How Indecisive Are You?
Do you have trouble pulling the trigger? How many profitable trades have you missed because you were uncertain and afraid to take action? It's too bad that we have to take risks. If every trading idea that popped into your head turned out to be profitable, you would never hesitate. You would have nothing to fear and you would take decisive action. Unfortunately, you've probably learned the hard way that not every trading idea is a good one. There's a good chance that a trading idea that you thought was a sure win will end up losing money. The possibility of being wrong and losing money can shake your confidence,
if you dwell on it do much.
Do you have a problem with hesitation? We asked a group of Innerworth subscribers to answer the following 10 questions on a 4-point scale. To what extent do you agree with each of the following items? If you strongly disagree with an item, give yourself a score of 1 for the item. If you disagree, give yourself a score of 2. If you agree, give yourself a score of 3 for the item, and if you strongly agree, give yourself a score of 4. Answer each of the following items, and see what score you get: 1) I scold myself when I make a bad trade. 2) I often mull over a trading strategy excessively before implementing it. 3) I often hesitate to act on a trade because I'm afraid that I have not anticipated every possible flaw in my trading strategy. 4) I feel angry or depressed when I lose even a small amount of money on a trade. 5) I often spend too much time analyzing a decision about a trade. 6) When I don't meet the goals I set for my trading, I become pretty upset with myself. 7) I try to devise a perfect trading strategy because losses are difficult for me to deal with later. 8) I hesitate to initiate a good trade unless I am absolutely certain that it will produce a profit. 9) When I realize I made a bad trade, I become consumed with anxiety and find it difficult to take action. 10) There have been times when I have hesitated in making a trade for so long that market conditions changed and I could no longer successfully implement my trading plan.
What score did you get? If you received a score between 10 and 20, you scored in the lower quartile, which means that less than 25% of the Innerworth subscribers who took this test obtained a score as low as yours. In an analysis of our database, we found that individuals who scored in this range tended to experience very low levels of stress, had an optimistic outlook, were flexible, independent thinkers and were able to cope with past failures easily. In contrast, if your score was between 27 and 40, you scored in the upper quartile, which means that 75% of the Innerworth subscribers who took this test obtained a lower score than yours. We found that individuals who scored in this range tended to experience higher levels of stress, had a pessimistic outlook, showed rigid and inflexible thinking, were overly concerned with past failures, and experienced unpleasant moods such as sadness, disappointment, and fear.
When your money is on the line, it's hard to stay relaxed and decisive, especially if you are a novice trader. Sometimes there's a good reason to feel afraid and hesitation is justified. Rather than impulsively jumping into a trade that may be a loser, it's useful to take a minute to think it over. But if you hesitate too much, you are likely to miss critical market moves and end up losing money. In his book, "Trading to Win," Ari Kiev suggests that novice traders don't trust their instincts because they think they don't have enough experience to take action on ideas based on shear intuition. It takes experience to feel at ease with your intuition, and many novice traders understandingly question their instincts. But not all first hunches are inaccurate. Many times, they are right on target. Your first hunch may be astute, and little is to be gained by further deliberation. But many traders don't want to take the chance. They want perfect, infallible information and confirmat ion. According to Dr. Kiev, however, the need for confirmation can distract you from taking decisive action. Over time you will learn to trust your instincts and act on them. Don't waste time unnecessarily deliberating. Sure, you don't want to make too many mistakes, but you can make a few occasionally with few repercussions. All you can do in the end is to do your best and keep building up your trading skills. You might as well work hard and think positively. With enough time and effort, you'll eventually develop the skills you need to achieve enduring financial success.
