Equanimous Trading

In Blog by Michael Arnold

Happy man at deskSuccessful trading is almost always perceived incorrectly by the masses. It is depicted in the media as a fierce, macho battle with the markets. “Beat the market” is often used. “Cock-pit-style trading” is in a much run commercial that airs on the financial channels. Movies show arrogant smiles of victory and post-trading, Viking-style revels, celebrating victory. None of this is true. The psychological equivalent of successful trading is calm, not battle. Competitive trading is a path to failure, equanimous trading is the path to success.

“Equanimous” is a word not often associated with trading, but it should be. It is a derivative of the word “equanimity” which means: mental or emotional stability or composure, especially under tension or strain; calmness; equilibrium*. The tension or strain that comes with trading is self-inflicted; it is not placed upon traders by the market. If you trade franticly with no basis in a structured form of analysis, then it is nearly impossible to trade calmly or eqanimously. The market is more like an ocean than a battlefield.

Imaging being a surfer on the ocean and looking left and right, you see other surfers. Some are trying to surf away from shore, moving into the face of the waves, while others are surfing towards the shore, waiting for the right wave to ride. Which surfers would be struggling and which ones would be composed, enjoying their day of surfing? Successful traders sit calmly, like an experienced surfer, waiting for the right wave. Not every wave is the right one to ride. Some are too big and don’t match the level of skill and some are too small, not providing enough energy for a low-risk, enjoyable run. To be successful, one cannot fight the market, because it’s a fight no one can win. The market is never wrong.

Equanimous
The key is equanimous trading, and Nadex can help you get there. Being CTFC regulated as well as having limited risk products (which protected you from outsized losses) and limited reward products (which protect you from your own greed), binary trading at Nadex is often the correct first step. The second step is learning and mastering a time-tested, structured method of market analysis that can help you to trade equanimously. It is the only way to get there. So keep calm and trade on.

 

Futures, options and swaps trading involve risk and may not be appropriate for all investors. Past performance is not necessarily indicative of future results