What we’ll explore today affects everything in your
trading, from each individual trade to your bottom
line at the end of the month to your overall trading
experience.

What makes your trading frustrating or fulfilling?

Believe it or not, it’s not profits.

This is more important than that.

What is this tremendously powerful factor?

Your expectations.

Expectations are everything.

They set the tone for what happens in life.

They make EVERYTHING good or bad, tough or easy, fun or
frustrating, etc.

They are your judgmental filter to decide how you are going
to feel about things that happen – before you even
really ‘think’ about it.

How you feel about things affects your decision making,
which is what trading is all about.

How well your expectations are met by reality is what
determines your frustration or satisfaction level.

Let’s look at a couple examples and see, Good or Bad?

Example 1.

You walk into a restaurant and have a mediocre food
served to you by an apathetic server.  Was it a good
or bad meal?

It all depends on your expectations.

If you’re at a fast-food restaurant just off an interstate
highway, probably not, because you don’t expect much.

But if you’re in a $50-a-plate, bottled wine establishment,
you’re probably going to be sorely disappointed.

Example 2.

If you get a $8,000 a year raise, is it good or bad?

If the company has been talking about downsizing, cutbacks
and layoffs, you’ll probably be saying, “Gee Thanks!”

If you just got promoted to a position that requires you
to move your family to a much less than desirable locale
and the cost of living is twice what you’re used to, and
you’ll have to work an extra 20 hours per week, the “Gee
Thanks!” will probably sound a bit different coming out
of your mouth.

So what does this have to do with trading?

Everything.

Your emotions will affect your decisions, especially
when the pressure is on.  And how well your expectations
are met (or not met) will greatly influence how you FEEL
about what happens, particularly after the fact.

When this happens, it sets your expectations for the
next time, and how you feel going in.

And subsequently your decision-making.

Example 3.  Trading

Let’s say you’ve just had four losing trades in a row.

How does that affect the likelihood that you’ll stick
to your system on the next trade?

Will you keep your discipline or will you be tempted
to second-guess your system and not follow it?

It all depends on your expectations and how well they
are met with reality.

If your system is robust enough to handle 10 losers
and still be profitable at the end of the month (and
you KNOW this because you’ve backtested it and run
the metrics), then four in a row probably is no big
deal and you can comfortably keep your discipline.

Example 4.  Trading

How about if last month was a breakeven month, you
didn’t even make ten dollars.

Good or bad?

If you’re expectation was to make $25,000, then you’re
bumming for sure.

If you’ve had five or six losing months, then a break-
even month might be reason to celebrate.

Using This Information

So far we’ve been looking at past experiences, but you
need to know how to make use of this for the future.

So how do you get a handle on your expectations?

A great place to start is by setting objectives.

Objectives give you a clear target and a clear measure,
of what happens along the way.  The also provide context
for the everyday situations that come up.

Instead of every day being just ‘good’ or ‘bad’, when
you have specific objectives, you have a different and
more meaningful gauge.

You’ll also have more peace of mind knowing that you
have a compass to get to where you want to be down
the road.

The first training session in the Trading P.I.T. Club
is all about setting objectives.  Not only will you be
setting objectives, you’ll learn a very effective
approach and method for it that you can use in other
areas of your life.

To find out more and to take your trading to a whole
new level, go here

Trading Training

Cheers

Brian

P.S. Expectations are everything.  See how to set
yours to work in your favor today.

Trading P.I.T. (Professionals-In-Training) Club