Any experienced options trader knows that it is exceptionally difficult to stay focused after a series of setbacks or losses.
Likewise, extremely profitable months can cause the trader to loose perspective and get greedy.
So how does a trader stay focused in spite of either great profits or significant losses? There are two tools that help traders stay focused.
By far, the biggest one is having a clearly defined long term trading objective, and a trading plan to help them get there.
Reviewing this regularly will help the trader know where he/she is going in his trading goals.
The second is having a good coach.
Every professional trader has a coach.
There are many different ways and formats to receive coaching (through the advice of blogs, forums, online coaching groups, private coaching...
the list goes on and on), but there is simply no substitute for another pair of eyes on your trading to help give the trader perspective and advice.
A coach and a trading plan will help the trader avoid the two biggest culprits for causing a loss of focus.
1.
) The fear of missing out.
When there is money to be made, most traders do not like sitting on the side lines.
This is a big one especially for beginning traders.
If an trading opportunity comes along that looks good, most panic that they will miss out on a big payday.
They do not want to look back with regret about missing an opportunity.
This leads to compromising their trading rules and can lead to a big loss.
2.
) The fear of loss.
Just as dangerous as the fear of missing out is the fear of loss.
This applies to trades that are going against the trader.
Instead of of relying on their trading plan, they panic because they do not want to loose any more money.
Taking the time to develop a sound trading plan and to seed out the advice of a coach will help a trader maintain focus when faced with either significant gains or big losses.