Manage your expectations

My good friend Pam, love her to death, she’s the ultimate single girl. If you were to meet her, you would think of her as the coolest, I-never-want-to-be-married, free-like-a-bird, quintessential single gal. I know better though. We go way back and I know her story.

Yes, she is enjoying her single lady life to the fullest, but there is a reason why she is single. It was the summer of 2001. As juniors in college, Pam and I decided to go all out on our last summer before having to start adulating and travelled to Italy.

We would spend a month eating pasta and salami, drinking cheap red wine, sun tanning in pebbled beaches and staying in less-than-glamorous hostels. That’s the summer Pam met the love of her life (aka the Italian who broker her heart).

Italy has this way of making everything seem more romantic than it really is and promises of a “together forever” from a tall and handsome Italian with a broker English and a sexy accent took away Pam’s better judgement. I blame that summer for Pam’s seemingly fabulous single life.

What in the world do Italian summer flings have to do with trading, you must be wondering. Well, you see, Pam set too high expectations that summer and no other guy since has been able to meet those expectations, plus the fact that she will at all cost avoid pain, has kept her single through the years.

In trading, you’ll find that if you set too high expectations, you may find yourself blocking any information that would go against your strategy and trying to rationalize or diminish the significance of conflicting information, if or when your strategy doesn’t meet your expected goals.

If you don’t meet your expectations time and time again, you may begin to see that the feeling of disappointment and frustration will grow to such extent that you begin resenting the market, causing you to stop trading altogether.

Managing your expectations can be a key factor in determining your trading success.

It can help you to easily modify your view of the market conditions according to what price action is showing. You can learn to expect that the market will take a negative move and act accordingly, rather than being stubborn and keeping your opinions, even when the market is showing you different.

My wish to both Pam and you, the trader is: May you have the serenity to accept the things you cannot change (like the market) and the courage to manage those you can (your expectations).