As Gandhi's quote suggests, our actions limited our priorities. The trader who fails to human activity is really oft prioritizing preservation of uppercase too avoidance of adventure too loss. The trader who acts excessively is prioritizing gain too avoidance of "missing out".
What I detect inward working with traders is that underaction too overaction happen inward a specific context. Very oft the trader has figured out the visit that would accept them long or curt a marketplace or stock. What they accept non explicitly outlined is the specific laid upwardly of atmospheric condition that would accept them human activity upon this idea. In other words, traders accept an idea, but non a clear "setup" standard that would accept them execute that idea.
In the absence of a clear entry or overstep signal, traders are left with ambiguity. That ambiguity is the fertile soil inward which those psychological priorities--avoidance or risk, fright of missing out--grow too instruct dominant. It is necessary to accept audio ideas with border to succeed inward trading, but having cracking ideas is non sufficient to convey success. One likewise must know how to implement those ideas. Without a audio soil for implementation, ideas cannot come upwardly to consistent too optimal fruition.
To hold upwardly sure, nosotros run into the contrary work every bit well. Traders volition grasp every bit "setups"--patterns of cost movement--as ideas too merchandise these without whatever objective verification of having a probabilistic border inward outcomes. "Selling is belongings at the X cost level" may hold upwardly a useful observation, but it is non a conception too inward itself confers no edge. A mutual work with daytraders is such eagerness to merchandise too brand coin that relatively fiddling fourth dimension is spent researching ideas that are genuinely worth trading too that accept the potential to brand money.
Once nosotros distinguish betwixt the visit we're trading too our conception for executing that plan, we're inward a amend house to figure out when nosotros take away to operate on our ideas too query (i.e., trading the incorrect ideas) too when nosotros take away to operate on the trading of those ideas (i.e., faulty execution of our ideas). Very often, nosotros overtrade too neglect to human activity on valid opportunities but because nosotros accept non been explicit almost the visit we're expressing too how nosotros are expressing it.
Further Reading: Why Disciplined Traders Make Bad Decisions
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