, see if I can help you improve the consistency of your trading results. Talk to you soon.