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The Perfectly (Impossible) Trading Strategy

Perfect Trading Strategy

There is no such thing as a perfect strategy. Full stop. Repeat that to yourself over and over again until it’s burned in your brain. Whatever gurus or educational programs offer or promise, never forget that big truth – there is no perfect trading strategy.

The perfect trading strategy doesn’t exist because everything that occurs while trading is acting on a real market. It’s only presented as charts and appears as a set of rule based numbers and data. The reality is, it’s real, fluid data that is registered from real markets.

In such a reality, you can’t expect things to occur in solid patterns or happen in a rule based formula in such a way that you’d be able to find the perfect nuclear core reasoning for everything. There is no answer for everything. In this sense, trading is just like anything else is life. You will always be surprised by all the aspects that create the current circumstances. You can’t expect things in other parts of your life to magically come together or to resolve problems with the snap of a finger.

This is a very common misconception people come to trading with. Many come with an attitude that the market can be resolved with simple things like trend lines, trending channels, chart patterns, candlestick patterns, indicators, etc. All of these tools are mathematical interpretations of the market but when you remove the math, the market looks much more unruly and chaotic. That’s because it is a result of thousands of different driving forces that collide and work off each other. You can never predict this sort of frenetic activity perfectly.

Therefore, expecting to have the perfect predictive trading formula is a no go. Remember what we told you at the beginning of this article. Neglecting to accept this truth will only lead to frustration when you realize you can’t obtain it.

Unfortunately, many educators promise near complete accuracy when it comes to forecasting and predicting the market. Watch out for these snake oil salesmen and set off an alarm should you come across them. Avoid this type of education because it’s entirely unrealistic. The same warning applies to software that offers to do the hard work for you. Software can only code specific patterns or combinations of events which means it’s ill-equipped for the improvisation that is needed to successfully navigate a constantly shifting market.

Don’t Run from your Emotions

A quick Google search returns a handful of articles on how to restrain your mental impulses when it comes to trading. Many gurus or educators have tackled this subject by telling their proteges to simply avoid the mental aspects of trading. They avocate coming to a trade like a robot, pushing aside the human brain elements. Here’s another full stop for you – this approach is impossible. As human beings, trying to avoid these feelings will only cause trouble. Rather than denying our emotional nature, we need to embrace it and learn to control it. We need to find ways to work with this x factor because it’s not possible to delete it entirely.

Coming up with a solid action plan for how to deal with the emotions is the best step towards living and working with this most human element. Learn through your life and daily experience how to psychologically control your emotional experience while trading.

Another way to deal with your emotions, as suggested by “experts”, is taking automatic trading or expert advisers. Many vendors suggest this solution because it implies that you will be emotionless when executing automatic trades. This is a delusion, however, because the market never works by definite patterns. Even if you see patterns coming, remember that these patterns have very tiny new differences that change constantly, always affecting the outcome and algorithm you’re working with. Therefore taking auto trading is not a viable solution for dealing with your mental challenges in trading.

REPEAT – No Trade is Perfect

Expecting the perfect entry or exit, or expecting to hold on and take the full wave, are all things that are incredibly rare. This is the tough reality of trading – most of your trades will be far from perfect. Acknowledging this is incredibly important and can’t be stressed enough. If you expect perfection, you will suffer through a lot of frustration. There will always be a self criticism towards how you traded.

Accepting that no trade is perfect relieves you of a giant burden. Once you come to terms with this, you’ll only take what you expect and not dwell on what the best potential outcome would bring. You need to let it go and be happy with what you have, not upset with what you potentially could have received.

Imitation is a Ticket to Failure

Each one of us has different ways of understanding and processing situations. We all see things differently and experience market events uniquely. When you have a teacher or mentor, you can try to learn the concepts that they reveal to you, but you can’t expect to be successful the same way they are. What works for them can contribute to your success, but in order to really succeed, you will need to custom tailor everything you learn to fit your special way of thinking. This is key to explaining why someone might succeed where you fail despite both of you adhering to the same task plan.

Trading is NOT a Technical Task

We’ve mentioned this before but you should make sure to remember that trading is not a technical task. You cannot break down your strategy into a checklist that will work all of the time. You will experience so many scenarios that when coupled with your momentary mental state, will always provide new and unpredictable events. It’s therefore helpful to think of trading as more like management. It’s akin to dealing with people, risk, and emotion. You’ll need to know how to combine many different aspects of these elements in order to succeed. If you understand how all of these moving parts come together the most efficiently, that’s a great start towards successful trading.

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